Orion Digital Corp 6-K, filed Aug 11, 2021

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of August 2021

Commission File Number:  001-38409

Mogo Inc.

(formerly Mogo Finance Technology Inc.)

2100-401 West Georgia St.

Vancouver, British Columbia

V6B 5A1, Canada

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

	Form 20-F	☒Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

Form 6-K Exhibit Index

Exhibit<br><br><br>Number		Document Description
99.1		Unaudited interim condensed consolidated financial statements for the three months ended June 30, 2021 and 2020
99.2		Management’s discussion and analysis for the quarter ended June 30, 2021
99.3		Form 52-109F2 - Certificate of Interim Filings (CEO)
99.4		Form 52-109F2 - Certificate of Interim Filings (CFO)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Mogo Inc.
Date: August 11, 2021	By:	/s/ Gregory Feller
		Name:  Gregory Feller
		Title:    President & Chief Financial Officer

mogo-ex991_9.htm

Exhibit 99.1

		Page
Interim Condensed Consolidated Statement of Financial Position as at June 30, 2021 and December 31, 2020		F-2
Interim Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) for the three and six months ended June 30, 2021 and 2020		F-3
Interim Condensed Consolidated Statement of Changes in Equity (Deficit) for the three and six months ended June 30, 2021 and 2020		F-4
Interim Condensed Consolidated Statement of Cash Flows for the three and six months ended June 30, 2021 and 2020		F-6
Notes to the Interim Condensed Consolidated Financial Statements		F-7

Mogo Inc.

Interim Condensed Consolidated Statement of Financial Position

(Unaudited)

(Expressed in thousands of Canadian Dollars)

		Note				June 30,<br><br><br>2021				December 31,<br><br><br>2020
Assets
Cash and cash equivalent							55,406				12,119
Digital assets			6				1,184				—
Loans receivable			4				48,460				47,227
Prepaids, and other receivables and assets							7,474				2,994
Investment portfolio			19				19,173				18,445
Investment accounted for using the equity method			18				101,803				—
Property and equipment			7				1,154				892
Right-of-use assets							3,813				3,879
Intangible assets			8				62,404				18,912
Derivative financial assets			18				30,321				—
Goodwill			17				58,944				—
Total assets							390,136				104,468
Liabilities
Accounts payable, accruals and other							16,772				7,843
Lease liabilities							4,270				4,336
Credit facilities			9				37,476				37,644
Debentures			10				40,053				40,658
Convertible debentures			11				—				8,751
Derivative stock warrants			12				13,690				—
Total liabilities							112,261				99,232
Shareholders’ Equity
Share capital		21a					355,387				106,730
Contributed surplus							30,928				13,560
Foreign currency translation reserve							360				—
Revaluation reserve		6					26				—
Deficit							(108,826	)			(115,054	)
Total shareholders’ equity							277,875				5,236
Total equity and liabilities							390,136				104,468

Approved on Behalf of the Board

Signed by “Greg Feller”                 , Director

Signed by “Christopher Payne”     , Director

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

F-2

Mogo Inc.

Interim Condensed Consolidated Statement of Operations and Comprehensive Income (Loss)

(Unaudited)

(Expressed in thousands of Canadian Dollars)

				Three months ended								Six months ended
		Note		June 30,<br><br><br>2021				June 30,<br><br><br>2020				June 30,<br><br><br>2021				June 30,<br><br><br>2020
Revenue
Subscription and services					8,218				4,536				14,220				10,347
Interest revenue					5,447				6,023				10,865				14,122
		13			13,665				10,559				25,085				24,469
Cost of revenue
Provision for loan losses, net of recoveries		4			774				973				2,309				6,311
Transaction costs					797				14				1,209				191
					1,571				987				3,518				6,502
Gross profit					12,094				9,572				21,567				17,967
Operating expenses
Technology and development					3,486				1,148				5,704				2,942
Marketing					4,154				610				7,190				1,843
Customer service and operations					3,420				1,214				5,583				3,359
General and administration					4,253				1,919				7,636				4,353
Stock based compensation					3,805				460				4,362				674
Depreciation and amortization					2,971				2,287				5,389				4,512
Total operating expenses		14			22,089				7,638				35,864				17,683
(Loss) income from operations					(9,995	)			1,934				(14,297	)			284
Other expenses (income)
Credit facility interest expense		9			1,005				1,580				2,001				4,146
Debenture and other financing expense		5,10,11			871				1,946				1,823				3,830
Accretion related to debentures and convertible debentures					312				168				621				377
Share of loss in investment accounted for using the equity method		18			2,860				—				2,860				—
Revaluation (gains) losses		15			(24,850	)			1,186				(30,112	)			3,347
Other non-operating expenses (income)		16			752				(1,396	)			2,264				199
					(19,050	)			3,484				(20,543	)			11,899
Net income (loss) before tax					9,055				(1,550	)			6,246				(11,615	)
Income tax expense					10				—				18				—
Net income (loss)					9,045				(1,550	)			6,228				(11,615	)
Other comprehensive income (loss):
Items that are or may be reclassified subsequently to profit or loss:
Unrealized revaluation (loss) gain on digital assets		6			(550	)			—				26				—
Foreign currency translation reserve gain					72				—				360				—
Other comprehensive income (loss):					(478	)			—				386				—
Total comprehensive income (loss)					8,567				(1,550	)			6,614				(11,615	)
Net income (loss) per share
Basic earnings (loss) per share					0.142				(0.055	)			0.112				(0.417	)
Diluted earnings (loss) per share					0.134				(0.055	)			0.103				(0.417	)
Weighted average number of basic common shares (in 000s)					63,597				28,111				55,368				27,882
Weighted average number of fully diluted common shares (in 000s)					67,352				28,111				60,195				27,882

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

F-3

Mogo Inc.

Interim Condensed Consolidated Statement of Changes in Equity (Deficit)

(Expressed in thousands of Canadian Dollars)

		Number of<br><br><br>shares (000s)					Share<br><br><br>capital				Contributed<br><br><br>surplus				Foreign currency translation reserve				Revaluation reserve				Deficit				Total
Balance, December 31, 2020			32,731				$	106,730			$	13,560			$	—			$	—			$	(115,054	)		$	5,236
Loss and comprehensive loss			—					—				—				—				—				(2,817	)			(2,817	)
Foreign currency translation reserve			—					—				—				288				—				—				288
Revaluation reserve (Note 6)			—					—				—				—				576				—				576
Stock based compensation (Note 21b)			—					—				557				—				—				—				557
Options and restricted share units (“RSUs”) exercised			507					1,651				(816	)			—				—				—				835
Shares issued – ATM arrangement, net			1,525					17,315				—				—				—				—				17,315
Shares issued – Bought deal financing			5,347					47,122				—				—				—				—				47,122
Shares issued on acquisition of Carta (Note 17)			10,000					54,800				—				—				—				—				54,800
Shares issued – convertible debentures (Note 11)			3,179					8,783				—				—				—				—				8,783
Warrants issued for broker services (Note 21d)			—					—				1,410				—				—				—				1,410
Warrants exercised (Note 20d)			3,375					7,498				(1,615	)			—				—				—				5,883
Amortization of warrants (Note 20d)			—					—				269				—				—				—				269
Balance, March 31, 2021			56,664					243,899				13,365				288				576				(117,871	)			140,257
		Number of<br><br><br>shares (000s)					Share<br><br><br>capital				Contributed<br><br><br>surplus				Foreign currency translation reserve				Revaluation reserve				Deficit				Total
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Balance, March 31, 2021			56,664				$	243,899			$	13,365			$	288			$	576			$	(117,871	)		$	140,257
Loss and comprehensive loss			—					—				—				—				—				9,045				9,045
Foreign currency translation reserve			—					—				—				72				—				—				72
Revaluation reserve (Note 6)			—					—				—				—				(550	)			—				(550	)
Stock based compensation (Note 21b)			—					—				3,805				—				—				—				3,805
Options and restricted share units (“RSUs”) exercised			259					973				(305	)			—				—				—				668
Shares issued – ATM arrangement, net			—					(469	)			—				—				—				—				(469	)
Shares issued on acquisition of Moka (Note 17)			5,000					46,600				—				—				—				—				46,600
Shares issued on investment accounted for using the equity method  (Note 18)			6,741					63,878				13,901				—				—				—				77,779
Equity settled share based payment (Note 21b)			17					164				—				—				—				—				164
Warrants exercised (Note 21d)			122					342				(95	)			—				—				—				247
Amortization of warrants (Note 21d)			—					—				257				—				—				—				257
Balance, June 30, 2021			68,803					355,387				30,928				360				26				(108,826	)			277,875

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

F-4

Mogo Inc.

Interim Condensed Consolidated Statement of Changes in Equity (Deficit)

(Expressed in thousands of Canadian Dollars)

		Number of<br><br><br>shares (000s)					Share<br><br><br>capital				Contributed<br><br><br>surplus				Deficit				Total
Balance, December 31, 2019			27,558				$	94,500			$	8,861			$	(101,609	)		$	1,752
Loss and comprehensive loss			—					—				—				(10,065	)			(10,065	)
Stock based compensation (Note 21b)			—					—				214				—				214
Options and restricted share units (“RSUs”) exercised			6					30				(15	)			—				15
Shares issued – Partial settlement of credit facility prepayment			307					1,000				—				—				1,000
Amortization of warrants (Note 21d)			—					—				(381	)			—				(381	)
Balance, March 31, 2020			27,871					95,530				8,679				(111,674	)			(7,465	)
		Number of<br><br><br>shares (000s)					Share<br><br><br>capital				Contributed<br><br><br>surplus				Deficit				Total
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Balance, March 31, 2020			27,871				$	95,530			$	8,679			$	(111,674	)		$	(7,465	)
Loss and comprehensive loss			—					—				—				(1,550	)			(1,550	)
Stock based compensation (Note 21b)			—									460				—				460
Options and restricted share units (“RSUs”) exercised			37					114				(114	)			—				—
Equity portion - convertible debenture (Note 11)			—					—				617				—				617
Shares issued – convertible debentures (Note 11)			499					629				—				—				629
Shares issued to settle debt			427					537				—				—				537
Amortization of warrants (Note 21d)			—					—				515				—				515
Balance, June 30, 2020			28,834					96,810				10,157				(113,224	)			(6,257	)

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

F-5

Mogo Inc.

Consolidated Statement of Cash Flows

(Expressed in thousands of Canadian Dollars)

				Three months ended								Six months ended
		Note		June 30,<br><br><br>2021				June 30,<br><br><br>2020				June 30,<br><br><br>2021				June 30,<br><br><br>2020
Cash provided by (used in) the following activities:
Operating activities
Net income (loss)					9,045				(1,550	)			6,228				(11,615	)
Items not affecting cash:													—				—
Depreciation and amortization					2,971				2,287				5,389				4,512
Postmedia warrant expenses		21d			257				516				526				271
Provision for loan losses		4			961				1,311				2,822				6,983
Credit facility and debenture interest expense					1,876				3,526				3,823				7,976
Accretion related to debentures and convertible debentures					312				168				621				377
Share of loss from investment in associate					2,860				—				2,860				—
Stock based compensation expense		21b			3,805				460				4,362				674
Revaluation (gains) losses					(24,850	)			1,186				(30,112	)			3,347
Other non-operating (income) expenses					164				(34	)			490				(662	)
					(2,599	)			7,870				(2,991	)			11,863
Changes in:
Net issuance of loans receivable					(3,035	)			5,456				(4,055	)			3,428
Proceeds from sale of loan book					—				—				—				31,572
Prepaid expenses, deposits and other assets					(284	)			(180	)			(580	)			(375	)
Accounts payable and accruals					(1,054	)			(3,181	)			(1,197	)			(3,232	)
Cash generated from (used in) operating activities					(6,972	)			9,965				(8,823	)			43,256
Interest paid					(1,875	)			(1,736	)			(3,807	)			(5,839	)
Net cash (used in) generated from operating activities					(8,847	)			8,229				(12,630	)			37,417
Investing activities
Acquisition of a subsidiary, net of cash acquired					(281	)			—				1,820				—
Cash invested in investment accounted for using the equity method					(32,396	)			—				(32,396	)			—
Purchases of property and equipment					(73	)			—				(171	)			(23	)
Investment in digital assets					(500	)			—				(1,250	)			—
Investment in intangible assets					(1,038	)			(882	)			(2,221	)			(2,730	)
Net cash used in investing activities					(34,288	)			(882	)			(34,218	)			(2,753	)
Financing activities
Proceeds from sale of investment					4,625				—				4,625				—
Cash invested in investment portfolio					(1,700	)			—				(1,794	)			—
Lease liabilities – principal payments					(197	)			(114	)			(339	)			(273	)
Net repayments on debentures					(509	)			—				(1,011	)			(5	)
Net repayments on credit facilities					—				(6,272	)			(168	)			(37,333	)
Proceeds from issuance of common shares, net of transaction costs					(469	)			—				80,816				—
Proceeds from exercise of warrants					247				—				6,130				—
Proceeds from exercise of options					1,223				—				1,504				15
Net cash provided by (used in) financing activities					3,220				(6,386	)			89,763				(37,596	)
Net (decrease) increase in cash					(39,915	)			961				42,915				(2,932	)
Effect of exchange rate fluctuations					(146	)			—				372				—
Cash and cash equivalent, beginning of period					95,467				6,524				12,119				10,417
Cash and cash equivalent, end of period					55,406				7,485				55,406				7,485

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

F-6

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

1.	Nature of operations

Mogo Inc. (“Mogo” or the "Company") was continued under the Business Corporations Act (British Columbia) on June 21, 2019 in connection with the combination with Mogo Finance Technology Inc. (“Mogo Finance”). The address of the Company's registered office is Suite 1700, Park Place, 666 Burrard Street, Vancouver, British Columbia, Canada, V6C 2X8. The Company’s common shares are listed on the Toronto Stock Exchange (“TSX”) and the Nasdaq Capital Market under the symbol “MOGO”.

Mogo — a financial technology company — offers a finance app that empowers consumers with simple digital solutions to help them get in control of their financial health. Through the Mogo app, consumers can access a digital spending account with Mogo Visa* Platinum Prepaid Card featuring automatic carbon offsetting, easily buy and sell bitcoin, and get free monthly credit score monitoring, ID fraud protection, and personal loans. Mogo’s wholly-owned subsidiary, Carta Worldwide, also offers a digital payments platform that powers the next-generation card programs from innovative fintech companies in Europe, North America and APAC.

COVID-19 Pandemic

During the second quarter of 2021, the Canadian economy continued experiencing significant disruption and market volatility related to the global COVID-19 pandemic. The overall impact of the pandemic continues to be uncertain and dependent on actions taken by the Canadian government, businesses, and individuals to limit spread of the COVID-19 virus, as well as governmental economic response and support efforts.

The rapid worldwide spread of COVID-19 has prompted governments to implement restrictive measures to curb the spread of the pandemic. During this period of uncertainty, the Company’s priority has been to protect the health and safety of its employees, support and enforce government actions to slow the spread of COVID-19, and to continually assess and take appropriate actions to mitigate the risks to the business operations as a result of this pandemic.

The overall economic impacts of COVID-19 could include an impact on our ability to obtain debt and equity financing or potential future decreases in revenue or the profitability of our ongoing operations. This is an evolving situation, and the Company will continue to evaluate and adapt on an ongoing basis. The extent of the impact that this pandemic may have on the Canadian economy and the Company’s business is currently highly uncertain and difficult to predict.

The Company makes estimates and assumptions in preparing the interim condensed consolidated financial statements. These estimates and assumptions have been made taking into consideration the economic impact of the COVID-19 pandemic and the significant economic volatility and uncertainty it has created. There is a higher level of uncertainty with respect to management’s judgements and estimates at this time, particularly as it relates to the measurement of allowance for loan losses and fair valuation of our investment portfolio. The Company will continue to revisit our judgements and estimates where appropriate in future reporting periods as economic conditions surrounding the COVID-19 pandemic continue to evolve. Actual results could differ materially from these estimates, in which case the impact would be recognized in the interim condensed consolidated financial statements in future periods.

F-7

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

2.	Basis of presentation

Statement of compliance

These interim condensed consolidated financial statements have been prepared in accordance with International Accounting Standards ("IAS") 34, Interim Financial Reporting. The policies applied in these interim condensed consolidated financial statements were based on IFRS issued and outstanding at June 30, 2021.

The Company presents its interim condensed consolidated statement of financial position on a non-classified basis in order of liquidity.

The Company elected to change the presentation of its interim condensed consolidated statement of operations and comprehensive income (loss) to include stock based compensation and depreciation and amortization as separate items. The Group believes that this presentation is relevant to an understanding of its financial performance. Refer to note 14 for a reconciliation of total operating expenses to a presentation by function.

These interim condensed consolidated financial statements were authorized by the Board of Directors (the “Board”) to be issued on August 11, 2021.

These interim condensed financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the payment of liabilities in the ordinary course of business. Should the Company be unable to continue as a going concern, it may be unable to realize the carrying value of its assets and to meet its liabilities as they become due in the normal course.

Management routinely plans future activities which includes forecasting future cash flows. Management has reviewed their plan with the Board and has collectively formed a judgment that the Company has adequate resources to continue as a going concern for the foreseeable future, which Management and the Board have defined as being at least the next 12 months. In arriving at this judgment, Management has considered the following: (i) cash flow projections of the Company, which incorporates a rolling forecast and detailed cash flow modeling through the current fiscal year, and (ii) the base of investors and debt lenders historically available to the Company. The expected cash flows have been modeled based on anticipated revenue and profit streams with debt programmed into the model. Refer to notes 9, 10, 11, and 20 for details on amounts that may come due in the next 12 months.

For these reasons, the Company continues to adopt a going concern basis in preparing the interim condensed consolidated financial statements.

Functional and presentation currency

These interim condensed consolidated financial statements are presented in Canadian dollars, which is the Company's functional currency.

F-8

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

3.	Significant accounting policies

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Company’s annual consolidated financial statements for the year ended December 31, 2020, except for the accounting policies adopted subsequent to the business combination with Carta Solutions Holdings Corporation (“Carta”) on January 25, 2021, and the business combination with Moka Financial Technologies Inc. (“Moka”) on May 4, 2021, as discussed below (refer to note 17 for further details), and the adoption of new accounting policies applied as a result of the Company’s investment in digital assets.

Foreign currency translation

The interim condensed consolidated financial statements are presented in Canadian dollars, which is the Company’s functional and presentation currency. The functional currency of each subsidiary is determined based on the currency of the primary economic environment in which that subsidiary operates. Transactions in foreign currencies are initially recorded by the subsidiaries at their respective functional rates prevailing at the date of the transaction. Monetary items are translated into Canadian dollars at the exchange rate in effect as at the date of the interim condensed consolidated statement of financial position and non-monetary items are translated as at the rate of exchange in effect when the assets were acquired or the obligation was incurred. Revenue and expenses are translated at the exchange rate in effect at the time of the transaction. Foreign exchange gains or losses are recorded in the interim condensed consolidated statement of loss and comprehensive loss.

Foreign operations

The assets and liabilities of foreign operations are translated to the presentation currency using exchange rates at the reporting date. The income and expenses of foreign operations are translated to the presentation currency using exchange rates at the dates of the transactions. Foreign currency differences are recognized in other comprehensive income.

Revenue

Revenue is comprised of subscription and services and interest revenue. The Company introduced new subscription and services revenue streams through business combinations during the three and six months ended June 30, 2021 and adopted the following new revenue policies.

Transaction processing revenue

The Company’s transaction processing revenue is derived from long-term processing contracts with financial and non-financial institutions. Transaction processing revenue is generated primarily from [i] fees charged to set up a customer on the Company’s processing platform; and [ii] processing charges, including maintenance fees on cards on the Company’s processing platform, determined by the number of transactions processed and/or cards boarded by the Company for its customers.

Transaction processing revenue typically includes a performance obligation to provide processing services to its customers. The Company has determined that transaction processing services represent a stand-ready series of distinct daily services that are substantially the same, with the same pattern of service performed for the customer. As a result, the Company has determined that transaction processing revenue arrangements represent an individual performance obligation.

The Company recognizes set-up fees over the contract period, on a straight-line basis, commencing when services to set up a customer have been completed. The Company recognizes transaction processing charges, including maintenance fees, on a monthly basis based on the greater of the monthly minimum contracted revenue or the total actual transaction fees due based on the number of transactions processed.

F-9

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

3.	Significant accounting policies (Continued from previous page)

Service revenue

The Company earns service revenue through its offering of certain subscription-based saving and investing products. The Company’s service revenue is derived from monthly contracts with individual users.

The Company recognizes service revenue from the two performance obligations on a straight-line basis, over the length of the contract, on a monthly basis.

Management fee revenue

Revenue from management services consists of management fees earned through investment advisory services and from investment fund management.

Revenue is recognized when the services are provided based on the management fees set out in the corresponding contract and collectability is reasonably assured.

Exempt Market Dealer commission revenue

The Company’s Exempt Market Dealer commission revenue is earned by organizing, assisting and coordinating investments in privately held entities without a prospectus to third parties. The Company earns a commission based on the rate set out within the agreement and is payable upon completion of the services outlined in the agreement.

Restricted cash

The cash and cash equivalents disclosed above and in the statement of cash flows include $2,010 which are held by the Company. These deposits are subject to regulatory restrictions and are therefore not available for general use.

Investment in associate

An associate is an entity over which the Company has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. The considerations made in determining significant influence are similar to those necessary to determine control over subsidiaries.

The Company’s investment in its associate is accounted for using the equity method. Under the equity method, the investment in an associate is initially recognized at cost. The carrying amount of the investment is adjusted to recognize changes in the Company’s share of net assets of the associate since the acquisition date. Goodwill relating to the associate is included in the carrying amount of the investment and is not tested for impairment separately.

The statement of operations and comprehensive income (loss) reflects the Company’s share of the results of operations of the associate. Unrealized gains and losses resulting from transactions between the Company and the associate are eliminated to the extent of the interest in the associate.

F-10

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

3.	Significant accounting policies (Continued from previous page)

The aggregate of the Company’s share of an associate’s profit or loss after tax is shown on the face of the statement of operations and comprehensive income (loss) as a separate line item. The financial statements of the associate are prepared for the same reporting period as the Company. When necessary, adjustments are made to bring the accounting policies in line with those of the Company. After application of the equity method, the Company determines whether it is necessary to recognize an impairment loss on its investment in its associate. At each reporting date, the Company determines whether there is objective evidence that the investment in the associate is impaired. If there is such evidence, the Company calculates the amount of impairment as the

difference between the recoverable amount of the associate and its carrying value, and then recognizes the loss within its share of profit or loss of an associate in the statement of operations and comprehensive income (loss).

Goodwill

Goodwill represents the future economic benefits arising from a business combination that are not individually identified and separately recognized. Goodwill is measured at cost less accumulated impairment losses.

Goodwill is tested annually for impairment. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the Company’s cash-generating units (“CGU”) that are expected to benefit from the combination. For impairment testing purposes, the Company is determined to be a single CGU.

Intangible assets

Intangible assets, with the exception of digital assets, are measured at cost less accumulated amortization and impairment losses. Intangible assets include internally generated and acquired software, acquired technology assets, regulatory licenses, and customer relationships with finite useful lives. Acquired brand and trade names are considered to have indefinite useful lives. Internally generated software costs primarily consist of salaries and payroll-related costs for employees directly involved in the development efforts and fees paid to outside consultants.

Amortization is recorded at rates intended to amortize the cost of the intangible assets over their estimated useful lives as follows:

		Rate
Software - Internally generated		5 years straight line
Software licenses		5 years straight line
Technology assets - Acquired		10 years straight line
Customer relationships		5 years straight line
Regulatory licenses		5 years straight line
Brand and trade name		Indefinite

Digital assets

Digital assets represent investments in cryptocurrencies held by the Company that are classified as indefinite life intangible assets. The Company has ownership and control over its digital assets and uses third-party custodial services to secure them. The Company has concluded that digital assets are traded in an active market where there are observable prices and digital assets are measured under the revaluation model at fair value at the revaluation date less any accumulated impairment loss.

F-11

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

3.	Significant accounting policies (Continued from previous page)

Acquisitions are recognized at cost and are remeasured to fair value at the end of the period by reference to active markets. We determine the fair value of our digital assets in accordance with IFRS 13, Fair Value

Measurement, based on market approach using quoted prices on the active exchanges for digital assets (Level 1 inputs). Digital assets are remeasured to fair value on this basis at each reporting date. In addition, we perform an analysis each quarter to identify whether events or changes in circumstances in addition to market price, provide indicators of impairment. A decrease in value due to impairment identified in this manner is accounted for as a fair value decrease below.

Fair value increases are recognized as other comprehensive income and recorded to a revaluation reserve, except to the extent that the increase reverses a previous revaluation decrease on the same asset recognized in net loss, in which case a gain up to the amount of the loss previously charged to net loss is recognized in net profit. Fair value decreases are recognized as other comprehensive loss to the degree that these reduce any accumulated revaluation reserve, with any decrease in excess of the revaluation reserve recognized in net loss.

Significant accounting judgements, estimates and assumptions

The preparation of the interim condensed consolidated financial statements requires management to make estimates, assumptions and judgments that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amount of revenues and expenses during the period. The critical accounting estimates and judgments have been set out in the notes to the Company’s consolidated financial statements for the year ended December 31, 2020.

New and amended standards and interpretations

Certain new or amended standards and interpretations became effective on January 1, 2021, but do not have an impact on the interim condensed consolidated financial statements of the Company. The Company has not adopted any standards or interpretations that have been issued but are not yet effective.

4.	Loans receivable

Loans receivable represent unsecured installment loans and lines of credit advanced to customers in the normal course of business. Current loans are defined as loans to customers with terms of one year or less, while non-current loans are those with terms exceeding one year. The breakdown of the Company’s gross loans receivable as at June 30, 2021 and December 31, 2020 are as follows:

		June 30,<br><br><br>2021				December 31,<br><br><br>2020
Current (terms of one year or less)			56,203				54,978
Non-current (terms exceeding one year)			496				1,135
			56,699				56,113

F-12

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

4.	Loans receivable (Continued from previous page)

The following table provides a breakdown of gross loans receivable and allowance for loan losses by aging bucket, which represents our assessment of credit risk exposure and by their IFRS 9 expected credit loss (“ECL”) measurement stage. The entire loan balance of a customer is aged in the same category as its oldest individual past due payment, to align with the stage groupings used in calculating the allowance for loan losses under IFRS 9. Stage 3 gross loans receivable include net balances outstanding and still anticipated to be collected for loans previously charged off and these are carried in gross receivables at the net expected collectable amount with no associated allowance.

				As at June 30, 2021
Risk Category		Days past due		Stage 1				Stage 2				Stage 3				Total
Strong		Not past due			47,827				—				—				47,827
Lower risk		1-30 days past due			1,815				—				—				1,815
Medium risk		31-60 days past due			—				592				—				592
Higher risk		61-90 days past due			—				504				—				504
Non-performing		91+ days past due or bankrupt			—				—				5,961				5,961
		Gross loans receivable			49,642				1,096				5,961				56,699
		Allowance for loan losses			(4,600	)			(656	)			(2,983	)			(8,239	)
		Loans receivable, net			45,042				440				2,978				48,460
				As at December 31, 2020
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Risk Category		Days past due		Stage 1				Stage 2				Stage 3				Total
Strong		Not past due			47,590				—				—				47,590
Lower risk		1-30 days past due			1,571				—				—				1,571
Medium risk		31-60 days past due			—				720				—				720
Higher risk		61-90 days past due			—				415				—				415
Non-performing		91+ days past due or bankrupt			—				—				5,817				5,817
		Gross loans receivable			49,161				1,135				5,817				56,113
		Allowance for loan losses			(5,425	)			(772	)			(2,689	)			(8,886	)
		Loans receivable, net			43,736				363				3,128				47,227

F-13

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

4.	Loans receivable (Continued from previous page)

The Company’s measurement of ECLs is impacted by forward looking indicators (FLIs) including the consideration of forward macroeconomic conditions. In light of the COVID-19 pandemic, management has applied a probability weighted approach to the measurement of ECL as at June 30, 2021, involving multiple scenarios and additional FLIs. The primary FLIs impacting ECL include rate of loans experiencing financial difficulty and collections. Additional factors considered include the possibility of a prolonged economic recession, the effectiveness of collection strategies implemented to assist customers experiencing financial difficulty (including varying potential levels of defaults for customers who have been offered payment deferral plans), the extent to which government subsidies will continue to be available as the COVID-19 pandemic continues, and the level of loan protection insurance held by customers within our portfolio.

Allowance for loan losses		Three months ended								Six months ended
		June 30,<br><br><br>2021				June 30,<br><br><br>2020				June 30,<br><br><br>2021				June 30,<br><br><br>2020
Balance, beginning of period			9,182				15,145				8,886				16,020
Derecognition of allowance associated with loan sale			—				—				—				(2,131	)
Provision for loan losses			961				1,311				2,822				6,983
Charge offs			(1,904	)			(4,142	)			(3,469	)			(8,558	)
Balance, end of period			8,239				12,314				8,239				12,314

As at June 30, 2021, our allowance for loan losses includes $922 of management overlay added due to the present economic uncertainties caused in part by the COVID-19 pandemic (December 31, 2020 - $1,049). The Company believes this provides adequate provision to absorb the impact on our loan book of any reasonably possible potential deterioration in future macroeconomic conditions that may result from the ongoing COVID-19 pandemic.

The provision for loan losses in the interim condensed consolidated statement of operations and comprehensive loss is recorded net of recoveries for the three and six months ended June 30, 2021 of $187 and $513 respectively (three and six months ended June 30, 2020 - $338 and $672 respectively).

On February 28, 2020, Mogo completed the sale of the majority of its non-current (“MogoLiquid”) loan portfolio (the “Liquid Sale”) for gross consideration of $31,572, de-recognized net loan receivables of $29,896 and recognized a corresponding gain on sale of loan book amounting to $1,676. This gain is presented within other non-operating expenses, in the interim condensed consolidated statement of operations and comprehensive loss.

5.	Related party transactions

Related party transactions during the three and six months ended June 30, 2021 include transactions with debenture holders that incur interest. The related party debentures balance as at June 30, 2021 totaled $259 (December 31, 2020 – $358). The debentures bear annual coupon interest of 8.0% (December 31, 2020 – 8.0%) with interest expense for the three and six months ended June 30, 2021 totalling $5 and $12 respectively (three and six months ended June 30, 2020 – $14 and $25 respectively). The related parties involved in such transactions include shareholders, officers, directors, and management, close members of their families, or entities which are directly or indirectly controlled by close members of their families. The debentures are ongoing contractual obligations that are used to fund our corporate and operational activities. In relation to the amendment to the terms of debentures on September 30, 2020 (see note 11), 35,831 warrants were issued to related parties with a fair value of $28.

On June 30, 2021, the Company acquired 1,300,000 common shares of Tetra Trust Company from its associate Coinsquare Ltd. for $1,300.

F-14

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

6.	Digital assets

Digital assets represent investments in cryptocurrencies which the company expects to hold for the foreseeable future.

		Average cost per unit				Quantities				Total Average cost				Fair value per unit<br><br><br>June 30, 2021				Total fair value<br><br><br>June 30, 2021				Cumulative revaluation gain (loss)
Bitcoin (BTC)		$	42,079				17.82			$	750			$	44			$	776			$	26
Ethereum (ETH)			3,425				145.99				500				3				408				(92	)
																			1,184				(66	)

In January 2021, the Company purchased $750 of Bitcoin and in April 2021, the Company purchased $500 of Ethereum. During the three and six months ended June 30, 2021, the Company recorded $550 of revaluation loss and $26 of revaluation gain respectively on digital assets through other comprehensive income (loss). During the three and six months ended June 30, 2021, the Company recorded $92 of revaluation loss through net income (loss). As at June 30, 2021, the carrying value of our digital assets held was $1,184.

7.	Property and equipment
		Computer<br><br><br>equipment				Furniture<br><br><br>and fixtures				Leasehold<br><br><br>improvements				Total
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Cost
Balance at December 31, 2019			4,513				1,180				2,509				8,202
Additions			22				—				—				22
Disposals			(2,452	)			—				(454	)			(2,906	)
Balance at December 31, 2020			2,083				1,180				2,055				5,318
Additions			170				—				—				170
Additions through business combinations			298				15				—				313
Effects of movement in exchange rate			(8	)			(1	)			—				(9	)
Balance at June 30, 2021			2,543				1,194				2,055				5,792
Accumulated depreciation
Balance at December 31, 2019			3,761				733				1,935				6,429
Depreciation			229				91				311				631
Disposals			(2,443	)			—				(191	)			(2,634	)
Balance at December 31, 2020			1,547				824				2,055				4,426
Depreciation			175				37				—				212
Balance at June 30, 2021			1,722				861				2,055				4,638
Net book value
Balance at December 31, 2020			536				356				—				892
Balance at June 30, 2021			821				333				—				1,154

F-15

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

7.	Property and equipment (Continued from previous page)

Upon the completion of the acquisition of Carta on January 25, 2021 and Moka on May 4, 2021, the Company recognized property and equipment with a fair value of $298 and $15 respectively, along with effects of exchange rate movement related to foreign subsidiaries on the interim condensed consolidated statement of financial position.

Depreciation of $nil for the three and six months ended June 30, 2021 respectively (three and six months ended June 30, 2020 - $113 and $227 respectively) for leasehold improvements are included in general and administration expenses. Depreciation expense of $127 and $212 for the three and six months ended June 30, 2021 respectively (three and six months ended June 30, 2020 - $83 and $163 respectively) for computer equipment, furniture and fixtures is included in technology and development costs.

8.	Intangible assets
		Internally<br><br><br>generated –<br><br><br>completed				Internally<br><br><br>generated –<br><br><br>in progress				Software<br><br><br>licenses				Acquired technology assets				Customer relationships				Brand				Regulatory licenses				Total
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
Cost
Balance at December 31, 2019			34,849				1,388				3,356				—				—				—				—				39,593
Additions			—				4,796				—				—				—				—				—				4,796
Transfers			4,655				(4,655	)			—				—				—				—				—				—
Balance at December 31, 2020			39,504				1,529				3,356				—				—				—				—				44,389
Additions			—				2,197				25				—				—				—				—				2,222
Additions through a business combination			—				—				628				32,900				4,000				900				7,700				46,128
Transfers			1,936				(1,936	)			—				—				—				—				—				—
Effects of movement in exchange rate			—				—				(24	)			—				—				—				—				(24	)
Balance at June 30, 2021			41,440				1,790				3,985				32,900				4,000				900				7,700				92,715
Accumulated depreciation
Balance at December 31, 2019			15,138				—				3,198				—				—				—				—				18,336
Amortization			7,093				—				48				—				—				—				—				7,141
Balance at December 31, 2020			22,231				—				3,246				—				—				—				—				25,477
Amortization			3,516				—				105				946				136				—				131				4,834
Balance at June 30, 2021			25,747				—				3,351				946				136				—				131				30,311
Net book value
Balance at December 31, 2020			17,273				1,529				110				—				—				—				—				18,912
Balance at June 30, 2021			15,693				1,790				634				31,954				3,864				900				7,569				62,404

Upon the acquisition of Carta on January 25, 2021 and Moka on May 4, 2021, the Company recognized intangible assets with a fair value of $22,928 and $24,200 respectively, on the interim condensed consolidated statement of financial position.

Intangible assets include internally generated development costs, acquired software and technology assets, regulatory license, and customer relationships with finite useful lives. Amortization of intangible assets of $2,379 and $4,533 for the three and six months ended June 30, 2021 respectively (three and six months ended June 30, 2020 – $1,935 and $3,795 respectively) are included in technology and development costs.

F-16

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

9.	Credit facility

The credit facility consists of a $50,000 senior secured credit facility maturing on July 2, 2022. The credit facility is subject to variable interest rates that reference to 1 month USD LIBOR, or under certain conditions, the Federal Funds Rate in effect. Interest on advance is payable at 1 month USD LIBOR plus 9% (with a 1 month USD LIBOR floor of 1.5%) on the greater of the actual aggregate unpaid principal balance, or the prescribed minimum balance under the credit facility agreement. There is a 0.33% fee on the available but undrawn portion of the $50,000 facility. The balance outstanding for the Credit Facility-Other as at June 30, 2021 was $37,476 (December 31, 2020 - $37,644).

On February 28, 2020, in conjunction with the Liquid Sale, Mogo repaid and extinguished its Credit Facility – Liquid, which held a principal outstanding balance of approximately $28,683 immediately prior to derecognition. As part of extinguishing the facility in advance of its maturity, Mogo recognized a prepayment penalty of $2,500 of which $1,500 was payable in cash and of which $1,000 was settled in shares on March 5, 2020, through the issuance of 306,842 common shares, priced at $3.259 per share.

Credit facility - Other is subject to certain covenants and events of default. As at June 30, 2021 the Company was in compliance with these covenants. Interest expense on the credit facility is included in credit facility interest expense in the interim condensed consolidated statement of operations and comprehensive loss.

10.	Debentures

On September 30, 2020, the Company and its debenture holders approved certain amendments to the terms of the debentures, with an effective date of July 1, 2020. Among other things, the amendments include:

	i)	a reduction in the weighted average coupon interest rate, from approximately 14% to approximately 7% and the extension of the maturity date for 50% of the principal balance to January 31, 2023, and the remainder to January 31, 2024;
	ii)	replacement of the former monthly interest payable by a new quarterly payment (the “Quarterly Payment”), the amount of which is fixed at 12% per annum (3% per quarter) of the principal balance of the debentures as at September 29, 2020. Debenture holders received an election to either receive the Quarterly Payment as a) an interest payment of 8% per annum (2% per quarter) with the remainder of the payment going towards reducing the principal balance of the debenture, or b) a reduction of the principal balance of the debenture equal to the amount of the Quarterly Payment;
---	---	---
	iii)	settlement of the new Quarterly Payment on the first business day following the end of a calendar quarter at the Company’s option either in cash or the Company’s common shares; and
---	---	---
	iv)	an option for all debenture holders to receive a lump-sum payout of their previously unpaid interest for the period from March 1, 2020 to June 30, 2020, at a reduced interest rate of 10%. Those who elected this option were paid in common shares of the Company in October 2020 subsequent to the end of the quarter.
---	---	---

On October 7, 2020, Mogo issued 4,479,392 warrants (the “Debenture Warrants”) to its debenture holders in connection with the debenture amendments approved on September 30, 2020, at an exercise price of $2.03 per warrant. The Debenture Warrants are exercisable at any time until December 31, 2022. As at June 30, 2021, 3,174,610 warrants have been exercised and converted into common shares for cash proceeds of $6,444. As at June 30, 2021, 1,304,782 Debenture Warrants remain outstanding and exercisable.

F-17

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

10.	Debentures (Continued from previous page)

The Company’s debentures balance includes the following:

		June 30,<br><br><br>2021				December 31,<br><br><br>2020
Principal balance			42,231				43,442
Discount			(2,953	)			(3,575	)
			39,278				39,867
Interest payable			775				791
			40,053				40,658

The debenture principal repayments will be made according to the following schedule and are payable in either cash or Mogo common shares at Mogo’s option:

		Principal component of quarterly payment				Principal due on maturity				Total
2021			1,545				—				1,545
2022			2,174				—				2,174
2023			3,279				16,355				19,634
2024			937				17,941				18,878
			7,935				34,296				42,231
11.	Convertible debentures
---	---

On June 6, 2017, the Company issued 10% convertible debentures of $15,000 aggregate principal amount at a price of one thousand dollars per debenture, with a maturity date of May 31, 2020. On May 27, 2020, the Company amended the remaining $12,621 principal value of convertible debentures (the “Amendments”) to include, among other things, an extension of the maturity date to May 31, 2022, and a reduction in the conversion price of the principal by 45% from $5.00 to $2.75 per common share (the “Conversion Price”).

On December 10, 2020, the Company gave notice to the holders of the convertible debentures that it was exercising its early conversion right such that the convertible debentures would be converted to common shares at the Conversion Price of $2.75 per share on or about January 11, 2021.

F-18

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

11.	Convertible debentures (Continued from previous page)

On January 11, 2021, the Company converted all of the outstanding balance related to principal and interest of convertible debentures into 3,178,930 common shares.

The following table summarizes the carrying value of the convertible debentures as at June 30, 2021:

		Net book<br><br><br>value,<br><br><br>June<br><br><br>30, 2021				Net book<br><br><br>value,<br><br><br>December<br><br><br>31, 2020
Convertible debentures			8,751				11,963
Transaction costs			—				(755	)
Net proceeds			8,751				11,208
Conversion of debentures to equity			(8,683	)			(3,754	)
Accretion in carrying value of debenture liability			—				1,228
Accrued interest			32				684
Interest converted in shares and paid			(100	)			(615	)
			—				8,751
12.	Derivative stock warrants
---	---
	On February 24, 2021, in connection with a registered direct offering, Mogo issued stock warrants to investors to purchase up to an aggregate of 2,673,268 common shares at an exercise price of US$11.00 at any time prior to three and a half years following the date of issuance.
---	---

The stock warrants are classified as a liability under IFRS by the sole virtue of their exercise price being denominated in USD. As such, the warrants are subject to revaluation under the Black Scholes model at each reporting date, with gains and losses recognized to the interim condensed consolidated statement of operations and comprehensive loss. The stock warrants are classified as a derivative liability, and not equity, due to the exercise price being denominated in USD, which is different than the Company's functional currency.

In the event that these warrants are fully exercised, the Company would receive cash proceeds of US$29,406, with the balance of the liability reclassified to equity at that time. If the warrants were to expire unexercised, then the liability would be extinguished through a gain in the interim condensed consolidated statement of operations and comprehensive loss.

		June 30, 2021				December 31, 2020
Balance, December 31, 2020			—				—
Stock warrants issued at February 24, 2021			15,767				—
Change in fair value due to revaluation of derivative stock warrants			(1,820	)			—
Change in fair value due to foreign exchange			(257	)			—
Balance, June 30, 2021			13,690				—

Change in fair value due to revaluation of stock warrants for the three and six months ended June 30, 2021 was a loss of $2,108 and $1,820 respectively. Change in fair value due to foreign exchange for the three and six months ended June 30, 2021 was a loss of $303 and $257 respectively.

F-19

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

12.	Derivative stock warrants (Continued from previous page)

Details of the derivative stock warrants as at June 30, 2021 are as follows:

		Warrants<br><br><br>Outstanding and exercisable<br><br><br>(000s)				Weighted<br>Average<br>Exercise<br>Price
As at December 31, 2020			—				—
Warrants granted			2,673				13.83
As at June 30, 2021			2,673				13.83

All values are in US Dollars.

The 2,673,268 warrants outstanding noted above have an expiry date of August 2024.

The fair value of the warrants outstanding was estimated using the Black-Scholes option pricing model with the following assumptions:

		For the<br><br><br>six months ended<br><br><br>June 30,<br><br><br>2021				For the<br><br><br>year ended<br><br><br>December 31,<br><br><br>2020
Risk-free interest rate		0.24%-0.46%					—
Expected life		3.2 years					—
Expected volatility in market price of shares		91%-95%					—
Expected dividend yield			0%				—
Expected forfeiture rate			0%				—
13.	Geographic information
---	---

Revenue presented below has been based on the geographic location of customers.

		Three months ended								Six months ended
		June 30,<br><br><br>2021				June 30,<br><br><br>2020				June 30,<br><br><br>2021				June 30,<br><br><br>2020
Canada			11,653				10,559				21,906				24,469
Europe			1,869				—				3,014				—
Other			143				—				165				—
Total			13,665				10,559				25,085				24,469

F-20

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

14.	Expense by function

The following table summarizes the Company’s operating expenses by function including stock based compensation and depreciation and amortization:

		Three months ended								Six months ended
		June 30,<br><br><br>2021				June 30,<br><br><br>2020				June 30,<br><br><br>2021				June 30,<br><br><br>2020
Technology and development			6,969				3,329				11,477				7,128
Marketing			4,192				621				7,232				1,859
Customer service and operations			4,377				1,210				6,553				3,363
General and administration			6,551				2,478				10,602				5,333
Total operating expenses			22,089				7,638				35,864				17,683
15.	Revaluation (gains) and losses
---	---
		Three months ended								Six months ended
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
		June 30,<br><br><br>2021				June 30,<br><br><br>2020				June 30,<br><br><br>2021				June 30,<br><br><br>2020
Unrealized exchange loss			164				67				400				94
Change in fair value due to revaluation of derivative financial asset			(24,808	)			—				(24,808	)			—
Change in fair value due to revaluation of derivative stock warrant			(2,107	)			—				(1,820	)			—
Realized (gain) on investment portfolio			—				—				(2,460	)			—
Unrealized loss (gain) on investment portfolio			1,901				856				(1,424	)			3,279
Unrealized (gain) on other receivable			—				—				—				(289	)
Losses related to property and equipment			—				263				—				263
			(24,850	)			1,186				(30,112	)			3,347

On April 28, 2021, the Company sold its investment in Vena Solutions Inc. for cash proceeds of $4,625. The resultant gain on sale was recorded within unrealized (gain) loss on investment portfolio during the three months ended March 31, 2021 and is realized during the three months ended June 30, 2021.

F-21

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

16.	Other non-operating (income) expenses
		Three months ended								Six months ended
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
		June 30,<br><br><br>2021				June 30,<br><br><br>2020				June 30,<br><br><br>2021				June 30,<br><br><br>2020
Gain on sale of loan book			—				—				—				(1,676	)
Credit facility prepayment and related expenses			—				19				(5	)			2,618
Government grants			(602	)			(1,332	)			(1,208	)			(1,332	)
Direct offering transaction costs allocated to warrant liability			—				—				1,466				—
Acquisition costs, restructuring and other			1,354				(83	)			2,011				589
			752				(1,396	)			2,264				199

On February 28, 2020, Mogo completed the Liquid Sale and recognized a gain on sale of loan book amounting to $1,676 (refer to Note 4). On the same date, Mogo repaid and extinguished its Credit Facility – Liquid and recognized an early prepayment expense of $2,500 as a result of paying down the facility in advance of the maturity date (refer to Note 9).

Due to the outbreak of COVID-19, the Government of Canada announced the Canadian Emergency Wage Subsidy (“CEWS”) and Canadian Emergency Rent Subsidy (“CERS”) to support companies that have experienced a certain level of revenue decline in their operations. Mogo has determined that it qualifies for the CEWS and CERS and has made an accounting policy election to record the grants on a gross basis. As a result, Mogo has recorded other non-operating income of $602 and $1,208 for the three and six months ended June 30, 2021 respectively (three and six months ended June 30, 2020: $1,332 in respect of CEWS) in respect of the CEWS and CERS.

Direct offering transaction costs allocated to warrant liability of $1,466 relate to the issuance of warrants with a USD denominated exercise price to investors. This resulted in the recognition of a derivative financial liability and the allocation of the associated transaction costs to other non-operating expenses (refer to Note 12 for further details).

F-22

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

17.	Business combinations

Acquisition of Carta:

On January 25, 2021, Mogo completed the acquisition of all of the issued and outstanding securities of Carta in exchange for 10,000,000 common shares of Mogo with a fair value of $54,800 based on Mogo's closing share price at the acquisition date.

Acquisition-related costs of $379 not directly attributable to the issuance of the common shares are included in other non-operating (income) expenses in the interim condensed consolidated statement of operations and comprehensive loss and in operating cash flows in the statement of cash flows.

The acquisition is expected to significantly expand Mogo’s total addressable market by entering the global payments market, increase revenue scale and accelerate the growth of its high-margin subscription and transaction-based revenue, and strengthen the Company’s digital wallet capabilities which includes the development of its peer-to-peer payment solution planned for 2021.

In the period January 25, 2021 to June 30, 2021, the operations of Carta contributed revenue of $3,477 and net loss of $970. If the acquisition had occurred on January 1, 2021, management estimates that proforma consolidated revenue would have been $25,550 and proforma consolidated net profit would have been $5,810 for the year ended December 31, 2021. In determining these amounts, management has assumed the fair value adjustments, determined, that arose on the date of business combination would have been the same if the acquisition had occurred on January 1, 2021.

F-23

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

17.	Business combination (Continued from previous page)

The following tables summarizes the fair value of consideration transferred, and its provisional allocation to estimated fair values assigned to each major class of assets acquired and liabilities assumed at the January 25, 2021 acquisition date. The Company may adjust the provisional purchase price allocation, as necessary, up to one year after the business combination date as new information is obtained about facts and circumstances that existed as of the closing date. The purchase price allocation process was not completed at the publication date of the interim condensed consolidated financial statements. The amounts allocated to certain assets and liabilities, goodwill, and intangibles below are preliminary and may be restated upon completion of the purchase price allocation process.

		January 25, 2021
		000's
Assets acquired:
Cash and cash equivalent			2,101
Prepaids, and other receivables and assets			1,692
Property and equipment			270
Right-of-use assets			316
Intangible assets			22,928
Goodwill			32,294
			59,601
Liabilities assumed:
Accounts payable, accruals & other			4,485
Lease liabilities			316
			4,801
Net assets acquired at fair value			54,800
Share consideration			54,800

All values are in US Dollars.

Acquisition of Moka:

On May 4, 2021, Mogo completed the acquisition of all of the issued and outstanding securities of Moka, one of Canada's leading saving and investing apps. Mogo has acquired all of the issued and outstanding shares of Moka in exchange for the issuance of 4,999,991 Mogo common shares with a fair value of $46,600 based on Mogo's closing share price at the acquisition date, and cash consideration of $4,508 pursuant to the terms of a share exchange agreement among Mogo, Moka and all of the shareholders of Moka. In connection with the acquisition of Moka, the Company exchanged equity-settled share-based payments awards held by the employees of Moka for 366,343 equity-settled share-based payments awards of the Company with a contractual life of eight years.

Acquisition-related costs of $536 not directly attributable to the issuance of the common shares are included in other non-operating (income) expenses in the interim condensed consolidated statement of operations and comprehensive loss and in operating cash flows in the statement of cash flows.

The acquisition is expected to bring differentiated saving and investing products to broaden Mogo’s wealth offering and accelerate the growth of its high-margin subscription and transaction-based revenue.

F-24

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

17.	Business combination (Continued from previous page)

The following tables summarizes the fair value of consideration transferred, and its provisional allocation to estimated fair values assigned to each major class of assets acquired and liabilities assumed at the May 4, 2021 acquisition date. The Company may adjust the provisional purchase price allocation, as necessary, up to one year after the business combination date as new information is obtained about facts and circumstances that existed as of the closing date. The purchase price allocation process was not completed at the publication date of the interim condensed consolidated financial statements. The amounts allocated to certain assets and liabilities, goodwill, and intangibles below are preliminary and may be restated upon completion of the purchase price allocation process.

		May 4, 2021
		000's
Assets acquired:
Cash and cash equivalent			4,227
Prepaids, and other receivables and assets			2,208
Property and equipment			40
Intangible assets			23,200
Goodwill			26,650
			56,325
Liabilities assumed:
Accounts payable, accruals & other			5,217
			5,217
Net assets acquired at fair value			51,108
Share consideration			46,600
Cash consideration			4,508
Total consideration transferred			51,108

All values are in US Dollars.

F-25

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

18.	Investment accounted for using the equity method

On April 16, 2021, the Company completed its initial strategic investment (the “Initial Investment”) in Coinsquare Ltd. (“Coinsquare”), Canada’s leading digital asset trading platform, pursuant to which Mogo has acquired 6,450,607 Coinsquare common shares, representing 19.99% ownership interest in Coinsquare, for total aggregate consideration of $55,359, comprising of a cash payment of $27,396 and the issuance of 2,807,577 Mogo common shares valued at $27,963 to Coinsquare and certain selling shareholders of Coinsquare. The transaction also included:

	•	a right for Mogo to purchase 3,223,690 common shares from certain selling shareholders at $8.29 per Coinsquare common share (the “Call Option”), whereby Mogo has an option to pay the purchase consideration fully in Mogo common shares.
	•	a right for these certain selling shareholders to require Mogo to purchase 3,223,690 Coinsquare common shares (the “Put Option”), whereby the Call Option and Put Option are subject to certain exercise conditions, and whereby the exercise of either one of the Call Option or the Put Option results in the immediate expiry of the another, and;
---	---	---
	•	a warrant to acquire 7,240,665 additional Coinsquare common shares through treasury at an exercise price of $8.29 per warrant, subject to certain conditions and payable by Mogo at least 50% in cash and the remainder in Mogo common shares (the “Coinsquare Warrant”).
---	---	---

On June 4, 2021, Mogo acquired an additional 5,412,222 common shares of Coinsquare which increased Mogo’s ownership in Coinsquare from 19.99% to approximately 36.74%, through two separate transactions executed on that day, specifically:

	•	the exercise of the Call Option, to acquire 3,223,690 Coinsquare common shares from certain selling shareholders, with total consideration paid through the issuance of 2,791,904 Mogo common shares, and;
	•	the purchase of 2,188,532 Coinsquare common shares from a selling shareholder pursuant to a share purchase agreement for a total consideration of 2,288,972 Mogo shares to be issued in three equal tranches on June 4, July 4 and August 4, 2021 respectively. As at June 30, 2021, 1,525,982 Mogo common shares in the amount of $13,901 remain issuable under this arrangement.
---	---	---

On June 15, 2021, Mogo purchased an additional 655,644 common shares of Coinsquare from a selling shareholder which increased Mogo’s ownership from 36.74% to approximately 38.77%, for total aggregate consideration of $8,523, consisting of a cash payment of $5,000 and the issuance of 378,774 common shares of Mogo valued at $3,523. This transaction includes a right for Mogo (the “New Call Option”) to purchase addition 1,100,000 Coinsquare shares under certain conditions, at an exercise price of $13.00 per Coinsquare common share.

The Company’s initial 19.99% position in Coinsquare and subsequent investments are accounted for using the equity method in the interim condensed consolidated financial statements, effective as at the date of the Initial Investment on April 16, 2021, as Mogo participates in all significant financial and operating decisions of Coinsquare, even though it holds just under 20% of the voting rights. Therefore, the Company has determined that it exerted significant influence over Coinsquare as at that date.

The Company determined that the Call Option, Put Option, Coinsquare Warrant and New Call Option are classified as derivative financial instruments on the statement of financial position, fair valued using the Black-Scholes valuation model at initial recognition, and subsequently remeasured to fair value as at each reporting date. Any change in the fair value of these derivative financial instruments is recognized to revaluation gains (losses) in the interim condensed consolidated statement of operations and comprehensive income (loss).

F-26

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

18.	Investment accounted for using the equity method (Continued from previous page)

The following table shows an allocation breakdown of the total $55,359 Initial Investment between the 19.99% investment, the Call Option, the Put Option and the Coinsquare Warrant, and further reconciles the total revaluation gains (losses) recognized on the derivative instruments in the three months ended June 30, 2021:

		Initial recognition date		Initial fair value on recognition				Call/Put Option fair value at exercise				Value at June 30, 2021				Revaluation (gains) losses
Initial 19.99% investment		16-Apr-21			45,506			n/a					45,506				—
Call Option		16-Apr-21			2,978				5,513				—				(2,535	)
Put Option		16-Apr-21			(3,533	)			—				—				(3,533	)
Coinsquare Warrants		16-Apr-21			10,408			n/a					29,282				(18,874	)
Total - Initial Transaction					55,359												(24,942	)
New Call Option		15-Jun-21			1,173			n/a					1,039				134
Total revaluation (gains)																	(24,808	)

Immediately prior to the exercise of Call Option on June 4, 2021, the Company fair valued its Call Option and Put Option to $5,513 and $nil respectively, and recorded revaluation gains of $2,535 and $3,533 respectively on these instruments in the interim condensed consolidated statement of operations and comprehensive income (loss) for the three and six months ended June 30, 2021. The exercise of Call Option resulted in the immediate expiry of the Put Option, accounted for through a derecognition of the Call Option and Put Option derivative assets from the statement of financial position and a corresponding increase to the investment in Coinsquare.

The fair value of the Coinsquare Warrant, Call Option, Put Option and New Call Option were estimated using the Black-Scholes option pricing model with the following assumptions:

		For the<br><br><br>six months ended<br><br><br>June 30,<br><br><br>2021
Risk-free interest rate		0.30%
Expected life		0.26 - 0.83 years
Expected volatility in market price of shares		69%-76%
Expected dividend yield			0%
Expected forfeiture rate			0%

F-27

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

18.	Investment accounted for using the equity method (Continued from previous page)

The following table summarizes the fair value of net assets and the Company’s share of net assets acquired:

		As at June 30, 2021
		000's
Current assets			103,210
Non-current assets			45,333
Current liabilities			(79,814	)
Non-current liabilities			(2,646	)
Net assets			66,083
Company's share of net assets - 38.77%			25,620
Goodwill			76,183
Carrying amount of interest in associate			101,803
		April 16, 2021 to June 30, 2021
Revenue			19,574
Net income from continuing operations (100%)			465
Post-tax loss from discontinued operations (100%)			(33	)
Total comprehensive income			432
Company's share of total comprehensive loss			(2,860	)
Initial investment in Coinsquare			45,507
Step up investments in Coinsquare			59,156
Total investments in Coinsquare			104,663
Share of loss in associate			(2,860	)
Carrying amount of equity accounted investment			101,803
Mogo's share of:
Loss from continuing operations			(2,852	)
Loss from discontinued operation - after tax			(8	)
Other comprehensive income			-
Total other comprehensive loss			(2,860	)

All values are in US Dollars.

F-28

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

19.	Fair value of financial instruments

The fair value of a financial instrument is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants which takes place in the principal (or most advantageous) market at the measurement date. The fair value of a liability reflects its non-performing risk. Assets and liabilities recorded at fair value in the interim condensed consolidated statement of financial position are measured and classified in a hierarchy consisting of three levels for disclosure purposes. The three levels are based on the priority of the inputs to the respective valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). An asset or liability's classification within the fair value hierarchy is based on the lowest level of significant input to its valuation. The input levels are defined as follows:

	•	Level 1: Unadjusted quoted prices in an active market for identical assets and liabilities.
	•	Level 2: Quoted prices in markets that are not active or inputs that are derived from quoted prices of similar (but not identical) assets or liabilities in active markets.
---	---	---
	•	Level 3: Unobservable inputs that are supported by little or no market activity and are significant to the estimated fair value of the assets or liabilities.
---	---	---
	(a)	Valuation process
---	---	---

The Company maximizes the use of quoted prices from active markets, when available. A market is regarded as active if transactions take place with sufficient frequency and volume to provide pricing information on an ongoing basis. Where independent quoted market prices are not available, the Company uses quoted market prices for similar instruments, other third-party evidence or valuation techniques.

The fair value of financial instruments determined using valuation techniques include the use of recent arm’s length transactions and discounted cash flow analysis for investments in unquoted securities, discounted cash flow analysis for derivatives, third-party pricing models or other valuation techniques commonly used by market participants and utilize independent observable market inputs to the maximum extent possible.

The use of valuation techniques to determine the fair value of a financial instrument requires management to make assumptions such as the amount and timing of future cash flows and discount rates and incorporate the Company’s estimate of assumptions that a market participant would make when valuing the instruments.

F-29

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

19.	Fair value of financial instruments (Continued from previous page)
	(b)	Accounting classifications and fair values
---	---	---

The following table shows the carrying amount and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. There has not been any transfer between fair value hierarchy levels during the year. The fair value disclosure of lease liabilities is also not required.

						Carrying amount																Fair value
June 30,<br><br><br>2021		Note				Mandatorily<br><br><br>at FVTPL				Financial<br><br><br>asset at<br><br><br>amortized cost				Other<br><br><br>financial<br><br><br>liabilities				Total				Level 1				Level 2				Level 3				Total
Financial assets measured at fair value
Investment portfolio:
Equities							19,173				—				—				19,173				—				253				18,920				19,173
Derivative assets			18				30,321				—				—				30,321				—				—				30,321				30,321
							49,494				—				—				49,494
Financial assets not measured at fair value
Cash and cash equivalent							—				55,406				—				55,406				55,406				—				—				55,406
Loans receivable – current			4				—				56,203				—				56,203				—				56,203				—				56,203
Loans receivable – non-current			4				—				496				—				496				—				—				651				651
Other receivables							—				1,637				—				1,637				—				1,637				—				1,637
							—				113,742				—				113,742
Financial liabilities measured at fair value
Derivative stock warrants		12					13,690				—				—				13,690				—				13,690				—				13,690
							13,690				—				—				13,690
Financial liabilities not measured at fair value
Accounts payable and accruals							—				—				16,075				16,075				—				16,075				—				16,075
Credit facilities			9				—				—				37,476				37,476				—				37,476				—				37,476
Debentures			10				—				—				40,053				40,053				—				40,053				—				40,053
							—				—				93,604				93,604

F-30

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

19.	Fair value of financial instruments (Continued from previous page)
						Carrying amount																Fair value
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
December 31,<br><br><br>2020		Note				FVTPL				Financial asset at amortized cost				Other financial liabilities				Total				Level 1				Level 2				Level 3				Total
Financial assets measured at fair value
Investment portfolio:
Equities							18,445				—				—				18,445				—				154				18,291				18,445
							18,445				—				—				18,445
Financial assets not measured at fair value
Cash and cash equivalent							—				12,119				—				12,119				12,119				—				—				12,119
Loans receivable – current			4				—				54,978				—				54,978				—				54,978				—				54,978
Loans receivable – non-current			4				—				1,135				—				1,135				—				—				1,064				1,064
							—				68,232				—				68,232
Financial liabilities not measured at fair value
Accounts payable, accruals and other							—				—				7,843				7,843				—				7,843				—				7,843
Credit facilities			9				—				—				37,644				37,644				—				37,644				—				37,644
Debentures			10				—				—				40,658				40,658				—				40,658				—				40,658
Convertible debentures			11				—				—				8,751				8,751				—				8,751				—				8,751
							—				—				94,896				94,896
	(c)	Measurement of fair values:
---	---	---
	(i)	Valuation techniques and significant unobservable inputs
---	---	---

The Company has been closely monitoring developments related to COVID-19, including the existing and potential impact on its investment portfolio. As a result of the ongoing and developing COVID-19 pandemic and its resulting impact on the global economy, the Company believes that there is increased uncertainty to input factors on fair value of our Level 3 investments, including revenue multiples, time to exit events and increased equity volatility.

The following tables show the valuation techniques used in measuring Level 3 fair values for financial instruments in the statement of financial position, as well as the significant unobservable inputs used.

F-31

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

19.	Fair value of financial instruments (Continued from previous page)

Financial instrument measured at FV

Type	Valuation technique	Significant unobservable inputs	Inter-relationship between significant unobservable inputs and FV
Investment portfolio:
Equities
Unlisted	• Price of recent investments in the investee company<br><br><br><br><br><br>• Implied multiples from recent transactions of the underlying investee companies<br><br><br><br><br><br>• Offers received by investee companies<br><br><br><br><br><br>• Revenue multiples derived from comparable public companies and transactions<br><br><br><br><br><br>• Option pricing model	• Third-party transactions<br><br><br><br><br><br>• Revenue multiples<br><br><br><br><br><br>• Balance sheets and last twelve-month revenues for certain of the investee companies<br><br><br><br><br><br>• Equity volatility<br><br><br><br><br><br>• Time to exit events	• Increases in revenue multiples increases fair value<br><br><br><br><br><br>• Increases in equity volatility can increase or decrease fair value depending on class of shares held in the investee company<br><br><br><br><br><br>• Increases in estimated time to exit event can increase or decrease fair value depending on class of shares held in the investee company
Partnership interest and others	• Adjusted net book value	• Net asset value per unit<br><br><br><br><br><br>• Change in market pricing of comparable companies of the underlying investments made by the partnership
Loan receivable non-current	• Discounted cash flows: Considering expected prepayments and using management’s best estimate of average market interest rates with similar remaining terms.	• Expected timing of cash flows<br><br><br><br><br><br>• Discount rate 12%	• Changes to the expected amount and timing of cash flow changes fair value<br><br><br><br><br><br>• Increases to the discount rate can decrease fair value
Derivative stock warrants liability	• Option pricing model	• None	• None
Derivative financial assets	• Option pricing model	• Equity volatility	• None

F-32

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

19.	Fair value of financial instruments (Continued from previous page)

The following table presents the changes in fair value measurements of the Company’s investment portfolio recognized at fair value at June 30, 2021 and December 31, 2020 and classified as Level 3:

		June 30,<br><br><br>2021				December 31,<br><br><br>2020
Opening balance of Level 3 investments			18,291				20,691
Additions			1,792				150
Disposal			(4,670	)			—
Unrealized exchange loss			(377	)			(247	)
Realized gain on investment portfolio			2,460				—
Unrealized gain (loss) on investment portfolio			1,424				(2,303	)
Balance of level 3 investments, end of period			18,920				18,291

Unrealized exchange loss for the three and six months ended June 30, 2021 were $130 and $377 respectively (three and six months ended June 30, 2020 – loss of $335 and gain of $254 respectively).

Realized gain on investment portfolio for the three and six months ended June 30, 2021 were $nil and $2,460 respectively (three and six months ended June 30, 2020 - $nil).

Unrealized gain (loss) on investment portfolio for the three and six months ended June 30, 2021 were a loss of $4,273 and gain of $1,424 respectively (three and six months ended June 30, 2020 – loss of $856 and $3,279 respectively).

	(ii)	Sensitivity analysis

For the fair value of equity securities, reasonably possible changes at the reporting date to one of the significant unobservable inputs, holding other inputs constant, would have the following effects.

				Profit or loss
				Increase				Decrease
Investment portfolio:
June 30, 2021		Adjusted market multiple (5% movement)			898				(898	)
December 31, 2020		Adjusted market multiple (5% movement)			937				(937	)

During the three and six months ended June 30, 2021 there were no transfers of assets or liabilities within the fair value hierarchy levels.

F-33

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

20.	Nature and extent of risk arising from financial instruments

Risk management policy

In the normal course of business, the Company is exposed to financial risk that arises from a number of sources. Management’s involvement in operations helps identify risks and variations from expectations. As a part of the overall operation of the Company, Management takes steps to avoid undue concentrations of risk. The Company manages the risks as follows:

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counter‑party to a financial instrument fails to meet its contractual obligations and arises primarily from the Company’s loans receivable. The maximum amount of credit risk exposure is limited to the gross carrying amount of the loans receivable disclosed in these financial statements.

The Company acts as a lender of unsecured consumer loans and lines of credit and has little concentration of credit risk with any particular individual, company or other entity, relating to these services. However, the credit risk relates to the possibility of default of payment on the Company’s loans receivable. The Company performs on‑going credit evaluations, monitors aging of the loan portfolio, monitors payment history of individual loans, and maintains an allowance for loan loss to mitigate this risk.

The credit risk decisions on the Company’s loans receivable are made in accordance with the Company’s credit policies and lending practices, which are overseen by the Company’s senior management. Credit quality of the customer is assessed based on a credit rating scorecard and individual credit limits are defined in accordance with this assessment. The consumer loans receivable are unsecured. The Company develops underwriting models based on the historical performance of groups of customer loans which guide its lending decisions. To the extent that such historical data used to develop its underwriting models is not representative or predictive of current loan book performance, the Company could suffer increased loan losses.

The Company cannot guarantee that delinquency and loss levels will correspond with the historical levels experienced and there is a risk that delinquency and loss rates could increase significantly.

F-34

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

20.	Nature and extent of risk arising from financial instruments (Continued from previous page)

The Company’s accounts payable and accruals are substantially due within 12 months. The maturity schedule of the Company’s credit facilities, debentures, and convertible debentures are described below. Management’s intention is to continue to refinance any outstanding amounts owing under the credit facilities and debentures and will consider the issuance of shares in lieu of amounts owing under the convertible debentures, in each case as they become due and payable. The debentures are subordinated to the credit facilities which has the effect of extending the maturity date of the debentures to the later of contractual maturity or the maturity date of credit facilities. See Note 9 for further details.

(000s)	2021				2022				2023				2024				2025				Thereafter
Commitments - operational
Lease payments		762				1,446				1,297				1,206				1,240				2,727
Trade payables		7,240				—				—				—				—				—
Accrued wages and other expenses		9,532				—				—				—				—				—
Interest – Credit Facilities (Note 9)		1,967				1,967				—				—				—				—
Interest – Debentures (Note 10)		1,542				2,986				1,875				352				—				—
Purchase obligations		526				1,052				—				—				—				—
			21,569				7,451				3,172				1,558				1,240				2,727
Commitments – principal repayments
Credit Facility – Other (Note 9)		—				37,476				—				—				—				—
Debentures (Note 10)		1,545				2,174				19,634				18,878				—				—
			1,545				39,650				19,634				18,878				—				—
Total contractual obligations		23,114				47,101				22,806				20,436				1,240				2,727

All values are in US Dollars.

F-35

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

21.	Equity
	(a)	Share capital
---	---	---

The Company’s authorized share capital is comprised of an unlimited number of common shares with no par value and an unlimited number of preferred shares issuable in one or more series. The Board is authorized to determine the rights and privileges and number of shares of each series.

As at June 30, 2021, there are 68,803,294 common shares and no preferred shares issued and outstanding.

	(b)	Options

The Company has a stock option plan (the “Plan”) that provides for the granting of options to directors, officers, employees and consultants. The exercise price of an option is set at the time that such option is granted under the Plan. The maximum number of common shares reserved for issuance under the Plan is the greater of i) 15% of the number of common shares issued and outstanding of the Company and ii) 3,800,000. As a result of a business combination with Difference Capital Financial Inc. completed on June 21, 2019, there were an additional 536,000 options issued, which were granted pursuant to the Company’s prior stock option plan (the “Prior Plan”). As at June 30, 2021, there are 449,333 of these options outstanding that do not contribute towards the maximum number of common shares reserved for issuance under the Plan as described above.

In connection with the acquisition of Moka, the Company exchanged equity-settled share-based payments awards held by the employees of Moka for 366,343 equity-settled share-based payments awards of the Company with a contractual life of eight years.

Each option converts into one common share of the Company upon exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither right to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of expiry. Options issued under the Plan have a maximum contractual term of eight years, and options issued under the Prior Plan have a maximum contractual term of ten years.

A summary of the status of the stock options and changes in the period is as follows:

		Options<br><br><br>Outstanding<br><br><br>(000s)				Weighted<br>Average<br>Grant<br>Date<br>Fair<br>Value			Weighted<br>Average<br>Exercise<br>Price			Options<br><br><br>Exercisable<br><br><br>(000s)				Weighted<br>Average<br>Exercise<br>Price
As at December 31, 2019			3,697				—				4.05				2,833				4.12
Options granted			1,988				1.45				2.47				—				—
Exercised			(276	)			—				1.59				—				—
Forfeited			(432	)			—				2.86				—				—
As at December 31, 2020			4,977				—				3.07				2,965				3.47
Options granted			2,125				6.47				10.72				—				—
Exercised			(745	)			—				1.77				—				—
Forfeited			(24	)			—				3.33				—				—
As at June 30, 2021			6,333				—				5.82				2,783				4.01

All values are in US Dollars.

The above noted options have expiry dates ranging from November 2021 to December 2029.

F-36

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

21.	Equity (Continued from previous page)

The fair value of each option granted was estimated using the Black-Scholes option pricing model with the following assumptions:

		For the<br><br><br>six months ended<br><br><br>June 30,<br><br><br>2021				For the<br><br><br>year ended<br><br><br>December 31,<br><br><br>2020
Risk-free interest rate		0.58%				0.32% - 0.39%
Expected life		5 years				5 years
Expected volatility in market price of shares			84%			72% - 77%
Expected dividend yield			0%				0%
Expected forfeiture rate			15%				15%

These options generally vest either immediately or monthly over a three to four year period after an initial one year cliff.

Total share-based compensation costs related to options and RSUs for the three and six months ended June 30, 2021, were $3,805 and $4,362 respectively (three and six months ended June 30, 2020 - $460 and $674 respectively). The Company issued 17,500 shares to suppliers in lieu of services received for a cost of $164.

	(c)	Restricted share units

RSUs are granted to executives and other key employees. The fair value of an RSU at the grant date is equal to the market value of one of the Company’s common shares. Executives and other key employees are granted a specific number of RSUs for a given performance period based on their position and level of contribution. RSUs vest fully after three years of continuous employment from the date of grant and, in certain cases, if performance

objectives are met as determined by the Board of Directors. The maximum number of shares which may be made subject to issuance under RSUs awarded under the RSU Plan is 500,000.

Details of outstanding RSUs as at June 30, 2021 are as follows:

		Number of<br><br><br>RSUs (000s)
As at December 31, 2019			141
Converted			(59	)
Expired			(5	)
As at December 31, 2020			77
Converted			(21	)
Expired			(4	)
As at June 30, 2021			52

F-37

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

21.	Equity (Continued from previous page)
	(d)	Warrants
---	---	---
		Warrants<br><br><br>Outstanding<br><br><br>(000s)				Weighted<br>Average<br>Exercise<br>Price			Warrants<br><br><br>Exercisable<br><br><br>(000s)				Weighted<br>Average<br>Exercise<br>Price
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
As at December 31, 2019			1,196				2.96				598				2.96
Warrants granted			4,829				1.98				—				—
Warrants exercised			(990	)			2.03				—				—
As at December 31, 2020			5,035				1.80				4,386				1.88
Warrants granted			267				—				—				—
Warrants exercised			(3,497	)			1.75				—				—
As at June 30, 2021			1,805				3.98				1,572				4.38

All values are in US Dollars.

The 1,805,443 warrants outstanding noted above have expiry dates ranging from January 2021 to August 2023, and do not include the stock warrants accounted for as a derivative liability discussed in note 12.

On October 7, 2020, Mogo issued 4,479,392 Debenture Warrants to its debenture holders in connection with the debenture amendments approved on September 30, 2020, at an exercise price of $2.03 per Debenture Warrant. The Debenture Warrants are exercisable at any time until December 31, 2022. During the three and six months ended June 30, 2021, 121,556 and 2,184,183 Debenture Warrants were exercised into common shares resulting in cash proceeds of $247 and $4,434 respectively.

On January 25, 2016, in connection with the original marketing collaboration agreement (the “Postmedia Agreement”) with Postmedia Network Inc. (“Postmedia”), Mogo issued Postmedia five-year warrants to acquire 1,196,120 common shares of Mogo at an exercise price of $2.96. 50% of the warrants were to vest in equal instalments over three years while the remaining 50% (the “Performance Warrants”) were to vest based on Mogo achieving certain quarterly revenue targets. Effective January 1, 2018, the Postmedia Agreement was amended and extended, with changes in the vesting terms of 598,060 Performance Warrants so that i) they vest equally over the remaining two years of the collaboration (50% in January 2020 and 50% in January 2021).

Effective January 1, 2020, Mogo amended and extended the Postmedia Agreement for an additional two years expiring on December 31, 2022. Under the amended and extended Postmedia Agreement, Postmedia receives a quarterly revenue share payment of $263, reduced from $527 in Q4 2019. Further, the contractual life of 50% of the warrants previously issued to Postmedia was extended to seven years such that the new expiry date is January 25, 2023. Mogo also granted Postmedia additional 3.5-year warrants (the “New Warrants”) to acquire 350,000 common shares of Mogo at an exercise price of $3.537, which will vest in equal instalments over three years.

On June 3, 2020, the Company entered into a further amendment with Postmedia pursuant to which Postmedia agreed to waive certain amounts payable by Mogo through December 31, 2020 in exchange for Mogo reducing the exercise price of the 1,546,120 common share purchase warrants previously issued to Postmedia, to $1.292.

During March 2021, Postmedia exercised 1,312,787 warrants to purchase the same number of Company’s common shares at an exercise price of $1.292 per share. Mogo received cash payment of $1,696 pursuant to the exercise.

On February 24, 2021, in connection with a US$54,000 registered direct offering, Mogo issued to investors warrants to purchase up to an aggregate of 2,673,268 common shares at an exercise price of US$11.00 at any time prior to three and a half years following the date of issuance. Warrants issued to investors are denominated in a currency

F-38

Mogo Inc.

Notes to the Interim Condensed Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except per share amounts)

For the three and six months ended June 30, 2021 and 2020

21.	Equity (Continued from previous page)

other than the functional currency of the Company therefore do not meet the definition of an equity instrument and are classified as a derivative stock warrants. Refer to note 12 for more details.

The Company also issued 267,327 warrants in connection with broker services rendered on the offering.

The fair value of the warrants outstanding was estimated using the Black-Scholes option pricing model with the following assumptions:

		For the<br><br><br>six months ended<br><br><br>June 30,<br><br><br>2021				For the<br><br><br>year ended<br><br><br>December 31,<br><br><br>2020
Risk-free interest rate		0.48%-0.65%				0.32% - 0.39%
Expected life		2 -3 years				3.5 -7 years
Expected volatility in market price of shares		115%-122%				50% - 77%
Expected dividend yield			0%				0%
Expected forfeiture rate			0%				0%
22.	Subsequent events
---	---
	Acquisition of Fortification:
---	---

On May 17, 2021, Mogo entered into a binding letter of intent to acquire 100% of Fortification Capital Inc. (“Fortification”), a Canadian registered investment dealer, for a combination of approximately $1,050 in cash and 75,000 common shares of Mogo. The acquisition of Fortification would bring order execution only registration capabilities which is a necessary regulatory requirement for Mogo to offer stock trading to its members.

Fortification is a registered investment dealer and a member of the Investment Industry Regulatory Organization of Canada. Among several benefits of the proposed acquisition, Mogo would acquire the necessary licenses, registration and technology – including an order management system and market data processing – to accelerate the development of the Company’s planned commission free stock trading solution.

The assets and liabilities to be acquired from Fortification cannot be disclosed at this time because the Company is still in the process of completing the purchase price allocation process including the valuation of assets and liabilities and amounts allocated to acquired intangibles and goodwill.

Return of capital from investment

On July 26, 2021, a limited partnership set up by the former shareholders of Carta distributed all of its assets, comprising of Mogo common shares, to its unit holders.

The Company held units in the limited partnership as part of its investment portfolio, with a book value of $2,385 at June 30, 2021. These holdings entitled Mogo to the return of 303,816 common shares of its own stock that it intends to retire. The derecognition of the investment and reacquisition of the Company’s own equity will be accounted for as a deduction from equity equal to the book value of the investment in the third quarter of 2021.

F-39

mogo-ex992_8.htm

		Management’s Discussion and Analysis

Exhibit 99.2

MOGO INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE QUARTER ENDED JUNE 30, 2021

DATED: AUGUST 11, 2021

1 | Page

		Management’s Discussion and Analysis
Table of Contents
---	---	---	---
Caution Regarding Forward-looking Statements			4
Company Overview			5
Mission			5
Financial Outlook		8
COVID-19			8
Financial Performance Review			10
Liquidity and Capital Resources			24
Risk Management			28
Non-IFRS Financial Measures			28
Critical Accounting Estimates			30
Changes in Accounting Policies			30
Controls and Procedures			30

2 | Page

		Management’s Discussion and Analysis

MANAGEMENT’S DISCUSSION AND ANALYSIS

This Management’s Discussion and Analysis (“MD&A”) is current as of August 11, 2021 and presents an analysis of the financial condition of Mogo Inc. (formerly Difference Capital Financial Inc. (“Difference”)) and its subsidiaries (collectively referred to as “Mogo” or the “Company”) as at and for the three and six months ended June 30, 2021 compared with the corresponding period in the prior year. This MD&A should be read in conjunction with the Company’s interim condensed consolidated financial statements and the related notes thereto for the three and six months ended June 30, 2021. The financial information presented in this MD&A is derived from our interim condensed consolidated financial statements prepared in accordance with International Accounting Standards (“IAS”) 34, Interim Financial Reporting,. The Company was continued under the Business Corporations Act (British Columbia) on June 21, 2019 in connection with the combination with Mogo Finance Technology Inc. (“Mogo Finance”). The transaction was accounted for as a business combination, with Mogo Finance as the accounting acquirer. Accordingly, the financial statements and this MD&A reflect the continuing financial statements of Mogo Finance.

This MD&A is the responsibility of management. The Board of Directors has approved this MD&A after receiving the recommendation of the Company’s Audit Committee, which is comprised exclusively of independent directors, and the Company’s Disclosure Committee.

Unless otherwise noted or the context indicates otherwise “we”, “us”, “our”, the “Company” or “Mogo” refer to Mogo Inc. and its direct and indirect subsidiaries. The Company presents its interim condensed consolidated financial statements in Canadian dollars. Amounts in this MD&A are stated in Canadian dollars unless otherwise indicated.

This MD&A may refer to trademarks, trade names and material which are subject to copyright, which are protected under applicable intellectual property laws and are the property of Mogo. Solely for convenience, our trademarks, trade names and copyrighted material referred to in this MD&A may appear without the ^®^ or © symbol, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights to these trademarks, trade names and copyrights. All other trade‑marks used in this MD&A are the property of their respective owners.

The Company’s continuous disclosure materials, including interim filings, audited consolidated financial statements, annual information form and annual report on Form 40-F can be found on SEDAR at www.sedar.com, with the Company’s filings with the United States Securities and Exchange Commission at www.sec.gov, and on the Company’s website at www.mogo.ca.

This MD&A makes reference to certain non‑IFRS financial measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. These measures are provided as additional information to complement the IFRS financial measures contained herein by providing further metrics to understand the Company’s results of operations from management’s perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. We use non‑IFRS financial measures, including adjusted EBITDA and adjusted cash net income (loss) to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures. We also use non‑IFRS financial measures in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets and assess our ability to meet our capital expenditure and working capital requirements. See “Key Performance Indicators” and “Non‑IFRS Financial Measures”.

3 | Page

		Management’s Discussion and Analysis

Caution Regarding Forward-Looking Statements

This MD&A contains forward‑looking statements that relate to the Company’s current expectations and views of future events. In some cases, these forward‑looking statements can be identified by words or phrases such as “outlook”, “may”, “might”, “will”, “expect”, “anticipate”, “estimate”, “intend”, “plan”, “indicate”, “seek”, “believe”, “predict” or “likely”, or the negative of these terms, or other similar expressions intended to identify forward‑looking statements. The Company has based these forward‑looking statements on its current expectations and projections about future events and financial trends that it believes might affect its financial condition, results of operations, business strategy and financial needs. These forward‑looking statements include, among other things, statements relating to the Company’s expectations regarding its revenue, expenses and operations, key performance indicators, provision for loan losses (net of recoveries), anticipated cash needs and its need for additional financing, completion of announced transactions, funding costs, ability to extend or refinance any outstanding amounts under the Company’s credit facilities, ability to protect, maintain and enforce its intellectual property, plans for and timing of expansion of its product and services, future growth plans, ability to attract new members and develop and maintain existing customers, ability to attract and retain personnel, expectations with respect to advancement of its product offering, competitive position and the regulatory environment in which the Company operates, anticipated trends and challenges in the Company’s business and the markets in which it operates, third‑party claims of infringement or violation of, or other conflicts with, intellectual property rights, the resolution of any legal matters, and the acceptance by the Company’s consumers and the marketplace of new technologies and solutions.

Forward-looking statements, including our financial outlook, are based on certain assumptions and analyses made by the Company in light of the experience and perception of historical trends, current conditions and expected future developments and other factors it believes are appropriate and are subject to risks and uncertainties. Although we believe that the assumptions underlying these statements are reasonable, they may prove to be incorrect, and we cannot assure that actual results will be consistent with these forward-looking statements. Our financial outlook is intended to provide further insight into our expectations for results in 2021 and may not be appropriate for other purposes. This outlook involves numerous assumptions, particularly around member growth & take up of products and services, and we believe it is prepared on a reasonable basis reflecting management’s best estimates and judgements. However, given the inherent risks, uncertainties and assumptions, any investors or other users of this document should not place undue reliance on these forward-looking statements.

Whether actual results, performance or achievements will conform to the Company’s expectations and predictions is subject to a number of known and unknown risks, uncertainties, assumptions and other factors that are discussed in greater detail in the “Risk Factors” section of the Company’s current annual information form available at www.sedar.com and at www.sec.gov, which risk factors are incorporated herein by reference.

The forward-looking statements made in this MD&A relate only to events or information as of the date of this MD&A and are expressly qualified in their entirety by this cautionary statement. Except as required by law, we do not assume any obligation to update or revise any of these forward-looking statements to reflect events or circumstances after the date of this MD&A, including the occurrence of unanticipated events. An investor should read this MD&A with the understanding that our actual future results may be materially different from what we expect.

[The rest of this page left intentionally blank]

4 | Page

		Management’s Discussion and Analysis

Company Overview

Mogo Inc. a financial technology and digital payments company, is empowering its more than 1.6 million members with simple digital solutions to help them get in control of their financial health. Through the Mogo app, consumers can access a digital spending account with Mogo Visa* Platinum Prepaid Card featuring automatic carbon offsetting, easily buy and sell bitcoin, and get free monthly credit score monitoring, ID fraud protection, and personal loans. Mogo’s wholly-owned subsidiary, Carta Worldwide, also offers a digital payments platform that powers the next-generation card programs from innovative fintech companies in Europe, North America and APAC. To learn more, please visit mogo.ca or download the mobile app (iOS or Android).

Mission

Mogo’s mission is to make it easy and engaging for consumers to get financially fit and live a more sustainable lifestyle.

The following key corporate changes, transactions and material contracts are referred to, and assist in understanding this MD&A:

Business Developments

	•	In the second quarter of 2021 we focused a substantial portion of our technology and development resources into building our new standalone stock trading app (“MogoTrade”) which we plan to launch by the end of the year. In 2022, we intend to complement this with the launch of an automated wealth building product (“MogoInvest”) and the expansion of MogoCrypto to support additional cryptocurrencies through the MogoTrade platform, further solidifying Mogo’s position as the most comprehensive digital wallet app in Canada. In addition, the acquisitions and numerous investments we made in the first half of the year will further accelerate the Company’s progress towards the goal of providing our members with a best in class, holistic financial health solution.
	•	In May 2021, we completed the acquisition of Moka Finance Technologies Inc. (“Moka”), one of Canada’s leading saving and investing apps, for approximately 5.0 million Mogo common shares and cash consideration of $4.5 million. The acquisition increased Mogo’s member base to approximately 1.6 million and brings differentiated saving and investing products, along with the underlying technology platform and expertise to broaden Mogo’s wealth offering with MogoTrade and MogoInvest.
---	---	---
	•	In May 2021 we entered into a binding letter of intent followed by a definitive share purchase agreement in July 2021 to acquire 100% of Fortification Capital Inc. (“Fortification”), a Canadian registered investment dealer, for a combination of cash and common shares of Mogo. The acquisition of Fortification will bring Investment Industry Regulatory Organization of Canada (“IIROC”) membership and approval as an order execution only (“OEO”) broker which is a necessary regulatory requirement for MogoTrade. The acquisition is subject to regulatory approval, including the approval of the Toronto Stock Exchange (“TSX”), IIROC and the Québec Autorité des marchés financiers (“AMF”) and is expected to close in the third quarter of 2021.
---	---	---
	•	In June 2021, regulatory and financial services industry veterans Ms. Wendy Rudd and Dr. Liam Cheung were elected to the Mogo board of directors. Ms. Rudd is an innovative securities industry leader and former senior executive at IIROC, with demonstrated accomplishments in the introduction of leading-edge electronic trading products and services to the Canadian market. Dr. Cheung has held senior executive positions relating to corporate strategy, technology and operations for brokerage and trading businesses throughout North America, Asia and Europe. The pair bring deep experience to the board across regulatory, strategic, operational, and technology aspects of the securities industry.
---	---	---
	•	Between April and June, the Company acquired approximately 39% of Coinsquare, Canada’s leading digital asset trading platform, along with certain option and warrant rights, for total consideration of approximately $110.2 million, comprised of $32.4 million in cash and the issuance of 8.3 million common shares of Mogo. The equity investment in Coinsquare is consistent with our belief in the disruptive capability of cryptocurrencies and its importance in a comprehensive digital wallet for the next generation of Canadians.
---	---	---

5 | Page

		Management’s Discussion and Analysis
	•	In July 2021, we announced a new minority investment in Tetra Trust Company (“Tetra”), which launched as Canada’s first qualified custodian for cryptocurrency assets. Mogo acquired approximately 4% of the outstanding common shares of Tetra. Prior to Tetra’s launch, the Canadian market for cryptocurrency custody was limited to U.S. providers and unregulated Canadian custodians and this investment represents Mogo’s commitment to supporting the growing fintech market in Canada.
---	---	---
	•	On January 25, 2021 we closed the acquisition of Carta Solutions Holding Corporation ("Carta"), a leader in digital payment solutions. The acquisition adds a business to business payments platform to the Company and is expected to significantly expand Mogo’s total addressable market by entering the global payments market. Carta’s issuing platform provides processing technology to industry leaders in Europe, Asia, and Canada, and recently announced expansion into the United States and Japan. The Carta acquisition is expected to increase Mogo’s revenue scale and accelerate growth of its high-margin subscription and transaction-based revenue, while strengthening the Company’s digital wallet capabilities, including the development of its peer-to-peer payment solution.
---	---	---
	•	In January 2021, we announced our bitcoin cashback reward program for MogoCard, whereby participating members earn bitcoin cashback rewards for every purchase made on their MogoCard. In addition to bitcoin cashback, MogoCard helps fight climate change by automatically offsetting carbon as you spend, and supports Apple Pay®, Google Pay™ and Samsung Pay.
---	---	---

Financial Highlights

	•	On April 28, 2021, the Company sold its investment in Vena Solutions Inc. (“Vena”) for proceeds of $4.6 million, representing a 116% increase from the book value on December 31, 2020. Mogo’s investment portfolio was acquired as part of its 2019 business combination with Difference and the Vena investment was one of several equity investments in private technology and e-gaming companies, including Hootsuite, Blue Ant Media, Alida and Tiidal Gaming. Mogo will continue to capitalize on monetization opportunities within its investment portfolio as these occur.
	•	Between December 2020 and February 2021, we raised a total of approximately $81.1 million in aggregate net proceeds, through the issuance of 6.8 million common shares and warrants to purchase up to 2.7 million common shares.
---	---	---
	•	Between January 2021 and April 2021, we invested a total of $1.3 million in bitcoin and Ether. This financial investment aligns with Mogo’s significant product development related investments in Bitcoin over the last several years, including MogoCrypto and the bitcoin rewards program.
---	---	---
	•	In December 2020, we announced the early conversion of our convertible debentures with an aggregate principal amount outstanding of $8.7 million as at December 31, 2020. The early conversion was completed on January 11, 2021 and has resulted in a strengthened balance sheet and reduced interest expense going forward.
---	---	---
	•	In September 2020, the Company and its non-convertible debenture holders approved certain amendments to the terms of the debentures, effective July 1, 2020. The amendments include a reduction in the average coupon interest rate, from approximately 14% to approximately 7%, the extension of the maturity date for 50% of the principal balance to January 31, 2023, and the remainder to January 31, 2024, and the choice to settle principal and interest payments at the Company’s option either in cash or the Company’s shares. In connection with the amendment, the Company issued approximately 4.5 million common share purchase warrants to the debenture holders.
---	---	---
	•	In February 2020, we sold the majority of our “MogoLiquid” loan portfolio to goeasy for gross consideration of $31.6 million (the “Liquid Sale”). In conjunction with the Liquid Sale, we repaid and extinguished the Credit Facility – Liquid, which had an outstanding balance of $29.3 million as at December 31, 2019.
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6 | Page

		Management’s Discussion and Analysis
	•	In January 2020, we extended the term of our strategic marketing collaboration agreement with Canada’s premier news media company, Postmedia Network Inc. (“Postmedia”), to January 2023. The agreement is expected to provide over $40 million of annual media value over the three year extension period.
---	---	---

Financial Outlook

Based upon the substantial growth opportunities we see across our core businesses, we expect to continue increasing our growth investments to drive accelerating member and revenue growth in 2021. Specifically, we are revising our previously communicated financial outlook as follows:

	-	We expect year-over-year growth of 100% to 110% in subscription and services revenue in Q4 2021 as compared to Q4 2020 (compared to our previously communicated target of 80% to 100% growth).
	-	We expect total revenues of $70 million to $75 million in fiscal year 2022.
---	---	---
	-	We expect improving adjusted EBITDA as a percentage of revenue in fiscal year 2022.
---	---	---

Q2 2021 Update on COVID-19 Impact

Daily Operations and Safety

The rapid worldwide spread of COVID-19 has prompted governments to implement restrictive measures to curb the spread of the pandemic. During this period of uncertainty, our priority is to protect the health and safety of our employees, support and enforce government actions to slow the spread of COVID-19, and to continually assess and take appropriate actions to mitigate the risks to our business operations as a result of this pandemic.

In 2020, we implemented a COVID-19 response plan that included a number of measures to safeguard against the spread of the virus at our offices and maintain regular communications with suppliers, customers and business partners to monitor any potential risks to our ongoing operations. Operationally, Mogo shifted its employees to work remotely in early 2020. Given the digital nature of our business, the customer experience has been wholly unchanged. Given the ongoing, changing and uncertain situation regarding COVID-19, Mogo continues to monitor, evaluate, and adapt to developments as they unfold.

Cash Flow and Operating Expenses

In light of continued member growth and better than expected loan book performance across 2020 we have not extended the measures taken in 2020 related to our COVID-19 response plan to 2021. As fintech adoption accelerates in Canada we plan to continue to invest in growth related initiatives including product development and marketing to drive continued member and revenue growth.

In 2020 we took steps to reduce operating expenses and improve cash flow in three key areas: personnel costs, interest costs, and vendor management. We reduced headcount, salaries, and hours in the first half of 2020, but were able to return to regular hours and salary levels for all staff by Q4 2020. We amended our non-convertible debentures in Q3 2020 to significantly reduce our cash interest obligations from approximately 14% to 7%, in addition to providing us the option to settle interest and principal in either Mogo common shares or cash. We worked with our vendors to ensure continuity of service at reduced rates, securing significant one-time and ongoing savings of cash operating expenses.

Digital Lending and Customer Support

In Q2 2021, we experienced lower rates of customer default relative to historical levels, which is a continuation of the positive trend first observed in Q2 2020.

In the first half of 2020, we temporarily paused new on-balance sheet loan originations and introduced an enhanced employment and income verification framework to help identify higher risk loan applications in the first half of the year. In the second half of 2020, we gradually returned to higher loan origination volumes, a trend which extended into 2021 where we returned to pre pandemic levels.

Mogo worked closely with its customers to support them through this period of uncertainty, and in 2020 launched a Job Loss Action Plan for members, including payment programs for affected loan customers. As of June 30, 2021, no customers remain

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		Management’s Discussion and Analysis

on any form of loan relief under this plan.

Revenue

In Q2 2021, revenue grew by 20% to $13.7 million compared to $11.4 million in Q1 2021. We expect the positive revenue growth trend from the last few quarters to continue through 2021 as we continue to invest in growth initiatives and more fully integrate the acquisitions of Carta and Moka.

In 2020 we experienced a decrease in revenues attributable to the measures taken to manage credit risk and reduce operating spend in response to the COVID-19 pandemic. Specifically, as described above, we reduced loan originations compared to historical levels in order to limit credit exposure, and significantly reduced marketing expenses, which resulted in a corresponding decrease in revenue in Q1 2020 to Q3 2020. Additionally, the Liquid Sale in Q1 2020 contributed to a decline in revenues.

Risk Management and Critical Accounting Estimates

The current outbreak of COVID-19, and any future emergence and spread of similar pathogens, could have a material adverse effect on global and local economic and business conditions which may adversely impact our business and results of operations, and the operations of contractors and service providers. The overall economic impacts of COVID-19 could include an impact on our ability to obtain debt and equity financing or potential future decreases in revenue or the profitability of our ongoing operations. The extent of the impact that this pandemic may have on the Canadian economy and the Company’s business is currently highly uncertain and difficult to predict. Accordingly, there is a higher level of uncertainty with respect to management’s judgements and estimates at this time, particularly as it relates to the measurement of allowance for loan losses and fair valuation of our investment portfolio. We will continue to revisit our judgements and estimates where appropriate in future reporting periods as economic conditions surrounding the COVID-19 pandemic continue to evolve.

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		Management’s Discussion and Analysis

Financial Performance Review

The following provides insight on the Company’s financial performance by illustrating and providing commentary on its key performance indicators and operating results.

Key Performance Indicators

The key performance indicators that we use to manage our business and evaluate our financial results and operating performance consist of: revenue, subscription and services revenue, net income (loss), adjusted EBITDA^(^^1)^, adjusted cash net (loss) income^(1)^, and Mogo members^(1)^.^^We evaluate our performance by comparing our actual results to prior year results. The tables below provide the summary of key performance indicators for the applicable reported periods:

The tables below provide the summary of key performance indicators for the applicable reported periods:

(000s, except percentages)
		Three months ended												Six months ended
		June 30,<br><br><br>2021				June 30,<br><br><br>2020				Percentage change				June 30,<br><br><br>2021				June 30,<br><br><br>2020				Percentage<br><br><br>change
IFRS Measures
Revenue	$	13,665			$	10,559				29	%		$	25,085			$	24,469				3	%
Subscription and services revenue		8,218				4,536				81	%		$	14,220			$	10,347				37	%
Net income (loss)		9,045				(1,550	)		n/a					6,228				(11,615	)		n/a
Other Key Performance Indicators(1)
Adjusted EBITDA		(2,962	)			5,197			n/a					(4,020	)			5,741			n/a
Adjusted cash net (loss) income		(5,852	)			2,608			n/a					(10,009	)			(2,610	)			283	%

All values are in US Dollars.

										As at
		June 30,<br><br><br>2021				June 30,<br><br><br>2020				Percentage<br><br><br>change
Non-IFRS Non-Financial Measure
Mogo Members (000s)			1,695				1,040				63	%
(1)	For more information regarding our use of these non-IFRS measures and, where applicable, a reconciliation to the most comparable IFRS measure, see “Non-IFRS Financial Measures”.
---	---

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		Management’s Discussion and Analysis

Revenue

Total revenue was $13.7 million for the three months ended June 30, 2021, an increase of 29% compared to $10.6 million in the same period last year. This increase in revenue was driven by a $3.7 million increase in subscription and services revenue, resulting from a combination of new revenue streams from our acquisitions of Carta and Moka in Q1 2021 and Q2 2021, respectively, and growth in other Mogo products including MogoCard. This was offset by a $0.6 million decline in interest revenue as the overall size of our loan portfolio has declined relative to the same period last year, as we strategically lowered the balance of our loan book in 2020 as a precautionary measure in light of the COVID-19 pandemic.

Total revenue was $25.1 million for the six months ended June 30, 2021, an increase of 3% compared to $24.5 million in the same period last year. The increase in revenue was driven mainly by the same reasons as above, but additionally offset by the strategic sale of a portion of our loan book in late Q1 2020, which contributed to revenues in the comparative six months ended June 30, 2020.

Subscription and services revenue

Three months ended Q2 2021 vs Q2 2020

Subscription and services revenue increased to $8.2 million in the three months ended June 30, 2021, an 81% increase from $4.5 million in the same period last year. Subscription and services revenue now represents 60.1% of total quarterly revenue as compared to 43.0% in the same period last year.

The increase was driven by a number of factors, including new revenue streams from our Carta and Moka acquisitions in the year. Carta contributed new transaction processing revenues and set-up revenues derived from its long-term payment processing contracts, whereas Moka contributed monthly subscription revenues from its savings and investing programs.

Subscription and services revenue increased further as a result of increased activity in Mogo’s non-loan products, in particular MogoCard which had a significant increase in transaction volumes relative to the same period last year.

Six months ended Q2 2021 vs Q2 2020

Subscription and services revenue increased to $14.2 million for the six months ended June 30, 2021, a 37% increase from $10.3 million in the same period last year. The increase was largely due to the same reasons described above related to the Carta and Moka acquisitions and increased MogoCard activity. This was offset by a reduction in loan related subscription and service revenues resulting from both the sale of a portion of our loan book in Q1 2020 and overall downsizing of the loan book in 2020.

Net income (loss)

Net income (loss) was $9.0 million for the three months ended June 30, 2021, an increase of $10.6 million compared to $(1.6) million in the same period last year.

The variance is primarily attributable to a $24.8 million gain on our Coinsquare related derivative financial assets, driven largely by a revaluation gain on our Coinsquare Warrants using a Black Scholes model as at June 30, 2021. Market transactions occurring subsequently to our initial acquisition of the warrants imply a higher company valuation on Coinsquare relative to that as at the Initial Investment date, thereby increasing the value of the warrants. This $24.8 million gain is also partially driven by a final revaluation of the Call Option immediately prior to its exercise on June 4, 2021, and a revaluation of the Put Option prior to its expiry on June 4, 2021.

This was offset by a resumed investment in growth expenditures in Q2 2021 as we focus on continuing to grow revenues and Mogo members in the remainder of the year. Specifically, we increased our marketing expenses by $3.6 million relative to the same period last year and hired additional personnel in support of key growth initiatives including the planned launch of MogoInvest and MogoTrade, and the expansion of Carta into new markets including the U.S. payments market. Additionally, non-cash stock based compensation expenses increased by $3.3 million relative to the same period last year.

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		Management’s Discussion and Analysis

Net income (loss) was $6.2 million for the six months ended June 30, 2021, an increase of $17.8 million compared to $(11.6) million in the same period last year. The variance in net income (loss) for the six month ended period is attributable primarily to the factors noted above, as well as a $7.2 million improvement in revaluations (gains) and losses in the current period arising largely from the previously announced gain on monetization of our investment in Vena in April 2021, as compared to losses on revaluation experienced in the six months ended June 30, 2020, driven by the initial impact of COVID-19 on capital markets.

Adjusted EBITDA^(^^1)^

Adjusted EBITDA was $(3.0) million for the three months ended June 30, 2021, a $8.2 million reduction compared to $5.2 million in the same period last year. The decrease in adjusted EBITDA was driven partially by an increase in growth related marketing expenses in the three months ended June 30, 2021. Marketing expenses increased by $3.6 million compared to the same period last year, comprising an increase in performance marketing spend and personnel costs. The acquisitions of Carta and Moka also contributed to a reduction in adjusted EBITDA in Q2 2021. We are expanding our Carta sales and technology employee base to invest in the growth of Carta total addressable market, including the recent launch into the US, which represents the largest portion of the US$500 billion North American payments market, the expansion of platform capabilities, and investment in further expansion in Europe. We are investing in technology and development resources to support the launch of MogoTrade, our stock trading platform which we expect to launch by the end of 2021 and be a significant driver of growth in 2022.

Adjusted EBITDA was a loss of $(4.0) million for the six months ended June 30, 2021, a $9.7 million reduction compared to $5.7 million in the same period last year, driven primarily by the same reasons as noted above.

It is important to note that the negative adjusted EBITDA in the current period is driven by discretionary growth expenditures, that management is incurring because we believe that they will drive favorable future returns on investment. The strong underlying base profitability of our financial model was evidenced in 2020, when we achieved 49% adjusted EBITDA margin in both Q2 and Q3 2020. In 2021, the Company has turned its focus to investments that it believes will drive long-term member and revenue growth, although management has the flexibility to dial back these investments at any time, which have had a negative upfront impact on adjusted EBITDA.

Mogo believes that it has a unique opportunity to leverage its position as fintech adoption accelerates in Canada which is why it is focused on investing in its product and platform during this period. Specifically, we are investing in the development of our free-stock trading app, MogoTrade, along with investments to expand the total addressable market of Carta including launching into the U.S. market. Further, we have increased our focus on marketing spend, which includes refinements to our branding and messaging strategy and increased investment in marketing personnel and infrastructure, which we believe will drive future Mogo member growth at a more effective member acquisition cost.

We expect that these investments will result in continued negative adjusted EBITDA during the rest of the year. As always, management will continue to assess its growth investments and adjust these when appropriate.

Adjusted cash net (loss) income ^(1)^

Adjusted cash net (loss) income was $(5.9) million for the three months ended June 30, 2021, a decrease of $8.5 million compared to $2.6 million in the same period last year. The decrease in adjusted cash net (loss) income was attributed primarily to the same reasons noted above in the adjusted EBITDA variance.

Adjusted cash net (loss) income was $(10.0) million for the six months ended June 30, 2021, an increase of $7.4 million compared to $(2.6) million in the same period last year. The variance for the six month period was driven primarily by the reasons noted above in the adjusted EBITDA variance, offset by a $2.0 million reduction in cash interest paid in the six months ended June 30, 2021 relative to the six months ended June 30, 2020, resulting from the paydown of a credit facility in Q1 2020 and a 400 basis point reduction on the effective interest rate of our current credit facility on July 2, 2020.

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		Management’s Discussion and Analysis

Mogo members

Our total member base grew to 1,695,000 members as at June 30, 2021, from 1,040,000 members as at June 30, 2020, representing an increase of approximately 63% or 655,000 net members. Quarter over quarter, net members increased by 500,000 in Q2 2021 including members acquired upon the closing of the Moka acquisition, up from 1,195,000 members at March 31, 2021. The continuous increase in our member base, reflects increased brand awareness through our marketing collaboration agreement with Postmedia and the continuing adoption of the Company’s new and existing products, including MogoCard.

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(1)	For more information regarding our use of these non-IFRS measures and, where applicable, a reconciliation to the most comparable IFRS measure, see “Non-IFRS Financial Measures”.

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		Management’s Discussion and Analysis

Results of Operations

The following table sets forth a summary of our results of operations for the three and six months ended June 30, 2021 and 2020:

(000s, except per share amounts)
		Three months ended								Six months ended
		June 30,<br><br><br>2021				June 30,<br><br><br>2020				June 30,<br><br><br>2021				June 30,<br><br><br>2020
Total revenue	$	13,665			$	10,559			$	25,085			$	24,469
Cost of revenue		1,571				987				3,518				6,502
Gross profit		12,094				9,572				21,567				17,967
Technology and development		3,486				1,148				5,704				2,942
Marketing		4,154				610				7,190				1,843
Customer service and operations		3,420				1,214				5,583				3,359
General and administration		4,253				1,919				7,636				4,353
Stock based compensation		3,805				460				4,362				674
Depreciation and amortization		2,971				2,287				5,389				4,512
Total operating expenses		22,089				7,638				35,864				17,683
(Loss) income from operations		(9,995	)			1,934				(14,297	)			284
Credit facility interest expense		1,005				1,580				2,001				4,146
Debenture and other financing expense		871				1,946				1,823				3,830
Accretion related to debentures and convertible debentures		312				168				621				377
Share of loss in investment accounted for using the equity method		2,860				—				2,860				—
Revaluation (gains) losses		(24,850	)			1,186				(30,112	)			3,347
Other non-operating expenses (income)		752				(1,396	)			2,264				199
			(19,050	)			3,484				(20,543	)			11,899
Net income (loss) before tax		9,055				(1,550	)			6,246				(11,615	)
Income tax expense		10				—				18				—
Net income (loss)		9,045				(1,550	)			6,228				(11,615	)
Other comprehensive income (loss):
Items that are or may be reclassified subsequently to profit or loss:
Unrealized revaluation (loss) gain on digital assets		(550	)			—				26				—
Foreign currency translation reserve gain		72				—				360				—
Other comprehensive income (loss):		(478	)			—				386				—
Total comprehensive income (loss)		8,567				(1,550	)			6,614				(11,615	)
Adjusted EBITDA(1)		(2,962	)			5,197				(4,020	)			5,741
Adjusted cash net (loss) income		(5,852	)			2,608				(10,009	)			(2,610	)
Net income (loss) per share (Basic)		0.14				(0.06	)			0.11				(0.42	)

All values are in US Dollars.

(1)	For more information regarding our use of these non-IFRS measures and, where applicable, a reconciliation to the most comparable IFRS measure, see “Non-IFRS Financial Measures”.

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		Management’s Discussion and Analysis

Key Income Statement Components

Total revenue

The following table summarizes total revenue for the three and six months ended June 30, 2021 and 2020:

(000s, except percentages)
		Three months ended												Six months ended
		June 30,<br><br><br>2021				June 30,<br><br><br>2020				Percentage change				June 30,<br><br><br>2021				June 30,<br><br><br>2020				Percentage<br><br><br>change
Subscription and services revenue	$	8,218			$	4,536				81	%		$	14,220			$	10,347				37	%
Interest revenue		5,447				6,023				(10	)%			10,865				14,122				(23	)%
Total revenue		13,665				10,559				29	%			25,085				24,469				3	%

All values are in US Dollars.

Subscription and services revenue – represents MogoCard revenue, MogoMortgage brokerage commissions, premium account revenue, net loan protection premiums, MogoCrypto revenue, partner lending fees, transaction processing revenue, Moka subscriptions, portfolio management fees, exempt market dealer commission revenue, referral fee revenue and other fees and charges.

Interest revenue - represents interest on our line of credit loan products.

Please refer to the Key Performance Indicators section for commentary on Total revenue and Subscription and services revenue.

Interest revenue for the three months ended June 30, 2021, was $5.4 million compared to $6.0 million in the same period of 2020, a decrease of $0.6 million or 10%. Interest revenue for the six months ended June 30, 2021, was $10.9 million compared to $14.1 million in the same period of 2020, a decrease of $3.3 million or 23%. The decrease in interest revenue in the six month period is primarily attributable to the Liquid Sale during Q1 2020 and lower average loan book size as discussed above.

Cost of revenue

The following table summarizes the cost of revenue for the three and six months ended June 30, 2021 and 2020:

(000s, except percentages)
		Three months ended												Six months ended
		June 30,<br><br><br>2021				June 30,<br><br><br>2020				Percentage change				June 30,<br><br><br>2021				June 30,<br><br><br>2020				Percentage<br><br><br>change
Provision for loan losses, net of recoveries	$	774			$	973				(20	)%		$	2,309			$	6,311				(63	)%
Transaction costs		797				14				5593	%			1,209				191				533	%
Cost of revenue		1,571				987				59	%			3,518				6,502				(46	)%
As a percentage of total revenue		11	%			9	%							14	%			27	%

All values are in US Dollars.

Cost of revenue consists of provision for loan losses, net of recoveries, and transaction costs. Provision for loan losses, net of recoveries, represents the amounts charged against income during the period to maintain an adequate allowance for loan losses. Our allowance for loan losses represents our estimate of the expected credit losses (“ECL”) inherent in our portfolio and is based on various factors including the composition of the portfolio, delinquency levels, historical and current loan performance, expectations of future performance, and general economic conditions.

Cost of revenue was $1.6 million for the three months ended June 30, 2021, an increase of 59% compared to $1.0 million in the same period last year. Cost of revenue was $3.5 million for the six months ended June 30, 2021, a decrease of 46% compared to $6.5 million in the same period last year. The increase in cost of revenue for the three months ended June 30, 2021, compared to same period last year is primarily due to transaction costs related to Carta and Moka, whereas, the decrease in cost of revenue for the six months ended June 30, 2021 is largely driven by a specific $1.2 million additional provision expense recorded in first half of 2020 in response to the onset of the COVID-19 pandemic which did not recur in first half of 2021. Additionally, the Liquid Sale resulted in the elimination of recurring provision expense on that portion of the loan portfolio for Q2 2020. Further, ongoing provision for loan losses were lower in first half of 2021 as compared to same period last year, as Mogo

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		Management’s Discussion and Analysis

continues to experience lower than historical average defaults despite the economic challenges presented by the COVID-19 pandemic.

We believe we are adequately provisioned to absorb any potential future material shocks to the loan book as a result of any further deterioration in COVID-19 conditions. Please note that IFRS 9 requires the use of forward-looking indicators when measuring ECL, which can result in upfront recognition of expenses prior to any actual occurrence of a default event. As a result of uncertain economic conditions arising from the COVID-19 pandemic, we have applied a probability weighted approach in applying these forward-looking indicators to measure incremental ECL. This approach involved multiple stress scenarios and a range of potential outcomes. Factors considered in determining the range of ECL outcomes include varying degrees of possible length and severity of a recession, the effectiveness of collection strategies implemented to assist customers experiencing financial difficulty, the extent to which government subsidies will continue to be available as the COVID-19 pandemic continues, and the level of loan protection insurance held by customers within our portfolio. We will continue to revisit assumptions under this methodology in upcoming quarters as economic conditions evolve.

Transaction costs are expenses that relate directly to the onboarding and processing of new customers (excluding marketing), including expenses such as credit scoring fees, loan system transaction fees and certain fees related to the MogoCard and MogoProtect programs, transaction processing costs related to the Carta business and other transaction costs related to Moka. Transaction costs were $0.8 million for the three months ended June 30, 2021, an increase of $0.8 million compared to $0.01 million in the same period last year. Transaction costs were $1.2 million for the six months ended June 30, 2021, an increase of $1.0 million compared to $0.2 million in the same period last year. The increase during three and six month periods ended June 30, 2021, compared to the same periods last year was primarily due to the additional transaction costs related to the Carta and Moka acquisitions.

Technology and Development Expenses

The following table summarizes the technology and development expenses for the three and six months ended June 30, 2021 and 2020:

(000s, except percentages)
		Three months ended												Six months ended
		June 30,<br><br><br>2021				June 30,<br><br><br>2020				Percentage Change				June 30,<br><br><br>2021				June 30,<br><br><br>2020				Percentage Change
Technology and development	$	3,486			$	1,148				204	%		$	5,704			$	2,942				94	%
As a percentage of total revenue		26	%			11	%							23	%			12	%

All values are in US Dollars.

Technology and development expenses consist primarily of personnel and related costs of our product development, business intelligence, and information technology infrastructure employees. Associated expenses include third‑party data acquisition expenses, professional services, expenses related to the development of new products and technologies and maintenance of existing technology assets.

Technology and development expenses were $3.5 million for the three months ended June 30, 2021, an increase of $2.3 million compared to $1.1 million in the same period last year. Technology and development expenses were $5.7 million for the six months ended June 30, 2021, an increase of $2.8 million compared to $2.9 million in the same period last year.

The increases are primarily due to increased personnel and development costs as we focus on accelerating key growth initiatives including the development of MogoTrade and MogoInvest, and also due to continued investment in the development of the Carta platform.

We believe that this investment in technology and development is critical in order to capitalize on opportunities that will strengthen Mogo’s product service offerings and drive long-term member and revenue growth. Specifically, these include investments in the development of MogoTrade and MogoInvest, enhancements to our MogoCard and MogoCrypto products, and the expansion of Carta into the U.S. digital payments market, which represents the largest portion of the US$500 billion North American payments market. We believe that these strategic investments are critical to unlocking and integrating the full

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		Management’s Discussion and Analysis

potential of Mogo’s value proposition to consumers and will create a holistic and comprehensive user experience that positions us to drive accelerated long-term growth and user adoption.

Marketing Expenses

The following table summarizes the marketing expenses for the three and six months ended June 30, 2021 and 2020:

(000s, except percentages)
		Three months ended												Six months ended
		June 30,<br><br><br>2021				June 30,<br><br><br>2020				Percentage Change				June 30,<br><br><br>2021				June 30,<br><br><br>2020				Percentage Change
Marketing	$	4,154			$	610				581	%		$	7,190			$	1,843				290	%
As a percentage of total revenue		30	%			6	%							29	%			8	%

All values are in US Dollars.

Marketing expenses consist of salaries and personnel‑related costs, direct marketing and advertising costs related to online and offline customer acquisition (paid search advertising, search engine optimization costs, and direct mail), quarterly payments to Postmedia, public relations, promotional event programs and corporate communications.

Marketing expenses were $4.2 million for the three months ended June 30, 2021, an increase of $3.5 million compared to $0.6 million in the same period last year. Marketing expenses were $7.2 million for the six months ended June 30, 2021, an increase of $5.3 million compared to $1.8 million in the same period last year. This is primarily driven by an increase in performance marketing spend as we accelerated our growth investment to increase the Mogo member base and associated revenues from Mogo products. In addition, we have expanded the Carta sales team into new markets including the U.S.

Customer Service and Operations Expenses

The following table provides the customer service and operations expenses (“CS&O”) for the three and six months ended June 30, 2021 and 2020:

(000s, except percentages)
		Three months ended												Six months ended
		June 30,<br><br><br>2021				June 30,<br><br><br>2020				Percentage Change				June 30,<br><br><br>2021				June 30,<br><br><br>2020				Percentage Change
Customer service and operations	$	3,420			$	1,214				182	%		$	5,583			$	3,359				66	%
As a percentage of total revenue		25	%			11	%							22	%			14	%

All values are in US Dollars.

CS&O expenses consist primarily of salaries and personnel‑related costs for customer support, payment processing and collections employees. Associated expenses include third-party expenses related to credit data sources and collections.

CS&O expenses were $3.4 million for the three months ended June 30, 2021, an increase of $2.2 million compared to $1.2 million in the same period last year. CS&O expenses were $5.6 million for the six months ended June 30, 2021, an increase of $2.2 million compared to $3.4 million in the same period last year.

The variances in CS&O expense in the periods noted above are primarily attributable to the increase in customer support functions brought on through our recent acquisitions of Carta and Moka, as well as higher underwriting expenses from an acceleration of loan originations in the current quarter, compared to the temporary pause in loan originations in the comparative period.

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		Management’s Discussion and Analysis

General and Administration Expenses

The following table summarizes the general and administration expenses (“G&A”) for the three and six months ended June 30, 2021 and 2020:

(000s, except percentages)
		Three months ended												Six months ended
		June 30,<br><br><br>2021				June 30,<br><br><br>2020				Percentage Change				June 30,<br><br><br>2021				June 30,<br><br><br>2020				Percentage Change
General and administration	$	4,253			$	1,919				122	%		$	7,636			$	4,353				75	%
As a percentage of total revenue		31	%			18	%							30	%			18	%

All values are in US Dollars.

G&A expenses consist primarily of salary and personnel related costs for our executive, finance and accounting, credit analysis, underwriting, legal and compliance, fraud detection and human resources employees. Additional expenses include consulting and professional fees, insurance, legal fees, occupancy costs, travel and other corporate expenses.

G&A expenses were $4.3 million for the three months ended June 30, 2021, an increase of $2.3 million compared to $1.9 million in the same period last year. G&A expenses were $7.6 million for the six months ended June 30, 2021, an increase of $3.3 million compared to $4.4 million in the same period last year. The increases in the periods noted above are primarily due to increased costs resulting from the acquisitions of Carta and Moka in the current year.

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		Management’s Discussion and Analysis

Stock Based Compensation and Depreciation and Amortization

The following table summarizes the stock based compensation and depreciation and amortization. Expenses for the three and six months ended June 30, 2021, and 2020 were as follows:

(000s, except percentages)
		Three months ended													Six months ended
		June 30,<br><br><br>2021					June 30,<br><br><br>2020				Percentage Change				June 30,<br><br><br>2021				June 30,<br><br><br>2020				Percentage Change
Stock based compensation	$	3,805				$	460				727	%		$	4,362			$	674				547	%
Depreciation and amortization		2,971					2,287				30	%			5,389				4,512				19	%
			6,776					2,747								9,751				5,186
As a percentage of total revenue		50	%				26	%							39	%			21	%

All values are in US Dollars.

Stock based compensation represents the fair value of stock options granted to employees and directors measured using the Black Scholes valuation model and amortized over the vesting period of the options. Depreciation and amortization is principally related to the amortization of intangible assets relating to internally capitalized development costs related to our technology platform, and technology, licenses and customer relationships acquired in the acquisitions of Carta and Moka. Stock based compensation and depreciation and amortization are all non-cash expenses.

Stock based compensation increased to $3.8 million in the three months ended June 30, 2021 compared to $0.5 million in the three months ended June 30, 2020, and increased to $4.4 million in the six months ended June 30, 2021 from $0.7 million in the six months ended June 30, 2020. The increases were driven by stock option grants issued to employees in the first quarter of 2021.

Depreciation and amortization increased to $3.0 million in the three months ended June 30, 2021 compared to $2.3 million in the three months ended June 30, 2020 driven by the amortization of intangible assets recognized in the acquisition of Carta and Moka. Depreciation and amortization increased to $5.4 million in the six months ended June 30, 2021 from $4.5 million in the six months ended June 30, 2020 for the same reason.

Credit Facility Interest Expense

The following table provides a breakdown of credit facility interest expense for the three and six months ended June 30, 2021 and 2020:

(000s, except percentages)
		Three months ended												Six months ended
		June 30,<br><br><br>2021				June 30,<br><br><br>2020				Percentage change				June 30,<br><br><br>2021				June 30,<br><br><br>2020				Percentage<br><br><br>change
Credit facility interest expense – Other	$	1,005			$	1,580				(36	)%		$	2,001			$	3,237				(38	)%
Credit facility interest expense – Liquid		—				—			n/a					—				909				100	%
Total credit facility interest expense		1,005				1,580				(36	)%			2,001				4,146				(52	)%
As a percentage of total revenue		7	%			15	%							8	%			17	%

All values are in US Dollars.

Credit facility interest expense relates to the costs incurred in connection with our Credit Facility – Other, and prior to the Liquid Sale in Q1 2020 our Credit Facility – Liquid which has been repaid in full. It includes interest expense and the amortization of deferred financing costs.

Credit facility interest expense for the three months ended June 30, 2021, was $1.0 million compared to $1.6 million in the same period of 2020, a decrease of $0.6 million or 36%. Credit facility interest expense for the six months ended June 30, 2021, was $2.0 million compared to $4.1 million in the same period of 2020, a decrease of $2.1 million or 52%. Credit facility interest expense as a percentage of total revenue decreased from 15% to 7% for the three months ended June 30, 2021, and from 17% to 8% for the six months ended June 30, 2021.

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		Management’s Discussion and Analysis

The decrease in credit facility interest expense was driven by the extinguishment of the Credit Facility – Liquid during Q1 2020, a reduction in the interest rate on the Credit Facility – Other to 10.5% from 14.5% effective July 2, 2020, and repayments of the Credit Facility - Other resulting in lower related interest payments.

Other Income and Expense

The following table provides a breakdown of other income and expense by type for the three and six months ended June 30, 2021 and 2020:

(000s, except percentages)
		Three months ended												Six months ended
		June 30,<br><br><br>2021				June 30,<br><br><br>2020				Percentage change				June 30,<br><br><br>2021				June 30,<br><br><br>2020				Percentage<br><br><br>change
Debenture and other financing expense	$	871			$	1,946				(55	)%		$	1,823			$	3,830				(52	)%
Accretion related to debentures and convertible debentures		312				168				86	%			621				377				65	%
Share of loss in investment accounted for using the equity method		2,860				—			n/a					2,860				—			n/a
Revaluation (gains) losses		(24,850	)			1,186			n/a					(30,112	)			3,347			n/a
Other non-operating expenses (income)		752				(1,396	)		n/a					2,264				199				1038	%
Total other (income) expense		(20,055	)			1,904			n/a					(22,544	)			7,753			n/a
As a percentage of total revenue		(147	)%			18	%							(90	)%			32	%

All values are in US Dollars.

Total other (income) expense was $(20.1) million for the three months ended June 30, 2021, an increase of $21.9 million compared to the same period last year. Total other (income) expense was $(22.5) million for the six months ended June 30, 2021, an increase of $30.3 million compared to the same period last year. The change in total other (income) expense was primarily attributable to the revaluation gain (loss) on Coinsquare derivative instruments of ($24.8) million during three and six month periods ended June 30, 2021.

Debenture and other financing expense primarily consist of interest expense related to our non-convertible and convertible debentures and interest expense related to our lease liabilities resulting from the adoption of IFRS 16. Debenture and other financing expense decreased by 55% and 52% for the three and six months ended June 30, 2021, respectively, compared to the same periods last year. The decreases are primarily related to the amendments made to the terms of the debentures, effective July 1, 2020, resulting in the reduction in the average coupon interest rate, from approximately 14% to approximately 7%. Additionally, the convertible debentures were fully converted to equity in Q1 2021 and no longer contribute to debenture expense.

On April 16, 2021, the Company completed its initial 19.99% strategic investment in Coinsquare. This transaction included (i) a right for Mogo to purchase additional Coinsquare common shares from existing shareholders, being the Call Option; (ii) a right for certain selling shareholders to require Mogo to purchase additional Coinsquare common shares (the “Put Option”) and; (iii) the issuance to Mogo of the Coinsquare Warrant. In a separate transaction, on June 15, 2021, Mogo purchased additional common shares of Coinsquare from a selling shareholder which included a right for Mogo to purchase additional Coinsquare common shares under certain conditions (the “New Call Option”). The Call Option, the Put Option, the Coinsquare Warrants, and the New Call Option (collectively, the “Derivative Financial Instruments”) are accounted for as derivatives on Mogo’s balance sheet, revalued at each reporting period through profit and loss.

Revaluation (gains) losses for the three and six months ended June 30, 2021, are primarily due to $(24.8) million of gains related to the Derivative Financial Instruments driven largely by a revaluation gain on our Coinsquare Warrants using a Black Scholes model as at June 30, 2021. Market transactions occurring subsequently to our initial acquisition of the warrants imply a higher company valuation on Coinsquare relative to that as at the Initial Transaction date, thereby increasing the value of the warrants. For the six months ended June 30, 2021, this was additionally due to net gains on our investment portfolio, contrasting

19 | Page

		Management’s Discussion and Analysis

net investment portfolio revaluation losses experienced in the comparative period, as we recorded losses in 2020 driven primarily by the initial impact of COVID-19 on capital markets.

In the three months ended June 30, 2021, Mogo recorded an equity pickup amounting to a $2.9 million loss from its share of Coinsquare’s profits and losses for Q2 2021. Although Coinsquare reported an overall breakeven quarter on net income, there was volatility in income and losses across the quarter. Operating profits and non-operating gains were heavily concentrated in the first half of the quarter, while operating and non-operating losses were concentrated in the second half of the quarter. In addition, we note that overall cryptocurrency volumes came down in the latter part of the quarter by more than 50%, a trend which was generally observed across the broader cryptocurrency industry. Coinsquare's total assets under management (“AUM”) are over $700 million as at August 9, 2021. Given that Mogo stepped up its ownership in Coinsquare from 20% to 39% in the second half of Q2 2021, its share of equity pickup for the quarter generally comprised a smaller pickup of gains and a larger pickup of losses resulted in an overall net loss pickup.

In Q1 2021, Mogo completed a US$54.0 million registered direct offering of common shares and common share purchase warrants. By virtue of the warrants having an exercise price denominated in USD, different than Mogo’s functional currency, the warrants are classified as a derivative liability as opposed to equity on the balance sheet. The Company has recorded a fair value loss of $2.1 million related to the derivative stock warrants during first half of 2021. If the exercise price of these warrants had been denominated in CAD, the warrants would have been classified as equity with no subsequent revaluations through profit and loss. As a result of this transaction, the portion of total transaction costs incurred with respect to the offering that is proportionate to the fair value of the derivative liability as a percentage of the total USD$54.0 million proceeds, was recognized to net loss during the quarter. The $1.5 million expense was recorded to other non-operating expenses.

Other Comprehensive Income and Loss

The following table provides a breakdown of other comprehensive income and loss by type for the three and six months ended June 30, 2021 and 2020:

(000s, except percentages)
		Three months ended										Six months ended
		June 30,<br><br><br>2021				June 30,<br><br><br>2020				Percentage change		June 30,<br><br><br>2021				June 30,<br><br><br>2020				Percentage<br><br><br>change
Unrealized revaluation (loss) gain on digital assets		(550	)			—			n/a		$	26			$	—			n/a
Foreign currency translation reserve gain		72				—			n/a			360				—			n/a
Other comprehensive (loss) income		(478	)			—			n/a			386				—			n/a

All values are in US Dollars.

Total other comprehensive income (loss) was ($0.5) million for the three months ended June 30, 2021. Total other comprehensive income was $0.4 million for the six months ended June 30, 2021.

Following the financial investment in Bitcoin in Q1 2021, the Company has recognized digital assets as indefinite lived intangible assets measured under the revaluation model at fair value and recognizes cumulative fair value gains relating to these digital assets through other comprehensive income, and cumulative fair value losses to the extent that they reverse previously recognized cumulative gains through other comprehensive income. See Note 3 of the financial statements for our detailed accounting policy.

Unrealized revaluation loss on digital assets were ($0.6) million for the three months ended June 30, 2021. Unrealized revaluation gains on digital assets were $0.03 million for the six months ended June 30, 2021. These gains and losses are due to change in the market prices of Bitcoin and Ether across the periods.

From the date of the acquisition of Carta in Q1 2021, the Company consolidates foreign operations with functional currencies denominated in a foreign currency. The assets and liabilities of foreign operations are translated to CAD using exchange rates

20 | Page

		Management’s Discussion and Analysis

at the reporting date whilst their income and expenses are translated to CAD using exchange rates at the dates of the transactions. Foreign currency differences arising are recognized in other comprehensive income or loss.

Foreign currency translation reserve gains were $0.07 million for the three months ended June 30, 2021. Foreign currency translation reserve gains were $0.4 million for the six months ended June 30, 2021. These gains are due to fluctuations in foreign currency exchange rates across the periods.

Selected Quarterly Information

(000s, except per share amounts)
		2021								2020																2019
		Second<br><br><br>Quarter				First<br><br><br>Quarter				Fourth<br><br><br>Quarter				Third<br><br><br>Quarter				Second<br><br><br>Quarter				First<br><br><br>Quarter				Fourth<br><br><br>Quarter				Third<br><br><br>Quarter
Income Statement Highlights
Total revenue	$	13,665			$	11,420			$	10,002			$	9,774			$	10,559			$	13,910			$	15,018			$	15,029
Net income (loss)		9,045				(2,817	)			(2,849	)			1,019				(1,550	)			(10,065	)			(6,188	)			(6,033	)
Net income (loss) per common share (basic)		0.14				(0.06	)			(0.09	)			0.04				(0.06	)			0.36				(0.24	)			(0.22	)
Net income (loss) per common share (fully diluted)		0.13				(0.06	)			(0.09	)			0.04				(0.06	)			0.36				(0.24	)			(0.22	)
Non-IFRS Financial Measures(1)
Adjusted EBITDA		(2,962	)			(1,066	)			1,052				4,825				5,197				544				2,295				1,081

All values are in US Dollars.

Key Quarterly Trends

We have experienced continued quarter over quarter revenue growth since Q3 2020, driven by continuous growth in our subscription and services revenue and increasing uptake in our broadening portfolio of products along with the addition of transaction processing revenues related to the acquisition of Carta and other subscription and service based revenue related to the acquisition of Moka. Year over year total revenues primarily reflect a decrease in loan origination volumes primarily due to the sale of our Liquid loan portfolio in Q1 2020, and discontinuation of bitcoin mining operations in Q3 2019.

Net income (loss) during Q2 2021 and Q1 2021, was relatively better than 2019 and first quarter of 2020 driven by a $24.8 million fair value gain due to revaluation of derivative financial assets during Q2 2021 and a $5.3 million unrealized gain on our investment portfolio in Q1 2021. Net income (loss) performed well from Q3 2020 to Q2 2021 relative to the prior periods due to a significant reduction in our operating costs during COVID-19.

Adjusted EBITDA generally fluctuated within the same range from Q3 2019 to the end of 2019, and the decline in Q1 2020 was primarily attributable to the initial upfront COVID-19 allowance recorded to loan loss provision expense in that quarter, based on our estimate of future losses that would result from worsening economic conditions associated with COVID-19. During Q2 2020 and Q3 2020, the improvement in Adjusted EBITDA is driven primarily by a dedicated plan implemented in late March 2020 to significantly reduce operating expenses, and strong loan book performance despite the COVID-19 pandemic, whereas for last three quarters, adjusted EBITDA decreased due to our resumed investment in growth expenses, for which there is a timing lag between expenditure and revenue growth.

(1)For more information regarding our use of these non-IFRS measures and, where applicable, a reconciliation to the most comparable IFRS measure, see “Non-IFRS Financial Measures”.

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		Management’s Discussion and Analysis

Key Balance Sheet Components

The following table provides a summary of the key balance sheet components as at June 30, 2021 and December 31, 2020:

(000s)					As at
		June 30,<br><br><br>2021				December 31,<br><br><br>2020
Cash	$	55,406			$	12,119
Loans receivable, net		48,460				47,227
Investment portfolio		19,173				18,445
Investment accounted for using the equity method		101,803				—
Intangible assets		62,404				18,912
Derivative financial assets		30,321				—
Goodwill		58,944				—
Total assets		390,136				104,468
Total liabilities		112,261				99,232

All values are in US Dollars.

Total assets increased by $286.0 million during the six months ended June 30, 2021. The increase is primarily due to $104.4 million of goodwill and other intangible assets related to Carta and Moka, $102 million related to investment in an associate, derivative financial asset of $30.3 million related to investment in an associate and net cash proceeds of $88.4 million from issuing of common shares including shares issued in lieu of warrants and stock options.

Total liabilities increased by $13.0 million during the six months ended June 30, 2021. The increase is primarily due to the $16.1 million derivative stock warrants recognized in connection with the USD denominated exercise price of warrants issued under the US$54.0 million registered direct offering in Q1 2021, partially offset by the conversion of convertible debentures.

Loans receivable

The following table provides a breakdown of loans receivable as at June 30, 2021 and December 31, 2020:

(000s)					As at
		June 30,<br><br><br>2021				December 31,<br><br><br>2020
Gross loans receivable	$	56,699			$	56,113
Allowance for loan losses		(8,239	)			(8,886	)
Net loans receivable		48,460				47,227

All values are in US Dollars.

The gross loans receivable portfolio was $56.7 million as at June 30, 2021, an increase of $0.6 million compared to the balance as at December 31, 2020, the increase is primarily due to an increase in originations.

(000s)
		Three months ended								Six months ended
		June 30,<br><br><br>2021				June 30,<br><br><br>2020				June 30,<br><br><br>2021				June 30,<br><br><br>2020
Balance, beginning of period		9,182				15,145				8,886				16,020
Derecognition of allowance associated with loan sale		—				—				—				(2,131	)
Provision for loan losses		961				1,311				2,822				6,983
Charge offs		(1,904	)			(4,142	)			(3,469	)			(8,558	)
Balance, end of period		8,239				12,314				8,239				12,314

All values are in US Dollars.

22 | Page

		Management’s Discussion and Analysis

The allowance for loan losses is reported on the Company’s balance sheet and is netted against gross loans receivable to arrive at the net loans receivable. The allowance for loan losses represents our estimate of the ECL inherent in our loan portfolio. Refer to Note 4 of the interim condensed consolidated financial statements for a breakdown of gross loans receivable and allowance for loan losses by aging category based on their IFRS 9 ECL measurement stage. The Company assesses its allowance for loan losses at each reporting date. Increases in the provision for loan losses, net of recoveries, are recorded as a cost of revenue in the interim condensed consolidated statement of operations and comprehensive loss.

The allowance for loan losses as a percentage of gross loans receivable improved from 15.8% as at December 31, 2020 to 14.5% as at June 30, 2021. As at June 30, 2021, the allowance still includes an incremental allowance in respect of potential future losses arising from COVID-19 as a result of the requirement under IFRS 9 to account for forward-looking indicators when determining the allowance. We believe that the COVID-19 related allowance is adequate to absorb any material shocks to the loan book as a result of COVID-19 conditions. It should be noted that this upfront COVID-19 related allowance has already been reflected in our provision for loan losses in the consolidated statements of operations and comprehensive loss. Refer to the “Cost of revenue” section above for further discussion of the impact of COVID-19 on the provision for loan losses.

The Company reserves and charges off consumer loan amounts to the extent that there is no reasonable expectation of recovery, once the loan or a portion of the loan has been classified as past due for more than 180 consecutive days. Recoveries on loan amounts previously charged off are credited against the provision for loan losses when collected.

In the opinion of management, the Company has provided adequate allowances to absorb expected credit losses inherent in its loan portfolio based on available and relevant information affecting the loan portfolio at each balance sheet date. The Company cannot guarantee that delinquency and loss levels will correspond with the historical levels experienced and there is a risk that delinquency and loss rates could change significantly.

Transactions with Related Parties

Related party transactions during the three and six months ended June 30, 2021, include transactions with debenture holders that incur interest. The related party debentures balance as at June 30, 2021 totaled $259,000 (December 31, 2020 – $358,000). The debentures bear annual coupon interest of 8.0% (December 31, 2020 – 8.0%) with interest expense of $5,000 and $12,000 for the three and six months ended June 30, 2021, respectively (three and six months ended June 30, 2020 – $14,000 and $25,000 respectively). The related parties involved in such transactions were (i) a member of the family of Gregory Feller, a director and officer of the Company; (ii) David Feller, a director and officer of the Company; and (iii) key management personnel and members of their families. The debentures are ongoing contractual obligations that are used to fund our corporate and operational activities.

On June 30, 2021, the Company acquired 1.3 common shares of Tetra Trust Company from its associate Coinsquare for $1.3 million.

Off‑Balance Sheet Arrangements

We have no off‑balance sheet arrangements that have, or are likely to have, a current or future material effect on our consolidated financial position, financial performance, liquidity, capital expenditures or capital resources.

23 | Page

		Management’s Discussion and Analysis

Liquidity and Capital Resources

To date the Company has funded its lending activities, expenses and losses primarily through the proceeds of its initial public offering which raised $50 million in 2015, subsequent issuance of common shares, convertible debentures, warrants,  private placements of preferred shares, placements of debentures, credit facilities, and cash from operating activities. The business combination between the Company (formerly Difference Capital Financial Inc.) and Mogo Finance Technology Inc. in the second quarter of 2019 also added to the Company’s capital resources and strengthened its financial position with an investment portfolio which the Company is actively seeking to monetize. The value of Mogo’s investment portfolio as at June 30, 2021 was $18.4 million. In the first quarter of 2020, the Company completed the Liquid Sale: being the sale of a majority of its MogoLiquid loan portfolio for total gross consideration of $31.6 million, using the proceeds to extinguish its Credit Facility - Liquid. In order to support its growth strategy, the Company gives consideration to additional financing options including accessing the capital markets for additional equity or debt, monetization of our investment portfolio, increasing the amount of long-term debentures outstanding or increasing availability under existing or new credit facilities.

We manage our liquidity by continuously monitoring revenues, expenses and cash flow compared to budget. To maintain adequate liquidity, the long-term business goal of the Company is to diversify its funding sources. The purpose of diversification by source, geographic location and maturity is to mitigate liquidity and funding risk by ensuring that the Company has in place alternative sources of funds that strengthen its capacity to withstand a variety of market conditions and support its long-term growth. Management expects that they will be able to refinance any outstanding amounts owing under the Credit Facilities or our long-term debentures, in each case as they become due and payable. The debentures are subordinated to the Credit Facility – Other which has the effect of extending the maturity date of the debentures to the later of contractual maturity or the maturity date of Credit Facility – Other, being July 2, 2022.

On December 31, 2020, the Company established an at-the-market equity program to raise funds for operational expenditures, to maintain the Company’s working capital balances, and for general corporate purposes. The Company sold 1,524,759 common shares on the NASDAQ and received cash proceeds of approximately $18.3 million (US$14.4 million), net of agent commission. The program was terminated on February 21, 2021.

On February 24, 2021, the Company issued to certain individual investors an aggregate of 5,346,536 common shares at a purchase price of US$10.10 per common share and received cash proceeds of approximately $62.8 million (US$50.1 million), net of agent commission. In a concurrent private placement, Mogo completed the issuance to the investors of unregistered warrants to purchase up to an aggregate of 2,673,268 common shares at an exercise price of US$11.00 at any time prior to the date which is three and a half years following the data of issuance. A portion of the net proceeds from the offering were used to fund the cash component of the investment in Coinsquare, with the remaining net proceeds to be used for general corporate and working capital purposes.

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		Management’s Discussion and Analysis

Cash Flow Summary

The following table provides a summary of cash inflows and outflows by activity for the three and six months ended June 30, 2021 and 2020:

(000s)
		Three months ended								Six months ended
		June 30,<br><br><br>2021				June 30,<br><br><br>2020				June 30,<br><br><br>2021				June 30,<br><br><br>2020
Cash (used in) provided by operating activities before<br>investment in gross loans receivable(1)	$	(5,812	)		$	2,773			$	(8,575	)		$	2,417
Proceeds from sale of loan book		—				—				—				31,572
Cash (invested in) provided by loans receivable		(3,035	)			5,456				(4,055	)			3,428
Cash (used in) provided by operating activities		(8,847	)			8,229				(12,630	)			37,417
Cash used in investing activities		(34,288	)			(882	)			(34,218	)			(2,753	)
Cash provided by (used in) financing activities		3,220				(6,386	)			89,763				(37,596	)
Net (decrease) increase in cash for the period		(39,915	)			961				42,915				(2,932	)

All values are in US Dollars.

Net cash decrease in the three months ended June 30, 2021 was a $(39.9) million outflow compared to $1.0 million inflow during the same period last year. Net cash increase in the six months ended June 30, 2021, was $42.9 million inflow compared to ($2.9) million outflow during the same period last year. The decrease in cash flow during the three months ended June 30, 2021, is primarily due to cash investment in Coinsquare and our investment portfolio, whereas the increase for the six month period ended June 30, 2021, is primarily due to net cash inflow of $80.8 million from issuance of common shares and $6.1 million related to proceeds from common shares issued from the exercise of warrants, offset with cash outflows related to our investment in an associate. The prior period includes proceeds of $31.6 million from sale of our MogoLiquid loan book, which we used primarily to pay down our Credit Facility- Liquid.

Cash (used in) provided by operating activities

Our operating activities consist of our subscription and services revenue inflows, our cash operating and interest expense outflows, as well as the funding and servicing of our loan products, including the receipt of principal and interest payments from our loan customers, and payment of associated direct costs and receipt of associated fees.

Cash (used in) provided by operating activities before investment in gross loans receivable was ($5.8) million outflow in the three months ended June 30, 2021, compared to $2.8 million inflow in the same period last year. Cash provided by (used in) operating activities before investment in gross loans receivable was ($8.6) million outflow in the six months ended June 30, 2021, compared to $2.4 million inflow in the same period last year. This increase is primarily due to higher cash operating expenses primarily related to a return to growth investment and from our Carta and Moka acquisitions, as well as the timing of vendor payments creating negative cash flows from changes in working capital.

Cash (invested in) provided by loans receivable was ($3.0) million in the three months ended June 30, 2021, compared to $5.5 million in the same period last year. Cash invested in loans receivable was ($4.1) million in the six months ended June 30, 2021, compared to $3.4 million in the same period last year. This was the result of management reducing net loan originations relative to the same period last year in light of the COVID-19 pandemic and sale of Liquid loan book in February 2020.

In the three months ended June 30, 2021, cash (used in) provided by operating activities was ($8.9) million outflow, compared to $8.2 million inflow in the same period last year. In the six months ended June 30, 2021, (used in) cash provided by operating activities was ($12.6) million outflow, compared to $37.4 million inflow in the same period last year. Variance is due to the reasons mentioned above along with $31.6 million of proceeds from the Liquid Sale in February 2020.

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		Management’s Discussion and Analysis

Cash used in investing activities

Our investing activities consist primarily of capitalization of software development costs, purchases of property, equipment and software, investment in digital assets, cash invested in investment accounted for using the equity method and cash acquired in a business combination. The cash flow may vary from period to period due to the timing of the expansion of our operations, changes in employee headcount and the development cycles of our internal‑use technology.

For the three months ended June 30, 2021, cash used in investing activities was a ($34.3) million outflow, compared to a ($0.9) million outflow in the same period last year. For the six months ended June 30, 2021, cash used in investing activities was ($34.2) million outflow, compared to ($2.8) million outflow in the same period last year. The increase is primarily due to cash outflow of ($32.4) million related to investments in Coinsquare in Q2 2021.

Cash provided by (used in) financing activities

Historically, our financing activities have consisted primarily of the issuance of our common shares, debentures, convertible debentures, monetizations of our investment portfolio and borrowings and repayments on our credit facilities.

Cash provided by (used in) financing activities in the three months ended June 30, 2021, was $3.2 million inflow compared to ($6.4) million outflow in the same period last year. The inflow is primarily due to cash received from sale of Vena, and exercise of stock options, partially offset with cash invested in the investment portfolio during Q2 2021.

Cash provided by (used in) financing activities in the six months ended June 30, 2021 was $89.8 million inflow, primarily due to net cash inflow of $80.8 million from issuance of common shares and $6.1 million related to proceeds from common shares issued from the exercise of warrants. Comparatively for the same period last year, cash (used in) provided by financing activities was ($37.6) million, driven primarily by the payoff of our Credit Facility- Liquid.

Contractual Obligations

The following table shows contractual obligations as June 30, 2021. Management will continue to refinance any outstanding amounts owing under the Credit Facilities or our long-term debentures as they become due and payable.

(000s)	2021				2022				2023				2024				2025				Thereafter
Commitments - operational
Lease payments		762				1,446				1,297				1,206				1,240				2,727
Trade payables		7,240				—				—				—				—				—
Accrued wages and other expenses		9,532				—				—				—				—				—
Interest – Credit Facilities		1,967				1,967				—				—				—				—
Interest – Debentures		1,542				2,986				1,875				352				—				—
Purchase obligations		526				1,052				—				—				—				—
			21,569				7,451				3,172				1,558				1,240				2,727
Commitments – principal repayments
Credit Facility – Other		—				37,476				—				—				—				—
Debentures		1,545				2,174				19,634				18,878				—				—
			1,545				39,650				19,634				18,878				—				—
Total contractual obligations		23,114				47,101				22,806				20,436				1,240				2,727

All values are in US Dollars.

26 | Page

		Management’s Discussion and Analysis

Disclosure of Outstanding Shares

The authorized capital of Mogo consists of an unlimited number of common shares without par value and an unlimited number of preferred shares, issuable in one or more series. As of August 11, 2021, no preferred shares have been issued and the following common shares, and rights to acquire common shares, were outstanding:

Class of Security		Number outstanding (in 000s) as at August 11, 2021
Common shares			70,375
Stock options			6,316
Restricted share units			52
Common share purchase warrants			1,760

27 | Page

		Management’s Discussion and Analysis

Risk Management

In the normal course of business, the Company is exposed to financial risk that arises from a number of sources. Management’s involvement in operations helps identify risks and variations from expectations. As a part of the overall operation of the Company, Management takes steps to avoid undue concentrations of risk, the Company’s significant risk and related policies are described further in the notes to the Company’s annual consolidated financial statements for the year ended December 31, 2020 and interim condensed consolidated financial statements for the three and six months ended June 30, 2021.

Non-IFRS Financial Measures

This MD&A makes reference to certain non-IFRS financial measures. Adjusted EBITDA and adjusted cash net loss are both non-IFRS financial measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company’s results of operations from management’s perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS.

We use non‑IFRS financial measures to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures. We believe that securities analysts, investors and other interested parties frequently use non‑IFRS financial measures in the evaluation of issuers.

Our management also uses non‑IFRS financial measures in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets and assess our ability to meet our capital expenditure and working capital requirements. These non-IFRS financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for an analysis of our results under IFRS. There are a number of limitations related to the use of non‑IFRS financial measures versus their nearest IFRS equivalents. Investors are encouraged to review our financial statements and disclosures in their entirety and are cautioned not to put undue reliance on any non‑IFRS financial measure and view it in conjunction with the most comparable IFRS financial measures. In evaluating these non‑IFRS financial measures, you should be aware that in the future we will continue to incur expenses similar to those adjusted in these non-IFRS financial measures.

Adjusted EBITDA

Adjusted EBITDA is a non-IFRS financial measure that we calculate as net loss and comprehensive loss excluding depreciation and amortization, stock-based compensation, non-cash warrant expense, one-time provision for excise tax, credit facility interest expense, debenture and other financing expense and related accretion, gain on acquisition, revaluation (gains) and losses and other non-operating (income) expenses. Adjusted EBITDA is a measure used by management and the Board to understand and evaluate our core operating performance and trends. The following table presents a reconciliation of adjusted EBITDA to net loss and comprehensive loss, the most comparable IFRS financial measure, for each of the periods indicated:

(000s)
		Three months ended								Six months ended
		June 30,<br><br><br>2021				June 30,<br><br><br>2020				June 30,<br><br><br>2021				June 30,<br><br><br>2020
Net income (loss) before tax	$	9,055			$	(1,550	)		$	6,246			$	(11,615	)
Depreciation and amortization		2,971				2,287				5,389				4,512
Stock‑based compensation		3,805				460				4,362				674
Non-cash warrant expense		257				516				526				271
Credit facility interest expense		1,005				1,580				2,001				4,146
Debenture and other financing expense		871				1,946				1,823				3,830
Accretion related to debentures and convertible debentures		312				168				621				377
Share of loss in investment accounted for using the equity method		2,860				—				2,860				—
Revaluation (gains) losses		(24,850	)			1,186				(30,112	)			3,347
Other non-operating expenses (income)		752				(1,396	)			2,264				199
Adjusted EBITDA		(2,962	)			5,197				(4,020	)			5,741

All values are in US Dollars.

28 | Page

		Management’s Discussion and Analysis

Adjusted net income (loss) and adjusted cash net income (loss)

Adjusted net loss is a non-IFRS financial measure that we calculate as net income (loss) before tax and comprehensive income (loss) excluding stock-based compensation, revaluation (gains) and losses, net, and other non-operating expenses. This measure differs from adjusted EBITDA in that adjusted net loss includes depreciation and amortization, credit facility interest expense and debenture and other financing expense, and thus comprises more elements of the Company’s overall net profit or loss. Adjusted net loss is a measure used by management and the Board to evaluate the Company’s overall financial performance.

Adjusted cash net income (loss) is a non-IFRS financial measure that excludes from adjusted net income (loss) depreciation and amortization, deferred financing costs and non-cash interest expense, which are expenses recognized in the period that do not impact cash flow in that period, as well as other non-operating (income) and expenses. It also deducts capitalized intangible assets which are cash outflows in the period that get capitalized to the statement of financial position, rather than expensed through the statement of operations and comprehensive loss. Adjusted cash net loss is a measure used by our management and Board to evaluate core cash flow trends within the business. We believe that the adjustment out of net loss of certain non-cash related items, and inclusion of recurring capitalized cash costs, provides a useful gauge of underlying net cash flow in the business, excluding impacts of timing differences from changes in working capital.

The following table presents a reconciliation of adjusted net loss and adjusted cash net loss to net loss and comprehensive loss, the most comparable IFRS financial measure, for each of the periods indicated:

(000s)
		Three months ended								Six months ended
		June 30,<br><br><br>2021				June 30,<br><br><br>2020				June 30,<br><br><br>2021				June 30,<br><br><br>2020
Net income (loss) before tax		9,055				(1,550	)			6,246				(11,615	)
Stock‑based compensation		3,805				460				4,362				674
Non-cash warrant expense		257				516				526				271
Revaluation (gains) losses		(24,850	)			1,186				(30,112	)			3,347
Other non-operating expenses (income)		752				(1,396	)			2,264				199
Adjusted net (loss)		(10,981	)			(784	)			(16,714	)			(7,124	)
Depreciation and amortization		2,971				2,287				5,389				4,512
Deferred financing cost amortization		—				—				—				222
Accretion related to debentures and convertible debentures		312				168				621				377
Share of loss from an associate		2,860				—				2,860				—
Convertible debenture non-cash interest		—				314				32				628
Debenture interest expense added to principal		—				1,505				—				1,505
Capitalization cost of intangible assets		(1,014	)			(882	)			(2,197	)			(2,730	)
Adjusted cash net (loss) income		(5,852	)			2,608				(10,009	)			(2,610	)

All values are in US Dollars.

29 | Page

		Management’s Discussion and Analysis

Non-Financial Measures

Mogo members

Mogo members is not a financial measure. Mogo members refers to the number of individuals who have signed up for one or more of our products and services including: MogoMoney, MogoProtect, MogoSpend, MogoMortgage, MogoCrypto, Moka services our, premium account subscription offerings, free credit score with free monthly credit score monitoring, unique content, or events. People cease to be Mogo members if they do not use any of our products or services for 12 months and have a deactivated account. Reported Mogo members may overstate the number of unique individuals who actively use our products and services within a 12-month period, as one individual may register for multiple accounts whether inadvertently or in a fraudulent attempt. Customers are Mogo members who have accessed one of our revenue generating products, including MogoMoney, MogoProtect, MogoSpend, MogoMortgage, MogoCrypto, Moka services and our premium account subscription offerings. Management believes that the size of our Mogo member base is one of the key drivers of the Company’s future performance. Our goal is to continue to grow and monetize our member base as we build our digital financial platform, launch new products and strive to build the largest digital financial brand in Canada.

Critical Accounting Estimates

The preparation of the interim consolidated financial statements requires management to make estimates, assumptions and judgments that affect the reported amount of assets and liabilities, and the reported amount of revenues and expenses during the period. Actual results may differ from these estimates. Estimates, assumptions, and judgments are reviewed on an ongoing basis. Revisions to accounting estimates are recognized on a prospective basis beginning from the period in which they are revised.

Significant estimates and judgments include the capitalization of intangible assets, valuation of long-lived assets, allowance for loan losses, valuation of privately held investments, share-based payments, income taxes, valuation of goodwill and acquired intangible assets, derivative stock warrants, valuation of derivative assets and judgments surrounding the accounting for digital assets, which are described further in the notes to the Company’s consolidated financial statements for the twelve months ended December 31, 2020 and interim condensed consolidated financial statements for the three months ended June 30, 2021.

Changes in Accounting Policies including Initial Adoption

Recent IFRS standards adopted in 2021

Certain new or amended standards and interpretations became effective on January 1, 2021 or later, but do not have an impact on the interim condensed consolidated financial statements of the Company. The Company has not adopted any standards or interpretations that have been issued but are not yet effective.

Significant accounting policies

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Company’s annual consolidated financial statements for the year ended December 31, 2020, except for the new policies discussed in note 3 to the interim condensed consolidated financial statements.

Controls and Procedures

The Company’s CEO and CFO are responsible for establishing and maintaining disclosure controls and procedures for the Company. The Company maintains a set of disclosure controls and procedures designed to provide reasonable assurance that information required to be publicly disclosed is recorded, processed, summarized and reported on a timely basis. The CEO and CFO have evaluated the design of the Company’s disclosure controls and procedures at the end of the quarter and based on the evaluation, the CEO and CFO have concluded that the disclosure controls and procedures are effectively designed.

30 | Page

		Management’s Discussion and Analysis

Internal Controls over Financial Reporting

The Company’s internal controls over financial reporting (“ICFR”) are designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. The Company’s management is responsible for establishing and maintaining adequate ICFR for the Company. Management, including the CEO and CFO, does not expect that the Company’s ICFR will prevent or detect all errors and all fraud or will be effective under all future conditions. A control system is subject to inherent limitations and even those systems determined to be effective can provide only reasonable, but not absolute, assurance that the control objectives will be met with respect to financial statement preparation and presentation. The Company’s management under the supervision of the CEO and CFO has evaluated the design of the Company’s ICFR based on the Internal Control – Integrated Framework issued in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission. As at June 30, 2021, management assessed the design of the Company’s ICFR and concluded that such ICFR is appropriately designed, and that there are no material weaknesses in the Company’s ICFR that have been identified by management. There have been no changes in the Company's ICFR during the period that have materially affected, or are likely to materially affect, the Company's ICFR.

31 | Page

mogo-ex993_7.htm

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

I, David Feller, Chief Executive Officer of Mogo Inc., certify the following:

1.	Review: I have reviewed the interim financial report and interim MD&A (together, the "Interim filings") of Mogo Inc. (the "issuer") for the interim period ended June 30, 2021.
2.	No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the Interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
---	---
3.	Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
---	---
4.	Responsibility: The issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings, for the issuer.
---	---
5.	Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer's other certifying officer and I have, as at the end of the period covered by the interim filings
---	---
	(a)	designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
---	---	---
	(i)	material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared: and
---	---	---
	(ii)	information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
---	---	---
	(b)	designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer's GAAP.
---	---	---
5.1	Control framework: The control framework the issuer's other certifying officer and I used to design the issuer's ICFR is the Internal Control – Integrated Framework (COSO Framework 2013) published by The Committee of Sponsoring Organizations of the Treadway Commission (COSO).
---	---
5.2	ICFR - material weakness relating to design: N/A
---	---
5.3	Limitation on scope of design: N/A
---	---
6.	Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer's ICFR that occurred during the period beginning on April 1, 2021 and ended on June 30, 2021 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR.
---	---

Date: August 11, 2021

“David Feller”

______________________

David Feller

Chief Executive Officer

mogo-ex994_6.htm

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

I, Gregory Feller, Chief Financial Officer of Mogo Inc., certify the following:

1.	Review: I have reviewed the interim financial report and interim MD&A (together, the "Interim filings") of Mogo Inc. (the "issuer") for the interim period ended June 30, 2021.
2.	No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the Interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
---	---
3.	Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
---	---
4.	Responsibility: The issuer's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings, for the issuer.
---	---
5.	Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer's other certifying officer and I have, as at the end of the period covered by the interim filings
---	---
	(a)	designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
---	---	---
	(i)	material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared: and
---	---	---
	(ii)	information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
---	---	---
	(b)	designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer's GAAP.
---	---	---
5.1	Control framework: The control framework the issuer's other certifying officer and I used to design the issuer's ICFR is the Internal Control – Integrated Framework (COSO Framework 2013) published by The Committee of Sponsoring Organizations of the Treadway Commission (COSO).
---	---
5.2	ICFR - material weakness relating to design: N/A
---	---
5.3	Limitation on scope of design: N/A
---	---
6.	Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer's ICFR that occurred during the period beginning on April 1, 2021 and ended on June 30, 2021 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR.
---	---

Date: August 11, 2021

“Gregory Feller”

_______________________

Gregory Feller

Chief Financial Officer