ARHT Media : Managements Discussion & Analysis for three months ended March 31, 2020 and the three months ended March 31, 2019

Management's Discussion & Analysis

for three months ended March 31, 2020

and the three months ended March 31, 2019

ARHT MEDIA INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

For the three months ended March 31, 2020 and the three ended March 31, 2019

General

This discussion and analysis ("MD&A") of financial position and results of operations is prepared as at May 8, 2020 and should be read in conjunction with consolidated financial statements of ARHT Media Inc. (the "Company" or "ARHT Media") for the three months ended December 31, 2019 and the related notes thereto.

Those financial statements have been prepared using accounting policies in compliance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and interpretations of the international Financial Reporting Interpretations Committee ("IFRIC"). Except where otherwise noted, all dollar figures included herein are quoted in Canadian dollars. These documents and other information relevant to the Company's activities are available for viewing on SEDAR at www.sedar.com.

Forward Looking Information

This MD&A includes "forward‐looking statements", within the meaning of applicable securities legislation, which are based on the opinions and estimates of Management and are subject to a variety of risks, uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward‐looking statements. While these forward‐looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions, or other future performance suggested herein. When used in this MD&A, words such as "estimate", "intend", "expect", "anticipate" and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward‐looking statements. These risks, uncertainties and factors may include, but are not limited to: general business, economic, competitive, political, regulatory and social uncertainties, and in particular uncertainties relating to COVID- 19; risks related to factors beyond the control of the Company, including risks related to COVID-19; risks related to the Company's shares, including price volatility due to events that may or may not be within such parties' control, including risks related to COVID-19; the ability to raise capital, disruptions or changes in the credit or securities markets; global economic climate; regulatory risks; the Company's ability to generate positive cash flow; changes in technology; and the emergence of additional competitors in the industry.

Readers are cautioned that the preceding lists of risks, uncertainties, assumptions and other factors are not exhaustive. Events or circumstances could cause actual results to differ materially from those estimated or projected and expressed in or implied by these forward-looking statements. Due to the risks, uncertainties and assumptions inherent in forward‐ looking statements, investors in securities of the Company should not place undue reliance on these forward‐looking statements. The forward‐looking statements contained in this document are made as of the date hereof.

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ARHT MEDIA INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

For the three months ended March 31, 2020 and the three ended March 31, 2019

Description of Business

ARHT Media is the global leader and inventor of leading-edge holographic presence experiences. Our patented technology allows for the capture, transmission and display of the most lifelike digital human holograms, delivered to either an in-person or online audience. These images are capable of being beamed onto virtually any stage in the world and displayed live for two-way interactions with an audience with no noticeable latency. ARHT creates presence by giving the viewer an immersive experience that makes the audience feel as though the speaker is in the room. The Company's technology is protected by U.S. Patent No. 9,581,962.

ARHT Media trades under the symbol "ART" on the Toronto Venture Stock Exchange as a Tier2 Technology Issuer. The Company has three subsidiaries - ARHT Media (USA) Inc., Be There Networks Inc and ARHT Media (UK) Limited. Both Be There Networks Inc. and ARHT Media (UK) Limited were incorporated in Q1 2019, on January 24, 2019 and February 28, 2019, respectively. The Company has offices in Toronto and demonstration studios in Toronto, New York, Los Angeles and London, UK.

In 2016, the Company entered into an agreement with NetDragon Websoft Inc ("NetDragon") to establish a joint venture to operate in select Asia Pacific markets (the "Joint Venture"). ARHT Asia Limited ("ARHT Asia") was incorporated in Hong Kong on September 22, 2016. NetDragon owns and exercises control over 51% of ARHT Asia and the Company owns 49%. The Joint Venture has demonstration studios in Hong Kong and Fuzhou, China. The Joint Venture holds an exclusive license to use ARHT's technology for a period of five years in countries within the Asia Pacific region to be mutually agreed upon with NetDragon.

Outlook and Strategy

Sales & Marketing:

Since the beginning of 2018, the Company has been aggressively marketing its technology offering to a global list of Fortune 500 companies in various business segments including, health care, technology and financial and professional services. In addition, the Company is marketing its technology offering to universities, colleges, high schools museums and science centers. The current sales funnel has never been more robust, across all of these verticals and balanced fairly equally in the Americas, Asia and EMEA.

Business Model:

ARHT's business model consists of a combination of events and network sales. The ultimate goal is to create networks that will utilize ARHT's proprietary software, generating recurring revenues through subscription fees and software upgrade and support services. The business model shift from being primarily event driven to a build out of networked display and capture locations globally will significantly increase the Company's revenues in the long term. Significant revenue growth will provide improved operating leverage that will contribute to EBITDA and net earnings growth. With an increased focus on monetization and cost control, in 2019 the Company's revenue doubled while expenses were flat, further illustrating the operating leverage that exists within the business.

To achieve our growth objectives, the Company will focus on the following distribution channels

• Corporations - The biggest repeatable vertical market for ARHT Media in the past 18 months has been international corporations, primarily in the financial services, pharmaceutical and technology sectors. The uses have varied, including client meetings, sales conferences, doctor training, 5G showcases, press events and more. In Q2 2020 the Company is planning to launch the HoloPod, a self-contained unit for use in smaller spaces including board rooms and training centers and the initial feedback from enterprise clients on design drawings have been very positive.

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ARHT MEDIA INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

For the three months ended March 31, 2020 and the three ended March 31, 2019

• Education - This is a large potential market for ARHT Media's current technology suite. Universities, Colleges, High Schools and other forms of formal education should all have ARHT Media display and capture suites to deliver the best lecturers and educators to students globally. We have also seen interest from the museum and science centre markets, including a permanent capture and display sale in Kiev, Ukraine in Q1, 2020. Holographic technology allows educational institutes to showcase their best professors to the rest of the world. Since the launch of a permanent installation at Imperial College, London, in November 2018 the company has engaged in numerous events and permanent installations at educational institutions globally, including Central China Normal University, Singapore Institute of Technology, University of Hawaii, American Samoa Community College and ITE in Singapore in Q1 of 2020.
• Media and Entertainment - This sector will take longer to roll out but will be a cornerstone of brand building and is expected to lead to significant recurring revenues. The first two activations in this sector were contracted in Q4 2018 for events in Mexico City and Sao Paulo Brazil with Warner Brothers Pictures, featuring Jason Momoa, star of Aquaman. In Q4 2019 the Company hired Hollywood veteran Roger Pollock, former EVP Marketing for Paramount Pictures, Universal Studios, DreamWorks and IMAX as a consultant to develop this vertical segment.
• SEPS - Single Events and Professional Services. With our new display technology and business model we have reduced the entry level price of delivering an event from approximately $80,000 to $25,000. We will continue to execute high-profile Single Events, as they are profitable and a great form of marketing.

Two Major Trends: Reducing Carbon Footprint and Covid-19

Coming into Q1 2020 there was a worldwide focus for corporations, governments and other organizations to find ways to reduce their carbon footprint and contribute to a healthier planet. At the World Economic Forum in Davos, leader after leader spoke of reducing their carbon footprint as one of the most important initiatives within their organization. We applaud these actions as we want a healthier planet as well. A great way to contribute to these goals is by using ARHT Media's platform rather than flying to a meeting, conference or lecture. In fact, in Q4 2019 over 30% of our inbound leads had reducing carbon footprint as either the #1 or #2 reason for contacting us. We believe that this will be a long-term trend and one that will be very good for our business. Who knew it would take a pandemic to prove how much cleaner our air can be if we reduce emissions of all types, but the world has taken notice?

As the pandemic spread from Asia to Europe our enterprise clients began requesting ways to replicate the face to face conference and meeting experience in an online format. Specifically, they were asking for something that was professionally produced to appear different than streaming services such as Zoom, Hangouts, Blue Jeans, Webex, etc. which largely mimicked consumer streaming services such as FaceTime - a bunch of talking heads in boxes. In March we launched Virtual Global Stage (VGS), which allows multiple presenters to interact with one another on the same stage with no latency, appearing much like they would if they were physically next to one another. Presenters can stand or be seated and can appear with 3D graphics, streaming video or PowerPoint to enhance the story telling. With more than 50% of communication being nonverbal its important that the presenters body language comes across the screen, rather than just a talking head. This is how we are used to watching speakers on a digital device. The initial reaction has been positive and in fact in many instances, clients have started planning a hybrid of live presentations using holographic presenters with an online version for those who are not traveling to the event. We are also being told that VGS will have a lifespan well beyond this pandemic as organizations re-evaluate their need to travel.

Having been forced to utilize technology to communicate with their teams and clients, large organizations are realizing efficiencies and cost savings they did not think were possible while still getting the job done. All these trends accrue to our benefit as we work with various stakeholders to help them achieve their goals while keeping their employees safe and contributing to a healthier planet.

However, the Covid-19 pandemic has come at a price to ARHT Media, just like almost every other company. Countless

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ARHT MEDIA INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

For the three months ended March 31, 2020 and the three ended March 31, 2019

meetings and events, where we would be generating revenue or moving clients through the sales cycle on the network side of the business, have either been postponed or cancelled. We entered 2020 with unprecedented momentum, coming off a Q4 which saw revenue increase by 318% year over year. We had budgeted to once again double our revenue in 2020 and moving to profitability by the end of the year and were on course in Q1 to meet or exceed our budget when the delays and cancellations started. The impact was felt in Asia from the end of January, in Europe starting in February and in the Americas from the beginning of March. We expect Q2 will likely be the same for Europe and the Americas, however China is starting to book dates for activations as is Korea and other parts of Asia.

Management took action to reduce costs in early March. A combination of government subsidies, rent concessions from landlords and employees being furloughed for various periods, allowed us to reduce our expenses from $375,000 per month to approximately $75,000 in April and May and $105,000 inJune. With the support of government programs, the majority of our employees are back working from home. We have used this period to produce and updated training programs that will allow the business to scale at a much faster pace in the second half of this year. We have produced content used for sales and marketing activities - including the launch of Virtual Global Stage. We continue to test and develop the HoloPod and we expect to have an operating prototype in Q2 and to deliver units to clients in Q3. Our current sales funnel is the most robust it has been in the last two years from both a quality and quantity perspective and so it is incumbent that the Company is prepared to deliver unprecedented business in the second half of 2020 - and we are ready to do so.

Short-term Priorities:

• Sales - Management's focus will be on sales, especially those that build out networks for recurring revenues in the Health Care, Financial Services, Technology, Education, and Entertainment verticals.
• Third Party Technical Training & Certification Program - The Company has implemented a program to train third party operators on our capture, display and broadcast technology. This is a high priority for the Company as a growing network of third-party technical partners will allow management to reduce delivery costs and meet the growing demand for the execution of events. Recent events in numerous locations globally were delivered by third party technical teams.
• Delivery - Developing systems to enable AV partners to incorporate the Company's technology into their events.
• Strategic Partnerships - The Company is continuing to explore strategic partnerships, including re-seller arrangements, that can significantly increase revenues in markets where it does not have an established presence. The most recent reseller agreement in Israel was installed in Q4, 2019 and the one prior was in Korea in Q3 2019.
• Product Launch - In Q2 2020 the Company is planning to launch the HoloPod, a self-contained mobile solution perfect for a board room, an office or a classroom. Concept drawings shared with potential clients in Q4 2019 were extremely well received. These concept drawings have been updated, product testing has been conducted and the prototype will be delivered in Q2 2020 with deliveries to clients in Q3 2020.
• Breakeven - Successful implementation of these short-term priorities should generate positive cash flow in the fourth quarter of 2020.

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