Urbana : Annual Report December 31, 2023

2023

20 23

A N N U A LR E P O R T

Corporate Information

EXECUTIVE OFFICE:

150 King Street West

Suite 1702

Toronto, Ontario

M5H 1J9

Telephone: [phone]

Facsimile: [phone]

TRANSFER AGENT & REGISTRAR:

TSX Trust Company 100 - 300 Adelaide Street West Toronto, Ontario

M5H 4H1

AUDITOR:

Deloitte LLP

Bay Adelaide East

8 Adelaide Street West Suite 200

Toronto, Ontario M5H 0A9

DIRECTORS AND OFFICERS OF THE COMPANY:

Thomas S. Caldwell, C.M. DirectorPresidentToronto, Ontario

Beth Colle Director Toronto, Ontario

George D. Elliott Director Toronto, Ontario

Michael B.C. Gundy Director

Toronto, Ontario

..Director

Toronto, Ontario

Sylvia V. Stinson

Harry K. Liu

General Counsel and Corporate SecretaryUrbana Corporation's Common Shares and Non-Voting Class A Shares are listed for trading on the Toronto Stock Exchange and the Canadian Securities Exchange. Ticker Symbols:

URB (Common Shares)

URB.A (Non-Voting Class A Shares)

Website:www.urbanacorp.com

REPORT TO SHAREHOLDERS

The broader equity markets were relatively choppy throughout the first three quarters of 2023. A few (seven) major technology companies shone during that period, leaving the majority of companies' shares in a sideways trend for much of the year.

Clearly, rising interest rates, inflation concerns, political division and geo-political crises had a muting effect on sentiment.

That all changed in the fourth quarter when the Federal Reserve Board indicated they were near the end of their rate increases. As is said, a rising tide lifts all boats with most major indices rising by double digits in the fourth quarter.

On balance, 2023 ended up being a good year for overall equity markets.

Urbana Corporation's ("Urbana") after tax net assets per share grew by 22.7% (including dividend) from $7.48 to $9.05 in 2023 and 15.0% since inception on October 1, 2002.

Within the publicly traded component of our portfolio, our U.S. Financial Services group provided excellent gains. Our Canadian Energy holdings were a negative drag on our numbers.

Our performance was significantly enhanced by our Private Equity investments, particularly IGPC Ethanol Inc. (division of Integrated Grain Processors Co-operative Inc. ("IGPC")), Blue Ocean Technologies, LLC ("Blue Ocean") and Evolve ETFs.

During the final quarter, we took write-downs on several of our private equity holdings such as, Highview Financial Group, FundThrough Inc., Radar Capital Inc. and Tetra Trust Company.

We view 2024 positively as we can see the potential of IGPC's liquidation initiative and Blue Ocean's increasing overnight market participation.

As Urbana holds approximately 50% of its assets in Securities Exchanges we feel it appropriate to include a portion of the Horizon Kinetics Q3 2023 Market Commentary where they speak of the results of Securities Exchanges. This, we believe will speak to our organization's rationale for these investments.

"For a diverse array of physical assets and financial assets and activities, it is a securities exchange that gives the most asymmetrically positive exposure. Exchanges participate in almost every economic activity that becomes sufficiently large to operate on a national and global scale. They get to participate because business activity on that scale requires the ability to hedge and transact on a wholesale, transparent, and secure basis that only a centralized and regulated marketplace offers.

It is for this reason-as the croupiers for global financial transactions and risk control activity-that exchanges provide unparalleled participation in the overall expansion of trading activity, monetary inflation and even technological innovation. A new technology that wins the lottery-ticket odds necessary to reach critical economic mass will almost necessarily find its way into exchange activity.

Like a royalty company, a securities exchange is a form of croupier, always taking a share of the action without the heavy capital investment, operating risk or financial leverage that its customers take on. The exchange's value is in providing the venue and the associated data services. Which is why their profitability is exceeded only by royalty companies. The difference between the two is simply that exchanges have a higher staffing requirement: for maintaining their computer trade matching and information platforms, and for financial oversight and reporting, which includes constant interaction with regulatory agencies."

Geopolitically, we do hope there is not a widening of the major armed conflicts in the coming year. We do not see increasing interest rates as a great potential threat. This election year will also be a period of extreme rhetoric from all participants. The anticipated volatility should present opportunities.

I think most of us hope for political renewal in both the United States and Canada. Clearly, new management can be a significant help for our broad economy and in all of our lives.

On behalf of the Board of Directors,

Thomas S. Caldwell, C.M.

Chairman, Chief Executive Officer and President

March 18, 2024

Forward-Looking Statements: Certain information contained in this Report constitutes forward-looking information, which is information relating to possible events, conditions or results of operations of Urbana, which are based on assumptions about future economic conditions and courses of action and which are inherently uncertain. All information other than statements of historical fact may be forward-looking information. For important information regarding forward- looking statements, please refer to Urbana's most recently filed MD&A under the heading "Forward-Looking Statements".

URBANA CORPORATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

For the year ended December 31, 2023

This Management's Discussion and Analysis ("MD&A") supplements, but does not form part of, the audited financial statements of Urbana Corporation ("Urbana" or the "Corporation") and notes thereto for the year ended December 31, 2023 (the "Annual Audited Financial Statements"). Consequently, the following discussion and analysis of the financial condition and results of operations should be read in conjunction with the Annual Audited Financial Statements, both of which have been prepared in accordance with International Financial Reporting Standards ("IFRS"). All amounts shown in this MD&A, unless otherwise specified, are presented in Canadian dollars and all references to "millions" within this MD&A will be described as "M" hereafter. Unless specifically referred to a particular class of shares, all references to "Shares" or "per Share" refer collectively to the Corporation's common shares (the "Common Shares") and the Corporation's non-voting Class A shares (the "Class A Shares"). This MD&A is current as of March 18, 2024.The Corporation's Audit Committee reviewed this document, and prior to its release, the Corporation's Board of Directors approved it, based on the Audit Committee's recommendation.

You can obtain information relating to the Corporation, including the Corporation's most recent annual information form and Annual Audited Financial Statements, at no cost, by calling Urbana collect at [phone], by writing to us at: 150 King Street West, Suite 1702, Toronto, Ontario M5H 1J9 or by visiting our website atwww.urbanacorp.com or the SEDAR+ website atwww.sedarplus.ca.

REPORTING REGIME

Urbana is subject to National Instrument 51-102 ("NI 51-102") Continuous Disclosure Obligations. For accounting purposes, Urbana is treated as an investment entity under IFRS.

NON-IFRS MEASURES

The Corporation prepares audited annual financial statements and unaudited condensed interim financial statements in accordance with IFRS. This MD&A complements the Corporation's IFRS results with the following financial measures which are not recognized under IFRS and which do not have a standard meaning prescribed by IFRS: "net assets per Share", "total return of net assets per Share" and "compound annual growth rate of net assets per Share since inception".

Net assets per Share

The three financial measures used to calculate "net assets per Share", namely assets, liabilities and number of shares outstanding, are individually recognized under IFRS, but "net assets per Share" is not. The calculation of net assets per Share as at December 31, 2023 and 2022 is presented in the following table:

December 31, 2023	December 31, 2022
Assets ($)	450,645,044	367,126,050
LESS Liabilities ($)	76,073,772	57,523,862
EQUALS Net Assets ($)	374,571,272	309,602,188
DIVIDED BY Number of Shares Outstanding	41,395,100	41,395,100
EQUALS Net assets per Share ($)	9.05	7.48

Total return of net assets per Share

The total return of net assets per Share over a given period refers to the increase or decrease of Urbana's net assets per Share (determined as described above) over a specified time period, expressed as a percentage of Urbana's net assets per Share at the beginning of the time period, assuming that each dividend paid by the Corporation during the period was reinvested at a price equal to the net assets per Share at the relevant time.

The Common Shares and the Class A Shares participate equally in dividends and upon liquidation, dissolution or winding-up of Urbana. Therefore, they are treated the same for purposes of the net assets per Share calculation.

Compound annual growth rate of net assets per Share since inception

Compound annual growth rate ("CAGR") of net assets per Share since inception is the compound annual growth rate of Urbana's net assets per Share from October 1, 2002, when Caldwell Investment Management Ltd. ("CIM" or the "Manager"), the investment manager of Urbana, started managing Urbana's investment portfolio, to the end of the period in question.

We calculate CAGR of net assets per Share since inception by dividing Urbana's net assets per Share at the end of the period in question by its net assets per Share at inception (i.e. October 1, 2002), raising the result to the power of the quotient obtained by dividing one by the number of years representing the period length, and then subtracting one.

The Corporation provides the non-IFRS measures described above because it believes each measure can provide information that may assist shareholders to better understand the Corporation's performance and to facilitate a comparison of the results of ongoing operations. No measure that is calculated in accordance with IFRS is directly comparable to or provides investors with this net assets per Share information. As a result, except as set forth in the above table, no quantitative reconciliation from "net assets per Share" to an IFRS measure is provided in this MD&A.

Non-IFRS measures should not be construed as alternatives to net comprehensive income (loss) determined in accordance with IFRS as indicators of the Corporation's performance. CAGR of net assets per Share since inception describes the historical rate at which Urbana's net assets per Share would have increased at a steady rate. This single historical rate is only an illustration and does not represent the actual annual growth rate of Urbana's net assets per Share in any given year. The growth rate of Urbana's net assets per Share in any given year since 2002 may have been higher or lower than the CAGR of net assets per Share since inception due to market volatility and other factors.

STRATEGY AND RISK FACTORS

Urbana's strategy is to seek out, and invest in, private investment opportunities for capital appreciation and invest in publicly traded securities to provide growth, income and liquidity. Urbana has the scope to invest in any sector in any geographic region. There were no material changes to Urbana's investment style in 2023 that affected the overall level of risk associated with an investment in the Corporation. Some of the risk factors associated with investing in Urbana are described in Urbana's most recent annual information form, which is available on the Corporation's website atwww.urbanacorp.com and under the Corporation's profile on the SEDAR+ website atwww.sedarplus.ca. Risks and uncertainties that may materially affect Urbana's future performance include private entity investing risk, market fluctuations, currency risk and macroeconomic risk.

OVERALL PERFORMANCE AND DISCUSSION OF OPERATIONS

The first quarter of 2023 ("Q1") performance was mixed for Urbana as its Canadian energy holdings weakened and its U.S. financial holdings gained, in the aftermath of the collapse of Silicon Valley Bank. Urbana's net assets per Share increased from $7.48 to $7.50 in Q1, including a dividend of eleven cents ($0.11) per Share1 paid in January 2023, resulting in a 1.7% total return of net assets per Share.

In the second quarter of 2023 ("Q2") Urbana's total return of net assets per Share declined by 0.7% as its net assets per Share decreased from $7.50 to $7.45. Larger high tech companies led the market and broadly based companies faired poorly despite some strength in broader markets at the end of Q2.

The third quarter of 2023 ("Q3") was very positive for Urbana as its private holdings in Blue Ocean, Integrated Grain Growers Co-operative Inc. ("IGPC") and Evolve ETFs added significant unrealized gains to our portfolio. During this quarter, Urbana's net assets per Share increased from $7.45 to $8.80, resulting in an 18.1% total return of net assets per Share.

The final quarter of 2023 ("Q4") witnessed an improvement in equity markets, which may have been triggered in whole or in part by the Federal Reserve Board indicating they were near the end of their interest rate increases. Urbana's publicly traded holdings outperformed its private investments in Q4 with gains in its U.S. financials more than offsetting declines in its Canadian energy holdings. However, in Q4 several of Urbana's private holdings were written-down. In Q4, Urbana's after-tax net assets per Share increased from $8.80 to $9.05 or 2.8%, which is less than the Dow Jones Industrial Average Total Return Index (in Canadian Dollars) ("DJIA Index") of 10.3% and the S&P/TSX Composite Total Return Index ("S&P/TSX Index") of 8.1%.

By comparison, however, for the year ended December 31, 2023, Urbana's after-tax net assets per Share increased from $7.48 to $9.05 or 22.7%, including a dividend of eleven cents ($0.11) per Share1 paid in January 2023. This return was significantly greater than the DJIA Index of 13.5% and the S&P/TSX Index of 11.8% for the year.

1 The Common Shares and the Class A Shares participate equally in dividends.

On balance, 2023 ended up being a good year for the financial performance of Urbana, driven in part by the overall equity markets.

Looking into 2024, the Corporation is encouraged as it sees the potential of IGPC's liquidity initiative and Blue Ocean's increasing overnight market participation.

Urbana's long-term performance, represented by its CAGR of net assets per Share since inception on October 1, 2002 to December 31, 2023, was 15.0%. This compares favorably with the CAGR of the S&P/TSX Index of 8.9% and the CAGR of the DJIA Index of 9.5%, for the same period.2 The Corporation's long-term goal is to strive for and maintain long-term performance that exceeds the returns of the S&P/TSX Index and the DJIA Index.

In 2023, dividend income amounted to $12.5M, up $8.4M from $4.1M in 2022. The increase in 2023 primarily relates to $7.3M in dividends from IGPC. Distributions from IGPC in 2022 were much lower and represented a return of capital. In 2023, interest income amounted to $490,143, a slight decrease from $503,526 in 2022. The decrease in 2023 is primarily related to the IGPC debenture, which was redeemed early on March 31, 2023.

Urbana realized a net gain of $1.8M from the sale of investments in 2023 (2022 - $8.7M). The 2023 gain stemmed primarily from the disposition of Caldwell Canadian Value Momentum Fund ("CCVMF") ($1.7M). The 2022 gain resulted primarily from the partial dispositions of the Corporation's Canadian energy holdings and CCVMF.

Urbana recorded $75.8M in unrealized gains in 2023 (2022 - $19.2M), with $62.6M of gains related to private equity investments and $13.2M of gains stemming from its public holdings. The best performers during 2023 were Blue Ocean ($42.6M), IGPC ($15.8M), Evolve ETFs ($10.0M), KKR & Co. ($9.3M) and Cboe Global Markets ($7.2M). Partially offsetting these unrealized gains were unrealized losses in Tamarack Valley Energy ($5.6M), Whitecap Resources ($4.7M), Highview Financial Group ($4.1M) and Radar Capital ($3.0M). The 2022 unrealized gain related primarily to private equity investments ($38.6M) with offsetting losses in public holdings ($19.4M).

During 2023, Urbana recorded net income before income taxes of $77.4M (2022 - $21.5M) primarily due to $75.8M in unrealized gains on investments. Investment management fees in 2023 were $8.6M, an $805,000 increase over $7.8M in 2022, due to increased average assets under management. Interest expense in 2023 amounted to $2.7M, up from $1.3M in 2022 due to higher average borrowings and borrowing rates in 2023. Transaction costs, which typically relate to purchases under the normal course issuer bid ("NCIB"), were not incurred in 2023 (2022 - $54,132), since no shares were purchased under the NCIB in 2023. Transaction costs in respect of all trades, excluding NCIB trades, are absorbed by CIM. Professional fees, comprised of audit fees and legal costs, were $296,639 in 2023, up slightly from $290,365 in 2022, primarily due to increased audit fees in 2023. Administrative expenses in 2023 were $1.5M, down from $1.6M in

• 2022 due primarily to reduced marketing expenses in 2023. Foreign withholding tax expense in

• 2023 was $395,235, up from $362,947 in 2022, due to an increase in foreign dividend income in

2 The CAGR of the indexes is calculated in the same way as the CAGR of net assets per Share since inception.

2023. A current income tax recovery in 2023 of $156,500 stems from the carryback of capital losses to recover taxes paid in 2022. A deferred income tax expense of $7.6M has been recorded in 2023, up from $2.0M in 2022, primarily due to increased unrealized gains in 2023.

During 2023 and to-date, Urbana did not purchase any Class A Shares under its NCIB. Since May 2010, Urbana has purchased and cancelled a total of 46,131,220 Class A Shares under its normal course issuer bid programs and has returned $122.1M to shareholders in the form of NCIB purchases and dividends. The number of Class A Shares now outstanding is 31,395,100.

Selected Annual Information

The following table shows selected annual information about Urbana for the three most recently completed fiscal years of the Corporation:

2023 ($)	2022 ($)	2021 ($)
Total revenue	90,513,490	32,520,838	77,398,109
Profit from continuing operations attributable to owners of the parent:
Total	69,522,569	18,917,077	59,994,254
Per Share	1.68	0.45	1.37
Diluted per Share	1.68	0.45	1.37
Profit attributable to owners of the parent:
Total	69,522,569	18,917,077	59,994,254
Per Share	1.68	0.45	1.37
Diluted per Share	1.68	0.45	1.37
Total assets	450,645,044	367,126,050	348,099,367
Total non-current financial liabilities	31,996,000	24,374,000	22,331,000
Cash dividends declared per Share:
Common Shares	0.11	0.10	0.09
Class A Shares	0.11	0.10	0.09

Revenue and profit levels in 2023, 2022 and 2021 were determined primarily by the unrealized and realized gains on the Corporation's investment portfolio. Variations among the years relate to the investment decisions made, market price fluctuations of securities held in Urbana's investment portfolio and changes in foreign exchange rates. There have been no changes in accounting policies during the years 2021 to 2023 that had any impact on the financial performance of the Corporation during these years (see also below under the heading "Changes in Accounting Policies"). There have been no discontinued operations during the years 2021 to 2023. Total assets increased during 2022 and 2023 due to increased market values of the investment portfolio. Non-current financial liabilities, namely deferred income tax liability, increased during 2022 and 2023 as a result of unrealized gains recorded in those years. Dividends amounted to $0.09 per Share in January 2021 and increased to $0.10 per Share in January 2022 due to improved results in 2021. A dividend of $0.11 per Share was paid in January 2023, an increase of 10.0% over 2022, also due to improved results in 2022. In all instances, Common Shares and the Class A Sharesparticipated equally in dividends. For each of the years 2021 to 2023, the financial data has been prepared in accordance with IFRS and the Canadian Dollar has been the presentation currency.

Past Performance

The performance information presented in this section shows how Urbana has performed in the past and does not necessarily indicate how it will perform in the future.

Year-by-Year Performance

The following bar chart shows the net assets per Share performance of Urbana's Shares for the financial periods indicated. The bar chart shows, in percentage terms, how much an investment made on the first day of each financial period would have grown or decreased by the last day of each financial period based on the net assets per Share of Urbana, assuming that each dividend paid during the period was reinvested.

Summary of Investment Portfolio as at December 31, 2023

The following data is extracted from Urbana's Annual Audited Financial Statements:

Number of

% of
Portfolio
securities	Description	Cost ($)	Fair value ($)	Fair Value
Private equity investments
13,490,878	CNSX Markets Inc.	8,228,349	80,945,268	18.2%
1,327,620	Miami International Holdings Inc.	12,257,268	17,943,647	4.0%
800,000	Caldwell Financial Ltd.	1,826,650	3,544,000	0.8%
2,350,000	Radar Capital Inc. Class A Common	50	-	-%
16,755,081	Radar Capital Inc. Class B Common	11,561,006	1,687,237	0.4%
1,544,236	Evolve Funds Group Inc. ("Evolve") Class B
Preferred	1,579,085	6,964,504	1.6%
3,000,000	Evolve Funds Group Inc. Class C Preferred	1,754,350	13,530,000	3.0%
771,638	Evolve Funds Group Inc. Class D Preferred	771,638	771,638	0.2%
1,195,246	EFG Management Holdings Inc. ("EFG") Class A
Common (i)	3,597,690	5,390,559	1.2%
498,041	EFG Management Holdings Inc. Class E Common (i)	1,462,549	2,246,165	0.5%
15,259,886	Highview Financial Holdings Inc.	11,546,243	15,717,682	3.6%
5	Integrated Grain Processors Co-operative Inc.
Membership Shares	500	500	-%
1,972,366	Integrated Grain Processors Co-operative Inc. Class
E Preferred	3,251,961	24,851,812	5.6%
4,538,460	Four Lakes Capital Fund Limited Partnership	4,999,998	8,602,261	1.9%
465,381	Vive Crop Protection Inc. Class A2 Preferred	314,132	186,152	-%
975,337	Vive Crop Protection Inc. Class B1 Preferred	284,613	390,135	0.1%
6