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

Dated: November 29, 2023

Commission File No.: 000-56191

PARCELPAL LOGISTICS INC.
(Name of Registrant)


422 Richards St., Suite 170, Vancouver, BC V6B 2Z4
(Address of Principal Executive Office)


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):    Yes    ☐    No  ☒

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):    Yes    ☐    No  ☒



EXHIBITS

The following information is furnished to the Securities and Exchange Commission as part of this report on Form 6-K:

Exhibit No.
Document
Interim financial statements report for the third quarter ended September 30, 2023
Interim Management Discussion and Analysis for the third quarter ended September 30, 2023
Form 52-109FV2 Certificate of Interim Filings by CEO (pursuant to Canadian regulations)
Form 52-109FV2 Certificate of Interim Filings by CFO (pursuant to Canadian regulations)
Press Release dated November 30, 2023
   


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.

 
PARCELPAL LOGISTICS INC.
Date: November 29, 2023
By:
/s/ RICH WHEELESS
   
Name:
Rich Wheeless
   
Title:
Chief Executive Officer




Exhibit 99.1

PARCELPAL LOGISTICS INC.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited - expressed in Canadian Dollars)
For the Three and Nine Months Ended September 30, 2023 and 2022


NOTICE OF NO AUDITOR REVIEW OF

CONDENSED INTERIM FINANCIAL STATEMENTS

Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.

The accompanying unaudited condensed interim financial statements have been prepared by and are the responsibility of the management.

The Company's independent auditor has not performed a review of these financial statements in accordance with the standards established by the Chartered Professional Accountants of Canada for a review of condensed interim financial statements by an entity's auditor.


ParcelPal Logistics Inc.
Condensed Interim Consolidated Statements of Financial Position
(Unaudited - expressed in Canadian Dollars)

   
Notes
   
September 30,
2023
$
   
December 31,
2022
$
 
                   
ASSETS
                 
Current assets
                 
Cash
         
282,234
     
76,661
 
Accounts receivable
         
94,767
     
237,506
 
Prepaid expenses
         
59,666
     
31,858
 
           
436,667
     
346,025
 
                       
Customer contract
   
3,5
     
2,953,890
     
3,707,137
 
Vehicles and Right-of-use assets
   
4
     
408,662
     
507,669
 
                         
Total assets
           
3,799,219
     
4,560,831
 
                         
LIABILITIES AND SHAREHOLDERS’ EQUITY
                       
Current liabilities
                       
Accounts payable and accrued liabilities
   
8
     
2,276,566
     
2,027,939
 
Purchase obligation
   
3
     
1,445,829
     
1,616,704
 
Convertible Note
   
12
     
1,499,741
     
1,536,139
 
Sales tax payable
           
619,231
     
682,200
 
Short-term loan payable
   
6
     
213,706
     
396,201
 
Lease obligations – current
   
11
     
-
     
58,012
 
             
6,055,073
     
6,317,195
 
                         
Lease obligations
   
11
     
-
     
10,320
 
                         
Total liabilities
           
6,055,073
     
6,327,515
 
                         
SHAREHOLDERS’ (DEFICIT) EQUITY
                       
Share capital
   
7
     
19,686,811
     
18,928,057
 
Contributed surplus
           
3,713,683
     
3,664,546
 
Accumulated other comprehensive income
           
82,303
     
197,980
 
Deficit
           
(25,738,651
)
   
(24,557,267
)
Total shareholders’ (deficit) equity
           
(2,255,651
)
   
(1,766,684
)
                         
Total liabilities and shareholders’ (deficit) equity
           
3,799,219
     
4,560,831
 

Nature of operations and going concern (Note 1)
Commitments (Note 12)
Subsequent events (Note 14)

Approved on behalf of the Board of Directors on November 29, 2023

/s/ Rich Wheeless
/s/ Robert Faissal
Rich Wheeless
Robert Faissal
Director
Director

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

3

ParcelPal Logistics Inc.
Condensed Interim Consolidated Statements of Loss and Comprehensive Loss
For the Three and Nine Months Ended September 30, 2023 and 2022
(Unaudited - expressed in Canadian Dollars)

       
Three months ended
September 30
   
Nine months ended
September 30
 
   
Notes
 
2023
$
   
2022
$
   
2023
$
   
2022
$
 
                             
SALES
       
3,644,712
     
2,620,506
     
9,529,540
     
7,799,842
 
                                     
COST OF SALES
 
13
   
(2,202,241
)
   
(2,307,031
)
   
(6,944,289
)
   
(6,486,863
)
                                     
GROSS PROFIT
       
1,442,471
     
313,475
     
2,585,251
     
1,312,979
 
                                     
EXPENSES
                                   
Amortization of intangible assets
 
5
   
249,722
     
242,992
     
743,198
     
874,111
 
Consulting fees
       
66,539
     
40,624
     
173,939
     
248,087
 
Foreign exchange
       
70,087
     
134,085
     
(10,768
)
   
194,568
 
Marketing and promotion
       
149,107
     
49,705
     
212,265
     
174,141
 
Management and director fees
 
8
   
160,571
     
129,596
     
536,924
     
578,292
 
Office and miscellaneous
       
921,822
     
334,485
     
1,316,699
     
1,106,855
 
Professional fees
       
94,162
     
195,130
     
339,007
     
344,923
 
Regulatory and filing fees
       
40,483
     
53,355
     
160,676
     
98,988
 
Salaries
 
8
   
222,540
     
194,989
     
878,106
     
846,275
 
Share-based compensation
 
7
   
-
     
-
     
39,544
     
44,246
 
Travel and accommodation
       
94,071
     
33,634
     
144,295
     
129,677
 
         
(2,069,104
)
   
(1,408,595
)
   
(4,533,885
)
   
(4,640,163
)
                                     
Loss before other items
       
(626,633
)
   
(1,095,120
)
   
(1,948,634
)
   
(3,327,184
)
                                     
Other expenses:
                                   
Other income
 
13
   
571,575
     
-
     
908,500
     
-
 
Debt Settlement
 
7
   
-
     
-
     
-
     
273,247
 
Derivative liability
 
12
   
-
     
-
     
-
     
206,726
 
Interest expense
 
11,12
   
(48,627
)
   
(97,469
)
   
(141,250
)
   
(410,142
)
Gain on disposal of asset
 
4
   
-
             
-
     
266,901
 
         
522,948
     
(97,469
)
   
767,250
     
336,732
 
                                     
Net loss for the period
       
(103,685
)
   
(1,192,589
)
   
(1,181,384
)
   
(2,990,452
)
                                     
Foreign currency translation adjustment
       
(95,663
)
   
386,535
     
(115,677
)
   
273,139
 
                                     
Comprehensive loss for the period
       
(199,348
)
   
(806,054
)
   
(1,297,061
)
   
(2,717,313
)
                                     
Basic and diluted loss per share
       
(0.00
)
   
(0.01
)
   
(0.01
)
   
(0.02
)
                                     
Weighted average number of shares outstanding – basic and diluted
       
231,391,865
     
195,874,591
     
221,700,844
     
179,875,903
 
                                     

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

4

ParcelPal Logistics Inc.
Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity
For the Three and Nine Months Ended September 30, 2023 and 2022
(Unaudited - expressed in Canadian Dollars)

   
Number of
shares
   
Amount
$
   
Contributed
Surplus
$
   
Deficit
$
   
AOCI
$
   
Total
$
 
                                     
Balance, December 31, 2021
   
156,338,733
     
17,622,777
     
3,620,300
     
(21,031,270
)
   
(4,202
)
   
207,605
 
                                                 
Shares issued pursuant to:
                                               
Convertible note
   
25,312,500
     
1,000,813
     
-
     
-
     
-
     
1,000,813
 
In lieu of consulting fees
   
1,250,000
     
35,000
     
-
     
-
     
-
     
35,000
 
Acquisition of customer contract
   
13,473,358
     
269,467
     
-
     
-
     
-
     
269,467
 
Share-based compensation
   
-
     
-
     
44,246
     
-
     
-
     
44,246
 
Net and comprehensive loss for the period
   
-
     
-
     
-
     
(2,990,452
)
   
273,139
     
(2,717,313
)
                                                 
Balance, September 30, 2022
   
196,374,591
     
18,928,057
     
3,664,546
     
(24,021,722
)
   
268,937
     
(1,160,182
)
                                                 
Balance, December 31, 2022
   
196,374,591
     
18,928,057
     
3,664,546
     
(24,557,267
)
   
197,980
     
(1,766,684
)
                                                 
Shares issued pursuant to:
                                               
Private placement
   
25,218,144
     
406,000
     
-
     
-
     
-
     
406,000
 
Issue costs
   
-
     
(9,853
)
   
-
     
-
     
-
     
(9,853
)
Broker warrants
   
-
     
(9,593
)
   
9,593
     
-
     
-
     
-
 
Bonus shares
   
6,500,000
     
227,500
     
-
     
-
     
-
     
227,500
 
Consulting shares
   
5,060,000
     
144,700
     
-
     
-
     
-
     
144,700
 
Share-based compensation
   
-
     
-
     
39,544
     
-
     
-
     
39,544
 
Net and comprehensive loss for the period
   
-
     
-
     
-
     
(1,181,384
)
   
(115,677
)
   
(1,297,061
)
                                                 
Balance, September 30, 2023
   
233,152,735
     
19,686,811
     
3,713,683
     
(25,738,651
)
   
82,303
     
(2,255,854
)

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

5

ParcelPal Logistics Inc.
Condensed Interim Consolidated Statements of Cash Flows
For the Three and Nine Months Ended September 30, 2023 and 2022
(Unaudited - expressed in Canadian Dollars)

   
2023
$
   
2022
$
 
Operating activities
           
Loss for the period
   
(1,181,384
)
   
(2,990,452
)
Add non-cash items:
               
Amortization
   
782,564
     
1,017,376
 
Share-based compensation
   
39,544
     
44,246
 
Accrued interest
   
-
     
322,935
 
Shares issued in lieu of fees
   
372,200
     
35,000
 
(Gain) / Loss on debt settlement
   
-
     
(273,247
)
Unrealized foreign exchange loss (gain)
   
(36,398
)
   
145,035
 
Fair value of derivative
   
-
     
(206,726
)
Gain on disposal of asset
   
-
     
(266,901
)
Changes in non-cash working capital items
               
Sales tax payable
   
(62,969
)
   
148,237
 
Prepaid expenses
   
(27,808
)
   
111,728
 
Accounts receivable
   
142,739
     
(51,000
)
Accounts payable and accrued liabilities
   
248,627
     
798,622
 
Net cash flows provided (used) in operating activities
   
277,115
     
(1,165,147
)
                 
Investing activities
               
Acquisition of Web-to-door
   
(165,861
)
   
-
 
Sale of vehicles
   
-
     
410,500
 
Purchase of vehicles
   
-
     
(37,150
)
Net cash flows provided (used) by investing activity
   
(165,861
)
   
373,350
 
                 
Financing activities
               
Private placement
   
406,000
     
-
 
Issue costs
   
(9,853
)
   
-
 
Loan repayments
   
(197,072
)
   
(75,389
)
Loan proceeds
   
-
     
548,280
 
Lease payments
   
(5,184
)
   
(159,734
)
Net cash flows provided (used) by financing activities
   
193,891
     
313,157
 
                 
Foreign exchange on cash
   
(99,572
)
   
(27,254
)
Change in cash during the period
   
205,573
     
(505,894
)
Cash – beginning of the period
   
76,661
     
551,961
 
Cash – end of the period
   
282,234
     
46,067
 
Supplemental cash flow information:
Income taxes paid
           
-
 
Interest paid
           
23,231
 

The accompanying notes are an integral part of these condensed interim consolidated financial statements.
6

ParcelPal Logistics Inc.
Notes to the Condensed Interim Consolidated Financial Statements
For the Three and Nine Months Ended September 30, 2023 and 2022
(Unaudited - expressed in Canadian Dollars)
1.
NATURE OF OPERATIONS AND GOING CONCERN

ParcelPal Logistics Inc.  (“the Company” or “ParcelPal”) is a Vancouver, British Columbia based company that specializes in last-mile delivery service and logistics solutions, providing businesses with a smart, reliable and affordable delivery service powered by the Company’s licensed technology platform.  The Company was incorporated in Alberta on March 10, 1997.  On June 22, 2006, the Company moved its incorporation jurisdiction to British Columbia.  The Company’s shares are listed on the Canadian Securities Exchange (“CSE”) under the symbol “PKG”, on the OTCQB (over-the-counter) Market in the United States under the symbol PTNYF and on the Frankfurt Stock Exchange under the symbol “PT0A”.

These condensed interim consolidated financial statements have been prepared under the assumption that the Company will continue as a going concern.  The going concern basis of presentation assumes that the Company will be able to meet its obligations and continue its operations for the foreseeable future and be able to realize its assets and discharge its liabilities and commitments in the normal course of business.  Realization values may be substantially different from the carrying values as shown, and these condensed interim consolidated financial statements do not give effect to adjustments that would be necessary to the carrying values and classifications of assets and liabilities should the Company be unable to continue as a going concern.

The Company has incurred losses and negative operating cash flows since its inception. The Company will require further financing to meet its financial obligations and sustain its operations in the normal course of the business.  These factors indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern. The Company’s ability to meet its long-term business strategy depends on its ability to obtain additional equity financing and to generate operational cash flow from delivery services revenue.

2.
BASIS OF PRESENTATION

These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by International Accounting Standards Board (“IASB”) applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting. The condensed consolidated interim financial statements should be read in conjunction with the annual financial statements for the year ended December 31, 2022, which have been prepared in accordance with IFRS as issued by IASB.

The Company uses the same accounting policies and methods of computation as in financial statements for the year ended December 31, 2022, with the exception of the following:

Basis of Consolidation
The condensed interim financial statements include the financial statements of the Company and its 95% owned subsidiary Web-to-door Trucking Corp. (“Trucking”) (2022 – 95%) and its 100% owned subsidiary ParcelPal Logistics USA, Inc. (2022 – 100%)

Use of estimates and judgements
The Company’s significant estimates and judgments are as per the audited financial statements ended December 31, 2022.

These condensed interim consolidated financial statements were approved by the board of directors for use on November 29, 2023.

7

ParcelPal Logistics Inc.
Notes to the Condensed Interim Consolidated Financial Statements
For the Three and Nine Months Ended September 30, 2023 and 2022
(Unaudited - expressed in Canadian Dollars)

3.
ASSET ACQUISITION

On June 1, 2022, the Company entered into an asset purchase agreement (the “Asset Acquisition”) with Delta Express Delivery, Inc. (“Delta”) whereby the Company, through ParcelPal USA, acquired a customer contract between Delta and FedEx Ground Package System, Inc. (“FedEx”) (the “FedEx Contract”) making ParcelPal USA an independent service provider for FedEx. In addition to the FedEx Contract, the Company also acquired 12 delivery vehicles from Delta. The acquisition of the FedEx Contract and the vehicles was treated as an asset acquisition. The Company issued 13,473,358 common shares, fair valued at $269,467 (US $209,107) and will make two payments of US $336,834 by November 1, 2022, as at December 31, 2022 the amount was still outstanding.  The allocation of the purchase price is as follows:

Purchase price consideration
 

$
 
Consideration – cash
   
868,129
 
Consideration – shares
   
269,467
 
Fair value of consideration
   
1,137,596
 
         
Vehicles
   
452,343
 
Customer contract
   
685,253
 
Total net assets acquired
   
1,137,596
 

On completion of the Asset Acquisition the Company, through ParcelPal USA, began generating revenue from the FedEx Contract and as at December 31, 2022 the Company had generated $1,141,965 in revenue from the FedEx Contract.

As at September 30, 2023, the Company’s purchase obligation outstanding is $910,766 (2022 - $912,416). Also included in purchase obligation is $535,063 (2022 - $704,288) due for the acquisition of Trucking.

8

ParcelPal Logistics Inc.
Notes to the Condensed Interim Consolidated Financial Statements
For the Three and Nine Months Ended September 30, 2023 and 2022
(Unaudited - expressed in Canadian Dollars)
4.
VEHICLES AND RIGHT-OF-USE ASSETS

Right-of-use assets consists of leased vehicles and a leased warehouse carried at cost less accumulated depreciation. The Company’s vehicles as at September 30, 2023 and December 31, 2022 are as follows:
   
Vehicles
$
   
ROU Assets
$
   
Total
$
 
Cost
                 
Balance, December 31, 2021
   
198,745
     
839,699
     
1,038,444
 
Additions
   
452,323
     
-
     
452,323
 
Disposal
   
(198,745
)
   
(633,671
)
   
(832,416
)
Foreign exchange
   
23,097
     
-
     
23,097
 
Balance, December 31, 2022
   
475,420
     
206,028
     
681,448
 
Disposal
   
-
     
(206,028
)
   
(206,028
)
Foreign exchange
   
(842
)
   
-
     
(842
)
Balance, September 30, 2023
   
474,578
     
-
     
474,578
 
                         
Accumulated amortization
                       
Balance, December 31, 2021
   
93,217
     
292,874
     
386,091
 
Amortization
   
25,817
     
158,253
     
184,070
 
Disposal
   
(93,217
)
   
(303,759
)
   
(396,976
)
Foreign exchange
   
594
     
-
     
594
 
Balance, December 31, 2022
   
26,411
     
147,368
     
173,779
 
Amortization
   
39,366
     
-
     
39,366
 
Disposal
   
-
     
(147,368
)
   
(147,368
)
Foreign exchange
   
139
     
-
     
139
 
Balance, September 30, 2023
   
65,915
     
-
     
65,915
 
                         
Balance, December 31, 2021
   
105,528
     
546,825
     
652,353
 
Balance, December 31, 2022
   
449,009
     
58,660
     
507,669
 
Balance, September 30, 2023
   
408,662
     
-
     
408,662
 

During the three and nine months ended September 30, 2023, the Company included $13,083 (2022 - $47,335) and $39,366 (2022- $143,265) of amortization in cost of sales.

During the nine months ended September 30, 2022, the Company purchased 14 previously leased vehicles for $37,150. The Company also sold 33 vehicles for gross proceeds of $410,000. The vehicles had a net book value of $128,313 and the Company recorded a gain on sale of $266,901. The Company also wrote off 4 vehicles which were valued at $14,786.

9

ParcelPal Logistics Inc.
Notes to the Condensed Interim Consolidated Financial Statements
For the Three and Nine Months Ended September 30, 2023 and 2022
(Unaudited - expressed in Canadian Dollars)
5.
CUSTOMER CONTRACTS

Upon completion of the acquisition of Trucking and the Asset Acquisition, the Company acquired customer contracts. The customer contracts are amortized using the straight-line method over the useful life of 5 years.

The change in customer contract during the period ended September 30, 2023, is as follows:

   
$

         
Balance, December 31, 2020
   
-
 
Additions
   
3,901,442
 
Foreign exchange
   
31,686
 
Balance, December 31, 2021
   
3,933,128
 
Additions
   
685,253
 
Amortization
   
(1,126,818
)
Foreign exchange
   
215,573
 
Balance, December 31, 2022
   
3,707,137
 
Amortization
   
(743,198
)
Foreign exchange
   
(10,049
)
Balance, September 30, 2023
   
2,953,890
 

6.
LOAN PAYABLE

On July 25, 2022, the Company received a short-term loan for US$400,000 due on May 25, 2023. Per the terms of the loan the Company is required to make 40 payments of US$14,200 to settle the debt. As part of the loan agreement the Company paid a US$8,000 processing fee and US$24,000 finders’ fee, as the loan is short term in nature the fair value of the loan was determined to match the book value of the loan. The processing fee and finders’ fee were recorded as interest expense.

On October 4, 2022, the Company received an additional short-term loan for US$100,000 due on August 4, 2023. Per the terms of the loan the Company is required to make 40 payments of US$3,550 to settle the debt. As part of the loan agreement the Company paid a US$4,298 processing fee which was recorded as interest expense. As the loan is short term in nature the fair value of the loan was determined to match the book value of the loan.

10

ParcelPal Logistics Inc.
Notes to the Condensed Interim Consolidated Financial Statements
For the Three and Nine Months Ended September 30, 2023 and 2022
(Unaudited - expressed in Canadian Dollars)
A schedule of the changes in the loans is as follows:

   

$

Balance, December 31, 2021
   
-
 
Additions
   
677,200
 
Interest
   
105,706
 
Payments
   
(357,323
)
Foreign exchange
   
(29,382
)
Balance, December 31, 2022
   
396,201
 
Interest
   
111,532
 
Payments
   
(308,604
)
Foreign exchange
   
14,577
 
Balance, September 30, 2023
   
213,706
 

7.
SHARE CAPITAL

Common Shares

Authorized:
The authorized capital of the Company consists of an unlimited number of common shares without par value.

Issued:

During the nine months ended September 30, 2023:

 
a)
On March 14, 2023, the Company issued 20,944,640 units, consisting of one common share of the Company and one share purchase warrants, at a price of $0.017 per Unit for gross proceeds of $356,000. The Company also issued 4,273,503 units consisting of one common share of the Company and one-half share purchase warrant, at a price of $0.012 for gross proceeds of $50,000. The warrants expire on March 14, 2025 and are exercisable at $0.05 per warrant. The warrants were fair valued at $nil. The Company incurred cash issue costs of $18,593 and issued 579,600 broker warrants on the same terms as the warrants contained in the units. The broker warrants were fair valued at $9,593 using the Black-Scholes Option Pricing Model using the following assumptions: Risk free rate – 3.5%, expected volatility – 128%, expected forfeiture rate – nil, expected dividends – nil, expected life – 2 years.
 
b)
On March 16, 2023, the Company issued 1,800,000 common shares, valued at $63,000, for advertising and promotion expense.
 
c)
On March 22, 2023, the Company issued 6,500,000 bonus shares to the officers and directors of the Company. The shares were fair valued at $227,5000.
 
d)
On April 6, 2023, the Company issued 1,100,000 common shares to a consultant in lieu of cash, the shares were valued at $38,500.
 
e)
On September 14, 2023, the Company issued 2,160,000 common shares to a consultant in lieu of cash, the shares were valued at $43,200.

11

ParcelPal Logistics Inc.
Notes to the Condensed Interim Consolidated Financial Statements
For the Three and Nine Months Ended September 30, 2023 and 2022
(Unaudited - expressed in Canadian Dollars)
During the year ended December 31, 2022:

 
a)
On January 1, 2022, the Company issued 2,500,000 common shares pursuant to the settlement of US$100,000 convertible debt, the shares were fair valued at $125,000.
 
b)
On January 20, 2022, the Company issued 5,000,000 common shares pursuant to the settlement of US$200,000 convertible debt, the shares were fair valued at $250,000.
 
c)
On February 15, 2022, the Company issued 7,625,000 common shares pursuant to the settlement of US$305,000 convertible debt, the shares were fair valued at $343,125.
 
d)
On May 4, 2022, the Company issued 337,500 common shares pursuant to the settlement of US$13,500 convertible debt, the shares were fair valued at $11,813.
 
e)
On May 9, 2022, the Company issued 9,850,000 common shares pursuant to the settlement of US$394,000 convertible debt, the shares were fair valued at $270,875.
 
f)
On May 13, 2022, the Company issued 1,000,000 common shares in lieu of consulting fees, the shares were fair valued at $30,000.
 
g)
On June 30, 2022, the Company issued 250,000 common shares in lieu of consulting fees, the shares were fair valued at $5,000.
 
h)
On June 30, 2022, the Company issued 13,473,358 common shares pursuant to the Asset Acquisition, the shares were fair valued at $269,467.

Stock Options

The Company has adopted an incentive stock option plan, which enables the Board of Directors of the Company from time to time, at its discretion, and in accordance with the CSE requirements to, grant to directors, officers, employees and consultants to the Company, non-transferable stock options to purchase common shares, provided that the number of common shares reserved for issuance will not exceed 20% of the Company’s issued and outstanding common shares. Each stock option permits the holder to purchase one share at the stated exercise price. The options vest at the discretion of the Board of Directors.

The following is a summary of the Company’s stock option activity:
   
Number of
Options
#
   
Weighted Average
Exercise Price
$
 
             
Balance, December 31, 2021
   
11,175,000
     
0.15
 
Granted
   
1,500,000
     
0.05
 
Expired
   
(700,000
)
   
0.18
 
                 
Balance, December 31, 2022
   
11,975,000
     
0.13
 
Granted
   
1,250,000
     
0.05
 
Forfeited
   
(5,350,000
)
   
0.13
 
Expired
   
(1,450,000
)
   
0.26
 
                 
Balance, September 30, 2023
   
6,425,000
     
0.11
 

On April 6, 2023, the Company granted 1,250,000 options to a consultant of the Company, the options vested immediately and expire on April 6, 2028. The options were fair valued at $39,544 using the Black-Scholes Option Pricing Model using the following assumptions: risk free rate – 3.73%; forfeiture rate – nil; expected volatility – 152.17%; dividend rate – nil; expected life – 5 years.

12

ParcelPal Logistics Inc.
Notes to the Condensed Interim Consolidated Financial Statements
For the Three and Nine Months Ended September 30, 2023 and 2022
(Unaudited - expressed in Canadian Dollars)
As at September 30, 2023 the following options were outstanding and exercisable:

Expiry
Date
 
Exercise price
$
   
Remaining
life (years)
   
Options
outstanding
 
November 22, 2023
   
0.26
     
0.15
     
100,000
 
May 2, 2024
   
0.27
     
0.59
     
150,000
 
May 17, 2024
   
0.245
     
0.66
     
200,000
 
June 17, 2024
   
0.245
     
0.72
     
300,000
 
May 6, 2025
   
0.09
     
1.60
     
1,675,000
 
July 22, 2025
   
0.09
     
1.81
     
100,000
 
November 12, 2025
   
0.075
     
2.12
     
1,300,000
 
January 22, 2026
   
0.145
     
2.32
     
1,250,000
 
June 2, 2026
   
0.12
     
2.67
     
200,000
 
April 6, 2028
   
0.05
     
4.52
     
1,250,000
 
                     
6,425,000
 

Warrants

The following is a summary of the Company’s warrant activity:

   
Number of
Options
#
   
Weighted Average
Exercise Price
$
 
             
Balance, December 31, 2022
   
-
     
-
 
Issued
   
23,660,992
     
0.05
 
                 
Balance, September 30, 2023
   
23,660,992
     
0.05
 

As at September 30, 2023, 23,660,992 warrants are outstanding and they expire on March 14, 2025.

8.
 RELATED PARTY TRANSACTIONS

Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of members of the Company's Board of Directors and corporate officers. The remuneration of directors and key management personnel is as follows:

   
Three months ended September
30,
   
Nine months ended September
30,
 
   
2023
$
   
2022
$
   
2023
$
   
2022
$
 
Management fees
   
160,571
     
129,596
     
484,424
     
578,291
 
Salaries and wages
   
-
     
18,750
     
37,500
     
56,250
 
     
160,571
     
148,346
     
521,924
     
634,541
 

Included in accounts payable as at September 30, 2023, is $744,740 (December 31, 2022 - $576,942) owing to related parties. These amounts are non-interest bearing, unsecured and due on demand.

13

ParcelPal Logistics Inc.
Notes to the Condensed Interim Consolidated Financial Statements
For the Three and Nine Months Ended September 30, 2023 and 2022
(Unaudited - expressed in Canadian Dollars)
9.
 SEGMENTED INFORMATION

As at September 30, 2023 the Company had one reportable segment, being last-mile delivery service and logistics solutions, and had operations in two geographical areas: Canada and the USA.

Geographic Segments

   
Three months ended September 30,
   
Nine months ended September 30,
 
   
2023
   
2022
   
2023
   
2022
 
   

$
 

$
   

$
   

$
 
Net gain (loss)
                               
Canada
   
(508,398
)
   
(707,697
)
   
(1,986,593
)
   
(1,831,329
)
USA
   
404,713
     
(484,892
)
   
805,209
     
(1,159,123
)
     
(103,685
)
   
(1,192,589
)
   
(1,181,384
)
   
(2,990,452
)

   
September 30, 2023
   
December 31, 2022
 
   

$
   

$
 
Assets
               
Canada
   
386,760
     
291,183
 
USA
   
3,412,459
     
4,269,648
 
     
3,799,219
     
4,560,831
 

10.
 FINANCIAL INSTRUMENTS

Classification of financial instruments
The Company’s financial instruments consist of cash, accounts receivable, loans receivable, accounts payable and accrued liabilities and lease obligations. The Company classifies cash, accounts receivable and loans receivable as financial assets at amortized cost. Accounts payable and lease obligations are classified as financial liabilities at amortized cost.

The Company examines the various financial instruments and risks to which it is exposed and assesses the impact and likelihood of those risks. These risks include foreign currency risk, interest rate risk, credit risk and liquidity risk. When material, these risks are reviewed and monitored by the Board of Directors.

There have been no changes in any risk management policies during the period ended September 30, 2023.

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

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

14

ParcelPal Logistics Inc.
Notes to the Condensed Interim Consolidated Financial Statements
For the Three and Nine Months Ended September 30, 2023 and 2022
(Unaudited - expressed in Canadian Dollars)
The carrying value of the Company’s financial assets and liabilities measured at amortized cost approximate their fair value due to their short term to maturity.

The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board of Directors approves and monitors the risk management processes, inclusive of documented investment policies, counterparty limits, and controlling and reporting structures.

The type of risk exposure and the way in which such exposure is managed is provided as follows:

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

Interest risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to limited interest rate risk.

Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its obligations as they fall due. The Company’s ability to continue as a going concern is dependent on management’s ability to raise the required capital through future equity or debt issuances. The Company manages its liquidity risk by forecasting cash flows from operations and anticipating any investing and financing activities. Management and the directors are actively involved in the review, planning, and approval of significant expenditures and commitments. In December 2020, the Company entered into an agreement pursuant to which it received access to a US $5,000,000 equity line of credit for a period of three years. As at September 30, 2023, the Company has not accessed the equity line of credit.

Foreign exchange risk
The Company’s functional currency is the Canadian Dollar and major transactions are transacted in Canadian Dollars and US Dollars. The Company maintains a US Dollar bank account in Canada to support the cash needs of its operations. Management believes that the foreign exchange risk related to currency conversion is minimal and therefore does not hedge its foreign exchange risk.

Capital Management
The Company defines capital that it manages as its shareholders’ equity. When managing capital, the Company’s objective is to ensure the entity continues as a going concern as well as to maintain optimal returns to shareholders and benefits for other stakeholders. The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company, in order to support the development of a social collaborative charting, news and communication platform for traders. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future development of the business.

Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. There were no changes to the Company’s approach to capital management during the period ended September 30, 2023.

15

ParcelPal Logistics Inc.
Notes to the Condensed Interim Consolidated Financial Statements
For the Three and Nine Months Ended September 30, 2023 and 2022
(Unaudited - expressed in Canadian Dollars)
11.
LEASE OBLIGATIONS

The Company’s lease obligations at September 30, 2023 and December 31, 2022 and the changes for the periods then ended are as follows:

   

$
 
Balance, December 31, 2021
   
563,330
 
Interest expense
   
40,792
 
Lease termination
   
(342,936
)
Payments
   
(192,854
)
Balance, December 31, 2022
   
68,332
 
Payments
   
(5,182
)
Lease termination
   
(63,150
)
Balance, September 30, 2023
   
-
 

During the period ended September 30, 2023, the Company terminated its vehicle leases.

12.
CONVERTIBLE PROMISSORY NOTE

During the year ended December 31, 2021, and 2020, the Company entered into multiple US dollar denominated convertible note agreements, with each convertible note containing a guaranteed interest rate between 5% and 10%, a 5% original issue discount on the principal of the convertible note, incentive common shares of the Company and the right to convert at a fixed price of US $0.06 to US $0.08 per share. As the convertible note and embedded conversion feature are denominated in US dollars and the Company has a Canadian dollar functional currency, they are within the scope of IAS 32 – Financial Instruments: Presentation, the value of the conversion feature is subject to changes in value based on the prevailing market price, resulting in a derivative liability. On initial recognition, the Company used the residual value method to allocate the principal amount of the convertible note between the derivative liability and host debt components. The derivative liability was valued first using the Black Scholes option pricing model and the residual was allocated to the host debt component. As the fair value of the debt, when discounted using the Company’s discount rate of 11.31% was greater than the total consideration received, the incentive shares were allocated a value of $nil.

The convertible notes issued are as follows:

On April 13, 2021, the Company issued a convertible note for US$341,250 (CAD - $427,873) with a guaranteed interest rate of 5% and an original issue discount of US$16,250. The note matures on October 10, 2021 and can be converted into common shares of the Company at a conversion price of US$0.13 per common share. The conversion option was fair valued at $10,817 and the loan was valued at $396,681. The loan is amortized to maturity using an effective interest rate of 4.88%. On December 7, 2021 and December 29, 2021, the Company issued 417,196 and 2,500,000 common shares to settle US $116,500 of the loan, the shares were fair valued at $31,290 and $137,500 respectively. During the year ended December 31, 2022, the derivative was revalued at $nil and a gain on fair value of derivative liability of $66,928 was recorded. The remainder of the convertible note was settled pursuant to the issuance of 6,045,325 common shares fair valued at $302,500. The Company recorded a gain on settlement of $19,005.

16

ParcelPal Logistics Inc.
Notes to the Condensed Interim Consolidated Financial Statements
For the Three and Nine Months Ended September 30, 2023 and 2022
(Unaudited - expressed in Canadian Dollars)
On May 27, 2021, the Company issued a convertible note for US$341,250 (CAD - $412,479) with a guaranteed interest rate of 5% and an original issue discount of US$16,250. The note matured on November 23, 2021 and can be converted into common shares of the Company at a conversion price of US$0.13 per common share. The conversion option was fair valued at $18,356 and the loan was valued at $374,481. The loan is amortized to maturity using an effective interest rate of 5.98%. During the year ended December 31, 2022, the derivative was fair valued at $nil and the Company recorded a gain on derivative liability of $94,980. The remainder of the convertible note was settled pursuant to the issuance of 8,957,800 common shares fair valued at $408,763, the Company recorded a gain on debt settlement of $47,503.

On closing of the Trucking acquisition, the Company issued a convertible note with face value of up to US$2,300,000 receivable in four tranches. Each of the first three funded tranches will carry a 5% Original Issue Discount (or “OID”). As consideration of the convertible note, the Company shall issue 500,000 common shares to the noteholder for each of the first three funded tranches. As at September 30, 2023, the first tranche of US $735,000 and the second tranche of US $672,000 had been funded and 1,000,000 common shares were issued to the noteholder, valued at $nil.

The first tranche had a guaranteed interest rate of 8% and an original issue discount for US $35,000. The note matured on March 14, 2022, and can be converted into common shares of the Company at a conversion price of US $0.09 per common share. The conversion option was fair valued at $110,301 and the loan was fair valued at $776,844. The loan is amortized to maturity using an effective interest rate of 20.087%. During the year ended December 31, 2022, the Company fair valued the derivative liability at $nil and recorded a gain on fair value of derivative liability of $11,534. The Company settled $456,265 of the loan pursuant to the issuance of 10,309,375 common shares fair valued at $289,550 and recorded a gain on debt settlement of $206,740. As at September 30, 2023, the outstanding balance of the convertible note is $516,660 (December 31, 2022 - $553,169).

The second tranche had a guaranteed interest rate of 8% and an original issue discount for US $32,000. The note matures on May 23, 2022 and can be converted into common shares of the Company at a conversion price of US $0.09 per common share. The conversion option was fair valued at $140,643 and the loan was fair valued at $670,204. The loan is amortized to maturity using an effective interest rate of 25.55%. As at December 31, 2022, the derivative was fair valued at $nil and the Company recorded a gain on fair value of derivative liability of $33,285.  As at September 30, 2023, the outstanding balance of the convertible note was $983,080 (December 31, 2022 - $982,970).

The changes in the fair value of the derivative and loan balances were as follows:

   
Convertible Debt
$
   
Derivative Liability
$
 
             
Balance, December 31, 2021
   
2,429,227
     
206,726
 
Interest expense
   
88,778
     
-
 
Accretion
   
200,497
     
-
 
Change in fair value of derivative liability
   
-
     
(206,726
)
Conversion of convertible debt
   
(1,274,060
)
   
-
 
Foreign exchange on loan
   
91,697
     
-
 
Balance, December 31, 2022
   
1,536,139
     
-
 
                 
Foreign exchange on loan
   
(36,398
)
   
-
 
Balance, September 30, 2023
   
1,499,741
     
-
 

17

ParcelPal Logistics Inc.
Notes to the Condensed Interim Consolidated Financial Statements
For the Three and Nine Months Ended September 30, 2023 and 2022
(Unaudited - expressed in Canadian Dollars)
13.
COST OF SALES

For the nine months ended September 30, 2023 and 2022 cost of sales consists of the following:

   
Three months ended September 30,
   
Nine months ended September 30,
 
   
2023
$
   
2022
$
   
2023
$
   
2022
$
 
Amortization of vehicles
   
13,083
     
47,335
     
39,366
     
143,265
 
Fuel
   
170,714
     
69,769
     
751,371
     
96,631
 
Short term vehicle rentals
   
30,979
     
276,961
     
134,899
     
1,045,760
 
Salaries and wages
   
1,987,465
     
1,912,966
     
6,018,653
     
5,201,207
 
     
2,202,241
     
2,307,031
     
6,944,289
     
6,486,863
 

During the nine months ended September 30, 2023, the Company received USD$700,000 (CAD - $908,500) in Employee Retention Credit (“ERC”) funding. The ERC is refundable payroll tax credit serving as a reimbursement for a portion of payroll taxes incurred in the United States.

14.
SUBSEQUENT EVENTS

On October 17, 2023, the Company announced it will be shifting a significant amount of its focus and resources on its growing U.S. operations, entering into new profitable contracts primarily in the United States and shedding any money losing business units and/or contracts immediately. To this end, we have terminated our largest Canadian contract on a mutually agreeable basis with our customer.

On November 14, 2023, the Company announced that it has extended its contract with its second largest customer for at least another year. This customer accounts for approximately 20% of the Company's topline revenue and is growing with us. Additionally, the terms of the renewed contract are more favorable for ParcelPal with increasing rates on deliveries and higher package counts.

18


Exhibit 99.2

PARCELPAL LOGISTICS INC.
Management Discussion and Analysis (“MD&A”)
For the Three and Nine months ended September 30, 2023
The following Management’s Discussion and Analysis (“MD&A”), prepared as of November 29, 2023, should be read in conjunction with the unaudited condensed interim consolidated financial statements of ParcelPal Logistics Inc. (formerly ParcelPal Technology Inc.) (“ParcelPal” or “the Company”) for the period ended September 30, 2023 together with the audited financial statements of the Company for the year ended December 31, 2022 and the accompanying MD&A for that fiscal year. The referenced financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting. All financial amounts are stated in Canadian dollars unless stated otherwise.

Additional information relating to the Company and its operations is available under the Company’s profile on SEDAR at www.sedarplus.ca.

The incorporation jurisdiction of ParcelPal Logistics Inc. is British Columbia.

This MD&A is the responsibility of management. Prior to its release, the Company’s Board of Directors (the “Board”) has approved this MD&A on the Audit Committee’s recommendation. The Company presents its financial statements in Canadian dollars. Amounts in this MD&A are stated in Canadian Dollars unless otherwise indicated. Unless otherwise noted or the context indicates otherwise, “we”, “us”, “our”, the “Company” or “ParcelPal” refer to ParcelPal Logistics Inc. and its direct and indirect subsidiaries.

FORWARD LOOKING STATEMENTS

This MD&A includes certain “forward-looking information” and "forward-looking statements” (collectively "forward-looking statements”) within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, included herein, without limitation, statements relating the future business operations of the Company, are forward-looking statements. Forward-looking statements are frequently, but not always, identified by words such as “plans”, “expects”, “anticipates”, “believes”, “intends”, “estimates”, “potential”, “possible”, and similar expressions, or statements that events, conditions, or results "will”, “may”, “could”, or “should” occur or be achieved. Forward-looking statements in this MD&A relate to, among other things, the Company expanding into additional markets, management’s expectations regarding the liquidity of the Company, the Company’s fee structure, and the Company’s plans with respect to managing liquidity risk. Forward-looking statements reflect the beliefs, opinions and projections on the date the statements are made and are based upon a number of assumptions and estimates that, while considered reasonable by the respective parties, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies.

There can be no assurance that such forward-looking statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to the nascent branding, social media technology, which is affected by numerous factors beyond the Company’s control; the Company’s ability to succeed in the North American market; and access to debt and equity; and the early stage of the Company’s business. The Company is subject to the risks associated with early stage companies, including uncertainty of revenues, markets and profitability and the ability to access debt or equity financing, as necessary. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended.
All material assumptions used in making forward-looking statements are based on management's knowledge of current business conditions and expectations of future business conditions and trends, including their knowledge of the current sales trends, general economic conditions affecting the Company and the Canadian and US economies. Certain material factors or assumptions are applied by the Company in making forward-looking statements, including without limitation, factors and assumptions regarding the Company’s continued ability to fund its business, rates of customer defaults, acceptance of its products in the current marketplace and acceptance of its products in other marketplaces, as well as its operating cost structure and current and future trends in social media advertising and traditional print media. Although the Company believes the assumptions used to make such statements are reasonable at this time, there may be other factors that cause results not to be as anticipated, estimated or intended.

1

PARCELPAL LOGISTICS INC.
Management Discussion and Analysis (“MD&A”)
For the Three and Nine months ended September 30, 2023
Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements that are incorporated by reference herein, except in accordance with applicable securities laws.

HIGHLIGHTS

 
a)
On March 14, 2023, the Company issued 20,944,640 units, consisting of one common share of the Company and one share purchase warrants, at a price of $0.017 per Unit for gross proceeds of $356,000. The Company also issued 4,273,503 units consisting of one common share of the Company and one-half share purchase warrant, at a price of $0.012 for gross proceeds of $50,000. The warrants expire on March 14, 2025 and are exercisable at $0.05 per warrant. The warrants were fair valued at $nil. The Company incurred cash issue costs of $18,593 and issued 579,600 broker warrants on the same terms as the warrants contained in the units. The broker warrants were fair valued at $9,593 using the Black-Scholes Option Pricing Model using the following assumptions: Risk free rate – 3.5%, expected volatility – 128%, expected forfeiture rate – nil, expected dividends – nil, expected life – 2 years.

COMPANY OVERVIEW AND OUTLOOK

ParcelPal Logistics Inc. is a Vancouver based company that specializes in last-mile delivery service and logistics solutions, providing businesses with a smart, reliable and affordable delivery service powered by the Company’s licensed technology platform.
ParcelPal’s business strategy started with hitting major urban centers. With success, the Company has decided to aim to launch in every major urban center in Canada while expanding regionally, in parallel. ParcelPal initially operated in major urban centers in Vancouver, BC area and, subsequently, we have expanded throughout Canada. As a result of our marketing efforts, we have expanded across the entire lower mainland, offering same-day delivery for select clients.  In July, 2021, the Company opened its first warehouse in the Vancouver area.  In September 2021, the Company expanded into the western United States with its first acquisition.  The Company intends to continue to diversify its client base and target large business to business clients as well as we further expand throughout the United States.
ParcelPal operates from its main office in Salt Lake City, Utah and our operations are currently managed from here. ParcelPal offers employment opportunities that support all functions of technology and physical deliveries. ParcelPal currently has over one hundred employees, including the delivery team.

Forward Looking Growth and Business Strategies
ParcelPal plans to implement additional services for consideration of growing our client base and retaining existing customers. In addition to raising additional capital, we are also planning on signing more small and medium enterprise clients for traditional courier services that are multi-city operational, and which are higher margin services that are also highly scalable. To execute this part of our strategy, we will need to open additional dedicated warehouse facilities in which we can sort, ship and create more efficient delivery routes. This will also allow us to also be able to benefit from economies of scale as our operating costs will decrease significantly, leading to better operating margins. With the recent capital raise that we have done, along with having an equity line of credit at our disposal, we have the resources and capital to execute on this plan This to both fund our operating expenses and the concomitant warehousing and fleet costs associated with it.

The Company will increase monthly recurring revenue by continuously adding new merchants, delivery verticals and drivers to the platform. Monthly fees from merchants is part of ParcelPal’s plan for additional revenue streams. In addition to ParcelPal’s current services, ParcelPal plans to implement additional services for consideration of growing the merchant’s business and retaining existing customers. ParcelPal has been working closely with merchants to determine pricing strategies and service add-ons to further monetize the platform.

2

PARCELPAL LOGISTICS INC.
Management Discussion and Analysis (“MD&A”)
For the Three and Nine months ended September 30, 2023
One of the Company’s priorities is to increase our footprint with Amazon, FedEx Ground and with other small and medium enterprise customers that have operations in major cities, in particular with respect to last mile delivery services, which is our specialty. Other more profitable areas such as home-meal kit and large retail chain store deliveries are those which we will increasingly target. We believe that these are the types of business services that are highly scalable and will strongly contribute to our profitability.

Revenue

The Company currently has one revenue stream which is through billable contracts such as Amazon.com Inc, FedEx Ground and other merchants.
GOING CONCERN

The Company has incurred significant operating losses and negative cash flows from operations in recent years. As a result of the foregoing, there is significant doubt about the Company's ability to continue as a going concern. The condensed interim consolidated financial statements were prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. Whether and when the Company can attain profitability and positive cash flows is uncertain. The Company is working to expand its operations and it is expected that the Company’s liquidity will fluctuate as a result of any expansion. The fee structure for the services offered by the Company is expected to remain constant for the foreseeable future.

The continuation of the Company as a going concern is dependent upon completing a short-term financing for sufficient working capital to maintain operations, reducing operating expenses, increasing revenues and commencing profitable operations in the future. Risks that may materially affect the Company’s future performance include: the possibility of discontinuance of operations of the Company, the risk that the Company is unable to find suitable investors for a financing, the risk that the Company will not be able to expand operations, and competition risks. The Company recognizes the threats posed by operating in an uncertain global economic environment. This uncertainty may continue to impact the Company’s industry, resulting in a lower demand for some of its services and its partners’ products.

The Company is in its growth phase and it is expected that the Company will continue to incur losses until significant revenues are generated as management executes its business plan. The Company began generating revenue in the period ending September 30, 2017;

The Company manages liquidity risk by maintaining sufficient cash balances and adjusting the operating budget and expenditures to ensure that there is sufficient capital in order to meet short-term and other specific obligations. The Company plans to control spending and prudently allocate financial resources to optimize value. The Company will seek additional financing through equity financings until the Company reaches profitability. In order to increase sales, the Company intends to ensure that the service provided meets the needs of existing and potential customers and is competitively priced. The Company plans to continue to develop, innovate and continuously improve current and new technologies in a timely and cost-effective manner. Management believes that the likelihood of completing these plans is high, and the Company has sufficient financial resources to meet its planned operations for the foreseeable future.

The condensed interim consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

3

PARCELPAL LOGISTICS INC.
Management Discussion and Analysis (“MD&A”)
For the Three and Nine months ended September 30, 2023
SUMMARY OF QUATERLY RESULTS
Following is a table of the income, total assets, operating loss for the past eight quarters.

   
Quarter ended
 
   
September 30,
   
June 30,
   
March 31,
   
December 31,
 
   
2023
   
2023
   
2023
   
2022
 
   

$
   

$
   

$
   

$
 
Revenue
   
3,644,712
     
2,919,785
     
2,965,043
     
3,442,818
 
Total assets
   
3,799,219
     
4,072,689
     
4,130,103
     
4,560,831
 
Net loss
   
(103,685
)
   
(110,379
)
   
(967,320
)
   
(535,545
)
Loss per share
   
(0.00
)
   
(0.00
)
   
(0.02
)
   
(0.00
)
Dividends
   
-
     
-
     
-
     
-
 

   
Quarter ended
 
   
September 30,
   
June 30,
   
March 31,
   
December 31,
 
   
2022
   
2022
   
2022
   
2021
 
   
$
   

$
   
$
$
   

$
 
Revenue
   
2,620,506
     
2,505,663
     
2,673,673
     
3,274,710
 
Total assets
   
5,227,929
     
5,374,050
     
5,022,334
     
5,489,326
 
Net loss
   
(1,192,589
)
   
(1,438,648
)
   
(359,215
)
   
(72,853
)
Loss per share
   
(0.01
)
   
(0.00
)
   
(0.00
)
   
(0.00
)
Dividends
   
-
     
-
     
-
     
-
 

SELECTED RESULTS

Nine months ended September 30, 2023
During the nine months ended September 30, 2023, the Company had a net loss of $1,181,384 compared to $2,990,452 during the nine months ended September 30, 2022. The change in net loss is due to the following:

i)
Amortization expense decreased to $743,198 (2022 - $874,111) as the Company had fewer purchased and leased vehicles during the current period.
ii)
Office and miscellaneous increased to $1,316,699 (2022 - $1,106,856) related to the consolidated operations of Trucking and ParcelPal USA.
iii)
The Company recorded interest expense of $141,250 (2022 - $410,142) primarily related to interest and accretion on the convertible notes and the loan payable.
iv)
The Company recorded other income of $908,500 (2022 - $) related to an employee retention credit refund from Web-to-Door Trucking Corp.

Three months ended September 30, 2023
During the three months ended September 30, 2023, the Company had a net loss of $103,685 compared to $1,192,589 during the three months ended September 30, 2022. The change in net loss is due to the following:

i)
Marketing and promotion increased to $149,107 (2022 - $49,705) as the Company engaged with consultants to raise awareness of the Company.
ii)
Office and miscellaneous expense increased to $921,822 (2022 - $334,485) related to the consolidated operations of Trucking and ParcelPal USA.
iii)
The Company recorded interest expense of $48,627 (2022 - $97,469) primarily related to interest and accretion on the convertible notes and the loan payable.
iv)
The Company recorded other income of $571,575 (2022 - $nil) related to an employee retention credit refund from Web-to-Door Trucking Corp.

4

PARCELPAL LOGISTICS INC.
Management Discussion and Analysis (“MD&A”)
For the Three and Nine months ended September 30, 2023
RIGHT-OF-USE ASSETS AND VEHICLES

   
Vehicles
$
   
ROU Assets
$
   
Total
$
 
Cost
                 
Balance, December 31, 2021
   
198,745
     
839,699
     
1,038,444
 
Additions
   
452,323
     
-
     
452,323
 
Disposal
   
(198,745
)
   
(633,671
)
   
(832,416
)
Foreign exchange
   
23,097
     
-
     
23,097
 
Balance, December 31, 2022
   
475,420
     
206,028
     
681,448
 
Disposal
   
-
     
(206,028
)
   
(206,028
)
Foreign exchange
   
(842
)
   
-
     
(842
)
Balance, September 30, 2023
   
474,578
     
-
     
474,578
 
                         
Accumulated amortization
                       
Balance, December 31, 2021
   
93,217
     
292,874
     
386,091
 
Amortization
   
25,817
     
158,253
     
184,070
 
Disposal
   
(93,217
)
   
(303,759
)
   
(396,976
)
Foreign exchange
   
594
     
-
     
594
 
Balance, December 31, 2022
   
26,411
     
147,368
     
173,779
 
Amortization
   
39,366
     
-
     
39,366
 
Disposal
   
-
     
(147,368
)
   
(147,368
)
Foreign exchange
   
139
     
-
     
139
 
Balance, September 30, 2023