5. EQUITY INVESTMENT AND ROYALTIES

On March 21, 2019, the Company entered an agreement with Cell MedX Corp/ ("CMXC") to purchase the direct rights to distribute the eBalance device from CMXC. On January 29, 2020 the Company and CMXC entered a Buyback agreement to sell the exclusive distribution rights to the eBalance microcurrent device back to CMXC.

The sale price included a retained royalty on future sales of the eBalance device capped at US$507,000 and share purchase warrants for 2,000,000 shares of CMXC of which 1,000,000 are exercisable at $0.50 and 1,000,000 exercisable at $1.00. As of December 31, 2021. The Company's equity investment consists of 2,000,000 share purchase warrants. Each CMXC share purchase warrant is exercisable for a period of three years expiring on January 31, 2023.

As of December 31, 2021, the fair value of the equity investment was calculated to be $52,054 (2020 - $398,308) based on the market price of $0.179 (2020 - $0.270) per CMXC common share using a Black Scholes Options Pricing model with the following assumptions.

Assumptions:	2021	2020
Risk-free rate (%)	.39	0.13
Expected stock price volatility (%)	121.28	182.61
Expected dividend yield (%)	0.00	0.00
Expected life of options (years)	1.08	2.08

The initial recognition of the equity investment in CMXC resulted in a $351,134 gain on sale of distribution license which is equivalent to the fair value of equity investment received. On December 31, 2020 the equity investment was revalued resulting in a cumulative gain of $398,308. The Company constrained the gain to the fair value of the equity instruments received, as at the point of sale future royalty payments were uncertain as Cell MedX had limited sales and had not obtained Health Canada Class II Medical Device License for the eBalance® Device or the 510K certification from the Food and Drug Administration. The company reviewed its estimates at December 31, 2021 and did not include an additional gain from the royalty.

During the year ending December 31, 2021, no CMXC warrants were sold and no realized gain or loss from sale of equity investment was realized. The transaction is considered to be a related party transaction as the Company has a common director with Cell MedX and there are beneficial shareholders in common for both Companies.