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AF2 Capital Corp. — Management Reports 2025
Dec 5, 2025
47962_rns_2025-12-05_e115620e-417d-4665-9f1a-93647a5e840a.pdf
Management Reports
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AF2 Capital Corp.
(a Capital Pool Company)
Management’s Discussion and Analysis
For the year ended August 31, 2025
Introduction
This Management’s Discussion and Analysis (“MD&A”) provides a review of AF2 Capital Corp.’s (“AF2” or “the Company”) financial performance for the year ended August 31, 2025. It should be read in conjunction with the Company’s financial statements and accompanying notes for the years ended August 31, 2025 and 2024. The financial information contained in this MD&A has been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board and interpretations of the IFRS Interpretations Committee. The MD&A has been prepared effective December 5, 2025 and has been approved by the Board of Directors of the Company.
This MD&A may contain “forward-looking statements” which reflect expectations regarding future results of operations, performance and achievements of the Company. The Company has tried, wherever possible, to identify these forward-looking statements by, among other things, using words such as “anticipate,” “believe,” “estimate,” “expect” and similar expressions. The statements reflect the current beliefs of the management of the Company, and are based on currently available information. Accordingly, these statements are subject to known and unknown risks, uncertainties and other factors, which could cause the actual results, performance, or achievements of the Company to differ materially from those expressed in, or implied by, these statements. Readers are cautioned not to place undue reliance on these forward-looking statements.
The Company undertakes no obligation to publicly update or review the forward-looking statements whether as a result of new information, future events or otherwise.
Going Concern
The Company does not generate revenue from operations. The Company incurred a net loss of $28,469 during the year ended August 31, 2025 (August 31, 2024 - $17,965). However, the Company believes that its working capital balance as at August 31, 2025 will provide the Company with sufficient cash resources to meet its obligations for at least twelve months from the end of the reporting period. The Company’s financial statements have been prepared on a going concern basis, which presumes realization of assets and discharge of liabilities in the normal course of business for the foreseeable future. As the Company has no revenues, its ability to continue as a going concern is dependent on obtaining additional financing and completing a Qualifying Transaction. The Company’s financial statements do not include any adjustments to the amounts and classification of assets and liabilities that might be necessary should the Company be unable to continue in business. Such adjustments could be material.
Nature of the Business and Incorporation
The Company is a Capital Pool Company ("CPC"), as such term is defined in Policy 2.4 of the TSX Venture Exchange ("TSX-V" or the "Exchange") (the "Policy").
The Company's continuing operations, as intended, are dependent on its ability to secure equity financing with which it intends to identify and evaluate potential acquisitions of businesses, and once identified and evaluated, to negotiate an acquisition thereof or participation therein subject to receipt of regulatory and, if required, shareholders' approval.
The Company's registered head office address is Suite 2300, Bentall 5, 550 Burrard Street, Vancouver, British Columbia, V6C 2B5.
Corporate Development
Initial public offering
On March 15, 2021, the Company completed its initial public offering, raising gross proceeds of $300,000 (the "Offering") pursuant to a prospectus dated February 17, 2021. Under the terms of the Offering, an aggregate of 3,000,000 common shares in the capital of the Company were subscribed for at a price of $0.10 per share.
Haywood Securities Inc. (the "Agent") acted as the agent for the Offering. The Agent received a cash commission equal to 10% of the gross proceeds of the Offering and an option to purchase 300,000 common shares at a price of $0.10 per share for a period of 24 months from the date of listing of the common shares on the Exchange. These options expired on March 15, 2023.
Upon closing of the Offering, the Company granted 500,000 incentive stock options to its directors and officers which are exercisable within ten years from the date of the grant at an exercise price of $0.10 per common share.
Trading symbol and commencement of trading
The Company is a Capital Pool Company under the policies of the Exchange. The Company's common shares commenced trading on the Exchange on March 17, 2021 under the trading symbol "AF.P".
Letter of Intent with Stay Inc.
On October 23, 2023, the Company entered into a non-binding letter of intent (the "LOI") with Stay Inc. ("Stay"), a platform for short and long-term rental with operations in both Canada and the United States of America. The LOI set forth the basic terms and conditions upon which Stay and the Company would combine their business operations resulting in a reverse takeover of the Company by Stay and its shareholders (the "Transaction"). The LOI was terminated on January 9, 2025.
Letter of Intent with EverKind Inc.
On October 14, 2025, the Company entered into a non-binding letter of intent (the "LOI") with EverKind Inc. ("EverKind"), an AI-powered emotional wellness platform, which sets forth, in
general terms, the basic terms and conditions upon which EverKind and AF2 will combine their business operations resulting in a reverse takeover of AF2 by EverKind and its shareholders (the "Transaction"). It is intended that the Transaction will constitute the "Qualifying Transaction" of AF2 as such term is defined in Exchange Policy 2.4 - Capital Pool Companies, resulting in the combination of EverKind and AF2, with the common shares of the resulting issuer to the Transaction (the "Resulting Issuer Shares") being listed on the TSX Venture Exchange (the "Exchange"), subject to approval of the Exchange.
Results of Operations
Selected annual financial information:
The following is a summary of the Company's financial results for the period stated:
| YEAR ENDED AUGUST 31, 2025 $ | YEAR ENDED AUGUST 31, 2024 $ | YEAR ENDED AUGUST 31, 2023 $ | |
|---|---|---|---|
| Net loss and comprehensive loss | (28,469) | (17,965) | (43,980) |
| Net loss per share | (0.01) | (0.01) | (0.01) |
| As at August 31, 2025 | As at August 31, 2024 | As at August 31, 2023 | |
| --- | --- | --- | --- |
| Total assets | 149,141 | 171,107 | 195,785 |
| Current Liabilities | 23,617 | 17,114 | 23,827 |
| Accumulated deficit | (257,229) | (228,760) | (210,795) |
The Company had a net loss of $28,469 during the year ended August 31, 2025, compared to $17,965 for the year ended August 31, 2024. The increase was primarily due to an increase in legal and accounting fees incurred during the year.
The Company had a net loss of $28,469 during the year ended August 31, 2025, compared to $43,980 for the year ended August 31, 2023. The decrease was primarily due to an increase in legal and accounting fees incurred during the prior year.
Summary of Financial Results of the Most Recently Completed Quarters
| August 31, 2025 | May 31, 2025 | February 28, 2025 | November 30, 2024 | |
|---|---|---|---|---|
| Net loss and comprehensive loss | (8,816) | (4,669) | (12,421) | (2,563) |
| Net loss per share | (0.00) | (0.00) | (0.00) | (0.00) |
| Working capital | 125,524 | 134,340 | 139,009 | 151,430 |
| Total assets | 149,141 | 148,540 | 157,693 | 160,008 |
| August 31, 2024 | May 31, 2024 | February 29, 2024 | November 30, 2023 | |
| --- | --- | --- | --- | --- |
| Net loss and comprehensive loss | (1,621) | (2,497) | (11,184) | (2,663) |
| Net loss per share | (0.00) | (0.00) | (0.00) | (0.00) |
| Working capital | 153,993 | 155,614 | 158,111 | 169,295 |
| Total assets | 171,107 | 170,040 | 175,903 | 190,472 |
Since inception, the Company has incurred losses while advancing its business plan. The net loss and comprehensive loss was $8,816 for the three months ended August 31, 2025, compared to $4,669 for the three months ended May 31, 2025. The increase was primarily related to an increase in legal and accounting fees incurred during the period.
The net loss and comprehensive loss was $8,816 for the three months ended August 31, 2025, compared with $1,621 for the three months ended August 31, 2024. The increase was primarily related to an increase in legal and accounting fees incurred during the period.
Liquidity and Capital Resources
As of August 31, 2025, the Company had $149,141 in cash and working capital was $125,524. The Company has an accumulated deficit of $257,229 as at that date. To date, the Company's expenditures are largely made up of costs related to administrative overhead and professional fees related to the Company's application for listing on the TSX-V.
Management anticipates that ongoing costs relating to the identification, evaluation, due diligence, negotiation and completion of a Qualifying Transaction will be incurred in future periods. The timing and magnitude of these costs are not predictable. These costs may be significant and could possibly result in higher general and administrative expenses. To date, the Company has procured working capital through equity financing.
Off Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements.
Critical Accounting Estimates
The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities. The estimates and associated assumptions are based on anticipations and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision, and further periods if the revision affects both current and future periods. Significant assumptions that management have made that would result in a material adjustment to the carrying amounts of assets and liabilities in the event that actual results differ from assumptions made, relate to but is not limited to the recognition of deferred income taxes and going concern.
Ability to continue as a going concern
Management assesses the Company's ability to continue as a going concern at each reporting date, using all quantitative and qualitative information available. This assessment, by its nature, relies on estimates of future cash flows and other future events, and subsequent changes could materially impact the validity of such an assessment.
Related Party Transactions
Related parties include the Board of Directors, close family members and enterprises which are controlled by these individuals as well as certain persons performing similar functions.
During the year ended August 31, 2025, $5,820 (year ended August 31, 2024 - $Nil), of professional fees were incurred from a company controlled by a director. Included in accounts payable and accrued liabilities as at August 31, 2025 was $9,266 (August 31, 2024 - $5,707) owing to a company controlled by a director. The outstanding balance as at year end is unsecured and interest free and settlement occurs in cash.
All related party transactions are in the normal course of operations and values of services provided represent the market value of these transactions.
Financial Instruments and Risk Management
Fair Values
At August 31, 2025, the Company's financial instruments consist of cash and accounts payable and accrued liabilities. The fair values of these financial instruments approximate their carrying values due to the relatively short-term maturity of these instruments.
The Company is exposed in varying degrees to a number of risks arising from financial instruments. Management's involvement in the operations of the Company allows for the identification of risks and variances from expectations. The Company does not participate in the
use of financial instruments to mitigate these risks. The Board approves the risk management processes. The Board's main objectives for managing risks are to ensure liquidity, the fulfillment of obligations, the continuation of the Company's search for a Qualifying Transaction, and limit exposure to credit and market risks.
The types of risk exposure and the way in which such exposures are managed are as follows:
Credit Risk
Credit risk is the risk of loss if a third party to a financial instrument fails to meet its commercial obligations. The Company believes its exposure to credit risk is not significant.
Interest Rate 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 interest rate risk, from time to time, on its cash balances.
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. Accounts payable and accrued liabilities generally have contractual maturities of less than 30 days and are subject to normal trade terms. The Company manages liquidity risk by maintaining sufficient cash balances to enable settlement of transactions on the due date. The ability to do this relies on the Company raising equity financing in a timely manner and by maintaining sufficient cash in excess of anticipated needs.
Management of Capital
The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern and ensure sufficient liquidity in order to complete a Qualifying Transaction so that it can provide adequate returns for shareholders. 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. For the purpose of the Company's capital management, capital includes shareholders' equity, which amounted to $125,524, as at August 31, 2025.
The proceeds raised from the issuance of common shares may only be used to identify and evaluate assets or businesses for future investment. As a CPC, the Company is subject to externally imposed capital requirements as outlined in the Exchange Policy 2.4. The Company is currently not subject to other externally imposed capital requirements.
Outstanding Share Data
The following securities were outstanding as at December 5, 2025:
| Number | |
|---|---|
| Common shares | 5,000,000 |
| Stock options | 500,000 |
Risk Factors
The Company is actively trying to complete its Qualifying Transaction and currently has no source of recurring income. The Company has not commenced commercial operations, and has no significant assets other than cash, has no history of earnings and shall not generate earnings or pay dividends until at least after the completion of a Qualifying Transaction. Until that time, the Company is not permitted to carry on any other business other than the identification and evaluation of potential Qualifying Transactions.
There can be no assurances that the Company will continue to be able to obtain adequate financing in the future or that the terms of such financing will be favorable.
To a certain degree, the Company's success depends upon key members. It is expected that these individuals will be a significant factor in the Company's growth and success. The loss of the service of members of management and certain key employees could have a material adverse effect on the Company.
Other Information
Additional information relating to the Company is available under the Company's profile on SEDAR+ at www.sedarplus.com.
Approval
The Board of Directors of the Company has approved the disclosure contained in this MD&A. A copy of this MD&A will be provided to anyone who requests it.