BuildDirect.com Technologies Inc. — Interim / Quarterly Report 2021

Oct 28, 2020

VLCTY CAPITAL INC. (A Capital Pool Company)

CONDENSED INTERIM FINANCIAL STATEMENTS ( Presented in Canadian Dollars)

THREE MONTHS ENDED AUGUST 31, 2020

(Unaudited)

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Notice to Reader

These condensed interim financial statements of VLCTY Capital Inc. have been prepared by management and approved by the Audit Committee of the Board of Directors of the Company. In accordance with National Instrument 51-102 released by the Canadian Securities Administrators, the Company discloses that its external auditors have not reviewed these condensed interim financial statements, notes to the financial statements or the related quarterly Management’s Discussion and Analysis.

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TABLE OF CONTENTS CONDENSED INTERIM STATEMENTS OF FINANCIAL POSITION CONDENSED INTERIM STATEMENTS OF INCOME CONDENSED INTERIM STATEMENTS OF SHAREHOLDERS’EQUITY(DEFICIT) CONDENSED INTERIM STATEMENTS OF CASH FLOWS NOTES TO CONDENSED INTERIM FINANCIAL STATEMENTS	PAGE 3 4 5 6 7

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VLCTY CAPITAL INC. (A Capital Pool Company) Condensed Interim Statements of Financial Position

	August 31, 2020 (unaudited)	May 31, 2020
ASSETS
Current assets
Cash	116,069 $	132,833 $
Deposit and other	6,052	6,000
Total assets	122,121 $	138,833 $
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Current liabilities
Accrued liabilities	3,228 $	4,726 $
Total liabilities	3,228	4,726
SHAREHOLDERS' EQUITY
Capital stock	142,092	142,092
Retained earnings (deficit)	(23,199)	(7,985)
Total shareholders' equity (deficit)	118,893	134,107
Total liabilities and shareholders' equity	122,121 $	138,833 $

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

/s/ Andrew Elbaz

Board Signature

/s/ Michael Silver

Board Signature

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VLCTY CAPITAL INC. (A Capital Pool Company) Condensed Interim Statements of Income (Unaudited)

Revenue	Three Months Ended August 31, 2020
Total revenue	- $
Operating expenses
Professional fees	9,179
Listing and filing fees	6,005
Bank charges and interest	30
Total operating expenses	15,214
Net loss	(15,214) $
Basic and diluted loss per common share	(0.01) $
Weighted average number of shares outstanding	3,000,000

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

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VLCTY CAPITAL INC. (A Capital Pool Company) Condensed Interim Statements of Shareholders’ Deficit (Unaudited)

Balances, at incorporation, September 16, 2019	Number of shares issued and outstanding -	Share capital amount - $	Deficit - $	Total
				- $
Share issuance	3,000,000	150,000	-	150,000
Share issue costs	-	(7,908)	-	(7,908)
Net loss	-	-	(7,985)	(7,985)
Balances, May 31, 2020	3,000,000	142,092 $	(7,985) $	134,107 $
Net loss	-	-	(15,214)	(15,214)
Balances, August 31, 2020	3,000,000	142,092 $	(23,199) $	118,893 $

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

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VLCTY CAPITAL INC. (A Capital Pool Company) Condensed Interim Statements of Cash Flows (Unaudited)

Cash flows from operating activities	Ended August 31, 2020
Net loss	(15,214) $
Change in operating assets and liabilities
Deposit and other assets	(52)
Accounts payable and accrued liabilities Cash used in operating activities Decrease in cash	(1,499)
	(16,764)
	(16,764)
Cash, beginning of period	132,833
Cash, end of period	116,069 $

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

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VLCTY CAPITAL INC. (A Capital Pool Company) Three months ended August 31, 2020 Notes to Condensed Interim Financial Statements (Unaudited) (Stated in Canadian Dollars)

1. NATURE OF BUSINESS

VLCTY Capital Inc. (the “Company”) was incorporated under the Business Corporations Act (British Columbia) on September 16, 2019. The Company intends to carry on business as a Capital Pool Company ("CPC") as defined in policy 2.4 of the TSX Venture Exchange (the “Exchange”) with a view to completing an initial public offering. The Company has no commercial operations and has no significant assets other than cash and proposes to identify and evaluate potential acquisitions or businesses with a view to completing a Qualifying Transaction as defined under the policies of the Exchange.

The Company's registered head office is located 206-3500 Carrington Road, Westbank, British Columbia, Canada V4T 3C1.

There is no assurance that the Company will identify a Qualifying Transaction within the time limitations permissible under the policies of the Exchange, at which time the Exchange may suspend or delist the Company's shares from trading.

COVID-19

The recent outbreak of COVID-19 has spread across the globe and is impacting worldwide economic activity. Conditions surrounding COVID-19 continue to rapidly evolve and government authorities have implemented emergency measures to mitigate the spread of the virus. The outbreak and the related mitigation measures may have an adverse impact on global economic conditions as well as on the Company's business activities. The extent to which COVID-19 may impact the Company's business activities will depend on future developments, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions, business disruptions, and the effectiveness of actions taken in Canada and other countries to contain and treat the disease. These events are highly uncertain and as such, the Company cannot determine their financial impact at this time.

2. STATEMENT OF COMPLIANCE AND BASIS OF PRESENTATION

Statement of compliance

These condensed interim financial statements have been prepared in accordance and compliance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

These condensed interim financial statements were approved by the Board of Directors on October 27, 2020.

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Basis of presentation

These condensed interim financial statements have been prepared on a historical cost basis. In addition, these statements have been prepared using the accrual basis of accounting. These condensed interim financial statements, including comparatives, have been prepared on the basis of IFRS standards that are published at the time of preparation and that are effective or available for the Company’s reporting date.

These condensed interim financial statements have been prepared in accordance with the same accounting policies and methods of application as the most recent audited financial statements for the period from the date of incorporation of September 16, 2019 to May 31, 2020 (fiscal yearend), except that they do not include all the disclosures required for the annual audited financial statements. These condensed interim financial statements should be read in conjunction with the audited financial statements for the Company for the period from the date of incorporation of September 16, 2019 to May 31, 2020 (fiscal yearend).

These condensed interim financial statements have been prepared on the going concern basis, which assumes that the Company will be able to realize its assets (primarily collection of its accounts receivable) and discharge its liabilities in the normal course of business. These condensed interim financial statements do not reflect any adjustments that may be necessary if the Company is unable to continue as a going concern.

Functional currency

The condensed interim financial statements are presented in Canadian dollars, which is also the functional currency of each entity within the group.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Significant accounting estimates and judgments

Preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies, the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses during the period. Estimates and assumptions are continuously evaluated and are based on management's experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Uncertainty about these judgments, estimates, and assumptions could result in material adjustment to the carrying amount of the asset or liability affected in future periods. Significant areas of estimation uncertainty considered by management in preparing the financial statements are as follows:

Deferred Tax Assets

Deferred tax assets are recognized in respect of tax losses and other temporary differences to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing

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and level of future taxable profits, together with future tax planning strategies. These estimates will affect the reported amounts of deferred tax assets and expenses

Financial Instruments

Recognition and Derecognition

Financial assets and financial liabilities are recognized in the Company's statement of financial position when the Company becomes a party to the contractual provisions of the instrument.

Classification

Financial assets and financial liabilities are classified in the following measurement categories:

• i. those to be measured subsequently at fair value (either through profit or loss or through other comprehensive income), and;

• ii. those to be measured subsequently at amortized cost.

The classification of financial assets depends on the business model for managing the financial assets and contractual terms of the cash flows. Financial liabilities are classified as those to be measured at amortized cost unless they are designated as those to be measured subsequently at fair value through profit or loss. For financial assets and liabilities measured at fair value, gains and losses are either recorded in profit or loss or other comprehensive income. Classification of financial assets or financial liabilities at fair value through either profit or loss or other comprehensive income, is an irrevocable designation at the time of recognition.

Financial assets are reclassified when, and only when, the Company's business model for managing those assets changes. Financial liabilities are not reclassified.

The Company has implemented the following classifications:

Cash and deposit are classified as subsequently measured at amortized cost.

Accrued liabilities are classified as other financial liabilities and are subsequently measured at amortized cost using the effective interest method. Interest expense is recorded in profit or loss.

Measurement

All financial instruments are required to be measured at fair value on initial recognition. Transaction costs that are directly attributable to the acquisition or issuance of that instrument are added to financial instruments not measured at fair value through profit or loss. Transaction costs of financial instruments with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payments of principal and interest. Financial assets that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely

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payments of principal and interest are measured at amortized cost at the end of the subsequent accounting period. All other financial assets including equity investments are measured at their fair values at the end of subsequent accounting periods, with any change taken through profit or loss or other comprehensive income.

Impairment

The Company assesses all information available, including on a forward-looking basis the credit losses associated with its assets carried at amortized cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. To assess whether there is significant increase in credit risk, the Company compares the risk of default occurring as at the reporting date with the risk of default as at the date of initial recognition based on all information available, and reasonable and supportive forward looking information.

Capital Stock

Capital stock is classified as equity. Incremental costs directly attributable to the issue of shares and share options are recognized as a deduction from equity. When capital stock is repurchased, the amount of the consideration paid, including directly attributable costs, is recognized as a deduction from equity.

Income Taxes

The Company follows the asset and liability method of tax allocation in accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the deferred tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and for loss carry-forwards. The resulting changes in the net deferred tax asset or liability are included in income.

Deferred tax assets and liabilities are measured using enacted, or substantively enacted, tax rates expected to apply to taxable income (loss) in the years in which temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates, is included in income in the period that includes the substantive enactment date. Deferred income tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

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Share-Based Payments

The Company applies a fair value based method of accounting to all share-based payments. Stock options issued to Directors are measured at their fair value on the grant date and recognized over their respective vesting periods. Stock options issued to technical consultants (see Note 8) are measured based on the fair value of the service provided. The cost of stock options is presented as share-based payment expense when applicable, with a corresponding credit to contributed surplus. On the exercise of stock options, capital stock is credited for consideration received and for fair value amounts previously credited to contributed surplus. The Company uses the Black-Scholes option pricing model to estimate the fair value of sharebased payments.

Loss Per Share

Basic earnings or loss per share is calculated by dividing the loss by the weighted average number of common shares outstanding during the period. The weighted average number of common shares outstanding is calculated by adjusting the shares issued at the beginning of the period by the number of shares bought back or issued during the period, multiplied by a time-weighting factor.

Diluted earnings or loss per share is calculated by adjusting the number of common shares for the effects of dilutive options and other dilutive potential units. Shares held in escrow that are only released upon contingent events are not included in the calculation of the weighted average number of common shares. Instruments which would be anti-dilutive are not included in the calculation of diluted loss per share.

4. CASH

The proceeds raised from the issuance of capital stock in the period from the date of inception of September 16, 2019 through May 31, 2020 (fiscal yearend) may only be used to identify and evaluate assets or businesses for future investment, with the exception that not more than the lesser of 30% of the gross proceeds and $210,000 may be used to cover prescribed costs of issuing the common shares or administrative and general expenses of the Company. These restrictions may apply until completion of a Qualifying Transaction by the Company as defined under the policies of the Exchange.

5. CAPITAL STOCK

Authorized

Unlimited number of voting common shares Unlimited number of non-voting, redeemable, retractable preferred shares issuable in series

Issued

Upon incorporation on September 16, 2019, the Company issued 2,000,000 common shares at a price of $0.05 per share for gross proceeds of $100,000. On December 6, 2019, the Company issued 500,000

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common shares at a price of $0.05 per share for gross proceeds of $25,000. On February 24, 2020, the Company issued 500,000 common shares at a price of $0.05 per share for gross proceeds of $25,000.

All of the common shares issued are to be held in escrow until completion of a Qualifying Transaction. For the escrowed common shares, 10% will be released on the issuance of the Final Exchange Bulletin and an additional 15% will be released on the dates 6 months, 12 months, 18 months, 24 months, 30 months, and 36 months following the initial release. These common shares, which are considered contingently issuable until the Company completes a Qualifying Transaction, are not considered to be outstanding for the purpose of the loss per share calculation.

Offering

On August 28, 2020, the Company filed a prospectus with the securities regulatory authorities in the provinces of Alberta, British Columbia, and Ontario, and with the Exchange offering 3,000,000 common shares at $0.10 per share (the “Offering”) to the public, for total estimated proceeds of $300,000 before transaction costs. Pursuant to the agency agreement (the “Agreement”) entered into on August 28, 2020 between the Company and Leede Jones Gable Inc. (the “Agent”), the Agent will be granted an option to purchase up to 300,000 shares at a price of $0.10 per share exercisable for a period of twenty-four months from the listing of the Company's shares on the Exchange.

The Company will pay the Agent a commission equal to 10% of the gross proceeds as well as a corporate finance fee of $10,000.

The Offering has not closed as of October 27, 2020.

Concurrently with the completion of the offering, the Company intends to enter into stock option agreements with directors of the Company, entitling them to purchase up to 600,000 common shares in aggregate at a price of $0.10 per share for a period of ten years from the date of issuance.

Stock Option Plan

The Company has adopted an Incentive Stock Option Plan (the “Plan”) in accordance with the policies of the Exchange which provides that the Board of Directors of the Company may from time to time, at its discretion, grant to directors, officers, employees, and technical consultants of the Company nontransferable options to purchase common shares, provided that the number of common shares reserved for issuance will not exceed ten percent of the Corporation's issued and outstanding common shares, exercisable for a period of up to ten years from the date of grant, provided that, until the completion of the Qualifying Transaction the number of common shares reserved for issuance shall not exceed 600,000. In addition, the number of common shares reserved for issuance to any one person shall not exceed five percent of the issued and outstanding common shares and the number of common shares reserved for issuance to all technical consultants will not exceed two percent of the issued and outstanding common shares. As at August 31, 2020, no stock options had been issued.

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6. MANAGEMENT OF CAPITAL

The Company includes the following in its managed capital:

	August 31, 2020 (unaudited)	May 31, 2020
Capital stock	$ 142,092	$ 142,092
Deficit	(23,199)	(7,985)
	118,893 $	134,107 $

The Company's objectives in managing capital are to:

• a. Maintain sufficient capital to identify, evaluate, and complete a Qualifying Transaction;

• b. Ensure the Company maintains the minimum level of capital required to effectively operate its business;

• c. Ensure the Company's ability to provide capital growth to its shareholders; and

• d. Maintain a flexible structure that optimizes the cost of capital at acceptable levels of risk.

Apart from the above, the Company is not subject to any externally or internally imposed capital requirements at period-end.

7. FINANCIAL RISK MANAGEMENT

Fair Values

The Company's financial instruments consist of cash and accrued liabilities. The fair values of these instruments approximate their carrying values due to the short-term nature of these instruments.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its obligations as they become due. The Company manages its liquidity risk by forecasting cash flows and anticipated investing and financing activities. Officers of the Company are actively involved in the review and approval of planned expenditures. As at August 31, 2020, the Company has liabilities of $3,228 due within twelve months and has cash of $116,069 to meet its current obligations. As a result, management has judged liquidity risk to be low.

Credit Risk

Credit risk is the risk of loss associated with a counter-party's inability to fulfill its payment obligations. The Company believes it has no significant credit risk.

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