Eddy Smart Home Solutions Ltd. — Interim / Quarterly Report 2021

Nov 26, 2021

Aumento Capital VIII Corp. (A Capital Pool Company)

Financial Statements

For the Three and Nine Months Ended September 30, 2021

(In Canadian Dollars)

Aumento Capital VIII Corp. Unaudited Condensed Interim Statements of Financial Position As at September 30, 2021 and December 31, 2020 (in Canadian Dollars)

As at		September	December 31, 2020
		30, 2021
Assets
Cash held in trust	$	521,895	250,000
	$	521,895	250,000
Liabilities
Accrued liabilities	$	2,800	4,261
Shareholders' Equity
Share capital, net of issuance costs (Note 3)	$	630,988	247,500
Contributed surplus		111,037	-
Accumulated deficit		(222,930)	(1,761)
		519,095	245,739
	$	521,895	250,000

Qualifying Transaction – Note 6

Approved by the Board	David Danziger Director(Signed)	Paul Pathak Director(Signed)

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

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Aumento Capital VIII Corp. Unaudited Condensed Interim Statements of Loss and Comprehensive Loss For the Three Months Ended September 30, 2021

(in Canadian Dollars)

	For the three months	For the three months	For the nine months
	ended September 30,		ended September 30,
		2021	2021
Expenses
Professional fees	$	45,595	114,951
Listing fees		2,866	32,193
Stock-based compensation		-	74,025
Net loss and comprehensive loss	$	48,461	221,169
Net lossper share(basic and diluted)	$	0.02	0.12
Weighted average number of shares
outstanding (basic and diluted)
		2,000,000	1,824,176

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

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Aumento Capital VIII Corp. Unaudited Condensed Interim Statement of Changes in Cash Flows For the Nine Months Ended September 30, 2021

(in Canadian Dollars)

	Nine months ended September 30,
	2021
Cash flows from operating activities
Net loss for the period	$ (221,169)
Stock-based compensation	74,025
Change in accrued liabilities	(1,461)
Net cash used in operating activities	(148,605)
Cash flows from financing activities
Share subscription	500,000
Cash issuance costs	(79,500)
Net cash provided by financing activities	420,500
Net change in cash	271,895
Cash, beginning of period	250,000
Cash, ending of period	$ 521,895
Supplemental disclosure of cash flow information
Non-cash transaction: Agent Warrants	$37,012

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

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Aumento Capital VIII Corp. Unaudited Condensed Interim Statement of Changes in Shareholders’ Equity For the Nine Months Ended September 30, 2021

(in Canadian Dollars)

	Number		Share		Contributed	Accumulated		Shareholders’
	of Shares		Capital		Surplus	Deficit		Equity
Balance, January 1, 2021	1,000,000	$	247,500	$	-	$ (1,761)	$	245,739
Common shares issued	1,000,000		500,000	$	-	-		500,000
(Note 3)
Share issuance costs	-		(79,500)		-	-		(79,500)
(cash)
Share issuance costs			(37,012)		37,012	-		-
(warrants)
Stock option	-		-		74,025	-		74,025
compensation
Net loss for the period	-		-		-	(221,169)		(221,169)
Balance, September 30,
2021	2,000,000	$	630,988	$	111,037	(222,930)	$	519,095

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

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Aumento Capital VIII Corp. Notes to the Financial Statements For the Nine Months Ended September 30, 2021 (in Canadian Dollars)

1. INCORPORATION AND NATURE OF BUSINESS

Aumento Capital VIII Corp. (the "Corporation") was incorporated under the Ontario Business Corporations Act on November 20, 2020 and is a Capital Pool Company as defined in the Policy 2.4 of the TSX Venture Exchange (the “Exchange”) Corporate Finance Manual (the “Manual”). The principal business of the Corporation will be the identification and evaluation of assets or businesses with a view to completing a Qualifying Transaction ("QT"). The Corporation has not commenced commercial operations and has no assets other than cash held in trust. Given the nature of the activities, no separate segmented information is reported. The Corporation’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 proceeds raised from the issuance of share capital may only be used to identify and evaluate assets or businesses for future investment, with the exception that up to $3,000 per month may be used for reasonable general and administrative expenses of the Corporation. These restrictions apply until completion of a QT by the Corporation as defined under the policies of the Exchange Policy 2.4.

The head office and the registered head office of the Corporation is located at 77 King Street West, Suite 700, Toronto, Ontario, M5K 1G8.

On November 26, 2021 the Board of Directors approved the unaudited condensed interim financial statements for the three and nine months ended September 30, 2021.

The global outbreak of COVID-19 (coronavirus) has had a significant impact on businesses through the restrictions put in place by the Canadian, provincial and municipal governments regarding travel, business operations and isolation/quarantine orders. At this time, it is unknown the extent of the impact the COVID-19 outbreak may have on the Corporation as this will depend on future developments that are highly uncertain and that cannot be predicted with confidence. These uncertainties arise from the inability to predict the ultimate geographic spread of the disease, and the duration of the outbreak, including the duration of travel restrictions, business closures or disruptions, and quarantine/isolation measures that are currently, or may be put, in place by Canada and other countries to fight the virus.

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Aumento Capital VIII Corp. Notes to the Financial Statements For the Nine Months Ended September 30, 2021 (in Canadian Dollars)

2. SIGNIFICANT ACCOUNTING POLICIES

Statement of Compliance

These unaudited interim condensed financial statements have been prepared in accordance with International Accounting Standards (“IAS”) 34 ‘Interim Financial Reporting’ (“IAS 34”) using accounting policies consistent with the International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and Interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”).

These unaudited condensed interim financial statements have been prepared on an accrual basis and are based on historical costs, modified where applicable, by the measurement at fair value of selected non-current assets, financial assets, and financial liabilities. These unaudited condensed interim financial statements are presented in Canadian dollars, which is the corporation’s functional and presentation currency.

The accounting policies applied by the Corporation in these unaudited condensed interim financial statements are the same as those applied by the Corporation in the audited financial statements for the period ended December 31, 2020.

3. SHARE CAPITAL

Authorized - Unlimited common shares

	#		$
Balance, November 20, 2020		$	Nil
1,000,000 common shares issued (i)	1,000,000	$	250,000
Cost of issuance (cash)	-		(2,500)
Balance, December 31, 2020	1,000,000	$	247,500
1,000,000 common shares (ii)	1,000,000		500,000
Cost of issuance (cash)	-		(79,500)
Cost of agent warrants	-		(37,012)
Balance, September 30, 2021	2,000,000	$	630,988

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Aumento Capital VIII Corp. Notes to the Financial Statements For the Nine Months Ended September 30, 2021 (in Canadian Dollars)

3. SHARE CAPITAL - continued

(i) Escrowed Shares

During the period ended December 31, 2020, the Corporation issued 1,000,000 common shares at $0.25 per share for gross proceeds of $250,000. Share issuance costs of $2,500 were associated with this issuance.

All common shares of the Corporation acquired in the secondary market prior to the completion of a Qualifying Transaction by non-arms length parties, as defined in the policies of the Exchange, are required to be deposited in escrow. Subject to certain permitted exemptions, all securities of the Corporation held by principals of the resulting issuer will also be subject to escrow.

As at September 30, 2021, 1,000,000 Common Shares are being held in escrow pursuant to the requirements of the Exchange.

(ii) Initial Public Offering

On February 17, 2021, the Corporation completed its Initial Public Offering (“IPO”) of 1,000,000 common shares at $0.50 per share for total proceeds of $500,000. The Corporation paid a commission of 10% of gross proceeds to Canaccord Genuity Corp. (the “Agent”), and granted the Agent warrants to acquire 10% of the common shares issued in the offering exercisable for a period ending 60 months from the date the Corporation’s common share are listed on the TSX Venture Exchange, exercisable at $0.50 per share. The Corporation also paid a corporate finance fee and reimbursed the Agent for legal fees and other reasonable expenses incurred pursuant to the Offering. Cash issuance costs of $79,500 were associated with the issuances and the value attributed to warrants granted to the Agent were $37,012.

Options

The Corporation has established a stock option plan for its directors, officers and consultants under which the Corporation may grant options from time to time to acquire a maximum of 10% of the issued and outstanding Common Shares. The exercise price of each option granted under the plan shall be determined by the Board of Directors.

Options may be granted for a maximum term of ten years from the date of the grant. They are nontransferable and are exercisable as determined by the Board of Directors when the option is granted. Options expire within 90 days of termination of employment or holding office as director or officer of the Corporation (other than in connection with the completion of the QT – in which case 1 year) and, in the case of death, expire within a maximum period of one year after such death, subject to the expiry date of the option.

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Aumento Capital VIII Corp. Notes to the Financial Statements For the Nine Months Ended September 30, 2021 (in Canadian Dollars)

3. SHARE CAPITAL - continued

Options – continued

Any options granted, and any shares issued upon exercise of options, prior to the Corporation’s completion of a QT will be subject to escrow restrictions. In addition to the foregoing, any options with an exercise price less than the offering price per Common Share in the IPO will be subject to the same escrow release schedule as the Common Shares issued for a price less than the offering price per Common Share in the IPO.

The following table reflects the continuity of stock options and agent warrants:

	Number of Stock
	Options /Agent	Weighted Average
	Warrants	Exercise Price($)
Balance, January 1, 2021	-	-
Granted to directors and officers (i)	200,000	$0.50
Granted to agent(ii)	100,000	$0.50
Balance, September 30, 2021	300,000	$0.50

i. On February 17, 2021, the Corporation granted 200,000 stock options to directors and officers, which vested immediately upon completion of the IPO. The options are exercisable within five years from the date of grant at an exercise price of $0.50 per share. These options were valued on the date of issue using the Black-Scholes option pricing model with the following assumptions: dividend yield 0%, discount rate of 0.58%, expected volatility of 100% and an expected life of five years. The value attributed to these options was $74,025.

ii. On February 17, 2021, the Corporation granted 100,000 warrants to the Agent, which are exercisable within 60 months from the date the Corporation’s common share are listed on the TSX Venture Exchange at an exercise price of $0.50 per share. These warrants were valued on the date of issue using the Black-Scholes option pricing model with the following assumptions: dividend yield 0%, risk-free rate of 0.58%, expected volatility of 100% and an expected life of five years. The value attributed to these warrants was $37,012.

The following table reflects the actual stock options and agent warrants issued and outstanding as of September 30, 2021:

		Weighted Average	Number of Stock	Number of Stock
		Remaining	Options / Agent	Options / Agent
		Contractual Life	Warrants	Warrants Vested
Expiry Date	Exercise Price	(Years)	Outstanding	(Exercisable)
February 17, 2026	$0.50	4.39	200,000	200,000
February17,2026	$0.50	4.39	100,000	100,000
	$0.50	4.39	300,000	300,000

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Aumento Capital VIII Corp. Notes to the Financial Statements For the Nine Months Ended September 30, 2021 (in Canadian Dollars)

4. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

Capital Management

The Corporation's objective when managing capital is to maintain its ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders. The Corporation includes equity, comprised of share capital and accumulated deficit in the definition of capital.

The Corporation's primary objective with respect to its capital management is to ensure that it has sufficient cash resources to fund the identification and evaluation of potential acquisitions. To secure the additional capital necessary to pursue these plans, the Corporation may attempt to raise additional funds through the issuance of equity or by securing strategic partners.

The proceeds raised from the issuance of share capital may only be used to identify and evaluate assets or businesses for future investment, with the exception that up to $3,000 per month may be used for reasonable general and administrative expenses of the Corporation. These restrictions apply until completion of a QT by the Corporation as defined under the policies of the Exchange Policy 2.4.

Risk Disclosures and Fair Values

The Corporation's financial instruments, consisting of cash held in trust and accrued liabilities approximate fair value due to the relatively short-term maturity of the instruments. It is management’s opinion that the Corporation is not exposed to significant interest, currency or credit risks arising from these financial instruments.

5. RELATED PARTY TRANSACTIONS

During the three and nine months ended September 30, 2021, the corporation incurred stockbased compensation expense related to directors and officers valued at $nil and $74,025.

In addition, the Corporation incurred legal fees of $102,129 for the nine months ended September 30, 2021 for services provided by a law firm whose partner is a director of the Corporation. As at September 30, 2021, $2,800 is included in accrued liabilities for these services.

There were no other transactions with related parties and no other remuneration paid to key management personnel during the three and nine months ended September 30, 2021.

6. QUALIFYING TRANSACTION

The Corporation has entered into an amalgamation agreement with Eddy Smart Home Solutions Inc., and 2865357 Ontario Inc. (a wholly-owned subsidiary of the corporation), which will result in the reverse take-over of the Corporation by Eddy Smart Home Solutions Inc. It is intended that the transaction will constitute the “Qualifying Transaction” of the Corporation, as such term is defined in the policies of the Exchange.

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