Highmark Interactive Inc. — Interim / Quarterly Report 2021

Nov 19, 2021

Unaudited condensed interim consolidated financial statements of

STORMCROW HOLDINGS CORP.

A Capital Pool Corporation

For the three and nine months ended September 30, 2021 and 2020

STORMCROW HOLDINGS CORP.

A Capital Pool Corporation

Condensed interim consolidated statements of financial position

(In Canadian dollars) (Unaudited)

As at

		September 30,	September 30,	December 31,	December 31,
	Note		2021		2020
Assets
Current assets
Cash		$	1,837,305	$	1,959,132
Total assets		**$ **	1,837,305	$	1,959,132
Liabilities and Shareholders'	Equity
Current liabilities
Accountspayable and accrued liabilities	5, 8	$	42,615	$	32,347
Total current liabilities			42,615		32,347
Shareholders' equity
Share capital	4		1,939,275		1,939,275
Share option reserve	4		194,107		194,107
Warrant reserve	4		105,271		105,271
Deficit			(443,963)		(311,868)
Total shareholders’ equity			1,794,690		1,926,785
Total liabilities and shareholders’ equity		**$ **	1,837,305	$	1,959,132
Nature of operations and going concern	1
Subsequent events	11

Approved by the Board of Directors:

(Signed)“Sanjeev Sharma” Chief Executive Officer and Director	(Signed)“Chris Schnarr”
	Director

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements. - 1 -

STORMCROW HOLDINGS CORP.

A Capital Pool Corporation

Condensed interim consolidated statements of loss and comprehensive loss

(In Canadian dollars) (Unaudited)

			Three months ended	Three months ended	Three months ended		Nine months ended	Nine months ended	Nine months ended
			September 30,				September 30,
	Note		2021		2020		2021		2020
Expenses
Share-based compensation	4	$	-	$	194,107	$	-	$	194,107
Qualifying transaction costs	8		34,776		-		84,126		-
Professional fees	8		7,559		15,952		23,064		29,302
Filing costs			2,183		32,279		23,637		32,844
General and administrative			642		227		1,268		669
			45,160		242,565		132,095		256,922
Net loss and comprehensive loss for theperiod		**$ **	(45,160)	$	(242,565)	**$ **	(132,095)	$	(256,922)
Net loss per share
Basic and diluted		$	(0.00)	$	(0.02)	$	(0.01)	$	(0.07)
Weighted average number of shares outstanding(1)
Basic and diluted	4,11		3,333,333		289,855		3,333,333		97,324

(1) For the periods presented, the calculation of weighted average number of common shares outstanding excluded escrowed shares, options and warrants.

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements. - 2 -

STORMCROW HOLDINGS CORP.

A Capital Pool Corporation

Condensed interim consolidated statements of changes in shareholders' equity

(In Canadian dollars)

			Share			Total
	Shares	Share	option	Warrant		shareholders’
	issued #	Capital $	reserve $	Reserve $	Deficit $	equity $
Balance as at December 31,2019	1	-	-	-	(4,388)	(4,388)
Seed common shares issued for cash	6,100,001	305,000	-	-	-	305,000
Common shares issued for cash	20,000,000	2,000,000	-	-	-	2,000,000
Share issuance costs	-	(364,757)	-	105,271	-	(259,486)
Share-based compensation	-	-	194,107	-	-	194,107
Net loss for theperiod	-	-	-	-	(256,922)	(256,922)
Balance as at September 30,2020	26,100,001	1,940,243	194,107	105,271	(256,922)	1,978,311
Balance as at December 31, 2020	26,100,001	1,939,275	194,107	105,271	(311,868)	1,926,785
Net loss for theperiod	-	-	-	-	(132,095)	(132,095)
Balance as at September 30, 2021	26,100,001	1,939,275	194,107	105,271	(443,963)	1,794,690

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements. - 3 -

STORMCROW HOLDINGS CORP.

A Capital Pool Corporation

Condensed interim consolidated statements of cash flows

(In Canadian dollars) (Unaudited)

For the nine months ended September 30,

	Note		2021		2020
Cash flows from operating activities
Net loss for the period		$	(132,095)	$	(256,922)
Change in non-cash operating assets and liabilities
Share-based compensation			-		194,107
Accounts payable and accrued liabilities			10,268		54,905
Cash used in operating activities			(121,827)		(7,910)
Financing activities
Share capital	4		-		2,155,000
Share issuance costs	4		-		(259,486)
Cash provided by financing activities			-		1,895,514
(Decrease) increase in cash			(121,827)		133,257
Cash, beginning of period			1,959,132		149,751
Cash, end of period		$	1,837,305	$	283,008
Supplemental non-cash information:
Broker’s warrants	4	$	-	$	105,271
Change in subscription receipts payable	4	$	-	$	150,000

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements. - 4 -

STORMCROW HOLDINGS CORP.

A Capital Pool Corporation

Notes to the condensed interim consolidated financial statements

( Unaudited, in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

1. Nature of operations and going concern

Stormcrow Holdings Corp. (the “Company” or “Stormcrow”) was incorporated November 6, 2019 pursuant to the provisions of the Business Corporations Act (Ontario). The Company’s registered head office is located at 10 Kingsbridge Garden Circle, Suite 700, Mississauga, Ontario, Canada L5R 3K6. The Company’s shares are listed for trading on the TSX Venture Exchange under the symbol “CROW.P”.

The Company is carrying on business as a Capital Pool Corporation (“CPC”), as such term is defined in TSX Venture Exchange Inc. (the “Exchange”) Policy 2.4 – Capital Pool Companies (“CPC Policy 2.4”). As at September 30, 2021, the Company had no business operations.

The Company’s principal purpose is the identification, evaluation and acquisition of assets, properties or businesses or participation therein subject, in certain cases, to shareholder approval and acceptance by the Exchange, for a proposed “Qualifying Transaction” as such term is defined in the Exchange CPC Policy 2.4.

Where a Qualifying Transaction is warranted, additional funding may be required. The ability of the Company to fund its potential future operations and commitments is dependent upon the ability of the Company to obtain additional financing.

Principles of consolidation

The consolidated financial statements comprise the financial statements of the Company and its wholly-owned subsidiary, 2845009 Ontario Inc., which was incorporated on June 3, 2021.

Subsidiaries consist of entities over which the Company is exposed to, or has rights to, variable returns as well as the ability to affect those returns through the power to direct the relevant activities of the entity. Subsidiaries are fully consolidated from the date control is transferred to the Company and are de-consolidated from the date control ceases.

Annual General and Special Meeting of shareholders

On August 4, 2021, the Company held its Annual General and Special Meeting of shareholders (“AGSM”) to approve, among other things, certain proposed items in connection with the Qualifying Transaction, as summarized in the sub-section entitled “Share consolidation and name change” below.

On September 17, 2021, the Company held a Special Meeting of Shareholders (“Special Meeting”), at which time shareholders voted, among other things, to approve the adoption of new CPC Policy regulations which came into effect January 1, 2021. The updated regulations are reflected in these financial statements.

5

STORMCROW HOLDINGS CORP.

A Capital Pool Corporation

Notes to the condensed interim consolidated financial statements

( Unaudited, in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

1. Nature of operations and going concern (continued)

Qualifying Transaction and share trading halt

On November 4, 2021, the Company entered into an acquisition agreement (the “Agreement”) with Highmark Innovations Inc. (“Highmark”), a software developer for medical diagnostics doing business as Highmark Interactive (the “Transaction”). The Agreement outlines the principal terms and conditions for the Transaction, which will result in a reverse takeover of Stormcrow by Highmark and its shareholders.

Trading in the common shares of the Company was halted pursuant to the policies of the Exchange. Trading will remain halted until, among other things, the Company completes certain regulatory filings in connection with the Qualifying Transaction with the Exchange and the Exchange has completed certain matters it considers necessary or advisable. Closing of the Transaction remained subject to customary closing conditions for a transaction of this nature (note 11).

Share consolidation and name change

At the Annual Meeting of Shareholders held on August 4, 2021, and in connection with the Qualifying Transaction, shareholders approved (i) a Company name change, (ii) the consolidation of issued and outstanding common shares of the Company, and (iii) a change of address of its registered office. These resolutions remained conditional upon completion of the proposed Qualifying Transaction with Highmark (refer to note 11).

Novel Coronavirus (“COVID-19”)

The Company’s operations could be significantly adversely affected by the effects of a widespread global outbreak of a respiratory illness caused by COVID-19. The Company cannot accurately predict the impact COVID-19 will have on its operations and the ability of others to meet their obligations with the Company, including uncertainties relating to the duration of the outbreak and the length of travel and quarantine restrictions imposed by governments of affected countries. In addition, the health crisis could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could further affect the Company’s operations and ability to finance its operations and complete a Qualifying Transaction.

Going concern

These consolidated financial statements were prepared on a going-concern basis of accounting, which assumes that the Company will continue operations for the foreseeable future and be able to realize the carrying value of its assets and discharge its liabilities and commitments in the normal course of business. The Company does not generate revenue from operations and incurred a net loss of $132,095 for the nine months ended September 30, 2021 (September 30, 2020 - $256,922). However, the Company believes that its working capital as at September 30, 2021 totaling $1,794,690 will provide the Company with sufficient cash resources to meet its obligations for at least twelve months from the end of the reporting period. As the Company has no revenues, its ability to continue as a going concern is dependent on its ability to obtain additional financing and complete a Qualifying Transaction. These consolidated financial statements do not reflect adjustments that would be necessary if the going concern assumption was not appropriate. These adjustments could be material.

6

STORMCROW HOLDINGS CORP.

A Capital Pool Corporation

Notes to the condensed interim consolidated financial statements

( Unaudited, in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

2. Basis of presentation

Statement of compliance

These unaudited condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standard 34, Interim Financial Reporting (“IAS 34”), using accounting policies consistent with International Financial Reporting Standards (“IFRS”).

Accounting policies and methods of their application followed in the preparation of these unaudited condensed interim consolidated financial statements are consistent with those used in the audited financial statements for the year ended December 31, 2020, which are available under the Company’s profile on www.SEDAR.com.

Basis of measurement

These consolidated financial statements have been prepared on a historical cost basis and on an accrual basis except for cash flow information. The financial statements are presented in Canadian dollars, which is the Company’s functional currency.

These consolidated financial statements were authorized for issue by the Board of Directors on November 16, 2021.

3. Cash restriction

There is a restriction on the use of proceeds realized from the sale of all securities issued by the Company as a CPC. The gross proceeds raised from the Company’s Initial Public Offering (the “Offering”) (note 4) may only be used to identify and evaluate assets or businesses and obtain shareholder approval for the proposed Qualifying Transaction (“Transaction Expenses”) with the exception that general and administrative expenses are capped at $3,000 per month, including for professional accounting, advisory, and legal services expenses, and are not time limited.

4. Share capital

Authorized

Unlimited common shares with no par value

Issued

Issued
	Number of
	Common Shares		Amount
Balance as at December 31, 2019	1	$	-
Seed share issuance	6,100,000		305,000
Offering share issuance	20,000,000		2,000,000
Share issuance costs	-		(365,725)
Balance as at December 31, 2020 and September 30, 2021	26,100,001	$	1,939,275

7

STORMCROW HOLDINGS CORP.

A Capital Pool Corporation

Notes to the condensed interim consolidated financial statements

( Unaudited, in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

4. Share capital (continued)

Seed share issuance

On May 27, 2020, the Company issued an aggregate of 6,100,000 seed common shares to the directors and officers of the Company at a price of $0.05 per share for gross proceeds of $305,000. Share subscription proceeds totaling $150,000 were received in the quarter ended December 31, 2019, and the balance of $155,000 was received during the quarter ended June 30, 2020.

Initial public offering

On September 23, 2020, the Company completed the Offering pursuant to which it issued 20,000,000 common shares at $0.10 per share, for aggregate proceeds of $2,000,000.

Stock option plan (“Option Plan”)

The Option Plan provides that the Board of Directors of the Company may from time to time, in its discretion and in accordance with the Exchange requirements, grant to directors, officers, consultants and employees of the Company, options to acquire a maximum number of common shares equal to 10% of the total issued and outstanding common shares of the Company, exercisable for a period of up to ten years from the date of grant.

The Option Plan was approved by the Board of Directors and adopted by the Company on August 21, 2020.

Stock options issued

On September 23, 2020, the Company granted stock options to officers and directors of the Company as follows:

follows:
	Number of	Weighted
	stock options issued		average
	and exercisable	exerciseprice
Balance as at December 31, 2019	-	$	-
Granted, September 23, 2020	2,610,000		0.10
Balance as at December 31, 2020 and September 30, 2021	2,610,000	$	0.10

These options vested immediately upon grant. The weighted average remaining life of the options outstanding as at September 30, 2021 was 3.98 years.

Shares subject to escrow

The release of shares subject to escrow were amended, as approved at the Special Meeting, as follows:

All issued and outstanding seed shares are subject to a uniform 18-month escrow release schedule following the Qualifying Transaction, and will be released as to 25% on the date of the final Qualifying Transaction Exchange bulletin and an additional 25% on each of the dates that are 6, 12 and 18 months thereafter, pursuant to the terms of an Escrow Agreement dated as of August 21, 2020 between the Company, TSX Trust Company, and the shareholders of the Company. Subject to certain permitted exemptions, all securities of the Company held by principals of the resulting issuer will also be escrowed.

All common shares acquired on exercise of stock options granted to directors and officers prior to completion of a Qualifying Transaction must also be deposited and held in escrow pursuant to the requirements of the Exchange.

8

STORMCROW HOLDINGS CORP.

A Capital Pool Corporation

Notes to the condensed interim consolidated financial statements

( Unaudited, in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

4. Share capital (continued)

Shares subject to escrow (continued)

All common shares of the Company acquired in the secondary market prior to the completion of a Qualifying Transaction by a Control Person, as defined in the policies of the Exchange, are required to be deposited and held in escrow. The seed common shares are considered contingently issuable until the Company completes a Qualifying Transaction and, accordingly, they are not considered to be outstanding shares for purposes of loss per share calculations.

Compensation warrants issued

Compensation warrants issued
	Number of	Weighted
	compensation		average
	warrants issued	exerciseprice
Balance as at December 31, 2019	-	$	-
Granted, September 23, 2020	2,000,000		0.10
Balance as at December 31, 2020 and September 30, 2021	2,000,000	$	0.10

These compensation warrants were granted to the agent of the Offering (the “Agent”) and vested immediately upon grant. The weighted average remaining life of the compensation warrants outstanding as at September 30, 2021, was 0.98 years.

Pursuant to CPC Policy 2.4, where the Agent receives a warrant or the right to subscribe for a certain number of shares as consideration for acting as Agent, 50% of the warrants exercised or 50% of the shares held pursuant to that right may be sold prior to completion of the Qualifying Transaction. The remaining 50% may only be sold after completion of the Qualifying Transaction.

5. Accounts payable and accrued liabilities

The Company’s accounts payable and accrued liabilities consist of the following:

	September 30,	September 30,	December 31,	December 31,
		2021		2020
Accounts payable	$	7,939	$	324
Accrued liabilities		34,676		32,023
Total	$	42,615	$	32,347

6. Net loss per share

The net loss per common share was based on the loss attributable to common shareholders and the weighted average number of common shares outstanding. The weighted average number of basic and diluted shares outstanding for all periods presented in the statements of loss and comprehensive loss have been adjusted in order to reflect the effect of the share consolidation that was completed on November 5, 2021 (note 11).

The weighted average shares outstanding does not include 6,100,001 pre-consolidation escrowed shares as they are contingently returnable (1,016,667 post-consolidation shares).

Diluted loss per share does not include the effect of 2,610,000 share options (435,000 post-consolidation) and 1,000,000 or 50% of the compensation warrants outstanding as they are held in escrow until the completion of a Qualifying Transaction (166,667 post-consolidation). The calculation also excluded the effect of the remaining 1,000,000 compensation warrants (166,667 post-consolidation) as they are anti-dilutive.

9

STORMCROW HOLDINGS CORP.

A Capital Pool Corporation

Notes to the condensed interim consolidated financial statements

( Unaudited, in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

7. Income taxes

The Company has approximately $317,000 of non-capital losses in Canada, which, under certain circumstances, can be used to reduce the taxable income of future years. These losses expire between 2039 and 2041.

Deferred tax assets have not been recognized because it is not probable that future taxable profit will be available against which the Company can use the benefits.

8. 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.

For the three and nine months ended September 30, 2021, Chitiz Pathak LLP, a law firm of which an officer of the Company is a Partner, provided legal services estimated at $28,287 and $72,986 respectively of which $25,967 and $69,663 respectively was allocated to Qualifying Transaction costs and the balance of $2,319 and $4,162 respectively was expensed to professional and filing fees. For the three and nine months ended September 30, 2020, $7,161 and $7,161 was expensed to the Offering expenses respectively, and $2,166 and $6,584 respectively was expensed to professional and filing fees.

As at September 30, 2021, $28,287 remained payable (December 31, 2020 - $15,163) and is included in accounts payable and accrued liabilities on the statement of financial position. The balance payable is unsecured, non-interest bearing and due on demand.

Refer also to note 4.

9. 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 remain a CPC and 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. The Company defines capital as total shareholders’ equity. The Company is not subject to any externally imposed capital requirements other than the cash restriction disclosed in Note 3. There were no significant changes in the Company’s approach to capital management during the periods ended September 30, 2021 and December 31, 2020.

10

STORMCROW HOLDINGS CORP.

A Capital Pool Corporation

Notes to the condensed interim consolidated financial statements

( Unaudited, in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

10. Financial instruments and risk management

The Company's activities may expose it to a variety of financial risks: fair values, credit risk, liquidity risk and market risk (including interest rate risk). The Board of Directors provides regular guidance for overall risk management.

Fair values

As at September 30, 2021, 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 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 Company’s completion of a Qualifying Transaction, and to limit exposure to credit and market risks.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its obligations. The Company is exposed to credit risk through its cash balance which is held at a Canadian financial institution. 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. None of the Company’s financial instruments bear interest (note 11). Therefore, management believes the Company had no significant exposure to interest rate risk through its financial instruments as at September 30, 2021 and December 31, 2020.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its obligations associated with financial liabilities. The Company has a planning and budgeting process in place by which it anticipates and determines the funds required to support normal operation requirements. The Company coordinates this planning and budgeting process with its financing activities through the capital management process described in note 9, in normal circumstances. The Company’s accounts payable and accrued liabilities have contractual maturities of less than 30 days and have normal trade terms.

11

STORMCROW HOLDINGS CORP.

A Capital Pool Corporation

Notes to the condensed interim consolidated financial statements

( Unaudited, in Canadian dollars) For the three and nine months ended September 30, 2021 and 2020

11. Subsequent events

Loan to Highmark

On October 15, 2021, the Company provided a loan to Highmark in the amount of $350,000 (the “Target Loan”). The Target Loan bears interest at 18.6% per annum, calculated daily, and principal and interest shall be repaid by Highmark to the Company on demand.

The Target Loan is intended to provide Highmark with working capital as the parties progress towards completion of the Qualifying Transaction. In accordance with Exchange policies, the Target Loan is secured and, in the event the Qualifying Transaction is not completed, will be repaid in full to the Company.

Share consolidation

On November 5, 2021, the Company completed the consolidation of its common shares on the basis of one post-consolidation common share for every six pre-consolidation common shares. This also includes stock options and warrants. Any quantity relating to these instruments during 2021 and 2020 or any per unit price such as exercise prices disclosed throughout the financial statements have not been retrospectively adjusted for the share consolidation except for the weighted average number of shares outstanding used in the calculation of basic and diluted loss per share, which have been retrospectively adjusted to give effect to the share consolidation as required by IAS 33, Earnings per share. Consequently, the basic and diluted loss per share for the periods presented have been retrospectively adjusted.

The effect of the share consolidation on the issued and outstanding number of common shares, stock options and warrants is as follows:

	Balance before consolidation	Balance after consolidation
Common shares	26,100,001	4,350,000
Stock options	2,610,000	435,000
Warrants	2,000,000	333,333

Closing of Qualifying Transaction

The Qualifying Transaction successfully closed on November 11, 2021.

12