Spacefy Inc. — Audit Report / Information 2024

May 7, 2025

SPACEFY INC.

Financial Statements

For the years ended December 31, 2024 and December 31, 2023

(Expressed in Canadian Dollars)

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Independent Auditor's Report

MNP

To the Shareholders of Spacefy Inc.:

Opinion

We have audited the financial statements of Spacefy Inc. (the "Company"), which comprise the statements of financial position as at December 31, 2024 and December 31, 2023, and the statements of loss and comprehensive loss, changes in deficiency and cash flows for the years then ended, and notes to the financial statements, including a summary of material accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2024 and December 31, 2023, and its financial performance and its cash flows for the years then ended in accordance with IFRS® Accounting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

We conducted our audits in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audits of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 in the financial statements, which indicates that the Company incurred a net loss during the year ended December 31, 2024 and, as of that date, the Company had a working capital deficiency and an accumulated deficit. As stated in Note 1, these events or conditions, along with other matters as set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Except for the matter described in the Material Uncertainty Related to Going Concern section, we have determined that there are no other key audit matters to communicate in our report.

MNP LLP

50 Burnhamthorpe Road West, Suite 900, Mississauga ON, L5B 3C2

T: 416.626.6000 F: 416.626.8650

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Other Information

Management is responsible for the other information. The other information comprises Management's Discussion and Analysis.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audits of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audits or otherwise appears to be materially misstated. We obtained Management's Discussion and Analysis prior to the date of this auditor's report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS® Accounting Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.

50 Burnhamthorpe Road West, Suite 900, Mississauga, Ontario, L5B 3C2
T: 416.626.6000 F: 416.626.8650 MNP.ca
MNP

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• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audits and significant audit findings, including any significant deficiencies in internal control that we identify during our audits.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor's report is Blair Michael Mabee.

Mississauga, Ontario
May 7, 2025

MNP LLP
Chartered Professional Accountants
Licensed Public Accountants

50 Burnhamthorpe Road West, Suite 900, Mississauga, Ontario, L5B 3C2
T: 416.626.6000 F: 416.626.8650 MNP.ca
MNP

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SPACEFY INC.
Statements of Financial Position
As at December 31, 2024 and December 31, 2023
(Expressed in Canadian Dollars)

	Notes	2024	2023
ASSETS
Current assets
Cash and cash equivalents		$ 3,503	$ 8,263
Accounts receivable	4	9,429	12,464
Total Assets		$ 12,932	$ 20,727
LIABILITIES AND SHAREHOLDERS’ DEFICIENCY
Current liabilities
Accounts payable and accrued liabilities	6	$ 329,273	$ 325,225
Loan payable	5	-	60,000
Loans from related parties	6	281,941	261,572
		611,214	646,797
Long-term liabilities
Loan payable	5	61,180	-
Total Liabilities		672,394	646,797
Shareholders’ deficiency
Share capital	8	3,140,982	3,140,982
Contributed surplus		1,998,259	1,998,259
Deficit		(5,798,703)	(5,765,311)
		(659,462)	(626,070)
Total Liabilities and Shareholders’ Deficiency		$ 12,932	$ 20,727

Going concern (Note 1)
Commitments and contingencies (Note 7)

See accompanying notes to the financial statements

Approved on behalf of the Board of Directors:

“Michael Bradley
Director

“John Anderson
Director

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SPACEFY INC.
Statements of Loss and Comprehensive Loss
For the years ended December 31, 2024 and December 31, 2023
(Expressed in Canadian Dollars)

	Notes	2024	2023
REVENUE
Commission revenue		$ -	$ 517
Other		-	8
		-	525
EXPENSES
General and administrative		2,532	11,666
Personnel and consulting fees	6	57,000	36,000
Professional fees		14,975	11,004
Interest expense		1,180	-
Regulatory		5,141	25,654
		80,827	84,324
Net loss before other items		(80,827)	(83,799)
Gain on write off of aged accounts payable		47,436	-
Net loss and comprehensive loss		$ (33,392)	$ (83,799)
Loss per share
Basic	9	$ (0.00)	$ (0.00)
Diluted	9	$ (0.00)	$ (0.00)

See accompanying notes to the financial statements

2

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SPACEFY INC.

Statements of Changes in Deficiency

For the years ended December 31, 2024 and December 31, 2023

(Expressed in Canadian Dollars)

| | Share Capital
(Note 8)
$ | Contributed
Surplus
$ | Deficit
$ | Total
$ |
| --- | --- | --- | --- | --- |
| Balance at December 31, 2022 | 3,140,982 | 1,998,259 | (5,681,512) | (542,271) |
| Net loss for the year | - | - | (83,799) | (83,799) |
| Balance at December 31, 2023 | 3,140,982 | 1,998,259 | (5,765,311) | (626,070) |
| Balance at December 31, 2023 | 3,140,982 | 1,998,259 | (5,765,311) | (626,070) |
| Net loss for the year | - | - | (33,392) | (33,392) |
| Balance at December 31, 2024 | 3,140,982 | 1,998,259 | (5,798,703) | (659,462) |

See accompanying notes to the financial statements

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SPACEFY INC.

Statements of Cash Flows

For the years ended December 31, 2024 and December 31, 2023

(Expressed in Canadian Dollars)

	2024	2023
Cash flows used in operations
Net loss for the year	$ (33,392)	$ (83,799)
Items not affecting cash:
Accrued interest	1,180	-
Changes in non-cash working capital
Accounts receivable	3,035	(2,815)
Prepaid expenses	-	5,141
Accounts payable and accrued liabilities	4,048	27,141
	(25,129)	(54,331)
Cash flows from financing activities
Proceeds from loans from related parties (note 6)	20,369	54,574
	20,369	54,574
Net change in cash and cash equivalents	(4,760)	242
Cash and cash equivalents – beginning of year	8,263	8,021
Cash and cash equivalents – end of year	$ 3,503	$ 8,263

See accompanying notes to the financial statements

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SPACEFY INC.

Notes to Financial Statements for the years ended December 31, 2024 and December 31, 2023 (Expressed in Canadian Dollars)

1. CORPORATE INFORMATION AND GOING CONCERN

Spacefy Inc. (the "Company" or "Spacefy") is an online marketplace that connects people in creative industries, such as photographers, filmmakers, musicians, artists, ad agencies, and event planners, with locations to execute their projects. The Company was inactive in 2024, and searching for synergistic opportunities.

The Company was incorporated on August 25, 2014 under the laws and regulations of the Ontario Business Corporations Act. On November 29, 2018, the Company completed an initial public offering ("IPO") and commenced trading on the Canadian Securities Exchange under the symbol SPFY. The Company's head office address is 1 University Av., 3rd Floor, Toronto, Ontario, M5J 2P1.

The financial statements were authorized for issue on May 7, 2025 by the directors of the Company.

Going concern

These financial statements have been prepared assuming the Company will continue as a going concern. The going concern basis of presentation assumes the Company will continue in operation for the foreseeable future and be able to realize its assets and discharge its liabilities and commitments in the normal course of business. However, the Company has incurred a net loss of $33,392 (2023 - $83,799) during 2024 and, as of that date, had a working capital deficiency of $659,462 (December 31, 2023 - $626,070) and an accumulated deficit of $5,798,703 (December 31, 2023 - $5,765,311). The Company did not conduct significant operations during the year. As a result, material uncertainty exists that may cast significant doubt about the Company's ability to continue as a going concern.

These financial statements have been prepared on the basis of accounting principles applicable to a going concern. Accordingly, they do not give effect to adjustments that would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and liquidate its liabilities in other than the normal course of business and at amounts different from those in the accompanying financial statements. Such adjustments could be material.

The Company will have to raise funds to continue operations. Should the Company not be able to continue to obtain the necessary financing, to fund operations, the Company's ability to continue as a going concern will be compromised. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern.

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SPACEFY INC.

Notes to Financial Statements for the years ended December 31, 2024 and December 31, 2023 (Expressed in Canadian Dollars)

2. BASIS OF PRESENTATION

a) Basis of Presentation

These financial statements are prepared on a going concern basis and have been presented in Canadian dollars, the functional currency of the Company.

These financial statements have been prepared in accordance with IFRS® Accounting Standards issued by the International Accounting Standards Board (“IASB”) and IFRIC® Interpretations of the IFRS Interpretations Committee

These financial statements have been prepared on the historical cost basis, with the exception of items that IFRS requires to be carried at fair value, as explained in the accounting policies set out in Note 3.

b) Accounting judgments and use of estimates:

The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenue and expenses. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimate is revised if the revision affects only that year, or in the year of the revision and future years if the revision affects both current and future years. Although these estimates are based on management’s best knowledge of the current events and actions that the Company may undertake in the future, actual results may differ from these estimates.

3. MATERIAL ACCOUNTING POLICIES

a) Cash and cash equivalents

Cash and cash equivalents comprise of cash on hand, deposits and guaranteed investment certificates that can be readily converted to cash. As at December 31, 2024, the Company had cash held in a trust account without any restrictions of $2,670 (December 31, 2023 - $6,993).

b) Income taxes

Income tax expense comprises current and deferred income tax. Income tax expense is recognized in profit or loss except to the extent that it relates to items recognized directly in shareholders’ equity. Current income tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to income tax payable in respect of previous years.

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit or loss. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates that have been enacted or substantively enacted by the end of the reporting period. They are offset only when they arise in the same legal entity and jurisdiction.

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SPACEFY INC.

Notes to Financial Statements for the years ended December 31, 2024 and December 31, 2023

(Expressed in Canadian Dollars)

3. MATERIAL ACCOUNTING POLICIES (continued)

c) Financial Instruments

(i) Classification and Measurement

Financial assets and financial liabilities are initially measured at fair value and are subsequently accounted for based on their classification as described below. The classification depends on the purpose for which the financial instruments were acquired and their characteristics. Except in very limited circumstances, the classification is not changed subsequent to initial recognition.

Financial Assets

All financial assets are initially recorded at fair value and designated upon inception into one of the following categories: amortized cost, fair value through profit or loss, or fair value through other comprehensive income.

Amortized cost

Financial assets are measured at amortized cost if both the following criteria are met and the financial assets are not designated as at FVTPL: 1) the object of the Company’s business model for these financial assets is to collect their contractual cash flows; and 2) the asset’s contractual cash flows represent "solely payments of principal and interest".

The Company’s financial assets measured at amortized cost comprise cash and cash equivalents and accounts receivable.

Due to their short-term nature, the carrying value of cash and cash equivalents and accounts receivable approximates their fair value.

Financial Liabilities at Fair Value Through Profit or Loss (FVTPL)

Financial liabilities that are incurred with the intention of generating profits in the near term are classified as fair value through profit or loss. Financial liabilities classified as FVTPL include derivative liabilities that are not accounted for as hedging instruments, obligations to deliver financial assets borrowed by a short seller and financial liabilities that are part of a portfolio of identified financial instruments that are managed together with the intention of generating profits in the near term. These instruments are accounted for at fair value with the change in the fair value recognized in the statement of comprehensive loss during the period. Attributable transaction costs are recognized in the statement of comprehensive loss when incurred. The Company does not have any financial liabilities classified as fair value through profit or loss.

Other Financial Liabilities

Other liabilities are accounted for at amortized cost using the effective interest rate method. Accounts payable and accrued liabilities, loan payable and loans from related parties are classified as other financial liabilities. Transaction costs are included in the underlying balance.

(ii) Determination of Fair Value

The fair value of a financial instrument on initial recognition is the transaction price, which is the fair value of the consideration given or received. Subsequent to initial recognition, fair value is determined by management using available market information or other valuation methodologies.

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SPACEFY INC.

Notes to Financial Statements for the years ended December 31, 2024 and December 31, 2023

(Expressed in Canadian Dollars)

3. MATERIAL ACCOUNTING POLICIES (continued)

c) Financial Instruments (continued)

(iii) Fair Value Hierarchy

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1) and the lowest priority to unobservable inputs (level 3).

The three levels of the fair value hierarchy are as follows:

• Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities;
• Level 2: Inputs other than quoted prices included in level 1 that are observable for the asset or liability either directly or indirectly;
• Level 3: Inputs that are not based on observable market data.

(iv) Derecognition

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or when it transfers the financial asset in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred. The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled or expire.

(v) Offsetting

Financial assets and liabilities are offset and the net amount presented in the statements of financial position when, and only when, the Company has a legal right to set off the recognized amounts and it intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.

d) Share Capital

The Company’s share capital includes the following:

• (i) Proceeds from the exercise of stock options, warrants and purchase of shares are recorded as share capital in the amount for which the option or warrant enabled the holder to purchase a share in the Company.
• (ii) Share capital issued for services received from third parties is recorded at an amount based on the fair market value of the services received.
• (iii) The proceeds from the issue of units is allocated between common shares and common share purchase warrants on a prorated basis on relative fair values as follows: the fair value of common shares is based on the stock price on the date the units are issued; and the fair value of the common share purchase warrants is determined using the Black-Scholes option pricing model.

Financial instruments issued by the Company are classified as equity only to the extent that they do not meet the definition of a financial liability.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

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SPACEFY INC.

Notes to Financial Statements for the years ended December 31, 2024 and December 31, 2023

(Expressed in Canadian Dollars)

3. MATERIAL ACCOUNTING POLICIES (continued)

e) Share-based Payments

Where equity settled share options are awarded to employees, the fair value of the options are measured at the date of grant for each tranche and expensed on a straight line basis over the vesting period, based on an estimate of options that are expected to vest with a corresponding increase in equity (contributed surplus). The fair value of the share options granted is measured using the Black-Scholes option pricing model taking into account the terms and conditions upon which the share options were granted. At the end of each reporting period, any changes in the original estimate of the options expected to vest is recognized in profit or loss such that the cumulative expense reflects the revised estimate with a corresponding adjustment to equity. Where shares are granted to persons other than employees, share capital is increased for the fair value of goods and services received.

f) Warrants

Warrants issued are classified separately as equity in accordance with the terms of the contractual arrangement and the definitions of a financial liability and an equity instrument. See Note 8 (Share capital) for terms.

g) Earnings (Loss) per Share

Basic earnings (loss) per share is computed by dividing the net income or loss applicable to common shares of the Company by the weighted average number of common shares outstanding for the relevant year.

Diluted earnings per share is computed by dividing the net income or loss applicable to common shares by the sum of the weighted average number of common shares issued and outstanding and all additional common shares that would have been outstanding, if potentially dilutive instruments were converted.

h) Revenue Recognition

The Company generates its revenue from listing services provided to space owners and renters. It charges property owners and renters a fixed percentage of rent paid by site visitors to rent locations listed by property owners.

Revenue is recognized at an amount that reflects the consideration to which the Company is expected to be entitled in exchange for transferring goods or services to a customer. For each contract with a customer, the Company: identifies the contract with a customer; identifies the performance obligations in the contract; determines the transaction price which takes into account estimates of variable consideration and the time value of money; allocates the transaction price to the separate performance obligations on the basis of the relative stand-alone selling price of each distinct good or service to be delivered; and recognizes revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods or services promised.

Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts, rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates are determined using either the 'expected value' or 'most likely amount' method. The measurement of variable consideration is subject to a constraining principle whereby revenue will only be recognized to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. The measurement constraint continues until the uncertainty associated with the variable consideration is subsequently resolved. Amounts received that are subject to the constraining principle are initially recognized as deferred revenue in the form of a separate refund liability.

Rendering of services – The Company hosts an online marketplace connecting individuals and businesses in the creative industry to space owners who can provide locations best suited to their project needs. The marketplace provides users with the ability to search for suitable spaces, then negotiate, reserve and book these spaces for use and includes a mapping function along with other filtering tools to help find suitable locations within a geographic region.

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SPACEFY INC.

Notes to Financial Statements for the years ended December 31, 2024 and December 31, 2023 (Expressed in Canadian Dollars)

3. MATERIAL ACCOUNTING POLICIES (continued)

h) Revenue Recognition (continued)

The Spacefy Platform is an online secure marketplace platform that was created to handle listing and booking of locations for short-term daily and hourly rentals. A typical transaction attracts a commission fee payable to Spacefy, and split between the renter and the space owner.

The Company recognizes revenue based on the following criteria: when a contract exists with a customer (when a space is booked), the contract identifies the performance obligation (a space rental), performance obligation has been met (the use of the space by the end user), the transaction price is determinable and collectability is reasonably assured (payments are held in escrow until the performance obligation has been met). Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business.

Under the agency model, the Company acts as the agent in the transaction, passing bookings reserved by the site renter to the relevant space owner for which it charges commissions from the renter. Revenue is therefore recognized on a net basis as the services are provided as an agent without assuming control of the site rental services.

To drive traffic on the website, the Company provides incentives to space renters in the form of discounts. These incentives are generally treated as reductions in revenue.

4. ACCOUNTS RECEIVABLE

	2024		2023
Sales Tax Receivable	$	9,429	$ 12,464

5. LOAN PAYABLE

On January 11, 2021, the Company received a $60,000 Canada Emergency Business Account loan (“CEBA Loan”) from the government of Canada. The loan was originally due on December 31, 2023. The repayment deadline to qualify for partial loan forgiveness of up to 33 per cent was subsequently extended from December 31, 2023, to January 18, 2024. As of January 19, 2024, as the CEBA Loan was not repaid, it converted to a three-year term loan, subject to interest of five per cent per annum, with the term loan repayment date extended by an additional year from December 31, 2025, to December 31, 2026.

6. RELATED PARTY BALANCES AND TRANSACTIONS

SB2 Group Inc. (“SB2”) is related to the Company by virtue of common shareholders and Michael Bradley is a director of both SB2 and the Company. The amount payable of $150,000 was originally non-interest bearing, unsecured and was due on August 15, 2017. Various amendment had been made in previous years to extend the maturity date on the loans and advances. As at December 31, 2024, the loans and advances of $135,000 (December 31, 2023 - $135,000) are due on demand.

During the year ended December 31, 2024, the Company was advanced $4,953 (2023 - $13,685) by Michael Bradley, a director and the Chief Executive Officer of the Company, and 1000040651 Ontario Inc. (“651”), a company owned by Michael Bradley. These advances are included in loans from related parties and are non-interest bearing and have no specific terms of repayment. 651 and Michael Bradley also paid $15,416 (2023 - $40,889) of vendor invoices on behalf of the Company. These amounts are included in Loans from related parties. As at December 31, 2024 $146,941 is outstanding (December 31, 2023 - $126,572).

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SPACEFY INC.

Notes to Financial Statements for the years ended December 31, 2024 and December 31, 2023 (Expressed in Canadian Dollars)

6. RELATED PARTY BALANCES AND TRANSACTIONS (continued)

Key management personnel are those persons that have authority and responsibility for planning, directing and controlling the activities of the Company, directly and indirectly. As of December 31, 2024, the Company's key management personnel consist of its directors and senior management (Chief Executive Officer and Chief Financial Officer). The Company incurred fees and expenses in the normal course of operations in connection with the key management and directors. Details are as follows for the years ended December 31, 2024 and 2023:

Nature of Transactions	2024	2023
Management fees and salaries	$ 36,000	$ 36,000
	$ 36,000	$ 36,000

As at December 31, 2024, the Company had accounts payable of $207,600 (December 31, 2023 - $171,600) due for CFO management fees.

7. COMMITMENTS AND CONTINGENCIES

As part of the Board's ongoing compliance process, the Board continues to monitor legal and regulatory developments and their potential impact on the Company. The Company takes legal advice as to the potential outcomes of claims and actions and provisions are made where appropriate. No provision is made where the directors consider, based on that advice, that the action does not meet the more likely than not criteria. Contingent liabilities are disclosed where the Company cannot make a sufficiently reliable estimate of the potential obligation.

Management is not aware of any contingencies that may have a significant impact on the financial position of the Company.

8. SHARE CAPITAL

a) Authorized and Issued Share Capital

The Company's authorized share capital consists of an unlimited number of common shares and preferred shares without par value.

b) Share Capital Transactions – Common Shares

No shares were issued during the years ended December 31, 2024 and 2023. As at December 31, 2024 and December 31, 2023, 45,458,608 shares were issued and outstanding.

c) Stock Options

At its 2019 Annual and General Meeting, the Company re-approved its stock option plan in place under which it is authorized to grant options of up to 10% of its outstanding shares of the Company to officers, directors, employees, and consultants. The exercise price of each option is to be determined by the Board of Directors. Stock options granted vest over the period determined by the Board of Directors.

There were no stock options outstanding as at December 31, 2024 and December 31, 2023.

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SPACEFY INC.

Notes to Financial Statements for the years ended December 31, 2024 and December 31, 2023

(Expressed in Canadian Dollars)

8. SHARE CAPITAL (continued)

d) Warrants

No warrants were outstanding at December 31, 2024 and December 31, 2023.

e) Restricted share units

At its 2019 Annual and General Meeting, the Board approved the adoption by the Company of a new restricted share unit plan (the "New Plan"). Restricted share units ("RSU's") may be granted to directors, officers, employees and consultants under the New Plan. The New Plan increased the number of common shares reserved for issuance under from 900,000 common shares to 10% of the number of common shares outstanding from time to time. The Company has determined that the number of common shares reserved for issuance under the New Plan in combination with the aggregate number of common shares issuable under all of the Company's other equity incentive plans in existence from time to time, including the Stock Option Plan, shall not exceed 20% of the issued and outstanding common shares. The RSU's will be settled in common shares or cash at the option of the Company.

As at December 31, 2024, there are no RSUs outstanding.

9. LOSS PER SHARE

The computations for basic and diluted loss per share are as follows:

Years ended December 31,	2024	2023
Net loss used in:
Basic loss per share	$ (33,392)	$ (83,799)
Diluted loss per share	$ (33,392)	$ (83,799)
Weighted average number of common shares as basis for:
Basic and diluted loss per share	45,458,608	45,458,608
Loss per share:
Basic and diluted	$ (0.00)	$ (0.00)

All potential dilutive stock options and warrants were excluded from the dilutive calculations as they are anti-dilutive due to the loss for the years.

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SPACEFY INC.

Notes to Financial Statements for the years ended December 31, 2024 and December 31, 2023

(Expressed in Canadian Dollars)

10. RISK MANAGEMENT

The Company’s financial instruments are exposed to the following financial risks:

Credit risk

Credit risk arises from the potential that a counter party will fail to perform its obligations. Management does not believe there is any significant credit risk from any of the Company's customers as orders are only processed after payment is received. The Company reviews financial assets past due on an ongoing basis with the objective of identifying potential matters which could delay the collection of funds at an early stage. Once items are identified as being past due, contact is made with the respective customer to determine the reason for the delay in payment and to establish an agreement to rectify the breach of contractual terms. To manage cash credit risk, the Company only engages banks with appropriate credit ratings. Credit risk on sales tax receivable balances is considered insignificant.

Currency risk

The Company generates all revenue in Canadian dollars but expenses are incurred in both U.S. and Canadian dollars, exposing the Company to fluctuations in earnings from volatility in foreign currency rates. Management however concludes the exposure to currency risk is not material and the Company does not utilize any financial instruments or cash management policies to mitigate such currency risks.

Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The Company is exposed to this risk mainly with respect to ensuring the sufficiency of funds for working capital and commitments. The Company monitors the maturity dates of existing accounts payable and accrued liabilities, loans payable, and commitments to mitigate this risk. The Company’s financial liabilities are comprised of accounts payable and accrued liabilities, loan payable and loans from related parties. See Note 1 related to going concern.

The payments due by period are set out in the following tables:

As at December 31, 2023:

	Payment due by period
	Less than one year	Between one and five years	More than five years	Total
Accounts payable and accrued liabilities	$ 325,225	$ -	$ -	$ 325,225
Loan payable	60,000	-	-	60,000
Loans from related parties	261,572	-	-	261,572
	$ 646,797	$ -	$ -	$ 646,797

As at December 31, 2024:

	Payment due by period
	Less than one year	Between one and five years	More than five years	Total
Accounts payable and accrued liabilities	$ 329,273	$ -	$ -	$ 329,273
Loan payable	-	61,180	-	61,180
Loans from related parties	281,941	-	-	281,941
	$ 611,214	$ 61,180	$ -	$ 672,394

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SPACEFY INC.

Notes to Financial Statements for the years ended December 31, 2024 and December 31, 2023

(Expressed in Canadian Dollars)

10. RISK MANAGEMENT (continued)

Fair Value Risk

Due to their short-term nature, the carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, loan payable and loans payable from related parties approximates their fair value.

11. CAPITAL MANAGEMENT

The Company’s capital management objectives are to ensure its ability to continue as a going concern and to grow its operations. The Company derives its financing from internally generated revenue and external sources. The capital structure of Spacefy currently consists of Shareholders’ deficiency and loans payable. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. This may involve Spacefy arranging more loans, issuing new shares through private placements, or selling assets to fund operations. Management reviews its capital management approach on a regular basis. The Company is not subject to externally imposed capital requirements.

The Company invests all capital that is surplus to its immediate operational needs in short-term, liquid and highly-rated financial instruments, such as cash and other short-term guaranteed deposits, all held with major financial institutions.

12. INCOME TAX

The Company’s effective tax rate differs from the amount obtained by applying the Canadian statutory tax rate due to the following:

	2024	2023
Loss before taxes	$ (33,392)	$ (83,799)
Canadian statutory tax rate	26.5%	26.5%
Income tax recovery	$ (8,850)	$ (22,206)
Deferred income tax recovery - unrecognized	8,850	22,206
Income tax expense	$ -	$ -

The Company has not recognized a deferred tax asset in respect of the following:

	2024	2023
Deferred income tax assets related to:
Non-capital losses	$ 5,134,130	$ 5,100,740
Property and equipment	9,190	9,190
Intangible assets	211,760	211,760
Total deferred income tax asset - unrecognized	$ 5,355,080	$ 5,321,690

The remaining deductible temporary differences may be carried forward indefinitely. Deferred tax assets have not been recognized in respect of these items because it is not probable that future taxable profit will be available against which the Company can utilize the benefits therefrom.

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SPACEFY INC.

Notes to Financial Statements for the years ended December 31, 2024 and December 31, 2023

(Expressed in Canadian Dollars)

12. INCOME TAX (continued)

The Company’s Canadian non-capital income tax losses expire as follows:

Year of expiry	Non-capital losses
2034	$ 61,180
2035	345,620
2036	387,050
2037	-
2038	853,310
2039	2,072,120
2040	576,770
2041	272,510
2042	294,470
2043	237,710
2044	33,390
Total	$ 5,134,130