Tiny Ltd. — Audit Report / Information 2020

Sep 29, 2020

BRACHIUM CAPITAL CORP.

(A Capital Pool Company)

Financial Statements

For the Year Ended May 31, 2020 and the Period from the Date of Incorporation on March 4, 2019 to May 31, 2019

(Expressed in Canadian Dollars)

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INDEPENDENT AUDITOR’S REPORT

To the Directors and Shareholders of Brachium Capital Corp.

Opinion

We have audited the financial statements of Brachium Capital Corp. (the “Company”), which comprise the statements of financial position as at May 31, 2020 and 2019, and the statements of loss and comprehensive loss, changes in shareholders’ equity and cash flows for the year ended May 31, 2020 and for the period from incorporation on March 4, 2019 to May 31, 2019, and notes to the financial statements, including a summary of significant accounting policies (collectively referred to as the “financial statements”).

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at May 31, 2020 and 2019, and its financial performance and its cash flows for the year ended May 31, 2020 and for the period from incorporation on March 4, 2019 to May 31, 2019 in accordance with International Financial Reporting Standards.

Basis for Opinion

We conducted our audit 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 audit 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 to the financial statements, which states events or conditions, along with other matters that 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.

Other Information

Management is responsible for the other information. The other information comprises the information included in 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 audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, 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, 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 International Financial Reporting Standards, 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.

• 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 audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

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.

The engagement partner on the audit resulting in this independent auditor's report is David Goertz.

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DALE MATHESON CARR-HILTON LABONTE LLP CHARTERED PROFESSIONAL ACCOUNTANTS

Vancouver, BC

September 25, 2020

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BRACHIUM CAPITAL CORP. Statements of Financial Position (Expressed in Canadian Dollars)

Note May 31, 2020	May 31, 2019
ASSETS
Current assets
Cash $ 503,855 Prepaids 3,868	$ 140,000 -
Total assets $ 507,723	$ 140,000
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities 3 $ 7,950	$ 12,963
Total liabilities 7,950	12,963
SHAREHOLDERS' EQUITY
Share capital 4 577,372 Reserve 4 80,626 Deficit (158,225)	140,000 - (12,963)
Total shareholders' equity 499,773	127,037
Total liabilities and shareholders' equity $ 507,723 $ 140,000

Nature of operations and continuance of business (Note 1)

Approved and authorized for issuance on behalf of the Board on September 25, 2020:

/s/“Bryant Pike” Director	/s/“Larry Nevsky”
	Director

(The accompanying notes are an integral part of these financial statements).

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BRACHIUM CAPITAL CORP. Statements of Loss and Comprehensive Loss (Expressed in Canadian Dollars)

Note For the Year Ended May 31, 2020 For the period from incorporation on March 4, 2019 to May 31, 2019	Note For the Year Ended May 31, 2020 For the period from incorporation on March 4, 2019 to May 31, 2019
GENERAL AND ADMINISTRATIVE EXPENSES
Administration $ 5,316	$ 863
Exchange and listing fees 27,204	-
Professional fees 44,425	12,100
Stock based compensation 4 59,426	-
Transfer agent fees 6,017	-
Travel 2,874	-
LOSS AND COMPREHENSIVE LOSS (145,262)	(12,963)
Loss per common class A share
Basic and diluted loss per share $ (0.05)	$-
Weighted average number of common class A shares 2,889,871 -

(The accompanying notes are an integral part of these financial statements).

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BRACHIUM CAPITAL CORP. Statements of Changes in Shareholders’ Equity (Expressed in Canadian Dollars)

	Number of
	common				Total
	class A				Shareholders'
	shares	Share capital	Reserve	Deficit	equity
Balance, March 4, 2019 (Inception)	-	$ -	$ -	$ -	$ -
Common Shares issued for cash	2,800,000	140,000	-	-	140,000
Loss	-	-	-	(12,963)	(12,963)
Balance as at May 31, 2019	2,800,000	$ 140,000	$ -	$ (12,963)	$ 127,037
Common Shares issued for cash	5,123,500	512,350	-	-	512,350
Share issue costs	-	(74,978)	21,200	-	(53,778)
Stock based compensation	-	-	59,426	-	59,426
Loss	-	-	-	(145,262)	(145,262)
Balance as at May 31, 2020	7,923,500	$ 577,372	$ 80,626	$ (158,225)	$ 499,773

(The accompanying notes are an integral part of these financial statements).

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BRACHIUM CAPITAL CORP. Statements of Cash Flows (Expressed in Canadian Dollars)

For the Year Ended May 31, 2020 For the period from incorporation on March 4, 2019 to May 31, 2019	For the Year Ended May 31, 2020 For the period from incorporation on March 4, 2019 to May 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (145,262) $ (12,963) Add: Stock based compensation 59,426 - Changes in non-cash working capital items: Prepaids (3,868) - Accounts payable and accrued liabilities (5,013) 12,963
Net cash used in operating activities (94,717) -
CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of shares 512,350 140,000
Share issuance costs (53,778)	-
Net cash provided by financing activities 458,572	140,000
Net change in cash 363,855 140,000
Cash, beginning 140,000	-
Cash, ending $ 503,855	$ 140,000

Significant non-cash transactions included:

• Recognition of the fair value of agent’s options of $21,200 (2019 – $nil)

(The accompanying notes are an integral part of these financial statements).

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BRACHIUM CAPITAL CORP. Notes to the Financial Statements For the Year ended May 31, 2020 (Expressed in Canadian Dollars)

1. Nature of Operations and Continuance of Operations

Brachium Capital Corp. (the “Company”) was incorporated in the Province of British Columbia on March 4, 2019, under the Business Corporations Act of British Columbia. The Company is classified as a Capital Pool Company ("CPC") as defined in the TSX Venture Exchange (the "Exchange") Policy 2.4. The Company's head office is located at of Suite 2000 - 250 Howe Street, Vancouver, BC, V6C 3R8.

The Company commenced trading its common class A shares on the Exchange on December 5, 2019 under the symbol “BRAC.P”. As a CPC, the Company’s principal business is to identify, evaluate and acquire assets, properties or businesses which would constitute a qualifying transaction in accordance with Policy 2.4 of the Exchange (“QT”). A CPC has 24 months form when the shares are listed on the Exchange to complete a QT. Such a transaction may be subject to shareholder and regulatory approval. Until completion of the QT, the Company will not carry on any business other than the identification and evaluation of businesses or assets with a view to completing a potential QT.

These financial statements have been prepared on the basis that the Company will continue as a going concern. The proposed business of the Company and the completion of a QT involves a high degree of risk and there is no assurance that the Company will identify an appropriate business for acquisition or investment, and even if so identified and warranted, it may not be able to finance such an acquisition or investment within the requisite time period. Additional funds will be required to enable the Company to pursue such an initiative and the Company may be unable to obtain such financing on terms which are satisfactory to it. Furthermore, there is no assurance that the business will be profitable. These factors indicate the existence of a material uncertainty that may cast doubt about the Company's ability to continue as a going concern.

2. Significant Accounting Policies

(a) Basis of Presentation

These financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and interpretations the International Financial Reporting Interpretations Committee (“IFRIC”) on a going concern basis.

The financial statements have been prepared on a historical cost basis, except for financial instruments classified as fair value through profit and loss or fair value through other comprehensive income, which are stated at their fair value. The financial statements have been prepared using the accrual basis of accounting except for cash flow information. The financial statements are presented in Canadian dollars, which is the Company’s functional currency.

(b) Significant Accounting Estimates and Judgments

The preparation of financial statements in accordance with IFRS requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

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BRACHIUM CAPITAL CORP. Notes to the Financial Statements For the Year ended May 31, 2020 (Expressed in Canadian Dollars)

2. Significant Accounting Policies (continued)

• (c) Financial Instruments

Financial instruments are measured on initial recognition at fair value, plus, in the case of financial instruments other than those classified at FVTPL, directly attributable transaction costs. Measurement of financial assets in subsequent periods depends on whether the financial instrument has been classified and measured at:

• i. Amortized cost;

• ii. Fair value through other comprehensive income (“FVOCI”);

• iii. Fair value through profit or loss (“FVTPL”)

All financial assets not classified and measured at amortized cost or FVOCI are measured at FVTPL. On initial recognition of an equity instrument that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’s fair value in OCI. The classification determines the method by which financial assets are carried on the balance sheet subsequent to inception and how changes in value are recorded. Cash and cash equivalents, are measured at amortized cost with subsequent impairments recognized in the statements of operations and comprehensive loss. Financial liabilities are designated as either: (i) fair value through profit or loss; or (ii) other financial liabilities. Financial liabilities, other than financial liabilities classified as FVTPL, are measured in subsequent periods at amortized cost using the effective interest method. Accounts payable and accrued liabilities are classified as other financial liabilities and carried on the balance sheet at amortized cost.

(d) Share capital

Common shares are classified as equity. Transaction costs directly attributable to the issue of common shares and stock options are recognized as a deduction from equity, net of any tax effects.

From closing of the Company's intended Initial Public Offering (“IPO”) until completion of the QT, the Company is restricted by the Exchange policies for CPCs and, accordingly, may not issue any units, warrants, or shares other than common shares and only after approval of the Exchange has been obtained. Options may entitle the holder to only acquire common shares of the Company and may only be granted to directors or officers of the Company or technical consultants who are consulting on the proposed QT.

• (e) Income Taxes

Current income tax

Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized directly in other comprehensive income or equity is recognized in other comprehensive income or equity and not in the statement of operations. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

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BRACHIUM CAPITAL CORP. Notes to the Financial Statements For the Year ended May 31, 2020 (Expressed in Canadian Dollars)

2. Significant Accounting Policies (continued)

• (e) Income Taxes (cont’d)

Deferred income tax

Deferred income tax is provided using the statement of financial position method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and recognized only to the extent that it is probable that sufficient taxable income will be available to allow all or part of the deferred income tax asset to be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.

• (f) Loss Per Share

Basic loss per share is computed using the weighted average number of common shares outstanding during the period. The treasury stock method is used for the calculation of diluted loss per share, whereby all “in the money” stock options and share purchase warrants are assumed to have been exercised at the beginning of the period and the proceeds from their exercise are assumed to have been used to purchase common shares at the average market price during the period. When a loss is incurred during the period, basic and diluted loss per share are the same as the exercise of stock options and share purchase warrants is considered to be anti-dilutive.

• (g) Adoption of new accounting standards.

IFRS 16, Leases establishes a comprehensive framework for recognition, measurement and classification of leases and requires lessees to recognize assets and liabilities for most leases. It has replaced International Accounting Standard (“IAS”) 17 Leases and related interpretations. The Company has adopted IFRS 16 using the modified retrospective approach on June 1, 2019 and has not restated comparatives for the 2019 reporting period. The Company elected to use the exemptions proposed by the standard on lease contracts for which the lease terms end within twelve months as of the date of adoption and lease contracts from which the underlying asset is of low value. The adoption of IFRS 16 does not result in any adjustment to the opening statement of financial position on June 1, 2019.

3. Accounts Payable and Accrued Liabilities

Accounts Payable Accrued Liabilities	May 31, 2020 May 31, 2019
	$ 950 $ 863 7,000 12,100
	$ 7,950 $ 12,963

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BRACHIUM CAPITAL CORP. Notes to the Financial Statements For the Year ended May 31, 2020 (Expressed in Canadian Dollars)

4. Share Capital

• a) Authorized

unlimited common class A shares without par value

unlimited preferred shares, issuable in series, without par value

b) Share Capital

On December 3, 2019, the Company completed its IPO and issued 4,000,000 common class A shares at a price of $0.10 per share for gross proceeds of $400,000. In connection with the IPO, the Company paid cash commission, legal, and filing fees of $53,778 and issued 400,000 agent’s options. Each agent’s option entitles the holder to acquire one common class A share at a price of $0.10 for 2 years from the date of issuance. The agent’s options were valued at $21,200, estimated using the Black-Scholes Option Pricing model with the following assumptions: expected life of 2 years; risk free interest rate of 1.4%; expected volatility of 100%; and forecasted dividend yield of nil.

On August 7, 2019, the Company completed a private placement for gross proceeds of $112,350 by issuing 1,123,500 common class A shares at the price of $0.10 per share.

On May 31, 2019, the Company completed a private placement for gross proceeds of $140,000 by issuing 2,800,000 common class A shares at the price of $0.05 per share, of which 2,600,000 were issued to officers and directors of the Company for proceeds of $130,000.

Pursuant to an escrow agreement dated September 25, 2019, 2,800,000 common class A shares of the Company were deposited into escrow. Under the escrow agreement, it is anticipated that 10% of the escrowed common class A shares will be released on the issuance of the Final Exchange Bulletin on completion of a QT (the “Initial Release”), and an additional 15% will be released on the dates that are 6 months, 12 months, 18 months, 24 months, 30 months and 36 months following the Initial Release. As of May 31, 2020, 2,800,000 shares are held in escrow.

c) Stock Options

The Company has adopted an incentive stock option plan, which provides that the Board of Directors of the Company may from time to time, in its discretion, and in accordance with Exchange Policies, grant to directors, officers and technical consultants to the Company, nontransferable options to purchase common class A shares, provided that the number of common class A shares reserved for issuance will not exceed 10% of the common class A shares issued and outstanding from time to time. Such options are non-transferable and are exercisable at a price per share not below the closing traded price on the day before the date of grant for a period of up to ten years from the date of grant.

Any common class A shares acquired pursuant to the exercise of options prior to completion of the QT, must be deposited in escrow and will be subject to escrow until the Final Exchange Bulletin is issued.

On December 3, 2019, the Company granted 792,350 fully vested non-transferable stock options to its directors. Each stock option entitles the holder to acquire one common class A share at a price of $0.10 for a period up to 5 years from the date of issuance. The stock options were valued at $59,426, estimated using the Black-Scholes Option Pricing model with the following assumptions: expected life of 5 years; risk free interest rate of 1.4%; expected volatility of 100%; and forecasted dividend yield of nil.

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BRACHIUM CAPITAL CORP. Notes to the Financial Statements For the Year ended May 31, 2020 (Expressed in Canadian Dollars)

4. Share Capital (continued)

• c) Stock Options (Cont’d)

A summary of stock options activities are as follows:

	Year Ended	Year Ended
	May 31,	2020
	Number of options	Weighted average exercise price
		$
Outstanding, beginning of year	-	-
Granted	792.350	0.10
Outstanding, end ofyear	792,350	0.10

A summary of the stock options outstanding and exercisable at May 31, 2020 is as follows:

Exercise Price Number Outstanding	Number Exercisable Expiry Date
$ 0.10 792,350	792,350 December 3, 2024

d) Agent’s Options

On December 3, 2019, the Company granted 400,000 fully vested non-transferable agent’s options to its agent. Each agent’s option entitles the holder to acquire one common class A share at a price of $0.10 for 2 years from the date of issuance. The agent’s options were valued at $21,200, estimated using the Black-Scholes Option Pricing model with the following assumptions: expected life of 2 years; risk free interest rate of 1.4%; expected volatility of 100%; and forecasted dividend yield of nil.

A summary of agent’s options activities are as follows:

	Year Ended	Year Ended
	May 31,	2020
	Number of options	Weighted average exercise price
		$
Outstanding, beginning of year	-	-
Granted	400,000	0.10
Outstanding, end ofyear	400,000	0.10

A summary of the agent’s options outstanding and exercisable at May 31, 2020 is as follows:

		Number
Exercise Price	Number Outstanding	Exercisable	Expiry Date
$
0.10	400,000	400,000	December 3, 2021

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BRACHIUM CAPITAL CORP. Notes to the Financial Statements For the Year ended May 31, 2020 (Expressed in Canadian Dollars)

5. Related Party Transactions

During the year ended May 31, 2020, the Company issued 792,350 stock options at an exercise price of $0.10 per share to officers and directors of the Company, with a fair value of $59,426.

6. Capital Management

The Company manages its capital to maintain its ability to continue as a going concern and to provide returns to shareholders and benefits to other stakeholders. The capital structure of the Company consists of equity comprised of issued share capital.

The Company manages its capital structure and makes adjustments to it in light of economic conditions. The Company, will balance its overall capital structure through new share issuances or by undertaking other activities as deemed appropriate under the specific circumstances.

Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. The Company is not subject to externally imposed capital requirements.

6. Financial Instruments

• (a) Fair Values

The fair value of financial instruments, approximates its carrying value due to the relatively shortterm maturity of this instrument.

(b) Credit Risk

The Company is not exposed to any significant credit risk.

• (c) Foreign Exchange Rate and Interest Rate Risk

The foreign exchange risk is the risk that fair value of future cash flows will fluctuate due to changes in foreign exchange rates. Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. The Company has determined there is no material exposure related to interest rate risk.

• (d) Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Company manages liquidity risk by maintaining sufficient cash balances and adjusting its operating budget and expenditure. Liquidity requirements are managed based on expected cash flows to ensure that there is sufficient capital in order to meet short-term and other specific obligations.

8. Income Taxes

A reconciliation of income taxes at statutory rates is as follows:

		May 31, 2020	May 31, 2019
Loss for the year before income taxes	$	(145,262) $	(12,963)
Statutory income tax rate		27%	27%
Expected income tax recovery		(39,221)	(3,500)
Items not deductible for tax purposes		16,045	3,419
Change in unrecognized deferred assets		23,176	81
	$	-$	-

As at May 31, 2020, the Company has an estimated non-capital loss for Canadian income tax purposes of approximately $98,000 that may be carried forward to reduce taxable income derived from future years.

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BRACHIUM CAPITAL CORP. Notes to the Financial Statements For the Year ended May 31, 2020 (Expressed in Canadian Dollars)

9. Subsequent Events

On August 17, 2020, the Company entered into a binding letter of intent with WeCommerce Holdings Ltd. ( “WeCommerce”), which outlines the terms and conditions pursuant to which the Company and WeCommerce will complete a transaction that will result in a reverse take-over of the Company by WeCommerce (the " Proposed Transaction "). The Proposed Transaction will be an arm's length transaction, and, if completed, will constitute the Company’s "Qualifying Transaction" (as such term is defined in Policy 2.4 – Capital Pool Companies of the Exchange Corporate Finance Manual ).

The Proposed Transaction is subject to the parties entering into a definitive agreement on or before October 15, 2020, or such other date as the Company and WeCommerce may mutually agree. Completion of the Proposed Transaction is also subject to a number of other conditions, including obtaining all necessary board, shareholder and regulatory approvals, including Exchange approval. Upon completion of the Proposed Transaction, the Company will carry on the business of WeCommerce.

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