PeakBirch Commerce : Q2 2022 MDA

PEAKBIRCH COMMERCE INC.

(FORMERLY PEAKBIRCH LOGIC INC.)

MANAGEMENT DISCUSSION AND ANALYSIS

For the three and six months ended April 30, 2022

PeakBirch Commerce Inc. (formerly PeakBirch Logic Inc.)

Management Discussion and Analysis

For the three and six months ended April 30, 2022

The Management Discussion and Analysis ("MD&A"), prepared June 29, 2022 should be read in conjunction with the condensed interim consolidated financial statements and notes thereto for the three and six months ended April 30, 2022 of PeakBirch Commerce Inc. (formerly PeakBirch Logic Inc.) (the "Company" or "PeakBirch") which were prepared in accordance with International Financial Reporting Standards ("IFRS"). Unless otherwise noted, all currency amounts are in US dollars.

FORWARD-LOOKING STATEMENTS

This management discussion and analysis may contain forward-looking statements in respect of various matters including upcoming events and include without limitation, statements regarding discussions of the Company's business strategy, future plans, projections, objectives, estimates and forecasts and statements as to management's expectations with respect to, among other things, the Company's expected performance and its future objectives. These forward-looking statements involve numerous risks and uncertainties, and actual results may vary. Important factors that may cause actual results to vary include without limitation, certain transactions, certain approvals, changes in regulations in the jurisdictions in which the Company operates, social perception of cannabis and other related and regulated products which we currently or in the future may sell, delays in the receipt of any necessary government approvals, and changes in general economic conditions or conditions in the financial markets. In making the forward- looking statements in this MD&A, the Company has applied several material assumptions, including without limitation, the assumptions that: (1) any additional financing needed will be available on reasonable terms;

1. any necessary permits or government approvals needed will be obtained; and (3) laws, regulations, government policies or stock exchange rules respecting the industries in which the Company operates will not become more onerous on the Company. The Company cannot make any assurances that any of these assumptions will prove to be correct.

The words "expect," "anticipate," "estimate," "may," "will," "should," "intend," "believe," "target," "budget," "plan," "projection" and similar expressions are intended to identify forward-looking statements.

These factors should be considered carefully, and readers should not place undue reliance on the Company's forward-looking statements. The Company believes that the expectations reflected in the forward-looking statements, including future-oriented financial information, contained in this MD&A and any documents incorporated by reference are reasonable, but no assurance can be given that these expectations will prove to be correct. In addition, although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward- looking statements, including future-oriented financial information, there may be other factors that cause actions, events, or results not to be as anticipated, estimated, or intended. The Company undertakes no obligation to disclose publicly any future revisions to forward-looking statements, including future-oriented financial information, to reflect events or circumstances after the date of this MD&A or to reflect the occurrence of unanticipated events, except as expressly required by law.

Additionally, the forward-looking statements, including future-oriented financial information, contained herein are presented solely for the purpose of conveying our reasonable belief of the direction of the Company and may not be appropriate for other purposes.

The results or events predicted in these forward-looking statements may differ materially from the actual results or events. The Company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Company Overview

The Company was incorporated on March 23, 2015 pursuant to the Business Corporations Act (British Columbia) as a company in the business of mineral exploration and evaluation. The address of its head office and registered office is located at Suite 400-837 West Hastings Street, Vancouver, British Columbia, V6C 3N6. On February 23, 2022, the Company changed its name to "Peakbirch Commerce Inc."

On September 8, 2020, the Company completed an acquisition transaction whereby the Company acquired 100% of the issued and outstanding shares of Canndora Delivery Ltd. ("Canndora"), acquired 100% of the issued and outstanding shares of Greeny Collaboration Group (Canada) Inc. ("Greeny") and acquired approximately 98.5% of the issued and outstanding shares of Lifted Innovations Inc. ("Lifted"). The acquisition of Lifted was a reverse takeover transaction ("RTO") between Lifted and the Company in which the shareholders of Lifted acquired control over the Company. The acquisition of Canndora and Greeny were an asset acquisition as these entities did not constitute a business. The Company now carries on the business of Lifted.

On October 19, 2020, the Company completed the acquisition of the remaining 1.5% of the shares of Lifted not taken up under the Company's takeover bid of Lifted which closed on September 8, 2020.

On September 8, 2020, the Company completed a 1-for-23 share consolidation for the Company's issued and outstanding common shares.

On July 26, 2021, the Company acquired Stul Ltd. ("Stul"), a company located in London, United Kingdom. The Company acquired 100% of the issued and outstanding shares of Stul, including all of the existing assets of Stul.

On February 23, 2022, the Company completed a 1-for-3.3 share consolidation for the Company's issued and outstanding common shares & announced a name change to PeakBirch Commerce Inc.

On February 24, 2022, the Company acquired Greenlite Crowdfunding Corp ("Greenlite"), a company located in British Columbia, Canada. The Company acquired 100% of the issued and outstanding shares of Greenlite, including all of the existing assets of Greenlite.

The application of the going concern concept is dependent upon the Company's ability to satisfy its liabilities as they become due and to obtain the necessary financing. Management is actively engaged in the review and due diligence on opportunities of merit and is seeking to raise the necessary capital to meet its funding requirements. There can be no assurance that management's plan will be successful. These factors indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern.

If the going concern assumption were not appropriate for these financial statements then adjustments may be necessary in the carrying value of assets and liabilities, the reported expenses and the statement of financial position classifications used. Such adjustments could be material.

E-Commerce Platforms

The Company's primary business is the sale and distribution of vaporizers, cannabis-related accessories, ancillary, and CBD products (collectively, "CBD, cannabis-related accessories and ancillary products"), via its e-commerce portals Namastevaporizers.com, Everyonedoesit.com, LiftedCBD.com, Lifted.com, LeafScience.com, Greeny.comand Hotboxherb.com(the "E Commerce Sites"). The Company, through its acquired Hot Box Herb, distributes or sells its own organic branded CBD products, named New Era Wellness, consisting of a product line of topicals, edibles and flower. Currently, the Company has a strong focus on expanding into the non-psychoactive mushroom market via its e-commerce site Shroommart.com, while simultaneously engaging in e-commerce activities in two countries.

In Fiscal 2022, there was a decrease in the activity of the leadership team with its focus and effort in strengthening its market share within the United States as compared in Fiscal 2021. The efforts resulted in significant revenue decreased from $2,243,365 for the six months ended April 30, 2021 to $618,716 during the six months ended April 30, 2022.

The E-Commerce Sites currently offer an extensive range of brand-name vaporizers, CBD products and are a source of both general and specific information, reviews and media regarding the industry and related products. The Company is currently focused on expanding its product offerings and growing its U.S and Canadian presence through both organic and acquisitive growth.

E-Commerce Technology

The Company utilizes Shopify and WooCommerce for its E-Commerce Sites in order to streamline and simplify its accounting, payments and fulfillment process. The review system used in its E-Commerce Sites is powered by Stamped.io, which is a third-party review platform that allows customers to review both the products and the customer's experience on the E-Commerce Sites. As Stamped.io is a third-party platform, it is expected that this provides confidence to consumers that the reviews and comments are both authentic and transparent.

The Company relies on Shopify and WooCommerce's well-established application program interface ("API") for integrations with other applications and software services. The Company takes advantage of these solutions and systems to automate its order processing. Its tech team also builds proprietary customized software solutions that are not otherwise available by using the API capability of Shopify which plugs into its payment processing.

Order fulfillment is possible with the various partners the Company uses. The Company has agreements in place with multiple vendors in the cannabis space that allows the Company to access their inventory of CBD, cannabis-related accessories and ancillary products and utilize their fulfillment services. This in turn allows the Company to keep its operations lean and focus on building its e-commerce platform.

The technology and processing platforms that the Company utilizes enables it to operate a "dropship" business model. Under this model the Company does not own, manage or hold any physical inventory. Rather, its e-commerce platforms facilitate the sale and processing of products, but all warehousing and product inventory and delivery is processed through its partners. Drop-shipping enables the Company's business to operate with very little overhead, thus maximizing margins and, ultimately, net revenue. The Company's partners also benefit as it offers them a much larger pool of customers than they already serve. The Company's planned same-day-delivery service platform will be powered by AI and Geo-location technology, that will leverage machine learning to provide the customers with a personalized shopping experience.

Corporate Activities

On November 10, 2020, the Company entered a relationship with Humble and Fume Inc. through its wholly owned subsidiary Windship Trading which allows the Company and Windship to partner to provide the Company's customers with an exciting expansion of brand offerings.

On November 24, 2020, the Company announced that it has expanded into the Canadian market. The Company will offer Canadian consumers access to premium selections of vaporizer, glass and accessory brands through its existing network of relationships and distribution outlets.

On December 03, 2020, the Company entered into a relationship with AF Trading Ltd. which allows the Company and AF Trading to partner to provide the Company's customers with access to a premium selection of vaporizers, glass and accessory brands in the UK.

On January 14, 2021, the Company entered a collaborative agreement with Namaste Technologies Inc. ("Namaste") which will enable PeakBirch to sell hemp derived CBD through CannMart.com.

On February 18, 2021, the Company announced a partnership with Halo Collective to Develop Functional Mushroom Line. Products will be sold through PeakBirch's e-commerce platform ShroomMart.com.

On April 8, 2021, the Company's common shares commenced trading on the OTCQB Venture Market in the United States under the symbol "KTNNF".

On July 26, 2021, the Company acquired all of the issued and outstanding shares of Stul Ltd., located in London, United Kingdom.

On February 24, 2022, the Company acquired all of the issued and outstanding shares of Greenlite Crowdfunding Corp., located in British Columbia, Canada.

On March 10, 2022, the Company announced its intent to commence the development of an NFT Marketplace to allow digital content creators to buy, sell and trade NFTs.

Strategic Vision and Growth

The Company intends to increase revenue growth by continuing its focus on business development opportunities within the cannabis and non-psychoactive mushroom markets by:

1. Strategic Acquisition - The Company will be adding to its library of targeted products and acquiring complementary e-commerce platforms to expand its market scope and presence, in order to combine partnerships and technology to offer complimentary services and products to the cannabis industry.
2. Expansion into New Products - Adding and expanding the Company's product lines from the brands it currently offers, and establishing new dropship partners and partnerships with brands, will allow the Company to provide customers with access to an ever-expanding catalogue of CBD, cannabis-related accessories and ancillary products. Furthermore the company plans to expand into the non-psychoactive mushroom product line and is exploring both partnerships as well as building its own in-house brands.
3. Expansion into Services & Technology - Adding same-day delivery of cannabis and vaporizer delivery services to both B2C and B2B within the United States. The company believes that by developing the necessary technology to offer these services it will enable it to grow its B2B sales and relationships with brick-and-mortar businesses. In the long-term the Company intends to expand its offerings beyond same-day delivery to include other complimentary services for the cannabis industry.
4. Expansion into new geographies - The Company intends on expanding into new international territories and will be evaluating new partnerships to supply its e-commerce stores. The Company will continue to pursue a drop shipping model and believes that outsourcing certain functions will allow the Company to focus on sales and building out new sales channels without adding additional capital expenditure, resulting from inventory costs.

No assurance can be given that the Company will be able to successfully grow its services, product base or establish new partnerships or that, if its product base is expanded or new partnerships are entered into, that the Company's business will be positively affected thereby.

COVID-19

The outbreak of the novel strain of coronavirus, specifically identified as "COVID-19", has resulted in a widespread international health crisis that has materially affected economies and financial markets, resulting in the rapid onset of an economic downturn. This unprecedented pandemic may result in, among other things, supply chain issues, transportation delays, changes in customer demand for the Company's products, increased government regulations or interventions, and ongoing economic uncertainty, all of which may negatively impact the business, financial condition or results of operations of the Company. The Company continues to monitor COVID-19 developments but since the duration and impact of the COVID- 19 pandemic is unknown at this time, it is not possible to reliably estimate the length of the outbreak or the severity of its impact at this time. The Company may experience difficulty in accessing financing as a result of the pandemic.

MANAGEMENT CHANGES

On June 23, 2020, Tara Haddad resigned as interim chief executive officer, chief financial officer and director of the Company. Von Torres, a director of the Company, replaced Tara Haddad as interim chief executive officer and chief financial officer of the Company.

Effective September 8, 2020, Von Torres resigned as interim chief executive officer, interim chief financial officer and a director of the Company. On the same day, the Company appointed Usama Chaudhry, a director of the Company, as chief financial officer and Marc Mulvaney as chief executive officer and director of the Company. Sean Duncombe was also appointed as chief operating officer of the Company. In addition, Ricardo De Barros and Kang Yau have been appointed as directors of the Company.

On April 19, 2021, the Company appointed Kiran Sidhu as a director of the Company.