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A2ZCryptocap — Audit Report / Information 2024
Feb 21, 2025
48323_rns_2025-02-21_0decb404-360a-4d19-a6ba-9d9fa6d73cae.pdf
Audit Report / Information
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A2ZCRYPTOCAP INC.
(A CAPITAL POOL COMPANY)
FINANCIAL STATEMENTS
For the Years Ended December 31, 2024 and 2023
(Expressed in Canadian Dollars)
Crowe
Crowe MacKay LLP
Elveden House 1700,
717 - 7 Avenue SW
Calgary, AB T2P 0Z3
Main +1(403) 294-9292
Fax +1(403) 294-9262
www.crowemackay.ca
Independent Auditor's Report
To the Shareholders of A2ZCryptocap Inc.
Opinion
We have audited the financial statements of A2ZCryptocap 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 shareholders' equity 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 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 describes the material uncertainty 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. Other than the matter described in the Material Uncertainty Related to Going Concern section, we have determined there are no key audit matters to be communicated in our report.
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 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 the other information 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 in this auditor's report. 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.
- 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.
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 Ashley Kidd.
Crowe Mackay LLP
Chartered Professional Accountants
Calgary, Canada
February 21, 2025
A2ZCRYPTOCAP INC.
(A CAPITAL POOL COMPANY)
Statement of Financial Position
(Expressed in Canadian Dollars)
| As at, | Note | December 31, 2024 | December 31, 2023 | |
|---|---|---|---|---|
| ASSETS | ||||
| Current Assets | ||||
| Cash | 4 | $ | 319,659 | $ 313,302 |
| Receivables | 7 | 246 | 1,185 | |
| $ | 319,905 | $ 314,487 | ||
| LIABILITIES | ||||
| Current Liabilities | ||||
| Accounts payable and accrued liabilities | 7 | $ | 22,929 | $ 23,533 |
| SHAREHOLDERS' EQUITY | ||||
| Share capital | 5 | 399,709 | 359,709 | |
| Contributed Surplus | 75,898 | 75,898 | ||
| Deficit | (178,631) | (144,653) | ||
| 296,976 | 290,954 | |||
| $ | 319,905 | $ 314,487 | ||
| Nature of operations and going concern (Note 1) |
Approved on behalf of the Board
"Christopher Gulka"
Director
"Dale Burstall"
Director
See accompanying notes to the financial statements
A2ZCRYPTOCAP INC.
(A CAPITAL POOL COMPANY)
Statement of Loss and Comprehensive Loss
For the Years Ended December 31, 2024 and 2023
(Expressed in Canadian Dollars)
| Note | Year ended December 31, 2024 | December 31, 2023 | |||
|---|---|---|---|---|---|
| Expenses | |||||
| General and administrative | 9 | $ | 36,587 | $ | 39,599 |
| 36,587 | 39,599 | ||||
| Other income | |||||
| Interest revenue | $ | 2,609 | $ | - | |
| Net loss and comprehensive loss | $ | (33,978) | $ | (39,599) | |
| Net loss per common share | |||||
| Basic and diluted | 6 | ($0.01) | ($0.01) |
See accompanying notes to the financial statements.
A2ZCRYPTOCAP INC.
(A CAPITAL POOL COMPANY)
Statement of Changes in Equity
For the Years Ended December 31, 2024 and 2023
(Expressed in Canadian Dollars)
| Shares | Share Capital | Contributed Surplus | Deficit | Total | |
|---|---|---|---|---|---|
| Balance, December 31, 2022 | 6,040,000 | $ 359,709 | $ 75,898 | $ (105,054) | $ 330,553 |
| Net loss for the year | - | - | - | (39,599) | (39,599) |
| Balance, December 31, 2023 | 6,040,000 | $ 359,709 | $ 75,898 | $ (144,653) | $ 290,954 |
| Balance, December 31, 2023 | 6,040,000 | $ 359,709 | $ 75,898 | $ (144,653) | $ 290,954 |
| Exercise of warrants | 400,000 | 40,000 | - | - | 40,000 |
| Net loss for the year | - | - | - | (33,978) | (33,978) |
| Balance, December 31, 2024 | 6,440,000 | $ 399,709 | $ 75,898 | $ (178,631) | $ 296,976 |
See accompanying notes to the financial statements.
A2ZCRYPTOCAP INC.
(A CAPITAL POOL COMPANY)
Statement of Cash Flows
For the Years Ended December 31, 2024 and 2023
(Expressed in Canadian Dollars)
| Year ended | ||
|---|---|---|
| December 31, 2024 | December 31, 2023 | |
| Cash Provided by (Used in): | ||
| Operating Activities | ||
| Net loss | $ (33,978) | $ (39,599) |
| Add back non-cash items | ||
| Share based compensation | - | - |
| Changes in non-cash working capital: | ||
| Accounts receivable | 939 | 2,382 |
| Accounts payable and accrued liabilities | (604) | 6,250 |
| Net cash used in operating activities | (33,643) | (30,967) |
| Financing Activities | ||
| Exercise of warrants | 40,000 | - |
| Cash from financing activities | 40,000 | - |
| Net increase (decrease) in cash | $ 6,357 | $ (30,967) |
| Cash, beginning of year | 313,302 | 344,269 |
| Cash, end of year | $ 319,659 | $ 313,302 |
See accompanying notes to the financial statements.
A2ZCRYPTOCAP INC.
(A CAPITAL POOL COMPANY)
Notes to the Financial Statements
For the Years Ended December 31, 2024 and 2023
(Expressed in Canadian Dollars)
1. Nature of Operations and Going Concern
A2ZCryptoCap Inc. (the "Company") was incorporated under the Business Corporations Act (Alberta) on October 15, 2021 and is listed as a Capital Pool Company ("CPC") as defined in Policy 2.4 - Capital Pool Companies of the TSX Venture Exchange Inc. (the "Exchange") Corporate Finance Manual. The Company has no significant assets other than cash and proposes to identify and evaluate potential acquisitions or businesses with a view to completing a Qualifying Transaction (as defined in Exchange Policy 2.4).
There is no assurance that the Company will identify a Qualifying Transaction within the time limitations permissible under the policies of the Exchange, at which time the Exchange may suspend or delist the Company's shares from trading.
The head office and the registered office of the Company is located at Suite 800 Dome Tower, 333 - 7th Avenue SW, Calgary (Alberta) T2P 2Z1.
Going Concern
These financial statements have been prepared on a going concern basis, which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business.
For the year ended December 31, 2024, the Company incurred a net loss of $33,978 (2023 - $39,599), and as of that date, the Company's deficit was $178,631 (2023 - $144,653).
The Company's ability to continue as a going concern is dependent upon the successful identification and completion of its Qualifying Transaction, raising additional equity financing and the commencement of profitable commercial activities. These factors give rise to material uncertainties that cast significant doubt on the validity of the going concern assumption.
These financial statements do not reflect adjustments in the carrying value of the assets and liabilities, the reported expenses and the statement of financial position classifications that would be necessary if the going concern assumption were not appropriate. Such adjustments could be material.
2. Basis of Presentation
a) Statement of Compliance
These financial statements have been prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board.
The Board of Directors approved the issuance of these financial statements on February 21, 2025.
b) Basis of Measurement
The financial statements have been prepared on the historical cost basis.
c) Functional Currency
The financial statements are presented in Canadian dollars, which is the Company's functional currency.
A2ZCRYPTOCAP INC.
(A CAPITAL POOL COMPANY)
Notes to the Financial Statements
For the Years Ended December 31, 2024 and 2023
(Expressed in Canadian Dollars)
3. Summary of Material Accounting Policies
The following is a summary of material accounting policies used in the preparation of these financial statements:
Cash and cash equivalents
Cash and cash equivalents include cash balances held at a chartered financial bank and in a law firm trust account.
Share Based Compensation
The Company applies a fair value-based method of accounting to all share-based payments. Stock options and warrants are measured at the fair value of each tranche on the grant date and recognized over their respective vesting period. The value of the stock options and warrants are presented as an expense when applicable with a corresponding credit to contributed surplus. On the exercise of stock options or warrants, consideration received that was previously credited to contributed surplus remains in contributed surplus. The Company uses the Black-Scholes option pricing model to estimate the fair value of these stock options and warrants.
Net Loss Per Common Share
Net loss per share has been calculated based on the weighted average number of common shares outstanding during the period using the treasury stock method.
Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership. Financial assets and liabilities are offset and the net amount is reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously.
Measurement
i) Financial assets
At initial recognition, the Company measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVTPL are expensed in profit or loss. Financial assets are considered in their entirety when determining whether their cash flows are solely payment or principal and interest.
Subsequent measurement of financial assets depends on their classification. There are three measurement categories under which the Company classifies its financial assets:
-
Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. A gain or loss on a debt investment that is subsequently measured at amortized cost is recognized in profit or loss when the asset is derecognized or impaired. Interest income from these financial assets is included as finance income using the effective interest rate method.
-
Fair value through OCI (FVOCI): Debt instruments that are held for collection of contractual flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains and losses, interest revenue, and foreign exchange gains and losses which are recognized in profit or loss.
A2ZCRYPTOCAP INC.
(A CAPITAL POOL COMPANY)
Notes to the Financial Statements
For the Years Ended December 31, 2024 and 2023
(Expressed in Canadian Dollars)
3. Summary of Material Accounting Policies (continued)
- When the debt instrument is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit or loss and recognized in other gains (losses). Interest income from these debt instruments is included as finance income using the effective interest rate method.
- Fair value through profit or loss: Assets that do not meet the criteria for amortized cost or FVOCI are measured at FVTPL. A gain or loss on an investment that is subsequently measured at FVTPL is recognized in profit or loss and presented net as revenue in the statement of loss and comprehensive loss in the period in which it arises.
The Company classifies all financial assets as held at amortized cost.
ii) Financial liabilities
A financial liability is classified as a FVTPL if it is classified as held-for-trading or is designated as such on initial recognition. Directly attributable transaction costs are recognized in profit or loss as incurred. The fair value changes to financial liabilities at FVTPL are presented as follows: where the Company optionally designates financial liabilities at FVTPL the amount of change in the fair value that is attributable to changes in the credit risk of the liability is presented in OCI; and the remaining amount of the change in the fair value is presented in profit or loss. The Company does not designate any financial liabilities at FVTPL.
Other non-derivative financial liabilities are initially measured at fair value less any directly attributable transaction costs. Subsequently to initial recognition, the liabilities are measured at amortized cost using the effective interest method.
The Company classifies all financial liabilities as held at amortized cost.
Deferred Issuance Costs
Professional, consulting, regulatory and other costs directly attributable to financing transactions are recorded as deferred issuance costs until the financing transaction is completed, if the completion of the transaction is considered likely, otherwise they are expensed. Should the financing not be successful, all amounts deferred are expensed in the period such information becomes known.
New accounting standards and amendments
The Company has adopted these amendments effective January 1, 2024:
Amendments to IAS 1 – Classification of Liabilities as Current or Non-current
The amendments to IAS 1 provide a more general approach to the classification of liabilities based on the contractual arrangements in place at the reporting date.
There was no significant impact to the financial statements as a result of the adoption of these amendments.
A2ZCRYPTOCAP INC.
(A CAPITAL POOL COMPANY)
Notes to the Financial Statements
For the Years Ended December 31, 2024 and 2023
(Expressed in Canadian Dollars)
3. Summary of Material Accounting Policies (continued)
Future accounting standards and amendments
Amendments to IFRS 18 – Presentation and disclosure in financial statements
The amendments to IFRS 18 introduces three sets of new requirements to give investors more transparent and comparable information about companies' financial performance for better investment decisions.
- Three defined categories for income and expenses (operating, investing and financing) to improve the structure of the income statement, and require all companies to provide new defined subtotals, including operating profit.
- Requirement for companies to disclose explanations of management-defined performance measures (MPMs) that are related to the income statement.
- Enhanced guidance on how to organize information and whether to provide it in the primary financial statements or in the notes.
This new standard is effective for reporting periods beginning on or after January 1, 2027.
4. Restriction on Use of Proceeds
The proceeds raised from the issuance of common shares in the capital of the Company may only be used to identify and evaluate businesses or assets and to obtain shareholder approval for a proposed Qualifying Transaction, other than for reasonable general and administrative expenses of the Company which are limited to $3,000 per month. These restrictions apply until completion of a Qualifying Transaction by the Company as defined under the Exchange Policy 2.4.
5. Share Capital
Authorized:
- Unlimited common voting shares
- Unlimited preferred shares
Issued and outstanding:
| Number of Common Shares | Amount | |
|---|---|---|
| Balance, December 31, 2022 and 2023 | 6,040,000 | $ 359,709 |
| Exercise of warrants | 400,000 | 40,000 |
| Balance, December 31, 2024 | 6,440,000 | $ 399,709 |
The below table outlines the composition of contributed surplus:
| December 31, 2024 | December 31, 2023 | |
|---|---|---|
| Stock options | $ 54,522 | $ 54,522 |
| Warrants | 21,376 | 21,376 |
| Contributed surplus | $ 75,898 | $ 75,898 |
A2ZCRYPTOCAP INC.
(A CAPITAL POOL COMPANY)
Notes to the Financial Statements
For the Years Ended December 31, 2024 and 2023
(Expressed in Canadian Dollars)
5. Share Capital (continued)
The issued and outstanding founders' common shares of 2,040,000 are subject to a CPC Escrow Agreement. Under the CPC Escrow Agreement, 25% of the escrowed common shares will be released from escrow on the issuance of the Final Exchange Bulletin (as defined in Exchange Policy 1.1 - Interpretation) (the "Initial Release") and an additional 25% will be released on the dates 6, 12, and 18 months following the Initial Release. All common shares acquired on the exercise of stock options granted to directors, officers, and non-employees prior to the completion of a Qualifying Transaction must also be deposited in escrow until the Final Exchange Bulletin is issued. Subject to certain exemptions permitted by the Exchange, all securities of the Company held by principals of the resulting issuer will also be escrowed.
The Company has adopted an incentive stock option plan in accordance with the policies of the Exchange (the "Stock Option Plan") for the benefit of directors and officers, and where permitted pursuant to Exchange policies, employees, and consultants of the Company. A maximum of ten percent (10%) of the issued and outstanding common shares of the Company upon completion of the initial public offering may be reserved for issuance pursuant to the exercise of stock options to be granted to directors and officers, and where permitted pursuant to Exchange policies employees and consultants, of the Company. In addition, subject to the policies of the Exchange, the number of common shares reserved for issuance to any one person shall not exceed five percent (5%) and for consultants and employees conducting investor relations activities shall not exceed two percent (2%) of the issued and outstanding common shares. The Stock Option Plan provides that the terms of the options and the option price shall be fixed by the directors, subject to the price restrictions and other requirements imposed by TSX Venture. Stock options granted under the Stock Option Plan may not be exercisable for a period longer than ten (10) years and the exercise price must be paid in full upon exercise of the option.
On June 23, 2022, the Company granted options to directors to purchase an aggregate of 604,000 common shares, at a price of $0.10 per common share for a period of 10 years from the date of the grant. The options vested immediately.
The below table outlines the options outstanding at the end of the year.
| Number of Options | Weighted average exercise price | |
|---|---|---|
| Balance outstanding beginning and end of year, December 31, 2023 and 2024 | 604,000 | $0.10 |
| Exercisable, December 31, 2024 | 604,000 | $0.10 |
The below table outlines the weighted average life of the options.
| Options outstanding | Weighted average exercise price | Weighted average remaining term (years) | Options exercisable |
|---|---|---|---|
| 604,000 | $0.10 | 7.47 | 604,000 |
The weighted average share price for the year ended December 31, 2024 was $0.09.
The below table outlines the warrants outstanding and the end of the year.
| Number of Warrants | Weighted average exercise price | |
|---|---|---|
| Balance, December 31, 2022 and 2023 | 400,000 | $0.10 |
| Exercised during period | (400,000) | $0.10 |
| Balance, December 31, 2024 | - | $0.00 |
| Exercisable, December 31, 2024 | - | $0.00 |
A2ZCRYPTOCAP INC.
(A CAPITAL POOL COMPANY)
Notes to the Financial Statements
For the Years Ended December 31, 2024 and 2023
(Expressed in Canadian Dollars)
6. Net Loss Per Common Share
Basic and diluted loss per share has been calculated using the weighted average number of common shares of 6,258,579 (2023 – 6,040,000).
7. Financial Instruments
The Company's financial instruments consist of cash, receivables and accounts payable and accrued liabilities.
Financial risk management
The Company's activities are exposed to a variety of financial risks: credit risk and liquidity risk. The Company's overall risk management program focuses on the unpredictability of financial and economic markets and seeks to minimize potential adverse effects on the Company's financial results. Risk management is carried out by financial management in conjunction with overall corporate governance.
Credit risk
Credit risk is the risk of loss associated with the counterparty's ability to fulfil its payment obligations. The Company is not susceptible to any credit risk since the cash is held in the Company's lawyers trust account and at a chartered financial bank. There has been no change in risk during the year.
Liquidity risk
The Company's exposure to liquidity risk is dependent on purchasing commitments and obligations or raising of funds to meet commitments and sustain operations.
As at December 31, 2024, the Company has cash of $319,659 (2023 - $313,302) to settle financial liabilities of $22,929 (2023 - $23,533). There has been no change in risk during the year.
Fair value
The fair values of cash, receivables and accounts payable and accrued liabilities approximate their carrying amounts due to their short-term nature.
8. Capital Management
The Company's objective when managing capital is to maintain adequate cash resources to support planned activities which include identifying and evaluating potential acquisitions.
The Company includes shareholders' equity of $296,976 (2023 - $290,954) in the definition of capital.
In managing capital, the Company estimates its future cash requirements by preparing a budget. The budget establishes the activities for the upcoming year and estimates the costs associated with these activities.
The Company's plan is to raise capital through the issuance of additional common shares. There are no assurances that funds will be made available to the Company when required.
The Company is not subject to externally imposed capital requirements other than the restriction on the use of proceeds disclosed in Note 4.
9. Related Party Transactions
For the year ended December 31, 2024, $4,594 (2023 - $5,831) in legal fees were incurred with a law firm of which one of the corporate directors is a partner. The legal fees were recognized in general and administration expense. Included in accounts payable and accrued liabilities as at December 31, 2024 is $nil (2023 - $2,198) related to these fees.
A2ZCRYPTOCAP INC.
(A CAPITAL POOL COMPANY)
Notes to the Financial Statements
For the Years Ended December 31, 2024 and 2023
(Expressed in Canadian Dollars)
10. Income Taxes
The income tax provision reported differs from the amount computed by applying the combined Canadian federal and provincial rate to income before income taxes.
The reasons for the difference and the related tax effects are as follows:
| December 31, 2024 | December 31, 2023 | ||
|---|---|---|---|
| Loss before income taxes | $ | (33,978) | $ (39,599) |
| Expected rate | 23.00% | 23.00% | |
| Expected tax recovery | (7,815) | (9,108) | |
| Tax effected adjustments: | |||
| Deductible share issue costs | (6,545) | (6,545) | |
| Unused tax losses not recognized | 14,360 | 15,653 | |
| Income tax expense | $ | - | $ - |
The financial statements do not reflect potential tax reductions available through the application of losses carried forward against future years' earnings otherwise subject to income taxes.
These losses may be carried forward and expire as follows:
| Year | |
|---|---|
| 2040 | $ 11,000 |
| 2041 | $ 68,000 |
| 2042 | $ 68,000 |
| 2043 | $ 62,000 |