AGEDB Technology Limited — Interim / Quarterly Report 2023

Feb 28, 2023

Condensed Interim Financial Statements (Unaudited – prepared by management)

Nine Months Ended December 31, 2022

Expressed in Canadian Dollars

NOTICE OF NO AUDITOR REVIEW OF THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

These unaudited condensed consolidated interim financial statements of Adagio Capital Inc. for the nine months ended December 31, 2022 have been prepared by management and approved by the Board of Directors. These unaudited condensed consolidated interim financial statements have not been reviewed by the Company's external auditors.

Condensed Interim Statements of Financial Position (Expressed in Canadian dollars) (Unaudited – prepared by management)

		December 31,		March 31,
	Note	2022		2022
Assets				(audited)
Current assets
Cash		$255,895	$	126,575
Prepaid expense		-		15,875
Total assets		$255,895	$	142,450
Liabilities and shareholders' equity
Current liabilities
Accounts payable and accrued liabilities		$43,179	$	5,898
		43,179		5,898
Shareholders' equity
Share capital	4	285,740		150,000
Reserves	4	10,628		-
Deficit		(83,652)		(13,448)
Total shareholders' equity		212,716		136,552
Total liabilities and shareholders' equity		$255,895	$	142,450

Nature and continuance of operations (Note 1)

Approved by Directors:

"AZIM DHALLA" "CHRISTOPHER CHERRY"

Director Director

Condensed Interim Statement of Loss and Comprehensive Loss (Expressed in Canadian dollars) (Unaudited – prepared by management)

	Three Months		Three Months		Nine Months		Nine Months
	Ended		Ended		Ended		Ended
		December 31,	December 31,		December 31,		December 31,
		2022	2021		2022		2021
EXPENSES
Office and miscellaneous	$	672	$-	$	672	$	-
Professional fees		37,508	-		47,508		7,500
Transfer agent and filing fees		13,291	-		22,024		-
Loss and comprehensive loss for the period	$	(51,471)	$-	$	(70,204)	$	(7,500)
Basic and diluted loss per common share	$	(0.02)	$(0.00)	$	(0.02)	$	(0.00)
Weighted average number of common sharesoutstanding		3,195,652	3,000,000		3,066,666		3,000,000

Condensed Interim Statement of Changes in Shareholders' Equity (Expressed in Canadian dollars - unaudited) (Unaudited – prepared by management)

Share capital
	Note	Number		Amount		Reserves		Deficit	Total shareholders'equity
Balance at March 31, 2021Net loss for the period		3,000,000-	$	150,000-	$	--	$	-(7,500)	$150,000(7,500)
Balance at December 31, 2021		3,000,000	$	150,000	$	-	$	(7,500)	$142,500
Balance at March 31, 2022Shares issued for cashNet loss for the period		3,000,0002,000,000-	$	150,000135,740-		$ -10,628-		$ (13,448)-(70,204)	$136,552146,368(70,204)
Balance at December 31, 2022		5,000,000	$	285,740		$ (32,181)		$ (83,652)	$212,716

The accompanying notes are an integral part of these condensed interim financial statements.

Condensed Interim Statement of Cash Flows Nine months ended December 31, 2022 (Expressed in Canadian dollars) (Unaudited – prepared by management)

	2022	2021
Cash provided by (used in):
Operating activities
Net loss	$(70,204)	$(7,525)
Changes in non-cash working capital item:
Accounts payable and accrued liabilities	37,281	7,525
Cash used in operating activities	(32,923)	-
Financing activities
Proceeds on issuance of share capital	200,000	-
Share issuance costs	(37,757)	-
Cash provided by financing activities	162,243	-
Change in cash	129,320	150,000
Cash, beginning	126,575	-
Cash, ending	$255,895	$150,000

During the nine months ended December 31, 2022, included in share issuance costs was agent warrants valued at $10,628 and prepaid expenses of $15,875.

There were no non-cash transactions during the nine months ended December 31, 2021.

1. NATURE AND CONTINUANCE OF OPERATIONS

Adagio Capital Inc. (the "Company") is a company domiciled in Canada. The Company was incorporated on March 25, 2021 under the laws of the Province of British Columbia. The address of the Company's registered and head office is Suite 1510, 789 West Pender Street, Vancouver, B.C., V6C 1H2.

On December 21, 2022, the Company completed its initial public offering ("IPO") and its common shares were listed on the TSX-Venture Exchange ("TSX-V") as a Capital Pool Company ("CPC") as defined in Policy 2.4 of the TSX-V Corporate Finance Manual. The Company's principal business is the identification and evaluation of companies, assets or businesses with a view to completing a Qualifying Transaction ("QT"). Such a transaction will be subject to shareholder and regulatory approval.

2. SIGNIFICANT ACCOUNTING POLICIES

Statement of Compliance

These unaudited condensed interim consolidated financial statements, including comparatives, have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" ("IAS 34") using accounting policies consistent with the International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB") and Interpretations of the IFRS Interpretations Committee. In addition, these financial statements have been prepared using the accrual basis of accounting except for cash flow information. These financial statements are presented in Canadian dollars unless otherwise noted.

Approval of the financial statements

The condensed interim consolidated financial statements of the Company for the nine months ended December 31, 2022 were reviewed by the Audit Committee and approved and authorized for issue by the Board of Directors on February 27, 2023.

Basis of measurement

These financial statements have been prepared on an historical cost basis, except for financial instruments classified as financial instruments at fair value through profit or loss, which are stated at fair value. In addition, these financial statements have been prepared using the accrual basis of accounting except for cash flow information.

Functional and presentation currency

These financial statements are presented in Canadian dollars, which is the Company's functional currency.

Use of estimates and judgments

The preparation of financial statements in conformity with IFRS requires management to make estimates, judgments and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the period. Significant areas requiring the use of management estimates relate to the assessment of the Company's ability to continue as a going concern and whether there are events or conditions that may give rise to significant uncertainty. Actual results could differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

3. SIGNIFICANT ACCOUNTING POLICIES

Share capital

Common shares issued for non-monetary consideration are recorded at their fair value on the measurement date and classified as equity. The measurement date is defined as the earliest of the date at which the commitment for performance by the counterparty to earn the common shares is reached or the date at which the counterparty's performance is complete.

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

Loss per share

Basic loss per share is computed by dividing the net loss available to common shareholders by the weighted average number of common shares outstanding during the period. The dilutive effect of outstanding options and warrants and their equivalents are reflected in diluted earnings per share. The computation of diluted earnings per share assumes conversion, exercise or contingent issuance of securities only when such conversion, exercise or issuance would have a dilutive effect on earnings per share.

Basic loss per share is calculated using the weighted-average number of shares outstanding during the period. Outstanding common shares that are contingently cancelable are excluded from the weighted average number of shares outstanding.

Income taxes

Income taxes are recognized for the estimated taxes payable for the current period, and deferred taxes are recognized for temporary differences between the tax and accounting bases of assets and liabilities, and for the benefit of losses available to be carried forward for tax purposes that are more likely than not to be realized. To the extent that the Company does not consider it more likely than not that a deferred tax asset will be recovered, it provides a valuation allowance against the excess. Deferred tax assets and liabilities are measured using enacted or substantially enacted tax rates expected to apply in the years in which the temporary differences are expected to be recovered or settled.

Financial instruments – recognition and measurement

The following is the Company's accounting policy for financial instruments under IFRS 9:

(i) Classification

The Company classifies its financial instruments in the following categories: at fair value through profit and loss ("FVTPL"), at fair value through other comprehensive income (loss) ("FVTOCI") or at amortized cost. The Company determines the classification of financial assets at initial recognition. The classification of debt instruments is driven by the Company's business model for managing the financial assets and their contractual cash flow characteristics.

Equity instruments that are held for trading are classified as FVTPL. For other equity instruments, on the day of acquisition the Company can make an irrevocable election (on an instrument-by-instrument basis) to designate them as at FVTOCI. Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL (such as instruments held for trading or derivatives) or if the Company has opted to measure them at FVTPL.

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

Financial instruments – recognition and measurement(continued)

(ii) Measurement

Financial assets and liabilities at amortized cost

Financial assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs, respectively, and subsequently carried at amortized cost less any impairment.

Financial assets and liabilities at FVTPL

Financial assets and liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed in the statements of loss. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included in the statements of loss in the period in which they arise.

(iii) Impairment of financial assets at amortized cost

The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance for the financial asset at an amount equal to the twelve month expected credit losses. The Company shall recognize in the statements of loss and comprehensive loss, as an impairment gain or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized.

(iv) Derecognition

Financial assets

The Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers the financial assets and substantially all of the associated risks and rewards of ownership to another entity.

Financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognizes a financial liability when the terms of the liability are modified such that the terms and / or cash flows of the modified instrument are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

Gains and losses on derecognition are generally recognized in profit or loss.

Certain new accounting standards, amendments to standards and interpretations have been issued, effective for annual periods beginning on or after December 31, 2022. These standards have been assessed to not have a significant impact on the Company's financial statements.

4. SHARE CAPITAL

Authorized

The Company is authorized to issue an unlimited number of common shares without nominal or par value.

Issued

On December 21, 2022, the Company completed its IPO and issued 2,000,000 common shares for gross proceeds of $200,000. The Company incurred costs of $33,632, paid a finder's fee of $20,000 and issued 200,000 agent warrants, entitled the holder to acquire one common share per warrant for $0.10 for a period of two years. The Company has estimated the fair value of the agent warrants to be $10,628 based on the Black-Scholes Option Pricing Model. The assumptions used for the Black-Scholes valuation of the agent warrants were as follows: a risk-free interest rate of 2.29%, an expected life of two years, a dividend rate of 0%, forfeiture rate of 0%, and an annualized volatility of 100%.

During the year ended March 31, 2021, the Company issued 3,000,000 common shares at a price of $0.05 for proceeds of $150,000.

Reserve

The reserve records items recognized as share-based compensation expense and other share-based payments until such time that the stock options or warrants are exercised, at which time the corresponding amount will be transferred to share capital. Any fair value attributed to the warrants is recorded in the reserve. If the warrants expire unexercised, the value attributed to the warrants is transferred to deficit.

Stock options

The Company has a rolling stock option plan (the "Plan") that authorizes the board of directors to grant incentive stock options to directors, officers, consultants and employees, whereby a maximum of 10% of the issued common shares are reserved for issuance under the plan. Under the Plan, the exercise price of each option may not be less than the market price of the Company's shares at the date of grant. Options granted under the Plan will have a term not to exceed five years and be subject to vesting provisions as determined by the board of directors of the Company.

As at December 31, 2022 the Company did not have any stock options outstanding.

Warrants

The following table summarizes the Company's warrant activity:

	Numberof Warrants	WeightedAverageExercise Price
Outstanding, March, 31, 2022Issued	-200,000	$-0.10
Outstanding,December31, 2022	200,000	$0.10

As at December 31, 2022, the Company had 200,000 warrants exercisable at $0.10 per warrant to December 21, 2024.

5. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

As at December 31, 2022, the Company's only financial instruments is comprised of cash. The fair value of this financial instruments approximates its' carrying value due to its short-term maturity. Fair values of financial instruments are classified in a fair value hierarchy based on the inputs used to determine fair values. The 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 that are observable for the asset or liability either directly or indirectly; and Level 3 – Inputs that are not based on observable market data.

As at December 31, 2022, the fair value of cash held by the Company was based on level 1 inputs of the fair value hierarchy.

The Company's risk exposures and the impact on the Company's financial instruments are summarized below:

Credit risk

Credit risk is the risk of loss associated with the counterparty's inability to fulfill its payment obligations. The Company believes it has no significant credit risk.

Liquidity risk

Liquidity risk is the risk that the Company cannot meet its financial liabilities as they become due. As at December 31, 2022, the Company had a cash balance of $255,895 to settle liabilities of $43,179 and as such, is not exposed to significant liquidity risk.

Market risk

Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and commodity and equity prices.

(a) Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in the market interest rates. The Company's cash is held in an account with a major Canadian financial institution. The funds may be withdrawn at any time without penalty.

(b) Foreign currency risk

The Company does not have assets or liabilities in a foreign currency and therefore is not exposed to foreign currency risk.

(c) Price risk

The Company is exposed to price risk with respect to equity prices. Equity price risk is defined as the potentially adverse impact on the Company's ability to obtain equity financing due to movements in individual equity prices or general movements in the level of the stock market. The Company closely monitors individual equity movements and the stock market to determine the appropriate course of action to be taken by the Company.

6. CAPITAL MANAGEMENT

Capital is comprised of the Company's shareholders' equity and any debt that it may issue. As at December 31, 2022, the Company's shareholders' equity was $212,716. The Company's objectives when managing capital are to maintain financial strength and to protect its ability to meet its future liabilities, to continue as a going concern, to maintain creditworthiness and to maximize returns for shareholders over the long term. Protecting the ability to pay current and future liabilities includes maintaining capital above minimum

regulatory levels, current financial strength rating requirements and internally determined capital guidelines and calculated risk management levels.

Cash on hand will only be sufficient to identify and evaluate a limited number of assets and businesses for the purpose of identifying and completing a Qualifying Transaction. Additional funds may be required to finance the Company's Qualifying Transaction.

Cash from proceeds of share issuance are restricted pursuant to section 8.4 of TSX-V policy 2.4 as follows:

• (a) Until the Completion of the Qualifying Transaction, no more than the lesser of 30% of the gross proceeds from the sale of securities issued by the Company and $210,000 may be used for purposes other than as provided in section 8.3.
• (b) Until the Completion of the Qualifying Transaction, no proceeds from the sale of securities of the Company may be used to acquire or lease a vehicle.
• (c) The restrictions in this Policy on expenditures and the use of proceeds continue to apply until Completion of the Qualifying Transaction.
• (d) If the Company completes a Qualifying Transaction before spending the entire proceeds on identifying and evaluating properties or businesses, the Company may use the remaining funds to finance or partly finance the acquisition of, or participation in the significant assets.

7. RELATED PARTY

The Company has identified all of the directors and officers as its key management personnel. During the period ended December 31, 2022 and 2021, the Company did not incur transactions with directors and officers, or companies that are controlled by directors or officers of the Company. In addition, there are no amounts owing to any related parties.