Austin Resources Ltd. — Interim / Quarterly Report 2022

Aug 24, 2022

AUSTIN RESOURCES LTD. CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

THREE AND SIX MONTHS ENDED JUNE 30, 2022

(EXPRESSED IN CANADIAN DOLLARS) (UNAUDITED)

Notice To Reader

The accompanying unaudited condensed interim consolidated financial statements of Austin Resources Ltd. (the "Company") have been prepared by and are the responsibility of management. The unaudited condensed interim consolidated financial statements have not been reviewed by the Company's auditors.

Austin Resources Ltd.

Condensed Interim Consolidated Statements of Financial Position (Expressed in Canadian Dollars) (Unaudited)

		As at		As at
		June 30,	December 31,
		2022		2021
ASSETS
Current assets
Cash and cash equivalents	$	10,389	$	21,574
Amounts receivable		3,714		2,809
Total assets	$	14,103	$	24,383
EQUITY (DEFICIENCY) AND LIABILITIES
Current liabilities
Accounts payable and accrued liabilities (note 7)	$	21,135	$	32,685
Relatedpartyloan(note 3)		299,615		263,093
Total liabilities		320,750		295,778
Deficiency
Issued capital (note 4)		6,144,075		6,144,075
Deficit		(6,450,722)		(6,415,470)
Total deficiency		(306,647)		(271,395)
Total deficiency and liabilities	$	14,103	$	24,383

The accompanying notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.

Nature of operations and going concern (note 1) Commitments and contingencies (note 9)

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Austin Resources Ltd.

Condensed Interim Consolidated Statements of Loss and Comprehensive Loss (Expressed in Canadian Dollars) (Unaudited)

	Three months	Three months	Three months	Three months		Six months	Six months	Six months
		ended		ended		ended		ended
		June 30,		June 30,		June 30,		June 30,
		2022		2021		2022		2021
Operating expenses
Professional fees (note 7)	$	10,070	$	16,056	$	19,757	$	25,750
Interest expense (note 3)		5,851		4,737		11,522		9,115
Shareholder communication and filing fees		2,348		6,539		3,081		17,477
Bank charges		94		98		231		286
Loss for the period before other items		(18,363)		(27,430)		(34,591)		(52,628)
Foreign exchange(loss)		(342)		(35)		(661)		310
Total net loss and comprehensive
loss for theperiod	$	(18,705)	$	(27,465)	$	(35,252)	$	(52,318)
Basic and diluted net lossper share (note 8)	$	(0.00)	$	(0.00)	$	(0.00)	$	(0.00)
Weighted average number of common
shares outstanding - basic and diluted		21,346,618		21,346,618		21,346,618		21,346,618

The accompanying notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.

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Austin Resources Ltd.

Condensed Interim Consolidated Statements of Cash Flows (Expressed in Canadian Dollars) (Unaudited)

		Six months	Six months	Six months
		ended		ended
		June 30,		June 30,
		2022		2021
Operating activities
Net loss for the period	$	(35,252)	$	(52,318)
Adjustments for:
Accrued interest expense		11,522		9,115
Changes in non-cash working capital items:
Amounts receivable		(905)		(450)
Accountspayable and accrued liabilities		(11,550)		21,484
Net cash used in operating activities		(36,185)		(22,169)
Financing activities
Proceeds received from relatedpartyloan		25,000		20,000
Net cashprovided by financing activities		25,000		20,000
Net change in cash and cash equivalents		(11,185)		(2,169)
Cash and cash equivalents, beginning ofperiod		21,574		24,138
Cash and cash equivalents, end ofperiod	$	10,389	$	21,969
Supplemental information
Conversion of accountspayable into relatedpartyloan(note 7)	$	-	$	34,964

The accompanying notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.

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Austin Resources Ltd.

Condensed Interim Consolidated Statements of Changes in Equity (Deficiency) (Expressed in Canadian Dollars) (Unaudited)

	Number of		Issued
	shares		capital	Deficit	Total
Balance, December 31, 2020	21,346,618	$	6,144,075	$ (6,320,331) $	(176,256)
Net loss and comprehensive loss for theperiod	-		-	(52,318)	(52,318)
Balance, June 30, 2021	21,346,618	$	6,144,075	$ (6,372,649) $	(228,574)
Balance, December 31, 2021	21,346,618	$	6,144,075	$ (6,415,470) $	(271,395)
Net loss and comprehensive loss for theperiod	-		-	(35,252)	(35,252)
Balance, June 30, 2022	21,346,618	$	6,144,075	$ (6,450,722) $	(306,647)

The accompanying notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.

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Austin Resources Ltd. Notes to Condensed Interim Consolidated Financial Statements Three and Six Months Ended June 30, 2022 (Expressed in Canadian Dollars) (Unaudited)

1. Nature of operations and going concern

Austin Resources Ltd. (individually, or collectively with its subsidiary, as applicable, “Austin Resources”, or the “Company”) completed the sale of all of its properties in Chile during the year ended December 31, 2020 and as a result of the transaction, the Company did not maintain the requirements for a TSX Venture Tier 2 company and its listing was transferred to the NEX board of the TSX Venture Exchange (the "NEX"). While the Company currently holds no mineral properties, it retains its classification as a ‘Mineral Exploration/Development’ company.

The Company’s head office and principal address in Canada is The Canadian Venture Building, 82 Richmond St East, Suite 204, Toronto, Ontario, M5C 1P1.

On February 27, 2020, the Company transferred all of its interest in the mineral exploration properties in Chile held by Minera Azul Ventures Limitada ("Minera Azul"), the Company's wholly owned Chilean subsidiary. The Company retained a 1% net smelter royalty on its interest transferred with 50% of such royalty retained being able to be acquired for US$63,166. As a result of the completion of the agreement with Bluerock Resources SPA, Minera Azul no longer had any assets. On May 14, 2020, the Company wound up operations in Chile and disposed of its interest in Minera Azul.

These unaudited condensed interim consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different from the carrying values as shown. As at June 30, 2022, the Company had not yet achieved profitable operations, had accumulated losses of $6,450,722 (December 31, 2021 - accumulated losses of $6,415,470) since inception, had a working capital deficiency of $306,647 (December 31, 2021 - working capital deficiency of $271,395) and expects to incur further losses in the search for a new business, all of which constitutes a material uncertainty which casts significant doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. There is no assurance that these funds will be available on terms acceptable to the Company or at all. These unaudited condensed interim consolidated financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. Such adjustments could be material.

Since December 31, 2019, the outbreak of the novel strain of coronavirus, specifically identified as “COVID-19”, has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and social distancing, have caused material disruption to businesses globally resulting in an economic slowdown. Global equity markets have experienced significant volatility and weakness. Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions. The duration and impact of the COVID-19 outbreak is unknown at this time, as is the efficacy of the government and central bank interventions. It is not possible to reliably estimate the length and severity of these developments and the impact on the financial results and condition of the Company in future periods.

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Austin Resources Ltd.

Notes to Condensed Interim Consolidated Financial Statements Three and Six Months Ended June 30, 2022 (Expressed in Canadian Dollars) (Unaudited)

2. Significant accounting policies

Statement of compliance

The Company applies International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board (“IASB”) and interpretations issued by the International Financial Reporting Interpretations Committee (“IFRIC”).

These unaudited condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting. Accordingly, they do not include all of the information required for full annual financial statements required by IFRS as issued by IASB and interpretations issued by IFRIC.

The policies applied in these unaudited condensed interim consolidated financial statements are based on IFRS issued and outstanding as of August 23, 2022, the date the Board of Directors approved the statements.

The same accounting policies and methods of computation are followed in these unaudited condensed interim consolidated financial statements as compared with the most recent annual financial statements as at and for the year ended December 31, 2021. Any subsequent changes to IFRS that are given effect in the Company’s annual financial statements for the year ending December 31, 2022 could result in restatement of these unaudited condensed interim consolidated financial statements.

New accounting standard not yet adopted

Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)

The IASB has published Classification of Liabilities as Current or Non-Current (Amendments to IAS 1) which clarifies the guidance on whether a liability should be classified as either current or non-current. The amendments:

• clarify that the classification of liabilities as current or non-current should only be based on rights that are in place"at the end of the reporting period"

• clarify that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability

• make clear that settlement includes transfers to the counterparty of cash, equity instruments, other assets or services that result in extinguishment of the liability.

This amendment is effective for annual periods beginning on or after January 1, 2022. Earlier application is permitted.The extent of the impact of adoption of this amendment has not yet been determined.

3. Related party loan

During the year ended December 31, 2019, the Company entered into a loan agreement with a shareholder of the Company in the amount of $100,000 at an interest rate of 10% per annum. During the year ended December 31, 2020, the Company incurred an additional loan from the shareholder in the amount of $70,000 which is comprised of $35,036 cash proceeds and $34,964 converted from accounts payable settled by the shareholder. During the year ended December 31, 2021, the Company incurred an additional loan from the shareholder in the amount of $60,000. During the six months ended June 30, 2022, the Company did not incurred an additional loan from the shareholder. During the three and six months ended June 30, 2022, the Company accrued interest expense of $5,851 and $11,522, respectively (three and six months ended June 30, 2021 - $4,737 and $9,115, respectively). As at June 30, 2022, the Company owes $299,615 (December 31, 2021 - $263,093) including accrued interest.

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Notes to Condensed Interim Consolidated Financial Statements Three and Six Months Ended June 30, 2022 (Expressed in Canadian Dollars) (Unaudited)

Austin Resources Ltd.

4. Share capital

a) Authorized share capital

The authorized share capital consisted of an unlimited number of common shares without par value.

b) Common shares issued

	Number of
	common
	shares	Amount
Balance, December 31, 2020. June 30, 2021, December 31, 2021
and June 30,2022	21,346,618 $	6,144,075

5. Warrants

The Company had no warrants outstanding as at June 30, 2022 and December 31, 2021.

6. Stock options

The Company has adopted a stock option plan (the “Plan"), to be administered by the Directors of the Company. Under the Plan, the Company may grant options to directors, officers, employees and consultants to purchase shares of the Company. The Plan provides for the issuance of stock options to acquire up to 10% of the Company's issued and outstanding capital. The plan is a rolling plan as the number of shares reserved for issuance pursuant to the grant of stock options will increase as the Company’s issued and outstanding share capital increases. Options granted under the Plan will be for a term not to exceed five years. The plan provides that it is solely within the discretion of the Board to determine who should receive stock options, in what amounts, and determine vesting terms. The exercise price for any stock option shall not be lower than the market price of the underlying common shares at the time of grant.

Each stock option converts into one common share of the Company on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry. The Company settles stock options exercised through the issuance of common shares from treasury.

The Company had no stock options outstanding as at June 30, 2022 and December 31, 2021.

7. Related party transactions

The Chief Financial Officer is an employee of Marrelli Support Services Inc. ("MSSI"), a firm providing accounting services. During the three and six months ended June 30, 2022, the Company incurred $2,743 and $9,115, respectively (three and six months ended June 30, 2021 - $12,741 and $19,120, respectively) for accounting services (included in professional fees) rendered by MSSI. As at June 30, 2022, MSSI was owed $2,400 (December 31, 2021 - $1,784) and this amount was included in accounts payable and accrued liabilities. The amount is unsecured, non-interest bearing and due on demand.

Refer to note 3.

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Notes to Condensed Interim Consolidated Financial Statements Three and Six Months Ended June 30, 2022 (Expressed in Canadian Dollars) (Unaudited)

Austin Resources Ltd.

8. Loss per share

For the three and six months ended June 30, 2022, basic and diluted loss per share has been calculated based on the loss attributable to common shareholders of $18,705 and $35,252, respectively (three and six months ended June 30, 2021 - $27,465 and $52,318, respectively) and the weighted average number of common shares outstanding of 21,346,618 (three and six months ended June 30, 2021 - 21,346,618).

9. Commitments and contingencies

The Company’s activities were subject to various laws and regulations. These laws and regulations are continually changing and generally becoming more restrictive. The Company believes its operations are materially in compliance with all applicable laws and regulations. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations.

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