Bluewater Acquisition Corp. — Interim / Quarterly Report 2021

Jan 29, 2021

Bluewater Acquisition Corp. Condensed Interim Financial Statements

For the three months and six months ended November 30, 2020 (unaudited)

Bluewater Acquisition Corp. Condensed Interim Statements of Financial Position As at November 30, 2020 and May 31, 2020

	November 30, 2020(unaudited)	May 31, 2020(audited)
Assets
Current
Cash (Note 4)	$107,046	$187,607
Prepaid expenses	-	5,505
Total assets	$107,046	$193,112
Liabilities
Current
Accounts payable and accrued liabilities	$14,464	$17,061
Total liabilities	$14,464	$17,061
Shareholders' Equity
Share capital (Note 5)	$454,682	$454,682
Stock compensation reserve	79,119	79,119
Deficit	(441,219)	(357,750)
Total shareholders' equity	$92,582	$176,051
Total shareholders' equity and liabilities	$107,046	$193,112

Approved by the Board of Directors:

Director Director

signed "Antonios Backos" signed "Mihalis Sapountzoglou"

Bluewater Acquisition Corp.

	Three months ended November 30			Six months ended November 30
		2020		2019		2020		2019
Expenses
General and administrative	$	35,941	$	32,648	$	83,469	$	72,006
Net loss and comprehensive loss	$	35,941	$	32,648	$	83,469	$	72,006
Basic and diluted loss per share	$	(0.01)	$	(0.01)	$	(0.02)	$	(0.02)
Weighted average common sharesoutstanding(Note 5)		4,216,500		4,216,500		4,216,500		4,216,500

Unaudited Condensed Interim Statements of Loss and Comprehensive Loss For the three months and six months ended November 30, 2020 and November 30, 2019

Bluewater Acquisition Corp.

	ShareCapital($)	StockCompensationReserve($)	Deficit($)	Shareholders'Equity($)
Balances,May 31, 2019	454,682	79,119	(202,465)	331,336
Net loss	-	-	(72,006)	(72,006)
Balances, November30, 2019	453,688	79,119	(274,471)	259,330
Balances, May 31, 2020	454,682	79,119	(357,750)	176,051
Net loss	-	-	(83,469)	(83,469)
Balances, November30, 2020	454,682	79,119	(441,219)	92,582

Unaudited Condensed Interim Statement of Changes in Shareholders' Equity For the three months and six months ended November 30, 2020 and November 30, 2019

Bluewater Acquisition Corp. Unaudited Condensed Interim Statements of Cash Flows For the three months and six months ended November 30, 2020 and November 30, 2019

Three months ended November 30	Six months ended November 30

	2020	2019	2020	2019
Cash flows used by the followingactivities
Operating activities
Net loss for the periodChanges in non-cash working capital:	$(35,941)	$(32,648)	$(83,469)	$(72,006)
Prepaid expenses	2,753	-	5,505	-
Accounts payable and accrued liabilities	(3,592)	(3,023)	(2,597)	(5,436)
Cash flows used in operating activities	(36,780)	(35,671)	(80,561)	(77,442)
Net decreasein cash	(36,780)	(35,671)	(80,561)	(77,442)
Cash, beginning of period	143,826	311,802	187,607	353,573
Cash, end of period	$107,046	$276,131	$107,046	$276,131

1. Nature of organization and continuance of operations

Bluewater Acquisition Corporation (formerly 10674419 Canada Corporation) (the "Company") was incorporated on March 9, 2018 by Certificate of Incorporation issued pursuant to the provisions of the Canada Business Corporations Act. The Company is classified as a Capital Pool Company ("CPC") as defined in Policy 2.4 of the TSX Venture Exchange (the "Exchange"). The principal business of the Company is to identify and evaluate assets or businesses with a view to potentially acquire them or an interest therein by completing a purchase transaction, by exercising of an option or by any concomitant transaction. The purpose of such an acquisition is to satisfy the related conditions of a qualifying transaction under the Exchange rules.

The head office and registered office of the Company is located at 1133 Yonge St. 3rd floor Toronto, Ontario M4T 2Y7.

The Company issued 4,216,500 common shares for an amount of $421,650 and on October 30, 2018 the Company's prospectus for an Initial Public Offering ("IPO") of the Company's common shares was received by the regulatory authorities. The IPO closed on October 30, 2018 and a total of 4,216,500 common shares were issued at a price of $0.10 per common share. The Company's shares commenced trading on November 1, 2018 under the symbol BAQ-P.

Where an acquisition or participation is warranted, additional funding may be required. The ability of the Company to fund its potential future operations and commitments is dependent upon the ability of the Company to obtain additional financing.

There is no assurance that the Company will identify a business or asset that warrants acquisition or participation within the time limitations permissible under the policies of the Exchange, at which time the Exchange may suspend or de-list the Company's shares from trading.

The novel coronavirus ("COVID-19") outbreak was declared a pandemic by the World Health Organization on March 11, 2020. This has resulted in significant economic uncertainty and governments worldwide are enacting emergency measures to contain 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 financial markets have experienced significant volatility and weakness as a consequence of this economic uncertainty. The duration and impact of the COVID-19 outbreak is unknown as this time, as is the effectiveness of interventions by governments and central banks. The full extent of the impact on the Company's future financial results is uncertain given the length and severity of these developments cannot be reliably estimated.

2. Basis of preparation

Statement of compliance

The condensed interim financial statements were prepared in accordance with IAS 34 Interim Financial Reporting using accounting policies consistent with International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB"). These condensed interim financial statements do not include all disclosures normally provided in annual financial statements and should be read in conjunction with the Company's audited annual financial statements for the period ended May 31, 2020.

These unaudited condensed interim financial statements were authorized with a resolution of the Board of Directors on January 28, 2021.

Basis of measurement

These financial statements have been prepared on the historical cost, accrual basis of accounting, except for share-based payments. These financial statements are stated in Canadian dollars which is the Company's functional currency and have been prepared on a going concern basis.

2. Basis of preparation (continued)

Use of estimates and judgments

The preparation of the financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates. These condensed interim financial statements have been prepared using the same estimates and judgments as reported in the Company's May 31, 2020 annual financial statements.

3. Significant accounting policies

These condensed interim financial statements have been prepared, for all periods presented, following the same accounting policies and methods of computation as the annual financial statements for the period ended May 31, 2020.

4. Cash

The proceeds raised from the issuance of share capital may only be used to identify and evaluate assets or businesses for future investment, with the exception that not more than the lesser of 30% of the gross proceeds and $210,000 may be used to cover prescribed costs of issuing the common shares or administrative and general expenses of the Company. These restrictions may apply until completion of a qualifying transaction by the Company as defined under the policies of the Exchange.

5. Share capital

Authorized:

Unlimited number of voting Common Shares Unlimited number of Preferred shares issuable in series

Issued: Common shares:

	Number of Shares	$
Issued on incorporation	-	-
Issued at $0.05 per share (i)	3,500,000	175,000
As at May 31, 2018	3,500,000	175,000
Issued at $0.10 per share (ii)	4,216,500	279,682
As at May 31, 2019 and 2020	7,716,500	454,682
As at November30, 2020	7,716,500	454,682

(i) Of the common shares issued, 3,500,000 are held in escrow. 10% of the common shares held in escrow will be released on the issuance of the Final Exchange Bulletin and an additional 15% will be released on the dates 6 months, 12 months, 18 months, 24 months, 30 months and 36 months following the initial release. These common shares are considered contingently issuable until the Company completes a qualifying transaction. These common shares that are held in escrow are not considered to be outstanding for the purpose of the loss per share calculation.

5. Share capital (continued)

(ii) On October 30, 2018, the Company completed their initial public offering by issuing 4,216,500 common shares at $0.10 per share for gross proceeds of $421,650. Share issuance costs included costs of $71,194 and deferred financing costs of $64,876. In addition, the Company granted 100,000 agent warrants with a value of $5,898 for net proceeds of $279,682.

Stock Option Plan

The Company has adopted an incentive stock option plan in accordance with the policies of the Exchange (the "Stock Option Plan") which provides that the Board of Directors of the Company may from time to time, in its discretion, grant to directors, officers, employees and consultants of the Company non- transferable options to purchase common shares, provided that the number of common shares reserved for issuance under the Stock Option Plan shall not exceed ten percent (10%) of the issued and outstanding common shares. The Stock Option Plan provides that options shall be exercisable for the duration set out in the individual option agreements, which in no event shall exceed ten (10) years from the date such options are granted. In addition, the number of common shares reserved for issuance to any one person shall not exceed five percent (5%) of the issued and outstanding common shares and the number of common shares reserved for issuance to any one consultant will not exceed two percent (2%) of the issued and outstanding common shares. The Board of Directors determines the price per common share and the number of common shares which may be allocated to each director, officer, employee and consultant and all other terms and conditions of the option, subject to the rules of the Exchange.

The following is a summary of the changes in the Company's Stock Option Plan during the period:

	Number ofoptionsoutstanding	Number ofoptionsexercisable	Exercise Price	Weightedaverage life
As at May 31, 2019	-	-	-	-
Granted	771,650	771,650	$0.10	9.43
As at May 31, 2020	771,650	771,650	$0.10	8.43
As at November30, 2020	771,650	771,650	$0.10	7.93

Warrants

	Number ofwarrantsoutstanding	Value	ExercisePrice	Weightedaveragelife
As at May 31, 2019	-	-	-	-
Warrants issued on initial public offering (Note 6 (ii))	100,000	$5,898	$0.10	1.43
As at May 31, 2020	100,000	$5,898	$0.10	0.43
Expired	100,000	$5,898	$0.10	0.00
As at November30, 2020	-	-	-	-

All outstanding warrants expired unexercised on November 1, 2020.

6. Capital disclosures

The Company's capital consists of share capital. The Company's objective for managing capital is to maintain sufficient capital to identify, evaluate and complete an acquisition or other transaction as disclosed in Note 1.

The Company sets the amount of capital in relation to risk and manages the capital structure and makes adjustments to it in light of changes to economic conditions and the risk characteristics of the underlying assets.

The Company's objectives when managing capital are:

• i. to maintain a flexible capital structure, which optimizes the cost of capital at acceptable risk; and,
• ii. to maintain investor, creditor and market confidence in order to sustain the future development of the business.

The Company is not subject to any externally or internally imposed capital requirements at period end.

7. Financial instruments

The Company, as part of its operations, carries financial instruments consisting of cash and accounts payable and accrued liabilities. Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument.

The Company classifies all its financial assets and liabilities into one of the following categories: financial assets or financial liabilities at amortized cost, financial assets or financial liabilities at fair value through profit and loss and financial assets through other comprehensive income. All financial instruments are measured on the balance sheet initially at fair value. Subsequent measurement and recognition of the changes in fair value of financial instruments depends upon their initial classifications:

Cash is classified as financial asset measured at fair value through profit and loss. Cash is measured at fair value with subsequent changes in fair value recognized in current period net income. Transaction costs are expensed in net income. Gains and losses arising from changes in fair value are presented in net income within other gains and losses in the period in which they arise.

Accounts payable and accrued charges are classified as financial liabilities measured at amortized cost. Financial liabilities at amortized cost are recognized initially at fair value plus any directly attributable transaction costs and are subsequently recorded at amortized cost.

Fair value

Fair value represents the price at which a financial instrument could be exchanged in an orderly market, in an arm's length transaction between knowledgeable and willing parties who are under no compulsion to act. The Company classifies the fair value of the financial instruments according to the following hierarchy based on the amount of observable inputs used to value the instrument.

• Level 1: Fair value measurements are those derived from quoted prices (unadjusted) in the active market for identical assets or liabilities.
• Level 2: Fair value measurements are those derived from inputs other than quoted prices that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (derived from prices).
• Level 3: Fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data.

7. Financial instruments (continued)

The fair value of cash is determined based on Level 1 inputs. The carrying amount of the Company's cash, and accounts payable and accrued liabilities approximates their fair value due to the short-term maturities of these items.

It is management's opinion that the Company is not exposed to significant credit, interest, or currency risks arising from these financial instruments except as otherwise disclosed.

Credit risk

Credit risk is the risk of loss associated with the counterparty's inability to fulfill its payment obligations and arises from the Company's cash balance. As at November 30, 2020, the Company had $107,046 in cash (May 31, 2020 - $187,607) held at a financial institution, a Canadian Chartered Bank. Management has assessed the risk of loss as minimal.

Liquidity risk

Liquidity risk is the risk that the Company is unable to meet its obligations as they fall due. The Company's approach to managing liquidity risk is to ensure that it will have sufficient working capital to meet liabilities when due. As of November 30, 2020, the Company had a cash balance of $107,046 (May 31, 2020 – $187,607) to pay liabilities of $14,464 (May 31, 2020 – $17,061).

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.

i. Interest rate risk

The Company has no interest-bearing debt.

ii. Foreign currency risk

The Company does not have assets or liabilities in a foreign currency.

ii. Commodity risk

The Company is not exposed to commodity price risk.