CHAR Technologies Ltd. — Interim / Quarterly Report 2023

Feb 27, 2023

Shine Box Capital Corp. Condensed Interim Financial Statements

For the three months ended December 31, 2022

(Unaudited)

Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the interim financial statements, the statements must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.

The interim financial statements of Shine Box Capital Corp. for the period ended December 31, 2022 have not been reviewed by the auditors of the Corporation.

In Canadian Dollars

Shine Box Capital Corp. Condensed Interim Statements of Financial Position

As at:

Note Assets Current Cash 4	December 31, 2022 (Unaudited) $ 42,517	June 30, 2022 (Audited) $
		68,854
Total assets	42,517	68,854
Liabilities & Shareholder’s Equity Current Liabilities Accountspayable and accruals	12,080	8,000
Shareholders' Equity Share capital 5 Contributed surplus Deficit	315,395 76,065 (361,022)	315,395 76,065 (330,606)
Total shareholders’ equity	30,437	60,854
Total liabilities and shareholders’ equity	42,517	68,854

Approved on behalf of the Board “Nebojsa Dobrijevic” “Gopi Pillai” Nebojsa Dobrijevic Gopi Pillai Director Director

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

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Shine Box Capital Corp. Condensed Interim Statements of Operations and Comprehensive Loss

In Canadian Dollars

		Three months	Three months	Six months	Six months
		ended	ended	ended	ended
		December 31,	December 31,	December 31,	December 31,
		2022	2021	2022	2021
		(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
		$	$	$	$
Expenses
Filing and communication fees		285	5,097	680	7,717
Professional fees		29,647	60,479	29,737	63,506
Loss and comprehensive loss		29,932	65,576	30,416	71,223
Loss per share
Basic and Diluted		$(0.009)	$(0.020)	$(0.010)	$(0.020)
Weighted number of shares outstanding	6	3,000,000	3,000,000	3,000,000	3,000,000

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

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Shine Box Capital Corp. Condensed Interim Statement of Changes in Equity

In Canadian Dollars

(Unaudited)

	Share	Contributed		Shareholders’
	Capital	Surplus	Deficit	Equity
	($)	($)	($)	($)
Balance July 1, 2021	315,395	76,065	(228,108)	163,352
Loss for the period	-		(71,223)	(71,223)
As at December 31, 2021	315,395	76,065	(299,331)	92,129
Balance July 1, 2022	315,395	76,065	(330,606)	60,854
Loss for theperiod	-	-	(30,416)	(30,416)
As at December 31, 2022	315,395	76,065	(361,022)	30,438

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

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Shine Box Capital Corp. Condensed Interim Statement of Cash Flows

In Canadian Dollars

		In Canadian Dollars
Cash provided by (used for) the following activities: Operating activities Net Loss Items not affecting cash Accounts payable and accruals	Six months ended December 31, 2022 (Unaudited) $ (30,416) 4,080	Six months ended December 31, 2021 (Unaudited) $
		(71,223) 11,387
Cash used in operating activities	(26,337)	(59,836)
Increase (decrease) in cash Cash, beginning of period	(26,337) 68,854	(59,836) 176,335
Cash, end ofperiod	42,517	116,499

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

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Shine Box Capital Corp. Notes to the Condensed Interim Financial Statements For the three months ended September 30, 2022 In Canadian Dollars (Unaudited)

1. Incorporation and operations

Shine Box Capital Corp. (the "Company") was incorporated under the laws of the Province of Alberta on March 6, 2018 by Certificate of Incorporation issued pursuant to the provisions of the Business Corporations Act (Alberta). The Company is classified as a Capital Pool Corporation 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 address of the registered office is 1900, 520 3[rd] Avenue SW Calgary, Alberta.

The Company issued 3,000,000 common shares for an amount of $150,000 and on the Company’s prospectus for an Initial Public Offering (“IPO”) of the Company’s common shares was receipted by the regulatory authorities. The IPO closed on November 19, 2019 with 3,000,000 common shares being issued at a price of $0.10 per common share. The Company’s shares commenced trading on November 29, 2019 under the symbol RENT.P.

The current challenging economic climate relating to the effect of the Coronavirus (COVID-19) may lead to challenges in managing cash flows and the ability to raise capital. These items may have a direct adverse impact on the Company’s ability to close the Transaction.

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.

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Shine Box Capital Corp. Notes to the Condensed Interim Financial Statements For the three months ended September 30, 2022 In Canadian Dollars (Unaudited)

2. Basis of preparation

Statement of compliance

The condensed interim financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the international Accounting Standards Board (“IASB”), and comply with IAS 34. These condensed interim financial statements does not include all of the information required of a full audited financial report and it is therefore recommended that this report be read in conjunction with the audited financial statements for the year ended June 30, 2022.

These condensed interim financial statements 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 are stated in Canadian dollars, which is also the Company’s functional currency, and were prepared on a going concern basis, under the historical cost convention.

Use of estimates and judgments

The preparation of 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 judgements, estimates and assumptions as reported in the Company’s June 30, 2022 audited 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 financial statements for the year ended June 30, 2022 and should be read in conjunction with those annual financial statement sand the notes thereto.

4. Cash and cash equivalents

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.

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Shine Box Capital Corp. Notes to the Condensed Interim Financial Statements For the three months ended September 30, 2022 In Canadian Dollars (Unaudited)

5. Share capital

Authorized

Unlimited number of voting Common Shares, without nominal or par value

Unlimited number of non-voting Preferred Shares, without nominal or par value

Issued Common Shares

						Number of
						Shares	$
As at June	30,	2022	and December	**31, **	2022	6,000,000	315,395

Included in the common shares outstanding are 3,000,000 common shares held in escrow and will be released as follows; 10% of the common will be released on the completion of the Qualifying Transaction and an additional 15% will be released on the dates 6 months, 12 months, 18 months, 30 months and 36 months following the initial release.

These common shares, which are considered contingently issuable until the Company completes a Qualifying Transaction, are not considered outstanding for the purpose of the loss per share calculation.

Share Based Payments

The Company has adopted an incentive stock option plan which provides that the Board of Directors of the Company may from time to time. In its discretion, and in accordance with the Exchange requirements, grant to directors, officers, employees and consultants to the Company, non-transferable options to purchase Common Shares, provided that the of Common Shares reserved for issuance will not exceed 10% of the issued and outstanding Common Shares. However, other then in connection with a Qualifying Transaction, during the time that the Company is a CPC, not exceed 10 % of the Common Shares of the company issued and outstanding at the closing of the Company’s initial public offering. Such options will be exercisable for a period of 5 years from the date of the grant.

As a part of the close of the initial public offering (IPO), the Company granted 600,000 options at $0.10 per share to the directors and officers of the Company exercisable for a period of 5 years that all vested at the time of the grant.

The Contributed Surplus balance is comprised of:

Directors and officers’ options Agent’s options Balance at June 30 and December 31, 2022	$ 54,594 21,671 $ 76,065

The following table reflects the continuity of options granted under the Plan as of September 31, 2022:

Expiry Date	Exercise Price	Outstanding	Exercisable	Remaining
		December 31t		Contractual Years
November 2024	$0.10	600,000	600,000	1.9

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Shine Box Capital Corp. Notes to the Condensed Interim Financial Statements

For the three months ended September 30, 2022 In Canadian Dollars (Unaudited)

6. Related party transactions

Key management personnel consist of officers and directors of the Company. Other than stock options granted to directors, no compensation was paid to key management personnel during the current period.

Transactions with related parties are incurred in the normal course of business

7. 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.

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