Fredonia Mining Inc. — Interim / Quarterly Report 2021

Mar 1, 2021

Richmond Road Capital Corp. Condensed Interim Financial Statements For the three months ended December 31, 2020 (Unaudited) (Expressed in Canadian Dollars)

Richmond Road Capital Corp. Condensed Interim Statements of Financial Position

As at:

Note Assets Current Cash 4	December 31, 2020 (Unaudited) $ 11,949	September 30, 2020 (Audited) $ 15,219
Total assets	$ 11,949	$ 15,219
Liabilities Current Liabilities Accounts payable and accruedliabilities	$ 110,925	$ 96,396
Shareholders' Deficiency Share capital 5 Contributed Surplus Deficit	$ 383,364 48,600 (530,940)	$ 383,364 48,600 (513,141)
Total shareholders’ deficiency	(98,976)	(81,177)
Total liabilities and shareholders’ deficiency	$ 11,949	$ 15,219
Going concern (Note 1) Letter of Intent (Note 10)

Approved on behalf of the Board of Directors

“Michael Doyle” “Berkley Pennock” Director Director

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

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Richmond Road Capital Corp. Condensed Interim Statements of Loss and Comprehensive Loss

For the three months ended December 31,

(Unaudited)

	Note	2020	2019
Expenses
Filing and communication fees		3,016	4,408
Professional fees		14,783	1,126
Net loss and comprehensive loss		(17,799)	(5,534)
Net loss per share
Basic and diluted		(0.01)	(0.00)
Weighted shares outstanding	6	3,000,000	3,000,000

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

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Richmond Road Capital Corp. Condensed Interim Statement of Changes in Shareholders’ Deficiency

(Unaudited)

	Share Capital ($) Contributed Surplus ($)	Deficit ($) Shareholders’ Deficiency ($)
Balance, September 30, 2019 Netlossforthe period	338,364 48,600 - -	(489,158) (102,194) (5,534) (5,534)
Balance, December 31, 2019	338,364 48,600	(494,692) (107,728)
Balance, September 30, 2020 Netlossforthe period	383,364 48,600 - -	(513,141) (81,177) (17,799) (17,799)
Balance, December 31, 2020	383,364 48,600	(530,940) (98,976)

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

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Richmond Road Capital Corp. Condensed Interim Statements of Cash Flows For the three months ended December 31,

(Unaudited)

		2020		2019
Cash provided by (used for) the following activities:
Operating activities
Net loss for the period	$	(17,799)	$	(5,534)
Changes in non-cash working capital		14,529		5,534
Cash flows used in operating activities		(3,270)		-
Decrease in cash		(3,270)		-
Cash, beginning of period		15,219		7,146
Cash, end ofperiod	$	11,949	$	7,146

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

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Richmond Road Capital Corp. Notes to the Condensed Interim Financial Statements For the three months ended December 31, 2020 and 2019 (unaudited)

1. Incorporation and operations

Richmond Road Capital Corp. (the "Company") was incorporated under the laws of Alberta, Canada on September 19, 2012. The Company is classified as a Capital Pool Company as defined in Policy 2.4 of the TSX Venture Exchange (the "Exchange"). The Company’s principal business activity is to identify and evaluate opportunities for an acquisition of an asset, assets or a business that will meet the definition of a “Qualifying Transaction” as defined in Policy 2.4 of the Exchange. The address of the registered head office is 1200, 700 – 2nd Street SW, Calgary, Alberta.

Where an acquisition or participation is warranted, additional funding will 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.

The Company issued 3,000,000 common shares (“Seed Shares”) for an amount of $150,000, and on November 7, 2012, the Company’s prospectus for an Initial Public Offering (“IPO”) of the Company’s common shares was accepted by the regulatory authorities. The IPO closed on November 16, 2012 and a total of 3,000,000 common shares were issued at a price of $0.10 per common share.

The Company was not successful in completing a Qualifying Transaction within the time limitation permissible under the policies of the Exchange. As a result, the Company moved its listing to the NEX board of the Exchange (“NEX”) and cancelled an aggregate of 1,000,000 Seed Shares. The Company’s shares now trade on the NEX and its symbol is RRD.H.

Going concern

These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As of December 31, 2020, the Company has a negative working capital balance of $98,976 (September 30, 2019 - $81,177), and for the three months ended, negative cash flows from operations of $3,270 (2019 - $nil), and a net loss of $17,799 (2019 - $5,534). As such, there is a material uncertainty related to these events and conditions that may cast significant doubt on the Company’s ability to continue as a going concern and therefore, it may be unable to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the ability of the Company to obtain necessary equity or other financing to complete its qualifying transaction. The ability of the Company to be successful in obtaining financing cannot be predicted at the present time. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

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.

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 letter of intent (Note 10).

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Richmond Road Capital Corp. Notes to the Condensed Interim Financial Statements For the three months ended December 31, 2020 and 2019 (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 financial statements and it is therefore recommended that these condensed interim financial statements be read in conjunction with the annual financial statements for the year ended September 30, 2020.

These condensed interim financial statements were reviewed by the Audit Committee and approved and authorized for issue by the Board of Directors on February 26, 2021.

Basis of measurement

These financial statements are stated in Canadian dollars, which is the Company’s functional currency, and were prepared on a going concern basis, under the historical cost convention except for share based compensation.

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 judgments, estimates and assumptions as reported in the Company’s September 30, 2020 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 September 30, 2020 and should be read in conjunction with those annual financial statements and the notes thereto.

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.

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Richmond Road Capital Corp. Notes to the Condensed Interim Financial Statements For the three months ended December 31, 2020 and 2019 (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 September 30, 2018 and 2019	5,000,000	338,364
Private placement – February 14, 2020 (i)	1,000,000	50,000
Share issue costs (i)	-	(5,000)
As at September 30, 2020 and December 31,2020	6,000,000	383,364

• (i) On February 14, 2020, the Company closed a private placement of 1,000,000 common shares, officers, directors and insiders of the Company, at a price of $0.05 per share for total consideration of $50,000. These common shares are subject to an escrow agreement. The Company incurred share issuance costs of $5,000 which have been applied against share capital.

Escrow

As at December 31, 2020, the Company has 3,000,000 common shares (2019 – 2,000,000) which are subject to an escrow agreement whereby 10% of the shares will be released upon completion and approval of the Company’s Qualifying Transaction. An additional 15% of the escrowed common shares will be released on each six-month anniversary thereafter unless otherwise permitted by the Exchange. These 3,000,000 shares, which are considered contingently issuable until the Company completes a Qualifying Transaction, are not considered to be outstanding for the purpose of earnings (loss) per share calculation.

6. 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 number of common shares reserved for issuance will not exceed 10% of the issued and outstanding common shares. However, other than in connection with a Qualifying Transaction, during the time that the Company is a CPC, the aggregate number of common shares issuable upon exercise of all options granted under the stock option plan shall not exceed 10% of the common shares at the closing of the Company's initial public offering. Such options will be exercisable up to ten years from the date of grant.

The following table summarizes information about stock options outstanding:

			Number of	Weighted average
			options	exercise price
			(#)	($)
As at December	31,	2020	600,000	0.10

As part of the close of the IPO, the Company granted 600,000 options at $0.10 per share to the directors and officers of the Company which expire November 16, 2022 and are exercisable in accordance with the Exchange CPC provisions.

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Richmond Road Capital Corp. Notes to the Condensed Interim Financial Statements For the three months ended December 31, 2020 and 2019 (unaudited)

7. Related party transactions

During the three months ended December 31, 2020, the Company incurred approximately $10,480 (December 31, 2019 - $nil) in legal fees for services provided by a law firm whose partner is a director of the Company. As at December 31, 2020, $98,029 (September 20, 2020 - $87,549) is included in accounts payable and accrued liabilities.

Transactions with related parties are incurred in the normal course of business and initially recorded at fair value.

8. Financial instruments

The Company, as part of its operations, carries financial instruments consisting of cash and accounts payable and accrued liabilities. 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.

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.

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.

Credit risk

Credit risk is the risk of loss associated with a counterparty's inability to fulfill its payment obligations. The Company believes it has no significant credit risk as its cash balance is held in a trust account of a national Canadian law firm.

Liquidity risk

The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at December 31, 2020, the Company has a cash balance of $11,949 (September 30, 2020 – $15,219) to satisfy liabilities of $110,925 (September 30, 2020 – $96,396) and will therefore need to obtain sources of funding to meet obligations as they come due. All of the Company's financial liabilities have contractual maturities of 30 days or are due on demand and are subject to normal trade terms.

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 does not have any cash invested in interest bearing financial instruments.

ii. Foreign currency risk

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

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Richmond Road Capital Corp. Notes to the Condensed Interim Financial Statements For the three months ended December 31, 2020 and 2019 (unaudited)

9. 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.

10. Letter of intent

On October 29, 2020, the Company entered into a non-binding letter of intent pursuant to which the Company and Fredonia Management Ltd. (“Fredonia”), an arms length company incorporated under the laws of the British Virgin Islands, intend to complete a plan of arrangement, merger, exempt takeover bid or other form of arrangement whereby the shareholders of Fredonia will having a controlling ownership of the issued and outstanding shares of the Company (the "Transaction"). The Transaction is intended to serve as the Company’s “qualifying transaction” as that term is defined in the policies of the Exchange. Completion of the Fredonia directly or indirectly owns 100% interest in certain licence areas within the Deseado Massif geological region in the Province of Santa Cruz, Argentina. It is intended that the Company will issue one share to the shareholders of Fredonia for each share held of Fredonia and, as a result, the Transaction will be a reverse take-over of the Company.

Transaction is subject to satisfactory completion of due diligence, the execution of a definitive agreement and regulatory body approvals including approval of the Exchange.

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