MAX Resource Corp. — Interim / Quarterly Report 2021

Sep 29, 2021

CAYENNE CAPITAL CORP.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTH PERIOD ENDED JULY 31, 2021 AND JULY 31, 2020

(UNAUDITED)

Notice of No Auditor Review of Interim Financial Statements

The accompanying unaudited financial statements have been prepared by management and approved by the Audit Committee.

The Company’s independent auditors have not performed a review of these financial statements in accordance with the standards established by the Canadian Institute to Chartered Accountants for a review of interim financial statements by an entity’s auditors.

CAYENNE CAPITAL CORP.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

(Expressed in Canadian Dollars)

July 31, 2021 (Unaudited)	October 31, 2020 (Audited) $ 100,402 1,027 41,930 143,359 – $ 143,359 $ 40,912 40,912
ASSETS
Current
Cash $ 250,055
Other receivables 3,102
Loan Receivable –
253,157
Exploration and evaluation asset (Note 5) 312,419
$ 565,576
LIABILITIES
Current
Accounts payable $ 9,149
9,149
SHAREHOLDERS’ EQUITY
Share capital (Note 8) 1,143,392	820,942
Share subscriptions 257,500	–
Contributed surplus 46,141	46,141
Deficit (890,606)	(764,636)
556,427	102,447
$ 565,576	$ 143,359

NATURE OF CONTINUANCE OF OPERATIONS (Note 1)

Approved and authorized for issue on behalf of the board on September 29, 2021:

“Michael Dake” Director “Matthew Coltura” Director

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

CAYENNE CAPITAL CORP.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Expressed in Canadian Dollars) UNAUDITED

Three months Three months Nine months Nine month ended ended ended ended July 31, July 31, July 31, July 31, 2021 2020 2021 2020 EXPENSES Management fees $ – $ 10,500 $ 14,000 $ 31,500 Office and miscellaneous (24) 17 1,591 79 Professional fees 59,285 6,512 83,964 40,493 Rent – 9,592 9,525 25,644 Transfer agent and filing fees 8,954 2,392 16,890 9,021 Travel andpromotion – – – 1,278	Three months Three months Nine months Nine month ended ended ended ended July 31, July 31, July 31, July 31, 2021 2020 2021 2020 EXPENSES Management fees $ – $ 10,500 $ 14,000 $ 31,500 Office and miscellaneous (24) 17 1,591 79 Professional fees 59,285 6,512 83,964 40,493 Rent – 9,592 9,525 25,644 Transfer agent and filing fees 8,954 2,392 16,890 9,021 Travel andpromotion – – – 1,278
Net loss and comprehensive loss, end ofperiod $ 68,215 $ 29,013 $ 125,970 $	108,015
Lossper share(basic and diluted) $ (0.01) $ (0.00) $ (0.01) $	(0.01)
Weighted average number of common share outstanding 16,647,476 13,160,800 16,647,476	13,160,800

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

CAYENNE CAPITAL CORP CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (Expressed in Canadian dollars)

UNAUDITED

	Common Shares Number of Shares Amount Share Subscription Contributed Surplus Deficit Total
	$ $ $ $ $
Balance, October 31, 2020 Shares issued for cash Share subscriptions Shares issued for exploration and evaluation asset Comprehensive loss for the period	12,632,160 820,942 – 46,141 (764,636) 102,447 1,581,665 47,450 – – – 47,450 – – 257,500 – 257,500 5,500,000 275,000 – – – 275,000 – – – – (125,970) (125,970)
Balance,July31,2021	19,713,825 1,143,392 257,500 46,141 (890,606) 556,427
Balance, October 31, 2019 Comprehensive loss for the period	2,632,160 620,942 – 46,141 (617,982) 49,101 – – – – (108,015) (108,015)
Balance,July31,2020	2,632,160 620,942 – 46,141 (725,997) (58,914)

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

CAYENNE CAPITAL CORP.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS	CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS	CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS	CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS	CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
(Expressed in Canadian Dollars) UNAUDITED Three months Three months Nine months Nine month ended ended ended ended July 31, July 31, July 31, July 31, 2021 2020 2021 2020 CASH PROVIDED BY (USED IN): OPERATING ACTIVITIES Net loss for the period $ (68,215) $ (29,013) $ (125,970) $ (108,015) Items not involving cash: Stock - basedpayments – – – –
Changes in non-cash working capital balances: Other receivable Loan receivable Accountspayable and accrued liabilities	(68,215) (2,230) – 1,460	(29,013) 2,205 – 30,243	(125,970) (2,075) 41,930 (31,763)	(108,015) (94) – 87,303
Cash used in operating activities	(68,985)	3,435	(117,878)	(20,806)
INVESTING ACTIVITY Mineralpropertyacquisition and exploration costs	(4,405)	–	(37,419)	–
Cash used in investingactivity	(4,405)	–	(37,419)	–
FINANCING ACTIVITIES Shares issued for cash Share subscriptions	– –	–	47,450 257,500	– –
Cash used in by financing activity	–	–	304,950	–
INCREASE IN CASH DURING THE PERIOD CASH,BEGINNING OF PERIOD	(73,390) 323,445	3,435 1,481	149,653 100,402	(20,806) 25,722
CASH,END OF PERIOD $	250,055 $	4,916 $	250,055 $	4,916
SUPPLEMENTAL DISCLOSURES Interest paid $ Income taxes paid $ Shares issued for and evaluation and exploration costs $	– $ – $ 275,000 $	– $ – $ – $	– $ – $ 275,000 $	– – –

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

CAYENNE CAPITAL CORP. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTH PERIOD ENDED JULY 31, 2021 AND 2020 (Expressed in Canadian Dollars) UNAUDITED

1. NATURE OF OPERATIONS

Cayenne Capital Corp. (“the Company”) was incorporated on October 15, 2015, under the laws of British Columbia. The address of the Company’s corporate office and its principal place of business is 200-551 Howe Street, Vancouver, British Columbia, Canada. On February 13, 2018, the Company incorporated a wholly owned subsidiary, 1152666 B.C. Ltd. under the British Columbia Business Corporations Act and subsequently changed its name to Lot 49 Capital Corp. (“Lot 49”). and was spun-off during 2019.

The Company’s principal business activities include the acquisition and exploration of mineral property assets. As at July 31, 2021, the Company had not yet determined whether the Company’s mineral property asset contains ore reserves that are economically recoverable. The recoverability of amount shown for exploration and evaluation asset is dependent upon the discovery of economically recoverable reserves, confirmation of the Company’s interest in the underlying mineral claims, the ability of the Company to obtain the necessary financing to complete the development of and the future profitable production from the property or realizing proceeds from its disposition. The outcome of these matters cannot be predicted at this time and the uncertainties cast significant doubt upon the Company’s ability to continue as a going concern.

The Company had deficit of $890,606 as at July 31, 2021, which has been funded by the issuance of equity. The Company’s ability to continue its operations and to realize its assets at their carrying values is dependent upon obtaining additional financing and generating revenues sufficient to cover its operating costs.

These consolidated financial statements do not give affect to any adjustments which would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in these consolidated financial statements.

The outbreak of the Coronavirus Disease 2019, or COVID-19, has spread across the globe and is impacting worldwide economic activity. This global pandemic poses the risk that the Company or its clients, employees, contractors, suppliers, and other partners may be unable to conduct regular business activities for an indefinite period of time. At this point, the impact on the Company has been minimal. The Company continues to monitor the situation and is taking all necessary precautions in order to follow rules and best practices as set out by the federal and provincial governments.

2. SIGNIFICANT ACCOUNTING POLICIES

Statement of compliance

The financial statements are prepared in accordance with IAS 34 Interim Financial Reporting (“IAS34”) using accounting policies consistent with the International Financial Reporting Standards (”IFRS”) issued by the International Accounting Standards Board (“IASB”) and Interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”). They do not include all financial information required for full annual financial statements and should be read in conjunction with the Audited Financial Statements of the Company for the year ended October 31, 2020.

The financial statements are prepared in accordance with accounting policies consistent with the International Financial Reporting Standards (”IFRS”) issued by the International Accounting Standards Board (“IASB”) and Interpretation of the International Financial Reporting Interpretation Committee (“IFRIC”).

The financial statements were authorized for issue by the Board of Directors on September 29,2021.

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CAYENNE CAPITAL CORP. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTH PERIOD ENDED JULY 31, 2021 AND 2020 (Expressed in Canadian Dollars) UNAUDITED

1. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGMENTS

There have been no material revisions to the nature of judgments and estimates of amounts reported in the Company’s October 31, 2020 annual financial statements.

1. ACCOUNTING STANDARDS AND AMENDMENTS ISSUED BUT NOT YET ADOPTED

The Company has performed an assessment of new standards issued by the IASB that are not yet effective and has determined that any new standards that have been issued would have no or very minimal impact on the Company’s financial statements.

1. EXPLORATION AND EVALUATION ASSET

	Acquisition	Exploration
	Costs	Costs	Total
	$	$	$
Balance, October 31, 2020	–	–	–
Additions	300,000	12,419	312,419
Balance,July31,2021	300,000	12,419	312,419

Stargold Property

Pursuant to an assignment agreement (the “Agreement”), dated March 17, 2021 with Crest Resources Inc. (the “Assignor”) and Urban Gold Minerals Inc. (the “Optionor”), the Company was granted an option to acquire a 100% undivided interest in the Stargold Property located in the Town of Val d’Or, Province of Quebec (the “Property”).

In accordance with the Agreement, the Company has agreed to pay the Assignor an aggregate of $25,000 in cash and issue 5,500,000 common shares. The Company paid $25,000 during the period ended April 30, 2021 and issued 5,500,000 to the Assignor subsequent to the period end.

Furthermore, pursuant to the option agreement (the “Original Agreement”) dated February 2, 2021, between the Assignor and the Optionor, the Company will satisfy the remaining obligation of the Assignor through the issuance of 2,050,000 common shares to the Optionor as follows:

• 400,000 common shares on or before February 2, 2022;

• 400,000 common shares on or before February 2, 2023; and

• 1,250,000 common shares on or before February 2, 2024.

A portion of the claims under the Original Agreement is subject to a 1% net smelter return royalty (the “Royalty”). Upon completion of the option terms and satisfaction of the remaining obligations, the Optionor will transfer a 100% stake in the Property to the Company. At that time, the Company will grant a Royalty to the Optionor on claims that are not subject to the existing royalty.

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CAYENNE CAPITAL CORP. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTH PERIOD ENDED JULY 31, 2021 AND 2020 (Expressed in Canadian Dollars) UNAUDITED

6. SHARE CAPITAL

• a) Authorized:

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

• b) Issued and Outstanding:

As at July 31, 2021 there were 19,713,825 common shares issued and outstanding.

During the period ended July 31, 2021, the Company issued 1,581,665 common shares at $0.03 per share for cash proceeds of $47,450, and 5,500,000 common shares for an exploration and evaluation asset.

During the year ended October 31, 2020, the Company had the following share capital transactions:

• i) The Company completed a non-brokered private placement (the “Private Placement”) of common shares. The Company issued 5,000,000 flow-through common shares and 5,000,000 non-flow-through common shares at a purchase price of $0.02 per common share for gross proceeds of $200,000. Pursuant to the Private Placement, the Company paid no finders’ fees. For the purposes of the calculating the tax effect of any premium related to the issuance of the flow-through shares, the Company reviewed recent financings and compared it to determine if there was a premium paid on the shares. As a result of the review, the Company did not recognize any premium on the flow-through shares issued. Under the terms of the flowthrough share private placement, the Company must incur $100,000 of Canadian Exploration Expenditures (“CEE”) and renounce the CEE to the shareholders that participated in the private placement.

• ii) Effective October 5, 2020, the Company completed a share consolidation of its issued and outstanding common shares as described in Note 1 of the audited financial statements for the year ended October 31, 2020.

c) Stock Options:

During the year ended October 31, 2016, the Company adopted a Stock Option Plan (the “Plan”). Under the Plan, the Company can issue up to 10% of the issued and outstanding common shares as incentive stock options to directors, officers, employees and consultants to the Company. The Plan limits the number of stock options which may be granted to any one individual to not more than 5% of the total issued common shares of the Company in any 12 month period. The Plan also limits the stock options which may be granted to any one individual if the exercise would result in the issuance of common shares more than 2% in any 12 month period. The number of options granted to any one consultant or a person employed to provide investor relations activities in any 12 month period must not exceed 2% of the total issued common shares of the Company. As well, stock options granted under the Plan may be subject to vesting provisions as determined by the Board of Directors.

As at July 31, 2021, the Company had no options outstanding.

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CAYENNE CAPITAL CORP. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTH PERIOD ENDED JULY 31, 2021 AND 2020 (Expressed in Canadian Dollars) UNAUDITED

7. RELATED PARTY BALANCES AND TRANSACTIONS

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

The following amounts are due to related parties and have been included in accounts payable and accrued liabilities:

	July 31,	October 31,
	2021	2020
	$	$
Accountspayable and accrued liabilities	–	–

The amounts are due to a company controlled by the Chief Executive Officer (“CEO”) of the Company. The amounts are non-interest bearing, unsecured and are due upon demand.

The Company had the following related party transactions for the three month period ended:

	July 31,	April 30,
	2021	2020
	$	$
Management fees	14,000	31,500

Key management includes directors and key officers of the Company, including the President, CEO and Chief Financial Officer. Management fees were provided by a company owned or controlled by the CEO.

8. MANAGEMENT OF CAPITAL

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the sourcing and exploration of its resource property. The Company does not have any externally imposed capital requirements to which it is subject.

The Company considers the aggregate of its share capital, contributed surplus and deficit as capital. The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares or dispose of assets or adjust the amount of cash.

9. FINANCIAL INSTRUMENTS AND FINANCIAL RISK

As at July 31, 2021, the Company’s financial instruments consist of cash, loan receivable and accounts payable.

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CAYENNE CAPITAL CORP. NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE NINE MONTH PERIOD ENDED JULY 31, 2021 AND 2020 (Expressed in Canadian Dollars) UNAUDITED

9. FINANCIAL INSTRUMENTS AND FINANCIAL RISK - continue

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 – inputs to valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

As at July 31, 2021, cash was assessed to be a Level 1 instrument and loan receivable as Level 3.

The Company is exposed to varying degrees to a variety of financial instrument related risks. The Board approves and monitors the risk management processes, inclusive of counterparty limits, controlling and reporting structures. The type of risk exposure and the way in which such exposure is managed is provided as follows:

(a) Credit risk

Credit risk is the risk of an unexpected loss if a party to a financial instrument fails to meet its contractual obligations. The Company's credit risk is primarily attributable to cash and term deposits held by high credit quality banking institutions in Canada. The Company has no significant concentration of credit risk arising from operations as the Company has no business operations.

(b) 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 July 31, 2021, the Company had cash of $250,055 to settle the total current liabilities of $9,149.

(c) 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. Management does not believe that the Company is exposed to any material market risk.

(d) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to short term interest rates through the interest earned on cash balances. The Company has cash balances and no interest-bearing debt. The Company's current policy is to invest excess cash in short-term deposits with its banking institutions.

10. SUBSEQUENT EVENTS

The Company completed an offering of 5,150,000 subscription receipts at $0.05 for total proceeds of $257,500. Each share subscription is convertible to 1 common share of the Company. The Company is seeking regulatory approval for the issuance of the shares, by the way of a prospectus.

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