Oracle Energy Corp. — Interim / Quarterly Report 2021

Nov 24, 2021

ORACLE ENERGY CORP.

CONDENSED INTERIM FINANCIAL STATEMENTS

For the Three and Nine Months Ended September 30, 2021 and 2020 (Expressed in Canadian Dollars)

(Unaudited)

ORACLE ENERGY CORP.

NOTICE OF NO AUDITOR REVIEW OF CONDENSED INTERIM FINANCIAL STATEMENTS

The accompanying unaudited condensed interim financial statements of Oracle Energy Corp. have been prepared by the management of the Company and approved by the Company’s Audit Committee and the Company’s Board of Directors.

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

The accompanying unaudited condensed interim financial statements of the Company have been prepared by and are the responsibility of the Company’s management.

The Company’s independent auditor has not performed a review of these financial statements in accordance with standards established by the Chartered Professional Accountants of Canada for a review of the interim financial statements by an entity’s auditor.

ORACLE ENERGY CORP.

CONDENSED INTERIM STATEMENTS OF FINANCIAL POSITION

(Expressed in Canadian Dollars) (Unaudited)

Note	SEPTEMBER 30 DECEMBER 31 2021 2020
ASSETS Current Cash Amounts receivable 4 Deposits and prepaids Total current assets Exploration and evaluation assets 5 Total Assets	$ 260,573 $ 40,324 382,090 164 123 -
	642,786 40,488 - -
	$ 642,786 $ 40,488
LIABILITIES Current Accounts payable and accrued liabilities Notes payable 6 Due to related parties 7 Total current liabilities Notes payable 6,7 Total liabilities EQUITY (DEFICIENCY) Share capital 8 Reserves Deficit Total equity (deficiency) Total liabilities and equity (deficiency)	$ 188,126 $ 205,652 45,283 70,896 59,296 62,569
	292,705 339,117 242,208 304,912
	534,913 644,029
	22,426,336 21,930,458 4,978,375 4,532,213 (27,296,838) (27,066,212)
	107,873 (603,541)
	$ 642,786 $ 40,488

These condensed interim financial statements were authorized for issuance by the Board of Directors on November 24, 2021. They are signed on behalf of the Board of Directors by:

“Loren Currie” Director	“James Ladner”
	Director

The accompanying notes are an integral part of these financial statements.

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ORACLE ENERGY CORP.

CONDENSED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Expressed in Canadian Dollars) (Unaudited)

FOR THE THREE MONTHS FOR THE NINE MONTHS ENDED SEPTEMBER 30 ENDED SEPTEMBER 30 2021 2020 2021 2020	FOR THE THREE MONTHS FOR THE NINE MONTHS ENDED SEPTEMBER 30 ENDED SEPTEMBER 30 2021 2020 2021 2020
Expenses Advertising and communications $ Accretion (Note 6) Bank charges and interest Consulting Foreign exchange loss (gain) Office Professional fees Regulatory and listing fees Salaries and benefits Telephone Transfer agent fees Net Loss And Comprehensive Loss For The Period $	1,942$ 180$ 2,352$ 665 4,791 - 14,126 - 158 151 434 588 47,000 - 119,000 - 634 (527) 18 634 5,910 2,937 9,433 3,935 7,600 6,000 25,795 25,920 (1,367) - 8,637 7,979 12,000 - 36,000 15,000 - 132 - 712 7,993 695 14,831 2,823
	86,661 9,568 230,626 58,256
	(86,661)$ (9,568)$ (230,626)$ (58,256)
Basic and Diluted Loss Per Share(1) $	(0.01) $ (0.00) $ (0.02) $ (0.00)
Weighted Average Number Of Common Shares Outstanding(1)	15,638,400 13,464,487 14,197,088 13,464,487

(1) On June 17, 2021, the Company announced the completion of a share consolidation on a 5:1 basis. The Basic and Diluted Loss Per Share and the Weighted Average Number of Common Shares Outstanding has been retroactively restated to reflect the results of the share consolidation.

The accompanying notes are an integral part of these financial statements.

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ORACLE ENERGY CORP.

CONDENSED INTERIM STATEMENTS OF CASH FLOWS

(Expressed in Canadian Dollars)

	NINE MONTHS ENDED SEPTEMBER 30 2021 2020
Cash flows provided by (used for): Operating activities Net (loss) income for the period Items not affecting cash: Accretion Foreign exchange gain Net change in non-cash working capital items: Amounts receivable Accounts payable and accrued liabilities Deposits and prepaids Due to related parties Financing activity Proceeds from shares issued for cash (Note 4,8) Share issue costs Proceeds received from notes payable issued Repayment of notes payable Net increase (decrease) In cash Cash, beginning of year Cash, end of period	$ (230,626)$ (58,256) 14,126 - 12 - (3,426) (88) (17,526) 167,489 (123) - (3,273) (141,460)
	(240,836) (32,315)
	621,500 - (57,960) - 2,000 23,000 (104,455) -
	461,085 23,000
	220,249 (9,315) 40,324 10,117
	$ 260,573 $ 802

Supplemental cash flow information

Non-Cash Financing and Investing Activities
Fair value of warrants issued	$	(379,604)$	-
Agent’s warrants issued for financing		(66,558)	-

The accompanying notes are an integral part of these financial statements

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ORACLE ENERGY CORP.

CONDENSED INTERIM STATEMENTS OF CHANGES IN DEFICIENCY

(Expressed in Canadian Dollars)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

Balance, December 31, 2019 Net loss for the period Balance, September 30, 2020 Net income for the period Balance, December 31, 2020 Shares issued in private placements (Note 4,8) Share issue costs Warrants issued in Private placements Agent warrants issed Net loss for the period Balance, September 30, 2021	SHARE CAPITAL NUMBER(1) AMOUNT SHARES TO BE ISSUED RESERVES DEFICIT TOTAL EQUITY (DEFICIENCY)
	13,464,487 $ 21,930,458 $ - $ 4,532,213 $ (27,013,289) $ (550,618) - - - - (58,256) (58,256)
	13,464,487 21,930,458 - 4,532,213 (27,071,545) (608,874) - - - - 5,333 5,333
	13,464,487 21,930,458 - 4,532,213 (27,066,212) (603,541) 10,000,000 1,000,000 - - - 1,000,000 - (57,960) - - - (57,960) - (379,604) - 379,604 - - - (66,558) - 66,558 - - - - - - (230,626) (230,626)
	23,464,487 $ 22,426,336 $ - $ 4,978,375 $ (27,296,838) $ 107,873

(1) On June 17, 2021, the Company announced the completion of a share consolidation on a 5:1 basis. The Number of shares outstanding has been retroactively restated to reflect the results of the share consolidation.

The accompanying notes are an integral part of these financial statements.

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ORACLE ENERGY CORP. NOTES TO FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020 (Expressed in Canadian Dollars)

1. CORPORATE INFORMATION AND CONTINUANCE OF OPERATIONS

Oracle Energy Corp. (the “Company”) was incorporated on October 2, 1985 under the Business Corporations Act of British Columbia and was in the business of acquiring, exploring and evaluating oil and gas properties and developing these properties further or disposing of them when the evaluation is completed. The Company is currently seeking new assets and may consider a change of business.

The address of the Company and the principal place of business is 1400 – 1040 West Georgia Street, Vancouver, B.C., V6E 4H1 and the registered and records office is located at 2110 – 650 West Georgia Street, Vancouver, B.C., V6B 4N9.

To date, the Company has not earned significant revenues. During the nine months ended September 30, 2021, the Company recorded net loss of $230,626 (2020 – $58,256) and as of that date, the Company’s had working capital excluding deposits and prepaids of $349,958 (December 31, 2020 – working capital deficiency $298,629). As at September 30, 2021, the Company has an accumulated deficit of $27,296,838 (December 31, 2020 - $27,066,212). The Company’s operations are primarily funded with debt or equity financing, which is dependent upon many external factors and may be difficult to raise when required. The Company does not have sufficient cash to fund current operations, amounts payable, or amounts required to complete planned acquisitions and will require additional funding, which if not raised, may result in the delay, postponement or curtailment of some of its activities.

On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic. It has adversely affected global workforces, economies, and financial markets triggering an economic downturn and making it difficult to raise capital in the public markets. As at September 30, 2021, the Company did not have any operations impacted by COVID-19. It is not possible at this time for the Company to predict the duration or magnitude of the adverse results of the outbreak nor its effects on the Company’s business or operations.

These financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assume the realization of assets and discharge of liabilities in the normal course of business. However, the above factors may cast significant doubt on the use of the going concern basis of accounting used in the preparation of these financial statements. These financial statements do not give effect to adjustments that would be necessary should the Company not be able to continue as a going concern. Such adjustments could be material.

2. BASIS OF PRESENTATION

a) Statement of Compliance

The condensed interim financial statements of the Company for the nine months ended September 30, 2021, including comparatives, have been prepared in accordance with International Accounting Standard ("IAS") 34, Interim Financial Reporting using accounting policies consistent with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”). Accordingly, these condensed interim financial statements do not include all of the information and footnotes required by IFRS for complete financial statements for year-end reporting process.

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ORACLE ENERGY CORP. NOTES TO FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020 (Expressed in Canadian Dollars)

2. BASIS OF PRESENTATION (continued)

• b) Basis of Preparation

These financial statements have been prepared on a historical cost basis except for financial instruments that have been measured at fair value. In addition, these financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

• c) Presentation and Functional Currency

The presentation and functional currency of the Company is the Canadian dollar.

Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on the dates of the transactions. At each financial position reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at the date of the statement of financial position. Nonmonetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

• d) Significant Accounting Judgments and Estimates

The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. The financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and may affect both the period of revision and future periods.

Elements of these financial statements subject to material estimation uncertainty include:

Fair value measurements

In the preparation of these financial statements, management has estimated the fair value of financial instruments, for which there are no active markets. The fair value estimates are based on the best available information and experience of management. Future events or changes in circumstances may materially impact these estimates used in valuing assets and liabilities at year end.

Elements of these financial statements subject to significant judgment may include:

Significant judgments about the future and other sources of estimation uncertainty that management has made at the reporting date that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to, but are not limited to, the following:

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ORACLE ENERGY CORP. NOTES TO FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020 (Expressed in Canadian Dollars)

2. BASIS OF PRESENTATION (continued)

• d) Significant Accounting Judgments and Estimates (continued)

• i) going concern assessment: Management assesses the Company's ability to continue as a going concern at each reporting date, using all quantitative and qualitative information available. This assessment, by its nature, relies on estimates of future cash flows and other future events (as discussed in Note 1), whose subsequent changes could materially impact the validity of such an assessment.

• ii) consideration of exploration and evaluation asset impairment criteria: Assets or cash-generating units (“CGUs”) are evaluated at each reporting date to determine whether there are any indications of impairment. The Company considers both internal and external sources of information when making the assessment of whether there are indications of impairment for the Company’s exploration and evaluation assets.

Significant judgment is required when determining whether facts and circumstances suggest that the carrying amount of exploration and evaluation assets may exceed its recoverable amount. The retention of regulatory permits and licenses, the Company’s ability to obtain financing for exploration and development activities and its future plans on the exploration and evaluation assets, current and future metal prices, and market sentiment are all factors considered by the Company.

In respect of the carrying value of exploration and evaluation assets recorded on the statements of financial position, management has determined that it continues to be appropriately recorded, as there has been no obsolescence or physical damage to the assets and there are no indications that the value of the assets have declined more than what is expected from the passage of time or normal use.

• iii) discounting of long-term debt and note payable: The discounting of long-term notes payable involves estimates in determining the discount rate used by the Company and the estimated timing of the repayments as indicated in Note 6.

• iv) Share based payments and valuation of equity instruments: The fair value of equity instruments is subject to the limitations of the Black-Scholes option pricing model, as well as other pricing models such as the Geske option pricing model for equity instruments involving compound options that incorporate market data and involve uncertainty in estimates used by management in the assumptions. Because option pricing models require inputs of highly subjective assumptions, including the volatility of share prices, changes in subjective input assumptions can materially affect the fair value estimate.

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ORACLE ENERGY CORP. NOTES TO FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020 (Expressed in Canadian Dollars)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies applied by the Company in these condensed interim financial statements are the same as those applied to the consolidated financial statements as at and for the year ended December 31, 2020. Certain comparative figures may have been reclassified in order to conform to the current period's financial statement presentation.

4. AMOUNTS RECEIVABLE

The amounts receivable includes $378,500 of share subscriptions for a private placement completed in September, 2021. The amounts receivable are due on delivery of share certificates to the agents. Other amounts receivable include GST input tax credits.

5. EXPLORATION AND EVALUATION ASSETS

During the year ended December 31, 2020, the Company was advised that its Italmin project was not viable, and that Italmin had applied to relinquish its 20% Nusco licence. As a result, the Company recorded a writedown of $15,442 for the year ended December 31, 2020. There are no exploration and evaluation assets as at September 30, 2021 and December 31, 2020.

Although the Company takes steps to verify title to the resource properties in which it acquires interests in accordance with industry standards for the current stage of exploration of such properties, these procedures do not guarantee the Company’s title. Property title may be subject to unregistered prior agreements and non-compliance with regulatory and governmental requirements.

6. NOTES PAYABLE

During the year ended December 31, 2020, the Company entered into debt deferral arrangements in the amount of $302,677 whereby various related parties, key management and third parties agreed to defer 75% of the amounts owing to three equal installments, repayable from each of the first three private placements completed by the company subsequent to the first year after the Company completes a qualifying transaction. As a result of the debt settlements and debt deferral arrangements, 25% of the amounts were reclassified from related party debt to current and 75% to long term notes payable.

During the year ended December 31, 2020, the Company borrowed $40,000 from the Canada Emergency Business Account (“CEBA”) program. The CEBA Loan has an initial term that expires on December 31, 2022, throughout which, the CEBA Loan remains interest free. Repayment of $30,000 by December 31, 2022, results in a $10,000 loan forgiveness. If the balance is not paid prior to December 31, 2022, the remaining balance will be converted to a 3-year term loan at 5% annual interest, paid monthly effective January 1, 2023. The full balance must be repaid by no later than December 31, 2025.

During the nine months ended September 30, 2021, the Company borrowed $2,000 from a company owned by a shareholder and made payments of $104,455 on outstanding notes payable.

As at September 30, 2021, the total amounts owing were $311,130 (December 31, 2020 - $413,573). The outstanding loans are unsecured and bear no interest.

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ORACLE ENERGY CORP. NOTES TO FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020 (Expressed in Canadian Dollars)

6. NOTES PAYABLE (Continued)

The summary of notes payable as at September 30, 2021 and December 31, 2020 is as follows:

llows:
Notes payable Foreign exchange adjustment CEBA Total notes payable Current notes payable Long term portion Less: adjustment of amortized cost Add: accretion Long term notes payable	SEPTEMBER 30 DECEMBER 31 2021 2020
	$ 271,118 $ 373,573 12 - 40,000 40,000
	311,130 413,573 (45,283) (70,896)
	265,847 342,677 (37,765) (38,929) 14,126 1,164
	$ 242,208 $ 304,912

7. RELATED PARTY BALANCES AND TRANSACTIONS

Related party transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

a) Transactions with Key Management Personnel

Salaries and other short-term benefits Legal Fees	NINE MONTHS ENDED SEPTEMBER 30 2021 2020
	$ 36,000$ 7,500 $ 18,000$ 6,000
	54,000 13,500

Key management personnel are the persons responsible for planning, directing, and controlling the activities of the Company, and include both executive and non-executive directors, certain senior officers, and entities controlled by such persons. The Company considers all directors and officers of the Company to be key management personnel.

As at September 30, 2021, $59,296 (December 31, 2020 - $62,569) was owing to key management personnel or to a company controlled by an officer or director and the amounts were included in due to related parties. The amounts payable are non-interest bearing, are unsecured, and have no specific terms of repayment.

As at September 30, 2021, $89,999 (December 31, 2020 - $89,583) was owing to key management personnel or to a company controlled by an officer or director and the amounts were included in Notes Payable (Note 6).

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ORACLE ENERGY CORP. NOTES TO FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020 (Expressed in Canadian Dollars)

8. SHARE CAPITAL

a) Authorized

Unlimited common shares without par value 5,000,000 preferred shares, par value of $5 per share (none issued)

b) Issued and Outstanding

During the nine months ended September 30, 2021, the Company completed a share consolidation on a 5:1 basis. The number of shares outstanding has been retroactively restated to reflect the results of the share consolidation.

The following shares were issued during the nine months ended September 30, 2021:

• 10,000,000 units at a price of $0.10 per unit for proceeds of $1,000,000. Each Unit is comprised of 1 common share of the Company and one half (1/2) of a common share purchase warrant with each full warrant being exercisable for an additional common share of the Company at $0.15 for 12 months. Finder’s fees of $57,960 was paid in cash and 579,600 agent’s warrants were issued in connection with the private placement.

There were no shares issued during the year ended December 31, 2020.

c) Warrants

A summary of the changes in the Company’s share purchase warrants is as follows:

Balance, December 31, 2019 Expired Balance, December 31, 2020 Issued Balance, September 30, 2021	NUMBER OF WARRANTS WEIGHTED AVERAGE EXERCISE PRICE
	55,638,257 $ 0.19 (55,638,257) 0.19
	- $ - 5,579,600 0.15
	5,579,600 $ 0.15

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ORACLE ENERGY CORP. NOTES TO FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020 (Expressed in Canadian Dollars)

8. SHARE CAPITAL (Continued)

The following table summarizes the Company’s warrants outstanding and exercisable at September 30, 2021:

NUMBER
OF
WARRANTS		EXERCISE
OUTSTANDING		PRICE	EXPIRY DATE
5,334,000	*	$0.15	September 10, 2022
245,600	**	$0.10	September 10, 2022
5,579,600

• Includes 334,000 agent’s warrants. Each warrant is exercisable for one common share

• ** Includes 245,600 agent’s warrants. Each Warrant is exercisable for one unit. Each unit is comprised of one common share and one full share purchase warrant entitling the holder to acquire one additional common share at a price of $0.15 per share for 12 months from closing.

The fair value of 5,000,000 warrants issued in connection with private placements was estimated on the date of issuance using the Black-Scholes option pricing model. The fair value of $379,604 was recorded as reserves and deducted from share capital.

The fair value of 334,000 agent’s warrants issued in connection with private placements was estimated on the date of issuance using the Black-Scholes option pricing model. The fair value of $25,358 was recorded as share issue costs.

The fair value of 245,600 agent’s warrants issued in connection with private placements was estimated on the date of issuance using the Black-Scholes option pricing model in combination with the Geske compound option pricing model for underlying warrants. The fair value of $41,200 was recorded as share issue costs.

Assumptions used in the option-pricing model are as follows:

Risk-free interest rate Expected life Expected volatility Expected dividends	2021 2020
	0.40% - 1 years - 136.5% - Nil -

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ORACLE ENERGY CORP. NOTES TO FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020 (Expressed in Canadian Dollars)

8. SHARE CAPITAL (Continued)

d) Incentive Stock Options

The Company’s Stock Option Plan (“the Plan”) follows the policies of the TSX Venture Exchange regarding stock option awards granted to employees, directors, and consultants. The stock option plan allows a maximum of 10% of the issued shares to be reserved for issuance under the plan.

There were no options granted during the nine months ended September 30, 2021 or the year ended December 31, 2020.

A summary of the changes in the Company’s stock options is as follows:

Balance, December 31, 2019 Cancelled Forfeited	NUMBEROF OPTIONS WEIGHTED AVERAGE **EXERCISE PRICE **
	5,360,000 0.15 (1,660,000) 0.15 (3,700,000) 0.15 - $ -
Balance, December 31, 2020 and September 30, 2021

There were no outstanding options as at September 30, 2021.

9. MANAGEMENT OF CAPITAL

The Company’s objectives when managing capital are to pursue and complete the identification and evaluation of assets, properties or businesses with a view to acquisition. The Company does not have any externally imposed capital requirements to which it is subject.

As at September 30, 2021 and December 31, 2020, the Company had capital resources consisting of cash. 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, adjust the amount of cash and cash equivalents, or dispose of assets.

The Company’s investment policy is to invest its cash in investment instruments in high credit quality financial institutions with terms to maturity selected with regards to the expected time of expenditures from continuing operations.

The Company’s ability to continue as a going concern is dependent upon successful completion of additional financing, continuing support of creditors and its ability to attain profitable operations.

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ORACLE ENERGY CORP. NOTES TO FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020 (Expressed in Canadian Dollars)

10. FINANCIAL RISK EXPOSURE AND RISK MANAGEMENT

The Company is exposed in varying degrees to a number of risks arising from financial instruments. Management’s close involvement in the operations allows for the identification of risks and variances from expectations. The Company does not participate in the use of financial instruments to mitigate these risks and has no designated hedging transactions. The Board approves and monitors the risk management processes. The Board’s main objectives for managing risks are to ensure liquidity, the fulfillment of obligations, the continuation of the Company’s exploration activities, and limited exposure to credit and market risks. There were no changes to the objectives or the process from the prior period.

The types of risk exposure and the way in which such exposures are managed are as follows:

a) Credit Risk

Credit risk primarily arises from the Company’s cash and cash equivalents and amounts receivable. The risk exposure is limited to their carrying amounts at the statement of financial position date. Cash and cash equivalents are held as cash deposits or invested in guaranteed investment certificates with various maturity dates. The Company does not invest in asset-backed deposits or investments and does not expect any credit losses. The Company periodically assesses the quality of its investments and is satisfied with the credit rating of the bank and the investment grade of the guaranteed investment certificates. Amounts receivable primarily consists of Goods and Services Tax (GST) credits, share subscriptions receivable, and other receivables.

b) Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company ensures there is sufficient capital to meet short-term business requirements. One of management’s goals is to maintain an optimal level of liquidity through the active management of assets, liabilities and cash flows.

The Company’s cash and cash equivalents are deposited in major banks or invested in guaranteed investment certificates, which are available on demand to fund the Company’s operating costs and other financial demands.

c) Market Risk

The significant market risks to which the Company is exposed are currency, interest rate, commodity and equity price risks.

i) Currency Risk

The operating results and financial position of the Company are reported in Canadian dollars. As the Company is exploring opportunities in an international environment, some of the Company’s financial instruments and transactions are denominated in currencies other than the Canadian dollar. The results of the Company’s operations are subject to currency risk.

The majority of the Company’s costs are incurred in Canada and are denominated in Canadian dollars. Foreign currency transactions are booked at historical cost in Canadian dollars.

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ORACLE ENERGY CORP. NOTES TO FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020 (Expressed in Canadian Dollars)

10. FINANCIAL RISK EXPOSURE AND RISK MANAGEMENT (continued)

a) Market Risk (Continued)

The Company has not entered into any agreements or purchased any foreign currency hedging instruments to hedge possible currency risks at this time. Management believes the foreign exchange risk derived from currency conversions is not significant, and therefore, does not hedge its foreign exchange risk.

As at September 30, 2021 and December 31, 2020, the Company is exposed to currency risk through the following monetary assets and liabilities denominated in foreign currencies:

reign currencies:
Cash Accounts payable Due to related parties Notes payable	SEPTEMBER 30 DECEMBER 31 2021 2020
	USD 6 USD 46 USD 2,281 USD 1,118 USD 4,000 USD 4,000 USD 12,000 USD 12,000

Based on the above net exposures and assuming that all other variables remain constant, a 10% change in the value of the foreign currencies against the Canadian dollar would result in an increase or decrease of $2,330 (December 31, 2020 - $1,707) in income/loss from operations.

ii) Interest Rate Risk

The Company’s policy is to invest excess cash in guaranteed investment certificates at fixed or floating rates of interest and cash equivalents are to be maintained in floating rates of interest in order to maintain liquidity, while achieving a satisfactory return for shareholders. As at September 30, 2021 and December 31, 2020, no cash was held in interest bearing deposits. Fluctuations in interest rates impact the value of cash and cash equivalents. The Company manages risk by monitoring changes in interest rates in comparison to prevailing market rates.

iii) Commodity and Equity Price Risk

The Company is exposed to price risk with respect to equity prices. Equity price risk is defined as the potential adverse impact on the Company’s financing abilities due to movements in individual equity prices or general movements in the stock market. The company closely monitors equity prices and the stock market to determine the appropriate course of action to be taken by the Company.

As at September 30, 2021 and December 31, 2020, the Company had no investments subject to commodity and equity price risk.

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ORACLE ENERGY CORP. NOTES TO FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020 (Expressed in Canadian Dollars)

11. SUBSEQUENT EVENTS

Subsequent to the date of these financial statements, the Company received $278,500 of the amounts receivable due on delivery of share certificates to various agents. The Company has held back 1,000,000 shares from a final agent pending payment of $100,000 for these share subscriptions. The shares will be returned to treasury if payment is not received.

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