Ord Mountain Resources Corp. — Annual Report 2021

Jun 29, 2021

ORD MOUNTAIN RESOURCES CORP.

CONSOLIDATED FINANCIAL STATEMENTS

For the year ended February 28, 2021

(Expressed in Canadian Dollars)

Management's Responsibility for Financial Reporting

Management is responsible for the preparation and presentation of the accompanying consolidated financial statements, including responsibility for significant accounting judgments and estimates in accordance with International Financial Reporting Standards. This responsibility includes selecting appropriate accounting principles and methods, and making decisions affecting the measurement of transactions in which objective judgment is required.

In discharging its responsibilities for the integrity and fairness of the consolidated financial statements, management designs and maintains the necessary accounting systems and related internal controls to provide reasonable assurance that transactions are authorized, assets are safeguarded and financial records are properly maintained to provide reliable information for the preparation of consolidated financial statements.

The Board of Directors and Audit Committee are composed primarily of Directors who are neither management nor employees of the Company. The Board is responsible for overseeing management in the performance of its financial reporting responsibilities. The Board fulfils these responsibilities by reviewing the financial information prepared by management and discussing relevant matters with management and external auditors. The Audit Committee has the responsibility of meeting with management and external auditors to discuss the internal controls over the financial reporting process, auditing matters and financial reporting issues. The Committee is also responsible for recommending the appointment of the Company's external auditors.

MNP LLP is appointed by the directors to audit the consolidated financial statements and report directly to them; their report follows. The external auditors have full and free access to, and meet periodically and separately with, both the Board/Committee and management to discuss their audit findings.

June 28, 2021

(signed) (signed) " Luke Montaine " " Alex Klenman " Director Director

INDEPENDENT AUDITOR'S REPORT

To the Shareholders of Ord Mountain Resources Corp.:

Opinion

We have audited the consolidated financial statements of Ord Mountain Resources Corp. and its subsidiary (the "Company"), which comprise the consolidated statements of financial position as at February 28, 2021 and February 29, 2020, and the consolidated statements of comprehensive loss, changes in deficiency and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at February 28, 2021 and February 29, 2020, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards.

Basis for Opinion

We conducted our audits in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audits of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 in the consolidated financial statements, which indicates that as at February 28, 2021, the Company had an accumulated deficit.As stated in Note 1, these events or conditions, along with other matters as set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Other Information

Management is responsible for the other information. The other information comprises Management's Discussion and Analysis.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audits of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audits or otherwise appears to be materially misstated. We obtained Management's Discussion and Analysis prior to the date of this auditor's report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audits and significant audit findings, including any significant deficiencies in internal control that we identify during our audits.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

The engagement partner on the audit resulting in this independent auditor's report is Jenny Lee.

Vancouver, British Columbia

June 28, 2021 Chartered Professional Accountants

ORD MOUNTAIN RESOURCES CORP. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Expressed in Canadian dollars)

February 28, February 29, Note 2021 2020 $ $ ASSETS Current Cash and cash equivalents 2,654 642 Sales tax receivable 6,670 1,310 Total assets 9,324 1,952 LIABILITIES Current Accounts payable 136,437 75,559 Total liabilities 136,437 75,559 EQUITY Share capital 7 517,330 405,452 Contributed surplus 64,061 64,061 Deficit (708,504) (543,120) Total shareholder's deficit (127,113) (73,607) 9,324 1,952

NATURE OF OPERATIONS AND GOING CONCERN (Note 1) SUBSEQUENT EVENTS (Note 10)

Approved by the Board of Directors on June 28, 2021

"Luke Montaine" "Alex Klenman"

Luke Montaine, Director Alex Klenman, Director

The accompanying notes are an integral part of the consolidated financial statements.

ORD MOUNTAIN RESOURCES CORP. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Expressed in Canadian Dollars)

	Year EndedFebruary 28,2021	Year EndedFebruary 29,2020
	$	$
Expenses
Accounting and audit	19,011	9,630
Administration	-	5,845
Bank charges and interest	441	293
Consulting fees	69,200	-
Filing fees	5,000	7,260
Legal fees	64,528	17,014
Office supplies and office expenses	-	250
Transfer agent	7,204	3,903
Travel	-	18
Total Expenses	165,384	44,213
Net loss	(165,384)	(44,213)
Deficit, beginning of the year	(543,120)	(498,907)
Deficit, end of the year	(708,504)	(543,120)
Loss per share –basic and diluted	(0.04)	(0.02)
Weighted average number of shares outstanding –basic and diluted	4,114,208	2,370,000

The accompanying notes are an integral part of the consolidated financial statements

ORD MOUNTAIN RESOURCES CORP. CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in Canadian Dollars)

	Year EndedFebruary 28,2021	Year EndedFebruary 29,2020
	$	$
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	(165,384)	(44,213)
Change in non-cash operating working capital:
Sales tax receivable	(5,609)	3,951
Accounts payable and accrued liabilities	56,405	28,545
Cash (used in) operating activities	(114,588)	(11,717)
CASH FLOWS FROM FINANCING ACTIVITIES:
Share issuance	116,600	-
Cash provided by financing activities	116,600	-
CHANGE IN CASH AND CASH EQUIVALENTS	2,012	(11,717)
CASH AND EQUIVALENTS, BEGINNING OF THE YEAR	642	12,359
CASH AND EQUIVALENTS, END OF THE YEAR	2,654	642

The accompanying notes are an integral part of the consolidated financial statements

ORD MOUNTAIN RESOURCES CORP. CONSOLIDATED STATEMENTS OF CHANGES IN DEFICIENCY

(Expressed in Canadian Dollars)

	Common Shares
	Number	Amount	Contributedsurplus	Deficit	Total
		$	$	$	$
Balances as at February 28, 2019	2,370,000	405,452	64,061	(498,907)	(29,394)
Net loss and comprehensive loss	-	-	-	(44,213)	(44,213)
Balances as at February 29, 2020	2,370,000	405,452	64,061	(543,120)	(73,607)

	Common Shares
	Number	Amount	Contributedsurplus	Deficit	Total
		$	$	$	$
Balances as at February 29, 2020	2,370,000	405,452	64,061	(543,120)	(73,607)
Share issuance	2,332,000	116,600	-	-	116,600
Share issuance cost	-	(4,722)	-	-	(4,722)
Net loss and comprehensive loss	-	-	-	(165,384)	(165,384)
Balances as at February 28, 2021	4,702,000	517,330	64,061	(708,504)	(127,113)

The accompanying notes are an integral part of the consolidated financial statements

1. NATURE OF OPERATIONS AND GOING CONCERN

Ord Mountain Resources Corp. (the "Company") was incorporated on January 7, 2010 under the Business Corporations Act (British Columbia) and is a Capital Pool Company as defined by Policy 2.4 (the "CPC Policy") of the TSX Venture Exchange (the "Exchange"). The Company's prospectus, dated May 7, 2010 was filed and accepted by the Exchange and the British Columbia and Alberta Securities Commissions effective May 12, 2010 pursuant to the provisions of the British Columbia and Alberta Securities Acts. The common shares of the Company were listed on the Exchange effective at the opening of trading on Friday, May 28, 2010.

The Company was initially registered using the name of Silverland Capital Corp. On December 24, 2010, the Company changed its name from Silverland Capital Corp. to Sino Environ-Energy Tech Corp. and continued out of British Columbia and into Cayman Island as its corporate jurisdiction. On December 16, 2011, the Company changed its name from Environ-Energy Tech Corp. to Ord Mountain Resources Corp. The head office and principal address of the Company is located at 758 Riverside Drive, Unit 46, Port Coquitlam, British Columbia, Canada V3B 7V8. The Company did not complete its Qualifying Transaction within the prescribed time frame and in accordance with the TSX Venture Exchange Policy 2.4., the Company's tier classification was changed from Tier 2 to NEX effective June 1, 2012. On June 30, 2020, the Company entered into a letter of intent with Bloom Supply Ltd. ("Bloom") whereby the Company has agreed to acquire all of the issued and outstanding shares of Bloom (the "Transaction") and intends for the Transaction to constitute as a qualifying transaction under the TSX Venture Exchange Policy 2.4 – Capital Pool Companies. The Transaction was terminated on April 21, 2021.

The Company has not generated any sales revenues and has incurred accumulated losses of $708,504 since inception. In view of these conditions, the ability of the Company to continue as a going concern depends upon the injection of a successful project, achieving a profitable level of operations and also on the ability of the Company to obtain necessary financing to fund ongoing operations. The Company's ability to achieve these objectives cannot be determined at this time.

In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company's business or its ability to raise funds.

	February 28,2021	February29,2020
Deficit	$(708,504)	$(543,120)
Working capital (deficiency)	$(127,113)	$(73,607)

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") with the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. The Company's continuing operations as intended are dependent upon the Company's ability to identify, evaluate and negotiate the acquisition of an interest in properties, assets or a business. Such an acquisition will be subject to regulatory approval and may be also subject to shareholder approval. In order to continue as a going concern and meet its corporate objectives, the Company will require additional financing through debt or equity issuances or other available means. There is no assurance that the Company will be able to identify, obtain adequate financing in the future or that such financing will be on terms advantageous to the Company. As such, there is material uncertainty related to these events and conditions that may cast significant doubt on the Company's ability to continue as a going concern.

2. STATEMENT OF COMPLIANCE

The consolidated financial statements have been prepared in accordance with International Accounting Standard ("IFRS") issued by the International Accounting Standards Board ("IASB") and Interpretations of the International Financial Reporting Interpretations Committee ("IFRIC").

These consolidated financial statements have been prepared on a historical cost basis except for certain financial instruments which are measured at their fair value as explained in the accounting policies set out below. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting.

These consolidated financial statements were authorized to issue by the audit committee and Board of Directors of the Company on June 28, 2021.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements.

Basis of consolidation

These consolidated financial statements incorporate the financial statements of the Company, and the entity controlled by the Company. The principal subsidiary of the Company, which are accounted for under the consolidation method is 1080199 B.C. Ltd.

Subsidiaries

Subsidiaries are entities controlled by the Company. The Company controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of a subsidiary are included in the consolidated financial statements from the date that control commences until the date that control ceases. Inter-company balances and transactions, and any unrealized income and expenses arising from intercompany transactions, are eliminated in preparing the consolidated financial statements.

Significant Accounting Judgments, Estimates and Assumptions

The preparation of consolidated financial statements in conformity with IFRS requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses, and related disclosure.

Judgment is used mainly in determining how a balance or transaction should be recognized in the consolidated financial statements. Estimates and assumptions are used mainly in determining the measurement of recognized transactions and balances. Actual results may differ from these estimates.

Significant areas where management's estimates and judgment have been applied include:

Going Concern

The Company's ability to execute its strategy by funding future working capital requirements requires judgment. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, such as, expectations of future events that are believed to be reasonable under the circumstances.

Deferred taxes

Deferred tax assets are recognized for all deductible temporary differences, to the extent it is probable that future taxable profit will be available against which the deductible temporary differences can be utilized. In addition, the valuation of tax credits receivable requires management to make judgments on the amount and timing of recovery.

Functional and Presentation Currencies

The Canadian dollar is both the Company's functional currency and presentation currency.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand, deposits in banks and highly liquid investments with an original maturity of three months or less when purchasing. There were no cash equivalents as at February 28, 2021 and February 29, 2020.

Share-based Payments

The fair value of the options granted to directors and employees is measured at grant date, using the Black-Scholes option pricing model, and is recognized over the period that the options are earned. Share-based payments to non-employees are measured at the grant date by using the fair value of the goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, the fair value of the equity instruments issued are recorded at the date the goods or services are received. The offset to the recorded cost is to contributed surplus. Consideration received on the exercise of stock options is recorded as share capital and the related contributed surplus is transferred to share capital.

Income Taxes

Income tax expense comprises current and deferred tax. Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity. Current tax expense is the expected tax payable on the taxable income for the period, using tax rates enacted or substantively enacted at period end, adjusted for amendments to tax payable with regards to previous years.

Deferred tax is recorded using the statement of financial position liability method, providing for temporary differences, between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences do not result in deferred tax assets or liabilities: goodwill not deductible for tax purposes; the initial recognition of assets or liabilities that affect neither accounting nor taxable income or loss; and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.

A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

Loss per Share

Loss per share is calculated using the weighted average number of common shares outstanding during the period. The Company uses the treasury stock method to calculate diluted earnings per share. Under this method, the dilutive effect on earnings per share is calculated presuming the exercise of outstanding options, warrants and similar instruments. It assumes that the proceeds of such exercise would be used to repurchase common shares at the average market price during the period. However, the calculation of diluted loss per share excludes the effects of conversions or exercise of options and warrants if they would be antidilutive.

Comprehensive Loss

Comprehensive loss is the change in the Company's shareholders' equity that results from transactions and other events from other than the Company's shareholders and includes items that would not normally be included in net earnings, such as unrealized gains and losses on available-for-sale investments. Certain gains and losses are presented in other "comprehensive income" until it is considered appropriate to recognize into net earnings. The Company has no other comprehensive loss during the years ended February 28, 2021 and February 29, 2020.

Financial Instruments

Financial Instruments - classification and measurement

Financial Asset

The classification and measurement of financial assets is based on the Company's business models for managing its financial assets and whether the contractual cash flows represent solely payments of principal and interest ("SPPI"). Financial assets are initially measured at fair value and are subsequently measured at either (i) amortized cost; (ii) fair value through other comprehensive income, or (iii) at fair value through profit or loss.

Amortized cost

Financial assets classified and measured at amortized cost are those assets that are held within a business model whose objective is to hold financial assets in order to collect contractual cash flows, and the contractual terms of the financial asset give rise to cash flows that are SPPI. Financial assets classified at amortized cost are measured using the effective interest method. The Company's cash and cash equivalents are classified in this category.

Fair value through other comprehensive income ("FVTOCI")

Financial assets classified and measured at FVTOCI are those assets that are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise to cash flows that are SPPI.

Fair value through profit or loss ("FVTPL")

Financial assets classified and measured at FVTPL are those assets that do not meet the criteria to be classified at amortized cost or at FVTOCI.

Financial Liabilities

All financial liabilities are initially recognised at fair value plus or minus transactions costs that are directly attributable to issuing the financial liability. Financial liabilities are measured at amortised cost, unless they are required to be measured at FVTPL. The Company's accounts payable are measured at amortised cost.

Financial Instruments - Impairment of financial assets

The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance for the financial asset at an amount equal to twelve month expected credit losses. The Company shall recognize in the Consolidated Statements of Operation and Comprehensive Loss, as an impairment gain or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized.

Capital Disclosures

The Company manages its capital, consisting of shareholders' equity, in a manner consistent with the risk characteristics of the assets it holds. All sources of financing are analyzed by the management and approved by the board of directors.

The Company's objectives when managing capital are:

• a) to safeguard the Company's ability to continue as a going concern;
• b) to facilitate the completion of a corporate objectives.

The Company is meeting its objective of managing capital through its detailed review and performance of due diligence on all potential acquisitions, preparing short-term and long-term cash flow analysis to ensure an adequate amount of liquidity and monthly review of financial results. As disclosed previously, there are restrictions on the use of cash.

New Accounting Standards Adopted

Certain pronouncements were issued by the International Accounting Standards Board (IASB) that will be mandatory for accounting periods on or after January 1, 2020. The following has been adopted during the current year ended February 28, 2021:

IAS 1 Presentation of Financial Statements

In October 2018, the International Accounting Standards Board (IASB) issued amendments to IAS 1 which were incorporated into Part I of the CPA Canada Handbook – Accounting by the Accounting Standards Board (AcSB) in February 2019. The amendments clarify the definition of material and how it should be applied, as well as align the definition of material across IFRS standards and other publications. The amended definition of material states:

Information is material if omitting, misstating or obscuring it could reasonably be expected to influence the decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.

The amendments are effective for annual periods beginning on or after January 1, 2020 and are required to be applied prospectively. The Company does not expect these amendments to have material impact on its consolidated financial statements.

New and revised IFRS standards issued but not yet effective

There are no new standards, interpretations and amendments to existing standards have been issued by the IASB or IFRIC that are applicable or are consequential to the Company that needs to be disclosed.

4. FINANCIAL INSTRUMENTS

Set out below is a comparison by class of the carrying amounts of the Company's financial instruments that are carried in the Consolidated Statements of Financial Position:

	February 28, 2021$	February 29, 2020$
Financial Assets
Amortized cost:
Cash and cash equivalents	2,654	642
Financial Liabilities
Amortized cost:
Accounts payable	136,437	75,559

The carrying value of cash and cash equivalents and accounts payable approximates the fair value because of the short-term of these instruments.

5. FINANCIAL RISK MANAGEMENT

Credit risk

The Company is exposed to credit risk with respect to its cash and cash equivalents. The Company's maximum exposure to credit risk is its cash and cash equivalents balance of $2,654 (February 29, 2020 - $642).

The Company manages credit risk with respect to its cash by maintaining deposits with a major Canadian financial institution; however, this exposes the Company's cash to concentration of credit risk as all amounts are held at a single institution.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in satisfying financial obligations as they become due. The Company manages its liquidity risk by forecasting cash flows from operations and anticipated investing and financing activities. The Company has cash and cash equivalents at February 28, 2021, in the amount of $2,654 (February 29, 2020 - $642).

At February 28, 2021, the Company had accounts payable of $136,437 (February 29, 2020 - $75,559), which are due in the short term (under 90 days).

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, foreign currency risk and other price risk.

5. FINANCIAL RISK MANAGEMENT (continued)

Market risk (continued)

a) Interest rate risk

Interest rate risk consists of two components:

To the extent that payments made or received on the Company's monetary assets and liabilities are affected by changes in the prevailing market interest rates, the Company is exposed to interest rate risk on cash and cash equivalents; and

To the extent that changes in prevailing market rates differ from the interest rate in the Company's monetary assets and liabilities, the Company is exposed to interest rate price risk.

The Company is not exposed to significant interest rate risk due to the short-term maturity of its monetary assets and liabilities.

b) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The Company's exposure to foreign currency risk is minimal as most of its monetary assets and liabilities are denominated in Canadian dollars.

c) Other price risk

Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices, other than those arising from interest rate risk or foreign currency risk. The Company is not exposed to other price risk.

There were no changes in the Company's approach to risk during the year ended February 28, 2021.

6. CAPITAL MANAGEMENT

The Company defines capital as all components of shareholders' equity. The Company has no debt obligations. The Board of Directors does not establish quantitative return on capital criteria for management due to the nature of the Company's business. The Company does not pay dividends and is not subject to any externally imposed capital requirements.

The Company raises capital through the issuance of its capital stock to fund identification and evaluation of assets or a business for acquisition. Although the Company has been successful at raising funds in the past through issuance of common shares, there can be no assurance that it will continue to be able to do so in the future.

There were no changes to the Company's approach to capital management during the year ended February 28, 2021 and February 29, 2020.

7. SHARE CAPITAL

a) Authorized: Unlimited common shares with no par value Unlimited preferred shares with no par value

7. SHARE CAPITAL (continued)

b) Issued and Outstanding:

Preferred shares – Nil

Common shares – 4,702,000 shares (February 29, 2020: 2,370,000 shares)

On June 1, 2020, the Company issued a private placement consisted of 2,332,000 shares at a price of $0.05 for total proceeds of $116,600. The Company had paid no finders fees in connection with the private placement.

c) Escrow Shares

There are 225,000 number of shares held in escrow.

d) Stock Options

The Company has adopted an incentive stock option plan in accordance with the policies of the TSX Venture Exchange (the "Stock Option Plan") which provides that the Board of Directors ("Board") of the Company may from time to time, in its discretion, grant to directors, officers, employees and consultants of the Company options to purchase common shares, provided that the number of shares reserved for the issuance under the Stock Option Plan shall not exceed ten percent (10%) of the issued and outstanding common shares, exercisable for a period and the exercise price to be determined by the Board at the time the option is granted. There was no stock option outstanding at February 28, 2021 and Febuary 29, 2020.

8. RELATED PARTY TRANSACTIONS

Mr. Valent Chan was appointed chief financial officer & corporate secretary of the Company effective September 18, 2015 and resigned on June 28, 2019. During the year, Mr. Chan received fees for administration services of $nil (February 29, 2020 - $(1,000)). There were no other related party transactions during the years ended February 28, 2021 and February 29, 2020.

Other than related party transactions mentioned above, key management personnel were not paid postemployment benefits, termination benefits, or other long-term benefits.

9. INCOME TAXES

The following table reconciles the expected income tax expense (recovery) at the Canadian statutory income tax rates to the amounts recognized in the consolidated statements of operations and comprehensive loss for the years ended February 28, 2021 and February 29, 2020.

9. INCOME TAXES (continued)

	2021	2020
Loss before taxes	$(165,384)	$(44,213)
Statutory tax rate	27.00%	27.00%
Expected income tax recovery	$(44,654)	$(11,938)
Non-deductible items	-	2
Change in deferred tax asset not recognized	44,654	11,936
Total income taxes expense (recovery)	-	-

Although the Company is currently under Cayman Island jurisdiction, the Company is also subject to Canadian taxation and has utilized the Canadian tax rate as the applicable tax rate.

	2021	2020
Non-capital loss carryforwards	$571,370	$504,307
Share issuance cost	3,778	-
Eligible capital expenditures	99,266	-
	674,414	504,307
Deferred tax asset not recognized	674,414	504,307
Net deferred tax asset	-	-

The Company has non-capital loss carryforwards of approximately $571,370 (2020: $504,307) which may be carried forward to apply against future year income tax for Canadian income tax purposes, subject to the final determination by taxation authorities, expiring in the following years:

EXPIRY	Total
2031	$73,780
2032	95,851
2033	57,357
2034	45,358
2035	47,133
2036	36,782
2037	82,015
2039	21,823
2040	44,208
2041	67,063
TOTAL	$ 571,370

10. SUBSEQUENT EVENTS

See note 1.