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Ord Mountain Resources Corp. — Management Reports 2021
Jun 29, 2021
46568_rns_2021-06-28_7b2a7978-5667-4f30-beb9-30a68ee6316e.pdf
Management Reports
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ORD MOUNTAIN RESOURCES CORP.
Management Discussion and Analysis
For the Year Ended February 28, 2021
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Ord Mountain Resources Corp. (A Capital Pool Company) Management Discussion and Analysis For the Year ended February 28, 2021
Description of Business
Ord Mountain Resources Corp. (formerly Sino Environ-Energy Tech Corp.) (the “Company”) was incorporated on January 7, 2010 under the Business Corporations Act (British Columbia). The Company is a Capital Pool Company (“CPC”) 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 gross proceeds of the offering were $300,000 (1,500,000 common shares at $0.20 per share) (the “Offering”). The Sponsoring Member and Agent for the Offering was Canaccord Genuity Corp.
The Company’s principal business activity is the identification and evaluation of business opportunities with the objective of completing a qualifying transaction (a “Qualifying Transaction”) under Exchange rules. A Qualifying Transaction must be entered into within 24 months of listing under the Policy and is subject to shareholders’ approval and the acceptance by regulatory authorities.
The Company did not complete its Qualifying Transaction within the prescribed time frame and in accordance with the TSX Venture Exchange (the “Exchange”) Policy 2.4. Effective June 1, 2012, the Company’s tier classification was changed from Tier 2 to NEX.
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 is expected to proceed by way of a share exchange under which the Company will issue 11,600,000 units in exchange for 11,600,000 Bloom shares, which represents 100% of the issued and outstanding shares of Bloom. Each unit contains one common share and one half of share purchase warrant exercisable at price of $0.5 for a period of two years. The Transaction is subject to completion of certain conditions, including the completion by the Company of a private placement for gross proceeds of no less than $2,000,000. The Transaction was terminated on April 21, 2021.
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 is a reporting issuer in the provinces of British Columbia and Alberta and trades on the Exchange under the trading symbol OMR.H. The Company had 4,702,000 common shares issued and outstanding at February 28, 2021 and as of the date of this MD&A.
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 avail-able 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.
Forward-Looking Information and Report Date
This Management Discussion and Analysis (“MD&A”) may contain forward-looking statements that involve risks and uncertainties. When used in this MD&A, the words “anticipate”, “believe”, “estimates”, “expects” and similar expressions are intended to identify such forward-looking statements. Readers are cautioned that these statements which describe the Company’s proposed plans, objectives, and budgets, may differ materially from actual results. These forward looking statements speak only as of the date of this document, or as of the date specified in the documents incorporated into this document by reference, as the case may be.
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Ord Mountain Resources Corp. (A Capital Pool Company) Management Discussion and Analysis For the Year ended February 28, 2021
The forward looking statements contained in the document and documents incorporated by reference are expressly qualified by this cautionary statement. Management and the Company do not undertake any obligation to publicly update or revise any forward looking statements except as required by securities law.
The following discussion and analysis of the financial position and results of operations for the Company is dated June 28, 2021 (the “Report Date”) and should be read in conjunction with the condensed interim consolidated financial statements and the notes thereto for the year ended February 28, 2021 which are prepared in accordance with International Financial Reporting Standards (“IFRS”).
Overall Performance
The Company did not complete a Qualifying Transaction within the prescribed time frame in accordance with Exchange Policy 2.4. Consequently the Company’s tier classification was changed from Tier 2 to NEX and its common shares commenced trading on the NEX board of the Exchange under the symbol “OMR.H” effective June 1, 2012.
Selected Annual Information and Result of Operations
| February 28, 2021 $ |
February 29, 2020 $ |
|
|---|---|---|
| Net loss | (165,384) | (44,213) |
| Basic and diluted loss per share |
(0.04) | (0.02) |
| Cash | 2,654 | 642 |
| Total Assets | 9,324 | 1,952 |
| Non-Current Liabilities | Nil | Nil |
Results of Operations
The Company is a CPC and has no business operations or sales revenue. Until such time as the Company completes a Qualifying Transaction, corporate expenditures will be restricted to costs associated with the raising of equity financing, administrative costs to maintain the Company in good standing and costs to identify and evaluate potential business acquisitions. Public company costs include audit and legal fees, Exchange listing and filing fees, transfer agent fees, and costs of preparing, printing, filing and mailing quarterly and annual reports and general meeting materials and other continuous disclosure documents to shareholders as applicable.
The major expenses incurred during the year ended February 28, 2021 are related to the on-going maintenance associated with a Public Company.
Set forth below is a summary discussion of selected financial data in respect of the year ended February 28, 2021.
- Year Ended February 28, 2021
The Company had no revenue during year ended February 28, 2021. General and administrative expenses amounted to $165,384 of which $69,200 was for consulting fees, $64,528 was for legal fees $5,000 for filing fees, $19,011 for accounting and audit, $7,204 for transfer agent fees and $441 for bank charges and interest.
- Year ended February 28, 2021 compared with year ended February 29, 2020
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Ord Mountain Resources Corp. (A Capital Pool Company) Management Discussion and Analysis For the Year ended February 28, 2021
The Company had cash and cash equivalents amounting to $2,654 on February 28, 2021 (February 29, 2020 - $642). Operating expenses for the year amounted to $165,384 (February 29, 2020 - $44,213) and consisted of $19,011 for accounting and audit (February 29, 2020 - $9,630), $5,000 for filing fees (February 29, 2020 - $7,260), $69,200 for consulting fees (February 29, 2020 - $nil) $64,528 for legal fees (February 29, 2020 - $17,014), 7,204 for transfer agent fees (February 29, 2020 - $3,903), and $nil for office expenses (February 29, 2020 – $250).
Summary of Quarterly Results
| February 28, | November 30, | August 31, | May 31, | |
|---|---|---|---|---|
| 2021 | 2020 | 2020 | 2020 | |
| $ | $ | $ | $ | |
| Expenses | 24,531 | 34,589 | 85,873 | 20,391 |
| Net Loss | (24,531) | (34,589) | (85,873) | (20,391) |
| Loss perShare | (0.00) | (0.01) | (0.04) | (0.00) |
| February 29, | November 30, | August 31, | May 31, | |
| 2020 | 2019 | 2019 | 2019 | |
| $ | $ | $ | $ | |
| Expenses | 14,113 | 10,762 | 19,338 | 3,218 |
| Net Loss | (14,113) | (10,762) | (19,338) | (3,218) |
| Loss perShare | (0.00) | (0.00) | (0.01) | (0.00) |
Liquidity
At February 28, 2021, the Company had $127,113 (February 29, 2020 – $73,607) in working capital deficiency. The Company did not pledge any of its assets as security for loans, or otherwise and is not subject to any debt covenants.
At February 28, 2021, the Company had GST tax receivable of $6,670 (February 29, 2020 - $1,310) which will be recovered upon the annual filing of the GST return with the CRA and accounts payable of $136,437 (February 29, 2020 - $75,559).
Capital Resources
Capital resources include all of the Company’s shareholders’ equity. As at February 28, 2021, the Company had made no commitments for capital expenditures.
Off-Balance Sheet Arrangements
The Company has not entered into any Off-Balance Sheet Arrangements.
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 post-employment benefits, termination benefits, or other long-term benefits.
Significant Accounting Judgments, Estimates and Assumptions
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Ord Mountain Resources Corp. (A Capital Pool Company) Management Discussion and Analysis For the Year ended February 28, 2021
The preparation of 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 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:
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Going concern
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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.
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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.
Financial Instruments
| 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 |
Fair value
The carrying value of cash and cash equivalents and accounts payable approximates the fair value because of the short-term of these instruments.
FINANCIAL RISK MANAGEMENT
Credit risk
The Company is exposed to credit risk with respect to its cash.
The Company’s maximum exposure to credit risk is its cash 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 at February 28, 2021 in the amount of $2,654 (February 29, 2020 - $642).
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Ord Mountain Resources Corp. (A Capital Pool Company) Management Discussion and Analysis For the Year ended February 28, 2021
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.
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 is not exposed to foreign currency risk as 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.
Controls and Procedures
The Chief Executive Officer and the Chief Financial Officer of the Company have reviewed the financial statements and MD&A for the year ended February 28, 2021 and have certified that based on their knowledge, having exercised reasonable diligence that:
(1) the filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the annual filings.
(2) the financial statements together with the other financial information included in the annual filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the annual filings.
The Company disclosed that:
(1) it is not required to certify the design and evaluation of the Company’s disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR) and has not completed such an evaluation, and
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Ord Mountain Resources Corp. (A Capital Pool Company) Management Discussion and Analysis For the Year ended February 28, 2021
(2) inherent limitations on the ability of certifying officers of the Company to design and implement on a cost effective basis DC&P and ICFR may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.
Authorized Share Capital
The Company is authorized to issue an unlimited number of common shares without nominal or par value. The holders of common shares are entitled to dividends, if, as, and when declared by the board of directors to be approved at meetings of shareholders of the Company and, upon dissolution, to share equally in such assets of the company that are distributable to the holders of common shares.
The Company is authorized to issue an unlimited number of preferred shares without nominal or par value.
Issued Share Capital
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.
As at February 28, 2021 and the date of this MD&A, the Company had 4,702,000 common shares issued and outstanding.
Shares Held in Escrow
225,000 issued and outstanding common Shares are held in escrow pursuant to the requirements of the Exchange. The Shares will be released in stages over a period up to three years from the date of the Final Exchange Bulletin accepting the completion of the Qualifying Transaction.
Stock Options
The Company has a stock option plan for its directors, officers, consultants and employees under which the Company may grant options to acquire a maximum number of common shares equal to 10% of the total issued and outstanding shares of the Company.
As at February 28, 2021, the Company had no unexercised stock options.
Warrants
As at February 28, 2021 and as at the date of this MD&A, the Company had no Warrants.
Risks and Uncertainties
The Company had not completed its Qualifying Transaction within the prescribed time frame and in accordance with Exchange Policy 2.4. Therefore, effective at the opening on June 1, 2012, the Company’s tier classification was changed from Tier 2 to NEX.
Until the Company enters into a Qualifying Transaction and the Transaction is completed, the Shares of the Company should be considered highly speculative. There can be no assurances that shareholders will realize any returns from their investment and may lose their entire investment in the Company.
On June 30, 2020, the Company entered into a letter of intent with Bloom Supply Ltd. (“Bloom”), pursuant to which, the Company will issue 11,600,000 units in exchange for 11,600,000 Bloom shares. Each unit contains one common share and one half of share purchase warrant exercisable at price of $0.50 for a period of two years. The Transaction was terminated on April 21, 2021.
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Ord Mountain Resources Corp. (A Capital Pool Company) Management Discussion and Analysis For the Year ended February 28, 2021
The following risk factors should be given special consideration when evaluating an investment in any of the Company’s securities given the Company’s limited history of operations.
Dilution - There will be an additional number of common shares which will be issued in the future pursuant to a Qualifying Transaction which will result in further dilution to the Company’s shareholders. Revenue and Dividends - The Company has no meaningful revenues and does not expect to have any meaningful revenues in the near future.
Trading in the Company’s Shares may or will be halted for an extended period of time if and when the Company enters into a new Qualifying Transaction. Trading of the Company’s Shares will not be reinstated until completion of any subsequent Qualifying Transaction in accordance with Exchange policies.
The Company did not complete its Qualifying Transaction within the prescribed time frame in accordance with Exchange Policy 2.4. The Company’s tier classification was changed from Tier 2 to NEX on June 1, 2012. The Company does not have any full-time employees and does not maintain liability insurance. If the Company completes a Qualifying Transaction it may add appropriate coverage to minimize the risks associated with its new business activities.
Factors that May Affect Future Results
Future financial performance will be influenced by a successful evaluation and acquisition of a potential business and the completion of a Qualifying Transaction.
Qualifying Transaction
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 is expected to proceed by way of a share exchange under which the Company will issue 11,600,000 units in exchange for 11,600,000 Bloom shares, which represents 100% of the issued and outstanding shares of Bloom. Each unit contains one common share and one half of share purchase warrant exercisable at price of $0.5 for a period of two years. The Transaction is subject to completion of certain conditions, including the completion by the Company of a private placement for gross proceeds of no less than $2,000,000. The Transaction was terminated on April 21, 2021.
The Company is actively exploring other opportunities for the Company’s new Qualifying Transaction.
SUBSEQUENT EVENTS
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.
OTHER MD&A REQUIREMENTS
Additional information relating to the Company is available on SEDAR at www.sedar.com.
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ORD MOUNTAIN RESOURCES CORP.
MAILING ADDRESS
Ord Mountain Resources Corp. #203 – 601 North Road Coquitlam, BC V3J 1P1
LISTING
TSX Venture Exchange: OMR.H
CAPITALIZATION
(as at February 28, 2021)
OFFICERS & DIRECTORS
Luke Montaine Chief Executive Officer and Director
Shares Authorized: Unlimited Shares Issued: 2,370,000
REGISTRAR & TRANSFER AGENT
David Yoo Chief Financial Officer
Tyler Ross Corporate Secretary
Computershare Investor Services Inc. 3rd Floor 510 Burrard Street Vancouver, British Columbia Canada V6C 3B9
Alex Klenman Director
AUDITOR
Gong (Michael) Chen Director
MNP LLP 2200, 1021 West Hastings Street Vancouver, British Columbia Canada V6E 0C3
LEGAL COUNSEL
Boughton Law Corporation 700 - 595 Burrard Street Vancouver, BC V7X 1S8
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