Phenom Resources Corp. — Audit Report / Information 2021

Feb 25, 2022

DocuSign Envelope ID: 704CFDE3-4FD2-49CE-B1D9-F5BA0DF32BC6

Statement of Net Revenue of the

RENTAL POOL - LE SOMMET DES NEIGES

Year ended October 31, 2021

DocuSign Envelope ID: 704CFDE3-4FD2-49CE-B1D9-F5BA0DF32BC6

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KPMG LLP Telephone (514) 840-2100 600 de Maisonneuve Blvd. West Fax (514) 840-2187 Suite 1500, Tour KPMG Internet www.kpmg.ca Montréal (Québec) H3A 0A3 Canada

INDEPENDENT AUDITORS’ REPORT

To the owners of units of Le Sommet des Neiges

Opinion

We have audited the accompanying statement of net revenue of Rental Pool - Le Sommet des Neiges (the "Entity") for the year ended October 31, 2021, and notes, comprising a summary of significant accounting policies (hereinafter referred to as the "statement of net revenue"). The statement of net revenue has been prepared by management in accordance with the financial reporting provisions in paragraph 4.1.5 of the Master Rental Pool Agreement dated November 15, 2001 and amended on February 18, 2011.

In our opinion, the statement of net revenue of Rental Pool - Le Sommet des Neiges for the year ended October 31, 2021 is prepared, in all material respects, in accordance with the financial reporting provisions in paragraph 4.1.5 of the Master Rental Pool Agreement dated November 15, 2001 and amended on February 18, 2011.

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the " Auditors’ Responsibilities for the Audit of the Statement of Net Revenue " section of our auditors’ report.

We are independent of the Entity in accordance with the ethical requirements that are relevant to our audit of the statement of net revenue of the Rental Pool 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.

Emphasis of Matter - Financial Reporting Framework

Without modifying our opinion, we draw attention to Note 2 to the statement of net revenue, which describes the basis of accounting. The statement of net revenue is prepared to provide information to the owners of units of Le Sommet des Neiges. As a result, the statement of net revenue may not be suitable for another purpose. Our report is intended solely for the owners of units of Le Sommet des Neiges and should not be used by parties other than the owners of units of Le Sommet des Neiges.

KPMG LLP, an Ontario limited liability partnership and member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. KPMG Canada provides services to KPMG LLP.

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Responsibilities of Management and Those Charged with Governance for the Statement of Net Revenue

Management is responsible for the preparation and fair presentation of the statement of net revenue in accordance with the financial reporting provisions in paragraph 4.1.5 of the Master Rental Pool Agreement dated November 15, 2001 and amended on February 18, 2011; this includes determining that the basis of accounting is an acceptable basis for the preparation of the statement of net revenue in the circumstances, and for such internal control as management determines is necessary to enable the preparation of a statement of net revenue that is free from material misstatement, whether due to fraud or error.

In preparing the statement of net revenue, management is responsible for assessing the Entity’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 Entity or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Entity’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Statement of Net Revenue

Our objectives are to obtain reasonable assurance about whether the statement of net revenue as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditors’ 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 the statement of net revenue.

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 statement of net revenue, 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 Entity's internal control.

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• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

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

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Montréal, Canada February 21, 2022

*CPA auditor, CA, public accountancy permit No. A115894

DocuSign Envelope ID: 704CFDE3-4FD2-49CE-B1D9-F5BA0DF32BC6

RENTAL POOL - LE SOMMET DES NEIGES

Statement of Net Revenue

Year ended October 31, 2021, with comparative information for 2020

		2021		2020
Rental revenue	$	3,142,239	$	4,491,735
Cancellation fees, parking revenues, miscellaneous
andpremium internet fees		121,682		158,614
Gross rental pool revenue		3,263,921		4,650,349
Less:
Credit card charges		71,782		103,190
Agents' commissions		293,618		420,799
Marketing payments		47,134		67,338
Reservation system payments		47,134		67,338
Lift - First tracks and Summer		51,109		36,780
Adjusted gross revenue		2,753,144		3,954,904
Less:
50% share of revenue to Mont Tremblant Resorts and
Company, Limited Partnership		1,376,572		1,977,452
Net revenue	$	1,376,572	$	1,977,452
Allocation of net revenue to owners:
Occupancy fees	$	220,076	$	283,176
Revenue		1,156,496		1,694,276
	$	1,376,572	$	1,977,452

See accompanying notes to the statement of net revenue.

Approved by:

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Station Mont Tremblant

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Station Mont Tremblant

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DocuSign Envelope ID: 704CFDE3-4FD2-49CE-B1D9-F5BA0DF32BC6

RENTAL POOL - LE SOMMET DES NEIGES

Notes to the Statement of Net Revenue

Year ended October 31, 2021

1. Nature of project:

Le Sommet des Neiges is a resort hotel condominium project developed by Mont Tremblant Resorts and Company, Limited Partnership, a limited partnership formed under the laws of Québec. The rental pool began its operations on November 15, 2001.

Le Sommet des Neiges is a building containing, among others, a total of 460 quarters of units, each quarter of unit consisting of an undivided 25% ownership interest in one condominium apartment and the obligation to participate in a rental program during periods when the undivided co-owners of the condominium apartment do not reserve their condominium apartment for owner’s occupancy. As at October 31, 2021, 456 quarters of units (456 quarters of units as at October 31, 2020) were participating in the rental pool.

Mont Tremblant Resorts and Company, Limited Partnership is the administrator of the Rental Pool - Le Sommet des Neiges.

2. Basis of accounting:

The financial reporting provisions in paragraph 5.7 of the Master Rental Pool Agreement dated November 15, 2001 and amended on February 18, 2011 require the statement of net revenue to be prepared using an accrual basis accounting.

3. Significant accounting policies and interpretations:

• (a) Revenue recognition:

Gross rental pool revenues mean all revenues attributable to or payable for rental of the units and from rental of the meeting space, but shall exclude any sales or rentals of ancillary goods or services, such as movie rentals, telephone income, internet, and value-added packages offered to the user of the units which include, but are not limited to, revenue from the use of the gondola during the summer period and certain activities available and offered on the resort. Gross sales shall not include any Tremblant Resort Association ("TRA") royalty which will be added to the rent charged by the rental pool operator.

Net rental pool revenue for any day means 50% of the net amount of the gross rental pool revenue less agents' commissions, marketing payments, reservation system payments, credit card charges and Lift - first tracks and Summer.

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DocuSign Envelope ID: 704CFDE3-4FD2-49CE-B1D9-F5BA0DF32BC6

RENTAL POOL - LE SOMMET DES NEIGES

Notes to the Statement of Net Revenue (continued)

Year ended October 31, 2021

3. Significant accounting policies and interpretations (continued):

• (b) Distribution of net rental pool revenue to owners:

Net rental pool revenue is allocated to the owners, on a daily basis, as follows:

• (i) Net rental pool revenue minus occupancy fees for all units during such day.

• x Unit factor of such unit divided by the sum of all unit factors of all units in the rental pool on such day.

• (ii) Occupancy fees attributable to the unit for such day.

4. OMAPS:

Operating expenses included in the rental price of the rooms (ʺOMAPSʺ) amounted to $51,109 as at October 31, 2021 (2020 - $36,780) and are detailed below:

		2021		2020
Lift - First tracks and Summer	$	51,109	$	36,780

In 2021, management made a change in the presentation for OMAPS. The OMAPS are now accounted for as gross revenue and included in rental revenue whereas, in previous years, they were deducted from rental revenues. This change is in accordance with the applicable accounting standards and has been applied retrospectively.

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