Quri-Mayu Developments Ltd. — Management Reports 2020

Sep 18, 2020

QURI-MAYU DEVELOPMENTS LTD.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF THE COMPANY’S FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED JULY 31, 2020

FORM 51-102F1

DATE AND SUBJECT OF REPORT

The following Management Discussion & Analysis (“MD&A”) is intended to assist in the understanding of the trends and significant changes in the financial condition and results of operations of Quri-Mayu Developments Ltd. (hereinafter “Quri-Mayu” or the “Company”) for the nine months ended July 31, 2020. The MD&A should be read in conjunction with the unaudited condensed consolidated interim financial statements for the nine months ended July 31, 2020. The MD&A has been prepared effective September 18, 2020.

SCOPE OF ANALYSIS

The following is a discussion and analysis of Quri-Mayu Developments Ltd. The Company reports its financial results in Canadian dollars and in accordance with International Financial Reporting Standards (“IFRS”) and related interpretations as issued by the International Standards Board (“IASB”). All published financial results include the assets, liabilities and results of operations for the Company and its subsidiaries.

FORWARD LOOKING STATEMENTS

The information set forth in this MD&A contains statements concerning future results, future performance, intentions, objectives, plans and expectations that are, or may be deemed to be, forward-looking statements. These statements concerning possible or assumed future results of operations of the Company are preceded by, followed by or include the words ‘believes,’ ‘expects,’ ‘anticipates,’ ‘estimates,’ ‘intends,’ ‘plans,’ ‘forecasts,’ or similar expressions. Forward-looking statements are not guarantee of future performance. These forward-looking statements are based on current expectations that involve numerous risks and uncertainties, including, but not limited to, those identified in the Risks Factors section. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate. These factors should be considered carefully, and readers should not place undue reliance on forward-looking statements. The Company may not provide updates or revise any forward-looking statements, except those otherwise required under paragraph 5.8(2) of NI 51-102, whether written or oral that may be made by or on the Company's behalf.

TRENDS

Other than as disclosed in this MD&A, the Company is not aware of any trends, uncertainties, demands, commitments or events which are reasonably likely to have a material effect upon its revenue, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.

GENERAL BUSINESS AND DEVELOPMENT

Quri-Mayu is in the business of mining and exploration.

The Company’s office is located at 1000 – 1285 W Pender Street, Vancouver, BC, V6E 4B1, Canada.

The Company is a reporting issuer in the Province of British Columbia. All public filings for the Company are on the SEDAR website www.sedar.com.

BUSINESS CHRONOLOGY

Quri-Mayu Developments Ltd. (the "Company") was incorporated as Quri-Mayu Ventures Ltd. as a wholly-owned subsidiary of reporting issuer EVI Global Group Developments Corp. (“EGGD”) on November 28, 2017 under the laws of British Columbia, Canada. The Company changed its name to Quri-Mayu Developments Ltd. on August 13, 2018. The Company was divested (spun out) with EGGD on October 3, 2018.

On February 15, 2019, the Company acquired a 100% interest in a newly formed private company, 1169783 B.C. Ltd. (“783 B.C.”) through the issuance of 5,065,020 common shares with a fair value of $88,972.

From incorporation to date, no significant operations have begun, and management is continuing to evaluate and consult on available business opportunities.

RESULTS OF OPERATIONS

INTERIM RESULTS

For the nine months ended July 31, 2020

The Company had no revenue and a net loss of $117,188 for the nine months ended July 31, 2020 compared to a net loss of $498,906 for the nine months ended July 31, 2019, representing a decrease in loss of $381,718.

Major variances are as follows:

• For the nine months ended July 31, 2020, property evaluation costs were $18,750 compared to $375,000 for the nine months ended July 31, 2019. The decrease in property evaluation costs relates to reduction in Company’s activity in investigating potential exploration and mining opportunities;

• For the nine months ended July 31, 2020, management and consulting fees were $51,377 compared to $88,875 for the prior year period ended July 31, 2019. The decrease in fees is related to the higher prior year period costs that were associated with consultation on the Company’s prospective projects and business development.

• For the nine months ended July 31, 2020, administration costs were $35,849 compared to $7,654 for the prior year period ended July 31, 2019. The increase is related to new shared office premises and administration services which commenced in May 2019;

• For the nine months ended July 31, 2020, filing fees were $2,143 compared to $26,510 for the prior year period ended July 31, 2019. The decrease in fees is related to the higher prior year period costs that were associated with listing of the Company in the Canadian Securities Exchange.

For the three months ended July 31, 2020

The Company had no revenue and a net loss of $30,355 for the three months ended July 31, 2020 compared to a net loss of $38,139 for the three months ended July 31, 2019, representing a decrease in loss of $7,784.

Major variances are as follows:

• For the quarter ended July 31, 2020, management and consulting fees were $11,573 compared to $30,000 for the prior year quarter ended July 31, 2019. The decrease in fees is related to the higher prior year quarter services associated with consultation on the Company’s prospective projects and business development;

• For the quarter ended July 31, 2020, administration costs were $13,907 compared to $7,606 for the prior year quarter ended July 31, 2019. The increase is related to the higher monthly charge in the current quarter for the shared office premises and administration services;

• For the quarter ended July 31, 2020, professional fees were $4,875 compared to $308 for the prior year period quarter ended July 31, 2019. The increase in fees is related to the higher accrual of accounting fees for audit and income tax preparations in the current quarter.

SUMMARY OF FINANCIAL RESULTS FOR RECENTLY COMPLETED QUARTERS

The following table summarizes the financial results of operations for the eight most recent fiscal quarters ended July 31, 2020:

	Jul 31,	April 30,	Jan 31,	Oct 31,	Jul 31,	Apr 30,	Jan 31,	Oct 31,
	2020(Q3)	2020(Q2)	2020(Q1)	2019(Q4)	2019(Q3)	2019(Q2)	2019(Q1)	2018(Q4)
	$	$	$	$	$	$	$	$
Expenses	30,355	37,212	49,620	72,544	38,139	32,875	427,810	28,959
Other items	-	-	-	187,798	-	82	-	-
Net loss	(30,355)	(37,212)	(49,620)	(260,342)	(38,139)	(32,957)	(427,810)	(28,959)
Basic and diluted lossper share	(0.00)	(0.00)	(0.00)	(0.01)	(0.01)	(0.01)	(0.12)	(0.06)
Assets	53,138	59,381	71,769	93,813	229,302	252,749	23,243	1,852
Working capital (deficiency)	(593,012)	(562,657)	(525,444)	(475,824)	(357,418)	(319,279)	(233,358)	(22,062)

The Company had not commenced commercial operations as of July 31, 2020, nor to the date of filing of this MD&A. Notwithstanding, the Company and management continue to identify business opportunities for the Company.

LIQUIDITY AND CAPITAL RESOURCES

As at July 31, 2020, the Company had a working capital deficit of $593,012.

During the nine months ended July 31, 2020, the Company incurred a net loss of $117,188 and, as at July 31, 2020, had a cumulative deficit of $905,748.

Subsequent to July 31, 2020, the Company completed the first tranche of a non-brokered private placement financing, issuing 6,666,000 common shares at a price of $0.10 per share for gross proceeds of $666,000.

The continuation of the Company as a going-concern is dependent on its ability to raise additional capital or debt financing, including on reasonable terms, in order to meet business objectives towards achieving profitable business operations.

There can be no assurance that consultants, service providers, and advisors will continue to extend unpaid accounts, services, and liabilities to the Company in order to maintain its business and filing requirements as a reporting issuer.

SHARE CAPITAL AND OUTSTANDING SHARE DATA

Common Shares:

The Company has 19,496,120 common shares as of July 31, 2020

The Company has 26,156,120 common shares at the date of this report.

The Company has no options or warrants issued or outstanding as of July 31, 2020 and the date of this report.

Related party balances

At July 31, 2020, accounts payable includes $212,438 (October 31, 2019 - $212,438) owing to directors and officers.

At July 31, 2020, loans of $180,422 (October 31, 2019 - $180,422) are owing to a related company (‘Xmin’).

Amounts due to related parties are unsecured, non-interest bearing and have no specified terms of repayment.

Related party transactions

During the nine months ended July 31, 2020 and 2019, the following amounts were incurred with directors and officers of the Company:

directors and officers of the Company:
	July 31, 2020 $ July 31, 2019 $
Management and consulting fees	- 10,000
Propertyevaluation costs	18,750 375,000
	18,750 385,000

MANAGEMENT OF INDUSTRY AND FINANCIAL RISK

The Company is in the mineral exploration sector and manages related industry risk issues directly.

Management is not aware of and does not anticipate any significant environmental exposure or risk of remediation costs or liabilities as it does not currently have any active mineral exploration operations.

The Company’s has minimal exposure to any financial risks having not commenced commercial operations. The Company’s primary financial risk to liquidity risk due to its reliance on demand loans, vendors and consultants continuing to extend payment terms, and management continuing to accrue expenses for unpaid services. Any one or more of these liquidity risks may have a material financial impact on the Company, should favorable loans, services, and/or terms become no longer available to the Company.

OFF-BALANCE SHEET TRANSACTIONS

The Company has not entered into any significant off-balance sheet arrangements or commitments.

RISK AND UNCERTAINTIES

Core Business

The Company’s business focus is on mining and exploration.

Significant capital investment, geological and mining personnel, management, and consultants will be required for the development of any potential mining and exploration project.

There is no certainty that any expenditures to be made by the Company as described herein will result in successful mining and exploration. There is aggressive competition within the mineral exploration and development sector with larger exploration companies developing related technology internally. As such, significant capital investment is required along with extensive other resources to develop any potential mineral claims and future mining operations, if attainable. There can be no assurance the Company will be successful in obtaining required capital on acceptable terms to reach its business objectives.

Some risks the Company may be exposed to include, but are not limited to the following:

Conflicts of Interest

The Company’s directors and officers also serve as directors and/or officers of other private and public companies involved in other business ventures. Consequently, there exists the possibility for such directors and/or officers to be in a position of conflict. Any decision made by such directors involving the Company will be made in accordance with their duties and obligations to deal fairly and in good faith with the Company and such other companies. As such, these individuals would refrain from voting on the conflicted matter and would be forced to forego potential business or conduct such business in conflict.

Going Concern Risk

The ability of the Company to continue as a going concern is uncertain and dependent upon its ability to achieve profitable operations, obtain additional capital and receive continued support from its shareholders. Management of the Company will have to raise capital through private placements or debt financing and proposes to continue to do so through future private placements and offerings. The outcome of these matters cannot be predicted at this time.

Operating History and Expected Losses

The Company expects to make significant investments in order to develop its services, increase marketing efforts, improve its operations, conduct research and development and update its equipment. As a result, start-up operating losses are expected, and such losses may be greater than anticipated, which could have a significant effect on the long-term viability of the Company.

Competition

The mining and exploration sector is highly competitive. Other companies in the sector have significantly more geological, engineering, technical, mining expertise, equipment, and financial resources. There can be no assurance the Company will attain a level of such resources in order to compete with.

Reliance on Joint Ventures, Partnerships, or Minority Interests

The nature of the Company’s operations may require it to enter into various agreements with partners, joint venture partners, or minority interests in mineral and exploration projects.

There is no guarantee that those with whom the Company needs to deal will be successful in these joint or participating interests for mining and exploration.

Uninsured Risks

The Company may carry insurance to protect against certain risks in such amounts as it considers adequate. Risks not insured against include key person insurance as the Company heavily relies on the company’s directors and officers.

Growth Management

In executing the Company’s business plan for the future, there will be significant pressure on management, operations, technical, and other assets or resources. The Company anticipates that its operating and personnel costs will increase substantially in the future when and if it is able to commence commercial operations. In order to manage its growth, the Company will have to substantially increase consultants, geological personnel, engineers, technical, human resources, and executive and administration staff to run its operations, while at the same time efficiently maintaining a large number of relationships with third parties. The Company will also have to acquire, lease, or rent a substantial amount of mining and extraction equipment. There can be no assurance that the Company will be able to meet these growth objectives.

Reliance on Key Personnel, Service Provider, and Advisors

The Company relies heavily on its director and officers, along with key service providers, business advisors and consultants. The loss of their services would have a material effect on the business of the Company. There can be no assurance that directors and officers, or consultants engaged by the Company will continue to provide services in the employ of, or in a consulting capacity to, the Company or that they will not set up competing businesses or accept positions with competitors. There is no guarantee that certain employees of, and contractors to, the Company who have access to confidential information will not disclose the confidential information.

COVID-19

Since March 2020, several measures have been implemented in Canada and the rest of the world in response to the increased impact from novel coronavirus (COVID-19). The Company continues to operate its business at this time. While the impact of COVID-19 is expected to be temporary, the current circumstances are dynamic and the impacts of COVID-19 on business operations cannot be reasonably estimated at this time. The Company anticipates this could have an adverse impact on its business, results of operations, financial position and cash flows in the future periods.

MANAGEMENT’S RESPONSIBILITY FOR THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

The information provided in this report as referenced from the Company’s condensed consolidated interim financial statements for the referenced reporting period is the sole responsibility of management. In the preparation of the information along with related and accompanying statements and estimates contained herein, management uses careful judgement in assessing the values (or future values) of certain assets or liabilities. It is the opinion of management that such estimates are fair and accurate as presented.

OTHER INFORMATION

Additional information on the Company is available on SEDAR at www.sedar.com.

CORPORATE INFORMATION

Directors: Kevin Smith, CEO Braydon Hobbs, CFO Ronald Woo Auditor: Adam Sung Kim Ltd.

Legal Counsel: Clark Wilson, LLP