Quri-Mayu Developments Ltd. — Interim / Quarterly Report 2020

Sep 18, 2020

QURI-MAYU DEVELOPMENTS LTD.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Unaudited)

For the Nine Months Ended July 31, 2020 and 2019

(Expressed in Canadian Dollars)

NOTICE OF NO AUDITOR REVIEW OF CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Under National Instrument 51-102 released by the Canadian Securities Administrators, if an auditor has not performed a review of the condensed consolidated interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.

The accompanying unaudited condensed consolidated 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 condensed consolidated interim financial statements in accordance with standards established by the Chartered Professional Accountants of Canada for a review of condensed consolidated interim financial statements by an entity’s auditor.

Quri-Mayu Developments Ltd. Condensed Consolidated Interim Statements of Financial Position (Unaudited - Expressed in Canadian Dollars)

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Note July 31, 2020 October 31, 2019
Assets
Cash $ 12,365 $ 27,371
GST receivable 7,023 32,692
Prepaid expenses and deposit 33,750 33,750
Total Assets $ 53,138 $ 93,813
Liabilities
Accounts payable and accrued liabilities 3 $ 465,728 $ 389,215
Loans payable 4 180,422 180,422
Current and Total Liabilities 646,150 569,637
Shareholders' Deficiency
Share capital 5 312,736 312,736
Deficit (905,748) (788,560)
Total Shareholders' Deficiency (593,012) (475,824)
Total Liabilities and Shareholders' Deficiency $ 53,138 $ 93,813
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Nature and continuance of operations (Note 1) Subsequent event (Note 10)

Approved and authorized for issue by the Board of Directors on September 18, 2020:

“Braydon Hobbs” Braydon Hobbs, Director	“Ronald Woo”
	Ronald Woo, Director

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

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Quri-Mayu Developments Ltd. Condensed Consolidated Interim Statements of Loss and Comprehensive Loss (Unaudited - Expressed in Canadian Dollars)

	For the three months ended July 31, For the three months ended July 31, For the nine months ended July 31, For the nine months ended July 31,
Note	2020 2019 2020 2019
Operating Expenses Administration	$ 13,907 $ 7,606 $ 35,849 $ 7,654
Listing and filing fees Professional fees Management and consulting fees Propertyevaluation 6	- 225 2,143 26,510 4,875 308 9,069 785 11,573 30,000 51,377 88,875 - - 18,750 375,000
Total expenses Other Item	(30,355) (38,139) (117,188) (498,824)
Interest expense 4	- - -(82)
Loss and comprehensive loss	$(30,355) $(38,139) $(117,188) $(498,906)
Basic and diluted loss per common share	$ (0.00) $ (0.00) $ (0.01) $ (0.06)
Weighted average and fully diluted common shares outstanding	19,496,120 8,567,017 19,496,120 8,567,017

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

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Quri-Mayu Developments Ltd.

Condensed Consolidated Interim Statement of Changes in Shareholders’ Deficiency (Unaudited - Expressed in Canadian Dollars)

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Common Shares
Number Share Capital Deficit Total
Balance at October 31, 2018 2,105,400 $ 7,250 $ (29,312) $ (22,062)
Shares issued, under debt settlement agreement 12,325,700 216,514 - 216,514
Shares issued for acquisition of 1169783 B.C. Ltd. 5,065,020 88,972 - 88,972
Loss for the period - - (498,906) (498,906)
Balance at July 31, 2019 19,496,120 $ 312,736 $ (528,218) $ (215,482)
Balance at October 31, 2019 19,496,120 312,736 (788,560) (475,824)
Loss for the period - - (117,188) (117,188)
Balance at July 31, 2020 19,496,120 $ 312,736 $ (905,748) $ (593,012)
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The accompanying notes are an integral part of these condensed consolidated interim financial statements.

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Quri-Mayu Developments Ltd. Condensed Consolidated Interim Statements of Cash Flows (Unaudited - Expressed in Canadian Dollars)

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For the nine months For the nine months
ended July 31, ended July 31,
2020 2019
Operating activities
Net loss $ (117,188) $ (498,906)
Changes in non-cash working capital items:
GST receivable 25,670 (26,658)
Accounts payable and accrued liabilities 76,512 519,574
Net cash flows used in operating activities (15,006) (5,990)
Investing activities
Mineral Property - (27,295)
Cash acquired on acquisition of subsidiary - 7,081
Net cash flows used in investing activities - (20,214)
Financing activities
Related party loans - 53,660
Net cash flows provided by financing activities - 53,660
Net change in cash (15,006) 27,456
Cash, beginning 27,371 -
Cash, ending $ 12,365 $ 27,456
Non cash transactions:
Common shares issued for consulting fees $ - $ 216,514
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The accompanying notes are an integral part of these condensed consolidated interim financial statements.

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Quri-Mayu Developments Ltd. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended July 31, 2020 and 2019 (Unaudited - Expressed in Canadian Dollars)

1. Nature and continuance of operations

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 through a plan of arrangement.

The Company’s head office is located at 1000 – 1285 West Pender Street, Vancouver, BC Canada V6E 4B1. The principal business of the Company is the identification, evaluation and acquisition of mineral properties, as well as exploration of mineral properties once acquired.

These condensed consolidated interim financial statements have been prepared on the basis of accounting principles applicable to a going concern, which presumes the realization of assets and settlement of liabilities in the normal course of operations in the foreseeable future. At July 31, 2020, the Company had not achieved profitable operations, had a net loss of $117,188 for the nine months ended July 31, 2020 and accumulated losses of $905,748 (October 31, 2019 - $788,560) since inception, all of which indicate a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon a number of factors including obtaining additional financing as required and having profitable operations. These condensed consolidated interim financial statements do not give effect to adjustments to the carrying value and classification of assets and liabilities and related expense that would be necessary should the Company be unable to continue as a going concern. If the going concern assumption is not appropriate, material adjustments to the condensed consolidated interim financial statements could be required.

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.

2. Significant accounting policies and basis of presentation

These condensed consolidated interim financial statements were authorized for issue by the directors of the Company on September 18, 2020.

a. Statement of compliance

These condensed consolidated interim financial statements, including comparatives, have been prepared in accordance with International Accounting Standard (“IAS”) 34, Interim Financial Reporting. Certain information and note disclosures normally included in the audited annual financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”) have been omitted or condensed. As a result, these condensed consolidated interim financial statements should be read in conjunction with the Company’s audited financial statements for the year ended October 31, 2019.

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Quri-Mayu Developments Ltd. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended July 31, 2020 and 2019 (Unaudited - Expressed in Canadian Dollars)

2. Significant accounting policies and basis of presentation (Continued)

b. basis of presentation

The condensed consolidated interim financial statements of the Company have been prepared on a historical cost basis except for certain financial instruments classified in accordance with measurements standards under IFRS. The condensed consolidated interim financial statements are presented in Canadian dollars unless otherwise specified.

Certain comparative figures have been reclassified to conform to the current year’s presentation.

c. Consolidation

The condensed consolidated interim financial statements include the accounts of the Company and its controlled subsidiary. Details of controlled subsidiaries are as follows:

Country of incorporation	Percentage owned*
	July 31, October 31, 2020 2019
1169783 B.C. Ltd.(“783 BC”) Canada	100% 100%
*Percentage of voting power is in proportion to ownership.

d. Significant accounting judgments estimates and assumptions

The preparation of condensed consolidated interim financial statements in conformity with IFRS requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated interim financial statements and the reported revenues and expenses during this period.

Although management uses historical experience and its best knowledge of the amount, events or actions to form the basis for judgments and estimates, actual results may differ from these estimates.

The most significant accounts that require estimates as the basis for determining the stated amounts include the recoverability of evaluation and exploration assets and recognition of deferred tax amounts.

Critical judgments exercised in applying accounting policies that have the most significant effect on the amounts recognized in the condensed consolidated interim financial statements are as follows:

Going concern

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.

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Quri-Mayu Developments Ltd. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended July 31, 2020 and 2019 (Unaudited - Expressed in Canadian Dollars)

3. Accounts payables and accrued liabilities

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July 31 October 31,
2020 2019
$ $
Accounts payable 237,165 161,777
Amounts due to related parties (Note 6) 212,438 212,438
Accrued liabilities 16,125 15,000
Accounts payable and accrued liabilities 465,728 389,215
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4. Loans payable

On February 15, 2019, the Company acquired a 100% interest in 783 B.C. As a result of the transaction, the Company assumed the first loan of $15,000 payable to a related company (‘Xmin’).

During the year ended October 31, 2019, the company received two additional loans from Xmin. The first loan of $165,422 is unsecured, non-interest bearing and has no specified terms of repayment.

The second loan of $25,000 was secured by a promissory note, was payable on demand and bore interest at 6% per annum. The loan principal was settled during the prior year. Accrued interest as at July 31, 2020 is $82 and is included in accounts payable and accrued liabilities. (Note 3)

5. Share capital

Authorized share capital

Unlimited common shares without par value.

Unlimited preferred shares without par value.

Issued and outstanding

19,496,120 common shares as at July 31, 2020 (October 31, 2019 – 19,496,120).

No new common shares were issued during the nine months ended July 31, 2020.

As at July 31, 2020, the Company has no stock options and warrants outstanding.

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Quri-Mayu Developments Ltd. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended July 31, 2020 and 2019 (Unaudited - Expressed in Canadian Dollars)

6. Related party transactions

Related party balances

At July 31, 2020, accounts payable includes $212,438 (October 31, 2019 - $212,438) owing to directors and officers. (Note 3)

At July 31, 2020, loans of $180,422 (October 31, 2019 - $180,422) are owing to a related company. (Note 4)

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

Related party transactions

Key management personnel include those persons having authority and responsibility for planning, directing and controlling activities of the Company as a whole. The Company has determined that its key management personnel consists of the Company’s Board of Directors and corporate officers.

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

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July 31, July 31,
2020 2019
$ $
Management and consulting fees - 10,000
Property evaluation costs 18,750 375,000
18,750 385,000
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7. Capital Management

The Company defines its capital as shareholders’ equity. The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company, in order to support the acquisition and exploration and development of mineral properties.

The Board of Directors do not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future development of the business. As such, the Company will rely on the equity markets to fund its activities. In addition, the Company is dependent upon external financings to fund activities.

In order to carry out planned exploration and pay for administrative costs, the Company will need to raise additional funds. The Company will continue to assess new properties and seek to acquire an interest in additional properties if it feels there is sufficient geologic or economic potential and if it has adequate financial resources to do so.

Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.

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Quri-Mayu Developments Ltd. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended July 31, 2020 and 2019 (Unaudited - Expressed in Canadian Dollars)

8. Financial instruments

The Company’s financial instruments consists of cash, accounts payable and accrued liabilities and loans payable. The carrying values of cash, accounts payable and accrued liabilities and loans payable approximate their fair values because of the relatively short-term nature of the instruments. These estimates are subjective and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

There are three levels of the fair value hierarchy as follows:

• Level 1: Values based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.

• Level 2: Values based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability.

• Level 3: Values based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.

All financial instruments are classified as Level 1.

The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board of Directors approves and monitors the risk management processes, inclusive of documented investment policies, counterparty limits, and controlling and reporting structures. The type of risk exposure and the way in which such exposure is managed is summarized as follows:

Credit risk

The Company is not exposed to credit risk. The Company’s cash is held in large Canadian financial institutions. The Company has not experienced nor is exposed to any significant credit losses.

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Financial assets and liabilities with variable interest rates expose the Company to cashflow interest rate risk. The Company does maintain bank accounts which earn interest at variable rates but it does not believe it is currently subject to any significant interest rate risk.

Foreign exchange risk

The Company’s functional and reporting currency is the Canadian dollar and major purchases are transacted in Canadian dollars. As a result, the Company’s exposure to foreign currency risk is minimal.

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Quri-Mayu Developments Ltd. Notes to the Condensed Consolidated Interim Financial Statements For the Nine Months Ended July 31, 2020 and 2019 (Unaudited - Expressed in Canadian Dollars)

8. Financial instruments (Continued)

Liquidity risk

The Company’s ability to continue as a going concern is dependent on management’s ability to raise required funding through future equity issuances and through short-term borrowing. The Company manages its liquidity risk by forecasting cash flows from operations and anticipating any investing and financing activities. Management and the Board of Directors are actively involved in the review, planning and approval of significant expenditures and commitments. Management believes that the liquidity risk is high.

As at July 31, 2020, the Company had a cash balance of $12,365 (October 31, 2019 - $27,371) to settle current liabilities of $646,150 (October 31, 2019 - $569,636).

9. Segmented information

The Company operates in one reportable operating segment, being the acquisition and exploration of mineral properties in Canada. As the operations comprise of single reporting segment, amounts disclosed also represent segment amounts.

10. Subsequent event

On September 11, 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.

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