Record Resources Inc. — Management Reports 2023

Aug 22, 2023

GREENBANK VENTURES INC.

MANAGEMENT DISCUSSION AND ANALYSIS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(Discussion dated August 21, 2023)

Suite 600 – 535 Howe Street, Vancouver, BC V6C 2Z4

GREENBANK VENTURES INC. MANAGEMENT DISCUSSION AND ANALYSIS For the ended June 30, 2023

INTRODUCTION

This management discussion and analysis (“MD&A) of the financial condition and results of operations of Greenbank Ventures Inc. (formerly known as Leis Industries Limited) (“the Company”) should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2022 and 2021. The consolidated financial statements, including the comparative statements, have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and interpretations issued by the IFRS Interpretations Committee (“IFRC”). This MD&A was prepared with information available as of August 21, 2023. Additional information and disclosure relating to the Company can be found on SEDAR at www.sedar.com.

OVERVIEW

Greenbank Ventures Inc. (formerly known as Leis Industries Limited) (“Company”) is a British Columbia based Company that is primarily engaged in real estate development. The Company is listed on the NEX board (‘NEX) under the trading symbol LES.H. The Company changed its name on August 20, 2020 to Greenbank Ventures Inc (trading symbol GNBK.H).

A wholly owned subsidiary, Salt Resorts Inc. (“Subsidiary”) was formed to acquire real estate property for development purposes. The Company prepares consolidated statements to include the financial activity of its Subsidiary. Any significant intercompany transactions and balances have been eliminated from the statements. Currently the only financial transactions incurred by the Subsidiary are the purchase of the real-properties, capitalized property taxes and development costs.

LIQUIDITY AND CAPITAL RESOURCE

The Company had shareholders’ deficiency of $945,036 and a working capital deficit of $1,148,236 at June 30, 2023, compared to shareholders deficiency of $869,340 and a working capital deficit of $277,183 at December 31, 2022. The Company’s debt of $1,180,668 consists of trade and other payables and loans from shareholders.

The accumulated deficit at June 30, 2023 is $3,305,882 compared to deficit of $3,230,186 as at December 31, 2022. The Company is exposed to liquidity risk through its accounts payable and loan payable, which are all due on demand. The Company uses cash forecasts to ensure as far as possible that there is sufficient cash on hand to meet short-term business requirements. Liquidity risk is assessed as high.

RESULTS OF OPERATIONS

	Six months ended	Six months ended	Six months ended	Six months ended
	June 30,	2023	June 30,	2022
	$		$
Expenses
General and administrative		852		261
Interest on loans payable		132,110		24,303
Management fees		30,000		30,000
Professional fees		–		49,037
Transfer agent & filingfees		6,085		6,799
Total expenses		169,046		110,400
Cash provided by (used in) operating activities		(84,981)		(27,036)
Cash provided by (used in) financing activities		100,000		–

• 1 -

GREENBANK VENTURES INC. MANAGEMENT DISCUSSION AND ANALYSIS For the ended June 30, 2023

The Company recorded a net loss of $75,696 for the period ended June 30, 2023 (“Current Period”) ($0.01 loss per common share) compared to a net loss of $7,410 ($0.00 loss per common share) for the period ended June 30, 2022 (“Comparative Period”), an increase of $68,286.

Interest expense increased by $107,807 for the period ended June 30, 2023 compared to the comparative period, due to accelerated accretion of loans as they became current as at January 31, 2023.

Professional fees of $Nil for the period ended June 30, 2023, compared to $49,037 for the period ended June 30, 2022. The decrease is due to fees incurred for accounting and legal services associated with the proposed transaction (Proposed Transaction).

SUMMARY OF QUARTERLY RESULTS

The following table summarizes selected financial information from the Company’s unaudited condensed interim financial statements for the last eight quarters.

Quarter Ended	Revenue	Net (Loss)	(Loss) Income	(Loss) Income
		Income	Per Common	Per Common
			Share	Diluted Share
	$	$	$	$
June 30, 2023	–	66,017	(0.01)	(0.01)
March 31, 2023	–	(141,713)	(0.02)	(0.02)
December 31, 2022	(26,308)	(619,472)	(0.07)	(0.07)
September 30, 2022	(12,959)	(184,243)	(0.02)	(0.02)
June 30, 2022	85,610	44,241	(0.00)	(0.00)
March 31, 2022	11,087	(51,651)	0.01	0.01
December 31, 2021	31,855	(131,588)	(0.00)	(0.00)
September 30, 2021	8,747	(30,238)	(0.00)	(0.00)

TRANSACTIONS WITH RELATED PARTIES

As at June 30, 2023, the amount of $3,000 (December 31, 2022 - $3,000) is recorded in accrued liabilities to a company controlled by the former Corporate Secretary of the Company.

As at June 30, 2023, the amount of $Nil (December 31, 2022 - $94,500) is owed to a company controlled by the CFO of the Company. The amount of $94,500 was written off on the statements of loss and comprehensive loss on June 1, 2023. During the period ended June 30, 2023, the Company recorded management fees of $Nil (2022 - $30,000).

As at June 30, 2023, the amount of $30,000 (December 31, 2022 - $Nil) is owed to the CFO of the Company. The amount is included in accounts payable. During the period ended June 30, 2023, the Company recorded management fees of $30,000 (2022 - $Nil).

As at June 30, 2023, the amount of $Nil (December 31, 2022 - $252) included in accounts payable and the amount of $227,845 (December 31, 2022 - $115,380) included in loan payable are owed to a company controlled by a director of the Company. During the period ended June 30, 2023, the Company recorded $Nil (2022 - $25,240) in professional fees to a company controlled by a director of the Company.

• 2 -

GREENBANK VENTURES INC. MANAGEMENT DISCUSSION AND ANALYSIS For the ended June 30, 2023

As at June 30, 2023, the amount of $625,178 (December 31, 2022 - $531,941) is owed to a shareholder of the Company. The amount is included in loans payable.

Related party transactions are recorded at the exchange amount as agreed to by the parties.

RISKS AND UNCERTAINTIES

Credit risk

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The Company’s cash is on deposit at a major financial institution. Amounts receivable consist primarily of goods and services tax refunds due from the Government of Canada. Credit risk associated with cash and receivables are considered minimal.

The Company’s advance and loans receivable are due from Greenbank Holdings and is fully impaired.

Interest rate risk

Interest rate risk is the risk that changes in interest rates will affect the fair value or future cash flows of the Company's financial instruments. The Company is exposed from time to time to interest rate risk as a result of holding fixed rate temporary investments of varying maturities. The Company reduces the risk that it will realize a loss as a result of a decline in the fair value of these investments by limiting these investments to highly liquid securities with short-term maturities. Interest rate risk is assessed as low.

Liquidity risk

Liquidity risk is the risk that the Company will be unable to meet its financial obligations as they come due. The Company is exposed to liquidity risk through its accounts payable and loans payable.

The Company uses cash forecasts to ensure as far as possible that there is sufficient cash on hand to meet short-term business requirements. Liquidity risk is assessed as high.

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rate, interest rates and equity prices will affect the company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. The Company is not exposed to market risk.

Environmental risk

The Company is subject to various federal, provincial and municipal laws relating to environmental matters. Such laws provide that the Company could be liable for costs of removal and remediation of hazardous toxic substances released on or in its land held for development and sale or disposed of at other locations. The failure to remove or remediate such substances, if any, could adversely affect the Company’s ability to sell its land or to borrow using the land as collateral and, potentially, could result in future claims against the Company.

The Company minimizes its environmental risk by performing various environmental assessments before acquiring the land and during the development of the land to ensure no hazardous substances reside on the land before acquisition, are released during development, or reside on the land after completion of the development. The Company is not aware of any material liabilities at this time.

• 3 -

GREENBANK VENTURES INC. MANAGEMENT DISCUSSION AND ANALYSIS For the ended June 30, 2023

CRITICAL ACCOUNTING POLICIES AND MANAGEMENT ESTIMATES

Properties Held for Development

The Company’s accounting policies relating to properties held for development are described in Note 3 to the annual consolidated financial statements. In applying these policies, judgment has been applied in determining whether certain costs are additions to the carrying amount of the properties. Judgment is also applied in determining the extent and frequency of independent appraisals and determination of fair value.

Deferred Income Taxes

The Company applies judgment in determining the tax rate applicable in arriving at the value for deferred tax assets and liabilities and identifying the temporary difference giving rise to differed tax assets and liabilities.

Stock Options

Option-pricing models require the use of highly subjective estimates and assumptions including the expected stock price volatility. Changes in the underlying assumptions can materially affect the fair value estimates and, therefore, existing models do not necessarily provide reliable measurement of the fair value of the Company’s stock options.

Forward-Looking Statements

In addition to historical information, this report contains statements that could relate to future events and the Company’s future results. Although the Company believes the assumptions underlying these forward-looking statements are reasonable, any of these assumptions could prove to be inaccurate, and as a result, the forward-

looking statements made based on these assumptions could be incorrect. The Company’s operations involve risk and uncertainty, many of which are outside the Company’s control, and any one or any combination of these risks and uncertainties could affect whether the forward-looking statements ultimately prove to be correct.

DISCLOSURE OF OUTSTANDING SHARE DATA

Authorized share capital

Issued Share Capital

Class Common	Par Value N/A	Number Unlimited
Class	ParValue	Value
Common	8,667,595	$2,267,717

On March 17, 2020, the shareholders of the Company approved to reorganize the share capital by amending the Company’s Notice of Articles to authorize the issuance of an unlimited number of common shares and delete the Class A Preferred shares and the Class B Preferred shares from the authorized share capital. This Notice of Alteration was filed with the BC Registry on August 4, 2021.

On June 30, 2022, the 16,000 Class A preferred shares were converted to common shares on a basis of 1:1. The shares are held in trust with the Company’s transfer agent until such time that the beneficiaries may request transmittal.

Stock Options

The Company adopted a formal stock option plan on November 15, 2017. For details on the stock option plan, please refer to Note 7c of the condensed interim consolidated financial statements for the period ended June 30, 2023.

• 4 -

GREENBANK VENTURES INC. MANAGEMENT DISCUSSION AND ANALYSIS For the ended June 30, 2023

PROPOSED TRANSACTION

Pursuant to the Share Exchange Agreement, the Company will acquire 17,000,000 common shares of Greenbank Holdings in consideration for 17,000,000 common shares of the Company to be issued to the shareholders of Greenbank Holdings. The Company will seek to de-list from the TSX-V prior to closing of the proposed transaction and will apply for listing to the Canadian Securities Exchange ("CSE"), subject to fulfilling the CSE’s listing requirements.

Upon completion of the proposed transaction, the following is contemplated:

• i) the Promissory Note and Security Agreement shall terminate; and

• ii) the Company and Greenbank Holdings shall complete a financing of a minimum of $500,000 concurrent with and immediately prior to listing on the CSE.

Completion of the proposed transaction is subject to certain conditions precedent, which will be set forth in a definitive agreement and subject to regulatory and shareholder approval. The transaction is currently under discussion.

• 5 -