Resolute Resources Ltd. — Audit Report / Information 2023

Oct 26, 2023

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JUNE 30, 2023, AND 2022

KPMG LLP 205 5th Avenue SW Suite 3100 Calgary AB T2P 4B9 Tel 403-691-8000 Fax 403-691-8008 www.kpmg.ca

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors of Resolute Resources Ltd.

Opinion

We have audited the consolidated financial statements of Resolute Resources Ltd. (the Entity), which comprise:

• the consolidated statements of financial position as at June 30, 2023 and June 20, 2022
• the consolidated statements of loss and comprehensive loss for the years then ended
• the consolidated statements of changes in equity for the years then ended
• the consolidated statements of cash flows for the years then ended
• and notes to the consolidated financial statements, including a summary of significant accounting policies

(Hereinafter referred to as the "financial statements").

In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated financial position of the Entity as at June 30, 2023 and June 30, 2022, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

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 "Auditor's Responsibilities for the Audit of the Financial Statements" section of our auditor's report.

We are independent of the Entity in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada 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.

Material Uncertainty Related to Going Concern

We draw attention to Note 2 in the financial statements, which indicates that the Entity is in the exploration stage and therefore, it has generated no revenues to date.

As stated in Note 2 in the financial statements, these events or conditions, along with other matters as set forth in Note 2 in the financial statements, indicate that a material uncertainty exists that may cast significant doubt on the Entity's ability to continue as a going concern.

Our opinion is not modified in respect of this matter.

Other Information

Management is responsible for the other information. Other information comprises the information included in Management's Discussion and Analysis filed with the relevant Canadian Securities Commissions.

Our opinion on the financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit and remain alert for indications that the other information appears to be materially misstated.

We obtained the information included in Management's Discussion and Analysis filed with the relevant Canadian Securities Commissions as at the date of this auditor's report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in the auditor's report.

We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, 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.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's 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 financial statements.

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 financial statements, 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.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Entity's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Entity to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• 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.

Chartered Professional Accountants

Calgary, Canada October 25, 2023 To the Shareholders of Resolute Resources Ltd:

Management is responsible for the preparation and presentation of the accompanying consolidated financial statements, including responsibility for significant accounting judgements and estimates in accordance with International Financial Reporting Standards. This responsibility includes selecting appropriate accounting principles and methods, and making decisions affecting the measurement of transactions in which objective judgment is required.

In discharging its responsibilities for the integrity and fairness of the consolidated financial statements, management designs and maintains the necessary accounting systems and related internal controls to provide reasonable assurance that transactions are authorized, assets are safeguarded, and financial records are properly maintained to provide reliable information for the preparation of financial statements.

The Board of Directors (the "Board") is responsible for overseeing management in the performance of its financial reporting responsibilities. The Board fulfils these responsibilities by reviewing the financial information prepared by management and discussing relevant matters with management and external auditors. The Board is also responsible for recommending the appointment of the Company's external auditors.

KPMG LLP, an independent firm of Chartered Professional Accountants, is appointed by the Board to audit the consolidated financial statements and report directly to them; their report follows. The external auditors have full and free access to, and meet periodically and separately with, both the Board and management to discuss their audit findings.

(signed) Bradley Parkes

Bradley Parkes, CEO

Consolidated Statements of Financial Position

(Amounts in Canadian dollars)

	June 30,	June 30,
	2023	2022
ASSETS	$	$
CURRENT ASSETS
Cash	625,941	2,362,925
Restricted cash (note 4)	3,823,556	-
Prepaid share issue costs (note 4)	475,713	-
Prepaid expenses	99,678	67,651
GST receivable	57,356	6,695
	5,082,243	2,437,271
Long-term investments (note 6)	-	20,058
Exploration and evaluation assets (note 7)	1,258,123	216,949
	1,258,123	237,007
TOTAL ASSETS	6,340,366	2,674,278
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities	582,342	50,208
Subscription receipts (note 4)	4,000,200	-
	4,582,542	50,208
SHAREHOLDERS' EQUITY
Share capital (note 9)	2,779,048	2,750,827
Warrants (note 9)	31,250	31,250
Contributed surplus	204,676	37,500
Deficit	(1,257,150)	(195,507)
	1,757,824	2,624,070
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY	6,340,366	2,674,278

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

Going concern (note 2) Subsequent events (note 13)

On behalf of the board of Directors:

(signed) Bradley Parkes, Director (signed) Neil Bothwell, Director

Consolidated Statements of Loss and Comprehensive Loss

(Amounts in Canadian dollars)

	For the years ended June 30
	2023	2022
	$	$
EXPENSES
General and administrative	999,688	102,097
Stock based compensation (note 9)	94,053	37,500
Impairment of long-term investments(note 6)	20,058	-
Total expenses	1,113,799	139,597
Loss from operations	1,113,799	139,597
Other income (note 10)	-	(20,000)
Interest income	(52,156)	(1,554)
Net loss before income taxes	(1,061,643)	(118,043)
Deferred income tax (note 5)	-	-
Net loss and comprehensive loss	(1,061,643)	(118,043)
Net loss per common share
Basic and diluted (note 9)	(0.02)	-

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

Consolidated Statements of Changes in Equity (Amounts in Canadian dollars)

		Share		Contributed		Totalshareholders'
	Note	Capital	Warrants	surplus	Deficit	equity
Balance at July 1, 2021	$	391,064	$–	$–	$(77,464)	$313,600
Net loss and comprehensive loss		–	–	–	(118,043)	(118,043)
Common shares issued	9	2,421,380	–	–	–	2,421,380
Share issue costs	9	(61,617)	–	–	–	(61,617)
Common share warrants issued	9	–	31,250	–	–	31,250
Stock based compensation	9	–	–	37,500	–	37,500
Balance at June 30, 2022		$2,750,827	$31,250	$37,500	$(195,507)	$ 2,624,070
Balance at July 1, 2022		$2,750,827	$31,250	$37,500	$(195,507)	$ 2,624,070
Net loss and comprehensive loss		–	–	–	(1,061,643)	(1,061,643)
Common shares issued	9	22,500	–	–	–	22,500
Share issue costs	9	-	–	76,344	–	76,344
Stock options exercised	9	5,721	–	(3,221)	–	2,500
Stock based compensation		–	–	94,053	–	94,053
Balance at June 30, 2023		$2,779,048	$31,250	$204,676	$(1,257,150)	$ 1,757,824

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

Consolidated Statements of Cash Flows

(Amounts in Canadian dollars)

	For the years ended June 30,
	2023	2022
OPERATING ACTIVITIES	$	$
Net loss for the year	(1,061,643)	(118,043)
Add (deduct) items not involving cash:Stock based compensation (note 9)General and administrative (note 9)Impairment of long-term investment (note 6)Change in non-cash working capital:Prepaid expensesGST receivable	94,05310,50020,058(32,027)(50,661)	37,5006,000-(67,651)(3,190)
Accounts payable and accrued liabilities	258,790	26,138
Cash used for operating activities	(760,930)	(119,246)
INVESTING ACTIVITIESLong-term investments (note 6)Exploration and evaluation asset expenditures (note 7)	-(1,041,174)	(20,058)(63,654)
Cash used for investing activities	(1,041,174)	(83,712)
FINANCING ACTIVITIESIssuance of shares (note 9)Share issuance costs (note 9)Repayment of shareholder loan (note 8)Change in non-cash working capital	2,500--62,620	2,365,380(30,367)(1,160)-
Cash from financing activities	65,120	2,333,853
Increase (decrease) in cash	(1,736,984)	2,130,895
Cash, beginning of year	2,362,925	232,030
Cash, end of year	625,941	2,362,925

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

1. Reporting entity and description of the business

Resolute Resources Ltd. ("Resolute" or the "Company") was incorporated under the Business Corporations Act (Alberta) on June 05, 2019. The Company is engaged in the exploration for, development, and production, of oil and natural gas in Western Canada. Substantially all its activities and assets are focused on Alberta and Northeast British Columbia. The mailing address for the Company is: #100, 111 5th AVE SW Suite 204, Calgary, AB T2P 3Y6. The principal place of business for the Company is: 3300, 205 5th AVE SW, Calgary AB, T2P 2V7.

On January 5, 2023, the Company entered a letter of intent with Crossover Acquisitions Inc. ("Crossover"), a capital pool company as defined under TSX venture Exchange (the "Exchange"), whereby Crossover and Resolute plan to complete an arrangement, amalgamation, share exchange or similar transaction to ultimately form the resulting issuer that will continue on the business of Resolute. The intent is that the Transaction will constitute a Qualifying Transaction as such term is defined in the policies of the Exchange, and following the completion of the Transaction, Resolute will list as a Tier 2 Oil and Gas Issuer on the Exchange. The closing of the proposed transaction was conditional upon several factors, including shareholder approval by both the Company and Crossover, successful completion of a concurrent financing (see note 4 and 13) and final approval by the TSX Venture exchange (see note 13).

2. Basis of preparation

Principles of consolidation

The consolidated financial statements include the accounts of Resolute Resources Ltd. and its wholly owned subsidiary, Resolute Resources Corp. All intercompany transactions, balances, and unrealized gains and losses from intercompany transactions are eliminated on consolidation.

Statement of compliance

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). The consolidated financial statements were authorized for issuance by the Board of Directors of the Company on October 25, 2023.

Going concern

These consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assumes that the Company will continue operating for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations.

2. Basis of preparation (continued):

At June 30, 2023, the Company had working capital totaling $499,701 (2022 - $2,387,063), incurred a net loss of $1,061,643 (2022 - $118,043), and had cash used in operations of $760,930 (2022 - $119,246).

The Company continues to be in the exploration stage and therefore has generated no operating revenues to date. The Company will be required to incur significant expenditures to determine if commercially viable economic reserves exist and to further develop its exploration and evaluation assets. As a result, the Company may be required to raise additional capital or seek alternatives such as debt financing to develop its properties. There can be no assurance that such funding will be available to the Company if needed, or if available that it will be on acceptable terms. If adequate funds are not available to develop commercially viable economic reserves, the Company may not be able to further develop its exploration and evaluation properties and discharge its liabilities in the normal course of operations (see also note 13).

As a result of these conditions there is a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern.

Management believes the use of the going concern assumption is appropriate based upon the assumption the Company will have sufficient cash resources to meet ongoing obligations as they become due in the normal course of activities. The Company has successfully raised financing in the past and believes that it will be able to raise the necessary financing in the future.

These consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that would be necessary should the Company be unable to continue as a going concern.

Basis of measurement

The financial statements have been prepared on a historical cost basis.

The financial statements are presented in Canadian dollars, the Company's functional currency.

Use of estimates and judgement

The preparation of Financial Statements in accordance with IFRS requires management to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses during the reporting period. Actual results could differ as a result of using estimates. Estimates and

2. Basis of preparation (continued):

underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimates are revised and in any future years affected.

The Company faces uncertainties related to future environmental laws and climate-related regulations, which could affect the Company's financial position and future earnings. This transition to a lower-carbon society, as well as the physical impacts of climate change, could result in increased operating costs and reduced demand for oil and gas products. As a result, this could change several variables and assumptions used to determine the estimated recoverable amounts of the Company's oil and gas assets. The unpredictable nature, timing and extent of climate-related initiatives presents various risks and uncertainties, including to management's judgements, estimates and assumptions that affect the application of accounting policies.

Significant estimates and judgments made by management in the preparation of these consolidated financial statements are outlined below.

Critical judgments in applying accounting policies:

As described above, the Company is in the exploration stage of operations, however, when the Company begins active operations, the following critical judgments will be made by management in the process of applying accounting policies and that have the most significant effect on the amounts recognized in the Financial Statements.

The determination of a cash generating unit ("CGU") and whether an acquisition transaction constitutes a business combination is subject to management judgments. The recoverability of property and equipment and exploration and evaluation assets are assessed at the CGU level. A CGU is the lowest level at which there are identifiable cash inflows that are largely independent of the cash inflows of other CGUs. The determination of these CGUs is based on management's judgment regarding shared infrastructure, geographical proximity, petroleum type and similar exposure to market risk and materiality.

Management applies judgment in assessing the existence of indicators of impairment based on various internal and external factors. The estimated recoverable amount of a CGU or of an individual asset is determined as the greater of its fair value less costs of disposal and its value in use. The estimated recoverable amount will be derived from estimated proved and probable oil and gas reserves and the related cash flows and estimated discount rates. Estimated proved and probable oil and gas reserves and the related cash flows are based on significant assumptions which include forecasted oil and gas commodity prices, forecasted production, forecasted royalty costs, forecasted operating costs, and forecasted future development costs. Certain undeveloped land is also included in the estimated recoverable amount and significant judgement is used in estimating the recoverable amount including recent sales of similar properties in the same general area, recent exploration and discovery activity in the general area, and the remaining term of the undeveloped land.

The application of the Company's accounting policy for exploration and evaluation assets requires

2. Basis of preparation (continued):

management to make certain judgments as to future events and circumstances as to whether economic quantities of reserves will be found to assess if technical feasibility and commercial viability has been achieved.

Management applies judgment in reviewing each of its contractual arrangements to determine whether the arrangement contains a lease within the scope of IFRS 16. The measurement of lease liabilities is subject to management's judgment of the applicable incremental borrowing rate as discussed in note 3.

Judgments are made by management to determine the likelihood of whether deferred income tax assets at the end of the reporting period will be realized from future taxable earnings.

Key sources of estimation uncertainty:

As described above, the Company is in the exploration stage of operations, however, when the Company begins active operations, the following will be key estimates and the assumptions made by management affecting the measurement of balances and transactions in these Financial Statements.

The amounts recorded for the depletion of property and equipment, the provision for decommissioning liability and the amounts used in the impairment calculations are based on estimates of proved and probable oil and gas reserves and the related cash flows. Estimated proved and probable oil and gas reserves and the related cash flows are based on significant assumptions which include forecasted oil and gas commodity prices, forecasted production, forecasted royalty costs, forecasted operating costs, and forecasted future development costs. By their nature these estimates and assumptions are subject to uncertainty, and the impact on the financial statements of future periods could be material.

The decommissioning liability amounts recorded are based on estimates of inflation rates, credit adjusted risk-free rates, timing of abandonments and future abandonment costs, all of which are subject to uncertainty. Actual results could differ as a result of using estimates.

Share-based compensation expense involves the estimate of the fair value of stock option and warrants at time of issue. The estimate involves assumptions regarding the life of the option or warrant, dividend yields, interest rates, and volatility of the security subject to the option. The charge is measured using the Black-Scholes option pricing model, which could be replaced by a pricing model producing different results.

In a business combination, management makes estimates of the fair value of assets acquired and liabilities assumed which includes assessing the value of oil and gas properties based upon estimated proved and probable oil and gas reserves, and the related cash flows and discount rates.

Income tax liabilities and assets are recognized for the estimated tax consequences attributable to differences between the amounts reported in the financial statements and their respective tax bases, using enacted or substantively enacted income tax rates. The reversal timing of temporary differences

2. Basis of preparation (continued):

is based on management estimates. The effect of a change in income tax rates on deferred income tax liabilities and assets is recognized in net income (loss) in the period that the change occurs. The actual amount of income tax may be greater than or less than the estimates and the differences may be material.

With respect to the Company's investments, when estimating fair value, valuation estimates that involve unobservable characteristics involve greater estimation uncertainty.

Resolute follows the accrual method of accounting, making estimates in its financial and operating results. This may include estimates of revenues, royalties, operating, transportation and other expenses and capital items related to the period being reported, for which actual results have not yet been received: It is expected that these accrual estimates will be revised, upwards or downwards, based on the receipt of actual results.

3. Significant accounting policies:

As described above, the Company is in the exploration stage of operations, however, when the Company begins active operations the following significant accounting policies will be applied:

a) Cash

Cash consists of cash held with Canadian chartered banks on deposit and/or highly liquid investments. Cash held that is not available for use is classified as restricted cash.

b) Investments

Investments held by the Company are equity securities in a privately held entity and are classified as fair value through profit or loss. Subsequent to initial recognition, gains and losses arising from changes in the fair value of the investments are presented in the statement of comprehensive income in the period in which they arise.

c) Exploration and evaluation (E&E) assets

Exploration and Evaluation ("E&E") costs incurred prior to acquiring the legal right to explore in an area are charged directly to net income (loss). Costs incurred after the legal right to explore is obtained, but before technical feasibility and commercial viability of the area has been established, are capitalized as E&E assets. These costs generally include unproved property acquisition costs, geological and geophysical costs, sampling, and appraisals, drilling and completion costs and other directly attributable administrative costs.

Once an area is determined to be technically feasible and commercially viable the accumulated costs are tested for impairment. The carrying value, net of any impairment, is then reclassified to property and equipment as a Developed and Producing ("D&P") asset. If an area is determined not to be technically feasible and commercially viable, or the Company discontinues its exploration and

3. Significant accounting policies (continued):

evaluation activity, any unrecoverable costs are charged to net income (loss).

d) Impairment of assets

Non-financial assets

Non-financial assets are reviewed at the end of each reporting period for any indication that an asset may be impaired and, if so, the Company determines whether the asset is impaired by comparing the carrying amount to the estimated recoverable amount. E&E assets are also assessed for impairment when they are reclassified to P&E.

For the purpose of the impairment test, non-financial assets are grouped into the Company's single CGU, which is the smallest identifiable group of assets that generate cash inflows that are largely independent of the cash inflows from other assets or groups of assets. The recoverable amount of a CGU is the higher of its fair value less costs of disposal (FVLCOD) and its value in use (VIU). For the purposes of testing for impairment, E&E assets are tested at the CGU level.

The Company determines VIU and FVLCOD by estimating the future cash flows expected from the CGU, discounted at a rate which reflects the current market assessment of the time value of money and the risks specific to the CGU. FVLCOD is determined as the amount obtainable from the sale of the CGU in an arm's-length transaction between knowledgeable, willing parties, less the costs of disposal. The Company considers recent transactions for similar assets within the same industry as indicators of fair value.

An impairment loss is recognized when the carrying amount of the CGU exceeds its recoverable amount. Impairment losses for a CGU are allocated first to goodwill, if any exists, and then to the other assets of the group pro rata based on the carrying amount of each of the group's assets. The reductions in carrying amounts are recognized in profit or loss in the period in which they occur.

At the end of each reporting period, the Company assesses whether there is evidence that any impairment loss recognized in prior periods should be reduced because the asset's expected recoverable amount has increased since the impairment loss was recorded. If circumstances have changed since the recognition of an impairment loss such that the loss has been reduced, the carrying amount of the CGU is increased to the revised estimate of its recoverable amount but never beyond the previous value, net of depletion and depreciation, if no impairment loss had been recognized for the asset in prior periods.

Financial assets

The Company recognizes loss allowances for expected credit losses" ("ECLs") on its financial assets measured at amortized cost. Due to the nature of its financial assets, the Company measures loss allowances at an amount equal to expected lifetime ECLs. Lifetime ECLs are the anticipated ECLs that result from all possible default events over the expected life of a financial asset. ECLs are a probabilityweighted estimate of credit loss and are discounted at the effective interest rate of the related

3. Significant accounting policies (continued):

financial asset.

e) Decommissioning provisions

The Company recognizes provisions for legal, contractual, or constructive liabilities relating to the dismantling and reclamation of E&E assets and P&E in the period in which the liability is incurred. The amount recognized is the best estimate of the decommissioning cost, discounted to its present value using a risk-free discount rate, and is added to the carrying amount of the related asset and depreciated or depleted on a unit-of-production or straight-line basis, depending on the asset. The decommissioning provision is increased over time, with the accretion recognized as a financing expense. The Company reviews the appropriateness of the provision at the end of each reporting period. Changes in the estimated timing, cost of decommissioning, or discount rate are recognized on a prospective basis with an adjustment to the provision and corresponding adjustment to the related asset. When incurred, the actual costs of decommissioning are charged against the accumulated liability.

f) Leases

The Company assesses whether a contract is a lease based on whether the contract conveys the right to control the use of an underlying asset for a period in exchange for consideration. The Company allocates the consideration in the contract to each lease component based on their relative stand-alone prices.

Leases are recognized as a right-of-use ("ROU") asset and a corresponding lease liability at the date on which the leased asset is available for use by the Company. Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of fixed payments, variable lease payments that are based on an index or a rate, amounts expected to be paid by the lessee under residual value guarantees, the exercise price of purchase options if the lessee is reasonably certain to exercise that option, and payments of penalties for terminating the lease, less any lease incentives receivable. These payments are discounted using the Company's incremental borrowing rate when the rate implicit in the lease is not readily available.

Lease payments are allocated between the liability and finance costs. The finance cost is charged to net income (loss} over the lease term.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a change in the future lease payments arising from a change in an index or rate, if there is a change in the amount expected to be payable under a residual value guarantee or if there is a change in the assessment of whether the Company, will exercise a purchase, extension or termination option that is within the control of the Company.

3. Significant accounting policies (continued):

When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the ROU asset or is recorded in net income (loss) if the carrying amount of the ROU asset has been reduced to zero.

The ROU asset is initially measured at cost, which comprises the initial amount of the lease liability and any initial direct costs incurred less any lease payments made at or before the commencement date.

The ROU asset is depreciated, on a straight-line basis, over the shorter of the estimated useful life of the asset or the lease term. The ROU asset may be adjusted for certain remeasurements of the lease liability and impairment losses. Leases that have terms of less than twelve months or leases on which the underlying asset is of low value are recognized as an expense in net income (loss) on a straightline basis over the lease term.

A lease modification will be accounted for as a separate lease if the modification increases the scope of the lease and if the consideration for the lease increases by an amount commensurate with the stand- alone price for the increase in scope. For a modification that is not a separate lease or where the increase in consideration is not commensurate, at the effective date of the lease modification, the Company will remeasure the lease liability using the Company's incremental borrowing rate, when the rate implicit to the lease is not readily available, with a corresponding adjustment to the ROU asset. A modification that decreases the scope of the lease will be accounted for by decreasing the carrying amount of the ROU asset and recognizing a gain or loss in net income (loss) that reflects the proportionate decrease in scope.

g) Income taxes

Current and deferred income tax expense are recognized in earnings except to the extent that it relates to items recognized directly in equity. Current income taxes for current and prior periods are measured at the amount expected to be payable or recoverable from the taxation authorities based on the income tax rates enacted at the end of the period.

Deferred income tax is recognized using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities and the carrying amounts used for taxation purposes. Deferred income tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are recognized for all temporary differences' deductible to the extent future recovery is probable. The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable income will be generated to allow for all or part of the asset to be recovered. Deferred income tax balances are calculated using enacted or substantively enacted tax rates. Deferred income tax balances are adjusted to reflect changes in income tax rates that are enacted or substantively enacted with the adjustment being recognized in the period the change occurs, except items recognized in equity.

3. Significant accounting policies (continued):

h) Earnings per share

Basic per share information is calculated based on the weighted average number of common shares outstanding during the year. The diluted weighted average number of shares is adjusted for the dilutive effect of stock options, compensation options, and common share purchase warrants. Diluted per share amounts are calculated using the treasury method. The treasury method assumes that the proceeds from the exercise of stock options, compensation options, and common share purchase warrants are used to repurchase common shares at the average market price during the year. Anti-dilutive stock options and common share purchase warrants are not included in the calculation.

i) Financial instruments

Financial instruments are measured on initial recognition at fair value, plus, in the case of financial instruments other than those classified as fair value through profit or loss ("FVPL"), directly attributable transaction costs. Financial instruments are recognized when the Company becomes party to the contracts that give rise to them and are classified as amortized cost, FVPL or fair value through other comprehensive income ("FVOCI"), as appropriate. The Company considers whether a contract (other than a financial asset) contains an embedded derivative when the entity first becomes a party to it. The embedded derivatives are separated from the host contract if the host contract is not measured at fair value through profit or loss and when the economic characteristics and risks are not closely related to those of the host contract. Reassessment only occurs if there is a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required. The Company has no financial assets recorded at FVPL and at FVOCI.

Financial Assets at Amortized Cost

A financial asset is measured at amortized cost if it is held within a business model whose objective is to hold assets to collect contractual cash flows and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding and is not designated as FVPL. Financial assets classified as amortized cost are measured subsequent to initial recognition at amortized cost using the effective interest method. Cash, including accrued interest, restricted cash, and receivables, are classified as, and measured at amortized cost.

Financial Liabilities

Financial liabilities are recognized initially at fair value, net of transaction costs. After initial recognition, financial liabilities, except for subscription receipts payable, are subsequently measured at amortized cost using the effective interest method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the amortization process. Accounts payable and accrued liabilities, due to related parties, and long-term debt, including accrued interest, are classified as, and measured at amortized cost. Subscription receipts payable are classified at FVPL.

3. Significant accounting policies (continued):

Determination of Fair Values

The estimated fair value of financial assets and liabilities, by their very nature, are subject to measurement uncertainty. The following describes the grouping of financial instruments:

Level 1 - fair value measurements are those derived from quoted prices (unadjusted) in the active market for identical assets or liabilities.

Level 2 - fair value measurements are those derived from inputs other than quoted prices that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (derived from prices).

Level 3 - fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The carrying values of the Company's cash, restricted cash, receivables, accounts payable and accrued liabilities, and shareholder loan approximated their fair values due to the short-term nature of the instruments. The fair value of the subscription receipts payable approximates their carrying value due to the short-term period between their issuance and June 30, 2023. The fair value of the investment was measured using level 3 inputs.

j) Future accounting pronouncements

Emissions, carbon, and other regulations impacting climate and climate-related matters are constantly evolving. With respect to environmental, social and governance ("ESG") and climate reporting, the IASB has issued an IFRS Disclosure Standard with the aim to develop sustainability disclosure standards that are globally consistent, comparable, and reliable. In addition, the Canadian Securities Administrators have issued a proposed National Instrument 51-107 Disclosure of Climaterelated Matters. The cost to comply with these standards and others that may be developed over time has not been quantified.

The IASB announced an amendment to IAS 1 "Presentation of financial statements" re: classification of liabilities as current or non-current which is effective for annual periods beginning on or after January 1, 2024. The amendment clarifies that the classification of liabilities as current or non-current should be based on rights that are in existence at the end of the reporting period.

On May 7, 2021, the IASB announced an amendment to IAS 12 "Income Taxes" re: deferred tax assets and liabilities arising from a single transaction which is effective for annual periods beginning on or after January 1, 2023. The amendment narrows the scope of the initial recognition exemption so that is does not apply to transactions that give rise to equal and offsetting temporary differences. As a result, companies will need to recognize a deferred tax asset and a deferred tax liability for temporary differences arising on initial recognition of a lease and of a decommissioning provision.

3. Significant accounting policies (continued):

The new accounting pronouncement on income taxes is not expected to have a material impact to the Company's financial statements. The Company has not determined the impact of the revisions to IAS 1.

4. Restricted cash and subscription receipts

On June 6, 2023, the Company closed the first tranche of its brokered private placement offering (the "Offering") of subscription receipts of Resolute at a price of $0.25 per subscription receipt for aggregate gross proceeds of $4,000,200, and 16,000,800 subscription receipts received. The offering constitutes the Concurrent Financing in respect of the proposed transaction described in Note 1.

Restricted cash relates to the proceeds of the share subscription (less 50% of the Agent's fees and expenses) that are being held by an escrow agent (the "Escrow Agent") pursuant to the terms of a subscription receipt agreement among Resolute, the Agent and the Escrow Agent. The restricted cash will be released (together with the interest thereon) to the Company upon satisfaction of the following escrow release conditions:

• a) the completion, satisfaction or waiver of all conditions precedent to the Proposed Transaction in accordance with the Business Combination Agreement, other than the release of the Escrowed Funds, to the satisfaction of the Agent;
• b) the receipt of all required shareholder and regulatory approvals, including, without limitation, the conditional approval of the TSXV for the listing of the Resulting Issuer Shares on the TSXV and the Proposed Transaction;
• c) the Resulting Issuer securities issued in exchange for the Underlying Securities not being subject to any statutory or other hold period in Canada;
• d) the representations and warranties of Resolute contained in the agency agreement entered in connection with the Offering being true and accurate in all material respects, as if made on and as of the escrow release date; and
• e) Resolute and the Agent having delivered a joint notice and direction to the Escrow Agent, confirming that the conditions set forth in (A) to (D) above have been met or waived.

Subscription receipts relate to the 16,000,800 Subscription receipts received by the Company in relation to the restricted cash mentioned above, and the company's obligation to satisfy the escrow conditions and issue Resolute Units.

Costs related to this transaction, including legal fees, financing expenses, and agent's fees and compensation options are included in prepaid share issue costs. These costs will be transferred to share capital upon closing of the proposed transaction.

4. Restricted cash and subscription receipts (continued)

Immediately prior to the closing of the proposed transaction and upon the escrow conditions described being satisfied, each subscription receipt will be exchanged for one Resolute unit. Each Resolute unit consists of one Resolute common share and one-half Resolute warrant. Each full warrant will entitle the holder to purchase one Resolute common share at an exercise price equal to $0.50 until a date that is 60 months following the date of the RTO Closing. If the proposed transaction is not completed, all the outstanding subscription receipts will be cancelled, the gross proceeds of $4,000,200 will be returned to the subscription receipt holders, and the prepaid share issue costs will be expensed in the consolidated statement of loss and comprehensive loss.

The escrow conditions were satisfied, and the Proposed Transaction was completed subsequent to year end, refer to note 13 – Subsequent events.

5. Income taxes

The provision for income tax expense (recovery) in the financial statements differs from the result which would have been obtained by applying the combined federal and provincial income tax rate to the Company's loss before income taxes. The difference results from the following items:

a) Deferred income tax recovery

	Years ended June 30,
	2023	2022
Loss before income taxes	(1,061,643)	(118,043)
Canadian federal-provincial statutory tax rate	23.00%	23.00%
Computed income tax recovery	(244,178)	(27,150)
Non-deductibleexpenses	21,764	8,625
Changes in the unrecorded benefit of tax pools	222,414	18,525
Deferred income tax recovery	-	-

5. Income taxes (continued)

b) Deferred tax assets/(liabilities):

The following table summarizes the components of deferred tax assets (liabilities):

	As at June 30,
	2023	2022
Deferred tax assets
Non-capital losses	30,645	4,276
Deferred tax liabilities
PPE	(30,645)	(4,276)
Net deferred income tax assets/(liabilities)	-	-

Deferred tax assets result from temporary differences that arise due to the differences between the income tax values and the carrying amount of assets and liabilities. Deferred tax assets have not been recognized for the following deductible temporary differences as it is not probable that future taxable profit will be available against which the Company can utilize the benefits:

	2023	2022
Unrecognized temporary differences
Share issue costs& other	64,709	61,293
Non-capital losses	1,143,463	179,927
	1,208,172	241,220

As at June 30, 2023, the Company has approximately $1.3 million of non-capital losses available for deduction that begin to expire in 2039 (2022 - $197.6 thousand).

6. Long-term investments

The fair value of the Company's investment in a privately held entity was calculated using a key number of valuation techniques and unobservable inputs, which may include financial analysis of the entity's financial statements, financial disclosures, non-listed transaction prices, analysis of underlying commodity or sector prices and overall prevailing market and economic conditions.

6. Long-term investments (continued)

During the year ended June 30, 2022, the Company made an investment in a private entity, that shares a common director, for $20,000. For the year ended June 30, 2023, the Company recognized a change in the fair value of its long-term investment. It was determined that the fair value of the investment was nil and a loss of $20,058 was recognized for the year ended June 30, 2023.

7. Exploration and evaluation (E&E) assets

Years ended June 30,

	2023	2022
Balance, beginning of year	216,949	103,295
Additions	1,041,174	113,654
Balance, end of year	1,258,123	216,949

E&E assets consist of the Company's projects that have yet to be established as technically feasible and commercially viable. Additions represented Resolute's costs incurred on E&E assets during the periods. E&E assets are comprised of land acquisition, seismic and geological data costs.

E&E assets are tested for impairment when internal or external indicators of impairment exist as well as upon their eventual reclassification to oil interests in PP&E. On June 30, 2023, the Company conducted an assessment of indicators of impairment for the Company's E&E assets. In performing the assessment, management determined there were no indicators of impairment.

For the year ending June 30, 2022, $50,000 of the E&E additions were acquired through the issuance of 500,000 common shares to an Officer of the Company at $0.10 per share. The fair value of the transaction was determined indirectly using the fair value of the common shares issued which was determined using the most recent cash issuance share price of $0.10 per share.

8. Shareholder Loan

The amounts owing to a shareholder were due on demand, unsecured and non-interest bearing. The amount was fully repaid on May 18, 2022.

9. Share capital

a) Authorized

Unlimited number of Class A common shares, voting Unlimited number of Class B common shares, voting Unlimited number of Class C common shares, non-voting Unlimited number of Class D common shares, non-voting Unlimited number of Class E common shares, non-voting Unlimited number of Class F common shares, rights to be determined Unlimited number of Class G common shares, rights to be determined

b) Issued

Class A common shares	2023		2022
	Number of	Amount	Number of	Amount
	shares	$	shares	$
Balance, beginning of year	41,893,200	2,750,827	17,129,400	391,064
Exercise of stock options	25,000	5,721	-	-
Issuance of shares	150,000	22,500	24,763,800	2,421,380
Share issue costs	-	-	-	(61,617)
Balance, end of year	42,068,200	2,779,048	41,893,200	2,750,827

On August 25, 2021, the Company issued 980,000 Class A Common shares at $0.05 per share for gross proceeds of $49,000.

On October 18, 2021, the Company issued 120,000 Class A shares at an issue price of $0.05 per share in exchange for services rendered to an officer of the Company. The $6,000 amount is recorded in general and administration expense.

On January 7, 2022, the Company issued 8,100,000 Class A Common shares at $0.10 per share for gross proceeds of $810,000. In association with the raise, 375,000 warrants were issued (see note 9(c)). Each warrant can be exchanged for one Class A Common share for $0.10. The warrants expire in January 2025.

9. Share capital (continued):

On February 2, 2022, the Company issued 12,550,000 Class A common shares at $0.10 per share for gross proceeds of $1,255,000. In association with that raise 250,000 warrants were issued (see note 9(c)). Each warrant can be exchanged for one Class A Common share for $0.10. These warrants expire in February 2025.

On March 9, 2022, the Company issued 2,513,800 Class A Common shares at $0.10 per share for gross proceeds of $251,380.

On April 29, 2022, the Company issued 500,000 Class A Common shares at $0.10 per share to an Officer in exchange for the acquisition of geologic data.

On July 18, 2022, the Company issued 80,000 Class A common shares at an issue price of $0.15 per share to settle a June 30, 2022, accounts payable balance of $12,000.

On November 9, 2022, the Company issued 70,000 Class A common shares at an issue price of $0.15 per share in exchange for services rendered to an officer of the Company. The $10,500 amount is recorded in general and administrative expenses.

On March 21, 2023, the Company issued 25,000 common shares for gross proceeds of $2,500 related to the exercise of stock options. Contributed surplus related to the exercise of the stock options of $3,221 was reclassed to share capital.

c) Common share purchase warrants ("Warrants")

The Company has issued Warrants as finders fees in conjunction with the common share issuances. The warrants were recorded as share issuance costs as at and for the year ended June 30, 2022. The following table summarizes Warrants issued, exercised, and expired:

	Number	Exercise Price ($)
Outstanding, June 30,2021	-	-
Issued	625,000	0.10
Outstanding,June 30, 2022,and 2023	625,000	0.10

The warrants expire in 2025.

9. Share capital (continued):

The fair value of the common share purchase warrants is estimated as at the grant date using the Black-Scholes option pricing model, with the following assumption ranges used for stock options issued:

Assumptions range:	2022
Risk free interest rate (%)	1.44 -1.72
Expected life (years)	3
Current stock price ($)	0.10
Exercise price ($)	0.10
Expected volatility (%)	75
Fair value ($)	0.05

The fair value of the share purchase warrants issued during the years ended June 30, 2022, was $31,250.

d) Compensation Options

In connection with the private placement offering (see note 4), the Company issued compensation options and advisory compensation options (collectively called "Compensation Options") to the agents. The following table summarizes Compensation Options issued, exercised, and expired:

	Number	Exercise Price ($)
Outstanding, June 30, 2021,and 2022	-	-
Issued	694,032	0.25
Outstanding,June 30, 2023	694,032	0.25

Each Compensation Option entitles the holder thereof to acquire one Resolute Unit, as defined in note 4, at an exercise price equal to $0.25 for a period of 24 months following the date the Escrow Release Conditions are satisfied.

9. Share capital (continued):

The fair value of the Compensation Options is estimated as at the grant date using the Black-Scholes option pricing model, with the following assumption ranges used for stock options issued:

Assumptions range:	2023
Risk free interest rate (%)	4.33
Expected life (years)	2
Current stock price ($)	0.25
Exercise price ($)	0.25
Expected volatility (%)	75
Fair value ($)	0.11

The fair value of the Compensation Options issued during the year ended June 30, 2023, was $76,344. The amount has been recorded in prepaid share issue costs in the statement of financial position.

e) Stock options

During the year ending June 30, 2022, the Company adopted a stock option plan for directors, employees, and service providers. Under the plan, options may be granted to purchase up to 10% of the outstanding shares of Resolute and the maximum term of options granted is five years. The Board of Directors determines the vesting schedule at the time of grant. As at June 30, 2023, the company may grant up to 4,206,820 (2022 – 4,189,320).

The following tables summarize stock options issued and outstanding:

	Number	Exercise price
		$
Outstanding, June 30, 2021	-	-
Issued	3,600,000	0.10
Outstanding, June 30, 2022	3,600,000	0.10
Forfeit	(75,000)	0.10
Exercised	(25,000)	0.10
Outstanding, June 30, 2023	3,500,000	0.10

9. Share capital (continued):

	Average
	remaining	Number
Exercise price	term (years)	outstanding
$0.10	3.7	3,500,000
Outstanding, June 30, 2023	3.7	3,500,000

The fair value of stock options is estimated as at the grant date using the Black-Scholes option pricing model, with the following assumption ranges used for stock options issued:

Assumptions range:	2022
Risk free interest rate (%)	1.44
Expected life (years)	5
Current stock price ($)	0.10
Exercise price ($)	0.10
Expected volatility (%)	75
Fair value ($)	0.06

Stock based compensation related to stock options was $94,053 for the year ended June 30, 2023 (June 30, 2022 - $37,500).

f) Per share amounts

For the years ended June 30, 2023, and 2022, stock options, compensation options, and common share purchase warrants were excluded from the computation of diluted per share amounts as the Company was in a net loss position for each of those periods.

The loss per common share was determined as follows:

	Years Ended June 30
	2023	2022
Net loss	981,643	118,043
Weighted average shares outstanding
Basic and diluted	42,021,118	27,936,642
Net loss per share – basic and diluted	$ (0.02)	$ -

10. Related Parties

The counterparty for the Proposed Transaction, as described in note 1, is a related party as Crossover and the Company share a common director.

For the year ending June 30, 2022, $50,000 of the E&E additions were acquired through the issuance of 500,000 common shares to an Officer of the Company at $0.10 per share. The fair value of the transaction was determined indirectly using the fair value of the common shares issued which was determined using the most recent cash issuance share price of $0.10 per share.

Key management personnel compensation

Key management personnel are those persons having authority and responsibility for planning, directing, and controlling the activities of the Company. The key management personnel compensation before capitalization is comprised of the following:

	2023	2022
Salaries and benefits	237,694	18,000
Stock-based compensation	86,588	34,375
Total	324,282	52,375

$22,500 of salaries and benefits were settled in shares of Resolute (2022 - $6,000) (see note 9).

On January 30, 2023, the Company signed an incentive agreement with an officer of the company that pays out an incentive payment based on a percent of gross revenue earned for the first 1.5 million barrels of oil recovered from the Alberta (GFD) project. The incentive payment % is dependent on the cumulative oil production for the first twelve months and ranges from 0.5% to 1.5% of gross revenue. This agreement was amended on June 30, 2023. The estimated fair value of the incentive agreement is $20,000, of which $8,333 is included in salaries and benefits above.

11. Financial Risk Management

The Company's activities expose it to a variety of financial risks such as credit risk, liquidity risk and market risk that arise as a result of its exploration and financing activities. This note presents information about the Company's exposure to each of the above risks, the Company's objectives,

11. Financial Risk Management (Continued)

policies and processes for measuring and managing risk and the Company's management of capital. Further quantitative disclosures are included throughout these financial statements.

The Board of Directors oversees management's establishment and execution of the Company's risk management framework. Management has implemented and monitors compliance with risk management policies. The Company's risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and market conditions.

Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The carrying amount of the Company's cash, represents the maximum credit exposure.

The Company is currently in the exploration stage and has not commenced sales of product. As a result, the Company does not anticipate any significant credit risk until it enters production and sales stages.

Liquidity Risk

Liquidity risk relates to the risk that the Company will encounter difficulty in meeting its obligations associated with financial liabilities that are settled by cash as they become due. The Company's approach to managing liquidity risk is to ensure, as much as possible, that it has sufficient liquidity to meet its short-term and long-term financial obligations when due, under both normal and unusual conditions without incurring acceptable losses or risking harm to the Company's reputation.

At June 30, 2023, the Company had working capital totaling $499,701, incurred a net loss of $1,061,643 and had cash used in operations of $760,930. All liabilities of the Company are current.

The Company is in the exploration stage and consequently requires additional capital to develop its property (see note 13). Budgets and forecasts are subject to significant judgement and estimates relating to activity levels, future cash flows and the timing thereof and other factors which may or may not be within the control of the Company.

11. Financial Risk Management (Continued)

Interest Rate Risk

Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. The Company has no material exposure to interest rate risk.

Market risk

Market risk is the risk that changes in market prices, such as commodity prices for crude oil and natural gas as well as costs of electricity consumption, foreign exchange rates and interest rates will affect the Company's valuation of financial instruments, the debt levels of the Company, as well as its income and cash flow from operations. The objective of market risk management is to manage and

control market risk exposures within acceptable parameters, while maximizing the Company's returns. All such transactions are conducted in accordance with the Company's risk management policy that has been approved by the Board of Directors.

Capital Management

The Company's policy is to have a capital structure that maintains financial flexibility and sustains the future development of the business. The Company manages its capital structure and adjusts relative to changes in economic conditions and the Company's risk profile. To maintain the capital structure, the Company may from time-to-time issue shares and adjust its capital spending to manage current and projected liabilities. The Company considers its capital structure to include working capital and equity.

12. Commitments

On May 23, 2023, the Company signed a one-year lease agreement for office space, beginning July 1, 2023, with total annual rental payments for the committed period of $16,500.

The Company has also signed a licensing agreement for mapping and analytics software for a two-year period from April 2023 to April 2025. The commitment is approximately $55,000 per year.

13. Subsequent events

On July 10, 2023, the Company closed its second and final tranche of its brokered private placement Offering of subscription receipts of Resolute at a price of $0.25 per subscription receipt for aggregate gross proceeds of $510,000, and 2,040,000 subscription receipts received.

In connection with the closing of the second tranche of the Offering, the Agent is entitled to an aggregate cash fee in the amount of $2,000 (the "Agent's Fee") and an advisory fee in the amount of $18,000 (the "Agent's Advisory Fee"). On closing of the Offering, the Agent received 50% of the Agent's Fee and 50% of the Agent's Advisory Fee, with the balance forming part of the Escrowed Funds. In addition, Resolute issued to the Agent 81,000 compensation options. The terms of the compensation options are identical to those described in note 9.

On August 23, 2023, the Company completed the proposed transaction, which has resulted in the reverse take-over of Crossover by the former shareholders of Resolute. The proposed transaction was completed by way of a three-cornered amalgamation pursuant to a Business Combination Agreement dated March 21, 2023, between the Crossover and Resolute whereby, among other things, Resolute amalgamated with 2518663 Alberta Ltd., a wholly owned subsidiary of Crossover, to form a newly amalgamated corporation that is a wholly owned subsidiary of the Crossover. Prior to completion of the proposed transaction, Crossover changed its name from "Crossover Acquisitions Inc." to "Resolute Resources Ltd.". The newly formed entity will carry on the business of Resolute. An RTO involving a non-public operating entity, in this case Resolute, and a non-operating public entity, in this case Crossover, does not meet the definition of a business, as defined in IFRS 3, Business Combinations. The transaction is equivalent to the issuance of shares by Resolute for the net assets of Crossover.

Immediately prior to the closing of the proposed transaction, each subscription receipt was exchanged for one Class A share of Resolute and one-half of one common share purchase warrant of Resolute.

Upon closing, the restricted cash was released to Resolute, the prepaid share issue costs were reclassified to share capital, and the subscription receipt liability was reclassified to share capital.

Upon completion of the proposed transaction there were 68,359,000 common shares issued and outstanding. Resolute shares commence trading on the TSXV under the ticker symbol "RRL" on August 30, 2023.