Roxmore Resources Inc. — Management Reports 2023

Nov 29, 2023

AXCAP VENTURES INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(EXPRESSED IN CANADIAN DOLLARS) (UNAUDITED)

AXCAP VENTURES INC. FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023

GENERAL

This Management’s Discussion and Analysis of Axcap Ventures Inc. (“Axcap” or the “Company”) (“MD&A”) is dated November 28, 2023, provides analysis of the Company’s financial results for the three and nine months ended September 30, 2023 compared to the three and nine months ended September 30, 2022. The following information should be read in conjunction with the condensed interim financial statements for the three and nine months ended September 30, 2023 and 2022 with accompanying notes and the audited financial statements and related notes for the years ended December 31, 2022 and 2021, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”). All dollar figures are expressed in Canadian dollars unless otherwise stated.

COMPANY OVERVIEW

Axcap Ventures Inc. was incorporated on February 20, 1987 under the Business Corporation Act (Ontario). On August 31, 2018, the Company filed a Certificate of Continuance in the Province of British Columbia and adopted Articles of Continuance as a BC company under the Business Corporations Act of British Columbia (the “BCBCA”). These consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business rather than through a process of forced liquidation.

Axcap Ventures is a public company which is listed on the Canadian Securities Exchange (“CSE”) under the new symbol “AXCP”. The trading of the Company’s common shares have been halted but are expected to trade under the new symbol once trading commences following completion of the Company’s change of business to an investment issuer. The Company's head office is 1030 West Georgia Street, Suite 1507, Vancouver, BC, V6E 2Y3, and registered and records office is located 1055 W. Georgia Street, Suite 1500, PO Box 11117, Vancouver, BC, V6E 4N7.

On August 17, 2020, the Company announced that it will be pursuing a change of business from an industrial issuer to an investment company under the rules and policies of the Canadian Securities Exchange (“CSE”). The Company has adopted an investment policy to outline the nature, scope and character of the investments that the Company will undertake. On April 20, 2022, the Company officially changed its name to Axcap Ventures Inc. The Company will focus on investing in various industries, including life sciences, mining and exploration, industrial, and technology.

The Company has made several investments in compliance with the investment policy adopted, including: Havn Life Sciences, a public health science company (in the psychedelic field), Freeman Gold Corp., a public natural resource exploration issuer, Newt Corporation, a private financial technology company and Alpha Esports Tech Inc., a public technology company (in the esports field).

The change of business disclosed herein is subject to the approval of the CSE and the requirements of Policy 8 (Fundamental Changes) of the CSE policies.

In February 2022, the Company closed the first tranche of its non-brokered private placement comprising of 15,654,825 Units of the Company at $0.11 per Unit for gross proceeds of $1,722,031. Each Unit consisted of one common share and one transferable common share purchase warrant. Each warrant is exercisable into one additional share at an exercise price of $0.115 per warrant on or before February 7, 2027.

In connection with the first tranche of the financing, the Company paid aggregate cash finder’s fees totaling $172,203 and issued 1,565,582 finder’s warrants to certain qualified arm’s length finders. Each finder’s warrant is exercisable into one share at an exercise price of $0.115 per finder’s warrant on or before February 7, 2027.

In March 2022, the Company closed the second tranche of its non-brokered private placement comprising of 1,181,661 Units of the Company at $0.11 per Unit for gross proceeds of $129,983. Each Unit consisted of one common share and one transferable common share purchase warrant. Each warrant is exercisable into one additional share at an exercise price of $0.115 per warrant on or before March 31, 2027.

In connection with the second tranche of the financing, the Company issued 118,166 finders’ units and 118,166 finder’s warrants to certain qualified arm’s length finders. Each finder’s unit consists of one share and one finder’s unit warrant. Each finder’s warrant and finder’s unit warrant is exercisable into one finder’s warrant share at an exercise price of $0.115 per finder’s warrant share on or before March 31, 2027.

The proceeds of the private placement are for satisfaction of listing requirements and for investments that the Company will be making in the future.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

AXCAP VENTURES INC. FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023

SELECTED ANNUAL INFORMATION

The following sets out selected financial information from the Company’s most recently completed financial period and are derived from, and should be read together with the Company’s annual financial statements.

	Year Ended
	December 31, 2022 December 31, 2021 December 31, 2020 $ $ $
Current Assets Current Liabilities	1,038,701 833,812 164,729 240,893 451,578 620,769
Total Assets Total Liabilities	2,712,870 2,171,822 3,091,962 240,893 451,578 620,769
Expenses	327,194 894,219 1,291,901
Net Income (Loss)	(901,201) (750,949) 650,004
Earnings(Loss) per Share	(0.05) (0.15) 0.13

SUMMARY OF QUARTERLY RESULTS

Key financial information for the quarter ended and the year ended December 31, 2022 is summarized as follows, reported in Canadian dollars except for per share amounts:

	Three Months Ended September 30, 2023 September 30, 2022 ($) ($)	Nine Months Ended
		September 30,2023 September 30, 2022 ($) ($)
Operating expenses Othergains(losses)	(34,217) (40,632) (1,570,623) 139,385	(173,215) (256,786) (1,348,881) (547,514)
Net income(loss)	(1,604,840) 98,753	(1,522,096) (804,300)

	September 30, 2023	December 31, 2022
	($)	($)
Current assets	241,368	1,038,701
Current liabilities	230,306	240,893
Total assets	1,180,187	2,712,870
Total Liabilities	230,306	240,893

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2023

Operating expenses

Expenses for the three months ended September 30, 2023 were $34,217, compared to $40,632 incurred the same period in the prior year. The significant differences in expenditures were as follows:

• Consulting fees: $7,875 compared to $nil during the same period in 2022; the Company engaged consultants to assist with financial advisory;

• Office and administrative fees: $9,303 compared to $2,677 during the same period in 2022; the Company incurred higher fees in 2023 due to higher management fees paid in 2023;

• Professional fees: $7,600 compared to $2,200 during the same period in the prior year; the Company incurred higher audit fees in 2023.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

AXCAP VENTURES INC. FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023

Operating expenses

Expenses for the nine months ended September 30, 2023 were $173,215, compared to $256,786 incurred the same period in the prior year. The significant differences in expenditures were as follows:

• Consulting fees: $40,405 compared to $nil during the same period in 2022; the Company engaged consultants to assist with financial advisory.

• Office and administrative fees: $19,603 compared to $128,511 during the same period in 2022; the Company incurred more in 2022 due to higher management fees.

• Professional fees: $74,590 compared to $47,860 during the same period in the prior year; the Company incurred minimal legal and accounting fees in both 2023 and 2022.

CAPITAL STRUCTURE

As of the date of this MD&A, the Company has 21,811,241 common shares issued and outstanding. In addition, there are outstanding warrants for a further 18,638,400 common shares, respectively.

The details of warrants outstanding are as follows:

Date Issued	Expiry Date	Exercise Price	Number of Warrants Outstanding
February 7, 2022	February, 7, 2027	$0.115	17,220,407
March31,2022	March31,2027	$0.115	1,417,993
			18,638,400

CAPITAL RESOURCES

The Company defines capital as consisting of shareholder’s equity and due to a related party. The Company manages its capital structure to maximize its financial flexibility making adjustments to it in response to changes in economic conditions and the risk characteristics of the underlying assets and business opportunities. The Company does not presently utilize any quantitative measures to monitor its capital, but rather relies on the expertise of the Company’s management to sustain the future development of the business. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.

As at September 30, 2023 and December 31, 2022, the Company is not subject to any externally imposed capital requirements or debt covenants. There was no change to the Company’s approach to capital management during the nine months ended September 30, 2023 and the year ended December 31, 2022.

LIQUIDITY

The Company’s objective in managing liquidity risk is to maintain sufficient liquidity in order to meet operational and investing requirements. The Company has historically financed its operations primarily through the sale of share capital by way of private placements.

At September 30, 2023, the Company had cash of $241,368 (December 31, 2022 - $208,264) and working capital of $11,062 (December 31, 2022 – $797,808). The change in working capital at September 30, 2023 and December 31, 2022 was significant as the Company received $720,000 in other receivables and disposed some of its investments during the nine months ended September 30, 2023 generating a loss, while the Company acquired more equity investments in 2022.

Cash provided by operating activities was $525,067 during the nine months ended September 30, 2023, compared to $467,741 used in operating activities during same period in the prior year. The change in operating cash flows in 2023 is attributed primarily to a collection from a receivable in 2023.

Cash used in investing activities was $491,963 during the nine months ended September 30, 2023, compared to $799,601 during the same period in the prior year. The change in investing cash flows is attributed primarily to the sales of the Company’s marketable securities which generated cash for the Company and the purchase of marketable securities which used up cash of the Company.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

AXCAP VENTURES INC. FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023

Cash provided by financing activities was $nil during the nine months ended September 30, 2023, compared to $1,679,819 during the same period in the prior year. The change in financing cash flows is attributed to the financing the Company raised during 2022.

The continued operation of the Company in the future may depend on the Company’s ability to obtain additional financings. In the past years, the Company has relied on shareholder loans and cash generated from operations to meet its cash requirements. Future developments, in excess of funds on hand, will depend on the Company’s ability to obtain financing through equity financing, debt financing or other means. There can be no assurances that the Company will be successful in obtaining any such financing; failure to obtain such additional financing could have a material adverse effect on the Company’s operations.

RELATED PARTY TRANSACTIONS

Key Management Personnel Compensation

Key management personnel include the Company’s Board of Directors and members of senior management. The Company’s related parties include key management personnel, and companies related by way of management and directors in common, such as:

• a. Lannister Mining – an investee of the Company whereby the CFO of Lannister Mining was the former CFO of the Company, and the interim CEO of Lannister Mining is a director of the Company.

• b. Purpose ESG – an investee of the Company whereby the CFO of Purpose ESG was the former CFO of the Company.

During the three and nine months ended September 30, 2023 and 2022, the Company paid and/or accrued salaries, commissions, consulting and professional fees to management personnel and directors:

	Three Months Ended September 30, 2023 September 30, 2022	Nine Months Ended
		September 30, 2023 September 30, 2022
Management (current and former) $ Directors (current and former)	7,500 $ 2,625 $ - 2,200	17,371 $ 84,000 - 14,820
$	7,500 $ 4,825 $	17,371 $ 98,820

During the three and nine months ended September 30, 2023, the Company incurred legal expenses of $nil and $nil (September 30, 2022 - $nil and $nil) respectively, to a law firm, a partner of which is a director of the Company.

Due to Related Parties

As at September 30, 2023 and December 31, 2022, the Company has the following amounts due to related parties:

		September	**30, **	2023		December	31, 2022
Accounts payable and accruedliabilities	$			-	$		88,832

The amounts due to related parties are unsecured, non-interest bearing and due on demand.

OFF BALANCE SHEET ARRANGEMENTS

The Company currently has no off-balance sheet arrangements.

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Financial assets and liabilities are classified in the fair value hierarchy according to the lowest level of input that is significant to the fair value measurement. Assessment of the significance of a particular input to the fair value measurement requires judgement and may affect placement within the fair value hierarchy levels.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

AXCAP VENTURES INC. FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023

The hierarchy is as follows:

• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

• Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

• Level 3 fair value measurements are those derived from inputs that are unobservable inputs for the asset or liability.

The Company’s cash and marketable securities are measured at fair value. The Company considers that the carrying amount of its trade and other payables recognized at amortized cost in the financial statements approximates their fair value due to the demand nature of these instruments.

Fair value estimates of financial instruments are made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair values.

Financial Risk Factors

The Company’s risk exposure and the impact on the Company’s financial instruments are summarized below:

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. Credit risk arises from cash held with banks, cash on deposit with fiat to cryptocurrency exchanges and from outstanding trade receivables. The Company minimizes credit risk associated with its cash balance substantially by dealing with financial institutions deemed to be reliable due to their history of operations. The Company assessed its credit risk to be low.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company currently settles its financial obligations with cash. The ability to do this relies on the Company raising equity financing in a timely manner and by maintaining sufficient cash in excess of anticipated needs. The Company is exposed to liquidity risk, but has assessed liquidity risk to be low.

Foreign Currency Risk

Currency risk is the risk that the value of financial assets and liabilities denominated in currencies, other than the functional currency of the Company, will fluctuate due to changes in foreign currency exchange rates. The Company does not use derivative instruments to reduce its exposure to foreign currency risk. The Company previously was exposed to foreign currency risk through cash in banks and cash on deposit with fiat to cryptocurrency exchanges which are denominated in United States dollars (USD).

Price Risk

The Company’s net income or loss, and financial condition were subject to price risk due to fluctuations of the following:

Equity Price Risk

The Company is exposed to equity price risk through its equity investments and unfavourable market conditions could result in dispositions of marketable securities at less than favourable prices, especially during periods of overall market instability. The Company manages its equity price risk by having a portfolio of equity investments not singularly exposed to any one issuer.

BUSINESS RISKS AND UNCERTAINTIES

Additional information on risks and uncertainties relating to the Company’s business is provided in GAR’s Listing Statement dated February 28, 2018, under the heading “Risk Factors”.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

AXCAP VENTURES INC. FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023

CONTRACTUAL OBLIGATIONS

The Company presently has no contractual obligations pursuant to which the Company has any payments owing in the next five years.

CRITICAL ACCOUNTING ESTIMATES

The preparation of the Company’s financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date of the financial statements and reported amounts of income and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes may differ significantly from these estimates.

The following discusses the most significant accounting judgements, estimates and assumptions that the Company has made in the preparation of its financial statements.

Areas of judgment:

• Going concern

Determining if the Company has the ability to continue as a going concern is dependent on its ability to achieve profitable operations. Certain judgments are made when determining if the Company will be able to continue as a going concern.



Deferred tax assets

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probably that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Management applies judgment in determining the likelihood of future taxable profits.



Determination of fair values

Certain of the Company’s assets and liabilities are measured at fair value. In estimating fair value, the Company uses market-observable data to the extent it is available. In certain cases where Level 1 inputs are not available the Company estimates the fair value based on the criteria described under Note 4(viii) in the financial statements for the year ended December 31, 2022. Significant judgement is required for the Company’s investment in non-public companies using Level 2 and Leve 3 inputs.

 Tax assets and liabilities

Provisions for income taxes are made using the best estimate of the amount expected to be paid or recovered based on a qualitative assessment of all relevant factors. The Company reviews the adequacy of these provisions at the end of each reporting period. However, it is possible that at some future date an additional liability could result from audits by tax authorities. Where the final outcome of these tax-related matters is different from the amounts that were initially recorded, such differences will affect the tax provisions in the period in which such determination is made. Deferred tax assets and liabilities contain estimates about the nature and timing of future permanent and temporary differences as well as the future tax rates that will apply to those differences. Changes in tax laws and rate as well as changes to the expected timing of reversals may have a significant impact on the amounts recorded for deferred tax assets and liabilities. Management closely monitors current and potential changes to tax law and bases its estimates on the best available information at each reporting date.

 Share-based payments

The Company utilizes the Black-Scholes Option Pricing Model (“Black-Scholes”) to estimate the fair value of stock options granted to directors, officers and consultants. The use of Black-Scholes requires management to make various estimates and assumptions that impact the value assigned to the stock options including the forecast future volatility of the stock price, the risk-free interest rate, dividend yield and the expected life of the stock options. Any changes in these assumptions could have a material impact on the share-based compensation calculation value, however, the most significant estimate is the volatility.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

AXCAP VENTURES INC. FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023

SIGNIFICANT ACCOUNTING POLICIES

The Company’s significant accounting policies are summarized in Note 4 to the audited financial statements for the years ended December 31, 2022 and 2021.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This MD&A contains certain statements that may be deemed “forward-looking statements”, including statements regarding developments in the Company’s operations in future periods, adequacy of financial resources and future plans and objectives of the Company. All statements in this document, other than statements of historical fact, which address events or developments that the Company expects to occur, are forward looking statements. Forwardlooking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects”, “plans”, “anticipates”, “believes”, “intends”, “estimates”, “projects”, “potential”, “interprets” and similar expressions, or events or conditions that “will”, “would”, “may”, “could” or “should” occur. Forward-looking statements in this document include statements regarding future expenditures on research and development and operating expenses, liquidity and effects of accounting policy changes.

Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward-looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include market prices, exploration success, continued availability of capital and financing, inability to obtain required regulatory or governmental approvals and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. Readers are cautioned not to place undue reliance on this forward-looking information.

Forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made. The Company undertakes no obligation to update these forward-looking statements in the event that Management’s beliefs, estimates, opinions or other factors should change except as required by law.

These statements are based on a number of assumptions including, among others, assumptions regarding general business and economic conditions, the timing of the receipt of regulatory and governmental approvals for the transactions described herein, the ability of the Company and other relevant parties to satisfy stock exchange and other regulatory requirements in a timely manner, the availability of financing for the Company’s proposed transactions and on reasonable terms and the ability of third-party service providers to deliver services in a timely manner. The foregoing list of assumptions is not exhaustive. Events or circumstances could cause results to differ materially.

There can be no assurance that such information will prove to be accurate, and readers are cautioned not to place undue reliance on this forward-looking information.

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MANAGEMENT’S DISCUSSION AND ANALYSIS