Rumble Resources Incorporated — Interim / Quarterly Report 2024

Dec 20, 2023

RUMBLE RESOURCES INC.

Interim Financial Statements

For the Three Months Ended October 31, 2023

(Expressed in Canadian Dollars)

(Unaudited)

The accompanying unaudited interim financial statements have been prepared by Management of Rumble Resources Inc. and have not been reviewed by the Company’s auditors.

RUMBLE RESOURCES INC. Interim Statements of Financial Position (Expressed in Canadian Dollars) (Unaudited)

	October 31,	July 31,
	2023	2023
	$	$
ASSETS
Current assets
Cash	132,145	98,137
Taxes recoverable	10,182	4,357
Prepaid expenses	–	30,000
Total current assets	142,327	132,494
Exploration and evaluation assets (Note 3)	100,000	100,000
Total assets	242,327	232,494
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities	51,771	50,495
Due to related party (Note 4)	10,839	14,725
Note payable to related party (Note 4)	–	5,000
Total liabilities	62,610	70,220
Shareholders’ equity
Share capital (Note 5)	474,184	363,610
Equity reserve (Note 6)	90,460	76,651
Deficit	(384,927)	(277,987)
Total shareholders’equity	179,717	162,274
Total liabilities and shareholders’ equity	242,327	232,494

Nature of operations and continuance of business (Note 1)

Approved and authorized for issuance on behalf of the Board of Directors on December 19, 2023:

/s/ “Brian Goss” /s/ “Erwin Wong” Brian Goss, Director Erwin Wong, Director

(The accompanying notes are an integral part of these unaudited interim financial statements)

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RUMBLE RESOURCES INC. Interim Statements of Comprehensive Loss (Expressed in Canadian Dollars) (Unaudited)

	For the three	For the three
	months ended	months ended
	October 31,	October 31,
	2023	2022
	$	$
Expenses
Professional fees	21,209	2,000
Consulting fees (Note 4)	7,500	4,500
General and administrative	4,261	1,523
Share-based compensation (Note 4 and 6)	818	7,014
Transfer agent and filing fees	7,140	476
Listing expense (Note 5)	66,012	–
Total expenses	106,940	15,513
Net loss and comprehensive loss for theperiod	(106,940)	(15,513)
Lossper share,basic and diluted	(0.01)	(0.01)
Weighted average shares outstanding,basic and diluted	8,252,000	2,000,000

(The accompanying notes are an integral part of these unaudited interim financial statements)

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RUMBLE RESOURCES INC.

Interim Statements of Changes in Equity (Expressed in Canadian Dollars) (Unaudited)

	Share capital	Equity Special reserve $ warrants $ Deficit $	Total shareholders’ equity $
	Number of shares Amount $
Balance, July 31, 2022 Share-based compensation Net loss for the period	2,000,000 100,000 – – – –	61,307 251,450 (199,428) 7,014 – – – – (15,513)	213,329 7,014 (15,513)
Balance,October 31,2022	2,000,000 100,000	68,321 251,450 (214,941)	204,830
Balance, July 31, 2023 Common shares issued for cash Share issuance costs Share-based compensation Net loss for the period	7,202,000 363,610 1,725,000 172,500 – (61,926) – – – –	76,651 – (277,987) – – – 12,991 – – 818 – – – – (106,940)	162,274 172,500 (48,935) 818 (106,940)
Balance,October 31,2023	8,927,000 474,184	90,460 – (384,927)	179,717

(The accompanying notes are an integral part of these unaudited interim financial statements)

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RUMBLE RESOURCES INC. Interim Statements of Cash Flows (Expressed in Canadian Dollars) (Unaudited)

	For the	For the
	three months	three months
	ended	ended
	October 31,	October 31,
	2023	2022
	$	$
Operating activities
Net loss for the period	(106,940)	(15,513)
Items not involving cash:
Share-based compensation	818	7,014
Changes in non-cash operating working capital:
Accounts payable and accrued liabilities	1,276	(13,930)
Taxes recoverable	(5,825)	(240)
Prepaid expenses	30,000	176
Due to related party	(3,886)	4,043
Net cash used in operating activities	(84,557)	(18,450)
Financing activities
Proceeds from issuance of common shares, net	123,565	–
Repayment of note payable to related party	(5,000)	–
Net cash provided by financing activities	118,565	–
Change in cash	34,008	(18,450)
Cash, beginning of period	98,137	204,525
Cash,end ofperiod	132,145	186,075
Supplemental disclosures:
Interest paid	–	–
Income taxespaid	–	–
Non-cash financing activities
Fair value of agent's warrants	12,991	–

(The accompanying notes are an integral part of these unaudited interim financial statements)

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RUMBLE RESOURCES INC. Notes to the Interim Financial Statements October 31, 2023 (Expressed in Canadian Dollars) (Unaudited)

1. Nature of Operations and Continuance of Business

Rumble Resources Inc. (formerly Rumble Capital Corp.) (the “Company”), was incorporated under the laws of British Columbia, Canada on June 23, 2017, and on December 14, 2020, the name was changed to Rumble Resources Inc. The Company’s principal business plan is to acquire, explore and develop mineral properties and ultimately seek earnings by exploiting mineral claims. On September 5, 2023, the Company’s shares became listed and commenced trading on the Canadian Securities Exchange (“CSE”) under the symbol “RB”. The Company’s registered office is 741 Harbourfront Drive N.E., Salmon Arm, BC, V1E 3L4.

These interim financial statements have been prepared on a going concern basis which assumes that the Company will realize the carrying value of its assets and discharge its liabilities in the normal course of business. As at October 31, 2023, the Company has not generated any revenue and has accumulated losses of $384,927 since inception. The Company’s continuation as a going concern is dependent upon the successful results from its mineral property exploration activities and its ability to attain profitable operations and generate funds therefrom and/or raise equity capital or borrowings sufficient to meet current and future obligations. There is no guarantee that the Company will be able to complete any of the above objectives. These factors indicate the existence of a material uncertainty that may cast significant doubt on the Company’s ability to continue as a going concern. While the Company has been successful in securing financings in the past, there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be available on acceptable terms. These interim financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Such adjustments could be material.

2. Summary of Significant Accounting Policies

• (a) Statement of Compliance and Basis of Presentation

These interim financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting . The interim financial statements should be read in conjunction with the annual financial statements for the year ended July 31, 2023, which have been prepared in accordance with IFRS as issued by IASB. The Company uses the same accounting policies and methods of computation as in the annual financial statements for the year ended July 31, 2023.

These interim financial statements have been prepared on a historical cost basis, and are presented in Canadian dollars, which is the Company’s functional currency.

(b) Use of Estimates and Judgments

The preparation of these interim financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, revenues and expenses. By their nature, estimates are subject to measurement uncertainty and changes in such estimates in future periods could require a material change in the interim financial statements. Accordingly, actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected.

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RUMBLE RESOURCES INC. Notes to the Interim Financial Statements October 31, 2023 (Expressed in Canadian Dollars) (Unaudited)

2. Summary of Significant Accounting Policies (continued)

• (b) Use of Estimates and Judgments (continued)

Significant areas requiring the use of estimates include the recoverability of exploration and evaluation assets, and unrecognized deferred income tax assets. Actual results could differ from those estimates.

Judgments made by management include the factors used to determine the assessment of whether the going concern assumption is appropriate. The assessment of the going concern assumption requires management to take into account all available information about the future, which is at least, but is not limited to, 12 months from the end of the reporting period. The Company is aware that material uncertainties related to events or conditions may cast significant doubt upon the Company’s ability to continue as a going concern.

• (c) Recently Adopted Accounting Standards

Accounting standards or amendments to existing accounting standards that have been issued but have future effective dates are either not applicable or are not expected to have a significant impact on the Company’s interim financial statements.

3. Exploration and Evaluation Assets

Mineral property acquisition costs:

						Woolford Creek
						Property
						$
Balance,July	31,	2023	and October	31,	2023	100,000

Woolford Creek Property

On October 15, 2020, as amended on May 20, 2021, April 1, 2022, July 13, 2022, and September 20, 2022, and March 31, 2023, the Company entered into a Mineral Property Option Agreement (the “Agreement”), whereby the Company was granted an option to acquire a 100% interest in 8 mining claims located in the Adams Lake area of the Kamloops Mining Division, BC (the “Woolford Creek Property”). Pursuant to the Agreement, the Company must make the following payments and expenditures in order to keep the option in good standing:

• i) $35,000 upon execution of the Agreement (paid);

• ii) Issuance of 250,000 common shares after the date that the British Columbia Securities Commission issues a final receipt for the Company’s initial public offering prospectus (issued at a fair value of $25,000);

• iii) $40,000 within four months of execution of the Agreement (paid);

• iv) Fund exploration and development work on the Property of at least $100,000 by December 31, 2023; and

• v) Fund exploration and development work on the Property of at least an additional $200,000 by December 31, 2024.

Once the above payments have been made, the Company can exercise the option and acquire 100% of the right, title and interest in the Woolford Creek Property. The Agreement may be terminated, and the transactions contemplated by the Agreement may be abandoned, at any time prior to the closing date by written agreement of the vendor and the Company upon the failing of the Company to make the required payments. The vendor shall retain a 2% net smelter royalty (subject to an optional repurchase of 1% of the NSR by the Company for $1,000,000) in respect of all products produced from the property.

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RUMBLE RESOURCES INC. Notes to the Interim Financial Statements October 31, 2023 (Expressed in Canadian Dollars) (Unaudited)

4. Related Party Transactions

During the three months ended October 31, 2023, the Company incurred consulting fees of $7,500 (2022 – $4,500) to a director of the Company. As at October 31, 2023, the Company owed $10,839 (2022 – $14,725) to a director of the Company. The amounts are non-interest bearing, unsecured and due on demand.

During the three months ended October 31, 2023, the Company recognized share-based compensation of $818 (2022 – $7,014) for officers and directors of the Company.

On April 6, 2023, the Company entered into a promissory note agreement for $5,000 with a director of the Company, which was unsecured, non-interest bearing and due on demand any time after June 15, 2024. The Company repaid the promissory note on August 1, 2023.

5. Share Capital

Authorized: Unlimited common shares without par value.

On September 5, 2023, the Company completed its initial public offering (the “IPO”) and issued 1,725,000 common shares at $0.10 per share for gross proceeds of $172,500. In connection with the IPO, the Company paid a corporate finance fee of $21,000, an agent’s commission of $17,250, other offering costs of $10,685, and issued 172,500 agent's warrants with a fair value of $12,991. Each agent warrant entitles the holder to purchase one common share of the Company at an exercise price of $0.10 per share until September 5, 2025. In connection with the listing of the Company’s common shares, the Company also incurred a total of $66,012 of listing expenses.

Escrow shares

The Company has 1,800,000 common shares held in escrow as at October 31, 2023 (July 31, 2023 – 2,000,000), which will be released in stages every six months until September 5, 2026. During the three months ended October 31, 2023, a total of 200,000 common shares of the Company were released from escrow.

6. Stock Options

The Company’s Board of Directors approved a stock incentive plan dated May 19, 2021. The Board of directors is authorized to grant options to directors, officers, and employees to acquire up to 10% of the issued and outstanding commons shares of the Company. The exercise price will not be less than the discounted market price defined in the policies of the CSE. The options that may be granted under this plan must be exercisable for over a period of not exceeding ten years, provided the Company is listed on the Exchange.

The following table summarizes information about the stock options at October 31, 2023, and the changes for the period then ended:

changes for the period then ended:
	Number of options Weighted average exercise price $
Options outstanding– July31,2023,and October 31,2023	800,000 0.10
Options exercisable – July31,2023,and October 31,2023	800,000 0.10

The following table summarizes information about stock options outstanding and exercisable at October 31, 2023:

1, 2023:
			Weighted average
			remaining contracted
Exercise price	Expiry	Stock options	life
$	date	outstanding	(years)
0.10	September 5,2033	800,000	9.85

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RUMBLE RESOURCES INC. Notes to the Interim Financial Statements October 31, 2023 (Expressed in Canadian Dollars) (Unaudited)

6. Stock Options (continued)

The grant date fair value of stock options was determined using the Black-Scholes Option Pricing Model. During the three months ended October 31, 2023, the Company recognized share-based compensation expense of $818 (2022 – $7,014) in equity reserves, which pertains to officers and directors of the Company, for the portion of the stock options vested. Weighted average assumptions used in calculating the fair value of share-based compensation expense are as follows:

	2023	2022
Risk-free interest rate	1.58%	1.58%
Dividend yield	0%	0%
Expected volatility	134%	134%
Expected forfeitures	0%	0%
Expected life (years)	10	10

Equity reserve

The equity reserve records items recognized as share-based compensation expense and other sharebased payments until such time that the stock options or warrants are exercised, at which time the corresponding amount will be transferred to share capital.

7. Warrants

The following table summarizes information about the warrants at October 31, 2023, and the changes for the three months then ended:

or the three months then ended:
		Weighted
		average
		exercise
	Number of	price
	warrants	$
Warrants outstanding – July 31, 2023	4,875,000	0.10
Issued	172,500	0.10
Warrants outstanding– October 31,2023	5,047,500	0.10

The Company uses the Black-Scholes valuation model to value agent’s warrants. The following weighted average assumptions were used for the Black-Scholes valuation of warrants granted or vested during the three months ended October 31, 2023, and 2022:

	2023		2022
Risk-free interest rate	4.66%			–
Dividend yield		0%		–
Expected volatility	159.63%			–
Expected forfeitures		0%		–
Expected life (years)		2		–
Weighted average fair value per warrant	$	0.08		–

The following table summarizes information about warrants outstanding and exercisable at October 31, 2023:

			Weighted average
			remaining contracted
Exercise price	Expiry	Warrants	life
$	date	outstanding	(years)
0.10	September 5, 2025	172,500	1.85
0.10	September 5,2028	4,875,000	4.85

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RUMBLE RESOURCES INC. Notes to the Interim Financial Statements October 31, 2023 (Expressed in Canadian Dollars) (Unaudited)

8. Financial Instruments

The Company, as part of its operations, carries financial instruments consisting of cash, accounts payable, due to related party, and note payable to related party. It is management's opinion that the Company is not exposed to significant credit, interest, or currency risks arising from these financial instruments except as otherwise disclosed.

• (a) Fair Values

The Company classifies cash, accounts payable, due to related party and note payable to related party as amortized cost. The fair values of financial instruments, which include cash, accounts payable, due to related party, and note payable to related party, approximate their carrying values due to the relatively short-term maturity of these instruments.

(b) Credit Risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash. The Company limits its exposure to credit loss by placing its cash with high credit quality financial institutions. Management monitors the amount of credit extended to the parties for expense recoveries. The carrying amount of financial assets represents the maximum credit exposure.

• (c) 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 out of cash. The ability to do this relies on the Company raising debt or equity financing in a timely manner and by maintaining sufficient cash in excess of anticipated needs.

• (d) Market Risk

Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and commodity and equity prices. The Company does not have significant exposure to these risks.

9. Capital Management

The Company manages its capital to maintain its ability to continue as a going concern and to provide returns to shareholders and benefits to other stakeholders. The capital structure of the Company consists of cash and equity comprised of issued share capital, equity reserve and warrant reserve. The Company manages its capital structure and makes adjustments to it in light of changes to economic conditions. The Company, upon approval from its Board of Directors, will balance its overall capital structure through new share issues or by undertaking other activities as deemed appropriate under the specific circumstances. The Company is not subject to externally imposed capital requirements.

10. Segment Reporting

The Company operates in a single reportable segment, which is the acquisition, exploration and development of exploration and evaluation assets in Canada.

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