Sendero Resources Corp. — Interim / Quarterly Report 2021

Dec 31, 2021

1319732 B.C. Ltd.

Condensed Interim Financial Statements

(Unaudited)

(Expressed in Canadian Dollars)

For the period from incorporation (August 12, 2021) to October 31, 2021

Notice to Reader

The accompanying unaudited condensed interim financial statements of 1319732 B.C. Ltd (the " Company ") have been prepared by and are the responsibility of management. The unaudited condensed interim financial statements have not been reviewed by the Company's auditors.

1319732 B.C. LTD. Condensed Interim Statements of Financial Position (Unaudited) (Expressed in Canadian dollars)

As at		October 31, 2021
Assets
Current Assets
Cash	$	5,000
Total Assets	$	5,000
Liabilities and Shareholders’ Equity
Current Liabilities
Accrued liabilities		8,901
Total Current Liabilities		8,901
Shareholders’ Equity
Share capital	$	5,000
Deficit		(8,901)
		(3,901)
Total Liabilities and Shareholders’ Equity	$	5,000

Nature and continuance of operations (Note 1)

Subsequent events (Note 9)

Approved on Behalf of the Board on December 30, 2021:

“Binyomin Posen” Binyomin Posen – CEO/Director	“Cole Duthie”
	Cole Duthie - Director

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

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1319732 B.C. LTD. Condensed Interim Statements of Loss and Comprehensive Loss (Unaudited) (Expressed in Canadian dollars)

	Period from
	incorporation
	(August 12, 2021) to
For theperiod	October 31, 2021
Professional fees	$ 750
Legal expenses	8,151
	$(8,901)
Net loss and comprehensive loss for the period	$ (8,901)
Weighted average number of shares outstanding –
Basic and diluted	29,434,544
Basic and diluted loss per share	$ (0.00)

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

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1319732 B.C. LTD. Condensed Interim Statements of Changes in Shareholders Equity (Unaudited) (Expressed in Canadian dollars)

Number	Share Capital Amount Deficit	Total Shareholders’ Equity
Balance, August 12, 2021 - $ - $ - Shares issued during the period (Note 5) 32,705,049 5,000 - Loss for theperiod - - (8,901)		$ - 5,000 (8,901)
Balance, October 31, 2021 32,705,049 $ 5,000 $(8,901)		$(3,901)

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

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1319732 B.C. LTD. Condensed Interim Statements of Cash flows (Unaudited) (Expressed in Canadian dollars)

For the period Period from incorporation (August 12, 2021) to October 31, 2021	For the period Period from incorporation (August 12, 2021) to October 31, 2021
	Cash (used for) provided by: Operating Activities Loss for the period $ (8,901) Items not involving cash: Changes in non-cash working capital items: Accrued liabilities 8,901
	Net cash used in operations -
	Financing Activities Common shares issued 5,000
	Net cash from financingactivities 5,000
	Change in cash for the period $ 5,000 Cash, beginning of the period -
	Cash, end of theperiod $ 5,000

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

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1319732 B.C. LTD. Notes to the Condensed Interim Financial Statements For the period from incorporation (August 12, 2021) to October 31, 2021 (Unaudited) (Expressed in Canadian dollars)

1. NATURE OF OPERATIONS AND GOING CONCERN

1319732 BC Ltd. (the “ Company ” or “732”) was incorporated under the British Columbia Business Corporations Act on August 12, 2021. The head office is located at 1 Adelaide Street East, Suite 801, Toronto, Ontario, M5C 2V9 and records and registered office is located at 1000 – 595 Burrard Street, Vancouver, British Columbia, V7X 1S8.

On October 21, 2021, Rio Verde Industries Inc. (“ Rio Verde ”) announced that the Company received a final order (the " Final Order ") from the Supreme Court of British Columbia approving the previously announced statutory plan of arrangement with its wholly-owned subsidiaries, 1319472 B.C. Ltd., 1319651 B.C. Ltd., 1319732 B.C. Ltd., 1319735 B.C. Ltd., 1319738 B.C. Ltd., 1319741 B.C. Ltd., and 1319743 B.C. Ltd. (the " Plan of Arrangement "). Receipt of the Final Order follows Rio Verde's special meeting of shareholders held on Monday, October 4, 2021 (the " Meeting "), where the Plan of Arrangement was overwhelmingly approved by a total of 23,532,011 common shares in the capital of Rio Verde (" Rio Verde Shares ") having voted in favour representing 98.5% of the total number of Rio Verde Shares represented in person and by proxy at the Meeting.

The Plan of Arrangement closed on October 20, 2021.

Pursuant to the Plan of Arrangement, the shareholders of Rio Verde now hold common shares in the following former subsidiaries of Rio Verde: 1319472 B.C. Ltd., 1319651 B.C. Ltd., 1319732 B.C. Ltd., 1319735 B.C. Ltd., 1319738 B.C. Ltd., 1319741 B.C. Ltd., and 1319743 B.C. Ltd. (collectively referred to as the " Spincos ") Each of the Spincos is now an unlisted reporting issuer in the provinces of British Columbia and Alberta. Shareholders of Rio Verde continue to hold their interest in Rio Verde.

Pursuant to the terms of the Plan of Arrangement: i) Rio Verde altered its share capital to create the additional classes of common shares (the " New Common Shares ") and Reorganization Shares (as defined below); (ii) each of the Rio Verde Shares was exchanged for one New Common Share, one Class 1 Reorganization Share, one Class 2 Reorganization Share, one Class 3 Reorganization Share, one Class 4 Reorganization Share, one Class 5 Reorganization Share, one Class 6 Reorganization Share and one Class 7 Reorganization Share of Rio Verde (collectively referred to as the " Reorganization Shares "), and all of the Rio Verde Shares outstanding prior to the Plan of Arrangement were cancelled; iii) one class of the Reorganization Shares were transferred to each Spinco in exchange for common shares of each Spinco on a 1:1 basis and Rio Verde redeemed all Reorganization Shares through the transfer to each Spinco $5,000 of working capital; and iv) the Rio Verde altered its share capital so that only the New Common Shares remain, were redesignated as “common shares” and deemed to be represented by the same certificate as the previously issued and outstanding Rio Verde Shares.

The Company is investigating and evaluating business opportunities to either acquire or in which to participate.

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1319732 B.C. LTD. Notes to the Condensed Interim Financial Statements For the period from incorporation (August 12, 2021) to October 31, 2021 (Unaudited) (Expressed in Canadian dollars)

1. NATURE OF OPERATIONS AND GOING CONCERN (continued)

These condensed interim financial statements have been prepared in accordance with IFRS (as defined below) with the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business rather than a process of forced liquidation. These condensed interim financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence. At October 31, 2021, the Company had cash of $5,000 and working capital deficit of $3,901. These conditions raise material uncertainties which may cast significant doubt on the Company’s ability to continue as a going concern.

Continuing business as a going concern is dependent upon the ability of the Company to obtain additional debt or equity financing, both of which are uncertain. These material uncertainties may cast significant doubt on the Company’s ability to continue as a going concern.

Should the Company be unable to realize its assets or discharge its liabilities in the normal course of business, the net realizable value of its assets may be materially less than the amounts recorded in the financial statements. These financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. Such adjustments could be material.

In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or results of operations at this time.

2. BASIS OF PRESENTATION

Statement of compliance

The Company applies International Financial Reporting Standards (" IFRS ") as issued by the International Accounting Standards Board (“ IASB ”) and interpretations issued by the International Financial Reporting Interpretations Committee (“ IFRIC ”). These unaudited condensed interim financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting. Accordingly, they do not include all of the information required for full annual financial statements required by IFRS as issued by IASB and interpretations issued by IFRIC.

The policies applied in these unaudited condensed interim financial statements are based on IFRS issued and outstanding as of December 30, 2021, the date the Board of Directors approved the statements.

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1319732 B.C. LTD. Notes to the Condensed Interim Financial Statements For the period from incorporation (August 12, 2021) to October 31, 2021 (Unaudited) (Expressed in Canadian dollars)

2. BASIS OF PRESENTATION (continued)

The condensed interim financial statements of the Company are presented in Canadian dollars, which is the functional currency of the Company. The Company’s condensed interim financial statements were authorized for issue by the Board of Directors on December 30, 2021.

3. SIGNIFICANT ACCOUNTING POLICIES

These condensed interim financial statements of the Company have been prepared on the historical cost basis, except for financial instruments classified as financial instruments at fair value through profit and loss, which are stated at their fair value. In addition, the financial statements have been prepared using the accrual basis of accounting, except for the statements of cash flows.

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the year. Estimates and assumptions are continually 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. Actual results could differ from these estimates.

The areas which require management to make significant judgments, estimates and assumptions in determining carrying values include, but are not limited to:

Significant Judgments

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

a. Deferred income taxes

The Company recognizes the deferred tax benefit related to deferred income and resource tax assets to the extent recovery is probable. Assessing the recoverability of deferred tax assets requires management to make significant estimates of future taxable profit. In addition, future changes in tax laws could limit the ability of the Company to obtain tax deductions from deferred income and resource tax assets.

• b. Shares issued for non- cash consideration

The company is required to recognize these transactions at fair value which requires judgment in selecting valuation technique and other factors.

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1319732 B.C. LTD. Notes to the Condensed Interim Financial Statements For the period from incorporation (August 12, 2021) to October 31, 2021 (Unaudited) (Expressed in Canadian dollars)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

Significant Estimates

a. Share-based payments

Share-based payments are determined using the Black-Scholes option pricing model based on the estimated fair value of all share-based awards at the date of grant and is expensed to the statement of loss and comprehensive income (loss) over each award’s vesting period. The BlackScholes option pricing model utilizes subjective assumptions such as expected price volatility and expected life of the option. Changes in these input assumptions can significantly affect the fair value estimate.

b. Going concern

Management assessment of going concern and uncertainties of the Company’s ability to raise additional capital and/or obtain financing to meet its commitments.

Cash

Cash is comprised of cash on hand and demand deposits.

Loss per share

Basic earnings (loss) per share is computed by dividing net earnings (loss) available to common shareholders by the weighted average number of shares outstanding during the reported period. Diluted earnings (loss) per share is computed similar to basic earnings (loss) per share except that the weighted average shares outstanding are increased to include additional shares for the assumed exercise of stock options and warrants, if dilutive. The number of additional shares is calculated by assuming that outstanding stock options and warrants were exercised and that proceeds from such exercises were used to acquire common stock at the average market price during the reporting periods.

Basic loss per share is calculated using the weighted-average number of shares outstanding during the year.

Financial instruments

The Company recognizes a financial asset or financial liability on the statement of financial position when it becomes party to the contractual provisions of the financial instrument. Financial assets are initially measured at fair value and are derecognized either when the Company has transferred substantially all the risks and rewards of ownership of the financial asset, or when cash flows expire. Financial liabilities are initially measured at fair value and are derecognized when the obligation specified in the contract is discharged, cancelled or expired.

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1319732 B.C. LTD. Notes to the Condensed Interim Financial Statements For the period from incorporation (August 12, 2021) to October 31, 2021 (Unaudited) (Expressed in Canadian dollars)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

A write-off of a financial asset (or a portion thereof) constitutes a derecognition event. Write-off occurs when the Company has no reasonable expectations of recovering the contractual cash flows on a financial asset.

Classification and Measurement

The Company determines the classification of its financial instruments at initial recognition. Financial assets and financial liabilities are classified according to the following measurement categories:

• those to be measured subsequently at fair value, either through profit or loss (“ FVTPL or through other comprehensive income (“ FVTOCI ”); and,

• those to be measured subsequently at amortized cost.

The classification and measurement of financial assets after initial recognition at fair value depends on the business model for managing the financial asset and the contractual terms of the cash flows. Financial assets that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding, are generally measured at amortized cost at each subsequent reporting period. All other financial assets are measured at their fair values at each subsequent reporting period, with any changes recorded through profit or loss or through other comprehensive income (which designation is made as an irrevocable election at the time of recognition).

After initial recognition at fair value, financial liabilities are classified and measured at either:

• amortized cost;

• FVTPL, if the Company has made an irrevocable election at the time of recognition, or when required (for items such as instruments held for trading or derivatives); or

• FVTOCI, when the change in fair value is attributable to changes in the Company’s credit risk.

The Company reclassifies financial assets when and only when its business model for managing those assets changes. Financial liabilities are not reclassified.

The classification determines the method by which the financial assets are carried on the statement of financial position subsequent to inception and how changes in value are recorded. Cash is classified as FVTPL. The Company’s financial liabilities consist of accounts payable and accrued liabilities, which are classified and measured at amortized cost using the effective interest method. Interest expense is reported in profit or loss.

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1319732 B.C. LTD. Notes to the Condensed Interim Financial Statements For the period from incorporation (August 12, 2021) to October 31, 2021 (Unaudited) (Expressed in Canadian dollars)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

Impairment

An ‘expected credit loss’ impairment model applies which requires a loss allowance to be recognized based on expected credit losses. The estimated present value of future cash flows associated with the asset is determined and an impairment loss is recognized for the difference between this amount and the carrying amount as follows: the carrying amount of the asset is reduced to estimated present value of the future cash flows associated with the asset, discounted at the financial asset’s original effective interest rate, either directly or through the use of an allowance account and the resulting loss is recognized in profit or loss for the period. In a subsequent period, if the amount of the impairment loss related to financial assets measured at amortized cost decreases, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.

Fair Value

Cash is carried at fair value using level 1 fair value measurement. The carrying value of amounts receivables, and accounts payable and accrued liabilities and loans payable approximate their fair value because of the short-term nature of these instruments. The carrying value of lease liability approximates fair value as there has not been any significant changes in interest rates since initial recognition.

The Company records certain of its financial instruments at fair value using various techniques. These include estimates of fair values based on prevailing market prices (bid and ask prices, as appropriate) for instruments with similar characteristics and risk profiles or internal and external valuation models, such as discounted cash flow analyses, using, to the extent possible, observable market-based inputs.

The financial instruments have been characterized on a fair value hierarchy based on whether the inputs to those valuation techniques are observable (inputs reflect market data obtained from independent sources) or unobservable (inputs reflect the Company’s market assumptions).

The three levels of fair value estimation are:

Level 1 – quoted prices in active markets for identical instruments.

Level 2 – quoted prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

Level 3 – valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

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1319732 B.C. LTD. Notes to the Condensed Interim Financial Statements For the period from incorporation (August 12, 2021) to October 31, 2021 (Unaudited) (Expressed in Canadian dollars)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

Share-based payments

The Company grants stock options to buy common shares of the Company to directors, officers, employees and consultants. An individual is classified as an employee when the individual is an employee for legal or tax purposes, or provides services similar to those performed by an employee.

The fair value of stock options is measured on the date of grant, using the Black-Scholes option pricing model and is recognized over the vesting period. Consideration paid for the shares on the exercise of stock options is credited to share capital. When vested options are forfeited or are not exercised at the expiry date the amount previously recognized in reserves is transferred to accumulated losses (deficit).

In situations where equity instruments are issued to non-employees and some or all of the goods or services received by the entity as consideration cannot be specifically identified, they are measured at fair value of the share-based payment. Otherwise, share-based payments are measured at the fair value of goods and services rendered.

Income taxes

Income tax expense comprises current and deferred tax. Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity. Current tax expense is the expected tax payable on taxable income for the year, using tax rates enacted or substantively enacted at period end, adjusted for amendments to tax payable with regards to previous years.

Deferred tax is recognized in respect of temporary differences, between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Temporary differences are not provided for the initial recognition of assets and liabilities that affect neither accounting nor taxable loss to the extent that they will be probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the statement of financial position date.

A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized.

IFRS pronouncements not yet implemented

Certain new IFRS standards and interpretations have been issued but are not shown as they are not expected to have a material impact on the Company’s financial statements.

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1319732 B.C. LTD. Notes to the Condensed Interim Financial Statements For the period from incorporation (August 12, 2021) to October 31, 2021 (Unaudited) (Expressed in Canadian dollars)

4. RELATED PARTY TRANSACTIONS

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

The Company has identified its directors and certain senior officers as its key management personnel and the compensation costs for key management personnel and companies related to them are recorded at their exchange amounts as agreed upon by transacting parties.

On November 1, 2021, Shimcity Inc. (“ Shimcity ”) and 2657456 Ontario Inc. (“ 265 ”) (collectively, the “ Acquirors ”) announced that they acquired 13,235,294 common shares (“ Common Shares ”) and 8,823,529 Common Shares, respectively, of the Company.

5. SHARE CAPITAL

(a) Authorized

Unlimited number of common and preferred shares without par value.

(b) Issued and outstanding

As at October 31, 2021, the Company had the following common shares issued and outstanding.

	Number of
	Shares	Amount($)
Shares issued – August 12, 2021	-	-
Shares issued – October 20, 20211	32,705,049	5,000
Balance, October 31, 2021	32,705,049	5,000

1 Pursuant to the terms of the Plan of Arrangement effective on October 20, 2021 each of the Rio Verde Shares was exchanged for one New Common Share and seven new classes of Reorganization Shares. The Reorganization Shares were then transferred by the shareholders of Rio Verde, including the Acquirors, to each of the Spincos in exchange for common shares of the Spincos on a 1:1 basis. In addition, each of the Spincos received $5,000 in working capital from Rio Verde.

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1319732 B.C. LTD. Notes to the Condensed Interim Financial Statements For the period from incorporation (August 12, 2021) to October 31, 2021 (Unaudited) (Expressed in Canadian dollars)

6. BASIC AND DILUTED LOSS PER SHARE

The calculation of basic and diluted loss per share for the period ended October 31, 2021 was based on the loss attributable to common shareholders of $8,901 for the period from incorporation (August 12, 2021) to October 31, 2021 and the weighted average number of common shares outstanding of 29,434,544 for the period from incorporation (August 12, 2021) to October 31, 2021.

7. MANAGEMENT OF CAPITAL

Capital is comprised of the Company’s shareholders’ equity (deficiency) and any debt that it may issue. The Company’s objectives when managing capital are to maintain financial strength and to protect its ability to meet its ongoing liabilities, to continue as a going concern, to maintain creditworthiness and to maximize returns for shareholders over the long term. Protecting the ability to pay current and future liabilities includes maintaining capital above minimum regulatory levels, current financial strength rating requirements and internally determined capital guidelines and calculated risk management levels.

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 October 31, 2021, the Company is not subject to any externally imposed capital requirements.

8. FINANCIAL INSTRUMENTS

The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board of Directors approves and monitors the risk management processes. The type of risk exposure and the way in which such exposure is managed is provided as follows:

Market Risk

Market risk is the risk that the fair value or future cash flows from a financial instrument will fluctuate because of changes in market prices or prevailing conditions. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk and are disclosed as follows:

i. Currency risk

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company holds no financial instruments that are denominated in a currency other than Canadian dollars. As at October 31, 2021, the Company is not exposed to currency risk.

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1319732 B.C. LTD. Notes to the Condensed Interim Financial Statements For the period from incorporation (August 12, 2021) to October 31, 2021 (Unaudited) (Expressed in Canadian dollars)

8. FINANCIAL INSTRUMENTS (continued)

ii. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows will fluctuate as a result of changes in market risk. The Company’s sensitivity to interest rates relative to its cash balances is currently immaterial. The Company also has no long-term debt with variable interest rates, so it has no negative exposure to changes in the market interest rate.

iii. Price rate risk

The Company is exposed to price risk with respect to equity prices. Equity price risk is defined as the potential adverse impact on the Company's earnings due to movements in individual equity prices or general movements in the level of the stock market. Management closely monitors individual equity movements and the stock market to determine the appropriate course of action to be taken by the Company. Given the Company’s limited market exposure at this time it has assessed there to be a low level of price rate risk.

Credit Risk

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The Company’s credit risk is primarily attributable to its liquid financial assets including cash. The Company limits the exposure to credit risk by only investing its cash with high-credit quality financial institutions. Management believes that the credit risk related to its cash is negligible.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. At October 31, 2021, the Company has limited sources of revenue and has a cash balance of $5,000 to settle current liabilities of $8,901. As such, the Company has insufficient cash to fund corporate overhead costs and the repayment of the Company’s debt obligations for the next year.

Until such time as the Company’s investments increase in value or begin generating significant dividend income, the Company will remain dependent upon the financial support of its shareholders and debt holders or the sale of investments. If the Company is unable to finance itself through these means, it is possible that the Company will be unable to continue as a going concern.

Additionally, the Company likely has insufficient funds from which to finance any identified business acquisition and as such will require additional financing to accomplish the Company’s long-term strategic objectives. Future funding may be obtained by means of issuing share capital and/or debt financing. There can be no certainty of the Company’s ability to raise additional financing through these means. If the Company is unable to continue to finance itself through these means, it is possible that the Company will be unable to continue as a going concern.

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1319732 B.C. LTD. Notes to the Condensed Interim Financial Statements For the period from incorporation (August 12, 2021) to October 31, 2021 (Unaudited) (Expressed in Canadian dollars)

8. FINANCIAL INSTRUMENTS (continued)

Consequently, the Company is exposed to liquidity risk as at October 31, 2021.

Fair Value Risk

When participating in investment activities, the Company may incur losses if it is unable to resell the securities it has purchased or if it is forced to liquidate its holdings at less than their respective carrying values. All of the Company's investments are carried on a FVTPL basis and are recorded at their fair value. As such, changes in fair value affect earnings as they occur.

The fair value of cash at October 31, 2021 approximates their carrying values due to their short term to maturity.

9. SUBSEQUENT EVENTS

On December 9, 2021 the Company announced that it closed a non-brokered private placement, raising aggregate gross proceeds of $30,576 through the issuance of 100,000,000 Common Shares at a price of $0.000306 per Share (the “ Offering ”).

All securities issued pursuant to the Offering are subject to a statutory hold period of four months plus one day from the date of issuance, in accordance with applicable securities legislation.

In connection with the Offering, Shimcity acquired 47,794,110 Common Shares. Prior to the Offering, Shimcity held, beneficially owned, or exercised control or direction over, 13,235,294 Common Shares of the Company, representing 40.47% of the issued and outstanding Common Shares. Following the completion of the Offering, Shimcity holds 61,029,404 Common Shares, representing 45.99% of the issued and outstanding Common Shares on a non-diluted basis.

In connection with the Offering, 265 ON acquired 52,165,490 Common Shares. Prior to the Offering, 265 ON held, beneficially owned, or exercised control or direction over, 8,823,529 Common Shares of the Company, representing 26.98% of the issued and outstanding Common Shares. Following the completion of the Offering, 265 ON holds 61,029,419 Common Shares, representing 45.99% of the issued and outstanding Common Shares on a non-diluted basis.

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