Shellron Capital Ltd — Interim / Quarterly Report 2022

Nov 10, 2021

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Condensed Interim Financial Statements (Unaudited)

For the Six Months Ended October 31, 2021

(Expressed in Canadian Dollars)

NOTICE OF NO REVIEW BY AUDITOR

In accordance with National Instrument 51-102 Continuous Disclosure Obligations of The Canadian Securities Administrators we hereby give notice that our condensed interim consolidated financial statements for the six months ended October 31, 2021, which follow this notice, have not been reviewed by an auditor.

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

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Shellron Capital Ltd. Condensed Interim Statements of Financial Position (Expressed in Canadian Dollars)

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	October 31,	April 30,
	2021	2021
	($)	($)
	(unaudited)
Assets
Current assets
Cash	153,223	205,324
Receivables	3,637	14
Prepaid expenses	25,000	5,000
Total assets	181,860	210,338
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable and accrued liabilities	7,244	4,000
Total liabilities	7,244	4,000
Shareholders’ equity
Share capital (Note 3)	212,500	212,500
Deficit	(37,884)	(6,162)
Total shareholders’equity	174,616	206,338
Total liabilities and shareholders’ equity	181,860	210,338

Nature of operations and going concern (Note 1)

Approved and authorized for issuance on behalf of the Board of Directors on November 10, 2021:

/s/ Andrew Yau Andrew Yau, Director	/s/ Jorge Martinez
	Jorge Martinez, Director

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

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Shellron Capital Ltd. Condensed Interim Statement of Operations and Comprehensive Loss (Unaudited) (Expressed in Canadian Dollars)

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	Three Months Ended	Six Months Ended
	October 31, 2021	October 31, 2021
	($)	($)
Expenses
Filing fees	262	12,690
Professional fees	8,854	19,354
Total expenses	(9,116)	(32,044)
Loss before other income	(9,116)	(32,044)
Other income
Interest income	85	230
Foreignexchange gain	92	92
Net loss and comprehensive loss for theperiod	(8,939)	(31,722)
Lossper share, basic and diluted	(0.00)	(0.01)
Weighted average shares outstanding	4,250,000	4,250,000

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

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Shellron Capital Ltd. Condensed Interim Statement of Changes in Equity (Unaudited) (Expressed in Canadian Dollars)

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	Share Capital Number of Shares Amount ($) Deficit ($) Total ($)
Balance, April 30, 2021 Net loss for the period	4,250,000 212,500 (6,162) 206,338 – – (31,722) (31,722)
Balance, October 31, 2021	4,250,000 212,500 (37,884) 174,616

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

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Shellron Capital Ltd. Condensed Interim Statement of Cash Flows (Unaudited) (Expressed in Canadian Dollars)

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	Three Months Ended	Six Months Ended
	October 31, 2021	October 31, 2021
	($)	($)
Operating Activities
Net loss for the period	(8,939)	(31,722)
Changes in non-cash working capital:
Receivables	(773)	(3,623)
Prepaid expenses	-	(20,000)
Accounts payable and accrued liabilities	(7,256)	3,244
Net cash used in operating activities	(8,029)	(20,379)
Decrease in cash	(16,968)	(52,101)
Cash, beginning of period	170,191	205,324
Cash, end ofperiod	153,223	153,223

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

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Shellron Capital Ltd. Notes to the Condensed Interim Financial Statements (Unaudited) For the Six Months Ended October 31, 2021 (Expressed in Canadian Dollars, except where noted)

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1. Nature of Operations and Going Concern

Shellron Capital Ltd. (the “Company” or “Shellron”) was incorporated under the laws of the province of British Columbia, Canada on January 21, 2021. The Company’s head office and principal address is located at 1090 Hamilton Street, Vancouver, British Columbia, Canada, V6B 2R9.

The Company is in the process of completing an initial public offering (“IPO”) to be classified as a Capital Pool Company (“CPC”) pursuant to the policies of the TSX Venture Exchange (“TSXV”) Policy 2.4. The Company is in the startup stage and its principal business will be the identification and evaluation of assets or businesses with a view to completing a Qualifying Transaction as defined by the rules of the TSXV. Such a transaction will be subject to shareholder and regulatory approval.

These condensed interim financial statements have been prepared on a going concern basis which implies that the Company will continue realizing assets and discharging liabilities in the normal course of business for the foreseeable future. Should the going concern assumption not continue to be appropriate, further adjustments to carrying values of assets and liabilities may be required. During the period ended October 31, 2021, the Company has no business operations and incurred negative cash flow from operations. As at October 31, 2021, the Company had an accumulated deficit of $37,884. Accordingly, the ability of the Company to realize the carrying value of its assets and continue operations as a going concern is dependent upon its ability to raise additional debt or equity to fund ongoing costs of operations. These material uncertainties may cast significant doubt upon the Company’s ability to continue as a going concern. These condensed interim financial statements do not include any adjustments relating to the recovery of assets and classification of assets and liabilities that may arise should the Company be unable to continue as a going concern.

On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic and has adversely affected global workforces, financial markets, and the general economy. Although, it is not possible for the Company to determine the duration or magnitude of the adverse results of COVID-19, the Company’s ability to raise capital has not been impacted by COVID-19 and the Company does not expect such ability to raise capital to be impacted by COVID19 in the future. The Company does not expect COVID-19 to significantly impact its ability to completing a Qualifying Transaction as it will leverage technological and local resources as required, and as a result, pandemic-related restrictions on trans-national travel are not expected to adversely impact the Company’s ability to complete a Qualifying Transaction.

2. Basis of Presentation

These condensed interim financial statements have been prepared in accordance with International Accounting Standards 34, Interim Financial Reporting (“IAS 34”) using accounting policies consistent with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). These condensed interim financial statements have been prepared using the same accounting policies and methods of computation as the most recent annual financial statements for the period January 21, 2021 (date of incorporation) to April 30, 2021. Certain amounts in the prior period have been reclassified to conform with the presentation in the current period.

Changes in Accounting Standards

Certain 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 financial statements.

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Shellron Capital Ltd. Notes to the Condensed Interim Financial Statements (Unaudited) For the Six Months Ended October 31, 2021 (Expressed in Canadian Dollars, except where noted)

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3. Share Capital

Authorized - unlimited common shares without par value

On March 12, 2021, the Company issued 4,250,000 common shares at $0.05 per share for proceeds of $212,500.

On May 3, 2021, the Company entered into a letter of engagement (the “Agreement”) with Hampton Securities Limited (the “Agent”) to act as its agent in connection with the Company’s IPO. The IPO will consist of a minimum 3,000,000 common shares at $0.10 per share for proceeds of $300,000 and a maximum of 8,000,000 common shares for proceeds of $800,000. Pursuant to the Agreement, the Agent will receive a cash commission of up to 10% of the gross proceeds of the IPO, payable at the closing of the IPO. The Agent has been paid a work fee of $20,000 and will be reimbursed by the Company for its expenses and legal fees.

4. Financial Instruments and Risk Management

Financial risks

The Company’s financial instruments are exposed to certain financial risks. The risk exposures and the impact on the Company's financial instruments as at October 31, 2021 are summarized below.

(a) Credit risk

The credit risk exposure on cash is limited to its carrying amount at the date of the statement of financial position. Cash is held as cash deposits with a creditworthy bank.

(b) Liquidity Risk

Liquidity risk arises from the Company’s general and capital financing needs. The Company manages liquidity risk by attempting to maintain sufficient cash balances. Liquidity requirements are managed based on expected cash flows to ensure that there is sufficient capital in order to meet short term obligations. As at October 31, 2021, the Company has working capital of $174,616.

(c) Market Risks

(i) Foreign 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’s functional and reporting currency is the Canadian dollar. The Company is exposed to the financial risk related to the fluctuation of foreign exchange rates. As at October 31, 2021, the Company has a cash balance of US$19,169. The Company has not hedged its exposure to currency fluctuations.

(ii) Interest Rate Risk

The Company does not have any interest bearing debt and is therefore not exposed to interest rate risk.

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Shellron Capital Ltd. Notes to the Condensed Interim Financial Statements (Unaudited) For the Six Months Ended October 31, 2021 (Expressed in Canadian Dollars, except where noted)

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4. Financial Instruments and Risk Management - continued

Fair Values

Fair value measurements are classified using a fair value hierarchy that reflects the significance of inputs used in making the measurements. The fair value hierarchy has the following levels:

Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The fair values of the Company’s financial instruments, which includes cash, accounts payable and accrued liabilities, approximate their carrying values due to the immediate or short-term maturity of these financial instruments.

5. Capital Management

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue a Qualifying Transaction and to maintain a flexible capital structure for its projects for the benefit of its stakeholders. As the Company is in the startup stage, its principal source of funds is from the issuance of common shares.

The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. The Company will be subject to externally imposed capital requirements under Policy 2.4 of the TSXV for capital pool companies.

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