Shellron Capital Ltd — Interim / Quarterly Report 2024

Mar 26, 2024

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Condensed Interim Financial Statements (Unaudited)

For the Nine Months Ended January 31, 2024

(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 financial statements for the nine months ended January 31, 2024, which follow this notice, have not been reviewed by an auditor.

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

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	January 31,	April 30,
	2024	2023
	($)	($)
Assets
Current assets
Cash	50,874	154,839
Receivables	13,050	9,861
Prepaid expenses	40,000	10,000
Total assets	103,924	174,700
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable and accrued liabilities	7,372	10,574
Total liabilities	7,372	10,574
Shareholders’ equity
Share capital (note 4a)	569,910	569,910
Reserves (note 4d)	80,463	61,530
Deficit	(553,821)	(467,314)
Total shareholders’equity	96,552	164,126
Total liabilities and shareholders’ equity	**103,924 **	174,700

Nature of operations and going concern (note 1)

Approved and authorized for issuance on behalf of the Board of Directors on March 26, 2024:

/s/ Daniela Freitas /s/ Jorge Martinez Daniela Freitas, Director Jorge Martinez, Director

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

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

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	Three Months Ended January 31, January 31, 2024 2023 ($) ($)	Nine Months Ended
		January 31, January 31, 2024 2023 ($) ($)
Expenses General and administration (note 5) Professional fees Share-based payments (note 4b) Transfer agent and filing fees Travel	10,248 6,055 2,703 1,677 18,933 - 1,710 1,898 - 1,689	34,343 18,223 23,986 25,934 18,933 - 8,566 18,986 3,839 3,440
Totalexpenses	(33,594) (11,319)	(89,667) (66,583)
Interest income Foreign exchange gain (loss)	670 1,690 (838) (485)	3,419 6,252 (259) 988
Net loss and comprehensive loss for theperiod	(33,762) (10,114)	(86,507) (59,343)
Lossper share, basic and diluted	(0.00) (0.00)	(0.01) (0.01)
Weighted average shares outstanding	8,539,000 8,539,000	8,539,000 7,167,323

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

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

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	Share Capital Number of Shares Amount ($) Reserves ($) Deficit ($) Total ($)
Balance, May 1, 2022 Comprehensive loss for theperiod	8,539,000 569,910 61,530 (136,619) 494,821 - - - (59,343) (59,343)
Balance, January 31, 2023	8,539,000 569,910 61,530 (195,962) 435,478
Balance, May 1, 2023 Share based payments (note 4b) Comprehensive loss for theperiod	8,539,000 569,910 61,530 (467,314) 164,126 - - 18,933 - 18,933 - - - (86,507) (86,507)
Balance, January 31, 2024	8,539,000 569,910 80,463 (553,821) 96,552

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

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

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	Three Months Ended January 31, January 31, 2024 2023 ($) ($)	Nine Months Ended
		January 31, January 31, 2024 2023 ($) ($)
Operating Activities Net loss for the period Items not involving cash: Share based payments Changes in non-cash working capital: Receivables Advances and prepaid expenses Accounts payable and accruedliabilities	(33,762) (10,114) 18,933 - (384) (617) (24,000) 488 (4,196) (8,448)	(86,507) (59,343) 18,933 - (3,189) (253,207) (30,000) 2,800 (6,875) (5,528)
Cash used in operating activities	(43,409) (18,691)	(107,638) (315,278)
Investing Activities Interestincome	670 1,690	3,419 6,252
Cash from investingactivities	670 1,690	3,419 6,252
Effect of foreign exchange on cash Decrease in cash Cash, beginning of period	254 1,027 (42,485) (15,974) 93,359 194,824	254 1,027 (103,965) (307,999) 154,839 486,849
Cash, end ofperiod	50,874 178,850	50,874 178,850

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

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Shellron Capital Ltd. Notes to the Condensed Interim Financial Statements (Unaudited) For the Nine Months Ended January 31, 2024 (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 3082 Spencer Place, West Vancouver, British Columbia, Canada, V7V 3C7.

On November 22, 2021, the Company completed 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 and is listed on the TSXV under the trading symbol “SHLL”. 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 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 nine months ended January 31, 2024, the Company had no business operations and incurred negative cash flow from operations of $107,638 (2023 – $315,278). As at January 31, 2024, the Company had an accumulated deficit of $553,821 (April 30, 2023 - $467,314). The Company’s continuing operations are dependent upon its ability to identify and evaluate assets or businesses with a view to potential acquisition or participation by completing a Qualifying Transaction, as defined in Exchange Policy 2.4. The preceding indicates the existence of a material uncertainty that may cast substantial doubt about the Company’s ability to continue as a going concern. These 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.

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 year ended April 30, 2023. 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.

3. Loan Receivable

On October 6, 2022, the Company entered into a loan agreement providing an aggregate of $250,000 (the “Loan”) to Launchtrip Technologies Corp. (note 8). The Loan was interest free and repayable within 7 days of the earlier of (i) 12 months from the date of the Loan; or (ii) termination of the Proposed Transaction. The Loan was secured by a general security agreement. The Proposed Transaction was terminated on March 24, 2023, and the Loan became due on March 31, 2023. The Company filed a lawsuit (the “Lawsuit”) in the Supreme Court of British Columbia against Launchtrip for the repayment of the Loan. Accordingly, the Company recognized an impairment of $250,000 as at April 30, 2023.The Lawsuit was dismissed by consent and without costs to any party. The Company continues to hold security over Launchtrip’s IP however it views the probability of recovering any funds from Launchtrip as very low.

4. Share Capital

• (a) Common Shares

Authorized - unlimited common shares without par value.

As at January 31, 2024, the Company had 8,539,000 (April 30, 2023 - 8,539,000) common shares issued and outstanding.

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Shellron Capital Ltd. Notes to the Condensed Interim Financial Statements (Unaudited) For the Nine Months Ended January 31, 2024 (Expressed in Canadian Dollars, except where noted)

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4. Share Capital - continued

• (b) Share Options

The Company has a share option plan to issue share options whereby the total share options outstanding may be up to 10% of its issued capital at the time of an applicable option grant. The Board of Directors may from time to time, grant options to directors, officers, employees or consultants. The exercise price of an option is not less than the closing price on the TSXV on the last trading day preceding the grant date.

The continuity of the Company's share options is as follows:

		Weighted
		Average
	Number of	Exercise Price
	Options	($)
Balance, April 30, 2022 and 2023	825,000	0.10
Cancelled	(350,000)	0.10
Granted	250,000	0.10
Balance, January 31, 2024	725,000	0.10

Additional information regarding the Company’s share options as at January 31, 2024, is as follows:

Exercise Price ($)	Options Outstanding Number of Options Outstanding Weighted Average Remaining Contractual Life (Years)	Options Exercisable
		Number of Options Exercisable Weighted Average Remaining Contractual Life (Years)
0.10 0.10	475,000 2.81 250,000 4.93	475,000 2.81 250,000 4.93

The fair value of vested share options recognized as an expense during the three and nine months ended January 31, 2024, was $18,933 (2023 - $nil).

The fair value of each share option is estimated on the date of grant using the Black-Scholes Option Pricing Model that uses the assumptions noted in the table below. Expected volatilities are based on historical volatility of the Company’s shares or an applicable comparable company, and other factors. The expected term of share options granted represents the period of time that share options granted are expected to be outstanding. The risk-free rate of periods within the contractual life of the share option is based on the Canadian government bond rate. Assumptions used for share options granted during fiscal 2024 are as follows:

	Number of	Expected	Risk Free	Expected	Expected	Fair Value	Total
	Share	Price	Interest	Life	Dividend	Per Option	Fair Value
Grant Date	Options	Volatility	Rate	(Years)	Yield	($)	($)
January5,2024	250,000	100%	3.27%	5.0	-	0.08	18,933

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Shellron Capital Ltd. Notes to the Condensed Interim Financial Statements (Unaudited) For the Nine Months Ended January 31, 2024 (Expressed in Canadian Dollars, except where noted)

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4. Share Capital - continued

• (c) Loss per Share

	Three Months Ended January 31, January 31, 2024 2023 ($) ($)	Nine Months Ended January 31, January 31, 2024 2023 ($) ($)
Basic loss per share Diluted loss per share Net loss for theperiod	(0.00) (0.00) (0.00) (0.00) (33,762) (10,114)	(0.01) (0.01) (0.01) (0.01) (86,507) (59,343)

	Three Months Ended January 31, January 31, 2024 2023	Nine Months Ended January 31, January 31, 2024 2023
Shares outstanding, beginning ofperiod	8,539,000 8,539,000	8,539,000 7,167,323
Basic weighted average number of shares outstanding Effect ofdilutive share options	8,539,000 8,539,000 - -	8,539,000 7,167,323 - -
Diluted weighted average number of shares outstanding	8,539,000 8,539,000	8,539,000 7,167,323

As at January 31, 2024, there were 725,000 (2023 – 825,000) share options that were potentially dilutive but not included in the diluted loss per share calculation as the effect would be anti-dilutive.

• (d) Reserves

Share Options

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

5. Related Party Transactions

The Company entered into an office cost reimbursement agreement (the “OCRA”) with Orea Mining Corp. (“Orea”), effective January 1, 2022, whereby the Company reimbursed Orea for certain office costs totaling $2,000 per month. Effective October 1, 2023, the OCRA was amended, whereby the Company reimbursed Orea for office costs totaling $3,000 per month, retroactively to January 1, 2023. The OCRA was terminated effective December 31, 2023. The Company and Orea had certain directors and officers in common.

The following is a summary of related party transactions:

	Three Months Ended January 31, January 31, 2024 ($) 2023 ($)	Nine Months Ended
		January 31, January 31, 2024 ($) 2023 ($)
Amounts paid or accrued under the OCRA Consulting fees paid to the Interim CFO and CEO Share-basedpayments incurred to a Director of the Company	6,000 6,000 3,500 - 18,933 -	28,000 18,000 3,500 - 18,933 -

There are no amounts owing to related parties as at January 31, 2024 and April 30, 2023.

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Shellron Capital Ltd. Notes to the Condensed Interim Financial Statements (Unaudited) For the Nine Months Ended January 31, 2024 (Expressed in Canadian Dollars, except where noted)

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6. Segmented Disclosure

The Company has one reportable business segment, being the completion of a Qualifying Transaction. All assets are held in Canada.

7. 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 January 31, 2024, 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. All of the Company’s financial liabilities have maturities of one year or less. The carrying values of the Company’s accounts payables and accrued liabilities on the statement of financial position equal their contractual cash flows.

• (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 January 31, 2024, the Company has a cash balance of US$18,975. The Company has not hedged its exposure to currency fluctuations.

Sensitivity Analysis

The Company has a bank balance in US dollars. The Company estimates that a +/-10% change in the value of the Canadian dollar relative to the US dollar would have a corresponding effect of approximately $2,500 on the statement of operations.

• (ii) Interest Rate Risk

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

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).

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Shellron Capital Ltd. Notes to the Condensed Interim Financial Statements (Unaudited) For the Nine Months Ended January 31, 2024 (Expressed in Canadian Dollars, except where noted)

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7. Financial Instruments and Risk Management - continued

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

			Fair value at
	Measurement		January 31, 2024
Financial Instrument	Method	Associated Risks	($)
Cash	FVTPL (Level 1)	Credit and currency	50,874
Accounts payable and accruedliabilities	Amortized cost	Currency	(7,372)
			43,502

8. 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 proceeds raised from the issuance of common shares may only be used to identify and evaluate assets or businesses for future investment, to obtain shareholder approval, if applicable, for a proposed Qualifying Transaction by the Company as defined under the Exchange Policy 2.4, to cover reasonable expenses relating to the IPO and a maximum of $3,000 per month to cover prescribed administrative and general expenses of the Company. These restrictions apply until completion of a Qualifying Transaction by the Company. The Company currently is not subject to other externally imposed capital requirements.

9. Qualifying Transaction

On July 26, 2022, the Company entered into a binding letter of intent with Launchtrip for a proposed Qualifying Transaction (the “Proposed Transaction”). On October 6, 2022, the Company entered into a loan agreement providing an aggregate of $250,000 to Launchtrip (note 3). On March 24, 2023, the Proposed Transaction was terminated.

On April 27, 2023, the Company filed a lawsuit in the Supreme Court of British Columbia against Launchtrip for the repayment of the $250,000 loan, which was later dismissed by consent and without costs to any party.

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