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Shellron Capital Ltd — Interim / Quarterly Report 2025
Dec 11, 2024
48177_rns_2024-12-11_b739ac68-ec23-4b3b-9902-1ccdcd0b9fa9.pdf
Interim / Quarterly Report
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Shellron
CAPITAL
Financial Statements
For the Six Months Ended
October 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 six months ended October 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)
Shellron
CAPITAL
| October 31, 2024 ($) | April 30, 2024 ($) | |
|---|---|---|
| Assets | ||
| Current assets | ||
| Cash | 31,931 | 48,485 |
| Prepaid expenses | 3,658 | 12,977 |
| Receivables | - | 1,169 |
| Total assets | 35,589 | 62,631 |
| Liabilities and shareholders’ equity | ||
| Current liabilities | ||
| Accounts payable and accrued liabilities | 5,938 | 7,285 |
| Total liabilities | 5,938 | 7,285 |
| Shareholders’ equity | ||
| Share capital (note 3a) | 569,910 | 569,910 |
| Reserves (note 3d) | 65,618 | 65,618 |
| Deficit | (605,877) | (580,182) |
| Total shareholders’ equity | 29,651 | 55,346 |
| Total liabilities and shareholders’ equity | 35,589 | 62,631 |
Nature of operations and going concern (note 1)
Approved and authorized for issuance on behalf of the Board of Directors on December 11, 2024:
/s/ Daniela Freitas
Daniela Freitas, Director
/s/ Jorge Martinez
Jorge Martinez, Director
The accompanying notes are an integral part of these financial statements.
Shellron Capital Ltd.
Condensed Interim Statements of Operations and Comprehensive Loss (Unaudited)
(Expressed in Canadian Dollars)
Shellron
CAPITAL
| Three Months Ended | Six Months Ended | |||
|---|---|---|---|---|
| October 31, 2024 | ||||
| ($) | October 31, 2023 | |||
| ($) | October 31, 2024 | |||
| ($) | October 31, 2023 | |||
| ($) | ||||
| Expenses | ||||
| General and administration (note 4) | 3,311 | 17,952 | 9,855 | 24,095 |
| Professional fees | 10,917 | 10,885 | 11,122 | 21,283 |
| Transfer agent and filing fees | 3,655 | 5,916 | 5,081 | 6,856 |
| Travel | - | 3,839 | - | 3,839 |
| Total expenses | (17,883) | (38,592) | (26,058) | (56,073) |
| Interest income | 123 | 1,229 | 363 | 2,749 |
| Foreign exchange gain | - | 1,217 | - | 579 |
| Net loss and comprehensive loss for the period | (17,760) | (36,146) | (25,695) | (52,745) |
| Loss per share, basic and diluted | (0.00) | (0.00) | (0.00) | (0.01) |
| Weighted average shares outstanding | 8,539,000 | 8,539,000 | 8,539,000 | 8,539,000 |
The accompanying notes are an integral part of these financial statements.
Shellron Capital Ltd.
Condensed Interim Statements of Changes in Shareholders' Equity (Unaudited)
(Expressed in Canadian Dollars)
Shellron
CAPITAL
| Share Capital | Reserves ($) | Deficit ($) | Total ($) | ||
|---|---|---|---|---|---|
| Number of Shares | Amount ($) | ||||
| Balance, May 1, 2023 | 8,539,000 | 569,910 | 61,530 | (467,314) | 164,126 |
| Comprehensive loss for the period | - | - | - | (52,745) | (52,745) |
| Balance, October 31, 2023 | 8,539,000 | 569,910 | 61,530 | (520,059) | 111,381 |
| Balance, May 1, 2024 | 8,539,000 | 569,910 | 65,618 | (580,182) | 55,346 |
| Comprehensive loss for the period | - | - | - | (25,695) | (25,695) |
| Balance, October 31, 2024 | 8,539,000 | 569,910 | 65,618 | (605,877) | 29,651 |
The accompanying notes are an integral part of these financial statements.
Shellron Capital Ltd.
Condensed Interim Statements of Cash Flows (Unaudited)
(Expressed in Canadian Dollars)
Shellron
CAPITAL
| Three Months Ended | Six Months Ended | |||
|---|---|---|---|---|
| October 31, 2024 | ||||
| ($) | October 31, 2023 | |||
| ($) | October 31, 2024 | |||
| ($) | October 31, 2023 | |||
| ($) | ||||
| Operating Activities | ||||
| Net loss for the period | (17,760) | (36,146) | (25,695) | (52,745) |
| Changes in non-cash working capital: | ||||
| Receivables | - | (1,823) | 1,169 | (2,805) |
| Advances and prepaid expenses | 4,319 | (6,000) | 9,319 | (6,000) |
| Accounts payable and accrued liabilities | 2,331 | 4,190 | (1,347) | (2,679) |
| Cash used in operating activities | (11,110) | (39,779) | (16,554) | (64,229) |
| Investing Activities | ||||
| Interest income | - | 1,229 | - | 2,749 |
| Cash from investing activities | - | 1,229 | - | 2,749 |
| Decrease in cash | (11,110) | (38,550) | (16,554) | (61,480) |
| Cash, beginning of period | 43,041 | 131,909 | 48,485 | 154,839 |
| Cash, end of period | 31,931 | 93,359 | 31,931 | 93,359 |
The accompanying notes are an integral part of these financial statements.
Shellron Capital Ltd.
Notes to the Condensed Interim Financial Statements (Unaudited)
For the Six Months Ended October 31, 2024
(Expressed in Canadian Dollars, except where noted)
Shellron CAPITAL
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, BC, 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 six months ended October 31, 2024, the Company had no business operations and incurred negative cash flow from operations of $16,554 (2023 - $64,229). As at October 31, 2024, the Company had an accumulated deficit of $605,877 (April 30, 2024 - $580,182). 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 significant 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. Such adjustments could be material.
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, 2024. 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. Share Capital
(a) Common Shares
Authorized - unlimited common shares without par value.
As at October 31, 2024, the Company had 8,539,000 (April 30, 2024 - 8,539,000) common shares issued and outstanding.
(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.
Shellron Capital Ltd.
Notes to the Condensed Interim Financial Statements (Unaudited)
For the Six Months Ended October 31, 2024
(Expressed in Canadian Dollars, except where noted)
Shellron
CAPITAL
3. Share Capital – continued
The continuity of the Company's share options is as follows:
| Number of Options | Weighted Average Exercise Price ($) | |
|---|---|---|
| Balance, May 1, 2023 | 825,000 | 0.10 |
| Granted | 250,000 | 0.10 |
| Cancelled | (350,000) | 0.10 |
| Balance, April 30, 2024 | 725,000 | 0.10 |
| Cancelled | (100,000) | 0.10 |
| Balance, October 31, 2024 | 625,000 | 0.10 |
Additional information regarding the Company’s share options as at October 31, 2024, is as follows:
| Exercise Price ($) | Options Outstanding | Options Exercisable | ||
|---|---|---|---|---|
| Number of Options Outstanding | Weighted Average Remaining Contractual Life (Years) | Number of Options Exercisable | Weighted Average Remaining Contractual Life (Years) | |
| 0.10 | 375,000 | 2.06 | 375,000 | 2.06 |
| 0.10 | 250,000 | 4.18 | 250,000 | 4.18 |
| 0.10 | 625,000 | 2.91 | 625,000 | 2.91 |
The fair value of each share option is estimated on the date of grant using the Black-Scholes Option Pricing Model that uses the assumptions noted in the table below. Expected volatilities are based on historical volatility of the Company’s shares or an applicable comparable company, and other factors. The expected term of share options granted represents the period of time that share options granted are expected to be outstanding. The risk-free rate of periods within the contractual life of the share option is based on the Canadian government bond rate. Assumptions used for share options granted during fiscal 2024 are as follows:
| Grant Date | Number of Share Options | Expected Price Volatility | Risk Free Interest Rate | Expected Life (Years) | Expected Dividend Yield | Fair Value Per Option ($) | Total Fair Value ($) |
|---|---|---|---|---|---|---|---|
| January 5, 2024 | 250,000 | 95% | 3.27% | 5 | - | 0.016 | 4,088 |
(c) Loss per Share
| Three Months Ended | Six Months Ended | |||
|---|---|---|---|---|
| October 31, 2024 ($) | October 31, 2023 ($) | October 31, 2024 ($) | October 31, 2023 ($) | |
| Basic and diluted loss per share | (0.00) | (0.00) | (0.00) | (0.01) |
| Net loss for the period | (17,760) | (36,146) | (25,695) | (52,745) |
Shellron Capital Ltd.
Notes to the Condensed Interim Financial Statements (Unaudited)
For the Six Months Ended October 31, 2024
(Expressed in Canadian Dollars, except where noted)
Shellron CAPITAL
3. Share Capital – continued
| Three and Six Months Ended | ||
|---|---|---|
| October 31, 2024 | October 31, 2023 | |
| Shares outstanding, beginning of period | 8,539,000 | 8,539,000 |
| Basic weighted average number of shares outstanding | 8,539,000 | 8,539,000 |
| Effect of dilutive share options | - | - |
| Diluted weighted average number of shares outstanding | 8,539,000 | 8,539,000 |
As at October 31, 2024, there were 625,000 (October 31, 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.
4. Related Party Transactions
During the three and six months ended October 31, 2024, the Company incurred general and administration costs of $nil (October 31, 2023 - $22,000 and $16,000 respectively) to a company with common officers and directors.
5. Segmented Disclosure
The Company has one reportable business segment, being the completion of a Qualifying Transaction. All assets are held in Canada.
6. 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, 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.
Shellron Capital Ltd.
Notes to the Condensed Interim Financial Statements (Unaudited)
For the Six Months Ended October 31, 2024
(Expressed in Canadian Dollars, except where noted)
Shellron
CAPITAL
6. Financial Instruments and Risk Management
(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. As at October 31, 2024 and April 30, 2024, the Company is not exposed to significant foreign currency risk.
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 $2,500 on the statement of operations.
(ii) Interest Rate Risk
The Company does not have any interest bearing debt and is therefore not exposed to interest rate risk.
Fair Values
Fair value measurements are classified using a fair value hierarchy that reflects the significance of inputs used in making the measurements. The fair value hierarchy has the following levels:
- Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;
- Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
- Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The fair values of the Company’s financial instruments, which include cash, and accounts payable and accrued liabilities, approximate their carrying values due to the immediate or short-term maturity of these financial instruments.
| Financial Instrument | Measurement Method | Associated Risks | Fair value at October 31, 2024 ($) |
|---|---|---|---|
| Cash | FVTPL (Level 1) | Credit and currency | 31,931 |
| Accounts payable and accrued liabilities | Amortized cost | Currency | (5,938) |
| 25,993 |
7. 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.