Solid Impact Investments — Annual Report 2023

Aug 10, 2023

Solid Impact Investments Corp.

FINANCIAL STATEMENTS

For the Years Ended May 31, 2023 and 2022

(EXPRESSED IN CANADIAN DOLLARS)

Independent Auditor's Report

To the Shareholders of Solid Impact Investment Corp.

Opinion

We have audited the financial statements of Solid Impact Investments Corp. (the "Company"), which comprise the statements of financial position as at May 31, 2023 and 2022, and the statements of loss and comprehensive loss, changes in shareholders' equity and cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at May 31, 2023 and 2022, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards.

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 to the financial statements, which describes events or conditions that indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters, that in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Except for the matter described in the Material Uncertainty Related to Going Concern section, we have determined that there are no other key audit matters to communicate in our report.

Other Information

Management is responsible for the other information. The other information comprises the information included in Management's Discussion and Analysis.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We obtained Management's Discussion and Analysis prior to the date of this auditor's report. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor's report is Barry Hartley.

DALE MATHESON CARR-HILTON LABONTE LLP CHARTERED PROFESSIONAL ACCOUNTANTS Vancouver, BC

August 10, 2023

Solid Impact Investments Corp. Statements of Financial Position (Expressed in Canadian Dollars)

	Note	May 31,2023	May 31,2022
Assets
Current assets
Cash and cash equivalents		$213,390	$280,134
Total assets		$213,390	$280,134
Liabilities and Shareholders' EquityCurrent liabilities
Accounts Payable	7	$3,689	$15,365
Accrued liabilities		13,180	7,501
		16,869	22,866
Shareholders' Equity
Share capital	3	377,420	377,420
Reserve	3	64,729	64,729
Accumulated deficit		(245,628)	(184,881)
Total shareholders' Equity		196,521	257,268
Total liabilities and shareholders' Equity		$213,390	$280,134

Going concern (Note 1)

These financial statements were approved for issue by the Board of Directors on August 10, 2023 and signed on its behalf by:

Director Director

"Itamar David" "Meghan Brown"

The accompanying notes are an integral part of these financial statements

.

Solid Impact Investments Corp. Statements of Loss and Comprehensive Loss (Expressed in Canadian Dollars)

	Note	For the year endedMay 31, 2023	For the year endedMay 31, 2022
Expenses
Bank Charges		$284	$349
Share-based payment	3, 7	-	42,149
Finance Fees		-	36,500
Interest income		(671)	-
Filing and other fees		13,171	13,365
Professional fees	7	47,963	88,064
Total expenses		60,747	180,427
Loss and comprehensive loss		$(60,747)	$(180,427)
Basic and diluted loss per common share		$(0.01)	$(0.05)
Weighted average number of common
shares outstanding – basic and diluted		5,600,000	2,988,493

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

Solid Impact Investments Corp. Statements of Changes in Shareholders' Equity (Expressed in Canadian Dollars)

	SCaitahalrep
	Nubefmr oShares		Amntou	Shabes treoissdue	Reserve	Deficit	ToltaShaholde'rersEqityu
lan()BaM31,2021No3teceay,	1	$	-	$125,000	$-	$()4,454	$120,546
Shaissd(3)Noteresue	600,0005,		430,000	(12000)5,	-	-	300005,
Shalledrecance	(1)		-	-	-	-	-
haiss()SNo3tstereuance cos	-		()52,580	-	22,805	-	()30,000
Shabad p(No3)nttere-seayme	-		-	-	42,149	-	42,149
Nelosd cheivelosforhetts anomprensseary	-		-	-	-	(180,427)	(180,427)
lanBaM31,2022ceay,	5,600,000		377,420	-	64,297	()184,881	257,268
Nelosd cheivelosforhetts anomprenssyear	-		-	-	-	(60,747)	(60,747)
BalanM31,2023ceay,	5,600,000	$	377,420	$-	$64,297	$(245,628)	$196,521

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

	For the year endedMay 31, 2023			For the year endedMay 31, 2022
Cash flows from operating activities
Loss for the period	$	(60,747)	$	(180,427)
Change in non-cash working capital item
Share-based payment		-		42,149
Accounts payable and accrued liabilities		(5,997)		18,412
Net cash used by operating activities		(66,744)		(119,866)
Cash flows from financing activitiesProceeds from the issuance of shares, net of
issuance costs		-		275,000
Net cash provided by financing activities		-		275,000
Increase (decrease) in cashCash, beginning		(66,744)280,134		155,134125,000
Cash, ending	$	213,390	$	280,134

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

NOTE 1 – NATURE OF OPERATIONS AND GOING CONCERN

Solid Impact Investments Corp. (the "Company") was incorporated on March 15, 2021 under the Business Corporations Act (British Columbia). The Company is a capital pool company ("CPC") as defined in TSX Venture Exchange ("TSX-V") Policy 2.4. The principal business of the Company is the identification and evaluation of assets or business with a view to potentially acquire them or an interest therein by an option or any concurrent transaction ("Qualifying Transaction"). The purpose of such acquisition is to satisfy the related conditions of a Qualifying Transaction under the policies of the TSX-V.

On April 12, 2022, the Company completed its initial public offering (the "IPO") of 3,000,000 common shares at the price of $0.10 per common share. The common shares of the Company commenced trading on April 14, 2022 under the trading symbol SOLI.P. The head office, principal address and registered office of the Company are located at Suite 501-3292 Production Way, Burnaby, Canada.

The Company has incurred losses since inception and has an accumulated deficit of $245,628 as at May 31, 2023. The Company's ability to continue its operations and to realize its assets at their carrying values is dependent upon finding and completing a Qualifying Transaction, obtaining additional financing or maintaining continued support from its shareholders and creditors and generating profitable operations in the future. Although these financial statements have been prepared and presented on a going concern basis, the factors outlined above indicate the existence of a material uncertainty that my cast significant doubt about the ability of the Company to continue as a going concern, in which case this basis of presentation will not be appropriate. These financial statements do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying financial statements and such adjustments could be material.

NOTE 2 – STATEMENT OF COMPLIANCE AND SIGNIFICANT ACCOUNTING POLICIES

Statement of compliance

These financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and interpretations of the International Financial Reporting Interpretations Committee ("IFRIC").

Basis of presentation

These financial statements have been prepared on a 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, these financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

Share capital

Equity instruments are contracts that give a residual interest in the net assets of the Company. Financial instruments issued by the Company are classified as equity only to the extent that they do not meet the definition of a financial liability or financial asset. The Company's common shares are classified as equity instruments.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Share-based payments

The share option plan allows Company employees and consultants to acquire shares of the Company. The fair value of options granted is recognized as an employee or consultant expense with a corresponding increase in equity. An individual is classified as an employee when the individual is an employee for legal or tax purposes (direct employee) or provides services similar to those performed by a direct employee.

The fair value is measured at grant date and each tranche is recognized over the period during which the options vest. The fair value of the options granted is measured using the Black-Scholes Option Pricing Model taking into account the terms and conditions upon which the options were granted.

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 the fair value of the share-based payment. Otherwise, share-based payments are measured at the fair value of goods or services received.

Income tax

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

Deferred tax is recorded by providing for temporary differences, between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: goodwill not deductible for tax purposes; the initial recognition of assets or liabilities that affect neither accounting or taxable loss; nor differences relating to investments in subsidiaries to the extent that they will 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 date of the statement of financial position. 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. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

Loss per share

Basic loss per share is calculated using the weighted-average number of shares outstanding during the year. The diluted loss per share reflects the potential dilution of common share equivalents, such as outstanding stock options and share purchase warrants, in the weighted average number of common shares outstanding during the period, if dilutive.

Financial instruments

All financial assets are initially recorded at fair value and classified into one of three categories: fair value through profit or loss ("FVTPL"), fair value through other comprehensive income ("FVTOCI") and at amortized cost. All financial liabilities are initially recorded at fair value and classified as either

Financial instruments (continued)

FVTPL or other financial liabilities. The Company's financial instruments comprise of cash and accounts payable.

a) Financial assets

Classification and measurement

The Company classifies its financial assets in the following categories: FVTPL, FVTOCI or at amortized cost. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

The classification of debt instruments is driven by the business model for managing the financial assets and their contractual cash flow characteristics. Debt instruments are measured at amortized cost if the business model is to hold the instrument for collection of contractual cash flows and those cash flows are solely principal and interest. If the business model is not to hold the debt instrument, it is classified as FVTPL. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payments of principal and interest.

Equity instruments that are held for trading (including all equity derivative instruments) are classified as FVTPL, for other equity instruments, on the day of acquisition the Company can make an irrevocable election (on an instrument by-instrument basis) to designate them as at FVTOCI.

Financial assets at FVTPL

Financial assets carried at FVTPL are initially recorded at fair value and transaction costs are expensed in the statement of loss and comprehensive loss. Realized and unrealized gains and losses arising from changes in the fair value of the financial asset held at FVTPL are included in the statement of loss and comprehensive loss in the period in which they arise. Derivatives are also categorized as FVTPL unless they are designated as hedges.

Financial assets at FVTOCI

Investments in equity instruments at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently they are measured at fair value, with gains and losses arising from changes in fair value recognized in other comprehensive income. There is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment.

Financial assets at amortized cost

Financial assets at amortized cost are initially recognized at fair value and subsequently carried at amortized cost less any impairment. They are classified as current assets or non-current assets based on their maturity date.

Impairment of financial assets at amortized cost

The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the loss allowance for the financial asset is measured at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the financial asset has not increased significantly since initial recognition, the loss allowance is measured for the financial asset at an amount equal to twelve month expected credit losses.

Impairment losses on financial assets carried at amortized cost are reversed in subsequent periods if the amount of the loss decreases and the decrease can be objectively related to an event occurring after the impairment was recognized.

Derecognition of financial assets

Financial assets are derecognized when they mature or are sold, and substantially all the risks and rewards of ownership have been transferred. Gains and losses on derecognition of financial assets classified as FVTPL or amortized cost are recognized in the income statement. Gains or losses on financial assets classified as FVTOCI remain within accumulated other comprehensive income.

b) Financial liabilities

The Company classifies its financial liabilities into one of two categories as follows:

FVTPL - This category comprises derivatives and financial liabilities incurred principally for the purpose of selling or repurchasing in the near term. They are carried at fair value with changes in fair value recognized in profit or loss.

Other financial liabilities - This category consists of liabilities carried at amortized cost using the effective interest method. Accounts payable are included in this category. The Company derecognizes a financial liability when its contractual obligations are discharged, cancelled or expire.

Derecognition of financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognizes a financial liability when the terms of the liability are modified such that the terms and / or cash flows of the modified instrument are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value. Gains and losses on derecognition are generally recognized in profit or loss.

Significant accounting estimates and judgements

The preparation of the financial statements in conformity with IFRS requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported revenues and expenses during the year. Although management uses historical experience and its best knowledge of the amount, events or actions to form the basis for judgments and estimates, actual results may differ from these estimates.

a) Estimates

The most significant accounts that require estimates as the basis for determining the stated amounts are as follows:

Deferred income tax

The Company recognizes the deferred tax benefit of deferred tax assets to the extent their 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 tax assets.

Significant accounting estimates and judgements (continued)

b) Judgements

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

Going Concern

The assumption that the Company is a going concern and will continue in operation for the foreseeable future and at least one year.

Income taxes

In assessing the probability of realizing income tax assets, management makes estimates related to expectations of future taxable income, applicable tax opportunities, expected timing of reversals of existing temporary differences and the likelihood that tax positions taken will be sustained upon examination by applicable tax authorities. In making its assessments, management gives additional weight to positive and negative evidence that can be objectively verified.

NOTE 3 – SHARE CAPITAL

Authorized share capital

Unlimited number of common shares without par value.

Issued share capital

The Company has 5,600,000 common shares issued and outstanding as at May 31, 2023 (May 31, 2022 – 5,600,000).

During the year ended May 31, 2022 the Company issued 2,600,000 common shares at a price of $0.05 per share for gross proceeds of $130,000, all of which were issued to the directors and officers of the Company. $125,000 of the gross proceeds had been received in 2021. All of the 2,600,000 common shares are held in escrow.

On April 12, 2022, the Company announced the completion of its IPO of 3,000,000 common shares at the price of $0.10 per common share for gross proceeds of $300,000. A cash commission of $30,000 was paid from the gross proceeds and were classified as share issuance costs. In addition, the Company issued one non-transferable warrants to acquire up to 300,000 warrants at a price of $0.10 per share for a period of 60 months from the date the Company's common shares were listed on the TSX-V (April 14, 2022), The fair value of the warrants of $22,580 was estimated using the Black-Scholes Option Pricing Model with the following assumptions: no expected dividends to be paid; volatility of 100% based on industry standard for comparable companies without a historical volatility; risk-free interest rate of 2.52%; and expected life of 5 years.

NOTE 3 – SHARE CAPITAL (continued)

Stock Options

As at May 31, 2023, the Company has the following stock options outstanding:

	May 31, 2023
	Number ofStock options	Weighted averageexercise price $
Outstanding, beginning	560,000	0.10
Issued	-	-
Outstanding, ending	560,000	0.10
Exercisable, ending	560,000	0.10

		Weighted averageremaining
	Options	contractual life (in
Expiry date	outstanding	years)
April 12, 2027	560,000	3.87

During the year ended May 31, 2022, the Company adopted a stock option plan providing for the grant to the Company's officers, directors, employees and permitted consultants and management company employees of options to purchase common shares of the Company. Under the Stock Option Plan, the Company may grant options to purchase up to 10% of the issued and outstanding shares of the Company.

On April 12, 2022, the Company granted incentive stock options to its directors and officers to acquire up to an aggregate of 560,000 shares with an exercise price of $0.10 per share and expiry date of April 12, 2027. The fair value of the options was estimated using the Black-Scholes Option Pricing Model using the following assumptions: no expected dividends to be paid; volatility of 100% based on comparable companies without a historical volatility; risk-free interest rate of 2.52%; and expected life of 5 years. During the year ended May 31, 2022, the Company recognized $42,149 of share-based payment expense.

Warrants

As at May 31, 2023, the Company has the following warrants outstanding:

	May 31, 2023
	Number ofWarrants	Weighted averageexercise price $
Outstanding, beginning	300,000	0.10
Issued	-	-
Outstanding, ending	300,000	0.10

Reserve

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

NOTE 4 – CAPITAL MANAGEMENT

The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern and to maintain a flexible capital structure which will allow it to pursue the completion of a Qualifying Transaction as defined in TSX-V Policy 2.4. Therefore, the Company monitors the level of risk incurred in its expenditures relative to its capital structure.

The Company considers its capital structure to include all components of shareholders' equity. The Company monitors its capital structure and makes adjustments in light of changes in economic conditions and the risk characteristics of the potential underlying assets. To maintain or adjust the capital structure, the Company may issue new equity if available on favorable terms and approved by the TSX-V.

As a CPC, the Company will be subject to externally imposed capital requirements as outlined in the TSX-V Policy 2.4 and summarized below:

• i. No salary, consulting, management fees or similar remuneration of any kind may be paid directly or indirectly to a related party of the Company or a related party of a Qualifying Transaction;
• ii. Gross proceeds realized from the sale of all securities issued by a CPC may only be used to identify and evaluate assets or businesses and obtain shareholder approval for a Qualifying Transaction;
• iii. No more than $3,000 per month may be used for purposes other than to identify and evaluate a Qualifying Transaction; and
• iv. After the completion of its IPO and until the completion of a Qualifying Transaction, a CPC may not issue any securities unless written acceptance of the TSX-V is obtained before the issuance of the securities.

There were no changes in the Company's approach to capital management during the year ended May 31, 2023.

NOTE 5 – FINANCIAL INSTRUMENTS

a) Fair value

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

Level 3 – Inputs that are not based on observable market data.

The fair values of the Company's cash and cash equivalents approximate their carrying amounts due to the short-term nature of these instruments. Cash and cash equivalents are measured using level 1 inputs.

b) Financial risk management

Credit risk

Credit risk is the risk of an unexpected loss if a third party to a financial instrument fails to meet its contractual obligations. The Company has cash that is subject to credit risk. The cash is kept in a bank with a high credit rating. Credit risk is assessed as low.

NOTE 5 – FINANCIAL INSTRUMENTS (continued)

Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in raising funds to meet commitments associated with financial instruments. The Company plans to manage liquidity risk by maintaining adequate cash balances to meet liabilities as they become due.

Aa at May 31, 2023, the Company had $213,390 cash held on hand and has accrued liabilities of $16,869. All liabilities are current. Liquidity risk is assessed as high.

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The Company's financial asset is not exposed to interest rate risk due to their short-term nature and maturity. The Company is not exposed to any significant interest rate risk.

Foreign currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The Company is not exposed to foreign currency risk.

NOTE 6– INCOME TAXES

A reconciliation of the Company's expected income tax recovery to actual income tax recovery is as follows:

	For the Yearended May 31,2023	For the Yearended May 31,2022
Net loss for the period	$(60,747)	$(180,427)
Statutory income tax rate	27%	27%
Expected income tax recovery	(16,402)	(48,715)
Unrecognized deductible temporary
differences and other	-	3,280
Change in valuation allowance	16,402	45,435
	$-	$-

	For the Yearended May 31,2023	For the Yearended May 31,2022
Deferred tax assets
Non-capital carry forwards	$58,180	40,158
Share issue costs	4,860	6,480
Total unrecognized deferred tax assets	(63,040)	(46,638)
Income tax recovery	$-	-

The Company has $215,479 in non-capital losses carried forward for tax purposes, which begin to expire in 2042, to be offset against future business income and business capital gains.

NOTE 7– RELATED PARTY TRANSACTIONS

During the year ended May 31, 2023, the Company had the following transactions with related parties:

• The company owed $3,181 (2022: $nil) and paid $14,700 (2022: $10,177) in consulting fees to a company owned by one of its officer; the amount owing is unsecured and non-interest bearing; and
• The Company incurred share-based payments of $nil (2022: $42,149) related to stock options granted to officers and directors of the Company.

NOTE 8– SUBSEQUENT EVENTS

On July 18, 2023 the Company signed a Letter Agreement with Allied Critical Metals Corp.("ACM") which provides the general terms and conditions of the reverse takeover (the "Transaction") of the Company by ACM, pursuant to the policies of the TSX-V.

As part of the Transaction, ACM agreed to acquire (the "Acquisition") the Portuguese company, Pan Metals Unipessola Limitada ("PanMetals") as the 90% beneficial owner of two Portuguese tungsten projects (the "Tungsten Projects"): the Borralha Tungsten Project ("Borralha") and the Vila Verde Tungsten Project ("Vila Verde"). Upon completion of the Acquisition, ACM will own 90% ownership of the Tungsten Projects with the right to acquire the remaining 10%.

It is intended that the Company and ACM will complete the Transaction by way of a proposed business combination that would result in the reverse takeover of the Company by ACM, subject to ACM successfully completing the concurrent private placement at a price per unit of $0.25 for gross proceeds of $3,000,000 up to $5,000,000 and other conditions.

Under the Transaction, ACM will change its name to "ACM Holdings Ltd." and the Company will change its name to "Allied Critical Metals Corp." as the resulting issuer which will continue the business of ACM with ACM as a wholly owned subsidiary.

In accordance with TSX-V policies, the Company's common shares have been halted from trading and will remain so until completion of the Qualifying Transaction or termination of the Letter Agreement or Definitive Agreement.