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TenX Protocols Inc. — Management Reports 2026
Jan 28, 2026
48208_rns_2026-01-28_ed490e33-b1eb-44f8-a1e8-2236452b4120.pdf
Management Reports
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Management's Discussion and Analysis
TenX Protocols Inc. (formerly, locaste Ventures Inc.) (A Capital Pool Company)
For the Fiscal Years Ended September 30, 2025 and 2024
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TenX Protocols Inc. (formerly, locaste Ventures Inc.)
Management's Discussion and Analysis
For the Fiscal Years Ended September 30, 2025 and 2024
INTRODUCTION
The following management discussion and analysis ("MD&A") of the operation, results and financial condition of TenX Protocols Inc. (formerly, locaste Ventures Inc.) (the "Corporation") should be read in conjunction with the audited financial statements and accompanying notes ("Financial Statements") of the Corporation for the fiscal years ended September 30, 2025 and 2024. The Financial Statements have been prepared using accounting policies in compliance with IFRS® Accounting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and Interpretations of the International Financial Reporting Interpretations Committee ("IFRIC").
The effective date of this MD&A is January 28, 2026. All monetary amounts are reported in Canadian dollars unless otherwise indicated.
For further information on the Corporation reference should be made to the Corporation's public filings which are available on SEDAR+.
FORWARD LOOKING STATEMENTS
This MD&A may contain "forward looking statements" that reflect the Corporation's current expectations and projections about its future results, including without limitation, the acquisition of assets to qualify as a Qualifying Transaction ("QT") or the possible raising of additional capital. When used in this MD&A, words such as "estimate", "intend", "expect", "anticipate" and similar expressions are intended to identify forward-looking statements, which, by their very nature, are not guarantees of the Corporation's future operational or financial performance, and are subject to risks and uncertainties and other factors that could cause the Corporation's actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this MD&A or as of the date otherwise specifically indicate herein. Due to risks and uncertainties, including the risks and uncertainties identified under the heading "Risks and Uncertainties", actual events may differ materially from current expectations. The Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise except as required by securities regulations.
CORPORATION OVERVIEW
The Corporation was incorporated under the Business Corporations Act (British Columbia) on July 6, 2021. The Corporation was formed for the primary purpose of completing an initial public offering ("IPO") and listing on the TSX Venture Exchange ("Exchange") as a Capital Pool Corporation ("CPC") as defined in Policy 2.4 of the Exchange. The principal business of the Corporation is the identification and evaluation of assets or businesses with a view to completing a QT, as defined under the policies of the Exchange.
The registered and records office of the Corporation is located at 1200 Waterfront Centre, 200 Burrard Street, Vancouver, British Columbia, V7X 1T2. The head office of the Corporation is located at Suite 200, 305 10th Avenue SE, Calgary, Alberta T2G 0W2.
On March 19, 2025, the Corporation and TenX Protocols Inc. ("TenX") entered into a non-binding Letter of Intent, setting out the principal, non-binding terms upon which the parties would explore the viability of completing a business combination or other similarly structured transaction, which, if completed, will result in a reverse take-over of the Corporation by the shareholders of TenX and constitute an arm's length Qualifying Transaction for the Corporation.
TenX Protocols Inc. (formerly, locaste Ventures Inc.)
Management's Discussion and Analysis
For the Fiscal Years Ended September 30, 2025 and 2024
On August 18, 2025, the Corporation entered into a definitive business combination agreement with TenX for a proposed reverse takeover by way of a three-cornered amalgamation. Prior to closing, the Corporation is expected to consolidate its common shares on a 7.5-for-1 basis and change its name to “TenX Protocols Inc.” (or another name designated by TenX, the “Resulting Issuer”). Each TenX common share is expected to be exchanged for one post-consolidation locaste common share. Completion of the transaction is subject to TSXV approval and other customary conditions.
On December 5, 2025, the Corporation completed its previously announced “Qualifying Transaction” (as defined by TSX Venture Exchange (“TSXV”) Policy 2.4) involving a three-cornered amalgamation whereby TenX Labs Inc. (formerly, TenX Protocols Inc.), a private Ontario corporation (“TenX”), was amalgamated with a wholly-owned subsidiary of the Corporation (the “Qualifying Transaction”).
Immediately prior to the closing of the Qualifying Transaction, the Corporation (i) consolidated its issued and outstanding common shares on a 7.5 to 1 basis; and (ii) changed its name from “locaste Ventures Inc.” to “TenX Protocols Inc.”
In connection with the completion of the Qualifying Transaction, the Corporation also completed the conversion and exchange of subscription receipts issued in connection with TenX’s previously announced brokered private placement and concurrent non-brokered private placement and issued 39,904,965 commons shares for aggregate gross proceeds of approximately $29.9 million (consisting of approximately $6.36 million in cash and approximately $23.56 million in digital assets).
On December 10, 2025, the Corporation’s Common Shares began trading on the TSX Venture Exchange under the ticker symbol “TNX”.
OVERALL PERFORMANCE
The net loss and comprehensive loss for the fiscal year ended September 30, 2025 was $128,613 compared to $97,064 for the prior fiscal year. The expenses comprised of professional and administrative fees.
SELECTED FINANCIAL INFORMATION
The following table provides a brief summary of the Corporation’s financial operations for the fiscal years ended September 30, 2025 and 2024:
| Fiscal years ended September 30, | ||
|---|---|---|
| 2025 | 2024 | |
| Expenses | $128,613 | $97,064 |
| Net loss and comprehensive loss | $(128,613) | $(97,064) |
| Net loss per share – basic and diluted | $(0.09) | $(0.06) |
TenX Protocols Inc. (formerly, locaste Ventures Inc.)
Management's Discussion and Analysis
For the Fiscal Years Ended September 30, 2025 and 2024
SELECTED FINANCIAL INFORMATION – continued
| As at September 30, | ||
|---|---|---|
| 2025 | 2024 | |
| Total assets | $266,210 | $328,149 |
| Total liabilities | $96,608 | $29,934 |
| Cash dividends declared per share | $nil | $nil |
This information has been prepared in accordance with IFRS and is presented in Canadian dollars, which is the functional currency of the Corporation.
DISCUSSION OF OPERATIONS
The Corporation will not generate revenues until after a QT is completed.
Professional and administrative expenses for the fiscal year ended September 30, 2025 were $128,613 compared to $97,064 for the same period in the prior year. Overall, the fiscal year ended September 30, 2025 had higher legal and filing fees than the fiscal year ended September 30, 2024 as a result of the QT that was ultimately completed on December 5, 2025.
SUMMARY OF QUARTERLY RESULTS
The following is a summary of the Corporation's financial results for the eight completed quarters:
| Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | |
|---|---|---|---|---|
| Net loss and comprehensive loss | ($85,353) | ($25,669) | ($13,907) | ($3,684) |
| Basic and diluted loss per share | ($0.06) | ($0.02) | ($0.01) | - |
| Q4 2024 | Q3 2024 | Q2 2024 | Q1 2024 | |
| Net income (loss) and comprehensive income (loss) | ($20,622) | ($29,936) | ($14,752) | ($31,754) |
| Basic and diluted loss per share | ($0.01) | ($0.02) | ($0.01) | ($0.02) |
LIQUIDITY AND CAPITAL RESOURCES
As at September 30, 2025, the Corporation had working capital of $169,602.
As at September 30, 2025, the shareholders' equity of $169,602 consists of share capital of $645,711, options reserve of $88,505, and accumulated deficit of $564,614.
TenX Protocols Inc. (formerly, locaste Ventures Inc.)
Management's Discussion and Analysis
For the Fiscal Years Ended September 30, 2025 and 2024
LIQUIDITY AND CAPITAL RESOURCES – continued
On November 10, 2021, the Corporation completed its IPO. In accordance with Policy 2.4 of the Exchange, the proceeds raised from the sale of securities may only be used to identify and evaluate assets or businesses for future investment, with the exception that up to $3,000 per month may be used for reasonable general and administrative expenses of the Corporation. These restrictions apply until completion of a QT by the Corporation. The Corporation is required to complete its QT on or before 60 months from the date the Corporation received regulatory approval to list its common shares on the Exchange. There is no assurance that the Corporation will be able to identify a suitable business, asset or property as its QT. Furthermore, even if a QT is identified, there can be no assurance that the Corporation will be able to complete the transaction. If the Corporation identifies a QT, it may be necessary for the Corporation to seek additional financing. Capital markets may not always be receptive to offerings of new equity from treasury or debt, whether by way of private placements or public offerings, under terms that would be acceptable for the Corporation.
OFF BALANCE SHEET TRANSACTIONS
The Corporation does not have any off-balance sheet arrangements as at September 30, 2025 or as of the date of this MD&A.
RELATED PARTY TRANSACTIONS
There was no remuneration paid to key management personnel and no other related party transactions during the fiscal years ended September 30, 2025 and 2024.
CRITICAL ACCOUNTING ESTIMATES
Use of Judgments and Estimates
The preparation of these financial statements in conformity with IFRS requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the period. It also requires management to exercise its judgment in the processing of applying the Corporation's accounting policies. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Significant areas requiring the use of estimates and judgments include the recoverability of unrecognized deferred income tax assets and the fair value of share-based compensation.
CHANGES IN ACCOUNTING POLICIES
The Corporation has not changed its accounting policies during the fiscal year ended September 30, 2025. A detailed summary of all the Corporation's material accounting policies is included in the notes to the audited financial statements for the fiscal years ended September 30, 2025 and 2024.
TenX Protocols Inc. (formerly, locaste Ventures Inc.)
Management's Discussion and Analysis
For the Fiscal Years Ended September 30, 2025 and 2024
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Capital Management
The Corporation's objective when managing capital is to maintain its ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders. The Corporation includes equity, comprised of share capital, options reserve, and accumulated deficit, in the definition of capital.
The Corporation's primary objective with respect to its capital management is to ensure that it has sufficient cash resources to fund the identification and evaluation of potential acquisitions. To secure the additional capital necessary to pursue these plans, the Corporation may attempt to raise additional funds through the issuance of equity or by securing strategic partners.
The proceeds raised from the issuance of share capital may only be used to identify and evaluate assets or businesses for future investment, with the exception that up to $3,000 per month may be used for reasonable general and administrative expenses of the Corporation. These restrictions apply until completion of a QT by the Corporation as defined under the policies of the Exchange.
Risk Disclosures and Fair Values
The Corporation's financial instruments carried at amortized cost consist of accounts payable and accrued liabilities, which approximate fair value due to the relatively short-term maturity of the instruments. It is management's opinion that the Corporation is not exposed to significant interest, currency or credit risks arising from these financial instruments.
FINANCIAL INSTRUMENTS
Recognition
The Corporation recognizes financial assets and financial liabilities on the date the Corporation becomes a party to the contractual provisions of the instruments.
Classification
The Corporation classifies its financial assets and financial liabilities in the following measurement categories: i) those to be measured subsequently at fair value (either through other comprehensive income or through profit or loss, and ii) those to be measured at amortized cost. The classification of financial assets depends on the business model for managing the financial assets and the contractual terms of the cash flows. Financial liabilities are classified as those to be measured at amortized cost unless they are designated as those to be measured subsequently at fair value through profit or loss (irrevocable election at the time of recognition).
For assets and liabilities measured at fair value, gains and losses are either recorded in profit or loss or other comprehensive income or loss.
The Corporation reclassifies financial assets when and only when its business model for managing those assets changes. Financial liabilities are not reclassified.
The Corporation has implemented the following classifications:
Cash is classified as an asset at fair value and any period change in fair value is recorded in profit or loss.
Accounts payable and accrued liabilities are classified as other financial liabilities and measured at amortized cost using the effective interest rate method.
TenX Protocols Inc. (formerly, locaste Ventures Inc.)
Management's Discussion and Analysis
For the Fiscal Years Ended September 30, 2025 and 2024
FINANCIAL INSTRUMENTS – continued
Measurement
All financial instruments are required to be measured at fair value on initial recognition, plus, in case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability. Transaction costs of financial assets and financial liabilities carried at FVTPL are expensed in profit or loss.
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 or principal and interest on the principal outstanding are generally measured at amortized cost at the end of the subsequent accounting periods. All other financial assets including equity investments are measured at their fair values at the end of subsequent accounting periods, with any changes taken through profit and loss or other comprehensive income (irrevocable election at the time of recognition).
Additional fair value measurement disclosure includes classification of financial instrument fair values in a fair value hierarchy comprising three levels reflecting the significance of the inputs used in making the measurements which are as follows:
Level 1: Valuations based on quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: Valuations based on directly or indirectly observable inputs in active markets for similar assets or liabilities, other than Level 1 prices, such as quoted interest or currency exchange rates; and
Level 3: Valuations based on significant inputs that are not derived from observable market data, such as discounted cash flow methodologies based on internal cash flow forecasts.
Cash is a level 1 financial instrument measured at fair value on the statements of financial position.
DISCLOSURE OF OUTSTANDING SHARE DATA
Authorized share capital: Unlimited common shares without nominal or par value and unlimited preferred shares.
Issued and outstanding as at September 30, 2025 and the date of this MD&A: 1,494,034 common shares, 12,632 Agent's Options, and 110,000 stock options to officers and directors of the Corporation.
The following table summarizes the maximum number of common shares outstanding as at September 30, 2025 and as of the date of this MD&A if all outstanding Agents' Options and Stock Options were converted to common shares:
Authorized - Unlimited Common Shares
| September 30, 2025 | As at the date of this MD&A | |
|---|---|---|
| Common shares issued | 1,494,034 | 62,638,731 |
| Warrants to purchase common shares | - | 19,952,346 |
| Stock options to purchase common shares | 110,000 | 470,000 |
| Agent’s Options to purchase common shares | 12,632 | 12,632 |
| Total maximum number of common shares | 1,616,666 | 1,616,666 |
TenX Protocols Inc. (formerly, locaste Ventures Inc.)
Management's Discussion and Analysis
For the Fiscal Years Ended September 30, 2025 and 2024
Escrowed Common Shares
Upon completion of the Corporation's initial public offering, 1,066,666 of the issued and outstanding common shares will be held in escrow pursuant to the requirements of the Exchange. Twenty five percent (25%) of the escrowed common shares will be released from escrow on the issuance of the Final Exchange Bulletin (as defined in the policies of the Exchange) (the "Initial Release") and an additional twenty five percent (25%) will be released on each of the dates which are 6 months, 12 months, and 18 months following the Initial Release.
All common shares acquired on exercise of stock options granted to directors and officers of the Corporation prior to completion of the QT must also be deposited in escrow until the Final Exchange Bulletin is issued.
All common shares acquired in the secondary market prior to the completion of a QT by a Control Person, as defined in the policies of the Exchange, are required to be deposited in escrow. Subject to certain permitted exemptions, all securities of the Corporation held by principals of the resulting issuer will also be subject to escrow.
LOSS PER SHARE
Basic loss per share is computed by dividing the net loss applicable to common shares by the weighted average number of common shares outstanding for the relevant period.
Diluted loss per share is computed by dividing the net loss applicable to common shares by the sum of the weighted average number of common shares issued and outstanding and all additional common shares that would have been outstanding if potentially dilutive instruments were converted. The diluted loss per share has not been presented as it would be anti-dilutive.
RISKS AND UNCERTAINTIES
The Corporation's financial performance is likely to be subject to the following risks and uncertainties:
- The Corporation has not commenced commercial operations, has no business or assets other than cash. The Corporation has no history of earnings, will not generate earnings to pay dividends until at least after the completion of the QT and does not intend to pay dividends in the foreseeable future.
- Until completion of the QT, the Corporation is not permitted to carry on any business other than the identification and evaluation of potential QTs.
- The Corporation only has limited funds with which to identify and evaluate potential QTs and there can be no assurance that the Corporation will be able to identify or complete a suitable QT.
- If the Corporation fails to identify a business or assets that warrant acquisition or participation within the time limits set under the policies of the Exchange, the Exchange may de-list the Corporation's common shares from trading.
- If a QT is completed, there can be no assurance that an active and liquid market for the Corporation's common shares will develop and investors may find it difficult to resell the Common Shares.
- There can be no assurance that the Corporation will be able to obtain additional financing in the future on terms acceptable to the Corporation or at all.
- The Corporation's success depends to a certain degree upon key members for the management. It is expected that these individuals will be a significant factor to growth and success of the Corporation. The loss of the service of members of the management team or certain key employees could have a material adverse effect on the Corporation.