Turnium Technology Group Inc. — Audit Report / Information 2021

Jan 29, 2022

RMR SCIENCE TECHNOLOGIES INC.

Financial Statements

For the years ended September 30, 2021 and 2020

(Expressed in Canadian Dollars)

INDEPENDENT AUDITOR’S REPORT

To the Shareholders of RMR Science Technologies Inc.

Opinion

We have audited the accompanying financial statements of RMR Science Technologies Inc. (the “Company”), which comprise the statements of financial position as at September 30, 2021 and 2020, and the statements of loss and comprehensive loss, shareholders’ equity (deficiency), and cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, these financial statements present fairly, in all material respects, the financial position of the Company as at September 30, 2021 and 2020, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards (“IFRS”).

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 in our audit is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 of the financial statements, which indicates that the Company has an accumulated deficit of $639,687. In order to continue as a going concern and meet its corporate objectives, the Company will require additional financing through debt or equity issuances or other available means. There is no assurance that the Company will be able to obtain adequate financing in the future or that such financing will be on terms advantageous to the Company. As stated in Note 1, these events and conditions indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Other Information

Management is responsible for the other information. The other information obtained at the date of this auditor's report includes 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 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 IFRS, 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.

The engagement partner on the audit resulting in this independent auditor’s report is Catherine Tai.

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Vancouver, Canada January 28, 2022

Chartered Professional Accountants

RMR Science Technologies Inc. Statements of Financial Position

(Expressed in Canadian Dollars)

RMR Science Technologies Inc. Statements of Financial Position (Expressed in Canadian Dollars)
		September 30,		September 30,
	Notes	2021		2020
		$		$
ASSETS
Current
Cash	5		84,208		115,865
Accounts receivable			1,811		1,237
Prepaid expenses			2,167		9,346
Total assets			88,186		126,448
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Accounts payable and accrued liabilities	6		113,192		178,851
SHAREHOLDERS' DEFICIENCY
Share capital	7		537,236		537,236
Share subscriptions received	7		25,000		-
Option reserve			52,445		52,445
Deficit		(639,687)			(642,084)
Total shareholders' deficiency			(25,006)		(52,403)
Total liabilities and shareholders' equity (deficiency)			88,186		126,448
Nature of operations – Note 1
Proposed transaction – Note 2
Subsequent event – Note 14
Approved on behalf of the Board:

__ ___ ______ _ Director Director	___

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

RMR Science Technologies Inc.

Statements of Income (loss) and Comprehensive Income (loss)

(Expressed in Canadian Dollars)

(Expressed in Canadian Dollars)
		For the Years Ended
		September 30,
	Notes	2021	2020
		$	$
General and administrative expenses
Bank service charges		909	490
General office and administration		2,370	1,169
Professional fees		80,278	23,166
Transaction costs		-	25,000
Transfer agent,listingand filingfees		21,614	10,639
		(105,171)	(60,464)
Gain on settlement of debt	10	107,568	-
Net income (loss) and comprehensive income (loss) for the
year		2,397	(60,464)
Basic and diluted earnings (loss) per common share		0.00	(0.01)
Weighted average number of common shares outstanding –
basic and diluted		7,735,775	7,735,775

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

RMR Science Technologies Inc. Statements of Shareholders' Equity (Deficiency) (Expressed in Canadian Dollars)

(Expressed in Canadian Dollars)
	Common Shares Total Number of Share Option Shareholders ' Shares Amount Subscriptions Received Reserve Deficit Equity (Deficiency)
	$ $ $ $ $
Balance, September 30, 2019 Fair value of agent’s options expired Net loss for theyear	7,735,775 519,848 - 69,833 (581,620) 8,061 - 17,388 - (17,388) - - - - - - (60,464) (299,792)
Balance, September 30, 2020 Share subscriptions received (Note 7) Net income for theyear	7,735,775 537,236 52,445 (642,084) (52,403) - 25,000 - - 25,000 - - - 2,397 2,397
Balance, September 30, 2021	7,735,775 537,236 25,000 52,445 (639,687) (25,006)

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

RMR Science Technologies Inc. Statements of Cash Flow

(Expressed in Canadian Dollars)

(Expressed in Canadian Dollars)
	For the Year Ended
	September 30,
	2021	2020
	$	$
Cash provided by (used in):
Operating activities:
Net income (loss) for the year	2,397	(60,464)
Items not involving cash:
Gain on extinguishment of debt	(107,568)	-
Changes in non-cash working capital:
Prepaid expenses	7,179	22,725
Accounts receivable	(574)	2,111
Accountspayable and accrued liabilities	41,909	17,736
	(56,657)	(17,892)
Financing activities:
Share subscriptions received(Note 7)	25,000	-
	25,000	-
Net change in cash	(31,657)	(17,892)
Cash,beginningofyear	115,865	133,757
Cash, end ofyear	84,208	115,865

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

RMR Science Technologies Inc. Notes to the Financial Statements For the years ended September 30, 2021 and 2020 (Expressed in Canadian Dollars)

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1. Nature of operations

RMR Science Technologies Inc. (“RMR” or the “Company”) was incorporated on October 17, 2017, by Certificate of Incorporation issued pursuant to the provisions of the Business Corporations Act (British Columbia). The Company is classified as a Capital Pool Company as defined in the TSX Venture Exchange (“TSXV”) Policy 2.4.

The registered and records office of the Company is located at 1200 Waterfront Centre, 200 Burrard Street, Vancouver, British Columbia V7X 1T2. The head office is located at 4 – 3300 157A St., Surrey, British Columbia, V3Z 2P2.

The principal business of the Company will be the identification and evaluation of assets or businesses with an intent to completing a qualifying transaction (“Qualifying Transaction”).

On April 14, 2018, the Company signed a letter of intent (”LOI”) with cannÖgen Biosciences, Inc. (“cannÖgen”), a privately held corporation existing under the laws of the state of Nevada, with respect to a proposed business combination between the Company and cannÖgen. On May 12[th] 2021, cannÖgen notified RMR that due to the delays, it has decided not to pursue with the propose business combination.

As outlined in Note 2, the Company identified a new proposed transaction.

In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, have adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or results of operations at this time.

The Company’s continuing operations as intended are dependent upon its ability to identify, evaluate and negotiate an acquisition of, a participation in or an interest in properties, assets or businesses. Such an acquisition will be subject to regulatory approval and may be subject to shareholder approval. These financial statements have been prepared under the assumption of a going concern, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. As at September 30, 2021, the Company has an accumulated deficit of $639,687 (September 30, 2020: $642,084). In order to continue as a going concern and meet its corporate objectives, the Company will require additional financing through debt or equity issuances or other available means. There is no assurance that the Company will be able to obtain adequate financing in the future or that such financing will be on terms advantageous to the Company. These material uncertainties may cast significant doubt on the Company’s ability to continue as a going concern.

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RMR Science Technologies Inc. Notes to the Financial Statements For the years ended September 30, 2021 and 2020 (Expressed in Canadian Dollars)

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2. Proposed transaction

On August 9, 2021, the Company entered into an arm’s length Letter of Intent (“Turnium LOI”) with Turnium Technology Group, Inc. (“TTGI”). Pursuant to the Turnium LOI, the Company will, subject to execution of definitive agreements, effect a business combination (the “Business Combination”) which will result in the Company owning all of the issued and outstanding shares of TTGI. The proposed transaction is intended to be a QT of the Company pursuant to TSXV Policy 2.4, and on closing, the resulting issuer will be a technology issuer under TSXV policies.

Pursuant to the Business Combination, shareholders of TTGI will receive five common shares of the Company for each common share of TTGI, including common shares issued by TTGI pursuant to the the Bridge Financing and Concurrent Financing (both as hereinafter defined). TTGI currently has 53,832,143 common shares issued and outstanding.

TTGI is raising up to $1,500,000 (the “Bridge Financing”) through the issuance of up to 3,125,000 units at a price of $0.48 per unit, each unit consisting of one common share and one-half common share purchase warrant, each whole warrant entitling the holder to purchase one common share at a price of $0.72 per share on or before December 31, 2022.

TTGI also intends to raise up to $10,000,000 (the “Concurrent Financing”) through the issuance of up to 17,857,143 subscription receipts at a price of $0.56 per subscription receipt. Each subscription receipt will automatically convert into one unit of TTGI immediately prior to closing of the Business Combination. Each unit will consist of one common share and one-half of one common share purchase warrant, each warrant entitling the holder to purchase one common share at a price of $0.75 per share for a period of two years from closing of the Business Combination. Based on the exchange ratio of five Company common shares for each TTGI common share, on closing of the Business Combination an aggregate of 89,285,715 common shares of the Company and 44,642,857 share purchase warrants of the Company would be issued to subscribers under the Concurrent Financing.

On closing of the Business Combination, the Company intends to grant new options to directors, officers, employees and consultants entitling them to purchase up to 1,020,000 common shares at a price of $0.10 per share on or before March 15, 2023 and 1,000,000 common shares at a price of $0.10 per share for a period of five years from closing of the Business Combination.

The Company intends to raise up to $200,000 (the “Company Financing”) through the issuance of 2,500,000 common shares at a price of $0.08 per share.

TTGI has agreed to pay the expenses incurred by the Company in connection with the Business Combination up to a maximum of $150,000 if TTGI terminates the Turnium LOI in order to enter into a superior proposal.

TTGI’s obligation to close the Business Combination is subject to the following conditions precedent for its benefit:

• The Company Financing completing on or before the expiration of thirty business days from August 9, 2021 (completed October, 2021);

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RMR Science Technologies Inc. Notes to the Financial Statements For the years ended September 30, 2021 and 2020 (Expressed in Canadian Dollars)

2. Proposed transaction (continued)

• The Bridge Financing completing before the date of closing the Business Combination (completed); and

• The Transaction Financing completing on or before the date of closing the Business Combination.

The QT is subject to shareholder and TSXV approval. On December 21, 2021, a special meeting of the shareholders of the Company approved the Business Combination.

3. Basis of presentation

(a) Statement of compliance

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

These financial statements were authorized for issue by the Board of Directors on January 28, 2022.

(b) Basis of measurement

These financial statements have been prepared on a historical cost basis, except for financial instruments classified as fair value through profit or loss (“FVTPL”), which are stated at their fair values. In addition, these financial statements have been prepared using the accrual basis of accounting, except for cash flow information. The preparation of financial statements in compliance with IFRS requires management to make certain critical accounting estimates. It also requires management to exercise judgment in applying the Company’s accounting policies. The areas involving a higher degree of judgment of complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 4.

(c) Functional and presentation currency

These financial statements are presented in Canadian dollars, which is the functional currency of the Company.

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RMR Science Technologies Inc. Notes to the Financial Statements For the years ended September 30, 2021 and 2020 (Expressed in Canadian Dollars)

4. Significant accounting policies

Financial instruments

Classification

The Company classifies its financial assets in the following measurement categories:

• those to be measured subsequently at fair value (either through other comprehensive income (“OCI”) or through profit or loss), and

• those to be measured at amortized cost.

The classification depends on the Company’s business model for managing the financial assets and the contractual terms of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity instruments that are not held for trading, this will depend on whether the group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (FVTOCI).

The Company reclassifies debt instruments when and only when its business model for managing those assets changes.

The Company classifies its financial instruments as follows:

Financial Instrument Classification Cash Amortized cost GST receivable Amortized cost Accounts payable and accrued Amortized cost liabilities

Measurement

Financial assets and liabilities at amortized cost

Financial assets and liabilities at amortized cost are initially recognized at fair value plus or minus transaction costs, respectively, and subsequently carried at amortized cost less any impairment.

Financial assets and liabilities at FVTPL

Financial assets and liabilities carried at FVTPL are initially recorded at fair value and transaction costs are expensed in profit or loss. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets and liabilities held at FVTPL are included in the statements of loss and comprehensive loss in the period in which they arise.

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RMR Science Technologies Inc. Notes to the Financial Statements For the years ended September 30, 2021 and 2020 (Expressed in Canadian Dollars)

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4. Significant accounting policies (continued)

Financial instruments (continued)

Impairment of financial assets at amortized cost

An ‘expected credit loss’ impairment model applies which requires a loss allowance to be recognized based on expected credit losses. The estimated present value of future cash flows associated with the asset is determined and an impairment loss is recognized for the difference between this amount and

the carrying amount as follows: the carrying amount of the asset is reduced to estimated present value of the future cash flows associated with the asset, discounted at the financial asset’s original effective interest rate, either directly or through the use of an allowance account and the resulting loss is recognized in profit or loss for the period.

In a subsequent period, if the amount of the impairment loss related to financial assets measured at amortized cost decreases, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.

Derecognition

Financial assets

The Company derecognizes financial assets only when the contractual rights to cash flows from the financial assets expire, or when it transfers the financial assets and substantially all of the associated risks and rewards of ownership to another entity. Gains and losses on derecognition are generally recognized in the statements of loss and comprehensive loss.

The preparation of these financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date of the financial statements, and reported amounts of revenues and expenses during the period. Estimates and assumptions are continuously evaluated and are based on managements’ experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes can differ from these estimates.

Significant assumptions about the future and other sources of estimated uncertainty that management has made as at the statement of financial position date that could result in a material adjustment to the carrying amount of assets and liabilities in the event that actual results differ from assumptions made, relate to, but are not limited to, the following:

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RMR Science Technologies Inc. Notes to the Financial Statements For the years ended September 30, 2021 and 2020 (Expressed in Canadian Dollars)

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4. Significant accounting policies (continued)

Financial instruments (continued)

Critical Accounting Estimates

Critical accounting estimates and assumptions made by management that may result in a material adjustment to the carrying amounts of assets and liabilities include, but are not limited to, the following:

• Recovery of deferred tax assets

The measurement of income taxes payable and deferred income tax assets and liabilities requires management to make estimates in the interpretation and application of the relevant tax laws. The actual amount of income taxes only becomes final upon filing and acceptance of the tax return by the relevant tax authorities, which occurs subsequent to the issuance of the financial statements.

Significant accounting judgments, estimates and assumptions

Critical Accounting Judgments

Information about critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements include, but are not limited to, the following:

• Going concern

The assessment of the Company’s ability to continue as a going concern and to raise sufficient funds to pay for its ongoing operating expenditures, meet its liabilities for the ensuing year, and to fund acquisition of assets or businesses and contractual exploration programs, involves significant judgment based on historical experience and other factors, including expectation of future events that are believed to be reasonable under the circumstances.

• Treatment of research and development expenses

The application of the Company’s accounting policy for research and development expenditures requires judgment in determining whether it is likely that the future economic benefits will flow to the Company, which may be based on assumptions about future events or circumstances.

Significant judgment is required to distinguish between the research and development phases. Estimates and assumptions may change if new information becomes available. If new information suggests future economic benefits are unlikely, the amount capitalized is written off to profit or loss.

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RMR Science Technologies Inc. Notes to the Financial Statements For the years ended September 30, 2021 and 2020 (Expressed in Canadian Dollars)

4. Significant accounting policies (continued)

Share capital

Common shares issued by the Company are classified as shareholders’ equity. Incremental costs directly attributable to the issuance of shares are recognized as a deduction from shareholders’ equity.

Proceeds received on the issuance of units, consisting of common shares and warrants, are allocated using the residual method whereby proceeds are allocated first to common shares based on the market trading price of the common shares, and any remaining balance is allocated to warrants.

Share-based payments

The Company accounts for share-based payments using a fair value based method with respect to all share-based payments measured and recognized, to directors, employees and non-employees. For directors and employees, the fair value of the options is measured at the date of grant. For nonemployees, the options are recorded at the fair value of the goods or services received. When the value of the goods or services received in exchange for the share-based payments cannot be reliably estimated, the fair value is measured using the Black-Scholes option pricing model. When options and warrants are exercised, the related amount in the options and warrants reserve is transferred to share capital. When options and warrants expire unexercised, such amounts are transferred to deficit. When finders’ options and warrants expire unexercised, such amounts are reversed to share capital.

Income taxes

The Company follows the asset and liability method of accounting for income taxes. Under this method of tax allocation, deferred income tax assets and liabilities are determined based on differences between financial statement carrying amounts of existing assets and liabilities, and their respective tax basis (temporary differences). Deferred income tax assets and liabilities are measured using the tax rates expected to be in effect when the temporary differences are likely to reverse. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in operations in the period in which the change is enacted or substantively enacted. The amount of deferred income tax assets recognized is limited to the amount of the benefit that is probable of being realized.

Earnings (loss) per share

The Company presents basic and diluted earnings (loss) per share for its common shares, calculated by dividing the loss attributable to common shareholders of the Company by the weighted average number of shares outstanding during the period. The computation of diluted earnings (loss) per share assumes the exercise or contingent issuance of securities only when such exercise would have a dilutive effect on the earnings (loss) per share.

5. Cash

The Company’s cash is comprised of cash of $84,208.

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RMR Science Technologies Inc. Notes to the Financial Statements For the years ended September 30, 2021 and 2020 (Expressed in Canadian Dollars)

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6. Accounts payable and accrued liabilities

Accounts payable and accrued liabilities are comprised of:

	2021	2020
	$	$
Accounts payable	103,942	178,851
Accrued liabilities	9,250	-
	113,192	178,851

7. Share capital

(a) The authorized share capital of the Company consists of an unlimited number of common shares without par value.

• (b) Issued and outstanding:

As at September 30, 2021, the Company has 7,735,775 common shares outstanding, 2,600,000 of which are held in escrow. During the year ended September 30, 2021, the Company received share subscriptions of $25,000.

8. Stock options

On January 4, 2018, the Company adopted an incentive stock option plan (the “Option Plan”) which provides that the Board of Directors of the Company may from time to time, in its discretion, and in accordance with TSX-V requirements, grant to directors, officers, employees and technical consultants to the Company, non-transferable options to purchase common shares, provided that the number of common shares reserved for issuance will not exceed 10% of the issued and outstanding common shares. Such options will be exercisable for a period of up to 10 years from the date of grant. Vesting terms will be determined at the time of grant by the Board of Directors.

Any common shares acquired pursuant to the exercise of options prior to the completion of the Qualifying Transaction must be deposited in escrow and will be subject to escrow until the final exchange bulletin is issued.

A summary of the Company’s outstanding stock options and changes is as follows:

		Weighted	Contractual
		Average	Life
	Quantity	Exercise Price($)	(Years)
Outstanding and exercisable, September 30, 2020
and 2021	760,000	$0.10	1.46

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RMR Science Technologies Inc. Notes to the Financial Statements For the years ended September 30, 2021 and 2020 (Expressed in Canadian Dollars)

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9. Related party transactions

Key management compensation

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly. Key management personnel include the Company’s executive officers and directors. During the years ended September 30, 2021 and 2020, there was no compensation paid to key management.

Included in accounts payable is $1,133 due to officers and directors of the Company. These accounts are unsecured, non-interest bearing and due on demand.

10. Gain on settlement of debt

During the year ended, September 30, 2021, the Company entered into a debt settlement agreement with a service provider (the “Service Provider”). Pursuant to the terms of the agreement the Service Provider forgave amounts owing in the amount of $107,568.

11. Income taxes

A reconciliation of income taxes at statutory rates with the reported taxes is as follows:

		2021		2020
Income(loss)for theyear	$	2,398	$	(60,464)
Expected income tax (recovery)	$	1,000	$	(16,000)
Change in statutory, foreign tax, foreign
exchange rates and other		4,000		16,000
Adjustment to prior years provision
versus statutory tax return		6,000		-
Change in unrecognized deductible
temporary		(11,000)		-
Total income tax expense(recovery)	$	-	$	-
Current income tax	$	-	$
Deferred tax recovery	$	-	$	-

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RMR Science Technologies Inc. Notes to the Financial Statements For the years ended September 30, 2021 and 2020 (Expressed in Canadian Dollars)

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11. Income taxes (continued)

The significant components of the Company’s deferred tax assets that have not been included on the statement of financial position are as follows:

		2021		2020
Deferred tax assets (liabilities)
Property and equipment	$	65,000	$	-
Share issue costs		18,000		14,000
Non-capital losses available for the
futureperiod		100,000		180,000
		183,000		194,000
Unrecognized deferred tax assets		(183,000)		(194,000)
Net deferred tax assets	$	-	$	-

The significant components of the Company’s temporary differences, unused tax credits and unused tax losses that have not been included on the statement of financial position are as follows:

		Expiry Date		Expiry Date
	2021	Range	2020	Range
Temporary Differences
Property and equipment	$ 242,000	No expiry date $	-	No expiry date
Share issue costs	66,000	2042 to 2043	52,000	2041 to 2043
Non-capital losses available for
futureperiods	$371,000	2038 to 2041$	668,000	2038 to 2040
Canada	$ 371,000	2038 to 2041 $	668,000	2038 to 2040

Tax attributes are subject to review, and potential adjustment, by tax authorities.

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RMR Science Technologies Inc. Notes to the Financial Statements For the years ended September 30, 2021 and 2020 (Expressed in Canadian Dollars)

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12. Financial instruments and risk management

As at September 30, 2021, the Company’s financial instruments comprise cash and accounts payable and accrued liabilities. The fair value of cash, accounts payable and accrued liabilities approximate its carrying value due to its short-term to maturity. Fair values of financial instruments are classified in a fair value hierarchy based on the inputs used to determine fair values. The levels of the fair value hierarchy are as follows:

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 Company’s risk exposures and the impact on the Company’s financial instruments are summarized below:

Credit risk

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The Company’s credit risk is primarily attributable to its cash. The Company limits exposure to credit risk by maintaining its cash with large financial institutions. The Company does not have cash that is invested in asset-backed commercial paper.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company ensures there is sufficient capital in order to meet short-term business requirements, after taking into account cash flows from operations and the Company’s holdings of cash. The Company believes further funding will be required to meet short term and long term requirements. As at September 30, 2021, the Company had a cash balance of $84,208 to settle current liabilities of $113,192.

All of the Company’s financial liabilities have contractual maturities of 30 days or are due on demand and subject to normal trade terms.

Market risk

Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and commodity and equity prices.

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RMR Science Technologies Inc. Notes to the Financial Statements For the years ended September 30, 2021 and 2020 (Expressed in Canadian Dollars)

12. Financial instruments and risk management (continued)

• i. Interest rate risk

Interest rate risk arises from changes in market rates of interest that could adversely affect the Company. The Company currently has no interest-bearing financial instruments other than cash, so its exposure to interest rate risk is insignificant.

ii. Foreign currency risk

Foreign currency risk arises from fluctuations in foreign currencies versus the Canadian dollar that could adversely affect reported balances and transactions denominated in those currencies. The Company currently has no assets or liabilities and has no revenue or expenses denominated in a foreign currency, so it is not exposed to foreign currency risk.

iii. Equity price risk

Equity price risk arises from market fluctuations in equity prices that could adversely affect the Company’s operations. The Company’s current exposure to equity price risk is limited to declines in the values and volumes including those of its own shares, which could impede its ability to raise additional funds when required.

13. Capital management

Capital is comprised of items included in shareholders’ equity (deficiency). The Company’s objectives when managing capital are to maintain financial strength and to protect its ability to meet its on-going liabilities, to continue as a going concern, to maintain creditworthiness and to maximize returns for shareholders over the long term. Protecting the ability to pay current and future liabilities includes maintaining capital above minimum regulatory levels, current financial strength rating requirements and internally determined capital guidelines and calculated risk management levels.

The capital for expansion was mostly from proceeds from the issuance of common shares. The net proceeds raised will only be sufficient to identify and evaluate a limited number of assets and businesses for the purpose of identifying and completing a Qualifying Transaction. Additional funds may be required to finance the Company’s Qualifying Transaction.

The Company is not subject to any externally-imposed capital requirements.

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RMR Science Technologies Inc. Notes to the Financial Statements For the years ended September 30, 2021 and 2020 (Expressed in Canadian Dollars)

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14. Subsequent events

• a) On October 7, 2021 the Company completed a non-brokered private placement of 2,500,000 common shares at a price of $0.08 per common share for aggregate gross proceeds of $200,000.

• b) On November 19, 2021, the Company cancelled an aggregate of 760,000 options to purchase Class “A” common shares previously granted to certain directors and officers of the Company.

• d) On December 21, 2021, the Company held its annual and special meeting, wherein the shareholders of the Company approved the Business Combination.

• e) On December 21, 2021, the Company and TTGI entered into a definitive amalgamation agreement to effect the Business Combination which is intended to be a Qualifying Transaction. The Business Combination has been structure as a three-cornered amalgamation pursuant to which a wholly-owned subsidiary of the Company, 1333633 B.C. Ltd., and TTGI will amalgamate pursuant to the provisions of the Business Corporations Act (British Columbia) and the amalgamated company will become a wholly-owned subsidiary of the Company, which will be renamed TTGI OpCo Inc.

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