Volt Carbon Technologies Inc. — Interim / Quarterly Report 2021

Jun 29, 2021

SAINT JEAN CARBON INC.

Condensed Interim Financial Statements

(Unaudited – presented in Canadian Dollars)

for the period ending April 30, 2021

Notice of No Auditor Review

Pursuant to National Instrument 51‐102, Part 4, subsection 4.3(3)(a), the accompanying unaudited interim financial statements have been prepared by and are the responsibility of the Company’s management. The Company’s independent auditors have not performed a review of these financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity’s auditor.

MANAGEMENT’S REPORT TO THE SHAREHOLDERS

The accompanying unaudited interim financial statements have been prepared by management and approved by the Board of Directors of the Company. Management is responsible for the information and representations contained in these unaudited interim financial statements and the accompanying Management’s Discussion and Analysis. The unaudited interim financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS).

To assist management in discharging these responsibilities, the Company maintains a system of procedures and internal controls which are designed to provide reasonable assurance that its assets are safeguarded, that transactions are executed in accordance with management’s authorization, and that the financial records form a reliable base for preparation of accurate and timely financial information.

The Company’s external auditors are appointed by the shareholders. They independently perform the necessary tests of accounting records and procedures to enable them to report their opinion as to the fairness of the financial statements and their conformity with IFRS.

The Board of Directors ensures that management fulfills its responsibilities for financial reporting and internal control. The Board of Directors exercises this responsibility through an Audit Committee. The Audit Committee has reviewed and discussed the unaudited interim financial statements, including the notes thereto, with management and the external auditors. The unaudited interim financial statements have been approved by the Board of Directors on the recommendation of the Audit Committee.

“ ” William Pfaffenberger __ William Pfaffenberger Chief Executive Officer

“ David Madill ” David Madill Chief Financial Officer

SAINT JEAN CARBON INC.

STATEMENTS OF FINANCIAL POSITION

(Expressed in Canadian Dollars)

(Unaudited)

ASSETS Current Cash Accounts receivable (Note 4) Prepaid expenses	As at As at April 30, October 31, 2021 2020
	270,697 $ 29,441 $ 3,350 17,790 40,602 21,067
Restricted cash(Note 13) Equipment(Note 5) Mineral exploration and evaluation assets(Note 6) Right-of-use assets(Note 7) Other assets	314,649 68,298 41,000 41,000 329,031 375,759 854,869 839,582 29,699 43,845 30,443 1,042
	1,599,691 $ 1,369,526 $
LIABILITIES Current Accounts payable and accrued liabilities (Note 8) Notes payable (Note 10) Current portion of lease liabilities (Note 7) Interest payable Other liabilities(Note 9)	1,210,672 $ 1,544,327 $ 519,708 139,521 13,581 21,065 15,800 1,734 85,000 147,500
Lease liabilities (Note 7)	1,844,761 1,854,147 16,575 23,437
SHAREHOLDERS' EQUITY Share capital (Note 11) Contributed surplus Deficit	1,861,336 1,877,584 21,644,185 21,190,744 2,087,345 1,805,054 (23,993,175) (23,503,856)
	(261,645) (508,058)
	1,599,691 $ 1,369,526 $
Going concern(Note 2(a)) Contingency(Note 18) Subsequent Event(Note 19)

See accompanying notes

On behalf of the Board of Directors:

"William Pfaffenberger"

CEO, Director

"David Madill"

CFO, Director

SAINT JEAN CARBON INC. STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Expressed in Canadian Dollars)

(Unaudited)

Processing revenue	Quarter ended April 30, 2021 - $	Quarter ended April 30, 2020 817 $	Period ended April 30, 2021 70,000 $	Period ended April 30, 2020
				49,599 $
Direct costs	- -	817 -	70,000 11,166	49,599 10,000
	-	817	58,834	39,599
Expenses Stock-based compensation Professional fees Management fees Amortization Bank and loan interest Bad debts Office and general Research Expenses Regulatory and filing fees Loss on disposal of assets Investor relations Mill operating expense Interest on lease liabilities Automotive Travel and promotion Gain on foreign exchange Expense recovery	- $ 86,379 79,858 21,719 11,782 - 10,181 15,000 7,963 - - 1,900 337 - - (4,703) -	- $ 9,723 70,620 35,796 2,018 - 6,349 - 8,605 - - 28,070 1,787 4,116 3,589 - -	282,291 $ 170,462 153,884 50,731 33,534 30,974 22,231 15,000 11,757 9,144 2,800 1,316 766 - - (9,814) (226,923)	- $ 46,201 130,248 71,592 3,193 - 14,895 - 8,685 - - 64,925 4,052 7,403 5,014 - -
	230,416	170,673	548,153	356,208
Loss and comprehensive loss	(230,416)	(169,856)	(489,319)	(316,609)
Lossper share - basic and diluted(Note 11(b))	(0.003) $	(0.002) $	(0.006) $	(0.004) $
Weighted average number of shares outstanding - basic and diluted	90,321,338	75,892,532	87,877,131	75,892,532

See accompanying notes

SAINT JEAN CARBON INC.

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(Expressed in Canadian Dollars) (Unaudited)

Balance at November 1, 2019 Private placements Share issuance costs Loss and comprehensive loss	Number of shares Share Capital Contributed Surplus Deficit Total
	75,892,532 21,011,573 1,805,054 (19,436,691) 3,379,936 - - - - - - - - - - - - - (316,609) (316,609)
Impact of adoption of IFRS 16	79,885,032 21,011,573 $ 1,805,054 $ (19,753,300) $ 3,063,327 $ - - - (8,116) (8,116)
Balance at April 30, 2020	79,885,032 21,011,573 $ 1,805,054 $ (19,761,416) $ 3,055,211 $
Balance at November 1, 2020 Issuance of shares for non-cash items Shares issued due to exercise of warrants Stock-based compensation Share issuance costs Loss and comprehensive loss	83,797,532 21,190,744 $ 1,805,054 $ (23,503,856) $ (508,058) 3,615,000 128,250 - - 128,250 6,081,250 340,313 - - 340,313 - - 282,291 - 282,291 - (15,122) - - (15,122) - - - (489,319) (489,319)
Balance, April 30, 2021	93,493,782 21,644,185 $ 2,087,345 $ (23,993,175) $ (261,645) $

See accompanying notes

SAINT JEAN CARBON INC. STATEMENTS OF CASH FLOWS

(Expressed in Canadian Dollars)

(Unaudited)

Cash flows from (used in) operating activities Loss and comprehensive loss Items not involving cash: Amortization Stock-based compensation Interest on lease liabilities Loan bonus Loss on disposal of assets Unrealizedgain on foreign exchange	Period ended April 30, 2021 (489,319) $ 33,534 282,291 2,800 5,750 15,000 (9,814)	Period ended April 30, 2020
		(316,609) $ 3,193 - - - -
Changes in non-cash working capital items: Accounts receivable Prepaid expenses Accounts payable and accrued liabilities Interest payable Other liabilities	(159,758) 14,440 (19,535) (211,155) 14,066 (62,500)	(313,416) 10,449 4,222 151,241 2,144 -
	(424,442)	(145,360)
Cash flow from (used in) financing activities Exercise of warrants Share issuance costs Proceeds of notes payable Advance from associated company Decrease of lease liabilityobligation	340,313 (15,122) 390,000 (15,112)	- - - 90,766 (23,392)
	700,079	67,374
Cash flows used in investing activities Purchase of capital assets Proceeds from sale of capital assets Acquisition of other assets	(15,287) 1,000 (29,401)	- (766) (50)
	(43,688)	(816)
Increase (decrease) in cash Cash, beginning ofyear	231,949 29,441	(78,802) 7,723
Cash, end ofyear	261,390 $	(71,079) $

See accompanying notes

SAINT JEAN CARBON INC. Notes to the interim financial statements (Unaudited - Expressed in Canadian Dollars) April 30, 2021 and April 30, 2020

1. CORPORATE INFORMATION AND NATURE OF OPERATIONS

Saint Jean Carbon Inc. (formerly Torch River Resources Ltd.) (the “Company” or “Saint Jean”) incorporated provincially in Alberta, and extra provincially Saskatchewan, Manitoba, Quebec and British Columbia has shares listed on the TSX Venture Exchange.

The Company is in the process of exploring its mineral properties and has not determined whether these properties contain ore reserves which are economically recoverable. The Company also generates incidental revenue by processing raw materials through its mill.

To date, the Company has not earned significant revenues and is considered to be in the exploration stage.

2. BASIS OF PRESENTATION AND GOING CONCERN

Statement of compliance

These unaudited interim financial statements were approved by the Board of Directors on June 28, 2021.

The unaudited interim financial statements were prepared using the same accounting policies and methods as those used in the Company’s financial statements for the year ended October 31, 2020. The unaudited interim financial statements are in compliance with International Accounting Standard 34, Interim Financial Reporting (“IAS 34”). Accordingly, certain information and disclosure normally included in annual financial statements prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”), has been omitted or condensed. The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Accounts that require significant judgments, estimates and assumptions as the basis for determining the stated amounts are consistent with those applied and disclosed in the Company’s financial statements for the year ended October 31, 2020.

These unaudited interim financial statements should be read in conjunction with the Company’s financial statements for the year ended October 31, 2020 which were prepared in accordance with IFRS.

a) Going concern

These unaudited interim financial statements have been prepared on a going-concern basis which assumes that the Company will be able to realize assets and discharge liabilities in the normal course of business for the foreseeable future. Accordingly, it does not give effect to adjustments, if any, that would be necessary should the Company be unable to continue as a going concern and, therefore, be required to realize its assets and liquidate its liabilities in other than normal course of business and at amounts which may differ from those shown in the unaudited interim financial statements.

SAINT JEAN CARBON INC. Notes to the interim financial statements (Unaudited - Expressed in Canadian Dollars) April 30, 2021 and April 30, 2020

2. BASIS OF PRESENTATION AND GOING CONCERN (continued)

As at April 30, 2021, the Company has incurred a loss from operations of $489,319, has a working capital deficit of $1,530,112, negative cash flow from operations of $424,442 and an accumulated deficit of $23,993,175. The Company’s ability to continue as a going concern is contingent on its ability to obtain additional equity financing.

This condition, along with other matters as set forth in the above paragraph, indicates the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern.

b) Measurement basis

These unaudited interim financial statements are prepared on the historical cost basis except for certain financial instruments, which are measured at fair value as explained in the accounting policy set out in Note 14. The Company’s presentation and functional currency is Canadian dollars.

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The Company makes estimates and assumptions about the future that affect the reported amounts of assets and liabilities. Estimates and judgments are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions.

The effect of a change in an accounting estimate is recognized prospectively by including it in comprehensive income in the period of the change, if the change affects that period only, or in the period of the change and future periods, if the change affects both.

Information about critical judgments in applying accounting policies that have the most significant risk to cause material adjustment to the carrying amounts of assets and liabilities recognized in these unaudited interim financial statements within the next financial year are discussed below:

Impairment of non-financial assets

Exploration and evaluation assets and equipment assets are assessed for impairment whenever events or changes in circumstances indicate that their carrying amounts exceed their recoverable amounts. The assessment requires estimates and assumptions such as discount rates, exchange rates, commodity prices, future capital requirements and future operating performance.

Title to mineral property interests

Although the Company has taken steps to verify title to mineral properties in which it has an interest, these procedures do not guarantee the Company’s title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects.

SAINT JEAN CARBON INC. Notes to the interim financial statements (Unaudited - Expressed in Canadian Dollars) April 30, 2021 and April 30, 2020

4. ACCOUNTS RECEIVABLE

ACCOUNTS RECEIVABLE
	April 30,	October 31,
	2021	2020
Trade receivables	$ -	$ -
GST receivable	3,350	17,790
	$ 3,350	$ 17,790

5. EQUIPMENT

			Furniture,
	Mill	Leasehold	fixtures and
Cost	equipment	improvements	office equipment	Total
At November 1, 2019	$ 629,991	$ 49,866	$ 15,184	$ 695,041
Additions	-	-	-	-
At October 31, 2020	$ 629,991	$ 49,866	$ 15,184	$ 695,041
Disposals	-	(49,866)	(9,518)	(59,384)
At April 30, 2021	$ 629,991	$ -	$ 5,666	$ 635,657
			Furniture,
Accumulated	Mill	Leasehold	fixtures and
amortization	equipment	improvements	office equipment	Total
At November 1, 2019	$ 176,028	$ 28,388	$ 6,215	$ 210,631
Amortization	90,793	15,960	1,898	108,651
At October 31, 2020	$ 266,821	$ 44,348	$ 8,113	$ 319,282
Disposals	-	(44,348)	(4,893)	(49,241)
Amortization	36,317	-	268	36,585
At April 30, 2021	$ 303,138	$ -	$ 3,488	$ 306,626
			Furniture,
	Mill	Leasehold	fixtures and
Net book value	equipment	improvements	office equipment	Total
At October 31, 2020	$ 363,170	$ 5,518	$ 7,071	$ 375,759
At April 30, 2021	$ 326,853	$ -	$ 2,178	$ 329,031

SAINT JEAN CARBON INC. Notes to the interim financial statements (Unaudited - Expressed in Canadian Dollars) April 30, 2021 and April 30, 2020

6. MINERAL EXPLORATION AND EVALUATION ASSETS

The Company has acquired certain mineral properties and rights. Mineral exploration and evaluation assets include property acquisition costs and deferred exploration costs.

Property acquisition costs:

		Mount
	Red Bird(a)	Copeland(b)	Lochaber(c)	Total
At October 31, 2020	$ 140,000	$ 221,186	$ -	$ 361,186
Additions	-	-	-	-
At April 30, 2021	$ 140,000	$ 221,186	$ -	$ 361,186

Deferred exploration costs:

		Mount
	Red Bird(a)	Copeland(b)	Lochaber(c)	Total
At October 31, 2020	$ 16,681	$ 461,715	$ -	$ 478,396
Additions	-	-	15,287	15,287
At April 30, 2021	$ 16,681	$ 461,715	$ -	$ 493,683

Total costs:

		Mount
	Red Bird(a)	Copeland(b)	Lochaber(c)	Total
At October 31, 2020	$ 156,681	$ 682,901	$ -	$ 839,582
Additions	-	-	15,287	15,287
At April 30, 2021	$ 156,681	$ 682,901	$ 15,287	$ 854,869

a) Red Bird

The Red Bird molybdenum property consists of three mineral claims situated in the Skeena Mining Division of west central British Columbia. The Company has acquired a 25% undivided interest in the property.

b) Mount Copeland

The Mount Copeland molybdenum property is situated in British Columbia. The Company has acquired a 100% interest in the Mount Copeland property.

c) Lochaber

In May 2018, the Company acquired a 100% ownership of the historical graphite mining property known as the Lochaber claims located in South Western Quebec.

SAINT JEAN CARBON INC. Notes to the interim financial statements (Unaudited - Expressed in Canadian Dollars) April 30, 2021 and April 30, 2020

7. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

For the period ended April 30, 2021, the Company recognized non-cash amortization expense in the amount of $14,146 (increase in costs) and recognized non-cash interest expense in the amount of $766 (increase in costs).

a) Right-of-use assets

)	Cost November 1, 2020 $ 181,742 Additions during the year - Disposals duringtheyear (134,908)
	April 30, 2021 $ 46,834
	Accumulated amortization November 1, 2020 $ 137,897 Amortization 14,146 Disposals duringtheyear (134,908)
	April 30, 2021 $ 17,135
	Net book value October 31, 2020 $ 43,845 April 30,2021 $29,699
	Lease liabilities
	Balance, beginning of the period $ 44,502 Additions during the period - Lease finance expense 765 Repayments duringtheperiod (15,111)
	Balance, April 30, 2021 $ 30,156
	Current $ 13,581 Long-term 16,575
	Total discounted lease liabilities $ 30,156
	The Company is committed to lease payments as follows: 2021 $ 7,290 2022 14,579 2023 9,719 $31,588

b) Lease liabilities

The Company has applied the practical expedient to all rent concessions that meet the conditions under IFRS 16. Included in expense recovery is $1,562 of rent concessions that meet the conditions of the practical expedient.

SAINT JEAN CARBON INC. Notes to the interim financial statements (Unaudited - Expressed in Canadian Dollars) April 30, 2021 and April 30, 2020

8. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

		April 30,	October 31,
		2021	2020
Trade payables	$	912,772	$ 992,507
Tradepayables – relatedparties		297,900	551,820
	**$ **	1,210,672	$ 1,544,327

Included in accounts payable are amounts due to related parties relating to management fees incurred as follows:

Amounts due to	Nature of relationship	April 30,	October 31,
		2021	2020
Private corporation	Company controlled by the	$ -	$ 241,820
	former CEO, no longer related
Unincorporated business	Key Management personnel	84,000	84,000
Private corporation	KeyManagementpersonnel	213,900	226,000
		$ 297,900	$ 551,820

9. OTHER LIABILITIES

In a prior year, Canada Revenue Agency ("CRA") commenced an audit of the Company's tax filings related to flow-through shares. In the prior year, CRA accepted, in part, the Company's original filing. The Company has recorded a provision of $85,000 in the prior year related to the indemnification of flow through shares to investors.

10. NOTES PAYABLE

	April 30,	October 31,
	2021	2020
Unsecured promissory notes payable to a senior officer and	$ 13,000	$ 13,000
director of the Company, due upon demand, bearing
interest at 10% per annum.
Unsecured promissory notes payable to a senior officer and	290,000	-
director of the Company, due between December 1, 2021
and March 25, 2022, and bear interest at 12% per annum.
Unsecured loan payable of $95,000 USD, non-interest	116,708	126,521
bearing with no fixed terms of repayment.
Unsecured promissory note payable, due November 14,	100,000	-
2021,bearinginterest at 12%per annum.
	$ 519,708	$ 139,521

SAINT JEAN CARBON INC. Notes to the interim financial statements (Unaudited - Expressed in Canadian Dollars) April 30, 2021 and April 30, 2020

11. SHARE CAPITAL

a) Authorized:

The authorized share capital of the Company is:

An unlimited number of voting common shares without par value. An unlimited number of non-voting first preferred shares. An unlimited number of non-voting second preferred shares.

b) Issued and outstanding:

See the Statement of Changes in Shareholders’ Equity. The number of the shares outstanding presented in the statements of changes in shareholders’ equity refers only to voting common shares. Diluted loss per share did not include the effect of 7,300,000 options (260,000 – October 31, 2020) and 12,753,750 warrants (24,755,750 – October 31, 2020) as they are anti-dilutive.

c) Share issuances:

On December 23, 2020 the Company received a subscription for a private placement of 3,500,000 shares at a price of $0.035 per unit for gross proceeds of $122,500.

On January 4, 2021 the Company issued a loan bonus to lenders of 115,000 common shares in the capital of the Company at a deemed price of $0.05 per share for an aggregate amount of $5,750.

On January 18, 2021 the Company issued 1,398,750 common shares in the capital of the Company due to exercise of warrants at an exercise price of $0.05 per share for gross proceeds of $69,937.

On February 17, 2021 the Company issued 980,000 common shares in the capital of the Company due to exercise of warrants at an exercise price of $0.05 per share for gross proceeds of $49,000.

On March 18, 2021 the Company issued 400,000 common shares in the capital of the Company due to exercise of warrants at an exercise price of $0.05 per share for gross proceeds of $20,000.

On April 14, 2021 the Company issued 200,000 common shares in the capital of the Company due to exercise of warrants at an exercise price of $0.05 per share for gross proceeds of $10,000.

On April 16, 2021 the Company issued 1,450,000 common shares in the capital of the Company due to exercise of warrants at an exercise price of $0.075 per share for gross proceeds of $108,750 and 1,652,500 common shares in the capital of the Company due to exercise of warrants at an exercise price of $0.05 per share for gross proceeds of $82,625.

SAINT JEAN CARBON INC. Notes to the interim financial statements (Unaudited - Expressed in Canadian Dollars) April 30, 2021 and April 30, 2020

11. SHARE CAPITAL (continued)

Subsequent to the end of the period, on May 5, 2021 the Company issued 200,000 common shares in the capital of the Company due to exercise of warrants at an exercise price of $0.075 per share for gross proceeds of $15,000.

Subsequent to the end of the period, on May 21, 2021 the Company issued 1,600,000 common shares in the capital of the Company due to exercise of options at an exercise price of $0.05 per share for gross proceeds of $80,000.

Subsequent to the end of the period, on May 21, 2021, the Company closed on a private placement for 7,000,000 units at a price of $0.125 per unit for gross proceeds of $875,000. Each unit consisted of one common share and one-half warrant. In connection with the private placement, $45,000 of share issue costs were incurred.

d) Stock options

The Company has established a stock-based compensation plan pursuant to which options to purchase common shares may be granted to certain officers, directors, and contractors of the Company as well as persons providing ongoing services to the Company. Exercise price of options equals at least the market price of the Company’s stock on the date of grant. Stock options are exercisable on the day of grant and are for a two or five-year term in accordance with TSX Venture Exchange policy.

A summary of the status of the Company’s incentive stock option plan as at April 30, 2021 and October 31, 2020 is as follows:

ctober 31,2020 is as follows:
		Weighted Average
	Number of options	Exercise Price
Balance October 31, 2019	1,055,172	$0.20
Granted	-	-
Expired	(795,172)	$0.20
Exercised	-	-
Balance October 31, 2020	260,000	$0.20
Granted	7,300,000	$0.05
Expired	(260,000)	$0.20
Exercised	-	-
Balance April 30, 2021	7,300,000	$0.05

Options Granted

On December 14, 2020, the Company issued 7,300,000 options to directors, officers and consultants of the Company with an exercise price of $0.05. The options expire on December 14, 2025.

SAINT JEAN CARBON INC. Notes to the interim financial statements (Unaudited - Expressed in Canadian Dollars) April 30, 2021 and April 30, 2020

11. SHARE CAPITAL (continued)

A summary of options granted as at April 30, 2021 is as follows:

Number of Shares	Exercise	Expiry
Under Option	Price	Date
7,300,000	$0.05	December 14, 2025
7,300,000

The Black-Scholes option valuation model was used to estimate the fair value of the options with the following assumptions.

	Dividend		Risk free		Grant date value
	Yield	Volatility	interest rate	Expected life	(per option)
Options granted November 9, 2016	0%	133.05%	0.82%	5 years	$0.04
Options granted December 12, 2016	0%	137.29%	0.92%	3 years	$0.07
Options granted January 13, 2017	0%	137.99%	1.14%	5 years	$0.06
Options granted December 14, 2020	0%	193.45%	0.99%	5 years	$0.04

e) Share purchase warrants

A summary of outstanding warrants as at April 30, 2021 and October 31, 2020 is as follows:

	Number of	Weighted Average
	Warrants	Exercise Price
Balance, October 31, 2019	16,850,750	$0.14
Granted	7,905,000	$0.05
Expired	-	-
Exercised	-	-
Balance October 31, 2020	24,755,750	$0.11
Granted	-	-
Expired	(5,920,750)	$0.21
Exercised	(6,081,250)	$0.06
Balance April 30, 2021	12,753,750	$0.09

SAINT JEAN CARBON INC. Notes to the interim financial statements (Unaudited - Expressed in Canadian Dollars) April 30, 2021 and April 30, 2020

11. SHARE CAPITAL (continued)

A summary of warrants granted as at April 30, 2021 is as follows:

	Exercise	Expiry
Number of Warrants	Price	Date
67,500	$0.22	May 17, 2021
37,500	$0.22	May 29, 2021
1,400,000	$0.075	June 28, 2021
650,000	$0.075	July 18, 2021
1,898,750	$0.05	April 18, 2022
1,637,500	$0.22	May 17, 2022
1,125,000	$0.22	May 29, 2022
285,000	$0.05	June 10, 2022
5,652,500	$0.05	October 9, 2023
12,753,750

12. RELATED PARTY TRANSACTIONS

	Six months ended April 30,	Six months ended April 30,
Management and consulting fees	2021	2020
Partnership of which the former CFO is a partner	$ -	$ 20,248
Company controlled by the former President	-	60,000
Company controlled by a director and senior	65,000	60,000
officer

Key management personnel include the board of directors, chief executive officer, chief financial officer and chief technology officer. Key management personnel compensation comprised:

Key management compensation

Key management compensation
	Six months ended April 30,
	2021	2020
Management and consulting fees	$ 30,000	$ 130,248
Stock-based compensation	172,081	-
Cost ofgoods sold	-	10,000
	$202,081	$140,248

13. RESTRICTED CASH

Term deposits of $36,000 have been pledged as security to the Scotia Bank for their irrevocable letter of credit in favor of the Province of British Columbia, Ministry of Energy and Mines. A term deposit of $5,000 has been pledged as security to the Scotia Bank to secure the Company credit card.

SAINT JEAN CARBON INC. Notes to the interim financial statements (Unaudited - Expressed in Canadian Dollars) April 30, 2021 and April 30, 2020

14. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Financial assets and financial liabilities are measured on an ongoing basis at fair value or amortized cost. The disclosures in the notes to these unaudited interim financial statements describe how the categories of financial instruments are measured and how income and expenses, including fair value gains and losses, are recognized.

Financial instruments recognized at fair value on the statements of financial position must classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurement. The fair value hierarchy levels are as follows:

• Level 1: Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities.

• Level 2: Valuation techniques based on inputs that are other than Level 1 quoted prices that are observable for the asset or liability, either directly (prices) or indirectly (derived from prices).

• Level 3: Valuation techniques with unobservable market inputs (involves assumptions and estimates by management).

As at April 30, 2021, the classification of the financial instruments, as well as their carrying values and fair values, with comparative figures for October 31, 2020 are shown in the table below:

	April 30, 2021	April 30, 2021	October 31, 2020	October 31, 2020
	Fair value	Carrying value	Fair value	Carrying
				value
Financial assets
Cash	270,697	270,697	29,441	29,441
Accounts receivable_(1)_	-	-	-	-
Financial liabilities
Accounts payable and
accrued liabilities	1,210,672	1,210,672	1,544,327	1,544,327
Notes payable	519,708	519,708	139,521	139,521
Interest payable	15,800	15,800	1,734	1,734
Other liabilities	85,000	85,000	147,500	147,500
(1) Excluding taxes receivable

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its obligations. The Company’s maximum exposure to credit risk as at April 30, 2021 under its financial instruments is summarized as follows:

SAINT JEAN CARBON INC. Notes to the interim financial statements (Unaudited - Expressed in Canadian Dollars) April 30, 2021 and April 30, 2020

14. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)

	April 30, 2021	October 31, 2020
Accounts and other receivables -
Currently due	-	-
Past due by 90 days or less, not impaired	-	-
Past due by greater than 90 days,not impaired	-	-
	-	-
Cash	270,697	29,441
	270,697	29,441

All of the Company’s cash is held with major financial institutions in Canada, and management believes the exposure to credit risk with such institutions is not significant. The Company considers the risk of material loss to be significantly mitigated due to the financial strength of the major financial institutions where cash is held. As at April 30, 2021 and October 31, 2020, no material provision has been recorded in respect of impaired receivables. The Company’s maximum exposure to credit risk as at April 30, 2021, is the carrying value of its financial assets.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its obligations associated with financial liabilities. The Company has a planning and budgeting process in place by which it anticipates and determines the funds required to support normal operation requirements as well as the growth and development of its mineral property interests. The Company coordinates this planning and budgeting process with its financing activities through the capital management process described in Note 15 , in normal circumstances. Due to the lack of liquidity, management has increased its focus on liquidity risk given the impact of the current economic climate on the availability of finance. Further information regarding liquidity risk is set out in Note 2 (a) .

The following table summarizes the contractual maturities of the Company’s financial liabilities at April 30, 2021:

	Contractual	Less than
	cash flows	oneyear
Accounts payable and
accrued liabilities	$ 1,210,672	$ 1,210,672
Notes payable	519,708	519,708
Interest payable	15,800	15,800
Other liabilities	85,000	85,000
	$1,831,180	$1,831,180

SAINT JEAN CARBON INC. Notes to the interim financial statements (Unaudited - Expressed in Canadian Dollars) April 30, 2021 and April 30, 2020

14. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)

Market risk

The significant market risks to which the Company is exposed include commodity price risk, interest rate risk and currency risk.

• Commodity price risk The Company’s ability to raise capital to fund exploration or development activities is subject to risk associated with fluctuations in the market prices of graphite, molybdenum, copper and gold and the outlook for these metals, as the Company’s ability to raise capital is affected by the commodity that the Company is exploring for on its mineral property interests. The Company does not have any hedging or other derivative contracts respecting its operations.

• Interest rate risk The Company has no significant exposure at April 30, 2021, to interest rate risk through its financial instruments.

• Currency risk

• The Company has no significant exposure at April 30, 2021 to currency risk as all cash and cash equivalents are held in Canadian funds.

15. MANAGEMENT OF CAPITAL

The Company’s objective in managing capital is to maintain adequate levels of funding to safeguard its ability to continue as a going concern in order to pursue the development of its mineral property interests.

The Company considers the items included in shareholders’ equity to be capital. The Company relies on equity financing in order to fund future exploration and development and makes adjustments to the Company’s capital structure based on financing needs, as well as in response to economic conditions and the risk characteristics of the underlying assets.

Management makes adjustments to its capital structure through share issuances and the acquisition or disposition of assets.

As the Company is in the exploration stage it endeavors to manage its capital structure in a manner that provides sufficient funding for operational activities through funds primarily secured through equity capital obtained in private placements. There can be no assurances that the Company will be able to continue raising capital in this manner.

The Company facilitates the management of capital though the preparation of annual expenditure budgets and cash forecasts that are updated as necessary. The Company does not have any externally imposed capital requirements.

SAINT JEAN CARBON INC. Notes to the interim financial statements (Unaudited - Expressed in Canadian Dollars) April 30, 2021 and April 30, 2020

15. MANAGEMENT OF CAPITAL (continued)

The Company’s managed capital is as follows:

	April 30, 2021	October 31, 2020
Share capital	21,644,185	21,190,744
Contributed surplus	2,087,345	1,805,054
Deficit	(23,993,175)	(23,503,856)
	(261,645)	(508,058)

16. NOVEL CORONAVIRUS (“COVID-19”)

The outbreak of the novel strain of coronavirus, specifically identified as “COVID-19” was declared a global pandemic by the World Health Organization on March 11, 2020. Governments worldwide enacted emergency measures to combat the spread of the virus. These measures, which include public health measures requiring periodic closures of non-essential businesses, requesting the public to stay home as much as possible, the implementation of travel bans, selfimposed quarantine periods and physical distancing, have caused material disruption to businesses globally resulting in an economic slowdown. Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions.

The duration and impact of the COVID-19 outbreak is unknown at this time, as is the efficacy of the government and central bank interventions. It is not possible to reliably estimate the length and severity of these developments.

17. SEGMENTED INFORMATION

The Company has two operating segments. These two operating segments have been differentiated based on the type of services provided and equipment requirements. The mineral exploration and development segment focuses on the acquisition and exploration of property interests that are considered potential sites of economic mineralization. The research and development segment focuses on the scientific study and technology applications for graphite and graphene. All of the Company’s operations are in Canada. The following tables provide financial results by segment:

SAINT JEAN CARBON INC. Notes to the interim financial statements (Unaudited - Expressed in Canadian Dollars) April 30, 2021 and April 30, 2020

17. SEGMENTED INFORMATION (continued)

Period ended	Mineral exploration	Research and
April 30, 2021	and development	development	Total
	$	$	$
Revenue	-	70,000	70,000
Amortization and impairment	3,695	47,036	50,731
of equipment
Total expenses	102,169	457,150	559,319
Capital expenditures	-	-	-
Total assets at April 30,2021	1,068,546	531,145	1,599,691

Year ended	Mineral exploration	Research and
October 31, 2020	and development	development	Total
	$	$	$
Revenue	-	17,166	17,166
Amortization and impairment	3,069,979	160,788	3,230,767
of equipment
Total expenses	3,810,418	268,175	4,078,593
Capital expenditures	-	-	-
Total assets at October 31,2020	939,203	430,323	1,369,526

18. CONTINGENCY

The Company has been named as a defendant in a statement of claim filed on January 5, 2021 in the Province of Ontario. The plaintiff is seeking $814,820 for unpaid compensation, and $1,000,000 for wrongful termination and damages. The unaudited interim financial statements include a provision for unpaid compensation of $241,820. Management has filed a statement of defense and counterclaim. The counterclaim against the plaintiff and other non-arm’s length parties seeks damages up to $3 million, plus further amounts which will be particularized prior to trial. As the outcome of this lawsuit and any liability to the Company cannot be reasonably determined at this time, no additional provisions have been made in the unaudited interim financial statements.

19. SUBSEQUENT EVENT

Subsequent to the end of the period, on May 27, 2021, the Company completed the acquisition of Solid Ultrabattery Inc. (“SUB”), a private Ontario company involved in the research and development of solid state batteries. The Company funded the acquisition of SUB by issuing 22 million common shares in the capital of the Company at a price of $0.06 per common share for a deemed aggregate purchase price of $1,320,000.