Vortex Energy Corp. — Interim / Quarterly Report 2023

Mar 2, 2023

VORTEX ENERGY CORP.

CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED DECEMBER 31, 2022

NOTICE TO READER

Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the condensed interim financial statements, they must be accompanied by a notice indicating that the condensed interim financial statements have not been reviewed by an auditor.

The accompanying unaudited condensed interim financial statements of Vortex Energy Corp. have been prepared by and are the responsibility of management. These condensed interim financial statements for the six months ended December 31, 2022, have not been reviewed or audited by the Company’s independent auditors. All amounts are stated in Canadian Dollars unless otherwise stated.

As at December 31, 2022 and June 30, 2022 In Canadian Dollars, unless noted (unaudited)

VORTEX ENERGY CORP.

Condensed Interim Statements of Financial Position

		December 31, 2022	June 30, 2022
As at	Notes	(unaudited)	(audited)
		$	$
ASSETS
Cash		1,166,904	1,670,855
Accounts receivable		19,802	-
Prepaid expenses	5	121,375	21,375
TOTAL CURRENT ASSETS		1,308,081	1,692,230
Exploration and evaluation assets	5	75,000	75,000
TOTAL ASSETS		1,383,081	1,767,230
LIABILITIES
Accounts payable and accrued liabilities		125,634	123,016
TOTAL LIABILITIES		125,634	123,016
SHAREHOLDERS’ EQUITY
Share capital	6	2,004,348	2,004,348
Reserves		870,000	-
Deficit		(1,616,901)	(360,134)
TOTAL SHAREHOLDERS’ EQUITY		1,257,447	1,644,214
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		1,383,081	1,767,230

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

Going concern (Note 2)

Approved on behalf of the Board of Directors:

“Kirk Hollohan” Director

“Eli Dusenbury” Director

VORTEX ENERGY CORP.

Condensed Interim Statements of Net Loss and Comprehensive Loss

For the Three and Six Months Ended December 31, 2022, the Three Months Ended December 31, 2021 and the Period from Incorporation on July 13, 2021 to December 31, 2021

In Canadian Dollars, unless noted (unaudited)

		Three Months	Three Months	Six Months	July 13, 2021 to
	Notes	December 31, 2022	December 31, 2021	December 31, 2022	December 31, 2021
		$	$	$	$
EXPENSES
Advertising and marketing		-	-	-	21,000
Consulting fees		87,500	23,625	131,750	47,250
Filing fees		29,876	200	43,066	200
Management fees	7	37,650	15,750	71,400	31,500
Office and miscellaneous		4,666	2,925	5,497	2,987
Pre-exploration and evaluation		-	26,250	-	26,250
Professional fees		81,743	21,405	135,054	23,825
Share-based compensation	6	870,000	-	870,000	-
NET AND COMPREHENSIVE LOSS		(1,111,435)	(90,155)	(1,256,767)	(153,012)
Loss per share, basic and diluted		(0.03)	(0.00)	(0.04)	(0.01)
Weighted average number of common
shares outstanding– Basic and diluted		32,928,000	22,849,615	32,928,000	20,265,427

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

VORTEX ENERGY CORP.

Condensed Interim Statements of Changes in Shareholders’ Equity

For the Six Months Ended December 31, 2022 and the Period from Incorporation on July 13, 2021 to December 31, 2021 In Canadian Dollars, unless noted (unaudited)

	Notes		Common Shares	Share Capital	Reserves	Deficit	Total Equity
			(#)	$	$	$	$
Incorporation, July 13, 2021			-	-	-	-	-
Incorporation shares		6	500	5	-	-	5
Private placement - common shares at $0.02		6	21,000,000	420,000	-	-	420,000
Private placement - common shares at $0.10			10,315,000	1,031,500	-	-	1,031,500
Share issuance costs			200,000	(12,157)	-	-	(12,157)
Loss and comprehensive loss for the period			-	-	-	(153,012)	(153,012)
Balances, December 31, 2021			31,515,500	1,439,348	-	(153,012)	1,286,336
Balances, June 30, 2022			32,928,000	2,004,348	-	(360,134)	1,644,214
Vesting of options and restricted share units		6	-	-	870,000	-	870,000
Loss and comprehensive loss for the period			-	-	-	(1,256,767)	(1,256,767)
Balances, December 31, 2022			32,928,000	2,004,348	870,000	(1,616,901)	1,257,447

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

VORTEX ENERGY CORP.

Condensed Interim Statements of Cash Flows

For the Six Months Ended December 31, 2022 and the Period from Incorporation on July 13, 2021 to December 31, 2021 In Canadian Dollars, unless noted (unaudited)

In Canadian Dollars,unless noted(unaudited)
	Six Months	July 13, 2021 to
	December 31, 2022	December 31, 2021
	$	$
OPERATING ACTIVITIES
Net loss for the period	(1,256,767)	(153,012)
Share-based compensation	870,000
Changes in non-cash working capital items:
Accounts receivable	(19,802)	(3,150)
Prepaid expenses	(100,000)	-
Accounts payable and accrued liabilities	2,618	111,525
Cash used in operating activities	(503,951)	(44,637)
FINANCING ACTIVITY
Proceeds from share issuances	-	1,451,506
Cash received from financing activity	-	1,451,506
Net change in cash	(503,951)	1,406,869
Cash, beginning of period	1,670,855	-
Cash, end ofperiod	1,166,904	1,406,869

Supplemental cash flow information – Note 8

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

VORTEX ENERGY CORP. Notes to the Condensed Interim Financial Statements For the Six Months Ended December 31, 2022 In Canadian Dollars, unless noted (unaudited)

1. NATURE OF OPERATIONS

Vortex Energy Corp. (formerly, Sustainable Green Mining Corp.) (the “Company”) was incorporated under the laws of British Columbia on July 13, 2021.

The Company’s registered office and principal place of business is 1930 – 1177 West Hastings Street, British Columbia V6C 4T5.

The Company was incorporated with the intention of pursuing a strategic acquisition in the green energy and mineral exploration sector. On December 28, 2022, the Company’s common shares were approved for listing and trading on the Canadian Securities Exchange under the symbol “VRTX”.

These condensed interim financial statements for the six months ended December 31, 2022 (the “financial statements”) were approved by the Board of Directors on March 1, 2023.

2. GOING CONCERN

The Company has incurred losses since inception and has no current source of operating revenue and is accordingly dependent upon the receipt of equity and/or related party debt financing on terms which are acceptable.

These financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations as they come due. At December 31, 2022 the Company had total shareholders’ equity of $1,257,447 working capital of $1,182,447 and had a net loss and negative operating cash flows. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but is not limited to, twelve months from the end of the reporting period. The Company expects to incur further losses in the development of its business.

These events and conditions indicate a material uncertainty which may cast significant doubt about the Company’s ability to continue as a going concern. If for any reason, the Company is unable to continue as a going concern, this could result in adjustments to the amounts and classifications of assets and liabilities in the Company’s financial statements and such adjustments could be material.

3. BASIS OF PRESENTATION

a) Basis of preparation

In these financial statements, unless otherwise indicated, all amounts are expressed in Canadian dollars, which is the Company’s functional and presentation currency.

These financial statements have been prepared in accordance with International Accounting Standard ("IAS") 34 Interim Financial Reporting using accounting policies consistent with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board ("IASB"). These financial statements are condensed as they do not include all of the information required by IFRS for annual financial statements and therefore should be read in conjunction with the Company’s audited financial statements for the year ended June 30, 2022.

b) Foreign currencies

The Company’s functional and presentation currency is the Canadian dollar.

VORTEX ENERGY CORP. Notes to the Condensed Interim Financial Statements For the Six Months Ended December 31, 2022 In Canadian Dollars, unless noted (unaudited)

Non-monetary assets and liabilities that are measured at historical cost are translated into Canadian dollars using the exchange rate in effect at the date of the initial transaction and are not subsequently restated. Non-monetary assets and liabilities that are measured at fair value or a revalued amount are translated into Canadian dollars by using the exchange rate in effect at the date the value is determined, and the related translation differences are recognized in net income or other comprehensive loss consistent with where the gain or loss on the underlying non-monetary asset or liability has been recognized.

c) Significant accounting judgements and estimates

The timely preparation of these financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of assets, liabilities and expenses, and the disclosure of contingent assets and liabilities. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis.

Revisions to estimates are recognized prospectively. As at December 31, 2022, the Company has identified the following as material estimates:

i. Share-based compensation

Management determines fair value for share-based payments using market-based valuation techniques. The fair value of the market-based and performance-based share awards are determined at the date of grant using generally accepted valuation techniques. Assumptions are made and judgement used in applying valuation techniques. These assumptions and judgements include estimating the future volatility of the stock price, expected dividend yield, future employee turnover rates and future employee stock option exercise behaviors and corporate performance. Similar calculations are made to value warrants. Such judgements and assumptions are inherently uncertain. Changes in these assumptions affect the fair value estimates.

In the preparation of these financial statements, management has made judgements, aside from those that involve estimates, in the process of applying the accounting policies. The following critical judgements can have an effect on the amounts recognized in the financial statements:

ii. Exploration and evaluation assets

The Company is required to make certain judgements in assessing indicators of impairment of exploration and evaluation assets. Judgement is required to determine if the right to explore will expire in the near future or is not expected to be renewed. Judgement is required to determine whether substantive expenditures on further exploration for and evaluation of mineral resources in specific areas will not be planned or budgeted. Judgement is required to determine if the exploration for and evaluation of mineral resources in specific areas have not led to the commercially viable quantities of mineral resources and the Company will discontinue such activities. Judgement is required to determine whether there are indications that the carrying amount of an exploration and evaluation property is unlikely to be recovered in full from successful development of the project or by sale.

4. CHANGES IN SIGNIFICANT ACCOUNTING POLICIES

There are no new standards issued, but not yet effective, that are anticipated to have a material impact on the Company’s financial statements.

VORTEX ENERGY CORP. Notes to the Condensed Interim Financial Statements For the Six Months Ended December 31, 2022 In Canadian Dollars, unless noted (unaudited)

5. EXPLORATION AND EVALUATION ASSETS

a) Alliance Uranium Project

On January 4, 2022, the Company entered into an asset purchase agreement for the purchase of the mineral property referred to as the Alliance Uranium Project located in Quebec, Canada. Pursuant to the terms of the asset purchase agreement, the Company will need to issue 600,000 common shares, which will be subject to certain escrow provisions, and $10,000 cash.

b) Fire Eye Property

On March 10, 2022 (the “effective date”), the Company entered into a property option agreement for the option to purchase the mineral property referred to as the Fire Eye Property located in Saskatchewan, Canada, upon satisfaction of each of the following obligations:

• i. Total cash consideration of $230,000 to be paid as follows:

• a. $75,000 within five calendar days of the effective date (paid ) ;

• b. $75,000 on or before 10 calendar days after the seller (or “Optionor”) has delivered a technical report for the property which complies with the requirements of National Instrument 43-101 Standards of Disclosure for Mineral Projects ($21,375 in prepaid expenses as at December 31, 2022; paid in full subsequent to December 31, 2022) ;

• c. $30,000 on or before March 10, 2023;

• d. $50,000 on or before March 10, 2024.

• ii. Issuing the Optionor an aggregate of 400,000 common shares, as follows:

• a. 100,000 common shares on or before 10 calendar days after the Optionor has delivered a technical report for the property which complies with the requirements of National Instrument 43-101 Standards of Disclosure for Mineral Projects (issued subsequent to December 31, 2022) ;

• b. 150,000 common shares on or before March 10, 2023; and

• c. 150,000 common shares on or before March 10, 2024.

• iii. Incurring an aggregate expenditure amount of $360,000 on the property, as follows: a. $110,000 of expenditures on or before March 10, 2023; and

• b. $250,000 of expenditures on or before March 10, 2024.

6. EQUITY

a) Authorized Share Capital

Unlimited number of common shares without par value.

The Company has established an omnibus equity incentive plan (the “Plan”) dated August 8, 2022, contemplating the grant of equity-based incentive awards, in the form of options, restricted share units (“RSUs”), and deferred share units, to employees, officers, directors and consultants of the Company.

The Plan is a 20% rolling plan, pursuant to which share awards may be granted by the Company not exceeding 20% of the issued and outstanding common shares at the time of grant.

b) Issued Share Capital

On July 13, 2021, the Company issued 500 common shares at $0.01 per common share for total proceeds of $5, pursuant to incorporation.

On July 27, 2021, the Company issued 21,000,000 common shares at $0.02 per common share for total proceeds of $420,000, pursuant to a private placement.

VORTEX ENERGY CORP. Notes to the Condensed Interim Financial Statements For the Six Months Ended December 31, 2022 In Canadian Dollars, unless noted (unaudited)

On December 15, 2021, the Company issued 10,315,000 common shares at $0.10 per common share for total proceeds of $1,031,500 and 200,000 common shares valued at $20,000 for services provided in connection with the financing. Net cash proceeds were $1,019,343 after cash and non-cash share issuance costs of $32,157.

On May 25, 2022, the Company closed a non-brokered private placement, pursuant to which the Company issued 1,412,500 units at a price of $0.40 per unit for gross proceeds of $565,000. Each unit is comprised of one common share and one non-transferable share purchase warrant, exercisable for a period of 24 months at a price of $0.75 per share. Using the residual method, 100% of the proceeds were allocated to the value of the common shares, as they were issued at the fair value at the time of issuance. As a result, the fair value of the warrants is nil.

c) Options

A summary of the Company’s options is as follows:

	Number of		Weighted Average		Weighted Average
	Options	Exercisable	Exercise Price	Expiry Date	Remaining Life
Balance, June 30, 2022	-	-	-
Granted - October 5, 2021	500,000	500,000	$0.10	October 5, 2024	1.76
Granted - December 28,2022	750,000	750,000	$0.40	December 28,2024	1.99
Balance, December 31, 2022	1,250,000	1,250,000	$0.28		1.90

During the six months ended December 31, 2022, the Company recognized $190,000 in share-based payment expense in connection with the granting and vesting of options (2021 – $nil).

The fair value of options granted during the six ended December 31, 2022 was determined using the following range of Black-Scholes Option Pricing Model assumptions:

Share price on grant date	$0.10 - $0.40
Exercise price	$0.10 - $0.40
Expected life	2 to 3 years
Volatility*	100%
Risk-free interest rate	3.85%-4.02%

*Since the Company does not have enough history of trading prices, the Company utilized annualized volatility of comparable startup companies

d) Restricted Share Units

A summary of the Company’s restricted share units (“RSUs”) is as follows:

	Number of		Weighted Average		Weighted Average
	RSUs	Exercisable	Fair Value	Expiry Date	Remaining Life
Balance, June 30, 2022	-	-	-
Granted - December 28,2022	1,700,000	1,700,000	$0.40	December 28,2024	1.99
Balance, December 31, 2022	1,700,000	1,700,000	$0.40		1.99

During the six months ended December 31, 2022, the Company granted the above RSUs, vesting immediately, with a four-month trading hold on the underlying share. Upon vesting, each RSU will be redeemable for one common share of the Company The fair value of the RSUs was determined based on the Company’s most recent private placement before the Company’s share price was listed at $0.40/share.

During the six months ended December 31, 2022, the Company recognized $680,000 in stock-based compensation expense related to the granting and vesting of RSUs (2021 – $nil). As the Company intends to settle the RSUs through equity settlement, a corresponding amount was credited to stock-based payment reserve.

VORTEX ENERGY CORP. Notes to the Condensed Interim Financial Statements For the Six Months Ended December 31, 2022 In Canadian Dollars, unless noted (unaudited)

e) Warrants

A summary of the Company’s common share purchase warrants activity during the period is as follows:

	Number of	Weighted Average		Remaining
	Warrants	Exercise Price	Expiry Date	Life
Issued, May 25, 2022	1,412,500	$0.75	25-May-24	1.40
Balance, December 31, 2022	1,412,500	$0.75		1.40

7. RELATED PARTY TRANSACTIONS AND BALANCES

Key management personnel include persons having the authority and responsibility for planning, directing, and controlling the activities of the Company. The Company has determined that key management personnel consists of the directors and corporate officers.

Related party transactions are conducted in the normal course of business and are measured at the exchange amount, which is the amount of consideration established and agreed to by the parties.

The aggregate value of transactions relating to key management personnel during the six months ended December 31, 2022 were as follows:

Equity incentives granted and fees paid to		Equity Incentive	Equity Incentive
the following for the services rendered	Equity Incentive	Amount	Fair Value	Fees Paid
			$	$
The CEO and Director of the Company
pursuant to officer services provided	Options, RSUs	400,000	115,000	25,650
The CFO of the Company pursuant to officer
services provided	Options, RSUs	750,000	125,000	45,750
A Director of the Company pursuant to director
services provided	Options, RSUs	1,250,000	455,000	-
A Director of the Company pursuant to director
services provided	Options	250,000	62,500	-
A company owned by a Director providing
advisory services to the Company	-	-	-	95,750
Total		2,650,000	757,500	167,150

For the period ended December 31, 2021, the Company incurred $31,500 in management fees for CEO and CFO services provided included in consulting and salaries and nil equity incentives.

At December 31, 2022, $28,407 due to companies controlled by the corporate officers and directors of the Company is included in accounts payable and accrued liabilities. The amount payable is non-interest bearing, is unsecured, and has no specific terms of repayment.

8. SUPPLEMENTAL CASH FLOW INFORMATION

During the six months ended December 31, 2022, the Company incurred no transactions related to investing of financing activities that were excluded from the statement of cash flows.

No interest nor income tax were paid or received in cash during the six months ended December 31, 2022 or the period from incorporation on July 13, 2021 to December 31, 2021.

9. MANAGEMENT OF CAPITAL

The Company defines the capital that it manages as its shareholders’ equity, which was $1,257,447 at December 31, 2022.

VORTEX ENERGY CORP. Notes to the Condensed Interim Financial Statements For the Six Months Ended December 31, 2022 In Canadian Dollars, unless noted (unaudited)

The Company’s objective when managing capital is to maintain corporate and administrative functions necessary to support the Company’s operations.

The Company manages its capital structure in a manner that provides sufficient funding for operational and capital expenditure activities. Funds are intended to be secured, when necessary, through debt funding or equity capital raised by means of private placements. There can be no assurances that the Company will be able to obtain debt or equity capital in the case of working capital deficits. The Company does not pay dividends and has no long-term debt or bank credit facility. The Company is not subject to externally imposed capital requirements.

10. RISK MANAGEMENT

a) Financial Risk Management

The Company may be exposed to risks of varying degrees of significance which could affect its ability to achieve its strategic objectives. The main objectives of the Company’s risk management processes are to ensure that risks are properly identified and that the capital base is adequate in relation to those risks. The principal risks to which the Company is exposed are described below.

(i) Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company is not exposed to credit risk as its does not have significant obligations to third parties.

(ii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. As at December 31, 2022, the Company’s working capital is $1,182,447 and it does not have any long-term liabilities.

The Company may seek additional financing through debt or equity offerings, but there can be no assurance that such financing will be available on terms acceptable to the Company or at all. The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at December 31, 2022, the Company had cash of $1,166,904 and total liabilities of $125,634 .

(iii) Market risk

Market risk incorporates changes in market factors such as interest rates, currency rates, and equity prices.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. At December 31, 2022, the Company does not have any interest bearing assets or liabilities and is not exposed to interest rate risk.

Currency rate risk

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company’s assets and liabilities are denominated in Canadian Dollars, and transactions are originated in Canadian Dollars; thus the Company does not consider itself to be exposed to significant currency risk.

Equity market risk

Equity market risk is the risk of economic loss due to changes in the prices of the common shares; this includes both the systematic and specific components of common share price fluctuations. The Company’s common shares are currently not publicly listed; thus does the Company does not consider itself to be exposed to significant equity market risk.

VORTEX ENERGY CORP. Notes to the Condensed Interim Financial Statements For the Six Months Ended December 31, 2022 In Canadian Dollars, unless noted (unaudited)

b) Fair values

The carrying values of accounts payable and accrued liabilities approximate their fair values due to their short-term to maturity.

Financial instruments are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2 – Quoted prices in markets that are not active, or inputs that are not observable, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

The Company’s cash is considered to be Level 1 within the fair value hierarchy.

11. SUBSEQUENT EVENTS

On January 20, 2023, the Company issued 100,000 common shares to the Optionor of the Fire Eye Property in accordance with the property option agreement (Note 5).

On January 20, 2023, the Company granted 2,225,000 restricted share units (“RSUs”) to certain directors and consultants of the Company. The RSUs will vest in equal quarterly installments with each vested RSU entitling the holder to receive one common share of the Company.