Western Resources Corp. — Audit Report / Information 2022

Dec 30, 2022

EXPLORINVEST CAPITAL CORP.

CONSOLIDATED FINANCIAL STATEMENTS

Years Ended May 31, 2022 and 2021

(Expressed in Canadian Dollars)

INDEPENDENT AUDITOR'S REPORT

To the Shareholders of Explorinvest Capital Corp.

Opinion

We have audited the consolidated financial statements of Explorinvest Capital Corp. (the "Company"), which comprise the consolidated statements of financial position as at May 31, 2022 and 2021, and the consolidated statements of loss and comprehensive loss, changes in shareholders' deficit and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the "financial statements").

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at May 31, 2022 and 2021, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards.

Basis for Opinion

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

Material Uncertainty Related to Going Concern

We draw attention to Note 1 to the financial statements, which describes events or conditions that indicate 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 comprises the information included in Management's Discussion and Analysis.

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

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

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

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

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

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

Auditor's Responsibilities for the Audit of the Financial Statements

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

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

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

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

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

December 23, 2022

EXPLORINVEST CAPITAL CORP. Consolidated Statements of Financial Position

(Expressed in Canadian dollars)

		May 31,2021
$53,33524,050	$	7,303-
77,385		7,303
15,000		-
-		7,366
		14,669
$16,2247,500	$	-
344,90276,500		10,000165,000-
445,126		175,000
100(352,841)		100(160,431)
(352,741)		(160,331)
	$
$	202292,385-	May 31,$

Nature of operations and going concern (Note 1)

Subsequent Events (Note 15)

"Donald Gordon" Director

EXPLORINVEST CAPITAL CORP.

Consolidated Statements of Loss and Comprehensive Loss

(Expressed in Canadian dollars)

May 31,		May 31,2021
		$-
		-
		-
		-
		18,900
		7,731
		1,500
		6,300
8,466		-
$(192,410)	$	(34,431)
		(344)
		100
$$	20229,05024,9002,32549918,00010,752100,41818,000(0.020)9,549,849	$

EXPLORINVEST CAPITAL CORP. Consolidated Statements of Changes in Shareholders' Deficit (Expressed in Canadian dollars)

	Share Capital
	Number ofShares		CapitalStock	Deficit	Total
Balance, May 31, 2020Net and comprehensive loss	100-	$	100-	$ (126,000)(34,431)	$ (125,900)(34,431)
Balance, May 31, 2021Issuance of Web Watcher Arrangement Shares (Notes 1 and9)	10014,403,698		100-	(160,431)-	(160,331)-
Cancellation of initial shares upon completion of Web WatcherPlan Arrangement (Notes 1 and 9)Net and comprehensivefor the year	(100)-		--	-(192,410)	-(192,410)
Balance, May 31, 2022	14,403,698	$	100	$ (352,841)	$ (352,741)

EXPLORINVEST CAPITAL CORP.

Consolidated Statements of Cash Flows

(Expressed in Canadian dollars)

	May 31,2022	May 31,2021
Cash used in operating activities
Net loss for the year	$(192,410)	$(34,431)
Item not involving cash:
Write off of Exploration and evaluation assets	7,366	-
Changes in non-cash working capital:
Accounts payable and accrued liabilities	23,724	-
Net cash used by operating activities	(161,320)	(34,431)
Cash from financing activities
Advances to related party	179,902	39,000
Share subscription receivable	-	100
Repayment of short term loan payable	(10,000)	10,000
Proceeds received from share subscriptions	76,500	-
Net cash provided in financing activities	246,402	49,100
Cash from investing activities
Advance for LOI	(24,050)	-
Advance for loan receivable	(15,000)	-
Deposit paid for Exploration and evaluation assets	-	(7,366)
Net cash used in investing activities	(39,050)	(7,366)
Change in cash	46,032	7,303
Cash, beginning of year	7,303	-
Cash, end of year	$53,335	$7,303

1. NATURE OF OPERATIONS AND GOING CONCERN

Explorinvest Capital Corp. (formerly SebCorp Technology Ltd.) (the "Company") was incorporated under the British Columbia Business Corporation Act on October 30, 2014, as a wholly owned subsidiary of a reporting issuer, Web Watcher Systems Ltd. ("Web Watcher"). Web Watcher received shareholder approval to a Plan of Arrangement at an annual general and special meeting of shareholders held on January 29, 2015 and received final approval to the Plan of Arrangement from the Supreme Court of British Columbia on February 5, 2015. Pursuant to the arrangement the Company received a BC Supreme Court Order to issue 14,403,698 common shares to shareholders of Web Watcher ("The Web Watcher Arrangement Shares"). Effective June 19, 2017, the Company changed its name from SebCorp Technology Ltd. to Explorinvest Capital Corp. and changed its business to mining property acquisition and exploration. The Web Watcher Arrangement Shares were distributed to Web Watcher shareholders on October 1, 2021.

The Company's registered office is located at Suite 302 - 370 Esplanade East, North Vancouver, British Columbia, V7L 1A4.

These consolidated financial statements were approved for issuance by the Board of Directors of the Company on December 23, 2022.

Going Concern

These consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business rather than through a process of forced liquidation. As at May 31, 2022, the Company has not achieved profitable operations, had recurring losses, a deficit of $352,841 (2021 - $160,431), a working capital deficiency of $367,741 (2021 – $167,697), and expects to incur further losses in the development of its business, all of which casts substantial doubt about the Company's ability to continue as a going concern. The Company's ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence and such adjustments could be material.

On March 11, 2020, the World Health Organization characterized the outbreak of a strain of the novel coronavirus ("COVID-19") as a pandemic which has resulted in a series of public health and emergency measures that have been put in place to combat the spread of the virus. The duration and impact of COVID-19 is unknown at this time, and it is not possible to reliably estimate the impact that the length and severity of these developments will have on the financial results and condition of the Company in future periods, including the possible impact on future financing opportunities.

2. BASIS OF PRESENTATION

Statement of Compliance

These consolidated financial statements have been prepared using accounting policies in compliance with International Financial Reporting Standard ("IFRS") as issued by International Accounting Standards Board ("IASB"), and interpretations of the IFRS Interpretations Committee ("IFRIC").

2. BASIS OF PRESENTATION (continued)

Basis of Presentation

These consolidated financial statements were prepared on a historical cost basis, except for financial instruments classified as fair value through profit or loss. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information. The consolidated financial statements are presented in Canadian dollars, which is also the Company and all its subsidiaries functional currency.

Consolidation

These consolidated financial statements include the accounts of the Company and its controlled entities. Control occurs when the Company is exposed to, or has right to, variable returns from its involvement with an investee and has the ability to affect those returns through its power over the investee. Details of controlled entities are as follows:

	Date ofIncorporation	PercentageOwned
Gcorp Strategies Inc.	1/19/2020	100%
50N Biotechnology Group Ltd.*	1/29/2021	100%
Aquazoom Hydropower Solutions Inc.	3/11/2021	100%
Fungoseta Health Acquisitions Inc.	3/11/2021	100%
Musirum Health Science Inc.	3/11/2021	100%
1325966 B.C. Ltd.	9/27/2021	100%

Inter-company balances and transactions, including unrealized income and expenses arising from intercompany transactions, are eliminated on consolidation.

*50N Biotechnology Group Ltd. was deconsolidated as at May 2, 2022 (Note 14).

3. SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates and Judgments

The preparation of the financial statements in conformity with IFRS requires the Company's management to make judgments, estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, revenues and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected.

Significant areas requiring the use of estimates include the deferred income tax asset valuation allowances.

Judgments made by management in the application of IFRS include the assumption that the Company is a going concern and will continue in operation in the foreseeable future.

Cash

The Company considers cash to include amounts held in banks. The Company places its cash with major financial institutions in Canada.

EXPLORINVEST CAPITAL CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED MAY 31, 2022 AND 2021

(Expressed in Canadian dollars)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

Functional and presentation currency

The consolidated financial statements are presented in Canadian dollars which is the functional currency of the Company and its subsidiaries.

Foreign currency

Transactions in currencies other than the Canadian dollar, the functional currency of the Company, are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Balances in foreign currencies are translated at period end rates. Foreign exchange gains and losses resulting from the translation of assets and liabilities denominated in foreign currencies at exchange rates prevailing at the consolidated statement of financial position date are recognized in the consolidated statement of comprehensive loss.

Share-based Compensation

Share-based payments to employees are measured at the fair value of the instruments issued and amortized over the vesting periods. Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured and are recorded at the date the goods or services are received. The corresponding amount is recorded to the share-based payment reserve. The fair value of options is determined using the Black–Scholes Option Pricing Model. The number of shares and options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognized for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest.

Loss per Share

Basic earnings/loss per share is computed by dividing the net income or loss applicable to common shares of the Company by the weighted average number of common shares outstanding for the relevant period.

Diluted earnings/loss per common share is computed by dividing the net income or loss applicable to common shares by the sum of the weighted average number of common shares issued and outstanding and all additional common shares that would have been outstanding, if potentially dilutive instruments were converted.

Share capital

Common shares are classified as equity. Transaction costs directly attributable to the issuance of common shares are recognized as a deduction from equity, net of any tax effects. Common shares issued for consideration other than cash are valued based on their market value at the date the shares are issued.

Income Taxes

Income tax expense comprises of current and deferred tax. Current tax and deferred tax are recognized in net income except to the extent that it relates to a business combination or items recognized directly in equity or in other comprehensive loss/income.

Current income taxes are recognized for the estimated income taxes payable or receivable on taxable income or loss for the current year and any adjustment to income taxes payable in respect of previous years. Current income taxes are determined using tax rates and tax laws that have been enacted or substantively enacted by the year-end date.

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

Deferred tax assets and liabilities are recognized where the carrying amount of an asset or liability differs from its tax base, except for table temporary differences arising on the initial recognition of goodwill and temporary differences arising on the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting nor taxable profit or loss.

Recognition of deferred tax assets for unused tax losses, tax credits and deductible temporary differences is restricted to those instances where it is probable that future taxable profit will be available against which the deferred tax asset can be utilized. At the end of each reporting period the Company reassesses unrecognized deferred tax assets. The Company recognizes a previously unrecognized deferred tax asset to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Exploration and evaluation assets

All costs related to the acquisition, exploration and development of mineral properties are capitalized. Upon commencement of commercial production, the related accumulated costs are amortized against projected income using the units-of-production method over estimated recoverable reserves.

Management annually assesses carrying values of non-producing properties and properties for which events and circumstances may indicate possible impairment. Impairment of a property is generally considered to have occurred if the property has been abandoned, there are unfavourable changes in the property economics, there are restrictions on development, or when there has been an undue delay in development, which exceeds three years. In the event that estimated discounted cash flows expected from its use or eventual disposition are determined by management to be insufficient to recover the carrying value of the property, the carrying value is written down to the estimated recoverable amount.

The recoverability of mineral properties and exploration and development costs is dependent on the existence of economically recoverable reserves, the ability to obtain the necessary financing to complete the development of the reserves, and the profitability of future operations. Amounts capitalized to mineral properties as exploration and development costs do not necessarily reflect present or future values.

When options are granted on mineral properties or properties are sold, proceeds are credited to the cost of the property. If no future capital expenditure is required and proceeds exceed costs, the excess proceeds are reported as a gain.

Financial Instruments

(a) Classification and measurement

Financial assets

The classification and measurement of financial assets is based on the Company's business models for managing its financial assets and whether the contractual cash flows represent solely payments of principal and interest ("SPPI"). Financial assets are initially measured at fair value less, for an item not at fair value through profit or loss, transaction costs directly attributable to its acquisition or issue, and are subsequently measured at either (i) amortized cost; (ii) fair value through other comprehensive income, or (iii) at fair value through profit or loss.

Amortized cost

Financial assets classified and measured at amortized cost are those assets that are held within a business model whose objective is to hold financial assets in order to collect contractual cash flows, and the contractual terms of the financial asset give rise to cash flows that are SPPI. Financial assets classified at amortized cost are measured using the effective interest method. The Company's advance and loan receivable are carried at amortized cost.

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair value through other comprehensive income ("FVTOCI")

Financial assets classified and measured at FVTOCI are those assets that are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise to cash flows that are SPPI. The Company does not have any assets classified and measured at FVTOCI.

Fair value through profit or loss ("FVTPL")

Financial assets classified and measured at FVTPL are those assets that do not meet the criteria to be classified at amortized cost or at FVTOCI. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets held at FVTPL are included in profit or loss in the period in which they arise. The Company's cash is classified in this category.

Financial liabilities

Financial liabilities are recognized when the Company becomes a party to the contractual provisions of the financial instrument. A financial liability is derecognized when it is extinguished, discharged, cancelled or when it expires. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or financial liabilities subsequently measured at amortized cost. Due to related parties and accounts payable are measured at amortized cost.

Financial liabilities subsequently measured at amortized cost are non-derivatives and are initially recognized at fair value net of any transaction costs directly attributable to the issuance of the instrument and subsequently carried at amortized cost using the effective interest rate method. This ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the consolidated statements of financial position. Interest expense in this context includes initial transaction costs and premiums payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

(b) Derecognition of 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 profit or loss. However, gains and losses on derecognition of financial assets classified as FVTOCI remain within accumulated other comprehensive loss.

(c) Derecognition of financial liabilities

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

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

(d) Impairment of financial assets

The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortized cost. At each reporting date, the Company measures the loss allowance for the financial asset at an amount equal to the lifetime expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. If at the reporting date, the financial asset has not increased significantly since initial recognition, the Company measures the loss allowance for the financial asset at an amount equal to twelve month expected credit losses. The Company shall recognize in the consolidated statement of loss and comprehensive loss, as an impairment gain or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized.

Accounting Standards

A number of new standards and amendments to existing standards have been issued by the IASB that are mandatory for accounting periods beginning on or after January 1, 2022, or later periods. The Company has not early adopted these new standards in preparing these consolidated financial statements. These new standards are either not applicable or are not expected to have a significant impact on the Company's condensed consolidated financial statements.

4. ADVANCE

During the year ended May 31, 2022, the Company advanced $24,050 to a non-related party. The funds advanced are unsecured, non-interest bearing and is due on demand (Note 15).

5. LOAN RECEIVABLE

During the year ended May 31, 2022, the Company loaned $15,000 to IndustryWorks Studio Inc. ("IWS").

The loan is unsecured, non-interest bearing and is due on demand.

6. EXPLORATION AND EVALUATION ASSET

Kelsey Property

Effective May 10, 2021, the Company executed a non-binding Letter of Intent outlining the principal terms and conditions upon which the Company will acquire an option to earn up to an undivided 100% interest in the Kelsey Property located in Washington, USA (the "Kelsey LOI"). A deposit of US$6,000 was paid upon signing the LOI ($7,366). In accordance with the Kelsey LOI the execution of mutually acceptable definitive agreement (the "Definitive Agreement"), was to be signed by June 18, 2021. No definitive agreement was entered into by June 18, 2021, and the Company is no longer pursuing the Kelsey LOI. Accordingly, the deposit was written off during the year end May 31, 2022.

7. SHORT TERM LOAN PAYABLE

As at May 31, 2021, the Company had entered into a loan payable of $10,000 that was unsecured, noninterest bearing and was due on demand. The loan was repaid in full during the 2022 fiscal year.

8. RELATED PARTY TRANSACTIONS

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 Board of Director members.

The aggregate value of transactions relating to key management personnel was as follows:

	May 31,2022	May 31,2021
Management fees accrued to adirector	$18,000	$18,900
Office and administrative expenses accrued to a Companycontrolled by adirector	4,725	6,300
Rent accrued to a Company controlled by adirector	18,000	6,300
	$40,725	$31,500

As at May 31, 2022, $344,902 (2021 - $165,000) was owing to a company controlled by a director of the Company. The amount payable is non-interest bearing, unsecured, and has no specified terms of repayment.

9. CAPITAL STOCK

a) Authorized

Unlimited number of common shares

b) Issued and outstanding

In accordance with the terms of the Plan of Arrangement with Web Watcher (Note 1) the Company issued 14,403,698 common shares of the Company to Web Watcher shareholders on October 1, 2021, upon which the initial 100 common shares of the Company were cancelled and returned to treasury.

10. SHARE SUBSCRIPTIONS RECEIVED

Share subscriptions received represent funds received by Musirum Health Sciences ("Musirum"). Musirum has an obligation to issue 765,000 shares with respect to these funds received. As at May 31, 2022, no shares have been issued by Musirum. If the shares are not issued, the proceeds are to be returned to the subscribers.

11. INCOME TAXES

The Company's provision for income taxes differs from the amounts computed by applying the combined Canadian federal and provincial income tax rates of 27% (2021: 27%) to the loss as a result of the following:

	2022	2021
Loss for the year	$ (192,410)	$ (34,431)
Computed income taxes recovery at statutoryrate of27%	(51,951)	(9,296)
Change in unrecognized deferred tax assets	51,951	9,296
	$-	,55$-

EXPLORINVEST CAPITAL CORP. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED MAY 31, 2022 AND 2021

(Expressed in Canadian dollars)

11. INCOME TAXES (continued)

The tax effects of temporary timing differences that give rise to significant components of the deferred tax assets and liabilities are as follows:

	2022	2021
Non-capital losses	$95,267	$43,316
Unrecognized deferred income tax assets	(95,267)	(43,316)
Total unrecognized deferred income tax assets	$-	$-

The Company has non-capital losses for income tax purposes of approximately $352,841 (2021 - $160,431), which may be available to reduce taxable income in future years. The potential benefit of these losses has not been recognized as a deferred tax benefit, as currently it is not probable that such benefit will be utilized in the foreseeable future. These losses expire as follows:

Years of Expiry
2039	$94,500
2040	31,500
2041	34,431
2042	192,410
Total	$352,841

12. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The three levels of the fair value hierarchy are as follows:

Level 1: Values based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities. Cash is measured using level 1 inputs.

Level 2: Values based on quoted prices in markets that are not active or models inputs that are observable either directly or indirectly for substantially the full term of the asset or liability.

Level 3: Values based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.

As at May 31, 2022, and 2021, the Company had no financial assets measured and recognized on the consolidated statement of financial position at fair value belonging in Level 2 or Level 3 of the fair value hierarchy.

The Company's risk exposures and the possible impact on the Company's financial instruments are summarized below:

Credit risk is the risk that one party to a financial instrument will cause a loss for the other party by failing to discharge an obligation. The Company is subject to normal industry credit risks. The Company is exposed to credit risk on the advance and loan receivable. Credit risk on the advance and loan receivable is assessed as high. Credit risk on cash is assessed as low as the cash is held at reputable financial institutions.

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at May 31, 2022, the Company had a working capital deficit of $367,741 (2021 - $167,697) and current liabilities of $445,126 (2021 - $175,000). Liquidity risk is assessed as high.

12. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (continued)

Foreign exchange risk is the risk that the Company's financial instruments will fluctuate in value as a result of movements in foreign exchange rates. The Company is not exposed to foreign exchange risk.

Interest rate risk is the risk that future cash flows of a financial instrument will fluctuate because of changes in interest rates. The Company is not exposed to interest rate risk.

13. CAPITAL DISCLOSURES

The Company considers its capital under management to be comprised of shareholders' deficiency and any debt that it may issue. The Company's objectives when managing capital are to continue as a going concern and to maximize returns for shareholders over the long term. The Company is not subject to any capital restrictions. There has been no change in the Company's objectives in managing its capital since incorporation.

14. PLAN OF ARRANGEMENT

Spin out transaction

On November 1, 2021, an amended and restated Plan of Arrangement was entered into by the Company and its wholly owned subsidiaries, Aquazoom Hydropower Solutions Inc. (Aquazoom), 50N Biotechnology Group Ltd., Gcorp Strategies Inc., Fungoseta Health Acquisitions Inc., Musirum Health Science Inc., and 1325966 BC Ltd., which was approved by the shareholders of the Company on December 17, 2021 and finalized by a Final Order granted by the Supreme Court of British Columbia on January 7, 2022.

Pursuant to the Arrangement Agreement:

• a) The Company has committed to transferring its interest in the following to each of its subsidiaries:
  • i) A non-binding letter of intent with AquaZoom AG dated April 1, 2021 to Aquazoom Hydropower Solutions Inc. (Note 15);
  • ii) A non-binding letter of intent with Ebuy Development Ltd. dated January 4, 2021 to 50N Biotechnology Group Ltd.;
  • iii) A non-binding letter of intent with Alphatech Capital Management Ltd. dated October 1, 2021 to Gcorp Strategies Inc.;
  • iv) A non-binding letter of intent with Snap Brands Ventures Inc. dated April 1, 2021 to Fungoseta Health Acquisitions Inc.;
  • v) A non-binding letter of intent with IndustryWorks Studio Inc. dated September 16, 2021 to Musirum (Note 15); and
  • vi) A non-binding letter of intent with Dawn Asset Global Ltd. dated September 7, 2021 to 1325966 BC Ltd.

The non-binding letters all expired as at May 31, 2022.

b) In exchange, the number of shares issuable will be equal to the number of the Company's shares issued by the Company at the end of close of business on November 21, 2021 (the share distribution record date).

14. PLAN OF ARRANGEMENT (continued)

• c) The Company will be entitled to 14,403,698 shares of each of the six subsidiaries. The following shares were issued during the year:
  • i) The common shares of 50N Biotechnology Group Ltd. were distributed to the Company's shareholders by way of direct registration statements on May 2, 2022 resulting in the deconsolidation of 50N Biotechnology Group Ltd. in the consolidated financial statements as at May 2, 2022.

15. SUBSEQUENT EVENTS

Amalgamation Agreement

On July 29, 2022, Musirum; 1373379 B.C. Ltd. ("Subco"), a wholly owned subsidiary of Musirum; and IWS, a privately-held entertainment and multimedia company that buys, sells and distributes movies and television shows internationally entered into an Amalgamation Agreement. Musirum and IWS wish to combine their respective businesses by way of a "three-cornered" amalgamation in which Subco will amalgamate with IWS to form one corporation ("Amalco"). Pursuant to which:

• (i) Musirum shall issue securities of Musirum to the security holders of IWS in exchange for their securities of IWS outstanding, on a one-for-one basis; and
• (ii) Amalco shall become a wholly owned subsidiary of Musirum.

At the date of release of these consolidated financial statements this agreement is not closed.

During the year ended May 31, 2022, the Company loaned IWS $15,000 (Note 5).

On October 18, 2022, Musirum lent $50,000 to IWS (the "Loan"). The Loan has the following terms:

• (i) The Loan shall be repaid within thirty (30) days of receipt of the Loan funds;
• (ii) The Loan shall carry no interest;
• (iii) The Loan repayment is to be made within thirty (30) business days of the date that funds are received by IWS; and
• (iv) If IWS defaults with respect to any of its obligations hereunder or a material adverse change occurs with respect to the financial affairs of IWS, or the Amalgamation Agreement dated July 29, 2022 between IWS and Musirum is terminated for any reason by either party, all amounts owing to the Musirum shall become immediately due and payable upon written notice from Musirum.

Business Combination Agreement

On September 6, 2022, Aquazoom; and Stickit Ltd., a company incorporated under the laws of the State of Israel; entered into a business combination agreement to combine the business and assets of Stickit with those of Aquazoom. The business combination will be carried out by way of a triangular Merger between Aquazoom, Stickit, and a yet to be incorporated third entity. At the date of release of these consolidated financial statements this agreement is not closed.

Letter of Intent

Pursuant to a Letter of Intent ("LOI") dated September 19, 2022, the Company is considering acquiring one or more properties as well as certain issued and outstanding shares of New Frontier Exploration Corp. ("New Frontier"). The LOI acknowledges that an amount of $24,050 (Note 4) was paid to parties represented by New Frontier and such payments will be credited as the cash portion of consideration made for the proposed acquisition.

15. SUBSEQUENT EVENTS (continued)

This LOI states that the $24,050 is an advance owed by New Frontier to the Company and is required to be repaid in full in the event the parties fail to negotiate and settle the terms of a definitive agreement (the "Definitive Agreement") on or before January 15, 2023.

Plan of Arrangement

In accordance with the terms of the Plan of Arrangement, the following shares were issued subsequent to the year-end:

• i. Gcorp issued 14,403,698 of its common shares to the Company's shareholders on June 16, 2022.
• ii. Musirum issued 14,403,698 of its common shares to the Company's shareholders on July 4, 2022.
• iii. Aquazoom issued 14,403,698 of its common shares to the Company's shareholders on July 4, 2022.
• iv. 1325966 issued 14,403,698 of its common shares to the Company's shareholders on July 27, 2022.

Share subscriptions

Additional share subscriptions of $120,000 were received by Musirum. Musirum has an obligation to issue an additional 1,200,000 shares.