PELOTON MINERALS CORPORATION Peloton Minerals Corporation
Consolidated Financial Statements
(Expressed in United States Dollars)
For the Years Ended December 31, 2023 and 2022
INDEPENDENT AUDITOR'S REPORT
To the Shareholders of Peloton Minerals Corporation
Opinion
We have audited the consolidated financial statements of Peloton Minerals Corporation (the "Company"), which comprise the consolidated statements of financial position as at December 31, 2023 and 2022, and the consolidated statements of loss and comprehensive loss, changes in deficiency and cash flows for the years then ended, and notes to the consolidated financial statements, including material accounting policy information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as at December 31, 2023 and 2022, and its consolidated financial performance and its consolidated 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 Consolidated 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 consolidated 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 in the consolidated financial statements, which indicates that the Company incurred a net loss of $637,783 and had negative cash flows from operations of $773,371 during the year ended December 31, 2023 and, as of that date, the Company had an accumulated deficit of $15,499,134, and a working capital deficiency of $929,929. As stated in Note 1, these events or conditions, along with other matters as set forth in Note 1, indicate that a material uncertainties exists that may cast significant doubt upon the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2023. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Except for the matter described in the Material Uncertainty Related to Going Concern section, we have determined that there are no other key audit matters to communicate in our auditor's report.
Other Information
Management is responsible for the other information. The other information comprises Management's discussion and analysis, but does not include the financial statements and our auditor's report thereon.
Our opinion on the consolidated financial statementss does not cover the other information and we do not and will not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
We obtained the Management 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 material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated 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.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated 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 consolidated 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 consolidated 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 consolidated 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 consolidated financial statements, including the disclosures, and whether the consolidated 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.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor's report is Stephen McCourt.
Chartered Professional Accountants
Licensed Public Accountants
April 29, 2024
Toronto, Ontario
Peloton Minerals Corporation
Consolidated Statements of Financial Position
(Expressed in United States Dollars)
As at
December 31, | December 31, | ||||
2023 | 2022 | ||||
Assets | |||||
Current | |||||
Cash | $ | 38,818 | $ | 13,027 | |
HST receivable | 1,562 | - | |||
Share subscription receivable | 6,805 | - | |||
Prepaid expenses | 19,910 | 24,883 | |||
Total Current Assets | 67,095 | 37,910 | |||
Investment (Note 4) | 1,510,111 | - | |||
Equipment (Note 5) | 22,700 | 31,780 | |||
Reclamation bonds (Note 7) | 44,701 | 44,701 | |||
Total Assets | $ | 1,644,607 | $ | 114,391 | |
Liabilities | |||||
Current | |||||
Accounts payable and accrued liabilities (Notes 8 and 16) | $ | 840,317 | $ | 888,323 | |
Convertible debenture (Note 9) | 100,000 | 100,000 | |||
Loan payable (Note 10) | 56,707 | - | |||
Total Current Liabilities | 997,024 | 988,323 | |||
Derivative liability - convertible debenture (Note 9) | 167,078 | 138,152 | |||
Derivative liability - foreign currency warrants (Note 12) | 2,531,451 | 1,721,427 | |||
Deposit for shares to be issued | 3,677 | - | |||
Total Liabilities | 3,699,230 | 2,847,902 | |||
Shareholders' Deficiency | |||||
Capital stock (Note 11) | 11,006,001 | 10,798,104 | |||
Contributed surplus (Note 12) | 2,438,510 | 2,321,535 | |||
Accumulated other comprehensive income | - | 5,046 | |||
Deficit | (15,499,134) | (15,577,381) | |||
Deficiency attributable to shareholders of Peloton | (2,054,623) | (2,452,696) | |||
Non-controlling interest (Note 14) | - | (280,815) | |||
Total Deficiency | (2,054,623) | (2,733,511) | |||
Total Liabilities and Deficiency | $ | 1,644,607 | $ | 114,391 | |
Nature of Operations and Going Concern (Note 1) | |||||
Commitments (Note 19) | |||||
Subsequent Event (Note 20) | |||||
Approved by the Board | "Edward Ellwood" | "Eric Plexman" | |||
Director (Signed) | Director (Signed) |
See accompanying notes.
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Peloton Minerals Corporation
Consolidated Statements of Loss and Comprehensive Loss
(Expressed in United States Dollars)
Years Ended December 31, 2023 and 2022
2023 | 2022 | |||
Expenses | ||||
Office and administrative costs (Note 16) | $ | 636,323 | $ | 563,586 |
Professional fees | 96,563 | 95,530 | ||
Exploration and evaluation expenditures (Note 6) | 444,623 | 535,798 | ||
Stock-based compensation (Note 12) | 90,300 | 55,965 | ||
Depreciation (Note 5) | 9,080 | 9,079 | ||
Foreign exchange loss (gain) | 22,678 | (24,369) | ||
1,299,567 | 1,235,589 | |||
Other expenses (income) | ||||
(Gain) loss on revaluation of foreign currency warrants (Note 12) | (30,470) | 859,629 | ||
Reversal of management and director fees payable (Note 16) | (132,128) | (101,885) | ||
Loss on revaluation of derivative liability (Note 9) | 28,926 | 69,298 | ||
Fair value of warrants extended (Note 12) | 679,053 | 74,432 | ||
Interest income | (31) | - | ||
Gain from loss on control of subsidiary (Note 14) | (1,185,365) | - | ||
Gain on fair value adjustment of investment | (21,769) | - | ||
(661,784) | 901,474 | |||
Net loss for the year | (637,783) | (2,137,063) | ||
Other comprehensive income | ||||
Items that may be reclassified subsequently to profit or loss | ||||
Foreign currency translation adjustment | 523 | 10,359 | ||
Comprehensive loss | $ | (637,260) | $ (2,126,704) | |
Net loss attributable to: | ||||
Shareholders of Peloton | $ | (387,428) | $ (1,905,179) | |
Non-controlling interest (Note 14) | (250,355) | (231,884) | ||
$ | (637,783) | $(2,137,063) | ||
Other comprehensive income (loss) attributable to: | ||||
Shareholders of Peloton | $ | (36) | $ | 5,046 |
Non-controlling interest (Note 14) | 559 | 5,313 | ||
$ | 523 | $ | 10,359 | |
Comprehensive loss attributable to: | ||||
Shareholders of Peloton | $ | (387,464) | $(1,900,133) | |
Non-controlling interest (Note 14) | (249,796) | (226,571) | ||
$ | (637,260) | $(2,126,704) | ||
Loss per share (Note 13) | ||||
Basic and diluted | $ | (0.005) | $ | (0.019) |
Weighted average number of common shares outstanding (Note 13)
Basic and diluted | 121,222,357 | 115,441,233 |
See accompanying notes | 6 |
Peloton Minerals Corporation
Consolidated Statements of Changes in Deficiency
(Expressed in United States Dollars)
Years Ended December 31, 2023 and 2022
Accumulated | |||||||||||||
Other | Attributable | ||||||||||||
Number of | Capital | Contributed Comprehensive | to Shareholders | Non-controlling | Total | ||||||||
Shares | Stock | Surplus | Income | Deficit | of Peloton | Interest | Deficiency | ||||||
(Note 11) | (Note 11) | (Note 12) | (Note 13) | ||||||||||
Balance, January 1, 2022 | 113,334,421 | $ 10,653,946 | $ | 2,265,570 | $ | - | $ (13,942,733) | $ | (1,023,217) | $ | - | $ | (1,023,217) |
Net loss and comprehensive loss | - | - | - | - | (1,905,179) | (1,905,179) | (231,884) | (2,137,063) | |||||
Foreign currency translation adjustment | - | - | - | 5,046 | - | 5,046 | 5,313 | 10,359 | |||||
Units issued for cash (Note 11) | 5,253,038 | 203,570 | - | - | - | 203,570 | - | 203,570 | |||||
Units issued for exploration services (Note 11) | 360,000 | 13,990 | - | - | - | 13,990 | - | 13,990 | |||||
Allocated to warrants (Note 11) | - | (72,367) | - | - | - | (72,367) | - | (72,367) | |||||
Units issuance fees (Note 11) | - | (1,035) | - | - | - | (1,035) | - | (1,035) | |||||
Units issued by subsidiary to non-controlling | |||||||||||||
interest (Note 14) | - | - | - | - | 270,531 | 270,531 | (54,244) | 216,287 | |||||
Stock-based compensation (Note 12) | - | - | 55,965 | - | - | 55,965 | - | 55,965 | |||||
Balance, December 31, 2022 | 118,947,459 | $ 10,798,104 | $ | 2,321,535 | 5,046 | $ (15,577,381) | $ | (2,452,696) | $ | (280,815) | $ | (2,733,511) | |
Net loss and comprehensive loss | - | - | - | - | (387,428) | (387,428) | (250,355) | (637,783) | |||||
Foreign currency translation adjustment | - | - | - | (36) | - | (36) | 559 | 523 | |||||
Units issued for cash (Note 11) | 6,076,499 | 407,180 | - | - | - | 407,180 | - | 407,180 | |||||
Allocated to warrants (Note11) | - | (161,441) | - | - | - | (161,441) | - | (161,441) | |||||
Units issuance fees (Note11) | - | (11,167) | - | - | - | (11,167) | - | (11,167) | |||||
Broker units (Note 11) | - | (26,675) | 26,675 | - | - | - | - | - | |||||
Units issued by subsidiary to non-controlling | |||||||||||||
interest (Note 14) | - | - | - | - | 465,675 | 465,675 | (3,230) | 462,445 | |||||
Stock-based compensation (Note 12) | - | - | 90,300 | - | - | 90,300 | - | 90,300 | |||||
Deconsolidation of Celerity (Note 14) | - | - | - | (5,010) | - | (5,010) | 533,841 | 528,831 | |||||
Balance, December 31, 2023 | 125,023,958 | $ 11,006,001 | $ | 2,438,510 | $ | - | $ (15,499,134) | $ | (2,054,623) | $ | - | $ | (2,054,623) |
See accompanying notes | 7 |
Peloton Minerals Corporation
Consolidated Statements of Cash Flows
(Expressed in United States Dollars)
Years Ended December 31, 2023 and 2022
2023 | 2022 | |||
Cash provided by (used in) | ||||
Operations | ||||
Net loss | $ | (637,783) | $ | (2,137,063) |
Items not affecting cash: | ||||
Gain from loss on control of subsidiary | (1,185,365) | - | ||
Loss on revaluation of derivative liability | 28,926 | 69,298 | ||
(Gain) loss on revaluation of foreign currency warrants | (30,470) | 859,629 | ||
Reversal of management and director fees payable | (132,128) | (101,885) | ||
Depreciation | 9,080 | 9,079 | ||
Fair value of warrants extended | 679,053 | 74,432 | ||
Stock-based compensation | 90,300 | 55,965 | ||
Gain on fair value adjustment of investment | (21,769) | - | ||
Services compensated with shares | - | 13,990 | ||
(1,200,156) | (1,156,555) | |||
Net changes in non-cash working capital: | ||||
HST receivable | (2,858) | 13,600 | ||
Prepaid expenses | 4,973 | 58,999 | ||
Accounts payable and accrued liabilities | 424,670 | 458,991 | ||
(773,371) | (624,965) | |||
Investing | ||||
Reclamation bonds | - | (384) | ||
Cash eliminated on deconsolidation | (113,997) | - | ||
Proceeds on disposal of investment | 8 | - | ||
(113,989) | (384) | |||
Financing | ||||
Proceeds from share issuances, net | 389,208 | 202,535 | ||
Shares issuance in subsidiary (Note 14) | 462,445 | 216,287 | ||
Proceeds from loan payable | 56,707 | - | ||
Deposit for shares to be issued | 4,791 | - | ||
913,151 | 418,822 | |||
Net change in cash during the year | 25,791 | (206,527) | ||
Cash, beginning of year | 13,027 | 219,554 | ||
Cash, end of year | $ | 38,818 | $ | 13,027 |
Non-cash transactions: | ||||
Warrant extensions | $ | 679,053 | $ | 74,432 |
Shares for services | $ | - | $ | 13,990 |
Settlement of receivable for investment (Note 4) | $ | 119,047 | $ | - |
See accompanying notes | 8 |
Peloton Minerals Corporation
Notes to Consolidated Financial Statements (Expressed in United States Dollars) December 31, 2023 and 2022
1. NATURE OF OPERATIONS AND GOING CONCERN
Peloton Minerals Corporation (the "Company" or "Peloton") was incorporated under the Ontario Business Corporations Act on December 21, 2000. The Company has five wholly-owned subsidiary corporations: ES Subsidiary Corporation, a United States corporation incorporated under the laws of the State of Montana in August 2023, GT Subsidiary Corporation, a United States corporation incorporated under the laws of the State of Montana on August 28, 2012; IV Subsidiary Corporation, a United States corporation incorporated under the laws of the State of Montana on December 11, 2020; SBSL Subsidiary Corporation, a United States corporation incorporated under the laws of the State of Montana on October 15, 2018; and TC Subsidiary Corporation, a United States corporation incorporated under the laws of the State of Montana on August 28, 2012. In addition, it owns 17.16% (2022 - 48.71%) of Celerity Mineral Corporation, a Canadian corporation incorporated on April 15, 2012, of which it lost control during the year (Note 14).
The Company is engaged in the business of locating and exploring mineral properties. Substantially all of the efforts of the Company are devoted to these business activities. To date, the Company has not earned revenues and is considered to be in the exploration stage. The head office and principal address of the Company is 380 Wellington Street, 6th Floor, London City Centre, Tower B, London, Ontario, N6A 5B5.
These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") on a going concern basis that presumes the realization of assets and discharge of liabilities in the normal course of business. During the year ended December 31, 2023 the Company had a net loss of $637,783 (2022 - net loss of $2,137,063) and negative cash flows from operations of $773,371 (2022 - $624,965). As of that date, the Company had accumulated a deficit of $15,499,134 (2022 - $15,577,381) and a working capital deficiency of $929,929 (2022 - Working capital deficiency of $950,413).
As is common with exploration companies, the Company's ability to continue as a going concern is dependent upon obtaining necessary equity financing to finance its ongoing and planned exploration activities and to cover administrative costs, the discovery of economically recoverable resources, the ability of the Company to secure and maintain title and beneficial interest in the properties, entering agreements with others to explore and develop the mineral properties and future profitable production or proceeds from disposition of such properties. However, there can be no assurances that the Company will be able to obtain financing. These factors create material uncertainties that may cast significant doubt upon the Company's ability to continue as a going concern.
These consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that might be necessary should the Company be unable to continue operations. Such adjustments may be material.
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Peloton Minerals Corporation
Notes to Consolidated Financial Statements (Expressed in United States Dollars) December 31, 2023 and 2022
2. MATERIAL ACCOUNTING POLICY INFORMATION Statement of Compliance
The consolidated financial statements of the Company have been prepared in accordance with IFRS as issued by the International Accounting Standards Board ("IASB") and interpretations of the IFRS Interpretations Committee.
The consolidated financial statements of the Company were approved by the Board of Directors on April 29, 2024.
A summary of the Company's material accounting policy information under IFRS are presented below. These policies have been consistently applied.
Basis of Measurement
The consolidated financial statements are prepared on the historical cost basis except for financial instruments classified as fair value through profit or loss, which are stated at their fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting.
These consolidated financial statements are presented in United States dollars, which is also the Company's and United States subsidiaries' functional currency. The functional currency of Celerity Mineral Corporation is the Canadian dollar.
The preparation of consolidated financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, incomes 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 estimates are revised and in any future periods affected.
Information regarding significant areas of estimation, uncertainty and critical judgements made in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements relate to:
Valuation of stock options and warrants issued
The fair value valuation of stock options and warrants require that management estimates the inputs used in the Black-Scholes pricing model, such as estimated volatility and life of the stock options based on information at each reporting date, and forfeiture rate for options.
Valuation of the convertible debenture
Management estimated the fair value of the debt component of the convertible debentures by determining the estimated timing of future debt and interest payments pursuant to the terms of the debt agreement and a discount rate equal to the estimated rate of return for a similar debt instrument but having no conversion features. The amount allocated to the debt and equity components would vary with changes in the estimated cash flows and the discount rate.
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Peloton Minerals Corp. published this content on 30 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 May 2024 09:16:35 UTC.
