CRITERIUM ENERGY LTD.
Consolidated Financial Statements
For the years ended December 31, 2023 and 2022
(Expressed in Canadian Dollars)
CRITERIUM ENERGY LTD.
For the years ended December 31, 2023 and 2022
Page | |
Consolidated Financial Statements | |
Consolidated Statements of Loss and Comprehensive Loss | 1 |
Consolidated Statements of Financial Position | 2 |
Consolidated Statements of Changes in Shareholders' Equity | 3 |
Consolidated Statements of Cash Flows | 4 |
Notes to the Consolidated Financial Statements | 5 |
Independent Auditor's Report
To the Shareholders of Criterium Energy Ltd.:
Opinion
We have audited the consolidated financial statements of Criterium Energy Ltd. (the "Company"), which comprise the consolidated statements of financial position as at December 31, 2023 and December 31, 2022, and the consolidated statements of loss and comprehensive loss, changes in shareholders' equity 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 December 31, 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 audits 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 audits 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.
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 of the current period. 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.
Valuation of assets held for sale
Key Audit Matter Description
The Company had $2.2 million of assets held for sale and $0.7 million in liabilities directly associated with the disposal group as at December 31, 2023. Immediately prior to classification as held for sale, the components of a disposal group, are measured at the lower of their carrying amount and fair value less cost to sell ("FVLCS"). Impairment losses, or impairment reversals to the extent allowable, on initial classification are recognized in the statement of loss and comprehensive loss.
Please refer to Note 3 - Material accounting policy information, and Note 10 - Assets held for sale in the consolidated financial statements.
We identified the valuation of assets held for sale as a key audit matter due to:
- The significant estimates and judgments used by management.
- The significant auditor judgment required.
- The effort in performing procedures related to the key assumptions used.
MNP LLP
2000, 112 - 4th Avenue SW, Calgary AB, T2P 0H3 | 1.877.500.0792 T: 403.263.3385 F: 403.269.8450 |
Audit Response
We responded to this matter by performing procedures in relation to the valuation of assets held for sale. Our audit work in relation to this included, but was not restricted to, the following:
- Evaluated the design and implementation of essential controls related to the measurement of the assets held for sale.
- Assessed management's determination of the FVLCS of the assets held for sale by inspecting the signed letter of intent, reviewing the acquisition agreement dated December 20, 2022, and performing a review of subsequent events.
- Evaluated management's judgment and conclusions with respect to the classification of the assets as held for sale.
- Evaluated the financial statement presentation and disclosures related to the assets for sale.
Other Information
Management is responsible for the other information. The other information comprises Management's Discussion and Analysis.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audits of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audits 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 on this other information, 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 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.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
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 audits and significant audit findings, including any significant deficiencies in internal control that we identify during our audits.
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 Craig Bloom.
Calgary, Alberta
April 25, 2024 | Chartered Professional Accountants |
CRITERIUM ENERGY LTD.
Consolidated Statements of Loss and Comprehensive Loss
For the years ended December 31,
(Expressed in Canadian Dollars)
2023 | 2022 | |||
Royalty revenue | $ | 105,891 | $ | 187,838 |
Expenses | ||||
Salaries and benefits | 810,004 | 214,893 | ||
Exploration expense | 744,754 | - | ||
Transaction costs | 563,760 | - | ||
General and administrative | 423,192 | 97,300 | ||
Consulting fees | 397,362 | 345,498 | ||
Professional fees | 345,112 | 608,665 | ||
Stock-based compensation (Note 16) | 304,494 | 164,513 | ||
Travel | 217,755 | 37,710 | ||
Depreciation (Note 9) | 35,703 | 8,926 | ||
Geological and geophysical expense | 28,098 | - | ||
Finance expense (Note 13, 14) | 22,547 | 6,332 | ||
Operating expenses | 8,552 | 11,165 | ||
Non-recoverable deposit | - | 12,500 | ||
Decommissioning liability revisions (Note 13) | - | 10,420 | ||
3,901,333 | 1,517,922 | |||
Net loss before other items | (3,795,442) | (1,330,084) | ||
Interest income | 3,236 | 450 | ||
Government grants (Note 13) | - | 9,500 | ||
Foreign exchange loss | (16,360) | (3,011) | ||
(13,124) | 6,939 | |||
Net loss | $ | (3,808,566) | $ | (1,323,145) |
Other comprehensive loss | ||||
Items that may be reclassified subsequently to loss: | ||||
Currency translation adjustment | (30,848) | (5,667) | ||
Total other comprehensive loss | (30,848) | (5,667) | ||
Total comprehensive loss for the year | $ | (3,839,414) | $ | (1,328,812) |
Weighted average number of shares outstanding | 37,726,275 | 16,139,496 | ||
Basic and diluted loss per share | (0.10) | (0.08) |
See accompanying notes to the financial statements.
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CRITERIUM ENERGY LTD.
Consolidated Statements of Financial Position
As at December 31,
(Expressed in Canadian Dollars)
2023 | 2022 | |||
ASSETS | ||||
Current assets | ||||
Cash | $ | 432,898 | $ | 3,720,751 |
Short-term deposit | 10,187 | - | ||
Amounts receivable (Note 6) | 64,154 | 160,829 | ||
Prepaids and deposits (Note 7) | 336,218 | 26,381 | ||
Subscription receipts (Note 8) | 6,739,461 | - | ||
Asset held for sale (Note 10) | 2,176,564 | - | ||
9,759,482 | 3,907,961 | |||
Deposit (Note 23) | 264,520 | - | ||
Reclamation deposit (Note 13) | 45,528 | 42,655 | ||
Right-of-use assets (Note 9) | 121,984 | 157,687 | ||
Exploration and evaluation asset (Note 11) | - | 2,228,896 | ||
$ | 10,191,514 | $ | 6,337,199 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
Current liabilities | ||||
Accounts payable and accrued liabilities (Note 12) | $ | 1,220,328 | $ | 507,555 |
Liabilities directly associated with asset held for sale (Note 10) | 656,742 | - | ||
Acquisition payable (Note 5) | 396,780 | 1,625,280 | ||
Current portion of lease obligations (Note 14) | 28,287 | 24,370 | ||
Decommissioning liabilities (Note 13) | 31,028 | 31,011 | ||
Subscription receipts (Note 8) | 6,739,461 | - | ||
9,072,626 | 2,188,216 | |||
Lease obligations (Note 14) | 108,410 | 136,697 | ||
9,181,036 | 2,324,913 | |||
Shareholders' equity | ||||
Share capital (Note 15) | 8,694,424 | 8,161,312 | ||
Other comprehensive loss | (36,515) | (5,667) | ||
Contributed surplus (Note 16) | 681,553 | 377,059 | ||
Deficit | (8,328,984) | (4,520,418) | ||
1,010,478 | 4,012,286 | |||
$ | 10,191,514 | $ | 6,337,199 | |
Nature of operations and continuance of business (Note 1) | ||||
Subsequent events (Note 23) |
Approved on Behalf of the Board
"Dave Dunlop", Director | "Robin Auld", Director |
See accompanying notes to the financial statements.
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CRITERIUM ENERGY LTD.
Consolidated Statements of Changes in Shareholders' Equity
(Expressed in Canadian Dollars)
Share capital | Other | ||||||||||
Reserves | comprehensive | Deficit | Total equity | ||||||||
# of shares | $ | loss | |||||||||
Balance, December 31, 2021 | 8,970,585 | $ | 3,061,457 | $ | 245,378 | $ | - | $ | (3,197,273) | $ | 109,562 |
Units issued through private placement (Note 15) | 26,899,532 | 5,379,906 | - | - | - | 5,379,906 | |||||
Share issue costs | - | (351,504) | 38,621 | - | - | (312,883) | |||||
Severance shares issued (Note 15) | 357,265 | 71,453 | - | - | - | 71,453 | |||||
Stock-based compensation (Note 16) | - | - | 93,060 | - | - | 93,060 | |||||
Other comprehensive loss | - | - | - | (5,667) | - | (5,667) | |||||
Net loss | - | - | - | - | (1,323,145) | (1,323,145) | |||||
Balance, December 31, 2022 | 36,227,382 | 8,161,312 | 377,059 | (5,667) | (4,520,418) | 4,012,286 | |||||
Share issue costs | - | (7,538) | - | - | - | (7,538) | |||||
Exercise of warrants (Note 15) | 2,162,599 | 540,650 | - | - | - | 540,650 | |||||
Stock-based compensation (Note 16) | - | - | 304,494 | - | - | 304,494 | |||||
Other comprehensive loss | - | - | - | (30,848) | - | (30,848) | |||||
Net loss | - | - | - | - | (3,808,566) | (3,808,566) | |||||
Balance, December 31, 2023 | 38,389,981 | $ | 8,694,424 | $ | 681,553 | $ | (36,515) | $ | (8,328,984) | $ | 1,010,478 |
See accompanying notes to the financial statements.
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CRITERIUM ENERGY LTD.
Consolidated Statements of Cash Flows
For the Years Ended December 31,
(Expressed in Canadian Dollars)
2023 | 2022 | |
Cash flows used in operating activities: | ||
Net loss | $ (3,808,566) | $ (1,323,145) |
Items not affecting cash: | ||
Stock-based compensation (Note 15, 17) | 304,494 | 164,513 |
Depreciation (Note 9) | 35,703 | 8,926 |
Non-recoverable deposit | - | 12,500 |
Decommissioning liability revisions (Note 13) | - | 10,420 |
Finance expense (Note 13), (Note 14) | 22,547 | 6,332 |
Government grants (Note 13) | - | (9,500) |
Accrued interest on reclamation and short-term deposit | (3,060) | (450) |
Change in non-cash working capital items: | ||
Short-term deposit | (10,000) | - |
Amounts receivable | 96,675 | (110,749) |
Prepaids and deposits | (309,837) | (26,381) |
Prepaid share issuance costs (Note 8) | (394,993) | - |
Accounts payable and accrued liabilities | 712,773 | 487,555 |
Accounts payable and accrued liabilities, asset held for sale (Note 10) | 656,742 | - |
Net cash flows used in operating activities | (2,697,522) | (779,979) |
Cash flows from (used in) investing activities | ||
Purchase of exploration and evaluation assets (Note 5, 11) | - | (2,234,563) |
Deposit related to MOPL Acquisition (Note 23) | (264,520) | - |
Acquisition payable, change in non-cash working capital (Note 5, 11) | (812,023) | 1,625,280 |
Net cash flows used in investing activities | (1,076,543) | (609,283) |
Cash flows from (used in) financing activities | ||
Issuance of common shares (Note 15) | - | 5,379,906 |
Issuance of common shares (warrants exercised) (Note 15) | 540,650 | - |
Share issue costs (Note 15) | (7,538) | (312,883) |
Principal payments on lease obligations (Note 14) | (46,900) | (11,725) |
Net cash flows from financing activities | 486,212 | 5,055,298 |
Increase (decrease) in cash | (3,287,853) | 3,666,036 | ||
Cash at beginning of year | 3,720,751 | 54,715 | ||
Cash at end of year | $ | 432,898 | $ | 3,720,751 |
See accompanying notes to the financial statements.
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Criterium Energy Ltd. published this content on 01 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 May 2024 09:35:52 UTC.