BMMCF Kbridge Energy Corporation (CE)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 20-F/A

Amendment No. 2

 

(Mark One)
☐	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2021
OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☐	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report __________________
For the transition period from ________________ to _______________
Commission file number  333-102931

 

KBRIDGE ENERGY CORP.

(Exact name of registrant as specified in this charter)

 

British Columbia, Canada (A1)

(Jurisdiction of incorporation or organization)

 

1530 Elizabeth Avenue, Unit 2, Las Vegas, NV 89119 US

(Address of principal executive offices)

 

Securities registered or to be registered pursuant to section 12(b) of the Act:

 

Title of each Class		Name of each exchange on which registered
None		Not Applicable

 

Securities registered or to be registered pursuant to Section 12(g) of the Act:

 

Common Shares Without Par Value

(Title of Class)

 

Securities registered or to be registered pursuant to Section 15(D) of the Act:

 

None

(Title of Class)

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Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

14,522,727

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐   No ☒

 

If this report is an annual or transitional report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes ☐   No ☒

 

Note - Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☐    No ☒

 

Indicated by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☐   No ☒

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check One):

 

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer  ☒	Emerging Growth Company ☒

 

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐

 

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this Filing:

 

U.S. GAAP ☒

International Financial Reporting Standards as issued by the International Accounting Standards Board ☐

Other ☐

 

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17 ☐  Item 18 ☐

 

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐   No ☒

 

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Amendments to the filed Form 20 F submitted for KBridge Energy Corp for the fiscal year ended December 31, 2021:

 

Amendment No. 1 (filed October 19, 2022)

 

- Item 15 – Controls and Procedures

 

B. the review is extended to cover the December 31, 2021 year end

 

- Item 17 – Report of Independent Registered Public Accounting Firm

 

This section has been restated to properly include reference to the broad standards of the

 

PCAOB and includes that the auditor is a public accounting firm registered with the PCAOB, is independent of the Company and is bound by U.S. federal securities laws and applicable rules and regulations of the SEC and the PCAOB

 

Amendment No. 2

 

- Item 17 – Report of Independent Registered Public Accounting Firm

 

The Audit report has been amended to encompass all of the standards of the PCAOB, not just the auditing standards.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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ITEM 15 - Controls and Procedures

 

A. Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our filings under the Exchange Act is recorded, processed, summarized and reported within the periods specified in the rules and forms of the SEC. This information is accumulated and communicated to our executive officer to allow timely decisions regarding required disclosure. Our Chairman, acting as our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on that evaluation of these disclosure controls and procedures, and in light of the weaknesses identified below, the acting Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective. The small size of our company does not provide for the desired separation of control functions, and we do not have the required level of documentation of our monitoring and control procedures. The remedies for this situation are described below.

 

B. Management’s Annual Report on Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act. Under the supervision of our Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2021 and December 31, 2020 using the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

 

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of our financial reporting. In its assessment of the effectiveness of internal control over financial reporting as of December 31, 2021, the Company determined that there were significant deficiencies that constituted material weaknesses, as described below:

 

·Certain entity level controls establishing a “tone at the top” were considered material weaknesses. The Company does not have an audit committee. The Company does not have any independent directors and thus no independent directors to sit on the audit committee if there was one. 

·The Company has not formally adopted internal controls surrounding its cash and financial reporting procedures including the absence of sufficient management review controls and separation of duties. 

·The lack of independent directors exercising an oversight role increases the risk of management override. 

 

Management is currently evaluating remediation plans for the above control deficiencies.

 

In light of the existence of these control deficiencies, management concluded that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the Company’s internal controls.

 

Attestation Report of the Registered Accounting Firm

 

This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the company’s registered public accounting firm pursuant to the rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

 

C. Changes in Internal Controls Over Financial Reporting

 

There were no changes in our internal control over financial reporting that occurred during the year ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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PART III

 

ITEM 17 - Financial Statements

 

 

KBRIDGE ENERGY CORP.

Consolidated Financial Statements

December 31, 2021

(Expressed in U.S. Dollars)

 

 

	Index
Report of Independent Registered Public Accounting Firm	1
Consolidated balance sheets	2
Consolidated statements of income (loss) and comprehensive income (loss)	3
Consolidated statements of stockholders’ deficit	4
Consolidated statements of cash flows	5
Notes to the consolidated financial statements	6-14

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Shareholders and Board of Directors of Kbridge Energy Corp.

 

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Kbridge Energy Corp.and subsidiaries (the “Company”) as of December 31, 2021 and 2020, and the related consolidated statements of loss and comprehensive loss, stockholders’ deficit, and cash flows for the year then ended and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020 and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

 

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures including examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

Emphasis of Matter

The accompanying financial statements have been prepared assuming that Kbridge Energy Corp.will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has a working capital deficit, and has incurred significant operating losses and negative cash flows from operations since inception. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also discussed in Note 1 to the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Critical Audit Matters

Critical audit matters are matters arising form the current year audit of the financial statement that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

 

/s/ Harbourside CPA

Vancouver, Canada

PCAOB ID# 6498

 

August 26, 2022

 

We have served as the Company’s auditor since 2019.

 

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F-1

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KBRIDGE ENERGY CORP.

Consolidated balance sheets

(Expressed in U.S. Dollars)

 

	As at December 31, 2021			As at December 31, 2020
ASSETS
Current assets
Cash	$	46,609		$	7,855
Marketable securities (Note 3)		424,455			15,274
Accounts receivable (Note 9)		92,951			46,131
Loan receivable from related parties (Notes 4 and 8)		75,775			110,910
		639,790			180,170
Oil and gas property (Note 5)		-			4,123
Total assets	$	639,790		$	184,293
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable and accrued liabilities (Note 6)	$	103,457		$	41,640
Loan payable (Note 7)		177,068			176,312
Deferred revenue		-			91,892
Due to related parties (Note 8)		441,570			840,450
		722,095			1,150,294
Asset retirement obligation (Note 10)		4,141			4,123
Total liabilities		726,236			1,154,417
Stockholders’ deficit
Common stock Authorized: unlimited common shares without par value Issued and outstanding: 14,522,727 common shares (2020: 14,522,727)		2,358,954			2,358,954
Additional paid-in capital		9,527			9,527
Accumulated other comprehensive income (loss)		252,849			(71,790)
Deficit		(2,707,776)			(3,266,815)
Total stockholders’ deficit		(86,446)			(970,124)
Total liabilities and stockholders’ deficit	$	639,790		$	184,293

 

 

Nature of operations and continuance of business (Note 1)

 

 

 

(The accompanying notes are an integral part of these consolidated financial statements.)

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KBRIDGE ENERGY CORP.

Consolidated statements of income (loss) and comprehensive income (loss)

(Expressed in U.S. dollars)

 

	Year ended December 31, 2021			Year ended December 31, 2020
Oil and gas revenue (loss) (Note 9)	$	26,187		$	18,553
Direct operating costs		(29,469)			(14,631)
Depletion		(4,188)			(18,639)
Oil and gas royalties		(1,704)			(979)
		(9,174)			(15,696)
Consulting revenue (Notes 8 and 9)		689,279			264,352
		680,105			248,656
Operating expenses
Administration fees		2,180			25,456
Advertising		7,782			13,969
Consulting fees (Note 8)		17,320			100,999
Finders’ fees		100,000			-
Foreign exchange loss (gain)		22,241			(7,317)
Office and miscellaneous		11,806			6,561
Professional fees		88,274			36,288
Salaries and benefits		1,192			28,873
Travel and promotion		4,634			7,153
Total operating expenses		255,429			211,982
Income (loss) before other items		424,676			36,674
Other items
Gain from receipt of shares and options (Notes 3 and 8)		441,882			-
Loss on equity investment (Note 11)		-			(32,861)
Realized gain (loss) on sale of securities (Note 3)		37,484			-
Write off of accounts payable (Note 6)		-			6,233
Impairment of marketable securities (Notes 3 and 8)		(345,003)			-
Net income for the year		559,039			10,046
Other comprehensive income (loss)
Unrealized gain (loss) on marketable securities		324,442			(15,518)
Effect translating foreign operation currencies		197			(5,619)
Total comprehensive income (loss)	$	883,678		$	(11,091)
Income (Loss) per share, basic and diluted	$	0.04		$	0.00
Weighted average number of shares outstanding		14,522,727			14,522,727

 

 

 

(The accompanying notes are an integral part of these consolidated financial statements.)

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KBRIDGE ENERGY CORP.

Consolidated statements of stockholders’ deficit

(Expressed in U.S. dollars)

 

	Common stock
	Number	Amount	Additional paid-in capital	Accumulated other comprehensive income (loss)	Deficit	Total
		$	$	$	$	$
Balance, December 31, 2019	14,522,727	2,358,954	9,527	(50,653)	(3,276,861)	(959,033)
Net income for the year	-	-	-	-	10,046	10,046
Unrealized loss on  marketable securities	-	-	-	(15,518)	-	(15,518)
Foreign exchange loss	-	-	-	(5,619)	-	(5,619)
Balance, December 31, 2020	14,522,727	2,358,954	9,527	(71,790)	(3,266,815)	(970,124)
Net income for the year	-	-	-	-	559,039	559,039
Unrealized gain on  marketable securities	-	-	-	324,442	-	324,442
Foreign exchange gain	-	-	-	197	-	197
Balance, December 31, 2021	14,522,727	2,358,954	9,527	252,849	(2,707,776)	(86,446)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(The accompanying notes are an integral part of these consolidated financial statements.)

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KBRIDGE ENERGY CORP.

Consolidated statements of cash flows

(Expressed in U.S. dollars)

 

	Year ended December 31, 2021			Year ended December 31, 2020
Operating activities
Net income for the year	$	559,039		$	10,046
Adjustments to reconcile net income (loss) to net cash used  in operating activities:
Impairment of marketable securities		345,003			-
Depletion		4,188			18,639
Loss on equity investment		-			32,861
Gain from receipt of marketable securities		(441,882)			-
Realized gain from sale of marketable securities		(37,484)			-
Write off of accounts payable		-			(6,233)
Changes in operating assets and liabilities:
Deferred revenue		(91,892)			91,892
Accounts receivable		(46,820)			(31,615)
Accounts payable and accrued liabilities		61,817			2,351
Net cash provided by operating activities		351,969			117,941
Investing activities
Advance of loans receivable from related parties		(50,000)			(89,353)
Amounts received from related party loans receivable		85,202			-
Sale of marketable securities		49,373			-
Net cash provided by (used in) investing activities		84,575			(89,353)
Financing activities
Advances from related parties		100,384			290,229
Repayment of advances from related parties		(485,057)			(383,840)
Net cash used in financing activities		(384,673)			(93,611)
Effect of unrealized foreign exchange		(13,117)			7,692
Increase (decrease) in cash		38,754			(57,331)
Cash, beginning of year		7,855			65,186
Cash, end of year	$	46,609		$	7,855
Supplemental Disclosures:
Income taxes paid	$	-		$	-
Interest paid	$	-		$	-

 

 

 

(The accompanying notes are an integral part of these consolidated financial statements.)

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KBRIDGE ENERGY CORP.

Notes to the consolidated financial statements

December 31, 2021

(Expressed in U.S. dollars)

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1.Nature of Operations and Continuance of Business 

 

KBridge Energy Corp (the “Company”) was incorporated on October 23, 2002 under the laws of British Columbia, Canada, with the name Penn Biotech Inc. On January 13, 2005, the Company changed its name to United Traffic System Inc. On November 30, 2007 the Company changed its name to Corpus Resources Corporation and on June 23, 2009 changed its name to NeoMedyx Medical Corp. On February 24, 2010 the Company changed its name to Blue Marble Media Corp and subsequently changed its name to KBridge Energy Corp.

 

The Company has some oil and gas production in Alberta Canada and the Company also provides consulting services to the resource sector, as well as consulting services to companies wishing to list on the public markets.

 

These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. As at December 31, 2021, the Company has a working capital deficit of $82,305 and has an accumulated deficit of $2,707,776 since inception. In addition, there is uncertainty as to the likely effects of the novel coronavirus (“COVID-19”) outbreak which may, among other things, impact the Company’s operations and ability to raise further financing.

 

In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or ability to raise funds.

 

These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. These adjustments could be material. Management intends to obtain additional funding by borrowing from its directors and third parties.

 

2.Summary of Significant Accounting Policies 

 

(a)Basis of Presentation 

 

These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States (“US GAAP”) and are expressed in U.S. dollars.

 

(b)Principals of Consolidation 

 

The consolidated financial statements include the accounts of the Company’s wholly owned Canadian subsidiary Futura Kbridge SPA Inc. On consolidation, all intercompany balances and transactions are eliminated.

 

(c)Use of Estimates 

 

The preparation of financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to the impairment of marketable securities, allowance for doubtful accounts, useful life of the oil and gas properties, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be

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KBRIDGE ENERGY CORP.

Notes to the consolidated financial statements

December 31, 2021

(Expressed in U.S. dollars)

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reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

 

(d)Cash and Cash Equivalents 

 

The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.

 

(e)Accounts Receivable 

 

Accounts receivable represents amounts owed from customers for consulting services and the sale of oil and gas. Amounts are presented net of the allowance for doubtful accounts, which represents the Company’s best estimate of the amount of probable credit losses in the existing accounts receivable balance. The Company determines the allowance for doubtful accounts based on historical experience and current economic conditions. The Company reviews the adequacy of its allowance for doubtful account on a regularly basis. As at December 31, 2021 and 2020, the Company has no allowance for doubtful accounts.

 

(f)Revenue Recognition 

 

The Company derives revenue primarily by providing consulting services and the sale of oil and gas. In accordance with Accounting Standard Codification (“ASC”) 606, “Revenue Recognition”, revenue is recognized when persuasive evidence of an arrangement exists, the services have been rendered and the goods have been delivered, the amount is fixed and determinable, and collection is reasonably assured. Customer advances are deferred and recognized as revenue when the Company has completed all of its performance obligations relating to the consulting services.

 

(g)Equity Method Investment 

 

The Company accounts for its investment in associated companies in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 323, Investments - Equity Method and Joint Ventures (“ASC 323”). In accordance with ASC 323, associated companies are accounted for as equity method investments. Results of associate companies are presented on a one-line basis. Investments in, and advances to, associated companies are presented on a one-line basis in the caption “Equity investment” in the Company’s consolidated balance sheets, net of allowance for losses, which represents the Company’s best estimate of probable losses inherent in such assets. The Company’s proportionate share of any associated companies’ net income or loss is presented on a one-line basis in the caption “Gain (loss) on equity investment” in the Company’s consolidated statement of comprehensive income/loss. Transactions between the Company and any associated companies are eliminated on a basis proportional to the Company’s ownership interest.

 

(h)Income Taxes 

 

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Accounting for Income Taxes”. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

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F-7

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KBRIDGE ENERGY CORP.

Notes to the consolidated financial statements

December 31, 2021

(Expressed in U.S. dollars)

---

 

The Company files income tax returns in Canada. The Company may be subject to a reassessment of income taxes by Canadian tax authorities for a period of three years from the date of the original notice of assessment in respect of any particular taxation year. Tax authorities of Canada have not audited any of the Company’s income tax returns for the open taxation years noted above.

 

As of December 31, 2021, the Company did not have any amounts recorded pertaining to uncertain tax positions. The Company recognizes interest and penalties related to uncertain tax positions in tax expense. During the years ended December 31, 2021 and 2020, there were no charges for interest or penalties.

 

(i)Stock-Based Compensation 

 

The Company records stock-based compensation in accordance with ASC 718, “Compensation - Stock Compensation” and ASC 505, “Equity Based Payments to Non-Employees”, using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

 

(j)Foreign Currency Translation 

 

The Company changed its functional currency from United States dollars to Canadian dollars on January 1, 2015. The subsidiary’s functional currency is the United States dollar. The reporting currency is the United States dollar. Management has adopted ASC 830, “Foreign Currency Matters”.

 

Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average monthly rates are used to translate revenues and expenses. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.

 

On consolidation, the Company translates assets and liabilities of the parent company to U.S. dollar equivalents using foreign exchange rates which prevailed at the balance sheet date, and translates revenues and expenses using average exchange rates during the year. Gains and losses arising on translation of foreign currency denominated transactions or balances are included in the other comprehensive income/loss.

 

(k)Financial Instruments 

 

ASC 820, “Fair Value Measurements and Disclosures” requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

 

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

 

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or

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F-8

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KBRIDGE ENERGY CORP.

Notes to the consolidated financial statements

December 31, 2021

(Expressed in U.S. dollars)

---

infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

 

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

 

The Company’s financial instruments consist of cash, marketable securities, accounts receivable, loans receivable from related parties, accounts payable, loan payable, and amounts due to related parties. Pursuant to ASC 820, the fair value of cash and marketable securities are determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

 

(l)Comprehensive Income/Loss 

 

ASC 220, “Comprehensive Income” establishes standards for the reporting and display of comprehensive loss and its components in the consolidated financial statements. As at December 31, 2021, the Company has included the effect on translation of foreign operation in comprehensive income/loss.

 

(m)Asset Retirement Obligations 

 

The Company records the fair value of an asset retirement obligation as a liability in the period in which it incurs an obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development and/or normal use of the assets. The estimated fair value of the asset retirement obligation is based on the current cost escalated at an inflation rate and discounted at a credit adjusted risk-free rate. This liability is capitalized as part of the cost of the related asset and amortized over its useful life. The liability accretes until the Company settles the obligation.

 

(n)Oil and Gas Properties 

 

The Company uses the full cost method of accounting for oil and natural gas properties. Under this method, all acquisition, exploration and development costs, including certain payroll, asset retirement costs, other internal costs, and interest incurred for the purpose of finding oil and natural gas reserves, are capitalized.

 

(o)Earnings (Loss) per Share 

 

The Company computes earnings (loss) per share in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing earnings (loss) available to common shareholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the year using the treasury stock method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive.

 

(p)Recent Accounting Pronouncements 

 

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

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F-9

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KBRIDGE ENERGY CORP.

Notes to the consolidated financial statements

December 31, 2021

(Expressed in U.S. dollars)

---

 

(q)Reclassifications 

 

Certain reclassifications have been made to the prior year’s financial statements to conform to the current year’s presentation.

 

3.Marketable Securities 

 

	2020 Fair value	Additions	Proceeds of disposals	Impairment	Realized gains	Unrealized gains (losses)	Foreign exchange	2021 Fair value
	$	$	$	$	$	$	$	$
Common shares -  ArcPacific Resources Corp	15,274	-	-	-	-	(7,757)	153	7,670
Common shares -  PR Technology Inc.	-	84,498	(49,373)	-	37,484	351,652	(7,476)	416,785
Stock options -  PR Technology Inc.	-	357,384	-	(345,003)	-	(19,453)	7,072	-
Total	15,274	441,882	(49,373)	(345,003)	37,484	324,442	251	424,455

 

	2019 Fair value	Additions	Disposals	Unrealized gains (losses)	2020 Fair value
	$	$	$	$	$
Common shares -  ArcPacific Resources Corp	30,792	-	-	(15,518)	15,274

 

During the year ended December 31, 2021, the Company received common shares and stock options valued at $441,882 in PR Technologies Inc. from a company controlled by the president of the Company, for no consideration. (Note 8).

 

4.Loans Receivable 

 

	2021	2020
	$	$
Kbridge Resources Development	50,000	85,202
Columbia Capital Inc.	25,775	25,708
Total (Note 8)	75,775	110,910

 

Kbridge Resource Development

 

On November 17, 2020, the Company entered into a loan agreement with a related party, Kbridge Resources Development, whereby the Company advanced $89,353 ($117,000 CAD) at 4.6% interest per annum with the maturity date of November 17, 2021. This amount was repaid in full during the year ended December 31, 2021.

 

During the year ended December 31, 2021, the Company advanced a further $50,000 to Kbridge Resources Development, with a maturity date of April 20, 2022, accruing interest at 4.6% per annum. As at December 31, 2021, the outstanding amount of this loan is $50,000.

 

Columbia Capital Inc.:

 

During the year ended December 31, 2019, the Company advanced $10,000 and a further CAD$20,000 to a related party, Columbia Capital Inc., which is non-interest bearing, unsecured and due on demand. As at December 31, 2021, $25,775 (December 30, 2020 - $25,708) of this amount was outstanding. Changes in the amount owing are due to foreign exchange.

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F-10

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KBRIDGE ENERGY CORP.

Notes to the consolidated financial statements

December 31, 2021

(Expressed in U.S. dollars)

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5.Oil and Gas Property 

 

During the year ended December 31, 2015, the Company purchased a 50% interest in an oil and gas well in Alberta, Canada for $90,318 (CAD$125,000). At December 31, 2019, the Company has no determined reserve in the well. Management estimated the useful life of the well to be five years.

 

During the year ended December 31, 2021, the Company recorded depletion of $4,188 (December 2020 - $18,639.

 

	2021	2020
	$	$
Opening balance	4,123	23,291
Depletion	(4,188)	(18,639)
Foreign exchange	65	(529)
	-	4,123

 

6.Accounts Payable and Accrued Liabilities 

 

	2021	2020
	$	$
Trade payables (Note 8)	35,667	18,698
GST payable	25,425	-
Accrued liabilities	42,365	22,942
	103,457	41,640

 

During the year ended December 31, 2021, the Company wrote off $nil (2020 - $6,233) of accounts payable due to the Company’s assessment of the extinguishment of the contractual obligation.

 

7.Loan Payable 

 

As at December 31, 2021, the Company owed $177,068 (2020 - $176,312) to an unrelated party, which is non-interest bearing, unsecured, and due on demand.

 

8.Related Party Transactions 

 

(a)As at December 31, 2021, the Company owed $441,570 (2020 - $823,132) to the former Chief Executive Officer of the Company, which is non-interest bearing, unsecured, and due on demand.  In addition, included in accounts payable as at December 31, 2021 is $4,216 (December 31, 2020 - $nil) owing to this former Chief Executive Officer. 

 

(b)As at December 31, 2021, the Company owed $nil (2020 - $17,318) to the President, and a company controlled by the President, which was non-interest bearing, unsecured, and due on demand. 

 

(c)During the year ended December 31, 2021, the Company earned $174,635 (2020 - $246,928) in consulting revenues from companies related to the former CEO of the Company. As at December 31, 2021, $2,504 (2020 - $79,863) is receivable. 

 

(d)During the year ended December 31, 2021, the Company paid $9,573 (2020 - $8,947) in consulting fees to the President of the Company for services. 

 

(e)As at December 31, 2021 and 2020 the Company had an equity investment in a company related to the former CEO.  During the year ended December 31, 2020, the value of the investment was reduced to $Nil (Note 11). 

 

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F-11

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KBRIDGE ENERGY CORP.

Notes to the consolidated financial statements

December 31, 2021

(Expressed in U.S. dollars)

---

(f)As at December 31, 2021, the Company has loans receivable of $75,775 (2020 - $110,910) from a company controlled by the former CEO of the Company, and a company controlled by the President of the Company. (Note 4). 

 

9.Concentrations 

 

During the year ended December 31, 2021, the Company generated 85% of its revenues from three customers (2020 - 100% with three customers). As at December 31, 2021, the Company had 100% of its accounts receivable with two customers (2020 - 100% with three customers).

 

10.Asset Retirement Obligation 

 

Laws and regulations concerning environmental protection affect the Company’s oil and gas operations. Under current regulations, the Company is required to meet performance standards to minimize environmental impact from its activities and to perform site restoration and other closure activities. The Company’s provision for future site closure and reclamation costs is based on known requirements.

 

The Company’s determination of the environmental rehabilitation provision arising from the property at December 31, 2021 was $4,141 (CAD $5,250) (2020 - $4,123 (CAD$5,250)). This estimate was based upon an undiscounted future cost of $3,724 (CAD$5,000), an annual inflation rate of 2% and risk free rate of 1.7%.

 

The closure and reclamation expenditures were expected to be incurred in 2021 but have not yet been settled.

 

	2021	2020
	$	$
Opening balance	4,123	4,042
Foreign exchange	18	81
Ending balance	4,141	4,123

 

11.Equity Investment 

 

During the year ended December 31, 2018, the Company purchased 56,000 common shares in Kbridge Resources Development (“KRD”), a company related to the former CEO, representing 28.57% ownership of KRD, for $256,560 (CAD $350,000).

 

On March 20, 2019, the former CEO of the Company sold a further 38,000 common shares in KRD to the Company for $6,608 (CAD $8,800). The Company’s ownership in KRD increased to 47.96%.

 

The continuity of the Company’s investment in KRD is as follows:

 

Purchase of equity investment	$	256,560
Share of loss of equity investee		(229,526)
Balance at December 31, 2019	$	27,034
Share of loss of equity investee		(27,034)
Balance at December 31, 2020 and 2021	$	-

 

 

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F-12

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KBRIDGE ENERGY CORP.

Notes to the consolidated financial statements

December 31, 2021

(Expressed in U.S. dollars)

---

 

Summary financial information of KRD on a gross basis for the year ended December 31, 2021 and 2020 is as follows:

 

	December 31, 2021	December 31, 2020
As at	$	$
Current assets	521,307	290,130
Non-current assets	-	828,754
Current liabilities	(590,519)	(832,521)
Non-current liabilities	-	(597,103)
Net assets	(69,212)	(310,740)

 

	December 31, 2021	December 31, 2020
Year ended	$	$
Revenue	-	972,776
Expenses	(124,314)	(869,590)
Income (Loss) for the year	(124,314)	103,186

 

12.Income Taxes 

 

The Company has non-capital losses carried forward of approximately $1,500,000 available to offset taxable income in future years which expires beginning in fiscal 2026, and expiring in 2041.

 

The Company is subject to Canadian federal and provincial income taxes at a combined rate of 27% (2020 - 27%). The reconciliation of the provision for income taxes at the combined Canadian federal and provincial statutory rate compared to the Company’s income tax expense as reported is as follows:

 

	2021	2020
	$	$
Income (loss) before income tax	559,039	10,046
Statutory tax rate	27%	27%
Expected tax expense (recovery)	151,000	3,000
Permanent differences	(26,000)	(10,000)
Effect of foreign exchange rate and other	(19,000)	(8,000)
Use of non-capital losses	125,000	-
Change in valuation allowance	(231,000)	15,000
Provision for income taxes	-	-

 

The significant components of deferred income tax assets and liabilities at December 31, 2021 and 2020, are as follows:

 

	2021	2020
Deferred income tax assets (liability)	$	$
Non-capital losses carried forward	175,000	351,000
Marketable securities	(39,000)	16,000
Resource pool	27,000	27,000
Asset retirement obligation	(1,000)	(1,000)
Total gross deferred income tax assets	162,000	393,000
Valuation allowance	(162,000)	(393,000)
Net deferred income tax asset	-	-

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F-13

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KBRIDGE ENERGY CORP.

Notes to the consolidated financial statements

December 31, 2021

(Expressed in U.S. dollars)

---

 

 

The Company has approximately $649,000 in non-capital losses to apply to future earnings, which expire between 2034 and 2038.

 

Tax attributes are subject to review, and potential adjustment, by tax authorities.

 

13.Subsequent Event 

 

In March 2020, the World Health Organization characterized the COVID-19 virus as a global pandemic. There is significant uncertainty as to the likely effects of this outbreak which may, among other things, impact the Company’s supplies and may negatively impact the capital markets, where the Company has raised equity in the past. At the current time, the Company is unable to quantify the potential impact this pandemic may have on the Company’s future financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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F-14

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SIGNATURE

 

The registrant hereby certifies that it meets all of the requirements for annual report filing on Form 20-F-A and that it has duly caused and authorized the undersigned to sign this amended 20-F-A on its behalf.

 

KBridge Energy Corp

 

/s/ Piers VanZiffle

Piers VanZiffle

Director

 

October 28, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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3

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Form 52-109FV2

Certification of Year End Filings

Venture Issuer Basic Certificate

 

I, Piers VanZiffle, Director, certify the following:

 

1.Review: I have reviewed the financial report and MD&A (together, the “filings”) of KBridge Energy Corp (the “issuer”) for the year ended December 31, 2021. 

 

2.No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the year covered by the annual filings. 

 

3.Fair presentation: Based on my knowledge, having exercised reasonable diligence, the annual financial report together with the other financial information included in the annual filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the annual filings. 

 

Date: October 28, 2022

 

/s/ Piers VanZiffle

Piers VanZiffle

Director

 

 

NOTE TO READER

 

In contrast to the certificate required for non-venture issuers under National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (NI 52-109), this Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as defined in NI 52-109. In particular, the certifying officers filing this certificate are not making any representations relating to the establishment and maintenance of

 

i)controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and 

 

ii)a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. 

 

The issuer’s certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate. Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost effective basis DC&P and ICFR as defined in NI 5209 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.

 

 

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