Exhibit 1
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Unaudited condensed financial statements of FEC Resources Inc. for the three and six months ended June 30, 2019
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Exhibit 2
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Management Discussion and Analysis of Financial Condition and Results of Operations for the Period Ended June 30, 2019 of FEC Resources Inc.
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Exhibit 3
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Certification of June 30, 2019 filings – CEO
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Exhibit 4
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Certification of June 30, 2019 filings - CFO
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FEC Resources Inc.
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(Registrant)
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Date: August 31, 2019
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By: /s/ Paul Wallace
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Paul Wallace
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President, Chief Executive Officer and Chief Financial Officer
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As at: |
June 30
2019
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December 31
2018
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||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash
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$
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99,444
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$
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228,991
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||||
Receivables
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2,468
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2,045
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||||||
Prepaid expenses
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770
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6,555
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||||||
$
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102,682
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237,591
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||||||
Non-current assets
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||||||||
Equipment
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248
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292
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||||||
Investment in Forum Energy Limited (Note 9)
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1,665,000
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1,665,000
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||||||
$
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1,767,930
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$
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1,902,883
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Trade and accrued payables (Note 6)
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$
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30,900
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$
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55,822
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30,900
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55,822
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Share capital (Note 5)
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16,732,397
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16,732,397
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||||||
Contributed surplus (Note 5)
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3,058,063
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3,058,063
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||||||
Deficit
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(18,053,430
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)
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(17,943,399
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)
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1,737,030
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1,847,061
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|||||||
$
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1,767,930
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$
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1,902,883
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“Paul Wallace”
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“Lyle Brown”
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Director |
Director |
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Three Month Period Ended
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Six Month Period Ended
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|||||||||||||||
June 30, 2019
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June 30, 2018
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June 30, 2019
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June 30, 2018
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|||||||||||||
General and administration expenses
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||||||||||||||||
General and administration (Note 7)
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$
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50,397
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$
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54,230
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$
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111,731
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$
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97,846
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||||||||
Operating loss
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(50,397
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)
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(54,230
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)
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(111,731
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)
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(97,846
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)
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||||||||
Unrealized gain on investments
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-
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-
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-
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-
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Interest income
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742
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1,276
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1,700
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2,406
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Net income (loss) and total comprehensive income (loss) for the period
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$
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(49,655
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)
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$
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(52,954
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)
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$
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(110,031
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)
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$
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(95,440
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)
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Earnings (loss) per common share
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||||||||||||||||
- Basic and diluted
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$
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-
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$
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-
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$
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-
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$
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-
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Share capital
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Contributed surplus
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Deficit
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Total
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|||||||||||||
Balance January 1, 2019
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$
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16,732,397
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$
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3,058,063
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$
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(17,943,399
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)
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$
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1,847,061
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Total comprehensive (loss) for the period
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-
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-
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(110,031
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)
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(110,031
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)
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Balance June 30, 2019
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$
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16,732,397
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$
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3,058,063
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$
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(18,053,430
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)
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$
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1,737,030
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Share capital
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Contributed surplus
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Deficit
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Total
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|||||||||||||
Balance January 1, 2018
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$
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16,732,397
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$
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3,058,063
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$
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(17,725,734
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)
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$
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2,064,726
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Total comprehensive income for the period
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-
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-
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(95,440
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)
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(95,440
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)
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Balance June 30, 2018
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$
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16,732,397
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$
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3,058,063
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$
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(17,821,174
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)
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$
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1,969,286
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|||||||
June 30
2019
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June 30
2018
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|||||||
Cash provided by (used in) | ||||||||
OPERATING ACTIVITIES | ||||||||
$
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(110,031
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)
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$
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(95,440
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)
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Non-cash items included in income (loss)
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||||||||
Amortization
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44
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63
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(109,987
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)
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(95,377
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)
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Accounts receivable
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(423
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)
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(1,492
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)
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Prepaid expenses
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5,785
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6,363
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Accounts payable and accrued liabilities
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(24,922
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)
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7,307
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Net cash used by operating activities
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(129,547
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)
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(83,199
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)
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Net (decrease) increase in cash
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(129,547
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)
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(83,199
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)
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Cash – beginning of the period
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228,991
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425,148
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Cash – end of the period
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$
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99,444
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$
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341,949
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a)
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Statement of Compliance
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b)
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Basis of Measurement
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c)
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Nature of Operations and Going Concern
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Note 3 |
Summary of Significant Accounting Policies and Critical Accounts Estimates and Judgments
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a)
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Authorized:
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Common Shares
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Number
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Amount
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|||||||
Balance June 30, 2019 and December 31, 2018
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409,143,765
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$
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16,732,397
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b)
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Nature and Purpose of Equity and Reserves
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General and administrative expenses include
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June 30, 2019
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June 30, 2018
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||||||
Professional fees
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$
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32,740
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$
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16,939
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Bank charges
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1,953
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1,673
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Listing and filing fees
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9,266
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12,300
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Office and miscellaneous
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11,072
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12,665
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Consulting (Note 6)
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54,000
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54,000
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Amortization
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44
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63
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Foreign exchange
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2,656
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206
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$
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111,731
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$
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97,846
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General and administrative expenses include
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Three Months Ended June 30, 2019
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Three Months Ended June 30, 2018
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Professional fees
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$
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12,850
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$
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13,673
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Bank charges
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929
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879
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Listing and filing fees
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5,732
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6,180
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Office and miscellaneous
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5,352
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6,143
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Consulting (Note 6)
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27,000
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27,000
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Amortization
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22
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31
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Foreign exchange
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(1,488
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)
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324
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$
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50,397
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$
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54,230
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June 30, 2019
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June 30, 2018
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Weighted average number of common shares (basic and diluted)
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409,143,765
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409,143,765
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Balance June 30, 2019 and December 31, 2018
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5,550,200
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$
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1,665,000
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SC block
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% interest
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Currently
Producing
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SC72 Recto Bank
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70%
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No
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SC40 North Cebu
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66.67%
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No
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SC14C-1 Galoc
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2.27%
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Yes
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SC6A Octon
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5.56%
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No
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SC6B Bonita
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8.18%
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No
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SC14A Nido
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8.46%
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Yes*
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SC14B Matinloc
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12.40%
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Yes*
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SC14B-1 N. Matinloc
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19.46%
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No
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SC14C-2 W. Linapacan
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9.10%
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No
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SC14D Retention Area
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8.16%
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No
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SC14 Tara
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10%
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No
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•
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Development of SC72
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•
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Continued participation in Galoc
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•
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Continued review of exploration blocks to identify potential drilling targets
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•
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Continued review of administrative expenses
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•
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Forum Energy’s cash inflows are dependent on the Galoc Field production and the economic life of this field is expected to end in 2021. Forum Energy’s operations do not generate sufficient cash to fund
new exploration work; so in the event Forum Energy issued new capital to fund these costs, the Company’s interest in Forum Energy will be diluted
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•
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Forum Energy is a closely held private company and there is a limited population of potential buyers for FEC’s relatively small interest in Forum Energy
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•
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Forum Energy’s interest in its main asset SC72 could be diluted depending on the agreement reached, if any, between the Philippine and Chinese governments concerning the maritime dispute.
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•
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Further exploration work has to be completed on SC72 and SC40 to confirm the value of the resources within these properties.
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•
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In March 2017 Forum Energy, through a subsidiary, entered into an unsecured loan agreement with PXP that provides for a loan facility of up to US$6 million. The balance outstanding at the end of 2017 was
approximately US$5.5 million. The loan facility has a term of three years and bears interest at LIBOR + 3.5% per annum. There is no certainty that this loan facility will be renewed, in which case Forum Energy may issue new shares to
settle this amount outstanding. Terms of the loan agreement do not include any right for PXP to convert an unpaid amount into new shares of Forum Energy.
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Year Ended
12/31/18
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Year Ended
12/31/17
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Year Ended
12/31/16
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Revenue
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$
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-
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$
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-
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$
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-
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Net (loss) income
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$
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(217,665
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)
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$
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1,803,036
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$
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(249,569
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)
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Basic and Diluted Income (Loss) per share
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$
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(0.00)/(0.0
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))
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$
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(0.00)/(0.0
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))
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$
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(0.00)/(0.0
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))
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Dividends per share
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$
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0.00
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$
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0.00
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$
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0.00
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Weighted Avg. Shares O/S (’000)
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409,143,765
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409,143,765
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411,274,913
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Working Capital
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$
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181,769
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$
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399,308
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$
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261,094
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Long-Term Debt
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$
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-
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$
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-
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$
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-
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Shareholders’ Equity/(Deficiency)
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$
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1,847,061
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$
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2,064,726
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$
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261,690
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Total Assets
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$
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1,902,883
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$
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2,098,671
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$
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320,326
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Computer Equipment
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March 31 2019
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Cost
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Opening Cost
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$
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15,543
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Additions
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-
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Ending Cost
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15,543
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Accumulated Depreciation
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Opening Accumulated Depreciation
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$
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(15,251
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)
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Charge for the year
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(44
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)
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Ending Accumulated Depreciation
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(15,295
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)
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Carrying Value
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$
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248
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2nd
Qtr 19
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1st
Qtr 19
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4th
Qtr 18
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3rd
Qtr 18
|
2nd
Qtr 18
|
1st
Qtr 18
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4th
Qtr 17
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3rd
Qtr 17
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(Loss) Income
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(50)
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(60)
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(75)
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(47)
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(53)
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(43)
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(53)
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(31)
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Basic and Diluted Loss per share
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0.00
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0.00
|
0.00
|
0.00
|
0.00
|
0.00
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0.00
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0.00
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-
|
Market Risk
|
-
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Credit Risk
|
-
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Liquidity Risk
|
a)
|
Market Risk
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b)
|
Credit risk
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c)
|
Liquidity risk
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General and administrative expenses include
|
June 30, 2019
|
June 30, 2018
|
||||||
Professional fees
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$
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32,740
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$
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16,939
|
||||
Bank charges
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1,953
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1,673
|
||||||
Listing and filing fees
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9,266
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12,300
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||||||
Office and miscellaneous
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11,072
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12,665
|
||||||
Consulting (Note 6)
|
54,000
|
54,000
|
||||||
Amortization
|
44
|
63
|
||||||
Foreign exchange
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2,656
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206
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||||||
$
|
111,731
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$
|
97,846
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Three Months Ended June 30, 2019
|
Three Months Ended June 30, 2018
|
|||||||
Professional fees
|
$
|
12,850
|
$
|
13,673
|
||||
Bank charges
|
929
|
879
|
||||||
Listing and filing fees
|
5,732
|
6,180
|
||||||
Office and miscellaneous
|
5,352
|
6,143
|
||||||
Consulting (Note 6)
|
27,000
|
27,000
|
||||||
Amortization
|
22
|
31
|
||||||
Foreign exchange
|
(1,488
|
)
|
324
|
|||||
$
|
50,397
|
$
|
54,230
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Class
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Par Value
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Authorized
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Number Issued and Outstanding as at
June 30, 2019
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Number Issued and Outstanding as at December 31, 2018
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Common Shares
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NPV
|
Unlimited
|
409,143,765
|
409,143,765
|
Preferred Shares (convertible redeemable voting)
|
NPV
|
Unlimited
|
None
|
None
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1.
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Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of FEC Resources Inc. (the
“issuer”) for the interim period ended June 30, 2019.
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2.
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No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim 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 period covered by the interim
filings.
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3.
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Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other
financial information included in the interim 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 interim
filings.
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“Paul Wallace”
Paul Wallace President and Chief Executive Officer |
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NOTE TO READER
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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
|
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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
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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.
|
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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 52‑109 may result in additional risks to
the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.
|
1.
|
Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of FEC Resources Inc. (the
“issuer”) for the interim period ended June 30, 2019.
|
2.
|
No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim 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 period covered by the interim
filings.
|
3.
|
Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other
financial information included in the interim 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 interim
filings.
|
“Paul Wallace”
Paul Wallace Chief Financial Officer |
||
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 52‑109 may result in additional risks to
the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.
|