Port of Call Online Inc.

The Company is a party to a two-year lease, with USMC, a related party, for 1,000 square feet of space located in Ione, California (the “Ione Lease”) with respect to its corporate operations (See Note 10). The Ione Lease expires in November 2022 (subject to automatic extensions of one month) and has an annual base rental during the initial term of $1,500.

On December 1, 2020, the Company recognized ROU assets and lease liabilities of $35,543. The Company elected to not recognize ROU assets and lease liabilities arising from short-term office leases (leases with initial terms of twelve months or less, which are deemed immaterial) on its balance sheets.

When measuring lease liabilities for leases that were classified as operating leases, the Company discounted lease payments using its estimated incremental borrowing rate at December 1, 2020. The weighted average incremental borrowing rate applied was 5%.

The Company entered into a contract mining agreement with USMC, a company owned by the majority stockholders of the Company, A. Scott Dockter and John Bremer, pursuant to which USMC will provide various technical evaluations and mine development services to the Company. During the three months ended February 28, 2021 and February 29, 2021, the Company did not make any purchases from USMC. No services were rendered by USMC for the three months ended February 28, 2021 and February 29, 2020. In addition, during the three months ended February 28, 2021 and February 29, 2020, USMC made no payments to the Company’s vendors and creditors on behalf of the Company and also made cash advances to the Company of $242,077 and $33,000, respectively, and are recorded as part of due to affiliates on the Company’s unaudited condensed consolidated balance sheets. The balance due to USMC is 511,235 and $1,091,158 at February 28, 2021 and November 30, 2020, respectively.

On March 11, 2021, the Company entered into a Securities Purchase Agreement (“Purchase Agreement”) with USMC, effective as of November 25, 2020, pursuant to which USMC may purchase up to $2,000,000 of the Company’s 5% unsecured convertible promissory notes, in one or more closings.

We will require additional funds to implement our growth strategy. We do not believe that our current cash and cash equivalents will be sufficient to meet our working capital requirements for the next twelve months. We have had negative cash flow from operating activities as we have not yet begun to generate sufficient and consistent revenues to cover our operating expenses. Until we are able to establish a sufficient revenue stream from operations our ability to meet our current financial liabilities and commitments will be primarily dependent upon proceeds from outside capital sources including USMC, an affiliated entity. There is no assurance that we will be able to obtain necessary capital or that our estimates of our capital requirements will prove to be accurate. Even if we are able to secure outside financing, it may not be available in the amounts or times when we require or on favorable terms. We currently do not have any agreements or understandings for additional financing. If we are unable to raise sufficient capital we will be required to delay or forego some portion of our business plan or cease operations.