Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States generally accepted accounting principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report, particularly in the section entitled "Risk Factors".
In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "CDN$" refer to Canadian dollars and all references to "common shares" refer to the common shares in our capital stock.
As used in this quarterly report, the terms "we", "us", "our", the "Company" and "Wolverine" mean Wolverine Technologies Corp., unless otherwise indicated.
Corporate History
Our company was incorporated in the State of Nevada on February 23, 2006 and is quoted on the OTC Pink under the symbol WOLV.
Since we began operations in 2006, the Company has been focused primarily on the exploration for and development of base and precious metal properties located in North America. In February 2007, we acquired a right to earn a 90% interest in approximately 520 claims through a combination of an upfront cash payment of $34,000, an upfront share payment of 34,000,000 common shares of Wolverine, and by making exploration expenditure commitments totaling $600,000 over three years. From 2007 to the present, we spent approximately US$710,757 to earn our 90% interest in the Cache River Property; Shenin Resources Inc. maintains a 10% carried interest in the project.
The Cache River Property now consists of a total of 53 mineral claims of which 6 claims are held under Licence 013472M and an additional 47 claims were recently staked and are held under Licenses 031643M and 031889M. We are not currently conducting any exploration on the Cache River Property but will return to exploration on the Cache River Property in the spring/summer of 2022.
We have not yet determined whether the Cache River Property contain mineral reserves that are economically recoverable.
Our Current Business
We are an exploration stage mining company engaged in the identification, acquisition, and exploration of metals and minerals with a focus on base and precious metals. Our current operational focus is to raise sufficient funds to continue exploration activities on our property in Labrador, Canada, known as the Cache River Property. The Cache River Property consists of a total of 53 mineral claims of which 6 claims are held under Licence 013472M and an additional 47 claims were recently staked and are held under Licenses 031643M and 031889M. We are not currently conducting any exploration on the Cache River Property. We intend to conduct further exploration activities on the Cache River when financing is available. We expect to review other potential exploration projects from time to time as they are presented to us.
On April 19, 2016, Wolverine entered into a Share Purchase Agreement with our Director, David Chalk, pursuant to which we have agreed to issue in a private placement 400,000,000 shares of our common stock in consideration for one-third of the net proceeds that Mr. Chalk may realize from the sale of Mr. Chalk's 15% equity interest in Decision-Zone Inc., a privately held cyber-security software company based in Ontario, Canada. The Agreement is subject to our Company increasing its authorized capital to allow for the issuance of the consideration shares. As of the date of this filing, the agreement has not yet closed.
Cash Requirements
There is limited historical financial information about us upon which to base an evaluation of our performance. We are in the development stage and have not generated any revenues from activities. We cannot guarantee we will be successful in our business activities. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, and possible cost overruns due to price and cost increases in services.
Over the next twelve months we intend to use any funds that we may have available to fund our Plan of Operation Not accounting for our working capital deficit of $346,573 as of November 30, 2021, we require additional funds of approximately $78,000 (CDN$100,000) at a minimum to proceed with our plan of operation over the next twelve months. As we do not have the funds necessary to cover our projected operating expenses for the next twelve-month period, we will be required to raise additional funds through the issuance of equity securities, through loans or through debt financing. There can be no assurance that we will be successful in raising the required capital or that actual cash requirements will not exceed our estimates. We intend to fulfill any additional cash requirement through the sale of our equity securities.
Our auditors have issued a going concern opinion for our year ended May 31, 2021. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated any revenues and no revenues are anticipated. As at November 30, 2021, we had minimal cash and had a working capital deficiency in the amount of $346,573. As November 30, 2021, we do not have sufficient working capital to enable us to carry out our stated plan of operation for the next twelve months.
Plan of Operation
The Plan of Operation for the next 12 months is to raise $78,000 (CDN$100,000) for the Phase 1 exploration program on the Cache River Property.
The work recently completed on the Cache River Property has identified an area that could host significant copper and gold mineralization in a previously unexplored area. Exploration programs conducted between 2006 and 2012 consisting of prospecting, trenching and diamond drilling did not return significant results. However airborne and ground geophysical surveys identified numerous anomalies. Much of the previous drilling was limited in depth and many anomalies remain untested. Prior to launching further deeper drilling, a review of all previous geophysical surveys will be completed by a qualified geophysicist to determine which type of new geophysical survey should be performed to locate deeper seated mineralization on the original 6 claims and on the new additional 47 claims that were staked in November and December of 2020.
Phase 1 Program Proposed Expenditures
|
$CDN
|
Project Management/Staff Costs
|
$ 10,000
|
Geophysicist (review of previous geophysics/work; recommend new program)
|
$ 15,000
|
Geophysical survey - to be determined
|
$ 55,000
|
Report revision/miscellaneous
|
$ 7,500
|
Subtotal
|
$ 87,500
|
Contingency 13%
|
$ 12,500
|
Phase 1 Total
|
$100,000
|
As at November 30, 2021, we did not have cash and we will need to raise additional financing to fund our plan of operation over the next 12 months.
The continuation of our business is dependent upon obtaining further financing and achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.
There are no assurances that we will be able to obtain further funds required for our continued operations. As noted herein, we are pursuing various financing alternatives to meet our immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations.
Purchase of Significant Equipment
We do not intend to purchase any significant equipment over the twelve months ending November 30, 2022.
Corporate Offices
We do not own any real property. Our principal business offices are located at #55-11020 Williams Road, Richmond British Columbia, Canada, V7A 1X8 at a cost of CDN $1,000 per month on a month-to-month basis.
Employees
Currently we do not have any employees. The Company utilizes consultants for the management, regulatory, administration, investor relations and geological functions of the Company. We do not expect any material changes in the number of employees over the next 12-month period. We will continue to retain consultants as required.
Critical Accounting Policies
Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles used in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements. For information regarding our Critical Accounting Policies, see the "Application of Critical Accounting Policies" section in our Form 10-K.
Results of Operations
Three Months Ended November 30, 2021 and November 30, 2020
The following summary of our results of operations should be read in conjunction with our financial statements for the quarter ended November 30, 2021, which are included herein.
Three-month summary ending November 30, 2021 and November 30, 2020
|
|
Three Months Ended
|
|
|
|
November 30, 2021
|
|
|
November 30, 2020
|
|
Revenue
|
$
|
Nil
|
|
$
|
Nil
|
|
Operating Expenses
|
$
|
(91,458
|
)
|
$
|
(37,124
|
)
|
Other income (expense)
|
$
|
2,835
|
|
$
|
(2,122
|
)
|
Net Loss
|
$
|
(88,623
|
)
|
$
|
(39,246
|
)
|
Expenses
Our operating expenses for the three-month periods ended November 30, 2021 and November 30, 2020 are outlined in the table below:
|
|
Three Months Ended
|
|
|
|
November 30, 2021
|
|
|
November 30, 2020
|
|
General and administrative
|
$
|
84,124
|
|
$
|
35,693
|
|
Mineral property exploration costs
|
$
|
7,334
|
|
$
|
1,431
|
|
General and administrative expenses increased by $48,431 from $35,693 during the three months ended November 30, 2020 to $84,124 during the three months ended November 30, 2021. This increase was primarily a result of an increase in professional fees of $28,934, an increase in transfer agent and filing fees of $12,697, and an increase in consulting fees of $6,447.
Mineral property and exploration costs increased by $5,903 from $1,431 during the three months ended November 30, 2020 to $7,334 during the three months ended November 30, 2021. Mineral property exploration costs increased during the quarter as a result of extending the staking licenses on mineral claims in Labrador, Canada.
Six Months Ended November 30, 2021 and November 30, 2020
The following summary of our results of operations should be read in conjunction with our financial statements for the quarter ended November 30, 2021, which are included herein.
Six-month summary ending November 30, 2021 and November 30, 2020
|
|
Six Months Ended
|
|
|
|
November 30, 2021
|
|
|
November 30, 2020
|
|
Revenue
|
$
|
Nil
|
|
$
|
Nil
|
|
Operating Expenses
|
$
|
(155,329
|
)
|
$
|
(70,995
|
)
|
Other income (expense)
|
$
|
11,711
|
|
$
|
(5,113
|
)
|
Net Loss
|
$
|
(143,618
|
)
|
$
|
(76,108
|
)
|
Expenses
Our operating expenses for the six-month periods ended November 30, 2021 and November 30, 2020 are outlined in the table below:
|
|
Six Months Ended
|
|
|
|
November 30, 2021
|
|
|
November 30, 2020
|
|
General and administrative
|
$
|
147,995
|
|
$
|
69,564
|
|
Mineral property exploration costs
|
$
|
7,334
|
|
$
|
1,431
|
|
General and administrative expenses increased by $78,431 from $69,564 during the six months ended November 30, 2020 to $147,995 during the six months ended November 30, 2021. This increase was primarily a result of an increase in professional fees of $46,882, an increase in transfer agent and filing fees of $23,317, and an increase in consulting fees of $7,312.
Mineral property and exploration costs increased by $5,903 from $1,431 during the six months ended November 30, 2020 to $7,334 during the three months ended November 30, 2021. Mineral property exploration costs increased during the quarter as a result of extending the staking licenses on mineral claims in Labrador, Canada.
Revenue
We have not earned any revenues since our inception, and we do not anticipate earning revenues in the upcoming quarter.
Liquidity and Financial Condition
Working Capital
|
|
As At
November 30,
2021
|
|
|
As At
May 31,
2021
|
|
Current assets
|
$
|
8,908
|
|
$
|
18,424
|
|
Current liabilities
|
|
(355,481
|
)
|
|
(335,456
|
)
|
Working Capital Deficit
|
$
|
(346,573
|
)
|
$
|
(317,032
|
)
|
Cash Flows
|
|
Six Months Ended
|
|
|
|
November 30,
2021
|
|
|
November 30,
2020
|
|
Net Cash Used in Operating Activities
|
$
|
(118,732
|
)
|
$
|
(3,210
|
)
|
Net Cash Provided by Financing Activities
|
|
114,077
|
|
|
33
|
|
Net change in cash during period
|
$
|
(4,655
|
)
|
$
|
(3,177
|
)
|
Operating Activities
Net cash used in operating activities during the six months ended November 30, 2021, was $118,732 compared to $3,210 during the six months ended November 30, 2020. The increase in cash used in operating activities was primarily a result of an increase in net loss to $143,618 for the six months ended November 30, 2021 compared to $76,108 for the six months ended November 30, 2020, as well as a reduction in accounts payable of $3,528 for the six months ended November 30, 2021 as compared to $59,452 for the six months ended November 30, 2020 and a reduction in the change in accounts payable to related parties to $16,497 for the six months ended November 30, 2021 as compared to $14,781 for the six months ended November 30, 2020.
Financing Activities
During the six months ended November 30, 2021, we received $114,077 from financing activities. In the comparable period, we received $33 from financing activities.
Contractual Obligations
As a "smaller reporting company", we are not required to provide tabular disclosure obligations.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
Recent Accounting Standards
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.