Item 2. Managements 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.
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. 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. Chalks 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 $191,847
as of November 30, 2018, we require
additional funds of approximately $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, 2018. 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, 2018 we had cash in
the amount of $155 and a working capital deficiency in the amount of $191,847.
As of November 30, 2018, 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
$100,000 for the Phase 1 exploration program on the Cache River Property.
The work completed to date on the Cache River Property has
identified an area that could host significant copper and gold mineralization in
a previously unexplored area. A program of prospecting, followed by trenching
(if warranted) is recommended to field check all remaining IP anomalies prior to
undertaking additional diamond drill holes. A budget estimate of $100,000 should
suffice to complete the recommended prospecting and assaying of samples as well
as a limited trenching program if required. This budget would also cover costs
associated with the required site visit. Further diamond drilling will be
dependent on results of the recommended work program.
Phase 1 Program Proposed Expenditures
|
$
|
CDN
|
|
|
|
|
Project Management/Staff
Costs
|
$
|
7,500
|
|
|
|
|
Geologists/technicians (mapping, prospecting
compilation, reporting)
|
$
|
18,000
|
|
|
|
|
Geochemistry - Assaying
rock/core (approx. 200 samples)
|
$
|
6,000
|
|
|
|
|
Field Costs (transportation, accommodation,
fuel, etc.)
|
$
|
7,500
|
|
|
|
|
Trenching
|
$
|
7,500
|
|
|
|
|
Diamond Drilling 300 meters all inclusive
|
$
|
42,000
|
|
|
|
|
Subtotal:
|
|
$
|
88,500
|
|
Contingency ~ 13%
|
|
$
|
11,500
|
|
Phase 1 Total
|
|
$
|
100,000
|
|
As at November 30, 2018, we had a cash balance of $155. 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, 2019.
Corporate Offices
We do not own any real property. Our principal business office is located at #55-11020 Williams Road, Richmond, British Columbia, Canada, V7A 1X8 at a cost of CDN$1,000 per month. We believe that our current lease arrangements provide adequate
space for our foreseeable future needs.
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, 2018 and November 30, 2017
The following summary of our results of operations should be read in conjunction with our financial statements for the quarter ended November 30, 2018 which are included herein.
Three month summary ending November 30, 2018 and November
30, 2017
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
November 30, 2018
|
|
|
November 30, 2017
|
|
Revenue
|
$
|
Nil
|
|
$
|
Nil
|
|
Operating Expenses
|
$
|
(84,791
|
)
|
$
|
(49,573
|
)
|
Other income (expense)
|
$
|
(1,936
|
)
|
$
|
5,337
|
|
Net Loss
|
$
|
(86,727
|
)
|
$
|
(44,236
|
)
|
Expenses
Our operating expenses for the three month periods ended
November 30, 2018 and November 30, 2017 are outlined in the table below:
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
|
November 30, 2018
|
|
|
November 30, 2017
|
|
General and administrative
|
$
|
(84,791
|
)
|
$
|
(49,573
|
)
|
Foreign exchange gain (loss)
|
$
|
1,150
|
|
$
|
5,337
|
|
General and administrative expenses increased by $35,218 from
$49,573 during the three months ended November 30, 2017 to $84,791 during the
three months ended November 30, 2018 primarily as a result of a $35,447 increase
in consulting fees.
Six Months Ended November 30, 2018 and November 30, 2017
The following summary of our results of operations should be
read in conjunction with our financial statements for the quarter ended November
30, 2018 which are included herein.
Six month summary ending November 30, 2018 and November 30,
2017
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
November 30, 2018
|
|
|
November 30, 2017
|
|
Revenue
|
$
|
Nil
|
|
$
|
Nil
|
|
Operating Expenses
|
$
|
(137,371
|
)
|
$
|
(100,530
|
)
|
Mineral exploration costs
|
$
|
-
|
|
$
|
(222
|
)
|
Other income (expense)
|
$
|
(1,398
|
)
|
$
|
(7,265
|
)
|
Net Loss
|
$
|
(138,769
|
)
|
$
|
(108,017
|
)
|
Expenses
Our operating expenses for the six month periods ended November
30, 2018 and November 30, 2017 are outlined in the table below:
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
November 30, 2018
|
|
|
November 30, 2017
|
|
General and administrative
|
$
|
(137,371
|
)
|
$
|
(100,530
|
)
|
Foreign exchange gain (loss)
|
$
|
1,688
|
|
$
|
(7,265
|
)
|
General and administrative expenses increased by $36,841 from
$100,530 during the six months ended November 30, 2017 to $137,371 during the
six months ended November 30, 2018 primarily as a result of a $25,244 increase
in consulting fees.
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
|
|
|
As At
|
|
|
|
November 30,
|
|
|
May 31,
|
|
|
|
2018
|
|
|
2018
|
|
Current assets
|
$
|
4,102
|
|
$
|
21,094
|
|
Current liabilities
|
|
(195,949
|
)
|
|
(198,189
|
)
|
Working capital (deficit)
|
$
|
(191,847
|
)
|
$
|
(177,095
|
)
|
Cash Flows
|
|
Six Months Ended
|
|
|
|
|
|
|
|
|
|
|
November 30,
|
|
|
November 30,
|
|
|
|
2018
|
|
|
2017
|
|
Net Cash Used in Operating
Activities
|
$
|
(58,925
|
)
|
$
|
(24,420
|
)
|
Net Cash Provided by Financing Activities
|
|
40,098
|
|
|
24,373
|
|
Net change in cash during
period
|
$
|
(18,827
|
)
|
$
|
(47
|
)
|
Operating Activities
Net cash used in operating activities during the six months
ended November 30, 2018, was $58,925 compared to $24,420 during the six months
ended November 30, 2017. The increase was primarily a result of increased
operating expenses during the six months ended November 30, 2018 as compared to
2017.
Financing Activities
During the six months ended November 30, 2018, we received
$40,098 through the issuance of shares/shares subscribed in private placements
and net shareholder advances. In the comparable period, the Company received
$24,373 in shares subscribed in private placements, net shareholder advances and
the repayment of shareholder advances in the amount of $5,780.
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.