Item 1. Financial Statements.
Our unaudited interim financial statements for the nine month period ended February 29, 2020 form part of this quarterly report. They are stated in United States Dollars (US$) and are prepared in accordance with United States generally accepted accounting principles.
WOLVERINE TECHNOLOGIES CORP.
February 29, 2020
(Expressed in U.S. dollars)
(Unaudited)
WOLVERINE TECHNOLOGIES CORP.
Balance Sheets
(Expressed in U.S. dollars)
|
|
February 29,
2020
$
|
|
|
May 31,
2019
$
|
|
|
|
(Unaudited)
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
GST receivable
|
|
2,238
|
|
|
3,592
|
|
Total Assets
|
|
2,238
|
|
|
3,592
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Checks issued in excess of funds on deposit
|
|
44
|
|
|
-
|
|
Accounts payable and accrued liabilities
|
|
172,466
|
|
|
191,901
|
|
Short term debt - related parties
|
|
30,654
|
|
|
46,757
|
|
Total Liabilities
|
|
203,164
|
|
|
238,658
|
|
|
|
|
|
|
|
|
Stockholders' Deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, 2,000,000,000 shares authorized, $0.001 par value
561,737,659 and 477,270,993 shares issued and outstanding at February 29, 2020 and May 31, 2019, respectively
|
|
561,738
|
|
|
477,271
|
|
Subscriptions received
|
|
69,262
|
|
|
60,862
|
|
Additional paid-in capital
|
|
5,415,391
|
|
|
5,238,347
|
|
Accumulated deficit
|
|
(6,247,317
|
)
|
|
(6,011,546
|
)
|
Total Stockholders' Deficit
|
|
(200,926
|
)
|
|
(235,066
|
)
|
Total Liabilities and Stockholders' Deficit
|
|
2,238
|
|
|
3,592
|
|
WOLVERINE TECHNOLOGIES CORP.
Statements of Operations
(Expressed in U.S. dollars)
(Unaudited)
|
|
Three Months
|
|
|
Three Months
|
|
|
Nine Months
|
|
|
Nine Months
|
|
|
|
Ended
|
|
|
Ended
|
|
|
Ended
|
|
|
Ended
|
|
|
|
February 29,
|
|
|
February 28,
|
|
|
February 29,
|
|
|
February 28,
|
|
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
64,935
|
|
|
46,061
|
|
|
191,163
|
|
|
183,432
|
|
Total Operating Expenses
|
|
64,935
|
|
|
46,061
|
|
|
191,163
|
|
|
183,432
|
|
Net Loss Before Other Expenses
|
|
(64,935
|
)
|
|
(46,061
|
)
|
|
(191,163
|
)
|
|
(183,432
|
)
|
Other Income (Expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on forgiveness of debt
|
|
-
|
|
|
-
|
|
|
2,747
|
|
|
-
|
|
Foreign exchange gain (loss)
|
|
168
|
|
|
(665
|
)
|
|
(3,591
|
)
|
|
1,023
|
|
Loss on settlement of debt
|
|
(45,651
|
)
|
|
-
|
|
|
(43,764
|
)
|
|
(3,086
|
)
|
Total Other Income (Expense)
|
|
(45,483
|
)
|
|
(665
|
)
|
|
(44,608
|
)
|
|
(2,063
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss
|
|
(110,418
|
)
|
|
(46,726
|
)
|
|
(235,771
|
)
|
|
(185,495
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Per Common Share, Basic and Diluted
|
|
(0.00
|
)
|
|
(0.00
|
)
|
|
(0.00
|
)
|
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Common Shares Outstanding, Basic and Diluted
|
|
543,969,040
|
|
|
477,270,993
|
|
|
523,927,766
|
|
|
454,065,865
|
|
WOLVERINE TECHNOLOGIES CORP.
Statements of Stockholders' Deficit
For the three and nine months ended February 29, 2020 and February 28, 2019
(Expressed in U.S. dollars)
(Unaudited)
Three and nine months ended February 29, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscriptions
|
|
|
Paid-in
|
|
|
Accumulated
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Received
|
|
|
Capital
|
|
|
Deficit
|
|
|
Total
|
|
|
|
#
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Balance, May 31, 2019
|
|
477,270,993
|
|
|
477,271
|
|
|
60,862
|
|
|
5,238,347
|
|
|
(6,011,546
|
)
|
|
(235,066
|
)
|
Common stock subscribed for cash
|
|
-
|
|
|
-
|
|
|
43,500
|
|
|
-
|
|
|
-
|
|
|
43,500
|
|
Common stock issued for cash
|
|
5,000,000
|
|
|
5,000
|
|
|
-
|
|
|
7,349
|
|
|
-
|
|
|
12,349
|
|
Common stock issued for subscription payable
|
|
16,200,000
|
|
|
16,200
|
|
|
(60,862
|
)
|
|
44,662
|
|
|
-
|
|
|
-
|
|
Common stock issued to settle debt
|
|
1,500,000
|
|
|
1,500
|
|
|
-
|
|
|
1,500
|
|
|
-
|
|
|
3,000
|
|
Net loss for the period
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(65,010
|
)
|
|
(65,010
|
)
|
Balance, August 31, 2019
|
|
499,970,993
|
|
|
499,971
|
|
|
43,500
|
|
|
5,291,858
|
|
|
(6,076,556
|
)
|
|
(241,227
|
)
|
Common stock subscribed for cash
|
|
-
|
|
|
-
|
|
|
9,750
|
|
|
-
|
|
|
-
|
|
|
9,750
|
|
Net loss for the period
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(60,343
|
)
|
|
(60,343
|
)
|
Balance, November 30, 2019
|
|
499,970,993
|
|
|
499,971
|
|
|
53,250
|
|
|
5,291,858
|
|
|
(6,136,899
|
)
|
|
(291,820
|
)
|
Common stock issued to settle debt
|
|
61,766,666
|
|
|
61,767
|
|
|
-
|
|
|
123,533
|
|
|
-
|
|
|
185,300
|
|
Common stock subscribed for cash
|
|
-
|
|
|
-
|
|
|
16,012
|
|
|
-
|
|
|
-
|
|
|
16,012
|
|
Net loss for the period
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(110,418
|
)
|
|
(110,418
|
)
|
Balance, February 29, 2020
|
|
561,737,659
|
|
|
561,738
|
|
|
69,262
|
|
|
5,415,391
|
|
|
(6,247,317
|
)
|
|
(200,926
|
)
|
Three and nine months ended February 28, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subscriptions
|
|
|
Paid-in
|
|
|
Accumulated
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Received
|
|
|
Capital
|
|
|
Deficit
|
|
|
Total
|
|
|
|
#
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Balance, May 31, 2018
|
|
432,020,993
|
|
|
432,021
|
|
|
66,328
|
|
|
5,105,472
|
|
|
(5,780,916
|
)
|
|
(177,095
|
)
|
Common stock subscribed for cash
|
|
-
|
|
|
-
|
|
|
2,282
|
|
|
-
|
|
|
-
|
|
|
2,282
|
|
Net loss for the period
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(52,042
|
)
|
|
(52,042
|
)
|
Balance, August 31, 2018
|
|
432,020,993
|
|
|
432,021
|
|
|
68,610
|
|
|
5,105,472
|
|
|
(5,832,958
|
)
|
|
(226,855
|
)
|
Common stock subscribed for cash
|
|
-
|
|
|
-
|
|
|
12,220
|
|
|
-
|
|
|
-
|
|
|
12,220
|
|
Common stock issued for cash
|
|
23,800,000
|
|
|
23,800
|
|
|
(68,610
|
)
|
|
68,525
|
|
|
-
|
|
|
23,715
|
|
Common stock subscribed to settle debt
|
|
6,850,000
|
|
|
6,850
|
|
|
-
|
|
|
20,550
|
|
|
-
|
|
|
27,400
|
|
Common stock subscribed to settle related party debt
|
|
14,600,000
|
|
|
14,600
|
|
|
-
|
|
|
43,800
|
|
|
-
|
|
|
58,400
|
|
Net loss for the period
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(86,727
|
)
|
|
(86,727
|
)
|
Balance, November 30, 2018
|
|
477,270,993
|
|
|
477,271
|
|
|
12,220
|
|
|
5,238,347
|
|
|
(5,919,685
|
)
|
|
(191,847
|
)
|
Common stock subscribed for cash
|
|
-
|
|
|
-
|
|
|
33,812
|
|
|
-
|
|
|
-
|
|
|
33,812
|
|
Net loss for the period
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(46,726
|
)
|
|
(46,726
|
)
|
Balance, February 28, 2019
|
|
477,270,993
|
|
|
477,271
|
|
|
46,032
|
|
|
5,238,347
|
|
|
(5,966,411
|
)
|
|
(204,761
|
)
|
WOLVERINE TECHNOLOGIES CORP.
Statements of Cash Flows
(Expressed in U.S. dollars)
(Unaudited)
|
|
Nine Months
|
|
|
Nine Months
|
|
|
|
Ended
|
|
|
Ended
|
|
|
|
February 29,
|
|
|
February 28,
|
|
|
|
2020
|
|
|
2019
|
|
|
|
$
|
|
|
$
|
|
|
|
|
|
|
|
|
Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(235,771
|
)
|
|
(185,495
|
)
|
|
|
|
|
|
|
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
Loss on settlement of debt
|
|
43,764
|
|
|
3,086
|
|
(Gain) on forgiveness of debt
|
|
(2,747
|
)
|
|
-
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other receivable
|
|
1,354
|
|
|
(3,753
|
)
|
Accounts payable
|
|
82,596
|
|
|
20,094
|
|
Accounts payable - related parties
|
|
29,149
|
|
|
72,925
|
|
|
|
|
|
|
|
|
Net Cash Used in Operating Activities
|
|
(81,655
|
)
|
|
(93,143
|
)
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Checks issued in excess of funds on deposit
|
|
44
|
|
|
-
|
|
Advances from shareholder
|
|
-
|
|
|
2,135
|
|
Proceeds from issuance of common stock
|
|
12,349
|
|
|
25,997
|
|
Net proceeds from common stock subscriptions
|
|
69,262
|
|
|
46,032
|
|
|
|
|
|
|
|
|
Net Cash Provided by Financing Activities
|
|
81,655
|
|
|
74,164
|
|
|
|
|
|
|
|
|
Change in Cash
|
|
-
|
|
|
(18,979
|
)
|
|
|
|
|
|
|
|
Cash, Beginning of Period
|
|
-
|
|
|
18,982
|
|
|
|
|
|
|
|
|
Cash, End of Period
|
|
-
|
|
|
3
|
|
|
|
|
|
|
|
|
Non-cash Investing and Financing Activities:
|
|
|
|
|
|
|
Shares issued to settle accounts payable
|
|
128,300
|
|
|
27,400
|
|
Shares issued to settle related party accounts payable
|
|
60,000
|
|
|
58,400
|
|
Payments made by shareholders on behalf of Company
|
|
-
|
|
|
3,302
|
|
Shares issued for prior year subscriptions
|
|
60,862
|
|
|
66,328
|
|
|
|
|
|
|
|
|
Supplemental Disclosures:
|
|
|
|
|
|
|
Interest paid
|
|
790
|
|
|
-
|
|
Income taxes paid
|
|
-
|
|
|
-
|
|
WOLVERINE TECHNOLOGIES CORP.
|
Notes to the Financial Statements
|
(Expressed in U.S. dollars)
|
(unaudited)
|
1. Organization and basis of presentation
Wolverine Technologies Corp. (the "Company") was incorporated in the State of Nevada on February 23, 2006. The Company's prior principal business was the acquisition and exploration of mineral resources. The Company had not determined that its properties contain mineral reserves that were economically recoverable, financing had not yet become available, and commodity prices had not fully recovered. Therefore, management decided to change the focus of the Company to include cyber security. Effective August 12, 2015, the Company changed its name from Wolverine Exploration Inc. to Wolverine Technologies Corp.
Basis of Presentation
These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in U.S. dollars. The Company's fiscal year-end is May 31. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") have been condensed or omitted.
The accompanying financial statements of the Company should be read in conjunction with the financial statements and accompanying notes filed with the U.S. Securities and Exchange Commission in the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2019. In the opinion of management, the accompanying financial statements reflect all adjustments of a recurring nature considered necessary to present fairly the Company's financial position and the result of its operations and its cash flows for the periods shown.
The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. The results of operations and cash flows for the periods shown are not necessarily indicative of the results to be expected for the full year.
Going Concern
These 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 Company has never generated revenues and is unlikely to generate earnings in the immediate or foreseeable future. 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. The Company plans to raise financing of debt or equity. There can be no assurance that additional financing will be available when needed or, if available, that it can be obtained on commercially reasonable terms. At February 29, 2020, the Company has a working capital deficiency of $200,926 and has accumulated losses of $6,247,317 since inception. 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.
2. Recent Accounting Pronouncements
In June 2018, the FASB issued ASU No. 2018-07, "Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting" which addresses accounting for issuance of all share-based payments on the same accounting model. Previously, accounting for share-based payments to employees was covered by ASC Topic 718 while accounting for such payments to non-employees was covered by ASC Subtopic 505-50. As it considered recently issued updates to ASC 718, the FASB, as part of its simplification initiatives, decided to replace ASC Subtopic 505-50 with Topic 718 as the guidance for non-employee share-based awards. Under this new guidance, both sets of awards, for employees and non-employees, will essentially follow the same model, with small variations related to determining the term assumption when valuing a non-employee award as well as a different expense attribution model for non-employee awards as opposed to employee awards. The ASU is effective for public business entities beginning in 2019 calendar year. The Company adopted the new guidance on June 1, 2019. The adoption of ASU 2016-02 did not have a material impact on the Company's financial statements as the Company did not have any share-based compensation.
In February 2016, FASB issued ASU 2016-02, Leases (Topic 842). In addition, in July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases and ASU 2018-11, Leases (Topic 842), Targeted Improvements, which provide an additional (and optional) transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings. This ASU requires lessees to recognize a right of use asset and lease liability on the balance sheet for all leases, with the exception of short-term leases. The new accounting model for lessors remains largely unchanged, although some changes have been made to align it with the new lessee model and the new revenue recognition guidance. This update also requires companies to include additional disclosures regarding their lessee and lessor agreements. The adoption of this standard did not have a material impact on the Company's financial statements as the Company has not entered into any long-term leases.
WOLVERINE TECHNOLOGIES CORP.
|
Notes to the Financial Statements
|
(Expressed in U.S. dollars)
|
(unaudited)
|
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.
3. Related Party Transactions
(a) During the nine months ended February 29, 2020, the Company incurred consulting fees of $22,623 (2019 - $22,928) to a company controlled by the President of the Company.
(b) During the nine months ended February 29, 2020, the Company incurred consulting fees of $11,225 (2019 - $14,518) to a Director of the Company.
(c) As at February 29, 2020, the Company owes $11,945 (May 31, 2019 - $38,918) to a company controlled by the President of the Company, which is non-interest bearing, unsecured and due on demand.
(d) As at February 29, 2020, the Company owes $18,709 (May 31, 2019 - $7,839) to a Director of the Company, which is non-interest bearing, unsecured and due on demand.
(e) On February 13, 2020, the Company issued 20,000,000 shares of common stock with a fair value of $60,000 to the President of the Company to settle accounts payable of $45,251 (Cdn$60,000) owed to the President of the Company. This resulted in a loss on settlement of $14,749.
4. Common Stock
On January 14, 2020, the Company amended the Company's Articles of Incorporation to increase the authorized number of shares of the Company's common stock from 500,000,000 shares of common stock to 2,000,000,000 shares of common stock.
Stock transactions during the nine months ended February 29, 2020:
a) On August 23, 2019, the Company issued 16,200,000 shares of common stock pursuant to a private placement for cash proceeds of $60,862 (Cdn$81,000) received during the year ended May 31, 2019.
b) On August 23, 2019, the Company issued 5,000,000 shares of common stock pursuant to a private placement for cash proceeds of $12,349 (Cdn$16,500).
c) On August 23, 2019, the Company issued 1,500,000 shares of common stock with a fair value of $3,000 to settle accounts payable of $4,887 (Cdn$6,500), resulting in a gain on settlement of $1,887.
d) On February 3, 2020, the Company issued 8,100,000 shares of common stock with a fair value of $24,300 to settle accounts payable of $18,225, resulting in a loss of $6,075.
e) On February 13, 2020, the Company issued 33,666,666 shares of common stock with a fair value of $101,000 to settle accounts payable of $76,173, resulting in a loss on settlement of $24,827.
f) On February 13, 2020, the Company issued 20,000,000 shares of common stock with a fair value of $60,000 to settle related party accounts payable of $45,251, resulting in a loss on settlement of $14,749.
g) During the nine months ended February 29, 2020, the Company received cash proceeds of $89,750 for the issuance of 39,888,889 common shares. At February 29, 2020, the Company had also incurred share issuance costs of $20,488 which were offset against the proceeds received. As of the date of these financial statements the shares had yet to be issued.
Stock transactions during the nine months ended February 28, 2019:
a) On October 15, 2018, the Company issued 6,850,000 shares of common stock with a fair value of $27,400 to settle accounts payable of $26,414, resulting in a loss of $986.
b) On October 15, 2018, the Company issued 14,600,000 shares of common stock with a fair value of $58,400 to settle related party accounts payable of $56,300, resulting in a loss on settlement of $2,100.
c) On October 15, 2018, the Company issued 23,800,000 shares of common stock pursuant to a private placement at Cdn$0.005 per share for proceeds pf $92,325 (Cdn$119,000). Proceeds of $66,328 (Cdn$85,000) were received during the year ended May 31, 2018.
WOLVERINE TECHNOLOGIES CORP.
|
Notes to the Financial Statements
|
(Expressed in U.S. dollars)
|
(unaudited)
|
d) During the nine months ended February 28, 2019, the Company received cash proceeds of $46,032 (Cdn$61,000) relating to share subscriptions. The shares were unissued at February 28, 2019 and the amounts received for these shares have been reflected in stock subscriptions received in the balance sheet.
At February 29, 2020 and February 28, 2019, the Company had no dilutive shares, or common stock equivalents.
5. Stock-based Compensation
On May 28, 2010, the Board of Directors of the Company adopted the 2010 Stock Plan (the "Plan"). The maximum number of shares of the Company's common stock available for issuance under the Plan is 10,294,500 shares. An aggregate of 5,147,250 shares may be issued under stock options and an aggregate of 5,147,250 shares may be issued in the form of restricted shares.
At February 29, 2020 and February 28, 2019, the Company had no outstanding or exercisable stock options.
6. Commitments
(a) On January 31, 2007, the Company entered into a consulting agreement with a company whereby it has agreed to pay $7,530 (Cdn$10,000) per month. The Company is obligated to issue a bonus of 5% of the Company's issued and outstanding common shares as of the date of the payment of the bonus upon and only in the event of the discovery of a major commercially viable mineral resource deposit. As at February 29, 2020, the Company has not issued a bonus. During the nine months ended February 29, 2020, the Company recorded consulting fees of $67,502 (Cdn$90,000). During the nine months ended February 28, 2019, the Company recorded consulting fees of $68,785 (Cdn$90,000).
(b) On April 19, 2016, the Company signed a Share Purchase Agreement with a Director of the Company, whereby the Company will issue, in a private placement, 400,000,000 shares of common stock of the Company in consideration for one-third of the net proceeds that the Director will receive from the sale of the Director's 15% interest in Decision-Zone Inc. The Agreement is subject to the Company increasing its authorized capital of common stock to allow for the issuance of the shares to the Director. As of the date of this filing, the agreement has not yet closed.
7. Subsequent Events
In accordance with ASC 855-10 Company management reviewed all material events through the date of this report. The item disclosed below represents the only material subsequent event to report.
a) On March 13, 2020, the Company issued 15,000,000 shares of common stock to settle accounts payable of $32,257 (Cdn$45,000).
b) On March 13, 2020, the Company issued 53,888,889 shares of common stock pursuant to a private placement for cash proceeds of $121,250, of which $89,750 had been received prior to February 29, 2020. The Company had also incurred share issuance costs of $20,488 prior to February 29, 2020.
c) On May 29, 2020, the Company entered into a debt settlement agreement to settle $1,085 (Cdn$1,500) in exchange for the issuance 500,000 shares of common stock. As of the date of this filing, these shares have not been issued.
d) Subsequent to February 29, 2020, the Company received subscriptions of $9,715 (Cdn$13,500) for the issuance of 4,500,000 common shares.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our unaudited financial statements are stated in United States Dollars (US$) 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.
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. 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 $200,926 as of February 29, 2020, 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, 2019. 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 February 29, 2020 we had cash in the amount of $Nil and a working capital deficiency in the amount of $200,926. As of February 29, 2020, 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 metres all inclusive
|
$42,000
|
Subtotal
|
$88,500
|
Contingency - 15%
|
$11,500
|
Phase 1 Total
|
$100,000
|
As at February 29, 2020, we had a cash balance of $0. 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 February 28, 2021.
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, which the Company leases 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 February 29, 2020 and February 28, 2019
The following summary of our results of operations should be read in conjunction with our financial statements for the quarter ended February 29, 2020 which are included herein.
Three month summary ending February 29, 2020 and February 28, 2019
|
|
Three Months Ended
|
|
|
|
|
|
|
|
February 29, 2020
|
|
|
February 28, 2019
|
|
Revenue
|
$
|
Nil
|
|
$
|
Nil
|
|
Operating Expenses
|
$
|
(64,935
|
)
|
$
|
(46,061
|
)
|
Other income (expense)
|
$
|
(45,483
|
)
|
$
|
(665
|
)
|
Net Loss
|
$
|
(110,418
|
)
|
$
|
(46,726
|
)
|
Expenses
Our operating expenses for the three month periods ended February 29, 2020 and February 28, 2019 are outlined in the table below:
|
|
Three Months Ended
|
|
|
|
|
|
|
|
February 29, 2020
|
|
|
February 28, 2019
|
|
General and administrative
|
$
|
(64,935
|
)
|
$
|
(46,061
|
)
|
Foreign exchange gain (loss)
|
$
|
168
|
|
$
|
(665
|
)
|
Loss on settlement of debt
|
$
|
(45,651
|
)
|
$
|
-
|
|
General and administrative expenses increased by $18,874 from $46,061 during the three months ended February 28, 2019 to $64,935 during the three months ended February 29, 2020. This increase was primarily a result of a $11,496 increase in consulting expenses and a $3,827 increase in professional fees during the three months ended February 29, 2020.
Nine Months Ended February 29, 2020 and February 28, 2019
The following summary of our results of operations should be read in conjunction with our financial statements for the quarter ended February 29, 2020 which are included herein.
Nine month summary ending February 29, 2020 and February 28, 2019
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
February 29, 2020
|
|
|
February 28, 2019
|
|
Operating Expenses
|
$
|
(191,163
|
)
|
$
|
(183,432
|
)
|
Other income (expense)
|
$
|
(44,608
|
)
|
$
|
(2,063
|
)
|
Net Loss
|
$
|
(235,771
|
)
|
$
|
(185,495
|
)
|
Expenses
Our operating expenses for the nine month periods ended February 29, 2020 and February 28, 2019 are outlined in the table below:
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
February 29, 2020
|
|
|
February 28, 2019
|
|
General and administrative
|
$
|
(191,163
|
)
|
$
|
(183,432
|
)
|
Gain on forgiveness of debt
|
$
|
2,747
|
|
$
|
-
|
|
Foreign exchange gain (loss)
|
$
|
(3,591
|
)
|
$
|
1,023
|
|
Loss on settlement of debt
|
$
|
(43,764
|
)
|
$
|
(3,086
|
)
|
General and administrative expenses increased by $7,731 from $183,432 during the nine months ended February 28, 2019 to $191,163 during the nine months ended February 29, 2020. This increase was primarily a result of a $12,722 increase in transfer agent and filing fees and a $13,860 increase in professional fees offset by a $18,119 decrease 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
February 29,
2020
|
|
|
As At
May 31,
2019
|
|
Current assets
|
$
|
2,238
|
|
$
|
3,592
|
|
Current liabilities
|
|
(203,164
|
)
|
|
(238,658
|
)
|
Working capital (deficit)
|
$
|
(220,926
|
)
|
$
|
(235,066
|
)
|
Cash Flows
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
February 29,
2020
|
|
|
February 28,
2019
|
|
Net Cash Used in Operating Activities
|
$
|
(81,655
|
)
|
$
|
(93,143
|
)
|
Net Cash Provided by Financing Activities
|
|
81,655
|
|
|
74,164
|
|
Net change in cash during period
|
$
|
-
|
|
$
|
(18,979
|
)
|
Operating Activities
Net cash used in operating activities during the nine months ended February 29, 2020, was $81,655 compared to $93,143 during the nine months ended February 28, 2019. The decrease was primarily a result of a larger increase in accounts payable during the nine months ended February 29, 2020. This was offset by an increase in operating expenses and a smaller increase in accounts payable to related party.
Financing Activities
During the nine months ended February 29, 2020, we received $12,349 through the issuance of shares and $89,750 gross proceeds from shares subscribed in private placements, which have not been issued as of the date of this filing. The Company also incurred $20,488 of share issuance costs. In the comparable period, we received $2,135 in shareholder advances, $25,997 through the issuance of shares and $46,032 from shares subscribed in private placements.
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.