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Hunter Technology Corp. — Management Reports 2023
Apr 28, 2023
43476_rns_2023-04-28_9f5b57f6-8dea-4840-b76b-accf2b4fcb1d.pdf
Management Reports
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Hunter Technology Corp.
Management’s Discussion & Analysis
Year Ended December 31, 2022
Hunter Technology Corp. Management’s Discussion & Analysis for the Year ended December 31, 2022 (All Amounts Expressed in USD unless otherwise indicated)
DATE AND BASIS OF INFORMATION
Hunter Technology Corp. (the “Company”) is incorporated in British Columbia, Canada and historically was engaged in the business of acquiring and developing crude oil and natural gas properties. The Company’s primary operations are technology development, monetization or deployment of its existing intellectual property assets in new business ventures.
The Company’s common shares are listed on the TSX Venture Exchange (“TSX-V”) under the symbol “HOC”, quoted on the OTC Markets Group (“OTCQB”) under the symbol “HOILF”, and quoted on the Frankfurt Stock Exchange under the symbol “RWPA”. The Company’s CUSIP number is 445737307 and its new ISIN is CA445737070.
The Company’s registered address is Suite 1800 – 510 West Georgia St., Vancouver, BC, V6B 0M3, Canada.
Additional information relating to the Company can be found on the SEDAR website at www.sedar.com.
On May 4th, 2022 the Company completed a consolidation of its common shares on the basis of one (1) postconsolidation common share for every ten (10) pre-consolidation shares. On, November 8th, 2022 the Company completed a consolidation of its common shares on the basis of one (1) post-consolidation common share for every two (2) pre-consolidation shares. All common shares and per share amounts have been restated to give retroactive effect to both share consolidations.
During the year ended December 2022, the Company was focused on identifying new business targets to leverage its existing IP and position the Company for specific market opportunities in undeserved markets. Following the strategic review, as announced in November 2021, and the closure its Hong Kong development center, on December 7, 2022 the Company sold its 100% interest in FinFabrik Limited (“FinFabrik”), its wholly owned subsidiary. Through a combination of the sale of Finfabrik and discount settlement of certain liabilities during the year, the Company was able to improve the liquidity of the Company with gains of approximately $335,000.
With recent political turmoil in Europe and a significant downturn in the technology sector, the Company has continued its efforts to reduce operational and development expenditures where possible while continuing to explore market opportunities. The Company had previously taken full impairment charges against its intangible assets in 2021, the Company continues to evaluate market opportunities while managing its overhead and minimizing development expenditures.
The business of the Company involves a high degree of risk and there is no assurance that the Company will generate sufficient revenues to cover operating costs. Additional funds may be required to enable the Company to pursue such an initiative and the Company may be unable to obtain such financing on terms which are satisfactory to it. Furthermore, there is no assurance that the business will be profitable.
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Hunter Technology Corp. Management’s Discussion & Analysis for the Year ended December 31, 2022 (All Amounts Expressed in USD unless otherwise indicated)
Liquidity and Going Concern
The consolidated financial statements were prepared on the basis that the Company will continue to operate as a going concern, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the twelve-month period following the date of the consolidated financial statements. The Company has an accumulated deficit of $132,797,415 and negative working capital of $746,396 as at December 31, 2022.
The financial statements were presented on a going concern basis of accounting. The consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and balance sheet classifications that would be necessary were the going concern assumption deemed to be inappropriate. These adjustments could be material.
Basis of Presentation
The following Management’s Discussion and Analysis (“MD&A”) is dated April 28, 2023, and should be read in conjunction with the Company’s consolidated financial statements and related notes for the year ended December 31, 2022, as well as the consolidated financial statements and related notes, and MD&A for the year ended December 31, 2021. The referenced consolidated financial statements have been prepared by management and approved by the Company’s Board of Directors. Unless otherwise noted, all financial information presented herein has been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). All financial information is in US dollars, unless otherwise indicated.
Non-IFRS Financial Measures
Certain financial measures in this MD&A, such as EBITDA, are not prescribed, do not have a standardized meaning defined by IFRS and, therefore, may not be comparable with the calculation of similar measures by other companies.
EBITDA is a non-IFRS measure that refers to income (loss) before interest, income taxes, depletion, depreciation, amortization, accretion and other non-cash items that impact the income statement such as stock-based compensation and gains or losses from asset sales, foreign currency translations and impairments.
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Hunter Technology Corp. Management’s Discussion & Analysis for the Year ended December 31, 2022 (All Amounts Expressed in USD unless otherwise indicated)
BUSINESS OVERVIEW
Overview of Year Ended December 31, 2022
The Company historically had one reportable business segment, the monetization or development of its existing intellectual properties through newly identified business opportunities. The Company’s operations consist primarily of activities and expenses related to evaluating future potential business opportunities.
Subsidiaries and Operations. The operations of the Company include Hunter Technology Corp. (the Parent Company) and its wholly-owned subsidiaries. The following table lists the Company’s principal operating subsidiaries, their jurisdiction of incorporation, and its percentage ownership of their voting securities as of the date of this report:
| Subsidiary Name | Jurisdiction | Ownership 2022 |
Ownership 2021 |
|---|---|---|---|
| FinFabrik Limited(1) | Hong Kong | 0% | 100% |
| Hunter Technology Holdings Ltd. | England & Wales, UK | 100% | 100% |
| Digiledger Holdings AG | Switzerland, Baar | 100% | 100% |
| Hunter Oil Management Corp. | Florida, USA | 100% | 100% |
| HunterOil ProductionCorp. | Florida, USA | 100% | 100% |
(1) Subsidiary sold Dec 7, 2022
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Hunter Technology Corp. Management’s Discussion & Analysis for the Year ended December 31, 2022 (All Amounts Expressed in USD unless otherwise indicated)
OVERALL PERFORMANCE
| VERALL PERFORMANCE | ||
|---|---|---|
| Three Months Ended December 31, 2022 2021 Expenses General and administrative $ 149,495 $ 13,978 $ Management fees and consulting - 528 Salaries and wages - 39,812 Platform development - 107,056 Amortization of intangibles - - Foreign currency loss (gain) - 1,895 Reclamation expenses - - Interest expense 15,934 Stock based compensation - 66,354 Total expenses 165,429 229,623 Impairment of intangible assets and goodwill - - Gain on settlement of liabilities (62,878) - Gain on settlement of director advances - - Gain on sale of subsidiary (117,694) - Government grant - - Net income (loss) before taxes 15,143 (229,623) Net Income (loss) and comprehensive income (loss) for theperiod $ 15,143 $ (229,623) $ |
Year Ended | |
| December 31, | ||
| 2022 337,559 $ 36,408 - - - - - 31,889 - 405,656 - (171,972) (49,122) (117,694) - (66,868) (66,838) $ |
2021 | |
| 421,478 138,484 367,011 829,218 859,125 (7,161) 77,082 - 464,684 |
||
| 3,164,243 | ||
| 9,139,159 - - - (77,082) |
||
| (12,226,320) (11,474,862) |
||
| Income (Loss) per share continuing operations – basic and diluted $0.01 $ (1.01) |
$ (0.02) | $ (5.06) |
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Hunter Technology Corp. Management’s Discussion & Analysis for the Year ended December 31, 2022 (All Amounts Expressed in USD unless otherwise indicated)
BUSINESS HIGHLIGHTS
Development of the Business
During the year Company continued to explore opportunities to leverage its existing IP and position the Company for specific market or business opportunities in underserved markets. Following the strategic review, as announced in November 2021, the Company closed its Hong Kong development center to alleviate the operational challenges presented by various Covid-19 measures in Hong Kong, and to focus technical resources closer to the markets the Company is targeting. On December 7[th] , 2022, the Company concluded the sale of its Hong Kong subsidiary FinFabrik.
Financing
There were no private placements concluded during the year ended 2022.
During the year ended December 31, 2022 the Company received loans from a company controlled by a director of the Company. As at December 31, 2022 a total of $616,889 was due under terms of the loan. This included $585,000 of principal and $31,889 of accrued interest incurred during the year ended December 31, 2022. The loan is payable on demand and bears interest at a rate of 12% per year.
FinFabrik Disposal
On December 7, 2022, the Company sold 100% interest in FinFabrik, its wholly-owned subsidiary and settled various accrued liabilities of the subsidiary. Prior to the disposition, the Company entered into settlement and release agreements with various venders whereby the Company settled liabilities of $300,062 with payments of $93,073. During the year ended December 31, 2022, the Company recognized a gain of $171,972 on settlement of the liabilities.
During the year ended December 31, 2022, the Company recognized a gain on disposition of $117,674 as outlined below:
| Net liabilities disposed of: | ||
|---|---|---|
| Cash | $ | 21,830 |
| Accrued liabilities | (150,023) | |
| $ | (128,193) | |
| Consideration received | $ | - |
| Intercompany advances previously eliminated on consolidation | 5,927 | |
| Foreign currency translation | 4,572 | |
| Net gain on disposal of subsidiary | $ | 117,694 |
| The net cash outflow from disposal of the subsidiary is analyzed as follows: | ||
| Cash disposed of: | $ | 21,830 |
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Hunter Technology Corp. Management’s Discussion & Analysis for the Year ended December 31, 2022 (All Amounts Expressed in USD unless otherwise indicated)
DISCUSSION OF OPERATIONS
General & Administrative
General and administrative expenses for the year ended December 31, 2022 and 2021, were as follows:
| Year Ended | December 31, | |
|---|---|---|
| 2022 | 2021 | |
| Accounting and audit | $ 46,764 | $ 88,706 |
| Advertising and communications | 7,096 | 151,383 |
| Consulting | 112,000 | - |
| Legal | 73,646 | 94,517 |
| Office and general | 35,147 | 31,328 |
| Regulatory | 62,706 | 69,415 |
| Travel and accommodation | - | 10,000 |
| Other Income | - | (23,871) |
| Total | $ 337,359 | $ 415,478 |
General and administrative expenses for the year ended December 31, 2022 decreased $78,000 compared to the same period in 2021. The primary decrease was a result of reduced overhead spending related to the business as part of a reduction in spending by the Company. The decrease was comprised of reduced advertising spend while consultant costs increased to offset the public reporting costs normally associated with full time salary staff.
Management Fee
Management fees decreased by $102,076 for the year-ended December 31, 2022 as compared to the same period in 2021. The decrease was a result of reduced management fees to support the Company’s liquidity while it identifies suitable targets and or market opportunities.
Salaries and Wages
The year ended December 31, 2022 included salaries and wages of $Nil as compared to $367,011 for 2021. The decrease is a result of the closure of the Hong Kong offices in 2021 resulting in all salary based compensation being eliminated.
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Hunter Technology Corp. Management’s Discussion & Analysis for the Year ended December 31, 2022 (All Amounts Expressed in USD unless otherwise indicated)
Platform Development
During the year ended December 31, 2022 the Company reduced all further platform development costs to explore opportunities with the existing IP. As a result no platform development costs were incurred for 2022 as compared to $829,218 for 2021. The platform development expenses incurred were as follows:
| Year Ended December | 31, | ||
|---|---|---|---|
| 2022 |
2021 | ||
| Consultants | $ - | $ | 61,697 |
| Depreciation | - | 2,491 | |
| Office & general | - | 20,188 | |
| Professional fees | - | 27,868 | |
| Rent | - | 179,245 | |
| Software and IT services | - | 13,429 | |
| Wages and salaries | - | 516,213 | |
| Loss on asset disposal | - | 8,087 | |
| Total | $- | $ | 829,218 |
Stock-Based Compensation
Stock-based compensation expense is a non-cash expense that is based on the fair values of stock options granted and amortized over the vesting periods of the options. The Company did not recognize any stock-based compensation for the year-ended December 31, 2022 compared to $464,684 in stock-based compensation expense related to the scheduled vesting of these options during the year ended December 31, 2021. The compensation expense was based on the estimated fair value of the options on the grant date in accordance with the fair value method of accounting for stock-based compensation.
The Company did not grant any stock options during the year-ended December 31, 2022 and has Nil outstanding stock options.
Foreign Exchange Gain (Loss)
The Company’s functional currency and presentational currency, as determined under International Accounting Standard (“IAS”) 21, The Effects of Changes in Foreign Exchange Rates , is the United States dollar. During the yearended December 31, 2022. The Company’s operating expenses are incurred in United States dollar, Hong Kong dollar, and Canadian dollar, and all historical equity issuances of the Canadian parent which are denominated in Canadian dollars. There will continue to be an impact from currency translation and exchange gains and losses. The average Canadian/US dollar exchange rate was $0.77 and $0.80 for the year-ended ended December 31, 2022 and 2021. The average Hong Kong/US dollar exchange rate was $0.13 for the year ended December 31, 2022 and 2021.
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Hunter Technology Corp. Management’s Discussion & Analysis for the Year ended December 31, 2022 (All Amounts Expressed in USD unless otherwise indicated)
Earnings before Interest, Taxes, Depreciation, and Amortization (EBITDA) Reconciliation
With the recent change of business model of the Company and the current stage of development of its technology platforms, management does not believe that EBITDA is currently a useful measure of the business development operations. Once the Company has achieved revenue streams from its existing platforms, the Company intends to revisit the EBITDA and profitability metrics.
LIQUIDITY AND CAPITAL RESOURCES
The Company had unrestricted cash balances of $12,639 and $545, as of December 31, 2022 and December 31, 2021 respectively. The Company has negative working capital of $746,396 available as of December 31, 2022.
The Company anticipates that additional technology and/or business development may require additional funding. The Company will consider all available sources of financing to develop such projects, including equity, bank and mezzanine debt, asset sales and joint venture arrangements.
While the consolidated financial statements were prepared on the basis that the Company will continue to operate as a going concern, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the twelve-month period following the date of these consolidated financial statements, certain conditions and events cast significant doubt on the validity of this assumption. For the year ended December 31, 2022, the Company had negative cash flows from operations of $501,076 and, at December 31, 2022, an accumulated deficit of $132,797,415. The Company also expects to incur further losses during the future development of its business. The Company’s ability to continue as a going concern is dependent upon its ability to successfully launch its technology platforms, achieve profitable operations, and/or raise additional capital from equity or debt financing options. Although the Company has been successful in obtaining financing, there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be on terms acceptable to the Company.
QUARTERLY RESULTS OF OPERATIONS AND SELECT FINANCIAL DATA
Summary of Quarterly Information:
Quarterly Revenue, Loss, and Earing Per Share:
(In 000’s except for per share amounts)
| Revenues Net comprehensive income (loss) Per share- basic Per share–diluted |
For the three months ended Dec 31, 2022 Sept 30, 2022 June 30, 2022 Mar 31, 2022 $ - $ - $ - $ - $ 15 $ (47) $ (127) $ 89 $ 0.01 $ (0.02) $ (0.06) $ 0.04 $ 0.01 $ (0.02) $ (0.06) $ 0.04 For the three months ended |
||
|---|---|---|---|
| Revenues Net comprehensive loss Per share- basic Per share-diluted |
|||
| Dec 31, 2021 Sept 30, 2021 June 30, 2021 Mar 31, 2021 |
|||
| $ - $ - $ - $ - $ (9,037) $ (705) $ (955) $ (1,054) $ (3.98) $ (0.32) $ (0.42) $ (0.46) $ (3.98) $ (0.32) $ (0.42) $ (0.46) |
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Hunter Technology Corp. Management’s Discussion & Analysis for the Year ended December 31, 2022 (All Amounts Expressed in USD unless otherwise indicated)
DISCLOSURE OF CONTROLS, PROCEDURES AND INTERNAL CONTROLS OVER FINANCIAL REPORTING
As a TSX Venture Exchange issuer, the Company’s officers are not required to certify the design and evaluation of operating effectiveness of the Company’s disclosure controls and procedures (“DC&P”) or its internal controls over financial reporting (“ICFR”). The Company maintains DC&P designed controls to ensure that information required to be disclosed in reports filed or submitted is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In addition, the Chief Executive Officer and the Chief Financial Officer have designed controls over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles. Due to its size, the small number of employees, the scope of its current operations and its limited liquidity and capital resources, there are inherent limitations on the Company’s ability to design and implement on a costeffective basis the DC&P and ICFR procedures, the effect of which may result in additional risks related to the quality, reliability, transparency and timeliness of its interim filings and other reports. There have been no changes in ICFR during the year ended December 31, 2022.
OFF-BALANCE SHEET ARRANGEMENTS
The Company does not have any special purpose entities nor is it party to any arrangements that would be excluded from the consolidated balance sheet.
RELATED PARTY TRANSACTIONS
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company. The following table summarizes compensation paid or payable to officers and directors of the Company, including the Board of Directors, the Chief Executive Officer, and the Chief Financial Officer:
| Year Ended | December 31, | |
|---|---|---|
| 2022 | 2021 | |
| Salaries, bonus, benefits and fees | $ - |
$ 539,011 |
| Stock-based compensation | - | 436,804 |
| Management fees | 36,408 | 104,000 |
| Total | $ 36,408 | $ 1,079,815 |
A total of $14,734 due to related parties is included in accounts payable and accrued liabilities as at December 31, 2022 (2021 - $110,075).
During the year ended December 31, 2022 the Company received loans from a company controlled by a director of the Company. As at December 31, 2022 a total of $616,889 was due under terms of the loan. This included $585,000 of principal and $31,889 of accrued interest incurred during the year ended December 31, 2022. The loan is payable on demand and bears interest at a rate of 12% per year.
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Hunter Technology Corp. Management’s Discussion & Analysis for the Year ended December 31, 2022 (All Amounts Expressed in USD unless otherwise indicated)
During the year ended December 31, 2022 the Company settled various director advances made to the Company. Principal amounts of $99,122 outstanding at December 31, 2021 were settled during the year for $50,000. The Company recognized a gain on the settlement of $49,122. The balance of advances as at December 31, 2022 was $Nil.
CRITICAL ACCOUNTING ESTIMATES
Estimates and underlying assumptions are reviewed on an ongoing basis and involve significant estimation uncertainty which have a significant risk of causing adjustments to the carrying amounts of assets and liabilities. Revisions to accounting estimates are recognized in the period in which the estimates are reviewed and for any future periods affected. Significant judgments, estimates and assumptions made by management in the consolidated financial statements are outlined below:
Impairment of assets: The Company evaluates its assets for possible impairment at the CGU level. The determination of CGUs requires judgement in defining the smallest grouping of integrated assets that generate identifiable cash inflows that are largely independent of the cash inflows of other assets or groups of assets. The assessment of any impairment of these assets is dependent upon estimates of recoverable amounts that take into account factor such as economic and market condition and useful lives of the assets.
Business Combinations: The Company determines and allocates the purchase price of an acquired company to the tangible and intangible assets acquired and liabilities assumed as of the business combination date in accordance with IFRS 3 Business Combinations. The purchase price allocation process requires management to make significant estimates and assumptions, including fair value estimates, as of the acquisition date.
While management uses their best estimates and assumptions as a part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the business combination date, the estimates and assumptions are inherently uncertain and subject to refinement. As a result, during the purchase price allocation period, which is within one year from the acquisition date, management records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill.
Goodwill: Goodwill resulting from the acquisition of a business is carried at cost at the date of the acquisition less impairment losses, if any. For impairment testing purposes, goodwill is allocated to each of the Company’s cashgenerating units (or groups of cash-generating units) that is expected to benefit from the synergies of the combination. A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indicator that the cash-generating unit may be impaired. Management will evaluate goodwill for impairment annually as of December 31. While management uses their best estimate and assumptions to assess goodwill for impairment, there are inherent uncertainties in projecting future cash flows.
Accrued Liabilities: The Company estimates and recognizes liabilities for future retirement obligations and restoration of oil and gas development wells. These provisions are based on estimated costs, which take into account the anticipated method and extent of restoration. Actual costs are uncertain, and estimates can vary as a result of changes to relevant laws and regulations, the emergence of new restoration techniques, operating experience and prices. The expected timing of future retirement may change due to these factors.
Deferred Income Tax Assets: Assessing the recoverability of deferred income tax assets requires significant estimates related to expectations of future taxable income based on forecasted cash flows from operations as well as
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Hunter Technology Corp. Management’s Discussion & Analysis for the Year ended December 31, 2022 (All Amounts Expressed in USD unless otherwise indicated)
interpretations and judgements on uncertain tax positions of applicable tax laws. Such judgements include determining the likelihood of tax positions being successfully challenged by tax authorities based on information from relevant tax interpretations and tax laws. To the extent such interpretations are challenged by the tax authorities or future cash flows and taxable income differ significantly from estimates, the ability to realize deferred tax assets recorded at the balance sheet date may be compromised. Judgements are made by management to determine the likelihood of whether deferred income tax assets at the end of the reporting period will be realized from future taxable earnings.
NEW ACCOUNTING STANDARDS
The following new standards and amendments to standards and interpretations are effective for annual periods beginning after January 1, 2022 and have been applied in preparing these consolidated financial statements.
- Amendment to IAS 1 – Classification of Liabilities as Current or Non-current
In January 2020, the IASB amended IAS 1, Presentation of Financial Statements, to clarify the criterion for classifying a liability as non-current relating to the right to defer settlement of the liability for at least twelve months after the reporting period. The amendments are effective for annual reporting periods beginning on or after January 1, 2022, with earlier application permitted. The adoption of these amendments did not have an impact on the Company’s consolidated financial statements.
FUTURE ACCOUNTING PRONOUNCEMENTS
There are no other IFRS or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Company.
POTENTIAL RISKS AND UNCERTAINTIES
The technology development industry is highly competitive and, in addition, exposes the Company to a number of risks. Technological development involves a high degree of risk, which even a combination of experience, knowledge and careful evaluation may not be able to overcome. It is also highly capital intensive and the ability to complete a development project may be dependent on the Company's ability to raise additional capital. In certain cases, this may be achieved only through joint ventures or other relationships, which would reduce the Company's ownership interest in the project. There is no assurance that development operations will prove successful.
Risks Associated with Financial Assets and Liabilities
The Company is exposed to financial risks arising from its financial assets and liabilities. Financial risks include market risks (such as commodity prices, foreign exchange and interest rates), credit risk and liquidity risk. The future cash flows of financial assets or liabilities may fluctuate due to movements in market prices and the exposure to credit and liquidity risks. Disclosures relating to exposure risk are provided in detail as follows:
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Hunter Technology Corp. Management’s Discussion & Analysis for the Year ended December 31, 2022 (All Amounts Expressed in USD unless otherwise indicated)
Credit Risk
Credit risk is the risk of an unexpected loss if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Company's financial instruments exposed to concentrations of credit risk are primarily cash and cash equivalents, including restricted cash, and accounts receivable. The Company has little exposure to credit risk as all of its deposits and related receivable are with major financial institutions or government related receivables.
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company's approach to managing liquidity risk is to ensure, as far as possible, that it will always have sufficient liquidity to meet liabilities when due. At December 31, 2022, the Company had cash of $12,639, excluding restricted cash of $27,591. The Company is dependent on raising funds by borrowings, equity issues, or asset sales to finance its ongoing operations, capital expenditures and acquisitions. The contractual maturity of the majority of accounts payable is within three months or less. The Company has historically financed its expenditures and working capital requirements through the sale of common stock or, on occasion, through the issuance of short-term debt.
Foreign Exchange Risk
Substantially all of the Company’s assets and expenditures are either denominated in or made with US dollars. As a result, the Company has very limited exposure to foreign exchange risk in relation to existing commitments or assets denominated in a foreign currency. The Company has chosen not to enter into any foreign exchange contracts since its Canadian dollar working capital balances are not significant to the consolidated entity.
Additional Financing
To the extent that external sources of capital, including the issuance of additional common shares, become limited or unavailable, the Company’s ability to make necessary capital investments to maintain or expand its software development activities will be impaired.
Commodity Price Risk
The Company is no longer exposed to commodity price risk following the sale of its discontinued operations.
Dependence on Key Personnel
The Company has a small management and development team and the loss of a key individual or the inability to attract suitably qualified personnel in the future could materially and adversely affect the Company’s business.
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Hunter Technology Corp. Management’s Discussion & Analysis for the Year ended December 31, 2022 (All Amounts Expressed in USD unless otherwise indicated)
Foreign Investments
The Company expects that its platform development activities will take place principally outside of Canada for the foreseeable future. As such, the Company’s operations are subject to a number of risks over which it has no control. These risks may include risks related to economic, social or political instability or change, terrorism, hyperinflation, currency non-convertibility or instability, changes of laws affecting foreign ownership, government participation, taxation, working conditions, rates of exchange, exchange control, exploration licensing, petroleum and export licensing and export duties as well as government control over domestic oil and gas pricing. The Company endeavors to operate in such a manner in order to minimize and mitigate its exposure to these risks. However, there can be no assurance that the Company will be successful in protecting itself from the impact of all of these risks.
COVID-19
In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. COVID-19 had a negative impact on global trade due to shutdowns and travel restrictions. The risks associated with further occurrences could impact the Company’s operations in the future.
Market Risks
The Company is subject to normal market risks including fluctuations in foreign exchange rates and interest rates. While the Company manages its operations in order to minimize exposure to these risks, the Company has not entered into any derivatives or contracts to hedge or otherwise mitigate this exposure.
OTHER MD&A INFORMATION NOT DISCLOSED ELSEWHERE
Disclosure of Share Capital
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Hunter Technology Corp. Management’s Discussion & Analysis for the Year ended December 31, 2022 (All Amounts Expressed in USD unless otherwise indicated)
Authorized capital:
25 million preference shares of no par value; Unlimited common shares of no par value.
Issued and outstanding at April 28[th] , 2023:
2,266,559 common shares.
A summary of the stock option activity during the year ended December 31, 2022 and 2021 is as follows:
| Number of | Weighted-Average | |||
|---|---|---|---|---|
| Options | Exercise Price | |||
| Outstanding, December | 31, | 2020 | 144,000 | |
| Forfeited | (29,250) | $0.78 (CAD) | ||
| Forfeited | (41,500) | $0.90 (USD) | ||
| Outstanding, December | 31, | 2021 | 73,250 | |
| Forfeited | (48,250) | $0.78 (CAD) | ||
| Forfeited | (25,000) | $0.90(USD) | ||
| Outstanding, December | 31, | 2022 | - |
As at April 28, 2023 the Company has Nil stock options outstanding.
Forward-Looking Statements
Certain statements contained in this Management’s Discussion and Analysis and in certain documents incorporated by reference into this Management’s Discussion and Analysis contain estimates and assumptions which management are required to make regarding future events and may constitute forward-looking statements within the meaning of applicable securities laws. Management’s assessment of future operations, drilling and development plans and timing thereof, other capital expenditures and timing thereof, methods of financing capital expenditures and the ability to fund financial liabilities, expected commodity prices and the impact on the Company and the impact of the adoption of future changes in accounting standards may constitute forward-looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, the flexibility of capital funding plans and the source of funding therefore; production, marketing and transportation, loss of markets, volatility of commodity prices, the effect of the Company’s risk management program, including the impact of derivative financial instruments; currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions, the inability to fully realize the benefits of the acquisitions, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources.
All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”,
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Hunter Technology Corp. Management’s Discussion & Analysis for the Year ended December 31, 2022 (All Amounts Expressed in USD unless otherwise indicated)
“estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar other expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forwardlooking statements. The Company believes that the expectations reflected in these forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in, or incorporated by reference into, this MD&A should not be unduly relied upon. These statements speak only as of the date of this MD&A as the case may be. The Company does not intend, and does not assume an obligation, to update these forward-looking statements, except as required by securities law.
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