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Hyper Bit Technologies Ltd. — Management Reports 2025
Mar 28, 2025
47812_rns_2025-03-28_66ffb94f-ef0f-4855-8928-a34c8a859317.pdf
Management Reports
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Form 51-102-F1
SWEET POISON SPIRITS INC.
MANAGEMENT DISCUSSION & ANALYSIS
For the period ended January 31, 2025
Directors and Officers as at March 25, 2025
Directors:
- Robert Eadie
- Gary Arca
- Gina Pala
- Brian Gusko
Officers:
- President & CEO – Robert Eadie
- CFO & Corporate Secretary – Gary Arca
Contact Name: Robert Eadie
Contact e-mail: [email protected]
Suite 750 – 580 Hornby Street, Box 113, Vancouver, British Columbia, Canada V6C 3B6
Telephone: (604) 602-4935 Fax: (604) 602-4936
Form 51-102-F1
SWEET POISON SPIRITS INC.
MANAGEMENT'S DISCUSSION & ANALYSIS
For the period ended January 31, 2025
1.1 Date of This Report
This Management’s Discussion & Analysis (“MD&A”) should be read in conjunction with the unaudited condensed financial statements of Sweet Poison Spirits Inc. (the “Company”) for the period ended January 31, 2025. All dollar amounts herein are expressed in Canadian Dollars unless stated otherwise.
Management is responsible for the preparation and integrity of the financial statements, including the maintenance of appropriate information systems, procedures and internal controls and to ensure that information used internally or disclosed externally, including financial statements and MD&A, is complete and reliable. The Company’s Board of Directors follows recommended corporate governance guidelines for public companies to ensure transparency and accountability to shareholders. The Board of Directors’ Audit Committee meets with management quarterly to review the financial statements and the MD&A and to discuss other financial, operating and internal control matters. The reader is encouraged to review the Company’s statutory filings on www.sedarplus.ca
This MD&A is prepared as of March 25, 2025.
This MD&A includes certain statements that may be deemed “forward-looking statements”. All statements in this discussion, other than statements of historical facts, that address events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, continued availability of capital and financing and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements.
1.2 Overall Performance
Description of Business
In prior years, the Company was in the business of growing, processing, packaging and selling cannabidiol and related hemp based products in Italy through its wholly owned Italian subsidiary, Hemp For Health H4H S.R.L. (“H4Hsrl”). In June, 2022 the Company completed a “Change of Business (“COB”), whereby the Company moved from growing and processing hemp into CBD products to mining for cryptocurrencies.
The Company continues to monitor the pricing of cryptocurrencies, with a view to start its mining operations should it become profitable. To date, the Company has not commenced operation of the mining rigs as they would not be profitable at the current value of related cryptocurrencies. As at January 31, 2025, the rigs remain unpacked in warehouse storage in the United States.
Suite 750 – 580 Hornby Street, Box 113, Vancouver, British Columbia, Canada V6C 3B6
Telephone: (604) 602-4935 Fax: (604) 602-4936
SWEET POISON SPIRITS INC.
Management's Discussion & Analysis
January 31, 2025
Page 3
On November 3, 2022, the Company signed a Product Distribution Agreement (the Distribution Agreement) with Sweet Poison Spirits S de RL de CV, a Mexican company headquartered in Guadalajara, Mexico, and Sweet Poison Spirits LLC, a California limited liability corporation headquartered in San Diego, California (collectively, "Sweet Poison"). The Distribution Agreement granted the Company the worldwide distribution rights to Sweet Poison's premium Tequila and Mezcal products under the "Sweet Poison" brand names.
The Company changed its name from Yellow Stem Tech Inc. to Sweet Poison Spirits Inc. thereafter and, on June 1, 2023, the Company's common shares commenced trading on the CSE under the trading symbol "SPS". On November 14, 2023, the Distribution Agreement with Sweet Poison was terminated.
Selected Annual Information
The highlights of financial data for the Company's three most recently completed year-ends, which are calculated in accordance with International Financial Reporting Standards ("IFRS"), are as follows:
| April 30, 2024 | April 30, 2023 | April 30, 2022 | |
|---|---|---|---|
| $ | $ | $ | |
| (a) Total expenses | (250,192) | (302,908) | (672,525) |
| (b) Net loss | (301,826) | (954,126) | (588,670) |
| (c) Income (loss) per share–basic and diluted | (0.04) | (0.16) | (0.20) |
| (d) Total assets | 36,008 | 245,592 | 953,966 |
| (e) Total long-term liabilities | Nil | Nil | Nil |
| (f) Cash dividends declared per share | Nil | Nil | Nil |
1.3 Discussion of Acquisitions, Operations and Financial Condition
The following should be read in conjunction with the January 31, 2025, unaudited condensed financial statements of the Company and notes attached thereto.
Recent Events
Purchase of Additional Crypto Mining Equipment
Subsequent to the period ending January 31, 2025, the Company agreed to purchase up to an additional ten (10) ultra efficient crypto mining rigs from Goodwin Ventures Corp. to be focused on Mining the ALEO crypto token with the following specifications:
Goldshell AE-BOX II ("Goldshell") is an ASIC miner designed for zkSNARK algorithm, specifically targeting ALEO (Aleo). The Goldshell AE-BOX II delivers an average hashrate of 54Mh/s while consuming 530W of power, resulting in an energy efficiency of 0.01j/kh. Goldshell is an industry-leading technology company, that was founded in 2017.
As of March 14th, 2025 Aleo has a market capitalization of USD $96.2 Million and has a 24-hour trading volume of $7.3 Million. Aleo hit an all time high market cap of approximately $9.3 Billion on September 24, 2024 with a 24-hour trading volume of $24.57 Million. Aleo trades on over 20 crypto currency exchanges according to Coinmarketcap.com
Suite 750 - 580 Hornby Street, Box 113, Vancouver, British Columbia, Canada V6C 3B6
Telephone: (604) 602-4935 Fax: (604) 602-4936
SWEET POISON SPIRITS INC.
Management's Discussion & Analysis
January 31, 2025
Page 4
The Company will take delivery of one (1) initial unit prior to completing the balance of the purchase in order to test delivery times and performance of the equipment.
The Company currently owns 150 SC200 SiaCoin mining rigs. The Company is currently working towards lower cost power solutions to make these particular rigs more economical.
As of March 14th, 2025 SiaCoin has a market capitalization of USD $173 Million and has a 24-hour trading volume of $22 Million. SiaCoin hit an all time high market cap of over $2.4 Billion on January 5th, 2018 on 24-hour trading volume of over $94 Million. SiaCoin trades on over 57 Centralized crypto exchanges according to Coinmarketcap.com
Director Appointment
The Company has appointed Mr. Brian Gusko to its Board of Directors effective immediately. Mr. Gusko holds an MBA from the University of Calgary and has attended the European Summer School of Advanced Management. With over 15 years of experience in capital markets, he has successfully helped raise more than $75 million for various enterprises. He has served on the boards of several private and public companies and has held the position of Chief Financial Officer (CFO) for multiple organizations.
Early in his career, Mr. Gusko worked internationally as a research associate with the U.S. Department of Commerce. He later held a corporate planning position with a Mitsubishi Group company in Tokyo and worked in product management at a Vodafone spinoff in the Netherlands. Mr. Gusko co-founded an international telecom infrastructure company that now holds telecom infrastructure assets across South America. Mr. Gusko also previously ran a division of Canada's Telus Communications Inc. and in 2014 Mr. Gusko sat on the Board of Directors of the world's first cryptocurrency focused company on a regulated stock exchange, and which owned under its umbrella cryptocurrency exchanges, crypto mining operations, crypto ATMs and more.
Throughout his career, Mr. Gusko has facilitated the interlisting of over ten companies on the Frankfurt Stock Exchange and has assisted numerous firms in accessing the German capital markets. In his most gopublic transaction, he guided a company to its public listing on the Canadian Securities Exchange (CSE), where it achieved a market capitalization exceeding $200 million at the time of listing. In addition to his professional accomplishments, Mr. Gusko speaks English, Japanese, and German.
Private Placement
Subsequent to the period ending January 31, 2025, the Company closed a non-brokered private placement (the "Financing"), raising $450,000 in gross proceeds through the issuance of 9,000,000 units (the "Units") at a price of $0.05 per Unit. Each Unit is comprised of one common share and common share purchase warrant (the "Warrant"), with each Warrant entitling the holder to purchase one Common share of the Company at a price of $0.075 per share for a period of 24 months from closing. There were no finders' fees issued on this Financing. All securities issued pursuant to the Financing are subject to a four-month hold period, expiring on June 25, 2025.
Suite 750 - 580 Hornby Street, Box 113, Vancouver, British Columbia, Canada V6C 3B6
Telephone: (604) 602-4935 Fax: (604) 602-4936
SWEET POISON SPIRITS INC.
Management's Discussion & Analysis
January 31, 2025
Page 5
Debt Settlement
Subsequent to the period ending January 31, 2025, the Company arranged to settle outstanding debt with various creditors, including officers and directors and companies controlled by officers and directors, in the aggregate of $134,240 through the issuance of 2,684,800 shares at a deemed price of $0.05, when the fair value price of the Company’s shares were $0.105 per share (the “February 24, 2025 Debt Settlement”). All securities issued pursuant to the February 24, 2025 Debt Settlement are subject to a four-month hold period, expiring on June 25, 2025.
Acquisition
Acquisition of Knightswood Holdings Ltd.
On March 1, 2024 the Company acquired all the issued and outstanding shares of Knightswood Holdings Ltd. (“Knightswood”) from an unrelated party for $10. Knightswood is in the business of providing its subsidiaries a qualified investment, as defined in the Income Tax Act (Canada), for their debentures or debt securities.
The Company has recognized the Investment as a financial asset under IFRS 9 – Financial Instruments measured at fair value of $10, being the market value on the date the Company purchased Knightswood. Subsequently, the Investment in Knightswood will be measured at fair value with any changes recorded through profit or loss (“FVTPL”).
On March 1, 2024, the Company entered into an agreement with an unrelated third party (the “Operator”), for the sole management of Knightswood to be undertaken by the Operator (the “Knightswood Agreement”). The Knightswood Agreement has a term of five years expiring February 28, 2029 but may be terminated earlier either by mutual agreement or providing a 60-day written notice to the other party. Upon termination, the Company will transfer all the shares of Knightswood to the Operator for $10.
Under the Knightswood Agreement, the Operator is solely responsible for managing the business operations and financial affairs, making decisions and setting out policies of Knightswood. In return, the Operator is entitled to all the cash surplus in Knightswood after paying a fixed annual fee of $50,000 to the Company for holding the shares of Knightswood (the “Fixed Fee”). The Fixed Fee is due in four equal instalments at the end of each calendar quarter and paid by Knightswood directly to the Company.
Furthermore, the Company will not commit its management or resources and is under no obligation to advance funds to or cover the expenses of Knightswood. Conversely, the Company does not have any right to any variable financial returns from the activities of Knightswood other than the Fixed Fee. The Company also has no rights, power, ability or obligation to direct the activities of Knightswood or be involved in any of the daily affairs, decision making, management or activities of Knightswood. As such, the financial results and position of Knightswood are not consolidated with the financial statements of the Company pursuant to the definition of control under IFRS.
Environmental Protection
The operation of our business has no extraordinary environmental protection requirements. As a result, the Company does not anticipate that any environmental regulations or controls will materially affect the business.
Suite 750 – 580 Hornby Street, Box 113, Vancouver, British Columbia, Canada V6C 3B6
Telephone: (604) 602-4935 Fax: (604) 602-4936
SWEET POISON SPIRITS INC.
Management's Discussion & Analysis
January 31, 2025
Page 6
1.4 Results of Operations
The loss and comprehensive loss for the nine month period ended January 31, 2025, is $37,393 and for the comparative period ended January 31, 2024, there was an income and comprehensive income of $53,810:
| For the nine month period ended January 31, | 2025 | 2024 | Variance |
|---|---|---|---|
| Expenses | |||
| Amortization and depreciation | $ 922 | $ 7,019 | (6,097) |
| Audit and accounting fees | (1,339) | 21,571 | (22,910) |
| Foreign exchange loss (gain) | (415) | 180 | (595) |
| Legal and corporate services | 1,375 | 17,048 | (15,673) |
| Management and consulting fees | 49,500 | 99,500 | (50,000) |
| Office, rent and administration | 12,011 | 13,094 | (1,083) |
| Shareholder communications and marketing | 3,871 | 2,442 | 1,429 |
| Transfer agent and filing fees | 8,718 | 19,568 | (10,850) |
| Travel and accommodations | 250 | - | 250 |
| Total Expenses | (74,893) | (180,422) | (105,529) |
| Other items | |||
| Other income | 37,500 | - | 37,500 |
| Gain on debt settlement | - | 287,812 | (287,812) |
| Write-down of other receivable and distribution rights | - | (53,580) | 53,580 |
| Total Other items | 37,500 | 234,232 | (196,732) |
| Total income (loss) and comprehensive income (loss) for the period | $ (37,393) | $ 53,810 | $ (91,203) |
During the period ended January 31, 2025, the Company incurred legal and corporate service expenses of $1,375, transfer agent fees of $8,718, shareholder communications and marketing expenses of $3,871, travel and accommodation expenses of $250 and audit and accounting fee recoveries of $1,339. These costs are much lower than in the comparative period ended January 31, 2024, mainly due to the change of business in the previous period, and due to a lack of funding and lower activity over fiscal 2025.
See Section 1.5 – Debt Settlements for related party share issuances for settlement of advances and fees.
1.5 Financings, Debt Settlements, Principal Purposes & Milestones
Consolidation
On May 1, 2023, the Company’s outstanding common shares were consolidated on the basis of two existing shares for one new share. On January 8, 2024, the Company’s outstanding common shares were consolidated on the basis of four existing shares for one new share. Prior to the consolidations, the Company’s authorized share capital was an unlimited number of common shares without par value, of which 52,201,501 shares were issued and outstanding. Subsequent to the consolidations and the share issuances noted below under “Financing” and “Debt Settlements”, there were 9,821,088 common shares outstanding.
Suite 750 – 580 Hornby Street, Box 113, Vancouver, British Columbia, Canada V6C 3B6
Telephone: (604) 602-4935 Fax: (604) 602-4936
SWEET POISON SPIRITS INC.
Management's Discussion & Analysis
January 31, 2025
Page 7
During the year ended April 30, 2024, 1,561,875 warrants exercisable at $0.80 per share until February 2, 2024 expired unexercised.
Financing
Subsequent to the period ending January 31, 2025, the Company closed a non-brokered private placement (the “Financing”), raising $450,000 in gross proceeds through the issuance of 9,000,000 units (the “Units”) at a price of $0.05 per Unit. Each Unit is comprised of one common share and common share purchase warrant (the “Warrant”), with each Warrant entitling the holder to purchase one Common share of the Company at a price of $0.075 per share for a period of 24 months from closing. There were no finders’ fees issued on this Financing. All securities issued pursuant to the Financing are subject to a four-month hold period, expiring on June 25, 2025.
Debt Settlements
On May 1, 2023, the Company arranged to settle certain outstanding debt with officers and directors in the aggregate amount of $452,270 through the issuance of 1,130,675 shares at a deemed price of $0.40, when the fair value price of the Company’s shares were $0.24 per share. As a result, the Company recorded a gain on debt settlement of $180,908 in the Company’s profit or loss for the year ended April 30, 2024. Included in these amounts was $373,520 in funds advanced by the CEO which were outstanding since November 2021 and had been recognized as an unsecured non-interest bearing loan. The remaining amounts represent unpaid management fees.
On January 8, 2024, the Company arranged to settle outstanding debt with various creditors, including officers and directors and companies controlled by officers and directors, in the aggregate amount of $143,885 through the issuance of 2,877,708 shares at a deemed price of $0.05, when the fair value price of the Company’s shares were $0.06 per share. As a result, the Company recorded a loss on Debt Settlement of $28,777 in the Company’s profit or loss for the year ended April 30, 2024.
Subsequent to the period ending January 31, 2025, the Company arranged to settle outstanding debt with various creditors, including officers and directors and companies controlled by officers and directors, in the aggregate of $134,240 through the issuance of 2,684,800 shares at a deemed price of $0.05, when the fair value price of the Company’s shares were $0.105 per share (the “February 24, 2025 Debt Settlement”).
1.6 Summary of Quarterly Results
The following is a summary of the Company’s financial results for the eight most recently completed quarters:
| Q3 31-Jan-25 | Q2 31-Oct-24 | Q1 31-Jul-24 | Q4 30-Apr-24 | |
|---|---|---|---|---|
| Loss for period | $ (18,375) | $ (5,823) | $ (13,195) | $ (355,636) |
| Per share – basic and diluted | $ (0.00) | $ (0.00) | $ (0.00) | $ (0.04) |
| Q3 31-Jan-24 | Q2 31-Oct-23 | Q1 31-Jul-23 | Q4 30-Apr-23 | |
| Income (loss) for period | $ (64,164) | $ (142,717) | $ 260,691 | $ (278,480) |
| Per share – basic and diluted | $ (0.01) | $ (0.02) | $ 0.03 | $ (0.05) |
Suite 750 – 580 Hornby Street, Box 113, Vancouver, British Columbia, Canada V6C 3B6
Telephone: (604) 602-4935 Fax: (604) 602-4936
SWEET POISON SPIRITS INC.
Management's Discussion & Analysis
January 31, 2025
Page 8
Discussion
The Company reports a loss of $18,375 for the quarter ending January 31, 2025 compared to a loss of $64,164 in the comparative quarter ended January 31, 2024. For more detailed discussion on the quarterly production results and financial results for the quarter ended January 31, 2025, please refer to Section 1.4 under “Results of Operations”.
1.7 Liquidity and Capital Resources
As at January 31, 2025, the Company had $2,438 (April 30, 2024 - $11,702) in cash, working capital deficit of $229,212 and no long-term debt. The Company’s ability to continue as a going concern is dependent upon its existing working capital and obtaining the necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due.
The Company’s working capital will not meet corporate, development, administrative and property obligations for the coming period. As a result, the Company will require additional financing and, while the Company has been successful in raising equity financing through the issuances of common shares in the past, there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be available on acceptable terms. As such, there remains significant doubt as to the Company’s ability to continue as a going concern (see Section 1.5 – Financings, Debt Settlements, Principal Purposes & Milestones).
1.8 Off Balance Sheet Arrangements
There are no off-balance sheet arrangements to which the Company is committed.
1.9 Proposed Transactions
There are no proposed transactions that have not been disclosed herein.
1.10 Transactions with Related Parties
The following is a summary of charges incurred by the Company with related parties during the period ended January 31, 2025 and 2024:
| Period ended January 31, | 2025 | 2024 |
|---|---|---|
| Audit and accounting | $ 2,250 | $ 9,571 |
| Management and director fees | 49,500 | 99,500 |
| Office and administration | 10,125 | 11,250 |
| Travel and accommodations | - | (7,000) |
| Total | $ 61,875 | $ 113,321 |
During the period ended January 31, 2025, the Company incurred fees and operational expenses totalling $61,875 (January 31, 2024 - $113,321) from companies controlled by an officer and director of the Company and other officers and directors. As of January 31, 2025, the Company had amounts and advances payable to officers and directors, and companies with directors in common of $134,240 (April 30, 2024 - $65,804).
Suite 750 – 580 Hornby Street, Box 113, Vancouver, British Columbia, Canada V6C 3B6
Telephone: (604) 602-4935 Fax: (604) 602-4936
SWEET POISON SPIRITS INC.
Management's Discussion & Analysis
January 31, 2025
Page 9
See Section 1.5 – Debt Settlements for related party share issuances for settlements of advances and fees.
1.11 Critical Accounting Estimates
a) Going concern
Management makes an assessment about the Company’s ability to continue as a going concern by taking in to account the consideration of the various factors discussed in Note 2 of the April 30, 2024 consolidated financial statements.
b) Income Taxes
Significant judgment is required in determining the provision for income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Company recognizes liabilities and contingencies for anticipated tax audit issues based on the Company’s current understanding of tax law. For matters where it is probable that an adjustment will be made, the Company records its best estimate of the tax liability including the related interest and penalties in the current tax provision. Management believes they have adequately provided for the probable outcome of these matters; however, the final outcome may result in a materially different outcome than the amount included in the tax liabilities.
In addition, the Company recognizes deferred tax assets relating to tax losses carried forward to the extent there are sufficient taxable temporary differences applicable to the Company. However, utilization of the tax losses also depends on the ability of the taxable entity to satisfy certain tests at the time the losses are recuperated.
c) Carrying Value of Data Centre Equipment
The evaluation of asset carrying values for indications of impairment includes consideration of both external and internal sources of information, including such factors as the relationship between mining rewards and the required computing power, digital currency prices, the periodic contribution margin of digital currency mining activities, changes in underlying costs, such as electricity, and technological changes. When required, the determination of fair value and value in use requires management to make estimates and assumptions about digital currency prices, required computing power, technological changes and operating costs, such as electricity. The estimates and assumptions are subject to risk and uncertainty; hence, there is the possibility that changes in circumstances will alter these projections, which may impact the recoverable amount of the assets. In such circumstances some or all of the carrying value of the assets may be impaired or the impairment charge reduced with the impact recorded in profit or loss.
As at January 31, 2025, none of the Company’s Siacoin mining rigs had been placed into operations and, as such, have not been amortized. Once operations have begun, the rigs will be amortized accordingly. Non-financial assets are subject to impairment tests at the end of each reporting period and whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount, which is the higher of value in use and fair value less costs of disposal, the asset is written down accordingly.
Suite 750 – 580 Hornby Street, Box 113, Vancouver, British Columbia, Canada V6C 3B6
Telephone: (604) 602-4935 Fax: (604) 602-4936
SWEET POISON SPIRITS INC.
Management's Discussion & Analysis
January 31, 2025
Page 10
Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the asset’s cash-generating unit. During the years ended April 30, 2024 and 2023, the Company determined that further impairment on its data centre equipment was required due to the decrease in the fair market value of identical equipment, not yet put into service, as a result of the significant reduction in the applicable cryptocurrencies. The Company recorded an impairment loss of $81,018 (US$60,000) for the year ended April 30, 2024 (April 30, 2023 - $571,178 (US$450,000)). As at January 31, 2025, the mining rigs were valued at $21,726 (US$15,000) (April 30, 2024 - $20,619 (US$15,000)).
d) Stock based compensation
The inputs used in calculating the fair value for stock-based compensation expense included in profit and loss and stock-based share issuance costs included in shareholders’ equity. The stock-based compensation expense is estimated using Black-Scholes options-pricing model as measured on the grant date to estimate the fair value of stock options. This model involves the input of highly sensitive assumptions, including the expected price volatility of the Company’s common shares, the expected life of the options, and the estimate forfeiture rate.
e) Shares for debt
The valuation of shares issued in non-cash transactions, including the settlement of debt. Generally, the valuation of non-cash transactions is based on the value of the goods or services received. When non-cash transactions are entered into with employees and those providing similar services, the non-cash transactions are measured at the fair value of the consideration given up using market prices.
1.12 Changes in Accounting Policies
a) New Accounting Standards and Amendments
The Company adopted the following amendments to accounting standards, which are effective for annual reporting periods beginning on or after May 1, 2023:
Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2) – the amendments require that an entity discloses its material accounting policies, instead of its significant accounting policies. Further amendments explain how an entity can identify a material accounting policy.
Definition of Accounting Estimates (Amendments to IAS 8) – the amendments replace the definition of a change in accounting estimates with a definition of accounting estimates. Under the new definition, accounting estimates are “monetary amounts in financial statements that are subject to measurement uncertainty”. Entities develop accounting estimates if accounting policies require items in financial statements to be measured in a way that involves measurement uncertainty. The amendments clarify that a change in accounting estimate that results from new information or new developments is not the correction of an error.
Certain pronouncements were issued by the IASB but are not yet effective as at January 31, 2025.
Suite 750 – 580 Hornby Street, Box 113, Vancouver, British Columbia, Canada V6C 3B6
Telephone: (604) 602-4935 Fax: (604) 602-4936
SWEET POISON SPIRITS INC.
Management's Discussion & Analysis
January 31, 2025
Page 11
IFRS 18 Presentation and Disclosure in Financial Statements, which will replace IAS 1, Presentation of Financial Statements aims to improve how companies communicate in their financial statements, with a focus on information about financial performance in the statement of profit or loss, in particular additional defined subtotals, disclosures about management-defined performance measures and new principles for aggregation and disaggregation of information. IFRS 18 is accompanied by limited amendments to the requirements in IAS 7 Statement of Cash Flows.
IFRS 18 is effective from January 1, 2027. Companies are permitted to apply IFRS 18 before that date.
The Company intends to adopt these standards when they become effective but does not expect these amendments to have a material effect on its financial statements.
1.13 Financial and Other Instruments
As at January 31, 2025, the Company’s financial instruments consist of cash, amounts receivable, investment, advances payable, and trade and other payables.
The fair value of the Company’s cash, amounts receivable, investment, advances payable, and trade and other payables approximates their carrying value, which is the amount on the statement of financial position, due to their short-term maturities or ability of prompt liquidation.
a) Currency Risk
Currency risk is the risk to the Company's earnings that arises from fluctuations of foreign exchange rates and the degree of volatility of these rates. The Company does not use derivative instruments to reduce its exposure to foreign currency risk. At January 31, 2025, US dollar amounts were converted at a rate of $1.45 Canadian dollars to $1 US dollar and Euros were converted at a rate of $1.50 Canadian dollars to 1 Euro. A 10% increase or decrease in the US dollar exchange may increase or decrease loss for the period by approximately $2. A 10% increase or decrease in the EUR$ exchange may increase or decrease loss for the period by approximately $3,008.
b) Interest Rate Risk
The Company’s cash earns interest at a variable interest rate. Because of the nature of this financial instrument, fluctuations in market rates do not have a significant impact on estimated fair values as of January 31, 2025. Future cash flows from interest income on cash will be affected by interest rate fluctuations. Interest rate risk consists of two components:
(i) To the extent that payments made or received on the Company’s monetary assets and liabilities are affected by changes in the prevailing market interest rates, the Company is exposed to interest rate cash flow risk.
(ii) To the extent that changes in prevailing market interest rates differ from the interest rates in the Company’s monetary assets and liabilities, the Company is exposed to interest rate price risk.
The Company’s exposure to interest rate fluctuations is minimal.
Suite 750 – 580 Hornby Street, Box 113, Vancouver, British Columbia, Canada V6C 3B6
Telephone: (604) 602-4935 Fax: (604) 602-4936
SWEET POISON SPIRITS INC.
Management's Discussion & Analysis
January 31, 2025
Page 12
c) Credit Risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company is exposed to credit risk with respect to its cash, the balance of which at January 31, 2025 is $2,438 (April 30, 2024 - $11,702). As at that date, cash was held at a chartered Canadian financial institution and the Company does not consider the risks to be significant.
d) Liquidity Risk
Liquidity risk arises from the excess of financial obligations over available financial assets due at any point in time. The Company's objective in managing liquidity risk is to maintain sufficient readily available reserves in order to meet its liquidity requirements. Additional cash requirements could be met with the issuance of additional share capital; however there is no assurance the Company will be able to raise funds in this manner in the future. As at January 31, 2025, the Company was holding cash of $2,438 (April 30, 2024 - $11,702).
1.14 Disclosure of Outstanding Share Capital as at March 25, 2025:
| Number | Book Value | |
|---|---|---|
| Common Shares | 21,505,888 | $ 6,186,073 |
| Number | Weighted average exercise price | |
| Warrants | 9,000,000 | $ 0.075 |
See section 1.3 – Financings and Debt Settlements for share issuances subsequent to January 31, 2025 and related warrants issued.
1.15 Approval
The Board of Directors, upon the recommendation of the Audit Committee, has approved the disclosure contained in this MD&A.
Suite 750 – 580 Hornby Street, Box 113, Vancouver, British Columbia, Canada V6C 3B6
Telephone: (604) 602-4935 Fax: (604) 602-4936