Interfield Global Software Inc. — Management Reports 2020

Apr 18, 2020

HIGHBURY PROJECTS INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2019

(Expressed in Canadian Dollars)

DATE

This management discussion and analysis ("MD&A") of Highbury Projects Inc.'s ("Highbury" or the "Company") financial position and results of operations for the year ended December 31, 2019 is prepared as at April 17, 2020. This MD&A should be read in conjunction with the audited financial statements for the year ended December 31, 2019 and the supporting notes. The audited financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS"). All dollar figures included therein and in the following MD&A are quoted in Canadian dollars. Additional information relevant to Highbury's activities can be found on SEDAR at www.sedar.com.

FORWARD-LOOKING INFORMATION

This discussion contains "forward-looking statements" that involve risks and uncertainties. Such information, although considered to be reasonable by the Company's management at the time of preparation, may prove to be inaccurate and actual results may differ materially from those anticipated in the statements made.

This MD&A may contain forward-looking statements that reflect the Company's current expectations and projections about its future results. When used in this MD&A, words such as "estimate", "intend", "expect", "anticipate" and similar expressions are intended to identify forward-looking statements, which, by their very nature, are not guarantees of the Company's future operational or financial performance, and are subject to risks and uncertainties and other factors that could cause the Company's actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this MD&A or as of the date otherwise specifically indicated herein.

Due to risks and uncertainties, including the risks and uncertainties identified above and elsewhere in this MD&A, actual events may differ materially from current expectations. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

OVERALL PERFORMANCE

Highbury was incorporated on May 13, 2005 and was listed on the TSX Venture Exchange ("Exchange") on October 28, 2005 as a capital pool company ("CPC") under Exchange Policy 2.4.

The Company's option agreement with Full Metal Minerals ("FMM") was approved as a Qualifying Transaction (QT) and the final exchange bulletin to that effect was issued by the exchange on November 5, 2007.

The principal business of Highbury is the exploration and evaluation of the Moore Creek property in Alaska and any other exploration and evaluation assets and evaluation properties that Highbury may later acquire. Highbury has designated the property as its "Principal Property" for the purposes of Exchange Policy. Highbury has carried out the recommendations on exploration program contained in the NI 43-101 Technical Report "Moore Creek prospect west-central Alaska" prepared by Dr. Charles C Hawley on July 24, 2007, using the available funds.

Investment in the common shares must be regarded as highly speculative due to the nature of the Company's business and its present stage of development. The Company has no active business or assets other than cash. There can be no assurance that an active and liquid market for the common shares will develop and investors may find it difficult to resell the common shares.

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. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company's business or results of operations at this time.

EXPLORATION OVERVIEW

Moore Creek Property

Pursuant to the Option Agreement with Full Metals Minerals Ltd. ("FMM") dated July 27, 2007, the Company has the sole and exclusive right and option to acquire an undivided 60% interest in the Moore Creek, Alaska property ("The Property").

During the year ended December 31, 2009, the Company signed a joint venture agreement dated February 19, 2009 with FMM whereby the Company has completed all its exploration expenditures to earn its 60% ownership interest in the Moore Creek Property which included approximately $1,700,000 of exploration costs. All future obligations and expenditures incurred will now be prorated between the Company and FMM including annual mineral rights fees and other costs to maintain the property in good standing. FMM will continue to be the operators of the property and the Company will reimburse its share of the expenditures plus a ten (10%) percent administrative charge to FMM. The Company was notified by FMM that it would no longer be the operator and incur any further costs on the Moore Creek Property. In order to keep the option in good standing, the Company is required to make annual option payments of US$50,000, which is adjusted for inflation starting in 2018. The Property is subject to a 1.5% net smelter royalty.

However, for the following years, the payment was amended as follows:

Annual Option Payments	Payment Amendment Date	Amended Payment
2014	February 2014	USD	12,000
2015	March 2015	USD	10,000
2016	January 2016	USD	12,000
2017	February 2017	USD	16,000
2018	January 2018	USD	16,000
2019	February 2019	USD	16,000

During the year ended December 31, 2014, the Company decided not to continue exploration of the Moore Creek Property, but maintained the claims. As a result of the Company's management's decision not to conduct any significant work on the Moore Creek Property in the near future, the Company wrote off the capitalized costs associated with the Moore Creek Property during the year ended December 31, 2014.

During the year ended December 31, 2019, the Company paid $21,300 (US$16,000) for the annual option payment (December 31, 2018 – $20,067 (US$16,000)) and $25,991 for claim fees (December 31, 2018 – $21,831), which were capitalized as exploration and evaluation costs. The option payments were subsequently written off to the statement of loss and comprehensive loss due to management's decision not to conduct any significant work in the near future.

Moore Creek – Exploration Program

The 2008 drill exploration program includes mapping, sampling, trenching and auger drilling to test additional targets on the property. The 2007 – 2008 exploration programs at the Moore Creek property were supervised by Dr. David Hedderly-Smith, PhD, PG, consultant for Highbury, and Robert McLeod, P.Geo, Vice-President of Exploration and Chief Executive Officer for FMM. Both are qualified persons as defined by NI 43-101.

An updated report incorporating the 2008 work program prepared by Robert McLeod P.Geo, Vice President Exploration, FMM and dated April 10, 2009 amended July 8, 2009 has been filed on SEDAR.

Moore Creek Property – Future Developments

In light of the results of the 2008 summer exploration campaign and the economic conditions, during the past few years, the Company has cut operating expenses in order to preserve cash. As such, the further exploration program at Moore Creek was reduced from that previously planned in summer of 2009. The previous plan included mapping, sampling, trenching and auger drilling to test additional targets on the property.

At the same time, Highbury is evaluating acquisition opportunities that may enhance and improve the Company's exploration portfolio.

RESULTS OF OPERATIONS

Three months ended December 31, 2019 compared with Three months ended December 31, 2018

The Company is in an exploration stage and has no revenue from operations. During the three months ended December 31, 2019, the Company recorded a net loss of $34,412, an increase of $5,037, compared to a net loss of $29,375 during the three months ended December 31, 2018.

During the three months ended December 31, 2019, the Company incurred professional fees of $12,475 (December 30, 2018 – $12,745).

In addition, during the three months ended December 31, 2019, the Company incurred $21,025 in acquisition costs which were capitalized as exploration and evaluation costs (December 31, 2018 - $15,797). The acquisition costs were subsequently written off to the statement of loss and comprehensive loss due to management's decision not to conduct any significant work in the near future.

Year ended December 31, 2019 compared with Year ended December 31, 2018

The Company is in an exploration stage and has no revenue from operations. During the year ended December 31, 2019, the Company recorded a net loss of $111,255, an increase of $4,852, compared to a net loss of $106,403 during the year ended December 31, 2018.

During the year ended December 31, 2019, the Company also incurred the following expenditures:

• Professional fees of $50,324 (December 31, 2018 $51,209);
• Transfer agent fees of $7,505 (December 31, 2018 $8,185); and
• TSX listing and filing fees of $5,700 (December 31, 2018 $5,700).

In addition, during the year ended December 31, 2019, the Company incurred $47,291 in acquisition costs which were initially capitalized as exploration and evaluation costs, then written off to the statement of loss and comprehensive loss due to management's decision not to conduct any significant work in the near future (December 31, 2018 – $41,898).

SUMMARY OF QUARTERLY INFORMATION

The quarterly results for the last eight quarters are summarized below:

	December 31, 2019		September 30, 2019		June 30, 2019		March 31, 2019
Finance income	$	(4)	$	74	$	86	$	169
Operatingexpenses		(34,407)		(18,567)		(16,813)		(41,792)
Net loss		(34,412)		(18,493)		(16,727)		(41,623)
Basic anddiluted earnings(loss) per share	$	0.00	$	(0.00)	$	(0.00)	$	(0.01)

	Three months ended
	December 31, 2018		September 30, 2018			June 30, 2018		March 31, 2018
Finance income	$	361	$	226	$	395	$	371
Operatingexpenses		(29,736)		(19,583)		(17,310)		(41,127)
Net loss		(29,375)		(19,357)		(16,915)		(40,756)
Basic anddiluted loss
per share	$	(0.00)	$	(0.00)	$	(0.00)	$	(0.01)

SELECTED INFORMATION

	For the years ended
		December 31, 2019		December 31, 2018	December 31, 2017
Finance income	$	325	$	1,353	$	1,681
Operating expenses		111,579		107,756		106,500
Net loss		(111,255)		(106,403)		(104,819)
Basic and diluted loss per share	$	(0.01)	$	(0.01)	$	(0.01)

As at:	December 31, 2019		December 31, 2018	December 31, 2017
Total assets	$10,847	$	113,769	$	223,136
Long-term financial liabilities	Nil		Nil		Nil
Cash dividend per share	Nil		Nil		Nil

LIQUIDITY / CAPITAL RESOURCES

The Company's activities have been funded through equity financings and the Company expects it will continue to be able to utilize this source of financing until it develops cash flow from future operations.

There can be no assurances the Company will be successful in its endeavors. If such funds are not available or other sources of finance cannot be obtained the Company will be forced to curtail its activities to a level for which funding is available or can be obtained.

As at December 31, 2019, the Company had cash and cash equivalents of $7,759 compared with $110,436 as at December 31, 2018. This decrease is due to acquisition cost payments made on the exploration and evaluation assets, ongoing administrative costs and professional and legal fees incurred to maintain the company in good standing. During the year ended December 31, 2019, the Company incurred the following significant expenses:

• Professional fees of $50,324;
• Transfer agent fees of $7,505; and
• TSX listing and filing fees of $5,700.

The Company incurred $47,291 in acquisition cost payments on its Moore Creek property in Alaska during the year ended December 31, 2019.

The Company has not pledged any of its assets as security for loans, or otherwise and is not subject to any debt covenants. Management believes the Company has sufficient working capital at this time to meet its ongoing financial obligations.

OUTSTANDING SHARE DATA

As of December 31, 2019, and 2018, there were 9,550,000 common shares outstanding.

During the year ended December 31, 2019, no share capital transactions occurred.

Subsequent to December 31, 2019, the Company closed a non-brokered private placement of 333,333 shares at a price of $0.30 for gross proceeds of $99,999.90.

As of the date of this MDA, there were 9,883,333 common shares outstanding.

No options were granted or exercised during the year ended December 31, 2019 and through to the date of this MD&A.

There were no warrants and options outstanding as of December 31, 2019 and the date of this MD&A.

RELATED PARTY TRANSACTIONS

Key management personnel include persons having the authority and responsibility for planning, directing, and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of executive and non-executive members of the Company's Board of Directors and corporate officers. The Company did not engage in any transactions directly with key management personnel.

The Company entered into the following transactions with related parties:

• a) Rent and administrative services of $251 (December 31, 2018 $219) was provided to a company with common directors. Accounts payable and accrued liabilities as at December 31, 2019 included $2,801 of prepayment for shared office expenses from a company with common directors (December 31, 2018 – $3,064).
• b) The Company paid $36,400 (December 31, 2018 $36,400) for accounting and administrative services to Quantum Advisory Partners LLP whose incorporated partner is the Company's Chief Financial Officer and Corporate Secretary.
  • i. At December 31, 2019, included in accounts payable and accrued liabilities is $9,555 (2018 $nil) owed to Quantum Advisory Partners LLP.
  • ii. Amounts payable to related parties are unsecured, non-interest bearing and are due on demand.

COMMITMENTS

The Company is obligated to pay its share of the prorated expenditures on Moore Creek property to keep it in good standing as stated in Note 4 of the financial statements for the year ended December 31, 2019.

OFF-BALANCE SHEET ARRANGEMENTS

The Company does not utilize off-balance sheet arrangements.

PROPOSED TRANSACTIONS

No disclosure necessary.

CRITICAL ACCOUNTING ESTIMATES

The financial statements, including comparatives, have been prepared using accounting policies consistent with IFRS issued by the International Accounting Standards Board ("IASB") and interpretations of the International Financial Reporting Interpretations Committee ("IFRIC"). The financial statements have been prepared on a historical cost basis, except for financial instruments classified as financial instruments at fair value through profit and loss, which are stated at their fair value. In addition, the financial statements have been prepared using the accrual basis of accounting except for cash flow information.

NEW ACCOUNTING PRONOUNCEMENTS

Adoption of new and amended accounting standards

Certain pronouncements were issued by the IASB or the IFRS Interpretations Committee that are mandatory for accounting periods beginning before or on January 1, 2019.

The adoption of the following IFRS pronouncement will result in enhanced financial statement disclosures in the Company's annual consolidated financial statements.

• IFRS 16 – Leases

New standard to establish principles for recognition, measurement, presentation and disclosure of leases with an impact on lessee accounting, effective for annual periods beginning on or after January 1, 2019. Under IFRS 16, as a lessee, the Company is required to recognize all leases in the statement of financial position as a "right-of-use" asset and a lease liability unless the lease term is 12 months or less or the underlying asset has a very low value. The asset is subsequently accounted for in accordance with the cost or revaluation model in IAS 16 Property, Plant and Equipment or as Investment Property under IAS 40 Investment Property. The liability is unwound over the term of the lease giving rise to an interest expense. The Company completed an assessment and concluded that there is no material impact on the financial statements from the adoption of this standard because the Company does not have any lease agreements.

• IFRIC 23 – Uncertainty over Income Tax Treatments

This standard was issued by the IASB in June 2017 and specifies the interpretation to be applied to the determination of taxable profit, tax bases, unused tax losses, unused tax credits and tax rates, when there is uncertainty over income tax treatments under IAS 12. IFRIC 23 is effective for annual periods beginning on or after January 1, 2019 with early adoption permitted. The Company completed an assessment and concluded that there is no significant change to its financial statements from adopting this new standard.

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

In the normal course of business, the Company is inherently exposed to certain financial risks, including market risk, credit risk and liquidity risk, through the use of financial instruments. The timeframe and manner in which the Company manages these risks varies based upon management's assessment of the risk and available alternatives for mitigating risk. The Company does not acquire or issue derivative financial instruments for trading or speculative purposes. All transactions undertaken are to support the Company's operations. These financial risks and the Company's exposure to these risks are provided in various tables in note 11 of our audited financial statements for the year ended December 31, 2019. For a discussion on the significant assumptions made in determining the fair value of financial instruments, refer also to note 2 of the financial statements for the year ended December 31, 2019.

OTHER MD&A REQUIREMENTS

Management's Responsibility for Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with IFRS and Canadian generally accepted accounting principles, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Risks and uncertainties

Investment in the common shares must be regarded as highly speculative due to the nature of the Company's business and its present stage of development.