MCF Energy Ltd. — Remuneration Information 2023

May 19, 2023

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FORM 51-102F6V

STATEMENT OF EXECUTIVE COMPENSATION

(for the year ended December 31, 2022)

OBJECTIVE

The objective of this disclosure is to communicate the compensation the Company paid, made payable, awarded, granted, gave, or otherwise provided to each named executive officer and director for the financial year, and the decisionmaking process relating to compensation. This disclosure will provide insight into executive compensation as a key aspect of the overall stewardship and governance of the Company and will help investors understand how decisions about executive compensation are made.

DEFINITIONS

For the purpose of this Statement of Executive Compensation:

“Company” means MCF Energy Ltd.;

“company” includes other types of business organizations such as partnerships, trusts and other unincorporated business entities;

“compensation securities” includes stock options, convertible securities, exchangeable securities and similar instruments including stock appreciation rights, deferred share units and restricted stock units granted or issued by the Company or one of its subsidiaries for services provided or to be provided, directly or indirectly, to the Company or any of its subsidiaries;

“equity incentive plan” means an incentive plan, or portion of an incentive plan, under which awards are granted and that falls within the scope of IFRS 2 Share-based Payment;

“external management company” includes a subsidiary, affiliate or associate of the external management company;

“grant date” means a date determined for financial statement reporting purposes under IFRS 2 Share-based Payment;

“incentive plan” means any plan providing compensation that depends on achieving certain performance goals or similar conditions within a specified period;

“incentive plan award” means compensation awarded, earned, paid, or payable under an incentive plan;

“ named executive officer ” or “ NEO ” means each of the following individuals:

• (a) each individual who, in respect of the Company, during any part of the most recently completed financial year, served as chief executive officer (“ CEO ”), including an individual performing functions similar to a CEO;

• (b) each individual who, in respect of the company, during any part of the most recently completed financial year, served as chief financial officer (“ CFO ”), including an individual performing functions similar to a CFO;

• (c) in respect of the company and its subsidiaries, the most highly compensated executive officer other than the individuals identified in paragraphs (a) and (b) at the end of the most recently completed financial year whose total compensation was more than $150,000 for that financial year; and

• (d) each individual who would be a named executive officer under paragraph (c) but for the fact that the individual was not an executive officer of the company, and was not acting in a similar capacity, at the end of that financial year;

“non-equity incentive plan” means an incentive plan or portion of an incentive plan that is not an equity incentive plan;

“option-based award” means an award under an equity incentive plan of options, including, for greater certainty, share options, share appreciation rights, and similar instruments that have option-like features;

“ plan ” includes any plan, contract, authorization, or arrangement, whether or not set out in any formal document, where cash, compensation securities or any other property may be received, whether for one or more persons;

“share-based award” means an award under an equity incentive plan of equity-based instruments that do not have option-like features, including, for greater certainty, common shares, restricted shares, restricted share units, deferred share units, phantom shares, phantom share units, common share equivalent units, and stock;

“ underlying securities ” means any securities issuable on conversion, exchange or exercise of compensation securities.

Based on the foregoing definitions during the most recently completed financial year ended December 31, 2022, the Company had three (3) NEOs, namely, Kristen Reinertson, Chief Executive Officer and Director, and Tally Barmash, Chief Financial Officer and Corporate Secretary and Claus Andrup, former interim Chief Executive Officer and former Chief Financial Officer.

All dollar amounts referenced herein, unless otherwise indicated, are expressed in United States dollars and Canadian dollars are referred to as “C$”.

EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS

The Company’s process for determining executive compensation is very simple. In particular, the Company relies solely on board discussion without any formal objectives, criteria and analysis.

Through its executive compensation practices, the Company seeks to provide value to its Shareholders through a strong executive leadership. Specifically, the Company’s executive compensation structure seeks to attract and retain talented and experienced executives necessary to achieve the Company’s strategic objectives, motivate and reward executives whose knowledge, skills and performance are critical to the Company’s success, and align the interests of the Company’s executives and Shareholders by motivating executives to increase Shareholder value.

The Company does not currently pay any base salary compensation to its Named Executive Officers for their services in their capacity as Named Executive Officers. Compensation to NEOs currently is based on a number of factors including the Company's executive performance during the fiscal year, the roles and responsibilities of the Company's executives, the individual experience and skills of, and expected contributions from, the Company's executives, the Company's executives' historical compensation and performance within the Company, and any contractual commitments the Company has made to its executives regarding compensation.

The board of directors of the Company (the " Board ") has not conducted a formal evaluation of the implications of the risks associated with the Company's compensation policies. Risk management is a consideration of the when implementing its compensation policies and the Board do not believe that the Company's compensation policies result in unnecessary or inappropriate risk taking including risks that are likely to have a material adverse effect on the Company.

Base Salary

The Company has not entered into any management agreements with its executive officers, and did not pay any base salary to its executives in the years ended December 31, 2022 and December 31, 2021. Going forward the Company may determine that payment of a base salary is appropriate for its executives and may enter into management or employment agreements providing for payment of a base salary or other compensation.

Option Based Awards

The Company has in effect a stock option plan (the " Stock Option Plan ") in order to provide effective incentives to directors, officers, senior management personnel, employees and consultants of the Company and to enable the Company to attract and retain experienced and qualified individuals in those positions by permitting such individuals to directly participate in an increase in per share value created for the Company's Shareholders. As at December 31, 2022, the Company had no equity compensation plans other than the Stock Option Plan. The Stock Option Plan is an important part of the Company's long-term incentive strategy for its executive officers, permitting them to participate in any

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appreciation of the market value of the common shares over a stated period of time. The Stock Option Plan is intended to reinforce commitment to long-term growth in profitability and shareholder value. The size of stock option grants to officers is dependent on each officer’s level of responsibility, authority and importance to the Company and the degree to which such executive officer’s long term contribution to the Company will be key to its long-term success. Previous grants of stock options are taken into account when considering new grants. The Company also grants options to charitable organizations as part of its commitment to social responsibility.

Use of Financial Instruments

The Company does not have a policy that would prohibit an NEO or director from purchasing financial instruments, including prepaid variable forward contracts, equity swaps, collars or units of exchange funds, that are designed to hedge or offset a decrease in market value of equity securities granted as compensation or held, directly or indirectly, by the NEO or director. However, management is not aware of any NEO or director purchasing such an instrument.

Director and NEO compensation, excluding options and compensation securities

The following table sets forth all compensation, excluding options and compensation securities, paid, payable, awarded, granted, given, or otherwise provided, directly or indirectly, by the Company, or a subsidiary of the Company, for the two most recently completed financial years, to each NEO and director of the Company, in any capacity, including, for greater certainty, all plan and non-plan compensation, direct and indirect pay, remuneration, economic or financial award, reward, benefit, gift or perquisite paid, payable, awarded, granted, given or otherwise provided to the NEO or director of the Company for services provided and for services to be provided, directly or indirectly, to the Company or a subsidiary of the Company.

There were no executive officers of the Company who individually earned more than $150,000 in total compensation.

COMPENSATION EXCLUDING COMPENSATION SECURITIES

Name and Position	Year ended Dec 31 Salary, consulting fee, retainer or commission ($) Bonus ($) Committee or meeting fees ($) Value of perquisites ($) Value of all other compensation ($) Total compensation ($)
Kristen Reinertson(1) Former CEO and former Director	2022 Nil Nil Nil Nil Nil Nil 2021 N/A N/A N/A N/A N/A N/A
Tally Barmash(2) Former CFO and Corporate Secretary	2022 Nil(3) Nil Nil Nil Nil Nil(3)
	2021 N/A N/A N/A N/A N/A N/A
David Whelan(4) Former Director	2022 Nil Nil Nil Nil Nil Nil 2021 N/A N/A N/A N/A N/A N/A
Howard Lobar(5) Former Director	2022 Nil Nil Nil Nil Nil Nil
	2021 N/A N/A N/A N/A N/A N/A
Scott Young(6) Former Director	2022 Nil Nil Nil Nil Nil Nil 2021 24,000(6) Nil Nil Nil Nil 24,000(6)
Claus Andrup(7) Former Interim CEO & CFO	2022 Nil Nil Nil Nil Nil Nil
	2021 Nil Nil Nil Nil Nil Nil
Gordon Nielsen(8) Former Director	2022 N/A N/A N/A N/A N/A N/A 2021 4,710(8) Nil Nil Nil Nil 4,710(8)

Notes:

(1) Ms. Reinertson served as CEO and a director of the Company from April 26, 2022 to January 3, 2023.

(2) Ms. Barmash served as CFO and Corporate Secretary of the Company from April 26, 2022 to January 3, 2023.

(3) The Company paid to Fiore Management & Advisory Corp. (“ FMAC ”) a corporate administration consulting fee of $67,500 for the year ended December 31, 2022. Ms. Barmash is an employee of FMAC.

(4) Mr. Whelan served as a director of the Company from April 26, 2022 to January 3, 2023.

(5) Mr. Lobar served as a director of the Company from April 26, 2022 to January 3, 2023.

(6) Mr. Young served as a director of the Company from May 22, 2020 to April 26, 2022. He was paid $2,000 per month for director fees in 2021 through Freeform Communications Inc.

(7) Mr. Andrup served as interim CEO and CFO from May 22, 2020 to April 27, 2022.

(8) Mr. Nielsen served as a director of the Company from May 31, 2017 to March 10, 2021. He was paid $2,000 per month for director fees through Geologistics Management Corp.

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Stock Options and Other Compensation Securities

The following table sets out all compensation securities granted or issued to each NEO and director by the Company or one of its subsidiaries during the financial year ended December 31, 2022, for services provided or to be provided, directly or indirectly, to the Company or any subsidiary thereof.

SECURITY BASED COMPENSATION

Name and Position	Type of compensation security	Number of compensation securities, number of underlying securities, and percentage of class(1)	Date of issue or grant	Issue, conversion or exercise price ($)	Closing price of security or underlying security on date of grant ($)	Closing price of security or underlying security at year end ($)	Expiry date
Kristen		250,000 stock options
Reinertson(2)Former		(8.33%)
CEO and Former Director	Stock Options	250,000 underlying common	April 27, 2022	$0.05	$0.04	$0.19	April 27, 2032
		shares
		(0.002%)
**Tally Barmash(3) **		250,000 stock options
Former CFO and Former Corporate Secretary	Stock Options	(8.33%) 250,000 underlying common shares	April 27, 2022	$0.05	$0.04	$0.19	April 27, 2032
		(0.002%)
**David Whelan(4) **		250,000 stock options
Former Director	Stock Options	(8.33%) 250,000 underlying	April 27, 2022	$0.05	$0.04	$0.19	April 27, 2032
		common shares
		(0.002%)
**Howard Lobar(5) **		250,000 stock options
Former Director	Stock Options	(8.33%) 250,000 underlying	April 27, 2022	$0.05	$0.04	$0.19	April 27, 2032
		common shares
		(0.002%)

Notes:

(1) The percentage of class is based on the total number of stock options and common shares outstanding as at December 6, 2022, being 3,000,000 stock options outstanding and 112,472,144 common shares issued and outstanding.

(2) As at December 31, 2022, Ms. Reinertson held no stock options.

(3) As at December 31, 2022, Ms. Barmash held no stock options.

(4) As at December 31, 2022, Mr. Whelan held no stock options.

(5) As at December 31, 2022, Ms. Reinertson held no stock options.

Mr. Young, Mr. Andrup and Mr. Nielsen held no stock options on the last day of the year ended December 31, 2022.

Exercise of Compensation Securities by Directors and NEOs

The following table sets forth incentive stock options (option-based awards) pursuant to the Company’s stock option plan that were outstanding to NEOs and directors of the Company who were not NEOs of the Company during financial year ended December 31, 2022.

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EXERCISE OF COMPENSATION SECURITIES BY DIRECTORS AND NEOS

						Difference
	Type of compensation security	Number of underlying securities exercised	Exercise price per security ($)	Date of Exercise	Closing price per security on date of exercise ($)	between exercise price and closing price on date of exercise	Total value on exercise date ($)
Name and Position						($)
Kristen Reinertson Former CEO and Former Director	Stock Options	250,000	$0.05	December 7, 2022	$0.19	$0.14	$35,000
Tally Barmash Former CFO and Corporate Secretary	Stock Options	250,000	$0.05	December 7, 2022	$0.19	$0.14	$35,000
David Whelan Former Director	Stock Options	250,000	$0.05	December 7, 2022	$0.19	$0.14	$35,000
Howard Lobar Former Director	Stock Options	250,000	$0.05	December 7, 2022	$0.19	$0.14	$35,000

Stock Option Plans and Other Incentive Plans

The Company has adopted the Stock Option Plan, a “rolling” stock option plan which sets the number of options available for grant by the Company at an amount equal to up to a maximum of 10% of the Company’s issued and outstanding Common Shares from time to time, less any Common Shares reserved for issuance under other share compensation arrangements.

The purpose of the Stock Option Plan is to promote the profitability and growth of the Company by facilitating the efforts of the Company to attract and retain key individuals. The Stock Option Plan provides an incentive for and encourages ownership of Common Shares by its key individuals so that they may increase their stake in the Company and benefit from increases in the value of the Common Shares.

Directors, officers, employees, consultants and eligible charitable organizations (as such terms are defined in the Stock Option Plan) are eligible to be granted stock options under the Stock Option Plan.

Pursuant to the Stock Option Plan: (i) the aggregate number of options granted to any one person (and companies whollyowned by that person) pursuant to the Stock Option Plan and any other share compensation arrangement in a 12-month period must not exceed 5% of the issued Common Shares calculated on the date an option is granted to the person (unless the Company has obtained the requisite disinterested shareholder approval); (ii) the aggregate number of options granted to any one consultant in a 12-month period pursuant to the Stock Option Plan and any other share compensation arrangement must not exceed 2% of the issued Common Shares, calculated on the date an option is granted to the consultant; (iii) the aggregate number of options granted to all persons retained to provide investor relations activities in any 12-month period pursuant to the Stock Option Plan and any other share compensation arrangement must not exceed 2% of the issued Common Shares, calculated on the date an option is granted to any such person; (iv) the aggregate number of options reserved for issuance pursuant to the Stock Option Plan or any other share compensation arrangement to insiders within a one-year period shall not exceed 10% of the Common Shares outstanding from time to time; and (v) the aggregate number of options reserved for issuance pursuant to the Stock Option Plan or any other share compensation arrangement to insiders shall not exceed 10% of the Common Shares outstanding from time to time. Subject to the Stock Option Plan and otherwise in compliance with the policies of the TSXV, the Board shall determine the manner in which an option shall vest and become exercisable. Options granted to consultants performing investor relations activities shall vest over a minimum of 12 months with no more than one-quarter (1/4) of such options vesting in any three-month period. All options are non-assignable and non-transferable. Disinterested shareholder approval will be required for any reduction in the exercise price of a stock option if the optionee is an insider of the Company at the time of the proposed amendment.

Subject to a minimum exercise price of $0.05 per Common Share, the exercise price per Common Share for an option shall be not less than the “Market Price” as calculated pursuant to the TSXV Corporate Finance Policies at the date of grant.

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Every option granted under the Stock Option Plan shall have a term not exceeding and shall therefore expire no later than 10 years after the date of grant (subject to extension where the expiry date falls within a “blackout period”). An option will be automatically extended past its expiry date if such expiry date falls within a “blackout period” during which the Company prohibits optionees from exercising their options, subject to the following requirements: (a) the blackout period must (i) be formally imposed by the Company pursuant to its internal trading policies; and (ii) must expire upon the general disclosure of undisclosed material information; and (b) the automatic extension of an option will not be permitted where the optionee or the Company is subject to a cease trade order (or similar order under securities laws) in respect of the Company’s securities.

The Stock Option Plan contains provisions for adjustment in the number of Common Shares or other property issuable on exercise of a stock option in the event of a share consolidation, split, reclassification or other capital reorganization, or a stock dividend, amalgamation, merger or other relevant corporate transaction, or any other relevant change in or event affecting the Common Shares.

The Stock Option Plan provides that, if a bona fide offer for Common Shares is made to an optionholder, shareholders of the Company generally or to a class of securityholders of the Company including optionholders, which offer, if accepted in whole or in part, would result in the offeror exercising control over the Company (within the meaning of applicable securities law), the Board will have the sole discretion to conditionally amend, abridge or otherwise eliminate any vesting schedules so that any options may be exercised by the holder thereof to permit such holder to tender the Common Shares received upon such exercise to said offer.

In connection with the exercise of an option, as a condition to such exercise the Company will require the optionee to pay to the Company an amount as necessary so as to ensure that the Company is in compliance with the applicable provisions of any federal, provincial or local laws relating to the withholding of tax or other required deductions relating to the exercise of such option.

According to the Stock Option Plan, if an optionee dies prior to otherwise ceasing to be an eligible person, each option held by such optionee shall terminate and shall therefore cease to be exercisable no later than the earlier of the expiry date and the date which is 12 months after the date of the optionee’s death. Unless an option agreement specified otherwise, if an optionee (other than an optionee who is involved in investor relations activities) ceases to be an eligible person for any reason other than death, each option held by such optionee shall cease to be exercisable 90 days after such terminating event. If an optionee involved in investor relations activities ceases to be an eligible person for any reason other than death, each option held by such optionee shall cease to be exercisable 30 days after such terminating event.

If any portion of an option is not vested at the time an optionee ceases, for any reason whatsoever, to be an eligible person, such unvested portion of the option may not be thereafter exercised by the optionee or its legal representative, as the case may be, provided that the Board may, in its discretion, thereafter permit the optionee or its legal representative, as the case may be, to exercise all or any part of such unvested portion of the option that would have vested prior to the time such option otherwise terminates.

As of the date hereof, the Company does not have any incentive plans other than the Stock Option Plan.

TERMINATION AND CHANGE OF CONTROL BENEFITS

During the financial years ended December 31, 2022 and December 31, 2021, the Company did not have any contracts or arrangements with any of its NEOs and thus there are no termination or change of control benefits issuable thereto. There are no compensatory plan, contract or arrangement where an NEO is entitled to receive payments from the Company or its subsidiaries in the event of (i) the resignation, retirement or any termination of the NEO’s employment with the Company and its subsidiaries (whether voluntary, involuntary or constructive), (ii) a change of control of the Company or any of its subsidiaries, or (iii) a change in the NEO’s responsibilities.

EMPLOYMENT CONSULTING AND MANAGEMENT CONTRACTS

Management functions of the Company are performed by the directors and senior officers of the Company and were not to any substantial degree performed by any other person or corporation during the financial years ended December 31, 2022 and December 31, 2021.

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SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table sets out information as at December 31, 2022 with respect to compensation plans under which equity securities of the Company are authorized for issuance.

equity securities of the Company are authorized for issuance.	equity securities of the Company are authorized for issuance.	equity securities of the Company are authorized for issuance.
EQUITYCOMPENSATIONPLANINFORMATION
Plan Category	A Number of securities to be issued upon exercise of outstanding options, warrants and rights	B Weighted average exercise price of outstanding options, warrants and rights	C Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column A)
Equity compensation plans approved by securityholders	Nil	N/A	11,547,211
Equity compensation plans not approved by securityholders	N/A	N/A	N/A
TOTALS:	Nil	N/A	11,547,211

PENSION PLAN BENEFITS

The Company has instituted no pension, retirement or deferred compensation plans, including defined contribution plans, and none are proposed at this time.

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