Pontus Protein Ltd. — Management Reports 2020

Jun 2, 2020

AMWOLF CAPITAL CORP. (A Capital Pool Company) MANAGEMENT DISCUSSION AND ANALYSIS FOR THE NINE-MONTH PERIOD ENDED MARCH 31, 2020 (Expressed in Canadian Dollars)

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AmWolf Capital Corp. (A Capital Pool Company) Management Discussion and Analysis For the Nine-Month Period Ended March 31, 2020 (Expressed in Canadian dollars)

The Management Discussion and Analysis ("MD&A"), prepared on June 1, 2020 should be read in conjunction with the unaudited interim condensed financial statements and notes thereto for the nine months ended March 31, 2020, and the notes thereto of AmWolf Capital Corp. ("AmWolf" or the "Company") which were prepared in accordance with International Financial Reporting Standards.

This MD&A may contain forward-looking statements in respect of various matters including upcoming events. The results or events predicted in these forward-looking statements may differ materially from the actual results or events. The Company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

DESCRIPTION OF BUSINESS

AmWolf was incorporated under the Canada Business Corporations Act on April 23, 2018. The Company is in the process of identifying a suitable business and once identified or evaluated, to negotiate an acquisition or participation in a business subject to receipt of shareholder approval, if required, and acceptance by regulatory authorities.

The head office and the registered office of the Company are located at 19th Floor – 885 West Georgia Street, Vancouver, BC, V6C 3H4.

As at March 31, 2020, the Company has no business operations and the Company's principal purpose is the identification, evaluation and acquisition of assets, properties or businesses or participation therein subject, in certain cases, to shareholder approval and acceptance by the Exchange.

Additional information relating to the Company is on SEDAR at www.sedar.com.

QUALIFYING TRANSACTION

The Company intends to identify and evaluate businesses and assets with a view to completing a Qualifying Transaction. Any proposed Qualifying Transaction must be accepted by the TSX Venture Exchange ("TSXV" or "Exchange") and in the case of a Non-Arm's Length Qualifying Transaction is also subject to Majority of the Minority Approval in accordance with the CPC Policy. The Company is not specifically considering pursuing a company, asset or business in any specific business or industry sector, or in any particular geographical area, and the Company anticipates reviewing companies, assets and businesses in a broad range of industry sectors and geographical areas.

Until Completion of a Qualifying Transaction, the Company will not carry on any business other than the identification and evaluation of businesses or assets with a view to completing a potential Qualifying Transaction. With the consent of the Exchange, this may include the raising of additional funds in order to finance an acquisition. Except as described herein, the funds raised pursuant to this Offering and any subsequent financing will be utilized only for the identification and evaluation of potential Qualifying Transactions and not for any deposit, loan or direct investment in a potential acquisition.

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AmWolf Capital Corp.

(A Capital Pool Company)

Management Discussion and Analysis

For the Nine-Month Period Ended March 31, 2020

(Expressed in Canadian dollars)

SELECTED QUARTERLY FINANCIAL INFORMATION

Financial results	March 31, 2020	December 31, 2019	September 30, 2019	June 30, 2019	March 31, 2018
Net loss for the period	$ (28,331)	$ (27,295)	$ (12,472)	$ (23,013)	$ (7,009)
Comprehensive loss for the period	(28,331)	(27,295)	(12,472)	(23,013)	(7,009)
Basic and diluted loss per share	-	-	-	-	-
Balance sheet data
Cash	$ 173,410	$ 207,957	$ 233,014	$ 235,763	$ 13,525
Total assets	173,410	207,957	233,014	235,763	29,125
Shareholders' equity	152,369	180,699	207,995	223,198	6,906

RESULTS OF OPERATIONS

Three-month period ended March 31, 2020 compared to the three-month period ended March 31, 2019

The Company had a net loss of $28,331 (2019: $7,009) being an increase of $21,322, or 304%.

Included in the determination of operating loss is an increase of $11,850 (2019: $5,891) for accounting, $20 (2019: $18) for bank charges, $7,049 (2019: $Nil) for legal, $1,337 (2019: $Nil) for office costs, $1,831 (2019: $1,100) for transfer agent and filing fees, and $6,244 (2019: $Nil) for travel expenses.

Nine-month period ended March 31, 2020 compared to the nine-month period ended March 31, 2019

The Company had a net loss of $68,098 (2019: $66,475) being an increase of $1,623, or 2%.

Included in the determination of operating loss is an increase of $22,950 (2019: $16,916) for accounting, $94 (2019: $54) for bank charges, $2,573 (2019: $Nil) for communications, $27,179 ($25,267) for legal expenses, $1,337 (2019: $Nil) for office costs and $6,244 (2019: $Nil) for travel expenses. There was a decrease of and $7,721 (2019: $24,238) for transfer agent and filing fees.

Liquidity and Capital Resources

For the nine-month period ending March 31, 2020, the Company had a working capital surplus of $152,368 (March 31, 2019: $6,906), which only includes a cash balance of $173,410 (March 31, 2019: $13,525).

The Company has no business operations and the Company's principal purpose is the identification, evaluation and acquisition of assets, properties or businesses or participation therein subject, in certain cases, to shareholder approval and acceptance by the Exchange. Historical administrative activities have been funded through equity financing and the Company expects that it will continue to be able to utilize this source of financing until a Qualifying Transaction is completed; however, upon completion of the Qualifying Transaction additional capital may be necessary.

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AmWolf Capital Corp.

(A Capital Pool Company)

Management Discussion and Analysis

For the Nine-Month Period Ended March 31, 2020

(Expressed in Canadian dollars)

OFF-BALANCE SHEET ARRANGEMENTS

The Company has not entered into any off-balance sheet arrangements.

OUTSTANDING SHARE DATA

As of the date of this MD&A, the Company has 5,500,001 common shares issued and outstanding; 200,000 share options and 350,000 share purchase warrants convertible into common shares.

RELATED PARTY TRANSACTIONS

Related parties include the Board of Directors, close family members and enterprises, which are controlled by these individuals as well as certain persons performing similar functions.

Key management personnel compensation during the nine-month period ended March 31, 2020 is $NIL (2019: $NIL).

REMUNERATION

No salary, consulting, management fees or similar remuneration of any kind have, or may, be paid directly or indirectly to a related party of the Company or a related party of a QT.

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

• Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;
• Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and
• Level 3 – Inputs that are not based on observable market data.

The fair value of the Company's accounts payable approximates its carrying values. The Company's other financial instrument, being cash, is measured at fair value using Level 1 inputs.

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AmWolf Capital Corp.

(A Capital Pool Company)

Management Discussion and Analysis

For the Nine-Month Period Ended March 31, 2020

(Expressed in Canadian dollars)

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT (CONTINUED)

Financial risk management objectives and policies

The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board of Directors approves and monitors the risk management processes, inclusive of documented investment policies, counterparty limits, and controlling and reporting structures. The type of risk exposure and the way in which such exposure is managed is provided as follows:

i. 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's primary exposure to credit risk is on its cash account. Cash accounts are held with major banks in Canada. The Company has deposited its cash with a bank from which management believes the risk of loss is low.

ii. Liquidity risk:

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company's approach to managing liquidity is to ensure that it will have sufficient liquidity to meet liabilities when due. Accounts payable are due within the current operating period.

The Company has a sufficient cash balance to settle current liabilities.

iii. Market risk:

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. The Company is not exposed to market risk.

iv. Interest rate risk:

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk, from time to time, on its cash balances. Surplus cash, if any, is placed on call with financial institutions and management actively negotiates favorable market related interest rates.

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AmWolf Capital Corp.

(A Capital Pool Company)

Management Discussion and Analysis

For the Nine-Month Period Ended March 31, 2020

(Expressed in Canadian dollars)

APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS

Certain new standards, interpretations and amendments to existing standards have been issued by the IASB that are mandatory for future accounting periods. Some updates that are not applicable or are not consequential to the Company may have been excluded from the list below. The Company is evaluating any impact the standards noted below may have on the Company's financial statements and this assessment has not been completed.

Standards effective for annual periods beginning on or after January 1, 2019:

IFRS 16 Leases – IFRS 16 will be effective for accounting periods beginning on or after January 1, 2019. Early adoption will be permitted, provided the Company has adopted IFRS 15. This standard sets out a new model for lease accounting. The adoption of this standard is not expected to have a material impact on the Company's financial statements.

IFRIC 23 Uncertainty Over Income Tax Treatments – IFRIC 23 clarifies how to apply the recognition and measurement requirements in IAS 12 Income Taxes when there is uncertainty over income tax treatments. It is effective for annual periods beginning on or after January 1, 2019 with early adoption permitted. The adoption of this standard is not expected to have a material impact on the Company's financial statements.

SIGNIFICANT ACCOUNTING POLICIES

Stock-based compensation

The Company has a common share purchase option plan (the "Plan") for directors, officers, employees and consultants. The total number of options issued and outstanding at any time cannot exceed 10% of the issued and outstanding common shares of the Company unless shareholder and regulatory approvals are obtained. Options granted under the Plan have a maximum of ten-year term and are non-transferable. Unless otherwise determined by the Board of Directors, options vest immediately upon granting.

During the year ended June 30, 2018, the Company granted 200,000 stock options to certain directors and officers of the Company exercisable at a price of $0.10 per common share for a period of five years.

As at March 31, 2020, these 200,000 stock options remain outstanding and have a weighted average exercise price of $0.10 and a weighted average outstanding life of 3.24 years.

The Company recorded stock-based compensation expense of $18,000 during the year ended June 30, 2018 ($0.09 per stock option), which was determined using the Black-Scholes model and the following assumptions: Price at date of grant - $0.10; Exercise price - $0.10; Life of stock option – 5 years; Volatility – 140%, Risk-free rate – 1.94%; Dividend rate – 0%.

SUBSEQUENT EVENTS

Please refer to note 7 of the unaudited interim condensed financial statements for the nine-month period ended March 31, 2020.