The Hempshire Group, Inc. — Management Reports 2021

Feb 5, 2021

Hoist Capital Corp. (A Capital Pool Corporation)

Management’s Discussion and Analysis

For the Three Months Ended December 31, 2020 (In Canadian Dollars)

Hoist Capital Corp. Management’s Discussion and Analysis December 31, 2020 (Amounts in Canadian dollars)

This management discussion and analysis (“MD&A”) of Hoist Capital Corp. (“Hoist” or the “Company”) should be read in conjunction with Hoist’s audited annual financial statements for the year ended December 31, 2020. This MD&A is dated February 4, 2021.

Forward Looking Statements

This MD&A contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “objective”, “ongoing”, “may”, “will”, “project”, “should”, “believe”, “plans”, “intends” and similar expressions are intended to identify forward-looking information or statements.

Although Hoist believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Hoist cannot give any assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the technology industry in general as well as general economic conditions, stock market volatility; and the ability to access sufficient capital. We caution that the foregoing list of risks and uncertainties is not exhaustive.

In addition, the reader is cautioned that historical results are not necessarily indicative of future performance. The forward-looking statements contained herein are made as of the date hereof and the Company does not intend, and does not assume any obligation, to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise unless expressly required by applicable securities laws.

Certain information set out herein may be considered as “financial outlook” within the meaning of applicable securities laws. The purpose of this financial outlook is to provide readers with disclosure regarding reasonable expectations of Hoist as to the anticipated results of its proposed business activities for the periods indicated. Readers are cautioned that the financial outlook may not be appropriate for other purposes.

Q4-2020 MD&A

Hoist Capital Corp.

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Hoist Capital Corp. Management’s Discussion and Analysis December 31, 2020 (Amounts in Canadian dollars)

SELECTED INFORMATION

		Q4-2020		Q4-2019
Revenue	$	-	$	-
Net loss		(22,769)		(11,199)
Net loss per share		(0.00)		(0.01)
Total assets		492,155		559,876
Total liabilities		10,000		5,100

COMPANY BACKGROUND

Hoist Capital Corp. (“Hoist” or the “Company””) was incorporated under the Alberta Business Corporations Act on April 2, 2018. Hoist is a Capital Pool Corporation, as defined in the Policy 2.4 of the TSX Venture Exchange (the “Exchange”). The principal business of the Company will be the identification and evaluation of assets or businesses with a view to completing a Qualifying Transaction (“QT”). The Company has not commenced any operations and has no business assets. The Company is dependent upon its ability to identify, evaluate, and negotiate a business acquisition. Such an acquisition will be subject to the approval of regulatory authorities concerned and, in the case of a non-arm’s length transaction, of the majority of the minority shareholders.

The Company closed its IPO and began trading on August 14, 2018 under the symbol “HTE.P”. The proceeds raised from the issuance of share capital may only be used to identify and evaluate assets or businesses for future investment, with the exception that up to $210,000, may be used for costs other than evaluating businesses or assets. These restrictions apply until the completion of a QT by the Company, as defined under the policies of the Exchange. The Company is required to complete its QT within two years from the date the Company receives regulatory approval. On August 14, 2020, the Company passed the 24 month deadline and trading was halted (see Subsequent Event).

According to the Exchange, compensation to management, board members, or non-arm’s length parties is prohibited. The equity proceeds raised by the Company may only be used to identify and evaluate assets or businesses and obtain shareholder approval for a proposed QT, including valuations, technical assessments, fees for legal, accounting service, broker commissions and share issue costs.

The head office is 201 Edward Street, Victoria BC V9A 3E4 and the registered office of the Company is located at Suite 5100, 150 – 6th Avenue SW, Calgary, AB, T2P 3Y7.

Q4-2020 MD&A

Hoist Capital Corp.

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Hoist Capital Corp. Management’s Discussion and Analysis December 31, 2020 (Amounts in Canadian dollars)

FINANCIAL SUMMARY

	Q4-2020	Q4-2019
Revenue	$ -	$ -
Expenses	(22,769)	(11,199)
Net loss	$ (22,769)	$ (11,199)

Highlights during 2020

On February 14, 2020, the Company announced that it will not be proceeding with the proposed Qualifying Transaction announced in the press release issued on October 15, 2019. Hoist is evaluating other acquisition opportunities with a view to completing a Qualifying Transaction.

On August 14, 2020, the Company passed the 24 month deadline and trading was halted (see Subsequent Event).

SHARE INFORMATION

	Number	Stated Value
Issuance of common shares at $0.05 each (i)	7,200,000	$ 360,000
Issuance of common shares at $0.10 each (ii)	4,000,000	400,000
Share Issuance costs		(110,245)
Balance, December 31, 2020	11,200,000	$ 649,755

• (i) At incorporation, the Company issued 7,200,000 common shares at $0.05 per common share, which are subject to an escrow agreement. These will be held in escrow pursuant to the requirements of the Exchange and terms of escrow agreement and will be released from escrow in stages over a period of up to three years after the date of the Company receiving the final Exchange acceptance of the QT. All common shares acquired on exercise of stock options granted to directors and officers prior to the completion of a QT must also be deposited in escrow pursuant to the terms of the escrow agreement.

• (ii) Pursuant to the prospectus dated July 19, 2018, the Company offered to sell and issue 4,000,000 common shares at $0.10 per share for total gross proceeds of $400,000 for the initial public offering (“IPO”). The IPO closed and the symbol “HTE.P” began trading on August 14, 2018.

On May 14, 2018, the Company entered into an agreement with Canaccord Genuity Corp. (the “Agent”) to complete the IPO with a 10% commission on the gross proceeds raised. As part of the

Q4-2020 MD&A

Hoist Capital Corp.

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Hoist Capital Corp. Management’s Discussion and Analysis December 31, 2020 (Amounts in Canadian dollars)

agreement, the Agent was granted warrants to acquire 10% of the common shares issued in connection with the IPO at a price of $0.10 per common share exercisable for a period ending twenty-four months from the date the Company's common shares are listed on the Exchange (“Agent Warrants”). These Agent Warrants expired on August 14, 2020. In addition, the Company paid a corporate finance fee of $12,500 and reimbursed the Agent’s legal fees and other reasonable expenses incurred pursuant to the IPO.

Pursuant to the prospectus dated July 19, 2018, the Company offered to sell and issue 4,000,000 common shares at $0.10 per share for total gross proceeds of $400,000 for the IPO.

STOCK OPTIONS

On August 14, 2018, the Company granted 1,120,000 stock options to officers and directors. Each stock option, which expires five years from the date of grant, is entitled to acquire a common share of the Company at an exchange price of $0.10 per share each. All the options are exercisable immediately and the weighted average remaining life is 2.6 years.

The summary for stock options is as follows:

				Weighted	Weighted
			Number of Options	Average Exercise Price	Average Remaining Life
Granted			1,120,000	$ 0.10	2.6
Balance, December	31,	2020	1,120,000	$ 0.10	2.6

WARRANTS

On August 14, 2018, the company granted 400,000 Agent Warrants to the agent. Each warrant, which expires two years from the date of grant, is entitled to acquire a common share of the Company at an exchange price of $0.10 per share each. The Agent Warrants expired on August 14, 2020.

The summary for Agent Warrants is as follows:

				Weighted	Weighted
			Number of	Average	Average
			Warrants	Exercise Price	Remaining
					Life
Granted			400,000	$ 0.10
Expired			(400,000)
Balance, December	**31, **	2020	-	N/A	N/A

During the year ended December 31, 2020, the 400,000 warrants expired. The previously recorded warrant value of $11,500 remains in contributed surplus.

Q4-2020 MD&A

Hoist Capital Corp.

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Hoist Capital Corp. Management’s Discussion and Analysis December 31, 2020 (Amounts in Canadian dollars)

LIQUIDITY

During 2018, the Company had share issuances totalling $760,000. As of December 31, 2020, Hoist had $491,437 of cash remaining for purposes of sourcing a QT.

RISK AND UNCERTAINTIES

The following information describes certain significant risks and uncertainties inherent in the Company's business. This section does not describe all risks applicable to Hoist, its industry or its business, and it is intended only as a summary of certain material risks. If any of such risks or uncertainties actually occurs, the Company's business, financial condition or operating results could be harmed substantially and could differ materially from the plans and other forward-looking statements included in this MD&A.

Commodity Prices and World Financial Markets

Recent market events and conditions, including disruptions in the international credit markets and other financial systems and the American and European sovereign debt levels, have caused significant volatility in commodity prices. These events and conditions have caused a decrease in confidence in the broader global credit and financial markets and have created a climate of greater volatility, less liquidity, widening of credit spreads, lack of price transparency, increased credit losses and tighter credit conditions. Notwithstanding various actions by governments, concerns about the general condition of the capital markets, financial instruments, banks, investment banks, insurers and other financial institutions have negatively impacted credit markets and caused stock markets to experience significant volatility. While there are signs of economic recovery, these factors have negatively impacted valuations and are likely to continue to impact the performance of the global economy going forward. These factors may impact the Hoist's future ability to obtain equity, debt or bank financing on terms favourable to the Company, or at all.

FINANCIAL RISK MANAGEMENT

a) Fair value

The fair value of a financial instrument is the estimated amount that the Company would receive or pay to settle the financial assets and liabilities at the reporting date. The fair value of cash, accounts receivable, and related party loans approximates carrying amounts due to the short-term nature.

b) Risk management framework

The Company employs risk management strategies and policies to ensure that any exposure to risk is in compliance with the Company's business objectives and risk tolerance levels. While the directors have overall responsibility for the establishment and oversight of the Company's risk management framework, management has the responsibility to administer and monitor these risks.

Q4-2020 MD&A

Hoist Capital Corp.

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Hoist Capital Corp. Management’s Discussion and Analysis December 31, 2020 (Amounts in Canadian dollars)

• c) Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations.

Cash consists of bank balances. The Company manages the credit exposure related to cash by selecting financial institutions with high credit ratings. Given these credit ratings, management does not expect any counterparty to fail to meet its obligations.

• d) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they are due. The Company's approach to managing liquidity is to ensure it will have sufficient liquidity to meet its liabilities when due. The Company's ongoing liquidity will be impacted by various external events and conditions.

OFF BALANCE SHEET ARRANGEMENTS

As at the date hereof, there are no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the results of operations or financial conditions of the Company, including, without limitation, such considerations as liquidity and capital resources.

CAPITAL RESOURCES

The Company’s objective when managing capital is to maintain its ability to continue as a going concern, in order to provide returns for the shareholders and benefits for other stakeholders. The Company includes shareholders’ equity, comprised of issued common shares, and contributed surplus in the definition of capital.

The Company's primary objective, with respect to its capital management, is to ensure that it has sufficient cash resources to fund the identification and evaluation of a QT. To secure the additional capital necessary to pursue these plans, the Company may attempt to raise additional funds through the issuance of equity or by securing strategic partners.

The proceeds raised from the issuance of common shares may only be used to identify and evaluate assets or businesses for future investment, with the exception that not more than the lesser of 30% of the gross proceeds from the issuance of shares or $210,000 may be used to cover prescribed costs of issuing the common shares or administrative and general expenses of the Company. These restrictions apply until completion of the QT by the Company as defined under the Exchange policy 2.4.

RELATED PARTY TRANSACTIONS

The Company engaged a law firm, of which an officer is a partner of, to provide legal and advisory services. An amount of $36,372 related to these legal fees have been recorded for the year ended December 31, 2020 (2019 - $9,249), which are included in general and administrative expense.

Q4-2020 MD&A

Hoist Capital Corp.

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Hoist Capital Corp. Management’s Discussion and Analysis December 31, 2020 (Amounts in Canadian dollars)

There was no remuneration paid to management personnel during the year ended December 31, 2020 (2019 - nil). According to the Exchange, compensation to management, board members, or non-arm’s length parties is prohibited.

Transactions involving related parties are in the normal course of business.

CRITICAL ACCOUNTING ESTIMATES

Management of Hoist is responsible for the accounting estimates included in the financial statements. Estimates, and the related judgments and assumptions, are based on management’s knowledge of the business and past experience. Certain accounting estimates are particularly sensitive because they involve a significant degree of judgment and may have a range of possible outcomes.

FINANCIAL INSTRUMENTS

Financial assets and liabilities, including derivatives, are recorded on the statement of financial position when the Company becomes a party to the financial instrument or derivative contract.

The Company classifies its financial assets and financial liabilities in the following measurement categories i) those to be measured subsequently at fair value (either through other comprehensive income or through profit or loss) and ii) those to be measured at amortized cost. The classification of financial assets depends on the business model for managing the financial assets and the contractual terms of the cash flows. Financial liabilities are classified as those to be measured at amortized cost unless they are designated as those to be measured subsequently at fair value through profit or loss (irrevocable election at the time of recognition). For assets and liabilities measured at fair value, gains and losses are either recorded in profit or loss or other comprehensive income.

The Company reclassifies financial assets when and only when its business model for managing those assets changes. Financial liabilities are not reclassified.

The Company’s cash and accounts receivable are classified as financial assets measured at amortized cost using the effective interest method. Accounts Payable is measured at amortized cost.

All financial instruments are required to be measured at fair value on initial recognition, plus, in the case of a financial asset or liability not at fair value through profit and loss, transaction costs that are directly attributable to the acquisition or issue of the financial asset or liability. Transaction costs of financial assets and financial liabilities carried at fair value through profit or loss are expensed in profit and loss. Financial assets and financial liabilities with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

Financial assets that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortized cost at the end of the subsequent accounting periods. All other financial assets are measured at their fair values at the end of the subsequent accounting periods, with any changes taken through profit and loss or other

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Hoist Capital Corp. Management’s Discussion and Analysis December 31, 2020 (Amounts in Canadian dollars)

comprehensive income. Fair value changes due to credit risk for liabilities designated at fair value through profit and loss would generally be recorded in other comprehensive income.

The Company assesses all information available, including on a forward-looking basis, the expected credit losses associated with its financial assets carried at amortized cost. The Company will apply the simplified approach which requires expected lifetime credit losses to be recognized from initial recognition of any accounts receivables.

PROPOSED TRANSACTIONS

As at the date of this MD&A, the Company does not have any proposed asset or business acquisition or disposition.

DISCLOSURE OF OUTSTANDING SECURITY DATA

As at the date of this MD&A, the Company has an aggregate of 11,200,000 Common Shares issued and outstanding.

SIGNIFICANT ACCOUNTING POLICES

The financial statements have been prepared on a going concern basis in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board. Refer to the Note 3 of the financial statements.

The financial statements have been prepared on a historical cost basis except for certain financial instruments which are measured at fair value. The presentation and functional currency of the Company is the Canadian dollar.

In the opinion of the Company’s management, all adjustments considered necessary for a fair presentation have been included.

QUARTERLY RESULTS

	Q1-2019	Q2-2019	Q3-2019	Q4-2019	Q1-2020	Q2-2020	Q3-2020	Q4-2020
Revenue	$ -	$ -	$ -	$ -	$ -	$ -	$ -	$ -
Net loss	(14,237)	(9,332)	(4,308)	(11,199)	(44,355)	(4,809)	(688)	(22,769)
Net loss per share	(0.00)	(0.00)	(0.00)	(0.00)	(0.01)	(0.00)	(0.00)	(0.01)

Q4-2020 MD&A

Hoist Capital Corp.

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Hoist Capital Corp. Management’s Discussion and Analysis December 31, 2020 (Amounts in Canadian dollars)

COVID-19

On March 11, 2020, the World Health Organization assessed the coronavirus outbreak (COVID-19) as a pandemic. In Canada, the Government of Alberta declared a provincial state of public health emergency as per the Province of Alberta’s Public Health Act on March 17, 2020 with respect to COVID-19. Due to the local health restrictions in place, this has limited the Company's ability to network at conferences, and ultimately impacted the Company's ability to complete the Qualifying Transaction. The extent to which COVID-19 will continue to impact the Company's results will depend on future developments, which are highly uncertain and cannot be predicted and dependent upon new information which may emerge concerning the severity of COVID-19 and actions taken to contain this or its impact, among others.

SUBSEQUENT EVENT

Policy 2.4 for Capital Pool Companies was updated January 1, 2021, where the Company has the option to be governed by the Former Policy or elect to comply with transition provisions. Management and the board members are reviewing the TSX Venture Exchange guidelines and intend to commence the transition process, which requires a shareholder vote on adoption of the new CPC policy by June 30, 2021 otherwise the Exchange will initiate steps to delist the Company in accordance with the former policy.

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