UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 10-K
(Mark One)
[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year endedMay 31, 2019
[ ]TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from[ ] to [ ]
Commission file number000-53767
Wolverine Technologies Corp. (Exact name of registrant as specified in its charter)
Nevada
98-0569013
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
#55-11020-Williams Road, Richmond, British Columbia, Canada
V7A 1X8
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code:778.297.4409
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Name of Each Exchange On Which Registered
N/A
N/A
Securities registered pursuant to Section 12(g) of the Act:
N/A
(Title of class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 the Securities Act.
Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act
Yes [ ] No [X]
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the last 90 days.
Yes [x] No [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-K (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes [x] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
[ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ]
Accelerated filer [ ]
Non-accelerated filer [x]
Smaller reporting company [x]
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]
The value of Common Stock held by non-affiliates of the Registrant on November 30, 2018 was $2,409,762 based on a market price of $0.0052 (per share. For purposes of this computation, all executive officers and directors have been deemed to be affiliates. Such determination should not be deemed to be an admission that such executive officers and directors are, in fact, affiliates of the Registrant.
Indicate the number of shares outstanding of each of the registrant’s classes of common stock as of the latest practicable date.
499,970,993 shares of common stock issued & outstanding as of September 13, 2019.
This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States generally accepted accounting principles.
In this annual report, unless otherwise specified, all dollar amounts are expressed in United States Dollars and all references to “common shares” refer to the common shares in our capital stock.
As used in this annual report, the terms “we”, “us”, “our company”, “Wolverine”, mean Wolverine Technologies Corp., a Nevada corporation, unless otherwise indicated.
Corporate History
Our company was incorporated in the State of Nevada on February 23, 2006 and is quoted on the OTC Pink under the symbol WOLV.
Since we began operations in 2006, the Company has been focused primarily on the exploration for and development of base and precious metal properties located in North America. In February, 2007, we acquired a right to earn a 90% interest in approximately 520 claims through a combination of an upfront cash payment of $34,000, an upfront share payment of 34,000,000 common shares of Wolverine, and by making exploration expenditure commitments totaling $600,000 over three years. From 2007 to the present, we spent approximately US$710,757 to earn our 90% interest in the Cache River Property; Shenin Resources Inc. maintains a 10% carried interest in the project.
We have not yet determined whether the Cache River Property contain mineral reserves that are economically recoverable.
Our Current Business
We are an exploration stage mining company engaged in the identification, acquisition, and exploration of metals and minerals with a focus on base and precious metals. Our current operational focus is to raise sufficient funds to continue exploration activities on our property in Labrador, Canada, known as the Cache River Property. We are not currently conducting any exploration on the Cache River Property. We intend to conduct further exploration activities on the Cache River when financing is available. We expect to review other potential exploration projects from time to time as they are presented to us.
On April 19, 2016, Wolverine entered into a Share Purchase Agreement with our Director, David Chalk, pursuant to which we have agreed to issue in a private placement 400,000,000 shares of our common stock in consideration for one-third of the net proceeds that Mr. Chalk may realize from the sale of Mr. Chalk’s 15% equity interest in Decision-Zone Inc., a privately held cyber-security software company based in Ontario, Canada. The Agreement is subject to our Company increasing its authorized capital to allow for the issuance of the consideration shares. As of the date of this filing, the agreement has not yet closed.
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Our business is conducted by independent contractors which include our officers and directors, among others. As of May 31, 2019, the company had three consultants PubCo Services Inc. (Richard Haderer), Texada Consulting Inc. (Bruce Costerd), and David Chalk engaged on a non-exclusive, part time basis, and several other IR, administrative, and accounting consultants who are engaged on an intermittent, as needed basis. Our business plan does not anticipate that we will hire a large number of employees or that we will require extensive office space. We have to date, and plan to continue to acquire most of the industry and geological expertise we require through third party contractual relationships with other companies, which will act as operators of our various interests. Although this exposes us to certain risks on behalf of those operators, it also allows us to participate in the often unique experience and knowledge that local persons have related to certain properties.
The Company’s objectives for the next twelve months include:
•
With respect to the Cache River Property, a program of prospecting, followed by trenching (if warranted) is recommended to field check all remaining IP anomalies prior to outlining additional diamond drill holes;
•
To complete the Share Purchase Agreement with David Chalk.
We have suffered recurring losses from operations and anticipate generating losses for the foreseeable future. The continuation of our business is dependent upon obtaining further financing, completing a successful program of exploration and/or development, and, finally, achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.
There are no assurances that we will be able to obtain further funds required for our continued operations. As noted herein, we are pursuing various financing alternatives to meet our immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations.
Mineral Properties
Summary
The Company has one current mineral project known as the Cache River Property. We have not yet determined if the Cache River Property contains mineral reserves that are economically recoverable.
Cache River Property –Labrador, Canada
Technical Report
Wolverine commissioned G Timothy Froude, B.Sc., P. Geo., a licensed member of the Professional Engineers and Geoscientists of Newfoundland and Labrador to complete a Technical Report on the Cache River Property. The Technical Report, a report compliant with National Instrument 43-101, is dated March 18, 2015 and has been filed on SEDAR at www.sedar.com in conjunction with this Prospectus. The following information concerning the Cache River Property is derived from the Technical Report. The scientific and technical information contained in this 10-K relating to the Cache River Property is supported by the Technical Report, which is subject to certain assumptions, qualifications, and procedures described therein.
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Property Description and Location
The Cache River Property is located about 120 kilometres (75 miles) west of Goose Bay, Labrador, a small town of 9,000 people on the Atlantic Coast of northern Canada. It takes approximately one and a half to two hours to drive to the Cache River Property from Goose Bay.
The Cache River Property lie within NTS map sheets 13E/01 and 13F/04 and extends approximately from 53o 11’ 08’’ N latitude and 62o 11’ 56’’ W longitude to 53o 06’ 34’’ N latitude and 61o 57’ 02’’ W longitude.
Goose Bay features an international airport. From there, the Cache River Property can be accessed directly from the Trans-Labrador Highway. The Cache River Property are easily accessible by the Trans-Labrador Highway, which runs through the central portion of the Cache River Property. The Trans-Labrador Highway is a well maintained Provincial Highway with a gravel surface. There are no gas stations between Goose Bay and Churchill Falls, the next major community located 290 kilometres (180 miles) to the west of Goose Bay and 160 kilometres (105 miles) to the west of the Labrador Claims.
Access to the Cache River Property is possible for most of the year given the proximity to Goose Bay and the fact that the highway is well maintained. Airborne geophysical surveys are best performed either in late winter (March-April) or during the summer (June-August). Ground geophysical surveys should be scheduled to avoid freeze-up (November-December) and breakup (late April to early June). Ground geological surveys are best conducted with no snow cover (mid June to mid November).
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Figure 1. Cache River Property Location
Description of Claims
The Cache River Property consists of a total of 6 mineral claims held under a single Licence (13472M) as described in Table 1 below. A layout of the claims is shown in Figure 2 below.
Table 1. Summary of the Claims.
Number
# of Claims
NTS
Area
Good to Date
(hectares)
013472M
6
13F/04
150
05-17-2020
In the Province of Newfoundland and Labrador a mineral claim consists of a 25 hectare square measuring 500 meters per side. A single license can contain from one to 256 claims. The claims are unencumbered and in good standing and there are no third party conditions which affect the claims other than conditions defined by the Province of Newfoundland and Labrador described below. The claims together make up an aggregate area of 2,825 hectares. We have no insurance covering the claims. Management believes that no insurance is necessary since the claims are unimproved and contain no buildings or improvements.
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Figure 2 Cache River Property Claims Location
There is no assurance that a commercially viable mineral deposit exists on the Cache River Property. Further exploration will be required before an evaluation as to the economic feasibility of the Cache River Property is determined. Our consulting geophysicist has written a report and provided us with recommendations of how we should explore the property. Until management can validate otherwise, the property is without known reserves.
Conditions to Retain Title to the Cache River Property
The claims are currently in good standing with the Department of Natural Resources and no exploration expenditures are required until May 17, 2020. The fifteen year renewal fee of $50 per claim is due on May 17, 2022.
History of Labrador and the Cache River Property
According to the report prepared by our consulting geophysicist, the geologic setting is based on information available from the Geological Survey of Canada (DNR Open File 013F/0055) and the Government of Newfoundland and Labrador (Open File 013F/0061). The regional geology as described by both government reports contains very little detail because the Trans-Labrador Highway was under construction during much of the mapping initiative, opening in 1992.
Also, the area has seen only limited geologic mapping on a regional scale, in part due to the remoteness of the area and the timing of the Federal and Provincial mapping initiatives that preceded construction of the Trans-Labrador Highway. The mapped geology within the area is part of a regional 1:500,000 compilation undertaken by the Newfoundland and Labrador Provincial Government during the early 1990’s. The survey area is located outside of the area of detailed mapping, in which case geologic mapping has been taken from previous publications, most notably a Federal Government regional mapping program from 1990-1994. During the period 1990 to 1994 the area was regionally mapped by the Geological Survey of Canada and by the Mines and Energy Branch of the Newfoundland and Labrador Government. Geologic mapping was performed on a very regional scale, due in part to the remoteness of the area (away from the Trans-Labrador Highway) and the lack of outcrop. In summary there is very little geological mapping within the survey area and there has never been a detailed mapping program.
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Exploration History
In October, 2007 we completed an airborne survey of the Cache River Property. The airborne survey identified 8 conductive targets which warranted ground follow-up.
In the fall of 2009 we carried out geological reconnaissance along with prospecting and sampling on three of our eleven licenses on the Cache River Property. Some, but not all of the known mineralized zones were sampled as this was more of a reconnaissance exercise until a more systematic program is put in place. In addition, to the usual base metal sampling, scintillometer surveys were done on the exposed rock cuts along the highway and selected areas of the southern portions of the three licenses.
Work on the property during June of 2010 consisted of prospecting, sampling and geological reconnaissance on and around electro-magnetic and radiometric anomalies that were identified during the 2007 airborne survey. Earlier sampling on rock cuts along the highway had shown copper and gold values that warranted further exploration.
Continued prospecting during July 2010 on other areas of the property has revealed additional outcrops containing malachite alteration on the western end of the property near anomaly number one.
In August and September 2010 a follow up program of diamond drilling was contracted to an Ontario, Canada, drilling company and a total of 522.5 meters was drilled in 6 holes.
In November and December 2010 an induced polarization (IP) Survey was completed on two grids located on the property. Grid 1 consisted of 19, 1.6 km lines oriented at 360 degrees. 5 of those lines were cut short (1.2 km) due to a large lake that was not completely frozen at the time of the survey and was considered unsafe. A 1.8 km base line oriented at 090 Degrees crossed the centre of the grid. Grid 2 consisted of 13 lines that varied from ~750 m, in the south to 1500 m in the north. The lines were oriented at 090 degrees with a baseline 1.2 km long, oriented at 360 Degrees.
In June of 2011 we conducted a prospecting program which marked the eleven drill locations in the anomalous areas which were identified by the Induced Polarization Survey completed in late 2010.
In the fall of 2011 a follow up program of diamond drilling was contracted to an Ontario, Canada drilling company and a total of 271 meters was drilled in 4 holes.
In the fall of 2012 a follow up program of diamond drilling consisting of two holes was drilled by Innu-Cartwright Drilling Limited Partnership.
Exploration Results
Disseminated mineralization consisting mainly of pyrite, pyrrhotite and chalcopyrite were detected in several areas of the property. Mineralization was first noted in roadside rock cuts, samples were taken but the GPS location was not recorded as none were available, only a generalized location within several metres was given to the geologist.
After we acquired the property an airborne survey was completed and several anomalies were detected. Wolverine then engaged a geologist to supervise the prospecting, trenching and drilling program. Prospecting revealed other zones of disseminated mineralization, mainly in rock cuts along the highway which had the best exposure as most of the property is covered by marsh and forested overburden.
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Diamond drilling on two airborne anomalous areas revealed disseminated mineralization in four of the six drill holes.
We then conducted an induced polarization (IP) survey on two selected areas that detected 23 anomalous zones.
Of the four holes drilled in the fall of 2011, two had minor indications of sulphide mineralization with magnetite while one contained disseminated mineralization consisting of blebs of chalcopyrite and pyrite for approximately 37 metres (121 feet).
The two anomalies drilled in the fall of 2012 at approximately 50 degree angles did not intersect sufficient amounts of mineralization to account for the magnitude of that picked up by the IP survey. There are very minor amounts of pyrite and the rock is slightly magnetic with only background radioactivity.
Quality Assurance/Quality Control
All drill core samples were cut lengthwise with a rock saw. Half of the sample was retained for future reference and the other was sent by Canada Post, insured and delivered to the laboratory. Sample sections were measured by depth markers in the core boxes and confirmed by the geologist. Results were mailed back to the geologist and confirmed by the chief chemist’s signature. A portion of the laboratory sample was retained at the laboratory for a period of one year.
Surface bedrock sample sites were selected by geologists and prospectors. GPS readings recorded the locations. Samples were stored in new industrial plastic sample bags with the sample number which was also recorded in note books. Samples were again sent by Canada Post with the same procedure noted above.
Present Condition of the Cache River Property
The mineralization found to date on the Cache River Propertyconsists primarily of copper and gold mineralization in sulphide with associated pyrite (a non-economic sulphide mineral). There are also a number of malachite veins (and malachite stained outcrops).
The country rocks have been identified as meta-sedimentary gneiss. Locally, gabbros and diorites have been identified by surface prospecting.
Based on the mineralization and the known geologic rock types, there appear to be three possible deposit types that could host mineralization within the Cache River Property; 1) porphyry copper-gold in sulphide, 2) volcanogenic (Cu-Pb-Zn) massive sulphide, or 3) magmatic nickel-copper sulphide.
Copper-gold (Cu-Au) deposits occur within sedimentary rocks when a stock intrudes into the sediments and heats up the ground water. The heated fluids pick up copper and other metals as they percolate through fractures opened up within the sediments. Mineralization is mostly disseminated, but significant veins of chalcopyrite, rich in gold, are also present. The presence of chalcopyrite in meta-sediment and malachite staining are excellent indicators for a copper-gold system.
VMS deposits are commonly formed by deposition of hot metals into seawater from volcanic vents on the seafloor. The main metals include copper, zinc, lead, gold and silver. Within the Cache River Property there are no mapped volcanic rocks, although the known mineralization has been found within gabbro and diorite.
Magmatic nickel-copper sulphide deposits are hosted in mafic to ultramafic rocks such as gabbro, norite, and troctolite. Other rock types commonly associated with these host rocks are diorites and anorthosites. Within the Cache River Property chalcopyrite mineralization was identified in a gabbro and separately associated with a diorite dyke.
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The Cache River Property are almost completely covered by overburden and tree cover. Rock outcrops are best observed along the highway where they have been uncovered.
The climate within the area is typically northern with short hot summers and long cold winters. Winter temperatures can range from -15o C to -35o C and occasionally fall to below -42o C.
There is no equipment, infrastructure or electricity currently on the property.
There have been no previous airborne surveys in this area that are within 35 kilometers (22 miles) of the Cache River Property. The area would have been covered as part of the Federal Government regional airborne magnetic survey, but this survey would not have the sufficient resolution to identify magnetic units less than 1 kilometer in size and could not detect any conductive mineralization.
Geology of the Cache River Property
Geologically the area is mapped as early to late Proterozoic meta-sediments that have been metamorphosed to gneisses. Major gabbroic and anorthositic intrusives have intruded the gneisses several kilometers to the east and local gabbros and diorites occur throughout the area along with several quartz veins. Large tourmaline crystals have also been identified on the property. The area has little outcrop and is covered by overburden, generally sand and gravel. Spruces trees are abundant but are not very tall.
The presence of several copper showings and malachite staining in the limited outcrop suggests that a mineralizing event of copper and gold has intruded into the meta-sedimentary rocks. The nature of the mineralization is likely to be copper veins and disseminations with associated gold. It is also possible that magmatic nickel and copper mineralization could be present with associated platinum group elements within gabbros.
Environmental Liabilities
Management is not aware of any environmental liabilities, which may have effect on the Company. The Company intends to fully comply with all environmental regulations.
Recommendations
The work completed to date on the Cache River property has identified an area that could host significant copper and gold mineralization in a previously unexplored area. A program of prospecting, followed by trenching (if warranted) is recommended to field check all remaining IP anomalies prior to outlining additional diamond drill holes. Drill holes will be prioritized based on the results of the ground surveys noted above. A proposed $100,000 program is recommended to complete the entire program including 300 meters of diamond drilling
Field Costs (transportation, accommodation, fuel, etc.)
$
7,500
Trenching
$
7,500
Diamond Drilling – 300 meters all inclusive
$
42,000
Subtotal:
$
88,500
Contingency ~ 13%
$
11,500
Phase 1 Total
$
100,000
Subsidiaries
We do not have any subsidiaries.
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Intellectual Property
We do not own, either legally or beneficially, any patent or trademark.
REPORTS TO SECURITY HOLDERS
We are not required to deliver an annual report to our stockholders but will voluntarily send an annual report, together with our annual audited financial statements upon request. We are required to file annual, quarterly and current reports, proxy statements, and other information with the Securities and Exchange Commission. Our Securities and Exchange Commission filings are available to the public over the Internet at the SEC’s website athttp://www.sec.gov.
The public may read and copy any materials filed by us with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. We are an electronic filer. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The Internet address of the site ishttp://www.sec.gov.
Item 1A.
Risk Factors
Much of the information included in this annual report includes or is based upon estimates, projections or other “forward looking statements”. Such forward looking statements include any projections and estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.
Such estimates, projections or other “forward looking statements” involve various risks and uncertainties as outlined below. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other “forward looking statements”.
If we do not obtain additional financing, the business plan will fail.
Our current operating funds are insufficient to complete the next phases of our proposed exploration program on our Labrador mineral claims. We will need to obtain additional financing in order to complete our business plan and our proposed exploration program. Our business plan calls for significant expenses in connection with the exploration of the Labrador Claims. We have not made arrangements to secure any additional financing.
Because we have only recently commenced business operations, we face a high risk of business failure and this could result in a total loss of your investment.
We are not currently conducting any exploration and are in the initial stages of exploration of the Labrador Claims, and thus have no way to evaluate the likelihood whether our company will be able to operate our business successfully. Our Company was incorporated on February 23, 2006 and to date we have been involved primarily in organizational activities, obtaining financing and preliminary exploration of the Labrador Claims. We have not earned any revenues and we have never achieved profitability as of the date of this annual report. Potential investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises. The likelihood of success must be considered in the light of problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that our company plans to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration and additional costs and expenses that may exceed current estimates. We have no history upon which to base any assumption as to the likelihood that its business will prove successful, and we can provide no assurance to investors that our company will generate any operating revenues or ever achieve profitable operations. If our company is unsuccessful in addressing these risks its business will likely fail and you will lose your entire investment in this offering.
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Because our company has only recently commenced business operations, we expect to incur operating losses for the foreseeable future.
Our company has never earned any revenue and our company has never been profitable. Prior to completing exploration on the Labrador Claims, we may incur increased operating expenses without realizing any revenues from the Labrador Claims, this could cause our company to fail and you will lose your entire investment in this offering.
If we do not find a joint venture partner for the continued development of our mineral claims, we may not be able to advance exploration work.
If the results of the exploration program are successful, we may try to enter into a joint venture agreement with a partner for the further exploration and possible production of the Labrador Claims. Our company would face competition from other junior mineral resource exploration companies who have properties that they deem to be attractive in terms of potential return and investment cost. In addition, if our company entered into a joint venture agreement, our company would likely assign a percentage of our interest in the Labrador Claims to the joint venture partner. If our company is unable to enter into a joint venture agreement with a partner, our company may fail and you may lose your entire investment in this offering.
Because of the speculative nature of mineral property exploration, there is substantial risk that no commercially viable deposits will be found and our business will fail.
Exploration for base and precious metals is a speculative venture involving substantial risk. We can provide investors with no assurance that the Labrador Claims contain commercially viable mineral deposits. The exploration program that our company will conduct on the Labrador Claims may not result in the discovery of commercial viable mineral deposits. Problems such as unusual and unexpected rock formations and other conditions are involved in base and precious metal exploration and often result in unsuccessful exploration efforts. In such a case, we may be unable to complete our business plan and you could lose your entire investment.
Because of the inherent dangers involved in base and precious metal exploration, there is a risk that our company may incur liability or damages as we conducts our business.
The search for base and precious metals involves numerous hazards. As a result, our company may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or against which we may elect not to insure. Our company currently has no such insurance nor do we expect to get such insurance in the foreseeable future. If a hazard were to occur, the costs of rectifying the hazard may exceed our asset value and cause our company to liquidate all of our assets resulting in the loss of your entire investment.
Because access to our company’s mineral claims is often restricted by inclement weather, we will be delayed in exploration and any future mining efforts.
Access to the Labrador mineral claims is restricted to the period between May and November of each year due to snow in the area. As a result, any attempts to visit, test, or explore the property are largely limited to these few months of the year when weather permits such activities. These limitations can result in significant delays in exploration efforts, as well as mining and production in the event that commercial amounts of minerals are found. Such delays can result in our company’s inability to meet deadlines for exploration expenditures as defined by the Province of Newfoundland and Labrador. This could cause the business venture to fail and the loss of your entire investment unless our company can meet the deadlines.
As our company undertakes exploration of the Labrador Claims, we will be subject to compliance with government regulation that may increase the anticipated time and cost of its exploration program.
There are several governmental regulations that materially restrict the exploration of minerals. Our company will be subject to the mining laws and regulations as contained in the Mineral Act of the Province of Newfoundland and Labrador as we carry out our exploration program. We may be required to obtain work permits, post bonds and perform remediation work for any physical disturbance to the land in order to comply with these regulations. While our company’s planned exploration program budgets for regulatory compliance, there is a risk that new regulations could increase our time and costs of doing business and prevent our company from carrying out our exploration program.
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Because market factors in the mining business are out of our control, our company may not be able to market any minerals that may be found.
The mining industry, in general, is intensely competitive and we can provide no assurance to investors even if minerals are discovered that a ready market will exist from the sale of any base or precious metals found. Numerous factors beyond our control may affect the marketability of base or precious metals. These factors include market fluctuations, the proximity and capacity of natural resource markets and processing equipment, government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in our company not receiving an adequate return on invested capital and you may lose your entire investment.
Because our company holds a significant portion of our cash reserves in United States dollars, we may experience weakened purchasing power in Canadian dollar terms.
Our company holds a significant portion of our cash reserves in United States dollars. Due to foreign exchange rate fluctuations, the value of these United States dollar reserves can result in both translation gains or losses in Canadian dollar terms. If there was to be a significant decline in the United States dollar versus the Canadian Dollar, our US dollar purchasing power in Canadian dollars would also significantly decline. Our company has not entered into derivative instruments to offset the impact of foreign exchange fluctuations.
Our auditors have expressed substantial doubt about our company’s ability to continue as a going concern.
The accompanying financial statements have been prepared assuming that our company will continue as a going concern. As discussed in Note 1 to the May 31, 2019 financial statements, our company was incorporated on February 23, 2006, and has never generated any revenue, has a working capital deficiency, and has incurred operating losses since inception. As a result, our company’s auditor has expressed substantial doubt about the ability of our company to continue as a going concern. Continued operations are dependent on our ability to complete equity or debt financings or generate profitable operations. Such financings may not be available or may not be available on reasonable terms. Our financial statements do not include any adjustments that may result from the outcome of this uncertainty.
Our stock is a penny stock. Trading of our stock may be restricted by the SEC’s penny stock regulations which may limit a stockholder’s ability to buy and sell our stock.
Our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.
14
OTC Markets has placed a "Shell Risk" identifier on the Company's page on OTC Markets website.
OTC Markets has placed a "Shell Risk" identifier on the Company's page on OTC Markets website. The Company is not in agreement that it is a "Shell Company" as defined in Rule 12b-2 of the Exchange Act due to the operations conducted by the Company in the past few years in the technology sector, and that such operations have been more than nominal. If advisable or beneficial for the Company or its shareholders, the Company may elect to pursue the appeal process with OTC Markets to have the "Shell Risk" identifier removed.
Item 1B.
Unresolved Staff Comments
None.
Item 2.
Properties
We do not own any real property. Our principal business offices are located at #55-11020 Williams Road, Richmond British Columbia, Canada, V7A 1X8 at a cost of CDN $1,000 per month. We believe that our current lease arrangements provide adequate space for our foreseeable future needs.
Item 3.
Legal Proceedings
Other than as set out below, our company is not a party to any pending legal proceeding and no legal proceeding is contemplated or threatened as of the date of this annual report.
Item 4.
Mine Safety Disclsures
Not applicable.
PART II
Item 5.
Market for Common Equity and Related Stockholder Matters
Public Market for Common Stock
Our stock is quoted on the OTCPink under the symbol WOLV.
Stockholders of Our Common Shares
As of the date of this annual report, we have 215 registered shareholders.
Stock Option Grants
No stock options were granted during the year ended May 31, 2019.
Warrants
We have not issued and do not have any outstanding warrants to purchase shares of our common stock.
15
Dividends
There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, do prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:
1.
we would not be able to pay our debts as they become due in the usual course of business; or
2.
our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of shareholders who have preferential rights superior to those receiving the distribution.
We have not declared any dividends, and we do not plan to declare any dividends in the foreseeable future.
Securities Authorized for Issuance Under Equity Compensation Plans
On May 28, 2010 our directors approved the adoption of our 2010 Stock Plan which permits our company to issue up to 5,147,250 shares of our common stock, and 5,147,250 options to acquire shares of common stock, to directors, officers, employees and consultants of our company upon the grant of stock or the exercise of stock options granted under the 2010 Plan. All of the stock options granted under the 2010 Stock Plan have expired unexercised.
Transfer Agent
Our common shares are issued in registered form. Empire Stock Transfer, Inc. Telephone: (702) 818-5898; Facsimile: (702) 974-1444 is the registrar and transfer agent for our common shares.
As of September 13, 2019 we have 215 registered stockholders and 499,970,993 shares of common stock outstanding.
Purchase of Equity Securities by the Issuer and Affiliated Purchasers
We did not purchase any of our shares of common stock or other securities during the year ended May 31, 2019.
Recent Sales of Unregistered Securities
On October 18, 2018, we issued 17,000,000 shares of our common stock for proceeds of $66,328 (CDN $85,000) received in the prior year from a private placement at a purchase price of $0.004 (CDN $0.005) . We have issued all of the shares to two (2) non-US persons (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933.
On October 18, 2018, we issued 6,800,000 shares of our common stock for proceeds of $25,997 (CDN $34,000) received during the year ended May 31, 2019 in a private placement at a purchase price of $0.004 (CDN $0.005) . We have issued all of the shares to four (4) non-US persons (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933.
On October 18, 2018, we issued 21,150,000 shares of our common stock pursuant to debt settlement agreements with twenty-six (26) individuals. The deemed price of the shares issued was $0.004 (CDN $0.005) per share. We have issued all of the shares to twenty-six (26) non-US persons (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933.
On October 18, 2018, we issued 300,000 shares of our common stock pursuant to a debt settlement agreements with one individual. The deemed price of the shares issued was USD $0.004 (CDN $0.005) per share. We have issued all of the securities to one U.S. person (as that term is defined in Regulation S of the Securities Act of 1933) relying upon Rule 506 of Regulation D of the Securities Act of 1933.
16
On August 23, 2019, we issued 16,200,000 shares of our common stock in a private placement at a purchase price of $0.004 (CDN $0.005) raising gross proceeds of $60,862 (CDN $81,000). We have issued all of the shares to nine (9) non-US persons (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933.
On August 23, 2019, we issued 3,000,000 shares of our common stock in a private placement at a purchase price of $0.0026 (CDN $0.0035) raising gross proceeds of $7,885 (CDN $10,500). We have issued all of the shares to two (2) non-US persons (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933.
On August 23, 2019, we issued 2,000,000 shares of our common stock in a private placement at a purchase price of $0.00225 (CDN $0.003) raising gross proceeds of $4,505 (CDN $6,000). We have issued all of the shares to one (1) non-US persons (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933.
On August 23, 2019 we issued 1,000,000 shares of our common stock pursuant to debt settlement agreements with one (1) individual. The deemed price of the shares issued was $0.00375 (CDN $0.005) per share. We have issued all of the shares to one (1) non-US person (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933.
On August 23, 2019 we issued 500,000 shares of our common stock pursuant to debt settlement agreements with one (1) individual. The deemed price of the shares issued was $0.00225 (CDN $0.003) per share. We have issued all of the shares to one (1) non-US person (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933.
Purchase of Equity Securities by the Issuer and Affiliated Purchasers
Wolverine did not purchase any of our shares of common stock or other securities during our fourth quarter of our fiscal year ended May 31, 2019.
Item 6.
Selected Financial Data
As a “smaller reporting company”, we are not required to provide the information required by this Item.
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our audited financial statements and the related notes for the years ended May 31, 2019 and 2018 that appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this annual report, particularly in the section entitled “Risk Factors” beginning on page 12 of this annual report.
Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States generally accepted accounting principles.
Cash Requirements
There is limited historical financial information about us upon which to base an evaluation of our performance. We have not generated any revenues from activities. We cannot guarantee we will be successful in our business activities. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the exploration of our properties, and possible cost overruns due to price and cost increases in services.
17
Over the next twelve months we intend to use any funds that we may have available to fund our operations and conduct exploration on our Labrador Claims. We expect to review other potential exploration projects from time to time as they are presented to us.
Not accounting for our working capital deficit of $235,066as of May 31, 2019, we require additional funds of approximately $100,000 at a minimum to proceed with our plan of operation over the next twelve months. As we do not have the funds necessary to cover our projected operating expenses for the next twelve month period, we will be required to raise additional funds through the issuance of equity securities, through loans or through debt financing. There can be no assurance that we will be successful in raising the required capital or that actual cash requirements will not exceed our estimates. We intend to fulfill any additional cash requirement through the sale of our equity securities.
Our auditors have issued a going concern opinion for our year ended May 31, 2019. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated any revenues and no revenues are anticipated until we begin removing and selling minerals. As we did not have any cash and a working capital deficit in the amount of $235,066 as of May 31, 2019, we do not have sufficient working capital to enable us to carry out our stated plan of operation for the next twelve months. We plan to complete debt financings and/or private placement sales of our common stock in order to raise the funds necessary to pursue our plan of operation and to fund our working capital deficit in order to enable us to pay our accounts payable and accrued liabilities. We currently do not have any arrangements in place for the completion of any debt financings or private placement financings and there is no assurance that we will be successful in completing any debt financing or private placement financing. Our success or failure will be determined by what we find under the ground.
Plan of Operation
The Plan of Operation for the next 12 months is to raise $100,000 for the exploration program on the Cache River Property.
As at May 31, 2019, we did not have any cash. We will need to raise additional financing to fund our exploration program over the next 12 months.
The continuation of our business is dependent upon obtaining further financing, a successful program of exploration and/or development, and, finally, achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.
There are no assurances that we will be able to obtain further funds required for our continued operations. As noted herein, we are pursuing various financing alternatives to meet our immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations.
Purchase of Significant Equipment
We do not intend to purchase any significant equipment over the twelve months ending May 31, 2020.
Results of Operations for the Years Ended May 31, 2019 and 2018
The following summary of our results of operations should be read in conjunction with our audited financial statements for the years ended May 31, 2019 and 2018.
Our operating results for the years ended May 31, 2019 and 2018 are summarized as follows:
18
Year Ended
May 31
2019
2018
Revenue
$
–
$
–
Operating expenses
$
(233,526
)
$
(268,594
)
Other income (expenses)
$
2,896
$
21,957
Net loss
$
(230,630
)
$
(246,637
)
Revenues
We have not earned any revenues since our inception and we do not anticipate earning revenues in the near future.
Operating Expenses
Our operating expenses for the years ended May 31, 2019 and 2018 are outlined in the table below:
Year Ended
May 31
2019
2018
General and administrative
$
233,526
$
268,594
Mineral exploration costs
$
-
$
-
Total expenses
$
233,526
$
268,594
The decrease in operating expenses for the year ended May 31, 2019 of $35,068, compared to the same period in fiscal 2018, was mainly due to a $23,372 decrease in consulting fees, a $2,404 decrease in travel and entertainment expenses and a $4,074 decrease in professional fees. The decreases in these expenses were due to a decrease in financing activities.
Liquidity and Financial Condition
Working Capital
At
At
May 31,
May 31,
2019
2018
Current assets
$
3,592
$
21,094
Current liabilities
238,658
198,189
Working deficit
$
(235,066
)
$
(177,095
)
Cash Flows
Year Ended
May 31
2019
2018
Net Cash Used in Operating Activities
$
(108,071
)
$
(206,185
)
Net Cash Provided by (Used in) investing activities
-
-
Net Cash Provided by Financing Activities
89,089
225,120
Net change in cash during period
$
(18,982
)
$
(18,935
)
19
Operating Activities
Net cash used in operating activities during the year ended May 31, 2019 was $108,071 compared to $206,185 for the year ended May 31, 2018. The decrease was primarily a result of decreased operating expenses during year ended May 31, 2019 as compared to 2018, and an increase of $85,710 in accounts payables owed to related parties.
Investing Activities
Net cash provided by investing activities during the year ended May 31, 2019 was $Nil compared to net cash used in investing activities of $Nil for the year ended May 31, 2018.
Financing Activities
During the year ended May 31, 2019, we received proceeds of $89,089 from financing activities, which included proceeds from short-term advances ($2,230), issuance of common shares ($25,997), and share subscriptions ($60,862). During the year ended May 31, 2018, we received proceeds of $225,120 from financing activities, which included proceeds from the issuance of common shares ($174,742) and share subscriptions ($66,328) offset by the repayment of short-term advances ($15,950).
Contractual Obligations
As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
APPLICATION OF CRITICAL ACCOUNTING POLICIES
Our audited financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles used in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.
Mineral Property Costs
Our company has been in the exploration stage since its inception on February 23, 2006 and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized when incurred. Our company assesses the carrying costs for impairment under ASC 360, “Property, Plant, and Equipment”, at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property, are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.
Stock-based Compensation
Our company records stock-based compensation in accordance with ASC 718, “Compensation-Stock Compensation” and ASC 505, “Equity Based Payments to Non-Employees”, using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.
20
NEW ACCOUNTING PRONOUNCEMENTS
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
As a “smaller reporting company”, we are not required to provide the information required by this Item.
21
Item 8.
Financial Statements and Supplementary Data
Our audited financial statements are stated in United States dollars (US$) and are prepared in accordance with United States generally accepted accounting principles. The following audited financial statements are filed as part of this annual report:
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of Wolverine Technologies Corp.:
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Wolverine Technologies Corp. (“the Company”) as of May 31, 2019 and 2018, the related statements of operations, stockholders’ deficit, and cash flows for each of the years in the two-year period ended May 31, 2019 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of May 31, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the two-year period ended May 31, 2019, in conformity with accounting principles generally accepted in the United States of America.
Explanatory Paragraph Regarding Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has never generated revenues, is unlikely to generate earnings in the immediate or foreseeable future, has suffered recurring losses from operations and has a net capital deficiency, all of which raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Sadler, Gibb & Associates, LLC
We have served as the Company’s auditor since 2018.
Salt Lake City, UT September 13, 2019
F-1
WOLVERINE TECHNOLOGIES CORP.
Balance Sheets
(Expressed in U.S. dollars)
May 31, 2019 $
May 31, 2018 $
ASSETS
Current Assets
Cash
-
18,982
Other receivable
3,592
2,112
Total Assets
3,592
21,094
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable and accrued liabilities
191,901
171,812
Short term debt - related parties (Note 3)
46,757
26,377
Total Liabilities
238,658
198,189
Stockholders' Deficit
Common stock, 500,000,000 shares authorized, $0.001 par value 477,270,993 and 432,020,993 shares issued and outstanding at May 31, 2019 and May 31, 2018, respectively
477,271
432,021
Subscriptions received
60,862
66,328
Additional paid-in capital
5,238,347
5,105,472
Accumulated deficit
(6,011,546
)
(5,780,916
)
Total Stockholders' Deficit
(235,066
)
(177,095
)
Total Liabilities and Stockholders' Deficit
3,592
21,094
(The accompanying notes are an integral part of these financial statements.)
WOLVERINE TECHNOLOGIES CORP.
Statements of Operations
(Expressed in U.S. dollars)
Year
Year
Ended
Ended
May 31,
May 31,
2019
2018
$
$
Operating Expenses
General and administrative
233,526
268,594
Total Operating Expenses
233,526
268,594
Net Loss Before Other Expenses
(233,526
)
(268,594
)
Other Income (Expense)
Interest income (expense)
-
(1,991
)
Foreign exchange gain (loss)
3,516
(13,095
)
Gain on extinguishment of liabilities
2,466
-
Gain (loss) on settlement of debt
(3,086
)
37,043
Net Loss
(230,630
)
(246,637
)
Net Loss Per Common Share, Basic and Diluted
(0.00
)
(0.00
)
Weighted Average Common Shares Outstanding, Basic and Diluted
473,292,774
382,339,623
(The accompanying notes are an integral part of these financial statements.)
WOLVERINE TECHNOLOGIES CORP.
Statements of Stockholders' Deficit
For the years ended May 31, 2019 and 2018
(Expressed in U.S. dollars)
Additional
Subscriptions
Paid-in
Accumulated
Shares
Amount
Received
Capital
Deficit
Total
#
$
$
$
$
$
Balance, May 31, 2017
346,520,993
346,521
26,798
4,882,331
(5,534,279
)
(278,629
)
Common stock subscribed for cash
-
-
66,328
-
-
66,328
Common stock issued for cash
49,800,000
49,800
(26,798
)
151,741
-
174,743
Common stock issued to settle debt
31,700,000
31,700
-
63,400
-
95,100
Common stock issued to settle related party debt
4,000,000
4,000
-
8,000
-
12,000
Net loss for the period
-
-
-
-
(246,637
)
(246,637
)
Balance, May 31, 2018
432,020,993
432,021
66,328
5,105,472
(5,780,916
)
(177,095
)
Common stock subscribed for cash
-
-
60,862
-
-
60,862
Common stock issued for cash
6,800,000
6,800
-
19,197
-
25,997
Common stock issued for subscription payable
17,000,000
17,000
(66,328
)
49,328
-
-
Common stock issued to settle debt
21,450,000
21,450
-
64,350
-
85,800
Net loss for the period
-
-
-
-
(230,630
)
(230,630
)
Balance, May 31, 2019
477,270,993
477,271
60,862
5,238,347
(6,011,546
)
(235,066
)
(The accompanying notes are an integral part of these financial statements.)
WOLVERINE TECHNOLOGIES CORP.
Statements of Cash Flows
(Expressed in U.S. dollars)
Year
Year
Ended
Ended
May 31,
May 31,
2019
2018
$
$
Operating Activities
Net loss
(230,630
)
(246,637
)
Adjustments to reconcile net loss to net cash used in operating activities:
Gain on extinguishment of debt
(2,466
)
-
Loss (gain) on settlement of debt
3,086
(37,043
)
Loss on foreign exchange
-
13,095
Changes in operating assets and liabilities:
Other receivable
(1,480
)
(434
)
Accounts payable
48,969
76,094
Accounts payable - related parties
74,450
(11,260
)
Net Cash Used in Operating Activities
(108,071
)
(206,185
)
Financing Activities
Proceeds from issuance of common stock
25,997
174,742
Proceeds from common stock subscriptions
60,862
66,328
Short term advances
2,230
(15,950
)
Net Cash Provided by Financing Activities
89,089
225,120
Increase (decrease) in Cash
-
18,935
Cash, Beginning of Period
18,982
47
Cash, End of Period
-
18,982
Non-cash Investing and Financing Activities:
Payments made by shareholders on behalf of Company
3,302
7,099
Shares issued to settle accounts payable
85,800
95,100
Shares issued to settle related party accounts payable
-
12,000
Stocks issued for prior year subscriptions
66,328
26,798
Supplemental Disclosures:
Interest paid
-
-
Income taxes paid
-
-
(The accompanying notes are an integral part of these financial statements.)
WOLVERINE TECHNOLOGIES CORP. Notes to the Financial Statements May 31, 2019 (Expressed in U.S. dollars)
1. Organization and basis of presentation
Wolverine Technologies Corp. (the "Company") was incorporated in the State of Nevada on February 23, 2006. The Company's prior principal business was the acquisition and exploration of mineral resources. The Company had not determined that its properties contain mineral reserves that were economically recoverable, financing had not yet become available, and commodity prices had not fully recovered. Therefore, management decided to change the focus of the Company to include cyber security. Effective August 12, 2015, the Company changed its name from Wolverine Exploration Inc. to Wolverine Technologies Corp.
Going Concern
These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has never generated revenues and is unlikely to generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. The Company plans to raise financing of debt or equity. There can be no assurance that additional financing will be available when needed or, if available, that it can be obtained on commercially reasonable terms. At May 31, 2019, the Company has a working capital deficiency of $235,066 and has accumulated losses of $6,011,546 since inception. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
2. Summary of Significant Accounting Pronouncements
a) Basis of Presentation
These financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in U.S. dollars. The Company's fiscal year-end is May 31.
b) Use of Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to stock-based compensation, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company's estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.
c) Cash and Cash Equivalents
The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.
d) Mineral Property Costs
The Company has been in the exploration stage since its inception on February 23, 2006, and has not yet realized any revenues from its planned operations. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized. The Company assesses the carrying costs for impairment under ASC 360, "Property, Plant, and Equipment" at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property, are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.
WOLVERINE TECHNOLOGIES CORP. Notes to the Financial Statements May 31, 2019 (Expressed in U.S. dollars)
e) Income Taxes
The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, "Income Taxes". The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
Uncertain tax positions are recognized in the financial statements only if that position is more likely than not of being sustained upon examination by taxing authorities, based on the technical merits of the position. The Company recognizes interest and penalties related to uncertain tax positions in the income tax provision. There are currently no unrecognized tax benefits that if recognized would affect the tax rate. There was $0 of interest and penalties recognized for the year ended May 31, 2019 (2018 - $1,991).
f) Foreign Currency Translation
The Company's functional and reporting currency is the United States dollar. Occasional transactions may occur in Canadian dollars and management has adopted ASC 830, "Foreign Currency Translation Matters". Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average monthly rates are used to translate revenues and expenses. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.
g) Stock-based Compensation
The Company records stock-based compensation in accordance with ASC 718, "Compensation - Stock Compensation" and ASC 505, "Equity Based Payments to Non-Employees", using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.
h) Earnings (Loss) Per Share
The Company computes earnings (loss) per share in accordance with ASC 260, "Earnings per Share". ASC 260 requires presentation of both basic and diluted earnings per share ("EPS") on the face of the income statement. Basic EPS is computed by dividing earnings (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive. At May 31, 2019 and 2018, the Company had no dilutive shares outstanding.
i) Financial Instruments and Fair Value Measures
ASC 820, "Fair Value Measurements and Disclosures", requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:
Level 1
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
F-7
WOLVERINE TECHNOLOGIES CORP. Notes to the Financial Statements May 31, 2019 (Expressed in U.S. dollars)
Level 3
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
The Company's financial instruments consist principally of cash, accounts receivable, accounts payable and amounts due to related parties. Pursuant to ASC 820, the fair value of cash is determined based on "Level 1" inputs, which consist of quoted prices in active markets for identical assets. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.
j) Comprehensive Income
ASC 220, "Comprehensive Income", establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at May 31, 2019 and 2018, the Company has no items that represent a comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.
k) Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
3. Related Party Transactions
(a) During the year ended May 31, 2019, the Company incurred consulting fees of $30,344 (2018 - $31,325) to a company controlled by the President of the Company.
(b) During the year ended May 31, 2019, the Company incurred consulting fees of $25,506 (2018 - $35,350) to a Director of the Company.
(c) As at May 31, 2019, the Company owes $38,918 (May 31, 2018 - $17,814) to a company controlled by the President of the Company, which is non-interest bearing, unsecured and due on demand.
(d) As at May 31, 2019, the Company owes $7,839 (May 31, 2018 - $8,563) to a Director of the Company, which is non-interest bearing, unsecured and due on demand.
(e) On February 14, 2018, the Company issued 4,000,000 shares of common stock with a fair value of $12,000 to settle Cdn$20,000 ($15,938) of amounts owing to a company controlled by the President of the Company, resulting in a gain on settlement of debt of $3,938.
4. Common Stock
Stock transactions during the year ended May 31, 2019:
(a) During the year ended May 31, 2019, the Company issued 21,450,000 shares of common stock with a fair value of $85,800 to settle accounts payable of $82,714, resulting in a loss on settlement of $3,086.
(b) During the year ended May 31, 2019, , the Company issued 6,800,000 shares of common stock pursuant to a private placement at Cdn$0.005 per share for proceeds of $25,997 (Cdn$34,000).
(c) During the year ended May 31, 2019, the Company issued 17,0000,000 shares of common stock pursuant to a private placement at Cdn$0.005 per share for proceeds of Proceeds of $66,328 (Cdn$85,000) which were received during the year ended May 31, 2018.
(d) During the year ended May 31, 2019, the Company received cash proceeds of $60,862 (Cdn$81,000) relating to share subscriptions. The shares were unissued at May 31, 2019 and the amounts received for these shares have been reflected in stock subscriptions received in the balance sheet. On August 23, 2019, the Company issued the subscribers 16,200,000 shares of common stock as described in Note 9(a).
Stock transactions during the year ended May 31, 2018:
a) On February 14, 2018, the Company issued 31,700,000 shares of common stock with a fair value of $95,100 to settle accounts payable of $128,205, resulting in a gain on settlement of $33,105.
b) On February 14, 2018, the Company issued 4,000,000 shares of common stock with a fair value of $12,000 to settle related party accounts payable of $15,938 (Cdn$20,000), resulting in a gain on settlement of $3,938.
WOLVERINE TECHNOLOGIES CORP. Notes to the Financial Statements May 31, 2019 (Expressed in U.S. dollars)
c) On February 14, 2018, the Company issued 5,000,000 shares of common stock pursuant to a private placement at $0.005 per share for proceeds of $25,000.
d) On February 14, 2018, the Company issued 33,200,000 shares of common stock pursuant to a private placement at Cdn$0.005 per share for proceeds of $130,833 (Cdn$166,000). Proceeds of $26,798 (Cdn$36,000) which were received during the year ended May 31, 2017.
At May 31, 2019 and 2018, the Company had no dilutive shares, or common stock equivalents.
5. Stock-based Compensation
On May 28, 2010, the Board of Directors of the Company adopted the 2010 Stock Plan (the "Plan"). The maximum number of shares of the Company's common stock available for issuance under the Plan is 10,294,500 shares. An aggregate of 5,147,250 shares may be issued under stock options and an aggregate of 5,147,250 shares may be issued in the form of restricted shares.
At May 31, 2019 and 2018, the Company had no outstanding or exercisable stock options.
6. Commitments
(a) On January 31, 2007, the Company entered into a consulting agreement with a company whereby it has agreed to pay $7,600 (Cdn$10,000) per month. The Company is obligated to issue a bonus of 5% of the Company's issued and outstanding common shares as of the date of the payment of the bonus upon and only in the event of the discovery of a major commercially viable mineral resource deposit. As at May 31, 2019, the Company has not issued a bonus. During the year ended May 31, 2019, the Company recorded consulting fees of $90,763 (Cdn$120,000). During the year ended May 31, 2018, the Company recorded consulting fees of $123,320 (Cdn$157,500), which included $93,974 (Cdn$120,000) of consulting fees under the above agreement, and additional consulting fees of $29,256 due to an increase in financing activities (Cdn$37,500) for the year ended May 31, 2018.
(b) On April 19, 2016, the Company signed a Share Purchase Agreement with a Director of the Company, whereby the Company will issue, in a private placement, 400,000,000 shares of common stock of the Company in consideration for one-third of the net proceeds that the Director will receive from the sale of the Director's 15% interest in Decision-Zone Inc. The Agreement is subject to the Company increasing its authorized capital of common stock to allow for the issuance of the shares to the Director. As of the date of this filing, the agreement has not yet closed.
7. Debt Extinguishment
During the year ended May 31, 2019, the Company recorded a gain on extinguishment of debt of $2,466 upon the extinguishment of $2,466 of liabilities included in accounts payable for which the Company was legally given relief from.
8. Income Taxes
The Company has net operating losses carried forward of $4,082,477 available to offset taxable income in future years which expires beginning in fiscal 2027. Under section 382 of the Internal Revenue Code such a change in control negates much of the tax loss carry forward and deferred income tax. The Company is subject to examination by the IRS for tax years 2014 to 2019. The Company is also subject to income tax in Canada.
The Company was subject to United States federal and state income taxes at an approximate rate of 21% for the years ended May 31, 2019 and 2018.
The reconciliation of the provision for income taxes at the United States federal statutory rate compared to the Company's income tax expense as reported is as follows:
2019 $
2018 $
Income tax recovery at statutory rate
(48,432
)
(51,794
)
Valuation allowance change
(48,432
)
(51,794
)
Provision for income taxes
-
-
WOLVERINE TECHNOLOGIES CORP. Notes to the Financial Statements May 31, 2019 (Expressed in U.S. dollars)
The significant components of deferred income tax assets and liabilities at May 31, 2019 and 2018, are as follows:
2019 $
2018 $
Mineral property costs
299,971
299,971
Net operating losses carried forward
857,320
808,888
Gross deferred income tax assets
1,157,291
1,108,859
Valuation allowance
(1,157,291
)
(1,108,859
)
Net deferred income tax asset
-
-
9. Subsequent events
(a) On August 23, 2019, the Company issued 16,200,000 shares of common stock pursuant to a private placement for cash proceeds of $60,862 (Cdn$81,000) received during the year ended May 31, 2019.
(b) On August 23, 2019, the Company issued 5,000,000 shares of common stock pursuant to a private placement for cash proceeds of $12,390 (Cdn$16,500) received subsequent to May 31, 2019.
(c) On August 23, 2019, the Company issued 1,500,000 shares of common stock to settle accounts payable of $4,878 (Cdn$6,500).
(d) Subsequent to May 31, 2019, the Company received cash proceeds of $43,500 for the issuance of 19,333,334 common shares. As of the date of these financial statements the shares had yet to be issued.
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