Discovery Energy Corp.

Climate Impact & Sustainability Data (2021, 2022)

COVID-19 pandemic impacting financing and operations.
Hydrocarbon price volatility.
Need for significant additional capital to fulfill work commitments and repay debentures.
Substantial doubt about ability to continue as a going concern.

Extension of debentures and warrants to December 31, 2023.
Paycheck Protection Program loans.
Efforts to secure additional funding through private placements and joint ventures.
Presenting prospective locations to potential investors to secure capital for drilling.

Medium-term Goals:

Develop the Prospect to a stage at which Hydrocarbons are being produced in commercially viable quantities; Contract with purchasers of our commercial production of Hydrocarbons upon such commencement.

Short-term Goals:

Complete a material financing or similar transaction that will provide sufficient funds; Drill successful exploratory test wells on the Prospect to determine the presence of Hydrocarbons in commercially viable quantities.

Suspension and Modification of Work Commitment
Russian-Ukrainian War
Continuing Increases in Hydrocarbons Prices
On-going Effects of Coronavirus Pandemic
Need for additional capital to fulfill its obligations under the work commitment and repay debentures.
Limited control over activities on properties not operated by the company.
Intense competition in the hydrocarbon industry.
Complex laws and regulations, including environmental regulations.
Dependence on key personnel.
Limited management resources.
Large percentage of outstanding shares owned by management.
Potential for inadequate internal controls over financial reporting.
Limited trading of common shares.
Potential for substantial impairment of recorded value of properties.

Successfully obtained suspensions and modifications of work commitments.
Monitoring the ongoing volatility in hydrocarbon prices and implementing a capital strategy.
Pursuing efforts to secure joint venture partners.
Implementing revised accounting and financial statement preparation and review processes to improve financial controls.
Actively engaged in efforts to complete a capital raising transaction.
Intending to obtain insurance consistent with industry practices.
Planning to create a position to further segregate duties within the accounting function and add independent directors and an independent audit committee when funding is available.

Laws being adopted or considered to reduce greenhouse gas emissions, conserve fuel, use fewer Hydrocarbons, and utilize more alternative energy sources.
Consumer sentiment shifting against fuel sources that leave a large carbon footprint.
Investors increasingly sensitive to environmental, social, and governance (ESG) matters.