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At December 31, 2023 and December 31, 2022, $ and $, respectively, is owed to key management personnel with all amounts included in accounts payable and accrued liabilities.
(i) During the year ended December 31, 2023, Richard Williams (Director and Executive Chairman) billed $ (year ended December 31, 2022 - $) for consulting services and bonus payment to the Company. At December 31, 2023, $ is owed to Richard Williams (December 31, 2022 - $) for consulting services, with all amounts included in accounts payable and accrued liabilities.
During the year ended December 31, 2023, restricted share units (RSUs) were issued to Richard Williams which will vest in one third increments on March 31, 2024, March 31, 2025, and March 31, 2026. The vesting of these RSUs resulted in stock-based compensation of $ for the year ended December 31, 2023.
During the year ended December 31, 2023, restricted share units (RSUs) were issued to Richard Williams which vested immediately. The vesting of these RSUs resulted in stock-based compensation of $ for the year ended December 31, 2023.
During the year ended December 31, 2022, restricted share units (RSUs) were issued to Richard Williams which will vest in one third increments on March 31, 2023, March 31, 2024, and March 31, 2025. The vesting of these RSUs resulted in stock-based compensation of $ and $ respectively for the year ended December 31, 2023 and December 31, 2022.
(ii) During the year ended December 31, 2023, the Company incurred $ in payroll expense and bonus payment for Sam Ash (year ended December 31, 2022 - $) for services to the Company. At December 31, 2023, $nil (December 31, 202 - $nil) is payable and included in accrued liabilities.
During the year ended December 31, 2023, restricted share units (RSUs) were issued to Sam Ash which will vest in one third increments on March 31, 2024, March 31, 2025, and March 31, 2026. The vesting of these RSUs resulted in stock-based compensation of $ for the year ended December 31, 2023.
During the year ended December 31, 2023, restricted share units (RSUs) were issued to Sam Ash which vested immediately. The vesting of these RSUs resulted in stock-based compensation of $ for the year ended December 31, 2023.
During the year ended December 31, 2022, restricted share units (RSUs) were issued to Sam Ash which will vest in one third increments on March 31, 2023, March 31, 2024, and March 31, 2025. The vesting of these RSUs resulted in stock-based compensation of $ and $ respectively for the year ended December 31, 2023 and December 31, 2022.
(iii) During the year ended December 31, 2023, the Company incurred $ in payroll expense and bonus payment for Gerbrand van Heerden (CFO) (year ended December 31, 2022, $nil) for services to the Company. At December 31, 2023, $nil (year ended December 31, 2022 - $nil) is payable, including reimbursable expenses, and included in accrued liabilities.
(iv) During the year ended December 31, 2023, the Company incurred $ in payroll expense and bonus payment for David Wiens (Former CFO) (year ended December 31, 2021, $) for services to the Company. At December 31, 2023, $nil (year ended December 31, 2022 - $) is payable, including reimbursable expenses, and included in accrued liabilities.
During the year ended December 31, 2023, restricted share units (RSUs) were issued to David Wiens which will vest in one third increments on March 31, 2024, March 31, 2025, and March 31, 2026. The vesting of these RSUs resulted in stock-based compensation of $ for the year ended December 31, 2023.
During the year ended December 31, 2023, restricted share units (RSUs) were issued to David Wiens which vested immediately. The vesting of these RSUs resulted in stock-based compensation of $ for the year ended December 31, 2023.
During the year ended December 31, 2022, restricted share units (RSUs) were issued to David Wiens which will vest in one third increments on March 31, 2023, March 31, 2024, and March 31, 2025. The vesting of these RSUs resulted in stock-based compensation of $for the year ended December 31, 2023 and $ December 31, 2022.
(v) During the year ended December 31, 2023, Pam Saxton (Director) billed $ (year ended December 31, 2022 - $) for consulting services to the Company. On July 4, 2023, the Company issued DSU’s to Pam Saxton.
(vi) During the year ended December 31, 2023, Cassandra Joseph (Director) billed $ (year ended December 31, 2022 - $) for consulting services to the Company. On July 4, 2023, the Company issued DSU’s to Cassandra Joseph.
(vii) During the year ended December 31, 2023, the Company incurred $ in director fees for Mark Cruise (year ended December 31, 2022 - $). On July 4, 2023, the Company issued DSU’s to Mark Cruise. On July 1, 2022, the Company issued DSU’s to Mark Cruise.
(viii) During the year ended December 31, 2023, Paul Smith (Director) billed $ (year ended December 31, 2022 - $nil) for consulting services to the Company. On July 5, 2023, the Company issued DSU’s to Paul Smith.
(ix) During the year ended December 31, 2023, Dickson Hall (Director) billed $nil (year ended December 31, 2022 - $nil) for consulting services to the Company. On July 4, 2023, the Company issued DSU’s to Dickson Hall.
shares of common stock in connection with its election to satisfy interest payments under the outstanding convertible debentures for the three months ended December 31, 2023.
On January 29, 2024, the Company granted RSUs to a certain member of management of the Company. The RSUs vest on January 29, 2025.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Effective September 2, 2014, the Company appointed the firm of MNP LLP, Chartered Professional Accountants, as the Company’s principal independent accountant to audit the Company’s financial statements. The Company has had no disagreements with its accountants that would require disclosure pursuant to Item 304 of Regulation S-K.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The Securities and Exchange Commission (“SEC”) defines the term “disclosure controls and procedures” to mean a company’s controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Exchange Act is recorded, processed, summarized and reported within the time periods specified under the SEC’s rules and forms and that information required to be disclosed is accumulated and communicated to principal executive and principal financial officers to allow timely decisions regarding disclosure.
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As of the end of the period covered by this report, the Company made an evaluation of the effectiveness of the design and operation of the disclosure controls and procedures over financial reporting for the timely alert to material information required to be included in the Company’s periodic SEC reports and of ensuring that such information is recorded, processed, summarized and reported within the time periods specified. This evaluation resulted in the conclusion that the design and operation of the disclosure controls and procedures were effective as of December 31, 2023.
Internal Control Over Financial Reporting
The management of the Company is responsible for the preparation of the financial statements and related financial information appearing in this report. The financial statements and notes have been prepared in conformity with accounting principles generally accepted in the United States of America. The management of the Company also is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. A company’s internal control over financial reporting is defined as a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that: i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the Company; and iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
Management, including the CEO and CFO, does not expect that the Company’s disclosure controls, procedures and internal control over financial reporting will prevent all error and all fraud. Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable, not absolute, assurance that the objectives of the control system are met and may not prevent or detect misstatements. Further, over time, control may become inadequate because of changes in conditions or the degree of compliance with the policies or procedures may deteriorate. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
With the participation of the CEO and CFO, the Company’s management evaluated the effectiveness of the Company’s internal control over financial reporting as of December 31, 2023 to ensure that information required to be disclosed by the Company in the reports filed or submitted by the Company under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, including to ensure that information required to be disclosed by the Company in the reports filed or submitted by the Company under the Exchange Act is accumulated and communicated to the Company’s management, including the Company’s principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management conducted an evaluation of the effectiveness of internal control over financial reporting based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, the Company’s CEO and CFO have concluded that the internal control over financial reporting was effective as of December 31, 2023.
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Changes in Disclosure Controls and Procedures and Internal Control Over Financial Reporting
There has been no change in the Company’s disclosure controls and procedures and internal control over financial reporting, other than the remediation of the material weakness described below that materially affected or was reasonably likely to materially affect the Company’s disclosure controls and procedures and internal control over financial reporting.
Remediation of Previously Reported Material Weakness
As previously disclosed in the Form 10-K for the year ended December 31, 2022, management had concluded there was a material weakness in the Company’s disclosure controls and procedures and identified significant deficiencies in the Company’s internal control over financial reporting.
Remediation actions were fully implemented and executed during the year ended December 31, 2023, which include:
| ● | The Company replaced certain accounting resources with qualified finance and accounting staff who are experienced in established and proven internal controls and accounting procedures with other companies in the same industry. | |
| ● | The Company engaged a third-party firm to assist in developing and implementing disclosure controls and procedures and internal control policies and procedures over financial reporting. | |
| ● | Appropriate segregation and assignment of duties between individuals and third-party firms were implemented to perform the regular accounting and finance functions of the Company to assure that transactions occurred timely and in a controlled manner. | |
| ● | Processes and controls were implemented over accounts payable transactions and account reconciliations, including the timely submission, review and payment of management expense reports. |
These remediation actions were fully implemented and are reflected in the Company’s transactions in 2023; and, as a result, the Company’s management, with the participation of the CEO and CFO, have concluded that, as of December 31. 2023, the material weakness was remediated.
This report does not include an attestation report of the Company’s registered public accounting firm regarding disclosure controls and procedures and internal control over financial reporting. Management’s report is not subject to attestation by the Company’s registered public accounting firm.
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
[Not applicable.]
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE7
Directors and Executive Officers
The following table sets forth the directors, executive officers, their ages, and all offices and positions held within the Company as of December 31, 2023. Directors are elected for a period of one year and thereafter serve until their successor is duly elected by the stockholders and qualified. Officers and other employees serve at the will of the Board.
| Name | Position Held with the Company | Age | Date First Elected or Appointed | |||
| Sam Ash | President, CEO and Director | 45 | April 14, 2020 | |||
| Richard Williams | Executive Chairman and Director | 57 | March 27, 2020 | |||
| Gerbrand van Heerden | CFO and Corporate Secretary | 47 | November 1, 2023 | |||
| Mark Cruise | Director | 53 | June 30, 2022 | |||
| Cassandra Joseph | Director | 52 | November 2, 2020 | |||
| Dickson Hall | Director | 71 | January 5, 2018 | |||
| Pamela Saxton | Director | 71 | October 30, 2020 | |||
| Paul Smith | Director | 53 | July 5, 2023 |
Biographical Information
Sam Ash was a Partner from 2015 to 2018 at Barrick Gold Corp. (“Barrick”) and held various roles over the nine years employed there between 2009 and 2018. This includes three years as General Manager of the Lumwana Copper Mine in Zambia (2016–2018), Technical Support Manager to Barrick’s Copper Business Unit (2014–2016), General Support Manager on the Cortez Mine in Nevada (2012–2014) and Chief Engineer leading the roll-out of new Underground Mining standards in the USA and Tanzania (2011–2012). Prior to his time at Barrick, Mr. Ash served as Manager of New Operations for Veris Gold Corp. (formerly, Yukon-Nevada Gold Corp.), primarily on the Jerritt Canyon Mine in Nevada, and also as an Underground Mine Supervisor with Drummond Company, Inc. He has recently completed his Masters’ Degree in Leadership and Strategy at the London Business School and has a BS in Mining Engineering from the University of Missouri Rolla.
Richard Williams is an executive with an established track-record of transformational leadership within the mining industry and other demanding environments. He is currently an advisor to companies facing complex operational, political or ESG challenges. Formerly the Chief Operating Officer of Barrick (2015–2018) and the company’s Executive Envoy to Tanzania (2017–2018), he has also served as Chief Executive Officer of the Afghan Gold and Minerals Company (2010-2014), non-executive director of Trevali Mining Corporation (2019–2022) and as a non-executive director of Gem Diamonds Limited (2007–2015). Prior to his commercial mining experience, Mr. Williams served as the Commanding Officer of the British Army’s Special Forces Regiment, the SAS. He holds an MBA from Cranfield University, a BSc in Economics from University College London and an MA in Security Studies from Kings College London.
Gerbrand van Heerden is the Company’s Chief Financial Officer and Corporate Secretary. Gerbrand is an experienced mining company CFO with over 20 years of mining industry experience. From May 2020 to October 2023, Mr. van Heerden served as the Chief Financial Officer of BMC Minerals Limited. From November 2017 to May 2020, he served in various roles at Trevali Mining Corporation, including as Chief Financial Officer and Senior Vice President of Business Development/Finance. From March 2013 to October 2017, Mr. van Heerden served as the Chief Financial Officer of Rosh Pinah Zinc Corporation (Proprietary) Limited, a subsidiary of Glencore Plc. From October 2005 to March 2013, he served in various roles at Metorex Limited, including as General Manager of Metorex Commercial Services, a finance executive, and as Group Financial Controller. Mr. van Heerden started his professional career as a Tax and Assurance Manager with Deloitte. He is a CPA registered with the Chartered Professional Accountants of British Columbia and a CA(SA) registered in South Africa and holds a Bachelor of Commerce (Honors) Degree in Accounting from the University of Johannesburg.
Mark Cruise is a professional geologist with over 27 years of international exploration, development and mining experience. A former polymetallic commodity specialist with Anglo American plc, Dr. Cruise founded and was Chief Executive Officer of Trevali Mining Corporation. Under his leadership, from 2007 to 2019, the company grew from an initial discovery into a global zinc-lead-silver producer with operations in the Americas and Africa. Dr. Cruise currently serves as a non-executive director of Velocity Minerals Ltd. (since 2017), NiCAN Ltd (since 2022), Interra Copper Corp (sine 2023) and Volta Metals Ltd. (since 2023). He previously served as COO, CEO, and director of New Pacific Metals Corp. (2020–2022), a non-executive director of Abzu Resources (2010–2011), Prism Resources Inc. (2016–2019), Ethos Gold Corporation (2010–2015), and Tincorp Metals Inc. (formerly Whitehorse Gold Corp.) (2020–2022).
Cassandra Joseph is an American lawyer with extensive experience managing the commercial relationship between mining companies and environmental regulators. Since February 2023, she has been Vice President, General Counsel and Corporate Secretary of Ivanhoe Electric Inc. Ms. Joseph was Senior Vice President, General Counsel and Corporate Secretary for Nevada Copper Corp. from May 2019 to January 2023 and Associate General Counsel for Tahoe Resources Inc. from 2015 until it was acquired by Pan American Silver Corp. in 2019. She also served as a non-executive director of Century Lithium Corporation (2021–2023). Before this, she worked for the Attorneys General of California (2001–2005) and Nevada (2011–2015), as Deputy and Senior Deputy Attorney General, and as a partner in Watson Rounds PLC (now Brownstein Hyatt Farber Schreck LLP) (2005–2011). Educated at Santa Clara University, and University of California at Berkeley, she was called to the State Bar of California in 1999; the U.S. Court of Appeals, Ninth Circuit in 2001; State Bar of Nevada in 2005; and the U.S. Supreme Court, U.S. Court of Appeals and Federal Circuit in 2007.
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Dickson Hall currently serves as a director of the Company. Since August 2016, he has been a partner in Valuestone Advisors Limited, manager of Valuestone Global Resources Fund 1, a mining fund associated with Jiangxi Copper Corporation and China Construction Bank International. Mr. Hall has more than 40 years’ experience in the resource field, much of it in Asia. From 2005 to 2016, he directed corporate development efforts in Asia for Hunter Dickinson Inc. (HDI), raising capital, establishing strategic partnerships and broadening the Asian shareholder base for HDI public companies. From 2007 to 2011, he was Senior Vice President of Continental Minerals Corporation, which developed the Xietongmen copper-gold project in Tibet, China before selling to China’s Jinchuan Group in 2011 for $446 million. Since 2014 Mr. Hall has been a director and Investment Committee member of Can-China Global Resources Fund, an energy and mining fund backed by the Export-Import Bank of China. Mr. Hall currently serves as a non-executive director of New Pacific Metals Corp. (since 2022) and Arcland Resources Inc (since 2023, and he previously served as a non-executive director of Nova Canada Enterprises (2001–2004), Stepstone Enterprises Ltd. (2001–2004), Kona Bay Technologies Inc. (2004–2020), CY Oriental Holdings Ltd. (2007–2011), Baikal Forest Corp. (2011–2012), Hylands International Holdings Inc. (2013–2016), Nanotech Security Corp. (2015–2019), and Bexar Ventures Inc. (2018–2020). Mr. Hall is a graduate of the University of British Columbia (BA, MA) and has diplomas from Beijing University and Beijing Language Institute.
Pam Saxton is an experienced mining company executive and director. She has served on the Board of Timberline Resources Corporation and as Audit Committee Chair since May 2021 and was a Board Member and Audit Committee Chair at Pershing Gold Corporation from 2017 to 2019. She also has served on the Board of Aquila Resources Inc. from 2019 to 2021 and served on a North American Advisory Board for Damstra Technology – Damstra Holdings Limited from 2021 to 2022. As an executive, she served as Executive Vice President and CFO for Thompson Creek Metals Company (2008–2016) and as CFO for NewWest Gold Corporation (2006-2007). Having started her professional life working as an auditor for Arthur Andersen in Denver, Colorado, her career has included senior finance appointments in the American natural resources industry, including serving as VP Finance for Franco-Nevada Corporation’s U.S. Operations. Ms. Saxton is qualified to serve on the Board by virtue of her expertise in finance, accounting and auditing matters.
Paul Smith is the former Head of Strategy at Glencore (LON: GLEN) (2011–2020), and CFO of the DRC-based Glencore subsidiary Katanga Mining (2019–2020). He is currently Managing Partner at Voltaire Minerals Partners, a Swiss-based critical metals advisory business (since October 2022), a non-executive director at Seadrill (NYSE: SSDRL) (since November 2021) and a director at Echion Technologies Ltd (since August 2021). He trained as an accountant before working as an investment banker at Close Brothers and Credit Suisse. He is based in Zug, Switzerland and leads the Growth Committee of the board of directors of the Company.
Family Relationships
There are no family relationships between any of the current directors or officers of the Company.
Involvement in Certain Legal Proceedings
Neither the Company nor its property is the subject of any other pending legal proceedings, and no other such proceeding is known to be contemplated by any governmental authority. The Company is not aware of any other legal proceedings in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of the Company’s voting securities, or any associate of any such director, officer, affiliate or security holder of the Company, is a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries.
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Directorships
None of the Company’s executive officers or directors is a director of any company with a class of equity securities registered pursuant to Section 12 of the Exchange Act or subject to the requirements of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940.
Code of Ethics
The Company’s Board has adopted a code of ethics that will apply to its principal executive officer, principal financial officer and principal accounting officer or controller and to persons performing similar functions. The code of ethics is designed to deter wrongdoing and to promote honest and ethical conduct, full, fair, accurate, timely and understandable disclosure, compliance with applicable laws, rules and regulations, prompt internal reporting of violations of the code and accountability for adherence to the code. The Company will provide a copy of its code of ethics, without charge, to any person upon receipt of written request for such, delivered to our corporate headquarters. All such requests should be sent care of Bunker Hill Mining Corp., Attn: Corporate Secretary, 82 Richmond Street East, Toronto, Ontario, Canada, M5C 1P1.
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth, for the years indicated, all compensation paid, distributed or accrued for services, including salary and bonus amounts, rendered in all capacities by the Company’s principal executive officer, chief financial officer and all other executive officers; the information contained below represents compensation paid, distributed or accrued to the Company’s officers for their work related to the Company.
Name and Principal Position |
Year | Salary ($) | Bonus ($) | Stock Awards (1,2,3)($) | Option Awards ($) | Non-Equity Incentive Plan Compensation (#) | Non-qualified Deferred Compensation Earnings ($) | All other Compensation ($) | Total ($) | |||||||||||||||||||||||||||
| Gerbrand van Heerden Chief Financial Officer | December 31, 2023 | 52,000 | 80,000 | - | - | - | - | - | 132,000 | |||||||||||||||||||||||||||
| David Wiens(2) | December 31, 2023 | 199,998 | 46,675 | 185,673 | - | - | - | 3,600 | 435,946 | |||||||||||||||||||||||||||
| Former Chief Financial Officer | December 31, 2022 | 219,848 | 163,467 | 118,217 | - | - | - | - | 501,532 | |||||||||||||||||||||||||||
| Richard Williams | December 31, 2023 | 240,000 | 46,253 | 339,846 | - | - | - | - | 626,099 | |||||||||||||||||||||||||||
| Executive Chairman | December 31, 2022 | 240,000 | 132,084 | 128,964 | - | - | - | - | 501,048 | |||||||||||||||||||||||||||
| Sam Ash(5) | December 31, 2023 | 270,000 | 48,924 | 371,717 | - | - | - | - | 690,641 | |||||||||||||||||||||||||||
| Chief Executive Officer | December 31, 2022 | 270,000 | 168,600 | 145,085 | - | - | - | - | 583,685 | |||||||||||||||||||||||||||
| (1) | In November 2022, 3,378,548 RSUs were issued to officers of the Company. These RSUs are calculated using a share price of C$.0155 on the applicable grant date and will vest in one third increments on March 31, 2023, March 31, 2024, and March 31, 2025. | |
| (2) | In June 2023, 2,742,405 RSUs were issued to officers of the Company. These RSUs are calculated using a share price of C$.024 on the applicable grant date and vested immediately. | |
| (3) | In July 2023, 4,832,600 RSUs were issued to officers of the Company. These RSUs are calculated using a share price of C$.023 on the applicable grant date and will vest in one third increments on March 31, 2024, March 31, 2025, and March 31, 2026. | |
| (4) | David Wiens resigned as the Company’s CFO on October 31, 2023. | |
| (5) | Gerbrand van Heerden became the Company’s CFO on November 1, 2023. |
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Grant of Plan Based Awards
On June 01, 2023, 2,742,405 RSUs were issued to officers of the Company. These RSUs vested immediately.
On July 04, 2023, 4,832,600 RSUs were issued to officers of the Company. These RSUs will vest in one third increments on March 31, 2024, March 31, 2025, and March 31, 2026.
On November 17, 2022, 3,378,548 RSUs were issued to officers of the Company. These RSUs will vest in one third increments on March 31, 2023, March 31, 2024, and March 31, 2025.
Outstanding Stock Options Awards At Fiscal Year End
The following table provides a summary of equity awards outstanding at December 31, 2023, for each of the named executive officers.
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
| Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price (C$) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |||||||||||||||||||||||||||
| Gerbrand van Heerden | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
| Sam Ash | — | — | — | — | — | — | — | 2,720,467 | 226,260 | |||||||||||||||||||||||||||
| Richard Williams(1) | 2,968,244 | 989,415 | — | 0.55 | April 20, 2025 | — | — | 2,329,304 | 193,727 | |||||||||||||||||||||||||||
| David Wiens | 1,037,977 | — | — | 0.335 | October 31, 2024 | — | — | — | — | |||||||||||||||||||||||||||
| (1) | As of December 31, 2023, Richard Williams held 3,750,000 vested DSU’s and 1,250,000 unvested DSU’s. |
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Long-Term Incentives and Compensation Plans
As part of its overall compensation, the Company provides for time-based RSUs, DSUs and options (“Options,” and collectively with RSUs and DSUs, “Awards”) that may be granted to employees, officers and eligible consultants and directors of the Company and its affiliates. Recipients of Awards are defined as “Participants”.
The aim of the Company’s compensation program is to attract and retain highly qualified executives and to link compensation to performance and shareholder value. This must ensure that the compensation is sufficiently competitive to achieve this objective. The Board considers a number of factors in order to determine compensation, including the Company’s contractual obligations, the individual’s performance and other qualitative aspects of the individual’s performance and achievements, the amount of time and effort the individual will devote to the Company and the Company’s financial resources.
The Company’s compensation program is comprised of:
| (a) | A base salary or management fee arrangement and benefits. The base salaries or management fee arrangements and benefits paid to the key executives are not based on any specific formula and are set so as to be competitive with other companies of similar size and state of development in the mineral industry. This base salary also includes sign-on incentives, which may be issued in the form of cash, RSUs, DSUs or Options. | |
| (b) | A short-term incentive program in the form of bonuses. Bonuses are paid to key executives based on individual, team and Company performance and the executive’s position in the Company. Any bonus awards are at the sole discretion of the Board. | |
| (c) | Long-term incentives consist of DSUs, RSUs, and Options which provide the Board with additional long-term incentive mechanisms to align the interests of the directors, officers, employees or consultants of the Company with shareholder interests. These incentives also provides for, among other things, an accelerated vesting of awards in the event of a change in control, thereby aligning the Company’s practices with current corporate governance best practices respecting a change in control. |
The Board believe that equity-based compensation plans are the most effective way to align the interests of management with those of shareholders. Long-term incentives must also be competitive and align with the Company’s compensation philosophy.
The Company does not have a pension plan that provides for payments or benefits to its executive officers.
Change of Control Agreements
The Company has provided change of control benefits to certain senior officers to encourage them to continue their employment in the event of a purchase, sale, reorganization, or other significant change in the business.
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If the employment agreement of the senior officer is terminated by the (a) Company without just cause, or (b) senior officer for good reason pursuant to the terms of the employment agreement, at any time within 12 months of a change of control, the Company is required to make a lump sum severance payment equal to 24 months of base salary. In addition, at such time all Awards shall be deemed to have vested, and all restrictions and conditions applicable to such Awards shall be deemed to have lapsed and the Awards shall be issued and delivered.
Employment Agreements
The Company has various employment agreements with certain executives, which provide for compensation and certain other benefits and for severance payments under certain circumstances. Certain employment agreements also contain clauses that become effective upon a change of control of the Company, as described above. The Company may be obligated to pay certain amounts to such employees upon the occurrence of any of the defined events in the various employment agreements.
Equity Compensation Plan Information
RSU Plan
On August 4, 2023, the shareholders of the Company approved the Amended and Restated Restricted Stock Unit Incentive Plan of the Company (the “RSU Plan”). Pursuant to the RSU Plan, restricted stock units (“RSUs”) of the Company have been reserved for purposes of possible future issuances, with each RSU representing the right to receive one share of Company common stock. The RSU Plan is intended to enhance the Company’s ability to attract and retain highly qualified officers, directors, key employees, consultants and other persons, and to motivate such officers, directors, key employees, consultants and other persons to serve the Company and to expend maximum effort to improve the business results and earnings of the Company by providing to such persons an opportunity to acquire or increase a direct proprietary interest in the operations and future success of the Company. To this end, the RSU Plan provides for the grant of RSUs and any of these awards of RSUs (“RSU Awards”) may, but need not, be made as performance incentives to reward attainment of annual or long-term performance goals of the Company.
The following information is intended to be a brief description and summary of the material features of the RSU Plan:
| (a) | The maximum number of shares of common stock available for issuance under the RSU Plan is 26,581,075, subject to adjustment or increase of such number pursuant to the terms of the RSU Plan. | |
| (b) | The number of share of common stock to be issued under the RSU Plan shall not exceed 10% of the total number of the issued and outstanding shares of common stock as of July 5, 2023. | |
| (c) | In the event that an RSU Award is settled in cash, forfeited, surrendered, cancelled or otherwise terminated, the shares of common stock reserved for issuance in connection with such RSU Award will be returned to the pool of available common stock authorized for issuance under the RSU Plan and will be available for reservation pursuant to a new RSU Award grant. | |
| (d) | RSU Awards may be made under the RSU Plan to any employee, director or consultant of the Company, as the Board shall determine and designate from time to time. | |
| (e) | RSU Awards granted under the RSU Plan are subject to a minimum vesting period of one year, with certain exceptions. | |
| (f) | RSU Awards granted under the RSU Plan may, in the discretion of the Board, be granted either alone or in addition to, in tandem with, or in substitution or exchange for, any other RSU Award or any award granted under another plan of the Company. | |
| (g) | At the time a grant of RSUs is made, the Board may, in its sole discretion, establish a vesting period applicable to such RSUs, and each RSU Award may be subject to a different vesting period. |
Option Plan
Also on August 4, 2023, the shareholders of the Company approved the Bunker Hill Mining Corp. Amended and Restated Stock Option Plan (the “Option Plan”). Under the Option Plan, shares of common stock have been reserved for purposes of possible future issuance of incentive stock options, non-qualified stock options, and stock grants to employees, directors and certain key individuals. The purpose of the Option Plan is to advance the interests of the Company by (i) providing certain employees, senior officers, directors, or consultants of the Company (collectively, the “Optionees”) with additional performance incentives; (ii) encouraging share ownership by the Optionees; (iii) increasing the proprietary interest of the Optionees in the success of the Company; (iv) encouraging the Optionees to remain with the Company; and (v) attracting new employees, officers, directors and consultants to the Company.
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The following information is intended to be a brief description and summary of the material features of the Option Plan:
| (a) | The aggregate maximum number of shares of common stock available for issuance under the Option Plan is 10% of the outstanding common stock at any given time, subject to adjustment of such number pursuant to the terms of the Option Plan. Any shares of common stock subject to an option which has been granted under the Option Plan and which has been surrendered, terminated, or expired without being exercised, in whole or in part, will again be available under the Option Plan. | |
| (b) | The exercise price of an option shall be determined by the Board at the time each option is granted, provided that such price shall not be less than the closing price of the common stock on the principal stock exchange(s) upon which the common stock is listed and posted for trading on the trading day immediately preceding the day of the grant of the option, less the applicable discount permitted by the TSX Venture Exchange, if any. | |
| (c) | Options granted to persons conducting Investor Relations Activities (as defined in the Option Plan) for the Company must vest in stages over twelve months with no more than ¼ of the options vesting in any three-month period. | |
| (d) | In the event an Optionee ceases to be eligible for the grant of options under the Option Plan, options previously granted to such person will cease to be exercisable within a period of 12 months following the date such person ceases to be eligible under the Option Plan. | |
| (e) | In the event that a take-over bid or issuer bid is made for all or any of the issued and outstanding common stock, then the Board may, by resolution, permit all options outstanding to become immediately exercisable in order to permit shares of common stock issuable under such options to be tendered to such bid. |
DSU Plan
On April 21, 2020, the Board approved the adoption of the Company’s Deferred Share Unit Plan (the “DSU Plan”), pursuant to which the Board may grant DSUs to eligible persons under the DSU Plan. Each DSU entitles the grantee to receive on vesting an amount equal to: (A) the number of vested DSUs elected to be redeemed multiplied by (B) the fair market value of the Company’s common stock less (C) any applicable withholdings pursuant to the DSU Plan. The purposes of the DSU Plan are to: (i) align the interests of directors of the Company with the long term interests of shareholders of the Company; and (ii) allow the Company to attract and retain high quality directors.
The following information is intended to be a brief description and summary of the material features of the DSU Plan:
| (a) | A committee of directors of the Company appointed by the Board to administer the DSU Plan may grant DSUs to any director of the Company in its sole discretion. | |
| (b) | Awards may be made under the DSU Plan to any director of the Company, as the committee appointed by the Board shall determine and designate from time to time. | |
| (c) | Should the Company’s common stock no longer be publicly traded at the relevant time such that the fair market value of the common stock cannot be determined in accordance with the formula set out in the definition of that term pursuant to the DSU Plan, the fair market value of a share of common stock shall be determined by the committee appointed by the Board in its sole discretion. | |
| (d) | At the time a grant of DSUs is made, the committee appointed by the Board may, in its sole discretion, establish a vesting period applicable to such DSUs. |
Director Compensation
The general policy of the Board is that compensation for independent directors should be a fair mix between cash and equity-based compensation. Additionally, the Company reimburses directors for reasonable expenses incurred during the course of their performance. There are no long-term incentive or medical reimbursement plans. The Company does not pay directors, who are part of management, for Board service in addition to their regular employee compensation. The Board determines the amount of director compensation. The board may appoint a compensation committee to take on this role.
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The following table provides a summary of compensation paid to directors during the year ended December 31, 2023.
| Director | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Nonqualified Deferred Compensation Earnings | All Other Compensation ($)(1) | Total ($) | |||||||||||||||||||||
| Dickson Hall | — | — | — | — | — | 65,103 | 65,103 | |||||||||||||||||||||
| Mark Cruise | 31,240 | — | — | — | — | 65,103 | 96,343 | |||||||||||||||||||||
| Richard Williams | 286,253 | 339,846 | — | — | — | — | 626,099 | |||||||||||||||||||||
| Paul Smith | 19,322 | — | — | — | — | 40,684 | 60,006 | |||||||||||||||||||||
| Pam Saxton | 34,832 | — | — | — | — | 75,119 | 109,951 | |||||||||||||||||||||
| Cassandra Joseph | 34,832 | — | — | — | — | 75,119 | 109,951 | |||||||||||||||||||||
| (1) | DSUs granted to Dickson Hall, Mark Cruise, Pam Saxton, and Cassandra Joseph are calculated using a share price of C$0.23 on the applicable grant date. |
| (2) | DSUs granted to Paul Smith are calculated using a share price of C$0.22 on the applicable grant date. |
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Directors and Executive Officers
The following table sets forth the number of shares of Bunker Hill common stock owned beneficially by each director and named executive officer of the Company as of March 5, 2024 (unless another date is specified by footnote below), and by all current directors and executive officers of Bunker Hill as a group:
Amount and Nature of Beneficial Ownership * | ||||||||
| Name of Individual or Group (a) | Shares | Percent of Class (b) | ||||||
| Richard Williams, Executive Chairman | 8,934,194 | (c) | 2.7 | % | ||||
| Sam Ash, CEO and Director | 4,551,713 | (d) | 1.4 | % | ||||
| David Wiens, Former CFO | 3,770,626 | (e) | 1.1 | % | ||||
| Cassandra Joseph, Director | 744,116 | (f) | ** | |||||
| Dickson Hall, Director | 736,000 | (g) | ** | |||||
| Pamela Saxton, Director | 483,000 | (h) | ** | |||||
| Mark Cruise, Director | 350,000 | (i) | ** | |||||
| Gerbrand Van Heerden, CFO | 0 | ** | ||||||
| Paul Smith, Director | 0 | ** | ||||||
| Current Directors and Executive Officers as a Group (a total of 8 persons) | 15,799,023 | 4.7 | % | |||||
| * | Unless otherwise indicated, each person listed has the sole power to vote and dispose of the shares listed. Pursuant to Rule 13d-3 under the Exchange Act, beneficial ownership includes shares as to which the individual or entity has or shares voting power or investment power, and any shares that the individual or entity has the right to acquire within 60 days of March 5, 2024, including through the exercise of any option, warrant, or right. For each individual or entity that holds options, warrants or rights to acquire shares, the shares of Bunker Hill common stock underlying those securities are treated as owned by that holder and as outstanding shares when that holder’s percentage ownership of Bunker Hill common stock is calculated. That Bunker Hill common stock is not treated as outstanding when the percentage ownership of any other holder is calculated. |
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| ** | The percent of class owned is less than 1%. |
| (a) | Except as otherwise indicated below, the address and telephone number of each of these persons is c/o Bunker Hill Mining Corp., 82 Richmond Street East, Toronto, Ontario M5C 1P1, Canada and (416) 477-7771, respectively. |
| (b) | Based on a total of 330,054,341 shares of Bunker Hill common stock outstanding as of March 5, 2024. |
| (c) | Includes (i) 3,529,064 shares of common stock, (ii) 3,957,659 shares subject to stock options exercisable within 60 days of March 5, 2024, (iii) 547,619 shares subject to warrants exercisable within 60 days of March 5, 2024, and (iv) 899,852 shares subject to RSUs convertible within 60 days of March 5, 2024. |
| (d) | Includes (i) 2,550,877 shares of common stock, (ii) 988,503 shares subject to warrants exercisable within 60 days of March 5, 2024, and (iii) 1,012,333 shares subject to RSUs convertible within 60 days of March 5, 2024. |
| (e) | Includes (i) 2,109,456 shares of common stock, (ii) 1,037,977 shares subject to stock options exercisable within 60 days of March 5, 2024, and (iii) 542,193 shares subject to warrants exercisable within 60 days of March 5, 2024. |
| (f) | Includes (i) 403,558 shares of common stock and (ii) 340,558 shares subject to warrants exercisable within 60 days of March 5, 2024. |
| (g) | Includes (i) 368,000 shares of common stock and (ii) 368,000 shares subject to warrants exercisable within 60 days of March 5, 2024. |
| (h) | Includes (i) 273,000 shares of common stock and (ii) 210,000 shares subject to warrants exercisable within 60 days of March 5, 2024. |
| (i) | Includes (i) 175,000 shares of common stock and (ii) 175,000 shares subject to warrants exercisable within 60 days of March 5, 2024. |
Holders of More Than 5% of Bunker Hill Common Stock
The following table sets forth information (as of the date indicated) as to all persons or groups known to Bunker Hill to be beneficial owners of more than 5% of issued and outstanding shares of Bunker Hill common stock as of March 5, 2024.
| Name and Address of Beneficial Holder | Shares Beneficially Owned | Percent of Class (a) | ||||||
| Sprott Asset Management LP, Royal Bank Plaza, South Tower, 200 Bay Street, Suite 2600, P.O. Box 26, Toronto, Ontario M5J 2J1, Canada | 135,177,742 | (b) | 31.9 | % | ||||
| Sprott Asset Management USA, Inc., 320 Post Road, Suite 230, Darien, Connecticut 06820 | ||||||||
| Resource Capital Investment Corp., 1910 Palomar Point Way, Suite 200, Carlsbad, California 92008 | ||||||||
| (a) | Based on a total of 330,054,341 shares of Bunker Hill common stock outstanding as of March 5, 2024. |
| (b) | Includes (i) 42,093,972 shares of common stock, (ii) 339,000 shares subject to warrants exercisable within 60 days of March 5, 2024, and (iii) 92,744,770 shares subject to convertible debentures convertible within 60 days of March 5, 2024. This information is based on a Form 62-103F3 (Required Disclosure by an Eligible Institutional Investor Under Part 4) filed on the SEDAR+ website (www.sedarplus.ca) on January 10, 2024. |
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Equity Compensation Plan
The following table gives information about the Company’s Equity Compensation Plan as of December 31, 2023:
| Number of securities to be issued upon exercise of outstanding options, warrants | Weighted average exercise price of outstanding options, warrants | Number of securities remaining available for future issuances under equity compensation plans, excluding securities reflected in column (a) | ||||||||||
| Plan category | ||||||||||||
| (a | ) | (b | ) | (c | ) | |||||||
| Equity compensation plans approved by security holders | 8,970,636 | $ | 0.38 | 23,295,512 | ||||||||
| Equity compensation plans not approved by security holders | - | - | - | |||||||||
| Total | 8,970,636 | $ | 0.38 | 23,295,512 | ||||||||
| Number of securities to be issued upon exercise of outstanding RSUs and DSUs | Weighted average grant date price of outstanding RSUs and DSUs | Number of securities remaining available for future issuances under equity compensation plans, excluding securities reflected in column (a) | ||||||||||
| Plan category | ||||||||||||
| (a | ) | (b | ) | (c | ) | |||||||
| RSU Plan | 7,044,527 | $ | 0.18 | 19,536,548 | ||||||||
| DSU Plan | 0 | (1) | $ | N/A | N/A | |||||||
| Total | 7,044,527 | $ | 0.18 | 19,536,548 | ||||||||
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Certain Relationships and Related Transactions
There were no material transactions, or series of similar transactions, during the Company’s last fiscal year, or any currently proposed transactions, or series of similar transactions, to which the Company was or is to be a party, in which the amount involved exceeded the lesser of $120,000 or one percent of the average of the small business issuer’s total assets at year-end for the last three completed fiscal years and in which any director, executive officer or any security holder who is known to the Company to own of record or beneficially more than five percent of any class of the Company’s common stock, or any member of the immediate family of any of the foregoing persons, had an interest.
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Director Independence
The Company’s common stock is currently traded on the TSXV, under the symbol BNKR, and as such, is not subject to the rules of any national securities exchange which requires that a majority of a listed company’s directors and specified committees of its board of directors meet independence standards prescribed by such rules. For the purpose of preparing the disclosures in this document with respect to director independence, the Company has used the definition of “independent director” within the meaning of National Instrument 52-110 – Audit Committees adopted by the Canadian Securities Administration and as set forth in the Marketplace Rules of the NASDAQ, which defines an “independent director” generally as being a person, other than an executive officer or employee of the company or any other individual having a relationship which, in the opinion of the company’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
Pam Saxton, Cassandra Joseph, Mark Cruise, Dickson Hall and Paul Smith are currently the only “independent” directors of the Company.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees
Effective September 2, 2014, the Company appointed the firm of MNP LLP, Chartered Professional Accountants, as the Company’s independent audit firm.
MNP LLP, Chartered Professional Accountants, 50 Burnhamthorpe Road West, Mississauga, ON L5B 3C2, served as the Company’s independent registered public accounting firm for the years ended December 31, 2023 and 2022, and is expected to serve in that capacity for the ensuing year 2024. Principal accounting fees for professional services rendered for the Company by MNP LLP for the years ended December 31, 2023 and 2022 are summarized in the following table:
Year Ended December 31, 2023 | Year Ended December 31, 2022 | |||||||
| Audit | $ | 119,599 | $ | 92,292 | ||||
| Audit related | 93,663 | 101,616 | ||||||
| Tax | 2,603 | - | ||||||
| All other | 50,043 | 95,387 | ||||||
| Total | $ | 265,908 | $ | 289,295 | ||||
Audit Related Fees
The aggregate fees billed by MNP LLP for assurance and related services that were related to its review of the Company’s quarterly financial statements.
Tax Fees
The aggregate fees billed by MNP LLP for tax compliance, advice and planning.
All Other Fees
The aggregate fees billed by MNP LLP for all other professional services, including services associated with financing activities.
Audit Committee’s Pre-approval Policies and Procedures
At the Company’s regularly scheduled and special meetings, the Board, or the Board-appointed audit committee, considers and pre-approves any audit and non-audit services to be performed by the Company’s independent registered public accounting firm. The audit committee has the authority to grant pre-approvals of non-audit services.
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PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)(1)(2) Financial Statements and Financial Statement Schedule.
The financial statements and financial statement schedules identified in Item 8 are filed as part of this report.
(a)(3) Exhibits.
The exhibits required by this item are set forth on the Exhibit Index below.
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Exhibit No. |
Description |
| * | Filed herewith. |
| ** | Furnished herewith. |
| † | Management contract or compensatory plan, contract or arrangement. |
| ‡ | Certain schedules or similar attachments to this exhibit have been omitted in accordance with Item 601(a)(5) of Regulation S-K. The registrant hereby agrees to furnish supplementally to the Securities and Exchange Commission upon request a copy of any omitted schedule or attachment to this exhibit. |
ITEM 16. FORM 10-K SUMMARY
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| By: | /s/ Sam Ash | |
| Sam Ash, Chief Executive Officer, Principal Executive Officer |
| By: | /s/ Gerbrand Van Heerden | |
| Gerbrand Van Heerden, Chief Financial Officer and Corporate Secretary, Principal Financial Officer, Principal Accounting Officer |
| Date: | March 12, 2024 |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Date: | March 12, 2024 | By: | /s/ Sam Ash |
| Name: | Sam Ash | ||
| Title: | Chief Executive Officer, Principal Executive Officer | ||
| Date: | March 12, 2024 | By: | /s/ Gerbrand Van Heerden |
| Name: | Gerbrand Van Heerden | ||
| Title: | Chief Financial Officer and Corporate Secretary, Principal Financial Officer, Principal Accounting Officer | ||
| Date: | March 12, 2024 | By: | /s/ Richard Williams |
| Name: | Richard Williams | ||
| Title: | Executive Chairman and Director | ||
| Date: | March 12, 2024 | By: | /s/ Dickson Hall |
| Name: | Dickson Hall | ||
| Title: | Director | ||
| Date: | March 12, 2024 | By: | /s/ Mark Cruise |
| Name: | Mark Cruise | ||
| Title: | Director | ||
| Date: | March 12, 2024 | By: | /s/ Cassandra Joseph |
| Name: | Cassandra Joseph | ||
| Title: | Director | ||
| Date: | March 12, 2024 | By: | /s/ Pamela Saxton |
| Name: | Pamela Saxton | ||
| Title: | Director |
| Date: March 12, 2024 | By: | /s/ Paul Smith |
| Name: | Paul Smith | |
| Title: | Director |
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