MANAGEMENTS DISCUSSION AND ANALYSIS · AND ANALYSIS For the year ending ... It is also a result of...

TSX -V: HTC

HTC Purenergy Inc. operates in three market sectors of business under the following commercial brands:

Technologies & CO2 Systems

Oil & Gas nt Supply and Service

Fertilizer and Grain Handling Solutions

MANAGEMENT�S DISCUSSION AND ANALYSIS For the year ending December 31, 2012

HTC Purenergy Inc. | Year End 2012 Management Discussion and Analysis 2

HTC Purenergy Inc. � Management�s Discussion & Analysis 2012

INTRODUCTION

The following Management�s Discussion and Analysis (�MD&A�) is prepared as of May 15, 2013 and should be read together with HTC Purenergy Inc. (�HTC� or the Corporation�) consolidated financial statements for the year ended December 31, 2012 (the �Year�) and related notes attached thereto, which are prepared in accordance with International Financial Reporting Standards (�IFRS�). All amounts are stated in Canadian dollars unless otherwise indicated. The Corporation has adopted National Instrument 51-102F1 as the guideline in representing the MD&A. Terms used but not defined in this MD&A, shall bear the meaning as set out in Part 1 of National Instruments (�NI�) 51-102 and NI 14-101 Definitions and accounting terms that are not defined herein, shall bear the meaning as described or used in IFRS applicable to publicly accountable enterprises.

This MD&A is dated May 15, 2013.

FORWARD-LOOKING STATEMENTS DISCLAIMER

Statements in this MD&A that are not historical facts are forward-looking statements involving known and unknown risks and uncertainties that may cause the Corporation's actual results or outcomes to be materially different from those anticipated and discussed herein. In assessing forward-looking statements contained herein, readers are urged to read carefully all cautionary statements contained in this MD&A and accompanying consolidated financial statements, and in those other filings with the Corporation�s Canadian regulatory authorities as found at �www.SEDAR.com� and to not put undue reliance on such forward looking statements. Although Management believes that the expectations reflected in the forward-looking statements are reasonable, Management cannot guarantee future results, levels of activity, performance or achievements, or other future events. Management is under no duty to update any of its forward-looking statements after the date of this MD&A, other than as required and governed by law.

Additional information related to the Corporation is available for view on SEDAR at www.sedar.com.



CORPORATION OVERVIEW

HTC operates in three market sectors of business under the following commercial brands:

I. Energy Technologies & CO2 Systems

II. Oil & Gas Equipment Supply and Service

III. Fertilizer and Grain Handling Solutions

HTC is participating in the above three market sectors for commercialization based on their strong potential for immediate revenue growth and profitability.

In this MD&A, we provide a general overview of each of the market sectors and discuss the brand development and future potential for each of the three market sectors.

I. Energy Technologies and CO2 Systems Market Sectors

Companies doing business in the energy industry are looking for cost effective methods and new energy technologies to produce their products, while at that same time being environmentally sustainable and profitable. The Energy Technologies and CO2Systems Market Sector mandate is to develop and commercialize the technologies that satisfy these requirements and to commercialize this product offer world-wide. HTC has developed cost effective energy technologies and CO2 capture solutions for the power generation, oil and gas and industrial food grade CO2 markets that are easier to build, operate and maintain.



Modular Purenergy CCS® CO2 Capture Systems:

�Pre-engineered Modular Design, post-combustion CO2 capture system, customized to site requirements of regional and global oil and gas producers, electricity producers, industrial processors, and other CO2 emitters.�

The HTC CO2 Systems Purenergy CCS®

Capture System offers an economically viable, commercial scale CO2 capture system for industries seeking �Purenergy Solutions� in oil and gas, power generation, industrial chemical processing, cement production, and many other industrial and food grade applications. The CCS Purenergy® Capture System is a fully validated and optimized product of

technology aggregation and testing programs and is a recognized global brand in providing CO2 capture solutions. It is also a result of a multi-year collaboration with leading research institutions, Canadian and International engineering groups, world recognized engineering-procure-construct (�EPC�) companies, and original equipment manufacturers (�OEM�).

HTC CO2 Systems continues to focus its efforts on the development of smaller scale modular CO2 capture primarily from OTSG (Once Through Steam Generators) boilers used in SAGD (Steam Assisted Gravity Drainage), CSS (Cyclic Steam Stimulation), and Oil Sands projects or from natural gas turbines for use in expanded oil recovery and for small industrial purposes. The development of these industry specific units in conjunction with its business partners should provide a potential market that will be more readily accessible, more immediate than larger scale projects, and subject to less impact by worldwide economic issues and delays in climate change legislation. The CO2Capture & Management Group continues to evaluate other industry specific areas where the existing technology can be adapted, such as the use of CO2 in oil and gas development for hydraulic fracturing purposes.

The HTC TKO� and RS� capture technologies are now being incorporated into commercial food grade CO2 capture systems manufactured by Messer ASCO of Switzerland and New Zealand. Messer ASCO will be commercially supplying HTC



designed products and solvents to global food grade CO2 markets such as breweries and beverage manufacturers in 2013.

SRS Solvent Reclaimer System in operation in California

Solvent Management Reclaimer System (�SRS�) � - Reclaimers (much like the human kidney), are required to remove the degradation products and suspended solids from the solvents used in the CO2 capture process. The optimal solvent blend for a particular CO2 capture application may be a blend of various different chemicals based on the composition and conditions of the gas being processed. HTC has developed a proprietary multi-phased reclaimer for mixed amines that can manage different solvent blends that may have different boiling points. By being able to manage and reclaim these mixed amines, the CO2 capture plant owner can significantly reduce the day to day operating costs of the plant. The SRS Solvent Reclaimer System will have finished final testing and be ready for commercialization by the fourth quarter of 2013.

II. Oil & Gas Equipment Supply and Services Market Sector

The Oil and Gas Equipment Supply and Service Market Sector has and continues to be a strong growth market in Western Canada and the United States. The sector is focused on providing a complete product line of manufactured oil field equipment and



services for oil and gas producers and drilling service contractors in Western Canada and the North Central and North Eastern United States.

Oilfield equipment manufactured at locations in Regina Sask., Carseland Ab., and Davenport Iowa

The divisions� 100 plus employees bring to the oil and gas supply market sector key technologies, manufacturing capacity, procurement capability, process design, and in-field service know-how. The sector has more than 100,000 square feet of �in-house� fabrication, manufacturing, coatings and painting, and product design facilities. A new United States manufacturing operation has been opened subsequent to year end in Davenport, Iowa and will provide an additional 32,000 sq. ft. of manufacturing space. The new USA operations will take advantage of more cost effective infrastructure and labour costs. The new manufacturing facility is strategically located between the division�s two largest markets in the United States; the Marcellus gas play and the Bakken oil play. These new facilities will effectively double the production capacity of the oil & gas equipment supply operations.



Oil & Gas Equipment Supply and Services

SteelBlast completed insulated frack water tank



New Manufacturing facilities � 32,000 sq. ft. Davenport Iowa.

III. Fertilizer and Grain Handling Solutions Market Sector

Today�s high yield fertilizers used in the increasingly larger corporate farming operations in Western Canada, demand sophisticated fertilizer blending systems that can provide the required fertilizer blend in a timely and cost efficient manner. The Fertilizer and Grain Handling Solutions Market Sector is riding the wave of increased demand for high throughput, high capacity, fertilizer blending and grain handling in rural Western Canada.



NuVision Fertilizer Handling Plant

NuVision Fertilizer Handling Solutions offers a superior line of fertilizer handling and blending facilities for the Western Canadian market. It operates out of two facilities: Carseland Alberta and Regina Saskatchewan. Both of these locations can design, build, retrofit, and service new and existing fertilizer plants. NuVision Fertilizer Handling Solutions is considered to be one of the leaders in building and servicing fertilizer plants in Western Canada, with over 20 years� experience, and a significant number of successfully installed Fertilizer Handling Systems.



GrainMaxx� � Telescopic Swing Augers

As larger corporate farms look to increase their commercial efficiencies, GrainMaxx�has taken the grain handling market to a new level with its new GrainMaxx� brand of telescopic swing augers. The GrainMaxx� auger provides one operator with the capability to fully manage the grain loading and unloading process using a newly developed fully integrated telescopic swing auger technology. In addition, the unique GrainMaxx� telescopic swing auger system allows one operator to position the auger under the grain truck using an advanced �reach and retract� hydraulic motor drive system. Most other auger systems would require a minimum of two operators to position the auger on the grain bin and truck for correct loading and unloading. GrainMaxx�markets its full line of grain augers through an extensive dealer network.

Additional Information on HTC�s Commercial Brands

Information on Energy Technologies & CO2 Systems division can be viewed at: www.htcco2systems.comInformation on Oil & Gas Equipment Supply and Service division can be viewed at: www.maxxenergy.ca and www.pinnacleindustrial.comInformation on the Fertilizer and Grain Handling Solutions division can be viewed at: www.nuvisionfhs.com and www.grainmaxx.com



2013 Commercial Objectives and Milestones

During the 2013 fiscal year, each of the Corporation�s operating Market Sectors will pursue the primary objectives set out below:

Energy Technologies & CO2 Systems Market Sector Strengthen existing relationship with Doosan Power Systems (�Doosan�) who will

play a pivotal role in the construction of large CO2 capture facilities and new coal plants, and actively pursue contacts in specific local markets.

Build and commission food grade CO2 capture system with Messer ASCO. Expand portfolio of products offered into 3-4 standard sizes.

Expand market presence in EOR and heavy oil markets with the Corporations Western Canadian manufacturing partners.

Complete testing of SRS� Solvent Reclaimer System and launch as a commercial product.

Oil & Gas Equipment Supply and Services Market Sector Expand product sales into USA markets, using new Davenport facility as a

manufacturing and marketing hub. Establish new relations globally that are directed at enhancing and expanding the

suite of energy related technologies and products being offered to the oil and gas industry.

Develop new product lines that will service the existing oil and gas industry. Expand discussions with international oil and gas production and manufacturing

companies with regard to expanding their operations into Canada, with a focus on heavy oil land acquisition, new technology introduction and production.

Fertilizer and Grain Handling Solutions Market Sector Enhance brand development and collateral for Fertilizer and GrainMaxx product

lines. Expand dealer network Improve production efficiency.

Technology Development

Develop new oil loading technology for rail systems. Design and build new oil production and well servicing equipment. Complete the integrated engineering, build, and introduction of the HTC modular

CO2 Capture System. Continue the process of identifying and reviewing commercially available solvents

used in our CO2 capture systems to help improve the efficiency of our systems and develop a relationship with a solvent research institution.

Complete and optimize the designer solvent HTC SRS� Solvent Reclaimer System.



DISCUSSIONS OF HTC�s 2012 FINANCIAL RESULTS

SELECTED ANNUAL INFORMATION

Information provided in the table is prepared in accordance with IFRS. Management does not believe that there is a material difference arising as GAAP policies were, for the most part, convergent with IFRS and adoption methodology bridged any material differences (see further discussion).

In Canadian Dollars Year ending Dec 31, 2012

Year ending Dec 31, 2011

Year ending Dec 31, 2010

Total Revenue 29,679,041 2,163,799 3,358,591

Income (Loss) from Operations

(284,692) (2,370,643) (1,547,793)

Net Loss (1,424,934) (8,978,287) (1,374,479)

Loss, on a per-share basis* (.07) (.49) (.08)

Loss, on a per-share basis diluted**

_ - -

Comprehensive Net Loss (1,290,269) (9,326,420) (1,563,009)

Total Assets 25,245,567 13,801,406 23,063,286

Total Long-Term Financial Liabilities

744,851 NIL NIL

Operating Lease payments Base rent

61,229 119,171 110,000

Cash Dividends Declared per-share

NIL NIL NIL

* Loss per common share has been calculated using the weighted average number of common shares outstanding.

** Diluted net loss per common share is not presented for the balance of the schedule, as the effect of common share options would be anti-dilutive.



SUMMARY OF QUARTERLY RESULTS

Information provided in the table is prepared in accordance with IFRS. Management does not believe that there is a material difference arising as GAAP policies were, for the most part, convergent with IFRS and adoption methodology bridged any material differences (see further discussion).

In Canadian Dollars

3 months ending Dec. 31,

2012 Audited

3 months ending Dec. 31,

2011 Audited

3 months ending

Sept. 30, 2012

Unaudited

3 months ending

Sept. 30, 2011

Unaudited

3 months ending

June 30, 2012

Unaudited

3 months ending

June 30, 2011

Unaudited

3 months ending

March 31, 2012

Unaudited

3 months ending

March 31, 2011

Unaudited

Total Revenues 8,787,390 759,590 6,400,583 191,526 7,980,829 976,253 6,510,239 236,430

Net Income (Loss) after unusual items and equity investments

(2,224,576) (6,879,272) 247,472 (866,397) 623,130 (376,726) (70,960) (855,892)

Total Assets 25,245,567 13,801,406 26,720,717 20,701,437 26,950,154 22,410,662 25,738,492 22,423,293

Long Term Liabilities

744,851 Nil 1,647,331 Nil 1,642,292 Nil 1,634,258 Nil

Shareholder Equity

17,527,003 13,554,298 19,982,694 20,472,468 19,285,505 22,020,066 17,155,685 22,173,250

Cash flow from Operations

(463,569) (88,953) 1,210,838 (521,094) (456,979) (604,027) 987,921 (309,398)

Increase (decrease) in Cash

1,371,887 1,859,584 977,501 (98,762) 571,173 94,670 502,148 83,183

Net Income (Loss), in total, on a per-share basis*

(.09) (.38) .01 (.05) .03 (.02) (.05) (.006 )

Net Income (Loss), in total, on a per-share basis diluted*

- - - - - - - -

Weighted Average common shares

23,692,347 17,959,195 22,527,767 17,959,195 21,915,239 17,959,195 17,959,195 17,959,19

* Profit (Loss) per common share for the periods has been calculated using the weighted average number of common shares outstanding during the respective periods. Diluted net loss per common share is not presented for the balance of the schedule, as the effect of common share options would be anti-dilutive.



PER SHARE AMOUNTS:

Basic net earnings (loss) per common share have been calculated using the weighted average number of common shares outstanding during the Year of 21,581,661(December 31, 2011 -17,959,195) and fully diluted shares during the Year of 25,331,661 (December 31, 2011 - 19,808,379

For the year ended Dec. 31, 2012

(Audited)

For the year ended Dec. 31, 2011

(Audited)

(Loss) per common share $(0.07) $(0.49)

Fully Diluted net loss per common share is not presented, as the effect of common share options would be anti-dilutive.

REVENUES

For the Year the Corporation had operating revenue of $29,679,041 (2011 � $2,163,799). The substantial increase in revenues is attributable to the acquisition of an additional 20% of Maxx bringing the Corporation�s interest to 65% and resulting in a change from Equity accounting for 2011 to Consolidation in 2012. Revenues primarily relate to Maxx subsidiary operations. Consulting services in 2011 included fees received from the Corporation�s equity investee.

OPERATING EXPENSES

Costs of sales reflect manufacturing and sales costs associated with Maxx and its subsidiaries. The new disclosure results from the change to Consolidation from Equity.

Engineering and process design services include costs associated with the provision of engineering services. These amounts will vary with activity and with allocation to respective categories. Services for the Year were $478,536 as compared to $931,675 for the prior year. The change is a result of the nature of services, as well as how far the projects have progressed. A significant portion of costs associated with the generation of these revenues remains in the commercialization category below.

Commercialization, product development and administrative expenses for the Year were $8,832,334 as compared to $3,018,981 for the prior year. The increase in 2012 is primarily due to the consolidation of Maxx subsidiaries as well as more activity around product commercialization costs associated with new initiatives.

Research and development expenses for the Year were $0 as compared to $172,765 for the previous year. The decrease in research and development expense is attributable to reallocation of resources internally and emphasis on commercial development of units for the oil and gas sector. Doosan�s construction of test facilities during 2011 also



impacted research spending in part because some of these costs are now being incurred by Doosan and because it was necessary to delay certain aspects of research and development while the units were being built (note: for the Year $160,598 of development costs incurred were capitalized and are not included in the Year amounts).

A significant portion of expenses, in the amount of $307,145 ($333,840 in 2011) represents amortization of product development costs, patents and intangibles associated with the acquisitions of subsidiaries. The remaining amortization is attributable to tangible assets.

INTEREST & OTHER INCOME (EXPENSE)

The Corporation recorded bank interest earned on short and long term investments and other income for the Year of $2,906 (2011 - $48,854). The reduction represents the decrease in cash held for investment.

Stock based compensation expense of $144,000 ($20,543 in 2011) represents a fair value estimate established by applying Black Scholes modeling to predict the value associated with options on the basis that they may be exercised before expiration. There is no cash consideration associated with the granting of these options. At the time options were awarded the exercise price was for a higher amount than the stock trading value. There is no cash outflow associated with this amount. The offset to this amount is reflected as an increase in contributed capital. This means the net impact on equity when considered as a whole is Nil due to the fact that the amount reflected as an expense and impacting retained earnings is offset by the corresponding amount in contributed capital.

OPERATING LOSS

For the Year, the Corporation had a loss of $284,692 from operations as compared to a loss of $2,370,643 from operations for the prior year. The change from last year is primarily attributable to the consolidation of Maxx as well as overall improvements in Maxx operations.

ADJUSTMENT TO CARRYING VALUE OF GOODWILL AND INTANGIBLES As a result of the completion of its annual review of goodwill and intangibles, as well as Management�s evaluation of Cash generating units as defined by IFRS and impairment testing requirements, goodwill and intangibles associated with operations that were discontinued during or at the completion of the 2011 year were written down by $5,557,340. This adjustment does not involve cash. There were no adjustments of this nature in respect to the Year. At December 31, 2012, intangibles subject to amortization of $1,254,120 net of accumulated amortization of $271,726 relating to CO2 Technologies Pty. Ltd. were transferred to available for sale assets.

IMPAIRMENT IN VALUE OF AVAILABLE FOR SALE INVESTMENT During the Year Management completed evaluation of the carrying value of its investment in Global Energy, Inc. Global is a private company, and as such, available information as well as third party information is somewhat limited. As a result of a



review of available information at the time, Management felt that the investment to be carried may be too high due to some uncertainties surrounding Global�s financial position in relation to the estimated fair value of assets received (including trades stock) in exchanged for coal reserves held in 2011. Accordingly a reduction to the carrying value of $914,085 ($918,175 in 2011) was considered appropriate. This adjustment does not involve cash.

INCOME FROM EQUITY INVESTMENTS

There is no income from Equity Investments in respect to the Year as the Corporation acquired control of Maxx and now reports its interest in the consolidated statements. Income from Equity Investments for the 2011 year was $(132,129) after considering provision for tax and the elimination of unrealized inter-corporate profits.

NET LOSS AND COMPREHENSIVE LOSS

Net loss for the Year was $1,424,934 compared to a loss of $8,978,287 in the prior year. The improvement in income is primarily attributable to the adjustments in the prior year relating to intangibles goodwill and available for sale assets as well as the impact of the consolidation of Maxx Energy Solutions Corp. (�Maxx Energy�) and the improvements in their subsidiary operations.

The unrealized gain on financial assets available for sale was $130,655 versus a loss of $348,133 in 2011 and represents the net change in the carrying value of the investment in EESTech Inc. and USA Synthetic Fuel Corporation to the quoted value in a limited market. This adjustment does not involve cash.

Comprehensive net loss for the Year is $1,290,269 after considering the effects of the unrealized loss above as compared to a comprehensive net loss of $9,326,420 in the prior year. As noted above these adjustments do not involve cash.

TOTAL ASSETS

Total assets were $25,245,567 as at December 31, 2012, as compared to $13,801,406 as at December 31, 2011. The primary reasons for the increase is the adoption of consolidation on Maxx operations resulting in the recognition of Maxx and its subsidiaries in the financial statements.

Available for Sale AssetsThis represents EHR Enhanced Hydrocarbon Recovery Inc. (�EHR�) assets, not eliminated through consolidations, that have been reclassified as available for sale as EHR was sold January 29, 2013. Intangibles, subject to amortization of $1,254,120 net of accumulated amortization of $271,726, relating to CO2 Technologies Pty. Ltd. were transferred to available for sale assets.

The Corporation has capitalized development costs relating to the CCS Purenergy® CO2Carbon Capture System of $362,427 net of amortization ($404,712 in 2011), its Mixed



Amine Solvent Reclaimer of $449,757 net of amortization ($290,219 in 2011), and its CCS FEEDengine® of $162,831 net of amortization ($181,440 in 2011). EHR Rising Bubble Apparatus costs accumulated to December 31, 2011 were $24,201. In 2012 the EHR Rising Bubble Apparatus was transferred to available for sale assets.

Expensed research and development costs and commercialization, product development, general and administration expenses are included in the Corporation�s December 31, 2012 audited consolidated financial statements. Total accumulated research and development costs expensed from December 23, 2004 to December 31, 2012 are $3,203,862. Research and development costs incurred by subsidiaries prior to their acquisition are not included in this amount nor are costs incurred directly by HTC�s collaborative technology development research institutions.

CURRENT LIABILITIES

Current liabilities were $6,973,713 as at December 31, 2012, compared to $247,108 as at December 31, 2011. The increase is largely due to the addition of Maxx trade payables from operations and the current portion of long term debt (to the end of December 2012).

LONG TERM DEBT

Long term debt of $744,851 arises from requirement to consolidate Maxx�s existing debt.

SHAREHOLDERS� EQUITY

As at December 31, 2012 shareholders� equity was $17,527,003, compared to $13,554,298 as at December 31, 2011. The increase is largely attributable to the consolidation of Maxx and the recognition of minority interest of $3,622,249.

Non-controlling interest represents amounts arising from the minority positions of Maxx and EHR Enhanced Hydrocarbon Recovery Inc. that are not held by HTC.

CASH FLOW

Cash flows from operating activities were $1,278,211 for the Year, compared to $(1,523,472) for the same period of 2011. The increase primarily results from the consolidation of Maxx.

CHANGE IN CASH POSITION

Changes in cash position between December 31, 2012 and December 31, 2011 are largely attributable to the consolidation of Maxx and the self- financing element of the Maxx acquisition.



LIQUIDITY

The Corporation possesses adequate capital to meet its obligations. The Corporation will continue to raise capital to forward its plans of intellectual property protection, continued research and development, demonstration plants, acquisition of complementary technologies and commercialization of these developed and aggregated technologies.

COMMITMENTS

On November 15, 2011, the Corporation relocated its offices and is currently on a month to month lease with monthly rent at $5,485.00.

HTC is engaged in a license dispute with one of its CO2 capture technology providers. The commercial effect and outcome of this license technology dispute cannot be determined at this time.

CAPITAL RESOURCES

Share capital: Authorized: An unlimited number of common shares An unlimited number of preferred shares

As at Dec. 31, 2012 As at Dec. 31, 2011 Common Shares Number Amount Number Amount

Balance, beginning of period 17,959,195 36,542,214 17,959,195 36,542,214Shares issued 6,100,000 1,461,000

Balance, end of period 24,059,195 38,003,214 17,959,195 $36,542,214

The Corporation has no issued or outstanding preferred shares. The Corporation is authorized to issue one or more series of non-voting, participating in preference to common shares, eligible, preferred shares.

Stock options and warrants: The Corporation has a stock option plan for directors, officers, employees and consultants providing for the issuance of options to acquire up to ten percent of the issued and outstanding common shares of the Corporation. The following table reflects the stock option and warrants activity from January 1, 2011 through December 31, 2012 and the weighted average exercise price:



As at Dec. 31, 2012 As at Dec. 31, 2011 Options Avg. Price Options Avg. Price

Outstanding, and exercisable, beginning of period

1,849,184 $ 1.00 1,720,000 $ 2.13

Expired and cancelled (i) (849,184) 1.04 (1,520,000) 1.78

Stock options granted (ii) 1,400,000 0.12 1,649,184 .52Stock warrants granted (iii) 1,350,000 0.17

Outstanding and exercisable, end of period 3,750,000 $ 0.42 1,849,184 $ 1.00

i. On August 7, 2011, the Corporation cancelled 300,000 stock options granted on November 24, 2008.

On June 14, 2010 the Corporation granted 1,340,000 stock options to four directors and an officer of the Corporation, at a price of $1.00 per common share with 1,170,000 options vesting in 2010, and with 100,000 and 70,000 vesting in 2011 and 2012 respectively,. During the period ending September 30, 2011, an additional 50,000 options vested. The stock options were cancelled on August 7, 2011. On July 9th 2012, 100,000 warrants at a price of $3.00 granted on December 15, 2009 were cancelled. On September 25, 2012, 359,184 stock options with a price of $0.50 granted on August 10, 2011 were cancelled. On November 25, 2012 400,000 stock options with a price of $0.50 granted August 10, 2012 were cancelled.

ii. On August 9, 2011, the Corporation granted 1,599,184 stock options at an exercise price of $0.50. The stock options will expire on August 8, 2021 or such earlier date on which the stock options are exercised. The grant and the terms and conditions of the stock option agreements were approved by the board of directors of HTC and the TSX Venture Exchange Inc. During the period ending September 30, 2011, an additional 50,000 options granted on September 14, 2010 vested. On October 26, 2012 and November 26, 2012 the Corporation granted 1,000,000 and 400,000 stock options to key management personal of the Corporation at a price of $0.12 and $0.13 respectively. The stock options will expire on October 26, 2017 and November 26, 2017.

iii. On October 25, 2012, the Corporation issued 1,350,000 common voting shares at a price of $0.13 per share and 1,350,000 warrants with and exercise price of $0.17 pursuant to a private placement.

The Black Scholes Option Pricing Model is used to estimate the fair value of stock options for calculating stock based compensation expense. The Corporation recognized a stock based compensation expense and an increase to contributed surplus based on the vesting schedule of the option, based on the following assumptions:



Stock OptionsDate Granted Oct 26, 2012 Nov 26, 2012 Aug 9, 2011Number of options granted 1,000,000 400,000 1,599,184

Risk free interest rate 1% 1% 3%Expected dividend yield NIL NIL NilExpected stock price volatility 62% 57% 80%Expected option life in years 5 5 10Estimated forfeiture before exercise

Unknown Unknown Unknown

Warrants Date Granted Oct 26, 2012Number of options granted 1,350,000

Risk free interest rate 1%Expected dividend yield NILExpected stock price volatility 62%Expected option life in years 5Estimated forfeiture before exercise Unknown

Option pricing models require the input of highly subjective assumptions including the expected price volatility. Change in the subjective input assumptions can materially affect the fair value estimate, and therefore the existing models do not necessarily provide a reliable single measure of the fair value of the Corporation�s stock options.

The total fair value of stock based compensation expense on stock options granted to directors, employees and consultants of the Corporation as at December 31, 2011 was $505,543 relating to the issuance of June 14, 2010.

The total fair value of stock based compensation expense on stock options granted to directors, employees and consultants of the Corporation and cancelled during 2012 without replacement (IFRS 2) was $129,306. Fair value associated with new issuances was $36,000 for 2012.

The total fair value of stock based compensation expense on warrants granted was $108,000.

OFF-BALANCE SHEET ARRANGEMENTS

The Corporation has no off balance sheet arrangements.

RELATED PARTY TRANSACTIONS

Related party transactions include management fees received from the Corporation�s equity accounted investee (Maxx), and transactions with corporate investors (see footnote a. below) who have representation on the Corporation�s board. The revenue and costs recognized with such parties reflect the prices and terms of sales and purchase of transactions with related parties in accordance with normal trade practices.



Dec. 31, 2012 Dec. 31, 2011Balance with related Parties:

Accounts Receivable - 1,517,231Accounts Payable - 1,100

Transactions with related parties: Consulting revenue � equity investee - 930,600Subcontract revenue (a) 41,197 615,454Purchases � equity investee 7,921 12,899Misc. Revenue - 8,159

a. Subcontract revenue relates to engineering services and CO2 capture feed studies provided by the Corporation to Doosan, who is considered a related party due to its representation on the Corporation�s board.

PROPOSED TRANSACTIONS

On April 12, 2013, the Corporation announced that, conditional upon TSX Venture Exchange Inc. approval, it plans to issue up to 2,000,000 units at a price of $0.125 per unit, for the gross proceeds of $250,000. Each unit will consist of one common share and one common share purchase warrant. Each warrant will entitle the holder to purchase one common share of HTC at $0.17 per common share for a period of 5 years after the date of issuance.

CRITICAL ACCOUNTING ESTIMATES

GOODWILL AND INTANGIBLE ASSETS Goodwill impairment is tested at the CGU level and is determined based on the recoverable amount exceeding the CGU�s carrying amount. The recoverable amount is the higher of fair value less cost to sell (FVLCS) and value in use (VIU). VIU is generally determined using the discounted cash flow method. If the impairment loss exceeds the carrying amount of goodwill, the goodwill is written off completely. Any impairment loss left over is allocated to the remaining assets of the CGU. The values assigned to the key assumptions represent management�s assessment of future trends in the energy services industry and are based on the external and internal sources, including historical data. The calculation of the VIU was based on the following key assumptions:

Cash flows were projected based on experience, actual operating results and the operational plan for the immediate year. Cash flows were projected using a growth rate of 2%.

Each CGU�s pre-tax discount rate of 10% reflects its individual size, risk profile and circumstance and is based on experience and the industry�s average weighted-average cost of capital.

At December 31, 2012, annual impairment tests for goodwill were conducted and it was determined that there was no impairment of goodwill in any CGU as the recoverable amount for each was higher than its respective carrying amount.



Goodwill

Intangible assets subject to amortization Total

Cost Balance at January 1, 2011 $ 3,678,195 $ 7,978,564 $ 11,656,759 Business acquisitions - - - Write down (3,678,195) (1,879,145) (5,557,340) Balance at December 31, 2011

- 6,099,419 6,099,419

Business acquisitions 8,664,201 204,200 8,868,401 Write down - - - Transferred to available for sale asset - (1,254,120) (1,254,120) Balance at December 31, 2012

$ 8,664,201 $ 5,049,499 $ 13,713,700

Accumulated amortization Balance at January 1, 2011 - 3,548,926 3,548,926 Amortization for the year - 324,581 324,581 Balance at December 31, 2011

- 3,873,507 3,873,507

Amortization for the year - 174,568 174,568 Transferred to available for sale asset - (271,726) (271,726) Balance at December 31, 2012

- 3,776,349 3,776,349

Carrying amounts At December 31, 2011 - 2,225,912 2,225,912 At December 31, 2012 8,664,201 1,273,150 9,937,351

Amortization in the amount of $174,577 in 2012 and 324,581 in $ 2011 have been included in the Consolidated Statement of Comprehensive Income under the caption Amortization.

Management performed an analysis of the carrying value of its goodwill and intangible assets as at December 31, 2012, according to its policy as set out in Note 4. In respect to the 2012 year Management evaluated goodwill and intangibles under the same criteria but adjusting for operational, legislative and business conditions that changed during the year

Goodwill and intangible assets were recorded on acquisition of the subsidiaries. IFRS requires identifiable intangible assets that meet recognition criteria be identified, valued and disclosed separately from goodwill. Items giving rise to intangibles and related goodwill include, but are not limited to: intellectual property (i.e. rights to provisional patents, technology rights software rights), contractual rights with advantageous conditions, human resources (i.e. research teams, project



management, patent resources), and branding and name recognition related items (literature, data base, videos, domain names, etc.) as well as various other items. Goodwill comprises the difference between the purchase price of the respective subsidiary and identifiable net tangible and intangible assets. At December 31, 2012, intangibles subject to amortization of $1,254,120 net of accumulated amortization of $271,726 relating to CO2 were transferred to available for sale assets.

EQUITY INVESTMENT

In 2011, the Corporation had a 45% voting interest in Maxx and accounted for its investment using the Equity method. In 2012 the Corporation acquired an incremental 20% and now Consolidates operations.

OPERATING SEGMENTS:

As a result of the incremental ownership of Maxx, the Corporation now has two reportable operating segments: HTC CO2 Systems Corp. and Maxx.

These operating segments are differentiated by the product and services that each produces.

HTC CO2 Systems

Maxx Combined

Sales - 29,606,078 29,606,078

Engineering, process design and consulting 72,963 72,963

Cost of Sales 19,860,086 19,860,086

Engineering and Process design services 478,536 478,536

Commercialization, product development and administration 1,968,803 6,863,531 8,832,334

Amortization 315,349 336,334 651,683Income (loss) from commercial operations (2,689,725) 2,546,127 (143,598)

HTC CO2Systems

Maxx Combined

Property and Equipment 217,141 1,679,767 1,896,908Goodwill and intangible assets 1,273,150 8,664,201 9,937,351



DIRECTOR AND OFFICER COMPENSATION

During the Year the Corporation paid director compensation in the amount of $4,000 ($3,000 in 2011) to directors, for attendance of Board and committee meetings.

Key management personnel includes those persons that have the authority and responsibility for planning, directing and controlling the activities of the Corporation, directly or indirectly. Compensation for the Year was $377,500 and $502,533 (December 31, 2011). In addition to their salaries, senior management and directors also participate in the Corporation�s share-based compensation plans.

SUBSEQUENT EVENTS

On January 10, 2013, the Corporation issued 1,500,000 units at a price of $0.11 per unit, for the gross proceeds of $165,000. Each unit consists of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one common share of HTC at $0.14 per common share for a period of 5 years after the date of issuance. In accordance with agreements reached with Chenglin High-Tech Industry Co., Ltd. (�Chenglin�) of China. HTC and its Maxx subsidiaries will reorganize assets to facilitate the setup of Maxx Chenglin Energy Products and Services Ltd. Under the terms of the agreements Pinnacle will roll in various assets in exchange for shares, HTC will transfer its interest in CO2 Technologies Pty Ltd. for share consideration and Chenglin will inject cash consideration of 2 million dollars. At completion HTC will own approximately 28% directly and approximately 18% indirectly through Maxx. On January 29, 2013 the Corporation sold 12 million Class A common shares of EHR for consideration of 6 million common shares in Kingsland Energy Corp. and providing a $1.4 million secured, convertible debenture. Shares issued are subject to a hold period under securities law until May 30, 2013 and also subject to the same resale restrictions as founding Kingsland Energy Corp. shareholders under the terms of a pooling agreement until December 19, 2016. On March 27, 2013 the Corporation granted 250,000 stock options at an exercise price of $0.135 per share to an officer of HTC. The stock options will expire on March 26, 2018 or such earlier date on which the stock options are exercised. In addition the Corporation cancelled 300,000 options issued October 8, 2011 at an exercise price of $0.50 per share. On April 4, 2013 granted 350,000 stock options at an exercise price of $0.135 per share to a director of HTC. The stock options will expire on April 3, 2018 or such earlier date on which the stock options are exercised. In addition the Corporation cancelled 300,000 options issued October 8, 2011 at an exercise price of $0.50 per share.

On May 1, 2013 the Corporation issued 750,000 units to two subscribers, at a price of $0.12 per unit, for the gross proceeds of $90,000. Each unit consists of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one common share of HTC at $0.165 per common share for a period of 5



years after the date of issuance. The common shares issued are subject to a hold period under applicable securities law until September 2, 2013.

On May 3, 2013 the Corporation cancelled 150,000 stock options issued in November 2008 to a former consultant, and granted 250,000 stock options at an exercise price of $0.135 per share to a director of HTC. These stock options will expire on May 2, 2018 or such earlier date on which the stock options are exercised. The grant and the term and conditions of the stock option agreement have been approved by the board of directors of HTC, and are subject to TSX Venture Exchange Inc. approval. The Corporation now has 2,500,000 stock options issued and 130,920 reserved for issuance under its stock option plan.

ADDITIONAL INFORMATION ON HTC HTC invites you to review current and historical press releases and News Express releases. This material can be viewed on the Corporation�s web site at www.htcenergy.com/news.html.

RISKS AND UNCERTAINTIES

Risks and uncertainty relate to dependence of CO2 emitters being legislated or provided incentive, to adapt CO2 capture technology and the price of oil for adoption of CO2 EOR.

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements, and the reported amounts of revenues and expenses during the Year.

Significant items subject to estimates and assumptions include: the carrying amounts of goodwill and intangible assets, product development, underlying estimations of useful lives of depreciable assets, capitalization of interest, the carrying amounts of accounts receivable, investments, fair value of financial instruments, and environmental remediation and contingent liabilities, if any.

The financial statements are based on management�s best estimates using information available. Uncertainty regarding the timing of anticipated large scale market demand for carbon capture technology, related legislative incentives, and uncertainty in financial markets has complicated the estimation process. Accordingly, the inherent uncertainty involved in making estimates and assumptions may impact the actual results reported in future periods by a material amount.



CHANGE IN ACCOUNTING PRINCIPLES

FUTURE CHANGES IN ACCOUNTING PRINCIPLES

Changing IFRS standard

IFRS has various developmental projects and is in the process of modifying existing standards and introducing new standards, these standards will be adopted as they are issued. The following new standards and amendments or interpretations to existing standards have been published.

IFRS 9, Financial Instruments In November 2009, the IASB issued guidance on the classification and measurement of financial assets. Under IFRS 9, financial assets will generally be measured initially at fair value plus particular transaction costs, and subsequently at either amortized cost or fair value. In October 2010, the IASB issued additions to IFRS 9 relating to accounting for financial liabilities. Under the new requirements, an entity choosing to measure a financial liability at fair value will present the portion of any change in its fair value due to changes in the entity�s own credit risk in other comprehensive income (�OCI�), rather than within net income. In December 2011, the IASB issued amendments which modify the requirements for transition from IAS 39 to IFRS 9. The modifications introduce new disclosure requirements and eliminate the requirement to restate prior periods to reflect the new presentation. The standard is to be applied prospectively and will be effective for periods commencing on or after January 1, 2015, with earlier application permitted. The Corporation does not expect the amendments to have a material impact on the Consolidated Financial Statements.

IFRS 10, Financial Statements, Requires an entity to consolidate an investee when it has power over the investee, is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Under existing IFRS, consolidation is required when an entity has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. IFRS 10 replaces SIC-12, Consolidation-Special Purpose Entities and parts of IAS 27, Consolidated and Separate Financial Statements. The standard is not applicable until January 1, 2013 but is available for early adoption. The Corporation does not expect the amendments to have a material impact on the Consolidated Financial Statements.

IFRS 11, Joint arrangements, This standard (issued May 12, 2011) requires a venture to classify its interest in a joint arrangement as a joint venture or joint operation. Joint ventures will be accounted for using the equity method of accounting whereas for a joint operation the venture will recognize its share of the assets, liabilities, revenue and expenses of the joint ventures. IFRS 11 supersedes IAS31, Interests in Joint Ventures and SIC-13, Jointly Controlled Entities-Non-monetary Contributions by Ventures. The standard is not applicable until January 1, 2013 but is available for early adoption. The Corporation does not expect the amendments to have a material impact on the Consolidated Financial Statements.



IFRS 12, Disclosure of Interest in Other Entities In May 2011, the IASB issued guidance relating to the disclosure requirements of interests in other entities. IFRS 12 is a new and comprehensive standard on disclosure requirements for all forms of interest in other entities, including subsidiaries, joint arrangements, associates and unconsolidated structured entities. The standard is to be applied prospectively and is effective for annual periods commencing on or after January 1, 2013, with earlier application permitted. The Corporation does not expect the amendments to have a material impact on the Consolidated Financial Statements.

IFRS 13, Fair Value Measurement In May 2011, the IASB issued guidance establishing a single source for fair value measurement. IFRS 13 defines fair value, sets out a framework for measuring fair value and introduces consistent requirements for disclosures on fair value measurements. It does not determine when an asset, a liability or an entity�s own equity instrument is measured at fair value. Rather, the measurement and disclosure requirements of IFRS 13 apply when another IFRS requires or permits the item to be measured at fair value, with limited exceptions. The standard is to be applied prospectively and is effective for annual periods commencing on or after January 1, 2013, with earlier application permitted. The Corporation does not expect the amendments to have a material impact on the Consolidated Financial Statements.

Amendments to IAS 1, Presentation of Financial Statements In September 2011, the IASB issued amendments to IAS 1 requiring items within OCI that may be reclassified to the profit or loss section of the income statement to be grouped together. The amendments are to be applied retrospectively and are effective for annual periods commencing on or after July 1, 2012, with earlier application permitted. The Corporation does not expect the amendments to have a material impact on the Consolidated Financial Statements.

Amendments to IAS 32, Offsetting Financial Assets and Financial Liabilities and IFRS 7, Disclosures In December 2011, the IASB issued amendments to IAS 32 and IFRS 7 as part of its offsetting project. The amendments clarify certain items regarding offsetting financial assets and financial liabilities and also address common disclosure requirements. The amendments are to be applied retrospectively and will be effective for annual periods commencing on or after January 1, 2013 for IFRS 7 and January 1, 2014 for IAS 32, with earlier application permitted. If IAS 32 is early adopted, the disclosures required by the amendments to IFRS 7 must be provided. The Corporation does not expect the amendments to have a material impact on the Consolidated Financial Statements.

FINANCIAL INSTRUMENTS

The Corporation classifies its financial instruments into one of the following categories: held for-trading; held-to-maturity; loans and receivables; available-for-sale; and other liabilities. All financial instruments are measured at fair value on initial recognition. Transaction costs are included in the initial carrying amount of financial



instruments except for held-for-trading instruments in which case the transaction costs are expensed as incurred. Measurement in subsequent periods is based on the classification of the financial instrument.

Financial assets and liabilities classified as held-for-trading are measured at fair value with gains and losses recognized in net income. Financial assets held-to-maturity, loans and receivables and financial liabilities other than those held-for-trading, are measured at amortized cost using the effective interest rate method. Available-for-sale instruments are measured at fair value with unrealized gains and losses recognized in other comprehensive income. Where the fair value of financial assets that are equity instruments is not determinable because there is no active market for the instrument, the asset is carried at cost and tested annually for impairment.

The Corporation�s financial instruments consist of cash and cash equivalents, short term investments, accounts receivable, bank line of credit, accounts payable and accrued liabilities, long term debt, and available-for-sale investments carried at fair value. The fair values of cash, short term deposits, accounts receivable, bank line of credit, accounts payable and accrued liabilities approximate carrying value because of the short-term nature of these instruments.

The fair value of available-for-sale investments other than those carried at cost is based on prices quoted on over the counter exchanges. The fair value of available-for-sale investments accounted for according to the cost basis is not practical to determine as the investments are not publicly traded. Available-for-sale investments carried at cost are tested annually for impairment.

The investment in EESTech Inc. is classified as available for sale. EESTech Inc. shares are issued on the US over the counter exchange and are subject to Rule 144 of the US Securities Act 1933 trading restrictions. They have been adjusted to their fair value as at December 31, 2012 based on quoted prices obtained from over the counter exchanges.

The investment in Global Energy Inc. is classified as available for sale. As it is a U.S. private company, they remain recorded at cost as there is no quoted active market for these securities. Based on available information obtained during 2011 and 2012, Management has determined that an adjustment to the carrying value of this asset is appropriate and accordingly reduced the carrying amount by $914,085 as at December 31, 2012 ($915,175 in December 2011).

The investment in USA Synthetic Fuel Corp (�USFC�) is classified as available for sale. USFC shares are issued on the US over the counter exchange. They have been adjusted to their fair value as at December 31, 2012.

The Investment in Maxx Chenglin Energy Products and Services Ltd., a private company is recorded at Cost. The investment has been classified as available-for-sale at cost. Fair value can not be reliably measured as there is no quoted active market for these securities.

The Maxx Energy investment represents 65% of the issued shares and is recorded using Consolidation.



Financial Risk Management

Management�s risk management policies are typically performed as a part of the overall management of the Corporation�s operations. Management is aware of risks related to these objectives through direct personal involvement with employees and outside parties. In the normal course of its business, the Corporation is exposed to a number of risks that can affect its operating performance. Management�s close involvement in operations helps identify risks and variations from expectations. The Corporation has not designated transactions as hedging transactions to manage risk. As a part of the overall operation of the Corporation, management considers the avoidance of undue concentrations of risk. These risks and the actions taken to manage them include the following:

Liquidity risk is the risk that the Corporation cannot meet its financial obligations associated with financial liabilities in full. The Corporation's main sources of liquidity are its operations and equity financing. The funds are primarily used to finance working capital and capital expenditure requirements and are adequate to meet the Corporation�s financial obligations associated with financial liabilities. Risk associated with debt financing is mitigated by having negotiating terms over several years and renegotiating terms before they are due. Loans expiring January 2013 have been renewed under similar terms. Total debt outstanding per note 13 is $853,882 in respect to 2012. Total payments including interest to maturity is $1,050,332. Amounts due in the next year including interest is $109,031

Currency risk is the risk that changes in foreign exchange rates may have an effect on future cash flows associated with financial instruments. The Corporation has no significant transactions denominated in foreign currency and is not exposed to any material foreign currency risk aside from broad unquantifiable macro-economic factors arising from fluctuations in foreign exchange which could result in Canadian products becoming more expensive to international purchasers.

Foreign exchange risk is primarily associated with contracts for services and contracts of supplies and services. Substantially all of the Corporation�s revenues and expenses are denominated in Canadian dollars, and therefore is isolated from foreign exchange risk.

Interest rate risk primarily is associated with interest fluctuations earned on the Corporation�s cash and term deposits and long term debt. The Corporation mitigates exposure by attempting to match rates and terms to expected cash requirements, and through having the majority of its revenues and expenses denominated in Canadian dollars. Interest risk associated with long term loans is mitigated by arranging terms that extend for multiple years (see note 13). A 1% change in the prime interest rate would have a negligible impact on the Corporation�s income.

Credit risk is the risk of financial loss if counterparty to a financial transaction fails to meet its obligations. The Corporation attempts to reduce such exposure to its cash,



and short term deposits by mostly investing in low risk investments with Canadian Chartered Banks and taking advantage of government guarantees. The Corporation attempts to reduce its loss on amounts receivable by assessing the ability of the counterparties to fulfill their obligation under contract prior to entering into the contracts and by the nature of customers the Corporation deals with. There have been no significant impairment losses recorded on accounts receivable. There have been no significant bad debts realized over the last few years ($3,061 in respect to 2012 and $27,300 in respect to 2011).

Due to project nature of operations of the Corporation, management considers accounts receivable outstanding less than 90 days to be current amounts over 90 days are also considered current if extended terms and security is provided or amounts are subject to contract restrictions and performance markers. The aging of the Corporation�s accounts receivable at December 31, 2012 is as follows:

Current Over 90 Days Total

Aging of accounts receivable at Dec. 31, 2012

$ 5,376,196 $ 78,810 $5,455,006

Aging of accounts receivable at Dec. 31, 2011 $ 932,206 $ 932,479 $1,864,685

Signed �Lionel Kambeitz� Signed �Jeffrey Allison�LIONEL KAMBEITZ JEFFREY ALLISON CHAIRMAN & CEO SR. VICE- PRESIDENT & CFO



HTC PURENERGY INC. �doing business as�

HTC PURENERGY

To the Shareholders of HTC Purenergy Inc.

Management�s Accountability for Management�s Discussion and Analysis and Financial Statements

The Corporation�s annual audited consolidated financial statements for the year ending December 31, 2012 (�Consolidated Financial Statements�) have been prepared by management in accordance with International Financial Reporting Standards (�IFRS�) in Canada. Management is responsible for ensuring that these statements, which include amounts based upon estimates and judgment, are consistent with other information and operating data contained in management�s discussion and analysis for the year ending December 31, 2012 (�MD&A�) and reflect the Corporation's business transactions and financial position.

Management is also responsible for the information disclosed in the MD&A including responsibility for the existence of appropriate information systems, procedures and controls to ensure that the information used internally by management and disclosed externally is complete and reliable in all material respects.

In addition, management is responsible for establishing and maintaining an adequate system of internal control over financial reporting. Such systems are designed to provide reasonable assurance that the financial information is relevant, reliable and accurate and that the Corporation�s assets are appropriately accounted for and adequately safeguarded. Management has concluded that the Corporation�s system of internal control over financial reporting was effective as at December 31, 2012.

The board of directors (�Board�) annually appoints an audit committee which includes directors who are not employees of the Corporation. This committee meets regularly with management and the shareholders' auditors to review significant accounting, reporting and internal control matters. The shareholders' auditors have unrestricted access to the audit committee. The audit committee reviews interim and annual financial statements, the report of the shareholders' auditors, and the interim and annual management�s discussion and analysis and has delegated authority to approve the interim filings, and makes recommendations to the Board regarding annual filings.

Management has reviewed the filing of the Corporation�s MD&A, Consolidated Financial Statements, and attachments thereto for the year ended December 31, 2012. Based on our knowledge, having exercised reasonable diligence, this filing does not contain any untrue statement of material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it is made, with respect to the period covered by the annual filing. Based on our knowledge, having exercised reasonable diligence, the Consolidated Financial Statements together with the other financial information included in the annual filings fairly present in all material respects the financial condition, the financial performance and cash flows of the Corporation, as of the date of and for the periods presented in the annual filing.

Signed �Lionel Kambeitz� Signed �Jeffrey Allison�LIONEL KAMBEITZ JEFFREY ALLISON CHAIRMAN & CEO SR. VICE-PRESIDENT & CFO



BOARD OF DIRECTORS & SENIOR OFFICERS of the Corporation as at December 31, 2012

Directors: Lionel Kambeitz, Regina, Saskatchewan,

Jeffrey Allison, Regina, Saskatchewan,

Wayne Bernakevitch, Regina, Saskatchewan,

Eleftherios Panayiotou Crawley, United Kingdom

Garth Fredrickson Regina, Saskatchewan.

Senior Officers: Lionel Kambeitz, Chairman and CEO Jeffrey Allison, Sr. Vice-President & CFO Thor McDonald, Vice-President

Committees of the Board of Directors: Audit Committee Compensation Committee Nominating Committee

Members of Audit Committee: Lionel Kambeitz, Jeffrey Allison and Wayne Bernakevitch

Members of Compensation Committee: Jeffrey Allison and Wayne Bernakevitch

Members of Nominating Committee: Jeffrey Allison and Wayne Bernakevitch



SHAREHOLDER INFORMATION Stock exchange: TSX Venture Exchange Inc. Stock symbol: HTC Common Shares outstanding as of December 31, 2012: 24,059,195Head office and Investor relations address:

HTC PURENERGY #002 � 2305 Victoria Avenue Regina, Saskatchewan S4P 0S7 Telephone: (306) 352-6132

Fax: (306) 545-3262 E-mail: [email protected]

Sales and Marketing Offices

Asia Pacific: Sydney, Australia Telephone: +61 4 10229 393

United States Address: Bettendorf, Iowa Telephone: (563) 332-9453

Registrar and Transfer Agent: Computershare Trust Company of Canada

600, 530 - 8th Avenue S. W. Calgary, Alberta T2P 3S8

Banks: HSBC; Conexus Credit Union; Canadian Western Bank Auditors: DNTW Auditors LLP, Calgary, Alberta Legal Counsel: McDougall Gauley, Barristers and Solicitors, Regina

Saskatchewan Borden Ladner Gervais LLP, Barristers and Solicitors, Calgary

Alberta Jones Day, Solicitors, London England Madgwicks Lawyers, Law Firm, Melbourne Australia The Bingham Law Group, APC, Carlsbad, California

Dividend policy: No dividends have been paid on any common shares of the Corporation since the date of inception, and it is not contemplated that any dividends will be paid in the immediate or foreseeable future.

Duplicate Communications: Some shareholders may receive more than one copy of the annual report and proxy-related material. This is generally due to ownership of registered shares in addition to non-registered shares; holding shares in more than one account; or purchasing shares from more than one stock brokerage firm. Every effort is made to avoid such duplication. Shareholders who receive duplicate mailings should notify the investor relations department at the above address.

MANAGEMENTS DISCUSSION AND ANALYSIS · AND ANALYSIS For the year ending ... It is also a result of...

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