UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarter ended NovemberJune 30, 20172023
OR
| TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ______________ to _______________
Commission File No. 333-196663000-55965
|
(Exact |
Nevada |
| 35-2511643 |
(State of of |
| (I.R.S. Employer Identification Number) |
| ||
|
|
|
(Address of |
| (Zip Code) |
(855) 474-7384(702) 323-6455
(Registrant’s Telephone Number, Including Area Code)
CopiesSecurities registered pursuant to:
Sichenzia Ross Ference Kesner LLP
1185 Avenue Section 12(b) of the Americas, 37th FloorAct: None
New York, NY 10036
Attn: Greg Sichenzia, Esq.,
Jay Yamamoto, Esq.
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x ☒ No ¨☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x ☒ No ¨☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer |
| Accelerated filer |
|
Non-accelerated |
| Smaller reporting company |
|
| Emerging growth company |
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ ☐ No x☒
As of January 15, 2018,August 21, 2023, there were 124,720,53245,345,551 shares of our common stock issued and outstanding, par value $0.001.
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Unaudited Interim Condensed |
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Management’s Discussion and Analysis of Financial Condition and |
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Unregistered |
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| Table of Contents |
Cautionary Note Concerning Forward-Looking Statements
This Quarterly Report on Form 10-Q contains "forward -looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended.“forward-looking statements”. These forward-looking statements, including without limitation forward-looking statements made under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” involve risks and uncertainties. Any statements contained in this Quarterly Report that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements include, without limitation, statements as to our future operating results; seasonality expectations; plans for the development, utilization or disposalmarketing of manufacturing facilities;our services; future economic conditions; our expectations as to legal proceedings; the effect of our market and product development efforts; and expectations or plans relating to the implementation or realization of our strategic goals and future growth, including through potential future acquisitions. Forward-looking statements may include, among other things, statements relating to future sales, earnings, cash flow, results of operations, use of cash and other measures of financial performance, as well as statements relating to future dividend payments. Other forward-looking statements may be identified through the use of words such as “believes,” “anticipates,” “may,” “should,” “will,” “plans,” “projects,” “expects,” “expectations,” “estimates,” “predicts,” “targets,” “forecasts,” “strategy,” and other words of similar meaning in connection with the discussion of future operating or financial performance. These statements are based on current expectations, estimates and projections about the industries in which we operate, and the beliefs and assumptions made by management. Because forward-looking statements relate to the future, they are subject to inherent risks, uncertainties and changes in circumstances that are difficult to predict. Accordingly, the Company’s actual results may differ materially from those contemplated by the forward-looking statements. Investors, therefore, are cautioned against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. Readers should refer to the discussions under “Risk Factors” contained in our Annual Report on Form 10-K for the fiscal year ended February 28, 2017 concerning certain factors that could cause our actual results to differ materially from the results anticipated in such forward-looking statements. These Risk Factors are hereby incorporated by reference into this Quarterly Report.
| 3 |
| Table of Contents |
PART I - FINANCIAL INFORMATION
FLOOIDCX CORP.
Unaudited Interim Condensed CombinedConsolidated Financial Statements
Three and Six Months Ended June 30, 2023
Gripevine, Inc.(Expressed in US dollars)
(unaudited)
For The Quarterly Period Ended November 30, 2017
|
4 |
| Table of Contents |
FLOOIDCX CORP.
Interim Condensed Consolidated Balance Sheets
(Expressed in U.S. dollars)
|
| (Unaudited) |
|
| (Audited) |
| ||
|
| June 30, |
|
| December 31, |
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|
| 2023 |
|
| 2022 |
| ||
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ASSETS |
|
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Current Assets |
|
|
|
|
|
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Cash |
| $ | — |
|
| $ | — |
|
|
|
|
|
|
|
|
|
|
Total Assets |
| $ | — |
|
| $ | — |
|
|
|
|
|
|
|
|
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|
LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
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Current Liabilities |
|
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Accounts Payable and Accrued Liabilities |
| $ | 30,783 |
|
| $ | 25,989 |
|
Loans and Notes Payable - Related Parties |
|
| 3,983,947 |
|
|
| 3,872,500 |
|
|
|
|
|
|
|
|
|
|
Total Current Liabilities |
|
| 4,014,730 |
|
|
| 3,898,489 |
|
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|
|
|
|
|
|
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|
Total Liabilities |
|
| 4,014,730 |
|
|
| 3,898,489 |
|
|
|
|
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|
|
|
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|
Stockholders' Deficit |
|
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|
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|
|
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|
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|
|
Preferred A Stock - $0.001 Par; 1,000,000 Shares Authorized, -0- and 1,000,000 Issued and Outstanding, Respectively |
| — |
|
|
| 1,000 |
| |
Preferred B Stock - $0.001 Par; 1,000,000 Shares Authorized, 185,400 and -0- Issued and Outstanding, Respectively |
|
| 185 |
|
|
| — |
|
Preferred C Stock - $0.001 Par; 1,000,000 Shares Authorized, 915,000 and -0- Issued and Outstanding, Respectively |
|
| 915 |
|
|
| — |
|
Common Stock - $0.001 Par; 300,000,000 Shares Authorized, 43,045,551 and 2,020,871 Issued and Outstanding, Respectively |
|
| 43,046 |
|
|
| 2,021 |
|
Common Stock Issuable |
|
| 19,616 |
|
|
| 19,616 |
|
Additional Paid-In-Capital |
|
| 112,185,968 |
|
|
| 53,096,096 |
|
Deposit on Potential Merger |
|
| (59,130,997 | ) |
|
| — |
|
Accumulated Deficit |
|
| (57,133,463 | ) |
|
| (57,017,222 | ) |
|
|
|
|
|
|
|
|
|
Total Stockholders' Deficit |
|
| (4,014,730 | ) |
|
| (3,898,489 | ) |
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders' Deficit |
| $ | — |
|
| $ | — |
|
(The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements)
| F-1 |
| Table of Contents |
FLOOIDCX CORP.
Unaudited Interim Condensed Consolidated Statements of Operations and Comprehensive Loss
(Expressed in U.S. dollars)
(Unaudited)
|
| For the Three Months Ended |
|
| For the Six Months Ended |
| ||||||||||
|
| June 30, |
|
| June 30, |
| ||||||||||
|
| 2023 |
|
| 2022 |
|
| 2023 |
|
| 2022 |
| ||||
|
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Revenue |
| $ | — |
|
| $ | — |
|
| $ | — |
|
| $ | — |
|
|
|
|
|
|
|
|
|
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|
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|
|
|
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Operating Expenses |
|
|
|
|
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|
|
|
|
|
|
|
|
General and Administrative |
| 22,050 |
|
|
| 24,325 |
|
|
| 100,800 |
|
|
| 53,308 |
| |
Research and Development |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 11,366 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses |
| 22,050 |
|
|
| 24,325 |
|
|
| 100,800 |
|
|
| 64,674 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss Before Other Expenses |
| (22,050 | ) |
|
| (24,325 | ) |
|
| (100,800 | ) |
|
| (64,674 | ) | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Other Income (Expenses) |
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Income (Loss) on Foreign Currency Transactions |
|
| (1,764 | ) |
|
| (2,316 | ) |
|
| (6,816 | ) |
|
| 872 |
|
Interest Expense |
|
| (4,363 | ) |
|
| (12,242 | ) |
|
| (8,625 | ) |
|
| (16,159 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Other Income (Expenses) |
|
| (6,127 | ) |
|
| (14,558 | ) |
|
| (15,441 | ) |
|
| (15,287 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss for the Period from Continuing Operations |
|
| (28,177 | ) |
|
| (38,883 | ) |
|
| (116,241 | ) |
|
| (79,961 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss for the Period from Discontinued Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Loss on Discontinued Operations |
|
| — |
|
|
| (39,969 | ) |
|
| — |
|
|
| (173,201 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss for the Period from Discontinued Operations |
|
| — |
|
|
| (39,969 | ) |
|
| — |
|
|
| (173,201 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss for the Period |
|
| (28,177 | ) |
|
| (78,852 | ) |
|
| (116,241 | ) |
|
| (253,162 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Comprehensive Income (Loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign Currency Translation Gain (Loss) on Continuing Operations |
|
| — |
|
| — |
|
|
| — |
|
| — |
| ||
Foreign Currency Translation Gain (Loss) on Discontinued Operations |
|
| — |
|
|
| (26,037 | ) |
|
| — |
|
|
| (26,037 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Loss |
| $ | (28,177 | ) |
| $ | (104,889 | ) |
| $ | (116,241 | ) |
| $ | (279,199 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of Common Shares - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
| 12,752,129 |
|
|
| 2,020,871 |
|
|
| 7,416,145 |
|
|
| 2,020,871 |
|
Diluted |
|
| 12,752,129 |
|
|
| 2,020,871 |
|
|
| 7,416,145 |
|
|
| 2,020,871 |
|
Net Loss for the Period Per Common Shares - Basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from Continuing Operations |
| $ | (0.00 | ) |
| $ | (0.02 | ) |
| $ | (0.02 | ) |
| $ | (0.04 | ) |
Loss from Discontinued Operations |
|
| — |
|
|
| — |
|
| — |
|
|
| (0.09 | ) | |
|
| $ | (0.00 | ) |
| $ | (0.02 | ) |
| $ | (0.02 | ) |
| $ | (0.13 | ) |
Net Loss for the Period Per Common Shares - Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from Continuing Operations |
| $ | (0.00 | ) |
| $ | (0.02 | ) |
| $ | (0.02 | ) |
| $ | (0.04 | ) |
Loss from Discontinued Operations |
|
| — |
|
|
| (0.00 | ) |
|
| — |
|
|
| (0.09 | ) |
|
| $ | (0.00 | ) |
| $ | (0.02 | ) |
| $ | (0.02 | ) |
| $ | (0.13 | ) |
|
(The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements)
As at November 30, 2017 As at February 28, 2017 $ $ CURRENT ASSETS Cash Prepaid and other receivables Total current assets Equipment [Note 5] TOTAL ASSETS CURRENT LIABILITIES Accounts payable Accrued liabilities Loans payable [Note 6] Due to related parties [Note 6] Due to a shareholder [Note 6] TOTAL LIABILITIES STOCKHOLDERS' DEFICIENCY Preferred stock, $0.001 par value, 20,000,000 authorized. 1,000,000 shares issued and outstanding as at November 30, 2017 and February 28, 2017 [Note 7] Common stock, $0.001 par value, 300,000,000 authorized, 124,720,532 and 120,000,000 shares issued and outstanding as at November 30, 2017 and February 28, 2017, respectively [Note 7] Common stock to be issued [Note 7] Additional paid-in-capital Accumulated other comprehensive income Accumulated deficit Total stockholders' deficiency TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY Commitments [Note 9] Subsequent events [Note 10] 153,082 32,678 31,791 20,281 184,873 52,959 37,009 41,655 221,882 94,614 26,683 22,325 28,083 78,827 2,046,526 1,822,953 174,904 178,906 654,357 568,547 2,930,553 2,671,558 1,000 1,000 124,721 120,000 3,022 5,249 45,313,192 43,698,125 129,346 233,651 (48,279,952 ) (46,634,969 ) (2,708,671 ) (2,576,944 ) 221,882 94,614
See accompanying notes to interim condensed combined financial statements
| F-2 |
| Table of Contents |
FLOOIDCX CORP.
Unaudited Interim Condensed Consolidated Statements of Stockholders’ Deficit
(Expressed in U.S. dollars)
(Unaudited)
|
|
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| Accumulated |
|
|
|
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| |||||||||||||||||||||||||||
|
| Preferred A Stock |
|
| Preferred B Stock |
|
| Preferred C Stock |
|
| Common Stock |
|
| Common |
|
| Additional |
|
| Deposit on |
|
| Other |
|
|
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| Total |
| |||||||||||||||||||||||||||
|
| $0.001 Par |
|
| $0.001 Par |
|
| $0.001 Par |
|
| $0.001 Par |
|
| Stock |
|
| Paid-In |
|
| Potential |
|
| Comprehensive |
|
| Accumulated |
|
| Stockholders' |
| ||||||||||||||||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Issuable |
|
| Capital |
|
| Merger |
|
| Income |
|
| Deficit |
|
| Deficit |
| ||||||||||||||
|
|
|
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|
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|
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|
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|
|
|
|
|
|
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Balance - January 1, 2022 |
|
| 1,000,000 |
|
| $ | 1,000 |
|
|
| — |
|
| $ | — |
|
|
| — |
|
| $ | — |
|
|
| 2,020,871 |
|
| $ | 2,021 |
|
| $ | 19,616 |
|
| $ | 51,875,727 |
|
| $ | — |
|
| $ | 88,895 |
|
| $ | (56,165,383 | ) |
| $ | (4,178,124 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
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|
|
|
|
|
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|
Net Loss for the Period |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (180,688 | ) |
|
| (180,688 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance - March 31, 2022 |
|
| 1,000,000 |
|
|
| 1,000 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 2,020,871 |
|
|
| 2,021 |
|
|
| 19,616 |
|
|
| 51,875,727 |
|
|
| — |
|
|
| 88,895 |
|
|
| (56,346,071 | ) |
|
| (4,358,812 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign Exchange Translation Loss |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (26,037 | ) |
|
| — |
|
|
| (26,037 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
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|
|
|
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|
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|
|
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|
|
|
|
|
|
Split-off |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,220,369 |
|
|
| — |
|
|
| (62,858 | ) |
|
| — |
|
|
| 1,157,511 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss for the Period |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (78,852 | ) |
|
| (78,852 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance - June 30, 2022 |
|
| 1,000,000 |
|
| $ | 1,000 |
|
|
| — |
|
| $ | — |
|
|
| — |
|
| $ | — |
|
|
| 2,020,871 |
|
| $ | 2,021 |
|
| $ | 19,616 |
|
| $ | 53,096,096 |
|
| $ | — |
|
| $ | — |
|
|
| (56,424,923 | ) |
| $ | (3,306,190 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance - January 1, 2023 |
|
| 1,000,000 |
|
| $ | 1,000 |
|
|
| — |
|
| $ | — |
|
|
| — |
|
| $ | — |
|
|
| 2,020,871 |
|
| $ | 2,021 |
|
| $ | 19,616 |
|
| $ | 53,096,096 |
|
| $ | — |
|
| $ | — |
|
|
| (57,017,222 | ) |
| $ | (3,898,489 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Shares Issued in Exchange for Note Receivable |
|
| — |
|
|
| — |
|
|
| 915,400 |
|
|
| 915 |
|
|
| 915,000 |
|
|
| 915 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,004,890 |
|
|
| (1,006,720 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss for the Period |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (88,064 | ) |
|
| (88,064 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance - March 31, 2023 |
|
| 1,000,000 |
|
|
| 1,000 |
|
|
| 915,400 |
|
|
| 915 |
|
|
| 915,000 |
|
|
| 915 |
|
|
| 2,020,871 |
|
|
| 2,021 |
|
|
| 19,616 |
|
|
| 54,100,986 |
|
|
| (1,006,720 | ) |
|
| — |
|
|
| (57,105,286 | ) |
|
| (3,986,553 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cancellation of Shares |
|
| (1,000,000 | ) |
|
| (1,000 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1,000 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Conversion to Common 30:1 |
|
| — |
|
|
| — |
|
|
| (730,000 | ) |
|
| (730 | ) |
|
| — |
|
|
| — |
|
|
| 21,900,000 |
|
|
| 21,900 |
|
|
| — |
|
|
| (21,170 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock Issued for Deposit on Potential Merger |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 19,124,680 |
|
|
| 19,125 |
|
|
| — |
|
|
| 58,105,152 |
|
|
| (58,124,277 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss for the Period |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (28,177 | ) |
|
| (28,177 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance - June 30, 2023 |
|
| — |
|
| $ | — |
|
|
| 185,400 |
|
| $ | 185 |
|
|
| 915,000 |
|
| $ | 915 |
|
|
| 43,045,551 |
|
| $ | 43,046 |
|
| $ | 19,616 |
|
| $ | 112,185,968 |
|
| $ | (59,130,997 | ) |
| $ | — |
|
| $ | (57,133,463 | ) |
| $ | (4,014,730 | ) |
|
(The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements)
|
| For the Three Months Ended November 30, 2017 |
|
| For the Three Months Ended November 30, 2016 |
|
| For the Nine Months Ended November 30, 2017 |
|
| For the Nine Months Ended November 30, 2016 |
| ||||
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
REVENUE |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock based compensation [Note 7] |
|
| 155,429 |
|
|
| 9,673,604 |
|
|
| 744,399 |
|
|
| 29,020,811 |
|
Research and development expenses [Note 8] |
|
| 146,684 |
|
|
| 318,430 |
|
|
| 599,766 |
|
|
| 778,582 |
|
General and administrative expenses |
|
| 118,262 |
|
|
| 77,895 |
|
|
| 300,818 |
|
|
| 290,323 |
|
TOTAL OPERATING EXPENSES |
|
| 420,375 |
|
|
| 10,069,929 |
|
|
| 1,644,983 |
|
|
| 30,089,716 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
NET LOSS |
|
| 420,375 |
|
|
| 10,069,929 |
|
|
| 1,644,983 |
|
|
| 30,089,716 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Translation adjustment |
|
| 79,679 |
|
|
| (21,478 | ) |
|
| (104,305 | ) |
|
| (18,539 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE LOSS |
|
| 500,054 |
|
|
| 10,048,451 |
|
|
| 1,540,678 |
|
|
| 30,071,177 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS PER SHARE, BASIC AND DILUTED |
|
| 0.004 |
|
|
| 0.084 |
|
|
| 0.013 |
|
|
| 0.251 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING |
|
| 122,749,321 |
|
|
| 120,000,000 |
|
|
| 120,909,775 |
|
|
| 120,000,000 |
|
See accompanying notes to interim condensed combined financial statements
| F-3 |
| Table of Contents |
|
Unaudited Interim Condensed Consolidated Statements of Cash Flows
(Expressed in U.S. dollars)
(Unaudited)
|
| For the Nine Months Ended November 30, 2017 |
|
| For the Nine Months Ended November 30, 2016 |
| ||
|
| $ |
|
| $ |
| ||
|
|
|
|
|
|
| ||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
| ||
Net loss |
|
| (1,644,983 | ) |
|
| (30,089,716 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Stock based compensation |
|
| 744,399 |
|
|
| 29,020,811 |
|
Depreciation |
|
| 17,780 |
|
|
| 7,963 |
|
|
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Prepaid expenses and other receivables |
|
| (11,105 | ) |
|
| (2,641 | ) |
Accounts payable |
|
| 3,836 |
|
|
| 20,841 |
|
Accrued liabilities |
|
| (52,678 | ) |
|
| (3,824 | ) |
Net cash used in operating activities |
|
| (942,751 | ) |
|
| (1,046,566 | ) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
Purchase of equipment |
|
| (11,998 | ) |
|
| (14,486 | ) |
Net cash used in investing activities |
|
| (11,998 | ) |
|
| (14,486 | ) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
Proceeds from issuance of shares |
|
| 873,163 |
|
|
| — |
|
Loans payable |
|
| 166,687 |
|
|
| 951,666 |
|
Due to related parties |
|
| (8,961 | ) |
|
| (47,034 | ) |
Due to a shareholder |
|
| 69,552 |
|
|
| 159,792 |
|
Net cash provided by financing activities |
|
| 1,100,441 |
|
|
| 1,064,424 |
|
|
|
|
|
|
|
|
|
|
Net increase in cash during the period |
|
| 145,692 |
|
|
| 3,372 |
|
|
|
|
|
|
|
|
|
|
Effect of foreign currency translation |
|
| (25,288 | ) |
|
| (1,575 | ) |
|
|
|
|
|
|
|
|
|
Cash, beginning of period |
|
| 32,678 |
|
|
| 23,926 |
|
Cash, end of period |
|
| 153,082 |
|
|
| 25,723 |
|
For the Six Months Ended June 30, |
| 2023 |
|
| 2022 |
| ||
|
|
|
|
|
|
| ||
Cash Flows from Operating Activities |
|
|
|
|
|
| ||
|
|
|
|
|
|
| ||
Net Loss for the Period |
| $ | (116,241 | ) |
| $ | (253,162 | ) |
|
|
|
|
|
|
|
|
|
Non-Cash Adjustments: |
|
|
|
|
|
|
|
|
(Income) Loss on Foreign Currency Transactions |
|
| 6,816 |
|
|
| (872 | ) |
Changes in Assets and Liabilities: |
|
|
|
|
|
|
|
|
Prepaid Expenses |
|
| — |
|
|
| (1,373 | ) |
Accounts Payable and Accrued Liabilities |
|
| 4,795 |
|
|
| 26,279 |
|
Due to Related Parties |
|
| 104,630 |
|
|
| 11,890 |
|
|
|
|
|
|
|
|
|
|
Net Cash Flows Used In Operating Activities |
|
| — |
|
|
| (217,238 | ) |
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities |
|
| — |
|
|
| — |
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities |
|
|
|
|
|
|
|
|
Proceeds from Loans Payable |
|
| — |
|
|
| 350,261 |
|
|
|
|
|
|
|
|
|
|
Net Cash Flows Provided By Financing Activities |
|
| — |
|
|
| 350,261 |
|
|
|
|
|
|
|
|
|
|
Net Change in Cash |
|
| — |
|
|
| 133,023 |
|
|
|
|
|
|
|
|
|
|
Cash - Beginning of Period |
|
| — |
|
|
| 587 |
|
|
|
|
|
|
|
|
|
|
Cash - End of Period |
| $ | — |
|
| $ | 133,610 |
|
|
|
|
|
|
|
|
|
|
Cash Paid During the Period for: |
|
|
|
|
|
|
|
|
Interest |
| $ | — |
|
| $ | — |
|
Income Taxes |
| $ | — |
|
| $ | — |
|
|
|
|
|
|
|
|
|
|
Non-Cash Transactions |
|
|
|
|
|
|
|
|
Non-Cash Issuance of Preferred Stock for Deposit on Potential Merger |
| $ | 1,006,720 |
|
| $ | — |
|
Non-Cash Issuance of Common Stock Exchanged for Deposit on Potential Merger |
| $ | 58,124,277 |
|
| $ | — |
|
Conversion of Preferred Stock |
| $ | — |
|
| $ | — |
|
See(The accompanying notes toare an integral part of these unaudited interim condensed combinedconsolidated financial statementsstatements)
| F-4 |
| Table of Contents |
FLOOIDCX CORP.
Notes to the Unaudited Condensed Consolidated Financial Statements
Three and Six Months Ended June 30, 2023 and 2022
(Expressed in U.S. Dollars)
|
1. NATURE OF OPERATIONS
FlooidCX Corp. (formerly Gripevine, Inc. (formerlyand Baixo Relocation Services, Inc.) (the "Company"“Company”) was incorporated in the state of Nevada on January 7, 2014. The Company operated as a relocation service provider for clients movingPrior to the Statesplit-off of Goa, India and ceased thisthe MB Holdings, Inc. (“MB Holdings”), subsidiary, the Company was in the business and engaged inof developing and building an online resolution platform afterplatform.
Effective June 27, 2022, the Share Exchange Agreement as explainedCompany entered into a split-off agreement with its President and majority shareholder at the time, and MP Special Purpose Corporation (“MP Special”). As part of the agreement the Company transferred its equity interest in MB Holdings, Inc., to the majority shareholder, and the majority shareholder transferred his equity interest in the subsequent paragraphs. The Company's fiscal year-end is February end.
MBE Holdings Inc. (“MBE”) was incorporated as a limited liability company on April 13, 2010 under the laws of the State of Delaware. MBE is engaged in research and development activitiesCompany to offer an online complaint resolution platform for consumers and business, including ratings, reviews and polling’s. As such, its efforts to date have been devoted in building technology that enables access to this market through the development of a tangible product.
As explained in Note 7 to the condensed combined financial statements, on February 28, 2017, the Company and MBE and the shareholders of MBE who collectively own 100% of MBE entered into and consummated transactions pursuant to a Share Exchange Agreement, whereby the Company agreed to issue to the MBE shareholders an aggregate of approximately 5,248,626 shares of its common stock, par value $0.001,MP Special in exchange for 100% of equity interests of MBE held by the MBE shareholders. As a result$600,000. In addition, as part of the share exchange,transaction, the parties agreed that certain specified debt would remain or be transferred to Flooidcx Corp., and that other specific debt would remain or be transferred to MBE became a wholly owned subsidiary of Gripevine.
As a result ofHoldings. Because the Share Exchange Agreement, the acquisitionCompany’s majority shareholder was involved in this transaction, it has been accounted fortreated as a common control transaction in accordance with the Financial Accounting Standards Board (ASC 805-50, Business Combinations – Common control transactions). The Company has evaluated the guidance contained in ASC 805 with respect to the combinations among entities or businesses under common control and conclude that since the majority shareholder of the Company and MBE are same, therefore, this is a common control transaction, and do not result in a change in control attherefore, the ultimate parent or the controlling shareholder level.
Consequently, common control transactions are not accounted for at fair value. Rather, common control transactions are generally accounted for at the carrying amountderecognition of the net assets or equity interests transferred. Any differences between the proceeds received or transferred and the carrying amountsliabilities of the net assets are considered equity transactions that would be eliminated in consolidation, and no gain or loss would be recognized in the condensed combined financial statements of the ultimate parent. Resultantly, the financial position and the results of operations of Gripevine and MBE are combined together as if theyMB Holdings were operating as one entity from the beginning.
2. BASIS OF PRESENTATION AND COMBINATION
The accompanying unaudited condensed combined financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) for interim financial information and the Securities Exchange Commission (“SEC”) instructions to Form 10-Q and Article 8 of SEC Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements and should be read in conjunction with the Company’s audited combined financial statements for the years ended February 28, 2017 and February 29, 2016 and notes thereto included in the Form 10-K filed with the SEC on June 14, 2017. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of combined financial position and results of operations for the interim periods presented have been reflected herein. Operating results for the nine months ended November 30, 2017, are not necessarily indicative of the results that may be expected for the year ending February 28, 2018.
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2. BASIS OF PRESENTATION AND COMBINATION (continued)
As explained above in Note 1 to the unaudited condensed combined financial statements, as a result of the Share Exchange Agreement, the acquisition transaction has been accounted for as an equity transaction rather than a common control transaction in accordance withgain. After the Financial Accounting Standards Board (ASC 805-50, Business Combinations – Common control transactions). Consequently, the condensed combined financial statements have been prepared as ifsplit-off of MBE Holdings, the Company and MBE werehad no operating activities. However, in March 2023, the Company entered into a single organization by the aggregation of their financial statements from the beginning of the previous period and the elimination of transactions and balances between them.merger agreement with Quantum Energy, Inc., (See Note 7).
3. GOING CONCERN
The unauditedThese condensed combinedconsolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has incurred recurring losses from operations and as at November 30, 2017 and February 28, 2017 had a working capital deficiency of $2,745,680 and $2,618,599, respectively and an accumulated deficit of $48,279,952 and $46,634,969 respectively. Management anticipatesimplies the Company will attain profitable status and improve its liquidity through continued business development and additional debt or equity investment in the Company. The Company’s continued existence is dependent upon its ability to continue to execute its operating plan and to obtain additional debt or equity financing. There can be no assurance that the necessary debt or equity financing will be available, or will be available on terms acceptable to the Company, in which case the Company may be unable to meet its obligations. Should the Company be unable to realize its assets and discharge its liabilities in the normal course of business,business. The continuation of the net realizable valueCompany as a going concern is dependent upon the continued financial support from its shareholders, creditors, and related parties, and the ability of its assets may be materially less than the amounts recordedCompany to obtain necessary equity financing to continue operations, and ultimately the attainment of profitable operations. As of June 30, 2023, the Company did not have any operations generating revenue and had stockholders’ deficit of $4.0 million, and was in default of certain loans payable. (refer to Note 3). These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These unaudited interim condensed combined financial statements. The condensed combinedconsolidated financial statements (the “condensed consolidated financial statements”) do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.as a going concern.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES2. Significant Accounting Policies
(a) Basis of Presentation
These condensed consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States and are expressed in U.S. dollars. These consolidated financial statements include the accounts of the Company and the following entities: Resolution 1, Inc. a wholly-owned subsidiary, and MBE Holdings, Inc., an entity that was wholly-owned subsidiary until the date of the split-off. After the split-off MBE Holdings, Inc. was derecognized in the Company’s financial statements, and the activity of MBE Holdings, Inc. after the date of the split-off is not included in the accompanying financial statements.
All inter-company balances and transactions have been eliminated.
(b) Discontinued Operations
In accordance with ASC No. 205-20, Discontinued Operations, for all periods presented, the results of operations and related balance sheet items associated with the MB Holdings are reported in discontinued operations in the accompanying consolidated statements of operations. See Note 6 – Discontinued Operations for further details.
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(c) Use of Estimates
The preparation of unaudited condensed combinedthese consolidated financial statements in conformity with US GAAPU.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed combinedconsolidated financial statements and the reported amounts of revenuesrevenue and expenses during the reporting period. Areas involving significantThe Company bases its estimates and assumptions include: deferred income taxon current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and related valuation allowanceliabilities and accruals. Actualthe accrual of costs and expenses that are not readily apparent from other sources. The actual results couldexperienced by the Company may differ materially and adversely from thosethe Company’s estimates. TheseTo the extent there are material differences between the estimates are reviewed periodically, and as adjustments become necessary, they are reported in earnings in the period in which they become known.actual results, future results of operations will be affected.
Loss Per Share(d) Recent Accounting Pronouncements
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments, which changes the impairment model for most financial assets. This update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The underlying premise of the Update is that financial assets measured at amortized cost should be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The income statement will be affected for the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. The new standard is effective for fiscal years and interim periods within those years beginning after December 15, 2022. The Company determined that the new standard did not have an effect on its financial statements.
The Company has adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 260-10 which provides for calculationimplemented all new accounting pronouncements that are in effect and that may impact its condensed consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of “basic” and “diluted”operations.
(e) Net Loss per Share
Net earnings per share. Basic earningsor loss per share includes no dilution and is computed by dividing net income or loss available to common stockholders by the weighted averageweighted-average number of common shares outstanding forduring the period.period, excluding shares subject to redemption or forfeiture. The Company presents basic and diluted net earnings or loss per share. Diluted net earnings or loss per share reflect the potential dilutionweighted average of common shares issued and outstanding during the period, adjusted for potentially dilutive securities that could share inoutstanding. Potentially dilutive securities are excluded from the earningscomputation of an entity. Diluted earningsthe diluted net loss per share exclude all potentially dilutive shares if their effect isinclusion would be anti-dilutive. There were no potentiallyPotentially dilutive shares outstanding as at Novemberof June 30, 20172023 and 2016.December 31, 2022 consist of 5,562,000 common stock equivalents related to convertible preferred stock.
Fair Value of Financial Instruments(f) Foreign Currency Translation
ASC 820 defines fair value, establishes a framework for measuring fair valueThe Company’s functional and expands required disclosure about fair value measurementsreporting currency is the United States dollar. The functional currency of MBE and Resolution 1 is the Canadian dollar. Monetary assets and liabilities. ASC 820-10 defines fair value asliabilities denominated in foreign currencies are translated using the exchange price that would be received for an assetrate prevailing at the balance sheet date. Non-monetary assets, liabilities, and items recorded in income arising from transactions denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Gains and losses arising on translation or paid to transfer a liability (an exit price)settlement of foreign currency denominated transactions or balances are included in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820-10 also establishes a fair value hierarchy, which requires an entity to maximize the usedetermination of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:income.
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3. Notes Payable & Loans - Related Parties
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In instances whereAt June 30, 2023 and December 31, 2022, the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significantCompany owed $145,821 and $143,914, respectively, to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments or interest rates that are comparable to market rates. These financial instruments include cash and accounts payable. The Company's cash,related party, which is carried at fair value, is classified as a Level 1 financial instrument. The Company’s bank accounts are maintained with financial institutions of reputable credit, therefore, bear minimal credit risk.
Stock Based Compensation
The Company accounts for share-based payments in accordance with the provision of ASC 718, which requires that all share-based payments issued to acquire goods or services, including grants of employee stock options, be recognized in the statement of operations based on their fair values, net of estimated forfeitures. ASC 718 requires forfeitures to be estimatedunsecured, bears interest at the timedefault rate of grant12% and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Compensation expense related to share-based awards is recognized over the requisite service period, which is generally the vesting period. The Company accounts for stock based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable, using the guidelines in ASC 505-50. The Company issues compensatory shares for services including, but not limited to, executive, management, accounting, operations, corporate communication, financial and administrative consulting services.
Recently Issued Accounting Pronouncements
In May 2017, an accounting pronouncement was issued by the Financial Accounting Standards Board (“FASB”) ASU 2017-09, “Compensation - Stock Compensation: Scope of Modification Accounting.” ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The updated guidance is effective for interim and annual periods beginning after December 15, 2017, and early adoption is permitted. The adoption of this pronouncement will not have a material impact on the unaudited condensed combined financial position and/or results of operations.
On January 1, 2017, the Company adopted the accounting pronouncement issued by the FASB to simplify the presentation of deferred income taxes within the balance sheet. This pronouncement eliminates the requirement that deferred tax assets and liabilities are presented as current or noncurrent based on the nature of the underlying assets and liabilities. Instead, the pronouncement requires that all deferred tax assets and liabilities, including valuation allowances, be classified as noncurrent. We adopted this pronouncement on a retrospective basis. The adoption of this guidance did not have a material impact on the Company’s unaudited condensed combined financial position and/or results of operations.
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On January 1, 2017, the Company adopted the accounting pronouncement issued by the FASB to simplify the accounting for goodwill impairment. This guidance eliminates the requirement that an entity calculate the implied fair value of goodwill when measuring an impairment charge. Instead, an entity would record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. The Company adopted this pronouncement on a prospective basis. The adoption of this guidance did not have a material impact on the Company’s unaudited condensed combined financial position and/or results of operations.
In February 2016, an accounting pronouncement was issued by the FASB to replace existing lease accounting guidance. This pronouncement is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet for most leases. Expenses associated with leases will continue to be recognized in a manner similar to current accounting guidance. This pronouncement is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. The adoption is required to be applied on a modified retrospective basis for each prior reporting period presented. The Company has not yet determined the effect that the adoption of this pronouncement may have on its unaudited condensed combined financial position and/or results of operations.
5. EQUIPMENT
As at November 30, As at February 28, 2017 2017 $ $ Furniture Computer equipment Total cost Less: Accumulated depreciation 38,192 31,889 32,207 24,864 70,399 56,753 (33,390 ) (15,098 ) 37,009 41,655
6. LOANS PAYABLE/DUE TO RELATED PARTIES / DUE TO A SHAREHOLDER
Loans payable
Loans payable represents advances from a related corporation to meet the working capital requirements of the Company. These advances are interest free, unsecured and are repayabledue on demand.
Due to related parties and due to a shareholder
The balances due to related parties and a shareholder are mainly in connection with the consulting services and financing provided for the development of an online complaint resolution platform as explained in Note 1 to the condensed combined financial statements. These balances are interest free, unsecured and are repayable on demand.
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Share Exchange Agreement
On February 28, 2017, the Company, MBE and the shareholders of MBE entered into a Share Exchange Agreement (the “Share Exchange Agreement”). The Board of Directors of the Company approved the execution and consummation of the transaction under the Share Exchange Agreement on February 28, 2017.
In accordance with the terms and provisions of the Share Exchange Agreement, the Company is to issue an aggregate of 5,248,626 shares of its restricted common stock to the MBE Shareholders in exchange for 157,458,778 of the total issued and outstanding shares of MBE (constituting 100%), thus making MBE its wholly-owned subsidiary. The Board of Directors of the Company and MBE deemed it in the best interests of the respective shareholders to enter into the Share Exchange Agreement pursuant to which the Company would acquire all the technology and assets and assume all liabilities of MBE.
Authorized stock
On October 31, 2016, the Board of Directors of the Company authorized an increase in the Company's shares of common stock to three hundred million (300,000,000) shares with par value remaining at $0.001 and creation of twenty million (20,000,000) shares of preferred stock, par value $0.001. On November 4, 2016, the Company filed a Certificate of Amendment with the Nevada Secretary of State increasing its authorized capital to 300,000,000 shares of common stock, par value $0.001, and 20,000,000 shares of preferred stock, par value $0.001 (the “Amendment). The Amendment was effective with the Nevada Secretary of State on November 4, 2016 when the Certificate of Amendment was filed. The Amendment was approved by the Board of Directors pursuant to written consent resolutions dated October 31, 2016 and further approved by the shareholders holding a majority of the total issued and outstanding shares of common stock of the Company pursuant to written consent resolutions dated October 31, 2016.
Common stock issued and outstanding
On May 31, 2016 and effective October 3, 2016, the Company’s previous majority shareholder, sole executive officer and member of the Board of Directors, entered into certain stock purchase agreements (collectively, the “Stock Purchase Agreements”) with certain individuals and/or entities (collectively, the “Investors”). In accordance with the terms and provisions of the Stock Purchase Agreements, the then majority shareholder sold and transferred at a per share price of $0.037 the control block of the Company consisting of 5,000,000 shares of restricted common stock and representing approximately 62.5% of the total issued and outstanding shares of common stock.4. Other Related Party Transactions
During the quarter periodthree and six months ended NovemberJune 30, 2017,2023 and 2022, the Company issued 4,720,532 sharesincurred $nil (2022 – $nil) and $nil (2022: $11,366), respectively in connection withresearch and development fees to the Share Exchange Agreement as explained above. The remaining sharesPresident of 528,094 are included in common stock to be issued.the Company.
As at November 30, 2017 the Company has 124,720,532 outstanding common stock comprising of 79,717,199 restricted stock and 45,003,333 unrestricted stock. As at February 28, 2017, the Company has 120,000,000 outstanding common stock comprising of 75,000,000 restricted stock and 45,000,000 unrestricted stock.5. Equity
Common stock to be issuedPreferred Stock
CommonThe preferred stock to be issued of 3,022,844 shares comprise of:
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Preferred stock
On April 20, 2017, the Board of Directors authorized the issuance of the 1,000,000 shares of Series A Preferred Stock to its sole executive officeroutstanding at June 30, 2023 and memberDecember 31, 2022 respectively, 185,400 and nil(0) shares of the BoardSeries B outstanding at June 30, 2023 and December 31, 2022 respectively, 915,000 and nil(0) shares of Directors in considerationSeries C outstanding at June 30, 2023 and December 31, 2022 respectively, nil(0) shares of his services performed during the year ended February 28, 2017. These preferred stocks contain certain rightsSeries D outstanding at June 30, 2023 and preference as detailed below:December 31, 2022 and nil(0) shares of Series E outstanding at June 30, 2023 and December 31, 2022.
Preferred A: (1,000,000 shares authorized):
· | In the event of acquisition of the Company, the preferred | |
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· | The | |
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· | Each holder of preferred stock shall be entitled to cast 200 votes. | |
· | Each holder shall be entitled to receive 30 for 1 share of liquidation proceeds $.001 par value per share. |
The fair value of these 1,000,000 preferred stock amounting to $38,694,414 was determined by an independent valuation usingIn connection with the assumptions i. e. conversion value, control premium of 11.15% based on similar publicly trading companies, voting and sale/potential merger rights of(Note 7), the stock and stock price of $0.69. As the issuancecompany established additional series of preferred stock, related to past services, therefore, this amount was recordedsummarized as stock based compensation infollows:
Preferred B: (1,000,000 shares authorized):
· | The stockholder can convert each share of preferred stock into 30 shares of common stock; and | |
· | Each holder shall be entitled to cast no votes. | |
· | Each holder shall be entitled to receive 30 for 1 share of liquidation preference $.001 par value per share. |
2023 Activity
During the combined statements of operations during the previous year ended February 28, 2017. The charge relating to three and nine months ended November 30, 2016 amounts to $9,673,604 and $29,020,811.
Warrants
On December 1, 2016,March 31, 2023, the Company issued 18,275,000 warrants to certain shareholders915,400 shares of Series B preferred stock as a deposit on the Company’s potential merger (see Note 7). Such shares have been issued in advance of the Company for their services forclosing of the year ended February 28, 2017. These warrants have a strike price of $0.40merger and will expire on December 1, 2019.be accounted for in purchase accounting if such merger is consummated. The value of the shares have been recorded at the fair value on the date of these warrants was measuredgrant. As the Company has not determined the purchase accounting of the potential transaction, such amounts have been included as a component of stockholders’ deficit.
During the three months ended June 30, 2023, the Company issued 21,900,000 shares of common stock upon the conversion of 730,000 shares of Series B preferred stock in accordance with the original conversion terms.
Preferred C: (1,000,000 shares authorized):
· | The stockholder cannot convert into common stock; and | |
· | Each holder of preferred stock shall be entitled to cast 250 votes. | |
· | Each holder shall be entitled to no liquidation preference. |
2023 Activity
During the three months ended March 31, 2023, the Company issued 915,000 shares of Series C preferred stock as a deposit on the Company’s potential merger (see Note 7). Such shares have been issued in advance of the closing of the merger and will be accounted for in purchase accounting if such merger is consummated. The value of the shares have been recorded at the fair value on the date of grant. As the Company has not determined the purchase accounting of the potential transaction, such amounts have been included as a component of stockholders’ deficit.
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Preferred D; (1,000,000 shares authorized):
· | The stockholder can convert each share of preferred stock into 100 shares of common stock; and | |
· | Each holder of preferred stock shall be entitled to cast no votes. | |
· | Each holder shall be entitled to receive 30 for 1 share of liquidation preference $.001 par value per share. |
Preferred E; (2,000,000 shares authorized):
· | The stockholder can convert each share of preferred stock into 10 shares of common stock; and | |
· | Each holder of preferred stock shall be entitled to cast no votes. | |
· | Each holder shall be entitled to receive 10 times per share of liquidation proceeds $.001 par value per share. |
Common Stock
During the three months ended June 30, 2023, the Company issued 19,124,680 shares of common stock as a deposit on the Company’s potential merger (see Note 7). Such shares have been issued in advance of the closing of the merger and will be accounted for in purchase accounting if such merger is consummated. The value of the shares have been recorded at the fair value on the date of grant using(based on the Black-Scholes option pricing model usingclosing share price of the Company’s common stock on such date). As the Company has not determined the purchase accounting of the potential transaction, such amounts have been included as a component of stockholders’ deficit.
6. Discontinued Operations
On June 27, 2022, the Company finalized the split-off of MBE Holdings, Inc., and as part of the split-off agreement notes payable of MBE Holdings, Inc. totaling approximately $4 million, were assumed by Flooid and the original creditors assigned their rights in the notes payable to an affiliated entity of Quantum.
In connection with the transaction the Company derecognized $1,158,000 of liabilities, including $461,000 of accounts payable and accrued liabilities and $696,000 of notes payable. The substantial portion of these liabilities were assumed by MBE Holding, Inc.
The Company has accounted for the Split-off of MBE Holding, Inc. as discontinued operations in accordance with ASC No. 205-20, Discontinued Operations.
Based on the related party nature of such transaction, the Company recorded the effect of the transaction as a capital contribution.
Discontinued Operations disclosures for 2022 period
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TOTAL REVENUE |
| $ | — |
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| $ | — |
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OPERATING EXPENSES |
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General and administrative expense |
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| 34,752 |
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| 8,576 |
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Research and development |
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| 138,449 |
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| 31,393 |
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TOTAL OPERATING EXPENSES |
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| 173,201 |
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| 39,969 |
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OPERATING LOSS |
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| 173,201 |
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| 39,969 |
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Finance Costs |
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| — |
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| — |
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NET LOSS OF DISCONTINUED OPERATIONS |
| $ | (173,201 | ) |
| $ | (39,969 | ) |
Depreciation was approximately $0 and $0 for the six months ended June 30,2022 and for the three months ended June 30, 2022, respectively.
The consolidated statements of cash flows do not present the cash flows from discontinued operations separately from cash flows from continuing operations.
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7. Potential Merger
On March 29, 2023 FlooidCX Corp. (“FLCX”), a Nevada corporation entered into An Agreement and Plan of Merger (the “Agreement”) with Quantum Energy, Inc., a Nevada corporation (“QREE”). Under the terms of the Agreement, the shares of QREE will be exchanged for the shares of FLCX on the following assumptions:basis:
QREE | FLCX | |
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Common 6 shares | Common 1 share | |
Series D Preferred 1 share | Series D Preferred 1 share | |
At grant dateUnder the fair valueterms of these warrants were determined at $2,110,333.the Merger Agreement, the surviving company will change its name from flooidCX Corp. to Quantum Energy, Inc. and management shall apply to change the trading symbol of the surviving corporation from FLCX to QREE.
The Agreement contains representations and warranties of the parties that are common to such agreements. The merger transaction is subject to regulatory approval and applications for such approval would be submitted to all applicable regulatory agencies, including the Securities and Exchange Commission and the Financial Industry Regulatory Authority. In addition, management plans to file a registration statement on SEC Form S-4 to register the shares to be issued to the Quantum shareholders. Under the Agreement, the transaction may not proceed in the event that holders with more than 20% of the number of outstanding shares of QREE shall dissent from the transaction. Certain members of the management of FLCX are also members of the management of QREE. The Merger is contingent upon the filing of SEC Form S-4, SEC and FINRA comments, and Nevada state corporate filings to complete.
Inductance Energy Corporation, (“IE”), of Wyoming, shall be operated as a subsidiary of the surviving entity, currently IE is operated as a subsidiary of Quantum Energy, Inc. Shareholders of Inductance Energy Corporation will retain their current shareholding in IE. As the issuance of warrants related to past services, therefore, this amount was recorded as stock based compensation in the combined statements of operations during the year (fourth quarter) ended February 28, 2017.Company has not attained all required approvals, such transaction has not yet been consummated.
As at November 30, 2017 and February 28, 2017, there were 18,275,000 warrants were outstanding, fully vested and with a remaining contractual life term of 2.00 and 2.75 years, respectively.8.Subsequent Events
Stock Based OptionsSubsequent to June 30, 2023 and prior to the filing of this Form 10-Q the Company issued 2,300,000 common shares in anticipation of the potential merger, of which 900,000 shares were the result of Preferred B conversions.
On August 16, 2017, the Company approved Directors, Officers, Employees and Consultants Stock Option Plan, under which it authorized 50,000,000 options and issued 5,486,500 options. This plan was established to enable the Company to attract and retain the services of highly qualified and experience directors, officers, employees and consultants and to give such person an interest in the success of the Company.
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On November 27, 2017, the Company approved the issue of a second tranche of 120,000 options to a new Director of the Company pursuant to the Directors, Officers, Employees and Consultants Stock Option Plan, under which it authorized 50,000,000 options.
As at November 30, 2017, the company has issued 5,606,500 options.
The fair value of each option granted is estimated at the time of grant using Black-Scholes option pricing model with the following assumptions:
For Tranche 1, 50% of the grants will vest immediately and 50% will vest one year from grant date and for Tranche 2, 100% of the grants vest immediately.
All grants will expire on the fifth anniversary of the grant date. The risk-free interest rate is based on the yield of U.S. Treasury securities that correspond to the expected holding period of the options. The volatility was determined based on company’s historical stock prices. The expected forfeiture (attrition) rates were based on the position of the consultants receiving the options. The dividend yield was based on an expected future dividend rate for the period at the time of grant.
The following table summarizes the stock option activities of the Company:
Number of options Weighted average exercise price ($) Granted Excercised Outstanding as of November 30, 2017 5,606,500 0.200 — 0.200 5,606,500 0.200
The fair value of tranche 1 options at the issuance date was determined at $1,087,917 out of which $136,076 and $725,046 were expensed during the three and nine months ended November 30, 2017 respectively based on vesting period and were included in stock based compensation with corresponding credit to additional paid-in-capital.
The fair value of tranche 2 options at the issuance date was determined at $19,353 and expensed entirely in the quarter ended November 30, 2017.
As at November 30, 2017 there were 5,606,500 stock options outstanding, 2,863,250 vested and with a remaining contractual life term of 4.71 years
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The Company’s transactions with related parties were carried out on normal commercial terms and in the normal course of the Company’s business. Other than disclosed elsewhere in the unaudited condensed combined financial statements, the related party transactions and balances are as follows:
Research and development expenses for the three and nine months ended November 30, 2017 include consulting charges from shareholders and related parties of $54,524 and $182,619, respectively (2016: $104,267 and $273,335 respectively).
9. COMMITMENTS
On March 8, 2016, the Company entered into an operating lease contract for its office premises in Oakville, Ontario for a three year and eight months term commenced from May 1, 2016. The monthly lease payment is between $3,350 to $4,890 plus applicable taxes.
On December 6, 2016, the Company entered into a second operating lease contract for its additional office premises in Oakville, Ontario for a three year term commencing from January 1, 2017. The monthly lease payment is between $2,500 to $3,800 plus applicable taxes.
10. SUBSEQUENT EVENTS
The Company’s management has evaluated subsequent events up to January 16, 2018, the date the condensed combined financial statements were issued, pursuant to the requirements of ASC 855 and has determined the following material subsequent events:
During December 2017, the Company sold 428,571 shares of common stock to one investor through a private placement at a price of $0.35 per common stock and received gross proceeds of $150,000.
During December 2017, our Board of Directors (the “Board”) approved an aggregate of 5,674,944 shares of our restricted common stock to certain non-affiliated consultants (the “Consultants”) in consideration of various services rendered to the Company. As of the date of this Quarterly Report, these shares are not issued.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion provides an analysis of the Company’s financial condition and results of operations and should be read in conjunction with the Interim Condensed CombinedConsolidated Financial Statements and notes thereto included in Item 1 of Part I of this Quarterly Report on Form 10-Q and with the Company’s Annual Report on Form 10-K10-KT filed for the fiscal year ended February 28, 2017.December 31, 2022. The discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors.
Overview
Gripevine, Inc.flooidCX Corp., formerly known as Gripevine, Inc. (the “Company”), was incorporated under the name Baixo Relocation Services, Inc. (the "Company"), was incorporated in the state of Nevada on January 7, 2014. On May 31, 2016, Rosy Rodrigues (“Rodrigues”), our prior majority shareholder, sole executive officer and member of the Board of Directors, entered into those certain stock purchase agreements effective October 3, 2016 (collectively, the “Stock Purchase Agreements”) with certain individuals and/or entities (collectively, the “Investors”). In accordance with the terms and provisions of the Stock Purchase Agreements, Rodrigues sold and transferred the control block of the Company consisting of 5,000,000 shares of restricted common stock at a per share price of $0.037, representing approximately 62.5% of the total issued and outstanding shares of common stock and resulting in a change in control. The Company operated as a relocation service provider for clients moving to the State of Goa, India.
Effective February 28, 2017, we entered into a share exchange agreement (the “Share“MBE Exchange Agreement”) with MBE Holdings Inc., a private corporation organized under the laws of Delaware (“MBE”) and the shareholders of MBE (the “MBE Shareholders”), pursuant to which ShareMBE Exchange Agreement we acquired all the technology and assets and assumeassumed all liabilities of MBE, and MBE became our wholly-owned subsidiary. In accordance with the terms and provisions of the ShareMBE Exchange Agreement, an aggregate of 5,248,626 (pre-reverse split) shares of our restricted common stock are to bewere issued to the MBE Shareholders in exchange for 157,458,778 of the total issued and outstanding shares of MBE. As
Effective March 18, 2019, we changed our name to flooidCX Corp. pursuant to Certificate of Amendment to our Articles of Incorporation filed with the Nevada Secretary of State. The name of the dateCompany was changed as part of this Quarterly Report, an aggregate 4,720,532our rebranding, which better reflects our new business direction into the customer care and feedback solutions space – offering easy to adapt customer care and feedback solutions to enterprises of all sizes.
On May 17, 2019, we entered into a Share Exchange Agreement (the “R1 Exchange Agreement”) with the stockholders of Resolution 1, Inc., a Delaware corporation (“R1”), to acquire all of the outstanding shares of R1 in exchange for 10,000,000 (pre-reverse split) restricted shares of our restricted common stock have been issued to the MBE Shareholders. See “Part II. Item 2. Unregistered Sales of Equity Securities(the “Acquisition”). R1 has developed a comprehensive customer care and Use of Proceeds – Share Exchange Agreement”.
MBE was formedfeedback management platform, which is delivered as a limited liability company on April 13, 2010,cloud-based, software as a service solution. R1 was founded in August 2012 by Richard Hue, the CEO and subsequently converted into a corporation on August 3, 2012, underdirector of our Company. The Acquisition was approved by the lawsindependent members of the Stateboard of Delaware. MBE is engaged in research and development activities to offer an online complaint resolution platform for consumers and business, including ratings, reviews and polling’s. As such, its efforts to date have been devoted in building technology that enables access to this market throughdirectors of the development of a tangible product. The Share Exchange Agreement resulted in a change in overall business operationsCompany. Since the majority shareholders of the Company bringing potential value to our shareholders. Followingand R1 are the Share Exchange Agreement, we ceased operationssame, this did not result in the change in control at the ultimate parent or the controlling shareholder level, and was accounted for as a relocation service provider and engaged in developing and building an online resolution platform.common control transaction.
SinceOn January 27, 2021, the Company’s common stock began trading on a 1-for-85 reverse stock split basis.
Our mission is to help businesses bring back the conversation with customers with innovative, simple to use solutions that empower both the businesses and customers to communicate and create positive outcomes. With the consummation of the ShareR1 Exchange Agreement resulting in MBER1 being our wholly-owned subsidiary, we have been involved in the ongoing developmentnow offer a suite of customer relationship management (CRM) solutions that enhances and marketing of “Gripevine”, which is a social customer experience platform for social customer service and consumer reviews. “Gripevine” includes a proprietary process to assist companies in resolving customer service complaints (the “Gripevine Proprietary Process” or “Gripevine”). The Gripevine Proprietary Process helps consumers achieve resolutions while enabling businesses to improve consumer loyalty. Our platform includes the handling of ratings, reviews, complaint resolution statuses whilebuilds upon our initial offering, data collection features such as scoring, polling, comments, voting, and credibility points – all with the aim of creating a home for connections, resolution, business improvement, and loyalty enhancement. Consumers with legitimate customer service complaints can post it (“plant a gripe”) and connect with companies who in turn can interact with their customers on a level playing field to find an amicable resolution.“GripeVine.”
Unlike other review sitesWe offer unified communications and collaboration online CRM solutions - GripeVine and Resolution1. GripeVine is a consumer-to-business platform that cater specificallyhelps build a customer feedback-minded community, focused on transparency, mutual respect and open communications among like-minded customers and businesses – all working together – to accumulatingfacilitate positive outcomes. It allows for private messaging between customers and displaying consumer feedback, the Gripevine business model offers significant value to both consumers and businesses. Management of the Corporation believesbusinesses for positive resolutions, so that the Gripevine Proprietary Process brings fairness and balance by: (i) ensuring users are real; (ii) allowing companies to reach out and verify customer identity; (iii) flagging as fake those consumers whobusinesses are not identifiable;forced to communicate via the comments section. Resolution1 functions as a cloud-based customer care and (iv) providing companies free accessfeedback workflow management platform, where businesses can manage the entire logistics of customer care, feedback or inquiries throughout their entire organizations. Businesses can respond quickly and accurately to their customers. Gripevine’s unique proposition incustomers, while keeping track of every customer interaction. The platform is designed to grow and scale, so that businesses of all sizes, from small to medium-size enterprises (SMEs) to large enterprises, can use this socialcloud-based customer experience space is to create consumer-company connections in order to drive loyalty through efficientcare and effective handling of online customer feedback and commentary.management system
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Results of Operations
The following discussions are based on our unaudited interim condensed combinedconsolidated financial statements, including our wholly owned subsidiary.wholly-owned subsidiaries. These charts and discussions summarize our unaudited interim consolidated financial statements for the threethree-month periods ended June 30, 2023 and nine month period ended November 30, 2017 and November 30, 2016,2022, and should be read in conjunction with the Company’s audited combinedconsolidated financial statements for the yearsperiod ended February 28, 2017 and February 29, 2016December 31, 2022 and notes thereto included in the Form 10-K10-KT filed with the SEC on June 14, 2017.May 4, 2023.
The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. The Corporation’sOur actual results could differ materially from those discussed in the forward lookingforward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this Quarterly Report on Form 10-Q. The financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
Nine Month Period Ended NovemberRevenue. There was no revenue generated for the three months ended June 30, 2017 Compared2023, as compared to Nine Month Period Ended November 30, 2016$0 for the comparable period in 2022.
Total Revenue.We did not generate any revenue during the nine month periods ended November 30, 2017 or November 30, 2016.Operating expenses.
Operating expenses.During the nine month periodquarter ended NovemberJune 30, 2017,2023, we incurred operating expenses in the amount of $1,644,983$22,050 compared to operating expenses incurred during the nine month periodquarter ended November 30, 2016comparable 2022 of $30,089,716$24,325 (a decrease of $28,444,733)$2,275). Operating expenses include: (i) general and administrative of $300,818 (2016: $290,323)$22,050 (2022: $24,325); and (ii) research and development expenses of $599,766 (2016: $778,582); and (iii) stock based compensation of $744,399 (2016: $29,020,811)$0 (2022: $nil(0)). General and administrative expenses increaseddecreased by $10,495 mainly$2,275, due primarily to an increasethe decrease in professional fees.cost of accounting and reports compilation. Research and development expenses decreased by $178,816 based on streamliningwas unchanged primarily due to a business focus adjusted to the services and scopepreparation for merger.
Net loss.
The Company had net loss of work of existing consultants. Stock based compensation also decreased by $28,276,412 mainly relating to (a) the fair value of $38,694,414 for which a charge$28,177 or $0.00 per share (continuing operations) for the ninethree months ended NovemberJune 30, 2016 was $29,020,811 pertaining to the issuance of 1,000,000 shares of Series A Preferred Stock to Richard Hue, our President/Chief Executive Officer; and (b) the valuation of the grant of 5,606,500 stock options resulting in $744,399 expensed during the nine month period ended November 30, 2017.
Net Loss.Our net loss for the nine month period ended November 30, 2017 was $1,644,9832023 compared to a net loss of $30,089,716 during$78,852 or $0.02 per share (continuing operations) for the nine month periodthree months ended NovemberJune 30, 2016 (a decrease in net loss of $28,444,733). We did not generate any revenue during the nine month periods ended November 30, 2017 and November 30, 2016, respectively.2022.
Translation Adjustment.During the nine month period ended November 30, 2017, we incurred a translation adjustment of ($104,305) compared to ($18,539) incurred during the nine month period ended November 30, 2016 representing change in the foreign exchange rate as a result of translating transaction and balances of Canadian based subsidiary.Discontinued operations
Comprehensive income (loss). Thus, this resultedOn June 27, 2022, the Company finalized the split off of MBE Holdings, Inc. As of June 27, 2922, the Company transferred all the equity in comprehensive lossMBE Holdings, Inc. to Richard Hue, former majority shareholder and CEO of ($1,540,678) or ($0.013) per sharethe Company. MBE’s historical operations consisted primarily of business holdings.
Six-Month Period Ended June 30, 2023 Compared to Six-Month Period Ended June 30, 2022
Revenue. There was no revenue generated for the nine month periodthree months ended NovemberJune 30, 20172023, as compared to a comprehensive loss of ($30,071,177) or ($0.251) per share$0 for the nine monthcomparable period ended November 30, 2016. The weighted average number of shares outstanding was 120,909,775 for nine month periods ended November 30, 2017 compared to 120,000,000 for nine months period ended November 30, 2016.in 2022.
Three Month Period Ended November 30, 2017 Compared to Three Month Period Ended November 30, 2016Operating expenses.
Total Revenue.We did not generate any revenue during the three month periods ended November 30, 2017 or November 30, 2016.
Operating expenses.During the three month periodquarter ended NovemberJune 30, 2017,2023, we incurred operating expenses in the amount of $420,375$100,800 compared to operating expenses incurred during the three month periodquarter ended November 30, 2016comparable 2022 of $10,069,929$64,674 (a decreaseincrease of $9,649,554)$36,126). Operating expenses include: (i) general and administrative of $118,262 (2016: $77,895)$100,800 (2022: $53,308); and (ii) research and development expenses of $146,684 (2016: $318,430); and (iii) stock based compensation of $155,429 (2016: $9,673,604)$0 (2022: $11,366). General and administrative expenses increased by $40,367 mainly$47,492, due primarily to anthe increase in professional fees.cost of accounting and reports compilation. Research and development expenses was decreased by $171,746 based on streamliningprimarily due to a business focus adjusted to the services and scopepreparation for merger.
Net loss.
The Company had net loss of work of existing consultants. Stock based compensation also decreased by $9,518,175 relating to: (a) the fair value of $38,694,414 for which a charge$116,241 or $0.02 per share (continuing operations) for the three months ended NovemberJune 30, 2016 was $ 9,673,604 pertaining to the issuance of 1,000,000 shares of Series A preferred stock to Richard Hue, our President/Chief Executive Officer; and (ii) the valuation of the grant of 5,606,500 stock options resulting in $155,429 expensed during the three month period ended November 30, 2017.
Net Loss.Thus, during the three month period ended November 30, 2017, this resulted in a net loss of ($420,375)2023 compared to a net loss of ($10,069,929)$253,162 or $0.04 per share (continuing operations) for the three month periodmonths ended NovemberJune 30, 2016.2022.
Translation Adjustment.During the three month period ended November 30, 2017, we incurred a translation adjustment of $79,679 compared to ($21,478) incurred during the three month period ended November 30, 2016 representing change in the foreign exchange rate as a result of translating transaction and balances of Canadian based subsidiary.
Comprehensive loss. Thus, this resulted in comprehensive loss of $500,054 or $0.004 per share for the three month period ended November 30, 2017 compared to a comprehensive loss of $10,048,451 or $0.084 per share for the three month period ended November 30, 2016. The weighted average number of shares outstanding was 122,749,321 for three month periods ended November 30, 2017 compared to 120,000,000 for three month period ended November 30, 2016.
Liquidity and Capital Resources As of June 30, 2023
Nine Month Period Ended November 30, 2017
As at the nine month period ended November 30, 2017, our current assets were $184,873 and our current liabilities were $2,930,553, which resulted in a working capital deficit of $2,745,680. As at the nine month period ended November 30, 2017, current assets were comprised of: (i) $153,082 in cash; and (ii) $31,791 in prepaid and other receivables. As at the nine month period ended November 30, 2017, current liabilities were comprised of: (i) $26,683 in accounts payable; (ii) $28,083 in accrued liabilities; (iii) $2,046,526 in loans payable; (iv) $174,904 due to related parties; and (v) $654,357 due to shareholder.
As of the nine month period ended November 30, 2017, our total assets were $221,882 comprised of: (i) current assets of $184,873; and (ii) equipment, net of depreciation of $37,009. The increase in total assets during the nine month period ended November 30, 2017 from fiscal year ended February 28, 2017 was primarily due to an increase in cash of $120,404.
As of the nine month period ended November 30, 2017, our total liabilities were $2,930,553 comprised of current liabilities. The increase of $258,995 in total liabilities during the nine month period ended November 30, 2017 from fiscal year ended February 28, 2017 was primarily due to an increase in loans payable of $223,573, accounts payable of $4,358 and amounts due to a shareholder of $85,810 offset by a decrease in accrued liabilities of $50,744 and due to related party of $4,002.
Stockholders’ deficit increased from ($2,576,944) for fiscal year ended February 28, 2017 to ($2,708,671) for the nine month period ended November 30, 2017.
Cash Flows from Operating Activities
We have generated negative$nil(0) cash flows from operating activities. For the nine month periodsix months ended NovemberJune 30, 2017,2023, net cash flows used in operating activities was ($942,751)$nil(0) compared to ($1,046,566)a negative $217,238 for the nine month periodsix months ended NovemberJune 30, 2016. Net cash flows used in operating activities consisted primarily of net loss of ($1,644,983) (2016: $30,089,716), which was adjusted by stock based compensation of $744,399 (2016: $29,020,811) and depreciation of $17,780 (2016: $7,963). Net cash flows used in operating activities was further changed by: (i) an increase of $11,105 (2016: ($2,641)) in prepaid expenses and other receivables; (ii) an increase of $3,836 (2016: $20,841) in accounts payable; and (iii) a decrease of ($52,678) (2016: ($3,824)) in accrued liabilities.2022.
Cash Flows from Investing Activities
For the nine month period ended November 30, 2017, we used cash of $11,998 (2016: $14,486) in investing activities, which consisted of purchase of equipment.
Cash Flows From Financing Activities
Net cash flows provided fromby financing activities during the nine month periodsix months ended NovemberJune 30, 20172023 was $1,100,441, which consisted of: (i) $873,163 in proceeds from issuance of shares; (ii) $166,687 in loans payable; and (iii) $69,552 due to a shareholder, which was offset by ($8,961) due to a related party.$nil(0). During the nine month periodsix months ended NovemberJune 30, 2016,2023, cash flows provided by financing activities was $1,064,424,$nil(0), which consisted of $951,666 in$nil(0) proceeds from loans payablefrom third party and $159,792 due to a shareholder, which was offset by ($47,034) due to related parties.party.
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The balances due to related parties and shareholder are interest free, unsecured and are repayable on demand. The balances due to related parties and shareholders are mainly in connection with the services and financing provided for the development of an online complaint resolution platform.
Off-Balance Sheet Arrangements
There were no off-balance sheet arrangements during the nine month periodsix months ended NovemberJune 30, 20172023 that have, or are reasonably likely to have, a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our interests.
Plan of Operation
As at NovemberAt June 30, 2017,2023, we had an accumulateda working capital deficit of $48,279,952$4,014,730 and we will require additional financing in order to enable us to proceed with our plan of operations.
Thus far, we believe that COVID-19 has not impacted our business negatively. As more businesses adopt virtual office operation models due to the risk of the virus, such adoption may in fact present us with more opportunities to offer businesses cost-effective, cloud-based solutions.
When we will require additional financing, there can be no assurance that additional financing will be available to us, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will not be able to meet our other obligations as they become due. We are pursuing various alternatives to meet our immediate and long-term financial requirements.
We anticipate continuing to rely on equity sales of our common stock in order to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of equity securities or arrange for debt or other financing to fund our planned business activities.
Our auditor has issued a going concern opinion. This means that thereThere is substantial doubt that we can continue as an on-goinga going business for the next twelve months unless we generate sufficient revenues. There is no assurance we will ever reach that point. In the meantime, the continuation of the Company is dependent upon the continued financial support from our shareholders, our ability to obtain necessary equity financing to continue operations and the attainment of profitable operations.
Our operations and financial results are subject to various risks and uncertainties that could adversely affect our business, financial condition and results of operations.
We require approximately $150,000$1,500,000 for the next 12 months as a reporting issuer and additional funds are required. Before generation of revenue, theThe additional funding may come from equity financing from the sale of our common stock or loans from management, related parties or related third parties. In the event we do not raise sufficient capital to implement its planned operations or divest, your entire investment could be lost.
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We have not paid any sums for public relations or investor relations.
Recent Accounting Pronouncements
Recent Accounting Pronouncements
Please seeAs reflected in Note 4 — “Recent Accounting Standards”2 of the Notes to the CondensedInterim Consolidated Financial Statements, there have been recent accounting pronouncements or changes in accounting pronouncements that impacted the six months ended June 30, 2023 or which are expected to impact future periods as follows:
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments, which changes the impairment model for a discussionmost financial assets. This Update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The underlying premise of the effectsUpdate is that financial assets measured at amortized cost should be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The allowance for credit losses should reflect management’s current estimate of recently issued accounting pronouncements.credit losses that are expected to occur over the remaining life of a financial asset. The income statement will be affected for the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. The new standard is effective for fiscal years and interim periods within those years beginning after December 15, 2022. The Company determined that the new standard did not have an effect on its financial statements.
Critical Accounting Policies
OurThe Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. To apply these principles, we must make estimates and judgments that affect our reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. In many instances, we reasonably could have used different accounting estimates and, in other instances, changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ significantly from our estimates. To the extentdoes not believe that there are any other new accounting pronouncements that have been issued that might have a material differences between these estimates and actual results, ourimpact on its financial conditionposition or results of operations will be affected. We base our estimates and judgments on historical experience and other assumptions that we believe to be reasonable at the time and under the circumstances, and we evaluate these estimates and judgments on an ongoing basis. We refer to accounting estimates and judgments of this type as critical accounting policies, judgments, and estimates. Management believes there have been no material changes during the three months ended November 30, 2017 to the critical accounting policies reported in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended February 28, 2017.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
ITEM 4. CONTROLS AND PROCEDURESPROCEDURES.
Evaluation of Disclosure Controls and Procedures
Pursuant toAs required by Rule 13a-15(b)13a-15 under the Securities Exchange Act, of 1934 (“Exchange Act”), the Companyour management has carried out an evaluation, with the participation and under the supervision of the Company’s management, including the Company’s Chief Executive Officer (“CEO”)our chief executive officer and Chief Financial Officer (“CFO”) (the Company’s principalchief financial and accounting officer),officer, of the effectiveness of the Company’sdesign and operation of our disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosureJune 30, 2023. Disclosure controls and procedures are not effective as of November 30, 2017refer to controls and other procedures designed to ensure that information required to be disclosed by the Company in the reports that the Company fileswe file or submitssubmit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms of the SEC and that such information is accumulated and communicated to the Company’sour management, including the Company’s CEOour chief executive officer and CFO,chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure forcontrols and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the reason described below.desired control objectives, and management is required to apply its judgment in evaluating and implementing possible controls and procedures.
BecauseEvaluation of Disclosure Controls and Procedures
Management conducted its evaluation of disclosure controls and procedures under the supervision of our limited operations, we have limited numberchief executive officer and our chief financial officer. Based upon, and as of employees which prohibits a segregationthe date of duties. In addition, we lack a formal audit committee with a financial expert. As we growthis evaluation, our Chief Executive Officer and expand our operations we will engage additional employees and experts as needed. However, there can be no assuranceChief Financial Officer concluded that our operations will expand.disclosure controls and procedures were ineffective as of June 30, 2023 due to the following material weaknesses that our management identified in our internal control over financial reporting as of June 30, 2023:
1) | We do not have an Audit Committee — While not being legally obligated to have an audit committee, it is the management’s view that such a committee, including a financial expert member, is an utmost important entity level control over the Company’s financial statement. Currently the Board of Directors acts in the capacity of the Audit Committee and does not include a member that is considered to be independent of management to provide the necessary oversight over management’s activities. |
2) | We lack internal accounting personnel who possesses U.S GAAP knowledge and working experience. |
We plan to take steps to remedy these material weaknesses as soon as practicable by implementing a plan to improve our internal control over financial reporting including, but not limited to, hiring additional staff who has U.S. GAAP knowledge and working experience and/or maintaining outside consultants experienced in U.S. GAAP financial reporting as well as in SEC reporting requirements. Our management team will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and is committed to taking further action to solve these deficiencies as necessary.
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Evaluation of Changes in Internal Control Overover Financial Reporting
Management 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). Internal control over financial reporting is a process designed by, or under the supervision of, our president (our principal executive officer and our principal accounting officer and principal financial officer), to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of our company are being made only in accordance with authorizations of management and directors of our company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not provide absolute assurance that a misstatement of our financial statements would be prevented or detected.
Further, the evaluation of the effectiveness of internal control over financial reporting was made as of a specific date, and continued effectiveness in future periods is subject to the risks that controls may become inadequate, because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management has conducted, with the participation of our CEO (our principal executive officer, our principal accounting officer and our principal financial officer), an evaluation of the effectiveness of our internal control over financial reporting as of June 30, 2023 in accordance with the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) 2013 in Internal Control — Integrated Framework. Based on this assessment, management concluded that as of June 30, 2023, there are material weaknesses, as identified above, in our internal controls over financial reporting. The material weaknesses identified did not result in the restatement of any previously reported financial statements or related financial disclosure, nor does management believe that it had any affect on the accuracy of the Company’s financial statements for the current period.
Our Company is in the process of adopting specific internal control mechanisms. Future controls, among other things, will include more checks and balances and communication strategies between the management and the board to ensure efficient and effective oversight over Company activities as well as more stringent accounting policies to track and update our financial reporting.
Changes in Internal Control over Financial Reporting
There were no changes in our internal controlcontrols over financial reporting that occurred during the period covered by this reportsix months ended June 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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ITEM 1.LEGAL PROCEEDINGS
The Company currently is not a party to any legal proceedings and, to the Company’s knowledge; no such proceedings are threatened or contemplated.
Not applicable.
ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS, ISSUER PURCHASE OF EQUITY SECURITIES
Consulting AgreementsOn or about June 21, 2023 six holders of our Series B Preferred Stock converted their shares into approximately 21,900,000 shares of common stock.
During December 2017, our Board of Directors (the “Board”) approved to issue an aggregate of 5,674,944On or about June 26, 2023 approximately 19,124,680 shares of our restricted common stock were issued to certain consultants (the “Consultants”)33 individuals in considerationexchange for shares of various services rendered to the Company. Asstock of the date of this Quarterly Report, these shares are not issued. a third party issuer.
The shares of restricted common stock aredescribed above were issued pursuant to be issued to the Consultants in reliance on thean exemption fromfor registration underprovided by Section 4(a)(2)4(2) of the Securities Act of 1933,1933. This was not a public offering as amended (the “Securities Act”).
Private Placement
Duringdefined in Section 4(2) due to the nine month period ended November 30, 2017limited number of persons that received the shares, and to current date, we have engaged in private placements offeringsthe manner of our sharesthe issuance. In addition, the transferees of restrictedthe common stock in reliance on Regulation S promulgated under the Securities Act.
During the nine month period ended November 30, 2017 pursuant to subscription agreements (“Subscription Agreements”), we sold an aggregate 2,494,750 shares of our restricted common stock in a private placement offering to certain non-U.S. investors at a price of $0.35 per share of common stock and received gross proceeds of $873,163. On December 15, 2017, the Board approved to issue an aggregate of 2,494,750 shares of common stock to the investors. As of the date of this Quarterly Report, these shares are not issued.
The foregoing description of the Subscription Agreement is not complete and is qualified in its entirety by reference to the full text of the Subscription Agreement, a form of which is filed as Exhibit 10.1 hereto and is incorporated by reference herein.
The securities referenced above were issued in reliance on the exemption from registration afford by Regulation S promulgated under the Securities Act as a transaction by an issuer not involving a public offering. Such shares of common stock have not been registered under the Securities Act or under any state securities laws and may not be offered or sold without registration with the United States Securities and Exchange Commission or an applicable exemption from the registration requirements. The investors acknowledged that the securities to be issued have not been registered under the Securities Act, that they understood the economic risk of an investment in the securities, andrepresented that they had the opportunity to ask questions of and receive answers from our management concerning any and all matters related to acquisitionnecessary investment intent as required by Section 4(2) of the securities.
Grant of Options
On November 27, 2017,Securities Act and agreed to receive share certificates or book entry shares containing a legend that stated the Board granted Ms. Helen Bernardino an optionsecurities are restricted pursuant to purchase 120,000 shares of common stock of the Company, par value $0.001, at an exercise price of $0.20 per share, in connection with Ms. Bernardino’s appointment as a director of the Company. Such option shall have a term of five (5) years and vested immediately upon the effective date of her appointment, November 27, 2017. The securities were issued in reliance on the exemption from registration under by Section 4(a)(2)Rule 144 of the Securities Act.
Except as set forth in this Item 2, there were no unregistered securities sold by us during the quarter ended November 30, 2017 that were not otherwise disclosed in a Current Report on Form 8-K.
ITEM 3.DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.MINE SAFETY DISCLOSURES
Not applicable.
See Part II, Item 2None.
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ITEM 6. EXHIBITS
The following exhibits are filed as part of this Form 10-Q
ITEM 6.EXHIBITS10-Q:
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101** | Interactive data files pursuant to Rule 405 of Regulation S-T. | ||
101.INS |
| Inline XBRL Instance Document | |
101.SCH |
| Inline XBRL Taxonomy Extension Schema | |
101.CAL |
| Inline XBRL Taxonomy Extension Calculation Linkbase | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | ||
101.LAB |
| Inline XBRL Taxonomy Extension Labels Linkbase | |
101.PRE |
| Inline XBRL Taxonomy Extension Presentation Linkbase | |
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104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). |
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+filed herewith
** | XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. |
| Table of Contents |
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Reportreport to be signed on its behalf by the undersigned, thereunto duly authorized.
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| By: | /s/ | |
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| Chief Executive Officer, President, Secretary, Treasurer, Chief Financial Officer and Director | ||
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