UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X]

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period endedSeptember 30, 2017March 31, 2022

[  ]☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to ____________

Commission file number000-55049

APPCOIN INNOVATIONSCURRENCYWORKS INC.

(Exact name of registrant as specified in its charter)

561 Indiana3250 Oakland Hills Court Venice Beach, , Fairfield, CA 9029194534

(Address of principal executive offices) (Zip Code)

310.658.4413424.570.9446

(Registrant’s telephone number, including area code)

Redstone Literary Agents, Inc. 3250 Oakland Hills Court, Fairfield, Ca 94534N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 11,600,00073,359,430 shares of common sharesstock issued and outstanding as at November 13, 2017.May 11, 2022.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

ItemITEM 1. Financial Statements.FINANCIAL STATEMENTS.

Our unaudited condensed interim consolidated financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.

It is the opinion of management that the unaudited condensed interim consolidated financial statements for the quarter ended September 30, 2017March 31, 2022 include all adjustments necessary in order to ensure that the unaudited condensed interim consolidated financial statements are not misleading.

AppCoin Innovations

CurrencyWorks Inc. (formerly RedStone Literary Agents, Inc.)

Condensed Consolidated Balance Sheets

(Unaudited)

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

AppCoin Innovations

CurrencyWorks Inc. (formerly RedStone Literary Agents, Inc.)

Condensed Consolidated Statement of Operations

(Unaudited)

* Denotes a loss of less than $(0.01) per share.

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

AppCoin InnovationsCurrencyWorks Inc. (formerly RedStone Literary Agents, Inc.)

Condensed Consolidated Statements of Cash Flows

(Unaudited)

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

AppCoin Innovations Inc. (formerly RedStone Literary Agents, Inc.)

CurrencyWorks Inc.

Condensed Consolidated Statements of Cash Flows (cont’d)

(Unaudited)

SUPPLEMENTAL CASH FLOW INFORMATION

Notes to Unaudited Condensed UnauditedInterim Consolidated Financial Statements

As of September 30, 2017March 31, 2022 and for the ninethree months ended September 30, 2017March 31, 2022 and 20162021

1. NATURE AND CONTINUANCE OF OPERATIONS

AppCoin InnovationsCurrencyWorks Inc. (formerly RedStone Literary Agents, Inc.)(the(the “Company”) was incorporated under the laws of the State of Nevada U.S. on July 20, 2010, with an authorized capital of 75,000,000400,000,000 common shares, having a par value of $0.001$0.001 per share. During the period ended December 31, 2010, the Company commenced operations by issuing shares and developing its publishing service business, focused on representing authors to publishers.

In November 2014, Ms. Wolf resigned as a director of the Company and the Company ceased pursuing the publishing service business.

On August 1, 2017, the Company incorporated a Nevada subsidiary, AppCoin Innovations (USA) Inc., which will be used to operate12, 2021, the Company’s newsubsidiary sBetOne, Inc. (“sBetOne”) entered into a business of providing services for blockchain initial coin offerings.

On August 17, 2017, the Company, Redstone Literary Agents,combination with a related party, VON Acquisition Inc., completed (“VON”) whereby sBetOne became a merger with its wholly owned subsidiary AppCoin Innovations Inc.,of VON. Please see Note 15.

On June 22, 2021, we incorporated a Nevada corporationnew Delaware subsidiary, Motoclub LLC, to effectcreate a change in the Company’s name from “RedStone Literary Agents, Inc.”marketplace for digital automotive collectibles.

On June 22, 2021, we incorporated a new Delaware subsidiary, EnderbyWorks, LLC, to “AppCoin Innovations Inc.”.create a direct-to-consumer, feature-length film viewing and distribution platform delivering feature-length films and digital collectible entertainment content as NFTs.

The Company’s new business model is a services and development business that providesto provide a turnkey set of services for companies to develop and integrate blockchain and cryptocurrency technologies with a view to conducting initial coin offerings.into their business operations. The Company will enable its customers to focus on their core competencies while providing the necessary resources and expertise to execute a strategy that will enable companies to integrate new blockchain plus cryptocurrency technologies and execute initial coin offerings.into their business operations. The Company’s plan is toCompany will be partially compensated by these companies by receivingon a fee-for-services model. The Company may also accept tokens or coins in payment for its services, to the initial coin offerings. This will allow the Company’s shareholders to indirectly participate in multiple initial coin offerings without having to open new accounts or electronic wallets with cryptocurrency exchanges.extent permitted under applicable law.

The Company’s services will include strategic planning, project planning, structure development and administration, campaign management, business plan modelling,modeling, technology development support, whitepaper preparation, due diligence reporting, escrow management, governance planning and management.

Going Concern

These unaudited condensed interim consolidated financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has incurred losses since inception resulting in an accumulated deficit of $348,973$36,474,899 and $35,248,384 as at September 30, 2017of March 31, 2022 and December 31, 2021, respectively and further losses are anticipated in the pursuit of the Company’s new service business opportunity, raising substantial doubt about the Company’s ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand, loans from directors and/or the private placement of common stock.stock/warrants.

The financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The unaudited condensed interim consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles (“U.S. GAAP”GAAP”) in the United States of AmericaAmerica.

Basis of Consolidation

The unaudited condensed interim consolidated financial statements include the accounts of the Company and are presented in US dollars.its subsidiary, CurrencyWorks USA Inc. (formerly ICOx USA, Inc.), and its majority-owned subsidiaries, Motoclub LLC, and EnderbyWorks, LLC. All intercompany transactions and balances have been eliminated.

Unaudited Interim Financial Information

The accompanying unaudited condensed interim consolidated financial statements and related notes have been prepared in accordance with U.S. GAAP for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. The unaudited condensed interim consolidated financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These unaudited condensed interim consolidated financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 20162021 and notes thereto contained in the information as part of the Company’s Annual Report on Form 10-K, which was filed with the SEC on March 23, 2017.April 15, 2022.

Income TaxesUse of Estimates

The Company followspreparation of unaudited condensed interim consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the liability methodreported amounts of accounting for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying values and their respective income tax basis (temporary differences). The effect on deferred income taxdisclosure of contingent assets and liabilities at the date of a change in tax rates is recognized in income in the periodinterim consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and these differences could be material.

Cash and Cash Equivalents

Cash and cash equivalents include short-term, highly liquid investments, such as certificates of deposit or money market funds that includesare readily convertible to known amounts of cash and have original maturities of three months or less. All cash balances are held by major banking institutions.

The carrying amounts of cash and cash equivalents, prepaid expenses, short-term loans receivable, trade payables and convertible notes payable approximate their fair value due to the enactment date.short-term maturity of such instruments.

At September 30, 2017, a full deferred tax asset valuation allowance has been provided and no deferred tax asset has been recorded.Contingent Liabilities

Earnings per Share

The Company computes loss per shareaccounts for its contingent liabilities in accordance with ASC 105,No. 450 “Contingencies”. A provision is recorded when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

With respect to legal matters, provisions are reviewed and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. As of March 31, 2022 and December 31, 2021, the Company was not a party to any litigation that could have a material adverse effect on the Company’s business, financial position, results of operations or cash flows.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

Collectability of Accounts Receivable

In considering the collectability of accounts receivable, the Company takes into account the legal obligation for payment by the customer, as well as the financial capacity of the customer to fund its obligation to the Company. The carrying amount of accounts receivable represents the maximum credit exposure on this balance. We have assessed the collectability of the accounts receivables and are not aware of any specific events or circumstances that require an update to our estimates and assumptions or materially affected the carrying value of our assets or liabilities as of the date of issuance of this Quarterly Report on Form 10-Q. These estimates may change as new events occur and additional information is obtained

Earnings per Share

The Company computes earnings (loss) per share (“EPS”) in accordance with ASC 260, “Earnings per Share” which requires presentation of both basic and diluted earnings per shareEPS on the face of the statement of operations. Basic loss per shareEPS is computed by dividing net lossincome (loss) available to common stockholdersshareholders by the weighted average number of shares outstanding common shares during the period. Diluted loss per shareEPS gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per shareIn computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants (Note 13 and Note 8). Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive.

WithAt March 31, 2022, common shares from the exceptionconversion of debt (nil shares), outstanding stock options (8,301,666 shares) (Note 13), and outstanding warrants (21,916,364 shares) (Note 8) have been excluded as their effect is anti-dilutive. At March 31, 2021, common shares from the conversion of debt (12,019,929 shares), outstanding stock options (5,555,000 shares), and outstanding warrants (17,488,750 shares) have been excluded as their effects are anti-dilutive.

Stock-Based Compensation

The Company has adopted FASB guidance on stock-based compensation. Under FASB ASC 718-10-30-2, all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. The fair value of the options is calculated based off the Black Scholes valuation model (Note 13).

The Company has issued stock options to employees and non-employees. Stock options granted to non-employees for services or performance not yet rendered would be expensed over the service period or until the goals had been reached. The fair value calculation is valued as at the grant date. There were no new stock options granted during the period ended March 31, 2022.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, convertible notes, payable discussedand payables. The carrying amount of cash and cash equivalents and payables approximates fair value because of the short-term nature of these items.

When determining fair value, whenever possible, the Company use observable market data, and relies on unobservable inputs only when observable market data is not available. As of March 31, 2022, and March 31, 2021, the Company did not have any level 1 or 2 financial instruments. Please see Note 14 for additional information on level 3 fair value of financial instruments.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging Contracts in Note 3,Entity s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity s Own Equity. ASU 2020-06 will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models results in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU 2020-06 also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 will be effective for public companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Management has not yet evaluated the impact that the adoption of ASU 2020-06 will have on the Company’s consolidated financial statement presentation or disclosures.

Revenue Recognition

Revenue is recognized in accordance with FASB ASC Topic 606, Revenue Recognition. The Company recognizes revenue when persuasive evidence of an arrangement exists, the related services are rendered or delivery has occurred.

The Company generates revenues from two main sources, NFT sales and professional services consulting agreements. These arrangements are generally recognized upon the sale of the NFT through live auctions and online sales or as consulting revenues on a contingent fee basis. There is no prepayment or retainer required prior to performing services and the entire fees is earned on a contingent basis. The Company also provides monthly post-business launch support services. The recurring monthly post-business launch support services are recognized as revenue each month that the subscription is maintained. The Company’s subsidiaries generate revenue from the sale of NFTs that are auctioned or sold directly. NFT revenue is not recognized until it has been sold.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

The Company enters into arrangements for which revenues are contingent upon achieving a pre-determined deliverable or future outcome. Any contingent revenue for these arrangements is not recognized until the contingency is resolved and collectability is reasonably assured.

Differences between the timing of billings and the recognition of revenue are recognized as either unbilled revenue (a component of accounts receivable) or deferred revenue on the consolidated balance sheet. Revenues recognized for services performed but not yet billed to clients are recorded as unbilled revenue.

Reimbursable expenses, including those relating to travel, other out-of-pocket expenses and any third-party costs, are included as a component of revenues. Typically, an equivalent amount of reimbursable expenses are included in total direct client service costs. Taxes collected from customers and remitted to governmental authorities are presented in the statement of operations on a net basis.

Costs to obtain contracts are capitalized and amortized over the course of the revenue cycle.

Service Costs

The Company’s policy is to defer direct service costs that relate to the earning of contingent fee revenue. These deferred costs are expensed when the contingent fee revenue is recognized or when the earning the contingent fee revenue is in doubt. When there are multiple obligations in an agreement or contract, the service costs are recognized based on when it has met the performance obligation and recognized in line with revenues.

3. ACCOUNTS RECEIVABLE

As at March 31, 2022, the Company had no potentially dilutive debt or equity instruments issued or outstanding during the interim three-month periods ended September 30, 2017accounts receivables of $130,956 compared to $nil as at December 31, 2021.

4. NOTES RECEIVABLE – RELATED PARTY

Effective as of May 5, 2021, we loaned $400,000 to Fogdog Energy Solutions Inc. (“Fogdog”) pursuant to convertible promissory note. The note bears interest at a rate of 4% per annum and 2016.

3. NOTES PAYABLE

On September 14, 2015,was due on May 5, 2022. The loan was not repaid nor converted by the Company as at the reporting date and is now payable on demand. The note may not be prepaid without the written consent of our company. Under certain conditions as outlined in the promissory note, the Company may convert the outstanding loan into common shares. Our chief financial officer, secretary and treasurer, Swapan Kakumanu, is a director, chief financial officer and a shareholder of Fogdog.

Effective as of August 20, 2021, we loaned an additional $850,000 to Fogdog Energy Solutions Inc. pursuant to convertible promissory note. The note bears interest at a rate of 10% per annum and comes due on August 20, 2027. The note may not be prepaid without the written consent of our company. Our chief financial officer, secretary and treasurer, Swapan Kakumanu, is a director, chief financial officer and a shareholder of Fogdog. Accrued interest on the total loan as at March 31, 2022 is $66,397 (December 31, 2021 - $24,773).

5. INTANGIBLE ASSET

On July 6, 2021, the Company, through one of its subsidiaries, acquired the rights to a movie for a period of 10 years. This acquisition is linked to one of the Company’s subsidiary projects for movie-related NFTs. The Company has spent $nil in 2022 (2021 - $3,000,000). This asset will be amortized on a straight-line basis over the 10-year life of the asset.

SCHEDULE OF INTANGIBLE ASSETS

The derivative liabilities were revalued at USD$171,126, resulting in a loss of $303,469 for the rate of 18% interest per annum, compounded annually. The principal amountperiod ended March 31, 2022, related to the change in fair market value of the First Note, plus any interest accrued thereon, may be converted into shares of common stock ofderivative liabilities. The derivative liabilities were revalued using the Company at a conversionBlack-Scholes option pricing model with the following assumptions: an exercise price of $0.03 per share. As at September 30, 2017, the First Note had a balance outstanding of $103,463, comprised of a principle amount of $73,825 and accrued interest of $27,160. The Company has determined that no beneficial conversion feature exists due to the current share valueCAD$0.60, our stock price on the date of issuance.valuation of CAD$0.20, expected dividend yield of 0%, average expected volatility of 51.37%, average risk-free interest rate of 1.14%, an average expected term of 0.71 years and foreign exchange rate of 1.2496.

On December8. WARRANTS

For the three months ended March 31, 2016,2022, the Company entered into a private placement subscription agreementissued 3,813,593 warrants.

The fair value of each warrant is estimated using the Black-Scholes valuation method. Assumptions used in calculating the fair value at March 31, 2022 were as follows:

SCHEDULE OF ASSUMPTIONS OF FAIR VALUE OF WARRANT

From time to the current share value on the date of issuance.

On December 31, 2016,time, the Company entered into a private placement subscription agreementmay be subject to legal proceedings and issued an unsecured convertible note (the “Third Note”)claims which arise in the principal amountordinary course of $21,500 to one subscriber. The Third Note included repaymentbusiness. As of the principal amount of $20,000 for an unsecured note issued on June 6, 2016 plus a $1,500 restructuring fee. The Third Note, and accrued interest, will mature five (5) years from the date of issuance and will bear interest at the rate of 18% interest per annum, compounded annually. The principal amount of the Third Note, plus any interest accrued thereon, may be converted into shares of common stock of the Company at a conversion price of $0.03 per share. As at September 30, 2017, the Third Note had a balance outstanding of $24,405, comprised of a principal amount of $21,500 and accrued interest of $2,905. The Company has determined thatMarch 31, 2022, there are no beneficial conversion feature exists due to the current share value on the date of issuance.legal proceedings.

On March 2, 2017, the Company entered into a private placement subscription agreement and issued an unsecured convertible note (the “Fourth Note”) in the principal amount of $20,000 to one subscriber. The Fourth Note, and accrued interest, will mature five (5) years from the date of issuance and will bear interest at the rate of 18% interest per annum, compounded annually. The principal amount of the Fourth Note, plus any interest accrued thereon, may be converted into shares of common stock of the Company at a conversion price of $0.03 per share. As at September 30, 2017, the Fourth Note had a balance outstanding of $22,091, comprised of a principle amount of $20,000 and accrued interest of $2,091. The Company has determined that no beneficial conversion feature exists due to the current share value on the date of issuance.

On June 8, 2017, the Company entered into a private placement subscription agreement and issued an unsecured convertible note (the “Fifth Note”) in the principal amount of $10,000 to one subscriber. The Fifth Note, and accrued interest, will mature five (5) years from the date of issuance and will bear interest at the rate of 18% interest per annum, compounded annually. The principal amount of the Fifth Note, plus any interest accrued thereon, may be converted into shares of common stock of the Company at a conversion price of $0.03 per share. As at September 30, 2017, the Fifth Note had a balance outstanding of $10,562, comprised of a principle amount of $10,000 and accrued interest of $562. The Company has determined that no beneficial conversion feature exists due to the current share value on the date of issuance.

3. NOTES PAYABLE (CONT’D)

On September 7, 2017, the Company received a $250,000 loan from a shareholder. The loan is unsecured, repayable on demand and is non-interest bearing. Subsequent to September 30, 2017, this loan was used to subscribe an unsecured convertible debenture as explained in Note 5 - Subsequent Events.

4. 10. RELATED PARTY TRANSACTIONS

In support of the Company’s efforts and cash requirements, it may rely on advances from stockholders until such time as the Company can support its operations through revenue generation or attain adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by stockholders. Amounts represent advances or amounts paid in satisfaction of liabilities.

The Company’s office premises are providedCompany engaged two clients to it atbuild out their business models, technology strategy, market entry strategy, and capital structure, including a blockchain platform launch. The Company signed an agreement with BIG in which 80% of the revenue received is reimbursed to BIG for expenses incurred to meet the performance obligations as outlined.

As of January 15, 2021, Business Instincts Group (“BIG”) is no cost by its sole director and officer. The Company’s solelonger considered a related party due to Cameron Chell’s resignation as director and officer did not takefrom BIG. Cameron also no longer has any fees for servingbeneficial ownership in BIG.

On December 4, 2018, the Company appointed Swapan Kakumanu as director or officer during the interim three-month periods ended September 30, 2017 and 2016.

5. SUBSEQUENT EVENTS

OnChief Financial Officer. Previously, on October 9, 2017, James P. Geiskopf resignedthe Company had signed an agreement with a company owned by Swapan Kakumanu to complete the accounting functions of the Company. As of March 31, 2022, the Company had trade and other payables owing to this related party of $22,500 (December 31, 2021 - $46,688). On May 5, 2021, the Company loaned Fogdog Energy Solutions Inc. $400,000 of which our CFO is a director, chief financial officer and shareholder of (Note 4).

Effective as secretaryof August 20, 2021, we loaned an additional $850,000 to Fogdog Energy Solutions Inc. pursuant to convertible promissory note. The note bears interest at a rate of 10% per annum and treasurer. Michael Blum was appointedcomes due on August 20, 2027. The note may not be prepaid without the written consent of our company. Accrued interest on the total loan as at March 31, 2022 is $66,397.

On August 12, 2021, the Company’s subsidiary sBetOne entered into a business combination with a related party, VON whereby sBetOne became a wholly owned subsidiary of VON. The Company received 5,902,174 common shares or 6.31% of the total outstanding common shares of VON as at the date of the business combination. The common shares were valued at $0.10 CAD per share. Our CFO is the chief financial officer secretary, treasurerof VON.

As at March 31, 2022, the Company had outstanding notes receivable from a related party of $1,250,000 compared to $1,250,000 as at December 31, 2021.

11. REVENUE

The majority of revenue streams in 2022 relates to the movie distribution revenue and 2021 mainly related to NFT sales with the remainder related to consulting revenue. Please refer to Note 2 for revenue recognition methodology.

12. SHARE CAPITAL

Some of the warrants issued by the Company are denominated in CAD at issuance. The Company’s functional currency is USD. Under U.S. GAAP, where the strike price of warrants is denominated in a directorcurrency other than an entity’s functional currency the warrants would not be considered indexed to the entity’s own stock and would consequently be considered to be a derivative liability. Therefore, the value of the warrants denominated in CAD needs to be included as a derivative liability.

On January 5, 2021 the Company completed a private placement where 2,400,000 units were issued, consisting of one common share and one common share purchase warrant issued at a price of $0.40 (Canadian dollars (“CAD”)) for total gross proceeds of $300,000 CAD ($236,090 USD). The derivative liability valuation of the warrants issued is $1,559,108.

February 4, 2021 the Company completed a private placement where 8,000,000 units were issued, consisting of one common share and one common share purchase warrant issued at a price of $0.50 (Canadian dollars (“CAD”)) for total gross proceeds of $4,000,000 CAD ($3,118,179 USD). The derivative liability valuation of the warrants issued is $1,818,140.

On March 23, 2021, the Company completed a private placement where 1,200,000 units were issued, consisting of one common share and one common share purchase warrant issued at a price of $1 (United States dollars (“USD”)) for total gross proceeds of $1,200,000 USD.

On May 11, 2021, 4,504,600 common shares were issued for debt conversion of $135,138. On June 25, 2021, 3,413,700 common shares were issued for debt conversion of $341,370. The sBetOne Inc. debt of $824,041 was converted into shares of VON upon deconsolidation.

On July 14, 2021, the Company completed a registered direct offering where 4,687,500 units were issued, consisting of one common share and one common share purchase warrant issued at a price of $0.80 USD for total gross proceeds of $3,750,000 USD.

On November 29, 2021, the Company converted debt for services rendered where 51,217 units were issued.

On December 29, 2021, the Company completed a registered direct offering where 1,956,521 units were issued, consisting of one common share and one common share purchase warrant issued at a price of $0.23 USD for total gross proceeds of $450,000 USD.

On December 29, 2021, the Company completed a private placement where 173,609 common shares were issued to directors and officers of the Company at a price of $0.288 USD for total gross proceeds of $50,000 USD.

On January 28, 2022, the Company completed a private placement where 244,139 common shares were issued at a price of $0.2048 USD for total gross proceeds of $50,000 USD.

On January 28, 2022, the Company completed a debt conversion where 488,281 common shares were issued at a price of $0.2048 USD for total gross proceeds of $100,000 USD.

On January 28, 2022, the Company completed a private placement where 1,221,001 common shares were issued at a price of $0.1638 USD for total gross proceeds of $200,000 USD.

On February 11, 2022, the Company completed a private placement where 47,614 common shares were issued in consideration for services rendered to the Company. The common shares were issued at a deemed price of $0.21 USD , for a total value of $9,999 USD.

12. SHARE CAPITAL (CONT’D)

On February 28, 2022, the Company completed a private placement where 2,592,592 common shares were issued at a price of $0.135 USD for total gross proceeds of $350,000 USD.

During the three months ended March 31, 2022, there were nil warrants exercised and nil options exercised for common shares. During the year ended December 31, 2021, there were 11,221,250 warrants and 325,000 options exercised for common shares.

13. STOCK-BASED COMPENSATION

The Company has adopted the 2017 Equity Incentive Plan (“the Plan”) under which non-transferable options to purchase common shares of the Company may be granted to directors, officers, employees, or consultants of the Company. James P. Geiskopf remains as a non-executive directorThe terms of the Company.

On October 15, 2017,Plan provide that our board of directors may grant options to acquire common shares of the Company appointed Bruce Elliott as the presidentat not less than 100% of the Company.In ordergreater of: (i) the fair market value of the shares underlying the options on the grant date and (ii) the fair market value of the shares underlying the options on the date preceding the grant date at terms of up to accommodateten years. No amounts are paid or payable by the appointmentrecipient on receipt of Bruce Elliott, Cameron Chellthe options. On April 26, 2021, the maximum number of options available for grant was increased to 13,300,000 shares. As of March 31, 2022, there are 8,301,666 stock options issued (March 31, 2021 – 5,555,000) and 4,998,334 stock options unissued (March 31, 2021 – 1,430,207).

The Company has resigned asalso granted stock options to non-employees. These stock options were granted to consultants who have provided their services for cash compensation below cost, with the president and was appointed as a non-executive chairman.stock options providing additional compensation in lieu of cash.

On October 15, 2017,February 10, 2021, the Company granted a total of 1,400,0002,200,000 stock options to itsofficers and directors and officers.of the Company. The stock options are exercisable at the exercise price of $0.10$1.17 per share for a period of ten years from the date of grant. The stock options vesthave a fair value of $1.09 and are exercisable as follows:

On October 30, 2017,March 19, 2021, the Company entered intogranted a private placement subscription agreement and issued unsecured convertible notes intotal of 180,000 stock options to a consultant of the principal amountCompany. The stock options are exercisable at the exercise price of $325,000 in exchange$3.19 per share for the previously issued unsecured and non-interest bearing note payable from one subscriber and additional funds received from a second subscriber. The convertible note and accrued interest, will mature three (3)period of ten years from the date of issuancegrant. The stock options have a fair value of $2.87 and will bear interestare exercisable as follows:

On May 5, 2021, the Company granted a total of 180,000 stock options to a consultant. The stock options are exercisable at the rateexercise price of 10%$1.78 per annum compounded annually.share for a period of ten years from the date of grant. The principalstock options have a fair value of this convertible note, plus any accrued interest thereon, may$1.6520 and are exercisable as follows:

On June 15, 2021, the Company granted a total of 2,900,000 stock options to a consultant. The stock options are exercisable at the exercise price of $1.16 per share for a period of ten years from the date of grant. The stock options have a fair value of $1.0720 and are exercisable as follows:

13. STOCK-BASED COMPENSATION (CONT’D)

On September 9, 2021, the Company granted a total of 250,000 stock options to a consultant. The stock options are exercisable at the exercise price of $0.55 per share for a period of five years from the date of grant. The stock options have a fair value of $0.3180 and are exercisable as follows:

Stock-based compensation expense recognized for the periods ended March 31, 2022 and 2021 were $655,206 and $1,140,162 respectively. Stock options granted are valued at the fair value calculation based off the Black-Scholes valuation model. The weighted average assumptions used in the calculation are as follows:

SCHEDULE OF ASSUMPTION USED

SCHEDULE OF STOCK OPTION ACTIVITY

14. FINANCIAL INSTRUMENTS

Fair value is an exit price representing the amount that would be converted intoreceived to sell an asset or aid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability.

A three-tier fair value hierarchy is established as a base for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value:

Investment in related party

The derivative liabilities would be classified as a level 3 financial instrument.

SCHEDULE OF DERIVATIVE LIABILITIES

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

SCHEDULE OF DERIVATIVE LIABILITIES AT FAIR VALUE

Warrants

Please see Note 7 for additional information on the related observable inputs.

15. NON-CONTROLLING INTEREST

For sBetOne, Inc., on April 1, 2019, the Company transferred 2,000,000 of its shares to a third-party and cancelled 1,097,826 of its shares. Additionally, 2,097,826 shares of common stock ofsBetOne, Inc. were issued to third-parties, reducing the Company at a conversion price of $0.10 per share.Company’s ownership in this subsidiary to 59.02%.

On October 30, 2017,August 12, 2021, the CompanyCompany’s subsidiary sBetOne, Inc. (“sBetOne”) entered into a private placement subscription agreementbusiness combination with 35 subscribers,a related party, VON Acquisition Inc. (“VON”) whereby sBetOne became a wholly owned subsidiary of VON. The Company received 5,902,174 common shares or 6.31% of the total outstanding common shares of VON as at the date of the business combination. The transition from having a 59.02% ownership in sBetOne to having a 6.31% ownership in VON has led the Company to deconsolidate sBetOne from the Company’s financial statements and record the ownership of VON as an investment.

On June 22, 2021, the Company incorporated a new Delaware subsidiary, EnderbyWorks, LLC, in which the Company owns 51%. CurrencyWorks also has an 80% ownership of Motoclub LLC.

The following table sets forth a summary of the changes in non-controlling interest:

SUMMARY OF CHANGES IN NON-CONTROLLING INTEREST

16. SUBSEQUENT EVENTS

Effective as of May 5, 2021, we loaned $400,000 to Fogdog Energy Solutions Inc. (“Fogdog”) pursuant to which it issued an aggregateconvertible promissory note. The note bears interest at a rate of 5,600,000 shares of common stock of4% per annum and was due on May 5, 2022. The loan was not repaid nor converted by the Company as at the reporting date and is now payable on demand. The note may not be prepaid without the written consent of our company. Under certain conditions as outlined in the promissory note, the Company may convert the outstanding loan into common shares. Our chief financial officer, secretary and treasurer, Swapan Kakumanu, is a pricedirector, chief financial officer and a shareholder of $0.10 per share for aggregate gross proceeds of $560,000.Fogdog.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Forward-Looking Statements

This quarterly report contains “forward-looking statements”. Allforward-looking statements. Forward-looking statements other than statementsare projections of historical fact are “forward-looking statements” for purposes of federalevents, revenues, income, future economic performance or management’s plans and state securities laws, including, but not limited to, statements regarding: the plans, strategies and objections of managementobjectives for future operations;operations. In some cases, forward-looking statements can be identified by the future plansuse of terminology such as “may”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or business“continues” or the negative of our company; future economic conditionsthese terms or performance; and anyother comparable terminology. Examples of forward-looking statements of assumptions underlying any of the foregoing.

Forward-looking statementsmade in this quarterly report include or may include, the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate”among others, statements about:

The material assumptions supporting these forward-looking statements include, among other similar words. things:

Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

These forward-looking statements presentare only predictions and involve known and unknown risks, uncertainties and other factors, including:

any of which may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Further, although we have attempted to identify factors that could cause actual results, levels of activity, performance or achievements to differ materially from those described in forward-looking statements, there may be other factors that cause results, levels of activity, performance or achievements not to be as anticipated, estimated or intended.

While these forward-looking statements and any assumptions upon which they are based are made in good faith and reflect management’s current judgment regarding the direction of our business, actual results may vary, sometimes materially, from any estimates, andpredictions, projections, assumptions only as of the date of this report.or other future performance suggested herein. Accordingly, readers are cautionedshould not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made.statements. Except as required by applicable law, including the securities laws of the United States and Canada, we do not intend and undertake no obligation, to update any of the forward-looking statement.

Although we believe the expectations reflected in thestatements to conform these statements to actual results. All forward-looking statements in this quarterly report are reasonable, actual results could differ materially from those projected or assumed in any forward-looking statements. All forward-looking statements are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:qualified by this cautionary statement.