FLCX flooidCX Corporation (CE)

1.

Nature of Operations and Continuance of Business

flooidCX Corp. (formerly Gripevine, Inc. and Baixo Relocation Services, Inc.) (the “Company”) was incorporated in the state of Nevada on January 7, 2014. The Company is in the business of developing and building an online resolution platform.

On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic. This contagious disease outbreak and any related adverse public health developments, have adversely affected workforces, economies, and financial markets globally, leading to an economic downturn. The impact on the Company has not been significant, but management continues to monitor the situation.

These condensed consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, creditors, and related parties, and the ability of the Company to obtain necessary equity financing to continue operations, and ultimately the attainment of profitable operations. As at August 31, 2021, the Company has a working capital deficit of $4,666,957 and an accumulated deficit of $56,577,407 since inception. As at August 31, 2021, the Company is in default of certain loans payable (refer to Note 4). Furthermore, during the six months ended August 31, 2021, the Company used $172,384 in operating activities. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

2.

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:

MBE Holdings Inc.

Wholly owned subsidiary

Resolution 1, Inc.

Wholly owned subsidiary

All inter-company balances and transactions have been eliminated.

(b)

Interim Financial Statements

The accompanying condensed consolidated financial statements of the Company should be read in conjunction with the consolidated financial statements and accompanying notes filed with the U.S. Securities and Exchange Commission in the Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2021. In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments of a recurring nature considered necessary to present fairly the Company’s financial position and the results of its operations and its cash flows for the periods shown.

The preparation of these condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. The results of operations and cash flows for the periods shown are not necessarily indicative of the results to be expected for the full year.

2.

Significant Accounting Policies (continued)

(c)

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 has implemented all new accounting pronouncements that are in effect and that may impact its 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 operations.

3.

Property and Equipment

4.

Loans Payable

(a)

As at August 31, 2021, the Company owed $2,270,678 (February 28, 2021 – $2,235,893) which is non-interest bearing, unsecured, and due on demand.

(b)

As at August 31, 2021, the Company owed $472,958 (February 28, 2021 – $442,802) which is unsecured, non-interest bearing, unsecured, and due on demand.

(c)

As at August 31, 2021, the Company owed $118,890 (February 28, 2021 - $118,245) under a loan agreement dated June 17, 2020 which is unsecured, bears interest at 5% per annum, and has a 2% penalty fee for non-repayment on the due date which was July 31, 2020. The penalty fee is calculated at time of repayment and is based on the principal amount outstanding and any accrued interest thereon. As consideration for making the loan, the Company issued 5,882 shares of common stock with a fair value of $24,500 and granted 2,941 stock options with a fair value of $11,835 exercisable at $17.00 per share expiring on June 17, 2023. On October 5, 2020, the Company issued 17,648 shares of common stock with a fair value of $25,500 as payment for $3,984 interest and penalties due on this loan and extension of the maturity date of the loan to November 25, 2020, resulting in a loss on settlement of debt of $21,516.

(d)

As at August 31, 2021, the Company owed $198,150 (February 28, 2021 - $197,075) under a loan agreement dated October 5, 2020. The loan was due on November 25, 2020 and secured by 588,235 shares of common stock of the Company owned by the President of the Company. The Company issued 17,648 shares of common stock in lieu of any interest and late payment penalties.

(e)

As at August 31, 2021, the Company owed $95,102 (February 28, 2021 - $94,596) under a loan agreement dated December 1, 2020. The loan is unsecured, non-interest bearing, unsecured, and due on demand.

(f)

As at August 31, 2021, the Company owed $23,778 (February 28, 2021 - $23,649) under a loan agreement dated December 1, 2020 which is unsecured, bears interest at 5% per annum, and had a maturity date of June 1, 2021. The interest rate increases to 12% per annum on non-repayment of the principal amount outstanding and interest thereon by the due date.

(g)

As at August 31, 2021, the Company owed $47,556 (February 28, 2021 - $31,532) for a government backed loan to assist businesses during the COVID-19 pandemic. The loan is unsecured and non-interest bearing for the initial term until December 31, 2022 and thereafter at 5% interest per annum for the extended term which ends on December 31, 2025. The loan is repayable at any time without penalty and if 75% is repaid on or within the initial term, the remaining balance will be forgiven. The loan has been classified as a current liability as the Company has some uncertainty around meeting all of the eligibility requirements.

5.

Related Party Transactions

(a)

As at August 31, 2021, the Company owed $1,042,317 (February 28, 2021 – $930,020) to the President of the Company which is unsecured, non-interest bearing, and due on demand.

(b)

As at August 31, 2021, the Company owed $117,852 (February 28, 2021 - $15,200) under various loan agreements which are unsecured, bear interest at 5% per annum, and have different maturity dates respectively. The interest rate increases to 12% per annum on non-repayment of the principal amount outstanding and interest thereon by the due date. Interest is accrued until final repayment and is based on the principal amount outstanding. The loan agreements are with the spouse of the President of the Company.

(c)

As at August 31, 2021, the Company owed $28,180 (February 28, 2021 - $28,028) to the Chief Operating Officer (“COO”) of the Company. The amount owing is included in accounts payable and accrued liabilities. During the six months ended August 31, 2021, the Company incurred $20,525 (2020 – $19,414) in research and development fees to the COO of the Company.

(d)

During the six months ended August 31, 2021, the Company incurred $96,588 (2020 – $87,540) in research and development fees to the President of the Company.

(e)

During the six months ended August 31, 2021, the Company incurred $12,074 (2020 - $11,692) in administrative fees included in general and administrative to the office manager who is also the spouse of the President of the Company.

(f)

During the six months ended August 31, 2021, the Company recognized stock-based compensation of $77,345 (2020 - $333661) to the President, COO of the Company, and directors of the Company. The Company also recognized stock-based compensation of $18,561 (2020 - $74,619) in general and administrative to the spouse of the President of the Company.

6.

Common Stock