Attached files
| file | filename |
|---|---|
| EX-10.3 - LOAN AGREEMENT - flooidCX Corp. | flcx_ex103.htm |
| EX-10.2 - PROMISSORY NOTE - flooidCX Corp. | flcx_ex102.htm |
| EX-32.1 - CERTIFICATION - flooidCX Corp. | flcx_ex321.htm |
| EX-31.1 - CERTIFICATION - flooidCX Corp. | flcx_ex311.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended February 28, 2021
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
0-55965
(Commission File Number)
| flooidCX Corp. |
| (Exact name of registrant as specified in its charter) |
| Nevada |
| 35-2511643 |
| (State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification No.) |
|
|
|
|
| 1282 A Cornwall Road Oakville, Ontario Canada |
| L6J 7W5 |
| (Address of principal executive offices) |
| (Zip Code) |
Registrant’s telephone number, including area code: (855) 535-6643
Securities registered pursuant to Section 12(b) of the Act: None
| Title of each class |
| Trading symbol(s) |
| Name of each exchange on which registered |
Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001 par value
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ YES ☒ NO
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ YES ☒ NO
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 ☐ NO
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). ☒ YES ☐ NO
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.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☐ | 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. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act by the registered public accounting firm that prepared or issued its audit report.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ YES ☒ NO
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.
The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold as of August 31, 2020 was $2,088,396.
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: 1,952,689 shares of common stock are outstanding as of June 16, 2021.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the Part of the Form 10-K into which the document is incorporated: None
| 2 |
| Table of Contents |
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
Information included in this Form 10-K contains forward-looking statements. This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of flooidCX Corp. (the “Company”), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.
| 3 |
| Table of Contents |
In this report, unless the context requires otherwise, references to the “Company”, “flooidCX”, “we”, “us” and “our” are to flooidCX Corp.
CORPORATE HISTORY
flooidCX Corp. was incorporated on January 7, 2014 in the State of Nevada as Baixo Relocation Services, Inc. We changed our name to “Gripevine Inc.” in December 2016 and also changed our trading symbol to “GRPV” on February 1, 2017.
Acquisition of MBE Holdings Inc.
Effective February 28, 2017, we entered into a share exchange agreement (the “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”). In accordance with the terms and provisions of the MBE Exchange Agreement, an aggregate of 5,248,626 (pre-reverse stock split) shares of our restricted common stock were issued to the MBE Shareholders in exchange for all of the issued and outstanding shares of MBE, thus making MBE our wholly-owned subsidiary. Our Board of Directors deemed it in the best interests of the respective shareholders to enter into the MBE Exchange Agreement pursuant to which we acquired all the technology and assets and assumed all liabilities of MBE. This resulted in a change in overall business operations of the Company bringing potential value to our shareholders.
2019 Name Change
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 new CUSIP number for the Company’s common stock is 33974L 106, and the new trading symbol is FLCX. The name of the Company was changed as part of its rebranding, which better reflects its 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.
Acquisition of Resolution 1, Inc.
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 restricted shares of our common stock (the “Acquisition”). R1 has developed a comprehensive customer care and feedback management platform, which is delivered as a cloud-based, software as a service solution. R1 was founded in August 2012 by Richard Hue, the CEO and a director of our Company. The Acquisition was approved by the independent members of the board of directors of the Company.
Reverse Stock Split
On January 27, 2021, the Company’s common stock began trading on a 1-for-85 reverse stock split basis. The new CUSIP number for the Company’s common stock following the reverse stock split is 33974L205.
CURRENT BUSINESS OPERATIONS
General
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 R1 Exchange Agreement resulting in R1 being our subsidiary, we now offer a suite of customer relationship management (CRM) solutions that enhances and builds upon our initial offering, “GripeVine.”
| 4 |
| Table of Contents |
Market Opportunity
The CRM industry is based on the premise that existing customers can drive the success of a business. According to the Harvard Business Review, acquiring a new customer is anywhere from 5 to 25 times more expensive than retaining an existing one. Further, the book, Marketing Metrics, states that businesses have a 60% to 70% chance of selling to an existing customer while the probability of selling to a new prospect is only 5% to 20%. Statistics from Gartner Group support the assertion that 80% of a company’s future revenue will come from just 20% of its existing customers. The CRM market is estimated at $200 billion, which alone includes approximately 270 billion contact center conversations.
Products
Resolution1 offers a unified communications and collaboration online via its simplified CRM solutions while GripeVine offers a platform for businesses to build trust through transparency in the consumer ratings and review space. In 2002, customers overwhelmingly chose voice calling to contact businesses, as compared to direct messaging. In 2017, contact via voice calling (16.1%) has largely been replaced by direct messaging (24.7%) and social media (34.5%).
The following illustrates how these solutions work together:
__________
1 http://hbr.org/2014/10/the-value-of-keeping-the-right-customers
2 http://www.forbes.com/sites/patrickhull/2013/12/06/tools-for-entrepreneurs-to-retain-clients/#4c499ca62443 quoting P. Farris, N. Bendle, P. Pfeifer & D. Reibstein, Marketing Metrics: The Manager’s Guide to Measuring Marketing Performance.
3 http://www.forbes.com/sites/alexlawrence/2012/11/01/five-customer-retention-tips-for-entrepreneurs/?hstc=32807841.12fdf7f0d9e1a4e4127eacd91e9e7015.1420565079181.1420565079181.1420565079181.1&__hssc=32807841.1.1420565079181&__hsfp=111348769#227ab25f5e8d
4 IBM, April 2018; The US Contact Center Decision-Makers Guide 2018-2019.
5 http://websitebuilder.org.uk/blog/rise-social-media-customer-care/
| 5 |
| Table of Contents |
Significantly, GripeVine’s platform creates an incredibly strong search engine optimization (SEO) presence. Once there are multiple posts about a business (usually 5 or more) from consumers who want to connect to companies, the GripeVine platform automatically creates a strong SEO with the key words, “[company] headquarters,” which consumers usually use to search for a company when they have a customer care or feedback issue. This then triggers GripeVine’s proprietary auto-notification platform that advises the businesses that (1) their customers are waiting to hear back from them on GripeVine with regards to customer care and feedback issues and (2) they can claim their page and directly connect with the customer “pay-wall” free.
GripeVine. GripeVine is a consumer-to-business platform that helps build a customer feedback-minded community, focused on transparency, mutual respect and open communications among like-minded customers and businesses – all working together – to facilitate positive outcomes. It allows for private messaging between customers and businesses for positive resolutions, so that businesses are not forced to communicate via the comments section. While functioning as a social customer experience platform for social customer service and consumer reviews, GripeVine differentiates itself in the following ways:
|
| · | Pay-Wall Free – Rather than taking businesses hostage like other rating and review sites, GripeVine connects business directly with their customers without the worries of having to pay for such access. |
|
|
|
|
|
| · | Transparent – With a focus on sincerity, respect and open communications to build trust through transparency, GripeVine is the “go to” consumer-to-business platform, for many Fortune 1000 brands. |
Resolution1. Resolution1 (“R1”) functions as a cloud-based customer experience workflow management solution, where businesses can manage the entire logistics of customer care, feedback or inquiries throughout their entire organizations seamlessly. Businesses can respond quickly and accurately to customers, while keeping track of every customer interaction. The R1 solution offers customization features right out-of-the box and 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 cloud-based customer experience management system without incurring significant customization costs.
The Resolution1 platform offers the following features and advantages:
|
| · | Leads from GripeVine – As GripeVine’s back-end customer care solution, Resolution1 has the capability to receive sales leads from GripeVine. |
|
|
|
|
|
| · | AI-powered sentiment analysis and process automation – Resolution1 uses artificial intelligence and natural language processing to automate standard repeatable tasks, enable more impactful use of data, and create tools that boost agent productivity and decision making. |
|
|
|
|
|
| · | Auto-Ticketing and Auto-Routing – Once a customer makes contact a ticket is automatically assigned to a case that is auto-routed to the pre-determined team member or department. Every ticket is tracked and monitored until it’s completed. |
|
|
|
|
|
| · | Reporting and analytics – Resolution1 offers robust analytics and the ability to build custom reports. This reporting also uses sentiment analysis on a business’s social sites, so that a business can quickly view how it is perceived on all social platforms. |
|
|
|
|
|
| · | Case management – Resolution1 can ticket and track all incoming feedback, conversations and/or inquiries so that businesses can immediately see all commentary or social posts and track the case management and resolution process. This enables businesses to prioritize, categorize and assign cases to the right department and agent. |
|
|
|
|
|
| · | Omni-channel support – This feature allows a business to enter feedback manually, as well as staying on top of conversations about the business in its social channels. A business can aggregate customer feedback and respond to social commentary through its multiple social channels, in addition to creating cases and messages directly from its social feeds into Resolution1’s case manager. |
| 6 |
| Table of Contents |
|
| · | Build watchlist – The watchlist allows a user/agent to pin posts of interest from social sites for later review or to aggregate them for lead generation and/or other marketing opportunities. Users/agents can tag notes and share watchlist posts internally with other departments and team members, create custom notes and generate cases as required. |
|
|
|
|
|
| · | Team collaboration – Resolution1 allows for collaboration across an organization’s teams and/or departments. People from beyond the immediate support team can be brought in to help resolve or join in the customer conversation all under a single application. |
|
|
|
|
|
| · | Auto Review Generator – This feature allows businesses to solicit ratings and reviews from their customers, without them having to first register to do so. |
Pricing. Once companies claim their free Resolution1 platform, access is granted to their proprietary dashboard where they can communicate publicly or privately with consumers, keep accurate track of reviews, see their current ratings, launch resolution offers, and manage their overall online customer service channels across other social platforms.
We will also offer paid company accounts, which will allow companies to access a more robust social customer service management system utilizing unique and proprietary features allowing them to scale the use of the system to suit their organizational needs. The paid accounts will also allow the respective company to have more control over its presence on the site and be provided access to tools for gaining market share within their industries thus expanding the channels through which they will receive and manage customer service feedback. Management intends that paid accounts will offer companies access to the customer commentary and sentiment on social media. Whether a company is large or small, there is tremendous value in being able to monitor social customer service conversations about its brand across multi-platforms under one dashboard.
Currently, Resolution1’s basic free subscription option is much more robust than other comparable paid solutions. Resolution1 offers bronze, silver and gold plans, which are currently priced at $29.99, $49.99 and $89.99 per month, respectively, which offer features comparable to much more expensive competitor packages.
| 7 |
| Table of Contents |
Marketing Strategies
We are utilizing the freemium model approach - offering a robust “free” plan (a “freemium”) that allows small businesses to use the basic features of GripeVine and Resolution1. Management believes that this will allow the Company to rapidly gain market share, create brand awareness and increase conversion of the users to its tiered paid plans.
Our marketing strategy includes the following:
|
| · | Channel Partners – We plan to create joint ventures with non-traditional channels to showcase and offer our free version of our products. |
|
|
|
|
|
| · | Application Programming Interfaces (APIs) – Our innovative “drag and drop” APIs that easily integrates with popular applications such as WordPress (over 4 million websites) and WIX (over 150 million users) will allow us to broaden our reach and attract a strong user base quickly. |
|
|
|
|
|
| · | Affiliate Marketing - Once business users are on board, we plan to launch our Affiliate Marketing platform to direct-sell to SMEs. Management believes that this sales strategy, coupled with our freemium model approach, can be a very effective low cost strategy, eliminating the need to create an expensive sales infrastructure. |
|
|
|
|
|
| · | Value Added Resellers (VARs) – Through our partner program, we plan to offer trusted partners the ability to attract new customers and provide additional value to existing ones. By introducing the flooidCX suite of products to existing and prospective clients, our VARs will allow us to gain additional exposure to both SMEs and enterprise clients. |
EMPLOYEES
We have two full-time employees, and we engage approximately 10 individuals as independent contractors. The Company also has its President/Chief Executive Officer, Richard Hue, and its Chief Technology Officer, Mark Vange. These individuals are primarily responsible for all of the Corporation’s day-to-day operations. Other services may be provided by outsourcing and consultant and special purpose contracts.
RESEARCH AND DEVELOPMENT ACTIVITIES
We have incurred $1,002,639 and $1,873,152 during the fiscal years ended February 28, 2021 and February 29, 2020, respectively, on research and development for the Company. None of these research or development costs were borne by the customer.
INTELLECTUAL PROPERTY
Patent
On February 15, 2019, patent applications were filed in the United States and Canada for “Complaint Resolution System” – US 16/325,828 and CA 3034118. The applications, which are pending, claimed the benefit of U.S. Provisional Application No. 62/375,027, filed on August 15, 2016, and U.S. Provisional Application No. 62/475,447, filed on March 23, 2017, for the “System and Method for Determining Metrics,” as well as International application PCT/CA2017/050965 filed on August 17, 2017.
Trademarks
We have trademarked certain of our logos and names. On October 16, 2012, the United States Patent and Trademark Office issued a trademark for “Gripevine”, Registration No. 4,227,471, for classes 35 and 42, which primarily is for business data analysis and electronic data collection and use of online non-downloadable proprietary software for business purposes for third parties featuring the use of such proprietary software to collect, evaluate and analyze consumer complaints and assist third parties in the resolution of such complaints.
We rely on federal, state, common law and international rights, as well as contractual restrictions, to protect our intellectual property. We control access to our proprietary technology and algorithms by entering into confidentiality and agreements with our employees and contractors and confidentiality agreements with third parties.
| 8 |
| Table of Contents |
In addition to these contractual arrangements, we also rely on a combination of patent pending applications, trade secrets, copyrights, trademarks, service marks and domain names to protect our intellectual property. We will pursue the registration of our patents, copyrights, trademarks, service marks and domain names in North America and in certain locations outside the United States. We believe that our registration efforts will focus on gaining protection of our trademark “Gripevine” name and logos among others. These marks are material to our business as they enable others to easily identify us as the source of the services offered under these marks and are essential to our brand identity.
Circumstances outside our control could pose a threat to our intellectual property rights. For example, effective intellectual property protection may not be available in the North America or other countries in which we operate. Also, the efforts we have taken to protect our proprietary rights may not be sufficient or effective. Any significant impairment of our intellectual property rights could harm our business or our ability to compete. Also, protecting our intellectual property rights is costly and time-consuming. Any unauthorized disclosure or use of our intellectual property could make it more expensive to do business and harm our operating results.
Companies in the Internet, media and other industries may own large numbers of patents, copyrights and trademarks and may frequently request license agreements, threaten litigation or file suit against us based on allegations of infringement or other violations of intellectual property rights. We are currently subject to, and expect to face in the future, allegations that we have infringed the trademarks, copyrights, patents and other intellectual property rights of third parties, including our competitors and non-practicing entities. As we face increasing competition and as our business grows, we may likely face claims of infringement.
COMPETITION
There are a number of established and emerging competitors in the broad market of customer engagement software. This market is fragmented, rapidly evolving, and highly competitive, with relatively low barriers to entry in some segments. We consider the principal competitive differentiators in our market to include:
|
| · | Ease-of-deployment and use; |
|
| · | Time to value realization; |
|
| · | Enablement of customer communications across channels; |
|
| · | Availability of self-service options; |
|
| · | Data analytics and performance recommendations; |
|
| · | Mobile and multi-device capabilities; |
|
| · | Proactive outreach tools; |
|
| · | Customization and integration with third-party applications; |
|
| · | Brand recognition and thought leadership; and |
|
| · | Total cost of ownership for the customer (including software updates, ongoing maintenance, and consulting and system integration fees). |
Given the large number, disparate sizes, and varying areas of focus of other companies with which we compete in the provision of customer engagement software, we may not always compare favorably with respect to some or all of the foregoing factors. Most, if not all, of our competitors have greater financial and personnel resources than our Company, as well as greater name recognition, longer operating histories, and larger marketing budgets. Our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards, or customer requirements. With the introduction of new technologies, the evolution of our products, and new market entrants, we expect competition to intensify in the future. Pricing pressures and increased competition generally could result in reduced sales, reduced margins, losses, or the failure of our suite of products to achieve significant market acceptance, any of which could harm our business. In order to improve our competitive position in the market, we must remain focused in our development, operations, and sales and marketing efforts on the evolving customer service needs of all organizations.
| 9 |
| Table of Contents |
You should carefully consider the risks, uncertainties and other factors described below because they could materially and adversely affect our business, financial condition, operating results and prospects and could negatively affect the market price of our common stock. Also, you should be aware that the risks and uncertainties described below are not the only ones facing us. Additional risks and uncertainties that we do not yet know of, or that we currently believe are immaterial, may also impair our business operations and financial results. Our business, financial condition or results of operations could be harmed by any of these risks. The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment.
In assessing these risks, you should also refer to the other information contained in or incorporated by reference to this Annual Report on Form 10-K, including our financial statements and the related notes.
RISKS RELATED TO OUR BUSINESS AND INDUSTRY
If we fail to manage our growth effectively, our brand, results of operations and business could be harmed.
We anticipate experiencing rapid growth in our operations, which places substantial demands on management and our operational infrastructure. Most of our contractors have been with us for fewer than three years and to manage the expected growth of our operations, we will need to continue to increase the productivity of our current contractors and may hire, train and manage employees. In particular, we intend to continue to make substantial investments in our developer, engineering, technical support, sales and marketing and social community management organizations. As a result, we must effectively integrate, develop and motivate a large number of new contractors, including contractors in international markets and from any acquired businesses, while maintaining the beneficial aspects of our company culture.
As our business matures, we may make periodic changes and adjustments to our organization in response to various internal and external considerations, including market opportunities, the competitive landscape, new and enhanced products, acquisitions, sales performance, increases in headcount and cost levels. In some instances, these changes have resulted in a temporary lack of focus and reduced productivity, which may occur again in connection with any future changes to our organization and may negatively affect our results of operations. Similarly, any significant changes to the way we structure compensation of our sales organization may be disruptive and may affect our ability to generate revenue.
To manage our growth, we may need to improve our operational, financial and management systems and processes, which may require significant capital expenditures and allocation of valuable management and employee resources, as well as subject us to the risk of over-expanding our operating infrastructure. However, if we fail to scale our operations successfully and increase productivity, the quality of our platform and efficiency of our operations could suffer, which could harm our brand, results of operations and business.
If the demand for information regarding local businesses does not develop as we expect, or if we fail to address the needs of this demand, our business will be harmed. We may not be able to address successfully these risks and difficulties or others, including those described elsewhere in these risk factors. Failure to address these risks and difficulties adequately could harm our business and cause our operating results to suffer.
We may incur significant operating losses and may not be able to generate sufficient revenue to gain profitability. A failure to maintain an adequate growth rate will adversely affect our business and results of operations.
We have incurred significant operating losses since inception and, as of February 28, 2021, had an accumulated deficit of $56,165,383, a substantial amount of which was incurred due to the value of preferred stock recorded for stock compensation expense. We have generated only limited revenues. Additionally, our costs may continue to exceed revenues each year as we continue to expend substantial financial resources on: (i) sales and marketing; (ii) our technology infrastructure; (iii) product and feature development; (iv) domestic and international expansion efforts; (iv) strategic opportunities, including commercial relationships and acquisitions; and (v) general administration, including legal and accounting expenses related to being a public company.
| 10 |
| Table of Contents |
Proposed investments may not result in increased revenue or growth in our business. Our costs may also increase as we hire additional employees, particularly as a result of the significant competition that we face to attract and retain technical talent. Our expenses may grow faster than our revenue and may be greater than we anticipate in a particular period or over time. If we are unable to maintain adequate revenue growth and to manage our expenses, we may continue to incur significant losses in the future and may not be able to regain profitability.
We have a limited operating history in an evolving industry, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful.
We have a limited operating history in an evolving industry. As a result, our historical operating results may not be indicative of our future operating results, making it difficult to assess our future prospects. You should consider our business and prospects in light of the risks and difficulties we may encounter in this rapidly evolving industry, which we may not be able to address successfully. These risks and difficulties include our ability to, among other things: (i) increase the number of users of our CRM solutions; (ii) attract and retain new business clients, many of which may have limited or no online CRM experience; (iii) forecast revenue, which may be more difficult as we engage more company paid accounts, as well as appropriately estimate and plan our expenses; (iv) continue to earn and preserve a reputation for providing effective CRM solutions; (v) successfully compete with other companies that are currently in, or may in the future enter, the CRM industry; (vi) successfully manage our growth, including in international markets; (vii) successfully develop and deploy new features and products; (viii) manage and integrate successfully any acquisitions of businesses, solutions or technologies; (ix) avoid interruptions or disruptions in our service or slower than expected load times (x) develop a scalable, high-performance technology infrastructure that can efficiently and reliably handle increased usage globally, as well as the deployment of new features and products; (xi) hire, integrate and retain talented sales and other personnel; (xii) effectively manage rapid growth in our sales force, other personnel and operations; and (xiii) effectively identify, engage and manage third-party partners and service providers.
We expect a number of factors to cause our operating results to fluctuate on a quarterly and annual basis, which may make it difficult to predict our future performance.
Our operating results could vary significantly from period to period as a result of a variety of factors, many of which may be outside of our control. This volatility increases the difficulty in predicting our future performance and means comparing our operating results on a period-to-period basis may not be meaningful. In addition to the other risk factors discussed in this section, factors that may contribute to the volatility of our operating results include: (i) changes in our pricing policies and terms of contracts, whether initiated by us or as a result of competition; (ii) cyclicality; (iii) the effects of changes in search engine placement and prominence; (iv) the adoption of any laws or regulations that adversely affect the growth, popularity or use of the Internet, such as laws impacting Internet neutrality; (v) the success of our sales and marketing efforts; (vi) costs associated with defending intellectual property infringement and other claims and related judgments or settlements; (vii) interruptions in service and any related impact on our reputation; (viii) the impact of fluctuations in currency exchange rates; (ix) changes in consumer behavior; (ix) changes in our tax rates or exposure to additional tax liabilities; (x) the impact of worldwide economic conditions; and; (xi) the effects of natural or man-made catastrophic events.
We will likely require additional capital to support business growth, and such capital might not be available on acceptable terms, if at all.
We intend to continue to invest in our business and will likely require or otherwise seek additional funds to respond to business challenges, including the need to develop new features and products, enhance our existing services, improve our operating infrastructure and acquire complementary businesses and technologies. As a result, we may need to engage in equity or debt financings to secure additional funds. If we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of our common stock. Any future debt financing we secure could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and respond to business challenges could be significantly impaired, and our business may be harmed.
| 11 |
| Table of Contents |
If our marketing strategies prove to be ineffective, we will be unable to increase our customer base and achieve significant market acceptance of our products.
Increasing our customer base and achieving significant market acceptance of our products will depend on the effectiveness of our marketing strategies. We have developed these strategies to leverage our limited financial resources. If these strategies prove to be ineffective and we are unable to expand our customer base and generate revenues, our business will be harmed. Specifically, we will be utilizing the freemium model and offering a free basic version of our Resolution1 solution. Many early users never convert from the free version of a product to a paid version with enhanced features. Further, we may be dependent upon individuals within an organization who initiate the trial or free usage of our products being able to convince decision makers within their organization to convert to a paid version. To the extent to these users do not become, or are unable to convince others to become, paying customers, we will not realize the intended benefits of this marketing strategy and our ability to grow our revenue will be adversely affected.
If we are unable to increase traffic to our website, or user engagement on our platform declines, our revenue, business and operating results may be harmed.
We will derive substantially all of our revenue from the paid company accounts of businesses, offering business access to a robust social customer service management system. Because traffic to our platform will have an influence on its popularity and the number of businesses we are able to show, we believe this will affect the value of our services provided to businesses and influence the content creation that drives further traffic. Slower traffic growth rates may harm our business and financial results. As a result, our ability to grow our business depends on our ability to increase traffic to and user engagement on our platform. Our traffic could be adversely affected by factors including:
|
| · | Reliance on Internet Search Engines. We rely on Internet search engines to drive traffic to our platform. However, the display, including rankings, of unpaid search results can be affected by a number of factors, many of which are not in our direct control, and may change frequently. For example, a search engine may change its ranking algorithms, methodologies or design layouts. As a result, links to our platform may not be prominent enough to drive traffic to our platform, and we may not be in a position to influence the results. Although internet search engine results have allowed us to attract a significant audience with low organic traffic acquisition costs to date, if they fail to drive sufficient traffic to our platform in the future, we may need to increase our marketing expenses, which could harm our operating results. |
|
|
|
|
|
| · | Increasing Competition. The market for online consumer review and social customer service space is intensely competitive and rapidly changing. If the popularity, usefulness, ease of use, performance and reliability of our services do not compare favorably to those of our competitors, traffic may decline. |
|
|
|
|
|
| · | Our Automated Artificial Intelligence (AI) Suggestion Engine. If our automated AI engine does not suggest helpful content or recommends unhelpful content, consumers may reduce or stop their use of our online consumer review platform. While we have designed our technology to avoid suggesting content that we believe to be unreliable or otherwise unhelpful, we cannot guarantee that our efforts will be successful. |
|
|
|
|
|
| · | Content Scraping. Other companies may attempt to copy information from our platform without our permission, through website scraping, robots or other means, and publish or aggregate it with other information for their own benefit. This may make them more competitive and may decrease the likelihood that consumers will visit our platform to find the local businesses and information they seek. Though we will strive to detect and prevent this third-party conduct, we may not be able to detect it in a timely manner and, even if we could, may not be able to prevent it. In some cases, particularly in the case of third parties operating outside of the United States, our available remedies may be inadequate to protect us against such conduct. |
|
|
|
|
|
| · | Macroeconomic Conditions. Consumer purchases of discretionary items generally decline during recessions and other periods in which disposable income is adversely affected. As a result, adverse economic conditions may impact consumer spending, particularly with respect to local businesses, which in turn could adversely impact the number of consumers visiting our online consumer review platform. |
|
|
|
|
|
| · | Internet Access. The adoption of any laws or regulations that adversely affect the growth, popularity or use of the internet, including laws impacting Internet Neutrality, could decrease the demand for our services. Similarly, any actions by companies that provide Internet access that degrade, disrupt or increase the cost of user access to our platform could undermine our operations and result in the loss of traffic. |
| 12 |
| Table of Contents |
We also anticipate that our traffic growth rate may slow over time, and potentially decrease in certain periods, as our business matures and we achieve higher penetration rates. In particular, the number of major geographic markets, especially within North America, that we have not yet entered completely and may decline and further expansion in smaller markets may not yield similar results or sustain our growth. That our traffic growth may slow even as we expand our operations. As our traffic growth rate slows, our success may become increasingly dependent on our ability to increase levels of user engagement on our platform. This dependence may increase as the portion of our revenue derived from company accounts increases. A number of factors may negatively affect our user engagement, including if: (i) users engage with other services or activities as an alternative to our platform; (ii) there is a decrease in the perceived quality of the content contributed by our users; (iii) we fail to introduce new and improved features or we introduce new features that do not effectively address consumer concerns or needs or otherwise alienate consumers; (iv) technical or other problems negatively impact the availability and reliability of our platform or otherwise affect the user experience; (v) users have difficulty installing, updating or otherwise accessing our platform as a result of actions by us or third parties; (vi) users believe that their experience is diminished as a result of the decisions we make with respect to the frequency, relevance and prominence of the business and content we display; and (vii) we do not maintain our brand image or our reputation is damaged.
If we fail to maintain and expand our base of company accounts, our revenue and our business will be harmed.
Our ability to grow our business depends on our ability to maintain and expand our base of company accounts. To do so, we must convince prospective companies that our services offer a material benefit and can generate a competitive return relative to other alternatives. Our ability to do so depends on certain factors.
|
| · | Traffic Quality. The success of our online consumer review and social customer service program depends on delivering positive results to our clients. Low-quality or invalid traffic, such as robots, spiders and the mechanical automation of clicking, may be detrimental to our relationships with advertisers and could adversely affect our advertising pricing and revenue. If we fail to detect and prevent click fraud, the affected companies may experience or perceive a reduced return on their investment, which could lead to dissatisfaction with our service, refusals to pay, refund demands or withdrawal of future business. |
|
|
|
|
|
| · | Perception of Our Platform. Our ability to compete effectively for a company’s budget depends on our reputation and perceptions regarding our consumer review platform. For example, we may face challenges expanding our company base in certain businesses and shopping categories if businesses believe that consumers perceive the utility of our platform to be limited to finding businesses in these categories. The ratings and reviews that businesses receive from our users may also affect their advertising decisions. Favorable ratings and reviews, on the one hand, could be perceived as obviating the need to advertise. Unfavorable ratings and reviews, on the other, could discourage businesses from advertising to an audience that they perceive as hostile or cause them to form a negative opinion of our products and user base. |
|
|
|
|
|
| · | Macroeconomic Conditions. Adverse macroeconomic conditions can have a negative impact on the demand for consumer review particularly with respect to online review sites. We may rely heavily on small and medium-sized businesses, which often have limited budgets and may be disproportionately affected by economic downturns. In addition, such business may view online consumer review forums as a low priority. |
As is typical in our industry, businesses generally do not have long-term obligations to purchase our services. Their decisions to renew depend on the degree of satisfaction with our services as well as a number of factors that are outside of our control, including their ability to continue their operations and spending levels. Small and medium-sized local businesses in particular have historically experienced high failure rates. As a result, we may experience attrition in our advertisers in the ordinary course of business resulting from several factors, including losses to competitors, declining budgets, closures and bankruptcies. To grow our business, we must continually add new company accounts to replace company accounts who choose not to renew their listing or who go out of business or otherwise fail to fulfill any contracts with us, which we may not be able to do.
| 13 |
| Table of Contents |
If we fail to further develop our markets effectively, including international markets where we may have limited operating experience and may be subject to increased risks, our revenue and business will be harmed.
We intend to further develop our operations both domestically and abroad. Our current and future plans will require significant resources and management attention, and the returns on such investments may not be achieved for several years, or at all. Our communities in many of the largest markets in North America are in a relatively late stage of development, and further development of smaller markets may not yield similar results. As a result, our continued growth depends on our ability to successfully develop potential international communities and operations. We have no operating history in international markets, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful. If we are not able to develop our international markets as we expect, or if we fail to address the needs of those markets, our business will be negatively impacted.
Expanding our international operations may also subject us to risks that we have not faced before or that increase our exposure to risks that we currently face, including risks associated with: (i) operating a rapidly growing business in an environment of multiple languages, cultures, customs, legal systems, regulatory systems and commercial infrastructures; (ii) recruiting and retaining qualified, multi-lingual employees, including sales personnel; (iii) increased competition from local websites and guides, and potential preferences by local populations for local providers; (iv) potentially lower levels of demand and user engagement; (v) our ability to achieve prominent display of our content in unpaid search results, which may be more difficult in newer markets where we may have less content and more competitors than in more established markets; (vi) providing solutions in different languages for different cultures, which may require that we modify our solutions and features to ensure that they are culturally relevant in different countries; (vii) compliance with applicable foreign laws and regulations, including different privacy, censorship and liability standards; (viii) the enforceability of our intellectual property rights; (ix) credit risk and higher levels of payment fraud; (x) currency exchange rate fluctuations; (xi) compliance with anti-bribery laws, including but not limited to the Foreign Corrupt Practices Act and the U.K. Bribery Act; (xii) foreign exchange controls that might prevent us from repatriating cash earned outside the United States; (xiii) political and economic instability in some countries; (xiv) double taxation of our international earnings and potential adverse tax consequences due to changes in the tax laws of the United States or foreign jurisdictions in which we operate; and (xv) higher costs of doing business internationally.
We may rely on third-party service providers and strategic partners for many aspects of our business, and any failure to maintain these relationships could harm our business.
We may rely on relationships with various third parties to grow our business, including strategic partners and technology and content providers. For example, we may rely on third parties for data about local businesses, mapping functionality, payment processing and administrative software solutions. Identifying, negotiating and maintaining relationships with third parties require significant time and resources, as does integrating their data, services and technologies onto our platform. It is possible that these third parties may not be able to devote the resources we expect to the relationships. We may also have competing interests and obligations with respect to our partners in particular, which may make it difficult to maintain, grow or maximize the benefit for each partnership.
If our relationships with our partners and providers deteriorate, we could suffer increased costs and delays in our ability to provide consumers with content or similar services. We may have disagreements or disputes with our partners about our respective contractual obligations, which could result in legal proceedings or negatively affect our brand and reputation. In addition, we will exercise limited control over our third-party partners and vendors, which makes us vulnerable to any errors, interruptions or delays in their operations. If these third parties experience any service disruptions, financial distress or other business disruption, or difficulties meeting our requirements or standards, it could make it difficult for us to operate some aspects of our business. Any disruption or problems with a supplier or its services could have an adverse effect on our reputation, results of operations and financial results. Similarly, upon expiration or termination of any of our agreements with third-party providers, we may not be able to replace the services provided to us in a timely manner or on terms that are favorable to us, if at all, and a transition from one partner or provider to another could subject us to operational delays and inefficiencies.
| 14 |
| Table of Contents |
Our business depends on strong branding, and any failure to maintain, protect and/or enhance our brand would hurt our ability to retain and expand our base of users and advertisers, as well as our ability to increase the frequency with which they use our platform.
We are in the early process of developing a strong brand that we believe will contribute significantly to the success of our business. Maintaining, protecting and enhancing the “flooidCX,” “Resolution1” and “Gripevine” brands are critical to expanding our base of users and increasing the frequency with which they will use our solutions. Our ability to do so will depend largely on our ability to maintain consumer trust in our platform and in the quality and integrity of the user content and other information found on our site, which we may not do successfully, and which may also affect our ability to create advertising revenues. We plan on dedicating significant resources to these goals, primarily through our artificial intelligence (AI) suggestion software, sting operations targeting the buying and selling of reviews, our consumer alerts program, coordination with consumer protection agencies and law enforcement, and, in certain egregious cases, taking legal action against business we believe to be engaged in deceptive practices. We also endeavor to remove content from our platform that violates our terms of service.
Despite these efforts, we cannot guarantee that each of the proposed numerous reviews on our platform have been recommended and are useful or reliable or that consumers will trust the integrity of our content. For example, if our AI suggestion software does not recommend helpful content or recommends unhelpful content, consumers and businesses alike may stop or reduce their use of our platform and products. Some consumers and businesses may express concern that our technology either recommends too many reviews, thereby recommending some reviews that may not be legitimate, or too few reviews, thereby not recommending some reviews that may be legitimate. If consumers do not believe our recommended reviews to be useful and reliable, they may seek other services to obtain the information for which they are looking and may not return to our platform as often in the future, or at all. This would negatively impact our ability to retain and attract users and advertisers and the frequency with which they use our platform.
Consumers may also believe that the reviews, photos and other user content contributed by our company clients or other employees are influenced by any contractual relationships or are otherwise biased. Although we will take steps to prevent this from occurring, we may not be successful in our efforts to maintain consumer trust. Similarly, the actions of any future partners may affect our brand if users do not have a positive experience on the flooidCX and Gripevine Platforms. If others misuse our brand or pass themselves off as being endorsed or affiliated with us, it could harm our reputation and our business could suffer. Our website and mobile app also serve as a platform for expression by our users, and third parties or the public at large may also attribute the political or other sentiments expressed by users on our platform to us, which could harm our reputation.
Maintaining and enhancing our brand may also require us to make substantial investments, and these investments may not be successful. For example, our trademarks are an important element of our brand. We may face in the future oppositions from third parties to our applications to register key trademarks in foreign jurisdictions in which we expect to expand our presence. If we are unsuccessful in defending against these oppositions, our trademark applications may be denied. Whether or not our trademark applications are denied, third parties may claim that our trademarks infringe their rights. As a result, we could be forced to pay significant settlement costs or cease the use of these trademarks and associated elements of our brand in certain jurisdictions. Doing so could harm our brand recognition and adversely affect our business. If we fail to maintain and enhance our brand successfully, or if we incur excessive expenses in this effort, our business and financial results may be adversely affected.
The customer experience is our highest priority. Our dedication to making decisions based primarily on the best interests of customers may cause us to forgo short-term gains and advertising revenue.
We base many of our decisions on the best interests of the businesses and consumers who use or may use our platform. We may in the future forgo, certain expansion or revenue opportunities that we do not believe are in the best interests of these users, even if such decisions negatively impact our results of operations in the short term. Our approach of putting our customers first may negatively impact our relationship with others, such as prospective advertisers. For example, unless we believe that a review violates our terms of service, such as reviews that contain hate speech or bigotry, we will allow the review to remain on our platform, even if the business disputes its accuracy. However, consumers must respond to any business that is proactive in engaging in order to come to an amicable resolution with any negative review the consumer has posted and if there is no response by the consumer then the business has an option to “flag as fake” any review it deems as inaccurate or fake. This initiative is only activated if the consumer refuses to connect with the company in order to try and resolve a negative review. Even with our flag as fake option, certain advertisers may still perceive us as an impediment to their success as a result of negative reviews and ratings. This practice could result in a loss of advertisers, which in turn could harm our results of operations. However, we believe that this approach has been essential to our success in attracting users and increasing the frequency with which they use our platform. As a result, we believe this balanced approach will served the long-term interests of our company and our stakeholders and will continue to do so in the future.
| 15 |
| Table of Contents |
We rely on the performance of highly skilled personnel, and if we are unable to attract, retain and motivate well-qualified team members, our business could be harmed.
We believe our success will depend on the efforts and talents of our team members, including our senior management team, software engineers, marketing professionals and advertising sales team. At present, all our officers and team members are at-will contractors, which means they may terminate their business relationship with us at any time, and their knowledge of our business and industry could be extremely difficult to replace. Any changes in our senior management team in particular may be disruptive to our business. If our senior management team, including any new hires that we may make, fails to work together effectively or execute our plans and strategies on a timely basis, our business could be harmed.
Our future also depends on our continuing ability to attract, develop, motivate and retain highly qualified and skilled team members. Identifying, recruiting, training and integrating new hires will require significant time, expense and attention, and qualified individuals are in high demand; as a result, we may incur significant costs to attract them before we can validate their productivity. Volatility in the price of our common stock may make it more difficult or costly in the future to use equity compensation to motivate, incentivize and retain our team members or future employees. If we fail to manage our hiring needs effectively, our efficiency and ability to meet our forecasts, as well as team member morale, productivity and retention, could suffer, and our business and operating results could be adversely affected.
If our goodwill or intangible assets become impaired, we may be required to record a significant charge to earnings.
Under accounting principles generally accepted in the United States, or GAAP, we will review our intangible assets for impairment when events or changes in circumstances indicate the carrying value of our goodwill and other intangible assets may not be recoverable. Goodwill is required to be tested for impairment at least annually. Factors that may be considered include declines in our stock price, market capitalization and future cash flow projections. If future acquisitions do not yield expected returns, our stock price declines or any other adverse change in market conditions occurs, a change to the estimation of fair value could result. Any such change could result in an impairment charge to our goodwill and intangible assets, particularly if such change impacts any of our critical assumptions or estimates, and may have a negative impact on our financial position and operating results.
Changes in tax laws or tax rulings, or the examination of our tax positions, could materially affect our financial position and results of operations.
Tax laws are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied. Our existing corporate structure and wholly-owned subsidiary have been implemented in a manner we believe is in compliance with current prevailing tax laws. However, the tax benefits that we intend to eventually derive could be undermined due to changing tax laws. In particular, the current U.S. administration and key members of Congress have made public statements indicating that tax reform is a priority, resulting in uncertainty not only with respect to the future corporate tax rate, but also the U.S. tax consequences of income derived from income related to intellectual property earned overseas in low tax jurisdictions. Certain changes to U.S. tax laws, including limitations on the ability to defer U.S. taxation on earnings outside of the United States until those earnings are repatriated to the United States, as well as changes to U.S. tax laws that may be enacted in the future, could affect the tax treatment of our foreign earnings. In addition, many countries in the European Union, as well as a number of other countries and organizations such as the Organization for Economic Cooperation and Development, are actively considering changes to existing tax laws that, if enacted, could increase our tax obligations in many countries where we do business. Due to the expanding scale of our international business activities, any changes in the taxation of such activities may increase our worldwide effective tax rate and harm our financial position and results of operations.
In addition, the taxing authorities in the United States and other jurisdictions where we do business regularly examine our income and other tax returns. The ultimate outcome of these examinations cannot be predicted with certainty. Should the IRS or other taxing authorities assess additional taxes as a result of examinations, we may be required to record charges to our operations, which could harm our business, operating results and financial condition.
| 16 |
| Table of Contents |
RISKS RELATED TO OUR TECHNOLOGY
Our business is dependent on the uninterrupted and proper operation of our technology and network infrastructure. Any significant disruption in our service could damage our reputation, result in a potential loss of users and engagement and adversely affect our results of operations.
It is important to our success that users in all geographies be able to access our platform at all times. We may experience in the future service disruptions, outages and other performance problems. Such performance problems may be due to a variety of factors, including infrastructure changes, human or software errors and capacity constraints due to an overwhelming number of users accessing our platform simultaneously. Our platform and services are highly technical and complex, and may contain errors or vulnerabilities that could result in unanticipated downtime for our platform and harm to our reputation and business. Users may also use our products in unanticipated ways that may cause a disruption in service for other users attempting to access our platform. We may encounter such difficulties more frequently as we acquire companies and incorporate their technologies into our service. It may also become increasingly difficult to maintain and improve the availability of our platform, especially during peak usage times, as our products become more complex and our user traffic increases.
In some instances, we may not be able to identify the cause or causes of these performance problems within an acceptable period of time. If our platform is unavailable when users attempt to access it, or it does not load as quickly as they expect, users may seek other services to obtain the information for which they are looking and may not return to our platform as often in the future, or at all. This would negatively impact our ability to attract users and advertisers and increase the frequency with which they use our platform. We expect to continue to make significant investments to maintain and improve the availability of our platform and to enable rapid releases of new features and products. To the extent that we do not effectively address capacity constraints, upgrade our systems as needed and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, our business and operating results may be harmed.
Although the majority of our infrastructures and platform are cloud based hosted, our systems are still vulnerable to damage or interruption from catastrophic occurrences such as earthquakes, fires, floods, power losses, telecommunications failures, cyber or terrorist attacks and similar events. Acts of terrorism, which may be targeted at metropolitan areas that have higher population densities than rural areas where our infrastructures are hosted, could cause disruptions within our infrastructures or our advertisers’ businesses or the economy as a whole. We may not have sufficient protection or recovery plans in certain circumstances, such as natural disasters affecting the New York City, New York and/or Oakville, Ontario area, and our business interruption insurance may be insufficient to compensate us for losses that may occur. Our disaster recovery program both internal and cloud based will contemplate transitioning our platform and data to a backup center in the event of a catastrophe. Although this program is not yet functional, if our primary data center shuts down, there will be a period of time that our services will remain shut down while the transition to the back-up data center takes place. During this time, our platform may be unavailable in whole or in part to our users.
If our security measures are compromised, or if our platform is subject to cyber security attacks that degrade or deny the ability of users to access our content, users may curtail or stop use of our platform.
Our platform involves the storage and transmission of user and business information, some of which may be private, and security breaches could expose us to a risk of loss of this information, which could result in potential liability and litigation. Security breaches such as cyber-attacks, computer viruses, break-ins, malware, phishing attacks, attempts to overload servers with denial-of-service or other attacks and similar disruptions from unauthorized use of computer systems have become more prevalent in our industry, have occurred on our systems in the past and are expected to occur periodically on our systems in the future. We may be a particularly compelling target for such attacks as a result of our brand recognition. User and business owner accounts and listing pages could be hacked, hijacked, altered or otherwise claimed or controlled by unauthorized persons. For example, we enable businesses to create online accounts and each of their business locations. Although we take steps to confirm that the person setting up the account is affiliated with the business, our verification systems could fail to confirm that such person is an authorized representative of the business, or mistakenly allow an unauthorized person to claim the business’s listing page. In addition, we face risks associated with security breaches affecting our third-party partners and service providers. A security breach at any such third party could be perceived by consumers as a security breach of our systems and result in negative publicity, damage to our reputation and expose us to other losses.
| 17 |
| Table of Contents |
Future disruptions could lead to interruptions, delays or website shutdowns, causing loss of critical data or the unauthorized disclosure or use of personally identifiable or other confidential information. Even if we experience no significant shutdown or no critical data is lost, obtained or misused in connection with an attack, the occurrence of such attack or the perception that we are vulnerable to such attacks may harm our reputation, our ability to retain existing users and our ability to attract new users. Although we will develop systems and processes that are designed to protect our data and prevent data loss and other security breaches, the techniques used to obtain unauthorized access, disable or degrade service or sabotage systems change frequently, often are not recognized until launched against a target or long after, and may originate from less regulated and more remote areas around the world. As a result, these preventative measures may not be adequate and we cannot provide assurances that they will provide absolute security.
Any or all of these issues could negatively impact our ability to attract new users, deter current users from returning to our platform, cause potential advertisers to cancel their contracts or subject us to third-party lawsuits or other liabilities. For example, we will work with a third-party vendor to process credit card payments and are subject to payment card association operating rules. Compliance with applicable operating rules will not necessarily prevent illegal or improper use of our payment systems, or the theft, loss or misuse of payment information, however. If our security measures fail to prevent fraudulent credit card transactions and protect payment information adequately as a result of employee error, malfeasance or otherwise, or we fail to comply with the applicable operating rules, we could be liable to the users and businesses for their losses, as well as the vendor under our agreement with it, and be subject to fines and higher transaction fees. In addition, government authorities could also initiate legal or regulatory actions against us in connection with such incidents, which could cause us to incur significant expense and liability or result in orders or consent decrees forcing us to modify our business practices.
Some of our features may contain open source software, which may pose particular risks to our proprietary software and solutions.
We may use open source software in our services, presently and in the future. From time to time, we may face claims from third parties claiming ownership of, or demanding release of, the open source software or derivative works that we developed using such software (which could include our proprietary source code), or otherwise seeking to enforce the terms of the applicable open source license. These claims could result in litigation and could require us to purchase a costly license or cease offering the implicated solutions unless and until we can re-engineer them to avoid infringement. This re-engineering process could require significant additional research and development resources. In addition to risks related to license requirements, use of certain open source software can lead to greater risks than use of third-party commercial software because open source licensors generally do not provide warranties or controls on the origin of the software. Any of these risks could be difficult to eliminate or manage, and, if not addressed, could have a negative effect on our business and operating results.
We may rely on data from both internal tools and third parties to calculate certain performance metrics. Real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business.
We intend to implement and track certain performance metrics – including the number of unique devices accessing our mobile app in a given period, page views and calls and clicks for directions and map views – with internal tools, which are not independently verified by any third party. Our internal tools may have a number of limitations and our methodologies for tracking these metrics may change over time, which could result in unexpected changes to our metrics, including key metrics that we report. For example, our metrics may be affected by mobile applications that automatically contact our servers for regular updates with no discernable user action involved; this activity can cause our system to count the device associated with the app as a unique app device in a given period. If the internal tools we use to track these metrics over- or under-count performance or contain algorithm or other technical errors, the data we report may not be accurate. In addition, limitations or errors with respect to how we measure data may affect our understanding of certain details of our business, which could affect our longer-term strategies.
| 18 |
| Table of Contents |
In addition, certain of our key metrics – the number of our desktop unique visitors and mobile website unique visitors – maybe calculated relying on data from third parties. While these numbers might be based on what we believe to be reasonable calculations for the applicable periods of measurement, our third-party providers may periodically encounter difficulties in providing accurate data for such metrics as a result of a variety of factors, including human and software errors. We expect these challenges to continue to occur, and potentially to increase as our traffic grows.
There may also be inherent challenges in measuring usage across our future user base around the world. For example, because these metrics are based on users with unique cookies, an individual who accesses our website from multiple devices with different cookies may be counted as multiple unique visitors, and multiple individuals who access our website from a shared device with a single cookie may be counted as a single unique visitor. In addition, although we will be implementing technology designed to block low-quality traffic, such as robots, spiders and other software, we may not be able to prevent all such traffic. For these and other reasons, the present and/or future calculations of our desktop unique visitors and mobile website unique visitors may not accurately reflect the number of people actually using our platform.
Our measures of traffic and other key metrics may differ from estimates published by third parties (other than those whose data we use to calculate our key metrics) or from similar metrics of our competitors. We will be continually seeking ways to improve our ability to measure these key metrics, and regularly review our processes to assess potential improvements to their accuracy. However, if our users, advertisers, partners and stockholders do not perceive our metrics to be accurate representations, or if we discover material inaccuracies in our metrics, our reputation may be harmed.
RISKS RELATED TO REGULATORY COMPLIANCE AND LEGAL MATTERS
We are, and may be in the future, subject to disputes and assertions by third parties that we violate their rights. These disputes may be costly to defend and could harm our business and operating results.
We may face from time to time in the future, allegations that we have violated the rights of third parties, including patent, trademark, copyright and other intellectual property rights, and the rights of current and former team members and/or future employees, users and business owners. The nature of our business also exposes us to claims relating to the information posted on our platform, including claims for defamation, libel, negligence and copyright or trademark infringement, among others. Businesses may in the future claim that we are responsible for the defamatory reviews posted by our users. We expect claims like these to potentially increase in proportion to the amount of content on our platform. In some instances, we may elect or be compelled to remove the content that is the subject of such claims or may be forced to pay substantial damages if we are unsuccessful in our efforts to defend against these claims. If we elect or are compelled to remove content from our platform, our products and services may become less useful to consumers and our traffic may decline, which would have a negative impact on our business.
We are also regularly exposed to claims based on allegations of infringement or other violations of intellectual property rights. Companies in the Internet, technology and media industries own large numbers of patent and other intellectual property rights, and frequently enter into litigation. Various “non-practicing entities” that own patents and other intellectual property rights also often aggressively attempt to assert their rights in order to extract value from technology companies. From time to time, we may receive notice letters from patent holders alleging that certain of our products and services infringe their patent rights. While we intend to pursue patent applications, we do not currently have any issued patents, and the contractual restrictions and trade secrets that protect our proprietary technology provide only limited safeguards against infringement. This may make it more difficult to defend certain of our intellectual property rights, particularly related to our core business.
We expect other claims to be made against us in the future, and as we face increasing competition and gain an increasingly high profile, we expect the number of claims against us to accelerate. The results of litigation and claims to which we may be subject cannot be predicted with any certainty. Even if the claims are without merit, the costs associated with defending against them may be substantial in terms of time, money and management distraction. In particular, patent and other intellectual property litigation may be protracted and expensive, and the results may require us to stop offering certain features, purchase licenses or modify our products and features while we develop non-infringing substitutes, or otherwise involve significant settlement costs. The development of alternative non-infringing technology or practices could require significant effort and expense or may not be feasible. Even if claims do not result in litigation or are resolved in our favor without significant cash settlements, such matters, and the time and resources necessary to resolve them, could harm our business, results of operations and reputation.
| 19 |
| Table of Contents |
Our business is subject to complex and evolving U.S., Canadian and potentially other foreign regulations and other legal obligations related to privacy, data protection and other matters. Our actual or perceived failure to comply with such regulations and obligations could harm our business.
We are subject to a variety of laws in the United States and Canada that involve matters central to our business, including laws regarding privacy, data retention, distribution of user-generated content and consumer protection, among others. For example, because we will receive, store and process personal information and other user data, including credit card information, we will be subject to numerous federal, state and local laws around the world regarding privacy and the storing, sharing, use, processing, disclosure and protection of personal information and other user data. We are also subject to a variety of laws, regulations and guidelines that regulate the way we distinguish paid search results and other types of advertising from unpaid search results.
The application and interpretation of these laws and regulations are often uncertain, particularly in the new and rapidly evolving industry in which we operate. For example, we rely on laws limiting the liability of providers of online services for activities of their users and other third parties. In the future, these laws could be tested by any number of claims, including actions based on invasion of privacy and other torts, unfair competition, copyright and trademark infringement and other theories based on the nature and content of the materials searched, any present and/or future ads posted or any present and/or future content provided by users. It is difficult to predict how existing laws will be applied to our business, and if our business grows and evolves and our solutions are used in a greater number of countries, we will also become subject to laws and regulations in additional jurisdictions, which may be inconsistent with the laws of the jurisdictions to which we are currently subject. For example, the risk related to liability for third-party actions may be greater in certain jurisdictions outside the United States where our protection from such liability may be unclear.
It is also possible that the interpretation and application of various laws and regulations may conflict with other rules or our practices, such as industry standards to which we adhere, our privacy policies and our privacy-related obligations to third parties (including, in certain instances, voluntary third-party certification bodies). Similarly, our business could be adversely affected if new legislation or regulations are adopted that require us to change our current practices or the design of our platform, products or features. For example, regulatory frameworks for privacy issues are currently in flux worldwide and are likely to remain so for the foreseeable future due to increased public scrutiny of the practices of companies offering online services with respect to personal information of their users. The U.S. government, including the White House, the Federal Trade Commission, the Department of Commerce and many state governments are reviewing the need for greater regulation of the collection, processing, storage and use of information about consumer behavior on the Internet, including regulation aimed at restricting certain targeted advertising practices. The European Commission recently approved a new safe harbor program, the E.U.-U.S. Privacy Shield, covering the transfer of personal data from the European Union to the United States, and a new general data protection regulation is expected to take effect in the European Union by 2018, each of which may be subject to varying interpretations and evolving practices, which would create uncertainty for us and possibly result in significantly greater compliance burdens for companies such as us with users and operations in Europe. Changes like these could increase our administrative costs and make it more difficult for consumers to use our platform, resulting in less traffic and revenue. Such changes could also make it more difficult for us to provide effective advertising tools to businesses on our platform, resulting in fewer advertisers and less revenue.
We believe that our policies and practices will comply with applicable laws and regulations. However, if our belief proves incorrect, if these guidelines, laws or regulations or their interpretations change or new legislation or regulations are enacted, or if the third parties with whom we share user information fail to comply with such guidelines, laws, regulations or their contractual obligations to us, we may be forced to implement new measures to reduce our legal exposure. This may require us to expend substantial resources, delay development of new products or discontinue certain products or features, which would negatively impact our business. For example, if we fail to comply with our privacy-related obligations to users or third parties, or any compromise of security that results in the unauthorized release or transfer of personally identifiable information or other user data, we may be compelled to provide additional disclosures to our users, obtain additional consents from our users before collecting or using their information or implement new safeguards to help our users manage our use of their information, among other changes. We may also face litigation, governmental enforcement actions or negative publicity, which could cause our users and advertisers to lose trust in us and have an adverse effect on our business. Internal resources expended and expenses incurred in connection with inquiries and their resolutions could result in negative publicity and adversely affect our reputation and brand. Responding to and resolving any future litigation, investigations, settlements or other regulatory actions may require significant time and resources, and could diminish confidence in and the use of our products.
| 20 |
| Table of Contents |
The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members.
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of the exchange in which we will be listed and other applicable securities rules and regulations. Compliance with these rules and regulations has increased, and will likely continue to increase, our legal and financial compliance costs, make some activities more difficult, time-consuming or costly, and place significant strain on our personnel, systems and resources. In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time. This could result in continuing uncertainty regarding compliance matters, higher administrative expenses and a diversion of management’s time and attention. Further, if our compliance efforts differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against us and our business may be harmed. Being a public company that is subject to these rules and regulations also makes it more expensive for us to obtain and retain director and officer liability insurance, and we may in the future be required to accept reduced coverage or incur substantially higher costs to obtain or retain adequate coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors and qualified executive officers.
Failure to protect or enforce our intellectual property rights could harm our business and results of operations.
We regard the protection of our patent pending applications, trade secrets, copyrights, trademarks and domain names as critical to our success. In particular, we must maintain, protect and enhance the “flooidCX” and “Gripevine” brands. We may pursue the registration of our domain names, trademarks and service marks through-out the United States and in certain jurisdictions, within North America including Canada. We will strive to protect our intellectual property rights by relying on federal, state and common law rights, as well as contractual restrictions. We will typically enter into confidentiality and invention assignment agreements with our team members, future employees and contractors, as well as confidentiality agreements with parties with whom we conduct business in order to limit access to, and disclosure and use of, our proprietary information. However, these contractual arrangements and the other steps we will take to protect our intellectual property may not prevent the misappropriation or disclosure of our proprietary information or deter independent development of similar technologies by others.
Effective trade secret, copyright, trademark and domain name protection is expensive to develop and maintain, both in terms of initial and ongoing registration requirements and expenses and the costs of defending our rights. Seeking protection for our intellectual property, including trademarks and domain names, is an expensive process and may not be successful, and we may not do so in every location in which we operate. Litigation may become necessary to enforce our intellectual property rights, protect our trade secrets or determine the validity and scope of proprietary rights claimed by others. For example, we may incur significant costs in enforcing our trademarks against those who attempt to imitate our “flooidCX” and/or “Gripevine” brands. Any litigation of this nature, regardless of outcome or merit, could result in substantial costs and diversion of management and technical resources, any of which could adversely affect our business and operating results.
| 21 |
| Table of Contents |
We may be unable to continue to use the domain names that we use in our business, or prevent third parties from acquiring and using domain names that infringe on, are similar to, or otherwise decrease the value of our brand or our trademarks or service marks.
We have registered domain names for the websites that we use in our business, such as flooidcx.com and Gripevine.com. If we lose the ability to use a domain name, whether due to trademark claims, failure to renew the applicable registration or any other cause, we may be forced to market our products under a new domain name, which could cause us substantial harm or cause us to incur significant expense in order to purchase rights to the domain name in question. In addition, our competitors and others could attempt to capitalize on our brand recognition by using domain names similar to ours. Domain names similar to ours have been registered by others in the United States and elsewhere. We may be unable to prevent third parties from acquiring and using domain names that infringe on, are similar to or otherwise decrease the value of our brand or our trademarks or service marks. Protecting and enforcing our rights in our domain names may require litigation, which could result in substantial costs and diversion of management’s attention.
RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK
Our officers and directors and insiders own approximately 40.5% of the total issued and outstanding shares of our common stock and 100% of the shares of Series A preferred stock, and will be able to influence control of us or decisions made by our management.
As of June 16, 2021, our officers, directors and insiders owned approximately 40.5% of the total issued and outstanding shares of our common stock and 100% of the shares of our Series A preferred stock and will be able to influence control of us or decision making by our management. Moreover, in the event future issuances of common stock are authorized by the Board of Directors pursuant to any future contractual relations, the officers, directors and insiders’ control of us will increase. This may result in majority control of the voting power for all business decisions.
Our Articles of Incorporation authorize 20,000,000 shares of blank check preferred stock thus providing the Board of Directors to create rights and preferences for designated shares, possibly including super voting rights. We designated 1,000,000 of the shares of blank check preferred stock as Series A. The 1,000,000 shares of Series A preferred stock were issued to our Chief Executive Officer/President, which provides for voting rights of 2.35 to one. Pursuant to Nevada law and our bylaws, the holders of a majority of our voting stock may authorize or take corporate action with only a notice provided to our stockholders. A stockholder vote may not be made available to our minority stockholders, and in any event, a stockholder vote would be controlled by the majority stockholders. See “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”
Nevada law and our Articles of Incorporation may protect our directors from certain types of lawsuits.
Nevada law provides that our officers and directors will not be liable to us or our stockholders for monetary damages for all but certain types of conduct as officers and directors. Our Bylaws permit us broad indemnification powers to all persons against all damages incurred in connection with our business to the fullest extent provided or allowed by law. The exculpation provisions may have the effect of preventing stockholders from recovering damages against our officers and directors caused by their negligence, poor judgment or other circumstances. The indemnification provisions may require us to use our limited assets to defend our officers and directors against claims, including claims arising out of their negligence, poor judgment, or other circumstances.
Our share price may highly likely be volatile, which substantially increases the risk that you may not be able to sell your shares at or above the price that you may pay for the shares.
The trading price of our common stock may highly likely be volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. In addition to the factors discussed in this “Risk Factors” section and elsewhere in this Annual Report, factors that may cause volatility in our share price include: (i) actual or anticipated fluctuations in our financial condition and operating results; (ii) changes in projected operating and financial results; (iii) announcements of technological innovations or new offerings by us or our competitors; (iv) actual or anticipated changes in our growth rate relative to our competitors; (v) announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital-raising activities or commitments; (vi) additions or departures of key personnel; (vii) actions taken by securities analysts who may cover our company, such as publishing research or forecasts about our business (and our performance against such forecasts), changing the rating of our common stock or ceasing coverage of our company; (viii) investor sentiment with respect to our competitors, business partners and industry in general; (ix) reporting on our business by the financial media, including television, radio and press reports and blogs; (x) fluctuations in the value of companies perceived by investors to be comparable to us; (xi) changes in the way we measure our key metrics; (xii) sales of our common stock; (xii) changes in laws or regulations applicable to our solutions; (xiii) share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; and (xiv) general economic and market conditions such as recessions, interest rate changes or international currency fluctuations.
| 22 |
| Table of Contents |
Furthermore, the stock markets have recently experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We could be the target of additional litigation of this type in the future. Securities litigation against us could result in substantial costs and divert our management’s time and attention from other business concerns, which could harm our business.
We do not intend to pay dividends for the foreseeable future, and as a result, our stockholders’ ability to achieve a return on their investment will depend on appreciation in the price of our common stock.
We have never declared or paid any cash dividends on our common stock and do not intend to pay any cash dividends in the foreseeable future. We anticipate that we will retain all of our future earnings for use in the development of our business and for general corporate purposes. Any determination to pay dividends in the future will be at the discretion of our board of directors. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize future gains on their investments.
Future sales of our common stock in the public market could cause our share price to decline.
Sales of a substantial number of shares of our common stock in the public market, particularly sales by our directors, officers, employees and significant stockholders, or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. As of June 16, 2021, we have 1,952,689 shares of common stock issued and outstanding of which 1,260,070 shares are restricted and 692,619 shares are free-trading.
There has only recently been an active trading market for our shares of common stock and if an active trading market does not continue to develop, purchasers of our shares may be unable to sell them publicly.
Our shares of common stock only recently started trading actively. We do not know if an active trading market will continue to develop. An active market will not develop unless broker-dealers develop interest in trading our shares, and we may be unable to generate interest in our shares among broker-dealers until we generate meaningful revenues and profits from operations. Until that time occurs, if it does at all, purchasers of our shares may be unable to sell them publicly. In the absence of an active trading market: (i) investors may have difficulty buying and selling our shares or obtaining market quotations; (ii) market visibility for our common stock may be limited; and (iii) a lack of visibility for our common stock may depress the market price for our shares.
Moreover, the market price for our shares is likely to be highly volatile and subject to wide fluctuations in response to various factors, including the following: (i) actual or anticipated fluctuations in our quarterly operating results and revisions to our expected results; (ii) changes in financial estimates by securities research analysts; (iii) conditions in the market for our products; (iv) changes in the economic performance or market valuations of companies specialized in our sector; (v) announcements by us or our competitors of new services, strategic relationships, joint ventures or capital commitments; (vi) addition or departure of key personnel; (vii) litigation related to any intellectual property; and (viii) sales or perceived potential sales of our shares.
In addition, the securities market has from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. These market fluctuations may also have a material adverse effect on the market price of our ordinary shares. Furthermore, in the past, following periods of volatility in the market price of a public company’s securities, shareholders have frequently instituted securities class action litigation against that company. Litigation of this kind could result in substantial costs and a diversion of our management’s attention and resources.
| 23 |
| Table of Contents |
Our common stock is considered to be “Penny Stock”.
Our common stock is considered to be a “penny stock” because it meets one or more of the definitions in Rule 3a51-1 promulgated under Section 3(a)(51) of the Securities Exchange Act of 1934, as amended. These include but are not limited to, the following: (i) the stock trades at a price less than $5.00 per share; (ii) it is not traded on a “recognized” national exchange; (iii) it is not quoted on The NASDAQ Stock Market, or even if quoted, has a price less than $5.00 per share; or (iv) is issued by a company with net tangible assets less than $2.0 million, if in business more than a continuous three years, or with average revenues of less than $6.0 million for the past three years. The principal result or effect of being designated a “penny stock” is that securities broker-dealers cannot recommend the stock but must trade it on an unsolicited basis.
The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in “penny stocks.” Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). Penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document prepared by the SEC, which specifies information about penny stocks and the nature and significance of risks of the penny stock market. A broker-dealer must also provide the customer with bid and offer quotations for the penny stock, the compensation of the broker-dealer, and salesperson in the transaction, and monthly account statements indicating the market value of each penny stock held in the customer’s account. In addition, the penny stock rules require that, prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for stock that becomes subject to those penny stock rules. If a trading market for our common stock develops, our common stock will probably become subject to the penny stock rules, and shareholders may have difficulty in selling their shares.
Broker-Dealer requirements may affect trading and liquidity.
Section 15(g) of the Securities Exchange Act of 1934, as amended, and Rule 15g-2 promulgated thereunder by the SEC require broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document before effecting any transaction in a penny stock for the investor’s account. Potential investors in our common stock are urged to obtain and read such disclosure carefully before purchasing any shares that are deemed to be “penny stocks.” Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to (i) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor’s financial situation, investment experience and investment objectives. Compliance with these requirements may make it more difficult for holders of our common stock to resell their shares to third parties or to otherwise dispose of them in the market or otherwise.
Sales of our common stock relying upon Rule 144 may depress prices in the market for our common stock by a material amount.
Securities saleable pursuant to the Rule 144 exemption from registration may only be resold if all of the requirements of Rule 144 have been met, including, but not limited to, the requirement that the issuer of the securities have made available all required public information. There is no limit on the amount of restricted securities that may be sold by a non-affiliate (i.e. a stockholder who has not been an officer, director or control person for at least 90 days immediately preceding the date of sale) after the restricted securities have been held by the owner for a period of at least six months, provided that we are current in our disclosure reporting obligations.
When our shareholders have met the required holding period imposed by Rule 144 under the Securities Act, there is a significant risk that sales under Rule 144 or under any other exemption from the Securities Act or pursuant to registration of shares of common stock of present stockholders, may have a depressive effect upon the price of our common stock in the over-the-counter market, especially in situations where a large volume of shares is offered for sale at the same time.
| 24 |
| Table of Contents |
Our internal controls over financial reporting may not be effective and our independent registered public accounting firm may not be able to certify as to their effectiveness, which could have a significant and adverse effect on our business and reputation.
As a public reporting company, we are in a continuing process of developing, establishing, and maintaining internal controls and procedures that will allow our management to report on, and our independent registered public accounting firm to attest to, the internal controls over financial reporting if and when required to do so under Section 404 of the Sarbanes-Oxley Act of 2002. Our management will be required to report on internal controls over financial reporting under Section 404. If we fail to achieve and maintain the adequacy of internal controls, we would not be able to conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404. At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating. Moreover, our testing, or the subsequent testing by our independent registered public accounting firm, that must be performed may reveal other material weaknesses or that the material weaknesses described above have not been fully remediated. If we do not remediate the material weaknesses described above, or if other material weaknesses are identified or we are not able to comply with the requirements of Section 404 in a timely manner, our reported financial results could be materially misstated or could subsequently require restatement, we could receive an adverse opinion regarding our internal controls over financial reporting from our independent registered public accounting firm and we could be subject to investigations or sanctions by regulatory authorities, which would require additional financial and management resources, and the market price of our stock could decline.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
As of the date of this Annual Report, we do not have any unresolved staff comments from the Securities and Exchange Commission.
There are currently two leases regarding principal office space regarding 1282A Cornwall Road and 1290 Cornwall Road, Unit B. The lease agreements on both spaces ended by their terms in 2020. Beginning January 1, 2021, the Company entered into a month-to-month lease arrangement at a cost of $4,455 per month.
As of the date of this Annual Report, management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Annual Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.
ITEM 4. MINE SAFETY DISCLOSURES.
Not Applicable.
| 25 |
| Table of Contents |
MARKET INFORMATION
As of June 16, 2021, there are 1,952,689 outstanding shares of our common stock of which approximately 1,283,599 shares are restricted securities as that term is defined in Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”). Although the Securities Act and Rule 144 place certain prohibitions on the sale of restricted securities, restricted securities may be sold into the public market under certain conditions, including so long as those shares have been held for over six months or, in some cases, one year.
On March 4, 2015, our shares were listed for trading on the OTC Electronic Bulletin Board (OTCBB) under the symbol “BXRO”. Our trading symbol was changed to “GRPV” on February 1, 2017 and then to “FLCX” on March 15, 2019. Our shares of common stock commenced with nominal activity on the OTCQB approximately February 2017. The market for our common stock is limited and can be volatile. The following table sets forth the high and low bid prices relating to the common stock on a quarterly basis for the last two completed fiscal years as quoted by OTCMarkets stock market. These quotations reflect inter-dealer prices without retail mark-up, mark-down, or commissions, and may not reflect actual transactions, but give effect to the 1-for-85 reverse stock split.
| 2021 - 2020 Fiscal Year |
| High Bid |
|
| Low Bid |
| ||
| Fourth Quarter (12/1/2020 – 2/28/2021) |
| $ | 2.29 |
|
| $ | 0.48 |
|
| Third Quarter (9/1/2020 – 11/30/2020) |
| $ | 1.69 |
|
| $ | 0.42 |
|
| Second Quarter (6/1/2020 – 8/31/2020) |
| $ | 6.29 |
|
| $ | 1.19 |
|
| First Quarter (3/1/2020 – 5/31/2020) |
| $ | 4.25 |
|
| $ | 0.85 |
|
|
|
|
|
|
|
|
|
|
|
| 2020 - 2019 Fiscal Year |
| High Bid |
|
| Low Bid |
| ||
| Fourth Quarter (12/1/2019 – 2/29/2020) |
| $ | 5.95 |
|
| $ | 0.85 |
|
| Third Quarter (9/1/2019 – 11/30/2019) |
| $ | 8.50 |
|
| $ | 3.40 |
|
| Second Quarter (6/1/2019 – 8/31/2019) |
| $ | 7.06 |
|
| $ | 6.80 |
|
| First Quarter (3/1/2019 – 5/31/2019) |
| $ | 7.06 |
|
| $ | 8.50 |
|
As of June 16, 2021, an aggregate of 1,952,689 shares of common stock were issued and outstanding and were owned by approximately 99 holders of record based on information provided by our transfer agent.
DIVIDENDS
We have never declared or paid a cash dividend. At this time, we do not anticipate paying dividends in the future. We are under no legal or contractual obligation to declare or to pay dividends, and the timing and amount of any future cash dividends and distributions is at the discretion of our Board of Directors and will depend, among other things, on our future after-tax earnings, operations, capital requirements, borrowing capacity, financial condition and general business conditions. We plan to retain any earnings for use in the operation of our business and to fund future growth. You should not purchase our Shares on the expectation of future dividends.
| 26 |
| Table of Contents |
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
As of the end of the most recently completed fiscal year, the following were authorized for issuance under equity compensation plans:
Equity Compensation Plan Information
| Plan Category |
| Number of securities to be issued upon exercise of outstanding options, warrants and rights |
|
| Weighted- average exercise price of outstanding options, warrants and rights |
|
| Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
| |||
| Equity compensation plans approved by security holders |
|
| 283,368 |
|
| $ | 17.00 |
|
|
| 304,867 |
|
| Equity compensation plans not approved by security holders |
|
| 0 |
|
| $ | -- |
|
|
| 0 |
|
| Total |
|
| 283,368 |
|
|
|
|
|
|
| 304,867 |
|
RECENT SALES OF UNREGISTERED SECURITIES
During last quarter of the fiscal year ended February 28, 2021, we authorized the issuance of 6,570 shares of common stock with a fair value of $9,856 to the COO of the Company for past services.
TRANSFER AGENT AND REGISTRAR
Our transfer agent and registrar is Globex Transfer, LLC, 780 Deltona Blvd., Suite 202, Deltona, Florida 32725.
ISSUER PURCHASES OF SECURITIES
None.
ITEM 6. SELECTED FINANCIAL DATA.
Not applicable.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Overview
The following discussion should be read in conjunction with our audited combined financial statements and the related notes that appear under Item 8 in this Annual Report on Form 10-K. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. The Company’s actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this Annual Report on Form 10-K. The combined financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
| 27 |
| Table of Contents |
Fiscal Year Ended February 28, 2021 Compared to Fiscal Year Ended February 29, 2020
Revenue. We generated revenues of $79,520 for the fiscal year ended February 28, 2021, as compared to $46,875 for the fiscal year ended February 29, 2020.
Operating expenses: During fiscal year ended February 28, 2021, we incurred operating expenses in the amount of $1,466,666 compared to operating expenses incurred during fiscal year ended February 29, 2020 of $2,803,710 (a decrease of $1,337,044). Operating expenses include: (i) general and administrative of $464,027 (2020: $930,558); and (ii) research and development of $1,002,639 (2020: $1,873,152). General and administrative expenses decreased by $466,531, primarily due to decrease in stock-based compensation. Research and development expenses decreased by $870,513 due primarily to decrease in stock-based compensation.
Net loss. The Company had a net loss of $1,475,030 or $0.76 per share for the fiscal year ended February 28, 2021 compared to $2,805,835 or $1.61 per share for the fiscal year ended February 29, 2020.
LIQUIDITY AND CAPITAL RESOURCES
Fiscal Year Ended February 28, 2021
As at fiscal year ended February 28, 2021, our current assets were $16,372 and our current liabilities were $4,371,772, which resulted in a working capital deficit of $4,355,400. As of the fiscal year ended February 28, 2021, current assets were comprised of: (i) $1,251 in cash; and (ii) $7,380 in accounts receivables and $7,741 in prepaid expenses and deposits. As at fiscal year ended February 28, 2021, current liabilities were comprised of: (i) $282,760 in accounts payable and accrued liabilities; (ii) $3,143,792 in loans payable; and (iii) $945,220 due to related parties.
As of the fiscal year ended February 28, 2021, our total assets were $31,784 comprised of: (i) current assets of $16,372; and (ii) property and equipment, net of depreciation of $15,412. The decrease in total assets during fiscal year ended February 28, 2021 from fiscal year ended February 29, 2020 was due to decreases in cash, accounts receivable and operating lease right-of-use asset.
As of February 28, 2021, our total liabilities were $4,371,772 comprised of accounts payable and accrued liabilities of $282,760, loans payable of $3,143,792 and due to related party of $945,220.
Stockholders’ deficit increased from $3,357,941 for fiscal year ended February 29, 2020 to $4,339,988 for fiscal year ended February 28, 2021.
Cash Flows from Operating Activities
We have generated negative cash flows from operating activities. For fiscal year ended February 28, 2021, net cash flows used in operating activities was $424,846 compared to $778,910 for fiscal year ended February 29, 2020. Net cash flows used by operating activities consisted primarily of the net loss of $1,475,030 (2020: $2,805,835), which was partially adjusted by $578,978 (2020: $1,666,647) in stock-based compensation, $66,368 (2020: $nil) in financing costs, $38,148 (2020: $181,808) in shares issued for services, $21,516 (2020: $49,000) in loss on settlement of debt, and $5,332 (2020: $7,629) in depreciation. Net cash flows used by operating activities was further changed by: (i) an increase of $7,380 (2020: $nil) in account receivable; a decrease of $16,875 (2020: ($16,875)) in accrued receivable; (ii) an increase of $10,571 (2020: $146) in prepaid expenses and deposits; (iii) an increase of $15,377 (2020: $46,083) in accounts payable and accrued liabilities; and (iv) an increase of $204,399 (2020: $92,487) in due to related parties.
| 28 |
| Table of Contents |
Cash Flows from Investing Activities
We used cash of $1,441 in investing activities during the fiscal year ended February 28, 2021, which consisted of the purchase of equipment. In comparison, cash of $1,453 was used during fiscal year ended February 29, 2020 for the purchase of equipment.
Cash Flows from Financing Activities
Net cash flows provided from financing activities during fiscal year ended February 28, 2021 was $436,103, which consisted of $502,103 in proceeds from loans, offset by repayment of loans payable in the amount of $66,000. During fiscal year ended February 29, 2020, cash flows provided by financing activities was $854,829, which consisted of $576,500 from the issuance of shares and $438,828 in proceeds from loans, offset by repayment of loans payable in the amount of $160,499.
Material Commitments
The balances due to related parties and shareholder ($2,678,695) 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. A loan in the amount of $197,075 was due November 30, 2020 and secured by 588,235 shares of common stock of the Company owned by the President of the Company. Loans in the amounts of $118,245 and $23,649 are unsecured and bear interest at 5% per annum, and are due November 25, 2020 and June 1, 2021, respectively. The Company also obtained a government-backed loan to assist businesses during the COVID-19 pandemic in the amount of $31,532. This 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. It may be repaid at any time without penalty and if 75% is repaid on or within the initial term, the remaining balance will be forgiven.
Off-Balance Sheet Arrangements
There were no off-balance sheet arrangements during fiscal year ended February 28, 2021 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 February 28, 2021, we had a working capital deficit of $4,355,400 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 there is substantial doubt that we can continue as an on-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.
| 29 |
| Table of Contents |
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 $1,500,000 for the next 12 months as a reporting issuer and additional funds are required. Before generation of revenue, the additional funding may come from equity financing from the sale of our common stock or loans from management 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.
In October 2019, we entered into an agreement for financial advisory and investment banking services and issued 2,500,000 (pre-reverse stock split) shares of our common stock with a fair value of $172,500 as partial compensation for these services. We agreed to pay $5,000 per month for a period of six months, which payment can be paid in cash or in shares at our option. We also agreed to issue an additional 2,500,000 shares upon an uplisting of our common stock to a national exchange. Additional compensation, consisting of a cash commission, cash payment for expenses, and common stock purchase warrants, would be paid upon achieving financing. On November 20, 2020, we entered into a settlement and release agreement to terminate this arrangement. All outstanding fees owed by us under this arrangement were waived and 2,000,000 (pre-reverse stock split) shares of our common stock were returned to us.
MATERIAL COMMITMENTS
We have no reportable material commitments for current fiscal year ending February 28, 2021.
RECENT ACCOUNTING PRONOUNCEMENTS
As reflected in Note 2 of the Notes to the Consolidated Financial Statements, there have been recent accounting pronouncements or changes in accounting pronouncements that impacted fiscal year ended February 28, 2021 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 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.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a “smaller reporting company”, we are not required to provide this information.
| 30 |
| Table of Contents |
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
FLOOIDCX CORP.
Consolidated Financial Statements
Years Ended February 28, 2021 and February 29, 2020
(Expressed in US dollars)
|
|
| Index |
|
|
| F–2 |
| |
|
|
|
|
|
|
| F–3 |
| |
|
|
|
|
|
| Consolidated Statements of Operations and Comprehensive Loss |
| F–4 |
|
|
|
|
|
|
|
| F–5 |
| |
|
|
|
|
|
|
| F–6 |
| |
|
|
|
|
|
|
| F–7 |
|
| F-1 |
| Table of Contents |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of flooidCX Corp.
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of flooidCX Corp. (the “Company”) as of February 28, 2021 and February 29, 2020, and the related consolidated statements of operations and comprehensive loss, stockholders’ deficit, and cash flows for the years then ended and related notes (collectively, the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as at February 28, 2021 and February 29, 2020, and the results of their operations and cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Explanatory Paragraph Regarding Going Concern
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has a working capital deficit, and has incurred significant operating losses and negative cash flows from operations since inception. As at February 28, 2021, the Company has a working capital deficit of $4,355,400 and an accumulated deficit of $56,165,383. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also discussed in Note 1 to the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to fraud or error. The Company is not required to have, nor were we engaged to perform, an audit of its internal controls over financial reporting. As part of our audits, we are required to obtain an understanding of the Company’s internal controls over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal controls over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the Board of Directors and that: (i) relate to accounts or disclosures that are material to the financial statements; and (ii) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
/s/ SATURNA GROUP CHARTERED PROFESSIONAL ACCOUNTANTS LLP
Saturna Group Chartered Professional Accountants LLP
We have served as the Company’s auditor since 2019.
Vancouver, Canada
June 15, 2021
| F-2 |
| Table of Contents |
Consolidated Balance Sheets
(Expressed in U.S. dollars)
|
|
| February 28, 2021 $ |
|
| February 29, 2020 $ |
| ||
|
|
|
|
|
|
|
| ||
| ASSETS |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
| ||
| Cash |
|
| 1,251 |
|
|
| 32,025 |
|
| Accounts receivable |
|
| 7,380 |
|
|
| – |
|
| Accrued receivable |
|
| – |
|
|
| 16,875 |
|
| Prepaid expenses and deposits |
|
| 7,741 |
|
|
| 18,312 |
|
|
|
|
|
|
|
|
|
|
|
| Total Current Assets |
|
| 16,372 |
|
|
| 67,212 |
|
|
|
|
|
|
|
|
|
|
|
| Property and equipment (Note 3) |
|
| 15,412 |
|
|
| 18,423 |
|
| Operating lease right-of-use asset (Note 4) |
|
| – |
|
|
| 39,138 |
|
|
|
|
|
|
|
|
|
|
|
| Total Assets |
|
| 31,784 |
|
|
| 124,773 |
|
|
|
|
|
|
|
|
|
|
|
| LIABILITIES AND STOCKHOLDERS’ DEFICIT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Current Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Accounts payable and accrued liabilities |
|
| 282,760 |
|
|
| 167,383 |
|
| Operating lease liability (Note 4) |
|
| – |
|
|
| 39,138 |
|
| Loans payable (Note 5) |
|
| 3,143,792 |
|
|
| 2,550,646 |
|
| Due to related party (Note 6) |
|
| 945,220 |
|
|
| 725,547 |
|
|
|
|
|
|
|
|
| ||
| Total Liabilities |
|
| 4,371,772 |
|
|
| 3,482,714 |
|
|
|
|
|
|
|
|
|
|
|
| Nature of Operations and Continuance of Business (Note 1) |
|
|
|
|
|
|
|
|
| Commitments (Note 10) |
|
|
|
|
|
|
|
|
| Subsequent Events (Note 12) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Stockholders’ Deficit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Preferred stock, 20,000,000 shares authorized, $0.001 par value 1,000,000 shares issued and outstanding |
|
| 1,000 |
|
|
| 1,000 |
|
|
|
|
|
|
|
|
| ||
| Common stock, 300,000,000 shares authorized, $0.001 par value 1,976,218 and 1,919,800 shares issued and outstanding respectively |
|
| 1,976 |
|
|
| 1,919 |
|
|
|
|
|
|
|
|
| ||
| Common stock issuable (Note 7) |
|
| 19,497 |
|
|
| 9,308 |
|
|
|
|
|
|
|
|
| ||
| Additional paid-in capital |
|
| 51,728,412 |
|
|
| 51,034,197 |
|
|
|
|
|
|
|
|
| ||
| Accumulated other comprehensive income |
|
| 74,510 |
|
|
| 285,988 |
|
|
|
|
|
|
|
|
| ||
| Deficit |
|
| (56,165,383 | ) |
|
| (54,690,353 | ) |
|
|
|
|
|
|
|
| ||
| Total Stockholders’ Deficit |
|
| (4,339,988 | ) |
|
| (3,357,941 | ) |
|
|
|
|
|
|
|
|
|
|
| Total Liabilities and Stockholders’ Deficit |
|
| 31,784 |
|
|
| 124,773 |
|
(The accompanying notes are an integral part of these consolidated financial statements)
| F-3 |
| Table of Contents |
Consolidated Statements of Operations and Comprehensive Loss
(Expressed in U.S. dollars)
|
|
| Year Ended February 28, 2021 $ |
|
| Year Ended February 29, 2020 $ |
| ||
|
|
|
|
|
|
|
| ||
| Revenue |
|
| 79,520 |
|
|
| 46,875 |
|
|
|
|
|
|
|
|
|
|
|
| Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| General and administrative (Note 6) |
|
| 464,027 |
|
|
| 930,558 |
|
| Research and development (Note 6) |
|
| 1,002,639 |
|
|
| 1,873,152 |
|
|
|
|
|
|
|
|
|
|
|
| Total expenses |
|
| 1,466,666 |
|
|
| 2,803,710 |
|
|
|
|
|
|
|
|
|
|
|
| Loss before other expense |
|
| (1,387,146 | ) |
|
| (2,756,835 | ) |
|
|
|
|
|
|
|
|
|
|
| Other expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Financing costs (Note 5 and 7) |
|
| (66,368 | ) |
|
| – |
|
| Loss on settlement of debt (Note 5 and 7) |
|
| (21,516 | ) |
|
| (49,000 | ) |
|
|
|
|
|
|
|
|
|
|
| Net loss for the year |
|
| (1,475,030 | ) |
|
| (2,805,835 | ) |
|
|
|
|
|
|
|
|
|
|
| Other comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Foreign currency translation gain (loss) |
|
| (211,478 | ) |
|
| 30,965 |
|
|
|
|
|
|
|
|
|
|
|
| Comprehensive loss for the year |
|
| (1,686,508 | ) |
|
| (2,774,870 | ) |
|
|
|
|
|
|
|
|
|
|
| Net loss per share, basic and diluted |
|
| (0.76 | ) |
|
| (1.61 | ) |
|
|
|
|
|
|
|
|
|
|
| Weighted average number of shares outstanding |
|
| 1,951,618 |
|
|
| 1,745,275 |
|
(The accompanying notes are an integral part of these consolidated financial statements)
| F-4 |
| Table of Contents |
Consolidated Statements of Stockholders’ Deficit
(Expressed in U.S. dollars)
|
|
| Preferred Stock |
|
| Common Stock |
|
| Common Stock |
|
| Additional Paid-in |
|
| Accumulated Other Comprehensive |
|
|
|
|
| Total Stockholders’ |
| |||||||||||||||
|
|
| Shares # |
|
| Amount $ |
|
| Shares # |
|
|
| Amount $ |
|
| Issuable $ | Capital $ | Income $ | Deficit $ | Deficit $ |
| ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||
| Balance, February 28, 2019 |
|
| 1,000,000 |
|
|
| 1,000 |
|
|
| 1,604,736 |
|
|
| 1,604 |
|
|
| 118 |
|
|
| 48,394,747 |
|
|
| 255,023 |
|
|
| (51,884,518 | ) |
|
| (3,232,026 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares issued pursuant to share exchange agreement |
|
| – |
|
|
| – |
|
|
| 117,647 |
|
|
| 118 |
|
|
| (118 | ) |
|
| – |
|
|
| – |
|
|
| – |
|
|
| – |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shares issued for cash |
|
| – |
|
|
| – |
|
|
| 126,824 |
|
|
| 127 |
|
|
| – |
|
|
| 576,373 |
|
|
| – |
|
|
| – |
|
|
| 576,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fair value of shares issued pursuant to settlement of loans payable |
|
| – |
|
|
| – |
|
|
| 41,176 |
|
|
| 41 |
|
|
| – |
|
|
| 223,959 |
|
|
| – |
|
|
| – |
|
|
| 224,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fair value of shares issued for services |
|
| – |
|
|
| – |
|
|
| 29,412 |
|
|
| 29 |
|
|
| 9,308 |
|
|
| 172,471 |
|
|
| – |
|
|
| – |
|
|
| 181,808 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fair value of stock options granted |
|
| – |
|
|
| – |
|
|
| – |
|
|
| – |
|
|
| – |
|
|
| 1,666,647 |
|
|
| – |
|
|
| – |
|
|
| 1,666,647 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Foreign exchange translation gain |
|
| – |
|
|
| – |
|
|
| – |
|
|
| – |
|
|
| – |
|
|
| – |
|
|
| 30,965 |
|
|
| – |
|
|
| 30,965 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss for the year |
|
| – |
|
|
| – |
|
|
| – |
|
|
| – |
|
|
| – |
|
|
| – |
|
|
| – |
|
|
| (2,805,835 | ) |
|
| (2,805,835 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance, February 29, 2020 |
|
| 1,000,000 |
|
|
| 1,000 |
|
|
| 1,919,795 |
|
|
| 1,919 |
|
|
| 9,308 |
|
|
| 51,034,197 |
|
|
| 285,988 |
|
|
| (54,690,353 | ) |
|
| (3,357,941 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fair value of shares to be issued for services |
|
| – |
|
|
| – |
|
|
| – |
|
|
| – |
|
|
| 19,497 |
|
|
| – |
|
|
| – |
|
|
| – |
|
|
| 19,497 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fair value of shares issued for services |
|
| – |
|
|
| – |
|
|
| 15,244 |
|
|
| 15 |
|
|
| (9,308 | ) |
|
| 27,944 |
|
|
| – |
|
|
| – |
|
|
| 18,651 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fair value of shares issued as financing costs |
|
| – |
|
|
| – |
|
|
| 23,531 |
|
|
| 24 |
|
|
| – |
|
|
| 49,976 |
|
|
| – |
|
|
| – |
|
|
| 50,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fair value of stock options granted as financing costs |
|
| – |
|
|
| – |
|
|
| – |
|
|
| – |
|
|
| – |
|
|
| 11,835 |
|
|
| – |
|
|
| – |
|
|
| 11,835 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fair value of shares issued to settle debt |
|
| – |
|
|
| – |
|
|
| 17,648 |
|
|
| 18 |
|
|
| – |
|
|
| 25,482 |
|
|
| – |
|
|
| – |
|
|
| 25,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fair value of stock options granted |
|
| – |
|
|
| – |
|
|
| – |
|
|
| – |
|
|
| – |
|
|
| 578,978 |
|
|
| – |
|
|
| – |
|
|
| 578,978 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Foreign exchange translation loss |
|
| – |
|
|
| – |
|
|
| – |
|
|
| – |
|
|
| – |
|
|
| – |
|
|
| (211,478 | ) |
|
| – |
|
|
| (211,478 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net loss for the year |
|
| – |
|
|
| – |
|
|
| – |
|
|
| – |
|
|
| – |
|
|
| – |
|
|
| – |
|
|
| (1,475,030 | ) |
|
| (1,475,030 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance, February 28, 2021 |
|
| 1,000,000 |
|
|
| 1,000 |
|
|
| 1,976,218 |
|
|
| 1,976 |
|
|
| 19,497 |
|
|
| 51,728,412 |
|
|
| 74,510 |
|
|
| (56,165,383 | ) |
|
| (4,339,988 | ) |
(The accompanying notes are an integral part of these consolidated financial statements)
| F-5 |
| Table of Contents |
Consolidated Statements of Cash Flows
(Expressed in U.S. dollars)
|
|
| Year Ended February 28, 2021 $ |
|
| Year Ended February 29, 2020 $ |
| ||
|
|
|
|
|
| ||||
| Operating Activities |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
| ||
| Net loss for the year |
|
| (1,475,030 | ) |
|
| (2,805,835 | ) |
|
|
|
|
|
|
|
| ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
| Depreciation |
|
| 5,332 |
|
|
| 7,629 |
|
| Financing costs |
|
| 66,368 |
|
|
| – |
|
| Loss on settlement of debt |
|
| 21,516 |
|
|
| 49,000 |
|
| Shares issued/issuable for services |
|
| 38,148 |
|
|
| 181,808 |
|
| Stock-based compensation |
|
| 578,978 |
|
|
| 1,666,647 |
|
|
|
|
|
|
|
|
| ||
| Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
| Accounts receivable |
|
| (7,380 | ) |
|
| – |
|
| Accrued receivable |
|
| 16,875 |
|
|
| (16,875 | ) |
| Prepaid expenses and deposits |
|
| 10,571 |
|
|
| 146 |
|
| Accounts payable and accrued liabilities |
|
| 115,377 |
|
|
| 46,083 |
|
| Due to related party |
|
| 204,399 |
|
|
| 92,487 |
|
|
|
|
|
|
|
|
| ||
| Net Cash Used In Operating Activities |
|
| (424,846 | ) |
|
| (778,910 | ) |
|
|
|
|
|
|
|
| ||
| Investing Activities |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
| ||
| Purchase of property and equipment |
|
| (1,441 | ) |
|
| (1,453 | ) |
|
|
|
|
|
|
|
|
|
|
| Net Cash Used in Investing Activities |
|
| (1,441 | ) |
|
| (1,453 | ) |
|
|
|
|
|
|
|
|
|
|
| Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Proceeds from loans payable |
|
| 502,103 |
|
|
| 438,828 |
|
| Repayment of loans payable |
|
| (66,000 | ) |
|
| (160,499 | ) |
| Proceeds from issuance of common stock |
|
| – |
|
|
| 576,500 |
|
|
|
|
|
|
|
|
| ||
| Net Cash Provided by Financing Activities |
|
| 436,103 |
|
|
| 854,829 |
|
|
|
|
|
|
|
|
| ||
| Effect of Foreign Exchange Rate Changes on Cash |
|
| (40,590 | ) |
|
| (47,958 | ) |
|
|
|
|
|
|
|
| ||
| Change in Cash |
|
| (30,774 | ) |
|
| 26,508 |
|
|
|
|
|
|
|
|
| ||
| Cash, Beginning of Year |
|
| 32,025 |
|
|
| 5,517 |
|
|
|
|
|
|
|
|
| ||
| Cash, End of Year |
|
| 1,251 |
|
|
| 32,025 |
|
|
|
|
|
|
|
|
|
|
|
| Non-cash Investing and Financing Activities: |
|
|
|
|
|
|
|
|
| Right-of-use asset under operating lease |
|
| – |
|
|
| 59,189 |
|
| Shares issued to settle loans payable |
|
| – |
|
|
| 224,000 |
|
| Shares issued to settle accrued interest payable |
|
| 25,500 |
|
|
| – |
|
|
|
|
|
|
|
|
| ||
| Supplemental Disclosures: |
|
|
|
|
|
|
|
|
| Interest paid |
|
| – |
|
|
| – |
|
| Income taxes paid |
|
| – |
|
|
| – |
|
(The accompanying notes are an integral part of these consolidated financial statements)
| F-6 |
| Table of Contents |
Notes to the Consolidated Financial Statements
Years Ended February 28, 2021 and February 29, 2020
(Expressed in U.S. Dollars)
| 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 May 17, 2019, the Company and Resolution 1, Inc. (“R1”) and the shareholders of R1 who collectively own 100% of R1 entered into and consummated transactions pursuant to a Share Exchange Agreement (the “Agreement”), whereby the Company agreed to issue to the R1 shareholders an aggregate of 10,000,000 shares of its common stock in exchange for 100% of the equity interests of R1 held by the R1 shareholders. As a result of the Agreement, R1 became a wholly owned subsidiary of the Company.
As a result of the Agreement, the acquisition transaction was accounted for as a common control transaction in accordance with the Financial Accounting Standards Board (“FASB”) (Accounting Standard Codification (“ASC”) 805-50, Business Combinations – Common control transactions). The Company evaluated the guidance contained in ASC 805-50 with respect to the combinations among entities or businesses under common control and concluded that since the majority shareholders of the Company and R1 are the same, this was a common control transaction and did not result in a change in control at 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 amount of the net assets or equity interests transferred. Any differences between the proceeds received or transferred and the carrying amounts of the net assets are considered equity transactions that would be eliminated in consolidation, and no gain or loss would be recognized in the consolidated financial statements of the ultimate parent. As a result, the financial position and the results of operations of the Company and R1 were consolidated together as if they were operating as one entity from the beginning.
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, has 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 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 February 28, 2021, the Company has a working capital deficit of $4,355,400 and has an accumulated deficit of $56,165,383 since inception. As at February 28, 2021, the Company is in default of certain loans payable (refer to Note 5). Furthermore, during the year ended February 28, 2021, the Company used $424,846 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.
On November 23, 2020 the Company approved a reverse stock split of its issued and outstanding shares of common stock on a one share for 85 shares (1:85) basis. The reverse stock split was effected on December 11, 2020 with no change in par value. |
| 2. | Significant Accounting Policies | |
|
|
|
|
|
| (a) | Basis of Presentation |
|
|
|
|
|
|
| These 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) | Reclassifications |
|
|
|
|
|
|
| Certain of the prior year figures have been reclassified to conform to the current year’s presentation. |
|
|
|
|
|
|
| Cash and Cash Equivalents |
|
|
|
|
|
| (c) | The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents. |
| F-7 |
| Table of Contents |
FLOOIDCX CORP.
Notes to the Consolidated Financial Statements
Years Ended February 28, 2021 and February 29, 2020
(Expressed in U.S. Dollars)
| 2. | Significant Accounting Policies (continued) | |
|
|
|
|
|
| (d) | Use of Estimates |
|
|
|
|
|
|
| The preparation of these consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to collectability of accounts receivable, the useful lives and recoverability of equipment, incremental borrowing rate used to calculate lease liabilities, fair value of stock-based compensation, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on 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 liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. |
|
|
|
|
|
| (e) | Accounts Receivable |
|
|
|
|
|
|
| The Company establishes an allowance for doubtful accounts based on the age of the receivable and the specific identification of receivables the Company considers at risk. As at February 28, 2021, there is no allowance for doubtful accounts.
The Company’s accounts receivable balance is 100% owed by one customer. |
|
|
|
|
|
| (f) | Property and Equipment |
|
|
|
|
|
|
| Property and equipment is recorded at cost. Depreciation is recorded at the following annual rates: |
| Computer equipment |
| 20% – declining balance method |
| Furniture and equipment |
| 55% – declining balance method |
|
| (g) | Impairment of Long-lived Assets |
|
|
|
|
|
| The Company reviews long-lived assets such as property and equipment and intangible assets with finite useful lives for impairment whenever events or changes in circumstance indicate that the carrying amount may not be recoverable. If the total of the expected undiscounted future cash flows is less than the carrying amount of the asset, a loss is recognized for the excess of the carrying amount over the fair value of the asset. | |
|
|
|
|
|
| (h) | Financial Instruments and Fair Value Measurements |
|
|
|
|
|
|
| ASC 820, “Fair Value Measurements and Disclosures” requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:
Level 1
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
The Company’s financial instruments consist principally of cash, accounts receivable, accrued receivable, accounts payable and accrued liabilities, loans payable, and amounts due to related parties. |
| F-8 |
| Table of Contents |
FLOOIDCX CORP.
Notes to the Consolidated Financial Statements
Years Ended February 28, 2021 and February 29, 2020
(Expressed in U.S. Dollars)
| 2. | Significant Accounting Policies (continued) | |
|
|
|
|
| (h) | Financial Instruments and Fair Value Measurements (continued) | |
|
|
|
|
|
|
| The following table represents assets and liabilities that are measured and recognized at fair value as of February 28, 2021, on a recurring basis: |
|
|
| Level 1 $ |
|
| Level 2 $ |
|
| Level 3 $ |
| |||
|
|
|
|
|
|
|
|
|
|
| |||
| Cash |
|
| 1,251 |
|
|
| – |
|
|
| – |
|
|
|
| The recorded values of all other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations. |
|
|
|
|
|
| (i) | In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which requires lessees to put most leases on their balance sheets but recognize the expenses on their income statements in a manner similar to current practice. The standard states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. The standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2018. The Company adopted ASU 2016-02 on March 1, 2019, using the transition relief to the modified retrospective approach, presenting prior year information based on the previous standard. In addition, the Company elected the transition package of three practical expedients permitted under the standard, which eliminates the requirements to reassess prior conclusions about lease identification, lease classification, and initial direct costs. The adoption of ASU 2016-02 did not have a material impact on the Company’s consolidated balance sheets, results of operations, or cash flows. |
|
|
|
|
|
| At the lease commencement date, right-of-use (“ROU”) assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term, which includes all fixed obligations arising from the lease contract. If an interest rate is not explicit in a lease, the Company utilizes its incremental borrowing rate for a period that closely matches the lease term. The Company has elected not to recognize ROU assets and lease liabilities for leases with a lease term of less than 12 months, | |
|
|
|
|
|
| (j) | Revenue Recognition |
|
|
|
|
|
|
| Under ASC 606, “Revenue from Contracts with Customers”, the Company recognizes revenue by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.
Performance Obligations
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in the new revenue standard. The contract transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.
Revenue Service Type
The Company has one revenue source – developing and building online resolution platforms. The Company recognized revenue over time by measuring its progress toward complete satisfaction of the performance obligation. |
|
|
|
|
|
| (k) | Income Taxes |
|
|
|
|
|
|
| The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Income Taxes”. The asset and liability method provides that deferred income tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carry-forwards. Deferred income tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred income tax assets to the amount that is believed more likely than not to be realized.
The Company has not recorded any amounts pertaining to uncertain tax positions. |
| F-9 |
| Table of Contents |
FLOOIDCX CORP.
Notes to the Consolidated Financial Statements
Years Ended February 28, 2021 and February 29, 2020
(Expressed in U.S. Dollars)
| 2. | Significant Accounting Policies (continued) | |
|
|
|
|
| (l) | Foreign Currency Translation | |
|
|
|
|
|
|
| The Company’s functional and reporting currency is the United States dollar. The functional currency of MBE and Resolution 1 is the Canadian dollar. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate 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 settlement of foreign currency denominated transactions or balances are included in the determination of income.
The accounts of MBE and Resolution 1 are translated to United States dollars using the current rate method. Accordingly, assets and liabilities are translated into United States dollars at the period-end exchange rate while revenue and expenses are translated at the average exchange rates during the period. Related exchange gains and losses are included in a separate component of stockholders’ equity as accumulated other comprehensive income. |
|
|
|
|
|
| (m) | Stock-based Compensation |
|
|
|
|
|
|
| The Company records stock-based compensation in accordance with ASC 718, “Compensation – Stock Compensation”, using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.
The Company uses the Black-Scholes option pricing model to calculate the fair value of stock-based awards. This model is affected by the Company’s stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to, the Company’s expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the consolidated statement of operations over the requisite service period. |
|
|
|
|
|
| (n) | Research and Development |
|
|
|
|
|
|
| Research and development costs are charged as operating expenses as incurred. |
|
|
|
|
|
| (o) | Loss Per Share |
|
|
|
|
|
|
| The Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the consolidated statement of operations. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In 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. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As at February 28, 2021, the Company had 283,368 (February 29, 2020 – 214,780) potentially dilutive shares outstanding. |
|
|
|
|
|
| (p) | Comprehensive Loss |
|
|
|
|
|
|
| Comprehensive loss consists of net loss and other related gains and losses affecting stockholders’ equity that are excluded from net income or loss. As at February 28, 2021 and February 29, 2020, comprehensive loss includes cumulative translation adjustments for changes in foreign currency exchange rates during the period. |
|
|
|
|
|
| (q) | 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. |
| F-10 |
| Table of Contents |
FLOOIDCX CORP.
Notes to the Consolidated Financial Statements
Years Ended February 28, 2021 and February 29, 2020
(Expressed in U.S. Dollars)
| 2. | Significant Accounting Policies (continued) | |
|
|
|
|
|
| (q) | Recent Accounting Pronouncements (continued) |
|
|
|
|
|
|
| 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 |
|
|
| As at February 28, 2021 $ |
|
| As at February 29, 2020 $ |
| ||
|
|
|
|
|
|
|
| ||
| Computer equipment |
|
| 39,782 |
|
|
| 37,786 |
|
| Furniture and equipment |
|
| 40,532 |
|
|
| 36,651 |
|
|
|
|
|
|
|
|
|
|
|
| Total |
|
| 80,314 |
|
|
| 74,437 |
|
| Less: accumulated depreciation |
|
| (64,902 | ) |
|
| (56,014 | ) |
|
|
|
|
|
|
|
|
|
|
| Net carrying value |
|
| 15,412 |
|
|
| 18,423 |
|
| 4. | Leases |
|
|
|
| On September 1, 2019, the Company entered into an agreement to extend its premises lease term expiry date from December 31, 2019 to December 31, 2020. The modification did not grant an additional right of use to the Company. Effective September 1, 2019, the Company reassessed the classification of the lease and measured the lease liability and ROU asset on the basis of the 16 month remaining lease term, 16 remaining payments, and its incremental borrowing rate of 27.5%. On January 1, 2021, due to the current covid-19 situation, the Company decided to move to a month-to-month lease agreement and not to recognize ROU assets or lease liability. |
|
|
| 2021 $ |
|
| 2020 $ |
| ||
|
|
|
|
|
|
|
| ||
| Components of lease expense were as follows: |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
| ||
| Operating lease cost |
|
| – |
|
|
| 26,864 |
|
|
|
|
|
|
|
|
|
|
|
| Supplemental cash flow information related to leases was as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating cash flows from operating leases |
|
| – |
|
|
| 6,813 |
|
|
|
|
|
|
|
|
|
|
|
| Right-of-use asset obtained in exchange for lease obligation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating leases |
|
| – |
|
|
| 59,189 |
|
|
|
|
|
|
|
|
|
|
|
| Supplemental balance sheet information related to leases was as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating Leases |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating lease right-of-use assets |
|
| – |
|
|
| 39,138 |
|
|
|
|
|
|
|
|
|
|
|
| Operating lease liabilities |
|
| – |
|
|
| 39,138 |
|
|
|
|
|
|
|
|
|
|
|
| Maturities of lease liabilities are as follows: |
|
|
|
|
|
|
|
|
| Year Ending February 28, |
|
|
|
|
| Operating Leases |
| |
|
|
|
|
|
|
|
|
|
|
| 2021 |
|
| – |
|
|
| 44,773 |
|
|
|
|
|
|
|
|
|
|
|
| Total lease payments |
|
| – |
|
|
| 44,773 |
|
| Less imputed interest |
|
| – |
|
|
| (5,162 | ) |
|
|
|
|
|
|
|
|
|
|
| Total |
|
| – |
|
|
| 39,611 |
|
| F-11 |
| Table of Contents |
FLOOIDCX CORP.
Notes to the Consolidated Financial Statements
Years Ended February 28, 2021 and February 29, 2020
(Expressed in U.S. Dollars)
| 5. | Loans Payable | |
|
|
|
|
|
| (a) | As at February 28, 2021, the Company owed $2,235,893 (February 29, 2020 – $2,112,229) which is non-interest bearing, unsecured, and due on demand. |
|
|
|
|
|
| (b) | As at February 28, 2021, the Company owed $442,802 (February 29, 2020 – $438,417) which is unsecured, non-interest bearing, unsecured, and due on demand. |
|
|
|
|
|
| (c) | As at February 28, 2021, the Company owed $118,245 (February 29, 2020 - $nil) 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, 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. Refer to Note 7. |
|
|
|
|
|
| (d) | As at February 28, 2021, the Company owed $197,075 (February 29, 2020 - $nil) 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. Refer to Note 7(c). |
|
|
|
|
|
| (e) | As at February 28, 2021, the Company owed $94,596 (February 29, 2020 - $nil) under a loan agreement dated December 1, 2020. The loan is unsecured, non-interest bearing, unsecured, and due on demand. |
|
|
|
|
|
| (f) | As at February 28, 2021, the Company owed $23,649 (February 29, 2020 - $nil) under a loan agreement dated December 1, 2020 which is unsecured, bears interest at 5% per annum, and has 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. The new interest is accrued till final repayment and is based on the principal amount outstanding. |
|
|
|
|
|
| (g) | As at February 28, 2021, the Company owed $31,532 (February 29, 2020 - $nil) 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. |
| 6. | Related Party Transactions | |
|
|
|
|
|
| (a) | As at February 28, 2021, the Company owed $930,020 (February 29, 2020 – $725,547) to the President of the Company which is unsecured, non-interest bearing, and due on demand. |
|
|
|
|
|
| (b) | During the year ended February 28, 2021, the Company incurred $180,000 (February 29, 2020 – $181,032) in research and development fees to the President of the Company. |
|
|
|
|
|
| (c) | As at February 28, 2021, the Company owed $28,028 (February 29, 2020 - $4,772) to the Chief Operating Officer (“COO”) of the Company. The amount owing is included in accounts payable and accrued liabilities. During the year ended February 28, 2021, the Company incurred $37,429 (February 29, 2020 – $38,108) in research and development fees to the COO of the Company. |
|
|
|
|
|
| (d) | During the year ended February 28, 2021, the Company incurred $22,500 (February 29, 2020 - $23,383) in administrative fees included in general and administrative to the office manager who is also the spouse of the President of the Company. |
|
|
|
|
|
| (e) | During the year ended February 28, 2021, the Company recognized stock-based compensation of $578,979 (February 29, 2020 - $1,675,955) to the President, spouse of the President, and COO of the Company. |
|
|
|
|
|
| (f) | As at February 28, 2021, the Company owed $15,200 (February 29, 2020 - $nil) under loan agreements dated August 13, 2020 and February 24, 2021 which are unsecured, bear interest at 5% per annum, and has maturity dates of February 13, 2021 and August 24, 2021 respectively. The interest rate increases to 12% per annum on non-repayment of the principal amount outstanding and interest thereon by the due date. The new interest is accrued till final repayment and is based on the principal amount outstanding. The loan agreements are with the spouse of the President of the Company. |
| F-12 |
| Table of Contents |
FLOOIDCX CORP.
Notes to the Consolidated Financial Statements
Years Ended February 28, 2021 and February 29, 2020
(Expressed in U.S. Dollars)
| 7. | Common Stock | |
|
|
| |
|
| Common stock issued during the year ended February 28, 2021:
As explained in Note 1 to the consolidated financial statements, on November 23, 2020, the Board of Directors and stockholders of the Company approved a 1:85 Reverse split of its Common Stock with shares rounded up to the nearest whole number. The Reverse split solely effected the issued and outstanding Common Stock and did not have any effect on the Authorized Common Stock. As a result of the Reverse split, the issued and outstanding Common Stock of the Company decreased from 167,928,919 shares prior to the Reverse split to 1,976,218 shares following the Reverse split and $161,520 was reclassified from Common Stock and Common Stock issuable to Additional Paid-In Capital. | |
|
|
|
|
|
| (a) | On March 1, 2020, the Company issued 3,651 shares of common stock with a fair value of $9,308 to the COO of the Company for past services. |
|
|
|
|
|
| (b) | On May 31, 2020, the Company issued 5,926 shares of common stock with a fair value of $9,067 to the COO of the Company for past services. The fair value of common stock was determined based on the end of day trading price of the Company on the date of authorization. |
|
|
|
|
|
| (c) | On June 17, 2020, the Company issued 5,882 shares of common stock with a fair value of $24,500 to a third party under the terms of a loan agreement with the third party. The fair value of common stock was determined based on the end of day trading price of the Company on the date of issuance. Refer to Note 5(c). |
|
|
|
|
|
| (d) | On August 31, 2020, the Company issued 5,666 shares of common stock with a fair value of $9,584 to the COO of the Company for past services. The fair value of common stock was determined based on the end of day trading price of the Company on the date of authorization. |
|
|
|
|
|
| (e) | On October 5, 2020, the Company issued 17,647 shares of common stock with a fair value of $25,500 in lieu of any interest and late payment penalties for the loan payable described in Note 5(d). The fair value of common stock was determined based on the end of day trading price of the Company on the date of authorization. |
|
|
|
|
|
| (f) | On October 5, 2020, the Company issued 17,647 shares of common stock with a fair value of $25,500 to a third party to settle accrued interest and late penalties owing for the loan payable described in Note 5(c). The fair value of common stock was determined based on the end of day trading price of the Company on the date of authorization. |
|
|
|
|
|
| (g) | On November 30, 2020, the Company authorized the issuance of 11,343 shares of common stock with a fair value of $9,641 to the COO of the Company for past services. The fair value of common stock was determined based on the end of day trading price of the Company on the date of authorization. As at February 28, 2021, these shares remain to be issued. |
|
|
|
|
|
| (h) | On February 28, 2021, the Company authorized the issuance of 6,570 shares of common stock with a fair value of $9,856 to the COO of the Company for past services. The fair value of common stock was determined based on the end of day trading price of the Company on the date of authorization. As at February 28, 2021, these shares remain to be issued. |
|
|
|
|
|
| Common stock issued during the year ended February 29, 2020: | |
|
| (i) | On May 17, 2019, the Company issued the 117,647 shares of common stock pursuant to the Resolution 1 Agreement. |
|
|
|
|
|
| (j) | During the year ended February 29, 2020, the Company issued 123,883 shares of common stock at $4.25 per share for proceeds of $526,500. |
|
|
|
|
|
| (k) | On July 25, 2019, the Company issued 2,941 shares of common stock at a price of $17.00 per share for proceeds of $50,000. |
|
|
|
|
|
| (l) | On October 11, 2019, the Company issued 29,412 shares of common stock with a fair value of $172,500 for financial advisory and investment bank services to be provided. |
|
|
|
|
|
| (m) | On November 4, 2019, the Company issued 17,647 shares of common stock with a fair value of $96,000 to settle a loan payable $75,000, resulting in a loss of $21,000. The fair value of the common stock was determined based on the closing price of the Company’s common stock on the date of issuance. |
|
|
|
|
|
| (n) | On November 4, 2019, the Company issued 23,529 shares of common stock with a fair value of $128,000 to settle a loan payable of $100,000, resulting in a loss of $28,000. The fair value of the common stock was determined based on the closing price of the Company’s common stock on the date of issuance. |
| F-13 |
| Table of Contents |
FLOOIDCX CORP.
Notes to the Consolidated Financial Statements
Years Ended February 28, 2021 and February 29, 2020
(Expressed in U.S. Dollars)
| 8. | Preferred Stock |
|
|
|
|
| The preferred stock contains certain rights and preference as detailed below: |
|
| · | In the event of acquisition of the Company, the preferred stockholder to receive 20% of the aggregate valuation of such merger; |
|
| · | The holder can convert each share of preferred stock into 100 shares of common stock; and |
|
| · | Each holder of preferred stock shall be entitled to cast 200 votes. |
| 9. | Stock Options |
|
|
|
|
| The following table summarizes the continuity of stock options: |
|
|
| Number of options |
|
| Weighted average exercise price $ |
|
| Aggregate intrinsic value $ |
| |||
|
|
|
|
|
|
|
|
|
|
| |||
| Balance, February 28, 2019 |
|
| 67,135 |
|
|
| 17.00 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Granted |
|
| 147,645 |
|
|
| 17.00 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Balance, February 29, 2020 |
|
| 214,780 |
|
|
| 17.00 |
|
|
| – |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Granted |
|
| 73,529 |
|
|
|
|
|
|
|
|
|
| Cancelled |
|
| (4,941 | ) |
|
| 17.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance, February 28, 2021 |
|
| 283,368 |
|
|
| 17.00 |
|
|
| – |
|
|
| Additional information regarding stock options outstanding as at February 28, 2021 is as follows: |
|
|
|
| Outstanding |
|
| Exercisable |
| |||||||||||||||
| Range of exercise prices $ |
|
| Number of shares |
|
| Weighted average remaining contractual life (years) |
|
| Weighted average exercise price $ |
|
| Number of shares |
|
| Weighted average exercise price $ |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
| 17.00 |
|
|
| 283,368 |
|
|
| 4.11 |
|
|
| 17.00 |
|
|
| 245,132 |
|
|
| 17.00 |
|
|
| The fair value of stock options granted was estimated using the Black-Scholes option pricing model assuming no expected dividends or forfeitures and the following weighted average assumptions: |
|
|
| 2021 |
|
| 2020 |
| ||
|
|
|
|
|
|
|
| ||
| Risk-free interest rate |
|
| 0.41 | % |
|
| 2.12 | % |
| Expected life (in years) |
|
| 5 |
|
|
| 5 |
|
| Expected volatility |
|
| 276 | % |
|
| 245 | % |
|
| The fair value of stock options recognized during the year ended February 28, 2021 was $578,979 (February 29, 2020 - $1,666,647), which was recorded as additional paid-in capital and charged to operations. The weighted average fair value of stock options granted during the year ended February 28, 2021 was $1.49 (February 29, 2020 – $17.00) per option. |
| F-14 |
| Table of Contents |
FLOOIDCX CORP.
Notes to the Consolidated Financial Statements
Years Ended February 28, 2021 and February 29, 2020
(Expressed in U.S. Dollars)
| 10. | Commitments | |
|
|
|
|
|
| (a) | On October 7, 2019, the Company entered into an agreement with a company who is to provide general financial advisory and investment banking services to the Company. The Company is to pay this company $5,000 per month for a period of six months. In addition, The Company is to issue 2,500,000 shares of common of stock upon execution of the agreement (issued) and 2,500,000 shares of common stock upon an uplisting of the Company’s common stock to a national exchange. For any financing, the Company will pay this company a commission of 8% of financing raised, a cash fee for unallocated expenses of 1% of the amount of financing raised, and issue agent’s warrants equal to 8% of the number of shares of common stock underlying the securities issued in the financing. |
|
|
|
|
|
| On November 20, 2020, the Company entered into a settlement and release agreement with the consultant. All outstanding fees owing to the consultant have been waived and the consultant is to return 2,000,000 shares of common stock. Refer to Note 12 (b). | |
|
|
|
|
|
| (b) | On December 1, 2019, the Company entered into a one-year agreement with the COO of the Company whereby the Company has agreed to pay the COO annual compensation of Cdn$100,000 and grant 17,647 stock options exercisable at $17.00 per share of common stock at the end of every quarter. The annual compensation is to be paid as follows: Cdn$50,000 payable in cash broken down into monthly payments and Cdn$50,000 payable in equivalent shares of common stock of the Company on the last business day of each quarter. As at February 28, 2021, the agreement has not been terminated and so is deemed to have renewed for a further one year period. |
|
|
|
|
| 11. | Income Taxes | |
|
|
| |
|
| The following table reconciles the income tax benefit at the statutory rates to income tax benefit at the Company’s effective tax rate. | |
|
|
| 2021 $ |
|
| 2020 $ |
| ||
|
|
|
|
|
|
|
| ||
| Net loss before taxes |
|
| (1,475,030 | ) |
|
| (2,805,835 | ) |
| Statutory tax rate |
|
| 21 | % |
|
| 21 | % |
|
|
|
|
|
|
|
|
|
|
| Expected income tax recovery |
|
| (309,756 | ) |
|
| (589,225 | ) |
| Permanent differences and other |
|
| 158,660 |
|
|
| 349,996 |
|
| Change in valuation allowance |
|
| 151,096 |
|
|
| 239,229 |
|
|
|
|
|
|
|
|
|
|
|
| Income tax provision |
|
| – |
|
|
| – |
|
|
| Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting processes. Deferred income tax assets and liabilities at February 28, 2021 and February 29, 2020 are comprised of the following: |
|
|
| 2021 $ |
|
| 2020 $ |
| ||
|
|
|
|
|
|
|
| ||
| Net operating losses carried forward |
|
| 2,402,985 |
|
|
| 2,251,889 |
|
| Valuation allowance |
|
| (2,402,985 | ) |
|
| (2,251,889 | ) |
|
|
|
|
|
|
|
|
|
|
| Net deferred tax asset |
|
| – |
|
|
| – |
|
|
| The 2017 Act reduces the corporate tax rate from 34% to 21% for tax years beginning after December 31, 2017. For net operating losses arising after December 31, 2017, the 2017 Act limits a taxpayer’s ability to utilize net operating losses carryforwards to 80% of taxable income. In addition, net operating losses arising after 2017 can be carried forward indefinitely, but carryback is generally prohibited. Net operating losses generated in tax years beginning before January 1, 2018 will not be subject to the taxable income limitation. The 2017 Act would generally eliminate the carryback of all net operating losses arising in a tax year ending after 2017 and instead would permit all such net operating losses to be carried forward indefinitely.
As at February 28, 2021, the Company is in arrears on filing its statutory corporate income tax returns and the amounts presented above are based on estimates. The actual losses available could differ from these estimates. |
| 12. | Subsequent Events | |
|
|
|
|
|
| (a) | On March 2, 2021, the Company entered into a loan payable agreement for $53,000 with the spouse of the President of the Company. The loan is unsecured, bears interest at 5% per annum, and due on September 2, 2021. |
|
|
|
|
|
| (b) | On May 10, 2021, the Company cancelled 23,529 common shares pursuant to a settlement and release agreement signed on November 20, 2020. Refer to Note 10(a). |
| F-15 |
| Table of Contents |
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Disclosure of the Company’s change in its independent registered public accounting firm was previously disclosed in the Annual Report on Form 10-K for the fiscal year ended February 28, 2019.
ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
We have carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer/Principal Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of February 29, 2021. Based on such evaluation, we have concluded that, as of such date, our disclosure controls and procedures were not effective to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in applicable SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer/Principal Financial Officer, as appropriate, to allow timely discussions regarding required disclosure.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining internal control over financial reporting for our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over our financial reporting includes those policies and procedures that:
| (1) | pertain to the maintenance of records that in reasonable detail accurately and fairy reflect our transactions. |
|
|
|
| (2) | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorization of our management and directors; and |
|
|
|
| (3) | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements. |
All internal control systems, no matter how well designed, have inherent limitations, including the possibility of human error or circumvention through collusion of improper overriding of controls. Therefore, even those internal control systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation. Further, because of changes in conditions, the effectiveness of internal control may vary over time.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in there being a more than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.
Under the supervision and with the participation of our chief executive officer (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer), management conducted an evaluation of the effectiveness of our internal control over financial reporting, as of February 28, 2021, based on the framework set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our evaluation under this framework, management concluded that our internal control over financial reporting was not effective as of the evaluation date due to the factors stated below:
| 31 |
| Table of Contents |
Management assessed the effectiveness of our company’s internal control over financial reporting as of the evaluation date and identified the following material weaknesses:
|
| o | Lack of proper segregation of duties due to limited personnel; |
|
| o | Lack of a formal review process that includes multiple levels of review from adequate personnel with requisite expertise. |
|
| o | Lack of written policies and procedures for accounting and financial reporting. |
We do not have a functioning audit committee or sufficient outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures.
Management is committed to improving its internal controls and will (1) continue to use third party specialists to address shortfalls in staffing and to assist the Company with accounting and finance responsibilities, (2) increase the frequency of independent reconciliations of significant accounts which will mitigate the lack of segregation of duties until there are sufficient personnel and (3) may consider appointing outside directors and audit committee members in the future.
Management, including our chief executive officer (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer), has discussed the material weakness noted above with our independent registered public accounting firm. Due to the nature of this material weakness, there is a more than remote likelihood that misstatements which could be material to the annual or interim financial statements could occur that would not be prevented or detected.
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal controls over financial reporting that occurred during the year ended February 28, 2021 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.
There are no further disclosures.
| 32 |
| Table of Contents |
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
DIRECTORS AND EXECUTIVE OFFICERS
Our directors, executive officers and key employees, and their ages as of the date of this report, are listed below. Our directors hold office for one-year terms or until their successors have been elected and qualified.
| Name |
| Position |
| Age |
|
|
|
|
|
|
| Richard Hue |
| President/Chief Executive Officer, Secretary, Treasurer/Chief Financial Officer and a Director |
| 58 |
|
|
|
|
|
|
| Mark Vange |
| Chief Technical Officer and a Director |
| 49 |
The biographies of the directors and officers are set forth below as follows:
Richard Hue. Mr. Hue has been the President/Chief Executive Officer, Secretary, Treasurer/Chief Financial Officer and a director of the Company since October 2016. He has worked with companies in the service and technology industries. He is an experienced, passionate entrepreneur and self-professed, “startup junkie”. Mr. Hue’s experience working with companies in the service and technology sectors has offered founders experience and contacts in numerous fields. As lead investment manager of a privately managed family fund since September 1997, Mr. Hue also oversees many investments from real estate to technology. Mr. Hue began his career as an investment banker with one of Wall Street’s major investment banking institutions in 1988, providing him with many years of management and investment banking experience. His duties and responsibilities included: (i) researching and analyzing solutions for diversification and enhancement of portfolios; (ii) monitoring finances by analyzing cash flow and other financial statements; (iii) preparing valuation analyses; and (iv) analyzing data pertaining to debt and credit opportunities for various companies. And, as the former president of RT Equity Inc. from February 1995 to July 1998, a boutique merchant banking firm that was eventually acquired by a financial institution, Mr. Hue was responsible for overseeing the development of startups, restructuring business operations and expansions of private and public companies, many in the technology and biotech sector. In July 1999, Mr. Hue became the CEO of LaserMedia Communications Corp. which was publicly traded on both the US & Canadian Exchanges. Mr. Hue lead its ActFit brand to be one of the top selling products at Comp USA & Best Buy and AcitFit.com as one of the top fitness sites during the early internet days. Mr. Hue continues to successfully apply his investment and management skills to small and mid-cap companies both in North America and internationally.
Mark Vange. Mr. Vange has been the Chief Technical Officer of the Company since May 2013, as well as a technologist and entrepreneur for over two decades. Mr. Vange was chief technology officer of VR1 Inc. from 1995 to 2001, where he led the development of network technology to facilitate massively multiplayer online games. During 2004, Mr. Vange founded Mobile Post Production for rapid porting of applications between various mobile telephony platforms. He was also the chief technology officer of Electronic Arts, one of the World’s largest video game companies, from April 2011 to August 2012. Mr. Vange has formed and exited several technology driven companies and is also a successful advisor to companies and investment funds for technology that enables community building and business operations.
FAMILY RELATIONSHIPS
There are no family relationships among our directors or officers.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
During the past five years, none of our directors, executive officers or persons that may be deemed promoters is or have been involved in any legal proceeding concerning: (i) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (ii) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (iii) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction permanently or temporarily enjoining, barring, suspending or otherwise limiting involvement in any type of business, securities or banking activity; or (iv) being found by a court, the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law (and the judgment has not been reversed, suspended or vacated).
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
The Company is not aware of any person who, at any time during the fiscal year ended February 28, 2021, was a director, officer, beneficial owner of more than ten percent of the Company’s common stock, that failed to file on a timely basis reports required by Section 16(a) of the Exchange Act during the most recent fiscal year.
| 33 |
| Table of Contents |
CORPORATE GOVERNANCE MATTERS
Audit Committee
As of the date of this Annual Report, we do not have an audit committee. We intend to establish an audit committee of the Board of Directors, which will consist of independent directors, of which at least one director will qualify as a qualified financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K. The audit committee’s duties would be to recommend to the Board of Directors the engagement of independent auditors to audit our financial statements and to review its accounting and auditing principles. The audit committee would review the scope, timing and fees for the annual audit and the results of audit examinations performed by the internal auditors and independent public accountants, including their recommendations to improve the system of accounting and internal controls. The audit committee would at all times be composed exclusively of directors who are, in the opinion of the Board of Directors, free from any relationship which would interfere with the exercise of independent judgment as a committee member and who possess an understanding of financial statements and generally accepted accounting principles.
Board Independence
As of the date of this Annual Report, we do not have any independent directors.
Audit Committee Financial Expert. Our board of directors has determined that we do not have an audit committee financial expert within the meaning of Item 407(d)(5) of Regulation S-K. In general, an “audit committee financial expert” is an individual member of the audit committee who (a) understands generally accepted accounting principles and financial statements, (b) is able to assess the general application of such principles in connection with accounting for estimates, accruals and reserves, (c) has experience preparing, auditing, analyzing or evaluating financial statements comparable to the breadth and complexity to our financial statements, (d) understands internal controls over financial reporting and (e) understands audit committee functions.
Code of Ethics
We have not adopted a code of ethics for our executive officers, directors and employees. However, our management intends to promote honest and ethical conduct, full and fair disclosure in our reports to the SEC, and compliance with applicable governmental laws and regulations.
Nominating Committee
We have not yet established a nominating committee. Our board of directors, sitting as a board, performs the role of a nominating committee. We are not currently subject to any law, rule or regulation requiring that we establish a nominating committee.
Compensation Committee. We intend to establish a compensation committee of the Board of Directors. The compensation committee would review and approve our salary and benefits policies, including compensation of executive officers. The compensation committee would also administer any stock option plans and recommend and approve grants of stock options under such plans.
ITEM 11. EXECUTIVE COMPENSATION.
During fiscal years ended February 28, 2021 and February 29, 2020, our officers and directors earned compensation as per below.
SUMMARY COMPENSATION TABLE
The following table sets forth information about the remuneration of our principal executive officer for services rendered during our fiscal years ended February 28, 2021 and February 29, 2020. There were no other executive officers that had total compensation of $100,000 or more for our last completed full fiscal year. Certain tables and columns have been omitted as no information was required to be disclosed under those tables or columns.
| 34 |
| Table of Contents |
SUMMARY COMPENSATION TABLE
| Name and principal position |
| Fiscal year |
| Salary ($) |
| Stock awards ($) |
| Option Awards ($) |
|
| All other compensation ($) |
|
| Total ($) |
| |||
| Richard Hue (Chief Executive Officer, President, |
| 2021 |
| -0- |
| -0- |
| -0- | (2) |
|
| 180,000 | (3) |
|
| 180,000 |
| |
| Treasurer/Chief Financial Officer)(1) |
| 2020 |
| -0- |
| -0- |
|
| 664,169 | (2) |
|
| 181,032 | (3) |
|
| 845,201 |
|
___________
| (1) | Mr. Hue has served in these capacities since October 2016. |
| (2) | The fair value was determined using the Black-Scholes option pricing model with the following assumptions: volatility at 245%; risk free interest rate of 2.12%; expected life of 5 years; and expected dividend rate of 0%. |
| (3) | Of the amounts due and owing to Mr. Hue as executive compensation, no amounts have been paid in cash and the entire amounts have been accrued as due and payable. |
The following table sets forth information with respect to options awards for our principal executive officer:
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| Name |
| Number of securities underlying unexercised options (#) exercisable |
|
| Number of securities underlying unexercised options (#) unexercisable |
| Equity incentive plan awards: Number of securities underlying unexercised unearned options (#) |
| Option exercise price ($) |
|
| Option expiration date | |||
| Richard Hue (1) |
|
| 23,529 |
|
| -0- |
| -0- |
|
| 17.00 |
|
| 08/16/2022 | |
|
|
|
| 52,941 |
|
| -0- |
| -0- |
|
| 17.00 |
|
| 05/30/2026 | |
_________
| (1) | Does not include options to purchase 32,506 shares of common stock granted to Mr. Hue’s wife, who has served as our office manager and administrative officer. |
In addition to the stock options shown in the above table, Mr. Hue was granted 1,000,000 shares of Series A Preferred Stock on April 20, 2017, which he still owns, based upon recognition of the outstanding services, leadership and innovative business operational strategies provided by Mr. Hue and his continuous dedication and loyalty to us, including undertaking of the development of the Gripevine technology. The shares of Series A Preferred Stock carry certain rights and preferences, including voting rights consisting of 2.35 votes for each one share of Series A Preferred Stock. The shares of Series A Preferred Stock are convertible into shares of common stock on a 1-for-1.18 basis, i.e. one share of Series A Preferred Stock for 1.18 shares of common stock.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS
None of our executive officers or directors are parties to any employment contracts.
DIRECTOR COMPENSATION
We currently do not compensate our directors for acting as such. We also reimburse our directors for reasonable expenses incurred in connection with their service as directors.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our officers and directors are indemnified as provided by the Nevada Revised Statutes (the “NRS”) and our bylaws. Under Nevada law, a corporation may indemnify its directors, officers, employees and agents under certain circumstances, including indemnification of such persons against liability under the Securities Act of 1933, as amended. In addition, a corporation may purchase or maintain insurance on behalf of its directors, officers, employees or agents for any liability incurred by him in such capacity, whether or not the corporation has the authority to indemnify such person.
Our bylaws provide that we will indemnify our directors and officers to the fullest extent not prohibited by Nevada law; provided, however, that we may modify the extent of such indemnification by individual contracts with our directors and officers; and, provided, further, that we shall not be required to indemnify any director or officer in connection with any proceeding (or part thereof) initiated by such person unless:
|
| (1) | such indemnification is expressly required to be made by law; |
|
| (2) | the proceeding was authorized by our Board of Directors; |
|
| (3) | such indemnification is provided by us, in our sole discretion, pursuant to the powers vested us under Nevada law; or |
|
| (4) | such indemnification is required to be made pursuant to the bylaws. |
| 35 |
| Table of Contents |
Our bylaws provide that we will advance all expenses incurred to any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was our director or officer, or is or was serving at our request as a director or executive officer of another company, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request. This advanced of expenses is to be made upon receipt of an undertaking by or on behalf of such person to repay said amounts should it be ultimately determined that the person was not entitled to be indemnified under our bylaws or otherwise.
Our bylaws also provide that no advance shall be made by us to any officer in any action, suit or proceeding, whether civil, criminal, administrative or investigative, if a determination is reasonably and promptly made: (a) by the board of directors by a majority vote of a quorum consisting of directors who were not parties to the proceeding; or (b) if such quorum is not obtainable, or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, that the facts known to the decision- making party at the time such determination is made demonstrate clearly and convincingly that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to our best interests.
The following tables set forth information as of May 10, 2021 regarding the beneficial ownership of our common stock: (a) each stockholder who is known by us to own beneficially in excess of 5% of our outstanding common stock; (b) each director known to hold common or preferred stock; (c) each of our executive officers; and (d) the executive officers and directors as a group. Except as otherwise indicated, all persons listed below have (i) sole voting power and investment power with respect to their shares of stock, except to the extent that authority is shared by spouses under applicable law, and (ii) record and beneficial ownership with respect to their shares of stock. The percentage of beneficial ownership of common stock is based upon 1,952,689 shares of common stock and 1,000,000 shares of Series A preferred stock issued and outstanding as of May 10, 2021.
| NAME AND ADDRESS OF BENEFICIAL OWNER |
| TITLE OF CLASS |
| NUMBER OF SHARES BENEFICIALLY OWNED (1) |
|
| PERCENT OF SHARES BENEFICIALLY OWNED (1) |
| ||
|
|
|
|
|
|
|
|
|
| ||
| Richard Hue |
| Common |
|
| 823,855 | (2) |
|
| 40.0 | % |
| 1282A Cornwall Road |
| Preferred |
|
| 1,000,000 |
|
|
| 100 | % |
| Oakville, Ontario Canada L6J 7W5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Mark Vange |
| Common |
|
| 15,883 | (3) |
|
| 0.8 | % |
|
|
| Preferred |
| -0- |
|
|
| 0 | % | |
|
|
|
|
|
|
|
|
|
|
|
|
| All executive officers and |
| Common |
|
| 839,738 | (4) |
|
| 40.5 | % |
| directors as a group (2 persons) |
| Preferred |
|
| 1,000,000 |
|
|
| 100 | % |
__________
| (1) | Under Rule 13d-3, A person is also deemed to be the beneficial owner of a security if that person has the right to acquire beneficial ownership of that security within 60 days of May 10, 2021 through the exercise of options or warrants, vesting of restricted stock, or through the conversion of another security. For purposes of calculating each person’s or group’s percentage ownership, shares of our common stock issuable upon the exercise of options or warrants, vesting of restricted stock or through conversion of another security within 60 days of May 10, 2021 are included as outstanding and beneficially owned for that person or group, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person or group. |
| (2) | Includes (a) 20,761 shares held of record by his wife and Office Manager for the Company, and (b)108,976 shares of common stock issuable upon exercise of immediately exercisable stock options, of which 76,470 options are held by him and 32,506 options are held by his wife and Office Manager of the Company. Mr. Hue’s wife and other independent contractors and employees of the Company have been granted stock options in lieu of compensation from time to time. |
| (3) | Includes 10,000 shares of common stock issuable upon exercise of immediately exercisable stock options. |
| (4) | Includes 118,976 shares of common stock issuable upon exercise of immediately exercisable stock options. |
| 36 |
| Table of Contents |
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
We do not have a specific policy or procedure for the review, approval, or ratification of any transaction involving related persons. We historically have sought and obtained funding from officers, directors, and family members as these categories of persons are familiar with our management and often provide better terms and conditions than we can obtain from unassociated sources.
Except as set forth below, there were no transactions with any related persons (as that term is defined in Item 404 in Regulation S-K) during the last two completed fiscal years, or any currently proposed transaction, in which we were or were to be a participant and the amount involved which the amount exceeds the lesser of $120,000 or one percent of the average of our assets at year-end for the last two completed fiscal years, and in which any related person had a direct or indirect material interest.
LOANS PAYABLE
Loans payable represents loans to meet the working capital requirements of the Company. These loans are interest free, unsecured and are repayable on demand. These loans payable as at February 28, 2021 and February 29, 2020 are $3,143,792 and $2,550,646, respectively.
As of February 28, 2021, the Company owed $197,075 under a loan agreement dated October 5, 2020. The loan was due November 25, 2020 and secured by 588,235 shares of common stock of the Company owned by the President of the Company.
DUE TO RELATED PARTIES
At February 28, 2021 and February 29, 2020, balances due to the President of the Company and spouse of the President were $945,220 and $725,547, respectively. These balances are interest free, unsecured and are repayable on demand. The balances due were incurred mainly in connection with the services provided for the development of an online complaint resolution platform.
During the years ended February 28, 2021, the Company incurred research and development fees of $180,000 and $37,429, to the President and Chief Operating Officer of the Company, respectively. During the prior fiscal year, the amounts incurred were $181,032 and $38,108, respectively.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
The following table shows the fees paid or accrued for the audit and other services provided by our principal accountant.
|
|
| 2021 |
|
| 2020 |
| ||
| Audit fees |
| $ | 20,435 |
|
| $ | 16,180 |
|
| Audit related fees |
| -0- |
|
| -0- |
| ||
| Tax fees |
| -0- |
|
| -0- |
| ||
| All other fees |
| -0- |
|
| -0- |
| ||
| 37 |
| Table of Contents |
Audit Fees
Audit fees represent the professional services rendered for the audit of our annual financial statements and the review of our financial statements included in quarterly reports, along with services normally provided by the accountant in connection with statutory and regulatory filings or engagements.
Audit Related Fees
Audit-related fees represent professional services rendered for assurance and related services by the principal accountant that are reasonably related to the performance of the audit or review of our financial statements that are not reported under audit fees.
Tax Fees
Tax fees represent professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning.
All Other Fees
All other fees represent fees billed for products and services provided by the principal accountant, other than the services reported for the other categories.
| 38 |
| Table of Contents |
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
The following exhibits are filed as part of this Form 10-K:
| Exhibit Number |
| Description |
|
|
|
|
|
| ||
|
|
|
|
|
| ||
|
|
|
|
|
| ||
|
|
|
|
|
| ||
|
|
|
|
|
| ||
|
|
|
|
|
| ||
|
|
|
|
|
| ||
|
|
|
|
|
| ||
|
|
|
|
|
| ||
|
|
|
|
|
| ||
|
|
|
|
|
| ||
|
|
|
|
|
| ||
|
|
|
|
| 101** |
| Interactive data files pursuant to Rule 405 of Regulation S-T. |
____________
| ** | 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. |
None.
| 39 |
| 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 report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
| flooidCX Corp. |
| |
|
|
|
|
|
| Date: June 16, 2021 | By: | /s/ Richard Hue |
|
|
|
| Richard Hue |
|
|
|
| Chief Executive Officer and |
|
|
|
| Chief Financial Officer and Director |
|
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Each person whose signature appears below appoints Richard Hue as his or her attorney-in-fact, with full power of substitution and re-substitution, to sign any and all amendments to this report on Form 10-K of flooidCX Corp., and to file them, with all their exhibits and other related documents, with the Securities and Exchange Commission, ratifying and confirming all that their attorney-in-fact and agent or his or her substitute or substitutes may lawfully do or cause to be done by virtue of this appointment. In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Issuer and in the capacities and on the dates indicated:
| Name |
| Title |
| Date |
|
|
|
|
|
|
| /s/ Richard Hue |
| Director, Chief Executive Officer/Chief |
| June 16, 2021 |
| Richard Hue |
| Financial Officer |
|
|
|
|
|
|
|
|
| /s/ Mark Vange |
| Director |
| June 16, 2021 |
| Mark Vange |
|
|
|
|
| 40 |