The following discussion provides an analysis of the Company's financial
condition and results of operations and should be read in conjunction with the
Interim Consolidated Financial Statements and notes thereto included in Item 1
of Part I of this Quarterly Report on Form 10-Q and with the Company's Annual
Report on Form 10-K filed for the fiscal year ended February 28, 2021. The
discussion contains forward-looking statements that involve risks, uncertainties
and assumptions. Our actual results may differ materially from those anticipated
in these forward-looking statements as a result of many factors.
Overview
flooidCX Corp., formerly known as Gripevine, Inc. (the "Company"), was
incorporated under the name Baixo Relocation Services, Inc. in the state of
Nevada on January 7, 2014.
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"), pursuant to which MBE Exchange Agreement we acquired all
the technology and assets and assumed all liabilities of MBE, and MBE became our
wholly-owned subsidiary. In accordance with the terms and provisions of the MBE
Exchange Agreement, an aggregate of 5,248,626 (pre-reverse split) shares of our
restricted common stock were issued to the MBE Shareholders in exchange for
157,458,778 of the total issued and outstanding shares of MBE.
Effective March 18, 2019, we changed our name to flooidCX Corp. pursuant to
Certificate of Amendment to our Articles of Incorporation filed with the Nevada
Secretary of State. The name of the Company was changed as part of our
rebranding, which better reflects our new business direction into the customer
care and feedback solutions space - offering easy to adapt customer care and
feedback solutions to enterprises of all sizes.
On May 17, 2019, we entered into a Share Exchange Agreement (the "R1 Exchange
Agreement") with the stockholders of Resolution 1, Inc., a Delaware corporation
("R1"), to acquire all of the outstanding shares of R1 in exchange for
10,000,000 (pre-reverse split) restricted shares of our 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. Since the majority shareholders of the
Company and R1 are the same, this did not result in the change in control at the
ultimate parent or the controlling shareholder level, and was accounted for as a
common control transaction.
On January 27, 2021, the Company's common stock began trading on a 1-for-85
reverse stock split basis.
Our mission is to help businesses bring back the conversation with customers
with innovative, simple to use solutions that empower both the businesses and
customers to communicate and create positive outcomes. With the consummation of
the 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."
We offer unified communications and collaboration online CRM solutions -
GripeVine and Resolution1. 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.
Resolution1 functions as a cloud-based customer care and feedback workflow
management platform, where businesses can manage the entire logistics of
customer care, feedback or inquiries throughout their entire organizations.
Businesses can respond quickly and accurately to customers, while keeping track
of every customer interaction. The platform is designed to grow and scale, so
that businesses of all sizes, from small to medium-size enterprises (SMEs) to
large enterprises, can use this cloud-based customer care and feedback
management system
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Results of Operations
The following discussions are based on our unaudited interim consolidated
financial statements, including our wholly-owned subsidiaries. These discussions
summarize our unaudited interim consolidated financial statements for the
three-and six-month periods ended August 31, 2021, and should be read in
conjunction with the Company's audited consolidated financial statements for the
year ended February 28, 2021 and notes thereto included in the Form 10-K filed
with the SEC on June 16, 2021.
The following discussion contains forward-looking statements that reflect our
plans, estimates and beliefs. Our 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 Quarterly Report on Form 10-Q. The financial
statements are stated in United States Dollars and are prepared in accordance
with United States Generally Accepted Accounting Principles.
Three-Month Period Ended August 31, 2021 Compared to Three-Month Period Ended
August 31, 2020
Revenue. We generated revenues of $2,351 for the three months ended August 31,
2021, as compared to $11,250 for the comparable period in 2020.
Operating expenses: During the quarter ended August 31, 2021, we incurred
operating expenses in the amount of $131,823 compared to operating expenses
incurred during quarter ended August 31, 2020 of $397,362 (a decrease of
$265,539). Operating expenses include: (i) general and administrative of $33,863
(2020: $168,591); and (ii) research and development of $97,960 (2020: $228,771).
General and administrative expenses decreased by $134,728, due primarily to a
decrease in stock-based compensation for administrative staff. Research and
development expenses decreased by $130,811, due to a reduction in external
consultants and decrease in stock-based compensation to the President and
directors of the Company.
Net loss. The Company had a net loss of $131,646 or $0.07 per share for three
months ended August 31, 2021 compared to a net loss of $386,112 or $0.20 per
share for the three months ended August 31, 2020.
Six-Month Period Ended August 31, 2021 Compared to Six-Month Period Ended August
31, 2020
Revenue. We generated revenues of $12,673 for the six months ended August 31,
2021, as compared to $54,500 for the comparable period in 2020.
Operating expenses: During the six months ended August 31, 2021, we incurred
operating expenses in the amount of $420,917 compared to operating expenses
incurred during six months ended August 31, 2020 of $933,272 (a decrease of
$512,355). Operating expenses include: (i) general and administrative of
$161,031 (2020: $339,546); and (ii) research and development of $259,886 (2020:
$593,726). General and administrative expenses decreased by $178,515, due
primarily to a decrease in stock-based compensation for administrative staff.
Research and development expenses decreased by $333,840, due to a reduction in
external consultants and decrease in stock-based compensation to the President
and directors of the Company.
Net loss. The Company had a net loss of $412,024 or $0.21 per share for six
months ended August 31, 2021 compared to a net loss of $878,772 or $0.46 per
share for the six months ended August 31, 2020.
Liquidity and Capital Resources
As of August 31, 2021
As at August 31, 2021, our current assets were $14,310 and our current
liabilities were $4,681,267, which resulted in a working capital deficit of
$4,666,957 (February 28, 2021 - $4,355,400)..
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Cash Flows from Operating Activities
We have generated negative cash flows from operating activities. For the six
months ended August 31, 2021, net cash flows used in operating activities was
$172,384 compared to $208,537 for the six months ended August 31, 2020.
Cash Flows from Investing Activities
We did not use any cash in investing activities during the six months ended
August 31, 2021 (2020: $907).
Cash Flows from Financing Activities
Net cash flows provided from financing activities during the six month ended
August 31, 2021 was $154,081, which consisted of proceeds from loans from a
third party and a related party. During the six months ended August 31, 2020,
cash flows provided by financing activities was $191,859, which consisted of
$219,580 in proceeds from loans, offset by repayment of loans payable in the
amount of $27,721.
Off-Balance Sheet Arrangements
There were no off-balance sheet arrangements during the six months ended August
31, 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 August 31, 2021, we had a working capital deficit of $4,666,957 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.
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.
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Recent Accounting Pronouncements
As reflected in Note 2 of the Notes to the Interim Consolidated Financial
Statements, there have been recent accounting pronouncements or changes in
accounting pronouncements that impacted the six months ended August 31, 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.
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