UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

For the Quarterly Period Ended March 31, 2024

OR

0-55965

(Commission File Number)

Registrant’s telephone number, including area code: (855) 535-6643

Securities registered pursuant to Section 12(b) of the Act: None

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 small 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.

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 6, 2025, there were 49,166,697 shares of the registrant’s common stock outstanding.

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

TABLE OF CONTENTS

Cautionary Note Concerning Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements”. These forward-looking statements, including without limitation forward-looking statements made under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” involve risks and uncertainties. Any statements contained in this Quarterly Report that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements include, without limitation, statements as to our future operating results; plans for the marketing of our services; future economic conditions; the effect of our market and product development efforts; and expectations or plans relating to the implementation or realization of our strategic goals and future growth, including through potential future acquisitions. Forward-looking statements may include, among other things, statements relating to future sales, earnings, cash flow, results of operations, use of cash and other measures of financial performance, as well as statements relating to future dividend payments. Other forward-looking statements may be identified through the use of words such as “believes,” “anticipates,” “may,” “should,” “will,” “plans,” “projects,” “expects,” “expectations,” “estimates,” “predicts,” “targets,” “forecasts,” “strategy,” and other words of similar meaning in connection with the discussion of future operating or financial performance. These statements are based on current expectations, estimates and projections about the industries in which we operate, and the beliefs and assumptions made by management. Because forward-looking statements relate to the future, they are subject to inherent risks, uncertainties and changes in circumstances that are difficult to predict. Accordingly, the Company’s actual results may differ materially from those contemplated by the forward-looking statements. Investors, therefore, are cautioned against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS 

FLOOIDCX CORP

Condensed Consolidated Balance Sheets

(Expressed in U.S. dollars)

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

FLOOIDCX CORP

Condensed Consolidated Statement of Operations

(Expressed in U.S. dollars)

(Unaudited)

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

FLOOIDCX CORP

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(Expressed in U.S. dollars)

(Unaudited)

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

FLOOIDCX CORP

Condensed Consolidated Statements of Cash Flows

(Expressed in U.S. dollars)

(Unaudited)

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

FLOOIDCX CORP

Notes to the Financial Statements

Three Months Ended March 31, 2024 and 2023

(Expressed in U.S. dollars)

(Unaudited)

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

The following discussion provides an analysis of the Company’s financial condition and results of operations and should be read in conjunction with the Interim 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 December 31, 2023. 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

The Company

flooidCX Corp,/Quantum Energy Corporation (referred to herein as a “flooidCX”, “flooid”, “flooid/Quantum”, “Quantum”or the “Company”) is at the vanguard of revolutionizing 100% distributed direct electrical energy systems, owned by the consumer, with our leading exclusively licensed and patent pending technologies. As the worldwide exclusive licensee for Harvested and Thermal Electrical Energy Collection and Transmission (“EET”), Photon Lighting Systems, photonic and photovoltaic energy harvesting, thermal waste to energy conversion, the sole provider of Photon Engines, and leading-edge energy conditioning and storage systems, flooid/Quantum is setting new standards in energy efficiency and sustainability. flooid/Quantum’s Direct Energy Systems both conserve electrical energy and produce new available electrical energy capacity, from energy harvesting, conversion and storage. flooid/Quantum’s mission also extends to the recycling and processing of rare earth materials, including magnets, essential for use in nearly every electrical device requiring high-quality magnets and magnetic assemblies, further bolstering our commitment to innovative energy solutions.

Intellectual Property

flooid/Quantum vigorously pursues exclusive licenses and intellectual property protection for our innovative technologies, including exclusive licenses and patents for Photon Lighting Systems, Photovoltaic Systems, Photon Engines, as well as energy storage and distribution systems. Flooid/Quantum owns and develops trademarks and copywritten materials that secure our brand identity in the global market. Our commitment to research and development, and legal protection strategies ensure our technological advancements remain proprietary and competitive.

Products

flooid/Quantum’s proprietary EET technology is the patent pending ability to transmit harvested electrical energy through the open channels of any USB or ethernet cable from as low as 80 Watts to over several hundred Watts per channel. EET also follows low-voltage protocol in many installations, eliminating conduit, and also eliminating standardized electrical cable. This dramatically lowers both new and remodeling construction costs. In many installations, EET can completely replace 110-120 V outlets and related switches, wire, conduit, and panel costs, including AC circuit breakers and related equipment. The technology also affords superior remote control and remote monitoring.

A series of powerful electrical accessories has emerged from EET technology which includes a new series of electrical adapters, and connectors which replace high consumption inversion and conversion electrical devices. One specific example is the SAFEwatt ethernet power adapter that replaces a wide variety of electrical adapters that power laptop and desktop computers. A typical power adapter for even the simplest of laptops will consume anywhere from 140 to as much as 200 Watts of electrical energy, as that adapter is powered by a common 110 to 120 V AC wall plug. Replacing such adapters with a SAFEwatt adapter reduces that power consumption to 15 to 20 volts DC, and an average of 60 Watts, or about one third the power consumption of a typical computer adapter. The technology also applies to monitors, broadcast stations and computer servers. The Company estimates this product series will exceed 200 custom EET adapter devices for use in mobile phone chargers, laptop computers, desktop computers, desk lighting, computer servers, and a wide variety of other low-voltage direct current consumption devices, that currently are overpowered by common 110 to 120 V AC and 240-volt AC power sources.

Photon Lighting System- Our exclusive technology transforms existing and new lighting fixtures into energy harvesting power generators across a range of light sources, from LED to sodium vapor, catering to diverse applications in industrial, commercial, and residential settings. The Photonic energy harvesting systems work in both active, and ambient light, both indoor and outdoor.

Photovoltaic Systems- The Company’s unique photovoltaic harvesting systems are significantly lighter than today’s conventional solar systems. Some of the Company’s photovoltaic systems also offer self-cleaning, and protective options.

Thermal Energy Harvesting- The Company is leading the application of thermal (heat and cold wasted energy) to both heat to light and heat to electricity conversion. Energy harvesting at every source is sustainable and profitable.

Photon Engines- These engines exemplify efficiency, converting minimal input power (typically less than 12 volts DC) into stored mechanical energy, and then converts that stored energy into conditioned and clean electrical energy, (typically 48 volts DC), a hallmark of innovation in energy generation. Danzik’s Magnetic Propulsion discoveries allow a single low speed flywheel to multiply the speed of subsequent flywheels in the engine system, and then the alternator systems, which then rotate at high speeds of 500 to over 5,000 rpm. Magnetic Propulsion refers to the magnetic levitation, and increased speed of each flywheel, with zero contact, permanent magnet drives, that eliminate chains, conventional transmissions, belts, gears and all other physical drive connections.

Applications- The Company’s holistic Direct Energy Systems, encompassing Photon Lighting, Photovoltaic, Thermal, Photon Engines, conditioning and energy storage system along with integrated controls, are designed for end-to-end consumer operation, adaptable across various industrial, commercial, institutional, and residential settings including off-grid applications.

Rare Earth- Our involvement in the rare earth sector, with operational recycling and processing facilities in Wyoming, and Missouri, underscores our dedication to securing essential materials for our high-grade magnets and assemblies, crucial for a wide range of industries.

Magnets and Magnetic Assemblies- The Company’s world-class manufacturing processes produce high-quality magnets and assemblies, meeting stringent requirements for the electrical, aerospace, and medical industries, among others.

Batteries- The Company’s Iron-Air battery and other third-party battery technologies offers a sustainable, cost-effective, and safer alternative to lithium batteries, complemented by our comprehensive energy storage systems, including charge controllers, inverters, and software monitoring.

Results of Operations

For the Three Months Ended March 31, 2024 and 2023

Our financial results for the three months ended March 31, 2024 and 2023 are summarized as follows:

Revenue

We generated $1 million and $0 revenue for the three months ended March 31, 2024 and 2023, respectively.  During the first quarter of 2024, flooid/Quantum sold two Licensed Distributorships in the amount of $500,000 each.

General and Administrative

During the three months ended March 31, 2024 and 2023, we incurred general and administrative expense in the amount of approximately $300,000 and approximately $79,000, respectively, an increase of approximately $221,000. During the three months ended March 31, 2024 and 2023, advertising and marketing fees increased by approximately $300,000 and audit fees decreased by approximately $79,000.

Other (Expense) Income

Other income was approximately $94,000 for the three months ended March 31, 2024, compared to other expense of approximately $9,000 for the three months ended March 31, 2023. The increase in other income was primarily driven by re-measurements on the notes payable denominated in Canadian Dollars to United States Dollars.

Net Income (Loss)

The Company had net income of approximately $794,000 or $0.02 and $0.01 per basic and diluted share, respectively, for the three months ended March 31, 2024 compared to net loss of approximately $88,000 or $0.04 per basic and diluted share for the three months ended March 31, 2023.  Net income for the three months ended March 31, 2024, resulted from the sale of two distributorship licenses totaling $1.0 million, advertising and marketing expenses of $300,000, and other income of approximately $94,000 related to gains on re-measurement of notes payable denominated in Canadian dollars.  Net loss for the three months ended March 31, 2023, resulted from approximately $79,000 in audit fees and other expenses of approximately $4,000 for interest expense on certain notes payable and approximately $5,000 related to re-measurement of notes payable denominated in Canadian dollars.

LIQUIDITY AND CAPITAL RESOURCES

The Company’s ability to generate and obtain adequate amounts of capital to meet its manufacturing, installation, and overhead is accomplished through the sales of licenses to entities that install and service its technologies and Direct Energy Systems.

The Company’s capital resource plan is managed through two distinct pathways. The first being the Company’s general operating overhead, including its administrative, accounting, sales, and other general expenses which are covered through the sales of the Company’s technology licenses, and related fees to its licensed distributors. The second is the funding of a customer’s specific installation of a Direct Energy System. The funding of any energy system installed by the Company is completed independently as a stand-alone financing function. Direct Energy System installations are funded either through its customers or through a separate investment made by investors that are interested in the various benefits of investing in a specific customer’s installation.

Through our 2025 fiscal year the Company has maintained steady sales of its licenses, and has generated fees to cover its capital needs to date. The Company currently generates approximately $2 million per month on average on the sales of its licenses, and related fees.

Beginning in March of 2025, the Company began Direct Energy System installations in Arizona and Texas. The Company’s installation work is funded primarily through customer sales, and independent investment in equipment at the customer’s location. All customers currently are required to sign a 240-month long-term equipment sale or lease agreement with the Company. Installation funding covers two segments of revenue to be collected from the customer. The actual work, known as the installation fee, and the monthly equipment fee for the Direct Energy System installed. As of March of 2025, the Company had contracted or booked as 2025 work, or pending contracts, approximately $68 million and installation fees, and approximately $35 million in recurring revenue. Monthly recurring revenue during the 240-month contract is collectible after the installation is completed and the Direct Energy System is commissioned and operable.

Company capital demands are based and regulated by the Company by limiting installations to fully funded customer projects. If funding is not obtained for an installation project, then no capital is spent on that project in regards to design, engineering, permitting, or manufacturing. This greatly regulates and limits the possibility of a large demand being put on company cash resources.

The Company projects that it will increase its potential installation fees during its 2025 fiscal year to more than $150 million, and that potential recurring revenue contracts will exceed $100 million. This would require the Company to fund through customer or investment approximately $35 million during the 2025 fiscal year, that would be used for manufacturing and product placement to fulfill the potential contracts. The Company manufactures photonic, photovoltaic, Hydro, and a wide variety of other equipment, assemblies, computers, software, and parts that make up a Direct Energy System. The ability for the Company to produce the products and provide the necessary labor to install this potential contract work is solely based on the ability of our customers, or investors to provide the capital necessary to complete the work.

At the present time the Company’s liquidity is limited. The Company anticipates that its available cash will increase during the 2025 fiscal year, so long as customer and investor capital is made available to the Company.

The Company has limited ability, or plans to offer equity, or to take on additional debt to finance customer installations. At the time of this filing, the Company feels that its current ability to obtain customer and investor capital for the installation of its systems is adequate to meet demand.

The Company is engaged in the electrical energy industry; a capital-intensive manufacturing and service business. The Company has developed and put in place a system where the sale of its Direct Energy Systems, and a customer installation is regulated, by having customer or investor financing for the customer installation secured prior to the start of any manufacturing or installation work. This system insurers that the Company does not build a demand for cash that it cannot meet.

The Company’s plans that are in place for sales of its energy systems, as well as the costs associated with the installation of such systems at the customers locations also benefits the Company in the fact that its costs are real time, which allows the Company to adjust its sales prices and regulate installation costs on a case-by-case basis, as that installation is funded through customer or investment capital. In this manner, cost escalations in raw material, labor, freight, and a wide variety of other project related costs can be adjusted prior to the customer purchase agreement being executed.

The cash and cash equivalents change for the three months ended March 31, 2024 and 2023 was as follows:

Three Months Ended March 31, 2024 and 2023

As of March 31, 2024 and December 31, 2023, we had a net working capital surplus of approximately $4,986,000 and approximately $2,398,000, respectively.

Cash Flows from Operating Activities

For the three months ended March 31, 2024, cash provided by operating activities was approximately $125,000 and primarily consisted of net income of approximately $794,000 and a decrease due to changes in operating assets and liabilities of approximately $575,000, offset by gain on foreign currency re-measurement of approximately $94,000.

For the three months ended March 31, 2023, cash provided by (used in) operating activities was $0 and primarily consisted of net loss of approximately $88,000, due to a decrease in operating assets and liabilities of approximately $83,000 and a loss on foreign currency remeasurement of approximately $5,000.

Cash Flows from Investing Activities

During the three months ended March 31, 2024 and 2023, the Company had no cash flows used in investing activities.

Cash Flows from Financing Activities

During the three months ended March 31, 2024 and 2023, the Company had no cash flows from financing activities.

Critical Accounting Policies and Estimates

Basis of Presentation

These 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 financial statements include the accounts of the Company, flooid CX Corporation. The Company has evaluated subsequent events through the date of the filing with the Securities and Exchange Commission. The Company is not aware of any other significant events that occurred subsequent to the balance sheet date but prior to the filing of this report that would have a material impact on the Company’s financial statements.

Revenue Recognition

The Company recognized revenue of $1.0 million and $0 during the three months ended March 31, 2024 and 2023, respectively. During the three months ended March 31, 2024, the Company had one revenue stream engaged, which was revenue earned from the sale of distributor licenses. The distributor license provides a right to use for the Company’s technology to the distributor through an exclusive or non-exclusive agreement for a specific territory, dependent on the type of the Licensed Distributorship agreement. The right to use allows the distributor to install the Company’s direct energy systems. The license fee collected from the distributor based on the Licensed Distributorship agreement is considered a one-time fee. This license fee is non-refundable to the distributor. The Company considers the license fees as earned at a point in time and has no further performance obligations beyond approval of license use by the distributor, which occurs upon contract signature.

Revenue Recognition under ASC 606 Revenue from Contracts with Customers

In applying Accounting Standards Codification (“ASC”) 606, revenue is recognized by following a five-step process:

1. Identify the contract(s) with a customer. Evidence of a contract generally consists of a Licensed Distributorship agreement (the agreement) issued pursuant to the terms and conditions of the agreement.

2. Identify the performance obligations in the contract. The single performance obligation provides the distributor with a right to use license to the Company’s technology in a specific territory for a license fee.

3. Determine the transaction price. The purchase price stated is a fixed price stated in the Licensed Distributor Agreement. The agreements with customers do not include any form of variable consideration. The licensor and licensee agree that the License Fee may be paid in cash, real estate, or trade. When the license fee is paid by non-cash consideration, the license fee is measured by the estimated fair value of the non-cash consideration at the inception of the agreement.

4. Allocate the transaction price to the performance obligations in the contract. Because there is a single performance obligation no allocation is required.

5. Recognize revenue when (or as) we satisfy a performance obligation. Consideration from the Licensed Distributorship agreements is recognized at a point in time upon delivery of the license to the distributor.

The Company excludes from the transaction price all taxes assessed by governmental authorities that are both (i) imposed on and concurrent with a specific revenue-producing transaction and (ii) collected from customers by the distributor. Accordingly, such tax amounts are not included as a component of net sales or cost of sales.

Accounts Receivable

Accounts receivables, net of the allowance for doubtful accounts, represent their estimated net realizable value, which approximates fair value. Provisions for doubtful accounts are recorded based on historical collection experience, current conditions and reasonable and supportable forecasts. Receivables are written off when they are deemed uncollectible. As of March 31, 2024 and December 31, 2023, the Company had an accounts receivable balance of $4.6 million and $5.2, respectively. All amounts were deemed collectable as of March 31, 2024 and December 31, 2023.

Other Receivables

Other receivables were $4.2 million and $1.3 million as of March 31, 2024 and December 31, 2023, respectively. As of March 31, 2024, other receivables consist of accounts receivable collections through a third-party which is due to the Company of $2.8 million and amounts owed related to cash collected on behalf of the Company for future common stock issuances of $1.4 million which is imminently collectible as of March 31, 2024. During the year ended December 31, 2023, the Company began and ultimately terminated a merger with a third-party entity. In connection with this merger termination, certain of the Company’s accounts receivable were collected on behalf of flooidCX by the third-party entity as of March 31, 2024 and throughout the year ended December 31, 2023 and.  The Company has deemed these amounts imminently collectible as of March 31, 2024.

Estimates and Assumptions

The preparation of these 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 financial statements and the reported amounts of revenue and expenses during the reporting period. 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.

Net Income (Loss) Per Share

Net earnings or loss per share is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period, excluding shares subject to redemption or forfeiture.  The Company presents basic and diluted net earnings or loss per share.  Diluted net earnings or loss per share reflect the weighted average of common shares issued and outstanding during the period, adjusted for potentially dilutive securities outstanding.  Potentially dilutive securities are excluded from the computation of the diluted net loss per share if their inclusion would be anti-dilutive.  Potentially dilutive shares outstanding as of March 31, 2024 and 2023 consist of 6,060,000 and 0 common stock equivalents, respectively.  The 6,060,000 common stock equivalents for the period of March 31, 2024 relate to the 154,000 preferred B convertible stock at their 30:1 conversion ratio resulting in approximately 4,662,000 common stock equivalents and 1,398,000 common stock equivalents which represent stock payable from shares yet to be issued for stock subscriptions. 

Foreign Currency Transactions

The Company’s functional and reporting currency is the United States dollar. In addition, in accordance with ASC 830-20, Foreign Currency Transactions, any monetary assets or liabilities of the Company that are denominated in a foreign currency are revalued at the end of each reporting period based on the prevailing exchange rate. Foreign currency gains and losses on the revaluation are recognized as other income (loss). The Company holds notes payable liabilities which are denominated in Canadian Dollars.

The relevant translation rates are as follows:

General and Administrative Expenses

General and administrative expenses include operating expenses such as compensation and benefits, occupancy costs, allocated costs from merger termination and other office overhead including rent that is not directly attributable to revenue-generating activities. 

General and administrative expenses were as follows for the periods presented:

New and Recently Adopted Accounting Standards

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. The update was intended to improve financial reporting by requiring more timely 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 Company adopted the new standard on January 1, 2023. The adoption did not have an impact on our financial statements, as management reviewed the receivable balances in accordance with the standard and determined the balances were fully collectible as of March 31, 2024 and December 31, 2023.

Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures-In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, it requires a public entity to disclose the title and position of the Chief Operating Decision Maker (“CODM”). The ASU does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. A public entity should apply the amendments in this ASU retrospectively to all prior periods presented in the financial statements. The Company adopted the ASU beginning with its Form 10-K for the period ended December 31, 2024.

Income Taxes (Topic 740): Improvements to Income Tax Disclosures-In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which focuses on the rate reconciliation and income taxes paid. ASU No. 2023-09 requires a public business entity (“PBE”) to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold. In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received. For PBEs, the new standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted. An entity may apply the amendments in this ASU prospectively by providing the revised disclosures for the period ending December 31, 2025, and continuing to provide the pre-ASU disclosures for the prior periods or may apply the amendments retrospectively by providing the revised disclosures for all period presented. flooidCX Corp expects this ASU to only impact its disclosures with no impact to the Company’s results of operations, cash flows, and financial condition.

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.

Off-Balance Sheet Arrangements

There were no off-balance sheet arrangements during the three months ended March 31, 2024 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.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15 under the Exchange Act, our management has carried out an evaluation, with the participation and under the supervision of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2024. Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating and implementing possible controls and procedures.

Management conducted its evaluation of disclosure controls and procedures under the supervision of our chief executive officer and our chief financial officer. Based upon, and as of the date of this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were ineffective as of March 31, 2024 due to the following material weaknesses that our management identified in our internal control over financial reporting as of March 31, 2024:

We plan to take steps to remedy these material weaknesses as soon as practicable by implementing a plan to improve our internal control over financial reporting including, but not limited to, hiring additional staff who has U.S. GAAP knowledge and working experience and/or maintaining outside consultants experienced in U.S. GAAP financial reporting as well as in SEC reporting requirements.  Our management team will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and is committed to taking further action to solve these deficiencies as necessary.

Evaluation of Changes in Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Internal control over financial reporting is a process designed by, or under the supervision of, our president (our principal executive officer and our principal accounting officer and principal financial officer), to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of our company are being made only in accordance with authorizations of management and directors of our company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not provide absolute assurance that a misstatement of our financial statements would be prevented or detected. 

Further, the evaluation of the effectiveness of internal control over financial reporting was made as of a specific date, and continued effectiveness in future periods is subject to the risks that controls may become inadequate, because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management has conducted, with the participation of our CEO (our principal executive officer, our principal accounting officer and our principal financial officer), an evaluation of the effectiveness of our internal control over financial reporting as of March 31, 2024 in accordance with the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) 2013 in Internal Control — Integrated Framework. Based on this assessment, management concluded that as of March 31, 2024, there are material weaknesses, as identified above, in our internal controls over financial reporting.  The material weaknesses identified did not result in the restatement of any previously reported financial statements or related financial disclosure, nor does management believe that it had any affect on the accuracy of the Company’s financial statements for the current period.

Our Company is in the process of adopting specific internal control mechanisms. Future controls, among other things, will include more checks and balances and communication strategies between the management and the board to ensure efficient and effective oversight over Company activities as well as more stringent accounting policies to track and update our financial reporting.

Changes in Internal Control over Financial Reporting

There were no changes in our internal controls over financial reporting during the three months ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company currently is not a party to any legal proceedings and, to the Company’s knowledge; no such proceedings are threatened or contemplated.

ITEM 1A. RISK FACTORS

Not applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the three months ended March 31, 2024, there were no unregistered sales of equity securities and use of proceeds.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The following exhibits are filed as part of this Form 10-Q:

___________ 

SIGNATURES

Pursuant to the requirements 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.