FRX Innovations Inc. — Interim / Quarterly Report 2021

Jul 21, 2021

Good2GoRTO Corp.

(A Capital Pool Corporation)

Management’s Discussion and Analysis

For the Three and Six Months Ended June 30, 2021

(Expressed in Canadian Dollars)

1 King Street West, Suite 1505, Toronto, ON, Canada Telephone: 416 364 4039

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OVERVIEW

Good2GoRTO Corp. was incorporated under the Canada Business Corporations Act on December 31, 2020 and registered in the Province of Ontario on December 31, 2020 (“G2GRTO” or the “Company”). The Company is classified as a Capital Pool Corporation, as defined in the Policy 2.4 of the TSX Venture Exchange (the “Exchange”). The principal business of the Company will be the identification and evaluation of assets or businesses with a view to completing a Qualifying Transaction (“QT”). The Company has not commenced operations and has no assets other than cash held in trust. The Company’s continuing operations as intended are dependent upon its ability to identify, evaluate and negotiate an acquisition, or business, or an interest therein. Such an acquisition will be subject to the approval of the regulatory authorities concerned and, in the case of a non- arm’s length transaction, of the majority of the minority shareholders.

The proceeds raised from the issuance of share capital may only be used to identify and evaluate assets or businesses for future investment, with the exception that up to $3,000 per month may be used for reasonable general and administrative expenses of the Company. These restrictions apply until completion of a QT by the Company as defined under the policies of the Exchange Policy 2.4.

The Company's head office and registered office is located at 1 King Street West, Suite 1505, Toronto, Ontario, M5H 1A1. The Company’s common shares trade on the TSX Venture Exchange under the symbol GRTO.P. The Company’s public filings can be accessed and viewed via the System for Electronic Data Analysis and Retrieval (“SEDAR”) at www.sedar.com.

The following Management’s Discussion and Analysis of G2GRTO should be read in conjunction with the Company’s Unaudited Condensed Interim Financial Statements for the three and six months ended June 30, 2021 and notes thereto. This Management’s Discussion and Analysis is dated July 19, 2021 and has been approved by the Board of Directors of the Company.

The Company’s Unaudited Condensed Interim Financial Statements for the three and six months ended June 30, 2021, were prepared using the same accounting policies and methods of computation as those described in our Financial Statements for the period from the date of incorporation (December 31, 2020) to December 31, 2020. Any subsequent changes to IFRS that are given effect in the Company’s annual financial statements for the year ending December 31, 2021, could result in restatement of the Unaudited Condensed Interim Financial Statements. The Unaudited Condensed Interim Financial Statements should be read in conjunction with the Financial Statements for the period from the date of incorporation (December 31, 2020) to December 31, 2020. All amounts herein are presented in Canadian dollars, unless otherwise noted.

The Unaudited Condensed Interim Financial Statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and interpretations issued by the IFRS Interpretations Committee (“IFRIC”). The Unaudited Interim Condensed Consolidated Financial Statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting. Accordingly, they do not include all of the information required for full annual financial statements required by IFRS as issued by the IASB and interpretations issued by IFRIC.

FORWARD LOOKING STATEMENTS

Certain statements contained in this MD&A may constitute forward-looking information and forward-looking statements as such terms are defined under Canadian securities laws (collectively, “forward-looking statements”). Forward-looking statements relate to future events or the Company’s future performance. All statements, other than statements of historical fact, may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “propose”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions. These statements involve known and unknown risks, uncertainties, many of which are beyond the Company’s control, and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Company believes that the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this MD&A should not be unduly relied upon by investors as actual results may vary.

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Forward-looking statements contained in this MD&A speak only as of the date of this MD&A, or such other date as may be specified herein, and are expressly qualified, in their entirety, by this cautionary statement. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of various risk factors.

OVERALL PERFORMANCE

For the six months ended June 30, 2021, the Company recorded a net loss and comprehensive loss of $123,167 and a net loss per share of $0.24.

For the three months ended June 30, 2021, the Company record a net loss of $101,327 and a net loss per share of $0.10.

During the three and six months ended June 30, 2021, the Company completed its initial public offering (the “Offering”) of 2,000,000 common shares at a purchase price of $0.10 per common share for gross proceeds of $200,000 and commenced trading on the TSX Venture Exchange under the symbol GRTO.P. During the six months ended June 30, 2021, the Company incurred costs of $47,681directly related to the Offering.

Haywood Securities Inc., (the “Agent”) acted as the agent for the Offering. In connection with the Offering, the Company granted to the Agent, common share purchase warrants to acquire 200,000 common shares (the “Warrants”). Each Warrant is exercisable to acquire one common share at a price of $0.10 until May 17, 2023. In connection with the Offering, the Agent was paid a cash commission equal to 10% of the aggregate gross proceeds from the sale of the common shares. The Company also paid a corporate finance fee of $12,500 to the Agent and reimbursed the Agent for legal fees and other reasonable expenses incurred pursuant to the Offering.

Upon closing of the Offering, the Company granted 580,000 common share purchase options to directors and officers. Each common share purchase option entitles the holder to acquire one common share of the Company at an exercise price of $0.10 until May 17, 2031.

RISK AND UNCERTAINTIES

The following describes certain risks, events and uncertainties that could affect the Company and that each reader should carefully consider.

External financing may be required to fund the Company’s activities primarily through the issuance of common shares. There can be no assurance that the Company will be able to obtain adequate financing. The securities of the Company should be considered a highly speculative investment.

The Company has not generated significant revenues and does not expect to generate significant revenues in the near future. In the event that the Company generates significant revenues in the future, the Company intends to retain its earnings in order to finance further growth. Furthermore, the Company has not paid any dividends in the past and does not expect to pay any dividends in the foreseeable future.

The global outbreak of COVID-19 (coronavirus) has had a significant impact on businesses through the restrictions put in place by the Canadian, provincial and municipal governments regarding travel, business operations and isolation/quarantine orders. At this time, it is unknown the extent of the impact the COVID19 outbreak may have on the Company as this will depend on future developments that are highly uncertain and that cannot be predicted with confidence. These uncertainties arise from the inability to predict the ultimate geographic spread of the disease, and the duration of the outbreak, including the duration of travel restrictions, business closures or disruptions, and quarantine/isolation measures that are currently, or may be put, in place by Canada and other countries to fight the virus.

Capital Management

The Company’s objective when managing capital is to maintain its ability to continue as a going concern, in order to provide returns for the shareholders and benefits for other stakeholders. The Company includes equity, comprised of share capital and deficit, in the definition of capital.

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The Company's primary objective, with respect to its capital management, is to ensure that it has sufficient cash resources to fund the identification and evaluation of potential acquisitions. To secure the additional capital necessary to pursue these plans, the Company may attempt to raise additional funds through the issuance of equity or by securing strategic partners.

The proceeds raised from the issuance of share capital may only be used to identify and evaluate assets or businesses for future investment, with the exception that up to $3,000 per month may be used for reasonable general and administrative expenses of the Company. These restrictions apply until completion of a QT by the Company as defined under the policies of the Exchange Policy 2.4.

Risk Disclosures and Fair Values

The Company’s financial instruments, consisting of cash held in trust, prepaid expenses and deposits and accrued liabilities, approximate fair value due to the relatively short-term maturities of the instruments. It is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. Please refer to the Company’s final prospectus dated April 7, 2021, for additional risks, events and uncertainties that could affect the Company.

SUMMARY OF QUARTERLY RESULTS

The following table reflect the summary of quarterly results for the period set out.

**For the quarter ending **	June 30, 2021($)	March 31, 2021($)
Totalassets	264,164	168,910
Total revenue	-	-
Totalexpenses	101,327	21,840
Netloss	101,327	21,840
Basic and dilutedloss pershare	(0.10)	(0.00)

For the three months ended June 30, 2021, the Company recorded stock exchange fees of $8,475, filing fees of $650, professional fees of $32,240, shareholder information costs of $725, general and office expenses of $17, accounting and corporate secretarial fees of $4,068, transfer agent fees of $3,273 and stock-based compensation expense of $51,879 resulting in a net loss for the quarter of $101,327 and a net loss per share of $0.10.

For the three month period ended March 31, 2021, the Company recorded stock exchange fees of $13,101, filing fees of $7,690, professional fees of $750, shareholder information costs of $281 and general and office costs of $18, resulting in a net loss for the quarter of $21,840 and a net loss per share of $0.00.

RESULTS OF OPERATIONS

For the three month period ended June 30, 2021, the Company recorded a net loss and comprehensive loss of $101,327 and a net loss per share, basic and diluted of $0.10. During the three months ended June 30, 2021, the Company recorded stock exchange fees of $8,475, filing fees of $650, professional fees of $32,240, shareholder information costs of $725, general and office expenses of $17, accounting and corporate secretarial fees of $4,068, transfer agent fees of $3,273 and stock-based compensation expense totalling $51,879.

For the six month period ended June 30, 2021, the Company recorded a net loss and comprehensive loss of $123,167 and a net loss per share, basic and diluted of $0.24. During the six months ended June 30, 2021, the Company recorded stock exchange fees of $21,576, filing fees of $8,340, professional fees of $32,990, shareholder information costs of $1,006, general and office expenses of $35, accounting and corporate secretarial fees of $4,068, transfer agent fees of $3,273 and stock-based compensation expense of $51,879.

Higher costs experienced during the three month period ended June 30, 2021, primarily relate to costs associated with the Company’s Offering and non-cash stock-based compensation expense recognized upon the issuance of 580,000 common share purchase options to directors and officers.

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OFF-BALANCE SHEET ARRANGEMENTS

The Company has not had any off-balance sheet arrangements from the date of its incorporation (December 31, 2020) to the date of this MD&A.

CAPITAL EXPENDITURES

The Company has not had any capital expenditures from the date of its incorporation (December 31, 2020) to June 30, 2021.

FINANCING ACTIVITIES

During the month six month period ended June 30, 2021, the Company issued 400,000 common shares at $0.05 per share for total proceeds of $20,000 and completed its Offering of 2,000,000 common shares at a purchase price of $0.10 per common share for gross proceeds of $200,000

LIQUIDITY AND CAPITAL RESOURCES

As at June 30, 2021, the Company had current assets in the amount of $264,164 which were comprised of cash held in trust in the amount of $262,164 and prepaid deposits and expenses of $2,000. In addition, at June 30, 2021, the Company had current liabilities of $4,533 (December 31, 2020: $10,950) and working capital of $260,081 (December 31, 2020: $159,050) which the Company deems sufficient to meet its ongoing obligations in the coming year.

SIGNIFICANT ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES

The Company’s significant accounting policies and critical accounting estimates are summarized in Note 2 to the Financial Statements.

Measurement Uncertainty

The preparation of financial statements, in conformity with IFRS accounting principles, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates used in the Financial Statements.

New Accounting Standards Issued

IFRS 3 – Business Combinations (“IFRS 3”) was amended. The amendments introduce new exceptions to the recognition and measurement principles in IFRS 3 to ensure that the update in references to the revised conceptual framework does not change which assets and liabilities qualify for recognition in a business combination. An acquirer should apply the definition of a liability in IAS 37 – rather than the definition in the Conceptual Framework – to determine whether a present obligation exists at the acquisition date as a result of past events. For a levy in the scope of IFRIC 21, the acquirer should apply the criteria in IFRIC 21 to determine whether the obligating event that gives rise to a liability to pay the levy has occurred by the acquisition date. In addition, the amendments clarify that the acquirer should not recognize a contingent asset at the acquisition date. The amendments are effective for annual periods beginning on January 1, 2022.

SHARE CAPITAL

a) Common Shares Authorized: Unlimited common shares

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Issued:

The following table sets out the changes in common shares during the period.

	Number of Common Shares	Amount $
Balance, December 31, 2020 (2)	3,400,000	170,000
Share subscription (1)(2)	400,000	20,000
Initial public offering (3)	2,000,000	200,000
Offering costs (3)	-	(47,681)
Fair value ofagentwarrants (3)	-	(10,441)
Balance, June 30, 2021	5,800,000	331,878

(1) Share Subscription

During the period, the Company issued 400,000 common shares at $0.05 per share for total proceeds of $20,000.

(2) Escrowed Shares

The 3,800,000 common shares issued at $0.05 per share, will be held in escrow pursuant to the requirements of the Exchange. All common shares granted to directors and officers prior to the completion of a Qualifying Transaction, must also be deposited in escrow until the final exchange bulletin is issued.

All common shares of the Company acquired in the secondary market prior to the completion of a Qualifying Transaction by a Control Person, as defined in the policies of the Exchange, are required to be deposited in escrow. Subject to certain permitted exemptions, all securities of the Company held by principals of the resulting issuer will also be subject to escrow.

(3) Initial Public Offering

On May 17, 2021, the Company completed its initial public offering (the “Offering”) of 2,000,000 common shares at a purchase price of $0.10 per common share for gross proceeds of $200,000. During the period ended June 30, 2031, the Company incurred costs of $47,681 directly related to the Offering.

Haywood Securities Inc., (the “Agent”) acted as the agent for the Offering. In connection with the Offering, the Company granted to the Agent, common share purchase warrants to acquire 200,000 common shares (the “Warrants”). Each Warrant is exercisable to acquire one common share at a price of $0.10 until May 17, 2023. The estimated fair value attributed to the Warrants was $10,441. In connection with the Offering, the Agent was paid a cash commission equal to 10% of the aggregate gross proceeds from the sale of the common shares. The Company also paid a corporate finance fee of $12,500 to the Agent and reimbursed the Agent for legal fees and other reasonable expenses incurred pursuant to the Offering.

Weighted Average Shares Outstanding

The following table summarizes the weighted average shares outstanding:

Weighted Average Shares Outstanding, basic and diluted	Three Months Ended Six Months Ended June 30, 2021 June 30, 2021
	1,032,967 519,337

As at June 30, 2021, 3,800,000 common shares were excluded from the calculation as they were contingently issuable and all conditions necessary for their issuance have not been satisfied. The effects of any potential dilutive instruments on loss per share are anti-dilutive and therefore have been excluded from the calculation of diluted loss per share.

b ) Common Share Purchase Warrants

The following table sets out the changes in warrants for the periods set out:

	Number	Weighted
Warrants	of Warrants	Average Price$
Outstanding, December 31, 2020	-	-
Warrants issued	200,000	0.10
Balance, June 30, 2021	200,000	$0.10

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In connection with the Offering, the Company granted to the Agent warrants to acquire 200,000 common shares (the “Warrants”). Each Warrant is exercisable to acquire one common share at a price of $0.10 until May 17, 2023. The fair value of the Warrants were estimated on the date of issue using the Black-Scholes option pricing model with the following assumptions: dividend yield 0%, discount rate 0.33 %, expected volatility 100% and expected life of 2 years. The fair value attributed to the 200,000 Warrants was $10,441.

The following table summarizes the outstanding warrants as at June 30, 2021:

Number of Warrants Exercise Price	Expiry Date Weighted Average Remaining Life(Years)	Warrant Value($)
200,000 $0.10	May17,2023 1.88	10,441

c) Common Share Purchase Options The Company has a stock option plan to provide incentives for directors, officers, employees and consultants of the Company. Options may be granted for a maximum term of ten years from the date of the grant. They are nontransferable and are exercisable as determined by the Directors when the option is granted. Options expire within 12 months after completion of a QT or within 90 days of termination of employment or holding office as director or officer of the Company and, in the case of death, expire within a maximum period of one year after such death, subject to the expiry date of the option. The stock option plan is subject to regulatory approval. Any shares issued upon exercise of the options prior to the Company entering into a QT will be subject to escrow restrictions.

Upon closing of the Offering, the Company granted 580,000 common share purchase options to directors and officers. Each common share purchase option entitles the holder to acquire one common share of the Company at an exercise price of $0.10 until May 17, 2031 (the “Options”). The fair value of the Options were estimated on the date of issue using the Black-Scholes option pricing model with the following assumptions: dividend yield 0%, discount rate 1.57%, expected volatility 100%, forfeiture rate 0% and expected life of 10 years. The Company recorded the estimated fair value of the Options of $51,879 as non-cash stock-based compensation expense.

The following table is a summary of the status of the Company’s stock options and changes during the periods set out:

Balance, December 31, 2020 Granted Balance, June 30, 2021	Number Weighted Average of Options Exercise Price$ - - 580,000 0.10 580,000 0.10

The following table is a summary of the Company's stock options outstanding and exercisable as at June 30, 2021:

Options Outstanding Exercise Price Number of Options Weighted Average Remaining Life (Years)	Expiry Date	Options Exercisable Number of Options Weighted Average Exercise Price$
$0.10 580,000 9.88	May17,2031 580,000 0.10

Any shares issued upon exercise of the options prior to the Company entering into a Qualifying Transaction will be subject to escrow restrictions.

The stock option plan is subject to regulatory approval.

RELATED PARTY TRANSACTIONS

For the three and six month period ended June 30, 2021, the Company accrued accounting and corporate secretarial fees in the amount of $3,600 net of HST, to a director of the Company. At June 30, 2021, $3,600 is included in accounts payable and accrued liabilities (December 31, 2020: Nil)

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