TrustBIX Inc. — Interim / Quarterly Report 2022

May 19, 2022

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TrustBIX Inc.

Interim Condensed Consolidated Financial Statements (Unaudited) March 31, 2022

As at March 31, 2022

TrustBIX Inc. Interim Condensed Consolidated Statement of Financial Position (Unaudited)

Assets Current assets Cash Accounts receivable Inventory Deposits and prepaid expenses Property and equipment (note 5) Intangible assets (note 4 and 6) Right-of-use assets(note 7) Investment(note 8) Liabilities Current liabilities Accounts payable and accrued liabilities Unearned revenue Lease liability (note 7) Loan liability (note 9) Lease liability(note 7) Loan payable (note 9) Shareholders’ Equity (Deficit) Share capital issued(note10(a)) Share capital committed(note 10(c)) Warrants(note 10(c)) Contributed surplus(note 10(d)) Capital reserve Deficit Nature of operations and going concern(note 1)	March 31, 2022 $ September 30, 2021 $ 782,347 450,167 194,409 254,090 73,610 58,457 254,430 41,311
	1,304,796 810,025 36,535 40,927 1,775,097 10,474 52,793 40,832 327,957 333,993
	3,497,178 1,236,251
	661,450 449,929 344,579 336,519 28,565 43,686 83,250 -
	1,117,844 830,134 28,396 3,605 588,585 614,422
	1,734,825 1,448,161
	12,101,206 9,457,445 722,000 - 81,323 468,408 2,568,042 1,923,782 149,628 149,628 (13,859,846) (12,211,173)
	1,762,353 (211,910)
	3,497,178 1,236,251

Approved by the Board of Directors

__(Signed) “Hubert Lau” ______ Director

___(Signed) “Tony Barlott” __ Director

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

TrustBIX Inc.

Interim Condensed Consolidated Statements of Changes in Equity (Deficiency) (Unaudited) For the six-month periods ended March 31, 2022 and 2021

Balance – October 1, 2021 Net loss for the period Common shares issued for asset acquisition, net of share issue costs (notes 10(a)) Common shares and warrants issued in private placement, net of share issue costs (notes 10(a) (b) (c)) Common shares issued on exercise of options (notes 10(a) and (d)) Expiration of warrants (notes 10(c)) Stock-based compensation (note 10(d)) Balance – March 31, 2022 Balance – October 1, 2020 Net loss for the period Common shares issued in private placement, net of share issue costs (notes 10(a) and (c)) Stock-based compensation (note 10(d)) Balance – March 31, 2021	Share capital $ Share Capital - committed $ Warrants $ Contributed surplus $ Capital reserve $ Deficit $ Total $ 9,457,445 - 468,408 1,923,782 149,628 (12,211,173) (211,910) - - - - - (1,648,673) (1,648,673) 1,771,125 - - - - - 1,771,125 852,636 722,000 81,323 - - - 1,655,959 20,000 - - - - - 20,000 - - (468,408) 468,408 - - - - - - 175,852 - - 175,852
	12,101,206 722,000 81,323 2,568,042 149,628 (13,896,635) 1,762,353
	7,977,154 - 403,719 1,488,115 149,628 (9,971,814) 46,802 - - - - - (1,128,998) (1,128,998) 1,475,570 - 464,336 - - - 1,939,906 - - - 35,858 - - 35,858
	9,452,724 - 868,055 1,523,973 149,628 (11,100,812) 893,568

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

TrustBIX Inc.

Interim Condensed Consolidated Statements of Loss and Comprehensive Loss (Unaudited)

For the three and six-month periods ended March 31, 2022 and 2021

Revenue Licence Hardware and installation Professional and development services Maintenance Expenses Wages and benefits (note 10(d)) Consulting fees Professional fees Hardware costs and supplies Travel, trade shows and conferences Office Amortization and depreciation Advertising and promotion Research and development Bad debts Foreign exchange loss Loss before other (expenses) income and income taxes Other (expenses) income Interest expense Interest income (note 8) Accretion expense Foreign exchange remeasurement on investment (note 8) Loss before income taxes Income taxes Net loss and comprehensive loss for the period Basic and diluted loss per share(note 11)	Three months ended March 31, 2022 $ March 31, 2021 $ 12,657 62,277 114,711 210,183 77,203 239,873 207,155 240,922	Six months ended
		March 31, 2022 $ March 31, 2021 $ 56,721 72,515 188,267 359,789 167,173 309,535 421,826 431,639
	411,726 753,255	833,987 1,173,487
	572,613 490,211 191,105 212,864 382,755 153,145 68,456 132,685 18,059 11,739 82,423 74,110 38,861 26,946 7,657 9,308 46,277 67,791 - 28,834 8,616 6,328	984,903 953,101 416,392 426,957 523,644 232,346 109,662 183,612 23,583 15,996 171,088 146,090 53,076 60,465 14,383 25,454 113,342 122,731 - 28,834 5,849 16,180
	1,416,822 1,213,961	2,415,922 2,211,766
	(1,005,096) (460,706)	(1,581,935) (1,038,279)
	(1,443) (23,812) - 1,926 (29,348) (24,546) (3,660) (3,475)	(3,403) (27,623) 1,013 3,574 (57,413) (48,020) (6,935) (18,650)
	(34,451) (49,907)	(66,738) (90,719)
	(1,039,547) (510,613) - -	(1,648,673) (1,128,998) - -
	(1,039,547) (510,613)	(1,648,673) (1,128,998)
	(0.02) (0.01)	(0.04) (0.04)

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

TrustBIX Inc.

Interim Condensed Consolidated Statements of Cash Flows (Unaudited)

For the three and six-month periods ended March 31, 2022 and 2021

Cash provided by (used in) Operating activities Net loss for the period Adjustments to reconcile net loss to cash flows from operating activities: Amortization and depreciation Accretion expense Stock-based compensation Unrealized foreign exchange gain on investment (note 8) Interest income on investment (note 8) Interest expense Cash used in operating activities before changes in items of working capital Net change in items of non-cash working capital (note 14) Investing activities Purchase of property and equipment Financing activities Lease payments (note 7) Proceeds from issuance of common shares and warrants in private placement (note 10(a)) Proceeds from common shares and warrants in private placement committed to be issued (note 10(b)) Proceeds from exercise of options (note 10(a)(d)) Share issue costs (note 10(a)) Increase in cash during the period Cash – Beginning of period Cash – End of period	Three-months ended March 31, 2022 $ March 31, 2021 $ (1,039,547) (510,613) 38,861 26,946 29,348 24,546 174,601 10,482 3,660 3,475 - (1,837) 1,443 3,380	Six-months ended
		March 31, 2022 $ March 31, 2021 $ (1,648,673) (1,128,998) 53,076 60,465 57,413 48,020 175,852 35,858 6,935 18,650 (899) (3,485) 3,403 7,191
	(791,634) (443,621) 252,362 (232,024)	(1,352,893) (962,299) 76,440 (213,573)
	(539,272) (675,645)	(1,276,453) (1,175,872)
	- (5,552)	(1,900) (7,677)
	(13,275) (13,276) 264,580 2,100,000 722,000 - 20,000 - (45,087) (160,094)	(26,551) (26,552) 960,580 2,100,000 722,000 - 20,000 - (65,496) (160,094)
	948,218 1,926,630	1,610,533 1,913,354
	408,946 1,245,433 373,401 198,331	332,180 729,805 450,167 713,959
	782,347 1,443,764	782,347 1,443,764

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

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2022

TrustBIX Inc.

1 Nature of operations and going concern

TrustBIX Inc.’s (the Company or TrustBIX) business operations consist of information solutions for the agrifood industry including:

• the sale, installation and support of software and computer systems for auction markets and livestock dealers;

• the sale, installation and support of software for livestock feedlots;

• the sale, installation and support of data capture and carcass grading systems for pork plants;

• internet based applications that provide animal tracking and management;

• the sale, installation and support for Business InfoXchange (BIX); and

• the sale of solutions to track, protect and identify the movement of high-value moveable equipment

The Company and its wholly owned subsidiaries, ViewTrak Technologies Inc. (ViewTrak) and Insight Global Technology Inc. (Insight) are incorporated and domiciled in Canada. The Company and its subsidiaries’ principal office is located at 10607 – 82 Street, Edmonton, Alberta.

Going concern

These interim consolidated financial statements have been prepared on a going concern basis in accordance with International Financial Reporting Standards (IFRS), which contemplates the realization of assets and satisfaction of liabilities in the normal course of business as they come due.

As at March 31, 2022, the Company had net working capital of $186,952 compared to a net working capital deficit of $20,109 as at September 30, 2021. For the three and six-month period ended March 31, 2022, the Company incurred a net loss of $1,039,547 and $1,648,673, respectively ($510,613 and $1,128,998 net loss for the three and six-month periods ended March 31, 2021, respectively) and net cash outflow from operating activities of $539,272 and $1,276,453, respectively ($675,645 and $1,175,872 net cash outflow from operating activities for the three and six-month periods ended March 31, 2021). As at March 31, 2022, the Company had an accumulated deficit of $13,859,846 (September 30, 2021 – $12,211,173). In addition, the Company also has lease commitments in the amount of $56,961 as disclosed in note 7.

Current operations have been financed primarily from the issue of share capital, including a non-brokered private placement financing for gross proceeds of $1,138,380 or 6,324,334 units at a price of $0.18, of which $265,580 closed on March 14, 2022 (note 10(a)) and $872,800 on April 5, 2022 (note 18).

The Company also raised financing from the issue of share capital, including a non-brokered private placement financing for gross proceeds of $705,000 or 4,406,250 common shares at a price of $0.16 which closed on December 31, 2021 (note 10(a)).

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2022

TrustBIX Inc.

Management efforts and the Company’s focus are primarily on the development of the Company’s proprietary, cloud-based and secure distributed ledger platform (BIX) and its use of incentive solutions related to agri-food traceability and chain of custody value solutions, along with sales, installation and support of software and hardware of the ViewTrak segment.

Management is actively pursuing new business opportunities related to the BIX platform, as well as acquisitions to expand the business, and the sale of equity securities to increase working capital. On March 7, 2022 the Company completed the acquisition of Insight (note 4), an early stage company providing solutions to track, protect and identify the movement of high-value moveable equipment used in agriculture and other industries.

Additionally, the Company continues to apply for provincial and/or federal government grant and funding programs including Protein Industries Canada (PIC) and Industrial Research Assistance Program (IRAP) (note 16). The Company also has a contribution agreement with Western Economic Diversification Canada (WD) for a repayable financial contribution under the Regional Relief and Recovery Fund (note 9).

The outcome of such efforts is dependent on a number of factors outside of the Company’s control. The nature of the technology sector, availability of government grants and current financial equity market conditions, including the impact of a novel strain of the coronavirus (COVID-19) (as disclosed in note 3), make the success of any future financing ventures and the other management strategies uncertain. There can be no assurance that management’s efforts will be successful. This uncertainty casts significant doubt upon the Company’s ability to continue as a going concern and, accordingly, the appropriateness of the use of accounting principles applicable to going concern.

These interim condensed consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported revenues and expenses that would be necessary if the Company were unable to realize its assets and settle its liabilities as a going concern in the normal course of operations. Such adjustments could be material.

2 Basis of presentation

These interim condensed consolidated financial statements of the Company have been prepared in accordance with IFRS, as applicable to interim financial reports including International Accounting Standard 34, Interim Financial Reporting, and should be read in conjunction with the annual consolidated financial statements of the Company for the year ended September 30, 2021, which have been prepared in accordance with IFRS, as issued by the International Accounting Standards Board.

These interim condensed consolidated financial statements were authorized for issue by the Board of Directors on May 18, 2022.

Basis of measurement

These interim condensed consolidated financial statements have been prepared in Canadian dollars, which is the Company’s presentation and functional currency, and are prepared on a going concern and historical cost basis, except for financial instruments, which are measured at fair value.

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2022

TrustBIX Inc.

Significant accounting policies

Investments

The Company measures its non-marketable equity securities at fair value as required by IFRS – Financial Instruments. The determination of fair value requires management judgment and estimation, and may change over time. The Company adjusts the carrying value of its non-marketable equity securities to fair value at the end of each reporting period. All gains and losses are recognized in other income (expense).

Business combinations

In accordance with IFRS 3 – Business Combination (“IFRS 3”), a transaction is recorded as a business combination if the significant assets, liabilities, or activities, in addition to property, assumed constitute a business. IFRS 3 defines a business as an integrated set of activities and assets that is capable of being conducted and managed for the purpose of providing goods or services to customers, generating investment income (such as dividends or interest) or generating other income from ordinary activities. IFRS 3 also includes an optional concentration test to determine whether an acquired set of activities and assets is a business. Where there are no such integrated activities, the transaction is treated as an asset acquisition. The estimation of the fair value of the assets and liabilities acquired in an acquisition is subject to judgement concerning estimating market values and predicting future events.

3 Recent developments and impact on estimation uncertainty

The COVID-19 pandemic has had, and continues to have, a significant impact around the world, prompting governments and businesses to implement restrictions on travel and business operations and quarantine. During the three months ended March 31, 2022, aspects of the Company’s business continue to be affected by the COVID-19 pandemic, with a number of the Company’s employees working remotely and the reactivation of certain travel and business development activities. The continued spread of COVID-19 resulted in a slowing of the agriculture and general business sectors and staffing issues, resulting in financial uncertainty with the Company’s customers.

The full extent of the impacts of COVID-19 on the Company’s operations and future financial performance is currently uncertain. It will depend on future developments that are uncertain and unpredictable, including the duration and emergence of new variants, its continued impact on capital and financial markets on a macroscale and any new information that may emerge concerning the severity of the virus. These uncertainties may persist beyond when it is determined how to contain the virus or treat its impact. The outbreak presents uncertainty and risk with respect to the Company, its performance and estimates and assumptions used by management in the preparation of its financial results.

4 Acquisition of Insight Global Technology Inc.

On March 7, 2022, pursuant to the terms of the definitive agreement, the Company acquired 100% of the issued and outstanding shares of Insight for up to 30,000,000 common shares of the Company priced at $0.18 per share (Consideration Shares). The Insight shareholders will receive 10,000,000 Consideration Shares (subject to certain resale restrictions) on closing, and an additional amount of up to 20,000,000

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2022

TrustBIX Inc.

Consideration Shares (subject to applicable escrow and resale restrictions) may be issued by the Company based on the satisfaction of certain financial metrics over the twelve months after the closing of the transaction, as follows:

i) a further 5,000,000 Consideration Shares on Insight attaining Net Revenue of $500,000 and Target Profit of $150,000;

ii) a further 7,500,000 Consideration Shares on Insight attaining cumulative Net Revenue of $750,000 and cumulative Target Profit of $225,000; and

iii) a further 7,500,000 Consideration Shares on Insight attaining cumulative Net Revenue of $1,000,000, cumulative Target Profit of $300,000, and achieving a minimum of 50% recurring revenue (continuing subscriptions and rollover renewals of the Insight Solution).

Net Revenue includes the sales of Insight products and related services, net of returns, discounts, shipping, taxes, duties and other such amounts. Target Profit is defined as Net Revenue, minus cost of goods sold, including installation and support, and direct operating expenses, including all sales and technical activities. Net Revenue and Target Profit are calculated in accordance with the Company’s accounting standards and corporate policies.

Any Consideration Shares which have not been released pursuant to the escrow agreement within twelve months of the closing date, shall be cancelled without recourse.

The Company applied the optional concentration test permitted under IFRS 3 to the acquisition which resulted in the acquired assets being accounted for as an asset acquisition. The amounts recognized on the date of acquisition of the identifiable assets were as follows:

Assets acquired: Inventory Software Assets acquired Share consideration (30,000,000 common shares)	$ 9,450 1,790,550
	1,800,000
	1,800,000

Software acquired is amortized over the useful life of three years on a straight-line basis (note 6).

TrustBIX Inc.

Notes to Interim Condensed Consolidated Statements (Unaudited)

March 31, 2022

5 Property and equipment

As at September 30, 2021 Cost Accumulated depreciation Net book value as at September 30, 2021 Cost – as at September 30, 2021 Additions Cost – as at March 31, 2022 Accumulated depreciation – as at September 30, 2021 Depreciation Accumulated depreciation – as at March 31, 2022 Net book value as at March 31, 2022	Computer hardware $ Computer software $ Office furniture and equipment $ Total $ 107,987 17,808 15,086 140,881 (72,089) (17,808) (10,057) (99,954)
	35,898 - 5,029 40,927
	107,987 17,808 15,086 140,881 - 1,900 - 1,900
	107,987 19,708 15,086 142,781
	(72,089) (17,808) (10,057) (99,954) (5,087) (721) (484) (6,292)
	(77,176) (18,529) (10,541) (106,246)
	30,811 1,179 4,545 36,535

The Company follows the guidance of IAS 36 to determine if impairment indicators exist for its property and equipment. When impairment indicators exist, the Company is required to make a formal estimate of the recoverable amount of its property and equipment. In making this judgment, management evaluates external and internal factors, such as significant adverse changes in the technological, market, economic or legal environment in which the Company operates. In making a judgment as to whether impairment indicators exist as at March 31, 2022, the Company concluded there were none.

TrustBIX Inc.

Notes to Interim Condensed Consolidated Statements (Unaudited)

March 31, 2022

6 Intangible assets

As at September 30, 2021 Cost Accumulated amortization Net book value as at September 30, 2021 Cost – as at September 30, 2021 Additions Cost – as at March 31, 2022 Accumulated amortization – as at September 30, 2021 Amortization Accumulated amortization – as at March 31, 2022 Net book value as at March 31, 2022	BIX software $ Trademarks $ Insight software $ Total $ 244,959 8,092 - 253,051 (242,577) - - (242,577)
	- - 2,382 8,092 - 10,474
	244,959 8,092 - 253,051 - - 1,790,550 1,790,550
	244,959 8,092 1,790,550 2,043,601 (242,577) - - (242,577) (1,058) - (24,869) (25,927)
	(243,635) - - (268,504)
	1,324 8,092 1,765,681 1,775,097

Insight software was acquired with the purchase of Insight (note 4).

7 Leases

Below is a summary of the activity related to the Company’s right-of-use (ROU) assets for the period ended March 31, 2022.

ROU assets as at September 30, 2021 Additions Depreciation ROU assets as at March 31, 2022	$ 40,832 32,818 (20,857)
	52,793

The following is a summary of the activity related to the Company’s lease liabilities for the period ended March 31, 2022:

TrustBIX Inc.

Notes to Interim Condensed Consolidated Statements (Unaudited)

March 31, 2022

ROU lease liabilities as at September 30, 2021 Additions Lease payments Accretion of lease liabilities ROU lease liabilities as at March 31, 2022 Of which are Current lease liabilities Non-current lease liabilities	$ 47,291 32,818 (26,551) 3,403
	56,961
	28,565 28,396
	56,961

The Company’s estimated cash outflows related to the lease obligation for the 12 months ending are as follows:

March 31, 2023 March 31, 2024 March 31, 2025 March 31, 2026 March 31, 2027	$ 35,056 9,692 9,940 10,188 10,437
	75,313

8 Investment

On November 7, 2019, TrustBIX invested US$250,000 in a Calgary, Alberta-based company, Provision Analytics Inc., through a convertible debenture offering maturing in 24 months. It accrued simple interest on an annual basis at the rate of 2.5% per annum.

The investment plus accrued interest converted into non-marketable preferred shares on November 23, 2021 at the transaction price of US$262,997 ($333,427). No significant changes were recorded to initial fair value measurement as at March 31, 2022 (note 12).

The Company does not have control or significant influence over Provision Analytics and has no participation in its policy-making processes. Each preferred share shall be convertible, at the option of the holder into common shares.

9 Loan payable

On July 27, 2020, the Company entered into a contribution agreement with Western Economic Diversification Canada (WD) for a repayable financial contribution under the Regional Relief and Recovery Fund. Under the

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2022

TrustBIX Inc.

contribution agreement, WD supported the Company with an investment of $1,000,000 for general working capital requirements (the “Contribution”). Repayment of the Contribution commences on January 31, 2023 and continues in equal monthly instalments until the Contribution is fully repaid by December 31, 2025. The Contribution is unsecured and non-interest bearing, unless repayment is not made as scheduled.

The loan payable was initially recognized at a fair value of $506,300. The initial carrying value of the loan payable was calculated using the effective interest rate method, discounting estimated cash flows using the Company’s effective interest rate of 18%. The difference between the $1,000,000 loan proceeds received and the initially recognized carrying value was treated as a government grant and recognized in other income in the consolidated statements of loss and comprehensive loss.

The short-term and long-term components of loan payable at March 31, 2022 are as follows:

Current loan payable Non-current loan payable	$ 83,250 588,585
	671,835

Anticipated cash outflows on the loan payable as at March 31, 2022 are as follows:

Remainder of fiscal 2022 Fiscal 2023 Fiscal 2024 Fiscal 2025 Fiscal 2026	$ - 249,750 333,000 333,000 84,250
	1,000,000

10 Share capital

Authorized

Unlimited common shares, with no par value

Unlimited preferred shares, voting, convertible, designated as Series 1 and Series 2

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2022

TrustBIX Inc.

a) Common shares

Issued

Balance as at September 30, 2020 Issued pursuant to private placement (i) Balance as at March 31, 2021 Balance as at September 30, 2021 Issued pursuant to private placement (ii) Issued pursuant to exercise of options (note 10(d)) Issued pursuant to acquisition of Insight (iii) Issued pursuant to private placement (iv) Balance as at March 31, 2022	Number $ 27,860,913 7,977,154 10,500,000 1,475,570
	38,360,913 9,452,724
	Number $ 38,385,913 9,457,445 4,406,250 684,591 133,334 20,000 30,000,000 1,771,125 1,475,445 168,045
	74,400,942 12,101,206

• (i) Private placement of 10,500,000 shares

On February 1, 2021, the Company closed a private placement for gross proceeds of $2,100,000 or 10,500,000 units at a price of $0.20 per unit. Each unit was comprised of one common share and one common share purchase warrant, entitling the holder to purchase one common share at a price of $0.30 for a period of one year from the date of closing.

The gross proceeds of $2,100,000 were allocated between share capital – issued and warrants in the amounts of $1,597,344 and $502,656, respectively. Share issue costs of $160,094 were allocated between share capital – issued and warrants in the amounts of $121,774 and $38,320, respectively.

The fair value of the warrants in the amount of $502,656 was determined using the Black-Scholes option pricing model with the following assumptions: stock price of $0.20, exercise price of $0.30, volatility of 93.6%, an expected life of one year, a dividend yield of nil% and a risk-free interest rate of 0.16%.

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2022

TrustBIX Inc.

• (ii) Private placement of 4,406,250 shares

On December 31, 2021, the Company completed a non-brokered private placement, which consisted of the issuance of 4,406,250 common shares at a subscription price of $0.16 per common share for gross proceeds of $705,000. Share issue costs of $20,409 were netted against share capital issued.

• (iii) Issued pursuant to acquisition of Insight

In connection with the acquisition of Insight, the Company issued 30,000,000 common shares, which include 20,000,000 common shares to be released contingent upon achieving certain milestones (Note 4). Share issue costs of $28,875 have been netted against share capital issued.

• (iv) Private placement of 1,475,445 shares

On February 2, 2022, the Company announced a non-brokered private placement financing for up to 11,111,111 units (“Units”) at a price of $0.18 per Unit for gross proceeds of up to $2,000,000. On March 14, 2022, the Company partially closed on the non-brokered private placement and issued 1,475,445 Units at a subscription price of $0.18 per Unit for gross proceeds of $265,580. Cash received for the three-month period ended March 31, 2022 was $255,580, and the remaining $10,000 of the gross proceeds are recorded in accounts receivable and was received subsequent to March 31, 2022. In addition, at March 31, 2022, the Company also received gross proceeds of $722,000 committed to purchase a further 4,011,112 Units (note 10(b)).

Each Unit consists of one common share and one common share purchase warrant, which entitles the holder to purchase one common share at a price of $0.30 for a period of eighteen months from the date of closing. If after four months and one day from the date of closing, the trading price of the common shares on the principal market on which such shares trade closes at a price that is equal to or exceeds $0.50 per common share for twenty consecutive trading days, the Company will have the right to accelerate the expiry date of the warrants. In the event of acceleration, the expiry date will be accelerated to a date that is thirty days after the date that written notice has been given to the warrant holder or the date that the Company issues a press release announcing the exercise of the acceleration right. The securities issued under the private placement are subject to a four-month hold period from the time of closing.

The gross proceeds of $265,580 were allocated between share capital – issued and warrants in the amounts of $178,903 and $86,677, respectively. Share issue costs of $16,212 have been allocated between share capital – issued and warrants in the amounts of $10,858 and $5,354, respectively.

The fair value of the warrants in the amount of $86,677 was determined using the Black-Scholes option pricing model with the following assumptions: stock price of $0.18, exercise price of $0.30, volatility of 99.1%, an expected life of eighteen months, a dividend yield of nil% and a risk-free interest rate of 1.6%.

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2022

TrustBIX Inc.

b) Share capital – committed

Balance as at September 30, 2020 and March 31, 2021 Balance as at September 30, 2021 Committed to issue pursuant to private placement (note 10(a)(iv) Balance as at March 31, 2022 Warrants Balance as at September 30, 2020 Issued (note 10(a)(i)) Balance as at March 31, 2021 Balance as at September 30, 2021 Issued (note 10(a)(iv)) Expired Balance as at March 31, 2022	Number  committed $ - -
	- - 4,011,112 722,000
	4,011,112 722,000
	Number $ 4,254,645 403,719 10,500,000 464,336
	14,754,645 868,055
	10,749,645 468,408 1,475,445 81,323 (10,749,645) (468,408)
	1,475,445 81,323

c) Warrants

The expiration dates of warrants outstanding as at March 31, 2022 were as follows:

Expiration date September 14, 2023	Warrants outstanding number Exercise price $ 1,475,445 0.30

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2022

TrustBIX Inc.

d) Stock options and compensation expense

A summary of the stock options outstanding as at March 31, 2022 and 2021 and changes during the periods ended on those dates were as follows:

Outstanding – Beginning of period Granted Exercised Forfeited Outstanding – End of period Options exercisable – End of period	March 31, 2022 Number Weighted average exercise price $ 2,972,404 0.40 3,815,000 0.27 (133,334) 0.15 (147,222) 0.46	March 31, 2021
		Number Weighted average exercise price $ 3,017,856 0.40 200,000 0.50 - - - -
	6,506,848 0.33	3,217,856 0.40
	3,638,453 0.37	2,835,950 0.38

As at March 31, 2022, the Company’s stock option plan allows a maximum of 7,675,515 common shares of the Company for issuance. Options grated during the three months ended March 31, 2022 were as follows:

• 2,715,000 options were issued to directors, officers, employees and non-employees, exercisable at $0.30 and vest one-third immediately, one-third on the 12-month anniversary date of the grant and one-third on the 24-month anniversary date, for a five year term;

• 800,000 options were issued to non-employees, exercisable at $0.20 and vest one-quarter after each subsequent three-month period from date of grant, for a one year term; and

• 300,000 options were issued to non-employees, exercisable at $0.20 and vest 50% immediately and 50% three months from the date of grant, for a one year term.

The fair value of the 800,000 options granted to non-employees was measured at the value of services the Company received.

The Company used the Black-Scholes option pricing model to estimate the fair value of the 2,715,000 and 300,000 options granted. The Company considered historical volatility of its common shares as well as industry benchmarking in estimating its future stock price volatility. The risk-free interest rate for the expected life of the options was based on the yield available on government benchmark bonds with an approximate equivalent remaining term at the time of the grant. The expected life is based on the

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2022

TrustBIX Inc.

contractual term, taking into account expected director, employee and non-employee exercise and expected post-vesting employment termination behaviour.

The following weighted average assumptions were used to estimate the Black-Scholes fair value of the options granted during the three months ended March 31, 2022:

Annualized volatility	95.7%
Risk-free interest rate	1.5%
Expected life of options in years	3.7
Dividend rate	nil%
Exercise price	$0.29
Market price on date of grant	$0.165
Fair value per common share option	$0.09

Stock-based compensation expense for the three and six months ended March 31, 2022 was $174,601 and $175,852, respectively (2021 – $10,482 and $35,858, respectively), with a corresponding increase in contributed surplus included in shareholders’ equity.

The following table summarizes information on stock options outstanding as at March 31, 2022:

Exercise price $ 0.15 0.20 0.30 0.50 0.60	Number outstanding Weighted average remaining contractual life in years 801,663 1.58 1,100,000 4.84 2,715,000 4.84 1,590,000 1.74 300,185 3.50 6,506,848 3.62	Options exercisable 801,663 150,000 905,000 1,581,667 200,123
		3,638,453

TrustBIX Inc.

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2022

11 Loss per share

Net loss Weighted average number of common shares outstanding – basic and diluted Basic and diluted loss per share	Three months ended March 31, 2022 $ March 31, 2021 $ (1,039,547) (510,613)	Six months ended
		March 31, 2022 $ March 31, 2021 $ (1,648,673) (1,128,998)
	# # 45,799,747 35,363,510	# # 44,279,430 31,570,989
	$ $ (0.02) (0.01)	$ $ (0.04) (0.04)

For the three and six-month periods ended March 31, 2022 and 2021, potential shares issuable in exchange for warrants and all stock-based payment awards have been excluded in the diluted loss per share calculation as their effects would have been anti-dilutive.

12 Financial instruments

For accounting recognition and measurement purposes, cash, accounts receivable, accounts payable and accrued liabilities and loan payable are classified as amortized cost. The carrying value of cash, accounts receivable and accounts payable and accrued liabilities approximates their fair value due to the immediate or short-term maturity of these financial instruments. The loan payable was measured using the estimated incremental borrowing rate and approximates fair value.

The non-marketable equity securities in Provision Analytics (note 8) are an investment in a privately held company without readily determinable market values and is classified as Level 3. The Company classifies the non-marketable equity securities in Provision Analytics at fair value through profit or loss.

Financial instruments recognized on the condensed consolidated statements of financial position at fair value are classified in a hierarchy based on the significance of the estimates used in their measurement, as follows:

• Level 1 – Quoted prices in active markets for identical assets or liabilities.

• Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

• Level 3 – Inputs for the asset or liability that are not based on observable market data.

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2022

TrustBIX Inc.

During the three and six months ended March 31, 2022 and 2021, there have been no transfers between levels of the fair value hierarchy.

13 Related party transactions

During the periods ended March 31, 2022 and 2021, the Company incurred the following amounts in the normal course of business and they have been valued at amounts that are considered established and agreed to by the related parties:

Sublease rental income from a company controlled by a director and from a company controlled by family members of a director Exercise of warrants/options and purchase of common shares and units in private placement (notes 10(a)(c)(d)) by directors and officers Consulting fees to companies controlled by family members of a director Office and administrative services to family members of a director Project management services to a company controlled by a member of key management	Three months ended March 31, 2022 $ March 31, 2021 $ (2,868) (4,203) (20,000) (476,469) 8,803 3,168 13,773 6,687 94,500 -	Six months ended
		March 31, 2022 $ March 31, 2021 $ (5,736) (7,336) (20,000) (476,469) 13,906 4,586 23,406 7,883 198,450 -
	94,208 (470,817)	210,026 (471,336)

The compensation to key management during the periods ended March 31, 2022 and 2021 are as follows:

Salaries, short-term employee benefits and stock-based compensation Consulting fees to a company controlled by a member of key management	Three months ended March 31, 2022 $ March 31, 2021 $ 235,898 183,548 26,303 -	Six months ended
		March 31, 2022 $ March 31, 2021 $ 347,177 360,290 52,606 -
	262,201 183,548	399,783 360,290

TrustBIX Inc.

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2022

During the three months ended March 31, 2022, the Company granted 2,475,000 stock options with a fair value of $230,420 to directors and members of key management, exercisable at $0.30 per option (note 10 (d)).

Accounts receivable

As at March 31, 2022, accounts receivable includes $960 (September 30, 2021 – $nil) due from a company controlled by a key manager of the Company, related to consulting services.

Accounts payable and accrued liabilities

Accounts payable and accrued liabilities include the following amounts due to:

Company controlled by a director for consulting fees Company controlled by a member of key management for project management services Member of key management for consulting fees Family members of a director for other services	March 31, 2022 $ September 30, 2021 $ - 7,875 63,000 63,000 17,535 17,536 8,823 -
	89,358 88,411

14 Supplementary cash flow information

Changes in items of non-cash working capital:

Accounts receivable Inventory Deposits and prepaid expenses Accounts payable and accrued liabilities Unearned revenue	Three months ended March 31, 2022 $ March 31, 2021 $ (122) (15,783) 1,390 4,018 95,893 (22,926) 74,013 (216,692) 81,188 19,359	Six months ended
		March 31, 2022 $ March 31, 2021 $ 69,681 (70,251) (5,703) (6,948) (207,119) 2,660 211,521 170,730 8,060 31,696
	252,362 (232,024)	76,440 (213,573)

15 Liquidity risk

The Company’s liabilities have the following amounts that mature within one year:

TrustBIX Inc.

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2022

	$
Accounts payable and accrued liabilities	661,450
Lease liability	28,565
Loan liability	83,250

The Company’s long-term liabilities include a lease liability for $28,396 (note 7) and a loan payable for $588,585 (note 9).

Liquidity risk is the risk the Company will encounter difficultly in meeting financial obligations as they come due. See note 1 for additional disclosure on the Company’s financial condition. The Company manages its liquidity risk through the management of its capital structure and financial leverage. It also monitors its cash position to its actual cash position and timing of payments to suppliers, and determines if sufficient funds are available when payments come due. The Board of Directors reviews and approves any material transactions out of the ordinary course of business.

16 Government assistance

Government assistance consists of grants from PIC and IRAP. These grants are accounted for as a reduction of related expenditures and are recorded when there is reasonable assurance that the Company has complied with the terms and conditions of the approved grant program.

PIC

On March 31, 2021 the Company signed an agreement with PIC, Farmers Edge Inc., and OPIsystems Inc. to create a platform for Canada's plant-based food, feed and ingredient sector. The project is partially funded through PIC, up to a maximum of $334,057. As at March 31, 2022, the Company had a cash advance of $nil (September 30, 2021 – $62,868) related to the project. This cash advance was recorded in accounts payable and accrued liabilities and was recognized as a reduction of eligible expenses as incurred. For the three and six months ended March 31, 2022, the Company recognized funding of $44,431 and $83,399, respectively, in research and development expenses (2021 – $nil) related to the project.

IRAP

On April 1, 2021, the Company received approval of funding up to $300,000 from the IRAP, to develop traceability of products and sustainability metrics for poultry produced using Arden Biotechnology Ltd.’s natural feed supplement, Sustavian. For the three and six months ended March 31, 2022, the Company recognized funding of $33,261 and $60,031, respectively, in research and development expenses (2021 – $nil) related to the project.

Wage subsidy

For the three and six months ended March 31, 2022, the Company received $nil and $8,214, respectively, (2021 – $8,902 and $29,508, respectively) from the Canada Emergency Wage Subsidy, which is netted against wages and benefits.

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2022

TrustBIX Inc.

17 Segment disclosures

Management has organized the Company under two reportable segments: ViewTrak, the development and sale of information solutions for the livestock industry and related services, and BIX, which leverages blockchain-derived technology and unique incentive solutions to deliver independent validation of food provenance and sustainable production practices within the agri-food supply chain.

Revenue from external customers Expenses Amortization and depreciation Other income (expenses) Net loss	Three months ended March 31, 2022 ViewTrak $ BIX $ Consolidated $ 343,216 68,510 411,726 (1,075,410) (302,551) (1,377,961) (13,463) (25,398) (38,861) (34,451) - (34,451)
	(780,108) (259,439) (1,039,547)

The amortization of the Company’s Insight software for the three months ended 2022 was $24,869 and was included in total BIX amortization and deprecation in the table above.

Revenue from external customers Expenses Amortization and depreciation Other income (expenses) Net loss	Three months ended March 31, 2021 ViewTrak $ BIX $ Consolidated $ 537,571 215,684 753,255 (811,700) (375,315) (1,187,015) (13,162) (13,784) (26,946) (49,907) - (49,907) (337,198) (173,415) (510,613)

TrustBIX Inc.

Notes to Interim Condensed Consolidated Statements (Unaudited)

March 31, 2022

Revenue from external customers Expenses Amortization and depreciation Other income (expenses) Net loss	Six months ended March 31, 2022 ViewTrak $ BIX $ Consolidated $ 691,115 142,872 833,987 (1,713,932) (648,914) (2,362,846) (27,149) (25,927) (53,076) (66,738) - (66,738)
	(1,116,704) (531,969) (1,648,673)

The amortization of the Company’s Insight software for the six months ended 2022 was $24,869 and was included in total BIX amortization and deprecation in the table above.

Revenue from external customers Expenses Amortization and depreciation Other income (expenses) Net loss	Six months ended March 31, 2021 ViewTrak $ BIX $ Consolidated $ 904,133 269,354 1,173,487 (1,409,360) (741,941) (2,151,301) (26,267) (34,198) (60,465) (90,719) - (90,719)
	(622,213) (506,785) (1,128,998)

Geographical segmentation

The Company’s segments are managed on a worldwide basis. Substantially all of the Company’s assets are located in Canada.

The following is a summary of revenue by geographic location in which the Company’s customers are located for the three and six months ended:

TrustBIX Inc.

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2022

Canada United States Other	Three months ended March 31, 2022 $ March 31, 2021 $ 218,936 397,199 154,879 263,348 37,911 92,708	Six months ended
		March 31, 2022 $ March 31, 2021 $ 440,863 618,202 344,686 372,601 48,438 182,684
	411,726 753,255	833,987 1,173,487

18 Subsequent events

On April 5, 2022, the Company closed the final tranche of the non-brokered private placement of 4,848,889 Units at a price of $0.18 per Unit for gross proceeds of $872,800, which included the 4,011,112 Units for gross proceeds of $722,000 included in share capital – committed at March 31, 2022 (note 10(b)). The Company closed the first tranche of 1,475,445 Units for gross proceeds of $265,580 on March 14, 2022 (note 10(a)(iv)), resulting in a total private placement of 6,324,334 Units for gross proceeds of $1,138,380.