TrustBIX Inc. — Interim / Quarterly Report 2021

Oct 1, 2021

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TrustBIX Inc.

Interim Condensed Consolidated Financial Statements (Unaudited) March 31, 2021

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

As at March 31, 2021

Assets Current assets Cash Accounts receivable Inventory Deposits and prepaid expenses Property and equipment (note 4) Intangible assets (note 5) Right-of-use assets(note 6) Investment(note 7) Liabilities Current liabilities Accounts payable and accrued liabilities Unearned revenue Lease liability (note 6) Loan payable(note 8) Lease liability (note 6) Shareholders’ Equity (Deficiency) Share capital issued(note 9(a)) Warrants(note 9(b)) Contributed surplus(note 9(c)) Capital reserve Deficit Nature of operations and going concern(note 1) Subsequent events (note 15)	March 31, 2021 $ September 30, 2020 $ 1,443,764 713,959 232,925 162,674 63,014 56,066 38,951 41,611
	1,778,654 974,310 40,243 37,976 11,533 45,731 61,689 82,546 326,167 341,332
	2,218,286 1,481,895
	396,666 567,396 297,677 265,981 44,318 40,531
	738,661 873,908 561,914 513,894 24,143 47,291
	1,324,718 1,435,093
	9,452,724 7,977,154 868,055 403,719 1,523,973 1,488,115 149,628 149,628 (11,100,812) (9,971,814)
	893,568 46,802
	2,218,286 1,481,895

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, 2021 and 2020

Balance – October 1, 2020 Net loss for the period Common shares issued in private placement, net of share issue costs (notes 9(a) and (b)) Stock-based compensation (note 9(c)) Balance – March 31, 2021 Balance – October 1, 2019 Net loss for the period Common shares issued in private placement, net of share issue costs (notes 9(a) and (b)) Common shares issued on exercise of warrants (notes 9(a) and (b)) Stock-based compensation (note 9(c)) Balance – March 31, 2020	Share capital $ Warrants $ Contributed surplus $ Capital reserve $ Deficit $ Total $ 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
	6,936,913 1,029,681 837,161 149,628 (7,636,704) 1,316,679 - - - - (1,706,978) (1,706,978) 259,963 38,577 - - - 298,540 550,326 (140,145) - - - 410,181 - - 117,412 - - 117,412
	7,747,202 928,113 954,573 149,628 (9,343,682) 435,834

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, 2021 and 2020

Revenue Licence Hardware and installation Professional and development services Maintenance Expenses Wages and benefits (note 9(c)) 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 (recovery) Foreign exchange loss (gain) Loss before other (expenses) income and income taxes Other (expenses) income Interest expense Interest income Accretion expense Unrealized foreign exchange on investment 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, 2021 $ March 31, 2020 $ 62,277 12,404 210,183 50,899 239,873 44,757 240,922 246,269	Six months ended
		March 31, 2021 $ March 31, 2020 $ 72,515 17,603 359,798 144,074 309,535 115,500 431,639 461,957
	753,255 354,329	1,173,487 739,134
	490,211 698,907 212,864 178,856 153,145 81,447 132,685 33,217 11,739 38,687 74,110 93,981 26,946 34,381 9,308 14,161 67,791 29,724 28,834 (3,578) 6,328 (7,038)	953,101 1,341,125 426,957 419,635 232,346 173,626 183,612 102,294 15,996 130,420 146,090 178,429 60,465 64,500 25,454 35,175 122,731 45,027 28,834 (7,747) 16,180 (16,248)
	1,213,961 1,192,745	2,211,766 2,466,236
	(460,706) (838,416)	(1,038,279) (1,727,102)
	(23,812) (4,722) 1,926 3,502 (24,546) - (3,475) 24,125	(27,623) (7,014) 3,574 7,352 (48,020) - (18,650) 19,786
	(49,907) 22,905	(90,719) 20,124
	(510,613) (815,511) - -	(1,128,998) (1,706,978) - -
	(510,613) (815,511)	(1,128,998) (1,706,978)
	(0.01) (0.03)	(0.04) (0.07)

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, 2021 and 2020

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 Interest income on investment Interest (income) expense Cash used in operating activities before changes in items of working capital Net change in items of non-cash working capital (note 12) Investing activities Purchase of property and equipment Purchase of investment (note 7) Increase in intangible assets Proceeds from government assistance Financing activities Lease payments (note 6) Proceeds from issuance of common shares and warrants in private placement (note 9) Proceeds from exercise of warrants (note 9) Share issue costs (note 9) Increase (decrease) in cash during the period Cash – Beginning of period Cash – End of period	Three-months ended March 31, 2021 $ March 31, 2020 $ (510,613) (815,511) 26,946 34,381 24,546 - 10,482 35,193 3,475 (24,125) (1,837) (2,290) 3,380 4,722	Six-months ended
		March 31, 2021 $ March 31, 2020 $ (1,128,998) (1,706,978) 60,465 64,500 48,020 - 35,858 117,412 18,650 (19,786) (3,485) (3,847) 7,191 7,014
	(443,621) (767,630) (232,024) 120,782	(962,299) (1,541,685) (213,573) 72,201
	(675,645) (646,848)	(1,175,872) (1,469,484)
	(5,552) (5,866) - - - - - -	(7,677) (9,735) - (329,039) - (24,705) - 18,355
	(5,552) (5,866)	(7,677) (345,124)
	(13,276) (13,275) 2,100,000 305,577 - 410,181 (160,094) (7,037)	(26,552) (22,891) 2,100,000 305,577 - 410,181 (160,094) (7,037)
	1,926,630 695,446	1,913,354 685,830
	1,245,433 42,732 198,331 446,117	729,805 (1,128,778) 713,959 1,617,627
	1,443,764 488,849	1,443,764 488,849

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

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2021

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; and

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

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

Going concern

These interim condensed 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, 2021, the Company had a net working capital of $1,039,993 compared to a net working capital of $100,402 as at September 30, 2020. For the three and six-month periods ended March 31, 2021, the Company incurred a net loss of $510,613 and $1,128,998, respectively ($815,511 and $1,706,978 net loss for the three and six-month periods ended March 31, 2020, respectively) and net cash outflow from operating activities of $675,645 and $1,175,872, respectively ($646,848 and $1,469,484 net cash outflow from operating activities for the three and six-month periods ended March 31, 2020). As at March 31, 2021, the Company had an accumulated deficit of $11,100,812 (September 30, 2020 – $9,971,814). In addition, the Company also has lease commitments in the amount of $68,461 as disclosed in note 6.

Current operations have been financed primarily from the issue of share capital, including the Private Placement closed on February 1, 2021 for gross proceeds of $2,100,000 or 10,500,000 units at a price of $0.20 per unit (note9(a)), along with revenues from the sale, installation and support of software and hardware of the ViewTrak segment. 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 food traceability and sustainability information. Management is actively pursuing new business opportunities related to the BIX platform to increase cash flows from operations.

Additionally, the Company is considering or is in the process of applying for provincial and/or federal government grant and funding programs including the Canada Emergency Wage Subsidy (CEWS). During

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2021

TrustBIX Inc.

the three and six-month periods ended March 31, 2021, the Company received $8,902 and $29,508, respectively from CEWS, which is netted against wages and benefits on the interim condensed consolidated statements of loss and comprehensive loss. The Company has also implemented a cost reduction program.

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, 2020, 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 21, 2021.

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.

3 Recent developments and impact on estimation uncertainty

In March 2020, the World Health Organization declared a global pandemic following the emergence and rapid spread of COVID-19. The outbreak and subsequent measures intended to limit the pandemic contributed to significant declines and volatility in financial markets. During the quarter ended March 31, 2021, the spread of COVID-19 resulted in a slowing of the agriculture and general business sectors and the closure of certain major meat packing plants, which has resulted in a slowing of meat packing activity. Consequently, farmers are faced with an oversupply of cattle and pork and declining selling prices to the meat packing plants, resulting in financial uncertainty with the Company’s customers.

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2021

TrustBIX Inc.

The full extent of the impacts of COVID-19 on the Company’s operations and future financial performance is currently unknown. It will depend on future developments that are uncertain and unpredictable, including the duration and spread of COVID-19, its continued impact on capital and financial markets on a macro-scale 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 Property and equipment

As at September 30, 2020 Cost Accumulated depreciation Net book value as at September 30, 2020 Cost – as at September 30, 2020 Additions Disposal Cost – as at March 31, 2021 Accumulated depreciation – as at September 30, 2020 Depreciation Disposal Accumulated depreciation – as at March 31, 2021 Net book value as at March 31, 2021	Computer hardware $ Computer software $ Office furniture and equipment $ Total $ 93,634 17,808 15,086 126,528 (61,816) (17,808) (8,928) (88,552)
	31,818 - 6,158 37,976
	93,634 17,808 15,086 126,528 7,677 - - 7,677 - - - -
	101,311 17,808 15,086 134,205
	(61,816) (17,808) (8,928) (88,552) (4,816) - (594) (5,410) - - - -
	(66,632) (17,808) (9,522) (93,962)
	34,679 - 5,564 40,243

TrustBIX Inc.

Notes to Interim Condensed Consolidated Statements (Unaudited)

March 31, 2021

5 Intangible assets

As at September 30, 2020 Cost Accumulated amortization Net book value as at September 30, 2020 Cost – as at September 30, 2020 Additions Cost – as at September 30, 2020 and March 31, 2021 Accumulated amortization – as at September 30, 2020 Amortization Accumulated amortization – as at March 31, 2021 Net book value as at March 31, 2021	BIX software $ Trademarks $ Total $ 244,959 8,092 253,051 (207,320) - (207,320)
	- 37,639 8,092 45,731
	244,959 8,092 253,051 - - -
	- 244,959 8,092 253,051
	(207,320) - (207,320) (34,198) - (34,198)
	(241,518) - (241,518)
	3,441 8,092 11,533

6 Leases

Below is a summary of the activity related to the Company’s right-of-use (ROU) assets for the period ended March 31, 2021.

ROU assets as at September 30, 2020 Additions Depreciation ROU assets as at March 31, 2021	$ 82,546 - (20,857)
	61,689

TrustBIX Inc.

Notes to Interim Condensed Consolidated Statements (Unaudited)

March 31, 2021

The following is a summary of the activity related to the Company’s lease liabilities for the period ended March 31, 2021:

ROU lease liabilities as at September 30, 2020 Additions Lease payments Accretion of lease liabilities ROU lease liabilities as at March 31, 2021 Of which are Current lease liabilities Non-current lease liabilities	$ 87,822 - (26,552) 7,191
	68,461
	44,318 24,143
	68,461

The Company’s estimated cash outflows related to the lease obligation are $53,103 and $25,613 within the 12 months ending March 31, 2022 and March 31, 2023, respectively.

7 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 accrues simple interest on an annual basis at the rate of 2.5% per annum. The investment plus accrued interest is convertible into preferred shares upon certain conversion events or maturity, whichever occurs first. Subsequent to the conversion to preferred shares, the Company has an option to immediately convert the preferred shares into common shares at a prescribed conversion ratio at the time of conversion.

The investment is considered a financial asset and is measured at fair value on initial recognition, which is considered the transaction price. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest (SPPI).

The investment in Provision Analytics Inc. does not represent SPPI and therefore is classified as a financial asset measured at fair value through profit or loss.

The Company recorded the investment initially at the transaction price of US$250,000 ($329,039) based on Level 3 fair value inputs, which included estimated future cash flows based on probable conversion outcomes discounted using the discount rate implicit to the convertible debenture terms. Subsequent measurement is determined considering Level 3 fair value inputs based on future cash flows based on probable conversion outcomes discounted using the discount rate implicit to the convertible debenture terms. During the three and six-months ended March 31, 2021, the Company recorded fair value adjustments related to the cash flows associated with the interest earned in the amount of $1,837 and $3,485, respectively. The Company also remeasured the investment for foreign currency loss in the amount of $3,475 and $18,650 during the three and six-months ended March 31, 2021, respectively. No other fair value adjustments were recorded.

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2021

TrustBIX Inc.

8 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 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.

Anticipated cash outflows on the loan payable as at March 31, 2021 are as follows:

Remainder of fiscal 2021 Fiscal 2022 Fiscal 2023 Fiscal 2024 Fiscal 2025 Fiscal 2026	$ - - 249,750 333,000 333,000 84,250
	1,000,000

9 Share capital

Authorized Unlimited common shares, with no par value Unlimited preferred shares, voting, convertible, designated as Series 1 and Series 2

a) Common shares

Issued

Balance as at September 30, 2019 Issued pursuant to private placement Issued pursuant to exercise of warrants (note 9(b)) Balance as at March 31, 2020	Number $ 25,359,720 6,936,913 509,294 259,963 1,367,269 550,326
	27,236,283 7,747,202

TrustBIX Inc.

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2021

Balance as at September 30, 2020 Issued pursuant to private placement Balance as at March 31, 2021	Number $ 27,860,913 7,977,154 10,500,000 1,475,570
	38,360,913 9,452,724

Private placement of 509,294 shares

On February 7, 2020, the Company completed a private placement, which consisted of the issuance of 509,294 units at a subscription price of $0.60 per unit. Each unit consisted of one common share and one-half common share purchase warrant (note 9(d)). Each whole common share purchase warrant entitles the holder to purchase a common share at a price of $0.90 per share for a period of two years from the closing date of February 7, 2020. If the trading volume of the common shares on the principal market on which such shares trade is equal to or exceeds $1.75 per common share for twenty consecutive trading days, the Company will have the right to accelerate the expiry date of the warrants. Gross cash proceeds of $305,577 were received in the three months ended March 31, 2020. The gross proceeds have been allocated between share capital – issued and warrants in the amounts of $266,091 and $39,486, respectively. Share issue costs of $7,037 have been allocated between share capital – issued and warrants in the amounts of $6,128 and $909, respectively.

The fair value of the warrants in the amount of $39,486 was determined using the Black-Scholes option pricing model with the following assumptions: stock price of $0.60, exercise price of $0.90, volatility of 68%, an expected life of two years, a dividend yield of nil% and a risk-free interest rate of 1.79%.

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 is comprised of one (1) common share in the capital of TrustBIX ("Common Share") and one (1) Common Share purchase warrant ("Warrant"), whereby each Warrant entitles the holder to purchase one (1) Common Share at a price of $0.30 for a period of one (1) year from the date of closing. If after four (4) months and one (1) 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 (20) 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 (30) days after the date that written notice has been given to the warrant holder or the date that TrustBIX has issued a press release announcing the exercise of the acceleration right; and thereafter, no further notification will be provided by the Company to the subscribers. The securities issued under the Private Placement are subject to a four-month hold period from the time of closing of the Private Placement.

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2021

TrustBIX Inc.

The gross proceeds of $2,100,000 have been allocated between share capital – issued and warrants in the amounts of $1,597,344 and $502,656, respectively. Share issue costs of $160,094 have been 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, average volatility of 93.6%, an expected life of one year, a dividend yield of nil% and an average riskfree interest rate of 0.16%.

b) Warrants

Balance as at September 30, 2019 Issued (note 9(a)) Warrants exercised (note9(a)) Balance as at March 31, 2020 Balance as at September 30, 2020 Issued (note 9(a)) Balance as at March 31, 2021	Number $ 10,483,301 1,029,681 254,645 38,577 (1,367,269) (140,145)
	9,370,677 928,113
	4,254,645 403,719 10,500,000 464,336
	14,754,645 868,055

The expiration dates of warrants outstanding as at March 31, 2021 were as follows:

Expiration date April 16, 2021 January 20, 2022 January 25, 2022 January 28, 2022 February 7, 2022	Warrants outstanding number Exercise price $ 4,000,000 0.75 2,967,343 0.30 3,665,000 0.30 3,867,657 0.30 254,645 0.90 14,754,645

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2021

TrustBIX Inc.

c) Stock options and compensation expense

A summary of the stock options outstanding as at March 31, 2021 and 2020 and changes during the periods ended on those dates is as follows:

Outstanding – Beginning of period Granted Outstanding – End of period Options exercisable – End of period	March 31, 2021 Number Weighted average exercise price $ 3,017,856 0.40 200,000 0.50	March 31, 2020
		Number Weighted average exercise price $ 2,939,997 0.35 - -
	3,217,856 0.40	2,939,997 0.35
	2,835,950 0.38	1,957,220 0.35

The Company’s stock option plan allows a maximum of 5,572,182 common shares of the Company for issuance.

A summary of the stock options granted are as follows:

Grant date Exercise price $ Fair value $ January 11, 2021 – Key management(f) 0.50 0.08 January 11, 2021 – Non-employees(b) (e) 0.50 0.08 September 30, 2020 – Directors(b) 0.60 0.05 September 30, 2020 – Key management(b) 0.60 0.05 September 30, 2020 – Non-employees (b)(e) 0.60 0.05 October 31, 2018 – Directors(a) 0.15 0.35 October 31, 2018 – Directors(b)(d) 0.15 0.36 October 31, 2018 – Key management(b) 0.15 0.36 October 31, 2018 – Employees(b) 0.15 0.36	Number 175,000 25,000
	200,000
	308,518 26,841 37,500
	372,859
	225,000 250,000 838,330 20,000

TrustBIX Inc.

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2021

December 17, 2018 – Directors(a) 0.50 0.21 December 17, 2018 – Directors(c)(d) 0.50 0.26 December 17, 2018 – Key management(c) 0.50 0.26 December 17, 2018 – Employees(c) 0.50 0.26	160,000 500,000 1,100,000 240,000
	3,333,330

• a) These options vest immediately and are exercisable the earlier of: (i) 90 days after the amalgamation as described in note 1; and (ii) 90 days after the date on which the option holder ceases to be a director of the Company.

• b) These options vest one-third immediately, one-third on the 12-month anniversary date and onethird on the 24-month anniversary date and are exercisable for a term of five years.

• c) These options vest one-third immediately, one-third on the 12-month anniversary date and onethird on the 24-month anniversary date and are exercisable for a term of five years. These options were initially granted at $0.30 per option. Subsequent to the initial approval, the terms of the options were amended to $0.50 per option.

• d) These options were granted to Directors of TrustBIX, the amalgamated company, as described in note 1.

• e) These options do not require any future performance obligations by the grantee.

• f) These options vest one-third immediately, one-third on the 12-month anniversary date and onethird on the 24-month anniversary date. Options expire December 29, 2025.

The Company used the Black-Scholes option pricing model to estimate the fair value of the 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 contractual term, taking into account expected director or 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 and six-months ended March 31, 2021:

Annualized volatility	91%
Risk-free interest rate	0.19%
Expected life of options in years	2.0
Dividend rate	nil%
Exercise price	$0.50
Market price on date of grant	$0.26
Fair value per common share option	$0.08

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2021

TrustBIX Inc.

Application of the fair value method resulted in charges to stock-based compensation expense for the three and six-months ended March 31, 2021 of $10,482 (2020 – $35,193) and $35,858 (2020 – $117,412), 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, 2021:

Exercise price $ 0.15 0.50 0.60	Number outstanding Weighted average remaining contractual life in years Options exercisable 979,997 2.58 979,997 1,865,000 2.93 1,731,667 372,859 4.50 124,286
	3,217,856 3.01 2,835,950

10 Related party transactions

During the periods ended March 31, 2021 and 2020, the Company paid (received) 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:

Rent paid to a company controlled by directors Sublease rental income received from two companies separately controlled by directors Exercise of warrants and purchase of common shares and units in private placement (notes 9(a) and (b)) by directors and officers Cybersecurity services paid to a company controlled by a director Other services paid to family members of a director Administration services paid to family members of a director	Three months ended March 31, 2021 $ March 31, 2020 $ - - (4,203) (3,850) (476,469) (420,181) 3,168 - 1,272 2,826 5,415 -	Six months ended
		March 31, 2021 $ March 31, 2020 $ - 6,178 (7,336) (8,857) (476,469) (420,181) 4,586 - 2,468 5,209 5,415 -
	(470,817) (421,205)	(471,336) (417,651)

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2021

TrustBIX Inc.

The compensation paid to key management personnel during the three and six-months ended March 31, 2021 and 2020 is as follows:

Three months ended Six months ended March 31, 2021 $ March 31, 2020 $ March 31, 2021 $ March 31, 2020 $ Salaries, short-term employee benefits and stock-based compensation 183,548 296,874 360,290 647,490 Consulting fees - 1,418 - 24,492 183,548 298,292 360,290 671,982 Accounts receivable As at March 31, 2021, accounts receivable includes $nil (2020 – $956) due from a company controlled by a director of the Company, related to sublease rental income, and $12,224 (2020 – $4,882) due from a director of the Company related to prepayment of business expenses. Loss per share Three months ended Six months ended March 31, 2021 $ March 31, 2020 $ March 31, 2021 $ March 31, 2020 $ Net loss (510,613) (815,511) (1,128,998) (1,706,978) # # # # Weighted average number of common shares outstanding – basic and diluted 35,363,510 25,881,716 31,570,989 25,619,292 $ $ $ $ Basic and diluted loss per share (0.01) (0.03) (0.04) (0.07)	Three months ended March 31, 2021 $ March 31, 2020 $ 183,548 296,874 - 1,418	Three months ended March 31, 2021 $ March 31, 2020 $ 183,548 296,874 - 1,418	Six months ended	Six months ended
			March 31, 2021 $ March 31, 2020 $ 360,290 647,490 - 24,492
	183,548 298,292		360,290 671,982
				March 31, 2021 $ March 31, 2020 $ (1,128,998) (1,706,978)
		# # 35,363,510 25,881,716		# # 31,570,989 25,619,292
		$ $ (0.01) (0.03)		$ $ (0.04) (0.07)

11 Loss per share

For the three and six-month periods ended March 31, 2021 and 2020, potentially dilutive securities 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.

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2021

TrustBIX Inc.

12 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, 2021 $ March 31, 2020 $ (15,783) 108,968 4,018 2,269 (22,926) 8,940 (216,692) 15,862 19,359 (15,257)	Six months ended
		March 31, 2021 $ March 31, 2020 $ (70,251) 25,893 (6,948) (7,247) 2,660 23,405 (170,730) 57,060 31,696 (26,910)
	(232,024) 120,782	(213,573) 72,201

13 Liquidity risk

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

	$
Accounts payable and accrued liabilities	396,666
Lease liability	44,318

The Company’s long-term liabilities include a loan payable for $561,914 (note 8) and a lease liability for $24,143 (note 6).

Anticipated cash outflows on the loan payable as at March 31, 2021 are as follows:

$

Remainder of fiscal 2021 Fiscal 2022 Fiscal 2023 Fiscal 2024 Fiscal 2025 Fiscal 2026	- - 249,750 333,000 333,000 84,250
	1,000,000

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2021

TrustBIX Inc.

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, ensuring that 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.

14 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 Other information Expenditures for additions to intangible assets Government assistance netted against intangible asset additions	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) - - - - - -

Revenue from external customers Expenses Amortization and depreciation Other income (expenses) Net loss Other information Expenditures for additions to intangible assets Government assistance netted against intangible asset additions	Three months ended March 31, 2020
	ViewTrak $ BIX $ Consolidated $ 324,329 30,000 354,329 (649,794) (508,570) (1,158,364) (13,968) (20,413) (34,381) 22,905 - 22,905 (316,528) (498,983) (815,511) - - - - - -

TrustBIX Inc.

Notes to Interim Condensed Consolidated Statements (Unaudited)

March 31, 2021

Revenue from external customers Expenses Amortization and depreciation Other income (expenses) Net loss Other information Expenditures for additions to intangible assets Government assistance netted against intangible asset additions Revenue from external customers Expenses Amortization and depreciation Other income (expenses) Net loss Other information Expenditures for additions to intangible assets Government assistance netted against intangible asset additions	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) (622,214) (506,784) (1,128,998) - - - - - - Six months ended March 31, 2020
	ViewTrak $ BIX $ Consolidated $ 656,334 82,800 739,134 (1,371,112) (1,030,624) (2,401,736) (23,938) (40,562) (64,500) 20,124 - 20,124 (718,592) (988,386) (1,706,978) - (24,705) (24,705) - 18,355 18,355

Geographical segmentation

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

TrustBIX Inc.

Notes to Interim Condensed Consolidated Statements (Unaudited) March 31, 2021

The following is a summary of revenue by geographic location in which the Company’s customers are located:

Canada United States Other	Three months ended March 31, 2021 $ March 31, 2020 $ 397,199 86,383 263,348 225,635 92,708 42,311	Six months ended
		March 31, 2021 $ March 31, 2020 $ 618,202 243,215 372,601 435,507 182,684 60,412
	753,255 354,329	1,173,487 739,134

15 Subsequent events

On May 5, 2021, the Company issued 5,000 common shares upon exercise of warrants at a price of $0.30 per common share for proceeds of $1,500.

On May 5, 2021, the Company issued 11,666 common shares upon exercise of stock options at a price of $0.15 per common share for proceeds of $1,750.