Cautionary Statement





This Management's Discussion and Analysis includes a number of forward-looking
statements that reflect our current views with respect to future events and
financial performance. Forward-looking statements are often identified by words
like: "believe," "expect," "plan", "estimate," "anticipate," "intend,"
"project," "will," "predicts," "seeks," "may," "would," "could," "potential,"
"continue," "ongoing," "should" and similar expressions, or words which, by
their nature, refer to future events. You should not place undue certainty on
these forward-looking statements, which apply only as of the date of this Form
10-K. These forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical results or from our predictions. We undertake no obligation to update
or revise publicly any forward-looking statements, whether because of new
information, future events, or otherwise.



Overview



MCX Technologies Corporation ("we," "us," "our," or the "Company") intends to
acquire or develop a technologies that would become the Company's new operating
platform which may include innovations directed toward the internet's evolution
into the Web 3. During 2021 and into the first quarter of 2022, through our
subsidiary The Collective Experience LLC we generated revenue by delivering
digital transformation solutions to customer centric organizations through
integrated marketing, data science, and commerce. We have ceased the operations
under TCE and are now transitioning the focus of the Company toward new
technologies.



The Company formed a wholly owned subsidiary, McorpCX, LLC ("McorpCX LLC") as a
limited liability company in the state of Delaware on December 14, 2017. On
August 16, 2018, the Company entered into a contribution agreement with McorpCX
LLC pursuant to which the Company transferred to McorpCX LLC all the Company's
assets and liabilities related to the Company's customer experience consulting
business, excluding the underlying technology and databases related thereto
which remained with the Company.



Effective August 3, 2020, the Company sold all of its membership interests in
McorpCX, LLC to mfifty, LLC, a California limited liability company controlled
by Michael Hinshaw, the then current President of McorpCX LLC (the "Purchaser").
Since the Company's professional and related consulting services business, which
constituted substantially all of the Company's operations at the time of the
sale of McorpCX LLC, was conducted through McorpCX LLC, the sale of McorpCX LLC
represented a strategic shift that had a major effect on the Company's
operations and financial results.



As consideration for the sale of McorpCX LLC, the Company received a total of
$352,000 in cash consisting of $100,000 received upon the signing of the
purchase agreement and $252,000 received at the closing of the transaction along
with a $756,000 promissory note. The promissory note has an initial annual
interest rate of 0.99% (to be recalculated at the end of each twelve-month
period subsequent to the date of the note based on the annual Applicable Federal
Rate for mid-term loans on the first business day following each such
twelve-month period) accruing daily on the outstanding balance of the note, and
monthly principal payments are payable to the Company over a term of four or
more years. Monthly principal payments to the Company were initially $7,292 per
month for the first twelve months following the date of the note, and then
during each subsequent twelve-month period are based on the annual revenues of
McorpCX, LLC. On June 11, 2021, the Company and the Purchaser entered into an
amendment to the promissory note whereby the Purchaser agreed to pay the Company
One Hundred Thousand Dollars ($100,000) on or before July 1, 2021 to be applied
towards the outstanding principal amount of the promissory note and then going
forward to pay the remaining principal amount in installments of Twenty Thousand
Dollars ($20,000) each due on the first day of each month commencing on August
1, 2021 until the principal amount is paid in full, with the final payment being
the remaining unpaid outstanding balance due at that time. The amendment to the
promissory note also provides that the promissory note will be considered paid
in full if any of the following occurs: (i) the Purchaser pays at least 90% of
the outstanding balance due (principal and interest) under the promissory note
by December 31, 2021; (ii) the Purchaser pays at least 95% of the outstanding
balance due under the promissory note by June 30, 2022; and (iii) the Purchaser
pays at least 97.5% of the outstanding balance due (principal and interest)
under the promissory note by December 31, 2022. The Company has received a total
of $579,378 as of the date of this report, which is less than 97.5% of the
original outstanding balance, and as such the promissory note is not considered
paid in full. The note is secured by the Purchaser's ownership interest in
McorpCX LLC.



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On November 12, 2020, the Company formed a wholly owned subsidiary, The
Collective Experience, LLC (the "Collective Experience" or "TCE") as a Delaware
limited liability company. The Company is currently providing all of its digital
transformation and marketing management consulting services, which was the
Company's sole revenue generating operations, through the Collective Experience.



In December 2019, COVID-19 was reported in Wuhan, China and has since
extensively impacted the global health and economic environment. The Company is
subject to risks and uncertainties as a result of the COVID-19 pandemic.
COVID-19 infections and health risks, including from variants, continue. The
severity of the impact of the COVID-19 pandemic on the Company's business will
depend on a number of factors, including, but not limited to, the duration and
severity of the pandemic and the extent and severity of the impact on the
Company's customers, all of which are uncertain and cannot be predicted. The
Company's future results of operations and liquidity could be adversely impacted
by delays in payments of outstanding receivable amounts beyond normal payment
terms, supply chain disruptions and uncertain demand, and the impact of any
initiatives or programs that the Company may undertake to address financial and
operational challenges faced by its customers. As of the date of issuance of
these consolidated financial statements for the year ended December 31, 2022,
the Company has not, as a result of the COVID-19 pandemic, had any significant
additional financial losses or seen a negative impact on its liquidity, but the
extent to which the COVID-19 pandemic may materially impact the Company's future
financial condition, liquidity, or results of operations remains uncertain.



Sources of Revenue



Our only source of revenue was derived from providing digital transformation
services through our subsidiary The Collective Experience LLC, that included
brand strategy, data science, pricing science, customer experience management
consulting and implementation in support of these strategies. As of April 1,
2022, TCE ceased signing new client engagements since we are no longer pursuing
that segment in order to focus on alternative technologies.



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Operating Expenses



Cost of Goods Sold



Cost of goods sold consisted primarily of expenses directly related to providing
professional and consulting services. Those expenses include contract labor,
third-party services, and materials and travel expenses related to providing
professional services to our clients.

General and Administrative Expenses





General and administrative expenses consist primarily of finance and accounting,
legal, software subscriptions, insurance, stock compensation expense, client
delivery, and sales and marketing. These expenses also include contract
services, as well as marketing and promotion costs, professional fees, software
license fee expenses, administrative costs, insurance, rent and a portion of
travel expenses and other overhead, which are categorized as "other general and
administrative expenses" in our consolidated financial statements. In addition,
the other general and administrative expenses include the professional fees,
filing, and registration costs necessary to meet the requirements associated
with having to file reports with the United States Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended, as well as
having our stock listed on the TSX Venture Exchange in Canada and quoted on the
OTC Pink Sheets in the United States.

Critical Accounting Policies and Estimates





Our consolidated financial statements are prepared in accordance with U.S.
generally accepted accounting principles ("GAAP"). The preparation of these
consolidated financial statements requires us to make estimates and assumptions
that affect the reported amounts of assets, liabilities, revenue, expenses and
related disclosures. We evaluate our estimates and assumptions on an ongoing
basis.



Our estimates are based on historical experience and various other assumptions
that we believe to be reasonable under the circumstances. Our actual results
could differ from these estimates. We believe that the assumptions and estimates
associated with revenue recognition have the greatest potential impact on our
consolidated financial statements.



Revenue Recognition

The Company's revenue consisted primarily of professional and consulting services, as well as reimbursable expenses billed to clients, software-enabled product sales and other revenues. Other revenue included reimbursement of related travel costs and out-of-pocket expenses.





The Company's consulting services were contracted under master terms and
conditions with statements of work ("SOW") defined for each project. A typical
consulting SOW would span a period of 60-180 days and will usually be billed to
the client based on certain milestones being achieved throughout the SOW. The
Company recognized revenue based upon a percentage of completion of each SOW
during each project. In addition, we typically incur travel and other
miscellaneous expenses during work on each SOW which we bill to our clients for
reimbursement. The travel and miscellaneous expenses were recognized in revenue
on a percentage of work complete basis.  In addition, some clients would enter
into annual or longer-term contracts that will have a monthly retainer for
general consulting and project services.  The revenue for these engagements was
recognized on straight-line basis monthly during the term of the contract.



Contract costs, such as commissions, are typically incurred contemporaneously
with the pattern of revenue recognition and, as such, are expensed as incurred.
See Note 3 Revenue Recognition for further information.



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Income Taxes



No provision for income taxes at this time is being made due to the offset of
cumulative net operating losses. A full valuation allowance has been established
for deferred tax assets based on a "more likely than not" threshold. The ability
to realize deferred tax assets depends on our ability to generate sufficient
taxable income within the carry forward periods provided under the United States
Internal Revenue Code of 1986, as amended and the rules promulgated thereunder.
While the Company's statutory tax rate can vary depending on taxable income
level, the effective tax rate is currently 0% mostly because of the valuation
allowance described above. The Company does not have any material uncertainties
with respect to its provisions for income taxes.



Stock-Based Compensation



Stock-based compensation cost is measured at the grant date using a
Black-Scholes valuation model and is recognized as expense over the requisite
service period. Determining the fair value of stock-based awards at the grant
date requires judgment and assumptions, including expected volatility. In
addition, judgment is also required in estimating the amount of stock-based
awards that are expected to be forfeited. If actual results differ significantly
from these estimates, stock-based compensation expense and our results of
operations could be impacted.



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Results of Continuing Operations





Revenues & Cost of Goods Sold



During the year ending December 31, 2022, we had $101,409 in revenue recognized
as well as the related cost of goods sold of $99,350 generated through
continuing operations from one customer contracts entered into in 2021 that
carried over into 2022. During the year ending December 31, 2021, we had
$752,167 in revenue recognized as well as the related cost of goods sold of
$380,247 generated through continuing operations from six customer contracts
entered into in 2021 and two customer contracts that carried over from 2020.



                            Year Ended              Change from       Percent Change
                        2022           2021         Prior Year       from Prior Year
Net Operating Loss   $ (460,003 )   $ (359,536 )   $    (100,467 )                 28 %




For the year ended December 31, 2022 we had net operating loss of $460,003
compared to a net operating loss of $359,536 in 2021. The increase in net
operating loss in 2022 compared to 2021 was primarily a result of a decrease in
revenue generated in 2022, and expenses associated with the winding up of the
TCE operations.



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                         Year Ended          Change from       Percent Change
                     2022        2021        Prior Year       from Prior Year
Salaries and Wages   $   0     $ 39,066     $     (39,066 )               (100 %)




Expenses attributable to salaries and wages decreased by $39,066 during the year
ended December 31, 2022 compared to 2021 due to the elimination of stock
compensation expenses related to the vesting of previously granted options as
those options have been fully vested and expensed during 2021.



                          Year Ended            Change from       Percent Change
                      2022         2021         Prior Year       from Prior Year
Contract Services   $ 75,212     $ 291,411     $    (216,199 )                (74 %)

Contract services expenses decreased during the year ended December 31, 2022 compared to 2021 due to management actively seeking to lower costs being provided by contractors in 2022, compared to 2021. In addition, while the Company is transitioning to Web 3 technologies, we have classified all executive, finance, and administrative services under Other General and Administrative expense.





                                          Year Ended              Change from       Percent Change
                                      2022           2021         Prior

Year from Prior Year Other General and Administrative $ 386,850 $ 400,979 $ (14,129 )

                 (4 %)

Other general and administrative costs decreased by $14,129 during the year ended December 31, 2022 compared to 2021 primarily due to an overall decrease in sales, marketing, and travel expenses in 2022 compared to 2021, offset by a one-time commissions and fees payment associated with the sale of land in 2022.





                    Year Ended           Change from       Percent Change
                 2022        2021        Prior Year       from Prior Year
Other expense   $ 5,549     $ 1,142     $       4,407                  386 %

Other expenses were consistent year over year and primarily consisted of non-recurring other expenses, partially offset by interest income on related party notes receivable.





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Liquidity and Capital Resources

We measure our liquidity in a variety of ways, including the following:






                             December 31,       December 31,
                                 2022               2021
Cash and cash equivalents   $        2,595     $       51,393
Working capital             $      (98,381 )   $       49,542




Anticipated Uses of Cash

As of December 31, 2022, our cash and cash equivalents and working capital had decreased to $2,595 and a negative $98,381, respectively, from $51,393 and $49,542 as of December 31, 2021.





For the year ended December 31, 2022 and 2021, we were able to finance our
operations with cash generated through cash on hand as well as proceeds of the
sale of McorpCX, LLC that took place in 2020. The accompanying consolidated
financial statements have been prepared in accordance with GAAP applicable to a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities and commitments in the normal course of business.



During the year ended December 31, 2022, our primary uses of cash included third
party contractors to support our consulting services, general and administrative
expenses to support new business development activities.



We currently plan to fund our expenditures with cash on hand as well as cash
flows generated from new revenue sources as a digital transformation company. If
needed, the possibility may exist to raise additional capital through debt
financing and common stock sales. We do not intend to pay dividends in the
foreseeable future. In addition to the note receivable due to the Company, we
are seeking new sources of revenue to fund our capital requirements for our
business during the next 12 months.



We received total consideration of $1,108,000 consisting of $352,000 in cash and
a $756,000 promissory note for the sale of McorpCX, LLC, which was completed on
August 3, 2020, which applied to transaction costs as well as investment toward
becoming a technology solutions business. The collection of the promissory note
is expected to enable us to meet our liquidity needs over the next 12 months.
Notwithstanding the foregoing, our ability to continue as a going concern is
entirely dependent upon our ability to achieve a level of profitability, and/or
to raise additional capital through debt financing and/or through sales of
common stock. We cannot provide any assurance that profits from operations, if
any, will generate sufficient cash flow to meet our working capital needs and
service our existing obligations, nor that sufficient capital can be raised
through debt or equity financing.



We intend to continue to seek ways to transition our business to new
technologies, including through acquisitions, mergers, licensing arrangements,
joint-ventures new capital resources will be required. Depending on the size of
a transaction, the capital resources that will be required can be substantial.
The necessary resources may be generated from cash flow from operations, cash on
hand, the proceeds of the sale of McorpCX, LLC, borrowing against our assets or
the issuance of securities, and there is no assurance these capital resources
will be available to us when required.



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Cash Flow for the Years Ended December 31, 2022 and 2021





Operating Activities. Net cash used in operating activities decreased to
$367,957 for the year ended December 31, 2022 compared to net cash used in
operating activities of $488,037 in 2021. This decrease in cash used in
operating activities in 2022 compared to 2021 was primarily due to a $130,874
decrease in Accounts Receivable in 2022 compared to a $170,874 increase in
Accounts Receivable in 2021, as well as a smaller decrease in cash attributed to
deferred revenue in 2022 compared to 2021, offset by a $104,874 increase in net
loss from 2021 to 2022 and a $47,843 decrease in Accounts Payable in 2022
compared to a $111,766 increase in Accounts Payable in 2021.



Investing Activities. There was cash provided by investing activities of
$319,159 for the year ended December 31, 2022 due to cash received from the
related party notes receivable issued in connection with the sale of McorpCX,
LLC, as well as the sale of land during 2022. In 2021, cash provided by
investing activities of $241,465 was due to cash received from the related party
notes receivable issued in connection with the sale of McorpCX, LLC.

Financing Activities. There was no cash provided by or used in financing activities for the year ended December 31, 2022 or 2021.


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Contractual Obligations

We lease one office in Boise, ID on a month-to-month basis. We do not have any debt capital lease obligations.

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