LOGIQ, INC. The following discussion and analysis of our financial condition and operating results should be read in conjunction with our consolidated financial statements and related notes to those statements included elsewhere in this report.
This document contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact contained in this document and the materials accompanying this document are forward-looking statements.
The forward-looking statements are based on the beliefs of our management, as well as assumptions made by and information currently available to our management. Frequently, but not always, forward-looking statements are identified by the use of the future tense and by words such as "believes," expects," "anticipates," "intends," "will," "may," "could," "would," "projects," "continues," "estimates" or similar expressions. Forward-looking statements are not guarantees of future performance and actual results could differ materially from those indicated by the forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our or our industry's actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by the forward-looking statements.
The forward-looking statements contained or incorporated by reference in this document are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended ("Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act") and are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. These statements include declarations regarding our plans, intentions, beliefs, or current expectations.
Among the important factors that could cause actual results to differ materially
from those indicated by forward-looking statements are the risks and
uncertainties described under "Risk Factors" in our Annual Report on Form 10-K
for the year ended
Forward-looking statements are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this document are made as of the date of this document and we do not undertake any obligation to update forward-looking statements to reflect new information, subsequent events, or otherwise.
Use of Terms
Except as otherwise indicated by the context and for the purposes of this report only, references in this report to:
? "
or "our," are to the business of
and AppLogiq;
?
? PAY/GOLogiq or Weyland International Perkasa, an Indonesian associate of the
Company;
? "SEC" are to the
? "Securities Act" are to the Securities Act of 1933, as amended;
? "Exchange Act" are to the Securities Exchange Act of 1934, as amended;
? "
States.
You should read the following plan of operation together with our financial statements and related notes appearing elsewhere in this quarterly report and the most recent Form 10-K and Form 10-Q. This quarterly report contains forward-looking statements that involve risks, uncertainties, and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors.
Overview
The Company offers solutions that help small-to-medium-sized businesses ("SMBs") to provide access to and reduce transaction friction of e-commerce for their clients globally. The Company's solutions are provided through (i) its core platform, "AppLogiq" (operated as CreateApp (https://www.createapp.com/), which allows SMBs to establish their point-of-presence on the web, and (ii) "DataLogiq", a digital marketing analytics business unit that offers proprietary data management, audience targeting and other digital marketing services that improve an SMB's discovery and branding within the vast e-commerce landscape.
The Company enables SMBs to create a mobile app for their business without the need of technical knowledge, high investment, or background in IT by utilizing "AppLogiq", which is a platform that is offered as a Platform as a Service ("PaaS") to the Company's customers. The Company's DataLogiq business unit offers online marketing solutions on a performance marketing and self-serve, Software as a Service ("SaaS") basis.
24
We provide our PaaS and digital marketing to SMBs in a wide variety of industry sectors. We believe that SMBs can increase their sales, reach more customers, and promote their products and services using our affordable and cost-effective solutions. We recognize revenue on a pay to use subscription basis when our customers use our PaaS platform to create mobile apps for their business and on our SaaS platform when provisioning services for their marketing campaigns. We also recognize revenue on CPL and other metrics for engagements undertaken on a performance marketing basis.
The Company continues to expand its portfolio of offerings and the industries they serve:
? In
the launch of its PayLogiq mobile payments platform in
? In the fall of 2019, the Company expanded its portfolio to short-distance food
delivery service with the launch of GoLogiq, a PaaS platform that provides
mobile payment capabilities for the local food delivery service industry in
Indonesia .
? In
the assets of
This acquired business, which the Company has rebranded as its DataLogiq
division, operates a consumer data management platform powered by lead
generation, online marketing, and multichannel reengagement strategies through
its owned and operated brands. DataLogiq has developed a proprietary data
management platform and integrated with several third-party service providers
to optimize the return on its marketing efforts. DataLogiq focuses on consumer
engagement and enrichment to maximize its return on acquisition through repeat
monetization of each consumer. DataLogiq also licenses its software technology
and provides managed technology services to various other e-commerce companies.
DataLogiq is located in
? On
thereby acquiring its self-serve MarTech Audience Targeting platform as a
further expansion of its DataLogiq product suite.
? On March 29, 2021 , the Company completed the acquisition of Rebel AI,
Inc., thereby acquiring its "The Rebel AI" advertising platform as a
further expansion of its DataLogiq product suite..
? On June 21, 2021 , the Company completed the IPO offering of 1,976,434
units of its securities, consisting of shares common stock and warrants
to purchase shares of common stock, on the NEO exchange in Canada .
Recent Corporate Developments
Amendment to Equity Incentive Plan
On
The Company's A&R Plan and amended form award agreements were approved by the
Company's Board of Directors on
25
Amendments to Bylaws - Adoption of Majority Voting Policy
On
Under the Policy, in an uncontested election, any director nominee who receives a greater number of votes "withheld" than votes "for" his or her election at a meeting of shareholders of the Company must promptly tender his or her resignation to the chairman of the Board. Following receipt of such resignation, the Governance Committee of the Board (the "Committee") will consider the resignation and recommend to the Board whether to accept such tendered resignation. Except in special circumstances, the Committee will be expected to accept and recommend acceptance of the resignation by the Board. A press release disclosing the Board's determination (and the reasons for rejecting the resignation, if applicable) will be issued within 90 days following the date of the relevant meeting of shareholders and a copy of the press release will be sent concurrently to the NEO Exchange, provided that the Company's common stock is then listed for trading on the NEO Exchange. The director's resignation, if accepted, will become effective immediately upon acceptance thereof by the Board.
Any director who tenders his or her resignation pursuant to the Policy will not participate in the recommendation of the Committee or the decision of the Board with respect to such resignation.
Subject to any restrictions imposed by applicable law, where the Board accepts a resignation in accordance with the Policy, the Board may (i) leave the director vacancy unfilled until the next annual meeting of shareholders, (ii) fill the vacancy through the appointment of a new director, or (iii) call a special meeting of shareholders at which a new candidate will be presented to fill the vacant position.
The Policy applies only in circumstances involving an uncontested election of directors. For purposes of the Policy, an "uncontested election" of directors of the Company means an election held at any meeting of shareholders called for, either alone or with other matters, the election of directors, with respect to which the number of nominees for election is equal to the number of positions on the Board to be filled through the election to be conducted at such meeting.
COVID-19 Effect
Due to the unprecedented effect and related impact of Covid-19 pandemic, the
Company has experienced a push back from the Company's resellers and white label
distributors from
Components of Results of Operations
Revenue (Service)
The Company's AppLogiq business segment's PaaS, operated as CreateApp provides the infrastructure allowing users to develop their own applications and IT services, which users can access anywhere via a smart mobile phone, web or desktop browser. The Company recognizes revenue on a pay-to-use subscription basis when our customers use our platform. For the territories licensed to our distributors and on a white label basis, we derive royalty income from the end user's use of our platform on a white label basis.
The Company maintains the PaaS software platform at its own cost. Any enhancements and minor customization for our resellers/distributors are not separately billed. Major new proprietary features are billed to the customer separately as development income while re-usable features are added to the features available to all customers on subsequent releases of our platform.
The Company's DataLogiq revenues are derived through the management of online advertising campaigns on behalf of customers, which include per-impression, and cost per acquisition ("CPA") arrangements as well as the delivery of qualified leads.
26
Cost of Revenue (Service)
Cost of revenue primarily consists of fees from cloud-based hosting services and personnel costs. Personnel costs consist of wages, bonuses, benefits, and stock-based compensation expenses. Allocated overhead costs consist of certain facilities and utility costs. We expect cost of revenue to increase in absolute dollars, as product revenue increases.
The Company's DataLogiq digital marketing analytics business segment cost of revenue is primarily generated by media cost to power our assets.
Operating Expenses
Our operating expenses consist of general and administrative, depreciation and amortization, and research and development expenses. Salaries and personnel-related costs, benefits, and stock-based compensation expense, are the most significant components of each category of operating expenses. Operating expenses also include allocated overhead costs for facilities and utility costs.
General and Administrative - General and administrative expense consists primarily of employee compensation and related expenses for administrative functions including finance, legal, human resources and fees for third-party professional services, as well as allocated overhead. We expect our general and administrative expense to increase in absolute dollars as we continue to invest in growing the business.
Depreciation and amortization - Depreciation and amortization expense consists primarily of amortization of development costs and trademark for our software platforms.
Research and Development - Research and development expense consists primarily of employee compensation and related expenses, allocated overhead, and developments to our website, e-commerce, and mobile app platforms. We expect our research and development expenses to increase in absolute dollars as we continue to invest in new and existing products and services.
Other Income (Expense), net
Other income consists of income received for activities outside of our core business. In 2021, this includes interest from US based financial asset money market funds.
Other (expense) consists of expense for activities outside of our core business. In 2021, DataLogiq incurred early withdrawal fees from an escrow account relating to Conversion Point Technologies.
Provision for Income Taxes
Provision for income taxes consists of estimated income taxes due to
27
Results of Operation
Results of Operations for the Three Months ended
The following sets forth selected items from our statements of operations and
the percentages that such items bear to net sales for the three months ended
© Edgar Online, source
