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 Quarterly Report on Form 10-Q. 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 December 31, 2021 filed with the Securities and Exchange Commission ("SEC"), and elsewhere in this document and in our other filings with the SEC. 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 refer to the following:

? "Logiq, Inc. (Delaware) (formerly known as Weyland Tech Inc) the "Company,"

"we," "us," or "our," are to the business of Logiq, Inc. (Delaware), a

Delaware corporation;

? DataLogiq and Logiq, Inc. (Nevada), a Nevada corporation, a business segment


    of the Company;

? AppLogiq, a former business segment of the Company, which is now owned by

GoLogiq (formerly Lovarra), which, prior to completion of the Spin Off, was a

majority owned subsidiary of the Company;

? "Lovarra" refers to a Nevada corporation ("GoLogiq") and a public reporting

majority owned subsidiary of the Company at that time, pursuant to which the

Company agreed to transfer its AppLogiq business to GoLogiq;

? "GOLogiq" refers to refers to a Nevada corporation ("GoLogiq") and a public

reporting company that, at the time, was a majority owned subsidiary of the

Company, also formerly known as Lovarra;

? PAY/GOLogiq or Weyland International Perkasa, an Indonesian associate of the


    Company;

? "SEC" refers to the Securities and Exchange Commission;

? "Securities Act" refers to the Securities Act of 1933, as amended;

? "Exchange Act" refers to the Securities Exchange Act of 1934, as amended;

? "U.S. dollars," "dollars" and "$" are to the legal currency of the United


    States.




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AppLogiq Spin-Off

On December 15, 2021, the Company entered into various agreements with GoLogiq, Inc. (then known as Lovarra), a Nevada corporation ("GoLogiq") and a public reporting majority owned subsidiary of the Company at that time, pursuant to which the Company agreed to transfer its AppLogiq business to GoLogiq, subject to customary conditions and approvals and completion of requisite financial statement audits (the "Separation"). GoLogiq is a fully reporting U.S. public company. In connection with the Separation, the Company announced that it intended to distribute, on a pro rata basis, 100% of the Company's ownership interests in GoLogiq to the Company's shareholders of record as of December 30, 2021 (the "Record Date") (the "Distribution," and collectively with the "Separation," the "Spin Off"), which Distribution of said shares was expected to occur approximately six months from completion of the Separation (the "Distribution Date"), subject to customary conditions and approvals.

On January 27, 2022, the Company completed the transfer of its AppLogiq business to GoLogiq. In connection with the completion of the transfer of AppLogiq to GoLogiq, GoLogiq issued 26,350,756 shares of its common stock to the Company (the "GoLogiq Shares"). The Company held the GoLogiq Shares until it distributed 100% of the GoLogiq Shares to the Company's stockholders of record as of December 30, 2021 on a 1-for-1 basis (i.e. for every 1 share of Logiq held on December 30, 2021, the holder thereof will receive 1 share of Lovarra) upon completion of the Distribution.

On July 27, 2022, the Company completed the Distribution and Spin Off. As a result, the Company no longer has a direct equity ownership of GoLogiq, and going forward, GoLogiq's results of operations will no longer be consolidated with the Company's at December 31, 2022.

As of September 30, 2022, the Company controlled, through one of its subsidiaries, approximately 12.2% of the GoLogiq's issued and outstanding shares of common stock.





DataLogiq Spin-off

On September 9, 2022, the Company, and the Company's wholly-owned subsidiary, DLQ, Inc., a Nevada corporation ("DLQ") entered into an Agreement and Plan of Merger (the "Merger Agreement") with Abri SPAC I, Inc., a Delaware corporation, ("Abri") and Abri Merger Sub ("Merger Sub") wherein Merger Sub will merge with and into DLQ with DLQ being the surviving company ("Surviving Company"), and wholly owned subsidiary of Abri. The Merger is expected to close after obtaining the required approval by the stockholders of Abri and the Company, and upon the satisfaction of certain other customary closing conditions ("Closing").

At Closing Abri will deliver to the Company $114 million worth of shares of Abri common stock, par value $0.0001, at $10.00 per share (the "Merger Consideration Shares"). Also at Closing, the Company will issue a dividend to its shareholders on a pro-rata basis equal to 25% of the aggregate Merger Consideration Shares (the "Dividend Shares"), payable to the Company shareholders of record as of a record date to be set shortly before Closing. More information relating to the Merger Agreement, the dividend and the various agreements associated with the Merger Agreement can be found in the Form 8-K filed by the Company on September 12, 2022.





Overview

The following overview of the Company's business includes the AppLogiq business, which was divested by the Company via the Distribution effective July 27, 2022. Going forward, the Company will no longer consolidate the AppLogiq business segment (now owned by GoLogiq) in its financial results or business disclosures effective December 31, 2022. As a result, future results and disclosures will likely differ materially from those included in this Report.

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 "AppLogiq" business segment (operated as CreateApp (https://www.createapp.com/), which allows SMBs to establish their point-of-presence on the web, and (ii) "DataLogiq" business segment, 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.





                                       32

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's CreateApp platform that is offered as a Platform as a Service ("PaaS") to the Company's customers. The Company's DataLogiq business segment offers online marketing solutions on a performance marketing and self-serve, Software as a Service ("SaaS") basis.

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 a cost per lead ("CPL") basis 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 May 2018, the Company expanded its portfolio to fintech applications with
    the launch of its PayLogiq mobile payments platform in Indonesia.




  ? 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 January 2020, the Company completed the acquisition of substantially all of
    the assets of Push Holdings, Inc. 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 Minneapolis,
    Minnesota, USA.




  ? On November 2, 2020, the Company completed the acquisition of Fixel AI Inc.
    ("Fixel"), 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 Canadian 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.




  ? On March 31, 2022 the Company, Battle Bridge Acquisition Co, LLC, a company
    beneficially owned entirely by the Company (the "Buyer"), Section 2383 LLC, a
    Wyoming limited liability company ("Seller"), Travis Phipps, an individual
    ("Phipps") and Robb Billy ("Billy" and, together with Phipps, the "Founders")
    and Travis Phipps, as Representative, entered into an asset purchase agreement
    (the "Battle Bridge Purchase Agreement") whereby the Buyer agreed to purchase
    from Seller and Seller agreed to sell to Buyer substantially all of the assets
    of Seller which represents the "Battle Bridge Labs" business (the "Battle
    Bridge Assets") (collectively, the "Transaction"). The consummation of the
    Transaction (the "Closing") occurred simultaneously with execution of the
    Battle Bridge Purchase Agreement on March 31, 2022.

    As consideration for the Buyer's acquisition of the Battle Bridge Assets, the
    Company agreed to pay $3,250,000 (the "Purchase Price") which consisted of
    $250,000 in cash (the "Cash Consideration") and the issuance of 2,912,621
    shares of restricted common stock of the Company at $1.03 per share (the
    "Stock Consideration") (representing $3,000,000 in Stock Consideration) which
    was the volume weighted average price (VWAP) of the Company's Common Stock as
    reported by Bloomberg LP for the twenty (20) trading days immediately prior to
    Closing. $500,000 in Stock Consideration was retained by the Company at the
    Closing and held as partial security to satisfy indemnification claims for a
    period of 12 months following the Closing.

    In addition, the recipients of the Stock Consideration agreed to sign lock-up
    and leak-out agreements which provide that, following a 6-month lock-period
    and ending 18 months after Closing, any sales of the Company's common stock by
    such recipients do not exceed one percent (1%) of the then applicable thirty
    (30) day trading average volume of the Company's common stock as of such date.




                                       33

Recent Corporate Developments

Amendment to Equity Incentive Plan

On April 21, 2021, in connection with the Company being listed on the NEO Exchange in Canada and in order to comply with the corporate governance requirements of the NEO Exchange, amended and restated its 2020 Equity Incentive Plan (the "Plan") to provide that stock options issued under the plan (i) may not be transferred and (ii) may not have an exercise price less than the fair market value ("FMV") of such stock options as of the grant date. Pursuant to the A&R Plan (as defined below), FMV shall be determined as follows: (i) if the Company's common stock is then listed or admitted to trading on a national stock exchange, the FMV shall be either (x) the five-day volume weighted average trading price, calculated by dividing the total value by the total volume of securities traded on a national stock exchange for the relevant period, or (y) the closing price of the Company's common stock on a national stock exchange on the previous trading day prior to the date of grant of the award; or (y) if the Company's common stock is not then listed or admitted to trading on a national stock exchange, the FMV shall be a price determined by the administrator of the A&R Plan in good faith using any reasonable method of valuation.

On October 22, 2021, the Company's board of directors unanimously approved the Company's Second Amended and Restated 2020 Equity Incentive Plan (the "Second A&R Plan"), subject to stockholder approval. The Second A&R Plan amends the Company's Plan to (i) incorporate those changes previously included in the First A&R Plan and (ii) increase the number of shares of common stock authorized for issuance thereunder from 2,000,000 shares to 5,000,000 shares. In addition, the Company amended and restated the form agreements for awards made pursuant to the Company's Second A&R Plan to reflect the foregoing changes.

The Company's Second A&R Plan and amended form award agreements were approved by the Company's stockholders on January 25, 2022, and adopted by the Company on the same day.

Amendments to Bylaws - Adoption of Majority Voting Policy

On April 21, 2021, the Company's Board of Directors (the "Board"), in connection with the Company being listed on the NEO Exchange in Canada and in order to comply with the corporate governance requirements of the NEO Exchange, approved and adopted a Majority Voting Policy for the election of directors (the "Policy"), which policy effectively alters the manner in which directors are elected under the Company's Bylaws, and was therefore, subject to shareholder approval.

On October 22, 2022, the Company's board of directors approved the adoption of its First Amended and Restated Bylaws (the "A&R Bylaws"), subject to shareholder approval. The A&R Bylaws amend and restate the Company's Bylaws in full and incorporate the Policy noted above, amongst other changes. The Company's Stockholders approved the Company's A&R Bylaws at a special meeting of stockholders on January 25, 2022.

Under the Policy incorporated into the A&R Bylaws, 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.





                                       34

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.





AppLogiq Spin Off

See above for information regarding the Company's sale and Spin Off of its AppLogiq business segment to GoLogiq, which was completed on July 27, 2022.

Ionic Ventures Purchase Agreement

On March 30, 2022, the Company, entered into a Purchase Agreement (the "Ionic Purchase Agreement") with Ionic Ventures, LLC ("Ionic"), whereby the Company has the right, but not the obligation, to sell to Ionic, and Ionic is obligated to purchase up to in the aggregate $40,000,000 worth of the Company's common stock (the "Purchase Shares"). Sales of common stock by the Company under the Ionic Purchase Agreement will be subject to certain limitations, and may occur from time to time, at the Company's sole discretion, over the 24-month period commencing on March 30, 2020 (the "Primary Commencement Date").

In connection with the execution of the Ionic Purchase Agreement, the Company registered 2,926,000 shares of common stock sold to Ionic in connection with the purchase of $3,000,000 in shares of common stock (the "Primary Shares") in connection with the initial purchase of Common Stock under the Ionic Purchase Agreement, which reflects an estimated value equal to the product of (A) the quotient of (y) the purchase amount (i.e., $3,000,000) divided by (z) the Pre-Settlement Regular Purchase Price (defined below), multiplied by (B) 125% (which Ionic may increase at its discretion). The "Pre-Settlement Regular Purchase Price" is equal to 80% of the closing price of the Company's common stock on the OTCQX Market on the date immediately preceding the Company's receipt of a purchase notice under the Ionic Purchase Agreement.

The Regular Purchase Price, which is the price at which future shares of common stock sold under the Ionic Purchase Agreement will be sold at, for the Purchase Shares shall equal 97% of the arithmetic average of the five lowest VWAPs during the period starting on the date that Ionic receives Pre-Settlement Regular Purchase Shares and ending on such date that the aggregate dollar volume of our common stock traded on our Principal Market equals five times the Purchase Amount, in the aggregate, subject to a five Trading Day minimum (provided, however, that each day on which Ionic has requested Purchase Shares which cannot be delivered to Ionic shall be excluded from such calculation). This is a forward pricing mechanism based on an estimate and true up and as of the date of this filing, the Regular Purchase Price has yet to be calculated.

Also in connection with the execution of the Ionic Purchase Agreement, the Company issued a Warrant to purchase 631,579 shares of Common Stock (1.5% of the total $40,000,000 commitment amount) to Ionic for no consideration as a commitment fee, and has agreed to register the shares issuable upon exercise of the Warrant. The Warrant may be exercised for cash, but may also be exercised on a cashless exercise basis, which means the Company may not receive any proceeds from such cashless exercise. Under the Warrant, the Company does not have the right to control the timing and amount of any Warrant exercises by Ionic, except that there is a 9.99% ownership limitation blocker in the Warrant. Ionic may ultimately decide to exercise all, some or none of the Warrant.

As noted above, the Purchase Agreement includes a forward pricing mechanism, pursuant to which Ionic is entitled to receive, from time-to-time at Ionic's request, additional true-up shares of the Company's common stock ("True-Up Shares") at a later date, for no additional consideration. On October 24, 2022, pursuant to a written request from Ionic in accordance with the terms of the Purchase Agreement, the Company issued Ionic 3,417,500 True-Up Shares for no additional consideration.

The Company intends to register the remaining up to $37,000,000 worth of common stock issuable under the Ionic Purchase Agreement, or any additional Primary Shares that may be issued after the date hereof to Ionic, or any Purchase Shares which may be issuable to Ionic as a "true up" pursuant to the initial purchase described above pursuant to a resale registration statement on Form S-1 to be filed subsequently with the SEC. The Company and Ionic entered into a Registration Rights Agreement (the "RRA") dated as of March 30, 2022, for such purpose.





                                       35





Battle Bridge Acquisition

On March 31, 2022 the Company, Battle Bridge Acquisition Co, LLC, a company beneficially owned entirely by the Company (the "Buyer"), Section 2383 LLC, a Wyoming limited liability company ("Seller"), Travis Phipps, an individual ("Phipps") and Robb Billy ("Billy" and, together with Phipps, the "Founders") and Travis Phipps, as Representative, entered into an asset purchase agreement (the "Battle Bridge Purchase Agreement") whereby the Buyer agreed to purchase from Seller and Seller agreed to sell to Buyer substantially all of the assets of Seller which represents the "Battle Bridge Labs" business (the "Battle Bridge Assets") (collectively, the "Transaction"). The consummation of the Transaction (the "Closing") occurred simultaneously with execution of the Battle Bridge Purchase Agreement on March 31, 2022.

As consideration for the Buyer's acquisition of the Battle Bridge Assets, the Company agreed to pay $3,250,000 (the "Purchase Price") which consisted of $250,000 in cash (the "Cash Consideration") and the issuance of 2,912,621 shares of restricted common stock of the Company at $1.03 per share (the "Stock Consideration") (representing $3,000,000 in Stock Consideration) which was the volume weighted average price (VWAP) of the Company's Common Stock as reported by Bloomberg LP for the twenty (20) trading days immediately prior to Closing. $500,000 in Stock Consideration was retained by the Company at the Closing and held as partial security to satisfy indemnification claims for a period of 12 months following the Closing.

In addition, the recipients of the Stock Consideration agreed to sign lock-up and leak-out agreements which provide that, following a 6-month lock-period and ending 18 months after Closing, any sales of the Company's common stock by such recipients do not exceed one percent (1%) of the then applicable thirty (30) day trading average volume of the Company's common stock as of such date.





The Merger Agreement

On September 9, 2022, the Company, DLQ, Inc., a Nevada corporation and wholly-owned subsidiary of the Company, Abri SPAC I, Inc., a Delaware corporation ("Abri") and Abri Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Abri ("Merger Sub"), entered into an Agreement and Plan of Merger (the "Merger Agreement"), whereby Merger Sub will merge with and into Company (the "Merger"), with Company being the surviving Company (the "Surviving Company") and a wholly-owned subsidiary of Abri, and Abri will change its name to "DataLogiq, Inc."

The Merger is expected to be consummated after obtaining the required approval by the stockholders of Abri and the Company and upon the satisfaction of certain other customary closing conditions.

The closing of the transactions (the "Closing") contemplated in the Merger Agreement is anticipated to occur virtually on the fifth Business Day following the satisfaction or waiver of closing conditions (the "Closing Date"). On the Closing Date, the parties to the Merger Agreement will cause the Certificate of Merger to be filed with the Delaware Secretary of State in accordance with Delaware General Corporation Law ("DGCL") and the Articles of Merger to be filed with the Nevada Secretary of State in accordance with the Nevada Revised Statutes ("NRS"), as applicable.

At Closing, Abri will deliver to the Company $114 million worth of shares of Abri common stock, par value $0.0001, at $10.00 per share (the "Merger Consideration Shares").





Managed Services Agreement

On November 8, 2022, the "Company, and BattleBridge Acquisition Co., LLC, a wholly owned subsidiary of the Company ("Battlebridge"), entered into a Managed Services Agreement (the "MSA") with a significant new client (the "Client"), pursuant to which Battlebridge will provide certain affiliate management, website development, lead generation, email management, and search engine optimization services (collectively, the "Services") to Client through the Company's platform. The MSA will terminate on October 31, 2023, provided that the term may be extended beyond such date by mutual written agreement of the parties. Notwithstanding the foregoing, Client may terminate the MSA at any time after January 1, 2023, without cost or any penalty, in the event that it is dissatisfied with the Services provided thereunder.

In connection with the MSA, on November 8, 2022, the Company and Client also entered into an Independent Contractor Agreement (the "IC Agreement," and together with the MSA, the "Agreements"), pursuant to which Client will provide, on a non-exclusive basis, certain business development strategies and execution and consulting services regarding e-commerce, digital marketing, and online advertising, including lead generation, affiliate marketing and brand development to the Company. The term of the IC Agreement coincides with the term of the MSA.





                                       36

As compensation for the services to be provided by Client to the Company under the IC Agreement, the Company agreed to issue Client 1,750,000 restricted shares of its common stock (the "Initial Shares") upon execution of the Agreements. In the event that the proposed acquisition of a wholly owned subsidiary of the Company by Abri SPAC I, Inc., which proposed acquisition was previously disclosed by the Company in that Current Report on Form 8-K filed with the Securities and Exchange Commission on September 12, 2022, is not completed on or before April 1, 2023, then the Company shall issue Client an additional 1,750,000 restricted shares of its common stock (such additional shares together with the Initial Shares, the "Registrable Shares") as further contingent consideration pursuant to the Agreements. In addition, the Company agreed to reimburse up to $25,000 of legal fees paid by Client in connection with the Agreements.

Pursuant to the MSA, Client shall have certain piggyback registration rights with respect to the Registrable Shares.





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 beginning in April 2020, for its Platform as a Service pay-to-use subscription basis. The Company is expecting an uncertain outlook in its service revenues, as its operations in South East Asia are currently being disrupted by the continuing impact of Covid-19 pandemic. It is unknown how long the COVID-19 will continue to impact that Company's results of operations, and/or the extent to which it will do so.

Components of Results of Operations





Revenue (Service)

The Company's AppLogiq business segment's Platform as a Service ("Paas"), operated as CreateApp ("PaaS") 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.

In 2020, during COVID-19, we pursued a path towards higher gross profit margins which involved an elimination of lower margin business and increase of direct sales/marketing. This caused a reduction in overall revenue but successfully yielded higher margins more than double over the course of the following year. Given the recent decline in the stock market and specifically in the price of technology stocks, we felt that it was time to replicate the same strategy and evaluate a higher margin path again. For Q3 2022, this resulted in revenues decreasing by 47.6% however, gross profit margins increased to 31.9%.





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.





                                       37





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. Prior to 2022, 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 the United States, foreign countries, and the respective taxing authorities in jurisdictions in which we conduct business.





Results of Operation

Results of Operations for the Three Months ended September 30, 2022 and 2021

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 September 30, 2022 and 2021. The consolidated results include Logiq, Inc. (a Delaware Corporation), Logiq, Inc. (a Nevada Corporation), Fixel, and Rebel (collectively also known as DataLogiq business segment), as well as GoLogiq (formerly Lovarra), which was a majority owned subsidiary of the Company until completion of the Distribution on July 27, 2022, the results of which include our AppLogiq business segment.

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