The following discussion should be read in conjunction with our audited
financial statements and notes thereto included herein. In connection with, and
because we desire to take advantage of, the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995, we caution readers regarding
certain forward looking statements in the following discussion and elsewhere in
this Report and in any other statement made by, or on our behalf, whether or not
in future filings with the Securities and Exchange Commission. Forward looking
statements are statements not based on historical information and which relate
to future operations, strategies, financial results or other developments.
Forward looking statements are necessarily based upon estimates and assumptions
that are inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond our control and many
of which, with respect to future business decisions, are subject to change.
These uncertainties and contingencies can affect actual results and could cause
actual results to differ materially from those expressed in any forward looking
statements made by, or on our behalf. We disclaim any obligation to update
forward looking statements.



Overview



We were incorporated in the State of Delaware on July 22, 2013 under the name
Digital Commerce Solutions, Inc. and changed our name to Results-Based
Outsourcing, Inc. on September 5, 2014. On August 29, 2018, Driven Deliveries,
Inc., a Nevada company ("Driven Nevada"), was acquired by Results-Based
Outsourcing as part of a reverse merger transaction. As consideration for the
merger, Results-Based Outsourcing issued the equity holders of Driven Nevada an
aggregate of 30,000,000 post-split shares of their common stock. Following the
merger, the Company adopted the business plan of Driven Nevada as a delivery
company focused on deliveries for consumers of legal cannabis products, in
California. The merger was accounted for as a recapitalization of the Company,
therefore the financial statements as presented in this report include the
historical results of Driven Nevada.



On September 6, 2018, we amended our Certificate of Incorporation to (i) changed
our name to Driven Deliveries, Inc., (ii) increase the number of our authorized
shares to 215,000,000, comprised of 200,000,000 shares of common stock, par
value $0.0001 per share and 15,000,000 shares of "blank check" preferred stock,
par value $0.0001 per share (the "Preferred Stock") and (iii) to effect a
forward split such that 12.35 shares of Common Stock were issued for every one
(1) share of Common Stock issued and outstanding immediately prior to the
amendment.

On January 24th, 2019 we changed our ticker symbol to DRVD.

In June 2019, we completed our acquisition of Ganjarunner, Inc. and Global Wellness, LLC, which are engaged in the business of providing delivery services of legal cannabis products to consumers.





In July 2019, we entered into an Asset Purchase Agreement with Mountain High
Recreation, Inc., in which the Company acquired certain assets from Mountain
High Recreation, Inc.



In September 2019, we entered into a Joint Venture with Budee, Inc. to expand
our operations and engaged in the business of providing delivery services of
legal cannabis products to the consumer.



In February 2020, we completed an acquisition of Budee, Inc which allowed us to
consolidate all of the Budee, Inc. revenue, expand our delivery operations, and
unify our operations and technology into a single, scalable, and supportable
platform and infrastructure.

On April 9, 2020 our common stock became quoted on the OTCQB under the symbol DRVD.





                                       17





Driven Overview



Driven is in stock and on-time! Founded by experienced technology, cannabis, and
logistics executives, Driven is the first licensed, United States
Exchange-traded, online cannabis retailer that is capable of servicing 92% of
California's adult population in less than 90 minutes. We aim to delight our
customers with the best cannabis delivery experience in the industry. Utilizing
our own fulfillment centers, drivers, and proprietary technology, we delight our
customers with a cannabis experience that is comparable to some of the largest
eCommerce retailers in the United States. Driven provides 2 different service
levels to our customers. An "Express" delivery with a limited product selection
that remains unsold in the Driver's vehicle usually delivered within 90 minutes
or less, and a "Next Day" scheduled delivery from the larger selection of 500+
products from a Driven fulfillment center. Currently, customers are able to
place online orders from our 2 core brands, Budee and Ganjarunner. Additionally,
we are participants in the growing cannabis ecosystem by providing Brands the
ability to transact with their customers using our technology and platform.



From humble beginnings less than 3 years ago, Driven Deliveries has grown into a
company completing tens of thousands of deliveries per month with a customer
base of over 200,000 legal cannabis consumers. Driven's initial business was our
"Dispensary to Consumer" model, where Driven would provide the vehicle,
logistics, and infrastructure to complete deliveries on behalf of orders
processed by our partner dispensaries. The revenue from this model consisted of
charging a commission to the dispensary based on the amount of the delivered
order and miles traveled. However, due to changes in regulations, and despite
continued technological innovation and investment, the "Dispensary to Consumer"
business has ended to support our direct to consumer business.



In the first quarter of 2019 Driven began its transformation in fundamental
strategy by switching its core focus from "Dispensary to Consumer" to "Direct to
Consumer". The executive team at Driven determined that in order to compete and
be successful in California, Driven had to directly service the customer and own
the customer's experience. Neither of these was possible in the "Dispensary to
Consumer" model. As such Driven set out to build its own infrastructure to be
able to transact and deliver directly to the cannabis consumer. The executive
team began the process of buying and building this infrastructure.



In February 2019, Driven entered into a 2-year Operating Agreement within the
joint venture CA City Supply, LLC in an attempt to gain exposure in a new area
and create a location for operations out of California City, CA. Under Driven
management, CA City Supply was selected as 1 of 3 licensee applicants to receive
a non-storefront retail & delivery license in April of 2019. Unfortunately, all
members of the LLC have opted out of the Operating Agreement early and Driven
has withdrawn from ownership due to changes in local regulations.



In June 2019, the company acquired Ganjarunner, Inc, an online retailer based
out of Sacramento with a small operation in Los Angeles that focused on "Next
Day" delivery from a fulfillment center. In addition to a functioning delivery
operation, Ganjarunner also came with a substantial amount of data and
intelligence on the cannabis consumers they had been servicing with cannabis
delivery for 5 plus years. Ganjarunner was focused on a more sophisticated
consumer with its target audiences falling between 30 and 55 years of age and
professionally employed who wanted specific products and brands and were willing
to wait for them to be delivered the next day. Ganjarunner used a heavily
modified commercially available eCommerce solution (WooCommerce) to complete the
next day deliveries throughout the state of California.



Simultaneously, the company worked to find an online retailer specializing in
the "Express" cannabis delivery market. To continue planned growth in
California, Driven acquired certain assets of Mountain High Recreation to
include the brand & talent in July 2019. The "Express" cannabis consumer is
markedly different from the "Next Day" cannabis consumer as "Express" customers
are typically not brand conscious and are looking for "cheap weed fast." Thus,
an express provider is able to complete its deliveries faster but also at a
lower price point and lower order total.



In August 2019, with the Ganjarunner acquisition and the Mountain High asset
purchases complete, we began to combine Express deliveries with Next Day using a
single technology and operations infrastructure. With this combination, cannabis
consumers are given a higher level of service as they can choose Express or Next
Day delivery while shopping online. Additionally, the company sees increased
operational efficiencies as a single driver can complete both types of
deliveries.



In early September 2019, Driven entered into a Joint Venture with Budee, Inc. a
large on-demand retailer based out of Oakland, California. Budee, Inc had been
operating in the cannabis delivery space in California since 2015. Focusing
exclusively on growing and streamlining its Express cannabis delivery
operations, Budee became increasingly frustrated with the ability for commercial
software to support the express delivery model that was compliant with state
regulations. As such, Budee developed its own proprietary Budee Inventory
Management System, eCommerce system, Driver application, and back-office system.
The proprietary software combined with a relentless focus on margin improvement
allowed Budee to scale throughout California. During the integration of
Ganjarunner and Mountain High, plus the combination of the Express and Next Day
delivery options, Driven executive management was arriving at the same
conclusion that Budee had arrived at: custom software and infrastructure would
be required to scale. By establishing a joint venture with Budee, we were able
to take advantage of reviewing the software platform and determining if it

would
work for our operations.



                                       18






During the fourth quarter of 2019 and the first quarter of 2020 Driven and
Budee, through the Joint Venture, began the process of analyzing and updating
Budee's proprietary Inventory Management System. Through a concerted effort that
included operational and technology changes, Driven was able to complete the
transition to the unified Budee Delivery Management System and completed the
acquisition of Budee in February 2020. As of March 2020, all Driven brands,
operations, and infrastructure are all combined into a single technology stack
supported by unified operations. With the operational integration complete,
Driven is ready to scale its delivery operations.



Marketing efficiencies were gained in both customer acquisition and retention.
By the end of the fourth quarter of 2019 the company improved its Cost of
Acquisitions (COA) to $13.80, from $22.16 the previous quarter. These
improvements were realized in part by the company's investment in the Weedwaves
platform as well as content creation and optimization as part of the Search
Engine Optimization (SEO) program that was completed during the period.
Significant improvements continued into the first quarter of 2020 and will be
reflected in the first quarter 10Q of 2020.



In addition to COA improvements, the company also kicked off its investor
outreach program with attendance and strong participation at the cannabis
industry's leading investment conference, Benzinga. In October 2019, the company
was showcased in both a technology panel as well as a dedicated investor pitch
on the second day. Marketing automation initiatives were also kicked off in the
fourth quarter of 2019. The Company continued to develop its marketing
infrastructure in the first quarter of 2020 by releasing our Driven By Numbers
Platform. Driven by Numbers enables automatic customer segmentation, monitors
location based sales performance, and incorporates demographic sensitive
analytics into our marketing and delivery operations. We also integrated Driven
by Numbers into a SMS and MMS communication gateway which lead to the
improvement in sales conversions and customer retention. By the end of the year,
conversions reached 0.89% up almost 20% from the third quarter of 2019. That
momentum has continued with double digit improvements through the first quarter
of 2020.



This pivot to an ecommerce solution also required additional marketing efforts.
In addition to strategic marketing hires, Driven also launched Weedwaves,
Driven's community for cannabis enthusiasts to learn, save, shop, and share.
Weedwaves is an iOS and Android application-based community that will enable
Driven's group of companies to more accurately service its customers and drive
loyalty. More than anything Weedwaves enables us to start mainstream marketing
through social and paid promotion and then later sell products to them based on
attribution and engagement with the platform. The Weedwaves app is a means for
Driven to acquire new cannabis consumers, provide a better user experience, and
access to exclusive deals and offers on Ganjarunner as well as things they buy
every day. Advertising cannabis in California is incredibly difficult and
Weedwaves will enable Driven to own its advertising network and community.
Weedwaves continues to be our largest marketing/acquisition expense. We are
optimistic that with adoption of Weedwaves we will be able to transition this
spend into savings or additional campaigns. to continue planned growth in
California. Engagement among Weedwaves users is incredibly high with Monthly
Active Users (MAU) reaching as high as 47%. This engagement helped the company
convert approximately 26% of all users to be customers of one or both of its
online retail brands, Ganjarunner and Budee.



Recent developments



On February 28, 2020 the Company completed its acquisition of Budee, Inc. which
allowed us to consolidate all of the Budee, Inc. revenue, expand our delivery
operations, and unify our operations and technology into a single, scalable, and
supportable platform and infrastructure.



On March 20, 2020, Governor Gavin Newsom and the California Bureau of Cannabis
Control identified cannabis companies as "essential" in the State of California
and as such we continued to operate through the shelter in place order due

to
the COVID-19 pandemic.



Financial Results




We have a limited operating history. Therefore, there is limited historical
financial information upon which to base an evaluation of our performance. Our
prospects must be considered in light of the uncertainties, risks, expenses, and
difficulties frequently encountered by companies in their early stages of
operations. Our financials for the year ended December 31, 2019, show a net loss
of $13,088,175. We expect to incur additional net losses over the next several
years as we continue to expand our existing operations. The amount of future
losses and when, if ever, we will achieve profitability are uncertain.



                                       19





Results of Operations



Revenue

During the year ended December 31, 2019, The Company recorded revenue in the amount of $2,822,575 and $1,850,629 in cost of goods sold comprised of $1,328,688 in product costs and $521,961 in shipping costs.





During the year ended December 31, 2018, The Company recorded negative revenue
in the amount of ($65,034) and $2,735 in cost of goods sold. The revenue for the
period was negative due to dispensary cost reimbursements.



Our primary source of revenue in Q1 and Q2 of 2019 was from the dispensary to
consumer delivery service. However, during Q3 and Q4 the Company transitioned to
delivery of cannabis products directly to consumers with the acquisition of
Ganjarunner, Inc. From January 1, 2019 through June 24, 2019 Ganjarunner, Inc.
operated independently of DRVD. On June 24, 2019 DRVD acquired Ganjarunner Inc.
and the revenue from June 24, 2019 forward is included in this report.



On July 10, 2019 DRVD acquired the certain assets of Mountain High Recreation.
The asset purchase was designed to add Mountain High Recreation's Express
delivery on top of Ganjarunner's Next Day delivery service. Since MHR was an
asset purchase, its post asset purchase revenues are included in this report as
a part of Ganjarunner, Inc. On October 3, 2019 we entered into a joint venture
with Budee, Inc. to re-establish the Southern California operations of Budee out
of our Los Angeles facility. The Joint Venture revenues are included in this
report.




The operational and technology integrations of these separate entities was more
difficult than expected. In addition to the ordinary challenges of implementing
standard operating procedures, uniform accounting processes, and standardizing
and building technology platforms, we also had to navigate extremely complex
rules and regulations guiding the sale of cannabis from the California Bureau of
Cannabis Control. We learned that customers are sensitive to not only front-end
technology interfaces but also operational and delivery hiccups. The entirety of
the fourth quarter was dedicated to integrating these companies and putting the
proper infrastructure in place.



Operating Expenses




During the year ended December 31, 2019, we incurred a loss from operations of
$12,502,454. This is due to professional fees of $1,294,778, compensation of
$9,941,497 including stock-based compensation of $7,686,930, general and
administrative of $1,876,457 and sales and marketing of $361,668.

During the year ended December 31, 2018, we incurred a loss from operations of $2,621,236. This is due to professional fees of $295,567, compensation of $2,029,434 including stock-based compensation of $1,704,363, general and administrative of $165,996, and sales and marketing of $62,470.





The cost to operationally integrate and the inefficiencies created by having
multiple redundant personnel, drivers, routes, vehicles, software, and marketing
were higher than forecasted. Further, through the duration of Q3 and midway
through Q4 there was the process of understanding the capabilities and
limitations of the individuals within the companies that the Company had
purchased. By the middle of Q4 of 2019 and into Q1 of 2020 we worked to remove
redundancies and operational overhead to streamline processes and the company
did not start to realize the savings until the Q1 of 2020. The cost of being
public created significant additional professional services fees for both legal,
audit, and accounting services to support not only the company but also the

acquisition targets.



                                       20





Other Expenses

During the year ended December 31, 2019, the Company incurred interest expense of $368,713, a gain on extinguishment of debt of $25,582, and a loss on the change in the fair value of derivative liabilities of $1,338.

During the year ended December 31, 2018, the Company incurred interest expense of $7,581.

Fully Year 2019 Pro Forma Income with Budee, Inc. and Ganjarunner, Inc Acquisitions


The audited results on this report do not provide a complete picture of the
Company's performance had the acquisitions taken place at the beginning of 2019.
From January 1, 2019, through June 24, 2019 Ganjarunner, Inc. operated
independently of the Company. On June 24, 2019, the Company acquired Ganjarunner
Inc., and only the revenue from June 24, 2019 forward is included in the
financial statements in this report. Further, in October 2019 we formed a joint
venture with Budee, Inc. with the intent of completing a full acquisition of
Budee, Inc. We closed the acquisition of Budee, Inc. in February of 2020.



The following presents the unaudited Pro-forma combined results of operations of
the Company with the Budee, Inc. and Ganjarunner, Inc. businesses as if the 3
entities were combined on January 1, 2019.



                                                 Year Ended
                                                December 31,
                                                    2019
Gross Revenue                                   $  10,147,362
Gross Profit                                    $   4,995,676
Net loss                                        $ (13,438,173 )
Net loss per share                              $       (0.28 )

Weighted average number of shares outstanding 46,898,066


The unaudited pro-forma results of operations are presented for information
purposes only. The unaudited pro-forma results of operations are not intended to
present actual results or to project potential operating results as of any
future date or for any future periods. These are meant to show what would have
been attained had the acquisitions been completed as of January 1, 2019.

Liquidity and Capital Resources


We are a startup and anticipate that we will incur operating losses for the
foreseeable future. As of December 31, 2019, we had cash on hand of $266,869 and
a working capital deficit of $4,011,527. Based on its current forecast and
budget, management believes that its cash resources will not be sufficient to
fund its operations through the end of 2020. Unless the Company can generate
sufficient revenue from the execution of the Company's business plan, it will
need to obtain additional capital to continue to fund the Company's operations.
There is no assurance that capital in any form would be available to us, and if
available, on terms and conditions that are acceptable. If we are unable to
obtain sufficient funds, we may be forced to curtail and/or cease operations.



                                       21





Operating activities used $3,650,850 cash for the year ended December 31, 2019
as our net loss of $13,088,175 was offset by $7,686,930 in stock-based
compensation, depreciation and amortization expense of $407,611, an increase in
accounts receivable of $127,747 and a $1,476,540 increase in accounts payable
and accrued expenses.

Operating activities used $712,248 in cash for the year ended December 31, 2018 as our net loss of $2,628,817 was offset by $1,704,363 in stock-based compensation, and a $202,993 increase in accounts payable and accrued expenses.

Investing activities used $599,217 cash for the year ended December 31, 2019 mainly due to the purchase of fixed assets and payments related to acquisitions.

Investing activities used $32,392 cash for the year ended December 31, 2018 mainly due to the purchase of fixed assets.





Financing activities for the year ended December 31, 2019 provided $4,511,688 in
cash from proceeds of loan payable of $1,497,000, proceeds of loan payable with
related parties of $205,393, and common stock issued for cash of $2,768,000.

Financing activities for the year ended December 31, 2018 provided $711,705 in cash from repayment of loan payable of $25,000, proceeds of loan payable of $100,000, and common stock issued for cash of $625,000.

Off-Balance Sheet Arrangements





We have not entered into any off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources and would be considered
material to investors.



Critical accounting policies



Principles of consolidation



The consolidated financial statements include the accounts of Driven Deliveries,
Inc, and its wholly owned subsidiaries, Ganjarunner, Inc. and Global Wellness,
LLC. All significant intercompany balances and transactions have been eliminated
in the consolidated financial statements.



Stock-Based Compensation



The Company accounts for stock-based compensation costs under the provisions of
ASC 718, "Compensation-Stock Compensation", which requires the measurement and
recognition of compensation expenses related to the fair value of stock-based
compensation awards that are ultimately expected to vest. Stock based
compensation expenses recognized includes the compensation cost for all
stock-based payments granted to employees, officers, and directors based on the
grant date fair value estimated in accordance with the provisions of ASC 718.
ASC 718 is also applied to awards modified, repurchased, or canceled during

the
periods reported.

The Company accounts for warrants and options issued to non-employees under ASU 2018-07, Equity - Equity Based Payments to Non-Employees, using the Black-Scholes option-pricing model.





                                       22





Debt Issued with Warrants




Debt issued with warrants is accounted for under the guidelines established by
ASC 470-20 - Accounting for Debt with Conversion or Other Options. We record the
relative fair value of warrants related to the issuance of convertible debt as a
debt discount or premium. The discount or premium is subsequently amortized to
interest expense over the expected term of the convertible debt.



Revenue Recognition



As of January 1, 2018, the company adopted ASC 606. The adoption of ASC 606,
Revenue From Contracts With Customers, represents a change in accounting
principle that will more closely align revenue recognition with the delivery of
the Company's services and will provide financial statement readers with
enhanced disclosures. In accordance with ASC 606, revenue is recognized when a
customer obtains control of promised services. The amount of revenue recognized
reflects the consideration to which the Company expects to be entitled to
receive in exchange for these services. The Company used the
Modified-Retrospective Method when adopting this standard. There was no
accounting effect due to the initial adoption. To achieve this core principle,
the Company applies the following five steps:

1) Identify the contract with a customer






Delivery Income



The Company has three contracts with different customers with the same terms.
All of these qualify as contracts since they have been approved by both parties,
have identifiable rights and payment terms regarding the services to be
transferred, have commercial substance, and it is probable that the entity will
collect the consideration in exchange for the services.



Product Sales



The Company performs retail sales directly to customers. In these sales there is
no formal contract with the customer. These sales have commercial substance and
there are no issues with collectability as the customer pays the cost of the
goods at the time of purchase or delivery.

2) Identify the performance obligations in the contract






Delivery Income



The Company's performance obligations are to (1) deliver cannabis in compliance
with California law, and (2) provide a platform to sell the retailer's or their
own products. These items represent performance obligations since they are
distinct services and are distinct in the context of the contract.



Product Sales



The Company sells its products directly to consumers. In this case these sales
represent a performance obligation with the sales and any necessary deliveries
of those products.

3) Determine the transaction price






Delivery Income



The company will perform delivery services in exchange for a flat fee per
delivery. As mandated by The California Bureau of Cannabis Control, delivery
drivers are required to be on the payroll of a licensed retailer. In order to
fulfill the performance obligation, delivery drivers are included on the payroll
of the customer, and the Company reimburses the customer for the drivers' wages
at a premium. The cost of paying the drivers are considered a cost to fulfill a
contract for which the Company receives no benefit, so it is consideration
payable to the customer, which is considered in determining the transaction
price. In addition, the company currently nets the amounts owed by the customers
for deliveries with the amounts owed to the customers for drivers' wages. As
such, the company reduces the delivery fee by the drivers' wages to determine
the transaction price. These elements of the transaction price are based on
variable consideration determined to be constrained and are recognized as of the
later of when the service is rendered or when the Company pays or promises to
pay the consideration, which will generally be on a monthly basis. If the cost
of the drivers' wages exceeds the total fees for delivery, the company would
present a net negative revenue. For the year ended December 31, 2018, the
company shows net negative revenue related to delivery of cannabis.



                                       23





Commission Income




The transaction price of the commissions is a variable consideration as the
price is determined to be 10% of a delivered sale from an order generated on the
Company's online platform. The variable consideration is also constrained as the
amount of the consideration is dependent on the cost of the products purchased;
and is further constrained as the company has little history to predict the
amount to be recognized. Transaction price for the commissions will be
determined as the company satisfies the performance obligation. During 2019 the
company discontinued earning commission income.



Product Sales



The sales that are done directly to the customer have no variable consideration
or financing component. The transaction price is the cost that those goods are
being sold for plus any additional delivery costs.



Excise Tax

As part of the Company's sales, the company collects an excise tax. The amount of tax collected is based on state and local laws.

4) Allocate the transaction price to performance obligations in the contract






Delivery Income

The Company will allocate the transaction price of the delivery fees and to the deliveries that they perform separately for the customer.





Commission Income

The transaction price of the commissions will be allocated per each sale that the Company generates for a retailer that is delivered.





Product Sales

For the goods that the Company sells directly to customers, the transaction price is allocated between the cost of the goods and any delivery fees that may be incurred to deliver to the customer.





Excise Tax

The tax collected is allocated to the transactions that the tax was collected from.

5) Recognize revenue when or as the Company satisfies a performance obligation






Delivery Income



The Company satisfies performance obligations either over time or at a point in
time. Revenue is recognized at the time the related performance obligation is
satisfied by transferring a promised service to a customer.



Both performance obligations are satisfied at a point in time, and as such
revenue will be recognized when the delivery is completed. The revenue will not
be recognized for orders not fulfilled, but the delivery fee is earned even if
the delivery is rejected or the person who placed the order is not present or
available at the time of delivery. The consideration payable to the customer for
drivers' wages is recognized over time based on the inputs to determine the
drivers' wage obligations, but the net transaction price is known and therefore
recognized by the end of each reporting period.



Product Sales

For the sales of the Company's own goods the performance obligation is complete once the customer has received their product.





Excise Tax



The Company recognizes the revenue when the tax is collected and the customer
has received their product.



                                       24





Disaggregation of Revenue



The following table depicts the disaggregation of revenue according to revenue
type.



                                                                  Revenue for            Revenue for
                                                                 the year ended         the year ended
Revenue Type                                                   December 31, 2019      December 31, 2018
Delivery Income                                                $          139,323                 43,468
Dispensary Cost Reimbursements                                           (126,093 )             (114,574 )
Delivery Income, net                                                       13,230                (71,106 )
Product Sales                                                           2,498,164                      -
Commission Income                                                             821                  6,072
Excise Tax and Regulatory and Compliance fees                             310,360                      -
Total                                                          $        2,822,575                (65,034 )

Due to this reduction of revenue from the reimbursement of wages for the delivery couriers, the Company is presenting a net negative revenue for the year ended December 31, 2018.

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