The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited financial statements and related notes appearing elsewhere in this Form 10-Q and our audited financial statements and related notes for the year ended August 31, 2019 included in our most recent annual report on Form 10-K. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors.





Company Overview

Leader Capital Holdings Corp. is an early stage technology company that conducts its operations through its wholly owned subsidiaries, Leader Financial Group Limited, a Seychelles corporation incorporated on March 6, 2017 ("LFGL"), and JFB Internet Service Limited, a Hong Kong corporation incorporated on July 6, 2017 ("JFB").

Through LFGL, we act as the service provider for a mobile application investment platform that is owned by JFB. The platform connects investors with financial service providers in an effort to sharpen operational efficiency and seeks to address customer demands for more innovative services. It is a ready-made application created to meet the needs of financial service providers, especially trust companies and insurance companies. The platform is customizable and each financial institution can adjust the platform to better suit their client's needs.

Use of the JFB platform is currently free; however, we have an agreement with a third party whereby we have authorized the third party to use our investment platform and related applications until December 31, 2020 for a fee. In the future, the Company intends to generate additional revenue by developing a new, more comprehensive mobile application, with similar functions as the JFB platform, to offer to our clients for a fee.





Going Concern

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.

We have suffered recurring losses from operations, and recorded an accumulated deficit of $2,714,376 as of November 30, 2019. These conditions raise substantial doubt about our ability to continue as a going concern. The ability to continue as a going concern is dependent upon our profit generating operations in the future and/or obtaining the necessary financing to meet its obligations and repay our liabilities arising from normal business operations when they become due.

The Company expects to finance its operations primarily through loans from existing directors and stockholders, sales of capital stock and cash flow from operations. In the event that the Company requires additional funding to finance the Company's current and expected future operations, as well as to achieve its strategic objectives, a stockholder has indicated the intent and ability to provide additional financing. No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Any such additional financing may contain undue restrictions on the Company's operations and/or cause substantial dilution to its stockholders.

These condensed consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should we be unable to continue as going concern.





15

Liquidity and Capital Resources





The following table sets forth a summary of our cash flows for the periods
indicated:



                                                      For the three months ended November 30,
                                                          2019                      2018
Net cash used in operating activities              $          (154,234 )     $           (87,872 )
Net cash used in investing activities                         (401,285 )                (102,564 )
Net cash provided by financing activities                      175,502                     1,237
Cash and cash equivalents, beginning of period                 447,562                   839,323
Cash and cash equivalents, end of period           $            67,545       $           650,124

Cash Used in Operating Activities

Net cash used in operating activities for the three months ended November 30, 2019 and 2018 was $154,234 and $87,872, respectively. The cash used in operating activities was mainly for payment of general and administrative expenses.

Cash Used in Investing Activities

Net cash used in investing activities for the three months ended November 30, 2019 and 2018 was $401,285 and $102,564, respectively. The net cash used in investing activities for the three months ended November 30, 2019 was related to the issuance of notes receivable. The cash used in investing activities for the three months ended November 30, 2018 resulted from an investment of $102,564 (HK$800,000) in the equity interest of Leader Financial Asset Management Limited.

Cash Provided by Financing Activities

Net cash provided by financing activities for the three months ended November 30, 2019 and 2018 was $175,502 and $1,237, respectively. The cash provided by financing activities were related to the advances and repayment from related parties and a director.





Results of Operations

Comparison for the three months ended November 30, 2019 and 2018





Revenue

We signed an agreement with a third party whereby we authorized the third party to use our investment platform and related applications, from January 1, 2018 to December 31, 2020, for an upfront service fee. An additional fee is charged upon the third party's sale of products on our mobile application.

Through this agreement, we generated revenue of $1,667 and $0 for the three months ended November 30, 2019 and 2018, respectively.

General and Administrative Expenses

General and administrative expenses were $1,238,147 and $410,794 for the three months ended November 30, 2019 and 2018, respectively. Our general and administrative expenses consist primarily of software development costs, consultancy fees, payroll expenses, rental expenses, marketing fees, consultancy fees and legal and professional fees. We recognized share-based compensation to directors and consultants of $1,062,500 and $0 for the three months ended November 30, 2019 and 2018, respectively. We started to incur software development expenses in fiscal year 2019. We have expensed $0 and $195,187 development costs in general and administrative expenses for the three months ended November 30, 2019 and 2018, respectively. In the three months ended November 30, 2018, the Company recorded an impairment loss of $102,564 on its investments in Leader Financial Asset Management Limited, a company incorporated in Hong Kong. No such impairment loss was incurred in the same period of 2019.





16







Other Income

Other income for the three months ended November 30, 2019 amounted to $21,809 as compared to $11,481 in the prior year, representing an increase of $10,328. The increase was due primarily to the increase in interest income of $21,746 primarily on notes receivable we issued, partially offsetting by the drop of subletting rental income of $11,354, from a subletting arrangement from April 1, 2018 to February 28, 2019 with a related company.





Net Loss

Our net loss was $1,249,630 and $399,313 for the three months ended November 30, 2019 and 2018, respectively. The net loss was mainly derived from our general and administrative expenses.

Off-Balance Sheet Arrangements

As of November 30, 2019, we have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.





Contractual Obligations

As a "smaller reporting company" as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

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