VYNLEADS, INC. The following discussion should be read in conjunction with our financial
statements, including the notes thereto, appearing elsewhere in this annual
report. The following discussion contains forward-looking statements that
reflect our plans, estimates, and beliefs. Our actual results could differ
materially from those discussed in the forward looking statements. Our audited
financial statements are stated in
Management's Discussion and Analysis of Financial Condition and Results of
Operations included in this report discusses the Company's financial condition
and results of operations as of and for 2019 and 2018. Information concerning
the fiscal year ended
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Results of Operations
The Company has incurred losses since inception resulting in an accumulated
deficit of
We will require additional capital to meet our short and long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity securities.
Fiscal year ended
Revenues
Revenues for 2019 were
Costs and Expenses
Total costs and operating expenses decreased
· Cost of revenue decreased $539,581 , or 75.1%, to
$179,066 in 2019 compared to $718,647 in 2018, and slightly increased as
a percentage of net revenue at 45.1% from 39.4%. Our cost of revenue
includes the cost of the supplements we sell as well as shipping and
handling costs for shipments to customers.
· Advertising expenses decreased $628,863 , or 72.5%, to
$238,002 in 2019 from $866,865 in 2018, and increased as a percentage of
net revenue to 60% from 47.5%. The increase in advertising expenses as a
percentage of our net revenues is the result of our advertising cost per
sale increasing. We monitor our advertising purchases and customer
acquisition costs based on various advertising websites, partners and
campaigns, and we adjust our campaign costs based on new website
subscriptions or sales.
· Selling, general and administrative expenses decreased $478,591 ,
or 63.2%, to $278,216 in 2019 from $756,807 in 2018, and increased as a
percentage of net revenue to 70.1% from 41.5%. The decrease in SG&A in
2019 as compared to 2018 is principally attributable to a reduction in
advisory and professional fees and software development costs. In 2019,
Mr. Mannine contributed part of his salary for $116,442 , which was
recorded in SG&A and as an increase in paid in capital.
Net Loss
Our net loss for the year ended
Liquidity and capital resources
Liquidity is the ability of a company to generate sufficient cash to satisfy its
needs for cash. The following table summarizes our total current assets, total
current liabilities and working capital at
December 31, December 31,
2019 2018
Total current assets $ 112,395 $ 172,472
Total current liabilities $ 247,757 $ 121,779
Working capital (deficit) $ (135,362 ) $ 50,693
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The reduction in total current assets between the periods primarily reflects a reduction in cash and holdback receivables from merchants. The increase in total current liabilities reflects an increase in accounts payable and accrued expenses and notes payable. We do not have any capital commitments and do not have any external sources of working capital available.
Going concern and management's liquidity plans
We have experienced recurring operating losses and negative operating cash
flows, and have financed our recent working capital requirements primarily
through the issuance of equity securities. During the years ended
Our ability to continue to grow our business is dependent upon our ability to
raise additional sufficient capital to fund our operating expenses, including
advertising, until such time, if ever, that we are able to report profitable
operations, as well as for our short-term and long-term growth plans. We do not
generate operating income and we are presently are relying on cash we receive
from the holdback receivable to pay our operating expenses. Our management
estimates that we require approximately
Summary of cash flows
December 31, December 31,
2019 2018
Net cash used in operating activities $ (32,690 ) $ (261,968 )
Net cash provided by (used in) in investing -
activities $ $ -
Net cash provided by in financing activities
We used cash in our operating activities during 2019 and 2018 primarily to fund our net loss, offset by an increase in our accounts payable and accrued expenses.
The decrease in cash used in our operating activities in 2019 as compared to 2018 is due to a decrease in our holdback receivable, an increase in our accounts payable and accrued expenses, and increase in contribution of salary by the CEO during the 2019 period.
There was no net cash provided by or used in investing activities during 2019 and 2018.
Net cash provided by financing activities during 2019 reflects proceeds from notes payable. Net cash provided by financing activities during 2018 primarily reflects the sale of securities by us in a private placement and proceeds of loans from related parties, offset by repayments of those loans and the repurchase of shares of our common stock from a stockholder.
Commitments and Contingencies
Information regarding our Commitments and Contingencies is contained in Note 7 to the Financial Statements.
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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.
Emerging Growth Company
We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act of 2012, or the "JOBS Act", and we are permitted to take advantage of certain exemptions from various public company reporting requirements, including not being required to have our internal controls over financial reporting audited by our independent registered public accounting firm pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, or the "Sarbanes-Oxley Act", reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments. We may take advantage of these exemptions until we are no longer an "emerging growth company." In addition, the JOBS Act provides that an "emerging growth company" can delay adopting new or revised accounting standards until such time as those standards apply to private companies.
We have elected to use the extended transition period for complying with new or revised accounting standards under the JOBS Act. This election allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.
We could remain an emerging growth company for up to five years, or until the earliest of:
· the last day of the first fiscal year in which our annual gross revenues
exceed $1.07 billion ;
· the date that we become a "large accelerated filer" as defined in Rule
12b-2 under the Securities Exchange Act of 1934, as amended, or the
"Exchange Act", which would occur if the market value of our common
stock that is held by non-affiliates exceeds $700 million as of the last
business day of our most recently completed second fiscal quarter; or
· the date we have issued more than $1 billion in non-convertible debt
during the preceding three-year period.
At this time, we expect to remain an emerging growth company until possibly as late as 2023. References herein to "emerging growth company" have the meaning associated with that term in the JOBS Act.
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