| Note 1: Organization and Basis of Presentation |
The accompanying
consolidated financial statements include the accounts of LiveDeal, Inc. (formerly YP Corp.), a Nevada corporation, and its wholly
owned subsidiaries (collectively the “Company”). The Company delivers local customer acquisition services for small
and medium-sized businesses combined with online listing services to deliver an affordable way for businesses to extend their
marketing reach to local, relevant customers via the Internet.
The Company’s
new strategic focus is on developing and marketing a suite of affordable products and services designed to meet the online marketing
needs of small and medium-sized businesses by boosting customer awareness and merchant visibility on the internet. The Company
primarily sells this suite of products and services via telemarketing.
The following
sets forth historical transactions with respect to the Company’s organizational development:
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Telco Billing, Inc. was formed in April
1998 to provide advertising and directory listings for businesses on its Internet website in a “Yellow Pages”
format. Telco provides those services to its subscribers for a monthly fee. These services are provided primarily to businesses
throughout the United States. Telco became a wholly owned subsidiary of the Company after the June 1999 acquisition. |
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At the time that the transaction was
agreed to, the Company had 12,567,770 common shares issued and outstanding. As a result of the merger transaction with Telco,
there were 29,567,770 common shares outstanding, and the former Telco stockholders held approximately 57% of the Company’s
voting stock. For financial accounting purposes, the acquisition was a reverse acquisition of the Company by Telco, under
the purchase method of accounting, and was treated as a recapitalization with Telco as the acquirer. Consistent with reverse
acquisition accounting, (i) all of Telco’s assets, liabilities, and accumulated deficit were reflected at their combined
historical cost (as the accounting acquirer) and (ii) the preexisting outstanding shares of the Company (the accounting acquiree)
were reflected at their net asset value as if issued on June 16, 1999. |
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On June 6, 2007, the Company completed
its acquisition of LiveDeal, Inc. (“LiveDeal”), a California corporation. LiveDeal operated an online local classifieds
marketplace, www.livedeal.com, which listed millions of goods and services for sale across the United States. The technology
acquired in the acquisition offered such classifieds functionality as fraud protection, identity protection, e-commerce, listing
enhancements, photos, community-building, package pricing, premium stores, featured Yellow Page business listings and advanced
local search capabilities. This business has since been discontinued. See Note 4. |
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On July 10, 2007, the Company acquired
substantially all of the assets and assumed certain liabilities of OnCall Subscriber Management Inc., a Manila, Philippines-based
company that provided telemarketing services. The acquisition took place through the Company’s wholly-owned subsidiary,
247 Marketing LLC, a Nevada limited liability company, which remains in existence but is inactive. |
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On August 10, 2007, the Company filed
amended and restated articles of incorporation with the Office of the Secretary of State of the State of Nevada, pursuant
to which the Company’s name was changed to LiveDeal, Inc., effective August 15, 2007. The name change was approved by
the Company’s Board of Directors pursuant to discretion granted to it by the Company’s stockholders at a special
meeting on August 2, 2007. |
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During 2010, the Company evaluated its
business and adopted a new business strategy that addressed each of the Company’s business segments as separate entities
and re-launched and restructured the Company’s legacy line of business. This evaluation was necessitated by the challenges
facing the Company’s Direct Sales business lines that provide Internet-based customer acquisition strategies for small
business, as well as declining revenues from the Company’s traditional business line (i.e. directory services). |
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During 2011, as part of the Company’s
strategy to evaluate each of the Company’s business segments as separate entities, management noted that the Direct
Sales business segment had incurred operating losses and declining revenues and did not fit with the Company’s change
in strategic direction. Accordingly, in March 2011, the Company made the strategic decision to discontinue our Direct Sales
business and product offerings. Prior year financial statements have been restated to present the Direct Sales business segment
as a discontinued operation. |
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On August 16, 2012, the Company acquired
substantially all of the assets of LiveOpenly, Inc., a California corporation (“LiveOpenly”), which sourced, published
and sold discounted offers for goods and services through local retail merchants, in exchange for the issuance of 75,000 shares
of the Company’s common stock. In connection with the acquisition, the Company recorded $420,000 of net assets, consisting
entirely of intangible assets. No goodwill was recognized as the purchase price equaled the net assets received. |
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During 2012, the Company also launched
two new business lines under new management after a period of re-evaluating our sales program, products, distribution methods
and vendor programs. First, we commenced the sale of marketing tools that help local businesses manage their online presence
under our Velocity Local™ brand, which we refer to as online presence marketing, in November 2012. Second,
we commenced sourcing local deal and activities to strategic publishing partners under our LiveDeal® brand,
which we refer to as promotional marketing, in August 2012. We continue to actively develop, revise and evaluate these products
and services. |
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During 2013, the Company launched LiveDeal.com,
which redefined the Company’s strategy and direction, centering its focus on the new LiveDeal.com
platform and growing the base of restaurants utilizing the LiveDeal platform to attract new customers. LiveDeal.com
is a unique, real-time “deal engine” connecting merchants with consumers. The Company believes that it has developed
the first-of-its-kind web/mobile platform providing restaurants with full control and flexibility to instantly publish customized
offers whenever they wish to attract customers. |
The Company
had a net loss of $5.7 million for the year ended September 30, 2013 and $1.6 million for the year ended September 30, 2012. The
Company had an operating cash outflow of approximately $(1.8) million for the year ended September 30, 2013 and operating cash
inflow of approximately $29,000 for the year ended September 30, 2012. The Company had cash of $761,458 as of September 30, 2013.
Management believes the Company’s cash on hand and additional cash generated from operations together with potential sources
of cash such through the issuance of debt or equity will provide the Company with sufficient liquidity for the next 12 months.
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