| 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 provides specialized online marketing
solutions to small-to-medium sized local businesses, or SMBs, that boost customer awareness and merchant visibility. The Company
offers affordable tools for SMBs to extend their marketing reach to relevant prospective customers via the internet. The Company
also provides SMBs promotional marketing with the ability to offer special deals and activities through LiveDeal.com, mobile applications
for iOS and Android users and our online publishing partners.
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.
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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. |
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On
March 7, 2014, the Company incorporated Live Goods, LLC (“Live Goods”), a
California limited liability company, which became a wholly-owned subsidiary of the Company.
Also, on March 7, 2014, the Company signed an agreement for the acquisition of substantially
all of the assets of DA Stores, LLC, through its Live Goods. The acquisition of the assets
is intended to assist in the implementation of the Company’s new business line
of selling furniture online. The acquisition was accounted for as a business combination.
See Note 17. |
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On
May 6, 2014, the Company, through Live Goods, acquired all of the issued and outstanding
shares in the capital of DealTicker Inc., a Canadian corporation (“DealTicker”).
This acquisition increased the Company’s ability to sell consumer goods online. |
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On
August 24, 2014, the Company entered into a Stock Purchase Agreement with Modern Everyday
Inc., a Delaware corporation (“MEI”). MEI sells consumer products online
and this acquisition further enhanced the Company ability to offer a larger array of
products to consumers online. |
Liquidity
The Company had
a net loss of $4.6 million and $5.7 million for the years ended September 30, 2014 and 2013, respectively. The Company had an
operating cash outflow of approximately $(5.2) million and $(1.8) million for the years ended September 30, 2014 and 2013. The
Company was sold shares of its common stock during the year ended September 30, 2014 for $13.7 million. The Company had cash of
$8.1 million as of September 30, 2014. 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.
While the Company
believes that its existing cash on hand is sufficient to finance our operations for the next twelve months, there can be no assurance
that we will generate profitability or positive operating cash flows in the near future. To the extent that we cannot achieve
profitability or positive operating cash flows, our business will be materially and adversely affected. Further, our business
is likely to experience significant volatility in its revenues, operating losses, personnel involved, products or services for
sale, and other business parameters, as management implements and revises our strategies and responds to operating results and
market conditions.
All data for
common stock, options and warrants have been retroactively reflected the 3-for-1 forward stock split (which took effect on February
11, 2014) for all periods presented. In addition, all common stock prices, and per share data for all periods presented have been
adjusted to reflect the 3-for-1 forward stock split. See Note 8 for details.
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