QUARTERLY REPORT

For the quarterly period ended June 30, 2020

Doofus Corporation

021-344061 (Securities and Exchange Commission File Number)
Delaware (State of Incorporation or Organization)	37-1836035 (I.R.S. Employer Identification Number)

Badenerstrasse 549, 8048 Zurich

Switzerland

(Address of Principal Executive Offices)

+41 44 551 0005

(Telephone Number)

The number of shares of common stock outstanding as of June 30, 2020 was 502,500,000.

TABLE OF CONTENTS

		Page
	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	4
	Balance Sheets as of June 30, 2020 and December 31, 2019	4
	Statements of Operations for the Three and Six Months Ended June 30, 2020 and June 30, 2019	5
	Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2020 and June 30, 2019	6
	Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2020 and June 30, 2019	7
	Statements of Cash Flows for the Six Months Ended June 30, 2020 and June 30, 2019	8
	Notes to Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17
Item 4.	Controls and Procedures	18
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	19
Item 1. A.	Risk Factors	19
Item 2.	Sales or Issues of Unregistered Equity Securities and Use of Proceeds	32
Item 3.	Signature	33

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this Quarterly Report include, but are not limited to, statements about:

· our ability to attract and retain users and increase their level of engagement;

· our plans regarding health and safety and our other top priorities, including our expectations regarding the impact on our reported metrics, policies and enforcement;

· the impact of the COVID-19 pandemic and related responses of businesses and governments to the pandemic on our operations and personnel, and on commercial activity and on our operating results;

· our ability to develop new products, product features and services, improve our existing products and services, including and increase the value of our products and services;

· our business strategies, plans and priorities, including our plans for growth and hiring, investment in our research and development efforts and our plans to scale capacity and enhance capability and reliability of our infrastructure, including capital expenditures relating to infrastructure;

· our work to increase the stability, performance, development velocity and scale of our products;

· our ability to provide content from third parties, including our ability to secure content on terms that are acceptable to us;

· our expectations regarding our user growth and growth rates and related opportunities;

· our ability to increase our revenue and our revenue growth rate;

· our ability to monetize and improve monetization of our products and services;

· our future financial performance, including revenue, cost of revenue, operating expenses, including stock-based compensation and income taxes;

· our expectations regarding certain deferred tax assets and fluctuations in our tax expense and cash taxes;

· the impact of privacy and data protection laws and regulations;

· the impact of content-related legislation or regulation;

· our expectations on future litigation or the decisions of the courts;

· the effects of trends on our results of operations;

· the impact of our future transactions and corporate structuring on our income and other taxes;

· the sufficiency of our cash and cash equivalents together with cash generated from operations to meet our working capital and capital expenditure requirements;

· our ability to timely and effectively develop, invest in, scale and adapt our existing technology and network infrastructure;

· our ability to successfully acquire and integrate companies and assets; and

· our expectations regarding international operations and foreign exchange gains and losses.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, operating results, cash flows or prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this Quarterly Report relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report to reflect events or circumstances after the date of this Quarterly Report or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

DOOFUS CORPORATION

BALANCE SHEETS

(Unaudited)

	June 30,		December 31,
	2020		2019
Assets
Current Assets:
Cash and Cash Equivalents	$	245	$	369
Prepaid Expenses and Other Current Assets		1,011		184
Total Current Assets		1,256		553
Property and Equipment, Net		1,169		-
Other Assets		252		-
Total Assets	$	2,677	$	553
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts Payable	$	4,295	$	715
Accrued and Other Current Liabilities		14,753		-
Due to Directors and Stockholders		5,585		2,886
Total Current Liabilities		24,633		3,601
Deferred and Other Long-Term Tax Liabilities, Net		(8,240)		(3,398)
Total Liabilities		16,393		203
Commitments and Contingencies (Note 12)
Stockholders' Equity:
Common Stock, $0.000001 Par Value – 1,000,000,000 Shares Authorized; 502,500,000 Shares Issued and Outstanding		503		502
Additional Paid-In Capital		24,997		14,998
Accumulated Other Comprehensive Loss		(274)		(34)
Accumulated Deficit		(38,942)		(15,116)
Total Stockholders' Equity		(13,716)		350
Total Liabilities and Stockholders' Equity	$	2,677	$	553

The accompanying notes are an integral part of these financial statements.

DOOFUS CORPORATION

STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Revenue	$	-	$	-	$	-	$	-
Costs and Expenses
Cost of Revenue		-		-		-		-
Research and Development		-		-		-		-
Sales and Marketing		-		-		-		-
General and Administrative		25,945		280		28,130		960
Total Costs and Expenses		25,945		280		28,130		960
Loss from Operations		(25,945)		(280)		(28,130)		(960)
Interest Expense		(1)		-		(1)		-
Interest Income		-		-		-		-
Other Expense, Net		(286)		32		(291)		(22)
Income Before Income Taxes		(26,232)				(28,422)		(982)
Benefit for Income Taxes		4,407		52		4,775		176
Net Loss	$	(21,825)	$	(196)	$	(23,647)	$	(806)
Net Loss per Share Attributable to Common Stockholders:
Basic	$	(0.00008)	$	(0.0000004)	$	(0.00005)	$	(0.000002)
Diluted	$	(0.00008)	$	(0.0000004)	$	(0.00005)	$	(0.000002)
Weighted-Average Shares Used to Compute Net Loss per Share Attributable to Common Stockholders:
Basic		501,730,769		500,016,484		501,615,385		500,008,287
Diluted		501,730,769		500,016,484		501,615,385		500,008,287

The accompanying notes are an integral part of these financial statements.

DOOFUS CORPORATION

STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Net Loss	$	(21,825)	$	(196)	$	(23,647)	$	(806)
Other Comprehensive Loss, Net of Tax:
Change in Foreign Currency Translation Adjustment		(174)		(54)		(393)		(11)
Net Change in Accumulated Other Comprehensive Loss		(174)		(54)		(393)		(11)
Comprehensive Loss	$	(21,999)	$	(250)	$	(24,040)	$	(817)

The accompanying notes are an integral part of these financial statements.

DOOFUS CORPORATION

STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020			2019			2020			2019
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount
Common Stock
Balance, Beginning of Period	501,500,000	$	502	500,000,000	$	500	501,500,000	$	502	500,000,000	$	500
Issuance of Common Stock	1,000,000		1	500,000		1	1,000,000		1	500,000		1
Balance, End of Period	502,500,000		503	500,500,000		501	502,500,000		503	500,500,000		501
Additional Paid-In Capital
Balance, Beginning of Period	-		14,998	-		-	-		14,998	-		-
Issuance of Common Stock	-		9,999	-		4,999	-		9,999	-		4,999
Balance, End of Period	-		24,997	-		4,999	-		24,997	-		4,999
Accumulated Other Comprehensive Loss
Balance, Beginning of Period	-		(100)	-		22	-		(26)	-		-
Other Comprehensive Loss	-		(174)	-		(54)	-		(393)	-		(11)
Balance, End of Period	-		(274)	-		(32)	-		(419)	-		(11)
Accumulated Deficit
Balance, Beginning of Period	-		(17,117)	-		(4,830)	-		(15,150)	-		(4,241)
Net Loss	-		(21,825)	-		(196)	-		(23,647)	-		(806)
Balance, End of Period	-		(38,942)	-		(5,026)	-		(38,797)	-		(5,047)
Total Stockholders' Equity	502,500,000	$	(13,716)	500,500,000	$	442	502,500,000	$	(13,716)	500,500,000	$	442

The accompanying notes are an integral part of these financial statements.

DOOFUS CORPORATION

STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended
	June 30,
	2020		2019
Cash Flows from Operating Activities
Net Loss	$	(23,647)	$	(805)
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation and Amortization Expense		479		-
Deferred Income Taxes		(4,842)		(176)
Other Adjustments		(126)		44
Changes in Assets and Liabilities:
Prepaid Expenses and Other Assets		(1,079)		(135)
Accounts Payable		3,579		-
Accrued and Other Liabilities		14,753		-
Net Cash Used in Operating Activities		(10,883)		(1,072)
Cash Flows from Investing Activities
Purchases of Property and Equipment		(1,649)		-
Net Cash Used in Investing Activities		(1,649)		-
Cash Flows from Financing Activities
Proceeds from Debt		2,700		738
Proceeds from Issuances of Common Stock		10,000		5,000
Net Cash Provided by Financing Activities		12,700		5,738
Net Increase in Cash, Cash Equivalents and Restricted Cash		168		4,666
Foreign Exchange Effect on Cash, Cash Equivalents and Restricted Cash		(292)		(22)
Cash, Cash Equivalents and Restricted Cash at Beginning of Period		369		286
Cash, Cash Equivalents and Restricted Cash at End of Period	$	245	$	4,930
Supplemental Disclosures of Non-Cash Investing and Financing Activities
Changes in Accrued Property and Equipment Purchases		(1,649)		-
Reconciliation of Cash, Cash Equivalents and Restricted Cash as Shown in the Statements of Cash Flows
Cash and Cash Equivalents	$	245	$	4,930
Restricted Cash Included in Prepaid Expenses and Other Current Assets		-		-
Restricted Cash Included in Other Assets		-		-
Total Cash, Cash Equivalents and Restricted Cash	$	245	$	4,930

The accompanying notes are an integral part of these financial statements.

DOOFUS CORPORATION

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

Note 1. Description of Business and Summary of Significant Accounting Policies

Description of Business

Doofus Corporation (the “Corporation”) was incorporated in Delaware on August 29, 2016 and is headquartered in Zurich, Switzerland. The Corporation is engaged in the business of computer and software services.

Fiscal Year

The Corporation’s fiscal year ends on December 31.

Basis of Presentation

The accompanying balance sheets as of June 30, 2020 and December 31, 2019 and the statements of operations, the statements of comprehensive income, statements of stockholders’ equity and the statements of cash flows for the three and six months ended June 30, 2020, respectively, and for the three and six months ended June 30, 2019, respectively, are unaudited.

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP). The unaudited interim financial statements reflect, in management’s opinion, all adjustments of a normal, recurring nature that are necessary for the fair statement of the Corporation’s financial position, results of operations and cash flows for the interim periods, but are not necessarily indicative of the results expected for the full fiscal year or any other period.

Prior Period Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

Prior Period Restatements

The Corporation’s financial statements for 2019 and for the three months ended March 31, 2020 have been restated for the effect of foreign currency translation adjustments that were made in the conversion of its Zurich branch’s financial statements from Swiss francs. As the financial statements are not determined to be materially misstated, the Corporation is not required to issue restated financial statements for 2019 and for the three months ended March 31, 2020.

Use of Estimates

The preparation of the Corporation’s financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, as well as related disclosure of contingent assets and liabilities. Actual results could differ materially from the Corporation’s estimates. To the extent that there are material differences between these estimates and actual results, the Corporation’s financial condition or operating results will be affected. The Corporation bases its estimates on past experience and other assumptions that the Corporation believes are reasonable under the circumstances, and the Corporation evaluates these estimates on an ongoing basis.

COVID-19 Impacts

The COVID-19 pandemic has caused widespread economic disruption and has impacted the Corporation in several ways. The Corporation expects the extent of the impact on its financial and operational results will depend on the duration and severity of the economic disruption caused by the COVID-19 pandemic.

The Corporation considered the impacts of the COVID-19 pandemic on its significant estimates and judgments used in applying its accounting policies in the three and six months ended June 30, 2020. In light of the pandemic, there is a greater degree of uncertainty in applying these judgments and depending on the duration and severity of the pandemic, changes to its estimates and judgments could result in a meaningful impact on the Corporation’s financial statements in future periods.

Recent Accounting Pronouncements

In December 2019, the FASB issued a new accounting standard update to simplify the accounting for income taxes. The new guidance removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods. It also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. The Corporation adopted this guidance on January 1, 2020, using the modified retrospective method, and the adoption did not have a material impact on the Corporation's financial statements and related disclosures.

With the exception of the standards discussed above, there have been no other recent accounting pronouncements or changes in accounting pronouncements during the three and six months ended June 30, 2020, as compared to the recent accounting pronouncements described in the Corporation's Financial Statements for the fiscal year ended December 31, 2019, that are of significance or potential significance to the Corporation.

Significant Accounting Policies

There have been no material changes to the Corporation’s significant accounting policies from its Financial Statements for the fiscal year ended December 31, 2019.

Note 2. Revenue

Revenue Recognition

The Corporation is pre-revenue and will derive its revenues from subscription fees, which are comprised of once off and recurring subscription fees.

Note 3. Cash and Cash Equivalents

Cash and cash equivalents consist of the following:

	June 30,		December 31,
	2020		2019
Cash	$	245	$	369
Total	$	245	$	369

Note 4. Fair Value Measurements

The Corporation measures its cash equivalents at fair value.

Note 5. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:

	June 30,		December 31,
	2020		2019
Prepaid Expenses	$	1,011	$	184
Total	$	1,011	$	184

Note 6. Depreciation

Property and equipment are stated at cost. Depreciation is calculated on a straight-line basis over the estimated useful lives of those assets as follows:

Computer, Equipment and Software	3 to 9 years
Furniture and Fixtures	3 to 9 years
Leasehold Improvements	The remaining lease term or up to 10 years

When assets are retired or otherwise disposed of, the cost and accumulated depreciation and amortization are removed from their respective accounts and any loss on such retirement is reflected in operating expenses.

Note 7. Property and Equipment, Net

The following tables set forth property and equipment, net by type and by geographic area for the periods presented:

	June 30,		December 31,
	2020		2019
Property and Equipment, Net
Equipment	$	1,648	$	-
Total		1,648		-
Less: Accumulated Depreciation and Amortization		(479)		-
Property and Equipment, Net	$	1,169	$	-
	June 30,		December 31,
	2020		2019
Property and Equipment, Net
Switzerland	$	1,169	$	-
United States		-		-
Total Property and Equipment, Net	$	1,169	$	-

Note 8. Other Assets

The following table presents the detail of other assets for the periods presented:

	June 30,		December 31,
	2020		2019
Security Deposits	$	252	$	-
Total	$	252	$	-

Note 9. Accrued and Other Current Liabilities

The following table presents the detail of accrued and other current liabilities for the periods presented:

	June 30,		December 31,
	2020		2019
Accrued Compensation	$	11,315	$	-
Accrued Social Security		2,612		-
Accrued Tax Liabilities		(216)		-
COVID-19 Assistance Loan		1,051		-
Credit Cards		(9)		-
Total	$	14,753	$	-

Note 10. Net Loss per Share

Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average common shares outstanding during the period.

Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period, including potential dilutive common stock instruments.

The following table presents the calculation of basic and diluted net loss per share for periods presented:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Basic Net Loss per Share:
Numerator
Net Loss	$	(21,825)	$	(196)	$	(23,647)	$	(806)
Denominator
Weighted-Average Common Shares Outstanding		501,730,769		500,016,484		501,615,385		500,008,287
Weighted-Average Shares Used to Compute Basic Net Loss per Share		501,730,769		500,016,484		501,615,385		500,008,287
Basic Net Loss per Share Attributable to Common Stockholders	$	(0.00008)	$	(0.0000004)	$	(0.00005)	$	(0.000002)
Diluted Net Loss per Share:
Numerator
Net Loss	$	(21,825)	$	(196)	$	(23,647)	$	(806)
Denominator
Number of Shares Used in Basic Computation		501,730,769		500,016,484		501,615,385		500,008,287
Weighted-Average Shares Used to Compute Diluted Net Loss per Share		501,730,769		500,016,484		501,615,385		500,008,287
Diluted Net Loss per Share Attributable to Common Stockholders	$	(0.00008)	$	(0.0000004)	$	(0.00005)	$	(0.000002)

Note 11. Stockholders' Equity

2020 Equity Incentive Plan

The Corporation’s 2020 Equity Incentive Plan was adopted by the Board of Directors on May 15, 2020 and approved by shareholders on June 24, 2020. The number of shares of the Corporation’s common stock available for issuance under the 2020 Equity Incentive Plan is 100,000,000. Under the 2020 Equity Incentive Plan the Corporation may grant incentive stock options, non-statutory stock options and restricted stock to directors, officers, employees and consultants.

Note 12. Income Taxes

The Corporation’s tax provision or benefit from income taxes for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any. Each quarter the Corporation updates its estimate of the annual effective tax rate and makes a year-to-date adjustment to the provision.

The Corporation recorded an income tax benefit of $4,407 and $4,775 for the three and six months ended June 30, 2020, respectively, and an income tax benefit of $52 and $176 for the three and six months ended June 30, 2019, respectively. The Corporation’s effective tax rate is based on forecasted annual results which may fluctuate significantly through the rest of the year.

As of June 30, 2020, the Corporation had $8,240 of unrecognized tax benefits which could result in a reduction of the Corporation’s effective tax rate, if recognized.

The Corporation is subject to taxation in the United States and various states and foreign jurisdictions. Earnings from non-U.S. activities are subject to local country income tax. The material jurisdictions in which the Corporation is subject to potential examination by taxing authorities include the United States and Switzerland. The Corporation believes that adequate amounts have been provided for in these jurisdictions.

Note 13. Commitments and Contingencies

Credit Facility

The Corporation has a revolving credit agreement with certain directors and stockholders which provides for a $50,000 unsecured revolving credit facility maturing on August 28, 2021. The Corporation is not obligated to pay interest on loans under this credit facility or other customary fees for a credit facility of this size and type, including an upfront fee and an unused commitment fee. As of June 30, 2020, $5,585 had been drawn under the credit facility compared to $3,314 on June 30, 2019.

Contractual Obligations

The Corporation had no contractual commitments for the three and six months ended June 30, 2020, respectively, and for the three and six months ended June 30, 2019, respectively.

Legal Proceedings

The Corporation was not involved in any legal proceedings, claims, investigations, and government inquiries and investigations for the three and six months ended June 30, 2020, respectively, and for the three and six months ended June 30, 2019, respectively.

Non-Income Taxes

The Corporation was not subject to any non-income tax audits by domestic or foreign tax authorities for the three and six months ended June 30, 2020, respectively, and for the three and six months ended June 30, 2019, respectively.

Note 14. Related Party Transactions

No related party transactions, other than the revolving credit agreement with certain directors and stockholders disclosed in Note 13, occurred in the three and six months ended June 30, 2020, respectively, and in the three and six months ended June 30, 2019, respectively.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and related notes thereto included in Item 1 “Financial Statements” in this Quarterly Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled “Risk Factors” included elsewhere in this Quarterly Report.

Overview and Highlights of Quarterly Results

The Corporation was pre-revenue for the three and six months ended June 30, 2020, respectively, and for the three and six months ended June 30, 2019, respectively.

Net loss was $21,825 and $23,647 for the three and six months ended June 30, 2020, respectively, compared to net loss of $196 and $806 for the three and six months ended June 30, 2019.

Loss from operations was $25,945 and $28,130 for the three and six months ended June 30, 2020, respectively, compared to loss from operations of $280 and $960 for the three and six months ended June 30, 2019, respectively.

Cash, cash equivalents and restricted cash totaled $245 as of June 30, 2020.

COVID-19 Update

The COVID-19 pandemic has resulted in public health responses including travel bans, restrictions, social distancing requirements, and shelter-in-place orders, which could negatively impact our operations and financial performance, including our ability to raise funding.

Given the unprecedented uncertainty and rapidly shifting market conditions of the business environment, we cannot reasonably estimate the full impacts of the COVID-19 pandemic on our future financial and operational results. We continue to monitor the evolving situation and guidance from international and domestic authorities, including federal, state and local public health authorities, and there may be developments outside our control requiring us to adjust our operating plan. As such, given the unprecedented uncertainty around the duration and severity of the impact on market conditions and the business environment, we cannot reasonably estimate the full impacts of the COVID-19 pandemic on our operating results in the future.

The risks related to the COVID-19 pandemic on our business are further described in “Part II – Other Information, Item 1A. Risk Factors.”

Results of Operations

The following tables set forth our statements of operations data for each of the periods presented:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Revenue	$	-	$	-	$	-	$	-
Costs and Expenses
Cost of Revenue		-		-		-		-
Research and Development		-		-		-		-
Sales and Marketing		-		-		-		-
General and Administrative		25,945		280		28,130		960
Total Costs and Expenses		25,945		280		28,130		960
Loss from Operations		(25,945)		(280)		(28,130)		(960)
Interest Expense		(1)		-		(1)		-
Interest Income		-		-		-		-
Other Expense, Net		(286)		32		(291)		(22)
Income Before Income Taxes		(26,232)				(28,422)		(982)
Benefit for Income Taxes		4,407		52		4,775		176
Net Loss	$	(21,825)	$	(196)	$	(23,647)	$	(806)

Revenue

No revenue was generated for the three and six months ended June 30, 2020, respectively, and for the three and six months ended June 30, 2019, respectively.

Cost of Revenue

No cost of revenue was incurred for the three and six months ended June 30, 2020, respectively, and for the three and six months ended June 30, 2019, respectively.

Research and Development

No research and development costs were incurred for the three and six months ended June 30, 2020, respectively, and for the three and six months ended June 30, 2019, respectively.

Sales and Marketing

No sales and marketing costs were incurred for the three and six months ended June 30, 2020, respectively, and for the three and six months ended June 30, 2019, respectively.

General and Administrative

General and administrative expenses consist primarily of personnel-related costs, including salaries, benefits, and social security contributions for our executive, administrative, finance, human resources, legal, technology and other employees. In addition, general and administrative expenses include fees and costs for professional services, including third-party services and facilities costs and other supporting overhead costs that are not allocated to other departments.

In the three and six months ended June 30, 2020, general and administrative expenses increased by $25,665 and $27,170 respectively, compared to the three and six months ended June 30, 2019, respectively. The increases were attributable to an increase in personnel-related costs mainly driven by an increase in employee headcount, facilities, and other supporting overhead expenses.

We plan to continue to invest in general and administrative functions to ensure we have an appropriate level of support for our key priorities and objectives.

Interest Expense

Interest expense in the three and six months ended June 30, 2020 comprised $1 and $1, respectively. No interest expense was incurred for the three and six months ended June 30, 2019, respectively.

Interest Income

No interest income was generated for the three and six months ended June 30, 2020, respectively, and for the three and six months ended June 30, 2019, respectively.

Other Expense, Net

Other expense, net, consists primarily of unrealized foreign exchange gains and losses due to re-measurement of monetary assets and liabilities denominated in non-functional currencies and realized foreign exchange gains and losses on foreign exchange transactions. We expect our foreign exchange gains and losses will vary depending upon movements in the underlying exchange rates.

Benefit for Income Taxes

Our benefit from income taxes increased by $4,355 and $4,599 in the three and six months ended June 30, 2020, respectively, compared to the three and six months ended June 30, 2019, respectively. In the three and six months ended June 30, 2020, the benefit from income taxes was $4,407 and $4,775 respectively, and in the three and six months ended June 30, 2019 the benefit from income taxes was $52 and $176 respectively. The increase in benefit from income taxes was due to the increase in loss before tax.

Credit Facility

We have a revolving credit agreement with certain directors and stockholders which provides for a $50,000 revolving unsecured credit facility maturing on August 28, 2021. We are not obligated to pay interest on loans under the credit facility or other customary fees for a credit facility of this size and type, including an upfront fee and an unused commitment fee. As of June 30, 2020, $5,585 had been drawn under the credit facility compared to $3,314 on June 30, 2019.

Operating Activities

Cash used by operating activities consists of net loss adjusted for certain non-cash items including depreciation and amortization, deferred income taxes as well as the effect of changes in working capital and other activities. We expect that cash provided by operating activities will fluctuate in future periods as a result of a number of factors, including fluctuations in our revenue and increases in operating expenses. For additional discussion, see “Part II – Other Information, Item 1A. Risk Factors.”

Cash used by operating activities in the six months ended June 30, 2020 was $10,883, an increase in cash outflow of $9,811 compared to the six months ended June 30, 2019. Cash used by operating activities was driven by a net loss of $23,647, as adjusted for the exclusion of non-cash expenses and other adjustments totaling $12,764, of which $479 was related to depreciation and amortization expense, and $12,285 was related to the effect of changes in working capital and other carrying balances.

Cash used by operating activities in the six months ended June 30, 2019 was $1,072. Cash used by operating activities was driven by net loss of $805, as adjusted for the exclusion of non-cash expenses and other adjustments totaling $267.

Investing Activities

Our primary investing activities consist of purchases of property and equipment, particularly computer and related equipment.

Cash used by investing activities in the six months ended June 30, 2020 was $1,649, an increase in cash outflow of $1,649 compared to the six months ended June 30, 2019. The increase was primarily due to a $1,649 increase in purchases of property and equipment in the six months ended June 30, 2020.

Financing Activities

Our primary financing activities consist of loans from directors and stockholders.

Cash provided by financing activities in the six months ended June 30, 2020 was $12,700, compared to $5,738 in the six months ended June 30, 2019. The change was primarily due to $10,000 in proceeds from the issuances of common stock in the six months ended June 30, 2020.

Contractual Obligations

Refer to Note 13 – “Commitments and Contingencies” for details.

Off Balance Sheet Arrangements

We do not have any off-balance sheet arrangements and did not have any such arrangements as of June 30, 2020.

Critical Accounting Policies and Estimates

We prepare our financial statements and related notes in accordance with U.S. GAAP. In doing so, we make estimates and assumptions that affect our reported amounts of assets, liabilities, revenue and expenses, as well as related disclosure of contingent assets and liabilities. To the extent that there are material differences between these estimates and actual results, our financial condition or operating results would be affected. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. We refer to accounting estimates of this type as critical accounting policies and estimates. Please refer to our Financial Statements for the fiscal year ended December 31, 2019 for a more complete discussion of our critical accounting policies and estimates.

There have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates described in our Financial Statements for the fiscal year ended December 31, 2019.

Recent Accounting Pronouncements

For information with respect to recent accounting pronouncements and the impact of these pronouncements on our financial statements, see Note 1 – “Description of Business and Summary of Significant Accounting Policies” in the notes to the financial statements included in Part I of this Quarterly Report.