WEYLAND TECH, INC.

In July 2018, the FASB issued ASU No. 2018-09, “Codification Improvements” (“ASU 2018-09”). These amendments provide clarifications and corrections to certain ASC subtopics including the following: Income Statement - Reporting Comprehensive Income – Overall (Topic 220-10), Debt - Modifications and Extinguishments (Topic 470-50), Distinguishing Liabilities from Equity – Overall (Topic 480-10), Compensation - Stock Compensation - Income Taxes (Topic 718-740), Business Combinations - Income Taxes (Topic 805-740), Derivatives and Hedging – Overall (Topic 815-10), and Fair Value Measurement – Overall (Topic 820-10). The majority of the amendments in ASU 2018-09 will be effective in annual periods beginning after December 15, 2019. The adoption of ASU 2018-09 is not expected to have a material impact on our consolidated financial statements or disclosures.

On the Closing Date, the Company issued 564,467 restricted shares of its common stock to Fixel Stockholders, of which the shares allocated to the Fixel stockholders that are residents of Israel (“Israel Stockholders”) will be delivered to an independent third-party escrow (the “Escrow Shares”), where (i) such shares will be released to Israel Stockholders upon each Israel Stockholder’s compliance with the 104H tax ruling issued by certain tax authorities of Israel in connection with the Merger and (ii) shares held by Founders making up approximately 20% of the shares issued will be held subject to offset for indemnification purposes. The Shares were issued at a trailing twenty (20) day VWAP of $8.86 per share.

The revenues from the our APPLogiq platform decreased to $3,206,346 compared to $8,996,441 for the three months ended September 30, 2020 and 2019, respectively as a result of providing complimentary subscriptions to retain our customers impacted by Covid-19 pandemic and discontinuing certain white-label relationships deemed to be both low margin income and high operating expense (“OPEX”) areas of business. In late Q3, the CreateApp platform, renamed APPLogiq, introduced a pilot program through a 100% digital, direct sales channel which has shown higher profit margins (35-40%), at a significantly reduced cost from the previous white label partnerships. We believe that through this model, the lower margin/high operating cost white label partnerships can be replaced with this digital model offering higher profit margin business and considerably lower costs.

Our APPLogiq platform gross margin reduced to 12.08% from 17.75% as a result of providing complimentary services and discounting to maintain customers during Covid-19 pandemic. However, the Company’s management believes that moving forward, gross margins will increase when providing complimentary services ends and from the discontinued lower margin white label resellers. In late Q3, the CreateApp platform, renamed APPLogiq, introduced a pilot program through a 100% digital, direct sales channel which has shown higher profit margins (35-40%), at a significantly reduced cost from the previous white label partnerships. We believe that through this model, the lower margin/high operating cost white label partnerships can be replaced with this digital model offering higher profit margin business and considerably lower costs.

The revenues from the our APPLogiq platform were $20,645,584 and $24,630,065 for the nine months ended September 30, 2020 and 2019, respectively. Our Q3 APPLogiq revenues were adversely impacted as a result of providing complimentary subscriptions to retain our customers affected by Covid-19 pandemic and discontinuing certain white-label relationships, deemed to be both low margin income and high operating expense (“OPEX”) areas of business, reduced to $ 3,206,346 from $5,653,495 in Q2. In late Q3, the CreateApp platform, renamed APPLogiq, introduced a pilot program through a 100% digital, direct sales channel which has shown higher profit margins (35-40%), at a significantly reduced cost from the previous white label partnerships. We believe that through this model, the lower margin/high operating cost white label partnerships can be replaced with this digital model offering higher profit margin business and considerably lower costs.