# Dogecoin Cash, Inc.: Form 10-Q for the period ended Sep 30, 2020

- Company: [Dogecoin Cash, Inc.](/companies/dogp.md) (CIK 1360442)
- Form: 10-Q
- Filed: 2020-11-16
- Accepted by EDGAR: Nov 16, 2020, 12:55 ET
- Period: 2020-09-30
- Accession: 0001096906-20-000293
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1360442/000109690620000293/cbds_10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1360442/000109690620000293/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2020-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2020-07-01 to 2020-09-30 | $459.8k | us-gaap:Revenues |
| Revenue | 9 months, 2020-01-01 to 2020-09-30 | $1.7m | us-gaap:Revenues |
| Cost of revenue | 3 months, 2020-07-01 to 2020-09-30 | $228.7k | us-gaap:CostOfRevenue |
| Cost of revenue | 9 months, 2020-01-01 to 2020-09-30 | $698.3k | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2020-07-01 to 2020-09-30 | $231.1k | us-gaap:GrossProfit |
| Gross profit | 9 months, 2020-01-01 to 2020-09-30 | $975.7k | us-gaap:GrossProfit |
| Operating income | 3 months, 2020-07-01 to 2020-09-30 | −$664.9k | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2020-01-01 to 2020-09-30 | −$1.8m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2020-07-01 to 2020-09-30 | $15.8k | us-gaap:InterestExpense |
| Interest expense | 9 months, 2020-01-01 to 2020-09-30 | $44.2k | us-gaap:InterestExpense |
| Income tax | 3 months, 2020-07-01 to 2020-09-30 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2020-01-01 to 2020-09-30 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2020-07-01 to 2020-09-30 | −$558.5k | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2020-01-01 to 2020-09-30 | −$1.7m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2020-07-01 to 2020-09-30 | −$0.02 | us-gaap:EarningsPerShareBasicAndDiluted |
| Diluted EPS | 9 months, 2020-01-01 to 2020-09-30 | −$0.07 | us-gaap:EarningsPerShareBasicAndDiluted |
| Operating cash flow | 9 months, 2020-01-01 to 2020-09-30 | −$65.7k | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2020-01-01 to 2020-09-30 | $57.2k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Current assets | at 2020-09-30 | $518.8k | us-gaap:AssetsCurrent |
| Total assets | at 2020-09-30 | $3.3m | us-gaap:Assets |
| Current liabilities | at 2020-09-30 | $1.5m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2020-09-30 | $1.5m | us-gaap:Liabilities |
| Shareholders' equity | at 2020-09-30 | $667.0k | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 16,385 characters.

*Certain statements in this Report constitute “forward-looking statements.” Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Factors that might cause such a difference include, among others, uncertainties relating to general economic and business conditions; industry trends; changes in demand for our products and services; uncertainties relating to customer plans and commitments and the timing of orders received from customers; announcements or changes in our pricing policies or that of our competitors; unanticipated delays in the development, market acceptance or installation of our products and services; changes in government regulations; availability of management and other key personnel; availability, terms, and deployment of capital; relationships with third-party equipment suppliers; and worldwide political stability and economic growth. The words “believe,” “expect,” “anticipate,” “intend” and “plan” and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.*

### Results of Operations

### Three Months Ended September 30, 2020 compared with the Three Months Ended September 30, 2019

The Company operates two business segments: PrestoCorp, Inc. (“PrestoCorp”), a telehealth business, and GK Manufacturing and Packaging, Inc. (“GKMP”), a contract manufacturing business. The results of PrestoCorp and GKMP are consolidated in the Company’s financial statements. Discussion of results of operations includes the consolidated results and the business segment results in the following sections.

|  | Three Months Ended A September 30, 2020 | B September 30, 2019 | A-B Change | Change % |
| --- | ---: | ---: | ---: | ---: |
| REVENUE | $ 459,786 | $ 453,653 | $ 6,133 | 1% |
| Cost of Sales | 228,689 | 176,516 | 52,173 | 30% |
| Cost of sales % of total sales | 50% | 39% | 11% |  |
| Gross Profit | 231,097 | 277,137 | (46,040) | -17% |
| Gross profit % of sales | 50% | 61% | -11% |  |
| OPERATING EXPENSES |  |  |  |  |
| Professional fees | 132,439 | 100,827 | 31,612 | 31% |
| Depreciation and amortization | 56,547 | 140,337 | (83,790) | -60% |
| Wages and salaries | 215,373 | 123,283 | 92,090 | 75% |
| Advertising | 108,933 | 42,793 | 66,140 | 155% |
| General and administrative | 382,713 | 322,943 | 59,770 | 19% |
| Total operating expenses | 896,005 | 730,183 | 165,822 | 23% |
| NET LOSS FROM OPERATIONS | (664,908) | (453,046) | (211,862) | 47% |

Revenues grew 1% in the three months ended September 30, 2020 compared to the three months ended September 30, 2019. Revenues in the third quarter of 2019 increased due to the expansion of the telehealth platform into Oklahoma. After the initial influx of customers in the new market, the customer visits returned to the pre-expansion levels. In addition, in 2020, the Company saw significant increases in business in the first and second quarters due to the COVID -19 pandemic as customers across our markets hurried to get their medical marijuana cards prior to an expected shut down. This had the effect of depressing revenues in the third quarter ended September 30, 2020. These factors combined to generate higher than expected sales in the third quarter of 2019 and lower than expected sales in the third quarter of 2020. Management expects that customer traffic will normalize in the fourth quarter of 2020. Revenues in the current quarter also reflect the start-up operations of GKMP.

Margins decreased in the three months ended September 30, 2020 compared to the same period in 2019. The decrease was due to the establishment of a contract manufacturing division with a different margin structure than the telehealth business. See discussion under Business Segments, below.

Net operating loss for the three-month period ended September 30, 2020 was $664,908 compared to net loss of $453,046 for the three-month period ended September 30, 2019. The increase in net operating loss resulted primarily from an increase in operating expenses relating to GKMP operations.

Total operating expenses were $896,005 for the three-month period ended September 30, 2020 and $730,183 for the three-month period ended September 30, 2019. The increase in total operating costs was largely attributable to increased personnel, the addition of GKMP, and increases in activity brought on by the significant increase in revenue and patient load at PrestoDoctor. The Company also significantly reduced its depreciation and amortization expense due to impairment of amortizable intangible assets taken in the year ended December 31, 2019. Management expects that operating costs will continue to increase as revenues rise, but the increases in operating costs are expected to rise at a slower rate than revenue due to expected efficiencies of scale.

Business Segment Results.

| PRESTOCORP | Three Months Ended A September 30, 2020 | B September 30, 2019 | A-B Change | Change % |
| --- | ---: | ---: | ---: | ---: |
| REVENUE | $ 416,982 | $ 453,653 | $ (36,671) | -8% |
| Cost of Sales | 158,360 | 176,516 | (18,156) | -10% |
| Cost of sales % of total sales | 38% | 39% | -1% |  |
| Gross Profit | 258,622 | 277,137 | (18,515) | -7% |
| Gross profit % of sales | 62% | 61% | 1% |  |

PrestoCorp revenues declined in the third quarter of 2020 compared to the same period in 2019. As noted above, the decrease was the result of a revenue spike in the third quarter of 2019 when the Company expanded its market into Oklahoma and a decrease in revenues in the third quarter of 2020 due to a rush for medical marijuana cards brought on by the COVID – 19 pandemic in the first and second quarters of the current year. Margins were consistent with prior periods at 62% of revenue.

Management expects to see incremental growth in the coming periods as additional markets are opened and the acceptance of telehealth continues to grow due to the pandemic.

| GKMP | Three Months Ended A September 30, 2020 | B September 30, 2019 | A-B Change |
| --- | ---: | ---: | ---: |
| REVENUE | $ 42,569 | $ - | $ 42,569 |
| Cost of Sales | 70,329 | - | 70,329 |
| Cost of sales % of total sales | 165% |  | 165% |
| Gross Profit | (27,760) | - | (27,760) |
| Gross profit % of sales | -65% |  | -65% |

GKMP did not operate in the three months ended September 30, 2019. Results of operations for the contract manufacturing business reflect the start-up nature of this segment and the impact of the pandemic on prospective customers and their willingness to commit to contract manufacturing efforts when there is substantial uncertainty surrounding the long-term effect of the pandemic. GKMP operated with a negative gross profit in the quarter ended September 30, 2020. This was primarily due to high labor costs incurred during the start-up phase of operations.

### Nine Months Ended September 30, 2020 compared with the Nine Months Ended September 30, 2019

|  | Nine Months Ended A September 30, 2020 | B September 30, 2019 | A-B Change | Change % |
| --- | ---: | ---: | ---: | ---: |
| REVENUE | $ 1,674,021 | $ 704,998 | $ 969,023 | 137% |
| Cost of Sales | 698,307 | 291,713 | 406,594 | 139% |
| Cost of sales % of total sales | 42% | 41% | 0% |  |
| Gross Profit | 975,714 | 413,285 | 562,429 | 136% |
| Gross profit % of sales | 58% | 59% | 0% |  |
| OPERATING EXPENSES |  |  |  |  |
| Professional fees | 621,701 | 397,595 | 224,106 | 56% |
| Depreciation and amortization | 161,198 | 421,254 | (260,056) | -62% |
| Wages and salaries | 564,176 | 248,259 | 315,917 | 127% |
| Advertising | 321,413 | 104,281 | 217,132 | 208% |
| General and administrative | 1,103,255 | 971,558 | 131,697 | 14% |
| Total operating expenses | 2,771,743 | 2,142,947 | 628,796 | 29% |
| NET LOSS FROM OPERATIONS | (1,796,029) | (1,729,662) | (66,367) | 4% |

Revenues, cost of revenues and gross profit for the nine-month periods ended September 30, 2020 and 2019 are included in the above table. The fluctuation in these numbers is primarily the result of significant increases in patient visits due to expanded market coverage and the generally increasing acceptance of telehealth platforms in the age of the Covid-19 pandemic.

Revenues grew 137% in the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019. Of this increase, approximately 95% was attributable to PrestoDoctor and 5% from our start-up operations in GKMP. This large increase in revenue in PrestoDoctor is the result of expanded market area, increased advertising which drove an increase in patient visits to our online platform, and a general increase in consumer awareness of the PrestoDoctor brand. The Company also benefited from the increased acceptance of telehealth due to the pandemic. The Company now operates in the states of California, Nevada, New York, Oklahoma, Missouri, and Pennsylvania and recently opened in Illinois. The Company is currently exploring expansion opportunities in additional states, including Ohio, Virginia, and Massachusetts.

Net operating loss for the nine-month period ended September 30, 2020 was $1,796,029 compared to a net loss of $1,729,662 for the nine-month period ended September 30, 2019. The increase in net operating loss resulted primarily from an increase in operating costs relating to the start-up operations of GKMP.

Total operating expenses were $2,771,743 for the nine-month period ended September 30, 2020 and $2,142,497 for the nine-month period ended September 30, 2019. The increase in total operating costs was largely attributable to increased personnel, the addition of GKMP, and increases in activity brought on by the significant increase in revenue and patient load. The Company also significantly reduced its depreciation and amortization expense due to impairment of amortizable intangible assets taken in the year ended December 31, 2019. Management expects that operating costs will continue to increase as revenues rise, but the increases in operating costs are expected to rise at a slower rate than revenue due to expected efficiencies of scale and improved efficiencies in GKMP as it moves beyond the start-up phase.

Business Segment Results

| PRESTOCORP | Nine Months Ended A September 30, 2020 | B September 30, 2019 | A-B Change | Change % |
| --- | ---: | ---: | ---: | ---: |
| REVENUE | $ 1,602,599 | $ 704,998 | $ 897,601 | 127% |
| Cost of Sales | 607,837 | 291,713 | 316,124 | 108% |
| Cost of sales % of total sales | 38% | 41% | -3% |  |
| Gross Profit | 994,762 | 413,285 | 581,477 | 141% |
| Gross profit % of sales | 62% | 59% | 3% |  |

For the nine months ended September 30, 2020, PrestoCorp revenues increased by 127% and cost of sales decreased by 3% resulting in a 62% gross profit for the nine months compared the same period in 2019. These improvements were the result of higher traffic due to brand awareness, additional marketing efforts, and the positive impact on telehealth due to the pandemic.

| GKMP | Nine Months Ended A September 30, 2019 | B September 30, 2020 | B-A Change |
| --- | ---: | ---: | ---: |
| REVENUE | $ - | $ 70,989 | $ 70,989 |
| Cost of Sales | - | 90,470 | 90,470 |
| Cost of sales % of total sales |  | 127% | 127% |
| Gross Profit | - | (19,481) | (19,481) |
| Gross profit % of sales |  | -27% | -27% |

GKMP did not operate in 2019. For the nine months ended September 30, 2020, GKMP was in the start-up phase. Revenue and operating efficiencies were impacted by the economic uncertainties brought on by the pandemic, the learning curve required for the labor force to become familiar with the manufacturing equipment, the cost of moving into a new facility, and the need to build a backlog of customer orders to streamline the production process. The start-up phase has taken longer than expected, primarily due to the pandemic. Management expects these negative factors to lessen in the coming periods. Management is currently focused on building its customer base and product line.

### Liquidity and Capital Resources

Net cash used in operating activities for the nine-month period ended September 30, 2020, was $65,721. During the same period, our cash increased by $97,599. The Company generated $145,500 in the nine months from advances from related parties, $25,000 from the sale of common stock, and applied a $50,000 advance as partial consideration for the acquisition of assets by GK Manufacturing and Packaging, Inc., a newly formed contract manufacturing entity that is owned 51% by the Company. We also reported stock-based compensation of $1,555,208 during the nine-month period from issuance of common and preferred stock as compensation for services performed by officers, directors, and contractors. On September 30, 2020, our cash position was $433,706. The Company has agreed to provide additional funding totaling approximately $30,000 for GK Manufacturing in the coming months to further assist with start-up expenses. Given the level of operations in our third quarter, we expect that additional funds will be required. Management is currently evaluating several fund-raising alternatives including private placement of equity securities, a secondary public offering, and various debt instruments. In addition, key members of management have indicated a willingness to provide additional operating capital from time to time. Based on all these considerations, we believe we will have sufficient capital to operate the business for the next twelve months.

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. We incurred a net loss of $1,807,249 and $1,850,088, respectively, for the nine-month periods ended September 30, 2020, and 2019, and had an accumulated deficit of $76,250,184 as of September 30, 2020. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company is currently seeking to raise money for working capital purposes through a private placement of equity capital and is evaluating other opportunities to raise capital from a public offering or the sale of convertible debt. It will be important for the Company to be successful in its efforts to raise capital in this manner if it is going to be able to further its business plan in an aggressive manner. Raising capital in this manner will cause dilution to current shareholders.

### COVID-19

COVID-19 has been declared a pandemic by the World Health Organization and the Centers for Disease Control and Prevention. Its rapid spread around the world and throughout the United States prompted many countries, including the United States, to institute restrictions on travel, public gatherings, and certain business operations. These restrictions significantly disrupted economic activity in the United States and Worldwide. To date, the disruption did not materially impact the Company’s financial statements. However, if the severity of the economic disruptions increase as the duration of the COVID-19 pandemic continues, the negative financial impact due to reduced demand could be significantly greater in future periods than in the first quarter.

The effects of the continued outbreak of COVID-19 and related government responses could also include extended disruptions to supply chains and capital markets, reduced labor availability and a prolonged reduction in economic activity. These effects could have a variety of adverse impacts on the Company, including our ability to operate our facilities. To date, there have been no material adverse impacts to the Registrants’ operations due to COVID-19.

In addition, the economic disruptions caused by COVID-19 could also adversely impact the impairment risks for certain long-lived assets, equity method investments and goodwill. Management evaluated these impairment considerations and determined that no such impairments occurred through the date of this report.

Off Balance Sheet Arrangements

None

## Controls and procedures

As filed, 1,828 characters.

### Disclosure Controls and Procedures

### Conclusions of Management Regarding Effectiveness of Disclosure Controls and Procedures

At the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operations of the Company’s disclosure controls and procedures (as defined in Rule 13a – 15(e) and Rule 15d – 15(e) under the Exchange Act). Based on that evaluation, the CEO and the CFO have concluded that as of the end of the period covered by this report, the Company’s disclosure controls and procedures were not effective as it was determined that there were material weaknesses affecting our disclosure controls and procedures.

Management of the Company believes that these material weaknesses are due to the small size of the company’s accounting staff. The small size of the Company’s accounting staff may prevent adequate controls in the future, such as segregation of duties, due to the cost/benefit of remediation. To mitigate the current limited resources and limited employees, we rely heavily on direct management oversight of transactions, along with the use of external legal and accounting professionals. As the Company grows, management expects to increase the number of employees, which will enable us to implement adequate segregation of duties within the internal control framework.

### Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting during the quarter ended September 30, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Filed Nov 16, 2020.
Source: SEC EDGAR, the filing index for accession 0001096906-20-000293. Last ingested by Listed: Oct 24, 2026, 15:11 ET. No prices; not investment advice.