SHIFTPIXY, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q) -

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• our future financial performance, including our revenue, costs of revenue and
• the sufficiency of our cash, cash equivalents and investments to meet our
• our ability to manage effectively our growth and future expenses, including
• our ability to maintain, protect and enhance our intellectual property;
• our ability to comply with modified or new laws and regulations applying to
• the attraction and retention of qualified employees and key personnel;
• the effect that the novel coronavirus disease (“COVID-19”) or other public
condition and the economy
• our ability to be successful in defending litigation brought against us; and
• our ability to continue to meet the listing requirements of Nasdaq.
We caution you that the forward-looking statements highlighted above do not encompass all of the forward-looking statements made in this Quarterly Report.
We believe that our customer value proposition is to provide a combination of overall net cost savings to our clients, for which they are willing to pay increased administrative fees, as follows:
We have invested heavily in a robust, cloud-based HRIS platform (the ShiftPixy “Ecosystem”) in order to:
COVID-19 Pandemic Impact
Significant Developments in the Three Months Ended February 28, 2022.
Financing Activities
January 2022 Warrant Exercise Agreement
September 2021 Private Placement
Growth Initiatives
Sponsorship of SPACs
ShiftPixy Labs
Workers’ Compensation Insurance
Vensure Asset Sale Note Receivable Reconciliation
Quarterly Performance Highlights: Second Quarter Fiscal 2022 v. Second Quarter Fiscal 2021
•Served approximately 72 clients and an average of 3,000 WSEs.
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Results of Operations
The following table summarizes the unaudited condensed consolidated results of our operations for the three and six months ended February 28, 2022, and February 28, 2021.
2,419,000 $ 19,378,000 $ 4,922,000 Cost of revenue
(6,183,000) $ (18,210,000) $ (13,119,000)
(6,183,000) $ (26,000,000) $ (13,119,000)
Three and six months ended February 28, 2022
Billings per WSE increased to $3,567 and $6,623 for the three and six month period ended February 28, 2022, due primarily to business recoveries achieved by our QSR clients as the pandemic subsided, combined with an increase in the placement of nursing WSEs who earn higher wages and generate higher billings.
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Commissions consist of commissions payments made to third party brokers and inside sales personnel, and remained consistent year over year, with a slight decrease based on the reduction of our sales force.
Depreciation and amortization for the three and six months ended February 28, 2022, increased by $44,000, or 51% and $105,000 or 70.9%, respectively, as compared to the same period in Fiscal 2021, due to depreciation of the additional asset purchased during the period to support our growth initiatives.
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Liquidity and Capital Resources
For a discussion of our liquidity and capital resources, see Note 6, Going Concern, to the Notes to the Condensed Consolidated Financial Statements in “Part I, Item 1. Condensed Consolidated Financial Statements (Unaudited)” of this Quarterly Report.
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Reconciliation of GAAP to Non-GAAP Measure
Gross Billings to Net Revenues
The following table provides the key revenue and our primary gross profit driver used by management.
Our billed WSEs as of the end of:
Material Commitments
New and Recently Adopted Accounting Standards
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