FORWARD LOOKING STATEMENTS

In addition to historical information, this Form 10-Q (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, which includes, but are not limited to, statements concerning expectations as to our revenues, expenses, and net income, our growth strategies and plans, the timely development and market acceptance of our products and technologies, the competitive nature of and anticipated growth in our markets, our ability to achieve cost reductions, the status of evolving technologies and their growth potential, the adoption of future industry standards, expectations as to our financing and liquidity requirements and arrangements, the need for additional capital, and other matters that are not historical facts. These forward-looking statements are based on our current expectations, estimates, and projections about our industry, management's beliefs, and certain assumptions made by it. Words such as "anticipates", "appears", "believe,", "expects", "intends", "plans", "believes, "seeks", "assume," "estimates", "may", "will" and variations of these words or similar expressions are intended to identify forward-looking statements. All statements in this Quarterly Report regarding our future strategy, future operations, projected financial position, estimated future revenue, projected costs, future prospects, and results that might be obtained by pursuing management's current plans and objectives are forward-looking statements. Therefore, actual results could differ materially and adversely from those results expressed in any forward-looking statements, as a result of various factors. Readers are cautioned not to place undue reliance on forward-looking statements, which are based only upon information available as of the date of this report. You should not place undue reliance on our forward-looking statements because the matters they describe are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond our control. Our forward-looking statements are based on the information currently available to us and speak only as of the date on which this Quarterly Report was filed with the Securities and Exchange Commission ("SEC"). We expressly disclaim any obligation to revise or update publicly any forward-looking statements even if subsequent events cause our expectations to change regarding the matters discussed in those statements. Over time, our actual results, performance or achievements will likely differ from the anticipated results, performance or achievements that are expressed or implied by our forward-looking statements, and such difference might be significant and materially adverse to our stockholders. Unless the context indicates otherwise, the terms "Company", "Corporate", "CMGO", "our", and "we" refer to CMG Holdings Group, Inc. and its subsidiaries.

RESULTS OF OPERATIONS FOR THE SIX MONTH PERIOD ENDED June 30, 2020

Gross revenues decreased from $1,841,011 for the six months ended June 30, 2019 to $9,609 for the six months ended June 30, 2020. The decrease in revenues was mainly attributable to the worldwide pandemic that took place during the quarter. At least two major jobs that were scheduled for the first quarter were canceled due to the pandemic.

Cost of revenue decreased from $968,163 for the six months ended June 30, 2019 to $8,644 for the six months ended June 30, 2020. The decrease in revenues was mainly attributable to the worldwide pandemic that took place during the quarter. At least two major jobs that were scheduled for the first quarter were canceled due to the pandemic.

Operating expenses decreased from $308,089 for the six months ended June 30, 2019 to $368,359 for the six months ended June 30, 20205. The increase in operating expenses is due to the increase in salaries for its full-time employees.

Net income decreased from $1,105,726 for the six months ended June 30, 2019 to net loss of $91,792 for the six months ended June 30, 2020. The decrease in net income to net loss was mainly attributable to the worldwide pandemic that took place during the quarter. At least two major jobs that were scheduled for the first quarter were canceled due to the pandemic.

LIQUIDITY AND CAPITAL RESOURCES:

As of June 30, 2020, the Company's cash on hand was $453,979.

Cash used in operating activities for the six months ended June 30, 2020 was $114,420, as compared to cash provided by operating activities of $293,233 for the six months ended June 30, 2019. The decrease in revenues was mainly attributable to the worldwide pandemic that took place during the quarter. The large job that was scheduled was canceled.

Cash used in investing activities for the six months ended June 30, 2020 was $183,149 as compared cash used in investing activities of $38,500 for the six months ended June, 2019. This was due to the Company loaning Pristec America an additional $10,000 during the quarter.

Cash used in financing activities for the six months ended June 30, 2020 was $30,204, as compared to $8,075 used for the six months ended June 30, 2019.


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