0001477932-18-004680.txt : 20180928 0001477932-18-004680.hdr.sgml : 20180928 20180928164609 ACCESSION NUMBER: 0001477932-18-004680 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 49 CONFORMED PERIOD OF REPORT: 20180630 FILED AS OF DATE: 20180928 DATE AS OF CHANGE: 20180928 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LEAFBUYER TECHNOLOGIES, INC. CENTRAL INDEX KEY: 0001643721 STANDARD INDUSTRIAL CLASSIFICATION: TRANSPORTATION SERVICES [4700] IRS NUMBER: 383944821 STATE OF INCORPORATION: NV FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-55855 FILM NUMBER: 181094680 BUSINESS ADDRESS: STREET 1: 6888 S. CLINTON STREET, SUITE 300 CITY: GREENWOOD VILLAGE STATE: CO ZIP: 80112 BUSINESS PHONE: 720-235-0099 MAIL ADDRESS: STREET 1: 6888 S. CLINTON STREET, SUITE 300 CITY: GREENWOOD VILLAGE STATE: CO ZIP: 80112 FORMER COMPANY: FORMER CONFORMED NAME: AP EVENT INC. DATE OF NAME CHANGE: 20150529 10-K 1 lbuy_10k.htm FORM 10-K lbuy_10k.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

x

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

¨

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended: June 30, 2018

 

Commission file number: 333-206745

 

LEAFBUYER TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

 

Nevada

 

38-3944821

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

6888 S. Clinton Street, Suite 300, Greenwood Village, CO 80112

 (Address of principal executive offices, including zip code)

 

(720)-235-0099

(Registrant’s telephone number, including area code)

 

 ____________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Exchange Act: None

 

Securities registered pursuant to Section 12(g) of the Exchange Act: Common Stock, Par Value $0.001

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ¨ No x

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

 

Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

 

Indicate by check mark whether the Company is a larger accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

¨

Accelerated filer

¨

Non-accelerated filer

¨

Smaller reporting company

x

 

Emerging growth company

¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

 

The aggregate market value of the voting stock held on December 31, 2017 by non-affiliates of the registrant was approximately $31,882,000 based on the last offering price of $1.78 per share (calculated by excluding all shares held by executive officers, directors and holders known to the registrant of ten percent or more of the voting power of the registrant’s common stock, without conceding that such persons are “affiliates” of the registrant for purposes of the federal securities laws).

 

As of September 28, 2018, the Registrant had 42,747,228 shares of common stock outstanding. 

 

 
 
 
 

  

Table of Contents

 

 

 

 

Page

 

PART I

 

 

 

 

 

 

 

 

 

Item 1.

Business

 

 

3

 

Item 1A.

Risk Factors

 

 

5

 

Item 1B.

Unresolved Staff Comments

 

 

9

 

Item 2.

Properties

 

 

9

 

Item 3.

Legal Proceedings

 

 

9

 

Item 4.

Mine Safety Disclosures

 

 

9

 

 

 

 

 

 

 

PART II

 

 

 

 

 

 

 

 

 

 

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 

 

10

 

Item 6.

Selected Financial Data

 

 

11

 

Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

 

 

11

 

Item 7A.

Quantitative and Qualitative Disclosures about Market Risk

 

 

16

 

Item 8.

Financial Statements and Supplementary Data

 

 

16

 

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 

 

16

 

Item 9A.

Controls and Procedures

 

 

17

 

Item 9B.

Other Information

 

 

17

 

 

 

 

 

 

 

PART III

 

 

 

 

 

 

 

 

 

 

Item 10.

Directors, Executive Officers and Corporate Governance

 

 

18

 

Item 11.

Executive Compensation

 

 

20

 

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 

 

21

 

Item 13.

Certain Relationships and Related Transactions, and Director Independence

 

 

22

 

Item 14.

Principal Accountant Fees and Services

 

 

22

 

 

 

 

 

 

 

PART IV

 

 

 

 

 

 

 

 

 

 

Item 15.

Exhibits, Financial Statement Schedules

 

 

23

 

 

2
 

  

PART I

 

ITEM 1. BUSINESS

  

Forward Looking Statements

 

This annual report contains forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions.

 

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this report. Except as required by applicable law, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

 

As used in this annual report, the terms "we", "us" and "our" mean Leafbuyer Technologies, Inc., unless otherwise indicated.

 

Transition Period

 

On March 23, 2017, the Company's Board of Directors approved a change in the Company's fiscal year end from December 31 to June 30, effective immediately. In connection with this change, we previously filed a Transition Report on Form 10-KT to report the results of the six-month transition period from January 1, 2017 to June 30, 2017. In this Annual Report, the periods presented are the year ended June 30, 2018, the six-month transition period from January 1, 2017 to June 30, 2017 (which we sometimes refer to as the "transition period ended June 30, 2017") and the year ended December 31, 2016 (which we sometimes refer to as "fiscal”). For comparison purposes, we have also included unaudited data for the year ended June 30, 2017.

 

Business Overview

 

Leafbuyer.com Platform

 

LB Media Group, LLC introduced Leafbuyer.com in 2013 as a consumer portal that would allow cannabis consumers to find the best deals and information from their favorite local dispensary. The platform also allowed cannabis businesses to attract new customers by posting more information and better cannabis deals. As the market has matured and our clients have become more sophisticated, their needs have expanded. The Company is now focused on developing multiple technology solutions to help our customers achieve their objectives. Resources are being put into broadening the platform in several key features. The fully-developed Leafbuyer platform will host many tools for our clients to attract, retain and grow customers. We plan to expand the platform into a full-service solution that can be monetized while also providing an industry best consumer experience.

 

The current market is extremely fragmented and there are few significant companies that have achieved scale in operations. We plan to grow organically and through strategic acquisitions to achieve our long-term goals.

 

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The Team

 

The Company has 25 full-time employees. In addition, the company currently has sales teams in Washington, California and Oregon. Leafbuyer also has relationships with approximately 23 independent contractors which it retains from time to time.

 

A majority of our employees are involved in sales and customer service. Other services, such as website content and graphics design are outsourced to independent contractors.

 

One of the Company’s top priorities in 2018 has been recruiting and retaining some of the top talent in the cannabis and technology industries. We anticipate a majority of our future hiring will be in markets outside of Colorado.

 

Growth State by State

 

Our primary customers have been legal cannabis dispensaries and companies who create cannabis-related products. As more states legalize cannabis, we hope the consumer and potential customer base will expand. We believe that the transformation in California from a purely medical legal state to a recreational state will create great opportunities for our company. We intend to duplicate the model that has worked for us in Colorado in each market as it develops.

 

The marginal cost for Leafbuyer to enter a market is minimal in comparison to growers or retail operations. In order for us to enter a new market, most of our costs include sales and marketing personnel and grassroots efforts to grow the consumer base in the new market. We believe that we can replicate our success in Colorado in the past four years of operations in other states that adopt legal cannabis use. However, there can be no assurance that we will be able to do so.

 

Other companies who deal with cannabis directly have significant legal and capital barriers impeding their growth into another state. However, since we are an ancillary company, most of the current regulations and strict cannabis laws do not pertain to our operations. Because of the overall growth in the market and low legal barriers, we believe that growth opportunities are very significant for the foreseeable future.

 

2018 and Beyond

 

On November 8, 2016, voters in California, Nevada, Maine and Massachusetts voted to regulate the production and sale of cannabis for recreational purposes while Florida, North Dakota, Arkansas and Montana voters authorized its medical use. According to ArcView Market Research, these initiatives will cause the regulated cannabis industry to expand from roughly $6 billion in 2016 to more than $23 billion once these initiatives take effect.

 

In October of 2018 Canada will be the second country in the world to legalize recreational marijuana. The company is exploring partnerships in Canada and the potential for possibly future financing opportunities.

 

Our business model is designed to benefit from this trend. When a new state passes a medical or recreational cannabis law, we can start marketing to consumers and businesses in that state with minimal marginal cost. Because Leafbuyer is not involved in the production or sale of cannabis, we do not have to build expensive grow operations and open brick and mortar stores. As more states pass laws to offer legal cannabis products, we begin marketing into the state and sign up dispensaries to be on the platform.

 

We plan to grow the company organically through the aggressive deployment of sales and marketing resources into legal cannabis states. We understand that to become a significant player in the industry in the future will require us to look for acquisitions for a significant portion of that growth. However, there can be no assurance that we will be able to locate and acquire such opportunities or that they will be on terms that are favorable to the Company.

 

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ITEM 1A. RISK FACTORS

 

Risks Related to the Business

 

We have minimal financial resources. Our independent registered auditors’ report includes an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern.

 

Leafbuyer Technologies, Inc. is an early stage company and has minimal financial resources. We had a cash balance of $375,938 as of June 30, 2018. We had an accumulated deficit of $3,938,210 at June 30, 2018. Our independent registered auditors included an explanatory paragraph in their opinion on our financial statements as of and for the year ended June 30, 2018 that states that Company losses from operations raise substantial doubt about its ability to continue as a going concern. We may seek additional financing. The financing sought may be in the form of equity or debt financing from various sources as yet unidentified. No assurances can be given that we will generate sufficient revenue or obtain the necessary financing to continue as a going concern.

 

Leafbuyer is and will continue to be completely dependent on the services of our president, chief executive officer and chief financial officer, the loss of whose services may cause our business operations to cease, and we will need to engage and retain qualified employees and consultants to further implement our strategy.

 

Leafbuyer’s operations and business strategy are completely dependent upon the knowledge and business connections of Messrs. Rossner and Breen our executive officers. They are under no contractual obligation to remain employed by us. If any should choose to leave us for any reason or become ill and unable to work for an extended period of time before we have hired additional personnel, our operations will likely fail. Even if we are able to find additional personnel, it is uncertain whether we could find someone who could develop our business along the lines described in this Form 10-K. We will likely fail without the services of our officers or an appropriate replacement(s).

 

Because we have only recently commenced business operations, we face a high risk of business failure.

 

The Company was formed in April 2013. All of our efforts to date have related to developing our business plan and beginning business activities. We face a high risk of business failure. The likelihood of the success of the Company must be considered in light of the expenses, complications and delays frequently encountered in connection with the establishment and expansion of new businesses and the competitive environment in which the Company will operate. There can be no assurance that future revenues will occur or be significant enough or that we will be able to sell our products and services at a profit, if at all. Future revenues and/or profits, if any, will depend on many various factors, including, but not limited to both initial and continued market acceptance of the Company’s website and the successful implementation of our planned growth strategy.

 

We may not be successful in hiring technical personnel because of the competitive market for qualified technical people.

 

The Company's future success depends largely on its ability to attract, hire, train and retain highly qualified technical personnel to provide the Company's services. Competition for such personnel is intense. There can be no assurance that the Company will be successful in attracting and retaining the technical personnel it requires to conduct and expand its operations successfully and to differentiate itself from its competition. The Company's results of operations and growth prospects could be materially adversely affected if the Company were unable to attract, hire, train and retain such qualified technical personnel.

 

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We will face competition from companies with significantly greater resources and name recognition.

 

The markets in which the Company will operate are characterized by intense competition from several types of solution and technical service providers. The Company expects to face further competition from new market entrants and possible alliances among competitors in the future as the convergence of information processing and telecommunications continues. Many of the Company's current and potential competitors have significantly greater financial, technical, marketing and other resources than the Company. As a result, they may be better able to respond or adapt to new or emerging technologies and changes in client requirements or to devote greater resources to the development, marketing and sales of their services than the Company. There can be no assurance that the Company will be able to compete successfully. In addition, the Company will be faced with numerous competitors, both strategic and financial, in attempting to obtain competitive products. Many actual and potential competitors we believe are part of much larger companies with substantially greater financial, marketing and other resources than the Company, and there can be no assurance that the Company will be able to compete effectively against any of its future competitors.

 

Since the possession and use of cannabis is illegal under the Federal Controlled Substances Act, we may be deemed to be aiding and abetting illegal activities through the services and data that we provide. If it is determined we are aiding and abetting illegal activities, we may be subject to enforcement actions by federal and/or state law enforcement authorities, which would materially and adversely affect our business.

  

The Federal Controlled Substances Act makes the possession, use, cultivation, and transfer of cannabis is illegal. Our business provides services and information to cannabis consumers from our customers that are engaged in the business of possession, use, cultivation, and/or sale of cannabis. As a result, should they elect to do so, law enforcement authorities could seek to bring an action or actions against the Company, including, but not limited, to a claim of aiding and abetting another’s criminal activities. The Federal aiding and abetting statute provides that anyone who “commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal.” 18 U.S.C. §2(a). As a result of such an action, we may be forced to cease operations and our investors could lose their entire investment. Such an action would have a material negative effect on our business and operations.

 

Upon a change in policy our clients may discontinue the use of our services, our potential source of customers may be reduced and our revenues may decline or cease entirely. Further, additional government disruption in the cannabis industry could cause potential customers and users to be reluctant to use and advertise our products, which would be detrimental to the Company.

 

We are subject to the regulation of state laws relating to cannabis.

 

As of the date of this filing, 30 states and the District of Columbia currently have laws broadly legalizing marijuana for medical or adult recreational use.  However, cannabis use is still in conflict with the federal Controlled Substances Act, which classifies marijuana as a Schedule I drug, claiming it has a high potential for abuse and has no acceptable medical use which makes cannabis use and possession illegal on a federal level.  There are a number of unknown factors which could slow or halt the legalization of cannabis in one or more states including public perception or federal regulation. These or other factors could slow or halt use of cannabis, which would negatively impact our business.

 

Cannabis is a controlled substance under Federal law.

 

Despite the development of a regulated cannabis industry under the laws of certain states, these state laws regulating medical and adult cannabis use are in conflict with the Federal Controlled Substances Act, which classifies cannabis as a Schedule I controlled substance and makes cannabis use and possession illegal on a national level. The United States Supreme Court has ruled that the Federal government has the right to regulate and criminalize cannabis, even for medical purposes, and thus Federal law criminalizing the use of cannabis preempts state laws that regulate its use. On January 4, 2018, Attorney General Jeff Sessions issued a memo to U.S. Attorneys providing guidance regarding the use of capital punishment in drug-related prosecution announcing a return to the rule of law and the rescission of previous guidance documents. This memo rescinds the previous policy of non-interference with marijuana-friendly state laws.  The heightened prosecution and dedication of resources to regulate marijuana possession, distribution and cultivation in certain states where marijuana use is regulated which may cause states to reconsider their regulation of marijuana which would have a detrimental effect on the marijuana industry.  Such change in state laws based upon the memo could cause a significant decrease in sales and financial damage to us and our stockholders.

 

Risks Related to Our Securities

 

Our officers and directors currently own the majority of our voting power, and through this ownership, control our Company and our corporate actions.

 

Our current Board of Directors and executive officers, hold approximately 58.6% of the voting power of the Company’s outstanding voting capital stock. These parties have a controlling influence in determining the outcome of any corporate transaction or other matters submitted to our stockholders for approval, including mergers, consolidations and the sale of all or substantially all of our assets, election of directors, and other significant corporate actions. As such, these shareholders have the power to prevent or cause a change in control; therefore, without the aforementioned consent we could be prevented from entering into transactions that could be beneficial to us. The interests of our executive officers may give rise to a conflict of interest with the Company and the Company’s shareholders.

 

There is a substantial lack of liquidity of our common stock and volatility risks.

 

Our common stock is quoted on the OTC Markets platform under the symbol “LBUY.” The liquidity of our common stock may be very limited and affected by our limited trading market. The OTC Markets quotation platform is an inter-dealer market much less regulated than the major exchanges, and is subject to abuses, volatilities and shorting. There is currently no broadly followed and established trading market for our common stock. An established trading market may never develop or be maintained. Active trading markets generally result in lower price volatility and more efficient execution of buy and sell orders. Absence of an active trading market reduces the liquidity of the shares traded.

 

The trading volume of our common stock may be limited and sporadic. This situation is attributable to a number of factors, including the fact that we are a small company which is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our shares until such time as we became more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot give you any assurance that a broader or more active public trading market for our common stock will develop or be sustained, or that current trading levels will be sustained. As a result of such trading activity, the quoted price for our common stock on the OTC Markets may not necessarily be a reliable indicator of our fair market value. In addition, if our shares of common stock cease to be quoted, holders would find it more difficult to dispose of or to obtain accurate quotation as to the market value of our common stock and as a result, the market value of our common stock likely would decline.

 

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The market price for our stock may be volatile and subject to fluctuations in response to factors, including the following:

 

the increased concentration of the ownership of our shares by a limited number of affiliated stockholders following the share exchange may limit interest in our securities;

 

 

variations in quarterly operating results from the expectations of securities analysts or investors;

 

 

revisions in securities analysts’ estimates or reductions in security analysts’ coverage;

 

 

announcements of new products or services by us or our competitors;

 

 

reductions in the market share of our products;

 

 

announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;

 

 

general technological, market or economic trends;

 

 

investor perception of our industry or prospects;

 

 

insider selling or buying;

 

 

investors entering into short sale contracts;

 

 

regulatory developments affecting our industry; and

 

 

additions or departures of key personnel.

 

Many of these factors are beyond our control and may decrease the market price of our common stock, regardless of our operating performance. We cannot make any predictions or projections as to what the prevailing market price for our common stock will be at any time, including as to whether our common stock will sustain current market prices, or as to what effect that the sale of shares or the availability of common stock for sale at any time will have on the prevailing market price.

 

Our common stock may never be listed on a major stock exchange.

 

We currently do not satisfy the initial listing standards and cannot ensure that we will be able to satisfy such listing standards or that our common stock will be accepted for listing on any such exchange. Should we fail to satisfy the initial listing standards of such exchanges, or our common stock is otherwise rejected for listing, the trading price of our common stock could suffer, the trading market for our common stock may be less liquid, and our common stock price may be subject to increased volatility.

 

A decline in the price of our common stock could affect our ability to raise working capital and adversely impact our ability to continue operations.

 

A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. A decline in the price of our common stock could be especially detrimental to our liquidity and our operations. Such reductions may force us to reallocate funds from other planned uses and may have a significant negative effect on our business plan and operations, including our ability to develop new services and continue our current operations. If our common stock price declines, we can offer no assurance that we will be able to raise additional capital or generate funds from operations sufficient to meet our obligations. If we are unable to raise sufficient capital in the future, we may not be able to have the resources to continue our normal operations.

 

Concentrated ownership of our common stock creates a risk of sudden changes in our common stock price.

 

The sale by any shareholder of a significant portion of their holdings could have a material adverse effect on the market price of our common stock.

 

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Sales of our currently issued and outstanding stock may become freely tradable pursuant to Rule 144 and may dilute the market for your shares and have a depressive effect on the price of the shares of our common stock.

 

A number of the outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”) (“Rule 144”). As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements of Rule 144 or other applicable exemptions from registration under the Securities Act and as required under applicable state securities laws. Rule 144 provides in essence that a non-affiliate who has held restricted securities for a period of at least six months may sell their shares of common stock. Under Rule 144, affiliates who have held restricted securities for a period of at least six months may, under certain conditions, sell every three months, in brokerage transactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock or the average weekly trading volume during the four calendar weeks prior to the sale (the four calendar week rule does not apply to companies quoted on the OTC Markets). A sale under Rule 144 or under any other exemption from the Securities Act, if available, or pursuant to subsequent registrations of our shares of common stock, may have a depressive effect upon the price of our shares of common stock in any active market that may develop.

 

If we issue additional shares or derivative securities in the future, it will result in the dilution of our existing stockholders.

 

Our Articles of Incorporation authorize the issuance of up to 150,000,000 shares of common stock, $0.001 par value per share, and 10,000,000 shares are designated as “blank check” preferred stock, par value $0.001 per share (the “Preferred Stock”). Our board of directors may choose to issue some or all of such shares, or derivative securities to purchase some or all of such shares, to provide additional financing in the future.

 

We do not plan to declare or pay any dividends to our stockholders in the near future.

 

We have not declared any dividends in the past, and we do not intend to distribute dividends in the near future. The declaration, payment and amount of any future dividends will be made at the discretion of the board of directors and will depend upon, among other things, the results of operations, cash flows and financial condition, operating and capital requirements, and other factors as the board of directors considers relevant. There is no assurance that future dividends will be paid, and if dividends are paid, there is no assurance with respect to the amount of any such dividend.

 

The requirements of being a public company may strain our resources and distract management.

 

We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”). These requirements are extensive. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting.

 

We may incur significant costs associated with our public company reporting requirements and costs associated with applicable corporate governance requirements. We expect all of these applicable rules and regulations to significantly increase our legal and financial compliance costs and to make some activities more time consuming and costly. This may divert management’s attention from other business concerns, which could have a material adverse effect on our business, financial condition and results of operations. We also expect that these applicable rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as executive officers. We are currently evaluating and monitoring developments with respect to these rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.

 

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Persons associated with securities offerings, including consultants, may be deemed to be broker dealers.

 

In the event that any of our securities are offered without engaging a registered broker-dealer, we may face claims for rescission and other remedies. If any claims or actions were to be brought against us relating to our lack of compliance with the broker-dealer requirements, we could be subject to penalties, required to pay fines, make damages payments or settlement payments, or repurchase such securities. In addition, any claims or actions could force us to expend significant financial resources to defend our company, could divert the attention of our management from our core business and could harm our reputation.

 

Future changes in financial accounting standards or practices may cause adverse unexpected financial reporting fluctuations and affect reported results of operations.

 

A change in accounting standards or practices can have a significant effect on our reported results and may even affect our reporting of transactions completed before the change is effective. New accounting pronouncements and varying interpretations of accounting pronouncements have occurred and may occur in the future. Changes to existing rules or the questioning of current practices may adversely affect our reported financial results or the way we conduct business.

 

“Penny Stock” rules may make buying or selling our common stock difficult.

 

Trading in our common stock is subject to the “penny stock” rules. The SEC has adopted regulations that generally define a penny stock to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. These rules require that any broker-dealer that recommends our common stock to persons other than prior customers and accredited investors, must, prior to the sale, make a special written suitability determination for the purchaser and receive the purchaser’s written agreement to execute the transaction. Unless an exception is available, the regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated with trading in the penny stock market. In addition, broker-dealers must disclose commissions payable to both the broker-dealer and the registered representative and current quotations for the securities they offer. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our common stock, which could severely limit the market price and liquidity of our common stock.

 

ITEM 1B. UNRESOLVED STAFF COMMENTS

 

None.

 

ITEM 2. PROPERTIES

 

Our executive office is located at 6888 S. Clinton Street, Suite 300, Greenwood Village, CO 80112.

 

ITEM 3. LEGAL PROCEEDINGS

 

We are not aware of any legal proceedings to which we are a party or of which our property is the subject. None of our directors, officers, affiliates, any owner of record or beneficially of more than 5% of our voting securities, or any associate of any such director, officer, affiliate or security holder are (i) a party adverse to us in any legal proceedings, or (ii) have a material interest adverse to us in any legal proceedings. We are not aware of any other legal proceedings that have been threatened against us.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

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Table of Contents

 

PART II

 

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 

Market Information

 

Our common stock is quoted on the OTC Markets under the trading symbol “LBUY”. Trading in stocks quoted on the OTC Markets is often thin and is characterized by wide fluctuations in trading prices due to many factors that may have little to do with a company's operations or business prospects. We cannot assure you that there will be a market for our common stock in the future.

 

The following quotations reflect the high and low bids for our common stock based on inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.

 

 

 

Year ended June 30, 2018

 

 

 

High

 

 

Low

 

Quarter ended June 30, 2018

 

$ 1.85

 

 

$ 1.11

 

Quarter ended March 31, 2018

 

$ 3.15

 

 

$ 1.16

 

Quarter ended December 31, 2017

 

$ 2.40

 

 

$ 0.86

 

Quarter ended September 30, 2017

 

$ 3.82

 

 

$ 1.03

 

 

 

 

Year ended June 30, 2017

 

 

 

High

 

 

Low

 

Quarter ended June 30, 2017

 

$ 1.62

 

 

$ 0.75

 

Quarter ended March 31, 2017

 

 

N/A

 

 

 

N/A

 

Quarter ended December 31, 2016

 

 

N/A

 

 

 

N/A

 

Quarter ended September 30, 2016

 

 

N/A

 

 

 

N/A

 

 

Holders

 

As of June 30, 2018, there were approximately 12,000 holders of record of our common stock.

 

Dividends

 

We have not paid cash dividends on shares of our common stock and we do not expect to declare or pay dividends on shares of our common stock for the foreseeable future. We intend to retain earnings, if any, to finance the development and expansion of our business. Our future dividend policy will be subject to the discretion of our Board of Directors and will depend upon our future earnings, if any, our financial condition, our capital requirements, general business conditions and other factors.

 

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Equity Compensation Plans

 

The equity incentive plan of the Company was established in February of 2017. The Board of Directors of the Company may from time to time, in its discretion grant to directors, officers, consultants and employees of the Company, non-transferable options to purchase common shares, provided that the number of options issued do not exceed 5,000,000. The options are exercisable for a period of up to 10 years from the date of the grant.

 

Recent Sales of Unregistered Securities

 

During the year ended June 30, 2018, the Company accepted subscriptions for the issuance of 1,589,565 post-split common shares for total subscriptions of $1,020,000 in cash.

 

During the year ended June 30, 2018, the Company issued 54,000 shares of Common Stock for the exercise of options and $13,500 cash.

  

During the year ended June 30, 2018, the Company also received notice from a Preferred Stock Series B stockholder to convert 180,000 shares of preferred stock into 2,880,000 shares of Common Stock.

 

During the year ended June 30, 2018, the Company issued 137,000 shares of common stock to vendors for services. These shares were valued at fair market value of $280,850.

 

During the year ended June 30, 2017, the Company entered into subscription agreements for the issuance of [476,092 pre-split shares of common stock at purchase prices of $0.12 and $0.15 per share for a total amount of $600,000 in cash]. The Company also accepted a subscription in the amount of $250,000 for 27,027 shares of the Registrant’s Series B Convertible Preferred Stock, par value $0.001 per share (the “Series B Shares”). The Series B are Shares convertible six months after issuance into shares of Common Stock at the post-split rate of sixteen (16) votes per share.

  

All of the securities set forth above were issued by the Company pursuant to Section 4(2) of the Securities Act of 1933, as amended, or the provisions of Rule 504 of Regulation D promulgated under the Securities Act. All such shares issued contained a restrictive legend and the holders confirmed that they were acquiring the shares for investment and without intent to distribute the shares. All of the purchasers were friends or business associates of the Company’s management and all were experienced in making speculative investments, understood the risks associated with investments, and could afford a loss of the entire investment. The Company did not utilize an underwriter or a placement agent for any of these offerings of its securities.

 

In connection with the foregoing, the Company relied upon the exemption from registration provided by Section 4(a)(2) under the Securities Act of 1933, as amended, for transactions not involving a public offering.

 

Item 6. Selected Financial Data

 

We are a smaller reporting company as defined by 17 C.F.R. 229 (10)(f)(i) and are not required to provide information under this item.

 

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

 

The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this annual report. The discussions of results, causes and trends should not be construed to imply any conclusion that these results or trends will necessarily continue into the future.

 

The Company was formed as AP Event, Inc., a Nevada corporation on October 16, 2014. The Registrant was originally engaged in the business of a travel agency that provided individual and group leisure tours to music festivals and concerts combined with local excursions.

 

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On March 21, 2017, August Petrov, the principal shareholder, President, Chief Executive Officer and Chief Financial Officer of AP Event, Inc. (the “Registrant” or the “Company”) consummated the sale of 5,000,000 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) owned by Mr. Petrov to LB Media Group, LLC a Colorado limited liability Company (“LB Media”). The sale of the Shares, which represented approximately eighty percent (80%) of the outstanding common stock of the Company, represented a change in control of the Company. In connection with the sale, Mr. Petrov resigned as officer and director of the Company and forgave and discharged any indebtedness of any kind owed to him by the Company.

 

On March 23, 2017, the Registrant consummated an Agreement and Plan of Merger (the “Merger Agreement”) with LB Media, the principal stockholder of the Registrant, and LB Acquisition Corp., a Colorado corporation and wholly-owned subsidiary of the Registrant (“Acquisition”) whereby Acquisition was merged with and into LB Media (the “Merger”) in consideration for: cash in the amount of Six Hundred Thousand Dollars ($600,000); 2,351,355 newly-issued, pre-split shares of the Company’s Common Stock (the “Merger Shares”); and 324,327 pre-split shares of the Company’s Series A Convertible Preferred Stock, par value $0.001 per share (the “Series A Shares,” and collectively with the Merger Shares, the “Merger Consideration”). The Series A Shares initially convert at the rate of one vote per share (the “Series A Conversion Rate”) and provides that the Series A Conversion Rate shall be adjusted based upon the number of shares outstanding such that the holders of the Series A Shares would not hold less than fifty-five percent (55%) of the number of outstanding shares of Common Stock on a fully-diluted basis. Pursuant to the terms of the Merger Agreement, LB Media agreed to retire 5,000,000 shares of Common Stock of the Company held immediately prior to the Merger.

 

Simultaneously with the Merger, the Registrant accepted subscriptions in a private placement offering (the “Offering”) of its Common Stock at a purchase prices of $0.12 and $0.15 per share, offered pursuant to Regulation D of the Securities Act of 1933, as amended (the “Securities Act”) for the aggregate offering amount of $600,000. The Company also accepted a subscription from a single investor in the amount of Two Hundred Fifty Thousand Dollars ($250,000) for 27,027 shares of the Registrant’s Series B Convertible Preferred Stock, par value $0.001 per share (the “Series B Shares”) also in accordance with Rule 506 of Regulation D of the Securities Act. The Series B Shares are convertible, following six months after issuance, into shares of Common Stock at the post-split rate of sixteen (16) votes per share. The Series B Shares cannot be converted by the investor if such conversion would result in the investor owning more than 4.99% of the outstanding common stock.

 

As a result of the Merger, LB Media became a wholly-owned subsidiary of the Registrant and following the consummation of the Merger and giving effect to the securities sold in the Offering, the members of LB Media will beneficially own approximately fifty-five percent (55%) of the issued and outstanding Common Stock of the Registrant. The parties have taken the actions necessary to provide that the Merger is treated as a “tax free exchange” under Section 368 of the Internal Revenue Code of 1986, as amended.

 

On March 24, 2017, the Registrant amended its Articles of Incorporation (the “Amendment”) to (i) change its name to LeafBuyer Technologies, Inc., (ii) to increase the number of its authorized shares of capital stock from 75,000,000 to 160,000,000 shares of which 150,000,000 shares were designated common stock, par value $0.001 per share (the “Common Stock”) and 10,000,000 shares were designated “blank check” preferred stock, par value $0.001 per share (the “Preferred Stock”) and (iii) to effect a forward split such that 9.25 shares of Common Stock were issued for every 1 share of Common Stock issued and outstanding immediately prior to the Amendment (the “Split”).

 

Business Overview

 

The Company’s wholly-owned subsidiary, LB Media Group, LLC has evolved and grown from a listing technology company focused on helping consumers find local cannabis-related retail establishments, into a next generation mobile location data and offer-driven deals site. The Company’s website, Leafbuyer.com, is the most comprehensive online source for cannabis deals and specials, Leafbuyer.com connects consumers with dispensaries. Leafbuyer works alongside businesses to showcase their unique products and build a network of loyal patrons. Leafbuyer’s national network of cannabis deals and information reaches millions of consumers monthly. Leafbuyer is the official cannabis deals platform of thecannabist.co (owned by the Denver Post) and westword.com.

 

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The site’s sophisticated vendor dashboard pairs vendor data with consumer needs to find exactly what deals, products or menu items the consumer is looking for. Vendors engage consumers through a robust 24/7 real-time dashboard that allows updates on menus, specials, jobs, and tracks return on investment reporting.

 

We operate in a rapidly evolving and highly regulated industry that, as has been estimated by some, will exceed $30 billion in revenue by the year 2020. We have been and will continue to be aggressive in pursuing opportunities that we believe will benefit us in the long-term.

 

Our consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.

 

Results of Operations for the years ended June 30, 2018 versus June 30, 2017 (unaudited)

 

The following table summarizes the results of operations for the years ended June 30, 2018 and 2017 (unaudited):

 

 

 

Year Ended

 

 

Year Ended

 

 

 

June 30, 2018

 

 

June 30, 2017

 

 

 

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

Sales revenue

 

$ 1,128,245

 

 

$ 949,921

 

Cost of sales

 

 

-

 

 

 

-

 

Gross profit

 

 

1,128,245

 

 

 

949,921

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Selling expenses

 

 

206,831

 

 

 

450

 

General and administrative

 

 

3,870,548

 

 

 

1,217,928

 

Total operating expenses

 

 

4,077,379

 

 

 

1,218,378

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(2,949,134 )

 

 

(268,457 )

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

Interest expense

 

 

(35,541 )

 

 

(220 )

Other income

 

 

5,000

 

 

 

1,438

 

Other income (expense), net

 

 

(30,541 )

 

 

1,218

 

 

 

 

 

 

 

 

 

 

Net loss

 

$ (2,979,675 )

 

$ (267,239 )

 

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Revenues

 

During the year ended June 30, 2018, we generated $1,128,245 of revenues, compared to revenues of $949,921 during the audited 12 month ended June 30, 2017. The increase of $178,324 or 19% was primarily due to recent expansion of our platform that enables us to sell more to a single customer, increasing our per customer revenue and the initial expansion of our services into additional states. Cash received from customers increased from $865,631 to $1,229,242 or a 42% increase for the period. However, the growth in GAAP basis revenue was lower due solely to the timing of recognition of deferred revenue.  Our market penetration is still below 25% in Colorado and less than 1% in other states. Management expects to have continued high quarter over quarter revenue growth as we expand our platform and our geographical service area.

 

The overall focus of the company is to continue to grow topline revenue while expanding the geographic footprint of operations. We will continue to broaden the Leafbuyer technology platform to increase the opportunity for customer value creation and upsell of our product line. Anticipated growth will come from both organic sources and acquisitions. The company is constantly looking for acquisitions to complement the current platform and expand geographic reach.

 

Expenses

 

During the year ended June 30, 2018, we incurred total expenses of $4,077,379, including $3,870,548 in general and administrative expenses, and $206,831 in selling expenses.  During the year ended June 30, 2017, we incurred total expenses of $1,218,378, most of which were general and administrative expenses. The increase of $2,859,001 or 235% was primarily due to the expansion of our sales and account management team, our technology expenses of approximately $460,000 to expand our current platform, acquisition due diligence, and our overall marketing of our services. $1,091,812 was spent on stock-based compensation for employees and contractors. Management does not expect the general and administrative expenses to continue to increase as management focuses on getting current operations to positive cash flow.

 

Net Loss

 

During the year ended June 30, 2018 we incurred a net loss of $2,979,675, compared to a net loss of $267,239 for the year ended June 30, 2017.

 

Liquidity and Capital Resources

 

The following table summarizes the cash flows for the years ended June 30, 2018 and 2017 (unaudited):

 

 

 

For the year
ended
June 30,
2018

 

 

For the year
ended
June 30,
2017

 

 

 

 

 

 

(unaudited)

 

Net cash provided by (used in):

 

 

 

 

 

 

Operating activities

 

(1,627,926 )

 

(330,115 )

Investing activities

 

-

 

 

(1,500 )

Financing activities

 

1,839,184

 

 

443,935

 

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

211,258

 

 

112,320

 

 

As of June 30, 2018, we had $375,938 in cash and cash equivalents, $172,566 in prepaid expenses and deposits, $873 in fixed assets, $66,087 in accrued liabilities, $156,530 in deferred revenue and had a working capital deficit of $758,771. We are dependent on funds raised through equity financing. Our cumulative net loss of $2,979,675 was funded by equity financing. Since our inception, we have raised gross proceeds of $0 in cash from the sale of our securities. We anticipate that we will incur substantial losses for the foreseeable future.

 

During the year ended June 30, 2018, we used $1,627,926 in operating activities. During the year ended June 30, 2017, we used $330,115 from operating activities. Our increase in cash spending on operating activities during the year ended June 30, 2018 was primarily due to the large incremental costs of becoming a public entity, combined with additional costs incurred as our business grew. Specifically, payroll costs grew rapidly during the year ended June 30, 2018.

 

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During the year ended June 30, 2018, we did not engage in any investing activities. During the year ended June 30, 2017, we invested $1,500 in office equipment.

 

Net cash flow provided by financing activities for the years ended June 30, 2018 and 2017 was approximately $1,839,184 and $443,935, respectively. During the year ended June 30, 2017, we made distributions of $611,065 to officers of LB Media in connection with the Merger Agreement and we received $1,055,000 in cash from financing activities from the issuance of our common and preferred stock.

 

Our increase in cash and cash equivalents for the year ended June 30, 2018 was mainly due to the increase in cash from financing activities.

 

During the year ended June 30, 2018, our monthly cash requirements to fund our operating activities, was approximately $85,000, compared to approximately $100,000 during the year ended June 30, 2017. In the absence of the continued sale of our common and preferred stock or advances from related parties, our cash of $375,938 as of June 30, 2018 is sufficient to cover our current monthly burn rate for three months and to pay our accrued liabilities balance of $66,087.

 

The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months from the date of the issuance of these consolidated financial statements with existing cash on hand and/or the private placement of common stock. There is, however, no assurance that the Company will be able to raise any additional capital through any type of offering on terms acceptable to the Company, as existing cash on hand will be insufficient to finance operations over the next twelve months.

 

Future Financings

 

Off-Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements.

 

Critical Accounting Policies

 

Our audited financial statements are affected by the accounting policies used and the estimates and assumptions made by management during their preparation. A complete summary of these policies is included in Note 2 of the notes to our audited financial statements. We have identified below the accounting policies that are of particular importance in the presentation of our financial position, results of operations and cash flows, and which require the application of significant judgment by our management.

 

Recent Accounting Guidance Adopted

 

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

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Inflation

 

The amounts presented in the financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.

 

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

 

We are a smaller reporting company as defined by 17 C.F.R. 229 (10)(f)(i) and are not required to provide information under this item.

 

Item 8. Financial Statements and Supplementary Data

 

The information required by Item 8 appears after the signature page of this report.

 

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

  

(a) Dismissal of Independent Registered Public Accounting Firm

 

On May 11, 2017, Michael Gillespie & Associates, PLLC (“MGA”) was dismissed as the independent registered public accounting firm of Leafbuyer Technologies, Inc. (the “Company”). The Company’s Board of Directors approved the dismissal of MGA.

 

MGA’s reports on the Company’s financial statements for the years ended June 30, 2016 and 2015, respectively, did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles other than going concern.

 

During the years ended June 30, 2016 and 2015, and through May 11, 2017, there were no disagreements with MGA on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of MGA, would have caused it to make reference thereto in connection with its reports on the financial statements for such years related to AP Event Inc. During the years ended June 30, 2016 and 2015, and through May 11, 2017, there were no matters that were either the subject of a disagreement as defined in Item 304(a)(1)(iv) of Regulation S-K or a reportable event as described in Item 304(a)(1)(v) of Regulation S-K.

 

The Company provided MGA with a copy of the foregoing disclosures and requested MGA to furnish the Company with a letter addressed to the Securities and Exchange Commission stating whether or not MGA agrees with the disclosures. A copy of MGA’s letter is filed as Exhibit 16.1 to the Current Report on Form 8-K, as filed with the SEC on May 12, 2017.

 

(b) New Independent Registered Public Accounting Firm

 

On May 12, 2017, the Company’s Board of Directors, acting in the capacity of an audit committee, engaged BF Borgers CPA PC (“Borgers”) as the Company’s new independent registered public accounting firm to act as the principal accountant to audit the Company’s financial statements. During the Company’s fiscal years ended December 31, 2016 and 2015, and through May 11, 2017, neither the Company, nor anyone acting on its behalf, consulted with Borgers regarding the application of accounting principles to a specific completed or proposed transaction or the type of audit opinion that might be rendered on the Company’s financial statements, and no written report or oral advice was provided that Borgers concluded was an important factor considered by the Company in reaching a decision as to any such accounting, auditing or financial reporting issue.

 

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Item 9A. Controls and Procedures

  

We maintain "disclosure controls and procedures", as that term is defined in Rule 13a-15(e), promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended.  Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company's reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

 

As required by paragraph (b) of Rules 13a-15 under the Securities Exchange Act of 1934, our management, with the participation of our principal executive officer and our principal financial officer, evaluated our company's disclosure controls and procedures as of the end of the period covered by this quarterly report on Form 10-Q. Based on this evaluation, our management concluded that as of the end of the period covered by this quarterly report on Form 10-Q, our disclosure controls and procedures were not effective.

 

Management Report on Internal Control Over Financial Reporting

 

Management is responsible for establishing and maintaining adequate internal control over the Company's financial reporting.  In order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002.  Our management, with the participation of our principal executive officer and principal financial officer have conducted an assessment, including testing, using the criteria in Internal Control – Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") (2013).  Our system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  This assessment included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation.  Based on this evaluation, management concluded that our internal control over financial reporting was not effective as of June 30, 2018.  The ineffectiveness of the Company's internal control over financial reporting was due to the following material weaknesses, which are indicative of many small companies with small staff: 

 

(i) inadequate segregation of duties consistent with control objectives; and

 

(ii) lack of multiple levels of supervision and review.

 

We believe that the weaknesses identified above have not had any material effect on our financial results. We are currently reviewing our disclosure controls and procedures related to these material weaknesses and expect to implement changes in the current fiscal year, including identifying specific areas within our governance, accounting and financial reporting processes to add adequate resources to potentially mitigate these material weaknesses.

 

Our management will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

 

Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements.  Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.  All internal control systems, no matter how well designed, have inherent limitations.  Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

 

Management's Remediation Plan

 

The weaknesses and their related risks are not uncommon in a company of our size because of the limitations in the size and number of staff. Due to our size and nature, segregation of all conflicting duties has not always been possible and may not be economically feasible.

 

However, we plan to take steps to enhance and improve the design of our internal control over financial reporting.  During the period covered by this annual report on Form 10-K, we have not been able to remediate the material weaknesses identified above.  To remediate such weaknesses, we plan to implement the following changes in the current fiscal year as resources allow:

 

(i) appoint additional qualified personnel to address inadequate segregation of duties and implement modifications to our financial controls to address such inadequacies; and

 

We will attempt to implement the remediation efforts set out herein by the end of the 2019 fiscal year.  Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected.  These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.

 

Management believes that despite our material weaknesses set forth above, our financial statements for the year ended June 30, 2018 and transitional period ended June 30, 2017 are fairly stated, in all material respects, in accordance with U.S. GAAP. 

 

Item 9B. Other Information

  

During September, the Company entered several promissory notes with various investor of the Company with a face value of $1,320,000 in exchange for $1,200,000 cash payment (“the Notes”), the discount of the Notes will be amortized over the life of the Note and have an interest rate of 10%. The Notes have a twelve-month term with no payment required for the initial six months; after six months, the Company will repay the investors interest and principle in six equal installments. The principle and interest of the note is convertible into the Company’s common stock at a purchase price of $0.70 per common share after the six months. If the Company defaults on the Notes, the interest is increased to 12% and at the investors’ option, the principle and interest can be converted into the Company common stock at a 20% discount to the then current market. In addition, the Company issued five-year warrants to purchase up to 600,000 of the Company common shares at a price of $0.75 per common share.

 

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PART III

 

Item 10. Directors, Executive Officers and Corporate Governance

  

The following table sets forth certain information of our directors and officers as of the date of this report.

 

Name

 

Age

 

Position

 

Director/Officer Since

 

Kurt Rossner

 

49

 

Chairman, Chief Executive Officer and President

 

March 23, 2017

 

Mark Breen

 

46

 

Chief Financial Officer and Director

 

March 23, 2017

 

Michael Goerner

 

49

 

Treasurer, Chief Technology Officer and Director

 

March 23, 2017

 

 

Kurt Rossner 49, Co-Founder, Chairman and Chief Executive Officer

 

Prior to founding LB Media Group in May 2013, Mr. Rossner started his career with MCI Telecommunications Corporation as a Business Sales Manager in 1993. Mr. Rossner founded several successful technology companies and was a pioneer in the Internet web hosting industry. He founded one of the largest platforms in the county, selling it to Micron Electronics (NASDAQ: MUEI) in 2000. Mr. Rossner leads the company’s operations and overall strategic direction. He holds a Bachelor of Science Degree in Economics from The Florida State University.

 

Mark Breen, 46, Co-Founder, Director and Chief Financial Officer

 

Prior to Co-founding LB Media Group in May 2013, Mr. Breen served in various Sales Executive positions at CBS Corporation from Oct 2010 to October 2013. Mr. Breen heads up the Company’s sales and market expansion strategy. He has worked in various sales, operation and management positions within Tribune Broadcasting, Gannett and CBS in both Chicago and Denver over his 20-year career. Mr. Breen earned a Bachelor of Arts Degree in Broadcasting from Western Illinois University.

 

Michael Goerner, 49, Co-Founder, Director and Chief Technology Officer

 

Prior to founding LB Media Group in May 2013, Mr. Goerner served as the C.T.O of WHIP Systems from March 2001 to May 2013. Mr. Goerner is responsible for the technology direction of the company and has significant experience with various Internet and IT companies. Prior thereto and from June 1998 through December 2000 Mr. Goerner served as the Founder and C.T.O of Indigio Group. In the early 1990s he was involved in the early-stage development of successful Internet properties in the areas of online mapping, real estate, and news media. Mr. Goerner has a Bachelor of Science Degree in Computer Science from Millersville University of Pennsylvania.

 

Family Relationships

 

There are no family relationships among our directors, executive officers or persons nominated or chosen by us to become directors or executive officers.

 

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Legal Proceedings

 

None of our directors, executive officers, promoters or control persons has been involved in any of the following events during the past 10 years:

 

·

any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

 

·

any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

 

·

being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities;

 

·

being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated any federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated;

 

·

any judicial or administrative proceedings resulting from involvement in mail or wire fraud or fraud in connection with any business activity;

 

·

any judicial or administrative proceedings based on violations of federal or state securities, commodities, banking or insurance laws and regulations, or any settlement to such actions; or

 

·

any disciplinary sanctions or orders imposed by a stock, commodities or derivatives exchange or other self-regulatory organization.

 

Section 16(a) Beneficial Ownership Compliance Reporting

 

Section 16(a) of the Exchange Act requires our directors, executive officers and persons who own more than 10% of our common stock to file reports regarding ownership of, and transactions in, our securities with the SEC and to provide us with copies of those filings. Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that during the fiscal year ended June 30, 2018 our directors, executive officers and 10% stockholders complied with all applicable filing requirements.

 

Code of Ethics

 

We have not yet adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer, controller, or persons performing similar functions because we have not yet finalized the content of such a code.

 

Audit Committee

 

We do not have an audit committee. Our entire Board of Directors carries out the functions of the audit committee.

 

Our Board has determined that we do not have an audit committee financial expert on our Board carrying out the duties of the audit committee. The Board has determined that the cost of hiring a financial expert to act as a director and to be a member of the audit committee or otherwise perform audit committee functions outweighs the benefits of having an audit committee financial expert on the Board.

 

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Nomination Procedures for Directors

 

We do not have a nominating committee. Our Board of Directors selects individuals to stand for election as members of the Board and does not have a policy with regards to the consideration of any director candidates recommended by our security holders. Our Board has determined that it is in the best position to evaluate our company’s requirements as well as the qualifications of each candidate when it considers a nominee for a position on our Board. If security holders wish to recommend candidates directly to our Board, they may do so by communicating directly with our President at the address specified on the cover of this annual report. There has not been any change to the procedures that our shareholder may recommend nominees to our Board of Directors.

 

Item 11. Executive Compensation

 

The following table sets forth the compensation paid or accrued by us to our President, Chief Executive Officer, Chief Financial Officer and each of our other officers for the fiscal year ended June 30, 2018.

 

Name and

principal position

 

Year

 

Salary

 

 

Bonus

 

 

Stock

awards

 

 

Option

awards

 

 

Nonequity

incentive plan

compensation

 

 

Nonqualified

deferred

compensation

earnings

 

 

All other

compensation

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kurt Rossner

 

2018

 

83,615

 

 

0

 

 

-

 

 

1,277,000

 

 

-

 

 

-

 

 

-

 

 

1,360,615

 

Chief Executive Officer and Director

 

2017

 

26,334

 

 

200,000

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

226,334

 

 

 

2016

 

13,000

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

13,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mark Breen

 

2018

 

83,615

 

 

$

0

 

 

-

 

 

1,277,000

 

 

-

 

 

$

-

 

 

-

 

 

1,360,615

 

Chief Financial Officer, Director

 

2017

 

26,334

 

 

200,000

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

226,334

 

 

 

2016

 

13,000

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

13,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Micheal Goener,

 

2018

 

83,615

 

 

$

0

 

 

-

 

 

$

1,277,000

 

 

-

 

 

-

 

 

-

 

 

1,360,615

 

Treasurer, Director

 

2017

 

26,334

 

 

200,000

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

226,334

 

 

 

2016

 

13,000

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

$

-

 

 

13,000

 

 

Pension, Retirement or Similar Benefit Plans

 

There are no arrangements or plans in which we provide pension, retirement or similar benefits to our directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the Board of Directors or a committee thereof.

 

Compensation Committee

 

We currently do not have a compensation committee of the Board of Directors or a committee performing similar functions. It is the view of the Board that it is appropriate for us not to have such a committee because of our size and because the Board as a whole participates in the consideration of executive compensation. None of our executive officers served as a director or member of the compensation committee of any entity that has one or more executive officers serving on our Board.

 

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Table of Contents

 

Board Leadership Structure and Role in Risk Oversight

 

Although we have not adopted a formal policy on whether the Chairman and Chief Executive Officer positions should be separate or combined, we have traditionally determined that it is in the best interests of the Company and its shareholders to combine these roles. Kurt Rossner serves as our Chairman and Chief Executive Officer. We believe it is in the best interest of the Company to have the Chairman and Chief Executive Officer roles combined due to our small size and limited resources.

 

Our Board of Directors is primarily responsible for overseeing our risk management processes. The Board of Directors receives and reviews periodic reports from management, auditors, legal counsel, and others, as considered appropriate regarding our company’s assessment of risks. The Board of Directors focuses on the most significant risks facing our company and our company’s general risk management strategy, and also ensures that risks undertaken by our company are consistent with the Board’s appetite for risk. While the Board oversees our company, our company’s management is responsible for day-to-day risk management processes. We believe this division of responsibilities is the most effective approach for addressing the risks facing our company and that our Board leadership structure supports this approach.

 

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 

The following table sets forth the ownership, as of June 30, 2018 of our common stock by each of our directors, by all of our executive officers and directors as a group and by each person known to us who is the beneficial owner of more than 5% of any class of our securities. As of June 30, 2018, there were 42,661,228 shares of our common stock issued and outstanding. All persons named have sole or shared voting and investment control with respect to the shares, except as otherwise noted. The number of shares described below includes shares which the beneficial owner described has the right to acquire within 60 days of the date of this annual report.

 

Name and Address of Beneficial Owner (1)

 

Common Stock

Beneficially Owned

 

 

Percentage of

Common Stock (2)

 

Directors and Officers:

 

 

 

 

 

 

Kurt Rossner(3)(4)

 

 

8,450,020

 

 

 

19.7 %

Mark Breen(3)(4)

 

 

8,450,020

 

 

 

19.7 %

Michael Goerner(3)(4)

 

 

8,450,020

 

 

 

19.7 %

All officers and directors as a group (three persons)

 

 

25,350,060

 

 

 

58.6 %

_____________ 

(1)

Except as otherwise indicated, the address of each beneficial owner is the Company’s address.

 

(2)

Applicable percentage ownership is based on 42,661,228 shares of common stock outstanding as of June 30, 2018 together with securities exercisable or convertible into shares of common stock within 60 days of June 30, 2018, for each stockholder. Beneficial ownership is determined in accordance with the rules of the Commission and generally includes voting or investment power with respect to securities. Shares of common stock that are currently exercisable or exercisable within 60 days of June 30, 2018, are deemed to be beneficially owned by the person holding such securities for the purpose of computing the percentage of ownership of such person but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.

 

(3)

Includes 108,109 of common stock underlying 108,109 shares of Series A Preferred Stock.

(4)

Includes 1,000,000 shares of the Issuer’s Series A Preferred Stock, which converts into the Issuer’s Common Stock on a one-for-one basis and 200,000 option shares readily exercisable, granted pursuant to Issuer’s 2017 Equity Incentive Plan.

 

21
 
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Item 13. Certain Relationships and Related Transactions, and Director Independence

 

We have not entered into any transactions with our officers, directors, persons nominated for these positions, beneficial owners of 5% or more of our common stock, or family members of those persons wherein the amount involved in the transaction or a series of similar transactions exceeded the lesser of $120,000 or 1% of the average of our total assets for the last two fiscal years.

 

Related Person Transaction Policy

 

Our Board of Directors is responsible to approve all related party transactions. We have not adopted written policies and procedures specifically for related person transactions.

 

Director Independence

 

We currently use NASDAQ’s general definition for determining director independence, which states that “independent director” means a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship, that, in the opinion of the company’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of the director. None of our current directors meet this definition of independence.

 

Item 14. Principal Accountant Fees and Services

 

Audit and Non-Audit Fees

 

The following table sets forth the fees for professional audit services and the fees billed for other services rendered by our auditors, in connection with the audit of our financial statements for the years ended June 30, 2018 and 2017, and any other fees billed for services rendered by our auditors during these periods.

 

 

 

Year Ended
June 30,

2018

($)

 

 

Year Ended
June 30,
2017

($)

 

Audit fees

 

$ 29,160

 

 

$ 39,400

 

Audit-related fees

 

 

-0-

 

 

 

-0-

 

Tax fees

 

 

-0-

 

 

 

-0-

 

All other fees

 

 

-0-

 

 

 

-0-

 

Total

 

$ 29,160

 

 

$ 39,400

 

 

Since our inception, our Board of Directors, performing the duties of the audit committee, has reviewed all audit and non-audit related fees at least annually. The Board, acting as the audit committee, pre-approved all audit related services for the year ended June 30, 2018.

 

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Table of Contents

  

PART IV

 

Item 15. Exhibits, Financial Statement Schedules

 

Exhibit

Number

 

Exhibit Description

 

 

3.1

 

Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on March 29, 2017).

 

 

 

3.2

 

By-laws of the Company (incorporated herein by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1 filed on September 3, 2015).

 

 

 

4.1

 

Specimen Common Stock Certificate (incorporated herein by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-8 filed on February 28, 2018).

 

 

 

4.2

 

Form of Subscription Agreement (incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 29, 2017)

 

 

 

4.3

 

Certification of Designation of Rights and Preferences to Series A Convertible Preferred Stock (incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on March 29, 2017)

 

 

 

4.4

 

Certification of Designation of Rights and Preferences to Series B Convertible Preferred Stock(incorporated herein by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on March 29, 2017)

 

 

 

10.1

 

Leafbuyer Technologies, Inc. 2017 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-8 filed on February 28, 2018).

 

 

 

10.2

 

Standby Equity Distribution Agreement dated April 19, 2018 between VA II PN, Ltd. and Leafbuyer Technologies, Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on April 20, 2018).

 

 

 

23.1

 

Consent of Independent Registered Public Accounting Firm.*

 

 

 

31.1

 

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

 

 

 

31.2

 

Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

 

 

 

32.1

 

Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **

 

 

 

32.2

 

Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 8**

 

 

 

101.INS

 

XBRL Instance Document*

 

 

 

101.SCH

 

XBRL Taxonomy Extension Schema*

 

 

101.CAL

 

XBRL Taxonomy Extension Calculation Linkbase*

 

 

101.DEF

 

XBRL Taxonomy Extension Definition Linkbase*

 

 

101.LAB

 

XBRL Taxonomy Extension Label Linkbase*

 

 

101.PRE

 

XBRL Taxonomy Presentation Linkbase*

________ 

* Filed herewith.

** Furnished herewith.

 

23
 
Table of Contents

  

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

LEAFBUYER TECHNOLOGIES, INC.

 

  

 

Date: September 28, 2018

By:

/s/ Kurt Rossner

 

 

Kurt Rossner

 

 

Chief Executive Officer, Director
(principal executive officer)

 

  

 

 

By:

/s/ Mark Breen

 

 

Mark Breen

 

 

Chief Financial Officer, Director
(principal financial and accounting officer)

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.

 

Signature

 

Capacity

 

Date

 

 

 

/s/ Kurt Rossner

 

Chief Executive Officer, Director

 

September 28, 2018

Kurt Rossner

 

(Principal Executive Officer)

 

 

 

 

/s/ Mark Breen

 

Chief Financial Officer, Director

 

September 28, 2018

Mark Breen

 

(Principal Financial and Accounting Officer)

 

 

 

 

/s/ Michael Goerner

 

Chief Technology Officer, Director

 

September 28, 2018

Michael Goerner

 

 

 

 

 

24
 

 

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

Report of Independent Registered Public Accounting Firm

 

 

26

 

Consolidated Balance Sheets

 

 

27

 

Consolidated Statements of Operations

 

 

28

 

Consolidated Statements of Cash Flows

 

 

29

 

Consolidated Statements of Equity

 

 

30

 

Notes to Consolidated Financial Statements

 

 

31

 

 

25
 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 

To the shareholders and the board of directors of Leafbuyer Technologies, Inc.

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of Leafbuyer Technologies, Inc. and its subsidiary (the "Company") as of June 30, 2018, June 30, 2017, and December 31, 2016, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the year ended June 30, 2018, the six month transition period ended June 30, 2017, and the year ended December 31, 2016, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2018, June 30, 2017, and December 31, 2016, and the results of its operations and its cash flows for the years and period then ended, in conformity with accounting principles generally accepted in the United States.

 

Going concern uncertainty

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company incurred recurring losses from operations, and an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

/s/ B F Borgers CPA PC

 

We have served as the Company’s auditor since 2017.

 

Lakewood, Colorado

September 28, 2018 

 

26
 
Table of Contents

   

LEAFBUYER TECHNOLOGIES, INC.

CONSOLIDATED BALANCE SHEETS

 

 

 

June 30,
2018

 

 

June 30,
2017

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$ 375,938

 

 

$ 164,680

 

Accounts receivable, Net

 

 

8,279

 

 

 

-

 

Inventory

 

 

3,530

 

 

 

-

 

Prepaid expenses and other current assets

 

 

172,566

 

 

 

30,867

 

Total current assets

 

 

560,313

 

 

 

195,547

 

Noncurrent assets:

 

 

 

 

 

 

 

 

Fixed assets, net

 

 

873

 

 

 

1,500

 

Total assets

 

$ 561,186

 

 

$ 197,047

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts Payable

 

$ 290,783

 

 

$ -

 

Accrued liabilities

 

 

66,087

 

 

 

45,049

 

Deferred revenue

 

 

156,530

 

 

 

55,533

 

Debt, current

 

 

805,684

 

 

 

-

 

Total current liabilities

 

 

1,319,084

 

 

 

100,582

 

Total liabilities

 

 

1,319,084

 

 

 

100,582

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 6)

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value; 10,000,000 shares authorized; 6,750,000 and 6,750,000 shares issued and outstanding for class A convertible preferred stock and 70,000 and 250,000 shares issued and outstanding for class B convertible preferred stock at June 30, 2018 and June 30, 2017, respectively

 

 

6,820

 

 

 

7,000

 

Common stock, $0.001 par value; 150,000,000 shares authorized; 42,661,228 shares issued and outstanding at June 30, 2018 and 38,000,663 shares issued and outstanding at June 30, 2017

 

 

42,661

 

 

 

38,000

 

Additional paid in capital

 

 

3,130,831

 

 

 

1,010,000

 

Accumulated deficit

 

 

(3,938,210 )

 

 

(958,535 )

Total equity (deficit)

 

 

(757,898 )

 

 

96,465

 

Total liabilities and equity

 

$ 561,186

 

 

$ 197,047

 

 

See accompanying notes to consolidated financial statements.

 

27
 
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LEAFBUYER TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

 

 

 

Year Ended

 

 

Transition
Period Ended

 

 

Year Ended

 

 

 

June 30,
2018

 

 

June 30,
2017

 

 

December 31,

2016

 

 

 

 

 

 

 

 

 

 

 

Sales revenue

 

$ 1,128,245

 

 

$ 466,267

 

 

$ 704,832

 

Cost of sales

 

 

-

 

 

 

-

 

 

 

-

 

Gross profit

 

 

1,128,245

 

 

 

466,267

 

 

 

704,832

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Selling expenses

 

 

206,831

 

 

 

450

 

 

 

-

 

General and administrative

 

 

3,870,548

 

 

 

806,332

 

 

 

693,606

 

Total operating expenses

 

 

4,077,379

 

 

 

806,782

 

 

 

693,606

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) income from operations

 

 

(2,949,134 )

 

 

(340,515 )

 

 

11,226

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(35,541 )

 

 

(220 )

 

 

-

 

Other income

 

 

5,000

 

 

 

-

 

 

 

1,438

 

Other income (expense), net

 

 

(30,541 )

 

 

(220 )

 

 

1,438

 

Income tax expense

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$ (2,979,675 )

 

$ (340,735 )

 

$ 12,664

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$ (0.07 )

 

$ (0.01 )

 

$ 0.00

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

39,905,933

 

 

 

32,570,967

 

 

 

26,160,000

 

 

See accompanying notes to consolidated financial statements.

 

28
 
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LEAFBUYER TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

Year Ended

 

 

Transition
Period Ended

 

 

Year Ended

 

 

 

June 30,
2018

 

 

June 30,
2017

 

 

December 31,
2016

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$ (2,979,675 )

 

$ (340,735 )

 

$ 12,664

 

Adjustments to reconcile net income to net cash used in operating activities

 

 

 

 

 

 

 

 

 

 

 

 

Stock based compensation

 

 

810,962

 

 

 

-

 

 

 

-

 

Stock issued for services

 

 

280,850

 

 

 

-

 

 

 

-

 

Depreciation

 

 

627

 

 

 

-

 

 

 

-

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(8,279 )

 

 

-

 

 

 

-

 

Inventory

 

 

(3,530 )

 

 

-

 

 

 

-

 

Prepaid expenses and other

 

 

(141,699 )

 

 

(15,952 )

 

 

5

 

Accounts payable and accrued liabilities

 

 

311,821

 

 

 

4,856

 

 

 

45,929

 

Other assets and liabilities, net

 

 

100,997

 

 

 

-

 

 

 

-

 

Net cash (used in) provided by operating activities

 

 

(1,627,926 )

 

 

(351,831 )

 

 

58,598

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition of office equipment

 

 

-

 

 

 

(1,500 )

 

 

-

 

Net cash used in investing activities

 

 

-

 

 

 

(1,500 )

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from issuance of stock

 

 

1,033,500

 

 

 

1,055,000

 

 

 

-

 

Proceeds from issuance of debts

 

 

 805,684

 

 

 

 -

 

 

 

 -

 

Distributions

 

 

-

 

 

 

(600,000 )

 

 

(18,301 )

Net cash provided by (used in) financing activities

 

 

1,839,184

 

 

 

455,000

 

 

 

(18,301 )

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

211,258

 

 

 

101,669

 

 

 

40,297

 

Cash and cash equivalents, beginning of period

 

 

164,680

 

 

 

63,011

 

 

 

22,714

 

Cash and cash equivalents, end of period

 

$ 375,938

 

 

$ 164,680

 

 

$ 63,011

 

Cash paid for interests

 

 

 -

 

 

 

 -

 

 

 

 -

 

Cash paid for income taxes

 

 

 -

 

 

 

 -

 

 

 

 -

 

Supplemental information for non-cash investing and financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

Conversion of preferred stock

 

$

 2,880

 

 

$

 -

 

 

$

 -

 

 

See accompanying notes to consolidated financial statements.

 

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LEAFBUYER TECHNOLOGIES, INC.

CONSOLIDATED STATEMENTS OF EQUITY

 

 

 

 Preferred Stock 

 

 

 Common Stock 

 

 

 

 

 

 

 

 

 

 

 

 

 # of Shares 

 

 

 Amount 

 

 

 # of Shares 

 

 

 Amount 

 

 

 APIC 

 

 

 Acc Deficit 

 

 

 Total 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2015*

 

 

 3,250,000

 

 

$

 3,250

 

 

 

26,160,000 

 

 

$

 26,160

 

 

$

 (29,410

)

 

$

 (12,164

)

 

$

 (12,164

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income for the year ended December 31, 2016

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 12,664

 

 

 

 12,664

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 (18,300

)

 

 

 (18,300

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2016 

 

 

3,250,000

 

 

$ 3,250

 

 

 

26,160,000

 

 

$ 26,160

 

 

$ (29,410 )

 

$ (17,800 )

 

$ (17,800 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LB Media, LLC activity, period ended March 22, 2017: 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(108,355 )

 

 

(108,355 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impact of Merger Agreement: 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares acquired in connection with Merger Agreement 

 

 

-

 

 

 

-

 

 

 

58,090,663

 

 

 

58,090

 

 

 

(58,090 )

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retirement of shares to complete Merger Agreement 

 

 

-

 

 

 

-

 

 

 

(46,250,000 )

 

 

(46,250 )

 

 

46,250

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued in connection with Merger Agreement 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

850,000

 

 

 

-

 

 

 

850,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(600,000 )

 

 

(600,000 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock subscriptions 

 

 

3,750,000

 

 

 

3,750

 

 

 

-

 

 

 

-

 

 

 

201,250

 

 

 

-

 

 

 

205,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated net loss from March 23 through June 30, 2017 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(232,380 )

 

 

(232,380 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2017 

 

 

7,000,000

 

 

$ 7,000

 

 

 

38,000,663

 

 

$ 38,000

 

 

$ 1,010,000

 

 

$ (958,535 )

 

$ 96,465

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for cash 

 

 

-

 

 

 

-

 

 

 

1,589,565

 

 

 

1,590

 

 

 

1,018,410

 

 

 

-

 

 

 

1,020,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for exercise of options 

 

 

-

 

 

 

-

 

 

 

54,000

 

 

 

54

 

 

 

13,446

 

 

 

-

 

 

 

13,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock based compensation 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

810,962

 

 

 

-

 

 

 

810,962

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock in conversion of preferred stock 

 

 

(180,000 )

 

 

(180 )

 

 

2,880,000

 

 

 

2,880

 

 

 

(2,700 )

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for services  

 

 

 

 

 

 

 

 

 

 

137,000

 

 

 

137

 

 

 

280,713

 

 

 

-

 

 

 

280,850

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss  

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,979,675 )

 

 

(2,979,675 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, June 30, 2018 

 

 

6,820,000

 

 

$ 6,820

 

 

 

42,661,228

 

 

$ 42,661

 

 

$ 3,130,831

 

 

$ (3,938,210 )

 

$ (757,898 )
 

See accompanying notes to consolidated financial statements.

 

*Prior to March 24, 2017 the Company was in the form of an LLC with only members' equity, the share information has been retroactively presented.  See Note 3 of the accompanying footnotes for information on the recapitalization.

  

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LEAFBUYER TECHNOLOGIES, INC.

Notes to Consolidated Financial Statements

 

Note 1 — Description of Business

 

Formation of the Company

 

On March 23, 2017, AP Event Inc. (“AP” or the “Registrant”) consummated an Agreement and Plan of Merger (the “Merger Agreement”) with LB Media Group, LLC, a Colorado limited liability Company (“LB Media”), August Petrov (the principal stockholder of AP), and LB Acquisition Corp., a Colorado corporation and a wholly-owned subsidiary of AP (“Acquisition”) whereby Acquisition was merged with and into LB Media (the “Merger”). (See Note 3)

 

As a result of the Merger, LB Media became a wholly-owned subsidiary of the Registrant, and immediately following the consummation of the Merger and giving effect to the securities sold in the Offering, the members of LB Media beneficially owned approximately fifty-five percent (55%) of the issued and outstanding Common Stock of the Registrant. The Merger Agreement contains customary representations, warranties, and covenants of the Registrant and LB Media for like transactions.

 

As a result of the reorganization and name change discussed later, Leafbuyer Technologies, Inc. (“Leafbuyer”) became the publicly quoted parent holding company with LB Media becoming a wholly-owned subsidiary of Leafbuyer. Upon consummation of the Agreement, Leafbuyer common stock was deemed to be registered under Section 12(b) of the Securities Exchange Act of 1934, as amended, pursuant to Rule 12g-3(a) promulgated thereunder. For purposes of Rule 12g-3(a), Leafbuyer is the successor issuer to AP.

 

AP was established under the corporation laws in the State of Nevada on October 16, 2014. On March 24, 2017, the Registrant changed its name to Leafbuyer Technologies, Inc.

 

All references herein to “us,” “we,” “our,” “Leafbuyer,” or the “Company” refer to Leafbuyer Technologies, Inc. and its subsidiary, LB Media.

 

Description of Business

 

We are focused on providing valuable information for the savvy cannabis consumer looking to make a purchase via deals and a dispensary database. We connect consumers with dispensaries by working alongside businesses to showcase their unique products and build a network of loyal patrons. Our national network of cannabis deals and information reaches millions of consumers monthly.

 

LB Media was founded in 2012 by a group of technology and industry veterans and provides online resources for cannabis deals and specials. Our headquarters is located in Greenwood Village, Colorado.

 

Basis of Presentation

 

As a result of the Merger Agreement, LB Media is considered to be the “accounting acquirer” and, accordingly, is treated as the predecessor company. The consolidated financial statements include the results of operations and financial position of LB Media for all periods, and the results of operations and financial position of Leafbuyer as of and for the fiscal year ended June 30, 2018 and for the transition period as of and for the six months ended June 30, 2017 (“Transition Period”).

 

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Although these estimates are based on our knowledge of current events and actions we may undertake in the future, actual results may ultimately differ from these estimates and assumptions. Furthermore, when testing assets for impairment in future periods, if management uses different assumptions or if different conditions occur, impairment charges may result.

 

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Going Concern

 

As shown in the accompanying financial statements, we had an equity balance of ($757,898) and a working capital balance of ($758,771) as of June 30, 2018. We reported a net loss of $2,979,675 for the year ended June 30, 2018, and we anticipate further losses in the development of our business. Accordingly, there is substantial doubt about our ability to continue as a going concern.

 

Our ability to continue as a going concern is dependent upon our generating profitable operations in the future and / or obtaining the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come due. Management believes that actions presently being taken to further implement our business plan of expansion of products, geographical locations we sell our services and deeper market penetration will generate additional revenues and eventually positive cash flow and provide opportunity for the Company to continue as a going concern. While we believe in the viability of our strategy to generate additional revenues and our ability to raise additional funds, there can be no assurances to that effect.

 

Note 2 — Summary of Significant Accounting Policies

 

Significant Accounting Policies

   

Principles of Consolidation

 

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, LB Media. All significant inter-company transactions and balances have been eliminated in consolidation.

 

Use of Estimates

 

Management uses estimates and assumptions in preparing these consolidated financial statements. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates.

 

Fair Value Measurements

 

The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures,” which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value, and expands disclosure of fair value measurements.

 

The estimated fair value of certain financial instruments, including cash and cash equivalents, are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.

 

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ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

 

Level 1 — quoted prices in active markets for identical assets or liabilities

 

Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable

 

Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

 

The Company has no assets or liabilities valued at fair value on a recurring basis.

 

Revenue Recognition

 

The Company follows the guidance of the Accounting Standards Codification ("ASC") Topic 605, "Revenue Recognition." We record revenue when persuasive evidence of an arrangement exists, services have been rendered, the selling price to the customer is fixed or determinable and collectability of the revenue is reasonably assured. In the normal course of business, we receive payments from our customers which include payments for both current and future services. We do not recognize payment for future services in current income; rather, we record the amounts of those payments as deferred revenue in the current period and recognize the appropriate amounts in income in future periods as applicable. No costs are recorded to cost of sales as we are unable to directly allocate any costs of our revenue.

 

Topic 606 is effective as of the annual reporting period beginning after December 15, 2017 using either of two methods: (1) retrospective application of Topic 606 to each prior reporting period presented with the option to elect certain practical expedients as defined within Topic 606 or (2) retrospective application of Topic 606 with the cumulative effect of initially applying Topic 606 recognized at the date of initial application and providing certain additional disclosures as defined per Topic 606. We adopted Topic 606 pursuant to the method (2) and we determined that any cumulative effect for the initial application did not require an adjustment to retained earnings at July 1, 2017.

 

Cash and Cash Equivalents

 

For purposes of the consolidated statements of cash flows, cash includes demand deposits, time deposits, certificates of deposit, and short-term liquid investments with original maturities of three months or less when purchased. As of June 30, 2018 and 2017, the Company did not hold any cash equivalents. The Federal Deposit Insurance Corporation provides coverage for all accounts of up to $250,000. As of June 30, 2018 and 2017, none of the Company’s cash was in excess of federally insured limits.

 

Accounts Receivable, Net

 

Accounts receivable are stated at the amount management expects to collect. An allowance for doubtful accounts is recorded, as a charge to bad debt expense, where collection is considered to be doubtful due to credit issues. These allowances together reflect the Company's estimate of potential losses inherent in accounts receivable balances, based on historical loss and known factors impacting its customers. Management has determined that there is a $6,617 allowance required for the year ended June 30, 2018, and no allowance required for the six months ended June 30, 2017 or for the year ended December 31, 2016. The Company does not accrue interest on past due receivables.

 

Inventory

 

Inventory consists of merchandise and is stated at the lower of cost, determined by last-in, first-out method or market. Market is determined based on the net realizable value, with appropriate consideration given to obsolescence, excessive levels, deterioration and other factors. At June 30, 2018 and 2017, the Company had $3,530 and $0 of inventory, respectively. A reserve is recorded for any inventory deemed excessive or obsolete. No reserve is considered necessary at June 30, 2018 and 2017.

 

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Stock-Based Compensation

 

The Company accounts for stock-based awards to employees in accordance with applicable accounting principles, which requires compensation expense related to share-based transactions, including employee stock options, to be measured and recognized in the financial statements based on a determination of the fair value of the stock options. The grant date fair value is determined using the Black-Scholes-Merton (“Black-Scholes”) pricing model. For all employee stock options, we recognize expense over the requisite service period on an accelerated basis over the employee’s requisite service period (generally the vesting period of the equity grant). The Company’s option pricing model requires the input of highly subjective assumptions, including the expected stock price volatility and expected term. Any changes in these highly subjective assumptions significantly impact stock-based compensation expense.

 

Options awarded to purchase shares of common stock issued to non-employees in exchange for services are accounted for as variable awards in accordance with applicable accounting principles. Such options are valued using the Black-Scholes option pricing model.

 

See Note 9 for the assumptions used to calculate the fair value of stock-based employee and non-employee compensation.

 

The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of ASC 505-50 Equity-Based Payments to Non-Employees. Stock-based compensation related to non-employees is accounted for based on the fair value of the related stock or options or the fair value of the services, whichever is more readily determinable. The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.

 

Income Taxes

 

The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

 

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized. As of June 30, 2018, the Company had approximately $4,264,000 of net operating loss carry forward that was unrecognized tax benefits.

 

Under Internal Revenue Code 382, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change income may be limited. We have not completed a study to assess whether an “ownership change” has occurred or whether there have been multiple ownership changes since we became a “loss corporation” as defined in Section 382. Future changes in our stock ownership, which may be outside of our control, may trigger an “ownership change”. In addition, future equity offerings or acquisitions that have equity as a component of the purchase price could result in an “ownership change.” If an “ownership change” has occurred or does occur in the future, utilization of the NOL carryforwards or other tax attributes may be limited, which could potentially result in increased future tax liability to us.

 

ASC Topic 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. There are no material uncertain tax positions at June 30, 2018.

 

On December 22, 2017, the U.S. government enacted the Tax Act, which made significant changes to the Internal Revenue Code of 1986, as amended, including, but not limited to, reducing the U.S. corporate statutory tax rate and the net operating loss incurred after December 31, 2017 can be carried forward indefinitely and the two year net operating loss carried back was eliminated. We continue to evaluate the impact of the Tax Act.

 

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Recently Issued Accounting Pronouncements

 

In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606) (ASU 2016-12). ASU 2016-12 provides guidance that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2016-12 provides clarification on assessing collectability, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications. This ASU is effective for annual reporting periods beginning after December 15, 2017, with the option to adopt as early as December 15, 2016. There is no material impact of the adoption of this ASU on our consolidated results of operations, cash flows and financial position.

 

In February 2016, the FASB issued authoritative guidance which changes financial reporting as it relates to leasing transactions. Under the new guidance, lessees will be required to recognize a lease liability, measured on a discounted basis; and a right-of-use asset, for the lease term. The new guidance is effective for annual and interim periods beginning after December 15, 2018. Early application is permitted for all entities upon issuance. Lessees and lessors must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is in the process of evaluating the impact of adoption of this guidance on its financial statements.

 

In June 2018, the FASB issued ASU 2018-07 “Improvements to Nonemployee Share-Based Payment Accounting (Topic 718)” that expands the scope to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements to nonemployee awards except for certain exemptions specified in the amendment. The guidance is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within that fiscal year. Early adoption is permitted. The Company does not anticipate the adoption of ASU 2018-07 will have a material impact on the Company's financial condition or results of operations.

 

The Financial Accounting Standards Board and other entities issued new or modifications to, or interpretations of, existing accounting guidance during 2016, 2017 and 2018. Management has carefully considered the new pronouncements that altered generally accepted accounting principles and does not believe that any other new or modified principles will have a material impact on the Company’s reported financial position or operations in the near term.

 

Note 3 — Recapitalization

 

On March 23, 2017, we completed the Merger Agreement with AP. The impact to equity of the Merger Agreement includes a) the issuance of 2,351,355 new pre-split shares of the Company’s common stock; b) the issuance of 324,327 new pre-split shares of the Company’s Series A Convertible Preferred Stock; c) the retirement of 5,000,000 shares of the Company’s pre-split common stock; and d) removing the Company’s accumulated deficit and adjusting equity for the recapitalization. Simultaneously with the Merger, the Company accepted subscriptions in a private placement offering of 476,092 new pre-split shares of the Company’s common stock in the amount of $600,000 as well as 27,027 new pre-split shares of the Company’s Series B Convertible Preferred Stock in the amount of $250,000. These shares are considered to be outstanding beginning January 1, 2015. However, as the cash to purchase these shares was received in 2017, we have recorded the cash received in connection with these shares in additional paid-in capital during 2017.

 

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Note 4 — Capital Stock and Equity Transactions

 

The Company has 150,000,000 shares of common stock authorized with a par value of $0.001 per share as of June 30, 2018. In addition, the Company has 10,000,000 preferred stock authorized with a par value of $0.001 per share as of June 30, 2018.

 

On April 19, 2018, the Company entered into a Standby Equity Distribution Agreement (the “SEDA”) with YA II PN Ltd. (“Investor”), a Cayman Island exempt limited partnership and an affiliate of Yorkville Advisors Global, LLC, whereby the Company sold and the Investor purchased 869,565 shares (the “Initial Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”) for the purchase price of One Million Dollars ($1,000,000), Additionally, under the SEDA the Company may sell to the Investor up to $5 million of shares of Common Stock over a two-year commitment period. Under the terms of the SEDA, the Company may from time to time, in its discretion, sell newly-issued shares of its common stock to the Investor at a discount to market of 8% of the lowest daily volume weighted average price during the relevant pricing period. The Company is obligated to register the Initial Shares, the Commitment Shares (as defined below), and the shares of Common Stock issuable under the SEDA pursuant to a registration statement under the Securities Act of 1933, as amended (the “Securities Act”).

 

The Company is not obligated to utilize any portion of the SEDA and there are no minimum commitments or minimum use penalties provided the Company does not terminate the SEDA within 18 months wherein the Company would be required to pay a termination fee of $100,000. The Company issued One Hundred Thousand (100,000) shares of Common Stock as a commitment fee (the “Commitment Shares”) to an affiliate of the Investor. The total amount of funds that ultimately can be raised under the SEDA over the two-year term will depend on the market price for the Company’s common stock and the number of shares actually sold.

 

The SEDA does not impose any restrictions on the Company’s operating activities. During the term of the SEDA, the Investor is prohibited from engaging in any short selling or hedging transactions related to the Common Stock.

 

In connection with the SEDA, the Company engaged Garden State Securities, Inc. (“GSS”) as its exclusive selling/placement agent. In connection with the transactions set forth in the SEDA, GSS shall receive a fee equal to 10% of the purchase price of the Initial Shares in cash plus warrants to purchase 86,957 shares of Common Stock at an exercise price of $1.15 per share, expiring in five years. GSS will also receive a cash fee equal to 5% of the amount paid by the Investor for each Advance under the SEDA.

 

All shares issued in accordance with the Merger Agreement are considered to be outstanding beginning January 1, 2015 as these shares relate to the change in capital structure. Furthermore, 5,000,000 pre-split shares of common stock were retired in accordance with the Merger Agreement. In connection with the Merger Agreement, the Company made distributions totaling $600,000 to officers of the Company. Both Series A Convertible Preferred Stock and Series B Convertible Preferred Stock have rights to dividends when declared; however, there is no stated dividend rate and no such dividends have yet been declared by the Company. We evaluated the convertible preferred stock agreements for derivatives and determined that they do not qualify for derivative treatment for financial reporting purposes. We also determined this does not qualify as a beneficial conversion feature. Accordingly, the balances have been reported at the carrying amounts.

 

On March 24, 2017, the Company effected a forward split such that 9.25 shares of Common Stock were issued for every 1 share of Common Stock issued and outstanding immediately prior to the forward split. Immediately following the forward split, there were 38,000,663 shares of post-split common stock, 3,000,000 shares of post-split Series A Convertible Preferred Stock, and 250,000 shares of post-split Series B Convertible Preferred Stock outstanding. The par value of all classes of shares remained at $0.001 per share after the forward split. In March of 2017, an additional 3,750,000 shares of post-split Series A Convertible Preferred Stock were purchased from the Company. All references to shares herein refer to post-split shares, unless otherwise noted.

 

36
 
Table of Contents

 

During the year ended June 30, 2018, the Company accepted subscriptions for the issuance of 1,589,565 shares of Common Stock for total subscriptions of $1,020,000 in cash.

 

During the year ended June 30, 2018, the Company issued 54,000 shares of Common Stock for the exercise of options and $13,500 cash. The Company also received notice from a Preferred Stock Series B stockholder to convert 180,000 shares of preferred stock into 2,880,000 shares of Common Stock.

 

During the year ended June 30, 2018, the Company issued 137,000 shares of Common Stock to vendors for services rendered. These shares were valued at fair market value of $280,850 and expensed in the accompanying Statement of Operations.

 

Note 5 — Debt

 

On September 28, 2017, the Company entered into a promissory note with an investor of the Company in the amount of $200,000. The note bears no interest and is payable in full on September 30, 2018. In addition, on December 20, 2017, the Company entered into a promissory note with the same investor of the Company in the amount of $150,000. This note also bears no interest and is payable in full on December 20, 2018. The investor has agreed to convert the loan into 437,500 shares of common stock. The Company has not issued these shares at this time.

 

During January 2018, the Company entered into a note with an investor of the Company in the amount of $224,000 in exchange for $200,000.  As of June 30, 2018, the discount was fully amortized. The notes bear interest at 12% and is payable in full in July 2018.

   

During February 2018, the Company entered into two promissory notes with an investor of the Company in the amount of $28,000 and $84,000 in exchange for $25,000 and $75,000, respectively. Each of the notes have an original issue discount of $3,000 and $9,000, respectively that is being amortized to interest expense over the term of the notes. As of June 30, 2018, $2,635 of the discount remains to be amortized. The notes bear interest at 12% and is payable in full in August 2018.

 

During February 2018, the Company entered into a promissory note with an investor of the Company in the amount of $150,000 in exchange for $132,000 cash. The note has an original issue discount of $18,000 that is being amortized to interest expense over the term of the note. As of June 30, 2018, $3,680 of the discount remains to be amortized. The note bears interest at 12% and is payable in full in August 2018.

 

Note 6 — Commitments and Contingencies

 

The Company leases office space. Future minimum lease payments are as follows:

 

June 30, 2019

 

$ 29,024

 

June 30, 2020

 

$ 31,900

 

June 30, 2021

 

$ 16,225

 

 

The Company does not have a concentration of revenues from any individual customer (less than 10%).

 

To the best of the Company’s knowledge and belief, no legal proceedings of merit are currently pending or threatened against the Company.

 

 
37
 
Table of Contents

   

Note 7 — Change in Fiscal Year End

 

Statements of Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Month's Ended June 30,

 

 

 

2018

 

 

2017

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

634,557

 

 

 

466,267

 

Cost of goods sold

 

 

-

 

 

 

-

 

Gross profit

 

 

634,557

 

 

 

466,267

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Sales & marketing

 

 

121,977

 

 

 

450

 

G&A

 

 

2,986,290

 

 

 

806,332

 

Total operating expenses

 

 

3,108,267

 

 

 

806,782

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(2,473,710 )

 

 

(340,515 )

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(35,513 )

 

 

(220 )

Other income

 

 

5,000

 

 

 

-

 

Other income (expense), net

 

 

(30,513 )

 

 

(220 )

 

 

 

 

 

 

 

 

 

Net loss

 

 

(2,504,223 )

 

 

(340,735 )

  

Cash Flow Statement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Month's Ended June 30,

 

 

 

2018

 

 

2017

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

(2,504,223 )

 

 

(340,735 )

Stock compensation expense

 

 

810,962

 

 

 

-

 

Stock issued for services

 

 

280,850

 

 

 

-

 

Depreciation and amortization expense

 

 

466

 

 

 

-

 

Changes:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(8,279 )

 

 

-

 

Inventory

 

 

(3,530 )

 

 

-

 

Prepaid expenses and other current assets

 

 

(133,591 )

 

 

(15,952 )

Accounts payable and accrued expenses

 

 

372,021

 

 

 

4,856

 

Net

 

 

(1,185,324 )

 

 

(351,831 )

 

 

 

 

 

 

 

 

 

Investing:

 

 

 

 

 

 

 

 

Property and equipment

 

 

-

 

 

 

(1,500 )

Net

 

 

-

 

 

 

(1,500 )

 

 

 

 

 

 

 

 

 

Financing

 

 

 

 

 

 

 

 

Proceeds from stock purchases

 

 

913,500

 

 

 

1,055,000

 

Proceeds from debt

 

 

450,682

 

 

 

-

 

Member activity

 

 

-

 

 

 

(600,000 )

Net

 

 

1,364,182

 

 

 

455,000

 

 

 

 

 

 

 

 

 

 

Total net change

 

 

178,858

 

 

 

101,669

 

 

 

 

 

 

 

 

 

 

Cash, beginning

 

 

197,080

 

 

 

63,011

 

 

 

 

 

 

 

 

 

 

Cash, ending

 

 

375,938

 

 

 

164,680

 

 

 
38
 
Table of Contents

     

Statements of Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended June 30,

 

 

 

2018

 

 

2017

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

Revenue

 

 

1,128,245

 

 

 

949,921

 

Cost of goods sold

 

 

-

 

 

 

-

 

Gross profit

 

 

1,128,245

 

 

 

949,921

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Sales & marketing

 

 

206,831

 

 

 

450

 

G&A

 

 

3,870,548

 

 

 

1,217,928

 

Total operating expenses

 

 

4,077,379

 

 

 

1,218,378

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(2,949,134 )

 

 

(268,457 )

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(35,541 )

 

 

(220 )

Other income

 

 

5,000

 

 

 

1,438

 

Other income (expense), net

 

 

(30,541 )

 

 

1,218

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

(2,979,675 )

 

 

(267,239 )

  

Cash Flow Statement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended June 30,

 

 

 

2018

 

 

2017

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

Net loss

 

 

(2,979,675 )

 

 

(267,239 )

Stock compensation expense

 

 

810,962

 

 

 

-

 

Stock issued for services

 

 

280,850

 

 

 

-

 

Depreciation and amortization expense

 

 

627

 

 

 

-

 

Changes:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(8,279 )

 

 

-

 

Inventory

 

 

(3,530 )

 

 

-

 

Prepaid expenses and other current assets

 

 

(141,699 )

 

 

(25,276 )

Accounts payable and accrued expenses

 

 

412,818

 

 

 

(37,601 )

Net

 

 

(1,627,926 )

 

 

(330,116 )

 

 

 

 

 

 

 

 

 

Investing:

 

 

 

 

 

 

 

 

Property and equipment

 

 

-

 

 

 

(1,500 )

Net

 

 

-

 

 

 

(1,500 )

 

 

 

 

 

 

 

 

 

Financing

 

 

 

 

 

 

 

 

Proceeds from stock purchases

 

 

1,033,500

 

 

 

455,000

 

Proceeds from debt

 

 

805,684

 

 

 

-

 

Member activity

 

 

-

 

 

 

(11,064 )

Net

 

 

1,839,184

 

 

 

443,936

 

 

 

 

 

 

 

 

 

 

Total net change

 

 

211,258

 

 

 

112,320

 

 

 

 

 

 

 

 

 

 

Cash, beginning

 

 

164,680

 

 

 

52,360

 

 

 

 

 

 

 

 

 

 

Cash, ending

 

 

375,938

 

 

 

164,680

 

 

As a result of the Merger Agreement with AP, the fiscal year end of LB Media changed from December 31 to June 30. Upon consummation of the reorganization and name change, Leafbuyer adopted the June 30, 2017 year end of LB Media effective as of June 30, 2017.

 

The consolidated statements of operations, cash flows, and equity reflect results for the year ended June 30, 2018, for the six months transition period ended June 30, 2017 and the twelve months ended December 31, 2016. The consolidated balance sheets reflect the financial position of the Company at June 30, 2018 and June 30, 2017.

 

 
39
 
Table of Contents

   

Note 8 — Earnings or Loss per Share

 

Basic net loss per share is computed by dividing net income by the weighted-average number of common shares outstanding during the reporting period. Diluted net loss per share is computed similarly to basic net loss per share, except that it includes the potential dilution that could occur if dilutive securities are exercised. We have prepared the calculation of earnings per share using the weighted-average number of common shares of the Company that were outstanding for the year ended June 30, 2018, for the six months ended June 30, 2017 and for the year ended December 31, 2016.

 

Dilutive instruments had no effect on the calculation of earnings or loss per share during the years ended June 30, 2018, for the six months ended June 30, 2017 and for year ended December 31, 2016.

 

Note 9 — Stock Based Compensation

 

The equity incentive plan of the Company was established in February of 2017. The Board of Directors of the Company may from time to time, in its discretion grant to directors, officers, consultants and employees of the Company, non-transferable options to purchase common shares, provided that the number of options issued do not exceed 5,000,000. The options are exercisable for a period of up to 10 years from the date of the grant.

 

The following table reflects the continuity of stock options for the year ended June 30, 2018 (none for the six months ended June 30, 2017):

 

A summary of stock option activity is as follows:

 

 

 

June 30,
2018

 

 

 

 

 

Number of options outstanding:

 

 

 

Beginning of year

 

 

-

 

Granted

 

 

4,398,935

 

Exercised, converted

 

 

(54,000 )

Forfeited / exchanged / modification

 

 

(199,200 )

 

 

 

 

 

End of period

 

 

4,145,735

 

 

 

 

 

 

Number of options exercisable at end of period

 

 

1,181,435

 

Number of options available for grant at end of period

 

 

764,565

 

 

 

 

 

 

Weighted average option prices per share:

 

 

 

 

Granted during the period

 

$ 0.25

 

Exercised during the period

 

$ 0.25

 

Terminated during the period

 

$ 0.25

 

Outstanding at end of period

 

$ 0.25

 

Exercisable at end of period

 

$ 0.25

 

 

 
40
 
Table of Contents

  

The average fair value of stock options granted was estimated to be $1.50 per share for the year ended June 30, 2018. This estimate was made using the Black-Scholes option pricing model and the following weighted average assumptions:

 

 

 

2018

 

 

 

 

 

Expected option life (years)

 

2.5 - 3

 

Expected stock price volatility

 

 

144 %

Expected dividend yield

 

 

— %

 

Risk-free interest rate

 

2.31% - 2.78

 

Stock-based compensation expense attributable to stock options was approximately $810,962 for the year ended June 30, 2018. As of June 30, 2018, there was approximately $4,948,460 of unrecognized compensation expense related to unvested stock options outstanding, and the weighted average vesting period for those options was 3 years.

 

There was no stock based compensation recorded during the six months ended June 30, 2017 and for the year ended December 31, 2016. 

 

Note 10 — Subsequent Events

 

During September, the Company entered several promissory notes with various investor of the Company with a face value of $1,320,000 in exchange for $1,200,000 cash payment (“the Notes”), the discount of the Notes will be amortized over the life of the Note and have an interest rate of 10%. The Notes have a twelve-month term with no payment required for the initial six months; after six months, the Company will repay the investors interest and principle in six equal installments. The principle and interest of the note is convertible into the Company’s common stock at a purchase price of $0.70 per common share after the six months. If the Company defaults on the Notes, the interest is increased to 12% and at the investors’ option, the principle and interest can be converted into the Company common stock at a 20% discount to the then current market. In addition, the Company issued five-year warrants to purchase up to 600,000 of the Company common shares at a price of $0.75 per common share.

 

41

 

EX-31.1 2 lbuy_ex311.htm CERTIFICATION lbuy_ex311.htm

EXHIBIT 31.1

 

Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

I, Kurt Rossner, certify that:

 

1. I have reviewed this annual report on Form 10-K of Leafbuyer Technologies, Inc.

 

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

 

3. Based on my knowledge, the interim financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

 

 

 

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

 

 

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Interim Financial Statements for external purposes in accordance with generally accepted accounting principles;

 

 

 

 

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

 

 

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

 

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

 

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

 

 

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: September 28, 2018

  

By:

/s/ Kurt Rossner

 

Kurt Rossner

 

Chief Executive Officer and Chairman

(Principal Executive Officer)

 

EX-31.2 3 lbuy_ex312.htm CERTIFICATION lbuy_ex312.htm

EXHIBIT 31.2

 

Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 

I, Mark Breen, certify that:

 

1. I have reviewed this annual report on Form 10-K of Leafbuyer Technologies, Inc.

 

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

 

3. Based on my knowledge, the interim financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

 

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

 

 

 

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

 

 

 

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Interim Financial Statements for external purposes in accordance with generally accepted accounting principles;

 

 

 

 

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

 

 

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

 

 

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

 

 

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

 

 

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: September 28, 2018

 

 

By:

/s/ Mark Breen

 

Mark Breen

 

Chief Financial Officer and Director

(Principal Financial and Accounting Officer)

 

EX-32.1 4 lbuy_ex321.htm CERTIFICATION lbuy_ex321.htm

EXHIBIT 32.1

 

Certification of the Chief Executive Officer pursuant to

18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

In connection with the annual report of Leafbuyer Technologies, Inc. (the “Company”) on Form 10-K for the year ended June 30, 2018, as filed with the Securities and Exchange Commission (the “Report”), I, Kurt Rossner, certify pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

 

1.

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

2.

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Dated: September 28, 2018

    

By:

/s/ Kurt Rossner

 

Kurt Rossner

 

Chief Executive Officer and Chairman (Principal Executive Officer)

 

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and is not being “filed” as part of the Form 10-K or as a separate disclosure document for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liability under that section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act except to the extent that this Exhibit 32.1 is expressly and specifically incorporated by reference in any such filing.

 

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2 5 lbuy_ex322.htm CERTIFICATION lbuy_ex322.htm

EXHIBIT 32.2

 

Certification of the Chief Financial Officer pursuant to

18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

In connection with the annual report of Leafbuyer Technologies, Inc. (the “Company”) on Form 10-K for the year ended June 30, 2018, as filed with the Securities and Exchange Commission (the “Report”), I, Mark Breen, certify pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

 

1.

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

2.

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: September 28, 2018

    

By:

/s/ Mark Breen

 

Mark Breen

 

Chief Financial Officer and Director

 

(Principal Financial and Accounting Officer)

 

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and is not being “filed” as part of the Form 10-K or as a separate disclosure document for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liability under that section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act except to the extent that this Exhibit 32.2 is expressly and specifically incorporated by reference in any such filing.

 

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

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