Description of Business

3 Months Ended

Sep. 30, 2021

Description of Business

Note 1 - Description of Business

Note 1 — Description of Business

Description of Business

The Company 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.

Our subsidiary, LB Media Group, LLC has evolved and grown as a listing website to a comprehensive marketing technology platform. Our clients, medical and recreational dispensaries in legalized cannabis states, along with cannabis product companies subscribe to our technology platform to assist in new customer acquisition and provide retention tools that include texting/loyalty and order ahead technology.

Basis of Presentation

The accompanying condensed consolidated balance sheet as of June 30, 2021, has been derived from audited financial statements. The accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual financial statements being audited and in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. In the opinion of management, such unaudited information includes all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of this interim information. All intercompany transactions have been eliminated in consolidation. Operating results and cash flows for interim periods are not necessarily indicative of results that can be expected for the entire year. The Company uses the same accounting policies in preparing quarterly and annual financial statements. Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted. The information included in this report should be read in conjunction with our audited financial statements and notes thereto.

Going Concern

As of September 30, 2021, we had $568,148 in cash and cash equivalents and a working capital deficit of $6,037,824. We are dependent on funds raised through equity financing. Our cumulative net loss of $21,847,200 was funded by debt and equity financing and we reported a net loss from operations of $588,482 for the three months ended September 30, 2021. Accordingly, there is substantial doubt about our ability to continue as a going concern within one year after the date the financial statements are issued.

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.

Error Correction

Series A & B Shares Outstanding

The Company’s annual financial statements ended June 30, 2020 contained three errors related to the Preferred Stock issued in connection with the March 23, 2017 Merger Agreement.

In accordance with the Merger Agreement, the Company issued 324,327 new pre-split shares of Series A Convertible Preferred Stock and accepted subscriptions in a private placement offering of 27,027 new pre-split shares of the Company’s Series B Convertible Preferred Stock, of which each share of Series B Convertible Preferred Stock is convertible into 16 Common Shares at any time, in the amount of $250,000. 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.

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. The Company incorrectly stated that immediately following the forward split, 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. All references to shares from that point forward were referred to as post-split shares.

This presentation was incorrect because in connection with stock splits by the Company, the certificate of designation for each of the Series A Convertible Preferred Stock and the Series B Convertible Preferred Stock provide for an adjustment to the common stock underlying such shares and not the shares of preferred stock. Therefore, the September30, 2020 Consolidated Statement of Equity and Footnote 4 have been changed to reflect 324,325 shares of Series A issued and outstanding and 7,567 shares of Series B Convertible Preferred Stock issued and outstanding after the conversion of 19,459 shares in January and June of 2018 and June 30, 2019.

Therefore, the Consolidated Balance Sheet, Consolidated Statement of Equity and Footnote 4 have been changed to reflect the Number of shares of Series A and Series B preferred stock and the par value of those shares.

Balance Sheet – September 30, 2020

	As Computed - Restated		As Reported		Effect of Change
Convertible Preferred Stock Series A - Value	$	324	$	3,000	$	(2,676	)
Convertible Preferred Stock Series B - Value	$	8	$	1,120	$	(1,112	)
Additional Paid in Capital	$	16,577,266	$	16,581,054	$	3,788
Convertible Preferred Stock Series A - Shares		324,325		3,000,000		(2,675,675	)
Convertible Preferred Stock Series B - Shares		7,567		1,120,000		(1,112,433	)

Series A convertible feature not accounted properly

The Series A Preferred Shares are convertible into a number of shares of Common Stock so that the holders of Series A Convertible Preferred Stock would hold 55% of the number of outstanding shares of Common Stock on a fully diluted basis after giving effect to such conversion. The Series A Convertible Preferred Stock vote on an “as-converted” basis.

The Company has determined that the Series A Preferred Stock conversion provisions meet the accounting requirements of FASB ASC 815 which requires a bifurcation of an embedded conversion feature and classification of the derivative as a liability on the balance sheet at the end of each reporting period. The fair value of the derivative liability is estimated each period as a Level 3 – Significant Unobservable Inputs based upon the numbers of common shares stock at an estimated conversion price.

The following table represents the value of the derivative and number of shares of common stock issuable for the holders to obtain 55% of the number of outstanding shares of common stock:

Balance Sheet – September 30, 2020

	As Computed - Restated			As Reported			Effect of Change
Derivative liability	$	2,853,364		$	-		$	2,853,364
Total current liabilities	$	6,228,756		$	3,375,392		$	2,853,364
Total liabilities	$	7,360,402		$	4,507,038		$	2,853,364
Accumulated deficit	$	19,721,522		$	16,868,158		$	2,853,364
Total equity (deficit)	$	(3,053,667	)	$	(200,303	)	$	(2,853,364	)

Income Statement – September 30, 2020

	As Computed - Restated		As Reported			Effect of Change
Unrealized gain(loss) on derivative	$	922,314	$	-		$	922,314
Other income/ (expense)	$	780,343	$	(141,971	)	$	922,314
Net (loss) income	$	55,280	$	(867,034	)	$	922,314
Earnings (loss) per share - Basic	$	0.00	$	(0.01	)	$	0.09
Earnings (loss) per share - Basic	$	0.00	$	(0.01	)	$	0.08

Statement of Cash Flow – September 30, 2020

	As Computed - Restated			As Reported		Effect of Change
Net (loss) income	$	55,280		$	867,034	$	922,314
Loss (gain) on derivative liability	$	(922,314	)	$	-	$	(922,314	)

Statement of Equity –September 30,2020

	As Computed - Restated			As Reported			Effect of Change
September 30, 2020 – Accumulated Deficit	$	(19,721,522	)	$	(16,868,158	)	$	(2,853,364	)

Fully Diluted shares exceed Authorized Shares

The Company has determined that as of September 30, 2020 the Series A Preferred stock would be convertible into 111,942,356 shares of common stock which would result in 243,077,076 shares of fully diluted common shares. The Company had authorized to issue 150,000,000 shares as of September 30, 2020. This exceeded the authorized and outstanding shares by 93,077,076 shares and therefore in accordance with ASR 268 the Company needs to present the Series A Convertible Preferred Stock separate from Stockholders Equity on the Balance Sheet and in the footnote disclosure. The Company has elected to not to present the Series A Convertible Preferred Stock separate as a mezzanine equity in accordance with ASR 268 because in October 2021 the Series A 55% feature no longer existed and this classification would be temporary and moved backed to permanent equity.