LEAFBUYER TECHNOLOGIES, INC. Forward Looking Statements
This quarterly report on Form 10-Q 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.
Our unaudited interim condensed consolidated financial statements for the three
and six months ended
The following discussion should be read in conjunction with our interim financial statements and the related notes that appear elsewhere in this quarterly report.
Business Overview Leafbuyer.com Platform
The Company's wholly owned subsidiary,
The site's sophisticated vendor dashboard pairs vendor data with consumer needs and presents a robust, 24/7 real-time dashboard where vendors can update menus, specials, available jobs, and more. The system helps to track the vendors' return on investment.
The Company continues an aggressive push into all legal cannabis markets, including initiating a presence in the Canadian market. Increasing the company's marketing and sales presence in new markets is a primary objective. Along with this expansion, the Company continues to develop new technologies that will serve cannabis dispensaries and product companies in attracting and retaining consumers.
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Comparison of results of operations for the three months endedDecember 31, 2019 and 2018 Three Months Ended December 31, 2019 2018 Change % Sales revenue$ 805,281 $ 419,713 $ 385,568 92 % Total operating expenses 1,760,864 1,960,059 (199,195 ) (10 )% Interest expense (314,257 ) (137,524 ) (176,733 ) 129 % Net loss$ (1,269,840 ) $ (1,677,870 ) $ 408,030 24 %
Sales Revenue, Cost of Revenue and Gross Profit
Revenues increased for the three months ended
Operating Expenses
Three Months Ended December 31,
2019 2018 Change %
Selling expenses $ 111,354 $ 55,079 $ 56,275 102 %
General and
administrative 871,901 824,498 47,403 6 %
Wages, payroll taxes,
commissions and other
employee expenses 776,107 483,189 292,918 61 %
Stock based
compensation expense 1,502 597,293 (595,791 ) (100 )%
$ 1,760,864 $ 1,960,059 $ (199,195 ) (10 )%
The increase in operating expenses during the three months ended
Comparison of results of operations for the six months endedDecember 31, 2019 and 2018 Six Months Ended December 31, 2019 2018 Change % Sales revenue$ 1,295,516 $ 807,230 $ 488,286 60 % Total operating expenses 4,098,206 3,739,381 358,825 10 % Interest expense (569,692 ) (174,622 ) (395,070 ) 226 % Net loss$ (3,372,382 ) $ (3,106,773 ) $ (265,609 ) 9 % 20 Table of Contents
Sales Revenue, Cost of Revenue and Gross Profit
Revenues increased for the six months ended
Operating Expenses
Six Months Ended December 31,
2019 2018 Change %
Selling expenses $ 198,955 $ 130,275 $ 68,680 53 %
General and administrative 1,787,074 1,527,327 259,747 17 %
Wages, payroll taxes,
commissions and other
employee expenses 1,504,966 886,410 618,556 70 %
Stock based compensation
expense 607,211 1,195,369 (588,158 ) (49 )%
$ 4,098,206 $ 3,739,381 $ 358,825 10 %
The increase in operating expenses during the six months ended
Liquidity and Capital Resources
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 unaudited condensed consolidated financial statements with existing cash on hand and/or the private placement of common stock or obtaining debt financing. 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.
At
Cash Flows
Our cash flows from operating, investing and financing activities were as
follows:
Six Months Ended December 31,
2019 2018
Net cash used in operating activities
Working Capital
Working capital is the amount by which current assets exceed current
liabilities. We had negative working capital of
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Inflation
Although our operations are influenced by general economic conditions, we do not
believe that inflation had a material effect on our results of operations during
the six-month period ended
Off-Balance Sheet Arrangements
We had no off-balance sheet arrangements as of
Critical Accounting Estimates
Our condensed consolidated financial statements and accompanying notes have been
prepared in accordance with
Critical Accounting Policies
Our unaudited condensed consolidated interim 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 unaudited interim condensed consolidated 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. Management has carefully considered the recently issued accounting 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.
Use of Estimates
Management uses estimates and assumptions in preparing these condensed 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.
Revenue Recognition
Topic ASC 606 is effective as of the annual reporting period beginning after
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For revenue recognition arrangements that we determine are within the scope of Topic ASC 606, we perform the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. We only apply the five-step model to arrangements that meet the definition of a contract under Topic 606, including when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, we evaluate the goods or services promised within each contract related performance obligation and assess whether each promised good or service is distinct. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.
We recognize revenue upon completion of our performance obligations or expiration of the contractual time to use services such as bulk texting.
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