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 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 has evolved and grown from a listing website (Leafbuyer.com) to a
comprehensive marketing technology platform that focuses on new customer
acquisition, retention and now online-order ahead services. By combining years
of experience in the consumer marketing space and the increased popularity of
The Company's website, Leafbuyer.com, and its progressive web application hosts a robust search algorithm similar to popular travel or hotel sites, where consumers can search the database for appealing offers. They can also search through thousands of menu items and products, create a profile, sign up to receive deal alerts and place online orders for pick up or delivery. 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 monetizes its platform through a combination of monthly subscription fees, sign up credits and certain transaction fees associated with consumer engagement.
The Company continues an aggressive push into all legal cannabis markets. 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.
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 has suffered recurring losses from operations and has a significant accumulated deficit. These factors raise substantial doubt about the Company's 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.
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Comparison of results of operations for the three months ended December 31, 2020
and 2019
Three months Ended
December 31,
2020 2019 Change %
Revenue $ 602,787 $ 805,281 $ (202,494 ) (25 )%
Cost of revenue 487,041 576,611 (89,570 ) (16 )%
Gross profit 115,746 228,670 (112,924 ) (49 )%
Total operating expenses 583,357 1,184,253 (600,896 ) (51 )%
Interest expense 73,260 314,257 (240,997 ) (77 )%
Net loss $ (540,871 ) $ (1,269,840 ) $ (728,969 ) (57 )%
Revenue, Cost of Revenue and Gross Profit
During the three months ended
Gross profit decreased by
The overall focus of the Company is to continue to grow revenue while expanding
the geographic footprint of operations. We will continue to broaden the
Operating Expenses
Three months Ended
December 31,
2020 2019 Change %
Selling expenses $ 230,852 $ 627,578 $ (396,726 ) (63 )%
General and administrative 149,527 267,899 (118,372 ) (44 )%
Wages, payroll taxes and other
employee expenses 101,387 287,274 (185,887 ) (65 )%
Stock based compensation expense 101,591 1,502 100,089 6664 %
$ 583,357 $ 1,184,253 $ (600,896 ) (51 )%
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The decrease in operating expenses during the three months ended
Comparison of results of operations for the six months endedDecember 31, 2020 and 2019 Six months Ended December 31, 2020 2019 Change % Revenue$ 1,255,510 $ 1,295,516 $ (40,006 ) (3 )% Cost of revenue 943,946 1,025,353 (81,407 ) (8 )% Gross profit 311,564 270,163 41,401 15 % Total operating expenses 1,504,238 3,072,853 (1,568,615 ) (51 )% Interest expense 215,231 569,692 (354.461 ) (62 )% Net loss$ (1,407,905 ) $ (3,372,382 ) $ (1,964,477 ) (58 )%
Revenue, Cost of Revenue and Gross Profit
During the six months ended
Gross profit increased to
Operating Expenses
Six months Ended
December 31,
2020 2019 Change %
Selling expenses $ 495,696 $ 1,239,512 $ (743,816 ) (60 )%
General and administrative 379,703 575,869 (196,166 ) (34 )%
Wages, payroll taxes and other
employee expenses 444,317 650,261 (205,944 ) (32 )%
Stock based compensation expense 184,522 607,211 (422,689 ) (70 )%
$ 1,504,238 $ 3,072,853 $ (1,568,615 ) (51 )%
The decrease in operating expenses during the six months ended
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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.
Cash Flows
Our cash flows from operating, investing and financing activities were as
follows:
Six months Ended
December 31,
2020 2019
Net cash used in operating activities
As of
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
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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. For a detailed discussion about the
Company's significant accounting policies, refer to Note 2 - "Summary of
Significant Accounting Policies," in the Company's consolidated financial
statements included in the Company's
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
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.
The Company considered all of the economic factors that may affect its revenues. Because all of its revenues are from cannabis customers, there are no differences in the nature, timing an uncertainty of the Company's revenue and cash flows from any of its product lines.
We recognize revenue upon completion of our performance obligations or
expiration of the contractual time to use services such as bulk texting. The
Company receives payments from its customers based on billing schedules
established in each contract. Up-front payments and fees are recorded as
deferred revenue upon receipt or when due until the Company performs its
obligation under these arrangements. There is no significant judgment performed
by management and revenue recognized from deferred revenue during the six months
ended
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