LBUY 10-Q Quarterly Report March 31, 2021

LEAFBUYER TECHNOLOGIES, INC.

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10-Q 1 lbuy_10q.htm FORM 10-Q lbuy_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2021

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

For the transition period from ______________________ to ______________________

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, Zip Code)

Registrant’s telephone number, including area code (720)-235-0099

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of Each Class	Trading Symbol(s)	Name of each exchange on which registered
None	None	None

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, 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 ☒ No ☐

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	☒
		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 ☒

The number of shares of outstanding of the Registrant’s Common Stock as of May 13, 2021 was 88,814,587

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PART I – FINANCIAL INFORMATION

Item 1.	Interim Condensed Consolidated Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22
Item 4.	Controls and Procedures	22

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3.	Defaults Upon Senior Securities	23
Item 4.	Mine Safety Disclosures	23
Item 5.	Other Information	23
Item 6.	Exhibits	24
	SIGNATURES	25

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PART I – FINANCIAL INFORMATION

Item 1. Interim Condensed Consolidated Financial Statements

The unaudited interim condensed consolidated financial statements of Leafbuyer Technologies, Inc. (“we”, “our”, “us”, the “Company”) follow. All currency references in this report are to US dollars unless otherwise noted.

PART I. Financial Information

Item 1. Financial Statements

LEAFBUYER TECHNOLOGIES INC.
UNAUDITED CONDENSED CONSOLDIATED BALANCE SHEETS

	March 31, 2021			June 30, 2020

ASSETS
Current assets:
Cash and cash equivalents	$	844,860		$	1,309,912
Accounts receivable (net of allowance for doubtful accounts of $22,985 and $14,037, respectively,)		33,630			14,037
Inventory		622			622
Prepaid expenses and other current assets		40,377			87,895
Total current assets		919,489			1,412,466
Noncurrent assets:
Fixed assets, net		2,855,036			3,398,370
Right of use assets		-			165,965
Total assets	$	3,774,525		$	4,976,801

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	189,566		$	487,890
Accrued liabilities		866,189			413,314
Deferred revenue		63,987			117,904
Lease obligation, current		-			103,049
Debt, current		1,575,125			2,134,487
Total current liabilities		2,694,867			3,256,644

Debt, net of current portion		1,057,977			1,102,478
Lease obligation, net of current portion		-			65,149
Total liabilities		3,752,844			4,424,271

Commitments and contingencies (Note 6)		-			-

Stockholders’ Equity (Deficit):
Preferred stock Series A, $0.001 par value; 5,000,000 shares authorized; 3,000,000 and 3,000,000 shares issued and outstanding for class A convertible preferred stock at March 31, 2021 and June 30, 2020, respectively		3,000			3,000
Preferred stock Series B, $0.001 par value; 5,000,000 shares authorized; 1,120,000 and 1,120,000 shares issued and outstanding for class B convertible preferred stock at March 31, 2021 and June 30, 2020, respectively		1,120			1,120
Common stock, $0.001 par value; 150,000,000 shares authorized; 88,395,553 shares issued and outstanding at March 31, 2021 and 81,772,802 shares issued and outstanding at June 30, 2020		88,396			81,773
Additional paid in capital		17,236,721			16,467,761
Accumulated deficit		(17,307,556	)		(16,001,124	)
Total stockholders’ equity		21,681			552,530
Total liabilities and stockholders’ equity (deficit)	$	3,774,525		$	4,976,801

See accompanying notes to condensed consolidated financial statements.

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LEAFBUYER TECHNOLOGIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	Three Months Ended March 31,						Nine Months Ended March 31,
	2021			2020			2021			2020

Revenue	$	672,149		$	575,002		$	1,927,659		$	1,870,518
Cost of revenue		500,818			448,961			1,443,678			1,474,314
Gross profit		171,331			126,041			483,981			396,204

Operating expenses:
Selling expenses		153,094			424,858			648,790			1,664,370
General and administrative		125,602			185,476			505,305			761,346
Personnel expenses		185,352			339,859			630,755			990,120
Stock based compensation expense		136,685			105,116			321,207			712,326
Total operating expenses		600,732			1,055,309			2,106,056			4,128,162

Loss from operations		(429,401	)		(929,268	)		(1,622,075	)		(3,731,958	)

Interest expense		(71,604	)		(106,783	)		(286,835	)		(676,475	)
Forgiveness of PPP loan		602,478			-			602,478			-

Net profit (loss)	$	101,473		$	(1,036,051	)	$	(1,306,432	)	$	(4,408,433	)

Net loss per common share:
Basic and diluted	$	0.00		$	(0.01	)	$	(0.02	)	$	(0.06	)

Weighted average common shares outstanding:
Basic and diluted		83,805,363			81,257,802			83,600,897			75,146,637

See accompanying notes to condensed consolidated financial statements

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LEAFBUYER TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

(Unaudited)

	Preferred Stock A				Preferred Stock B				Common Stock
	# of Shares		Amount		# of Shares		Amount		# of Shares		Amount		APIC		Acc Deficit			Total
Balance, June 30, 2020		3,000,000	$	3,000		1,120,000	$	1,120		81,772,802	$	81,773	$	16,467,761	$	(16,001,124	)	$	552,530

Stock based compensation		-		-		-		-		-		-		54,123		-			54,123

Issuance of common stock for vendor payments		-		-		-		-		433,077		433		30,837		-			31,270

Issuance of common stock as employee compensation		-		-		-		-		475,365		475		28,333		-			28,808

Net loss		-		-		-		-		-		-		-		(867,034	)		(867,034	)

Balance, September 30, 2020		3,000,000	$	3,000		1,120,000	$	1,120		82,681,244	$	82,681	$	16,581,054	$	(16,868,158	)	$	(200,303	)

Stock based compensation		-		-		-		-		-		-		33,437		-			33,437

Issuance of common stock for vendor payments		-		-		-		-		596,428		597		40,113		-			40,710

Issuance of common stock as employee compensation		-		-		-		-		649,467		649		67,505		-			68,154

Net loss		-		-		-		-		-		-		-		(540,871	)		(540,871	)

Balance, December 31, 2020		3,000,000	$	3,000		1,120,000	$	1,120		83,927,139	$	83,927	$	16,722,109	$	(17,409,029	)	$	(598,873	)

Stock based compensation		-		-		-		-		-		-		113,910		-			113,910

Issuance of common stock for conversion of debt		-		-		-		-		4,000,000		4,000		296,000		-			300,000

Issuance of common stock for vendor payments and board members		-		-		-		-		373,413		373		82,022		-			82,395

Issuance of common stock as employee compensation		-		-		-		-		95,001		95		22,680		-			22,775

Net loss		-		-		-		-		-		-		-		101,473			101,473

Balance, March 31, 2021		3,000,000	$	3,000		1,120,000	$	1,120		88,395,553	$	88,396	$	17,236,721	$	(17,307,556	)	$	21,681

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	Preferred Stock A				Preferred Stock B				Common Stock
	# of Shares		Amount		# of Shares		Amount		# of Shares		Amount		APIC		Acc Deficit			Total
Balance, June 30, 2019		3,000,000	$	3,000		1,120,000	$	1,120		47,914,967	$	47,915	$	11,076,165	$	(10,491,876	)	$	636,324

Stock based compensation		-		-		-		-		-		-		605,709		-			605,709

Issuance of common stock for cash		-		-		-		-		30,299,998		30,300		4,007,588		-			4,037,888

Issuance of common stock in settlement of acquisition		-		-		-		-		366,667		367		262,133		-			262,500

Net loss		-		-		-		-		-		-		-		(2,102,542	)		(2,102,542	)

Balance, September 30, 2019		3,000,000	$	3,000		1,120,000	$	1,120		78,581,632	$	78,582	$	15,951,595	$	(12,594,418	)	$	3,439,879

Stock based compensation		-		-		-		-		-		-		1,502		-			1,502

Net loss		-		-		-		-		-		-		-		(1,269,840	)		(1,269,840	)

Balance, December 31, 2019		3,000,000	$	3,000		1,120,000	$	1,120		78,581,632	$	78,582	$	15,953,097	$	(13,864,258	)	$	2,171,541

Stock based compensation		-		-		-		-		-		-		1,502		-			1,502

Issuance of common stock for conversion of debt		-		-		-		-		1,815,220		1,815		129,185		-			131,000

Issuance of common stock as employee compensation		-		-		-		-		860,950		861		102,753		-			103,614

Net loss		-		-		-		-		-		-		-		(1,036,051	)		(1,036,051	)

Balance, March 31, 2020		3,000,000	$	3,000		1,120,000	$	1,120		81,257,802	$	81,258	$	16,186,537	$	(14,900,309	)	$	1,371,606

See accompanying notes to condensed consolidated financial statements.

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LEAFBUYER TECHNOLOGIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)

	Nine Months Ended March 31,
	2021			2020
Cash flows from operating activities:
Net loss	$	(1,306,432	)	$	(4,408,433	)
Adjustments to reconcile net income to net cash used in operating activities:
Stock based compensation		321,207			712,327
Stock issued for services		154,376			-
Forgiveness of PPP loan		(602,478	)
Amortization of note payable discount		65,638			206,459
Depreciation and amortization		543,334			514,360
Changes in assets and liabilities:					-
Accounts receivable		(19,593	)		38,879
Inventory		-			608
Prepaid expenses and other		47,518			(8,197	)
Other assets		(2,233	)		11,864
Accounts payable		(298,324	)		174,619
Accrued liabilities		398,958			(39,567	)
Net cash used in operating activities		(698,029	)		(2,797,081	)

Cash flows from investing activities:
Capitalized software		-			(492,899	)
Net cash used in investing activities		-			(492,899	)

Cash flows from financing activities:
Proceeds from issuance of stock		-			4,037,888
Repayment of debt		(325,000	)		(286,899	)
Proceeds from issuance of PPP loan		557,977			-
Net cash provided by financing activities		232,977			3,750,989

Net change in cash and cash equivalents		(465,052	)		461,009
Cash and cash equivalents, beginning of period		1,309,912			181,647
Cash and cash equivalents, end of period	$	844,860		$	642,656

Cash paid for interest	$	-		$	8,619
Cash paid for taxes	$	-		$	-
Supplemental information for non-cash investing and financing activities:
Issuance of common stock for vendor payments and board of director services	$	154,376		$	-
Issuance of common stock for conversion of notes payable and accrued interest	$	300,000		$	131,000

See accompanying notes to condensed consolidated financial statements.

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LEAFBUYER TECHNOLOGIES INC.

Notes to Unaudited Condensed Consolidated Financial Statements

Note 1 — Description of Business

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

Description of Business

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 Leafbuyer’s texting/loyalty program, Leafbuyer has developed a diverse product offering with a distinct competitive advantage. Through proprietary technology, dispensary owners can leverage SMS and MMS messaging to connect customers directly to loyalty and rewards programs as well as the ability to confirm online orders for either pickup or delivery. Leafbuyer has also developed technology designed to attract new dispensary customers to become part of loyalty and rewards programs.

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.

Basis of Presentation

The accompanying condensed consolidated balance sheet as of June 30, 2020, 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.

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Going Concern

As of March 31, 2021 we had $844,860 in cash and cash equivalents and a working capital deficit of $1,775,378. We are dependent on funds raised through equity financing. Our cumulative net loss of $17,307,556 was funded by debt and equity financing and we reported a net loss of $1,306,432 for the nine months ended March 31, 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.

Note 2 — Summary of Significant Accounting Policies

Significant Accounting Policies

Principles of Consolidation

The condensed 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.

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 June 30, 2020 Form 10-K. During the nine months ended March 31, 2021, there were no significant changes made to the Company’s significant accounting policies.

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. Examples of estimates include loss contingencies; useful lives of our tangible and intangible assets; allowances for doubtful accounts; and stock-based compensation forfeiture rates. Examples of assumptions include: the elements comprising a software arrangement, including the distinction between upgrades or enhancements and new products; when technological feasibility is achieved for our products; the potential outcome of future tax consequences of events that have been recognized in our financial statements or tax returns. Actual results could differ from those estimates.

Reclassifications

Certain prior period amounts have been reclassified to conform with the current period presentation. The Cost of sales presented on the unaudited Consolidated Statements of Operations was included in prior presentations as operating expenses such as personnel expenses and general and administration. For the three months ended March 31, 2021 $395,421 of the cost of sales came from personnel expense and $53,541 of cost of sales came from general and administrative expense. For the nine months ended March 31, 2021 $1,250,126 of cost of sales came from personnel expense and $224,188 of cost of sales came from general and administrative expense.

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Recently Issued Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), which introduces new guidance for the accounting for credit losses on instruments within its scope. The new guidance introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. It also modifies the impairment model for available-for-sale (AFS) debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The pronouncement will be effective for public business entities that are SEC filers in fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The effect of the adoption of this pronouncement to the Company was immaterial.

In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s own Equity (Subtopic 815-40). ASU 2020-06 requires entities to provide expanded disclosures about the terms and features of convertible instruments and reduces the number of accounting models for convertible instruments and allows more contracts to qualify for equity classification. The pronouncement will be effective for public business entities that are SEC filers in fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted but no earlier than fiscal years beginning December 15, 2020.

No other recent accounting pronouncements were issued by FASB and the SEC that are believed by management to have a material impact on the Company’s present or future condensed consolidated financial statements.

Note 3 — Property and Equipment

Property and equipment consist of the following:

	March 31, 2021			June 30, 2020

Software platform	$	4,482,225		$	4,482,225
Furniture and fixtures		1,500			1,500
Less accumulated depreciation and amortization		(1,628,689	)		(1,085,355	)
Property and equipment, net	$	2,855,036		$	3,398,370

On November 6, 2018, the Company acquired a customer facing software (“Loyalty Software”) through a Stock Purchase Agreement, where the Company acquired all the issued and outstanding capital stock of Greenlight Technologies, Inc. (“GTI”) from its shareholders. At the time of the transaction, there were no employees working for GTI, no systems and no assets, other than the Loyalty Software. GTI’s legal entity was dissolved in the transition and the Loyalty Software was assumed by the Company. Management determined that the purchase of GTI did not constitute a business purchase and recorded the transaction as a purchase of software. The consideration for the Loyalty Software was 2,916,667 shares of common stock, par value $0.001 per share and cash of approximately $450,000. Total value of the Loyalty Software was estimated at approximately $3,010,000. The additional consideration for future developments will be evaluated and considered enhancements which will either be capitalized to the software or expensed as research and development costs. During the year ended June 30, 2020 additional Incentive Shares of 366,667 for a value of $262,500 was issued to shareholders of GTI as final settlement of the 2018 agreement. During the nine months ended March 31, 2021 there was no software capitalized and for the same period ended 2020, the Company capitalized approximately $492,899 of software enhancements.

GTI provides cannabis consumers real-time mobile ordering and loyalty rewards through an internally developed application that integrates with the local dispensary’s point of sale system. The Company plans to fully integrate this technology into the current platform and create an “Ultimate Bundle” of services for the cannabis industry.

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Amortization expense, recorded as cost of revenue, related to internal use software totaled $543,334 during the nine months ended March 31, 2021 and for the same period ended 2020 amortization expenses was $514,360. Amortization expense for the next five years is as follows:

2021	$	724,445
2022		724,445
2023		724,445
2024		622,359
2025		59,342
Total Unamortized Expense	$	2,855,036

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 March 31, 2021. In addition, the Company has 10,000,000 shares of preferred stock authorized with a par value of $0.001 per share as of March 31, 2021 of which 3,000,000 shares of preferred stock are designated as Series A Preferred Shares, all of which were issued and outstanding as of March 31, 2021 and 1,120,000 shares of preferred stock are designated as Series B Preferred Shares, all of which were issued and outstanding as of March 31, 2021.

The Series A Preferred Shares currently outstanding are convertible into the greater of one share of Common Stock or a number of shares of Common Stock so that the Series A holders would hold 55% of the number of outstanding shares of Common Stock. The Series A Shares vote on an “as-converted” basis. Series A Convertible Preferred Stock was originally convertible into 3,000,000 common shares based on the total outstanding equity as of March 23, 2017. As of March 31, 2021, the Series A Convertible Preferred Stock would be convertible into approximately 113,985,000 common shares, based on 140,331,966 fully diluted common shares outstanding as of March 31, 2021.

Issuance of Common Stock

During the nine months ended March 31, 2021, the Company issued 4,000,000 shares of Common Stock to Note Payable Holders as satisfaction of principal obligations. These shares were valued at fair market value of $300,000.

During the nine months ended March 31, 2021 the Company issued 1,219,833 shares of Common Stock to employees. These shares were valued at fair market value of $119,737 and expensed in the accompanying Condensed Consolidated Statement of Operations.

During the nine months ended March 31, 2021, the Company issued 1,340,630 and 62,288 shares of Common Stock respectively to vendors and non-management members of the board of directors for services rendered. These shares were valued at fair market value of $154,376 and expensed in the accompanying Condensed Consolidated Statement of Operations.

During the nine months ended March 31, 2020, the Company issued 860,950 shares of Common Stock to employees. These shares were valued at fair market value of $105,116 and expensed in the accompanying Condensed Consolidated Statement of Operations.

During the nine months ended March 31, 2020, the Company issued 1,815,220 shares of Common Stock to Note Payable Holders as satisfaction of these obligations. These shares were valued at fair market value of $131,000.

During the nine months ended March 31, 2020 the Company issued 366,667 shares of Common Stock valued at $262,500 to shareholders of GTI as final settlement of the 2018 agreement. See Footnote 3.

During the nine months ended March 31, 2020, the Company issued 30,299,998 shares of common stock pursuant to the Purchase Agreement and received $4,037,888.

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Note 5 — Debt

During February 2018, the Company issued a promissory note in favor of 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. In March 2019, the loan maturity date was extended to August 8, 2019, the discount is fully amortized and total unpaid principal and interest is approximately $206,515, accruing at 12% at March 31, 2021, and is payable upon demand.

On September 21, 2018, the Company entered into a promissory note with an investor of the Company with a face value of $440,000 in exchange for a $400,000 cash payment (“Convertible Note”). The discount of the Convertible Note will be amortized over the life of the Convertible Note and have an interest rate of 10%. The Convertible Note has a twelve-month term with no payment required for the initial six months; after six months, the Company will repay the investors interest and principal in six equal installments. The principal 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 Convertible Note, the interest is increased to 12% and at the investors’ option, the principal 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 200,000 common shares of the Company at a price of $0.75 per share. The value assigned to the warrants of $125,723 has been fully amortized. The cash for this Convertible Note was received prior to September 30, 2018. As of March 31, 2021, the Convertible Note is payable upon demand and total unpaid principal and interest outstanding is approximately $568,311.

On September 21, 2018, the Company entered into several promissory notes with various investors of the Company with an aggregate face value of $440,000 in exchange for $440,000 cash payment (“the 2018 Notes”), the discount of the Notes will be amortized over the life of the Note and have an interest rate of 10%. The 2018 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 principal in six equal installments. The principal 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 2018 Notes, the interest is increased to 12% and at the investors’ option, the principal and interest can be converted into the Company common stock at a 20% discount to the then current market price. In addition, the Company issued five-year warrants to purchase up to 200,000 of the Company’s common shares at a price of $0.75 per share. The cash for the 2018 Notes was received prior to September 30, 2018. The value assigned to the warrants of $62,862 has been fully amortized. In March 2020, $220,000 of the 2018 Notes have been fully extinguished and the remaining $220,000 is in default and payable upon demand. As of March 31, 2021, the total unpaid principal and interest is approximately $284,156.

During the year ended June 30, 2019, the Company entered into several promissory notes with various investors of the Company with an aggregate face value of $960,000 in exchange for a total of $900,000 cash payments (“the 2019 Notes”). The 2019 Notes have a beneficial conversion feature valued at $839,378, which is recorded as a discount. The total discount on the Notes will be amortized over the life of the 2019 Notes and recorded as interest expense. The notes have an interest rate of 7% and have an eighteen-month term with no payment required for the initial six months; after six months, the Company will repay the investors interest and principal in twelve equal installments. The principal and interest of the note is convertible into the Company’s common stock at a purchase price of $0.75 per common share at any time after the Original Issue Date. If the Company defaults on the Notes, the interest is increased to 15% and at the investors’ option, the principal and interest can be converted into the Company common stock at a 20% discount to the then current market price. The beneficial ownership value assigned to the conversion feature of $801,741 has been fully amortized. As of March 31, 2020, $533,000 of the 2019 Notes have been fully extinguished as $402,000 of debt repayment and the issuance of common stock valued at $131,000. On January 25, 2021, $300,000 of the 2019 Notes have been fully extinguished with the issuance of 4,000,000 of common stock at a price of $0.075 per share. The remaining principal of $90,124 is in default and payable upon demand. As of March 31, 2021, the total unpaid principal and interest is approximately $150,407.

In March 2020, the Company entered into a promissory note with a related party (see Note 9) with a face value of $600,000 in exchange for a total of $565,000 cash payments. The total discount of the Note will be amortized over the life of the Note and recorded as interest expense which matured on December 1, 2020. In January 2021, the Company repaid $300,000 of the promissory note balance. The note is in default and due upon demand and the interest rate was increased to 12%. As of March 31, 2021, the total unpaid principal and interest is approximately $349,841.

In March 2020, the Company entered into a promissory note with a related party (see Note 9) with a face value of $50,000. In January 2021, the Company repaid $25,000 of the promissory note balance. The note is in default and the interest rate increased to 12%. As of March 31, 2021, the total unpaid principal and interest is approximately $29,137.

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On April 30, 2020 the Company executed the standard loan documents required for securing a loan (the “EIDL Loan”) from the United States Small Business Administration (the “SBA”) under its Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of the COVID-19 pandemic on the Company’s business. The principal amount of the EIDL Loan is $500,000, with proceeds to be used for working capital purposes. Interest on the EIDL Loan accrues at the rate of 3.75% per annum and installment payments, including principal and interest, are due monthly beginning twelve months from the date of the EIDL Loan in the amount of $2,437 The balance of principal and interest is payable thirty years from the date of the promissory note.

On May 29, 2020, the Company was granted a loan from American Express National Bank in the aggregate amount of $602,478, pursuant to the Paycheck Protection Program (“PPP) under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The Loan which was in the form of a Note dated May 29, 2020, matures on May 29, 2022 and bears interest at a rate of 1.00% per annum, payable monthly commencing on December 29, 2020. The Note may be prepaid by the Borrower at any time prior to maturity with no prepayment penalties. Funds from the Loan may only be used for payroll costs, costs used to continue group health care benefits, rent, utilities and interest on other debt obligations incurred before February 15, 2020. The Company intends to use the entire Loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. While the Company currently believes that its use of the loan proceeds will meet the conditions for forgiveness of the loan, it cannot be assured that the Company will be ineligible for forgiveness of the loan, in whole or in part. On January 5, 2021 the Company was notified by American Express National Bank that the United States Small Business Administration has approved our Loan Forgiveness Application and the loan has been closed. The Company realized other income from the forgiveness of the PPP loan in the Condensed Consolidated Statement of Operations for the three months ended March 30, 2021.

On March 30, 2021, the Company was granted a loan from American Express National Bank in the aggregate amount of $557,977, pursuant to the Paycheck Protection Program (“PPP) under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The Loan which was in the form of a Note dated March 30, 2021, matures on March 30, 2023 and bears interest at a rate of 1.00% per annum, payable monthly commencing on March 30, 2022. The Note may be prepaid by the Borrower at any time prior to maturity with no prepayment penalties. Funds from the Loan may only be used for payroll costs, costs used to continue group health care benefits, rent, utilities and interest on other debt obligations incurred before February 15, 2020. The Company intends to use the entire Loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. While the Company currently believes that its use of the loan proceeds will meet the conditions for forgiveness of the loan, it cannot be assured that the Company will be ineligible for forgiveness of the loan, in whole or in part.

The Company recognized $71,604 and $286,835 of interest expense for the three and nine months ended March 31, 2021 and $106,400 and $676,092 of interest expense for the three and nine months ended March 31, 2020. As of March 31, 2021 and June 30, 2020, accrued interest on the above notes was $382,645 and $117,816, respectively.

Notes payable and long-term debt outstanding as of March 31, 2021 and June 30, 2020 are summarized below:

	Maturity Date	March 31, 2021		June 30, 2020
12% $150,000 Convertible Note Payable, net of unamortized discount of $0 and $0, respectively	Due on Demand	$	150,000	$	150,000
12% $440,000 Convertible Note Payable, net of unamortized discount of $0 and $0, respectively	Due on Demand		440,000		440,000
12% $220,000 Convertible Note Payable, net of unamortized discount of $0 and $0, respectively	Due on Demand		220,000		220,000
7% $426,667 Convertible Note Payable, net of unamortized discount of $0 and $35,866. respectively	Due on Demand		-		182,326
7% $213,333 Convertible Note Payable, net of unamortized discount of $0 and $28,492, respectively	Due on Demand		90,125		164,072
12% Note Payable, net of unamortized discount of $0 and $21,911, respectively – See Footnote 9	Due on Demand		300,000		578,089
12% Note Payable – See Footnote 9	Due on Demand		25,000		50,000
5% Note Payable	Due on Demand (1)		350,000		350,000
1% PPP Note Payable; Loan forgiveness granted on January 5, 2021	May 29, 2022		-		602,478
3.75% SBA EIDL Note Payable	April 30, 2050		500,000		500,000
1% PPP Note Payable	March 30, 2023		557,977		-
Total notes payable			2,633,102		3,236,965
Less current portion of notes payable			1,575,125		2,134,487
Notes payable, Non-current portion		$	1,057,977	$	1,102,478

⁽¹⁾ The Company entered two promissory notes with an investor of the Company in the amount of $350,000. The investor had agreed to convert the loan into 437,500 shares of common stock in 2018. The Company has not issued these shares to the investor and booked the notes as a short-term loan. This loan is considered payable upon demand.

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Note 6 — Commitments and Contingencies

The Company records tax contingencies when the exposure item becomes probable and reasonably estimable. As of March 31, 2021, the Company had a tax contingency related to stock options granted below the fair market value on date of grant. The Company is in the process of determining the possible exposure and necessary expense accrual for the related tax, penalties and interest. Management has not been able to determine the amount as of the date of this report, however, does not expect the amount to be material to the financial statements.

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

Note 7 —Risks and Uncertainties

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

The Company operates in a rapidly evolving and highly regulated industry and will only conduct business in states where cannabis has been legalized.

The Company was affected in March by the COVID-19 outbreak and worldwide pandemic. The Company saw some postponements in orders in the first few weeks March 2020 but by the end of March 2020 orders stabilized to a normal level.

Note 8 — Stock Based Compensation

The equity incentive plan of the Company was established in February of 2017 and was amended and restated on April 14, 2020. 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 20,000,000. The options are exercisable for a period of up to 10 years from the date of the grant. The number of shares authorized to be issued under the equity incentive plan was increased from 10,000,000 to 20,000,000 through a consent of stockholders to amend and restate the equity incentive plan.

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The following table reflects the continuity of stock options for the nine months ended March 31, 2021:

A summary of stock option activity is as follows:

Number of options outstanding:
July 1, 2020		12,558,375
Granted		5,754,124
Forfeited / exchanged / modification		(5,952,000	)

March 31, 2021		12,360,499
Aggregate Intrinsic Value at March 31, 2021	$	222,126

Number of options exercisable at end of period		3,645,494
Number of options available for grant at end of period		4,957,288

Weighted average option prices per share:
Granted during the period	$	0.14
Exercised during the period	$	0.00
Terminated during the period	$	0.08
Outstanding at end of period	$	0.10
Exercisable at end of period	$	0.08

The average fair value of stock options granted was estimated to be $0.14 per share for the period ended March 31, 2021. This estimate was made using the Black-Scholes option pricing model and the following weighted average assumptions:

	2020

Expected option life (years)		2 - 4
Expected stock price volatility		227 to 250	%
Expected dividend yield		—
Risk-free interest rate		0.44 to 0.54	%

Stock-based compensation expense attributable to stock options was approximately $201,470 for the nine months ended March 31, 2021. As of March 31, 2021, there was approximately $967,396 of unrecognized compensation expense related to 12,360,499 unvested stock options outstanding, and the weighted average vesting period for those options was 3 years.

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Warrants

At March 31, 2021, the Company had outstanding warrants to purchase the Company’s common stock which were issued in connection with multiple financing arrangements. Information relating to these warrants is summarized as follows:

Warrants	Remaining Number Outstanding		Weighted Average Remaining Life (Years)		Weighted Average Exercise Price
Warrants-Financing		86,957		2.05	$	1.15
Warrants-Issued with Convertible Notes		600,000		2.48	$	0.75
Warrants - Financing		360,577		3.27	$	0.78
Warrants A – Financing		28,072,364		3.27	$	0.16
Total		29,119,898		3.25	$	0.18
Aggregate Intrinsic Value at March 31, 2021	$	-

Note 9 — Related Party Transactions

In March 2020, the Company entered into a promissory note with the Chief Executive Officer for $600,000 in exchange for a total of a $565,000 cash payment. The note matured in December 2020 and $300,000 of principal payments have been made to date. The note is in default and due upon demand and the interest rate was increased to 12%.

In March 2020, the Company entered into a promissory note with the Chief Technology Officer for $50,000. The note matured on January 1, 2021 and $25,000 of principal payments have been made to date. The note is in default and due upon demand and the interest rate was increased to 12%.

Note 10 — Leases

On January 1, 2021 the Company extended its Denver Colorado headquarter lease for 12 months through December 31, 2021. During the past year a majority of the Company’s employee have been working remotely and the Company does not know if they will continue to keep this location or relocate to a small facility. Therefore, in accordance with ASC 842 the Company will not record an operating right of use asset and operating lease liability because of the short term nature of this amendment. The Company will recognize lease expense on a monthly basis through the life of this lease of approximately $51,786.

During the three months ended March 31,2021 the Company ceased to use its Los Angles sales office and vacated the real estate. As a result, the Company wrote off the right of use asset of $91,316. The company had an operating use liability of $94,098 with respect to the lease. During this same period, the Company completed negotiations with the landlord to settle the remaining amounts due of $86,970 for a cash payment of $25,000. The Company recorded a gain of $61,970 in the consolidated statements of operations for the settlement of the operating lease.

Note 11 — Subsequent Events

The Company has evaluated subsequent events through May 17, 2021 and has not identified any items requiring additional disclosure.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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 nine months ended March 31, 2021 are expressed in US dollars and are prepared in accordance with generally accepted accounting principles in the United States of America. They reflect all adjustments (all of which are normal and recurring in nature) that, in the opinion of management, are necessary for fair presentation of our interim financial information. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any subsequent quarter or for our fiscal year ending June 30, 2021. Our unaudited consolidated financial statements and notes included therein have been prepared on a basis consistent with and should be read in conjunction with our audited financial statements and notes for the year ended June 30, 2020, as filed in our annual report on Form 10-K.

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 continues an aggressive push into all states where cannabis has been legalized. 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.

Leafbuyer operates in a rapidly evolving and highly regulated industry that, as has been estimated by grandviewresearch.com, to exceed $73 billion in revenue by the year 2027. The founders and board of directors has been, and will continue to be, aggressive in pursuing long-term opportunities.

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 March 31, 2021 and 2020

	Three months Ended March 31,
	2021		2020			Change			%
Revenue	$	672,149	$	575,002		$	97,147			17	%
Cost of revenue		500,818		448,961			51,857			12	%
Gross profit		171,331		126,041			45,290			36	%

Total operating expenses		600,732		1,055,309			(454,578	)		(43	)%

Other income/(expense)		530,874		(106,783	)		637,657			(597	)%

Net profit/(loss)	$	101,473	$	(1,036,051	)	$	1,137,525			(110	)%

Revenue, Cost of Revenue and Gross Profit

During the three months ended March 31, 2021, we generated $672,149 of revenues, compared to revenues of $575,002 during the same period ending in 2020. The increase of $97,147 was primarily because of the increase in MRR (monthly recurring revenue) contribution. 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.

Cost of revenue is comprised of software development costs from staff and third-party providers, third-party text provider services and amortization costs related to internal use software. During the three months ended March 31, 2021 compared to the same period in the prior year, third-party text provider services were higher because of the increased number of customers subscribing to this service.

Gross profit increased by $45,290 for the three months ended March 31, 2021 primarily because of the increased subscription services for loyalty programs. Gross profit as a percentage of revenue increased from 22% to 25% for the three months ended March 31, 2021 over March 31, 2020.

Other income during the period ending March 31, 2021 was the result of the SBA PPP loan forgiveness of $602,478, offset by recurring interest expense.

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 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.

Operating Expenses

	Three months Ended March 31,
	2021		2020		Change			%
Selling expenses	$	153,094	$	424,858	$	(271,764	)		(64	)%
General and administrative		125,602		185,476		(59,875	)		(32	)%
Wages, payroll taxes and other employee expenses		185,352		339,859		(154,507	)		(45	)%
Stock based compensation expense		136,685		105,116		31,569			30	%
	$	600,732	$	1,055,309	$	(454,578	)		(43	)%

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The decrease in operating expenses during the three months ended March 31, 2021 compared to 2020 was driven by a reduction in selling and advertising expense as well as less wages and payroll expense. Management expects the general and administrative expenses to continue to decrease as management focuses on getting current operations to positive cash flow.

Comparison of results of operations for the nine months ended March 31, 2021 and 2020

	Nine months Ended March 31,
	2021			2020			Change			%
Revenue	$	1,927,659		$	1,870,518		$	57,141			3	%
Cost of revenue		1,443,678			1,474,314			(30,636	)		(2	)%
Gross profit		483,981			396,204			87,777			22	%

Total operating expenses		2,106,056			4,128,162			(2,022,106	)		(49	)%

Other income/(expense)		315,643			(676,475	)		992,118			147	%

Net loss	$	(1,306,432	)	$	(4,408,433	)	$	3,102,001			70	%

Revenue, Cost of Revenue and Gross Profit

During the nine months ended March 31, 2021, we generated $1,927,659 of revenues, compared to revenues of $1,870,518 during the same period ending in 2020. In December 2019, the Company recognized revenue of $182,008 related to the SWCH Tradeshow, excluding this onetime event, revenue increased for this period by $239,149 or 14%. The SWCH Tradeshow produced minimal margin and no monthly recurring revenue contribution. 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.

Gross profit increased to $483,981 for the nine months ended March 31, 2021 which was an increase of $87,777 or 22% over the same period in 2020. Gross profit as a percentage of revenue increased from 21% to 25% for the nine months ended March 31, 2021 over March 31, 2020 primarily because the SWCH Tradeshow realized 6% gross profit in 2020.

Other income during the nine months ended March 31, 2021 was the result of the SBA PPP loan forgiveness of $602,478, offset by recurring interest expense.

Operating Expenses

	Nine months Ended March 31,
	2021		2020		Change			%
Selling expenses	$	648,790	$	1,664,370	$	(1,015,580	)		(61	)%
General and administrative		505,305		761,346		(256,041	)		(34	)%
Wages, payroll taxes and other employee expenses		630,755		990,120		(359,365	)		(36	)%
Stock based compensation expense		321,207		712,326		(391,120	)		(55	)%
	$	2,106,056	$	4,128,162	$	(2,022,106	)		(49	)%

The decrease in operating expenses during the nine months ended March 31, 2021 compared to 2020 was driven by a reduction in selling and advertising expense and less stock compensation expense. Management expects the general and administrative expenses to continue to decrease as management focuses on getting current operations to positive cash flow.

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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:

	Nine months Ended March 31,
	2021			2020
Net cash used in operating activities	$	(698,029	)	$	(2,797,081	)
Net cash used in investing activities	$	-		$	(492,899	)
Net cash used provided by financing activities	$	232,977		$	3,750,989

As of March 31, 2021 we had $844,860 in cash and cash equivalents and a working capital deficit of $1,775,378. We are dependent on funds raised through equity financing. Our cumulative net loss of $17,307,556 was funded by equity financing and we reported a net loss of $1,306,432 for the nine months ended March 31, 2021. During the nine months ending March 31, 2021, we did not raise any monies through financing activities, and we did not expend any monies through investing activities.

While the Company booked a GAAP loss for the period, the Company realized positive operating cash flow all months during the period.

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 nine-month period ended March 31, 2021.

Off-Balance Sheet Arrangements

We had no off-balance sheet arrangements as of March 31, 2021 and June 30, 2020.

Critical Accounting Estimates

Our condensed consolidated financial statements and accompanying notes have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires management to make estimates, judgments and assumptions that affect reported amounts of assets, liabilities, revenues and expenses. We continually evaluate the accounting policies and estimates used to prepare the condensed consolidated financial statements. The estimates are based on historical experience and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could differ from these estimates made by management. Certain accounting policies that require significant management estimates and are deemed critical to our results of operations or financial position are discussed in our June 30, 2020 form 10-K in the Critical Accounting Policies section of Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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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 June 30, 2020 Form 10-K. 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

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 nine months ended March 31, 2021 is $53,917.

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Item 3. 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 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that are designed to ensure that information that would be required to be disclosed in Exchange Act reports is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including to our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As required by Rule 13a-15 under the Exchange Act, our management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2021. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the nine months ended March 31, 2021, which have materially affected or would likely materially affect our internal control over financial reporting. The Company continues to invest resources in order to upgrade internal controls.

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PART II – OTHER INFORMATION

Item 1. 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 2. Unregistered Sales of Equity Securities

None

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None

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Item 6. Exhibits

Exhibit Number		Exhibit Description

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		Inline XBRL Instance Document*

101.SCH		Inline XBRL Taxonomy Extension Schema*

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase*

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase*

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase*

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase*

* Filed herewith.

** Furnished herewith.

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SIGNATURES

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

	LEAFBUYER TECHNOLOGIES, INC.

Date: May 17, 2021	By:	/s/ Kurt Rossner
		Kurt Rossner
		Chief Executive Officer, Director (principal executive officer)

	By:	/s/ Mark Breen
		Mark Breen
		Chief Financial Officer and Director

TABLE OF CONTENTS

Part I. Financial Information Item 1. Financial Statements Note 1 Description Of Business Note 2 Summary Of Significant Accounting Policies Note 3 Property and Equipment Note 4 Capital Stock and Equity Transactions Note 5 Debt Note 6 Commitments and Contingencies Note 7 Risks and Uncertainties Note 8 Stock Based Compensation Note 9 Related Party Transactions Note 10 Leases Note 11 Subsequent Events Item 2. Management S Discussion and Analysis Of Financial Condition and Results Of Operations Item 3. Quantitative and Qualitative Disclosures About Market Risk Item 4. Controls and Procedures Part II Other Information Item 1. Legal Proceedings Item 2. Unregistered Sales Of Equity Securities Item 3. Defaults Upon Senior Securities Item 4. Mine Safety Disclosures Item 5. Other Information Item 6. Exhibits

Exhibits

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**

LBUY 10-Q Quarter ended March 31, 2021

Exhibits