# EDGAR Filing Document

**Accession Number:** 0001643721
**File Stem:** 0001477932-23-001023
**Filing Date:** 2023-2
**Character Count:** 79093
**Document Hash:** 1eb847440382646b0e0c3d17cbba5392
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001477932-23-001023.hdr.sgml**: 20230214

**ACCESSION NUMBER**: 0001477932-23-001023

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 53

**CONFORMED PERIOD OF REPORT**: 20221231

**FILED AS OF DATE**: 20230214

**DATE AS OF CHANGE**: 20230214

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** LEAFBUYER TECHNOLOGIES, INC.
- **CENTRAL INDEX KEY:** 0001643721
- **STANDARD INDUSTRIAL CLASSIFICATION:** TRANSPORTATION SERVICES [4700]
- **IRS NUMBER:** 383944821
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 0630

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-55855
- **FILM NUMBER:** 23631193

**BUSINESS ADDRESS:**
- **STREET 1:** 6888 S. CLINTON STREET, SUITE 300
- **CITY:** GREENWOOD VILLAGE
- **STATE:** CO
- **ZIP:** 80112
- **BUSINESS PHONE:** 720-235-0099

**MAIL ADDRESS:**
- **STREET 1:** 6888 S. CLINTON STREET, SUITE 300
- **CITY:** GREENWOOD VILLAGE
- **STATE:** CO
- **ZIP:** 80112

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** AP EVENT INC.
- **DATE OF NAME CHANGE:** 20150529

?xml version="1.0" encoding="utf-8"?lbuy_10q.htm

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 10-Q**

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

For the quarterly period ended **December 31, 2022**

or

**☐&nbsp;&nbsp;&nbsp;&nbsp; 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: **<u>333-206745</u>**

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|:---|
| **LEAFBUYER TECHNOLOGIES, INC.** |
| (Exact name of registrant as specified in its charter) |

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|:---|:---|
| **Nevada** | **38-3944821** |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |

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**<u>6888 S. Clinton Street, Suite 300, Greenwood Village, CO 80112</u>**

(Address of principal executive offices, including zip code)

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

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

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| | | |
|:---|:---|:---|
| Title of Each Class | Trading Symbol(s) | Name of each exchange on which registered |

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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 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.

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| | | | |
|:---|:---|:---|:---|
| 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 February 14, 2023 was 95,428,573

**Table of Contents**

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| | | |
|:---|:---|:---|
| [PART I – FINANCIAL INFORMATION](#p1) | [PART I – FINANCIAL INFORMATION](#p1) | [PART I – FINANCIAL INFORMATION](#p1) |
| [Item 1.](#p1i1) | [Interim Condensed Consolidated Financial Statements](#p1i1) | 3 |
| [Item 2.](#p1i2) | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#p1i2) | 15 |
| [Item 3.](#p1i3) | [Quantitative and Qualitative Disclosures About Market Risk](#p1i3) | 20 |
| [Item 4.](#p1i4) | [Controls and Procedures](#p1i4) | 20 |
| [PART II – OTHER INFORMATION](#p2) | [PART II – OTHER INFORMATION](#p2) | [PART II – OTHER INFORMATION](#p2) |
| [Item 1.](#p2i1) | [Legal Proceedings](#p2i1) | 21 |
| [Item 2.](#p2i2) | [Unregistered Sales of Equity Securities and Use of Proceeds](#p2i2) | 21 |
| [Item 3.](#p2i3) | [Defaults Upon Senior Securities](#p2i3) | 21 |
| [Item 4.](#p2i4) | [Mine Safety Disclosures](#p2i4) | 21 |
| [Item 5.](#p2i5) | [Other Information](#p2i5) | 21 |
| [Item 6.](#p2i6) | [Exhibits](#p2i6) | 22 |
|  | [SIGNATURES](#sig) | 23 |

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| 2 |
| *[**Table of Contents**](#toc)* |

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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***

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| | | |
|:---|:---|:---|
| **LEAFBUYER TECHNOLOGIES INC.**<br>**UNAUDITED CONDENSED CONSOLDIATED BALANCE SHEETS**  |  |  |
|  | **December 31,**<br>**2022** | **June 30,**<br>**2022** |
| **ASSETS** |  |  |
| **Current assets:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $298243 | $367245 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable (net of allowance for doubtful accounts of $20,692 and $14,037, respectively,) | 58658 | 29085 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 24381 | 23109 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 381282 | 419439 |
| &nbsp;&nbsp;&nbsp;&nbsp;Noncurrent assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Fixed assets and intangible assets, net  | 1587256 | 1949479 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $1968538 | $2368918 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)** |  |  |
| **Current liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable  | $198785 | $360936 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities | 939462 | 1178030 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred revenue | 7172 | 12697 |
| &nbsp;&nbsp;&nbsp;&nbsp;Debt, related party (Note 9) | 216667 | 325000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Debt | 1367491 | 1404802 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 2729577 | &nbsp;&nbsp;&nbsp;&nbsp;3281465 |
| &nbsp;&nbsp;&nbsp;&nbsp;Debt, net of current portion | 500000 | 500.000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 3229577 | &nbsp;&nbsp;&nbsp;&nbsp;3781465 |
| &nbsp;&nbsp;&nbsp;&nbsp;Commitments and contingencies (Note 6) |  |  |
| Stockholders' Equity (Deficit): |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Convertible Preferred Stock, $0.001 par value; 10,000,000 shares authorized |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Convertible Preferred Stock Series A, $0.001 par value; 324,325 designated; 324,325 and 324,325 shares issued and outstanding at December 31, 2022 and June 30, 2022, respectively | 324 | 324 |
| &nbsp;&nbsp;&nbsp;&nbsp;Convertible Preferred Stock, $0.001 par value; 10,000,000 shares authorized Convertible Preferred Stock Series B, $0.001 par value; 27,027 designated; 7,568 and 7,568 shares issued and outstanding at December 31, 2022 and June 30, 2022, respectively | 8 | 8 |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock, $0.001 par value; 700,000,000 shares authorized; 95,030,830 shares issued and outstanding at December 31, 2022 and 93,316,288 shares issued and outstanding at June 30, 2022 | 98772 | 93315 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional paid in capital | 22604922 | 22344293 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accumulated deficit | (23965065) | (23850487) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity (deficit) | (1261039) | (1412547) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity (deficit) | $1968538 | $2368918 |

---

See accompanying notes to condensed consolidated financial statements.

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| *[**Table of Contents**](#toc)* |

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

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months Ended**<br>**December 31,** | **Three months Ended**<br>**December 31,** | **Six months Ended**<br>**December 31,** | **Six months Ended**<br>**December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| Revenue | 1341750 | 923829 | $2470415 | $1775522 |
| Cost of sales | 625604 | 662059 | 1278124 | 1292594 |
| Gross profit | 718146 | 261770 | 1192291 | 482928 |
| Operating expenses: |  |  |  |  |
| Selling expenses | 129281 | 210885 | 290595 | 442390 |
| General and administrative  | 195196 | 150078 | 358359 | 298243 |
| Personnel expenses | 203414 | 204152 | 391624 | 435904 |
| Stock based compensation expense | 52087 | 185560 | 174536 | 383388 |
| Total operating expenses | 579087 | 750675 | 1215114 | 1559925 |
| Loss from operations | 136169 | (488905) | (22823) | (1076997) |
| Interest expense | (44107) | (46650) | (95134) | (104321) |
| Unrealized gain (loss) on derivative |  | (838303) |  | 2208469 |
| Forgiveness of PPP loan |  |  |  | 557977 |
| Other Income | 3335 |  | 3381 |  |
| Net income | 95397 | (1373858) | $(114576) | $1585128 |
| Earnings per common share: |  |  |  |  |
| Basic  | 0.00 | (0.01) | $(0.00) | $0.02 |
| Fully diluted | 0.00 |  | (0.00) | 0.01 |
| Weighted average common shares outstanding: |  |  |  |  |
| Basic | 95030830 | 90511052 | 94510788 | 90835517 |
| Fully diluted | 145749028 |  | 146219353 | 257405056 |

---

See accompanying notes to condensed consolidated financial statements

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| *[**Table of Contents**](#toc)* |

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&nbsp;&nbsp;&nbsp;&nbsp;

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| **LEAFBUYER TECHNOLOGIES, INC.** |
| **CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)** |

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| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred Stock A** | **Preferred Stock A** | **Preferred Stock B** | **Preferred Stock B** | **Common Stock** | **Common Stock** | | | |
|  | **# of**<br>**Shares** | **Amount** | **# of**<br>**Shares**  | **Amount**  | **# of**<br>**Shares**  | **Amount**  | <br>**APIC**  | <br>**Acc**<br>**Deficit**  | <br>**Total**  |
| **Balance, June 30, 2022** | 324325 | $324 | 7567 | $8 | 93316288 | $93315 | $22344293 | $(23850487) | $(1412547) |
| Stock based compensation  |  |  |  |  |  |  | 187131 |  | 187131 |
| Issuance of common stock for vendor payments  |  |  |  |  | 600000 | 600 | 27900 |  | 28500 |
| Issuance of common stock as employee compensation  |  |  |  |  | 1114542 | 1115 | 49340 |  | 50454 |
| Net gain  | - | - | - | - | - | - | - | (114576) | (114576) |
| **Balance, December 31, 2022** | 324325 | $324 | 7567 | $8 | 95030830 | $95030 | $22608665 | $(23965065) | $(1261039) |

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| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Preferred Stock A** | **Preferred Stock A** | **Preferred Stock B** | **Preferred Stock B** | **Common Stock** | **Common Stock** | | | |
|  | **# of**<br>**Shares** | **Amount** | **# of**<br>**Shares**  | **Amount**  | **# of**<br>**Shares**  | **Amount**  | <br>**APIC**  | <br>**Acc**<br>**Deficit**  | <br>**Total**  |
| **Balance, June 30, 2021** | 324325 | $324 | 7567 | $8 | 89318160 | $89318 | $17492411 | $(24806182) | $(7224121) |
| Stock based compensation  |  |  |  |  |  |  | 264628 |  | 264628 |
| Issuance of common stock for vendor payments |  |  |  |  | 814790 | 814 | 56727 |  | 57541 |
| Issuance of common stock as employee compensation |  |  |  |  | 1397135 | 1397 | 117363 |  | 118760 |
| Bifurcated Derivative PS A  |  |  |  |  |  |  | 4392870 |  | 4392870 |
| Net loss  | - | - | - | - | - | - | - | 1585128 | 1585128 |
| **Balance, December 31, 2021**  | 324325 | $324 | 7567 | $8 | 91530085 | $91529 | $22323999 | $(23221054) | $(805194) |

---

See accompanying notes to condensed consolidated financial statements.

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| **LEAFBUYER TECHNOLOGIES INC.**<br>**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW**<br>**(Unaudited)** | | |
|  | **Six months Ended**<br>**December 31,** | **Six months Ended**<br>**December 31,** |
|  | **2022** | **2021** |
| **Cash flows from operating activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net Income | $(114578) | $1585128 |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net income to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock based compensation | 237587 | 388388 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock for services | 28500 | 57540 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of note payable discount |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss (gain) on derivative liability |  | (2208469) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Forgiveness of PPP loan |  | (557977) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 362223 | 362222 |
| &nbsp;&nbsp;&nbsp;&nbsp;Changes in assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (29573) | (23696) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other | (1272) | (4175) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable  | (162151) | 126386 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued liabilities | (244093) | 47265 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | 76642 | (232388) |
| **Cash flows from investing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | - | - |
| **Cash flows from financing activities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repayment of Debt | (145644) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | (145644) | - |
| **Net change in cash and cash equivalents** | (69002) | (232388) |
| **Cash and cash equivalents, beginning of period** | 367245 | 684639 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Cash and cash equivalents, end of period** | $298243 | $452251 |
| Cash paid for interest | $- | $- |
| Cash paid for taxes | $- | $- |
| Supplemental information for non-cash investing and financing activities: |  |  |
| Issuance of common stock for vendor payments | $28500 | $223000 |

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See accompanying notes to condensed consolidated financial statements.

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&nbsp;&nbsp;&nbsp;&nbsp;

**LEAFBUYER TECHNOLOGIES INC.**

**Notes to Unaudited Condensed Consolidated Financial Statements**

**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 December 31, 2022, 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 December 31, 2022, we had $298,243 in cash and cash equivalents and a working capital deficit of $2,348,295. We are dependent on funds raised through equity financing. Our cumulative net loss of $23,965,065 was funded by debt and equity financing and we reported a net loss from operations of $114,578 for the six months ended December 31, 2022. 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.

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**Note 2 — Summary of 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, 2022 Form 10-K. During the six months ended December 31, 2022, 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.

**Earnings (Loss) per Share**

Basic loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the reporting period. Diluted loss per share is computed similarly to basic loss per share, except that it includes the potential dilution that could occur if dilutive securities are exercised. Dilutive instruments had no effect on the calculation of earnings or loss per share during the six months ended December 31, 2022. For the six months ended December 31, 2021 warrants of 29,119,898, stock options vested as of the end of the period of 7,471,867, Convertible Debt into 13,776,244 shares and Series A Convertible Preferred Stock 116,525,995 shares of common stock would have been included in the fully diluted weighted average calculation.

**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.

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**Note 3 — Fixed Assets and Intangible Assets**

Fixed Assets and intangible assets consist of the following

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| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2022** | **June 30,**<br>**2022** |
| Software platform | $4482225 | $4482225 |
| Furniture and fixtures | 1500 | 1500 |
| Less accumulated amortization | (2896468) | (2534246) |
| Property and equipment, net | $1587256 | $1949479 |

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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 will be dissolved in the transition and the Loyalty Software will be 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 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 period ended December 31, 2022 there was no software capitalized and for the same period ended 2021.

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. The current revenues of GTI are minimal, and the Company expects higher sales in the California market as the system is fully integrated.

Amortization expense, recorded as cost of revenue, related to internal use software totaled $362,223 during the six months ended December 31, 2022 and for the same period ended 2021 amortization expenses was $362,223. Amortization expense for the next five years is as follows:

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|:---|:---|
| 2023 | $724445 |
| 2024 | 724445 |
| 2025 | 138366 |
| Total Unamortized Expense | $1587256 |

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**Note 4 — Capital Stock and Equity Transactions**

The Company has 700,000,000 shares of common stock authorized with a par value of $0.001 per share as of December 31, 2022. On August 13, 2021 the Company filed Articles of Amendment to Amended and Restated Articles of Incorporation with the State of Nevada increasing the number of common shares from 150,000,000 to 700,000,000.

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In addition, the Company has 10,000,000 preferred stock authorized with a par value of $0.001 per share as of December 31, 2022.

Effective October 13, 2021, the Company executed and filed with the State of Nevada a Certificate of Designation of Preferred Stock of the Corporation fixing the designations, power, preferences, and rights of the shares. The total of 324,325 shares of preferred stock series A with a par value of $0.001 per share, of the Corporation are herby designated as Series A Super Voting Preferred Stock. These shares are not entitled to receive dividends and shall not be entitled to any liquidation preference. Further the holders shall have no conversion rights and the holders shall have the right to vote in an amount equal to 600 votes per share of Series A Preferred Stock.

The value as of October 13, 2021 for the derivative liability was $4,392,870 which was an increase from September 30, 2020 of $838,303. The difference was recorded as an unrealized loss on the consolidated statement of operations as of December 31, 2021 compared to a loss for this same period in 2020 of $3,714,877. For the period ending December 31, 2021 the derivative liability was treated as a capital contribution and is recorded against additional paid in capital. in accordance with FASB ASC 815.

The 7,567 shares of Series B Convertible Preferred Stock are convertible into 1,120,064 shares of common stock.

*Issuance of Common Stock*

During the six months period ended December 31, 2022 the Company issued 1,114,542 shares of Common Stock to employees. These shares were valued at fair market value of $50,455 and expensed in the accompanying Condensed Consolidated Statement of Operations.

During the six months ended December 31, 2022, the Company issued 600,000 shares of Common Stock to vendors for services rendered. These shares were valued at fair market value of $28,500 and expensed in the accompanying Condensed Consolidated Statement of Operations.

During the six months period ended December 31, 2021 the Company issued 1,397,135 shares of Common Stock to employees. These shares were valued at fair market value of $118,760 and expensed in the accompanying Condensed Consolidated Statement of Operations.

During the six months ended December 31, 2021, the Company issued 814,790 shares of Common Stock to vendors for services rendered. These shares were valued at fair market value of $57,541 and expensed in the accompanying Condensed Consolidated Statement of Operations.

**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. The loan maturity date was extended to August 8, 2019, the discount is fully amortized and total unpaid principal and interest is approximately $237,978, accruing at 12% at December 31, 2022, 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 $400,000 cash payment ("the 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's 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's common stock 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 December 31, 2022, the Convertible Note is payable upon demand and total unpaid principal and interest outstanding is approximately $660,651.

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On September 21, 2018, the Company entered several promissory notes with various investors of the Company with a face value of $440,000 in exchange for $400,000 cash payment ("the Notes"), the discount of the Notes will be amortized over the life of the Note and have an interest rate of 10%. The Notes have a twelve-month term with no payment required for the initial six months; after six months, the Company will repay the investors interest and 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 Notes, the interest is increased to 12% and at the investors' option, the principal and interest can be converted into the Company's 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 these 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 December 31, 2022, the total unpaid principal and interest is approximately $330,325.

During the year ended June 30, 2019, the Company entered into several promissory notes with various investors of the Company with a face value of $960,000 in exchange for a total of $900,000 cash payments. The 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 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. In March 2020, the Company did not make its required principal and interest payment which put the Notes in default. The interest rate 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. On December 14, 2022, $30,000 a principal payment was made leaving a remaining principal of $214,802 which is in default and payable upon demand. As of December 31, 2022, the total unpaid principal and interest is approximately $338,726.

During the year ended June 30, 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 and in July 2022 the Company repaid $100,000 of the promissory note balance. The remaining principal of $200,000 is in default and due upon demand and the interest rate was increased to 12%. As of December 31, 2022, the total unpaid principal and interest is approximately $251,946.

During the year ended June 30, 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 and in July 2022 repaid $8,333 of the promissory note balance. The remaining principal of $16,667 note is in default and the interest rate increased to 12%. As of December 31, 2022, the total unpaid principal and interest is approximately $22,030.

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.

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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 Company 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 September 30, 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 Consolidated Statement of Operations for the quarter ended September 30, 2021.

The Company recognized $94,534 and $102,777 of interest expense for the six months ended December 31, 2022 and 2021, respectively. As of December 31, 2022 and 2021, accrued interest on the above notes was $646,985 and $524,035, respectively. The weighted average interest rates as of December 31, 2022 and 2021 was 6.46% and 5.13%.

Notes payable and long-term debt outstanding as of December 31, 2022 and June 30, 2022 are summarized below:

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| | | | |
|:---|:---|:---|:---|
|  | **Maturity Date** | **December 31,**<br>**2022** | **June 30,**<br>**2022** |
| 12% $150,000 Convertible Note Payable, net of unamortized discount of $0 and $0, respectively | Due on Demand | $150000 | $150000 |
| 12% $440,000 Convertible Note Payable, net of unamortized discount of $0 and $0, respectively | Due on Demand | 440000 | 440000 |
| 12% $220,000 Convertible Note Payable, net of unamortized discount of $0 and $0, respectively | Due on Demand | 220000 | 220000 |
| 7% $213,333 Convertible Note Payable, net of unamortized discount of $0 and $0, respectively | Due on Demand | 214802 | 244802 |
| 8% $600,000 Related Party Note Payable, net of unamortized discount of $0 and $0 respectively | Due on Demand | 200000 | 300000 |
| 8% $50,000 Related Party Note Payable | Due on Demand | 16667 | 25000 |
| 5% Note Payable | Due on Demand (1) | 350000 | 350000 |
| 3.75% SBA EIDL Note Payable | April 30, 2050 | 500000 | 500000 |
| Total notes payable |  | 2091469 | 2229802 |
| Less current portion of notes payable |  | 1591469 | 1729802 |
| Notes payable, net of current portion |  | $500000 | $500000 |

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<sup>(1)</sup> 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**

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 state legal cannabis markets.

The Company was affected in 2020 by the COVID-19 outbreak and worldwide pandemic. The Company saw some postponements in orders in the first few weeks March 2020 but orders stabilized to a normal level by the end of fiscal year 2020. The Company made a significant pivot to a complete solution when it comes to online ordering and communication.

**Note 8 — Stock Based Compensation**

The equity incentive plan of the Company was established in February of 2017. The Board of Directors of the Company may from time to time, in its discretion grant to directors, officers, consultants and employees of the Company, non-transferable options to purchase common shares, provided that the number of options issued do not exceed 25,000,000. The options are exercisable for a period of up to 4 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 25,000,000 through consent of stockholders to amend and restate the equity incentive plan.

The average fair value of stock options granted was estimated to be $0.14 and $0.04. This estimate was made using the Black-Scholes option pricing model and the following weighted average assumptions for the six months ended December 31, 2022:

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| | |
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| Expected option life (years) | 2-4 |
| Expected stock price volatility | 227 to 279% |
| Expected dividend yield |  |
| Risk-free interest rate | 0.44 to 0.54% |

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A summary of option activity under the employee share option pan as of December 31, 2022 and changes during the year then ended is presented below.

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Shares** | **Weighted-Average Exercise Price** | **Weighted-Average Remaining Contractual Price** | **Aggregate Intrinsic Value** |
| **Options:** |  |  |  |  |
| Outstanding at July 1, 2022 | 15832062 | $0.06 |  |  |
| Granted | 2500000 | $0.04 |  |  |
| Exercised, converted |  | $0.00 |  |  |
| Forfeited / exchanged / modification |  | $0.00 |  |  |
| Outstanding at December 31, 2022 | 18332062 | $0.06 | 2.5 | $- |
| Exercisable at December 31, 2022 | 6593333 | $0.06 | 3.0 |  |
| Number of options available for grant at end of period | 426870 |  |  |  |

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A summary of the status of the Company's nonvested shares as of December 31, 2022, and changes during the year quarter December 31, 2022, is presented below:

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| | | |
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| **Options** | **Shares** | **Weighted-Average Grant-Date Fair Value** |
| Nonvested at July 1, 2022 | 13450170 | $0.08 |
| Granted |  | $0.00 |
| Vested |  | $0.00 |
| Forfeited |  | $0.00 |
| Nonvested at December 31, 2022 | 15950170 | $0.05 |

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Stock-based compensation expense attributable to stock options was approximately $187,131 for the six months ended December 31, 2022. As of December 31, 2022, there was approximately $501,172 of unrecognized compensation expense related to 15,950,170 nonvested stock options outstanding, and the weighted average vesting period for those options was 2 years.

**Warrants**

At December 31, 2022, 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:

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| | | | |
|:---|:---|:---|:---|
| **Warrants** | **Remaining** <br>**Number** <br>**Outstanding** | **Weighted**<br>**Average** <br>**Remaining** <br>**Life (Years)** | **Weighted** <br>**Average**<br>**Exercise** <br>**Price** |
| Warrants - SEDA Financing | 86957 | 0.30 | $1.15 |
| Warrants - Issued with Convertible Notes | 600000 | 0.73 | $0.75 |
| Warrants - Securities Purchase Agreement | 360577 | 1.52 | $0.78 |
| Warrants A - Securities Purchase Agreement | 28072364 | 1.52 | $0.16 |
| Total | 29119898 |  |  |
| Aggregate intrinsic value at December 31, 2022 | $0 |  |  |

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**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 $400,000 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 $33,333 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 November 11, 2022 the Company extended its Denver Colorado headquarter lease for 12 months through December 31, 2023. During the past fiscal 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 $54,403.

**Note 11 — Subsequent Events – nothing to report**

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

<u>Forward Looking Statements</u>

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 December 31, 2022 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, 2023. 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, 2022, 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.

<u>Business Overview</u>

Our wholly owned subsidiary, LB Media Group, LLC has evolved and grown from a listing website to a comprehensive marketing technology platform. We work with both, medical and recreational dispensaries, in legalized cannabis states along with cannabis product companies. Through subscription and pay per use models we provide access to our technology platform which includes retention tools, applications, texting/loyalty and ordering ahead technology.

The Leafbuyer Technology Platform reaches millions of cannabis consumers every month through its web-based platform, loyalty platform and smart application technology. Our website's sophisticated vendor dashboard allows our clients to update their menus, deals and create real-time messages to communicate with consumers 24/7/365. The platform also provides a robust reporting feature to track the vendors' return on investment. With the increased popularity of Leafbuyer texting/loyalty program, clients can communicate through SMS, MMS as well as push notifications within a custom branded application. Our website, Leafbuyer.com, and its progressive web application, hosts a robust search algorithm like popular travel or hotel sites, where our clients' customers 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. In November of 2020 Leafbuyer Technologies Inc. completed a customizable white label application for the dispensary clients. Consumers can search, shop, earn rewards, place orders, and communicate with their favorite stores all in one convenient application. The application can also be completely branded for the dispensary and allows for 24/7 communication with their patrons.

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We continue an aggressive push into all legal cannabis states. Increasing our marketing and sales presence in new markets is a primary objective. Along with this expansion, we continue to develop innovative 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 $70 billion in revenue by the year 2028. Our founders and our Board of Directors have been, and will continue to be, aggressive in pursuing long-term opportunities.

We plan to grow organically through the aggressive deployment of sales and marketing resources into legal cannabis states. We understand that to obtain a significant market share we may need to look for acquisitions for a sizable portion of that growth. However, there can be no assurance that we will be able to locate and acquire such opportunities or that they will be on terms that are favorable to us. In the meantime the company will continue to look for efficiencies, analyze areas for cost cutting as well as developing new products to increase revenue streams.

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.

***Comparison of results of operations for the three months ended December 31, 2022 and 2021***

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|:---|:---|:---|:---|:---|
|  | **Three months Ended**<br>**December 31,** | **Three months Ended**<br>**December 31,** | | |
|  | **2022** | **2021** | <br>**Change** | <br>**%** |
| Revenue | $1341750 | $923829 | $417921 | 45% |
| Cost of revenue | 625604 | 662059 | (36455) | (6)% |
| Gross profit | 716146 | 261770 | 454376 | 174% |
| Total operating expenses | 579978 | 750675 | (170097) | (23)% |
| Gain (loss) on derivative liability |  | (838303) | 833303 | 100% |
| Gain of PPP Forgiveness |  |  |  | % |
| Interest expense & other income | (40772) | (46650) | (5878) | (8)% |
| Net income | $95397 | $(1373858) | $1469254 | 107% |

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***Revenues***

During the three months ended December 31, 2022, we generated $1.3 million of revenues, compared to revenues of $923,829 during the three months ended December 31, 2021. The increase was primarily due to a combination of new sales, and current clients list size increase by using Leafbuyer lead catcher technology.

***Gross Profit***

Gross profit increased to $716,146 for the period ended December 31, 2022 which was an increase over the same period ended December 31, 2021 of $454,376. Gross profit as a percentage of revenue increased from 27% to 48% do to a reduction in provider costs and the increase in higher margin products such as the custom native apps that have been deployed.&nbsp;&nbsp;&nbsp;&nbsp;

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***Expenses***

During the three months ended December 31, 2022, we incurred total operating expenses of $579,978, including $52,087 in stock based compensation expenses, and $129,281 in selling expenses. During the three months ended December 31, 2021, we incurred total operating expenses of $750,675, including $185,560 in stock based compensation expenses, and $210,885 in selling expenses.

Interest expense was $44,107 for the three months ended December 31, 2022 compared to interest expense of $46,650 for the same period ending December 31, 2021 because of the reduction in notes payable during the year.

During the three months ended December 31, 2021 we recorded an unrealized loss of $838,303 the estimated fair value of the derivative changed at the end of the period.

*Net Income*

During the three months ended December 31, 2022 we realized a net profit of $95,397, compared to a net loss of 1,373,858 for the three months ended December 31, 2021.

***Comparison of results of operations for the six months ended December 31, 2022 and 2021***

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Six months Ended**<br>**December 31,** | **Six months Ended**<br>**December 31,** | | |
|  | **2022** | **2021** |<br>**Change** |<br>**%** |
| Revenue | $2470415 | $1775522 | $694893 | 39% |
| Cost of revenue | 1278124 | 1292594 | (14470) | (1)% |
| Gross profit | 1192291 | 482928 | 709363 | 147% |
| Total operating expenses | 1215114 | 1559925 | (344811) | (22)% |
| Gain (loss) on derivative liability | - | 2208469 | (2208469) | 100% |
| Gain of PPP Forgiveness | - | 577977 | (577977) | 100% |
| Interest expense & other income | (91753) | (104321) | (9187) | (9)% |
| Net income | $(114576) | $1585128 | $(1699704) | (107)% |

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***Revenues***

During the six months ended December 31, 2022, we generated $2.5 million of revenues, compared to revenues of $1.8 million during the six months ended December 31, 2021. The increase was primarily due to a combination of new sales, and current clients list size increase by using Leafbuyer lead catcher technology.

***Gross Profit***

Gross profit increased to $1,2 million for the period ended December 31, 2022 which was an increase over the same period ended December 31, 2021 of $709,363. Gross profit as a percentage of revenue increased from 28% to 53% do to a reduction in provider costs and the increase in higher margin products such as the custom native apps that have been deployed.&nbsp;&nbsp;&nbsp;&nbsp;

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***Expenses***

During the six months ended December 31, 2022, we incurred total operating expenses of $1.2 million, including $174,536 in stock based compensation expenses, and $290,595 in selling expenses. During the six months ended December 31, 2021, we incurred total operating expenses of $1.6 million, including $383,388 in stock based compensation expenses, and $442,390 in selling expenses. The decrease of $344,811 or 22% was primarily due to less selling expense and lower stock compensation expense.

Interest expense was $95,134 for the six months ended December 31, 2022 compared to interest expense of $104,321 for the same period ending December 31, 2021 because of the reduction in notes payable during the year.

During the six months ended December 31, 2021 we recorded an unrealized gain of $2,208,469 the estimated fair value of the derivative changed at the end of the period. Other income during the period ended December 31, 2021 was the result of the SBA PPP loan forgiveness of $577,977.

*Net Income*

During the six months ended December 31, 2022 we realized a net loss of $114,576, compared to a net income of $1,585,128 for the six months ended December 31, 2021.

**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 December 31, 2022 we had $298,243 in cash and cash equivalents.

***Cash Flows***

Our cash flows from operating, investing and financing activities were as follows:

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|:---|:---|:---|
|  | **Six months Ended December,** | **Six months Ended December,** |
|  | **2022** | **2021** |
| Net cash used in operating activities | $76643 | $(232388 ) |
| Net cash used in investing activities | $- | $- |
| Net cash provided by financing activities | $(145644 ) | $- |

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As of December 31, 2022, we had $298,243 in cash and cash equivalents and a working capital deficit of $2,348,295. We are dependent on funds raised through equity financing. Our cumulative net loss of $23,965,065 was funded by debt and equity financing and we reported a net loss from operations of $114,578 for the six months ended December 31, 2022. During the six months ending December 31, 2022, we did not raise or expended any monies through financing activities, and we did not expend any monies through investing activities (acquiring assets).

***Off-Balance Sheet Arrangements***

We had no off-balance sheet arrangements as of December 31, 2022 and June 30, 2022.

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***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, 2022 form 10-K in the Critical Accounting Policies section of Management's Discussion and Analysis of Financial Condition and Results of Operations.

<u>Critical Accounting Policies</u>

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, 2022 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**

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.

We recognize revenue upon completion of our performance obligations or expiration of the contractual time to use services such as bulk texting.

*Recent Accounting Guidance Adopted*

We have implemented all new accounting pronouncements that are in effect and applicable to us. These pronouncements did not have any material impact on our financial statements unless otherwise disclosed, and we do not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on our financial position or results of operations.

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**Item 3. Quantitative and Qualitative Disclosures About Market Risk**<br>

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**<br>

<u>Evaluation of Disclosure Controls and Procedures</u>

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2022. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Such officer also confirmed that there was no change in our internal control over financial reporting during the three months ended September 30, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

<u>Changes in Internal Control Over Financial Reporting</u>

There were no changes in our internal control over financial reporting that occurred during the three months ended December 31, 2022, 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**<br>

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**<br>

None

**Item 3. Defaults Upon Senior Securities**<br>

None.

**Item 4. Mine Safety Disclosures**<br>

Not applicable.

**Item 5. Other Information**<br>

None

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**Item 6. Exhibits**<br>

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| | |
|:---|:---|
| **Exhibit Number** | **Exhibit Description** |
| [31.1](lbuy_ex311.htm) | [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\*](lbuy_ex311.htm) |
| [31.2](lbuy_ex312.htm) | [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\*](lbuy_ex312.htm) |
| [32.1](lbuy_ex321.htm) | [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 \*\*](lbuy_ex321.htm) |
| [32.2](lbuy_ex322.htm) | [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 \*\*](lbuy_ex322.htm) |
| 101.INS | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. |
| 101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document. |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). |

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\* 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.

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| | | |
|:---|:---|:---|
|  | **LEAFBUYER TECHNOLOGIES, INC.** | **LEAFBUYER TECHNOLOGIES, INC.** |
| Date: February 14, 2023 | By:  | */s/ Kurt Rossner* |
|  |  | Kurt Rossner |
|  |  | Chief Executive Officer, Director<br>(principal executive officer) |
|  | By:  | */s/ Mark Breen* |
|  |  | Mark Breen |
|  |  | Chief Financial Officer and Director |

---

&nbsp;&nbsp;&nbsp;&nbsp;

## Exhibit 31.1

**EXHIBIT 31.1**

**Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities**

**Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**

I, Kurt Rossner, certify that:

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

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

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

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

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

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

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

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

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

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

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

---

| | |
|:---|:---|
| Date: February 14, 2023 | Date: February 14, 2023 |
| By:  | */s/ Kurt Rossner* |
|  | Kurt Rossner |
|  | Chief Executive Officer and Chairman<br> (Principal Executive Officer) |

---

## Exhibit 31.2

**EXHIBIT 31.2**

**Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities**

**Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002**

I, Mark Breen, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Leafbuyer Technologies, Inc.;

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

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

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

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

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

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

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

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

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

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

---

| | |
|:---|:---|
| Date: February 14, 2023 | Date: February 14, 2023 |
| By:  | */s/ Mark Breen* |
|  | Mark Breen |
|  | Chief Financial Officer and Director<br> (Principal Financial and Accounting Officer) |

---

## Exhibit 32.1

**EXHIBIT 32.1**

**Certification of the Chief Executive Officer pursuant to**

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

In connection with the quarterly report of Leafbuyer Technologies, Inc. (the "Company") on Form 10-Q for the period ended December 31, 2022, as filed with the Securities and Exchange Commission (the "Report"), I, Kurt Rossner, certify pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

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

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

---

| | |
|:---|:---|
| Dated: February 14, 2023 | Dated: February 14, 2023 |
| By:  | */s/ Kurt Rossner* |
|  | Kurt Rossner |
|  | Chief Executive Officer and Chairman (Principal Executive Officer) |

---

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

## Exhibit 32.2

**EXHIBIT 32.2**

**Certification of the Chief Financial Officer pursuant to**

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

In connection with the quarterly report of Leafbuyer Technologies, Inc. (the "Company") on Form 10-Q for the period ended December 31, 2022, as filed with the Securities and Exchange Commission (the "Report"), I, Mark Breen, certify pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

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

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

---

| | |
|:---|:---|
| Date: February 14, 2023 | Date: February 14, 2023 |
| By:  | */s/ Mark Breen* |
|  | Mark Breen |
|  | Chief Financial Officer and Director |
|  | (Principal Financial and Accounting Officer) |

---

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