Annual Report for Fiscal Year Ending 06-30, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this Annual Report. The discussions of results, causes and trends should not be construed to imply any conclusion that these results or trends will necessarily continue into the future.

We were initially formed as AP Event, Inc., ("APEI") a Nevada corporation on October 16, 2014. APEI was originally in the business of travel agency to provide individual and group leisure tours to music festivals, and concerts combined with local excursions. On March 21, 2017 LB Media Group, LLC ("LB Media") acquired eighty percent (80%) of the outstanding common stock of APEI. On March 23, 2017, APEI consummated an Agreement and Plan Merger ("Merger") with LB Media and LB Acquisition Corp., a wholly owned subsidiary of APEI, whereby LB Acquisition was merged with and into LB Media Group, LLC. Simultaneously with the Merger, of APEI accepted subscriptions in a private placement ("Private Offering") of our common stock. As a result of the Merger, LB Media became a wholly owned subsidiary of the Registrant and following the consummation of the Merger and giving effect to the securities sold in the Private Offering, the members of LB Media beneficially own approximately fifty-five percent (55%) of our issued and outstanding common stock.

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On March 24, 2017, we amended our Articles of Incorporation (the "Amendment") to (i) change our name to LeafBuyer Technologies, Inc., (ii) to increase the number of our authorized shares of capital stock from 75,000,000 to 160,000,000 shares of which 150,000,000 shares were designated common stock, par value $0.001 per share and 10,000,000 shares were designated "blank check" preferred stock, par value $0.001 per share and (iii) to effect a forward split such that 9.25 shares of our common stock were issued for every 1 share of our common stock issued and outstanding immediately prior to the Amendment (the "Split").

On April 19, 2018, we entered into a Standby Equity Distribution Agreement (the "SEDA") with YA II PN Ltd. ("YA Investor"), a Cayman Island exempt limited partnership and an affiliate of Yorkville Advisors Global, LLC, whereby we sold, and the YA Investor purchased, 869,565 shares of our common stock for one million dollars ($1,000,000). Additionally, under the SEDA we may sell to the YA Investor up to $5,000,000 of shares of our common stock over a two-year commitment period. Under the terms of the SEDA, we may, from time to time, in our discretion, sell newly issued shares of our common stock to the YA Investor at a discount to market of 8% of the lowest daily volume weighted average price during the relevant pricing period. We are obligated to register the initial shares, the Commitment Shares (as defined below), and the shares of common stock issuable under the SEDA pursuant to a registration statement under the Securities Act.

During October and November 2018, we used the SEDA to receive $1,045,000. We issued 1,116,738 shares of our common stock which were valued at fair market at the date issued.

On November 6, 2018, we acquired a customer facing software ("Loyalty Software") through a Stock Purchase Agreement, in which we 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 transaction, and the Loyalty Software was assumed by us. 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 our 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. During the year ended June 30, 2020, an additional 366,667 of our shares of common stock (for a value of $262,500) was issued to shareholders of GTI as final settlement of the purchase agreement.

We issued 30,299,998 shares of common stock for the private placement and the issuance of Series C Warrants. We received approximately $4,060,000, net of the placement fees, legal and other expenses incurred for the placement of the shares. The Investors received Series A Warrants to allow the Investors to purchase an aggregate of 28,072,364 shares of our common stock, and Series B Warrants to allow the Investors to purchase an aggregate of 7,018,091 shares of common stock at a purchase price of $0.1603 per common stock share.

The Company has 700,000,000 shares of common stock authorized with a par value of $0.001 per share as of June 30, 2025.

In addition, the Company has 10,000,000 preferred stocks authorized with a par value of $0.001 per share as of June 30, 2025. 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.

Our equity incentive plan was amended and restated by our Board of Directors in April 2020 to increase the number of options available from 10,000,000 to 25,000,000.

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Business Overview

Our wholly owned subsidiary, LB Media Group, LLC has evolved and grown from 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. We provide retention tools to those companies that include 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. 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, and its progressive web applications, host a robust search algorithm like popular travel or hotel sites, where our clients' and 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 solution 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. Through this application we have been able to reduce costs, increase customer retention, and improve deliverability for our clients. In March of 2023 we launched our total network program that posts SMS/MMS messages directly to Leafbuyer.com from our texting and loyalty platform. This gives our customers the ability to reach a brand-new audience and also gain signups through Leafbuyer.com. This gives us a competitive advantage over other texting companies and provides fresh content daily to users of Leafbuyer.com. In 2024 and 2025 Leafbuyer entered into several agreements with POS companies and value-added resellers (VAR) to offer white label and provider services to their customers. This has helped expand Leafbuyers sales footprint by allowing our channel partners to offer Leafbuyer solutions through their platforms.

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 Fortune Business Insights to reach a global market size of 444.34 billion by 2030, with a 34.03% CAGR. Our founders and our Board of Directors have been, and will continue to be, aggressive in pursuing long-term opportunities.

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We plan to grow organically through the aggressive deployment of sales and marketing resources into legal cannabis states as well as adding new feature product sets to increase revenue from our current client base. 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. The company does see headwinds on the horizon in terms of decreased market demand for texting products across the market. With the start of mandatory DLC registration, some customers have opted out of service contracts due to the increased scrutiny of marketing messages. The company's hope is this is a temporary pullback in ad spending and continued growth can possibly occur in the future. The company has pivoted some sales efforts to lower margin but higher value VAR relationships.

The accompanying financial statements have been prepared assuming that we will continue as a going concern. As discussed in Note 1 of the financial statements, we have suffered recurring losses from operations and have a significant accumulated deficit. These factors raise substantial doubt about our ability to continue as a going concern. Management's plans regarding 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.

Results of Operations for the years ended June 30, 2025, versus June 30, 2024

		Year Ended				Year Ended
		June 30, 2025				June 30, 2024				$ Change				% Change
Revenue		$	6,471,573			$	5,601,357				870,216				16	%
Cost of revenue			3,646,763				3,549,328				97,435				3	%
Gross profit			2,824,810				2,052,029				760,781				38	%
Operating expenses:
Selling expenses			653,040				816,180				(163,140	)			(20	)%
General and administrative			1,869,593				1,822,365				47,228				3	%
Total operating expenses			2,522,633				2,638,545				(115,912	)			(4	)%
Profit (Loss) from operations			302,177				(586,516	)			888,693				151	%
Other income/(expense)			(41,505	)			(122,914	)			81,409				66	%
Net profit (loss)		$	260,672			$	(709,430	)			970,102				137	%

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Revenues

During the year ended June 30, 2025, we generated $6,471,573 in revenues, compared to revenues of $5,601,357 during the year ended June 30, 2024. The increase was primarily due to upgrades from current contracts as well as an increase in channel partner agreements. In 2024 and 2025 Leafbuyer has entered into several agreements with major POS companies to offer white label and text marketing solutions to their customers.

Gross Profit

Gross profit increased to $2,812,810 for the period ended June 30, 2025, which was an increase of $760,781 over the same period last year of June 30, 2024. Gross profit as a percentage of revenue increased from 44% to 37% for the period ended June 30, 2025 over June 30, 2024 because we negotiated more favorable pricing with our 3^rd party text providers.

Expenses

During the year ended June 30, 2025, we incurred total operating expenses of $2,522,633, compared to $2,638,545 for the period ending June 30, 2024. The decrease of $115,912 or 4% was primarily due to less sales payroll and commission expense and stock-based compensation expense.

Other expenses of $41,505 for the year end June 30, 2025 compared to other expenses of $122,914 for the same period ending June 30, 2024 because of the reduction in notes payable during the year.

Net Profit (Loss)

During the year ending June 30, 2025 we incurred a net profit of $260,672, compared to a net loss of $709,430 for the year ended June 30, 2024.

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Liquidity and Capital Resources

Our ability to continue as a going concern is dependent upon 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 intends to finance operating costs over the next twelve months from the date of the issuance of these 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 we will be able to raise any additional capital through any type of offering on terms acceptable to us. We believe that existing cash on hand will be sufficient to finance operations over the next twelve months.

At June 30, 2025 we had $853,759 in cash and cash equivalents.

Cash Flows

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

		Year Ended June 30,
		2025				2024
Net cash provided (used) in operating activities		$	855,488			$	(131,136	)
Net cash used in investing activities		$	-			$	-
Net cash (used) by financing activities		$	(167,061	)		$	(149,244	)
Net change in cash and cash equivalents		$	696,457			$	(280,380	)

As of June 30, 2025, we had $853,759 in cash and cash equivalents and a working capital deficit of $1,042,874. We are dependent on funds raised through equity financing. Our cumulative net loss of $24,884,457 was funded by equity financing.

During the year ended June 30, 2025, net cash provided from operations was $855,488 compared to net cash used from operations of $131,136 for the same period ending June 30, 2024. The difference is primarily because of the lower net profit from operations realized in fiscal year 2025.

During the years ended June 30, 2025 and 2024, we did not use any cash for investing activities.

Net cash flow used for financing activities for the year ended June 30, 2025 was $167,061 compared to cash used for financing activities during the same period in 2024 of $149,244. The difference is primarily because less cash was used to reduce debt obligations.

Our increase in cash and cash equivalents for the year ended June 30, 2025, was primarily net cash provided from operating activities.

Our ability to continue as a going concern is dependent upon 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 intends to finance operating costs over the next twelve months from the date of the issuance of these consolidated financial statements with existing cash on hand and/or the private placement of common stock. There is, however, no assurance that we will be able to raise any additional capital through any type of offering on terms acceptable to us, as we believe that the existing cash on hand will be sufficient to finance operations over the next twelve months.

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Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Critical Accounting Policies

Our audited financial statements are affected by the accounting policies used and the estimates and assumptions made by management during their preparation. A complete summary of these policies is included in Note 2 of the notes to our audited financial statements. We have identified below the accounting policies that are of particular importance in the presentation of our financial position, results of operations and cash flows, and which require the application of significant judgment by our management.

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.