10-Q: Leafbuyer Technologies Reports Net Income for Six Months Ended December 31, 2024, Driven by Revenue Growth

Leafbuyer Technologies, Inc. reports a net income of $86,317 for the six months ended December 31, 2024, a significant improvement compared to a net loss of $618,608 for the same period in 2023, driven by a 28% increase in revenue.

Summary

• Leafbuyer Technologies, Inc. reported its Form 10-Q for the quarterly period ended December 31, 2024.
• The company provides online resources for cannabis deals and operates a marketing technology platform for dispensaries and product companies.
• For the six months ended December 31, 2024, Leafbuyer generated revenues of $3.3 million, a 28% increase compared to $2.6 million in the same period of 2023.
• The company achieved a net income of $86,317 for the six months ended December 31, 2024, compared to a net loss of $618,608 for the same period in 2023.
• Gross profit increased to $1.5 million, up from $804,942 in the prior year period.
• Operating expenses remained relatively stable at approximately $1.4 million.
• As of December 31, 2024, the company had $450,481 in cash and cash equivalents and a working capital deficit of $1,451,445.
• The company's ability to continue as a going concern is dependent on generating profitable operations and/or obtaining necessary financing.
• The company is pushing into all legal cannabis states and developing innovative technologies.
• The company extended its Denver, Colorado headquarter lease for 12 months through December 31, 2024.

Sentiment

Score: 7

Explanation: The document shows a positive shift in financial performance with increased revenue and a move to net income. However, the going concern warning and working capital deficit temper the overall sentiment.

Positives

• The company achieved net income of $86,317 for the six months ended December 31, 2024, compared to a net loss of $618,608 for the same period in 2023.
• Revenue increased by 28% to $3.3 million for the six months ended December 31, 2024.
• Gross profit increased by 87% to $1.5 million for the six months ended December 31, 2024.
• The company reduced its notes payable to related parties by $137,817 during the six months ended December 31, 2024.
• The company realized more gross profit during the six months ending December 31, 2024 compared to the same period in 2023 which provided cash from operating activities and allowed the Company to pay down more debt in 2024 than 2023.

Negatives

• The company has a working capital deficit of $1,451,445 as of December 31, 2024.
• The company has an accumulated deficit of $25,058,812 as of December 31, 2024.
• The company's ability to continue as a going concern is dependent on generating profitable operations and/or obtaining necessary financing.

Risks

• The company's ability to continue as a going concern is dependent on generating profitable operations and/or obtaining necessary financing.
• The company operates in a rapidly evolving and highly regulated industry.
• The company is dependent on funds raised through equity financing, and there is no assurance that the company will be able to raise additional capital.
• The company has a tax contingency related to stock options granted below fair market value, and the possible exposure and necessary expense accrual for the related tax, penalties and interest has not been determined.

Future Outlook

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.

Management Comments

• 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.

Industry Context

The company operates in the cannabis industry, which is rapidly evolving and highly regulated. The industry is estimated to exceed $70 billion in revenue by 2028.

Comparison to Industry Standards

• It is difficult to compare Leafbuyer's results directly to industry standards due to the limited number of publicly traded companies with similar business models in the cannabis marketing technology sector.
• Companies like Weedmaps and Jane Technologies operate in similar spaces, but their financial details are not always directly comparable.
• Grandviewresearch.com estimates the cannabis industry to exceed $70 billion in revenue by the year 2028, suggesting significant growth potential for companies in this sector.

Legal Proceedings

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

Related Party Transactions

• The Company had notes payable to related parties, including the Chief Executive Officer and Chief Technology Officer.
• During the six months ended December 31, 2024, the company paid $152,439 to reduce related parties debt.

Stakeholder Impact

• Shareholders: The improved financial performance could positively impact shareholder value.
• Employees: Continued operation and expansion could provide job security and growth opportunities.
• Customers: Ongoing development of the technology platform could enhance services for dispensaries and product companies.
• Creditors: Repayment of debt improves the company's creditworthiness.

Next Steps

• The company plans to continue an aggressive push into all legal cannabis states.
• The company plans to continue to develop innovative technologies that will serve cannabis dispensaries and product companies in attracting and retaining consumers.
• Management intends to finance operating costs over the next twelve months from the date of the issuance of these unaudited condensed financial statements with existing cash on hand and/or the private placement of common stock or obtaining debt financing.

Key Dates

Keywords

cannabis, marketing technology, revenue, net income, financial results, Leafbuyer Technologies, dispensaries, EIDL Loan, going concern, text services