BOTX 10-K & 10-Q changes, risk factors and insider trading

We have minimal financial resources. Our company financial statements includesinclude a footnote disclosure stating that there is substantial doubt about our ability to continue as a going concern.

Leafbuyer Technologies, Inc. operates in a highly regulated industry, is an early-stage company and has minimal financial resources. We had a cash balance of $165,332$853,759 as of June 30, 2024.2025. We had an accumulated deficit of $25,247,214$24,884,457 atas of June 30, 2024.2025. We may seek additional financing. The financing sought may be in the form of equity or debt financing from various sources yet unidentified. We cannot assure you that we will generate sufficient revenue or obtain the necessary financing to continue as a going concern.

Leafbuyer’s operations and business strategy are completely dependent upon the knowledge, Technology Development and business connections of Rossner, Goerner and Breen our executive officers. They are under no contractual obligation to remain employed by Leafbuyer. If they should choose to leave us for any reason or become ill and unable to work for an extended period of time before we have hired additional personnel, our operations could likely fail. Even if we can find additional personnel, it is uncertain whether we could find someone who could develop our business along the lines described in this Annual Report. We will likely fail without the services of our current executive officers (or hiring appropriate replacement(s)).

Our current Board of Directors and executive officers hold approximately 25.8% of the voting power of our outstanding voting capital stock as of June 30, 2024.2025. These parties have a controlling influence in determining the outcome of any corporate transaction or other matters submitted to our stockholders for approval, including mergers, consolidations and the sale of all or substantially all our assets, election of directors, and other significant corporate actions. As such, these shareholders have the power to prevent or cause a change in control; therefore, without their consent we could be prevented from entering into transactions that could be beneficial to us. The interests of our executive officers may give rise to a conflict of interest withbetween us and our shareholders.

On a letter from the SEC dated May 3rd, 2024, we disclosed the firing of our audit firm BF Borgers on May 8th,8, 20242024, and the hiring of our current new firm BCRG Group (BCRG) to re-review and re-audit our 2023 and 2024 3rd quarter 10-Q, as well as our 2023 and 2024 10-K filings. We expecthad no significant or material changes to our reportingreported numbers.

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 transactiontransaction, 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, 20202020, 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.

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 newbrand-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.

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 197444.34 billion by 2028.2030, 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.

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.

During the year ended June 30, 2024,2025, we generated $5,601,357$6,471,573 ofin revenues, compared to revenues of $5,090,846$5,601,357 during the year ended June 30, 2023.2024. The increase was primarily due to theupgrades 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 servicesmarketing whichsolutions isto uptheir 10% over the prior year.customers.

Gross profit decreasedincreased to $2,052,029$2,812,810 for the period ended June 30, 2024,2025, which was an decreaseincrease of $196,031$760,781 over the same period last year of June 30, 2023.2024. Gross profit as a percentage of revenue decreasedincreased from 44% to 37% for the period ended June 30, 20242025 over June 30, 20232024 because ofwe thenegotiated increasemore offavorable pricing with our 3rd party text service expense.providers.

During the year ended June 30, 20242025, we incurred atotal netoperating lossexpenses of $709,430,$2,522,633, compared to a net loss of $585,211$2,638,545 for the yearperiod endedending June 30, 2023.2024. The decrease of $115,912 or 4% was primarily due to less sales payroll and commission expense and stock-based compensation expense.

During the year ended June 30, 2024,2025, net cash provided from operations was $855,488 compared to net cash used from operations wasof $131,136 compared to net cash provided from operations of $422,592 for the same period ending June 30, 2023.2024. The difference is primarily because of the lower net lossprofit from operations realized in fiscal year 2024.2025.

Our decreaseincrease in cash and cash equivalents for the year ended June 30, 2024,2025, was primarily net cash usedprovided from operating activities.

Our unaudited interim condensed financial statements for the sixnine months ended DecemberMarh 31, 20252026 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, 2025. Our unaudited 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, 2025, as filed in our annual report on Form 10-K.

Comparison of results of operations for the three months ended DecemberMarch 31, 20252026 and 20242025

During the three months ended DecemberMarch 31, 2025,2026, we generated approximately $962,800$1.1 million of revenue, compared to revenues of $1.7 million during the three months ended DecemberMarch 31, 2024.2025. In April 2025, the final phase of FCC 23-107 from the Federal Communications Commission took effect. This, along with the ruling that all accounts must now be entered into the campaign registry for 10DLC compliance. This altered the way messages are sent, adding a mandatory age gate in front of all messaging solutions. While these moves do provide a benefit by reducing spam and increasing through-put, the regulations directly influence how companies approach SMS/MMS marketing strategies. This change effected all companies in the text marketing space. Over the last 5 months Leafbuyer has been on the front end of this change, working with our customers to navigate this new landscape. Our revenue decrease is primarily the result of customers sending less messages or looking for alternatives with competitors trying to circumvent the regulations. We have completed a restructuring of our platform to ensure Leafbuyer Technologies Inc is 100% compliant and existing customers are able to send SMS or MMS messages without having to worry about compliance. Some customers have returned after realizing this change affects the entire text marketing industry, and after empty promises by competitors were found to be non-sustainable. With these changes and the addition of several channel partner agreements we expect to earn back some of this lost revenue moving forward.

Gross profit decreased to $445,134$605,45311 for the period ended DecemberMarch 31, 2025,2026, which was a decrease over the same period ended DecemberMarch 31, 20242025 of $309,064$205,416 primarily because of the decreaselower inrevenue revenue.discussed above.

During the three months ended DecemberMarch 31, 2025,2026, we incurred total operating expenses of $511,014$481,069 compared to $657,530$558,963 for the same period ending in 2024.2025. The decrease in operating costs is primarily because of lower stock- based compensation expense and less sales commission because of lower revenue.

Interest expense was $18,941 for the three months ended DecemberMarch 31, 20252026 compared to interest expense of $22,570$18,094 for the same period ending DecemberMarch 31, 2024,2025. Other income increased $32,679 primarily because of the reductionclass action lawsuit settlement received in notesconnection payable duringwith the year.Companies former public accounting firm.

During the three months ended DecemberMarch 31, 20252026 we realized a net lossincome of $80,638,$139,419, compared to net income of $74,815$235,154 for the three months ended DecemberMarch 31, 2024.2025.

Comparison of results of operations for the sixnine months ended DecemberMarch 31, 20252026 and 20242025

During the sixnine months ended DecemberMarch 31, 2025,2026, we generated approximately $1.9$3.1 million of revenue, compared to revenues of $3.3 million during the sixnine months ended DecemberMarch 31, 2024.2025. In April 2025, the final phase of FCC 23-107 from the Federal Communications Commission took effect. This, along with the ruling that all accounts must now be entered into the campaign registry for 10DLC compliance. This altered the way messages are sent, adding a mandatory age gate in front of all messaging solutions. While these moves do provide a benefit by reducing spam and increasing through-put, the regulations directly influence how companies approach SMS/MMS marketing strategies. This change effected all companies in the text marketing space. Over the last 5 months Leafbuyer has been on the front end of this change, working with our customers to navigate this new landscape. Our revenue decrease is primarily the result of customers sending less messages or looking for alternatives with competitors trying to circumvent the regulations. We have completed a restructuring of our platform to ensure Leafbuyer Technologies Inc is 100% compliant and existing customers are able to send SMS or MMS messages without having to worry about compliance. Some customers have returned after realizing this change affects the entire text marketing industry, and after empty promises by competitors were found to be non-sustainable. With these changes and the addition of several channel partner agreements we expect to earn back some of this lost revenue moving forward.

Gross profit decreased to $939,351$1,511,804 for the sixnine months ended DecemberMarch 31, 2025,2026, which was a decrease over the same period ended DecemberMarch 31, 20242025 of $564,128$769,544 primarily because of the decrease in revenue.

During the sixnine months ended DecemberMarch 31, 2025,2026, we incurred total operating expenses of $1.0$1.5 compared to $1.4$1.9 million for the same period ending in 2024. The decrease in operating costs is primarily because of lower stock-based compensation expense and less sales commission because of lower revenue.

Interest expense was $37,882$56,823 for the sixnine months ended DecemberMarch 31, 20252026 compared to interest expense of $43,556$61,605 for the same period ending DecemberMarch 31, 2024,2026, because of the reduction in notes payable during the year. Other income increased $32,679 primarily because of the class action lawsuit settlement received in connection with the Companies former public accounting firm.

During the sixnine months ended DecemberMarch 31, 20252026 we realized a net lossincome of $124,623,$14,796, compared to net income of $86,317$321,471 for the sixnine months ended DecemberMarch 31, 2024.2025.

At DecemberMarch 31, 20252026 we had $969,092$956,154 in cash and cash equivalents.

As of DecemberMarch 31, 2025,2026, we had $969,092$956,154 in cash and cash equivalents and a working capital deficit of $1,038,787.$906,679. We are dependent on funds raised through equity financing. Our accumulated deficit of $25,009,080$24,869,661 was funded by equity financing and we reported a net loss from operations of $124,623$14,796 for the sixnine months ended DecemberMarch 31, 2025.2026. During the sixnine months ending DecemberMarch 31, 2025, we paid $14,622$21,933 to reduce the SBA debt, and we did not expend any monies through investing activities (acquiring assets).

We had no off-balance sheet arrangements as of DecemberMarch 31, 20252026 and June 30, 2025.