Leafbuyer Technologies Inc (OTCMKTS:LBUY), the cannabis company, has excited Wall Street after it put out a new mobile App that helps cannabis consumers find deals and cannabis information. The company is also expanding into the West Coast legal cannabis markets. The share price went up from $1.00 to $2.37 as of August 3, 2017. Have a look at the recent share price action.
Business
Leafbuyer Technologies, Inc. was created from the merger between AP Event Inc. and LB Media Group, LLC, which was closed on March 23, 2017. The following terms included in the Agreement and Plan of Merger were noted in the last annual report (Note the amount paid and the number of shares used):
"Cash in the amount of Six Hundred Thousand Dollars ($600,000); 2,351,355 newly-issued, pre-split shares of the Registrant’s Common Stock (the “Merger Shares”); and 324,327 pre-split shares of the Registrant’s Series A Preferred Stock, par value $0.001 per share (the “Series A Shares,” and collectively with the Merger Shares, the “Merger Consideration”). Pursuant to the terms of the Merger Agreement, LB Media agreed to retire 5,000,000 shares of Common Stock of the Registrant held immediately prior to the Merger." Source
What's the company's business objective? The company describes its business in the following way:
"We are focused on providing valuable information for the savvy cannabis consumer looking to make a purchase via deals and a dispensary database. We connect consumers with dispensaries by working alongside businesses to showcase their unique products and build a network of loyal patrons. Our national network of cannabis deals and information reaches millions of consumers monthly." Source
According to the same document, LB Media was founded in 2012 by tech and industry veterans. Its headquarters is located in Greenwood Village, Colorado. Have a look at the following video.
https://youtu.be/hy8wtEuR7bM
Recent Developments
On August 2, 2017, the company made the share rebound by announcing that it would be expanding into West Coast legal cannabis markets. Kurt Rossner, CEO, made the following interesting comments about the product and the company's new expansion:“As markets become recreational, the rules change. Potential consumers increase from a list of patients with a medical marijuana card, to any consumer over the age of 21. Many consumers new to cannabis find it challenging to find accurate information about products, prices and where to find the best deals. As an online resource, Leafbuyer helps the consumer research and find answers to cannabis related questions from the privacy of their mobile phone or desktop. We are excited about the expansion and have deployed sales teams in each market. We continue to believe that face to face interaction with potential and current clients is the best way to gain their trust.”The market reaction was astonishing the following day. The share price went from $1.80 to touch the level of $2.75. On top of it, more than 1.0 million shares changed hands. Have a look at it:
Something similar happened in July. On July 18, 2017 LBUY announced the launch of its mobile App, which complements its website. Three main sectors are included in the App: "a deal-searching tool, a dispensary locator (both with a matching map view), and a strain search engine." The iOS version and the Android version are already in the Google Play store. Kurt Rossner, CEO for Leafbuyer, quoted:
"While the Leafbuyer.com website is already heavily optimized for mobile traffic, we wanted to provide an alternate, streamlined tool for users seeking location and strain information with the ability to save their favorites. We are very excited to add this tool that will showcase the power of our growing national network of cannabis dispensaries and product companies," Source
More great news was put out on July 13, 2017. LBUY signed a collaboration agreement with SpringBIG, which is innovator in loyalty marketing technology, utilizes SMS, mobile applications, and other tools. Will the company capture new customers? This is what Jeffrey Harris, co-founder, and CEO of SpringBIG, explained:
"Dispensaries typically lack advanced sales and marketing tools to capture new customers and keep them returning that larger national retailers possess. This partnership between SpringBIG and Leafbuyer helps to level the playing field for the cannabis retail community" Source
At this particular time, the market did not push up the share price as much as in other two situations. But, we still believe that the agreement may be very good for the revenue line of LBUY.Financial SituationWe could find the financial statements in the last 10-Q. Note the amount of cash hidden in the balance sheet, and the amount of total assets:
Current assets:
Cash and cash equivalents
$
224,401
$
52,360
Prepaid expenses and other
3,947
5,591
Total current assets
228,34 8
57,951
Noncurrent assets:
Fixed assets, net of accumulated depreciation of $0
1,500
--
Total assets
$
229,848
$
57,951
SourceOn the liability side, we need to note that the net asset is positive and the fact that the company does not seem to have long term debt:
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
4,861
$
--
Accrued liabilities
59,243
10,999
Deferred revenue
41,899
127,184
Total liabilities
106,003
138,183
SourceConclusionLeafbuyer Technologies, Inc. has an interesting product and is also developing its business. The collaboration agreement with SpringBIG, the new App and its expansion into West Coast legal cannabis markets are all big positives. On the top of it, the company has cash on the balance sheet, no long term debt, and positive net asset per share. The issue we see is that the company now commands a market cap of $90 million. With just $224k in cash on the balance sheet, it looks like the stock has gotten ahead of itself. We recommend booking profits in LBUY.We will be updating our subscribers as soon as we know more. For the latest updates on LBUY, sign up below!Image courtesy of GotCredit via FlickrDisclosure: We have no position in LBUY and have not been compensated for this article.
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