The Company

9 Months Ended

Sep. 30, 2015

1.	The Company

Le@P Technology, Inc. (the “Company”) currently has no business operations, no revenues or revenue-producing activities. As further discussed below, the Company has limited cash, and ongoing expenses as well as substantial indebtedness and liabilities.

As previously reported initially in the Company’s Current Report on Form 8-K dated December 17, 2014 (the “December 2014 8-K”), the M. Lee Pearce Living Trust (the “Majority Stockholder Trust”), of which the Company’s indirect and beneficial majority stockholder, M. Lee Pearce, M.D. (“Dr. Pearce”), is the 100% beneficial owner (Dr. Pearce, together with entities owned or controlled by him that own capital stock of the Company, are collectively referred to as the “Majority Stockholder”), provided the Company with a $150,000 loan in December 2014 (the “December 2014 Loan”), on the terms disclosed (including a 3.75% interest rate and maturity date for principal and all accrued interest of March 31, 2016). The Company has received no additional loans, advances or funding from the Majority Stockholder Trust or any other party since December 2014, and neither the Majority Stockholder Trust nor any other party has made any commitment or undertaken any obligation to provide additional funding or financing to the Company (or to extend the maturity dates on existing indebtedness). Based on the Company’s year-to-date and anticipated operating expenses and management’s internally prepared cash budget for the 6-month period ending March 31, 2016 (the “6-month Cash Budget”), management believes that the Company’s current cash and cash equivalents will be sufficient to fund the Company’s working capital requirements through March 31, 2016, but will not be sufficient to repay the $3,844,695 principal amount and accrued interest thereon as of September 30, 2015 due on March 31, 2016 in connection with the December 2014 Parkson Replacement Note (defined below in this Note 1) and the 2014 Combined Promissory Note (defined in Note 3 below). The Company’s 6-month Cash Budget includes allocations for the funding of (i) up to $175,000 for the investigation and initial pursuit of possible acquisition, joint venture and investment opportunities as discussed further below (including due diligence, investigation and initial/preliminary legal expenses, but not purchase price or legal or accounting expenses associated with negotiating, reaching a definitive agreement regarding or consummating any such transaction), and (ii) $25,000 for limited improvement (including permitting and land use-related fees, but not including any construction or physical development costs) regarding the parcel of real property located in Broward County, Florida (the “Real Property”) owned by the Company’s wholly-owned subsidiary, Parkson Property LLC (“Parkson”).

During the remainder of 2015, the Company’s Board of Directors (the “Board” or “Board of Directors”) plans to continue to consider, subject to budget and cash constraints, potential acquisition and possibly joint venture and investment opportunities (particularly those in the health care technology, products and services and life sciences arenas) (“Opportunities”) that may come to the attention of Board members or management. This may include Opportunities introduced or referred by Dr. Pearce (or his network of contacts). The Board from time to time may also consider and evaluate other alternatives with respect to the Company and its future. The Board held a number of discussions regarding the Company’s consideration of possible Opportunities during 2014 and the first three calendar quarters of 2015 with both management and, through a Board member, with Dr. Pearce, but, as of September 30, 2015, the Company had not identified, and was not conducting due diligence with respect to or pursuing, any specific Opportunities. As noted above, the Company’s 6-month Cash Budget includes an allocation of up to $175,000 for limited funding of the investigation and initial pursuit of possible Opportunities. The ability of the Company to identify, reach (preliminary or definitive) agreement on and/or ultimately consummate any such Opportunity is dependent upon, among other things, its ability to obtain additional funding and financing for, and to source, negotiate and execute on, such Opportunities (and to fund and provide for post-transaction personnel, support, working capital and other needs as applicable).

The only material asset of the Company (other than cash and cash equivalents and prepaid expenses) is the Real Property (classified as property and equipment in our balance sheet), which is owned by the Company’s wholly-owned subsidiary, Parkson. The Real Property is zoned light industrial, consists of approximately one and one-third acres and is currently undeveloped and unleased. In order to lease the Real Property, certain regulatory compliance and possibly development and entitlement matters would need to be addressed (and the expenses associated therewith paid). The Real Property is encumbered by a note (as discussed and defined further in Note 3 below, the “December 2014 Parkson Replacement Note”) and related mortgage in the aggregate principal amount as of September 30, 2015 of $881,845. The December 2014 Parkson Replacement Note bears interest at the rate of 3.75% per annum and matures (both principal and all accrued interest) on March 31, 2016 (reflecting an extension of the maturity date under the previous replaced note). Based on an October 2014 independent appraisal of the fair market value of the Real Property and an unsolicited conditional offer received from a third party to purchase the Real Property received in September 2014, the indebtedness evidenced by the December 2014 Parkson Replacement Note exceeds the value of the Real Property. The Company realizes no revenue associated with the Real Property (and, at present, there is no prospect of realizing any such revenue), despite having operating, financing and insurance costs associated with the Real Property. As noted above, the Company’s 6-month Cash Budget includes an allocation of $25,000 for limited development costs (including permitting and land use-related fees, but not including any construction or physical development costs) associated with the Real Property. At present, there is no plan to develop, improve or lease all or any portion of the Real Property.

Operating Losses and Cash Flow Deficiencies

As noted above and in previous reports filed by the Company with the Securities Exchange Commission (the “SEC”), the Company currently has no business operations, no revenues or revenue-producing activities, and has limited cash, and ongoing expenses as well as substantial indebtedness and liabilities. Throughout its recent history, the Company has relied entirely upon the Majority Stockholder Trust (and other affiliates of Dr. Pearce) to fund working capital and expenses (and to extend maturities on indebtedness owing to the Majority Stockholder Trust and other affiliates of Dr. Pearce), acting in its (and their) discretion. The Company has received no loans, advances or funding, from the Majority Stockholder Trust or any other party, since December 2014. Neither the Majority Stockholder Trust nor any other party has made any commitment or undertaken any obligation to provide additional funding or financing to the Company (or to extend the maturity dates on existing indebtedness), including in connection with working capital needs, preparing, negotiating, reaching a definitive agreement with respect to or consummating any Opportunities or furthering the commercial development or improvement of the Real Property. There can be no assurance that the Majority Stockholder Trust (or any other affiliate of Dr. Pearce or any other party) will provide funding or financing to the Company, or that the Majority Stockholder Trust (or any other affiliate of Dr. Pearce) will agree to extend the maturity dates on any existing indebtedness. In addition, if the Majority Stockholder Trust (or any affiliate of Dr. Pearce), in its discretion, were to provide or facilitate any such additional funding or financing, there can be no assurance that the Majority Stockholder Trust (or such affiliate) would continue to do so (or extend maturity dates on existing indebtedness) in the future, or regarding the amount, terms, restrictions or conditions of any such funding or financing. The Company’s sourcing of additional funding or financing to enable it to fund its working capital requirements beyond March 31, 2016 may require significant effort, costs and expenditures, and if the Company succeeds in obtaining such funding or financing, the terms and conditions could be onerous and result in substantial dilution of existing capital stock positions as well as increased interest expense.

LEAP TECHNOLOGY INC / DE 10-Q