UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2016

☐	Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission file number 0-5667

Le@P Technology, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware		65-0769296
(State or Other Jurisdiction of		(I.R.S. Employer Identification No.)
Incorporation or Organization)

5601 N. Dixie Hwy., Suite 411, Ft. Lauderdale, FL		33334
(Address of Principal Executive Offices)		(Zip Code)

(954) 771-1772

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant has been required to submit and post such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o		Accelerated filer o		Non-accelerated filer o		Smaller reporting company ☒
				(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☒ No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class A Common Stock, par value $0.01 per share: 65,195,909 shares outstanding as of November 14, 2016

Class B Common Stock, par value $0.01 per share: 25,000 shares outstanding as of November 14, 2016

LE@P TECHNOLOGY, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

Page Number

PART I.	FINANCIAL INFORMATION	4

Item 1.	Condensed Consolidated Financial Statements	4

	Condensed Consolidated Balance Sheets at September 30, 2016 (Unaudited) and December 31, 2015	4

	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2016 and 2015 (Unaudited)	6

	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2016 and 2015 (Unaudited)	7

	Notes to Condensed Consolidated Financial Statements at September 30, 2016 (Unaudited)	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16

Item 4.	Controls and Procedures	16

PART II.	OTHER INFORMATION	17

Item 1.	Legal Proceedings	17

Item 1A.	Risk Factors	17

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17

Item 3.	Defaults Upon Senior Securities	17

Item 4.	Mine Safety Disclosures	17

Item 5.	Other Information	17

Item 6.	Exhibits	18

	SIGNATURES	22

	EXHIBIT 31.1	23

	EXHIBIT 32.1	24

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PART I.

FINANCIAL INFORMATION

Item 1.

Condensed Consolidated Financial Statements

Le@P Technology, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

	(Unaudited) September 30, 2016		December 31, 2015


Assets

Current assets:
Cash and cash equivalents	$	706,698	$	548,514
Prepaid expenses		15,873		14,887
Total current assets		722,571		563,401

Property held for sale		-		400,000

Other assets		170		170

Total assets	$	722,741	$	963,571

See notes to condensed consolidated financial statements.

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Le@P Technology, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(continued)

	(Unaudited) September 30, 2016			December 31, 2015



Liabilities and Stockholders’ Deficiency
Current liabilities:
Accounts payable and accrued expenses	$	17,254		$	29,139
Accrued professional fees		-			7,401
Accrued compensation and related liabilities		-			15,510
Short-term notes payable to related party		3,063,424			-
Short-term accrued interest payable to related party		57,702			-
Total current liabilities		3,138,380			52,050

Note payable to related party		-			3,063,424
Note payable to related party related to property held for sale		-			916,183

Long-term accrued interest payable to related party		-			273

Total liabilities		3,138,380			4,031,930

Commitments and contingencies

Stockholders’ deficiency:
Preferred stock, $0.001 par value per share. 25,000,000 shares authorized, and 2,170 shares issued and outstanding at September 30, 2016 and December 31, 2015.		2,170,000			2,170,000
Class A Common Stock, $0.01 par value per share. 149,975,000 shares authorized, and 65,280,759 shares issued and outstanding at September 30, 2016 and December 31, 2015.		652,808			652,808
Class B Common Stock, $0.01 par value per share. 25,000 shares authorized, issued and outstanding at September 30, 2016 and December 31, 2015.		250			250
Additional paid-in capital		35,981,387			35,981,387
Accumulated deficit		(41,170,624	)		(41,823,344	)
Treasury stock, at cost. 84,850 Class A shares at September 30, 2016 and December 31, 2015.		(49,460	)		(49,460	)
Total stockholders’ deficiency		(2,415,639	)		(3,068,359	)
Total liabilities and stockholders’ deficiency	$	722,741		$	963,571

See notes to condensed consolidated financial statements.

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Le@P Technology, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015

Revenue	$	-		$	-		$	-		$	-

Expenses:
Salaries and benefits		5,683			(1,922	)		33,179			15,750
Professional fees		32,121			21,221			74,206			103,700
General and administrative		27,235			32,821			83,537			100,746
Total expenses		65,039			52,120			190,922			220,196

Loss from operations		(65,039	)		(52,120	)		(190,922	)		(220,196	)

Other income (expense):
Interest expense		(23,257	)		(35,296	)		(72,866	)		(104,737	)
Total other income (expense)		(23,257	)		(35,296	)		(72,866	)		(104,737	)

Loss before income taxes		(88,296	)		(87,416	)		(263,788	)		(324,933	)

Provision for income taxes		-			-			-			-

Net loss		(88,296	)		(87,416	)		(263,788	)		(324,933	)

Gain (loss) from discontinued operations		921,313			(2,447	)		916,508			(7,342	)

Net income (loss)		833,017			(89,863	)		652,720			(332,275	)

Dividends undeclared on cumulative preferred stock		54,250			54,250			162,750			162,750

Net income (loss) attributable to common stockholders	$	778,767		$	(144,113	)	$	489,970		$	(495,025	)

Basic and diluted net income (loss) per share:
Net income (loss) per common share	$	0.01		$	(0.00	)	$	0.01		$	(0.00	)
Net income (loss) attributable to common stockholders	$	0.01		$	(0.00	)	$	0.01		$	(0.01	)

Basic and diluted weighted average shares outstanding		65,305,759			65,305,759			65,305,759			65,305,759

See notes to condensed consolidated financial statements

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Le@P Technology, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Nine months Ended September 30,
	2016			2015
Cash flows from operating activities:
Net income (loss)	$	652,721		$	(332,275	)
Adjustments to reconcile net income (loss) to net cash used in operating activities		-			-
Gain on sale of property held for sale		(923,154	)		-
Changes in operating assets and liabilities:
Prepaid expenses		(986	)		(9,246	)
Accounts payable and accrued expenses		(11,885	)		(11,680	)
Accrued professional fees		(7,401	)		(19,649	)
Accrued compensation and related liabilities		(15,510	)		(7,450	)
Accrued interest payable to related party		57,429			104,737
Net cash used in operating activities		(248,787	)		(275,563	)

Cash flows from investing activities:
Proceeds from sale of property held for sale		1,323,154			-
Net cash provided by investing activities		1,323,154			-

Cash flows from financing activities:
Principal payment on note payable, related party		(916,183	)		-
Net cash used in financing activities		(916,183	)		-

Net increase (decrease) in cash and cash equivalents		158,184			(275,563	)
Cash and cash equivalents at beginning of period		548,514			789,195
Cash and cash equivalents at end of period	$	706,698		$	513,632

Supplemental disclosure of cash flow information
Interest paid	$	15,437		$	-
Income taxes paid	$	-		$	-

See notes to condensed consolidated financial statements.

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Le@P Technology, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

September 30, 2016
(Unaudited)

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 in the Company’s Current Report on Form 8-K and 8-K/A dated December 31, 2015 (the “December 2015 8-K”), in December 2015 the Company received a $100,000 loan (the “December 2015 Loan”), on the terms disclosed (including a 2.50% interest rate and maturity date for principal and all accrued interest of March 31, 2017), from 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”). The Majority Stockholder’s beneficial ownership of the Company’s issued and outstanding capital stock is reported under Item 12 (in the section entitled “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters”) below. The Company has received no additional loans, advances or funding, from the Majority Stockholder Trust or any other party, since December 2015.

As reported on the Form 8-K dated April 15, 2016 (the “April 2016 8-K), the Company entered into a material definitive agreement on April 15, 2016 to sell real property owned by the Company’s wholly-owned subsidiary Parkson Property, L.L.C. The contract provided for (i) a gross sale price of $1.4 million (all cash, with no financing contingency), (ii) an escrow deposit from Buyer of $100,000, (iii) a 90-day “free look” period (the “Inspection Period”) during which Buyer could conduct a Phase I environmental assessment and other tests, surveys, investigations and inspections, (iv) conveyance of the property by special warranty deed at a closing to occur within fifteen (15) days of the end of the Inspection Period, (v) closing costs to be paid by the parties, and (vi) other matters included in Florida Association of Realtors form contracts addressing the sale and purchase of vacant land. In addition, commissions of 3% were to be paid to the Buyer’s agent and 3% to the Company’s agent. The Company’s agent was Marquette Realty Advisors, Inc. The Company’s Class B Director, Chairman and President (Timothy C. Lincoln) is the principal and beneficial owner of Marquette Realty Advisors, Inc which received a $42,000 commission from the proceeds of the sale.

As reported on the Company’s Current Report on Form 8-K dated September 1, 2016, on July 14, 2016, the Buyer requested a Feasibility Extension period through August 15, 2016. The Company and Buyer entered into an amendment to the vacant land contract through August 15, 2016. In consideration for the extension, the amendment included a non-refundable $20,000 extension fee. All other amounts, terms and conditions were unamended. The Company received the $20,000 extension fee on July 22, 2016.

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The Company engaged an independent fairness expert to value the Parkson Property and to give an opinion of the fairness of the commissions to be paid. The fairness expert deemed the commissions to be paid as reasonable and customary, and the Parkson property was valued at $1,300,000.

On September 1, 2016, the Company completed the sale of the Parkson Property under the amounts, terms and conditions described above. Accordingly, the Company recognized a gain on the sale of the property of $923,154 for the three and nine months ended September 30, 2016. The Company incurred general and administrative expenses related to the property of $1,841 and $2,447 for the three months ended September 30, 2016 and 2015, respectively, and $6,646 and $7,342 for the nine months ended September 30, 2016 and 2015, respectively, which is included in gain (loss) from discontinued operations.

The Company’s total indebtedness outstanding as of September 30, 2016 was $3,063,424 (excluding accrued interest in the amount of $57,702). The Company’s indebtedness substantially exceeds the book value of its assets. As noted above, in December 2015, (i) the Company received the $100,000 December 2015 Loan from Majority Stockholder Trust, and (ii) through the December 2015 Parkson Replacement Note, the lender thereunder (an entity wholly-owned by Dr. Pearce), among other things, extended the maturity date (principal and all accrued interest) under that note from March 31, 2016 to March 31, 2017. In addition, as previously reported in the Company’s December 2015 8-K and 8-K/A, in December 2015, the Majority Stockholder Trust, among other things, agreed to extend the maturity date (principal and all accrued interest) on its other outstanding “working capital” loans to the Company (totaling $2,963,424 in principal amount as of December 31, 2015, excluding the $100,000 December 2015 Loan amount), such that the principal and all accrued interest (at the rate of 2.50% per annum) are due in one lump sum on March 31, 2017.

During 2016, the Company’s Board of Directors (the “Board” or “Board of Directors”) considered and intended to pursue, 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 have come to the attention of Board members or management, including Opportunities introduced by Dr. Pearce or his network of contacts. None of the Opportunities came to fruition.

On September 6, 2016, our board of directors unanimously approved a Plan of Dissolution subject to approval of a majority of the stockholders of the Company. On November 14, 2016, the Majority Stockholder, which holds approximately 96% of the voting power of the Company’s outstanding shares of common stock and all of the outstanding shares of our Class B Common Stock and Series A Preferred Stock, consented in writing under Section 228 of the Delaware General Corporation Law (“DGCL”) approving adoption of the Plan of Dissolution. Accordingly, no vote of any other stockholder is necessary and no additional stockholder votes on this matter will be solicited.

November 4 , 2016, has been fixed as the record date for the determination of our stockholders entitled to receive an Information Statement pursuant to the provisions of the Securities Exchange Act of 1934 with respect to the dissolution of the Company. As of the close of business on the record date, the Majority Stockholder beneficially owned, in the aggregate, 62,597,409 shares of the Company’s Class A Common Stock, representing approximately 96% of our outstanding shares of Class A Common Stock, and all of the outstanding shares of Class B Common Stock and Series B Preferred Stock.

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On November 14, 2016, the Company filed a preliminary information statement with the Securities Exchange Commission. Upon becoming final, the Information Statement will be provided to holders of the Company’s common stock pursuant to Rule 14c-2 under the Securities Exchange Act of 1934, as amended (“Rule 14c-2”). This Information Statement will contain a detailed description of the Plan of Dissolution. This Information Statement will also constitute the notice to the Company's stockholders of taking of a corporate action without a meeting by less than unanimous written consent of the stockholders, as required by Section 228(e) of the Delaware General Corporation Law. Pursuant to Rule 14c-2, the corporate actions will not be effective until at least twenty (20) calendar days after the mailing of the Information Statement to the Company’s stockholders.

The adoption of the Plan of Dissolution constitutes full and complete authority for the Board and officers and Majority Stockholder, without further stockholder action, to do and perform any and all acts, and to make, execute and deliver any and all agreements, conveyances, assignments, transfers, certificates and other documents of any kind and character that the Board or such officers deem necessary, appropriate or advisable: (i) to dissolve the Company in accordance with the laws of the State of Delaware and cause its withdrawal from all jurisdictions in which it is authorized to do business; (ii) to sell, dispose, convey, transfer and deliver all of the remaining assets and properties of the Company; (iii) to satisfy or provide for the satisfaction of the Company’s obligations in accordance with Sections 280 and 281 of the DGCL; and (iv) to distribute any properties and assets of the Company and all remaining funds pro rata to the Company’s stockholders and in accordance with the distribution rights of the Company’s then outstanding shares of capital stock.

Due to the size of our liabilities and lack of any significant assets, HOLDERS OF SHARES OF OUR COMMON STOCK HAVE NO PROSPECT OF RECEIVING A DISTRIBUTION OF ANY KIND AS A RESULT OF THE LIQUIDATION AND DISSOLUTION.

Under the Plan of Dissolution, the Company will take the following actions at such times the Board of Directors, in its sole and absolute discretion, deems necessary, appropriate or advisable:

●	file a certificate of dissolution with the Delaware Secretary of State in accordance with the Plan of Dissolution (the “Certificate of Dissolution”);

●	cease conducting normal business operations, except as may be required to wind-up our business affairs;

●	sell, exchange or otherwise dispose of all or substantially all of the Company’s non-cash property and assets, including but not limited to its remaining tangible assets, intellectual property and other intangible assets;

●

pay or make reasonable provision as reasonably likely for payment of our liabilities and obligations, including setting aside a contingency reserve, consisting of cash or other assets that our board of directors believes to be adequate for payment of our known liabilities, as well as claims that are unknown or have not yet arisen but that are likely to arise or become known to us within ten years; and

●	take all actions required or permitted under the dissolution procedures of Section 281(b) of the DGCL.

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In addition, the Company and Mary Thomas agreed to terminate her employment as the Acting Principal Financial Officer, Chief Accounting Officer, Vice-President, Treasurer and Secretary, as well as her position as a Class A Director effective at the close of business on September 1, 2016.

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 2015. 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. As a result of the approved plan of dissolution, the Majority Stockholder Trust (or any other affiliate of Dr. Pearce or any other party) does not intend to make further advances or extend the maturity dates on any existing indebtedness.

2.	Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of financial information have been included. Operating results for the nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016.

The condensed consolidated balance sheet at December 31, 2015 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements.

For further information, refer to the consolidated financial statements and footnotes thereto included in the Le@P Technology, Inc. Annual Report on Form 10-K for the year ended December 31, 2015.

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Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Recent Accounting Pronouncements

Refer to the consolidated financial statements and footnotes thereto included in the Le@P Technology, Inc. Annual Report on Form 10-K for the year ended December 31, 2015 for recent accounting pronouncements. Other pronouncements have been issued but the Company does not believe that their adoption will have a significant impact on the financial position or results of operations.

3.	Notes Payable to Related Parties

As noted above, Le@P Technology, Inc.’s wholly-owned subsidiary, Parkson, owned the Real Property. Parkson purchased the Real Property on September 28, 2001 from Bay Colony Associates, Ltd. (“Bay Colony”), an entity wholly-owned by Dr. Pearce, in exchange for a two-month note in the amount of $37,500, and a five-year note (the “Long Term Note”) and related mortgage in the amount of $712,500. The purchase price was based on an independent third-party appraisal. As previously reported in the Company’s December 2015 8-K and 8-K/A, the Long Term Note was replaced a number of times and was evidenced by the December 2015 Parkson Replacement Note (as defined above) in the principal amount of $916,183. The December 2015 Parkson Replacement Note bears interest at the rate of 2.50% per annum, with both principal and all accrued interest due in one lump sum on March 31, 2017. On September 1, 2016, the note was paid in full, along with accrued interest in the amount of $15,437, from the proceeds on the sale of the property discussed in Note 1.

As previously reported in the Company’s December 2015 8-K and 8-K/A, and as discussed above, the Majority Stockholder Trust, of which Dr. Pearce is the 100% beneficial owner, provided the Company with the $100,000 December 2015 Loan in December 2015. The Company has received no additional loans, advances or funding, from the Majority Stockholder Trust or any other party, since December of 2015.

In addition to the December 2015 Loan, the Majority Stockholder Trust previously made other working capital loans to the Company, which were, prior to their combination and extension (as described below), evidenced by a combined promissory note made by the Company in favor of the Majority Stockholder Trust and dated December 27, 2014 (in the original principal amount of $2,852,359) (the “2014 Working Capital Note”). The maturity date of the 2014 Working Capital Note was, prior to its agreed extension (as described below), March 31, 2016.

As previously reported initially in the Company’s December 2015 8-K and 8-K/A, and as discussed above, on December 31, 2015, the Majority Stockholder Trust, as holder of and payee under the 2014 Working Capital Note, agreed: (i) to extend the maturity date of the total outstanding indebtedness under the 2014 Working Capital Note from March 31, 2016 to March 31, 2017 (the “Extended Maturity Date”), and (ii) to combine the total outstanding indebtedness evidenced by and under the December 2015 Loan (as described above) and the 2014 Working Capital Note (including its outstanding principal amount and accrued interest through December 30, 2015) into a single promissory note, thereby replacing the 2014 Working Capital Note with a 2015 Combined Promissory Note (Working Capital) dated December 31, 2015 in the principal amount of $3,063,424 (the “2015 Combined Promissory Note”). The principal and all accrued interest – at the agreed rate of 2.50% per annum – under the 2015 Combined Promissory Note are due in one lump sum on the Extended Maturity Date of March 31, 2017. Other than the new (combined) principal amount, which includes the principal amount of the December 2015 Loan, the reduction of the rate to 2.50% per annum from 3.75% per annum, and the extension of the maturity date, in each case as noted above, the terms of the 2014 Working Capital Note were not changed and this note (and the obligations thereunder) is now incorporated in and replaced and evidenced by the 2015 Combined Promissory Note.

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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 2015. 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). There can be no assurance that the Majority Stockholder Trust (or any other affiliate of the Majority Stockholder or any other party) will provide funding or financing to the Company, or that the Majority Stockholder Trust (or any other affiliate of the Majority Stockholder) will agree to extend the maturity dates on any existing indebtedness. In addition, if the Majority Stockholder Trust (or any affiliate of the Majority Stockholder), in its discretion, were to provide or facilitate any such funding or financing, there can be no assurance that the Majority Stockholder Trust 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.

All of the Company’s existing outstanding indebtedness is scheduled to mature on March 31, 2017. The total amount of such indebtedness (principal and interest), all due to related parties, as of September 30, 2016 was $3,121,126.

4.	Financial Instruments and Fair Values

The fair value of a financial instrument represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Fair value estimates are made at a specific point in time, based upon relevant market information about the financial instrument.

The carrying amount of cash and cash equivalents approximates fair value due to the short-term maturities of these instruments.

The fair values of all other financial instruments, including debt, approximate their book values as the instruments are short-term in nature or contain market rates of interest.

5.	Provision for Income Taxes

The Company does not have provision for income taxes as the taxable income for the three and nine months ended September 30, 2016 will be offset by previously unrecognized net operating loss carryforwards that are available.

Item 2.

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

Forward-Looking Statements

Certain statements in Management’s Discussion and Analysis (“MD&A”), other than purely historical information, including estimates, projections, forecasts, statements relating to the plans, objectives and expected or anticipated business, operations, development, pursuits, liquidity, capital resources, financial condition or operating results of the Company, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “seek”, “estimate,” “budget,” “intend,” “strategy,” “plan,” “objective,” “goal,” “propose,” “pursuit,” “may,” “should,” “will,” “would,” “will be,” “can”, “could,” “will continue,” “will likely result,” and similar words, statements and expressions. Forward-looking statements are based on current beliefs, expectations and assumptions that are subject to risks and uncertainties that can be difficult to predict or ascertain and which may cause the actual results to differ materially from the forward-looking statements. In light of the significant uncertainties inherent in the forward-looking statements included herein particularly in view of the current state of the Company, the inclusion of such information should not be regarded as a statement by the Company or any other person that these forward-looking statements (or the Company’s goals, objectives, plans, pursuits, intentions, or other forward-looking information derived therefrom) will be achieved.

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The Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Business Strategy

On September 6, 2016, the Board of Directors unanimously approved a Plan of Dissolution subject to approval of a majority of the stockholders of the Company. On November 14, 2016, the Majority Stockholder, which holds approximately 96% of the voting power of the Company’s outstanding shares of common stock and all of the outstanding shares of our Class B Common Stock and Series A Preferred Stock consented in writing under Section 228 of the DGCL approving adoption of the Plan of Dissolution. Accordingly, no vote of any other stockholder is necessary and stockholder votes on this matter will be solicited.

Liquidity and Capital Resources

The Company’s cash and cash equivalents as of September 30, 2016 aggregated $706,698 which management believes, based on the Company’s recent and expected operating expenses and internally prepared 6-month Cash Budget, will be sufficient to fund the Company’s working capital requirements through March 31, 2017, but will not be sufficient to repay the $3,063,424 principal amount and accrued interest thereon as of September 30, 2016 due on March 31, 2017 in connection with the December 2015 Parkson Replacement Note and the 2014 Combined Promissory Note. As previously reported in the Company’s December 2015 8--K and 8-K/A and as discussed above under Note 3 (”Notes Payable to Related Parties”) to the Notes to Condensed Consolidated Financial Statements, in December 2015 the Company received the December 2015 Loan in the principal amount of $100,000, on the terms disclosed (including a 2.50% interest rate and maturity date for principal and all accrued interest of March 31, 2017) from the Majority Stockholder Trust. In the event (a) the Company does not generate revenue or income sufficient to fund its operations, activities and expenses, or (b) third-party funding or financing does not become available to the Company on terms acceptable to the Company prior to the Company exhausting its existing cash and cash equivalents, the Company will not be able (1) to pay-off its existing indebtedness when it matures (on March 31, 2017), or (2) to fund its working capital, operations or related expenses. As a result of the approved plan of dissolution, the Majority Stockholder Trust (or any other affiliate of Dr. Pearce or any other party) does not intend to make further advances or extend the maturity dates on any existing indebtedness.

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The Majority Stockholder Trust is the sole owner of the outstanding shares of the Company’s Series B Preferred Stock. Dividends on the Series B Preferred Stock are cumulative and accrue at a rate of 10% per annum on the preferred stock’s stated liquidation value of $1,000 per share and must be paid before any dividends may be paid on any other class or series of common or preferred stock; in addition, no other class or series of common or preferred stock may be redeemed or repurchased nor may the Series B Preferred Stock be altered or modified without the approval of the holder(s) of the Series B Preferred Stock. As of September 30, 2016, dividends of $3,701,250 were accumulated and unpaid on the Company’s Series B Preferred Stock. The accumulated amount, in addition to any additional amounts that may accrue, will be charged to retained earnings, if any, or additional paid-in capital, if and/or when declared by the Company’s Board of Directors.

Financial Condition at September 30, 2016 Compared to December 31, 2015

The Company’s total assets decreased from approximately $964,000 at the end of 2015 to approximately $723,000 at September 30, 2016, primarily due to the sale of the Parkson Property and payoff of the Bay Colony mortgage, reflecting the increase of cash and cash equivalents, an increase of prepaid expenses, offset by a decrease in property held for sale.

The Company’s total liabilities decreased from approximately $4,032,000 at the end of 2015 to approximately $3,138,000 at September 30, 2016, primarily due to the payoff of the Bay Colony mortgage along with the accrued interest to a related party of approximately $15,000.

The Company’s working capital decreased from approximately $511,000 at the end of 2015 to a deficit of approximately $2,416,000 at September 30, 2016, primarily reflecting a reclassification of the $3,063,424 principal amount due in connection with the December 2015 Parkson Replacement Note and the 2015 Combined Promissory Note and related accrued interest payable of $57,702 (previously classified as long-term notes payable and long-term accrued interest as of December 31, 2015), each of which is scheduled to mature on March, 31 2017, as a short-term liability (notes payable and accrued interest) and the increase of approximately $158,000 in cash and cash equivalents provided by the sale of the Parkson Property, an increase in prepaid expenses of approximately $1,000, and a decrease in accounts payable and other accrued expenses of approximately $12,000.

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Comparison of Results of Operations for the Three Months Ended September 30, 2016 to the Three Months Ended September 30, 2015

The Company’s net loss before income taxes increased from approximately $87,000 for the three months ended September 30, 2015 to approximately $88,000 for the three months ended September 30, 2016. The variance primarily reflects the increase in professional fees of approximately $11,000 and an increase in salaries of benefits of approximately $8,000, due to the sale of the Parkson Property; offset by a decrease in general and administrative expenses of approximately $6,000 and a decrease in interest expense of approximately $12,000. The Company’s net income (loss) increased from a net loss of approximately $89,000 for the three months ended September 30, 2015 to net income of approximately $921,000 for the three months ended September 30, 2016 primarily due to the gain on the sale of the Parkson Property.

Comparison of Results of Operations for the Nine Months Ended September 30, 2016 to the Nine Months Ended September 30, 2015

The Company’s net loss before income taxes decreased from approximately $325,000 for the nine months ended September 30, 2015 to approximately $87,000 for the nine months ended September 30, 2016. The variance primarily reflects a decrease in professional fees and interest expense of approximately $32,000 each, a decrease in general and administrative expenses of approximately $17,000, offset by an increase in salaries and benefits of approximately $17,000. The Company’s net income (loss) increased from a net loss of approximately $332,000 for the nine months ended September 30, 2015 to net income of approximately $653,000 for the nine months ended September 30, 2016 primarily due to the gain on the sale of the Parkson Property.

Off-Balance Sheet Arrangements

As of September 30, 2016, the Company did not have any off-balance sheet arrangements that have or are reasonably likely to have a material effect on the current or future financial condition, revenues, and expenses, results of operations, liquidity, capital expenditures, or capital resources.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Not required.

Item 4.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company maintains a system of disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). As required by Rule 13a-15(b) under the Exchange Act, management of the Company, under the direction of the Company’s Acting Principal Executive Officer, reviewed and performed an evaluation of the effectiveness of design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of September 30, 2016, the end of the period covered by this quarterly report. Based on that review and evaluation, the Acting Principal Executive Officer, along with the management of the Company, have determined that as of September 30, 2016, the disclosure controls and procedures are effective.

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Changes in Internal Controls Over Financial Reporting During Last Fiscal Quarter

Our Acting Principal Executive Officer have identified no change in the Company’s “internal control over financial reporting” (as defined in Exchange Act Rule 13a-15(f)) that occurred during the period covered by this quarterly report on Form 10-Q (this “Report”) that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II

OTHER INFORMATION

Item 1.

Legal Proceedings

As of September 30, 2016, the Company was not involved in any material claims, lawsuits or legal proceedings.

Item 1A.

Risk Factors

As a “smaller reporting company,” as defined by the Securities and Exchange Commission regulations promulgated under the Exchange Act, the Company is not required to provide the information required by this item. Notwithstanding this, this Report contains certain forward-looking statements that involve risks and uncertainties, and the Company’s business, operations and future are subject to certain risks and uncertainties, some of which are noted elsewhere in this Report. Please see the section entitled “Forward-Looking Statements” on pages 13 and 14 for important information to consider when evaluating such statements (and related notes) included in, and when considering risks and uncertainties, in connection with this Report and the future of the Company, its business and value.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

The Company did not have any unregistered sales of equity securities during the fiscal quarter ending September 30, 2016.

Item 3.

Defaults Upon Senior Securities

As of September 30, 2016, the Company did not experience any defaults with respect to any outstanding indebtedness of the Company. As of November 14, 2016, dividends of $3,701,250 were accumulated and unpaid on the Series B Preferred Stock.

Item 4.

Mine Safety Disclosures

Not applicable.

Item 5.

Other Information

None.

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Item 6.

Exhibits

3.1.1	Certificate of Incorporation of Le@P Technology, Inc., filed March 20, 1997 with the Delaware Secretary of State (incorporated by reference to Appendix B to the Company’s Definitive Proxy Statement for the Annual Meeting of Stockholders, as filed with the Securities Exchange Commission (the “SEC”) April 11, 1997).
3.1.2	Certificate of Ownership and Merger of Seal Holdings Corporation filed with the Delaware Secretary of State on June 13, 1997 (incorporated by reference to Exhibit 3.1.2 to the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2005, as filed with the SEC on March 27, 2006).
3.1.3	Certificate of Preferred Stock Designation of Le@P Technology, Inc. filed with the Delaware Secretary of State on March 23, 1999 (incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K, as filed with the SEC on April 19, 1999).
3.1.4	Certificate of Amendment to Certificate of Incorporation of Le@P Technology, Inc. filed June 21, 1999 with the Delaware Secretary of State (incorporated by reference to Exhibit 3.1.3 to the Company’s Annual Report on Form 10-KSB for the year ended December 31, 1999, as filed with the SEC on March 30, 2000).
3.1.5	Certificate of Designation, Preferences, Rights and Limitations of 10% Cumulative Non-Voting Series B Preferred Stock of Le@P Technology, Inc. filed with the Delaware Secretary of State on November 15, 1999 (incorporated by reference to Exhibit 4 to the Company’s Quarterly Report on Form 10-QSB for the quarter ended September 30, 1999, as filed with the SEC on November 15, 1999).
3.1.6	Certificate of Amendment to Certificate of Incorporation of Le@P Technology, Inc. filed July 5, 2000 with the Delaware Secretary of State (incorporated by reference to Exhibit 3 to the Company’s Quarterly Report on Form 10-QSB for the quarter ended June 30, 2000, as filed with the SEC on August 14, 2000).
3.2	Amended Bylaws of Le@P Technology, Inc.(incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, as filed with the SEC on May 24, 2013).
10.1	Funding Arrangement by M. Lee Pearce, M.D. (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K dated October 15, 1999).
10.2	Subscription Agreement dated March 30, 2000 with M. Lee Pearce, M.D. (incorporated by reference to Exhibit 10.2 in the Company’s Annual Report on From 10-KSB for the fiscal year ended December 31, 2000 dated March 30, 2001).
10.3	1999 Long Term Incentive Plan (incorporated by reference to Exhibit B to the Company’s Definitive Proxy Statement for its Annual Meeting of Stockholders dated June 4, 1999).
10.4	1998 Incentive Option Plan (incorporated by reference to Exhibit A to the Company’s Definitive Proxy Statement for its Annual Meeting of Stockholders dated June 8, 1998).

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10.5	1997 Incentive Option Plan (incorporated by reference to Appendix A to the Company’s Definitive Proxy Statement for its Annual Meeting of Stockholders dated April 11, 1997).
10.6	Amended 1996 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.3 to the Company’s Form 10-Q for the quarter ended March 31, 1997 dated May 15, 1997).
10.7	Stock Exchange and Merger Agreement dated as of January 7, 2005 among Healthology, Inc., iVillage, Inc., Virtue Acquisition Corporation and certain stockholders of Healthology, Inc., including the Company (incorporated by reference to Exhibit 10.34 in the Company’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 2004 dated March 30, 2005).
10.8	Stock Purchase Agreement dated as of January 7, 2005 between the Company and Steven Haimowitz (incorporated by reference to Exhibit 10.35 in the Company’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 2004 dated March 30, 2005).
10.9	Exchange and Termination Agreement dated March 17, 2006, effective as of March 15, 2006, between Le@P Technology, Inc. and the M. Lee Pearce 2005 Irrevocable Trust (incorporated by reference to Exhibit 10.1 in the Company’s Current Report on Form 8-K dated March 21, 2006).
10.10	Fairness Opinion dated March 15, 2006 issued by Stenton Leigh Valuation Group, Inc. on March 16, 2006 (incorporated by reference to Exhibit 10.2 in the Company’s Current Report on Form 8-K dated March 21, 2006).
10.11	Employment Agreement, dated as of November 1, 2006 by and between Le@P Technology, Inc. and Dr. Donald J. Ciappenelli (incorporated by reference to Exhibit 10.1 in the Company’s Current Report on Form 8-K dated November 3, 2006)
10.12	Employment Agreement, dated as of March 5, 2007 by and between Le@P Technology, Inc. and Dr. Howard Benjamin. (incorporated by reference to Exhibit 10.33 in the Company’s Annual Report on Form 10-KSB dated March 30, 2007)
10.13	Renewal Promissory Note dated as of October 24, 2007 in the principal amount of $562,500 executed by Parkson, LLC in favor of Bay Colony Associates, Ltd. (incorporated by reference to Exhibit 10.1 in the Company’s Current Report on Form 8-K dated October 25, 2007).
10.14	Promissory Note dated March 3, 2010 in the principal amount of $130,000 in favor of M. Lee Pearce Living Trust (incorporated by reference to Exhibit 10.38 in the Company’s Current Report on Form 10-Q as filed on May 12, 2010).
10.15	Renewal Note dated January 31, 2011 in the principal amount of $99,319.39 in favor of M. Lee Pearce Living Trust (incorporated by reference to Exhibit 10.2 in the Company’s Current Report on Form 8-K dated February 1, 2011).

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10.16	Renewal Note dated January 31, 2011 in the principal amount of $562,500 in favor of Bay Colony Associates, Ltd. (incorporated by reference to Exhibit 10.1 in the Company’s Current Report on Form 8-K dated February 1, 2011).
10.17	Promissory Note dated September 1, 2010 in the principal amount of $60,000 in favor of M. Lee Pearce Living Trust (incorporated by reference to Exhibit 10.17 in the Company’s Current Report on Form 10-K dated March 30, 2011).
10.18	Promissory Note dated September 28, 2011 in the principal amount of $110,000 in favor of M. Lee Pearce Living Trust (incorporated by reference to Exhibit 10.38 in the Company’s Current Report on Form 10-Q as filed on November 10, 2011).
10.19	Renewal Promissory Note (Working Capital) dated February 7, 2012 in the principal amount of $777,062.04 in favor of M. Lee Pearce Living Trust (incorporated by reference to Exhibit 10.1 in the Company’s Current Report on Form 8-K dated February 7, 2012).
10.20	Renewal Promissory Note (Parkson) dated February 7, 2012 in the principal amount of $794,650.68 in favor of Bay Colony Associates, Ltd. (incorporated by reference to Exhibit 10.2 in the Company’s Current Report on Form 8-K dated February 7, 2012).
10.21	Promissory Note dated January 18, 2012 in the principal amount of $130,000 in favor of M. Lee Pearce Living Trust (incorporated by reference to Exhibit 10.21 in the Company’s Annual Report on Form 10-K as filed on March 30, 2012).
10.22	Promissory Note dated April 9, 2012 in the principal amount of $500,000 in favor of M. Lee Pearce Living Trust (incorporated by reference to Exhibit 10.1 in the Company’s Current Report on Form 8-K dated April 9, 2012).
10.23	Renewal Promissory Note (Working Capital) dated December 27, 2012 in the principal amount of $2,516,467.36 in favor of M. Lee Pearce Living Trust (incorporated by reference to Exhibit 10.1 in the Company’s Current Report on Form 8-K dated December 27, 2012).
10.24	Renewal Promissory Note (Parkson Property) dated December 27, 2012 in the principal amount of $821,184.39 in favor of Bay Colony Associates, Ltd. (incorporated by reference to Exhibit 10.2 in the Company’s Current Report on Form 8-K dated December 27, 2012).
10.25	2014 Combined Promissory Note (Working Capital) dated December 17, 2014 in the principal amount of $2,852,358.46 in favor of M. Lee Pearce Living Trust (incorporated by reference to Exhibit 10.1 in the Company’s Current Report on Form 8-K dated December 17, 2014).
10.26	2014 Renewal Promissory Note (Parkson Property) dated December 17, 2014 in the principal amount of $881,845.17 in favor of Bay Colony Associates, Ltd. (incorporated by reference to Exhibit 10. in the Company’s Current Report on Form 8-K dated December 17, 2014).

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10.27	2015 Combined Promissory Note (Working Capital) dated December 31, 2015 in the principal amount of $3,063,424.61 in favor of M. Lee Pearce Living Trust (incorporated by reference to Exhibit 10.1 in the Company’s Current Report on Form 8-K and 8-K/A dated December 31, 2015).
10.28	2015 Renewal Promissory Note (Parkson Property) dated December 31, 2015 in the principal amount of $916,182.77 in favor of Bay Colony Associates, Ltd. (incorporated by reference to Exhibit 10.2 in the Company’s Current Report on Form 8-K and 8-K/A dated December 31, 2015).
31.1	Certification of Acting Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certification of Acting Principal Executive Officer relating to Periodic Financial Report Pursuant to 18 U.S.C. Section 1350.*

____________

* Filed herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	LE@P TECHNOLOGY, INC.

Dated: November 14, 2016	By:	/s/ Timothy C. Lincoln
	Timothy C. Lincoln
	Acting Principal Executive Officer

LEAP TECHNOLOGY INC / DE 10-Q