Liberated Syndication Inc. - FORM 10-Q/A

Attached files

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EX-32 - CERTIFICATE PURSUANT TO SECTION 18 U.S.C. PURSUANT TO SECTION 906 OF THE SARBANE - Liberated Syndication Inc.	lsyn_ex32.htm
EX-31.2 - CERTIFICATION PURSUANT TO RULE 13A-14(A)/15D-14(A) CERTIFICATIONS SECTION 302 OF - Liberated Syndication Inc.	lsyn_ex312.htm
EX-31.1 - CERTIFICATION PURSUANT TO RULE 13A-14(A)/15D-14(A) CERTIFICATIONS SECTION 302 OF - Liberated Syndication Inc.	lsyn_ex311.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q/A

(Amendment No. 1)

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2018

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from__________to__________

Commission File No. 000-55779

LIBERATED SYNDICATION INC.

(Exact name of registrant as specified in its charter)

NEVADA	47-5224851
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

5001 Baum Boulevard, Suite 770

Pittsburgh, Pennsylvania 15213

(Address of Principal Executive Offices)

Registrant's Telephone Number: (412) 621-0902

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 website, 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 was 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, a smaller reporting company, or an emerging growth company. See definitions of ‘‘large accelerated filer”, “accelerated filer,’’ “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes☐No☒

As of May 11, 2018, there were 29,776,974 shares of common stock, par value $0.001, of the registrant issued and outstanding.

Explanatory Note

This Quarterly Report on Form 10-Q/A (Amendment No. 1) amends the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (the “SEC”) by Liberated Syndication Corp. (the “Company”) on May 15, 2018 (the “Original 10-Q”) to restate our unaudited consolidated financial statements for the quarterly period ended March 31, 2018 and to amend related disclosures.

Background of the Restatement

On April 28, 2020, the Audit Committee of the Board of Directors of Liberated Syndication Inc, a Nevada corporation (the “Company”) determined that (a) the Consolidated Balance Sheet as of December 31, 2018, (b) the Consolidated Statement of Operations for the year ended December 31, 2018, (c) the Statement of Stockholders’ Equity for the year ended December 31, 2018, and (d) the Consolidated Statement of Cash Flows for the year December 31, 2018, all as presented in the Company’s Annual Report on Form 10-K for the Period Ended December 31, 2018, as previously filed with the U.S. Securities and Exchange Commission on March 14, 2019, should not be relied upon. Subsequent to such determination, the Company reviewed the related interim financial statements and interim financial statements for the first three quarters of 2019 and 2018, and as a result of such review, on May 20, 2020, the Audit Committee determined that such interim financial statement should likewise no longer be relied upon.

Specifically, the amounts reported in the Consolidated Balance Sheet as of March 31, 2018 for total assets, current liabilities, and consequently total liabilities and total stockholders’ equity, were determined to be materially different. Additionally, the income tax benefit in the Consolidated Statement of Operations for the three months ended March 31, 2018 was changed. As a result, the net income and the basic and diluted income per common share were determined to be materially different. The Consolidated Statement of Cash Flows for the three months ended March 31, 2018 also changed as a result of the deferred income taxes and income tax payable for 2018.

During the 2019 audit process, it was discovered through an ongoing IRS examination that the Company owed Federal tax for 2018.

The IRS examination uncovered an error in calculating the Net Operating Loss Carryforward (NOL) resulting from the spin-off of Libsyn in 2016. At December 31, 2017, the Company had recorded an NOL of approximately $14 million. The NOL was part of deferred tax asset which was valued at $0 on the balance sheet, as it had a full valuation allowance. Consequently, the Company was not recognizing tax expenses or the associated tax payable during 2018. However, as the IRS examination continued, it has become clear that the $14 million NOL was overestimated by approximately $12.5 million, and by March 31, 2018, that the NOL has been completely utilized. The result is that the Company ought to have begun recording income tax (benefit) expense in 2018.

This Federal Tax Balance will be paid with an amended return in 2020.

The Company has temporary tax differences which result in a deferred tax asset (DTA). Under the provisions of ASC Topic 740, a DTA is to be recognized for the potential future tax benefit from a loss carryforward. Full realization of the benefit, however, depends on the Company having income in future years.

Because the NOL has been completely utilized and the Company is now consistently recording profits, a DTA with the associated payable should have been recorded in 2018. DTAs represent future income tax benefits. But the tax benefits will be realized only if there is sufficient taxable income from which the deductible amount can be deducted.

Impact of the Restatement

As a result of the restatement, reported net income from continuing operations was increased by $1,271,059, or $0.04 per basic and diluted share for the three months ended March 31, 2018. Total assets increased by $1,336,905 at March 31, 2018. Current and total liabilities increased by $65,846 at March 31, 2018. Accumulated deficit decreased by $1,271,059 at March 31, 2018.

Items Amended in this Filing

For the convenience of the reader, this Form 10-Q/A sets forth the Original Filing, in its entirety, as amended to reflect the restatement. No attempt has been made in this Form 10-Q/A to update other disclosures presented in the Original Filing, except as required to reflect the effects of the restatement. The following items have been amended as a result of the restatement:

Item 1. Financial Statements

Item 2. Management Discussion & Analysis

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

The Unaudited Condensed Consolidated Financial Statements of Liberated Syndication Inc., a Nevada corporation ( the “Company,” “Libsyn,” “Pair”, “we,” “our,” “us” and words of similar import), required to be filed with this 10-Q Quarterly Report were prepared by management and commence on the following page, together with related notes. In the opinion of management, the Unaudited Condensed Consolidated Financial Statements fairly present the financial condition of the Company.

LIBERATED SYNDICATION INC.
FINANCIAL STATEMENTS

CONTENTS

		PAGE
Unaudited Condensed Consolidated Balance Sheets		4

Unaudited Condensed Consolidated Statements of Operations		5

Unaudited Condensed Consolidated Statements of Cash Flows		6

Notes to Unaudited Condensed Consolidated Financial Statements		7

LIBERATED SYNDICATION INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2018 (As Restated) (Unaudited)	December 31, 2017
CURRENT ASSETS:
Cash	$ 6,587,745	$ 5,211,845
Accounts receivable, net	671,683[1]	660,139[1]
Prepaid expenses	142,699	186,425
Prepaid domains, net	108,623	-
Total current assets	7,510,750	6,058,409

Property and equipment, net	2,704,454	3,007,025
Goodwill	16,388,171	16,352,069
Definite life - intangible assets	9,179,671	9,644,000
Prepaid domains, net of current portion	72,835	-
Other	3,582	7,076
Deferred tax assets	1,336,905	-
Total assets	$ 37,196,368	$ 35,068,579

CURRENT LIABILITIES:
Accounts payable	$ 484,596	$ 440,565
Income tax payable	65,846	-
Accrued expenses	313,013	769,485
Deferred revenue, net	1,910,125	1,247,686
Current portion of capital lease obligation	70,160	69,243
Current portion of loans payable, net	1,568,254	1,566,634
Total current liabilities	4,411,994	4,093,613

LONG TERM LIABILITIES:
Loans payable, net of current portion	7,927,769	8,320,366
Capital lease obligation, net of current portion	55,929	73,817
Deferred revenue, net	260,814	133,617
Total long-term liabilities	8,244,512	8,527,800
Total liabilities	12,656,506	12,621,413

STOCKHOLDERS' EQUITY
Common stock	29,778	29,596
Additional paid-in capital	35,092,997	34,804,457
Accumulated Deficit	(10,582,913)	(12,386,887)
Total stockholders' equity	24,539,862	22,447,166
Total liabilities and stockholders' equity	$ 37,196,368	$ 35,068,579

Liberated Syndication Inc. and Subsidiaries Balance Sheet (Parenthetical)
Statement of Financial Position	March 31, 2018 (As Restated)	December 31, 2017
Allowance for doubtful accounts	14,000	14,000
Common stock authorized	200,000,000	200,000,000
Common stock par value	0.001	0.001
Common stock outstanding	29,776,974	29,595,473

The accompanying notes are an integral part to the unaudited condensed consolidated financial statements.

LIBERATED SYNDICATION INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

	Three Months Ended
	March 31, 2018 (As Restated)	March 31, 2017

Revenue	$ 5,059,305	$ 2,494,111

Costs and operating expenses

Cost of revenue (excluding depreciation and amortization)	707,370	617,054
General and administrative	1,387,312	468,247
Non-cash compensation	318,000	1,752,000
Technology	373,326	143,042
Selling	217,002	76,038
Customer support	668,230	191,820
Depreciation and amortization	766,900	4,304
Total costs and operating expenses	4,438,140	3,252,205
Operating income (loss)	621,165	(758,394)


Interest expense	(100,596)	-
Interest income	9,665	-
Other income (expense)	2,681	-
Income (loss) from operations	532,915	(758,394)



Income tax expense (benefit)	(1,271,059)	-
Net Income (loss)	$ 1,803,974	$ (758,394)


BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE	$ 0.06	$ (0.03)
BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING	29,644,362	23,725,860

The accompanying notes are an integral part to the unaudited condensed consolidated financial statements.

LIBERATED SYNDICATION INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

	March 31, 2018 (As Restated)	March 31, 2017

Cash Flows from Operating Activities
Net income (loss)	$ 1,803,974	$ (758,394)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	766,900	4,304
Issuance of common stock	318,000	1,752,000
Deferred income taxes	(1,336,905)	-
Discount on loan fees	9,023	-
Change in assets and liabilities:
Accounts receivable	(76,925)	(248,402)
Prepaid expenses	(134,237)	(53,769)
Accounts payable	44,031	38,109
Income taxes payable	65,846	-
Accrued expense	(456,472)	(291,575)
Deferred revenue	789,635	5,202
Net Cash Provided by Operating Activities	1,792,870	447,475

Cash Flows from Investing Activities:


Net Cash Used in Investing Activities	-	-


Cash Flows from Financing Activities:
Repayment on term loan	(400,000)	-
Repayment on capital lease	(16,970)	-
Net Cash Used in Financing Activities	(416,970)	-

Net Increase in Cash	1,375,900	447,475
Cash at Beginning of Period	5,211,845	4,875,458
Cash at End of Period	$ 6,587,745	$ 5,322,933

Supplemental Disclosures of Cash Flow Information
Cash paid during the periods for:
Interest	$ 96,730	$ -
Income taxes	-	-

Supplemental Non-Cash Investing and Financing Activities
Returned Common Stock	$ 29,278	$ -

The accompanying notes are an integral part to the unaudited condensed consolidated financial statements

LIBERATED SYNDICATION INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization – Liberated Syndication Inc., (“Company”, “parent”), a Nevada Corporation, was organized on September 30, 2015. Webmayhem, Inc. (“Libsyn”), a Pennsylvania corporation, currently a wholly owned subsidiary of the Company, was originally organized on January 1, 2001. Libsyn provides podcast hosting services for producers of content. Libsyn also offers ad insertion on certain of the producers’ content. On December 27, 2017, the Company purchased all the issued and outstanding shares of Pair Networks Inc., (“Pair”), a Pennsylvania corporation, and subsidiaries Ryousha Kokusai, LLC (”Ryousha”) and 660837 N.B., Inc. (“NB”), in a transaction accounted for as a purchase. Pair provides web hosting services and domain name registrations.

Basis of Presentation – Our financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP) and include our accounts and the accounts of our subsidiaries. All material intercompany accounts and transactions have been eliminated.

Our interim financial statements are unaudited, and in our opinion, include all adjustments of a normal recurring nature necessary for the fair presentation of the periods presented. The results for the interim periods are not necessarily indicative of the results to be expected for any subsequent period or for the year ending December 31, 2018.

These financial statements should be read in conjunction with our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2017 (the 2017 Form 10-K).

Prior Period Reclassifications - Reclassifications of certain immaterial prior period amounts have been made to conform to the current period presentation.

Part of cost of revenue has been reclassified to technology and depreciation and amortization. Part of general and administrative has been reclassified to non-cash compensation and customer support.

Consolidation - The financial statements presented reflect the accounts of the parent, Libsyn, Ryousha, NB and Pair. All inter-company transactions have been eliminated in consolidation.

Accounting Estimates – The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Management made assumptions and estimates for determining reserve for accounts receivable, depreciation of fixed assets and in determining the impairment of definite life intangible assets and goodwill. Actual results could differ from those estimated by management.

Our more significant estimates include:

●

the determination of the best estimate of selling price of the deliverables included in multiple-deliverable revenue arrangements;

●

the fair value of assets acquired, and liabilities assumed in business acquisitions;

●

the assessment of recoverability of long-lived assets, including property and equipment, goodwill and intangible assets;

●

the estimated reserve for refunds;

●

the estimated useful lives of intangible and depreciable assets;

●

the grant date fair value of equity-based awards;

●

the recognition, measurement, and valuation of current and deferred income taxes;

We periodically evaluate these estimates and adjust prospectively, if necessary. We believe our estimates and assumptions are reasonable; however, actual results may differ from our estimates.

Cash and Cash Equivalents – The Company considers all highly liquid investments with an original maturity date of three months or less when purchased to be cash equivalents. At March 31, 2018, the Company had $6,045,217 cash balances in excess of federally insured limits.

Accounts Receivable – Accounts receivable consist of trade receivables arising in the normal course of business. At March 31, 2018 and 2017, the Company has an allowance for doubtful accounts of $14,000 and $14,000, respectively, which reflects the Company’s best estimate of probable losses inherent in the accounts receivable balance. The Company determines the allowance based on known troubled accounts, historical experience, and other currently available evidence. During the three months ended March 31, 2018 and 2017, the Company adjusted the allowance for bad debt by $0.

Depreciation – Depreciation of property and equipment is provided on the straight-line method over the estimated useful lives.

LIBERATED SYNDICATION INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued

Long-lived intangible assets – The Company evaluates its long-lived assets for impairment whenever events or change in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the asset to the future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is the excess of the carrying amount over the fair value of the asset.

Technology - Software development costs associated with software to be sold, leased, or for internal use are expensed as incurred until technological feasibility, defined as a working model or prototype, has been established. At that time, such costs are capitalized until the product is available for general release. To date, costs incurred between the completion of a working model and the point at which the product is ready for general release have been insignificant. Accordingly, the Company has expensed all such costs to research and development during the three months ended March 31, 2018 and 2017. Research and development costs totaling $373,326 and 143,042 for the three months ended March 31, 2018 and 2017, respectively, were included in cost of revenue.

Goodwill – Goodwill is evaluated for impairment annually in the fourth quarter of the Company’s fiscal year, and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. Triggering events that may indicate impairment include, but are not limited to, a significant adverse change in customer demand or business climate that could affect the value of goodwill or a significant decrease in expected cash flows. Management noted no triggering events during the period ended March 31, 2018.

Advertising Costs – Advertising costs are expensed as incurred and amounted to $40,434 and $8,867 for the three months ending March 31, 2018 and 2017, respectively.

Fair Value of Financial Instruments – The Company accounts for fair value measurements for financial assets and financial liabilities in accordance with FASB ASC Topic 820. The authoritative guidance, which, among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the exit price, representing the amount that would either be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

●

Level 1. Observable inputs such as quoted prices in active markets for identical assets or liabilities;

●

Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

●

Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

Unless otherwise disclosed, the fair value of the Company’s financial instruments including cash, accounts receivable, prepaid expenses, and accounts payable, deferred revenue and accrued expenses approximates their recorded values due to their short-term maturities.

Revenue Recognition - On January 1, 2018, we adopted the Financial Accounting Standards Board's (FASB) new revenue recognition standard using the modified retrospective method applied to those contracts not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under the new standard, while prior period amounts were not adjusted and continue to be reported in accordance with our historic accounting.

The adoption of the new standard did not have a material impact to our financial statements.

Revenue is recognized when control of the promised services is transferred to our customers, in an amount reflecting the consideration we expect to be entitled to in exchange for those services.

LIBERATED SYNDICATION INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued

Certain products are generally sold with a right of return within our policy, which are accounted for as variable consideration when estimating the amount of revenue to recognize. Refunds are estimated at contract inception using the expected value method based on historical refund experience and updated each reporting period as additional information becomes available and only to the extent it is probable a significant reversal of any incremental revenue will not occur. Refunds reduce deferred revenue at the time they are granted and resulted in a reduced amount of revenue recognized over the contract term of the applicable service compared to the amount originally expected.

Our revenue is categorized and disaggregated as follows:

Domains - Domains revenue primarily consists of domain registrations and renewals, domain privacy, domain application fees, domain back-orders, aftermarket domain sales and fee surcharges paid to ICANN. Domain registrations provide a customer with the exclusive use of a domain during the applicable contract term. After the contract term expires, unless renewed, the customer can no longer access the domain. Consideration is recorded as deferred revenue when received, which is typically at the time of sale, and revenue, other than for aftermarket domain sales, is recognized over the period in which the performance obligations are satisfied, which is generally over the contract term. Aftermarket domain revenue is recognized when ownership of the domain is transferred to the buyer.

Hosting Services - Hosting services revenue primarily consists of website hosting products, website building products and services, website security products, an online shopping cart and online visibility products and email accounts. Consideration is recorded as deferred revenue when received, which is typically at the time of sale, and revenue is recognized over the period in which the performance obligations are satisfied, which is generally over the contract term.

Podcast Hosting - Podcast hosting publishing services are billed on a month to month basis, with first month’s bill prorated to the end of the month so all performance obligations are satisfied at each month-end. Consideration is recorded as revenue as the services, the underlying performance obligation, are provided and or satisfied and collection is probable which is generally when received.

Media Subscription Services - The Company facilitates the sale of producers’ premium content through the sale of subscriptions. The amount earned per transaction is fixed with the producers determine the price for the sale of each subscription, and the Company earns a percentage of what the customer pays. The performance obligation is providing the subscription hosting medium and billing services. Accordingly, the Company reports premium subscription revenue on a net basis over the subscription service period in which the performance obligation is satisfied.

Advertising – The Company recognizes revenue from the insertion of advertisements in digital media. The performance obligation is the download of the digital media with the advertisement inserted. The performance obligation to recognized advertising revenue is satisfied upon delivery of the media download and collection is probable.

Equity-Based Compensation - Our equity-based awards are comprised of options and stock and are accounted for using the fair value method. We grant options at exercise prices equal to the fair market value of our common stock as reported on the OTCQB on the date of grant. We measure and recognize compensation expense for equity-based awards made to employees and directors based on the grant date fair values of the awards. Stock is measured based on the fair market value of the underlying common stock on the date of grant. For options with service or performance-based vesting conditions, the grant date fair value is estimated using the Black-Scholes option-pricing model, which requires management to make assumptions and apply judgment in determining the grant date fair value. Options and award vest and compensation is recognized over the requisite service period. The measurement date for performance vesting awards is the date on which the applicable performance criteria are approved by our board of directors. Key assumptions used in the determination of fair value for stock options are as follows:

LIBERATED SYNDICATION INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued

Expected term. The expected term represents the period the options are expected to be outstanding. Because of the lack of sufficient historical data necessary to calculate the expected term, we use the simple average of the vesting period and the contractual term to estimate the expected term.

Expected volatility. We determine the expected stock price volatility based on the historical volatilities of our common stock.

Expected dividend yield. We do not use a dividend rate due to our expectation of not paying dividends in the foreseeable future.

Risk-free interest rate. We base the risk-free interest rate on the yield curve of a zero-coupon U.S. Treasury bond with a maturity equal to the expected term of the option on the grant date.

Leases – The Company accounts for leases in accordance with Accounting Standards Codification (“ASC”) Topic 840. Leases that meet one or more of the capital lease criteria of standard are recorded as a capital lease, all other leases are operating leases.

Earnings Per Share – The Company computes earnings per share in accordance with FASB ASC Topic 260 Earnings Per Share, which requires the Company to present basic earnings per share and diluted earnings per share when the effect is dilutive (see Note 9).

Income Taxes – The Company accounts for income taxes in accordance with FASB ASC Topic 740 Accounting for Income Taxes. This topic requires an asset and liability approach for accounting for income taxes (See Note 7).

Recently Enacted Accounting Standards - In February 2016, the FASB issued changes to the accounting for leases that primarily affect presentation and disclosure requirements. The new standard will require the recognition of a right to use asset and underlying lease liability for operating leases with an initial life in excess of one year. This standard is effective for us beginning in the first quarter of 2019. We have not yet determined the impact of the new standard on our consolidated financial statements.

Recent accounting pronouncements issued by the FASB did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

NOTE 2 - PROPERTY & EQUIPMENT

The following is a summary of property and equipment at:

	Life	March 31, 2018	December 31, 2017

Furniture, fixtures, and equipment	3-10 yrs	$8,032,178	$8,032,178
Leasehold improvements	3-5 yrs	2,646,400	2,646,400
Software	3 yrs	6,503	6,503
		10,685,081	10,685,081
Less: Accumulated depreciation		(7,980,627)	(7,678,056)
Property & equipment, net		$2,704,454	$3,007,025

Depreciation expense for the three months ended March 31, 2018 and 2017 was $302,571 and $4,304, respectively.

LIBERATED SYNDICATION INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 - GOODWILL AND OTHER DEFINITE-LIFE INTANGIBLE ASSETS

Impairment - During the fourth quarter of 2017, management performed its annual test of impairment of goodwill by comparing the net carrying value of the intangible asset with the fair value of the reporting units. Based upon the results of this analysis, it was determined that the goodwill was not impaired.

Goodwill - The following is a summary of goodwill:

	March 31,	December 31,
	2018	2017
Goodwill at beginning of period	$16,352,069	$11,484,251
Acquisition of Pair	36,102	4,867,818
Impairment	-	-
Goodwill at end of period	$16,388,171	$16,352,069

During the first quarter of 2018, the Company completed its net-working capital closing adjustment for the acquisition of Pair, resulting in an additional allocation of $36,102 of goodwill.

Other definite-life intangible assets - Other intangible assets consist of customer relationships, intellectual property, trade name and non-compete, which were generated through the acquisition of Pair. Management considers these intangible assets to have finite-lives except trade name. These assets are being amortized on a straight-line basis over their estimated useful lives.

As of March 31, 2018, identifiable intangible assets consist of following:

	Preliminary Fair Value	Weighted Average Useful Life (in Years)	Accumulated Amortization	Net Carrying Amount
Customer Relationships	$3,947,000	7	$140,965	$3,806,035
Intellectual Property	3,709,000	7	132,464	3,576,536
Trade name	576,000	10	14,400	561,600
Non-compete	1,412,000	2	176,500	1,235,500
Total	$9,644,000		$464,329	$9,179,671

NOTE 3 - GOODWILL AND OTHER DEFINITE-LIFE INTANGIBLE ASSETS - Continued

The estimated future amortization expenses related to other intangible assets as of March 31, 2018 are as follows:

For twelve months ending March 31,
2019	$1,857,314
2020	1,680,814
2021	1,151,314
2022	1,151,314
2023	1,151,314
Thereafter	2,187,601
Total	$9,179,671

NOTE 4 - LOANS

On December 27, 2017, the Company entered into a loan agreement (the “Loan Agreement”) among the Company, Libsyn, and Pair, together, and First Commonwealth Bank, a Pennsylvania bank and trust company (the “Bank”).

LIBERATED SYNDICATION INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 – LOANS - Continued

The Loan Agreement provides for: (i) a revolving credit facility pursuant to which the Company may borrow an aggregate principal amount not to exceed $2,000,000 (the “Revolving Credit Facility”); and (ii) a term loan in a principal amount equal to $8,000,000 (the “Term Loan” and, together with the Revolving Credit Facility, the “Facility”). A portion of the Revolving Credit Facility, up to $500,000, may be used for standby letters of credit for the account of the Company. As of March 31, 2018, $2,000,000 was drawn down on the revolving line with $0 available.

The loan accrues interest at LIBOR plus 175 base points or prime plus 75 basis points at the election of the Company. As of March 31, 2018, the Company has elected LIBOR plus 175 basis points or 3.625%.

The Term Loan is repayable in quarterly installments of $400,000 commencing on March 30, 2018 and on the last day of each June, September, December and March thereafter, through and including September 30, 2022. Accrued interest is payable in arrears not less frequently than quarterly. The remaining unpaid principal balance of the Term Loan, together with accrued interest thereon, is due and payable in full on December 27, 2022. The Term Loan also calls for additional payment equal to the following: 1)100% of the proceeds from the sale of any common shares 2) 100% of the proceeds from the sale of assets not immediately replaced 3)excess liquidity in any given year up to $1,066,667 a year and no more than $3,200,000 over the life of the term loan. As of March 31, 2018, the balance on the term loan was $7,600,000.

The Company, Libsyn and Pair have granted the bank a blanket security interest in their respective assets, and the Company has pledged the stock of Webmayhem Inc. and Pair Networks Inc. to the bank, as security for all obligations under the Loan Agreement.

Borrowings under the Facility are at variable rates which are, at the Company’s option, tied to LIBOR (London Interbank Offered Rate) plus an applicable rate or a prime rate. Interest rates are subject to change based on the Company’s combined cash balances. The Facility contains covenants that may have the effect of limiting the ability of the Company to, among other things, merge with or acquire other entities, enter into a transaction resulting in a change in control, create certain new liens, incur certain additional indebtedness, engage in certain transactions with affiliates, engage in new lines of business or sell a substantial part of its assets. The Facility also requires the Company to maintain certain consolidated fixed charge coverage ratios and minimum liquidity balances.

The Facility also contains customary events of default, including (but not limited to) default in the payment of principal or, following an applicable grace period, interest, breaches of the Company’s covenants or warranties under the Facility, payment default or acceleration of certain indebtedness of the Company or any subsidiary, certain events of bankruptcy, insolvency or liquidation involving the Company or its subsidiaries, certain judgments or uninsured losses, changes in control and certain liabilities related to ERISA based plans.

On December 27, 2017, the Company drew $10,000,000 under the Facility to finance a portion of the cash consideration payable to the Seller pursuant to the Share Purchase Agreement. Debt issuance costs of $113,000 for the Facility were recorded as a discount and will be amortized over the life of the Facility. As of March 31, 2018, the discount was $103,977.

Future maturities of the loans at March 31, 2018 are as follows:

For the year ending March 31,
2019	$1,600,000
2020	1,600,000
2021	1,600,000
2022	1,600,000
2023	3,200,000
Thereafter	-
Total	$9,600,000

LIBERATED SYNDICATION INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 - CAPITAL STOCK

Common Stock - The Company has authorized 200,000,000 shares of common stock, $0.001 par value. As of March 31, 2018, 29,776,974 shares were issued and outstanding.

During the first quarter of 2018, the Company issued 200,000 shares of common stock valued at $318,000 to a consultant for services rendered.

During the first quarter of 2018, the seller of Pair Networks Inc., returned 18,499 shares valued at $29,413 to the company as per the terms of the acquisition agreement dated December 27, 2017 in connect the closing adjustment for the net-working capital provision.

During the first quarter 2017, the Company issued 3,650,000 shares of common stock valued at $1,752,000 to officers and directors.

NOTE 6 – DEFERRED REVENUE

Deferred revenue consists of the following:

	March 31, 2018	December 31, 2017
Current:
Hosting services	$1,501,482	$1,032,000
Domains	295,757	104,172
Media subscription	112,886	111,514
	$1,910,125	$1,247,686
Noncurrent:
Hosting services	79,752	50,351
Domains	181,062	83,266
	$2,170,939	$1,381,303

The increase in the deferred revenue balance is primarily driven by payments received in advance of satisfying our performance obligations, offset by revenue recognized during the three months ended March 31, 2018 that was included in the deferred revenue balance as of December 31, 2017. The deferred revenue balance as of March 31, 2018 represents our aggregate remaining performance obligations that will be recognized as revenue over the period in which the performance obligations are satisfied.

Deferred revenue as of March 31, 2018 is expected to be recognized as revenue as follows:

	Remainder of 2018	2019	2020	2021	2022	Thereafter	Total
Domains	$239,758	$119,934	$52,213	$32,902	$23,102	$8,610	$476,819
Hosting	1,417,173	164,062	-	-	-	-	1,581,235
Media Subscription	109,798	3,087	-	-	-	-	112,885
	$1,766,729	$287,083	$52,513	$32,902	$23,102	$8,610	$2,170,939

LIBERATED SYNDICATION INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 – DEFERRED REVENUE - Continued

Disaggregated revenue consists of following:

	Three Months Ended March 31,
	2018	2017
Hosting services	$2,061,495	$-
Podcast Hosting	2,501,107	1,931,188
Advertising	320,664	480,891
Domains	71,796	-
Other	104,243	82,032
	$5,059,305	$2,494,111

NOTE 7 - INCOME TAXES

The Company accounts for income taxes in accordance with FASB ASC Topic 740, Accounting for Income Taxes which requires the Company to provide a net deferred tax asset or liability equal to the expected future tax benefit or expense of temporary reporting differences between book and tax accounting and any available operating loss or tax credit carryforwards. At March 31, 2018 and December 31, 2017, the total of all deferred tax assets was $1,336,905 and $3,458,667, respectively, and the total of the deferred tax assets related to goodwill was $0 and $2,214,117, respectively. The 2017 deferred tax asset was fully allowed for in the year. The amount of and ultimate realization of the benefits from the deferred tax assets for income tax purposes is dependent, in part, upon the tax laws in effect, the Company’s future earnings, and other future events, the effects of which cannot be determined. Management has analyzed the health of the Company and it is now more likely than not that the company will likely have strong income from operations moving forward. Therefore, the valuation allowance has been relieved. The change in the valuation allowance for the three months ended March 31, 2018 and 2017 was $1,336,905 and $127,777, respectively.

The components of income tax expense (benefit) from continuing operations for the three months ended March 31, 2018 and 2017 consist of the following:

LIBERATED SYNDICATION INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 - INCOME TAXES – continued

A reconciliation of income tax expense as the federal statutory rate to income tax expense at the Company’s effective rate is as follows:

	March 31, 2018	March 31, 2017

Computed tax at the expected statutory rate	$ 65,846	$ -
State and local income taxes, net of federal	-	-
Other non-deductible expenses	-	-
Valuation Allowance	(1,336,905)	-
Income tax (benefit) expense	$ (1,271,059)	$ -

The temporary differences, tax credits and carryforwards gave rise to the following deferred tax asset at March 31, 2018 and 2017:

	March 31,	March 31,
	2018	2017
Current deferred tax assets (liabilities):
Allowance for doubtful accounts	$ -	$ -
Vacation accrual	-	-
Total current deferred tax assets (liabilities)	-	-

Long-term deferred tax assets (liabilities):

Long-term deferred tax assets (liabilities):
Depreciation and amortization	(131,054)	-
Deferred revenue	7,015	-
Non-cash compensation	1,460,944	-
Goodwill - impaired	-	2,066,632
Intangible assets – tax amortization	-	(3,915,349)
Net operating loss carryforward	-	5,307,384
Valuation allowance	-	(3,458,667)
Net term deferred tax assets (liabilities)	$ 1,336,905	$ -

At March 31, 2018, the company has loss carryforwards of $0.

We file U.S. federal, and U.S. states returns, and we are generally no longer subject to tax examinations for years prior to 2015 for U.S. federal and U.S. states tax returns.

NOTE 8 - LEASES

Operating Lease - The Company leases two office spaces in Pittsburgh, Pennsylvania. The corporate headquarters’ lease is for $4,841 a month through April 2022. The office space for Pair is $34,400 a month through September 2022.

The future minimum lease payments for non-cancelable operating leases having remaining terms in excess of one year as of March 31, 2018 are as follows:

Year ending March 31:	Lease Payments
2019	466,260
2020	466,260
2021	466,260
2022	262,176
Thereafter	4,841
Total Minimum Lease Payment	$1,665,797

Lease expense charged to operations was $153,337 and $74,399 for the three months ended March 31, 2018 and 2017, respectively.

LIBERATED SYNDICATION INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 –EARNINGS PER SHARE

The following data shows the amounts used in computing earnings per share and the weighted average number of shares of common stock outstanding for the periods presented for the periods ended:

	For the Three Months Ended March 31,
	2018	2017
Income (loss) from operations available to common stockholders (numerator)$	$ 1,803,974	(451,138)
Net income (loss) available to common stockholders (numerator)	1,803,974	(451,138)
Weighted average number of common shares outstanding during the period used in earnings per share (denominator)	29,644,362	23,725,860

NOTE 10 – COMMITMENTS AND CONTINGENCIES

After the Spin-Off, FAB Universal Corp. (“FAB”), the former parent company of the Company, may have obligations that at the present time are unknown or unforeseen. As the nature of such obligations are unknown, we are unable to provide an estimate of the potential obligation. However, should FAB incur such obligations, the Company may be financially obligated to pay any losses incurred.

The Company has a 401 (k) plan and Profit sharing plan for the benefit of the employees of the Company. Employees are eligible to participate in the plan the first of the month following their hire date and attaining the age of 21. Profit sharing contributions are made at the discretion of the Board of Directors and vest 100% after the second year of service. During the first three months in 2018, the Company did not make profit sharing contributions to the plan. During the first three months of 2017, the Company made a $100,000 profit sharing contribution to the plan.

NOTE 11 - SEGMENT REPORTING

ASC 280, “Segment Reporting”, establishes standards for reporting information about operating segments on a basis consistent with the Company's internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Company's business segments.

The Company is engaged in providing hosting services. The Company's chief operating decision maker (“CODM”) has been identified as the CEO who reviews the financial information of separate operating segments when making decisions about allocating resources and assessing performance of the group. Based on management's assessment, the Company has determined that it has two operating segments as of March 31, 2018 which are podcast hosting services (Libsyn) and internet hosting services (Pair).

The following table presents summary information by segment for the three months ended March 31, 2018 and 2017, respectively:

	2018			2017
(in thousands)	Libsyn	Pair	Total	Libsyn	Pair	Total

Revenue	$ 2,882	$ 2,177	$ 5,059	$ 2,494	$ -	$ 2,494
Cost of revenue	534	173	707	617	-	617
Gross margin	2,348	2,004	4,352	1,877	-	1,877

Total assets	$ 19,019	$ 18,177	$ 37,196	$ 17,569	$ -	$ 17,569
Depreciation and amortization	$ 8	$ 759	$ 767	$ 4	$ -	$ 4

NOTE 12 - SUBSEQUENT EVENTS

Management has evaluated subsequent events through the date of the filing of this report.

LIBERATED SYNDICATION INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13 – RESTATEMENT OF PREVIOUSLY REPORTED UNAUDITED CONSOLIDATED QUARTERLY FINANCIAL STATEMENTS

Background of the Restatement

During the 2019 audit process, it was discovered through an ongoing IRS examination it was discovered that the Company owed Federal tax for 2018.

This Federal Tax Balance will be paid with an amended return in 2020.

Impact of the Restatement

The financial statements included in this Form 10-Q/A have been restated to reflect the adjustments described. The table below summarizes the effects of the restatement on Libsyn’s Unaudited Consolidated Statements of Operation for the three months ended March 31, 2018 and, Unaudited Consolidated Balance Sheet at March 31, 2018.

In addition to the restatement of the financial statements, certain information within Note 7 – Income Taxes to the financial statements has been restated to reflect the corrections of misstatements discussed above as well as to add disclosure language as appropriate.

Unaudited Consolidated Balance Sheet
	March 31, 2018 As Reported	Corrections	March 31, 2018 As Restated
Deferred Tax Assets	-	1,336,905	1,336,905
Total Assets	35,859,463	1,336,905	37,196,368
Income Taxes Payable	-	65,846	65,846
Total Current Liabilities	4,346,148	65,846	4,411,994
Total Liabilities	12,590,660	65,846	12,656,506
Accumulated Deficit	(11,853,972)	1,271,059	(10,582,913)
Stockholder’s Equity	23,268,803	1,271,059	24,539,862

Unaudited Consolidated Statement of Operations
	Three months ended March 31, 2018 As Reported	Corrections	Three months ended March 31, 2018 As Restated
Income Tax (Benefit) Expense	-	(1,271,059)	(1,271,059)
Net Income	532,915	1,271,059	1,803,974
Basic and Diluted Income Per Common Share	0.02	0.04	0.06

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

Safe Harbor Statement.

Statements made in this Form 10-Q which are not purely historical are forward-looking statements with respect to the goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and business of the Company, including, without limitation, (i) our ability to gain a larger share of the home healthcare industry, our ability to continue to develop services acceptable to our industry, our ability to retain our business relationships, and our ability to raise capital and the growth of the home healthcare industry, and (ii) statements preceded by, followed by or that include the words "may", "would", "could", "should", "expects", "projects", "anticipates", "believes", "estimates", "plans", "intends", "targets", "tend" or similar expressions.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond the Company's control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following, in addition to those contained in the Company's reports on file with the Securities and Exchange Commission: general economic or industry conditions, nationally and/or in the communities in which the Company conducts business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, changes in the home healthcare industry, the development of services that may be superior to the services offered by the Company, competition, changes in the quality or composition of the Company's services, our ability to develop new services, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting the Company’s operations, services and prices.

Accordingly, results actually achieved may differ materially from expected results in these statements. Forward-looking statements speak only as of the date they are made. The Company does not undertake, and specifically disclaims, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements.

Company Overview

Founded in 2015, Liberated Syndication Inc (“the “Company,”, “parent”, “we,” or “us” and words of similar import), a Nevada corporation, provides podcast hosting services through its wholly-owned subsidiary Webmayhem Inc., a Pennsylvania corporation (“Libsyn”), and webhosting services through its wholly-owned subsidiary Pair Networks, Inc., a Pennsylvania corporation (“Pair” or “PNI”). Libsyn’s focus is on our podcasting business, while Pair’s focus is on webhosting and domains.

Podcast Hosting and Distribution

Libsyn is a Podcast Service Provider offering hosting and distribution tools which include storage, bandwidth, RSS creation, destination distribution and audience statistics and analytics. Podcast producers can chose from a variety of hosting plan levels based on the requirements for their podcast. Plans are designed to provide full-featured podcast tools with generous storage and bandwidth transfer.

Podcast producers can choose from a variety of hosting plan levels based on the requirements for their podcast. Podcast producers’ sign-up online at www.libsyn.com, using their credit card to subscribe to a monthly plan. Libsyn’s standard plans range for $5 to $75 per month. LibsynPRO service is an enterprise solution for professional media producers and corporate customers that require media network features and dedicated support. LibsynPro revenue consists primarily of monthly hosting fees and bandwidth usage charges. Other professional level add-ons, such as set-up fees and custom features, represent a small portion of LibsynPro revenue.

During the first three months of 2018, Libsyn generated 70% of its revenue from Podcast hosting fees paid by Libsyn4 Producers. LibsynPro revenue is 18% of overall revenues, and Advertising revenue makes up 10% revenues. App subscriptions make up 2% of total Libsyn revenues. During the first three months of 2017, those revenues contributions were 62% for Libsyn4, 16%, for LibsynPro, 19% for Advertising and 3% for App subscriptions.

Trends in the number of podcast shows on the Libsyn network and podcast consumption affect our revenue and financial results as they are directly related to cash flow and cost of revenue. Management believes that over the next 3 months, growth in the podcasting industry and Libsyn’s market leadership will continue to fuel expansion of the Libsyn network and revenue. The Company expects to see year-over-year bandwidth usage continue to grow in 2018.

Pair Networks, Inc. (“Pair”)

Pair offers a variety of hosting plan levels, value add Internet services and domain registration. Through the Pair Account Control Center (ACC), customers can manage their hosting accounts and domains from one place.

Customers can choose from a variety of web hosting plan levels based on their requirements and applications. Pair Hosting offers shared servers, virtual private servers, dedicated servers and Pair cloud technology as managed services. With over twenty years of experience in Internet hosting, Pair has the expertise to build and manage reliable and powerful hosting solutions. The managed service and 24x7 support allow customers to focus on their core business without having to worry about hardware, operating systems, network connectivity or uptime.

Share web hosting is a great option for startup or smaller businesses as the website sits on the same server with other websites and shares resources such as memory and Central Processing Unit (CPU). Basic website applications such as email and file sharing are ideal for shared server offerings.

Results of Operations

Three Months Ended March 31, 2018 and 2017.

During the three months ended March 31, 2018, the Company recorded revenues of $5,059,305, a 103% increase over revenues of $2,494,111 for the same period in 2017. The increase for 2018 reflects an increase in Libsyn4 hosting revenue as well as LibsynPro, offset by decreases in Premium Subscription and Advertising revenue. Pair contributed $2,177,115 of revenue during the first quarter of 2018. Libsyn4 hosting revenue increased due to the 30% growth in the number of podcasts on the network when comparing the first quarter of 2018 versus 2017. LibsynPro revenue increased as a result of additional LibsynPro networks using our platform in 2018 with increased bandwidth usage fees for delivery of podcasts contributing to the majority of the revenue gain. Advertising revenue decreased 37% in the first quarter of 2018 versus 2017. The decrease resulted from decrease in the dollars being spent on ad campaigns during the first quarter of 2018 with existing advertisers. Premium subscription revenue increased $23,409.

During the three months ended March 31, 2018, cost of revenue totaled $707,370, a 15% increase as compared to $617,054 for the same period in 2017. This is a reflection of the increase the ad sharing that is being paid to producers in 2018 versus 2017. Pair contributed $170,800 to cost of revenue during the first quarter of 2018.

The Company recorded total operating expenses of $4,438,140 during the three months ended March 31, 2018, a 37% increase as compared to operating expenses of $3,252,205 in the same period of 2017. During the first quarter of 2018, cost of revenue totaled $707,370, a 15% increase as compared to $617,054 for the same period in 2017. The increase is due to the acquisition of Pair in December 2017. This increase is offset by the decrease in ad sharing from Libsyn during the first three months of 2018 when compared to the same period in 2017. Libsyn contributed $534,569 while Pair contributed $172,801 to the cost of revenue during the first quarter of 2018. The increase in general and administrative was primarily driven by the addition of the Pair business, offset by a decrease in non-cash compensation. General and administrative expenses totaled $1,387,312 in 2018 versus $468,247 in 2017, an increase of 196%. Technology expenses represented $373,326 in 2018 versus $143,042 in 2017, driven by an increase in wages from the addition of Pair during 2018. Selling expenses in 2018 were $217,002 versus $76,038 in 2017 with the addition of the selling team for Pair. Customer support expenses in 2018 were $668,230 versus $191,820 in 2017 driven by the 24/7 support provided by Pair.

Interest expense for the first quarter of 2018 was $100,596, which represents interest on the loan facility obtained in connection with the acquisition of Pair.

Income tax benefit for the three months ended March 31, 2018 was $1,271,059, which represents the deferred tax asset from the 2018 tax provision and the expected federal balance due for 2018. The income tax payable will be payable with the amended return in 2020.

The Company’s net income was $1,803,974 for the three months ended March 31, 2018. This represents a $2,562,368 increase from our net loss of $758,394 for the three months ended March 31, 2017.

Liquidity and Capital Resources.

Cash on hand was $6,587,745 at March 31, 2018, an increase of $1,375,900 over the $5,211,845 on hand at December 31, 2017. Cash provided by operations for the three months ended March 31, 2018, was $1,792,870, an increase of $1,345,395 over the $447,475 cash provided by operations for the three months ended March 31, 2017. The contribution from Pair of this cash generation totaled $608,140, and Libsyn added $737,255. This increase is driven from our operating results of both segments of our business.

Cash used in financing activities was $416,970 for the three months ended March 31, 2018 and $0 in 2017. During the first quarter, we made our payment on the loan used to acquire Pair, $400,000 as well as $16,970 of payments on our capital lease.

The increase in cash of $1,375,900 during the first quarter of 2018 is a reflection of the strength of the overall business during the quarter.

Off-balance sheet arrangements

We have operating leases for certain facilities, but otherwise do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our financial condition, results of operations, liquidity, or capital resources.

The future minimum lease payments for non-cancelable operating leases having remaining terms in excess of one year as of March 31, 2018 are as follows:

Year ending March 31:	Lease Payments
2019	466,260
2020	466,260
2021	466,260
2022	262,176
Thereafter	4,841
Total Minimum Lease Payment	$1,665,797

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not required for smaller reporting companies.

Item 4. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")), which we refer to as disclosure controls, are controls and procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this report, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. There are inherent limitations to the effectiveness of any control system. A control system, no matter how well conceived and operated, can provide only reasonable assurance that its objectives are met. No evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected.

As of March 31, 2018, an evaluation was carried out under the supervision and with the participation of our management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that, as of such date, the design and operation of these disclosure controls were not effective to accomplish their objectives at the reasonable assurance level due to the identification of errors which led to certain of our financial statements being restated. On an on-going basis we will evaluate the adequacy of our controls and procedures.

(b) Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act), occurred during the fiscal quarter ended March 31, 2018 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

Liberated Syndication Inc. is involved in routine legal and administrative proceedings and claims of various types. We have no material pending legal or administrative proceedings, other than ordinary routine litigation incidental to our business, to which we or any of our subsidiaries are a party or of which any property is the subject.

Item 1A. Risk Factors.

Not required for smaller reporting companies.

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

None; not applicable.

Item 3. Defaults Upon Senior Securities.

None; not applicable.

Item 4. Mine Safety Disclosures.

None; not applicable.

Item 5. Other Information.

None; not applicable.

(a)

During the quarterly period ended March 31, 2018, there were no changes to the procedures by which shareholders’ may recommend nominees to the Company’s board of directors.

Item 6. Exhibits.

(iii)	Exhibit No.	Description

	31.1	302 Certification of Christopher J. Spencer

	31.2	302 Certification of Gabriel J. Mosey

	32	906 Certification

	101.1	The following materials from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 are formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Cash Flows, and (iv) Notes to Condensed Consolidated Financial Statements

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.

Date:	7/10/2020	By:	/s/ Christopher J. Spencer
			Christopher J. Spencer
			Chief Executive Officer and President

Date:	7/10/2020	/s/ Gabriel J. Mosey
		Gabriel J. Mosey
		Interim Chief Financial Officer

Liberated Syndication Inc. - FORM 10-Q/A - July 10, 2020

Attached files

Liberated Syndication Inc. Reports