Financial Performance - Revenues decreased 34% to $14.4 million compared to $21.9 million in the same period last year, primarily due to lower recommerce revenue through Amazon channels and wholesale [3]. - The company reported a net loss of $4.1 million, compared to a loss of $1.7 million in the same period last year, driven by decreased sales and significant inventory write-offs [9]. - Net cash provided by operating activities decreased to $(3,034,406) compared to $2,234,213 in the previous period, indicating a significant decline in operational cash flow [21]. - The company experienced a net decrease in cash of $(3,806,724) for continuing operations, down from $(6,159,303) in the previous period [21]. - The total interest paid during the period was $1,505,162, compared to $326,918, indicating increased borrowing costs [21]. Cost Management - Cost of revenue decreased 19% to $11.6 million from $14.3 million in the same period last year, attributed to the decline in recommerce revenue [4]. - Sales and marketing expenses decreased 32% year-over-year, reflecting management's focus on long-term recurring sales growth through subscription revenue [5]. - General and administrative expenses decreased 8% compared to the same period last year, due to facility consolidation and adjustments related to the sale of subsidiaries [6]. - Other operating expenses decreased 37% year-over-year, primarily due to reduced amortization of stock compensation [7]. - Stock-based compensation expenses totaled $965,229, a decrease from $3,126,472, suggesting a potential shift in compensation strategy [21]. Strategic Initiatives - Management is restructuring the company to improve its balance sheet and focus on profitable growth opportunities without the burden of high debt [2]. - The company anticipates recognizing improvements in fiscal year 2025 following the consolidation of its distribution network [9]. - Upexi aims to continue acquiring profitable Amazon and eCommerce businesses to drive growth and reduce costs through corporate synergies [11]. - The company issued common stock for the acquisition of Cygnet, valued at $162,727, reflecting strategic growth through acquisitions [21]. Cash Flow and Investments - The company had cash of $498,287 as of March 31, 2024, down from $4.5 million a year earlier, but expects sufficient working capital to fund operations for the next twelve months [10]. - Cash flows from investing activities included the acquisition of Lucky Tail for $(3,012,327) and VitaMedica, Inc. for $(500,000), indicating ongoing investment in growth [21]. - Proceeds from the sale of Infusionz and selected assets amounted to $5,173,610, contributing positively to cash flow [21]. - The cash balance at the end of the period was $498,287, a significant decrease from $4,492,291 at the beginning of the period [21]. Asset Management - The company reported a total depreciation and amortization expense of $4,089,722, up from $3,359,050, reflecting increased asset utilization [21]. - The company reported a significant inventory write-off of $1,812,319, which may impact future inventory management strategies [21].

Revenue Performance - Revenue for the three months ended March 31, 2024, decreased by $7,438,488 or 34% to $14,444,957 compared to $21,883,445 in the same period last year [239]. - For the nine months ended March 31, 2024, total revenue increased by $3,303,606 to $59,586,148 compared to $56,282,542 in the same period in 2023 [244]. Operational Loss - The loss from operations for the three months ended March 31, 2024, was $(3,066,816), compared to $(1,870,231) for the same period in 2023 [238]. Expense Management - Sales and marketing expenses decreased by $711,776 or 32% compared to the same period in the prior year, reflecting management's refined sales strategies [240]. - General and administrative expenses decreased by $202,925 or 8% compared to the same period in the prior year, due to facility consolidation and adjustments related to divested operations [241]. - Distribution costs decreased by $493,625 or 6% compared to the same period in the previous year, with expectations for continued reductions [246]. Cash Position - Cash on hand as of March 31, 2024, was $498,287, a decrease of $3,994,004 from June 30, 2023 [250]. - The company expects to receive approximately $1,350,000 from the sale of its Clearwater warehouse, which will be used for working capital and debt repayment [255]. Internal Controls - The company's disclosure controls and procedures were found to be ineffective as of March 31, 2024, due to material weaknesses identified in internal control over financial reporting [281]. - The identified weaknesses include inadequate segregation of duties, which is common in companies of this size [282]. - The company plans to appoint additional qualified personnel and modify financial controls to address these inadequacies by the end of the 2024 fiscal year [282]. - Management is committed to ongoing monitoring and evaluation of internal controls and will implement further enhancements as resources allow [283]. Securities Issuance - The company issued securities under the exemption for transactions not involving a public offering, as per Section 4(a)(2) of the Securities Act [285].

Financial Data and Key Metrics Changes - Revenue for fiscal second quarter 2024 totaled $21.8 million, down from $26.7 million year-over-year and $27.3 million sequentially [19] - Adjusted EBITDA was approximately $29,000, a decrease from $557,000 year-over-year and $750,000 sequentially [25] - Gross profit margins increased to 38% from 31.8% in the previous quarter [13][21] Business Line Data and Key Metrics Changes - Brand product sales increased 16.7% sequentially to $7.7 million, compared to $6.6 million in the prior quarter [15][20] - Sales and marketing expenses decreased by 18% year-over-year, reflecting a strategic focus on long-term recurring sales growth [22] - Cost of revenue decreased to $13.6 million from $16.7 million year-over-year and $18.6 million sequentially [21] Market Data and Key Metrics Changes - Subscription revenue across health and wellness grew approximately 5% month-over-month [16] - The company is focusing on high-margin recurring revenue brand businesses amid challenging market conditions [14] Company Strategy and Development Direction - The company is prioritizing investments in higher-margin brand products and reducing reliance on re-commerce revenue [15][18] - Consolidation of manufacturing facilities is expected to save $450,000 to $550,000 per quarter, totaling approximately $2 million annually in G&A expenses [17] - Management aims to increase brand revenue as a percentage of overall sales, focusing on higher gross margin businesses [38] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to drive long-term growth and profitability despite current market challenges [18] - The company anticipates that gross margins will continue to improve in the coming quarters [38] Other Important Information - As of December 31, 2023, the company had cash of $1.8 million and total stockholders' equity of approximately $25.5 million [26] - There are 20,889,384 shares of common stock outstanding as of February 14, 2024 [26] Q&A Session Summary Question: Insights on the re-commerce business and inventory issues - Management indicated that the decrease in re-commerce revenue was due to timing and a focus on maintaining margin profiles, leading to a build-up in inventory [29][30] Question: Margin hurdles in the re-commerce business - Management clarified that while there are good opportunities, the focus has shifted more towards brand business, which has higher margins [33] Question: Growth in brand sales and channel strategy - Management confirmed that brand sales growth was led by health and beauty products, with a continued focus on direct-to-consumer channels for higher margins [35]

Revenue Performance - For the three months ended December 31, 2023, total revenue was $21,827,827, a decrease of $4,913,735 or 18% compared to $26,741,562 in the same period last year [141]. - For the six months ended December 31, 2023, total revenue increased by $11,215,108 or 30% to $49,175,469 compared to $37,960,361 in the same period last year, driven by the acquisition of E-core [151]. - The Branded Products segment generated revenue of $7,659,684 for the three months ended December 31, 2023, while the Recommerce segment generated $14,168,143 [135]. Cost and Expenses - The cost of revenue decreased by $3,098,543 or 19% to $13,556,574, primarily due to lower recommerce revenue [142]. - Sales and marketing expenses decreased by $605,776 or 18% to $2,691,368 for the three months ended December 31, 2023, reflecting a strategic focus on long-term recurring sales growth [143]. - General and administrative expenses decreased by $214,431 or 9% to $2,303,220 for the three months ended December 31, 2023, due to consolidation efforts [145]. - Cost of revenue increased by $10,139,934 or 46% to $32,196,367 compared to $22,056,433 in the same period last year [152]. - Sales and marketing expenses rose by $515,422 or 10%, primarily due to the increase in the Branded Products segment [153]. - General and administrative expenses decreased by $86,349 or 2% compared to the same period last year [155]. Profit and Loss - The net loss for the three months ended December 31, 2023, was $2,437,919, compared to a net income of $2,669,679 in the same period last year [149]. - The company reported a net loss of $3,794,307 compared to net income of $72,164 in the same period last year [158]. Assets and Liabilities - Total assets as of December 31, 2023, were $62,122,599, with Branded Products segment assets at $26,893,877 and Recommerce segment assets at $35,228,722 [135]. - Current assets decreased to $22,583,131 from $25,455,714, while current liabilities increased to $24,256,069 from $19,606,010, resulting in negative working capital of $1,672,938 [159]. Cash Flow - Cash flows provided by operating activities were $(2,120,077) compared to $3,851,106 in the previous year [160]. - Net cash used in investing activities was $902,864, primarily for the acquisition of the remaining 45% of Cygnet Online LLC [162]. - Net cash provided by financing activities was $599,027, a significant improvement from the use of $9,464,945 in the same period last year [163]. Management Outlook - Management plans to improve gross profit and reduce general and administrative expenses as a percentage of sales in the upcoming year [150]. - Gross profit increased by over $1 million compared to the same period in the previous year, with management aiming to improve gross margin in the next 12 months [152].

Financial Data and Key Metrics Changes - Revenue for fiscal Q1 of 2024 grew 140% year-over-year and 53.5% sequentially, amounting to an increase of approximately $16 million [23][29] - Gross profit increased by approximately $2.9 million compared to the prior year, with $2.1 million of this growth attributed to branded products revenue growth [11] - General and administrative expenses as a percentage of revenue decreased to 8.2% from 19% in the prior year, while operating expenses as a percentage of revenue decreased to 29% from 56.5% [9] Business Line Data and Key Metrics Changes - Re-commerce revenue constituted 76% of total revenue, increasing by 187% year-over-year [26] - Cygnet Online, a high-volume e-commerce provider, saw revenue increase sequentially by approximately $1.5 million, with gross profit margin rising from 44% to 48% [26] - NETi, the re-commerce provider, increased revenue sequentially by approximately $6.3 million, but average gross profit declined from 17% to 10% due to liquidation of excess inventory [27] Market Data and Key Metrics Changes - The company launched its Disney Frozen product on Amazon, achieving a run rate of over 115 units per day and improving its Amazon rank from 20,000 to 4,000 [24] - Tytan Tiles reached 3 in toy magnetic building sets on Amazon shortly after launch, indicating strong market reception [24] Company Strategy and Development Direction - The company is focused on enhancing operational efficiencies and streamlining operations to bolster margins and profitability [4] - There is a strategic pivot towards subscription-based product lines, which are expected to drive higher margins and profitability in the future [7] - The management is committed to generating $100 million in revenue for calendar 2023 while completing cost-cutting measures [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges posed by the broader market but remains optimistic about the company's growth trajectory and operational improvements [22] - The company is navigating a dynamic economic landscape and is confident that its strategic initiatives will lead to tangible success in the coming quarters [10] Other Important Information - The company has restructured its seller note and other debts, paying down a portion and extending the remainder, which will not materially impact future operations [28] - Management has implemented cost-cutting measures that are beginning to reflect positively in financial performance [27] Q&A Session Summary Question: How is the company balancing growth versus profitability? - Management indicated that while there has been a focus on growth, particularly with brands like VitaMedica, this has impacted short-term EBITDA margins [13][36] Question: What is the outlook for the credit facility and overall balance sheet? - Management expressed comfort with the credit facility and noted that they are strategically managing debt to ensure sufficient working capital [40][48] Question: Any updates on Bloomios assets? - Management stated that operations at Bloomios are ongoing and are not a drag on the company, contributing positively instead [50]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to _______ Commission File Number 333-255266 UPEXI, INC. (Exact name of registrant as specified in its charter) Nevada 83-3378978 (State or other jurisdiction o ...

Upexi, Inc. (NASDAQ:UPXI) Q4 2023 Earnings Conference Call October 2, 2023 4:30 PM ET Company Participants Valter Pinto - MD of KCSA Strategic Communications Allan Marshall - CEO Andrew Norstrud - CFO Conference Call Participants Aaron Grey - Alliance Global Partners Operator Good day, and welcome to the Upexi, Inc. 2023 Fiscal Year-End Financial Results Conference Call. Please note that today's call is being recorded. We will also be having a brief question-and-answer session. I would now like to turn the ...

Financial Performance - For the fiscal year ended June 30, 2023, revenue increased by $57,611,165 or 250% to $80,676,509 compared to $23,065,344 in the previous year[175]. - The net loss attributable to Upexi, Inc. was $16,930,289, compared to a net loss of $2,100,850 in the prior year[181]. - Upexi, Inc. reported total revenue of $80,676,509 for the year ended June 30, 2023, a significant increase from $23,065,344 in the previous year, representing a growth of approximately 250%[231]. - The company’s accumulated deficit increased to $(23,201,175) as of June 30, 2023, compared to $(6,270,886) in 2022, indicating a worsening financial position[230]. - Basic loss per share from continuing operations was $(0.86) for the year ended June 30, 2023, compared to $(0.36) in the previous year[232]. - The Company reported a GAAP net loss of $(16,930,289) for the year ended June 30, 2023, compared to a loss of $(2,100,850) in 2022[216]. - Non-GAAP adjusted EBITDA for the year ended June 30, 2023, was $1,266,226, compared to $(1,603,248) in 2022[217]. Revenue and Expenses - Cost of revenue rose by $38,922,455 or 475%, totaling $47,118,189, with 80% of the increase attributed to 2023 acquisitions[176]. - Gross profit increased by $18,688,710, but the gross profit margin declined to 42% from 64% in the prior year[176]. - Sales and marketing expenses increased by $5,259,135 or 103%, reaching $10,376,003, primarily due to acquisitions and increased brand awareness expenditures[177]. - Distribution costs surged by $10,155,581 or 459%, totaling $12,369,903, influenced by rising transportation costs and third-party provider rates[178]. - General and administrative expenses rose by $404,521 or 4%, totaling $9,546,188, with management focusing on reducing these costs[179]. - Advertising expenses increased to $7,978,607 for the year ended June 30, 2023, up from $3,225,256 in the previous year[269]. Assets and Liabilities - As of June 30, 2023, current assets were $25,455,714 and current liabilities were $19,606,010, resulting in working capital of $5,849,291[186]. - Total current assets increased to $25,455,714 as of June 30, 2023, up from $17,061,622 in 2022, reflecting a growth of about 49%[228]. - Current liabilities rose to $19,606,010 in 2023, compared to $10,127,748 in 2022, marking an increase of approximately 94%[230]. - The company’s total assets increased to $63,853,067 as of June 30, 2023, up from $48,491,035 in 2022, representing a growth of approximately 32%[230]. - The company has sufficient working capital to fund operations over the next twelve months and meet all debt obligations[197]. Acquisitions and Investments - The company made several acquisitions, including Lucky Tail for $3,528,239 and VitaMedica, Inc. for $500,000, contributing to a total cash used in investing activities of $2,574,858[236]. - The Company acquired VitaMedica for a total consideration of $3,556,589, which included $2,000,000 in cash and $482,000 in common stock[291]. - Goodwill from the VitaMedica acquisition amounted to $960,780, reflecting the Company's enhanced market entry capabilities in health and wellness products[292]. - The acquisition of Interactive Offers, LLC was completed for $4,833,630, with goodwill recognized at $2,889,158 due to the addition of a unique in-house advertising platform[296][297]. - The Company completed the acquisition of Cygnet Online, LLC for a total consideration of $500,000 cash, 90,909 shares of common stock, and a $300,000 cash payment due in 2024[249]. - E-Core acquisition contributed $36,551,957 in revenue for the year ended June 30, 2023, marking a new entry into the children's toy sector[314]. Debt and Financing - The Company received $6,678,506 for Convertible Notes with an original principal amount of $7,500,000, and issued Warrants for 56,250 shares at an exercise price of $4.44 per share[192]. - A loan agreement was entered into with Professional Bank for $3,000,000, to be repaid over ten years, with proceeds used to pay down a loan facility of $2,780,200[193]. - The company has a total of $25,889,239 in notes payable after accounting for original discounts and adjustments[350]. - The company entered into a series of promissory notes totaling $5,750,000 with a 12-month term at an interest rate of 4%, with the option for principals to convert into shares at a price of $4.81[354]. - A promissory note executed on February 22, 2023, had an original principal amount of $2,150,000, bearing interest at 18.11% and requiring monthly payments starting December 22, 2023[351]. Impairments and Valuation - The company reported a significant impairment of goodwill and intangible assets amounting to $3,746,301 in 2023, indicating potential challenges in asset valuation[236]. - The company recorded an impairment of goodwill amounting to $2,889,158 related to Interactive Offers as of June 30, 2023[261]. - The company recognized an impairment of $857,143 on long-lived assets related to Interactive Offers during the year ended June 30, 2023[263]. - The company’s inventory reserve increased from $50,000 in 2022 to $475,000 in 2023, indicating a growing concern over inventory valuation[257]. Operational Highlights - The company aims to drive organic growth through acquisitions of profitable Amazon and eCommerce businesses, focusing on scalable brands in high-growth markets[239]. - The company has established a significant customer database, which has been key to year-over-year gains in sales and profits[239]. - The company utilized in-house SaaS programmatic ad technology to lower customer acquisition costs and enhance cross-selling opportunities[239]. - The company operates through fourteen active subsidiaries, including Upexi Holding, LLC and VitaMedica, Inc., diversifying its business operations across various sectors[240].

Revenue Growth - Revenue for the three months ended March 31, 2023, increased by $19,792,547 or 447% to $24,219,445 compared to $4,426,898 in the same period last year [174]. - For the nine months ended March 31, 2023, revenue increased by $49,582,563 or 373% to $62,863,128 compared to $13,280,565 in the same period last year [184]. Cost of Revenue - Cost of revenue for the same period increased by $13,516,617 or 1,230% to $14,614,754 compared to $1,098,137 in the prior year [176]. - Cost of revenue for the nine months ended March 31, 2023, increased by $33,823,415 or 1,098% to $36,904,527 compared to $3,081,112 in the prior year [185]. Net Loss - Net loss attributable to Upexi, Inc. for the three months ended March 31, 2023, was $1,643,884 compared to a net loss of $52,667 in the prior year [174]. - Net loss for the nine months ended March 31, 2023, was $1,571,720 compared to net income of $523,877 in the prior year [191]. Expenses - Sales and marketing expenses for the three months ended March 31, 2023, increased by $2,391,095 or 220% compared to the same period last year [177]. - Distribution costs for the same period increased by $1,972,812 or 326% compared to the prior year [178]. Cash Position - The company had cash of $1,181,042 as of March 31, 2023, a decrease of $5,968,764 from June 30, 2022 [195]. Financing Activities - Net cash used by financing activities for the nine months ended March 31, 2023, was $6,836,829, an increase from $2,125,888 during the same period in 2022 [198]. - The company repaid $6,826,338 to the line of credit and terminated the senior convertible note, while also utilizing proceeds from the issuance of convertible debt for investing activities [198][199]. - On October 19, 2022, the company received $3,000,000 from a loan agreement with Professional Bank, to be repaid over ten years, which was used to pay down a loan facility with Acorn Capital, LLC [200]. - On October 31, 2022, the company made a total payment of $5,146,437 to holders of senior secured convertible notes, terminating the agreement with noteholders [201]. - The company executed a promissory note with an investor on February 22, 2023, for $2,150,000, which includes the issuance of 134,000 restricted shares at a price of $4.53 per share [203]. Future Outlook - Management anticipates significant opportunities for organic growth within newly acquired businesses over the next 12 months [175]. - The company estimates sufficient working capital to fund operations over the next twelve months and meet all debt obligations [205]. - There are no off-balance sheet arrangements that could materially affect the company's financial condition or results of operations [206].

Innovation in Aggregation We Build, Buy & Scale Amazon And eCommerce Brands February 2023 Investor Presentation NASDAQ: UPXI Forward Looking Information This presentation contains "forward-looking statements", including statements regarding Grove, Inc. and its subsidiaries, within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. All of the statements in this presentation, including financial projections, whether written or oral, that refer to expected or a ...