Industry Overview - The cannabis industry is projected to exceed $45 billion by 2025, with strong growth expected over the next five years as demand for accessories and digital services increases [1][4] - Ancillary sectors such as technology, packaging, and paraphernalia are becoming essential, providing support without directly handling cannabis [1][4] Legislative Environment - Momentum for cannabis legalization is building, with new bills being introduced in key states and some regions expanding medical access or softening penalties [2] - Federal reform remains slow, causing fluctuations in cannabis stocks in response to news events [2] Investment Opportunities - Ancillary cannabis companies are seen as a smart investment for exposure to the cannabis sector without the legal risks associated with growers or dispensaries [1][4] - Key ancillary stocks to monitor include Leafly Holdings Inc. (LFLY), WM Technology Inc. (MAPS), and Greenlane Holdings Inc. (GNLN) [4][6] Company Profiles Leafly Holdings Inc. (LFLY) - Leafly is a leading online cannabis marketplace, serving millions of users and listing inventory from over 10,000 licensed dispensaries [5][7] - The company is facing financial strain, having shifted to over-the-counter trading, with anticipated Q1 2025 revenue around $8.5 million [7] - Leafly's primary revenue source is advertising, but operational losses are a concern, necessitating improved monetization and cost management [7] WM Technology Inc. (MAPS) - WM Technology, known as Weedmaps, connects consumers with licensed retailers and provides digital tools for over 5,000 cannabis businesses [8] - In Q1 2025, Weedmaps reported revenue of $44.6 million, maintaining positive adjusted operating income of $2.6 million, indicating financial stability [8] - The company is focusing on improving platform features and retaining long-term clients, despite a slowdown in new customer growth [8] Greenlane Holdings Inc. (GNLN) - Greenlane is a supplier of cannabis accessories and packaging, specializing in vaporizers and safety packaging, with operations across North America and abroad [9] - The company raised $25 million through a private placement in February 2025 and executed a 1-for-750 reverse stock split to meet Nasdaq standards [11] - Greenlane is undergoing restructuring efforts to stabilize and return to profitability, with revenue figures for Q1 yet to be disclosed [11] Market Sentiment - Ancillary cannabis companies are viewed as strong entry points for investors seeking exposure without direct investment in cultivation or retail [12] - Each company presents unique advantages and challenges, with July 2025 being a critical time to monitor their progress and consider investment opportunities [12]

Financial Data and Key Metrics Changes - The meeting confirmed that 54.54% of the votes representing common stock were cast, indicating a significant level of shareholder engagement [5] - The company reported a quorum was present for the transaction of business, allowing for the formal proposals to be discussed and voted upon [5] Business Line Data and Key Metrics Changes - No specific financial data or metrics related to individual business lines were provided in the meeting [16] Market Data and Key Metrics Changes - No specific market data or metrics were discussed during the meeting [16] Company Strategy and Development Direction and Industry Competition - The company proposed a name change to Leafly.com Holdings Inc, which reflects a strategic shift towards enhancing its brand identity [8] - A reverse stock split was proposed to reduce the number of authorized shares, which may help the company deregister its common stock and suspend reporting obligations under the Securities Exchange Act [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the proposals presented, which were all approved by shareholders, indicating a positive outlook for the company's governance and strategic direction [14] Other Important Information - The company plans to file a certified final report of the vote results with the SEC within four business days, ensuring transparency and compliance with regulatory requirements [15] Q&A Session All Questions and Answers - No specific Q&A session was documented in the meeting, as the focus was primarily on the proposals and voting outcomes [16]

Part I - Financial Information [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The unaudited statements reveal a deteriorating financial position, a net loss of $1.8 million, and substantial doubt about the company's ability to continue as a going concern - The financial statements assume the company will continue as a going concern, but management has identified **substantial doubt** due to its inability to repay **$25.7 million in convertible notes** maturing on July 1, 2025[34](index=34&type=chunk)[35](index=35&type=chunk)[37](index=37&type=chunk) [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets decreased to $14.0 million while the stockholders' deficit widened to $16.7 million Consolidated Balance Sheets (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $8,639 | $14,531 | | Total current assets | $11,244 | $16,803 | | **Total assets** | **$14,007** | **$19,638** | | **Liabilities & Stockholders' Deficit** | | | | Convertible promissory notes, net | $25,747 | $29,376 | | Total current liabilities | $30,628 | $34,676 | | **Total liabilities** | **$30,690** | **$34,747** | | **Total stockholders' deficit** | **($16,683)** | **($15,109)** | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) For Q1 2025, revenue decreased 12.9% to $7.9 million, but cost-cutting measures helped narrow the net loss to $1.8 million Consolidated Statements of Operations (in thousands, except per share data) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenue | $7,882 | $9,048 | | Gross profit | $7,080 | $8,072 | | Total operating expenses | $8,321 | $9,820 | | Loss from operations | ($1,241) | ($1,748) | | **Net loss** | **($1,781)** | **($2,387)** | | **Net loss per share (Basic & Diluted)** | **($0.59)** | **($1.09)** | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating and financing activities increased significantly in Q1 2025, resulting in a $5.9 million net decrease in cash Consolidated Statements of Cash Flows (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($1,862) | ($873) | | Net cash used in investing activities | ($349) | ($209) | | Net cash used in financing activities | ($3,680) | ($114) | | **Net decrease in cash, cash equivalents, and restricted cash** | **($5,891)** | **($1,196)** | | Cash, cash equivalents, and restricted cash, end of period | $8,881 | $14,348 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key notes highlight the going concern doubt, terms of convertible notes, and a proposed reverse stock split to suspend SEC reporting - The company's primary revenue source is advertising, generating **$7.7 million in Q1 2025**, with the United States accounting for the vast majority[56](index=56&type=chunk) - On January 15, 2025, the company amended its convertible notes, **extending the maturity date to July 1, 2025**, and made a principal prepayment of $3.678 million[65](index=65&type=chunk) - The company's stock was **delisted from Nasdaq on January 17, 2025**, and now trades on the OTC Pink Open Market[73](index=73&type=chunk)[74](index=74&type=chunk) - The company proposed a **reverse stock split** to reduce its number of record holders below 300, permitting it to suspend SEC reporting obligations[137](index=137&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 13% revenue decline, improved Adjusted EBITDA from cost-cutting, and the company's precarious liquidity situation [Key Metrics](index=29&type=section&id=Key%20Metrics) Key metrics show a 12% decline in ending retail accounts, attributed to customer budget issues and removal of non-paying clients Key Operating Metrics | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Ending retail accounts | 3,362 | 3,840 | (478) | -12% | | Retailer ARPA | $684 | $677 | $7 | 1% | [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Q1 2025 revenue fell 13% to $7.9 million, while a 15% reduction in operating expenses helped narrow the net loss Revenue by Segment (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Retail | $6,946 | $7,871 | ($925) | -12% | | Brands | $936 | $1,177 | ($241) | -20% | | **Total revenue** | **$7,882** | **$9,048** | **($1,166)** | **-13%** | - Operating expenses **declined by $1.5 million (15%) YoY**, driven by decreases in Sales and Marketing, Product Development, and G&A expenses[160](index=160&type=chunk)[161](index=161&type=chunk) [Non-GAAP Financial Measures](index=33&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA improved significantly to a positive $49,000 in Q1 2025 from a loss of $867,000 in Q1 2024 due to cost-cutting Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net loss | ($1,781) | ($2,387) | | Interest expense, net | 547 | 607 | | Depreciation and amortization expense | 421 | 329 | | **EBITDA** | **($813)** | **($1,451)** | | Stock-based compensation | 209 | 598 | | Transaction related expenses | 663 | — | | Change in fair value of derivatives | (10) | (14) | | **Adjusted EBITDA** | **$49** | **($867)** | [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is severely constrained, with insufficient capital to fund operations or repay $25.7 million in notes due July 2025 - The company has **$25.7 million of convertible notes maturing on July 1, 2025**, and its current liquidity position is insufficient for repayment[182](index=182&type=chunk) - Management has concluded that **substantial doubt exists about the company's ability to continue as a going concern** within one year[182](index=182&type=chunk) - The company is pursuing a reverse stock split to **'go private' and suspend SEC reporting obligations** to save costs[182](index=182&type=chunk)[186](index=186&type=chunk)[187](index=187&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the company is not required to provide information regarding market risk - As a **smaller reporting company**, Leafly is not required to provide disclosures about market risk[193](index=193&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes identified - The CEO and CFO concluded that the company's **disclosure controls and procedures were effective** at the reasonable assurance level[196](index=196&type=chunk) - There were **no material changes in internal control over financial reporting** during the quarter[197](index=197&type=chunk) Part II - Other Information [Item 1. Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings not expected to have a material effect on its financial position - The company is **not a party to any material pending legal proceedings**[198](index=198&type=chunk) [Item 1A. Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) The risk related to the company's plan to terminate SEC registration and suspend public reporting has materially increased - The risk associated with the company's plan to **'go private' and suspend reporting obligations has increased** due to recent actions[199](index=199&type=chunk) [Item 5. Other Information](index=39&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the first quarter of 2025 - **No director or officer adopted or terminated a Rule 10b5-1 trading arrangement** during the three months ended March 31, 2025[200](index=200&type=chunk) [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including required CEO and CFO certifications and corporate documents - Exhibits filed with the report include corporate governance documents and **CEO/CFO certifications under Sarbanes-Oxley**[202](index=202&type=chunk)

Part I [Business](index=4&type=section&id=Item%201.%20Business) Leafly operates a multi-sided online marketplace connecting cannabis consumers with licensed retailers and brands, generating revenue from subscriptions and advertising - Leafly's mission is to help people discover cannabis, serving as a **trusted destination** to discover and shop for legal cannabis products[16](index=16&type=chunk) - The company operates a content-first, community-driven, multi-sided marketplace that connects consumers to cannabis brands and licensed retailers, with an audience of over **48 million** in 2024[17](index=17&type=chunk) Revenue Breakdown by Partner Type (2023-2024) | Partner Type | 2024 Revenue Share | 2023 Revenue Share | | :--- | :--- | :--- | | Retail Partners | 86.3% | 85.0% | | Brand Partners | 13.7% | 15.0% | Revenue Concentration by State (2024) | State | Revenue Share | | :--- | :--- | | Arizona | 23% | | California | 12% | | Oregon | 10% | - As of December 31, 2024, Leafly had **111 employees**, with 109 located in the U.S. and 2 in Canada[62](index=62&type=chunk) - Key competitors include **Weedmaps, Dutchie, and Jane Technologies**, a transaction-oriented marketplace, and e-commerce enablement providers[45](index=45&type=chunk)[46](index=46&type=chunk) [Risk Factors](index=14&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant operational, regulatory, and financial risks, including a history of losses, going concern doubts, and stock delisting [Risks Relating to Our Business and Industry](index=16&type=section&id=Risks%20Relating%20to%20Our%20Business%20and%20Industry) The company has a history of operating losses and faces substantial doubt about its ability to continue as a going concern due to upcoming debt maturities and intense competition - The company has a history of operating losses, including a net loss of **$5.7 million** in 2024, and may not achieve or maintain profitability in the future[115](index=115&type=chunk) - There is **substantial doubt** about the company's ability to continue as a going concern, primarily due to the impending maturity of its 2022 Notes on **July 1, 2025**, which it may not be able to repay without additional financing[117](index=117&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk) - The company faces **intense competition** from other advertising platforms and online marketplaces such as Weedmaps, Dutchie, and iHeartJane, as well as from retailers operating their own e-commerce sites[99](index=99&type=chunk)[100](index=100&type=chunk) - A **15% decline** in ending retail accounts was experienced in 2024 compared to 2023, alongside a **25% drop** in brand revenue, driven by macro challenges and customer financial struggles[124](index=124&type=chunk) [Regulatory Risks](index=32&type=section&id=Regulatory%20Risks) The company operates in a complex regulatory environment where cannabis remains federally illegal, necessitating compliance with evolving state and provincial laws and data privacy regulations - Cannabis remains a **Schedule I controlled substance** under the U.S. federal Controlled Substances Act (CSA), making the company's business and its suppliers' operations **illegal at the federal level**, despite state-level legalization[167](index=167&type=chunk)[206](index=206&type=chunk) - The business is subject to a **complex and evolving patchwork of state and Canadian provincial laws**; changes in these regulations or stricter enforcement could require costly compliance measures or alter the business model[170](index=170&type=chunk) - The company is subject to **numerous data privacy and protection laws**, such as the CCPA in California and PIPEDA in Canada, and failure to comply could result in significant fines and reputational damage[188](index=188&type=chunk)[191](index=191&type=chunk) [Additional Risks Related to the Cannabis Industry](index=40&type=section&id=Additional%20Risks%20Related%20to%20the%20Cannabis%20Industry) Cannabis businesses face unique challenges including unfavorable tax treatment under Section 280E, difficulties in accessing banking services, and highly volatile security valuations - Cannabis businesses, including the company's clients, are subject to **unfavorable U.S. tax treatment under Section 280E** of the Internal Revenue Code, which prohibits deductions for ordinary business expenses and reduces profitability, potentially decreasing demand for Leafly's services[227](index=227&type=chunk) - The company and its clients face **difficulties accessing and maintaining banking and financial services** due to the federal illegality of cannabis, which could disrupt operations and payment processing[215](index=215&type=chunk)[216](index=216&type=chunk) - The valuation of cannabis industry securities has been **highly volatile**, with the Global Cannabis Stock Index **dropping over 93%** from its peak, which may negatively affect the value of the company's securities[233](index=233&type=chunk) [Risks Related to Our Intellectual Property](index=47&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) Failure to protect intellectual property rights or costly litigation from third-party claims could harm the company's brand and operations - **Failure to protect or enforce intellectual property rights**, including the "Leafly" brand, trademarks, and proprietary software, could harm the company's brand, business, and results of operations[240](index=240&type=chunk) - The company may be subject to **costly disputes and litigation** from third parties claiming violation of their intellectual property rights, which could divert management attention and resources[236](index=236&type=chunk)[237](index=237&type=chunk) [Public Company and Financial Reporting Risks](index=48&type=section&id=Public%20Company%20and%20Financial%20Reporting%20Risks) The company faces increased risks due to its stock delisting to OTC Pink, loss of 'Emerging Growth Company' status, and potential privatization to reduce public company costs - The company's common stock and warrants were **delisted from the Nasdaq Capital Market** and began trading on the more limited **OTC Pink Open Market** on January 17, 2025, which may reduce liquidity and depress the trading price[251](index=251&type=chunk)[252](index=252&type=chunk)[253](index=253&type=chunk) - Effective December 31, 2024, the company is **no longer an "Emerging Growth Company,"** which may increase reporting burdens and compliance costs[261](index=261&type=chunk) - Management is considering **taking the company private** to save costs associated with being a public company and may deregister its securities, which would make it more difficult for investors to monitor their investment[257](index=257&type=chunk)[263](index=263&type=chunk) [Risks Relating to our Indebtedness](index=59&type=section&id=Risks%20Relating%20to%20our%20Indebtedness) The company faces significant risks from its inability to repay the $29.4 million 2022 Notes maturing in July 2025, with holders having a security interest in substantially all assets - The company may not be able to repay its 2022 Notes, which had an outstanding principal of **$29.4 million** at year-end and mature on **July 1, 2025**; failure to pay would significantly impact ongoing operations[295](index=295&type=chunk)[296](index=296&type=chunk) - Holders of the 2022 Notes have a **security interest in substantially all of the company's assets**, meaning they could foreclose on these assets if the company fails to meet its payment obligations[298](index=298&type=chunk) - The convertible notes contain **restrictive covenants** that may limit the company's ability to incur additional debt, pay dividends, make certain investments, and pursue its growth strategy[301](index=301&type=chunk)[303](index=303&type=chunk) [Unresolved Staff Comments](index=64&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the U.S. Securities and Exchange Commission - None[321](index=321&type=chunk) [Cybersecurity](index=64&type=section&id=Item%201C.%20Cybersecurity) Leafly's cybersecurity strategy, guided by NIST CSF, involves external testing and Board oversight, with no material risks identified from past incidents - The company's cybersecurity approach is guided by the National Institute of Standards and Technology's Cybersecurity Framework (**NIST CSF**)[322](index=322&type=chunk) - **External cybersecurity professionals** are engaged to conduct annual penetration testing, incident response exercises, and to help design and manage the security program[323](index=323&type=chunk) - The **Board's Audit Committee** has been delegated the responsibility of providing oversight of cybersecurity risks[329](index=329&type=chunk) - The company does not believe there are **no material risks** from cybersecurity threats, including from previous incidents, that are reasonably likely to materially affect its business strategy, operations, or financial condition[326](index=326&type=chunk) [Properties](index=66&type=section&id=Item%202.%20Properties) The company operates with a fully remote workforce and does not possess any material physical properties, allowing for capital reinvestment - As of December 31, 2024, Leafly did not have any **no material physical properties** and operates with a **fully remote workforce** to reinvest capital resources into the business[331](index=331&type=chunk) [Legal Proceedings](index=66&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings but does not anticipate any material liabilities from these matters - The company has recognized **no material accrual liability** for ongoing legal matters and does not currently expect it is reasonably possible that these matters will result in a material liability[334](index=334&type=chunk) [Mine Safety Disclosures](index=66&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's business - Not applicable[335](index=335&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=67&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Leafly's common stock and warrants were delisted from Nasdaq to the OTC Pink Open Market on January 17, 2025, with 433 stockholders of record as of March 19, 2025, and no anticipated cash dividends - Effective January 17, 2025, the company's common stock and warrants were **delisted from Nasdaq** and began trading on the **OTC Pink Open Market**[337](index=337&type=chunk) - As of March 19, 2025, there were **433 stockholders** of record[338](index=338&type=chunk) - The company has **never paid cash dividends** on its common stock and does not expect to in the foreseeable future[339](index=339&type=chunk) [Reserved](index=67&type=section&id=Item%206.%20Reserved) This item is reserved and contains no information [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=68&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2024, Leafly's revenue decreased by 18% to $34.6 million, while net loss narrowed to $5.7 million and Adjusted EBITDA turned positive, despite delisting and ongoing going concern doubts due to debt maturity Key Operating Metrics (2023-2024) | Metric | 2024 | 2023 | Change | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Ending retail accounts | 3,480 | 4,075 | (595) | -15% | | Retailer ARPA | $692 | $607 | $85 | 14% | Consolidated Results of Operations (in thousands) | Metric | 2024 | 2023 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $34,642 | $42,252 | $(7,610) | -18% | | Gross Profit | $30,965 | $37,451 | $(6,486) | -17% | | Loss from Operations | $(3,136) | $(7,051) | $3,915 | 55% | | Net Loss | $(5,747) | $(9,498) | $3,751 | 39% | Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Net loss | $(5,747) | $(9,498) | | EBITDA | $(1,806) | $(5,734) | | Adjusted EBITDA | $682 | $(2,279) | - The company's securities were **delisted from Nasdaq** on January 17, 2025, and now trade on the OTC Pink Open Market[348](index=348&type=chunk)[349](index=349&type=chunk) - The maturity date of the 2022 Notes was **extended to July 1, 2025**, from January 31, 2025, contingent on a **12.5% principal paydown**; the company granted a security interest in its assets as collateral for these notes[351](index=351&type=chunk) - Management has concluded that **substantial doubt** exists about the company's ability to continue as a going concern due to its inability to meet its debt obligations maturing in **July 2025** without securing additional capital[389](index=389&type=chunk)[390](index=390&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=79&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Leafly is not required to provide the information for this item - Leafly is a **smaller reporting company** and is not required to furnish the information for this item[410](index=410&type=chunk) [Financial Statements and Supplementary Data](index=80&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for 2023-2024, including the auditor's going concern explanatory paragraph, and key balance sheet and operations data - The report of the independent registered public accounting firm includes an explanatory paragraph stating that conditions raise **substantial doubt** about the Company's ability to continue as a **going concern**[416](index=416&type=chunk) Key Balance Sheet Data (as of Dec 31, 2024, in thousands) | Account | Amount | | :--- | :--- | | Total Current Assets | $16,803 | | Total Assets | $19,638 | | Total Current Liabilities | $34,676 | | Total Liabilities | $34,747 | | Total Stockholders' Deficit | $(15,109) | Key Statement of Operations Data (Year ended Dec 31, 2024, in thousands) | Metric | Amount | | :--- | :--- | | Revenue | $34,642 | | Gross Profit | $30,965 | | Loss from Operations | $(3,136) | | Net Loss | $(5,747) | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=120&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[630](index=630&type=chunk) [Controls and Procedures](index=120&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2024, with no material changes during Q4 2024 - Management concluded that the company's disclosure controls and procedures were **effective** as of the end of the period covered by the report[633](index=633&type=chunk) - Based on an assessment using the COSO framework, management concluded that the company's internal control over financial reporting was **effective** as of December 31, 2024[637](index=637&type=chunk) - **No changes** in internal control over financial reporting occurred during the fourth quarter of 2024 that materially affected, or are reasonably likely to materially affect, internal controls[639](index=639&type=chunk) [Other Information](index=121&type=section&id=Item%209B.%20Other%20Information) During the fourth quarter of 2024, no director or officer adopted or terminated a Rule 10b5-1 trading arrangement - **No director or officer adopted or terminated a Rule 10b5-1 trading arrangement** during the three months ended December 31, 2024[640](index=640&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=121&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[641](index=641&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=122&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section details the company's board of directors and executive officers, their committee memberships, the adopted code of ethics, and the Audit Committee's financial expertise - The report lists the members of the **Board of Directors and executive officers**, including their roles and committee assignments; the Board is classified with three-year staggered terms[644](index=644&type=chunk)[645](index=645&type=chunk) - The company has adopted a **code of ethics and business conduct** that applies to all directors, officers, and employees[661](index=661&type=chunk) - Each member of the Audit Committee is qualified as an "**audit committee financial expert**" as defined by the SEC[660](index=660&type=chunk) [Executive Compensation](index=125&type=section&id=Item%2011.%20Executive%20Compensation) This section outlines compensation for Named Executive Officers (NEOs) including base salary and equity, noting no bonuses for 2023-2024, and details director compensation - The Named Executive Officers (NEOs) for fiscal year 2024 were **Yoko Miyashita, Peter Lee, and Suresh Krishnaswamy** (CEO, President and COO, and CFO, respectively)[668](index=668&type=chunk) 2024 Summary Compensation Table | Name and Principal Position | Year | Total ($) | | :--- | :--- | :--- | | Yoko Miyashita, CEO | 2024 | $564,519 | | Peter Lee, President & COO | 2024 | $496,210 | | Suresh Krishnaswamy, CFO | 2024 | $467,763 | - **No bonuses were awarded** by the Compensation Committee under the 2023 or 2024 Annual Incentive Plans after assessing the company's financial performance and market conditions[678](index=678&type=chunk) - Non-employee director compensation includes **annual cash retainers and RSU grants** for board and committee service[726](index=726&type=chunk)[727](index=727&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=140&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section details beneficial ownership of common stock as of March 19, 2025, identifying major stockholders and collective holdings of directors and executive officers Beneficial Ownership as of March 19, 2025 | Name of Beneficial Owner | % of Outstanding Common Stock | | :--- | :--- | | **5% Stockholders:** | | | Tenor Capital Management Company, L.P. | 9.2% | | Michael Blue | 5.0% | | **Management:** | | | All directors and executive officers as a group (6 individuals) | 6.8% | [Certain Relationships and Related Transactions, and Director Independence](index=142&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The company has a policy for related person transactions, disclosing agreements from the 2022 de-SPAC merger and a 2023 consulting agreement with Peter Lee, with a majority of directors deemed independent - The Board has adopted a **written policy** for the review and approval of related person transactions, overseen by the Audit Committee[741](index=741&type=chunk)[743](index=743&type=chunk) - In 2023, the company entered into a consulting agreement with Peter Lee (then a director, now President & COO), under which he earned **$120,000** for services related to business strategies[751](index=751&type=chunk) - The Board has determined that a **majority of its directors are independent** as defined under applicable Nasdaq rules[753](index=753&type=chunk) [Principal Accountant Fees and Services](index=145&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) This section discloses fees paid to Marcum LLP, totaling $625,000 in 2024 and $628,500 in 2023, all pre-approved by the Audit Committee Fees Paid to Marcum LLP (in thousands) | Fee Type | 2024 | 2023 | | :--- | :--- | :--- | | Audit Fees | $565,000 | $550,000 | | Audit-related fees | $60,000 | $78,500 | | **Total fees** | **$625,000** | **$628,500** | - All fees for 2024 and 2023 were **pre-approved** by the Audit Committee[755](index=755&type=chunk) Part IV [Exhibits and Financial Statement Schedule](index=146&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedule) This section provides an index of all exhibits filed as part of the Form 10-K report, including corporate governance documents and material contracts - This section contains the **Exhibit Index**, listing all documents filed with or incorporated by reference into the Annual Report[757](index=757&type=chunk) [Form 10-K Summary](index=151&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company indicates that there is no Form 10-K summary provided - None[762](index=762&type=chunk)

Group 1 - The article discusses an investigation initiated by Levi & Korsinsky, LLP into Leafly Holdings Inc, focusing on potential violations of securities laws [1] - The investigation aims to determine whether Leafly Holdings Inc misled investors regarding its business operations and financial performance [1] - The firm is encouraging investors who suffered losses to contact them for further information and potential legal action [1]

Core Viewpoint - Levi & Korsinsky, LLP has initiated an investigation into Leafly Holdings Inc, focusing on potential shareholder concerns regarding the company's practices and disclosures [1] Group 1: Investigation Details - The investigation aims to determine whether Leafly Holdings Inc has engaged in any unlawful or improper conduct that could affect shareholder value [1] - Shareholders are being notified about the investigation, indicating potential legal implications for the company [1] Group 2: Implications for Shareholders - The outcome of the investigation may have significant implications for current and prospective shareholders of Leafly Holdings Inc [1] - Shareholders are encouraged to stay informed about the developments related to the investigation [1]

Revenue Performance - Revenue for the three months ended September 30, 2024, was $8.353 million, a decrease of 21% compared to $10.583 million for the same period in 2023[10]. - Revenue for the three months ended September 30, 2024, was $8,353 million, a decrease of 21.6% compared to $10,583,000 for the same period in 2023[84]. - Retail segment revenue for the three months ended September 30, 2024, was $7,378,000, down 20.4% from $9,266,000 in the prior year[84]. - Revenue from advertising for the nine months ended September 30, 2024, was $25,637 million, down 20.06% from $32,126 million for the same period in 2023[44]. - Brands revenue decreased by 26% to $975 million for the three months ended September 30, 2024, compared to $1,317 million in 2023, primarily due to reduced spending by brand customers[102]. Financial Performance - Gross profit for the three months ended September 30, 2024, was $7.449 million, down from $9.420 million in the same period last year, reflecting a gross margin decline[10]. - The net loss for the three months ended September 30, 2024, was $1.139 million, compared to a net loss of $2.210 million for the same period in 2023, indicating an improvement in financial performance[10]. - Net loss for the nine months ended September 30, 2024, was $4.801 million, compared to a net loss of $9.043 million for the same period in 2023, indicating a significant improvement[16]. - The company reported a basic net loss per share of $0.46 for the three months ended September 30, 2024, compared to a loss of $1.10 per share in the same period last year[11]. - EBITDA for the three months ended September 30, 2024, was $(132), an improvement from $(1,214) for the same period in 2023, reflecting operational efficiency gains[121]. Cash and Liquidity - Cash and cash equivalents as of September 30, 2024, were $13.567 million, down from $15.293 million at December 31, 2023[8]. - Cash, cash equivalents, and restricted cash totaled $13,815 as of September 30, 2024, down from $15,544 as of December 31, 2023[122]. - Cash used in operating activities for the nine months ended September 30, 2024, was $316 thousand, a substantial decrease from $9.638 million in the prior year[16]. - The company may need to raise additional funds to meet liquidity needs, which could involve dilutive equity financing or debt refinancing[128]. - The company has an accumulated deficit of $78,999 million as of September 30, 2024, compared to $74,198 million at December 31, 2023, indicating ongoing financial challenges[130]. Operating Expenses - Total operating expenses for the three months ended September 30, 2024, were $7.996 million, a reduction of 26% from $10.895 million in the prior year[10]. - Total operating expenses for the three months ended September 30, 2024, were $7,996 million, down 27% from $10,895 million in 2023, reflecting reductions in sales and marketing, product development, and general administrative costs[108]. - Total stock-based compensation expense for the nine months ended September 30, 2024, was $1.629 million, down from $2.235 million in 2023[16]. - General and administrative expenses decreased by $2,157 for the three months ended September 30, 2024, compared to the same period in 2023, driven by a $905 decrease in bad debts expense and a $585 decrease in compensation costs[113]. Debt and Compliance - The company has substantial doubt regarding its ability to continue as a going concern due to the inability to repay convertible notes due in January 2025[7]. - The company does not currently meet any of the Continued Listing Standards under Nasdaq Listing Rule 5550, which includes a minimum stockholders' equity of $2.5 million and a market value of listed securities of $35 million[57]. - The Company was out of compliance with Nasdaq Listing Rule 5605(c)(2)(A) from January 1, 2024, until March 25, 2024, but regained compliance on April 1, 2024[56]. - The company submitted a proposed plan of compliance to Nasdaq on May 24, 2024, but received a plan denial and delisting determination letter on October 4, 2024[58]. - The company has incurred operating losses since inception and cannot meet its debt maturity obligations without significant capital infusion or refinancing[130]. Restructuring and Cost-Saving Measures - The company implemented restructuring plans in Q1 2023, which reduced its labor force and significantly decreased costs compared to fiscal year 2022[20]. - Leafly's total employees declined from 131 to 119 during the nine months ended September 30, 2024, as part of its cost-saving measures[20]. - The company is exploring financing and strategic opportunities to maximize stakeholder value, indicating a focus on future growth[130]. Customer and Market Dynamics - Ending retail accounts decreased by 20% year-over-year to 3,554 as of September 30, 2024, down from 4,466 in 2023, primarily due to customer budget constraints and the removal of nonpaying customers[96]. - Retailer Average Revenue Per Account (ARPA) increased by 8% year-over-year to $695 for the three months ended September 30, 2024, compared to $644 in the same period of 2023[97]. - The decrease in retail revenues was primarily attributed to a $870 million decrease in subscription revenue and a $979 million decrease in digital display ads for the three months ended September 30, 2024[101]. Stock and Equity - The company raised $908 thousand from the sale of stock via an ATM offering during the nine months ended September 30, 2024[16]. - A one-for-twenty reverse stock split was implemented on September 12, 2023, affecting the comparative analysis of share prices and counts[22]. - As of September 30, 2024, there were 7,105,772 public warrants outstanding to purchase an aggregate of 355,288 shares of common stock at an exercise price of $230.00 per whole share[66]. - As of September 30, 2024, there were 3,345,215 Private Warrants outstanding, allowing the purchase of an aggregate of 167,260 shares of common stock[67]. - The Company executed a Second Conversion Notice on May 7, 2024, adjusting the conversion price of the 2022 Notes to $2.8405, which is 5% less than the last reported sale price[53].

Industry Overview - The cannabis industry is experiencing growth, with over half of the USA having legalized marijuana in some form, which is driving demand for cannabis products [2] - Positive news regarding federal or state-level reforms tends to lead to better trading performance for marijuana stocks, although much of the trading is speculative and volatile [1][2] Company Highlights Leafly Holdings, Inc. (NASDAQ:LFLY) - Reported Q2 2024 revenue of $8.7 million, down from $10.7 million in Q2 2023 - Retail revenue decreased to $7.3 million from $8.8 million, while brand revenue fell to $1.4 million from $1.8 million - Gross margin improved to 89% from 88% in Q2 2023 - Total operating expenses reduced by 17% to $8.4 million from $10.2 million, reflecting cost discipline - Net loss slightly improved to $1.3 million from $1.4 million in Q2 2023 [5] WM Technology, Inc. (NASDAQ:MAPS) - Reported Q2 2024 net income of $1.2 million, down from $2.0 million in the prior year - Adjusted EBITDA decreased to $10.1 million from $10.2 million year-over-year - Cash increased to $41.3 million as of June 30, 2024, compared to $34.4 million at the end of 2023 - Total shares outstanding were 152.4 million as of June 30, 2024 [8] The Scotts Miracle-Gro Company (NYSE:SMG) - Reported fiscal 2024 third quarter net sales of $1 billion, an 11% increase from the prior year - Consumer engagement showed strength with unit point of sale (POS) up 10% year-to-date - GAAP gross margin rate improved to 29.5%, an increase of 1,110 basis points over the prior year - GAAP EPS for the third quarter was $2.28, while non-GAAP adjusted EPS was $2.31, nearly doubling the third quarter 2023 non-GAAP result [9]

Financial Performance - Revenue for the three months ended June 30, 2024, was $8.722 million, a decrease of 18.3% compared to $10.675 million for the same period in 2023[10]. - Gross profit for the six months ended June 30, 2024, was $15.835 million, down 18.1% from $19.340 million for the same period in 2023[10]. - Operating expenses for the three months ended June 30, 2024, totaled $8.409 million, a reduction of 17.4% compared to $10.188 million for the same period in 2023[10]. - Net loss for the three months ended June 30, 2024, was $1.275 million, compared to a net loss of $1.436 million for the same period in 2023[10]. - For the six months ended June 30, 2024, Leafly reported a net loss of $3.66 million, compared to a net loss of $6.83 million for the same period in 2023, indicating a 46.5% improvement in losses year-over-year[17]. - The company reported a basic net loss per share of $0.55 for the three months ended June 30, 2024, compared to a loss of $0.73 for the same period in 2023[10]. - Total gross profit for the six months ended June 30, 2024, was $15,835,000, a decline of 18.0% from $19,340,000 for the same period in 2023[92]. - The company reported a net loss of $1,275,000 for the three months ended June 30, 2024, compared to a net loss of $1,436,000 for the same period in 2023[102]. - Basic net loss per share for the three months ended June 30, 2024, was $(0.55), an improvement from $(0.73) in the same period of 2023[102]. Assets and Liabilities - Total current assets decreased to $17.790 million as of June 30, 2024, from $19.002 million as of December 31, 2023[8]. - Total liabilities increased to $35.200 million as of June 30, 2024, compared to $34.293 million as of December 31, 2023[8]. - Cash and cash equivalents decreased to $13.573 million as of June 30, 2024, from $15.293 million as of December 31, 2023[8]. - The company’s accumulated deficit increased to $77.860 million as of June 30, 2024, from $74.198 million as of December 31, 2023[8]. - The total stockholders' deficit at June 30, 2024, was $14.66 million, an increase from $11.88 million at June 30, 2023, reflecting ongoing financial challenges[14]. - Leafly's cash, cash equivalents, and restricted cash decreased from $25.2 million at the beginning of 2023 to $13.82 million at the end of June 2024, a decline of 45.2%[17]. - The company has convertible promissory notes totaling $29.080 million due in January 2025, raising substantial doubt about its ability to continue as a going concern[7]. - The company has $29,425,000 of 2022 Notes maturing on January 31, 2025, and based on current liquidity, it would not be able to repay these notes when due[23]. Cash Flow and Expenses - Cash used in operating activities for the six months ended June 30, 2024, was $454,000, significantly reduced from $9.82 million in the same period of 2023, showing improved cash flow management[17]. - The company recorded stock-based compensation expenses of $1.2 million for the six months ended June 30, 2024, slightly down from $1.24 million in the prior year[17]. - The company recognized total depreciation and amortization expense of $323,000 for the three months ended June 30, 2024, compared to $226,000 for the same period in 2023, an increase of approximately 43.0%[38]. - Total cost of sales for the six months ended June 30, 2024, was $1,935,000, down 25.0% from $2,584,000 for the same period in 2023[92]. Revenue Breakdown - Revenue from advertising for the three months ended June 30, 2024, was $8,539 million, down 19.1% from $10,554 million in the prior year[43]. - Revenue from other services increased to $183 million for the three months ended June 30, 2024, compared to $121 million in the same period last year[43]. - Revenue from the United States for the three months ended June 30, 2024, was $8,414 million, a decrease of 17.9% from $10,253 million in the prior year[44]. - Revenue recognized over time for retail services was $7,341 million for the three months ended June 30, 2024, down from $8,840 million in the same period last year[46]. - Retail segment revenue decreased to $7,341,000 for the three months ended June 30, 2024, down 17.0% from $8,840,000 in the prior year[92]. Stock and Equity - Leafly's total common shares outstanding increased from 2,163,766 at January 1, 2023, to 2,619,047 at June 30, 2024, representing a 21% increase in shares[14]. - Leafly entered into an Equity Distribution Agreement on June 27, 2024, allowing the sale of up to $2.519 million in common stock through an at-the-market offering[62]. - No sales were made under the ATM Offering through June 30, 2024, but 40,000 common shares were sold for net proceeds of $96 after that date[64]. - Leafly stockholders were granted contingent rights to receive up to 271,454 shares of common stock if certain earn-out conditions are met before the third anniversary of the Business Combination[65]. - As of June 30, 2024, there were 7,105,772 public warrants outstanding, each entitling the holder to purchase 0.05 shares of common stock at an exercise price of $230.00[67]. - The Company may redeem public warrants at a price of $0.20 per warrant if the common stock price exceeds $360.00 for 20 trading days within a 30-day period[70]. - A reverse stock split of 1-for-20 was approved on July 12, 2023, and became effective on September 12, 2023, resulting in the issuance of 34,192 shares[59]. - As of June 30, 2024, Leafly had 200 million authorized shares of common stock and 5 million authorized shares of preferred stock[60]. Compliance and Regulatory Issues - The company regained compliance with Nasdaq's Audit Committee Rule on April 1, 2024, after appointing two new independent directors[54]. - The company received a notice from Nasdaq regarding noncompliance with Listing Rule 5550, indicating ongoing regulatory challenges[55]. - Leafly's stockholders' equity must exceed $2.5 million to comply with Nasdaq's Stockholders' Equity standard[57]. - The total market value of Leafly's listed securities must be $35 million or more for at least ten consecutive business days to meet Nasdaq's Market Value of Listed Securities standard[57]. Strategic Initiatives - The company implemented restructuring plans in Q1 2023, which reduced its labor force and significantly decreased costs compared to fiscal year 2022, with full-year impact expected in 2024[23]. - The company engaged advisors in Q2 2024 to explore financing and strategic opportunities to maximize shareholder value[23]. - Leafly's business combination with Merida Merger Corp. I was completed on February 4, 2022, allowing for a strategic repositioning in the market[19]. Miscellaneous - The company is classified as an emerging growth company (EGC) and has elected to delay adopting new accounting standards until they apply to private companies[29]. - The company has three wholly-owned subsidiaries, enhancing its operational footprint in the cannabis marketplace[18]. - The company has not performed an IRC Section 382 study as of December 31, 2023, due to its full valuation allowance[96].

Revenue Performance - Q2 2024 revenue was $8.7 million, down from $10.7 million in Q2 2023, representing a decrease of 18.7%[1] - Retail revenue decreased to $7.3 million from $8.8 million in Q2 2023, a decline of 17%[1] - Brand revenue fell to $1.4 million from $1.8 million in Q2 2023, a decrease of 22.2%[1] - Revenue for the three months ended June 30, 2024, was $8,722 million, a decrease of 18.3% compared to $10,675 million for the same period in 2023[16] Gross Margin and Profitability - Gross margin improved to 89%, up from 88% in Q2 2023[1] - Gross profit for the six months ended June 30, 2024, was $15,835 million, down 18.0% from $19,340 million in the same period of 2023[16] - Adjusted EBITDA was $0.5 million, an increase from $0.1 million in Q2 2023[1] - Adjusted EBITDA for the six months ended June 30, 2024, was $(384) million, compared to $(3,264) million for the same period in 2023[21] Operating Expenses - Total operating expenses were reduced by 17% to $8.4 million from $10.2 million in Q2 2023[1] - Total operating expenses for the three months ended June 30, 2024, were $8,409 million, a decrease of 17.5% from $10,188 million in the same period of 2023[16] Net Loss and Financial Health - Net loss narrowed to $1.3 million compared to a net loss of $1.4 million in Q2 2023[1] - Net loss for the six months ended June 30, 2024, was $3,662 million, an improvement from a net loss of $6,833 million in the same period of 2023[17] - The company reported a net loss per share of $(0.55) for the three months ended June 30, 2024, compared to $(0.73) for the same period in 2023[16] Cash Flow and Liquidity - Cash used in operating activities for the six months ended June 30, 2024, was $(454) million, significantly improved from $(9,818) million in the same period of 2023[17] - Cash, cash equivalents, and restricted cash at the end of the period were $13,820 million, down from $14,729 million at the end of the same period in 2023[17] Accounts and Guidance - Ending retail accounts decreased by 32% to 3,595 from 5,261 in Q2 2023[3] - Retailer ARPA increased by 23% to $684 from $558 in Q2 2023[3] - Guidance for Q3 2024 revenue is expected to be around $8.4 million with an adjusted EBITDA loss of less than $1.0 million[5] - Interest expense for the six months ended June 30, 2024, was $1,245 million, compared to $1,437 million for the same period in 2023[21] - The company experienced a decrease in accounts receivable of $7 million for the six months ended June 30, 2024, compared to a decrease of $(1,701) million in the same period of 2023[17]