Revenue Performance - Revenue for the three months ended March 31, 2025, decreased by $2,062,762 or 39% to $3,160,480 compared to $5,223,242 in the same period last year, primarily due to a strategic shift away from the recommerce business[164] - For the nine months ended March 31, 2025, revenue declined by $9,438,325 or 45% to $11,522,487, with approximately $8,277,000 of the decline related to the strategic shift away from recommerce[173] Cost and Profitability - Cost of revenue decreased by $2,354,185 or 60%, leading to a gross profit increase of approximately $290,000 and a gross profit margin increase to 49% from 24% year-over-year[165] - The net loss for the three months ended March 31, 2025, was $3,831,660, a decrease from a loss of $4,118,612 in the same period last year[172] Expenses - General and administrative expenses increased by $828,028 or 46%, attributed to legal and auditing costs, with expectations for normalization post-restructuring[168] Cash Flow and Working Capital - Cash flows used in operating activities for continuing operations were $(4,137,346) for the nine months ended March 31, 2025, compared to $(3,700,706) in the prior year[184] - The company had current assets of $3,968,157 and current liabilities of $10,796,201 as of March 31, 2025, resulting in a working capital deficit of $(6,828,044)[183] - Management expects sufficient working capital to fund operations and meet debt obligations over the next twelve months following the issuance of the financial statements[189] Investment Activities - Net cash provided by investing activities for the nine months ended March 31, 2025, was $5,757,517, primarily from the sale of a building and collection of the purchase price for E-core[186] - On April 24, 2025, the company closed a private placement offering, selling 35,970,383 shares at $2.28 per share, raising approximately $92,586,000 net[188]

Revenue Performance - Revenue for the three months ended December 31, 2024, decreased by $3,457,388 or 46% to $4,005,492 compared to $7,462,880 in the same period last year[141]. - Revenue for the six months ended December 31, 2024, declined by $7,375,563 or 47% to $8,362,007 compared to $15,737,570 in the same period last year[153]. Cost Management - Cost of revenue decreased by $1,864,452 or 64%, leading to a gross profit margin increase to approximately 74% from 61% in the same period last year[144]. - Cost of revenue for the six months decreased by $3,283,206 or 57%, with a gross profit margin increase to 71% from 64% in the same period last year[154]. - Sales and marketing expenses decreased by $536,311 or 36% due to a reduction in unnecessary agency expenses[145]. - Distribution costs decreased by $1,223,790 or 49%, primarily related to the decline in recommerce revenue[146]. - General and administrative expenses decreased by $35,749 or 2%, with expectations for continued declines in future periods[147][148]. Financial Position - The company had cash of $406,347 as of December 31, 2024, a decrease of $255,068 from June 30, 2024, primarily due to operating losses and increases in accounts receivable and inventory[161]. - Management expects to finance operating costs over the next twelve months through existing cash, cash flow from operations, and potential short-term debt financing if necessary[167]. - The company has no off-balance sheet arrangements that materially affect its financial condition or results of operations[169]. Strategic Outlook - Management has determined that additional capital will be required in the near term to support its strategic plan[170]. - The financial statements have been prepared assuming the company will continue as a going concern, indicating confidence in asset realization and liability satisfaction[170]. Loss Performance - The net loss for the three months ended December 31, 2024, was $1,301,310, a decrease from a loss of $2,438,919 in the same period last year[151].

Financial Results - The company announced its financial results for the year ended June 30, 2024, and the first quarter ending September 30, 2024[8]. - The company has filed its Annual Report on Form 10-K for the year ended June 30, 2023, and Quarterly Reports on Form 10-Q for the periods ended September 30, 2023, December 31, 2023, and March 31, 2024[4]. Compliance and Regulations - The company regained compliance with Nasdaq Listing Rule 5250(c)(1) as of December 20, 2024[8]. - The company is classified as an emerging growth company under the Securities Act of 1933[15]. - The report does not include any written communications or soliciting materials under the Exchange Act[9]. - The company has not indicated any changes in its financial accounting standards compliance transition period[16]. Forward-Looking Statements - The financial statements and exhibits are subject to forward-looking statements, which include risks and uncertainties that could materially affect future results[4]. Executive Information - The company’s Chief Financial Officer, Andrew J. Norstrud, signed the report on December 23, 2024[20]. - The company’s principal executive offices are located at 3030 N. Rocky Point Drive, Suite 420, Tampa, FL 33607[21]. - The report includes a press release dated December 23, 2024, which is attached as Exhibit 99.1[17].

Revenue Performance - Revenue for the three months ended September 30, 2024, decreased by $3,918,175 or 47% to $4,356,515 compared to $8,274,690 in the same period last year[160]. Cost Management - Cost of revenue decreased by $1,418,754 or 50% compared to the same period last year, with gross margin remaining stable with less than a 2% change[161]. - Sales and marketing expenses decreased by $775,277 or 43% compared to the same period last year, primarily due to the reduction of unnecessary agency expenses[162]. - Distribution costs decreased by $676,167 or 32% compared to the same period last year, attributed to the decline in recommerce revenue[163]. - General and administrative expenses decreased by $210,660 or 13% compared to the same period last year, with expectations for continued declines post-December 31, 2024[165]. - Other operating expenses decreased by $957,965 or 71% compared to the same period last year, mainly due to changes in amortization of acquired intangible assets[166]. Financial Loss - The company reported a net loss of $1,625,577 for the three months ended September 30, 2024, compared to a loss of $1,333,388 for the same period in 2023[168]. Asset and Liability Overview - As of September 30, 2024, current assets were $6,790,280, down from $11,419,918 as of June 30, 2024, while current liabilities decreased to $9,771,401 from $12,655,152[169]. Cash Flow and Working Capital - Net cash provided by investing activities for the three months ended September 30, 2024, was $5,838,106, significantly higher than $145,324 in the same period last year[174]. - The company estimates sufficient working capital to fund operations over the next twelve months and meet all debt obligations[176].

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 ...