Upexi(US:UPXI)2024-12-16 22:24Financial Performance - For the fiscal year ended June 30, 2024, the company's revenue decreased by $10,441,043 or 29% to $26,000,652 compared to $36,441,695 in 2023[167]. - Product sales declined approximately $15,400,000 or 42% year-over-year, primarily due to decreased sales through third-party channels like Amazon[167]. - Gross profit decreased by $8,195,401 or 39%, with gross margin declining by 8.36% to 49.32% from 57.68%[169]. - The company reported a net loss attributable to Upexi, Inc. of $23,658,438 for the year ended June 30, 2024, compared to a net loss of $16,930,289 in 2023[167]. - Revenue for the year ended June 30, 2024, was $26,000,652, a decrease of 28.7% from $36,441,695 in the previous year[241]. - Gross profit decreased to $12,824,579, down 38.5% from $21,019,980 year-over-year[241]. - The net loss attributable to Upexi, Inc. was $23,658,438, compared to a loss of $16,930,289 in the previous year, representing a 39.5% increase in losses[243]. - Basic loss per share from continuing operations was $(24.60), compared to $(15.56) in the prior year[243]. - Operating expenses totaled $35,287,018, an increase from $33,300,703 year-over-year[241]. Cash Flow and Liquidity - Cash flows used in operating activities for continuing operations were $(4,894,751), an improvement from $(7,421,529) in the prior year[185]. - The company had cash of $661,415 as of June 30, 2024, reflecting a decrease of $3,830,877 from the previous year[185]. - Net cash provided by investing activities for the year ended June 30, 2024, was $831,112, compared to a use of $23,271 in 2023[187]. - The company had a net cash decrease of $4,417,428 from continuing operations, compared to a decrease of $1,411,899 in the prior year, indicating worsening cash flow[247]. - Cash used in operating activities from continuing operations was $4,894,751, an improvement from $7,421,529 in the prior year, indicating a 34.5% reduction in cash outflow[247]. Assets and Liabilities - Current assets decreased to $11,419,918 as of June 30, 2024, down from $30,012,984 in 2023, while current liabilities decreased to $12,655,152 from $22,391,587[182]. - Total assets decreased to $23,511,088 from $63,801,488, indicating a substantial reduction in overall asset base[239]. - Total current liabilities increased to $12,655,152 from $22,391,587, reflecting rising short-term obligations[239]. - Total liabilities and stockholders' equity amounted to $23,511,088, down from $63,801,488 in the prior year[241]. - The company reported a deferred revenue of $235,255, indicating future revenue recognition[239]. Impairments and Write-offs - The company recognized an impairment of intangible assets and goodwill of $7,869,425, primarily related to the exit from the recommerce business[177]. - The Company recognized an impairment of goodwill related to Cygnet of $3,594,745 at June 30, 2024, due to the strategic decision to exit the recommerce business[206]. - An impairment of intangible assets of $4,274,680 was recognized for the year ended June 30, 2024, including $974,680 related to LuckyTail and $3,300,000 related to Cygnet[217]. - The company wrote off inventory valued at $1,812,319 for the year ended June 30, 2024, compared to $118,990 for the previous year[330]. Acquisitions and Strategic Initiatives - The company acquired 55% of Cygnet Online, LLC for a total consideration of $5,515,756, which included cash, convertible notes, and common stock[313]. - The company completed the acquisition of the remaining 45% interest in Cygnet for structured cash payments totaling $800,000 and additional shares valued at $162,727[316]. - The acquisition of Cygnet is expected to enhance the company's operations as an Amazon and eCommerce seller, focusing on over-the-counter supplements and beauty products[317]. - Upexi, Inc. is focusing on strategic acquisitions to enhance its portfolio and market position[241]. Compliance and Governance - On October 17, 2024, the Company received a Compliance Notice from Nasdaq confirming it regained compliance with the minimum bid price requirement, with a closing bid price of $1.00 per share or greater from October 3 to October 16, 2024[225]. - The independent auditor confirmed that the consolidated financial statements present fairly the financial position of the Company as of June 30, 2024, and 2023, in accordance with U.S. GAAP[233]. - The Company has been audited by GBQ Partners LLC since 2024, ensuring compliance with PCAOB standards[237]. - The Company’s management is responsible for the consolidated financial statements, while the auditor's role is to express an opinion based on the audit[234]. Stock and Shareholder Information - A reverse stock split at a rate of 1-for-20 was effective as of October 3, 2024, resulting in the reclassification of $19,860 from Common Stock to Additional Paid-in-Capital[222]. - The reverse stock split did not alter any stockholder's percentage interest in the Company's Common Stock, and no fractional shares were issued[223]. - For the year ended June 30, 2024, the total potential dilutive weighted average shares outstanding decreased to 295,133 from 324,750 in the previous year[307]. Inventory Management - As of June 30, 2024, the Company reported $465,535 in raw materials and $966,021 in finished goods inventory, compared to no raw material inventory and $4,804,299 in finished goods inventory as of June 30, 2023[221]. - The Company had inventory reserves of $605,470 and $154,400 for the years ended June 30, 2024 and 2023, respectively, indicating a significant increase in reserves[221]. - Inventory write-offs increased significantly to $1,812,319 from $118,990 in the previous year, reflecting challenges in inventory management[247]. Lease and Facility Information - The Company entered into a lease agreement for approximately 10,000 square feet of warehouse and office space at $20,060 per month, expected to reduce overall facility costs by approximately $240,000 in rent[192]. - The company moved into a new distribution center in Tampa, Florida, in July 2023, with lease expenses recognized at approximately $374,500 for the year ended June 30, 2024[346]. - The total lease cost for the year ended June 30, 2024, was $1,624,556, an increase from $1,075,036 in the previous year[354].