Upexi(UPXI) - 2022 Q1 - Quarterly Report

Financial Performance - Revenue for the three months ended September 30, 2021, was $8,449,754, an increase of $5,512,312 or 188% compared to $2,937,442 in the same period last year [91]. - Net income for the three months ended September 30, 2021, was $511,711, a significant improvement of $1,320,784 compared to a net loss of $809,073 in the same period last year [94]. - Cost of revenue increased by $1,448,168 or 89% year-over-year, with a profit margin of 18.8% attributed to non-CBD health and wellness products and increased direct-to-consumer sales [92]. - Operating expenses rose by $2,868,515 or 138% compared to the same period last year, driven by the acquisition of VitaMedica and increased sales and marketing costs [93]. - Cash flows from operating activities for the three months ended September 30, 2021, were $817,357, compared to a cash outflow of $637,185 in the same period last year [96]. Cash and Working Capital - The company had cash of $13,034,699 as of September 30, 2021, reflecting a decrease of $1,499,512 from June 30, 2021 [96]. - Working capital as of September 30, 2021, was $13,539,231, an increase from $12,473,922 as of June 30, 2021 [95]. - The acquisition of VitaMedica involved a cash payment of $2,000,000 and an additional $600,000 earnout payment based on revenue milestones [99]. Internal Controls - The company has identified material weaknesses in its internal controls over financial reporting, including inadequate segregation of duties [104][105]. - The company plans to enhance its internal control systems by the end of the 2021 fiscal year to address identified weaknesses [108].