Upexi(UPXI) - 2024 Q4 - Annual Results

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].