Leafly(US:LFLY)2024-08-10 00:20Financial 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].