Leafly(US:LFLY)2024-11-08 21:50Revenue Performance - Revenue for the three months ended September 30, 2024, was $8.353 million, a decrease of 21% compared to $10.583 million for the same period in 2023[10]. - Revenue for the three months ended September 30, 2024, was $8,353 million, a decrease of 21.6% compared to $10,583,000 for the same period in 2023[84]. - Retail segment revenue for the three months ended September 30, 2024, was $7,378,000, down 20.4% from $9,266,000 in the prior year[84]. - Revenue from advertising for the nine months ended September 30, 2024, was $25,637 million, down 20.06% from $32,126 million for the same period in 2023[44]. - Brands revenue decreased by 26% to $975 million for the three months ended September 30, 2024, compared to $1,317 million in 2023, primarily due to reduced spending by brand customers[102]. Financial Performance - Gross profit for the three months ended September 30, 2024, was $7.449 million, down from $9.420 million in the same period last year, reflecting a gross margin decline[10]. - The net loss for the three months ended September 30, 2024, was $1.139 million, compared to a net loss of $2.210 million for the same period in 2023, indicating an improvement in financial performance[10]. - Net loss for the nine months ended September 30, 2024, was $4.801 million, compared to a net loss of $9.043 million for the same period in 2023, indicating a significant improvement[16]. - The company reported a basic net loss per share of $0.46 for the three months ended September 30, 2024, compared to a loss of $1.10 per share in the same period last year[11]. - EBITDA for the three months ended September 30, 2024, was $(132), an improvement from $(1,214) for the same period in 2023, reflecting operational efficiency gains[121]. Cash and Liquidity - Cash and cash equivalents as of September 30, 2024, were $13.567 million, down from $15.293 million at December 31, 2023[8]. - Cash, cash equivalents, and restricted cash totaled $13,815 as of September 30, 2024, down from $15,544 as of December 31, 2023[122]. - Cash used in operating activities for the nine months ended September 30, 2024, was $316 thousand, a substantial decrease from $9.638 million in the prior year[16]. - The company may need to raise additional funds to meet liquidity needs, which could involve dilutive equity financing or debt refinancing[128]. - The company has an accumulated deficit of $78,999 million as of September 30, 2024, compared to $74,198 million at December 31, 2023, indicating ongoing financial challenges[130]. Operating Expenses - Total operating expenses for the three months ended September 30, 2024, were $7.996 million, a reduction of 26% from $10.895 million in the prior year[10]. - Total operating expenses for the three months ended September 30, 2024, were $7,996 million, down 27% from $10,895 million in 2023, reflecting reductions in sales and marketing, product development, and general administrative costs[108]. - Total stock-based compensation expense for the nine months ended September 30, 2024, was $1.629 million, down from $2.235 million in 2023[16]. - General and administrative expenses decreased by $2,157 for the three months ended September 30, 2024, compared to the same period in 2023, driven by a $905 decrease in bad debts expense and a $585 decrease in compensation costs[113]. Debt and Compliance - The company has substantial doubt regarding its ability to continue as a going concern due to the inability to repay convertible notes due in January 2025[7]. - The company does not currently meet any of the Continued Listing Standards under Nasdaq Listing Rule 5550, which includes a minimum stockholders' equity of $2.5 million and a market value of listed securities of $35 million[57]. - The Company was out of compliance with Nasdaq Listing Rule 5605(c)(2)(A) from January 1, 2024, until March 25, 2024, but regained compliance on April 1, 2024[56]. - The company submitted a proposed plan of compliance to Nasdaq on May 24, 2024, but received a plan denial and delisting determination letter on October 4, 2024[58]. - The company has incurred operating losses since inception and cannot meet its debt maturity obligations without significant capital infusion or refinancing[130]. Restructuring and Cost-Saving Measures - The company implemented restructuring plans in Q1 2023, which reduced its labor force and significantly decreased costs compared to fiscal year 2022[20]. - Leafly's total employees declined from 131 to 119 during the nine months ended September 30, 2024, as part of its cost-saving measures[20]. - The company is exploring financing and strategic opportunities to maximize stakeholder value, indicating a focus on future growth[130]. Customer and Market Dynamics - Ending retail accounts decreased by 20% year-over-year to 3,554 as of September 30, 2024, down from 4,466 in 2023, primarily due to customer budget constraints and the removal of nonpaying customers[96]. - Retailer Average Revenue Per Account (ARPA) increased by 8% year-over-year to $695 for the three months ended September 30, 2024, compared to $644 in the same period of 2023[97]. - The decrease in retail revenues was primarily attributed to a $870 million decrease in subscription revenue and a $979 million decrease in digital display ads for the three months ended September 30, 2024[101]. Stock and Equity - The company raised $908 thousand from the sale of stock via an ATM offering during the nine months ended September 30, 2024[16]. - A one-for-twenty reverse stock split was implemented on September 12, 2023, affecting the comparative analysis of share prices and counts[22]. - As of September 30, 2024, there were 7,105,772 public warrants outstanding to purchase an aggregate of 355,288 shares of common stock at an exercise price of $230.00 per whole share[66]. - As of September 30, 2024, there were 3,345,215 Private Warrants outstanding, allowing the purchase of an aggregate of 167,260 shares of common stock[67]. - The Company executed a Second Conversion Notice on May 7, 2024, adjusting the conversion price of the 2022 Notes to $2.8405, which is 5% less than the last reported sale price[53].