Upexi(UPXI) - 2025 Q4 - Annual Report

Revenue and Profitability - Revenue for the fiscal year ended June 30, 2025, was $14,826,336, a decrease of $11,174,316 or 43% compared to $26,000,652 in 2024[267] - Total revenue for the year ended June 30, 2025, was $15,811,345, a decrease of 39.0% from $26,000,652 in 2024[329] - Digital asset revenue was $985,009, generated from the newly implemented treasury strategy focused on Solana tokens[268] - Digital asset revenue for the year was $985,009, with no revenue reported in the previous year[329] - Gross profit decreased by approximately $2,942,000 or 22.9%, with a profit margin increase to approximately 67% of revenue compared to 49% in the prior year[271] - Gross profit for 2025 was $10,868,040, down from $12,824,579 in 2024, reflecting a decline of 15.2%[329] - Operating expenses totaled $23,367,792 in 2025, a decrease of 33.8% from $35,287,018 in 2024[330] - Net loss attributable to Upexi, Inc. was approximately $13,684,000, a decrease from a net loss of approximately $23,658,000 in the prior year[281] - Net loss attributable to Upexi, Inc. for 2025 was $13,684,209, compared to a net loss of $23,658,438 in 2024, representing a 42.3% improvement[330] - The company reported a basic loss per share from continuing operations of $1.73 for 2025, compared to a loss of $24.60 in 2024[330] Expenses and Costs - Product costs decreased by $8,232,768 or 62% due to lower sales and the elimination of the lower margin recommerce business[270] - General and administrative expenses increased by approximately $5,163,645 or 76%, primarily due to higher corporate compensation and professional services fees[274] - Advertising expenses were $1,830,096 in 2025, down from $3,353,361 in 2024, reflecting a reduction of 45.3%[374] - The company reported stock-based compensation expenses of $2,106,862, which may impact future profitability[1] - The company experienced a bad debt reserve for Amazon receivable amounting to $933,950, indicating a significant increase in credit losses[1] - Inventory write-offs totaled $748,874, reflecting challenges in inventory management and potential overstock issues[1] - The company recorded an impairment of goodwill and intangible assets totaling $7,869,425, indicating potential issues with asset valuation[1] Cash Flow and Financing - Cash flows used in operating activities for continuing operations were $(8,423,042), compared to $(4,894,751) in the previous year[283] - The Company raised approximately $110,030,000 from financing activities, including $92,556,000 from the sale of common stock[286] - The Company closed on $350,000 of convertible debt with a term of two years and an interest rate of 3%, convertible into 116,118 shares at $3.00 per share[292] - A private placement offering on April 24, 2025, raised approximately $92,556,000 by selling 35,970,383 shares at $2.28 per share[293] - The Company entered into a credit facility with BitGo for up to $20,000,000, which increased to $50,000,000 post-June 30, 2025, used for purchasing Solana[294] - The cash balance at the end of the period was $2,975,150, a decrease from $661,415 at the beginning of the period[1] Assets and Liabilities - The Company had current assets of $56,778,043 and current liabilities of $32,563,906 as of June 30, 2025, resulting in working capital of $24,214,137[282] - Total assets increased significantly to $123,806,844 in 2025 from $23,511,088 in 2024, marking a growth of 426.5%[327] - Total stockholders' equity attributable to Upexi, Inc. rose to $90,097,498 in 2025 from $6,515,901 in 2024, an increase of 1,283.5%[327] - The total outstanding convertible notes payable, notes payable, and related party note payable was $5,940,910, a decrease of 44.1% from $10,689,532 in 2024[429] - The acquisition payable related to the acquisition of Cygnet was $260,652, down 37% from $413,152 in 2024[425] - As of June 30, 2025, accrued liabilities totaled $356,064, a decrease of 51.7% from $736,407 in 2024[425] Stock and Compliance - The Company has implemented a reverse stock split at a rate of 1-for-20, effective October 3, 2024, with no impact on the par value of common stock[311] - The Company regained compliance with Nasdaq Listing Rule 5550(a)(2) as of October 16, 2024, maintaining a minimum bid price of $1.00 per share[314] - The total potential dilutive weighted average shares outstanding increased to 10,906,827 for the year ended June 30, 2025, compared to 295,133 for the previous year[393] - The Company executed a reverse stock split at a rate of 1-for-20 effective October 3, 2024, reclassifying $19,860 from Common Stock to Additional Paid-in-Capital[390] Digital Assets - The Company has approximately 744,026 Solana Tokens held with a fair value of $105,997,180 as of June 30, 2025[402] - For the year ended June 30, 2025, the Company purchased approximately 737,692 Solana Tokens for $104,910,839 and reported an unrealized loss of $101,332 on digital assets[403] - Revenue from staking for the year ended June 30, 2025 amounted to $985,009[403] - As of June 30, 2025, approximately 95% of the Company's Solana treasury is staked, with 322,575 tokens liquid and 421,451 tokens locked[404] - The Company did not sell any Solana from its Digital Asset Treasury in the years ended June 30, 2025, or 2024, valuing locked tokens at $133.07 each and liquid tokens at $154.74 each[405] Impairments and Write-offs - The Company recognized an impairment of intangible assets totaling $4,274,680 for the year ended June 30, 2024, with $3,300,000 related to Cygnet's vendor list[356][357] - The Company recorded a goodwill impairment of $3,594,745 related to Cygnet as of June 30, 2024, due to the strategic decision to exit the recommerce business[355] - An impairment of long-lived assets included a loss of $336,434 on a building and $569,195 on the sale of assets during the year ended June 30, 2024[356] Inventory Management - Inventory as of June 30, 2025, totaled $1,152,870, a decrease from $1,431,556 in 2024, with write-offs of $748,874 in 2025 compared to $1,812,319 in 2024[406] - The Company had inventory reserves of $593,539 as of June 30, 2025, compared to $605,470 in 2024[406] Lease Obligations - The Company recognized total lease costs of $1,153,871 for the year ended June 30, 2025, down from $1,624,556 in 2024[424] - The undiscounted future minimum lease payments under non-cancellable operating leases as of June 30, 2025, amount to $1,975,647, with a present value of operating lease obligation of $1,145,440[423] - The weighted average remaining lease term for operating leases as of June 30, 2025, is 26 months, with a weighted average incremental borrowing rate of 5.0%[424]