Upexi(US:UPXI)2023-10-03 10:03Financial Performance - For the fiscal year ended June 30, 2023, revenue increased by $57,611,165 or 250% to $80,676,509 compared to $23,065,344 in the previous year[175]. - The net loss attributable to Upexi, Inc. was $16,930,289, compared to a net loss of $2,100,850 in the prior year[181]. - Upexi, Inc. reported total revenue of $80,676,509 for the year ended June 30, 2023, a significant increase from $23,065,344 in the previous year, representing a growth of approximately 250%[231]. - The company’s accumulated deficit increased to $(23,201,175) as of June 30, 2023, compared to $(6,270,886) in 2022, indicating a worsening financial position[230]. - Basic loss per share from continuing operations was $(0.86) for the year ended June 30, 2023, compared to $(0.36) in the previous year[232]. - The Company reported a GAAP net loss of $(16,930,289) for the year ended June 30, 2023, compared to a loss of $(2,100,850) in 2022[216]. - Non-GAAP adjusted EBITDA for the year ended June 30, 2023, was $1,266,226, compared to $(1,603,248) in 2022[217]. Revenue and Expenses - Cost of revenue rose by $38,922,455 or 475%, totaling $47,118,189, with 80% of the increase attributed to 2023 acquisitions[176]. - Gross profit increased by $18,688,710, but the gross profit margin declined to 42% from 64% in the prior year[176]. - Sales and marketing expenses increased by $5,259,135 or 103%, reaching $10,376,003, primarily due to acquisitions and increased brand awareness expenditures[177]. - Distribution costs surged by $10,155,581 or 459%, totaling $12,369,903, influenced by rising transportation costs and third-party provider rates[178]. - General and administrative expenses rose by $404,521 or 4%, totaling $9,546,188, with management focusing on reducing these costs[179]. - Advertising expenses increased to $7,978,607 for the year ended June 30, 2023, up from $3,225,256 in the previous year[269]. Assets and Liabilities - As of June 30, 2023, current assets were $25,455,714 and current liabilities were $19,606,010, resulting in working capital of $5,849,291[186]. - Total current assets increased to $25,455,714 as of June 30, 2023, up from $17,061,622 in 2022, reflecting a growth of about 49%[228]. - Current liabilities rose to $19,606,010 in 2023, compared to $10,127,748 in 2022, marking an increase of approximately 94%[230]. - The company’s total assets increased to $63,853,067 as of June 30, 2023, up from $48,491,035 in 2022, representing a growth of approximately 32%[230]. - The company has sufficient working capital to fund operations over the next twelve months and meet all debt obligations[197]. Acquisitions and Investments - The company made several acquisitions, including Lucky Tail for $3,528,239 and VitaMedica, Inc. for $500,000, contributing to a total cash used in investing activities of $2,574,858[236]. - The Company acquired VitaMedica for a total consideration of $3,556,589, which included $2,000,000 in cash and $482,000 in common stock[291]. - Goodwill from the VitaMedica acquisition amounted to $960,780, reflecting the Company's enhanced market entry capabilities in health and wellness products[292]. - The acquisition of Interactive Offers, LLC was completed for $4,833,630, with goodwill recognized at $2,889,158 due to the addition of a unique in-house advertising platform[296][297]. - The Company completed the acquisition of Cygnet Online, LLC for a total consideration of $500,000 cash, 90,909 shares of common stock, and a $300,000 cash payment due in 2024[249]. - E-Core acquisition contributed $36,551,957 in revenue for the year ended June 30, 2023, marking a new entry into the children's toy sector[314]. Debt and Financing - The Company received $6,678,506 for Convertible Notes with an original principal amount of $7,500,000, and issued Warrants for 56,250 shares at an exercise price of $4.44 per share[192]. - A loan agreement was entered into with Professional Bank for $3,000,000, to be repaid over ten years, with proceeds used to pay down a loan facility of $2,780,200[193]. - The company has a total of $25,889,239 in notes payable after accounting for original discounts and adjustments[350]. - The company entered into a series of promissory notes totaling $5,750,000 with a 12-month term at an interest rate of 4%, with the option for principals to convert into shares at a price of $4.81[354]. - A promissory note executed on February 22, 2023, had an original principal amount of $2,150,000, bearing interest at 18.11% and requiring monthly payments starting December 22, 2023[351]. Impairments and Valuation - The company reported a significant impairment of goodwill and intangible assets amounting to $3,746,301 in 2023, indicating potential challenges in asset valuation[236]. - The company recorded an impairment of goodwill amounting to $2,889,158 related to Interactive Offers as of June 30, 2023[261]. - The company recognized an impairment of $857,143 on long-lived assets related to Interactive Offers during the year ended June 30, 2023[263]. - The company’s inventory reserve increased from $50,000 in 2022 to $475,000 in 2023, indicating a growing concern over inventory valuation[257]. Operational Highlights - The company aims to drive organic growth through acquisitions of profitable Amazon and eCommerce businesses, focusing on scalable brands in high-growth markets[239]. - The company has established a significant customer database, which has been key to year-over-year gains in sales and profits[239]. - The company utilized in-house SaaS programmatic ad technology to lower customer acquisition costs and enhance cross-selling opportunities[239]. - The company operates through fourteen active subsidiaries, including Upexi Holding, LLC and VitaMedica, Inc., diversifying its business operations across various sectors[240].