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What changed in UPEXI, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of UPEXI, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+433 added−188 removedSource: 10-K (2025-09-24) vs 10-K (2024-12-16)

Top changes in UPEXI, INC.'s 2025 10-K

433 paragraphs added · 188 removed · 94 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeInfusionz was a similar business in the manufacturing and distribution of products and owned certain product brands that we believe could be expanded through the merger. June 2021 - Upexi Inc. became a listed company on the NASDAQ stock exchange. August 2021 - The Company purchased the assets of VitaMedica Corporation, a California corporation (VitaMedica).
Biggest changeJune 2021 – Upexi, Inc. became a listed Company on the NASDAQ stock exchange. August 2021 - The Company purchased the assets of VitaMedica Corporation, a California corporation (VitaMedica). VitaMedica is a leading online seller of supplements for surgery, recovery, skin, beauty, health and wellness. October 2021 - The Company purchased Interactive Offers, LLC, a Delaware limited liability company.
As an emerging growth company, we are also exempt from Section 14A and B of the Securities Exchange Act of 1934, which require the shareholder approval of executive compensation and golden parachutes. These exemptions are also available to us as a smaller reporting company that qualifies as a non-accelerated filer.
As an emerging growth company, we are also exempt from Section 14A and B of the Securities Exchange Act of 1934, which require shareholder approval of executive compensation and golden parachutes. These exemptions are also available to us as a smaller reporting company that qualifies as a non-accelerated filer.
Our executive team comes from a background in logistics, with CEO, Allan Marshall, the founder of XPO Logistics (formerly known as Segmentz, Inc.). With increased shipping costs affecting online retailers, our strength is understanding this and finding ways to lower our costs and overhead, thus increasing profit margins on all of our products.
Our executive team comes from a background in logistics, with CEO, Allan Marshall, the founder of XPO Logistics (formerly known as Segmentz, Inc.). With increased shipping costs affecting online retailers, our strength is understanding this and finding ways to lower our costs and overhead, thus increasing profit margins on all our products.
In addition, we are able to adjust to market demands and change production schedules to ensure we maintain optimized inventory levels. Our primary sales channel is our ecommerce site and our marketing team is led by an expert in the online direct to consumer sales as she has been with the brand since its inception.
In addition, we can adjust to market demands and change production schedules to ensure we maintain optimized inventory levels. Our primary sales channel is our eCommerce site and our marketing team is led by an expert in online direct to consumer sales as she has been with the brand since its inception.
As we continue to develop our business, these markets may change, be re-prioritized or eliminated as management responds to consumer and regulatory developments. 8 Table of Contents Our Competitive Strengths We attribute our success to our consumer products by controlling each phase of the process from manufacturing to order fulfillment.
As we continue to develop our business, these markets may change, be re-prioritized or eliminated as management responds to consumer and regulatory developments. Our Competitive Strengths We attribute our success to our consumer products by controlling each phase of the process from manufacturing to order fulfillment.
Our manufacturing facility has been moved to Florida and is at full capacity as of August of 2024. 6 Table of Contents At Upexi Distribution, we manage the warehousing and logistic needs of the Company and provide storage, consolidation, assembly, Amazon preparation, distribution and fulfilment services to our brands and our manufacturing operation.
Our manufacturing facility has been moved to Florida and is at full capacity as of August of 2024. Upexi Distribution At Upexi Distribution, we manage the warehousing and logistic needs of the Company and provide storage, consolidation, assembly, Amazon preparation, distribution and fulfilment services to our brands and our manufacturing operation.
We not only get a great brand, but look to retain the personnel, often the heartbeat of said brand, give them resources, and even utilize them for other brands that we have launched internally or acquired. We strongly believe that continued success relies on a growing team of experts across various industries.
We not only get a great brand, but look to retain the personnel, often the heartbeat of said brand, give them resources, and even utilize them for other brands that we have launched internally or acquired. We strongly believe that continued success relies on a growing team of experts across various industries. Competition There is heavy competition in our products.
As the manufacturer of our primary products, we are able to control our costs and improve profitability at each step of the process, starting with the development of new products. Our products take priority in manufacturing give us a higher inventory turnover rate and accelerates the timeline for new product launches.
As the manufacturer of our primary products, we can control our costs and improve profitability at each step of the process, starting with the development of new products. Our products take priority in terms of manufacturing, give us a higher inventory turnover rate, and accelerate the timeline for new product launches.
April 2022 – The Company purchased 55% of Cygnet Online, LLC, a Delaware limited liability company (“Cygnet”). Cygnet operates a warehouse and distribution center for the management of day-to-day operations for product liquidation through Amazon and other on-line resellers. August 2022 – The Company purchased the assets to the brand LuckyTail.
Cygnet operates a warehouse and distribution center for the management of day-to-day operations for product liquidation through Amazon and other on-line resellers. August 2022 – The Company purchased the assets to the brand LuckyTail.
Item 1. Business General Overview As used in this annual report and unless otherwise indicated, the terms “we”, “us”, “our”, “Upexi”, and the “Company” mean Upexi, Inc., a Nevada corporation formed in 2018.
Item 1. Business General Overview As used in this Annual Report and unless otherwise indicated, the terms “we”, “us”, “our”, “Upexi”, and the “Company” mean Upexi, Inc., a Delaware corporation, originally formed as a Nevada corporation in September of 2018. The Company has seven active subsidiaries that are part of the Company.
We connect pet owners with the products they need to simplify and improve at-home wellness and grooming care for their beloved pets, empowering pet parents to provide their cherished furry companions with the pampering they deserve in the comfort of their own space. 5 Table of Contents LuckyTail products consist of its flagship nail grinder and healthy all-natural pet supplements At PRAX, we fuel modern go-getters to achieve their best selves through innovative energy solutions.
We connect pet owners with the products they need to simplify and improve at-home wellness and grooming care for their beloved pets, empowering pet parents to provide their cherished furry companions with the pampering they deserve in the comfort of their own space. LuckyTail products consist of its flagship nail grinder and other pet related products.
Our history The Company operates manufacturing and/or distribution centers in Nevada supporting health and wellness products, including those products manufactured with hemp ingredients and our overall distribution operations. July 2020 - the Company purchased Infusionz LLC.
Our History The Company operates manufacturing and/or distribution centers supporting health and wellness products, including those products manufactured with hemp ingredients and our overall distribution operations. July 2020 - the Company purchased Infusionz LLC. Infusionz was a similar business in the manufacturing and distribution of products and owned certain product brands that we believe could be expanded through the merger.
While Amazon remains the largest eCommerce channel, others are carving out a big chunk of the market, including Walmart, eBay, and Etsy. More opportunities are popping up for sellers as well. Being able to navigate multiple marketplaces is a key to our success and helps reach different demographics and consumers with specific buying behaviors.
While Amazon remains the largest eCommerce channel, others are carving out a big chunk of the market, including Walmart, eBay, and Etsy. More opportunities are popping up for sellers as well.
Powered by paraxanthine—an advanced alternative to caffeine, our mission is to support your hustle and power your ambitions. Energize better, perform smarter, fuel different. We are launching this new brand in October of 2024 with several innovative products to follow. At Cure Mushrooms, we have harnessed the extraordinary benefits of nature’s most powerful superfood: functional mushrooms.
PRAX At PRAX, we fuel modern go-getters to achieve their best selves through innovative energy solutions. Powered by paraxanthine—an advanced alternative to caffeine, our mission is to support your hustle and power your ambitions. Energize better, perform smarter, fuel differently. Cure Mushrooms At Cure Mushrooms, we have harnessed the extraordinary benefits of nature’s most powerful superfood: functional mushrooms.
We shall continue to be deemed an emerging growth company until the earliest of: 1.
Emerging Growth Company Status We are an emerging growth company under the Jumpstart our Business Startups (JOBS) Act of 2012. We shall continue to be deemed an emerging growth company until the earliest of: 1.
The Company started manufacturing again for brands owned by the Company to ensure there was no interruption to the supply chain of the products. August 2023 – The Company purchased the remaining ownership of Cygnet. August 2023 – The Company sold one hundred percent (100%) of the issued and outstanding equity of its wholly owned subsidiary Interactive Offers, LLC.
The Company started manufacturing again for brands owned by the Company to ensure there was no interruption to the supply chain of the products. 12 Table of Contents August 2023 – The Company purchased the remaining ownership of Cygnet.
VitaMedica is a leading online seller of supplements for surgery, recovery, skin, beauty, health and wellness. October 2021 - The Company purchased Interactive Offers, LLC, a Delaware limited liability company. Interactive provides programmatic advertising with its SAAS platform which allows for programmatic advertisement placement automatically on any partners’ sites from a simple dashboard.
Interactive provides programmatic advertising with its SaaS (Software as a Service) platform which allows for programmatic advertisement placement automatically on any partners’ sites from a simple dashboard. April 2022 – The Company purchased 55% of Cygnet Online, LLC, a Delaware limited liability company (“Cygnet”).
Competition There is heavy competition in our products and we are able to carve out certain niche markets within the industry and there are few competitors that control their manufacturing to distribution as we do.
We are able to carve out certain niche markets within the industry as there are few competitors that control their manufacturing to distribution as we do. Our goal is to compete through our product delivery and introduction of new products that we manufacture and deliver directly to the consumer giving us an advantage on our competitors.
Our target customers are first and foremost end consumers via internet sales; however, we see growth opportunities in direct-to-consumer retail stores, cooperatives, affiliate sales and master distributors.
Being able to navigate multiple marketplaces is a key to our success and helps reach different demographics and consumers with specific buying behaviors. 15 Table of Contents Our target customers are first and foremost end consumers via internet sales; however, we see growth opportunities in direct-to-consumer retail stores, cooperatives, affiliate sales and master distributors.
May 2024 – The Company sold its equity interest in the wholly owned subsidiary VitaMedica, a Nevada corporation.
August 2023 – The Company sold one hundred percent (100%) of the issued and outstanding equity of its wholly owned subsidiary Interactive Offers, LLC. May 2024 – The Company sold its equity interest in the wholly owned subsidiary VitaMedica, a Nevada corporation.
Our suite of premium mushroom extracts are meticulously crafted to elevate overall well-being, offering a wide spectrum of health benefits and a holistic approach to everyday wellness. From fortifying your immune system, to sharpening cognition, to combating the rigors of daily stress, our products are designed to deliver full-body wellness and convenience with every serving.
Our suite of premium mushroom extracts are meticulously crafted to elevate overall well-being, offering a wide spectrum of health benefits and a holistic approach to everyday wellness.
At Moonwlkr, we craft cannabinoid experiences that take you beyond the ordinary. By combining award-winning natural flavors and one-of-a-kind blends, we invite you to feel the thrill of the unknown, the calm of weightless relaxation, or the anticipation of a new adventure.
By combining award-winning natural flavors and one-of-a-kind blends, we invite you to feel the thrill of the unknown, the calm of weightless relaxation, or the anticipation of a new adventure. Gumi Labs At Gumi Labs we manufacture gummies and other products supporting our health and wellness products, including those products manufactured with hemp ingredients.
June 2024 – The Company sold its equity interest in the wholly owned subsidiary E-Core Technology, Inc. d/b/a New England Technology, Inc. a Florida corporation. 7 Table of Contents Regulations In the United States, hemp products that are manufactured by Upexi are regulated by the U.S.
June 2024 – The Company sold its equity interest in the wholly owned subsidiary E-Core Technology, Inc. d/b/a New England Technology, Inc. a Florida corporation. January 2025 – The Company announced intention of investments into cryptocurrency.
DESCRIPTION OF BUSINESS Our Company Upexi is a brand owner specializing in the development, manufacturing, and distribution of consumer products. We reach consumers through our direct-to-consumer network, wholesale partnerships, and major third-party platforms like Amazon. The Brands LuckyTail, where at-home care meets innovation.
The Brands As a brand owner specializing in the development, manufacturing, and distribution of consumer products, we have developed or purchased certain brands that we continue to develop. LuckyTail LuckyTail, where at-home care meets innovation.
Changes in the state laws and regulations could again either positively or adversely affect our ability to sell products in those states. Employees The Company has 64 full-time employees working out of its headquarters in Tampa, Florida, its Odessa, Florida, manufacturing facility, its distribution warehouse in Tampa Florida or individuals’ home-based offices.
We will focus on profitability, and grow efficiently, without the requirement of additional capital. 16 Table of Contents Employees The Company has 59 full-time employees as of June 30, 2025 working out of its headquarters in Tampa, Florida, its Odessa, Florida, manufacturing facility, its distribution warehouse in Tampa Florida or individuals’ home-based offices.
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The Company has eleven active subsidiaries, which include: ☐ HAVZ, LLC, d/b/a/ Steam Wholesale, a California limited liability company ☐ Gummy Labs, LLC, a Delaware limited liability company ☐ MW Products, Inc., a Nevada corporation ☐ Upexi Holding, LLC, a Delaware limited liability company o Upexi Pet Products, LLC, a Delaware limited liability company ☐ Upexi Enterprise, LLC, a Delaware limited liability company o Upexi Distribution LLC, a Delaware limited liability company o Upexi Distribution Management LLC, a Delaware limited liability company o Upexi Property & Assets, LLC, a Delaware limited liability company ■ Upexi 17129 Florida, LLC, a Delaware limited liability company ☐ Cygnet Online, LLC (“Cygnet”), a Delaware limited liability company (100% owned as of September 1, 2023) The following subsidiaries had no activity during the years ended June 30, 2024 and 2023: ☐ Upexi CP, LLC, a Delaware limited liability company ☐ Upexi CP / Canada Inc., a Canadian corporation ☐ Prax Products, LLC, a Florida limited liability company ☐ Upexi Development and Marketing, LLC., a Delaware limited liability company ☐ Trunano Labs, Inc., a Nevada corporation The following subsidiaries were divested during the years ended June 30, 2024 and 2023: ☐ VitaMedica, Inc. a Nevada corporation ☐ E-Core Technology, Inc. a Florida corporation ☐ Infusionz LLC, a Colorado limited liability company ☐ Interactive Offers, LLC, a Delaware limited liability company In addition, the Company has six wholly owned subsidiaries that had no activity during the years ended June 30, 2024 and 2023.
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DESCRIPTION OF BUSINESS Our Company We are in the cryptocurrency industry and the management of cash assets through a cryptocurrency portfolio, primarily focused in Solana tokens and staking of those tokens. We continue to be a brand owner specializing in the development, manufacturing, and distribution of consumer products.
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All of the entities were dissolved or canceled as of June 30, 2024. · Steam Distribution, LLC, a California limited liability company · One Hit Wonder, Inc., a California corporation · One Hit Wonder Holdings, LLC, a California limited liability company · Vape Estate, Inc., a Nevada Corporation · SWCH, LLC, a Delaware limited liability company · Cresco Management, LLC, a California limited liability company 4 Table of Contents Emerging Growth Company Status We are an emerging growth company under the Jumpstart our Business Startups (JOBS) Act of 2012.
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Our Solana Treasury Strategy Early in 2025, we updated and modified our cash management and treasury strategy to include holding digital currency assets directly on our balance sheet. This was a shift from before when we held excess cash primarily in FDIC-insured interest-bearing accounts.
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At Gumi Labs we manufacture gummies and other products supporting our health and wellness products, including those products manufactured with hemp ingredients.
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The change to adopt this strategy results from our intention to obtain the highest yield on excess cash. Under our new approach, our treasury policy focuses primarily on Solana (“SOL”).
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Our goal is to compete through our product delivery and introduction of new products that we manufacture and deliver directly to the consumer giving us an advantage on our competitors. We will focus on profitability, and grow efficiently, without the requirement of additional capital.
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The approach involves applying a public-market treasury model to an asset that is considered earlier in its lifecycle than, with respect to both development and usage, as well as institutional adoption, Bitcoin.
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Government Regulation We are subject to laws and regulations affecting our operations in a number of areas.
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Management will focus its resources to this digital asset strategy and a significant portion of the balance sheet will be allocated to holding Solana in the Company’s digital asset treasury. Currently our treasury is exclusively dedicated to the SOL digital asset and currently we do not intend to dedicate any of the treasury allocated capital to other digital assets.
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These laws and regulations affect the Company’s activities in areas, including, but not limited to, the hemp business in the United States, the consumer products and nutritional supplement markets in the United States, consumer protection, labor, intellectual property ownership and infringement, import and export requirements, federal and state healthcare, environmental and safety.
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We will stake the vast majority of the Solana in our treasury to earn a staking yield and turn the treasury into a productive asset. Currently we are staking approximately 95% of our SOL treasury, and intend to maintain a similar or higher percentage going forward.
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The successful execution of our business objectives will be contingent upon our compliance with all applicable laws and regulations and obtaining all necessary regulatory approvals, permits and registrations, which may be onerous and expensive.
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We do not hedge our SOL and do not have plans to hedge our SOL in the future.
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Any such costs, which may rise in the future as a result of changes in such applicable laws and regulations and the expansion of the Company’s business, could make our products less attractive to our customers, delay the introduction of new products, and require the Company to implement policies and procedures designed to ensure compliance with applicable laws and regulations. 9 Table of Contents We operate our business in markets that are both highly regulated and rapidly evolving.
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Our treasury is intended to bring value to our shareholders in these ways: · We plan to utilize intelligent capital markets issuance – including the issuance of both equity and convertible debt - where we may issue capital in an accretive fashion for the benefit of shareholders to purchase and hold more Solana. · We will stake the majority of the Solana in our treasury to earn a staking yield and turn the treasury into a productive asset. · We will purchase locked Solana at a discount to the current spot price, which will provide higher gains for our shareholders as the discount moves to par over time.
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We are subject to numerous federal and state laws and regulations affecting the manufacturing, packaging, labeling and sale of food, beverages, dietary supplements, and personal care products/cosmetics, as well as the use of hemp and hemp-derived ingredients like CBD in such products.
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Note that we are underpinned by Solana, which we believe is the leading high-performance blockchain and may see its price rise in the future. If this occurs, our Solana treasury will move up in value, also benefiting shareholders.
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The FDA regulates hemp and hemp-derived ingredients in FDA-regulated products pursuant to the provisions of the FDCA and regulations promulgated pursuant to it, in particular those related to adulteration and labeling of cosmetic, food, and dietary supplements.
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Our Staking Program Pursuant to our treasury strategy, we will use our SOL in the treasury to generate a return through various opportunities with the most significant portion being allocated to our Staking Program. We will utilize several validators in the Staking Program to reduce our risk with a single validator and maximize the overall yield from the Staking Program.
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The FDA has issued guidance on the subject and issued letters to companies regarding claims made for products and the use of such ingredients in various products. The FDA also initiated a task force to evaluate pathways for further regulation of hemp and hemp-derived ingredients.
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We will also dedicate a portion of the SOL in our staking program to utilize smaller validators to help improve the overall Solana ecosystem.
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At various times, bills pertaining to the regulation of hemp and hemp-derived ingredients have been introduced in both the U.S. Senate and the U.S. House of Representatives, and additional proposed legislation is expected to be introduced in the future to clarify the regulatory status of cannabinoids from hemp generally and CBD generally.
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These Validators are scrutinized through our due diligence program and are initially only given a small amount of SOL for the Company to be able to verify the expected performance and yield, and to ensure that the validator should be included in our future allocation of SOL to validators.
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Future legislation approved by Congress and signed by the President, or rulemaking promulgated by the FDA, could either positively or adversely impact the future sale of products by the Company. We are currently not subject to any foreign regulations as we do not currently distribute or export any products, including hemp or CBD related products outside the U.S.
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Management evaluates the validators on a routine basis around performance, yield, and economics, and makes monthly adjustments on the overall allocation of the SOL in the treasury based on our evaluation.
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Additionally, we are not aware of any foreign regulations that we had to comply with in regard to the sale of our flavoring products to one end user customer in the U.S. who distributed such products to Europe where it had operations. The responsibility for compliance with any European regulations would be on such customer.
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Currently we have approximately 95% of our SOL treasury staked and target a similar or higher percentage in the future. 4 Table of Contents We maintain possession and control of the SOL when it is staked at all times.
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Additionally, numerous states have passed forms of hemp legislation governing the cultivation of hemp, as well as the further processing and sale of hemp and products with hemp or hemp-derived ingredients. Those states that have not yet enacted laws or issued regulations pertaining to hemp and hemp-derived ingredients may do so in the near future.
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Native staking is generally considered a safe activity, as it is done in-protocol (i.e.. is built into Solana itself), and as, unlike other networks, Solana has not implemented “slashing” penalties for validators that either intentionally misbehave or perform their duties poorly.
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Unless Congress specifically enacts laws preempting the state regulations of hemp products, we will continue to be subject not only to federal law but various state laws. Presently, Upexi only distributes hemp-products in states that it is legal to do so.
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As such, the major risk with staking is that we choose a validator with poor performance who realizes a low staking yield. Additionally, as part of the “activating” and “exiting” processes of SOL staking, any staked SOL will be inaccessible for a period of time determined by a range of factors, resulting in certain liquidity risks that we manage.
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Process of Staking Management has bi-weekly meetings to evaluate treasury operations, including the staking of the Company’s SOL.
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Based on these meetings, management determines the allocation of the SOL treasury to the Staking Program and determines the amount of allocation to each validator, ensuring that no single validator has such a large percentage of our stake that it represents concentration risk.
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If it is determined to reduce the amount of the SOL dedicated to the Staking Program or it is determined to change the allocation of SOL to a validator, we will initiate an unstaking process and notify the validator of the change, which effectively reverses the delegation of the SOL from the applicable validator node.
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Solana has a cooldown period known as the “deactivation period,” which is the time it takes for the unstaked SOL to become fully liquid. During this period, the tokens are not actively earning rewards, but they are also not yet available for transfer or use.
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The length of this period can vary based on network conditions, but is generally expected to be 48 hours or less. Once the cooldown period is complete, the Company will have complete control over the SOL, including the ability to sell the SOL or transfer it as determined by management.
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Liquidity Management The Company’s Staking Program involves the temporary loss of the ability to transfer, assign a new validator or otherwise dispose of the SOL. Under normal conditions, the Company will regain complete control over its unstaked SOL within two days of initiating the unstaking.
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However, there can be no guarantee that such process will result in the Company regaining complete control of its SOL in time to satisfy its current obligations.
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We maintain a certain amount of liquid SOL in the treasury, classified as current digital assets at fair value and a certain amount of cash to ensure that the Company is able to satisfy its current obligations. How We Earn Staking Rewards To earn staking rewards, we delegate our SOL to leading Solana validators via Solana’s in-protocol delegation system.
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This means we deposit our SOL tokens into a staking account, which is then delegated to a validator’s vote account. We utilize native staking only, and stake to top validators who have demonstrated a track record of high performance, high yield generation, and attractive delegator economics.
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We use multiple validators to both maximize the return on our Solana treasury and to mitigate the risk of having only one or two validators for our treasury staking.
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SOL and the Solana Network SOL is a digital asset that is created and transmitted through the operations of the peer-to-peer Solana network (the “Solana blockchain” or “Solana network”), which is a decentralized network of computers operating the implementation of the Solana protocol. While certain entities such as Solana Labs, Inc.
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(“Solana Labs”) and the Solana Foundation have influence over the Solana network’s development and governance (which was particularly true during the network’s early years), no single entity owns or operates the Solana network, the infrastructure of which is collectively maintained by a decentralized user base.
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The Solana network allows the creation and exchange of tokens, including SOL, which are recorded on the Solana network.
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SOL can be used to pay for goods and services, including to send a transaction on the Solana network, or it can be swapped to other tokens or converted to fiat currencies, such as the U.S. dollar, at rates determined on digital asset trading platforms or in individual end-user-to-end-user transactions under a market-based system.
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Furthermore, the Solana network allows users to write and implement general purpose code known as smart contracts or programs that create decentralized applications, and for users to openly interact with said decentralized applications.
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Using programs, users can create decentralized applications covering a variety of categories and subsectors, including borrow/lend protocols, decentralized exchanges, social applications, web3 gaming, tokenized assets, AI agents, decentralized physical infrastructure networks, and many more.
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As such, the Solana network expands blockchain use well beyond just a peer-to-peer money system. 5 Table of Contents The Solana protocol introduced the proof-of-history timestamping mechanism. Proof-of-history is not a consensus mechanism, but a cryptographic clock that enables greater organization without extensive communication, thereby increasing throughput.
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Proof-of-history enables leaders to know when it’s their turn to produce a block, rather than requiring the entire network to first come to an agreement on the prior block before the leader can begin their work. In addition to the proof-of-history mechanism, the Solana network uses a proof-of-stake consensus mechanism to incentivize SOL holders to validate transactions.
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Unlike proof-of-work, in which miners expend computational and energy resources to be the miner to propose a block and receive the block reward, in proof-of-stake, validators pledge or “stake” coins, perform duties such as proposing or validating blocks, and receive staking rewards generally in proportion to the amount of coins staked.
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A validator that performs its duties poorly, whether maliciously or unintentionally, would receive fewer or no rewards. Proof-of-stake is viewed as more energy efficient and scalable than proof-of-work. Proof-of-history combined with a proof-of-stake consensus model are some of the components on Solana that enable high throughput and low-latency transaction processing.
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Overview of the Solana Network In order to own, transfer or use SOL directly on the Solana network on a peer-to-peer basis (as opposed to through an intermediary, such as a custodian or centralized exchange), a person generally must have internet access to connect to the Solana network and set up a wallet, which is the software that safeguards a user’s keypair (public key plus secret key).
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SOL transactions may be made directly between end-users without the need for an intermediary. To transact on the Solana network, a user, typically through an application such as a wallet or smart contract, will board the transaction to the current leader, who will organize the transactions into shards before the network processes and validates such transactions.
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Using cryptography and its proof-of-stake consensus mechanism, the Solana network can come to a shared state of the network in a decentralized fashion and without a centralized leader. Blocks are built on top of prior ones by subsequent leaders, continuing the process.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

37 edited+141 added−5 removed98 unchanged
Biggest changeAs a result of the Farm Bill’s recent passage, we expect that there will be a constant evolution of laws and regulations affecting the CBD industry which could affect the Company’s plan of operations. Local, state and federal hemp laws and regulations may be broad in scope and subject to changing interpretations.
Biggest changeThe FDA created a task force to address the further regulation of CBD and other cannabis-derived products and is currently evaluating the applicable science and pathways for regulating CBD and other cannabis-derived ingredients. 25 Table of Contents As a result of the Farm Bill’s recent passage, we expect that there will be a constant evolution of laws and regulations affecting the CBD industry which could affect the Company’s plan of operations.
Any actions or investigations initiated against the Company by governmental authorities or private litigants could have a material adverse effect on our business, financial condition and results of operations. Any actions or investigations initiated against the Company by governmental authorities or private litigants could have a material adverse effect on our business, financial condition and results of operations.
Any actions or investigations initiated against the Company by governmental authorities or private litigants could have a material adverse effect on our business, financial condition and results of operations.
We cannot predict or estimate the amount of additional costs we may incur or the timing of such costs. Risks Relating to Our Business and Industry We operate in a highly competitive environment, and if we are unable to compete with our competitors, our business, financial condition, results of operations, cash flows and prospects could be materially adversely affected.
We cannot predict or estimate the amount of additional costs we may incur or the timing of such costs. 21 Table of Contents Risks Relating to Our Business and Industry We operate in a highly competitive environment, and if we are unable to compete with our competitors, our business, financial condition, results of operations, cash flows and prospects could be materially adversely affected.
Accordingly, there can be no assurance that the disruption of the Company’s supply sources will not have a material adverse effect on the Company. Loss of key contracts with our suppliers, renegotiation of such agreements on less favorable terms or other actions these third parties may take could harm our business.
Accordingly, there can be no assurance that the disruption of the Company’s supply sources will not have a material adverse effect on the Company. 23 Table of Contents Loss of key contracts with our suppliers, renegotiation of such agreements on less favorable terms or other actions these third parties may take could harm our business.
Implementing our business plan may require more employees, capital equipment, supplies or other expenditure items than management has predicted. Likewise, the cost of compensating employees and consultants or other operating costs may be higher than management’s estimates, which could lead to sustained losses. 11 Table of Contents We expect our quarterly financial results to fluctuate.
Implementing our business plan may require more employees, capital equipment, supplies or other expenditure items than management has predicted. Likewise, the cost of compensating employees and consultants or other operating costs may be higher than management’s estimates, which could lead to sustained losses. We expect our quarterly financial results to fluctuate.
Increased competition may also drive the prices of our products down, which may have a material adverse effect on our results of operations in future periods. Given the rapid changes affecting the global, national and regional economies generally, the Company may experience difficulties in establishing and maintaining a competitive advantage in the marketplace.
Increased competition may also drive the prices of our products down, which may have a material adverse effect on our results of operations in future periods. 27 Table of Contents Given the rapid changes affecting the global, national and regional economies generally, the Company may experience difficulties in establishing and maintaining a competitive advantage in the marketplace.
Failure to comply, or any adverse results from such an evaluation could result in a loss of investor confidence in our financial reports and have an adverse effect on the trading price of our equity securities. 12 Table of Contents Increases in costs, disruption of supply or shortage of raw materials could harm our business.
Failure to comply, or any adverse results from such an evaluation could result in a loss of investor confidence in our financial reports and have an adverse effect on the trading price of our equity securities. Increases in costs, disruption of supply or shortage of raw materials could harm our business.
We cannot assure you that the Company will successfully address any of these risks. There can be no assurance that our efforts will be successful or that we will ultimately be able to attain profitability. If we are unable to protect our intellectual property rights, our competitive position could be harmed.
We cannot assure you that the Company will successfully address any of these risks. There can be no assurance that our efforts will be successful or that we will ultimately be able to attain profitability. 18 Table of Contents If we are unable to protect our intellectual property rights, our competitive position could be harmed.
Unfavorable research or publicity could have a material adverse effect on our ability to generate sales. 14 Table of Contents Our failure to appropriately and timely respond to changing consumer preferences and demand for new products could significantly harm our customer relationships and have a material adverse effect on our business, financial condition and results of operations.
Unfavorable research or publicity could have a material adverse effect on our ability to generate sales. Our failure to appropriately and timely respond to changing consumer preferences and demand for new products could significantly harm our customer relationships and have a material adverse effect on our business, financial condition and results of operations.
The successful assertion or settlement of any uninsured claim, a significant number of insured claims, or a claim exceeding the Company’s insurance coverage could have a material adverse effect on the Company. 16 Table of Contents We may be unable to attract and retain independent distributors for our products.
The successful assertion or settlement of any uninsured claim, a significant number of insured claims, or a claim exceeding the Company’s insurance coverage could have a material adverse effect on the Company. We may be unable to attract and retain independent distributors for our products.
Failure to successfully integrate acquired businesses and their products and other assets into our Company, or if integrated, failure to further our business strategy, may result in our inability to realize any benefit from such acquisition. We expect to grow by acquiring relevant businesses, including other cannabis-related businesses.
Failure to successfully integrate acquired businesses and their products and other assets into our Company, or if integrated, failure to further our business strategy, may result in our inability to realize any benefit from such acquisition. We expect to grow by acquiring relevant businesses.
Future operating results will depend upon many factors, including our success in attracting and retaining motivated and qualified personnel, our ability to establish short term credit lines or obtain financing from other sources, such as this Offering, our ability to develop and market new products, our ability to control costs, and general economic conditions.
Future operating results will depend upon many factors, including our success in attracting and retaining motivated and qualified personnel, our ability to establish short term credit lines or obtain financing from other sources, our ability to develop and market new products, our ability to control costs, and general economic conditions.
In addition, as an emerging growth company, we are only required to provide two years of audited consolidated financial statements and two years of selected financial data in this annual report.
In addition, as an emerging growth company, we are only required to provide two years of audited consolidated financial statements in this annual report.
We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our Common Stock held by non-affiliates exceeds $700.0 million as of any December 31 before that time or if we have total annual gross revenue of $1.0 billion or more during any fiscal year before that time, after which, in each case, we would no longer be an emerging growth company as of the following December 31 or, if we issue more than $1.0 billion in non-convertible debt during any three-year period before that time, we would cease to be an emerging growth company immediately. 13 Table of Contents Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K.
We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our Common Stock held by non-affiliates exceeds $700.0 million as of any December 31 before that time or if we have total annual gross revenue of $1.0 billion or more during any fiscal year before that time, after which, in each case, we would no longer be an emerging growth company as of the following December 31 or, if we issue more than $1.0 billion in non-convertible debt during any three-year period before that time, we would cease to be an emerging growth company immediately.
Accordingly, we have a limited operating history upon which to base an evaluation of our business and prospects. Operating results for future periods are subject to numerous uncertainties, and we cannot assure you that the Company will achieve or sustain profitability in the future.
The Company was incorporated on September 5, 2018, and only commenced operations thereafter. Accordingly, we have a limited operating history upon which to base an evaluation of our business and prospects. Operating results for future periods are subject to numerous uncertainties, and we cannot assure you that the Company will achieve or sustain profitability in the future.
“Marijuana” is a Schedule I controlled substance and is defined in the Federal Controlled Substances Act at 21 USC Section 802(16) as “all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin.” Exemptions to that definition provided in 21 USC Section 802(16) include “the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination” or hemp as defined in 7 USC 1639o. 17 Table of Contents Substances meeting the definition of “hemp” in the Farm Bill and 7 USC 1639o may be used in clinical studies and research through an Investigational New Drug (“IND”) application with the Food and Drug Administration (the “FDA”).
“Marijuana” is a Schedule I controlled substance and is defined in the Federal Controlled Substances Act at 21 USC Section 802(16) as “all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin.” Exemptions to that definition provided in 21 USC Section 802(16) include “the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination” or hemp as defined in 7 USC 1639o.
Approximately 40 states have authorized industrial hemp programs pursuant to the Farm Bill. Additionally, various states have enacted state-specific laws pertaining to the handling, manufacturing, labeling, and sale of CBD and other hemp products. Compliance with state-specific laws and regulations could impact our operations in those specific states.
Changes to state laws pertaining to industrial hemp could slow the use of industrial hemp, which could impact our revenues in future periods. Approximately 40 states have authorized industrial hemp programs pursuant to the Farm Bill. Additionally, various states have enacted state-specific laws pertaining to the handling, manufacturing, labeling, and sale of CBD and other hemp products.
Cybersecurity breaches of our IT systems could degrade our ability to conduct our business operations and deliver products and services to our customers, delay our ability to recognize revenue, compromise the integrity of our software products, result in significant data losses and the theft of our intellectual property, damage our reputation, expose us to liability to third parties and require us to incur significant additional costs to maintain the security of our networks and data.
We may need to hire additional financial reporting, internal controls and other finance personnel in order to develop and implement appropriate internal controls and reporting procedures. 19 Table of Contents Cybersecurity breaches of our IT systems could degrade our ability to conduct our business operations and deliver products and services to our customers, delay our ability to recognize revenue, compromise the integrity of our software products, result in significant data losses and the theft of our intellectual property, damage our reputation, expose us to liability to third parties and require us to incur significant additional costs to maintain the security of our networks and data.
Any material delay in obtaining, or inability to obtain, such licenses, permits and approvals is likely to delay and/or inhibit our ability to carry out our plan of operations and could have a material adverse effect on our business, financial condition and results of operations. 19 Table of Contents Potential future international expansion of our business could expose us to additional regulatory risks and compliance costs.
Any material delay in obtaining, or inability to obtain, such licenses, permits and approvals is likely to delay and/or inhibit our ability to carry out our plan of operations and could have a material adverse effect on our business, financial condition and results of operations.
If we do not introduce new products or make enhancements to meet the changing needs of our customers in a timely manner, some of our products could be rendered obsolete, which could have a material adverse effect on our financial condition and results of operations.
If we do not introduce new products or make enhancements to meet the changing needs of our customers in a timely manner, some of our products could be rendered obsolete, which could have a material adverse effect on our financial condition and results of operations. 22 Table of Contents Future acquisitions or strategic investments and partnerships could be difficult to identify and integrate with our business, disrupt our business, and adversely affect our financial condition and results of operations.
In the event of a delisting, we would likely take actions to restore our compliance with NASDAQ’s listing requirements, but we can provide no assurance that any such action taken by us would allow our Common Stock to become listed again, stabilize the market price or improve the liquidity of our securities, prevent our Common Stock from dropping below the NASDAQ minimum bid price requirement or prevent future non-compliance with NASDAQ’s listing requirements.
In the event of a delisting, we would likely take actions to restore our compliance with NASDAQ’s listing requirements, but we can provide no assurance that any such action taken by us would allow our Common Stock to become listed again, stabilize the market price or improve the liquidity of our securities, prevent our Common Stock from dropping below the NASDAQ minimum bid price requirement or prevent future non-compliance with NASDAQ’s listing requirements. 20 Table of Contents We will incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could adversely affect our operating results.
While progress within the industrial hemp industry is currently encouraging, growth is not assured, and while there appears to be ample public support for favorable legislative action, numerous factors may impact or negatively affect the legislative process(es) within the various states where we have business interests. 18 Table of Contents Unfavorable interpretations of laws governing hemp processing activities could subject us to enforcement or other legal proceedings and limit our business and prospects.
While progress within the industrial hemp industry is currently encouraging, growth is not assured, and while there appears to be ample public support for favorable legislative action, numerous factors may impact or negatively affect the legislative process(es) within the various states where we have business interests.
If we fail to successfully fill many management roles, fail to fully integrate new members of our management team, lose the services of key personnel, or fail to attract additional qualified personnel, it will be significantly more difficult for us to achieve our growth strategies and success. 15 Table of Contents We have limited supply sources, and price increases or supply shortages of key raw materials could materially and adversely affect our business, financial condition and results of operations.
If we fail to successfully fill many management roles, fail to fully integrate new members of our management team, lose the services of key personnel, or fail to attract additional qualified personnel, it will be significantly more difficult for us to achieve our growth strategies and success.
The supply of our industrial hemp is subject to the same risks normally associated with agricultural production, such as climactic conditions, insect infestations and availability of manual labor or equipment for harvesting.
The Company believes that its continued success will depend upon the availability of raw materials that permit the Company to meet its labeling claims and quality control standards. The supply of our industrial hemp is subject to the same risks normally associated with agricultural production, such as climactic conditions, insect infestations and availability of manual labor or equipment for harvesting.
In addition, there is the possibility that some jurisdictions may seek to hold us responsible for false product or earnings-related claims due to the actions of our independent distributors. Liability for any of these issues could have a material adverse effect on our business, financial condition and results of operations.
In addition, there is the possibility that some jurisdictions may seek to hold us responsible for false product or earnings-related claims due to the actions of our independent distributors.
In addition, if an acquired business or product line fails to meet our expectations, our business, financial condition, and results of operations may be adversely affected.
Future acquisitions could also result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect our financial position and results of operations. In addition, if an acquired business or product line fails to meet our expectations, our business, financial condition, and results of operations may be adversely affected.
We cannot ensure that all marketing materials used by our independent distributors comply with applicable regulations, including bans on false or misleading product and earnings-related claims.
The advertisement of our products is subject to extensive regulations in the markets in which we do business. Our independent distributors may fail to comply with such regulations governing the advertising of our products. We cannot ensure that all marketing materials used by our independent distributors comply with applicable regulations, including bans on false or misleading product and earnings-related claims.
Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited consolidated financial statements.
Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited consolidated financial statements.
The shifting regulatory environment necessitates building and maintaining robust systems to achieve and maintain compliance in multiple jurisdictions and increases the possibility that we may violate one or more of the legal requirements applicable to our business and products.
Any actions or investigations initiated against the Company by governmental authorities or private litigants could have a material adverse effect on our business, financial condition and results of operations. 26 Table of Contents The shifting regulatory environment necessitates building and maintaining robust systems to achieve and maintain compliance in multiple jurisdictions and increases the possibility that we may violate one or more of the legal requirements applicable to our business and products.
We cannot predict the nature of any future laws, regulations, interpretations or applications, and it is possible that regulations may be enacted in the future that will be directly applicable to our business. Changes to state laws pertaining to industrial hemp could slow the use of industrial hemp, which could impact our revenues in future periods.
Furthermore, violations of these laws, or alleged violations, could disrupt our business and result in a material adverse effect on our operations. We cannot predict the nature of any future laws, regulations, interpretations or applications, and it is possible that regulations may be enacted in the future that will be directly applicable to our business.
Continued development of the industrial hemp industry will be dependent upon new legislative authorization of industrial hemp at the state level, and further amendment or supplementation of legislation at the federal level. Any number of events or occurrences could slow or halt progress all together in this space.
Compliance with state-specific laws and regulations could impact our operations in those specific states. Continued development of the industrial hemp industry will be dependent upon new legislative authorization of industrial hemp at the state level, and further amendment or supplementation of legislation at the federal level.
There are no similar exclusions for the use of CBD in non-drug topical products, as long as such products otherwise comply with applicable laws. The FDA created a task force to address the further regulation of CBD and other cannabis-derived products and is currently evaluating the applicable science and pathways for regulating CBD and other cannabis-derived ingredients.
There are no similar exclusions for the use of CBD in non-drug topical products, as long as such products otherwise comply with applicable laws.
Our products are composed of certain key raw materials. If the prices of such raw materials increase significantly, it could result in a significant increase in our product development costs. If raw material prices increase in the future, we may not be able to pass on such price increases to our customers.
If raw material prices increase in the future, we may not be able to pass on such price increases to our customers. A significant increase in the price of raw materials that cannot be passed on to customers could have a material adverse effect on our business, financial condition and results of operations.
Any failure to anticipate or respond adequately to such changes could have a material adverse effect on the Company’s business, financial condition and results of operations. Item 1B. Unresolved Staff Comments None.
Any failure to anticipate or respond adequately to such changes could have a material adverse effect on the Company’s business, financial condition and results of operations. Furthermore, sales of a substantial number of shares of our common stock in the public markets, or the perception that such sales could occur, could depress the market price of our common stock.
The pursuit of potential acquisitions may divert the attention of management and cause us to incur various expenses in identifying, investigating, and pursuing suitable acquisitions, whether or not the acquisitions are completed. Future acquisitions could also result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect our financial position and results of operations.
We may seek to acquire or invest in businesses and product lines that we believe could complement or expand our product offerings or otherwise offer growth opportunities. The pursuit of potential acquisitions may divert the attention of management and cause us to incur various expenses in identifying, investigating, and pursuing suitable acquisitions, whether or not the acquisitions are completed.
These changes may require us to incur substantial costs associated with legal compliance and may ultimately require us to alter our business plan. Furthermore, violations of these laws, or alleged violations, could disrupt our business and result in a material adverse effect on our operations.
Local, state and federal hemp laws and regulations may be broad in scope and subject to changing interpretations. These changes may require us to incur substantial costs associated with legal compliance and may ultimately require us to alter our business plan.
If our independent distributors’ failure to comply with applicable advertising laws and regulations could adversely affect our financial conditions and results of operations. The advertisement of our products is subject to extensive regulations in the markets in which we do business. Our independent distributors may fail to comply with such regulations governing the advertising of our products.
Liability for any of these issues could have a material adverse effect on our business, financial condition and results of operations. 24 Table of Contents If our independent distributors’ failure to comply with applicable advertising laws and regulations could adversely affect our financial conditions and results of operations.
Removed
See also “Cautionary Statement Regarding Forward-Looking Statements.” 10 Table of Contents Risks Relating to Our Company Our limited operating history makes it difficult for potential investors to evaluate our business prospects and management. The Company was incorporated on September 5, 2018, and only commenced operations thereafter.
Added
See also “Cautionary Statement Regarding Forward-Looking Statements.” 17 Table of Contents Risks Related to Upexi Upexi does not anticipate paying any dividends on its common stock. No dividends have been paid on Upexi’s common stock.
Removed
We may need to hire additional financial reporting, internal controls and other finance personnel in order to develop and implement appropriate internal controls and reporting procedures.
Added
Upexi does not intend to pay cash dividends on its common stock in the foreseeable future, and anticipate that profits, if any, received from operations will be reinvested into its business. Any decision to pay dividends will depend upon its financial condition, operating results, and current and anticipated cash needs. You may experience additional dilution in the future.
Removed
We will incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could adversely affect our operating results.
Added
To raise additional capital, Upexi may in the future offer additional securities, including shares of its Common Stock, at prices that may not be the same as the price per share in this offering.
Removed
Future acquisitions or strategic investments and partnerships could be difficult to identify and integrate with our business, disrupt our business, and adversely affect our financial condition and results of operations. We may seek to acquire or invest in businesses and product lines that we believe could complement or expand our product offerings, or otherwise offer growth opportunities.
Added
Upexi may sell shares or other securities in any other offering at a price per share that is less than the price per share paid by investors in this offering, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders.
Removed
A significant increase in the price of raw materials that cannot be passed on to customers could have a material adverse effect on our business, financial condition and results of operations. The Company believes that its continued success will depend upon the availability of raw materials that permit the Company to meet its labeling claims and quality control standards.
Added
The price per share at which Upexi sells additional shares of common stock, or securities convertible or exchangeable into common stock, in future transactions may be higher or lower than the price per share paid by investors in prior offerings.
Added
Furthermore, sales of a substantial number of shares of Upexi’s common stock in the public markets, or the perception that such sales could occur, could depress the market price of Upexi’s common stock. Shares eligible for future sale may adversely affect the market.
Added
From time to time, certain of Upexi’s stockholders may be eligible to sell all or some of their shares of common stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144, promulgated under the Securities Act, subject to certain limitations.
Added
In general, pursuant to recent amendments to Rule 144, a non-affiliate stockholder who has satisfied a six-month holding period may, under certain circumstances, sell its shares, without limitation.
Added
Any substantial sale of Upexi’s common stock pursuant to Rule 144 or pursuant to any resale (including sales by investors of securities purchased in prior offerings) may have a material adverse effect on the market price of the common stock. Our limited operating history makes it difficult for potential investors to evaluate our business prospects and management.
Added
We have limited supply sources, and price increases or supply shortages of key raw materials could materially and adversely affect our business, financial condition and results of operations. Our products are composed of certain key raw materials. If the prices of such raw materials increase significantly, it could result in a significant increase in our product development costs.
Added
Substances meeting the definition of “hemp” in the Farm Bill and 7 USC 1639o may be used in clinical studies and research through an Investigational New Drug (“IND”) application with the Food and Drug Administration (the “FDA”).
Added
Any number of events or occurrences could slow or halt progress all together in this space.
Added
Unfavorable interpretations of laws governing hemp processing activities could subject us to enforcement or other legal proceedings and limit our business and prospects.
Added
Potential future international expansion of our business could expose us to additional regulatory risks and compliance costs.
Added
Risks Relating to Investing in Solana The launch of central bank digital currencies (“CBDCs”) may adversely impact our business. The introduction of a government-issued digital currency could eliminate or reduce the need or demand for private-sector issued cryptocurrencies, or significantly limit their utility.
Added
National governments around the world could introduce CBDCs, which could in turn limit the size of the market opportunity for cryptocurrencies, including Solana. Absent federal regulations, there is a possibility that Solana may be classified as a “security.” Any classification of Solana as a “security” would subject us to additional regulation and could materially impact the operation of our business.
Added
We believe that Solana is not a security but neither the SEC nor any other U.S. federal or state regulator publicly stated whether they agree with our assessment.
Added
Despite the Trump Administration’s Executive Order titled “Strengthening American Leadership in Digital Financial Technology” which includes as an objective, “protecting and promoting the ability of individual citizens and private sector entities alike to access and … to maintain self-custody of digital assets,” Solana has not yet been classified with respect to U.S. federal securities laws.
Added
Therefore, while (for the reasons discussed below) we have concluded that Solana is not a “security” within the meaning of the U.S. federal securities laws, and registration of the Company under The Investment Company Act of 1940, as amended (the “1940 Act”) is therefore not required under the applicable securities laws, we acknowledge that a regulatory body or federal court may determine otherwise.
Added
Our conclusion, even if reasonable under the circumstances, would not preclude legal or regulatory action based on such a finding that Solana is a “security” which would require us to register as an investment company under the 1940 Act.
Added
We have also adapted our process for analyzing the U.S. federal securities law status of Solana and other cryptocurrencies over time, as guidance and case law have evolved.
Added
As part of our U.S. federal securities law analytical process, we take into account a number of factors, including the various definitions of “security” under U.S. federal securities laws and federal court decisions interpreting the elements of these definitions, such as the U.S.
Added
Supreme Court’s decisions in the Howey and Reves cases, as well as court rulings, reports, orders, press releases, public statements, and speeches by the SEC Commissioners and SEC Staff providing guidance on when a digital asset or a transaction to which a digital asset may relate may be a security for purposes of U.S. federal securities laws.
Added
Our position that Solana is not a “security” is premised, among other reasons, on our conclusion Solana does not meet the elements of the Howey test.
Added
Among the reasons for our conclusion that Solana is not a security is that holders of Solana do not have a reasonable expectation of profits from our efforts in respect of their holding of Solana.
Added
Also, Solana ownership does not convey the right to receive any interest, rewards, or other returns We acknowledge, however, that the SEC, a federal court or another relevant entity could take a different view.
Added
The regulatory treatment of Solana is such that it has drawn significant attention from legislative and regulatory bodies, in particular the SEC which has previously stated it deemed Solana a security. Application of securities laws to the specific facts and circumstances of digital assets is complex and subject to change.
Added
Our conclusion, even if reasonable under the circumstances, would not preclude legal or regulatory action based on a finding that Solana, or any other digital asset we might hold is a “security.” As such, we are at risk of enforcement proceedings against us, which could result in potential injunctions, cease-and-desist orders, fines, and penalties if Solana was determined to be a security by a regulatory body or a court.
Added
Such developments could subject us to fines, penalties, and other damages, and adversely affect our business, results of operations, financial condition, and prospects. 28 Table of Contents If we were deemed to be an investment company under the 1940 Act, applicable restrictions likely would make it impractical for us to continue segments of our business as currently contemplated.
Added
Under Sections 3(a)(1)(A) and (C) of the 1940 Act, a company generally will be deemed to be an “investment company” if (i) it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, or trading in securities or (ii) it engages, or proposes to engage, in the business of investing, reinvesting, owning, holding, or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities, shares of registered money market funds under Rule 2a-7 of the 1940 Act, and cash items) on an unconsolidated basis.
Added
Rule 3a-1 under the 1940 Act generally provides that notwithstanding the Section 3(a)(1)(C) test described in clause (ii) above, an entity will not be deemed to be an “investment company” for purposes of the 1940 Act if no more than 45% of the value of its assets (exclusive of U.S. government securities, shares of registered money market funds under Rule 2a-7 of the 1940 Act, and cash items) consists of, and no more than 45% of its net income after taxes (for the past four fiscal quarters combined) is derived from, securities other than U.S. government securities, shares of registered money market funds under Rule 2a-7 of the 1940 Act, securities issued by employees’ securities companies, securities issued by qualifying majority owned subsidiaries of such entity, and securities issued by qualifying companies that are controlled primarily by such entity.
Added
We do not believe that we are an “investment company” as such term is defined in either Section 3(a)(1)(A) or Section 3(a)(1)(C) of the 1940 Act. Since our formation, we have been a brand owner specializing in the development, manufacturing and distribution of consumer products.
Added
Recently, we have begun focusing on pursuing opportunities to expand our portfolio into coins, digital assets and M&A in the fintech space. With respect to Section 3(a)(1)(A), an amount in excess of 40% of our total assets holds Solana.
Added
Since we believe Solana is not an investment security, we do not hold ourselves out as being engaged primarily, or propose to engage primarily, in the business of investing, reinvesting, or trading in securities within the meaning of Section 3(a)(1)(A) of the 1940 Act.
Added
With respect to Section 3(a)(1)(C), we believe we satisfy the elements of Rule 3a-1 and therefore are deemed not to be an investment company under, and we intend to conduct our operations such that we will not be deemed an investment company under, Section 3(a)(1)(C).
Added
We believe that we are not an investment company pursuant to Rule 3a-1 under the 1940 Act because, on a consolidated basis with respect to wholly-owned subsidiaries but otherwise on an unconsolidated basis, no more than 45% of the value of the Company’s total assets (exclusive of U.S. government securities, shares of registered money market funds under Rule 2a-7 of the 1940 Act, and cash items) consists of, and no more than 45% of the Company’s net income after taxes (for the last four fiscal quarters combined) is derived from, securities other than U.S. government securities, shares of registered money market funds under Rule 2a-7 of the 1940 Act, securities issued by employees’ securities companies, securities issued by qualifying majority owned subsidiaries of the Company, and securities issued by qualifying companies that are controlled primarily by the Company.
Added
Solana and other digital assets, as well as new business models and transactions enabled by blockchain technologies, present novel interpretive questions under the 1940 Act.
Added
There is a risk that assets or arrangements that we have concluded are not securities could be deemed to be securities by the SEC or another authority for purposes of the 1940 Act, which would increase the percentage of securities held by us for 1940 Act purposes.

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Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed1 unchanged
Biggest changeItem 2. Properties Our executive and corporate offices are located at 3030 North Rocky Point Drive, Suite 420, Tampa, Florida 33607, approximately 5,752 square feet under a 61 month lease, set to expire September 1, 2028.
Biggest changeItem 2. Properties Our executive and corporate offices, approximately 5,752 square feet, are located at 3030 North Rocky Point Drive, Suite 420, Tampa, Florida 33607, are leased on a 61-month term set to expire September 1, 2028.
The Company leases this facility from the owner our CEO, Allan Marshall. 20 Table of Contents
The Company leases this facility from the owner our CEO, Allan Marshall.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

2 edited+9 added−4 removed1 unchanged
Biggest changeUmpqua Bank is alleging that Cygnet and Hanig are in default and contends $3,835,975.17 is due and owed. The Company is actively engaged in defending the foregoing lawsuit. · Get Fit Fast Supplements, LLC v. Cygnet Online, LLC, et al.; American Arbitration Association Case No. 01-24-0003-1085; Filed March 14, 2024; Additional Parties: Eric Hanig.
Biggest changeThe case is presently in active arbitration and is styled Get Fit Fast Supplements, LLC v. Cygnet Online, LLC, et al., American Arbitration Association Case No. 01-24-0003-1085.
The Company is not involved in any pending legal proceeding or litigation, and, to the best of its knowledge, no governmental authority is contemplating any proceeding to which we are a party or to which any of our properties are subject, which would reasonably be likely to have a material adverse effect on the Company, other than the following: · Umpqua Bank v.
Other than the foregoing, the Company is not involved in any pending legal proceeding or litigation, and, to the best of its knowledge, no governmental authority is contemplating any proceeding to which we are a party or to which any of its properties is subject, which would reasonably be likely to have a material adverse effect on the Company.
Removed
Cygnet Online, LLC, et al.; Palm Beach County Case No. 2024CA006174; Filed July 1, 2024; Additional Parties: Eric Hanig. Cygnet, a wholly owned subsidiary of the Company, is the borrower under a promissory note and business loan agreement with Umpqua Bank. Hanig, the former principal of Cygnet, entered into an unconditional guarantee with Umpqua Bank.
Added
The Company is not involved in any pending legal proceeding or litigation, and, to the best of its knowledge, no governmental authority is contemplating any proceeding to which we are a party or to which any of our properties are subject, which would reasonably be likely to have a material adverse effect on the Company, other than the following: · On March 14, 2024, Get Fit Fast Supplements, LLC, filed for arbitration against Cygnet Online, LLC, and Eric Hanig.
Removed
Get Fit Fast Supplements, LLC (“GFF”) entered into an Asset Purchase Agreement with Cygnet. A portion of the purchase price was financed by Cygnet through a promissory note guaranteed by Hanig, the former principal of Cygnet. Additionally, Cygnet agreed to purchase GFF’s remaining inventory and agreed to earn out provisions whereby GFF would receive funds based on Cygnet’s future performance.
Added
The foregoing action, and related actions that have been combined in the same arbitration, are principally a series of breach of contract and fraud cases related to the rights and obligations of the parties under the various transaction documents associated with the acquisition by the Company of Cygnet Online, LLC, and the acquisition, prior thereto, by Cygnet Online, LLC of Get Fit Fast Supplements, LLC.
Removed
The Company acquired Cygnet through a Securities Purchase Agreement, dated April 1, 2022. GFF claims damages in the amount of $3,075,859.17 based on Cygnet and Hanig’s failure to pay the full purchase price. Hanig and Cygnet separately counterclaimed against GFF for, among other things, fraudulent misrepresentations that led Cygnet and Hanig to enter into the Asset Purchase Agreement.
Added
The parties are seeking monetary damages in their various claims and counterclaims against one another. The Company, on behalf of Cygnet, is vigorously defending all claims made against Cygnet in the arbitration.
Removed
As a result of the acquisition of Cygnet by the Company, Hanig has demanded indemnification from Upexi for the claims brought by GFF. The Company is actively engaged in defending the foregoing lawsuit. Item 4. Mine Safety Disclosures Not applicable.
Added
The Company is not a party to this arbitration. 38 Table of Contents · On September 6, 2024, Eric Hanig filed suit against the Company and Cygnet Online, LLC in state court in Nevada for an alleged failure to pay $300,000 pursuant to a Letter Agreement.
Added
The Company denies all claims and filed counterclaims against Eric Hanig for fraudulently inducing it to enter into the Letter Agreement and for absconding with the balance of Cygnet Online, LLC’s bank account. · On December 20, 2024 MVW Holdings filed a lawsuit against E-Core Technology, Inc., an entity formerly owned by the Company, and also named the Company as a defendant.
Added
The lawsuit alleges trade dress infringement for certain packaging used by E-Core for a limited number of products.
Added
The Company denies all liability for the alleged conduct and no longer owns E-Core. · On or about April 7, 2025, Bloomios, Inc., Infused Confections, LLC and Infusionz, LLC (collectively, the “Plaintiffs”), filed an action against the Company and each of its executive officers and directors, and Grove, Inc., which is the Company’s prior name.
Added
The action stems from Bloomios’ acquisition of Infusionz from the Company in October 2022. The Plaintiffs’ claims allege fraud, misrepresentation, and breach of contract, among other claims, and are seeking damages in an unspecified amount, plus punitive damages, and unspecified declaratory relief. The Company considers the action baseless.
Added
The Company was successful in obtaining the dismissal of individual Board members from this action and filed counterclaims for the approximately $19.5 million the Plaintiffs owe the Company from the transaction. The Company intends to seek reimbursement of all attorneys’ fees as a result of the false statements made by the Plaintiffs in the complaint.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+8 added−4 removed2 unchanged
Biggest changeFourth Quarter Third Quarter Second Quarter First Quarter Fiscal 2024: High $ 0.60 $ 1.38 $ 1.75 $ 2.33 Low 0.36 0.48 0.75 1.56 Fiscal 2023: High $ 4.55 $ 4.94 $ 5.70 $ 6.08 Low 2.04 2.53 2.70 3.68 We consider our common stock to be thinly traded and, accordingly, reported sales prices or quotations may not be a true market-based valuation of our common stock.
Biggest changeWe consider our common stock to be thinly traded and, accordingly, reported sales prices or quotations may not be a true market-based valuation of our common stock. Holders of Record There were approximately 185 holders of record of the Company’s common stock on June 30, 2025.
The 2019 Plan is administered by the Compensation Committee or such other committee as is appointed by the Board of Directors pursuant to the 2019 Plan (the “Committee”).
The 2019 Plan is administered by the Compensation Committee or such other committee (the “Committee”) as is appointed by the Board of Directors pursuant to the 2019 Plan.
The plan grants incentives to select persons who can make, are making and continuing to make substantial contributions to the growth and success of the Company, to attract and retain the employment and services of such persons and to encourage and reward such contributions by providing these individuals with an opportunity to acquire or increase stock ownership in the Company through either the grant of options or restructured stock.
The plan grants incentives to select persons who can make, are making and continuing to make substantial contributions to the growth and success of the Company, to attract and retain the employment and services of such persons and to encourage and reward such contributions by providing these individuals with an opportunity to acquire or increase stock ownership in the Company through either the grant of options or restricted stock.
All of the securities issued by the Company as described above were issued pursuant to the exemption for transactions by an issuer not involved in any public offering under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder and corresponding state securities laws. Item 6. [Reserved]
All of the securities issued by the Company as described above were issued pursuant to the exemption for transactions by an issuer not involved in any public offering under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder and corresponding state securities laws. Issuer Purchases of Equity Securities None. Item 6. [Reserved]
Accordingly, you may need to sell your shares of our Common Stock to realize a return on your investment; however, you may not be able to sell your shares at or above the price you paid for them. 21 Table of Contents Securities Authorized for Issuance under Equity Compensation Plans The Company has established a Company an incentive plan, 2019 Equity Incentive Plan, as amended (the “2019 Plan”).
Accordingly, you may need to sell your shares of our Common Stock to realize a return on your investment; however, you may not be able to sell your shares at or above the price you paid for them. 39 Table of Contents Securities Authorized for Issuance under Equity Compensation Plans The Company established the 2019 Equity Incentive Plan, as amended (the “2019 Plan”).
Holders of Record There were approximately 3,811 holders of record of the Company’s common stock on June 30, 2024. Dividend Policy We currently intend to retain our future earnings, if any, to finance the development and expansion of our businesses and, therefore, do not intend to pay cash dividends on our Common Stock for the foreseeable future.
Dividend Policy We currently intend to retain our future earnings, if any, to finance the development and expansion of our businesses and, therefore, do not intend to pay cash dividends on our Common Stock for the foreseeable future.
The Shareholders consented, and the Board of Directors approved amendment of the Stock Option Plan to increase the maximum number of Shares that may be issued thereunder to 500,000 Shares, as adjusted for the 1 for 20 reverse stock split.
The Reverse Stock Split was approved by the Board of Directors in accordance with Nevada law. Concurrently, the Company’s shareholders consented to, and the Board of Directors approved, an amendment of the 2019 Plan to increase the maximum number of Shares that may be issued thereunder to 500,000 Shares, as adjusted for the 1 for 20 reverse stock split.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The Company’s common stock is listed on the NASDAQ Stock Market LLC and is traded under the symbol “UPXI.” The following table sets forth the quarterly high and low sales prices per share of the Company’s common stock on the consolidated market for each quarter within the last two fiscal years.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The Company’s common stock is listed on the NASDAQ Stock Market LLC and is traded under the symbol “UPXI.” The Company’s common stock started trading on June 24, 2021.
Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column) Equity compensation plans approved by security holders 213,214 $ 2.87 256,181 Total 213,214 $ 2.87 256,181 22 Table of Contents Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities In September of 2023, the Company was to issue 4,505 shares of common stock for the acquisition of the remaining 45% of Cygnet Online, LLC.
Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights* Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column) ** Equity compensation plans approved by security holders 843,270 $ 3.39 9,027,903 Equity compensation plans not approved by security holders — — — Total 843,270 $ 3.39 9,027,903 *Consists of 621,353 options outstanding and 221,917 RSUs outstanding. ** There have been 10,919 shares issued for the exercise of stock options and 117,908 shares issued for vested RSUs.
Removed
The Company started trading on June 24, 2021.
Added
On September 18, 2024, the Company filed a Certificate of Change with the Nevada Secretary of State to effect a reverse stock split of its common stock at a rate of 1-for-20 (the “Reverse Stock Split”), which became effective as of October 3, 2024 (the “Effective Date”).
Removed
The Board of Directors of the Company may, from time to time, in its discretion grant to directors, officers, consultants and employees of the Company, non-transferable options to purchase common shares. The options are exercisable for a period of up to 10 years from the date of the grant.
Added
On June 16, 2025, the shareholders approved an amendment to, the 2019 Plan to increase the number of shares issuable pursuant to awards granted under the 2019 Plan from 500,000 shares to 10,000,000 shares. The following table summarizes information, as of June 30, 2025, relating to compensation plans under which equity securities are authorized for issuance.
Removed
The shares were valued at $162,727 or $35.80 per common share. These shares were held and not issued due to an ongoing dispute. In January of 2024, the Company issued 25,081 shares of common stock as repayment of $500,000 of the Company’s long-term debt. The shares were valued at $500,000 or $19.94 per share.
Added
On August 19, 2025, subsequent to the year ended June 30, 2025, the shareholders approved an amendment to the 2019 Plan to increase the number of shares issuable pursuant to awards granted under the 2019 Plan from 10,000,000 shares to 25,000,000 shares. 40 Table of Contents Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities On July 16, 2025, the Company issued secured convertible notes in the aggregate, principal amount of approximately $151.2 million, convertible into 35,569,224 shares of Common Stock at $4.25 per share.
Removed
In March of 2024, the Company issued 5,000 shares of common stock as an incentive-restricted stock grant to certain employees. The shares were valued at $85,000 or $17.00 per share.
Added
On July 11, 2025, the Company issued 12,457,186 shares of Common Stock, at an offering price of $4.00 per share and $4.94 per share for certain members of the Company’s management and members of the board of directors.
Added
On April 24, 2025, the Company issued: (i) 35,970,383 shares of Common Stock, at an offering price of $2.28 per share, and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase 7,889,266 shares of Common Stock (the “Pre-Funded Warrant Shares”) at an offering price of $2.279 per Pre-Funded Warrant.
Added
Each of the Pre-Funded Warrants is exercisable for one share of Common Stock at the exercise price of $0.001 per Pre-Funded Warrant Share, are immediately exercisable, and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full.
Added
On April 24, 2025, the Company issued 241,228 shares of common stock as repayment of $550,000 of the Company’s debt. The shares were valued at $550,000 or $2.28 per share. In February of 2025, the Company issued 125,000 shares of common stock to two different investors for the repayment of $250,000 of outstanding debt.
Added
The average share price for the repayment of debt was approximately $2.00 per common share issued. In January of 2025, the Company issued 260,000 shares of common stock to two different investors for the repayment of $600,000 of outstanding debt. The weighted average share price for the repayment of debt was approximately $2.31 per common share issued.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

19 edited+48 added−65 removed22 unchanged
Biggest changeJune, 2024 2023 Change Revenue $ 26,000,652 $ 36,441,695 $ (10,441,043 ) Cost of revenue $ 13,176,073 $ 15,421,715 $ (2,245,642 ) Sales and marketing expenses $ 5,989,727 $ 6,067,392 $ (77,665 ) Distribution costs $ 8,611,702 $ 9,465,149 $ (853,447 ) General and administrative expenses $ 6,771,937 $ 6,875,575 $ (103,638 ) Other operating expenses $ 4,848,629 $ 7,146,286 $ (2,297,657 ) Other (expense) $ (3,141,166 ) $ (4,676,160 ) $ 1,534,994 Loss attributable to non-controlling interest $ - $ (559,967 ) $ 559,967 Impairment of intangible assets and goodwill $ 7,869,425 3,746,301 4,123,124 Lease impairment $ 289,969 - 289,969 (Loss) on the sale of assets and businesses $ (456,747 ) (2,212,542 ) 1,755,795 Discontinued operations $ (1,164,184 ) $ (1,370,124 ) $ 2,534,308 Net loss attributable to Upexi, Inc. $ (23,658,438 ) $ (16,930,289 ) $ (6,728,149 ) Revenues decreased by $10,441,043 or 29% for the fiscal year ended June 30, 2024, compared with the fiscal year ended June 30, 2023.
Biggest changeJune, 2025 2024 Change Revenue $ 14,826,336 $ 26,000,652 $ (11,174,316 ) Digital asset revenue $ 985,009 $ - $ 985,009 Product costs $ 4,943,305 $ 13,176,073 $ (8,232,768 ) Distribution costs $ 4,691,964 $ 8,611,702 $ (3,919,738 ) Sales and marketing expenses $ 4,001,094 $ 5,989,727 $ (1,988,633 ) General and administrative expenses $ 11,935,582 $ 6,771,937 $ 5,163,645 Unrealized and realized (gain) loss on digital assets $ (105,474 ) $ - $ (105,474 ) Other operating expenses $ 3,114,620 $ 4,848,629 $ (1,734,009 ) Other (expense) $ (1,184,457 ) $ (3,141,166 ) $ 1,956,709 Impairment of intangible assets and goodwill $ - $ 7,869,425 $ (7,869,425 ) Lease (gain on sale) impairment $ (269,994 ) $ 289,969 $ (559,963 ) (Gain) on the sale of assets and businesses $ - $ (448,882 ) $ 448,882 Income from discontinued operations $ - $ 1,164,184 $ (1,164,184 ) Net loss attributable to Upexi, Inc. $ (13,684,209 ) $ (23,658,438 ) $ 9,974,229 Revenues decreased by $11,174,316, or 43%, for the fiscal year ended June 30, 2025, compared with the fiscal year ended June 30, 2024.
On May 28, 2024, the Company entered into an agreement to sell its Clearwater warehouse for a sale price of $4,300,000. The sale of the building was completed on July 8, 2024 and provided $1,370,978 of working capital. On June 13, 2024, the Company sold all of the issued and outstanding equity of VitaMedica, Inc. to three investors.
On May 28, 2024, the Company entered into an agreement to sell its Clearwater, Florida warehouse for a sale price of $4,300,000. The sale of the building was completed on July 8, 2024 and provided $1,370,978 of working capital. On June 13, 2024, the Company sold all of the issued and outstanding equity of VitaMedica, Inc. to three investors.
On October 17, 2024, Company received written notice (the “Compliance Notice”) from The Nasdaq Stock Market LLC (“Nasdaq”) informing the Company that it has regained compliance with Nasdaq Listing Rule 5550(a)(2), which requires that companies listed on the Nasdaq Stock Market maintain a minimum bid price of $1.00 per share.
On October 17, 2024, Company received written notice (the “Compliance Notice”) from The Nasdaq Stock Market LLC (“Nasdaq”) informing the Company that it had regained compliance with Nasdaq Listing Rule 5550(a)(2), which requires that companies listed on the Nasdaq Stock Market maintain a minimum bid price of $1.00 per share.
Results of Operations Year Ended June 30, 2024, as compared to June 30, 2023: The following summary of our results of operations should be read in conjunction with our consolidated financial statements for the years ended June 30, 2024, and 2023, which are included herein.
Results of Operations Year Ended June 30, 2025, as compared to June 30, 2024: The following summary of our results of operations should be read in conjunction with our consolidated financial statements for the years ended June 30, 2025, and 2024, which are included herein.
Reverse Stock Split On September 18, 2024, we filed a Certificate of Change with the Nevada Secretary of State to effect a reverse stock split of our common stock at a rate of 1-for-20 (the "Reverse Stock Split"), which became effective as of October 3, 2024 (the "Effective Date").
Reverse Stock Split On September 18, 2024, we filed a Certificate of Change with the Nevada Secretary of State to effect a reverse stock split of our common stock at a rate of 1-for-20 (the “Reverse Stock Split”), which became effective as of October 3, 2024 (the “Effective Date”).
The increase in the net losses primarily related to the above-mentioned changes.
The decrease in the net losses primarily related to the above-mentioned changes.
One of the minority Interest Buyers is Allan Marshall, the Company’s Chief Executive Officers. The purchase price for the stock was Six Million Dollars ($6,000,000), subject to certain customary post-closing adjustments. The net cash provided from the sale was $2,100,000, reduced liabilities of $1,900,000 and will provide an additional $2,000,000 in cash flow next year.
One of the minority interest buyers is Allan Marshall, the Company’s Chief Executive Officers. The purchase price for the stock was $6,000,000, subject to certain customary post-closing adjustments. The net cash provided from the sale was $2,100,000, reduced liabilities of $1,900,000, a loan for $1,000,000 and a final $1,000,000 payment subject to certain inventory and working capital adjustments.
Key Factors Affecting Operating Results Cyclicality and Seasonality Our business is typically unaffected by seasonality. 23 Table of Contents Operating Segments The Company’s financial reporting is organized into a single segment that includes production, sales and distribution of branded products, following the sale of E-Core, Technology Inc. and its subsidiaries.
Operating Segments The Company’s financial reporting is organized into a single segment that includes production, sales and distribution of branded products, following the sale of E-Core, Technology Inc. and its subsidiaries.
As the per-share par value did not change, we reclassified $19,860 from Common Stock to Additional Paid-in-Capital on the Effective Date.
On the Effective Date, every twenty shares of Common Stock issued and outstanding were automatically combined into one share of Common Stock, without any change in the par value per share. As the per-share par value did not change, we reclassified $19,860 from Common Stock to Additional Paid-in-Capital on the Effective Date.
The income and loss on discontinued operations was as follows: June 30, 2024 June 30, 2023 Interactive Offers $ (187,003 ) $ (1,729,636 ) Infusionz 71,976 (338,418 ) E-Core 1,065,575 1,080,379 VitaMedica 213,636 (382,449 ) $ 1,164,184 $ (1,370,124 ) 25 Table of Contents The Company had a net loss of $21,396,857 compared to a net loss of $16,930,289 in the prior year.
The income and loss on discontinued operations was as follows: June 30, 2025 June 30, 2024 Interactive Offers $ - $ (187,003 ) Infusionz - 71,976 E-Core - 1,065,575 VitaMedica - 213,636 $ - $ 1,164,184 43 Table of Contents The Company had a net loss of approximately $13,684,000 compared to a net loss of approximately $23,658,000 in the prior year.
The Reverse Stock Split was approved by the board of directors in accordance with Nevada law.
The Reverse Stock Split was approved by the board of directors in accordance with Nevada law. The Reverse Stock Split did not have any impact on the par value of common stock.
This loss was offset by a $1,948,538 gain on the sale of VitaMedica and a gain on the sale of Infusionz and CBD related assets, which was recorded as a $2,212,542 loss in the prior year.
In the prior year, the Company recognized a gain on the sale of assets and businesses of approximately $449,000. This gain was from approximately $1,948,538 gain on the sale of VitaMedica, the gain of approximately $238,000 on the sale of Infusionz and CBD related assets, which recorded an approximate loss of $2,186,000 in the prior year.
Other operating expenses decreased by $2,297,657 or 32% compared with the same period last year. These expenses are primarily non-cash expense for amortization of stock compensation, amortization of acquired intangible assets and depreciation. The decrease in the amortization of stock compensation was $2,494,695 as older grants are fully amortized and there have only been limited grants in the past year.
Other operating expenses decreased by approximately $1,734,000, or 36%, compared with the same period last year. These expenses are primarily non-cash expense for amortization of stock compensation, amortization of acquired intangible assets and depreciation. The decrease in the amortization of acquired intangible assets was approximately $2,334,000 as approximately $7,869,000 was impaired in the prior year.
Liquidity and Capital Resources Working Capital As of June 30, 2024 As of June 30, 2023 Current assets $ 11,419,918 $ 30,012,984 Current liabilities $ 12,655,152 $ 22,391,587 Working capital $ (1,235,234 ) $ 7,621,397 Cash Flows Years Ended June 30, 2024 2023 Cash flows (used in) operating activities – continuing operations $ (4,894,751 ) $ (7,421,529 ) Cash flows provided by (used in) investing activities – continuing operations 831,112 (23,271 ) Cash flows (used in) provided by financing activities – continuing operations (353,789 ) 6,032,901 Cash flows provided by operating activities – discontinued operations 4,793,374 7,624,206 Cash flows used by investing activities – discontinued operations (4,206,823 ) (2,551,587 ) Cash flows used by financing activities – discontinued operations - (6,318,234 ) Net decrease in cash during the period $ (3,830,877 ) $ (2,657,514 ) On June 30, 2024, the Company had cash of $661,415 or a decrease of $3,830,877 from June 30, 2023.
Liquidity, Capital Resources and Cash Requirements Working Capital As of June 30, 2025 As of June 30, 2024 Current assets $ 56,778,043 $ 11,419,918 Current liabilities $ 32,563,906 $ 12,655,152 Working capital $ 24,214,137 $ (1,235,234 ) Cash Flows Years Ended June 30, 2025 2024 Cash flows (used in) operating activities – continuing operations $ (8,423,042 ) $ (4,894,751 ) Cash flows (used in) provided by investing activities – continuing operations (99,293,083 ) 831,112 Cash flows provided by (used in) financing activities – continuing operations 110,029,860 (353,789 ) Cash flows provided by operating activities – discontinued operations - 4,793,374 Cash flows used by investing activities – discontinued operations - (4,206,823 ) Cash flows used by financing activities – discontinued operations - - Net increase (decrease) in cash during the period $ 2,313,735 $ (3,830,877 ) On June 30, 2025, the Company had cash of $2,975,150, or an increase of approximately $2,314,000, from June 30, 2024.
The Company recognized an impairment $289,969 on the Delray Beach warehouse during 2024 as part of closing the warehouse and the Company exiting the recommerce business. No such items for 2023. The Company recognized a valuation allowance on its deferred tax asset of $6,100,000 during the year ended June 30, 2024.
The Company recognized an impairment $289,969 on the Delray Beach warehouse during the year ended June 30, 2024 as part of closing the warehouse and the Company exiting the recommerce business. This liability was settled in January of 2025 and resulted in a gain on the lease impairment of approximately $270,000.
Management intends to finance operating costs over the next twelve months from the date of the issuance of these consolidated financial statements with existing cash on hand, cash flow from operations, proceeds from the sale of VitaMedica not yet received and additional short term debt financings, if necessary. 27 Table of Contents We estimate that we will have sufficient working capital to fund our operations over the twelve months following the date of the issuance of these condensed consolidated financial statements and meet all our debt obligations.
We estimate that we will have sufficient working capital to fund our operations over the twelve months following the date of the issuance of these consolidated financial statements and meet all of our debt obligations.
The initial term is five years. The estimated cost of this facility is a reduction of overall facility costs of approximately $240,000 in rent and approximately $138,000 per year in utilities, repairs and maintenance. Management also expects to have additional savings in labor and administrative costs, which is expected to add additional cash flow for fiscal year 2025.
The lease is for approximately 10,000 square feet of warehouse and office space, located in Odessa, Florida for $20,060 per month on a triple net basis. The initial term is five years. The estimated cost of this facility is a reduction of overall facility costs of approximately $240,000 in rent and approximately $138,000 per year in utilities, repairs and maintenance.
The $2,511,587 used in discontinued investing activities was $500,000 for the acquisition of VitaMedica and $2,051,587, net of cash acquired, for the acquisition of E-core. 26 Table of Contents Net cash flows used in financing activities for the year ended June 30, 2024 was $353,789 compared to $285,333 used during the year ended June 30, 2023.
This was offset by the collection of the purchase price in the sale of E-core and the proceeds from the sale of the building. Net cash flows provided by financing activities for the year ended June 30, 2025 was approximately $110,030,000 compared to approximately $354,000 used during the year ended June 30, 2024.
An impairment of goodwill in the amount of $2,889,158 was recorded at June 30, 2023 eliminating all of the goodwill related to Interactive Offers. 28 Table of Contents Revenue Recognition - In accordance with ASC No. 606, Revenue from Contracts with Customers, the Company recognizes revenue when we satisfy performance obligations as evidenced by the transfer of control of our products or services to customers.
Management believes the areas described below require significant judgment in the application of accounting policy or in making estimates and assumptions that are inherently uncertain and that may change in subsequent periods. 46 Table of Contents For further information, see Note 2 to the Consolidated Financial Statements, “Significant Accounting Policies.” Revenue Recognition - In accordance with ASC No. 606, Revenue from Contracts with Customers, the Company recognizes revenue when we satisfy performance obligations as evidenced by the transfer of control of our products or services to customers.
Removed
Overview The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The consolidated financial statements include the accounts of all subsidiaries in which the Company holds a controlling financial interest as of the financial statement date.
Added
Overview We are in the cryptocurrency industry and the management of cash assets through a cryptocurrency portfolio, primarily focused in Solana tokens and staking of those tokens.
Removed
For the year ended June 30, 2024, the consolidated financial statements of Upexi, Inc. include all of the subsidiary accounts included in the consolidated financial statements for the year ended June 30, 2023, and include the subsidiaries in which the Company holds a controlling financial interest as of June 30, 2024 and 2023.
Added
We continue to be a brand owner specializing in the development, manufacturing, and distribution of consumer products. 41 Table of Contents Our Solana Treasury Strategy Early in 2025, we updated and modified our cash management and treasury strategy to include holding digital currency assets directly on our balance sheet.
Removed
Infusionz LLC, a Colorado limited liability company, along with select CBD asset; Interactive Offers, LLC a Delaware limited liability corporation; VitaMedica, a Nevada corporation; and E-Core Technology, Inc. d/b/a New England Technology, Inc. have been classified as discontinued operations for the years ended June 30, 2024 and 2023, respectively and the assets and liabilities have been classified as current assets, and liabilities of discontinued operations and assets held for sale on the balance sheets for June 30, 2024 and 2023.
Added
This was a shift from before when we held excess cash primarily in FDIC-insured interest-bearing accounts. The change to adopt this strategy results from our intention to obtain the highest yield on excess cash. Under our new approach, our treasury policy focuses primarily on Solana (“SOL”).
Removed
All intercompany accounts and transactions have been eliminated as a result of the consolidation.
Added
The approach involves applying a public-market treasury model to an asset that is considered earlier in its lifecycle than, with respect to both development and usage, as well as institutional adoption, Bitcoin.
Removed
The product sales were down approximately $15,400,000 or 42% compared to the prior year, with the most significant decline being the sales of products through third party sales channels, such as Amazon, with the largest decline coming from the products where we do not own the brand. The decline in sales was partially offset by approximately $5,000,000 in manufacturing sales.
Added
Management will focus its resources to this digital asset strategy and a significant portion of the balance sheet will be allocated to holding Solana in the Company’s digital asset treasury. Key Factors Affecting Operating Results Cyclicality and Seasonality Our business is typically unaffected by seasonality.
Removed
Management has augmented the overall strategy of the Company to focus on product sales, including the development, production and distribution of branded products. In addition, sales were affected by the manufacturing consolidation to Florida, which was completed by August 1, 2024, with manufacturing returning to full production.
Added
The Company divested from the recommerce business to focus primarily on brands that are owned or products that the Company produces as white label products for the brand owner. The elimination of the recommerce business decreased sales by approximately $9,787,000, or 85%, of the decline in sales compared to the prior year.
Removed
Cost of revenue decreased by $2,245,642 or 15% compared with the fiscal year ended June 30, 2023. The gross profit decreased by $8,195,401 or 39% compared with the prior year and gross margin declined by 8.36% to 49.32% compared to 57.68%.
Added
The Company had revenue of approximately $985,000 from the newly implemented treasury strategy. This digital asset treasury was established in May of 2025 and management expects the revenue generated from the treasury to significantly increase in fiscal year 2026. 42 Table of Contents Product costs decreased by $8,232,768, or 62%, compared with the fiscal year ended June 30, 2024.
Removed
The majority of the decline in gross profit was the $10,441,043 decrease in year over year sales, however the gross margin decline was primarily related to the $3,020,062 inventory write off and increase in the inventory reserves compared to only $92,378 expense in the year ended June 30, 2023.
Added
The two primary reasons for the decrease in products costs were the overall lower sales and the elimination of the lower margin recommerce business. In addition, in the prior year there were significant inventory write offs and other non-cash expenses in the product costs that decreased the overall gross profit compared to the current year’s gross profit.
Removed
This additional $2,927,684, non-cash expense recognized during the year ended June 30, 2024, reduced the gross margin by 11.26%. The inventory write off was caused by both the strategic consolidation of operations to Florida and the change in overall strategy with the elimination of the recommerce strategy.
Added
Gross profit decreased by approximately $2,942,000, or approximately 22.9% compared with the prior year, excluding the increase in gross profit related to the $985,000 of digital asset revenue. The profit margin increased to approximately 67% of revenue compared to 49% of revenue in the prior year, excluding the digital asset revenue.
Removed
Management expects the gross margin to improve with the change in strategic focus and the completed consolidation of operations. Sales and marketing expenses decreased by $77,665 or 1% compared with the same period last year. The expenditures for both years was similar in total.
Added
Management’s focus in fiscal year 2026 is on improving the overall gross profit and the profit margin of the business and increasing the revenue from our digital asset treasury. Sales and marketing expenses decreased by approximately $1,988,000, or 33%, compared with the same period last year.
Removed
We anticipate our advertising expenses will remain consistent with an overall decrease in sales and marketing as a percentage of total sales as we have impended our overall brand marketing strategy and we will be able to increase sales significantly without large increases in the expenses. 24 Table of Contents Distribution costs decreased $853,447 or 9% compared with the same period last year.
Added
We have decreased the number of fixed costs in our marketing budget and focused our advertising expenditures. The percentage of sales and marketing to the total sales will increase based on our elimination of the recommerce business, however with the elimination of many fixed expenditures, the changes should align with the overall total sales.
Removed
The decrease was related to the decreased sales and the consolidation of facilities. Management has implemented a strategy to change promotions, increase shipping prices and adjust packaging for whole sales verses direct to consumer shipments to lower the overall percentage of distribution costs to sales.
Added
Distribution costs decreased by approximately $3,920,000 or 46%, compared with the fiscal year ended June 30, 2024. The strategic change and divesture of the two businesses in 2024, along with the consolidation of operations to Florida reduced the Amazon fees by approximately $2,668,000, reduced the facility expenses by approximately $255,000 and the labor costs by approximately $743,000.
Removed
The consolidation strategy and other distribution cost reduction strategies are expected to be fully realized in the coming year. General and administrative expenses decreased by $103,638 or 2% compared with the same period last year. General and administrative expenses were similar to the prior year.
Added
The remaining product sales do not rely on the Amazon distribution network and are distributed from one facility in Florida. General and administrative expenses increased by approximately $5,163,645, or 76%, compared with the same period last year.
Removed
Since the consolidation to Florida and other changes in the business, management has actively been reducing general and administrative costs. Management expects that general and administrative expenses will decline for the period July 1, 2024 to September 30, 2024, with the most significant declines being realized in periods ending after December 31, 2024.
Added
Over 75% of the increase was related to these three factors: 1) approximately $2,668,000 of additional expense in corporate compensation; 2) approximately $576,000 in additional professional services fees, including legal, audit and tax services; and 3) approximately $686,000 of additional public company expenses.
Removed
This decline was offset by slightly higher depreciation expense during the year. Other expense decreased by $1,534,994 or 33%, which related to the significant amount of interest expensed in the prior year when the Company entered into a letter of agreement to repay all amounts owed and terminate all security interests the lender held, including the Form S-3 registration statement.
Added
Our overall general and administrative expenses are expected to increase over the next year and then stabilize as we implement this overall treasury and business strategy. Our continuous capital raising efforts and professional and public company expenses necessary to drive this strategy is significantly more than what the Company has required in the past.
Removed
The Company also had non-cash interest related to the amortization of the consideration discount of $1,112,676 and $969,098 for the years ended June 30, 2024, and June 30, 2023, respectively. There was a loss of $559,967 attributable to non-controlling interest in 2023 compared to none in 2024 as the Company purchased the remaining non-controlling interest in the current year.
Added
Depreciation expense declined by approximately $587,000. These expenses were partially offset by approximately $1,187,000 of additional share-based compensation expense. Our realized and unrealized gains was approximately $105,474 with none in the same period last year.
Removed
There was an impairment of intangible assets and goodwill of $7,869,425 in the year ended June 30, 2024. $6,844,745 of the impairment was from the acquisition of Cygnet and related to the Company exiting the recommerce business.
Added
The price of Solana on June 30, 2025 was $154.74, as quoted on coinmarketcap.com and is the approximate cost basis of our Solana treasury at June 30, 2025. Other expense decreased by approximately $1,957,000 or 63%, as compared with the same period last year, which primarily relates to the continued decrease in interest expense from payoffs of debts.
Removed
The remaining $974,680 impairment was related to the LuckyTail acquisition and the significant decline in direct to consumer business as LuckyTail primarily sells through Amazon. There was an impairment of intangible assets and goodwill of $3,746,301 in the year ended June 30, 2023, and related to the valuation of the Interactive Offers and the subsequent sale of the business.
Added
This gain was offset by the loss of approximately $1,737,326 on the sale of E-Core.
Removed
This was done as management estimated the probable future usage of the Company’s net operating loss carry forward.
Added
The increase in cash was due to significant capital raised during the period and offset by the net loss from operations and capital investments in Solana for the digital asset treasury.
Removed
The loss on the sale of assets and businesses of $456,747 was related to a loss on the sale of E-Core of $1,737,326, the loss on the sale or abandonment of assets not necessary for operations at the new Florida facility and an impairment on the largo facility that was sold on July 8, 2024.
Added
The significant increase in working capital is a result of the liquid SOL held by the Company in its digital asset treasury. 44 Table of Contents The net cash used by continuing operating activities was approximately $8,423,000.
Removed
The decrease in cash was primarily the net loss from operations and the significant change in continuing operations with the recent sale of businesses and the change of the Company’s overall strategy. The net cash used by continuing operating activities was $4,894,751 and offset by cash provided by discontinued operations of $4,793,374.
Added
The net loss of approximately $13,684,000 was offset by the non-cash expenses of approximately $758,000 for depreciation and amortization, $2,357,000 for stock-based compensation and issuance of common stock for services rendered by consultants, and the write off of inventory and credit losses relating to Amazon of approximately $1,682,824. The change in operating assets and liabilities provided cash of approximately $1,931,000.
Removed
The loss of $23,658,438 was offset by the non-cash expenses of $3,948,084 depreciation and amortization, $7,869,425 impairment of goodwill and identifiable intangible assets, $1,112,676 amortization of stock compensation and $1,812,319 write of inventory. The sale of business and the impairment recognized on the warehouse were minimal at a total of $112,448 used.
Added
The digital asset revenue and unrealized gains and losses from the digital asset treasury is non-cash as the value was from staking revenue paid in additional Solana and the increase in market value over the purchase price for the Solana held in the digital asset treasury.
Removed
The change in deferred tax asset was $344,802 with a valuation reserve of $6,100,000. The change in operating assets and liabilities provided cash of $2,907,978. Cash provided by discontinued operating activities was $4,793,374 and primarily related to decreases in E-core’s inventory and accounts receivable.
Added
Net cash used in investing activities for the years ended June 30, 2025 and 2024 was approximately $99,293,000 and use of $3,376,000, respectively. The most significant use of cash in investing activities was the purchase of Solana for the Company’s digital asset treasury.
Removed
Net cash provided by investing activities for the years ended June 30, 2024 and 2023 was $831,112 and use of $23,271, respectively. For the year ended June 30, 2024, cash of $539,348 was used for the acquisition of the remaining 45% of Cygnet and $932,565 for the acquisition of property and equipment.
Added
During the year ended June 30, 2025, the Company raised approximately $92,556,000 from the sale of the Company’s common stock and obtained a short-term loan of $20,000,000 that is collateralized by certain assets of the digital asset treasury.
Removed
Cash was provided during the year ended June 30, 2024 of $2,100,000 and $203,025 from the sale of VitaMedica and Interactive offers, respectively. In addition, the Company used $4,206,823 for discontinued investing activities related to the payments in the acquisition of E-core. In the prior year, the net cash used was $23,271.
Added
This was offset by the payment of debt and other common stock issued for the exercise of warrants or the issuance of convertible debt that was subsequently converted into common stock. On April 1, 2024, the Company entered into a lease agreement with MFA 2510 Merchant LLC.
Removed
The proceeds from the sale of Infusionz and selected assets was $5,492,532 and offset by $3,528,239 and $1,050,000 for the purchase of LuckyTail and Cygnet, respectively. $937,564 was used in the acquisition of property and equipment.
Added
On March 7, 2025 the Company closed on $350,000 of convertible debt with a term of two years and an interest rate of 3%. The debt was convertible into 116,118 shares of the Company’s common stock or $3.00 per share and was converted in June of 2025.
Removed
During the year ended June 30, 2024 cash was used for the payment of debt related to the acquisition of Cygnet and the payment of the loan on the building. This was offset during the year by a $100,000 advance to the Company by Allan Marshall, the CEO, which was repaid in July 2024.
Added
The convertible debt included warrants to purchase up to 116,118 shares of the Company’s common stock at a per share price of $3.00 per common share or for $350,000. Warrants for $250,000 or 83,334 shares of common stock were exercised. The Company received approximately $600,000 during the year related to the convertible debt and the exercised warrants.
Removed
During the year ended June 30, 2023, the Company had net proceeds of $6,127,893 from the issuance of stock and $7,120,000 in proceeds from the issuance of notes payable, including $1,470,000 of proceeds from a related party note payable, $3,000,000 of proceeds related to a note payable with a security interest in our building in Clearwater and $2,650,000 of unsecured debt.
Added
On April 24, 2025 the Company closed on a private placement offering to sell 35,970,383 shares of the Company’s common stock at an offering price of $2.28 per share and pre-funded warrants to purchase 7,889,266 shares of common stock at an offering price of $2.279 per share of the Company’s common stock that may be exercised at a per share price of $0.0001.
Removed
The newly issued debt was primarily used to repay the senior convertible note payable and the line of credit. On October 19, 2022, the Company and its indirect wholly owned subsidiary, Upexi 17129 Florida, LLC entered into a loan agreement with Professional Bank, a Florida state-chartered bank, providing for a mortgage on the Company’s principal office in N. Clearwater, Florida.
Added
The Company received approximately $92,556,000, net of broker fees, legal fees and other expenses incurred for the private placement. Since June 30, 2025, all of the pre-funded warrants have been exercised and the 7,889,266 shares of common stock issued. On May 23, 2023, The Company entered into a credit facility with BitGo Prime, LLC (“BitGo”).
Removed
The Company received $3,000,000 in connection with the transaction. The principal is to be paid back to Professional Bank over a term of ten years. The proceeds of the loan were utilized by the Company to pay down its loan facility with Acorn Capital, LLC, in the amount of $2,780,200, net of fees and other expenses.
Added
Pursuant to a Master Loan Agreement (the “Agreement”) the Company may borrow up to $20,000,000 of Digital Currency or United States Dollars with interest at the rate of 11.5% per year. The term of the credit facility is for one year and is renewable for successive one year options.
Removed
On October 31, 2022, the “Company, paid $4,275,071 in principal, $613,466 in accrued interest, $250,000 for settlement of a put option and $7,900 in miscellaneous fees for a total of $5,146,437 to the holders of the $15 million senior secured convertible notes entered into on June 28, 2022. The payment terminated the agreement with the noteholders.

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