What changed in UPEXI, INC.'s 2023 10-K compared to 2022?

Across the narrative sections we track, UPEXI, INC. (UPXI) added 158 paragraphs, removed 145, and edited 88 between the 2022 and 2023 10-K filings. The biggest movers are Item 7. Management's Discussion & Analysis (+66/−54), Item 1. Business (+48/−38), Item 1A. Risk Factors (+27/−45).

Did UPEXI, INC. add new Risk Factors in the 2023 10-K?

Yes — Item 1A Risk Factors shows 27 new/edited paragraphs and 45 removed paragraphs versus the 2022 10-K.

What changed in UPEXI, INC.'s MD&A (Item 7) in 2023?

Item 7 Management's Discussion & Analysis shows 66 new/edited paragraphs and 54 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Where does this UPXI 10-K diff come from?

The source filings are UPEXI, INC.'s official 2022 and 2023 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in UPEXI, INC.'s 10-K — 2022 vs 2023

Paragraph-level year-over-year comparison of UPEXI, INC.'s 2022 and 2023 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 2023 report.

+158 added−145 removedSource: 10-K (2023-10-03) vs 10-K (2022-09-28)

Top changes in UPEXI, INC.'s 2023 10-K

158 paragraphs added · 145 removed · 88 edited across 5 sections

Item 7. Management's Discussion & Analysis+66 / −54 · 28 edited
Item 1. Business+48 / −38 · 27 edited
Item 1A. Risk Factors+27 / −45 · 26 edited
Item 5. Market for Registrant's Common Equity+14 / −6 · 5 edited
Item 2. Properties+3 / −2 · 2 edited

Item 1. Business

Business — how the company describes what it does

27 edited+21 added−11 removed49 unchanged

2022 filing

2023 filing

Biggest change(“VitaMedica”), a Nevada corporation · Upexi Enterprise, 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 · Interactive Offers, LLC (“Interactive”), a Delaware limited liability company · Cygnet Online, LLC (“Cygnet”), a Delaware limited liability company, 55% owned In addition, the Company has four wholly owned subsidiaries that had no activity during the year ended June 30, 2022. · 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 4 Table of Contents Consolidations On July 1, 2020, the noncontrolling shareholders of the Company’s subsidiary, Trunano Labs Inc., converted 1,761,261 shares of Trunano Labs, Inc. stock, representing all the outstanding stock held by minority interest holders, into 1,277,778 shares of Upexi Inc. common stock, 10.8% of our then outstanding shares.

Biggest changeThe Company’s fifteen active subsidiaries are as follows: ☐ HAVZ, LLC, d/b/a/ Steam Wholesale, a California limited liability company o SWCH, LLC, a Delaware limited liability company o Cresco Management, LLC, a California limited liability company ☐ Trunano Labs, Inc., a Nevada corporation ☐ MW Products, Inc., a Nevada corporation ☐ Upexi Holding, LLC, a Delaware limited liability company o Upexi Pet Products, LLC, a Delaware limited liability company ☐ VitaMedica, Inc, a Nevada corporation ☐ Upexi Enterprise, 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 o E-Core Technology, Inc. a Florida corporation o Upexi Distribution Management LLC, a Delaware limited liability company ☐ Interactive Offers, LLC (“Interactive”), a Delaware limited liability company ☐ Cygnet Online, LLC, a Delaware limited liability company, 55% owned (100% owned as of September 1, 2023) In addition, the Company has four wholly owned subsidiaries that had no activity during the year ended June 30, 2023. · 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 HAVZ, LLC, d/b/a/ Steam Wholesale operates manufacturing and/or distribution centers in Las Vegas, Nevada supporting our health and wellness products, including those products manufactured with hemp ingredients and our overall distribution operations.

On August 17, 2022, the Company changed its name from Grove, Inc. to Upexi, Inc. to better reflect the evolution of the business from a single focus to the overall product distribution of product brands owned by the Company and other select brands that align with our overall product distribution strategy.

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 or costs and overhead, thus increasing profit margins on all of our products. Liquidation Markets.

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. Liquidation Markets.

While eCommerce is our direct line of business, we have grown and continue to expand our relationships with big box retailers in order to sell branded products as resellers or to place our in-house brands in those stores. With longstanding accounts that we’ve taken ownership of through acquisitions, we have grown our network and have untapped additional revenue streams.

While eCommerce is our direct line of business, we have grown and continue to expand our relationships with big box retailers in order to sell branded products as resellers or to place our in-house brands in those stores. With longstanding accounts that we have taken ownership of through acquisitions, we have grown our network and have untapped additional revenue streams.

We understand that advertising and consumer data is the key to growth when it comes to any eCommerce business. Our investment in such technology helps lowering our advertising costs, while providing a revenue stream from others who we outsource this programmatic SAAS to. This ownership of data allows us to help cross-sell any brand we acquire or launch. Logistical Expertise.

We understand that advertising and consumer data is the key to growth when it comes to any eCommerce business. Our investment in such technology helps lower our advertising costs, while providing a revenue stream from others who we outsource this programmatic SAAS to. This ownership of data allows us to help cross-sell any brand we acquire or launch. Logistical Expertise.

We seek to take advantage of this opportunity to bring on additional brands and talent that, for better or worse, were overwhelmed and unprepared. 9 Table of Contents Competition There is heavy competition in the aggregation market, but each company seems to be trying to carve their own niche in the space.

We seek to take advantage of this opportunity to bring on additional brands and talent that, for better or worse, were overwhelmed and unprepared. 11 Table of Contents Competition There is heavy competition in the aggregation market, but each company seems to be trying to carve their own niche in the space.

Finally, the Federal Trade Commission is the agency that is vested with ensuring that all marketing claims for hemp products are truthful and non-misleading. 7 Table of Contents Our Products Upexi is a multi-faceted brand owner with established brands in the health, wellness, pet, beauty and other growing markets.

Finally, the Federal Trade Commission is the agency that is vested with ensuring that all marketing claims for hemp products are truthful and non-misleading. 9 Table of Contents Our Products Upexi is a multi-faceted brand owner with established brands in the health, wellness, pet, beauty and other growing markets.

The business has a growing list of publishers and advertisers who also utilize our technology to monetize their data, achieve better CPMs, and even increase their average order values. International expansion. Our primary focus has been on the US eCommerce market which, as mentioned, is forecasted to grow stronger than others.

The business has a growing list of publishers and advertisers who also utilize our technology to monetize their data, achieve better CPMs, and even increase their average order values. International expansion. Our primary focus has been on the U.S. eCommerce market which, as mentioned, is forecasted to grow stronger than others.

The date on which the Company qualifies as a ‘large accelerated filer’, as defined in section 240.12b-2(2) of title 46, Code of Federal Regulations, or any successor thereto. As an emerging growth company, we are exempt from Section 404(b) of the Sarbanes-Oxley Act of 2002.

The date on which the Company qualifies as a ‘large accelerated filer’, as defined in section 240.12b-2(2) of title 46, Code of Federal Regulations, or any successor thereto. 5 Table of Contents As an emerging growth company, we are exempt from Section 404(b) of the Sarbanes-Oxley Act of 2002.

Professionalism and Entrepreneurial Culture . Our professionalism and entrepreneurial culture foster highly dedicated employees who provide our customers with unsurpassed customer service.

Professionalism and Entrepreneurial Culture . Our professionalism and entrepreneurial culture fosters highly dedicated employees who provide our customers with unsurpassed customer service.

Employees The Company has 130 full-time employees working out of its headquarters in Clearwater Florida, its Henderson, Nevada, manufacturing facility, its offices and distribution warehouses in Southern, Florida and Los Angeles California or individuals’ home-based offices. 10 Table of Contents WHERE YOU CAN FIND MORE INFORMATION You are advised to read this Form 10-K in conjunction with other reports and documents that we file from time to time with the SEC.

Employees The Company has 95 full-time employees working out of its headquarters in Tampa Florida, its Henderson, Nevada, manufacturing facility, its offices and distribution warehouses in Southern Florida or individuals’ home-based offices. 12 Table of Contents WHERE YOU CAN FIND MORE INFORMATION You are advised to read this Form 10-K in conjunction with other reports and documents that we file from time to time with the SEC.

Online shopping trend is expected to grow 50 percent in the US in the next few years. Ecommerce sales there are forecast to increase by a whopping 50 percent from $907.9 billion in 2022 to $1.4 trillion in 2025.

Online shopping trends are expected to grow 50 percent in the U.S. in the next few years. eCommerce sales are forecast to increase by a whopping 50 percent from $907.9 billion in 2022 to $1.4 trillion in 2025.

We are able to expand our network, build new relationships, and sell branded products without added cost of advertising. 8 Table of Contents Retail Partnerships.

As a result, we are able to expand our network, build new relationships, and sell branded products without the added cost of advertising. 10 Table of Contents Retail Partnerships.

We operate in emerging industries with high growth trends and look to drive organic growth of our current brands. We focus on direct to consumer and Amazon brands that are scalable and have anticipated, high industry growth trends. Our goal is to continue to accumulate consumer data and build out a significant customer database across all industries we sell into.

We focus on direct to consumer and Amazon brands that are scalable and have anticipated, high industry growth trends. Our goal is to continue to accumulate consumer data and build out a significant customer database across all industries we sell into. The growth of our current customer database has been key to the year-over-year gains in sales and cash flow.

Consequently, the Company processes, develops, manufactures, and sells its products pursuant to the Farm Bill. CBD products manufactured and distributed by Upexi Inc. must also meet the requirements of the federal Food, Drug, and Cosmetic Act (“FDCA”) and the federal Food and Drug Administration’s (the “FDA”) regulations implementing the FDCA.

CBD products manufactured and distributed by Upexi Inc. must also meet the requirements of the federal Food, Drug, and Cosmetic Act (“FDCA”) and the federal Food and Drug Administration’s (the “FDA”) regulations implementing the FDCA.

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.

We have continued to manage these operations with our corporate focus moving towards other larger opportunities and investments for the future. In the United States, hemp products that are manufactured by Upexi are regulated by the U.S. Food and Drug Administration, the Federal Trade Commission, the United States Department of Agriculture (“USDA”), and various state agencies within the individual States.

We have continued to manage these operations with our corporate focus moving towards other larger opportunities and investments for the future. 8 Table of Contents In the United States, hemp products that are manufactured by Upexi are regulated by the U.S.

On April 1, 2022, the Company entered into a securities purchase agreement with the single investor to purchase 55% of the equity interest in Cygnet Online, LLC, a Delaware limited liability company, and agreements to enable the Company to purchase the remaining 45% over the following two years. 4 Table of Contents On September 1, 2023, the Company purchased the remaining 45% of Cygnet Online, LLC for $500,000 cash, 90,909 shares of the Company’s common stock and a $300,000 cash payment due on September 1, 2024.

We utilize our in-house, SaaS programmatic ad technology to help achieve a lower cost per acquisition and accumulate consumer data for increased cross-selling between our growing portfolio of brands. Upexi, Inc.

To drive additional growth, we have and will continue to acquire profitable Amazon and eCommerce businesses that can scale quickly and reduce costs through corporate synergies. We utilize our in-house SaaS programmatic ad technology to help achieve a lower cost per acquisition and accumulate consumer data for increased cross-selling between our growing portfolio of brands. Upexi, Inc.

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.

We shall continue to be deemed an emerging growth company until the earliest of: 1.

Item 1. Business General Overview As used in this current report and unless otherwise indicated, the terms “we”, “us” and “our” mean Upexi, Inc., unless otherwise indicated. Upexi is a multi-faceted brand owner with established brands in the health, wellness, pet, beauty and other growing markets.

Item 1. Business General Overview As used in this current report and unless otherwise indicated, the terms “we”, “us” and “our” mean Upexi, Inc., unless otherwise indicated.

To ensure compliance with this provision, Upexi requires all hemp products it manufactures and distributes to contain no more than 0.3% of all tetraydrocannabidiols not simply 9-delta. The Farm Bill also requires that Upexi only use hemp [manufacturers/producers] that are duly licensed under state law or pursuant to the regulations issued by the USDA.

Under the Farm Bill, all hemp products must contain no more than 0.3% of 9-delta-tetraydrocannabidiols (“9-delta”) on a dry weight basis. To ensure compliance with this provision, Upexi requires all hemp products it manufactures and distributes to contain no more than 0.3% of all tetraydrocannabidiols not simply 9-delta.

These exemptions are also available to us as a smaller reporting company that qualifies as a non-accelerated filer. 5 Table of Contents DESCRIPTION OF BUSINESS Our Company Upexi is a multi-faceted brand owner with established brands in the health, wellness, pet, beauty and other growing markets.

DESCRIPTION OF BUSINESS Our Company Upexi is a multi-faceted brand owner with established brands in the health, wellness, pet, beauty and other growing markets. We operate in emerging industries with high growth trends and look to drive organic growth of our current brands.

The Company’s fourteen active subsidiaries are as follows: · HAVZ, LLC, d/b/a/ Steam Wholesale, a California limited liability company o SWCH, LLC, a Delaware limited liability company o Cresco Management, LLC, a California limited liability company · Trunano Labs, Inc., a Nevada corporation · Infusionz, Inc., a Nevada corporation · Upexi Holding, LLC, a Delaware limited liability company o Upexi Pet Products, LLC, a Delaware limited liability company · Infusionz LLC (“Infusionz”), a Colorado limited liability company · Grove Acquisition Subsidiary, Inc.

The Company’s fifteen active subsidiaries are as follows: ☐ HAVZ, LLC, d/b/a/ Steam Wholesale, a California limited liability company o SWCH, LLC, a Delaware limited liability company o Cresco Management, LLC, a California limited liability company ☐ Trunano Labs, Inc., a Nevada corporation ☐ MW Products, Inc., a Nevada corporation ☐ Upexi Holding, LLC, a Delaware limited liability company o Upexi Pet Products, LLC, a Delaware limited liability company ☐ VitaMedica, Inc, a Nevada corporation ☐ Upexi Enterprise, 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 o E-Core Technology, Inc. a Florida corporation o Upexi Distribution Management LLC, a Delaware limited liability company ☐ Interactive Offers, LLC (“Interactive”), a Delaware limited liability company ☐ Cygnet Online, LLC (“Cygnet”), a Delaware limited liability company, 55% owned (100% owned as of September 1, 2023) Business Acquisitions On August 1, 2021, the Company completed an asset purchase agreement with Grove Acquisition Subsidiary, Inc., a Nevada corporation and wholly owned subsidiary of the Company, and the members of VitaMedica Corporation, a California corporation, to purchase all the assets and assume certain liabilities of VitaMedica.

Pursuant to the terms of the Infusionz Agreement, on July 1, 2020, the Company acquired 100% of the outstanding membership interests of Infusionz LLC, a Colorado limited liability company (“Infusionz”).

Business Divested On October 26, 2022, the Company executed a membership interest purchase agreement to sell 100% of the membership interests of Infusionz LLC, a Colorado limited liability company (“Infusionz”), included in the sale was all rights to Infusionz brands and the manufacturing of certain private label business. Infusionz was originally purchased by the Company in July of 2020.

As an initial matter, the hemp products manufactured and distributed by Upexi must meet the requirements of the Agricultural Improvement Act of 2018 (the “Farm Bill”). Under the Farm Bill, all hemp products must contain no more than 0.3% of 9-delta-tetraydrocannabidiols (“9-delta”) on a dry weight basis.

Food and Drug Administration, the Federal Trade Commission, the United States Department of Agriculture (“USDA”), and various state agencies within the individual States. As an initial matter, the hemp products manufactured and distributed by Upexi must meet the requirements of the Agricultural Improvement Act of 2018 (the “Farm Bill”).

The growth of our current database has been key to the year over year gains in sales and profits. To drive additional growth, we have and will continue to acquire profitable Amazon and eCommerce businesses that can scale quickly and reduce costs through corporate synergies.

Further bolstering growth, we have and will continue to acquire profitable Amazon and eCommerce businesses that can be scaled quickly and profitably while reducing costs through corporate synergies. Upexi’s Enterprise LLC operates two wholly subsidiaries; Cygnet and E-Core.

Removed

(the “Company”) is a Nevada corporation with fourteen active subsidiaries, including thirteen wholly owned subsidiaries and one subsidiary, Cygnet Online, LLC, a Delaware limited liability company, that is majority owned with 55% ownership by the Company.

Added

(the “Company”) is a Nevada corporation with fifteen active subsidiaries.

Removed

As of July 1, 2020, Trunano Labs, Inc. is a wholly owned subsidiary of Upexi Inc. Business Acquisitions On July 1, 2020, the Company entered into an Agreement and Plan of Merger with Infusionz LLC (the “Infusionz Agreement”) with the members of Infusionz LLC (the “Sellers”).

Added

On August 12, 2022, the Company completed an asset purchase agreement with GA Solutions, LLC, a Delaware limited liability company (“LuckyTail”), pursuant to which the Company acquired substantially all assets of LuckyTail. LuckyTail sells pet nail grinders and other pet products through various sales channels including some international sales channels.

Removed

On August 1, 2021, the Company completed an asset purchase agreement with Grove Acquisition Subsidiary, Inc., a Nevada corporation and wholly owned subsidiary of the Company, and the members of VitaMedica Corporation, a California corporation, to purchase all the assets and assume certain liabilities of VitaMedica.

Added

On October 31, 2022, the Company and its wholly owned subsidiary Upexi Enterprise, LLC, completed a securities purchase agreement to purchase the outstanding stock of E-Core Technology, Inc. d/b/a New England Technology, Inc. (“E-Core”), a Florida corporation.

Removed

The growth of our current customer database has been key to the year over year gains in sales and cash flow. To drive additional growth, we have and will continue to acquire profitable Amazon and eCommerce businesses that can scale quickly and reduce costs through corporate synergies.

Added

E-Core distributes non-owned branded products to national retail distributors and has branded products in the toy industry that E-Core sells direct to consumers through online sales channels and to national retail distributors.

Removed

We utilize our in-house, SaaS programmatic ad technology to help achieve a lower cost per acquisition and accumulate consumer data for increased cross-selling between our growing portfolio of brands.

Added

The divestiture of Infusionz and related private label manufacturing represents a strategic shift in our operations and will allow us to become a predominantly product distribution focused company for both our Company owned brands and non-owned brands.

Removed

The Company primarily conducts its business operations through the following subsidiaries: · HAVZ, LLC, d/b/a/ Steam Wholesale, a California limited liability company o SWCH, LLC, a Delaware limited liability company o Cresco Management, LLC, a California limited liability company · Trunano Labs, Inc., a Nevada corporation · Infusionz, Inc., a Nevada corporation · Upexi Holding, LLC, a Delaware limited liability company o Upexi Pet Products, LLC, a Delaware limited liability company · Infusionz LLC (“Infusionz”), a Colorado limited liability company · Grove Acquisition Subsidiary, Inc.

Added

Accordingly, the results of the business were classified as discontinued operations in our condensed statements of operations and excluded from both continuing operations and segment results for all periods presented. The Company has transferred Infusionz LLC corporate ownership and the information necessary to operate the business.

Removed

(“VitaMedica”), a Nevada corporation · Upexi Enterprise, 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 · Interactive Offers, LLC (“Interactive”), a Delaware limited liability company · Cygnet Online, LLC (“Cygnet”), a Delaware limited liability company, 55% owned We operate throughout our locations in the USA with operations in Florida, California, Nevada and Colorado through our various Brands and entities.

Added

On June 30, 2023, operations were still not transitioned, and the Buyer still had not cured the defaults dating back to December of 2022. The Company has notified the Buyer of the defaults and has notified the Buyer that all obligations and undertakings to the Buyer are terminated. On August 31, 2023, Upexi, Inc.

Removed

Upexi operates from our corporate location in Clearwater, Florida where direct to consumer and Amazon sales are driven by on-site and remote teams for all brands. The location also supports all the other locations with the accounting, corporate oversight, day to day finances and all business growth and management operating from this location.

Added

(the “Company”) entered into an Equity Interest Purchase Agreement (“EIPA”) pursuant to which the Company sold one hundred percent (100%) of the issued and outstanding equity (the “Interests”) of its wholly owned subsidiary Interactive Offers, LLC (“Interactive”) to Amplifyir Inc. (the “Buyer”).

Removed

VitaMedica operates mainly from our California location with product development, fulfillment and day to day operations from that location Interactive offers operate from its Florida office with day to day operations supported by various off site remote positions, and majority of the development team operating out of Portugal.

Added

The purchase price for the Interests was One Million Two Hundred Fifty Thousand Dollars ($1,250,000), subject to certain customary post-closing adjustments. In addition, the Buyer is obligated to pay the Company two-and one-half percent (2.5%) of certain advertising revenues of Interactive for a two-year period post-closing.

Removed

Cygnet Online operates from our South Florida location with a full on-site GMP warehouse and distribution center, including day to day operations of our Amazon liquidation business team with support of remote team members. 6 Table of Contents Lucky Tail operates from our Clearwater, Florida location with sales and marketing driven by on-site and remote teams that operate the Amazon sales strategy and daily business operations HAVZ, LLC, d/b/a/ Steam Wholesale operates manufacturing and/or distribution centers in Las Vegas, Nevada supporting our health and wellness products, including those products manufactured with hemp ingredients and our overall distribution operations.

Added

Accordingly, the results of the business were classified as discontinued operations in our statements of operations and excluded from both continuing operations and segment results for all periods presented. Emerging Growth Company Status We are an emerging growth company under the Jumpstart our Business Startups (JOBS) Act of 2012.

Removed

Added

(the “Company”) is a Nevada corporation and operates through fifteen active subsidiaries in the digital first brand business, Amazon and wholesale distribution, and customer insights businesses. Upexi specializes in acquiring, building, and growing digital first, omnichannel brands in high growth, high margin sectors such as health, wellness, pet, and beauty.

Added

Leveraging our in-house expertise and technology, we scale our brands with a consumer centric approach, tapping into our in-house core capabilities and market insights across our portfolio to foster innovation and accessibility. Our growing consumer database has been key to the year-over-year gains in sales and profits.

Added

Cygnet primarily sells products through Amazon with a focus on the wellness industry, while E-Core has historically focused on product liquidation of consumer electronics and luxury goods. Our Brands 6 Table of Contents Tytan Tiles is a growing brand in the children’s STEM toy category.

Added

The Brand is available in Walmart’s 3,900 stores, Sam’s Club, BJ’s, Target, and other select box retail locations. The brand also holds a Disney License for new children sets being sold into Amazon and DTC year end 2023. VitaMedica’s mission is to empower wellness journeys through science-based holistic natural health solutions.

Added

Through The Science of Natural Health® we believe in a world where everyone can take ownership of their health, happiness, and vitality. For over 25 years, VitaMedica clinician-originated nutraceuticals and cosmeceuticals have been recommended by thousands of doctors to serve millions of patients.

Added

VitaMedica’s sales model includes wholesale distribution through surgeons and med spas and direct to consumers through eCommerce and marketplaces. LuckyTail, where at-home care meets innovation.

Added

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. Lucky tails products consist of its flagship nail grinder and healthy all-natural pet supplements.

Added

At Cure Mushrooms, we have harnessed the extraordinary benefits of nature’s most powerful superfood: functional mushrooms. 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.

Added

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. 7 Table of Contents Moonwlkr Health is on a mission to elevate wellness through flavorful innovation.

Added

We are committed to providing innovative and nutritious gummy supplements that effortlessly integrate into your daily routine. Our formulations boast quality ingredients you can trust, paired with flavors that delight and inspire. With Moonwlkr Health, nourishing your body has never been so simple, delicious, and enjoyable. Join us in embracing a lifestyle of vitality, where wellness meets indulgence.

Added

The Farm Bill also requires that Upexi only use hemp [manufacturers/producers] that are duly licensed under state law or pursuant to the regulations issued by the USDA. Consequently, the Company processes, develops, manufactures, and sells its products pursuant to the Farm Bill.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

26 edited+1 added−19 removed115 unchanged

2022 filing

2023 filing

Biggest changeIf 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.

Biggest changeLiability for any of these issues could have a material adverse effect on our business, financial condition and results of operations. 19 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.

We expect competition continue to intensify following the recent passage of the Farm Bill. We believe the Company will be able to compete effectively because of the quality of our products and customer service. However, there can be no assurance that the Company will effectively compete with existing or future competitors.

We expect competition to continue to intensify following the recent passage of the Farm Bill. We believe the Company will be able to compete effectively because of the quality of our products and customer service. However, there can be no assurance that the Company will effectively compete with existing or future competitors.

Accordingly, if our cybersecurity systems and those of our contractors fail to protect against unauthorized access, sophisticated cyberattacks and the mishandling of data by our employees and contractors, our ability to conduct our business effectively could be damaged in a number of ways, including: 12 Table of Contents We may incur significant costs and require significant management resources to evaluate our internal control over financial reporting as required under Section 404 of the Sarbanes-Oxley Act, and any failure to comply or any adverse result from such evaluation may have an adverse effect on our stock price.

Accordingly, if our cybersecurity systems and those of our contractors fail to protect against unauthorized access, sophisticated cyberattacks and the mishandling of data by our employees and contractors, our ability to conduct our business effectively could be damaged in a number of ways, including: 14 Table of Contents We may incur significant costs and require significant management resources to evaluate our internal control over financial reporting as required under Section 404 of the Sarbanes-Oxley Act, and any failure to comply or any adverse result from such evaluation may have an adverse effect on our stock price.

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. 20 Table of Contents The shifting regulatory environment necessitates building and maintaining of 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. 21 Table of Contents The shifting regulatory environment necessitates building and maintaining of 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.

If we are unable to successfully compete with existing companies and new entrants to the market, our lack of competitive advantage will have a negative impact on our business and financial condition. 15 Table of Contents Unfavorable publicity or consumer perception of our products or similar products developed and distributed by other companies could have a material adverse effect on our reputation, which could result in decreased sales and fluctuations in our business, financial condition and results of operations.

If we are unable to successfully compete with existing companies and new entrants to the market, our lack of competitive advantage will have a negative impact on our business and financial condition. 16 Table of Contents Unfavorable publicity or consumer perception of our products or similar products developed and distributed by other companies could have a material adverse effect on our reputation, which could result in decreased sales and fluctuations in our business, financial condition and results of operations.

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. 19 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.

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. 20 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.

Our management may not be able to control costs in an effective or timely manner. The Company’s management has used reasonable efforts to assess, predict and control costs and expenses. However, the Company only has a brief operating history upon which to base those efforts.

Our management may not be able to control costs in an effective or timely manner. The Company’s management has made reasonable efforts to assess, predict and control costs and expenses. However, the Company only has a brief operating history upon which to base those efforts.

Our success also depends upon our ability to attract and retain numerous highly qualified employees. The loss of one or more members of our management team or other key employees or consultants could materially harm our business, financial condition, results of operations and prospects.

The failure to attract and retain key employees could hurt our business. Our success also depends upon our ability to attract and retain numerous highly qualified employees. The loss of one or more members of our management team or other key employees or consultants could materially harm our business, financial condition, results of operations and prospects.

In some cases, it may be difficult or impossible to detect third-party infringement or misappropriation of our intellectual property rights and proving any such infringement may be even more difficult. 11 Table of Contents We may not be able to effectively manage growth.

In some cases, it may be difficult or impossible to detect third-party infringement or misappropriation of our intellectual property rights and proving any such infringement may be even more difficult. 13 Table of Contents We may not be able to effectively manage growth.

This could negatively affect our ability to meet consumer demand for our products. Upon expiration or termination of these agreements, our competitors may be able to secure industrial hemp from our existing suppliers which will put the company at a competitive disadvantage in the market. Loss of key customers could harm our business.

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. 22 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.

As a result of the variability of these and other factors, our operating results in future quarters may be below the expectations of our stockholders. We are subject to the reporting requirements of US federal securities laws, which can be expensive.

Any instance of illness or negative side effects of ingesting industrial hemp-based products would have a material adverse effect on our business and operations. 17 Table of Contents We face substantial risk of product liability claims and potential adverse product publicity.

Any instance of illness or negative side effects of ingesting industrial hemp-based products would have a material adverse effect on our business and operations. We face substantial risk of product liability claims and potential adverse product publicity.

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. 21 Table of Contents 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. Item 1B. Unresolved Staff Comments None.

Increases in costs, disruption of supply or shortage of raw materials could harm our business. We may experience increases in the cost or a sustained interruption in the supply or shortage of raw materials. Any such an increase or supply interruption could materially negatively impact our business, prospects, financial condition and operating results.

We may experience increases in the cost or a sustained interruption in the supply or shortage of raw materials. Any such an increase or supply interruption could materially negatively impact our business, prospects, financial condition and operating results. We use various raw materials in our business including aluminum.

The consummation and integration of any acquired business, product or other assets into our Company may be complex and time consuming and, if such businesses and assets are not successfully integrated, we may not achieve the anticipated benefits, cost-savings or growth opportunities.

We expect to grow by acquiring relevant businesses, including other cannabis-related businesses. The consummation and integration of any acquired business, product or other assets into our Company may be complex and time consuming and, if such businesses and assets are not successfully integrated, we may not achieve the anticipated benefits, cost-savings or growth opportunities.

Failure to comply, or any adverse results from such 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.

Furthermore, these acquisitions and other arrangements, even if successfully integrated, may fail to further our business strategy as anticipated, expose our Company to increased competition or other challenges with respect to our products or geographic markets, and expose us to additional liabilities associated with an acquired business, technology or other asset or arrangement. 16 Table of Contents The failure to attract and retain key employees could hurt our business.

If, after this offering, we fail to satisfy the continuing listing requirements of NASDAQ, such as the corporate governance, stockholders’ equity or minimum closing bid price requirements, NASDAQ may take steps to delist our Common Stock.

Our failure to meet the continuing listing requirements of the NASDAQ Capital Market could result in a de-listing of our securities. If, after this offering, we fail to satisfy the continuing listing requirements of NASDAQ, such as the corporate governance, stockholders’ equity or minimum closing bid price requirements, NASDAQ may take steps to delist our Common Stock.

If our independent distributors fail to comply with applicable regulations, we could be subjected to claims of false advertising, misrepresentation, significant financial penalties, and/or costly mandatory product recalls and relabeling requirements with respect to our products, any of which could have a material adverse effect on our business, reputation, financial condition and results of operations. 18 Table of Contents We are subject to risks arising from the recent global outbreak of the COVID-19 coronavirus.

As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as our executive officers. 14 Table of Contents We are eligible to be treated as an “emerging growth company,” as defined in the JOBS Act, and a “smaller reporting company” within the meaning of the Securities Act, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies or smaller reporting companies will make our Common Stock less attractive to investors.

We are eligible to be treated as an “emerging growth company,” as defined in the JOBS Act, and a “smaller reporting company” within the meaning of the Securities Act, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies or smaller reporting companies will make our Common Stock less attractive to investors.

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.

The increased costs associated with operating as a public company will decrease our net income or increase our net loss and may require us to reduce costs in other areas of our business or increase the prices of our products.

We expect complying with these rules and regulations will substantially increase our legal and financial compliance costs and to make some activities more time-consuming and costly. 15 Table of Contents The increased costs associated with operating as a public company will decrease our net income or increase our net loss and may require us to reduce costs in other areas of our business or increase the prices 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.

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.

We use various raw materials in our business including aluminum. The prices for these raw materials fluctuate depending on market conditions and global demand for these materials and could adversely affect our business and operating results.

The prices for these raw materials fluctuate depending on market conditions and global demand for these materials and could adversely affect our business and operating results. Substantial increases in the prices for our raw materials increase our operating costs and could reduce our margins if we cannot recoup the increased costs through increased prices 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.

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. 17 Table of Contents 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.

Removed

The COVID-19 pandemic and the efforts to mitigate its impact may have an adverse effect on our business, liquidity, results of operations, financial condition and price of our securities.

Added

As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as our executive officers.

Removed

The pandemic involving the novel strain of coronavirus and related respiratory disease (which we refer to as COVID-19) and the measures taken to combat it, have had an adverse effect on our business. Public health authorities and governments at local, national and international levels have announced various measures to respond to this pandemic.

Removed

Some measures that directly or indirectly impact our business include: · voluntary or mandatory quarantines; · restrictions on travel; and · limiting gatherings of people in public places. We have undertaken measures in an effort to mitigate the spread of COVID-19 including limiting company travel and in-person meetings.

Removed

We also have enacted our business continuity plans, including implementing procedures requiring employees working remotely where possible which may make maintaining our normal level of corporate operations, quality controls and internal controls difficult. Notwithstanding these efforts, our results of operations have been adversely impacted by COVID-19 and this may continue.

Removed

Moreover, the COVID-19 pandemic has previously caused some temporary delays in the delivery of our inventory, although recently we are no longer experiencing such delays. In addition, the travel restrictions imposed as a result of COVID-19 have impacted our ability to visit customer and potential customers for sales presentations, which have been substituted with on-line conference calls.

Removed

Further, the COVID-19 pandemic and mitigation efforts have also adversely affected our customers’ financial condition, resulting in reduced spending for the products we sell.

Removed

As events are rapidly changing, we do not know how long the COVID-19 pandemic, or localized outbreaks or recurrences of COVID-19, and the measures that have been introduced to respond to COVID-19 will disrupt our operations or the full extent of that disruption.

Removed

Further, once we are able to restart normal operations doing so may take time and will involve costs and uncertainty. We also cannot predict how long the effects of COVID-19 and the efforts to contain it will continue to impact our business after the pandemic is under control.

Removed

Governments could take additional restrictive measures to combat the pandemic that could further impact our business or the economy in the geographies in which we operate. It is also possible that the impact of the pandemic and response on our suppliers, customers and markets will persist for some time after governments ease their restrictions.

Removed

These measures have negatively impacted, and may continue to impact, our business and financial condition as the responses to control COVID-19 continue. 13 Table of Contents A prolonged economic downturn, particularly in light of the COVID-19 pandemic, could adversely affect our business. Uncertain global economic conditions, in particular in light of the COVID-19 pandemic, could adversely affect our business.

Removed

Negative global and national economic trends, such as decreased consumer and business spending, high unemployment levels and declining consumer and business confidence, pose challenges to our business and could result in declining revenues, profitability and cash flow. Although we continue to devote significant resources to support our brands, unfavorable economic conditions may negatively affect demand for our products.

Removed

Substantial increases in the prices for our raw materials increase our operating costs and could reduce our margins if we cannot recoup the increased costs through increased prices for our products. Our failure to meet the continuing listing requirements of the NASDAQ Capital Market could result in a de-listing of our securities.

Removed

We expect complying with these rules and regulations will substantially increase our legal and financial compliance costs and to make some activities more time-consuming and costly.

Removed

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.

Removed

The recent outbreak of the COVID-19 coronavirus has spread across the globe and is impacting worldwide economic activity.

Removed

A pandemic, including COVID-19 or other public health epidemic, poses the risk that we or our employees, suppliers, manufacturers and other partners may be prevented from conducting business activities for an indefinite period of time, including due to the spread of the disease or shutdowns that may be requested or mandated by governmental authorities.

Removed

While it is not possible at this time to estimate the full impact that COVID-19 could have on our business, the continued spread of COVID-19 could disrupt our clinical trials, supply chain and the manufacture or shipment of our cyclodextrin products, and other related activities, which could have a material adverse effect on our business, financial condition and results of operations.

Removed

COVID-19 has also had an adverse impact on global economic conditions which could impair our ability to raise capital when needed.

Removed

While we have not yet experienced any disruptions in our business or other negative consequences relating to COVID-19, the extent to which the COVID-19 pandemic impacts our results will depend on future developments that are highly uncertain and cannot be predicted.

Item 2. Properties

Properties — owned and leased real estate

2 edited+1 added−0 removed1 unchanged

2022 filing

2023 filing

Biggest changeAvalon Blvd., Gardena, CA 90248 under a three year lease that will expire on September 30, 2024, a warehouse at 601 North Congress Ave, Suite 209 and 210, Delray Beach, FL 33445 under a five year lease that will expire September 30, 2026 and office space at 327 Plaza Real, Suite 2319, Boca Raton, FL 33432 under a three year, two month lease that will expire September 30, 2024.

Biggest changeAvalon Blvd., Gardena, CA 90248 under a three year lease that will expire on September 30, 2024 that is no longer in use, a warehouse at 601 North Congress Ave, Suite 209 and 210, Delray Beach, FL 33445 under a five year lease that will expire September 30, 2026 and office space at 327 Plaza Real, Suite 2319, Boca Raton, FL 33432 under a three year, two month lease that will expire September 30, 2024, which has been transferred in the sale of Interactive Offers as of September 1, 2023.

Item 2. Properties Our executive and corporate offices are located at 17129 US Highway North, Clearwater, FL 33764. We also maintain a warehouse located at 1710 Whitney Mesa Drive, Henderson, NV 89014 under a month-to-month agreement, a warehouse at 1051 Mary Crest Rd.

We also maintain a warehouse located at 17129 US Highway North, Clearwater, FL 33764, which is owned by the Company, a warehouse located at 1710 Whitney Mesa Drive, Henderson, NV 89014 under a month-to-month agreement, a warehouse at 1051 Mary Crest Rd.

Added

Item 2. Properties Our executive and corporate offices are located at 3030 North Rocky Point Drive, Suite 420, Tampa, Florida 33607.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+9 added−1 removed9 unchanged

2022 filing

2023 filing

Biggest changeFourth Quarter Third Quarter Second Quarter First Quarter Fiscal 2022: High $ 5.99 $ 5.17 $ 9.36 $ 7.40 Low 3.90 3.93 3.84 3.86 Fiscal 2021: High $ 7.79 $ - $ - $ - Low 2.81 - - - 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 changeFourth Quarter Third Quarter Second Quarter First Quarter Fiscal 2023: High $ 4.55 $ 4.94 $ 5.70 $ 6.08 Low 2.04 2.53 2.70 3.68 Fiscal 2022: High $ 5.99 $ 5.17 $ 9.36 $ 7.40 Low 3.90 3.93 3.84 3.86 23 Table of Contents 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.

Accordingly, you may need to sell your shares of our Common Stock to realize a return on your investment, and you may not be able to sell your shares at or above the price you paid for them.

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.

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.

Holders of Record There were approximately 3,487 holders of record of the Company’s common stock on June 30, 2022. 22 Table of Contents 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.

Holders of Record There were approximately 4,152 holders of record of the Company’s common stock on June 30, 2023. 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.

In July of 2021, the Company issued 35,000 shares of common stock for a consulting agreement. The shares were valued at $175,000 or $5.00 per share, based on the price of the services to be rendered. The shares were issued for services from a consultant pursuant to a consulting agreement.

The shares were valued at $175,000 or $5.00 per share, based on the price of the services to be rendered. The shares were issued for services from a consultant pursuant to a consulting agreement.

Removed

Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities In June of 2021, the Company issued 274,330 shares of common stock pursuant to convertible notes that automatically converted when the Company completed its initial public offering. The total of the notes and accrued interest was $1,028,740. The funds were used for working capital.

Added

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”).

Added

The plan grants incentives to select persons who can make, are making and continue 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.

Added

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”).

Added

The Committee has full authority to administer and interpret the provisions of the 2019 Plan including, but not limited to, the authority to make all determinations with regard to the terms and conditions of an award made under the 2019 Plan.

Added

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 10,000,000 Shares.

Added

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

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 10,000,000 $ 3.31 4,648,624 Total 10,000,000 $ 3.31 4,648,624 24 Table of Contents Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities In July of 2021, the Company issued 35,000 shares of common stock for a consulting agreement.

Added

In October of 2022, the Company issued 1,247,403 shares of common stock for the acquisition of E-Core Technologies Inc. a Florida corporation, valued at $6,000,000 or 4.81 per common share. In February of 2023, the Company issued 134,000 shares of common stock for prepayment of interest on a note payable.

Added

The shares were valued at $607,020 or $4.52 per common share and recorded as prepaid interest as the shares were issued at that time. In September of 2023, the Company issued 90,909 shares of common stock for the purchase of the remaining 45% of Cygnet Online, LLC. The shares were valued at $162,727 or $1.79 per common share.

Item 7. Management's Discussion & Analysis

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

28 edited+38 added−26 removed22 unchanged

2022 filing

2023 filing

Biggest changeLiquidity and Capital Resources Working Capital As of June 30, 2022 As of June 30, 2021 Current assets $ 17,061,622 $ 18,293,083 Current liabilities $ 10,127,748 $ 5,819,161 Working capital $ 6,933,874 $ 12,473,922 Cash Flows Years Ended June 30, 2022 2021 Cash flows provided by operating activities $ 521,872 $ 2,939,306 Cash flows used in investing activities (11,606,021 ) (1,281,007 ) Cash flows provided by financing activities 3,699,744 11,988,395 Net increase (decrease) in cash during period $ (7,384,405 ) $ 13,646,694 25 Table of Contents On June 30, 2022, the Company had cash of $7,149,806 or a decrease of $7,384,405 from June 30, 2021.

Biggest changeFor the year ended June 30, 2023: Branded Products Recommerce Total Revenue $ 26,526,385 $ 54,150,124 $ 80,676,509 Loss from operations $ (6,945,411 ) $ (606,596 ) $ (7,552,007 ) Other (expense) $ (10,378,183 ) $ (541,305 ) $ (10,919,488 ) Depreciation expense $ 944,704 $ - $ 944,704 Income tax benefit $ 3,049,293 $ - $ 3,049,293 Segment assets: Additions to property, plant, and equipment $ 1,078,264 $ - $ 1,078,264 Total assets $ 28,588,365 $ 35,264,702 $ 63,853,067 Liquidity and Capital Resources Working Capital As of June 30, 2023 As of June 30, 2022 Current assets $ 25,455,714 $ 17,061,622 Current liabilities $ 19,606,010 $ 10,127,748 Working capital $ 5,849,291 $ 6,933,874 28 Table of Contents Cash Flows Years Ended June 30, 2023 2022 Cash flows provided by operating activities – continuing operations $ 517,697 $ 715,150 Cash flows used in investing activities – continuing operations (2,574,858 ) (10,903,318 ) Cash flows used in financing activities – continuing operations (285,333 ) 3,699,744 Cash flows used by operating activities – discontinued operations (315,021 ) (895,981 ) Cash flows provided by (used by) investing activities – discontinued operations - - Cash flows provided by (used by) financing activities – discontinued operations - - Net decrease in cash during the period $ (2,657,515 ) $ (7,384,405 ) On June 30, 2023, the Company had cash of $4,492,291 or a decrease of $2,657,515 from June 30, 2022.

The Company received $6,678,506 for a Convertible Notes in the original principal amount of $7,500,000 (the “Convertible Notes”), representing the original purchase amount, less fees, costs and a $500,000 holdback by the investors. In addition to the Convertible Notes, the investors received Common Stock Purchase Warrants (the “Warrants”) to acquire an aggregate of 56,250 shares of common stock.

The Company received $6,678,506 for Convertible Notes in the original principal amount of $7,500,000 (the “Convertible Notes”), representing the original purchase amount, less fees, costs and a $500,000 holdback by the investors. In addition to the Convertible Notes, the investors received Common Stock Purchase Warrants (the “Warrants”) to acquire an aggregate of 56,250 shares of common stock.

That expense will be recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period) or immediately if the share-based payments vest immediately. 28 Table of Contents Inventory - The Company reviews the inventory level of all products and raw materials quarterly.

That expense will be recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period) or immediately if the share-based payments vest immediately. Inventory - The Company reviews the inventory level of all products and raw materials quarterly.

For the year ended June 30, 2022, the use of cash was primarily related to the investment of $5,457,545 in three acquisitions, $4,515,735 for the purchase of a building in Clearwater Florida and the related remodel of the acquired building and the $1,638,741 acquisition of equipment.

Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” or in other parts of this Annual Report on Form 10-K. See also “Cautionary Note Regarding Forward-Looking Statements” above.

The Company performed its annual test as of June 30, 2022. No impairment charge was identified in connection with the annual goodwill impairment test Revenue Recognition - The Company analyzes its contracts and purchase orders to assess that revenue is properly recognized.

No impairment charge was identified in connection with the annual goodwill impairment test Revenue Recognition - The Company analyzes its contracts and purchase orders to assess that revenue is properly recognized.

We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of certain assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions.

Shipping and handling fees associated with freight are generally included in cost of revenue. Impairment of Long-lived Assets - Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable. The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment.

Shipping and handling fees billed to customers are included in revenue. Shipping and handling fees associated with freight are generally included in cost of revenue. Impairment of Long-lived Assets - Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable.

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.

See also “Cautionary Note Regarding Forward-Looking Statements” above. 25 Table of Contents 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.

We have identified below the accounting policies, related to what we believe are most critical to our business operations and are discussed throughout Management’s Discussion and Analysis of Financial Condition or Plan of Operation where such policies affect our reported and expected financial results.

Actual results may differ from these estimates under different assumptions or conditions. 30 Table of Contents We have identified below the accounting policies, related to what we believe are most critical to our business operations and are discussed throughout Management’s Discussion and Analysis of Financial Condition or Plan of Operation where such policies affect our reported and expected financial results.

The Warrants are exercisable for five years at an exercise price of $4.44 per share, provide for customary anti-dilution protection, and an investor put right to require the Company to redeem the Warrants for a total of $250,000.

The Warrants are exercisable for five years at an exercise price of $4.44 per share, provide customary anti-dilution protection, and an investor put right to require the Company to redeem the Warrants for a total of $250,000. There was a loss of $3,540 for the change in the derivative liability for the period ended December 31, 2022.

For the year ended June 30, 2021 the consolidated financial statements of Upexi, Inc. include the accounts of the Company and its wholly-owned subsidiaries; Trunano Labs, Inc., a Nevada corporation, Infusionz, Inc. a Nevada corporation, Steam Distribution, LLC, a California limited liability company; One Hit Wonder, Inc., a California corporation; Havz, LLC, d/b/a Steam Wholesale, a California limited liability company, One Hit Wonder Holdings, LLC a California corporation; SWCH LLC, a Delaware limited liability company; Cresco Management LLC, a California limited liability company, and Infusionz LLC, a Colorado limited liability company.

For the year ended June 30, 2022, the consolidated financial statements of Upexi, Inc. include the accounts of the Company and its wholly-owned subsidiaries; Trunano Labs, Inc.; a Nevada corporation, Steam Distribution, LLC, a California limited liability company; MW Products Inc. a Nevada corporation, One Hit Wonder, Inc., a California corporation; One Hit Wonder Holdings, LLC a California corporation; SWCH LLC, a Delaware limited liability company; Cresco Management LLC, a California limited liability company; VitaMedica d/b/a/ Grove Acquisition Subsidiary, Inc. a Nevada corporation as of August 1, 2021; and 55% Cygnet Online, LLC a Delaware limited liability corporation, as of April 1, 2022.

The decrease in cash was primarily used for investing in acquisition of new entities and the purchase of property and equipment. The Company financed some of the investment through financing activities.

The decrease in cash was primarily used for investing in the acquisition of new entities and the purchase of property and equipment. The Company financed some of the investment through financing activities. The net cash provided by operating activities was $517,697 and offset by cash used in discontinued operations of $315,021.

Stock Based Compensation - The Company recognizes all share-based payments to employees, including grants of employee stock options, as compensation expense in the financial statements based on their fair values.

The Company did not recognize impairment on its long-lived assets during the years ended June 30, 2023, or 2022. Stock Based Compensation - The Company recognizes all share-based payments to employees, including grants of employee stock options, as compensation expense in the financial statements based on their fair values.

The Company does not accept sales returns from wholesale customers, as the products are pre-approved prior to production and shipment. E-Commerce product returns must be completed within 45 days of the date of purchase. The Company does not accrue for estimated sales returns as historical sales returns have been minimal.

Taxes collected from customers that are remitted to governmental agencies are accounted for on a net basis and not included as revenue. 31 Table of Contents The Company does not accept sales returns from wholesale customers, as the products are pre-approved prior to production and shipment. E-Commerce product returns must be completed within 45 days of the date of purchase.

The Company records deferred revenues when cash payments are received or due in advance of performance, including amounts which are refundable. Substantially all the deferred revenue as of June 30, 2021 was recognized as revenue in the year ended June 30, 2022. Shipping and handling fees billed to customers are included in revenue.

The Company does not accrue for estimated sales returns as historical sales returns have been minimal. The Company records deferred revenues when cash payments are received or due in advance of performance, including amounts which are refundable. Substantially all the deferred revenue as of June 30, 2022 was recognized as revenue in the year ended June 30, 2023.

Under this guidance, annual or interim goodwill impairment testing is performed by comparing the estimated fair value of a reporting unit with its carrying amount. An impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the carrying value of goodwill.

An impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the carrying value of goodwill. The Company performed its annual test as of June 30, 2023.

The Company recognizes revenue at the point in time that control of the ordered product is transferred to the customer, which is upon shipment to the customer or other customer-designated delivery point. Taxes collected from customers that are remitted to governmental agencies are accounted for on a net basis and not included as revenue.

For the year ended June 30, 2022, 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, 2021, and include the subsidiaries in which the Company holds a controlling financial interest as of June 30, 2022, which include Grove Acquisition Subsidiary, Inc. d/b/a/ VitaMedica a Nevada corporation as of August 1, 2021, Interactive Offers, LLC a Delaware limited liability corporation as of October 1, 2021 and Cygnet Online, LLC a Delaware limited liability corporation, as of April 1, 2022.

For the year ended June 30, 2023, 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, 2022, and include the subsidiaries in which the Company holds a controlling financial interest as of June 30, 2023, which include E-Core Technology, Inc. d/b/a New England Technology, Inc. as of October 21, 2022.

As of June 30, 2021, all of these notes have been converted to common stock. 26 Table of Contents During June 2022, the Company entered into a Securities Purchase Agreement with two accredited investors pursuant to which the Company could receive up to $15,000,000 during the following twelve months of the agreement.

This note was fully repaid in April of 2023. In June 2022, the Company entered into a securities purchase agreement with two accredited investors pursuant to which the Company could receive up to $15,000,000 during the following twelve months of the agreement.

When impairment indicators exist, the Company estimates the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether or not the asset values are recoverable. The Company did not recognize impairment on its long-lived assets during the years ended June 30, 2022, or 2021.

The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the Company estimates the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether or not the asset values are recoverable.

These product sales are aggregated and viewed by management as one reportable segment due to their similar economic characteristics, products, production, distribution processes and regulatory environment.

Non-GAAP Measures (unaudited) Reconciliation of Non-GAAP Adjusted EBITDA to GAAP Net Income (Net Loss) Year Ended June 30, 2022 2021 Net income (Net loss) GAAP $ (2,046,030 ) $ 2,978,948 Income tax (518,398 ) (1,282,815 ) Interest expense, net 215,300 530,449 Depreciation and amortization 2,733,455 1,030,021 Stock compensation 2,755,016 611,432 Stock issued for services 576,774 127,500 Change in derivative liability 3,293 - Gain on lease settlement - (387,860 ) Gain on SBA PPP loan f orgiveness (300,995 ) (403,277 ) Gain on sale of asset (5,500 ) (8,708 ) Non-GAAP adjusted EBITDA $ 3,412,915 $ 3,195,690 Use of Non-GAAP Financial Measures The Company discloses and uses the above-mentioned non-GAAP financial measures internally as a supplement to GAAP financial information to evaluate its operating performance, for financial planning purposes, to establish operational goals, for compensation plans, to measure debt service capability, for capital expenditure planning and to determine working capital needs and believes that these are useful financial measures also used by investors.

Non-GAAP Measures (unaudited) Reconciliation of Non-GAAP Adjusted EBITDA to GAAP Net Income (Net Loss) Year Ended June 30, 2023 2022 Net income (Net loss) GAAP $ (16,930,289 ) $ (2,100,850 ) Income tax (3,049,293 ) (518,398 ) Interest expense, net 4,761,903 202,120 Depreciation and amortization 5,153,695 1,554,297 Stock compensation 3,664,538 3,331,586 Loss on the sale of Infusionz and select assets 2,212,542 - Change in derivative liability (1,770 ) 3,293 Loss (gain) on discontinued operations 2,068,054 (3,823,621 ) Gain on SBA PPP loan forgiveness - (300,995 ) (Loss) income attributable to non-controlling interest (559,967 ) 54,820 Lease impairment, California facility 200,512 - Gain on sale of asset - (5,500 ) Impairment of Intangible assets 3,746,301 - Non-GAAP adjusted EBITDA $ 1,266,226 $ (1,603,248 ) 32 Table of Contents Use of Non-GAAP Financial Measures The Company discloses and uses the above-mentioned non-GAAP financial measures internally as a supplement to GAAP financial information to evaluate its operating performance, for financial planning purposes, to establish operational goals, for compensation plans, to measure debt service capability, for capital expenditure planning and to determine working capital needs and believes that these are useful financial measures also used by investors.

The excess of (i) the total costs of acquisition over (ii) the fair value of the identifiable net assets of the acquiree is recorded as identifiable intangible assets and goodwill. 27 Table of Contents Goodwill - The Company evaluates its goodwill for possible impairment, simplifying the test for goodwill Impairment at least annually and when one or more triggering events or circumstances indicate that the goodwill might be impaired.

Goodwill - The Company evaluates its goodwill for possible impairment, simplifying the test for goodwill Impairment at least annually and when one or more triggering events or circumstances indicate that the goodwill might be impaired. Under this guidance, annual or interim goodwill impairment testing is performed by comparing the estimated fair value of a reporting unit with its carrying amount.

For the year ended June 30, 2021, cash of $62,122 was provided from the acquisition of Infusionz, Inc., $1,422,129 was used to purchase equipment and $79,000 from the sale of property and equipment. Net cash flows provided by financing activities for the year ended June 30, 2022, was $3,699,744 compared to $11,988,395 for the year ended June 30, 2021.

Net cash flows used in financing activities for the year ended June 30, 2023, was $285,333 compared to $3,699,744 provided in the year ended June 30, 2022.

All intercompany accounts and transactions have been eliminated as a result of the consolidation. Operating Segments The Company’s financial reporting is organized into only one segment, product sales.

All intercompany accounts and transactions have been eliminated as a result of the consolidation. Key Factors Affecting Operating Results Cyclicality and Seasonality Our business can be affected by seasonality, which historically has resulted in higher sales volume during our second quarter, which ends December 31. Operating Segments The Company’s financial reporting is organized into two segments: Branded Products and Recommerce.

Transaction costs directly attributable to the acquisition are expensed as incurred.

Transaction costs directly attributable to the acquisition are expensed as incurred. The excess of (i) the total costs of acquisition over (ii) the fair value of the identifiable net assets of the acquiree is recorded as identifiable intangible assets and goodwill.

Net cash used in investing activities for the years ended June 30, 2022, and 2021 was $11,606,021 and $1,281,007, respectively.

The losses were also offset by an increase in liabilities of $3,312,604 and a decrease of $1,905,234 in current assets. Net cash used in investing activities for the years ended June 30, 2023, and 2022 was $2,574,858 and $10,903,318, respectively.

Removed

The Company’s internal reporting for product sales is organized into three channels of distribution: Upexi, Inc. branded products, manufacturing of products to be sold under customers brands and white label products that are sold under customer brands.

Added

Infusionz LLC, a Colorado limited liability company, along with select CBD asset; and Interactive Offers, LLC a Delaware limited liability corporation have been classified as discontinued operations for the years ended June 30, 2023 and 2022, 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, 2023 and 2022.

Removed

Results of Operations Year Ended June 30, 2022, as compared to June 30, 2021: The following summary of our results of operations should be read in conjunction with our consolidated financial statements for the years ended June 30, 2022, and 2021, which are included herein.

Added

Results of Operations Year Ended June 30, 2023, as compared to June 30, 2022: The following summary of our results of operations should be read in conjunction with our consolidated financial statements for the years ended June 30, 2023, and 2022, which are included herein. 26 Table of Contents June , 2023 2022 Change Revenue $ 80,676,509 $ 23,065,344 $ 57,611,165 Cost of revenue $ 47,118,189 $ 8,195,734 $ 38,922,455 Sales and marketing expenses $ 10,376,003 $ 5,116,868 $ 5,259,135 Distribution costs $ 12,369,903 $ 2,214,322 $ 10,155,581 General and administrative expenses $ 9,546,188 $ 9,141,667 $ 404,521 Other operating expenses $ 8,818,233 $ 4,885,883 $ 3,932,350 Other (expense) income $ (10,919,488 ) $ 101,082 $ (11,020,570 ) Net (loss) income attributable to non-controlling interest $ 559,967 $ (54,820 ) $ 614,787 Discontinued operations $ (2,068,054 ) $ 3,823,621 $ (5,891,675 ) Net loss attributable to Upexi, Inc. $ (16,930,289 ) $ (2,100,850 ) $ (14,182,442 ) Revenues increased by $57,611,165 or 250% for the fiscal year ended June 30, 2023, compared with the fiscal year ended June 30, 2022. $41,041,341 or 71% of the increase was related to the acquisitions of the LuckyTail brand and E-Core Technology, Inc.

Removed

June 30, 2022 2021 Change Revenue $ 44,584,996 $ 24,095,025 $ 20,489,971 Cost of revenue 19,396,123 12,196,123 7,200,000 Operating Expenses 27,841,203 10,472,165 17,369,038 Other expense (income), net (87,902 ) (269,396 ) 181,494 Net income (loss) $ (2,046,030 ) $ 2,978,948 $ (5,024,978 ) 24 Table of Contents Revenues increased by $20,489,971 or 85% for the fiscal year ended June 30, 2022, compared with the fiscal year ended June 30, 2021. $14,950,919 or 73% of the increase was related to the acquisition of VitaMedica, Interactive and Cygnet and $5,539.052 or 23% was related to the core business compared to the prior year period.

Added

(“2023 acquisitions”) during 2023 and $18,848,230 or 33% was related to the acquisitions of Cygnet Online, LLC and VitaMedica, Inc. (“2022 acquisitions”) compared to the prior year period. This was offset by a decline in other businesses of $2,278,475 or 4%.

Removed

The core business increase was related to increased manufacturing and the Company’s own brands increased direct to consumer sales. Management expects revenue to increase in the 2023 fiscal year through both organic growth of the core business, acquisitions completed during the 2022 fiscal year and additional strategic acquisitions that align with managements long-term growth strategies.

Added

Our primary brands of VitaMedica, LuckyTail and newly acquired Tytan Tiles all had significant growth year over year and management will continue to focus on these high margin and growth potential business in 2024 and beyond.

Removed

Cost of revenue increased by $7,200,000 or 59% compared with the prior year. $6,827,937 was related to the acquisition of VitaMedica, Interactive and Cygnet and $372,063 was related to the core business. The gross profit margin improved 7% to 56%, compared to the prior year gross profit margin of 49%.

Added

The recommerce businesses, E-Core Technology, Inc. and Cygnet Online, LLC, continue to represent a significant portion of the overall revenue of the Company, although we did see lower than expected sales volume from our Amazon sales channels. Management expects revenue to continue to increase in the 2024 fiscal year with a primary focus on growing our branded products.

Removed

The gross profit of the core business improved 9% to 58% compared to the prior year. The gross margin improvement for the core business was primarily related to the consolidation of manufacturing, additional equipment purchased during the year, efficiency improvement in the manufacturing process and an increase in direct-to-consumer sales.

Added

Cost of revenue increased by $38,922,455 or 475% compared with the fiscal year ended June 30, 2022. $31,144,149 or 80% of the increase was related to the 2023 acquisitions and $8,640,033 or 22% was related to the 2022 acquisitions. The gross profit increased by $18,688,710.

Removed

Management expects to continue to improve gross margins as the Company consolidates acquisitions and control direct costs. Operating expenses increased by $17,369,038 or 166% compared with the prior fiscal year. $7,834,649 was related to the sales, marketing and general administrative expenses of the acquisition of VitaMedica, Interactive and Cygnet.

Added

The gross profit margin declined by 22% to 42% compared to 64% in the prior year. The decline in gross profit margin was primarily related to the sales from the recommerce business versus the sales of our branded products.

Removed

The core business sales and marketing increased by $2,269,751 due to the increased spending on marketing of direct-to-consumer products and the growth of the sales and marketing team to support the current and expected future sales and product growth. The core business general and administrative expenses increased $2,841,050 due to increased infrastructure, acquisition costs and employee related costs.

Added

Management expects the gross margin to improve as the branded products segment continues to grow as a percentage of the overall sales and as we continue to gain economies of scale in our purchasing of products.

Removed

The core business, non-cash expenses of share-based compensation, amortization and depreciation, increased $4,423,588. The Company’s management is continuing to control operating expenses while also implementing management growth strategies. Other expense (income), net increased by $181,494 or 67% compared with the prior fiscal year.

Added

Sales and marketing expenses increased by $5,259,135 or 103% compared with the same period last year. $2,396,876 or 46% of the increase was related to the 2023 acquisitions and $1,373,733 or 26% was related to the 2022 acquisitions. There was an increase of $1,488,526 or 28% related to the other business.

Removed

There was a decrease in interest expense of approximately $315,149 which was offset by a decrease of $102,282 related to the gain on the forgiveness of the SBA PPP loan and the gain on the settlement of a canceled lease for the year ended June 30, 2021.

Added

The increase in sales and marketing expenses was primarily related to the acquisitions and increased expenditures for brand and company awareness, however management has aligned the marketing expenditures with the expected growth strategy to decrease the overall percentage of sales and marketing costs to sales.

Removed

The Company had net loss of $2,046,030 compared to net income of $2,978,948 for the prior year. The change in net income primarily related to the $745,042 change of income tax benefit compared to the prior year and a $4,423,588 increase in non-cash expenses.

Added

We anticipate our advertising expenses will continue to fluctuate in the following quarters as we fully implement our overall brand marketing strategy.

Removed

The net cash provided by operating activities of $521,872 was primarily from the $2,046,030 net loss, the $2,447,038 increase in inventory, $629,153 increase to deferred revenue and offset by $5,874,087 of non-cash expenses and $229,994 of other net changes in assets and liabilities.

Added

Distribution costs increased $10,155,581 or 459% compared with the same period last year. $1,850,306 or 18% of the increase was related to the 2023 acquisitions and $7,306,309 or 72% of the increase was related to the 2022 acquisitions and the rest of the business. There continue to be increases in transportation costs and third-party provider rates.

Removed

The Company had proceeds of $6,678,506 from a convertible note and used $1,975,888 for the repurchase of the Company’s common stock and $1,002,874 in the repayment of debt. During October of 2019, the Company entered into convertible promissory notes (the “October 2019 Notes”) for total proceeds of $1,500,000.

Added

Management has implemented a strategy to change promotions, increase prices and adjust packaging to decrease the overall percentage of distribution costs to sales and is in process of consolidating its distribution centers, including closing the California facility as of July 1, 2023. General and administrative expenses increased by $404,521 or 4% compared with the same period last year.

Removed

The principal and interest of the October 2019 Notes are payable in full at the maturity date of April 2021, if not previously converted.

Added

General and administrative expenses increased by $2,332,690 from 2023 acquisitions with the remainder of the business had a decrease in general and administrative expenses of $1,928,169. Management has actively been reducing general and administrative costs by consolidation of administrative functions and capitalizing on the overall size of the Company.

Removed

The October 2019 Notes have an interest rate of 8%, total accrued interest is to be repaid at maturity, and are convertible into common stock if the Company enters an initial public offering arrangement which results in the Company’s common stock becoming listed or trading.

Added

Management will continue to implement strategies to decrease the percentage of general and administrative costs when compared to total sales. Other operating expenses increased by $3,932,350 or 80% compared with the same period last year.

Removed

The conversion rate was set at $5.00 which is equal to the price of the Company’s common stock sold in the prospectus. On June 29, 2021, the Company issued 348,309 shares of the Company’s common stock for the full payment of principal and interest of these loans.

Added

These expenses are primarily non-cash and increase based on the intangible assets created with acquisitions and the continued amortization of stock compensation. $1,612,815 or 41% was related to the 2023 acquisitions amortization of acquired intangible assets and $1,616,188 or 41% of the increase was related to the 2022 acquisitions amortization of acquired intangible assets.

Removed

On April 28, 2020, the Company entered a Paycheck Protection Program loan for $398,945 in connection with COVID-19. The loan and accrued interest amounted to $403,277 which was forgiven on June 11, 2021 and recognized as a gain on the extinguishment of debt. On May 13, 2020, Infusionz entered a Paycheck Protection Program loan for $297,100 in connection with COVID-19.

Added

The remaining increase of $703,347 was related to increases in stock-based compensation and depreciation. 27 Table of Contents Other expenses increased by $11,020,570, which was primarily the loss recognized on the sale of Infusionz and select CBD assets, the reserves against amounts owed to the Company by the buyers of that business, the impairment of Interactive Offers intangible assets and an increase of interest expense from both acquisition debt and the termination of a $15,000,000 senior secured debt facility on October 1, 2022.

Removed

The loan is classified as a current liability on the balance sheet on June 30, 2021. The loan and accrued interest amounted to $300,995 and was forgiven on August 30, 2021. On June 3, 2020, the Company entered a loan for $150,000 with the Small Business Administration.

Added

Management estimates based on the current and expected debt balances in fiscal year 2024 that interest expense will be less than $2,800,000 and cash paid for interest expense to be less than $1,400,000. The Company had a net loss of $16,930,289 compared to a net loss of $2,100,850 in the prior year.

Removed

The promissory note as a fixed payment schedule commencing on June 3, 2021, consisting of principal and interest payments of $731 monthly. The balance of the principal of $150,000 and interest of $6,876 was paid on August 30, 2021 and classified as a current liability on the balance sheet at June 30, 2021.

Added

The decrease in the net losses primarily related to the above-mentioned changes, which was offset by the net loss attributable to non-controlling interest of our consolidated subsidiary. Operating Segments The Company’s financial reporting is organized into two segments: Our Branded Product segment and our Recommerce segment.

Removed

During December 2020, the Company entered into a note agreement for total proceeds of $750,000 with the Chief Executive Officer of the Company, a related party. The principal and interest of the note is payable was repaid during the year ended June 30, 2021.

Added

Our Branded Product segment is focused on the development, growth and distribution of the branded products that we own. Our Recommerce segment is focused on the purchase and sale of new and used products through channels such as Amazon and wholesale distributors.

Removed

During the year ended June 30, 2021, the Company entered into convertible promissory notes (the “March 2021 Notes”) for total proceeds of $1,000,080. The term of the March 2021 Notes is two years and bear interest at a rate 8% per annum, compounded annually.

Added

Other sources of revenue and related costs are aggregated and viewed by management as immaterial or have similar economic characteristics, products, production, distribution processes and regulatory environment as the other product sales. Segment Information The Company provides the following segments: (a) branded product segment and (b) product distribution segment.

Removed

The principal amount and accrued interest of the March 2021 Notes are automatically converted into capital stock of the company upon an initial public offering by the Company at a rate of seventy five percent of the initial public offering price of the shares of capital stock of the Company sold in the initial public offering.

Added

The loss of $16,284,292 was offset by the non-cash expenses of $5,153,695 depreciation and amortization, impairment of goodwill and identifiable intangible assets, $3,664,538 amortization of stock compensation, $2,212,542 of non-cash loses for the sale of Infusionz $969,098 amortization of consideration discount offset by $3,785,224 changes in deferred tax asset.

Removed

The Company has the option until June 28, 2023, to draw down up to an additional $7,500,000 of Convertible Notes under the Securities Purchase Agreement to provide financing for acquisitions, pursuant to certain underwriting conditions set forth in the Securities Purchase Agreement. The Company is subject to customary covenants, financial and otherwise, under the Securities Purchase Agreement.

Added

For the year ended June 30, 2023, cash of $7,129,826 was used for two new acquisitions and payment related to prior year acquisitions and $937,564 for the acquisition of property and equipment and improvements to the building purchased in 2022. This was partially paid for with the $5,492,532, net cash received for the sale of Infusionz and select CBD assets.

Removed

In December 2019, a novel strain of coronavirus (COVID-19) surfaced. The spread of COVID-19 around the world has caused significant volatility in U.S. and international markets.

Added

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.

Removed

There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the US and international economies and, as such, the Company has transition to a combination of work from home and social distancing operations and there has been minimal impact to our internal operations from the transition.

Added

The newly issued debt was primarily used to repay the senior convertible note payable and the line of credit.

Removed

The Company is unable to determine if there will be a material future impact to its customers’ operations and ultimately an impact to the Company’s overall revenues.

Added

On April 15, 2022, the Company entered into a non-negotiable convertible promissory note in the original principal amount of $1,050,000, as adjusted, (“Cygnet Note”) which can be converted into common stock of the Company at a price of $6.00 per share and is payable in full, to the extent not previously converted, on April 15, 2023.

… 12 more changes not shown on this page.

Top changes in UPEXI, INC.'s 2023 10-K

Item 1. Business

Item 1A. Risk Factors

Item 2. Properties

Item 5. Market for Registrant's Common Equity

Item 7. Management's Discussion & Analysis

Other UPXI 10-K year-over-year comparisons