EXHIBIT 99.1

 

 

 

Upexi Revenue Increases 199% Year-Over-Year to

$11.6 Million for Fiscal 2023 First Quarter

   

HENDERSON, NV, November 14, 2022 (GLOBE NEWSWIRE) – Upexi, Inc. (NASDAQ: UPXI) (the “Company” or “Upexi”), a multi-faceted Amazon and Direct to Consumer brand owner and innovator in aggregation, today announced its financial results for the fiscal 2023 first quarter ending September 30, 2022.

 

Fiscal 2023 First Quarter Financial Highlights:

 

·

Revenue totaled $11.6 million, an increase of 199% year-over-year.

 

·

Gross profit totaled $6 million, an increase of 132% year-over-year.

 

·

Gross profit margin was 52%.

 

·

Net loss from continued operations was $2.7 million compared to net income of approximately $512,000 for the same period in the prior year.

 

·

Cash and cash equivalents totaled $3.3 million as of September 30, 2022.

 

“Our revenue growth year-over-year was predominantly driven by multiple accretive acquisitions. Moving forward, our growth strategy will continue to focus on both acquisitions and organic growth, while also expanding to international markets,” said Allan Marshall, Upexi’s Chief Executive Officer. “During the quarter we entered the more than $200 billion pet market through the acquisition of LuckyTail, a balanced business, with direct-to-consumer and Amazon distribution, and double-digit year-over-year growth. Going forward, our acquisition pipeline remains robust with valuations in line with our strategic guidelines. We have made significant strides over the last two years and the Company today is in the best position for growth and profitability in its history, with approximately $100 million in sales projected for calendar 2023.”

 

Fiscal 2023 First Quarter and Subsequent Operational Highlights:

 

·

Acquired international pet care brand, LuckyTail, Inc.

 

·

Saas ad-tech division, Interactive Offers, filed a patent for its single click-to-opt-in technology.

 

·

Closed on sale of select CBD assets for $23.5 million.

 

·

Closed on acquisition of E-Core and its subsidiaries, Tytan Products, a children’s toy brand and maker of popular magnetic tiles and building blocks, and New England Technology, Inc., a national distributor for branded consumer products.

 

·

Eliminated outstanding balance of $15 million senior secured debt facility with expectation to reduce annualized interest expense by approximately $900,000.

 

 
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Financial Highlights for Fiscal 2023 First Quarter

Revenue for the three months ended September 30, 2022 totaled $11.6 million, an increase of 199% as compared to $3.9 million for the same period the year prior. The revenue growth was primarily driven by four acquisitions, including VitaMedica, Interactive, Cygnet, and LuckyTail, and offset by the sale of Infusionz. The Company’s growth strategy will continue to focus on both acquisition and organic growth, while also expanding to international markets.

 

Cost of revenue during the quarter totaled $5.5 million, an increase of 334% as compared to $1.3 million for the same period the prior year. The cost of revenue increase was primarily related to the acquisition of four companies and offset with the sale of Infusionz.

 

Gross profit for the quarter was $6 million, an increase of $3.4 million compared to the same period in the prior year. Gross margins declined to 52% as a result of significant increases in lower margin sales to distributors and the use of third-party distribution of our direct-to-consumer sales.

 

Operating expenses totaled $9 million, an increase of 159% as compared to $3.5 million for the same period in the prior fiscal year.  This was primarily related to a $ 1 million increase in sales, an increase in distribution costs, including the use of third-party distributors of $2.4 million, an increase in general and administrative costs of $900,000 to support the growth of the business, and an increase of $1.2 million increase in non-cash expenses of share-based compensation, the amortization of acquired intangible assets and depreciation. These costs were offset by the sale of Infusionz and the classification of these expenses as part of discontinued operations.

 

The Company had a net loss from continued operations of $2.7 million compared to net income of approximately $512,000 for the three months ended September 30, 2022 and 2021, respectively. The decrease in net income is primarily related to the above-mentioned changes.

 

The Company had cash and cash equivalents of $3.3 million and stockholders' equity of $27 million as of September 30, 2022. As of November 11, 2022 there were 17,960,748 shares of common stock outstanding.

 

Financial Results Conference Call

 

Event:

Upexi Fiscal 2023 First Quarter Financial Results Conference Call

Date:

Monday, November 14, 2022

Time:

4:30 p.m. Eastern Time

Live Call:

1-877-550-1707 (U.S. Toll-Free) or 1-848-488-9020 (International)

Webcast:

https://viavid.webcasts.com/starthere.jsp?ei=1580183&tp_key=e897d16fbb

 

For interested individuals unable to join the conference call, a dial-in replay of the call will be available until November 28, 2022 and can be accessed by dialing + 1-844-512-2921 (U.S. Toll Free) or + 1-412-317-6671 (International) and entering replay pin number: 11152754.

 

Additional details are available under the Investor Relations section of the Company’s website: https://upexi.com/investors.

 

 
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About Upexi, Inc.:

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. 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 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. 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.

 

FORWARD LOOKING STATEMENTS:

This news release contains "forward-looking statements" as that term is defined in Section 27A of the United States Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements in this press release which are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainties associated with business strategy, potential acquisitions, revenue guidance, product development, integration and synergies of acquiring companies and personnel. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that the beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance that such beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the risk factors disclosure outlined in our annual report on Form 10-K and other periodic reports filed from time-to-time with the Securities and Exchange Commission.

 

Company Contact

Andrew Norstrud, Chief Financial Officer

Email: andrew.norstrud@upexi.com

Phone: (702) 332-5591

 

Investor Relations Contact

KCSA Strategic Communications

Valter Pinto or Jack Perkins

Email: Upexi@KCSA.com

Phone: (212) 896-1254

 

 
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UPEXI, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 

 

 

Three Months Ended September 30,

 

 

 

2022

 

 

2021

 

Revenue

 

 

 

 

 

 

Revenue

 

$ 11,557,011

 

 

$ 3,870,110

 

 

 

 

 

 

 

 

 

 

Cost of Revenue

 

 

5,516,280

 

 

 

1,271,729

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

6,040,731

 

 

 

2,598,381

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

Sales and marketing

 

 

2,025,460

 

 

 

1,000,064

 

Distribution costs

 

 

2,487,834

 

 

 

111,833

 

General and administrative expenses

 

 

2,498,869

 

 

 

1,582,432

 

Share-based compensation

 

 

927,326

 

 

 

626,838

 

Amortization of acquired intangible assets

 

 

880,896

 

 

 

68,834

 

Depreciation

 

 

194,497

 

 

 

87,506

 

 

 

 

9,014,882

 

 

 

3,477,507

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(2,974,151 )

 

 

(879,126 )

 

 

 

 

 

 

 

 

 

Other expense (income), net

 

 

 

 

 

 

 

 

Change in derivative liability

 

 

(1,770 )

 

 

-

 

Interest expense, net

 

 

435,829

 

 

 

15,538

 

 

 

 

 

 

 

 

 

 

Other expense (income), net

 

 

434,059

 

 

 

15,538

 

 

 

 

 

 

 

 

 

 

Loss from operations before income tax

 

 

(3,408,210 )

 

 

(894,664 )

(Loss) income from discontinued operations

 

 

(45,511 )

 

 

1,147,472

 

Income tax benefit

 

 

708,201

 

 

 

258,903

 

Net (loss) income from continuing operations

 

 

(2,745,520 )

 

 

511,711

 

 

 

 

 

 

 

 

 

 

Net loss attributable to noncontrolling interest

 

 

148,005

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Net (loss) income attributable to Upexi, Inc.

 

$ (2,597,515 )

 

$ 511,711

 

 

 

 

 

 

 

 

 

 

Basic (loss) income per share:

 

 

 

 

 

 

 

 

(Loss) income per share from continuing operations

 

$ (0.16 )

 

$ 0.03

 

(Loss) income per share from discontinued operations

 

$ (0.00 )

 

$ 0.07

 

Total (loss) income per share

 

$ (0.16 )

 

$ 0.03

 

 

 

 

 

 

 

 

 

 

Diluted (loss) income per share:

 

 

 

 

 

 

 

 

(Loss) income per share from continuing operations

 

$ (0.16 )

 

$ 0.03

 

(Loss) income per share from discontinued operations

 

$ (0.00 )

 

$ 0.07

 

Total (loss) income per share

 

$ (0.16 )

 

$ 0.03

 

 

 

 

 

 

 

 

 

 

Basic weighted average shares outstanding

 

 

16,713,345

 

 

 

15,452,453

 

Fully diluted weighted average shares outstanding

 

 

16,713,345

 

 

 

17,220,564

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 
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UPEXI, INC.

CONDENSED CONSOLDIATED BALANCE SHEETS (UNAUDITED)

 

 

 

 

 

 

 

 

 

September 30,

 

 

June 30,

 

 

 

2022

 

 

2022

 

ASSETS

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash

 

$ 3,298,663

 

 

$ 7,149,806

 

Accounts receivable

 

 

1,315,933

 

 

 

1,137,637

 

Inventory

 

 

6,090,242

 

 

 

4,725,685

 

Deferred tax asset, current

 

 

462,070

 

 

 

462,070

 

Prepaid expenses and other receivables

 

 

1,231,941

 

 

 

840,193

 

Assets of discontinued operations, net

 

 

6,404,209

 

 

 

6,157,543

 

Total current assets

 

 

18,803,058

 

 

 

20,472,934

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

7,367,844

 

 

 

7,343,783

 

Intangible assets, net

 

 

12,716,153

 

 

 

10,933,049

 

Goodwill

 

 

6,223,393

 

 

 

5,887,393

 

Deferred tax asset

 

 

2,732,242

 

 

 

2,002,759

 

Other assets

 

 

413,956

 

 

 

100,372

 

Right-of-use asset

 

 

843,901

 

 

 

926,570

 

Total other assets

 

 

30,297,489

 

 

 

27,193,926

 

 

 

 

 

 

 

 

 

 

Total assets

 

$ 49,100,547

 

 

$ 47,666,860

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$ 2,092,122

 

 

$ 2,018,541

 

Accrued compensation

 

 

695,278

 

 

 

531,259

 

Deferred revenue

 

 

120,973

 

 

 

105,848

 

Accrued liabilities

 

 

1,769,989

 

 

 

955,327

 

Acquisition payable

 

 

1,351,589

 

 

 

-

 

Current portion of notes payable

 

 

5,424,752

 

 

 

5,424,752

 

Current portion of operating lease payable

 

 

274,847

 

 

 

257,029

 

Total current liabilities

 

 

11,729,550

 

 

 

9,292,756

 

 

 

 

 

 

 

 

 

 

Notes payable, net of current portion

 

 

9,743,104

 

 

 

8,886,949

 

Operating lease payable, net of current portion

 

 

588,993

 

 

 

700,411

 

Total long-term liabilities

 

 

10,332,097

 

 

 

9,587,360

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value, 100,000,000 shares authorized, and 500,000 and 500,000 shares issued and outstanding, respectively

 

 

500

 

 

 

500

 

Common stock, $0.001 par value, 100,000,000 shares authorized, and 16,713,345 and 16,713,345 shares issued and outstanding, respectively

 

 

16,713

 

 

 

16,713

 

Additional paid in capital

 

 

35,983,273

 

 

 

34,985,597

 

Accumulated deficit

 

 

(8,868,401 )

 

 

(6,270,886 )

Total stockholders' equity attributable to Upexi, Inc.

 

 

27,132,085

 

 

 

28,731,924

 

Non-controlling interest in subsidiary

 

 

(93,185 )

 

 

54,820

 

Total stockholders' equity

 

 

27,038,900

 

 

 

28,786,744

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$ 49,100,547

 

 

$ 47,666,860

 

  

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 
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