Upexi Reports 47% Revenue Decline and Increased Net Loss for Quarter Ended September 30, 2024

Upexi, Inc. reported a significant decline in financial performance for the three months ended September 30, 2024, with revenues of $4.36 million, down 47% from $8.27 million in the same period last year. The decrease in revenue was attributed primarily to the discontinuation of the recommerce business following the sale of its subsidiary E-Core Technology, which accounted for approximately $3.17 million of the revenue drop. The company's gross profit also fell to $2.93 million from $5.43 million, reflecting a similar decline in cost of revenue, which decreased by 50% to $1.43 million.

Operating expenses were reduced across several categories, with sales and marketing expenses decreasing by 43% to $1.04 million, and general and administrative expenses down 13% to $1.37 million. The company reported a net loss of $1.63 million for the quarter, compared to a loss of $1.36 million in the prior year. This increase in net loss was primarily due to the aforementioned revenue declines and the absence of gains from the sale of discontinued operations, which had contributed positively in the previous year.

In terms of strategic developments, Upexi completed the sale of its subsidiary VitaMedica for $6 million in June 2024, which has been classified as a discontinued operation. The company also sold E-Core Technology for $2 million in August 2024. These divestitures are part of Upexi's strategy to focus on its core product lines and streamline operations. The company has consolidated its manufacturing operations to Florida, which is expected to enhance efficiency and reduce costs moving forward.

Operationally, Upexi's total current assets decreased to $6.79 million from $11.42 million, while current liabilities also fell to $9.77 million from $12.66 million. The company reported a working capital deficit of $2.98 million as of September 30, 2024. Cash at the end of the period was $1.79 million, an increase from $661,415 at the end of the previous quarter, primarily due to proceeds from the sale of the building and the collection of the purchase price for E-Core.

Looking ahead, Upexi anticipates that the strategic focus on product sales and the consolidation of operations will lead to improved financial performance. The company expects to recognize approximately $100,000 of deferred revenue in the upcoming fiscal year and is committed to enhancing its internal controls and financial reporting processes. Management believes that these efforts will position Upexi for better operational efficiency and profitability in the future.