What changed in this filing

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Item 1. Business

2023-10-03 compared with 2022-09-28 · 84 added, 53 removed, 166 unchanged (45% of the section changed)

1 unchanged sentence

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.

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.

(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.

The Company’s fourteen active subsidiaries are as follows:

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.

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

The Company’s fifteen active subsidiaries are as follows:

HAVZ, LLC, d/b/a/ Steam Wholesale, a California limited liability company

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Trunano Labs, Inc., a Nevada corporation

Infusionz, Inc., a Nevada corporation

MW Products, Inc., a Nevada corporation

Upexi Holding, LLC, a Delaware limited liability company

Upexi Pet Products, LLC, a Delaware limited liability company

Infusionz LLC (“Infusionz”), a Colorado limited liability company

Grove Acquisition Subsidiary, Inc.

(“VitaMedica”), a Nevada corporation

VitaMedica, Inc, a Nevada corporation

Upexi Enterprise, LLC, a Delaware limited liability company

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Upexi 17129 Florida, LLC, a Delaware limited liability company

E-Core Technology, Inc.

a Florida corporation

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

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

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.

As of July 1, 2020, Trunano Labs, Inc.

is a wholly owned subsidiary of Upexi Inc.

Cygnet Online, LLC (“Cygnet”), a Delaware limited liability company, 55% owned (100% owned as of September 1, 2023)

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”).

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”).

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.

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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.

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.

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.

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.

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.

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.

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.

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.

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.

(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”).

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.

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

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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.

On August 17, 2022, the Company changed its name from Grove, Inc.

to Upexi, Inc.

The Company primarily conducts its business operations through the following subsidiaries:

(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.

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.

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.

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.

Tytan Tiles is a growing brand in the children’s STEM toy category.

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.

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.

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.

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.

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.

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.

Moonwlkr Health is on a mission to elevate wellness through flavorful innovation.

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.

The Company’s fifteen active subsidiaries are as follows:

HAVZ, LLC, d/b/a/ Steam Wholesale, a California limited liability company

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Trunano Labs, Inc., a Nevada corporation

Infusionz, Inc., a Nevada corporation

MW Products, Inc., a Nevada corporation

Upexi Holding, LLC, a Delaware limited liability company

Upexi Pet Products, LLC, a Delaware limited liability company

Infusionz LLC (“Infusionz”), a Colorado limited liability company

Grove Acquisition Subsidiary, Inc.

(“VitaMedica”), a Nevada corporation

VitaMedica, Inc, a Nevada corporation

Upexi Enterprise, LLC, a Delaware limited liability company

1 unchanged sentence

Upexi 17129 Florida, LLC, a Delaware limited liability company

E-Core Technology, Inc.

a Florida corporation

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

We operate throughout our locations in the USA with operations in Florida, California, Nevada and Colorado through our various Brands and entities.

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.

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.

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.

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

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.

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The global ecommerce growth rate for 2022 is forecast at 12.2 percent, bringing global eCommerce sales worldwide to $5.542 trillion.

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.

The industry saw exponential growth during the pandemic, as consumers were more apt to buy online than go into stores, but while the CAGR has dipped from 2020, the industry continues to grow steadily.

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Our goal through this diverse portfolio is to create products that can be cross-sold between brands to help take advantage of our growing list of consumer data.

Our target customers are first and foremost end consumers via internet sales, however, we see growth opportunities in direct-to-consumer retail stores, cooperatives, affiliate sales and master distributors.

Our target customers are first and foremost end consumers via internet sales;

however, we see growth opportunities in direct-to-consumer retail stores, cooperatives, affiliate sales and master distributors.

As we continue to develop our business, these markets may change, be re-prioritized or eliminated as management responds to consumer and regulatory developments.

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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.

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.

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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.

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.

Resellers on and off Amazon represent a significant part of our business, which allows us to use our capital to buy in bulk with quick resale opportunities, whether it be direct Amazon listings or through partnerships with the likes of Walmart, BJ’s, Costco, Sam’s Club, etc.

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

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

Retail Partnerships.

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.

With longstanding accounts that we have taken ownership of through acquisitions, we have grown our network and have untapped additional revenue streams.

Professionalism and Entrepreneurial Culture .

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

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

We continue to invest in our talent by providing every employee with an extensive and ongoing education and have successfully developed programs that provide comprehensive product knowledge and the tools needed to have a unique understanding of our customers’ personalities and decision-making processes.

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International expansion.

Our primary focus has been on the US eCommerce market which, as mentioned, is forecasted to grow stronger than others.

Our primary focus has been on the U.S.

eCommerce market which, as mentioned, is forecasted to grow stronger than others.

However, with recently acquired brands and their presence in international markets, we expect nearly all of our products to be offered worldwide over the next few years.

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Changes in the state laws and regulations could again either positively or adversely affect our ability to sell products in those states.

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.

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.

WHERE YOU CAN FIND MORE INFORMATION

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business