What changed in this filing

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Item 9A. Controls and Procedures

2023-10-03 compared with 2022-09-28 · 63 added, 31 removed, 378 unchanged (20% of the section changed)

19 unchanged sentences

Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over the Company’s financial reporting.

In order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002.

Our management, with the participation of our principal executive officer and principal financial officer have conducted an assessment, including testing, using the criteria in Internal Control – Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) (2013).

Our system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

This assessment included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation.

Based on this evaluation, management concluded that our internal control over financial reporting was not effective as of June 30, 2023.

The ineffectiveness of the Company’s internal control over financial reporting was due to the following material weaknesses, which are indicative of many small companies with small staff:

inadequate segregation of duties consistent with control objectives;

lack of multiple levels of supervision and review.

We are currently reviewing our disclosure controls and procedures related to these material weaknesses and expect to implement changes in the current fiscal year, including identifying specific areas within our governance, accounting and financial reporting processes to add adequate resources to potentially mitigate these material weaknesses.

Our management will continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements.

Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

All internal control systems, no matter how well designed, have inherent limitations.

Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Management’s Remediation Plan

The weaknesses and their related risks are not uncommon in a company of our size because of the limitations in the size and number of staff.

Due to our size and nature, segregation of all conflicting duties has not always been possible and may not be economically feasible.

However, we plan to take steps to enhance and improve the design of our internal control over financial reporting.

During the period covered by this annual report on Form 10-K, we have not been able to remediate the material weaknesses identified above.

To remediate such weaknesses, we plan to implement the following changes in the current fiscal year as resources allow:

Appoint additional qualified personnel to address inadequate segregation of duties and implement modifications to our financial controls to address such inadequacies and to implement additional levels in the review process and the implementation of the new ERP for all subsidiaries;

We will attempt to implement the remediation efforts set out herein by the end of the 2024 fiscal year.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected.

These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.

Management believes that despite our material weaknesses set forth above, our financial statements for the year ended June 30, 2023 are fairly stated, in all material respects, in accordance with U.S.

Changes in Internal Control Over Financial Reporting

11 unchanged sentences

Chief Executive Officer, Chairman of the Board

Robert Hackett(1)

August 5, 2018

Andrew Norstrud

5 unchanged sentences

January 1, 2021

(1) Robert Hackett resigned all positions with the Company on September 26, 2022.

Business Experience

114 unchanged sentences

(1) the integrity of the Company’s financial statements, (2) the effectiveness of the Company’s internal control over financial reporting, (3) the Company’s compliance with legal and regulatory requirements, (4) the independent registered public accounting firm’s qualifications and independence, (5) and the performance of the Company’s independent registered public accountants and (6) preparation of the audit committee report as required to be included in the Company’s annual proxy statement.

The Audit Committee Charter is filed as Exhibit 10.8 to the Company’s Form S-1 as filed with the SEC on May 21, 2021.

The audit committee met five times during the year ended June 30, 2022

The Audit Committee Charter is filed as Exhibit 10.8 to this form 10K.

The audit committee met five times during the years ended June 30, 2023 and 2024

Compensation Committee

8 unchanged sentences

The Compensation Committee Charter is filed as Exhibit 10.9 hereto.

The compensation committee met twice during the year ended June 30, 2022.

The compensation committee met three times during the year ended June 30, 2023 and twice during the year ended June 30, 2022.

Nomination and Governance Committee

7 unchanged sentences

The Nominating Committee Charter is filed as Exhibit 10.10 to the Company’s Form S-1 as filed with the SEC on May 21, 2021.

The nomination committee met twice during the year ended June 30, 2022.

The nomination committee met twice during the years ended June 30, 2023 and 2022.

Nominations to the Board of Directors

16 unchanged sentences

Andrew Norstrud, Chief Financial Officer

Anthony Bazan, COO (2)

Robert Hackett, President(1)

1 unchanged sentence

Robert Hackett resigned all positions with the Company on September 26, 2022.

Anthony Bazan resigned all positions with the Company on June 15, 2023.

There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers.

2 unchanged sentences

The value of the option awards is based on the intrinsic value at date of grant.

At June 30, 2021 Allan Marshall had an accrual of $486,200 for 2021 bonus that was subsequently paid in August of 2021.

At June 30, 2020 Allan Marshall had an accrual of $72,692 of earned compensation that had not been paid.

For the fiscal year 2020, Andrew Norstrud received compensation through a consulting contract $175,000 and at June 30, 2020 there was an accrual of $7,500 owed to Andrew Norstrud for compensation.

Represents equity-based compensation expense calculated in accordance with the provisions of Accounting Standards Codification Section 718 – Compensation – Stock Compensation, using the Black-Scholes option pricing model as set forth in Notes to our consolidated financial statements in Item 13.

36 unchanged sentences

Financial Officer and Director

Robert Hackett, President(1)

Gene Salkind, Director

1 unchanged sentence

Lawrence H Dugan, Director

(1) Robert Hackett resigned all positions with the Company on September 26, 2022.

Option Exercises and Stock Vested

In October 2019, Allan Marshall exercised an option to purchase 277,778 shares of Common Stock at a $1.53 per common share.

The Company received $400,000 of cash and was relieved of $25,000 in payables to Allan Marshall for the shares of Common Stock.

Directors Compensation

We do not have any agreements for compensating our directors for their services in their capacity as directors, although such directors are expected in the future to receive cash compensation and stock options to purchase shares of our Common Stock as awarded by our board of directors.

Our directors also receive cash compensation of $5,000 per quarterly board meeting and receive $5,000 up to $7,000 per year for being a committee chair.

Pension, Retirement or Similar Benefit Plans

9 unchanged sentences

The number of shares described below includes shares which the beneficial owner described has the right to acquire within 60 days of the date of the prospectus.

Unless otherwise indicated, the address for each beneficial owner is c/o Upexi, Inc., 1710 Whitney Mesa Drive, Henderson, NV 89014.

Unless otherwise indicated, the address for each beneficial owner is c/o Upexi, Inc., 3030 North Rocky Point Drive Suite 420, Tampa, Florida 33607.

Name and Address of Beneficial Owner

2 unchanged sentences

Allan Marshall

Robert Hackett(1)

5,052,389 (2)

2,554,330 (3)

Andrew Norstrud

1,061,112 (4)

Lawrence Dugan

1 unchanged sentence

Directors and Executive Officers as a Group

5% or more Stockholders

Jeffrey Bishop

Represents less than 1% of the number of shares of our Common Stock outstanding

(1) Robert Hackett resigned all positions with the Company on September 26, 2022.

Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares:

7 unchanged sentences

Represents (i) 2,691,278 shares of Common Stock, (ii) 2,083,333 shares issuable upon the exercise of stock options that are exercisable within 60 days, (iii) 277,778 shares issuable upon the conversion of preferred stock.

Does not include 416,667 shares issuable upon vesting and exercise of remaining stock option.

Represents (i) 2,447,385 shares of Common Stock and (ii) 106,945 shares issuable upon the exercise of stock option that are exercisable within 60 days.

Does not include 20,833 shares issuable upon vesting and exercise of remaining stock option.

Represents 1,444,444 shares of Common Stock.

Represents (i) 305,556 shares of Common Stock and (ii) 755,556 shares issuable upon the exercise of stock options that are exercisable within 60 days.

Does not include 99,075 shares issuable upon vesting and exercise of remaining stock options.

Represents (i)27,778 shares of Common Stock and (ii) 106,945 shares issuable upon the exercise of stock option that are exercisable within 60 days.

65 unchanged sentences

Asset Purchase Agreement, dated August 12, 2022, by and among Upexi Pet Products and GA Solutions, LLC

Loan Agreement, dated October 19, 2022, between Registrant and its indirect wholly owned subsidiary Upexi 17129 Florida, LLC, and Professional Bank.

Promissory Note (entered into in connection with October 19 Loan Agreement)

Securities Purchase Agreement, dated October 31, 2022, between Registrant and its wholly owned subsidiary Upexi Enterprise, LLC, and E-Core Technology, Inc.

d/b/a New England Technology, Inc, and David Romano

Form of Note A dated February 22, 2023

Form of Note B dated February 22, 2023

Form of Securities Purchase Agreement, dated May 11, 2023, between Registrant and certain accredited investors

Form of Placement Agency Agreement, dated May 11, 2023, between Registrant and A.G.P./Alliance Global Partners and Paulson Investment Company, LLC

Form of Placement Agent Warrants (issued in connection with the May 11 Placement Agency Agreement)

Equity Interest Purchase Agreement, dated August 31, 2023, between Registrant and Amplifyir Inc.

Exercise of Option to Acquire Cygnet Online, LLC, dated September 1, 2023, between Registrant and Eric Hanig

2019 Amended and Restated Stock Incentive Plan, effective May 24, 2022

Audit Committee Charter

Compensation Committee Charter

Nominating Committee Charter

Code of Business Conduct and Ethics

Whistleblower Policy

List of Subsidiaries of Registrant

17 unchanged sentences

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, there unto duly authorized.

September 28, 2022

October 2, 2023

/s/ Allan Marshall

2 unchanged sentences

(Principal Executive Officer)

September 28, 2022

October 2, 2023

/s/ Andrew J.

2 unchanged sentences

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

September 28, 2022

October 2, 2023

/s/ Allan Marshall

2 unchanged sentences

(Principal Executive Officer)

September 28, 2022

October 2, 2023

/s/ Andrew J.

1 unchanged sentence

(Principal Financial Officer and Principal Accounting Officer)

September 28, 2022

October 2, 2023

/s/ Gene Salkind

September 28, 2022

October 2, 2023

/s/ Thomas C.

September 28, 2022

October 2, 2023

/s/ Laurence H.

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 9A. Controls and Procedures