What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-09-17 compared with 2025-09-24 · 65 added, 123 removed, 105 unchanged (64% of the section changed)

6 unchanged sentences

See also “Cautionary Note Regarding Forward-Looking Statements” above.

We are in the cryptocurrency industry and the management of cash assets through a cryptocurrency portfolio, primarily focused in Solana tokens and staking of those tokens.

We are in the cryptocurrency industry and the management of cash assets through a cryptocurrency portfolio, primarily focused on Solana tokens and staking of those tokens.

We continue to be a brand owner specializing in the development, manufacturing, and distribution of consumer products.

2 unchanged sentences

This was a shift from before when we held excess cash primarily in FDIC-insured interest-bearing accounts.

The change to adopt this strategy results from our intention to obtain the highest yield on excess cash.

The change to adopt this strategy results from our intention to obtain the highest yield on excess cash and benefit from potential price appreciation.

Under our new approach, our treasury policy focuses primarily on Solana (“SOL”).

5 unchanged sentences

Operating Segments

The Company’s financial reporting is organized into a single segment that includes production, sales and distribution of branded products, following the sale of E-Core, Technology Inc.

The Company’s financial reporting is organized into a single segment that includes sales and distribution of branded products, following the sale of E-Core, Technology Inc.

and its subsidiaries.

1 unchanged sentence

Results of Operations

Year Ended June 30, 2025, as compared to June 30, 2024:

The following summary of our results of operations should be read in conjunction with our consolidated financial statements for the years ended June 30, 2026 and 2025, which are included herein.

Years Ended June 30,

$ (7,257,514 )

Digital asset revenue

Product costs

$ (8,232,768 )

Distribution costs

$ (3,919,738 )

Cost of revenue

Sales and marketing expenses

$ (1,988,633 )

Distribution costs

General and administrative expenses

Unrealized and realized (gain) loss on digital assets

Unrealized loss (gain) on digital assets

Realized loss on digital asset revenue conversion to USD

Realized loss on sale of digital assets

Other operating expenses

$ (1,734,009 )

Other (expense)

$ (1,184,457 )

$ (3,141,166 )

Impairment of intangible assets and goodwill

$ (7,869,425 )

Lease (gain on sale) impairment

(Gain) on the sale of assets and businesses

Income from discontinued operations

Other expenses

$ (246,064,698 )

Net loss attributable to Upexi, Inc.

$ (13,684,209 )

$ (232,380,489 )

Revenues decreased by $11,174,316, or 43%, for the fiscal year ended June 30, 2025, compared with the fiscal year ended June 30, 2024.

The Company divested from the recommerce business to focus primarily on brands that are owned or products that the Company produces as white label products for the brand owner.

The elimination of the recommerce business decreased sales by approximately $9,787,000, or 85%, of the decline in sales compared to the prior year.

The Company had revenue of approximately $985,000 from the newly implemented treasury strategy.

This digital asset treasury was established in May of 2025 and management expects the revenue generated from the treasury to significantly increase in fiscal year 2026.

Product costs decreased by $8,232,768, or 62%, compared with the fiscal year ended June 30, 2024.

The two primary reasons for the decrease in products costs were the overall lower sales and the elimination of the lower margin recommerce business.

In addition, in the prior year there were significant inventory write offs and other non-cash expenses in the product costs that decreased the overall gross profit compared to the current year’s gross profit.

Gross profit decreased by approximately $2,942,000, or approximately 22.9% compared with the prior year, excluding the increase in gross profit related to the $985,000 of digital asset revenue.

The profit margin increased to approximately 67% of revenue compared to 49% of revenue in the prior year, excluding the digital asset revenue.

Management’s focus in fiscal year 2026 is on improving the overall gross profit and the profit margin of the business and increasing the revenue from our digital asset treasury.

Sales and marketing expenses decreased by approximately $1,988,000, or 33%, compared with the same period last year.

We have decreased the number of fixed costs in our marketing budget and focused our advertising expenditures.

The percentage of sales and marketing to the total sales will increase based on our elimination of the recommerce business, however with the elimination of many fixed expenditures, the changes should align with the overall total sales.

Distribution costs decreased by approximately $3,920,000 or 46%, compared with the fiscal year ended June 30, 2024.

The strategic change and divesture of the two businesses in 2024, along with the consolidation of operations to Florida reduced the Amazon fees by approximately $2,668,000, reduced the facility expenses by approximately $255,000 and the labor costs by approximately $743,000.

The remaining product sales do not rely on the Amazon distribution network and are distributed from one facility in Florida.

General and administrative expenses increased by approximately $5,163,645, or 76%, compared with the same period last year.

Over 75% of the increase was related to these three factors:

1) approximately $2,668,000 of additional expense in corporate compensation;

2) approximately $576,000 in additional professional services fees, including legal, audit and tax services;

and 3) approximately $686,000 of additional public company expenses.

Our overall general and administrative expenses are expected to increase over the next year and then stabilize as we implement this overall treasury and business strategy.

Our continuous capital raising efforts and professional and public company expenses necessary to drive this strategy is significantly more than what the Company has required in the past.

Other operating expenses decreased by approximately $1,734,000, or 36%, compared with the same period last year.

These expenses are primarily non-cash expense for amortization of stock compensation, amortization of acquired intangible assets and depreciation.

The decrease in the amortization of acquired intangible assets was approximately $2,334,000 as approximately $7,869,000 was impaired in the prior year.

Depreciation expense declined by approximately $587,000.

These expenses were partially offset by approximately $1,187,000 of additional share-based compensation expense.

Our realized and unrealized gains was approximately $105,474 with none in the same period last year.

The price of Solana on June 30, 2025 was $154.74, as quoted on coinmarketcap.com and is the approximate cost basis of our Solana treasury at June 30, 2025.

Other expense decreased by approximately $1,957,000 or 63%, as compared with the same period last year, which primarily relates to the continued decrease in interest expense from payoffs of debts.

The Company recognized an impairment $289,969 on the Delray Beach warehouse during the year ended June 30, 2024 as part of closing the warehouse and the Company exiting the recommerce business.

This liability was settled in January of 2025 and resulted in a gain on the lease impairment of approximately $270,000.

In the prior year, the Company recognized a gain on the sale of assets and businesses of approximately $449,000.

This gain was from approximately $1,948,538 gain on the sale of VitaMedica, the gain of approximately $238,000 on the sale of Infusionz and CBD related assets, which recorded an approximate loss of $2,186,000 in the prior year.

This gain was offset by the loss of approximately $1,737,326 on the sale of E-Core.

The income and loss on discontinued operations was as follows:

Interactive Offers

The Company had a net loss of approximately $13,684,000 compared to a net loss of approximately $23,658,000 in the prior year.

The decrease in the net losses primarily related to the above-mentioned changes.

Revenue declined by approximately $7.3 million, or 49.0%, for fiscal year ended June 30, 2026 compared with the fiscal year ended June 30, 2025, primarily due to the Company’s shift away from legacy health, wellness and other consumer-product lines and the exit of certain manufacturing and distribution operations.

Management’s focus is on the digital asset strategy and resources are allocated accordingly.

We do not expect significant increases to these revenue sources in future quarters.

Digital asset revenue increased by approximately $16.4 million, for fiscal year ended June 30, 2026 compared with the fiscal year ended June 30, 2025, as the Company began its investments in digital assets toward the end of fiscal year 2025.

The Company earns staking revenue by delegating its digital assets to third-party validators on proof-of-stake blockchain networks.

The digital asset revenue is expected to increase as the number of SOL tokens the Company has staked increases, the overall increase in the price of SOL and the Company’s continued expansion of its digital asset strategy.

Cost of revenue decreased by approximately $2.3 million, or 46.8%, compared with the fiscal year ended June 30, 2025.

The gross margin was approximately 65.2% and 66.7% for the fiscal year ended June 30, 2026 and June 30, 2025, respectively, when excluding digital asset revenue, which is a decrease of approximately 1.4%.

Sales and marketing expenses decreased by approximately $1.1 million, or 27.6%, as compared with the same period last year, primarily due to less marketing expenses being spent on the remaining products and several of the fixed sales and marketing expenses have been eliminated.

Distribution costs decreased by approximately $2.1 million, or 44.0%, as compared with the same period last year.

The decrease in distribution costs was primarily related to the overall decline in revenue.

General and administrative expenses increased approximately $14.5 million, or 121.2%, as compared with the same period last year.

The increase is mainly a result of expenses in connection with the change in the business strategy to hold digital assets as parts of its treasury.

The increase was primarily due to the $4.0 million increase in public company expenses, $7.0 million increase in compensation to employees, $1.5 million increase in digital asset treasury fees, $1.2 million increase in legal fees, and $1.1 million increase in travel related expenses.

Unrealized loss on digital assets increased by approximately $195.2 million as the Company began its investments in digital assets toward the end of fiscal year 2025.

The changes mainly result from the price changes on SOL over the recorded cost of SOL during the fiscal year ended June 30, 2026.

There was a minimal amount of digital asset activity during the fiscal year ended June 30, 2025.

Realized loss on digital asset revenue conversion to USD increased by approximately $4.9 million as the Company began its investments in digital assets toward the end of fiscal year 2025 and there was no staking revenue converted into USD in the prior year.

The losses were a result of the price changes on SOL from the period the digital assets were recorded as staking revenue and the price the staking revenue was converted into USD during the fiscal year ended June 30, 2026.

The digital assets sales are recorded on a first in first out basis.

Realized loss on sale of digital assets increased by approximately $6.8 million as the Company began its investments in digital assets toward the end of fiscal year 2025 and there was no digital assets sold in the prior year.

Other operating expenses increased by approximately $21.7 million as compared with the same period last year.

The increase was primarily due to increased stock compensation of approximately $19.5 million.

Other expense increased by approximately $4.0 million as compared with the same period last year.

The increase was primarily due to increased debt used in the purchase of SOL for the digital asset treasury.

The Company had a net loss of approximately $246.1 million compared to a net loss of approximately $13.7 million in the prior year.

The increase in the net losses primarily related to the above-mentioned changes.

Liquidity, Capital Resources and Cash Requirements

Working Capital

June 30, 2025

June 30, 2024

Current assets

$ 116,766,265

Current liabilities

Working capital

$ (1,235,234 )

Years Ended June 30,

Cash flows (used in) operating activities – continuing operations

Year Ended June 30,

Cash flows used in operating activities

$ (20,956,207 )

$ (8,423,042 )

Cash flows (used in) provided by investing activities – continuing operations

Cash flows used in investing activities

(30,623,761 )

Cash flows provided by (used in) financing activities – continuing operations

Cash flows provided by operating activities – discontinued operations

Cash flows used by investing activities – discontinued operations

Cash flows used by financing activities – discontinued operations

Net increase (decrease) in cash during the period

(99,293,083 )

On June 30, 2025, the Company had cash of $2,975,150, or an increase of approximately $2,314,000, from June 30, 2024.

The increase in cash was due to significant capital raised during the period and offset by the net loss from operations and capital investments in Solana for the digital asset treasury.

The significant increase in working capital is a result of the liquid SOL held by the Company in its digital asset treasury.

The net cash used by continuing operating activities was approximately $8,423,000.

The net loss of approximately $13,684,000 was offset by the non-cash expenses of approximately $758,000 for depreciation and amortization, $2,357,000 for stock-based compensation and issuance of common stock for services rendered by consultants, and the write off of inventory and credit losses relating to Amazon of approximately $1,682,824.

The change in operating assets and liabilities provided cash of approximately $1,931,000.

The digital asset revenue and unrealized gains and losses from the digital asset treasury is non-cash as the value was from staking revenue paid in additional Solana and the increase in market value over the purchase price for the Solana held in the digital asset treasury.

Net cash used in investing activities for the years ended June 30, 2025 and 2024 was approximately $99,293,000 and use of $3,376,000, respectively.

The most significant use of cash in investing activities was the purchase of Solana for the Company’s digital asset treasury.

This was offset by the collection of the purchase price in the sale of E-core and the proceeds from the sale of the building.

Net cash flows provided by financing activities for the year ended June 30, 2025 was approximately $110,030,000 compared to approximately $354,000 used during the year ended June 30, 2024.

During the year ended June 30, 2025, the Company raised approximately $92,556,000 from the sale of the Company’s common stock and obtained a short-term loan of $20,000,000 that is collateralized by certain assets of the digital asset treasury.

This was offset by the payment of debt and other common stock issued for the exercise of warrants or the issuance of convertible debt that was subsequently converted into common stock.

On April 1, 2024, the Company entered into a lease agreement with MFA 2510 Merchant LLC.

The lease is for approximately 10,000 square feet of warehouse and office space, located in Odessa, Florida for $20,060 per month on a triple net basis.

The initial term is five years.

The estimated cost of this facility is a reduction of overall facility costs of approximately $240,000 in rent and approximately $138,000 per year in utilities, repairs and maintenance.

On May 28, 2024, the Company entered into an agreement to sell its Clearwater, Florida warehouse for a sale price of $4,300,000.

The sale of the building was completed on July 8, 2024 and provided $1,370,978 of working capital.

On June 13, 2024, the Company sold all of the issued and outstanding equity of VitaMedica, Inc.

to three investors.

One of the minority interest buyers is Allan Marshall, the Company’s Chief Executive Officers.

The purchase price for the stock was $6,000,000, subject to certain customary post-closing adjustments.

The net cash provided from the sale was $2,100,000, reduced liabilities of $1,900,000, a loan for $1,000,000 and a final $1,000,000 payment subject to certain inventory and working capital adjustments.

On August 1, 2024, the Company sold all of outstanding stock of E-Core Technology, Inc., a Florida corporation (d/b/a New England Technology, Inc.) (“E-core”), to E-Core Holdings, LLC, a Florida limited liability company pursuant to the terms of an Agreement to Unwind Securities Purchase Agreement dated July 31, 2024 and effective June 30, 2024.

The principals of the Buyer are the three individuals from whom the Company acquired E-core in October 2022.

The purchase price in the transaction was $2,000,000 paid by the Buyer to the Company at closing and will be used for working capital.

On March 7, 2025 the Company closed on $350,000 of convertible debt with a term of two years and an interest rate of 3%.

The debt was convertible into 116,118 shares of the Company’s common stock or $3.00 per share and was converted in June of 2025.

The convertible debt included warrants to purchase up to 116,118 shares of the Company’s common stock at a per share price of $3.00 per common share or for $350,000.

Warrants for $250,000 or 83,334 shares of common stock were exercised.

The Company received approximately $600,000 during the year related to the convertible debt and the exercised warrants.

On April 24, 2025 the Company closed on a private placement offering to sell 35,970,383 shares of the Company’s common stock at an offering price of $2.28 per share and pre-funded warrants to purchase 7,889,266 shares of common stock at an offering price of $2.279 per share of the Company’s common stock that may be exercised at a per share price of $0.0001.

The Company received approximately $92,556,000, net of broker fees, legal fees and other expenses incurred for the private placement.

Since June 30, 2025, all of the pre-funded warrants have been exercised and the 7,889,266 shares of common stock issued.

On May 23, 2023, The Company entered into a credit facility with BitGo Prime, LLC (“BitGo”).

Pursuant to a Master Loan Agreement (the “Agreement”) the Company may borrow up to $20,000,000 of Digital Currency or United States Dollars with interest at the rate of 11.5% per year.

The term of the credit facility is for one year and is renewable for successive one year options.

Each individual loan under the facility is negotiable as to the amount, term prepayment or recall (payment demand).

The loans shall be collateralized by the Company’s treasury assets, already held at BitGo, the initial availability is based on 260% collateral level and a margin call level of 175%.

There are no requirements or fees for non-use of the credit facility and the facility can be increased in the future based on the value of the assets BitGo is the custodian of for the Company.

At June 30,2025, the outstanding balance of the credit facility was $20,000,000.

Subsequent to June 30, 2025 the credit facility increased to $50,000,000.

The $50,000,000 credit facility is outstanding as of the date of this report and was used for the purchase of Solana.

Cash flows provided by financing activities

Net change in cash during the period

On June 30, 2026, the Company had cash of approximately $5.8 million, an increase of approximately $2.8 million from June 30, 2025.

The primary changes resulted from financing obtained to implement and grow the Company’s digital asset strategy.

Net cash flows used in operating activities was approximately $21.0 million for the fiscal year ended June 30, 2026, as compared to net cash flows used in operating activities of approximately $8.4 million for the fiscal year ended June 30, 2025.

The approximately $246.1 million dollar net loss from operations was offset by approximately $195.1 million in unrealized loss on digital assets, digital asset revenue conversion to USD of approximately $13.2 million, realized loss on sale of digital assets of approximately $6.8 million, loan amortization costs of approximately $3.7 million, the impairment of assets from the manufacturing shutdown of approximately $1.4 million, impairment on acquired intangible assets of approximately $0.8 million, and stock-based compensation expense of approximately $21.9 million, which was partially offset by approximately $10.3 million gain on the extinguishment of debt.

The changes in assets and liabilities provided approximately $4.5 million.

Various costs were incurred in connection with beginning, implementing, and growing the Company’s digital asset strategy and are expected to continue.

Net cash flows used in investing activities was approximately $30.6 million for the fiscal year ended June 30, 2026, as compared to net cash flows used in investing activities of approximately $99.3 million for the fiscal year ended June 30, 2025.

The primary use of funds was on the acquisitions of SOL for the digital assets treasury during the fiscal year ended June 30, 2026 and 2025.

Net cash flows provided by financing activities was approximately $54.4 million for the fiscal year ended June 30, 2026, as compared to net cash flows provided by financing activities of approximately $110.0 million for the fiscal year ended June 30, 2025.

The primary driver of the change was the financing obtained from a capital raise occurring in each of July 2025 and November 2025 for purposes of executing the Company’s digital asset strategy during the fiscal year ended June 30, 2026.

This capital raise was offset by the expenses incurred for the capital raise and the expenses incurred for the convertible note obtained in a swap transaction for SOL.

Other notable drivers include the exercise of warrants that provided cash of approximately $0.1 million and cash used for common stock repurchases of approximately $2.8 million.

Liquidity of SOL Management

2 unchanged sentences

Since this Locked Solana could create significant delays if the Company needed liquidity, management monitors the overall percentage of the digital assets that are locked or do not have the normal liquidity as other digital assets.

The Company has 421,451 tokens that are considered locked at June 30, 2025.

The following table summarizes the unlocking schedule of Solana tokens currently locked as of June 30, 2025, valued at $133.07 or a 14% discount to the closing price of $154.74:

June 30, 2026

As of June 30, 2026, the Company held 849,124 tokens subject to lock up restrictions.

The following table summarizes the unlocking schedule of these Solana tokens:

June 30, 2027

4 unchanged sentences

We maintain a certain amount of liquid SOL in the treasury and a certain amount of cash to ensure that the Company is able to satisfy its current obligations.

Subsequent to June 30, 2025

On July 11, 2025 the Company closed on a private placement offering to sell 12,457,186 shares of the Company’s common stock at an offering price of $4.00 per share.

The Company received approximately $37,077,000, net of broker fees, the fees on the convertible debt offering completed on July 16, 2025, legal fees, filing fees and other expenses incurred for the private placement.

We estimate that we will have sufficient working capital to fund our operations over the twelve months following the date of the issuance of these consolidated financial statements and meet all of our debt obligations.

6 unchanged sentences

Management believes the areas described below require significant judgment in the application of accounting policy or in making estimates and assumptions that are inherently uncertain and that may change in subsequent periods.

For further information, see Note 2 to the Consolidated Financial Statements, “Significant Accounting Policies.”

For further information, see Note 2, Significant Accounting Policies, to the Consolidated Financial Statements.

Revenue Recognition - In accordance with ASC No.

27 unchanged sentences

Changes in assumptions or actual results that differ from expectations may result in significant adjustments to the valuation allowance and income tax expense.

Convertible debt - The accounting for the Company’s convertible debt instruments requires significant judgment because the instruments include nonstandard settlement terms involving SOL and fixed-price conversion features.

The Company accounts for convertible debt as a single unit of account unless an embedded feature requires bifurcation from the debt host and separate accounting as a derivative liability under ASC 815, Derivatives and Hedging, or other applicable accounting guidance requires separate recognition.

In evaluating these instruments, management assesses the contractual terms to determine whether the obligation to deliver SOL upon nonconversion represents an embedded feature requiring separate accounting, including whether the feature is clearly and closely related to the debt host and whether it meets the definition of a derivative.

This assessment includes judgment regarding whether the applicable quantity of SOL is readily convertible to cash, taking into account the contractual settlement quantity, market liquidity, potential price impact, and restrictions that may limit the prompt transfer or sale of SOL.

Management also evaluates whether the fixed-price conversion feature qualifies for the scope exception for contracts involving the Company’s own equity, including whether the feature is indexed to the Company’s own stock and would be classified in stockholders’ equity if it were a freestanding instrument.

Changes in the contractual terms of the notes, the availability or transferability of SOL, market conditions, or the facts and circumstances supporting management’s judgments could affect the accounting for these instruments, including whether a separate derivative liability and related fair value remeasurement would be required.

See Note 2, Significant Accounting Policies, and Note 10, Short-Term Treasury Debt, Cygnet Subsidiary Notes Payable, Promissory Notes, and Convertible Notes, to the Consolidated Financial Statements for further information.

Recent Accounting Pronouncements

18 unchanged sentences

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 7. Management’s Discussion and Analysis