LFLY Leafly Holdings Inc

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 10, 2023

 

 

Leafly Holdings, Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware			001-39119	84-2266022
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
113 Cherry Street PMB 88154
Seattle, Washington				98104-2205
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: 206 455-9504

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		LFLY		The Nasdaq Stock Market LLC
Warrants		LFLYW		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

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Item 2.02 Results of Operations and Financial Condition.

On August 10, 2023, Leafly Holdings, Inc. (the "Company") announced its financial results for the three and six months ended June 30, 2023. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information in this Item 2.02 and in the accompanying Exhibit 99.1 is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, except as expressly set forth by specific reference in such a filing.

 

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits
 

Exhibit Number			Description
99.1			Press Release dated August 10, 2023
104			Cover Page Interactive Data File (formatted as Inline XBRL)

 

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			Leafly Holdings, Inc.
Date:	August 10, 2023	By:	/s/ Suresh Krishnaswamy
			Suresh Krishnaswamy Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

 

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Exhibit 99.1

 

 

Leafly Holdings, Inc. Reports Second Quarter 2023 Financial Results

 

Delivered Q2 2023 revenue of $10.7 million

Reported net loss of $1.4 million;

Delivered Q2 2023 positive adjusted EBITDA of $0.1 million

 

SEATTLE--(BUSINESS WIRE)-- August 10, 2023 --Leafly Holdings, Inc. (“Leafly” or “the Company”) (NASDAQ: LFLY), a leading online cannabis discovery marketplace and resource for cannabis consumers, today announced financial results for its second quarter ended June 30, 2023.

“Our second quarter results reflect continued focus on our strategy and our commitment to building a sustainable path to profitability," said Yoko Miyashita, CEO of Leafly. “Our new go-to-market initiatives, coupled with Leafly’s strong value proposition has deepened relationships with high-value customers. Just as importantly, we continue to enhance the consumer experience, providing more value with deal types, delivery options and deeper search capabilities to drive conversion to sales back to retailers and brands.”

Second Quarter Financial Results

 

The non-GAAP financial measures EBITDA and adjusted EBITDA are presented in this release. See the reconciliations of such non-GAAP financial measures to their most comparable GAAP measures in the tables included in this release below.

“Through diligent management of expenses, we achieved positive adjusted EBITDA in the second quarter, highlighting our efforts toward building a durable and profitable business," said Suresh Krishnaswamy, CFO of Leafly. "We are focusing on stabilizing

 

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our recurring revenue base while emphasizing annual subscription agreements to enhance long-term revenue predictability. We remain focused on operating with efficiency and continuing on the path to profitability."

Key Performance Metrics

	Three Months Ended June 30,
	2023				2022				Change				Change (%)
Average MAUs (in thousands)		7,374				7,885				(511	)			-6	%
Ending retail accounts		5,261				5,251				10				0	%
Retailer ARPA	$	558			$	579			$	(21	)			-4	%

 

Second Quarter Business Highlights

 

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Financial Outlook

Today, Leafly is issuing third quarter 2023 guidance. Based on current business trends and conditions, the financial outlook is expected to be around $11 million in revenue and adjusted EBITDA loss to be around $0.5 million.

Leafly has not provided a quantitative reconciliation of forecasted GAAP net income (loss) to forecasted total Adjusted EBITDA within this communication because the Company is unable, without making unreasonable efforts, to calculate certain reconciling items with confidence. These items include, but are not limited to: depreciation and amortization expense from new assets; impairments of assets; changes in the valuation of any derivatives; the valuation of, and changes in, grants of equity-based compensation; and gains or losses on modification or extinguishment of debt. These items, which could materially affect the computation of forward-looking GAAP net income (loss), are inherently uncertain and depend on various factors, many of which are outside of Leafly’s control. For more information regarding the non-GAAP financial measures discussed in this communication, please see “Non-GAAP Financial Measures” below.

 

Webcast and Conference Call Information

Leafly will host a conference call and webcast to discuss the results today, Thursday, August 10, 2023 at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). A live webcast of the call can be accessed from Leafly’s Investor Relations website at https://investor.leafly.com.

The live call may also be accessed via telephone at (833) 470-1428 toll-free domestically. Please reference conference ID: #815302. An archived version of the webcast will be available from the same website after the call.

 

 

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About Leafly

Leafly helps millions of people discover cannabis each year. Our powerful tools help shoppers make informed purchasing decisions and empower cannabis businesses to attract and retain loyal customers through advertising and technology services. Learn more at Leafly.com or download the Leafly mobile app through Apple’s App Store or Google Play.

Definitions of Key Performance Metrics

Monthly active users

Monthly active users (“MAUs”) represents the total unique visitors to Leafly websites and native apps each month, which in turn is a top-of-the-funnel metric that represents the maximum potential unique visitors that could become a customer of a dispensary or brand listed on Leafly’s platform, within a given month.

Leafly is reexamining its MAU metric and expects to discontinue reporting it in its next quarterly filing as we continue to implement a content-shift to focus on compelling and engaging content that helps drive shopping behaviors farther down the funnel.

Ending retail accounts

Ending retail accounts is the number of paying retailer accounts with Leafly as of the last month of the respective period. Retail accounts can include more than one retailer.

Retailer average revenue per account

Retailer ARPA is calculated as monthly retail revenue, on an account basis, divided by the number of retail accounts that were active during that same month. An active account is one that had an active paying subscription with Leafly in the month. Leafly does not provide retailers with an ongoing free subscription offering but may offer a free introductory period with certain subscriptions.

 

 

 

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Cautionary Statement Regarding Forward Looking Statements

This document contains certain forward-looking statements within the meaning of the federal securities laws, including statements regarding the services offered by Leafly and the markets in which Leafly operates, business strategies, performance metrics, industry environment, potential growth opportunities, Leafly’s projected future results and financial outlook, and expected savings from cost-cutting measures. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “forecast,” “opportunity,” “outlook,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions (including the negative versions of such words or expressions).

Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions as of the date of this release and, as a result, are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in such forward-looking statements.

Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to Leafly’s inability to raise sufficient capital to execute its business plan; the size, demands and growth potential of the markets for Leafly’s products and services and Leafly’s ability to serve those markets; the impact of worldwide economic conditions, including the resulting effect on consumer spending at local businesses and the level of advertising spending by local businesses; the degree of market acceptance and adoption of Leafly’s products and services; and the other risks and uncertainties described in the “Risk Factors” section of the Annual Report on Form 10-K filed by Leafly with the SEC on March 29, 2023, and in the other documents filed by Leafly from time to time with the SEC.

These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Leafly assumes no obligation and, except as required by law, does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. Leafly does not give any assurance that it will achieve its expectations.
 

 

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LEAFLY HOLDINGS, INC

CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED

(in thousands, except per share amounts)

 

 

	June 30, 2023				December 31, 2022
ASSETS
Current assets
Cash and cash equivalents	$	14,118			$	24,594
Accounts receivable, net of allowance for doubtful accounts of $1,404 and $908, respectively		3,589				3,298
Prepaid expenses and other current assets		3,186				1,792
Restricted cash		360				360
Total current assets		21,253				30,044
Property, equipment, and software, net		2,649				2,285
Restricted cash - long-term portion		251				248
Other assets		75				135
Total assets	$	24,228			$	32,712
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable	$	962			$	1,625
Accrued expenses and other current liabilities		3,838				6,235
Deferred revenue		2,017				1,958
Total current liabilities		6,817				9,818
Non-current liabilities
Non-current portion of convertible promissory notes, net		29,136				28,863
Private warrants derivative liability		121				182
Escrow shares derivative liability		6				52
Stockholder earn-out rights derivative liability		30				204
Total non-current liabilities		29,293				29,301
Total liabilities		36,110				39,119
Commitments and contingencies
Stockholders' deficit
Preferred stock		—				—
Common stock		4				4
Treasury stock		(31,663	)			(31,663	)
Additional paid-in capital		91,310				89,952
Accumulated deficit		(71,533	)			(64,700	)
Total stockholders' deficit		(11,882	)			(6,407	)
Total liabilities and stockholders' deficit	$	24,228			$	32,712

 

 

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LEAFLY HOLDINGS, INC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED

(in thousands, except per share amounts)

 

 

	Three Months Ended June 30,								Six Months Ended June 30,
	2023				2022				2023				2022
Revenue	$	10,675			$	12,050			$	21,924			$	23,470
Cost of revenue		1,238				1,441				2,584				2,896
Gross profit		9,437				10,609				19,340				20,574
Operating expenses
Sales and marketing		2,852				8,112				7,763				15,126
Product development		2,320				4,056				5,600				7,521
General and administrative		5,016				7,310				11,676				14,241
Total operating expenses		10,188				19,478				25,039				36,888
Loss from operations		(751	)			(8,869	)			(5,699	)			(16,314	)
Interest expense, net		(724	)			(717	)			(1,437	)			(1,414	)
Change in fair value of derivatives		14				24,397				281				14,000
Other income (expense), net		25				(52	)			22				(889	)
Net (loss) income	$	(1,436	)		$	14,759			$	(6,833	)		$	(4,617	)
Net (loss) income per share:
Basic	$	(0.04	)		$	0.39			$	(0.17	)		$	(0.13	)
Diluted	$	(0.04	)		$	0.37			$	(0.17	)		$	(0.13	)
Weighted average shares outstanding:
Basic		39,509				37,415				39,109				35,097
Diluted		39,509				42,041				39,109				35,097

 

 

 

 

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LEAFLY HOLDINGS, INC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED

(in thousands)

 

 

	Six Months Ended June 30,
	2023				2022
Cash flows from operating activities
Net loss	$	(6,833	)		$	(4,617	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		421				149
Stock-based compensation expense		1,238				2,388
Bad debt expense		1,410				640
Loss on disposition of assets		9				—
Noncash amortization of debt discount		273				233
Noncash interest expense associated with convertible debt		—				243
Noncash change in fair value of derivatives		(281	)			(14,000	)
Other		(6	)			13
Changes in operating assets and liabilities:
Accounts receivable		(1,701	)			(687	)
Prepaid expenses and other current assets		(1,334	)			(3,977	)
Accounts payable		(663	)			1,456
Accrued expenses and other current liabilities		(2,399	)			(713	)
Deferred revenue		59				492
Net cash used in operating activities		(9,807	)			(18,380	)
Cash flows from investing activities
Additions of property, equipment, and software		(788	)			(1,415	)
Net cash used in investing activities		(788	)			(1,415	)
Cash flows from financing activities
Proceeds from exercise of stock options		—				157
Proceeds from convertible promissory notes		—				29,374
Proceeds from business combination placed in escrow and restricted		—				39,032
Trust proceeds received from recapitalization at closing		—				582
Issuance of common stock under ESPP		120				—
Transaction costs associated with recapitalization		—				(10,761	)
Advances (repayments) of related party payables		2				(18	)
Net cash provided by financing activities		122				58,366
Net (decrease) increase in cash, cash equivalents, and restricted cash		(10,473	)			38,571
Cash, cash equivalents, and restricted cash, beginning of period		25,202				28,695
Cash, cash equivalents, and restricted cash, end of period	$	14,729			$	67,266

 

 

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LEAFLY HOLDINGS, INC

NON-GAAP FINANCIAL MEASURES - UNAUDITED

(in thousands)

Earnings Before Interest, Taxes and Depreciation and Amortization (EBITDA) and Adjusted EBITDA

To provide investors with additional information regarding our financial results, we have disclosed EBITDA and Adjusted EBITDA, both of which are non-GAAP financial measures that we calculate as net loss before interest, taxes and depreciation and amortization expense in the case of EBITDA and further adjusted to exclude non-cash, unusual and/or infrequent costs in the case of Adjusted EBITDA. Below we have provided a reconciliation of net (loss) income (the most directly comparable GAAP financial measure) to EBITDA and from EBITDA to Adjusted EBITDA.

 

We present EBITDA and Adjusted EBITDA because these metrics are a key measure used by our management to evaluate our operating performance, generate future operating plans, and make strategic decisions regarding the allocation of investment capacity. Accordingly, we believe that EBITDA and Adjusted EBITDA provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management.

 

EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider either in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are as follows:

 

Because of these limitations, you should consider EBITDA and Adjusted EBITDA alongside other financial performance measures, including net (loss) income and our other GAAP results.

 

A reconciliation of net (loss) income to non-GAAP EBITDA and Adjusted EBITDA is as follows:

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2023				2022				2023				2022
Net (loss) income		$	(1,436	)		$	14,759			$	(6,833	)		$	(4,617	)
Interest expense, net			724				717				1,437				1,414
Depreciation and amortization expense			226				97				421				149
EBITDA			(486	)			15,573				(4,975	)			(3,054	)
Stock-based compensation			580				464				1,238				2,388
Transaction expenses allocated    to derivatives			—				—				—				874
Severance			—				—				754				—
Change in fair value of derivatives			(14	)			(24,397	)			(281	)			(14,000	)
Adjusted EBITDA		$	80			$	(8,360	)		$	(3,264	)		$	(13,792	)

 

 

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Contacts

Media

Josh deBerge

josh.deberge@leafly.com

206-445-9387

 

Investors

Stacie Clements

IR@leafly.com

 

Source: Leafly Holdings, Inc.

 

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v3.23.2

Cover	Aug. 10, 2023
Entity Listings [Line Items]
Document Type	8-K
Document Period End Date	Aug. 10, 2023
Entity Registrant Name	Leafly Holdings, Inc. /DE
Entity Incorporation, State or Country Code	DE
Entity File Number	001-39119
Entity Tax Identification Number	84-2266022
Entity Address, State or Province	WA
Entity Address, City or Town	Seattle
Entity Address, Address Line One	113 Cherry Street
Entity Address, Address Line Two	PMB 88154
Entity Address, Postal Zip Code	98104-2205
City Area Code	206
Local Phone Number	455-9504
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Central Index Key	0001785592
Amendment Flag	false
Common Stock
Entity Listings [Line Items]
Title of 12(b) Security	Common Stock
Trading Symbol	LFLY
Security Exchange Name	NASDAQ
Warrants
Entity Listings [Line Items]
Title of 12(b) Security	Warrants
Trading Symbol	LFLYW
Security Exchange Name	NASDAQ

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