Leafly Announces Cost Reductions to Strengthen Financial Profile

Today, Leafly (NASDAQ: LFLY), a leading online cannabis information resource and marketplace, announced a headcount reduction of 56 positions – or 21 percent of the company’s workforce through a combination of layoffs and attrition – to ensure its long-term health. The company expects a one-time cash restructuring charge for the layoffs of approximately $500,000 in Q4 of 2022.

In addition, the company has otherwise realigned its cost structure in response to changing market conditions, resulting in additional expected cost savings, for total expected annual cash savings of approximately $16 million beginning in 2023, primarily in headcount-related costs. These cost-cutting measures allow the company to prioritize growth opportunities, realign its expense structure, and preserve capital while strengthening its financial position.

“These reductions will help preserve our ability to respond to opportunities as this industry continues to mature and expand, and allow us to more effectively manage our capital,” said Yoko Miyashita, CEO of Leafly. “In addition to cutting costs, we have taken a close look at our structure to ensure we are prioritizing the most meaningful parts of the business. I have a great amount of gratitude for each and every one of our team members who have helped build Leafly into the world-class brand and platform it is today.”

The Company also announced that Sam Martin, Chief Operating Officer, is leaving effective December 31, 2022, after seven years with the company, to pursue the next chapter in his life and to spend more time with his family.

Preliminary Third Quarter 2022 Financial Results and Guidance

The company also issued the following preliminary Q3 2022 revenue results and Adjusted EBITDA guidance:

• Revenue is expected to be approximately $11.8 million, or approximately 8% year over year growth.
• Adjusted EBITDA loss is expected to be in the range of approximately $(6.0) million to $(5.0) million.

Leafly has not provided a quantitative reconciliation of forecasted GAAP net income (loss) to forecasted total Adjusted EBITDA within this communication because it is unable, without making unreasonable efforts, to calculate certain reconciling items with confidence at this time. 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; 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 “Adjusted Earnings Before Interest, Taxes and Depreciation and Amortization (Adjusted EBITDA)” below.