10-Q

ROC

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-39119

Leafly Holdings, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware	84-2266022
(State or other jurisdiction of incorporation or organization)	(I.R.S. 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

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, $0.0001 Par Value	LFLY	The Nasdaq Stock Market LLC
Warrants, exercisable for shares of common stock at an exercise price of $11.50 per share	LFLYW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 8, 2023, the registrant had 2,177,721 shares of common stock, $0.0001 par value per share, outstanding.

INDEX

		Page
	Cautionary Note Regarding Forward-Looking Statements	2
Part I	Financial Information
Item 1.	Condensed Consolidated Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022 (Audited)	3
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2023 and 2022	4
	Condensed Consolidated Statements of Changes in Stockholders Deficit for the Three and Nine Months Ended September 30, 2023 and 2022	5
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	44
Part II	Other Information
Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	44
Item 6.	Exhibits	45

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (“Quarterly Report”) contains a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of present or historical fact included in or incorporated by reference in this Quarterly Report regarding Leafly Holdings, Inc.’s (the “Company’s”) future financial performance, as well as the Company’s strategy, future operations, future operating results, financial position, estimated revenues, and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may,” “expect,” “anticipate,” “believe,” “estimate,” “intend,” “project,” “plan,” “will,” “could,” “would,” “potential,” “strategy,” “focus,” and “continue” or similar words. These forward-looking statements include all matters that are not historical facts. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. You should read statements that contain these words carefully because they:

•discuss future expectations;

•contain projections of future results of operations or financial condition; or

•state other “forward-looking” information.

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report.

All forward-looking statements included herein attributable to the Company or any person acting on the Company’s behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. These cautionary statements are being made pursuant to federal securities laws with the intention of obtaining the benefits of the “safe harbor” provisions of such laws. Except to the extent required by applicable laws and regulations, the Company undertakes no obligations to update these forward-looking statements to reflect events or circumstances after the date of this Quarterly Report or to reflect the occurrence of unanticipated events.

There may be events in the future that the Company is not able to predict accurately or over which it has no control. The section in the Company’s Annual Report on Form 10-K for the year ended 2022 (“2022 Annual Report”) and in the Company’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023 (“1Q 2023 10-Q”) and June 30, 2023 (“2Q 2023 10-Q,” collectively the “2023 10-Qs”) and in this Quarterly Report entitled “Risk Factors,” and the section of this Quarterly Report entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the other cautionary language discussed in this report provide examples of risks, uncertainties and events that may cause actual results to differ materially from the expectations described by the Company in such forward-looking statements. These examples include:

•the Company’s inability to raise sufficient capital or financing in the future to execute its business plan;

•the size, demands and growth potential of the markets for the Company’s products and services and the Company’s ability to serve those markets;

•the impact of worldwide economic conditions, including the resulting effect on consumer spending at local cannabis retailers and the level of advertising spending by such retailers;

•the degree of market acceptance and adoption of the Company’s products, services and pricing changes;

•the Company’s ability to attract and retain customers;

•the Company’s success in retaining or recruiting officers, key employees or directors;

•the Company’s ability to satisfy the Nasdaq Stock Market LLC’s (“Nasdaq”) continued listing requirements and maintain the listing of the Company’s shares of common stock on Nasdaq or another national securities exchange;

•the impact of the regulatory environment and complexities with compliance related to such environment, including compliance with restrictions imposed by federal law; and

•factors relating to the business, operations and financial performance of the Company and its subsidiaries.

Note Regarding Reverse Stock Split

On September 12, 2023, the Company implemented a one-for-twenty reverse split of its common stock (Note 12). To facilitate comparative analysis, all statements in this Quarterly Report regarding numbers of shares of common stock and all references to prices of a share of common stock, if referencing events or circumstances occurring prior to September 12, 2023, have been retroactively restated to reflect the effect of the reverse stock split on a pro forma basis.

2

Part I - Financial Information


Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

LEAFLY HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

	September 30, 2023			December 31, 2022
ASSETS
Current assets
Cash and cash equivalents	$	14,469		$	24,594
Accounts receivable, net of allowance for doubtful accounts of $1,400 and $908, respectively		3,409			3,298
Prepaid expenses and other current assets		2,339			1,792
Restricted cash		—			360
Total current assets		20,217			30,044
Property, equipment, and software, net		2,541			2,285
Restricted cash - long-term portion		249			248
Other assets		55			135
Total assets	$	23,062		$	32,712
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable	$	1,609		$	1,625
Accrued expenses and other current liabilities		2,990			6,235
Deferred revenue		2,095			1,958
Total current liabilities		6,694			9,818
Non-current liabilities
Non-current portion of convertible promissory notes, net		29,272			28,863
Private warrants derivative liability		113			182
Escrow shares derivative liability		5			52
Stockholder earn-out rights derivative liability		25			204
Total non-current liabilities		29,415			29,301
Total liabilities		36,109			39,119
Commitments and contingencies (Note 8)
Stockholders' deficit
Preferred stock: $0.0001 par value; 5,000 and 5,000 authorized; 0 and 0 issued and outstanding; aggregate liquidation preference of $0 and $0 at September 30, 2023 and December 31, 2022, respectively		—			—
Common stock: $0.0001 par value; 200,000 and 200,000 authorized; 2,311 and 2,164 issued at September 30, 2023 and December 31, 2022, respectively		—			—
Treasury stock: 154 and 154 shares held at September 30, 2023 and December 31, 2022, respectively		(31,663	)		(31,663	)
Additional paid-in capital		92,359			89,956
Accumulated deficit		(73,743	)		(64,700	)
Total stockholders' deficit		(13,047	)		(6,407	)
Total liabilities and stockholders' deficit	$	23,062		$	32,712

See Notes to Condensed Consolidated Financial Statements.

3

LEAFLY HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Revenue	$	10,583		$	11,781		$	32,507		$	35,251
Cost of revenue		1,163			1,515			3,747			4,411
Gross profit		9,420			10,266			28,760			30,840
Operating expenses
Sales and marketing		2,563			6,403			10,326			21,529
Product development		2,533			3,406			8,133			10,927
General and administrative		5,799			6,489			17,475			20,730
Total operating expenses		10,895			16,298			35,934			53,186
Loss from operations		(1,475	)		(6,032	)		(7,174	)		(22,346	)
Interest expense, net		(720	)		(705	)		(2,157	)		(2,119	)
Change in fair value of derivatives		14			22,264			295			36,264
Other income (expense), net		(29	)		(73	)		(7	)		(962	)
Net (loss) income	$	(2,210	)	$	15,454		$	(9,043	)	$	10,837
Net (loss) income per share:
Basic	$	(1.10	)	$	8.69		$	(4.58	)	$	6.15
Diluted	$	(1.10	)	$	5.64		$	(4.58	)	$	5.45
Weighted average shares outstanding:
Basic		2,011			1,779			1,974			1,763
Diluted		2,011			2,149			1,974			1,924

See Notes to Condensed Consolidated Financial Statements.

4

LEAFLY HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

(in thousands)

	Three and Nine Months Ended September 30, 2023
	Preferred Stock				Common Stock				Treasury Stock						Additional Paid-In Capital		Accumulated Deficit			Total
	Shares		Amount		Shares		Amount		Shares			Amount
Balance at January 1, 2023		—	$	—		2,164	$	—		(154	)	$	(31,663	)	$	89,956	$	(64,700	)	$	(6,407	)
Net loss		—		—		—		—		—			—			—		(5,397	)		(5,397	)
Stock-based compensation		—		—		—		—		—			—			658		—			658
Exercise of stock options		—		—		—		—		—			—			—		—			—
Issuance of common stock under ESPP		—		—		14		—		—			—			120		—			120
Issuance of common stock upon vesting of restricted stock units		—		—		14		—		—			—			—		—			—
Balance at March 31, 2023		—	$	—		2,192	$	—		(154	)	$	(31,663	)	$	90,734	$	(70,097	)	$	(11,026	)
Balance at April 1, 2023		—		—		2,192		—		(154	)		(31,663	)		90,734		(70,097	)		(11,026	)
Net loss		—		—		—		—		—			—			—		(1,436	)		(1,436	)
Stock-based compensation		—		—		—		—		—			—			580		—			580
Exercise of stock options		—		—		—		—		—			—			—		—			—
Issuance of common stock under ESPP		—		—		—		—		—			—			—		—			—
Issuance of common stock upon vesting of restricted stock units		—		—		31		—		—			—			—		—			—
Balance at June 30, 2023		—	$	—		2,223	$	—		(154	)	$	(31,663	)	$	91,314	$	(71,533	)	$	(11,882	)
Balance at July 1, 2023		—		—		2,223		—		(154	)		(31,663	)		91,314		(71,533	)		(11,882	)
Net loss		—		—		—		—		—			—			—		(2,210	)		(2,210	)
Stock-based compensation		—		—		—		—		—			—			997		—			997
Reverse stock split		—		—		34		—		—			—			—		—			—
Exercise of stock options		—		—		—		—		—			—			—		—			—
Issuance of common stock under ESPP		—		—		6		—		—			—			48		—			48
Issuance of common stock upon vesting of restricted stock units		—		—		48		—		—			—			—		—			—
Balance at September 30, 2023		—	$	—		2,311	$	—		(154	)	$	(31,663	)	$	92,359	$	(73,743	)	$	(13,047	)

5

LEAFLY HOLDINGS, INC

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT (Continued)

(in thousands)

	Three and Nine Months Ended September 30, 2022
	Preferred Stock						Common Stock					Treasury Stock						Additional Paid-In Capital			Accumulated Deficit			Total
	Shares			Amount			Shares			Amount		Shares			Amount
Balance at January 1, 2022		307		$	1			1,254			—		—		$	—		$	61,197		$	(69,770	)	$	(8,572	)
Net loss		—			—			—			—		—			—			—			(19,376	)		(19,376	)
Stock-based compensation		—			—			—			—		—			—			1,924			—			1,924
Exercise of stock options		—			—			6			—		—			—			127			—			127
Conversion of 2021 Notes into Common Stock upon Business Combination		—			—			207			—		—			—			33,024			—			33,024
Conversion of Preferred Stock into Common Stock upon Business Combination		(307	)		(1	)		307			—		—			—			1			—			—
Merger and recapitalization, net of fees		—			—			100			—		—			—			27,997			—			27,997
Stockholder contribution for debt issuance costs		—			—			—			—		—			—			924			—			924
Escrow shares derivative liability		—			—			81			—		—			—			(6,867	)		—			(6,867	)
Private warrants derivative liability		—			—			—			—		—			—			(3,916	)		—			(3,916	)
Forward share purchase agreement derivative liability		—			—			193			—		—			—			(14,170	)		—			(14,170	)
Stockholder earn-out rights derivative liability		—			—			—			—		—			—			(26,131	)		—			(26,131	)
Balance at March 31, 2022		—		$	—			2,148			—		—		$	—		$	74,110		$	(89,146	)	$	(15,036	)
Balance at April 1, 2022		—			—			2,148			—		—			—			74,110			(89,146	)		(15,036	)
Net income		—			—			—			—		—			—			—			14,759			14,759
Stock-based compensation		—			—			—			—		—			—			464			—			464
Exercise of stock options		—			—			1			—		—			—			30			-			30
Balance at June 30, 2022		—		$	—			2,149			—		—			—			74,604			(74,387	)		217
Balance at July 1, 2022		—			—			2,149			—		—			—			74,604			(74,387	)		217
Net income		—			—			—			—		—			—			—			15,454			15,454
Shares canceled		—			—			(1	)		—		—			—			—			—			—
Stock-based compensation		—			—			—			—		—			—			771			—			771
Exercise of stock options		—			—			—			—		—			—			1			—			1
Vesting of restricted stock units		—			—			4			—		—			—			—			—			—
Settlement of forward share purchase agreement derivative liability		—			—			—			—		—			—			(17,841	)		—			(17,841	)
Purchase of treasury stock		—			—			—			—		(154	)		(31,663	)		31,663			—			—
Balance at September 30, 2022		—		$	—			2,152			—		(154	)	$	(31,663	)	$	89,198		$	(58,933	)	$	(1,398	)

See Notes to Condensed Consolidated Financial Statements.

6

LEAFLY HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Nine Months Ended September 30,
	2023			2022
Cash flows from operating activities
Net (loss) income	$	(9,043	)	$	10,837
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		697			276
Stock-based compensation expense		2,235			3,159
Bad debt expense, net of recoveries		2,350			1,023
Loss on disposition of assets		63			—
Noncash amortization of debt discount		409			369
Noncash interest expense associated with convertible debt		—			243
Noncash change in fair value of derivatives		(295	)		(36,264	)
Other		(1	)		15
Changes in operating assets and liabilities:
Accounts receivable		(2,461	)		(675	)
Prepaid expenses and other current assets		(467	)		(2,222	)
Accounts payable		(16	)		173
Accrued expenses and other current liabilities		(3,246	)		(2,141	)
Deferred revenue		137			77
Net cash used in operating activities		(9,638	)		(25,130	)
Cash flows from investing activities
Additions of property, equipment, and software		(1,042	)		(2,194	)
Proceeds from sale of property and equipment		27			—
Net cash used in investing activities		(1,015	)		(2,194	)
Cash flows from financing activities
Proceeds from exercise of stock options		—			158
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		168			—
Repurchase of common stock and settlement of forward purchase agreements		—			(31,303	)
Transaction costs associated with recapitalization		—			(10,761	)
Advances (repayments) of related party payables		1			(17	)
Net cash provided by financing activities		169			27,065
Net decrease in cash, cash equivalents, and restricted cash		(10,484	)		(259	)
Cash, cash equivalents, and restricted cash, beginning of period		25,202			28,695
Cash, cash equivalents, and restricted cash, end of period	$	14,718		$	28,436

	Nine Months Ended September 30,
	2023		2022
Supplemental disclosure of non-cash financing activities:
Stockholder contribution for debt issuance costs	$	—	$	924
Repurchase of common stock in other accrued expenses		—		360
Conversion of promissory notes into common stock		—		33,024
Issuance of forward share purchase agreements		—		14,170
Issuance of private warrants		—		3,916
Issuance of sponsor shares subject to earn-out conditions		—		6,867
Issuance of stockholder earn-out rights		—		26,131

See Notes to Condensed Consolidated Financial Statements.

7

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except per share amounts)

NOTE 1 — Description of the Business and Merger

Description of the Business

Leafly Holdings, Inc. (“Leafly” or “the Company”) is an online cannabis discovery marketplace and resource for cannabis consumers. Leafly provides an information resource platform with a deep library of content, including detailed information about cannabis strains, retailers and current events. Leafly was incorporated in the state of Delaware on June 20, 2019 and is headquartered in Seattle, Washington.

The Company has three wholly-owned subsidiaries, Leafly Canada Ltd., Leafly Deutschland GmbH and Leafly, LLC (“Legacy Leafly”). Legacy Leafly is the accounting predecessor of Leafly. The accompanying consolidated financial statements include the financial results of the Company and its wholly-owned subsidiaries.

Merger with Merida

On February 4, 2022, Leafly consummated the previously announced mergers and related transactions (collectively, the “Merger”) pursuant to the Agreement and Plan of Merger dated August 9, 2021 and amended on September 8, 2021 and on January 11, 2022 (as amended, the “Merger Agreement”). Legacy Leafly (formerly known as Leafly Holdings, Inc.) entered into the Merger Agreement with Merida Merger Corp. I (“Merida”), Merida Merger Sub, Inc., a Washington corporation (“Merger Sub I”) and Merida Merger Sub II, LLC, a Washington limited liability company (“Merger Sub II” and, together with Merger Sub I, the “Merger Subs”). Merger Sub I merged with and into Legacy Leafly, with Legacy Leafly surviving as a wholly-owned subsidiary of Merida, and following the initial Merger and as part of a single integrated transaction with the initial Merger, Legacy Leafly merged with and into Merger Sub II, with Merger Sub II surviving as a wholly-owned subsidiary of Merida. As a result of these Mergers, Legacy Leafly became a wholly owned subsidiary of Merida and was renamed Leafly, LLC, Merida was renamed Leafly Holdings, Inc. (“New Leafly”), and the securityholders of Legacy Leafly became security holders of New Leafly. We sometimes refer to the Mergers described above and the other transactions contemplated by the Merger Agreement and the other agreements being entered into by Merida and Legacy Leafly in connection with the Mergers as the “Business Combination” and to Merida following the Business Combination as “New Leafly.”

While the legal acquirer in the Business Combination is Merida, for financial accounting and reporting purposes under accounting principles generally accepted in the United States of America (“GAAP”), Legacy Leafly is the accounting acquirer with the Merger accounted for as a “reverse recapitalization.” A reverse recapitalization does not result in a new basis of accounting, and the financial statements of the combined entity represent the continuation of the financial statements of Legacy Leafly. Under this accounting method, Merida is treated as the “acquired” company and Legacy Leafly is the accounting acquirer, with the transaction treated as a recapitalization of Legacy Leafly. Merida’s assets, liabilities and results of operations were consolidated with Legacy Leafly’s beginning on the date of the Business Combination. Except for certain derivative liabilities, the assets and liabilities of Merida were recognized at historical cost (which is consistent with carrying value) and were not material, with no goodwill or other intangible assets recorded. The derivative liabilities, which are discussed in Notes 13 and 18, were recorded at fair value. The consolidated assets, liabilities, and results of operations of Legacy Leafly became the historical financial statements, and operations prior to the closing of the Business Combination presented for comparative purposes are those of Legacy Leafly. Pre-Merger shares of common stock and preferred stock were converted to shares of common stock of the combined company using the conversion ratio of 0.0164 and for comparative purposes, the shares and net loss per share of Legacy Leafly, prior to the Merger, have been retroactively restated using the conversion ratio.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued

(in thousands, except per share amounts)

NOTE 2 — Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The interim condensed consolidated financial statements have been prepared in accordance with GAAP and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting and should be read in conjunction with the Company's audited consolidated financial statements for the years ended December 31, 2022 and 2021, and Management’s Discussion and Analysis of Financial Condition and Results of Operations of Leafly for the year ended December 31, 2022, each of which was filed with the SEC on March 29, 2023 (the “2022 Financial Information”).

These condensed consolidated financial statements are unaudited and, in management's opinion, include all adjustments, consisting of normal recurring estimates and accruals necessary for a fair presentation of our consolidated cash flows, operating results, and balance sheets for the periods presented. Actual results may differ from these estimates and assumptions. The results of operations for any interim periods are not necessarily indicative of the results that may be expected for the entire fiscal year or any other interim period. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted in accordance with the rules and regulations of the SEC for interim reporting. All intercompany balances and transactions have been eliminated upon consolidation.

Going Concern Evaluation

Under the rules of ASC Subtopic 205-40 “Presentation of Financial Statements-Going Concern” (“ASC 205-40”), reporting companies are required to evaluate whether conditions and/or events raise substantial doubt about their ability to meet their future financial obligations as they become due within one year after the date that the financial statements are issued. This evaluation takes into account a company’s current available cash and projected cash needs over the one-year evaluation period but may not consider things beyond its control. Leafly has experienced revenue declines, incurred recurring operating losses, used cash from operations, and relied on the capital raised in the Business Combination to continue ongoing operations. These conditions, when considered in the aggregate, raise substantial doubt about Leafly’s ability to continue as a going concern within one year of the date these financial statements are issued. In response to these conditions, Leafly management took the following actions:

•During the fourth quarter of 2022, Leafly implemented a restructuring plan, including a reduction in force reflecting primarily one-time severance and other employee-related termination benefits incurred during the fourth quarter of 2022.

•During the three months ended March 31, 2023, Leafly announced a second restructuring plan further seeking to reduce recurring costs and operating expenditures and identifying cost savings based on a reduction in force reflecting primarily one-time severance and other employee-related termination benefits incurred during the first quarter of 2023.

The restructuring plans above have been implemented and are expected to continue contributing to the cash savings of the Company. The Company’s management is closely monitoring and reducing operating expenses where it is able to, while ensuring the trajectory and viability of the business remains intact. After considering all available evidence, Leafly’s management determined that, based on the cost reduction measures outlined in both actions above, Leafly’s current positive working capital will be sufficient to meet its capital requirements for a period of at least 12 months from the date that these September 30, 2023 financial statements are issued.

Reverse Stock Split

On September 12, 2023, the Company implemented a one-for-twenty reverse split of its common stock (Note 12). To facilitate comparative analysis, all statements in this Quarterly Report regarding numbers of shares of common stock and all references to prices of a share of common stock, if referencing events or circumstances occurring prior to September 12, 2023, have been retroactively restated to reflect the effect of the reverse stock split on a pro forma basis.

9

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued

(in thousands, except per share amounts)

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on the reported net (loss) income.

Seasonality

We may experience seasonality in our business, which we believe has moderate impacts on our overall revenue. In certain years, we've seen seasonal fluctuations that coincide with either federal holidays, generally in the fourth quarter, or industry holidays and events, generally in the spring. Our industry and business history is limited and therefore we cannot be certain that these are known trends or that other trends may develop.

Emerging Growth Company Status

Leafly is an emerging growth company (“EGC”), as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). Under the JOBS Act, EGCs can delay adopting new or revised accounting standards issued until such time as those standards apply to private companies. The Company has elected to use this extended transition period. In providing this relief, the JOBS Act does not preclude the Company from adopting a new or revised accounting standard earlier than the time that such standard applies to private companies. Leafly will continue to use this relief until the earlier of the date that it (a) is no longer an EGC or (b) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of revenue and expenses in the condensed consolidated financial statements and accompanying notes. On an ongoing basis, management evaluates its estimates. Such estimates include those related to the fair value of derivative liabilities; the allowance for doubtful accounts; the valuation allowance for deferred income tax assets; the fair value of the convertible promissory notes; the estimate of capitalized software costs and useful life of capitalized software; and the fair value of equity issuances. Management bases its estimates on historical experience, knowledge of current events and actions it may undertake in the future that management believes to be reasonable under the circumstances. Actual results may differ from these estimates and assumptions.

Significant Accounting Policies

The unaudited interim financial statements should be read in conjunction with the Company's 2022 Financial Information, which describes the Company's significant accounting policies. There have been no material changes to the Company's significant accounting policies during the nine months ended September 30, 2023 compared to our 2022 Annual Report.

Recent Accounting Pronouncements

Accounting Pronouncements Issued But Not Yet Adopted

Management does not believe that there are any recently issued, but not yet effective, accounting standards that, if currently adopted, would have a material effect on the Company’s consolidated financial statements or related disclosures.

10

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued

(in thousands, except per share amounts)

NOTE 3 — Cash, Cash Equivalents, and Restricted Cash

Cash, cash equivalents, and restricted cash consisted of the following:

	September 30, 2023		December 31, 2022
Cash and cash equivalents	$	14,469	$	24,594
Restricted cash		—		360
Restricted cash - long-term portion		249		248
	$	14,718	$	25,202

The restricted cash balance at December 31, 2022 included $360 of cash maintained in escrow related to Forward Share Purchase Agreements (“FPAs”). Effective August 1, 2022, the “FPA Holders” elected to have Leafly repurchase their remaining 154 shares covered by the FPAs for an aggregate repurchase price of $31,663. As a result, the shares repurchased have been removed from Leafly's outstanding shares effective as of the date of purchase and placed into treasury. The FPA Holders elected to have all but $360 disbursed from the escrow account and were able to claim the remainder any time until August 1, 2023. On July 11, 2023, Leafly returned $360 of restricted cash to the FPA Holders pursuant to the terms of the FPAs. Additional information regarding the FPAs is included in Notes 13 and 18.

NOTE 4 — Prepaid Expenses and Other Assets

Prepaid expenses and other assets consist of the following:

	September 30, 2023		December 31, 2022
Prepaid subscriptions	$	703	$	916
Prepaid insurance		1,277		533
Other prepaid assets		186		272
Other current assets		173		71
Subtotal, current portion		2,339		1,792
Prepaid expenses, long-term portion		55		135
Total	$	2,394	$	1,927

11

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued

(in thousands, except per share amounts)

NOTE 5 — Accounts Receivable, Net

Accounts receivable, net of $3,409 and $3,298 as of September 30, 2023 and December 31, 2022, respectively, consisted of amounts due from customers less an allowance for doubtful accounts. For further information about revenue and deferred revenues, see Note 9.

The following table presents the allowance for doubtful accounts and the changes therein:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Balance, beginning of period	$	1,404		$	1,469		$	908		$	1,848
Add: provision for doubtful accounts, net of recoveries		940			383			2,350			1,023
Less: write-offs		(944	)		(894	)		(1,858	)		(1,913	)
Balance, end of period	$	1,400		$	958		$	1,400		$	958

NOTE 6 — Property, Equipment, and Software, Net

Property, equipment, and software consisted of the following:

	September 30, 2023			December 31, 2022
Furniture and equipment	$	454		$	740
Capitalized internal-use software		3,352			2,310
		3,806			3,050
Less: accumulated depreciation and amortization		(1,265	)		(765	)
	$	2,541		$	2,285

The Company recognized depreciation and amortization expense as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Depreciation expense	$	21	$	37	$	68	$	135
Amortization of capitalized internal-use software		255		90		629		141
Total depreciation and amortization	$	276	$	127	$	697	$	276

During the nine months ended September 30, 2023, the Company disposed of equipment with a book value of $90 for $27, resulting in a loss on disposal of $63. During the three months ended September 30, 2023, the Company disposed of equipment with a book value of $88 for $16, resulting in a loss on disposal of $72.

12

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued

(in thousands, except per share amounts)

NOTE 7 — Accrued Expenses and Other Current Liabilities

Accrued expenses consisted of the following:

	September 30, 2023		December 31, 2022
Accrued bonuses	$	922	$	1,309
Other employee-related liabilities		1,068		2,403
Accrued interest		400		1,000
Other accrued expenses 1		600		1,523
	$	2,990	$	6,235

1.There are no individual items within this balance that exceed 10% of the total of the table.

NOTE 8 — Commitments and Contingencies

In the normal course of business, the Company may receive inquiries or become involved in legal disputes regarding various litigation matters. In the opinion of management, any potential liabilities resulting from such claims would not have a material adverse effect on the Company’s consolidated financial statements.

Leases

The Company does not have any leases with an original term longer than 12 months as of September 30, 2023. The Company has short-term arrangements with immaterial rental obligations for office space.

Nasdaq Notifications of Noncompliance

On October 28, 2022, the Company received a letter from the staff (the “Staff”) of Nasdaq providing notification that the Company no longer complied with the $50 million in market value of listed securities standard for continued listing on the Nasdaq Global Market under Nasdaq Listing Rule 5450(b)(2)(A) and that the Company also did not comply with either of the two alternative standards of Listing Rule 5450(b), the equity standard and the total assets and total revenue standard. On April 19, 2023, Nasdaq approved the Company’s application to transfer the listing of its common stock and warrants from the Nasdaq Global Market to the Nasdaq Capital Market, effective April 21, 2023, on the basis that the Company complied with the net income standard for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(3). The transfer of the listing resolved the October 28, 2022 noncompliance notification.

On November 2, 2022, the Company received a letter from the Staff of the Nasdaq indicating that it did not meet the requirement to maintain a minimum bid price of $1 per share, which is imposed by Nasdaq Listing Rule 5450(a)(1) for continued listing on the Nasdaq Global Market and by Nasdaq Listing Rule 5550(a)(2) for continued listing on the Nasdaq Capital Market (the “Bid Price Requirement”) and that it had until May 1, 2023 to regain compliance. On May 2, 2023, as a result of the Company not regaining compliance with the Bid Price Requirement, the Company received a letter from Nasdaq notifying it that the Company’s common stock would be subject to delisting from Nasdaq unless the Company timely requested a hearing before a Nasdaq Hearings Panel (the “Panel”) and submitted a plan of compliance. The Company submitted a plan, and on May 23, 2023, the Panel approved it, giving the Company until October 30, 2023 to regain compliance with the Bid Price Requirement. On September 12, 2023, the Company implemented a one-for-twenty reverse split of its common stock (Note 12), and on September 29, 2023, the Company received formal notice from Nasdaq confirming that the Company regained compliance with the Bid Price Requirement, will continue to be listed and traded on the Nasdaq Capital Market and the listing matter was closed.

13

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued

(in thousands, except per share amounts)

NOTE 9 — Revenue and Contract Balances

The following table presents the Company's revenue by service type:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Advertising 1	$	10,386	$	11,731	$	32,126	$	34,914
Other services 1		197		50		381		337
	$	10,583	$	11,781	$	32,507	$	35,251

1.Amounts for the prior period have been reclassified to conform to the current period presentation.

The following table presents the Company's revenue by geographic region:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
United States 1	$	10,155	$	11,140	$	31,213	$	32,742
All other countries 1		428		641		1,294		2,509
	$	10,583	$	11,781	$	32,507	$	35,251

1.Amounts for the prior period have been reclassified to conform to the current period presentation.

The following table presents the Company's revenue by state:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Arizona		20	%		19	%		20	%		18	%
California		12	%		13	%		12	%		11	%
Oregon		11	%		10	%		11	%		10	%

No other state comprised 10% or more of Leafly’s revenue during the nine months ended September 30, 2023 and 2022. We have a diversified set of customers; no single customer accounted for 10% or more of our revenue for the nine months ended September 30, 2023 or 2022.

The following table presents the Company's revenue by timing of recognition:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Over Time 1
Retail 2	$	9,266	$	9,042	$	27,576	$	27,286
Brands 3		929		1,758		3,571		5,067
		10,195		10,800		31,147		32,353
Point in time 1
Brands 4		388		981		1,360		2,898
	$	10,583	$	11,781	$	32,507	$	35,251

1.Amounts for the prior period have been reclassified to conform to the current period presentation.

2.Revenues from subscription services and display ads.

3.Revenues from brand profile subscriptions and digital media (including display ads and audience extension).

4.Revenues from channel advertising (including direct to consumer email).

14

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued

(in thousands, except per share amounts)

Revenues recognized over time are associated with software subscriptions, display ads and audience extension. Revenues recognized at a point in time are associated with branded content and channel advertising. There are no material variations in delivery and revenue recognition periods within the over time category.

Contract liabilities consist of deferred revenue, which is recorded on the Consolidated Balance Sheets when the Company has received consideration, or has the right to receive consideration, in advance of transferring the performance obligations under the contract to the customer.

The following table presents the Company's deferred revenue balances and changes therein:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Balance, beginning of period	$	2,017		$	2,467		$	1,958		$	1,975
Add: net increase in current period contract liabilities		1,991			1,630			2,083			1,976
Less: revenue recognized from beginning balance		(1,913	)		(2,045	)		(1,946	)		(1,899	)
Balance, end of period	$	2,095		$	2,052		$	2,095		$	2,052

A majority of the deferred revenue balance as of September 30, 2023 is expected to be recognized in the subsequent 12-month period. No other contract assets or liabilities are recorded on the Company’s Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022.

NOTE 10 — Income Taxes

The Company’s effective tax rate was 0% for the three and nine months ended September 30, 2023 and 2022. The effective tax rate was lower than the U.S. federal statutory rate of 21% due to the Company’s full valuation allowance recorded against its deferred tax assets.
 

The Company had net operating loss carryforwards (“NOLs”) for federal, state and foreign income tax purposes of approximately $85,430, $60,478 and $5,801, respectively, as of December 31, 2022. The Company's state NOL will begin to expire in 2039, and all of the Company's federal NOLs will last indefinitely.

The Internal Revenue Code of 1986, as amended (the “Code”), imposes restrictions on the utilization of NOLs in the event of an “ownership change” of a corporation. Accordingly, a company’s ability to use NOLs may be limited as prescribed under Code Section 382 (“IRC Section 382”). Events which may cause limitations in the amount of the NOLs that the Company may use in any one year include, but are not limited to, a cumulative ownership change of more than 50% over a three-year period. Utilization of the federal and state NOLs may be subject to substantial annual limitation due to the ownership change limitations under IRC Section 382 and similar state provisions.

ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2023 and December 31, 2022. The Company is currently not aware of any issues under review that could result in significant payments, accruals, or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

15

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued

(in thousands, except per share amounts)

The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. Management believes all the income tax returns filed since inception remain open to examination by the major domestic and foreign taxing jurisdictions to which the Company is subject due to NOLs.

NOTE 11 — Convertible Promissory Notes

2022 Notes

Merida entered into a $30,000 convertible note purchase agreement (the “Note Purchase Agreement”) in January 2022, which Legacy Leafly subsequently guaranteed and joined as a party to the agreement on February 4, 2022 in connection with the Business Combination (the “2022 Notes”). Accordingly, post-Business Combination, the 2022 Notes are presented as a liability on Leafly's balance sheet, net of debt issuance costs and debt discount. The Company recognized debt issuance costs of $714 paid in cash, and a debt discount of $924 paid in shares transferred by Merida Holdings, LLC (the “Sponsor”) to the holders of the 2022 Notes upon issuance. The 2022 Notes bear interest at 8% annually, paid in cash semi-annually in arrears on July 31 and January 31 of each year, and mature on January 31, 2025.

The 2022 Notes are unsecured convertible senior notes due 2025. They are convertible at the option of the holders at any time before maturity at an initial conversion share price of $250.00 per $1,000 principal amount of 2022 Notes and per $1,000 of accrued but unpaid interest on any converted 2022 Notes. In addition, the Company may, at its election, force the conversion of the 2022 Notes on or after January 31, 2024, if the volume-weighted average trading price of the Company’s common stock exceeds $360.00 for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days. The Company also has the option, on or after January 31, 2023 and prior to the 40th trading day immediately before the maturity date and subject to the holders’ ability to optionally convert, to redeem all or a portion of the 2022 Notes at a cash redemption price equal to 100% of the principal amount of the 2022 Notes, plus accrued and unpaid interest, if any. The holders of the 2022 Notes have the right to cause the Company to repurchase for cash all or a portion of the 2022 Notes held by such holder upon the occurrence of a “fundamental change” (as defined in the Note Purchase Agreement) or in connection with certain asset sales, in each case at a price equal to 100% of par plus accrued and unpaid interest, if any.

As of September 30, 2023, the net carrying amount of the 2022 Notes was $29,272, which includes unamortized issuance costs and debt discount of $728, which will be amortized over the remaining term. The estimated fair value of the convertible debt instruments was approximately $27,000 as of September 30, 2023. The fair value of the 2022 Notes was measured using the Bloomberg OVCV model and CNVI model which modifies the underlying OVCV program. These models incorporate inputs for volatility, Leafly’s stock price, time to maturity, the risk-free rate and Leafly’s credit spread, some of which are considered Level 3 inputs in the fair value hierarchy.

2021 Notes

Legacy Leafly issued a series of convertible promissory notes in June 2021 totaling approximately $23,970. In August 2021, Legacy Leafly issued additional convertible promissory notes totaling $7,500 to Merida Capital, an affiliate of Merida. (Both note issuances are collectively referred to below as the “2021 Notes”).

The 2021 Notes bore interest at 8% annually and were considered traditional convertible debt with the entire amount recognized as a liability (with no amount allocated to equity), reduced for direct issuance costs, with initial and subsequent recognition at amortized cost in accordance with the interest method. Unless converted, the entire balance of principal and accrued but unpaid interest was due on December 3, 2022. The 2021 Notes were contingently convertible upon the occurrence of certain events, to include a qualified financing, a non-qualified financing, or in a qualified public transaction.

On February 4, 2022, in connection with the Business Combination, the 2021 Notes were converted to approximately 206 shares of Leafly common stock at the conversion price of approximately $52.60, which was 80% of the implied price per share of common stock in the Business Combination. Upon closing of the Business Combination, the shares of common

16

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued

(in thousands, except per share amounts)

stock then converted to shares of common stock of the combined company using the conversion ratio of 0.0164, which was used for conversion of all Leafly securities.

NOTE 12 — Stockholders’ Deficit

Common Stock

Reverse Stock Split

On July 12, 2023, during the Company’s 2023 Annual Meeting of Stockholders, Leafly’s stockholders approved a proposal for a reverse stock split (the “Reverse Stock Split”) as part of the Company’s plan to regain compliance with the Bid Price Requirement under Nasdaq listing rules (Note 8). Effective September 12, 2023, the Company effected a one-for-twenty (1-for-20) Reverse Stock Split of its common stock. As a result of the Reverse Stock Split:

•Every twenty (20) shares of common stock issued and outstanding were combined and converted into one (1) issued and outstanding share of common stock.

oThe Reverse Stock Split did not change the authorized number of shares or the par value of the common stock, nor modify any voting rights of the common stock, which continues to trade on the Nasdaq Capital Market under its existing symbol “LFLY” on a split-adjusted basis.

oAll shares of common stock that were held by a stockholder were aggregated and converted at the 1-for-20 reverse split ratio subsequent to the Reverse Stock Split, and each fractional share held by a stockholder resulting from such aggregation and conversion was rounded up to the next whole share.

oLeafly issued 34 shares in connection with the above criteria. No fractional shares were issued in connection with the Reverse Stock Split.

•The Company’s public warrants continue to trade on the Nasdaq Capital Market under the existing symbol “LFLYW.”

oAll outstanding warrants have been adjusted in accordance with their terms, resulting in the number of shares issuable upon exercise of a warrant holder’s aggregate number of warrants, after adjustment, being rounded up to the nearest whole share and proportionate adjustments were made to the exercise price;

•All outstanding convertible notes have been adjusted such that the conversion rate and the conversion price have been made proportionate with the 1-for-20 reverse split ratio in accordance with their terms.

•Based on the 1-for-20 reverse split ratio, the number of shares of common stock issuable under the Company’s outstanding equity awards decreased proportionately, with any fractional shares rounded down to the nearest whole share, with a corresponding adjustment made to the exercise prices of outstanding option awards, rounded up to the nearest whole cent.

oIn addition, the number of shares of common stock available for issuance under the Company’s equity incentive plans were proportionately adjusted based on the 1-for-20 reverse split ratio, such that fewer shares are available for issuance under our equity incentive plans.

To facilitate comparative analysis, all statements in this Quarterly Report regarding numbers of shares of common stock and all references to prices of a share of common stock, if referencing events or circumstances occurring prior to September 12, 2023, have been retroactively restated to reflect the effect of the Reverse Stock Split on a pro forma basis.

Business Combination

The Consolidated Statements of Changes in Stockholders' Deficit reflect the reverse recapitalization on February 4, 2022, as discussed in Note 1. Since Legacy Leafly was determined to be the accounting acquirer in the Business Combination, all periods presented prior to consummation of the Business Combination reflect the historical activity and balances of Legacy

17

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued

(in thousands, except per share amounts)

Leafly (other than common and preferred stock and potentially issuable shares underlying stock options and convertible promissory notes, which have been retroactively restated).

On February 4, 2022, the Business Combination was consummated pursuant to the Merger Agreement. Prior to the Business Combination, Legacy Leafly's capital stock consisted of Series A preferred stock and common stock. Upon the consummation of the Business Combination, all issued and outstanding shares of Series A preferred stock converted to shares of nonredeemable common stock. In connection with the settlement of the FPAs (Note 13), approximately 1 shares of the Company’s common stock held by the Sponsor were canceled, according to an agreement between the Company and the Sponsor entered into upon execution of the FPAs.

As of September 30, 2023, Leafly's authorized capital stock consisted of:

•200,000 shares of Leafly common stock, $0.0001 par value per share; and

•5,000 shares of Leafly preferred stock, $0.0001 par value per share.

Sponsor Shares Subject to Earn-Out Conditions

In accordance with the Merger Agreement, upon closing of the Business Combination, 81 of the shares of the Company’s common stock held by the Sponsor were placed in escrow and subjected to earn-out conditions (“Escrow Shares”). Of these Escrow Shares, 50% will be released from escrow if and when the Company's common stock trades at or above $270.00 for 20 out of 30 consecutive trading days at any time during the two-year period following closing of the Business Combination, and the remaining 50% will be released from escrow if and when the Company's common stock trades at or above $310.00 for 20 out of 30 consecutive trading days at any time during the three-year period following closing of the Business Combination. In addition, all 81 Escrow Shares will be released upon a change in control.

We account for the Escrow Shares as derivative liabilities, remeasured to fair value on a recurring basis, with changes in fair value recorded to earnings. See Note 18 for additional information.

Treasury Stock

Effective August 1, 2022, the Company repurchased 154 shares of its common stock at a weighted-average price of $205.60 per share for a total of $31,663, with $31,303 paid with restricted cash held in escrow at the time and $360 remaining in accrued expenses and other current liabilities on our consolidated balance sheet at December 31, 2022. These repurchases were in settlement of the FPAs. See Notes 3 and 13 for additional information.

Stockholder Earn-Out Rights

Leafly stockholders, as of immediately prior to the closing of the Business Combination, were granted upon closing of the Business Combination, contingent rights to receive up to 271 shares of common stock (the “Rights”) if the Company achieves certain earn-out conditions prior to the third anniversary of the Business Combination. We will account for the Rights as derivative liabilities, which we will remeasure to their current fair value as of the end of each reporting period, with changes in the fair value recorded to earnings. See Note 18 for additional information.

The Rights will be earned and shares of common stock will be issued as follows:

First Tranche

Up to 136 shares will be issued if and when:

•revenue for the year ended December 31, 2022 equaled or exceeded $65,000 (“first revenue target”, which was not met), or

18

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued

(in thousands, except per share amounts)

•the date on which the volume-weighted average price of common stock for a period of at least 20 days out of 30 consecutive trading days ending on the trading day immediately prior to the date of determination is greater than or equal to $270.00 (“first target price”) during the two-year period beginning on the trading day after the closing date of the Merger (as adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combinations, exchanges of shares or other like changes or transactions with respect to shares of common stock occurring at or after the closing of the Business Combination) (the “first target period”), or

•a change of control occurs within the first target period at the first target price or higher, or

•a pro rata portion of 136 shares (50%) if the revenue during the first target period meets or exceeds 90% of the first revenue target.

Second Tranche

Up to 136 shares will be issued if and when:

•revenue for the year ending December 31, 2023 equals or exceeds $101,000 (“second revenue target”), or

•the date on which the volume-weighted average price of common stock for a period of at least 20 days out of 30 consecutive trading days ending on the trading day immediately prior to the date of determination is greater than or equal to $310.00 (“second target price”) during the three-year period beginning on the trading day after the closing date of the Business Combination (as adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combinations, exchanges of shares or other like changes or transactions with respect to shares of common stock occurring at or after the closing of the Business Combination) (the “second target period”), or

•a change of control occurs within the second target period at the second target price or higher, or

•a pro rata portion of 136 (50%) if the revenue during the second target period meets or exceeds 90% of the second revenue target.

If the second revenue target or second target price is met in full, the respective first revenue target or first target price, as applicable, will be deemed to have been met as well if it had not been met during the first target period.

Preferred Stock

The Board is authorized, subject to limitations prescribed by the law of the State of Delaware, to issue Leafly preferred stock from time to time in one or more series. The Board is authorized to establish the number of shares to be included in each such series and to fix the voting rights, if any, designations, powers, preferences and relative, participating, optional, special and other rights, if any, and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. The Board is able, without stockholder approval, to issue Leafly preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the Leafly common stock and could have anti-takeover effects. The ability of the Board to issue Leafly preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control of Leafly or the removal of existing management. Leafly did not have any issued and outstanding shares of preferred stock as of September 30, 2023 or December 31, 2022.

19

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued

(in thousands, except per share amounts)

NOTE 13 — Warrants and Forward Share Purchase Agreements

Public Warrants

At each of September 30, 2023 and December 31, 2022, there were 6,501 warrants outstanding to purchase an aggregate of 325 shares of common stock that had been included in the units issued in Merida’s initial public offering (the “Public Warrants”). Each Public Warrant entitles the holder to purchase 0.05 shares of common stock at an exercise price of $230.00 per whole share. Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants became exercisable 30 days after the closing of the Business Combination. The Public Warrants may not be exercisable for cash unless the Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the Public Warrants and a current prospectus relating to such shares of common stock.

Notwithstanding the foregoing, during any period when the Company shall have failed to maintain an effective registration statement, warrant holders may exercise their Public Warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their Public Warrants on a cashless basis. The Public Warrants will expire five years after the closing of the Business Combination or earlier upon redemption or liquidation.

The Company may redeem the Public Warrants:

•in whole and not in part;

•at a price of $0.20 per warrant;

•upon not less than 30 days’ prior written notice of redemption;

•if, and only if, the reported last sale price of the Company’s common stock equals or exceeds $360.00 per share for any 20 trading days within a 30-trading day period commencing after the warrants became exercisable and ending on the third business day prior to the notice of redemption to the warrant holders; and

•if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying the warrants.

If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.

Private Warrants

At each of September 30, 2023 and December 31, 2022, there were 3,950 warrants outstanding to purchase an aggregate of 198 shares of common stock that Merida had sold to the Sponsor and EarlyBirdCapital in a private placement that took place simultaneously with Merida’s initial public offering (the “Private Warrants”). The Private Warrants are identical to the Public Warrants, except that the Private Warrants and the shares of common stock issuable upon the exercise of the Private Warrants were not transferable, assignable or salable until after the closing of the Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants are redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. The exercise price and number of shares of common stock issuable upon exercise of the Private Warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the Private Warrants will not be adjusted for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Private Warrants.

20

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued

(in thousands, except per share amounts)

We account for the Private Warrants as derivative liabilities, remeasured to fair value on a recurring basis, with changes in the fair value recorded to earnings. See Note 18 for additional information.

Forward Share Purchase Agreements

In December 2021 and January 2022, the Company entered into four separate FPAs with the FPA Holders. The FPAs allowed the FPA Holders to sell and transfer common stock held by such holders, not to exceed a total of 200 shares in aggregate, to the Company in exchange for cash. The price to be paid by the Company was initially $203.20 per share for up to 130 shares and $200.20 per share for up to 70 shares. As required by the FPAs, $39,032 of cash was placed into escrow upon closing of the Business Combination, to be used for the share purchases. If the FPAs were not exercised by the FPA Holders within their terms of three months post-Business Combination closing, the associated funds were to be released from escrow to the Company. We account for the FPAs as derivative liabilities, remeasured to fair value on a recurring basis, with changes in the fair value recorded to earnings.

On May 3, 2022, Leafly and the FPA Holders entered into amendments to the FPAs (the “Amended FPAs”). The Amended FPAs modified the price at which the applicable FPA Holder has the right, but not the obligation, to have Leafly repurchase certain shares held by the applicable FPA Holder as of the closing of the Business Combination and not later sold into the market at a price of $203.20 per share (with respect to 34 of the shares subject to the Amended FPAs) and $206.20 per share (with respect to 120 of the shares subject to the Amended FPAs). The Amended FPAs also modified the date by which such FPA Holders could elect to have Leafly repurchase their shares to August 1, 2022. In connection with the Amended FPAs, certain amendments were also made to the escrow agreements in respect of the escrow accounts.

During the year ended December 31, 2022, a total of $8,089 was released from the escrow accounts due to certain FPA Holders selling shares in the open market, which was accordingly reclassified on the Company's balance sheet from restricted cash to cash.

Effective August 1, 2022, the FPA Holders elected to have Leafly repurchase their remaining 154 shares covered by the FPAs for an aggregate repurchase price of $31,663. As a result, the shares repurchased have been removed from Leafly's outstanding shares effective as of the date of purchase, and placed into treasury. The FPA Holders elected to have all but $360 disbursed from the escrow account and were able to claim the remainder any time until August 1, 2023. On July 11, 2023, Leafly returned $360 of restricted cash to the FPA Holders pursuant to the terms of the FPAs (Note 3). Also, in connection with the settlement, approximately 1 shares of the Company’s common stock held by the Sponsor were canceled, according to an agreement between the Company and the Sponsor entered into upon execution of the FPAs.

21

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued

(in thousands, except per share amounts)

NOTE 14 — Equity Incentive and Other Plans

The Company currently has four equity plans: the New Leafly 2021 Equity Incentive Plan (the “2021 Plan”), the Legacy Leafly 2018 Equity Incentive Plan (the “2018 Plan”), the New Leafy Earn-Out Plan (the “Earn-Out Plan”), and the New Leafly 2021 Employee Stock Purchase Plan (the “ESPP”). Activity under the 2021 Plan and the ESPP are detailed below. There were no options or other equity awards granted under the 2018 Plan or the Earn-Out Plan during the nine months ended September 30, 2023.

Stock-Based Compensation

2021 Plan

The 2021 Plan became effective immediately upon closing of the Business Combination. Pursuant to the 2021 Plan, 225 shares of common stock were initially reserved for issuance. During the term of the 2021 Plan, the number of shares of common stock thereunder automatically increases on each January 1, commencing on January 1, 2023, and ending on (and including) January 1, 2031, by the lesser of (i) 10% of the fully diluted shares of common stock as of the last day of the preceding fiscal year and (ii) 225 shares (adjusted pursuant to the terms of the 2021 Plan). Effective January 1, 2023, 221 shares of common stock were available for issuance under the 2021 Plan and 49 remained available at September 30, 2023.

2022 Awards

In August 2022 and October 2022, the Company granted stock options to purchase an aggregate of approximately 5 shares of common stock at a weighted-average exercise price of $39.60 per share and granted an aggregate of 128 restricted stock units (“RSUs”) and performance stock units (”PSUs”). Of the PSUs granted, 34 were market-based awards made to executives with a grant date fair value of $0.80 per share with vesting based on achievement of a $1.0 billion market cap by February 4, 2026, and 7 were performance awards made to executives with a grant date fair value of $16.20 per share with vesting based in part on achievement of a fiscal year 2022 adjusted EBITDA target, as defined in the award agreements, which was achieved. Prior to such grants, no grants had been made under the 2021 Plan. On March 13, 2023, the Company approved the vesting of 7 PSUs awarded in 2022, which vested based on the achievement of the Company’s 2022 adjusted EBITDA target, on March 13, 2023.

2023 Awards

The Company granted 32 annual incentive plan RSUs on March 14, 2023, which vested over four months.

On July 25, 2023, the Company granted: 126 service-based RSUs to employees, which are scheduled to vest over a two-year period from the initial vest date; 33 RSUs to non-employee Board members, which vested in full on August 20, 2023; and 24 PSUs to senior management, with vesting contingent upon the Company meeting certain fiscal year 2023 financial performance metrics, as specified in the award agreements.

Stock Options

The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing model. No options were granted under the 2021 Plan during the nine months ended September 30, 2023.

22

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued

(in thousands, except per share amounts)

Stock option activity under the 2021 Plan for the nine months ended September 30, 2023 was as follows:

	Number of Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Outstanding at January 1, 2023		5	$	39.52	$	—	9.61
Forfeited or expired		—		32.08
Outstanding at March 31, 2023		5	$	39.55	$	—		9.38
Forfeited or expired		—		38.31
Outstanding at June 30, 2023		5	$	39.56	$	—		9.14
Forfeited or expired		—		16.26
Outstanding at September 30, 2023		5	$	39.58	$	—		8.88
Vested and exercisable		2	$	39.56	$	—		8.87

As of September 30, 2023, there was $68 of total unrecognized compensation cost related to stock options granted under the 2021 Plan. That cost is expected to be recognized over a weighted-average period of 2.61 years.

Restricted Stock Units and Performance Stock Units

RSU and PSU activity under the 2021 Plan for the nine months ended September 30, 2023 was as follows:

	Number of Shares			Weighted Average Grant Date Fair Value		Total Fair Value
Unvested at January 1, 2023		103		$	25.92
Granted		32			9.65	$	305
Vested		(18	)		18.79	$	188
Forfeited		(24	)		20.07
Unvested at March 31, 2023		93			17.81
Vested		(26	)		11.88	$	199
Forfeited		(17	)		18.61
Unvested at June 30, 2023		50			20.69
Granted		181			6.20	$	1,128
Vested		(48	)		7.52	$	323
Forfeited		(1	)		9.18
Unvested at September 30, 2023		182		$	9.77

23

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued

(in thousands, except per share amounts)

As of September 30, 2023, there was $1,432 total unrecognized compensation cost related to unvested RSUs and $72 total unrecognized compensation cost related to performance and market-based PSUs granted under the 2021 Plan. The total cost is expected to be recognized over a weighted-average period of 1.94 years.

2018 Plan

The 2018 Plan became effective on April 17, 2018. The 2018 Plan terminated upon closing of the Business Combination in 2022, but then-outstanding options under the 2018 Plan remain outstanding pursuant to their terms, with adjustments to the number of shares and exercise prices to reflect the terms of the Business Combination.

The fair value of each stock option award to employees is estimated on the date of grant using the Black-Scholes option pricing model. There were no grants made in 2023 or 2022 under the 2018 Plan.

Stock option activity under the 2018 Plan for the periods presented was as follows:

	Number of Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Outstanding at January 1, 2023		172		$	32.06
Exercised		—			8.00
Forfeited or expired		(22	)		27.97
Outstanding at March 31, 2023		150			32.68
Forfeited or expired		(26	)		25.50
Outstanding at June 30, 2023		124			34.17
Forfeited or expired		(7	)		31.57
Outstanding at September 30, 2023 1		117		$	34.29	$	8		4.90
Vested and exercisable		53		$	26.91	$	8		5.98

1.Includes 64 and 53 awards accounted for as service-based and market-based options, respectively, that are vested, that the Company currently deems probable of vesting, or in the case of market-based options, that the Company is expensing so long as the respective service conditions are met. The market-based options will vest only if the price of the Company's common stock reaches a $1 billion market capitalization target for any 20 days during a 30-day period on or before February 4, 2026.

As of September 30, 2023, there was: (i) $363 of unrecognized compensation cost related to service-based 2018 Plan option awards, which is expected to be recognized over a remaining weighted-average service period of approximately 1.63 years; and (ii) $585 of unrecognized compensation cost related to market-based 2018 Plan option awards, which is expected to be recognized over a remaining weighted-average service period of approximately 0.57 years.

24

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued

(in thousands, except per share amounts)

Stock-Based Compensation Expense

The following table presents the classification of stock-based compensation expense under the 2021 Plan, the 2018 Plan and the ESPP:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Sales and marketing	$	94	$	77	$	230	$	137
Product development		141		86		347		123
General and administrative		762		608		1,658		2,899
	$	997	$	771	$	2,235	$	3,159

2022 Option Modification

Concurrent with the closing of the Business Combination, the vesting provisions of certain stock options previously granted in 2021 under the 2018 Plan to our Chief Executive Officer to purchase 146 shares of common stock were modified, and a corresponding charge of $1,366 was recorded during the three months ended March 31, 2022 to general and administrative expenses and additional paid-in capital.

Employee Stock Purchase Plan

The ESPP became effective immediately upon closing of the Business Combination. Pursuant to the ESPP, 56 shares of common stock were initially reserved for issuance. During the term of the ESPP, the number of shares of common stock thereunder automatically increases on each January 1, commencing on January 1, 2023 and ending on (and including) January 1, 2031, by the lesser of (i) 2.5% of the fully diluted shares of common stock as of the last day of the preceding fiscal year and (ii) 56 shares (as adjusted pursuant to the terms of the ESPP). Effective January 1, 2023, 55 shares of common stock were available for issuance under the ESPP and 35 remained available at September 30, 2023. On March 15, 2023, eligible employees purchased 14 shares for a total purchase price of $120. On September 15, 2023, eligible employees purchased 6 shares for a total purchase price of $49. The Company's current offering period runs from September 16, 2023 through March 15, 2024. Stock-based compensation expense includes $11 and $78 related to the ESPP for the three and nine months ended September 30, 2023 and $12 for both the three and nine months ended September 30, 2022.

Earn-Out Plan

The Earn-Out Plan became effective immediately upon closing of the Business Combination. Pursuant to the Earn-Out Plan, approximately 29 shares of common stock have been reserved for issuance to employees and certain other eligible parties in the form of RSUs. These RSUs will vest if the Company achieves certain thresholds prior to the third anniversary of the closing of the Business Combination. No RSUs have been awarded under the Earn-Out Plan as of September 30, 2023.

Defined Contribution Plan

The Company recognized expense from matching contributions to the Company-sponsored defined contribution retirement (401k) plan as follows for the periods presented:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
401(k) matching contributions	$	134	$	225	$	520	$	684

25

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued

(in thousands, except per share amounts)

NOTE 15 — Related Party Transactions

In June 2021, Merida Capital, an affiliate of Merida, purchased a convertible promissory note totaling $1,000. The note was issued as part of the existing series of 2021 Notes (see Note 11) and was subject to the same interest rate, maturity, and conversion terms. This note converted to shares of Leafly common stock upon closing of the Business Combination in February 2022, along with the other 2021 Notes.

At December 31, 2022, the Company owed $10 to two members of its Board, which is included in accrued expenses and other current liabilities on Leafly's consolidated balance sheet and was repaid during the first quarter of 2023.

Effective September 1, 2023, the Company entered into a consulting agreement with Peter Lee, a member of the Company’s Board of Directors, at a rate of $30 per month for an initial term of two months, extendable for a second term of two months, for a total maximum term of four months. Under the agreement, Mr. Lee is providing the Company with certain consultancy services related to the Company’s business strategies.

NOTE 16 — Net (Loss) Income Per Share

Basic and diluted net (loss) income per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. Under the two-class method, basic net (loss) income per share attributable to common stockholders is computed by dividing the net (loss) income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Shares repurchased and held in treasury by the Company are removed from the weighted-average number of shares of common stock outstanding as of the date of repurchase.

The Company considers its preferred stock to be participating securities. As of September 30, 2023 and September 30, 2022, the Company had 81 outstanding shares of common stock that are in escrow and subject to earn-out conditions and thus forfeiture, which do not meet the criteria for participating securities (see Note 12 for additional information). Net (loss) income is attributed to common stockholders and participating securities based on their participation rights. Net loss is not attributed to the preferred stock as the holders of the preferred stock do not have a contractual obligation to share in any losses.

26

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued

(in thousands, except per share amounts)

Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of non-participating shares of common stock that are subject to forfeiture, stock options, preferred stock, convertible notes, and other securities outstanding. Certain securities are antidilutive and as such, are excluded from the calculation of diluted earnings per share and disclosed separately. Because of the nature of the calculation, particular securities may be dilutive in some periods and anti-dilutive in other periods. The Class 1, 2, and 3 common shares presented below have been retroactively restated for all periods using the conversion ratio in connection with the Business Combination.

The following table presents the computation of basic and diluted net (loss) income per share attributable to common stockholders, as a group, for the periods presented:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Net (loss) income	$	(2,210	)	$	15,454		$	(9,043	)	$	10,837
Income impact of FPAs		—			(3,939	)		—			(346	)
Income impact of convertible promissory notes		—			600			—			—
Total undistributed (loss) income	$	(2,210	)	$	12,115		$	(9,043	)	$	10,491
Weighted average shares outstanding		2,011			1,779			1,974			1,763
Dilutive effect of FPAs		—			177			—			57
Dilutive effect of convertible promissory notes		—			124			—			—
Dilutive effect of stock-based awards		—			69			—			104
Common stock and common stock equivalents		2,011			2,149			1,974			1,924
Basic net (loss) income per share	$	(1.10	)	$	8.69		$	(4.58	)	$	6.15
Diluted net (loss) income per share	$	(1.10	)	$	5.64		$	(4.58	)	$	5.45

The following shares of common stock subject to certain instruments were excluded from the computation of diluted net income per share attributable to common stockholders for the periods presented as their effect would have been antidilutive (with figures recast using the conversion ratio for the Business Combination, as applicable):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Shares subject to warrants		523		523		523		523
Shares subject to convertible promissory notes		124		—		124		121
Shares subject to ESPP		13		14		11		14
Escrow Shares		81		81		81		81
Shares subject to outstanding common stock options, RSUs and PSUs		285		56		240		56
Shares subject to stockholder earn-out rights		271		271		271		271
		1,297		945		1,250		1,066

See Note 11 for additional information regarding convertible promissory notes, Note 12 for additional information regarding stockholder earn-out rights, preferred stock, and Escrow Shares, Note 13 for additional information regarding warrants, and Note 14 for additional information regarding stock options, RSUs and PSUs.

27

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued

(in thousands, except per share amounts)

NOTE 17 — Segment Reporting

Segment revenue and gross profit were as follows during the periods presented:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenue:
Retail	$	9,266	$	9,042	$	27,576	$	27,286
Brands		1,317		2,739		4,931		7,965
Total revenue	$	10,583	$	11,781	$	32,507	$	35,251
Gross profit:
Retail	$	8,234	$	7,916	$	24,374	$	23,975
Brands		1,186		2,350		4,386		6,865
Total gross profit	$	9,420	$	10,266	$	28,760	$	30,840

Assets are not allocated to segments for internal reporting presentations, nor are depreciation and amortization.

Geographic Areas

The Company’s operations are primarily in the U.S. and to a lesser extent, in Canada. Refer to Note 9 for revenue classified by major geographic area.

NOTE 18 — Fair Value Measurements

The Company follows the guidance in ASC 820, “Fair Value Measurement,” for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).

The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

Level 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.

28

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued

(in thousands, except per share amounts)

The Company’s financial instruments include cash equivalents, restricted cash, accounts receivable from customers, accounts payable and accrued liabilities, all of which are typically short-term in nature. The Company believes that the carrying amounts of these financial instruments reasonably approximate their fair values due to their short-term nature.

The following table presents information about the Company’s derivative liabilities that are measured at fair value on a recurring basis beginning February 4, 2022 (the date of closing of the Business Combination) when the derivative liabilities were assumed, and discloses the fair value hierarchy level of the valuation inputs the Company utilized to determine such fair value:

			Fair Value at										Change in Fair Value of Derivatives
Description	Level		September 30, 2023		June 30, 2023		December 31, 2022		September 30, 2022		June 30, 2022		Three Months Ended September 30, 2023		Three Months Ended September 30, 2022		Nine Months Ended September 30, 2023		Nine Months Ended September 30, 2022
Private Warrants derivative liability		3	$	113	$	121	$	182	$	662	$	3,693	$	8	$	3,031	$	69	$	3,254
Forward share purchase agreements derivative liability 1		3		—		—		—		—		17,763		—		3,940		—		346
Escrow Shares derivative liability		3		5		6		52		47		3,481		1		3,434		47		6,821
Stockholder earn-out rights derivative liability		3		25		30		204		288		12,147		5		11,859		179		25,843
Total			$	143	$	157	$	438	$	997	$	37,084	$	14	$	22,264	$	295	$	36,264

1.The forward share purchase agreements were settled effective August 1, 2022, at which time the fair value was $13,824 based on cash settlement.

Assumptions used to determine the fair values are presented in the following sections:

Private Warrants Derivative Liability

The Private Warrants were valued using a Black-Scholes model and the following Level 3 inputs:

	September 30, 2023			June 30, 2023			December 31, 2022			September 30, 2022			June 30, 2022
Exercise price	$	230.00		$	230.00		$	230.00		$	230.00		$	230.00
Stock price	$	6.42		$	5.80		$	13.00		$	13.60		$	90.00
Volatility		99.9	%		99.9	%		75.0	%		98.0	%		51.6	%
Term (in years)		3.35			3.60			4.09			4.34			4.59
Risk-free rate		4.7	%		4.5	%		4.1	%		4.1	%		3.0	%
Dividend yield		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%

The volatility input was calculated using a weighted average of historical volatilities from select benchmark companies and the volatility of the Public Warrants. The term input represents the maximum contractual term, though the Private Warrants may be exercised earlier. The interest rate input is the U.S. Treasury constant maturity rate for the instrument that most closely matches the term input.

29

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued

(in thousands, except per share amounts)

Forward Share Purchase Agreements Derivative Liability

The FPAs were valued using a Black-Scholes model and the following Level 3 inputs:

	June 30, 2022
Exercise price - one agreement	$	206.20
Exercise price - three agreements	$	203.20
Stock price	$	90.00
Volatility		70.4	%
Term (in years)		0.09
Risk-free rate		1.3	%
Dividend yield		0.0	%

The volatility input was calculated using a weighted average of historical volatilities from select benchmark companies. The term input represents the maximum contractual term, though the shares underlying the FPAs were in some cases sold by the holders into the open market earlier (see Note 13). The interest rate input is the U.S. Treasury constant maturity rate for the instrument that most closely matches the term input.

Escrow Shares Derivative Liability

The Escrow Shares derivative liability was calculated using a Monte Carlo simulation and the following Level 3 inputs:

	September 30, 2023			June 30, 2023			December 31, 2022			September 30, 2022			June 30, 2022
First stock price trigger	$	270.00		$	270.00		$	270.00		$	270.00		$	270.00
Second stock price trigger	$	310.00		$	310.00		$	310.00		$	310.00		$	310.00
Stock price	$	6.42		$	5.80		$	13.00		$	13.60		$	90.00
Volatility		98.6	%		98.6	%		86.0	%		79.0	%		68.0	%
Term (in years)		1.35			1.60			2.09			2.34			2.59
Risk-free rate		5.4	%		5.1	%		4.4	%		4.2	%		3.0	%
Dividend yield		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%

The volatility input was calculated using a weighted average of historical volatilities from select benchmark companies. The term input represents the maximum contractual term, though the shares may be released from escrow earlier. The interest rate input is the U.S. Treasury constant maturity rate for the instrument that most closely matches the term input.

Stockholder Earn-Out Rights Derivative Liability

The stockholder earn-out rights were valued using a Monte Carlo simulation and the following Level 3 inputs:

	September 30, 2023			June 30, 2023			December 31, 2022			September 30, 2022			June 30, 2022
First stock price trigger	$	270.00		$	270.00		$	270.00		$	270.00		$	270.00
Second stock price trigger	$	310.00		$	310.00		$	310.00		$	310.00		$	310.00
First revenue trigger	$	65,000		$	65,000		$	65,000		$	65,000		$	65,000
Second revenue trigger	$	101,000		$	101,000		$	101,000		$	101,000		$	101,000
Stock price	$	6.42		$	5.80		$	13.00		$	13.60		$	90.00
Base year revenue assumption	$	42,000		$	44,000		$	48,000		$	47,500		$	49,500
Volatility		98.6	%		98.6	%		86.0	%		79.0	%		68.0	%
Term (in years)		1.35			1.60			2.09			2.34			2.59
Risk-free rate		5.4	%		5.1	%		4.4	%		4.2	%		3.0	%
Dividend yield		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%

The revenue assumption input relates to projected revenue for fiscal year 2022 (for the periods ended September 30, 2022 and June 30, 2022) and fiscal year 2023 (for the periods ended September 30, 2023 and June 30, 2023) and represents the midpoint of revenue guidance the Company provided in the respective periods. The volatility input was calculated using a

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – Continued

(in thousands, except per share amounts)

weighted average of historical volatilities from select benchmark companies. The term input represents the maximum contractual term, though the stockholder earn-out rights may vest earlier. The interest rate input is the U.S. Treasury constant maturity rate for the instrument that most closely matches the term input.

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our financial statements and the notes related thereto which are included in “Part I, Item 1. Financial Statements” of this Quarterly Report on Form 10-Q. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Item 1A. Risk Factors” and elsewhere in our 2022 Annual Report and our 2023 10-Qs.

Amounts in this section are presented in thousands, except for per share numbers and percentages.

Business Overview

Leafly is a leading online cannabis discovery marketplace and resource for cannabis consumers. Leafly provides an information resource platform with a deep library of content, including detailed information about cannabis strains, retailers and cannabis products. We are a trusted destination to discover legal cannabis products and order them from licensed retailers with offerings that include subscription-based products and digital advertising. Legacy Leafly was founded in 2010 and is headquartered in Seattle with 137 total employees, including 132 in the U.S. and 5 in Canada as of September 30, 2023.

Leafly is one of the cannabis industry’s leading marketplaces for brands and retailers to reach one of the largest audiences of consumers interested in cannabis. Our platform includes educational information, strains data, and lifestyle content, enabling consumers to use Leafly’s content library to have an informed shopping experience. Leafly reduces the friction caused by fragmented regulation of cannabis across North America by offering a compliant digital marketplace that connects cannabis consumers with legal and licensed retailers and brands nearest them.

Leafly allows each shopper to tailor their journey, by selecting the store, brand, and cannabis form-factor that appeals to them. Once that shopper builds a basket and is ready to order, our non-plant-touching business model sends that order reservation to the store for payment and fulfillment. By matching stores and shoppers, we deliver value to all constituencies. We monetize our platform primarily through the sale of subscription packages, bundling e-commerce software and advertising solutions, as well as non-subscription-based advertising to retailers and brands.

Significant Events

Reverse Stock Split

On September 12, 2023, the Company implemented a one-for-twenty reverse split of its common stock (Note 12). To facilitate comparative analysis, all statements in this Quarterly Report regarding numbers of shares of common stock and all references to prices of a share of common stock, if referencing events or circumstances occurring prior to September 12, 2023, have been retroactively restated to reflect the effect of the reverse stock split on a pro forma basis.

Content Shift

During the first half of 2023, in conjunction with our reductions in staffing and cost cutting (see “Reductions in Force” below), Leafly began its transition from a news-centric platform to a marketplace platform. In this “content shift,” we changed our focus from a content-driven approach to one intended to maximize consumer demand for our retailer customers by attracting visitors who are more likely to order from our retailers. Leafly has enhanced its deal types, delivery options and created deeper search capabilities intended to drive conversion to sales back to retailers and brands. Our strategy is to focus on key and emerging retailer and brand accounts by strongly aligning our sales and marketing resources with their needs. In addition, at the end of the second quarter, we implemented select pricing increases, pass-throughs of certain costs and annual subscription agreements in select markets. As expected, we experienced and continue to experience some slowing of our revenue growth as our team was focused on process change, which will likely continue into the fourth quarter of 2023.

Reductions in Force

In light of the current macroeconomic environment, we have taken steps to manage the business accordingly. We implemented plans to reduce operating expenses, including previously announced headcount reductions:

•on October 18, 2022 of 56 employees, or approximately 21% of our workforce at the time. We incurred cash charges of $492 associated with the headcount reductions during the fourth quarter of 2022.

•on March 16, 2023 of approximately 40 employees, or approximately 21% of our workforce at the time. We incurred cash charges of $754 associated with the headcount reductions during the first quarter of 2023.

The restructuring plans above have been implemented and are expected to continue contributing to the cash savings of the Company. These cost reductions are not expected to have a significant impact on the scope of our business. We will focus on maximizing efficiencies across all areas, investing in projects and products that we expect will result in the highest returns. By coupling cost savings with our strategic content shift, we believe Leafly will be better situated to become profitable in future periods.

Key Metrics

In addition to the measures presented in our consolidated financial statements, our management regularly monitors certain metrics in the operation of our business:

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. This metric is helpful because it represents a portion of the volume element of our revenue and provides an indication of our market share.

Retailer Average Revenue Per Account (“ARPA”)

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. This metric is helpful because it represents the price element of our revenue.

Results of Operations

Key Metrics

The table below presents these measures for the respective periods:

	Three Months Ended September 30,
	2023		2022		Change			Change (%)
Key Operating Metrics:
Ending retail accounts1		4,466		5,637		(1,171	)		-21	%
Retailer ARPA2	$	644	$	556	$	88			16	%

	Nine Months Ended September 30,
	2023		2022		Change			Change (%)
Key Operating Metrics:
Ending retail accounts1		4,466		5,637		(1,171	)		-21	%
Retailer ARPA2	$	585	$	570	$	15			3	%

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1.Represents the amount outstanding on the last day of the month of the respective period.

2.Calculated as a simple average of monthly retailer ARPA for the period presented.

The 21% decline in year-over-year ending retail accounts for the three and nine months ended September 30, 2023, compared to the same periods in 2022, was primarily related to customer budget constraints and Leafly’s removal of non-paying customers.

The 16% increase in ARPA for the three months ended September 30, 2023, compared to the same period in 2022 was primarily the result of the roll-out of new rate cards and churn of lower ARPA accounts. The 3% increase in ARPA for the nine months ended September 30, 2023, compared to the same period in 2022 was due largely to previously implemented pricing increases and the lower retail account base.

Revenue

We generate our revenue through the sale of online advertising and online order reservation enablement on the Leafly platform for suppliers in our Retail and Brands segments. Within our Retail segment, we monetize our multi-sided retail marketplace through monthly subscriptions that enable retailers to advertise to and acquire potential shoppers. Our solutions allow retailers, where legally permissible, to accept online orders from shoppers who visit Leafly.com or use a Leafly-powered online order reservation solution, including our iOS app. Within our Brands segment, our revenue is derived by creating custom advertising campaigns for both small and large brands that target Leafly’s broad and diverse audience and offering brands profile listings on our platform, which are sold on a monthly recurring subscription or annual basis. Advertising opportunities include on-site digital display, native placements, email, branded content, and off-site audience extension. Leafly’s advertising partners span a variety of verticals including hardware and accessories, THC-infused products, hemp, CBD, and seed.

	Three Months Ended September 30,
	2023		2022		Change ($)			Change (%)
Revenue:
Retail	$	9,266	$	9,042	$	224			2	%
Brands		1,317		2,739		(1,422	)		-52	%
Total revenue	$	10,583	$	11,781	$	(1,198	)		-10	%

	Nine Months Ended September 30,
	2023		2022		Change ($)			Change (%)
Revenue:
Retail	$	27,576	$	27,286	$	290			1	%
Brands		4,931		7,965		(3,034	)		-38	%
Total revenue	$	32,507	$	35,251	$	(2,744	)		-8	%

Retail

Retail subscriptions revenue increased $140 due to the price increase and other revenues increased $127, partially offset by a $43 decrease in digital display ads for the three months ended September 30, 2023 as compared to the same period in 2022. Digital media display ads revenue declines were due to decreased volume of display ads sold. For the three months ended September 30, 2023, the increase in retail subscription revenue as compared to the same period in 2022 was primarily due to the price increase implemented during the second quarter of 2023.

Retail subscriptions revenue decreased $380, more than offset by a $478 increase in digital display ads and other revenues of $192, driving a slight increase in retail revenue for the nine months ended September 30, 2023 as compared to the same

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period in 2022. Digital media display ads revenue growth was caused by increased volume of display ads sold. For the nine months ended September 30, 2023, the decrease in retail subscription revenue as compared to the same period in 2022 was primarily due to customer churn and marketplace dynamics which offset the favorable impact of the price increase in the third quarter.

Brands

Macro challenges, including changes in state regulatory provisions, have put overall pressure on the cannabis industry which has impacted our brand advertising business. For the three months ended September 30, 2023 as compared to the same period in 2022, Brands revenue decreased $1,422, due primarily to a direct-to-consumer marketing revenue decrease of $532, a reduction in display ads of $598 and a branded content decrease of $211.

For the nine months ended September 30, 2023 as compared to the same period in 2022, Brands revenue decreased $3,034, due primarily to direct-to-consumer marketing revenue decrease of $1,094, a reduction in display ads of $1,091 and a branded content decrease of $609.

The Company’s current systems do not allow us to precisely quantify changes in Brands revenue attributable to price and volume. The information we have from our existing systems, combined with our knowledge of changes in list prices, informs the discussion of Brands volume and pricing that follows. We believe Brands revenue declined due to decreased volume and reduced advertising spend per ad from our clients.

Cost of Revenue

	Three Months Ended September 30,
	2023		2022		Change ($)			Change (%)
Cost of sales: 1
Retail	$	1,032	$	1,126	$	(94	)		-8	%
Brands		131		389		(258	)		-66	%
Total cost of sales	$	1,163	$	1,515	$	(352	)		-23	%

	Nine Months Ended September 30,
	2023		2022		Change ($)			Change (%)
Cost of sales: 1
Retail	$	3,202	$	3,311	$	(109	)		-3	%
Brands		545		1,100		(555	)		-50	%
Total cost of sales	$	3,747	$	4,411	$	(664	)		-15	%

1.Prior period amounts have been revised to reflect the current period presentation.

Retail

Retail cost of sales reductions were driven by increased efficiency and lower platform costs as described below.

For the three months ended September 30, 2023 as compared to the same period in 2022, retail cost of revenue decreased $94 due to a reduction in labor allocation costs of $75 and a decrease in business platform and merchant processing costs of $44, partially offset by increased website infrastructure costs of $25.

For the nine months ended September 30, 2023 as compared to the same period in 2022, retail cost of revenue decreased $109 due to decreased website infrastructure costs of $12 and labor allocation costs of $185, partially offset by an $88 increase in business platform and merchant processing costs.

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Brands

Brands cost of sales reductions were a consequence of declining revenues and, to a lesser extent, increased efficiency as described below.

Brands cost of revenue decreased $258 for the three months ended September 30, 2023 as compared to the same period in 2022, of which $179 corresponds to decreased associated revenue. Brands cost of revenue also decreased $79 for the three months ended September 30, 2023 as compared to the same period in 2022, due to reduced labor allocation costs.

Brands cost of revenue decreased $555 for the nine months ended September 30, 2023 as compared to the same period in 2022, of which $408 corresponds to decreased associated revenue. Brands cost of revenue also decreased $147 for the nine months ended September 30, 2023 as compared to the same period in 2022, due to reduced labor allocation costs.

Operating Expenses

As described below, operating expenses declined significantly overall as a result of the two reductions in force and cost reduction activities discussed above.

	Three Months Ended September 30,
	2023		2022		Change ($)			Change (%)
Operating expenses:
Sales and marketing	$	2,563	$	6,403	$	(3,840	)		-60	%
Product development		2,533		3,406		(873	)		-26	%
General and administrative		5,799		6,489		(690	)		-11	%
Total operating expenses	$	10,895	$	16,298	$	(5,403	)		-33	%

	Nine Months Ended September 30,
	2023		2022		Change ($)			Change (%)
Operating expenses:
Sales and marketing	$	10,326	$	21,529	$	(11,203	)		-52	%
Product development		8,133		10,927		(2,794	)		-26	%
General and administrative		17,475		20,730		(3,255	)		-16	%
Total operating expenses	$	35,934	$	53,186	$	(17,252	)		-32	%

Sales and Marketing

Sales and marketing expenses decreased $3,840 for the three months ended September 30, 2023 as compared to the same period in 2022 due to:

•a $2,875 decrease in compensation costs;

•a $647 reduction in advertising and marketing spending;

•a $151 decline in professional services; and

•a $167 reduction in other costs.

Sales and marketing expenses decreased $11,203 for the nine months ended September 30, 2023 as compared to the same period in 2022 due to:

•a $6,394 decrease in compensation costs;

•a $3,815 reduction in advertising and marketing spending;

•a $594 reduction in professional services; and

•a $400 reduction in other costs.

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Product Development

Product development expenses decreased $873 for the three months ended September 30, 2023 as compared to the same period in 2022 due to:

•a $695 decrease in compensation costs (or $1,113 excluding capitalized costs). Product development expenses are reported net of $239 and $657 of costs capitalized to internal-use software for the three months ended September 30, 2023 and 2022, respectively;

•a $268 reduction in professional services; and

•a $64 reduction in other costs; partially offset by:

•a $154 increase in depreciation expense primarily related to capitalized internal use software.

Product development expenses decreased $2,794 for the nine months ended September 30, 2023 as compared to the same period in 2022 due to:

•a $1,972 decrease in compensation costs (or $3,124 excluding capitalized costs). Product development expenses are reported net of $1,042 and $2,194 of costs capitalized to internal-use software for the nine months ended September 30, 2023 and 2022, respectively;

•a $1,142 reduction in professional services; and

•a $138 reduction in other costs; partially offset by:

•a $458 increase in depreciation expense primarily related to capitalized internal use software.

General and Administrative

General and administrative expenses decreased $690 for the three months ended September 30, 2023 as compared to the same period in 2022 due to:

•a $419 decrease in professional services primarily related to regulatory filings; and

•a $609 reduction in insurance; partially offset by:

•a $97 increase in compensation costs; and

•a $241 increase in other costs.

General and administrative expenses decreased $3,255 for the nine months ended September 30, 2023 as compared to the same period in 2022 due to:

•a $1,900 decrease in compensation costs, including a $1,241 decrease in stock-based compensation expense, which was attributable to the modification of awards in the first quarter of 2022 (Note 14);

•a $1,222 reduction in insurance;

•an $872 decline in other costs; and

•a $588 decrease in professional services; partially offset by:

•a $1,327 increase in bad debts expense due to slowing collections in the current year period.

Other Income and Expense

	Three Months Ended September 30,
	2023			2022			Change ($)			Change (%) 1
Other income (expense):
Interest expense, net	$	(720	)	$	(705	)	$	(15	)		2	%
Change in fair value of derivatives		14			22,264			(22,250	)	nm
Other expense, net		(29	)		(73	)		44		nm
Total other income (expense)	$	(735	)	$	21,486		$	(22,221	)	nm

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	Nine Months Ended September 30,
	2023			2022			Change ($)			Change (%) 1
Other income (expense):
Interest expense, net	$	(2,157	)	$	(2,119	)	$	(38	)		2	%
Change in fair value of derivatives		295			36,264			(35,969	)	nm
Other expense, net		(7	)		(962	)		955		nm
Total other income (expense)	$	(1,869	)	$	33,183		$	(35,052	)	nm

1.An “nm” reference means the percentage is not meaningful.

Interest expense for the three and nine months ended September 30, 2023 was similar to that of the same period in 2022.

The change in fair value of derivatives for the three and nine months ended September 30, 2023 as compared to the same periods in 2022 was due to the recognition of derivatives in connection with the Business Combination and changes in their valuations, which were primarily driven by the decline in Leafly’s stock price during the 2022 periods. See Note 18 to our consolidated financial statements within this Quarterly Report for details on the valuations and the fair value changes in the periods presented.

Other expense, net decreased for the nine months ended September 30, 2023 as compared to the same period in 2022 was due primarily to $874 of costs incurred in connection with the Business Combination during 2022, which were allocated upon closing of the Business Combination to newly issued derivative liabilities that are recorded at fair value on a recurring basis.

Non-GAAP Financial Measures

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) income 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 key measures 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 these in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are as follows:

•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and both EBITDA and Adjusted EBITDA do not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

•EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; and

•EBITDA and Adjusted EBITDA do not reflect interest or tax payments that may represent a reduction in cash available to us.

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.

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Net (loss) income	$	(2,210	)	$	15,454		$	(9,043	)	$	10,837
Interest expense, net		720			705			2,157			2,119
Depreciation and amortization expense		276			127			697			276
EBITDA		(1,214	)		16,286			(6,189	)		13,232
Stock-based compensation		997			771			2,235			3,159
Transaction expenses allocated    to derivatives and reverse stock split		55			—			55			874
Severance costs		—			—			754			—
Change in fair value of derivatives		(14	)		(22,264	)		(295	)		(36,264	)
Adjusted EBITDA	$	(176	)	$	(5,207	)	$	(3,440	)	$	(18,999	)

The decrease in EBITDA for the three and nine months ended September 30, 2023 versus the same periods in 2022 is primarily due to the change in fair value of derivatives in 2022 as a result of the decline in Leafly’s stock price. See Note 18 to our consolidated financial statements within this Quarterly Report for more information regarding the fair value of derivatives. The increase in Adjusted EBITDA for the three and nine months ended September 30, 2023 versus the same periods in 2022 reflects the cost savings resulting from Leafly’s reductions in force and cost cutting measures described above.

Financial Condition

Cash, Cash Equivalents, and Restricted Cash

Cash, cash equivalents, and restricted cash totaled $14,718 and $25,202 as of September 30, 2023 and December 31, 2022, respectively. Explanations of our cash flows for the periods presented follow.

Cash Flows

Nine Months Ended September 30, 2023

During the nine months ended September 30, 2023, the Company utilized a total of $10,484 of cash to fund: cash operating losses of approximately $3,585; changes in current assets and liabilities of $6,053; and investing activities (primarily capitalized software costs) of $1,015. The changes in current assets and liabilities during the nine months ended September 30, 2023 included reductions in accrued expenses of $3,246 primarily related to the payment of 2022 bonuses and accrued interest as well as the change in accounts receivable of $2,461, and the change in prepaid expenses and other current assets of $467 related to the payment of directors and officers insurance. Of the $10,484 of cash used in the nine months ended September 30, 2023, only $845 was expended during the second and third quarters, reflecting our concerted efforts to become cash flow positive.

Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022

As compared to the nine months ended September 30, 2022, cash used in operations decreased by $15,492 to $9,638 for the nine months ended September 30, 2023, mainly due to decreased net loss from operations as a result of the reductions in force and the cost cutting measures employed in 2022 and 2023. See discussions under “— Significant Events” and “— Results of Operations” above for more information. Cash used in investing activities decreased $1,179 to $1,015 primarily due to lower software capitalization in the current year. Cash and restricted cash provided by financing decreased $26,896 over this same period to $169 for the nine months ended September 30, 2023, primarily due to proceeds from the convertible promissory notes and the closing of the Business Combination in 2022. See Notes 1, 12, and 13 to our consolidated financial statements within this Quarterly Report for more information.

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Deferred Revenue

Deferred revenue is primarily related to software subscriptions and display ads. The revenue deferred at September 30, 2023 is expected to be recognized in the near term. See Note 9 to our consolidated financial statements within this Quarterly Report for further discussion.

Contractual Obligations and Other Planned Uses of Capital

We are obligated to repay the operating liabilities on our Consolidated Balance Sheets, such as accrued liabilities. In addition, we are obligated to pay any convertible notes when they come due on January 31, 2025 that do not ultimately convert to equity. See Note 11 to our consolidated financial statements within this Quarterly Report for more information.

Liquidity and Capital Resources

We primarily fund our operations and capital expenditures through cash flows generated by operations and our cash, cash equivalents and restricted cash on hand. Our principal liquidity needs in the “near-term” (within the next twelve months) include the direct costs associated with revenues earned, operating expenses, payment of interest on the 2022 Notes and tax payments. The 2022 Notes bear interest at 8% annually, paid in cash semi-annually in arrears on July 31 and January 31 of each year, and mature on January 31, 2025.

To the extent existing sources of liquidity are not sufficient to fund future activities, meet our payment obligations under the 2022 Notes or pursue strategic opportunities, we may need to raise additional funds, which we may seek to do through equity or debt financings, or seek to refinance the 2022 Notes. Any additional equity financing may be dilutive to stockholders. Debt financing, if available, may involve agreements that include equity conversion rights, covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, expending capital, or pursuing certain business opportunities. There can be no assurance that, if needed, we will be able to obtain additional or adequate financing or to refinance or restructure our indebtedness on terms favorable to us, if at all. See, Part I, Item 1A Risk Factors in our 2022 Annual Report under the headings “— We may need to raise additional capital, which may not be available on favorable terms, if at all, causing dilution to our stockholders, restricting our operations or adversely affecting our ability to operate our business.” and “— Risks Relating to our Indebtedness”.

Going Concern Assessment

Leafly has incurred operating losses since its inception and had an accumulated deficit of $73,743 and $64,700 at September 30, 2023 and December 31, 2022, respectively.

Under the rules of ASC Subtopic 205-40 “Presentation of Financial Statements — Going Concern” (“ASC 205-40”), reporting companies are required to evaluate whether conditions and/or events raise substantial doubt about their ability to meet their future financial obligations as they become due within one year after the date that the financial statements are issued. This evaluation takes into account a company’s current available cash and projected cash needs over the one-year evaluation period but may not consider things beyond its control. As noted above, we have experienced revenue declines, incurred recurring operating losses, used cash from operations, and relied on the capital raised in the Business Combination to continue ongoing operations. These conditions, when considered in the aggregate, raise substantial doubt about our ability to continue as a going concern within one year of the date the financial statements included in this Quarterly Report are issued.

•During the fourth quarter of the year ended December 31, 2022, we implemented a restructuring plan, including a reduction in force of approximately 56 persons and other cost cutting measures, with an estimated expected annual cash savings of approximately $16,000 upon implementation. These cost-cutting measures are expected to allow the Company to prioritize growth opportunities, realign its expense structure, and preserve capital while strengthening its financial position. The cash cost for this initiative was $492 reflecting primarily one-time severance and other employee-related termination benefits incurred during the fourth quarter of 2022.

•On March 16, 2023, we announced a second restructuring plan further reducing recurring costs and operating expenditures and identifying cost savings that we expect to result in an estimated annual cash savings of an

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additional $8,000 upon implementation based on a reduction of an additional 40 personnel at a cash cost of $754 recognized in the first quarter of 2023.

The restructuring plans above have been implemented and are expected to continue contributing to the cash savings of the Company. We are closely monitoring and reducing operating expenses where we are able to, while ensuring the trajectory and viability of the business remains intact. After considering all available evidence, we determined that, based on both of our cost reduction measures, our current positive working capital of $13,523 as of September 30, 2023 will be sufficient to meet our capital requirements for a period of at least twelve months from the date that our September 30, 2023 financial statements are issued. We believe our restructuring plans alleviate the substantial doubt about our ability to continue as a going concern within one year of the date these financial statements are issued. Management will continue to evaluate our liquidity and capital resources.

Upon the closing of the Business Combination, Leafly issued the 2022 Notes, which provided incremental funding for our operations. Note 11 to our consolidated financial statements within this Quarterly Report provides additional information regarding the 2022 Notes.

We believe that our capital resources are sufficient to fund our operations for at least the following 12 months.

Nasdaq Notifications of Noncompliance

On November 2, 2022, we received a letter from the Staff of Nasdaq indicating that the Company did not meet the Nasdaq’s Bid Price Requirement and that we had until May 1, 2023 to regain compliance. On May 2, 2023, as a result of the Company failing to regain compliance with the Bid Price Requirement, we received a letter from Nasdaq notifying us that the Company’s common stock would be subject to delisting from Nasdaq unless we timely requested a hearing before the Panel and submitted a plan of compliance. We submitted a plan and on May 23, 2023, the Panel approved it, giving us until October 30, 2023 to regain compliance with the Bid Price Requirement. On September 29, 2023, we received formal notice from Nasdaq (“Compliance Notice”) confirming that the Company regained compliance with the Bid Price Requirement, will continue to be listed and traded on the Nasdaq Capital Market and the listing matter was closed. As of the date of the Compliance Notice, we met the net income from continuing operations listing standards applicable to companies listed on the Nasdaq Capital Market, as set forth in Nasdaq Listing Rules 5550(a) and 5550(b)(3) (Note 8). However, we can give no assurance that we will be able to satisfy the applicable Nasdaq listing standards in the future. See Part II, Item 1A Risk Factors in this Quarterly Report under the heading“— Our shares of common stock are listed on Nasdaq, but we cannot guarantee that we will be able to satisfy the applicable listing standards going forward.”

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of September 30, 2023.

Contractual Obligations

Other than our 2022 Notes (see Note 11 to our consolidated financial statements), we do not have any long-term debt, lease obligations or other long-term liabilities. We have entered into several multi-year licensing and administration agreements in the ordinary course of business, the cost of which are reflected within general and administrative expense within our statements of operations as costs are incurred.

Critical Accounting Estimates

The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates.

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We believe there have been no material changes to the items that we disclosed as our critical accounting estimates under Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our 2022 Annual Report.
 

Recently Issued and Adopted Accounting Pronouncements

Reference is made to Note 2 for information about recently issued accounting pronouncements.
 

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Leafly is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information otherwise required with respect to market risk.
 

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act refers to controls and procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Because there are inherent limitations in all control systems, a control system, no matter how well conceived and operated, can provide only reasonable, as opposed to absolute, assurance that the objectives of the control system are met. 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. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective, at the reasonable assurance level, as of the end of the period covered by this Quarterly Report.



Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the three months ended September 30, 2023.

Part II - Other Information

Item 1. LEGAL PROCEEDINGS.

We are involved in legal and administrative proceedings and litigation arising in the ordinary course of business. We believe that the potential liability, if any, in excess of amounts already accrued from all proceedings, claims and litigation will not have a material effect on our financial position, cash flows or results of operations when resolved in a future period. There have been no material developments to the legal proceedings reported in the 2022 Annual Report.

Item 1A. RISK FACTORS.

Risk factors that affect our business and financial results are discussed in Part I, Item 1A of our 2022 Annual Report and in Part II, Item 1A of our Q1 and Q2 2023 10-Qs. As of the date of this report, other than as set forth below, we are not aware of any material changes in the risk factors disclosed in our 2022 Annual Report or in our Q1 and Q2 2023 10-Qs. You should carefully consider the risks and uncertainties described herein and in our 2022 Annual Report and Q1 and Q2 2023 10-Qs, which have the potential to affect our business, financial condition, results of operations, cash flows or prospects in a material and adverse manner. The risks described herein and in our 2022 Annual Report and Q1 and Q2 2023 10-Qs are not the only risks we face, as there are additional risks and uncertainties not currently known to us or that we currently deem to be immaterial which may in the future adversely affect our business, financial condition and/or operating results.

Our shares of common stock are listed on Nasdaq, but we cannot guarantee that we will be able to satisfy the applicable listing standards going forward.

Nasdaq requires listed companies to comply with certain standards to remain listed. While we believe we currently comply with applicable Nasdaq listing standards, we recently were out of compliance and would have been subject to delisting if we were unable to cure the deficiencies. On October 28, 2022, the Company received a letter from the Staff of Nasdaq providing notification that the Company no longer complied with the $50 million in market value of listed securities standard for continued listing on the Nasdaq Global Market under Nasdaq Listing Rule 5450(b)(2)(A) and that the Company also did not comply with either of the two alternative standards of Listing Rule 5450(b), the equity standard and the total assets and total revenue standard. On April 19, 2023, Nasdaq approved the Company’s application to transfer the listing of its common stock and warrants from the Nasdaq Global Market to the Nasdaq Capital Market, effective April 21, 2023, on the basis that the Company complied with the net income standard for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(3). The transfer of the listing resolved the October 28, 2022 noncompliance notification.

On November 2, 2022, the Company received a letter from the Staff of Nasdaq indicating that it did not meet the requirement to maintain a minimum bid price of $1 per share, as required by the Bid Price Requirement and that it had until May 1, 2023 to regain compliance. On May 2, 2023, as a result of the Company not regaining compliance with the Bid Price Requirement, the Company received a letter from Nasdaq notifying it that the Company’s common stock would be subject to delisting from Nasdaq unless the Company timely requested a hearing before the Panel and submitted a plan of compliance. On May 23, 2023, the Panel approved the Company’s plan of compliance, giving the Company until October 30, 2023 to regain compliance with the Bid Price Requirement. On September 12, 2023, the Company implemented a one-for-twenty reverse split of its common stock (Note 12), and on September 29, 2023, the Company received the Compliance Notice from Nasdaq confirming that the Company regained compliance with the Bid Price Requirement, will continue to be listed and traded on the Nasdaq Capital Market, and the listing matter was closed.

As of the date of the Compliance Notice, we met the net income from continuing operations listing standards applicable to companies listed on the Nasdaq Capital Market, as set forth in Nasdaq Listing Rules 5550(a) and 5550(b)(3). However, we can give no assurance that we will be able to satisfy the applicable Nasdaq listing standards in the future. If we are delisted from the Nasdaq Capital Market, we may not qualify for listing on another national securities exchange. Accordingly, delisting from the Nasdaq Capital Market could make trading our common stock more difficult for investors, potentially leading to declines in our share price and liquidity. In addition, without a Nasdaq market listing, stockholders may have a difficult time getting a quote for the sale or purchase of our stock, the sale or purchase of our stock would likely be made

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more difficult and the trading volume of our stock could decline. Delisting from Nasdaq could also result in negative publicity and make it more difficult for us to raise additional capital. The absence of such a listing may adversely affect the acceptance of our common stock as transaction consideration or the value accorded our common stock by other parties. Further, if we are delisted, we would also incur additional costs under state blue sky laws in connection with any sales of our securities. These requirements could severely limit the market liquidity of our common stock and the ability of our stockholders to sell our common stock in the secondary market. We cannot assure you that our common stock and/or warrants, if delisted from Nasdaq, will be listed on another securities exchange or quoted on an over-the counter quotation system. If our common stock is delisted, it may come within the definition of “penny stock” as defined in the Exchange Act and would be covered by Rule 15g-9 of the Exchange Act. That Rule imposes additional sales practice requirements on broker-dealers who sell securities to persons other than established customers and accredited investors which may further limit the market liquidity of our common stock and the ability of our stockholders to sell our common stock in the secondary market.

Item 6. EXHIBITS.

The following documents are included as exhibits to this Quarterly Report on Form 10-Q:

			Incorporated by Reference
Exhibit Number		Exhibit Description	Form	Period Ending	Exhibit	Filing Date
3.1		Certificate of Amendment	8.K	09/08/23	3.1	09/11/23
10.1	+	Form of Executive Severance Agreement	8-K	07/28/23	10.1	07/28/23
10.2	* +	Form of Amended and Restated 2022 PSU Award Agreement
31.1	*	Certification of Chief Executive Officer of Leafly pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	*	Certification of Chief Financial Officer of Leafly pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	#	Certifications of Chief Executive Officer and Chief Financial Officer of Leafly pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	***	Inline XBRL Instance Document
101.SCH	****	Inline XBRL Taxonomy Extension Schema Document
101.CAL	****	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	****	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	****	Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	****	Inline XBRL Taxonomy Extension Definition Linkbase Document
104	***	Cover Page Interactive Data File

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*	Filed herewith.
***	The XBRL Instance Document and Cover Page Interactive Data File do not appear in the Interactive Data File because their XBRL tags are embedded within the Inline XBRL document.
****	Submitted electronically herewith.
#	In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 34-47986, the certifications furnished in Exhibit 32 hereto are deemed to accompany this Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Exchange Act or deemed to be incorporated by reference into any filing under the Exchange Act or the Securities Act except to the extent that the registrant specifically incorporates it by reference.
+	Management contract or compensation plan or arrangement.

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SIGNATURES

Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on November 13, 2023.

Leafly Holdings, Inc.
By:	/s/ Yoko Miyashita
	Yoko Miyashita
	Chief Executive Officer
By:	/s/ Suresh Krishnaswamy
	Suresh Krishnaswamy
	Chief Financial Officer

EX-10.2

Leafly Holdings, Inc.2021 Equity Incentive Plan

Amended and Restated Performance Stock Unit Award Agreement

This Amended and Restated Performance Stock Unit Award Agreement (this “Agreement”) is made by and between Leafly Holdings, Inc., a corporation organized and existing under the laws of Delaware (the “Company”), and [●] (the “Participant”), effective as of [●], to amend and restate that certain Performance Stock Unit Award Agreement (“Original Agreement”) by and between the Company and the Participant, effective as of [●] (the “Date of Grant”).

RECITALS

WHEREAS, the Company has adopted the Leafly Holdings, Inc. 2021 Equity Incentive Plan (as may be further amended, amended and restated or modified from time to time) (the “Plan”), which is incorporated herein by reference and made a part of this Agreement. Capitalized terms not otherwise defined in this Agreement have the meanings ascribed to those terms in the Plan;

WHEREAS, the Committee has determined that it is in the best interests of the Company and its stockholders to amend and restate the Original Agreement as provided for herein pursuant to the Plan and the terms set forth herein; and

WHEREAS, the Company and the Participant are parties to the Original Agreement, which they now wish to amend and restate.

NOW THEREFORE, in consideration of the premises and mutual covenants set forth in this Agreement, the parties agree as follows:

1.Grant of Award. The Company hereby grants to the Participant, effective as of the Date of Grant, [●] performance stock units (“PSUs”), on the terms and conditions set forth in the Plan and this Agreement.

2.Vesting Start Date. [●]

3.Performance Periods. Three separate performance periods (each, a “Performance Period” apply to the PSUs pursuant to which the following number of PSUs are eligible to vest each Performance Period:

Performance Period	Number of PSUs Eligible to Vest in Performance Period
[●]	[●]

[●]	[●]
[●]	[●]

4.Vesting and Settlement of PSUs.

(a)General. Subject to the terms and conditions set forth in the Plan and this Agreement, PSUs are eligible for vesting based on the achievement of the targets established by the Committee (the “Performance Goals”) for the applicable Performance Period, as defined and set forth on Annex A (or as will be determined by the Committee). If all or a portion of the PSUs do not vest for a particular Performance Period based on achievement of the Performance Goals, such unvested PSUs will remain outstanding and will be eligible for vesting if the Company achieves the market capitalization milestone (the “Market Cap Milestone”) set forth on Annex A at any time on or prior to February 4, 2026. In the event the Market Cap Milestone is achieved on or prior to February 4, 2026, all then outstanding unvested PSUs will become fully vested as of the Vesting Date (as defined below).

(b)Determination of Vested PSUs. PSUs will be treated as vested only as of the date the Committee determines the level of achievement of the Performance Goals for a Performance Period or the achievement of the Market Cap Milestone (the date of each such determination, a “Vesting Date”), subject to the Participant’s continued Service through the applicable Vesting Date.

(c)Settlement of Vested PSUs. Subject to the terms of this Agreement, the Company will deliver to the Participant within thirty (30) days following the Vesting Date, but in no event later than March 15th of the calendar year following completion of the applicable Performance Period or achievement of the Market Cap Milestone, as applicable, that number of shares of Common Stock equal to the aggregate number of PSUs that the Committee determines have vested (rounded up to the nearest whole PSU and reduced by any shares sold or withheld to satisfy tax withholding requirements). The Company may deliver such shares of Common Stock either through book entry accounts held by, or in the name of, the Participant or cause to be issued a certificate or certificates representing the number of shares of Common Stock to be issued in respect of the PSUs, registered in the name of the Participant.

(d)Forfeiture of Unvested PSUs. Subject to earlier forfeiture in the event of the Participant’s termination of Service as set forth in Section 5, all PSUs that do not become vested PSUs (including as a result of the Company not achieving the Market Cap Milestone on or prior to February 4, 2026) will be automatically forfeited to the Company without consideration. The Participant will have no

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further rights, and the Company will have no further obligations to the Participant, with respect to such unvested, forfeited PSUs.

(e)Change of Control. In the event of a Change in Control, all then outstanding unvested PSUs will become fully vested and paid out in within thirty (30) days of such Change in Control; provided that such Change in Control constitutes a “change in control event” as defined under Section 409A of the Code.

5.Termination of Service. Upon a termination of the Participant’s Service for any reason prior to a Vesting Date, any then unvested PSUs as of such termination date will be automatically forfeited to the Company without consideration. The Participant will have no further rights, and the Company will have no further obligations to the Participant, with respect to such unvested, forfeited PSUs (even with respect to any “catch-up” vesting with respect to the Market Cap Milestone). The PSUs and the shares of Common Stock (and any resulting proceeds) will be subject to Sections 12.2 (Termination for Cause) and 12.3 (Right of Recapture) of the Plan.

For purposes of the PSUs, termination of Service will be considered to occur as of the date the Participant is no longer actively providing services to the Company or any Subsidiary (the “Service Recipient”), regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Participant is employed or otherwise rendering services or the terms of the Participant’s employment or service agreement, if any. Unless otherwise determined by the Committee, the Participant’s right to vest in the PSUs, if any, will cease as of this date and will not be extended by any notice period (e.g., the Participant’s period of service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where the Participant is employed or otherwise providing services, or the terms of the Participant’s employment or service agreement, if any). The Company will have the exclusive discretion to determine when the Participant is no longer actively providing services for purposes of the PSUs (including whether the Participant may still be considered to be actively providing services while on leave of absence).

6.Tax Withholding Requirements.

(a)The Participant is ultimately responsible for all taxes owed in connection with the PSUs (e.g., upon vesting and/or receipt of shares thereunder) (“Tax-Related Items”), regardless of any action the Company takes with respect to such Tax-Related Items. The Company will have the right to deduct or withhold from any shares of Common Stock deliverable under this Agreement, or in its discretion to require the Participant to remit to the Company, amounts necessary to satisfy all federal, state, local and other taxes required to be withheld in connection with the settlement of the PSUs, including through open market sales of shares under the PSUs to generate proceeds to satisfy tax withholding obligations.

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The Participant agrees to make adequate arrangements satisfactory to the Company and/or a Subsidiary, as applicable, prior to any relevant taxable or tax withholding event, as applicable, to satisfy any applicable tax withholding obligation related to Tax-Related Items. The Company has no obligation to issue shares pursuant to vested PSUs until the Participant has satisfied any tax withholding obligations related to the Tax-Related Items in a manner acceptable to the Company.
The Company may withhold or account for Tax-Related Items by considering statutory withholding rates or other applicable withholding rates, including maximum applicable rates in the Participant’s jurisdiction(s). In the event of over-withholding, the Participant may receive a refund of any over-withheld amount in cash and will have no entitlement to the equivalent in Common Stock, or if not refunded, the Participant may seek a refund from the applicable tax authorities. In the event of under-withholding, the Participant may be required to pay additional Tax-Related Items directly to the applicable tax authorities or to the Company and/or the Subsidiary to whom the Participant provides services.

(b)The Participant acknowledges that the Company and any Subsidiary to whom the Participant provides services (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the PSUs, including but not limited to, the grant, the vesting, the issuance of shares of Common Stock upon vesting, the subsequent sale of the shares acquired pursuant to the PSUs, and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the PSUs to reduce or eliminate the Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, the Participant acknowledges that if the Participant is subject to tax in more than one jurisdiction, the Company and/or a Subsidiary may be required to withhold or account for Tax-Related Items in more than one jurisdiction. By accepting the Award, the Participant agrees that the Participant will be deemed to have waived any claims against the Company with respect to any tax consequences related to the PSUs.

7.Non-Disclosure and Non-Use of the Company’s Trade Secrets or Confidential Information and Restricted Activities. In consideration of the PSUs granted under this Agreement,

(a)At all times during and following the Participant’s Service, the Participant agrees that he or she will not, either directly or indirectly, and the Participant will not permit any Covered Entity which is Controlled by the Participant to, either directly or indirectly, (i) divulge, use, disclose (in any way or in any manner, including by posting on the Internet), reproduce, distribute, or reverse engineer or otherwise provide the Company’s Trade Secrets or Confidential Information to any person, firm, corporation, reporter, author, producer or similar person or entity; (ii) take any action that would make available Trade Secrets or Confidential Information to the general public in any form; (iii) take any action that uses Trade Secrets or Confidential Information to solicit any client or prospective client of the Company; or (iv) take any action that uses Trade Secrets or Confidential Information for

4

solicitation or marketing for any service or product or on the Participant’s behalf or on behalf of any entity other than the Company with which the Participant may become associated, except (i) as required in connection with the performance of such Participant’s duties to the Company, (ii) as required to be included in any report, statement or testimony requested by any municipal, state or national regulatory body having jurisdiction over the Participant or any Covered Entity which is Controlled by the Participant, (iii) as required in response to any summons or subpoena or in connection with any litigation, (iv) to the extent necessary in order to comply with any law, order, regulation, ruling or governmental request applicable to the Participant or any Covered Entity which is Controlled by the Participant, (v) as required in connection with an audit by any taxing authority, or (vi) as permitted by the express written consent of the Board. In the event that the Participant or any such Covered Entity which is Controlled by the Participant is required to disclose Trade Secrets or Confidential Information pursuant to the foregoing exceptions, the Participant will promptly notify the Company of such pending disclosure and assist the Company (at the Company’s expense) in seeking a protective order or in objecting to such request, summons or subpoena with regard to the Trade Secrets or Confidential Information. If the Company does not obtain such relief after a period that is reasonable under the circumstances, the Participant (or such Covered Entity) may disclose that portion of the Trade Secrets or Confidential Information which counsel to such party advises such party that they are legally compelled to disclose. In such cases, the Participant will promptly provide the Company with a copy of the Trade Secrets or Confidential Information so disclosed. This provision applies without limitation to unauthorized use of Trade Secrets or Confidential Information in any medium, writings of any kind containing such information or materials, including books, and articles, blogs, websites, or writings of any other kind, or film, videotape, or audiotape. If, and only if, the controlling state law applicable to the Participant requires a time limit to be placed on restrictions concerning the post-employment use of Confidential Information for the restriction to be enforceable, then this restriction on the Participant’s use of Confidential Information that is not a Trade Secret will expire two (2) years after the Participant’s employment or other association with the Company ends. This time limit will not apply to Confidential Information that qualifies as a Trade Secret. The Company’s trade secrets will remain protected for as long as they qualify as trade secrets under applicable law.

(b)Notwithstanding the Participant’s confidentiality obligations set forth in this Section 7, the Participant understands that, pursuant to the Defend Trade Secrets Act of 2016, the Participant will not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a Trade Secret that: (i) is made (x) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (y) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. The Participant understands that in the event it is determined that disclosure of the

5

Trade Secrets of the Company or any of its Subsidiaries or Affiliates was not done in good faith pursuant to the above, the Participant will be subject to substantial damages under federal criminal and civil law, including punitive damages and attorneys’ fees.

(c)Notwithstanding anything to the contrary contained herein, nothing in this Agreement will limit or interfere with the Participant’s right, without notice to or authorization of the Company, to communicate and cooperate in good faith with a Government Agency for the purpose of (i) reporting a possible violation of any U.S. federal, state, or local law or regulation, (ii) participating in any investigation or proceeding that may be conducted or managed by any Government Agency, including by providing documents or other information, or (iii) filing a charge or complaint with a Government Agency. For purposes of this Agreement, “Government Agency” means the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority, or any other self-regulatory organization or any other federal, state or local governmental agency or commission.

(d)The Participant understands that nothing in this Agreement prohibits or restricts the Participant from disclosing the Participant’s own compensation. The Participant understands that if the Participant is a nonsupervisory employee, nothing in this Agreement prohibits or restricts the Participant from disclosing the Participant’s or others’ terms and conditions of employment, compensation, hours or working conditions with coworkers or union representatives or exercising protected rights under Section 7 of the National Labor Relations Act to the extent that such rights cannot be waived by the Agreement.

(e)The Participant understands that nothing in this Agreement prevents the Participant from discussing or disclosing information about conduct that the Participant reasonably believes is unlawful discrimination, harassment, or retaliation, a wage-and-hour violation, or sexual assault, that is recognized as unlawful under state, federal or common law, or that is recognized as against a clear mandate of public policy, occurring in the workplace, at work-related events coordinated by or through the Company, or between employees, or between the Company and an employee, whether on or off the employment premises.

8.Non-Compete; Non-Solicitation; and Non-Disparagement. In further consideration of the PSUs granted under this Agreement:

(a)Non-Competition. During the term of the Participant’s Service and for 12 months following the termination of the Participant’s Service (the “Restricted Period”), the Participant will not, directly or indirectly, whether for pay or otherwise (i) form or assist others in forming, be employed by, render services of an executive, advertising, marketing, sales, administrative, supervisory technical, research,

6

purchasing or consulting nature, or otherwise assist or lend the Participant’s name, counsel or assistance to, any person or entity that engages in a business that competes with or intends to compete with the Business.

(b)Non-Solicitation. During the term of the Participant’s Service and during the Restricted Period, the Participant agrees that Participant will not, in any manner, directly or indirectly, solicit any customer or, where allowed by law, Prospective Customer of the Company to whom the Participant provided services, with or for whom the Participant transacted business, or about whom the Participant learned Trade Secrets or Confidential Information during the six (6) months prior to the Participant’s termination, in each case, for the purpose of providing goods or services competitive with the Business. A “Prospective Customer” is any person or entity with whom the Participant has communicated or whom the Participant solicited for the purposes of obtaining or transacting business and/or whom the Participant has analyzed concerning potential business at any time prior to the termination of the Participant’s Service with the Company.

(c)Non-Solicitation of Participants. During the Restricted Period, the Participant agrees that he or she will not, in any manner, directly or indirectly, solicit, hire, attempt to solicit or attempt to hire any person who is a non-administrative (i.e., non-clerical) employee of the Company, or an employee under the Participant’s control, in each case, during the six (6) months prior to the Participant’s termination, to apply for or accept employment with any person or entity that provides goods or services competitive with the Business, unless the Company first terminated the employment of such person.

(d)The Participant understands and acknowledges that Sections 8(a),(b) and (c), which contain noncompetition and nonsolicitation provisions, will apply only if and when the Participant’s annualized Earnings (as defined in Section 8(e)) exceed one hundred seven thousand three hundred one dollars and four cents ($107,301.04) per year. The dollar amounts specified in this Section 8(d) will be adjusted annually for inflation in accordance with Chapter 299, Washington State Laws of 2019 (Enacted May 8, 2019).

(e)"Earnings" means the compensation reflected on box 1 of the Participant’s United States Internal Revenue Service Form W-2 from the Company that is paid to the Participant over the prior year, or portion thereof for which the Participant was employed, annualized and calculated as of the earlier of the date that enforcement of the noncompetition covenant is sought or the date of separation from employment.

(f)The Participant agrees that during the Restricted Period, regardless of whether the Participant is subject to Sections 8(b) and (c), the Participant will not, directly or indirectly, (i) solicit (including without limitation by recruiting or otherwise making efforts to hire) any employee of the Company to leave the Company, or (ii) solicit any customer of the Company to cease or reduce the extent to which it is doing business with the Company.

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(g)The Participant agrees that during the Restriction Period, the Participant will inform any entity or person with whom the Participant may seek to enter into a business relationship (whether as an owner, employee, independent contractor or otherwise) of the Participant’s contractual obligations under this Agreement. The Participant also understands and agrees that the Company may, with or without prior notice to the Participant and during or after the term of the Participant’s Service, notify third parties of the Participant’s agreements and obligations under this Agreement. The Participant further agrees that, upon written request by the Company, the Participant will respond to the Company in writing regarding the status of the Participant’s employment or proposed employment with any party during the Restriction Period.

(h)Non-Disparagement. The Participant agrees and covenants that the Participant will not make, publish, or communicate to any person or entity or in any public forum any defamatory or disparaging remarks, comments, or statements concerning the Company, or any of its products, services, employees, officers, and existing and prospective customers, suppliers, investors, and other associated third-parties. This Section does not, in any way, restrict or impede the Participant from exercising the Participant’s rights under Section 7 of the National Labor Relations Act to the extent that such rights cannot be waived by agreement or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an authorized government agency, provided that such compliance does not exceed that required by the law, regulation, or order. The Participant will promptly provide written notice of any such order to an authorized officer of the Company immediately after receiving such order, but in any event sufficiently in advance of making any disclosure to permit the Company to contest the order or seek confidentiality protections, as determined in the Company’s sole discretion.

9.Enforcement; Remedies. The Participant acknowledges that the Participant’s expertise in the Business is of a special and unique character which gives this expertise a particular value, and that a breach of Sections 7 or 8 by the Participant will cause serious and potentially irreparable harm to the Company. The Participant therefore acknowledges that a breach of Sections 7 or 8 by the Participant cannot be adequately compensated in an action for damages at law, and equitable relief would be necessary to protect the Company from a violation of this Agreement and from the harm which this Agreement is intended to prevent. By reason thereof, the Participant acknowledges that the Company is entitled, in addition to any other remedies it may have under this Agreement or otherwise, to preliminary and permanent injunctive and other equitable relief to prevent or curtail any breach of this Agreement. The Participant acknowledges, however, that no specification in this Agreement of a specific legal or equitable remedy may be construed as a waiver of or prohibition against the Company pursuing other legal or equitable remedies in the event of a breach of this Agreement by the Participant. For purposes of Sections 7 and 8, “Company” will specifically include the Company and its direct and indirect parent entities, subsidiaries, successors and assigns. If the Participant fails to comply with a restriction in this Agreement that applies for a limited period of time after employment, the time period for that restriction will be extended by the greater of either: one day for each day the Participant is found to have violated the restriction, or the length of the legal proceeding necessary to secure enforcement of the restriction; provided, however, that

8

this extension of time will be capped so that the extension of time does not exceed two years from the date their employment ended, and if this extension would make the restriction unenforceable under applicable law it will not be applied (“Fairness Extension”).

10.Definitions.

(a)“Business” means the business of a technology-enabled marketplace that allows consumers to access information about, and/or place orders for, cannabis (including hemp) brands, products and/or services, and any other business engaged in or service rendered by, or a business or services planned to be entered into by, the Company during the term of the Participant’s Service.

(b)“Confidential Information” means any data or information, without regard to form, other than Trade Secrets, that is valuable to the Company and is not generally known by the public. To the extent consistent with the foregoing, Trade Secrets or Confidential Information includes, but is not limited to: (i) the names, addresses, phone numbers, accounts, financial information, and other information concerning patients, referral sources, payors (employers, managed care organizations, workers compensation insurers, and other types of payors) and other clients of the Company; (ii) non-public information and materials describing or relating to the Company’s business or financial affairs, including but not limited to financial and/or investment performance information, personnel matters, products, operating procedures, organizational responsibilities, marketing matters, or policies or procedures of the Company; or (iii) information and materials describing the Company’s existing or new products and services, including analytical data and techniques, and product, service or marketing concepts under development at or for the Company, and the status of such development. Trade Secrets or Confidential Information does not include information that, other than as a result of a breach by the Participant of this Agreement, (x) is or becomes generally known within the relevant industry, or (y) is or becomes known to the Participant other than through the Participant’s work for the Company, or (z) is or becomes generally available to the public.

(c)“Control” means (i) in the case of a corporate entity, direct or indirect ownership of at least fifty percent (50%) of the stock or securities entitled to vote for the election of directors; and (ii) in the case of a non-corporate entity (such as a limited liability company, partnership or limited partnership), either (x) direct or indirect ownership of at least fifty percent (50%) of the equity interests in such entity, or (y) the power to direct the management and policies of such entity.

(d)“Covered Entity” means every Affiliate of the Participant, and every business, association, trust, corporation, partnership, limited liability company, proprietorship or other entity in which the Participant has an investment (whether through debt or equity securities), or maintains any capital contribution or made any outstanding advances to, or in which any Affiliate of the Participant has an ownership interest or profit sharing percentage, or a firm from which the Participant or any Affiliate of the Participant receives or is entitled to receive income, compensation or consulting fees in which the Participant or any Affiliate of the

9

Participant has an interest as a lender (other than solely as a trade creditor for the sale of goods or provision of services that do not otherwise violate the provisions of this Agreement). The agreements of the Participant contained herein specifically apply to each entity which is presently a Covered Entity (so long as it remains a Covered Entity) or which becomes a Covered Entity subsequent to the date of this Agreement.

(e) “Trade Secrets” means information, without regard to form, including, but not limited to, technical or nontechnical data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a process, a prototype, financial data, financial plans, product plans, or a list of actual or potential customers or suppliers which is not commonly known by or available to the public and which information: (i) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. Trade Secrets also include any information or data described above that the Company obtains from another party and that the Company treats as proprietary or designates as a Trade Secrets, whether or not owned or developed by the Company.

11.Compliance with Law.

(a) Notwithstanding any other provision of this Agreement, shares of Common Stock will not be issued upon PSU vesting unless the shares issuable are registered under the Securities Act or, if such shares are not then so registered, the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act. The PSUs and the issuance of any shares of Common Stock thereunder also must comply with all other applicable laws and regulations governing the PSUs and the shares issuable thereunder, including any U.S. and non-U.S. state, federal, and local applicable laws, and the Participant will not receive shares if the Company determines that such receipt would not be in material compliance with such applicable laws.

(b) The Participant understands that the Company is under no obligation to register or qualify the PSUs or the shares issuable upon vesting of the PSUs with the U.S. Securities and Exchange Commission or any state or foreign securities commission (or maintain any such registration or qualification if made) or to seek approval or clearance from any governmental authority for the issuance or sale of such shares. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares will relieve the Company of any liability in respect of the failure to issue or sell the shares as to which such requisite authority is not obtained. Further, the Participant agrees that the Company

10

will have unilateral authority to amend the Plan and this Agreement without the Participant’s consent to the extent necessary to comply with securities or other laws applicable to the issuance of the shares.

SHARES MAY NOT BE ISSUED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED.

(c) The Participant hereby agrees that he or she will in no event sell or distribute all or any part of the shares that may be received pursuant to the settlement of vested PSUs unless (i) there is an effective registration statement under the Securities Act, or (ii) the Company receives an opinion of the Participant’s legal counsel (concurred by legal counsel for the Company) stating that such transaction is exempt from registration or the Company otherwise satisfies itself that such transaction is exempt from registration. Sales of the Shares are also subject to compliance with other laws and regulations, including, but not limited to, U.S. and non-U.S. securities, exchange control, insider trading and market abuse laws, and with the Company’s insider trading policy.

12.Nature of Grant.

By accepting the Award, the Participant acknowledges, understands and agrees that:

(a)the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;

(b)the grant of PSUs is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of PSUs, or benefits in lieu of PSUs, even if PSUs have been granted in the past;

(c)all decisions with respect to future PSU grants or other grants, if any, will be at the sole discretion of the Company;

(d)the Participant is voluntarily participating in the Plan;

(e)the PSUs and the Shares underlying the PSUs, and the income from and value of same, are not intended to replace any pension rights or compensation;

(f)the PSUs and the Shares underlying the PSUs, and the income from and value of same, are not part of normal or expected compensation for purposes of, including but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, holiday pay,

11

holiday top-up, pension or retirement or welfare benefits or similar mandatory payments;

(g)the future value of the shares underlying the PSUs is unknown, indeterminable and cannot be predicted with certainty; and

(h)no claim or entitlement to compensation or damages will arise from forfeiture of the PSUs resulting from (a) the Participant’s termination of Service (for any reason whatsoever whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Participant is employed or providing services or the terms of the Participant’s employment or service agreement, if any) or (b) the application of Section 13(c) of this Agreement or any compensation recovery or clawback policies adopted by the Company.

13.Miscellaneous Provisions.

(a)Rights of a Stockholder. Prior to settlement of the PSUs in shares of Common Stock, neither the Participant nor the Participant’s representatives will have any rights as a stockholder of the Company with respect to any shares of Common Stock underlying the PSUs.

(b)Transfer Restrictions. PSUs may not be sold, transferred, assigned, encumbered, pledged or otherwise disposed of, whether voluntarily or by operation of law, during the Participant’s lifetime. The shares of Common Stock delivered hereunder will be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations and other requirements of the Securities and Exchange Commission, NASDAQ or any stock exchange upon which such shares of Common Stock are listed, any applicable federal or state laws and any agreement with, or policy of, the Company or the Committee to which the Participant is a party or subject, and the Committee may cause orders or designations to be placed upon the books and records of the Company’s transfer agent to make appropriate reference to such restrictions.

(c)Clawback Policy. The Participant acknowledges that the Participant is subject to the provisions of Section 12 (Forfeiture Events) and Section 14.6 (Trading Policy and Other Restrictions) of the Plan and any compensation recovery, “clawback” or similar policy adopted by the Company from time to time and/or made applicable by law including the provisions of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection and Act and the rules, regulations and requirements adopted thereunder by the Securities and Exchange Commission and/or any national securities exchange on which the Company’s equity securities may be listed.

12

(d)Dividends; Adjustments. The Participant will receive no benefit or adjustment to PSUs with respect to any cash dividend, stock dividend or other distributions; provided that in the event of any change with respect to the outstanding shares of Common Stock contemplated by Section 4.5 of the Plan prior to delivery, the PSUs may be adjusted in accordance with Section 4.5 of the Plan.

(e)No Right to Continued Service. Nothing in this Agreement or the Plan confers upon the Participant any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Subsidiary retaining the Participant) or of the Participant, which rights are hereby expressly reserved by each, to terminate his or her Service at any time and for any reason, with or without cause.

(f)No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Participant’s participation in the Plan or the Participant’s acquisition or sale of shares underlying the PSUs. The Participant should consult with the Participant’s own personal tax, legal and financial advisors regarding participation in the Plan before taking any action related to the Plan.

(g)Successors and Assigns. The provisions of this Agreement will inure to the benefit of, and be binding upon, the Company and its successors and assigns and upon the Participant, the Participant’s executor, personal representative(s), distributees, administrator, permitted transferees, permitted assignees, beneficiaries, and legatee(s), as applicable, whether or not any such person will have become a party to this Agreement and have agreed in writing to be joined herein and be bound by the terms hereof.

(h)Severability. The provisions of this Agreement are severable, and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, then the remaining provisions will nevertheless be binding and enforceable.

(i)Amendment. Except as otherwise provided in the Plan, this Agreement will not be amended unless the amendment is agreed to in writing by both the Participant and the Company.

(j)Imposition of Other Requirements. The Company reserves the right to impose other requirements on the Participant’s participation in the Plan, on the PSUs and on any shares acquired under the Plan to the extent the Company determines it is

13

necessary or advisable for legal or administrative reasons, and to require the Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

(k)No Waiver. No waiver of any provision of this Agreement will be valid unless in writing and signed by the person against whom such waiver is sought to be enforced, nor will failure to enforce any right hereunder constitute a continuing waiver of the same or a waiver of any other right hereunder.

(l)Choice of Law; Jurisdiction. This Agreement and all claims, causes of action or proceedings (whether in contract, in tort, at law or otherwise) that may be based upon, arise out of or relate to this Agreement will be governed by the internal laws of the State of Washington, excluding any conflicts or choice-of-law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.

(m)Section 409A Compliance. The Company intends that the PSUs will be exempt from, or comply with, the requirements of Section 409A of the Code; provided, however, that the Company makes no representations that the PSUs will be exempt from or comply with Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to the PSUs. If necessary for exemption from, or compliance with, Section 409A of the Code, each installment that vests or is delivered under an Award in a series of payments or installments will be treated as a separate payment for purposes of Section 409A of the Code.

(n)Signature in Counterparts. This Agreement may be signed in counterparts, manually or electronically, each of which will be an original, with the same effect as if the signatures to each were upon the same instrument.

(o)Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to any Awards granted under the Plan by electronic means or to request the Participant’s consent to participate in the Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

(p)Acceptance. The Participant hereby acknowledges receipt of a copy of the Plan and this Agreement. The Participant has read and understands the terms and provisions of the Plan and this Agreement, and accepts the PSUs subject to all of the terms and conditions of the Plan and this Agreement. In the event of a conflict

14

between any term or provision contained in this Agreement and a term or provision of the Plan, the applicable term and provision of the Plan will govern and prevail.

[Signature page follows.]

15

IN WITNESS WHEREOF, the Company and the Participant have executed this Performance Stock Unit Award Agreement as of the dates set forth below.

PARTICIPANT LEAFLY HOLDINGS, INC.

_________________________________ By: ______________________________

Date:_____________________________ Date: _____________________________

[Signature Page – Amended and Restated PSU Award Agreement]

IF " DOCVARIABLE "SWDocIDLocation" " = "1" "WEIL:\98477713\4\58167.0004" ""

Leafly Holdings, Inc.Annex A to
Amended and Restated Performance Stock Unit Award Agreement

The PSUs are subject to the terms of the Agreement to which this Annex A is attached. Capitalized terms used, but not defined in this Annex A, have same meanings as in the Agreement to which this Annex A is attached.

1. Performance Goals

The PSUs will vest based on achievement of the Performance Goals established for each Performance Period, as set forth below.

(a)First Performance Period

[●]

(b)Second Performance Period

[●]

(c) Third Performance Period

[●]

2. Definitions of Performance Goals and Market Cap Milestone

(a) “Top Line Revenue” means total reported revenue in the Company’s Annual Report on Form 10-K (“Form 10-K”) for the applicable Performance Period.

(b) “Adjusted EBITDA” means Adjusted EBITDA as reported in the Company’s Form 10-K for the applicable Performance Period, further adjusted for the impact of any change in accounting due to changes in the form of payment for awards under the annual incentive plan (e.g., any add back to expense for payment of annual incentive awards in the form of stock-based awards instead of cash).

(c) “Market Cap Milestone” means the Company’s achievement of a $1 billion market capitalization for any twenty (20) days during a thirty (30)-day period on or before February 4, 2026.

(d) “Cash Balance” means the amount equal to the Company’s “cash and cash equivalents” less “restricted cash”, each as reflected on the Company’s consolidated balance sheets as of December 31 for the applicable Performance Period.

3. Determination of Vested PSUs.

Following each Performance Period, the Committee will determine the level of achievement of each Performance Goal. The Committee will also determine any achievement of the Market Cap Milestone, achievement of which will result in all then outstanding unvested PSUs becoming vested. Vesting is subject to the Participant’s continuous Service on a Vesting Date. No linear interpolation will apply for any results.

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Yoko Miyashita, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 of Leafly Holdings, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 13, 2023	By:	/s/ Yoko Miyashita
		Yoko Miyashita
		Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Suresh Krishnaswamy, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 of Leafly Holdings, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 13, 2023	By:	/s/ Suresh Krishnaswamy
		Suresh Krishnaswamy
		Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATIONS PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Yoko Miyashita, the Chief Executive Officer of Leafly Holdings, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of Leafly Holdings, Inc. for the quarter ended September 30, 2023, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Leafly Holdings, Inc.

Date: November 13, 2023	By:	/s/ Yoko Miyashita
		Yoko Miyashita
		Chief Executive Officer (Principal Executive Officer)

I, Suresh Krishnaswamy, the Chief Financial Officer of Leafly Holdings, Inc., certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of Leafly Holdings, Inc. for the quarter ended September 30, 2023, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Leafly Holdings, Inc.

Date: November 13, 2023	By:	/s/ Suresh Krishnaswamy
		Suresh Krishnaswamy
		Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

This certification accompanies the Quarterly Report on Form 10-Q of Leafly Holdings, Inc. for the quarter ended September 30, 2023, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Leafly Holdings, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of such Quarterly Report on Form 10-Q), irrespective of any generalincorporation language contained in such filing.

XML

Cover - shares	9 Months Ended
	Sep. 30, 2023	Nov. 08, 2023
Entity Listings [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	001-39119
Entity Registrant Name	Leafly Holdings, Inc. /DE
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	84-2266022
Entity Address, Address Line One	113 Cherry Street, PMB 88154
Entity Address, City or Town	Seattle
Entity Address, State or Province	WA
Entity Address, Postal Zip Code	98104-2205
City Area Code	206
Local Phone Number	455-9504
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		2,177,721
Entity Central Index Key	0001785592
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Amendment Flag	false
Common Stock, $0.0001 Par Value
Entity Listings [Line Items]
Title of 12(b) Security	Common Stock, $0.0001 Par Value
Trading Symbol	LFLY
Security Exchange Name	NASDAQ
Warrants, exercisable for shares of common stock at an exercise price of $11.50 per share
Entity Listings [Line Items]
Title of 12(b) Security	Warrants, exercisable for shares of common stockat an exercise price of $11.50 per share
Trading Symbol	LFLYW
Security Exchange Name	NASDAQ

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 14,469	$ 24,594
Accounts receivable, net of allowance for doubtful accounts of $1,400 and $908, respectively	3,409	3,298
Prepaid expenses and other current assets	2,339	1,792
Restricted cash	0	360
Total current assets	20,217	30,044
Property, equipment, and software, net	2,541	2,285
Restricted cash - long-term portion	249	248
Other assets	55	135
Total assets	23,062	32,712
Current liabilities
Accounts payable	1,609	1,625
Accrued expenses and other current liabilities	2,990	6,235
Deferred revenue	2,095	1,958
Total current liabilities	6,694	9,818
Non-current liabilities
Non-current portion of convertible promissory notes, net	29,272	28,863
Total non-current liabilities	29,415	29,301
Total liabilities	36,109	39,119
Commitments and contingencies (Note 8)
Stockholders' deficit
Preferred stock: $0.0001 par value; 5,000 and 5,000 authorized; 0 and 0 issued and outstanding; aggregate liquidation preference of $0 and $0 at September 30, 2023 and December 31, 2022, respectively	0	0
Common stock: $0.0001 par value; 200,000 and 200,000 authorized; 2.311 and 2,164 issued at September 30, 2023 and December 31, 2022, respectively	0	0
Treasury stock: 154 and 154 shares held at September 30, 2023 and December 31, 2022, respectively	(31,663)	(31,663)
Additional paid-in capital	92,359	89,956
Accumulated deficit	(73,743)	(64,700)
Total stockholders' deficit	(13,047)	(6,407)
Total liabilities and stockholders' deficit	23,062	32,712
Private warrants derivative liability
Non-current liabilities
Derivative liability	113	182
Escrow shares derivative liability
Non-current liabilities
Derivative liability	5	52
Stockholder earn-out rights derivative liability
Non-current liabilities
Derivative liability	$ 25	$ 204

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 1,400	$ 908
Preferred stock, par value (in usd per share)	$ 0.0001	$ 0.0001
Preferred stock, authorized (in shares)	5,000,000	5,000,000
Preferred stock, issued (in shares)	0	0
Preferred stock, outstanding (in shares)	0	0
Preferred stock, aggregate liquidation preference	$ 0	$ 0
Common stock, par value (in usd per share)	$ 0.0001	$ 0.0001
Common stock, authorized (in shares)	200,000,000	200,000,000
Common stock, issued (in shares)	2,311,000	2,164,000
Treasury stock (in shares)	154,000	154,000

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CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
Revenue	$ 10,583	$ 11,781	$ 32,507	$ 35,251
Cost of revenue	1,163	1,515	3,747	4,411
Gross profit	9,420	10,266	28,760	30,840
Operating expenses
Sales and marketing	2,563	6,403	10,326	21,529
Product development	2,533	3,406	8,133	10,927
General and administrative	5,799	6,489	17,475	20,730
Total operating expenses	10,895	16,298	35,934	53,186
Loss from operations	(1,475)	(6,032)	(7,174)	(22,346)
Interest expense, net	(720)	(705)	(2,157)	(2,119)
Change in fair value of derivatives	14	22,264	295	36,264
Other income (expense), net	(29)	(73)	(7)	(962)
Net (loss) income	$ (2,210)	$ 15,454	$ (9,043)	$ 10,837
Net (loss) income per share:
Basic (in usd per share)	$ (1.1)	$ 8.69	$ (4.58)	$ 6.15
Diluted (in usd per share)	$ (1.1)	$ 5.64	$ (4.58)	$ 5.45
Weighted average shares outstanding:
Basic (in shares)	2,011	1,779	1,974	1,763
Diluted (in shares)	2,011	2,149	1,974	1,924

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CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT - USD ($) shares in Thousands, $ in Thousands	Total	2021 Notes	Preferred Stock	Common Stock	Common Stock 2021 Notes	Treasury Stock	Additional Paid-In Capital	Additional Paid-In Capital 2021 Notes	Accumulated Deficit
Balance at the beginning (in shares) at Dec. 31, 2021			307	1,254		0
Balance at the beginning at Dec. 31, 2021	$ (8,572)		$ 1	$ 0		$ 0	$ 61,197		$ (69,770)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(19,376)								(19,376)
Stock-based compensation	1,924						1,924
Exercise of stock options (in shares)				6
Exercise of stock options	127						127
Conversion of stock (in shares)			(307)	307	207
Conversion of stock		$ 33,024	$ (1)	$ 0			1	$ 33,024
Merger and recapitalization, net of fees (in shares)				100
Merger and recapitalization, net of fees	27,997						27,997
Stockholder contribution for debt issuance costs	924						924
Escrow shares derivative liability (in shares)				81
Escrow shares derivative liability	(6,867)						(6,867)
Private warrants derivative liability	(3,916)						(3,916)
Forward share purchase agreement derivative liability (in shares)				193
Forward share purchase agreement derivative liability	(14,170)						(14,170)
Stockholder earnout rights derivative liability	(26,131)						(26,131)
Balance at the end (in shares) at Mar. 31, 2022			0	2,148		0
Balance at the end at Mar. 31, 2022	(15,036)		$ 0	$ 0		$ 0	74,110		(89,146)
Balance at the beginning (in shares) at Dec. 31, 2021			307	1,254		0
Balance at the beginning at Dec. 31, 2021	(8,572)		$ 1	$ 0		$ 0	61,197		(69,770)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	10,837
Balance at the end (in shares) at Sep. 30, 2022				2,152		(154)
Balance at the end at Sep. 30, 2022	(1,398)			$ 0		$ (31,663)	89,198		(58,933)
Balance at the beginning (in shares) at Mar. 31, 2022			0	2,148		0
Balance at the beginning at Mar. 31, 2022	(15,036)		$ 0	$ 0		$ 0	74,110		(89,146)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	14,759								14,759
Stock-based compensation	464						464
Exercise of stock options (in shares)				1
Exercise of stock options	30						30
Balance at the end (in shares) at Jun. 30, 2022				2,149		0
Balance at the end at Jun. 30, 2022	217			$ 0		$ 0	74,604		(74,387)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	15,454								15,454
Shares canceled				(1)
Stock-based compensation	771						771
Exercise of stock options	1						1
Settlement of forward share purchase agreement derivative liability	(17,841)						(17,841)
Purchase of treasury stock (in shares)						(154)
Purchase of treasury stock						$ 31,663	(31,663)
Issuance of Common Stock upon vesting of restricted stock units (in shares)				4
Balance at the end (in shares) at Sep. 30, 2022				2,152		(154)
Balance at the end at Sep. 30, 2022	(1,398)			$ 0		$ (31,663)	89,198		(58,933)
Balance at the beginning (in shares) at Dec. 31, 2022			0	2,164		(154)
Balance at the beginning at Dec. 31, 2022	(6,407)		$ 0	$ 0		$ (31,663)	89,956		(64,700)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(5,397)								(5,397)
Stock-based compensation	658						658
Issuance of Common Stock under ESPP (in shares)				14
Issuance of Common Stock under ESPP	120						120
Issuance of Common Stock upon vesting of restricted stock units (in shares)				14
Balance at the end (in shares) at Mar. 31, 2023			0	2,192		(154)
Balance at the end at Mar. 31, 2023	(11,026)		$ 0	$ 0		$ (31,663)	90,734		(70,097)
Balance at the beginning (in shares) at Dec. 31, 2022			0	2,164		(154)
Balance at the beginning at Dec. 31, 2022	(6,407)		$ 0	$ 0		$ (31,663)	89,956		(64,700)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(9,043)
Balance at the end (in shares) at Sep. 30, 2023				2,311		(154)
Balance at the end at Sep. 30, 2023	(13,047)					$ (31,663)	92,359		(73,743)
Balance at the beginning (in shares) at Mar. 31, 2023			0	2,192		(154)
Balance at the beginning at Mar. 31, 2023	(11,026)		$ 0	$ 0		$ (31,663)	90,734		(70,097)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(1,436)								(1,436)
Stock-based compensation	580						580
Issuance of Common Stock upon vesting of restricted stock units (in shares)				31
Balance at the end (in shares) at Jun. 30, 2023				2,223		(154)
Balance at the end at Jun. 30, 2023	(11,882)			$ 0		$ (31,663)	91,314		(71,533)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(2,210)								(2,210)
Stock-based compensation	997						997
Reverse stock split , Shares				34
Reverse stock split				$ 0			0
Issuance of Common Stock under ESPP (in shares)				6
Issuance of Common Stock under ESPP	48						48
Issuance of Common Stock upon vesting of restricted stock units (in shares)				48
Balance at the end (in shares) at Sep. 30, 2023				2,311		(154)
Balance at the end at Sep. 30, 2023	$ (13,047)					$ (31,663)	$ 92,359		$ (73,743)

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities
Net (loss) income	$ (9,043)	$ 10,837
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	697	276
Stock-based compensation expense	2,235	3,159
Bad debt expense, net of recoveries	2,350	1,023
Loss on disposition of assets	63	0
Noncash amortization of debt discount	409	369
Noncash interest expense associated with convertible debt	0	243
Noncash change in fair value of derivatives	(295)	(36,264)
Other	(1)	15
Changes in operating assets and liabilities:
Accounts receivable	(2,461)	(675)
Prepaid expenses and other current assets	(467)	(2,222)
Accounts payable	(16)	173
Accrued expenses and other current liabilities	(3,246)	(2,141)
Deferred revenue	137	77
Net cash used in operating activities	(9,638)	(25,130)
Cash flows from investing activities
Additions of property, equipment, and software	(1,042)	(2,194)
Proceeds from sale of property and equipment	27	0
Net cash used in investing activities	(1,015)	(2,194)
Cash flows from financing activities
Proceeds from exercise of stock options	0	158
Proceeds from convertible promissory notes	0	29,374
Proceeds from business combination placed in escrow and restricted	0	39,032
Trust proceeds received from recapitalization at closing	0	582
Issuance of common Stock under ESPP	168	0
Repurchase of common stock and settlement of forward purchase agreements	0	(31,303)
Transaction costs associated with recapitalization	0	(10,761)
Advances (repayments) of related party payables	1	(17)
Net cash provided by financing activities	169	27,065
Net decrease in cash, cash equivalents, and restricted cash	(10,484)	(259)
Cash, cash equivalents, and restricted cash, beginning of period	25,202	28,695
Cash, cash equivalents, and restricted cash, end of period	14,718	28,436
Supplemental disclosure of non-cash financing activities
Stockholder contribution for debt issuance costs	0	924
Repurchase of common stock in other accrued expenses	0	360
Conversion of promissory notes into common stock	0	33,024
Issuance of forward share purchase agreements	0	14,170
Issuance of private warrants	0	3,916
Issuance of sponsor shares subject to earn-out conditions	0	6,867
Issuance of stockholder earn-out rights	$ 0	$ 26,131

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Description of the Business and Merger

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of the Business and Merger

NOTE 1 — Description of the Business and Merger

Description of the Business

Leafly Holdings, Inc. (“Leafly” or “the Company”) is an online cannabis discovery marketplace and resource for cannabis consumers. Leafly provides an information resource platform with a deep library of content, including detailed information about cannabis strains, retailers and current events. Leafly was incorporated in the state of Delaware on June 20, 2019 and is headquartered in Seattle, Washington.

The Company has three wholly-owned subsidiaries, Leafly Canada Ltd., Leafly Deutschland GmbH and Leafly, LLC (“Legacy Leafly”). Legacy Leafly is the accounting predecessor of Leafly. The accompanying consolidated financial statements include the financial results of the Company and its wholly-owned subsidiaries.

Merger with Merida

On February 4, 2022, Leafly consummated the previously announced mergers and related transactions (collectively, the “Merger”) pursuant to the Agreement and Plan of Merger dated August 9, 2021 and amended on September 8, 2021 and on January 11, 2022 (as amended, the “Merger Agreement”). Legacy Leafly (formerly known as Leafly Holdings, Inc.) entered into the Merger Agreement with Merida Merger Corp. I (“Merida”), Merida Merger Sub, Inc., a Washington corporation (“Merger Sub I”) and Merida Merger Sub II, LLC, a Washington limited liability company (“Merger Sub II” and, together with Merger Sub I, the “Merger Subs”). Merger Sub I merged with and into Legacy Leafly, with Legacy Leafly surviving as a wholly-owned subsidiary of Merida, and following the initial Merger and as part of a single integrated transaction with the initial Merger, Legacy Leafly merged with and into Merger Sub II, with Merger Sub II surviving as a wholly-owned subsidiary of Merida. As a result of these Mergers, Legacy Leafly became a wholly owned subsidiary of Merida and was renamed Leafly, LLC, Merida was renamed Leafly Holdings, Inc. (“New Leafly”), and the securityholders of Legacy Leafly became security holders of New Leafly. We sometimes refer to the Mergers described above and the other transactions contemplated by the Merger Agreement and the other agreements being entered into by Merida and Legacy Leafly in connection with the Mergers as the “Business Combination” and to Merida following the Business Combination as “New Leafly.”

While the legal acquirer in the Business Combination is Merida, for financial accounting and reporting purposes under accounting principles generally accepted in the United States of America (“GAAP”), Legacy Leafly is the accounting acquirer with the Merger accounted for as a “reverse recapitalization.” A reverse recapitalization does not result in a new basis of accounting, and the financial statements of the combined entity represent the continuation of the financial statements of Legacy Leafly. Under this accounting method, Merida is treated as the “acquired” company and Legacy Leafly is the accounting acquirer, with the transaction treated as a recapitalization of Legacy Leafly. Merida’s assets, liabilities and results of operations were consolidated with Legacy Leafly’s beginning on the date of the Business Combination. Except for certain derivative liabilities, the assets and liabilities of Merida were recognized at historical cost (which is consistent with carrying value) and were not material, with no goodwill or other intangible assets recorded. The derivative liabilities, which are discussed in Notes 13 and 18, were recorded at fair value. The consolidated assets, liabilities, and results of operations of Legacy Leafly became the historical financial statements, and operations prior to the closing of the Business Combination presented for comparative purposes are those of Legacy Leafly. Pre-Merger shares of common stock and preferred stock were converted to shares of common stock of the combined company using the conversion ratio of 0.0164 and for comparative purposes, the shares and net loss per share of Legacy Leafly, prior to the Merger, have been retroactively restated using the conversion ratio.

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Basis of Presentation and Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies

NOTE 2 — Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The interim condensed consolidated financial statements have been prepared in accordance with GAAP and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting and should be read in conjunction with the Company's audited consolidated financial statements for the years ended December 31, 2022 and 2021, and Management’s Discussion and Analysis of Financial Condition and Results of Operations of Leafly for the year ended December 31, 2022, each of which was filed with the SEC on March 29, 2023 (the “2022 Financial Information”).

These condensed consolidated financial statements are unaudited and, in management's opinion, include all adjustments, consisting of normal recurring estimates and accruals necessary for a fair presentation of our consolidated cash flows, operating results, and balance sheets for the periods presented. Actual results may differ from these estimates and assumptions. The results of operations for any interim periods are not necessarily indicative of the results that may be expected for the entire fiscal year or any other interim period. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted in accordance with the rules and regulations of the SEC for interim reporting. All intercompany balances and transactions have been eliminated upon consolidation.

Going Concern Evaluation

Under the rules of ASC Subtopic 205-40 “Presentation of Financial Statements-Going Concern” (“ASC 205-40”), reporting companies are required to evaluate whether conditions and/or events raise substantial doubt about their ability to meet their future financial obligations as they become due within one year after the date that the financial statements are issued. This evaluation takes into account a company’s current available cash and projected cash needs over the one-year evaluation period but may not consider things beyond its control. Leafly has experienced revenue declines, incurred recurring operating losses, used cash from operations, and relied on the capital raised in the Business Combination to continue ongoing operations. These conditions, when considered in the aggregate, raise substantial doubt about Leafly’s ability to continue as a going concern within one year of the date these financial statements are issued. In response to these conditions, Leafly management took the following actions:

•During the fourth quarter of 2022, Leafly implemented a restructuring plan, including a reduction in force reflecting primarily one-time severance and other employee-related termination benefits incurred during the fourth quarter of 2022.

•During the three months ended March 31, 2023, Leafly announced a second restructuring plan further seeking to reduce recurring costs and operating expenditures and identifying cost savings based on a reduction in force reflecting primarily one-time severance and other employee-related termination benefits incurred during the first quarter of 2023.

The restructuring plans above have been implemented and are expected to continue contributing to the cash savings of the Company. The Company’s management is closely monitoring and reducing operating expenses where it is able to, while ensuring the trajectory and viability of the business remains intact. After considering all available evidence, Leafly’s management determined that, based on the cost reduction measures outlined in both actions above, Leafly’s current positive working capital will be sufficient to meet its capital requirements for a period of at least 12 months from the date that these September 30, 2023 financial statements are issued.

Reverse Stock Split

On September 12, 2023, the Company implemented a one-for-twenty reverse split of its common stock (Note 12). To facilitate comparative analysis, all statements in this Quarterly Report regarding numbers of shares of common stock and all references to prices of a share of common stock, if referencing events or circumstances occurring prior to September 12, 2023, have been retroactively restated to reflect the effect of the reverse stock split on a pro forma basis.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on the reported net (loss) income.

Seasonality

We may experience seasonality in our business, which we believe has moderate impacts on our overall revenue. In certain years, we've seen seasonal fluctuations that coincide with either federal holidays, generally in the fourth quarter, or industry holidays and events, generally in the spring. Our industry and business history is limited and therefore we cannot be certain that these are known trends or that other trends may develop.

Emerging Growth Company Status

Leafly is an emerging growth company (“EGC”), as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). Under the JOBS Act, EGCs can delay adopting new or revised accounting standards issued until such time as those standards apply to private companies. The Company has elected to use this extended transition period. In providing this relief, the JOBS Act does not preclude the Company from adopting a new or revised accounting standard earlier than the time that such standard applies to private companies. Leafly will continue to use this relief until the earlier of the date that it (a) is no longer an EGC or (b) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of revenue and expenses in the condensed consolidated financial statements and accompanying notes. On an ongoing basis, management evaluates its estimates. Such estimates include those related to the fair value of derivative liabilities; the allowance for doubtful accounts; the valuation allowance for deferred income tax assets; the fair value of the convertible promissory notes; the estimate of capitalized software costs and useful life of capitalized software; and the fair value of equity issuances. Management bases its estimates on historical experience, knowledge of current events and actions it may undertake in the future that management believes to be reasonable under the circumstances. Actual results may differ from these estimates and assumptions.

Significant Accounting Policies

The unaudited interim financial statements should be read in conjunction with the Company's 2022 Financial Information, which describes the Company's significant accounting policies. There have been no material changes to the Company's significant accounting policies during the nine months ended September 30, 2023 compared to our 2022 Annual Report.

Recent Accounting Pronouncements

Accounting Pronouncements Issued But Not Yet Adopted

Management does not believe that there are any recently issued, but not yet effective, accounting standards that, if currently adopted, would have a material effect on the Company’s consolidated financial statements or related disclosures.

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Cash, Cash Equivalents, and Restricted Cash

9 Months Ended

Sep. 30, 2023

Cash and Cash Equivalents [Abstract]

Cash, Cash Equivalents, and Restricted Cash

NOTE 3 — Cash, Cash Equivalents, and Restricted Cash

Cash, cash equivalents, and restricted cash consisted of the following:

	September 30, 2023		December 31, 2022
Cash and cash equivalents	$	14,469	$	24,594
Restricted cash		—		360
Restricted cash - long-term portion		249		248
	$	14,718	$	25,202

The restricted cash balance at December 31, 2022 included $360 of cash maintained in escrow related to Forward Share Purchase Agreements (“FPAs”). Effective August 1, 2022, the “FPA Holders” elected to have Leafly repurchase their remaining 154 shares covered by the FPAs for an aggregate repurchase price of $31,663. As a result, the shares repurchased have been removed from Leafly's outstanding shares effective as of the date of purchase and placed into treasury. The FPA Holders elected to have all but $360 disbursed from the escrow account and were able to claim the remainder any time until August 1, 2023. On July 11, 2023, Leafly returned $360 of restricted cash to the FPA Holders pursuant to the terms of the FPAs. Additional information regarding the FPAs is included in Notes 13 and 18.

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Prepaid Expenses and Other Assets

9 Months Ended

Sep. 30, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Prepaid Expenses and Other Assets

NOTE 4 — Prepaid Expenses and Other Assets

Prepaid expenses and other assets consist of the following:

	September 30, 2023		December 31, 2022
Prepaid subscriptions	$	703	$	916
Prepaid insurance		1,277		533
Other prepaid assets		186		272
Other current assets		173		71
Subtotal, current portion		2,339		1,792
Prepaid expenses, long-term portion		55		135
Total	$	2,394	$	1,927

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Accounts Receivable, Net

9 Months Ended

Sep. 30, 2023

Receivables [Abstract]

Accounts Receivable, Net

NOTE 5 — Accounts Receivable, Net

Accounts receivable, net of $3,409 and $3,298 as of September 30, 2023 and December 31, 2022, respectively, consisted of amounts due from customers less an allowance for doubtful accounts. For further information about revenue and deferred revenues, see Note 9.

The following table presents the allowance for doubtful accounts and the changes therein:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Balance, beginning of period	$	1,404		$	1,469		$	908		$	1,848
Add: provision for doubtful accounts, net of recoveries		940			383			2,350			1,023
Less: write-offs		(944	)		(894	)		(1,858	)		(1,913	)
Balance, end of period	$	1,400		$	958		$	1,400		$	958

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Property, Equipment and Software, Net

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

Property, Equipment, and Software, Net

NOTE 6 — Property, Equipment, and Software, Net

Property, equipment, and software consisted of the following:

	September 30, 2023			December 31, 2022
Furniture and equipment	$	454		$	740
Capitalized internal-use software		3,352			2,310
		3,806			3,050
Less: accumulated depreciation and amortization		(1,265	)		(765	)
	$	2,541		$	2,285

The Company recognized depreciation and amortization expense as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Depreciation expense	$	21	$	37	$	68	$	135
Amortization of capitalized internal-use software		255		90		629		141
Total depreciation and amortization	$	276	$	127	$	697	$	276

During the nine months ended September 30, 2023, the Company disposed of equipment with a book value of $90 for $27, resulting in a loss on disposal of $63. During the three months ended September 30, 2023, the Company disposed of equipment with a book value of $88 for $16, resulting in a loss on disposal of $72.

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Accrued Expenses and Other Current Liabilities

9 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

Accrued Expenses and Other Current Liabilities

NOTE 7 — Accrued Expenses and Other Current Liabilities

Accrued expenses consisted of the following:

	September 30, 2023		December 31, 2022
Accrued bonuses	$	922	$	1,309
Other employee-related liabilities		1,068		2,403
Accrued interest		400		1,000
Other accrued expenses 1		600		1,523
	$	2,990	$	6,235

1.There are no individual items within this balance that exceed 10% of the total of the table.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 8 — Commitments and Contingencies

In the normal course of business, the Company may receive inquiries or become involved in legal disputes regarding various litigation matters. In the opinion of management, any potential liabilities resulting from such claims would not have a material adverse effect on the Company’s consolidated financial statements.

Leases

The Company does not have any leases with an original term longer than 12 months as of September 30, 2023. The Company has short-term arrangements with immaterial rental obligations for office space.

Nasdaq Notifications of Noncompliance

On October 28, 2022, the Company received a letter from the staff (the “Staff”) of Nasdaq providing notification that the Company no longer complied with the $50 million in market value of listed securities standard for continued listing on the Nasdaq Global Market under Nasdaq Listing Rule 5450(b)(2)(A) and that the Company also did not comply with either of the two alternative standards of Listing Rule 5450(b), the equity standard and the total assets and total revenue standard. On April 19, 2023, Nasdaq approved the Company’s application to transfer the listing of its common stock and warrants from the Nasdaq Global Market to the Nasdaq Capital Market, effective April 21, 2023, on the basis that the Company complied with the net income standard for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(3). The transfer of the listing resolved the October 28, 2022 noncompliance notification.

On November 2, 2022, the Company received a letter from the Staff of the Nasdaq indicating that it did not meet the requirement to maintain a minimum bid price of $1 per share, which is imposed by Nasdaq Listing Rule 5450(a)(1) for continued listing on the Nasdaq Global Market and by Nasdaq Listing Rule 5550(a)(2) for continued listing on the Nasdaq Capital Market (the “Bid Price Requirement”) and that it had until May 1, 2023 to regain compliance. On May 2, 2023, as a result of the Company not regaining compliance with the Bid Price Requirement, the Company received a letter from Nasdaq notifying it that the Company’s common stock would be subject to delisting from Nasdaq unless the Company timely requested a hearing before a Nasdaq Hearings Panel (the “Panel”) and submitted a plan of compliance. The Company submitted a plan, and on May 23, 2023, the Panel approved it, giving the Company until October 30, 2023 to regain compliance with the Bid Price Requirement. On September 12, 2023, the Company implemented a one-for-twenty reverse split of its common stock (Note 12), and on September 29, 2023, the Company received formal notice from Nasdaq confirming that the Company regained compliance with the Bid Price Requirement, will continue to be listed and traded on the Nasdaq Capital Market and the listing matter was closed.

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Revenue and Contract Balances

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue and Contract Balances

NOTE 9 — Revenue and Contract Balances

The following table presents the Company's revenue by service type:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Advertising 1	$	10,386	$	11,731	$	32,126	$	34,914
Other services 1		197		50		381		337
	$	10,583	$	11,781	$	32,507	$	35,251

1.Amounts for the prior period have been reclassified to conform to the current period presentation.

The following table presents the Company's revenue by geographic region:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
United States 1	$	10,155	$	11,140	$	31,213	$	32,742
All other countries 1		428		641		1,294		2,509
	$	10,583	$	11,781	$	32,507	$	35,251

1.Amounts for the prior period have been reclassified to conform to the current period presentation.

The following table presents the Company's revenue by state:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Arizona		20	%		19	%		20	%		18	%
California		12	%		13	%		12	%		11	%
Oregon		11	%		10	%		11	%		10	%

No other state comprised 10% or more of Leafly’s revenue during the nine months ended September 30, 2023 and 2022. We have a diversified set of customers; no single customer accounted for 10% or more of our revenue for the nine months ended September 30, 2023 or 2022.

The following table presents the Company's revenue by timing of recognition:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Over Time 1
Retail 2	$	9,266	$	9,042	$	27,576	$	27,286
Brands 3		929		1,758		3,571		5,067
		10,195		10,800		31,147		32,353
Point in time 1
Brands 4		388		981		1,360		2,898
	$	10,583	$	11,781	$	32,507	$	35,251

1.Amounts for the prior period have been reclassified to conform to the current period presentation.

2.Revenues from subscription services and display ads.

3.Revenues from brand profile subscriptions and digital media (including display ads and audience extension).

4.Revenues from channel advertising (including direct to consumer email).

Revenues recognized over time are associated with software subscriptions, display ads and audience extension. Revenues recognized at a point in time are associated with branded content and channel advertising. There are no material variations in delivery and revenue recognition periods within the over time category.

Contract liabilities consist of deferred revenue, which is recorded on the Consolidated Balance Sheets when the Company has received consideration, or has the right to receive consideration, in advance of transferring the performance obligations under the contract to the customer.

The following table presents the Company's deferred revenue balances and changes therein:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Balance, beginning of period	$	2,017		$	2,467		$	1,958		$	1,975
Add: net increase in current period contract liabilities		1,991			1,630			2,083			1,976
Less: revenue recognized from beginning balance		(1,913	)		(2,045	)		(1,946	)		(1,899	)
Balance, end of period	$	2,095		$	2,052		$	2,095		$	2,052

A majority of the deferred revenue balance as of September 30, 2023 is expected to be recognized in the subsequent 12-month period. No other contract assets or liabilities are recorded on the Company’s Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022.

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Income Taxes

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 10 — Income Taxes

The Company’s effective tax rate was 0% for the three and nine months ended September 30, 2023 and 2022. The effective tax rate was lower than the U.S. federal statutory rate of 21% due to the Company’s full valuation allowance recorded against its deferred tax assets.
 

The Company had net operating loss carryforwards (“NOLs”) for federal, state and foreign income tax purposes of approximately $85,430, $60,478 and $5,801, respectively, as of December 31, 2022. The Company's state NOL will begin to expire in 2039, and all of the Company's federal NOLs will last indefinitely.

The Internal Revenue Code of 1986, as amended (the “Code”), imposes restrictions on the utilization of NOLs in the event of an “ownership change” of a corporation. Accordingly, a company’s ability to use NOLs may be limited as prescribed under Code Section 382 (“IRC Section 382”). Events which may cause limitations in the amount of the NOLs that the Company may use in any one year include, but are not limited to, a cumulative ownership change of more than 50% over a three-year period. Utilization of the federal and state NOLs may be subject to substantial annual limitation due to the ownership change limitations under IRC Section 382 and similar state provisions.

ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2023 and December 31, 2022. The Company is currently not aware of any issues under review that could result in significant payments, accruals, or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. Management believes all the income tax returns filed since inception remain open to examination by the major domestic and foreign taxing jurisdictions to which the Company is subject due to NOLs.

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Convertible Promissory Notes

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Convertible Promissory Notes

NOTE 11 — Convertible Promissory Notes

2022 Notes

Merida entered into a $30,000 convertible note purchase agreement (the “Note Purchase Agreement”) in January 2022, which Legacy Leafly subsequently guaranteed and joined as a party to the agreement on February 4, 2022 in connection with the Business Combination (the “2022 Notes”). Accordingly, post-Business Combination, the 2022 Notes are presented as a liability on Leafly's balance sheet, net of debt issuance costs and debt discount. The Company recognized debt issuance costs of $714 paid in cash, and a debt discount of $924 paid in shares transferred by Merida Holdings, LLC (the “Sponsor”) to the holders of the 2022 Notes upon issuance. The 2022 Notes bear interest at 8% annually, paid in cash semi-annually in arrears on July 31 and January 31 of each year, and mature on January 31, 2025.

The 2022 Notes are unsecured convertible senior notes due 2025. They are convertible at the option of the holders at any time before maturity at an initial conversion share price of $250.00 per $1,000 principal amount of 2022 Notes and per $1,000 of accrued but unpaid interest on any converted 2022 Notes. In addition, the Company may, at its election, force the conversion of the 2022 Notes on or after January 31, 2024, if the volume-weighted average trading price of the Company’s common stock exceeds $360.00 for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days. The Company also has the option, on or after January 31, 2023 and prior to the 40th trading day immediately before the maturity date and subject to the holders’ ability to optionally convert, to redeem all or a portion of the 2022 Notes at a cash redemption price equal to 100% of the principal amount of the 2022 Notes, plus accrued and unpaid interest, if any. The holders of the 2022 Notes have the right to cause the Company to repurchase for cash all or a portion of the 2022 Notes held by such holder upon the occurrence of a “fundamental change” (as defined in the Note Purchase Agreement) or in connection with certain asset sales, in each case at a price equal to 100% of par plus accrued and unpaid interest, if any.

As of September 30, 2023, the net carrying amount of the 2022 Notes was $29,272, which includes unamortized issuance costs and debt discount of $728, which will be amortized over the remaining term. The estimated fair value of the convertible debt instruments was approximately $27,000 as of September 30, 2023. The fair value of the 2022 Notes was measured using the Bloomberg OVCV model and CNVI model which modifies the underlying OVCV program. These models incorporate inputs for volatility, Leafly’s stock price, time to maturity, the risk-free rate and Leafly’s credit spread, some of which are considered Level 3 inputs in the fair value hierarchy.

2021 Notes

Legacy Leafly issued a series of convertible promissory notes in June 2021 totaling approximately $23,970. In August 2021, Legacy Leafly issued additional convertible promissory notes totaling $7,500 to Merida Capital, an affiliate of Merida. (Both note issuances are collectively referred to below as the “2021 Notes”).

The 2021 Notes bore interest at 8% annually and were considered traditional convertible debt with the entire amount recognized as a liability (with no amount allocated to equity), reduced for direct issuance costs, with initial and subsequent recognition at amortized cost in accordance with the interest method. Unless converted, the entire balance of principal and accrued but unpaid interest was due on December 3, 2022. The 2021 Notes were contingently convertible upon the occurrence of certain events, to include a qualified financing, a non-qualified financing, or in a qualified public transaction.

On February 4, 2022, in connection with the Business Combination, the 2021 Notes were converted to approximately 206 shares of Leafly common stock at the conversion price of approximately $52.60, which was 80% of the implied price per share of common stock in the Business Combination. Upon closing of the Business Combination, the shares of common

stock then converted to shares of common stock of the combined company using the conversion ratio of 0.0164, which was used for conversion of all Leafly securities.

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Stockholders' Deficit

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Stockholders' Deficit

NOTE 12 — Stockholders’ Deficit

Common Stock

Reverse Stock Split

On July 12, 2023, during the Company’s 2023 Annual Meeting of Stockholders, Leafly’s stockholders approved a proposal for a reverse stock split (the “Reverse Stock Split”) as part of the Company’s plan to regain compliance with the Bid Price Requirement under Nasdaq listing rules (Note 8). Effective September 12, 2023, the Company effected a one-for-twenty (1-for-20) Reverse Stock Split of its common stock. As a result of the Reverse Stock Split:

•Every twenty (20) shares of common stock issued and outstanding were combined and converted into one (1) issued and outstanding share of common stock.

oThe Reverse Stock Split did not change the authorized number of shares or the par value of the common stock, nor modify any voting rights of the common stock, which continues to trade on the Nasdaq Capital Market under its existing symbol “LFLY” on a split-adjusted basis.

oAll shares of common stock that were held by a stockholder were aggregated and converted at the 1-for-20 reverse split ratio subsequent to the Reverse Stock Split, and each fractional share held by a stockholder resulting from such aggregation and conversion was rounded up to the next whole share.

oLeafly issued 34 shares in connection with the above criteria. No fractional shares were issued in connection with the Reverse Stock Split.

•The Company’s public warrants continue to trade on the Nasdaq Capital Market under the existing symbol “LFLYW.”

oAll outstanding warrants have been adjusted in accordance with their terms, resulting in the number of shares issuable upon exercise of a warrant holder’s aggregate number of warrants, after adjustment, being rounded up to the nearest whole share and proportionate adjustments were made to the exercise price;

•All outstanding convertible notes have been adjusted such that the conversion rate and the conversion price have been made proportionate with the 1-for-20 reverse split ratio in accordance with their terms.

•Based on the 1-for-20 reverse split ratio, the number of shares of common stock issuable under the Company’s outstanding equity awards decreased proportionately, with any fractional shares rounded down to the nearest whole share, with a corresponding adjustment made to the exercise prices of outstanding option awards, rounded up to the nearest whole cent.

oIn addition, the number of shares of common stock available for issuance under the Company’s equity incentive plans were proportionately adjusted based on the 1-for-20 reverse split ratio, such that fewer shares are available for issuance under our equity incentive plans.

To facilitate comparative analysis, all statements in this Quarterly Report regarding numbers of shares of common stock and all references to prices of a share of common stock, if referencing events or circumstances occurring prior to September 12, 2023, have been retroactively restated to reflect the effect of the Reverse Stock Split on a pro forma basis.

Business Combination

The Consolidated Statements of Changes in Stockholders' Deficit reflect the reverse recapitalization on February 4, 2022, as discussed in Note 1. Since Legacy Leafly was determined to be the accounting acquirer in the Business Combination, all periods presented prior to consummation of the Business Combination reflect the historical activity and balances of Legacy

Leafly (other than common and preferred stock and potentially issuable shares underlying stock options and convertible promissory notes, which have been retroactively restated).

On February 4, 2022, the Business Combination was consummated pursuant to the Merger Agreement. Prior to the Business Combination, Legacy Leafly's capital stock consisted of Series A preferred stock and common stock. Upon the consummation of the Business Combination, all issued and outstanding shares of Series A preferred stock converted to shares of nonredeemable common stock. In connection with the settlement of the FPAs (Note 13), approximately 1 shares of the Company’s common stock held by the Sponsor were canceled, according to an agreement between the Company and the Sponsor entered into upon execution of the FPAs.

As of September 30, 2023, Leafly's authorized capital stock consisted of:

•200,000 shares of Leafly common stock, $0.0001 par value per share; and

•5,000 shares of Leafly preferred stock, $0.0001 par value per share.

Sponsor Shares Subject to Earn-Out Conditions

In accordance with the Merger Agreement, upon closing of the Business Combination, 81 of the shares of the Company’s common stock held by the Sponsor were placed in escrow and subjected to earn-out conditions (“Escrow Shares”). Of these Escrow Shares, 50% will be released from escrow if and when the Company's common stock trades at or above $270.00 for 20 out of 30 consecutive trading days at any time during the two-year period following closing of the Business Combination, and the remaining 50% will be released from escrow if and when the Company's common stock trades at or above $310.00 for 20 out of 30 consecutive trading days at any time during the three-year period following closing of the Business Combination. In addition, all 81 Escrow Shares will be released upon a change in control.

We account for the Escrow Shares as derivative liabilities, remeasured to fair value on a recurring basis, with changes in fair value recorded to earnings. See Note 18 for additional information.

Treasury Stock

Effective August 1, 2022, the Company repurchased 154 shares of its common stock at a weighted-average price of $205.60 per share for a total of $31,663, with $31,303 paid with restricted cash held in escrow at the time and $360 remaining in accrued expenses and other current liabilities on our consolidated balance sheet at December 31, 2022. These repurchases were in settlement of the FPAs. See Notes 3 and 13 for additional information.

Stockholder Earn-Out Rights

Leafly stockholders, as of immediately prior to the closing of the Business Combination, were granted upon closing of the Business Combination, contingent rights to receive up to 271 shares of common stock (the “Rights”) if the Company achieves certain earn-out conditions prior to the third anniversary of the Business Combination. We will account for the Rights as derivative liabilities, which we will remeasure to their current fair value as of the end of each reporting period, with changes in the fair value recorded to earnings. See Note 18 for additional information.

The Rights will be earned and shares of common stock will be issued as follows:

First Tranche

Up to 136 shares will be issued if and when:

•revenue for the year ended December 31, 2022 equaled or exceeded $65,000 (“first revenue target”, which was not met), or

•the date on which the volume-weighted average price of common stock for a period of at least 20 days out of 30 consecutive trading days ending on the trading day immediately prior to the date of determination is greater than or equal to $270.00 (“first target price”) during the two-year period beginning on the trading day after the closing date of the Merger (as adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combinations, exchanges of shares or other like changes or transactions with respect to shares of common stock occurring at or after the closing of the Business Combination) (the “first target period”), or

•a change of control occurs within the first target period at the first target price or higher, or

•a pro rata portion of 136 shares (50%) if the revenue during the first target period meets or exceeds 90% of the first revenue target.

Second Tranche

Up to 136 shares will be issued if and when:

•revenue for the year ending December 31, 2023 equals or exceeds $101,000 (“second revenue target”), or

•the date on which the volume-weighted average price of common stock for a period of at least 20 days out of 30 consecutive trading days ending on the trading day immediately prior to the date of determination is greater than or equal to $310.00 (“second target price”) during the three-year period beginning on the trading day after the closing date of the Business Combination (as adjusted for stock splits, reverse stock splits, stock dividends, reorganizations, recapitalizations, reclassifications, combinations, exchanges of shares or other like changes or transactions with respect to shares of common stock occurring at or after the closing of the Business Combination) (the “second target period”), or

•a change of control occurs within the second target period at the second target price or higher, or

•a pro rata portion of 136 (50%) if the revenue during the second target period meets or exceeds 90% of the second revenue target.

If the second revenue target or second target price is met in full, the respective first revenue target or first target price, as applicable, will be deemed to have been met as well if it had not been met during the first target period.

Preferred Stock

The Board is authorized, subject to limitations prescribed by the law of the State of Delaware, to issue Leafly preferred stock from time to time in one or more series. The Board is authorized to establish the number of shares to be included in each such series and to fix the voting rights, if any, designations, powers, preferences and relative, participating, optional, special and other rights, if any, and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. The Board is able, without stockholder approval, to issue Leafly preferred stock with voting and other rights that could adversely affect the voting power and other rights of the holders of the Leafly common stock and could have anti-takeover effects. The ability of the Board to issue Leafly preferred stock without stockholder approval could have the effect of delaying, deferring or preventing a change of control of Leafly or the removal of existing management. Leafly did not have any issued and outstanding shares of preferred stock as of September 30, 2023 or December 31, 2022.

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Warrants and Forward Purchase Share Agreements

9 Months Ended

Sep. 30, 2023

Other Liabilities Disclosure [Abstract]

Warrants and Forward Purchase Share Agreements

NOTE 13 — Warrants and Forward Share Purchase Agreements

Public Warrants

At each of September 30, 2023 and December 31, 2022, there were 6,501 warrants outstanding to purchase an aggregate of 325 shares of common stock that had been included in the units issued in Merida’s initial public offering (the “Public Warrants”). Each Public Warrant entitles the holder to purchase 0.05 shares of common stock at an exercise price of $230.00 per whole share. Public Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Public Warrants. The Public Warrants became exercisable 30 days after the closing of the Business Combination. The Public Warrants may not be exercisable for cash unless the Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the Public Warrants and a current prospectus relating to such shares of common stock.

Notwithstanding the foregoing, during any period when the Company shall have failed to maintain an effective registration statement, warrant holders may exercise their Public Warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their Public Warrants on a cashless basis. The Public Warrants will expire five years after the closing of the Business Combination or earlier upon redemption or liquidation.

The Company may redeem the Public Warrants:

•in whole and not in part;

•at a price of $0.20 per warrant;

•upon not less than 30 days’ prior written notice of redemption;

•if, and only if, the reported last sale price of the Company’s common stock equals or exceeds $360.00 per share for any 20 trading days within a 30-trading day period commencing after the warrants became exercisable and ending on the third business day prior to the notice of redemption to the warrant holders; and

•if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying the warrants.

If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.

Private Warrants

At each of September 30, 2023 and December 31, 2022, there were 3,950 warrants outstanding to purchase an aggregate of 198 shares of common stock that Merida had sold to the Sponsor and EarlyBirdCapital in a private placement that took place simultaneously with Merida’s initial public offering (the “Private Warrants”). The Private Warrants are identical to the Public Warrants, except that the Private Warrants and the shares of common stock issuable upon the exercise of the Private Warrants were not transferable, assignable or salable until after the closing of the Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants are redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. The exercise price and number of shares of common stock issuable upon exercise of the Private Warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the Private Warrants will not be adjusted for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Private Warrants.

We account for the Private Warrants as derivative liabilities, remeasured to fair value on a recurring basis, with changes in the fair value recorded to earnings. See Note 18 for additional information.

Forward Share Purchase Agreements

In December 2021 and January 2022, the Company entered into four separate FPAs with the FPA Holders. The FPAs allowed the FPA Holders to sell and transfer common stock held by such holders, not to exceed a total of 200 shares in aggregate, to the Company in exchange for cash. The price to be paid by the Company was initially $203.20 per share for up to 130 shares and $200.20 per share for up to 70 shares. As required by the FPAs, $39,032 of cash was placed into escrow upon closing of the Business Combination, to be used for the share purchases. If the FPAs were not exercised by the FPA Holders within their terms of three months post-Business Combination closing, the associated funds were to be released from escrow to the Company. We account for the FPAs as derivative liabilities, remeasured to fair value on a recurring basis, with changes in the fair value recorded to earnings.

On May 3, 2022, Leafly and the FPA Holders entered into amendments to the FPAs (the “Amended FPAs”). The Amended FPAs modified the price at which the applicable FPA Holder has the right, but not the obligation, to have Leafly repurchase certain shares held by the applicable FPA Holder as of the closing of the Business Combination and not later sold into the market at a price of $203.20 per share (with respect to 34 of the shares subject to the Amended FPAs) and $206.20 per share (with respect to 120 of the shares subject to the Amended FPAs). The Amended FPAs also modified the date by which such FPA Holders could elect to have Leafly repurchase their shares to August 1, 2022. In connection with the Amended FPAs, certain amendments were also made to the escrow agreements in respect of the escrow accounts.

During the year ended December 31, 2022, a total of $8,089 was released from the escrow accounts due to certain FPA Holders selling shares in the open market, which was accordingly reclassified on the Company's balance sheet from restricted cash to cash.

Effective August 1, 2022, the FPA Holders elected to have Leafly repurchase their remaining 154 shares covered by the FPAs for an aggregate repurchase price of $31,663. As a result, the shares repurchased have been removed from Leafly's outstanding shares effective as of the date of purchase, and placed into treasury. The FPA Holders elected to have all but $360 disbursed from the escrow account and were able to claim the remainder any time until August 1, 2023. On July 11, 2023, Leafly returned $360 of restricted cash to the FPA Holders pursuant to the terms of the FPAs (Note 3). Also, in connection with the settlement, approximately 1 shares of the Company’s common stock held by the Sponsor were canceled, according to an agreement between the Company and the Sponsor entered into upon execution of the FPAs.

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Equity Incentive and Other Plans

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Equity Incentive and Other Plans

NOTE 14 — Equity Incentive and Other Plans

The Company currently has four equity plans: the New Leafly 2021 Equity Incentive Plan (the “2021 Plan”), the Legacy Leafly 2018 Equity Incentive Plan (the “2018 Plan”), the New Leafy Earn-Out Plan (the “Earn-Out Plan”), and the New Leafly 2021 Employee Stock Purchase Plan (the “ESPP”). Activity under the 2021 Plan and the ESPP are detailed below. There were no options or other equity awards granted under the 2018 Plan or the Earn-Out Plan during the nine months ended September 30, 2023.

Stock-Based Compensation

2021 Plan

The 2021 Plan became effective immediately upon closing of the Business Combination. Pursuant to the 2021 Plan, 225 shares of common stock were initially reserved for issuance. During the term of the 2021 Plan, the number of shares of common stock thereunder automatically increases on each January 1, commencing on January 1, 2023, and ending on (and including) January 1, 2031, by the lesser of (i) 10% of the fully diluted shares of common stock as of the last day of the preceding fiscal year and (ii) 225 shares (adjusted pursuant to the terms of the 2021 Plan). Effective January 1, 2023, 221 shares of common stock were available for issuance under the 2021 Plan and 49 remained available at September 30, 2023.

2022 Awards

In August 2022 and October 2022, the Company granted stock options to purchase an aggregate of approximately 5 shares of common stock at a weighted-average exercise price of $39.60 per share and granted an aggregate of 128 restricted stock units (“RSUs”) and performance stock units (”PSUs”). Of the PSUs granted, 34 were market-based awards made to executives with a grant date fair value of $0.80 per share with vesting based on achievement of a $1.0 billion market cap by February 4, 2026, and 7 were performance awards made to executives with a grant date fair value of $16.20 per share with vesting based in part on achievement of a fiscal year 2022 adjusted EBITDA target, as defined in the award agreements, which was achieved. Prior to such grants, no grants had been made under the 2021 Plan. On March 13, 2023, the Company approved the vesting of 7 PSUs awarded in 2022, which vested based on the achievement of the Company’s 2022 adjusted EBITDA target, on March 13, 2023.

2023 Awards

The Company granted 32 annual incentive plan RSUs on March 14, 2023, which vested over four months.

On July 25, 2023, the Company granted: 126 service-based RSUs to employees, which are scheduled to vest over a two-year period from the initial vest date; 33 RSUs to non-employee Board members, which vested in full on August 20, 2023; and 24 PSUs to senior management, with vesting contingent upon the Company meeting certain fiscal year 2023 financial performance metrics, as specified in the award agreements.

Stock Options

The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing model. No options were granted under the 2021 Plan during the nine months ended September 30, 2023.

Stock option activity under the 2021 Plan for the nine months ended September 30, 2023 was as follows:

	Number of Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Outstanding at January 1, 2023		5	$	39.52	$	—	9.61
Forfeited or expired		—		32.08
Outstanding at March 31, 2023		5	$	39.55	$	—		9.38
Forfeited or expired		—		38.31
Outstanding at June 30, 2023		5	$	39.56	$	—		9.14
Forfeited or expired		—		16.26
Outstanding at September 30, 2023		5	$	39.58	$	—		8.88
Vested and exercisable		2	$	39.56	$	—		8.87

As of September 30, 2023, there was $68 of total unrecognized compensation cost related to stock options granted under the 2021 Plan. That cost is expected to be recognized over a weighted-average period of 2.61 years.

Restricted Stock Units and Performance Stock Units

RSU and PSU activity under the 2021 Plan for the nine months ended September 30, 2023 was as follows:

	Number of Shares			Weighted Average Grant Date Fair Value		Total Fair Value
Unvested at January 1, 2023		103		$	25.92
Granted		32			9.65	$	305
Vested		(18	)		18.79	$	188
Forfeited		(24	)		20.07
Unvested at March 31, 2023		93			17.81
Vested		(26	)		11.88	$	199
Forfeited		(17	)		18.61
Unvested at June 30, 2023		50			20.69
Granted		181			6.20	$	1,128
Vested		(48	)		7.52	$	323
Forfeited		(1	)		9.18
Unvested at September 30, 2023		182		$	9.77

As of September 30, 2023, there was $1,432 total unrecognized compensation cost related to unvested RSUs and $72 total unrecognized compensation cost related to performance and market-based PSUs granted under the 2021 Plan. The total cost is expected to be recognized over a weighted-average period of 1.94 years.

2018 Plan

The 2018 Plan became effective on April 17, 2018. The 2018 Plan terminated upon closing of the Business Combination in 2022, but then-outstanding options under the 2018 Plan remain outstanding pursuant to their terms, with adjustments to the number of shares and exercise prices to reflect the terms of the Business Combination.

The fair value of each stock option award to employees is estimated on the date of grant using the Black-Scholes option pricing model. There were no grants made in 2023 or 2022 under the 2018 Plan.

Stock option activity under the 2018 Plan for the periods presented was as follows:

	Number of Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Outstanding at January 1, 2023		172		$	32.06
Exercised		—			8.00
Forfeited or expired		(22	)		27.97
Outstanding at March 31, 2023		150			32.68
Forfeited or expired		(26	)		25.50
Outstanding at June 30, 2023		124			34.17
Forfeited or expired		(7	)		31.57
Outstanding at September 30, 2023 1		117		$	34.29	$	8		4.90
Vested and exercisable		53		$	26.91	$	8		5.98

1.Includes 64 and 53 awards accounted for as service-based and market-based options, respectively, that are vested, that the Company currently deems probable of vesting, or in the case of market-based options, that the Company is expensing so long as the respective service conditions are met. The market-based options will vest only if the price of the Company's common stock reaches a $1 billion market capitalization target for any 20 days during a 30-day period on or before February 4, 2026.

As of September 30, 2023, there was: (i) $363 of unrecognized compensation cost related to service-based 2018 Plan option awards, which is expected to be recognized over a remaining weighted-average service period of approximately 1.63 years; and (ii) $585 of unrecognized compensation cost related to market-based 2018 Plan option awards, which is expected to be recognized over a remaining weighted-average service period of approximately 0.57 years.

Stock-Based Compensation Expense

The following table presents the classification of stock-based compensation expense under the 2021 Plan, the 2018 Plan and the ESPP:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Sales and marketing	$	94	$	77	$	230	$	137
Product development		141		86		347		123
General and administrative		762		608		1,658		2,899
	$	997	$	771	$	2,235	$	3,159

2022 Option Modification

Concurrent with the closing of the Business Combination, the vesting provisions of certain stock options previously granted in 2021 under the 2018 Plan to our Chief Executive Officer to purchase 146 shares of common stock were modified, and a corresponding charge of $1,366 was recorded during the three months ended March 31, 2022 to general and administrative expenses and additional paid-in capital.

Employee Stock Purchase Plan

The ESPP became effective immediately upon closing of the Business Combination. Pursuant to the ESPP, 56 shares of common stock were initially reserved for issuance. During the term of the ESPP, the number of shares of common stock thereunder automatically increases on each January 1, commencing on January 1, 2023 and ending on (and including) January 1, 2031, by the lesser of (i) 2.5% of the fully diluted shares of common stock as of the last day of the preceding fiscal year and (ii) 56 shares (as adjusted pursuant to the terms of the ESPP). Effective January 1, 2023, 55 shares of common stock were available for issuance under the ESPP and 35 remained available at September 30, 2023. On March 15, 2023, eligible employees purchased 14 shares for a total purchase price of $120. On September 15, 2023, eligible employees purchased 6 shares for a total purchase price of $49. The Company's current offering period runs from September 16, 2023 through March 15, 2024. Stock-based compensation expense includes $11 and $78 related to the ESPP for the three and nine months ended September 30, 2023 and $12 for both the three and nine months ended September 30, 2022.

Earn-Out Plan

The Earn-Out Plan became effective immediately upon closing of the Business Combination. Pursuant to the Earn-Out Plan, approximately 29 shares of common stock have been reserved for issuance to employees and certain other eligible parties in the form of RSUs. These RSUs will vest if the Company achieves certain thresholds prior to the third anniversary of the closing of the Business Combination. No RSUs have been awarded under the Earn-Out Plan as of September 30, 2023.

Defined Contribution Plan

The Company recognized expense from matching contributions to the Company-sponsored defined contribution retirement (401k) plan as follows for the periods presented:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
401(k) matching contributions	$	134	$	225	$	520	$	684

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Related Party Transactions

9 Months Ended

Sep. 30, 2023

Related Party Transactions [Abstract]

Related Party Transactions

NOTE 15 — Related Party Transactions

In June 2021, Merida Capital, an affiliate of Merida, purchased a convertible promissory note totaling $1,000. The note was issued as part of the existing series of 2021 Notes (see Note 11) and was subject to the same interest rate, maturity, and conversion terms. This note converted to shares of Leafly common stock upon closing of the Business Combination in February 2022, along with the other 2021 Notes.

At December 31, 2022, the Company owed $10 to two members of its Board, which is included in accrued expenses and other current liabilities on Leafly's consolidated balance sheet and was repaid during the first quarter of 2023.

Effective September 1, 2023, the Company entered into a consulting agreement with Peter Lee, a member of the Company’s Board of Directors, at a rate of $30 per month for an initial term of two months, extendable for a second term of two months, for a total maximum term of four months. Under the agreement, Mr. Lee is providing the Company with certain consultancy services related to the Company’s business strategies.

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Net (Loss) Income Per Share

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Net (Loss) Income Per Share

NOTE 16 — Net (Loss) Income Per Share

Basic and diluted net (loss) income per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. Under the two-class method, basic net (loss) income per share attributable to common stockholders is computed by dividing the net (loss) income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Shares repurchased and held in treasury by the Company are removed from the weighted-average number of shares of common stock outstanding as of the date of repurchase.

The Company considers its preferred stock to be participating securities. As of September 30, 2023 and September 30, 2022, the Company had 81 outstanding shares of common stock that are in escrow and subject to earn-out conditions and thus forfeiture, which do not meet the criteria for participating securities (see Note 12 for additional information). Net (loss) income is attributed to common stockholders and participating securities based on their participation rights. Net loss is not attributed to the preferred stock as the holders of the preferred stock do not have a contractual obligation to share in any losses.

Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of non-participating shares of common stock that are subject to forfeiture, stock options, preferred stock, convertible notes, and other securities outstanding. Certain securities are antidilutive and as such, are excluded from the calculation of diluted earnings per share and disclosed separately. Because of the nature of the calculation, particular securities may be dilutive in some periods and anti-dilutive in other periods. The Class 1, 2, and 3 common shares presented below have been retroactively restated for all periods using the conversion ratio in connection with the Business Combination.

The following table presents the computation of basic and diluted net (loss) income per share attributable to common stockholders, as a group, for the periods presented:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Net (loss) income	$	(2,210	)	$	15,454		$	(9,043	)	$	10,837
Income impact of FPAs		—			(3,939	)		—			(346	)
Income impact of convertible promissory notes		—			600			—			—
Total undistributed (loss) income	$	(2,210	)	$	12,115		$	(9,043	)	$	10,491
Weighted average shares outstanding		2,011			1,779			1,974			1,763
Dilutive effect of FPAs		—			177			—			57
Dilutive effect of convertible promissory notes		—			124			—			—
Dilutive effect of stock-based awards		—			69			—			104
Common stock and common stock equivalents		2,011			2,149			1,974			1,924
Basic net (loss) income per share	$	(1.10	)	$	8.69		$	(4.58	)	$	6.15
Diluted net (loss) income per share	$	(1.10	)	$	5.64		$	(4.58	)	$	5.45

The following shares of common stock subject to certain instruments were excluded from the computation of diluted net income per share attributable to common stockholders for the periods presented as their effect would have been antidilutive (with figures recast using the conversion ratio for the Business Combination, as applicable):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Shares subject to warrants		523		523		523		523
Shares subject to convertible promissory notes		124		—		124		121
Shares subject to ESPP		13		14		11		14
Escrow Shares		81		81		81		81
Shares subject to outstanding common stock options, RSUs and PSUs		285		56		240		56
Shares subject to stockholder earn-out rights		271		271		271		271
		1,297		945		1,250		1,066

See Note 11 for additional information regarding convertible promissory notes, Note 12 for additional information regarding stockholder earn-out rights, preferred stock, and Escrow Shares, Note 13 for additional information regarding warrants, and Note 14 for additional information regarding stock options, RSUs and PSUs.

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Segment Reporting

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Segment Reporting

NOTE 17 — Segment Reporting

Segment revenue and gross profit were as follows during the periods presented:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenue:
Retail	$	9,266	$	9,042	$	27,576	$	27,286
Brands		1,317		2,739		4,931		7,965
Total revenue	$	10,583	$	11,781	$	32,507	$	35,251
Gross profit:
Retail	$	8,234	$	7,916	$	24,374	$	23,975
Brands		1,186		2,350		4,386		6,865
Total gross profit	$	9,420	$	10,266	$	28,760	$	30,840

Assets are not allocated to segments for internal reporting presentations, nor are depreciation and amortization.

Geographic Areas

The Company’s operations are primarily in the U.S. and to a lesser extent, in Canada. Refer to Note 9 for revenue classified by major geographic area.

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Fair Value Measurements

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

NOTE 18 — Fair Value Measurements

The Company follows the guidance in ASC 820, “Fair Value Measurement,” for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).

The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

Level 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.

The Company’s financial instruments include cash equivalents, restricted cash, accounts receivable from customers, accounts payable and accrued liabilities, all of which are typically short-term in nature. The Company believes that the carrying amounts of these financial instruments reasonably approximate their fair values due to their short-term nature.

The following table presents information about the Company’s derivative liabilities that are measured at fair value on a recurring basis beginning February 4, 2022 (the date of closing of the Business Combination) when the derivative liabilities were assumed, and discloses the fair value hierarchy level of the valuation inputs the Company utilized to determine such fair value:

			Fair Value at										Change in Fair Value of Derivatives
Description	Level		September 30, 2023		June 30, 2023		December 31, 2022		September 30, 2022		June 30, 2022		Three Months Ended September 30, 2023		Three Months Ended September 30, 2022		Nine Months Ended September 30, 2023		Nine Months Ended September 30, 2022
Private Warrants derivative liability		3	$	113	$	121	$	182	$	662	$	3,693	$	8	$	3,031	$	69	$	3,254
Forward share purchase agreements derivative liability 1		3		—		—		—		—		17,763		—		3,940		—		346
Escrow Shares derivative liability		3		5		6		52		47		3,481		1		3,434		47		6,821
Stockholder earn-out rights derivative liability		3		25		30		204		288		12,147		5		11,859		179		25,843
Total			$	143	$	157	$	438	$	997	$	37,084	$	14	$	22,264	$	295	$	36,264

1.The forward share purchase agreements were settled effective August 1, 2022, at which time the fair value was $13,824 based on cash settlement.

Assumptions used to determine the fair values are presented in the following sections:

Private Warrants Derivative Liability

The Private Warrants were valued using a Black-Scholes model and the following Level 3 inputs:

	September 30, 2023			June 30, 2023			December 31, 2022			September 30, 2022			June 30, 2022
Exercise price	$	230.00		$	230.00		$	230.00		$	230.00		$	230.00
Stock price	$	6.42		$	5.80		$	13.00		$	13.60		$	90.00
Volatility		99.9	%		99.9	%		75.0	%		98.0	%		51.6	%
Term (in years)		3.35			3.60			4.09			4.34			4.59
Risk-free rate		4.7	%		4.5	%		4.1	%		4.1	%		3.0	%
Dividend yield		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%

The volatility input was calculated using a weighted average of historical volatilities from select benchmark companies and the volatility of the Public Warrants. The term input represents the maximum contractual term, though the Private Warrants may be exercised earlier. The interest rate input is the U.S. Treasury constant maturity rate for the instrument that most closely matches the term input.

Forward Share Purchase Agreements Derivative Liability

The FPAs were valued using a Black-Scholes model and the following Level 3 inputs:

	June 30, 2022
Exercise price - one agreement	$	206.20
Exercise price - three agreements	$	203.20
Stock price	$	90.00
Volatility		70.4	%
Term (in years)		0.09
Risk-free rate		1.3	%
Dividend yield		0.0	%

The volatility input was calculated using a weighted average of historical volatilities from select benchmark companies. The term input represents the maximum contractual term, though the shares underlying the FPAs were in some cases sold by the holders into the open market earlier (see Note 13). The interest rate input is the U.S. Treasury constant maturity rate for the instrument that most closely matches the term input.

Escrow Shares Derivative Liability

The Escrow Shares derivative liability was calculated using a Monte Carlo simulation and the following Level 3 inputs:

	September 30, 2023			June 30, 2023			December 31, 2022			September 30, 2022			June 30, 2022
First stock price trigger	$	270.00		$	270.00		$	270.00		$	270.00		$	270.00
Second stock price trigger	$	310.00		$	310.00		$	310.00		$	310.00		$	310.00
Stock price	$	6.42		$	5.80		$	13.00		$	13.60		$	90.00
Volatility		98.6	%		98.6	%		86.0	%		79.0	%		68.0	%
Term (in years)		1.35			1.60			2.09			2.34			2.59
Risk-free rate		5.4	%		5.1	%		4.4	%		4.2	%		3.0	%
Dividend yield		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%

The volatility input was calculated using a weighted average of historical volatilities from select benchmark companies. The term input represents the maximum contractual term, though the shares may be released from escrow earlier. The interest rate input is the U.S. Treasury constant maturity rate for the instrument that most closely matches the term input.

Stockholder Earn-Out Rights Derivative Liability

The stockholder earn-out rights were valued using a Monte Carlo simulation and the following Level 3 inputs:

	September 30, 2023			June 30, 2023			December 31, 2022			September 30, 2022			June 30, 2022
First stock price trigger	$	270.00		$	270.00		$	270.00		$	270.00		$	270.00
Second stock price trigger	$	310.00		$	310.00		$	310.00		$	310.00		$	310.00
First revenue trigger	$	65,000		$	65,000		$	65,000		$	65,000		$	65,000
Second revenue trigger	$	101,000		$	101,000		$	101,000		$	101,000		$	101,000
Stock price	$	6.42		$	5.80		$	13.00		$	13.60		$	90.00
Base year revenue assumption	$	42,000		$	44,000		$	48,000		$	47,500		$	49,500
Volatility		98.6	%		98.6	%		86.0	%		79.0	%		68.0	%
Term (in years)		1.35			1.60			2.09			2.34			2.59
Risk-free rate		5.4	%		5.1	%		4.4	%		4.2	%		3.0	%
Dividend yield		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%

The revenue assumption input relates to projected revenue for fiscal year 2022 (for the periods ended September 30, 2022 and June 30, 2022) and fiscal year 2023 (for the periods ended September 30, 2023 and June 30, 2023) and represents the midpoint of revenue guidance the Company provided in the respective periods. The volatility input was calculated using a

weighted average of historical volatilities from select benchmark companies. The term input represents the maximum contractual term, though the stockholder earn-out rights may vest earlier. The interest rate input is the U.S. Treasury constant maturity rate for the instrument that most closely matches the term input.

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Basis of Presentation and Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The interim condensed consolidated financial statements have been prepared in accordance with GAAP and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting and should be read in conjunction with the Company's audited consolidated financial statements for the years ended December 31, 2022 and 2021, and Management’s Discussion and Analysis of Financial Condition and Results of Operations of Leafly for the year ended December 31, 2022, each of which was filed with the SEC on March 29, 2023 (the “2022 Financial Information”).

These condensed consolidated financial statements are unaudited and, in management's opinion, include all adjustments, consisting of normal recurring estimates and accruals necessary for a fair presentation of our consolidated cash flows, operating results, and balance sheets for the periods presented. Actual results may differ from these estimates and assumptions. The results of operations for any interim periods are not necessarily indicative of the results that may be expected for the entire fiscal year or any other interim period. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted in accordance with the rules and regulations of the SEC for interim reporting. All intercompany balances and transactions have been eliminated upon consolidation.

Going Concern Evaluation

Under the rules of ASC Subtopic 205-40 “Presentation of Financial Statements-Going Concern” (“ASC 205-40”), reporting companies are required to evaluate whether conditions and/or events raise substantial doubt about their ability to meet their future financial obligations as they become due within one year after the date that the financial statements are issued. This evaluation takes into account a company’s current available cash and projected cash needs over the one-year evaluation period but may not consider things beyond its control. Leafly has experienced revenue declines, incurred recurring operating losses, used cash from operations, and relied on the capital raised in the Business Combination to continue ongoing operations. These conditions, when considered in the aggregate, raise substantial doubt about Leafly’s ability to continue as a going concern within one year of the date these financial statements are issued. In response to these conditions, Leafly management took the following actions:

•During the fourth quarter of 2022, Leafly implemented a restructuring plan, including a reduction in force reflecting primarily one-time severance and other employee-related termination benefits incurred during the fourth quarter of 2022.

•During the three months ended March 31, 2023, Leafly announced a second restructuring plan further seeking to reduce recurring costs and operating expenditures and identifying cost savings based on a reduction in force reflecting primarily one-time severance and other employee-related termination benefits incurred during the first quarter of 2023.

The restructuring plans above have been implemented and are expected to continue contributing to the cash savings of the Company. The Company’s management is closely monitoring and reducing operating expenses where it is able to, while ensuring the trajectory and viability of the business remains intact. After considering all available evidence, Leafly’s management determined that, based on the cost reduction measures outlined in both actions above, Leafly’s current positive working capital will be sufficient to meet its capital requirements for a period of at least 12 months from the date that these September 30, 2023 financial statements are issued.

Consolidation

All intercompany balances and transactions have been eliminated upon consolidation.

Reverse Stock Split

Reverse Stock Split

On September 12, 2023, the Company implemented a one-for-twenty reverse split of its common stock (Note 12). To facilitate comparative analysis, all statements in this Quarterly Report regarding numbers of shares of common stock and all references to prices of a share of common stock, if referencing events or circumstances occurring prior to September 12, 2023, have been retroactively restated to reflect the effect of the reverse stock split on a pro forma basis.

Reclassifications

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on the reported net (loss) income.

Seasonality

Seasonality

We may experience seasonality in our business, which we believe has moderate impacts on our overall revenue. In certain years, we've seen seasonal fluctuations that coincide with either federal holidays, generally in the fourth quarter, or industry holidays and events, generally in the spring. Our industry and business history is limited and therefore we cannot be certain that these are known trends or that other trends may develop.

Emerging Growth Company Status

Emerging Growth Company Status

Leafly is an emerging growth company (“EGC”), as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). Under the JOBS Act, EGCs can delay adopting new or revised accounting standards issued until such time as those standards apply to private companies. The Company has elected to use this extended transition period. In providing this relief, the JOBS Act does not preclude the Company from adopting a new or revised accounting standard earlier than the time that such standard applies to private companies. Leafly will continue to use this relief until the earlier of the date that it (a) is no longer an EGC or (b) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act.

Use of Estimates

These condensed consolidated financial statements are unaudited and, in management's opinion, include all adjustments, consisting of normal recurring estimates and accruals necessary for a fair presentation of our consolidated cash flows, operating results, and balance sheets for the periods presented. Actual results may differ from these estimates and assumptions.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of revenue and expenses in the condensed consolidated financial statements and accompanying notes. On an ongoing basis, management evaluates its estimates. Such estimates include those related to the fair value of derivative liabilities; the allowance for doubtful accounts; the valuation allowance for deferred income tax assets; the fair value of the convertible promissory notes; the estimate of capitalized software costs and useful life of capitalized software; and the fair value of equity issuances. Management bases its estimates on historical experience, knowledge of current events and actions it may undertake in the future that management believes to be reasonable under the circumstances. Actual results may differ from these estimates and assumptions.

Significant Accounting Policies

Significant Accounting Policies

The unaudited interim financial statements should be read in conjunction with the Company's 2022 Financial Information, which describes the Company's significant accounting policies. There have been no material changes to the Company's significant accounting policies during the nine months ended September 30, 2023 compared to our 2022 Annual Report.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Accounting Pronouncements Issued But Not Yet Adopted

Management does not believe that there are any recently issued, but not yet effective, accounting standards that, if currently adopted, would have a material effect on the Company’s consolidated financial statements or related disclosures.

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Cash, Cash Equivalents, and Restricted Cash (Tables)

9 Months Ended

Sep. 30, 2023

Cash and Cash Equivalents [Abstract]

Schedule of Cash and Cash Equivalents

Cash, cash equivalents, and restricted cash consisted of the following:

	September 30, 2023		December 31, 2022
Cash and cash equivalents	$	14,469	$	24,594
Restricted cash		—		360
Restricted cash - long-term portion		249		248
	$	14,718	$	25,202

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Prepaid Expenses and Other Assets (Tables)

9 Months Ended

Sep. 30, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Prepaid Expenses and Other Assets

Prepaid expenses and other assets consist of the following:

	September 30, 2023		December 31, 2022
Prepaid subscriptions	$	703	$	916
Prepaid insurance		1,277		533
Other prepaid assets		186		272
Other current assets		173		71
Subtotal, current portion		2,339		1,792
Prepaid expenses, long-term portion		55		135
Total	$	2,394	$	1,927

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Accounts Receivable, Net (Tables)

9 Months Ended

Sep. 30, 2023

Receivables [Abstract]

Schedule of Allowance for Doubtful Accounts

The following table presents the allowance for doubtful accounts and the changes therein:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Balance, beginning of period	$	1,404		$	1,469		$	908		$	1,848
Add: provision for doubtful accounts, net of recoveries		940			383			2,350			1,023
Less: write-offs		(944	)		(894	)		(1,858	)		(1,913	)
Balance, end of period	$	1,400		$	958		$	1,400		$	958

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Property, Equipment, and Software, Net (Tables)

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property, equipment, and software consisted of the following:

	September 30, 2023			December 31, 2022
Furniture and equipment	$	454		$	740
Capitalized internal-use software		3,352			2,310
		3,806			3,050
Less: accumulated depreciation and amortization		(1,265	)		(765	)
	$	2,541		$	2,285

Schedule Of Depreciation and Amortization Expense

The Company recognized depreciation and amortization expense as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Depreciation expense	$	21	$	37	$	68	$	135
Amortization of capitalized internal-use software		255		90		629		141
Total depreciation and amortization	$	276	$	127	$	697	$	276

During the nine months ended September 30, 2023, the Company disposed of equipment with a book value of $90 for $27, resulting in a loss on disposal of $63. During the three months ended September 30, 2023, the Company disposed of equipment with a book value of $88 for $16, resulting in a loss on disposal of $72.

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Accrued Expenses and Other Current Liabilities (Tables)

9 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

Schedule of Accrued Expenses and Other Current Liabilities

Accrued expenses consisted of the following:

	September 30, 2023		December 31, 2022
Accrued bonuses	$	922	$	1,309
Other employee-related liabilities		1,068		2,403
Accrued interest		400		1,000
Other accrued expenses 1		600		1,523
	$	2,990	$	6,235

1.There are no individual items within this balance that exceed 10% of the total of the table.

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Revenue and Contract Balances (Tables)

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

The following table presents the Company's revenue by service type:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Advertising 1	$	10,386	$	11,731	$	32,126	$	34,914
Other services 1		197		50		381		337
	$	10,583	$	11,781	$	32,507	$	35,251

1.Amounts for the prior period have been reclassified to conform to the current period presentation.

The following table presents the Company's revenue by geographic region:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
United States 1	$	10,155	$	11,140	$	31,213	$	32,742
All other countries 1		428		641		1,294		2,509
	$	10,583	$	11,781	$	32,507	$	35,251

1.Amounts for the prior period have been reclassified to conform to the current period presentation.

The following table presents the Company's revenue by state:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Arizona		20	%		19	%		20	%		18	%
California		12	%		13	%		12	%		11	%
Oregon		11	%		10	%		11	%		10	%

The following table presents the Company's revenue by timing of recognition:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Over Time 1
Retail 2	$	9,266	$	9,042	$	27,576	$	27,286
Brands 3		929		1,758		3,571		5,067
		10,195		10,800		31,147		32,353
Point in time 1
Brands 4		388		981		1,360		2,898
	$	10,583	$	11,781	$	32,507	$	35,251

1.Amounts for the prior period have been reclassified to conform to the current period presentation.

2.Revenues from subscription services and display ads.

3.Revenues from brand profile subscriptions and digital media (including display ads and audience extension).

4.Revenues from channel advertising (including direct to consumer email).

Schedule of Deferred Revenue

The following table presents the Company's deferred revenue balances and changes therein:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Balance, beginning of period	$	2,017		$	2,467		$	1,958		$	1,975
Add: net increase in current period contract liabilities		1,991			1,630			2,083			1,976
Less: revenue recognized from beginning balance		(1,913	)		(2,045	)		(1,946	)		(1,899	)
Balance, end of period	$	2,095		$	2,052		$	2,095		$	2,052

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Equity Incentive and Other Plans (Tables)

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Stock Option Activity

Stock option activity under the 2021 Plan for the nine months ended September 30, 2023 was as follows:

	Number of Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Outstanding at January 1, 2023		5	$	39.52	$	—	9.61
Forfeited or expired		—		32.08
Outstanding at March 31, 2023		5	$	39.55	$	—		9.38
Forfeited or expired		—		38.31
Outstanding at June 30, 2023		5	$	39.56	$	—		9.14
Forfeited or expired		—		16.26
Outstanding at September 30, 2023		5	$	39.58	$	—		8.88
Vested and exercisable		2	$	39.56	$	—		8.87

Stock option activity under the 2018 Plan for the periods presented was as follows:

	Number of Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term (in years)
Outstanding at January 1, 2023		172		$	32.06
Exercised		—			8.00
Forfeited or expired		(22	)		27.97
Outstanding at March 31, 2023		150			32.68
Forfeited or expired		(26	)		25.50
Outstanding at June 30, 2023		124			34.17
Forfeited or expired		(7	)		31.57
Outstanding at September 30, 2023 1		117		$	34.29	$	8		4.90
Vested and exercisable		53		$	26.91	$	8		5.98

1.Includes 64 and 53 awards accounted for as service-based and market-based options, respectively, that are vested, that the Company currently deems probable of vesting, or in the case of market-based options, that the Company is expensing so long as the respective service conditions are met. The market-based options will vest only if the price of the Company's common stock reaches a $1 billion market capitalization target for any 20 days during a 30-day period on or before February 4, 2026.

Schedule of Restricted Stock Unit Activity

RSU and PSU activity under the 2021 Plan for the nine months ended September 30, 2023 was as follows:

	Number of Shares			Weighted Average Grant Date Fair Value		Total Fair Value
Unvested at January 1, 2023		103		$	25.92
Granted		32			9.65	$	305
Vested		(18	)		18.79	$	188
Forfeited		(24	)		20.07
Unvested at March 31, 2023		93			17.81
Vested		(26	)		11.88	$	199
Forfeited		(17	)		18.61
Unvested at June 30, 2023		50			20.69
Granted		181			6.20	$	1,128
Vested		(48	)		7.52	$	323
Forfeited		(1	)		9.18
Unvested at September 30, 2023		182		$	9.77

Schedule of Stock-Based Compensation Expense

The following table presents the classification of stock-based compensation expense under the 2021 Plan, the 2018 Plan and the ESPP:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Sales and marketing	$	94	$	77	$	230	$	137
Product development		141		86		347		123
General and administrative		762		608		1,658		2,899
	$	997	$	771	$	2,235	$	3,159

Summary of Defined Contribution Retirement (401k) Plan

The Company recognized expense from matching contributions to the Company-sponsored defined contribution retirement (401k) plan as follows for the periods presented:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
401(k) matching contributions	$	134	$	225	$	520	$	684

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Net (Loss) Income Per Share (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Schedule of Computation Basic and Diluted Net (Loss) Income Per Share

The following table presents the computation of basic and diluted net (loss) income per share attributable to common stockholders, as a group, for the periods presented:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Net (loss) income	$	(2,210	)	$	15,454		$	(9,043	)	$	10,837
Income impact of FPAs		—			(3,939	)		—			(346	)
Income impact of convertible promissory notes		—			600			—			—
Total undistributed (loss) income	$	(2,210	)	$	12,115		$	(9,043	)	$	10,491
Weighted average shares outstanding		2,011			1,779			1,974			1,763
Dilutive effect of FPAs		—			177			—			57
Dilutive effect of convertible promissory notes		—			124			—			—
Dilutive effect of stock-based awards		—			69			—			104
Common stock and common stock equivalents		2,011			2,149			1,974			1,924
Basic net (loss) income per share	$	(1.10	)	$	8.69		$	(4.58	)	$	6.15
Diluted net (loss) income per share	$	(1.10	)	$	5.64		$	(4.58	)	$	5.45

Schedule of Antidilutive Shares

The following shares of common stock subject to certain instruments were excluded from the computation of diluted net income per share attributable to common stockholders for the periods presented as their effect would have been antidilutive (with figures recast using the conversion ratio for the Business Combination, as applicable):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Shares subject to warrants		523		523		523		523
Shares subject to convertible promissory notes		124		—		124		121
Shares subject to ESPP		13		14		11		14
Escrow Shares		81		81		81		81
Shares subject to outstanding common stock options, RSUs and PSUs		285		56		240		56
Shares subject to stockholder earn-out rights		271		271		271		271
		1,297		945		1,250		1,066

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Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Schedule of Segment Revenue and Gross Profit

Segment revenue and gross profit were as follows during the periods presented:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenue:
Retail	$	9,266	$	9,042	$	27,576	$	27,286
Brands		1,317		2,739		4,931		7,965
Total revenue	$	10,583	$	11,781	$	32,507	$	35,251
Gross profit:
Retail	$	8,234	$	7,916	$	24,374	$	23,975
Brands		1,186		2,350		4,386		6,865
Total gross profit	$	9,420	$	10,266	$	28,760	$	30,840

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents information about the Company’s derivative liabilities that are measured at fair value on a recurring basis beginning February 4, 2022 (the date of closing of the Business Combination) when the derivative liabilities were assumed, and discloses the fair value hierarchy level of the valuation inputs the Company utilized to determine such fair value:

			Fair Value at										Change in Fair Value of Derivatives
Description	Level		September 30, 2023		June 30, 2023		December 31, 2022		September 30, 2022		June 30, 2022		Three Months Ended September 30, 2023		Three Months Ended September 30, 2022		Nine Months Ended September 30, 2023		Nine Months Ended September 30, 2022
Private Warrants derivative liability		3	$	113	$	121	$	182	$	662	$	3,693	$	8	$	3,031	$	69	$	3,254
Forward share purchase agreements derivative liability 1		3		—		—		—		—		17,763		—		3,940		—		346
Escrow Shares derivative liability		3		5		6		52		47		3,481		1		3,434		47		6,821
Stockholder earn-out rights derivative liability		3		25		30		204		288		12,147		5		11,859		179		25,843
Total			$	143	$	157	$	438	$	997	$	37,084	$	14	$	22,264	$	295	$	36,264

1.The forward share purchase agreements were settled effective August 1, 2022, at which time the fair value was $13,824 based on cash settlement.

Schedule of Valuation Assumptions

The Private Warrants were valued using a Black-Scholes model and the following Level 3 inputs:

	September 30, 2023			June 30, 2023			December 31, 2022			September 30, 2022			June 30, 2022
Exercise price	$	230.00		$	230.00		$	230.00		$	230.00		$	230.00
Stock price	$	6.42		$	5.80		$	13.00		$	13.60		$	90.00
Volatility		99.9	%		99.9	%		75.0	%		98.0	%		51.6	%
Term (in years)		3.35			3.60			4.09			4.34			4.59
Risk-free rate		4.7	%		4.5	%		4.1	%		4.1	%		3.0	%
Dividend yield		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%

The FPAs were valued using a Black-Scholes model and the following Level 3 inputs:

	June 30, 2022
Exercise price - one agreement	$	206.20
Exercise price - three agreements	$	203.20
Stock price	$	90.00
Volatility		70.4	%
Term (in years)		0.09
Risk-free rate		1.3	%
Dividend yield		0.0	%

The Escrow Shares derivative liability was calculated using a Monte Carlo simulation and the following Level 3 inputs:

	September 30, 2023			June 30, 2023			December 31, 2022			September 30, 2022			June 30, 2022
First stock price trigger	$	270.00		$	270.00		$	270.00		$	270.00		$	270.00
Second stock price trigger	$	310.00		$	310.00		$	310.00		$	310.00		$	310.00
Stock price	$	6.42		$	5.80		$	13.00		$	13.60		$	90.00
Volatility		98.6	%		98.6	%		86.0	%		79.0	%		68.0	%
Term (in years)		1.35			1.60			2.09			2.34			2.59
Risk-free rate		5.4	%		5.1	%		4.4	%		4.2	%		3.0	%
Dividend yield		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%

The stockholder earn-out rights were valued using a Monte Carlo simulation and the following Level 3 inputs:

	September 30, 2023			June 30, 2023			December 31, 2022			September 30, 2022			June 30, 2022
First stock price trigger	$	270.00		$	270.00		$	270.00		$	270.00		$	270.00
Second stock price trigger	$	310.00		$	310.00		$	310.00		$	310.00		$	310.00
First revenue trigger	$	65,000		$	65,000		$	65,000		$	65,000		$	65,000
Second revenue trigger	$	101,000		$	101,000		$	101,000		$	101,000		$	101,000
Stock price	$	6.42		$	5.80		$	13.00		$	13.60		$	90.00
Base year revenue assumption	$	42,000		$	44,000		$	48,000		$	47,500		$	49,500
Volatility		98.6	%		98.6	%		86.0	%		79.0	%		68.0	%
Term (in years)		1.35			1.60			2.09			2.34			2.59
Risk-free rate		5.4	%		5.1	%		4.4	%		4.2	%		3.0	%
Dividend yield		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%

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Description of the Business and Merger - Significant Sources and Uses of Cash (Details)	Feb. 04, 2022
Convertible Senior Notes | 2021 Notes
Schedule Of Reverse Recapitalization [Line Items]
Conversion ratio	0.0164

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Cash, Cash Equivalents, and Restricted Cash - Schedule of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2021
Cash and Cash Equivalents [Abstract]
Cash and cash equivalents	$ 14,469	$ 24,594
Restricted cash	0	360
Restricted cash - long-term portion	249	248
Cash, cash equivalents, and restricted cash	$ 14,718	$ 25,202	$ 28,436	$ 28,695

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Cash, Cash Equivalents, and Restricted Cash - Narrative (Details) - USD ($) shares in Thousands, $ in Thousands	Aug. 01, 2022	Sep. 30, 2023	Jul. 11, 2023	Dec. 31, 2022	Feb. 04, 2022
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash		$ 0		$ 360
Common Stock
Restricted Cash and Cash Equivalents Items [Line Items]
Purchase of treasury stock (in shares)	154
Purchase of treasury stock	$ 31,663
Escrow deposit
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash			$ 360	$ 360	$ 39,032
Escrow deposit | Common Stock
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash	$ 360

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Prepaid Expenses and Other Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepaid subscriptions	$ 703	$ 916
Prepaid insurance	1,277	533
Other prepaid assets	186	272
Other current assets	173	71
Subtotal, current portion	2,339	1,792
Prepaid expenses, long-term portion	55	135
Total	$ 2,394	$ 1,927

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Accounts Receivable, Net - Narrative (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Receivables [Abstract]
Accounts receivable, net	$ 3,409	$ 3,298

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Accounts Receivable, Net - Schedule of Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Balance, beginning of period	$ 1,404	$ 1,469	$ 908	$ 1,848
Add: provision for doubtful accounts, net of recoveries	940	383	2,350	1,023
Less: write-offs	(944)	(894)	(1,858)	(1,913)
Balance, end of period	$ 1,400	$ 958	$ 1,400	$ 958

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Property, Equipment, and Software, Net - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 3,806	$ 3,050
Less: accumulated depreciation and amortization	(1,265)	(765)
Property, equipment, and software, net	2,541	2,285
Furniture and equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	454	740
Capitalized Internal Use Software
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 3,352	$ 2,310

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Property, Equipment, and Software, Net - Schedule Of Depreciation and Amortization Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Property, Plant and Equipment [Table]
Depreciation expense	$ 21	$ 37	$ 68	$ 135
Amortization of capitalized internal-use software	255	90	629	141
Total depreciation and amortization	$ 276	$ 127	$ 697	$ 276

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Property, Equipment, and Software, Net - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023	Sep. 30, 2022
Property, Plant and Equipment [Line Items]
Proceeds from sale of property and equipment		$ 27	$ 0
Loss on disposal of assets		(63)	$ 0
Equipment
Property, Plant and Equipment [Line Items]
Book value of assets disposed	$ 88	90
Proceeds from sale of property and equipment	16	27
Loss on disposal of assets	$ (72)	$ (63)

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Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands		Sep. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Accrued bonuses		$ 922	$ 1,309
Other employee-related liabilities		1,068	2,403
Accrued interest		400	1,000
Other accrued expenses	[1]	600	1,523
Accrued expenses and other current liabilities		$ 2,990	$ 6,235

[1] There are no individual items within this balance that exceed 10% of the total of the table

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Commitments and Contingencies (Details) - USD ($) $ / shares in Units, $ in Millions	Sep. 12, 2023	Oct. 28, 2022
Reverse stock split	1-for-20
Nasdaq
Securities, Market value		$ 50
Reverse stock split	one-for-twenty
Minimum closing bid price		$ 1

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Revenue and Contract Balances - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
Revenue	$ 10,583	$ 11,781	$ 32,507	$ 35,251
Retail
Disaggregation of Revenue [Line Items]
Revenue	9,266	9,042	27,576	27,286
Brands
Disaggregation of Revenue [Line Items]
Revenue	1,317	2,739	4,931	7,965
Over Time
Disaggregation of Revenue [Line Items]
Revenue	10,195	10,800	31,147	32,353
Over Time | Retail
Disaggregation of Revenue [Line Items]
Revenue	9,266	9,042	27,576	27,286
Over Time | Brands
Disaggregation of Revenue [Line Items]
Revenue	929	1,758	3,571	5,067
Point in time
Disaggregation of Revenue [Line Items]
Revenue	10,583	11,781	32,507	35,251
Point in time | Brands
Disaggregation of Revenue [Line Items]
Revenue	388	981	1,360	2,898
United States
Disaggregation of Revenue [Line Items]
Revenue	10,155	11,140	31,213	32,742
All other countries
Disaggregation of Revenue [Line Items]
Revenue	$ 428	$ 641	$ 1,294	$ 2,509
Arizona | Revenue | Geographic concentration risk
Disaggregation of Revenue [Line Items]
Concentration risk percentage	20.00%	19.00%	20.00%	18.00%
California | Revenue | Geographic concentration risk
Disaggregation of Revenue [Line Items]
Concentration risk percentage	12.00%	13.00%	12.00%	11.00%
Oregon | Revenue | Geographic concentration risk
Disaggregation of Revenue [Line Items]
Concentration risk percentage	11.00%	10.00%	11.00%	10.00%
Advertising
Disaggregation of Revenue [Line Items]
Revenue	$ 10,386	$ 11,731	$ 32,126	$ 34,914
Other services
Disaggregation of Revenue [Line Items]
Revenue	$ 197	$ 50	$ 381	$ 337

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Revenue and Contract Balances - Deferred Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Change in Contract with Customer, Liability [Roll Forward]
Balance, beginning of period	$ 2,017	$ 2,467	$ 1,958	$ 1,975
Add: net increase in current period contract liabilities	1,991	1,630	2,083	1,976
Less: revenue recognized from beginning balance	(1,913)	(2,045)	(1,946)	(1,899)
Balance, end of period	$ 2,095	$ 2,052	$ 2,095	$ 2,052

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Income Taxes - Narrative (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Operating Loss Carryforwards [Line Items]
Unrecognized tax benefits	$ 0		$ 0		$ 0
Unrecognized tax benefits, accrued interest and penalties	$ 0		$ 0		0
Effective tax rate	0.00%	0.00%	0.00%	0.00%
Cumulative ownership change	50.00%		50.00%
Federal
Operating Loss Carryforwards [Line Items]
Net operating loss carryforward					$ 85,430,000
State
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards expire year begins					2039
Net operating loss carryforward					$ 60,478,000
Foreign
Operating Loss Carryforwards [Line Items]
Net operating loss carryforward					$ 5,801,000

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Convertible Promissory Notes (Details) $ / shares in Units, shares in Thousands, $ in Thousands		1 Months Ended
	Feb. 04, 2022 $ / shares shares	Jan. 31, 2022 USD ($) Days $ / shares	Sep. 30, 2023 USD ($)	Aug. 31, 2021 USD ($)	Jun. 30, 2021 USD ($)
2022 Notes
Debt Instrument [Line Items]
Aggregate principal amount		$ 1,000
Convertible Senior Notes | 2022 Notes
Debt Instrument [Line Items]
Aggregate principal amount		30,000
Debt issuance costs		714
Debt discount		$ 924
Interest rate		8.00%
Debt conversion, converted instrument, amount		$ 1,000
Conversion share price (in usd per share) | $ / shares		$ 250.00
Stock price trigger (in usd per share) | $ / shares		$ 360.00
Threshold trading days | Days		20
Threshold consecutive trading days | Days		30
Redemption price percentage		100.00%
Repurchase price percentage		100.00%
Net carrying amount			$ 29,272
Unamortized issuance costs			728
Convertible Senior Notes | 2022 Notes | Level 3
Debt Instrument [Line Items]
Fair value			$ 27,000
Convertible Senior Notes | 2021 Notes
Debt Instrument [Line Items]
Aggregate principal amount				$ 7,500	$ 23,970
Interest rate				8.00%
Conversion share price (in usd per share) | $ / shares	$ 52.60
Conversion of stock (in shares) | shares	206
Percent of implied price per share	80.00%
Conversion ratio	0.0164

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Stockholders' Deficit (Details) $ / shares in Units, $ in Thousands				9 Months Ended
	Sep. 12, 2023 shares	Aug. 01, 2022 USD ($) $ / shares shares	Feb. 04, 2022 USD ($) Days $ / shares shares	Sep. 30, 2023 $ / shares shares	Dec. 31, 2022 $ / shares shares	Sep. 30, 2022 shares
Schedule Of Reverse Recapitalization [Line Items]
Reverse stock split	1-for-20
Common stock, authorized (in shares)				200,000,000	200,000,000
Common stock, par value (in usd per share) | $ / shares				$ 0.0001	$ 0.0001
Preferred stock, authorized (in shares)				5,000,000	5,000,000
Preferred stock, par value (in usd per share) | $ / shares				$ 0.0001	$ 0.0001
Preferred stock, issued (in shares)				0	0
Preferred stock, outstanding (in shares)				0	0
Common Stock
Schedule Of Reverse Recapitalization [Line Items]
Reverse stock split ratio	20
Conversion of Stock, Shares Issued	1
Shares canceled				1,000
Purchase of treasury stock (in shares)		154,000
Treasury stock (in usd per share) | $ / shares		$ 205.6
Purchase of treasury stock | $		$ 31,663
Common Stock | Payment using Restricted Cash
Schedule Of Reverse Recapitalization [Line Items]
Purchase of treasury stock | $		31,303
Common Stock | Remaining in Accrued Expenses and Other Current Liabilities
Schedule Of Reverse Recapitalization [Line Items]
Purchase of treasury stock | $		$ 360
Sponsor, escrow shares
Schedule Of Reverse Recapitalization [Line Items]
Earn-out shares (in shares)			81,000	81,000		81,000
Leafly stockholders
Schedule Of Reverse Recapitalization [Line Items]
Reverse stock split on common stock shares aggragated on fractional	34,000
Earn-out shares (in shares)			271,000
Leafly stockholders | Common Stock
Schedule Of Reverse Recapitalization [Line Items]
Reverse stock split ratio	20
Derivative instrument, period, one | Sponsor, escrow shares
Schedule Of Reverse Recapitalization [Line Items]
Earn-out shares, percentage of shares released from escrow			50.00%
Earn-out shares, earn-out period, stock price trigger (in usd per share) | $ / shares			$ 270
Earn-out shares, earn-out period			2 years
Earn-out shares, threshold trading days | Days			20
Earn-out shares, threshold consecutive trading days			30 days
Derivative instrument, period, one | Leafly stockholders
Schedule Of Reverse Recapitalization [Line Items]
Earn-out shares (in shares)			136,000
Earn-out shares, earn-out period, stock price trigger (in usd per share) | $ / shares			$ 270
Earn-out shares, earn-out period			2 years
Earn-out shares, revenue target | $			$ 65,000
Earn-out shares, threshold trading days | Days			20
Earn-out shares, threshold consecutive trading days			30 days
Earn-out shares, pro rate percentage of shares			50.00%
Earn-out shares, percentage of revenue target			90.00%
Derivative instrument, period, two | Sponsor, escrow shares
Schedule Of Reverse Recapitalization [Line Items]
Earn-out shares, percentage of shares released from escrow			50.00%
Earn-out shares, earn-out period, stock price trigger (in usd per share) | $ / shares			$ 310
Earn-out shares, earn-out period			3 years
Earn-out shares, threshold trading days | Days			20
Earn-out shares, threshold consecutive trading days			30 days
Derivative instrument, period, two | Leafly stockholders
Schedule Of Reverse Recapitalization [Line Items]
Earn-out shares (in shares)			136,000
Earn-out shares, earn-out period, stock price trigger (in usd per share) | $ / shares			$ 310
Earn-out shares, earn-out period			3 years
Earn-out shares, revenue target | $			$ 101,000
Earn-out shares, threshold trading days | Days			20
Earn-out shares, threshold consecutive trading days			30 days
Earn-out shares, pro rate percentage of shares			50.00%
Earn-out shares, percentage of revenue target			90.00%

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Warrants and Forward Purchase Share Agreements - Warrants (Details)	9 Months Ended
	Sep. 30, 2023 Days $ / shares shares	Dec. 31, 2022 shares
Public Warrants
Class of Warrant or Right [Line Items]
Warrants outstanding (in shares)	6,501,000	6,501,000
Warrants, exercise price (in usd per share) | $ / shares	$ 230
Warrants, exercisable, period from completion of business combination	30 days
Warrants expiration period	5 years
Redemption price of warrants (in usd per share) | $ / shares	$ 0.2
Redemption notice period	30 days
Redemption stock price trigger (in usd per share) | $ / shares	$ 360
Redemption stock price threshold trading days | Days	20
Redemption stock price threshold consecutive trading days	30 days
Warrants, number of shares converted into by each warrant	0.05
Purchase of common stock	325,000	325,000
Private Warrants
Class of Warrant or Right [Line Items]
Warrants outstanding (in shares)	3,950,000	3,950,000
Purchase of common stock	198,000	198,000

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Warrants and Forward Purchase Share Agreements - Forward Share Purchase Agreements (Details) $ / shares in Units, shares in Thousands, $ in Thousands		2 Months Ended	9 Months Ended	12 Months Ended
	Aug. 01, 2022 USD ($) shares	Jan. 31, 2022 Agreement $ / shares shares	Sep. 30, 2023 USD ($) $ / shares shares	Dec. 31, 2022 USD ($)	Jul. 11, 2023 USD ($)	May 03, 2022 $ / shares shares	Feb. 04, 2022 USD ($)
Derivative [Line Items]
Number of FPAs | Agreement		4
FPAs, number of shares (in shares) | shares		200
Restricted cash			$ 0	$ 360
FPAs, term		3 months
Release of restricted cash from escrow				8,089
Restricted cash			$ 0	360
Common Stock
Derivative [Line Items]
Purchase of treasury stock (in shares) | shares	154
Purchase of treasury stock	$ 31,663
Shares canceled (in shares) | shares			(1)
Escrow deposit
Derivative [Line Items]
Restricted cash				360	$ 360		$ 39,032
Restricted cash				$ 360	$ 360		$ 39,032
Escrow deposit | Common Stock
Derivative [Line Items]
Restricted cash	360
Restricted cash	360
Restricted cash	$ 360
Derivative instrument, period, one
Derivative [Line Items]
FPAs, number of shares (in shares) | shares		130				120
FPAs, exercise price (in usd per share) | $ / shares		$ 203.2				$ 206.2
Derivative instrument, period, two
Derivative [Line Items]
FPAs, number of shares (in shares) | shares			70			34
FPAs, exercise price (in usd per share) | $ / shares			$ 200.2			$ 203.2

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Equity Incentive and Other Plans - Narrative (Details) $ / shares in Units, $ in Thousands							3 Months Ended				9 Months Ended
	Sep. 30, 2023 USD ($) Plan shares		Jul. 25, 2023 shares	Mar. 14, 2023 shares	Mar. 13, 2023 shares	Feb. 04, 2022 USD ($) Days shares	Sep. 30, 2023 USD ($) Plan shares		Dec. 31, 2022 USD ($) $ / shares shares	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) Plan $ / shares shares		Sep. 30, 2022 USD ($)	Sep. 15, 2023 USD ($) shares	Jun. 30, 2023 shares	Mar. 31, 2023 shares	Mar. 15, 2023 USD ($) shares	Jan. 01, 2023 shares	Oct. 31, 2022 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of equity plans | Plan	4						4				4
Options granted (in shares)											0
Unrecognized compensation cost, recognition period	1 year 11 months 8 days
Options modified (in shares)						146,000
Options modified, expense | $											$ 1,366
Stock-based compensation expense | $							$ 997			$ 771	2,235		$ 3,159
Market-based awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost | $	$ 72						$ 72				$ 72
Employee Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for issuance (in shares)						56,000												55,000
Common stock reserved for issuance remaining (in shares)	35,000						35,000				35,000
Common stock reserved for issuance, annual increase percentage																		2.50%
Common stock reserved for issuance, annual increase (in shares)																		56,000
2023 Awards | Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity instruments other than options, grants in period (in shares)				32,000
Vesting Period				4 months
2023 Awards | Restricted stock units | Non-employee Board members
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity instruments other than options, grants in period (in shares)			33,000
Vesting date			Aug. 20, 2023
2023 Awards | Restricted stock units | Employee
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity instruments other than options, grants in period (in shares)			126,000
2023 Awards | Performance-based awards | Senior management
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity instruments other than options, grants in period (in shares)			24,000
2022 Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted (in shares)											5,000
Granted (in usd per share) | $ / shares											$ 39.6
2022 Awards | Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity instruments other than options, grants in period (in shares)											128,000
2022 Awards | Market-based awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost | $																			$ 34
Options granted, weighted average grant-date fair value (in usd per share) | $ / shares									$ 0.8
Market capitalization target | $									$ 1,000,000
2022 Awards | Performance-based awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity instruments other than options, grants in period (in shares)					7,000
Unrecognized compensation cost | $																			$ 7
Options granted, weighted average grant-date fair value (in usd per share) | $ / shares									$ 16.2
2021 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for issuance (in shares)						225,000
Common stock reserved for issuance, annual increase percentage																		10.00%
Common stock reserved for issuance, annual increase (in shares)																		225,000
Options outstanding (in shares)	5,000						5,000		5,000		5,000				5,000	5,000
2021 Plan | Stock option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted (in shares)											0
Common stock reserved for issuance (in shares)																		221,000
Common stock reserved for issuance remaining (in shares)	49,000						49,000				49,000
Total unrecognized compensation cost | $	$ 68						$ 68				$ 68
2021 Plan | Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation cost | $	$ 1,432						$ 1,432				$ 1,432
2021 Plan | Employee Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost, recognition period	2 years 7 months 9 days
2018 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding (in shares)	117,000	[1]					117,000	[1]	172,000		117,000	[1]			124,000	150,000
2018 Plan | Service-based awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation cost | $	$ 363						$ 363				$ 363
Unrecognized compensation cost, recognition period	1 year 7 months 17 days
Options outstanding (in shares)	64,000						64,000				64,000
2018 Plan | Market-based awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized compensation cost | $	$ 585						$ 585				$ 585
Unrecognized compensation cost, recognition period	6 months 25 days
Options outstanding (in shares)	53,000						53,000				53,000
Market capitalization target | $						$ 1,000,000
Market capitalization target, threshold days | Days						20
Market capitalization target, threshold consecutive days						30 days
Earn-Out Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for issuance (in shares)									29,000
Earn-Out Plan | Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity instruments other than options, grants in period (in shares)											0
ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares purchased														6,000			14,000
Total amount of shares purchased | $														$ 49			$ 120
Stock-based compensation expense | $							$ 11			$ 12	$ 78		$ 12

[1] Includes 64 and 53 awards accounted for as service-based and market-based options, respectively, that are vested, that the Company currently deems probable of vesting, or in the case of market-based options, that the Company is expensing so long as the respective service conditions are met. The market-based options will vest only if the price of the Company's common stock reaches a $1 billion market capitalization target for any 20 days during a 30-day period on or before February 4, 2026.

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Equity Incentive and Other Plans - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands							3 Months Ended
		Sep. 30, 2023		Dec. 31, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023		Jun. 30, 2023	Mar. 31, 2023
2021 Plan
Number of Shares
Outstanding (in shares)							5		5	5
Forfeited or expired (in shares)							0		0	0
Outstanding (in shares)		5		5			5		5	5
Vested and exercisable (in shares)		2					2
Weighted Average Exercise Price
Outstanding (in usd per share)							$ 39.56		$ 39.55	$ 39.52
Forfeited or expired (in usd per share)							16.26		38.31	32.08
Outstanding (in usd per share)		$ 39.58		$ 39.52			39.58		$ 39.56	$ 39.55
Vested and exercisable (in usd per share)		$ 39.56					$ 39.56
Aggregate Intrinsic Value
Outstanding		$ 0		$ 0			$ 0		$ 0	$ 0
Vested and exercisable		$ 0					$ 0
Weighted Average Remaining Contractual Term (in years)
Outstanding		8 years 10 months 17 days		9 years 7 months 9 days	9 years 1 month 20 days	9 years 4 months 17 days
Vested and exercisable		8 years 10 months 13 days
2018 Plan
Number of Shares
Outstanding (in shares)							124		150	172
Exercised (in shares)										0
Forfeited or expired (in shares)							(7)		(26)	(22)
Outstanding (in shares)		117	[1]	172			117	[1]	124	150
Vested and exercisable (in shares)		53					53
Weighted Average Exercise Price
Outstanding (in usd per share)							$ 34.17		$ 32.68	$ 32.06
Exercised (in usd per share)										8
Forfeited or expired (in usd per share)							31.57		25.5	27.97
Outstanding (in usd per share)		$ 34.29	[1]	$ 32.06			34.29	[1]	$ 34.17	$ 32.68
Vested and exercisable (in usd per share)		$ 26.91					$ 26.91
Aggregate Intrinsic Value
Outstanding	[1]	$ 8					$ 8
Vested and exercisable		$ 8					$ 8
Weighted Average Remaining Contractual Term (in years)
Outstanding	[1]	4 years 10 months 24 days
Vested and exercisable		5 years 11 months 23 days

[1] Includes 64 and 53 awards accounted for as service-based and market-based options, respectively, that are vested, that the Company currently deems probable of vesting, or in the case of market-based options, that the Company is expensing so long as the respective service conditions are met. The market-based options will vest only if the price of the Company's common stock reaches a $1 billion market capitalization target for any 20 days during a 30-day period on or before February 4, 2026.

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Equity Incentive and Other Plans - Restricted Stock Unit (Details) - 2021 Plan - Restricted Stock Units and Performance Stock Units - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2023
Number of Shares
Beginning balance (in shares)	50	93	103	103
Granted (in shares)	181		32
Vested (in shares)	(48)	(26)	(18)
Forfeited (in shares)	(1)	(17)	(24)
Ending balance (in shares)	182	50	93	182
Weighted Average Grant Date Fair Value
Beginning balance (in usd per share)	$ 20.69	$ 17.81	$ 25.92	$ 25.92
Granted (in usd per share)	6.2		9.65	$ 9.77
Vested (in usd per share)	7.52	11.88	18.79
Forfeited (in usd per share)	$ 9.18	18.61	20.07
Ending balance (in usd per share)		$ 20.69	$ 17.81
Granted, fair value	$ 1,128		$ 305
Vested, fair value	$ 323	$ 199	$ 188

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Equity Incentive and Other Plans - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 997	$ 771	$ 2,235	$ 3,159
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	94	77	230	137
Product development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	141	86	347	123
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 762	$ 608	$ 1,658	$ 2,899

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Equity Incentive and Other Plans - Summary of Defined Contribution Retirement (401k) Plan (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]
401(k) matching contributions	$ 134	$ 225	$ 520	$ 684

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Related Party Transactions (Details) - USD ($) $ in Thousands	Sep. 01, 2023	Dec. 31, 2022	Aug. 31, 2021	Jun. 30, 2021
Board Of Directors
Related Party Transaction [Line Items]
Administrative Fees Expense	$ 30
2021 Notes | Convertible Senior Notes
Related Party Transaction [Line Items]
Aggregate principal amount			$ 7,500	$ 23,970
Significant investor | 2021 Notes | Convertible Senior Notes
Related Party Transaction [Line Items]
Aggregate principal amount				$ 1,000
Related Party [Member] | Remaining in Accrued Expenses and Other Current Liabilities | Board Of Directors
Related Party Transaction [Line Items]
Other Liabilities		$ 10

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Net (Loss) Income Per Share - Narrative (Details) - shares	Sep. 30, 2023	Sep. 30, 2022	Feb. 04, 2022
Sponsor, escrow shares
Schedule Of Reverse Recapitalization [Line Items]
Earn-out shares (in shares)	81,000	81,000	81,000

XML

Net (Loss) Income Per Share - Computation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net (loss) income	$ (2,210)	$ (1,436)	$ (5,397)	$ 15,454	$ 14,759	$ (19,376)	$ (9,043)	$ 10,837
Income impact of FPAs	0			(3,939)			0	(346)
Income impact of convertible promissory notes	0			600			0	0
Total undistributed (loss) income	$ (2,210)			$ 12,115			$ (9,043)	$ 10,491
Weighted average shares outstanding (in shares)	2,011			1,779			1,974	1,763
Dilutive effect of FPAs (in shares)	0			177			0	57
Dilutive effect of convertible promissory notes	0			124			0	0
Dilutive effect of stock-based awards	0			69			0	104
Common stock and common stock equivalents (in shares)	2,011			2,149			1,974	1,924
Basic net (loss) income per share	$ (1.1)			$ 8.69			$ (4.58)	$ 6.15
Diluted net (loss) income per share	$ (1.1)			$ 5.64			$ (4.58)	$ 5.45

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Net (Loss) Income Per Share - Antidilutive Shares (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	1,297	945	1,250	1,066
Shares subject to warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	523	523	523	523
Shares subject to convertible promissory notes
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	124	0	124	121
Shares subject to ESPP
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	13	14	11	14
Escrow Shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	81	81	81	81
Shares subject to outstanding common stock options, RSUs and PSUs
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	285	56	240	56
Shares subject to stockholder earn-out rights
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive shares	271	271	271	271

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Segment Reporting (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Segment Reporting Information [Line Items]
Revenue	$ 10,583	$ 11,781	$ 32,507	$ 35,251
Gross profit	9,420	10,266	28,760	30,840
Retail
Segment Reporting Information [Line Items]
Revenue	9,266	9,042	27,576	27,286
Gross profit	8,234	7,916	24,374	23,975
Brands
Segment Reporting Information [Line Items]
Revenue	1,317	2,739	4,931	7,965
Gross profit	$ 1,186	$ 2,350	$ 4,386	$ 6,865

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Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Jun. 30, 2023	Dec. 31, 2022	Aug. 01, 2022	Jun. 30, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Gain (loss)		$ 14	$ 22,264	$ 295	$ 36,264
Derivative Liability, Statement of Financial Position [Extensible Enumeration]		Derivative liability		Derivative liability
Forward share purchase agreements derivative liability
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liability								$ 13,824
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liability		$ 143	997	$ 143	997	$ 157	$ 438		$ 37,084
Gain (loss)		14	22,264	295	36,264
Level 3 | Private warrants derivative liability
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liability		113	662	113	662	121	182		3,693
Gain (loss)		8	3,031	69	3,254
Level 3 | Forward share purchase agreements derivative liability
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liability	[1]	0	0	0	0	0	0		17,763
Gain (loss)	[1]	0	3,940	0	346
Level 3 | Escrow shares derivative liability
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liability		5	47	5	47	6	52		3,481
Gain (loss)		1	3,434	47	6,821
Level 3 | Stockholder earn-out rights derivative liability
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liability		25	288	25	288	$ 30	$ 204		$ 12,147
Gain (loss)		$ 5	$ 11,859	$ 179	$ 25,843

[1] The forward share purchase agreements were settled effective August 1, 2022, at which time the fair value was $13,824 based on cash settlement.

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Fair Value Measurements - Valuation Assumptions (Details)				9 Months Ended
	Jun. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)	Jun. 30, 2022 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)
Private warrants derivative liability | Exercise price
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	230	230	230	230	230
Private warrants derivative liability | Stock price
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	5.8	13	90	6.42	13.6
Private warrants derivative liability | Volatility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	0.999	0.75	0.516	0.999	0.98
Private warrants derivative liability | Term (in years)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative, term	3 years 7 months 6 days	4 years 1 month 2 days	4 years 7 months 2 days	3 years 4 months 6 days	4 years 4 months 2 days
Private warrants derivative liability | Risk-free rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	0.045	0.041	0.03	0.047	0.041
Private warrants derivative liability | Dividend yield
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	0	0	0	0	0
Forward share purchase agreements derivative liability | Exercise price one
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input			206.2
Forward share purchase agreements derivative liability | Exercise price three
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input			203.2
Forward share purchase agreements derivative liability | Stock price
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input			90
Forward share purchase agreements derivative liability | Volatility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input			0.704
Forward share purchase agreements derivative liability | Term (in years)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative, term			1 month 2 days
Forward share purchase agreements derivative liability | Risk-free rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input			0.013
Forward share purchase agreements derivative liability | Dividend yield
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input			0
Escrow shares derivative liability | First stock price trigger
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	270	270	270	270	270
Escrow shares derivative liability | Second stock price trigger
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	310	310	310	310	310
Escrow shares derivative liability | Stock price
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	5.8	13	90	6.42	13.6
Escrow shares derivative liability | Volatility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	0.986	0.86	0.68	0.986	0.79
Escrow shares derivative liability | Term (in years)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative, term	1 year 7 months 6 days	2 years 1 month 2 days	2 years 7 months 2 days	1 year 4 months 6 days	2 years 4 months 2 days
Escrow shares derivative liability | Risk-free rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	0.051	0.044	0.03	0.054	0.042
Escrow shares derivative liability | Dividend yield
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	0	0	0	0	0
Stockholder earn-out rights derivative liability | First stock price trigger
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	270	270	270	270	270
Stockholder earn-out rights derivative liability | Second stock price trigger
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	310	310	310	310	310
Stockholder earn-out rights derivative liability | First revenue trigger
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	65,000,000	65,000,000	65,000,000	65,000,000	65,000,000
Stockholder earn-out rights derivative liability | Second revenue trigger
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	101,000,000	101,000,000	101,000,000	101,000,000	101,000,000
Stockholder earn-out rights derivative liability | Stock price
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	5.8	13	90	6.42	13.6
Stockholder earn-out rights derivative liability | 2022 Revenue assumption
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	44,000,000	48,000,000	49,500,000	42,000,000	47,500,000
Stockholder earn-out rights derivative liability | Volatility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	0.986	0.86	0.68	0.986	0.79
Stockholder earn-out rights derivative liability | Term (in years)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative, term	1 year 7 months 6 days	2 years 1 month 2 days	2 years 7 months 2 days	1 year 4 months 6 days	2 years 4 months 2 days
Stockholder earn-out rights derivative liability | Risk-free rate
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	0.051	0.044	0.03	0.054	0.042
Stockholder earn-out rights derivative liability | Dividend yield
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	0	0	0	0	0