Commitments and Contingencies

3 Months Ended

Mar. 31, 2025

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 10 — 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 March 31, 2025. The Company has short-term arrangements with immaterial rental obligations for office space.

Nasdaq Notifications of Noncompliance

On April 9, 2024, the Company received a letter from the Staff (the “Notice”) notifying the Company that it no longer complies with Nasdaq's requirements contained in Nasdaq Listing Rule 5550 for companies traded on the Nasdaq Capital Market (the “Capital Market”). Nasdaq Listing Rule 5550 requires a company listed on the Capital Market to continuously meet at least one of the following requirements set forth in Nasdaq Listing Rule 5550(b) (the “Continued Listing Standards”):

Continued Listing Standard	Requirement
“Stockholders’ Equity”	Minimum $2.5 million
“Market Value of Listed Securities”	Minimum $35 million
“Net Income”	Minimum $500 thousand from continuing operations – most recent fiscal year or in two of three of last three fiscal years

As confirmed by the Notice, the Company did not meet (and does not currently meet) any of the Continued Listing Standards depicted above. On January 15, 2025, the Company received written notification (the “Delisting Notice”) from Nasdaq that the Nasdaq Hearing Panel (“Panel”) has determined to delist the Company’s common stock and warrants and suspend trading of the securities at the open of trading on January 17, 2025. In connection with the Panel’s decision, the Company filed a Form 25 on March 12, 2025 with the SEC in accordance with Nasdaq Listing Rule 5830 and Rule 12d2-2 promulgated under the Securities Exchange Act of 1934, as amended.

As a result of the suspension in trading and expected delisting, the Company’s common stock and warrants began trading publicly on the OTC Pink Open Market under its existing symbols “LFLY” and “LFLYW,” respectively effective January 17, 2025. In March 2025, the Company filed post-effective amendments to all of its existing registration statements on Form S-8s and its registration statement on Form S-3, removing from registration any unsold securities. In addition, the Company has determined to submit to its shareholders for approval at the Company’s annual meeting a reverse stock split (Note 18),

which if executed would result in a reduction in the number of the Company’s record holders to a number that would allow the Company to suspend its ongoing reporting obligations.

The Company is party to a number of agreements pursuant to which it has contractual covenants related to ongoing registration and information requirements. With Leafly’s securities being delisted from the Capital Market and terminating its shelf registration statement on Form S-3, the Company may become out of compliance with certain covenants under these agreements. Such breach, if not cured or waived by holders of such securities, could result in litigation and, with respect to the 2022 Notes, could result in an acceleration of principal amount of the 2022 Notes. Any of the foregoing would materially and adversely affect the Company’s business, financial condition and results of operations.