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o
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(Amendment No. 1)
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
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)
_____________________________

Delaware84-2266022
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
113 Cherry Street PMB 88154
Seattle, Washington
98104
(Address of principal executive offices)(Zip Code)
(206) 455-9504
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.0001 Par ValueLFLYThe Nasdaq Stock Market LLC
Warrants, exercisable for shares of common stock
at an exercise price of $11.50 per share
LFLYWThe Nasdaq Stock Market LLC
Securities registered pursuant to Section 12(g) of the Act: None
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 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. Yes   No   
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes      No  
As of November 25, 2022, the registrant had 40,035,568 shares of common stock ($0.0001 par value) outstanding, net of treasury stock.

EXPLANATORY NOTE

This amendment to Form 10-Q (the “Amendment”) amends the Quarterly Report on Form 10-Q of Leafly Holdings, Inc. (the “Company”) for the quarter ended June 30, 2022 (the “Original Filing”), which was filed with the Securities and Exchange Commission (the “SEC”) on August 12, 2022. This Amendment is being filed solely to correct the inadvertent omission of certain language in paragraph 4 of the certifications of the Company’s chief executive officer and chief financial officer filed as Exhibits 31.1 and 31.2 in Part II, Item 6, “Exhibits,” in the Original Filing. In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulation S-K Interpretation 246.13, the Company is also refiling the disclosure in Part I, Item 1, “Financial Statements,” and Item 4, “Controls and Procedures,” of the Original Filing, and including an amended and restated Part II, Item 6, “Exhibits,” to include the corrected certifications noted above, as well as a currently dated certification under Section 906 of the Sarbanes-Oxley Act of 2002.
This Amendment speaks as of the original filing date of the Original Filing (unless otherwise noted or as the context otherwise requires) and reflects only the changes to the cover page and the Exhibit Index. Except as expressly noted in this Amendment, this Amendment does not reflect events occurring after the Original Filing or modify or update in any way any of the other disclosures contained in the Original Filing. Accordingly, this Amendment should be read in conjunction with the Original Filing and the Company’s other filings with the SEC. Capitalized terms used herein, when not defined, shall have the meaning ascribed in the Original filing.
Unless the context otherwise requires, references to “Leafly,” “the Company,” “we,” “us” and “our” in this report refer to Leafly Holdings, Inc. prior to the closing of the Business Combination and to the post-combination company and its consolidated subsidiaries following the Business Combination, and “Merida” refers to the business of Merida Merger Corp. I and related entities prior to the Business Combination.



Table of Contents

Page
Item 1.
Part II












1


Cautionary Note Regarding Forward-Looking Statements
This 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,” “contemplate,” “believe,” “estimate,” “intend,” “project,” “budget,” “forecast,” “anticipate,” “plan,” “may,” “will,” “could,” “should,” “predict,” “potential,” 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 2021 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 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 businesses and the level of advertising spending by local businesses;
the degree of market acceptance and adoption of the Company’s products and services;
the Company’s ability to attract and retain customers;
the Company’s ability to raise financing in the future;
the Company’s success in retaining or recruiting officers, key employees or directors;
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.

2


Part I - Financial Information

Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED

LEAFLY HOLDINGS, INC
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
June 30, 2022December 31, 2021
ASSETS
Current assets
Cash and cash equivalents$35,398 $28,565 
Accounts receivable, net of allowance for doubtful accounts of $1,469 and $1,848, respectively
3,005 2,958 
Deferred transaction costs— 2,840 
Prepaid expenses and other current assets5,323 1,347 
Restricted cash31,868 130 
Total current assets75,594 35,840 
Property, equipment, and software, net1,561 313 
Total assets$77,155 $36,153 
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable$2,658 $3,048 
Accrued expenses and other current liabilities6,139 8,325 
Deferred revenue2,467 1,975 
Current portion of convertible promissory notes, net— 31,377 
Forward share purchase agreements derivative liability17,763 — 
Total current liabilities29,027 44,725 
Non-current liabilities
Non-current portion of convertible promissory notes, net28,590 — 
Private warrants derivative liability3,693 — 
Escrow shares derivative liability3,481 — 
Stockholder earn-out rights derivative liability12,147 — 
Total non-current liabilities47,911 — 
Commitments and contingencies (Note 8)
Stockholders' deficit
Preferred stock; $0.0001 par value; 5,000 and 6,578 authorized, — and 6,140 issued and outstanding, and aggregate liquidation preference of $— and $19,436 at June 30, 2022 and December 31, 2021, respectively
— 
Common stock; $0.0001 par value; 200,000 and 69,361 authorized at June 30, 2022 and December 31, 2021, respectively; 42,990 and 25,086 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively
Additional paid-in capital74,600 61,194 
Accumulated deficit(74,387)(69,770)
Total stockholders' deficit217 (8,572)
Total liabilities and stockholders' deficit$77,155 $36,153 
See Notes to Condensed Consolidated Financial Statements.
3


LEAFLY HOLDINGS, INC
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(in thousands, except per share amounts)
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Revenue$12,050 $10,588 $23,470 $20,063 
Cost of revenue1,441 1,213 2,896 2,303 
Gross profit10,609 9,375 20,574 17,760 
Operating expenses
Sales and marketing8,112 4,346 15,126 8,149 
Product development4,056 3,213 7,521 6,383 
General and administrative7,310 3,030 14,241 5,536 
Total operating expenses19,478 10,589 36,888 20,068 
Loss from operations(8,869)(1,214)(16,314)(2,308)
Interest expense, net(717)(109)(1,414)(108)
Change in fair value of derivatives24,397 — 14,000 — 
Other (expense) income, net(52)(889)(10)
Net income (loss)$14,759 $(1,317)$(4,617)$(2,426)
Net income (loss) per share:
Basic$0.39 $(0.05)$(0.13)$(0.10)
Diluted$0.37 $(0.05)$(0.13)$(0.10)
Weighted average shares outstanding:
Basic37,41524,80835,09724,786
Diluted42,04124,808 35,097 24,786 
See Notes to Condensed Consolidated Financial Statements.
4


LEAFLY HOLDINGS, INC
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) - UNAUDITED
(in thousands)
Three and Six Months Ended June 30, 2022
Preferred StockCommon StockAdditional
Paid-In Capital
Accumulated
Deficit
Total
SharesAmountSharesAmount
Balance at December 31, 2021
6,140$25,086 $$61,194 $(69,770)$(8,572)
Net loss— — — — (19,376)(19,376)
Stock-based compensation— — — 1,924 — 1,924 
Exercise of stock options— 114 — 127 — 127 
Conversion of 2021 Notes into Common Stock at Merger— 4,128— 33,024 — 33,024 
Conversion of Preferred Stock into Common Stock at Merger(6,140)(1)6,140— — — 
Merger and recapitalization, net of fees— — 2,007 — 27,997 — 27,997 
Stockholder contribution for debt issuance costs— — — — 924 — 924 
Escrow shares derivative liability— — 1,625 — (6,867)— (6,867)
Private warrants derivative liability— — — — (3,916)— (3,916)
Forward share purchase agreement derivative liability— — 3,861 — (14,170)— (14,170)
Stockholder earnout rights derivative liability— — — — (26,131)— (26,131)
Balance at March 31, 2022
$— 42,961$$74,106 $(89,146)$(15,036)
Net income— — — 14,759 14,759 
Stock-based compensation— — 464 — 464 
Exercise of stock options— 29— 30 — 30 
Balance at June 30, 2022
$— 42,990 $$74,600 $(74,387)$217 

Three and Six Months Ended June 30, 2021
Series A Preferred StockClass 1, Class 2, and Class 3 Common StockAdditional
Paid-In Capital
Accumulated
Deficit
Total
SharesAmountSharesAmount
Balance at December 31, 2020
6,140$24,752$$59,812 $(57,746)$2,069 
Net loss— — — (1,109)(1,109)
Stock-based compensation— — 181 — 181 
Exercise of stock options— 36— 40 — 40 
Balance at March 31, 2021
6,140$24,788$$60,033 $(58,855)$1,181 
Net loss— — — (1,317)(1,317)
Stock-based compensation— — 340 — 340 
Exercise of stock options— 49— 68 — 68 
Balance at June 30, 2021
6,140$24,837$$60,441 $(60,172)$272 

See Notes to Condensed Consolidated Financial Statements.



5


LEAFLY HOLDINGS, INC
CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
(in thousands)
Six Months Ended June 30,
20222021
Cash flows from operating activities
Net loss$(4,617)$(2,426)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization149 138 
Stock-based compensation expense2,388 521 
Bad debt expense 640 312 
Noncash lease costs— 230 
Noncash amortization of debt discount233 — 
Noncash interest expense associated with convertible debt243 111 
Noncash change in fair value of derivatives(14,000)— 
Other13 42 
Changes in operating assets and liabilities:
Accounts receivable(687)(763)
Prepaid expenses and other current assets(3,977)(8)
Accounts payable1,456 (458)
Accrued expenses and other current liabilities(713)1,206 
Deferred revenue492 494 
Net cash used in operating activities(18,380)(601)
Cash flows from investing activities
Purchase of property, equipment, and software(1,415)(19)
Net cash used in investing activities(1,415)(19)
Cash flows from financing activities
Proceeds from exercise of stock options157 81 
Proceeds from convertible promissory notes29,374 23,970 
Proceeds from business combination placed in escrow and restricted39,032 — 
Trust proceeds received from recapitalization at closing582 — 
Transaction costs associated with recapitalization(10,761)— 
Payments on related party payables(18)(210)
Net cash provided by financing activities58,366 23,841 
Net increase in cash, cash equivalents, and restricted cash38,571 23,221 
Cash, cash equivalents, and restricted cash, beginning of period28,695 4,934 
Cash, cash equivalents, and restricted cash, end of period$67,266 $28,155 
Supplemental disclosure of non-cash financing activities
Stockholder contribution for debt issuance costs$924 $— 
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 earnout conditions$6,867 $— 
Issuance of stockholder earn-out rights$26,131 $— 
See Notes to Condensed Consolidated Financial Statements.
6


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
(in thousands, except per share amounts)
NOTE 1 — Description of the Business and Merger Transaction

Description of the Business
Leafly Holdings, Inc. (“Leafly” or “the Company”) 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 current events. Leafly was incorporated in the state of Delaware on June 20, 2019 and is headquartered in Seattle, Washington.

The Company has two wholly-owned subsidiaries, Leafly Canada Ltd. (“Leafly Canada”) and Leafly, LLC (“Legacy Leafly”). Legacy Leafly is the accounting predecessor of Leafly. The accompanying condensed 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”), 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 Merida. 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 U.S. 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 12 and 13, 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 0.3283 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.

The following table provides a summary of the significant sources and uses of cash related to the closing of the Business Combination on February 4, 2022 and the cash received from escrow through June 30, 2022:

7


Amount in Merida's trust account ("the Trust") at closing
$90,824 
Total payment to Merida public redeeming stockholders
49,466 
Amount available after paying Merida redeeming stockholders
41,358 
Cash to escrow for Forward Share Purchase Agreements (see Note 13)39,032 
Remaining balance2,326 
Merida expenses paid from the Trust at closing1,744 
Net cash from the Trust to Leafly at closing582 
Cash received from escrow February 4, 2022 - June 30, 20227,369 
Net cash from the Trust to Leafly as of June 30, 2022$7,951 
The following table provides a reconciliation of the common shares related to the Merger transaction:

Merida public stockholders4,160
Merida initial stockholders (including Sponsor and EarlyBirdCapital)1,667
Holders of 2022 Notes (see Note 11)38
Shares held by Sponsor in escrow that are subject to earn-out conditions (see Note 12)1,625
    Total Merida7,490
Legacy Leafly existing securityholders35,434
    Total shares outstanding as of February 4, 202242,924
All shares in this table, except the Merida public stockholders and Holders of 2022 Notes shares, were subject to restrictions as to trading through August 3, 2022 ("Lock Up Restrictions").
NOTE 2 — Basis of Presentation and Significant Accounting Policies
Basis of Presentation
The interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (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, 2021 and 2020, and Management’s Discussion and Analysis of Financial Condition and Results of Operations of Leafly for the year ended December 31, 2021, each of which was filed on the company’s Amendment No. 1 on Form 8-K/A filed with the SEC on March 31, 2022 (the “2021 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.
Reclassifications
Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on the reported net income (loss).
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 can't be certain that these are known trends or that other trends may develop.
8



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 emerging growth company or (b) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act.

Significant Accounting Policies

The unaudited interim financial statements should be read in conjunction with the Company's 2021 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 three and six months ended June 30, 2022 compared to our Annual Report on Form 10-K for the year ended December 31, 2021. However, certain items became material during the periods presented and therefore, we have disclosed the related accounting policies below. In addition, as a result of the Business Combination, the Company entered into certain derivative instruments that are accounted for as liabilities. These instruments and the related accounting are discussed in Notes 12, 13, and 20.

Capitalized Software

The Company capitalizes certain costs related to acquisition and development of software for internal use, including internal labor costs incurred during development. The Company begins to capitalize these costs when planning and design efforts are successfully completed and development is ready to commence. Costs incurred during planning and design, together with costs incurred for training and maintenance, are expensed as incurred and recorded in product development expense. The Company places capitalized software assets into service and commences amortization when the asset is substantially complete and ready for its intended use. Once placed into service, the Company capitalizes qualifying costs of specified upgrades or enhancements to the assets when the upgrade or enhancement will result in new or additional functionality.
The Company’s estimated useful life for capitalized software is 3 years, and amortization is calculated using the straight-line method. The Company considers the useful life of capitalized software to be a significant estimate.

Transaction Costs

The Company incurred significant costs direct and incremental to the Business Combination and therefore to the recapitalization of the Company. We deferred such costs incurred in 2021. In 2022, upon closing of the Business Combination, total direct transaction costs were allocated between equity and liability instruments measured at fair value on a recurring basis that were newly issued in the recapitalization. Amounts allocated to equity were recorded to additional paid-in capital, while amounts allocated to the specified liabilities were recorded as other expense.

Recent Accounting Pronouncements

As a result of the elected JOBS Act relief discussed above, these condensed consolidated financial statements may not be comparable to other companies that do not elect JOBS Act relief or choose to adopt certain accounting pronouncements during a different period than the Company.

Recently Adopted Accounting Standards

None.

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 condensed consolidated financial statements or related disclosures.
9


NOTE 3 — Cash, Cash Equivalents, and Restricted Cash

Cash, cash equivalents, and restricted cash consisted of the following:
June 30,
2022
December 31,
2021
Cash and cash equivalents$35,398 $28,565 
Restricted cash31,868 130 
$67,266 $28,695 

The June 30, 2022 restricted cash balance includes $31,663 of cash maintained in escrow related to Forward Share Purchase Agreements ("FPAs"). The cash is released upon: (i) sale of the underlying shares by the FPA-holding stockholders into the open market, thus relieving Leafly of its contingent liability to repurchase the respective shares, in which case the cash is released to Leafly; or (ii) the FPA-holding stockholders exercising their rights to put the respective shares to Leafly, in which case the cash is released to the FPA holders. Additional information regarding the FPAs is included in Notes 13 and 20.
Effective August 1, 2022, the FPA holders elected to have Leafly repurchase their remaining shares covered by the FPAs. Additional information is included in Note 21.
NOTE 4 — Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:
June 30,
2022
December 31,
2021
Prepaid insurance$3,541 $57 
Other prepaid expenses1,704 1,134 
Other current assets78 156 
$5,323 $1,347 
NOTE 5 — Accounts Receivable, Net

Accounts receivable, net consists of amounts due from customers less an allowance for doubtful accounts. The following table presents the allowance for doubtful accounts and the changes therein:
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Balance, beginning of period$1,682 $941 $1,848 $1,131 
Add: provision for doubtful accounts, net of recoveries764 230 640 312 
Less: write-offs(977)(29)(1,019)(301)
Balance, end of period$1,469 $1,142 $1,469 $1,142 
NOTE 6 — Property, Equipment, and Software, Net
Property, equipment, and software consisted of the following:
June 30,
2022
December 31,
2021
Furniture and equipment$882 $1,049 
Leasehold improvements— 
Internal-use software1,326 — 
2,208 1,051 
Less: accumulated depreciation and amortization(647)(738)
$1,561 $313 
10


The Company recognized depreciation expense of $45 and $58 for the three months ended June 30, 2022 and 2021, respectively, and $97 and $138 for the six months ended June 30, 2022 and 2021, respectively. Amortization of internal-use software was $51 and $0 for the three months ended June 30, 2022 and 2021, respectively, and $51 and $0 for the six months ended June 30, 2022 and 2021, respectively.

Leases
The Company does not have any leases with an original term longer than twelve months as of June 30, 2022. The Company does rent office space under short-term arrangements, which are not material.
NOTE 7 — Accrued Expenses and Other Current Liabilities
Accrued expenses consist of the following:
June 30,
2022
December 31,
2021
Accrued bonuses$1,170 $3,668 
Other employee-related liabilities2,819 2,131 
Accrued interest960 1,313 
Other accrued expenses 1
1,190 1,213 
$6,139 $8,325 
1 There are no individual items within this balance that exceed 10% of the total of the table.
Accrued bonuses include those for executive officers of the Company. Historically, bonuses have been provided to executives on a discretionary basis. Bonus compensation is designed to hold executives accountable and reward them for individual and business performance. The Company offers an annual incentive program for its executive officers whereby they are eligible to receive target bonus payouts, of up to 50% for the CEO and 40% for other executive officers, of their base salary, with the actual bonus awarded based on a number of factors, including each executive’s individual performance, Leafly’s performance, current market and business climate, and Leafly’s financial circumstances, as determined by the Leafly board of directors.
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 condensed consolidated financial statements.
NOTE 9 — Revenue and Contract Balances
The following table presents the Company's revenue by service type:
Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
Advertising$11,899 $10,562 $23,228 $19,973 
Other services151 26 242 90 
$12,050 $10,588 $23,470 $20,063 
The following table presents the Company's revenue by geographic region:
Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
United States1
$11,076 $9,344 $21,647 $17,887 
All other countries1
974 1,244 1,823 2,176 
$12,050 $10,588 $23,470 $20,063 
11


1 Calculated based on customer sold to address for the periods presented. Using the prior calculation based on billing entity address, revenue for the United States and All other countries would have been $11,421 and $629 for the three months ended June 30, 2022, $9,508 and $1,080 for the three months ended June 30, 2021, $22,156 and $1,314 for the six months ended June 30, 2022, and $18,163 and $1,900 for the six months ended June 30, 2021, respectively.
The following tables presents the Company's revenue by state:

Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
Arizona19 %16 %19 %17 %
California12 %10 %12 %10 %
Oregon10 %11 %10 %12 %

No other state comprised 10% or more of Leafly’s revenue during the three and six months ended June 30, 2022 and 2021. We have a diversified set of customers; no single customer accounted for 10% or more of our revenue for the three and six months ended June 30, 2022 and 2021.
The following table presents the Company's revenue by timing of recognition:
Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
Over time
Retail1
$9,065 $8,137 $18,244 $15,952 
Brands2
1,587 1,506 3,004 2,592 
$10,652 $9,643 $21,248 $18,544 
Point in time
Brands3
1,398 945 2,222 1,519 
$12,050 $10,588 $23,470 $20,063 
1 Revenues from subscription services and display ads.
2 Revenues from brand profile subscriptions and digital media (including display ads and audience extension).
3 Revenues from branded content and 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 accounts and changes in the deferred revenue accounts
Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
Balance, beginning of period$2,566 $2,023 $1,975 $1,585 
Add: net increase in current period contract liabilities1,591 1,710 2,239 1,922 
Less: revenue recognized from beginning balance(1,690)(1,654)(1,747)(1,428)
Balance, end of period$2,467 $2,079 $2,467 $2,079 
A majority of the deferred revenue balance as of June 30, 2022 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 June 30, 2022 or December 31, 2021.

12


NOTE 10 — Income Taxes
The Company’s effective tax rate was 0% for the three and six months ended June 30, 2022 and 2021. 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.
There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2022 and December 31, 2021. 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 has been subject to income tax examinations by major taxing authorities since inception.
As a result of the Business Combination, the Company’s federal, state, and foreign net operating loss carryforward was $53,904, $35,976 and $4,303, respectively, as of December 31, 2021. Federal and state tax laws impose substantial restrictions on the utilization of net operating loss carryforwards in the event of an "ownership change" as defined in Section 382 of the Internal Revenue code. Such a limitation could result in limitation in the use of the net operating losses in future years and possibly a reduction of the net operating losses available.
NOTE 11 — Convertible Promissory Notes

2022 Notes

Merida entered into a $30,000 convertible 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 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 $12.50. 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 $18.00 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) 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 June 30, 2022, the net carrying amount of the 2022 Notes was $28,590, which includes unamortized issuance costs and debt discount of $1,410. The estimated fair value of the convertible debt instruments was approximately $27,500 as of June 30, 2022. The fair value was measured using a combination of an income approach and Black-Scholes model, both 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 4,128 shares of Leafly common stock at the conversion price of approximately $2.63, 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
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stock then converted to shares of common stock of the combined company using the conversion ratio of 0.3283, which was used for conversion of all Leafy securities.
NOTE 12 — Stockholders’ Equity
The Condensed Consolidated Statements of Changes in Stockholders' Equity reflect the reverse recapitalization on February 4, 2022, as discussed in Note 1. Since the Company was determined to be the accounting acquirer in the transaction, all periods presented prior to consummation of the transaction reflect the historical activity and balances of Leafly, Inc. (other than common and preferred stock and potentially issuable shares underlying stock options and convertible promissory notes, which have been retroactively restated).

Common Stock
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.

As of June 30, 2022 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.

Voting Rights
The holders of Leafly common stock exclusively possess all stockholder voting power with respect to Leafly, except as otherwise required by law or the Company's charter. Holders of Leafly common stock are entitled to one vote per share on each matter properly submitted to a vote of stockholders. The holders of Leafly common stock will at all times vote together as one class on all matters submitted to a vote of stockholders, unless otherwise required by Delaware law or the charter. If Leafly has multiple classes of common stock in the future, then Delaware law could require holders of shares of a class of capital stock to vote separately as a single class in the following circumstances:
if we were to seek to amend the charter to increase or decrease the par value of a class of the capital stock, then that class would be required to vote separately to approve the proposed amendment; and

if we were to seek to amend the charter in a manner that alters or changes the powers, preferences, or special rights of a class of capital stock in a manner that affected its holders adversely, then that class would be required to vote separately to approve the proposed amendment.
Election of Directors
The charter provides for a classified board of directors that is divided into three classes with staggered three-year terms. Only the directors in one class are subject to election by a plurality of the votes cast at each annual meeting of stockholders, with the directors in the other classes continuing for the remainder of their respective three-year terms. The charter does not provide for cumulative voting for the election of directors.
Dividend Rights
Subject to the rights, if any, of the holders of any outstanding series of the Leafly preferred stock, the holders of Leafly common stock are entitled to receive dividends and other distributions (payable in cash, property or capital stock of Leafly) when, as and if declared by the Leafly board of directors out of any assets or funds legally available and will share equally on a per share basis in such dividends and distributions.
No Preemptive or Similar Rights
Leafly common stock is not entitled to preemptive rights, and is not subject to conversion, redemption or sinking fund provisions.
Liquidation, Dissolution and Winding Up
In the event of any voluntary or involuntary liquidation, dissolution or winding-up, after payment or provision for payment of the debts and other liabilities of Leafly, the holders of Leafly common stock will be entitled to receive all the remaining
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assets of Leafly available for distribution to its stockholders, ratably in proportion to the number of shares of the Leafly common stock held by them, subject to the rights, if any, of the holders of any outstanding shares of Leafly preferred stock.

Sponsor Shares Subject to Earn-Out Conditions

In accordance with the Merger Agreement, upon closing of the Business Combination, 1,625 of the shares 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 $13.50 at any time during the two-year period following closing, and the remaining 50% will be released from escrow if and when the Company's common stock trades at or above $15.50 at any time during the three-year period following closing. In addition, all 1,625 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 20 for additional information.

Lock Up Restrictions

In accordance with various legal documents, the majority of our Common Stock outstanding as of March 31, 2022 is subject to restrictions on trading through August 3, 2022. See Note 1 for detail on Common Stock subject to Lock Up Restrictions.

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 5,429 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 20 for additional information.

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

First Tranche

Up to 2,715 shares will be issued if and when:
revenue for the year ending December 31, 2022 equals or exceeds $65,000 (first 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 $13.50 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), or
a change of control occurs within the two years after the closing date of the Business Combination at the first target price or higher, or
a pro rata portion of 2,715 shares (50%) if the revenue during the target period meets or exceeds 90% of the first revenue target.

Second Tranche

Up to 2,715 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 $15.50 during the three 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), or
a change of control occurs within the three years after the closing date of the Business Combination at the second target price or higher, or
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a pro rata portion of 2,715 (50%) if the revenue during the second target period meets or exceeds 90% of the second revenue target.

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

Preferred Stock
The Leafly board of directors 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 Leafly board of directors 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 Leafly board of directors 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 Leafly board of directors 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 June 30, 2022.
NOTE 13 — Warrants and Forward Share Purchase Agreements

Public Warrants
As of both June 30, 2022 and December 31, 2021, there were 6,501 warrants outstanding 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 one share of common stock at an exercise price of $11.50. 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 will become exercisable on the later of (a) 30 days after the completion of a merger or (b) 12 months from the closing of the IPO. No warrants will 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 warrants and a current prospectus relating to such shares of common stock.

Notwithstanding the foregoing, if a registration statement covering the shares of common stock issuable upon exercise of the Public Warrants is not effective within a specified period following the consummation of a merger, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise 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 warrants on a cashless basis. The Public Warrants will expire five years after the completion of a merger or earlier upon redemption or liquidation.

Once the warrants become exercisable, the Company may redeem the Public Warrants:
in whole and not in part;
at a price of $0.01 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 $18.00 per share for any 20 trading days within a 30-trading day period commencing after the warrants become 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
As of both June 30, 2022 and December 31, 2021, there were 3,950 warrants outstanding that Merida had sold to the Sponsor and EarlyBirdCapital in a private placement that took place simultaneously with Merida’s initial public offering
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("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 completion of the Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be 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 will be 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 warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, the 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 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 20 for additional information.

Forward Share Purchase Agreements

In December 2021 and January 2022, the Company entered into four separate FPAs with certain investors. The FPAs allow the investors to sell and transfer common stock held by the investors, not to exceed a total of 4,000 shares in aggregate, to the Company in exchange for cash. The price to be paid by the Company was $10.16 per share for up to 2,600 shares and $10.01 per share for up to 1,400 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 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 holders entered into amendments to the FPAs (the “Amended FPAs”). The Amended FPAs modified the price at which the applicable holder has the right, but not the obligation, to have Leafly repurchase certain shares held by the applicable holder as of the closing of the Business Combination and not later sold into the market to a price of $10.16 per share (with respect to 686 of the shares subject to the Amended FPAs) and $10.31 per share (with respect to 2,404 of the shares subject to the Amended FPAs). The Amended FPAs also modified the date by which such holders may 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 to the escrow accounts.
During the three and six months ended June 30, 2022, $5,403 and $7,369, respectively, was released from the escrow accounts due to the 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 all of their remaining shares covered by the FPAs. Additional information is included in Note 21.
NOTE 14 — Equity Incentive 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 (“Earn Out Plan”), and the New Leafly 2021 Employee Stock Purchase Plan (the “ESPP”), which are discussed below. There were no options or other equity awards granted under the plans during the three and six months ended June 30, 2022.

2021 Plan
The 2021 Plan became effective immediately upon closing of the Business Combination. Pursuant to the 2021 Plan, 4,502 shares of common stock are 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) 4,502 shares (adjusted pursuant to the terms of the 2021 Plan). No awards have been granted under this plan as of the date of this filing.
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
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number of shares and exercise prices to reflect the terms of the Business Combination. The material terms of the 2018 Plan are:
Our compensation committee of the board of directors administers the 2018 Plan.
Options under the 2018 Plan were granted to employees, directors, and consultants of the Company and its subsidiaries.
In the event of a merger or other consolidation relating to the Company or the sale of all or substantially all of the Company’s stock or assets, all then-outstanding option would be treated as set forth in the agreement governing such transaction.
With limited exceptions, options under the 2018 Plan are generally non-transferable prior to vesting unless otherwise determined by the plan administrator and are exercisable only by the participant during his or her lifetime.

In May 2021, the Company’s board of directors granted stock options to purchase an aggregate of approximately 2,191 shares of common stock at an exercise price of $1.10 per share. These stock option grants were issued from the 2018 Plan.

The fair value of each stock option award to employees is estimated on the date of grant using the Black-Scholes option pricing model. The following weighted-average assumptions were used as inputs to the pricing model for options granted during the six months ended June 30, 2021 (there were no grants made in 2022):

Risk-free interest rate1.0 %
Expected term in years5.90
Expected volatility61.2 %
Expected dividend yield0.0 %

Stock option activity under the 2018 Plan for the three and six months ended June 30, 2022 was as follows:
Number of
Shares
Weighted Average
Exercise Price
Aggregate
Intrinsic Value
Weighted Average
Remaining Contractual
Term (in years)
Outstanding at January 1, 2022
3,851$1.77 
Exercised(114)1.12 
Forfeited or expired(56)1.08 
Outstanding at March 31, 2022 3,681$1.78 $23,918 8.62
Exercised(29)1.05 
Forfeited or expired(3)2.30 
Outstanding at June 30, 2022 1
3,649$1.78 $11,307 8.35
Vested and exercisable
1,454$1.00 $5,094 7.75
1 Includes 2,544, 0, and 1,105 of awards accounted for as service-based, performance-based, and market-based options, respectively, that the Company currently deems probable of vesting. The performance options vest only if gross revenue equals or exceeds certain thresholds for the years ending December 31, 2022 and 2023, while the market-based options will vest only if the price of the Company's common stock reaches a $1,000,000 market capitalization target for any 20 days during a 30-day period on or before the fourth anniversary of the closing of the Merger.
As of June 30, 2022, there was: (i) $1,597 of unrecognized compensation cost related to service-based awards, which is expected to be recognized over a weighted-average service period of approximately 1.39 years; and (ii) $2,117 of unrecognized compensation cost related to market-based awards, which is expected to be recognized over a weighted-average service period of approximately 1.78 years.
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The following tables presents the classification of stock-based compensation expense:
Three Months Ended June 30,Six Months Ended June 30,
2022202120222021
Sales and marketing$26 $23 $60 $50 
Product development19 71 37 112 
General and administrative419 246 2,291 359 
$464 $340 $2,388 $521 
Earn Out Plan
The Earn Out Plan became effective immediately upon closing of the Business Combination. Pursuant to the Earn Out Plan, approximately 571 shares of common stock have been reserved for issuance to employees and certain other eligible parties in the form of restricted stock units (“RSUs”). These RSUs will vest if the Company achieves certain thresholds prior to the third anniversary of the Merger. No RSUs have been awarded under the Earn Out Plan as of June 30, 2022.

Option Modification
Concurrent with the closing of the Business Combination, the vesting provisions of certain stock options previously granted in 2021 to our Chief Executive Officer to purchase 2,917 shares of common stock were modified, and a corresponding charge of $1,366 was recorded for the three months ended March 31, 2022 to general and administrative expenses and additional paid-in capital. The original award included the following vesting provisions:
Liquidity Event Option: A stock option to purchase 1,458 shares of common stock will vest upon the earlier of (a) the closing of the Initial Public Offering of the Company's common stock or (b) a change in control, provided the recipient remains in continuous service.
Milestone Option: A stock option to purchase 1,458 shares of common stock will vest one-third each upon the achievement of the three annual revenue targets of $75,000, $150,000 and $300,000, provided the recipient remains in continuous service.
The modified vesting provisions are as follows:
Liquidity Event Option: A stock option to purchase 1,458 shares of common stock will vest as follows, provided the recipient remains in continuous service: 50% upon the closing of the Business Combination and 50% upon the earlier of (i) the Company's achievement of a $1,000,000 market capitalization for any 20 days during a 30-day period on or before the fourth anniversary of the closing of the Business Combination (the "Market Cap Milestone") or (ii) a change in control.
Milestone Option: A stock option to purchase 1,458 shares of common stock will vest upon the achievement of the following milestones, provided that the recipient remains in continuous service:
First Milestone: 50% of the total number of shares subject to the stock option will vest if the Company's gross revenue for the year ending December 31, 2022 equals or exceeds $65,000. A pro rata amount vests in the event that the Company's gross revenue equals or exceeds 90% of the revenue target.
Second Milestone: 50% of the total number of shares subject to the stock option will vest if the Company's gross revenue for the year ending December 31, 2023 equals or exceeds $101,000. A pro rata amount vests in the event that the Company's gross revenue equals or exceeds 90% of the revenue target.
In the event the Second Milestone is achieved, any unvested portion of the stock option subject to the First Milestone will fully vest.
In the event the Market Cap Milestone is achieved, any unvested portion of the Milestone Option will fully vest.
The date of vesting for the Milestone Option will be the earlier of (i) the date following the Company's filing with the SEC of its Form 10-K for the applicable fiscal year in which the applicable revenue target was attained or, (ii) the date of the Market Cap Milestone is achieved.
All shares subject to the Milestone Option will vest immediately upon a change in control.
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The Milestone Option will remain outstanding unless and until the last possible time that the Second Milestone can be achieved, the Market Cap Milestone can be achieved, or a change in control may occur during the term of the Milestone Option award, subject to the recipient's continued service.
NOTE 15 — Employee Stock Purchase Plan
The 2021 Employee Stock Purchase Plan (the “ESPP”) became effective immediately upon closing of the Merger. Pursuant to the ESPP, 1,126 shares of common stock are 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) 1,126 shares (as adjusted pursuant to the terms of the ESPP). No employees participate in the ESPP yet as of the date of this filing.
NOTE 16 — Related Party Transactions
One of Leafly's significant investors, Brendan Kennedy, is a member of the board of directors of Tilray, Inc., which is the parent company of High Park Holdings Ltd., a customer of Leafly, and has therefore been identified as a related party. During the three months ended June 30, 2022 and 2021, the Company recorded approximately $— and $112, respectively, of revenue earned from contracts with this customer, and during the six months ended June 30, 2022 and 2021, the Company recorded approximately $— and $114, respectively, of revenue earned from contracts with this customer.

In June 2021, Mr. Kennedy, 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.
NOTE 17 – Defined Contribution Plan
The Company recognized expense from matching contributions to the Company-sponsored defined contribution retirement plan of $215 and $218 for the three months ended June 30, 2022 and 2021, respectively, and the Company recognized $459 and $369 for the six months ended June 30, 2022 and 2021, respectively.
NOTE 18 — Net Income (Loss) Per Share
Basic and diluted net income (loss) 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 income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period.

The Company considers its preferred stock to be participating securities. As of June 30, 2022, the Company had 1,625 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 — Stockholders' Equity for additional information). Net income (loss) is attributed to common stockholders and participating securities based on their participation rights. Net income (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. 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.
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The following table presents the computation of basic and diluted net income (loss) per share attributable to common stockholders, as a group, for the periods presented:
Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
Net income (loss) (A)$14,759 $(1,317)$(4,617)$(2,426)
Income impact of convertible promissory notes600— — — 
Total undistributed income (loss) (B)15,359(1,317)(4,617)(2,426)
Weighted average shares outstanding (C)37,41524,80835,09724,786
Dilutive effect of convertible promissory notes2,429— — — 
Dilutive effect of stock-based awards2,197— — — 
Common stock and common stock equivalents (D)42,04124,80835,09724,786
Net income (loss) per share:
Basic (A/C)$0.39 $(0.05)$(0.13)$(0.10)
Diluted (B/D)$0.37 $(0.05)$(0.13)$(0.10)
During 2022, the Class 1, 2, and 3 shares were outstanding from January 1, 2022 through February 3, 2022, while only one class of common stock was outstanding beginning February 4, 2022. During 2021, only the Class 1, 2, and 3 shares were outstanding. Following are the calculations of basic and diluted net income (loss) per share for each class of common stock:
Three Months Ended
June 30, 2022
Three Months Ended
June 30, 2021
CommonClass 1Class 2Class 3
Net income (loss) (A)$14,759 $(498)$(730)$(89)
Income impact of convertible promissory notes600 — — — 
Total undistributed income (loss) (B)$15,359 $(498)$(730)$(89)
Weighted average shares outstanding (C)37,415 9,37913,7551,675
Dilutive effect of convertible promissory notes2,429 — — — 
Dilutive effect of stock-based awards2,197 — — — 
Common stock and common stock equivalents (D)42,0419,37913,7551,675
Net income (loss) per share:
Basic (A/C)$0.39 $(0.05)$(0.05)$(0.05)
Diluted (B/D)$0.37 $(0.05)$(0.05)$(0.05)
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Six Months Ended June 30, 2022Six Months Ended June 30, 2021
CommonClass 1Class 2Class 3
Net loss$(4,617)$(918)$(1,346)$(162)
Weighted average shares outstanding35,0979,37913,7551,652
Basic and diluted net loss per share$(0.13)$(0.10)$(0.10)$(0.10)

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
June 30,
Six Months Ended June 30,
2022202120222021
Shares subject to outstanding common stock options1,0923,9311,0923,931
Shares subject to stockholder earn-out rights5,4295,429
Shares subject to Public Warrants6,5016,501
Shares subject to Private Warrants3,9503,950
Preferred stock6,1406,140
Escrow Shares1,6251,625
18,59710,07118,59710,071
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.
NOTE 19 — Segment Reporting
Segment revenue and gross profit were as follows during the periods presented:
Three Months Ended
June 30,
Six Months Ended
June 30,
2022202120222021
Revenue:
Retail$9,065 $8,145 $18,244 $15,966 
Brands2,985 2,443 5,226 4,097 
Total revenue$12,050 $10,588 $23,470 $20,063 
Gross profit:
Retail8,075 7,504 16,214 14,595 
Brands2,534 1,871 4,360 3,165 
Total gross profit$10,609 $9,375 $20,574 $17,760 
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 certain other countries. Refer to Note 9 for revenue classified by major geographic area.
NOTE 20 — 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
22


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 of the valuation inputs the Company utilized to determine such fair value:
DescriptionLevelFair Value at June 30, 2022Fair Value at March 31, 2022Fair Value at February 4, 2022
Gain (Loss) Three Months Ended June 31, 20221
Gain (Loss) Six Months Ended June 31, 20221
Private Warrants derivative liability3$3,693 $7,989 $3,916 $4,296 $223 
Forward share purchase agreements derivative liability317,763 7,452 14,170 $(10,311)$(3,593)
Escrow Shares derivative liability33,481 10,129 6,868 $6,648 $3,387 
Stockholder earn-out rights derivative liability312,147 35,912 26,131 $23,765 $13,984 
Total$37,084 $61,482 $51,085 24,397 $14,000 
1 Totals may not foot due to rounding

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:
June 30, 2022March 31, 2022
February 4, 2022
Exercise price
$11.50$11.50$11.50
Stock price
$4.50$8.28$6.53
Volatility
51.6%36.7%34.3%
Term (in years)
4.594.855.00
Risk-free rate
3.0%2.4%1.8%
Dividend yield
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.
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Forward Share Purchase Agreements Derivative Liability
The FPAs were valued using a Black-Scholes model and the following Level 3 inputs:

June 30, 2022March 31, 2022
February 4, 2022
Exercise price - one agreement
$10.31$10.16$10.16
Exercise price - three agreements$10.16$10.01$10.01
Stock price
$4.50$8.28$6.53
Volatility
70.4%72.6%63.9%
Term (in years)
0.090.090.24
Risk-free rate
1.3%0.2%0.2%
Dividend yield
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 underlying the FPAs may be sold by the holders into the open market earlier, which in some cases they have been (see Note 21). 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 binomial lattice model and the following Level 3 inputs:
June 30, 2022March 31, 2022
February 4, 2022
First stock price trigger
$13.50$13.50$13.50
Second stock price trigger$15.50$15.50$15.50
Stock price
$4.50$8.28$6.53
Volatility
68.0%63.0%64.0%
Term (in years)
2.592.853.00
Risk-free rate
3.0%2.4%1.6%
Dividend yield
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 binomial lattice model and the following Level 3 inputs:

June 30, 2022March 31, 2022
February 4, 2022
First stock price trigger
$13.50$13.50$13.50
Second stock price trigger$15.50$15.50$15.50
First revenue trigger$65,000$65,000$65,000
Second revenue trigger$101,000$101,000$101,000
Stock price
$4.50$8.28$6.53
2022 Revenue assumption$49,500$55,500 $55,500 
Volatility
68.0%63.0%64.0%
Term (in years)
2.592.853.00
Risk-free rate
3.0%2.4%1.6%
Dividend yield
0.0%0.0%0.0%
The revenue assumption input represents the midpoint of revenue guidance the Company has provided. The volatility input was calculated using a weighted average of historical volatilities from select benchmark companies. The term input
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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.

NOTE 21 - Subsequent Events
Effective August 1, 2022, the FPA holders elected to have Leafly repurchase their remaining 3,081 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 are able to claim the remainder any time until August 1, 2023. If unclaimed, the remaining funds in escrow will be distributed to the Company.
Item 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
The term “disclosure controls and procedures,” as defined in Rules 13a-15 and 15d-15 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(d) 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 six months ended June 30, 2022.
25


Part II - Other Information

Item 6. EXHIBITS
The following documents are included as exhibits to this Quarterly Report on Form 10-Q:
Exhibit
Number
Exhibit Description
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
*Filed herewith.
**Furnished 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
+Management contract or compensation plan or arrangement.
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 December 2, 2022.


/s/   Yoko Miyashita                           
26



By: Yoko Miyashita
Chief Executive Officer
Leafly Holdings, Inc.

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


27

EXHIBIT 31.1
CERTIFICATION

I, Yoko Miyashita, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 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: December 2, 2022                    By:
/s/ Yoko Miyashita
Yoko Miyashita
Chief Executive Officer
(Principal Executive Officer)


EXHIBIT 31.2
CERTIFICATION

I, Suresh Krishnaswamy, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, 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: December 2, 2022             By:
/s/ Suresh Krishnaswamy
Suresh Krishnaswamy
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer


EXHIBIT 32

CERTIFICATION 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 quarterly period ended June 30, 2022, 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: December 2, 2022            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 quarterly period ended June 30, 2022, 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: December 2, 2022            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 quarterly period ended June 30, 2022, 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 general incorporation language contained in such filing.