Bright Mountain Media Inc
For the period ended Dec 31, 2024. Filed Mar 10, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 10, 2025
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-04-01.
0001628280-24-014146
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-10.
0000950170-25-036193
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 176 previous paragraphs and 139 current paragraphs.
70 unchanged; 38 reworded; 30 added; 63 removed; 5 previous and 1 current paragraphs rearranged.
Tables are not compared: 11 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (30)
Current report
Bright Mountain Media, Inc. is an end-to-end marketing services company that helps brands with the right audiences, at the right time, with the right message, both effectively and efficiently by removing the middlemen in the marketing workflow. Our end-to-end offerings combine consumer insights with creative services, media services, and advertising technology to deliver solutions to improve audience fidelity for brands. We focus on digital publishing, advertising technology, consumer insights, creative services, and media services.
Current report
During 2024, the Company's consumer insights division maintained a business line which connected clients to individuals with expertise across a multitude of disciplines for consulting on particular projects for those clients. In March of 2024, the consumer insights division stopped offering those expert broker services and sold the assets related to its expert broker business to a third party.
Current report
In June of 2024, W. Kip Speyer retired from his position as Chairman of the Board, and Harry Schulman resigned from his position as a member of the Board. In August of 2024, the Board of Directors of the Company appointed Ms. Elaine Riddell, Mr. Joseph T. Pergola, and Mr. Thomas A. Triscari as directors of the Company, effective August 8, 2024.
Current report
On November 27, 2024, a judgment was entered against the Company granting damages of $1.7 million in connection with the Ladenburg litigation described in Item 3. On December 26, 2024, the Company and its subsidiaries entered into the Twenty-First Amendment to the Credit Agreement for the purpose of securing a bond to stay execution of the judgment. The Company obtained the bond and a stay of execution of the judgment was granted on February 3, 2025. The Company currently plans to appeal the judgment.
Current report
Key Factors Affecting Our Performance
Current report
Consumer insights revenue increased by $3.2 million, or 13%, for the year ended December 31, 2024 compared to the same period in 2023 and represented approximately 48% of the Company’s revenue for the year ended December 31, 2024. As discussed above, the Big Village Acquisition was completed in April 2023, and is the main driver of the increase in consumer insights revenue for the year ended December 31, 2024.
Current report
Creative services revenue increased by $1.9 million, or 38%, for the year ended December 31, 2024 compared to the same period in 2023, and represented approximately 13% of the Company’s revenue for the year ended December 31, 2024. As discussed above, the Big Village Acquisition was completed in April 2023, and is the main driver of the increase in creative services revenue for the year ended December 31, 2024.
Current report
Cost of revenue increased $8.4 million, or 27%, for the year ended December 31, 2024, compared to the same period of 2023. For the year ended December 31, 2024, cost of revenue includes $25.9 million, or 64% from the impact of the Big Village Acquisition, which was completed in April 2023. This compares to $24.0 million, or 75% for the same period in 2023.
Current report
Non-direct project cost increased $246,000, or 4%, for the year ended December 31, 2024, when compared to the same period in 2023. Approximately $6.6 million, or 16%, of the Company's cost of revenue for the year ended December 31, 2024, was a result of non-direct project cost compared to $6.4 million, or 20%, for the same period in 2023. These costs represent overall client service costs that are not specifically related to a particular project.
Current report
Personnel cost decreased by approximately $1.3 million, or 13%, for the year ended December 31, 2024 compared to the same period in 2023. The Company reduced its headcount in 2024 by 71 employees, including 28 employees that were terminated as a reduction in force. The Company incurred severance cost of approximately $250,000 in connection with this reduction.
Current report
Legal fees increased by $1.6 million, or 167%, for the year ended December 31, 2024, compared to the same period in 2023. This increase is due largely to payments made as part of the ongoing litigation with Ladenburg. For a full description of litigation matters, see Note 17, "Commitments and Contingencies," to the consolidated financial statements.
Current report
Data Processing
Current report
Data processing costs increased by $509,000, or 57%, during the year ended December 31, 2024, when compared to the same period in 2023. As discussed above, the Big Village Acquisition was completed in April 2023, and contributed to data processing for nine months of the prior period and for the full twelve months of the current period, and is the main driver of the increase in data processing for the year ended December 31, 2024.
Current report
In connection with the Twentieth Amendment, adjustments were made to the interest rate for outstanding loans as follows:
Current report
Changing the last out term loan PIK rate to the SOFR plus 7% until December 31, 2024, and to the SOFR plus 2% (previously 5%) thereafter;
Current report
Conversion of interest payable on the Seventeenth Amendment loans from April 2024 until June 30, 2025 from a combination of cash and PIK to solely PIK at the rate of 15%, with an option to maintain such terms after June 30, 2025 in exchange for an additional 2% PIK fee or transition to payments made 10% PIK and 5% in cash;
Current report
Extending the due date for the 5% exit fee with respect to the Nineteenth Amendment to December 31, 2024.
Current report
On December 26, 2024, the Company, the Lenders, and Centre Lane Partners entered into the Twenty-First Amendment to the Credit Agreement, pursuant to which the Company borrowed an additional approximately $1.9 million from the Lenders (“Twenty-First Amendment Loan Amounts”). Interest incurred on the Twenty-First Amendment Loan Amounts will be payable in a combination of cash and payments in kind. Interest to be paid in cash will accrue at (i) a rate of 0% per annum from the date the Twenty-First Amendment Loan Amounts are funded until June 30, 2025 and (ii) a rate of 5% per annum thereafter; provided, however, if prior to June 30, 2025, the Company informs Centre Lane Partners that it will pay the PIK Fee (as defined below) to the Lenders, then the interest rate will remain 0% per annum. Interest to be paid in kind will accrue at (x) a rate of 15% per annum from the date the Twenty-First Amendment Loan Amounts are funded until June 30, 2025 and (y) a rate of 10% per annum thereafter; provided, however, if prior to June 30, 2025, the Company informs Centre Lane Partners that it will pay the PIK Fee to the Lenders, then the interest rate will remain 15% per annum. For purposes of the foregoing, the “PIK Fee” shall mean an amount equal to 2% of the Twenty-First Amendment Loan Amounts outstanding payable in kind.
Current report
The outstanding principal owed to Centre Lane Partners was $78.8 million and $70.2 million as of December 31, 2024 and December 31, 2023, respectively. Of the amount outstanding at December 31, 2024, approximately $3.8 million is due by December 31, 2025. The balance of $75.0 million is due in 2026. The First Out Loans and the Last Out Loans have a maturity date of April 20, 2026; the Twenty-First Amendment Loan Amounts have a maturity date of the earlier of (i) the date upon which certain litigation is resolved and results in the Company being obligated to pay a certain amount in connection with such litigation and (ii) April 20, 2026; and the Nineteenth Amendment Term Loans had a maturity date of December 31, 2024, in which the loan balance was repaid.
Current report
Cash used in investing activities of $110,000 and $14,000 for the years ended December 31, 2024 and 2023, respectively, was related to $14,000 used for the purchase of property and equipment in both 2023 and 2024, and $96,000 used for website enhancement during the year ended December 31, 2024.
Current report
During the year ended December 31, 2024, the Company used cash of $1.4 million in financing activities, which is largely attributable to repayment of principal on the Centre Lane Senior Secured Credit Facility of $3.1 million, partially offset by the draw of $1.9 million on the Centre Lane Senior Secured Credit Facility that we used to secure a bond in connection with our appeal of the Ladenburg litigation.
Current report
The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions. Note 2, "Summary of Significant Accounting Policies," to the consolidated financial statements, describes the significant accounting policies used in preparation of the consolidated financial statements. Management believes the most complex and sensitive judgments, because of their significance to the consolidated financial statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. The most significant areas involving management judgments and estimates are described below. Actual results in these areas could differ from management's estimates.
Current report
See Note 2, "Summary of Significant Accounting Policies," to the consolidated financial statements.
Current report
We have generated goodwill as a result of our acquisitions. At the time of acquisition, we account for business acquisitions using the purchase method of accounting, in accordance with which assets acquired and liabilities assumed are recorded at their respective fair values at the acquisition date. The fair value of the consideration paid, including contingent consideration, is assigned to the assets acquired and liabilities assumed based on their respective fair values. Goodwill represents the excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed.
Current report
We review our goodwill for impairment on an annual basis at September 30 or more frequently if events or a change in circumstances indicates that the carrying amount may not be recoverable. We test goodwill for impairment at a level within the Company referred to as a reporting unit. We have determined that there are three reporting units: “Owned & Operated”, “Ad Network” and “Insights”.
Current report
In accordance with FASB Accounting Standards Codification No. 350, Goodwill and Other, (ASC 350), we initially perform a qualitative assessment (commonly known as "step zero") to determine whether further impairment testing is necessary before performing the two-step test. The qualitative assessment requires judgment by management about economic conditions including the entity's operating environment, its industry and other market considerations, entity-specific events related to financial performance or loss of key personnel and other events that could impact the reporting unit. If management concludes, based on assessment of relevant events, facts, and circumstances, that it is more likely than not that a reporting unit's fair value is greater than its carrying value, no further impairment testing is required. If we determine, based on this assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying value, we perform a quantitative goodwill impairment test by comparing the reporting unit's fair value with its carrying value. An impairment loss is recognized for the amount by which the reporting unit's carrying value exceeds its fair value, up to the total amount of goodwill allocated to the reporting unit. No impairment loss is recognized if the fair value of the reporting unit exceeds its carrying value.
Current report
Valuation for Debt Modifications and Extinguishment
Current report
The Company enters into various amendments to our credit facility for additional loans used for working capital. Part of the amendments include fees that would be added and capitalized to the principal amount of the original loan. The Company is required to perform an analysis of the change in each amendment to determine whether the change represents a modification or an extinguishment of debt.
Current report
Under a modification, no gain or loss is recorded, and a new effective interest rate is established based on the carrying value of the debt and revised cash flow. If the debt is extinguished, the old debt is de-recognized and the new debt is recorded at fair value, which becomes the new carrying value. Significant, complex calculations are inherently required in determining the proper accounting treatment. For each amendment, we calculate the present value of the cash flows under the terms of the amendment, and determine if it is considered substantially different by at least a 10% difference from the present value of the remaining cash flow of the original debt instrument.
Current report
See Note 21, "Income Taxes" to the consolidated financial statements.
Removed paragraphs (63)
Previous report
Bright Mountain Media, Inc. (together with its wholly-owned subsidiaries, the “Company,” “Bright Mountain” or “we”) has an end-to-end digital media and advertising services platform that efficiently connects brands with targeted consumer demographics. We focus on digital publishing, advertising technology, consumer insights, creative and media services.
Previous report
On April 20, 2023, the Company completed the acquisition of two business units of Big Village (Big Village Insights, Inc. and Big Village Agency LLC (together, referred to as the "Big Village Entities")), for approximately $20.0 million, plus assumed liabilities, in an all-cash transaction funded by the Centre Lane Senior Secured Credit Facility (the "Big Village Acquisition").
Previous report
As part of the Big Village Acquisition, the Company formed BV Insights, LLC ("Insights") and Big Village Agency, LLC ("Agency"), to own the assets acquired in the transaction. In addition, letters of employment were extended to certain legacy employees of the Big Village Entities, resulting in the employment of an additional 203 employees on April 20, 2023.
Previous report
Other Developments
Previous report
There were no specific costs associated with these exits. At December 31, 2023, these two entities have not yet been dissolved.
Previous report
Key Factor Affecting Our Performance
Previous report
Our revenue showed an overall increase of $25.0 million, or 128%, for the year ended December 31, 2023, compared to the same period in 2022, which was driven by $31.0 million in revenue as a result of the Big Village Acquisition, and was partially offset by macroeconomic factors, coupled with an overall reduction in spending by some customers due to inflationary concerns, which led to lower than normal rates and lower earnings. The macroeconomic impacts significantly reduced direct sales by digital publishing customers as well as traffic on our website, which resulted in lower revenue in these divisions. In addition, some vendors have changed their platforms to favor short video and other "creator" content over news and media type content during 2023. These changes reduced visitors to our site and revenue in general.
Previous report
During the year ended December 31, 2023, approximately 100.0% of advertising technology revenue was generated in the U.S. and 0% was generated from our business in Israel, compared to 90% and 10% in the U.S. and Israel, respectively, for the same period in 2022. During the latter part of 2022, the Company started scaling down its operations in Israel and focused more on its U.S. market in advertising technology to capitalize on more attractive revenue streams. The loss of revenue in Israel is a contributor to lower than expected growth in revenue in this category during 2023. The Company subsequently closed operations in Israel in 2023.
Previous report
Consumer insights revenue, which is a new offering we acquired with the Big Village Acquisition, increased by $23.9 million, or 100%, for the year ended December 31, 2023 compared to the same period in 2022 and represented approximately 54% of the Company’s revenue for the year ended December 31, 2023.
Previous report
Creative services revenue, which we also acquired as part of the Big Village Acquisition, increased by $5.1 million, or 100%, for the year ended December 31, 2023 compared to the same period in 2022, and represented approximately 12% of the Company’s revenue for the year ended December 31, 2023.
Previous report
Costs of revenue increased $21.3 million, or 203%, for the year ended December 31, 2023, compared to the same period for 2022. This increase is mainly attributable to the acquisition of the Big Village Entities during the year ended December 31, 2023.
Previous report
Non-direct cost was $6.4 million for the year ended December 31, 2023 and represented 20% of overall cost of revenue for this period. These costs represent overall client service costs that are not specifically related to a particular project, but relate to services we acquired as part of our acquisition of the Big Village Entities.
Previous report
Personnel cost increased by approximately $3.4 million, or 51%, for the year ended December 31, 2023 compared to the same period in 2022. This change is mainly driven by an increase in head count as a result of the acquisition of the Big Village Entities.
Previous report
During the year ended December 31, 2023, the Company's headcount increased by a net amount of 136 employees, or 252%, mainly attributable to the Big Village Acquisition. Personnel cost for Big Village employees is allocated between cost of revenue and general and administrative expenses depending on their contribution to certain revenue generating projects.
Previous report
The overall increase in headcount during the year ended December 31, 2023, was partially offset by a reduction in the Company's headcount by 85 employees, including 54 employees that were terminated as a reduction in force. The Company incurred severance cost of approximately $389,000 in connection with this reduction. Approximately $75,000 is included in cost of revenue with the balance of $314,000 included in general and administrative cost.
Previous report
Legal fees increased by $750,000, or 325%, for the year ended December 31, 2023, compared to the same period in 2022. Approximately $711,000 of overall legal fees during 2023 represented costs associated with the Big Village Acquisition.
Previous report
The outstanding principal owed to Centre Lane Partners was $70.2 million and $33.1 million as of December 31, 2023 and 2022, respectively, which matures on April 20, 2026. Of the amount outstanding at December 31, 2023, $879,000, $3.0 million, $879,000 and $879,000 are due on March 31, 2024, June 30, 2024, September 30, 2024 and December 31, 2024, respectively. The balance of $64.6 million is due in 2025 or later.
Previous report
Interest is paid in kind at 12.39% per annum on approximately $34.1 million of the amount owed under the Credit Agreement, and at 15% per annum on $29.2 million of the amount owed under the Credit Agreement. With respect to the remaining $6.9 million owed under the facility, interest is paid in kind at 4% per annum and in cash at the SOFR plus 3.0% (for a total interest rate of 8.39% per annum at December 31, 2023).
Previous report
Effective July 1, 2024, the $34.1 million outstanding under the Centre Lane Senior Secured Credit Facility will bear interest at 7.0% per annum, plus the SOFR plus 5.0%.
Previous report
10% Convertible Promissory Note
Previous report
During November 2018, the Company issued a 10% convertible promissory note (the "Convertible Note") in the amount of $80,000 to the Chairman of the Board, a related party. The Convertible Note is unsecured, matured five years from issuance and was convertible at the option of the holder into shares of our common stock at any time prior to maturity at a conversion price of $0.40 per share. The outstanding principal and interest of the Convertible Note was due and payable in November 2023. At December 31, 2023, approximately $119,000 inclusive of principal and interest is due and payable, and the outstanding principal continues to accrue interest.
Previous report
For a full description of the Convertible Note, see Note 11, "10% Convertible Promissory Note" to the consolidated financial statements.
Previous report
Cash used in investing activities of$14,000 and$14,000 for theyear ended December 31, 2023, and 2022, respectively, was due entirely to the purchase of property and equipment.
Previous report
The preparation of financial statements in conformity with GAAP requires management to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of our unaudited consolidated financial statements as well as reported amounts of revenue and expenses during the periods presented. Our unaudited consolidated financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result.
Previous report
Significant estimates included in the accompanying consolidated financial statements include, valuation of goodwill and intangible assets, allowance for current expected credit losses, the determination of the relative selling prices of our services, percentage of completion for revenue recognition, estimates of amortization period for intangible assets, estimates of depreciation period for property and equipment, discount rates used in the valuation of right-of-use assets and lease liabilities, litigation reserves, the valuation of equity-based transactions, valuation of the Center Lane Senior Secured Facility carrying value regarding debt modification or extinguishment, and the valuation allowance on deferred tax assets.
Previous report
Critical accounting policies are those policies that management believes are very important to the portrayal of our financial position and results of operations, and that require management to make estimates that are difficult, subjective or otherwise complex. Based on these criteria, management has identified the following critical accounting policies:
Previous report
To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps:
Previous report
(i) identify the contract(s) with a customer;
Previous report
(ii) identify the performance obligations in the contract;
Previous report
(iii) determine the transaction price;
Previous report
(iv) allocate the transaction price to the performance obligations in the contract; and
Previous report
(v) recognize revenue when (or as) the Company satisfies a performance obligation.
Previous report
The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it provides to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the services promised within each contract and determines those that are performance obligations and assesses whether each promised service is distinct. The Company then recognizes revenue when (or as) the performance obligation is satisfied.
Previous report
The Company generates revenue as follows:
Previous report
•selling of advertisements placed on the Company’s owned and managed sites, as well as from advertisements placed on partner websites, for which the Company earns a share of the revenue;
Previous report
•facilitating the real-time buying and selling of advertisements at scale between networks of buyers, known as DSPs and sellers known as SSPs;
Previous report
•providing primary and secondary research, competitive intelligence and expert insight to address customer's strategic issues, where revenue is primarily derived from providing a single integrated service for research.
Previous report
There is no significant initial cost incurred to obtain contracts with customers.
Previous report
The Company records deferred revenue when cash payments are received in advance of performance obligations. The Company expects to recognize the deferred revenue in the following period when it transfers its services and, therefore, satisfies its performance obligation to the customer.
Showing the first 40 of 63 passages. Open the source sections for the rest.
Reworded paragraphs (38)
Previous wording
Our consumer insights division focuses on providing primary and secondary research, competitive intelligence, and expert insight to address customers' strategic issues. We provide cutting-edge and dynamic research, offering clients a comprehensive perspective on their consumers. This insight extends to strategic guidance on the optimal timing and channels to effectively connect with target audiences. Our cutting-edge approach combines advanced data analytics, artificial intelligence, and comprehensive market research, to uncover actionable insights that drive informed decision-making.
Current wording
Our consumer insights division focuses on providing primary and secondary research and competitive intelligence to address customers' strategic issues. We provide cutting-edge and dynamic research, offering clients a comprehensive perspective on their consumers. This insight extends to strategic guidance on the optimal timing and channels to effectively connect with target audiences. Our cutting-edge approach combines advanced data analytics, artificial intelligence, and comprehensive market research, to uncover actionable insights that drive informed decision-making.
Previous wording
Our media services division focuses on advertisers and agencies by providing access to premium inventory, leveraging data to optimize programmatic campaigns. Our aim is to empower clients to access the most sought-after advertising spaces across diverse platforms tailored to their specific needs and preferences. Our data-driven approach ensures that ad placements are not only well-targeted, but also continuously optimized for maximum efficiency and ROI. Our commitment to combining premium inventory access with data-driven programmatic campaign optimization makes us an indispensable partner in the success of our clients' advertising and marketing endeavors.
Current wording
Our media services division focuses on advertisers and agencies by providing access to premium inventory, leveraging data to optimize programmatic campaigns. Our aim is to empower clients to access the most sought-after advertising spaces across diverse platforms tailored to their specific needs and preferences. Our data-driven approach aims to ensure that ad placements are not only well-targeted, but also continuously optimized for maximum efficiency and ROI. Our commitment to combining premium inventory access with data-driven programmatic campaign optimization makes us a valuable partner in the success of our clients' advertising and marketing endeavors.
Previous wording
•serving advertisers through providing access to premium resources and leveraging data to optimize programmatic campaigns, where revenue is derived from the planning and execution of creative and media marketing campaigns; and
Current wording
serving advertisers through providing access to premium resources and leveraging data to optimize programmatic campaigns, where revenue is derived from the planning and execution of creative and media marketing campaigns;
Previous wording
•providing primary and secondary research, competitive intelligence, and expert insights to address customers' strategic issues, where revenue is primarily derived from providing a single integrated service for such research.
Current wording
providing primary and secondary research, competitive intelligence, and expert insights to address customers' strategic issues, where revenue is primarily derived from providing a single integrated service for such research; and
Previous wording
During 2022, the Company began scaling down its operations of Slutzky & Winshman Ltd, a digital media company located in Israel that was acquired in August 2019. This decision was made after a consistent decline in revenue. In 2023, we terminated operations in Israel and all employees were terminated.
Current wording
During 2022, the Company began scaling down its operations of Slutzky & Winshman Ltd, a digital media company located in Israel that was acquired in August 2019. In 2023, we terminated operations in Israel and all employees were terminated. Also in 2023, we terminated the operation of News Distribution Network, Inc., a newspaper technology company, which we also acquired in 2019, and subsequently rebranded this service as Mediahouse. During 2024, we terminated the operation of Wild Sky Media Co Ltd., located in Thailand, and all employees were terminated. At December 31, 2024, these three entities have not yet been dissolved.
Previous wording
Limited Number of Customers. During the years ended December 31, 2023, and 2022, two and one customer(s) represented 23.0% and 37.7% of revenue, respectively. The loss of either of these customers could have a material adverse impact on our results of operations in future periods.
Current wording
Limited Number of Customers. For the year ended December 31, 2024, one customer represented 12.2% of our revenue, and for the year ended December 31, 2023, two customers represented 13.0% and 10.0% of our revenue, respectively. The loss of either of these customers could have a material adverse impact on our results of operations in future periods.
Previous wording
•serving advertisers through providing access to premium resources and leveraging data to optimize programmatic campaigns, where revenue is derived from the planning and execution of creative and media marketing campaigns; and
Current wording
serving advertisers through providing access to premium resources and leveraging data to optimize programmatic campaigns, where revenue is derived from the planning and execution of creative and media marketing campaigns;
Previous wording
•providing primary and secondary research, competitive intelligence, and expert insights to address customers' strategic issues, where revenue is primarily derived from providing a single integrated service for such research.
Current wording
providing primary and secondary research, competitive intelligence, and expert insights to address customers' strategic issues, where revenue is primarily derived from providing a single integrated service for such research; and
Previous wording
Revenue increased approximately $25.0 million, or 128%, for the year ended December 31, 2023 when compared to the same period in 2022. See below for a detailed analysis of revenue for the years ended December 31, 2023, and 2022.
Current wording
Revenue increased approximately $12.1 million, or 27%, for the year ended December 31, 2024 when compared to the same period in 2023. See below for a detailed analysis of revenue for the years ended December 31, 2024, and 2023.
Previous wording
Cost of revenue increased approximately $21.3 million, or 203%, for the year ended December 31, 2023 compared to 2022. See below for a detailed analysis of cost of revenue for the years ended December 31, 2023, and 2022.
Current wording
Cost of revenue increased approximately $8.4 million, or 27%, for the year ended December 31, 2024 compared to 2023. See below for a detailed analysis of cost of revenue for the years ended December 31, 2024, and 2023.
Previous wording
General and administrative expenses increased approximately $8.4 million, or 59%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. See below for a detailed analysis of general and administrative expenses for the years ended December 31, 2023 and 2022.
Current wording
General and administrative expenses decreased approximately $1.1 million, or 5%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. See below for a detailed analysis of general and administrative expenses for the years ended December 31, 2024 and 2023.
Previous wording
Impairment of goodwill and intangibles increased approximately $17.1 million, or 100%, for the for the year ended December 31, 2023 compared to 2022.
Current wording
Impairment of goodwill and intangibles decreased approximately $17.1 million, or 100%, for the for the year ended December 31, 2024 compared to 2023.
Previous wording
Net loss from operations for the year ended December 31, 2023 was $35.6 million as compared to a net loss of $8.1 million for the year ended December 31, 2022. The following is our analysis for the period.
Current wording
Net loss from operations for the year ended December 31, 2024 was $17.0 million as compared to a net loss of $35.6 million for the year ended December 31, 2023. The following is our analysis for the period.
Previous wording
The Company focuses on digital publishing, advertising technology, consumer insights, creative and media services. Revenue generated by each division is set forth below:
Current wording
Our revenue increased by $12.1 million, or 27%, for the year ended December 31, 2024, compared to the same period in 2023. For the year ended December 31, 2024, revenue includes $36.5 million, which represents the impact of the Big Village Acquisition, completed in April 2023. This compares to $31.0 million for the same period in 2023. The Company focuses on digital publishing, advertising technology, consumer insights, creative services, and media services. Changes in revenue generated by each such division are set forth below:
Previous wording
Digital publishing revenue decreased by $3.9 million, or 49%, for the year ended December 31, 2023 compared to the same period for 2022. Approximately $4.1 million, or 9%, of the Company’s revenue for the year ended December 31, 2023 was generated from our digital publishing customers compared to $8.0 million, or 41%, for the same period in 2022. This division was significantly impacted by macroeconomic factors, which reduced traffic to our website, coupled with an overall reduction in spending by some customers related to inflationary concerns and reduction in website traffic.
Current wording
Digital publishing revenue decreased by $2.4 million, or 58%, for the year ended December 31, 2024 compared to the same period of 2023. Approximately $1.7 million, or 3%, of the Company’s revenue for the year ended December 31, 2024 was generated from our digital publishing customers compared to $4.1 million, or 9%, for the same period in 2023. This division was significantly impacted by macroeconomic factors, which reduced traffic to our website, coupled with an overall reduction in spending by some customers related to inflationary concerns and reduction in website traffic.
Previous wording
Advertising technology revenue decreased by $2.1 million, or 18%, for the year ended December 31, 2023 compared to the same period for 2022. Approximately $9.5 million, or 21%, of the Company’s revenue for the year ended December 31, 2023 was generated from our advertising technology customers compared to $11.5 million, or 59%, for the same period in 2022.
Current wording
Advertising technology revenue increased by $9.0 million, or 95%, for the year ended December 31, 2024 compared to the same period of 2023. Approximately $18.4 million, or 33%, of the Company’s revenue for the year ended December 31, 2024 was generated from our advertising technology customers compared to $9.5 million, or 21%, for the same period in 2023. This growth was driven by our ability to leverage our resources to attract top advertisers, which in turn has allowed us to onboard premium publishers. This led to an increase in volume, as well as rates and overall revenue.
Previous wording
Media services revenue, which we also acquired as part of the Big Village Acquisition, increased by $2.0 million, or 100%, for the year ended December 31, 2023 compared to the same period in 2022, and represented approximately 4% of the Company’s revenue for the year ended December 31, 2023.
Current wording
Media services revenue increased by $467,000, or 24%, for the year ended December 31, 2024 compared to the same period in 2023, and represented approximately 4% of the Company’s revenue for the year ended December 31, 2024.
Previous wording
Direct salaries and labor cost was $7.4 million for the year ended December 31, 2023, and represented 23% of overall cost of revenue for this period. These costs represent salary and labor cost of employees that work directly on customer projects for our consumer insights, creative and media services, which divisions we acquired as part of our acquisition of the Big Village Entities.
Current wording
Direct salaries and labor cost increased $202,000, or 3% for the year ended December 31, 2024 when compared to the same period in 2023. Approximately $7.6 million, or 19%, of the Company's cost of revenue for the year ended December 31, 2024 was a result of direct salaries and labor cost, compared to $7.4 million, or 23% for the same period in 2023. These costs represent salary and labor cost of employees that work directly on customer projects for our consumer insights, creative services, and media services divisions.
Previous wording
Direct project cost was $10.2 million for the year ended December 31, 2023, and represented 32% of overall cost of revenue for this period. These costs include payments made to third-parties that are directly attributable to the completion of projects that allow for revenue recognition for our consumer insights, creative and media services, which divisions we acquired as part of our acquisition of the Big Village Entities.
Current wording
Direct project cost increased $1.5 million, or 14% for the year ended December 31, 2024 when compared to the same period in 2023. Approximately $11.7 million, or 29%, of the Company's cost of revenue for the year ended December 31, 2024, was a result of direct project cost compared to $10.2 million, or 32%, for the same period in 2023. As discussed above, the Big Village Acquisition, which was completed in April 2023, is the main driver of the increase in direct project cost for the year ended December 31, 2024. These costs include payments made to third-parties that are directly attributable to the completion of projects that allow for revenue recognition for our consumer insights, creative services, and media services divisions.
Previous wording
Publisher cost was $5.9 million, which represents 18% of overall cost of revenue, and $6.0 million, or 57%, of overall cost of revenue, for the years ended December 31, 2023 and 2022, respectively. We experienced a decrease of $90,000, or 2%, for the year ended December 31, 2023 compared to the same period in 2022. These costs represent payments to media providers and website publishers.
Current wording
Publisher cost was $12.4 million, which represents 31% of overall cost of revenue, and $5.9 million, or 18%, of overall cost of revenue for the years ended December 31, 2024 and 2023, respectively. We experienced an increase of $6.5 million, or 111%, for the year ended December 31, 2024 compared to the same period in 2023. This increase is consistent with the increase noted in revenue for our advertising technology division. These costs represent payments to media providers and website publishers which drive revenue for our advertising technology division.
Previous wording
Gross margin was $12.8 million, and $9.1 million for the years December 31, 2023 and 2022. Our gross margin increased $3.7 million or 41% for the year ended December 31, 2023, when compared to the same period for 2022 Gross margin as a percentage of revenue decreased to 29% for the year ended December 31, 2023 compared to 46% for the same period of 2022.
Current wording
Gross margin was $16.5 million, and $12.8 million for the years December 31, 2024 and 2023. Our gross margin increased $3.7 million or 29% for the year ended December 31, 2024, when compared to the same period for 2023. Gross margin as a percentage of revenue remained consistent at 29% for both years ended December 31, 2024 and 2023.
Previous wording
General and administrative expenses increased $8.4 million, or 59%, for the year ended December 31, 2023, compared to the same period in 2022. The increase is due to a combination of factors as discussed below.
Current wording
General and administrative expenses decreased $1.1 million, or 5%, for the year ended December 31, 2024, compared to the same period in 2023. The decrease is due to a combination of factors as discussed below.
Previous wording
The Company incurred severance cost of approximately $50,000 associated with a headcount reduction during the same period for 2022.
Current wording
The Company incurred severance cost of approximately $389,000 associated with a headcount reduction during the same period for 2023. We had 119 total employees as of December 31, 2024, compared to 190 total employees as of December 31, 2023.
Previous wording
Professional fees increased by $1.5 million, or 45%, during the year ended December 31, 2023, when compared to the same period in 2022. Approximately $1.5 million of overall professional fees during 2023 represented costs associated with the Big Village Acquisition.
Current wording
Professional fees decreased by $1.2 million, or 25%, during the year ended December 31, 2024, when compared to the same period in 2023. Approximately $1.5 million of overall professional fees during 2023 represented costs associated with the Big Village Acquisition that were one-time in nature, and were not repeated during the current year.
Previous wording
During the year ended December 31, 2023, the Company performed an impairment assessment on goodwill and intangibles for the Ad Network, Owned & Operated, and Insights reporting units. The assessment indicated that the carrying value was in excess of its implied fair value for the Ad Network and Owned & Operated reporting units, resulting in an impairment charge of $14.1 million and $2.9 million for goodwill and intangibles, respectively. There was no such charge for the same period in 2022. See Note 6, "Intangible Assets, Net", and Note 7, "Goodwill", to the consolidated financial statements.
Current wording
During the year ended December 31, 2023, the Company performed an impairment assessment on goodwill and intangibles for the Ad Network, Owned & Operated, and Insights reporting units. The assessment indicated that the carrying value was in excess of its implied fair value for the Ad Network and Owned & Operated reporting units, resulting in an impairment charge of $14.1 million and $2.9 million for goodwill and intangibles, respectively. There was no such charge for the same period in 2024, after performing an impairment assessment on goodwill and intangibles for the Ad Network, Owned & Operated, and Insights reporting units. See Note 6, "Intangible Assets, Net", and Note 7, "Goodwill", to the consolidated financial statements.
Previous wording
Financing expense increased $5.7 million, or 186%, for the year ended December 31, 2023, compared to the same period in 2022. This increase was largely attributable to a $4.9 million increase in interest expense related to the Centre Lane Senior Secured Credit Facility, which reflected higher principal and fees as a result of amendments to the Centre Lane Senior Secured Credit Facility during the year ended December 31, 2022 through the year ended December 31, 2023. In 2022, total financing expense was offset by a reduction in the Paycheck Protection Program ("PPP") loan forgiveness of $1.1 million.
Current wording
Financing expense increased $3.4 million, or 38%, for the year ended December 31, 2024, compared to the same period in 2023. This increase was largely attributable to a $3.5 million increase in interest expense related to the Centre Lane Senior Secured Credit Facility, which reflected higher principal and fees as a result of amendments to the Centre Lane Senior Secured Credit Facility during the year ended December 31, 2024.
Previous wording
As of December 31, 2023, we had a cash balance of $4.0 million compared with a cash balance of $316,000 as of December 31, 2022. The Company’s liquidity needs, and a discussion of how it intends to meet those needs, is discussed below. See –“Going Concern.”
Current wording
As of December 31, 2024, we had a cash balance of $2.5 million and a restricted balance of $1.9 million, compared with a cash balance of $4.0 million as of December 31, 2023. The Company’s liquidity needs, and a discussion of how it intends to meet those needs, is discussed below. See –“Going Concern.”
Previous wording
During the year ended December 31, 2023 and 2022, the Company received $8.6 million and $3.1 million, respectively, in debt financing from the Centre Lane Senior Secured Financing Facility. The use of the funds was for general working capital needs and to fund the Big Village Acquisition.
Current wording
During the year ended December 31, 2024 and 2023, the Company received $1.9 million and $8.6 million, respectively, in debt financing from the Centre Lane Senior Secured Credit Facility. We used these funds to secure a bond in connection with our appeal of the Ladenburg litigation during 2024, and to fund the Big Village Acquisition in 2023.
Previous wording
Historically, the Company has incurred losses, which has resulted in an accumulated deficit of approximately $149.8 million as of December 31, 2023. Cash flows used in operating activities were $4.7 million and $3.1 million for the years ended December 31, 2023, and 2022, respectively. As of December 31, 2023, the Company had a working capital deficit of approximately $11.1 million, inclusive of $4.0 million in cash and cash equivalents.
Current wording
Historically, the Company has incurred losses, which has resulted in an accumulated deficit of approximately $166.9 million as of December 31, 2024. Cash flows provided by (used in) operating activities were $1.9 million and $(4.7) million for the years ended December 31, 2024, and 2023, respectively. As of December 31, 2024, the Company had a working capital deficit of approximately $13.5 million, inclusive of $2.5 million in cash and cash equivalents and $1.9 million in restricted cash.
Previous wording
The Company’s ability to continue as a going concern is dependent upon its ability to meet its liquidity needs through a combination of factors. During the next year, we anticipate that we will need approximately $8.6 million to meet our contractual obligations in addition to amounts needed for our working capital needs. The Company is currently exploring several strategic alternatives, including restructuring or refinancing its debt, or seeking additional debt, including borrowing under the Centre Lane Senior Secured Credit Agreement or raising equity capital. The ability to access the capital markets is also dependent upon the volume and market price of the Company's stock, which cannot be assured. Other measures include reducing or delaying certain business activities, or reducing general and administrative expenses, including a reduction in headcount. The ultimate success of these plans is not guaranteed.
Current wording
The Company’s ability to continue as a going concern is dependent upon its ability to meet its liquidity needs through a combination of factors. During the next year, we anticipate that we will need approximately $3.9 million to meet our contractual obligations in addition to amounts needed for our working capital needs. The Company is currently exploring several strategic alternatives, including restructuring or refinancing its debt, or seeking additional debt, including borrowing under the Centre Lane Senior Secured Credit Agreement or raising equity capital. The ability to access the capital markets is also dependent upon the volume and market price of the Company's stock, which cannot be assured. Other measures include reducing or delaying certain business activities, or reducing general and administrative expenses, including a reduction in headcount. The ultimate success of these plans is not guaranteed.
Previous wording
On June 5, 2020, the Company and its subsidiaries entered into to the Amended and Restated Senior Secured Credit Agreement between themselves, the lenders party thereto and Centre Lane Partners Master Credit Fund II, L.P., as Administrative Agent and Collateral Agent (“Centre Lane Partners”), as amended (the “Credit Agreement”). The Credit Agreement has been amended numerous times to change the terms, including the amounts outstanding, the interest rate, the maturity date and other payment terms.
Current wording
On June 5, 2020, the Company and its subsidiaries entered into to the Amended and Restated Senior Secured Credit Agreement between themselves, the lenders party thereto (the "Lenders") and Centre Lane Partners Master Credit Fund II, L.P., as Administrative Agent and Collateral Agent (“Centre Lane Partners”), as amended (the “Credit Agreement”). The Credit Agreement has been amended numerous times to change the terms, including the amounts outstanding, the interest rate, the maturity date and other payment terms.
Previous wording
The amount due under the Credit Agreement bears interest of 7.0% per annum plus the Secured Overnight Financing Rate ("SOFR"). At December 31, 2023, the SOFR was 5.39%, thus the overall interest rate on this facility was 12.39% per annum at December 31, 2023.
Current wording
The amount due under the Credit Agreement bears interest at 7.0% per annum plus the Secured Overnight Financing Rate ("SOFR"). At December 31, 2024, the SOFR was 4.71%, thus the overall interest rate on this facility was 11.71% per annum at December 31, 2024.
Previous wording
$1.6 million for amortization of intangible assets, $1.2 million of amortization of debt discount, $144,000 of stock-based compensation expense, $89,000 of stock compensation for the Oceanside shares, $84,000 for the allowance for expected credit losses, $1.1 million from the gain on forgiveness of PPP loans and a $121,000 net change in operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities were a $119,000 decrease in accounts receivable, a $695,000 increase in prepaid and other current assets, a $487,000 decrease in accounts payable and accrued expenses, a $698,000 increase in other liabilities, a $466,000 decrease in interest payable on the Centre Lane Senior Secured Credit Facility, and a $426,000 decrease in deferred revenue.
Current wording
For the year ended December 31, 2024, cash provided by operating activities was $1.9 million. The primary factors affecting our operating cash flows during the period were our net loss of $17.0 million, adjusted for non-cash charges of $1.9 million for amortization of intangible assets, $2.7 million of amortization of debt discount, $9.4 million in interest paid in kind on the Centre Lane Senior Secured Credit Facility, $254,000 for stock option compensation expense, and a $4.4 million net change in operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities were a $1.7 million decrease in deferred revenue, a $369,000 decrease in accounts receivable, a $198,000 decrease in prepaid expenses and other current assets, a $5.2 million increase in accounts payable and accrued expenses, and a $1.2 million increase in other liabilities.
Previous wording
During the year ended December 31, 2023 and 2022, the Company drew $8.6 million and $3.1 million, respectively, of debt financing from the Centre Lane Senior Secured Credit Facility, which was primarily used for working capital needs, which increased as a result of the Big Village Acquisition, offset by a $270,000 and $0 repayment of principal on the Centre Lane Senior Secured Credit Facility during the year ended December 31, 2023 and 2022, respectively.
Current wording
During the year ended December 31, 2023, the Company drew $8.4 million of debt financing from the Centre Lane Senior Secured Credit Facility, which was primarily used to fund our working capital needs.
Previous wording
All of the items included in the reconciliation fromnet loss before taxesto EBITDA and from EBITDA to Adjusted EBITDA are either (i) non-cash items (e.g., depreciation, amortization of purchased intangibles, stock-based compensation, etc.) or (ii) items that management does not consider to be useful in assessing the Company's ongoing operating performance (e.g., M&A costs, income taxes, gain on sale of investments, loss on disposal of assets, etc.). In the case of the non-cash items, management believes that investors can better assess the Company's operating performance if the measures are presented without such items because, unlike cash expenses, these adjustments do not affect the Company's ability to generate free cash flow or invest in its business.
Current wording
All of the items included in the reconciliation from net loss before taxes to EBITDA and from EBITDA to Adjusted EBITDA are either (i) non-cash items (e.g., depreciation, amortization of purchased intangibles, stock-based compensation, etc.) or (ii) items that management does not consider to be useful in assessing the Company's ongoing operating performance (e.g., M&A costs, income taxes, gain on sale of investments, loss on disposal of assets, etc.). In the case of the non-cash items, management believes that investors can better assess the Company's operating performance if the measures are presented without such items because, unlike cash expenses, these adjustments do not affect the Company's ability to generate free cash flow or invest in its business.
Previous wording
Digital publishing and advertising technology revenues are generated by audiences seeing or clicking on digital advertisements utilizing several advertising partners. The Company recognizes revenue once the performance obligation is satisfied at a point in time, on a gross basis, net of adjustments based on the number of advertisements delivered. Customers are billed monthly or billing is generated via custom content production and extensions on our social media platforms.
Current wording
Digital publishing and advertising technology revenues are generated by audiences seeing or clicking on digital advertisements utilizing several advertising partners. The Company recognizes revenue once the performance obligation is satisfied at a point in time, on a gross basis, net of adjustments based on the number of advertisements delivered.
Previous wording
A qualitative assessment includes consideration of the economic, industry, and market conditions in addition to the overall financial performance of the Company and these assets. If our qualitative assessment does not conclude that it is more likely than not that the estimated fair value of the reporting unit is greater than the carrying value, we perform a quantitative analysis. In a quantitative test, the fair value of a reporting unit is determined based on a discounted cash flow analysis and further analyzed using other methods of valuation. A discounted cash flow analysis requires us to make various assumptions, including assumptions about future cash flows, growth rates and discount rates. The assumptions about future cash flows and growth rates are based on our long-term projections. Assumptions used in our impairment testing are consistent with our internal forecasts and operating plans. Our discount rate is based on our debt structure, adjusted for current market conditions. If the fair value of the reporting unit exceeds its carrying amount, there is no impairment. To the extent the carrying amount exceeds its fair value, an impairment charge of the reporting unit’s goodwill would be necessary. See Note 7, Goodwill to the consolidated financial statements for details regarding goodwill impairment.
Current wording
See Note 7, "Goodwill" to the consolidated financial statements for details regarding goodwill impairment.
Previous wording
Consistent with FASB Accounting Standards Codification No. 280, Segment Reporting (ASC 280), our Chief Financial Officer reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. Our components are digital publishing, advertising technology, consumer insights, creative and media services. There are no segment managers who are held accountable by the Chief Financial Officer, or anyone else, for operations, operating results and planning for levels or components below the consolidated unit level. Accordingly, we determined we have one operating and reportable segment.
Current wording
Consistent with FASB Accounting Standards Codification No. 280, Segment Reporting (ASC 280), our Chief Financial Officer reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. Our components are digital publishing, advertising technology, consumer insights, creative services, and media services. There are no segment managers who are held accountable by the Chief Financial Officer, or anyone else, for operations, operating results and planning for levels or components below the consolidated unit level. Accordingly, we determined we have one operating and reportable segment.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
See Note 10, "Centre Lane Senior Secured Credit Facility" to the consolidated financial statements.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
Also in 2023, we terminated the operation of News Distribution Network, Inc., a newspaper technology company, which we also acquired in 2019, and subsequently rebranded this service as Mediahouse, also as a result of a declining revenue stream.
Previous report — wording carried elsewhere
We had 190 total employees as of December 31, 2023, compared to 54 total employees as of December 31, 2022.
Previous report — wording carried elsewhere
For the year ended December 31, 2022, cash used in operating activities was $3.1 million. The primary factors affecting our operating cash flows during the period were our net loss of $8.1 million, adjusted for non-cash charges of
Previous report — wording carried elsewhere
•serving advertisers and agencies by providing access to premium resources and leveraging data to optimize programmatic campaigns, where revenue is derived from the planning and execution of creative and media marketing campaigns; and
Previous report — wording carried elsewhere
Cost of revenue includes internal labor and payment to third parties for services performed to drive revenue, which includes the publisher cost paid for ad exchange on third party sites, advertising fees, personnel costs, technology and data related costs, fees paid for content creation, influencers, writers and sales commission.