Bright Mountain Media, Inc.
For the period ended Mar 31, 2025. Filed May 12, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 12, 2025
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0000950170-24-125527
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-12.
0000950170-25-069144
Item 2. 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 145 previous paragraphs and 110 current paragraphs.
52 unchanged; 40 reworded; 18 added; 50 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 14 previous and 9 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 (18)
Current report
Revenue increased $1.7 million, or 14%, for the three months ended March 31, 2025, compared to the same period in 2024. See below for a detailed analysis of revenue for the three months ended March 31, 2025, and 2024.
Current report
Cost of Revenue
Current report
General and Administrative Expenses
Current report
Digital publishing revenue increased by $149,000, or 34%, for the three months ended March 31, 2025, compared to the same period in 2024. Approximately $583,000, or 4%, of the Company’s revenue for the three months ended March 31, 2025, was generated from our digital publishing customers, compared to $434,000, or 3%, for the same period in 2024. This increase reflects a one-time payment that is non-recurring in nature, and which we received on account of a contract that has ended.
Current report
Cost of Revenue
Current report
General and Administrative Expenses
Current report
Legal Fees
Current report
Legal fees increased by $173,000, or 62%, for the three months ended March 31, 2025, compared to the same period in 2024. 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 16, Commitments and Contingencies, to the consolidated financial statements.
Current report
Data processing decreased by $110,000, or 27%, for the three months ended March 31, 2025, compared to the same period in 2024. This reduction is due largely to the reclassification of certain components of data processing costs from data processing to website expenses.
Current report
Financing Expense (Income)
Current report
As of March 31, 2025, Centre Lane Partners has loaned the Company $38.9 million through Amendments One through Eight (the "Second Out Loans"), Amendments Nine through Sixteen (the "First Out Loans"), and Amendments Seventeen, Twenty-One, and Twenty-Two (the "Third Out Loans").
Current report
Effective March 31, 2025, the Company, the Lenders, and Centre Lane Partners entered into the Twenty-Second Amendment to the Credit Agreement, pursuant to which the following adjustments were made to the outstanding loans as follows:
Current report
Extending the maturity date of the First Out Loans (which no longer include the Seventeenth Amendment Term Loans and the Twenty-First Amendment Term Loans), Second Out Loans (formerly defined as the Last Out Loans), and Third Out Loans (comprised of the Seventeenth Amendment Term Loans and the Twenty-First Amendment Term Loans) from April 20, 2026 to December 20, 2026;
Current report
Changing the Second Out Loans PIK rate to the Term Secured Overnight Financing Rate (“SOFR”) plus 3% and the Second Out loans cash interest rate to 2%;
Current report
Changing the First Out Loans cash interest rate to the Term SOFR plus 2%;
Current report
Changing the Third Out Loans PIK rate to 15%;
Current report
Adjusting the amortization of the Second Out Loans such that quarterly installments of 1% of the aggregate principal amount (after giving effect to capitalized PIK interest) are paid for each quarter in 2025, and quarterly installments of 2% of the aggregate principal amount (after giving effect to capitalized PIK interest) are paid thereafter until maturity; and
Current report
Adjusting the amortization of the First Out Loans such that an installment of $700,000 is paid on March 31, 2025, and quarterly installments of $575,000 are paid thereafter until maturity.
Removed paragraphs (50)
Previous report
During the year ended December 31, 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")), in an all-cash transaction funded by the Centre Lane Senior Secured Credit Facility (the "Big Village Acquisition").
Previous report
the selling of advertisements placed on our owned and managed sites and on partner websites where we earn a share of the revenue;
Previous report
facilitating the seamless, real-time exchange of advertisements on a large scale, bridging networks of buyers (referred to as "DSPs") and networks of sellers (referred to as "SSPs");
Previous report
the selling of advertisements placed on our owned and managed sites and on partner websites where we earn a share of the revenue;
Previous report
facilitating the seamless, real-time exchange of advertisements on a large scale, bridging networks of buyers (referred to as "DSPs") and networks of sellers (referred to as "SSPs");
Previous report
Revenue decreased $1.1 million or 7%, for the three months ended September 30, 2024, compared to the same period in 2023. Revenue increased $10.2 million, or 35%, for the nine months ended September 30, 2024, compared to the same period in 2023. See below for a detailed analysis of revenue for the three and nine months ended September 30, 2024, and 2023.
Previous report
Digital publishing revenue decreased by $0.5 million, or 50%, for the three months ended September 30, 2024,compared to the same period in 2023. Approximately $0.5 million, or 4%, of the Company’s revenue for the three months ended September 30, 2024, was generated from our digital publishing customers, compared to $1.0 million, or 7%, 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 report
Consumer insights revenue decreased by $1.2 million or 16%, for the three months ended September 30, 2024, compared to the same period in 2023. Approximately $6.8 million, or 48%, of the Company’s revenue for the three months ended September 30, 2024 was generated from our consumer insights customers compared to $8.0 million, or 52%, for the same period in 2023. This decrease was primarily related to the slowdown of Altria product testing, resulting in a negative revenue impact.
Previous report
Professional Fees
Previous report
Professional fees increased by $1.4 million, or 224%, for the three months ended September 30, 2024, compared to the same period in 2023. This increase is mainly driven by an increase in legal fees related to the Ladenburg litigation as discussed in Note 17 above.
Previous report
Data processing increased by $38,000, or 17%, for the three months ended September 30, 2024, compared to the same period in 2023.
Previous report
Impairment of Goodwill and Intangibles
Previous report
During the three months ended September 30, 2023, the Company performed an assessment of its goodwill and intangible assets. The assessment indicated that the carrying value was in excess of its implied fair value, resulting in an impairment charge of $13.7 million and $2.5 million for goodwill and intangibles, respectively. There was no impairment recorded for the same period of 2024.
Previous report
Financing and Other Expense, Net
Previous report
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
Previous report
Net loss from operations for the nine months ended September 30, 2024 was $4.0 million as compared to a net loss of $23.8 million for the same period in 2023. The following is our analysis for the period.
Previous report
Revenue
Previous report
Our revenue increased by $10.2 million, or 35%, for the nine months ended September 30, 2024 compared to the same period in 2023. For the nine months ended September 30, 2024, revenue includes $27.3 million, which represents the impact of the Big Village Acquisition, which was completed in April 2023. This compares to $19.8 million for the same period in 2023. Changes in revenue generated by each such division are set forth below:
Previous report
Digital publishing revenue decreased by $2.0 million, or 57%, for the nine months ended September 30, 2024, compared to the same period in 2023. Approximately $1.5 million, or 4%, of the Company’s revenue for the nine months ended September 30, 2024, was generated from our digital publishing customers compared to $3.4 million, or 12%, 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 report
Creative services revenue increased by $1.8 million or 53%, for the nine months ended September 30, 2024, compared to the same period in 2023. Approximately $5.3 million, or 13% of the Company’s revenue for the nine months ended September 30, 2024, was generated from our creative services customers compared to $3.5 million, or 12%, for the same period in 2023. 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 nine months ended September 30, 2024.
Previous report
Media services revenue increased by $366,000 or 26%, for the nine months ended September 30, 2024, compared to the same period in 2023. Approximately $1.8 million, or 5%, of the Company’s revenue for the nine months ended September 30, 2024, was generated from our media services customers compared to $1.4 million, or 5%, for the same period in 2023. As discussed above, the Big Village Acquisition was completed in April 2023, and is the main driver of the increase in media services revenue for the nine months ended September 30, 2024.
Previous report
Cost of revenue increased $6.6 million, or 30%, for the nine months ended September 30, 2024, compared to the same period of 2023. For the nine months ended September 30, 2024, cost of revenue includes $20.3 million, or 71% from the impact of the Big Village Acquisition, which was completed in April 2023. This compares to $16.5 million, or 75%, for the same period in 2023. As a result, the Big Village Acquisition is the main driver of the increase in cost of revenue for the nine months ended September 30, 2024.
Previous report
Direct Salaries and Labor Cost
Previous report
Direct salaries and labor cost increased $415,000, or 8%, for the nine months ended September 30, 2024, when compared to the same period in 2023. Approximately $5.1 million, or 20%, of the Company's cost of revenue for the nine months ended September 30, 2024 was a result of direct salaries and labor cost compared to $5.2 million, or 24%, 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 salaries and labor cost for the nine months ended September 30, 2024. These costs represent salary and labor cost of employees that work directly on customer projects for our consumer insights, creative and media services divisions.
Previous report
Direct Project Cost
Previous report
Direct project cost increased $3.1 million, or 52%, for the nine months ended September 30, 2024 when compared to the same period in 2023. Approximately $9.2 million, or 32%, of the Company's cost of revenue for the nine months ended September 30, 2024, was a result of direct project cost compared to $6.1 million, or 27%, 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 nine months ended September 30, 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 and media services divisions.
Previous report
Non-Direct Project Cost
Previous report
Non-direct project cost increased $187,000, or 4%, for the nine months ended September 30, 2024, when compared to the same period in 2023. Approximately $5.5 million, or 19%, of the Company's cost of revenue for the nine months ended September 30, 2024, was a result of non-direct project cost compared to $6.1 million, or 24%, 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 non-direct project cost for the nine months ended September 30, 2024. These costs represent overall client service costs that are not specifically related to a particular project.
Previous report
Publisher Cost
Previous report
Gross Margin
Previous report
General and administrative expenses increased by $43,000 for the nine months ended September 30, 2024, compared to the same period in 2023. The increase is primarily due to a combination of factors as discussed below:
Previous report
Personnel Cost
Previous report
Personnel cost increased by $734,000, or 12%, for the nine months ended September 30, 2024 compared to the same period in 2023. The Company reduced its head count by 47 employees, including 22 employees that were terminated as a reduction in force. The Company incurred severance cost of approximately $93,000 in connection with this reduction. The Company incurred severance cost of approximately $322,000 associated with a head count reduction during the same period for 2023.
Previous report
Professional Fees
Previous report
Professional fees decreased by $530,000 or 18% for the nine months ended September 30, 2024, compared to the same period in 2023. $685,000 of professional fees for the nine months ended September 30, 2023 represented costs associated with the Big Village Acquisition.
Previous report
Data Processing
Previous report
Data processing increased by $550,000, or 130%, for the nine months ended September 30, 2024, compared to the same period of 2023. As discussed above, the Big Village Acquisition was completed in April 2023, and contributed to data processing for six months of the prior period and for the full nine months of the current period, and is the main driver of the increase in data processing for the nine months ended September 30, 2024.
Previous report
Impairment of Goodwill and Intangibles
Previous report
During the nine months ended September 30, 2023, the Company performed an assessment of its goodwill and intangible assets. The assessment indicated that the carrying value was in excess of its implied fair value, resulting in an impairment charge of $13.7 million and $2.5 million for goodwill and intangibles, respectively. There was no impairment recorded for the same period of 2024.
Previous report
Financing and Other Expense, Net
Showing the first 40 of 50 passages. Open the source sections for the rest.
Reworded paragraphs (40)
Previous wording
The following discussion and analysis of our financial condition and results of our operations should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this report and in our Annual Report on Form 10-K for the year ended December 31, 2023. In addition to historical consolidated financial information, this discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to these differences include, but are not limited to, those identified below, and in the section "Cautionary Statement Regarding Forward-Looking Information", those discussed in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023, and in any subsequent filing we make with the SEC.
Current wording
The following discussion and analysis of our financial condition and results of our operations should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this report and in our Annual Report on Form 10-K for the year ended December 31, 2024. In addition to historical consolidated financial information, this discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to these differences include, but are not limited to, those identified below, and in the section "Cautionary Statement Regarding Forward-Looking Information", those discussed in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024, and those discussed in any subsequent filing we make with the SEC.
Previous wording
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.
Current wording
Bright Mountain Media, Inc. (together with its wholly-owned subsidiaries, the “Company,” “Bright Mountain” or “we”) 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.
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 return on investment. 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, and 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 return on investment. 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.
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
Seasonal Fluctuations. Typically advertising technology companies report a material portion of their revenues during the third and fourth calendar quarter as a result of back-to-school and holiday-related advertising spend. We continue to experience this trend in our advertising technology division. Because of seasonal fluctuations, there can be no assurance that the results of any quarter or full year will be indicative of results for future years or quarters.
Current wording
Seasonal Fluctuations. Typically advertising technology companies report a material portion of their revenues during the third and fourth calendar quarters as a result of back-to-school and holiday-related advertising spend. We continue to experience this trend in our advertising technology division. Because of seasonal fluctuations, there can be no assurance that the results of any quarter or full year will be indicative of results for future years or quarters.
Previous wording
Limited Number of Customers. During the nine months ended September 30, 2024 and 2023, one customer represented 13.4% and 13.5% of revenue, respectively.
Current wording
Limited Number of Customers. During the three months ended March 31, 2025 and 2024, one customer represented 15.4% and 14.9% of revenue, respectively. The loss of this customer could have a material adverse impact on our results of operations in future periods.
Previous wording
As regulatory concerns accelerate the impact on existing industry standards, companies are actively seeking new methods to finely tailor their messages to target audiences. Tech companies will be limited in how they monetize personal information for advertising purposes. This trend is exemplified by two imminent developments: (1) the anticipated erosion of Google's third-party cookies and (2) the data security measures integrated into Apple iPhone. Consequently, companies must explore innovative methods to better understand their target audiences and have the tools to effectively engage with them.
Current wording
As regulatory concerns accelerate the impact on existing industry standards, companies are actively seeking new methods to finely tailor their messages to target audiences. Tech companies will be limited in how they monetize personal information for advertising purposes. This trend is exemplified by two imminent developments: (1) the anticipated erosion of Google's third-party cookies and (2) the data security measures integrated into Apple iPhones. Consequently, companies must explore innovative methods to better understand their target audiences and have the tools to effectively engage with them.
Previous wording
We monitor the following key financial and operational metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions. The following is our analysis for the three and nine months ended September 30, 2024 and 2023:
Current wording
We monitor the following key financial and operational metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions. The following is our analysis for the three months ended March 31, 2025 and 2024:
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
Cost of revenue decreased approximately $2.1 million, or 18%, for the three months ended September 30, 2024 compared to the same period in 2023. Cost of revenue increased approximately $6.6 million or 30%, for the nine months ended September 30, 2024 compared to the same period in 2023. See below for a detailed analysis of cost of revenue for the three and nine months ended September 30, 2024, and 2023.
Current wording
Cost of revenue increased approximately $607,000, or 7%, for the three months ended March 31, 2025 compared to the same period in 2024. See below for a detailed analysis of cost of revenue for the three months ended March 31, 2025, and 2024.
Previous wording
General and administrative expenses increased approximately $300,000, or 7%, for the three months ended September 30, 2024 compared to the same period in 2023. General and administrative expenses remained consistent for the nine months ended September 30, 2024 compared to the same period in 2023. See below for a detailed analysis of general and administrative expenses for the three and nine months ended September 30, 2024 and 2023.
Current wording
General and administrative expenses decreased approximately $720,000, or 14%, for the three months ended March 31, 2025 compared to the same period in 2024. See below for a detailed analysis of general and administrative expenses for the three months ended March 31, 2025 and 2024.
Previous wording
Net loss from operations for the quarter ended September 30, 2024 was $27,000 as compared to a net loss of $17.0 million for the same period in 2023. The following is our analysis for the period:
Current wording
Net loss for the quarter ended March 31, 2025 was $3.2 million as compared to a net loss of $4.8 million for the same period in 2024. The following is our analysis for the period:
Previous wording
Our revenue decreased $1.1 million, or 7%, for the three months ended September 30, 2024, compared to the same period in 2023. The reduction in revenue was largely attributable to our digital publishing and consumer insihts divisions. Changes in revenue generated by each such division are set forth below:
Current wording
Our revenue increased $1.7 million, or 14%, for the three months ended March 31, 2025, compared to the same period in 2024. The increase in revenue was largely attributable to our advertising technology division. 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
Advertising technology revenue increased by $1.0 million or 28%, for the three months ended September 30, 2024, compared to the same period in 2023. Approximately $4.7 million, or 33%, of the Company’s revenue for the three months ended September 30, 2024, was generated from our advertising technology customers compared to $3.6 million, or 24%, 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.
Current wording
Advertising technology revenue increased by $1.6 million, or 61%, for the three months ended March 31, 2025, compared to the same period in 2024. Approximately $4.2 million, or 30%, of the Company’s revenue for the three months ended March 31, 2025, was generated from our advertising technology customers compared to $2.6 million, or 21%, for the same period in 2024. 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
Consumer insights revenue increased by $5.2 million, or 35%, for the nine months ended September 30, 2024, compared to the same period in 2023. Approximately $20.1 million, or 51%, of the Company’s revenue for the nine months ended September 30, 2024 was generated from our consumer insights customers compared to $14.9 million, or 51%, for the same period in 2023. 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 nine months ended September 30, 2024.
Current wording
Consumer insights revenue increased by $349,000, or 5%, for the three months ended March 31, 2025, compared to the same period in 2024. Approximately $7.0 million, or 49%, of the Company’s revenue for the three months ended March 31, 2025 was generated from our consumer insights customers compared to $6.7 million, or 54%, for the same period in 2024.
Previous wording
Creative services revenue decreased by $185,000 or 10% for the three months ended September 30, 2024, compared to the same period in 2023. Approximately $1.6 million, or 11%, of the Company’s revenue for the three months ended September 30, 2024, was generated from our creative services customers compared to $1.8 million, or 12% for the same period in 2023. This decrease was primarily related to a decrease in the number of projects for smaller tier revenue customers.
Current wording
Creative services revenue decreased by $563,000, or 27%, for the three months ended March 31, 2025, compared to the same period in 2024. Approximately $1.5 million, or 11%, of the Company’s revenue for the three months ended March 31, 2025, was generated from our creative services customers compared to $2.1 million, or 17% for the same period in 2024. This decrease was primarily related to a decrease in the number of projects for smaller tier revenue customers.
Previous wording
Media services revenue decreased by $203,000, or 26%, for the three months ended September 30, 2024, compared to the same period in 2023. Approximately $600,000, or 4%, of the Company’s revenue for the three months ended September 30, 2024, was generated from our media services customers compared to $793,000, or 5%, for the same period in 2023. This decrease was primarily related to the timing of customer needs and the moving of certain projects to year-end.
Current wording
Media services revenue increased by $200,000, or 31%, for the three months ended March 31, 2025, compared to the same period in 2024. Approximately $841,000, or 6%, of the Company’s revenue for the three months ended March 31, 2025, was generated from our media services customers compared to $641,000, or 5%, for the same period in 2024. This increase was primarily related to the timing of customer needs and the moving of certain projects from year-end 2024 to the first quarter of 2025.
Previous wording
Cost of revenue decreased $2.1 million or 18% for the three months ended September 30, 2024, compared to the same period for 2023. This reduction is due to the factors discussed below:
Current wording
Cost of revenue increased $607,000, or 7%, for the three months ended March 31, 2025, compared to the same period for 2024. This increase is due to the factors discussed below:
Previous wording
Direct salaries and labor cost decreased $1.1 million, or 18%, for the three months ended September 30, 2024, when compared to the same period in 2023. Approximately $1.5 million, or 15%, of the Company's cost of revenue for the three months ended September 30, 2024, was a result of direct salaries and labor cost compared to $2.7 million, or 23% 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 and media services divisions.
Current wording
Direct salaries and labor cost decreased $117,000, or 6%, for the three months ended March 31, 2025, when compared to the same period in 2024. Approximately $1.8 million, or 18%, of the Company's cost of revenue for the three months ended March 31, 2025, was a result of direct salaries and labor cost compared to $1.9 million, or 21% for the same period in 2024. 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 decreased $487,000, or 14%, for the three months ended September 30, 2024 when compared to the same period in 2023. Approximately $3.0 million, or 31%, of the Company's cost of revenue for the three months ended September 30, 2024, was a result of direct project cost compared to $3.5 million, or 29%, during the same period in 2023. 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 divisions. The decrease in direct project costs is related to the decrease in revenue from our consumer insights, creative and media services divisions.
Current wording
Direct project cost increased $485,000, or 15%, for the three months ended March 31, 2025 when compared to the same period in 2024. Approximately $3.6 million, or 37%, of the Company's cost of revenue for the three months ended March 31, 2025, was a result of direct project cost compared to $3.1 million, or 34%, during the same period in 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
Non-direct cost was $1.8 million, or 18%, of the Company's cost of revenue for the three months ended September 30, 2024, compared to $2.9 million, or 24%, for the same period in 2023. These costs represent overall client service costs that are not specifically related to a particular project, but relate to services for our consumer insights, creative and media services divisions. The decrease in non-direct project costs is related to the decrease in revenue from our consumer insights, creative and media services divisions.
Current wording
Non-direct cost was $1.0 million, or 10%, of the Company's cost of revenue for the three months ended March 31, 2025, compared to $2.1 million, or 22%, for the same period in 2024. These costs represent overall client service costs that are not specifically related to a particular project, but relate to services for our consumer insights, creative services, and media services divisions. The decrease in non-direct project costs is related to the decrease in revenue from our creative services division.
Previous wording
Publisher cost was $3.0 million, which represents 31% of overall cost of revenue, and $2.1 million, or 18%, of overall cost of revenue, for the three months ended September 30, 2024 and 2023, respectively. We experienced an increase of $930,000, or 45%, for the three months ended September 30, 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.
Current wording
Publisher cost was $3.0 million, which represents 31% of overall cost of revenue, and $1.8 million, or 19%, of overall cost of revenue, for the three months ended March 31, 2025 and 2024, respectively. We experienced an increase of $1.2 million, or 68%, for the three months ended March 31, 2025, compared to the same period in 2024. 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.
Previous wording
Gross margin was $4.4 million and $3.4 million for the three months ended September 30, 2024 and 2023, respectively. Our gross margin increased $1.0 million, or 31%, for the three months ended September 30, 2024, when compared to the same period of 2023. Gross margin as a percentage of revenue increased to 31% for the three months ended September 30, 2024 compared to 22% for the same period of 2023.
Current wording
Gross margin was $4.3 million and $3.1 million for the three months ended March 31, 2025 and 2024, respectively. Our gross margin increased $1.1 million, or 36%, for the three months ended March 31, 2025, when compared to the same period of 2024. Gross margin as a percentage of revenue increased to 30% for the three months ended March 31, 2025 compared to 25% for the same period of 2024.
Previous wording
General and administrative expenses increased by $293,000 or 7%, for the three months ended September 30, 2024, compared to the same period in 2023. The increase is due to a combination of factors as discussed below.
Current wording
General and administrative expenses decreased by $720,000, or 14%, for the three months ended March 31, 2025, compared to the same period in 2024. The decrease is due to a combination of factors as discussed below.
Previous wording
Personnel cost decreased by approximately $381,000, or 17%, for the three months ended September 30, 2024, compared to the same period in 2023. This change is mainly driven by a decrease in the Company's head count by a net change of 47 employees, including 13 employees that were terminated as a reduction in force. The Company employee's headcount was 141 and 188 at September 30, 2024 and 2023, respectively.
Current wording
Personnel cost decreased by approximately $664,000, or 27%, for the three months ended March 31, 2025, compared to the same period in 2024. This change is mainly driven by a decrease in the Company's head count by a net change of 51 employees. The Company employee's headcount was 116 and 167 at March 31, 2025 and 2024, respectively.
Previous wording
Financing and other expense, net increased by $480,000, or 17%, for the three months ended September 30, 2024, compared to the same period in 2023. This increase was largely attributable to a $477,000 increase in interest expense related to the Centre Lane Senior Secured Credit Facility, which reflected higher principal and fees due to the Centre Lane Senior Secured Credit Facility amendments during the year ended December 31, 2023.
Current wording
Financing and other expense, net increased by $320,000, or 12%, for the three months ended March 31, 2025, compared to the same period in 2024.
Previous wording
As of September 30, 2024, we had a cash balance of $2.5 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.”
Current wording
As of March 31, 2025, we had a cash balance of $2.2 million and a restricted cash balance of $1.9 million compared with a cash balance of $2.5 million and a restricted cash balance of $1.9 million as of December 31, 2024. The Company’s liquidity needs, and a discussion of how it intends to meet those needs, is discussed below. See –“Going Concern.”
Previous wording
Historically, the Company has incurred losses, which have resulted in an accumulated deficit of approximately $163.1 million as of September 30, 2024. Cash flows used in operating activities were $451,000 and $5.9 million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, the Company had a working capital deficit of approximately $13.0 million, inclusive of $2.5 million in cash and cash equivalents.
Current wording
Historically, the Company has incurred losses, which have resulted in an accumulated deficit of approximately $170.1 million as of March 31, 2025. Cash flows (used in) provided by operating activities were $(350,000) and $920,000 for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, the Company had a working capital deficit of approximately $14.8 million, inclusive of $2.2 million in cash and cash equivalents and $1.9 million in restricted cash.
Previous wording
The Company's current cash and working capital, as of the filing of this Quarterly Report on Form 10-Q, is not expected to be sufficient to fund its anticipated level of operations over the next twelve months. As a result, such matters create a substantial doubt regarding the Company’s ability to meet its financial obligations and continue as a going concern. 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 $6.3 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 depends, in part, upon the volume and market price of the Company's stock, which cannot be assured. Other measures include reducing or delaying certain business activities, and reducing general and administrative expenses, including a reduction in headcount. The ultimate success of these plans is not guaranteed.
Current wording
The Company's current cash and working capital, as of the filing of this Quarterly Report on Form 10-Q, is not expected to be sufficient to fund its anticipated level of operations over the next twelve months. As a result, such matters create a substantial doubt regarding the Company’s ability to meet its financial obligations and continue as a going concern. 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 $5.6 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 Facility, or raising equity capital. The ability to access the capital markets depends, in part, upon the volume and market price of the Company's stock, which cannot be assured. Other measures include reducing or delaying certain business activities, and 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 Facility 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.
Previous wording
The outstanding principal owed to Centre Lane Partners was $77.0 million and $70.2 million as of September 30, 2024 and December 31, 2023, respectively, and matures on April 20, 2026. Of the amount outstanding at September 30, 2024, approximately $1.3 million is due by December 31, 2024 with $2.9 million due by September 30, 2025. The balance of $72.9 million is due in 2026.
Current wording
The outstanding principal owed to Centre Lane Partners was $81.1 million and $78.8 million as of March 31, 2025 and December 31, 2024, respectively. Of the amount outstanding at March 31, 2025, approximately $5.3 million is due by March 31, 2026. The balance of $75.8 million is due in December 2026.
Previous wording
The following table summarizes cash flow activities during the nine months ended September 30, 2024 and 2023:
Current wording
The following table summarizes cash flow activities during the three months ended March 31, 2025 and 2024:
Previous wording
For the nine months ended September 30, 2024, cash used in operating activities was $451,000. The primary factors affecting our operating cash flows during the period were our net loss of $13.2 million, adjusted for non-cash charges of $1.4 million for amortization of intangible assets, $2.2 million of amortization of debt discount, $6.9 million in interest paid in kind on the Centre Lane Senior Secured Credit Facility, $191,000 for stock compensation expense, and a $1.8 million net change in operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities were a $2.3 million increase in accounts receivable, a $543,000 decrease in accounts payable, and a $363,000 decrease in other liabilities, partially offset by a $200,000 increase in deferred revenue.
Current wording
For the three months ended March 31, 2025, cash used in operating activities was $350,000. The primary factors affecting our operating cash flows during the period were our net loss of $3.2 million, adjusted for non-cash charges of $485,000 for amortization of intangible assets, $633,000 of amortization of debt discount, $2.3 million in interest paid in kind on the Centre Lane Senior Secured Credit Facility, $37,000 for stock compensation expense, and a $585,000 net change in operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities were a $3.9 million decrease in accounts payable and a $543,000 decrease in other liabilities, partially offset by a $3.5 million increase in deferred revenue and a $762,000 decrease in accounts receivable.
Previous wording
For the nine months ended September 30, 2023, cash used in operating activities was $5.9 million. The primary factors affecting our operating cash flows during the period were our net loss of $29.6 million, adjusted for non-cash charges of $1.9 million for amortization of intangible assets, $1.4 million of amortization of debt discount, $16.3 million impairment of goodwill and intangibles, $4.5 million in interest paid in kind on the Centre Lane Senior Secured Credit Facility, $177,000 for the provision of bad debt, $115,000 for stock option compensation expense, and a $802,000 net change in operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities were a $277,000 increase in accounts receivables offset by a $2.3 million increase in accounts payable and accrued expenses, an increase in other liabilities of $2.2 million, an increase in prepaid expenses and other current assets of $573,000, and a $942,000 increase in deferred revenue.
Current wording
For the three months ended March 31, 2024, cash flow provided by operating activities was $920,000. The primary factors affecting our operating cash flows during the period were our net loss of $4.8 million, adjusted for non-cash charges of $481,000 for amortization of intangible assets, $615,000 of amortization of debt discount, $2.2 million in interest paid-in-kind on the Centre Lane Senior Secured Credit Facility, $65,000 for stock option compensation expense, and a $2.3 million net change in operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities were a $2.2 million decrease in accounts receivables partially offset by a $1.7 million decrease in accounts payable and accrued expenses, an increase in prepaid expenses and other current assets of $123,000, a $138,000 increase in interest payable on the Centre Lane Senior Secured Credit Facility, and a $1.7 million increase in deferred revenue.
Previous wording
Cash used in investing activities of $100,000 and $14,000 for the nine months ended September 30, 2024 and 2023, respectively, was due to $14,000 and $14,000, respectively, for the purchase of property and equipment, and $86,000 for website enhancement during the nine months ended September 30, 2024.
Current wording
Cash used in investing activities of $10,000 and $2,000 for the three months ended March 31, 2025 and 2024, respectively, was attributable to the purchase of property and equipment.
Previous wording
During the nine months ended September 30, 2024, the Company used cash of $892,000 in financing activities, which is largely attributable to repayment of principal on the Centre Lane Senior Secured Credit Facility of $879,000.
Current wording
During the three months ended March 31, 2025 and 2024, the Company used cash of $4,000 in financing activities, which is attributable to principal payments on finance lease obligations.
Previous wording
There were no other material changes in our contractual obligations and commitments from those disclosed above and in the Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
There were no other material changes in our contractual obligations and commitments from those disclosed above in Note 10, Centre Lane Senior Secured Credit Facility, and Note 12, Leases, to the consolidated financial statements, and in the Annual Report on Form 10-K for the year ended December 31, 2024.
Previous wording
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.
Current wording
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, the valuation of the Center Lane Senior Secured Facility to determine whether a debt modification or extinguishment has occurred, and the valuation allowance on deferred tax assets.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Advertising technology revenue increased by $4.7 million, or 77%, for the nine months ended September 30, 2024, compared to the same period in 2023. Approximately $10.9 million, or 28%, of the Company’s revenue for the nine months ended September 30, 2024, was generated from our advertising technology customers compared to $6.1 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 report — wording carried elsewhere
Publisher cost was $7.1 million, which represents 25% of overall cost of revenue, and $3.7 million, or 17%, of overall cost of revenue for the nine months ended September 30, 2024 and 2023, respectively. We experienced an increase of $3.4 million, or 92%, for the nine months ended September 30, 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 report — wording carried elsewhere
Our gross margin increased $3.6 million, or 49%, for the nine months ended September 30, 2024, compared to the same period of 2023. Gross margin as a percentage of revenue increased to 28% for the nine months ended September 30, 2024, compared to 25% for the same period of 2023.