TABLE OF CONTENTS FOR FORM 10-K
| PART I | | 1 |
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| Item 1. | Business. | 1 |
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| Item 1A. | Risk Factors. | 6 |
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| Item 1B. | Unresolved Staff Comments. | 19 |
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| Item 1C. | Cybersecurity. | 19 |
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| Item 2. | Properties. | 19 |
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| Item 3. | Legal Proceedings. | 20 |
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| Item 4. | Mine Safety Disclosures. | 20 |
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| PART II | | 21 |
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| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. | 21 |
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| Item 6. | [Reserved]. | 21 |
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| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 22 |
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| Item 7A. | Quantitative and Qualitative Disclosures About Market Risk. | 35 |
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| Item 8. | Financial Statements and Supplementary Data. | 35 |
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| Item 9. | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. | 35 |
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| Item 9A. | Controls and Procedures. | 35 |
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| Item 9B. | Other Information. | 35 |
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| Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. | 35 |
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| PART III | | 36 |
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| Item 10. | Directors, Executive Officers and Corporate Governance. | 36 |
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| Item 11. | Executive Compensation. | 36 |
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| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. | 36 |
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| Item 13. | Certain Relationships and Related Transactions, and Director Independence. | 36 |
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| Item 14. | Principal Accounting Fees and Services. | 36 |
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| PART IV | | 37 |
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| Item 15. | Exhibits, Financial Statement Schedules. | 37 |
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| SIGNATURES | | 40 |
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K for the fiscal year ended December 31, 2024 contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, the Securities Act of 1933, as amended (the "Securities Act"), and the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements contain information about our expectations, beliefs or intentions regarding our product development and commercialization efforts, business, financial condition, results of operations, strategies or prospects, and other similar matters. These forward-looking statements are based on management's current expectations and assumptions about future events, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict. These statements may be identified by words such as "expects," "plans," "projects," "will," "may," "anticipates," "believes," "should," "intends," "estimates," "will likely result," "could," and other words of similar meaning.
Actual results could differ materially from those contained in forward-looking statements. Many factors could cause actual results to differ materially from those in forward-looking statements, including those matters discussed below, as well as those listed in Item 1A. Risk Factors.
Other unknown or unpredictable factors that could also adversely affect our business, financial condition, and results of operations may arise from time to time. Given these risks and uncertainties, the forward-looking statements discussed in this report may not prove to be accurate. Accordingly, you should not place undue reliance on these forward-looking statements, which only reflect the views of Fluent’s management as of the date of this report. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results or expectations, except as required by law.
RISK FACTOR SUMMARY
Investing in our common stock involves a high degree of risk. The following summary identifies certain material risks and uncertainties facing our business, many of which are beyond our control. A more complete discussion of each these and other risks and uncertainties is set forth below. Our business, financial condition, results of operations, and cash flows may be impacted by a number of factors, including those set forth below and elsewhere in this 2024 Form 10-K, the occurrence of any one of which could have a material adverse effect on our actual results.
Risks Related to Our Business
Risks Related to Our Financial Position
| ● | There is substantial doubt about our ability to continue as a going concern. |
| ● | Covenants in our SLR Credit Agreement (as defined herein) impose restrictions that may limit our operating and financial flexibility. |
Risks Related to Our Industry
| ● | We operate in a competitive, rapidly changing industry, which makes it difficult to evaluate our business and prospects. |
| ● | A material percentage of our consolidated revenue is derived from gaming (apps) advertisers, so we are exposed to risks associated with the gaming industry in general. |
| ● | Unfavorable publicity and negative public perception about our industry or us may damage our reputation, which could harm our business, financial condition, and results of operations. |
| ● | A sudden reduction in online marketing spend by our clients, a loss of clients or lower advertising yields may seriously harm our business. |
| ● | We are exposed to credit risk from our clients, and we may not be able to collect on amounts owed to us. |
Risks Related to Our Commerce Media Solutions Business
| ● | We are a relatively new entrant to the post-transaction commerce media business, which is currently dominated by a major player. |
| ● | We will need to continue to invest in technology for our Commerce Media Solutions business. |
Risks Related to Our Owned and Operated Media Properties
| ● | We are at a competitive disadvantage to other rewards sites because we are more selective in our traffic sources. |
| ● | A decline in the supply of media available to us through third parties or an increase in the price of this media could increase the cost of attracting consumers and reduce our profitability. |
| ● | More people are accessing content on their mobile devices through mobile applications, and we have not successfully deployed mobile app versions of our O&O Sites (as defined herein), which hinders our ability to remain. |
| ● | Our use of CRM may be hindered, which in turn could harm our business. |
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Risks Related to Our Call Solutions Business
| ● | We have become increasingly reliant upon inbound calls, particularly in the Health Plan (as defined herein) vertical, which we may be unable to obtain cost effectively obtain in the future. |
Other Business Risks
| ● | It may be difficult to effectively manage any future growth and scale our infrastructure and products quickly enough to meet the needs of our business while maintaining profitability. |
| ● | Economic or political instability could adversely affect our business, financial condition, and results of operations. |
| ● | Our international operations subject us to increased challenges and risks. |
| ● | Our evaluation of strategic alternatives could complicate operations, or could result in other harmful consequences that may adversely impact our business and results of operations. |
| ● | Our failure to recruit or the loss of management and highly trained and qualified personnel could adversely affect our business. |
| ● | We are dependent upon third-party service providers in our operations and may be adversely affected if any of their platforms malfunction. |
Risks Relating to Legal and Regulatory Matters
| ● | The regulatory landscape in which we and our clients operate is constantly evolving and subject to significant change. |
| ● | Our use of email marketing is subject to laws and rules in each of the jurisdictions in which we operate. |
| ● | The outcome of litigation, inquiries, investigations, examinations, or other legal proceedings in which we are or may become involved, or in which our clients or competitors are involved, could distract management, increase our expenses, or subject us to significant monetary damages or restrictions on our ability to do business. |
| ● | Our business and the businesses of our advertiser clients may be subject to sales and use taxes and other taxes. |
Risks Relating to Data Security and Intellectual Property
| ● | Our actual or perceived failure to safeguard any personal information or user privacy could damage our reputation and results of operations. |
| ● | If we do not adequately protect our intellectual property rights, our competitive position and business may suffer. |
| ● | As a creator and a distributor of digital media content, we face liability and expenses for legal claims based on the nature and content of the materials that we create or distribute, including materials provided by third parties. |
| ● | Laws and regulations regarding privacy, data protection, and the handling of personal information are complex and continuously evolving, and could have a material adverse effect on our business, financial condition, and results of operations. |
Risks Related to Financial Matters
| ● | We may require additional capital in the future to pursue our business objectives and respond to business opportunities, challenges, or unforeseen circumstances, and such capital may not be available to us on acceptable terms, or at all. |
| ● | We have written down all of our goodwill from our prior acquisitions and could experience significant charges to our intangible assets, which may affect our results of operations in the future. |
Risks Related to Our Common Stock and the Securities Markets
| ● | We are currently listed on The Nasdaq Capital Market (“Nasdaq”). If we are unable to maintain listing of our securities on Nasdaq or any stock exchange, our stock price could be adversely affected and the liquidity of our stock and our ability to obtain financing could be impaired and it may be more difficult for our stockholders to sell their securities. |
| ● | Our stock price has been and may be volatile in the future, and as a result, investors in our securities could incur substantial losses. |
| ● | The concentration of our stock ownership presents risks, including lack of liquidity in the trading market for our common stock and limitations on any individual stockholder's ability to influence corporate matters. |
| ● | Future issuances of shares of our common stock could have a dilutive effect on your investment in us. |
| ● | We do not intend to pay cash dividends for the foreseeable future. |
| ● | We are a smaller reporting company and a non-accelerated filer, and we benefit from certain reduced governance and disclosure requirements, but we cannot be certain if the reduced disclosure requirements make our common stock less attractive to investors. |
PART I
