Fluent, Inc.

Current report

On August 19, 2025, the Company entered into securities purchase agreements (the "August 2025 Purchase Agreements") with certain officers and/or directors of the Company or others for whom they have or share beneficial ownership (the "August 2025 Inside Investors"), the Company’s largest stockholder, and other accredited investors (collectively, the "August 2025 Purchasers"), pursuant to which the Company sold (1) 3,542,856 unregistered shares of common stock, (2) pre-funded warrants to purchase up to 2,328,571 shares of common stock (the “August 2025 PFWs”), and (3) common stock warrants to purchase up to 5,871,427 shares of common stock (the “August 2025 Common Stock Warrants”).

Current report

Each share and accompanying common stock warrant were sold together at a purchase price of $1.75, and each pre-funded warrant and accompanying common stock warrant were sold together at a purchase price of $1.7495, for aggregate gross proceeds of approximately $10.3 million before deducting estimated offering expenses of approximately $0.7 million payable by the Company.

Current report

The August 2025 PFWs have an exercise price of $0.0005 per share and were immediately exercisable upon issuance for all purchasers other than the Company’s officers and/or directors. The August 2025 PFWs issued to the Company’s officers and/or directors will be exercisable after stockholder approval and will terminate when exercised in full. The August 2025 Common Stock Warrants are exercisable beginning six months and one day from the date of issuance at an exercise price of $2.21 per share and expire five and one-half years from issuance.

Current report

The Benchmark Company, LLC, a StoneX Company (“Benchmark”), acted as sole placement agent in connection with the offering. The Kestrel Merchant Partners group at Benchmark was responsible for sourcing and executing the offering.

Current report

Substantially all of the August 2025 Purchasers (other than the August 2025 Inside Investors) exercised their August 2025 PFWs during the month of September 2025, for an aggregate of 1,657,143 shares of common stock, leaving August 2025 PFWs to purchase 671,428 shares unexercised, 585,714 shares of which are represented by August 2025 Inside Investors and are not exercisable until stockholder approval is obtained.

Current report

The sale and issuance of these securities were made in reliance upon exemptions from registration afforded in Section 4(a)(2) of the Securities Act.

Previous report

We have experienced a continued decline in the number of users registering on our owned and operated digital media properties ("O&O Sites") starting in 2020, following our implementation of the TQI, which eliminated a large portion of our third-party affiliate traffic. In 2023, the FTC Consent Order resulting from an investigation by the FTC imposed more rigorous standards and vetting of our third-party publishers, some of whom elected not to work with us, which negatively impacted our registration volume on our O&O Sites. These issues, coupled with intermittent difficulties sourcing traffic from social media sites, have resulted in declining revenue and profitability. Borrowings under the SLR Revolver of up to $30.0 million pursuant to the April 2, 2024 SLR Credit Agreement are limited to a borrowing base that fluctuates weekly, based on eligible accounts receivable. As a result of the borrowing base limit and the above performance issues, the available borrowing capacity has the potential to be insufficient to fund operations and meet the Company's needs.

Previous report

Given the continued challenges we have faced achieving profitability, we have made reductions in workforce, including during the first quarter of 2025, and restructured certain long-term contracts to better align with our results and cash flow requirements. We will continue to monitor the performance of our business units to determine the impact of potential divestments and consider further cost reduction measures and reallocation of resources that will enable us to meet our projected budget and cash flow requirements.

Previous report

As of June 30, 2025, we were not in compliance with our financial covenants under the SLR Credit Agreement, which would have resulted in an event of default. If, during any fiscal quarter, we do not comply with any of our financial covenants, such non-compliance would result in an event of default that would give SLR the right to accelerate maturities. In such case, we would not have sufficient funds to repay the SLR Term Loan of $20.0 million under the SLR Credit Agreement and any outstanding balance on the SLR Revolver. However, on August 15, 2025, the Credit Parties and SLR entered into the Fifth Amendment to the SLR Credit Agreement, (the "Fifth Amendment") which, among other things, required that the Company raise at least $8.5 million of additional capital by August 19, 2025. On August 19, 2025, the Company entered into securities purchase agreements for approximately $10.3 million in equity capital, expected to close on August 19, 2025. See Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Private Placement of Securities for additional information on this capital raise. In addition, the Fifth Amendment waived non-compliance with the financial covenants as of June 30, 2025 and modified the financial covenants for the periods through August 31, 2026.

Previous report

Although the financial covenants under the SLR Credit Agreement were reset based on the Company’s twelve month projections, the Company has not met its projection for certain recent quarters and if during any future quarter, the Company does not comply with any of its financial covenants, such non-compliance would result in default and therefore give SLR the right to accelerate maturities. In such case, the Company would not have sufficient funds to repay the borrowings under the SLR Credit Agreement. As a result of the foregoing, management has concluded that there is substantial doubt about the Company's ability to continue as a going concern for one year after the date of issuance of this Quarterly Report on Form 10-Q.

Previous report

Even with the proceeds from the August 19, 2025 capital raise, there is no assurance that the available cash, plus availability under the borrowing base on the SLR Revolver will be sufficient to fund operations over the next twelve months, and, if needed, we would seek to raise additional capital. If we are not able to raise sufficient capital to fund operations at their current levels, we will consider implementing cost-saving measures, but there is no guarantee that such plans will be successfully executed or have the expected benefits.

Previous report

If our current plans are not successful, we may need to consider other strategic alternatives, including restructuring or refinancing our debt, seeking additional equity or debt financing, reducing or delaying our business activities and strategic initiatives, selling assets, and other strategic transactions and/or other measures. We have relied upon financing provided by our officers, directors and largest stockholders, and such holders may be unwilling or unable to continue providing financing should additional financing be required. Other financing sources may be unwilling to provide such funding to us on commercially reasonable terms, or at all. If we seek additional financing to fund our operations and there remains substantial doubt about our ability to continue as a going concern, we may find it especially difficult to raise funds on commercially reasonable terms, or at all. Furthermore, the perception that we may not be able to continue as a going concern may cause publishers, vendors, advertisers and other clients (current and potential) to review their business relationships and terms with us. The reaction of investors to the inclusion of a going concern statement in the accompanying financial statement, and our potential inability to continue as a going concern, could materially adversely affect our share price, which could negatively impact our ability to obtain stock-based financing or enter into strategic transactions.

Previous report

Our investment in growing our Commerce Media Solutions business may continue to compress margins, and our ability to improve profitability over time is uncertain.

Previous report

As we expand our Commerce Media Solutions business, we expect increased competition, particularly as we enter new verticals and pursue long-term partnerships. In the second quarter, Commerce Media Solutions margins declined as we adopted flexible pricing to onboard new partners. While we expect margins to normalize as we scale and grow our media partner network, there is no guarantee these effects will offset additional pricing incentives and lead to margin improvement.

Previous report

Additionally, as we reallocate resources from our owned and operated business to Commerce Media Solutions, owned and operated revenue has declined. If Commerce Media Solutions growth does not meet expectations, our overall revenue and profitability may be adversely affected.

Previous report

On May 15, 2025, a principal stockholder of the Company net exercised pre-funded warrants and was issued 909,085 shares of the Company’s common stock.

Previous report

On June 24, 2025, certain officers and/or directors of the Company net exercised pre-funded warrants and were issued an aggregate of 2,250,442 shares of the Company's common stock.

Previous report

The shares of common stock issued upon exercise of the pre-funded warrants were issued pursuant to the exemption from the registration requirements of the Securities Act available under Section 3(a)(9).