Bright Mountain Media Inc
For the period ended Jun 30, 2024. Filed Aug 14, 2024.
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.
Jun 30, 2024 · Filed Aug 14, 2024
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-14.
0001628280-24-023277
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001628280-24-037170
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 119 previous paragraphs and 157 current paragraphs.
72 unchanged; 35 reworded; 47 added; 12 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 9 previous and 14 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 (47)
Current report
Revenue increased $387,000, or 3%, for the three months ended June 30, 2024, compared to the same period in 2023. Revenue increased $11.3 million, or 80%, for the six months ended June 30, 2024, compared to the same period in 2023. See below for a detailed analysis of revenue for the three and six months ended June 30, 2024, and 2023.
Current report
Revenue in our digital publishing 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. This reduction was offset by an increase in our advertising technology division which 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 report
Consumer insights revenue decreased by $219,000, or 3%, for the three months ended June 30, 2024, compared to the same period in 2023. Approximately $6.7 million, or 51%, of the Company’s revenue for the three months ended June 30, 2024, was generated from our consumer insights customers compared to $6.9 million, or 55%, for the same period in 2023.
Current report
Creative services revenue remained consistent for the three months ended June 30, 2024, compared to the same period in 2023. Approximately $1.7 million, or 13%, of the Company’s revenue for the three months ended June 30, 2024 and 2023, was generated from our creative services customers.
Current report
Media services revenue decreased by $83,000, or 13%, for the three months ended June 30, 2024, compared to the same period in 2023. Approximately $566,000, or 4%, of the Company’s revenue for the three months ended June 30, 2024, was generated from our consumer insights customers compared to $649,000, or 5%, for the same period in 2023.
Current report
Cost of revenue increased $1.2 million, or 14%, for the three months ended June 30, 2024, compared to the same period for 2023.
Current report
Legal fees decreased by $99,000, or 16%, for the three months ended June 30, 2024, compared to the same period in 2023. Approximately $359,000 of legal fees for the three months ended June 30, 2023, represented costs associated with the Big Village Acquisition.
Current report
Professional Fees
Current report
Professional fees decreased by $2.0 million, or 73%, for the three months ended June 30, 2024, compared to the same period in 2023. Approximately $685,000 of professional fees for the three months ended June 30, 2023, represented costs associated with the Big Village Acquisition.
Current report
Financing and Other Expense, Net
Current report
Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023
Current report
Revenue
Current report
Our revenue showed an overall increase of $11.3 million, or 80%, for the six months ended June 30, 2024 compared to the same period in 2023. For the six months ended June 30, 2024, revenue includes $18.3 million, which represents the impact of the Big Village Acquisition, which was completed in April 2023. This compares to $9.2 million for the same period in 2023. As a result, the acquisition contributed to revenue for three months of the prior period and for the full six months of the current period and is the main driver of the increase in revenue for the six months ended June 30, 2024.
Current report
Digital publishing revenue decreased by $1.5 million, or 60%, for the six months ended June 30, 2024, compared to the same period in 2023. Approximately $950,000, or 4%, of the Company’s revenue for the six months ended June 30, 2024, was generated from our digital publishing customers compared to $2.4 million, or 17%, 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.
Current report
Advertising technology revenue increased by $3.7 million, or 148%, for the six months ended June 30, 2024, compared to the same period in 2023. Approximately $6.2 million, or 24%, of the Company’s revenue for the six months ended June 30, 2024, was generated from our advertising technology customers compared to $2.5 million, or 18%, 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 report
Consumer insights revenue increased by $6.5 million, or 94%, for the six months ended June 30, 2024, compared to the same period in 2023. Approximately $13.4 million, or 53%, of the Company’s revenue for the six months ended June 30, 2024 was generated from our consumer insights customers compared to $6.9 million, or 49%, for the same period in 2023. As discussed above, the Big Village Acquisition was completed in April 2023, and contributed to revenue for three months of the prior period and for the full six months of the current period and is the main driver of the increase in consumer insights revenue for the six months ended June 30, 2024.
Current report
Creative services revenue increased by $2.0 million, or 123%, for the six months ended June 30, 2024, compared to the same period in 2023. Approximately $3.7 million, or 15%, of the Company’s revenue for the six months ended June 30, 2024, was generated from our creative services customers compared to $1.7 million, or 12%, for the same period in 2023. As discussed above, the Big Village Acquisition was completed in April 2023, and contributed to revenue for three months of the prior period and for the full six months of the current period and is the main driver of the increase in creative services revenue for the six months ended June 30, 2024.
Current report
Media services revenue increased by $557,000, or 86%, for the six months ended June 30, 2024, compared to the same period in 2023. Approximately $1.2 million, or 5%, of the Company’s revenue for the six months ended June 30, 2024, was generated from our media services customers compared to $649,000, or 5%, for the same period in 2023. As discussed above, the Big Village Acquisition was completed in April 2023, and contributed to revenue for three months of the prior period and for the full six months of the current period and is the main driver of the increase in media services revenue for the six months ended June 30, 2024.
Current report
Cost of revenue increased $9.5 million, or 101%, for the six months ended June 30, 2024, compared to the same period of 2023. For the six months ended June 30, 2024, cost of revenue includes $14.0 million, or 74% from the impact of the Big Village Acquisition, which was completed in April 2023. This compares to $6.7 million, or 72%, for the same period in 2023. As a result, the acquisition contributed to cost of revenue for three months of the prior period and for the full six months of the current period and is the main driver of the increase in cost of revenue for the six months ended June 30, 2024.
Current report
Direct Salaries and Labor Cost
Current report
Direct salaries and labor cost increased $1.5 million, or 61%, for the six months ended June 30, 2024, when compared to the same period in 2023. Approximately $4.1 million, or 22%, of the Company's cost of revenue for the six months ended June 30, 2024 was a result of direct salaries and labor cost compared to $2.5 million, or 27%, for the same period in 2023. As discussed above, the Big Village Acquisition, was completed in April 2023, and contributed to cost of revenue for three months of the prior period and for the full six months of the current period and is the main driver of the increase in direct salaries and labor cost for the six months ended June 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.
Current report
Direct Project Cost
Current report
Direct project cost increased $3.6 million, or 141%, for the six months ended June 30, 2024 when compared to the same period in 2023. Approximately $6.2 million, or 33%, of the Company's cost of revenue for the six months ended June 30, 2024, was a result of direct project cost compared to $2.6 million, or 27%, for the same period in 2023. As discussed above, the Big Village Acquisition, was completed in April 2023, and contributed to cost of revenue for three months of the prior period and for the full six months of the current period and is the main driver of the increase in direct project cost for the six months ended June 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.
Current report
Non-Direct Project Cost
Current report
Non direct project cost increased $2.1 million, or 126%, for the six months ended June 30, 2024, when compared to the same period in 2023. Approximately $3.7 million, or 20%, of the Company's cost of revenue for the six months ended June 30, 2024, was a result of direct project cost compared to $1.6 million, or 17%, for the same period in 2023. As discussed above, the Big Village Acquisition, was completed in April 2023, and contributed to cost of revenue for three months of the prior period and for the full six months of the current period and is the main driver of the increase in non- direct project cost for the six months ended June 30, 2024. These costs represent overall client service costs that are not specifically related to a particular project.
Current report
Publisher Cost
Current report
Publisher cost was $4.1 million, which represents 22% of overall cost of revenue, and $1.6 million, or 17%, of overall cost of revenue for the six months ended June 30, 2024 and 2023, respectively. We experienced an increase of $2.5 million, or 153%, for the six months ended June 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.
Current report
Gross Margin
Current report
Our gross margin increased $1.8 million, or 38%, for the six months ended June 30, 2024, compared to the same period for 2023. Gross margin as a percentage of revenue decreased to 26% for the six months ended June 30, 2024, compared to 34% for the same period of 2023.
Current report
General and administrative expenses decreased by $1.0 million, or 9%, for the six months ended June 30, 2024, compared to the same period in 2023. The reduction is primarily due to a combination of factors as discussed below.
Current report
Personnel Cost
Current report
Personnel cost increased by $361,000, or 8%, for the six months ended June 30, 2024 compared to the same period in 2023.
Current report
The Company reduced its head count by 44 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 $236,000 associated with a head count reduction during the same period for 2023.
Current report
Legal Expense
Current report
Legal fees increased by $128,000, or 19%, for the six months ended June 30, 2024, compared to the same period in 2023. Approximately $359,000 of legal expense for the six months ended June 30, 2023 represented costs associated with the Big Village Acquisition.
Current report
Professional Fees
Current report
Professional fees decreased by $2.0 million or 55% for the six months ended June 30, 2024, compared to the same period in 2023. Approximately $685,000 of professional fees for the six months ended June 30, 2023 represented costs associated with the Big Village Acquisition.
Current report
Data Processing
Current report
Data processing increased by $512,000, or 259%, for the six months ended June 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 three months of the prior period and for the full six months of the current period and is the main driver of the increase in data processing for the six months ended June 30, 2024.
Current report
Financing and Other Expense, Net
Showing the first 40 of 47 passages. Open the source sections for the rest.
Removed paragraphs (12)
Previous report
Revenue increased $10.9 million, or 731%, for the three months ended March 31, 2024, compared to the same period in 2023. See below for a detailed analysis of revenue for the three months ended March 31, 2024, and 2023.
Previous report
Cost of Revenue
Previous report
General and Administrative Expenses
Previous report
Consumer insights revenue, which is a new offering we acquired with the Big Village Acquisition, increased by $6.7 million, or 100%, for the three months ended March 31, 2024 compared to the same period in 2023, and represented approximately 54% of the Company’s revenue for the three months ended March 31, 2024.
Previous report
Creative services revenue, which we also acquired as part of the Big Village Acquisition, increased by $2.1 million, or 100%, for the three months ended March 31, 2024 compared to the same period in 2023, and represented approximately 17% of the Company’s revenue for the three months ended March 31, 2024.
Previous report
Media services revenue, which we also acquired as part of the Big Village Acquisition, increased by $641,000, or 100%, for the three months ended March 31, 2024 compared to the same period in 2023, and represented approximately 5% of the Company’s revenue for the three months ended March 31, 2024.
Previous report
Cost of Revenue
Previous report
Cost of revenue increased $8.3 million, or 860%, for the three months ended March 31, 2024, compared to the same period for 2023, which was driven by $7.2 million in cost as a result of the Big Village Acquisition.
Previous report
General and Administrative Expenses
Previous report
Legal fees increased by $227,000, or 428%, for the three months ended March 31, 2024, compared to the same period in 2023.
Previous report
Financing and Other Expense (Income), Net
Previous report
Effective July 1, 2024, the $35.2 million outstanding under the Centre Lane Senior Secured Credit Facility will bear interest at 7.0% per annum, plus the SOFR plus 5.0%.
Reworded paragraphs (35)
Previous wording
Our advertising technology division focuses on delivering targeted ads to audiences on owned and operated sites as well as third-party publishers in a cost-effective manner through the deployment of proprietary technologies. By developing our own proprietary technology stack, we are able to pass along efficiencies to both the demand and supply side of the ecosystem. Our goal is to enable and support a streamlined, end-to-end advertising model that addresses both demand (buy side) and publisher supply (sell side) programmatic sales and delivery of digital advertisements using an array of audience targeting tools and advertising formats (display, audio, video, CTV, in-app). Programmatic advertising relies on software programs that leverage data and proprietary algorithms to match the optimal selection of an ad with a bid price offered by advertisers.
Current wording
Our advertising technology division focuses on delivering targeted ads to audiences on owned and operated sites as well as third-party publishers in a cost-effective manner through the deployment of proprietary technologies. By developing our own proprietary technology stack, we are able to pass along efficiencies to both the demand and supply side of the ecosystem. Our goal is to enable and support a streamlined, end-to-end advertising model that addresses both demand (buy side) and publisher supply (sell side) programmatic sales and delivery of digital advertisements using an array of audience targeting tools and advertising formats (display, audio, video, CTV, and in-app). Programmatic advertising relies on software programs that leverage data and proprietary algorithms to match the optimal selection of an ad with a bid price offered by advertisers.
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 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
Limited Number of Customers. During the three months ended March 31, 2024, one customer represented 14.9% of revenue; there was no such concentration for the three months ended March 31, 2023.
Current wording
Limited Number of Customers. During the six months ended June 30, 2024 and 2023, one customer represented 14.2% and 12.7% of revenue, respectively.
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 months ended March 31, 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 and six months ended June 30, 2024 and 2023:
Previous wording
Costs of revenue increased approximately $8.3 million, or 860%, for the three months ended March 31, 2024 compared to the same period in 2023. See below for a detailed analysis of cost of revenue for the three months ended March 31, 2024, and 2023.
Current wording
Cost of revenue increased approximately $1.2 million, or 14%, for the three months ended June 30, 2024 compared to the same period in 2023. Cost of revenue increased approximately $9.5 million, or 101%, for the six months ended June 30, 2024 compared to the same period in 2023. See below for a detailed analysis of cost of revenue for the three and six months ended June 30, 2024, and 2023.
Previous wording
General and administrative expenses increased approximately $1.8 million, or 53%, for the three months ended March 31, 2024 compared to the same period in 2023. See below for a detailed analysis of general and administrative expenses for the three months ended March 31, 2024 and 2023.
Current wording
General and administrative expenses decreased approximately $2.8 million, or 35%, for the three months ended June 30, 2024 compared to the same period in 2023. General and administrative expenses decreased approximately $1.0 million, or 9%, for the six months ended June 30, 2024 compared to the same period in 2023. See below for a detailed analysis of general and administrative expenses for the three and six months ended June 30, 2024 and 2023.
Previous wording
Net loss from operations for the quarter ended March 31, 2024 was $4.8 million as compared to a net loss of $3.8 million for the same period in 2023. The following is our analysis for the period.
Current wording
Net loss from operations for the quarter ended June 30, 2024 was $5.2 million as compared to a net loss of $6.1 million for the same period in 2023. The following is our analysis for the period.
Previous wording
Our revenue showed an overall increase of $10.9 million, or 731%, for the three months ended March 31, 2024, compared to the same period in 2023, which was driven by $9.4 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.
Current wording
Our revenue showed an overall increase of $387,000, or 3%, for the three months ended June 30, 2024, compared to the same period in 2023.
Previous wording
Digital publishing revenue decreased by $520,000, or 55%, for the three months ended March 31, 2024 compared to the same period in 2023. Approximately $434,000, or 3%, of the Company’s revenue for the three months ended March 31, 2024 was generated from our digital publishing customers, compared to $954,000, or 64%, 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.
Current wording
Digital publishing revenue decreased by $928,000, or 64%, for the three months ended June 30, 2024,compared to the same period in 2023. Approximately $516,000, or 4%, of the Company’s revenue for the three months ended June 30, 2024, was generated from our digital publishing customers, compared to $1.4 million, or 11%, 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 increased by $2.1 million, or 383%, for the three months ended March 31, 2024 compared to the same period in 2023. Approximately $2.6 million, or 21%, of the Company’s revenue for the three months ended March 31, 2024 was generated from our advertising technology customers compared to $544,000, or 36%, for the same period in 2023.
Current wording
Advertising technology revenue increased by $1.6 million, or 83%, for the three months ended June 30, 2024, compared to the same period in 2023. Approximately $3.6 million, or 28%, of the Company’s revenue for the three months ended June 30, 2024, was generated from our advertising technology customers compared to $2.0 million, or 16%, 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
Direct salaries and labor cost was $1.9 million for the three months ended March 31, 2024, and represents 21% 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 decreased $382,000, or 15%, for the three months ended June 30, 2024, when compared to the same period in 2023. Approximately $2.1 million, or 22%, of the Company's cost of revenue for the three months ended June 30, 2024, was a result of direct salaries and labor cost compared to $2.5 million, or 31% 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.
Previous wording
Direct project cost was $3.1 million for the three months ended March 31, 2024, and represents 34% 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 $474,000, or 18%, for the three months ended June 30, 2024 when compared to the same period in 2023. Approximately $3.1 million, or 32%, of the Company's cost of revenue for the three months ended June 30, 2024, was a result of direct project cost compared to $2.6 million, or 31%, 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.
Previous wording
Non-direct cost was $2.1 million for the three months ended March 31, 2024, and represents 22% 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.
Current wording
Non-direct cost was $1.6 million, or 17%, of the Company's cost of revenue for the three months ended June 30, 2024, compared to $1.6 million, or 19%, 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.
Previous wording
Publisher cost was $1.8 million, which represents 19% of overall cost of revenue, and $486,000, or 50%, of overall cost of revenue, for the three months ended March 31, 2024 and 2023, respectively. We experienced an increase of $1.3 million, or 270%, for the three months ended March 31, 2024 compared to the same period in 2023. These costs represent payments to media providers and website publishers.
Current wording
Publisher cost was $2.3 million, which represents 24% of overall cost of revenue, and $1.1 million, or 13%, of overall cost of revenue, for the three months ended June 30, 2024 and 2023, respectively. We experienced an increase of $1.2 million, or 103%, for the three months ended June 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.
Previous wording
Gross margin was $3.1 million, and $528,000 for the three months ended March 31, 2024 and 2023, respectively. Our gross margin increased $2.6 million, or 494%, for the three months ended March 31, 2024, when compared to the same period of 2023, primarily due to the Big Village Acquisition. Gross margin as a percentage of revenue decreased to 25% for the three months ended March 31, 2024 compared to 35% for the same period of 2023.
Current wording
Gross margin was $3.4 million, and $4.2 million for the three months ended June 30, 2024 and 2023, respectively. Our gross margin decreased $786,000, or 19%, for the three months ended June 30, 2024, when compared to the same period of 2023. Gross margin as a percentage of revenue decreased to 26% for the three months ended June 30, 2024 compared to 33% for the same period of 2023.
Previous wording
General and administrative expenses increased by $1.8 million, or 53%, for the three months ended March 31, 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 $2.8 million, or 35%, for the three months ended June 30, 2024, compared to the same period in 2023. The reduction is due to a combination of factors as discussed below.
Previous wording
Personnel cost increased by approximately $747,000, or 43%, for the three months ended March 31, 2024 compared to the same period in 2023. This change is mainly driven by an increase in head count as a result of the acquisition of the Big Village Entities during the year ended December 31, 2023. This increase in head count was partially offset by a decrease in the Company's head count by a net amount of 23 employees or 12%, including nine employees that were terminated as a reduction in force. The Company incurred severance cost of approximately $8,000 in connection with this reduction.
Current wording
Personnel cost decreased by approximately $386,000, or 14%, for the three months ended June 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 24 employees, including 13 employees that were terminated as a reduction in force. The Company incurred severance cost of approximately $75,000 in connection with this reduction.
Previous wording
The Company incurred severance cost of approximately $122,000 associated with an headcount reduction during the three months ended March 31, 2023.
Current wording
The Company incurred severance cost of approximately $114,000 associated with a headcount reduction during the three months ended June 30, 2023.
Previous wording
The Company employee's headcount was 167 and 52 at March 31, 2024 and 2023, respectively.
Current wording
The Company employee's headcount was 150 and 232 at June 30, 2024 and 2023, respectively.
Previous wording
Data processing increased by $380,000 or 1118% for the three months ended March 31, 2024, compared to the same period in 2023.
Current wording
Data processing increased by $132,000, or 80%, for the three months ended June 30, 2024, compared to the same period in 2023. The Big Village Acquisition was completed in April 2023, and is the main driver of the increase in data processing.
Previous wording
Financing and other expense, net increased by $1.8 million, or 197%, for the three months ended March 31, 2024, compared to the same period in 2023. This increase was largely attributable to a $1.8 million 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 $1.2 million, or 54%, for the three months ended June 30, 2024, compared to the same period in 2023. This increase was largely attributable to a $1.1 million 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.
Previous wording
As of March 31, 2024, we had a cash balance of $4.9 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.”
Current wording
As of June 30, 2024, we had a cash balance of $2.7 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
Historically, the Company has incurred losses, which has resulted in an accumulated deficit of approximately $154.6 million as of March 31, 2024. Cash flows provided by (used in) operating activities were $920,000 and $(1.0) million for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, the Company had a working capital deficit of approximately $13.3 million, inclusive of $4.9 million in cash and cash equivalents.
Current wording
Historically, the Company has incurred losses, which have resulted in an accumulated deficit of approximately $159.8 million as of June 30, 2024. Cash flows used in operating activities were $385,000 and $3.6 million for the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024, the Company had a working capital deficit of approximately $13.3 million, inclusive of $2.7 million in cash and cash equivalents.
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 $10.3 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 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 $6.6 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 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
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 needs and continue as a going concern.
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.
Previous wording
The outstanding principal owed to Centre Lane Partners was $72.5 million and $70.2 million as of March 31, 2024 and December 31, 2023, respectively, and matures on April 20, 2026. Of the amount outstanding at March 31, 2024, $879,000, $3.0 million, $879,000, $879,000 and $879,000 are due on March 31, 2024, June 30, 2024, September 30, 2024 December 31, 2024 and March 31, 2025, respectively. The balance of $66.0 million is due in 2025 or later.
Current wording
The outstanding principal owed to Centre Lane Partners was $74.6 million and $70.2 million as of June 30, 2024 and December 31, 2023, respectively, and matures on April 20, 2026. Of the amount outstanding at June 30, 2024, approximately $2.3 million is due by December 31, 2024 with $1.9 million due by June 30, 2025. The balance of $70.4 million is due in 2025 or later.
Previous wording
The amount due under the Credit Agreement bears interest of 7.0% per annum plus the Secured Overnight Financing Rate ("SOFR"). At March 31, 2024, the SOFR was 5.33%, thus the overall interest rate on this facility was 12.33% per annum at March 31, 2024.
Current wording
The amount due under the Credit Agreement bears interest at 7.0% per annum plus the Secured Overnight Financing Rate ("SOFR"). At June 30, 2024, the SOFR was 5.30%, thus the overall interest rate on this facility was 12.30% per annum at June 30, 2024.
Previous wording
Interest is paid in kind at 12.33% per annum on approximately $35.2 million of the amount owed under the Credit Agreement, and at 15% per annum on $30.3 million of the amount owed under the Credit Agreement. With respect to the remaining $7.0 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 8.33% per annum at March 31, 2024).
Current wording
Interest is paid in kind at 12.30% per annum on approximately $35.4 million of the amount owed under the Credit Agreement, and at 15% per annum on $32.1 million of the amount owed under the Credit Agreement. With respect to the remaining $7.1 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 8.30% per annum at June 30, 2024).
Previous wording
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 March 31, 2024, approximately $121,000 inclusive of principal and interest is due and payable, and the outstanding principal continues to accrue interest.
Current wording
During November 2018, the Company issued a 10% convertible promissory note (the "Convertible Note") in the amount of $80,000 to the former 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 on the Convertible Note was due and payable in November 2023. At June 30, 2024, approximately $123,000 inclusive of principal and interest is due and payable, and the outstanding principal continues to accrue interest. The amount was paid subsequent to the period end.
Previous wording
The following table summarizes cash flow activities during for the three months ended March 31, 2024 and 2023:
Current wording
The following table summarizes cash flow activities during the six months ended June 30, 2024 and 2023:
Previous 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.
Current wording
For the six months ended June 30, 2024, used in operating activities was $385,000. The primary factors affecting our operating cash flows during the period were our net loss of $10.0 million, adjusted for non-cash charges of $962,000 for amortization of intangible assets, $1.6 million of amortization of debt discount, $4.5 million in interest paid in kind on the Centre Lane Senior Secured Credit Facility, $135,000 for stock 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 $2.6 million decrease in accounts receivable and a $1.2 million increase in deferred revenue. partially offset by a $993,000 decrease in accounts payable, and a $613,000 decrease in other liabilities.
Previous wording
For the three months ended March 31, 2023, cash used in operating activities was $1.0 million. The primary factors affecting our operating cash flows during the period were our net loss of $3.8 million, adjusted for non-cash charges of $386,000 for amortization of intangible assets, $305,000 of amortization of debt discount, $789,000 in interest paid in kind on the Centre Lane Senior Secured Credit Facility, $25,000 of stock-based compensation expense, $188,000 for the recoveries of expected credit losses, and a $1.4 million net change in operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities were a $2.5 million increase in accounts receivable and a $142,000 increase in prepaid and other current assets, offset by a $1.5 million decrease in accounts payable and accrued expense, a $72,000 decrease in interest payable on the Centre Lane Senior Secured Credit Facility, and a $237,000 decrease in deferred revenue.
Current wording
For the six months ended June 30, 2023, cash used in operating activities was $3.6 million. The primary factors affecting our operating cash flows during the period were our net loss of $9.9 million, adjusted for non-cash charges of $1.1 million for amortization of intangible assets, $844,000 of amortization of debt discount, $2.4 million in interest paid in kind on the Centre Lane Senior Secured Credit Facility, $58,000 of stock-based 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 $3.3 million increase in accounts receivable offset by a $2.3 million increase in accounts payable and accrued expense, an increase in other liabilities of $1.5 million, and a $627,000 increase in deferred revenue.
Previous wording
Cash used in investing activities of$2,000 and$5,000 for the three months ended March 31, 2024 and 2023, respectively, was due entirely to the purchase of property and equipment.
Current wording
Cash used in investing activities of$85,000 and$4,000 for the six months ended June 30, 2024 and 2023, respectively, was due to$14,000 and $4,000, respectively, for the purchase of property and equipment, and$71,000 for website enhancement during the six months ended June 30, 2024.
Previous wording
During the three months ended March 31, 2024, and 2023 the Company raised $0 and $1.5 million, respectively, of debt financing from the Centre Lane Senior Secured Credit Facility, which was used primarily to fund our working capital.
Current wording
During the six months ended June 30, 2024 and 2023, the Company raised $0 and $6.6 million of debt financing from the Centre Lane Senior Secured Credit Facility, which was used primarily to fund our working capital.
Previous wording
The Company leases its corporate offices in Boca Raton, Florida under a long-term non-cancellable lease agreement which was signed on June 14, 2022, with a lease term of five years beginning upon completion of improvements to the office space by the landlord, which was completed on September 12, 2022. The annual base rent is $100,000, with a provision for a 3% increase on each anniversary of the rent commencement date. The Company has the option to renew the lease for one additional five-year term. See Note 12, Leases for details regarding the Company’s lease.
Current wording
The Company leases its corporate offices in Boca Raton, Florida under a long-term non-cancellable lease agreement which was signed on June 14, 2022, with a lease term of five years beginning upon completion of improvements to the office space by the landlord, which was completed on September 12, 2022. The annual base rent is $100,000, with a provision for a 3% increase on each anniversary of the rent commencement date. The Company has the option to renew the lease for one additional five-year term.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Net loss from operations for the six months ended June 30, 2024 was $10.0 million as compared to a net loss of $9.9 million for the same period in 2023. The following is our analysis for the period.
Current report — wording carried from elsewhere
The Company focuses on digital publishing, advertising technology, consumer insights, creative and media services. Revenue generated by each division are set forth below:
Current report — wording carried from elsewhere
Financing and other expense, net increased by $2.9 million, or 96%, for the six months ended June 30, 2024, compared to the same period during 2023. This increase was largely attributable to $2.9 million or 86%, 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.