What changed in this filing

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Item 1A. Risk Factors

2025-03-10 compared with 2024-04-01 · 75 added, 54 removed, 438 unchanged (23% of the section changed)

7 unchanged sentences

• We have a history of losses.

• We may not be able to refinance, extend or repay our substantial indebtedness owed to Centre Lane, which would have a material adverse effect on our financial condition and ability to continue as a going concern.

• We may not be able to refinance, extend or repay our substantial indebtedness owed to Centre Lane Partners ("Centre Lane") which would have a material adverse effect on our financial condition and ability to continue as a going concern.

• Our secured indebtedness may impair our ability to operate our business.

10 unchanged sentences

• If advertising on the internet loses its appeal, our revenue could decline.

• Our success is dependent upon our ability to effectively expand and manage our relationships with our publishers.

• Our success is dependent in part upon our ability to effectively expand and manage our relationships with our publishers.

• Online security breaches or other disruptions of our information technology systems could harm our business.

12 unchanged sentences

• Our systems may fail due to natural disasters, telecommunications failures and other events, any of which would limit user traffic.

• We are unable to predict the impacts of COVID-19 and any other future pandemic or outbreak of disease on our business.

• We are unable to predict the impacts of any potential pandemic or outbreak of disease on our business.

• Privacy violations could impair our business.

13 unchanged sentences

• There is a limited public market for our common stock.

• We have outstanding convertible notes, options and warrants to purchase approximately 19% of our outstanding Common Stock, which will have a dilutive effect on our existing shareholders if converted or exercised.

• We have outstanding options and warrants to purchase approximately 12% of our outstanding common stock, which will have a dilutive effect on our existing shareholders if converted or exercised.

• The concentration of stock ownership and control by Centre Lane, and our debt transaction with Centre Lane, may cause conflicts of interests that may adversely affect us.

12 unchanged sentences

We may not be able to refinance, extend or repay our substantial indebtedness owed to Centre Lane, which would have a material adverse effect on our financial condition and ability to continue as a going concern.

We anticipate that we will need a significant amount of cash in the near future in order to repay the portion of our outstanding debt obligations owed under the Centre Lane Senior Secured Credit Facility as and when they mature during 2024.

As of December 31, 2024, we owed Centre Lane $78.8 million under the Centre Lane Senior Secured Credit Facility.

Of this amount, $879,000, $3.0 million, $879,000 and $879,000 is due on March 31, 2024, June 30, 2024, September 30, 2024 and December 31, 2024, respectively.

The balance of $64.6 million is due in 2025 or later.

Of this amount, $952,000 is due on each of March 31, 2025, June 30, 2025, September 30, 2025 and December 31, 2025, respectively.

The remaining balance of $75.0 million is due in 2026 or later.

If we have insufficient cash to pay these amounts and we are otherwise unable to extend the maturity dates or refinance these obligations, we would be in default.

17 unchanged sentences

We have experienced substantial and recurring losses from operations, which losses have caused an accumulated deficit of $166.9 million at December 31, 2024.

Our independent registered public accounting firm’s report on our audited financial statements includes an explanatory paragraph related to substantial doubt about the Company’s ability to continue as a going concern.

Our independent registered public accounting firm’s report on our audited consolidated financial statements includes an explanatory paragraph related to substantial doubt about the Company’s ability to continue as a going concern.

Our audited consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

1 unchanged sentence

We must maintain effective financial and management systems and internal controls to meet our public company reporting obligations.

Moreover, the Sarbanes-Oxley ("SOX") requires, among other things, that we maintain effective

disclosure controls and procedures and internal control over financial reporting.

If we have a material weakness or deficiency in our internal control over financial reporting, we may not detect errors on a timely basis and our financial statements may be materially misstated.

Moreover, the Sarbanes-Oxley ("SOX") requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.

If we have a material weakness or deficiency in our internal control over financial reporting, we may not detect errors on a timely basis and our consolidated financial statements may be materially misstated.

Effective internal controls are necessary for us to produce reliable financial reports and are important to prevent fraud.

1 unchanged sentence

We depend upon a substantial portion of our revenues from a limited number of customers.

For the year ended December 31, 2023, two customers represented 23.0% of our revenue, and for the year ended December 31, 2022, one customer represented 37.7% of our revenue.

For the year ended December 31, 2024, one customer represented 12.2% of our revenue, and for the year ended December 31, 2023, two customers represented 23.0% of our revenue, with one customer representing 10.0% of our revenue, and the other representing 13.0% of our revenue.

The loss of these customers could have a material adverse impact on our results of operations in future periods.

There are inherent risks whenever a large percentage of total revenues are concentrated with a limited number of customers.

It is not possible for us to predict the future level of demand for our services that will be generated by these customer.

It is not possible for us to predict the future level of demand for our services that will be generated by these customers.

In addition, revenues from these customers may fluctuate from time to time based on the commencement and completion of projects, the timing of which may be affected by market conditions or other facts, some of which may be outside of our control.

If these customers experiences declining or delayed sales due to market, economic or competitive conditions, we could be pressured to reduce the prices we charge for our services or we could lose two major customers.

These customers may generally terminate their business with us upon 10 and 30 days’ notice, respectively.

If these customers experience declining or delayed sales due to market, economic or competitive conditions, we could be pressured to reduce the prices we charge for our services or we could lose major customers.

These customers have the option to cancel their agreements with us by providing advance written notice with the time period required for the advance notice being not longer than 30 days.

Any such development could have an adverse effect on our margins and financial position and would negatively affect our revenue, results of operations and/or the trading price of our common stock.

54 unchanged sentences

• regulatory actions may negatively impact our business practices.

If the number of companies who purchase online advertising and promotional services from us does not grow, we may experience difficulty in attracting publishers, and our revenue could decline.

Our success is dependent upon our ability to effectively expand and manage our relationships with our publishers.

Outside of our owned and operated websites, we are dependent upon our publishing partners to provide the media we sell.

We depend on these publishers to make their respective media inventories available to us to use in connection with the campaigns that we manage, create or market.

Our growth depends, in part, on our ability to expand and maintain our publisher relationships within our network and to have access to new sources of media inventory such as new partner websites and Facebook pages that offer attractive demographics, innovative and quality content and growing Web user traffic volume.

Our ability to attract new publishers to our networks and to retain Web publishers currently in our networks will depend on various factors, some of which are beyond our control.

These factors include, but are not limited to, our ability to introduce new and innovative products and services, our pricing policies, and the cost-efficiency to Web publishers of outsourcing their advertising sales.

If the number of companies who purchase online advertising and promotional services from us does not grow, our revenue could decline.

Our success is dependent in part upon our ability to effectively expand and manage our relationships with our publishers.

Outside of our owned and operated websites, our AdTech business is dependent upon our publishing partners to provide the media it sells.

Our AdTech business depends on these publishers to make their respective media inventories available to it to use in connection with the campaigns that it manages, creates, or markets.

Our AdTech business's growth depends, in part, on its ability to expand and maintain its publisher relationships within its network and to have access to new sources of media inventory such as new partner websites and Facebook pages that offer attractive demographics, innovative and quality content, and growing Web user traffic volume.

Our AdTech business's ability to attract new publishers to its networks and to retain Web publishers currently in its networks will depend on various factors, some of which are beyond our control.

These factors include, but are not limited to, our AdTech business's ability to introduce new and innovative products and services, its pricing policies, and the cost-efficiency to Web publishers of outsourcing their advertising sales.

In addition, the number of competing intermediaries that purchase media inventory from Web publishers continues to increase.

In the event we are not able to maintain effective relationships with our publishers, our ability to distribute our advertising campaigns will be greatly hindered which will reduce the value of our services and adversely impact our results of operations in future periods.

In the event our AdTech business is not able to maintain effective relationships with its publishers, its ability to distribute advertising campaigns will be greatly hindered which will reduce the value of its services and adversely impact its results of operations in future periods.

Online security breaches or other disruptions of our information technology systems could harm our business.

18 unchanged sentences

If its users do not perceive its existing content to be of high quality, or if we introduce new content or enter into new business ventures that are not favorably perceived by users, we may not be successful in promoting and maintaining the Wild Sky Media brand.

Any change in the focus of our operations as a result of the content we provide

creates a risk of diluting our brand, confusing users and decreasing the value of our website traffic base to advertisers.

Any change in the focus of our operations as a result of the content we provide creates a risk of diluting our brand, confusing users and decreasing the value of our website traffic base to advertisers.

If we are unable to maintain or grow the Wild Sky Media brand, our business could be harmed.

32 unchanged sentences

The markets for our products and services are characterized by rapidly changing technology, evolving industry standards and increasingly sophisticated customer requirements.

The introduction of products embodying new technology

and the emergence of new industry standards can negatively impact the marketability of our existing products and can exert price pressures on existing products.

The introduction of products embodying new technology and the emergence of new industry standards can negatively impact the marketability of our existing products and can exert price pressures on existing products.

Additionally, if our websites or services do not work as intended, or if we are unable to upgrade the functionality of our websites or services as needed to keep up with the rapid evolution of technology , our websites or services may not operate properly or as efficiently as those of our competitors, which could harm our business.

58 unchanged sentences

Any of these system failures could harm our business, financial condition and results of operations.

We are unable to predict the impacts of COVID-19 and any other future pandemic or outbreak of disease on our business.

Our business and operations could be adversely affected by future health pandemics or outbreak of disease, including the COVID-19 pandemic, impacting the markets and communities in which we, our third-party vendors and customers operate.

Because our Company operates in the digital advertising industry, unlike a brick and mortar-based company, predicting the impact of the COVID-19 pandemic or other future health pandemics on our Company is difficult.

The COVID-19 pandemic has affected our operations in the past and may continue to do so in the future.

For example, with the COVID-19 pandemic, we experienced a pause in marketing campaigns by a limited number of clients and an adverse impact from several suppliers.

We also experienced interruptions in our daily operations, including financial reporting process, as a result of certain policies and actions put into place to mitigate the effects of the COVID-19 pandemic.

We expect the revenue impact on our industry could vary dramatically by vertical.

For example, we would expect to see less advertising demand from the travel, leisure and hospitality verticals and more advertising demand in the health, technology, insurance, and pharmaceutical verticals.

We will continue to assess the impact of the COVID-19 pandemic on our Company, however, at this time we are unable to predict all possible impacts on our Company, our operations, and our revenues.

We are unable to predict the impacts of any potential pandemic or outbreak of disease on our business.

Our business and operations could be adversely affected by future health pandemics or outbreaks of disease, impacting the markets and communities in which we, our third-party vendors and customers operate.

Because our Company operates in the digital advertising industry, unlike a brick and mortar-based company, predicting the impact of future health pandemics on our Company is difficult.

In addition, we cannot predict the impact any future pandemic or outbreak of a disease, or a catastrophic event will have on our business partners and third-party vendors, and we may be adversely impacted as a result of the adverse impact our third-party vendors suffer.

8 unchanged sentences

In addition, legislative or regulatory requirements may heighten these concerns if businesses must notify internet users that the data may be used by marketing entities to direct product promotion and advertising to the user.

Other countries and political entities, such as the EU, have adopted such legislation or regulatory requirements.

may adopt similar legislation or regulatory requirements in the future.

For example, California has adopted the California Consumer Privacy Act (the “CCPA”), as amended by the California Privacy Rights Act (the “CPRA”), which is intended to protect consumer privacy rights, and, among other things, provide California residents with the ability to know what information companies collect about them, to request, in certain circumstances, the deletion of such information, and to affirmatively opt out of the sale or “sharing” of their personal information.

Eighteen other states have passed comprehensive privacy laws similar to the CCPA and the CPRA, and a federal consumer privacy law has also been proposed.

Similar laws may be implemented in other jurisdictions that we do business in and in ways that may be more restrictive than the CCPA or the CPRA, increasing the cost of compliance, as well as the risk of noncompliance, on our business.

Other countries and political entities, such as the EU, have also adopted such legislation or regulatory requirements.

If consumer privacy concerns are not adequately addressed, our business, financial condition and results of operations could be materially harmed.

42 unchanged sentences

New tools used by consumers to limit data collection, regulatory restrictions and potential changes to web browsers and mobile operating systems affect our ability to collect such data, which could harm our operating results and financial condition.

The ability of our platform to deliver high quality solutions to our customers is based on our technology’s

capability to derive relevant, actionable insights from the data that we ingest into our systems and our ability to execute marketing programs across digital channels.

The ability of our AdTech business to deliver high quality solutions to its customers is based on its technology’s capability to derive relevant, actionable insights from the data that it ingests into its systems and its ability to execute marketing programs across digital channels.

The future of digital data collection practices is evolving, with some prominent companies in the industry recently announcing that they will implement their own individual data collection tools and phase out others.

13 unchanged sentences

The rejection of digital advertising by consumers, through opt-in, opt-out or ad-blocking technologies or other means or the restriction on the use of third party-cookies, mobile device identifiers or other tracking technologies, could adversely affect our business, results of operations, and financial condition.

Our advertising technology division, research division, and publishing division use, in various ways, “cookies,” or small text files placed on consumer devices when an Internet browser is used, as well as mobile device identifiers, to gather data in connection with certain of their products and offerings.

Our AdTech division, research division, and publishing division use, in various ways, “cookies,” or small text files placed on consumer devices when an Internet browser is used, as well as mobile device identifiers, to gather data in connection with certain of their products and offerings.

These cookies and mobile device identifiers may record information such as when a consumer views or clicks on an advertisement, when a consumer visits a website, the consumer’s location, and browser or other device information.

Third party vendors may also share their information about consumers’ interests with us or give us permission to use their cookies and mobile device identifiers.

We use data from cookies, mobile device identifiers, and other tracking technologies for various purposes, including—for our advertising technology division—helping advertisers decide whether to bid on, and how to price, an ad impression in a certain location, at a given time, for a particular consumer.

We use data from cookies, mobile device identifiers, and other tracking technologies for various purposes, including—for our AdTech division—helping advertisers decide whether to bid on, and how to price, an ad impression in a certain location, at a given time, for a particular consumer.

Without cookies, mobile device identifiers, and other tracking technology data:

(i) transactions processed through our advertising technology division would be executed with less insight into consumer activity, reducing the precision of advertisers' decisions about which impressions to purchase for an advertising campaign, which could make placement identifiers advertising through our platform less valuable, and harm our revenue;

(i) transactions processed through our AdTech division would be executed with less insight into consumer activity, reducing the precision of advertisers' decisions about which impressions to purchase for an advertising campaign, which could make placement identifiers advertising through our platform less valuable, and harm our revenue;

(ii) we might no longer be able to continue to provide certain products we currently offer, such as certain audience segments;

6 unchanged sentences

As companies replace cookies, it is possible that such companies may rely on proprietary algorithms or statistical methods to track consumers without cookies, or may utilize log-in credentials entered by consumers into other web properties owned by these companies, such as their email services, to track web usage, including usage across multiple devices.

Alternatively, such companies may build different and potentially proprietary consumer tracking methods into

their widely-used web browsers.

Alternatively, such companies may build different and potentially proprietary consumer tracking methods into their widely-used web browsers.

Although we believe it is possible for our businesses to adapt and continue to provide their services and products without cookies, this transition could be more disruptive, slower, or more expensive than we currently anticipate, and could materially affect our ability to serve our customers, and our business, results of operations, and financial condition could be adversely affected.

27 unchanged sentences

Our customer agreements generally restrict the use of our confidential information solely to such customer’s use in connection with their use of our services.

In spite of such limitations, reverse engineering our software or

the theft or misuse of our confidential information could occur by customers or other third parties who have access to our technology.

In spite of such limitations, reverse engineering our software or the theft or misuse of our confidential information could occur by customers or other third parties who have access to our technology.

We also endeavor to enter into agreements with our employees and contractors in order to limit access to and disclosure of our confidential information, as well as to clarify rights to intellectual property and technology associated with our business.

27 unchanged sentences

There is extremely limited and sporadic trading of our common stock, and no assurance can be given, when, if ever, an active trading market will develop or, if developed, that it will be sustained.

We have outstanding convertible notes, options and warrants to purchase approximately 19% of our outstanding Common Stock, which will have a dilutive effect on our existing shareholders if converted or exercised.

As of December 31, 2023, we had 171,277,959 shares of Common Stock outstanding, with convertible notes, options, and warrants outstanding to purchase an aggregate of 32,290,426 shares of Common Stock.

We have outstanding options and warrants to purchase approximately 12% of our outstanding common stock, which will have a dilutive effect on our existing shareholders if converted or exercised.

As of December 31, 2024, we had 176,114,652 shares of common stock outstanding, with options and warrants outstanding to purchase an aggregate of 21,032,733 shares of common stock.

The conversion or possible exercise of the preferred notes, warrants and/or options, would increase the total outstanding shares of common stock by approximately 12% at December 31, 2024, which will have a dilutive effect on our existing shareholders.

23 unchanged sentences

As of December 31, 2024, Mr.

Kip Speyer, our Chairman of the Board, together with members of our Board, collectively beneficially owned approximately 17.6% of our Common Stock.

In addition, 10th Lane Partners LP, an affiliate of Centre Lane, beneficially owns approximately 21.2% of our Common Stock and an additional individual shareholder owns an additional 6.9% of our Common Stock.

As a result of the

concentrated ownership of the Company's stock, these people collectively may be able to control all matters requiring shareholder approval, including the election of directors and approval of mergers and other significant corporate transactions.

Kip Speyer, our former Chairman of the Board, beneficially owned approximately 17.9% of our common stock.

In addition, 10th Lane Partners LP, an affiliate of Centre Lane, beneficially owns approximately 23.6% of our common stock (which amount includes the holdings of two other Centre Lane affiliates) and an individual shareholder owns an additional 6.1% of our common stock.

As a result of the concentrated ownership of the Company's stock, these people collectively may be able to control all matters requiring shareholder approval, including the election of directors and approval of mergers and other significant corporate transactions.

This concentration of ownership may have the effect of delaying, preventing or deterring a change in control of our Company.

10 unchanged sentences

As of the filing of this Annual Report on Form 10-K, there is no outstanding preferred stock.

UNRESOL VED STAFF COMMENTS

CYBERSECURITY

Risk management and strategy

Cybersecurity is a critical aspect of our operations, and our board of directors and management prioritize safeguarding our digital assets and ensuring the integrity and confidentiality of sensitive information to protect our assets, customers, and stakeholders.

Our cybersecurity program is managed by our Global IT Director and overseen by our executive leadership team and board of directors.

It encompasses risk management, a management framework, governance, education and training across the organization, SOC2 compliance, and an incident response protocol.

We employ a proactive risk management strategy to identify, assess, track, and mitigate cyber security risks.

Our risk assessment process involves continuous monitoring of our IT infrastructure, external vulnerability assessments, and reviews of our third-party relationships.

We prioritize risks based on their potential impact on our operations and implement targeted controls and safeguards to mitigate identified threats.

Our Cybersecurity management framework is aligned with the Cybersecurity Framework (CSF) developed by the National Institute of Standards and Technology (NIST) and COBIT 2019.

This framework provides a structured approach to managing our policies, standards, and processes, improving our cyber security posture.

Additionally, we maintain SOC2 compliance, demonstrating our adherence to industry-recognized security standards and best practices.

Our board of directors and executive leadership team, through our Information Security Executive Charter, oversees our risk management program, of which cybersecurity represents an important component.

Our Global IT Director is responsible for managing our risk management program, including our cybersecurity strategies and initiatives and the periodic review of our policies, standards, and risks.

Our Global IT Director has over 25 years of experience in technology and security.

Our board of directors and executive leadership approves cyber security strategies, initiatives, and investments to ensure alignment with business objectives and risk tolerance.

In the event of a cyber security incident, we would follow an incident response protocol that includes procedures for incident tracking, escalation, containment, eradication, and recovery.

As part of our incident response process, we would adhere to SEC reporting requirements related to cyber security incidents, providing timely and transparent disclosures as necessary.

Cybersecurity threats, and their evolving nature, pose a risk to us and our strategy, results of operations, and financial condition in the future.

Our risk factors include further detail about the cybersecurity risks we face.

To date, cybersecurity threats or incidents have not materially affected us or our operations.

Our focus on risk management, governance, compliance, and incident response is intended to mitigate the potential harm posed by evolving cyber threats and challenges.

DESCRIPTION OF PROPERTY

The Company leases its corporate offices in Boca Raton, Florida under a long-term non-cancellable lease agreement.

An addendum to the lease dated June 14, 2022 sets a lease renewal term of five years beginning upon completion of improvements to the office space by the landlord, which were completed on September 12, 2022.

The annual base rent as of the beginning of this renewal term is approximately $143,000, 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.

During the year ended December 31, 2024, the Company entered into two sublease agreements for its Boca Raton corporate office suites.

The subleases will continue for the remaining term on the initial lease agreement of three years with no option to extend.

The aggregate minimum annual rental income under the subleases is approximately $137,000 with 3% escalations per annum.

The Company retains the ability to use the address as its mailing address.

As of December 31, 2024, all of the Company's employees work remotely.

We periodically review our facility requirements and may acquire new facilities based on evolving business needs.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors