What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-07 compared with 2025-08-07 · 142 added, 130 removed, 285 unchanged (49% of the section changed)

49 unchanged sentences

Limited Number of Customers .

During the six months ended June 30, 2025 one customer represented 15.6% of revenue.

During the six months ended June 30, 2024 one customer represented 14.2% of revenue.

During the nine months ended September 30, 2025 one customer represented 14.4% of revenue.

During the nine months ended September 30, 2024 one customer represented 13.4% of revenue.

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

12 unchanged sentences

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, 2025 and 2024:

Three Months Ended June 30,

Six Months Ended June 30,

The following is our analysis for the three and nine months ended September 30, 2025 and 2024:

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

10 unchanged sentences

• provision of creative and media services to advertisers.

Revenue increased $2.4 million, or 18%, for the three months ended June 30, 2025, compared to the same period in 2024.

Revenue increased $4.1 million, or 16%, for the six months ended June 30, 2025, compared to the same period in 2024.

See below for a detailed analysis of revenue for the three and six months ended June 30, 2025, and 2024.

Revenue decreased by $211,000, or 1%, for the three months ended September 30, 2025, compared to the same period in 2024.

Revenue increased by $3.9 million, or 10%, for the nine months ended September 30, 2025, compared to the same period in 2024.

See below for a detailed analysis of revenue for the three and nine months ended September 30, 2025, and 2024.

Cost of Revenue

Cost of revenue includes internal labor and payment to third parties for services performed to drive revenue, which includes the publisher cost paid for ad exchange on third party sites, advertising fees, personnel costs, technology and data related costs, fees paid for content creation, influencers, writers, and sales commission.

Cost of revenue increased approximately $2.8 million, or 29%, for the three months ended June 30, 2025 compared to the same period in 2024.

Cost of revenue increased approximately $3.4 million, or 18%, for the six months ended June 30, 2025, compared to the same period in 2024.

See below for a detailed analysis of cost of revenue for the three and six months ended June 30, 2025, and 2024.

Cost of revenue decreased by $78,000, or 1%, for the three months ended September 30, 2025 compared to the same period in 2024.

Cost of revenue increased by $3.3 million, or 12%, for the nine months ended September 30, 2025, compared to the same period in 2024.

See below for a detailed analysis of cost of revenue for the three and nine months ended September 30, 2025, and 2024.

General and Administrative Expenses

4 unchanged sentences

and (v) facility costs.

General and administrative expenses decreased approximately $1.3 million, or 24%, for the three months ended June 30, 2025 compared to the same period in 2024.

General and administrative expenses decreased approximately $2.0 million, or 19%, for the six months ended June 30, 2025, compared to the same period in 2024.

See below for a detailed analysis of general and administrative expenses for the three and six months ended June 30, 2025 and 2024.

General and administrative expenses decreased by $315,000, or 7%, for the three months ended September 30, 2025 compared to the same period in 2024.

General and administrative expenses decreased by $2.3 million, or 16%, for the nine months ended September 30, 2025, compared to the same period in 2024.

See below for a detailed analysis of general and administrative expenses for the three and nine months ended September 30, 2025 and 2024.

Results of Operations

1 unchanged sentence

This analysis should be read in conjunction with the consolidated financial statements and the notes to those statements that are included elsewhere in this Quarterly Report on Form 10-Q.

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024

Net loss for the quarter ended June 30, 2025 was $4.1 million as compared to a net loss of $5.2 million for the same period in 2024.

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

Net loss for the quarter ended September 30, 2025 was $2.8 million as compared to a net loss of $3.3 million for the same period in 2024.

The following is our analysis for the period:

Three Months Ended June 30,

Three Months Ended September 30,

(in thousands)

1 unchanged sentence

General and administrative expenses

Loss from operations

Income (loss) from operations

Financing and other expense, net

Gross margin percentage

Our revenue increased $2.4 million, or 18%, for the three months ended June 30, 2025, compared to the same period in 2024.

The increase in revenue was largely attributable to our advertising technology division.

Our revenue decreased by $211,000, or 1%, for the three months ended September 30, 2025, compared to the same period in 2024.

The Company focuses on digital publishing, advertising technology, consumer insights, creative services, and media services.

Changes in revenue generated by each such division are set forth below:

Three Months Ended June 30,

Three Months Ended September 30,

(in thousands)

5 unchanged sentences

Digital Publishing

Digital publishing revenue decreased by $157,000, or 30%, for the three months ended June 30, 2025, compared to the same period in 2024.

Approximately $359,000, or 2%, of the Company’s revenue for the three months ended June 30, 2025, was generated from our digital publishing customers, compared to $516,000, or 4%, for the same period in 2024.

Digital publishing revenue decreased by $239,000, or 46%, for the three months ended September 30, 2025, compared to the same period in 2024.

Approximately $280,000, or 2%, of the Company’s revenue for the three months ended September 30, 2025, was generated from our digital publishing customers, compared to $519,000, or 4%, for the same period in 2024.

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.

Advertising Technology

Advertising technology revenue increased by $1.5 million, or 43%, for the three months ended June 30, 2025, compared to the same period in 2024.

Approximately $5.1 million, or 33%, of the Company’s revenue for the three months ended June 30, 2025, was generated from our advertising technology customers compared to $3.6 million, or 28%, for the same period in 2024.

This growth was driven by our ability to leverage our resources to attract top advertisers, which in turn has allowed us to onboard premium publishers.

Advertising technology revenue increased by $412,000, or 9%, for the three months ended September 30, 2025, compared to the same period in 2024.

Approximately $5.1 million, or 36%, of the Company’s revenue for the three months ended September 30, 2025, was generated from our advertising technology customers compared to $4.7 million, or 33%, for the same period in 2024.

This growth was driven by our ability to leverage our resources to attract top advertisers, which in turn allowed us to onboard premium publishers.

This led to an increase in volume, as well as rates and overall revenue.

Consumer Insights

Consumer insights revenue increased by $655,000, or 10%, for the three months ended June 30, 2025, compared to the same period in 2024.

Approximately $7.3 million, or 48%, of the Company’s revenue for the three months ended June 30, 2025 was generated from our consumer insights customers compared to $6.7 million, or 51%, for the same period in 2024.

This growth was driven by an increase in contract value for certain larger tier revenue customers.

Consumer insights revenue decreased by $403,000, or 6%, for the three months ended September 30, 2025, compared to the same period in 2024.

Approximately $6.4 million, or 46%, of the Company’s revenue for the three months ended September 30, 2025 was generated from our consumer insights customers compared to $6.8 million, or 48%, for the same period in 2024.

Creative Services

Creative services revenue increased by $76,000, or 5%, for the three months ended June 30, 2025, compared to the same period in 2024.

Approximately $1.7 million, or 11%, of the Company’s revenue for the three months ended June 30, 2025, was generated from our creative services customers compared to $1.7 million, or 13% for the same period in 2024.

Creative services revenue decreased by $119,000, or 7%, for the three months ended September 30, 2025, compared to the same period in 2024.

Approximately $1.5 million, or 11%, of the Company’s revenue for the three months ended September 30, 2025, was generated from our creative services customers compared to $1.6 million, or 11% for the same period in 2024.

Media Services

Media services revenue increased by $303,000, or 54%, for the three months ended June 30, 2025, compared to the same period in 2024.

Approximately $869,000, or 6%, of the Company’s revenue for the three months ended June 30, 2025, was generated from our media services customers compared to $566,000, or 4%, for the same period in 2024.

Media services revenue increased by $138,000, or 23%, for the three months ended September 30, 2025, compared to the same period in 2024.

Approximately $728,000, or 5%, of the Company’s revenue for the three months ended September 30, 2025, was generated from our media services customers compared to $590,000, or 4%, for the same period in 2024.

This increase was primarily related to the timing of customer needs.

Cost of Revenue

Three Months Ended June 30,

Three Months Ended September 30,

(in thousands)

5 unchanged sentences

Sales commissions

Cost of revenue increased $2.8 million, or 29%, for the three months ended June 30, 2025, compared to the same period for 2024.

This increase is due to the factors discussed below:

Cost of revenue decreased by $78,000, or 1%, for the three months ended September 30, 2025, compared to the same period for 2024.

This decrease is due to the factors discussed below:

Direct Salaries and Labor Cost

Direct salaries and labor cost decreased $282,000, or 13%, for the three months ended June 30, 2025, when compared to the same period in 2024.

Approximately $1.9 million, or 15%, of the Company's cost of revenue for the three months ended June 30, 2025, was a result of direct salaries and labor cost compared to $2.1 million, or 22% for the same period in 2024.

This decrease is related to our continued efforts to decrease headcount.

Direct salaries and labor cost remained consistent, with a slight increase of $5,000 for the three months ended September 30, 2025, when compared to the same period in 2024.

Approximately $1.5 million, or 16%, of the Company's cost of revenue for the three months ended September 30, 2025, was a result of direct salaries and labor cost compared to $1.5 million, or 15%, for the same period in 2024.

These costs represent salary and labor cost of employees that work directly on customer projects for our consumer insights, creative services, and media services divisions.

Direct Project Cost

Direct project cost increased $1.9 million, or 61%, for the three months ended June 30, 2025 when compared to the same period in 2024.

Approximately $4.9 million, or 40%, of the Company's cost of revenue for the three months ended June 30, 2025, was a result of direct project cost compared to $3.1 million, or 32%, during the same period in 2024.

This increase was consistent with the increase noted in revenue from our media services and consumer insights division.

Direct project cost decreased by $613,000, or 20%, for the three months ended September 30, 2025 when compared to the same period in 2024.

Approximately $2.4 million, or 25%, of the Company's cost of revenue for the three months ended September 30, 2025, was a result of direct project cost compared to $3.0 million, or 31%, during the same period in 2024.

This decrease was consistent with the decrease in revenue from our consumer insights division.

These costs include payments made to third-parties that are directly attributable to the completion of projects that allow for revenue recognition for our consumer insights, creative services, and media services divisions.

Non-Direct Project Cost

Non-direct project cost decreased $463,000, or 29%, for the three months ended June 30, 2025 when compared to the same period in 2024.

Approximately $1.2 million, or 9%, of the Company's cost of revenue for the three months ended June 30, 2025, was a result of non-direct project cost compared to $1.6 million, or 17%, for the same period in 2024.

Non-direct project cost decreased by $229,000, or 13%, for the three months ended September 30, 2025 when compared to the same period in 2024.

Approximately $1.5 million, or 16%, of the Company's cost of revenue for the three months ended September 30, 2025, was a result of non-direct project cost compared to $1.8 million, or 18%, for the same period in 2024.

This decrease is related to our continued efforts to decrease headcount.

1 unchanged sentence

Publisher Cost

Publisher cost was $3.7 million, which represents 30% of overall cost of revenue, and $2.3 million, or 24%, of overall cost of revenue, for the three months ended June 30, 2025 and 2024, respectively.

We experienced an increase of $1.4 million, or 61%, for the three months ended June 30, 2025, compared to the same period in 2024.

This increase is consistent with the increase noted in revenue for our advertising technology division.

Publisher cost was $3.7 million, which represents 39% of overall cost of revenue, and $3.0 million, or 31%, of overall cost of revenue, for the three months ended September 30, 2025 and 2024, respectively.

We experienced an increase of $716,000, or 24%, for the three months ended September 30, 2025, compared to the same period in 2024.

In 2024, we ran political campaigns with margins better than our average.

We did not run similar campaigns in 2025, and as a result, in 2025 our margins were lower.

In 2025, we have had higher costs with publishers in connection with the revenue obtained from ad sales.

These costs represent payments to media providers and website publishers.

Gross margin was $3.0 million and $3.4 million for the three months ended June 30, 2025 and 2024, respectively.

Our gross margin decreased $385,000, or 11%, for the three months ended June 30, 2025, when compared to the same period of 2024.

This decline was a result of the increase in cost of revenue.

Gross margin as a percentage of revenue decreased to 20% for the three months ended June 30, 2025 compared to 26% for the same period of 2024.

Gross margin was $4.3 million and $4.4 million for the three months ended September 30, 2025 and 2024, respectively.

Our gross margin decreased by $133,000, or 3%, for the three months ended September 30, 2025, when compared to the same period of 2024.

Gross margin as a percentage of revenue remained consistent at 31% for the three months ended September 30, 2025 and 2024.

General and Administrative Expenses

Three Months Ended June 30,

Three Months Ended September 30,

(in thousands)

4 unchanged sentences

Gross margin as a percentage of general and administrative expense

General and administrative expenses decreased by $1.3 million, or 24%, for the three months ended June 30, 2025, compared to the same period in 2024.

General and administrative expenses decreased by $315,000, or 7%, for the three months ended September 30, 2025, compared to the same period in 2024.

The decrease is due to a combination of factors as discussed below:

Personnel Cost

Personnel cost decreased by approximately $565,000, or 24%, for the three months ended June 30, 2025, compared to the same period in 2024.

Personnel cost decreased by $270,000, or 14%, for the three months ended September 30, 2025, compared to the same period in 2024.

This change was mainly driven by a decrease in the Company's head count by a net change of 28 employees.

The Company employee's headcount was 115 and 150 at June 30, 2025 and 2024, respectively.

Legal fees decreased by $306,000, or 60%, for the three months ended June 30, 2025, compared to the same period in 2024.

The Company employee's headcount was 113 and 141 at September 30, 2025 and 2024, respectively.

Legal fees increased by $302,000, or 191%, for the three months ended September 30, 2025, compared to the same period in 2024.

This increase was due largely to payments made as part of the ongoing litigation with Ladenburg.

See Note 16, Commitments and Contingencies, to the consolidated financial statements.

Website Expenses

Website expenses decreased by $231,000, or 61%, for the three months ended June 30, 2025, compared to the same period in 2024.

Website expenses decreased by $153,000, or 44%, for the three months ended September 30, 2025, compared to the same period in 2024.

This decrease was related to a reclassification of certain components of software costs from website expenses to cost of revenue.

Data Processing

Data processing decreased by $155,000, or 52%, for the three months ended June 30, 2025, compared to the same period in 2024.

This reduction was due largely to the reclassification of certain components of data processing costs from data processing to website expenses.

Financing Expense (Income)

Three Months Ended June 30,

Three Months Ended September 30,

(in thousands)

2 unchanged sentences

Total financing and other expense, net

Financing and other expense, net decreased by $222,000, or 7%, for the three months ended June 30, 2025, compared to the same period in 2024.

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Net loss for the six months ended June 30, 2025 was $7.3 million as compared to a net loss of $10.0 million for the same period in 2024.

Financing and other expense, net, decreased by $242,000, or 7%, for the three months ended September 30, 2025, compared to the same period in 2024.

This decrease is related to a decrease in interest paid under the Centre Lane Senior Secured Credit Facility due to greater capitalization of interest in the current year.

See Note 10, Centre Lane Senior Secured Credit Facility, to the consolidated financial statements.

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

Net loss for the nine months ended September 30, 2025 was $10.1 million as compared to a net loss of $13.2 million for the same period in 2024.

The following is our analysis for the period:

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands)

4 unchanged sentences

Gross margin percentage

Our revenue increased $4.1 million, or 16%, for the six months ended June 30, 2025, compared to the same period in 2024.

Our revenue increased by $3.9 million, or 10%, for the nine months ended September 30, 2025, compared to the same period in 2024.

The increase in revenue was largely attributable to our advertising technology division.

1 unchanged sentence

Changes in revenue generated by each such division are set forth below:

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands)

5 unchanged sentences

Digital Publishing

Digital publishing revenue decreased by $8,000, or 1%, for the six months ended June 30, 2025, compared to the same period in 2024.

Approximately $942,000, or 3%, of the Company’s revenue for the six months ended June 30, 2025 was generated from our digital publishing customers, compared to $950,000, or 4%, for the same period in 2024.

Digital publishing revenue decreased by $246,000, or 17%, for the nine months ended September 30, 2025, compared to the same period in 2024.

Approximately $1.2 million, or 3%, of the Company’s revenue for the nine months ended September 30, 2025 was generated from our digital publishing customers, compared to $1.5 million, or 4%, for the same period in 2024.

Advertising Technology

Advertising technology revenue increased by $3.1 million, or 50%, for the six months ended June 30, 2025, compared to the same period in 2024.

Approximately $9.3 million or 32% of the Company’s revenue for the six months ended June 30, 2025 was generated from our advertising technology customers compared to $6.2 million, or 24%, for the same period in 2024.

Advertising technology revenue increased by $3.5 million, or 33%, for the nine months ended September 30, 2025, compared to the same period in 2024.

Approximately $14.4 million, or 33%, of the Company’s revenue for the nine months ended September 30, 2025 was generated from our advertising technology customers compared to $10.9 million, or 28%, for the same period in 2024.

This growth was driven by our ability to leverage our resources to attract top advertisers, which in turn has allowed us to onboard premium publishers.

1 unchanged sentence

Consumer Insights

Consumer insights revenue increased by $1.0 million, or 8%, for the six months ended June 30, 2025, compared to the same period in 2024.

Approximately $14.4 million, or 49%, of the Company’s revenue for the six months ended June 30, 2025 was generated from our consumer insights customers compared to $13.4 million, or 53%, for the same period in 2024.

This growth was driven by an increase in contract value for certain larger tier revenue customers.

Consumer insights revenue increased by $601,000, or 3%, for the nine months ended September 30, 2025, compared to the same period in 2024.

Approximately $20.7 million, or 48%, of the Company’s revenue for the nine months ended September 30, 2025 was generated from our consumer insights customers compared to $20.1 million, or 51%, for the same period in 2024.

Creative Services

Creative services revenue decreased by $487,000, or 13%, for the six months ended June 30, 2025, compared to the same period in 2024.

Approximately $3.2 million, or 11%, of the Company’s revenue for the six months ended June 30, 2025 was generated from our creative services customers compared to $3.7 million, or 15% for the same period in 2024.

Creative services revenue decreased by $607,000, or 11%, for the nine months ended September 30, 2025, compared to the same period in 2024.

Approximately $4.7 million, or 11%, of the Company’s revenue for the nine months ended September 30, 2025 was generated from our creative services customers compared to $5.3 million, or 13% for the same period in 2024.

This decrease was primarily related to a decrease in the number of projects for smaller tier revenue customers.

Media Services

Media services revenue increased by $504,000, or 42%, for the six months ended June 30, 2025, compared to the same period in 2024.

Approximately $1.7 million, or 6% of the Company’s revenue for the six months ended June 30, 2025 was generated from our media services customers compared to $1.2 million, or 5%, for the same period in 2024.

This increase was primarily related to the timing of customer needs and the moving of certain projects from year-end 2024 to the first half of 2025.

Media services revenue increased by $642,000, or 36%, for the nine months ended September 30, 2025, compared to the same period in 2024.

Approximately $2.4 million, or 6%, of the Company’s revenue for the nine months ended September 30, 2025 was generated from our media services customers compared to $1.8 million, or 5%, for the same period in 2024.

This increase was primarily related to the timing of customer needs and the moving of certain projects from year-end 2024 to the first three quarters of 2025.

Cost of Revenue

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands)

5 unchanged sentences

Sales commissions

Cost of revenue increased $3.4 million, or 18%, for the six months ended June 30, 2025, compared to the same period for 2024.

Cost of revenue increased by $3.3 million, or 12%, for the nine months ended September 30, 2025, compared to the same period for 2024.

This increase is due to the factors discussed below:

Direct Salaries and Labor Cost

Direct salaries and labor cost decreased $399,000, or 10%, for the six months ended June 30, 2025, when compared to the same period in 2024.

Approximately $3.7 million, or 16%, of the Company's cost of revenue for the six months ended June 30, 2025 was a result of direct salaries and labor cost compared to $4.1 million, or 22% for the same period in 2024.

This decrease is related to our continued efforts to decrease headcount.

Direct salaries and labor cost decreased by $394,000, or 7%, for the nine months ended September 30, 2025, when compared to the same period in 2024.

Approximately $5.2 million, or 16%, of the Company's cost of revenue for the nine months ended September 30, 2025 was a result of direct salaries and labor cost compared to $5.6 million, or 22% for the same period in 2024.

These costs represent salary and labor cost of employees that work directly on customer projects for our consumer insights, creative services, and media services divisions.

Direct Project Cost

Direct project cost increased $2.3 million, or 38%, for the six months ended June 30, 2025, when compared to the same period in 2024.

Approximately $8.5 million, or 38%, of the Company's cost of revenue for the six months ended June 30, 2025 was a result of direct project cost compared to $6.2 million, or 33%, during the same period in 2024.

This increase was related to an increase customer contracts.

Direct project cost increased by $1.7 million, or 19%, for the nine months ended September 30, 2025, when compared to the same period in 2024.

Approximately $10.9 million, or 34%, of the Company's cost of revenue for the nine months ended September 30, 2025 was a result of direct project cost compared to $9.2 million, or 32%, during the same period in 2024.

This increase was related to an increase in customer contracts.

Non-Direct Project Cost

Non-direct cost was $2.2 million, or 10%, of the Company's cost of revenue for the six months ended June 30, 2025, compared to $3.7 million, or 20%, for the same period in 2024.

Non-direct project cost was $3.7 million, or 12%, of the Company's cost of revenue for the nine months ended September 30, 2025, compared to $5.5 million, or 19%, for the same period in 2024.

These costs represent overall client service costs that are not specifically related to a particular project, but relate to services for our consumer insights, creative services, and media services divisions.

The decrease in non-direct project costs is related to the decrease in revenue from our creative services division.

The decrease of $1.8 million is related to our continued efforts to decrease headcount.

Publisher Cost

Publisher cost was $6.7 million, which represents 30% of overall cost of revenue, and $4.1 million, or 22%, of overall cost of revenue, for the six months ended June 30, 2025 and 2024, respectively.

We experienced an increase of $2.6 million, or 64%, for the six months ended June 30, 2025, compared to the same period in 2024.

This increase is consistent with the increase noted in revenue for our advertising technology division.

Publisher cost was $10.5 million, which represents 33% of overall cost of revenue, and $7.1 million, or 25%, of overall cost of revenue, for the nine months ended September 30, 2025 and 2024, respectively.

We experienced an increase of $3.3 million, or 47%, for the nine months ended September 30, 2025, compared to the same period in 2024.

In 2024, we ran political campaigns with margins better than our average.

We did not run similar campaigns in 2025, and as a result, in 2025 our margins were lower.

In 2025, we have had higher costs with publishers in connection with the revenue obtained from ad sales.

These costs represent payments to media providers and website publishers.

Gross margin was $7.3 million and $6.6 million for the six months ended June 30, 2025 and 2024, respectively.

Our gross margin increased $724,000, or 11%, for the six months ended June 30, 2025, when compared to the same period of 2024.

Gross margin as a percentage of revenue decreased to 25% for the six months ended June 30, 2025, compared to 26% for the same period of 2024 due to the higher cost of revenue.

Gross margin was $11.6 million and $10.9 million for the nine months ended September 30, 2025 and 2024, respectively.

Our gross margin increased $617,000, or 6%, for the nine months ended September 30, 2025, when compared to the same period of 2024.

Gross margin as a percentage of revenue decreased to 27% for the nine months ended September 30, 2025, compared to 28% for the same period of 2024 due to the higher cost of revenue.

General and Administrative Expenses

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands)

4 unchanged sentences

Gross margin as a percentage of general and administrative expense

General and administrative expenses decreased by $2.0 million, or 19%, for the six months ended June 30, 2025, compared to the same period in 2024.

General and administrative expenses decreased by $2.3 million, or 16%, for the nine months ended September 30, 2025, compared to the same period in 2024.

The decrease is due to a combination of factors as discussed below:

Personnel Cost

Personnel cost decreased by approximately $1.2 million, or 25%, for the six months ended June 30, 2025, compared to the same period in 2024.

Personnel cost decreased by $1.5 million, or 22%, for the nine months ended September 30, 2025, compared to the same period in 2024.

This change was mainly driven by a decrease in the Company's head count by a net change of 28 employees.

The Company employee's headcount was 115 and 150 at June 30, 2025 and 2024, respectively.

Legal fees decreased by $133,000, or 17%, for the six months ended June 30, 2025, compared to the same period in 2024.

The Company employee's headcount was 113 and 141 at September 30, 2025 and 2024, respectively.

Insurance Cost

Insurance cost decreased by $215,000, or 35%, compared to the same period in 2024.

This change was mainly driven by a reform of the Company's management liability insurance program, including changes to insurance providers, resulting in a decrease in premiums from the prior year.

Legal fees increased by $169,000, or 18%, for the nine months ended September 30, 2025, compared to the same period in 2024.

This increase was due largely to payments made as part of the ongoing litigation with Ladenburg.

See Note 16, Commitments and Contingencies, to the consolidated financial statements.

Website Expenses

Website expenses decreased by $199,000, or 29%, for the six months ended June 30, 2025, compared to the same period in 2024.

Website expenses decreased by $352,000, or 34%, for the nine months ended September 30, 2025, compared to the same period in 2024.

This decrease was related to a reclassification of certain components of software costs from website expenses to cost of revenue.

Data Processing

Data processing decreased by $265,000, or 37%, for the six months ended June 30, 2025, compared to the same period in 2024.

Data processing decreased by $357,000, or 37%, for the nine months ended September 30, 2025, compared to the same period in 2024.

This reduction was due largely to the reclassification of certain components of data processing costs from data processing to website expenses.

Financing Expense (Income)

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands)

2 unchanged sentences

Total financing and other expense, net

Financing and other expense, net increased by $96,000, or 2%, for the six months ended June 30, 2025, compared to the same period in 2024.

Financing and other expense, net, decreased by $146,000, or 2%, for the nine months ended September 30, 2025, compared to the same period in 2024.

This decrease is related to a decrease in interest paid under the Centre Lane Senior Secured Credit Facility due to greater capitalization of interest in the current year.

See Note 10, Centre Lane Senior Secured Credit Facility, to the consolidated financial statements.

Use of Non-GAAP Financial Measure

8 unchanged sentences

A reconciliation of net loss before taxes to non-GAAP EBITDA and Adjusted EBITDA is as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

5 unchanged sentences

Interest expense - Centre Lane Senior Secured Credit Facility and Convertible Promissory Notes

EBITDA (loss)

Stock compensation expense

5 unchanged sentences

Liquidity is the ability of a company to generate sufficient cash to satisfy its needs for cash.

The following table summarizes total current assets, total current liabilities, and net working capital (deficit) as of June 30, 2025, as compared to December 31, 2024.

June 30, 2025

The following table summarizes total current assets, total current liabilities, and net working capital (deficit) as of September 30, 2025, as compared to December 31, 2024.

September 30, 2025

December 31, 2024

3 unchanged sentences

Net working capital (deficit)

As of June 30, 2025, we had a cash balance of $1.7 million and a restricted cash balance of $1.9 million compared with a cash balance of $2.5 million and a restricted cash balance of $1.9 million as of December 31, 2024.

As of September 30, 2025, we had a cash balance of $553,000 and a restricted cash balance of $1.9 million compared with a cash balance of $2.5 million and a restricted cash balance of $1.9 million as of December 31, 2024.

The Company’s liquidity needs, and a discussion of how it intends to meet those needs, is discussed below.

1 unchanged sentence

Going Concern

Historically, the Company has incurred losses, which have resulted in an accumulated deficit of approximately $174.2 million as of June 30, 2025.

Cash flows provided by (used in) operating activities were $1.2 million and $(385,000) for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, the Company had a working capital deficit of approximately $17.3 million, inclusive of $1.7 million in cash and cash equivalents and $1.9 million in restricted cash.

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.

Historically, the Company has incurred losses, which have resulted in an accumulated deficit of approximately $177.0 million as of September 30, 2025.

Cash flows provided by (used in) operating activities were $347,000 and $(451,000) for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, the Company had a working capital deficit of approximately $17.3 million, inclusive of $553,000 in cash and cash equivalents and $1.9 million in restricted cash.

The Company's current cash and working capital, as of the filing of this Quarterly Report on Form 10-Q, are 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.

8 unchanged sentences

Centre Lane Senior Secured Credit Facility

On June 5, 2020, the Company and its subsidiaries entered into to the Amended and Restated Senior Secured Credit Facility between themselves, the lenders party thereto and Centre Lane Partners Master Credit Fund II, L.P., as Administrative Agent and Collateral Agent (“Centre Lane Partners”), as amended (the “Credit Agreement”).

On June 5, 2020, the Company and its subsidiaries entered into the Amended and Restated Senior Secured Credit Facility between themselves, the lenders party thereto and Centre Lane Partners Master Credit Fund II, L.P., as Administrative Agent and Collateral Agent (“Centre Lane Partners”), as amended (the “Credit Agreement”).

The Credit Agreement has been amended numerous times to change the terms, including the amounts outstanding, the interest rate, the maturity date and other payment terms.

As of June 30, 2025, Centre Lane Partners has loaned the Company $39.9 million through Amendments One through Eight (the "Second Out Loans"), Amendments Nine through Sixteen (the "First Out Loans"), and Amendments Seventeen, Twenty-One, and Twenty-Two (the "Third Out Loans").

As of September 30, 2025, Centre Lane Partners has loaned the Company $39.9 million through Amendments One through Eight (the "Second Out Loans"), Amendments Nine through Sixteen (the "First Out Loans"), and Amendments Seventeen and Twenty-One (the "Third Out Loans").

Effective March 31, 2025, the Company, the Lenders, and Centre Lane Partners entered into the Twenty-Second Amendment to the Credit Agreement, pursuant to which the following adjustments were made to the outstanding loans:

5 unchanged sentences

• Adjusting the amortization of the First Out Loans such that an installment of $700,000 was paid on March 31, 2025, and quarterly installments of $575,000 are paid thereafter until maturity.

The outstanding principal owed to Centre Lane Partners was $81.3 million and $78.8 million as of June 30, 2025 and December 31, 2024, respectively.

Of the amount outstanding at June 30, 2025, approximately $4.7 million is due by June 30, 2026.

Effective September 30, 2025, the Company, the Lenders, and Centre Lane Partners entered into the Twenty-Third Amendment to the Credit Agreement, which applied the following adjustments to loans with outstanding payments due on September 30, 2025, including the following temporary modifications:

• Converting the First Out Loans cash interest due on September 30, 2025 to interest PIK;

• Reducing the First Out Loans amortization payment from $575,000 to $250,000 due on September 30, 2025, with the difference deferred to the maturity date of the First Out Loans, which is December 20, 2026;

• Incurring an amendment fee equal to 25 basis points of the First Out Loans, approximately $8,000, which was added to the principal balance as of September 30, 2025;

• Converting the Second Out Loans cash interest due on September 30, 2025 to interest PIK;

• Deferring the Second Out Loans amortization payment due on September 30, 2025 to the maturity date of the Second Out Loans, which is December 20, 2026;

• Following the payments made on September 30, 2025, all loan terms, including cash interest and PIK rates, will revert to the terms established under the Twenty-Second Amendment.

The outstanding principal owed to Centre Lane Partners was $83.6 million and $78.8 million as of September 30, 2025 and December 31, 2024, respectively.

Of the amount outstanding at September 30, 2025, approximately $5.1 million is due by September 30, 2026, with $975,000 due at December 31, 2025, and $1.4 million due at each of March 31, June 30, and September 30, 2026.

The balance of $78.5 million is due in December 2026.

1 unchanged sentence

Summary of Cash Flows

The following table summarizes cash flow activities during the six months ended June 30, 2025 and 2024:

Six Months Ended June 30,

The following table summarizes cash flow activities during the nine months ended September 30, 2025 and 2024:

Nine Months Ended September 30,

(in thousands)

6 unchanged sentences

Our primary uses of our operating cash, are for cost of revenue expenses, personnel-related expenditures and other general administrative expenses.

For the six months ended June 30, 2025, cash provided by operating activities was $1.2 million.

The primary factors affecting our operating cash flows during the period were our net loss of $7.3 million, adjusted for non-cash charges of $970,000 for amortization of intangible assets, $1.2 million of amortization of debt discount, $4.5 million in interest paid in kind on the Centre Lane Senior Secured Credit Facility, and a $1.7 million net change in operating assets and liabilities.

The primary drivers of the changes in operating assets and liabilities were a $3.7 million increase in deferred revenue, a $904,000 decrease in accounts receivable, partially offset by a $2.0 million decrease in other liabilities.

For the six months ended June 30, 2024, cash flow 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.

For the nine months ended September 30, 2025, cash provided by operating activities was $347,000 The primary factors affecting our operating cash flows during the period were our net loss of $10.1 million, adjusted for non-cash charges of $1.4 million for amortization of intangible assets, $1.7 million of amortization of debt discount, $7.0 million in interest paid in kind on the Centre Lane Senior Secured Credit Facility, and a $4,000 net change in operating assets and liabilities.

The primary drivers of the changes in operating assets and liabilities were a $2.4 million increase in deferred revenue and a $706,000 decrease in accounts receivable, partially offset by a $1.6 million decrease in accounts payable and accrued expenses and a $1.5 million decrease in other liabilities.

For the nine months ended September 30, 2024, cash used in operating activities was $451,000.

The primary factors affecting our operating cash flows during the period were our net loss of $13.2 million, adjusted for non-cash charges of $1.4 million for amortization of intangible assets, $2.2 million of amortization of debt discount, $6.9 million in interest paid in kind on the Centre Lane Senior Secured Credit Facility, $191,000 for stock compensation expense, and a $1.8 million net change in operating assets and liabilities.

The primary drivers of the changes in operating assets and liabilities were a $2.3 million increase in accounts receivable, a $543,000 decrease in accounts payable, and a $363,000 decrease in other liabilities, partially offset by a $200,000 increase in deferred revenue.

Investing Activities

Cash used in investing activities of $49,000 and $85,000 for the six months ended June 30, 2025 and 2024, respectively, was attributable to $49,000 and $14,000, respectively, for the purchase of property and equipment, and $71,000 for website enhancements during the six months ended June 30, 2024.

Cash used in investing activities of $30,000 and $100,000 for the nine months ended September 30, 2025 and 2024, respectively, was attributable to $30,000 and $14,000, respectively, for the purchase of property and equipment, and $86,000 for website enhancements during the nine months ended September 30, 2024.

Financing Activities

During the six months ended June 30, 2025, the Company used cash of $2.1 million in financing activities, which is largely attributable to the repayment of principal on the Centre Lane Senior Secured Credit Facility of $2.0 million.

During the six months ended June 30, 2024, the Company used cash of $886,000 in financing activities, which is largely attributable to the repayment of principal on the Centre Lane Senior Secured Credit Facility of $879,000.

During the nine months ended September 30, 2025, the Company used cash of $2.3 million in financing activities, which is largely attributable to the repayment of principal on the Centre Lane Senior Secured Credit Facility of $2.3 million.

During the nine months ended September 30, 2024, the Company used cash of $971,000 in financing activities, which is largely attributable to repayment of principal on the Centre Lane Senior Secured Credit Facility of $879,000.

Contractual Obligations and Commitments

1 unchanged sentence

Off-Balance Sheet Arrangements

As of June 30, 2025 and December 31, 2024, there were no off-balance sheet arrangements between us and any other entity that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to shareholders.

As of September 30, 2025 and December 31, 2024, there were no off-balance sheet arrangements between us and any other entity that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to shareholders.

Critical Accounting Policies and Estimates

15 unchanged sentences

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-Q

Item 2. Management’s Discussion and Analysis