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Item 1A. Risk Factors

2024-04-01 compared with 2023-03-29 · 313 added, 145 removed, 179 unchanged (72% of the section changed)

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If any of the following risks and uncertainties develop into actual events, our business, financial condition, results of operations, prospects or the prevailing market price and performance of our common stock could be materially adversely affected, and you could lose your entire investment in our Company.

RISKS RELATED TO OUR COMPANY

Summary of Principal Risk Factors

Risks Relating to Our Financial Condition and Indebtedness

• We have a history of losses.

We incurred significant net losses for the years ending December 31, 2022, and 2021, and at December 31, 2022, we had a significant accumulated deficit.

• 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.

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

• We have depended upon sales of equity securities and borrowings under the Centre Lane Senior Secured Credit Facility to provide operating capital.

• Our economic performance has raised substantial doubt about our ability to continue as a going concern.

• If we fail to establish and maintain adequate internal control over our financial and management system, our ability to accurately and timely report our financial results could be adversely affected, resulting in errors in our financial reporting, which could cause a loss of investor confidence.

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

• We are subject to seasonal fluctuations in our revenues in future periods.

• Our cash could be adversely affected if the financial institutions in which we hold our cash fail.

Risks Related to Our Operations

• Past acquisitions and any future acquisitions, joint ventures, strategic alliances or similar transactions may not perform as expected.

• The acquisition of new businesses is costly, and these acquisitions may not enhance our financial condition.

• If we fail to detect advertising fraud or other actions that impacts our advertising campaign performance, we could harm our reputation with advertisers or agencies, which would cause our revenue and business to suffer.

• 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.

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

• We must generate high quality content in order to attract and retain users, advertisers and strategic buyers.

• We may expend significant resources to protect our content or to defend claims of infringement by third parties, and if we are not successful, we may lose the rights to use material or be required to pay significant fees.

• Failure to protect our intellectual property rights or claims by others that we infringe their intellectual property rights could substantially harm our business.

• Developing and implementing new and updated applications, features and services for our websites may be more difficult than expected, may take longer and cost more than expected and may not result in sufficient increases in revenue to justify the costs.

• If we are unable to obtain or maintain key website addresses, our ability to operate and grow our business may be impaired.

• If we are unable to respond to rapid technological change, our products and services could become obsolete, and our reputation could suffer.

• Our ability to deliver our content depends upon the quality, availability, policies and prices of certain third-party service providers.

• We may be held liable for content or third-party links on our website or content distributed to third parties, and our general liability insurance may not be adequate to compensate us for all liabilities to which we are exposed.

• We depend on our senior management team and other key employees, and the loss of any of them could harm our business.

• We must hire, integrate and/or retain qualified personnel to support our business.

• We deliver advertisements to users from third-party advertising services, which exposes our users to content and functionality over which we do not have ultimate control.

• Our services may be interrupted if we experience problems with our network infrastructure.

• 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.

• Privacy violations could impair our business.

• We are subject to several regulatory risks, and any failure to comply with various regulations could adversely impact our business.

• Litigation is both costly and time-consuming, and there is no certainty of a favorable result.

• Our industry is intensely competitive, and if we do not effectively compete against current and future competitors, our business, results of operations and financial condition could be harmed.

• We may be adversely affected by the effects of inflation.

• Our platform relies on third-party open source software components.

• The effectiveness of certain services we offer depends on our ability to collect and use online data.

• 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.

• If ad formats and digital device types develop in ways that prevent advertisements from being delivered to consumers, our business, results of operations, and financial condition may be adversely affected.

• Our intellectual property rights may be difficult to enforce and protect, which could enable others to copy or use aspects of our technology without compensating us, thereby eroding our competitive advantages and having an adverse effect on our business, results of operations, and financial condition.

• We could experience a decline in renewals or demand for our subscription-based research services.

• We may be unable to develop and offer new research products and services.

• Our creative advertising services division may not be able to remain competitive or retain key clients.

Risks Related to the Ownership of Our Securities

• 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.

• 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.

• Some provisions of our charter documents and Florida law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our shareholders and may prevent attempts by our shareholders to replace or remove our current management.

• Our Company has a concentration of stock ownership and control, which may have the effect of delaying, preventing or deterring a change of control.

• We do not anticipate paying any cash dividends on our Common Stock in the foreseeable future and, as such, capital appreciation, if any, of our Common Stock will be your sole source of gain for the foreseeable future.

• We may issue additional shares of preferred stock in the future that may adversely impact your rights as holders of our Common Stock.

RISKS RELATING TO OUR FINANCIAL CONDITION AND INDEBTEDNESS

We have a history of losses.

We incurred significant net losses for the years ended December 31, 2023, and 2022, and at December 31, 2023, we had a significant accumulated deficit.

There is substantial doubt that we will be able to significantly increase our revenues and gross profit to a level which supports profitable operations and provides sufficient funds to pay our operating expenses and other obligations as they become due.

The Company’s ability to continue as a going concern is dependent on its ability to meet its liquidity needs through a combination of factors.

The Company is currently exploring all strategic alternatives, including restructuring or refinancing its debts, seeking additional debt, such as borrowings under the Centre Lane Senior Secured Credit Facility or equity capital.

The ability to access the capital market is also dependent on the stock volume and market price of the Company's stock, which cannot be assured.

The Company may need to pursue other measures including reducing or delaying certain business activities, reducing general and administrative expenses, and reducing its headcount.

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, 2023, we owed Centre Lane $70.2 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.

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.

We cannot provide any assurances that we will be able to raise the necessary amount of capital to repay these obligations or that we will be able to extend the maturity dates or otherwise refinance these obligations.

Upon a default in the Centre Lane Senior Secured Credit Facility, Centre Lane would have the right to exercise its rights and remedies to collect, which would include foreclosing on our assets.

Accordingly, a default would have a material adverse effect on our business and, if Centre Lane exercises its rights and remedies, we would likely be forced to seek bankruptcy protection.

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

As of December 31, 2023, and 2022, we had $70.2 million and $33.1 million in outstanding secured indebtedness under the Centre Lane Senior Secured Credit Facility, respectively.

The instruments governing our existing secured indebtedness may inhibit our ability to incur additional debt and require significant payments from the proceeds of any debt or equity sale without the consent of the lender.

In addition, we have additional covenants and obligations under the secured indebtedness which may limit our ability to operate our business.

Our ability to repay the indebtedness may require us to dedicate a substantial portion of our cash flow for operations to payment of debt service and principal thereby reducing funds available to implement our business strategy.

Our level of indebtedness could also provide limits in our ability to adjust to changing market conditions and vulnerability in the event of a downturn in economic conditions in the businesses in which we operate and impair our ability to obtain additional financing for our business strategy.

If we are unable to meet our obligations under the secured indebtedness, the lender may call a default and our business could be foreclosed upon.

We have depended upon sales of equity securities and borrowings under the Centre Lane Senior Secured Credit Facility to provide operating capital.

Historically, we have not generated sufficient gross profit to pay our operating expenses and we reported a net loss for the years ended December 31, 2023, and 2022.

During 2023 and 2022, we were dependent on borrowings under the Amended and Restated Centre Lane Senior Secured Credit Facility (the "Centre Lane Senior Secured Credit Facility") to support our working capital needs.

We are not currently a party to any binding agreements to raise additional capital and there are no assurances we will be able to raise any additional third-party capital.

Although we recently improved our gross profit substantially and became cash flow positive, there can be no assurance that this trend will continue, and if it does not continue, and we are unable to raise sufficient additional working capital as needed, we may be unable to grow our Company, and we may not be able to pay our liabilities as they come due.

The Company’s economic performance has raised substantial doubt about our ability to continue as a going concern.

Our audited consolidated financial statements have been prepared assuming we will continue as a going concern.

We have experienced substantial and recurring losses from operations, which losses have caused an accumulated deficit of $149.8 million at December 31, 2023.

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

If we fail to establish and maintain adequate internal control over our financial and management system, our ability to accurately and timely report our financial results could be adversely affected, resulting in errors in our financial reporting, which could cause a loss of investor confidence.

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.

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

As a result, our failure to maintain effective financial and management systems and internal controls could result in errors in our financial reporting, us being subject to regulatory action and a loss of investor confidence in the reliability of our financial statements.

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.

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.

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.

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.

We are subject to seasonal fluctuations in our revenues in future periods.

Typically advertising technology companies report a material portion of their revenues during the fourth calendar quarter as a result of holiday-related advertising spending.

Our experience has been consistent with this trend.

Because of seasonal fluctuations, there can be no assurance that the results of any particular quarter will be indicative of results for the full year or for future years or quarters.

Our cash could be adversely affected if the financial institutions in which we hold our cash fail.

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These balances could be impacted if one or more of the financial institutions in which we deposit monies fails or is subject to other adverse conditions in the financial or credit markets.

We are dependent upon sales of equity securities and borrowings under the Centre Lane Senior Secured Credit Facility to provide operating capital.

We do not generate sufficient gross profit to pay our operating expenses and we reported a net loss in 2022 and 2021.

During 2022 and 2021, we were dependent on borrowing under the Amended and Restated Centre Lane Senior Secured Credit Facility (the "Centre Lane Senior Secured Credit Facility") to support our working capital needs.

We are not a party to any binding agreements and there are no assurances we will be able to raise any additional third-party capital.

If we are not able to raise sufficient additional working capital as needed, and absent a significant increase in our revenue, we may be unable to grow our Company.

If we fail to detect advertising fraud or other actions that impact our advertising campaign performance, we could harm our reputation with advertisers or agencies, which would cause our revenue and business to suffer.

RISKS RELATED TO OUR OPERATIONS

Past acquisitions and any future acquisitions, joint ventures, strategic alliances or similar transactions may not perform as expected.

We have consummated and may continue to consummate acquisitions, joint ventures and strategic alliances in order to provide increased capabilities to our existing products, supply new products and services or enhance our distribution channels.

We may make strategic acquisitions of and investments in other businesses that offer complementary products, services and technologies, augment our market segment coverage and geographic locations, or enhance our technological capabilities.

We may also enter into strategic alliances or joint ventures to achieve these goals.

If we fail to integrate acquired businesses successfully into our existing businesses, or if these businesses fail to perform as well as we had anticipated, we could incur unanticipated expenses and losses, and the costs of the acquisition could exceed the benefits either in the short term or the long term.

Risks that could have a material adverse effect on our business, results of operations or financial condition include, without limitation:

• the inability of the acquired business to meet the sales and operating projections provided to us;

• the difficulty of assimilating the operations and personnel of acquired businesses;

• the unexpected loss of customers of the acquired business;

• the diversion of management time and resources and the potential disruption of our ongoing business;

• the potential inability of management to maximize our financial and strategic position as a result of an acquisition or investment;

• the potential for costs and delays in implementing, and the potential difficulty in maintaining, uniform standards, controls, procedures and policies, including the integration of different information systems;

• unexpected costs and time associated with upgrading the acquired business's internal accounting systems as well as educating each of its staff as to the proper methods of collecting and recording financial data;

• the risk of entering market segments in which we have no or limited direct prior experience and where competitors in such market segments have stronger market segment positions;

• potential unknown liabilities associated with acquired businesses;

• the risk that there could be deficiencies in the internal controls of any acquired company or investments that could result in a material weakness in our overall internal controls taken as a whole;

• the potential loss of key employees of an acquired company.

We cannot assure you that we will be successful in overcoming these risks or any other problems encountered with acquisitions and other strategic transactions.

These risks may prevent us from realizing the expected benefits from acquisitions and could result in the failure to realize the full economic value of a strategic transaction or the impairment of goodwill and/or intangible assets recognized at the time of an acquisition.

These risks could be heightened if we complete a large acquisition or multiple acquisitions within a short period of time.

The acquisition of new businesses is costly, and these acquisitions may not enhance our financial condition.

An element of our growth strategy has been to acquire companies which complement our business.

The process to undertake a potential acquisition can be time-consuming and costly.

We have expended and expect to continue to expend significant resources to undertake business, financial and legal due diligence on potential acquisition targets.

In addition, there is no guarantee that we will acquire the company after completing due diligence.

The process of identifying and consummating an acquisition could result in the use of substantial amounts of cash and exposure to undisclosed or potential liabilities of acquired companies.

In some instances, we may be required to provide historic audited financial statements for up to two years for acquisition targets in compliance with the rules and regulations of the SEC.

The necessity to provide these audited financial statements will increase the costs to us of consummating an acquisition or, if it is determined that the target company cannot obtain the requisite audited financials, we may be unable to pursue an acquisition which might otherwise be accretive to our business.

In addition, even if we are successful in acquiring additional companies, there are no assurances that the operations of these businesses will enhance our future financial condition.

To the extent that a business we acquire does not meet the performance criteria used to establish a purchase price, some or all of the goodwill related to that acquisition could be charged against our future earnings, if any.

If we fail to detect advertising fraud or other actions that impacts our advertising campaign performance, we could harm our reputation with advertisers or agencies, which would cause our revenue and business to suffer.

Some campaigns may experience fraudulent and other invalid impressions, clicks or conversions that advertisers may perceive as undesirable, such as non-human traffic generated by machines that are designed to simulate human users and artificially inflate user traffic on websites.

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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.

We are dependent on revenues from a limited number of customers.

For the year ended December 31, 2022, one customer represented 37.7% of our revenue, and for the year ended December 31, 2021, the same one customer represented 8.6% of our revenue.

The loss of this customer 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 this customer.

In addition, revenues from this customer 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 this customer 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 a major customer.

Any such development could have an adverse effect on our margins and financial position and would negatively affect our revenues and results of operations and/or trading price of our Common Stock.

We are subject to seasonal fluctuations in our revenues in future periods.

Typically advertising technology companies report a material portion of their revenues during the fourth calendar quarter as a result of holiday-related advertising spending.

Our experience since transitioning to focus solely on our advertising segment has been consistent with this trend.

Because of seasonal fluctuations, there can be no assurance that the results of any particular quarter will be indicative of results for the full year or for future years or quarters.

The acquisition of new businesses is costly, and these acquisitions may not enhance our financial condition.

A significant element of our growth strategy has been to acquire companies which complement our business.

The process to undertake a potential acquisition can be time-consuming and costly.

We have expended and expect to continue to expend significant resources to undertake business, financial and legal due diligence on potential acquisition targets.

In addition, there is no guarantee that we will acquire the company after completing due diligence.

The process of identifying and consummating an acquisition could result in the use of substantial amounts of cash and exposure to undisclosed or potential liabilities of acquired companies.

In some instances, we may be required to provide historic audited financial

statements for up to two years for acquisition targets in compliance with the rules and regulations of the SEC.

In addition, even if we are successful in acquiring additional companies, there are no assurances that the operations of these businesses will enhance our future financial condition.

Acquisition(s) may disrupt growth.

We may pursue strategic acquisitions in the future.

Risks in acquisition transactions include difficulties in the integration of acquired businesses into our operations and control environment, difficulties in assimilating and retaining employees and intermediaries, difficulties in retaining the existing clients of the acquired entities, assumed or unforeseen liabilities that arise in connection with the acquired businesses, the failure of counterparties to satisfy any obligations to indemnify us against liabilities arising from the acquired businesses, and unfavorable market conditions that could negatively impact our growth expectations for the acquired businesses.

Fully integrating an acquired company or business into our operations may take a significant amount of time.

We cannot assure you that we will be successful in overcoming these risks or any other problems encountered with acquisitions and other strategic transactions.

These risks could be heightened if we complete a large acquisition or multiple acquisitions within a short period of time.

Our management may be unable to effectively integrate our acquisitions and to manage our growth, and we may be unable to fully realize any anticipated benefits of these acquisitions.

We are subject to various risks associated with our growth strategy, including the risk that we will be unable to identify and recruit suitable acquisition candidates in the future or to integrate and manage the acquired companies.

Acquired companies’ histories, the geographical location, business models and business cultures will be different from ours in many respects.

Successful integration of these acquisitions is subject to a number of challenges, including:

• the diversion of management time and resources and the potential disruption of our ongoing business;

• difficulties in maintaining uniform standards, controls, procedures and policies;

• unexpected costs and time associated with upgrading both the internal accounting systems as well as educating each of their staff as to the proper methods of collecting and recording financial data;

• potential unknown liabilities associated with acquired businesses;

• the difficulty of retaining key alliances on attractive terms with partners and suppliers;

• the difficulty of retaining and recruiting key personnel and maintaining employee morale.

There can be no assurance that our efforts to integrate the operations of any acquired assets or companies will be successful, that we can manage our growth or that the anticipated benefits of these proposed acquisitions will be fully realized.

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

The efficient operation of our business depends on our information technology systems.

We collect, process, store, and share.

We collect, process, store, and share high volumes of personal information which is regulated by various laws.

We rely on encryption and authentication technology to effect secure transmission of such information.

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We may need to expend significant resources to protect against security breaches or to address problems caused by breaches.

User confidence in our websites depends on maintaining strong security features.

While we are unaware of any security breaches to date, experienced programmers or “hackers” could penetrate sectors of our systems.

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Additionally, we may not have a timely remedy against a hacker who is able to penetrate our network security.

information security evolve constantly and are increasingly sophisticated and complex, which makes detecting and successfully defending against them more difficult.

Threats to information security evolve constantly and are increasingly sophisticated and complex, which makes detecting and successfully defending against them more difficult.

Undetected vulnerabilities may persist in our network environment over long periods of time and could come from or spread to the networks and systems of our suppliers and customers.

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In addition, government regulators may impose fines, penalties, and other civil or criminal consequences for security breaches and inadequate information security.

We must promote the Bright Mountain brand to attract and retain users, advertisers and strategic buyers.

The success of the Bright Mountain brand depends largely on our ability to provide high quality content which is of interest to our users.

If our users do not perceive our 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 Bright Mountain brand.

Any change in the focus of our operations 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 Bright Mountain brand, our business could be severely harmed.

We may expend significant resources to protect our content or to defend claims of infringement by third parties, and if we are not successful, we may lose the rights to use significant material or be required to pay significant fees.

We must generate high quality content in order to attract and retain users, advertisers and strategic buyers.

The success of the Wild Sky Media brand depends largely on its ability to provide high quality content which is of interest to its users.

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.

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

We may expend significant resources to protect our content or to defend claims of infringement by third parties, and if we are not successful, we may lose the rights to use material or be required to pay significant fees.

Our success and ability to compete are dependent on our proprietary content.

We rely exclusively on copyright law to protect our content.

While we actively take steps to protect our proprietary rights, these steps may not be adequate to prevent the infringement or misappropriation of our content, which could severely harm our business.

We rely on copyright law to protect our content.

While we actively take steps to protect our proprietary rights, these steps may not be adequate to prevent the infringement or misappropriation of our content, which could harm our business.

In addition to content written by our employees, we also acquire content from various freelance providers and other third-party content providers.

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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.

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

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.

It is critical to our success that we are able to anticipate and react quickly to changes in technology or in industry standards and to successfully develop, introduce, and achieve market acceptance of new, enhanced and competitive products and services on a timely basis and cost-effective basis.

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The failure of all or part of our website hosting services could result in a loss of access to our websites which would harm our results of operations.

We may be held liable for content, blogs or third-party links on our website or content distributed to third parties, and our general liability insurance may not be adequate to compensate us for all liabilities to which we are exposed.

As a publisher and distributor of content over the internet, including blogs which appear on our websites and links to third-party websites that may be accessible through our websites, or content that includes links or references to a third-party’s website, we face potential liability for defamation, negligence, copyright, patent or trademark infringement and other claims based on the nature, content or ownership of the material that is published on or distributed from our websites.

We may be held liable for content or third-party links on our website or content distributed to third parties, and our general liability insurance may not be adequate to compensate us for all liabilities to which we are exposed.

As a publisher and distributor of content over the internet, including links to third-party websites that may be accessible through our websites, or content that includes links or references to a third-party’s website, we face potential liability for defamation, negligence, copyright, patent or trademark infringement and other claims based on the nature, content or ownership of the material that is published on or distributed from our websites.

These types of claims have been brought, sometimes successfully, against online services, websites and print publications in the past.

Other claims may be based on errors, or false or misleading information provided on linked websites, including information deemed to constitute professional advice such as legal, medical, financial or investment advice.

Other claims may be based on links to sexually explicit websites.

Although we carry general liability insurance, our insurance may not be adequate to indemnify us for all liabilities imposed.

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Implementing measures to reduce our exposure to these forms of liability may require us to spend substantial resources and limit the attractiveness of our websites to users.

The loss of any of our key personnel could have a material adverse effect on our business, financial condition and results of operations.

Our success depends to a significant degree upon the continued contribution of our key executive officers, including Matthew Drinkwater, our chief executive officer.

Drinkwater has significant experience in the media business, and if

we should lose Mr.

Drinkwater, such loss could have a material adverse effect on our business, financial condition, and results of operations.

Moreover, we do not maintain key man life insurance with respect to any of our executives.

We depend on our senior management team and other key employees, and the loss of any of them could harm our business.

We rely on our leadership team and other key employees.

From time to time, there are changes in our management team resulting from the hiring or departure of executives or other key employees, which could disrupt our business.

Although some of our senior management are parties to an employment contract with us, some of our senior management and key employees are employed on an at will basis, which means that they could terminate their employment with us at any time.

The loss of one or more of our executive officers or key employees could have a material adverse effect on our business.

We must hire, integrate and/or retain qualified personnel to support our business.

Our success also depends on our ability to attract, train and retain qualified personnel.

In addition, because our users must perceive the content of our websites as having been created by credible and notable sources, our success also depends on the name recognition and reputation of our editorial staff.

Competition for qualified personnel is intense and we may experience difficulty in hiring and retaining highly skilled employees with appropriate qualifications.

If we fail to attract and retain qualified personnel, our business will suffer, and we may be unable to timely meet our reporting obligations under Federal securities laws.

If we fail to attract and retain qualified personnel, our business may suffer.

We deliver advertisements to users from third-party advertising services, which exposes our users to content and functionality over which we do not have ultimate control.

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Our services may be interrupted if we experience problems with our network infrastructure.

The performance of our network infrastructure is critical to our business and reputation.

Because our services are delivered solely through the internet, our network infrastructure could be disrupted by a number of factors, including, but not limited to:

• unexpected increases in usage of our services;

• computer viruses and other security issues;

• interruption or other loss of connectivity provided by third-party internet service providers;

• natural disasters or other catastrophic events;

• server failures or other hardware problems.

If our services were to be interrupted, it could result in a loss of users, customers, and business partners, which could have a material adverse effect on our business, financial condition and results of operations.

Various risks could interrupt access to our primary network infrastructure or data, exposing us to significant costs and other liabilities.

Our revenue depends on technology for critical business operations, providing services to our clients, delivering and measuring advertising impressions, operating our ad exchange, and impression placement.

That technology further depends on our IT systems' continuing and uninterrupted performance.

Our IT infrastructure operates on cloud-based service providers, Software as a Service (SaaS) providers), and managed services housed in third-party commercial data centers, including primary and secondary locations, which are regionally dispersed to mitigate the impact of a localized event.

This infrastructure relies on multiple internet service providers (ISPs), content delivery networks (CDNs), domain name systems (DNS providers), and mobile networks for operations.

In addition, our systems interact with the systems of buyers and sellers and their contractors.

Any damage to, or failure of, these systems could result in interruptions to the availability or functionality of our service.

Moreover, the failure of our data center hosting facilities or any other third-party providers to meet our capacity requirements or dramatically increased costs of such resources, could result in interruptions in the availability or functionality of our solutions or impede our ability to scale our operations.

All of these providers and systems are vulnerable to disruption and/or damage from several sources, many of which are beyond our control, including without limitation:

(i) loss of adequate power or cooling and telecommunications failures, (ii) fire, flood, earthquake, hurricane, and other natural disasters, (iii) software and hardware errors, failures, or crashes, (iv) financial insolvency, and (v) computer viruses, malware, hacking, terrorism, and similar disruptive problems.

Cyberattacks present a severe threat because they are difficult to prevent and remediate, are constantly evolving and improving, and can be used to defraud our buyers and sellers and their clients to steal confidential or proprietary data from us, our clients, or their users.

Artificial intelligence has the potential to exacerbate cybersecurity threats, increasing their frequency and sophistication.

Malfunctions or failure of our systems or systems that interact with our systems, or inaccessibility or corruption of data, could disrupt our operations and negatively impact our business.

This could impact our business operations to a level in excess of any applicable business interruption insurance, result in potential liability to buyers and sellers, and negatively affect our reputation and ability to sell our solution.

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

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Any disruption of the computing platform at these third-party providers could result in a service outage.

Fire, floods, earthquakes, power loss, telecommunications failures, break-ins, supplier failures to meet commitments and similar events could damage these systems and cause interruptions in the hosting of our websites.

Computer viruses, electronic break-ins or other similar disruptive problems could cause users to stop visiting our website and could cause advertisers to terminate their agreements with us.

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Our insurance policies may not adequately compensate us for losses that may occur due to any failures of or interruptions in our systems.

We do not presently have a formal disaster recovery plan.

Our websites must accommodate high volumes of traffic and deliver frequently updated information.

Our websites and other services must accommodate high volumes of traffic and deliver frequently updated information.

While we have not experienced any systems failures to date, it is possible that we may experience systems failures in the future and that such failures could have a material adverse effect on our business.

In addition, our users depend on internet service providers, online service providers and other website operators for access to our websites.

In addition, our users and clients depend on internet service providers, online service providers and other website operators for access to our websites and services.

Many of these providers and operators have experienced significant outages in the past, and could experience outages, delays and other difficulties due to system failures unrelated to our systems and outside of our control.

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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.

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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 of suppliers.

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.

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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.

We maintain long-standing relationships with Yahoo!, Google and others that provide access to hundreds of thousands of advertisers from which most of our Real Time Bidding and digital publishing revenue originates.

We maintain long-standing relationships with Google and others that provide access to hundreds of thousands of advertisers from which most of our Real Time Bidding and digital publishing revenue originates.

Any adverse impact on the operations of those companies would have a correspondingly adverse impact on our revenues in future periods.

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Any of the foregoing factors, or other cascading effects of the pandemic that are not currently foreseeable, could adversely impact our business, financial performance and condition, and results of operations.

Privacy concerns could impair our business.

Privacy violations could impair our business.

We have a policy against using personally identifiable information obtained from users of our websites without the user’s permission.

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

We are subject to several regulatory risks, and any failure to comply with the various regulations could adversely impact our business.

We are subject to several regulatory risks, and any failure to comply with various regulations could adversely impact our business.

We are subject to a number of domestic and, to the extent our operations are conducted outside the U.S., foreign laws and regulations that affect companies conducting business on the internet and through other electronic means, many of which are still evolving and could be interpreted in ways that could harm our business.

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Litigation is both costly and time-consuming, and there is no certainty of a favorable result.

In the ordinary course of business, we may be involved in lawsuits and regulatory actions with customers, employees and others.

We are also subject to lawsuits filed by patent holders alleging patent infringement.

We may be involved in lawsuits and regulatory actions, both in and outside the ordinary course of our business, with customers, employees and others.

Due to the vagaries of litigation, the outcome of a litigation matter and the amount or range of potential loss at particular points in time may be difficult to ascertain.

These types of claims, as well as other types of lawsuits to which we are subject from time to time, can distract management’s attention from core business operations and impact operating results, particularly if a lawsuit results in an unfavorable outcome, or could harm the Company’s reputation with customers, employees, investors and others.

This litigation is both costly and time consuming and has resulted in the diversion of management time and resources.

While we believe that all or a portion of our costs are covered by insurance, there are no assurances that they are covered nor are there assurances that we will prevail in the litigation.

We presently do not have any material pending litigation or regulatory matters affecting us.

RISKS RELATING TO OUR INDEBTEDNESS

Our secured indebtedness may limit our ability to operate our business.

As of December 31, 2022, and 2021, we had $33.1 million and $26.3 million outstanding secured indebtedness under the Centre Lane Senior Secured Credit Facility, respectively.

In addition, we have additional covenants and obligations under the secured indebtedness which may limit our ability to operate our business.

If we are unable to meet our obligations under the secured indebtedness, the lender may call a default and our business could be foreclosed upon.

Litigation is both costly and time consuming and often results in the diversion of management time and resources.

All or a portion of our costs may not be covered by insurance, and there can be no assurance that we will prevail in any such matter.

Our industry is intensely competitive, and if we do not effectively compete against current and future competitors, our business, results of operations and financial condition could be harmed.

Our industry is intensely competitive.

To sustain and grow our revenue, we must continuously respond to the different trends driving our industry.

We generally have flexible master services agreements in place with our customers.

Such agreements allow our customers to change the amount of spend through our platform or terminate our services with limited notice.

As a result, the introduction of new entrants or technology that are superior to or that achieve greater market acceptance than our products and solutions could negatively impact our revenue.

In such an event, we may experience a reduction in market share and may have to respond by reducing our prices, resulting in lower profit margins for us.

There has also been rapid evolution and consolidation in the marketing technology industry, and we expect this trend to continue.

Larger companies typically have more assets to purchase emerging companies or technologies, which gives them a competitive edge.

If we are not able to effectively compete with these consolidated companies, we may not be able to maintain our market share and may experience a reduction in our revenue.

We may be adversely affected by the effects of inflation.

Inflation has the potential to adversely affect our liquidity, business, financial condition and results of operations by increasing our overall cost structure, particularly if we are unable to achieve commensurate increases in the prices, we charge our customers.

The existence of inflation in the economy has resulted in, and may continue to result in, higher interest rates and capital costs, increased costs of labor, weakening exchange rates and other similar effects.

As a result of inflation, we have experienced and may continue to experience, cost increases.

Although we may take measures to mitigate the impact of this inflation, if these measures are not effective, our business, financial condition, results of operations and liquidity could be materially adversely affected.

Even if such measures are effective, there could be a difference between the timing of when these beneficial actions impact our results of operations and when the cost of inflation is incurred.

Our platform relies on third-party open source software components.

Failure to comply with the terms of the underlying open source software licenses could expose us to liabilities, and the combination of open source software with code that we develop could compromise the proprietary nature of our platform.

Our platform utilizes software licensed to us by third-party authors under “open source” licenses and we expect to continue to utilize open source software in the future.

The use of open source software may entail greater risks than the use of third-party commercial software, as open source licensors generally do not provide warranties or other contractual protections regarding infringement claims or the quality of the code.

To the extent that our platform depends upon the successful operation of the open source software we use, any undetected errors or defects in this open source software could prevent the deployment or impair the functionality of our platform, delay new solution introductions, result in a failure of our platform and injure our reputation.

For example, undetected errors or defects in open source software could render it vulnerable to breaches or security attacks, and, in conjunction, make our systems more vulnerable to data breaches.

Furthermore, some open source licenses require that proprietary source code combined with, linked to or distributed with such open source software be released to the public, and may also prohibit charging fees for the use of the software.

If we combine, link or distribute our proprietary software with open source software in a specific manner, we could, under some open source licenses, be required to release the source code of our proprietary software to the public.

This could also preclude us from charging license fees.

This would allow our competitors to create similar solutions with lower development effort and time and ultimately put us at a competitive disadvantage.

The effectiveness of certain services we offer depends on our ability to collect and use online data.

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 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.

This approach may or may not be compatible with our current operations in those channels and platforms.

It is yet to be determined if there will be an industry-wide framework for targeting consumers in a digital environment.

Furthermore, regulatory and legislative actions may influence which data collection tools are permitted in various jurisdictions and may further restrict our data collection efforts.

Without this incremental data, we may not have sufficient insight into the consumer’s activity to provide some of our current tools, products, and services, which may impact our capacity to execute our customers’ programs efficiently and effectively.

Various digital tracking tools may be deleted or blocked by consumers.

The most commonly used internet browsers also allow consumers to modify their browser settings to block first-party cookies (placed directly by the publisher or website owner that the consumer intends to interact with), which are not affected by changes from web browsers and operating systems, or third-party cookies (placed by parties that do not have direct relationship with the consumer), which some browsers may block by default.

Mobile devices using Android and iOS operating systems limit the ability of cookies, or similar technology, to track consumers while they are using applications other than their web browser on the device.

Even if cookies and ad blockers do not ultimately have an adverse effect on our business, investor concerns about the utility and robustness of these tracking technologies could limit demand for our stock and cause its price to decline.

We also partner with third-party data suppliers and publishers.

When we purchase or license from third-party data suppliers, we are dependent upon our ability to obtain such data on commercially reasonable terms and in compliance with applicable regulations.

If a substantial number of data suppliers were to withdraw or withhold their data from us, or if we had to terminate our ties with data suppliers either due to commercial or regulatory reasons, our ability to provide products to our customers could be materially adversely impacted, which could result in decreased revenues and operating results.

We cannot provide assurance that we will be successful in maintaining our relationships with these external data source providers or that we will be able to continue to obtain data from them on acceptable terms or at all.

Furthermore, we cannot provide assurance that we will be able to obtain data from alternative sources if our current sources become unavailable.

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.

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.

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;

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

(iii) vendors who help us monetize our advertising inventory on our owned and operated websites might face greater difficulty in monetizing that inventory.

If our ability to use cookies, mobile device identifiers or other tracking technologies is limited, we may be required to develop or obtain additional applications and technologies to compensate for the lack of cookies, mobile device identifiers and other tracking technology data, which could be time consuming or costly to develop, less effective, and subject to additional regulation.

Additionally, consumers can, with increasing ease, implement technologies that limit our ability to collect and use data to deliver advertisements or provide services or products.

Cookies may be deleted or blocked by consumers.

The most commonly used Internet browsers allow consumers to modify their browser settings to block first-party cookies (placed directly by the publisher or website owner that the consumer intends to interact with) or third-party cookies (placed by parties, like us, that have no direct relationship with the consumer), and some browsers block third-party cookies by default.

Some prominent technology companies, including Google, have also announced intentions to discontinue the use of cookies, and to develop alternative methods and mechanisms for tracking consumers.

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.

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.

Mobile devices using Android and iOS operating systems limit the ability of cookies to track consumers while they are using applications other than their web browser on the device.

As a consequence, fewer cookies may be set in browsers or be accessible in mobile devices, which could adversely affect our business.

Some consumers also download “ad blocking” software on their computers or mobile devices, not only for privacy reasons, but also to counteract the adverse effect advertisements can have on the consumer experience, including increased load times, data consumption, and screen overcrowding.

Ad-blocking technologies and other global privacy controls may prevent some third-party cookies, or other tracking technologies, from being stored on a consumer's computer or mobile device.

If more consumers adopt these measures, it could reduce the volume or effectiveness and value of advertising, which could adversely affect our business, results of operations, and financial condition.

Even if ad blockers do not ultimately have an adverse effect on our business, investor concerns about ad blockers could cause our stock price to decline.

If ad formats and digital device types develop in ways that prevent advertisements from being delivered to consumers, our business, results of operations, and financial condition may be adversely affected.

Our adtech division depends upon the ability of its platform to provide advertising for a variety of digital devices, and the major operating systems or Internet browsers that run on them.

The design of digital devices and operating systems or browsers is controlled by third parties that may also introduce new devices and operating systems or modify existing ones, and our access to content on certain devices may be limited.

If our platform cannot operate effectively with popular devices, operating systems, or Internet browsers, our business, results of operations, and financial condition could be adversely affected.

Our intellectual property rights may be difficult to enforce and protect, which could enable others to copy or use aspects of our technology without compensating us, thereby eroding our competitive advantages and having an adverse effect on our business, results of operations, and financial condition.

We rely upon a combination of trade secrets, third-party confidentiality and non-disclosure agreements, additional contractual restrictions on disclosure and use, and trademark, copyright, patent, and other intellectual property laws to establish and protect our proprietary technology and intellectual property rights.

We currently rely on copyright laws to protect computer programs related to our platform and our proprietary technologies, although to date we have not registered for statutory copyright protection.

In order to bring a copyright infringement lawsuit in the United States, the copyright must be registered.

Accordingly, the remedies and damages available to us for unauthorized use of our software may be limited.

Historically, we have prioritized keeping our technology architecture, trade secrets, and engineering roadmap private, and as a general matter, have not patented our proprietary technology.

As a result, we cannot look to patent enforcement rights to protect much of our proprietary technology.

Any issued patents may be challenged, invalidated, or circumvented, and any rights granted under these patents may not actually provide adequate defensive protection or competitive advantages to us.

Additionally, the process of obtaining patent protection is expensive and time-consuming, and we may not be able to prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner.

While it is our policy to protect and defend our rights to our intellectual property, we cannot predict whether steps taken by us to protect our intellectual property will be adequate to prevent infringement, misappropriation, dilution, or other violations of our intellectual property rights.

Third parties may knowingly or unknowingly infringe our intellectual property rights, third parties may challenge intellectual property rights held by us, and pending and future trademark and patent applications may not be approved.

These claims may result in restrictions on our use of our intellectual property or the conduct of our business.

In any of these cases, we may be required to expend significant time and expense to prevent infringement or to enforce our rights.

We also cannot guarantee that others will not independently develop technology with the same or similar functions to any proprietary technology we rely on to conduct our business and differentiate ourselves from our competitors.

Unauthorized parties may also attempt to copy or obtain and use our technology to develop applications with the same functionality as our solutions, and policing unauthorized use of our technology and intellectual property rights is difficult and may not be effective.

In addition, the laws of some foreign countries may not be as protective of intellectual property rights as those of the United States, and mechanisms for enforcement of our intellectual property rights in such countries may be inadequate.

If we are unable to protect our intellectual property rights (including in particular, the proprietary aspects of our platform) we may find ourselves at a competitive disadvantage to others who have not incurred the same level of expense, time and effort to create, and protect their intellectual property.

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.

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.

These agreements may not effectively grant all necessary rights to any inventions that may have been developed by the employees or consultants party thereto.

In addition, these agreements may not effectively prevent unauthorized use or disclosure of our confidential information, intellectual property or technology and may not provide an adequate remedy in the event of unauthorized use or disclosure of our confidential information, intellectual property, or technology.

Furthermore, protecting our intellectual property is particularly challenging after our employees or our contractors end their relationship with us, and, in some cases, decide to work for our competitors.

Enforceability of the non-compete agreements that we have in place is not guaranteed, and contractual restrictions could be breached without discovery or adequate remedies.

We could experience a decline in renewals or demand for our subscription-based research services.

The success of our insights business depends in part upon retaining (on both a client company and dollar basis) and enriching existing client relationships for our research products and services and for consulting services.

Future declines in client retention or failure to generate demand for and new sales of our research services due to competition, changes in our offerings, or otherwise, could have an adverse effect on our results of operations and financial condition.

Consulting engagements generally are project-based and non-recurring.

A decline in our ability to fulfill existing or generate new consulting engagements could have an adverse effect on our results of operations and financial condition.

We may be unable to develop and offer new research products and services.

The future success of our insights business will depend in part on our ability to offer new products and services.

These new products and services must successfully gain market acceptance by anticipating and identifying changes in client requirements and changes in the technology industry and by addressing specific industry and business organization sectors.

The process of internally researching, developing, launching, and gaining client acceptance of a new product or service, or assimilating and marketing an acquired product or service, is risky and costly.

We may not be able to introduce new, or assimilate acquired, products or services successfully.

Our failure to do so would adversely affect our ability to maintain a competitive position in our market and continue to grow our business.

Our creative advertising services division may not be able to remain competitive or retain key clients.

Clients periodically review and change their advertising, marketing and corporate communications requirements and relationships.

If we are unable to remain competitive or retain key clients, our business, results of operations and financial position may be adversely affected.

We operate in a highly competitive industry.

Key competitive considerations for retaining existing clients and winning new clients include our ability to develop solutions that meet client needs in a rapidly changing environment, the quality and effectiveness of our services and our ability to serve clients efficiently.

From time to time, clients may put their advertising, marketing and corporate communications business up for competitive review.

To the extent that we are not able to remain competitive or retain key clients, our revenue may be adversely affected, which could have a material adverse effect on our business, results of operations and financial position.

RISKS RELATED TO THE OWNERSHIP OF OUR SECURITIES

The Company’s economic performance has raised substantial doubts about our ability to continue as a going concern.

Our audited consolidated financial statements have been prepared assuming we will continue as a going concern.

We have experienced substantial and recurring losses from operations, which losses have caused an accumulated deficit of $114.3 million at December 31, 2022.

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

We have material weaknesses in our disclosure controls and our internal control over financial reporting.

If we fail to remediate any material weaknesses or if we fail to establish and maintain effective internal control over financial reporting, our ability to accurately and timely report our financial results could be adversely affected.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (“ICFR”).

ICFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S.

generally accepted accounting principles (“GAAP”).

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis.

Historically, we have reported material weaknesses in our disclosure controls and internal control over financial reporting.

These material weaknesses have resulted in our failure to timely file certain periodic reports as required by SEC rules and regulations, and resulted in the restatement of our financial statements as of and for the years ended December 31, 2020 and December 31, 2021.

On March 6, 2023, the Board of Directors of the Company, upon the recommendation of the Audit Committee, determined that the Company’s previously issued unaudited consolidated financial statements as of and for each of the interim quarterly periods ended June 30, 2022 and September 30, 2022, should no longer be relied upon due to material errors contained in those financials statements primarily relating to the understatement of interest payable and interest expense under the Centre Lane Senior Secured Credit Facility and filed a Form 8-K to report such non-reliance.

Our failure to remediate the material weaknesses or the identification of additional material weaknesses in the future could adversely affect our ability to report financial information, including our filing of quarterly or annual reports with the SEC on a timely and accurate basis.

Moreover, our failure to remediate the material weaknesses identified above or the

identification of additional material weaknesses could prohibit us from producing timely and accurate financial statements, which may adversely affect the market price of shares of our Common Stock.

The Company is committed and has taken steps to resolve the material weaknesses by enhancing its accounting and finance department, implementing a new organization wide enterprise resource planning system with an inherent robust control structure, and utilizing external expertise related to all aspects of internal control environments.

There is a limited public market for our Common Stock.

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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.

The amount of working capital we have available could be adversely impacted by the amount of cash dividends and outstanding interest we pay affiliates.

As of December 31, 2021, we had one series, Series “E", of preferred stock outstanding that paid cash dividends and was owned by Mr.

Richard Rogers, a former member of our Board.

During the years ended December 31, 2022, and 2021, we paid cash dividends of $5,000 each year to Mr.

During the year ended December 31, 2022, Mr.

Rogers converted his shares of Series “E" preferred stock to shares of Common Stock.

As a result, as of December 31, 2022, no Series "E" preferred stock remained outstanding, and no further dividends payments will be required.

As of December 31, 2022, preferred stock dividends owed to Mr.

Kip Speyer, our chairman of the Board, totaled $691,000.

Speyer's preferred stock was converted to common stock during the year ended December 31, 2021.

At December 31, 2022 and 2021, accrued unpaid preference dividends due to Mr.

Speyer was $691,000 and $691,000, respectively, amounts for 2021 included $242,000 due within that year.

As of December 31, 2022, outstanding interest payable on the 10% convertible promissory notes (the "Convertible Notes") due to Mr.

Speyer totaled $31,000.

The outstanding Convertible Notes of $80,000 and interest are due to be repaid by November 2023.

The payment of these cash dividends, outstanding principal and interest payments reduces the amount of capital we have available to devote to the growth of our Company.

We have outstanding, convertible notes, options and warrants to purchase approximately 29% of our outstanding Common Stock.

As of December 31, 2022, we had 149,619,461 shares of Common Stock outstanding, with options, and warrants outstanding to purchase an aggregate of 42,515,976 shares of Common Stock.

As of December 31, 2021, we had 148,985,208 shares of Common Stock and 125,000 shares of preferred stock outstanding, with options, and warrants outstanding to purchase an aggregate of 37,238,543 shares of Common Stock.

The conversion or possible exercise of the preferred stock, warrants and/or options, would increase the total outstanding shares of Common Stock by approximately 29% at December 31, 2022 and 25% at December 31, 2021, which will have a dilutive effect on our existing shareholders.

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.

The conversion or possible exercise of the preferred notes, warrants and/or options, would increase the total outstanding shares of Common Stock by approximately 19% at December 31, 2023, which will have a dilutive effect on our existing shareholders.

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.

We have entered into and may, in the future, enter into various debt transactions and agreements with Centre Lane, including the Centre Lane Senior Secured Credit Facility.

Centre Lane has no fiduciary duty to make decisions in our best interest.

Centre Lane is entitled to vote our Common Stock in accordance with its own interests, which may be contrary to our and your interests and Centre Lane is not obligated to offer us business opportunities or to offer to loan additional amounts to us.

We believe that the debt transactions and agreements that we have entered into with Centre Lane are on terms that are at least as favorable as could reasonably have been obtained at such time from third parties.

However, these relationships could create, or appear to create, potential conflicts of interest when our board of directors is faced with decisions that could have different implications for us and Centre Lane.

The appearance of conflicts, even if such conflicts do not materialize, might adversely affect the public’s perception of us, as well as our relationship with other companies and our ability to enter into new relationships in the future, which could have a material adverse effect on our ability to do business.

In addition, conflicts of interest may arise between us and Centre Lane.

Centre Lane may favor its own interests over our and your interests.

Some provisions of our charter documents and Florida law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our shareholders and may prevent attempts by our shareholders to replace or remove our current management.

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As of December 31, 2023, Mr.

Kip Speyer, our Chairman of the Board, together with members of our Board and a principal shareholder, beneficially own approximately 26.7% of our total outstanding shares of Common Stock and preferred stock.

As a result of the concentrated ownership of the Company's stock, Mr.

Kip Speyer and our Board 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 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.

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

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Our Board is empowered, without shareholder approval, to issue one or more series of preferred stock with dividend, liquidation, conversion, voting or other rights which could dilute the interest of, or impair the voting power of, our Common Stock shareholders.

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

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

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