2 unchanged sentences
Legal fees associated with such legal proceedings are expensed as incurred.
−Removed: We review legal proceedings and claims on an ongoing basis and follow appropriate accounting guidance, including Financial Accounting Standards Board Accounting Standards Codification 450, Contingencies , when making accrual and disclosure decisions.
+Added: We review legal proceedings and claims on an ongoing basis and follow appropriate accounting guidance, including Financial Accounting Standards Board Accounting Standards Codification 450 ("ASC 450"), Contingencies , when making accrual and disclosure decisions.
We establish accruals for those contingencies where the incurrence of a loss is probable and can be reasonably estimated, and we disclose the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for our financial statements to not be misleading.
−Removed: To estimate whether a loss contingency should be accrued by a charge to income, we evaluate, among other factors, the probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of the loss.
+Added: To estimate whether a loss contingency should be accrued by a charge to income, we evaluate, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of such loss.
We do not accrue liabilities when the likelihood that the liability has been incurred is probable, but the amount cannot be reasonably estimated.
3 unchanged sentences
Certain Legal Matters
−Removed: On March 31, 2022, the Company reached a settlement for $1.7 million with the New York State Department of Taxation and Finance (the "Tax Department") following a sales and use tax audit covering the period from December 1, 2010 to November 30, 2019. The Tax Department had asserted that revenue derived from certain of the Company’s customer acquisition and list management services were subject to sales tax, as a result of being deemed taxable information services.
−Removed: The settlement amount was paid on April 1, 2022.
−Removed: Since March 1, 2022, the Company has been collecting and remitting New York sales tax on certain types of revenues from New York-based clients.
−Removed: On January 28, 2020, Fluent received a Civil Investigative Demand from the Federal Trade Commission ("FTC") regarding compliance with the FTC Act and the Telemarketing Sales Rule. On October 18, 2022, the FTC staff sent the Company a draft complaint and proposed consent order seeking injunctive relief and a civil monetary penalty. On January 12, 2023, the Company made an initial proposal of $5.0 million for the civil monetary penalty contingent on successful negotiation of the remaining outstanding injunctions and other provisions. The Company accrued the same amount for the year ending December 31, 2022. On May 26, 2023, Fluent agreed to the terms of a Stipulated Order for Permanent Injunction, Monetary Judgment, Civil Penalty Judgment, and Other Relief (the "FTC Consent Order"). The FTC Consent Order imposed a civil penalty of $2.5 million, required additional changes to the Company’s employment opportunities marketplace and programmatic advertising business, and resulted in the implementation of compliance measures across the business. The same day, Fluent transferred the amount of the civil penalty to a third-party escrow account.
−Removed: On July 17, 2023, the FTC filed its Complaint for Civil Penalties, Permanent Injunction, Monetary Relief, and Other Relief and, together with Fluent, filed a Joint Motion for Entry of Proposed Stipulated Order in the United States District Court for the Southern District of Florida. The FTC Consent Order was entered by the Court on August 11, 2023, and the escrow funds were released on August 15, 2023.
−Removed: The Company maintains insurance policies that cover certain legal costs, which include those incurred related to the FTC investigation.
−Removed: As of September 30, 2023, the Company had recognized $5.8 million as contra-expense to general and administrative expenses with a remaining current asset of $1.8 million related to these insurance policies.
−Removed: On October 6, 2020, the Company received notice from the Pennsylvania Office of the Attorney General ("PAAG") that it was reviewing the Company’s business practices relating to telemarketing. After the Company and the PAAG were unable to reach agreement on a proposed Assurance of Voluntary Compliance, the Commonwealth of Pennsylvania filed a complaint for permanent injunction, civil penalties, and other relief in the United States District Court for the Western District of Pennsylvania on November 2, 2022.
−Removed: On May 18, 2023, the parties entered into a settlement and jointly filed a Consent Petition for Final Decree, wherein the Company agreed to injunctive relief and to pay the PAAG $0.25 million for investigatory costs, all of which was paid as of June 30, 2023.
−Removed: The Company has been involved in a Telephone Consumer Protection Act class action, Daniel Berman v.
−Removed: Freedom Financial Network , which was originally filed in 2018.
−Removed: On May 31, 2023, the parties entered into an Amended Class Action Settlement Agreement (the "Berman Settlement Agreement"), which includes injunctive provisions and payment to plaintiffs of $9.75 million for legal fees and a consumer redress fund. On July 28, 2023, the Court preliminarily approved the Berman Settlement Agreement, and the Company contributed $3.1 million, payable following the final approval of the settlement.
−Removed: The final approval of the settlement is expected in mid-2024. The Company's contribution amounts were accrued as of December 31, 2022.
−Removed: This amount is payable $1.1 million in cash and $2.0 million pursuant to an interest-bearing note with a two-year term provided by a co-defendant, Freedom Financial Network.
+Added: The Company had been involved in a Telephone Consumer Protection Act class action, Daniel Berman v.
+Added: Freedom Financial Network , which was originally filed in the Northern District of California in 2018.
+Added: On May 31, 2023, the parties entered into an Amended Class Action Settlement Agreement (the "Berman Settlement Agreement"), which included injunctive provisions and payment to plaintiffs of $9.75 million for legal fees and a consumer redress fund, of which the Company was responsible for $3.1 million due upon final approval of the settlement.
+Added: That amount had been accrued as of December 31, 2022.
+Added: On July 28, 2023, the Court preliminarily approved the Berman Settlement Agreement.
+Added: The final approval of the Berman Settlement Agreement was filed on February 23, 2024.
+Added: The Company made a cash payment of $1.1 million on March 15, 2024 and entered into a $2.0 million interest-bearing note provided by co-defendant, Freedom Financial Network, as discussed in Note 5, Long-term debt, net , to its consolidated financial statements, to satisfy its obligations under the Berman Settlement Agreement.
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.