What changed in this filing

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Item 1. Financial Statements

2025-08-19 compared with 2025-05-16 · 285 added, 161 removed, 620 unchanged (42% of the section changed)

2 unchanged sentences

(Amounts in thousands, except share and per share data)

March 31, 2025

June 30, 2025

December 31, 2024

4 unchanged sentences

Prepaid expenses and other current assets

Restricted cash

Current restricted cash

Total current assets

46,948 65,955

Non-current restricted cash

Property and equipment, net

41 unchanged sentences

(Amounts in thousands, except share and per share data)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Costs and expenses:

4 unchanged sentences

Depreciation and amortization

Goodwill and intangible assets impairment

Total costs and expenses

2 unchanged sentences

Fair value adjustment of Convertible Notes with related parties

Loss on early extinguishment of debt

Loss before income taxes

Income tax expense

Income tax benefit (expense)

Basic and diluted loss per share:

6 unchanged sentences

Total shareholders'

Balance at March 31, 2025

Vesting of restricted stock units and issuance of stock under incentive plans

Share-based compensation

Issuance of pre-funded and common stock warrants

Exercise of pre-funded warrants

Balance at June 30, 2025

Balance at December 31, 2024

Vesting of restricted stock units and issuance of stock under incentive plans

Share-based compensation expense

Issuance of pre-funded warrants

Issuance of pre-funded and common stock warrants

Exercise of pre-funded warrants

Balance at March 31, 2025

Balance at June 30, 2025

Treasury stock

1 unchanged sentence

Total shareholders'

Balance at March 31, 2024

Vesting of restricted stock units and issuance of stock under incentive plans

Share-based compensation

Issuance of pre-funded warrants

Balance at June 30, 2024

Balance at December 31, 2023

1 unchanged sentence

Share-based compensation expense

Balance at March 31, 2024

Issuance of pre-funded warrants

Balance at June 30, 2024

See notes to consolidated financial statements

1 unchanged sentence

(Amounts in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

Adjustments to reconcile net loss to net cash provided by operating activities:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization

Non-cash loan amortization expense

Non-cash gain on contingent consideration

Non-cash loss on early extinguishment of debt

Share-based compensation expense

Fair value adjustment of Convertible Notes with related parties

Goodwill impairment

Impairment of intangible assets

Non-cash loss on asset write-off

Allowance for credit losses

10 unchanged sentences

Capitalized costs included in intangible assets

Acquisition of property and equipment

Net cash used in investing activities

3 unchanged sentences

Debt financing costs

Proceeds from issuance of pre-funded warrants

Net cash used in financing activities

Proceeds from issuance of pre-funded and common stock warrants

Net cash (used in) provided by financing activities

Net decrease in cash, cash equivalents, and restricted cash

7 unchanged sentences

Long-term debt issuance

Consideration for True North

See notes to consolidated financial statements

6 unchanged sentences

Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations.

The accompanying unaudited consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods ended March 31, 2025 and 2024 , but are not necessarily indicative of the results of operations to be anticipated for any future interim periods or for the full year ending December 31, 2025 .

The accompanying unaudited consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods ended June 30, 2025 and 2024 , but are not necessarily indicative of the results of operations to be anticipated for any future interim periods or for the full year ending December 31, 2025 .

From time to time, the Company may enter into relationships or investments with other entities, and, in certain instances, the entity in which the Company has a relationship or investment may qualify as a variable interest entity ("VIE").

6 unchanged sentences

As part of this evaluation, management may consider the potential mitigating impact of its plans that have not been fully implemented as of the issuance date if (a) it is probable that management's plans will be effectively implemented on a timely basis, and (b) it is probable that the plans, when implemented, will alleviate the relevant conditions or events that raise substantial doubt about the Company's ability to continue as a going concern within one year after the issuance date.

The Company has experienced a continued decline in the number of users registering on its owned and operated digital media properties ("O&O Sites") starting in 2020, following its implementation of the Traffic Quality Initiative, which eliminated a large portion of the Company's third -party affiliate traffic.

In 2023, the FTC Consent Order (as defined in Note 10 , Contingencies) imposed more rigorous standards and vetting of the Company's third -party publishers, some of whom elected not to work with the Company, which negatively impacted the Company's registration volume on its O&O Sites (see Note 10 , Contingencies ).

These issues, coupled with intermittent difficulties sourcing traffic from social media sites have resulted in declining revenue and profitability.

Borrowings under the SLR Revolver (as defined in Note 4 , Long-term debt, net ) pursuant to the SLR Credit Agreement (as defined and discussed in Note 4 , Long-term debt, net ) are limited to a borrowing base, that fluctuates weekly, based on eligible accounts receivable.

The Company has experienced declining revenue and profitability in the last several years, in large part due to difficulties sourcing traffic for the Company's owned and operated digital media properties ("O&O Sites").

Additionally, in 2023, the FTC Consent Order (as defined in Note 10 , Contingencies) imposed more rigorous standards and vetting of the Company's third-party publishers, some of whom elected not to work with the Company, which negatively impacted the Company's registration volume on its O&O Sites (see Note 10 , Contingencies).

Moreover, borrowings under the SLR Revolver (as defined in Note 4 , Long-term debt, net) pursuant to the SLR Credit Agreement (as defined and discussed in Note 4 , Long-term debt, net) are limited to a borrowing base, that fluctuates weekly, based on eligible accounts receivable.

As a result of the borrowing base limit and the above performance issues, the available borrowing capacity has the potential to be insufficient to fund operations and meet the Company's needs.

1 unchanged sentence

The Company will continue to monitor the performance of its business units to determine the impact of potential divestments and consider further cost reduction measures and reallocation of resources that will enable the Company to meet its projected budget and cash flow requirements.

As of March 31, 2025 , the Company was in compliance with its financial covenants under the SLR Credit Agreement.

However, the Company’s current forecasts indicate that compliance with its financial covenants may be at risk in the next twelve months.

If, during any fiscal quarter, the Company does not comply with any of its financial covenants, such non-compliance would result in an event of default that would give SLR the right to accelerate maturities.

In such case, the Company would not have sufficient funds to repay the SLR Term Loan (as defined and discussed in Note 4 , Long-term debt, net ) under the SLR Credit Agreement and any outstanding balance on the SLR Revolver (as defined below in Note 4 , Long-term debt, net ).

On May 15, 2025, the Company entered into securities purchase agreements, pursuant to which the purchasers agreed to invest expected gross proceeds of $ 4,025 (as defined and discussed in Note 12 , Subsequent events ).

Even with the proceeds from such raise, there is no assurance that the available cash, plus availability under the borrowing base on the SLR Revolver will be sufficient to fund operations over the next twelve months, and, if needed, the Company would expect to raise additional capital.

If the Company is not able to raise sufficient capital to fund operations at their current levels, the Company will consider implementing cost-saving measures, but there is no guarantee that such plans will be successfully executed or have the expected benefits.

As a result, management has concluded that there is substantial doubt about the Company's ability to continue as a going concern for one year after the date of issuance of this Quarterly Report on Form 10 -Q.

As of June 30, 2025, the Company was not in compliance with its financial covenants under the SLR Credit Agreement (as defined below in Note 4 , Long-term debt, net ) which would have resulted in an event of default.

However, on August 15, 2025, the Credit Parties and SLR entered into the Fifth Amendment to the SLR Credit Agreement, (the "Fifth Amendment") which, among other things, required that the Company raise at least $ 8,500 of additional capital by August 19, 2025.

On August 19, 2025, the Company entered into securities purchase agreements for approximately $ 10.3 million in equity capital, expected to close on August 19, 2025.

See Note 12, Subsequent events , for further details.

In addition, the Fifth Amendment waived non-compliance with the financial covenants as of June 30, 2025 and modified the financial covenants for the periods through August 31, 2026.

Although the financial covenants under the SLR Credit Agreement were reset based on the Company’s twelve month projections, the Company has not met its projection for certain recent quarters and if during any future quarter, the Company does not comply with any of its financial covenants, such non-compliance would result in default and therefore give SLR the right to accelerate maturities.

In such case, the Company would not have sufficient funds to repay the borrowings under the SLR Credit Agreement.

As a result of the foregoing, management has concluded that there is substantial doubt about the Company's ability to continue as a going concern for one year after the date of issuance of this Quarterly Report on Form 10 -Q.

The accompanying consolidated financial statements do not include any adjustments relating to the possible future effects on the recoverability and classification of recorded assets and classification of liabilities that might result should the Company be unable to continue as a going concern.

47 unchanged sentences

If a customer pays consideration before the Company's performance obligations are satisfied, such amounts are classified as deferred revenue on the consolidated balance sheets.

March 31, 2025 ,

June 30, 2025 ,

December 31, 2024 , and

5 unchanged sentences

When there is a delay between the period in which revenue is recognized and when a customer invoice is issued, revenue is recognized, and the corresponding amounts are recorded as unbilled revenue within accounts receivable on the consolidated balance sheets.

As of March 31, 2025 , December 31, 2024 , and December 31, 2023, unbilled revenue included in the Company's accounts receivable was $ 13,488 , $ 18,625 , and $ 21,488 , respectively.

As of June 30, 2025 , December 31, 2024 , and December 31, 2023, unbilled revenue included in the Company's accounts receivable was $ 11,014 , $ 18,625 , and $ 21,488 , respectively.

In line with industry practice, the unbilled revenue balance is recorded based on the Company's internally tracked conversions, net of estimated variances between this amount and the amount tracked and subsequently confirmed by customers.

16 unchanged sentences

Revenue Disaggregation

The following table presents the Company’s disaggregated revenue by media resources along with its availability and demand for the three months ended March 31, 2025 and 2024 , based on segment reporting:

Three Months Ended March 31,

The following table presents the Company’s disaggregated revenue by media resources along with its availability and demand for the three and six months ended June 30, 2025 and 2024 , based on segment reporting:

Three Months Ended June 30,

(In thousands)

10 unchanged sentences

$ 43,112 $ 1,594 $ 44,706 $ 55,132 $ 3,585 $ 58,717

Balance is fully related for the first quarter of 2025 and partially related for the first quarter of 2024 to commission revenues.

Balance is fully related for the three months ended June 30, 2025 and partially related for the three months ended June 30, 2024 to commission revenues.

Six Months Ended June 30,

(In thousands)

Owned and Operated

$ 52,484 $ — $ 52,484 $ 86,654 $ — $ 86,654

Commerce Media Solutions

28,740 — 28,740 13,668 — 13,668

Call Solutions

15,709 — 15,709 12,771 — 12,771

— 2,948 2,948 — 5,957 5,957

All Other (1)

— 35 35 — 5,650 5,650

Total Revenue

$ 96,933 $ 2,983 $ 99,916 $ 113,093 $ 11,607 $ 124,700

Balance is fully related for the six months ended June 30, 2025 and partially related for the six months ended June 30, 2024 to commission revenues.

The Owned and Operating and Commerce Media Solutions in the table above represent the Company’s data and performance-based marketing revenue.

Call Solutions mainly represents the Company’s performance-based marketing revenue.

Our performance is subject to fluctuations related to seasonality and cyclicality in our clients' businesses and in media sources.

Other factors affecting our business may include macroeconomic conditions that impact the digital advertising industry, the various client verticals we serve, and general market conditions.

(d) Use of estimates

1 unchanged sentence

GAAP requires the Company’s management to make estimates and assumptions relating to the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods.

Significant items subject to such estimates and assumptions include the allowance for credit losses, useful lives of intangible assets, recoverability of the carrying amounts of intangible assets, the portion of revenue subject to estimates for variances between internally-tracked conversions and those confirmed by the customer, the variable commission revenue based on the estimated LTV, consolidation of VIE, fair value of Convertible Notes (as defined in Note 4 ) with related parties based on input assumptions, shared-based compensation and income tax provision.

Significant items subject to such estimates and assumptions include the allowance for credit losses, useful lives of intangible assets, recoverability of the carrying amounts of intangible assets, the portion of revenue subject to estimates for variances between internally-tracked conversions and those confirmed by the customer, the variable commission revenue based on the estimated LTV, consolidation of VIE, fair value of Convertible Notes (as defined in Note 4 , Long-term debt, net ) with related parties based on input assumptions, shared-based compensation and income tax provision.

These estimates are often based on complex judgments and assumptions that management believes to be reasonable but are inherently uncertain and unpredictable.

11 unchanged sentences

Goodwill represents the difference between the purchase price and the estimated fair value of net assets acquired when accounted for by the acquisition method of accounting.

March 31, 2025 and

June 30, 2025 and

December 31, 2024 , there was

no remaining goodwill.

(g) Common stock warrants

The Company accounts for warrants as either equity-classified or liability-classified instruments in accordance with the guidance provided in ASC 480, Distinguishing Liabilities from Equity , and ASC 815, Derivatives and Hedging .

Equity-classified warrants are those that are indexed to the Company’s own stock and meet the criteria for equity classification under ASC 815 - 40.

These instruments are recorded in equity at fair value on the issuance date and are not subsequently remeasured, provided the Company continues to meet the equity classification criteria.

Income (loss) per share

Basic income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding, restricted stock units ("RSUs"), and restricted common stock that have vested but not been delivered during the period.

Diluted income (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock and is calculated using the treasury stock method for stock options, RSUs, restricted stock, pre-funded warrants (see Note 7 , Equity below), direct offering (see Note 7 , Equity below), deferred common stock, and unvested shares.

Diluted income (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock and is calculated using the treasury stock method for stock options, RSUs, restricted stock, pre-funded warrants, common stock warrants, direct offering, deferred common stock, and unvested shares (see Note 7 , Equity below).

Stock equivalent shares are excluded from the calculation in loss periods, as their effects would be anti-dilutive.

For the three months ended March 31, 2025 and 2024 , basic and diluted loss per share were as follows:

Three Months Ended March 31,

For the three and six months ended June 30, 2025 and 2024 , basic and diluted loss per share were as follows:

Three Months Ended June 30,

Six Months Ended June 30,

$ ( 7,223 ) $ ( 11,627 ) $ ( 15,492 ) $ ( 17,903 )

11 unchanged sentences

$ ( 0.30 ) $ ( 0.75 ) $ ( 0.68 ) $ ( 1.11 )

Based on exercise prices compared to the average stock prices for the three months ended March 31, 2025 and 2024 , certain stock equivalents, including RSUs and stock options, have been excluded from the diluted weighted average share calculations due to their anti-dilutive nature.

Three Months Ended March 31,

Based on exercise prices compared to the average stock prices for the three and six months ended June 30, 2025 and 2024 , certain stock equivalents have been excluded from the diluted weighted average share calculations due to their anti-dilutive nature.

Three Months Ended June 30,

Six Months Ended June 30,

Restricted stock units

2 unchanged sentences

331,667 298,331 331,667 298,331

Common stock warrants

1,829,956 — 1,829,956 —

Total anti-dilutive securities

4 unchanged sentences

Intangible assets, net, other than goodwill, consist of the following:

Amortization period (in years) March 31, 2025

Amortization period (in years) June 30, 2025

December 31, 2024

8 unchanged sentences

5 - 10 31,292 31,292

Non-compete agreements

2 - 5 1,768 1,768

Total gross amount

10 unchanged sentences

( 30,131 ) ( 28,807 )

Non-compete agreements

( 1,768 ) ( 1,768 )

Total accumulated amortization

12 unchanged sentences

the acquisition of a 50 % interest in Winopoly, LLC, effective April 1, 2020;

and the consolidation of TAPP Influencers Corp.

and the initial consolidation of TAPP Influencers Corp.

("TAPP"), effective January 9, 2023 .

1 unchanged sentence

(Amounts in thousands, except share and per share data)

The Company completed its quarterly triggering event assessment for the three months ended of March 31, 2025 and determined that no triggering event had occurred requiring further impairment assessment of its long-lived assets.

Amortization expenses of $ 2,391 and $ 2,483 for the three months ended March 31, 2025 and 2024 , respectively, are included in depreciation and amortization expenses in the consolidated statements of operations.

As of March 31, 2025 , intangible assets with a carrying amount of $ 768 , included in the gross amount of software developed for internal use, have not commenced amortization, as they are not ready for their intended use.

As of March 31, 2025 , estimated amortization expenses related to the Company's intangible assets for the remainder of 2025 and through 2030 and thereafter are as follows:

March 31, 2025

The Company completed its quarterly triggering event assessment for the three months ended of June 30, 2025 and determined that no triggering event had occurred requiring further impairment assessment of its long-lived assets.

Amortization expenses of $ 2,407 and $ 2,495 for the three months ended June 30, 2025 and 2024 , respectively, and $ 4,798 and $ 4,978 for the six months ended June 30, 2025 and 2024 , respectively, are included in depreciation and amortization expenses in the consolidated statements of operations.

As of June 30, 2025 , intangible assets with a carrying amount of $ 750 , included in the gross amount of software developed for internal use, have not commenced amortization, as they are not ready for their intended use.

Further, during the six months ended June 30, 2025 , the Company recognized a loss of $ 598 related to the write-off of the acquired proprietary technology in connection with TAPP ( see Note 11 , Variable Interest Entity).

As of June 30, 2025 , estimated amortization expenses related to the Company's intangible assets for the remainder of 2025 and through 2030 and thereafter are as follows:

June 30, 2025

Remainder of 2025

2 unchanged sentences

Long-term debt, net of unamortized discount and financing costs, related to the SLR Credit Facility, Note Payable (as defined herein), and Convertible Notes with related parties (as set forth herein) consisted of the following:

March 31, 2025

June 30, 2025

December 31, 2024

12 unchanged sentences

The SLR Credit Agreement provides for a $ 20,000 term loan (the "SLR Term Loan") and a revolving credit facility of up to $ 30,000 (the "SLR Revolver," and together with the SLR Term Loan, the "SLR Credit Facility").

As of March 31, 2025 , the SLR Credit Facility had an outstanding principal balance of $ 21,767 (of which $ 1,767 relates to the SLR Revolver) and matures on April 2, 2029.

As of June 30, 2025 , the SLR Credit Facility had an outstanding principal balance of $ 20,000 (of which none relates to the SLR Revolver) and matures on April 2, 2029.

The Borrower used a portion of the net proceeds of the SLR Credit Facility to repay the outstanding $ 30,000 term loan due on September 30, 2025, under the credit agreement dated March 31, 2021, by and among the Borrower, certain subsidiaries of the Borrower as guarantors, the lenders thereto, and Citizens Bank, N.A.

7 unchanged sentences

The Applicable Margin will be reduced to 5.0 % when the Borrower's fixed charge coverage ratio is greater than 1.10 to 1.

The opening interest rate of the SLR Credit Facility was 10.81 % (SOFR + CSA + 5.25 %), which changed to 10.33 % (SOFR + CSA+ 5.75 %) as of March 31, 2025 .

The opening interest rate of the SLR Credit Facility was 10.81 % (SOFR + CSA + 5.25 %), which changed to 10.34 % (SOFR + CSA+ 5.75 %) as of June 30, 2025 .

The SLR Credit Agreement contains restrictive covenants that impose limitations on the way the Credit Parties conducts business, including limitations on the amount of additional debt the Credit Parties are able to incur and their ability to make certain investments or other restricted payments.

1 unchanged sentence

The Borrower's ability to draw on the SLR Revolver depends on its borrowing base, which is calculated weekly by applying specified percentages established by SLR to the Borrower's eligible accounts receivable and cash, less reserves, subject to certain limitations.

Debt issuance costs and debt discount costs, net of accumulated amortization, related to the issuance and amendments of the SLR Revolver were $ 803 and $ 1,020 , respectively, as of March 31, 2025 .

When the borrowing base does not support amounts exceeding our $ 20,000 SLR Term Loan, we are required to maintain a restricted cash balance with the lender.

Debt issuance costs and debt discount costs, net of accumulated amortization, related to the issuance and amendments of the SLR Revolver were $ 753 and $ 956 , respectively, as of June 30, 2025 .

The amounts are included in other non-current assets in the Company's consolidated balance sheets.

9 unchanged sentences

In addition, SLR ( 1 ) waived non-compliance with the financial covenants as of December 31, 2024, ( 2 ) extended the duration of the call protection applicable to the loans, and ( 3 ) modified the financial covenants through December 31, 2025.

As of March 31, 2025 , the Credit Parties were in compliance with their financial covenants under the SLR Credit Agreement.

However, the Company’s current forecasts indicate that compliance with its financial covenants may be at risk in the next twelve months.

As of June 30, 2025, the Company was not in compliance with its financial covenants under the SLR Credit Agreement which would have resulted in an event of default.

On August 15, 2025, the Credit Parties and SLR entered into the Fifth Amendment to the SLR Credit Agreement, (the "Fifth Amendment") which, among other things, required that the Company raise at least $ 8,500 of additional capital by August 19, 2025.

On August 19, 2025, the Company entered into securities purchase agreements for approximately $10.3 million in equity capital, expected to close on August 19, 2025.

See Note 12, Subsequent events , for further details.

In addition, SLR ( 1 ) waived non-compliance with the financial covenants as of June 30, 2025 and ( 2 ) modified the financial covenants for the periods through August 31, 2026.

In such case, the Company would not have sufficient funds to repay the SLR Term Loan under the SLR Credit Agreement and any outstanding balance on the SLR Revolver.

Because the Company believes there is risk that it will not be in compliance with its financial covenants in the next twelve months, all borrowings under the Credit Agreement have been classified as current as of March 31, 2025 .

As a result of the foregoing, all borrowings under the Credit Agreement have been classified as current as of June 30, 2025.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2 unchanged sentences

The Note Payable bears interest equal to one -month CME Term SOFR (defined as the rate published by the CME Group Benchmark Administration Limited) plus 11.0 % per annum, compounded quarterly.

The opening interest rate of the Note Payable was 16.32 % (SOFR + 11 %), which changed to 15.52 % (SOFR + 11% ) as of March 31, 2025 .

The opening interest rate of the Note Payable was 16.32 % (SOFR + 11 %), which changed to 15.32 % (SOFR + 11% ) as of June 30, 2025 .

A maximum of $ 1,000 of the borrowings under the Note Payable are secured by substantially all of the assets of Fluent, LLC.

5 unchanged sentences

The Convertible Notes mature on April 2, 2029, and bear interest at 13 % per annum payable.

Subject to certain payment conditions in the Subordination Agreement (as defined below), the Company may pay interest quarterly in kind or in cash beginning December 31, 2024.

and may prepay the Convertible Notes in whole or in part at any time upon ten days’ written notice, provided that no prepayment will be permitted prior to stockholder approval without the consent of the applicable holder.

Subject to certain payment conditions in the Subordination Agreement (as defined below), the Company may pay interest quarterly in kind or in cash beginning December 31, 2024 and may prepay the Convertible Notes in whole or in part at any time upon ten days’ written notice.

Each holder of a Convertible Note is entitled to convert the Conversion Amount (as defined below) into shares of the Company's common stock at a conversion price equal to the lesser of (i) $ 3.01 , and (ii) the greater of (A) the consolidated closing bid price of the Company's common stock as reported on Nasdaq on the applicable conversion date and (B) $ 1.00 , in each case subject to adjustments for stock splits, recapitalizations and the like.

However, the applicable conversion price will in no event be lower than the price established by clause (ii) above unless and until the Company's stockholders have approved matters related to the issuance of common stock upon conversion of the Convertible Notes, which vote is expected to take place at the Company's 2025 annual meeting of stockholders.

The “Conversion Amount” is the sum of all or any portion of the outstanding principal amount of the Convertible Note, as designated by the holder upon exercise of its right of conversion, plus all accrued and unpaid interest.

The Convertible Notes are subject to additional limits on conversion until stockholder approval is obtained, including an aggregate limit on the number of shares that may be issued upon conversion to 19.99 % of the Company's outstanding shares of common stock and provisions to prevent a change of control as defined in the rules of the Nasdaq Stock Market.

Holders of the Convertible Notes will be permitted to vote on such stockholder approval but may not vote any shares obtained from conversion of the Convertible Notes prior to such vote.

The Convertible Notes were subject to additional limits on conversion until stockholder approval was obtained on June 18, 2025.

In connection with the Second Amendment and the Notes Purchase Agreement, the Company and SLR entered into a Second Amendment Subordination Agreement with each purchaser of the Convertible Notes on August 19, 2024 ( the "Subordination Agreements").

13 unchanged sentences

As a result, based on ASC 825 - 10, the Company recorded a day one unrealized loss on the Convertible Notes of $ 2,110 .

As of March 31, 2025 , the principal balance of the Convertible Notes was $ 2,217 , with a fair value of $ 3,800 .

The Company recognized an additional increase in fair value of $ 80 for the three months ended March 31, 2025 , which was recognized as after current period other income (loss) from operations.

For the three months ended March 31, 2025 , accrued interest was paid in kind.

As of March 31, 2025 , scheduled future maturities of the Company's debt are as follows, not reflective of the debt being accelerated as noted in Note 1 :

March 31, 2025

As of June 30, 2025 , the principal balance of the Convertible Notes was $ 2,289 , with a fair value of $ 3,322 .

The Company recognized an additional decrease in fair value of $ 478 and $ 398 for the three and six months ended June 30, 2025 , respectively, which was recognized in other income (loss) from operations.

For the six months ended June 30, 2025 , accrued interest was paid in kind.

As of June 30, 2025 , scheduled future maturities of the Company's debt are as follows, not reflective of the debt being accelerated as noted in Note 1 :

June 30, 2025

Remainder of 2025

3 unchanged sentences

Fair Value Measurements

The fair value of the Company's cash, cash equivalents, restricted cash, accounts receivable, accounts payable, and accrued liabilities approximate their carrying values because of the short-term nature of these instruments.

The fair value of the Company's cash, cash equivalents, current restricted cash, accounts receivable, accounts payable, and accrued liabilities approximate their carrying values because of the short-term nature of these instruments.

Restricted cash

Restricted cash includes a separately maintained cash account, as required under the terms of a lease agreement the Company entered into on October 10, 2018 for office space in New York City.

As of March 31, 2025 , the Company regards the fair value of its long-term debt to approximate its carrying value.

The following tables present the Company’s fair value hierarchy for assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2025 and December 31, 2024 :

March 31, 2025

On April 15, 2025, the Company received the landlord’s consent for the second amendment to its sublease, which reduced the subleased premises and payments, effective March 19, 2025.

The consent also approved the extension of the sublease term by four years, effective April 15, 2025.

In connection with this lease agreement, the Company recorded $ 710 in non-current restricted cash as of June 30, 2025 , and $ 1,255 in current restricted cash as of December 31, 2024 , on the consolidated balance sheets.

The Company also recorded $ 1,673 as current restricted cash on the consolidated balance sheets as of June 30, 2025 related to the SLR Credit Agreement (as defined below in Note 4 , Long-term debt, net ).

As of June 30, 2025 , the Company regards the fair value of its long-term debt to approximate its carrying value.

The following tables present the Company’s fair value hierarchy for assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2025 and December 31, 2024 :

June 30, 2025

December 31, 2024

5 unchanged sentences

— — 3,322 — — 3,720

Contingent consideration in connection with TAPP consolidation (2)

Contingent consideration in connection with TAPP (2)

— — 17 — — 988

7 unchanged sentences

See Note 4 , Long-term debt, net .

The following is a reconciliation of the fair value from December 31, 2024 to March 31, 2025 :

The following is a reconciliation of the fair value from December 31, 2024 to June 30, 2025 :

Fair value as of December 31, 2024

Loss on change in fair value reported in the consolidated statement of operations

Fair value as of March 31, 2025

Gain on change in fair value reported in the consolidated statements of operations

Fair value as of June 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2 unchanged sentences

Both approaches are based on the following assumptions:

March 31, 2025

June 30, 2025

Face value of principal payable

4 unchanged sentences

Contingent Consideration

In connection with the contingent consideration received related to the consolidation of TAPP, the Company had to determine the fair value of the identified assets acquired and liabilities assumed.

In connection with the contingent consideration received related to the initial consolidation of TAPP, the Company had to determine the fair value of the identified assets acquired and liabilities assumed.

The Company determined that the estimated fair value of the net assets acquired, excluding the net working capital, was a Level 3 measurement, as certain inputs to determine fair value were unobservable.

2 unchanged sentences

Payment of compensation expense

Fair value as of March 31, 2025

Fair value as of June 30, 2025

The fair value of certain long-lived non-financial assets and liabilities may be required to be measured on a nonrecurring basis in certain circumstances, including when there is evidence of impairment.

As of March 31, 2025 , certain non-financial assets have been measured at fair value subsequent to their initial recognition.

As of June 30, 2025 , certain non-financial assets have been measured at fair value subsequent to their initial recognition.

The Company determined the estimated fair value to be a Level 3 measurement, as certain inputs used to determine fair value are unobservable.

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The Company updates its estimated AETR on a quarterly basis and, if the estimate changes, a cumulative adjustment is made.

As of March 31, 2025 and December 31, 2024 , the Company recorded a full valuation allowance against net deferred tax assets and intends to continue maintaining a full valuation allowance on these net deferred tax assets until there is sufficient evidence to support the release of all or a portion of these valuation allowances.

As of June 30, 2025 and December 31, 2024 , the Company recorded a full valuation allowance against net deferred tax assets and intends to continue maintaining a full valuation allowance on these net deferred tax assets until there is sufficient evidence to support the release of all or a portion of these valuation allowances.

Release of some or all of the valuation allowance would result in the recognition of certain deferred tax assets and an increase in deferred tax benefit for any period in which such a release may be recorded.

However, the exact timing and amount of any valuation allowance release are subject to change, depending upon the level of profitability that the Company is able to achieve and the net deferred tax assets available.

For the three months ended March 31, 2025 , the Company's effective income tax rate of 2.9 % differed from the statutory federal income tax rate of 21 % primarily due to state and local tax expense and losses for which no tax benefit is recognized as such amounts are fully offset with a valuation allowance.

For the three months ended March 31, 2024 , the Company's effective income tax rate of 16.9 % primarily represents the state and local tax expense, offset by the benefit of federal research and development credits.

For the six months ended June 30, 2025 , the Company's effective income tax rate of negative 0.8 % differed from the statutory federal income tax rate of 21 % primarily due to state and local tax expense and losses for which no tax benefit is recognized as such amounts are fully offset with a valuation allowance.

For the six months ended June 30, 2024 , the Company's effective income tax rate of 0.8 % primarily represents state and local tax expense and losses for which no tax benefit was recognized.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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For those income tax positions where it is not more-likely-than- not that a tax benefit will be sustained, no tax benefit has been recognized in the Company's financial statements.

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBB Act”) was enacted, introducing amendments to U.S.

tax laws with various effective dates from 2025 to 2027.

The Company is currently assessing the implications of these tax law changes and does not expect that they will have a material impact on its financial statements in the current year.

Since the OBBB Act was enacted subsequent to the Company’s balance sheet date, the Company’s tax provision for the three and six months ended June 30, 2025, does not incorporate the effects of these tax law changes.

Effective at 6:00 p.m.

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The common stock began trading on a reverse split-adjusted basis at the opening of trading on The Nasdaq Capital Market on April 12, 2024, under the same symbol (FLNT) with a new CUSIP number ( 34380C 201 ).

As of March 31, 2025 and December 31, 2024 , the number of issued shares of common stock was 21,412,255 and 20,791,431 , respectively, which included shares of treasury stock of 768,595 and 768,595 , respectively.

For the three months ended March 31, 2025 , the increase in the number of issued shares of common stock was the result of the exercise of pre-funded warrants for 620,824 shares, as described below.

Direct Offering:

As of June 30, 2025 and December 31, 2024 , the number of issued shares of common stock was 25,037,334 and 20,791,431 , respectively, which included shares of treasury stock of 768,595 and 768,595 , respectively.

For the six months ended June 30, 2025 , the increase in the number of issued shares of common stock was the result of the exercise of pre-funded warrants for 3,928,073 shares, as described below, and 317,830 shares of common stock issued upon vesting of RSUs, in which no shares of common stock were withheld to cover statutory taxes upon such vesting.

Registered direct offering

November 29, 2024, the Company entered into securities purchase agreements (the "Registered Direct Purchase Agreements") with certain pre-existing institutional investors (the "Registered Direct Investors"), pursuant to which the Company agreed to sell to such investors an aggregate of

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4 % of the gross proceeds raised in the Registered Direct Offering by an investor making an investment of

December 2, 2024, the Registered Direct Offering was closed and the gross proceeds totaled

The Registered Direct Offering closed on

December 2, 2024, with aggregate gross proceeds totaling

$ 5,750 , before deducting offering expenses payable by the Company of

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The Company has used the net proceeds from the Registered Direct Offering for general corporate purposes, which included capital expenditures, working capital and general and administrative expenses.

Pre-Funded Warrants

On May 13, 2024, the Company entered into securities purchase agreements (the "May Purchase Agreements") with certain accredited or sophisticated investors (the "May Purchasers"), all of whom were related parties, pursuant to which the Company sold pre-funded warrants (the "May Pre-Funded Warrants") to purchase up to 2,955,084 shares of the Company's common stock, at a purchase price of $ 3.384 per May Pre-Funded Warrant (the "May Private Placement").

Private equity securities offerings

On May 13, 2024, the Company entered into securities purchase agreements (the "May 2024 Purchase Agreements") with certain accredited or sophisticated investors (the "May 2024 Purchasers"), all of whom were related parties, pursuant to which the Company sold pre-funded warrants (the "May 2024 PFWs") to purchase up to 2,955,084 shares of the Company's common stock, at a purchase price of $ 3.384 per May 2024 PFW (the "May 2024 Private Placement").

The May 2024 Purchasers included three officers and/or directors and the largest stockholder of the Company.

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The aggregate gross proceeds for the May 2024 Private Placement totaled $ 10,000 , before deducting offering expenses payable by the Company of $ 100 .

The May Pre-Funded Warrants, which terminated when exercised in full, had an exercise price of $ 0.0005 per share of common stock and became immediately exercisable upon stockholder approval.

The May 2024 PFWs, which terminated when exercised in full, had an exercise price of $ 0.0005 per share of common stock and became immediately exercisable upon stockholder approval.

Stockholder approval of the May 2024 Private Placement was obtained on July 2, 2024, at a special meeting of the Company's stockholders.

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(Amounts in thousands, except share and per share data)

On November 29, 2024, the Company entered into securities purchase agreements (the "December Purchase Agreements") with certain accredited or sophisticated investors (the "December Purchasers"), all of whom were related parties, pursuant to which the Company agreed to sell to the December Purchasers unregistered pre-funded warrants (the "December Pre-Funded Warrants") to purchase up to 1,187,802 shares of the Company’s common stock, at a purchase price of $ 2.3147 per December Pre-Funded Warrant and an exercise price of $ 0.0005 per share of common stock (the "December Private Placement").

On November 29, 2024, the Company entered into securities purchase agreements (the "December 2024 Purchase Agreements") with certain accredited or sophisticated investors (the "December 2024 Purchasers"), all of whom were related parties, pursuant to which the Company agreed to sell to the December 2024 Purchasers unregistered pre-funded warrants (the "December 2024 PFWs") to purchase up to 1,187,802 shares of the Company’s common stock, at a purchase price of $ 2.3147 per December 2024 PFW and an exercise price of $ 0.0005 per share of common stock (the "December Private Placement").

The December 2024 Purchasers consisted of three officers and/or directors and the Company's largest stockholder of the Company.

No underwriting discounts or commissions were paid with respect to the December Private Placement.

On December 2, 2024, the Company closed the December Private Placement receiving aggregate gross proceeds totaled $ 2,750 from the sale of the December Pre-Funded Warrants, before deducting offering expenses payable by the Company of $ 22 .

The Company closed the December 2024 Private Placement on December 2, 2024, with aggregate gross proceeds totaling $ 2,750 from the sale of the December 2024 PFWs, before deducting offering expenses payable by the Company of $ 22 .

The Company's largest stockholder exercised its warrant on December 9, 2024.

The December Pre-Funded Warrants purchased by three officers and/or directors of the Company will be immediately exercisable after stockholder approval transactions contemplated by the December Purchase Agreements and will terminate when exercised in full.

On March 19, 2025, the Company entered into securities purchase agreements (the "March Purchase Agreements") with certain accredited or sophisticated investors (the "March Purchasers"), all of whom were related parties, pursuant to which the Company sold to the March Purchasers unregistered pre-funded warrants (the "March Pre-Funded Warrants") to purchase up to 2,332,104 shares of the Company's common stock, at a purchase price of $ 2.174 per March Pre-Funded Warrant and an exercise price of $ 0.0005 per share of common stock (the "March Private Placement").

The March Pre-Funded Warrants will be immediately exercisable after stockholder approval and terminate when exercised in full.

The December 2024 PFWs purchased by three officers and/or directors of the Company were subject to stockholder approval, which was obtained on June 18, 2025, and terminated when exercised in full.

The officers and/or directors exercised their December 2024 PFWs on June 24, 2025.

On March 19, 2025, the Company entered into securities purchase agreements (the "March 2025 Purchase Agreements") with certain accredited or sophisticated investors (the "March 2025 Purchasers"), all of whom were related parties, pursuant to which the Company sold to the March 2025 Purchasers unregistered pre-funded warrants (the "March 2025 PFWs") to purchase up to 2,332,104 shares of the Company's common stock, at a purchase price of $ 2.174 per March 2025 PFW and an exercise price of $ 0.0005 per share of common stock (the "March 2025 Private Placement").

The March 2025 Purchasers consisted of three officers and/or directors of the Company, the Company's largest stockholder, and an institutional investor.

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The aggregate gross proceeds totaled $ 5,070 , before deducting offering expenses payable by the Company of $ 70 .

The Company's largest stockholder and an institutional investor exercised their March Pre-Funded Warrants on March 20, 2025.

The March Pre-Funded Warrants purchased by the three officers and/or directors of the Company will be immediately exercisable after stockholder approval of the transactions contemplated by the March Purchase Agreements and will terminate when exercised in full.

The Company is obligated to use its reasonable best efforts to obtain such stockholder approval of the exercise of the officers' and/or directors' December Pre-Funded Warrants and March Pre-Funded Warrants at the 2025 annual meeting of stockholders.

The Company entered into Support Agreements (as amended, the "Support Agreements") with the Registered Direct Investors and the December Purchasers.

In addition, the Company entered into a First Amendment to Support Agreement (the "First Amendment to Support Agreement") with each of the March Purchasers, December Purchasers, and certain of the Registered Direct Investors.

Pursuant to the Support Agreements, the Registered Direct Investors, the December Purchasers, and the March Purchasers agreed to vote their shares of the Company's common stock beneficially owned by them in favor of certain actions subject to Stockholder Approval (as defined in the Support Agreements) at any meeting of stockholders of the Company.

As of March 31, 2025 , 620,824 of the March Pre-Funded Warrants had been exercised.

In addition, as of December 31, 2024 , all of the May Pre-Funded Warrants and 647,892 of the December Pre-Funded Warrants had been exercised.

The issuance of the shares upon exercise of the pre-funded warrants was made in reliance upon the exemption from registration under Section 4 (a)( 2 ) of the Securities Act of 1933, as amended.

The issuance of the March Pre-Funded Warrants was reflected in the Company's stockholder's equity within common stock and additional paid-in-capital as of March 31, 2025 .

The Company's largest stockholder and an institutional investor exercised their March 2025 PFWs on March 20, 2025.

The March 2025 PFWs purchased by the three officers and/or directors of the Company were subject to stockholder approval, which was obtained on June 18, 2025, and terminated when exercised in full.

The officers and/or directors exercised their March 2025 PFWs on June 24, 2025.

On May 15, 2025, the Company entered into securities purchase agreements (the "May 2025 Purchase Agreements") with certain accredited or sophisticated investors (the "May 2025 Purchasers"), all of whom were related parties, pursuant to which the Company sold to the May 2025 Purchasers (i) unregistered pre-funded warrants (the "May 2025 PFWs") to purchase up to 1,829,956 shares of the Company’s common stock, and (ii) unregistered warrants (the "May 2025 Common Stock Warrants") to purchase up to 1,829,956 shares of the Company’s common stock.

The May 2025 PFWs had a purchase price of $ 2.1995 , have an exercise price of $ 0.0005 per share of common stock, will be immediately exercisable after stockholder approval and will terminate when exercised in full.

The May 2025 Common Stock Warrants have an exercise price of $ 2.20 and will expire three years from the issuance date.

The May 2025 Purchasers consisted of four officers and/or directors, the Company’s largest stockholder, and institutional investors or others for whom they have or share beneficial ownership.

No underwriting discounts or commissions were paid with respect to the May 2025 offering.

The aggregate gross proceeds totaled $ 4,025 , before deducting offering expenses payable by the Company of $ 54 .

The allocation of the fair values was $ 2,671 for the May 2025 PFW and $ 1,354 for the May 2025 Common Stock Warrants.

The Company's largest stockholder exercised its May 2025 PFWs on May 19, 2025.

The May 2025 PFWs purchased by the four officers and/or directors of the Company will be immediately exercisable after stockholder approval of the transactions contemplated by the May 2025 Purchase Agreements and will terminate when exercised in full.

The Company is obligated to use its reasonable best efforts to obtain such stockholder approval of the exercise of the officers and/or directors May 2025 PFWs, no later than the 2026 annual meeting of stockholders.

In connection with the offering, on May 15, 2025, the Company entered into support agreements (the “Support Agreements”) with the May 2025 Purchasers, pursuant to which the purchasers agreed to vote their beneficially owned shares of the Company’s common stock in favor of certain actions requiring Stockholder Approval (as defined in the Support Agreements) and against any proposal or any other corporate action or agreement that would result in a breach by the Company of the May 2025 Purchase Agreements or impede, delay, or otherwise adversely affect the consummation of the transactions contemplated by the May 2025 Purchase Agreements or any similar agreements entered into by the Company and the party stockholders in connection with the consummation of the transactions contemplated by the May 2025 Purchase Agreements.

As of June 30, 2025 , an aggregate of 3,928,073 of the December 2024 PFWs, March 2025 PFWs, and May 2025 PFWs had been exercised.

As of December 31, 2024 , all of the May 2024 PFWs and 647,892 of the December 2024 PFWs had been exercised.

The issuance of the March 2025 PFWs and May 2025 PFWs was reflected in the Company's stockholder's equity within common stock and additional paid-in-capital as of June 30, 2025 .

In accordance with ASC 815 - 40, Derivatives and Hedging, a contract is classified as an equity agreement if it is both indexed to its own stock and classified in stockholder's equity in its financial position.

The May Pre-Funded Warrants, December Pre-Funded Warrants, and March Pre-Funded Warrants met the requirements of being classified as equity because (i) they had a fixed share limit and the Company had sufficient authorized and unissued shares, (ii) they required physical or net share settlement, and (iii) no cash payments or settlement top-off was required by the Company.

The May 2024 PFWs, December 2024 PFWs, and March 2025 PFWs met the requirements of being classified as equity because (i) they had a fixed share limit and the Company had sufficient authorized and unissued shares, (ii) they required physical or net share settlement, and (iii) no cash payments or settlement top-off was required by the Company.

Common stock warrants

As of June 30, 2025 and December 31, 2024 , the Company had 1,829,956 and 0 common stock warrants outstanding, respectively.

The Company determined that the detachable common stock warrants issued in connection with the May 2025 Purchase Agreements met the definition of freestanding financial instruments and qualified for classification as permanent equity under applicable accounting guidance.

As the common stock warrants were issued in conjunction with the pre-funded warrants, the proceeds have been allocated to each using the relative fair value method, and recorded as a component of additional paid-in-capital as of the issuance date.

Each warrant has an exercise price of $ 2.20 and will expire three years from the issuance date.

These warrants are included in the diluted earnings per share calculation when they are in-the-money and dilutive, as their features are considered participatory in nature.

See Note 2 , Income (loss) per share for further detail.

Treasury stock

As of March 31, 2025 and December 31, 2024 , the Company held shares of treasury stock of 768,595 and 768,595 , respectively, with a cost of $ 11,407 and $ 11,407 , respectively.

As of June 30, 2025 and December 31, 2024 , the Company held shares of treasury stock of 768,595 and 768,595 , respectively, with a cost of $ 11,407 and $ 11,407 , respectively.

The Company's share-based incentive plans allow employees the option to either make a cash payment or forfeit shares of common stock upon vesting to satisfy federal and state statutory tax withholding obligations associated with equity awards.

The forfeited shares of common stock may be taken into treasury stock by the Company or sold on the open market.

For the three months ended March 31, 2025 , no shares of common stock were withheld to cover statutory taxes owed by certain employees for this purpose.

For the six months ended June 30, 2025 , no shares of common stock were withheld to cover statutory taxes owed by certain employees for this purpose.

See Note 8 , Share-based compensation .

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2022 Omnibus Equity Incentive Plan (the "2022 Plan") that authorized for issuance 2,570,421 shares of the Company's common stock.

As of March 31, 2025 , the Company had 734,379 shares of common stock available for grants pursuant to the 2022 Plan, which includes 328,517 shares of common stock previously available for issuance under the 2018 Stock Incentive Plan.

The 2022 Plan was amended on June 18, 2025 at the Company’s annual meeting of stockholders which approved an increase of the number of shares of common stock authorized for issuance under the 2022 Plan by 2,000,000 shares.

As of June 30, 2025 , the Company had 2,378,672 shares of common stock available for grants pursuant to the 2022 Plan, which includes 328,517 shares of common stock previously available for issuance under the 2018 Stock Incentive Plan.

The primary purpose of the 2022 Plan and prior plans is to attract, retain, reward, and motivate certain individuals by providing them with opportunities to acquire or increase their ownership interests in the Company.

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The Compensation Committee of the Company's Board of Directors approved the grant of stock options to certain Company officers, which were issued on February 1, 2019, December 20, 2019, March 1, 2020, and March 1, 2021.

Subject to continuing service, 50 % of the shares subject to these stock options will vest if the Company's stock price remains above 125 %, 133.33 %, 133.3 % and 133.33 %, respectively, of the exercise prices for twenty consecutive trading days, and the remaining 50 % of the shares subject to these stock options will vest if the Company's stock price remains above 156.25 %, 177.78 %, 177.78 % and 177.78 %, respectively, of the exercise prices for twenty consecutive trading days;

Subject to continuing service, 50 % of the stock options will vest if the Company's stock price remains above 125 %, 133.33 %, 133.3 % and 133.33 %, respectively, of the exercise prices for twenty consecutive trading days, and the remaining 50 % of the stock options will vest if the Company's stock price remains above 156.25 %, 177.78 %, 177.78 % and 177.78 %, respectively, of the exercise prices for twenty consecutive trading days;

provided, that no shares will vest prior to the first anniversary of the grant date.

As of March 31, 2025 , the first condition for the stock options issued on February 1, 2019, December 20, 2019 and March 1, 2020 had been met and the second condition for the stock options issued on December 20, 2019 and March 1, 2020 had been met.

Any shares that remain unvested as of the fifth anniversary of the grant date will vest in full on such date.

As of June 30, 2025 , the first condition for the stock options issued on February 1, 2019, December 20, 2019 and March 1, 2020 had been met and the second condition for the stock options issued on December 20, 2019 and March 1, 2020 had been met.

Any stock options that remain unvested as of the fifth anniversary of the grant date will vest in full on such date.

The fair value of the stock options granted was estimated at the trading day before the date of grant using a Monte Carlo simulation model.

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On September 9, 2024, the Compensation Committee of the Company's Board of Directors approved the grant of stock options to the Company's Chief Financial Officer in connection with his employment agreement.

Subject to continuing service, 50% of the shares subject to these stock options will vest when the average closing price of the Company's common stock is equal to three times the exercise price of the option for ten consecutive trading days, and the remaining 50% of the shares subject to these stock options will vest when the average closing price of the Company's common stock is equal to five times the exercise price of the option for ten consecutive trading days.

Subject to his continuing service, 50% of the stock options will vest if the average closing price of the Company's common stock is equal to three times the exercise price for ten consecutive trading days, and the remaining 50% of the shares subject to these stock options will vest if the average closing price of the Company's common stock is equal to five times the exercise price for ten consecutive trading days.

Notwithstanding the foregoing, the options will immediately vest upon the occurrence of certain conditions such as a change in control.

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(Amounts in thousands, except share and per share data)

For the three months ended March 31, 2025 , details of stock option activity were as follows:

For the six months ended June 30, 2025 , details of stock option activity were as follows:

Number of options

5 unchanged sentences

( 66,000 ) — — —

Outstanding as of March 31, 2025

Outstanding as of June 30, 2025

331,667 $ 16.35 6.1

Options exercisable as of March 31, 2025

Options exercisable as of June 30, 2025

183,001 $ 25.03 3.8

The aggregate intrinsic value amounts in the table above represent the difference between the closing price of the Company's common stock at the end of the reporting period and the corresponding exercise prices, multiplied by the number of in-the-money stock options as of the same date.

For the three months ended March 31, 2025 , the unvested balance of stock options was as follows:

For the six months ended June 30, 2025 , the unvested balance of stock options was as follows:

Number of stock options

3 unchanged sentences

148,666 $ 5.66 9.4

Unvested as of March 31, 2025

Unvested as of June 30, 2025

148,666 $ 5.66 9.4

Compensation expense recognized for stock options was $ 19 and $ 0 for the three months ended March 31, 2025 and 2024 , respectively, was recognized in product development and general and administrative expenses in the consolidated statements of operations.

As of March 31, 2025 , there was $ 222 of unrecognized share-based compensation with respect to outstanding stock options.

Compensation expense recognized for stock options was $ 18 and $ 1 for the three months ended June 30, 2025 and 2024 , respectively, and $ 37 and $ 1 for the six months ended June 30, 2025 and 2024 ,respectively, was recognized in product development and general and administrative expenses in the consolidated statements of operations.

As of June 30, 2025 , there was $ 203 of unrecognized share-based compensation with respect to outstanding stock options.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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Restricted stock units and restricted stock

For the three months ended March 31, 2025 , details of unvested RSU activity were as follows:

For the six months ended June 30, 2025 , details of unvested RSU activity were as follows:

Number of units

3 unchanged sentences

Vested and delivered

( 317,830 ) —

Withheld as treasury stock (1)

1 unchanged sentence

( 66,005 ) 4.25

( 34,411 ) 4.25

Unvested as of March 31, 2025

Unvested as of June 30, 2025

836,393 24.68

As discussed in Note 7 , Equity , the treasury stock was related to shares withheld to cover statutory withholding taxes upon the delivery of shares following the vesting of RSUs.

As of March 31, 2025 , there were 768,595 outstanding shares of treasury stock.

As discussed in Note 7 , Equity , the treasury stock relates to shares withheld to cover statutory withholding taxes upon the delivery of shares following the vesting of RSUs.

As of June 30, 2025 , there were 768,595 outstanding shares of treasury stock.

Vested not delivered represents vested RSUs with delivery deferred to a future time.

For the three months ended March 31, 2025 , there was a change in the vested not delivered balance due to a net 160,673 shares that were deferred due to timing of delivery of certain shares, of which no shares had elected deferred delivery.

As of March 31, 2025 , 446,772 outstanding RSUs were vested not delivered.

Compensation expense recognized for RSUs of $ 330 and $ 618 for the three months ended March 31, 2025 and 2024 , respectively, was recorded in sales and marketing, product development and general and administrative in the consolidated statements of operations, and intangible assets, net in the consolidated balance sheets.

For the six months ended June 30, 2025 , there was a change in the vested not delivered balance due to a net 398 shares that were deferred due to timing of delivery of certain shares, of which no shares had elected deferred delivery.

As of June 30, 2025 , 286,497 outstanding RSUs were vested not delivered.

Compensation expense recognized for RSUs of $ 321 and $ 433 for the three months ended June 30, 2025 and 2024 , respectively, and $ 651 and $ 1,051 for the six months ended June 30, 2025 and 2024 , respectively, was recorded in sales and marketing, product development and general and administrative in the consolidated statements of operations, and intangible assets, net in the consolidated balance sheets.

The fair value of the RSUs and restricted stock was estimated using the closing prices of the Company's common stock on the dates of grant.

As of March 31, 2025 , unrecognized share-based compensation expense associated with the granted RSUs and stock options amounted to $ 1,778 , which is expected to be recognized over a weighted average period of 1.9 years.

For the three months ended March 31, 2025 and 2024 , share-based compensation for the Company's stock options, RSUs, and common stock awards were allocated to the following accounts in the consolidated financial statements:

Three Months Ended March 31,

As of June 30, 2025 , unrecognized share-based compensation expense associated with the granted RSUs and stock options amounted to $ 2,186 , which is expected to be recognized over a weighted average period of 2 years.

For the three and six months ended June 30, 2025 and 2024 , share-based compensation for the Company's stock options, RSUs, and common stock awards were allocated to the following accounts in the consolidated financial statements:

Three Months Ended June 30,

Six Months Ended June 30,

Sales and marketing

$ 28 $ 57 $ 52 $ 141

Product development

General and administrative

267 311 537 782

Share-based compensation expense

331 423 671 1,023

Capitalized in intangible assets

Total share-based compensation

As of March 31, 2025 and December 31, 2024 , the Company recorded a liability of $ 25 and $ 29 , respectively, related to PSUs that are to be settled in cash.

$ 339 $ 434 $ 688 $ 1,052

As of June 30, 2025 and December 31, 2024 , the Company recorded a liability of $ 25 and $ 29 , respectively, related to PSUs that are to be settled in cash.

Segment information

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(Amounts in thousands, except share and per share data)

As of March 31, 2025 , the Company had three operating segments:

a) "Fluent", which is Owned and Operated and Commerce Media Solutions revenue, b) "Call Solutions", and c) "AdParlor".

The Company determined that there was one reportable segment, "Fluent," for the purposes of segment reporting.

As of June 30, 2025 , the Company had three operating segments:

a) "Fluent", which is Owned and Operated and Commerce Media Solutions revenue, b) "Call Solutions", and c) "AdParlor." The Company determined that there was one reportable segment, "Fluent," for the purposes of segment reporting.

The Fluent reporting segment combines Fluent with the Call Solutions operating segment.

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The "All Other" segment represents the operating results of AdParlor, LLC, which mainly performs media buying, and those businesses sold or in run-off, which are included for purposes of reconciliation of the respective balances below to the consolidated financial statements.

The Company determined its segments based on how revenue is earned as well as the agreements entered into with its advertisers.

In addition, certain advertisers overlap within the different operating segments.

Further, they are managed consistently with shared management.

The Company determined its segments based on revenue sources and its agreements with advertisers.

Some advertisers span multiple segments, which are managed consistently with shared management.

As of December 31, 2024, the Company adopted ASU 2023 - 07.

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The allocation methodology is regularly assessed, evaluated and subject to future changes.

Summarized financial information concerning the Company's segments for the three months ended March 31, 2025 and 2024 are shown in the following tables below, noting prior period amounts have been recast to conform to the Company's current period segment presentation:

Three Months Ended March 31,

Summarized financial information concerning the Company's segments for the three and six months ended June 30, 2025 and 2024 are shown in the following tables below, noting prior period amounts have been recast to conform to the Company's current period segment presentation:

Three Months Ended June 30,

Revenue (1) :

United States

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2,424 55 2,479 2,299 268 2,567

Loss from operations

Total (loss) income from operations

$ ( 7,358 ) $ 252 $ ( 7,106 ) $ ( 5,079 ) $ ( 5,299 ) $ ( 10,378 )

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( 2 ) Balance includes sales and marketing expense, travel and entertainment expense, office overhead, restructuring and severance, goodwill impairment and impairment of intangible assets, and other operating costs.

Six Months Ended June 30,

Revenue (1) :

United States

$ 63,802 $ 2,983 $ 66,785 $ 69,320 $ 11,607 $ 80,927

International

33,131 — 33,131 43,773 — 43,773

Total segment revenue

$ 96,933 $ 2,983 $ 99,916 $ 113,093 $ 11,607 $ 124,700

Costs of revenue

Cost of revenue (exclusive of depreciation and amortization)

78,033 168 78,201 85,331 8,126 93,457

Costs and expenses:

Salaries and benefits

15,032 2,047 17,079 18,001 5,551 23,552

Professional fees

3,660 164 3,824 4,113 576 4,689

IT and software

2,257 145 2,402 1,932 470 2,402

Other segment items (2)

7,163 489 7,652 6,298 3,495 9,793

$ ( 9,212 ) $ ( 30 ) $ ( 9,242 ) $ ( 2,582 ) $ ( 6,611 ) $ ( 9,193 )

Depreciation and amortization

4,830 110 4,940 4,387 751 5,138

Total loss from operations

$ ( 14,042 ) $ ( 140 ) $ ( 14,182 ) $ ( 6,969 ) $ ( 7,362 ) $ ( 14,331 )

Reconciliation of profit or loss

Interest Expense

( 1,582 ) ( 2,430 )

Fair value adjustment of Convertible Notes with related parties

Loss on early extinguishment of debt

Loss before income taxes

$ ( 15,366 ) $ ( 17,770 )

( 1 ) Revenue aggregation is based upon location of the customer.

Total assets:

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$ 74,471 $ 93,617

As of March 31, 2025 , long-lived assets are all located in the United States.

For the three months ended March 31, 2025 , 17.8 % of the Company's consolidated revenue was earned from customers located in Israel.

As of June 30, 2025 , long-lived assets are all located in the United States.

For the six months ended June 30, 2025 , 18.6 % of the Company's consolidated revenue was earned from customers located in Israel.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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The deemed fair value of the consideration received was $ 989 , which consisted of (i) the forgiveness of a $ 500 deferred payment owed by the Company in connection with the True North Acquisition on January 1, 2022, ( ii) a share of the True North contribution margin after the closing until the Company has received an amount equal to the closing net working capital of approximately $ 168 , and (iii) a continued share of the True North contribution margin of an additional amount at fair value of $ 321 .

The True North founder who entered into an employment agreement in connection with the True North Acquisition has remained an employee of the Company after the closing of the True North Conveyance.

It was determined that True North did not meet the discontinued operations criterion under ASC 205 - 20, Discontinued Operations .

In accordance with ASC 810, Consolidation ("ASC 810" ), the Company had determined that True North was a VIE based upon the receivable for the consideration to be received.

Initially, the majority membership owner of Caspian remained a full-time employee of the Company and had the power to unilaterally make significant decisions at True North, and it was determined that the Company was the primary beneficiary of Caspian and therefore should consolidate Caspian's operations going forward, under the de facto agent guidance.

The True North founder entered into an employment agreement in connection with the True North Acquisition has remained an employee of the Company after the closing of the True North Conveyance.

The Company determined that True North did not meet the discontinued operations criterion under ASC 205 - 20, Discontinued Operations .

In accordance with ASC 810, Consolidation ("ASC 810" ), the Company determined that True North was a VIE based upon the consideration to be received.

Initially, the controlling member of Caspian remained a full-time employee of the Company and had the power to unilaterally make significant decisions at True North, so the Company determined that it was the primary beneficiary of Caspian and therefore should consolidate Caspian's operations going forward, under the de facto agent guidance.

As a result, no gain or loss was to be recognized on the True North Conveyance.

On September 1, 2024, as Caspian’s operating agreement was amended to require the consent of multiple members rather than a majority interest for major decisions, the Company determined that it was no longer the primary beneficiary, and under ASC 810, True North was no longer consolidated as of September 1, 2024.

On September 1, 2024, however, Caspian’s operating agreement was amended to require the consent of multiple members rather than a majority interest for major decisions.

As a result, the Company determined that it was no longer the primary beneficiary, and under ASC 810, True North was no longer consolidated as of September 1, 2024.

No gain or loss was recognized as a result of the change at that time.

As of December 31, 2024 , True North had ceased operations and the remaining receivable was fully written off.

The Company determined that TAPP qualified as a VIE, as of January 9, 2023, in which the Company has a variable interest and that the Company is the primary beneficiary.

This was the result of the Company determining it has significant influence over TAPP's key employees due to the employment agreements of key employees, as well as being responsible for a majority of TAPP's revenues as a customer.

As of January 9, 2023, the Company initially determined that TAPP qualifies as a VIE because it held a variable interest and was the primary beneficiary.

This conclusion was based on the Company’s significant influence over TAPP’s key employees through their employment agreements and its role as the primary source of TAPP’s revenue.

During the first quarter of 2025, TAPP’s key employee became a consultant to the Company.

However, the Company concluded that it still had significant influence over TAPP, so the Company continues to consolidate TAPP's operations.

As the Company does not have an equity interest in TAPP, 100% of the net assets and results of the operations of TAPP are attributable to non-controlling interests.

However, the Company concluded that it still had significant influence over TAPP, so the Company continued to consolidate TAPP's operations.

As the Company did not have an equity interest in TAPP, 100% of the net assets and results of the operations of TAPP were attributable to non-controlling interests.

On May 20, 2025, the Company entered into an updated agreement with the key employee and TAPP, terminating all prior agreements.

As a result, the Company determined that it was no longer the primary beneficiary, and under ASC 810 , TAPP was no longer being consolidated under ASC 810.

The Company recognized a loss of $ 698 in general and administrative expenses in the consolidated statements of operations, mainly related to the write-off of the intangible assets, as discussed in Note 3 , Intangible assets.

Subsequent events

Amendment to the Sublease

On April 15, 2025 , the Company received the landlord’s consent for the second amendment to its sublease (the "Sublease Amendment") with sublandlord Virtu KCG Holdings LLC, which reduced the subleased premises by 42 % and monthly payments by approximately 54 %, effective March 19, 2025.

The consent also approved the extension of the sublease term by four years, effective April 15, 2025.

Amendment to the SLR Credit Agreement

In addition, the Fifth Amendment waived non-compliance with the financial covenants as of June 30, 2025 and modified the financial covenants for the periods through August 31, 2026.

Private placement

On May 15, 2025 , the Company entered into securities purchase agreements (the " May 2025 Purchase Agreements") with certain accredited or sophisticated investors (the " May 2025 Purchasers"), all of whom were related parties, pursuant to which the Company agreed to sell to the May 2025 Purchasers (i) unregistered pre-funded warrants (the " May 2025 Pre-Funded Warrants") to purchase up to 1,829,956 shares of the Company’s common stock, and (ii) unregistered warrants (the "May Common Stock Warrants") to purchase up to 1,829,956 shares of the Company’s common stock.

The May 2025 Pre-Funded Warrants had a purchase price of $ 2.1995 and will have an exercise price of $ 0.0005 per share of common stock, will be immediately exercisable after stockholder approval and will terminate when exercised in full.

The May Common Stock Warrants have an exercise price of $ 2.20 and will expire three years from the issuance date.

The May 2025 Purchasers consisted of four officers' and/or directors, the Company’s largest stockholder, and institutional investors or others for whom they have or share beneficial ownership.

No underwriting discounts or commissions were paid with respect to the May 2025 offering.

The gross proceeds from the offering is expected to be $ 4,025 , before deducting expenses payable by the Company.

The exercise of certain of the May 2025 Pre-Funded Warrants is subject to stockholder approval, which the Company shall seek approval no later than the 2026 annual meeting of stockholders.

The Company is obligated to use its reasonable best efforts to obtain such stockholder approval of the exercise of the officers' and/or directors May 2025 Pre-Funded Warrants.

If, despite the Company’s reasonable best efforts the Stockholder Approval is not obtained on or prior to the Stockholder Meeting Deadline, the Company is required to cause an additional stockholder meeting to be held.

In connection with the offering, the Company entered into Support Agreements with the May 2025 Purchasers, agreed to vote shares of the Company's common stock beneficially owned by them in favor of certain actions subject to Stockholder Approval (as defined in the May 2025 Purchase Agreements) at any meeting of stockholders of the Company and to vote against or decline to consent to any proposal or any other corporate action or agreement that would result in a breach by the Company of the May 2025 Purchase Agreements or impede, delay or otherwise adversely affect the consummation of the transactions contemplated by the May 2025 Purchase Agreements or any similar agreements entered into by the Company and the party stockholders in connection with the consummation of the transactions contemplated by the Purchase Agreements.

The closing of the sales of the Warrants under the Purchase Agreements is expected to occur on May 19, 2025, subject to the satisfaction of customary closing conditions.

On August 19, 2025, the Company entered into securities purchase agreements (the "August 2025 Purchase Agreements") with certain officers and/or directors of the Company (collectively, the “August 2025 Inside Investors”), and the largest stockholder of the Company and other accredited investors (collectively, together with the August 2025 Inside Investors, the “August 2025 Purchasers”), pursuant to which the Company agreed to sell to the August 2025 Purchasers (i) 3,542,856unregistered shares (the “August 2025 Shares”) of common stock, (i) unregistered pre-funded warrants (the “August 2025 Pre-Funded Warrants") to purchase up to 2,382,571 shares of the Company’s common stock, and (ii) unregistered warrants (the "August 2025 Common Stock Warrants") to purchase up to 5,871,427 shares of the Company’s common stock at a purchase price of (i) $ 1.75 per August 2025 Share and accompanying August 2025 Common Stock Warrant or (ii) $1.7495 per August 2025 Pre-Funded Warrant and accompanying August 2025 Common Stock Warrant (the “August 2025 Offering”).

Each August 2025 Common Stock Warrant is exercisable for a period of five and one -half years from the date of issuance and may be exercised six months and one day from the date of issuance at an exercise price of $ 2.21 per share, subject to adjustment.

Each August 2025 Pre-Funded Warrant has an exercise price of $ 0.0005 per share of common stock and will terminate when exercised in full.

Notwithstanding the foregoing, any August 2025 Pre-Funded Warrant issued to August 2025 Inside Investors will be immediately exercisable after stockholder approval and will terminate when exercised in full.

The August 2025 Inside Investors consisted of three officers and/or directors, and the Company’s largest stockholder, or others for whom they have or share beneficial ownership.

Pursuant to the terms of an engagement letter (the “Engagement Letter”) dated as of July 21, 2025 between the Company and The Benchmark Company, LLC, a StoneX Company (“Benchmark”), the Company (i) will pay Benchmark a total cash fee equal to 7.0 % of the aggregate gross proceeds of the August 2025 Offering;

provided, however, that the fee shall be equal to 3.0 % for certain pre-existing investors of the Company, and (ii) will reimburse Benchmark for certain expenses.

The gross proceeds from the offering is expected to be $ 10.3 , before deducting placement agent fees and other expenses payable by the Company.

The Company is obligated to use its reasonable best efforts to obtain such stockholder approval of the exercise of the August 2025 Pre-Funded Warrants by August 2025 Inside Investors no later than the 60th calendar day after the closing date of the August 2025 Offering (the “August Stockholder Meeting Deadline”).

If, despite the Company’s reasonable best efforts the stockholder approval is not obtained on or prior to the August Stockholder Meeting Deadline, the Company is required to cause additional stockholder meetings to be held.

In connection with the August 2025 Offering, the Company entered into Support Agreements (the “August 2025 Support Agreements”) with the August 2025 Inside Investors, pursuant to which such purchasers agreed to vote shares of the Company's common stock beneficially owned by them in favor of certain actions subject to Stockholder Approval (as defined in the August Support Agreements Agreements) at any meeting of stockholders of the Company and to vote against or decline to consent to any proposal or any other corporate action or agreement that would result in a breach by the Company of the August 2025 Purchase Agreements or impede, delay or otherwise adversely affect the consummation of the transactions contemplated by the August 2025 Purchase Agreements or any similar agreements entered into by the Company and the party stockholders in connection with the consummation of the transactions contemplated by the August 2025 Purchase Agreements.

Furthermore, in connection with the August 2025 Offering, on August 19, 2025, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with the August 2025 Purchasers pursuant to which the Company is required to file a registration statement covering the resale of the Registrable Securities (as defined in the Registration Rights Agreement).

The closing of the sales of the securities under the August 2025 Purchase Agreements is expected to occur on August 19, 2025.

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 1. Financial Statements