What changed in this filing

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Item 1. Financial Statements

2025-11-14 compared with 2025-08-19 · 197 added, 170 removed, 735 unchanged (33% of the section changed)

2 unchanged sentences

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

June 30, 2025

September 30, 2025

December 31, 2024

51 unchanged sentences

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

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Costs and expenses:

20 unchanged sentences

Total shareholders'

Balance at March 31, 2025

Balance at June 30, 2025

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

Share-based compensation

Issuance of pre-funded and common stock warrants

Issuance of common stock, pre-funded warrants and common stock warrants

Exercise of pre-funded warrants

Balance at June 30, 2025

Balance at September 30, 2025

Balance at December 31, 2024

1 unchanged sentence

Share-based compensation expense

Issuance of pre-funded and common stock warrants

Issuance of common stock, pre-funded warrants and common stock warrants

Exercise of pre-funded warrants

Balance at June 30, 2025

Balance at September 30, 2025

Treasury stock

1 unchanged sentence

Total shareholders'

Balance at March 31, 2024

Balance at June 30, 2024

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

1 unchanged sentence

Issuance of pre-funded warrants

Balance at June 30, 2024

Exercise of pre-funded warrants

Balance at September 30, 2024

Balance at December 31, 2023

2 unchanged sentences

Issuance of pre-funded warrants

Balance at June 30, 2024

Exercise of pre-funded warrants

Balance at September 30, 2024

See notes to consolidated financial statements

1 unchanged sentence

(Amounts in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

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

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

16 unchanged sentences

Deferred revenue

Net cash provided by (used in) operating activities

Net cash used in operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

6 unchanged sentences

Debt financing costs

Proceeds from issuance of pre-funded and common stock warrants

Net cash (used in) provided by financing activities

Proceeds from issuance of common stock and warrants

Equity financing costs

Proceeds from exercise of warrants

Proceeds from Convertible Notes, with related parties

Net cash provided by financing activities

Net decrease in cash, cash equivalents, and restricted cash

16 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 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 .

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 September 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").

3 unchanged sentences

The consolidated balance sheet as of December 31, 2024 included herein was derived from the audited financial statements as of that date and included in the 2024 Form 10 -K.

Reclassification

To conform with the current year presentation, certain prior year amounts related to equity financing costs have been reclassified and separately presented from proceeds from issuance of common stock and warrants on the consolidated statements of cash flow.

Going concern

2 unchanged sentences

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).

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.

2 unchanged sentences

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 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.

As of September 30, 2025, the Company was in compliance with its financial covenants under the SLR Credit Agreement (as defined below in Note 4 , Long-term debt, net ).

Although the financial covenants under the SLR Credit Agreement were reset in the third quarter of 2025 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.

30 unchanged sentences

The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

In November 2024, the FASB issued ASU No.

2024 - 04, Debt with Conversion and Other Options (Subtopic 470 - 20 ):

Induced Conversions of Convertible Debt Instruments which is intended to clarify requirements for determining whether certain settlements of convertible debt instruments, including convertible debt instruments with cash conversion features or convertible debt instruments that are not currently convertible, should be accounted for as an induced conversion.

The new guidance is effective for fiscal years beginning after December 15, 2025, and interim periods within those fiscal periods, and early adoption is permitted.

The guidance will be applied on a prospective basis to financial statements issued for reporting periods after the effective date, or retrospectively to any and all prior periods presented in the financial statements.

The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

In July 2025, the FASB issued ASU No.

2025 - 05, Financial Instruments-Credit Losses (Topic 236 ):

Measurement of Credit Losses for Accounts Receivable and Contract Assets , which addresses challenges encountered when applying Topic 236 guidance to current accounts receivable and current contract assets arising from transactions accounted for under Topic 606.

The amendments in this update will be effective for fiscal years beginning after December 15, 2025 and interim periods within those fiscal periods, and early adoption is permitted.

The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

In September 2025, the FASB issued ASU No.

2025 - 06, Intangibles – Goodwill and Other – Internal-Use Software , which amends certain aspects of the accounting for and disclosure of software costs under ASC No.

2025 - 06 clarified and modernizes the accounting for costs related to internal-use software.

The amendments in ASU No.

2025 - 06 remove all references to project stages throughout Subtopic No.

350 - 40 and clarify the threshold entities apply to begin capitalizing costs.

The guidance will be effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal periods.

Companies have the option to apply the guidance on a retrospective or prospective basis, and early adoption is permitted.

The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10 unchanged sentences

The Company's revenue arrangements do not contain significant financing components.

The Company has further concluded that revenue does not require disaggregation.

For each identified performance obligation in a contract with a customer, the Company assesses whether it or the third -party supplier is the principal or agent.

4 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.

June 30, 2025 ,

September 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 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.

As of September 30, 2025 , December 31, 2024 , and December 31, 2023, unbilled revenue included in the Company's accounts receivable was $ 11,762 , $ 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.

15 unchanged sentences

Adjustments to the LTV may result in an increase or decrease in revenue and the corresponding asset in the period the change is made.

As of September 30, 2025, the Company had receivables of $ 925 related to commission revenue.

Revenue Disaggregation

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,

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

Three Months Ended September 30,

(In thousands)

10 unchanged sentences

$ 44,835 $ 2,194 $ 47,029 $ 61,477 $ 3,039 $ 64,516

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,

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

Nine Months Ended September 30,

(In thousands)

10 unchanged sentences

$ 141,768 $ 5,177 $ 146,945 $ 174,570 $ 14,646 $ 189,216

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.

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

The Owned and Operated 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.

4 unchanged sentences

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 , 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.

June 30, 2025 and

September 30, 2025 and

December 31, 2024 , there was

8 unchanged sentences

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

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,

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

Three Months Ended September 30,

Nine Months Ended September 30,

$ ( 7,556 ) $ ( 7,944 ) $ ( 23,048 ) $ ( 25,847 )

11 unchanged sentences

$ ( 0.27 ) $ ( 0.48 ) $ ( 0.94 ) $ ( 1.75 )

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,

Based on exercise prices compared to the average stock prices for the three and nine months ended September 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 September 30,

Nine Months Ended September 30,

Restricted stock units

10 unchanged sentences

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

Amortization period (in years) June 30, 2025

Amortization period (in years) September 30, 2025

December 31, 2024

40 unchanged sentences

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

On May 20, 2025, the Company entered into an updated agreement with the key employee of 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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

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

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

Amortization expenses of $ 2,408 and $ 2,299 for the three months ended September 30, 2025 and 2024 , respectively, and $ 7,206 and $ 7,277 for the nine months ended September 30, 2025 and 2024 , respectively, are included in depreciation and amortization expenses in the consolidated statements of operations.

As of September 30, 2025 , intangible assets with a carrying amount of $ 673 , 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 nine months ended September 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 September 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:

September 30, 2025

Remainder of 2025

1 unchanged sentence

Long-term debt, net

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:

June 30, 2025

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

September 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 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.

As of September 30, 2025 , the SLR Credit Facility had an outstanding principal balance of $ 22,576 (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 10.34 % (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.

The opening interest rate of the SLR Credit Facility was 10.81 % (SOFR + CSA + 5.25 %), which changed to 10.18 % (SOFR + CSA + 5.75 %) as of September 30, 2025 .

The SLR Credit Agreement contains restrictive covenants that impose limitations on the way the Credit Parties conduct 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.

The SLR Credit Agreement is guaranteed by the Company and certain of its direct and indirect subsidiaries and is secured by substantially all of the Company's assets and those of its direct and indirect subsidiaries, including the Borrower.

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.

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 .

When the borrowing base does not support amounts exceeding our $ 20,000 SLR Term Loan, the Borrower is 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 $ 703 and $ 1,038 , respectively, as of September 30, 2025 .

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

The Company amortizes these costs over the life of the related debt.

On May 15, 2024, the Credit Parties and SLR entered into the First Amendment to the SLR Credit Agreement (the "First Amendment"), pursuant to which SLR, among other things, ( 1 ) waived any required prepayments on the SLR Revolver from the proceeds from the Company's May Private Placement (as defined herein) (see Note 7 , Equity ), ( 2 ) required that the Credit Parties (as defined in the SLR Credit Agreement) retain a financial advisor to assist in preparing the Company's projections, ( 3 ) increased the minimum excess availability covenant following the May Private Placement, ( 4 ) amended the definition of borrowing base (as defined in the SLR Credit Agreement), and ( 5 ) amended certain post-closing obligations.

On August 19, 2024, the Credit Parties and SLR entered into the Second Amendment, which, among other things, required that the Company raise $ 2,000 in additional capital.

On May 15, 2024, the Credit Parties and SLR entered into the First Amendment to the SLR Credit Agreement (the "First Amendment"), pursuant to which SLR, among other things, ( 1 ) waived any required prepayments on the SLR Revolver from the proceeds from the Company's private placement offering completed in May 2024 ( the "May 2024 Private Placement") (see Note 7 , Equity ), ( 2 ) required that the Credit Parties (as defined in the SLR Credit Agreement) retain a financial advisor to assist in preparing the Company's projections, ( 3 ) increased the minimum excess availability covenant following the May 2024 Private Placement, ( 4 ) amended the definition of borrowing base (as defined in the SLR Credit Agreement), and ( 5 ) amended certain post-closing obligations.

On August 19, 2024, the Credit Parties and SLR entered into the Second Amendment to the SLR Credit Agreement (the "Second Amendment"), which, among other things, required that the Company raise $ 2,000 in additional capital.

To raise the capital, the Company entered into convertible subordinated notes, as described below, raising an aggregate of $ 2,050 .

5 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 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.

As of September 30, 2025, the Company was in compliance with its financial covenants under the SLR Credit Agreement.

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 under the SLR Credit Agreement and any outstanding balance on the SLR Revolver.

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

As a result of the foregoing, all borrowings under the Credit Agreement have been classified as current as of September 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 15.32 % (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.

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

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

This security interest is subordinate to the security interest under the SLR Credit Agreement.

2 unchanged sentences

Convertible Notes with related parties

On August 19, 2024, the Company entered into a securities purchase agreement (the "Notes Purchase Agreement") with certain of the Company's officers and directors and the largest stockholder (the "Note Purchasers") to sell convertible subordinated promissory notes (the "Convertible Notes") in aggregate principal amount of $ 2,050 .

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.

On August 19, 2024, the Company entered into a securities purchase agreement (the "Notes Purchase Agreement") with certain of the Company's officers and directors and the largest stockholder to sell convertible subordinated promissory notes (the "Convertible Notes") in aggregate principal amount of $ 2,050 .

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

Subject to certain payment conditions in the Subordination Agreements (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.

16 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 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

As of September 30, 2025 , the principal balance of the Convertible Notes was $ 2,364 , with a fair value of $ 3,876 .

The Company recognized an additional increase in fair value of $ 554 and $ 156 for the three and nine months ended September 30, 2025 , respectively, which was recognized in other income (expense) from operations.

For the nine months ended September 30, 2025 , accrued interest was paid in kind.

As of September 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 , Summary of significant accounting policies :

September 30, 2025

Remainder of 2025

8 unchanged sentences

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

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

As of September 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 September 30, 2025 and December 31, 2024 :

September 30, 2025

December 31, 2024

11 unchanged sentences

Balance recorded in accrued expenses and other current liabilities with changes to the balance as a result of adjustment of the fair value related to the initial discount rate and payments made.

See Note 11 , Variable Interest Entity , for initial assumptions of the fair value.

Convertible Notes with related parties

1 unchanged sentence

See Note 4 , Long-term debt, net .

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

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

Fair value as of December 31, 2024

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

Fair value as of June 30, 2025

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

Fair value as of September 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

As the Convertible Notes mature on April 2, 2029, and bear interest at 13 % per annum paid in kind but may be converted into shares of the Company’s common stock (the "call option"), the estimated fair value is computed as the sum of (a) the present value of the expected interest and principal payments using the discounted cash flow method based on an estimated discount rate and (b) the fair value of the call option computer using the Black-Scholes model.

Both approaches are based on the following assumptions:

June 30, 2025

September 30, 2025

Face value of principal payable

9 unchanged sentences

Payment of compensation expense

Fair value as of June 30, 2025

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

As of September 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.

3 unchanged sentences

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

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.

As of September 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 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.

For the nine months ended September 30, 2025 , the Company's effective income tax rate of negative 0.5 % 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 nine months ended September 30, 2024 , the Company's effective income tax rate of 0.4 % primarily represents state and local tax expense and losses for which no tax benefit was recognized.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3 unchanged sentences

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.

On July 4, 2025, the One Big Beautiful Bill Act was enacted, introducing amendments to United States (“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 a material impact on its financial statements in the current year.

Effective at 6:00 p.m.

2 unchanged sentences

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 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.

As of September 30, 2025 and December 31, 2024 , the number of issued shares of common stock was 30,287,597 and 20,791,431 , respectively, which included shares of treasury stock of 768,595 and 768,595 , respectively.

For the nine months ended September 30, 2025 , the increase in the number of issued shares of common stock was the result of the exercise of pre-funded warrants for 5,585,216 shares of common stock, the issuance of 3,542,856 shares of common stock as part of the August 2025 Purchase Agreements (as defined herein), and the issuance of 368,094 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

2,483,586 shares of common stock of the Company, par value

$ 0.0005 per share (the "Registered Direct Offering").

2,483,586 shares of common stock of the Company,

$ 0.0005 par value per share (the "Registered Direct Offering").

The Registered Direct Offering was made pursuant to the Company's shelf registration statement on Form S-

3, which was declared effective by the SEC

3, which was declared effective by the SEC on

September 9, 2024.

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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.

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

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

10 unchanged sentences

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 PFWs had a purchase price of $ 2.1995 , have an exercise price of $ 0.0005 per share of common stock, will become 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.

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

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

1 unchanged sentence

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 May 2025 PFWs purchased by the four officers and/or directors of the Company will become 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 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.

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 or others for whom they have or share beneficial ownership (the “August 2025 Inside Investors”), 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 sold to the August 2025 Purchasers (i) 3,542,856 unregistered shares (the “August 2025 Shares”) of common stock, (ii) unregistered pre-funded warrants (the “August 2025 PFWs") to purchase up to 2,328,571 shares of the Company’s common stock, and (iii) unregistered warrants (the "August 2025 Common Stock Warrants" and, together with the August 2025 PFWs, the "August 2025 Warrants") to purchase up to 5,871,427 shares of the Company’s common stock (the "August 2025 Private Placement").

Each August 2025 Share and accompanying August 2025 Common Stock Warrant were sold together at a purchase price of $ 1.75 per share and accompanying warrant, and each August 2025 PFW and accompanying August 2025 Common Stock Warrant were sold together at a purchase price of $ 1.7495 per pre-funded warrant and accompanying warrant, for aggregate gross proceeds of approximately $ 10,275 before deducting estimated offering expenses of approximately $ 742 payable by the Company.

The allocation of the fair values was $ 3,271 for the August 2025 Shares, $ 2,150 for the August 2025 PFWs and $ 4,854 for the August 2025 Common Stock Warrants.

The August 2025 PFWs have an exercise price of $ 0.0005 per share of common stock and were immediately exercisable upon issuance for all August 2025 Purchasers other than the August 2025 Inside Investors, for whom exercisability requires stockholder approval, and will terminate when exercised in full.

The August 2025 Common Stock Warrants are 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.

The Company is prohibited from effecting an exercise of the August 2025 Warrants to the extent that, as a result of such exercise, the holder together with the holder’s affiliates, would beneficially own more than 4.99 % (or, at the election of the holder, 9.99 %) of the number of shares of common stock outstanding immediately after giving effect to the issuance of shares of common stock upon exercise of the August 2025 Warrants, which beneficial ownership limitation may be increased by the holder up to, but not exceeding, 9.99 %.

Substantially all of the August 2025 Purchasers (other than the August 2025 Inside Investors) exercised their August 2025 PFWs during the month of September 2025, for an aggregate of 1,657,143 shares of common stock, leaving August 2025 PFWs to purchase 671,428 shares unexercised, 585,714 of which are represented by August 2025 Inside Investors and are not exercisable until stockholder approval is obtained.

The Company was obligated to use its reasonable best efforts to obtain such stockholder approval of the exercise of the August 2025 PFWs by August 2025 Inside Investors no later than the 60th calendar day after the closing date of the offering.

However, the Company entered into amendments to the August 2025 Purchase Agreements extending the obligation to obtain such stockholder approval until the 2026 annual meeting of stockholders.

In connection with the August 2025 Private Placement, on August 19, 2025, the Company entered into support agreements (the “August Support Agreements”) with the August 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 August Support Agreements) and against 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 Private Placement, 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 was required to file a registration statement covering the resale of the Registrable Securities (as defined in the Registration Rights Agreement).

The Company filed a registration statement on Form S- 3 with the SEC on September 15, 2025, and it was declared effective on September 24, 2025.

As of September 30, 2025 , an aggregate of 5,585,216 of the December 2024 PFWs, March 2025 PFWs, May 2025 PFWs, and August 2025 PFWs were exercised.

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

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

The May 2024 PFWs, December 2024 PFWs, March 2025 PFWs, and August 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.

As of September 30, 2025 and December 31, 2024 , the Company had 7,701,383 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 and August 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 other equity instruments, 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.

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.

1 unchanged sentence

Treasury stock

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.

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

For the nine months ended September 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 .

5 unchanged sentences

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.

As of September 30, 2025 , the Company had 2,325,918 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.

On September 22, 2025, the Company's Board of Directors approved the Fluent, Inc.

Equity Participation Plan (the “2025 Plan”).

The 2025 Plan provides for the grant of cash-settled awards that track the value of the Company’s common stock and are accounted for under the same share reserve authorized under the 2022 Plan.

No additional shares were authorized in connection with the adoption of the 2025 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.

1 unchanged sentence

Stock options

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.

The Compensation Committee of the Company's Board of Directors (the "Compensation Committee") 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 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 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.

As of September 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.

20 unchanged sentences

2.61 % 1.85 % 1.05 % 1.18 %

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.

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

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.

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

The fair value of the stock option granted was estimated on the date of the grant using a Monte Carlo simulation model.

The key assumptions utilized to calculate the grant-date fair value for the award is summarized below:

10 unchanged sentences

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

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

Number of options

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

Number of stock options

Weighted average exercise price per share

4 unchanged sentences

( 66,000 ) — — —

Outstanding as of June 30, 2025

Outstanding as of September 30, 2025

331,667 $ 16.35 6.1

Options exercisable as of June 30, 2025

Options exercisable as of September 30, 2025

189,001 $ 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 six months ended June 30, 2025 , the unvested balance of stock options was as follows:

For the nine months ended September 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 June 30, 2025

( 6,000 ) — —

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.

Unvested as of September 30, 2025

142,666 $ 4.30 8.8

Compensation expense recognized for stock options was $ 59 and $ 4 for the three months ended September 30, 2025 and 2024 , respectively, and $ 96 and $ 5 for the nine months ended September 30, 2025 and 2024 , respectively, was recognized in product development and general and administrative expenses in the consolidated statements of operations.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1 unchanged sentence

Restricted stock units and restricted stock

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

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

Number of units

7 unchanged sentences

( 21,897 ) 8.42

Unvested as of June 30, 2025

( 77,251 ) 3.63

Unvested as of September 30, 2025

817,384 $ 18.81

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.

As of September 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 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.

For the nine months ended September 30, 2025 , there was a change in the vested not delivered balance due to a net 21,897 shares that were deferred due to timing of delivery of certain shares, of which no shares had elected deferred delivery.

As of September 30, 2025 , 307,556 outstanding RSUs were vested not delivered.

Compensation expense recognized for RSUs of $ 427 and $ 466 for the three months ended September 30, 2025 and 2024 , respectively, and $ 1,078 and $ 1,517 for the nine months ended September 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 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,

As of September 30, 2025 , unrecognized share-based compensation expense associated with the granted RSUs and stock options amounted to $ 1,803 , which is expected to be recognized over a weighted average period of 1.8 years.

For the three and nine months ended September 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 September 30,

Nine Months Ended September 30,

Sales and marketing

1 unchanged sentence

Product development

80 74 162 174

General and administrative

5 unchanged sentences

$ 486 $ 470 $ 1,174 $ 1,522

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.

As of September 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

4 unchanged sentences

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

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.

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

a) "Fluent", representing 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 the Fluent operating segment with the Call Solutions operating segment.

This reporting unit works with advertisers to then bring consumers to their products through multiple media channels and earn revenue when a consumer completes an action as agreed upon with the advertisers.

7 unchanged sentences

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

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,

Summarized financial information concerning the Company's segments for the three and nine months ended September 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 September 30,

Revenue (1) :

26 unchanged sentences

Fair value adjustment of Convertible Notes with related parties

( 554 ) ( 2,810 )

Loss on early extinguishment of debt

3 unchanged sentences

( 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,

Nine Months Ended September 30,

Revenue (1) :

20 unchanged sentences

7,252 166 7,418 6,706 801 7,507

Total loss from operations

Total (loss) income from operations

$ ( 20,665 ) $ 180 $ ( 20,485 ) $ ( 10,571 ) $ ( 7,648 ) $ ( 18,219 )

3 unchanged sentences

Fair value adjustment of Convertible Notes with related parties

( 156 ) ( 2,810 )

Loss on early extinguishment of debt

3 unchanged sentences

September 30,

Total assets:

1 unchanged sentence

$ 76,060 $ 93,617

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.

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

For the nine months ended September 30, 2025 , 20.2 % of the Company's consolidated revenue was earned from customers located in Israel.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

20 unchanged sentences

True North is a subscription-based business that utilizes call center operations and other media channels to market third -party recurring revenue services to consumers.

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 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 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 Company's acquisition of True North on January 1, 2022 ( the "True North Acquisition"), (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 entered into an employment agreement in connection with the True North Acquisition and has remained an employee of the Company following 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 .

11 unchanged sentences

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.

On May 20, 2025, the Company made a one -time payment of $ 300 and 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 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 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.

The Company has evaluated subsequent events through

November 14, 2025, and has determined that there are

no material subsequent events to disclose in the consolidated financial statements.

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