What changed in this filing

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Item 1. Financial Statements

2026-08-13 compared with 2026-05-13 · 266 added, 272 removed, 520 unchanged (51% of the section changed)

2 unchanged sentences

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

March 31, 2026

June 30, 2026 (unaudited)

December 31, 2025

Cash and cash equivalents

$ 10,299 $ 12,935

Accounts receivable, net of allowance for credit losses of $ 146 and $ 163 , respectively

31,765 46,735

Prepaid expenses and other current assets

Total current assets

49,431 67,469

Non-current restricted cash

2 unchanged sentences

Intangible assets, net

16,704 17,276

Other non-current assets

$ 72,271 $ 89,133

LIABILITIES AND SHAREHOLDERS' EQUITY:

Accounts payable

$ 7,483 $ 7,200

Accrued expenses and other current liabilities

20,024 25,163

Deferred revenue

Short-term debt, net

23,456 30,846

Current portion of operating lease liability

Total current liabilities

52,210 65,034

Convertible Notes, at fair value with related parties

2 unchanged sentences

Total liabilities

58,985 70,921

Contingencies (Note 10)

6 unchanged sentences

Treasury stock, at cost — 768,595 and 768,595 Shares, respectively

( 11,407 ) ( 11,407 )

Additional paid-in capital

467,955 467,528

Accumulated deficit

( 443,316 ) ( 437,962 )

Total shareholders' equity

13,286 18,212

Total liabilities and shareholders' equity

$ 72,271 $ 89,133

See notes to consolidated financial statements

1 unchanged sentence

(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:

2 unchanged sentences

Product development

General and administrative

General and administrative (including $168 to a related party for the three and six months ended June 30, 2026)

Depreciation and amortization

5 unchanged sentences

Loss before income taxes

Income tax expense

Income tax (expense) benefit

Basic and diluted loss per share:

6 unchanged sentences

Total shareholders'

Balance at December 31, 2025

Balance at March 31, 2026

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

1 unchanged sentence

Exercise of pre-funded warrants

Balance at March 31, 2026

Balance at June 30, 2026

Balance at December 31, 2025

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

Share-based compensation expense

Exercise of pre-funded warrants

Balance at June 30, 2026

Treasury stock

1 unchanged sentence

Total shareholders'

Balance at December 31, 2024

Balance at March 31, 2025

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

Share-based compensation

Issuance of pre-funded warrants

Issuance of pre-funded warrants and common stock warrants

Exercise of pre-funded warrants

Balance at March 31, 2025

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 and common stock warrants

Exercise of pre-funded warrants

Balance at June 30, 2025

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:

6 unchanged sentences

Loss on disposal of asset

Non-cash loss on asset write-off

Allowance for credit losses

17 unchanged sentences

Debt financing costs

Proceeds from issuance of common stock and warrants

Proceeds from issuance of pre-funded and common stock warrants

Net cash used in financing activities

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 March 31, 2026 and 2025 , 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, 2026 .

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, 2026 and 2025 , 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, 2026 .

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.

With the continuing difficulties in sourcing traffic for the owned and operated digital media properties ("O&O Sites"), the Company has shifted its strategic focus toward scaling its Commerce Media Solutions business.

While Commerce Media Solutions has demonstrated growth and operates under a different economic model that reduces exposure to certain media sourcing risks, it represents a relatively new and evolving component of the Company’s business.

Further, the success of the Commerce Media Solutions transition depends on the Company’s ability to continue to onboard and retain media partners, achieve favorable economics under long-term agreements, and maintain advertiser demand, and there can be no assurance that this strategy will be successful.

With the difficulties in sourcing traffic for the owned and operated digital media properties ("O&O Sites"), the Company shifted its strategic focus toward scaling its Commerce Media Solutions business.

Commerce Media Solutions has demonstrated growth and operates under a different economic model that reduces exposure to certain media sourcing risks.

However, it continues to represent an evolving component of the Company’s business and the continued success of Commerce Media Solutions depends on the Company’s ability to continue to onboard and retain media partners, achieve favorable economics under long-term agreements, and maintain advertiser demand, of which there can be no assurance.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

Since entering into the Financing Agreement (as defined in and discussed in Note 4, Debt, net ), the Company has continued to receive advances, as needed, on its eligible account receivables.

3 unchanged sentences

Based upon the foregoing, management has concluded that there is substantial doubt about the Company's ability to continue as a going concern.

Based on the Company's forecast, management expects to have sufficient liquidity over the next twelve months from the date of filing.

However, the Company does have a history of not meeting its forecast and any substantial deviations from such forecasts could adversely affect the Company’s liquidity and ability to access funding.

In addition, the Company completed its procedures as it relates to the At-The-Market Issuance Sales Agreement (the “ATM Agreement”), which will allow the Company to offer and sell up to $ 11,200 shares of common stock.

Based on the Company's forecast, management expects to have sufficient liquidity over the next twelve months from the date of filing, but any substantial deviations from such forecasts could adversely affect the Company’s liquidity and ability to access funding.

Although the Company has achieved or overperformed forecasts over the trailing three quarters, it did not meet its forecast, at times, over the prior three years.

In addition, the Company is eligible to offer and sell shares of the Company's common stock having an aggregate value of up to $ 11,200 pursuant to that certain At-the-Market Issuance Sales Agreement dated December 31, 2025 by and between the Company and Lake Street Capital Markets, LLC.

As of June 30, 2026, no shares have been sold.

The Company's ability to raise capital under this program or through other financing sources is subject to market conditions and other factors and may be limited or unavailable at acceptable terms, if at all.

2 unchanged sentences

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

Principles of consolidation

1 unchanged sentence

All significant transactions among the Company and its subsidiaries have been eliminated upon consolidation.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

Reclassification

During the three and six months ended June 30, 2025, the Company reclassified certain salaries and benefits and other costs among sales and marketing, product development, and general and administrative expenses within the consolidated statements of operations to better align with how management reviews the business and personnel allocate their time.

Certain prior period amounts have been reclassified to conform to the current period presentation.

These reclassifications had no effect on previously reported total costs and expenses, loss from operations, or net loss for any period presented.

(b) Recently issued and adopted accounting standards

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The guidance is to be applied prospectively, with early adoption prohibited.

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

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.

5 unchanged sentences

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.

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

The amendments in ASU No.

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This update is effective for annual reporting periods beginning after December 15, 2026, including interim reporting periods within those annual reporting periods.

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4 unchanged sentences

Revenue is recognized when a company has satisfied its performance obligations to a customer and can reasonably expect and measure the payment.

The Company's performance obligations are typically to (a) deliver data records based on predefined qualifying characteristics specified by the customer, (b) generate conversions based on predefined user actions (for example, a click, a registration, or the installation of an app) and subject to certain qualifying characteristics specified by the customer, (c) deliver media spend as a part of the business of AdParlor, LLC ("AdParlor"), a wholly-owned subsidiary of the Company, or previously, through January 31, 2026, and (d) transfer calls with the Company's advertiser clients as a part of the call center operation.

The Company's performance obligations are typically to (a) deliver data records based on predefined qualifying characteristics specified by the customer, (b) generate conversions based on predefined user actions (for example, a click, a registration, or the installation of an app) and subject to certain qualifying characteristics specified by the customer, (c) deliver media spend as a part of the business of AdParlor, LLC d/b/a Trevant ("Trevant"), a wholly-owned subsidiary of the Company, and (d) transfer calls with the Company's advertiser clients as a part of the call center operation, through January 31, 2026.

These Company performance obligations have the customer simultaneously receiving and consuming the benefits provided.

3 unchanged sentences

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

As of March 31, 2026, December 31, 2025 and 2024, the balance of accounts receivable was $ 20,041 , $ 28,499 , and $ 26,131 , respectively.

As of June 30, 2026 , December 31, 2025 and 2024 , the balance of accounts receivable was $ 26,837 , $ 28,499 , and $ 26,131 , respectively.

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.

March 31, 2026 ,

December 31, 2025 , and

December 31, 2024, the balance of deferred revenue was

$ 556 , respectively.

The majority of the deferred revenue balance as of

December 31, 2025 was recognized as revenue during the

first quarter of

As of June 30, 2026 , December 31, 2025 , and December 31, 2024, the balance of deferred revenue was $ 120 , $ 721 , and $ 556 , respectively.

The majority of the deferred revenue balance as of December 31, 2025 was recognized as revenue during the first quarter of 2026 .

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, 2026 , December 31, 2025 , and December 31, 2024, unbilled revenue included in the Company's accounts receivable was $ 11,292 , $ 17,701 , and $ 18,625 , respectively.

As of June 30, 2026 , December 31, 2025 , and December 31, 2024, unbilled revenue included in the Company's accounts receivable was $ 12,512 , $ 17,701 , and $ 18,625 , 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.

7 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, 2026 and 2025 , based on segment reporting:

Three Months Ended March 31,

The following tables present the Company’s disaggregated revenue by media resources along with its availability and demand for the three and six months ended June 30, 2026 and 2025 , based on segment reporting:

Three Months Ended June 30,

(In thousands)

Owned and Operated

$ 15,747 $ — $ 15,747 $ 31,082 $ — $ 31,082

Commerce Media Solutions

25,865 — 25,865 12,660 — 12,660

Call Solutions

1,213 — 1,213 10,079 — 10,079

— 2,027 2,027 — 1,397 1,397

All Other (1)

— — — — ( 8 ) ( 8 )

Total Revenue

$ 42,825 $ 2,027 $ 44,852 $ 53,821 $ 1,389 $ 55,210

No balance for the three months ended March 31, 2026 .

Balance is fully related for the three months ended March 31, 2025 to commission revenues in run-off.

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

The balance for the three months ended June 30, 2026 was due to the reassessment of the health insurance policies estimated lifetime value related to its prior commission revenue, that is in run-off.

The balance for the three months ended June 30, 2025 is fully related to commission revenues in run-off.

Six Months Ended June 30,

(In thousands)

Owned and Operated

Commerce Media Solutions

Call Solutions

All Other (1)

Total Revenue

The balance for the six months ended June 30, 2026 was due to the reassessment of the health insurance policies estimated lifetime value related to its prior commission revenue, that is in run-off.

The balance for the six months ended June 30, 2025 is fully related to commission revenues in run-off.

Owned and Operated and Commerce Media Solutions in the tables above represent the Company’s remaining data and performance-based marketing revenue.

Prior to its divestiture, Call Solutions also consisted of performance-based marketing revenue (refer to Note 12, Divestiture for details).

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

The Company's performance is subject to fluctuations related to seasonality and cyclicality in our clients' and media partners' businesses.

Other factors affecting the Company may include macroeconomic conditions that impact the digital advertising industry, the various client and partner verticals served, and general market conditions.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

(d) Use of estimates

4 unchanged sentences

Actual results could differ from these estimates.

(e) Fair value

(e) Note receivable and allowance for credit losses

In connection with the divestiture on January 31, 2026, the Company received a note ("Note") that is a collateral-dependent financial asset valued at amortized cost (as defined in Note 12, Divestiture ).

The Company then evaluated the Note for expected credit losses and concluded an allowance of $ 427 was required, which was recorded in prepaid expenses and other current assets.

The allowance was estimated using a probability of default and loss given default methodology, which incorporated a borrower-specific credit assessment and the estimated fair value of the underlying collateral, adjusted for the Company's subordinated position.

Management also considered current and forecasted macroeconomic conditions in evaluating whether additional adjustments to the allowance were necessary.

(f) Fair value

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

4 unchanged sentences

See Note 5 , Fair Value Measurements , for further details.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

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, 2026 and

December 31, 2025 , there was

no remaining goodwill.

As of June 30, 2026 and December 31, 2025 , there was no remaining goodwill.

Income (loss) per share

2 unchanged sentences

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, 2026 and 2025 , basic and diluted loss per share were as follows:

Three Months Ended March 31,

$ ( 5,354 ) $ ( 8,269 )

For the six months ended June 30, 2026 and 2025 , basic and diluted loss per share were as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Weighted average shares outstanding

31,049,032 20,866,774

Weighted average restricted shares vested not delivered

283,678 344,665

Total basic weighted average shares outstanding

31,332,710 21,211,439

Dilutive effect of assumed conversion of restricted stock units

Total diluted weighted average shares outstanding

31,332,710 21,211,439

Basic and diluted loss per share:

$ ( 0.17 ) $ ( 0.39 )

Based on exercise prices compared to the average stock prices for the three months ended March 31, 2026 and 2025 , certain stock equivalents 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, 2026 and 2025 , 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

1,337,181 638,241

Stock options

331,667 331,667

Common stock warrants

Total anti-dilutive securities

9,370,231 969,908

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2 unchanged sentences

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

Amortization period (in years) March 31, 2026

Amortization period (in years)

June 30, 2026

December 31, 2025

1 unchanged sentence

Software developed for internal use

3 $ 28,123 $ 28,141

Acquired proprietary technology

3 - 5 13,482 14,282

Customer relationships

5 - 10 34,986 36,686

4 - 20 16,657 16,657

5 - 10 31,292 31,292

Non-compete agreements

2 - 5 1,768 1,768

Total gross amount

126,499 129,021

Accumulated amortization:

Software developed for internal use

( 19,526 ) ( 19,305 )

Acquired proprietary technology

( 13,482 ) ( 14,282 )

Customer relationships

( 34,895 ) ( 36,472 )

( 8,734 ) ( 8,529 )

( 98 ) ( 97 )

( 31,292 ) ( 31,292 )

Non-compete agreements

( 1,768 ) ( 1,768 )

Total accumulated amortization

( 109,795 ) ( 111,745 )

Net intangible assets:

2 unchanged sentences

Total intangible assets, net

$ 16,704 $ 17,276

The gross amounts associated with software developed for internal use primarily represent capitalized costs of internally developed software.

7 unchanged sentences

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

The Company completed its quarterly triggering event assessment for the three months ended March 31, 2026 and determined that no triggering event had occurred requiring further impairment assessment of its long-lived assets.

Amortization expenses of $ 1,662 and $ 2,391 for the three months ended March 31, 2026 and 2025 , respectively, are included in depreciation and amortization expenses in the consolidated statements of operations.

As of March 31, 2026 , intangible assets with a carrying amount of $ 481 , 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, 2026 , estimated amortization expenses related to the Company's intangible assets for the remainder of 2026 and through 2031 and thereafter are as follows:

March 31, 2026

The Company completed its quarterly triggering event assessment for the three months ended June 30, 2026 and determined that no triggering event had occurred requiring further impairment assessment of its long-lived assets.

Amortization expenses of $ 1,701 and $ 2,407 for the three months ended June 30, 2026 and 2025 , respectively, and $ 3,363 and $ 4,798 for the six months ended June 30, 2026 and 2025 , respectively, are included in depreciation and amortization expenses in the consolidated statements of operations.

As of June 30, 2026 , intangible assets with a carrying amount of $ 546 , 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 June 30, 2026 , estimated amortization expenses related to the Company's intangible assets for the remainder of 2026 and through 2031 and thereafter are as follows:

June 30, 2026

Remainder of 2026

2031 and thereafter

Debt, net of unamortized discount and financing costs, related to the Financing Agreement (as defined herein), Note Payable (as defined herein), and Convertible Notes with related parties (as defined herein) consisted of the following:

March 31, 2026

Debt, net of unamortized discount and financing costs, related to the Financing Agreement (as defined herein), Note Payable (as defined herein), and Convertible Notes (as defined herein) with related parties consisted of the following:

June 30, 2026

December 31, 2025

Financing Agreement due 2028 (less unamortized discount and financing costs of $767 and $926, respectively)

$ 23,206 $ 30,346

Note Payable due 2026

Convertible Notes, at fair value with related parties

28,027 34,580

Short term and current portion of long-term debt

( 23,456 ) ( 30,846 )

Long-term debt, net (non-current)

$ 4,571 $ 3,734

Accounts Receivable Finance Agreement

On November 25, 2025, the Company and its affiliates Fluent, LLC, Fluent Media Labs, LLC and AdParlor, LLC, each a wholly owned subsidiary of the Company, entered into an Accounts Receivable Finance Agreement (the "Financing Agreement") with CSNK Working Capital Finance Corp.

d/b/a Bay View Funding ("Bay View").

d/b/a Bay View Funding ("Bay View"), a portion of the net proceeds of which were used to repay and terminate the SLR Credit Facility (as defined below).

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

Under the Financing Agreement, Bay View may extend financing to the Company based on eligible domestic and foreign accounts receivable, provided that the aggregate amount of advances thereon shall not exceed the lesser of a maximum credit of $30,000 (the "Maximum Credit") or an amount equal to the sum of all advances less any funds received by Bay View pursuant to the Financing Agreement over the collection amounts adjusted for obligation that is maintained in a reserve account.

1 unchanged sentence

The transfer of the receivables was recorded as secured borrowings in accordance with ASC 860, Transfers and Servicing (“ASC 860” ), with the receivables remaining on the balance sheet as a current asset.

As of March 31, 2026 , the Financing Agreement had a balance of $ 24,053 , which was recorded within current liabilities as the underlying receivables are typically due within 120 -days and Bay View may require repayment of amounts outstanding beyond that period.

In addition, the Company had $ 506 in its reserve accounts with Bay View as of March 31, 2026 , which was recorded within prepaids and other current assets.

The net unused advance as of March 31, 2026 was $ 6,453 .

The Company used a portion of the net proceeds of the Financing Agreement to repay the outstanding SLR Credit Facility (as defined herein) under the SLR Credit Agreement (as defined herein) dated April 2, 2024.

As of June 30, 2026 , the Financing Agreement had a balance of $ 27,526 , which was recorded within current liabilities as the underlying receivables are typically due within 120 days and Bay View may require repayment of amounts outstanding beyond that period.

In addition, the Company had $ 159 in its reserve accounts with Bay View as of June 30, 2026 , which was recorded within prepaids and other current assets.

The net unused advance as of June 30, 2026 was $ 2,633 .

The Financing Agreement has an initial term of 36 months (the "Initial Term") and renews automatically for additional 12 -month periods unless terminated in accordance with its terms.

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The finance rate shall increase or decrease monthly but not be less than 8.75 % for the first year from the initial funding date, 8.50 % for the second year of the Initial Term and 8.25 % for the third year of the Initial Term.

As of March 31, 2026 , the annual finance charge rate was 11.75%, which includes the management fee of 3.0 % applied on the end of month average outstanding balance.

The total cost of the Financing Agreement for the three months ended March 31, 2026 was $ 604 , inclusive of the management fee, and was included in interest expense on the consolidated statements of operations under the effective interest method.

In addition, amortization of the debt discount for the three months ended March 31, 2026 was $ 79 , and was included in interest expense on the consolidated statements of operations.

As of June 30, 2026 , the annual finance charge rate was 11.75%, which includes the management fee of 3.0 % applied on the end of month average outstanding balance.

The total cost of the Financing Agreement for the six months ended June 30, 2026 was $ 1,273 , inclusive of the management fee, and was included in interest expense on the consolidated statements of operations under the effective interest method.

In addition, amortization of the debt discount for the six months ended June 30, 2026 was $ 159 , and was included in interest expense on the consolidated statements of operations.

The Company’s obligations under the Financing Agreement are secured by a security interest in substantially all of the Company’s assets.

1 unchanged sentence

Credit Facility

On April 2, 2024, Fluent, LLC, a wholly owned subsidiary of the Company (the "Borrower"), entered into a credit agreement (as amended, the "SLR Credit Agreement") with certain of its subsidiaries and the Company (collectively, the "Credit Parties"), as guarantors, and Crystal Financial LLC d/b/a SLR Credit Solutions, as administrative agent, lead arranger and bookrunner ("SLR"), and each other lender from time to time party thereto.

On April 2, 2024, Fluent, LLC, a wholly owned subsidiary of the Company (the "Borrower"), entered into a credit agreement (as amended, the "SLR Credit Agreement") with certain of its subsidiaries and the Company, as guarantors, and Crystal Financial LLC d/b/a SLR Credit Solutions, as administrative agent, lead arranger and bookrunner ("SLR"), and each other lender from time to time party thereto.

The SLR Credit Agreement provided 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").

2 unchanged sentences

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

On March 17, 2024, Fluent, LLC entered into a junior secured promissory note (the "Note Payable") with Freedom Debt Relief, LLC ("FDR") in the principal amount of $ 2,000 in connection with the Berman Settlement Agreement (as defined herein) (see Note 10 , Contingencies ).

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 and was 14.68 % (SOFR + 11% ) as of March 31, 2026 .

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 Financing Agreement.

The Note Payable was to mature on March 31, 2026 and interest was payable quarterly.

Scheduled principal amortization of the Note Payable was $ 250 per quarter.

On March 17, 2024, Fluent, LLC entered into a junior secured promissory note (the "Note Payable") with Freedom Debt Relief, LLC ("FDR") in the principal amount of $ 2,000 .

The Note Payable bore 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 %).

On April 8, 2026, the final payment was made on the Note Payable.

6 unchanged sentences

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").

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

The Subordination Agreements confirmed the subordinated nature of the Convertible Notes and restricted payments to and remedies of the holders of the Convertible Notes for so long as the SLR Credit Agreement had indebtedness outstanding.

The Subordination Agreements provided that the Company may not make any payment of principal or interest on the Convertible Notes unless certain conditions are met.

In connection with the refinancing of the SLR Credit Agreement with Bay View the subordination obligations automatically carried over such that the Convertible Notes remain subordinated to the Company's obligations under the Bay View credit facility.

Following the refinancing of the SLR Credit Agreement with the Bay View facility, the Convertible Notes remain subordinated to the Company's obligations under the Bay View credit facility.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

The Convertible Notes are accounted for at fair value due to the election of the fair value option ("FVO") in accordance with ASC 825 , Financial Instruments ("ASC 825" ).

Within ASC 825, the FVO can be elected for debt host financial instruments containing embedded features which would otherwise be required to be bifurcated from the debt-host and recognized as separate derivative liabilities subject to initial and subsequent periodic estimated fair value measurements under ASC 815.

The Convertible Notes are accounted for at fair value under the fair value option ("FVO") in accordance with ASC 825 , Financial Instruments ("ASC 825" ).

ASC 825 permits the FVO election for debt host financial instruments containing embedded features which would otherwise be required to be bifurcated from the debt-host and recognized as separate derivative liabilities subject to initial and subsequent periodic estimated fair value measurements under ASC 815.

Notwithstanding, ASC 825 - 10 - 15 - 4 provides for the FVO election, to the extent not otherwise prohibited by ASC 825 - 10 - 15 - 5, to be afforded to financial instruments, wherein bifurcation of an embedded derivative is not necessary, and the financial instrument is initially measured at its issue-date estimated fair value and then subsequently remeasured at estimated fair value on a recurring basis at each reporting period date.

3 unchanged sentences

The initial fair value was determined to be greater than the principal balance of the Convertible Notes.

The Company noted that the transaction was entered into with certain of the Company's officers and directors and the largest stockholder and was required under the Second Amendment for liquidity needs.

Further, the Company reviewed the valuation and determined it was appropriate.

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, 2026 , the principal balance of the Convertible Notes was $ 2,519 , with a fair value of $ 4,571 .

The Company recognized an additional increase in fair value of $ 837 for the three months ended March 31, 2026 , which was recognized in other income (expense) from operations.

For the three months ended March 31, 2026 , accrued interest was paid in kind.

As of March 31, 2026 , scheduled future maturities of the Credit Agreement, including the required principal prepayment based on a portion of the Company's quarterly excess cash flow and excluding potential future additional principal prepayments, are as follows:

March 31, 2026

The transaction was entered into with certain of the Company's officers and directors and the largest stockholder and was required under the Second Amendment for liquidity needs.

Further, the Company reviewed the valuation and determined it was appropriate, resulting in a day one unrealized loss on the Convertible Notes of $ 2,110 .

As of June 30, 2026 , the principal balance of the Convertible Notes was $ 2,601 , with a fair value of $ 5,155 .

The Company recognized an additional increase in fair value of $ 584 and $ 1,421 for the three and six months ended June 30, 2026 , which was recognized in other income (expense) from operations.

For the six months ended June 30, 2026 , accrued interest was paid in kind.

As of June 30, 2026 , scheduled future maturities of the outstanding debt are as follows:

June 30, 2026

Remainder of 2026

7 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 and $ 710 in non-current restricted cash as of March 31, 2026 and December 31, 2025, respectively, on the consolidated balance sheets.

As of March 31, 2026 , the Company regards the fair value of its Note (as defined in Note 12, Divestiture ) and debt to approximate its carrying value.

The following table presents the Company’s fair value hierarchy for assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2026 and December 31, 2025 :

March 31, 2026

In connection with this lease agreement, the Company recorded $ 710 and $ 710 in non-current restricted cash as of June 30, 2026 and December 31, 2025, respectively, on the consolidated balance sheets.

As of June 30, 2026 , the Company regards the fair value of its Note (as defined in Note 12, Divestiture ) and debt to approximate its carrying value.

The following table presents the Company’s fair value hierarchy for assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2026 and December 31, 2025 :

June 30, 2026

December 31, 2025

Restricted cash

$ 710 — — $ 710 — —

— 2,931 — — — —

Debt, net (2)

— 24,303 — — 31,772 —

Convertible Notes with related parties

— — 4,571 — — 3,734

Contingent consideration in connection with TAPP (3)

Excludes the allowance for credit losses.

See Note 1 (e), Note receivable and allowance for credit losses .

Inclusive of the credit facilities and note payable.

1 unchanged sentence

See Note 4 , D ebt, net.

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.

Balance was 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.

Convertible Notes with related parties

1 unchanged sentence

See Note 4 , Debt, net .

The following is a reconciliation of the fair value from December 31, 2025 to March 31, 2026 :

The following is a reconciliation of the fair value from December 31, 2025 to June 30, 2026 :

Fair value as of December 31, 2025

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

Fair value as of March 31, 2026

Fair value as of June 30, 2026

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2 unchanged sentences

Both approaches are based on the following assumptions:

March 31, 2026

June 30, 2026

Face value of principal payable

9 unchanged sentences

Payment of compensation expense

Fair value as of March 31, 2026

Fair value as of June 30, 2026

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, 2026 , 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.

See Note 1 (f) , Goodwill.

As of June 30, 2026 , there were none.

See Note 1 (g) , Goodwill.

The Company is subject to federal and state income taxes in the United States.

The tax provision for interim periods is determined using an estimate of the Company's annual effective tax rate (“AETR”).

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

As of March 31, 2026 and December 31, 2025 , the Company recorded a full valuation allowance against U.S.

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

As of June 30, 2026 and December 31, 2025 , the Company recorded a full valuation allowance against U.S.

net deferred tax assets until there is sufficient evidence to support the release of all or a portion of these valuation allowances.

1 unchanged sentence

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, 2026 , the Company's effective income tax rate of 0.0 % 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, 2025 , the Company's effective income tax rate of 2.9 % primarily represented state and local tax expense and losses for which no tax benefit was recognized.

For the six months ended June 30, 2026 , the Company's effective income tax rate of 0.1 % 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, 2025 , the Company's effective income tax rate of 0.8 % primarily represented 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.

As of March 31, 2026 and December 31, 2025 , the number of issued shares of common stock was 30,584,307 and 30,404,779 , respectively, which included shares of treasury stock of 768,595 and 768,595 , respectively.

For the three months ended March 31, 2026 , the increase in the number of issued shares of common stock was the result of the exercise of pre-funded warrants for 85,714 shares of common stock and the issuance of 93,814 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.

Private equity securities offerings

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").

As of June 30, 2026 and December 31, 2025 , the number of issued shares of common stock was 32,362,277 and 30,404,779 , respectively, which included shares of treasury stock of 768,595 and 768,595 , respectively.

For the six months ended June 30, 2026 , the increase in the number of issued shares of common stock was the result of the exercise of pre-funded warrants for 1,444,129 shares of common stock and the issuance of 513,369 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.

Private placements

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 sold 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 largest stockholder of the Company.

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

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

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

8 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" Private Placement").

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

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 CSWs") to purchase up to 1,829,956 shares of the Company’s common stock (the "May 2025" Private Placement").

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 CSWs 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.

1 unchanged sentence

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 allocation of the fair values was $ 2,671 for the May 2025 PFWs and $ 1,354 for the May 2025 CSWs.

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 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.

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 May 2025 PFWs purchased by the four officers and/or directors of the Company were subject to stockholder approval, which was obtained on June 17, 2026, and were subsequently exercised as of June 30, 2026.

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 CSWs" 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 CSW were sold together at a purchase price of $ 1.75 per share and accompanying warrant, and each August 2025 PFW and accompanying August 2025 CSWs were sold together at a purchase price of $ 1.7495 per pre-funded warrant and accompanying common stock 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 CSWs.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

The August 2025 PFWs had 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.

Nearly 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, with the additional 85,714 shares related to non-affiliates being exercised in February 2026.

The remaining unexercised August 2025 PFWs to purchase 585,714 shares of common stock, all of which were held by August 2025 Inside Investors, were subject to stockholder approval, which was obtained on June 17, 2026, and were subsequently exercised as of June 30, 2026.

The August 2025 CSWs 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, with the additional 85,714 shares related to non-affiliates being exercised in February 2026.

The remaining unexercised August 2025 PFWs to purchase 585,714 shares of common stock, all 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).

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 March 31, 2026 , and December 31, 2025, an aggregate of 5,670,930 and 5,585,216 respectively, of the December 2024 PFWs, March 2025 PFWs, May 2025 PFWs, and August 2025 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 June 30, 2026 , and December 31, 2025, an aggregate of 7,029,543 and 5,585,216 respectively, of the December 2024 PFWs, March 2025 PFWs, May 2025 PFWs, and August 2025 PFWs were exercised.

For a portion, the exercise was cashless in nature.

The issuance of the December 2024 PFWs, 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.

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 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.

The December 2024 PFWs, March 2025 PFWs, May 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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

Common stock warrants

As of March 31, 2026 and December 31, 2025 , the Company had 7,701,383 and 7,701,383 common stock warrants outstanding, respectively.

As of June 30, 2026 and December 31, 2025 , the Company had 7,701,383 and 7,701,383 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.

12 unchanged sentences

The Company is not obligated to sell any of the Shares under the ATM Agreement and may at any time suspend solicitation and offers thereunder.

The offering of Shares pursuant to the ATM Agreement will terminate on the earlier of ( 1 ) the sale, pursuant to the ATM Agreement, of Shares having an aggregate offering price of $ 11,200 and ( 2 ) the termination of the ATM Agreement by either the Company or Lake Street, as set forth therein.

The offering of Shares pursuant to the ATM Agreement will terminate on the earlier of ( 1 ) the sale of Shares having an aggregate offering price of $ 11,200 and ( 2 ) the termination of the ATM Agreement by either the Company or Lake Street, as set forth therein.

Treasury stock

As of March 31, 2026 and December 31, 2025 , 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, 2026 and December 31, 2025 , 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, 2026 , 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, 2026 , 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 2025 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 March 31, 2026 , the Company had 1,619,116 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 again on June 17, 2026 at the Company’s 2026 annual meeting of stockholders which approved an increase of the number of shares of common stock authorized for issuance under the 2022 Plan by 1,900,000 shares.

As of June 30, 2026 , the Company had 2,521,386 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 (the "Board" or "Board of Directors") approved the Fluent, Inc.

4 unchanged sentences

In October 2022, the Company issued to certain of its senior officers and employees, RSUs (time-based), long-term incentive grants (performance and time-based vesting RSUs), or performance stock units ("PSUs") (on achievement of targets, a cash payout) under the 2022 Plan.

In October 2025, the Company issued to certain of its senior officers and employees, RSU (time-based, a cash payout) and PSUs (performance and time-based vesting RSUs, a cash payout) under the 2025 Plan.

Further, it issued RSUs (time-based) and PSUs (on achievement of targets) under the 2022 Plan.

In October 2025 and April 2026, the Company issued to certain of its senior officers and employees (i) RSUs (time-based, a cash payout) and PSUs (performance and time-based vesting RSUs, a cash payout) under the 2025 Plan and (ii) RSUs (time-based) and PSUs (on achievement of targets) under the 2022 Plan.

Stock options

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 March 31, 2026 , 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 remained unvested as of the fifth anniversary of the grant date were vested in full on such date.

The Compensation Committee (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 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 20 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 20 consecutive trading days;

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

As of June 30, 2026 , 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 had remained unvested as of the fifth anniversary of the grant date vested 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.

6 unchanged sentences

Fair value lower range

$ 16.86 $ 9.48 $ 8.76 $ 26.04

Fair value higher range

$ 17.16 $ 9.66 $ 8.94 $ 26.58

Exercise price

$ 28.32 $ 15.36 $ 13.98 $ 37.98

Expected term (in years)

1.0 - 1.3 1.0 - 1.6 1.0 - 1.5 1.0 - 1.3

Expected volatility

65 % 70 % 70 % 80 %

Dividend yield

— % — % — % — %

Risk-free rate

2.61 % 1.85 % 1.05 % 1.18 %

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.

12 unchanged sentences

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

For the three months ended March 31, 2026 , details of stock option activity were as follows:

For the six months ended June 30, 2026 , details of stock option activity were as follows:

Number of stock options

3 unchanged sentences

Outstanding as of December 31, 2025

331,667 $ 16.35 5.6 $ —

Outstanding as of March 31, 2026

331,667 $ 16.35 5.3

Options exercisable as of March 31, 2026

199,167 $ 25.35 3.3

Outstanding as of June 30, 2026

Options exercisable as of June 30, 2026

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, 2026 , the unvested balance of stock options was as follows:

For the six months ended June 30, 2026 , the unvested balance of stock options was as follows:

Number of stock options

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Unvested as of December 31, 2025

138,500 $ 4.33 8.5

( 6,000 ) — —

Unvested as of March 31, 2026

132,500 $ 2.81 8.4

Compensation expense recognized for stock options was $ 15 and $ 19 for the three months ended March 31, 2026 and 2025 , respectively, and was recognized in product development and general and administrative expenses in the consolidated statements of operations.

As of March 31, 2026 , there was $ 115 of unrecognized share-based compensation with respect to outstanding stock options.

Unvested as of June 30, 2026

Compensation expense recognized for stock options was $ 15 and $ 18 for the three months ended June 30, 2026 and 2025 , respectively, and $ 30 and $ 37 for the six months ended June 30, 2026 and 2025, respectively, was recognized in product development and general and administrative expenses in the consolidated statements of operations.

As of June 30, 2026 , there was $ 100 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, 2026 , details of unvested RSU activity were as follows:

For the six months ended June 30, 2026 , details of unvested RSU activity were as follows:

Number of units

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Unvested as of December 31, 2025

1,471,345 $ 11.12

Vested and delivered

( 93,814 ) 4.33

Withheld as treasury stock (1)

Vested not delivered (2)

( 68,492 ) 3.00

Unvested as of March 31, 2026

1,337,181 $ 11.88

Unvested as of June 30, 2026

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 March 31, 2026 , there were 768,595 outstanding shares of treasury stock.

As of June 30, 2026 , 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, 2026 , there was a change in the vested not delivered balance due to a net 13,047 shares that were deferred due to timing of delivery of certain shares, of which no shares had elected deferred delivery.

As of March 31, 2026 , 283,758 outstanding RSUs were vested not delivered.

Compensation expense recognized for RSUs of $ 787 and $ 330 for the three months ended March 31, 2026 and 2025 , 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, 2026 , there was a change in the vested not delivered balance due to a net 66,070 shares that were deferred due to timing of delivery of certain shares, of which no shares had elected deferred delivery.

As of June 30, 2026 , 362,875 outstanding RSUs were vested not delivered.

Compensation expense recognized for RSUs of $ 1,523 and $ 321 for the three months ended June 30, 2026 and 2025 , respectively, and $ 2,310 and $ 651 for the six months ended June 30, 2026 and 2025 , 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, 2026 , unrecognized share-based compensation expense associated with the granted RSUs and stock options amounted to $ 2,240 , which is expected to be recognized over a weighted average period of 1.9 years.

For the three months ended March 31, 2026 and 2025 , 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, 2026 , unrecognized share-based compensation expense associated with the granted RSUs and stock options amounted to $ 4,317 , which is expected to be recognized over a weighted average period of 2.3 years.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

For the three and six months ended June 30, 2026 and 2025 , 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

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Total share-based compensation

As of March 31, 2026 and December 31, 2025 , the Company recorded a liability of $ 328 and $ 165 , respectively, related to PSUs that are to be settled in cash.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

As of June 30, 2026 and December 31, 2025 , the Company recorded a liability of $ 361 and $ 165 , respectively, related to PSUs that are to be settled in cash.

Related party RSUs

The Company entered into an Amended and Restated Consulting Agreement (the "Consulting Agreement"), effective June 16, 2026, with an entity controlled by an immediate family member of the Company's Chief Strategy Officer (the "Consultant"), pursuant to which the Consultant provides operational consulting and advisory services to the Company's executive leadership team.

The Consulting Agreement and compensation structure were approved by the Compensation Committee on June 16, 2026, and renews on a quarter-to-quarter basis until terminated by either party.

Under the Consulting Agreement, for each calendar quarter in which the Consultant performs the operational consulting services, the Company grants the Consultant RSUs with a grant-date fair value of $ 50 , calculated by dividing $ 50 by the closing price of the Company's common stock on the last trading day of the calendar quarter.

Each quarterly grant is made and vests in full upon approval by the Compensation Committee.

The Company accounts for the RSU awards in accordance with ASC 718, Compensation - Stock Compensation .

Each quarterly grant is treated as a separate award measured at fair value and vested in full on the grant date.

Because each grant is made in arrears for services already rendered during the calendar quarter ending on the grant date, the service inception date precedes the grant date and compensation cost is recognized in the requisite service period.

For the three months ended June 30, 2026, the Company recognized $ 50 of share-based compensation expense for services rendered during the period and granted 13,404 RSUs that vested immediately.

In addition, the Consulting Agreement included a one -time transition payment of 36,656 RSUs that were granted and vested on June 16, 2026 for services provided for the three months ended December 31, 2025 and March 31, 2026.

In connection with the one -time payment, the Company recorded $ 118 of share-based compensation expense, all of which is included in general and administrative expenses in the consolidated statements of operations.

Segment information

The Company identifies operating segments as components of an entity for which discrete financial information is available and are regularly reviewed by the Chief Executive Officer, who is the Company’s Chief Operating Decision Maker ("CODM"), who has final authority in making decisions regarding resource allocation and performance assessment.

The Company identifies operating segments as components of an entity for which discrete financial information is available and are regularly reviewed by the Chief Executive Officer, who is the Company’s Chief Operating Decision Maker ("CODM") and has final authority in making decisions regarding resource allocation and performance assessment.

The profitability measure employed by CODM is earnings before interest, taxes, depreciation and amortization ("EBITDA").

The use of EBITDA as a financial metric provides management and investors with a clearer view of the core business performance and profitability, excluding the effects of financing and other non-operational expenses.

As of March 31, 2026 , the Company had two continuing operating segments:

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

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

As of June 30, 2026 , the Company had two continuing operating segments:

a) "Fluent", which reflects Owned and Operated and Commerce Media Solutions revenue, and b) "AdParlor d/b/a Trevant." The Company determined that it has one reportable segment, "Fluent," for the purposes of segment reporting.

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

The Company noted that as of January 31, 2026, Call Solutions was divested (refer to Note 12, Divestiture, below for details), however, did not trigger a re-assessment under ASC 280.

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.

The Call Solutions business was divested on January 31, 2026 ( refer to Note 12, Divestiture, below for details);

however, the divestiture did not trigger a re-assessment under ASC 280.

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

The remaining activity 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 and included within "Unallocated" below.

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In addition, certain advertisers overlap within the different operating segments and they are managed consistently with shared management.

Further, the Company considered other qualitative factors, such as the environment operated in, and quantitative factors to determine its reportable segment.

The Company considered other qualitative factors, such as the environment operated in, and quantitative factors to determine its reportable segment.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

The significant expense categories and amounts align with the segment-level information that is regularly provided to and used by the CODM in evaluating performance and EBITDA profitability and were identified as a) cost of revenue b) salaries and benefits, c) professional fees, and d) IT and software.

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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, 2026 and 2025 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, 2026 and 2025 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

$ 25,884 $ 35,905

International

16,941 17,916

Total segment revenue

$ 42,825 $ 53,821

Reconciliation of revenue

Other revenue

Unallocated revenue

Total revenue

$ 44,852 $ 55,210

Costs of revenue

Cost of revenue (exclusive of depreciation and amortization)

34,464 43,732

Costs and expenses:

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Segment EBITDA

$ ( 2,257 ) $ ( 4,278 )

Reconciliation of Segment EBITDA to loss before income taxes

Segment EBITDA (from above)

$ ( 2,257 ) $ ( 4,278 )

Unallocated revenue

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Loss before income taxes

$ ( 5,351 ) $ ( 8,036 )

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

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

Total assets:

$ 63,471 $ 79,570

$ 72,271 $ 89,133

As of March 31, 2026 , long-lived assets are all located in the United States.

For the three months ended March 31, 2026 , 27.3 % of the Company's consolidated revenue was earned from customers located in Israel.

In addition, the Company identified an international customer within the Fluent segment that represented 13.1 % of the Company’s consolidated revenue.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

Six Months Ended June 30,

Revenue (1) :

United States

International

Total segment revenue

Reconciliation of revenue

Unallocated revenue

Total revenue

Costs of revenue

Cost of revenue (exclusive of depreciation and amortization)

Costs and expenses:

Salaries and benefits

Professional fees

IT and software

Other segment items (2)

Segment EBITDA

Reconciliation of Segment EBITDA to loss before income taxes

Segment EBITDA (from above)

Unallocated revenue

Unallocated cost of revenue (exclusive of depreciation and amortization)

Unallocated salaries and benefits

Unallocated professional fees

Unallocated IT and software

Unallocated other operating items (2)

Depreciation and amortization

Interest expense, net

Fair value adjustment of Convertible Notes, with related parties

Loss before income taxes

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

Total assets:

As of June 30, 2026 , long-lived assets are all located in the United States.

For the six months ended June 30, 2026 , 27.3 % of the Company's consolidated revenue was earned from customers located in Israel.

In addition, the Company identified two international customers within the Fluent segment that represented 11.2 % and 10.2 % of the Company’s consolidated revenue.

Contingencies

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The Company does not accrue liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated.

The Company was involved in a Telephone Consumer Protection Act class action, Daniel Berman v.

Freedom Financial Network , which was originally filed in the Northern District of California in 2018.

On May 31, 2023, the parties entered into an Amended Class Action Settlement Agreement (the "Berman Settlement Agreement"), which included injunctive provisions and payment to plaintiffs of $ 9,750 for legal fees and a consumer redress fund, of which the Company was responsible for $ 3,100 .

The final approval of the Berman Settlement Agreement was filed on February 23, 2024.

To satisfy its obligations under the Berman Settlement Agreement, the Company made a cash payment of $ 1,100 on March 15, 2024 and issued a junior secured promissory note in the principal amount of $ 2,000 payable to the co-defendant, FDR, as discussed in Note 4 , D ebt, net .

As of June 30, 2026, the Company did not accrue any amounts for loss contingencies as they were not probable nor reasonably estimable.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

Variable interest entity

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The Company recognized a loss of $ 698 in general and administrative expenses in the consolidated statements of operations in the second quarter of 2025, mainly related to the write-off of the intangible assets.

On January 31, 2026, Inbox Pal, LLC, an indirect subsidiary of the Company and InsurCo, LLC (“InsurCo”) entered into a membership interest purchase agreement pursuant to which it conveyed 100 % of the membership interests of Winopoly, LLC.

("Winopoly") to InsurCo.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

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

On January 31, 2026, Inbox Pal, LLC, an indirect subsidiary of the Company, and InsurCo, LLC (“InsurCo”) entered into a membership interest purchase agreement pursuant to which Inbox Pal, LLC conveyed 100 % of the membership interests of Winopoly, LLC ("Winopoly") to InsurCo.

Winopoly was a call center-supported performance marketplace that provided live-call-based performance campaigns to help clients increase engagement through the Company's Call Solutions business.

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InsurCo’s members are former employees of the Company.

The conveyance did not meet the threshold of a discontinued operation under ASC 205 - 20.

The Company determined the conveyance of Winopoly was a business under ASC 805, Business Combinations.

The conveyance did not meet the criteria of a discontinued operation under ASC 205 - 20.

The Company determined that the conveyance of Winopoly was a business under ASC 805, Business Combinations .

As a result, in accordance with ASC 810, Consolidation , the Company recognized a gain of $2,352 on the conveyance of Winopoly, which is reflected in general and administrative expenses.

Going forward, the Company’s continuing relationship with InsurCo will be limited to the payment of the Note.

As of March 31, 2026, the Note has a principal balance of $ 969 , reflected in prepaids and other current assets, and $ 1,962 , reflected in other non-current assets.

As of June 30, 2026 , the Note has a principal balance of $ 999 , reflected in prepaids and other current assets, and $ 1,719 , reflected in other non-current assets (refer to 1 (e) Note receivable and allowance for credit losses for additional details).

Subsequent events

The Company has evaluated subsequent events through May 13, 2026, and has determined that there are no material subsequent events to disclose in the consolidated financial statements.

The Company has evaluated subsequent events through August 13, 2026, 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