8 unchanged sentences
We cannot anticipate with any degree of certainty what our revenues will be in future periods.
−Removed: While our revenues decreased approximately 2.2% in 2023 as compared to 2022, our gross profit margin increased to 85.8% in 2023 from 60.0% in 2022.
+Added: Our revenues increased approximately 13.4% in 2024 as compared to 2023, our gross profit margin remained level at 85.6% in 2024 and 85.8% in 2023.
We reported an operating loss of approximately $5.8 million in 2024 as compared to an operating loss of approximately $10.3 million in 2023.
Though we have a credit facility dependent upon receivables, the negative cash flows generated from operating activities introduces potential risk of an interruption to operating activities.
−Removed: As of December 31, 2023, we have approximately $4.4 million in cash, cash equivalents and short-term marketable securities.
−Removed: Our net working capital was $211.1 thousand.
+Added: As of December 31, 2024, we have approximately $2.5 million in cash and cash equivalents.
+Added: Our net working capital deficit was $2.2 million.
We have encountered recurring losses and cash outflows from operations, which historically we have funded through equity offerings and debt facilities.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS for a more thorough discussion.
−Removed: We rely on three customers for a significant portion of our revenues.
−Removed: We are reliant upon three customers for a significant portion of our revenue.
−Removed: During 2023 these customers accounted for 60.4%, 12.8%, and 5.7% of our revenues, respectively.
−Removed: In 2022, two of the same customers and another customer accounted for 29.1%, 24.1% and 12.9% of our revenues, respectively.
−Removed: The amount of revenue we receive from these customers is dependent on a number of factors outside of our control, this includes the amount they charge for advertisements, the depth of advertisements available from them, and their ability to display relevant ads in response to end user queries and changes in advertising budgets resulting from their own business circumstances.
−Removed: Throughout 2022 we onboarded several clients that contributed to revenue growth.
−Removed: We have experienced churn in our customer base where some clients that were material to 2021 were not served or only partially served in 2022 and some clients that were material to 2022 are no longer being served.
−Removed: Historically, we have been able to replace lost clients with new clients or by expanding our relationship with existing clients, however, we would likely experience a significant decline in revenue and our business operations could be significantly harmed if we continue to lose material customers or are unable to replace lost clients.
+Added: We rely on one customer for a significant portion of our revenues.
+Added: A significant portion of our revenue is derived from one customer.
+Added: During 2024 this customer accounted for 75.0% of our revenues.
+Added: In 2023, the same customer accounted for 60.4% of our revenues.
+Added: The amount of revenue we receive from this customer is dependent on a number of factors outside of our control;
+Added: this includes the amount the customer charges for advertisements, the depth of its available advertisements, and its ability to display relevant ads in response to end user queries and changes in advertising budgets resulting from their own business circumstances.
+Added: Historically, we have been able to replace lost clients with new clients or by expanding our relationship with existing clients, however, we would likely experience a significant decline in revenue and our business operations could be significantly harmed if we lose material customers or are unable to replace lost clients.
The loss of material customers or a material change in the revenue or gross profit they generate would have a material adverse impact on our business, results of operations and financial condition in future periods.
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We are dependent upon relationships with and the success of our supply partners.
−Removed: Our supply partners are very important to our success.
−Removed: We must recruit and maintain partners who are able to drive traffic successfully to their websites and mobile applications, resulting in clicks on advertisements we have delivered.
−Removed: These partners may experience difficulty in attracting and maintaining users for a number of reasons, including competition, rapidly changing markets and technology, industry consolidation and changing consumer preferences.
−Removed: We have experienced a decrease in the number of supply partners and quantity of Internet traffic from supply partners within Bonfire beginning in late April 2020.
−Removed: Additionally, we are experiencing turnover in our supply partner network and there can be no assurance traffic levels will increase to prior levels or that we will be able to replace supply partners that have left our network.
−Removed: Further, we may not be able to further develop and maintain relationships with distribution partners.
−Removed: They may be able to make their own deals directly with advertisers, may view us as competitors or may find our competitors offerings more desirable.
−Removed: Any of these potential events could have a material adverse effect on our business, financial position and results of operations.
+Added: Our supply partners remain a critical component of our success.
+Added: Throughout 2024, we have successfully onboarded a significant number of new supply partners, strengthening our ability to deliver high-quality traffic and engagement for our advertisers.
+Added: While turnover within our supply partner network still occurs, it has decreased compared to prior periods.
+Added: To sustain growth, we must continue to recruit and retain partners who can drive traffic effectively to their websites and mobile applications, resulting in clicks on advertisements we have delivered.
+Added: However, supply partners may face challenges in attracting and maintaining users due to competition, rapidly evolving market dynamics, technological advancements, industry consolidation, and shifting consumer preferences.
+Added: Although our supply partner base has expanded, maintaining strong relationships remains a priority.
+Added: Some partners may explore direct relationships with advertisers, consider us as competitors, or find competing solutions more attractive.
+Added: Additionally, while we have made progress in stabilizing and expanding our supply network, there can be no assurance that traffic levels will continue to increase or that all departing partners will be replaced.
+Added: Any disruptions in our ability to sustain and enhance our supply partnerships could have a material adverse effect on our business, financial position, and results of operations.
The success of our owned sites is dependent on our ability to acquire traffic in a profitable manner.
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If the NYSE American delists our common stock, investors may face material adverse consequences, including, but not limited to, a lack of trading market for our common stock, reduced liquidity, decreased analyst coverage of our common stock, and an inability for us to obtain any additional financing to fund our operations that we may need.
−Removed: Failure to comply with the covenants and restrictions in our grant agreement with the State of Arkansas could result in the repayment of a portion of the grant, which we may not be able to repay or finance on favorable terms.
−Removed: In January 2013, we entered into an agreement with the State of Arkansas whereby we were granted $1,750,000 for the relocation of the Company to Arkansas and for the purchase of equipment.
−Removed: The grant was contingent upon us having at least 50 full-time equivalent permanent positions within four years, maintaining at least 50 full-time equivalent permanent positions for the following six years and paying those positions an average total compensation of $90,000 per year.
−Removed: In March 2021, we received an amendment to the agreement that revised the position maintenance requirement for the reporting period of March 31, 2022 to 43 full-time equivalent permanent positions.
−Removed: The agreement also extended the reporting period and position maintenance period an additional year to a total of six years ending on March 31, 2024.
−Removed: As of December 31, 2023, we had 43 full-time employees located in Arkansas.
−Removed: Failure to meet the requirements of the grant after the initial four-year period, may require us to repay a portion of the grant, up to but not to exceed the full amount of the grant.
−Removed: At December 31, 2023, we accrued a contingent liability of $35,000 for the lower than required employment.
Financial Risks
22 unchanged sentences
Ability to maintain our credit facility could impact our ability to access capital in the future.
−Removed: On March 12, 2020 we closed a Loan and Security Agreement with Hitachi Capital America Corp.
−Removed: ("Hitachi") the terms of which are described in this report which replaced our credit facility with Western Alliance Bank.
−Removed: Under the terms of the Loan and Security Agreement, Hitachi has provided us with a $5,000,000 line of credit commitment which permits us to borrow against eligible accounts receivable and unbilled receivables.
−Removed: The Hitachi Loan and Security Agreement contains certain affirmative and negative covenants to which we are subject.
+Added: On July 30, 2024, we entered into a Financing and Security Agreement and Collateral Documents (“Financing Agreement”) with SLR Digital Finance LLC (“SLR”).
+Added: Under the terms of the Financing Agreement, SLR has provided us with a $10,000,000 line of credit commitment.
+Added: We are permitted to borrow against eligible accounts receivable and unbilled receivables.
+Added: The Financing Agreement has a three year term and contains certain affirmative and negative covenants to which we are also subject.
As of December 31, 2024, we were in compliance with these covenants.
There are no assurances that we will be able to comply with all the covenants.
−Removed: In the event we violate a covenant, Hitachi may limit or demand all amounts due under the credit facility at any time, including upon an event of default outstanding, if any, to be due and payable.
−Removed: If this occurs and if we have outstanding obligations and are not able to repay, Hitachi could require us to apply all of our available cash to repay the debt amounts and could then proceed against the underlying collateral.
+Added: In the event we violate a covenant, SLR may limit or demand all amounts due under the credit facility at any time, including upon an event of default outstanding, if any, to be due and payable.
+Added: If this occurs and if we have outstanding obligations and are not able to repay, SLR could require us to apply all of our available cash to repay the debt amounts and could then proceed against the underlying collateral.
Should this occur, we cannot assure you that our assets would be sufficient to repay our debt in full, we would be able to borrow sufficient funds to refinance the debt.
28 unchanged sentences
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.