Core Viewpoint - IZEA Worldwide, Inc. has initiated a modified "Dutch auction" tender offer to repurchase up to $8,700,000 of its common stock, indicating a strategic move to enhance shareholder value [1][2]. Offer Details - The tender offer price ranges from $2.30 to $2.80 per share, with the maximum price set at approximately 120% of the 90-day volume-weighted average purchase price of $2.29 per share as of May 12, 2025 [2]. - The offer period starts on May 16, 2025, and will conclude at 5:00 p.m. Eastern Time on June 16, 2025, unless extended or terminated [2]. Tender Process - Stockholders can tender some or all of their shares within the specified price range, and the lowest single per-share price will be determined based on the number of shares tendered [3]. - All shares accepted in the offer will be purchased at the same price, irrespective of the tendering price [3]. Regulatory Compliance - The offer is being conducted in accordance with an Offer to Purchase and related materials that will be filed with the Securities and Exchange Commission (SEC) [4]. Company Overview - IZEA Worldwide, Inc. is an influencer marketing company focused on creating solutions for the Creator Economy, having facilitated nearly 4 million collaborations between brands and creators since its inception in 2006 [6].

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was approximately $8 million, representing a 14.6% increase compared to the same quarter in the prior year [4] - Managed services revenue totaled $7.9 million, growing 18.1% year-over-year, while bookings declined to $7.5 million from $9.3 million in the prior year [5] - SaaS revenue decreased to $60,953 from $256,341 in the same quarter of the previous year, reflecting a strategic decision to reduce marketing support for SaaS offerings [6] - Net loss for Q1 2025 was $142,800, or negative $0.01 per share, compared to a net loss of $3.3 million, or negative $0.20 per share, in Q1 2024 [8] - Adjusted EBITDA was negative $76,850, an improvement from negative $3.4 million in the prior year quarter [8] - Cash and investments as of March 31, 2025, totaled $52.2 million, an increase of $1.1 million from the beginning of the quarter [9] Business Line Data and Key Metrics Changes - Managed services revenue from continuing operations, excluding $500,000 from HUSU in the prior year, rose 27.6% year-over-year [5] - Managed services backlog, representing unrecognized revenue from ongoing contracts, totaled $14.9 million as of March 31, 2025 [5] Company Strategy and Development Direction - The company has committed to accelerating its path to profitability by simplifying its organizational structure and focusing on high-growth market segments [12][13] - A strategic decision was made to exit international markets to reduce geopolitical and currency risks, focusing instead on the U.S. market [12] - The company aims to enhance its managed services and improve its service offerings while exploring organic growth and acquisition opportunities [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, noting that the sales pipeline is growing with higher quality clients and larger deal sizes [24][25] - Despite economic uncertainties, management sees positive signs in long-term growth and believes that the current marketing category offers more controllable spending options for clients [25][26] - The company plans to continue its $10 million share repurchase program, indicating confidence in its undervalued shares [16] Other Important Information - The company announced a tender offer to repurchase the remaining 8.7 million shares of its previously announced $10 million stock buyback program [4][10] - The tender offer is set to commence on May 16, 2025, with a pricing range based on the company's 90-day volume-weighted average price [10] Q&A Session Summary Question: What are the expected gross margins for the remainder of the year? - Management indicated that margins are expected to remain stable, with some fluctuations based on service mix [19][20] Question: Are cost-cutting measures complete, and is the current cost structure sustainable? - Management confirmed that some cost reductions are structural, and while they may hire more staff, the current cost structure is deemed sustainable [21][22] Question: Is there evidence of clients pulling back on advertising spending due to economic concerns? - Management noted that while there is uncertainty, their pipeline is growing, and they are engaging with higher-end clients, indicating a positive outlook [24][25] Question: What is the status of M&A opportunities? - Management is opportunistically exploring M&A opportunities but is cautious about ensuring organizational readiness for integration [28][29]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was approximately $8,000,000, representing a 14.6% increase compared to the same quarter in the prior year [4] - Managed services revenue totaled $7,900,000, growing 18.1% year-over-year, while bookings declined to $7,500,000 from $9,300,000 in the prior year [5] - Net loss for Q1 2025 was $142,800, or negative $0.01 per share, compared to a net loss of $3,300,000, or negative $0.20 per share, in Q1 2024 [8] - Adjusted EBITDA was negative $76,850, an improvement from negative $3,400,000 in the prior year quarter [8] - Cash and investments as of March 31, 2025, totaled $52,200,000, an increase of $1,100,000 from the beginning of the quarter [9] Business Line Data and Key Metrics Changes - SaaS revenue decreased to $60,953 in Q1 2025 from $256,341 in the same quarter of the prior year, reflecting a strategic decision to reduce marketing support for SaaS offerings [6] - Total cost of revenue was $4,400,000, or 55.2% of revenue, compared to $4,000,000, or 57.1% of revenue, in the prior year quarter [6] Market Data and Key Metrics Changes - The company exited international markets to focus on the U.S., reducing exposure to geopolitical, tariff, and currency risks [12] - The sales pipeline is trending upward with larger opportunities from higher quality clients [14] Company Strategy and Development Direction - The company is committed to accelerating its path to profitability by simplifying its organizational structure and focusing on high-growth market segments [12][13] - A new go-to-market model has been implemented, emphasizing managed services and enhancing service offerings [13][14] - The company plans to continue its $10,000,000 share repurchase program, believing its shares are undervalued [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledges uncertainty in the economy but reports a growing pipeline and increasing quality of client engagements [25] - There are indications that some clients are viewing the company's services as a more controllable marketing spend compared to traditional advertising [26] - The company is exploring M&A opportunities but is cautious about valuations and ensuring organizational readiness for integration [29][30] Other Important Information - The company announced a tender offer to repurchase up to 8,700,000 shares, which is part of its ongoing buyback program [10] - The company has no debt on its balance sheet, positioning it well for future growth and acquisition opportunities [9][11] Q&A Session Summary Question: Can you elaborate on gross margins for the remainder of the year? - Management indicated that margins are expected to be stable, with some fluctuations based on service mix [19][20] Question: Are cost-cutting measures complete? - Management stated that while some costs are structural, they are positioned to manage expenses effectively while still aiming for growth [20][21] Question: Is there evidence of clients pulling back on advertising dollars? - Management noted that while there is uncertainty, the pipeline is growing, and clients are increasingly engaging in substantial conversations [25][26] Question: What about M&A opportunities? - Management is cautiously exploring M&A opportunities and ramping up relationships with investment bankers, ensuring readiness for potential integrations [29][30]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) IZEA Worldwide, Inc. reported a revenue increase to **$8.0 million** and a significant reduction in net loss to **$0.14 million** for Q1 2025, with cash and cash equivalents rising to **$50.6 million** Unaudited Consolidated Balance Sheets Consolidated Balance Sheet Summary | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $50,612,348 | $44,644,468 | | Accounts receivable, net | $4,269,114 | $7,781,824 | | Total current assets | $57,161,841 | $60,030,040 | | Total assets | $59,341,031 | $62,220,274 | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $11,069,144 | $13,434,521 | | Total liabilities | $11,069,144 | $13,438,555 | | Total stockholders' equity | $48,271,887 | $48,781,719 | | Total liabilities and stockholders' equity | $59,341,031 | $62,220,274 | Unaudited Consolidated Statements of Operations Consolidated Statement of Operations Summary | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenue | $7,968,363 | $6,952,883 | | Total costs and expenses | $8,624,215 | $11,011,538 | | Loss from operations | ($655,852) | ($4,058,655) | | Net loss | ($142,800) | ($3,265,850) | | Basic and diluted loss per common share | ($0.01) | ($0.20) | Unaudited Consolidated Statements of Cash Flows Consolidated Statement of Cash Flows Summary | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $2,008,132 | ($3,341,872) | | Net cash provided by investing activities | $4,715,817 | $4,971,123 | | Net cash used in financing activities | ($618,804) | ($37,233) | | Net increase in cash and cash equivalents | $5,967,880 | $1,592,018 | | Cash and cash equivalents, end of period | $50,612,348 | $39,035,332 | [Notes to the Unaudited Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Unaudited%20Consolidated%20Financial%20Statements) - The company's primary revenue sources are Managed Services (custom content, influencer marketing) and SaaS Services (platform access, transaction fees), with revenue recognized based on the five-step model of ASC 606[44](index=44&type=chunk)[45](index=45&type=chunk) - For the three months ended March 31, 2025, the company repurchased **401,480 shares** at an average price of **$2.61 per share**, totaling **$1.0 million** under its active share repurchase program[93](index=93&type=chunk) Revenue by Service Type | Service Type | Q1 2025 Revenue | Q1 2024 Revenue | | :--- | :--- | :--- | | Managed Services | $7,907,410 | $6,696,542 | | SaaS Services | $60,953 | $256,341 | | **Total Revenue** | **$7,968,363** | **$6,952,883** | Revenue by Geographic Region | Region | Q1 2025 Revenue | Q1 2024 Revenue | | :--- | :--- | :--- | | North America | $7,628,344 | $5,490,415 | | APAC | $237,827 | $1,027,859 | | Other | $102,192 | $434,609 | | **Total** | **$7,968,363** | **$6,952,883** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operation) Management attributes **15% revenue growth** and a significant reduction in net loss to **$0.1 million** in Q1 2025 to increased Managed Services and cost reductions, maintaining **$52.2 million** in cash and no debt [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Q1 2025 vs Q1 2024 Results of Operations | Metric | Q1 2025 | Q1 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $7,968,363 | $6,952,883 | $1,015,480 | 15% | | Total costs and expenses | $8,624,215 | $11,011,538 | ($2,387,323) | (22)% | | Loss from operations | ($655,852) | ($4,058,655) | $3,402,803 | (84)% | | Net loss | ($142,800) | ($3,265,850) | $3,123,050 | (96)% | - Managed Services revenue increased by **18% YoY**, with an increase from ongoing operations of **28%** when excluding **$0.5 million** revenue from the divested Hoozu unit in Q1 2024[155](index=155&type=chunk) - SaaS Services revenue decreased by **76% YoY** to **$60,953**, reflecting a strategic shift away from SaaS products[156](index=156&type=chunk) - Sales and marketing expenses decreased by **63%** (**$1.9 million**) due to lower payroll costs from the December 2024 workforce reduction and a pause in advertising spending[157](index=157&type=chunk)[158](index=158&type=chunk) - General and administrative expenses decreased by **22%** (**$0.8 million**) due to lower employee-related costs, reduced contractor use, and lower professional service fees[159](index=159&type=chunk) [Key Metrics](index=33&type=section&id=Key%20Metrics) - Managed Services Bookings, representing all sales orders received less cancellations, was **$7.5 million** for Q1 2025, compared to **$9.3 million** for Q1 2024[164](index=164&type=chunk) - The average time for bookings to convert to revenue improved from a **9-month average** to approximately **7.5 months** in the latter half of 2023[164](index=164&type=chunk) [Non-GAAP Financial Measure](index=33&type=section&id=Non-GAAP%20Financial%20Measure) Reconciliation of Net Loss to Adjusted EBITDA | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net loss from operations | ($142,800) | ($3,265,850) | | **Adjusted EBITDA** | **($76,850)** | **($3,421,661)** | | Adjusted EBITDA as a % of Revenue | (1.0)% | (49.2)% | [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) - The company had cash and cash equivalents of **$50.6 million** as of March 31, 2025, an increase of **$6.0 million** from December 31, 2024[172](index=172&type=chunk) Cash Flow Summary | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash from Operating activities | $2,008,132 | ($3,341,872) | | Net cash from Investing activities | $4,715,817 | $4,971,123 | | Net cash used for Financing activities | ($618,804) | ($37,233) | - The company's balance sheet includes **$52.2 million** in cash and short-term investments with no outstanding debt[175](index=175&type=chunk) - A Strategic and Capital Allocation Committee has been established by the Board to review business strategies and formulate a plan to achieve sustainable profitability[178](index=178&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable to the company as a smaller reporting entity - Not applicable to smaller reporting companies[182](index=182&type=chunk) [Item 4. Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - Management concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective[185](index=185&type=chunk) - There were no changes in internal control over financial reporting during the fiscal quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[189](index=189&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) As of May 13, 2025, the company is not involved in any legal proceedings or claims with a material adverse effect - As of May 13, 2025, the company is not party to any legal proceedings or claims that it believes would have a material adverse effect[192](index=192&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have occurred since the Annual Report on Form 10-K for fiscal year 2024 - There have been no material changes to the risk factors described in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024[193](index=193&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section is not applicable - Not applicable[194](index=194&type=chunk) [Item 3. Defaults Upon Senior Securities](index=38&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section is not applicable - Not applicable[195](index=195&type=chunk) [Item 4. Mine Safety Disclosures](index=38&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable - Not applicable[196](index=196&type=chunk) [Item 5. Other Information](index=38&type=section&id=Item%205.%20Other%20Information) This section is not applicable - Not applicable[197](index=197&type=chunk) [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the quarterly report, including corporate governance documents and required Sarbanes-Oxley Act certifications - Lists corporate governance documents such as Articles of Incorporation and Bylaws[199](index=199&type=chunk) - Includes the Rights Agreement dated May 28, 2024[199](index=199&type=chunk) - Contains required CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[199](index=199&type=chunk)

IZEA Reports Q1 2025 Revenue from Core Operations of $8.0 million, up 23% Improved Net Income by $3.1 million, achieving $(0.01) per share, Cash Positive ORLANDO, Fla. (May 13, 2025) - IZEA Worldwide, Inc. (NASDAQ: IZEA), a leading influencer marketing company that makes Creator Economy solutions for marketers, reported its financial and operational results for the first quarter ended March 31, 2025. Q1 2025 Financial Summary Compared to Q1 2024 Q1 2025 Highlights * Adjusted EBITDA is a non-GAAP financial m ...

Core Viewpoint - IZEA Worldwide, Inc. plans to initiate a modified "Dutch auction" tender offer to repurchase up to $8,700,000 of its common stock [1][2]. Group 1: Tender Offer Details - The tender offer will purchase shares at a price between $2.30 and $2.80 per share, with the maximum price being approximately 120% of the 90-day volume-weighted average purchase price of $2.29 per share as of May 12, 2025 [2]. - The offer will commence on May 16, 2025, and will expire at 5:00 p.m. Eastern Time on June 16, 2025, unless extended or terminated [2]. - Stockholders can tender some or all of their shares at a price within the specified range, and all accepted shares will be purchased at the same price, determined by the lowest single per-share price that allows the company to purchase up to the maximum dollar amount [3]. Group 2: Company Overview - IZEA Worldwide, Inc. is an influencer marketing company focused on creating solutions for the Creator Economy, having facilitated nearly 4 million collaborations between brands and creators since its inception in 2006 [6].

Core Insights - IZEA Worldwide, Inc. reported a strong performance in Q1 2025, with a 15% increase in total revenue to $8.0 million compared to $7.0 million in Q1 2024, indicating effective implementation of its new strategies [5][8] - The company nearly broke even with a net loss of $0.1 million, a significant improvement from a net loss of $3.3 million in the same quarter last year [9][22] - Adjusted EBITDA improved to $(0.1) million from $(3.4) million year-over-year, showcasing progress towards profitability [9][26] Financial Performance - Total revenue increased by 15% to $8.0 million in Q1 2025, driven by a 28% rise in revenue from Managed Services customers, which reached $7.9 million [5][8] - Revenue from SaaS Services saw a significant decline of 76% to $60,953 due to paused marketing efforts during the business transformation [5][8] - Total costs and expenses decreased by 22% to $8.6 million, down from $11.0 million in the prior-year quarter, reflecting cost-cutting measures [8][22] Operational Highlights - The company generated cash in Q1 2025, with cash, cash equivalents, and investments totaling $52.2 million, an increase of $1.1 million year-to-date [10][22] - Managed Services bookings totaled $7.5 million, compared to $9.3 million in the previous year, indicating a focus on core operations [8] - The company successfully recruited Frank Carvalho as EVP Sales and Marketing to enhance customer growth and marketing innovation [8] Strategic Initiatives - IZEA launched a new homepage for IZEA.com, emphasizing its service offerings and key industry verticals [8] - The company secured new business from notable clients such as Nestle, Acer, and Jeep, further solidifying its market position [8] - A stock repurchase program was initiated, with 180,486 shares purchased at an average price of $2.44, totaling an investment of $0.4 million in Q1 2025 [11]

Toll-free dial-in number: 1-877-407-4018 ORLANDO, Fla., May 06, 2025 (GLOBE NEWSWIRE) -- IZEA Worldwide, Inc. (NASDAQ: IZEA), a leading influencer marketing company that makes Creator Economy solutions for marketers, announced today that its conference call to review and discuss its first quarter 2025 financial results will begin at 5:00 p.m. Eastern Daylight Time on May 13, 2025. IZEA's Chief Executive Officer Patrick Venetucci and Chief Financial Officer Peter Biere will host the call, followed by a quest ...

Financial Data and Key Metrics Changes - Total revenue for 2024 was $35.9 million, a slight decline of 1% from $36.2 million in 2023 [7] - Managed Services revenue for 2024 was $35.1 million, down 2% from 2023, but grew 16.3% when excluding a non-recurring customer and divested revenue [8][11] - Net loss for 2024 was $18.9 million, an increase of $11.5 million compared to a net loss of $7.4 million in 2023 [12] - Adjusted EBITDA for Q4 2024 was negative $1.5 million, compared to negative $1.1 million in Q4 2023 [19] Business Line Data and Key Metrics Changes - Total revenue for Q4 2024 was approximately $11 million, a 23.7% increase year-over-year [13] - Managed Services revenue in Q4 2024 was $10.9 million, growing 24% compared to the prior year quarter [13] - Managed Services bookings grew about 45% to $11 million in Q4 2024 compared to $7.6 million in Q4 2023 [14] - SaaS Services revenue totaled $117,000 in Q4 2024, slightly up from $111,000 in the prior year quarter [15] Market Data and Key Metrics Changes - The company divested its Australian subsidiary, Hoozu, which accounted for $3.4 million in 2024 revenue but was unprofitable [11] - The focus is shifting to an "America-first" strategy to mitigate geopolitical, tariff, and currency risks [24] Company Strategy and Development Direction - The company is simplifying its product offerings to enhance customer experience and focusing on high-growth market segments [25] - A strategic reset was initiated in Q4 2024, emphasizing cost structure improvements and a path to breakeven on a cash basis [26] - The share buyback commitment was increased from $5 million to $10 million, reflecting confidence in the company's value [23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's future and the ability to deliver additional value to stakeholders [30] - The strategic actions taken in Q4 are expected to accelerate the path to profitability [29] Other Important Information - The company had $51.1 million in cash and investments as of December 31, 2024, a decrease of $3.3 million from the prior year quarter [19] - There is no debt on the balance sheet, positioning the company well for future growth and acquisition opportunities [21] Q&A Session Summary - No specific questions or answers were documented in the provided content, indicating the end of the Q&A session without notable inquiries or responses [32]

Revenue and Financial Performance - Managed Services accounted for approximately 97.7% and 98.7% of the company's revenue during the twelve months ended December 31, 2024 and 2023, respectively[39]. - Total revenue for the twelve months ended December 31, 2024, was $35,881,010, a decrease of 1% from $36,214,598 in 2023[180]. - Managed Services revenue decreased by $682,662, or 2%, to $35,058,023, primarily due to the discontinuation of a significant customer relationship[181]. - SaaS Services revenue increased by $349,074, or 74%, to $822,987, driven by a growing number of licensees[182]. - Net loss for the twelve months ended December 31, 2024, was $18,852,261, an increase of $11,502,901, or 157%, from the prior year[192]. - The company reported a net loss from operations of $(18.9) million in 2024, significantly impacted by goodwill write-downs and one-time losses[211]. - Cash and cash equivalents increased to $44.6 million as of December 31, 2024, from $37.4 million in 2023, an increase of $7.2 million[205]. - Net cash used for operating activities was $(11.5) million in 2024, driven by cash flow funding and increases in net working capital[206]. - Managed services revenue, adjusting for the loss of a major customer and non-recurring revenues, was approximately $31.7 million, reflecting a 16.3% year-over-year increase[210]. - The company has a strong balance sheet with $51.1 million in cash and short-term investments and no debt[208]. Market and Industry Trends - The total global addressable market of the creator economy is estimated to grow to $480 billion by 2027[19]. - Marketing spend on influencer marketing tripled between 2019 and 2023 to more than $6 billion, with projections for continued growth[19]. - The company faces intense competition in the influencer and content marketing market, which may lead to reduced pricing, margins, and revenue due to lost market share[84]. - A potential ban on TikTok in the U.S. could materially impact advertising and e-commerce, negatively affecting the market for the company's services[95]. Product and Service Development - The company launched The Creator Marketplace in October 2022, enhancing functionality and allowing marketers to search a database of influencers[22]. - In January 2023, the company launched IZEA Flex, a flagship platform for enterprise influencer marketing, improving processes and workflows[23]. - Form AI, unveiled in June 2023, integrates advanced AI models to enhance content production efficiency while lowering costs for marketers and creators[30]. - The company launched the Marketplace on IZEA.com in October 2022 and Flex in January 2023, replacing previous platforms with upgraded functionality[89]. Operational Challenges and Risks - The company operates with a remote workforce, which presents operational challenges and increased security risks[71]. - The complexity of accounting practices may lead to significant fluctuations in reported revenue, affecting investor expectations and stock price[74]. - The company must continue to attract and retain software customers to increase software-related revenue and achieve profitability[90]. - The inability to maintain effective internal controls over financial reporting could impair the company's ability to produce accurate financial statements, affecting investor confidence[76]. - Security breaches could expose the company to legal and financial liabilities, damaging its reputation and user confidence in its platforms[108]. - The presence of defects in technology platforms could necessitate suspending services, adversely affecting business and reputation[109]. Legal and Regulatory Environment - The company is subject to various federal and state laws regarding privacy and data protection, which could significantly affect its business practices and operations[49]. - Compliance with evolving privacy laws, such as the EU's GDPR, could incur substantial operational costs and impact business practices, with potential fines up to €20 million or 4% of annual global revenues for noncompliance[102]. - The company must navigate the complexities of regulatory scrutiny on targeted advertising practices, which could affect its business model and revenue streams[105]. Shareholder and Stock Information - The company regained compliance with Nasdaq's Bid Price Rule in 2023 by executing a 4-for-1 reverse stock split after falling out of compliance in 2022[122]. - The company’s common stock may be delisted from Nasdaq if it fails to meet continued listing requirements, which could reduce liquidity and investor confidence[123]. - The company has approximately 104 shareholders of record as of March 25, 2025[158]. - The company has never paid cash dividends and does not anticipate doing so in the foreseeable future[159]. - The company authorized a stock repurchase program of up to $10.0 million, with purchases commencing on November 1, 2024[162]. Employee and Workforce Management - The company had 110 full-time employees and 1 part-time employee as of December 31, 2024, with 32 employees notified of termination effective January 2, 2025[61]. - The client development team has shifted strategies to reduce costs and enhance efficiencies, focusing on North American markets[32]. - The company may experience difficulties in attracting and retaining qualified personnel, which could impact its ability to manage operations and achieve objectives[119]. Financial Management and Capital Structure - The company may need to raise capital through new financings, which could include equity financing that may dilute existing shareholders[66]. - The company has incurred significant net losses and negative cash flow from operations for most periods since inception, raising concerns about future profitability[65]. - The company has engaged third-party service providers to enhance its cybersecurity risk mitigation efforts[147]. - The company has developed a cybersecurity program based on internationally recognized frameworks, including SOC-2 compliance[144].