[Executive Summary](index=1&type=section&id=Executive%20Summary) [Q2 2025 Performance Overview](index=1&type=section&id=Q2%202025%20Performance%20Overview) Springbig reported a second consecutive quarter of positive Adjusted EBITDA and a 6% quarter-over-quarter revenue increase in Q2 2025, alongside a significant year-on-year improvement in cash flow from operations, demonstrating tangible progress in its turnaround - Second consecutive quarter with positive **Adjusted EBITDA**, increasing year-to-date **Adjusted EBITDA** to **$0.6 million**, representing a **$0.1 million** year-on-year improvement[5](index=5&type=chunk) - **6%** quarter-over-quarter increase in revenue to **$5.8 million**[5](index=5&type=chunk) - Cash flows provided from operations of **$0.2 million**, an improvement of **$2.1 million** year-on-year[5](index=5&type=chunk) [Half Year 2025 Performance Overview](index=1&type=section&id=Half%20Year%202025%20Performance%20Overview) For the first half of 2025, Springbig achieved positive Adjusted EBITDA of $0.6 million, a $0.1 million improvement year-over-year, and positive cash flow from operations, despite an 11% decline in revenue due to market headwinds. This was supported by targeted cost reductions, including a $3.2 million reduction in future lease obligations - **Adjusted EBITDA** of **$0.6 million** for the first half of 2025 reflects a **$0.1 million** improvement compared to the same period last year[3](index=3&type=chunk) - Reporting year-over-year improvements in both positive **Adjusted EBITDA** and positive **cash flow from operations** for the six months ended June 30, 2025[3](index=3&type=chunk) - Achieved despite an **11% decline** in revenue amid ongoing headwinds in regulated markets[3](index=3&type=chunk) - Operating expenses have decreased by **12%** year-over-year, excluding one-time charges, including a new lease that reduced future lease obligation by **$3.2 million**[3](index=3&type=chunk) [Strategic Initiatives & Outlook](index=1&type=section&id=Strategic%20Initiatives%20%26%20Outlook) Springbig's new leadership is focused on urgent and disciplined execution, leveraging its AI-powered MarTech platform to enhance customer retention and drive ROI. The company is committed to strategic cost cuts and maintaining financial discipline to build a durable financial foundation and sustain Adjusted EBITDA growth in the second half of 2025 - Springbig's new leadership team is executing with urgency and discipline, delivering tangible progress in turnaround[2](index=2&type=chunk) - Through **AI-powered MarTech and loyalty SaaS platform**, helps regulated-market businesses increase customer retention, drive measurable ROI, and grow revenue[2](index=2&type=chunk) - Company remains focused on sustaining **Adjusted EBITDA growth** and building a durable financial foundation to support long-term shareholder value[8](index=8&type=chunk) [Company Overview](index=2&type=section&id=About%20Springbig) [Business Description](index=2&type=section&id=Business%20Description) Springbig is a market-leading AI software platform specializing in customer loyalty and marketing automation solutions for retailers and brands in regulated industries across the U.S. and Canada, primarily utilizing SMS marketing, email, customer feedback, and loyalty programs - Springbig is a market-leading, **AI software platform** providing **customer loyalty and marketing automation solutions** to retailers and brands in the U.S. and Canada[11](index=11&type=chunk) - Springbig's **AI MarTech platform** connects consumers with retailers and brands, primarily through **SMS marketing**, as well as **emails, customer feedback system, and loyalty programs**[11](index=11&type=chunk) - Offers **marketing automation solutions** that provide for consistency of customer communication, thereby driving **customer retention** and **retail foot traffic**[11](index=11&type=chunk) [Financial Performance](index=1&type=section&id=Financial%20Performance) [Q2 2025 Financial Results](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Results) In Q2 2025, Springbig reported a revenue of $5.8 million, a decrease from the prior year but a 6% increase QoQ. Subscription revenue constituted 84% of total revenue. Gross profit margin was strong at 74%, but operating expenses, including one-time costs, increased, leading to a net loss of $(1.1) million Q2 2025 Key Financials (YoY Comparison) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (YoY) | | :--------------------- | :-------------------- | :-------------------- | :----------- | | Revenue | $5.8 | $6.4 | -9.4% | | Subscription Revenue | $4.9 (84% of total) | $5.5 | -10.9% | | Gross Profit | $4.3 (74% margin) | $4.7 (73% margin) | -8.5% | | Operating Expenses | $5.1 | $4.7 | +7.0% | | Net Loss | $(1.1) | $(0.6) | +83.3% | | Adjusted EBITDA | $0.3 | $0.3 | 0.0% | [Half Year 2025 Financial Results](index=2&type=section&id=Half%20Year%202025%20Financial%20Results) For the first half of 2025, Springbig's revenue was $11.4 million, down from $12.8 million in the prior year, with subscription revenue making up 86%. Gross profit margin was 76%. Operating expenses increased slightly, resulting in a net loss of $(1.9) million, though Adjusted EBITDA improved to $0.6 million H1 2025 Key Financials (YoY Comparison) | Metric | H1 2025 (in millions) | H1 2024 (in millions) | Change (YoY) | | :--------------------- | :-------------------- | :-------------------- | :----------- | | Revenue | $11.4 | $12.8 | -10.9% | | Subscription Revenue | $9.7 (86% of total) | $10.6 | -8.4% | | Gross Profit | $8.6 (76% margin) | $9.4 (73% margin) | -8.5% | | Operating Expenses | $9.8 | $9.7 | +1.0% | | Net Loss | $(1.9) | $(0.2) | +850.0% | | Adjusted EBITDA | $0.6 | $0.5 | +20.0% | | Basic Net Loss Per Share | $(0.04) | $(0.01) | +300.0% | [Financial Outlook](index=2&type=section&id=Financial%20Outlook) Springbig anticipates entering the second half of 2025 with positive momentum, strengthened by improved revenue quality, disciplined operations, and expanding profitability, with a strategic focus on sustaining Adjusted EBITDA growth and building a robust financial foundation for long-term shareholder value - Springbig enters the second half of 2025 with positive momentum, strengthened by improved revenue quality, disciplined operations, and expanding profitability[8](index=8&type=chunk) - The company remains focused on sustaining **Adjusted EBITDA growth** and building a durable financial foundation to support long-term shareholder value[8](index=8&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of June 30, 2025, shows a decrease in total assets and total liabilities compared to December 31, 2024, with a continued stockholders' deficit. Key changes include a significant reduction in the Right of Use asset and operating lease liabilities Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :-------------- | :---------------- | | Total Current Assets | $4,134 | $3,864 | | Right of Use Asset | $470 | $2,757 | | Total Assets | $4,629 | $6,825 | | Total Current Liabilities | $6,966 | $5,670 | | Total Liabilities | $15,956 | $16,596 | | Total Stockholders' Deficit | $(11,327) | $(9,771) | [Condensed Consolidated Statement of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Operations) The statement of operations for Q2 and H1 2025 shows a decline in net revenues and an increase in net loss compared to the prior year periods. Gross profit margins remained high, but increased operating expenses and other losses contributed to the higher net loss Condensed Consolidated Statement of Operations Highlights (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | | Net Revenues | $5,837 | $6,422 | $11,350 | $12,818 | | Gross Profit | $4,338 | $4,697 | $8,645 | $9,377 | | Total Operating Expenses | $5,064 | $4,754 | $9,799 | $9,716 | | Loss from Operations | $(726) | $(57) | $(1,154) | $(339) | | Net Loss | $(1,141) | $(647) | $(1,892) | $(230) | | Basic and Diluted Net Loss per Share | $(0.02) | $(0.01) | $(0.04) | $(0.01) | [Statement of Cash Flows](index=6&type=section&id=Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, Springbig generated $0.2 million in cash from operating activities, a significant improvement from a net cash outflow in the prior year. Investing activities remained minimal, and financing activities did not provide cash in 2025, leading to a net increase in cash and cash equivalents Condensed Consolidated Statement of Cash Flows Highlights (in thousands) | Metric | H1 2025 | H1 2024 | | :------------------------------------ | :------ | :------ | | Net cash provided by (used in) operating activities | $218 | $(1,919) | | Net cash used in investing activities | $(14) | $(63) | | Net cash provided by financing activities | $0 | $2,375 | | Net increase in cash and cash equivalents | $204 | $393 | | Cash and cash equivalents, at end of period | $1,383 | $724 | [Non-GAAP Financial Measures](index=2&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) [Definition and Rationale](index=2&type=section&id=Definition%20and%20Rationale) Springbig uses non-GAAP financial measures, specifically EBITDA and Adjusted EBITDA, to provide investors with additional information. These metrics are crucial for management in evaluating operating performance, planning, and making strategic decisions, offering improved comparability between fiscal periods, despite their inherent limitations - **EBITDA** and **Adjusted EBITDA** are **non-GAAP financial measures** calculated as net income before interest, taxes, depreciation, and amortization, with further adjustments for unusual/infrequent costs[14](index=14&type=chunk) - These metrics are key measures used by management to evaluate operating performance, generate future operating plans, and make strategic decisions[15](index=15&type=chunk) - Limitations include not reflecting cash capital expenditure requirements, changes in working capital needs, or tax payments[16](index=16&type=chunk)[17](index=17&type=chunk) [Reconciliation of Net Loss to EBITDA and Adjusted EBITDA](index=7&type=section&id=Reconciliation%20of%20net%20loss%20to%20non-GAAP%20EBITDA%20and%20Adjusted%20EBITDA) The reconciliation table details the adjustments made to net loss to arrive at EBITDA and Adjusted EBITDA for Q2 and H1 2025 and 2024. Adjusted EBITDA for H1 2025 was $0.61 million, an improvement from $0.48 million in H1 2024 Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | | Net (loss) income | $(1,141) | $(647) | $(1,892) | $(230) | | EBITDA | $(828) | $(58) | $(1,223) | $1,284 | | Adjusted EBITDA | $285 | $330 | $610 | $480 | [Legal and Investor Information](index=3&type=section&id=Legal%20and%20Investor%20Information) [Forward-Looking Statements](index=3&type=section&id=Forward%20Looking%20Statements) This section serves as a standard disclaimer, indicating that certain statements in the press release are forward-looking and subject to various risks and uncertainties, and the company does not commit to updating them unless legally required - Statements are '**forward-looking statements**' subject to risks and uncertainties, including those described in the Company's Form 10-K[13](index=13&type=chunk) - Readers are cautioned not to put undue reliance on **forward-looking statements**, and the Company assumes no obligation to update or revise them other than as required by applicable law[13](index=13&type=chunk) [Investor Relations Contact](index=3&type=section&id=Investor%20Relations%20Contact) Provides the contact details for investor relations, facilitating communication between the company and its investors - Investor Relations Contact: **Claire Bollettieri, VP of Investor Relations, ir@springbig.com**[17](index=17&type=chunk)

Core Insights - SpringBig Holdings, Inc. reported financial results for Q2 2025, highlighting a turnaround with positive EBITDA momentum and improved cash flow [1][2][3] - The company is focused on enhancing customer retention and driving ROI through its AI-powered MarTech solutions [2][3] Financial Performance - Q2 2025 Adjusted EBITDA was positive at $0.3 million, consistent with the prior year, while year-to-date Adjusted EBITDA reached $0.6 million, reflecting a $0.1 million improvement year-over-year [8][9] - Revenue for Q2 2025 was $5.8 million, a 6% increase from Q1 2025 but a decline from $6.4 million in Q2 2024 [8][9] - Subscription revenue constituted 84% of total revenue at $4.9 million, down from $5.5 million in the previous year [9] - Operating expenses increased by 7% year-over-year to $5.1 million, while net loss for Q2 was $(1.1) million compared to $(0.6) million in the prior year [9][21] Operational Efficiency - The company achieved a cash flow from operations of $0.2 million, an improvement of $2.1 million year-over-year [8] - SpringBig has implemented cost reductions, including renegotiating vendor contracts and securing a more favorable lease, which reduced future lease obligations by $3.2 million [3][9] Market Position and Outlook - SpringBig is positioned to remain a leading solution in the AI-powered MarTech industry, focusing on long-term value creation for clients and shareholders [2][6] - The company enters the second half of 2025 with positive momentum, aiming to sustain Adjusted EBITDA growth and build a durable financial foundation [6][8]

Part I – Financial Information [Forward Looking Statements](index=4&type=section&id=Forward%20Looking%20Statements) This section cautions that forward-looking statements are subject to risks and uncertainties, and actual results may differ materially, with no obligation to update unless legally required - Forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and assumptions that are difficult to predict[9](index=9&type=chunk) - Factors that could cause actual results to differ materially include trends in regulated industries, market size, growth prospects, new product offerings, security prices, ability to implement business plans, and other SEC-filed risks[10](index=10&type=chunk)[12](index=12&type=chunk) [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents SpringBig Holdings, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, operations, equity changes, cash flows, and explanatory notes - Financial statements are unaudited and prepared in conformity with SEC rules for Form 10-Q, not including all disclosures necessary for a complete GAAP presentation[34](index=34&type=chunk) - The Company has incurred losses, resulting in an **accumulated deficit of approximately $40.3 million** as of June 30, 2025, and a **working capital deficit of $2.8 million**. Management estimates sufficient liquidity for the next twelve months[36](index=36&type=chunk)[38](index=38&type=chunk) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (in thousands) | ASSETS (in thousands) | June 30, 2025 (unaudited) | December 31, 2024 | | :-------------------- | :------------------------ | :---------------- | | Cash and cash equivalents | $ 1,383 | $ 1,179 | | Accounts receivable, net | 2,136 | 2,213 | | Contract assets | 162 | 188 | | Prepaid expenses and other current assets | 453 | 284 | | **Total current assets** | **4,134** | **3,864** | | Right of use asset | 470 | 2,757 | | Property and equipment, net | 25 | 204 | | **Total assets** | **$ 4,629** | **$ 6,825** | | **LIABILITIES AND STOCKHOLDERS' DEFICIT (in thousands)** | | | | Accounts payable | $ 806 | $ 924 | | Accrued expenses and other current liabilities | 3,963 | 2,630 | | Deferred payroll tax credits | 1,979 | 1,751 | | Operating lease liability, current | 218 | 365 | | **Total current liabilities** | **6,966** | **5,670** | | Long-term debt, non-current | 8,730 | 8,364 | | Operating lease liability, non-current | 249 | 2,551 | | Warrant liabilities | 11 | 11 | | **Total liabilities** | **15,956** | **16,596** | | Total stockholders' deficit | (11,327) | (9,771) | | **Total liabilities and stockholders' deficit** | **$ 4,629** | **$ 6,825** | - Total assets decreased from **$6.825 million** at December 31, 2024, to **$4.629 million** at June 30, 2025[14](index=14&type=chunk) - Total liabilities decreased from **$16.596 million** at December 31, 2024, to **$15.956 million** at June 30, 2025[14](index=14&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations (in thousands, except per share data) | (in thousands, except share and per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net revenues | $ 5,837 | $ 6,422 | $ 11,350 | $ 12,818 | | Cost of revenues | 1,499 | 1,725 | 2,705 | 3,441 | | **Gross profit** | **4,338** | **4,697** | **8,645** | **9,377** | | Total operating expenses | 5,064 | 4,754 | 9,799 | 9,716 | | **Loss from operations** | **(726)** | **(57)** | **(1,154)** | **(339)** | | Interest income | 33 | 2 | 33 | 6 | | Interest expense | (317) | (544) | (640) | (1,419) | | Loss on asset disposal | (131) | - | (131) | - | | Gain on note repurchase | - | - | - | 1,573 | | Change in fair value of warrants | - | (48) | - | (51) | | **Loss before income taxes** | **$ (1,141)** | **$ (647)** | **$ (1,892)** | **$ (230)** | | Income taxes expense | - | - | - | - | | **Net loss** | **$ (1,141)** | **$ (647)** | **$ (1,892)** | **$ (230)** | | Net loss per common share: Basic and diluted | $ (0.02) | $ (0.01) | $ (0.04) | $ (0.01) | - Net revenues decreased by **9% YoY** for the three months ended June 30, 2025, and by **11% YoY** for the six months ended June 30, 2025[16](index=16&type=chunk) - Net loss increased significantly, from **$0.647 million to $1.141 million** for the three months ended June 30, 2025, and from **$0.230 million to $1.892 million** for the six months ended June 30, 2025[16](index=16&type=chunk) [Condensed Consolidated Statements of Changes in Stockholder's Deficit](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholder's%20Deficit) Condensed Consolidated Statements of Changes in Stockholder's Deficit (Three Months Ended June 30, 2025) | (in thousands) | Common Stock Shares | Common Stock Amount | Additional Paid-in Capital | Accumulated Deficit | Total | | :------------------------ | :------------------ | :------------------ | :------------------------- | :------------------ | :---------- | | Balance at March 31, 2025 | 46,470,682 | $ 4 | $ 28,829 | $ (39,192) | $ (10,359) | | Stock-based compensation | - | - | 173 | - | 173 | | Restricted stock units vesting | 388,813 | - | - | - | - | | Net loss | - | - | - | (1,141) | (1,141) | | Balance at June 30, 2025 | 46,859,495 | $ 4 | $ 29,002 | $ (40,333) | $ (11,327) | Condensed Consolidated Statements of Changes in Stockholder's Deficit (Six Months Ended June 30, 2025) | (in thousands) | Common Stock Shares | Common Stock Amount | Additional Paid-in Capital | Accumulated Deficit | Total | | :------------------------ | :------------------ | :------------------ | :------------------------- | :------------------ | :---------- | | Balance at December 31, 2024 | 46,348,351 | $ 4 | $ 28,666 | $ (38,441) | $ (9,771) | | Stock-based compensation | - | - | 336 | - | 336 | | Restricted stock units vesting | 511,144 | - | - | - | - | | Net loss | - | - | - | (1,892) | (1,892) | | Balance at June 30, 2025 | 46,859,495 | $ 4 | $ 29,002 | $ (40,333) | $ (11,327) | - Total stockholders' deficit increased from **$(9.771) million** at December 31, 2024, to **$(11.327) million** at June 30, 2025, primarily due to net losses[20](index=20&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (in thousands) | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | | Net cash provided by (used in) operating activities | $ 218 | $ (1,919) | | Net cash used in investing activities | (14) | (63) | | Net cash provided by financing activities | - | 2,375 | | **Net increase in cash and cash equivalents** | **204** | **393** | | Cash and cash equivalents, at beginning of period | 1,179 | 331 | | **Cash and cash equivalents, at end of period** | **$ 1,383** | **$ 724** | - Cash provided by operating activities significantly improved, moving from a use of **$1.919 million** in H1 2024 to a provision of **$0.218 million** in H1 2025[26](index=26&type=chunk) - Net cash provided by financing activities was **$0** in H1 2025, compared to **$2.375 million** in H1 2024, which included proceeds from convertible and term notes[26](index=26&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures for the condensed consolidated financial statements, covering business, accounting policies, financial items, debt, equity, and recent events [NOTE 1 – DESCRIPTION OF BUSINESS](index=9&type=section&id=NOTE%201%20%E2%80%93%20DESCRIPTION%20OF%20BUSINESS) - SpringBig Holdings, Inc. provides marketing and customer engagement software platforms to retailers in regulated industries (US and Canada), offering loyalty plans and rewards via internet portals and mobile apps[27](index=27&type=chunk) - The Company's common stock ("SBIG") and warrants ("SBIGW") were delisted from Nasdaq Capital Market on September 5, 2023, and now trade on the OTCQB® Venture Market and OTC Pink Market, respectively[31](index=31&type=chunk)[32](index=32&type=chunk) [NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=9&type=section&id=NOTE%202%20%E2%80%93%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) - The financial statements are prepared on a going concern basis, despite an **accumulated deficit of $40.3 million** and a **working capital deficit of $2.8 million** as of June 30, 2025. Management projects sufficient liquidity for the next twelve months[36](index=36&type=chunk)[38](index=38&type=chunk) - The Company manages its business as a single operating segment, with the CEO as the chief operating decision maker[42](index=42&type=chunk)[124](index=124&type=chunk) - Key accounting estimates include income taxes, equity-based compensation, warrants, imputed interest on operating lease liabilities, valuation of secured notes, and allowance for credit losses[40](index=40&type=chunk) [NOTE 3 – ACCOUNTS RECEIVABLE](index=12&type=section&id=NOTE%203%20%E2%80%93%20ACCOUNTS%20RECEIVABLE) Accounts Receivable, Net (in thousands) | (in thousands) | June 30, 2025 (unaudited) | December 31, 2024 | | :---------------------- | :------------------------ | :---------------- | | Accounts receivable | $ 1,521 | $ 1,945 | | Unbilled receivables | 824 | 694 | | Total receivables | 2,345 | 2,639 | | Less allowance for credit loss | (209) | (426) | | **Accounts receivable, net** | **$ 2,136** | **$ 2,213** | - Accounts receivable, net decreased from **$2.213 million** at December 31, 2024, to **$2.136 million** at June 30, 2025[52](index=52&type=chunk) - Credit loss expense was **$220,000** for the six months ended June 30, 2025, up from **$167,000** in the prior year period[52](index=52&type=chunk) [NOTE 4 – PREPAID EXPENSES AND OTHER CURRENT ASSETS](index=13&type=section&id=NOTE%204%20%E2%80%93%20PREPAID%20EXPENSES%20AND%20OTHER%20CURRENT%20ASSETS) Prepaid Expenses and Other Current Assets (in thousands) | (in thousands) | June 30, 2025 (unaudited) | December 31, 2024 | | :------------------------ | :------------------------ | :---------------- | | Prepaid insurance | $ 162 | $ 30 | | Other prepaid expense | 229 | 165 | | Deposits | 62 | 89 | | **Total** | **$ 453** | **$ 284** | - Prepaid expenses and other current assets increased from **$0.284 million** at December 31, 2024, to **$0.453 million** at June 30, 2025, primarily due to higher prepaid insurance and other prepaid expenses[55](index=55&type=chunk) [NOTE 5 – PROPERTY AND EQUIPMENT](index=13&type=section&id=NOTE%205%20%E2%80%93%20PROPERTY%20AND%20EQUIPMENT) Property and Equipment, Net (in thousands) | (in thousands) | June 30, 2025 (unaudited) | December 31, 2024 | | :---------------------------------- | :------------------------ | :---------------- | | Computer equipment | $ 380 | $ 452 | | Furniture and fixtures | 15 | 178 | | Data warehouse | 286 | 286 | | Software | 196 | 196 | | Total cost | 877 | 1,112 | | Less accumulated depreciation and amortization | (852) | (908) | | **Property and equipment, net** | **$ 25** | **$ 204** | - Property and equipment, net significantly decreased from **$0.204 million** at December 31, 2024, to **$0.025 million** at June 30, 2025, largely due to asset disposals[56](index=56&type=chunk) - The Company recorded a **loss of $131,000** on asset disposal for the three and six months ended June 30, 2025, related to vacated office space[58](index=58&type=chunk) [NOTE 6 – ACCRUED EXPENSES AND OTHER LIABILITIES](index=13&type=section&id=NOTE%206%20%E2%80%93%20ACCRUED%20EXPENSES%20AND%20OTHER%20LIABILITIES) Accrued Expenses and Other Current Liabilities (in thousands) | (in thousands) | June 30, 2025 (unaudited) | December 31, 2024 | | :------------------------------------------ | :------------------------ | :---------------- | | Accrued wages, commission and bonus | $ 409 | $ 254 | | Accrued professional fees | 46 | 110 | | Accrued interest on 2024 Secured Convertible and Term Notes | 563 | 460 | | Sales tax payable | 568 | 504 | | Deferred financial advisory fees | 1,000 | 1,000 | | Lease termination fee | 275 | - | | Technology services fee | 281 | - | | Accrued Severance | 548 | - | | Other liabilities | 273 | 302 | | **Total** | **$ 3,963** | **$ 2,630** | - Accrued expenses and other current liabilities increased by **$1.333 million** to **$3.963 million** at June 30, 2025, driven by new lease termination fees, technology services fees, and accrued severance[59](index=59&type=chunk) [NOTE 7 – RELATED PARTY TRANSACTIONS](index=14&type=section&id=NOTE%207%20%E2%80%93%20RELATED%20PARTY%20TRANSACTIONS) - Former CEO Jeffrey Harris and former CFO Paul Sykes participated in the January 2024 debt financing, purchasing 2024 Secured Convertible and Term Notes[60](index=60&type=chunk) - Jeffrey Harris and Paul Sykes sold portions of their notes to Mark Silver, a director of the Company, in January and May 2025, respectively[61](index=61&type=chunk)[62](index=62&type=chunk) - Mr. Harris stepped down as CEO on March 31, 2025, leading to litigation over a separation agreement that includes restricted stock units, revenue share from gaming customers, and a consulting fee. The Company has accrued for a settlement[64](index=64&type=chunk)[100](index=100&type=chunk) - Mr. Sykes' separation agreement was amended on May 7, 2025, accelerating his separation date and revising his bonus to **$120,000**, payable in installments, while unvested RSUs were no longer accelerated[65](index=65&type=chunk) [NOTE 8 – LONG-TERM DEBT](index=14&type=section&id=NOTE%208%20%E2%80%93%20LONG-TERM%20DEBT) Components of Outstanding Debt (in thousands) | (in thousands) | June 30, 2025 (unaudited) | December 31, 2024 | | :------------------------------------------ | :------------------------ | :---------------- | | 2024 Secured Term Notes - related parties | $ 1,386 | $ 1,386 | | 2024 Secured Term Notes | 214 | 214 | | 2024 Secured Convertible Notes - related parties | 6,274 | 5,987 | | 2024 Secured Convertible Notes | 967 | 923 | | Total | 8,841 | 8,510 | | Less deferred financing fees, net | (111) | (146) | | **Total Long-term debt, non-current** | **$ 8,730** | **$ 8,364** | - Long-term debt, net increased from **$8.364 million** at December 31, 2024, to **$8.730 million** at June 30, 2025[66](index=66&type=chunk) - The 2024 Secured Term Notes and Convertible Notes' maturity date was extended to January 23, 2027, and interest rates increased to **17%** and **13%** respectively, with potential reductions based on Adjusted EBITDA performance[68](index=68&type=chunk)[69](index=69&type=chunk) - The change to the 2024 Secured Convertible Notes was treated as an extinguishment, resulting in a **$0.6 million loss** in 2024, while the Term Notes were a modification[73](index=73&type=chunk) [NOTE 9 – 6% SENIOR SECURED CONVERTIBLE NOTES](index=15&type=section&id=NOTE%209%20%E2%80%93%206%25%20SENIOR%20SECURED%20CONVERTIBLE%20NOTES) - The Company repurchased the outstanding 6% Senior Secured Convertible Note and associated warrants for **$2.9 million** on January 23, 2024, resulting in a **$1.6 million gain on repurchase** for the three months ended June 30, 2024[75](index=75&type=chunk) - No interest expense was recorded for these notes for the three and six months ended June 30, 2025, compared to **$14,000** for the three months ended June 30, 2024[76](index=76&type=chunk) [NOTE 10 – WARRANT LIABILITIES](index=15&type=section&id=NOTE%2010%20%E2%80%93%20WARRANT%20LIABILITIES) - Warrant liabilities are recorded at fair value as liabilities, with changes recognized in the statement of operations[79](index=79&type=chunk) - The estimated fair value of warrants remained at **$11,200** as of June 30, 2025, and December 31, 2024, resulting in no change in fair value recognized for the three and six months ended June 30, 2025[80](index=80&type=chunk) [NOTE 11 – REVENUE RECOGNITION](index=17&type=section&id=NOTE%2011%20%E2%80%93%20REVENUE%20RECOGNITION) Revenues Disaggregated by Type (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Retail revenue | $ 5,756 | $ 6,311 | $ 11,193 | $ 12,648 | | Brand revenue | 81 | 111 | 157 | 170 | | **Total Revenue** | **$ 5,837** | **$ 6,422** | **$ 11,350** | **$ 12,818** | - Total revenue decreased by **9%** for the three months ended June 30, 2025, and by **11%** for the six months ended June 30, 2025, primarily due to a decline in retail revenue[82](index=82&type=chunk) - United States revenue accounted for approximately **98%** of total revenue for the three and six months ended June 30, 2025[83](index=83&type=chunk) [NOTE 12 – CONTRACT ASSETS](index=18&type=section&id=NOTE%2012%20%E2%80%93%20CONTRACT%20ASSETS) Contract Assets (in thousands) | (in thousands) | June 30, 2025 (unaudited) | December 31, 2024 | | :---------------------- | :------------------------ | :---------------- | | Deferred sales commissions | $ 162 | $ 188 | - Contract assets, primarily deferred sales commissions, decreased from **$0.188 million** at December 31, 2024, to **$0.162 million** at June 30, 2025[86](index=86&type=chunk) [NOTE 13 – STOCK BASED COMPENSATION](index=18&type=section&id=NOTE%2013%20%E2%80%93%20STOCK%20BASED%20COMPENSATION) - The 2022 Incentive Plan's authorized shares increased to **7,442,566** as of June 30, 2025, due to automatic annual increases[90](index=90&type=chunk) - Stock-based compensation expense for the 2022 Incentive Plan was **$173,000** for Q2 2025 and **$336,000** for H1 2025[93](index=93&type=chunk) - As of June 30, 2025, **17,047,306 Restricted Stock Units (RSUs)** were outstanding, with a weighted average fair value of **$0.08 per share**[93](index=93&type=chunk) [NOTE 14 – LEASES](index=19&type=section&id=NOTE%2014%20%E2%80%93%20LEASES) - The Company terminated an existing lease in June 2025, incurring a **$550,000 termination penalty**, and entered into a new 36-month lease for new office space effective May 1, 2025[95](index=95&type=chunk) Operating Lease Liabilities (in thousands) | (in thousands) | June 30, 2025 (unaudited) | December 31, 2024 | | :-------------------------------- | :------------------------ | :---------------- | | Right of use asset | $ 470 | $ 2,757 | | Operating lease liability, current | 218 | 365 | | Operating lease liability, non-current | 249 | 2,551 | | **Total operating lease liability** | **$ 467** | **$ 2,916** | - Operating lease cost for the six months ended June 30, 2025, was **$401,000**, up from **$321,000** in the prior year period[96](index=96&type=chunk) [NOTE 15 – COMMITMENTS AND CONTINGENCIES](index=21&type=section&id=NOTE%2015%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) - The Company is involved in litigation with its former CEO, Mr. Harris, stemming from his separation agreement, and has accrued a settlement within current liabilities[100](index=100&type=chunk) - The Company received a civil investigative demand regarding its **$790,000 PPP Loan**, with a potential contingent loss of up to **$1.6 million** if its software supports marijuana-related activities. A loss is reasonably possible but not probable[99](index=99&type=chunk) - The Company received an additional **$0.3 million** in employee retention payroll tax credits during Q2 2025, with **$1.9 million** remaining recognized in current liabilities[101](index=101&type=chunk) - In May 2025, the Company committed to a specified minimum monthly spend with its largest vendor for the next 34 months, with additional 1-year renewals[102](index=102&type=chunk) [NOTE 16 – FAIR VALUE MEASUREMENTS](index=21&type=section&id=NOTE%2016%20%E2%80%93%20FAIR%20VALUE%20MEASUREMENTS) - The fair value of public warrants, classified as Level 2 liabilities, remained at **$11,200** as of June 30, 2025, and December 31, 2024, with no change in fair value recognized during the six months ended June 30, 2025[106](index=106&type=chunk)[107](index=107&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk) - Fair value hierarchy classifies assets/liabilities into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than quoted prices), and Level 3 (unobservable inputs requiring significant judgment)[104](index=104&type=chunk)[105](index=105&type=chunk) [NOTE 17 – STOCKHOLDERS' DEFICIT](index=24&type=section&id=NOTE%2017%20%E2%80%93%20STOCKHOLDERS'%20DEFICIT) - An aggregate of **1,000,000 Sponsor Earnout Shares** are held in escrow, to be released if the common stock price reaches **$12.00 per share** within five years of the Closing Date[113](index=113&type=chunk) - Legacy SpringBig common stock holders and engaged option holders are entitled to receive up to **10,500,000 contingent shares** if the Company's common stock reaches specified price targets (**$12.00, $15.00, $18.00**) within 60 months of the Closing Date[114](index=114&type=chunk)[118](index=118&type=chunk) [NOTE 18 – NET LOSS PER SHARE](index=24&type=section&id=NOTE%2018%20%E2%80%93%20NET%20LOSS%20PER%20SHARE) Net Loss Per Common Share (in thousands, except share and per share data) | (in thousands, except share and per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net loss | $ (1,141) | $ (647) | $ (1,892) | $ (230) | | Weighted average common shares outstanding (Basic and diluted) | 46,829,586 | 45,721,610 | 46,609,898 | 45,576,941 | | **Net loss per common share (Basic and diluted)** | **$ (0.02)** | **$ (0.01)** | **$ (0.04)** | **$ (0.01)** | - Basic and diluted net loss per share was the same for all periods presented due to net losses, making potential common shares anti-dilutive[117](index=117&type=chunk) - Anti-dilutive securities excluded from diluted EPS calculation for H1 2025 include **1.45 million stock options**, **48.28 million convertible notes stock conversion shares**, **16 million warrant conversion shares**, **10.5 million contingent earn-out shares**, and **17.05 million restricted stock units**[120](index=120&type=chunk) [NOTE 19 – BENEFIT PLAN](index=25&type=section&id=NOTE%2019%20%E2%80%93%20BENEFIT%20PLAN) - Company matching contributions to the 401(k) plan were **$165,000** for the six months ended June 30, 2025, a decrease from **$289,000** in the prior year period[121](index=121&type=chunk) [NOTE 20 – INCOME TAXES](index=25&type=section&id=NOTE%2020%20%E2%80%93%20INCOME%20TAXES) - The Company's effective tax rate for the three and six months ended June 30, 2025, and 2024, is **0%**[122](index=122&type=chunk) - The Company has concluded there are no uncertain tax positions requiring recognition of a liability or disclosure as of June 30, 2025, and 2024[199](index=199&type=chunk) [NOTE 21 – SEGMENT REPORTING](index=26&type=section&id=NOTE%2021%20%E2%80%93%20SEGMENT%20REPORTING) - The Company operates and reports as a single operating segment, as the CEO reviews financial information at an entity level and products/services are similar[123](index=123&type=chunk)[124](index=124&type=chunk) Selected Financial Information by Segment (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net revenue | $ 5,837 | $ 6,422 | $ 11,350 | $ 12,818 | | Cost of revenue | 1,499 | 1,725 | 2,705 | 3,441 | | Gross profit | $ 4,338 | $ 4,697 | $ 8,645 | $ 9,377 | | Loss from operations | $ (726) | $ (57) | $ (1,154) | $ (339) | | Net loss | $ (1,141) | $ (647) | $ (1,892) | $ (230) | [NOTE 22 – SUBSEQUENT EVENTS](index=26&type=section&id=NOTE%2022%20%E2%80%93%20SUBSEQUENT%20EVENTS) - The Company announced its intent to acquire VICE CRM, an AI-enabled performance marketing platform, and appointed Jaret Christopher (VICE CRM founder) as CEO, effective April 1, 2025. The acquisition was completed on July 31, 2025[127](index=127&type=chunk) - The U.S. government passed the "One Big Beautiful Bill Act" after Q2 2025, introducing provisions for R&D expense deductions, bonus depreciation, and international tax rule updates, which the Company is currently assessing[128](index=128&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results, covering business overview, key metrics, revenue, expenses, and liquidity, alongside market challenges and strategic initiatives [Business Overview](index=27&type=section&id=Business%20Overview) - SpringBig is a market-leading software platform offering customer loyalty and marketing automation solutions to retailers and brands in regulated industries across the US and Canada[129](index=129&type=chunk) - The platform enables clients to increase brand awareness, engage customers, improve retention, and access actionable consumer feedback, driving new customer acquisition, spend, and retail foot traffic[129](index=129&type=chunk) - SpringBig serves approximately **825 clients** across over **2,100 retail locations**, distributing around **600 million messages** annually, and accounted for over **$6.6 billion** in gross merchandise value in the last year[130](index=130&type=chunk) [Recent Developments](index=27&type=section&id=Recent%20Developments) - No recent developments were reported in this section[133](index=133&type=chunk) [Key Operating and Financial Metrics](index=27&type=section&id=Key%20Operating%20and%20Financial%20Metrics) Key Operating and Financial Metrics (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Revenue | $ 5,837 | $ 6,422 | $ 11,350 | $ 12,818 | | Net loss | (1,141) | (647) | (1,892) | (230) | | Adjusted EBITDA | 285 | 330 | 610 | 480 | | Number of retail clients | 762 | 1,113 | 762 | 1,113 | | Net revenue retention | 78% | 86% | 78% | 86% | | Number of messages (million) | 151 | 158 | 284 | 298 | - Revenue decreased, net loss increased, and Adjusted EBITDA decreased for the three months ended June 30, 2025, compared to the prior year[133](index=133&type=chunk) - Number of retail clients decreased from **1,113 to 762**, and net revenue retention rate declined from **86% to 78% YoY** for the periods ended June 30, 2025[133](index=133&type=chunk) [Revenue](index=27&type=section&id=Revenue) - Revenue is generated from monthly subscriptions for platform access and communication credits, with additional revenue from "excess use" when message volumes exceed subscription limits[134](index=134&type=chunk)[136](index=136&type=chunk) - Revenue growth is driven by new clients, client subscription upgrades (often soon after onboarding), and excess use[136](index=136&type=chunk) [Other Key Operating Metrics](index=29&type=section&id=Other%20Key%20Operating%20Metrics) - The number of retail clients is a key metric for assessing business performance, as it drives growth and strengthens the value proposition[138](index=138&type=chunk) - Net revenue retention rate, calculated on a rolling basis for subscription revenue, tracks revenue maintenance and growth from existing clients. It decreased to **78%** for the twelve months ended June 30, 2025, from **86%** in the prior year[139](index=139&type=chunk)[160](index=160&type=chunk) - The volume of messages sent (text, email, push notifications) indicates platform usage frequency and client engagement[140](index=140&type=chunk) [EBITDA and Adjusted EBITDA](index=29&type=section&id=EBITDA%20and%20Adjusted%20EBITDA) - EBITDA is a non-GAAP measure calculated as net income before interest, taxes, depreciation, and amortization. Adjusted EBITDA further adjusts for unusual, infrequent, or non-cash items like credit loss expense and stock-based compensation[141](index=141&type=chunk) Reconciliation of Net Loss to Non-GAAP EBITDA and Adjusted EBITDA (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Net loss | $ (1,141) | $ (647) | $ (1,892) | $ (230) | | Interest income | (33) | (2) | (33) | (6) | | Interest expense | 317 | 544 | 640 | 1,419 | | Income tax expense | - | - | - | - | | Depreciation expense | 29 | 47 | 62 | 101 | | **EBITDA** | **(828)** | **(58)** | **(1,223)** | **1,284** | | Stock-based compensation | 173 | 200 | 336 | 395 | | Credit loss expense | 130 | 80 | 220 | 167 | | Gain on repurchase of convertible debt | - | - | - | (1,573) | | Lease termination fee | 550 | - | 550 | - | | Severance and related payments | 260 | 60 | 727 | 156 | | Change in fair value of warrants | - | 48 | - | 51 | | **Adjusted EBITDA** | **$ 285** | **$ 330** | **$ 610** | **$ 480** | - Adjusted EBITDA decreased to **$0.285 million** for Q2 2025 from **$0.330 million** for Q2 2024, and increased to **$0.610 million** for H1 2025 from **$0.480 million** for H1 2024[144](index=144&type=chunk) [Factors Affecting Our Performance](index=30&type=section&id=Factors%20Affecting%20Our%20Performance) - Overall economic trends, including consumer spending, significantly impact the business, as economic weakness can negatively affect customer sales and revenue[145](index=145&type=chunk) - Growth and retention of customers are crucial, achieved through a comprehensive product suite, differentiated loyalty programs, consistent communication, and reliable customer service[146](index=146&type=chunk) - The legalization and maturation of cannabis markets present significant growth opportunities, with the Company intending to expand into new jurisdictions and potentially engage in fintech, payments, and e-commerce if federal regulations change[148](index=148&type=chunk) - Competition is expected to intensify, and maintaining brand identity and reputation is critical, as negative publicity could adversely impact the business[149](index=149&type=chunk)[151](index=151&type=chunk) [Components of Our Results of Operations](index=31&type=section&id=Components%20of%20Our%20Results%20of%20Operations) - Revenue is derived from monthly subscriptions for proprietary software access and optional purchases of additional communication credits[153](index=153&type=chunk) - Cost of revenue primarily consists of payments to message distributors across cellular networks and integrations[154](index=154&type=chunk) - Selling, servicing, and marketing expenses include salaries, benefits, travel, incentive compensation for sales/marketing staff, business acquisition marketing, events, branding, and advertising[155](index=155&type=chunk) - Technology and software development costs cover salaries and benefits for engineering teams, with limited capitalization of costs for platform enhancements[156](index=156&type=chunk) - General and administrative expenses include payroll for corporate functions (finance, HR, investor relations), software/equipment costs, rent, insurance, professional services (legal, audit), and stock compensation[157](index=157&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) This section details financial performance for the three and six months ended June 30, 2025, compared to 2024, highlighting changes in revenue, gross profit, operating expenses, and other income/expenses [Comparison of Three Months Ended June 30, 2025, compared to Three Months Ended June 30, 2024](index=32&type=section&id=Comparison%20of%20Three%20Months%20Ended%20June%2030%2C%202025%2C%20compared%20to%20Three%20Months%20Ended%20June%2030%2C%202024) Results of Operations (Three Months Ended June 30, in thousands) | (in thousands) | 2025 | 2024 | Increase (decrease) | % Change | | :-------------------------------- | :----- | :----- | :------------------ | :------- | | Revenue | $ 5,837 | $ 6,422 | $ (585) | -9% | | Cost of revenue | 1,499 | 1,725 | (226) | -13% | | Gross profit | 4,338 | 4,697 | (359) | -8% | | Total operating expenses | 5,064 | 4,754 | 310 | 7% | | Loss from operations | (726) | (57) | (669) | Nm | | Interest expense | (317) | (544) | 227 | 42% | | Loss on asset disposal | (131) | - | (131) | Nm | | Change in fair value of warrants | - | (48) | 48 | Nm | | Loss before taxes | (1,141) | (647) | (494) | -76% | - Revenue decreased by **$0.6 million (9%) YoY**, with subscription revenue declining **11%** and excess use revenue declining **5%**, attributed to the uncertain economy and client budget consciousness[159](index=159&type=chunk) - Gross profit decreased by **$0.4 million (8%) YoY**, despite a **1% improvement** in gross profit margin to **74%** due to lower messaging distribution costs[161](index=161&type=chunk) - Operating expenses increased by **$0.3 million (7%) YoY**, driven by a **14% increase** in general and administrative expenses (including **$0.3 million** for CFO separation and **$0.6 million** lease termination fee), partially offset by a **3% decrease** in technology and software development expenses[162](index=162&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk) - Interest expense decreased by **42% YoY** to **$0.3 million** due to the repayment of high interest-bearing cash advances[165](index=165&type=chunk) [Comparison of Six Months Ended June 30, 2025, compared to Six Months Ended June 30, 2024](index=34&type=section&id=Comparison%20of%20Six%20Months%20Ended%20June%2030%2C%202025%2C%20compared%20to%20Six%20Months%20Ended%20June%2030%2C%202024) Results of Operations (Six Months Ended June 30, in thousands) | (in thousands) | 2025 | 2024 | Increase (decrease) | % Change | | :-------------------------------- | :----- | :----- | :------------------ | :------- | | Revenue | $ 11,350 | $ 12,818 | $ (1,468) | -11% | | Cost of revenue | 2,705 | 3,441 | (736) | -21% | | Gross profit | 8,645 | 9,377 | (732) | -8% | | Total operating expenses | 9,799 | 9,716 | 83 | 1% | | Loss from operations | (1,154) | (339) | (815) | Nm | | Interest expense | (640) | (1,419) | 779 | 55% | | Gain on note repurchase | - | 1,573 | (1,573) | Nm | | Loss on asset disposal | (131) | - | (131) | Nm | | Change in fair value of warrants | - | (51) | 51 | Nm | | Loss before taxes | (1,892) | (230) | (1,662) | -723% | - Revenue decreased by **$1.5 million (11%) YoY**, with subscription revenue declining **11%** and excess use revenue declining **5%**, due to economic uncertainty in regulated industries[168](index=168&type=chunk)[169](index=169&type=chunk) - Gross profit decreased by **$0.7 million (8%) YoY**, despite a **3% improvement** in gross profit margin to **76%** due to lower messaging distribution costs[170](index=170&type=chunk) - Operating expenses increased marginally by **$0.1 million (0%) YoY**, with a **23% increase** in general and administrative expenses (including **$0.7 million** for CEO/CFO separation and **$0.6 million** lease termination fee), offset by decreases in selling, servicing, marketing (**17%**) and technology and software development (**15%**) expenses[171](index=171&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk) - Interest expense decreased by **55% YoY** to **$0.6 million** due to the repayment of high interest-bearing cash advances[174](index=174&type=chunk) [Liquidity & Capital Resources](index=37&type=section&id=Liquidity%20%26%20Capital%20Resources) - The Company has historically incurred net losses and negative operating cash flows, financing operations through equity sales, cash advances, and the issuance of **$8.0 million Term Notes and Convertible Notes** in January 2024[177](index=177&type=chunk) - In January 2024, the Company repurchased the 6% Senior Secured Notes for **$2.9 million** and issued **$6.4 million** in 2024 Convertible Notes and **$1.6 million** in 2024 Term Notes, generating **$7.2 million** net cash proceeds[181](index=181&type=chunk)[182](index=182&type=chunk) - The 2024 Convertible and Term Notes' maturity was extended to January 2027, with increased interest rates (**17%** and **13%** respectively) and restrictive covenants limiting additional indebtedness, liens, dividends, asset sales, and equity issuance[184](index=184&type=chunk)[185](index=185&type=chunk)[187](index=187&type=chunk) Cash, Accounts Receivable, and Working Capital (in thousands) | (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :---------------- | | Cash and cash equivalents | $ 1,383 | $ 1,179 | | Accounts receivable, net | 2,136 | 2,213 | | Working capital | (2,832) | (1,806) | - Working capital deficit increased from **$(1.806) million** at December 31, 2024, to **$(2.832) million** at June 30, 2025[187](index=187&type=chunk) [Cash Flows](index=38&type=section&id=Cash%20Flows) Summary of Cash Flows (Six Months Ended June 30, in thousands) | (in thousands) | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Total cash provided by (used in): | | | | Operating activities | $ 218 | $ (1,919) | | Investing activities | (14) | (63) | | Financing activities | - | 2,375 | | **Net increase in cash and cash equivalents** | **$ 204** | **$ 393** | - Cash provided by operating activities improved significantly to **$0.218 million** in H1 2025 from a use of **$1.919 million** in H1 2024, primarily due to a decrease in working capital and non-cash items[188](index=188&type=chunk)[190](index=190&type=chunk) - No cash flows from financing activities occurred in H1 2025, compared to **$2.375 million** provided in H1 2024, which included proceeds from new notes and repayment of old debt and cash advances[193](index=193&type=chunk)[194](index=194&type=chunk) - Investing activities used **$14,000** in H1 2025, primarily for computer equipment and office furniture, reflecting low capital investment requirements[192](index=192&type=chunk) [Off-Balance Sheet Arrangements](index=39&type=section&id=Off-Balance%20Sheet%20Arrangements) - As of June 30, 2025, there were no material off-balance sheet arrangements[195](index=195&type=chunk) [Critical Accounting Policies and Estimates](index=39&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - Critical accounting policies and estimates include income taxes, equity-based compensation (including market-based RSUs valued using Monte Carlo simulation), and allowance for credit losses[196](index=196&type=chunk)[200](index=200&type=chunk)[202](index=202&type=chunk)[204](index=204&type=chunk) - Management's estimates and assumptions affect reported asset/liability amounts and disclosures, with changes potentially having a material impact on financial condition and results[196](index=196&type=chunk) [Recent Accounting Pronouncements](index=40&type=section&id=Recent%20Accounting%20Pronouncements) - The FASB issued ASU No. 2023-09 (Topic 740), Improvements to Income Tax Disclosures, effective for annual periods beginning after December 15, 2024, which the Company is currently evaluating for impact[206](index=206&type=chunk) [Emerging Growth Company and Smaller Reporting Company Status](index=40&type=section&id=Emerging%20Growth%20Company%20and%20Smaller%20Reporting%20Company%20Status) - The Company is an "emerging growth company" and has elected to use the extended transition period for complying with new or revised accounting standards[207](index=207&type=chunk) - The Company is also a "smaller reporting company," allowing it to take advantage of scaled disclosures as long as its market value of non-affiliate common stock is less than **$250 million** or annual revenue is less than **$100 million** and market value is less than **$700 million**[208](index=208&type=chunk) [Item 3. Quantitative and Qualitative Disclosure About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) This section discusses the Company's exposure to market risks, including interest rate fluctuations, inflation, and exchange rate changes, and their management [Interest Rate Fluctuation Risk](index=42&type=section&id=Interest%20Rate%20Fluctuation%20Risk) - The Company's investment activities aim to preserve principal and maximize income, with its cash and cash equivalents having short maturities, making the portfolio relatively insensitive to interest rate changes[212](index=212&type=chunk) [Inflation](index=42&type=section&id=Inflation) - Inflation has not had a material effect on the Company's business, financial condition, or results of operations, but it continues to monitor and minimize effects through pricing strategies, productivity, and cost reductions[213](index=213&type=chunk) [Exchange Rate Risk](index=42&type=section&id=Exchange%20Rate%20Risk) - The Company has limited operations in Canada, and exchange rate translation risk is minimized by matching Canadian income and expenses with local currency invoicing, resulting in an immaterial risk to financial statements[214](index=214&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) This section addresses the effectiveness of the Company's disclosure controls and procedures and any changes in internal controls over financial reporting [Evaluation of Disclosure Controls and Procedures](index=42&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - The CEO and CFO concluded that the Company's disclosure controls and procedures were not effective as of June 30, 2025, citing material weaknesses in internal control over financial reporting described in the 2024 Annual Report on Form 10-K[216](index=216&type=chunk) [Changes in Internal Controls over Financial Reporting](index=42&type=section&id=Changes%20in%20Internal%20Controls%20over%20Financial%20Reporting) - No changes in internal control over financial reporting occurred during the three months ended June 30, 2025, that materially affected or are reasonably likely to materially affect the Company's internal control over financial reporting[217](index=217&type=chunk) Part II – Other Information [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to the detailed description of legal proceedings and contingencies provided within the notes to the financial statements - Developments in legal proceedings for the six months ended June 30, 2025, are described under "Litigation" in Note 15, "Commitments and Contingencies"[219](index=219&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) This section directs readers to the comprehensive discussion of risks in the Company's Annual Report on Form 10-K, emphasizing potential material impacts on the business - Investors should carefully consider the risks described in Part I, Item 1A of the Annual Report on Form 10-K for the year ended December 31, 2024, as well as risks in this 10-Q, as they could materially and adversely impact the Company's business[220](index=220&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) - No unregistered sales of equity securities were reported[221](index=221&type=chunk) [Item 3. Defaults Upon Senior Securities](index=43&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) - No defaults upon senior securities were reported[222](index=222&type=chunk) [Item 4. Mine Safety Disclosures](index=43&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) - No mine safety disclosures were reported[223](index=223&type=chunk) [Item 5. Other Information](index=43&type=section&id=Item%205.%20Other%20Information) - No director or officer adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the three months ended June 30, 2025[225](index=225&type=chunk) [Item 6. Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed or incorporated by reference into the Quarterly Report on Form 10-Q, including organizational documents, offer letters, and certifications - The exhibits include the Certificate of Incorporation, By-Laws, offer letters for James Cabral and Jason Moos, Equity Purchase Agreement for VICE CRM, First Amendment to Paul Sykes' Separation Agreement, and Sarbanes-Oxley Act certifications[227](index=227&type=chunk) [Signatures](index=45&type=section&id=Signatures) - The report is signed by Jaret Christopher, Chief Executive Officer, and Jason Moos, Chief Financial Officer, on August 13, 2025[230](index=230&type=chunk)

[Part I – Financial Information](index=4&type=section&id=Part%20I%20%E2%80%93%20Financial%20Information) [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) SpringBig reported a net loss of $0.75 million for Q1 2025, a reversal from prior year, with revenues down 14% [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, the company reported a total stockholders' deficit of $10.36 million and a working capital deficit of $2.0 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | March 31, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,087 | $1,179 | | Total current assets | $4,036 | $3,864 | | Total assets | $6,875 | $6,825 | | Total current liabilities | $6,057 | $5,670 | | Total liabilities | $17,234 | $16,596 | | Total stockholders' deficit | $(10,359) | $(9,771) | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net revenues decreased 14% to $5.52 million for Q1 2025, resulting in a net loss of $0.75 million Q1 2025 vs. Q1 2024 Statement of Operations (in thousands) | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net revenues | $5,516 | $6,396 | | Gross profit | $4,310 | $4,680 | | Loss from operations | $(427) | $(282) | | Net (loss) income | $(751) | $417 | | Basic EPS | $(0.02) | $0.01 | | Diluted EPS | $(0.02) | $0.01 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities improved to $86,000 in Q1 2025, with overall cash decreasing by $92,000 Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(86) | $(1,878) | | Net cash used in investing activities | $(6) | $(59) | | Net cash provided by financing activities | $0 | $3,274 | | Net (decrease) increase in cash | $(92) | $1,337 | [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's single segment, liquidity, a $1.6 million PPP loan investigation, and the VICE CRM acquisition - The company has a history of losses, resulting in an accumulated deficit of **$39.2 million** as of March 31, 2025, though management projects sufficient liquidity for the next twelve months[30](index=30&type=chunk)[32](index=32&type=chunk) - The company is under a civil investigative demand from the U.S. Attorney's Office regarding its eligibility for a **$790,000 PPP loan** received in 2020, creating a potential contingent loss of up to **$1.6 million**[90](index=90&type=chunk) - On March 17, 2025, the company announced its intent to acquire VICE CRM, an AI-enabled marketing platform, and appointed VICE CRM's founder, Jaret Christopher, as SpringBig's new CEO effective April 1, 2025[114](index=114&type=chunk) - In January 2024, the company issued **$6.4 million** in Secured Convertible Notes and **$1.6 million** in Secured Term Notes, with terms amended in November 2024[58](index=58&type=chunk)[61](index=61&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 14% revenue decline to market conditions, noting improved gross margin despite lower client numbers Key Operating and Financial Metrics | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Revenue (in thousands) | $5,516 | $6,396 | | Adjusted EBITDA (in thousands) | $326 | $150 | | Number of retail clients | 900 | 1,207 | | Net revenue retention | 86% | 89% | - Revenue decreased by **$0.9 million** (14%) year-over-year, with subscription revenue down 11% and excess use revenue down 40%, reflecting client budget-consciousness in the cannabis sector[146](index=146&type=chunk) - General and administrative expenses increased **36%** year-over-year, primarily due to a **$0.5 million** expense related to the separation agreement with the former CEO[151](index=151&type=chunk) - The company's debt financing contains restrictive covenants that limit its ability to incur additional debt, pay dividends, sell assets, or issue additional equity, potentially constraining future capital-raising efforts[165](index=165&type=chunk) [Quantitative and Qualitative Disclosure About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) The company believes market risks from interest rates, inflation, and foreign currency exchange rates have not materially affected its business - The company does not believe that inflation has had a material effect on its business, financial condition, or results of operations[188](index=188&type=chunk) - Exchange rate risk from Canadian operations is considered immaterial as Canadian income and expenses are matched in the local currency[189](index=189&type=chunk) [Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective as of March 31, 2025 - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were not effective as of March 31, 2025[191](index=191&type=chunk) - No changes to internal control over financial reporting occurred in Q1 2025 that materially affected, or are reasonably likely to materially affect, the company's internal controls[192](index=192&type=chunk) [Part II – Other Information](index=39&type=section&id=Part%20II%20%E2%80%93%20Other%20Information) [Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in a civil investigative demand regarding its PPP Loan eligibility, as detailed in Note 15 - The company is involved in a legal matter concerning a civil investigative demand regarding its Paycheck Protection Program (PPP) Loan. See Note 15 for details[194](index=194&type=chunk)[90](index=90&type=chunk) [Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported from the Annual Report on Form 10-K for the year ended December 31, 2024 - The company directs investors to the Risk Factors section of its Annual Report on Form 10-K for the year ended December 31, 2024, indicating no new material risks are being reported in this 10-Q[195](index=195&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[196](index=196&type=chunk)

Core Insights - Springbig has announced the addition of three seasoned executives to its leadership team, reflecting the company's commitment to growth, innovation, and operational excellence as it scales its SaaS platform across North America [1][6]. Leadership Changes - Jaret Christopher has been appointed as the new CEO & President, bringing over 25 years of experience in building high-growth vertical SaaS companies and a proven track record in scaling software businesses [2]. - James Cabral joins as Chief Operating Officer, with extensive experience in leading go-to-market teams and a successful background in both startups and large public companies [3]. - Jason Moos has been appointed as Chief Financial Officer, succeeding Paul Sykes, and has over 20 years of financial and operational leadership experience, including significant achievements in M&A and revenue growth [4]. - David Schachter has been appointed Vice President of Business Development, enhancing Springbig's customer acquisition and partnership strategy with over a decade of experience in CRM and SaaS [5]. Strategic Vision - The new leadership team is expected to accelerate product innovation, scale operations, and deepen relationships with clients and partners in the MarTech ecosystem [6].

Financial Performance - Revenue for the year ended December 31, 2024, was $24.649 million, a decrease from $28.050 million in 2023, representing a decline of approximately 5%[244] - The net loss for 2024 was $1.876 million, significantly improved from a net loss of $10.233 million in 2023[244] - Adjusted EBITDA for 2024 was $1.368 million, compared to a loss of $3.628 million in 2023, indicating a positive turnaround[244] - Revenue decreased by $3.4 million, or 12%, to $24.6 million for the year ended December 31, 2024, compared to $28.1 million in 2023[270] - Total net revenues for the year ended December 31, 2024, were $24,649,000, a decrease of 12.5% compared to $28,050,000 in 2023[337] - Gross profit for 2024 was $17,994,000, down from $21,564,000 in 2023, reflecting a decline of 16.5%[337] - The net loss for 2024 was $1,876,000, significantly improved from a net loss of $10,233,000 in 2023, representing an 81.7% reduction[337] Client Metrics - The number of retail clients decreased to 915 in 2024 from 1,298 in 2023, reflecting a reduction of approximately 29%[244] - Net revenue retention rate fell to 88% in 2024 from 97% in 2023, indicating challenges in maintaining existing client revenue[244] - The number of messages sent by clients increased to 595 million in 2024, up from 578 million in 2023, showing growth in engagement[244] - Clients utilizing the platform accounted for over $7.5 billion in gross merchandise value in the last year[243] Operating Expenses - Total operating expenses decreased by $11.3 million, or 38%, for the year ended December 31, 2024, compared to 2023[273] - Selling, servicing, and marketing expenses decreased by $3.6 million, or 43%, due to lower compensation expenses from reduced headcount[274] - Technology and software development expenses decreased by $2.1 million, or 26%, attributed to lower expenses for offshore contract developers[275] - General and administrative expenses decreased by $5.6 million, or 41%, largely due to reductions in various operational costs[276] Cash Flow and Financing - Cash used in operating activities was $953,000 for 2024, an improvement from $3.976 million in 2023[291] - The company raised $6.4 million through the issuance of 8% Convertible Notes and $1.6 million through 12% Term Notes in January 2024[286] - The net cash provided by financing activities for the year ended December 31, 2024, was $1.9 million, which included $7.2 million from the issuance of Secured Convertible Notes[296] - The net cash provided by financing activities for the year ended December 31, 2023, was $1.1 million, primarily from the issuance of common stock and exercise of employee stock options[297] Assets and Liabilities - Total assets rose to $6,825,000 in 2024, up from $5,105,000 in 2023, indicating an increase of 33.6%[335] - Total liabilities increased to $16,596,000 in 2024 from $13,779,000 in 2023, reflecting a rise of 20.5%[335] - As of December 31, 2024, the Company had a working capital deficit of approximately $1.8 million, including $1.2 million in cash and cash equivalents[351] Shareholder Information - The company issued 1,008,589 common shares during 2024, increasing the total shares outstanding to 46,348,351[339] - The total number of shares authorized for issuance under the 2022 Incentive Plan was 5,125,149 as of December 31, 2024[437] - No options were exercised during the year ended December 31, 2024, with the intrinsic value of options outstanding and exercisable at $0[439] Regulatory and Market Environment - The company plans to explore new expansion opportunities as more jurisdictions legalize cannabis for medical or recreational use[259] - Competition is expected to intensify as the regulatory environment for cannabis stabilizes, potentially attracting new market participants[260] Tax and Accounting - The company has evaluated its tax positions and concluded that there are no uncertain tax positions requiring recognition of a liability as of December 31, 2024, and 2023[304] - The Company’s revenue recognition follows ASC 606, recognizing revenue upon transfer of control of promised services to customers[374] - The Company’s contracts with customers have fixed transaction prices, with a variable component based on the volume of messages[379] Impairments and Losses - The Company recognized an impairment loss on capitalized software costs of approximately $116,000 due to an unsuccessful application implementation in the year ended December 31, 2023[371] - The Company recorded a loss on extinguishment of $0.6 million related to the 2024 Secured Convertible Notes[301] - The Company recorded a loss of $272,000 on the Convertible Note Receivable for the year ended December 31, 2023[403] Other Financial Metrics - Cash and cash equivalents increased to $1,179,000 as of December 31, 2024, compared to $331,000 at the end of 2023, marking a growth of 256.1%[341] - The allowance for credit losses was reduced from $1.60 million in 2023 to $426,000 in 2024, with credit loss expense recorded at $700,000 for 2024[399] - Accounts receivable decreased from $3.69 million in 2023 to $1.95 million in 2024, with total receivables dropping from $4.54 million to $2.64 million[397]

[Part I – Financial Information](index=4&type=section&id=Part%20I%20%E2%80%93%20Financial%20Information) [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) The unaudited condensed consolidated financial statements for the period ended September 30, 2024, reflect decreased revenue but a significantly narrowed net loss, driven by reduced operating expenses, alongside an increase in total assets and liabilities [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of September 30, 2024, total assets were **$7.48 million**, an increase from **$5.11 million** at year-end 2023, mainly due to a higher operating lease asset, while total liabilities increased to **$16.33 million** from **$13.78 million**, driven by new debt and lease obligations, and the stockholders' deficit widened slightly to **$8.84 million** from **$8.67 million** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2024 (unaudited) | Dec 31, 2023 (audited) | | :--- | :--- | :--- | | **Total Current Assets** | $4,424 | $4,445 | | **Total Assets** | **$7,482** | **$5,105** | | **Total Current Liabilities** | $13,700 | $13,551 | | **Total Liabilities** | **$16,325** | **$13,779** | | **Total Stockholders' Deficit** | **($8,843)** | **($8,674)** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the third quarter of 2024, revenue decreased to **$6.4 million** from **$6.9 million** year-over-year, but the net loss significantly narrowed to **$0.55 million** from **$2.74 million** due to a **44%** reduction in operating expenses, while for the nine-month period, revenue fell to **$19.5 million** from **$21.3 million**, and the net loss improved dramatically to **$0.78 million** from **$7.03 million**, aided by a **$1.57 million** gain on note repurchase Statement of Operations Summary (in thousands) | Metric | Q3 2024 | Q3 2023 | Nine Months 2024 | Nine Months 2023 | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $6,425 | $6,888 | $19,511 | $21,259 | | **Gross Profit** | $4,435 | $5,284 | $13,812 | $16,794 | | **Loss from Operations** | ($45) | ($2,692) | ($384) | ($6,193) | | **Net Loss** | **($554)** | **($2,742)** | **($784)** | **($7,032)** | | **Net Loss per Share** | ($0.01) | ($0.07) | ($0.02) | ($0.21) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2024, net cash used in operating activities was **$1.3 million**, a significant improvement from **$3.5 million** used in the prior-year period, with net cash from financing activities at **$1.9 million**, driven by proceeds from new debt issuance (**$8.0 million** gross) used to repurchase old debt (**$2.9 million**) and repay advances, leading to an overall increase in cash and cash equivalents by **$516,000** to end the period at **$847,000** Cash Flow Summary (Nine Months Ended Sep 30, in thousands) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($1,334) | ($3,468) | | Net cash used in investing activities | ($64) | ($259) | | Net cash provided by financing activities | $1,914 | $474 | | **Net increase/(decrease) in cash** | **$516** | **($3,253)** | | **Cash at end of period** | **$847** | **$293** | [Notes to the Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) The notes detail going concern uncertainties due to accumulated losses, management's mitigation plans including recent debt restructuring, and significant events such as debt financing, note repurchase gains, and customer/vendor concentration - The company has incurred historical losses resulting in an accumulated deficit of approximately **$37.3 million** and a working capital deficit of **$9.3 million** as of September 30, 2024, raising going concern considerations[36](index=36&type=chunk) - In January 2024, the company repurchased a senior secured note and associated warrants for **$2.9 million**, recognizing a **$1.6 million** gain on the transaction[77](index=77&type=chunk) - Subsequent to the quarter end, on November 11, 2024, the company amended its debt agreements, extending the maturity to January 2027 and increasing interest rates on its 12% Secured Term Notes and 8% Secured Convertible Notes to **17%** and **13%**, respectively[115](index=115&type=chunk)[116](index=116&type=chunk)[69](index=69&type=chunk) - For the nine months ended September 30, 2024, one customer represented **14%** of total revenues, and one vendor represented **86%** of cost of goods sold[50](index=50&type=chunk)[51](index=51&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a Q3 2024 revenue decline due to market conditions and client issues, offset by significant operating expense reductions leading to positive Adjusted EBITDA, and highlights recent debt financing and amendments to secure liquidity [Key Operating and Financial Metrics](index=29&type=section&id=Key%20Operating%20and%20Financial%20Metrics) The company's key metrics show a mixed performance, with revenue and retail clients declining year-over-year, but significant profitability improvement as Adjusted EBITDA turned positive for both the third quarter and the first nine months of 2024, despite a decrease in net revenue retention Key Metrics Comparison | Metric | Q3 2024 | Q3 2023 | Nine Months 2024 | Nine Months 2023 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $6,425K | $6,888K | $19,511K | $21,259K | | Net loss | ($554K) | ($2,742K) | ($784K) | ($7,032K) | | Adjusted EBITDA | $409K | ($882K) | $889K | ($3,370K) | | Number of retail clients | 1,022 | 1,356 | 1,022 | 1,356 | | Net revenue retention | 88% | 93% | 88% | 93% | - Net revenue retention rate, which tracks recurring subscription revenue from existing clients, decreased to **88%** for the twelve months ended September 30, 2024, from **93%** in the prior year[130](index=130&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) For Q3 2024, revenues fell **7%** year-over-year to **$6.4 million**, and gross profit decreased **16%** to **$4.4 million**, but total operating expenses were slashed by **44%** to **$4.5 million**, resulting in a near break-even loss from operations of **$45,000**, a significant improvement from a **$2.7 million** loss in Q3 2023, with similar trends observed for the nine-month period Comparison of Three Months Ended September 30 (in thousands) | Item | 2024 | 2023 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $6,425 | $6,888 | ($463) | (7)% | | Gross Profit | $4,435 | $5,284 | ($849) | (16)% | | Total Operating Expenses | $4,480 | $7,976 | ($3,496) | (44)% | | Loss from Operations | ($45) | ($2,692) | $2,647 | 80% | - The decline in Q3 2024 revenue was impacted by the company ceasing to provide platform access to delinquent clients and a **27%** YoY decline in excess use revenue[150](index=150&type=chunk) - For the nine months ended Sep 30, 2024, a gain on note repurchase of **$1.57 million** significantly contributed to reducing the net loss[161](index=161&type=chunk)[169](index=169&type=chunk) [Liquidity & Capital Resources](index=38&type=section&id=Liquidity%20%26%20Capital%20Resources) The company managed its liquidity through a combination of debt financing and operational cost-cutting, raising **$8.0 million** in new debt in January 2024 and subsequently amending its debt terms in November 2024 to extend maturity to 2027, which management believes secures liquidity for at least the next twelve months, despite a working capital deficit of **$9.3 million** as of September 30, 2024 - In January 2024, the company raised **$6.4 million** through 8% Convertible Notes and **$1.6 million** through 12% Term Notes, with net proceeds of **$7.2 million** after expenses[176](index=176&type=chunk) - On November 11, 2024, the company amended its debt, extending the maturity to January 23, 2027, increasing interest rates, and adjusting the minimum cash balance covenant to apply only at month-end starting February 2025[178](index=178&type=chunk)[179](index=179&type=chunk) Working Capital Summary (in thousands) | Item | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $847 | $331 | | Working capital | ($9,276) | ($9,106) | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states its exposure to market risks, including interest rate fluctuations, inflation, and foreign exchange rates, is not material, with interest rate risk minimal due to the short-term nature of cash equivalents, no significant impact from inflation, and foreign exchange risk mitigated by matching local currency revenues and expenses in Canadian operations - The company does not believe that inflation has had a material effect on its business, financial condition, or results of operations[205](index=205&type=chunk) - Foreign exchange rate risk from Canadian operations is considered immaterial as Canadian income and expenses are matched in the local currency[206](index=206&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) As of September 30, 2024, the company's CEO and CFO concluded that its disclosure controls and procedures were not effective, based on previously identified material weaknesses in internal control over financial reporting, with no material changes to internal controls reported during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were not effective as of September 30, 2024[208](index=208&type=chunk) - No changes in internal control over financial reporting occurred during the nine months ended September 30, 2024, that materially affected, or are reasonably likely to materially affect, the company's internal control[209](index=209&type=chunk) [Part II – Other Information](index=44&type=section&id=Part%20II%20%E2%80%93%20Other%20Information) [Item 1. Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) The company is periodically involved in litigation incidental to its business, and management believes that the outcomes of current legal matters will not have a significant adverse effect on the company's financial condition or results of operations - The company is involved in litigation from time to time but management believes the outcome will not have a significant adverse effect on its financial position, results of operations or cash flows[95](index=95&type=chunk)[211](index=211&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) This section directs investors to the more detailed discussion of risk factors in the company's Annual Report on Form 10-K for the year ended December 31, 2023, for a comprehensive understanding of the risks associated with the business - The company refers to the 'Risk Factors' section in its Annual Report on Form 10-K for the year ended December 31, 2023, for a detailed description of business risks[212](index=212&type=chunk) [Item 5. Other Information](index=44&type=section&id=Item%205.%20Other%20Information) The company reports a significant subsequent event: on November 11, 2024, it amended the terms of its 12% Secured Term Notes and 8% Secured Convertible Notes, including extending the maturity date to January 23, 2027, increasing the interest rates, and modifying the minimum cash balance covenant - On November 11, 2024, the company amended its secured debt agreements, extending the maturity date to January 23, 2027, and increasing interest rates[215](index=215&type=chunk) [Item 6. Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including amendments to the Senior Secured Term and Convertible Promissory Notes, certifications by the CEO and CFO as required by the Sarbanes-Oxley Act, and the interactive data files (XBRL) - The report includes as exhibits the First Amendments to the Senior Secured Term and Convertible Promissory Notes, along with CEO and CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act[217](index=217&type=chunk)

[Financial and Operational Highlights](index=1&type=section&id=Financial%20and%20Operational%20Highlights) [Third Quarter 2024 Financial Highlights](index=1&type=section&id=Third%20Quarter%202024%20Financial%20Highlights) In Q3 2024, Springbig reported $6.4 million revenue, achieved positive Adjusted EBITDA of $0.4 million, and significantly narrowed its net loss to $(0.6) million, driven by a 44% reduction in operating expenses Q3 2024 Financial Performance vs. Q3 2023 (in millions, except per share data) | Metric | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Revenue | $6.4 | $6.9 | | Subscription Revenue | $5.2 | $5.4 | | Gross Profit | $4.4 | $5.3 | | Operating Expenses | $4.5 | $8.0 | | Net Loss | $(0.6) | $(2.7) | | Adjusted EBITDA* | $0.4 | $(0.9) | | Basic Net Loss Per Share | $(0.01) | $(0.07) | - Operating expenses were reduced by **44% year-on-year** to **$4.5 million**, which also represents a **6% sequential reduction** from the second quarter[6](index=6&type=chunk) [Nine Month 2024 Financial Highlights](index=1&type=section&id=Nine%20Month%202024%20Financial%20Highlights) For the first nine months of 2024, revenue was $19.5 million, with a significant profitability turnaround to positive Adjusted EBITDA of $0.9 million, a $4.3 million improvement driven by a 38% reduction in operating expenses - The company achieved **positive Adjusted EBITDA** for the third consecutive quarter, reaching **$0.9 million year-to-date**, a **$4.3 million improvement year-on-year**[5](index=5&type=chunk)[2](index=2&type=chunk) Nine Months 2024 Financial Performance vs. 2023 (in millions) | Metric | Nine Months 2024 | Nine Months 2023 | | :--- | :--- | :--- | | Revenue | $19.5 | $21.3 | | Subscription Revenue | $16.1 | $16.6 | | Gross Profit | $13.8 | $16.8 | | Operating Expenses | $14.2 | $23.0 | | Net Loss | $(0.8) | $(7.0) | | Adjusted EBITDA* | $0.9 | $(3.4) | - Year-to-date operating expenses were reduced by **38%** or **$8.8 million year-on-year**[5](index=5&type=chunk)[10](index=10&type=chunk) [Debt Restructuring](index=1&type=section&id=Debt%20Restructuring) [Amendment to Debt Obligations](index=2&type=section&id=Amendment%20to%20Debt%20Obligations) Springbig extended the maturity of its **$6.4 million** Convertible Notes and **$1.6 million** Term Loan to January 2027, with amended interest rates of **13%** and **17%** respectively, including a rate reduction mechanism tied to Adjusted EBITDA targets, and anticipates strong free cash flow in 2025 - The maturity of the **$6.4 million** Secured Convertible Notes and **$1.6 million** Secured Term Loan has been extended by twelve months to **January 2027**[8](index=8&type=chunk)[5](index=5&type=chunk) - The interest rates were amended to **13%** for the Convertible Notes and **17%** for the Term Loan[8](index=8&type=chunk) - A rate reduction mechanism is in place: for each quarter the company reports an Adjusted EBITDA of at least **$0.9 million**, the interest rate on both debts will be reduced by **0.75%**, up to a maximum of **3.0%**[8](index=8&type=chunk) - The company is now in compliance with all terms of its debt obligations and anticipates generating **strong free cash flow in 2025**[9](index=9&type=chunk) [Financial Outlook](index=2&type=section&id=Financial%20Outlook) [Fourth Quarter 2024 Guidance](index=2&type=section&id=Fourth%20Quarter%202024%20Guidance) For the fourth quarter of 2024, Springbig projects revenue to be between $6.5 million and $6.8 million and expects to continue its trend of profitability with an Adjusted EBITDA in the range of $0.8 million to $1.0 million Q4 2024 Outlook | Metric | Expected Range (in millions) | | :--- | :--- | | Revenue | $6.5 - $6.8 | | Adjusted EBITDA* | $0.8 - $1.0 | [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of September 30, 2024, the company reported total assets of **$7.5 million**, total liabilities of **$16.3 million**, and a total stockholders' deficit of **$(8.8) million**, with cash increasing to **$0.85 million** and current liabilities at **$13.7 million** Balance Sheet Summary (in thousands) | Account | September 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $847 | $331 | | Total current assets | $4,424 | $4,445 | | Total assets | $7,482 | $5,105 | | Total current liabilities | $13,700 | $13,551 | | Total liabilities | $16,325 | $13,779 | | Total stockholders' deficit | $(8,843) | $(8,674) | [Condensed Consolidated Statement of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Operations) The company's net loss significantly narrowed to **$(0.6) million** for Q3 2024 and **$(0.8) million** for the nine-month period, a substantial improvement from prior years driven by reduced operating expenses and a **$1.6 million** gain on note repurchase Statement of Operations Summary (in thousands) | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $6,425 | $6,888 | $19,511 | $21,259 | | Gross Profit | $4,435 | $5,284 | $13,812 | $16,794 | | Total operating expenses | $4,480 | $7,976 | $14,196 | $22,987 | | Loss from operations | $(45) | $(2,692) | $(384) | $(6,193) | | Net loss | $(554) | $(2,742) | $(784) | $(7,032) | [Condensed Consolidated Statement of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the nine months ended September 30, 2024, net cash used in operating activities improved to **$(1.3) million**, with **$1.9 million** provided by financing activities, resulting in a net cash increase of **$0.5 million** and an ending cash balance of **$0.85 million** Cash Flow Summary for Nine Months Ended Sep 30 (in thousands) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,334) | $(3,468) | | Net cash used in investing activities | $(64) | $(259) | | Net cash provided by financing activities | $1,914 | $474 | | Net increase/(decrease) in cash | $516 | $(3,253) | | Cash and cash equivalents, end of period | $847 | $293 | [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) [Explanation of Non-GAAP Measures](index=4&type=section&id=Explanation%20of%20Non-GAAP%20Measures) The company uses non-GAAP measures like EBITDA and Adjusted EBITDA to supplement GAAP results, believing they are key for evaluating operating performance, planning, and strategic decisions, providing useful and comparable investor information - The company discloses **EBITDA** and **Adjusted EBITDA**, which are **non-GAAP measures**, to provide investors with additional information regarding financial results[14](index=14&type=chunk) - Management uses these metrics to **evaluate operating performance**, **generate future operating plans**, and **make strategic decisions**, believing they provide **improved comparability** between fiscal periods[15](index=15&type=chunk) [Reconciliation of Net Loss to Non-GAAP EBITDA and Adjusted EBITDA](index=9&type=section&id=Reconciliation%20of%20Net%20Loss%20to%20Non-GAAP%20EBITDA%20and%20Adjusted%20EBITDA) For Q3 2024, a net loss of **$(0.6) million** was reconciled to an Adjusted EBITDA of **$0.4 million**, and for the nine-month period, a net loss of **$(0.8) million** was reconciled to an Adjusted EBITDA of **$0.9 million**, with key adjustments including interest expense, stock-based compensation, and gains on debt repurchase Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(554) | $(2,742) | $(784) | $(7,032) | | EBITDA | $38 | $(2,277) | $1,322 | $(5,736) | | Adjusted EBITDA | $409 | $(882) | $889 | $(3,370) |

[Cover Page](index=1&type=section&id=Cover%20Page) This section presents the filing details for the Quarterly Report on Form 10-Q, including shares outstanding and company classification - This is a Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, filed by SpringBig Holdings, Inc[1](index=1&type=chunk) - As of August 12, 2024, the company had **46,315,018 shares of common stock** issued and outstanding[1](index=1&type=chunk) - The company is classified as a **Non-accelerated filer**, a **Smaller reporting company**, and an **Emerging growth company**[1](index=1&type=chunk) [Part I – Financial Information](index=4&type=section&id=Part%20I%20%E2%80%93%20Financial%20Information) This part presents the company's unaudited financial statements, management's analysis of financial condition and operations, market risk disclosures, and controls and procedures [Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited condensed consolidated financial statements show continued net losses, a significant working capital deficit, and substantial doubt about the company's going concern ability due to debt covenant default [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2024, the company reported total assets of $7.9 million and total liabilities of $16.4 million, resulting in an $8.5 million stockholders' deficit Condensed Consolidated Balance Sheet Data (in thousands) | Balance Sheet Item | June 30, 2024 (unaudited) | December 31, 2023 (audited) | | :--- | :--- | :--- | | Cash and cash equivalents | $724 | $331 | | Total current assets | $4,724 | $4,445 | | Total assets | $7,947 | $5,105 | | Total current liabilities | $13,636 | $13,551 | | Total liabilities | $16,419 | $13,779 | | Total stockholders' deficit | $(8,472) | $(8,674) | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2024, revenues decreased to $6.6 million, but net loss significantly narrowed to $0.6 million, largely due to a gain on note repurchase for the six-month period Statement of Operations Highlights (in thousands, except per share data) | Metric | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $6,612 | $7,214 | $13,086 | $14,371 | | Gross Profit | $4,697 | $5,703 | $9,377 | $11,510 | | Loss from operations | $(57) | $(1,773) | $(339) | $(3,501) | | Net loss | $(647) | $(2,028) | $(230) | $(4,290) | | Net loss per share (basic and diluted) | $(0.01) | $(0.06) | $(0.01) | $(0.15) | [Condensed Consolidated Statements of Changes in Stockholder's Deficit](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholder's%20Deficit) For the six months ended June 30, 2024, the total stockholders' deficit slightly improved due to stock-based compensation and common stock issuance, partially offsetting the net loss - The total stockholders' deficit improved from **$(8,674) thousand** at the end of 2023 to **$(8,472) thousand** at June 30, 2024[14](index=14&type=chunk)[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2024, net cash used in operating activities was $1.9 million, offset by $2.4 million from financing activities, resulting in a net cash increase of $0.4 million Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,919) | $(2,563) | | Net cash used in investing activities | $(63) | $(90) | | Net cash provided by (used in) financing activities | $2,375 | $(167) | | Net increase/(decrease) in cash | $393 | $(2,820) | | Cash and cash equivalents, end of period | $724 | $726 | [Notes to the Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's business, accounting policies, and financial items, including a going concern warning due to a working capital deficit and debt covenant default - The company has incurred historical losses, resulting in an accumulated deficit of approximately **$36.8 million** and a working capital deficit of **$8.9 million** as of June 30, 2024[34](index=34&type=chunk) - There is substantial doubt about the company's ability to continue as a going concern, as its cash balance fell below the **$1 million** minimum required by its debt agreements, placing it in default, which gives note holders the right to demand immediate repayment[36](index=36&type=chunk)[37](index=37&type=chunk) - In January 2024, the company issued **$6.4 million** of 8% Secured Convertible Notes and **$1.6 million** of 12% Secured Term Notes, using part of the proceeds to repurchase a previous note for **$2.9 million**, resulting in a **$1.6 million** gain[64](index=64&type=chunk)[75](index=75&type=chunk) - For the six months ended June 30, 2024, **97% of total revenue** was generated in the United States, with retail revenue accounting for **$12.9 million** of the **$13.1 million** total[81](index=81&type=chunk)[82](index=82&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a revenue decline and significant expense reductions, while highlighting a critical liquidity crisis with a working capital deficiency and debt covenant default, raising substantial doubt about the company's going concern ability [Business Overview](index=27&type=section&id=Business%20Overview) SpringBig provides a software platform for customer loyalty and marketing automation, primarily serving cannabis retailers and brands in North America - The company is a software platform providing customer loyalty and marketing automation solutions, with a focus on the cannabis industry[116](index=116&type=chunk) - SpringBig serves approximately **1,100 retail and brand clients** across more than **2,500 retail locations** in North America[117](index=117&type=chunk) [Key Operating and Financial Metrics](index=27&type=section&id=Key%20Operating%20and%20Financial%20Metrics) Key metrics show declining revenue and retail clients, but improved net loss and Adjusted EBITDA due to cost-cutting, with net revenue retention falling to 86% Key Metrics Comparison (Q2 2024 vs Q2 2023) | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Revenue (in thousands) | $6,612 | $7,214 | | Net loss (in thousands) | $(647) | $(2,028) | | Adjusted EBITDA (in thousands) | $330 | $(1,138) | | Number of retail clients | 1,113 | 1,439 | | Net revenue retention | 86% | 100% | | Number of messages (million) | 158 | 145 | - Net revenue retention is calculated based on recurring monthly subscription revenue from retail clients over a trailing twelve-month period and excludes excess use revenue[125](index=125&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) For Q2 2024, revenues decreased 8% year-over-year, but total operating expenses were significantly cut by 36%, leading to a substantially smaller loss from operations Comparison of Operations (Three Months Ended June 30, in thousands) | (in thousands) | 2024 | 2023 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $6,612 | $7,214 | $(602) | (8)% | | Gross Profit | $4,697 | $5,703 | $(1,006) | (18)% | | Total operating expenses | $4,754 | $7,476 | $(2,722) | (36)% | | Loss from operations | $(57) | $(1,773) | $1,716 | 97% | - The revenue decrease was impacted by the company ceasing to provide platform access to delinquent clients and a **37% year-over-year decline** in excess use revenue due to budget-conscious clients[145](index=145&type=chunk) - Operating expense reductions were achieved through lower employee headcount, reduced use of offshore developers, and lower G&A costs after delisting from Nasdaq to the OTCQX market[149](index=149&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk) [Liquidity & Capital Resources](index=35&type=section&id=Liquidity%20%26%20Capital%20Resources) The company faces significant liquidity challenges with an $8.9 million working capital deficiency and a debt covenant default, raising substantial doubt about its ability to continue as a going concern - The company has a working capital deficiency of **$8.9 million** as of June 30, 2024[173](index=173&type=chunk)[208](index=208&type=chunk) - In January 2024, the company raised **$6.4 million** from 8% Convertible Notes and **$1.6 million** from 12% Term Notes[169](index=169&type=chunk) - The company is in default on its 12% Secured Term Notes and 8% Secured Convertible Notes because its cash balance is below the required **$1 million** minimum, giving note holders the right to demand immediate repayment[174](index=174&type=chunk) - Management concluded there is substantial doubt about the company's ability to continue as a going concern for the next 12 months[176](index=176&type=chunk) [Quantitative and Qualitative Disclosure About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) The company states that its exposure to market risks, including interest rate fluctuations, inflation, and foreign exchange rate changes, is not material - The company does not believe that inflation has had a material effect on its business[200](index=200&type=chunk) - Exchange rate risk from Canadian operations is considered immaterial as Canadian income and expenses are matched in the local currency[201](index=201&type=chunk) [Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) As of June 30, 2024, the company's disclosure controls and procedures were deemed ineffective due to previously identified material weaknesses in internal control over financial reporting - Management concluded that disclosure controls and procedures were not effective as of June 30, 2024[203](index=203&type=chunk) - The ineffectiveness is due to material weaknesses in internal control over financial reporting previously identified in the 2023 Form 10-K[203](index=203&type=chunk) [Part II – Other Information](index=41&type=section&id=Part%20II%20%E2%80%93%20Other%20Information) This part covers legal proceedings, risk factors, unregistered sales of equity securities, defaults on senior securities, other information, and exhibits [Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in incidental litigation, but management believes current legal proceedings will not materially affect its financial position or operations - The company states that it is not involved in any legal proceedings that are expected to have a significant adverse effect on its financials[93](index=93&type=chunk)[206](index=206&type=chunk) [Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) The primary risk factor is the company's significant working capital deficiency and history of losses, leading to substantial doubt about its ability to continue as a going concern - The company has a significant working capital deficiency (**$8.9 million** as of June 30, 2024) and a history of losses[208](index=208&type=chunk) - There is substantial doubt as to the company's ability to continue as a going concern[208](index=208&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None[210](index=210&type=chunk) [Defaults Upon Senior Securities](index=41&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company is in default of its 12% Secured Term Notes and 8% Secured Convertible Notes due to its cash balance falling below the required $1 million minimum - The company is in default upon its senior securities, specifically the **12% Secured Term Notes** and **8% Secured Convertible Notes**[211](index=211&type=chunk) [Other Information](index=41&type=section&id=Item%205.%20Other%20Information) During the six months ended June 30, 2024, no director or officer adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the period[212](index=212&type=chunk) [Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the CEO and CFO certifications and XBRL interactive data files - Exhibits filed include Sarbanes-Oxley Act certifications from the CEO and CFO, and XBRL data files[214](index=214&type=chunk) [Signatures](index=43&type=section&id=Signatures) This section contains the official signatures for the Quarterly Report on Form 10-Q - The report was signed on August 13, 2024, by Jeffrey Harris, Chief Executive Officer, and Paul Sykes, Chief Financial Officer[219](index=219&type=chunk)

Part I [Part I – Financial Information](index=4&type=section&id=Part%20I%20%E2%80%93%20Financial%20Information) This section presents the unaudited financial statements and related notes for SpringBig Holdings, Inc. for the first quarter of 2024 [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) SpringBig Holdings, Inc. reported a **$0.417 million** net income in Q1 2024, reversing a prior-year loss, largely due to a **$1.573 million** gain on note repurchase [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$9.1 million** as of March 31, 2024, driven by cash and lease assets, while the stockholders' deficit improved to **$(8.0) million** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 (unaudited) | December 31, 2023 (audited) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $1,668 | $331 | | Total current assets | $5,722 | $4,445 | | Total assets | $9,078 | $5,105 | | **Liabilities & Stockholders' Deficit** | | | | Total current liabilities | $7,084 | $13,551 | | Long-term debt, non-current | $7,198 | $— | | Total liabilities | $17,103 | $13,779 | | Total stockholders' deficit | $(8,025) | $(8,674) | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net income reached **$417,000** in Q1 2024, a significant improvement from a **$2.262 million** loss, primarily due to a **$1.573 million** gain on note repurchase and reduced operating expenses Statement of Operations Summary (in thousands) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenues | $6,474 | $7,157 | | Gross Profit | $4,680 | $5,807 | | Loss from operations | $(282) | $(1,728) | | Gain on note repurchase | $1,573 | $— | | **Net income (loss)** | **$417** | **$(2,262)** | | Basic EPS | $0.01 | $(0.08) | | Diluted EPS | $0.01 | $(0.08) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was **$1.878 million** in Q1 2024, offset by **$3.274 million** from financing, leading to a **$1.337 million** increase in cash and cash equivalents Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(1,878) | $379 | | Net cash used in investing activities | $(59) | $(12) | | Net cash provided by (used in) financing activities | $3,274 | $(1,344) | | **Net increase (decrease) in cash** | **$1,337** | **$(977)** | | Cash and cash equivalents at end of period | $1,668 | $2,569 | [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Key notes include the company's delisting to OTCQX, management's going concern assessment, **$8.0 million** in new debt issuance, and a **$1.6 million** gain from note repurchase - The company's common stock was delisted from the Nasdaq Capital Market and began trading on the **OTCQX® Best Market** on September 6, 2023[27](index=27&type=chunk)[28](index=28&type=chunk) - Management concluded that liquidity and cash resources are sufficient for the next twelve months, despite a **$1.4 million** working capital deficit as of March 31, 2024[32](index=32&type=chunk)[34](index=34&type=chunk) - In January 2024, the company issued **$6.4 million** of 8% Secured Convertible Notes and **$1.6 million** of 12% Secured Term Notes, convertible at **$0.15 per share**[63](index=63&type=chunk)[64](index=64&type=chunk) - On January 23, 2024, the company repurchased **$4.4 million** of 6% Senior Secured Convertible Notes for **$2.9 million**, recognizing a **$1.6 million** gain[71](index=71&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a **10%** revenue decline to **$6.5 million** in Q1 2024, offset by a **34%** reduction in operating expenses and a **$1.6 million** gain, resulting in a **$0.4 million** net income and positive Adjusted EBITDA [Key Operating and Financial Metrics](index=24&type=section&id=Key%20Operating%20and%20Financial%20Metrics) Key metrics for Q1 2024 show revenue at **$6.474 million**, a decline in retail clients and net revenue retention, but an increase in messages sent and positive Adjusted EBITDA of **$150,000** Key Metrics Comparison (Q1 2024 vs Q1 2023) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenue (in thousands) | $6,474 | $7,157 | | Net income (loss) (in thousands) | $417 | $(2,262) | | Adjusted EBITDA (in thousands) | $150 | $(1,331) | | Number of retail clients | 1,207 | 1,366 | | Net revenue retention | 89% | 100% | | Number of messages (million) | 637 | 488 | - Adjusted EBITDA is a non-GAAP measure, adjusting net income for interest, taxes, depreciation, amortization, stock-based compensation, bad debt, and other non-recurring items[126](index=126&type=chunk)[130](index=130&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Q1 2024 revenues decreased by **10%** to **$6.474 million**, but a **34%** reduction in operating expenses and a **$1.6 million** gain on note repurchase led to a net income of **$0.4 million** Year-over-Year Change in Operating Results (in thousands) | Item | Q1 2024 | Q1 2023 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $6,474 | $7,157 | $(683) | (10)% | | Gross Profit | $4,680 | $5,807 | $(1,127) | (19)% | | Total operating expenses | $4,962 | $7,535 | $(2,573) | (34)% | | Loss from operations | $(282) | $(1,728) | $1,446 | (84)% | | **Income (loss) after taxes** | **$417** | **$(2,262)** | **$2,679** | **nm** | - The revenue decrease was driven by a **4%** decline in subscription revenue and a **28%** decline in excess use revenue due to client budget consciousness[144](index=144&type=chunk) - Operating expenses were reduced across all categories: Selling, servicing and marketing by **38%**, Technology and software development by **28%**, and General and administrative by **36%**[148](index=148&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk) [Liquidity & Capital Resources](index=29&type=section&id=Liquidity%20%26%20Capital%20Resources) The company improved liquidity in January 2024 by raising **$8.0 million** in new debt and repurchasing prior notes, reducing its working capital deficit to **$1.4 million** as of March 31, 2024 - In January 2024, the company raised **$6.4 million** from 8% Convertible Notes and **$1.6 million** from 12% Term Notes, yielding **$7.5 million** in net cash proceeds[158](index=158&type=chunk) - A portion of new debt proceeds was used to repurchase **$5.2 million** of 6% Senior Secured Notes for **$2.9 million**[160](index=160&type=chunk) Working Capital Summary (in thousands) | Item | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,668 | $331 | | Working capital | $(1,362) | $(9,106) | [Quantitative and Qualitative Disclosure About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) The company identifies market risks from interest rates, inflation, and foreign exchange, but deems their current financial impact immaterial - The company's primary market risks include interest rate fluctuations, inflation, and foreign exchange risk[184](index=184&type=chunk) - Management believes these market risks are currently immaterial to the company's financial condition and results[186](index=186&type=chunk)[187](index=187&type=chunk)[188](index=188&type=chunk) [Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) As of March 31, 2024, disclosure controls and procedures were deemed ineffective due to previously identified material weaknesses, with no material changes during the quarter - Management concluded that disclosure controls and procedures were **not effective** as of March 31, 2024[190](index=190&type=chunk) - No material changes to internal controls over financial reporting occurred during Q1 2024[192](index=192&type=chunk) Part II [Part II – Other Information](index=34&type=section&id=Part%20II%20%E2%80%93%20Other%20Information) This section provides additional information on legal proceedings, risk factors, equity sales, and other corporate matters [Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in incidental litigation, but management anticipates no significant adverse financial impact from current proceedings - The company is involved in incidental litigation but does not expect a significant adverse effect from current proceedings[91](index=91&type=chunk)[194](index=194&type=chunk) [Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) For a comprehensive discussion of business risks, the company refers investors to its 2023 Annual Report on Form 10-K - For a comprehensive understanding of business risks, the company refers to its **2023 Form 10-K**[195](index=195&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) On February 27, 2024, the company issued **255,102 shares** of common stock for advisory services in an unregistered transaction - Issued **255,102 shares** of common stock for advisory services on February 27, 2024, in an unregistered transaction[196](index=196&type=chunk) [Other Information](index=35&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2024 - No directors or officers adopted or terminated **Rule 10b5-1** trading plans in Q1 2024[198](index=198&type=chunk)