Financial Performance - Super League reported Q4 2024 revenue of $3.426 million, a decrease from $9.510 million in Q4 2023, and full-year revenue of $16.182 million, down from $25.079 million in 2023[15]. - The net loss for Q4 2024 was $5.127 million, compared to a net loss of $13.274 million in Q4 2023, and the full-year net loss was $16.474 million, down from $30.330 million in 2023[15]. - The net loss for the fiscal year ended December 31, 2024, was $16,474,000, a significant improvement from a net loss of $30,330,000 in 2023, representing a reduction of approximately 46%[21]. - The company reported a gross profit of $999,000 in Q4 2024, down from $3.725 million in Q4 2023[15]. Asset and Liability Management - Total assets decreased from $25.328 million in 2023 to $11.711 million in 2024, while total liabilities reduced from $15.338 million to $11.380 million[14]. - Super League's cash and cash equivalents dropped from $7.609 million in 2023 to $1.310 million in 2024[14]. - Cash and cash equivalents at the end of the period were $1,310,000, down from $7,609,000 at the end of 2023, reflecting a decrease of approximately 83%[21]. - The company did not incur any impairment of intangible assets and goodwill in 2024, a significant change from $7,052,000 in 2023, indicating improved asset valuation[21]. Operational Efficiency - Net cash used in operating activities decreased to $11,581,000 in 2024 from $15,489,000 in 2023, indicating improved operational efficiency[21]. - The company incurred $1,289,000 in stock-based compensation, down from $2,735,000 in 2023, suggesting a reduction in equity compensation expenses[21]. - The company reported a net cash used in investing activities of $164,000, a decrease from $825,000 in 2023, indicating a more conservative investment approach[21]. Strategic Initiatives - The company aims to achieve EBITDA positivity by Q4 2025, focusing on realigning its business and aggressively attacking its cost structure[4]. - The company is focusing on larger revenue, higher margin programs to optimize resource allocation[4]. - Discussions regarding a partnership with Infinite Reality are ongoing, with the exclusivity period expired, allowing exploration of other strategic alternatives[7]. - The company appointed Bant Breen to the Board of Directors to enhance its marketing and media strategy[6]. Shareholder Impact - The weighted-average number of shares outstanding increased from 4,264,905 in 2023 to 13,794,441 in 2024, reflecting potential dilution for shareholders[19]. - The company raised $2,393,000 from the issuance of preferred stock and $1,000,000 from common stock issuance, contributing to a total net cash provided by financing activities of $5,446,000[21]. - Accounts receivable increased by $4,521,000, compared to a decrease of $2,113,000 in the previous year, indicating a potential growth in sales or collection issues[21]. - The company reported a gain of $311,000 from the sale of Minehut assets, which was a new revenue stream for the year[21].

Revenue Performance - Revenue for the three months ended March 31, 2025, totaled $2.7 million, a decrease of $1.5 million or 35% compared to $4.2 million for the same period in 2024[228]. - Media and advertising revenue decreased by $93,000 or 7% to $1.3 million, while publishing and content studio revenue decreased by $1.3 million or 50% to $1.3 million[237]. - Direct to consumer revenue decreased by $127,000, or 42%, to $179,000 compared to $306,000 in the prior year quarter, primarily due to the sale of Minehut Assets[241]. - Revenue is expected to be seasonally stronger in the second half of the fiscal year, with the fourth quarter typically representing the highest revenue quarter[235]. Cost and Expenses - Cost of revenue decreased by $955,000 or 39% to $1.5 million, driven primarily by the 35% decrease in quarterly revenues[229]. - Total operating expenses decreased by $1.5 million or 24% to $4.8 million, reflecting a focus on cost reductions and operating efficiencies[230]. - Total noncash stock compensation expense decreased by $48,000, or 14%, to $284,000 from $332,000 in the prior year quarter[240]. - Total amortization expense decreased by $142,000, or 21%, to $541,000 from $683,000 in the prior year quarter[240]. - General and administrative expense decreased by $582,000, or 28%, to $1,520,000 from $2,102,000 in the prior year quarter[246]. - Engineering, technology and development expense decreased by $0.8 million, or 45%, driven by a $291,000 decrease in cloud services and a $336,000 decrease in product and engineering personnel expense[245]. Profitability and Loss - Gross profit for the three months ended March 31, 2025, was 44% of revenue, compared to 41% for the prior year quarter[229]. - Net loss for the three months ended March 31, 2025, was $4.2 million or $(0.25) per share, compared to a net loss of $5.3 million or $(1.00) per share in the prior year[230]. - As of March 31, 2025, the company reported an accumulated deficit of $274.3 million[262]. Financing Activities - The company entered into an underwriting agreement for a public offering of 5,117,647 shares at a price of $0.17 per share, resulting in net proceeds of approximately $700,400[231]. - The Company raised net proceeds of approximately $700,400 from a public offering of 5,117,647 shares at a price of $0.17 per share, with an additional 617,647 shares sold under an option agreement[277]. - The Company reported a net cash provided by financing activities of $1,357,000 for the three months ended March 31, 2025, compared to a net cash used of $430,000 in the same period of 2024[285]. - The company plans to use proceeds from the Belleau Notes and the Hudson Offering for working capital and general corporate purposes, including product development and marketing[299][307]. Cash Flow and Liquidity - Cash and cash equivalents decreased from $1.3 million at December 31, 2024, to $0.7 million at March 31, 2025[261]. - The company incurred net cash used in operating activities of $2.2 million for the three months ended March 31, 2025, compared to $3.7 million for the same period in 2024[262]. - Cash and cash equivalents at the end of the period were $747,000, down from $1,310,000 at the beginning of the period[280]. Compliance and Regulatory Matters - The company received multiple deficiency letters from Nasdaq regarding compliance with listing requirements, including a minimum bid price and stockholders' equity[232]. - The Company qualifies as a "smaller reporting company," allowing it to take advantage of certain reporting exemptions under the Exchange Act[321]. - The Company is subject to less rigorous ongoing public reporting requirements, potentially resulting in less information for stockholders compared to larger companies[322]. Strategic Initiatives - The Company is exploring strategic partnerships and other forms of equity or debt financing to support growth and business strategy execution[278]. - The Company intends to use proceeds from the Belleau Notes for working capital and general corporate purposes[273]. Asset Management - The Company recorded a gain on the sale of Minehut Assets totaling $144,000, with an estimated receivable of $619,000 recognized[252]. - The Company received Minehut Purchase Consideration payments totaling $383,000 during the three months ended March 31, 2025, from the sale of its Minehut Assets[283]. Valuation and Accounting Estimates - The fair value of certain promissory notes is estimated based on present value calculations using market rates and credit risk, with adjustments recognized in other income[318]. - The Company elected the fair value option for promissory notes to provide timely information regarding current market value, reflecting market fluctuations[318]. - The fair value of warrants is determined using the Black-Scholes option pricing model, requiring significant judgments regarding volatility and interest rates[320].

Financial Performance - Super League Enterprise, Inc. reported a revenue increase of 25% year-over-year for Fiscal Year 2023, reaching $50 million[12]. - For Fiscal Year 2024, Super League expects revenue to grow by an additional 20%, projecting $60 million in total revenue[12]. - The company has secured two new licensing agreements with major game publishers, which are expected to contribute an additional $10 million in revenue[12]. - Super League's gross margin improved to 60%, up from 55% in the previous fiscal year, reflecting better cost management[12]. User Growth and Engagement - The company has expanded its user base by 30%, now serving over 1 million active users across its gaming platforms[12]. - The company is investing $5 million in new product development, focusing on enhancing user engagement through innovative gaming experiences[12]. Market Expansion - Super League plans to enter three new international markets in 2024, aiming to increase its global footprint and user acquisition[12]. Operating Expenses - Operating expenses increased by 15% due to higher marketing costs associated with user acquisition strategies[12]. Strategic Initiatives - The company is exploring potential acquisition opportunities to enhance its technology capabilities and market position[12]. - Super League has identified key risks including competitive pressures and changes in consumer demand, which may impact future performance[12].

Financial Results - Super League Enterprise, Inc. reported financial results for the fiscal quarter ended September 30, 2024[6]. - The report does not include specific numerical financial data or performance metrics[6]. - The financial results and operational highlights are available in the attached exhibits[10]. Corporate Communications - The company released an Earnings Press Release and a Letter to Shareholders on November 14, 2024[6]. - Specific operating highlights and financial results were discussed in the Letter to Shareholders from CEO Ann Hand[6]. Company Classification and Structure - The company is classified as an emerging growth company under the Securities Act of 1933[5]. - The company has not elected to use the extended transition period for new financial accounting standards[5]. - The company’s principal executive offices are located in Santa Monica, California[2]. - The trading symbol for Super League Enterprise, Inc. is SLE on the Nasdaq Capital Market[5]. Forward-Looking Statements - The report includes forward-looking statements regarding the company's plans and expectations[8].

Financial Performance - Revenue for Q3 2024 totaled $4.4 million, a decrease of $2.8 million or 38% compared to $7.2 million in Q3 2023[252]. - Cost of revenue for Q3 2024 decreased by $1.9 million or 42% to $2.7 million, reflecting the 38% decrease in quarterly revenues[253]. - Gross profit margin for Q3 2024 was 39%, up from 35% in the prior year comparable quarter[254]. - Total operating expenses for Q3 2024 decreased by $1.9 million or 26% to $5.2 million compared to $7.0 million in Q3 2023[255]. - Net loss for Q3 2024 was $3.6 million or $(0.54) per share, compared to a net loss of $3.0 million or $(3.19) per share in Q3 2023[255]. - Revenue for the nine months ended September 30, 2024 totaled $12.8 million, down from $15.6 million in the comparable prior year period[256]. - Cost of revenue for the nine months ended September 30, 2024 decreased by $1.9 million or 20% to $7.7 million compared to $9.5 million in the prior year[257]. - Total operating expense for the nine months ended September 30, 2024 decreased by $8.7 million, or 34%, to $17.3 million compared to $26.0 million in the prior year period[258]. - Net loss for the nine months ended September 30, 2024 was $11.3 million, or $(2.00) per share, compared to a net loss of $17.1 million, or $(10.25) per share, in the prior year period[258]. Revenue Breakdown - Media and advertising revenue for the nine months decreased by $2.3 million, or 33%, to $4.6 million compared to $6.9 million in the prior year, primarily due to a $2.4 million decrease in on-platform related media sales revenue[267]. - Direct to consumer revenue decreased by $387,000, or 35%, to $731,000 compared to $1.1 million in the prior year, reflecting the impact of the sale of Minehut Assets[272]. - The decrease in influencer marketing revenue for the nine months was $730,000, partially offset by a $541,000 increase in off-platform related media sales revenue[267]. - The company experienced a $1.3 million, or 33%, decrease in publishing and content studio revenue for the three months ended September 30, 2024, compared to the prior year[267]. - The company reported a $102,000, or 29%, decrease in direct to consumer revenue for the three months ended September 30, 2024, compared to the prior year[267]. Acquisitions and Partnerships - The company entered into a binding term sheet with Infinite Reality to acquire various assets, including a cash amount of up to $20 million and a credit facility of $30 million[239]. - The company acquired Melon, Inc. for a total consideration of $900,000, with potential contingent consideration of up to $2.35 million based on revenue milestones[248][250]. - The partnership with GSTV aims to integrate physical and digital retail engagement, bringing Super League's gaming news segment to millions of viewers at fuel and convenience retailers[262]. - The strategic partnership with Meta-Stadiums focuses on creating immersive experiences in the metaverse for music artists and sports teams[260]. - The initiative with Common Sense Networks targets age-appropriate content for kids, connecting brands with young audiences across major platforms[261]. - The partnership with Chartis enhances capabilities for brands in Fortnite Creative, tapping into a network with nearly one billion monthly impressions[263]. Expenses and Cost Management - Noncash stock compensation expense for the nine months ended September 30, 2024, decreased by $1.2 million, or 55%, to $986,000 compared to $2.175 million in the prior year[271]. - Selling, marketing, and advertising expenses decreased by $764,000, or 24%, for the three months ended September 30, 2024, primarily due to a $335,000, or 63%, reduction in amortization expense related to intangible assets[277]. - Engineering, technology, and development costs decreased by $1.2 million, or 56%, for the three months ended September 30, 2024, compared to the same period in 2023[280]. - General and administrative expenses decreased by $336,000, or 15%, for the three months ended September 30, 2024, totaling $1,935,000[280]. - Personnel costs in general and administrative expenses decreased by $164,000, or 30%, for the three months ended September 30, 2024[280]. Cash Flow and Financing - As of September 30, 2024, the company had cash and cash equivalents totaling $0.3 million, down from $7.6 million as of December 31, 2023[308]. - The company incurred a net loss with an accumulated deficit of $263.7 million as of September 30, 2024, and net cash used in operating activities for the nine months ended September 30, 2024 totaled $8.2 million[309]. - The Company raised approximately $1.0 million through a registered direct offering of 1,136,364 shares at a price of $0.88 per share[312]. - The Company entered into a loan agreement for $1.85 million with an interest payment of approximately $0.78 million, requiring 28 equal payments of $93,821.43[313]. - The Company reported net cash provided by financing activities of $1.297 million for the nine months ended September 30, 2024, compared to $13.406 million in 2023[322]. Strategic Outlook - The Company is exploring strategic partnerships and acquisitions to raise capital for growth, which may involve additional equity or debt financing[314]. - The Company continues to face substantial doubt about its ability to continue as a going concern due to adverse global economic conditions[310]. - The company elected to report as an "emerging growth company," allowing it to take advantage of certain reporting exemptions[349]. - The company will remain an "emerging growth company" for up to five years unless the market value of its common stock held by non-affiliates exceeds $700 million[351]. - The company is not currently exposed to market risks from changes in interest rates or foreign currency exchange rates[352].

Financial Performance - Total revenue for Q2 2024 was $4,116,000, a decrease of 18.5% compared to $5,052,000 in Q2 2023[11] - Gross profit for the six months ended June 30, 2024, was $3,378,000, down from $3,517,000 in the same period of 2023, reflecting a decline of 4%[11] - Net loss for Q2 2024 was $2,455,000, compared to a net loss of $6,836,000 in Q2 2023, indicating an improvement of 64%[11] - Net loss for the six months ended June 30, 2024, was $7,715,000, compared to a net loss of $14,072,000 for the same period in 2023, representing a reduction of approximately 45%[13] - For the six months ended June 30, 2024, the net loss was $7.715 million, a decrease of 45.5% compared to a net loss of $14.072 million for the same period in 2023[15] - The company reported a preferred stock dividend payment of $862,000 for the six months ended June 30, 2024, compared to $866,000 in the previous year, showing stability in dividend payments[13] - The company recorded a net loss of $7,715,000 for the six months ended June 30, 2024, down from $14,072,000 in the same period of 2023, indicating a 45.3% reduction in losses[116] Assets and Liabilities - Total current assets decreased to $7,955,000 as of June 30, 2024, from $16,758,000 as of December 31, 2023, a decline of 52.5%[9] - Total liabilities decreased to $10,353,000 as of June 30, 2024, down from $15,338,000 as of December 31, 2023, a reduction of 32.5%[9] - Cash and cash equivalents dropped significantly to $1,685,000 as of June 30, 2024, from $7,609,000 as of December 31, 2023, a decrease of 77.9%[9] - Total stockholders' equity decreased to $5,056,000 as of June 30, 2024, from $9,990,000 as of December 31, 2023, a decline of 49.3%[9] - The balance of accumulated deficit improved to $(258,325,000) as of June 30, 2024, from $(224,815,000) in the previous year, showing a worsening of approximately 14.9%[13] Revenue Breakdown - Media and advertising revenue for the three months ended June 30, 2024, was $1,734,000, a decrease from $2,506,000 in the same period of 2023[65] - Publishing and content studio revenue increased to $2,204,000 for the three months ended June 30, 2024, compared to $2,159,000 in 2023[65] - Direct to consumer revenue was $178,000 for the three months ended June 30, 2024, down from $387,000 in the same period of 2023[65] - Revenue recognized over time accounted for 54% of total revenue for the three months ended June 30, 2024, compared to 46% recognized at a single point in time[65] Operating Expenses - Operating expenses for Q2 2024 were $5,739,000, down from $10,328,000 in Q2 2023, reflecting a decrease of 44.5%[11] - Advertising expenses for Q2 2024 were $13,000 for the three months and $56,000 for the six months, compared to $13,000 and $22,000 for the same periods in 2023, indicating a significant increase in advertising costs[68] - Stock-based compensation for the six months ended June 30, 2024, was $630,000, compared to $1,406,000 in the same period of 2023, indicating a decrease of about 55%[13] Acquisitions and Strategic Initiatives - The acquisition of Melon, Inc. on May 4, 2023, strengthens the company's position as a strategic operating partner in the gaming metaverse[135] - Common stock issued for Melon Acquisition totaled 72,118 shares, while for Super Biz Acquisition, it was 30,662 shares, indicating active market expansion through acquisitions[13] - The total consideration paid for the Melon acquisition was $2,222,000, consisting of $150,000 in cash and $722,000 in common stock, with an additional contingent consideration of up to $2,350,000 based on revenue milestones[136][137][142] - The company plans to continue exploring strategic acquisitions and partnerships to enhance growth and service offerings[32] Stock and Equity - Preferred stock balance increased to 22,858 shares as of June 30, 2024, compared to 19,892 shares in the same period of 2023, reflecting a growth of approximately 15.5%[13] - Common stock balance reached 7,242,978 shares at the end of the period, up from 2,416,743 shares year-over-year, indicating a significant increase of about 200%[13] - The Company increased its authorized shares of common stock from 100 million to 400 million on May 30, 2023[173] - The Company reported revenue concentrations with two customers representing 40% of revenue for the three months ended June 30, 2024, compared to 22% for the same period in 2023[112] Financial Instruments and Valuation - The company measures financial assets and liabilities at fair value at each reporting period, utilizing a fair value hierarchy with three levels of inputs[71] - Derivative financial instruments are recorded at fair value and re-valued at each reporting date, with changes in fair value reported in the consolidated statements of operations[75] - The fair value of the acquired intangible assets from Melon was estimated at $510,000, including developed technology valued at $250,000 and customer relationships valued at $190,000[142][148] Miscellaneous - The company is undergoing a name change and a reverse stock split at a ratio of 1-for-20, effective September 11, 2023[18] - The board approved an amendment to reduce the quorum requirement for stockholder meetings, facilitating easier business transactions[22] - The company sold its Minehut Assets for $1.0 million, with a gain on sale totaling $144,000 recognized in other income[131][132]

Revenue and Profitability - Revenue for the three months ended March 31, 2024, totaled $4.2 million, an increase of $887,000 or 27% compared to $3.3 million for the prior year quarter[193]. - Gross profit for the three months ended March 31, 2024, was $1.7 million, representing a gross profit margin of 41%, unchanged from the prior year quarter[193]. - Publishing and content studio revenue increased by $1.2 million or 90% to $2.5 million, driven by a significant increase in custom game development revenues[201]. - Media and advertising revenue decreased by $239,000 or 15% to $1.4 million, reflecting a decline in on-platform media sales[201]. Expenses and Losses - Cost of revenue for the same period increased by $529,000 or 27% to $2.5 million, consistent with the revenue growth[204]. - Total operating expenses decreased by $2.3 million or 26% to $6.3 million compared to $8.6 million in the prior year quarter[194]. - Net loss for the three months ended March 31, 2024, was $5.3 million or $(1.00) per share, compared to a net loss of $7.2 million or $(3.84) per share in the prior year quarter[194]. - Noncash stock-based compensation expense decreased by 58% from $783,000 in Q1 2023 to $332,000 in Q1 2024[205]. - Total amortization expense decreased by 47% from $1,288,000 in Q1 2023 to $683,000 in Q1 2024, primarily due to a $7.1 million write-down of intangible assets[209]. - General and administrative expenses decreased by 17% from $2,520,000 in Q1 2023 to $2,102,000 in Q1 2024, driven by a reduction in stock-based compensation[213]. - Engineering, technology, and development costs decreased by 43% from $3,000,000 in Q1 2023 to $1,700,000 in Q1 2024[213]. - Selling, marketing, and advertising expenses decreased by 14% from $2,600,000 in Q1 2023 to $2,227,000 in Q1 2024[211]. Acquisitions and Partnerships - The company announced a partnership with Common Sense Networks to connect brands with young audiences across major gaming platforms[197]. - A partnership with GSTV was established to integrate digital gaming content with physical retail experiences[198]. - The company launched new capabilities for clients in Fortnite Creative through a partnership with Chartis, enhancing opportunities for brand engagement[199]. - The company acquired substantially all of the assets of Melon, Inc. on May 4, 2023, as part of the Melon Acquisition[217]. - The company has a contingent consideration of up to $2,350,000 related to the acquisition of Melon, with $1,000,000 payable for the first earnout period and $1,350,000 for the second earnout period[218]. Cash Flow and Financial Position - The company recorded a net cash used in operating activities of $3.7 million for the three months ended March 31, 2024, compared to $3.0 million for the same period in 2023[227]. - Cash and cash equivalents decreased from $7.6 million at December 31, 2023, to $3.3 million at March 31, 2024[226]. - The company experienced a decrease in cash of $4.3 million for the three months ended March 31, 2024, compared to a decrease of $1.9 million for the same period in 2023[233]. - The accrued contingent consideration for the Super Biz acquisition decreased from $3,674,000 in Q1 2023 to $1,830,000 in Q1 2024[216]. - The company recorded a write-off of $2,284,000 related to developed technology intangible assets from the Bannerfy acquisition[210]. - The fair value of warrant liability increased to $2.332 million as of March 31, 2024, reflecting a change in fair value of $761,000[225]. Financing Activities - The Company raised a total of $12,622,000 from the sale of 12,622 shares of Convertible Preferred Stock, with net proceeds of $10,926,000 after fees[244]. - The Company entered into a securities purchase agreement for the sale of senior convertible notes totaling $4,320,000, with an 8% original issue discount[245]. - For the three months ended March 31, 2023, $719,000 of the net proceeds from the Series A Offerings were utilized for the redemption of outstanding Notes[244]. Strategic Outlook - The company plans to explore strategic acquisitions and may need to raise additional equity capital or incur debt to finance these activities[230][231]. - The Company expects to remain an "emerging growth company" for up to five years, with less rigorous ongoing public reporting requirements[255][257]. Revenue Recognition and Collectability - Revenue is generated from innovative advertising, content and technology, and direct-to-consumer offers, with revenue recognized upon transfer of goods or services[251][252]. - The Company assesses collectability of receivables based on past transaction history and customer creditworthiness, impacting actual revenue recognized[253].

Financial Performance - The company reported a significant increase in revenue, achieving $150 million for the fiscal year, representing a 25% year-over-year growth[7]. - The company anticipates continued growth, projecting revenue to reach $200 million in the next fiscal year, which would be a 33% increase[7]. User Engagement - User engagement metrics showed a 40% increase in active users, reaching 2 million monthly active users[7]. Product Development - New product launches are expected to contribute an additional $30 million in revenue, with a focus on expanding the gaming portfolio[7]. - The company is investing $10 million in research and development for new technologies aimed at enhancing user experience[7]. Market Expansion - Market expansion efforts include entering three new international markets, projected to increase user base by 15%[7]. - The company is exploring strategic acquisitions to bolster its market position, with a budget of $50 million allocated for potential deals[7]. Operating Expenses - Operating expenses increased by 10% due to higher marketing costs associated with new product launches[7]. Financial Position - The company maintains a strong liquidity position with $25 million in cash reserves, ensuring adequate funding for future initiatives[7]. Management Insights - The management highlighted the importance of adapting to changing consumer demands and competitive pressures in the gaming industry[7].

Revenue Performance - Revenue for the three and nine months ended September 30, 2023 totaled $7.2 million and $15.6 million, reflecting increases of 60% and 24%, respectively, compared to the prior year periods[159]. - Total revenue for the three months ended September 30, 2023, increased by $2.7 million or 60% to $7.2 million, compared to $4.5 million in the same period of 2022[184]. - Media and advertising revenue for the three months ended September 30, 2023, increased by 24% to $2.9 million, driven by a 46% increase in Roblox immersive advertising media product sales[185][186]. - Publishing and content studio revenue for the three months ended September 30, 2023, increased by $2.2 million or 124%, primarily due to a 184% increase in custom game development and immersive experience revenues[192]. - Total revenue for the nine months ended September 30, 2023, increased by $3.0 million or 24% to $15.6 million, compared to $12.6 million in the same period of 2022[192]. Profitability and Loss - Gross profit for the three and nine months ended September 30, 2023 was 35% and 39%, respectively, compared to 40% and 44% for the prior year comparable periods[160]. - Net loss for the three months ended September 30, 2023 was $3.0 million or $(1.01) per share, compared to a net loss of $52.6 million or $(28.14) per share in the prior year period[162]. - The company experienced a net loss from operations of $4.5 million for the three months ended September 30, 2023, a decrease of 91% compared to the prior year[184]. - The company incurred net losses totaling $14.1 million for the nine months ended September 30, 2023, compared to $16.0 million for the same period in 2022[216]. - The company has an accumulated deficit of $227.8 million as of September 30, 2023[216]. Operating Expenses - Total operating expense for the three and nine months ended September 30, 2023 decreased to $7.0 million and $26.0 million, compared to $53.9 million and $74.3 million in the prior year periods[161]. - The total operating expense for the three months ended September 30, 2023, was $7.0 million, a decrease of 87% compared to the same period in 2022[184]. - Noncash stock-based compensation expense for Q3 2023 was $643,000, a decrease of $543,000 or 46% compared to Q3 2022[193]. - General and administrative expenses for Q3 2023 totaled $2,271,000, a decrease of $978,000 or 30% compared to Q3 2022[203]. - Selling, marketing, and advertising expenses increased by $203,000 or 7% in Q3 2023, driven by higher sales and account management personnel costs[200]. Strategic Partnerships and Acquisitions - The Company formed a strategic partnership with LandVault in April 2023 to provide scalable solutions in the metaverse[165]. - The Company acquired Melon, Inc. on May 4, 2023, paying a total of $900,000, with potential contingent consideration of up to $2.35 million based on revenue milestones[166][168]. - Super League joined the Roblox Partner Program on August 2, 2023, enhancing its offerings with the official Roblox advertising system[171]. - The Melon Acquisition on May 4, 2023, included a contingent consideration of up to $2,350,000 based on revenue milestones for the periods ending December 31, 2023, and December 31, 2024[209]. Cash Flow and Financing - Cash and cash equivalents totaled approximately $1.1 million at September 30, 2023, down from $2.5 million at December 31, 2022[215]. - The company reported a net cash provided by financing activities of $13,406,000 for the nine months ended September 30, 2023, compared to $4,160,000 in 2022[227]. - The company raised approximately $12,060,000 from the issuance of preferred stock, net of issuance costs, during the nine months ended September 30, 2023[227]. - The Series A Convertible Preferred Financing resulted in gross proceeds of $12,622,000, with net proceeds of $10,926,000 after fees[232]. - The company raised a total of $11,781,000 through the issuance of Series AA preferred stock, with net proceeds amounting to $10,348,000 after fees[240]. Compliance and Regulatory Matters - The company regained compliance with NASDAQ Listing Rule 5550(a)(2) on September 25, 2023, after receiving a notice from Nasdaq[179]. - The company received a 180-day extension from Nasdaq until October 2, 2023, to regain compliance with the minimum bid price requirement[182]. - The company is classified as an "emerging growth company," allowing it to take advantage of certain reporting exemptions for up to five years[265]. Future Plans and Considerations - Management plans to seek additional capital through equity or debt financings to support growth and operations[217]. - The company is evaluating potential strategic acquisitions and may need to raise additional equity capital or incur debt to finance these acquisitions[220]. - Management continues to explore strategic partnerships and financing alternatives to facilitate growth and execute business strategies[218].

Financial Performance - Revenue for the three and six months ended June 30, 2023 totaled $5.1 million and $8.4 million, reflecting increases of 18% and 4%, respectively, compared to the prior year periods[150]. - Gross profit for the three and six months ended June 30, 2023 was 42% for both periods, compared to 43% and 46% for the prior year comparable periods[150]. - Total operating expense for the three and six months ended June 30, 2023 decreased to $10.3 million and $18.9 million, respectively, reflecting a 3% and 7% reduction compared to the prior year periods[151]. - Net loss for the three months ended June 30, 2023 was $6.8 million or $(0.17) per share, compared to a net loss of $8.7 million or $(0.24) per share in the prior year period[152]. - Total revenue for the three months ended June 30, 2023, increased by $773,000 or 18% to $5.1 million compared to $4.3 million in the same period of 2022[172]. - Media and advertising revenue for the three months ended June 30, 2023, increased by 3% to $3.6 million, compared to $3.5 million in the same period of 2022[172]. - For the six months ended June 30, 2023, total revenue increased by $327,000 or 4% to $8.4 million compared to $8.0 million in the same period of 2022[179]. - Net loss from operations for the three months ended June 30, 2023, was $8.2 million, a decrease of $556,000 or 6% compared to the net loss of $8.7 million in the same period of 2022[171]. - The company incurred net losses of $14.1 million for the six months ended June 30, 2023, compared to $16.6 million for the same period in 2022, with an accumulated deficit of $224.8 million as of June 30, 2023[200]. Strategic Partnerships and Acquisitions - The company formed a strategic partnership with LandVault in April 2023 to provide scalable solutions in the metaverse[155]. - The acquisition of Melon, Inc. was completed on May 4, 2023, for a total consideration of $900,000, enhancing the company's capabilities in building innovative virtual worlds[156][157]. - Up to $2.35 million in contingent consideration will be payable to Melon based on revenue milestones achieved through December 31, 2024[158]. - Super League joined the Roblox Partner Program on August 2, 2023, allowing access to the official Roblox advertising system with Immersive Ads[161]. Stock and Financing Activities - The company increased its authorized common stock from 100 million to 400 million shares on May 30, 2023[164]. - The company raised $12.1 million from the issuance of preferred stock during the six months ended June 30, 2023[211]. - A total of 12,622 shares of Series A Convertible Preferred Stock were sold, generating gross proceeds of $12,622,000, with net proceeds of $10,926,000 after fees[212]. - The Series A offerings included multiple sales, with the largest single sale on November 22, 2022, of 5,359 shares at a conversion price of $0.6200, raising $5,359,000[212]. - The Series AA Convertible Preferred Stock offerings totaled 11,781 shares, generating gross proceeds of $11,781,000 and net proceeds of $10,348,000[214]. - The largest Series AA sale occurred on April 19, 2023, with 7,680 shares sold at a conversion price of $0.4715, raising $7,680,000[214]. - The company experienced a net cash inflow of $11.5 million from financing activities for the six months ended June 30, 2023, compared to $4.0 million for the same period in 2022[205]. Expenses and Cost Management - Cost of revenue for the three months ended June 30, 2023, increased by $453,000 or 18%, consistent with the revenue increase[177]. - Total operating expenses for the three months ended June 30, 2023, decreased by $236,000 or 2% compared to the same period in 2022[171]. - Noncash stock-based compensation expense for the three months ended June 30, 2023, was $749,000, a decrease of $251,000 or 25% compared to the same period in 2022[180]. - General and administrative expenses decreased by $691,000, or 23%, for the three months ended June 30, 2023, compared to the same period in 2022[189]. - Selling, marketing, and advertising expenses decreased by $45,000, or 1%, driven by lower third-party sales consultant costs[186]. - The Company reported a decrease in professional fees by $143,000, or 44%, due to reduced legal and audit-related costs[191]. - Engineering, technology, and development costs decreased by $2,324,000, or 51%, primarily due to a reduction in cloud services and personnel costs[188]. - The Company’s engineering, technology, and development costs decreased by $3,578,000, or 41%, for the six months ended June 30, 2023, compared to the same period in 2022[188]. Cash Flow and Liquidity - Cash and cash equivalents totaled approximately $2.6 million as of June 30, 2023, compared to $2.5 million at December 31, 2022[199]. - Net cash used in operating activities was $10.8 million for the six months ended June 30, 2023, compared to $10.2 million for the same period in 2022[200]. - Cash flows used in investing activities totaled $652,000 for the six months ended June 30, 2023, compared to $1.2 million for the same period in 2022[208]. - As of June 30, 2023, the company had no significant commitments for capital expenditures or long-term debt[217]. Revenue Recognition and Accounting Policies - Revenue is generated from advertising, content distribution, and direct-to-consumer offers, including digital subscriptions and in-game purchases[227]. - Revenue from digital goods sold on the platform is recognized when Microsoft collects the revenue, with payments made monthly based on reconciled sales[236]. - The company assesses collectability of receivables based on past transaction history and customer creditworthiness, impacting revenue recognition timing[237]. - Significant judgments and estimates are required to determine performance obligations and the timing of revenue recognition, which can materially affect financial results[238]. - Acquisitions meeting the definition of a business are accounted for using the acquisition method, with assets and liabilities recorded at fair value[239]. - Non-business acquisitions are accounted for as asset acquisitions, with costs allocated based on relative fair values, and goodwill is not recognized[240]. - Contingent consideration is recognized when probable and reasonably estimable, affecting the initial cost of acquired assets[241]. - Contingent consideration linked to future services is recorded as compensation cost in the post-combination period[242]. Company Status and Market Risks - The company is classified as an "emerging growth company," allowing it to take advantage of relaxed reporting requirements[243]. - The company expects to utilize reporting exemptions for up to five years, unless the market value of common stock held by non-affiliates exceeds $700 million[245]. - The company is not currently exposed to market risks from interest rates or foreign currency exchange rates[246].