Financial Performance - Total revenues for Q2 2023 were $1.903 million, a decrease of 75.3% compared to $7.722 million in Q2 2022[16] - Net loss for Q2 2023 was $6.017 million, compared to a net loss of $23.030 million in Q2 2022, representing a 73.8% improvement[16] - For the six months ended June 30, 2023, the company reported a net loss of $3,390,000, a significant improvement compared to a net loss of $19,302,000 for the same period in 2022[22] - The company reported a basic net income per share of $(0.21) for Q2 2023, compared to $(0.88) for Q2 2022[16] Assets and Liabilities - Total current assets decreased to $2.785 million as of June 30, 2023, down from $8.853 million at the end of 2022, a decline of 68.5%[14] - Total liabilities decreased to $16.156 million as of June 30, 2023, down from $27.319 million at the end of 2022, a reduction of 40.8%[14] - The total stockholders' deficit increased to $11.255 million as of June 30, 2023, compared to $9.249 million at the end of 2022[14] - Cash and cash equivalents were reported as $0 as of June 30, 2023, down from $7,000 at the end of 2022[14] Cash Flow and Capital Needs - Net cash used in operating activities for the six months ended June 30, 2023, was $6,228,000, compared to $7,246,000 for the same period in 2022[22] - The company generated net cash provided by investing activities of $6,316,000, primarily from the sale of its subsidiary and other assets[22] - The company anticipates needing to raise additional capital to fund its operations and meet working capital requirements[42] - The company has relied on third-party debt funding and faces uncertainty regarding the sufficiency of funds to achieve profitable operations[42] Strategic Actions - The company completed the divestiture of LD Micro on March 3, 2023, as part of its strategic restructuring efforts[9] - The company recognized a gain on the disposal of its subsidiary LD Micro, Inc. amounting to $594,000, following the sale for total consideration of $8,300,000[32] - The company disposed of LD Micro, Inc. on March 3, 2023, which did not qualify as a discontinued operation[32] Market and Operational Risks - The company operates in a highly competitive industry, facing risks from market price volatility and macroeconomic conditions[100] - The company is heavily reliant on converting marketable securities into cash, facing inherent limitations such as legal restrictions and illiquid markets[44] - The company has not demonstrated an ability to raise additional funding on favorable terms, which may impact its operations[44] Revenue Recognition - Revenue is primarily generated from the Sequire SaaS platform and previously from LD Micro, Inc. prior to its disposal in March 2023[196] - The company recognizes revenue from the Sequire SaaS platform when control of the services is transferred to the customer, generally occurring ratably over the contract period[198] - The company applies ASC 606 for revenue recognition, ensuring alignment with the delivery of services and enhancing financial disclosures[184] - Licensing and service revenue is recognized over time on a ratable basis over the contract term, typically 12 months, with services revenue recognized based on elapsed time[200] Financial Instruments and Valuation - The company utilizes a third-party independent valuation expert for fair value measurements of financial instruments[125] - The company’s financial instruments, including cash and accounts receivable, are carried at historical cost, approximating their fair values due to their short-term nature[111] - The company assesses the intent and ability to hold securities for potential recovery in fair value, which is a critical factor in impairment evaluations[151] Impairment and Goodwill - The Company recorded no impairment losses for the three and six months ended June 30, 2023, but recognized an impairment of $10,200,000 to goodwill and $1,481,000 to intangible assets for the same period in 2022[84][85] - Goodwill at June 30, 2023, was $0, down from $7,706,000 at December 31, 2022, related to the acquisition of LD Micro, Inc.[87]

Financial Performance - Revenues for Q1 2023 were $4,014,000, a decrease of 46.6% compared to $7,499,000 in Q1 2022[16] - Net income for Q1 2023 was $2,627,000, compared to $3,728,000 in Q1 2022, reflecting a decline of 29.6%[16] - Basic net income per share for Q1 2023 was $0.09, down from $0.14 in Q1 2022[16] - Net income for the three months ended March 31, 2023, was $2,627,000, a decrease from $3,728,000 in the same period of 2022, representing a decline of approximately 29.6%[20] - The company reported a net cash used in operating activities of $5,114,000 for the three months ended March 31, 2023, compared to $5,328,000 in the same period of 2022[20] Assets and Liabilities - Total current assets decreased to $8,563,000 as of March 31, 2023, down from $8,853,000 at the end of 2022[14] - The company reported a total liabilities of $19,811,000 as of March 31, 2023, down from $27,319,000 at the end of 2022[14] - Total stockholders' deficit improved to $(5,302,000) as of March 31, 2023, compared to $(9,249,000) at the end of 2022[14] - The accumulated deficit as of March 31, 2023, was $59,366,000, and the stockholders' deficit was $5,302,000[38] - The company had $314,000 in excess of the federally insured limit as of March 31, 2023, with no losses experienced on cash balances exceeding FDIC insured limits[131][130] Cash and Cash Equivalents - The company’s cash position increased significantly to $765,000 from $7,000 at the end of 2022[14] - The company had cash on hand of $765,000 at March 31, 2023, compared to $351,000 at the end of the same period in 2022[20] Revenue Sources and Recognition - The Company generates revenue primarily from two sources: the Sequire SaaS platform and LD Micro, Inc. prior to its disposal in March 2023[192] - Revenue from the Sequire SaaS platform consists of licensing subscriptions, managed services, and ancillary data[194] - Revenue is recognized ratably over the contract term, typically 12 months, with no returns, refunds, or warranties offered[196] - The Company applies ASC 606 for revenue recognition, ensuring revenue aligns closely with service delivery[181] - The Company transitioned to accepting only cash as compensation for services in 2023, which is expected to significantly decrease Sequire revenue generated from securities[203] Expenses and Cost Management - General and administrative expenses decreased to $2,966,000 in Q1 2023, down from $5,842,000 in Q1 2022, a reduction of 49.3%[16] Asset Disposal and Acquisitions - The company recorded a gain of $594,000 on the disposal of its subsidiary, LD Micro, Inc.[16] - The company recognized a gain on the disposal of its subsidiary LD Micro, Inc. amounting to $594,000, with total consideration received from the sale being $8,300,000[30] - Cash acquired in connection with the sale of the subsidiary was $4,000,000, and an additional $1,000,000 was acquired from the asset purchase of DNA Holdings, LLC[20] - The company acquired assets from DNA Holdings, LLC for a total fair value of $1,256,000, which included $1,000,000 in cash and $256,000 in digital crypto assets[60] - The acquisition was classified as an asset purchase rather than a business combination, as it did not meet the definition of a business under ASC 805[64] Impairment and Valuation - The company recorded no impairment losses for the three months ended March 31, 2023, and goodwill was $0 as of March 31, 2023, down from $7,706,000 at the end of 2022[82] - The company assessed goodwill for impairment annually, with no impairments recorded for the reporting period[78] - The company evaluates its marketable securities for impairment at each reporting period, with no impairment losses recognized for the three months ended March 31, 2023, and 2022[149] Market Conditions and Risks - The company experienced variability in sales and earnings due to factors such as macroeconomic conditions and market price volatility[95] - The company continuously evaluates market conditions and implements strategic measures to mitigate risks associated with its operations[96] Future Capital Requirements - The company anticipates needing to raise additional capital to fund its operations, indicating reliance on third-party debt-based funding[40] - The company’s future capital requirements will depend on its ability to expand into new markets and potentially acquire other companies[41]

Company Operations and Structure - The Sequire platform enables companies to manage shareholder communications and track investor behaviors, providing actionable insights to maximize ROI[16]. - The company sold its LD Micro business in Q1 2023 and has integrated its own conferences into the Sequire platform[18]. - The company launched the Sequire Investor Conference in Puerto Rico, which will be held for the third year in January 2025[21]. - The company has implemented significant changes to employee benefits in response to the COVID-19 pandemic, including remote work arrangements[30]. - The company aims to attract and retain talent through equity and cash incentive plans to enhance shareholder value[29]. - The Company acquired assets from DNA Holdings, LLC for approximately $4,000,000, including $1,000,000 in cash and a customer database[43][46]. - The Company received $8,300,000 from the sale of LD Micro, consisting of $4,000,000 in cash and shares of the Parent's common stock[60]. - The Company entered into a four-year Sponsorship Agreement related to LD Micro following the merger[60]. - The Company appointed Alan Urban as CFO, who later resigned, along with other key executive resignations[88]. - The Company engaged TAAD as its independent registered public accounting firm for the fiscal year ended December 31, 2022, after dismissing Marcum LLP[89]. Financial Performance - For the years ended December 31, 2022 and 2021, the company reported operating losses of $31,373,000 and $34,762,000, respectively, with an accumulated deficit of $61,728,000 as of December 31, 2022[95]. - Total revenue for the years ended December 31, 2022, was $27,859,000, an increase of $1,152,000 or 4.31% from $26,707,000 in 2021[163]. - Sequire SaaS platform revenue decreased by $368,000 or 1.44% from $25,478,000 in 2021 to $25,110,000 in 2022[194]. - LD Micro conference revenue increased by $1,520,000 or 123.68% from $1,229,000 in 2021 to $2,749,000 in 2022[194]. - Net loss for the year ended December 31, 2022, was $31,638,000, with net cash used in operations amounting to $12,327,000[184]. - Total operating expenses decreased by $2,936,000 or 10.96% from $26,792,000 in 2021 to $23,856,000 in 2022[200]. - Interest expense decreased to $4,391,000 in 2022 from $10,295,000 in 2021, a reduction of 57.35% due to less debt outstanding[1]. - Cash, cash equivalents, and marketable securities decreased by $7,772,000 or 45.81% from $16,965,000 in 2021 to $9,193,000 in 2022[192]. Debt and Financing - The company entered into a senior secured revolving credit facility agreement with ATW for up to $9,450,000, secured by all its assets[37]. - The annual interest rate on the Revolving Loans is 11.5%, with an original issue discount of 10%[39]. - The company has outstanding indebtedness of $1,216,000 in Convertible Debentures and $6,200,000 under a Senior Secured Revolving Credit Facility as of December 31, 2022[97]. - The company incurred an additional $1,010,402 in indebtedness during the year ended December 31, 2023 and in 2024[97]. - The Company must use 15% of gross cash proceeds from the Cash Payment to redeem common stock at a price per share of less than $5.00[65]. - The Company entered into definitive securities purchase agreements for $552,000 in principal amount of Original Issue Discount Convertible Debenture at a 20% discount, and warrants to purchase up to 3,680,000 shares of Class A common stock[67]. - The November 2023 Debentures are convertible at an initial price of $0.25 per share, maturing on November 3, 2024, with no interest[68]. - The Company has the right to prepay the November 2023 Debentures at 120% of their outstanding principal within five trading days' notice[69]. Legal and Regulatory Risks - The company is subject to evolving laws and regulations, including the GDPR and California Consumer Privacy Act, which could impact its operations[27]. - The company faces potential adverse effects on its business due to evolving regulations regarding internet privacy, which could restrict data collection and processing capabilities[110]. - Noncompliance with the European General Data Protection Regulation (GDPR) could lead to penalties of up to €20 million or 4% of global revenues[113]. - The company is subject to various covenants in its loan agreements that could impact its ability to secure additional financing[98]. - The auditors expressed substantial doubt about the company's ability to continue as a going concern due to insufficient capital resources as of December 31, 2022[96]. - The company may need to raise additional capital to meet its debt obligations, which could lead to insolvency if not managed properly[99]. - The company has identified material weaknesses in its internal control over financial reporting, which may harm investor confidence[105]. - The company may face securities litigation due to market price volatility, which could divert management's attention and incur substantial costs[137]. Market and Valuation Risks - The market price of the company's common stock is expected to remain highly volatile, influenced by factors such as competitive product success and changes in growth rates relative to competitors[134]. - The company has unrealized losses from its stock portfolio amounting to approximately $3.8 million as of December 31, 2022, indicating potential valuation risks[125]. - The actual liquidation value of the company's assets may be significantly less than their recorded value in financial statements, especially in volatile market conditions[127]. - A significant portion of the company's assets consists of securities in companies where it holds less than a majority interest, posing a risk of being deemed an investment company under the Investment Company Act of 1940[128]. - The company has $6,200,000 in principal outstanding under its revolving credit facility, which is convertible into common stock at an adjustable price, potentially leading to further dilution for shareholders[136]. - The trading market for the company's shares is dependent on the research published by a limited number of analysts, and any unfavorable reports could negatively impact stock price and trading volume[140]. - The company has previously missed financial performance guidance multiple times, which could lead to a decline in stock price if future results do not meet expectations[138]. Asset Management - The company sold approximately $680,000 of Designated Assets during the fourth quarter and part of the third quarter of 2021[156]. - As of December 31, 2022, the remaining Designated Assets had an aggregate value of approximately $170,000[157]. - The market value of the securities and cash underlying the Designated Assets was approximately $3,925,000 as of December 31, 2021[155]. - The company analyzed its holdings for impairment at least annually, concluding sufficient evidence to support the impairment loss on marketable securities[9]. - Impairment of marketable securities was $3,664,000 in 2022, reflecting a permanent decline in fair value[3]. - Realized loss on designated assets was $1,803,000 in 2022, a substantial increase of 2046.43% compared to a loss of $84,000 in 2021[5].

Financial Performance - Revenues for Q3 2022 were $5.309 million, a decrease of 22.9% compared to $6.888 million in Q3 2021[15] - Net loss for Q3 2022 was $3.819 million, compared to a net loss of $3.829 million in Q3 2021, indicating a slight improvement[15] - The company reported a basic and diluted loss per share of $0.14 for Q3 2022, compared to a loss of $0.15 in Q3 2021[15] - The company reported a net income of $3,728,000 for the quarter ending March 31, 2022, compared to a net loss of $(23,030,000) for the quarter ending June 30, 2022[16] - The company experienced a net loss of $(3,819,000) for the quarter ending September 30, 2022, following a net loss of $(23,030,000) for the quarter ending June 30, 2022[16] - For the nine months ended September 30, 2022, the net loss from continuing operations was $23,120,000, compared to a net loss of $10,804,000 for the same period in 2021[21] Assets and Liabilities - Total assets decreased to $30.625 million as of September 30, 2022, down from $43.676 million at the end of 2021, representing a decline of 30%[13] - Total liabilities increased to $31.432 million as of September 30, 2022, up from $22.930 million at the end of 2021, reflecting a rise of 37%[13] - Cash and cash equivalents decreased significantly to $116,000 from $1.348 million at the end of 2021, a drop of approximately 91.4%[13] - Accounts receivable decreased to $319,000 from $821,000, a decline of 61%[13] - The total stockholders' equity decreased from $20,746,000 on December 31, 2021, to $(807,000) by September 30, 2022, indicating a significant decline[16] Impairments and Costs - The company reported an impairment of goodwill amounting to $10.2 million during the nine months ended September 30, 2022[15] - The company incurred financing costs of $2.377 million in Q3 2022, compared to $528,000 in Q3 2021, an increase of 349%[15] - Employee-related costs rose to $2.185 million in Q3 2022, up from $1.892 million in Q3 2021, an increase of 15.5%[15] - The company reported an impairment of goodwill amounting to $10,200,000 and an impairment of intangibles of $1,481,000 during the nine months ended September 30, 2022[21] Cash Flow and Operations - Cash used in operating activities for the nine months ended September 30, 2022, was $8,680,000, a decrease from $18,670,000 in the same period of 2021[21] - The cash balance at the end of the period was $116,000, significantly lower than $6,823,000 at the end of the same period in 2021[23] - The company expects that existing cash and accounts receivable will not be sufficient to fund operations for the next year[29] - The company has incurred significant losses since inception and has not generated cash in excess of operating expenses for a sustained period[29] Marketable Securities and Investments - As of September 30, 2022, marketable securities were approximately $21.1 million, an increase from $15.6 million as of December 31, 2021[46] - The company recorded a realized loss of approximately $6.5 million from the sale of marketable securities for the nine months ended September 30, 2022, with sales proceeds of approximately $3.4 million and a book basis of approximately $9.9 million[79] - The Company invested $1,000,000 in a simple agreement for future equity (SAFE) with its former BIGToken subsidiary, which is currently valued at $0 due to the subsidiary's financial condition[84] Capital Raising and Financing - The Company anticipates raising additional capital through private and public sales of equity or debt securities, and selling marketable securities, but there are no assurances that financing will be available when needed[33] - The Company issued $16,101,000 in principal amount of Original Issue Discount Senior Secured Convertible Debentures for a net amount of $14,169,000, resulting in net proceeds of approximately $9,100,000 after expenses[93] - The Company has a Senior Secured Revolving Credit Facility agreement allowing for borrowing up to $9,450,000, with an initial advance of $5,580,000[109][110] Stock and Shareholder Matters - The Company has authorized a share repurchase program of up to $10,000,000 for Class A Common Stock, with $9.2 million remaining as of June 30, 2022[120][121] - The Company issued options to purchase 380,000 shares of Class A common stock with an exercise price of $4.25 per share, valued at $1,038,000[136] - The Company recorded stock-based compensation expense of $281,000 for the three months ended September 30, 2022, and a total of $908,000 for the nine months ended September 30, 2022, resulting in a net stock-based compensation benefit of $(231,000) due to a cumulative adjustment[142][143] Strategic Developments - The company divested its LD Micro subsidiary on March 3, 2023, as part of its strategic restructuring[28] - The Company created an Advisory Board on July 17, 2023, to provide strategic guidance in the financial technology sector[181] - A total of 500,000 shares of common stock were granted to Advisory Board members as compensation, aligning their interests with those of the Company's shareholders[182]

Financial Performance - Total revenues for Q2 2022 were $7.722 million, a 7.9% increase from $7.158 million in Q2 2021[15] - Net loss for Q2 2022 was $23.030 million, compared to a net loss of $5.740 million in Q2 2021, representing a significant increase in losses[15] - Basic and diluted loss per share for continuing operations was $(0.88) in Q2 2022, compared to $(0.17) in Q2 2021[15] - Total costs and expenses for Q2 2022 were $7.333 million, up from $6.242 million in Q2 2021, reflecting an increase of 17.5%[15] - Net loss for the six months ended June 30, 2022, was $19.3 million, compared to a net loss of $16.8 million for the same period in 2021[20] Assets and Liabilities - Total current assets decreased to $6.556 million as of June 30, 2022, down from $22.985 million at the end of 2021, a decline of approximately 71.5%[13] - Total liabilities increased to $32.199 million as of June 30, 2022, compared to $22.930 million at the end of 2021, an increase of about 40.5%[13] - The company’s accumulated deficit increased to $(49.657 million) as of June 30, 2022, compared to $(30.355 million) at the end of 2021[13] - The company had outstanding borrowings amounting to approximately $3,817,000, an increase from $633,000 as of December 31, 2021[89] - The Company has a liability of $613,000 recorded in other current liabilities related to an agreement with an institutional investor for the sale of marketable securities[90] Cash Flow and Reserves - The company had cash reserves of $260,000 as of June 30, 2022, a decrease from $1.348 million at the end of 2021[13] - Cash flows from operating activities resulted in a net cash used of $7.2 million for the six months ended June 30, 2022, compared to $12.7 million for the same period in 2021[20] - The company's cash at the end of the period was $260,000, a significant decrease from $10,060,000 at the end of June 30, 2021[22] - As of June 30, 2022, the company reported a net decrease in cash from continuing operations of $1,088,000, compared to an increase of $7,680,000 in the same period of 2021[22] Marketable Securities - As of June 30, 2022, the company had marketable securities valued at approximately $22.1 million, up from $15.6 million as of December 31, 2021[44] - The fair value of marketable securities received for revenue contracts was $18,106,000 for the six months ended June 30, 2022, compared to $18,654,000 in 2021[22] - The Company recorded a realized loss of $899,000 from the sale of marketable securities during the six months ended June 30, 2022, with sales proceeds of approximately $426,000 against a cost basis of approximately $1,326,000[86] Impairments and Write-offs - The company reported a significant impairment of goodwill amounting to $10.200 million in Q2 2022[15] - The company incurred an impairment of $10,200,000 to goodwill and $1,481,000 to intangible assets for the six months ended June 30, 2022[53] - The Company recorded a loss of approximately $10.7 million from the deconsolidation of BIGToken, resulting from a merger transaction that reduced ownership from 66% to approximately 4.99%[74] Revenue Sources - The Company generates revenue primarily from its Sequire SaaS platform and LD Micro subsidiary, with Sequire SaaS platform revenue including licensing subscriptions, managed services, and ancillary data[55] - Sequire platform revenue for Q2 2022 was $6,420,000, a slight decrease of 0.97% compared to $6,483,000 in Q2 2021, while total revenue increased to $7,722,000 from $7,158,000, representing an 7.87% growth year-over-year[134] - Customer securities revenue for the first half of 2022 was $12,101,000, up 40.5% from $8,626,000 in the same period of 2021, while cash revenue decreased to $3,120,000 from $3,449,000, a decline of 9.5%[134] Capital Raising and Financing - The company anticipates raising additional capital through private and public sales of equity or debt securities[32] - The Company issued $16,101,000 in principal amount of Original Issue Discount Senior Secured Convertible Debentures for a net proceeds of approximately $9,100,000 after deducting fees and expenses[91] - The Debentures pay interest at a rate of 12.0% per annum, with amortization payments required after six months from issuance[92] - The Company entered into agreements to borrow against future receipts totaling $4,170,000 for net proceeds of $3,044,000 during the six months ended June 30, 2022[88] Stock and Equity Transactions - The Company approved a share repurchase program allowing up to $10,000,000 for Class A Common Stock repurchases[104] - In 2021, the Company repurchased 155,000 shares for a total cost of $793,000, with $9.2 million remaining for future repurchases as of June 30, 2022[105] - The Company issued a one-time dividend of 36,462,417 shares of Series A Preferred Stock to certain Qualified Recipients[112] - The Company had approximately 228,000 shares of Class A Common Stock reserved for issuance under equity compensation plans[115] Business Operations - The Company operates a unique SaaS platform, Sequire, which provides features for issuers to track shareholder behaviors and trends[31] - The Company has two business units, including a SaaS platform for data analysis and targeted marketing solutions[133] - The Company established an Advisory Board and granted 500,000 shares of common stock to its members as compensation for their services[173][174]