lective Audience(CAUD) - 2024 Q2 - Quarterly Report

Acquisition Activities - The Company entered into a Binding LOI to acquire 100% of BeOp, a French company specializing in conversational advertising, with the acquisition expected to close following certain conditions[96]. - The Company issued 3,006,667 shares of restricted common stock as part of the BeOp acquisition, retaining 666,667 shares for a 12-month holdback period[98]. - An earnout payment of €200,000 worth of common stock will be made to BeOp sellers upon achieving forecasted gross revenue and EBITDA for 2024 and 2025[98]. - The Company completed the acquisition of DSL Digital, LLC, acquiring 51% of its membership interests in exchange for 3,242,875 shares of common stock[101]. Financial Performance - The financial consolidation from the DSL acquisition improved the consolidated net income and overall stockholders' equity for the period[102]. - The Company reported zero revenue for the three months ended June 30, 2024, indicating no change from the previous year[117]. - Operating cash flows for the six months ended June 30, 2024 were negative at $(1,167,333), representing a 347% increase in cash used compared to the same period in 2023[131]. - The Company incurred general and administrative expenses of $808,495 for the three months ended June 30, 2024, a 333% increase from the previous year[124]. - Total other expenses for the three months ended June 30, 2024 were $377,719, an 11% increase from $341,146 in the same period of 2023[124]. - As of June 30, 2024, the Company reported cash of $838,225 and a working capital deficiency of $2,528,595[127]. Compliance and Regulatory Issues - The Company’s common stock was subject to delisting from Nasdaq due to non-compliance with market value requirements, with an appeal filed on July 1, 2024[108]. - The Company received a Bid Price Notice from Nasdaq for not maintaining a closing bid price above $1.00 per share for 32 consecutive trading days, with a compliance period until October 16, 2024[113]. - The Company received a notification from Nasdaq regarding non-compliance with listing rules due to the late filing of its Quarterly Report on Form 10-Q for the quarter ended March 31, 2024[118]. Capital and Liquidity Needs - The Company expects to need additional capital to satisfy liquidity needs, with a potential financing source of up to $30 million from the Sponsor[126]. - The Company has closed its Trust Account post-business combination, using remaining funds for working capital and operational financing[127]. - The Company is obligated to pay $1,500,000 in deferred underwriting commissions upon consummation of its initial business combination[136]. Market Trends and Challenges - The Company has observed a significant trend towards digital streaming platforms, necessitating increased investments in original content and technology upgrades[140]. - The Company faces uncertainties due to fluctuating advertising revenues and regulatory changes impacting its operations and financial performance[140].