Arena (AREN)2024-08-19 11:00Financial Performance - For the three months ended June 30, 2024, digital advertising revenue decreased by 10.0% compared to the same period in fiscal 2023, while for the six months ended June 30, 2024, it increased by 3.2% compared to the same period in 2023 [160]. - Total revenue for the three months ended June 30, 2024, decreased by $6,889, or 20.2%, to $27,183 compared to $34,072 for the same period in 2023, driven by declines in both print and digital revenue [186]. - Digital advertising revenue decreased by 10.0% to $20,718 for the three months ended June 30, 2024, down from $23,019 in the prior year [187]. - The company recorded a net loss from continuing operations of $6,938 for the three months ended June 30, 2024, an improvement of $4,589 compared to a loss of $11,527 in the same period of 2023 [181]. - The net loss from continuing operations improved to $19,658 for the six months ended June 30, 2024, compared to a loss of $26,051 in the prior year, reflecting an improvement of $6,393 [197]. - Total revenue for the six months ended June 30, 2024 was $56,124, a decrease of $6,366 or 10.2% from $62,490 in the same period of 2023 [199]. Revenue and Expenses - RPM for the three and six months ended June 30, 2024, was $22.90 and $21.22, respectively, reflecting increases of 9% and 21% compared to the same periods in 2023 [162]. - Gross profit for the three months ended June 30, 2024, was $10,718, down from $13,217 in the prior year, reflecting a decrease of $2,499 [183]. - Operating expenses for the three months ended June 30, 2024, totaled $13,296, a reduction of $6,274 compared to $19,570 in the same period of 2023 [181]. - The gross profit for the six months ended June 30, 2024 was $19,651, a decrease of $3,894 or 16.5% from $23,545 in the prior year [199]. - Selling and marketing expenses for the three months ended June 30, 2024 were $3,751, down $3,153 or 45.7% from $6,904 in the prior year [191]. - General and administrative expenses decreased to $8,632 for the three months ended June 30, 2024, a reduction of $2,969 or 25.6% from $11,601 in the same period last year [193]. Cash Flow and Working Capital - As of June 30, 2024, the company incurred a net loss from continuing operations of $19,658 and had cash on hand of $6,085 with a working capital deficit of $231,579 [166]. - For the six months ended June 30, 2024, the net cash used in operating activities was $5,161, a decrease from $16,400 in the same period of 2023, primarily due to reduced cash paid to employees and vendors [176]. - The company has $12,252 available for additional use under its working capital loan with Simplify, with an outstanding balance of $12,748 as of June 30, 2024 [169]. - As of June 30, 2024, the company reported a working capital deficit of $231,579, an increase from $145,622 as of December 31, 2023, with current assets of $35,352 and current liabilities of $266,931 [175]. Strategic Initiatives - The company plans to refinance or modify the terms of its current debt, complete a Business Combination, or explore alternative structures to address substantial doubt about its ability to continue as a going concern [168]. - The company operates more than 360 Publisher Partners across key verticals, leveraging its Platform to enhance audience engagement and monetization [151]. - The company is focused on adding new Publisher Partners in key verticals to expand the scale of unique users interacting on the Platform [152]. - The company has experienced significant growth in digital advertising revenue, which is critical for its overall business performance [160]. Accounting and Compliance - The company has appointed KPMG LLP as its independent registered public accounting firm, effective immediately [156]. - Management's financial analysis is based on GAAP-compliant condensed consolidated financial statements, with estimates that may differ from actual results [223]. - No material changes to critical accounting policies and estimates compared to the previous Annual Report for the year ended December 31, 2023 [224]. - Recent accounting pronouncements are discussed in the notes to the condensed consolidated financial statements [225]. - Market risk disclosures are not applicable to smaller reporting companies as defined by SEC regulations [226]. Impairments and Other Costs - The company recognized a loss on impairment of assets of $39,391 related to discontinued operations for the six months ended June 30, 2024 [172]. - Total liabilities from discontinued operations amounted to $97,516, offset by total assets of $1,014 as of June 30, 2024 [172]. - Stock-based compensation costs decreased significantly by $2,135 or 76.5% to $656 for the six months ended June 30, 2024 [204]. - Liquidated damages recorded were $152 for the six months ended June 30, 2024, a decrease of 50.0% from $304 in the same period of 2023 [212]. - Employee retention credit refers to payroll-related tax credits under the Cares Act [221]. - Employee restructuring payments include severance payments for restructuring arrangements for the periods ended June 30, 2024, and 2023 [222].