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]
SUPER LEAGUE GAM(SLGG) - 2024 Q2 - Quarterly Report