Financial Performance - Revenue for the year ended December 31, 2024, was $24.649 million, a decrease from $28.050 million in 2023, representing a decline of approximately 5%[244] - The net loss for 2024 was $1.876 million, significantly improved from a net loss of $10.233 million in 2023[244] - Adjusted EBITDA for 2024 was $1.368 million, compared to a loss of $3.628 million in 2023, indicating a positive turnaround[244] - Revenue decreased by $3.4 million, or 12%, to $24.6 million for the year ended December 31, 2024, compared to $28.1 million in 2023[270] - Total net revenues for the year ended December 31, 2024, were $24,649,000, a decrease of 12.5% compared to $28,050,000 in 2023[337] - Gross profit for 2024 was $17,994,000, down from $21,564,000 in 2023, reflecting a decline of 16.5%[337] - The net loss for 2024 was $1,876,000, significantly improved from a net loss of $10,233,000 in 2023, representing an 81.7% reduction[337] Client Metrics - The number of retail clients decreased to 915 in 2024 from 1,298 in 2023, reflecting a reduction of approximately 29%[244] - Net revenue retention rate fell to 88% in 2024 from 97% in 2023, indicating challenges in maintaining existing client revenue[244] - The number of messages sent by clients increased to 595 million in 2024, up from 578 million in 2023, showing growth in engagement[244] - Clients utilizing the platform accounted for over $7.5 billion in gross merchandise value in the last year[243] Operating Expenses - Total operating expenses decreased by $11.3 million, or 38%, for the year ended December 31, 2024, compared to 2023[273] - Selling, servicing, and marketing expenses decreased by $3.6 million, or 43%, due to lower compensation expenses from reduced headcount[274] - Technology and software development expenses decreased by $2.1 million, or 26%, attributed to lower expenses for offshore contract developers[275] - General and administrative expenses decreased by $5.6 million, or 41%, largely due to reductions in various operational costs[276] Cash Flow and Financing - Cash used in operating activities was $953,000 for 2024, an improvement from $3.976 million in 2023[291] - The company raised $6.4 million through the issuance of 8% Convertible Notes and $1.6 million through 12% Term Notes in January 2024[286] - The net cash provided by financing activities for the year ended December 31, 2024, was $1.9 million, which included $7.2 million from the issuance of Secured Convertible Notes[296] - The net cash provided by financing activities for the year ended December 31, 2023, was $1.1 million, primarily from the issuance of common stock and exercise of employee stock options[297] Assets and Liabilities - Total assets rose to $6,825,000 in 2024, up from $5,105,000 in 2023, indicating an increase of 33.6%[335] - Total liabilities increased to $16,596,000 in 2024 from $13,779,000 in 2023, reflecting a rise of 20.5%[335] - As of December 31, 2024, the Company had a working capital deficit of approximately $1.8 million, including $1.2 million in cash and cash equivalents[351] Shareholder Information - The company issued 1,008,589 common shares during 2024, increasing the total shares outstanding to 46,348,351[339] - The total number of shares authorized for issuance under the 2022 Incentive Plan was 5,125,149 as of December 31, 2024[437] - No options were exercised during the year ended December 31, 2024, with the intrinsic value of options outstanding and exercisable at $0[439] Regulatory and Market Environment - The company plans to explore new expansion opportunities as more jurisdictions legalize cannabis for medical or recreational use[259] - Competition is expected to intensify as the regulatory environment for cannabis stabilizes, potentially attracting new market participants[260] Tax and Accounting - The company has evaluated its tax positions and concluded that there are no uncertain tax positions requiring recognition of a liability as of December 31, 2024, and 2023[304] - The Company’s revenue recognition follows ASC 606, recognizing revenue upon transfer of control of promised services to customers[374] - The Company’s contracts with customers have fixed transaction prices, with a variable component based on the volume of messages[379] Impairments and Losses - The Company recognized an impairment loss on capitalized software costs of approximately $116,000 due to an unsuccessful application implementation in the year ended December 31, 2023[371] - The Company recorded a loss on extinguishment of $0.6 million related to the 2024 Secured Convertible Notes[301] - The Company recorded a loss of $272,000 on the Convertible Note Receivable for the year ended December 31, 2023[403] Other Financial Metrics - Cash and cash equivalents increased to $1,179,000 as of December 31, 2024, compared to $331,000 at the end of 2023, marking a growth of 256.1%[341] - The allowance for credit losses was reduced from $1.60 million in 2023 to $426,000 in 2024, with credit loss expense recorded at $700,000 for 2024[399] - Accounts receivable decreased from $3.69 million in 2023 to $1.95 million in 2024, with total receivables dropping from $4.54 million to $2.64 million[397]
SPRINGBIG HOLDIN(SBIG) - 2024 Q4 - Annual Report