Revenue Performance - Revenue for the three months ended March 31, 2025, totaled $2.7 million, a decrease of $1.5 million or 35% compared to $4.2 million for the same period in 2024[228]. - Media and advertising revenue decreased by $93,000, or 7%, to $1.3 million, while publishing and content studio revenue decreased by $1.3 million, or 50%, to $1.3 million[237]. - The number of customers contributing over 10% of revenue increased to three, representing 50% of total revenue, compared to three customers representing 36% in the prior year[237]. - Revenue is expected to be seasonally stronger in the second half of the fiscal year, with the fourth quarter typically representing the highest revenue quarter[235]. Cost and Expenses - Cost of revenue decreased by $955,000, or 39%, to $1.5 million, driven primarily by the 35% decrease in quarterly revenues[229]. - Total operating expenses decreased by $1.5 million, or 24%, to $4.8 million, reflecting a focus on cost reductions and operating efficiencies[230]. - General and administrative expense decreased by $582,000, or 28%, to $1,520,000 from $2,102,000 in the prior year[246]. - Engineering, technology and development expense decreased by $0.8 million, or 45%, driven by a $291,000 reduction in cloud services and a $336,000 reduction in product and engineering personnel expense[245]. - Total noncash stock compensation expense decreased by $48,000, or 14%, to $284,000 from $332,000 in the prior year[240]. - Total amortization expense decreased by $142,000, or 21%, to $541,000 from $683,000 in the prior year[240]. Net Loss and Financial Position - Net loss for the three months ended March 31, 2025, was $4.2 million or $(0.25) per share, compared to a net loss of $5.3 million or $(1.00) per share in the prior year[230]. - As of March 31, 2025, the company reported an accumulated deficit of $274.3 million, with net cash used in operating activities totaling $2.2 million for the three months ended March 31, 2025, compared to $3.7 million for the same period in 2024[262]. - Cash and cash equivalents decreased to $0.7 million as of March 31, 2025, down from $1.3 million at December 31, 2024[261]. - The company incurred total interest expense of $1,402,000 for the three months ended March 31, 2025, significantly higher than $19,000 for the same period in 2024[259]. Financing Activities - The company entered into an underwriting agreement for a public offering of 5,117,647 shares at a price of $0.17 per share, resulting in net proceeds of approximately $700,400[231]. - The Company raised net proceeds of approximately $700,400 from a public offering of 5,117,647 shares at a price of $0.17 per share, with an additional 617,647 shares sold under an option agreement for gross proceeds of approximately $104,999[277]. - The Company reported a net cash provided by financing activities of $1,357,000 for the three months ended March 31, 2025, compared to a net cash used of $430,000 in the same period in 2024[285]. - The Company anticipates seeking additional capital through future issuances of common stock, preferred stock, or debt financings to support its operations and growth[263]. Strategic Agreements and Notes - The company entered into the Agile II Loan Agreement, issuing the Agile II Note with a total interest payment of approximately $1.05 million, requiring 32 equal payments of $110,937 starting February 17, 2025[264]. - The company issued the Diagonal Note for $300,000, maturing on December 30, 2025, with an interest rate of 10% per annum[265]. - The Belleau Purchase Agreement involves issuing Belleau Notes with an aggregate principal amount of $1,500,000, with the first sale generating gross proceeds of $300,000[270]. - The Company continues to explore strategic acquisitions and may need to raise additional equity capital or incur debt to finance these acquisitions[278]. Revenue Recognition and Accounting Estimates - Revenue is recognized when control of goods or services is transferred to customers, with specific criteria including contract approval and collectability assurance[314]. - Management's estimates regarding collectability impact the actual revenue recognized each period, which could materially affect financial results[315]. - Significant judgments and estimates are required to determine performance obligations and the timing of revenue recognition, potentially affecting periodic financial results[316]. - The fair value of certain promissory notes is estimated based on present value calculations using market rates and credit risk, with adjustments recognized in other income[318]. Company Status and Reporting - The Company qualifies as a "smaller reporting company," allowing it to take advantage of certain reporting exemptions under the Exchange Act[321]. - The Company is subject to less rigorous ongoing public reporting requirements, which may result in stockholders receiving less information compared to more mature public companies[322]. - The Company continues to be an "emerging growth company" until December 31, 2024, allowing it to benefit from various reporting exemptions[324].
Super League Enterprise(SLE) - 2025 Q1 - Quarterly Report