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]. - Direct to consumer revenue decreased by $127,000, or 42%, to $179,000 compared to $306,000 in the prior year quarter, primarily due to the sale of Minehut Assets[241]. - 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]. - Total noncash stock compensation expense decreased by $48,000, or 14%, to $284,000 from $332,000 in the prior year quarter[240]. - Total amortization expense decreased by $142,000, or 21%, to $541,000 from $683,000 in the prior year quarter[240]. - General and administrative expense decreased by $582,000, or 28%, to $1,520,000 from $2,102,000 in the prior year quarter[246]. - Engineering, technology and development expense decreased by $0.8 million, or 45%, driven by a $291,000 decrease in cloud services and a $336,000 decrease in product and engineering personnel expense[245]. Profitability and Loss - Gross profit for the three months ended March 31, 2025, was 44% of revenue, compared to 41% for the prior year quarter[229]. - 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[262]. 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[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 of 2024[285]. - The company plans to use proceeds from the Belleau Notes and the Hudson Offering for working capital and general corporate purposes, including product development and marketing[299][307]. Cash Flow and Liquidity - Cash and cash equivalents decreased from $1.3 million at December 31, 2024, to $0.7 million at March 31, 2025[261]. - The company incurred net cash used in operating activities of $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 at the end of the period were $747,000, down from $1,310,000 at the beginning of the period[280]. Compliance and Regulatory Matters - The company received multiple deficiency letters from Nasdaq regarding compliance with listing requirements, including a minimum bid price and stockholders' equity[232]. - 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, potentially resulting in less information for stockholders compared to larger companies[322]. Strategic Initiatives - The Company is exploring strategic partnerships and other forms of equity or debt financing to support growth and business strategy execution[278]. - The Company intends to use proceeds from the Belleau Notes for working capital and general corporate purposes[273]. Asset Management - The Company recorded a gain on the sale of Minehut Assets totaling $144,000, with an estimated receivable of $619,000 recognized[252]. - The Company received Minehut Purchase Consideration payments totaling $383,000 during the three months ended March 31, 2025, from the sale of its Minehut Assets[283]. Valuation and Accounting Estimates - 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]. - The Company elected the fair value option for promissory notes to provide timely information regarding current market value, reflecting market fluctuations[318]. - The fair value of warrants is determined using the Black-Scholes option pricing model, requiring significant judgments regarding volatility and interest rates[320].
SUPER LEAGUE GAM(SLGG) - 2025 Q1 - Quarterly Report