Super League Enterprise(US:SLE)2025-11-14 22:12Financial Performance - Revenue for the three months ended September 30, 2025 totaled $2.4 million, a decrease of $2.0 million or 45% compared to $4.4 million for the same period in 2024[329] - Revenue for the nine months ended September 30, 2025 totaled $8.1 million, a decrease of $4.6 million or 36% compared to $12.8 million for the same period in 2024[335] - Total revenue decreased by $2.0 million, or 45%, to $2.4 million compared to $4.4 million in the prior year quarter[377] - The Company experienced a 36% decrease in revenue for the nine months ended September 30, 2025, totaling $8,142,000 compared to $12,756,000 in 2024[374] - Media and advertising revenue decreased by $513,000, or 33%, to $1.0 million compared to $1.5 million in the prior year quarter[377] - Publishing and content studio revenue decreased by $1.2 million, or 47%, to $1.4 million compared to $2.6 million in the prior year quarter[377] - Media and advertising revenue for the nine months ended September 30, 2025 decreased by $864,000, or 19%, to $3.8 million compared to $4.6 million in the prior year period[378] - Publishing and content studio revenue for the nine months ended September 30, 2025 decreased by $3.3 million, or 45%, to $4.1 million compared to $7.4 million in the prior year period[378] Cost and Expenses - Cost of revenue for the three months ended September 30, 2025 decreased $1.4 million, or 50% to $1.3 million, compared to $2.7 million in the prior year quarter, resulting in a gross profit margin of 45%[330] - Total operating expense for the three months ended September 30, 2025 decreased $1.0 million, or 20% to $4.1 million, compared to $5.2 million in the prior year quarter[333] - Cost of revenue for the nine months ended September 30, 2025 decreased $3.1 million, or 40% to $4.6 million, compared to $7.7 million in the prior year period[336] - Total operating expense for the nine months ended September 30, 2025 decreased $3.8 million, or 22% to $13.4 million, compared to $17.3 million in the prior year period[337] - Selling, marketing and advertising expense decreased by $698,000, or 29%, for the three months ended September 30, 2025[384] - Engineering, technology and development expense decreased by $247,000, or 27%, for the three months ended September 30, 2025[387] - General and administrative expenses for the three months ended September 30, 2025, decreased by $170,000 (9%) compared to the same period in 2024, totaling $1,765,000[389] - Total general and administrative expenses for the nine months ended September 30, 2025, decreased by $1,620,000 (25%) compared to the same period in 2024, totaling $4,938,000[389] Net Loss and Cash Flow - Net loss for the three months ended September 30, 2025 was $3.6 million, unchanged from the net loss of $3.6 million in the comparable prior year quarter[333] - The Company reported a net cash used in operating activities of $6.8 million for the nine months ended September 30, 2025, compared to $8.2 million for the same period in 2024, reflecting a decrease of approximately 17%[414] - The company reported net cash provided by financing activities of $5.6 million for the nine months ended September 30, 2025, compared to $1.3 million for the same period in 2024[420] Workforce and Cost Reduction - The company executed a 35% workforce reduction in April 2025, which is expected to reduce fiscal year operating costs by approximately $2.7 million through December 31, 2025[324] - The company achieved a 29% reduction in operating expenses for the three months ended September 30, 2025, and a 24% reduction for the nine months ended September 30, 2025, compared to the same periods in 2024[412] Financing Activities - On October 22, 2025, the company entered into Securities Purchase Agreements for a PIPE Offering, raising approximately $20 million before deducting offering costs[342] - The company issued a $4.5 million Convertible Note with an annual interest rate of 8%, scheduled to commence amortization in January 2026[326] - The Company completed equity financings totaling $20.0 million in gross proceeds in October 2025, providing significant additional working capital and liquidity[410] - The Company raised approximately $670,000 from the May III Offering by selling 79,750 shares at $4.80 per share, closing on June 2, 2025[454] - The May II Offering generated net proceeds of approximately $380,000 from the sale of 104,167 shares at a public price of $4.80 per share[456] Asset Sales and Acquisitions - The Company sold 100% of the membership interests of InPvP for $350,000, retaining rights to ad sales and brand integration for two years[355][356] - The Company sold its Mineville assets for cash consideration totaling $350,000, with no gain or loss recognized[392] - The company recorded a gain on the sale of Minehut assets totaling $144,000 for the three and nine months ended September 30, 2024[394] - The company recognized additional gains on the sale of Minehut assets totaling $343,000 for the nine months ended September 30, 2025[394] - The acquisition of Supersocial expanded the Company's partnerships and included multiple live branded games on Roblox[354] Stock and Equity - The Company increased its authorized shares of Common Stock from 400 million to 750 million through an amended certificate[351] - The Company issued 2,333,057 Series B Warrants with an exercise price of $1.00, exercisable after one year from issuance[349] - The Company has the right to direct Yield Point to purchase up to $20,000,000 in shares of common stock under the YP Equity Purchase Agreement[459] Compliance and Reporting - The Company regained compliance with the minimum bid price requirement under NASDAQ Listing Rule 5550(a)(2) on July 8, 2025[367] - The stockholders' equity reported in the Annual Report for the year ended December 31, 2024, was $170,000, which did not meet the $2,500,000 requirement for continued listing on the Nasdaq Capital Market[371] - The company qualifies as a "smaller reporting company," allowing it to take advantage of certain reporting exemptions[477] - The company expects to utilize reporting exemptions until it no longer qualifies as a smaller reporting company[479] - The company ceased being an "emerging growth company" as of December 31, 2024, but continues to be a smaller reporting company[480] Revenue Recognition and Accounting Policies - The Company generates revenue from innovative advertising, content and technology, and direct-to-consumer offers[468] - Revenue is recognized when the Company transfers promised goods or services to customers, reflecting the consideration expected in exchange[469] - The company assesses the collectability of receivables based on past transaction history and customer creditworthiness, impacting revenue recognition timing and amounts[470] - Significant judgments and estimates are required to determine revenue arrangements, which can materially affect financial results[472] - The fair value of certain promissory notes is measured at estimated fair value on a recurring basis, impacting other comprehensive income and interest expense[473] - The estimated fair value adjustments for promissory notes are recognized in other income (expense) and interest expense, reflecting market fluctuations[474] - The company uses the Black-Scholes option pricing model to determine the fair value of warrants, with significant judgments affecting financial results[476]