Fluent(FLNT) - 2023 Q1 - Quarterly Report

FORM 10-Q This section presents the Quarterly Report on Form 10-Q for Fluent, Inc., covering essential company identification and filing details UNITED STATES SECURITIES AND EXCHANGE COMMISSION This section identifies the filing as a Quarterly Report on Form 10-Q for Fluent, Inc., detailing the registrant's basic information, stock exchange listing, and filing status - The document is a Quarterly Report on Form 10-Q for Fluent, Inc. for the period ended March 31, 2023[46][53][136] Registrant Information | Field | Value | | :--- | :--- | | Exact name of registrant | FLUENT, INC. | | State or other jurisdiction of incorporation or organization | Delaware | | I.R.S. Employer Identification No. | 77-0688094 | | Address of principal executive offices | 300 Vesey Street, 9th Floor, New York, New York 10282 | | Telephone number | (646) 669-7272 | | Trading Symbol(s) | FLNT | | Name of each exchange on which registered | The NASDAQ Stock Market, LLC | | Common Stock, $0.0005 par value per share outstanding as of May 12, 2023 | 81,037,845 shares | - The registrant is a non-accelerated filer and a smaller reporting company, having filed all required reports electronically during the preceding 12 months[48][79] PART I - FINANCIAL INFORMATION This part presents the unaudited consolidated financial statements and management's discussion and analysis for the first quarter of 2023 ITEM 1. FINANCIAL STATEMENTS. This item provides the Company's unaudited consolidated financial statements for the three months ended March 31, 2023 and 2022, including the balance sheets, statements of operations, changes in shareholders' equity, and cash flows, accompanied by comprehensive notes detailing accounting policies and specific financial accounts Consolidated Balance Sheets This section presents the Company's financial position, detailing assets, liabilities, and shareholders' equity as of March 31, 2023, and December 31, 2022 Consolidated Balance Sheets (Amounts in thousands) | ASSETS | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $26,567 | $25,547 | | Accounts receivable, net | $56,759 | $63,164 | | Prepaid expenses and other current assets | $5,588 | $3,506 | | Total current assets | $88,914 | $92,217 | | Property and equipment, net | $861 | $964 | | Operating lease right-of-use assets | $4,743 | $5,202 | | Intangible assets, net | $27,650 | $28,745 | | Goodwill | $33,354 | $55,111 | | Other non-current assets | $1,648 | $1,730 | | Total assets | $157,170 | $183,969 | | LIABILITIES AND SHAREHOLDERS' EQUITY | | | | Accounts payable | $12,929 | $6,190 | | Accrued expenses and other current liabilities | $33,189 | $35,626 | | Deferred revenue | $1,005 | $1,014 | | Current portion of long-term debt | $5,000 | $5,000 | | Current portion of operating lease liability | $2,349 | $2,389 | | Total current liabilities | $54,472 | $50,219 | | Long-term debt, net | $34,404 | $35,594 | | Operating lease liability | $3,242 | $3,743 | | Other non-current liabilities | $2,128 | $458 | | Total liabilities | $94,246 | $90,014 | | Shareholders' equity | | | | Preferred stock — $0.0001 par value, 10,000,000 Shares authorized; Shares outstanding — 0 shares for both periods | — | — | | Common stock — $0.0005 par value, 200,000,000 Shares authorized; Shares issued — 85,545,397 and 84,385,458, respectively; and Shares outstanding — 80,933,828 and 80,085,306, respectively | $43 | $42 | | Treasury stock, at cost — 4,611,569 and 4,300,152 Shares, respectively | $(11,407) | $(11,171) | | Additional paid-in capital | $424,531 | $423,384 | | Accumulated deficit | $(350,243) | $(318,300) | | Total shareholders' equity | $62,924 | $93,955 | | Total liabilities and shareholders' equity | $157,170 | $183,969 | Consolidated Statements of Operations This section outlines the Company's financial performance, including revenue, expenses, and net loss for the three months ended March 31, 2023, and 2022 Consolidated Statements of Operations (Amounts in thousands, except share and per share data) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Revenue | $77,254 | $89,063 | | Cost of revenue (exclusive of depreciation and amortization) | $58,272 | $67,562 | | Sales and marketing | $4,813 | $3,852 | | Product development | $4,938 | $4,556 | | General and administrative | $12,325 | $11,287 | | Depreciation and amortization | $2,359 | $3,307 | | Goodwill impairment and write-off of intangible assets | $25,700 | $128 | | Total costs and expenses | $108,407 | $90,692 | | Loss from operations | $(31,153) | $(1,629) | | Interest expense, net | $(689) | $(384) | | Loss before income taxes | $(31,842) | $(2,013) | | Income tax expense | $(101) | — | | Net loss | $(31,943) | $(2,013) | | Basic and diluted loss per share | $(0.39) | $(0.02) | | Weighted average number of shares outstanding (Basic & Diluted) | 81,906,913 | 80,889,052 | Consolidated Statements of Changes in Shareholders' Equity This section details changes in the Company's shareholders' equity, including common stock, treasury stock, additional paid-in capital, and accumulated deficit Consolidated Statements of Changes in Shareholders' Equity (Amounts in thousands, except share and per share data) | Item | Shares (Dec 31, 2022) | Amount (Dec 31, 2022) | Treasury Shares (Dec 31, 2022) | Treasury Amount (Dec 31, 2022) | Additional Paid-in Capital (Dec 31, 2022) | Accumulated Deficit (Dec 31, 2022) | Total Equity (Dec 31, 2022) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Balance at December 31, 2022 | 84,385,458 | $42 | 4,300,152 | $(11,171) | $423,384 | $(318,300) | $93,955 | | Vesting of restricted stock units and issuance of stock under incentive plans | 1,159,939 | $1 | — | — | $(1) | — | — | | Increase in treasury stock resulting from shares withheld to cover statutory taxes | — | — | 311,417 | $(236) | — | — | $(236) | | Share-based compensation | — | — | — | — | $1,148 | — | $1,148 | | Net loss | — | — | — | — | — | $(31,943) | $(31,943) | | Balance at March 31, 2023 | 85,545,397 | $43 | 4,611,569 | $(11,407) | $424,531 | $(350,243) | $62,924 | | Balance at December 31, 2021 | 83,057,083 | $42 | 4,091,823 | $(10,723) | $419,059 | $(194,968) | $213,410 | | Vesting of restricted stock units and issuance of stock under incentive plans | 926,504 | — | — | — | $211 | — | $211 | | Increase in treasury stock resulting from shares withheld to cover statutory taxes | — | — | 208,329 | $(448) | — | — | $(448) | | Share-based compensation | — | — | — | — | $1,015 | — | $1,015 | | Net loss | — | — | — | — | — | $(2,013) | $(2,013) | | Balance at March 31, 2022 | 83,983,587 | $42 | 4,300,152 | $(11,171) | $420,285 | $(196,981) | $212,175 | Consolidated Statements of Cash Flows This section presents the Company's cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2023, and 2022 Consolidated Statements of Cash Flows (Amounts in thousands) | Cash Flow Activity | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | CASH FLOWS FROM OPERATING ACTIVITIES: | | | | Net loss | $(31,943) | $(2,013) | | Depreciation and amortization | $2,359 | $3,307 | | Non-cash loan amortization expense | $61 | $68 | | Share-based compensation expense | $1,061 | $988 | | Goodwill impairment | $25,700 | — | | Write-off of intangible assets | — | $128 | | Provision for bad debt | $(55) | $81 | | Accounts receivable change | $6,460 | $5,127 | | Prepaid expenses and other current assets change | $(2,082) | $451 | | Accounts payable change | $6,739 | $(3,348) | | Accrued expenses and other current liabilities change | $(3,362) | $(6,251) | | Net cash provided by (used in) operating activities | $4,890 | $(1,776) | | CASH FLOWS FROM INVESTING ACTIVITIES: | | | | Capitalized costs included in intangible assets | $(1,134) | $(1,071) | | Business acquisitions, net of cash acquired | $(1,250) | $(971) | | Acquisition of property and equipment | — | $(7) | | Net cash used in investing activities | $(2,384) | $(2,049) | | CASH FLOWS FROM FINANCING ACTIVITIES: | | | | Repayments of long-term debt | $(1,250) | $(1,250) | | Taxes paid related to net share settlement of vesting of restricted stock units | $(236) | $(448) | | Net cash used in financing activities | $(1,486) | $(1,698) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $1,020 | $(5,523) | | Cash, cash equivalents and restricted cash at beginning of period | $25,547 | $34,467 | | Cash, cash equivalents and restricted cash at end of period | $26,567 | $28,944 | | SUPPLEMENTAL DISCLOSURE INFORMATION | | | | Cash paid for interest | $664 | $301 | | Cash paid for income taxes | $55 | $34 | | Share-based compensation capitalized in intangible assets | $27 | $27 | | SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | | | | Liability incurred for future contingent payments in connection with TAPP consolidation | $2,693 | — | | Liability incurred for deferred payment in connection with True North acquisition | — | $860 | | Contingent consideration in connection with True North acquisition | — | $250 | | Equity issued in connection with True North acquisition | — | $211 | Notes to Consolidated Financial Statements This section provides detailed explanations of the accounting policies, estimates, and specific financial accounts presented in the consolidated financial statements 1. Summary of significant accounting policies This note outlines the key accounting principles and methods used in preparing the financial statements, including revenue recognition, fair value measurements, and estimates - The financial statements are prepared in accordance with GAAP and SEC interim financial reporting rules, condensing or omitting certain annual disclosures[93] - The Company consolidates Variable Interest Entities (VIEs) where it is the primary beneficiary, having power to direct significant activities and absorb losses/benefits[94][95] - Revenue is recognized when control of goods or services is transferred to customers, reflecting expected consideration, using the 'right to invoice' practical expedient[69][97] - Significant estimates and assumptions are made for financial reporting, including allowance for doubtful accounts, useful lives of intangible assets, goodwill recoverability, revenue variances, purchase accounting, VIE consolidation, contingencies, and income tax provisions[71][98] - Fair value is defined as the exchange price in an orderly transaction between market participants, categorized into Level 1 (quoted prices), Level 2 (observable inputs), and Level 3 (unobservable inputs)[72][99][115] - The fair value of long-term debt approximates its carrying value (Level 2 measurement), while certain non-financial assets were measured at Level 3 fair value due to impairment[73][100] - New accounting guidance on credit losses (ASC 2016-13) effective after December 15, 2022, had no material impact on the consolidated financial statements[114] 2. Loss per share This note details the calculation of basic and diluted loss per share, including the treatment of anti-dilutive securities - Basic loss per share is calculated by dividing net loss by the weighted average common shares outstanding, including vested but undelivered restricted stock units[102] - Stock equivalent shares (stock options and warrants) were excluded from diluted weighted average share calculations in loss periods due to their anti-dilutive nature[102][128] Basic and Diluted Loss Per Share (Amounts in thousands, except share and per share data) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net loss | $(31,943) | $(2,013) | | Weighted average shares outstanding | 80,210,282 | 79,161,367 | | Weighted average restricted shares vested not delivered | 1,696,631 | 1,727,684 | | Total basic weighted average shares outstanding | 81,906,913 | 80,889,052 | | Dilutive effect of assumed conversion of restricted stock units | — | — | | Total diluted weighted average shares outstanding | 81,906,913 | 80,889,052 | | Basic loss per share | $(0.39) | $(0.02) | | Diluted loss per share | $(0.39) | $(0.02) | Anti-Dilutive Securities | Security Type | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Restricted stock units | 5,270,095 | 1,985,611 | | Stock options | 2,139,000 | 2,139,000 | | Warrants | — | 833,333 | | Total anti-dilutive securities | 7,409,095 | 4,957,944 | 3. Intangible assets, net This note provides a breakdown of the Company's intangible assets, their amortization periods, and estimated future amortization expenses - Intangible assets include capitalized internally developed software and acquired proprietary technology, customer relationships, trade names, domain names, databases, and non-competition agreements from various acquisitions[105] Intangible Assets, Net (Amounts in thousands) | Category | Amortization Period (in years) | March 31, 2023 (Net) | December 31, 2022 (Net) | | :--- | :--- | :--- | :--- | | Software developed for internal use | 3 | $6,327 | $5,643 | | Acquired proprietary technology | 3-5 | $1,016 | $1,660 | | Customer relationships | 5-10 | $2,664 | $2,912 | | Trade names | 4-20 | $10,396 | $10,619 | | Domain names | 20 | $125 | $127 | | Databases | 5-10 | $7,122 | $7,784 | | Non-competition agreements | 2-5 | $0 | $0 | | Total intangible assets, net | | $27,650 | $28,745 | | Total gross amount | | $118,845 | $117,685 | | Total accumulated amortization | | $(91,195) | $(88,940) | - Amortization expense was $2,256 thousand for Q1 2023, a decrease from $3,141 thousand in Q1 2022, with $971 thousand of assets not yet amortized[106] Estimated Future Amortization Expenses (Amounts in thousands) | Year | Estimated Amortization Expense | | :--- | :--- | | Remainder of 2023 | $4,734 | | 2024 | $6,816 | | 2025 | $6,370 | | 2026 | $2,332 | | 2027 | $830 | | 2028 and thereafter | $6,568 | | Total | $27,650 | - No triggering events for impairment assessments of long-lived assets were identified for the three months ended March 31, 2023[131] 4. Goodwill This note details the Company's goodwill balance, impairment assessment, and the impact of a significant impairment charge - Goodwill is assessed at least annually for impairment (October 1) or when events indicate potential impairment[107] - As of March 31, 2023, goodwill was $33,354 thousand, a $25,700 thousand decrease from December 31, 2022, due to a non-cash impairment charge[133] - A decline in market value triggered an interim impairment test, resulting in a $25,700 thousand non-cash impairment charge as carrying value exceeded fair value by 20%[134][234] - The goodwill balance also includes a preliminary $3,943 thousand increase related to the TAPP consolidation[133] 5. Long-term debt, net This note describes the Company's Credit Agreement, including its terms, amendments, interest rates, covenants, and scheduled maturities - Fluent, LLC entered a Credit Agreement on March 31, 2021, for a $50,000 thousand Term Loan and a $15,000 thousand undrawn Revolving Credit Facility, maturing March 31, 2026[36][37][257] - The Credit Agreement was amended on December 20, 2022, and May 15, 2023, to modify benchmark settings, add margin tiers, establish pricing floors, adjust EBITDA add-backs, and impose additional reporting and covenant conditions[36][257] - Interest rates are based on Alternative Base Rate or Term SOFR plus a margin, with the opening rate at 2.50% and increasing to 7.16% as of March 31, 2023[2][230] - The Credit Agreement contains negative covenants limiting the Borrower's ability to incur debt, grant liens, make investments, engage in fundamental changes, dispose of assets, or make restricted payments[4] - As of March 31, 2023, the Company was in compliance with all financial and other covenants under the Credit Agreement[37][231] - Due to pending litigation with the FTC and PAAG, a representation and warranty concerning the absence of litigation is not true, preventing the Company from drawing on the Revolving Credit Facility as of March 31, 2023[5][259] Long-term Debt, Net (Amounts in thousands) | Category | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Credit Facility due 2026 (less unamortized discount and financing costs) | $39,404 | $40,594 | | Less: Current portion of long-term debt | $(5,000) | $(5,000) | | Long-term debt, net (non-current) | $34,404 | $35,594 | Scheduled Future Maturities of Credit Agreement (Amounts in thousands) | Year | March 31, 2023 | | :--- | :--- | | Remainder of 2023 | $3,750 | | 2024 | $5,000 | | 2025 | $5,000 | | 2026 | $26,250 | | Total maturities | $40,000 | 6. Income taxes This note discusses the Company's income tax position, including its valuation allowance, effective tax rate, and unrecognized tax benefits - The Company has recorded a full valuation allowance against net deferred tax assets and intends to maintain it until sufficient evidence supports its release[40][224] - For Q1 2023, the effective income tax expense rate was 0.3%, primarily due to projected federal and state cash tax expense after a non-deductible goodwill impairment, offset by R&D credits[41] - Unrecognized tax benefits were $1,480 thousand as of March 31, 2023, which would increase net operating losses subject to a valuation allowance, thus having no impact on the effective tax rate[42] - No significant increase or reduction in unrecognized tax benefits is anticipated within the next twelve months[43] 7. Common stock, treasury stock and warrants This note details changes in the Company's common stock and treasury stock balances, primarily due to RSU vesting and tax withholding - Issued common stock increased from 84,385,458 shares at December 31, 2022, to 85,545,397 shares at March 31, 2023, due to the vesting of 1,159,939 RSUs[19][20] - Treasury stock increased from 4,300,152 shares ($11,171 thousand cost) at December 31, 2022, to 4,611,569 shares ($11,407 thousand cost) at March 31, 2023[19][29] - The increase in treasury stock was primarily due to 311,417 shares withheld to cover statutory tax withholding obligations upon RSU vesting[20][30] 8. Share-based compensation This note describes the Company's equity incentive plans, stock option and RSU activity, and the associated share-based compensation expense - The Fluent, Inc. 2022 Omnibus Equity Incentive Plan authorized 15,422,523 shares, with 6,091,436 shares available for grants as of March 31, 2023[31] - Plans aim to attract, retain, reward, and motivate individuals through time-based vesting RSUs, long-term incentive grants, and cash-settled PSUs[32] - Stock options granted under the Prior Plan have vesting conditions tied to stock price performance over 20 consecutive trading days, with a full vest on the fifth anniversary if conditions aren't met earlier[34] Stock Option Activity (Three Months Ended March 31, 2023) | Metric | Number of options | Weighted average exercise price per share | Weighted average remaining contractual term (in years) | | :--- | :--- | :--- | :--- | | Outstanding as of December 31, 2022 | 2,139,000 | $4.37 | 6.3 | | Granted | — | — | — | | Exercised | — | — | — | | Expired | — | — | — | | Outstanding as of March 31, 2023 | 2,139,000 | $4.37 | 6.1 | | Options exercisable as of March 31, 2023 | 1,242,000 | $3.98 | 6.1 | Unvested Stock Options (Three Months Ended March 31, 2023) | Metric | Number of stock options | Weighted average exercise price per share | Weighted average remaining contractual term (in years) | | :--- | :--- | :--- | :--- | | Unvested as of December 31, 2022 | 897,000 | $4.91 | 6.3 | | Granted | — | — | — | | Vested | — | — | — | | Unvested as of March 31, 2023 | 897,000 | $4.91 | 6.1 | - Compensation expense for stock options was $0 for Q1 2023, down from $105 thousand for Q1 2022, with $0 unrecognized compensation as of March 31, 2023[12] Unvested RSU Activity (Three Months Ended March 31, 2023) | Metric | Number of units | Weighted average grant-date fair value | | :--- | :--- | :--- | | Unvested as of December 31, 2022 | 4,223,156 | $5.37 | | Granted | 2,910,185 | $1.43 | | Vested and delivered | (848,522) | $3.42 | | Withheld as treasury stock | (311,417) | $1.82 | | Vested not delivered | (14,416) | $5.50 | | Forfeited | (688,891) | $1.43 | | Unvested as of March 31, 2023 | 5,270,095 | $4.24 | - Compensation expense for RSUs was $1,148 thousand for Q1 2023, up from $910 thousand for Q1 2022, recorded in operating expenses and intangible assets[23] - Unrecognized share-based compensation expense for RSUs and stock options totaled $8,397 thousand, expected to be recognized over a weighted average period of 2.1 years[24] Total Share-Based Compensation Expense Allocation (Amounts in thousands) | Account | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Sales and marketing | $167 | $170 | | Product development | $191 | $160 | | General and administrative | $763 | $658 | | Share-based compensation expense | $1,121 | $988 | | Capitalized in intangible assets | $27 | $27 | | Total share-based compensation | $1,148 | $1,015 | 9. Segment information This note provides financial information for the Company's operating segments, 'Fluent' and 'All Other,' including assets, revenue, and EBITDA - The Company has two operating segments, 'Fluent' and 'All Other' (AdParlor, LLC), with 'Fluent' representing the consolidated operating results excluding 'All Other'[15] Segment Total Assets (Amounts in thousands) | Segment | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Fluent | $140,618 | $168,486 | | All Other | $16,552 | $15,483 | | Total assets | $157,170 | $183,969 | Segment Revenue and EBITDA (Three Months Ended March 31, 2023 and 2022, Amounts in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Fluent segment revenue: | | | | United States | $42,908 | $60,659 | | International | $32,330 | $25,375 | | Fluent segment revenue | $75,238 | $86,034 | | All Other segment revenue: | | | | United States | $2,016 | $2,989 | | International | — | $40 | | All Other segment revenue | $2,016 | $3,029 | | Segment EBITDA: | | | | Fluent segment EBITDA | $(28,579) | $1,921 | | All Other segment EBITDA | $(215) | $(243) | | Total EBITDA | $(28,794) | $1,678 | | Depreciation and amortization | $2,359 | $3,307 | | Total income (loss) from operations | $(31,153) | $(1,629) | - As of March 31, 2023, all long-lived assets are located in the United States[117] - An international customer within the Fluent segment accounted for $19,125 thousand in revenue, representing 25% of consolidated revenue for Q1 2023[117] 10. Contingencies This note details the Company's legal and regulatory contingencies, including tax audits, FTC and PAAG investigations, and a TCPA class action settlement - The Company accrues estimated losses from contingencies when probable and reasonably estimable, disclosing accrued amounts and reasonably possible losses in excess of accruals[144][267] - A New York sales and use tax audit resulted in a $1,700 thousand settlement, paid April 1, 2022, with the Company now collecting and remitting sales tax on certain services[145][241] - Regarding an FTC Civil Investigative Demand, the Company accrued $5,000 thousand for a civil monetary penalty as of December 31, 2022, with negotiations ongoing and a meeting scheduled with the Commission on May 16, 2023[146][268] - A settlement in principle was reached with PAAG for $250 thousand in investigatory costs, with $200 thousand accrued as of March 31, 2023, and telemarketing practices updated[147][242] - In the Daniel Berman v. Freedom Financial Network TCPA class action, a settlement provides for a $9,750 thousand payment to plaintiffs, with the Company contributing $3,100 thousand (accrued as of December 31, 2022), payable $1,100 thousand in cash and $2,000 thousand via an interest-bearing note[120][279] 11. Business acquisition This note details the acquisition of True North Loyalty, LLC, including its purchase price, consideration, and preliminary purchase price allocation - On January 1, 2022, the Company acquired 100% of True North Loyalty, LLC for a deemed purchase price of $2,321 thousand, including $1,000 thousand cash, $860 thousand deferred payments, and $250 thousand contingent consideration[121] - The True North acquisition also involved issuing 100,000 shares of fully-vested common stock ($211 thousand) and entering into employment and non-competition agreements[121] - True North Loyalty, LLC is a subscription-based business utilizing call center operations and other media channels for recurring revenue services[121] - The purchase price allocation for True North included amortizing acquired customer relationships ($170 thousand over one year, $1,180 thousand over five years) and recording $1,092 thousand in goodwill for non-separately recognized intangible assets, which is not tax deductible[176] 12. Variable Interest Entity This note explains the consolidation of TAPP, LLC as a Variable Interest Entity (VIE), detailing the rationale and preliminary purchase price allocation - A VIE is an entity with insufficient equity or equity investors lacking controlling financial interest, where the primary beneficiary directs significant activities and absorbs losses/benefits[177] - On January 9, 2023, TAPP, LLC, an influencer-based business, qualified as a VIE due to the Company's significance to its revenue and control over key activities, leading to consolidation[123] - The deemed fair value of consideration for TAPP was $3,943 thousand, comprising $1,250 thousand initial cash and $2,693 thousand contingent payments, resulting in $3,943 thousand in goodwill[151] - The purchase price allocation for TAPP is preliminary, with finalization expected within one year of the transaction date (January 9, 2023)[151] - As of March 31, 2023, TAPP's assets and revenues represented a de minimis percentage of the Company's total assets and revenue[151] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. This section provides management's perspective on Fluent, Inc.'s financial condition and operational results for the three months ended March 31, 2023, compared to the prior year. It covers the business overview, key financial summaries, trends affecting the business, advertiser trends, seasonality, economic conditions, non-GAAP financial measures, detailed comparison of operational results, liquidity and capital resources, and critical accounting policies Overview This section provides an overview of Fluent, Inc.'s business model, focusing on data-driven digital marketing, customer acquisition, and revenue generation strategies - Fluent, Inc. is a leader in data-driven digital marketing services, primarily performing customer acquisition by operating highly scalable digital marketing campaigns[153] - The Company attracts consumers to its owned digital media properties through promotional offerings, engaging them with surveys and polls to gather lifestyle and purchasing information[154][180][181] - Revenue is generated by delivering measurable online marketing results, predominantly paid on a negotiated or market-driven 'per click,' 'per lead,' or 'per action' basis[155] - Through AdParlor Holdings, Inc., the Company conducts its non-core business, offering clients various social media strategies via media planning and buying on different platforms[182] First Quarter Financial Summary This section provides a high-level overview of Fluent, Inc.'s financial performance for the first quarter of 2023, highlighting key GAAP and non-GAAP metrics such as revenue, net loss, gross profit, media margin, and adjusted EBITDA, and their changes compared to the prior year First Quarter Financial Summary (Three Months Ended March 31, 2023 vs 2022) | Metric | Q1 2023 (in millions) | Q1 2022 (in millions) | Change | | :--- | :--- | :--- | :--- | | Revenue | $77.3 | $89.1 | -13% | | Net loss | $31.9 | $2.0 | +1495% | | Net loss per share | $0.39 | $0.02 | +1850% | | Gross profit (exclusive of D&A) | $19.0 | $21.5 | -12% | | Gross profit % of revenue | 25% | 24% | +1 pp | | Media margin | $22.0 | $26.0 | -15% | | Media margin % of revenue | 28.4% | 29.1% | -0.7 pp | | Adjusted EBITDA | $0.4 | $4.8 | -91.7% | | Adjusted EBITDA % of revenue | 0.6% | 5.4% | -4.8 pp | | Adjusted net loss | $2.7 | Adjusted net income $1.1 | N/A | | Adjusted net loss per share | $0.03 | Adjusted net income $0.01 | N/A | - Media margin, adjusted EBITDA, and adjusted net income (loss) are non-GAAP financial measures[158] Trends Affecting our Business This section discusses the key operational and strategic trends influencing Fluent, Inc.'s business, including its focus on high-quality media sources, efforts to improve consumer experience and monetization, and responses to market challenges and economic conditions - Business success depends on identifying and accessing high-quality media sources and attracting targeted users, with a focus on improving consumer experience and monetization through increased user participation and conversion rates[184][185] - Efforts in Q1 2023 included increased spend with major digital media platforms, revised bidding strategies for affiliate traffic, and partnerships to expand social media traffic, focusing on improved monetization through customer relationship management[159] - Challenges from affiliate supply volatility, search engine algorithm changes, and increased media competition continued in Q1 2023, prompting investments in the influencer segment and strategic growth of e-commerce post-sales solutions[160] - In response to the challenging macro-economic environment, the Company reviewed strategic investments for 2023, pausing or eliminating lower priority projects and streamlining the organization through targeted workforce reductions[160][219] Advertiser Trends & Seasonality This section analyzes the impact of advertiser spending patterns and seasonal fluctuations on Fluent, Inc.'s business, noting challenges from economic uncertainty and strategic efforts to diversify clients and improve ad spend returns - In 2023, data and performance-based spend continued to be challenged by a slowing economy and general economic uncertainty, with slowdowns in Media & Entertainment, Staffing & Recruitment, and Financial Products & Services sectors[161] - To offset challenges, the Company works with advertisers to define high-performing consumer segments and strategically price paid conversions, driving additional budgets from the gaming segment, a large and growing component of revenue[186] - Results are subject to seasonality and cyclicality, with historically higher advertiser budgets in Q4, sometimes offset by media challenges, and lower budgets in Q1, impacted by economic uncertainty[162][163][187] - To confront slowing economic conditions and uncertainty in Q1 2023, the Company will continue efforts to diversify its client base and further develop initiatives to drive higher return on advertising spend across additional segments[188] Current Economic Conditions This section addresses the impact of broader macroeconomic factors on Fluent, Inc.'s business, noting the caution in spending by clients and consumers due to inflation, rising interest rates, and reduced confidence - The Company is subject to risks from macroeconomic impacts, with inflation, rising interest rates, and reduced consumer confidence causing clients and customers to be cautious in their spending[189] - The full impact of these macroeconomic events on the business, financial condition, and results of operations in the future remains uncertain[189] Definitions, Reconciliations and Uses of Non-GAAP Financial Measures This section defines and reconciles Fluent, Inc.'s non-GAAP financial measures, including Adjusted EBITDA, Media Margin, and Adjusted Net Income (Loss), explaining their purpose as supplemental performance indicators and acknowledging their limitations compared to GAAP measures - Adjusted EBITDA is defined as net income (loss) excluding income taxes, interest expense, depreciation and amortization, share-based compensation, goodwill impairment, write-off of intangible assets, acquisition-related costs, restructuring costs, and certain litigation costs[190] - Media margin is defined as gross profit (exclusive of depreciation and amortization) reflecting variable costs for media and related expenses, used to manage operating performance and evaluate media expenditure efficiency[185][211][214] - Adjusted net income (loss) is defined as net income (loss) excluding share-based compensation, goodwill impairment, write-off of intangible assets, acquisition-related costs, restructuring costs, and certain litigation costs[166] - These non-GAAP measures have limitations, do not reflect GAAP financial results, and are not indicative of overall results or future financial performance, as they exclude certain expenses[216] Media Margin Reconciliation (Amounts in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Revenue | $77,254 | $89,063 | | Less: Cost of revenue (exclusive of depreciation and amortization) | $58,272 | $67,562 | | Gross profit (exclusive of depreciation and amortization) | $18,982 | $21,501 | | Gross profit (exclusive of depreciation and amortization) % of revenue | 25% | 24% | | Non-media cost of revenue | $2,981 | $4,449 | | Media margin | $21,963 | $25,950 | | Media margin % of revenue | 28.4% | 29.1% | Adjusted EBITDA Reconciliation (Amounts in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net loss | $(31,943) | $(2,013) | | Income tax expense | $101 | — | | Interest expense, net | $689 | $384 | | Depreciation and amortization | $2,359 | $3,307 | | Share-based compensation expense | $1,061 | $988 | | Goodwill impairment | $25,700 | — | | Write-off of intangible assets | — | $128 | | Acquisition-related costs | $623 | $558 | | Restructuring and other severance costs | $480 | — | | Certain litigation and other related costs | $1,378 | $1,402 | | Adjusted EBITDA | $448 | $4,754 | Adjusted Net Income (Loss) Reconciliation (Amounts in thousands, except share and per share data) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net loss | $(31,943) | $(2,013) | | Share-based compensation expense | $1,061 | $988 | | Goodwill impairment | $25,700 | — | | Write-off of intangible assets | — | $128 | | Acquisition-related costs | $623 | $558 | | Restructuring and other severance costs | $480 | — | | Certain litigation and other related costs | $1,378 | $1,402 | | Adjusted net income (loss) | $(2,701) | $1,063 | | Adjusted net income (loss) per share (Basic) | $(0.03) | $0.01 | | Adjusted net income (loss) per share (Diluted) | $(0.03) | $0.01 | | Weighted average number of shares outstanding (Basic) | 81,906,913 | 80,889,052 | | Weighted average number of shares outstanding (Diluted) | 81,906,913 | 81,021,030 | Comparison of Our Results of Operations for the Three Months Ended March 31, 2023 and 2022 This section provides a detailed comparative analysis of Fluent, Inc.'s operational results for the three months ended March 31, 2023, versus the same period in 2022, covering revenue, cost of revenue, various operating expenses, impairment charges, interest expense, and net loss Revenue This section analyzes the Company's revenue performance, highlighting a significant decrease driven by declines in the US Rewards business and employment opportunities marketplace Revenue (Amounts in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $77,254 | $89,063 | (13%) | - Revenue decreased by $11.8 million (13%) due to declines in the US Rewards business and employment opportunities marketplace, driven by reduced client spending, a challenging labor market, and increased regulatory scrutiny[197] - The decline was partially offset by continued growth in call solutions and international Rewards business, driven by new affiliates, advertisers, campaigns, higher traffic, and accelerated creative testing[197] Cost of revenue (exclusive of depreciation and amortization) This section examines the Company's cost of revenue, detailing a decrease primarily due to client pullbacks and changes in business practices Cost of Revenue (exclusive of D&A) (Amounts in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | % Change | | :--- | :--- | :--- | :--- | | Cost of revenue (exclusive of depreciation and amortization) | $58,272 | $67,562 | (14%) | - Cost of revenue decreased by $9.3 million (14%) due to client pullbacks and reduced spending in the US Rewards business, and changes in business practices reflecting increased regulatory scrutiny[198] - Costs primarily consist of media and related costs for acquiring traffic, enablement costs for call centers, tracking costs for consumer data, and indirect costs like fulfillment and software/hosting[198] - Total cost of revenue as a percentage of revenue decreased to 75% in Q1 2023 from 76% in Q1 2022, largely due to a decrease in fulfillment costs as a percentage of revenue[218] - Digital media spend in Q1 2023 was driven by strategic test and learn initiatives, with dynamic mix and profitability of media channels reflecting market dynamics and the Traffic Quality Initiative[199] Sales and marketing This section analyzes the Company's sales and marketing expenses, noting an increase primarily driven by headcount and salary adjustments Sales and Marketing Expenses (Amounts in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | % Change | | :--- | :--- | :--- | :--- | | Sales and marketing | $4,813 | $3,852 | 25% | - Sales and marketing expenses increased by $0.9 million (25%) due to an increase in headcount and annual salary increases[200] - Expenses mainly consisted of employee salaries and benefits ($3.8 million in Q1 2023), advertising costs ($0.3 million), and non-cash share-based compensation expenses ($0.2 million)[200] Product development This section reviews the Company's product development expenses, indicating an increase due to salary adjustments and technology investments Product Development Expenses (Amounts in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | % Change | | :--- | :--- | :--- | :--- | | Product development | $4,938 | $4,556 | 8% | - Product development expense increased by $0.4 million (8%) due to annual salary increases and investments in the technology and analytics platform[201] - Expenses mainly consisted of salaries and benefits ($3.5 million in Q1 2023), professional fees ($0.5 million), software license and maintenance costs ($0.5 million), and non-cash share-based compensation expense ($0.2 million)[201] General and administrative This section details the Company's general and administrative expenses, noting an increase primarily from professional fees and strategic training, alongside workforce reductions General and Administrative Expenses (Amounts in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | % Change | | :--- | :--- | :--- | :--- | | General and administrative | $12,325 | $11,287 | 9% | - General and administrative expenses increased by $1.0 million (9%) primarily due to increased professional fees and strategic company training expenses[202] - Expenses mainly consisted of employee salaries and benefits ($4.9 million), professional fees ($1.6 million), office overhead ($1.1 million), certain litigation and related costs ($1.4 million), non-cash share-based compensation expense ($0.8 million), software license and maintenance costs ($0.6 million), and acquisition-related costs ($0.6 million)[202] - Workforce reductions in Q1 2023 resulted in $0.5 million in exit-related restructuring costs, primarily one-time termination benefits, expected to be fully settled by March 31, 2024, and lead to future salary and benefit reductions[203][219] Depreciation and amortization This section reviews the Company's depreciation and amortization expenses, noting a decrease due to certain intangible assets becoming fully amortized Depreciation and Amortization Expenses (Amounts in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | % Change | | :--- | :--- | :--- | :--- | | Depreciation and amortization | $2,359 | $3,307 | (29%) | - Depreciation and amortization expenses decreased by $0.9 million (29%) due to certain intangible assets that fully amortized compared to the prior period[204] Goodwill impairment This section reports on the significant goodwill impairment loss recognized by the Company during the first quarter of 2023 Goodwill Impairment (Amounts in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | % Change | | :--- | :--- | :--- | :--- | | Goodwill impairment | $(25,700) | — | — | - For Q1 2023, the Company recognized a goodwill impairment loss of $25.7 million, with no corresponding charge in the prior period[205] Write-off of intangible assets This section details the write-off of intangible assets, noting a charge in the prior period with no corresponding impact in the current period Write-off of Intangible Assets (Amounts in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | % Change | | :--- | :--- | :--- | :--- | | Write-off of intangible assets | — | $128 | (100%) | - For Q1 2022, the Company recognized $0.1 million for the write-off of intangible assets related to software developed for internal use, with no corresponding change in the current period[221] Interest expense, net This section analyzes the Company's net interest expense, highlighting an increase driven by a higher average interest rate on the Term Loan Interest Expense, Net (Amounts in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | % Change | | :--- | :--- | :--- | :--- | | Interest expense, net | $(689) | $(384) | 79% | - Interest expense, net, for Q1 2023 increased by $0.3 million compared to Q1 2022, driven by a higher average interest rate on the Term Loan[206] Loss before income taxes This section reports on the Company's loss before income taxes, noting a substantial increase primarily due to goodwill impairment and revenue decline Loss Before Income Taxes (Amounts in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | % Change | | :--- | :--- | :--- | :--- | | Loss before income taxes | $(31,842) | $(2,013) | 1482% | - Loss before income taxes for Q1 2023 was $31.8 million, compared to $2.0 million in Q1 2022, an increase of $29.8 million primarily due to goodwill impairment ($25.6 million), revenue decline ($11.8 million), and increased operating expenses, partially offset by lower cost of revenue ($9.3 million)[207] Income tax expense This section details the Company's income tax expense, noting a charge in the current period and the maintenance of a full valuation allowance Income Tax Expense (Amounts in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | % Change | | :--- | :--- | :--- | :--- | | Income tax expense | $(101) | — | — | - Income tax expense for Q1 2023 was $0.1 million, with no corresponding impact in Q1 2022, as the Company recorded a full valuation allowance against net deferred tax assets[224][252] Net loss This section reports on the Company's net loss, highlighting a significant increase driven by goodwill impairment, revenue decline, and increased operating expenses Net Loss (Amounts in thousands) | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | % Change | | :--- | :--- | :--- | :--- | | Net loss | $(31,943) | $(2,013) | 1,486.8% | - Net loss for Q1 2023 was $31.9 million compared to net loss of $2.0 million for Q1 2022 due to a net increase of goodwill impairment and write-off of intangibles ($25.6 million), revenue decline ($11.8 million), and increased operating expenses, partially offset by lower cost of revenue ($9.3 million)[225] Liquidity and Capital Resources This section discusses Fluent, Inc.'s cash position, cash flow activities, debt obligations, and capital management strategies, including the impact of its Credit Agreement and potential future financing needs - As of March 31, 2023, cash and cash equivalents were approximately $26.6 million, a $1.1 million decrease from December 31, 2022[255] - Management believes sufficient cash resources will finance operations and capital expenditures for the next twelve months and beyond, despite inability to access the Credit Facility[255] - Net cash provided by operating activities was $4.9 million in Q1 2023, compared to $1.8 million used in Q1 2022, primarily due to a goodwill impairment in Q1 2023 and ordinary-course working capital changes[210] - Net cash used in investing activities was $2.4 million in Q1 2023 and $2.0 million in Q1 2022, with the increase mainly due to the TAPP consolidation, partially offset by the True North Acquisition[226] - Net cash used in financing activities was $1.5 million in Q1 2023 and $1.7 million in Q1 2022, with the change due to a decline in taxes paid related to share settlements of vesting restricted stock units[254] - As of March 31, 2023, noncancelable operating lease commitments were $6.0 million and long-term debt had a $40.0 million principal balance[227] - The Credit Agreement contains restrictive covenants limiting debt, liens, investments, fundamental changes, asset disposals, and restricted payments, potentially limiting strategic and financing options[258] - Due to legal matters with the FTC and PAAG, a customary representation and warranty is not true, preventing draws on the Revolving Loans, though this is not expected to have a material adverse effect on liquidity[259] - The Company may explore acquisitions, potentially requiring additional funds through public or private financings, which may not be favorable and could result in shareholder dilution[229] Critical Accounting Policies and Estimates This section highlights Fluent, Inc.'s critical accounting policies and estimates, emphasizing the judgments and assumptions made in preparing financial statements, particularly regarding goodwill impairment, and confirms no material changes from prior disclosures - Financial statements are prepared in accordance with GAAP, requiring estimates and judgments affecting reported amounts of assets, liabilities, revenues, expenses, and contingent disclosures[260] - Estimates are periodically evaluated, including those related to revenue recognition, allowance for doubtful accounts, useful lives of intangible assets, recoverability of goodwill and intangible assets, share-based compensation, income taxes, and contingencies[260] - An interim goodwill impairment test for Q1 2023, assisted by a third party, concluded the Fluent reporting unit's carrying value exceeded its fair value by 20%, resulting in a $25,700 thousand non-cash impairment charge[234] - No additional material changes to Critical Accounting Policies and Estimates were disclosed in the 2022 Form 10-K[261] Recently issued accounting and adopted standards This section directs readers to the relevant note in the consolidated financial statements for details on recently issued and adopted accounting standards - Refer to Note 1(b), 'Recently issued and adopted accounting standards,' in the Notes to Consolidated Financial Statements for additional information[262] Item 3. Quantitative and Qualitative Disclosures About Market Risk. This item addresses market risk disclosures, noting that as a smaller reporting company, Fluent, Inc. is not required to provide specific quantitative and qualitative information Item 3. Quantitative and Qualitative Disclosures About Market Risk. As a smaller reporting company, Fluent, Inc. is not required to provide specific quantitative and qualitative disclosures about market risk in this report - As a smaller reporting company, we are not required to provide the information required by this Item[263] Item 4. Controls and Procedures. This item details the evaluation of the Company's disclosure controls and procedures and internal control over financial reporting Item 4. Controls and Procedures. This section details the evaluation of Fluent, Inc.'s disclosure controls and procedures and internal control over financial reporting. It confirms the effectiveness of disclosure controls as of March 31, 2023, and reports no material changes to internal control over financial reporting during the quarter Evaluation of Disclosure Controls and Procedures This section confirms that management, including the CEO and Interim CFO, evaluated and concluded on the effectiveness of the Company's disclosure controls and procedures - Management, with the CEO and Interim CFO, evaluated the effectiveness of disclosure controls and procedures as of March 31, 2023[237] - Based on the evaluation, the Company's disclosure controls and procedures were effective as of March 31, 2023, and consolidated financial statements fairly represent financial condition, results of operations, and cash flows in accordance with GAAP[264] Changes in Internal Control Over Financial Reporting This section reports that there were no material changes to the Company's internal control over financial reporting during the quarter - No material changes to internal control over financial reporting occurred during the quarter ended March 31, 2023[238] PART II - OTHER INFORMATION This part includes disclosures on legal proceedings, risk factors, equity security sales, defaults, mine safety, other information, and exhibits Item 1. Legal Proceedings. This item outlines the Company's involvement in various legal and regulatory matters, including a sales and use tax audit settlement with the New York State Department of Taxation and Finance, ongoing negotiations with the FTC regarding a civil monetary penalty, a settlement in principle with the Pennsylvania Office of the Attorney General concerning telemarketing practices, and a TCPA class action settlement - The Company accrues estimated losses from contingencies when probable and reasonably estimable, disclosing accrued amounts and reasonably possible losses in excess of accruals[267] - A New York sales and use tax audit resulted in a $1.7 million settlement, paid April 1, 2022, with the Company now collecting and remitting sales tax on certain services from March 1, 2022[241] - Regarding an FTC Civil Investigative Demand, the Company accrued $5.0 million for a civil monetary penalty as of December 31, 2022, with negotiations ongoing and a meeting scheduled with the Commission on May 16, 2023[268] - A settlement in principle was reached with the PAAG on May 8, 2023, to pay $0.25 million for investigatory costs, of which $0.20 million was accrued as of March 31, 2023, and telemarketing practices updated[242] - In the Daniel Berman v. Freedom Financial Network TCPA class action, a settlement provides for a $9.75 million payment to plaintiffs, with the Company contributing $3.1 million (accrued as of December 31, 2022), payable $1.1 million in cash and $2.0 million via an interest-bearing note[279] Item 1A. Risk Factors. This item states that there have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 - No material changes to the Risk Factors previously disclosed in the 2022 Form 10-K[243][270] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. This item reports on the Company's purchases of its own common stock during the first quarter of 2023, specifically detailing shares acquired to cover statutory tax withholding obligations related to restricted stock unit settlements Issuer Purchase of Equity Securities This section details the Company's repurchase of common stock to cover tax withholding obligations from RSU settlements in Q1 2023 Issuer Purchase of Equity Securities (Q1 2023) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | January 1-31, 2023 | — | — | | February 1-28, 2023 | — | — | | March 1-31, 2023 | 311,417 | $0.76 | | Total | 311,417 | $0.76 | - During March 2023, 311,417 shares were purchased to satisfy federal and state withholding obligations of employees upon RSU settlement, in accordance with the equity incentive plan[271] Item 3. Defaults Upon Senior Securities. This item indicates that there are no defaults upon senior securities to report for the period - Not Applicable[246] Item 4. Mine Safety Disclosures. This item states that there are no mine safety disclosures applicable to the Company - None[281] Item 5. Other Information. This item discloses significant events occurring after the reporting period, specifically the third amendment to the Credit Agreement on May 15, 2023, which introduced temporary modifications to financial covenants, margins, reporting requirements, and restrictions on certain corporate actions - On May 15, 2023, the Company entered the third amendment to the Credit Agreement, temporarily modifying applicable margin tiers, pricing floors, EBITDA add-backs, monthly financial reporting, revolving loan draw conditions, notice requirements, financial covenants, minimum cash liquidity, and restrictions on loans, investments, acquisitions, dividends, and share repurchases[247][283] - This information is disclosed under Item 5 instead of Form 8-K Items 1.01, 2.03, and 3.03 because this Quarterly Report on Form 10-Q is being filed within four business days after the triggering events[273] Item 6. Exhibits. This item provides a comprehensive list of exhibits filed with or incorporated by reference into the Quarterly Report on Form 10-Q, including organizational documents, common stock forms, and certifications - The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q[276] Selected Exhibits | Exhibit No. | Exhibit Description | Form | Incorporated File No. | by Reference Exhibit | Filing Date | | :--- | :--- | :--- | :--- | :--- | :--- | | 3.1 | Certificate of Domestication | 8-K | 001-37893 | 3.1 | 3/26/2015 | | 3.2 | Certificate of Incorporation | 8-K | 001-37893 | 3.2 | 3/26/2015 | | 3.3 | Certificate of Amendment to the Certificate of Incorporation | 8-K | 001-37893 | 3.1 | 9/26/2016 | | 3.4 | Certificate of Amendment to the Certificate of Incorporation | 8-K | 001-37893 | 3.1 | 4/16/2018 | | 3.5 | Amended and Restated Bylaws | 8-K | 001-37893 | 3.2 | 2/19/2019 | | 4.1 | Form of Common Stock Certificate | 8-K | 001-37893 | 4.1 | 4/16/2018 | | 4.2 | Form of Additional Warrants | 8-K | 001-37893 | 4.5 | 10/17/2017 | | 4.3 | Description of Securities.* | 10-K | 001-37893 | 4.3 | 3/15/2023 | | 10.1 | Consulting Agreement, by and between Fluent, Inc. and Ryan Perfit, dated January 20, 2023 and effective February 1, 2023. | X | | | | | 31.1 | Certification of Chief Executive Officer filed pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a) of the Securities and Exchange