flnt20230630

flnt20230630_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-37893

FLUENT, INC.

(Exact name of registrant as specified in its charter)

Delaware

77-0688094

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

300 Vesey Street, 9th Floor

New York, New York

10282

(Address of principal executive offices)

(Zip Code)

(646) 669-7272

(Registrant's telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Table of Contents

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, $0.0005 par value per share

FLNT

The NASDAQ Stock Market, LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒

As of August 17, 2023, the registrant had 81,147,991 shares of common stock, $0.0005 par value per share outstanding.

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FLUENT, INC.

TABLE OF CONTENTS FOR FORM 10-Q

		Page
PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)
	Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022	2
	Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022	3
	Consolidated Statements of Changes in Shareholders' Equity for the three and six months ended June 30, 2023 and 2022	4
	Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022	5
	Notes to Consolidated Financial Statements	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	34

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	37
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	37
Item 6.	Exhibits	38
Signatures		39

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PART I - FINANCIAL INFORMATION

Unless otherwise indicated or required by the context, all references in this Quarterly Report on Form 10-Q to "we," "us," "our," "Fluent," or the "Company," refer to Fluent, Inc. and its consolidated subsidiaries.

ITEM 1. FINANCIAL STATEMENTS.

FLUENT, INC.

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except share and per share data)

(unaudited)

	*June 30, 2023*			*December 31, 2022*
ASSETS:
Cash and cash equivalents	$	20,983		$	25,547
Accounts receivable, net of allowance for doubtful accounts of $209 and $544, respectively		58,120			63,164
Prepaid expenses and other current assets		9,941			3,506
Total current assets		89,044			92,217
Property and equipment, net		783			964
Operating lease right-of-use assets		4,278			5,202
Intangible assets, net		28,525			28,745
Goodwill		30,966			55,111
Other non-current assets		1,486			1,730
Total assets	$	155,082		$	183,969
LIABILITIES AND SHAREHOLDERS' EQUITY:
Accounts payable	$	13,303		$	6,190
Accrued expenses and other current liabilities		27,469			35,626
Deferred revenue		895			1,014
Current portion of long-term debt		10,000			5,000
Current portion of operating lease liability		2,309			2,389
Total current liabilities		53,976			50,219
Long-term debt, net		27,989			35,594
Operating lease liability		2,734			3,743
Other non-current liabilities		2,248			458
Total liabilities		86,947			90,014
Contingencies (Note 10)
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 — 85,751,226 and 84,385,458, respectively; and Shares outstanding — 81,139,657 and 80,085,306, respectively (Note 7)		43			42
Treasury stock, at cost — 4,611,569 and 4,300,152 Shares, respectively (Note 7)		(11,407	)		(11,171	)
Additional paid-in capital		425,491			423,384
Accumulated deficit		(345,992	)		(318,300	)
Total shareholders' equity		68,135			93,955
Total liabilities and shareholders' equity	$	155,082		$	183,969

See notes to consolidated financial statements

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FLUENT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except share and per share data)

(unaudited)

	*Three Months Ended June 30,*				*Six Months Ended June 30,*
	*2023*		*2022*		*2023*		*2022*
Revenue	$	82,145	$	98,361	$	159,399	$	187,424
Costs and expenses:
Cost of revenue (exclusive of depreciation and amortization)		59,540		70,026		117,812		137,589
Sales and marketing		4,215		4,484		9,028		8,336
Product development		4,615		4,802

SEC Form 10-Q filed by Fluent Inc.