2023 Q4 Form 10-K Financial Statement

#000121390024026599 Filed on March 27, 2024

View on sec.gov

Income Statement

Concept 2023 Q4 2023 2022
Revenue $20.39M $80.96M $39.38M
YoY Change 2.16% 105.57%
Cost Of Revenue $39.54M $146.2M $43.75M
YoY Change 36.02% 234.07% 507.64%
Gross Profit -$19.15M -$65.19M -$4.360M
YoY Change 109.97% 1395.26% -292.07%
Gross Profit Margin -93.91% -80.52% -11.07%
Selling, General & Admin $12.85M $50.55M $20.60M
YoY Change 87.65% 145.45% 573.04%
% of Gross Profit
Research & Development $3.644M $15.72M $6.287M
YoY Change 40.68% 150.05% 287.57%
% of Gross Profit
Depreciation & Amortization $1.771M $4.851M $1.556M
YoY Change 608.32% 211.74% 907.71%
% of Gross Profit
Operating Expenses $18.06M $69.20M $75.03M
YoY Change 73.96% -7.77% 2351.96%
Operating Profit -$37.21M -$134.4M -$35.65M
YoY Change 90.8% 276.99% 239.12%
Interest Expense $3.095M $13.59M $2.970M
YoY Change 10.94% 357.73% -120.0%
% of Operating Profit
Other Income/Expense, Net $1.511M $2.240M $21.01M
YoY Change -90.12% -89.34% -752.48%
Pretax Income -$32.60M -$119.7M -$11.62M
YoY Change 2662.84% 930.28% -35.12%
Income Tax -$3.324M -$3.292M -$215.4K
% Of Pretax Income
Net Earnings -$29.28M -$116.4M -$11.40M
YoY Change 2021.54% 920.87% -36.32%
Net Earnings / Revenue -143.57% -143.79% -28.96%
Basic Earnings Per Share -$0.58 -$0.05
Diluted Earnings Per Share -$0.15 -$0.58 -$0.05
COMMON SHARES
Basic Shares Outstanding 201.4M shares 242.4M shares
Diluted Shares Outstanding 201.4M shares 242.4M shares

Balance Sheet

Concept 2023 Q4 2023 2022
SHORT-TERM ASSETS
Cash & Short-Term Investments $219.5M $219.5M $338.3M
YoY Change -35.12% -35.12% 1353100.0%
Cash & Equivalents $218.3M $218.3M $337.2M
Short-Term Investments $1.135M $1.135M $1.100M
Other Short-Term Assets $13.09M $13.09M $9.300M
YoY Change 40.75% 40.75% 1829.18%
Inventory
Prepaid Expenses
Receivables $5.440M $5.440M $4.700M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $238.0M $238.0M $352.4M
YoY Change -32.45% -32.46% 69397.31%
LONG-TERM ASSETS
Property, Plant & Equipment $22.16M $22.16M $10.20M
YoY Change 150.6% 117.29% 264.29%
Goodwill $10.66M
YoY Change 1507.39%
Intangibles $23.26M
YoY Change 624.39%
Long-Term Investments
YoY Change
Other Assets $1.627M $1.627M $500.0K
YoY Change 225.36% 225.36% -99.83%
Total Long-Term Assets $57.71M $57.71M $14.60M
YoY Change 294.66% 295.26% -95.13%
TOTAL ASSETS
Total Short-Term Assets $238.0M $238.0M $352.4M
Total Long-Term Assets $57.71M $57.71M $14.60M
Total Assets $295.7M $295.7M $367.0M
YoY Change -19.42% -19.42% 22.09%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $24.71M $24.71M $14.30M
YoY Change 72.82% 72.82% 107.25%
Accrued Expenses $975.8K $975.8K $600.0K
YoY Change 62.64% 62.64% -60.44%
Deferred Revenue $7.004M
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change -100.0%
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $33.56M $33.56M $15.90M
YoY Change 110.39% 111.05% 425.95%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $0.00 $0.00
YoY Change
Other Long-Term Liabilities $10.53M $10.53M $11.40M
YoY Change 2006.63% -7.6% -53.29%
Total Long-Term Liabilities $10.53M $10.53M $11.40M
YoY Change 2006.63% -7.6% -53.29%
TOTAL LIABILITIES
Total Short-Term Liabilities $33.56M $33.56M $15.90M
Total Long-Term Liabilities $10.53M $10.53M $11.40M
Total Liabilities $44.09M $44.09M $27.30M
YoY Change 61.22% 61.5% -0.48%
SHAREHOLDERS EQUITY
Retained Earnings -$145.2M
YoY Change 404.48%
Common Stock $768.5K
YoY Change 0.02%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $251.6M $251.6M $339.6M
YoY Change
Total Liabilities & Shareholders Equity $295.7M $295.7M $367.0M
YoY Change -19.42% -19.42% 22.09%

Cashflow Statement

Concept 2023 Q4 2023 2022
OPERATING ACTIVITIES
Net Income -$29.28M -$116.4M -$11.40M
YoY Change 2021.54% 920.87% -36.32%
Depreciation, Depletion And Amortization $1.771M $4.851M $1.556M
YoY Change 608.32% 211.74% 907.71%
Cash From Operating Activities -$33.08M -$92.91M -$32.33M
YoY Change 115.94% 187.37%
INVESTING ACTIVITIES
Capital Expenditures $5.568M $17.49M $9.040M
YoY Change 73.46% 93.45% 391.3%
Acquisitions -$14.81K
YoY Change
Other Investing Activities -$7.253M -$6.283M -$1.100M
YoY Change 559.39% 471.21% -99.63%
Cash From Investing Activities -$12.82M -$23.77M -$10.14M
YoY Change 197.48% 134.45% -96.62%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $0.00 $0.00 $11.00M
YoY Change -100.0%
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -1.648M -2.148M $332.8M
YoY Change -1473.32% -100.65% 10.93%
NET CHANGE
Cash From Operating Activities -33.08M -92.91M -$32.33M
Cash From Investing Activities -12.82M -23.77M -$10.14M
Cash From Financing Activities -1.648M -2.148M $332.8M
Net Change In Cash -47.55M -118.8M $290.3M
YoY Change 143.72% -140.93%
FREE CASH FLOW
Cash From Operating Activities -$33.08M -$92.91M -$32.33M
Capital Expenditures $5.568M $17.49M $9.040M
Free Cash Flow -$38.65M -$110.4M -$41.37M
YoY Change 108.58% 166.85% 2148.45%

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During the year ended December 31, 2023, the Company incurred advertising expenses of $4,550,742 (2022 – $1,666,912).</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><b>Internal Use Software and Website Development Costs</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company capitalizes certain costs incurred in developing software programs or websites to be used solely to meet internal needs and cloud-based applications used to deliver our services. The Company capitalizes these costs once the preliminary project stage is complete, and it is probable that the project will be completed and the software will be used to perform the intended function. Capitalized internal use software costs are included in intangible assets, net on the consolidated balance sheets. 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Under this method, deferred tax assets and liabilities are determined on the basis of the difference between the tax bases of assets and liabilities and their respective financial reporting amounts (“temporary differences”) at enacted tax rates in effect for the years in which the temporary differences are expected to reverse. A valuation allowance is established for deferred tax assets for which realization is uncertain.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Uncertain tax positions are accounted for using a comprehensive model for the manner in which a company should recognize, measure, present and disclose in its financial statements all material uncertain tax positions that the company has taken or expects to take on a tax return. This applies to income taxes and is not intended to be applied by analogy to other taxes, such as sales taxes, value-add taxes, or property taxes. The Company reviews its nexus in various tax jurisdictions and the Company’s tax positions related to all open tax years for events that could change the status of its tax liability, if any, or require an additional liability to be recorded. Such events may be the resolution of issues raised by a taxing authority, expiration of the statute of limitations for a prior open tax year or new transactions for which a tax position may be deemed to be uncertain. Those positions, for which management’s assessment is that there is more than a 50 percent probability of sustaining the position upon challenge by a taxing authority based upon its technical merits, are subjected to the measurement criteria.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company records the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement with a taxing authority having full knowledge of all relevant information. Any liabilities for which the Company expects to make cash payments within the next twelve months are classified as “short term”.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.9in 0pt 0.5in; text-align: justify"><b>Share-Based Compensation</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company issues equity awards such as stock options and restricted stock units to certain of its employees, advisory board members, directors, officers and consultants. For awards with a market condition, the market condition is taken into consideration in the fair value-based measure, whereas service and performance conditions are taken into consideration in determining the share-based compensation expense.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">For equity awards granted to employees that have only a service condition, the Company recognizes the share-based compensation expense on a straight-line basis over the requisite service period. The vesting period for the equity awards granted is determined by the board of directors of the company and the typical vesting period for equity awards with service conditions is three to four years. 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For equity awards with a performance condition, the Company assesses the likelihood of the performance condition underlying an award being met and recognizes a share-based compensation expense associated with that award only if it is probable that the performance condition will be met.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Forfeitures are accounted for when they occur.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><b>Loss per Share</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company calculates basic and diluted net loss per common share by dividing the net loss by the number of weighted average common shares outstanding during the period. The Company has excluded other potentially dilutive shares, which include warrants to purchase common shares and outstanding stock options, from the number of common shares outstanding as their inclusion in the computation for all periods would be anti-dilutive due to net losses incurred.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><b>Cash, Cash Equivalents, and Marketable Securities</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Cash and cash equivalents primarily consist of cash on deposit with banks and amounts held in treasury bills and money market funds. Cash equivalents are carried at amortized cost, which approximates their fair market value.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The Company considers all marketable securities with original maturities of <span style="-sec-ix-hidden: hidden-fact-160">three</span> months or less from the date of purchase to be cash equivalents and those with original maturities of greater than <span style="-sec-ix-hidden: hidden-fact-161">three</span> months as marketable securities on our consolidated balance sheets. Management determines the appropriate classification of investments at the time of purchase.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Marketable securities are being accounted for as held-to-maturity investments and are carried at amortized cost with any gains and losses being recognized in interest income on the consolidated statements of operations. As of December 31, 2023 and 2022, the marketable securities have maturity dates of <span style="-sec-ix-hidden: hidden-fact-162"><span style="-sec-ix-hidden: hidden-fact-163">twelve</span></span> months or less and their amortized cost approximates fair value.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><b>Accounts Receivable and Allowance for Current Expected Credit Losses</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Accounts receivable includes current outstanding invoices billed to customers due under customary trade terms. The term between invoicing and when payment is due is not significant. The accounts receivable balance as of December 31, 2021 was $1,344,654.</p>
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