SBIG 10-K & 10-Q changes, risk factors and insider trading
SBIG Holdings, Inc. (also SBIGW) · OTC · Services-Computer Programming Services · CIK 1801602 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “We are reliant on a single vendor for the technology platform that supports our business operations, and our failure to meet certain future contractual minimums could result in the loss of exclusivity under our vendor agreement, which could materially and adversely affect our business, financial condition, and results of operations.”
Largest changes
“Furthermore, our reliance on the vendor exposes us to risks associated with the vendor’s own operational, financial, and regulatory challenges. If the vendor were to experience a material adverse event, including but not limited to bankruptcy, insolvency, a significant data breach, regulatory action, or a decision to discontinue or materially alter the platform, we may be unable to transition to an alternative solution in a timely manner or on commercially reasonable terms, if at all. …”see in full comparison
“In December 2025, the U.S. President issued an executive order directing the Attorney General and federal agencies to expedite the administrative rescheduling of cannabis under the federal Controlled Substances Act from Schedule I to Schedule III, reflecting a determination that cannabis has a currently accepted medical use and reorienting federal policy toward research and regulated markets. …”see in full comparison
“We are reliant on a single vendor for the technology platform that supports our business operations, and our failure to meet certain future contractual minimums could result in the loss of exclusivity under our vendor agreement, which could materially and adversely affect our business, financial condition, and results of operations.”see in full comparison
SpringBig is an early-stage company with a history of losses. We incurred net losses ofsee in full comparison$1.6$3.2 million and$10.2$1.9 million for the years ended December 31, 20252024and December 31,2023,2024, respectively. In addition, as of December 31, 2025 and 2024, we had a working capital deficiency of$1.5$3.5 million and $1.8 million, respectively, and we may need to raise additional funds to meet our obligations and sustain our operations. The note payables classified as long-term liabilities are due within the next twelve months of the issuance date. SpringBig may not achieve or maintain profitability in the future. We may incur net losses in the future, and such losses may fluctuate significantly from quarter to quarter. These conditions raise substantial doubt about the Company’s ability toquarter.continue as a going concern for a period of at least twelve months from the issuance date of these consolidated financial statements.
“Our business operations rely on a technology platform provided by a single third-party vendor pursuant to a contractual arrangement. The third-party vendor’s platform is integral to our services, and we do not currently maintain a comparable alternative or backup platform. …”see in full comparison
Section 280E of the Code does not allow any deduction or credit for any amount paid or incurred during the taxable year in carrying on business, other than costs of goods sold, if the business (or the activities which comprise the trade or business) consists of trafficking in controlled substances (within the meaning of Schedules I and II of the CSA). The IRS has applied this provision to cannabis operations, prohibiting them from deducting expenses associated with cannabis businesses beyond costs of goods sold and asserting assessments and penalties for additional taxes owed. Section 280E of the Code may have a lesser impact on cannabis cultivation and manufacturing operations than on sales operations, which directly affects our suppliers, who are cannabis retailers and brands. However, Section 280E of the Code and related IRS enforcement activity have had a significant impact on the operations of all cannabis companies. While Section 280E of the Code does not directly affect SpringBig, it lowers SpringBig’s clients’ profitability and could result in decreased demand or higher price sensitivity for SpringBig’s marketing and customer loyalty services. An otherwise profitable cannabis business may operate at a loss after taking into account its U.S. income tax expenses. This affects SpringBig because SpringBig’s sales and operating results could be adversely affected if SpringBig’s clients decrease their marketing budgets and are operating on lower profit margins as a result of unfavorable treatment by the Code. Whilesee in full comparisonHHS’sPresidentrecommendationTrump’s executive order to reschedule cannabis from Schedule I to Schedule IIIand the DEA subsequent acceptance of that recommendationwould remove theSection 280E,taxthe rulemaking process has been stayed pending the resolutionconsequences ofanSectioninterlocutory appeal, and280E, there is no guarantee thatfuture litigation ortheDEA’s newly appointed administratororder willnotbe implemented, and future litigation could also slow down or halt the rescheduling process, thereby keeping Section 280E280Ein place.
Full comparison: every changed paragraph (21)
We have a relatively short
operating history in a quickly evolving industry that may not develop as we anticipate, if at all. Both our relatively short operating
history and the pace of dramatic change in the cannabis industry, and the complex, multiple and sometimes conflicting regulatory regimes
applicable to it, makes it difficult to assess our future prospects, and you should evaluate our business in light of the risks and difficulties
we may encounter as the industry continues to evolve. While our revenue has grownstabilized in recent periods, this growth may not be sustainable
due to a number of factors, including the maturation of our business, increased competition and the eventual decline in the number of
new major geographic markets in which the sale of cannabis is permitted and to which we have not already expanded. We may not be able
to generate sufficient revenue to achieve and sustain profitability.
SpringBig is an early-stage
company with a history of losses. We incurred net losses of $1.6$3.2 million and $10.2$1.9 million for the years ended December 31, 2025
2024 and December 31, 2023,2024, respectively. In addition, as of December 31, 2025 and 2024, we had a working capital deficiency of $1.5$3.5 million
and $1.8 million, respectively, and we may need to raise additional funds to meet our obligations and sustain our operations. The
note payables classified as long-term liabilities are due within the next twelve months of the issuance date. SpringBig may not achieve
or maintain profitability
in the future. We may incur net losses in the future, and such losses may fluctuate significantly from quarter
to quarter. These conditions raise substantial doubt about the Company’s ability to quarter.continue as a going concern for a period of
at least twelve months from the issuance date of these consolidated financial statements.
Any legal or regulatory
enforcement enforcement
against us based on our platform, the content provided by clients, the marketing campaigns created by clients on our
platform or noncompliance
by our clients with licensing and other legal requirements, could subject us to various risks, including
monetary penaltiespenalties, criminal or civil liability, and/or required
changes to our platform or business model, and would likely cause
us to experience negative publicity. Any of these developments could
materially and adversely impact our business, operating
results, financial condition, brand, and reputation.
On January 23, 2024, the Company entered into the Notes Purchase Agreement with the Investors, pursuant to which the Company issued the Convertible Notes. Simultaneously, SpringBig, Inc. entered into a guaranty agreement to guarantee the Company’s obligations under the Convertible Notes and the Company and SpringBig, Inc. entered into a security agreement, pursuant to which the Investors were granted a security interest in all the assets of the Company and SpringBig, Inc. to secure repayment of amounts due under the Convertible Notes. As a result, if we default on our obligations under the Convertible Notes, the Investors could foreclose on its security interests and liquidate or take possession of some or all of the assets of the Company, SpringBig, Inc. and its subsidiaries, which would harm our business, financial condition and results of operations and could require us to curtail, or even to cease our operations. See “Subsequent Events” section in Note 23 of the notes to consolidated financial statements included in this report for more information.
Cannabis, other than hemp (defined by the U.S. government as Cannabis
sativa L. with a THC concentration of not more than 0.3% on a dry weight basis), is a Schedule I controlled substance under the CSA. Even
in states or territories that have legalized cannabis to some extent, the cultivation, possession, and sale of cannabis all violate the
CSA and are punishable by imprisonment, substantial fines and forfeiture. Moreover, individuals and entities may violate federal law if
they aid and abet another in violating the CSA, or conspire with another to violate the law, and violating the CSA is a predicate for
certain other crimes, including money laundering laws and the Racketeer Influenced and Corrupt Organizations Act. The U.S. Supreme Court
has ruled that the federal government has the authority to regulate and criminalize the sale, possession and use of cannabis, even for
individual medical purposes, regardless of whether it is legal under state law. For many years, however, the U.S. government has not prioritized
the enforcement of those laws against cannabis companies complying with state law and their vendors. No reversal of that policy of prosecutorial
discretion is expected under the Trump administration, although prosecutions against state-legal entities cannot be ruled out especially
in light of President Trump’s appointment of Pam Bondi as Attorney General and DerekTerry S. MaltzCole as acting DEA Administrator, each of whom
have more traditional views regarding cannabis enforcement.
On January 4, 2018, then
U.S. Attorney General Jeff Sessions issued
a memorandum for all U.S. Attorneys (the “Sessions Memo”) rescinding certain past
DOJ memoranda on cannabis law enforcement,
including the Memorandum by former Deputy Attorney General James Michael Cole (the “Cole
Memo”) issued on August 29, 2013,
under the Obama administration. Describing the criminal enforcement of federal cannabis prohibitions
against those complying with state
cannabis regulatory systems as an inefficient use of federal investigative and prosecutorial resources,
the Cole Memo gave federal prosecutors
discretion not to prosecute state law compliant cannabis companies in states that were regulating
cannabis, unless one or more of eight
federal priorities were implicated, including use of cannabis by minors, violence, or the use of
federal lands for cultivation. The Sessions
Memo, which remains in effect, states that each U.S. Attorney’s Office should follow
established principles that govern all federal
prosecutions when deciding which cannabis activities to prosecute. As a result, federal
prosecutors could and still can use their prosecutorial
discretion to decide to prosecute even state-legal cannabis activities. Since
the Sessions Memo was issued nearly three years ago,issued, however, U.S. Attorneys have
generally not prioritized the targeting of state law
compliant entities.
On October 6, 2022, the Biden Administration issued an Executive Order which, in part, directed the Secretary of Health and Human Services to begin the administrative process of reviewing the scheduling of cannabis under the Controlled Substances Act. On December 18, 2025, President Trump signed an Exective Order directing Attorney General Pam Bondi to take all necessary steps to reschedule cannabis from Schedule I to Schedule III. However, reschedulign has not yet occured.
On October 6, 2022, the Biden
Administration issued an Executive Order which, in part, directed the Secretary of Health and Human Services to begin the administrative
process of reviewing the scheduling of cannabis under the Controlled Substances Act. On August 29, 2023, in response to President Biden’s
Executive Order, the U.S. Department of Health and Human Services (“HHS”) provided a formal recommendation to the U.S. Drug
Enforcement Agency (“DEA”) to reclassify cannabis from Schedule I to Schedule III based on its scientific findings and medical
evaluation. The DEA, which has the final authority to schedule or reschedule a drug, has yet to issue a decision on the recommendation, On September 27, 2023, the
U.S. Senate Banking Committee passed the SAFER Banking Act on a bipartisan vote of 14-9, which would shield banks from enforcement of
federal anti-money laundering statutes for offering services to state-legal cannabis businesses. While various versions of the bill have
passed the U.S. House of Representatives under prior leadership, the passage in the U.S. Senate Banking Committee marks the first time
the U.S. Senate has acted to reform cannabis banking. However, following the Republican takeover of both chambers of Congress in January
2025, the bill’s prospects have become increasingly uncertain. GOP leadership has signaled a shift in legislative priorities, making
it unclear whether the full U.S. Senate or the U.S. House of Representatives will take further action on the measure. It remains unclear
whether the bill will pass the full U.S. Senate or the U.S. House of Representatives.
Industry observers have mixed opinions on the prospects of cannabis
reform in the U.S.,U.S. with many expressing concerns about the DEA’s handling of the rescheduling process and the uncertainty surrounding
the new administration’s stance on cannabis reform. However, weWe cannot provide assurances about the content, timing or chances of executive
action to reschedule cannabis or the
passage of a bill legalizing cannabis or liberalizing cannabis regulations. Accordingly, we cannot
predict the timing of any change in
federal law or possible changes in federal enforcement. In the event that the federal government were
to reverse its long-standing hands-off
approach to the state legal cannabis markets and start more broadly enforcing federal law regarding
cannabis, we would likely be unable
to execute our business plan, and our business and financial results would be adversely affected.
In December 2025, the U.S. President issued an executive order directing the Attorney General and federal agencies to expedite the administrative rescheduling of cannabis under the federal Controlled Substances Act from Schedule I to Schedule III, reflecting a determination that cannabis has a currently accepted medical use and reorienting federal policy toward research and regulated markets. The executive order does not itself change cannabis’ legal status under federal law, and cannabis remains a Schedule I controlled substance until formal rulemaking is completed by the Department of Justice and the Drug Enforcement Administration (DEA). The rescheduling initiative builds on a proposed rule previously issued by the Department of Justice in 2024 but is subject to the administrative rulemaking process, potential litigation, and ongoing procedural requirements before becoming effective.
The potential rescheduling of cannabis could have a material impact on companies operating in federal and state regulated cannabis markets. If finalized, Schedule III status would likely result in significant changes to federal tax treatment, including the prospective elimination of Internal Revenue Code Section 280E treatment that currently disallows ordinary business deductions for activities involving Schedule I controlled substances. This change could materially improve federal taxable income calculations, effective tax rates, and cash flows for cannabis operating entities.
The timing, scope, and ultimate regulatory outcomes remain uncertain. There can be no assurance that the federal rescheduling process will be completed on a specific timetable, that challenges to the administrative process will not delay or alter the ultimate scheduling decision, or that associated regulatory relief (including tax, banking, interstate commerce, and financial institution risk treatment) will be implemented or benefit the Company’s operations. Accordingly, management continues to monitor developments and assess the effects of these actions on the Company’s financial results, exposures, and disclosures. No adjustment has been made to the Company’s financial statements as of and for the year ended December 31, 2025 for potential impacts arising from cannabis rescheduling under federal law due to the uncertainty regarding timing and substance of any future rulemaking.
Section 280E of the Code does not allow any deduction or credit for
any amount paid or incurred during the taxable year in carrying on business, other than costs of goods sold, if the business (or the activities
which comprise the trade or business) consists of trafficking in controlled substances (within the meaning of Schedules I and II of the
CSA). The IRS has applied this provision to cannabis operations, prohibiting them from deducting expenses associated with cannabis businesses
beyond costs of goods sold and asserting assessments and penalties for additional taxes owed. Section 280E of the Code may have a lesser
impact on cannabis cultivation and manufacturing operations than on sales operations, which directly affects our suppliers, who are cannabis
retailers and brands. However, Section 280E of the Code and related IRS enforcement activity have had a significant impact on the operations
of all cannabis companies. While Section 280E of the Code does not directly affect SpringBig, it lowers SpringBig’s clients’
profitability and could result in decreased demand or higher price sensitivity for SpringBig’s marketing and customer loyalty services.
An otherwise profitable cannabis business may operate at a loss after taking into account its U.S. income tax expenses. This affects SpringBig
because SpringBig’s sales and operating results could be adversely affected if SpringBig’s clients decrease their marketing
budgets and are operating on lower profit margins as a result of unfavorable treatment by the Code. While HHS’sPresident recommendationTrump’s executive
order to
reschedule cannabis from Schedule I to Schedule III and the DEA subsequent acceptance of that recommendation would remove the Section
280E,tax the rulemaking process has been stayed pending the resolutionconsequences of anSection interlocutory appeal, and280E, there is no guarantee
that future
litigation or the DEA’s newly appointed administratororder will notbe implemented, and future litigation could also slow down or halt the rescheduling process, thereby keeping Section
280E 280E
in place.
The MORE Act, which was introduced
in the U.S. House of Representatives
and the U.S. Senate in 2019, and passed by the House in 2020 and 2021, and reintroduced again in the House on August 29, 2025, would remove
marijuana from
the CSA, which would effectively carve out state-legal cannabis businesses from Section 280E of the Code and allow for
interstate commerce
of cannabis. However, the MORE Act would impose two new taxes on cannabis businesses: an excise tax measured by the
value of certain cannabis
products and an occupational tax assessed on the enterprises engaging in cannabis production and sales. Although
these novel tax provisions
are included in the MORE Act passed by the House of Representatives, it is challenging to predict whether,
when and in what form the MORE
Act could be enacted into law and how any such legislation would affect the activities of SpringBig. Similarly,
the recently introduced
States Reform Act 2.0 would also effectively carve out state-legal cannabis businesses from Section 280E of the
Code and permit interstate
commerce but at the same time impose a new excise tax on cannabis businesses (albeit at a lower rate than the proposed MORE Act).businesses.
We are reliant on a single vendor for the technology platform that supports our business operations, and our failure to meet certain future contractual minimums could result in the loss of exclusivity under our vendor agreement, which could materially and adversely affect our business, financial condition, and results of operations.
Our business operations rely on a technology platform provided by a single third-party vendor pursuant to a contractual arrangement. The third-party vendor’s platform is integral to our services, and we do not currently maintain a comparable alternative or backup platform. Any disruption, degradation, or discontinuation of access to the third-party vendor’s platform, whether resulting from technical failures, cybersecurity incidents, changes in the vendor’s business strategy, financial difficulties experienced by the vendor, or other factors beyond our control, could materially disrupt our operations and adversely affect our ability to serve our customers and generate revenue.
The contractual arrangement with the vendor contains certain minimum payment thresholds that we are required to satisfy in the future. In the event that we fail to meet these monthly minimums in any given period, the exclusivity provisions under the vendor arrangement may be terminated, thereby permitting the vendor to provide its platform and related services to our competitors. The loss of exclusivity could significantly erode our competitive advantage. There can be no assurance that we will be able to consistently meet the required minimums, particularly during periods of reduced demand, macroeconomic uncertainty, seasonal fluctuations, or other adverse business conditions.
Furthermore, our reliance on the vendor exposes us to risks associated with the vendor’s own operational, financial, and regulatory challenges. If the vendor were to experience a material adverse event, including but not limited to bankruptcy, insolvency, a significant data breach, regulatory action, or a decision to discontinue or materially alter the platform, we may be unable to transition to an alternative solution in a timely manner or on commercially reasonable terms, if at all. The costs associated with migrating to a replacement platform, including potential downtime, retraining of personnel, integration expenses, and loss of historical data or functionality, could be substantial.
If we are unable to maintain our exclusive arrangement under the contractual arrangement with the third-party vendor, or if our relationship with the vendor is otherwise disrupted or terminated, our business, financial condition, results of operations, and competitive position could be materially and adversely affected.
Our common stock is
quoted on the OTCQX®OTCQB BestVenture Market, a trading platform of OTC Markets Group, instead of a national exchange or quotation system. Accordingly,
our investors may experience significant volatility in the market price of our stock and have difficulty selling their shares.
Our common stock is currently
quoted on the OTCQX®OTCQB BestVenture Market, a trading platform of OTC Markets Group, under the ticker symbol “SBIG.” The OTC Markets
Group is a regulated quotation service that displays real-time quotes, last sale prices, and volume limitations in over-the-counter securities.
Trading in shares quoted on an OTC Markets Group trading platform is often thin and characterized by volatility in trading prices. This
volatility may be caused by a variety of factors, including the lack of readily available price quotations, the absence of consistent
administrative supervision of bid and ask quotations, lower trading volume, and market conditions. As a result, there may be wide fluctuations
in the market price of the shares of our Common Stock for reasons unrelated to operating performance, and this volatility, when it occurs,
may have a negative effect on the market price for our securities. Moreover, the OTC Markets Group is not a national stock exchange, and
trading of securities on one of its trading platforms is often more sporadic than the trading of securities listed on a national quotation
system or stock exchange. Accordingly, our stockholders may not be able to realize a fair price from their securities when they determine
to sell them or may have to hold them for a substantial period of time until the market for our common stock improves, and as a result
of our quotation for trading on the OTCQX®OTCQB BestVenture Market, we may be negatively impacted in our ability to raise equity financing, be
limited in our ability to issue additional securities or obtain additional financing in the future, and may face negative impacts on our
reputation and, consequently, our business.
Management's Discussion & Analysis (MD&A)
New heading “Stock-Based Compensation– Market-Based Vesting Restricted Stock Units”
Largest changes
“The Company’s ability to continue as a going concern is dependent on its ability to improve liquidity and meet its obligations as they come due. Management’s plans to address these conditions include a combination of actions, which may include increasing revenue through greater customer usage and new customer acquisition, negotiating amendments or extensions of existing debt obligations, reducing operating costs, and pursuing strategic capital transactions. …”see in full comparison
“These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of at least twelve months from the issuance date of these consolidated financial statements.”see in full comparison
“Stock-Based Compensation– Market-Based Vesting Restricted Stock Units”see in full comparison
Technology and software development expenses decreased bysee in full comparison$2.1$1.1 million, or26%,19%, for the year ended December 31,2024,2025, compared to the year ended December 31,2023,2024, with the decrease being attributable tolowerreduced employeeexpenses associated with the use of offshore contract developersheadcount andarefinedreductionsoftwarein compensation expense.spend.
“The grant-date fair values of the awards were determined using a Monte Carlo simulation model incorporating assumptions regarding expected volatility, risk-free interest rates, and other factors. In accordance with ASC 718, the total grant-date fair value is recognized over the derived service periods for each tranche, regardless of whether the market conditions are ultimately satisfied.”see in full comparison
Revenues. Revenues decreased bysee in full comparison$3.4$1.8 million for the year ended December 31, 2025, representing a 7% year-on-year reduction compared with the year ended December 31, 2024. Our subscription revenue was $17.8 million for the year ended December 31, 2025, compared with $21.1 million in for the year ended December 31, 2024, representing a 12% year-on-yearreductiondecline.comparedThewithexcessthe year ended December 31, 2023. Our subscriptionuse revenuewasdeclined$21.1by 14% year-on-year from $2.6 million for the year ended December 31, 2024,compared with $22.2 million in for the year ended December 31, 2023, representing a 6% year-on-year decline. The excess use revenue declined by 38% year-on-year from $4.2 million for the year ended December 31, 2023,to$2.6$2.2 million for the year ended December 31,2024,2025, with this decrease being due to theweaker economy impacting thechallenging cannabissectoreconomy and our clients being budget-conscious in limiting their messaging activity towithinthethevolumes of their subscription. SpringBighascontinues to expanded its product offeringsduringwithin thecurrentgamingyear,vertical,includingandthehasintroductionseenofpositiveamomentumpaid-for consumer VIP loyalty tierin thatretail clients can operate in conjunction with their standard loyalty program, and offering clients the ability to incorporate gift cards as a payment option for consumers within their digital rewards wallet.area. Our revenue from Brands clients decreased by56%28% year-on-year and was$396,000$286,000 for the year ended December 31,2024,2025, as compared to$901,000$396,000 for the year ended December 31,2023.2024.
Full comparison: every changed paragraph (35)
SpringBig serves approximately 900
775 brand and retailer clients across
more than 2,3002,400 distinct retail locations in North America. Our clients distribute approximatelyover 600 million
digital messages annually,
and in the last year more than $7.5$5.7 billion of gross merchandise value was accounted for by clients utilizing
our platform.
To provide investors with additional information regarding our financial results, we have disclosed EBITDA, which is a non-GAAP financial measure that we calculate as net income before interest, taxes, depreciation and amortization and Adjusted EBITDA, which represents EBITDA adjusted for certain unusual, infrequent items, or non-cash items (such as bad debt expense and stock-based compensation). Management believes Adjusted EBITDA remains a useful supplemental metric despite current financial challenges, as it provides additional transparency into operating performance by isolating core business results from non-cash, non-recurring, and capital structure-related items.
In 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software, which clarifies the accounting for costs incurred in the development and implementation of internal-use software. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. The Company does not expect the adoption of this standard to have a material impact on its financial position, results of operations, or cash flows.
Revenues. Revenues
decreased by $3.4$1.8 million for the year ended December 31, 2025, representing a 7% year-on-year reduction compared with the year ended
December 31, 2024. Our subscription revenue was $17.8 million for the year ended December 31, 2025, compared with $21.1 million in for
the year ended December 31, 2024, representing a 12% year-on-year reductiondecline. comparedThe withexcess the year ended
December 31, 2023. Our subscriptionuse revenue wasdeclined $21.1by 14% year-on-year from $2.6
million for the year ended December 31, 2024, compared with $22.2 million in for
the year ended December 31, 2023, representing a 6% year-on-year decline. The excess use revenue declined by 38% year-on-year from $4.2
million for the year ended December 31, 2023, to $2.6$2.2 million for the year ended December 31, 2024,2025, with this decrease being due to the
weaker economy impacting thechallenging cannabis sectoreconomy and our clients being budget-conscious in limiting their messaging activity to withinthe the
volumes of their subscription.
SpringBig hascontinues to expanded its product offerings duringwithin the currentgaming year,vertical, includingand thehas introductionseen ofpositive amomentum paid-for
consumer VIP loyalty tierin that retail clients can operate in conjunction with their standard loyalty program, and offering clients the
ability to incorporate gift cards as a payment option for consumers within their digital rewards wallet.area. Our revenue
from Brands clients
decreased by 56%28% year-on-year and was $396,000$286,000 for the year ended December 31, 2024,2025, as compared to $901,000$396,000 for the
year ended December
31, 2023.2024.
Our net revenue retention
rate was 79% for the twelve months ended December 31, 2025, compared with 88% for the twelve months ended December 31, 2024, compared with 97% for the twelve months ended December 31, 2023, reflecting
theindustry-specific challenging macroeconomic conditions of the cannabis marketchallenges and the financial stress ofaffecting some of ourcertain retail clientsclients, leadingwhich toresulted in the
Company having to suspendsuspension or ceasetermination some of
access to our platform.
Gross Profit. Gross
profit decreased by $3.6$2.0 million to $18.0$16.0 million for the year ended December 31, 2024,2025, from $21.6$18.0 million for the year ended December
31, 2023,2024, representing a 17%11% year-on-year reduction. The cost of revenue increased by $0.2 million, representing a 3% increase, for the
year ended December 31, 2023,2024, due to higherincreased messaging distribution volumes resulting from minimum monthly commitments under our new
vendor agreement. Messaging distribution costs which represent the mainprimary expensecomponent inof our cost of revenue. The
gross profit margin reduced
from 77% for the year ended December 31, 2023, to 73% for the year ended December 31, 2024, to 70% for the year ended December 31, 2025, due to the higher
negotiated messaging distribution
costs. costsSubsequent andto year-end, the impactCompany ofamended recentlythe introducedagreement lowerwith marginits services.largest vendor to reduce the minimum monthly commitment, however,
in the process the Company agreed to pay for additional commitments for the year end December 31, 2025. Had those expenses not been agreed
to, the gross profit margin, would have been unchanged at 73% for the year ended December 31, 2025.
Operating Expenses.
We havecontinue consistentlyto focusedfocus on right sizing the operating expenses of the business to accelerate our path to sustainable profitability
in the
challenging macroeconomicmarket conditions that prevail across the cannabis market,market and other regulated industries, and which impacts revenue in the near-term.
Our operating expenses decreased
by $11.3$882 million,thousand, or 38%,5%, for the year ended December 31, 2024,2025, compared to the year ended December 31, 2023.2024.
Selling, servicing and marketing
expenses decreased by $3.6$849 million,thousand, or 43%,18%, for the year ended December 31, 2024,2025, compared to the year ended December 31, 2023,2024, due to
lowerreduced compensation expense as a result of lower employee headcount.
Technology and software development
expenses decreased by $2.1$1.1 million,
or 26%,19%, for the year ended December 31, 2024,2025, compared to the year ended December 31, 2023,2024, with the
decrease being attributable to lowerreduced
employee expenses associated with the use of offshore contract developersheadcount and arefined reductionsoftware in compensation
expense.spend.
General and administrative
expenses decreasedincreased by $5.6$1.1 million, or 41%, 14%,
for the year ended December 31, 2024,2025, compared to the year ended December 31, 2023,2024, with the
decrease increase being largely attributable to reductions in insurance, directors’ fees, legal and accounting increased
advisory fees, investoras relations
costswell due to being quoted for trading onas the OTCQX®one-time Bestfees Marketassociated rather than listed onwith the Nasdaqprior Capitaloffice Market, and a lower credit
loss expense.lease.
Interest Expense.
Interest expense was $2.2$1.3 million for the year ended December 31, 2024,2025, compared with $2.2 million for the year ended December 31, 2023.2024.
During the year ended December 31, 2024,2025, the interest expense comprised primarily interest paid on the cash advances and interest on the
2024 Secured Convertible and Term
notes, which were issued in January 2024, whereas the interest expense during the year ended December
31, 20232024 comprised primarilyof high interest paid on
cash advances loan payments and interest on the 6% Senior Secured Convertible Note that was repurchased
in January 2024.
Gain on note repurchase. The gain on the repurchase of the 6% Senior Secured Note for the year ended December 31, 2024 is the difference between the cash paid to repurchase the entire obligation of $2.9 million and the outstanding principal and accrued interest of $5.2 million, less unamortized discounts and warrant value of $0.7 million.
Loss on debt extinguishment. The loss on debt extinguishment for the year ended December 31, 2024 arises on the amendment to the 2024 Senior Convertible Notes in November 2024 and comprises $0.6 million expensing of the difference between the carrying value of the old debt and the new debt recorded at fair value, which becomes the new carrying value of the 2024 Senior Convertible Notes.
Loss on asset disposal. The loss on asset disposal for the year ended December 31, 2025 relates to the relocation of the Company’s headquarters office space in Boca Raton, Florida, which resulted in the disposal of certain leasehold improvements and office equipment.
Change in fair value of
warrants. The liability relating to warrants issued by SpringBig is included on the balance sheet at the fair value prevailing at
the end of the accounting period and any change in value is reported in the income statement. At December 31, 2024,2025, the market value of
the public warrants, which are quoted for trading on the OTC Pink Market, was $0.0007$0.0010 per warrant compared with $0.0002$0.0007 at December 31,
2023.2024. The increase in value, which is recognized as an expense in our income statement for the year ended December 31, 2024,2025, was $8,000$5,000
compared with aan creditincrease of $334,000$8,000 in our income statement for the year ended December 31, 2023.2024.
We have incurred net losses
since inception, andhowever, experiencedwe negativeobtained positive cash flows from operations.operations for the year ended December 31, 2025. Prior to the business
combination in June 2022, we financed our
operations and capital expenditures primarily through the private sales of equity securities
and revenue. The net losses since the business
combination have been financed through the capital received because of the business combination,
a public equity offering in May 2023,
short-term cash advances as described below, and the issuance of $8.0 million Term Notes and Convertible
Notes in January 2024. The 2024 Secured Term Notes and 2024 Secured Convertible Notes are due in January 2027, and are recorded as long-term
liabilities on the Balance Sheet. Our primary
uses of cash in the short-term arecontinues to fundbe funding our operations.
These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of at least twelve months from the issuance date of these consolidated financial statements.
The Company’s ability to continue as a going concern is dependent on its ability to improve liquidity and meet its obligations as they come due. Management’s plans to address these conditions include a combination of actions, which may include increasing revenue through greater customer usage and new customer acquisition, negotiating amendments or extensions of existing debt obligations, reducing operating costs, and pursuing strategic capital transactions. There can be no assurance that these plans will be successfully implemented or that they will generate sufficient liquidity on a timely basis.
On May 31, 2023, SpringBig
raised gross cash proceeds of approximately $3.0 million through a public equity offering and in addition $1.25 million of the outstanding
principal of the 6% Senior Secured Convertible Note was converted into common shares. In aggregate, 14.0 million common shares were issued,
of which, approximately 1.0 million related to conversion of a portion of the 6% Senior Secured Convertible Note to common shares on June
15, 2023. The cash proceeds from the public equity offering, after payment of transaction related fees, were $2.5 million and these funds
were in part used to make further repayments of principal of the 6% Senior Secured Convertible Note and in part for general corporate
purposes.
On January 23, 2024, the
Company raised $6.4 million through the issuance of 8%2024 Secured Convertible Notes and $1.6 million through the issuance of 12%2024 Secured
Term Notes. The
net cash proceeds, after transaction expenses, were $7.2 million.
The 8% Convertible Notes
accrue interest which is added to the outstanding principal balance semi-annually. The Notes are convertible into common stock at a conversion
price of $0.15 per share at the holder’s option any time up to the day prior to maturity, initially in January 2026. The 12%2024 Secured
Term
Notes, initially due at issuance in January 2026, accrue interest payable in cash semi-annually. The 8%2024 Secured Convertible Notes
and 12% Term
Notes rank pari passu and are secured by substantially all the assets of the Company.
On November 11, 2024, the
Company amended the terms of the 12%2024 Secured Term Notes and 8%2024 Secured Convertible Notes including extending the maturity date to January
23, 2027, amending the interest rates and adjusting the requirement for the Company to maintain a minimum cash balance of at least $1
million with the provision now applicable only at the end of any calendar month commencing on or after February 1, 2025. The Company accounted
for the amendment as a debt modification related to the term notes and as an extinguishment of the convertible notes. Refer to Footnote
9 in the accompanying financial statements for further details.
To the extent existing cash
and cash from operations are not sufficient
to fund future activities, we may need to raise additional funds. We may seek to raise additional
funds through equity, equity-linked
or debt financings. If we raise additional funds by incurring indebtedness, such indebtedness may
have rights that are senior to holders
of our equity securities and could contain covenants that restrict operations. Any additional equity
financing may be dilutive to stockholders.
Further, the 8%2024 Secured Convertible Notes and 12%2024 Secured Term Notes also contain a number of restrictive covenants
that may impose
significant restrictions on obtaining future financings, including restrictions on SpringBig’s ability to do any
of each following
while the 8%2024 Secured Convertible Notes and 12%2024 Secured Term Notes remain outstanding: (i) incurring
additional indebtedness and guaranteeing indebtedness; (ii) incurring liens or allowing mortgages or other encumbrances; (iii) prepaying,
redeeming, or repurchasing certain other debt; (iv) paying dividends or making other distributions or repurchasing or redeeming its capital
stock; (v) selling assets or entering into or effecting certain other transactions (including a reorganization, consolidation, dissolution
or similar transaction or selling, leasing, licensing, transferring or otherwise disposing of assets of the Company or its subsidiaries);
(vi) issuing additional equity (outside of issuances under our equity compensation plan); and (vii) adopting certain amendments to our
governing documents, among other restrictions. Accordingly, we may be limited in our ability to raise additional capital on acceptable
terms or at all within such limitations. Such restrictions may be waived by consent of the noteholders.
Cash usedprovided inby operating
activities activities
consists primarily of net loss adjusted for certain non-cash items, including depreciation and amortization, non-cash stock
compensation compensation
expenses, changes in the fair value of financial instruments and the effect of changes in working capital and other activities.
For the year ended December
31, 2024, the net loss was $1.9 million and the cash used in operating activities was $1.0 million. The difference of $0.9 million is
due to $2.0 million of non-cash items (comprising $0.6 million loss on debt extinguishment, $0.7 million credit loss expense, $0.7 million
relating to stock compensation expense, $0.2 million relating to depreciation and amortization, $0.4 million relating to amortization
of operating lease right of use asset, $0.4 million amortization of debt financing costs and $0.5 million accrued interest, offset by
a $1.5 million gain on the repurchase of convertible notes) and a $1.1 million increase in working capital, primarily due to a $1.6 million
reduction in accounts payable and other liabilities.
For the year ended December
31, 2023,2025, the net loss was $10.2$3.2 million
and andthe cash usedprovided inby operating activities was $4.0$361 million.thousand. The difference of $6.2 million is due
to $1.5 million of non-cash items (comprisingwere $0.8approximately $2.9 million relating to stock compensation expense, $1.0 million relating to depreciation
and amortization and $0.4 million relating to asset write-offs, offset by a $0.3 million gain on fair value of warrants, $1.7 million
deferred payroll tax credit cash receipt, and a $2.6$760 million thousand
increase in working capital, primarily due to a $2.2$1.9 million increase in
accounts payable and other liabilities.
For the year ended December 31, 2024, the net loss was $1.9 million, and the cash used in operating activities was $1.0 million. The difference of $0.9 million is due to $2.0 million of non-cash items (comprising $0.6 million loss on debt extinguishment, $0.7 million credit loss expense, $0.7 million relating to stock compensation expense, $0.2 million relating to depreciation and amortization, $0.4 million relating to amortization of operating lease right of use asset, $0.4 million amortization of debt financing costs and $0.5 million accrued interest, offset by a $1.5 million gain on the repurchase of convertible notes) and a $1.1 million increase in working capital, primarily provided by a $1.6 million reduction in accounts payable and other liabilities.
SpringBig has low capital investment
investment requirements, with our needs comprising primarily computer equipment and office furniture and related items. Cash used in investing activities
activities was $0.1 million for the yearyears ended December 31, 2024,2025 and $0.4 million for the year ended December 31, 2023.2024.
During the year ended December 31, 2025, the company did not have any financing activities.
During the year ended December
31, 2023, the net cash provided by financing activities was $1.1 million, comprising $2.7 million from the issuance of common stock and
exercise of employee stock options, $1.9 million from short-term cash advances, net of repayments, offset by $3.2 million used to repay
the 6% Senior Secured Convertible Note.
The preparation of financial
statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and revenues
and expenses during the period reported. Certain accounting policies involve a “critical accounting estimate” because they
are particularly dependent on estimates and assumptions made by management about matters that are highly uncertain at the time the accounting
estimates are made. In addition, while we have used our best estimates based on facts and circumstances available to us at the time, different
acceptable assumptions would yield different results. Changes in the accounting estimates are reasonably likely to occur from period to
period, which may have a material impact on the presentation of our financial condition and results of operations. We review these estimates
and assumptions periodically and reflect the effects of revisions in the period that they are determined to be necessary. We believe that
the assumptions and estimates associated with income taxes, equity-based compensation, and allowance for credit losses have the greatest
potential impact on our consolidated financial statements. Therefore, we consider the policies related to income taxes, equity-based compensation,
and allowance for credit losses to be our critical accounting policies.estimates.
Stock-Based Compensation– Market-Based Vesting Restricted Stock Units
In March and April 2025, the Company granted market-based restricted stock units (“RSUs”) to certain executives. The awards vest in multiple tranches upon the Company’s common stock achieving specified volume-weighted average price (“VWAP”) targets for at least twenty consecutive trading days during the ten-year contractual term, subject to continued service. If the applicable target is not achieved prior to expiration, the corresponding tranche will be forfeited.
The grant-date fair values of the awards were determined using a Monte Carlo simulation model incorporating assumptions regarding expected volatility, risk-free interest rates, and other factors. In accordance with ASC 718, the total grant-date fair value is recognized over the derived service periods for each tranche, regardless of whether the market conditions are ultimately satisfied.
What changed in the latest 10-Q
Risk Factors
New heading “The Company’s ability to continue as a going concern is dependent upon its ability to identify and consummate a strategic business combination or other transaction. If the Company is unable to consummate such a transaction, the Company will likely liquidate and wind up its affairs.”
New heading “The Company believes that its former Chief Executive Officer, Jaret Christopher, is not entitled to the issuance of shares of the Company’s common stock pursuant to agreements entered into with the Company. If the Company’s position is ultimately determined to be incorrect, the issuance of such shares would materially increase the number of the Company’s issued and outstanding shares of common stock, which could negatively impact the Company’s stock price.”
Removed heading “Our obligations to the holders of the Notes are secured by a security interest in substantially all of our assets, so if we default on those obligations, the noteholders could foreclose on, liquidate and/or take possession of our assets and/or accelerate the payment of principal. We have received a notice of default related to the Notes. To date, the noteholders have not enforced these rights under the Notes. If they were to enforce, we could be forced to curtail, or even to cease, our operations.”
Largest changes
“Our obligations to the holders of the Notes are secured by a security interest in substantially all of our assets, so if we default on those obligations, the noteholders could foreclose on, liquidate and/or take possession of our assets and/or accelerate the payment of principal. We have received a notice of default related to the Notes. To date, the noteholders have not enforced these rights under the Notes. If they were to enforce, we could be forced to curtail, or even to cease, our operations.”see in full comparison
“The Company’s ability to continue as a going concern is dependent upon its ability to identify and consummate a strategic business combination or other transaction. If the Company is unable to consummate such a transaction, the Company will likely liquidate and wind up its affairs.”see in full comparison
“On February 6, 2026, the Company notified the holders of the Notes that it was not in compliance with the minimum cash balance covenant under the applicable note agreements for the month of January 2026. On April 21, 2026, the Company received a Notice of Default, Reservation of Rights and Notice of Termination from the noteholders. On May 15, 2026, the noteholders began exercising their remedies under the note agreements, including exercising control over SpringBig, Inc. and removing the Company’s then-serving Chief Executive Officer.”see in full comparison
“On January 23, 2024, the Company entered into that certain securities purchase agreement (the “Notes Purchase Agreement”), dated January 23, 2024, between the Company and Shalcor Management, Inc. and other Purchasers (the “Investors”), pursuant to which the Company agreed to sell a total of $5.4 million of 8% Senior Secured Convertible Notes due 2026. Simultaneously, SpringBig, Inc. entered into a guaranty agreement to guarantee the Company’s obligations under the 2024 Secured Convertible Notes and the Company and SpringBig, Inc. …”see in full comparison
“The Company believes that its former Chief Executive Officer, Jaret Christopher, is not entitled to the issuance of shares of the Company’s common stock pursuant to agreements entered into with the Company. If the Company’s position is ultimately determined to be incorrect, the issuance of such shares would materially increase the number of the Company’s issued and outstanding shares of common stock, which could negatively impact the Company’s stock price.”see in full comparison
“On January 23, 2024, the Company entered into a securities purchase agreement (the “Notes Purchase Agreement”) with Shalcor Management, Inc. and other purchasers (the “Investors”), pursuant to which the Company issued $6.4 million aggregate principal amount of Senior Secured Convertible Notes and $1.6 million aggregate principal amount of Senior Secured Term Notes (collectively, the “Notes”). SpringBig, Inc. guaranteed the Company’s obligations under the Notes, and the Investors were granted a security interest in substantially all of the assets of the Company and SpringBig, Inc. …”see in full comparison
Full comparison: every changed paragraph (10)
The Company’s ability to continue as a going concern is dependent upon its ability to identify and consummate a strategic business combination or other transaction. If the Company is unable to consummate such a transaction, the Company will likely liquidate and wind up its affairs.
On January 23, 2024, the Company entered into a securities purchase agreement (the “Notes Purchase Agreement”) with Shalcor Management, Inc. and other purchasers (the “Investors”), pursuant to which the Company issued $6.4 million aggregate principal amount of Senior Secured Convertible Notes and $1.6 million aggregate principal amount of Senior Secured Term Notes (collectively, the “Notes”). SpringBig, Inc. guaranteed the Company’s obligations under the Notes, and the Investors were granted a security interest in substantially all of the assets of the Company and SpringBig, Inc. On November 11, 2024, the terms of the Notes were amended, including extension of the maturity date to January 23, 2027 and increases to the applicable interest rates.
On February 6, 2026, the Company notified the holders of the Notes that it was not in compliance with the minimum cash balance covenant under the applicable note agreements for the month of January 2026. On April 21, 2026, the Company received a Notice of Default, Reservation of Rights and Notice of Termination from the noteholders. On May 15, 2026, the noteholders began exercising their remedies under the note agreements, including exercising control over SpringBig, Inc. and removing the Company’s then-serving Chief Executive Officer.
On July 13, 2026, the Company consummated the transactions contemplated by a Reorganization Agreement (the “Reorganization Agreement”) among the Company, SpringBig, Inc., Shalcor Management Inc. (as collateral agent and administrative agent), Lightbank II, L.P., and LS Round II, LLC (the “Transferee”). Pursuant to the Reorganization Agreement, the Transferee received all issued and outstanding equity interests in SpringBig, Inc., the subsidiary through which the Company conducted its business operations, pursuant to Section 272(b) of the Delaware General Corporation Law. As a result of the Reorganization Transaction, the Company was fully released from all of its obligations under the Notes, representing approximately $12.5 million of principal and accrued interest.
Following the consummation of the Reorganization Transaction, the Company no longer owns the operating business previously conducted through SpringBig, Inc. The Company’s remaining assets consist primarily of approximately $172 thousand in cash consideration received at closing, together with any remaining assets and liabilities not transferred pursuant to the Reorganization Agreement. The Company intends to pursue a strategic business combination. If the Company is unable to consummate such a transaction, however, the Company will likely liquidate and wind up its affairs. There can be no assurance that the Company will successfully identify, negotiate, or complete any such transaction on favorable terms, or at all. Even if the Company identifies a potential transaction, it may lack the financial resources, operational infrastructure, or management capacity to consummate it. The Company’s limited cash resources may make it difficult to attract potential business combination partners or to negotiate favorable terms.
The Company believes that its former Chief Executive Officer, Jaret Christopher, is not entitled to the issuance of shares of the Company’s common stock pursuant to agreements entered into with the Company. If the Company’s position is ultimately determined to be incorrect, the issuance of such shares would materially increase the number of the Company’s issued and outstanding shares of common stock, which could negatively impact the Company’s stock price.
On April 1, 2026, the Company entered into an Executive Employment Agreement and a related Restricted Stock Award Agreement with its former Chief Executive Officer, Jaret Christopher. The agreements established, among other things, Mr. Christopher’s compensation, severance benefits and equity awards, including the grant of 12,891,251 shares of restricted common stock. On May 28, 2026, the Company and Mr. Christopher entered into a Separation Agreement providing for two months of severance and a one-time cash payment of $50,000 to Mr. Christopher.
The Company has not issued any shares pursuant to the Restricted Stock Award Agreement with Mr. Christopher. The Company believes that Mr. Christopher is not entitled to the issuance of such shares and has not reflected such shares in its accompanying condensed consolidated financial statements or in the number of issued and outstanding shares of common stock. If the Company’s position is ultimately determined to be incorrect, the issuance of such shares would materially increase the number of the Company’s issued and outstanding shares of common stock, which could negatively impact the Company’s stock price.
Our obligations to
the holders of the Notes are secured by a security interest in substantially all of our assets, so if we default on those obligations,
the noteholders could foreclose on, liquidate and/or take possession of our assets and/or accelerate the payment of principal. We have
received a notice of default related to the Notes. To date, the noteholders have not enforced these rights under the Notes. If they were
to enforce, we could be forced to curtail, or even to cease, our operations.
On January 23, 2024, the Company entered into that certain securities
purchase agreement (the “Notes Purchase Agreement”), dated January 23, 2024, between the Company and Shalcor Management, Inc.
and other Purchasers (the “Investors”), pursuant to which the Company agreed to sell a total of $5.4 million of 8% Senior
Secured Convertible Notes due 2026. Simultaneously, SpringBig, Inc. entered into a guaranty agreement to guarantee the Company’s
obligations under the 2024 Secured Convertible Notes and the Company and SpringBig, Inc. entered into a security agreement, pursuant to
which the Investors were granted a security interest in all the assets of the Company and SpringBig, Inc. to secure repayment of amounts
due under the 2024 Secured Convertible Notes. On April 21, 2026, the Company received a Notice of Default, Reservation of Rights and Notice
of Termination in relation to the Notes and related documents. The Notice constitutes a notice of default under Section 2.1(c) of each
of the Notes. The Notice advises, and the Notes provide, that upon the occurrence of an event of default, the holders of the Notes may
exercise a variety of remedies afforded to them under the Notes or by applicable law or equity, including without limitation, acceleration
of the due date of the unpaid principal balance of the Notes and all accrued but unpaid interest thereon. Further, according to the Notes,
the holders of the Notes may, during an event of default and in accordance with applicable law, foreclose on the Company’s assets
and its security interest in the Company’s property and exercise any other remedies provided therein. The holders of the Notes may:
(i) accelerate or demand any payment of principal; (ii) foreclose on all or any part of any lien or security interest created by any of
the Note documents; or (iii) exercise any other right or remedy that may be available to them. As a result, if the Investors seek to enforce
their rights under (i), (ii), or (iii), the Investors could foreclose on its security interests and liquidate or take possession of some
or all of the assets of the Company, SpringBig, Inc. and its subsidiaries, which would harm our business, financial condition and results
of operations and could require us to curtail, or even to cease our operations. The Company has no assurance that the holders of the Notes
will not seek to enforce their rights in the future.
Management's Discussion & Analysis (MD&A)
New heading “As described under “Recent Developments” below and in Note 16 to the condensed consolidated financial statements included in Item 1 of this report, subsequent to June 30, 2026, the Company consummated a reorganization transaction pursuant to which it transferred all of its equity interests in SpringBig, Inc. and no longer owns or operates the business previously operated by SpringBig, Inc. described below. Going forward, the Company will no longer include such business in its operations and financial results.”
New heading “Recent Developments”
New heading “Comparison of Six Months Ended June 30, 2026, compared to Six Months Ended June 30, 2025”
Largest changes
“As described under “Recent Developments” below and in Note 16 to the condensed consolidated financial statements included in Item 1 of this report, subsequent to June 30, 2026, the Company consummated a reorganization transaction pursuant to which it transferred all of its equity interests in SpringBig, Inc. and no longer owns or operates the business previously operated by SpringBig, Inc. described below. Going forward, the Company will no longer include such business in its operations and financial results.”see in full comparison
As ofsee in full comparisonMarchJune31,30, 2026,theCompanywe classified all outstanding debt as current as such obligationsarewere contractually due within twelve months. As noted above in Note2116 to our condensed consolidated financial statements,the Companywe also received a Notice of Default, Reservation of Rights and Notice of Termination in relation to the Notes and related documents. Interest on the Notes has been calculated at the applicable default rate in accordance with the terms of the Notes. The accrued interest balance as of June 30, 2026 includes the retrospective application of the default rate for the applicable periods.
“Interest Expense. Interest expense increased to approximately $2.3 million from approximately $0.3 million during the prior-year period. The increase was primarily attributable to accrued default interest and non-cash interest associated with the Company’s outstanding secured convertible and term notes.”see in full comparison
“Interest Expense. Interest expense increased to approximately $2.7 million from approximately $0.6 million during the prior-year period, primarily reflecting accrued default interest and additional non-cash interest recognized on the Company’s outstanding secured notes.”see in full comparison
“Comparison of Six Months Ended June 30, 2026, compared to Six Months Ended June 30, 2025”see in full comparison
“To the extent existing cash and cash from operations are not sufficient to fund future activities, we may need to raise additional funds. We may seek to raise additional funds through equity, equity-linked or debt financings. If we raise additional funds by incurring indebtedness, such indebtedness may have rights that are senior to holders of our equity securities and could contain covenants that restrict operations. Any additional equity financing may be dilutive to stockholders. …”see in full comparison
Full comparison: every changed paragraph (83)
As described under “Recent Developments” below and in Note 16 to the condensed consolidated financial statements included in Item 1 of this report, subsequent to June 30, 2026, the Company consummated a reorganization transaction pursuant to which it transferred all of its equity interests in SpringBig, Inc. and no longer owns or operates the business previously operated by SpringBig, Inc. described below. Going forward, the Company will no longer include such business in its operations and financial results.
SpringBig
is a market-leading software platform providing customer loyalty and marketing automation solutions to retailers and brands. We have
leveraged our deep expertise in loyalty marketing to develop solutions that address the key challenges faced by retailers and brands,
including those in the cannabisregulated industry.industries. Stringent, complex, and rapidly evolving regulations have resulted in restricted access to
traditional marketing and advertising channels for cannabisregulated retailers and brands, preventing them from utilizing many traditional methods
for effectively accessing and engaging with consumers. In addition, the lack of industry-specific data and market intelligence solutions
limit cannabisregulated retailers’ and brands’ ability to efficiently market their products, thereby hindering their growth. Our platform
enables our clients to increase brand awareness, engage customers, improve retention, and access actionable consumer feedback data to
improve marketing. Our clients can use our loyalty marketing, digital communications, and text/email/push marketing solutions to drive
new customer acquisition, customer spend and retail foot traffic. Our proven B2B2C software platform creates powerful network effects
between retailers and brands and provides an ability for both to connect directly with consumers. As retailers and brand scale, a virtuous
cycle amplifies growth, ultimately expanding SpringBig’s reach and strengthening our value proposition.
On
June 14, 2022, SpringBig Holdings, Inc., a Delaware corporation (formerly known as Tuatara Capital Acquisition Corporation (“Tuatara”)), consummated
a business combination of Tuatara and LegacySpringBig, SpringBig,Inc., a Delaware corporation. Pursuant to the merger agreement, prior to the closing
of the business combination, Tuatara changed its jurisdiction of incorporation by deregistering as a Cayman Islands exempted company
and continuing and domesticating as a corporation incorporated under the laws of the State of Delaware. Prior to the closing date, and
in connection with the Closing,closing, Tuatara changed its name to SpringBig Holdings, Inc.
As
a consequence of the business combination, LegacySpringBig, SpringBigInc. became the successor to an SEC-registered and Nasdaq-listed company, which
required us to implement procedures and processes to address public company regulatory requirements and customary practices. On September
5, 2023, SpringBigwe Holdings, Inc. waswere delisted from the Nasdaq Capital Market and itsour common stock is now quoted for trading on the OTCQB®
Venture Market.
Recent Developments
On July 13, 2026, we consummated a reorganization transaction (the “Reorganization”) pursuant to the Reorganization Agreement, dated July 13, 2026 (the “Reorganization Agreement”), among us, SpringBig, Inc, Shalcor Management Inc., as collateral agent and administrative agent for the holders of our 2024 Secured Convertible Notes and 2024 Secured Term Notes (collectively, the “Notes”), Lightbank II, L.P. and LS Round II, LLC. As part of the Reorganization, we transferred all of our equity interests in SpringBig, Inc. to LS Round II, LLC pursuant to Section 272(b) of the Delaware General Corporation Law, in lieu of the exercise of other secured creditor remedies under the Company’s Notes. In connection with the transaction, we were released from all of our obligations under the Notes, representing approximately $12.5 million of principal and accrued interest, and received cash consideration of approximately $172 thousand at closing. As a result, we no longer own the operating business previously conducted through SpringBig, Inc. We remain a reporting company under the Exchange Act and are evaluating strategic alternatives. See Note 16 to the condensed consolidated financial statements for additional information.
On May 28, 2026, we entered into a Separation Agreement with Jaret Christopher, pursuant to which Mr. Christopher ceased to serve as the Chief Executive Officer and a director of the Company.
On July 10, 2026, our Board of Directors appointed Andrew Jay Glashow as a director and as Chief Executive Officer of the Company, effective immediately, to lead our efforts to identify and consummate a strategic business combination. If we are unable to consummate such a transaction, we will likely liquidate and wind up our affairs in accordance with Delaware law.
We
monitor the following key financial and operational metrics to evaluate our business, measure our performance, identify trends affecting
our business, formulate business plans, and make strategic decisions. The following is our analysis for the three and six months ended March
31,June 30, 2026, and 2025, in thousands:
The
Company’sOur revenue growth is generally achieved through a mix of new clients, clients upgrading their subscriptions (as new clients
will frequently enter into a relatively low level of subscription (with respect to the size of such client’s database and the number
of their customers on such database) and/or the number of pre-determined communication credits), which frequently occurs shortly after
such a client initially becomes a client, and the excess use element of revenues. “Excess use” revenues are revenues derived
from amounts charged to clients for exceeding the pre-determined credit volume set forth in the applicable client’s subscription
agreement. Given this combination, and particularly the tendency for clients to upgrade soon after becoming a client, thewe Companydo does
not actively monitor revenue split between new and existing clients, preferring to use the split between subscription and excess use
in combination with net dollar retention and the number of clients as key metrics, as described below.
The cannabis industry continues to evolve as additional jurisdictions consider or implement legalization of cannabis for medical and/or adult use and the applicable regulatory environment continues to develop. Historically, these developments, as well as the growth and maturation of legal cannabis markets, had a significant impact on our business, customers and operating results.
Following the Company’s recent reorganization, however, the Company is no longer engaged in the cannabis-focused operations that historically comprised its principal business. Accordingly, developments in the cannabis industry and changes in cannabis laws and regulations are not expected to have the same direct impact on the Company’s future operations and financial results as they have historically.
The Company is currently focused on evaluating strategic opportunities, including a potential merger or other strategic transaction. As a result, the Company’s future business and financial results will depend primarily on the outcome of these strategic efforts and, following the completion of any transaction, the business, industry and regulatory environment of the resulting company.
We
believe that we will have significant opportunities for growth as more jurisdictions legalize cannabis for medical and/or adult use and
the regulatory environment continues to develop. We intend to explore new expansion opportunities as additional jurisdictions legalize
cannabis for medical or adult use and leverage our existing business model to enter new markets. We believe our understanding of the
space coupled with our experienced sales force will enable us to quickly enter and execute in new markets and capture new business, which
we sustain via our best-in-class product offerings. Further, a change in U.S. federal regulations could result in our ability to engage
in additional outlets, including the fintech, payments and e-commerce space.
We
expect competition to intensify in the future as the regulatory regime for cannabis becomes more settled and the legal market for cannabis
becomes more accepted, which may encourage new participants to enter the market, including established companies with substantially greater
financial, technical and other resources than existing market participants.
We
believe that maintaining and enhancing our brand identity and our reputation is critical to maintaining and growing our relationships
with customers and to our ability to attract new customers.
We
believe our platform’s scale and strong customer loyalty market themselves; however, we implement a variety of marketing efforts
to attract the remaining retailers and brands not yet on our platform. Marketing efforts include multiple strategies designed to attract
and retain both retail and brands subscribers.
Negative
publicity, whether or not justified, relating to events or activities attributed to us, our employees, customers or others associated
with any of these parties, may tarnish our reputation and reduce the value of our brand. Given our high visibility, we may be more susceptible
to the risk of negative publicity. Damage to our reputation and loss of brand equity may reduce demand for our platform and have an adverse
effect on our business, operating results and financial condition. Moreover, any attempts to rebuild our reputation and restore the value
of our brand may be costly and time consuming, and such efforts may not ultimately be successful.
We
also believe that the importance of our brand recognition and reputation will continue to increase as competition in our market continues
to develop. If our brand promotion activities are not successful, our operating results and growth may be adversely impacted.
Technology
and software development costs consist of salaries and benefits for employees, including engineering and technical teams who are responsible
for building new products, as well as maintaining and improving existing products. We evaluate whether to capitalize certain costs associated
with technology and software development in accordance with ASC 350-40, Intangibles – Goodwill and Other – Internal Use
Software, but these are limited in quantum as we are constantly and regularly making enhancements to our technology platform and
do not consider them appropriate to be capitalized. To the limited extent any costs are capitalized, the costs are generally amortized
over a three-year period commencing on the date that the specific software product is placed in service. We believe that continued investment
in our platform is important for our growth.
Comparison
of Three Months Ended MarchJune 31,30, 2026, compared to Three Months Ended MarchJune 31,30, 2025
nm-not meaningful
Revenues. Revenues
decreased $0.1 million for the three months ended March 31, 2026, representing a 1% year-on-year reduction compared with the same period
in 2025. Our subscription revenue was $4.8 million for the three months ended March 31, 2026, compared with $4.8 million in the same
quarter in 2025. Subscription revenue as a proportion of total revenue was 88% for the three
months ended March 31, 2026, compared with 87% in the same period last year. Excess use revenue declined year-over-year, driven by softer
macro conditions in the cannabis sector and increased client budget discipline, resulting in messaging activity being constrained within
subscription volume limits. Excess use revenue represented 7% of total revenue for the three months ended March 31, 2026, compared with
9% in the same period last year.
Our net revenue retention
rate was 86% for the twelve months ended March 31, 2026, consistent with 86% for the twelve months ended March 31, 2025. Performance reflects
continued macroeconomic pressure in the cannabis market and financial constraints among certain retail clients, which in some cases resulted
in the suspension or termination of access to our platform.
Gross Profit. Gross profit decreased by
$0.7 million to $3.6 million for the three months ended March 31, 2026, from $4.3 million for the three months ended March 31, 2025, representing
a 17% year-over-year decline. The decrease was primarily attributable to one-time higher messaging costs associated with the amendment
with our largest vendor. The revised minimum monthly commitment establishes a more sustainable cost structure on a go-forward basis.
OperatingRevenues. Expenses.
OperatingNet expensesrevenue decreased byto $1.0approximately million,$4.4 or 21%,million for the three months ended MarchJune 31,30, 2026,2026 comparedfrom withapproximately $5.8 million for the samecomparable periodprior-year inperiod, 2025.a decrease of approximately 24%.
The decline was primarily attributable to lower revenue generated from existing customers resulting from customer attrition and reduced messaging activity from certain enterprise customers, partially offset by revenue generated from new customer additions.
Gross Profit. Cost of revenue increased modestly to approximately $1.6 million compared to approximately $1.5 million in the prior-year period despite the decline in revenue. Gross profit decreased to approximately $2.9 million from approximately $4.3 million, while gross margin declined to approximately 65% from approximately 74%.
The decline in gross margin primarily reflects lower revenue levels while certain messaging and platform costs remained relatively fixed, resulting in a higher cost of revenue as a percentage of sales.
Selling, servicing and marketing expenses decreased
by $0.4 million, or 37%, for the quarter ended March 31, 2026, compared to the same period in 2025, primarily due to organizational restructuring
and improved operating efficiency within the group.
TechnologyOperating andExpenses. softwareOperating development
expenses decreased by $0.1$2.2 million, or 3%,43%, for the quarterthree months ended MarchJune 31,30, 2026, compared towith the same period in 2025.
Selling, servicing and marketing expense decreased approximately 31% to $0.8 million from $1.1 million in the prior-year period, primarily due to lower personnel-related costs and reduced discretionary spending.
Technology and software development expense decreased approximately 21% to $1.0 million from $1.2 million, primarily reflecting lower personnel costs and continued expense management initiatives.
General and administrative expense decreased approximately 58% to $1.1 million from $2.7 million in the prior-year period. The decrease primarily reflects lower compensation expense, reduced professional fees and other cost reduction initiatives implemented during the past year.
As a result of these reductions, total operating expenses declined approximately 43% compared to the prior-year period. Loss from operations improved significantly to approximately $19 thousand compared to an operating loss of approximately $726 thousand in the prior-year quarter.
Interest Expense. Interest expense increased to approximately $2.3 million from approximately $0.3 million during the prior-year period. The increase was primarily attributable to accrued default interest and non-cash interest associated with the Company’s outstanding secured convertible and term notes.
Change in fair value of warrants. The Company also recognized an immaterial gain related to changes in the fair value of warrant liabilities.
Comparison of Six Months Ended June 30, 2026, compared to Six Months Ended June 30, 2025
The following tables set forth our results of operations for the periods indicated (in thousands):
nm-not meaningful
Revenues. Net revenue decreased approximately 13% to $9.9 million for the six months ended June 30, 2026 from approximately $11.4 million during the comparable prior-year period.
The decrease primarily reflects lower customer usage and customer attrition, partially offset by revenue from new customer relationships.
Gross Profit. Cost of revenue increased to approximately $3.4 million from approximately $2.7 million, while gross profit declined to approximately $6.4 million from approximately $8.6 million.
Gross margin declined from approximately 76% during the prior-year period to approximately 65% during the current-year period primarily due to lower revenue combined with messaging costs representing a larger percentage of revenue.
General and administrative
expenses decreased by $0.6 million, or 24%, for the quarter ended March 31, 2026, compared to the same period in 2025. The decrease was
driven by improved operating efficiency under new management, organizational restructuring efforts, and enhanced expense discipline.
InterestOperating Expense.
InterestExpenses. expenseOperating wasexpenses $0.4decreased millionby $3.2 million, or 33%, for the quartersix months ended MarchJune 31,30, 2026, compared with $0.3 million for the quartersame endedperiod March 31,in 2025.
Selling, servicing and marketing expense decreased approximately 34% to $1.5 million.
Technology and software development expense decreased approximately 12% to $2.2 million.
General and administrative expense declined approximately 42% to approximately $2.9 million, reflecting lower personnel costs, reduced professional fees and continued cost control efforts.
Overall, total operating expenses decreased approximately 33% to $6.6 million from $9.8 million.
Loss from operations improved substantially to approximately $0.2 million compared to approximately $1.2 million during the prior-year period.
Interest Expense. Interest expense increased to approximately $2.7 million from approximately $0.6 million during the prior-year period, primarily reflecting accrued default interest and additional non-cash interest recognized on the Company’s outstanding secured notes.
Change in fair value of warrants. The Company also recognized an immaterial gain related to changes in the fair value of warrant liabilities.
Change in fair value
of warrants. The liability relating to warrants issued by SpringBig is included on the balance sheet at the fair value prevailing
at the end of the accounting period and any change in value is reported in the income statement. At March 31, 2026, the market value
of the public warrants, which are quoted for trading on the OTC Pink Market, was $0.0010 per warrant which was the same as the quoted
price at December 31, 2025. Therefore, there is no expense or credit in our income statement for the three months ended March 31, 2026.
We
have incurred net losses since inception, and experienced negative
cash flows from operations. Prior to the business combination, we financed our operations and capital expenditures primarily through the
private sales of equity securities and revenue. The net losses since the business combination have been financed through the capital received
because of the business combination, a public equity offering in May 2023, short-term cash advances as described below, and the issuance
of $8.0 million Termterm Notesnotes and Convertibleconvertible Notesnotes in January 2024. OurFollowing primarythe usesReorganization, ofwe cashno longer own the operating business previously conducted through SpringBig, Inc. We intend to pursue a strategic business combination, but if unable to do so, will likely liquidate and wind up our affairs in theaccordance short-termwith areDelaware to fund our operations
as we continue to grow our business.law.
On January 23, 2024, the
Companywe raised $6.4 million through the issuance of 2024 Secured Convertible Notes and $1.6 million through the issuance of 2024 Secured Term Notes. The
net cash proceeds, after transaction expenses, were $7.2 million.
The 2024 Secured Convertible Notes
accrue accrued interest which iswas added to the outstanding principal balance semi-annually. The 2024 Secured Convertible Notes arewere convertible into common stock at a conversion
price of $0.15 per share at the holder’s option any time up to the day prior to maturity, initially in January 2026. The 2024 Secured Term
Notes, initially due at issuance in January 2026, accrueaccrued interest payable in cash semi-annually. The 2024 Convertible Notes and 2024 Term
Notes rankranked pari passu and arewere secured by substantially all the assets of theour Company.assets.
On November 11, 2024, the
Companywe amended the terms of the 2024 Secured Term Notes and 2024 Secured Convertible Notes including extending the maturity date to January
23, 2027, amending the interest rates and adjusting the requirement for the Companyus to maintain a minimum cash balance of at least $1
million with the provision now applicable only at the end of any calendar month commencing on or after February 1, 2025.
The interest rates on the
2024 Secured Term Notes and 2024 Secured Convertible Notes increaseincreased to 17% and 13%, respectively, with effect from the date of amendment,
with the interest rates then reducing by 0.75% for each three-month period that thewe Company reportsreported an Adjusted EBITDA exceeding $900,000,
starting with the three months ended March 31, 2025, subject to a maximum reduction to 14% and 10%, respectively. In addition, a sum of
$64,000 iswas payable to the holders of the 12% Secured Term Notes in January 2025, and the principal amount of the 8% Secured Convertible
Notes was increased by $266,000 with effect from the date of the amendment.
TheWe Company maycould prepay any
portion of the 2024 Secured Term Notes, without penalty, at any time after February 1, 2025.
SBIG insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-04-20 | Ellis Larry C |
Grant/award | 1,193,623 | — | — |
Well-known investors holding SBIG (13F)
None of the 59 investors we track reported a position in their latest 13F.