SBIG 10-Q
SpringBig Holdings, Inc. (SBIG)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarter ended
OR
For the transition period from to
Commission file number
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (I.R.S Employer Identification No.) |
| (Address of principal executive offices) | (zip code) |
Registrant’s telephone number, including
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Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant:
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
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for the past 90 days.
Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |
| ☒ | Smaller reporting company | |||
| Emerging growth company |
If an emerging growth company, indicate by check
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is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No
As of May 12, 2025, there were
SPRINGBIG, INC
TABLE OF CONTENTS
i
Part I – Financial Information
Forward Looking Statements
This Quarterly Report on Form 10-Q contains forward looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q are forward looking statements. Forward looking statements include our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “can have,” “likely” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future cash flows, operating or financial performance or other events. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry and Company, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, readers are cautioned that any such forward looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Although we believe that the expectations reflected in such forward-looking statements are reasonable as of the date made, results may prove to be materially different. Unless otherwise required by law, we disclaim any obligation to update our view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made in this report.
Factors that could cause our actual results and our financial condition to differ materially from those indicated in our forward-looking statements include, but are not limited to, the following:
| ● | trends in the cannabis industry and SpringBig’s market size, including with respect to the potential total addressable market in the industry; |
| ● | SpringBig’s growth prospects; |
| ● | new product and service offerings SpringBig may introduce in the future; |
| ● | the price of SpringBig’s securities, including volatility resulting from changes in the competitive and highly regulated industry in which SpringBig operates and plans to operate, variations in performance across competitors, changes in laws and regulations affecting SpringBig’s business and changes in the combined capital structure; |
| ● | the ability to implement business plans, forecasts, and other expectations, and identify and realize additional opportunities; and |
| ● | other risks and uncertainties indicated from time to time in filings made with the Securities and Exchange Commission (the “SEC”). |
These risks are not exhaustive. New risk factors emerge from time to time, and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Should one or more of these risks or uncertainties materialize or should any of the assumptions made by the management of SpringBig prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Additional information concerning these and other factors that may impact the operations and projections discussed herein can be found in the section entitled “Risk Factors” and in our periodic filings with the SEC. Our SEC filings are available publicly on the SEC’s website at www.sec.gov.
You should read this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results, levels of activity and performance as well as other events and circumstances may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
1
Item 1. Financial Statements
SPRINGBIG HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands except share data)
| March 31, 2025 | December 31, 2024 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net of allowance of $ | ||||||||
| Contract assets | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Right of use asset | ||||||||
| Property and equipment, net | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses and other current liabilities | ||||||||
| Deferred payroll tax credits | ||||||||
| Operating lease liability, current | ||||||||
| Total current liabilities | ||||||||
| Long-term debt, non-current | ||||||||
| Operating lease liability, non-current | ||||||||
| Warant liabilities | ||||||||
| Total liabilities | ||||||||
| Stockholders’ Deficit | ||||||||
| Common stock par value $ | ||||||||
| Additional paid-in-capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements
2
SPRINGBIG HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except share and per share data)
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Net revenues | $ | $ | ||||||
| Cost of revenues | ||||||||
| Gross profit | ||||||||
| Expenses | ||||||||
| Selling, servicing and marketing | ||||||||
| Technology and software development | ||||||||
| General and administrative | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Interest income | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Gain on note repurchase | ||||||||
| Change in fair value of warrants | ( | ) | ||||||
| ( | ) | |||||||
| Income (loss) before income taxes | $ | ( | ) | $ | ||||
| Income taxes expense | ||||||||
| Net income (loss) | $ | ( | ) | $ | ||||
| Net income (loss) per common share: | ||||||||
| Basic | $ | ( | ) | $ | ||||
| Diluted | $ | ( | ) | $ | ||||
| Weighted-average common shares outstanding: | ||||||||
| Basic | ||||||||
| Diluted | ||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements
3
SPRINGBIG HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER’S DEFICIT
(UNAUDITED)
Three Months Ended March 31, 2025
| Common Stock Shares | Amount | Additional Paid-in Capital | Accumulated Deficit | Total | ||||||||||||||||
| Balance at December 31, 2024 | $ | | $ | $ | ( | ) | $ | ( | ) | |||||||||||
| Stock-based compensation | - | |||||||||||||||||||
| Restricted stock units vesting | ||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
Three Months Ended March 31, 2024
| Common Stock Shares | Amount | Additional Paid-in Capital | Accumulated Deficit | Total | ||||||||||||||||
| Balance at December 31, 2023 | $ | | $ | $ | ( | ) | $ | ( | ) | |||||||||||
| Stock-based compensation | - | |||||||||||||||||||
| Issue of common stock ^ | ||||||||||||||||||||
| Restricted stock units vesting | - | |||||||||||||||||||
| Net income | - | |||||||||||||||||||
| Balance at March 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| ^ |
The accompanying notes are an integral part of these condensed consolidated financial statements
4
SPRINGBIG HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities | ||||||||
| Net income (loss) | $ | ( | ) | $ | ||||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||||
| Gain on note repurchase | ( | ) | ||||||
| Non-cash interest expense | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of debt financing costs | ||||||||
| Stock-based compensation expense | ||||||||
| Credit loss expense | ||||||||
| Amortization of operating lease right of use assets | ||||||||
| Change in fair value of warrants | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Contract assets | ||||||||
| Accounts payable and other liabilities | ( | ) | ||||||
| Operating lease liabilities | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities | ||||||||
| Purchases of property and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from issuance of convertible notes | ||||||||
| Repayment of convertible notes | ( | ) | ||||||
| Proceeds from the issuance of term notes | ||||||||
| Repayment of short-term cash advances | ( | ) | ||||||
| Repayment of related party payable | ( | ) | ||||||
| Cost of convertible and term note issuance | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Net increase (decrease) in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents, at beginning of the period | ||||||||
| Cash and cash equivalents, at end of the period | $ | $ | ||||||
| Supplemental cash flows disclosures | ||||||||
| Interest paid | $ | $ | ||||||
| Common stock issued for services rendered relating to debt financing | $ | $ | ||||||
| Amount added to principal for non-cash interest on Convertible Notes | $ | $ | ||||||
| Accrued costs of debt issuance | $ | $ | ||||||
| Obtaining a right-of-use asset in exchange for a lease liability | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements
5
SPRINGBIG HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 – DESCRIPTION OF BUSINESS
SpringBig Holdings, Inc. and its wholly owned subsidiaries (the “Company,” “we,” “us,”, “our”, or “SpringBig”) developed a software platform that provides marketing and customer engagement services to cannabis dispensaries and brands throughout the United States and Canada. The Company allows merchants to provide loyalty plans and rewards directly to consumers through an internet portal and mobile applications. Our operational headquarters are in Boca Raton, Florida, with additional offices located in the United States and Canada.
The Company has
On June 14, 2022 (the “Closing Date”), SpringBig Holdings, Inc. (formerly known as Tuatara Capital Acquisition Corporation (“Tuatara” or “TCAC”)), consummated the business combination of SpringBig, Inc. (“Legacy SpringBig”) and HighJump Merger Sub, Inc., the wholly-owned subsidiary of Tuatara, pursuant to the Amended and Restated Agreement of Plan Merger, dated as of April 14, 2022, as amended, by and among Tuatara, HighJump Merger Sub, Inc. and Legacy SpringBig. Prior to the closing of the business combination (the “Closing”), 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. In connection with the Closing, the registrant changed its name from Tuatara Capital Acquisition Corporation to “SpringBig Holdings, Inc.” SpringBig will continue the existing business operations of Legacy SpringBig as a publicly traded company.
Beginning June 15, 2022, the ticker symbols for the Company’s common stock and publicly traded warrants were changed to “SBIG” and “SBIGW,” respectively, and commenced trading on The Nasdaq Capital Market.
On September 1, 2023, the Board of Directors of SpringBig Holdings, Inc. determined that it would not be in the best interest of the Company or its shareholders to meet the continued listing requirements of the Nasdaq Capital Market, and the Company notified the Nasdaq Stock Market LLC (“Nasdaq”) that it was withdrawing its appeal of the Nasdaq Listings Qualification staff’s delist determination dated March 7, 2023, for the Company’s failure to meet the market value of listed securities requirement in the Nasdaq Listing Rules.
The Company’s common stock was quoted for trading on the OTCQX® Best Market from September 6, 2023, to March 31, 2025, and is now quoted for trading on the OTCQB® Venture Market and its public warrants are quoted for trading on the OTC Pink Market under their current trading symbols “SBIG” and “SBIGW,” respectively. The Company remains a reporting company under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation and Basis of Presentation
The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
6
The unaudited condensed consolidated financial statements have been prepared in conformity with the rules and regulations of the SEC for Quarterly Reports on Form 10-Q and therefore do not include certain information, accounting policies, and footnote disclosure information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with generally accepted accounting principles. However, all adjustments (consisting of normal recurring accruals), which, in the opinion of management, are necessary for a fair presentation of the financial statements, have been included. Operating results for the three months ended March 31, 2025, are not necessarily indicative of the results that may be expected for future periods or for the year ending December 31, 2025.
The financial data presented herein should be read in conjunction with the audited consolidated financial statements and accompanying notes as of and for the year ended December 31, 2024, as reported in the 2024 Annual Report on Form 10-K.
Going Concern, Liquidity and Management’s Plans
Historically, the Company has
incurred losses, which have resulted in an accumulated deficit of approximately $
The Company’s ability to continue as a going concern is dependent on its ability to meet its liquidity needs through a combination of factors, including, but not limited to, cash and cash equivalents, increase in revenue through increased usage by customers and new customers and strategic capital raises. The ultimate success of these plans is not guaranteed.
Based on management projections and cash on hand, we estimate that our liquidity and cash resources are sufficient for our current and projected financial needs for the next twelve months, at a minimum.
The accompanying condensed consolidated financial statements are prepared on a going concern basis and do not include any adjustments that might result from uncertainty about the Company’s ability to continue as a going concern.
Foreign Currency
The Company translates the condensed consolidated financial statements of our foreign subsidiaries, which have a functional currency in the respective country’s local currency, to U.S. dollars using month-end exchange rates for assets and liabilities and actual exchange rates for revenue, costs and expenses on the date of the transaction.
Use of Estimates
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 the Company have used best estimates based on facts and circumstances available to it 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. The Company reviews these estimates and assumptions periodically and reflects on the effects of revisions in the period that are determined to be necessary. The Company believes that the assumptions and estimates associated with income taxes, equity-based compensation (including issuance of common stock for services rendered), warrants, imputed interest on operating lease liabilities, using the U.S. treasuries rate for a similar term prevailing at the lease commencement date as the benchmark rate and adding an appropriate risk margin, valuation of the 2024 Secured Term Notes and 2024 Secured Convertible Notes carrying value regarding debt modification or extinguishment, and allowance for credit losses have the greatest potential impact on our consolidated financial statements. Therefore, the Company consider the policies related to these financial areas to be critical accounting policies.
7
Future events and their effects cannot be predicted with certainty; accordingly, accounting estimates require the exercise of judgment. Accounting estimates used in the preparation of these financial statements change as new events occur, as more experience is acquired, as additional information is obtained, and as the operating environment changes. Actual results may differ materially from these estimates.
Segments
The Company manages its business
as a single operating segment. The chief operating decision maker (“CODM”) reviews financial information presented for the
purposes of allocating resources and evaluating financial performance at an entity level. The Company’s Chief Executive Officer
(“CEO”) is the CODM, and the Company has no segment managers who are held accountable by the CODM for operations and operating
results. The products and services across the Company are similar in nature, distributed in a comparable manner and have customers with
common characteristics. We determined that we have
Fair Value of Financial Instruments
Our financial assets, which include cash equivalents, current financial assets and our current financial liabilities have fair values that approximate their carrying value due to their short-term maturities.
Concentrations of Credit Risk
Financial instruments that potentially subject us to concentration of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company deposits cash and cash equivalents with high credit-quality financial institutions. Such deposits may be in excess of federally insured limits. To date, the Company has not experienced any losses on our cash and cash equivalents. The Company performs periodic evaluations of the relative credit standing of the financial institutions.
The Company performs ongoing credit evaluations of its customers’ financial condition and require no collateral from customers. The Company maintains a credit loss reserve for expected credit losses based upon the expected collectability of accounts receivable balances.
The Company had two customers representing
At March 31, 2025, the Company
had two customers representing
The Company had one vendor
representing
The Company had three vendors
representing
Deferred Financing Costs
On January 23, 2024, the
Company issued $
8
Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of three months or less, when acquired, to be cash equivalents. There are no cash equivalents as of March 31, 2025, and December 31, 2024.
As of March 31, 2025, the
Company exceeded the federally insured limits of $
Accounts Receivable, Net & Allowance for Credit Losses
Accounts receivable include billed and unbilled receivables, net of allowance for credit losses. Accounts receivable are recorded at invoiced amounts and do not bear interest. Unbilled receivables relate to revenue earned in advance of invoicing per contractual terms with customers. The allowance for credit losses is based on the Company’s assessment of the collectability of accounts receivable considering various factors, including the age of each outstanding invoice, the collection history of each customer, historical write-off experience, current economic conditions, and reasonable and supportable forecasts of future economic conditions over the life of the receivable. The Company assesses collectability by reviewing accounts receivable on an aggregate basis when similar characteristics exist and on an individual basis when specific customers with collectability issues are identified. Accounts receivable deemed uncollectible are charged against the allowance for credit losses when identified.
Reclassifications
Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on previously reported consolidated balance sheet, statements of operations, changes in stockholders' deficit and cash flows.
NOTE 3 – ACCOUNTS RECEIVABLE
Accounts receivable, net consisted of the following (in thousands):
| March 31, 2025 | December 31, 2024 | |||||||
| (unaudited) | ||||||||
| Accounts receivable | $ | $ | ||||||
| Unbilled receivables | ||||||||
| Total receivables | ||||||||
| Less allowance for credit losses | ( | ) | ( | ) | ||||
| Accounts receivable, net | $ | $ | | |||||
Credit loss expense was $
9
The following table details the activity related to the Company’s allowance for credit losses for the three months ended March 31, 2025 (in thousands).
| Allowance for credit losses | ||||
| Outstanding balance, December 31, 2024 | $ | | ||
| Current-period provision (release) for expected credit losses | ||||
| Write-offs charged against the allowance, net of recoveries and other | ||||
| Outstanding Balance, March 31, 2025 | $ | |||
NOTE 4 – PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consisted of the following (in thousands):
| March 31, 2025 | December 31, 2024 | |||||||
| (unaudited) | ||||||||
| Prepaid insurance | $ | $ | | |||||
| Other prepaid expense | ||||||||
| Deposits | ||||||||
| $ | $ | |||||||
NOTE 5 – PROPERTY AND EQUIPMENT
Property and equipment consist of the following (in thousands):
| March 31, 2025 | December 31, 2024 | |||||||
| (unaudited) | ||||||||
| Computer equipment | $ | $ | | |||||
| Furniture and fixtures | ||||||||
| Data warehouse | ||||||||
| Software | ||||||||
| Total cost | ||||||||
| Less accumulated depreciation and amortization | ( | ) | ( | ) | ||||
| Property and equipment, net | $ | $ | ||||||
The useful life of computer
equipment, furniture and fixtures, software and the data warehouse is
Depreciation and amortization
expense for the three months ended March 31, 2025, and 2024, was $
10
NOTE 6 – ACCRUED EXPENSES AND OTHER LIABILITIES
Accrued expenses and other current liabilities consisted of the following (in thousands):
| March 31, 2025 | December 31, 2024 | |||||||
| (unaudited) | ||||||||
| Accrued wages, commission and bonus | $ | $ | | |||||
| Accrued professional fees | ||||||||
| Accrued interest on 2024 Secured Convertible and Term Notes | ||||||||
| Sales tax payable | ||||||||
| Deferred financial advisory fees | ||||||||
| Other liabilities | ||||||||
| $ | $ | |||||||
NOTE 7 – RELATED PARTY TRANSACTIONS
Jeffrey Harris, the former
CEO, and Paul Sykes, the former CFO, both participated in the debt financing transaction completed on January 23, 2024. Jeffrey Harris
purchased $
On January 17, 2025, Jeffrey
Harris entered into an agreement to sell $
There are two members of
the board of directors at March 31, 2025, who are related parties to investors in the debt financing transaction completed on January
23, 2024. In aggregate these investors initially purchased $
On March 31, 2025, Mr. Harris
stepped down as the Company’s CEO. Pursuant to agreements entered into between Mr. Harris and the Company, the Company is required
to grant to Mr. Harris
NOTE 8 – LONG-TERM DEBT
The table below presents the components of outstanding debt (in thousands):
| March 31, 2025 | December 31, 2024 | |||||||
| (unaudited) | ||||||||
| 2024 Secured Term Notes - related parties | $ | $ | | |||||
| 2024 Secured Term Notes | ||||||||
| 2024 Secured Convertible Notes - related parties | ||||||||
| 2024 Secured Convertible Notes | ||||||||
| Less deferred financing fees, net | ( | ) | ( | ) | ||||
| $ | $ | |||||||
On January 23, 2024, the
Company issued $
The 2024 Secured Term Notes
were initially due in January 2026 and accrued interest payable in cash semi-annually at a rate of
11
On November 11, 2024, the
Company amended the terms of the 2024 Secured Term Notes and 2024 Secured Convertible Notes including extending the maturity date to
The interest rates on the
2024 Secured Term Notes and 2024 Secured Convertible Notes increase to
The Company may prepay any portion of the 2024 Secured Term Notes, without penalty, at any time after February 1, 2025.
The 2024 Secured Convertible
Notes are convertible into common stock at a conversion price of $
The 2024 Secured Term Notes and 2024 Secured Convertible Notes rank pari passu and are secured on substantially all the assets of the Company.
The 2024 Secured Term Notes and 2024 Secured Convertible Notes include restrictive covenants that, among other things, limit the ability of the Company to incur additional indebtedness and guarantee indebtedness; incur liens or allow mortgages or other encumbrances; prepay, redeem, or repurchase certain other debt; pay dividends or make other distributions or repurchase or redeem our capital stock; sell assets or enter into or effect 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) and also contain customary events of default.
At the time of the amendments,
consistent with FASB ASC Topic 470 Debt, (“ASC 470”), the Company performed an analysis of the change associated with
the amendments to determine whether the change was a modification or an extinguishment of debt. Under a modification, no gain or loss
is recorded, and a new effective interest rate is established based on the carrying value of the debt and revised cash flow. If the debt
is extinguished, the old debt is derecognized and the new debt is recorded at fair value, which becomes the new carrying value. A gain
or loss is recorded for the difference between the net carrying value of the original debt and the fair value of the new debt. Interest
expense is recorded based on the effective interest rate of the new debt. A debt is considered extinguished if the present value of the
new cash flows under the term of the new debt is at least
In connection with the aforementioned
amendments, the Company determined that the change to the 2024 Secured Term Notes was a modification consistent with ASC 470. The Company
determined that the change to the 2024 Secured Convertible Notes was an extinguishment consistent with ASC 470, with the old debt of $
The Company recorded interest
expense for the three months ended March 31, 2025 and 2024 of $
NOTE 9 – 6% SENIOR SECURED CONVERTIBLE NOTES
In connection with the business
combination, on June 14, 2022, the Company issued $
On January 16, 2024, the
Company and the noteholder executed an agreement for the Company to repurchase the outstanding note and associated warrants, and on January
23, 2024, the note and associated warrants were repurchased for $
The Company recorded $
NOTE 10 – WARRANT LIABILITIES
Prior to the business combination,
at the time of their initial public offering, TCAC issued warrants to purchase
12
The Company accounts for the warrants in accordance with the guidance contained in ASC 815 Derivatives and Hedging, under which the warrants do not meet the criteria for equity treatment and hence are recorded as liabilities. Accordingly, we classify the warrants as liabilities at their fair value and adjust the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations.
At March 31, 2025 and December
31, 2024, the estimated fair value of the warrants was $
The Company recorded a change
in fair value of for the three months ended March 31, 2025, and a fair value loss of approximately $
The fair value is determined in accordance with ASC 820, Fair Value Measurement. See Note 16, Fair Value Measurements, to the accompanying condensed consolidated financial statements for further information.
NOTE 11 – REVENUE RECOGNITION
The following table represents our revenues disaggregated by type (in thousands):
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenue | ||||||||
| Retail revenue | $ | $ | ||||||
| Brand revenue | ||||||||
| $ | $ | |||||||
Geographic Information
Revenue by geographical region consist of the following (in thousands):
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Retail revenue | ||||||||
| United States | $ | $ | ||||||
| Canada | ||||||||
| Brand revenue | ||||||||
| United States | ||||||||
| Canada | ||||||||
| $ | $ | |||||||
Revenues by geography are
generally based on the country of the Company’s contracting entity. Total United States revenue was approximately
The Company has corrected
the accounting for VIP subscriptions and wallet payments such that revenue on these products is now included on a net revenue basis. The
impact of the revision was not considered material to the consolidated financial statements.
| QUARTER ENDING | YEAR TO DATE | |||||||||||||||||||||||
| March 31, | March 31, | March 31, | March 31, | |||||||||||||||||||||
| 2024 | 2024 | 2024 | 2024 | |||||||||||||||||||||
| As reported | Adjustment | Revised | As reported | Adjustment | Revised | |||||||||||||||||||
| Revenues | $ | $ | ( | ) | $ | | $ | $ | ( | ) | $ | |||||||||||||
| Cost of revenues | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Gross profit | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
13
NOTE 12 – CONTRACT ASSETS
Contract assets consisted of the following as of (in thousands):
| March 31, 2025 | December 31, 2024 | |||||||
| (unaudited) | ||||||||
| Deferred sales commissions | $ | | $ | | ||||
The movement in the contract assets during the three months ended March 31, 2025, and the year ended December 31, 2024, comprised the following (in thousands):
| March 31, 2025 | December 31, 2024 | |||||||
| (unaudited) | ||||||||
| Contract assets at start of the period | $ | $ | ||||||
| Expense deferred during the period | ||||||||
| (Less) amounts expensed during the period | ( | ) | ( | ) | ||||
| Contract assets at end of the period | $ | $ | ||||||
NOTE 13 – STOCK BASED COMPENSATION
In connection with the business combination, the Tuatara shareholders approved the SpringBig Holdings, Inc. 2022 Long-Term Incentive Plan (the “2022 Incentive Plan”), which became effective upon the Closing.
The number of shares of our
common stock initially reserved for issuance under the 2022 Incentive Plan was
At the annual shareholder
meeting on June 13, 2022, the Company shareholders approved an amendment to the 2022 Incentive Plan to add an automatic annual increase
in the number of shares authorized for issuance of up to
The number of shares automatically
added to the number of shares authorized for issuance on January 1, 2024, and 2025 was
Prior to the closing of the merger, Legacy SpringBig maintained an equity incentive plan (the “Legacy Incentive Plan”), which was originally established effective December 1, 2017. SpringBig has not granted any additional awards under the Legacy Incentive Plan following the business combination.
14
The following table summarizes information on stock options outstanding as of March 31, 2025, under the Legacy Incentive Plan:
| Options outstanding | Options Vested and Exercisable | |||||||||||||||||||
| Number of Options | Weighted Average Exercise Price (per share) | Number of Options | Weighted Average Remaining Contractual Life (years) | Weighted Average Exercise Price (per share) | ||||||||||||||||
| Outstanding Balance, January 1, 2025 | $ | $ | ||||||||||||||||||
| Options granted | ||||||||||||||||||||
| Options exercised | ||||||||||||||||||||
| Options forfeited and cancelled | ( | ) | $ | |||||||||||||||||
| Outstanding Balance, March 31, 2025 | $ | $ | ||||||||||||||||||
During the three months ended
March 31, 2025, and 2024, $
No options were exercised
during the three months ended March 31, 2025. As of March 31, 2025, the intrinsic value of the
The following table summarizes information on Restricted Stock Units outstanding as of March 31, 2025, under the 2022 Incentive Plan:
| Restricted Stock Units Outstanding | ||||||||||||
| Number of RSU’s | Weighted Average Fair Value (per share) | Weighted Average Vesting (years) | ||||||||||
| Outstanding Balance, January 1, 2024 | $ | |||||||||||
| RSU’s granted | $ | |||||||||||
| RSU’s forfeited and cancelled | ( | ) | $ | |||||||||
| RSU’s vested and common stock issued | ( | ) | $ | |||||||||
| Outstanding Balance, December 31, 2024 | $ | |||||||||||
| RSU’s granted | $ | |||||||||||
| RSU’s forfeited and cancelled | ( | ) | $ | |||||||||
| RSU’s vested and common stock issued | ( | ) | $ | |||||||||
| Outstanding Balance, March 31, 2025 | $ | |||||||||||
During the three months ended
March 31, 2025, and 2024, compensation expense recorded in connection with the 2022 Incentive Plan was $
NOTE 14 – LEASES
The Company leases office
facilities in Boca Raton, Florida, Seattle, Washington and Ontario, Canada under non-cancelable operating lease agreements. The leases
require monthly payments ranging from $
15
In June 2022, the Company
entered into a new lease which became effective on January 1, 2024, after completion of leasehold improvements. The new lease term is
for
As of March 31, 2025, and December 31, 2023, the following amounts were presented on the Company’s condensed consolidated balance sheets in accordance with ASC 842 - Lease Accounting (in thousands):
| Balance Sheet | March 31, 2025 | December 31, 2024 | ||||||
| (unaudited) | ||||||||
| Assets: | ||||||||
| Right of use asset | $ | | $ | |||||
| Liabilities | ||||||||
| Operating lease liability, current | ||||||||
| Operating lease liability, non-current | ||||||||
| Total operating lease liability | $ | $ | | |||||
For the three months ended
March 31, 2025, and 2024, the Company’s operating lease cost was $
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Other information | ||||||||
| Operating lease cost | $ | $ | ||||||
| Operating cash flows paid to operating leases | $ | $ | ||||||
| Right-of-use assets in exchange for new operating lease liabilities | $ | $ | ||||||
| Weighted-average remaining lease term - operating leases (months) | ||||||||
| Weighted-average discount rate - operating leases | % | % | ||||||
As of March 31, 2025, the Company’s lease liabilities mature as follows (in thousands):
| Operating Leases | ||||
| Fiscal Year: | ||||
| 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| Total lease payments | ||||
| Less imputed interest | ( | ) | ||
| Present value of lease liabilities | $ | |||
16
NOTE 15 – COMMITMENTS AND CONTINGENCIES
Litigation
The Company evaluates the possible resolution of any legal and other contingencies when losses are possible in accordance with ASC 450, Contingencies (“ASC 450”). Significant judgment is required in both the determination of the probability of an outcome as well as the determination of an estimate of the amount of any potential loss.
The Company is from time to time involved in litigation incidental to the conduct of its business. In accordance with applicable accounting guidance, the Company records a provision for a liability when it is both probable that a liability has been incurred and the amount can be reasonably estimated. Management believes that the outcome of such legal proceedings, legal actions and claims will not have a significant adverse effect on the Company’s financial position, results of operations or cash flows.
The Company received a civil
investigative demand from the United States Attorney’s Office with regard to its Paycheck Protection Program Loan (“PPP Loan”)
originally received in 2020 and forgiven in 2021. The investigation is based on whether the Company was eligible for a PPP Loan if its
software products are in fact used to support the use, growth, enhancement or development of marijuana. The amount of the PPP Loan was
approximately $
Employee Retention Payroll Tax Credits
In March 2020, the U.S. government
enacted the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to provide economic and other relief as a result of the COVID-19
pandemic. The CARES Act includes, among other items, provisions relating to refundable employee retention payroll tax credits. Due to
the complex nature of the employee retention credit computations, any benefits we may receive are uncertain and may significantly differ
from our current estimates. We plan to record any benefit related to these credits upon both the receipt of the benefit and the resolution
of the uncertainties, including, but not limited to, the completion of any potential audit or examination, or the expiration of the related
statute of limitations. During the year ended December 31, 2023, we received $
NOTE 16 – FAIR VALUE MEASUREMENTS
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).
The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
| Level 1: | Valuation is based on unadjusted quoted prices in active markets for identical assets and liabilities that are accessible at the reporting date. Because valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. |
| Level 2: | Valuation is determined from pricing inputs that are other than quoted prices in active markets that are either directly or indirectly observable as of the reporting date. Observable inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and interest rates and yield curves that are observable at commonly quoted intervals. |
| Level 3: | Valuation is based on inputs that are both significant to the fair value measurement and unobservable. Level 3 inputs include situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value generally require significant management judgment or estimation. |
17
Liabilities measured at fair value on a recurring basis
The balances of the Company’s liabilities measured at fair value on a recurring basis as of March 31, 2025, are as follows (in thousands):
| Level 1 | Level 2 | Level 3 | Total Fair Value | |||||||||||||
| Liabilities: | ||||||||||||||||
| Public warrants | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
The balances of the Company’s liabilities measured at fair value on a recurring basis as of December 31, 2024, are as follows (in thousands):
| Level 1 | Level 2 | Level 3 | Total Fair Value | |||||||||||||
| Liabilities: | ||||||||||||||||
| Public warrants | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||
Given the limited trading volumes for the public warrants, there were certain transfers of financial liabilities between Level 1 and Level 2 during the year ended December 31, 2024.
The following is a description of the methodologies used to estimate the fair values of liabilities measured at fair value on a recurring basis and within the fair value hierarchy.
Warrant liabilities
Prior to the business combination,
TCAC issued warrants to purchase
The Company utilizes a fair value approach to account for its warrants based on the quoted price at March 31, 2025, the calculation is consistent with ASC 820, Fair Value Measurement, with changes in fair value recorded in current earnings.
At March 31, 2025, the value
of the public warrants was approximately $
Changes in Fair Value
The following tables provides a roll-forward in the changes in fair value in the public warrants for the three months ended March 31, 2025 (in thousands):
| Balance, January 1, 2025 | $ | |||
| Change in fair value | ||||
| Balance, March 31, 2025 | $ | |||
| Change in fair value included in earnings for the period relating to liabilities held at March 31, 2025 | $ |
Other Fair Value Considerations – Carrying value of accounts receivables, contract assets, prepaid expenses and other assets, accounts payable and accrued expenses approximate fair value due to their short-term maturities and/or low credit risk.
18
NOTE 17 – STOCKHOLDERS’ DEFICIT
Sponsor Escrow Agreement
At the time of the Closing,
TCAC Sponsor, LLC, a Delaware limited liability company (“Sponsor”), Tuatara and certain independent members of Tuatara’s
board of directors entered into an escrow agreement (“Sponsor Escrow Agreement”), providing that (i) immediately following
the Closing, Sponsor and certain of Tuatara’s board of directors’ independent directors shall deposit an aggregate of
Contingent and Earnout Shares
The holders of Legacy SpringBig’s common stock and the “engaged option holders” (employees or engaged consultants of Legacy SpringBig who held Legacy SpringBig options at the effective time of the merger and who remains employed or engaged by Legacy SpringBig at the time of such payment of contingent shares) shall be entitled to receive their pro rata portion of such number of shares, fully paid and free and clear of all liens other than applicable federal and state securities law restrictions, as set forth below upon satisfaction of any of the following conditions:
| a. |
| b. |
| c. |
With the consummation of
the business combination, the Company’s authorized capital stock is
NOTE 18 – NET LOSS PER SHARE
As of March 31, 2025, and
2024, there were
Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potential shares of common stock, including outstanding stock options. Basic and diluted net loss per share was the same for each period presented, given there are losses during the period, the inclusion of all potential common shares outstanding would have been anti-dilutive.
19
The following table reconciles actual basic and diluted earnings per share for the three months ended March 31, 2025, and 2024, respectively (in thousands, except share and per share data).
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Loss per share: | ||||||||
| Numerator: | ||||||||
| Net (loss) income for basic net (loss) income calculation | $ | ( | ) | $ | ||||
| Effect of dilutive securities: | ||||||||
| Interest expense on Convertible Notes | ||||||||
| Net (loss) income for diluted net (loss) income calculation | $ | ( | ) | $ | ||||
| Denominator: | ||||||||
| Denominator for basic net (loss) income per share, weighted average | ||||||||
| Effect of dilutive securities: | ||||||||
| Convertible notes stock conversion, weighted average as converted | ||||||||
| Denominator for diluted net (loss) income per share, weighted average | ||||||||
| Net loss per common share | ||||||||
| Basic | $ | ( | ) | $ | ||||
| Diluted | $ | ( | ) | $ | ||||
The anti-dilutive securities excluded from the weighted-average shares used to calculate the diluted net loss per common share for the three months ended March 31, 2025, and the net income per common share for the three months ended March 31, 2024, were as follows:
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Shares unvested and subject to exercise of stock options | ||||||||
| Shares subject to outstanding common stock options | ||||||||
| Shares subject to convertible notes stock conversion | ||||||||
| Shares subject to warrants stock conversion | ||||||||
| Shares subject to contingent earn out | ||||||||
| Restricted stock units | ||||||||
NOTE 19 – BENEFIT PLAN
The Company maintains a safe
harbor 401(k) retirement plan for the benefit of its employees. The plan allows participants to make contributions subject to certain
limitations. Company matching contributions were $
NOTE 20 – INCOME TAXES
In determining quarterly
provisions for income taxes, the Company uses the annual estimated effective tax rate applied to the actual year-to-date profit or loss,
adjusted for discrete items arising in that quarter. The Company’s annual estimated effective tax rate differs from the U.S. federal
statutory rate primarily as a result of state taxes, foreign taxes, and changes in the Company’s full valuation allowance against
its deferred tax assets. The Company’s effective tax rate for the three months ended March 31, 2025 and March 31, 2024 is
20
NOTE 21 – SEGMENT REPORTING
The Company has determined that it has a single operating segment.
The Company’s CEO is the CODM. The CODM reviews financial information presented for the purposes of allocating resources and evaluating financial performance at an entity level and the Company have no segment managers who are held accountable by the CODM for operations and operating results. The products and services across the Company are similar in nature, distributed in a comparable manner and have customers with common characteristics. Refer to Note 2 – Summary of Significant Accounting Policies.
The following table presents selected financial information with respect to the Company’s single operating segment:
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Net Revenue | $ | $ | ||||||
| Cost of revenue | ||||||||
| Gross profit | $ | $ | ||||||
| Less: Employee expense | ||||||||
| Contractor expense | ||||||||
| Occupancy expense | ||||||||
| Professional services expense | ||||||||
| Technology platform hosting expense | ||||||||
| Credit loss expense | ||||||||
| Other expenses ^ | ||||||||
| Loss from operations | $ | ( | ) | $ | ( | ) | ||
| Interest income | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Gain on note repurchase | ||||||||
| Change in fair value of warrants | ( | ) | ||||||
| Net (loss) income | $ | ( | ) | $ | ||||
| ^ |
The measure of segment assets is reported on the condensed balance sheet as total assets.
NOTE 22 – SUBSEQUENT EVENTS
On March 17, 2025, the Company announced the intent to acquire VICE CRM, an AI-enabled performance marketing platform designed to optimize return on investment for consumer marketing campaigns in highly regulated industries, and the appointment of Jaret Christopher, the founder of VICE CRM, as the Company’s CEO with effect from April 1, 2025. Jeffrey Harris stepped down as the Company CEO on March 31, 2025. The acquisition of VICE CRM is expected to be completed in June 2025.
On May 7, 2025 (the
“Amendment Date”) the first amendment to the separation agreement with Mr. Sykes was executed, which revised the terms
of the original agreement with Mr. Sykes. Per the amendment, the separation date for Mr. Sykes was accelerated to the Amendment
Date, and Mr. Sykes will be entitled to a revised bonus of $
21
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Business Overview
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 cannabis industry. Stringent, complex, and rapidly evolving regulations have resulted in restricted access to traditional marketing and advertising channels for cannabis 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 cannabis 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.
SpringBig serves approximately 900 clients across more than 2,250 distinct retail locations in North America. Our clients distribute approximately 600 million messages annually, via text, push or email, and in the last year more than $7.0 billion of gross merchandise value was accounted for by clients utilizing our platform.
On June 14, 2022, SpringBig Holdings, Inc., a Delaware corporation (formerly known as Tuatara Capital Acquisition Corporation), consummated a business combination of Tuatara and Legacy SpringBig, 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, Tuatara changed its name to SpringBig Holdings, Inc.
As a consequence of the business combination, Legacy SpringBig 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, SpringBig Holdings, Inc. was delisted from the Nasdaq Capital Market and its common stock is now quoted for trading on the OTCQB® Venture Market.
Recent Developments
None
Key Operating and Financial Metrics
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 months ended March 31, 2025, and 2024, in thousands:
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenue | $ | 5,516 | $ | 6,396 | ||||
| Net (loss) income | (751 | ) | 417 | |||||
| Adjusted EBITDA | 326 | 150 | ||||||
| Number of retail clients | 900 | 1,207 | ||||||
| Net revenue retention | 86 | % | 89 | % | ||||
| Number of messages (million) | 133 | 140 | ||||||
For a reconciliation of net loss to Adjusted EBITDA see “EBITDA” and “Adjusted EBITDA,” below.
Revenue
We generate revenue from the sale of monthly subscriptions that provide retail clients with access to an integrated platform through which they can manage loyalty programs and communications with their consumers. We also generate additional revenue from these retail clients when the quantum of messages sent to consumers exceeds the amounts in the subscription package. The subscriptions generally have twelve-month terms (which typically are not subject to early termination without a cancellation fee payable by the client), are payable monthly, and automatically renew for subsequent and recurring twelve-month periods unless notice of cancellation is provided in advance.
22
The Company’s 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, the Company 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.
Other Key Operating Metrics
The growth in our revenues is a key metric at this stage in our development as a Company and therefore to provide investors with additional information, we have disclosed in the table above the number of our retail clients, our net revenue retention rate and the number of messages distributed through the SpringBig platform by our clients. We regularly review the key operating and financial metrics set forth above to evaluate our business, our growth, assess our performance and make decisions regarding our business. We believe these key metrics are useful to investors both because they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making, and they may be helpful in evaluating the state and growth of our business.
Number of Retail Clients. We disclose in the table above the number of discrete SpringBig platforms used by clients of the business at the end of the relevant period. We view this number as an important metric to assess the performance of our business because an increased number of clients drives growth, increases brand awareness and helps contribute to our reach and strengthening our value proposition.
Net Revenue Retention. We believe that the growth in the use of our platform by our clients is an important metric in evaluating our business and growth. We monitor our dollar-based net revenue retention rate on a rolling basis to track the maintenance of revenue and revenue-increasing activity growth. “Net revenue retention rate” (also referred to as “net dollar retention rate”) does not have a standardized meaning and is therefore unlikely to be comparable to similarly titled measures presented by other companies, and further, investors should not consider it in isolation. When evaluating our retention rates and calculating our net revenue retention rate, SpringBig calculates the recurring monthly subscription revenue from retail clients, adjusted for losses, increases and decreases in monthly subscriptions during the prior twelve months divided by the recurring monthly subscription revenue at the start of the trailing twelve-month period. The net revenue retention is calculated based on subscription revenues only and does not include the impact of excess use revenue.
Number of Messages Sent. We believe that the volume of messages sent is important as it indicates the frequency of use and level of engagement of our platform by our clients. Messages are distributed by text, email, and direct push notifications to mobile applications.
EBITDA and Adjusted EBITDA
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 credit loss expense and stock-based compensation).
We present EBITDA and Adjusted EBITDA because they are key measures used by our management and board of directors to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of investment capacity. Accordingly, we believe that EBITDA and Adjusted EBITDA provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors, and is widely used by analysts, investors and competitors to measure a company’s operating performance.
23
EBITDA and Adjusted EBITDA have limitations, and you should not consider these in isolation or as a substitute for analysis of our results as reported under GAAP, including net loss, which we consider to be the most directly comparable GAAP financial measure. Some of these limitations are:
| ● | although depreciation and amortization are non-cash charges, the assets being depreciated may have to be replaced in the future, and neither EBITDA nor Adjusted EBITDA reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; |
| ● | EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; and |
| ● | EBITDA and Adjusted EBITDA do not reflect tax payments that may represent a reduction in cash available. |
Because of these limitations, you should consider EBITDA and Adjusted EBITDA alongside other financial performance measures, including net loss and our other GAAP results.
A reconciliation of net loss before taxes to non-GAAP EBITDA and Adjusted EBITDA is as follows (in thousands):
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Net (loss) income | $ | (751 | ) | $ | 417 | |||
| Interest income | - | (4 | ) | |||||
| Interest expense | 324 | 875 | ||||||
| Income tax expense | - | - | ||||||
| Depreciation expense | 33 | 54 | ||||||
| EBITDA | (394 | ) | 1,342 | |||||
| Stock-based compensation | 163 | 195 | ||||||
| Credit loss expense | 90 | 87 | ||||||
| Gain on repurchase of convertible debt | - | (1,573 | ) | |||||
| Severance and related payments | 467 | 96 | ||||||
| Change in fair value of warrants | - | 3 | ||||||
| Adjusted EBITDA | $ | 326 | $ | 150 | ||||
Factors Affecting Our Performance
Overall Economic Trends
The overall economic environment and related changes to consumer behavior have a significant impact on our business. Overall, positive conditions in the broader economy promote consumer spending on marketplaces and our customers’ products, while economic weakness, which generally results in reduced consumer spending, may have a negative impact on our customers’ sales, which in turn may impact our revenue.
Growth and Retention of Customers
Our revenue grows primarily through acquiring and retaining customers and expanding relationships with customers over time, increasing the revenue per customer. We have historically been able to attract, retain and grow relationships with customers as a result of the Company’s comprehensive product suite, differentiated loyalty programs, consistent communications with customers, and reliable customer service.
24
Regulation and Maturation of Cannabis Markets
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.
Components of Our Results of Operations
Revenue
SpringBig provides its retail customers with access to an integrated platform that provides all the functions of the Company’s proprietary software, which uses proprietary technology to send text, email, and push messages to the customer’s contacts. This access is provided to customers under a contract, with revenue generated from monthly subscriptions for credits (up to the pre-contracted amount) and optional purchases of additional credits.
Cost of Revenue
Cost of revenue consists primarily of amounts payable to distributors of messages on behalf of the Company’s customers across cellular networks and integrations.
Selling, Servicing and Marketing Expenses
Selling, servicing and marketing expenses consist of salaries, benefits, travel expense and incentive compensation for our sales, servicing and marketing employees. In addition, sales, servicing and marketing expenses include business acquisition marketing, events cost, and branding and advertising costs.
25
Technology and Software Development Expenses
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.
General and Administrative Expenses
General and administrative expenses consist primarily of payroll and related benefits costs for our employees involved in general corporate functions including finance, human resources and investor relations, as well as costs associated with the use by these functions of software and equipment. All rent, insurance and other occupancy costs are also included in general and administrative expenses as are professional and outside services related to legal, audit and other services, and stock compensation expenses.
Results of Operations
Comparison of Three Months Ended March 31, 2025, compared to Three Months Ended March 31, 2024
The following tables set forth our results of operations for the periods indicated (in thousands):
| Three Months Ended March 31, | ||||||||||||||||
| 2025 | 2024 | Increase (decrease) | % | |||||||||||||
| (in thousands) | ||||||||||||||||
| Revenue | $ | 5,516 | $ | 6,396 | $ | (880 | ) | -14 | % | |||||||
| Cost of revenue | 1,206 | 1,716 | (510 | ) | -30 | % | ||||||||||
| Gross profit | 4,310 | 4,680 | (370 | ) | -8 | % | ||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, servicing and marketing | 1,059 | 1,527 | (468 | ) | -31 | % | ||||||||||
| Technology and software development | 1,271 | 1,666 | (395 | ) | -24 | % | ||||||||||
| General and administrative | 2,407 | 1,769 | 638 | 36 | % | |||||||||||
| Total operating expenses | 4,737 | 4,962 | (225 | ) | -5 | % | ||||||||||
| Loss from operations | (427 | ) | (282 | ) | (145 | ) | ||||||||||
| Interest income | - | 4 | (4 | ) | nm | |||||||||||
| Interest expense | (324 | ) | (875 | ) | 551 | 63 | % | |||||||||
| Gain on note repurchase | - | 1,573 | (1,573 | ) | nm | |||||||||||
| Change in fair value of warrants | - | (3 | ) | 3 | nm | |||||||||||
| Loss before taxes | (751 | ) | 417 | (1,168 | ) | 280 | % | |||||||||
| Provision for income taxes | - | - | - | |||||||||||||
| Loss after taxes | $ | (751 | ) | $ | 417 | $ | (1,168 | ) | 280 | % | ||||||
nm-not meaningful
Revenues. Revenues decreased $0.9 million for the three months ended March 31, 2025, representing a 14% year-on-year reduction compared with the same period in 2024. Our subscription revenue was $4.8 million for the three months ended March 31, 2025, compared with $5.4 million in the same quarter in 2024, representing 11% year-over-year decline. Subscription revenue as a proportion of total revenue was 87% for the three months ended March 31, 2025, compared with 84% in the same period last year. The excess use revenue also declined, by 40% year-over-year due to the weaker economy impacting the cannabis sector and our clients being budget-conscious in limiting their messaging activity to within the volumes of their subscription. Excess use revenue represented 9% of total revenue for the three months ended March 31, 2025, compared with 13% in the same period last year.
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Our net revenue retention rate was 86% for the twelve months ended March 31, 2025, compared with 89% for the twelve months ended March 31, 2024, reflecting the continuing challenging macroeconomic conditions of the cannabis market and the financial stress of some of our retail clients leading to the Company having to suspend or cease some access to our platform.
Gross Profit. Gross profit decreased by $0.4 million to $4.3 million for the three months ended March 31, 2025, from $4.7 million for the three months ended March 31, 2024, representing an 8% year-on-year reduction. The reduction was due to the $0.9 million decline in revenues although the impact was partly mitigated by a 5% improvement in gross profit margin from 73% for the three months ended March 31, 2024, to 78% for the three months ended March 31, 2025, as a consequence of lower messaging distribution costs.
Operating Expenses. Operating expenses decreased by $0.2 million, or 5%, for the three months ended March 31, 2025, compared with the same period in 2024.
Selling, servicing and marketing expenses decreased by $0.5 million, or 31%, for the quarter ended March 31, 2025, compared to the same period in 2024, due to lower compensation expense as a result of lower employee headcount.
Technology and software development expenses decreased by $0.4 million, or 24%, for the quarter ended March 31, 2025, compared to the same period in 2024, with the decrease being attributable to lower expenses associated with the use of offshore contract developers and a reduction in compensation expense.
General and administrative expenses increased by $0.6 million, or 36%, for the quarter ended March 31, 2025, compared to the same period in 2024. The expenses in the quarter ended March 31, 2025, included $0.5 million relating to the separation agreement with the former CEO; excluding this expense the increase was $0.2 million, or 10%, being attributable to higher insurance fees and legal and accounting advisory fees.
Interest Expense. Interest expense was $0.3 million for the quarter ended March 31, 2025, compared with $0.9 million for the quarter ended March 31, 2024, with the reduction being due to the high interest-bearing cash advances outstanding during the prior year having been fully repaid during the second half of 2024.
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, 2025, the market value of the public warrants, which are quoted for trading on the OTC Pink Market, was $0.0007 per warrant which was the same as the quoted price at December 31, 2024. Therefore, there is no expense or credit in our income statement for the three months ended March 31, 2025.
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Liquidity & Capital Resources
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 Term Notes and Convertible Notes in January 2024. Our primary uses of cash in the short-term are to fund our operations as we continue to grow our business.
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 July 25, 2023, the Company entered into an agreement (the “Cash Advance”) with Cedar Advance LLC (“Cedar”) to sell future receivables to Cedar in exchange for an advance of $1.0 million. On November 22, 2023, the Company extended the Cash Advance, receiving a further advance of $0.3 million. As of March 31, 2024,the total outstanding amount payable to Cedar was $0.6 million. The outstanding amount was fully repaid during the year ended December 31, 2024.
On October 16, 2023, the Company entered into an agreement (the “ACF Cash Advance”) with Agile Capital Funding, LLC (“ACF”) to sell future receivables to ACF in exchange for an advance of $750,000. On December 7, 2023, the Company extended the ACF Cash Advance, receiving a further advance of $0.5 million. As of March 31, 2024the total outstanding amount payable to ACF was $1.1 million. The outstanding amount was fully repaid during the year ended December 31, 2024.
On January 16, 2024, we entered into an agreement with the note holder to repurchase the entire outstanding principal of the 6% Senior Secured Notes and cancel the associated warrants. The outstanding principal and accrued interest was $5.2 million. SpringBig, using a portion of the proceeds from the 2024 Convertible Notes, purchased the entire outstanding obligation to the note holder for $2.9 million.
On January 23, 2024, the Company raised $6.4 million through the issuance of 2024 Convertible Notes and $1.6 million through the issuance of 2024 Term Notes. The net cash proceeds, after transaction expenses, were $7.2 million.
The 2024 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 2024 Term Notes, initially due at issuance in January 2026, accrue interest payable in cash semi-annually. The 2024 Convertible Notes and 2024 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 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 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 interest rates on the 2024 Secured Term Notes and 2024 Secured Convertible Notes increase 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 the Company reports 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 is 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.
The Company may prepay any portion of the 2024 Secured Term Notes, without penalty, at any time after February 1, 2025.
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The following table summarizes our cash, accounts receivable, and working capital at March 31, 2025, and December 31, 2024 (in thousands):
| March 31, 2025 | December 31, 2023 | |||||||
| Cash and cash equivalents | $ | 1,087 | $ | 1,179 | ||||
| Accounts receivable, net | 2,212 | 2,213 | ||||||
| Working capital | (2,021 | ) | (1,806 | ) | ||||
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 2024 Convertible Notes and 2024 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 2024 Convertible Notes and 2024 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 Flows
The following table summarizes our cash flows from operating, investing and financing activities for the three months ended March 31, 2025, and 2024 (in thousands):
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Total cash (used in) provided by: | ||||||||
| Operating activities | $ | (86 | ) | $ | (1,878 | ) | ||
| Investing activities | (6 | ) | (59 | ) | ||||
| Financing activities | - | 3,274 | ||||||
| $ | (92 | ) | $ | 1,337 | ||||
Operating Activities
Cash provided by operating activities consists primarily of net loss adjusted for certain non-cash items, including depreciation and amortization, non-cash stock compensation expenses, changes in the fair value of financial instruments and the effect of changes in working capital and other activities.
In the three months ended March 31, 2025, the net loss was $0.7 million, and the cash used in operating activities was $0.1 million. The difference of $0.6 million is due to a $0.1 million decrease in working capital and $0.5 million of non-cash items (including depreciation, amortization and stock-based compensation).
In the three months ended March 31, 2024, the net income was $0.4 million, and the cash used in operating activities was $1.9 million. The difference of $2.3 million is due to a $1.6 million gain on the repurchase of the 6% Secured Convertible Note in January 2024, the cash benefit of which is reflected in financing activities, and a $1.3 million increase in working capital (primarily due to reduced payables) being partially offset by $0.6 million of non-cash items (including depreciation, amortization, stock-based compensation and change in the fair value of warrants).
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Investing Activities
SpringBig has low capital investment requirements, with our needs being comprised primarily of computer equipment and office furniture and related items. Cash used in investing activities was $6,000 for the three months ended March 31, 2025, and $59,000 for the three months ended March 31, 2024.
Financing Activities
There were no cash flows due to financing activities during the three months ended March 31, 2025.
During the three months ended March 31, 2024, the net cash provided by financing activities was $3.3 million. The proceeds of $7.5 million, net of expenses, from the issuance of the $1.6 million aggregate principal amount of 2024 Secured Term Notes, due 2027, and $6.4 million aggregate principal amount of 2024 Secured Convertible Notes, due 2027, were in part used to repay the 6% Senior Secured Convertible and associated warrants for cash consideration of $2.9 million. The short-term cash advances were repaid by $0.7 million and a related party loan of $0.5 million was repaid during the three months ended March 31, 2024.
Off-Balance Sheet Arrangements
At March 31, 2025, there were no off-balance sheet arrangements between us and any other entity that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to shareholders.
Critical Accounting Policies and Estimates
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 (including issuance of common stock for services rendered), and allowance for credit losses have the greatest potential impact on our condensed consolidated financial statements. Therefore, we consider the policies related to these financial areas to be our critical accounting policies.
Income Taxes
We record current income taxes based on our estimates of current taxable income and provide for deferred income taxes to reflect estimated future income tax payments and receipts. We are subject to federal income taxes as well as state taxes. In addition, we are subject to taxes in the foreign jurisdictions where we operate.
The Company records a deferred tax asset or liability based on the difference between financial statement and tax basis of assets and liabilities as measured by the anticipated tax rates which will be in effect when these differences reverse. The measurement of deferred tax assets is reduced, if necessary, by the amount of any tax benefits that, based on available evidence, are not expected to be realized. The Company adopted ASU 2016-17, Balance Sheet Classification of Deferred Taxes. The guidance requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. As a result, each jurisdiction will only have one net noncurrent deferred tax asset or liability.
The Company has evaluated its tax positions for any uncertainties based on the technical merits of the positions taken. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be upheld on examination by taxing authorities. The Company has analyzed the tax positions taken and has concluded that as of March 31, 2025, and 2024, there are no uncertain tax positions taken, or expected to be taken, that would require recognition of a liability or disclosure in the financial statements.
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Stock-Based Compensation
ASC 718, Compensation - Stock Compensation, addresses accounting for share-based awards, including stock options, restricted stock, performance shares and warrant. Stock-based compensation for stock options to employees and non-employees is based upon the fair value of the award on the date of grant. We record forfeitures as they occur. The compensation cost is recognized over the requisite service period, which is generally the vesting period, and is included in general and administrative expenses in the condensed consolidated statements of operations.
The Company estimates the fair value of stock options using the Black-Scholes valuation model. The expected life represents the term the options granted are expected to be outstanding. The expected volatility was determined using the historical volatility of similar publicly traded companies. The risk-free interest rate is based on the U.S. Treasury rate in effect at the time of grant.
Allowance for Credit Losses
The Company’s reserve methodology used to determine the appropriate level of the allowance for credit losses (“ACL”) is a critical accounting estimate. The ACL is maintained at a level believed to be appropriate to provide for the current credit losses expected to be incurred with respect to accounts receivable balances at the balance sheet date, including balances associated with known or anticipated problem customers.
Accounts receivables are charged off to the extent they are deemed to be uncollectible. Net charge-offs are included in historical data utilized for calculating the ACL. Management maintains a framework of controls over the estimation process for the ACL, including review of historical data and facts and circumstances related to specific customers, for compliance with GAAP. Management has a quarterly process to review the appropriateness of historical observation periods and loss assumptions. Management also maintains controls over the information systems, models and spreadsheets used in the quantitative components of the reserve estimate. This includes the quality and accuracy of historical data used to derive loss rates, the probability of default, loss given default, and the inputs to industry and macroeconomic forecasts.
Recent Accounting Pronouncements
In December 2023, the FASB issued ASU No. 2023-09 (Topic 740), Improvements to Income Tax Disclosures. The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as an expansion of other income tax disclosures. The ASU is effective on a prospective basis for annual reporting periods beginning after December 15, 2024. The Company is currently evaluating the impact this ASU will have on its consolidated financial statements and related disclosures.
Emerging Growth Company and Smaller Reporting Company Status
Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. Section 107 of the JOBS Act provides that any decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable. We have elected to use this extended transition period under the JOBS Act.
We are also a “smaller reporting company” as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as the market value of our voting and non-voting common stock held by non-affiliates is less than $250 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our voting and non-voting common stock held by non-affiliates is less than $700 million measured on the last business day of our second fiscal quarter.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
We have operations within the United States and limited operations with customers located in Canada, and we are exposed to market risks in the ordinary course of our business, including the effects of interest rate changes, inflation and exchange rate charges. Information relating to quantitative and qualitative disclosures about these market risks is set forth below.
Interest Rate Fluctuation Risk
We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents.
The primary objective of our investment activities is to preserve principal while maximizing income without significantly increasing risk. Because our cash and cash equivalents have a relatively short maturity, our portfolio’s fair value is relatively insensitive to interest rate changes. In future periods, we will continue to evaluate our investment policy in order to ensure that we continue to meet our overall objectives.
Inflation
We do not believe that inflation has had a material effect on our business, financial condition, or results of operations. We continue to monitor the impact of inflation in order to minimize its effects through pricing strategies, productivity improvements and cost reductions. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition and results of operations.
Exchange Rate Risk
We have operations in Toronto, Canada and customers located in Canada. Given our reporting currency is US dollars, this results in exchange rate translation risk. The effect is minimized by matching our Canadian income and expense with our Canadian customers being invoiced in their local currency. The exchange rate risk to our financial statements is immaterial.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports under the Exchange Act, such as this Quarterly Report, is recorded, processed, summarized and reported in accordance with the rules of the Securities and Exchange Commission (“SEC”). Disclosure controls are also designed with the objective of ensuring that such information is accumulated appropriately and communicated to management, including the chief executive officer and chief financial officer, as appropriate, to allow for timely decisions regarding required disclosures.
Our Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial and accounting officer) evaluated the effectiveness of our “disclosure controls and procedures” (as defined in the Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2025, the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of such date. See the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, for a description of the Company’s material weaknesses in internal control over financial reporting.
Changes in Internal Controls over Financial Reporting
No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the three months ended March 31, 2025, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
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Part II – Other Information
Item 1. Legal Proceedings
For a description of developments to legal proceedings during the nine months ended March 31, 2025, see “Litigation” under Note 16, “Commitments and Contingencies” to our condensed consolidated financial statements.
Item 1A. Risk Factors
Our business involves a high degree of risk. You should carefully consider the risks described under the caption “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, as well as the risks, uncertainties and other information set forth in this Item 1A and in the reports and other materials filed or furnished by us with the SEC when making investment decisions regarding our securities. We cannot assure you that any of the events discussed therein will not occur. These risks could have a material and adverse impact on our business, prospects, results of operations, financial condition, and cash flows.
Item 2. Unregistered Sales of Equity Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None
Item 5. Other Information
| (a) | None. |
| (b) | None. |
| (c) | During the three months ended March 31, 2025, no director or officer of the Company |
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Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
| * | Filed herewith. |
| ** | Furnished herewith. |
| # | Indicates a management or compensatory plan. |
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SpringBig Holdings, Inc
| By: | /s/ Jaret Christopher | |
| Name: | Jaret Christopher | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) | ||
| Date: | May 13, 2025 | |
| By: | /s/ Jason Moos | |
| Name: | Jason Moos | |
| Title: | Chief Financial Officer | |
| (Principal Financial Officer and Principal Accounting Officer) |
||
| Date: | May 13, 2025 |
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