Accounting Policies, by Policy (Policies) |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Summary of Significant Accounting Policies [Abstract] | |
| Principles of Consolidation and Basis of Presentation | 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”).
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 and six months ended June 30, 2026, are not necessarily indicative of the results that may be expected for future periods or for the year ending December 31, 2026.
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, 2025, as reported in the 2025 Annual Report on Form 10-K. |
| Going Concern, Liquidity and Management’s Plans | Going Concern, Liquidity and Management’s Plans
The Company has incurred recurring losses since inception, resulting in an accumulated deficit of approximately $44.5 million as of June 30, 2026. Cash flows used in operating activities were approximately $1.2 million for the six months ended June 30, 2026. As of June 30, 2026, the Company had cash and cash equivalents of approximately $0.3 million and a working capital deficit of approximately $15.5 million, which includes the reclassification of the Company’s long-term debt to current liabilities as a result of the events of default described below.
The working capital deficit, limited liquidity and maturity of the Company’s secured notes raise substantial doubt about the Company’s ability to continue as a going concern for a period of at least twelve months from the date these condensed consolidated financial statements are issued. On April 21, 2026, the Company received a Notice of Default, Reservation of Rights and Notice of Termination relating to the Notes. The Notice advises that, upon the occurrence of an event of default, the holders of the Notes may exercise various remedies available under the Notes and applicable law, including acceleration of the outstanding indebtedness and foreclosure upon the collateral securing the Notes. Although the holders of the Notes had not accelerated the indebtedness or exercised their foreclosure remedies as of June 30, 2026, the Company could provide no assurance that such remedies would not be exercised in the future.
Subsequent to June 30, 2026, the Company consummated the Reorganization under the Reorganization Agreement pursuant to Section 272(b) of the Delaware General Corporation Law (“DGCL”). Pursuant to the Reorganization Agreement, the Company transferred its ownership interest in SpringBig, Inc. to LS Round II, LLC in lieu of the exercise of other secured creditor remedies. In connection with the transaction, the Company was released from all of its obligations under the Notes, representing approximately $12.5 million of principal and accrued interest, while SpringBig, Inc. assumed the remaining obligations under the related financing agreements. As a result of the Reorganization, the Company no longer owns the business previously conducted through SpringBig, Inc. Management is currently evaluating strategic alternatives, including one or more potential business combinations or other strategic transactions. If the Company is unable to consummate such a transaction, however, the Company will likely liquidate and wind up its affairs. There can be no assurance that the Company will successfully complete any such transaction or that these actions will be sufficient to alleviate the conditions giving rise to substantial doubt about the Company’s ability to continue as a going concern.
The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the ordinary course of business. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
| Foreign Currency | 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. |
| Goodwill | Goodwill
Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations. Goodwill is not amortized, but is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the carrying value may not be recoverable. The Company recorded approximately $17,000 of Goodwill in relation to the ViceCRM acquisition during the year ended December 31, 2025. impairment was recognized during the six months ended June 30, 2026. |
| Use of Estimates | 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 has 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, and allowance for credit losses have the greatest potential impact on our consolidated financial statements. Therefore, the Company considers the policies related to these financial areas to be critical accounting policies.
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 | 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 one operating and reportable segment in accordance with Accounting Standards Codification (“ASC”) 280, Segment Reporting. |
| Fair Value of Financial Instruments | 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 | 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 requires 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 one customer representing 20% of total revenues for the six months ended June 30, 2026, and one customer represented more than 17% of total revenues for the six months ended June 30, 2025.
At June 30, 2026, the Company had two customers representing 35% of accounts receivable and one customer represented 32% of accounts receivable at December 31, 2025.
The Company had one vendor representing 93% of cost of goods sold for the six months ended June 30, 2026, and the same vendor represented 90% of cost of goods sold for the six months ended June 30, 2025.
The Company had two vendors representing 53% of accounts payable as of June 30, 2026. At December 31, 2025, two vendors represented 74% of accounts payable. |
| Deferred Financing Costs | Deferred Financing Costs
On January 23, 2024, the Company issued $6.4 million aggregate principal amount of 2024 Secured Convertible Notes and $1.6 million aggregate principal amount of 2024 Secured Term Notes. See Note 6. The expenses directly related to issuance of this debt, including investment bank advisory fees, legal fees and other advisory fees, have been deferred and will be expensed over the three-year term of the debt up to January 2027. |
| Cash and Cash Equivalents | 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 cash equivalents as of June 30, 2026, and December 31, 2025.
As of June 30, 2026, the Company exceeded the federally insured limits of $250,000 for interest and non-interest-bearing deposits. We monitor the financial condition of such institution and have not experienced any losses associated with these accounts. |
| Accounts Receivable, Net & Allowance for Credit Losses | 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. |