Fluent (FLNT) risk factors, FY2024 10-K

Risks Related to Our Financial Position

1. 01There is substantial doubt about our ability to continue as a going concern
2. 02Covenants in our SLR Credit Agreement impose restrictions that may limit our operating and financial flexibility

Risks Related to Our Industry

1. 03We operate in a competitive, rapidly changing industry, which makes it difficult to evaluate our business and prospects
2. 04We derive substantially all of our revenue from digital marketing services, which is an intensely competitive industry characterized by rapidly evolving industry standards, user and client demands, laws and regulations, and technology
3. 05A material percentage of our consolidated revenue is derived from gaming (apps) advertisers, so we are exposed to risks associated with the gaming industry in general
4. 06the introduction of legislation or other regulatory restrictions on gaming, such as restrictions addressing violence in video games and addiction to video games
5. 07Unfavorable publicity and negative public perception about our industry or us may damage our reputation, which could harm our business, financial condition, and results of operations
6. 08A sudden reduction in online marketing spend by our clients, a loss of clients or lower advertising yields may seriously harm our business
7. 09We are exposed to credit risk from our clients, and we may not be able to collect on amounts owed to us

Risks Related to Commerce Media Solutions Business

1. 10We are a relatively new entrant to the post-transaction commerce media business, which is currently dominated by a major player
2. 11We will need to continue to invest in technology for our Commerce Media Solutions business

Risks Related to Our Owned and Operated Media Properties

1. 12We are at a competitive disadvantage to other rewards sites because we are more selective in our traffic sources
2. 13A decline in the supply of media available to us through third parties or an increase in the price of this media could increase the cost of attracting consumers and reduce our profitability
3. 14More people are accessing content on their mobile devices through mobile applications, and we have not successfully deployed mobile app versions of our O&O Sites, which hinders our ability to remain competitive
4. 15Our use of CRM may be hindered, which in turn could harm our business
5. 16We have become increasingly reliant upon inbound calls, particularly in the Health Plan vertical, which we may be unable to obtain cost effectively obtain in the future

Other Business Risks

1. 17It may be difficult to effectively manage any future growth and scale our infrastructure and products quickly enough to meet the needs of our business while maintaining profitability
2. 18Economic or political instability could adversely affect our business, financial condition, and results of operations
3. 19Our international operations subject us to increased challenges and risks
4. 20Our evaluation of strategic alternatives could complicate operations, or could result in other harmful consequences that may adversely impact our business and results of operations
5. 21Our failure to recruit or the loss of management and highly trained and qualified personnel could adversely affect our business
6. 22We are dependent upon third-party service providers in our operations and may be adversely affected if any of their platforms malfunction

Risks Relating to Legal and Regulatory Matters

1. 23The regulatory landscape in which we and our clients operate is constantly evolving and subject to significant change
2. 24Our use of email marketing is subject to laws and rules in each of the jurisdictions in which we operate
3. 25In the last five years, for example, we have been involved in regulatory actions with the FTC and the PAAG and in numerous litigations and claims. Such actions have adversely impacted our results of operations and could adversely affect our future results of operations and financial position
4. 26Our business and the businesses of our advertiser clients may be subject to sales and use taxes and other taxes

Risks Relating to Data Security and Intellectual Property

1. 27Our actual or perceived failure to safeguard any personal information or user privacy could damage our reputation and results of operations
2. 28If we do not adequately protect our intellectual property rights, our competitive position and business may suffer
3. 29As a creator and a distributor of digital media content, we face liability and expenses for legal claims based on the nature and content of the materials that we create or distribute, including materials provided by third parties
4. 30Laws and regulations regarding privacy, data protection, and the handling of personal information are complex and continuously evolving, and could have a material adverse effect on our business, financial condition, and results of operations

Risks Related to Financial Matters

1. 31We may require additional capital in the future to pursue our business objectives and respond to business opportunities, challenges, or unforeseen circumstances, and such capital may not be available to us on acceptable terms, or at all
2. 32We have written down all of our goodwill from our prior acquisitions and could experience significant charges to our intangible assets, which may affect our results of operations in the future

Risks Related to Our Common Stock and the Securities Markets

1. 33Our stock price has been and may be volatile in the future, and as a result, investors in our securities could incur substantial losses
2. 34The concentration of our stock ownership presents risks, including lack of liquidity in the trading market for our common stock and limitations on any individual stockholder's ability to influence corporate matters
3. 35Future issuances of shares of our common stock could have a dilutive effect on your investment in us
4. 36We do not intend to pay cash dividends for the foreseeable future
5. 37We are a smaller reporting company and a non-accelerated filer, and we benefit from certain reduced governance and disclosure requirements, but we cannot be certain if the reduced disclosure requirements make our common stock less attractive to investors