Collective Audience Reports $10.57 Million Net Loss in Q3 2024 Amid Revenue Decline

Collective Audience, Inc. reported a net loss of $10.57 million for the third quarter of 2024, a significant increase from a loss of $1.70 million in the same period last year. Revenue for the quarter was $3.13 million, down 4.2% from $3.27 million in Q3 2023. For the nine months ending September 30, 2024, the company recorded a total revenue of $3.13 million, a stark decline from $11.66 million in the previous year. The decrease in revenue is attributed to strategic shifts following the acquisitions of DSL Digital, LLC and BeOp, which have altered the company's operational focus.

The company's financial position has also changed markedly, with total assets dropping to $7.98 million from $12.23 million at the end of 2023. This decline is primarily due to a significant impairment charge of $10.48 million related to intangible assets, which has contributed to an accumulated deficit of $53.69 million. Current liabilities surged to $9.10 million, up from $5.39 million at the end of 2023, reflecting increased operational costs and obligations following the acquisitions.

In terms of strategic developments, Collective Audience completed the acquisition of BeOp on August 1, 2024, which is expected to enhance its capabilities in performance advertising and consumer data management. The acquisition involved issuing 3,006,667 shares of common stock valued at approximately $1.35 million. Additionally, the company acquired DSL Digital, LLC on June 28, 2024, further expanding its market presence and operational capacity. These acquisitions are part of a broader strategy to strengthen the company's position in the digital marketing landscape.

Operationally, the company has seen a notable increase in general and administrative expenses, which rose by 90% to $2.51 million in Q3 2024, primarily due to legal costs and payroll expenses associated with the new acquisitions. The total employee headcount has not been disclosed, but the company is actively integrating the operations of its new subsidiaries. As of September 30, 2024, cash and cash equivalents stood at $568,607, down from $612,183 at the end of 2023, indicating liquidity challenges as the company navigates its post-acquisition integration phase.

Looking ahead, Collective Audience faces substantial liquidity concerns, with a working capital deficiency of $5.42 million. The company is exploring financing options, including a potential $30 million capital raise to support its operations and growth initiatives. However, management has expressed uncertainty about its ability to secure necessary funding, which raises doubts about the company's ability to continue as a going concern. The financial statements have been prepared under the assumption that the company will continue its operations, but this outlook is contingent on successful capital raising efforts and operational adjustments in response to market conditions.