SCHEDULE 13D/A: Major Shareholder Ryan Schulke Boosts Stake in Fluent, Inc. to 21.1% Following Warrant Approvals

Ryan Schulke, a significant shareholder in Fluent, Inc., has increased his beneficial ownership to 21.1% of the company's common stock following the acquisition and recent stockholder approval of pre-funded warrants.

Summary

• Ryan Schulke, the reporting person, beneficially owns 4,934,295 shares of Fluent, Inc. common stock, representing 21.1% of the outstanding shares as of June 18, 2025.
• This ownership includes 2,827,831 shares held directly, shares held by various trusts and LLCs, 459,082 shares issuable from a convertible promissory note, and 1,041,123 shares issuable from pre-funded warrants.
• The pre-funded warrants, acquired by Schulke and The Schulke Inn Family Foundation Trust in December 2024 and March 2025, were approved by Fluent, Inc. stockholders at the Annual Meeting on June 18, 2025.
• The warrants are exercisable at $0.0005 per share and will terminate when exercised in full.
• Schulke may also be deemed to have shared voting control over an additional 6,787,063 shares held by Dr. Phillip Frost and Frost Gamma Investments Trust, potentially bringing his total beneficial ownership to 11,271,358 shares, or 48.1% of the outstanding common shares, due to a Stockholders' Agreement.

Sentiment

Score: 7

Explanation: The filing indicates a significant shareholder increasing their stake and successfully obtaining stockholder approval for warrant exercises, which generally signals confidence. However, the potential for dilution from warrant and note conversions, and the concentration of voting power, introduce some complexity.

Positives

• Stockholders approved the issuance and exercise of pre-funded warrants, allowing for the conversion of these instruments into common stock.
• Increased beneficial ownership by a significant shareholder (Ryan Schulke) demonstrates continued commitment and confidence in the company.
• The exercise price of the pre-funded warrants is very low ($0.0005 per share), indicating a favorable acquisition cost for the shareholder.

Negatives

• The conversion of notes and exercise of warrants will lead to dilution for existing shareholders as new shares are issued.
• The potential for Ryan Schulke to be deemed to have shared voting control over 48.1% of the outstanding shares, if combined with Frost Gamma's holdings, could indicate a significant concentration of voting power.

Risks

• The number of shares issuable upon conversion of the convertible subordinated promissory notes is subject to change based on the Issuer's common stock price, specifically tied to a conversion price that is the lesser of $3.01 or the greater of the consolidated closing bid price or $1.00.
• A significant portion of the Reporting Person's potential beneficial ownership is tied to shares held by Dr. Phillip Frost and Frost Gamma Investments Trust, which is contingent on a Stockholders' Agreement for shared voting control.
• Certain restricted stock units (RSUs) are fully vested but subject to deferred delivery, which could impact future share counts.

Future Outlook

The filing indicates that the pre-funded warrants will terminate when exercised in full, suggesting a future increase in the number of outstanding common shares as these warrants are converted. The conversion price of the promissory notes is subject to future market prices, which will determine the exact number of shares issued upon conversion.

Management Comments

• The Issuer was obligated to use its reasonable best efforts to obtain stockholder approval of the exercise of the Pre-Funded Warrants in accordance with the rules of the Nasdaq Stock Market at the next annual meeting of the Issuer's stockholders which was held on June 18, 2025.

Industry Context

This Schedule 13D filing primarily concerns changes in beneficial ownership and does not provide sufficient information to analyze broader industry trends or competitive positioning for Fluent, Inc. It reflects an individual shareholder's investment strategy and position within the company.

Corporate Governance

Related Party Transactions

• Acquisition of pre-funded warrants by The Schulke Inn Family Foundation Trust, of which Ryan Schulke is a Co-Trustee.
• Acquisition of pre-funded warrants directly by Ryan Schulke.
• Holdings by RSMC Partners, LLC, of which Ryan Schulke is a member.
• Holdings by The Ryan Schulke 2020 GRAT and The Ryan Schulke 2022 GRAT, of which Ryan Schulke is a Trustee.
• Convertible subordinated promissory note issued to Ryan Schulke.
• Stockholders' Agreement with Dr. Phillip Frost and Frost Gamma Investments Trust, where Dr. Frost and Frost Gamma agreed to vote in favor of Ryan Schulke's nominees.
• Convertible subordinated promissory note and warrant issued to Frost Gamma Investments Trust.

Stakeholder Impact

• Shareholders: Potential dilution from the exercise of pre-funded warrants and conversion of notes. Increased concentration of voting power by a significant shareholder and related parties.
• Management/Board: Ryan Schulke's increased stake and the Stockholders' Agreement with Frost Gamma could strengthen his influence on corporate governance and board composition.

Next Steps

• Exercise of the pre-funded warrants by Ryan Schulke and The Schulke Inn Family Foundation Trust.
• Conversion of the convertible subordinated promissory notes by Ryan Schulke and Frost Gamma Investments Trust into common stock.

Key Dates

Recommendation

Keywords

Fluent Inc., Ryan Schulke, Schedule 13D, Beneficial Ownership, Pre-Funded Warrants, Convertible Note, Stockholders' Agreement, Shareholder Stake, SEC Filing, FLNT