Form 4: Phillip Frost Acquires $200,000 Convertible Note in Fluent, Inc.

Phillip Frost, a director and 10% owner of Fluent, Inc., acquired a $200,000 convertible subordinated promissory note that is convertible into common stock, subject to certain conditions and stockholder approval.

Summary

• On August 19, 2024, Phillip Frost acquired a Convertible Subordinated Promissory Note from Fluent, Inc. for $200,000.
• The note accrues interest at 13% per annum.
• The note is convertible into shares of Fluent's common stock at a conversion price that is the lesser of $3.01 or the greater of the closing bid price or $1.00, subject to adjustments.
• Conversion is subject to stockholder approval and certain limits until such approval is obtained, including a cap on the number of shares issued upon conversion of all August Notes to 19.99% of the Issuer's outstanding shares.
• The Issuer will seek stockholder approval for the note's conversion features.
• The securities are held by Frost Gamma Investments Trust, of which Phillip Frost M.D., is the trustee.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive. While the investment from a significant shareholder is a good sign, the conditions attached to the conversion and the need for stockholder approval introduce some uncertainty.

Positives

• Phillip Frost's investment signals confidence in Fluent, Inc.'s prospects.
• The 13% interest rate on the note provides a steady income stream.
• The potential for conversion into common stock offers upside potential if Fluent's stock price increases.

Negatives

• Conversion is subject to stockholder approval, which introduces uncertainty.
• Limits on conversion prior to stockholder approval may restrict the number of shares Frost can acquire initially.
• The conversion price is subject to adjustments, which could impact the value of the note.

Risks

• Failure to obtain stockholder approval could impact the conversion terms of the note.
• Fluctuations in Fluent's stock price could affect the value of the conversion option.
• The limits on conversion prior to stockholder approval could restrict the number of shares Frost can acquire initially.

Future Outlook

The Issuer has agreed to use its reasonable efforts to secure the Stockholder Approval, including providing a recommendation FOR approval by the Issuer's board of directors.

Industry Context

Convertible notes are a common financing tool, particularly for smaller companies seeking capital. The terms of the note, including the interest rate and conversion price, will be influenced by market conditions and the company's financial health.

Stakeholder Impact

• Shareholders: The investment could be viewed positively, but the potential dilution from conversion needs to be considered.
• Employees: The investment provides financial stability for the company.
• Customers: No direct impact.
• Suppliers: The investment ensures the company can meet its financial obligations.
• Creditors: The investment improves the company's creditworthiness.

Next Steps

• Fluent, Inc. will seek stockholder approval for the conversion features of the note.
• Holders of the August Notes will be permitted to vote on the Stockholder Approval.

Key Dates