10-Q: SpringBig Divests Operations Amid Financial Distress

SpringBig Holdings, Inc. reports significant revenue decline and operational restructuring, transferring its core business and facing potential liquidation.

Summary

• SpringBig Holdings, Inc. has undergone a significant reorganization, transferring its operating subsidiary, SpringBig, Inc., to LS Round II, LLC, in lieu of debt repayment.
• This transaction releases SpringBig Holdings from approximately $12.5 million in principal and accrued interest on its secured notes.
• The company's net revenues decreased by 24% year-over-year for the three months ended June 30, 2026, and by 13% for the six-month period.
• Operating expenses were reduced significantly, but the company reported a net loss of $2.35 million for the quarter and $2.85 million for the six months.
• The company is now evaluating strategic alternatives, with a high likelihood of liquidation if a suitable transaction is not consummated.
• Jason Moos has resigned as CFO and will provide transition services as an independent contractor through August 31, 2026, receiving transition payments.
• Andrew Jay Glashow was appointed as the new CEO on July 10, 2026, to lead the search for a strategic business combination.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this filing as highly negative due to the company's significant financial distress, ongoing default on debt, and the substantial reorganization that resulted in the divestiture of its core operating business, leaving it with limited assets and a focus on liquidation or a highly uncertain strategic transaction.

Positives

• The company has successfully divested its operating subsidiary, SpringBig, Inc., and been released from approximately $12.5 million in debt obligations.
• Significant reductions in operating expenses were achieved, with selling, servicing, and marketing expenses down 31% and general and administrative expenses down 58% year-over-year for the quarter.
• The company received $172,000 in cash consideration from the reorganization transaction.

Negatives

• Net revenues declined significantly, down 24% for the quarter and 13% for the six months, attributed to customer attrition and reduced messaging activity.
• Gross profit margin decreased from 74% to 65% for the quarter due to lower revenue and fixed messaging costs.
• The company reported a net loss of $2.35 million for the quarter and $2.85 million for the six months.
• As of June 30, 2026, the company had a working capital deficit of approximately $15.5 million.
• The company is in default on its secured notes, which led to the noteholders exercising remedies and control over SpringBig, Inc.
• The company's ability to continue as a going concern is in substantial doubt, with a high likelihood of liquidation if a strategic transaction is not completed.

Risks

• The company's ability to continue as a going concern is dependent on identifying and consummating a strategic business combination or other transaction; failure to do so will likely result in liquidation.
• The company has limited cash resources and may need to raise additional capital, which could be dilutive or contain restrictive covenants.
• There is a dispute regarding the issuance of 12,891,251 shares of restricted common stock to former CEO Jaret Christopher, which could materially increase outstanding shares and negatively impact the stock price if the company's position is incorrect.
• The company is subject to a civil investigative demand regarding its Paycheck Protection Program Loan, with a potential contingent loss of up to $1.6 million.
• The company's former business was heavily reliant on the cannabis industry, and while it has divested this operation, its future business will depend on the industry and regulatory environment of any new venture.

Future Outlook

The company has divested its operating business and is now evaluating strategic alternatives, including potential business combinations or other strategic transactions. If such a transaction cannot be consummated, the company will likely liquidate and wind up its affairs. The appointment of a new CEO is intended to lead efforts in identifying and consummating a strategic business combination.

Management Comments

• 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.
• The Company no longer owns the operating business previously conducted through SpringBig, Inc., and management is evaluating the impact of the transaction on our future operations, financial reporting and strategic alternatives.

Industry Context

StockSavvy.ai notes that SpringBig's divestiture of its core operating business and focus on strategic alternatives, potentially leading to liquidation, is a critical development. This move signals a significant pivot away from its previous market-leading software platform for loyalty and marketing automation in regulated industries, likely driven by severe financial distress and debt obligations.

Comparison to Industry Standards

• The company's revenue decline of 24% for the quarter and 13% for the six months is a significant underperformance compared to typical growth expectations for software-as-a-service (SaaS) companies, which often aim for double-digit annual growth.
• The substantial increase in interest expense due to default interest, from $0.3 million to $2.3 million for the quarter, highlights a severe financial strain, far exceeding industry norms for companies managing debt.
• The company's gross profit margin decline from 74% to 65% is concerning, as stable or improving gross margins are generally expected in the software industry, especially when managing fixed costs.
• The company's net loss widening to $2.35 million for the quarter and $2.85 million for the six months, coupled with a significant working capital deficit, indicates a critical financial situation not aligned with healthy industry players.

Management Changes

Legal Proceedings

• The company received a civil investigative demand from the United States Attorneys Office regarding its Paycheck Protection Program Loan, concerning its eligibility based on software products supporting marijuana use, with a potential contingent loss of up to $1.6 million.
• The company was in default under its 2024 Secured Convertible Notes and 2024 Secured Term Notes as of June 30, 2026, leading to the noteholders exercising remedies and control over SpringBig, Inc.

Related Party Transactions

• Two board members at December 31, 2025, were related parties to investors in the January 23, 2024, debt financing, with these investors purchasing $5.2 million of 2024 Secured Convertible Notes and $1.3 million of 2024 Secured Term Notes.
• Both board members related to these investors resigned on February 5, 2026.
• The company entered into a confidential settlement agreement with Mr. Harris in March 2026, with payments commencing April 1, 2026, but ceased in June 2026 due to a dispute, with the remaining balance written off.

Stakeholder Impact

• Shareholders face significant risk due to the company's financial distress, potential liquidation, and the ongoing dispute over restricted stock issuance.
• Creditors (noteholders) have exercised remedies due to default, leading to the divestiture of the operating business and a complex reorganization.
• Employees may be impacted by the potential liquidation of the company and the transition of key personnel.
• Vendors and suppliers may face uncertainty regarding future business and payments given the company's financial situation and potential wind-up.

Next Steps

• Evaluate strategic alternatives, including potential business combinations or other strategic transactions.
• If no strategic transaction is consummated, the company will likely liquidate and wind up its affairs.
• Andrew Jay Glashow will lead efforts to identify and consummate a strategic business combination.
• Jason Moos will provide transition and advisory assistance through August 31, 2026.

Key Dates

Recommendation

The company is in severe financial distress, has defaulted on its debt, divested its core operating business, and faces a high probability of liquidation. The ongoing legal dispute over shares and the lack of a clear path forward beyond strategic alternatives make the stock a highly speculative and risky investment.

Keywords

Reorganization, Debt Default, Liquidation, Strategic Transaction, Financial Distress, Revenue Decline, Loss from Operations, Going Concern