SBIG.OQBSpringbig Holdings, INC
10-K/A: SpringBig Holdings Files Amendment No. 1 to Form 10-K, Addressing Part III Information and Executive Departures
Sentiment:
Form 10-K/A (Amendment No. 1)
SpringBig Holdings files an amendment to its annual report to include Part III information, covering directors, executive officers, governance, and executive compensation, while also announcing the upcoming departures of its CEO and CFO.
Summary
- SpringBig Holdings, Inc. filed Amendment No. 1 to its Annual Report on Form 10-K for the year ended December 31, 2023.
- The amendment primarily addresses the information required in Part III of Form 10-K, including details about directors, executive officers, corporate governance, executive compensation, security ownership, related transactions, and principal accountant fees.
- The company's common stock began trading on the OTCQX Best Market under the symbol SBIG on September 6, 2023, after being delisted from the Nasdaq.
- Jeffrey Harris, the CEO, will separate from his position, with his last day of service being no later than March 31, 2025, and will receive a consulting fee of $450,000 over 18 months.
- Paul Sykes, the CFO, will also separate from his position, with his last day of service being June 14, 2025, and will receive a bonus of $227,500.05 paid in semi-monthly installments.
- The Board of Directors consists of five members: Jeffrey Harris, Matt Sacks, Sergey Sherman, Marc Shiffman, and Mark Silver.
- The company's audit committee consists of Marc Shiffman and Sergey Sherman.
- In January 2024, SpringBig issued $6.4 million of 8% Senior Secured Convertible Promissory Notes and $1.6 million of 12% Senior Secured Term Promissory Notes.
- The aggregate market value of voting and non-voting common equity held by non-affiliates on June 30, 2023, was $18.2 million.
- As of March 27, 2024, there were 45,594,864 shares of common stock outstanding.
Sentiment
Score: 5
Explanation: The sentiment is neutral. While there are executive departures and a delisting from Nasdaq, the company is taking steps to address these issues and has secured financing.
Positives
- The company is actively searching for new CEO and CFO candidates to lead the company.
- The company has a diverse board of directors with experience in technology, finance, and the cannabis industry.
- The company has secured financing through the issuance of convertible and term notes.
Negatives
- The company's common stock was delisted from the Nasdaq and is now trading on the OTCQX Best Market.
- The CEO and CFO are both separating from their positions.
- The company has incurred losses in the past, as indicated by the need for financing.
Risks
- The company's ability to find suitable replacements for the CEO and CFO positions.
- The company's ability to regain compliance with Nasdaq listing requirements in the future.
- The company's ability to generate sufficient revenue and cash flow to meet its debt obligations.
- The company's reliance on key personnel and the potential disruption caused by their departure.
Future Outlook
The company is searching for new CEO and CFO candidates. Jeffrey Harris will provide consulting services for 12 months after his separation. The company will continue to operate in the OTCQX Best Market.
Management Comments
- Lead independent director Marc Shiffman, on behalf of the Board, is spearheading a comprehensive search to identify, evaluate and recommend qualified candidates to serve as the Companys new Chief Executive Officer.
- Lead independent director Marc Shiffman, on behalf of the Board, is spearheading a comprehensive search to identify, evaluate and recommend qualified candidates to serve as the Companys new Chief Financial Officer.
Industry Context
The company operates in the cannabis and gaming industries, which are subject to evolving regulations and market dynamics. The company's focus on messaging tools for casinos, skilled gaming, and sports betting indicates a diversification strategy.
Comparison to Industry Standards
- It's difficult to compare SpringBig's performance directly to industry standards without specific financial data in this document.
- However, companies like Akerna Corp. and Weedmaps operate in the cannabis technology space and could be considered peers.
- In the gaming sector, companies like Everi Holdings and Scientific Games provide technology solutions to casinos and could be considered comparables for the gaming-related aspects of SpringBig's business.
- A thorough analysis would require comparing SpringBig's revenue growth, profitability, and market share to these and other relevant companies.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Board Member | Amanda Lannert | August 30, 2023 | Resignation | |
| Board Member | Steven Bernstein | August 31, 2023 | Resignation | |
| Board Member | Patricia Glassford | August 31, 2023 | Resignation | |
| Board Member | Phil Schwarz | Shawn Dym | January 23, 2024 | Resignation |
| Board Member | Jon Trauben | Matt Sacks | January 23, 2024 | Resignation |
| Board Member | Mark Silver | May 10, 2024 | Appointment | |
| Board Member | Shawn Dym | Marc Shiffman | September 23, 2024 | Resignation |
| CEO | Jeffrey Harris | March 31, 2025 | Separation | |
| CFO | Paul Sykes | June 14, 2025 | Separation |
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Board Committee | The Board abolished the Compensation Committee and the Nominating and Corporate Governance Committee following the suspension of the listing of its Common Stock and public warrants on Nasdaq. | September 1, 2023 | Reduced board oversight due to delisting. |
Related Party Transactions
- Certain immediate family members of Jeffrey Harris, SpringBigs chief executive officer and a member of SpringBigs Board of Directors, provide services to SpringBig as full-time employees for compensation.
- SpringBig has previously engaged InteQ to provide certain employee support and sharing, software development work and information technology services. SpringBigs Chief Executive Officer, Jeffrey Harris, founded InteQ and beneficially holds a controlling equity interest in such company.
- During the month ended September 30, 2023, SpringBigs CEO, Jeffrey Harris, loaned the Company $125,000 for use in operations.
- On the Notes Closing Date, the Company entered into a note purchase agreement (the Purchase Agreement) to sell up to (i) a total of $6.4 million of the Convertible Notes and (ii) a total of $1.6 million of the Term Notes in a private placement with the Purchasers, which included the following Company executive officers and directors that purchased on the same terms as all other Purchasers: Jeffrey Harris, Chief Executive Officer and Chairman, Paul Sykes, Chief Financial Officer, Jon Trauben, Director.
Stakeholder Impact
- Shareholders may be concerned about the delisting from Nasdaq and the executive departures.
- Employees may experience uncertainty due to the leadership changes.
- Customers may be affected if the company's operations are disrupted during the transition.
- Creditors may be concerned about the company's ability to meet its debt obligations.
Next Steps
- The company will continue its search for a new CEO and CFO.
- The company will file its Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
- The company will hold its annual meeting of shareholders.
Key Dates
| Date | Description |
|---|---|
| November 8, 2021 | Tuatara, Legacy SpringBig and certain stockholders and optionholders of Legacy SpringBig and Tuatara entered into voting and support agreements. |
| June 14, 2022 | Closing of the merger between SpringBig and Tuatara. |
| June 14, 2022 | SpringBig and certain holders entered in an amended and restated registration rights agreement. |
| June 9, 2022 | At the special meeting of stockholders of Tuatara held on June 9, 2022, the stockholders of Tuatara adopted and approved the Plan. |
| June 13, 2023 | At our Annual Meeting of Stockholders held on June 13, 2023, our stockholders approved an amendment to the Incentive Plan. |
| June 30, 2023 | The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant, based on the closing price of the shares of common stock on the Nasdaq Exchange on June 30, 2023, was $18.2 million. |
| August 30, 2023 | Amanda Lannert resigned as a member of the Board. |
| August 31, 2023 | Steven Bernstein and Patricia Glassford resigned as members of the Board. |
| September 1, 2023 | The Board determined that it would not be in the best interest of the Company or its shareholders to meet the continued listing requirements of the Nasdaq Capital Market. |
| September 5, 2023 | The Companys common stock and public warrants would be suspended at the open of business on September 5, 2023. |
| September 6, 2023 | Our Common Stock began trading on the OTCQX Best Market under its same trading symbol SBIG on September 6, 2023. |
| September 8, 2023 | Nasdaq would file a Form 25 Notification of Delisting with the Securities and Exchange Commission when all of its internal procedural periods have run, and such filing occurred on September 8, 2023. |
| September 23, 2024 | Mr. Dym resigned as a member of the Board and Marc Shiffman was appointed as a Class II director. |
| January 23, 2024 | SpringBig entered into a note purchase agreement pursuant to which it issued $6.4 million of 8% Senior Secured Convertible Promissory Notes due 2026 and $1.6 million of 12% Senior Secured Term Promissory Notes due 2026. |
| January 23, 2024 | Phil Schwarz and Jon Trauben resigned as members of the Board. |
| May 10, 2024 | The Board appointed Mark Silver as a Class I director of the Board. |
| March 27, 2024 | As of March 27, 2024, there were 45,594,864 shares of common stock, $0.0001 par value issued and outstanding. |
| April 1, 2024 | SpringBig previously filed its Annual Report on Form 10-K for the year ended December 31, 2023 (the Original Form 10-K) with the Securities and Exchange Commission (the SEC) on April 1, 2024. |
| January 15, 2025 | The Board and Mr. Harris reached an understanding regarding his decision to separate from the Company. |
| January 22, 2025 | SpringBig Holdings, Inc. reported that Jeffrey Harris has announced his intention to separate from his position as the Companys CEO and an employee of the Company. |
| January 22, 2025 | The Company reported that Paul Sykes has announced his intention to separate from his position as the Companys CFO and an employee of the Company. |
| January 29, 2025 | As of January 29, 2025, the Board comprised of Jeffrey Harris, Matt Sacks, Sergey Sherman, Marc Shiffman and Mark Silver. |
| March 5, 2025 | Date of certifications by the CEO and CFO. |
| March 31, 2025 | Latest possible date for Jeffrey Harris' last day of service as CEO. |
| June 14, 2025 | Paul Sykes' last day of service as CFO. |
| March 31, 2026 | Date for vesting of restricted stock units granted to Mr. Harris. |
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