Overview of Financial Performance

The company has experienced significant financial difficulties over the past year. As of June 30, 2023, the company had no cash and a working capital deficit of $13 million, compared to no cash and a $16.7 million working capital deficit at December 31, 2022. For the six months ended June 30, 2023, the company had a net loss of $11.8 million compared to a $5.1 million net loss for the same period in 2022.

The increase in net loss was primarily due to a $15.9 million loss on the disposition of assets related to the transfer of the company’s FCC licenses and broadcast television assets in February 2023. This loss was partially offset by a $6.7 million gain on discontinued operations resulting from the transfer of liabilities associated with those assets.

The company’s operating expenses also decreased significantly in the second quarter of 2023 as the company wound down operations due to lack of funds.

Revenue and Profit Trends

The company has not generated any revenue from its current operations over the past year. The company’s only revenue-generating operations were its broadcast television stations under Sovryn Holdings which were transferred in February 2023.

With minimal current operations, the company’s expenses primarily consist of interest expense, professional fees, and general administrative costs. Total operating expenses decreased from $5.5 million for the six months ended June 30, 2022 to $2.7 million for the same period in 2023. This decrease was driven by lower professional fees and interest expense in 2023.

Strengths and Weaknesses

The company’s current financial position reflects a lack of assets and significant liabilities. With the transfer of its revenue-generating broadcast television assets, the company lacks an ongoing source of revenue to fund operations and service debt.

The company’s primary asset is its business plan related to the development of a blockchain-based streaming video platform. However, the company lacks the capital and infrastructure to execute on this business plan currently.

In December 2023, the company held discussions about potentially continuing execution of its business plan. However, the company provided no guarantees on the timing or success of these efforts.

Future Outlook

The company’s ability to continue operations is entirely dependent on its ability to raise new capital and restructure or extend terms on its outstanding debt obligations.

As of June 30, 2023, the company was in default on $4.3 million of debt principal and interest. In late 2023 and early 2024, judgments totaling over $750,000 were issued against the company and its former CEO related to unpaid promissory notes.

With its current lack of assets and significant liabilities, the company’s future outlook remains highly uncertain. Any continuation of operations would require a major recapitalization and restructuring to resolve outstanding debts and fund business operations.

Absent a major change in financial position, the risk of insolvency and discontinuation of the business remains significant. The company provided no guarantees that its preliminary business discussions would result in the resumption of operations focused on development of a blockchain-based video platform.