AiAdvertising, Inc. filed its quarterly report for the period ended March 31, 2024, reporting a net loss of $[amount] and a comprehensive loss of $[amount]. The company’s total assets decreased to $[amount] from $[amount] at the end of the previous quarter, while its total liabilities increased to $[amount] from $[amount]. The company’s cash and cash equivalents decreased to $[amount] from $[amount]. The report also includes the company’s condensed consolidated balance sheets, statements of operations, and statements of cash flows for the three months ended March 31, 2024 and 2023.
Overview
AiAdvertising’s primary focus is to disrupt the digital advertising world by offering a solution that harnesses the power of artificial intelligence (AI) to enable marketers to increase productivity, efficiency, and performance.
Critical Accounting Policies
The company’s discussion and analysis of its financial condition and results of operations are based on its financial statements, which are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses, as well as the disclosure of contingent assets and liabilities. The company’s critical accounting policies include:
Revenue Recognition:
Accounts Receivable:
Impairment of Long-Lived Assets:
Indefinite-Lived Intangibles and Goodwill:
Business Combinations:
Fair Value of Financial Instruments:
Recent Developments
The company filed a Certificate of Amendment to increase the authorized shares of its Series I Preferred Stock from 3,000,000 to 3,400,000.
Results of Operations
Revenue for Q1 2024 decreased 7.1% to $2,019,323 compared to Q1 2023, due to declines in Digital Marketing and Web Development, partially offset by increases in Creative Services and Platform revenue.
Cost of revenue increased 8.4% to $1,795,273, primarily due to higher purchased media costs in digital marketing.
Selling, general and administrative expenses increased 47.2% to $2,064,657, driven by higher advertising, promotion, research and development, and cloud-based tool costs.
The company recorded a $20,202 impairment of intangible assets related to a domain name it decided not to renew.
Net loss for Q1 2024 was $1,860,809, up from $883,288 in Q1 2023, due to the increases in cost of revenue and SG&A expenses.
Liquidity and Capital Resources
As of March 31, 2024, the company had a working capital deficit of $50,160, compared to a deficit of $1,493,314 at the end of 2023.
Cash used in operating activities was $1,423,004 in Q1 2024, up from $611,081 in Q1 2023, primarily due to the increased net loss, faster payment of vendor invoices, and reduced customer deposits.
Financing activities provided $2,500,000 in Q1 2024, up from $556,006 in Q1 2023, mainly from the $2,500,000 received for the Series I preferred stock issuance.
The company has negative monthly cash flows of around $200,000 and its current cash is not sufficient to sustain operations for 12 months without additional borrowing or stock sales. The company plans to raise more capital from existing and new investors, as well as generate future revenue, to fund its operations and development.