0001805833FALSE4235 Redwood AvenueMarina Del ReyCalifornia00018058332023-11-302023-11-300001805833us-gaap:CommonStockMember2023-07-032023-07-030001805833sst:RedeemableWarrantsMember2023-07-032023-07-03

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 4, 2023
System1, Inc.
(Exact name of registrant as specified in its charter)
Delaware001-3933192-3978051
(State or other jurisdiction of incorporation or organization)
(Commission File Number)
(I.R.S. Employer Identification Number)
4235 Redwood Avenue
Marina Del Rey, California
90066
(Address of principal executive offices)
(Zip Code)

(310) 924-6037
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Class A Common Stock, $0.0001 par value per shareSSTNew York Stock Exchange
Redeemable warrants, each whole warrant exercisable for one Class A Common Stock share at an exercise price of $11.50 per shareSST.WSNew York Stock Exchange
1

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 7.01 - Regulation FD Disclosure
On December 4, 2023, System1, Inc. (the “Company”) posted supplemental financial information for its quarter ended September 30, 2023 on the Company’s website at https://ir.system1.com. A copy of the supplemental financial information is furnished herewith as Exhibit 99.1.

The Company’s website and the information contained on, or that can be accessed through, the Company’s website will not be deemed to be incorporated by reference in, and are not considered part of, this Current Report.

The foregoing supplemental financial information and related information (including the exhibit set forth in Item 9.01 hereto) in this Item 7.01 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, except as expressly set forth by specific reference in such a filing. This Current Report will not be deemed an admission as to the materiality of any information in this Current Report that is required to be disclosed solely by Regulation FD.


Item 9.01 - Financial Statements and Exhibits
(d) Exhibits.
2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

System1, Inc.
Date:December 4, 2023
By:
/s/ Tridivesh Kidambi
Name:
Tridivesh Kidambi
Title:
Chief Financial Officer

3
System1, Inc./S1 Holdco LLC Pro Forma for Disposition of Total Security Limited Unaudited Statements of Operations System1, Inc. System1, Inc. System1, Inc. System1, Inc. System1, Inc. System1, Inc. System1, Inc. S1 Holdco LLC S1 Holdco LLC S1 Holdco LLC S1 Holdco LLC S1 Holdco LLC System1, Inc. System1, Inc. Successor + Predecessor Total Successor + Predecessor Total Successor + Predecessor Total S1 Holdco LLC S1 Holdco LLC S1 Holdco LLC (in thousands) QTD QTD QTD QTD QTD QTD Sucessor Period Predecessor Period QTD QTD QTD QTD YTD YTD YTD YTD YTD YTD YTD YTD 30-Sep-23 30-Jun-23 31-Mar-23 31-Dec-22 30-Sep-22 30-Jun-22 1.27.22 - 3.31.22 1.1.22 - 1.26.22 31-Dec-21 30-Sep-21 30-Jun-21 31-Mar-21 30-Sep-23 30-Jun-23 31-Dec-22 30-Sep-22 30-Jun-22 31-Dec-21 30-Sep-21 30-Jun-21 Revenue 87,818 96,914 121,119 140,071 156,895 177,029 138,234 52,712 199,803 171,445 169,579 147,561 305,851 218,033 664,941 524,870 367,975 688,389 488,586 317,140 Operating cost and expenses: Cost of revenues 50,584 56,656 82,953 97,145 111,217 128,507 101,970 41,507 155,276 128,885 126,167 110,785 190,194 139,610 480,346 383,201 271,984 521,113 365,837 236,952 Salaries, commissions, and benefits 26,689 27,944 27,851 28,632 30,270 29,151 46,919 31,181 18,715 15,139 17,698 15,195 82,484 55,795 166,153 137,521 107,251 66,747 48,032 32,893 Selling, general, and administrative 11,808 15,340 14,855 13,869 11,572 12,984 12,407 15,665 14,650 7,936 6,277 6,950 42,004 30,195 66,496 52,628 41,056 35,813 21,163 13,227 Depreciation and amortization 19,585 19,689 19,393 19,102 18,924 18,827 12,618 1,000 3,625 3,459 3,112 3,689 58,666 39,081 70,471 51,370 32,446 13,885 10,260 6,801 Impairment of goodwill - - - 26,200 340,109 - - - - - - - - - 366,309 340,109 - - - - Total operating costs and expenses 108,667 119,629 145,052 184,947 512,092 189,470 173,914 89,353 192,266 155,419 153,254 136,619 373,348 264,681 1,149,775 964,828 452,736 637,558 445,292 289,873 Operating income (20,849) (22,715) (23,933) (44,876) (355,197) (12,440) (35,680) (36,641) 7,537 16,026 16,325 10,942 (67,497) (46,648) (484,834) (439,958) (84,761) 50,831 43,294 27,267 Loss (gain) on Fair Value of Warrants (7,482) 2,018 (1,409) (10,360) 4,489 (4,139) 13,761 - - - - - (6,873) 609 3,751 14,111 9,622 - - - Loss on Extinguishment of Holdback 619 - - - - - - - - - - - 619 - - - - - - - Interest expense 13,053 12,334 11,402 9,872 9,733 7,200 5,054 1,049 4,162 4,184 4,476 4,048 36,789 23,736 32,908 23,036 13,303 16,870 12,708 8,524 Income (loss) from continuing operations before income tax (27,039) (37,066) (33,927) (44,388) (369,419) (15,501) (54,495) (37,690) 3,375 11,842 11,849 6,894 (98,032) (70,993) (521,493) (477,105) (107,686) 33,961 30,586 18,743 Income tax expense (920) (6,374) (3,333) (14,089) (69,796) 494 (15,039) (629) 262 475 77 151 (10,627) (9,707) (99,059) (84,970) (15,174) 965 703 228 Net income (loss) from continuing operations (26,119) (30,692) (30,594) (30,299) (299,623) (15,995) (39,456) (37,061) 3,113 11,367 11,772 6,743 (87,405) (61,286) (422,434) (392,135) (92,512) 32,996 29,883 18,515 Net Income (Loss) Attributable to Noncontrolling Interest (31,894) (8,947) (9,174) (18,264) (72,002) (8,107) (7,309) - - - - - (50,015) (18,121) (105,682) (87,418) (15,416) - - - Gain (loss) from discontinued operations, net of taxes (137,207) (13,484) (12,533) (20,858) (14,077) (17,850) (3,923) - - - - - (163,224) (26,017) (56,708) (35,850) (21,773) - - - Net income (131,432) (35,229) (33,953) (32,893) (241,698) (25,738) (36,070) (37,061) 3,113 11,367 11,772 6,743 (200,614) (69,182) (373,460) (340,567) (98,869) 32,996 29,883 18,515

 
System1, Inc./S1 Holdco LLC Pro Forma for Disposition of Total Security Limited Non-GAAP Financials System1, Inc. System1, Inc. System1, Inc. System1, Inc. System1, Inc. System1, Inc. System1, Inc. S1 Holdco LLC S1 Holdco LLC S1 Holdco LLC S1 Holdco LLC S1 Holdco LLC System1, Inc. System1, Inc. Successor + Predecessor Total Successor + Predecessor Total Successor + Predecessor Total S1 Holdco LLC S1 Holdco LLC S1 Holdco LLC (in thousands) Sucessor Period Sucessor Period Sucessor Period Sucessor Period Sucessor Period Sucessor Period Sucessor Period Predecessor Period QTD QTD QTD QTD YTD YTD YTD YTD YTD YTD YTD YTD 30-Sep-23 30-Jun-23 31-Mar-23 31-Dec-22 30-Sep-22 30-Jun-22 1.27.22 - 3.31.22 1.1.22 - 1.26.22 31-Dec-21 30-Sep-21 30-Jun-21 31-Mar-21 30-Sep-23 30-Jun-23 31-Dec-22 30-Sep-22 30-Jun-22 31-Dec-21 30-Sep-21 30-Jun-21 Net income (loss) from continuing operations (26,119)$ (30,692)$ (30,594)$ (30,299)$ (299,623)$ (15,995)$ (39,456)$ (37,061)$ 3,113$ 11,367$ 11,772$ 6,743$ (87,405)$ (61,286)$ (422,434)$ (392,135)$ (92,512)$ 32,996$ 29,883$ 18,515$ Income tax expense (920) (6,374) (3,333) (14,089) (69,796) 494 (15,039) (629) 262 475 77 151 (10,627) (9,707) (99,059) (84,970) (15,174) 965 703 228 Interest expense 13,053 12,334 11,402 9,872 9,733 7,200 5,054 1,049 4,162 4,185 4,476 4,048 36,789 23,736 32,908 23,036 13,303 16,871 12,709 8,524 Depreciation & amortization 19,585 19,689 19,393 19,102 18,924 18,827 12,618 1,000 3,625 3,458 3,113 3,689 58,666 39,081 70,471 51,370 32,446 13,884 10,259 6,801 Impairment of goodwill - - - 26,200 340,109 - - - - - - - - - 366,309 340,109 - - - - Other income/expense (1) 639 271 (65) 1,280 (400) (68) 228 (61) 70 (25) 18 84 845 206 978 (301) 98 147 76 102 Stock-based compensation and distributions to Members (2) 5,261 4,294 5,635 (3,796) (14,803) 6,786 32,343 23,362 3,458 673 3,342 2,118 15,190 9,929 43,892 47,688 62,491 9,591 6,133 5,460 Protected.net acquisition bonus accrual - - - 10,477 22,620 - - - 0 0 0 0 - - 33,097 22,620 - - - - Revaluation of non-cash warrant liability (7,482) 2,018 (1,409) (10,360) 4,489 (4,139) 13,761 - - - - - (6,873) 609 3,751 14,111 9,622 - - - Loss on Extinguishment of Holdback 619 - - - - - - - - - - - 619 - - - - - - - Costs related to acquisitions/business combinations 1,710 3,479 3,371 4,149 4,021 5,102 9,660 13,153 7,970 2,755 623 1,484 8,560 6,850 36,084 31,935 27,914 12,833 4,862 2,108 Acquisition earnout - - - - 22 72 269 9 32 31 32 63 - - 372 372 350 158 126 95 Severance costs 1,760 1,004 587 1,759 475 153 206 - 3 118 164 330 3,351 1,591 2,593 834 359 615 612 494 Other costs, including restructuring - 83 167 118 - 200 - - 0 8 98 99 250 250 318 200 200 206 205 197 Adjusted EBITDA 8,105$ 6,105$ 5,154$ 14,413$ 15,772$ 18,631$ 19,644$ 822$ 22,696$ 23,046$ 23,715$ 18,809$ 19,365$ 11,259$ 69,281$ 54,868$ 39,097$ 88,265$ 65,569$ 42,524$ (1) Non-cash adjustments related to foreign exchange and asset disposals (2) Comprised of distributions to equity holders and non-cash stock-based compensation

 
Non-Financial Metrcis (In thousands except ratios) QTD QTD QTD QTD QTD QTD QTD QTD QTD QTD QTD YTD YTD YTD YTD YTD YTD YTD YTD O&O Advertising 30-Sep-23 30-Jun-23 31-Mar-23 31-Dec-22 30-Sep-22 30-Jun-22 31-Mar-22 31-Dec-21 30-Sep-21 30-Jun-21 31-Mar-21 30-Sep-23 30-Jun-23 31-Dec-22 30-Sep-22 30-Jun-22 31-Dec-21 30-Sep-21 30-Jun-21 Revenue 66,186$ 77,300$ 106,025$ 127,867$ 143,600$ 157,952$ 176,133$ 190,035$ 162,606$ 160,817$ 139,426$ 249,512$ 183,325$ 605,552$ 477,686$ 334,085$ 652,884$ 462,848$ 300,242$ Advertising Spend (1) 42,301$ 49,711$ 76,186$ 92,785$ 106,340$ 121,153$ 137,948$ 152,653$ 126,404$ 123,244$ 107,298$ 168,198$ 125,897$ 458,225$ 365,440$ 259,100$ 509,599$ 356,946$ 230,542$ Revenue less Advertising Spend and Agency Fees 23,886$ 27,589$ 29,839$ 35,082$ 37,261$ 36,799$ 38,186$ 37,383$ 36,202$ 37,572$ 32,128$ 81,314$ 57,428$ 147,328$ 112,246$ 74,985$ 143,284$ 105,902$ 69,700$ O&O Sessions (2) 921,512 819,813 1,026,262 1,042,908 1,077,915 1,012,761 975,025 999,975 859,392 766,293 741,122 2,767,587 1,846,075 4,108,610 3,065,702 1,987,786 3,366,783 2,366,807 1,507,415 O&O CPS (3) 0.05$ 0.06$ 0.07$ 0.09$ 0.10$ 0.12$ 0.14$ 0.15$ 0.15$ 0.16$ 0.14$ 0.06$ 0.07$ 0.11$ 0.12$ 0.13$ 0.15$ 0.15$ 0.15$ O&O RPS (4) 0.07$ 0.09$ 0.10$ 0.12$ 0.13$ 0.16$ 0.18$ 0.19$ 0.19$ 0.21$ 0.19$ 0.09$ 0.10$ 0.15$ 0.16$ 0.17$ 0.19$ 0.20$ 0.20$ Spread 56% 55% 39% 38% 35% 30% 28% 24% 29% 30% 30% 48% 46% 32% 31% 29% 28% 30% 30% Partner Network Revenue 21,632$ 19,614$ 15,093$ 12,204$ 13,295$ 19,077$ 14,812$ 9,768$ 8,840$ 8,763$ 8,135$ 56,339$ 34,708$ 59,389$ 47,185$ 33,890$ 35,505$ 25,738$ 16,898$ Agency Fees (5) 6,320$ 4,806$ 4,876$ 2,535$ 2,994$ 5,170$ 3,387$ -$ -$ -$ -$ 16,003$ 9,683$ 14,087$ 11,551$ 8,557$ -$ -$ -$ Revenue less Advertising Spend and Agency fees 15,312$ 14,808$ 10,217$ 9,669$ 10,301$ 13,908$ 11,425$ 9,768$ 8,840$ 8,763$ 8,135$ 40,337$ 25,025$ 45,302$ 35,633$ 25,333$ 35,505$ 25,738$ 16,898$ Network Sessions (6) 858,619 676,763 448,287 375,605 364,196 361,432 308,805 289,331 297,142 321,934 338,960 1,983,669 1,125,049 1,410,037 1,034,433 670,237 1,247,366$ 958,035 660,894 Network CPS (7) 0.01$ 0.01$ 0.01$ 0.01$ 0.01$ 0.01$ 0.01$ -$ -$ -$ -$ 0.01$ 0.01$ 0.01$ 0.01$ 0.01$ -$ -$ -$ Network RPS (8) 0.03$ 0.03$ 0.03$ 0.03$ 0.04$ 0.05$ 0.05$ 0.03$ 0.03$ 0.03$ 0.02$ 0.03$ 0.03$ 0.04$ 0.05$ 0.05$ 0.03$ 0.03$ 0.03$ (1) Advertising spend is the amount of advertising that is spent to acquire traffic to Owned & Operated websites (2) O&O sessions are the total number of monetizable user visits to Owned & Operated websites (3) CPS is advertising spend divided by O&O Sessions (4) RPS is O&O Revenue divided by O&O Sessions (5) Agency fees are the amount of costs for agencies acquiring traffic to Owned & Operated websites (6) Network sessions are the number of monetizable user visits delivered by network partners to RAMP (7) CPS is agency fees divided by Network Sessions (8) RPS is Partner Network revenue divided by Network Sessions

 
v3.23.3
Cover
Nov. 30, 2023
Jul. 03, 2023
Document Information [Line Items]    
Document Type 8-K  
Document Period End Date Dec. 04, 2023  
Entity Registrant Name System1, Inc.  
Entity Incorporation, State or Country Code DE  
Entity File Number 001-39331  
Entity Tax Identification Number 92-3978051  
Entity Address, Address Line One 4235 Redwood Avenue  
Entity Address, City or Town Marina Del Rey  
Entity Address, State or Province CA  
Entity Address, Postal Zip Code 90066  
City Area Code 310  
Local Phone Number 924-6037  
Written Communications false  
Soliciting Material false  
Pre-commencement Tender Offer false  
Pre-commencement Issuer Tender Offer false  
Entity Emerging Growth Company true  
Entity Ex Transition Period false  
Entity Central Index Key 0001805833  
Amendment Flag false  
Class A Common Stock, $0.0001 par value per share    
Document Information [Line Items]    
Title of 12(b) Security   Class A Common Stock, $0.0001 par value per share
Trading Symbol   SST
Security Exchange Name   NYSE
Redeemable warrants, each whole warrant exercisable for one Class A Common Stock share at an exercise price of $11.50 per share    
Document Information [Line Items]    
Title of 12(b) Security   Redeemable warrants, each whole warrant exercisable for one Class A Common Stock share at an exercise price of $11.50 per share
Trading Symbol   SST.WS
Security Exchange Name   NYSE
System1 (NYSE:SST)
Gráfica de Acción Histórica
De Abr 2024 a May 2024 Haga Click aquí para más Gráficas System1.
System1 (NYSE:SST)
Gráfica de Acción Histórica
De May 2023 a May 2024 Haga Click aquí para más Gráficas System1.