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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2024

or
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For transition period from ______ to ______


Commission File Number 001-39331
System1, Inc.
(Exact name of registrant as specified in its charter)

Delaware
92-3978051
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
4235 Redwood Avenue
Los Angeles, CA
90066
(Address of Principal Executive Offices)
(Zip Code)
(310) 924-6037
(Registrant’s telephone number including area code)

Not applicable
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A common stock, par value $0.0001 per shareSSTThe New York Stock Exchange
Redeemable warrants, each whole warrant exercisable for one Class A common stock at an exercise price of $11.50 per shareSST.WSThe New York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days: Yes  ☒  No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  ☒  No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer☐
Accelerated filer
☒
Non-accelerated filer
☐
Smaller reporting company
☒
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.☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes  ☐  No ☒

As of October 31, 2024, there were 70,707,001 shares of Class A common stock, $0.0001 par value per share, outstanding and 21,203,676 shares issued and outstanding of Class C common stock, $0.0001 par value per share.


Table of Contents

Page
Item 1.
Item 1A.
Item 3.
Item 4.
Item 5.


PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)
System1, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except par value)
September 30, 2024December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents$69,092 $135,343 
Restricted cash, current4,129 3,813 
Accounts receivable, net57,602 56,093 
Prepaid expenses and other current assets4,382 6,754 
Total current assets135,205 202,003 
Restricted cash, non-current371 4,294 
Property and equipment, net2,431 3,084 
Internal-use software development costs, net14,230 11,425 
Intangible assets, net241,006 297,001 
Goodwill82,407 82,407 
Operating lease right-of-use assets3,298 4,732 
Other non-current assets365 524 
Total assets$479,313 $605,470 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$9,423 $9,499 
Accrued expenses and other current liabilities71,072 59,314 
Operating lease liabilities, current2,330 2,333 
Debt, net16,338 15,271 
Total current liabilities99,163 86,417 
Operating lease liabilities, non-current1,821 3,582 
Long-term debt, net259,236 334,232 
Warrant liability1,217 2,688 
Deferred tax liability6,726 8,307 
Other non-current liabilities8,304 929 
Total liabilities$376,467 $436,155 
Commitments and contingencies (Note 7)
Stockholder's Equity:
Class A common stock $0.0001 par value; 500,000 shares authorized, 70,460 and 65,855 Class A shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively
$7 $7 
Class C common stock $0.0001 par value; 25,000 shares authorized, 21,204 and 21,513 Class C shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively
2 2 
Additional paid-in capital858,740 843,112 
Accumulated deficit(768,174)(707,662)
Accumulated other comprehensive loss(262)(181)
Total stockholders' equity attributable to System1, Inc.90,313 135,278 
Non-controlling interest12,533 34,037 
Total stockholders' equity102,846 169,315 
Total liabilities and stockholders' equity$479,313 $605,470 
The accompanying notes are an integral part of these condensed consolidated financial statements.
1
System1, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
(In thousands, except for per share)


Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Revenue$88,832 $87,818 $268,330 $305,851 
Operating expenses:
Cost of revenue (excluding depreciation and amortization)51,171 50,585 160,667 190,195 
Salaries and benefits29,177 26,695 87,597 81,896 
Selling, general, and administrative10,172 11,808 36,889 42,004 
Depreciation and amortization20,128 19,584 59,875 58,666 
Total operating expenses110,648 108,672 345,028 372,761 
Operating loss(21,816)(20,854)(76,698)(66,910)
Other expense (income):
Interest expense, net7,957 13,053 23,798 36,789 
(Gain) loss from debt extinguishment— 619 (20,109)619 
Change in fair value of warrant liabilities281 (7,482)(1,471)(6,873)
Total other expense (income), net8,238 6,190 2,218 30,535 
Loss before income tax(30,054)(27,044)(78,916)(97,445)
Income tax expense (benefit)585 (1,116)359 (11,614)
Net loss from continuing operations(30,639)(25,928)(79,275)(85,831)
Net loss from discontinued operations, net of tax— (137,209)— (163,222)
Net loss(30,639)(163,137)(79,275)(249,053)
Less: Net loss from continuing operations attributable to non-controlling interest(7,037)(6,081)(18,763)(18,989)
Less: Net loss from discontinued operations attributable to non-controlling interest— (25,566)— (30,472)
Net loss attributable to System1, Inc.$(23,602)$(131,490)$(60,512)$(199,592)
Amounts attributable to System1, Inc.:
Net loss from continuing operations$(23,602)$(19,847)$(60,512)$(66,842)
Net loss from discontinued operations— (111,643)— (132,750)
Net loss attributable to System1, Inc.$(23,602)$(131,490)$(60,512)$(199,592)
Basic and diluted net loss per share:
Continuing operations$(0.34)$(0.21)$(0.88)$(0.71)
Discontinued operations— (1.18)— (1.42)
Basic and diluted net loss per share$(0.34)$(1.39)$(0.88)$(2.13)
Weighted average number of shares outstanding - basic and diluted70,045 94,359 69,073 93,649 

The accompanying notes are an integral part of these condensed consolidated financial statements
2
System1, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)
(In thousands)


Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Net loss$(30,639)$(163,137)$(79,275)$(249,053)
Other comprehensive (loss) income:
Foreign currency translation loss(44)(188)(275)(110)
Comprehensive loss(30,683)(163,325)(79,550)(249,163)
Comprehensive loss attributable to non-controlling interest(7,114)(31,685)(18,957)(49,465)
Comprehensive loss attributable to System1, Inc.$(23,569)$(131,640)$(60,593)$(199,698)

The accompanying notes are an integral part of these condensed consolidated financial statements.
3
System1, Inc. and Subsidiaries
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)
(In thousands)
Class A Common Stock
Class C Common Stock
Shares
Amount
Shares
Amount
Additional Paid-In-Capital
Accumulated Deficit
Accumulated Other Comprehensive Loss
Non-Controlling Interest
Total Stockholders’
Equity
Balance at December 31, 2023 65,855 $7 21,513 $2 $843,112 $(707,662)$(181)$34,037 $169,315 
Net loss— — — — — (10,537)— (3,254)(13,791)
Issuance of common stock in connection with settlement of incentive plan970 — — — 2,464 — — (757)1,707 
Conversion of Class C shares to Class A shares309 — (309)— 241 — — (241)— 
Tax receivable agreement liability and deferred taxes arising from LLC interest ownership exchanges and the issuance of common stock from equity incentive plans— — — — (110)— — — (110)
Issuance of restricted stock, net of forfeitures and shares withheld for taxes1,498 — — — 178 — — (1,169)(991)
Other comprehensive loss— — — — — — (90)(45)(135)
Stock-based compensation— — — — 4,317 — — 88 4,405 
Contributions from members, net of distributions— — — — — — — 5 5 
Balance at March 31, 202468,632 $7 21,204 $2 $850,202 $(718,199)$(271)$28,664 $160,405 
Net loss— — — — — (26,373)— (8,472)(34,845)
Issuance of restricted stock, net of forfeitures and shares withheld for taxes623 — — — 284 — — (308)(24)
Other comprehensive loss— — — — — — (24)(72)(96)
Stock-based compensation— — — — 3,784 — — 87 3,871 
Distributions to members— — — — — — — (32)(32)
Balance at June 30, 202469,255 $7 21,204 $2 $854,270 $(744,572)$(295)$19,867 $129,279 
Net loss— — — — — (23,602)— (7,037)(30,639)
Issuance of restricted stock, net of forfeitures and shares withheld for taxes1,205 — — — 288 — — (308)(20)
Other comprehensive loss— — — — — — 33 (77)(44)
Stock-based compensation— — — — 4,182 — — 88 4,270 
Balance at September 30, 202470,460 $7 21,204 $2 $858,740 $(768,174)$(262)$12,533 $102,846 
4
System1, Inc. and Subsidiaries
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)
(In thousands)
Class A Common Stock
Class C Common Stock
Shares
Amount
Shares
Amount
Additional Paid-In-Capital
Accumulated Deficit
Accumulated Other Comprehensive Loss
Non-Controlling Interest
Total Stockholders’
Equity
Balance at December 31, 202291,674 $9 21,747 $2 $831,566 $(439,296)$(260)$78,650 $470,671 
Net loss— — — — — (33,802)— (9,124)(42,926)
Cumulative-effect of adoption of ASU 2016-13— — — — — (326)— — (326)
Issuance of restricted stock, net of forfeitures and shares withheld for taxes832 — — — (1,449)— — (281)(1,730)
Issuance of common stock in connection with settlement of incentive plan407 — — — 1,819 — — (160)1,659 
Conversion of Class C shares to Class A shares234 — (234)— 1,047 — — (1,047)— 
Increase in tax receivable agreement liability— — — — (441)— — — (441)
Other comprehensive loss— — — — — — (62)(47)(109)
Stock-based compensation— — — — 6,203 — — 958 7,161 
Balance at March 31, 202393,147 $9 21,513 $2 $838,745 $(473,424)$(322)$68,949 $433,959 
Net loss— — — — — (34,301)— (8,690)(42,991)
Issuance of restricted stock, net of forfeitures and shares withheld for taxes455 — — — (133)— — (181)(314)
Other comprehensive income (loss)— — — — — — 208 (22)186 
Stock-based compensation— — — — 4,956 — — 615 5,571 
Balance at June 30, 202393,602 $9 21,513 $2 $843,568 $(507,725)$(114)$60,671 $396,411 
Net loss— — — — — (131,490)— (31,647)(163,137)
Issuance of restricted stock, net of forfeitures and shares withheld for taxes656 — — — 204 — — (258)(54)
Other comprehensive loss— — — — — — (165)(23)(188)
Stock-based compensation— — — — 6,493 — — 615 7,108 
Balance at September 30, 202394,258 $9 21,513 $2 $850,265 $(639,215)$(279)$29,358 $240,140 

The accompanying notes are an integral part of these condensed consolidated financial statements
5
System1, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
Nine Months Ended September 30,
20242023
Cash Flows from Operating Activities
Net loss$(79,275)$(249,053)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization59,877 85,364 
Stock-based compensation11,194 44,112 
Impairment of goodwill— 115,483 
Impairment of assets held for sale— 3,276 
Amortization of debt issuance costs2,966 4,663 
Noncash lease expense1,407 1,327 
Change in fair value of warrant liabilities(1,471)(6,873)
Deferred tax benefits(1,581)(19,385)
(Gain) loss from debt extinguishment(20,109)619 
Share-based compensation liabilities15,765 — 
Other, net(27)1,750 
Changes in operating assets and liabilities:
Accounts receivable(1,487)17,786 
Prepaid expenses and other current assets2,437 647 
Accounts payable(75)5,223 
Accrued expenses and other current liabilities5,671 (71)
Deferred revenue(91)12,746 
Long-term earnout liabilities— (20,000)
Other non-current liabilities(1,228)(3,522)
Net cash used in operating activities(6,027)(5,908)
Cash Flows from Investing Activities
Purchases of property and equipment(31)(2,015)
Capitalized software development costs(4,931)(4,844)
Net cash used in investing activities(4,962)(6,859)
Cash Flows from Financing Activities
Proceeds from related-party loan, net of lender fees — 63,000 
Repayments of related party loan, inclusive of lender fees — (44,000)
Repayment of Term Loan(56,786)(15,000)
Payment of acquisition holdback— (1,935)
Taxes paid related to net settlement of stock awards(2,137)(3,053)
Distributions to members, net of contributions(27)(66)
Net cash used in financing activities(58,950)(1,054)
Effect of exchange rate changes in cash, cash equivalents and restricted cash81 (231)
Net decrease in cash, cash equivalents and restricted cash(69,858)(14,052)
Cash and cash equivalents and restricted cash, beginning of the period143,450 39,075 
Cash and cash equivalents and restricted cash, end of the period$73,592 $25,023 
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets:
Cash and cash equivalents$69,092 $4,853 
Restricted cash4,500 7,779 
Cash and restricted cash included in assets held for sale from discontinued operations— 12,391 
Total cash, cash equivalents and restricted cash$73,592 $25,023 
Supplemental cash flow information:
Capitalized assets financed by accounts payable$— $53 
Stock-based compensation included in capitalized software development costs1,113 1,644 
Settlement of incentive plan through issuance of common stock1,707 1,658 
The accompanying notes are an integral part of these condensed consolidated financial statements
6
System1, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

1.Organization and Description of Business

System1, Inc. and subsidiaries (the "Company", "we", "our" or "us") operates an omnichannel customer acquisition platform, delivering high-intent customers to brands, advertisers and publishers.

We provide our omnichannel customer acquisition platform services through our proprietary responsive acquisition marketing platform ("RAMP"). Operating seamlessly across major advertising networks and advertising category verticals to acquire high-intent end-users, RAMP allows us to monetize these acquired end-users through our relationships with third party advertisers and advertising networks ("Advertising Partners"). RAMP operates across our network of owned and operated websites, allowing us to monetize end-user traffic that we source from various acquisition marketing channels, including Google, Facebook, Outbrain, and TikTok. RAMP also allows third party advertising platforms and publishers ("Network Partners") to send end-user traffic to, and monetize end-user traffic on, our owned and operated websites or through our monetization agreements.

We have two reportable segments: Owned and Operated Advertising and Partner Network (see Note 10, Segment Reporting).

On August 1, 2024, we undertook a corporate reorganization, the result of which was that all of the assets and business operations of the Company are now held by System1 Holdings, LLC ("System1 Holdings"), a newly formed intermediate holding company of which we maintain the controlling interest and in which the non-controlling interest is owned by the holders of our Class C common stock. Following the corporate reorganization, (a) System1 Holdings now owns 100% of S1 Holdco, LLC ("S1 Holdco"), the previous intermediate holding company with the non-controlling interest, and 100% of S1 Media, LLC ("S1 Media"), another new subsidiary formed in connection with the corporate reorganization, (b) S1 Media holds the assets and business operations associated with our owned and operated products, which includes CouponFollow, Startpage and Mapquest, and (c) S1 Holdco holds our remaining assets and business operations associated with our digital advertising businesses, including our proprietary RAMP platform. S1 Holdco and its subsidiaries remain obligors and guarantors under our Term Loan and 2022 Revolving Facility, and System1 Holdings and S1 Media are not parties thereto.

2.Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements and related disclosures are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") applicable to interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Our condensed consolidated financial statements include the accounts of the Company and our wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Our fiscal year ends on December 31, 2024. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as filed with the Securities and Exchange Commission on March 15, 2024.

In our opinion, the unaudited interim condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for the fair statement of our financial position, results of operations, and cash flows. The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2024 or future operating periods.

There have been no changes to our significant accounting policies described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 that have had a material impact on our condensed consolidated financial statements and related notes.

7
System1, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

We completed the sale of Total Security Limited, formerly known as Protected.net Group Limited ("Protected") on November 30, 2023. The results of operations of our Protected business are presented as net loss from discontinued operations in our condensed consolidated statements of operations in the periods applicable (see Note 12, Discontinued Operations).

Revision of Previously Issued Consolidated Financial Statements

During the fourth quarter of 2023, we identified certain errors related to our previously issued financial statements as of and for the three and nine months ended September 30, 2023 as follows:

a.Additional paid-in capital was understated by $0.9 million as of September 30, 2023, and salaries and benefits expense was understated by an immaterial amount for the three months ended September 30, 2023 and overstated by $0.6 million for the nine months ended September 30, 2023, as a result of not accelerating expenses upon the forfeiture of certain cash and equity Replacement Awards (as defined in Note 9, Net Loss Per Share) previously granted in 2022. This impacted the condensed consolidated balance sheet, condensed consolidated statements of operations, condensed consolidated statements of changes in stockholders' equity, and condensed consolidated statement of cash flows.

b.We did not appropriately account for changes in equity and earnings per share, specifically:
i.the carrying amount of non-controlling interest was not updated as changes in ownership events occurred during each reporting period;
ii.certain equity Replacement Awards granted during 2022 were not properly considered in the allocation of net income (loss) to controlling and non-controlling interest and earnings per share. These errors impacted the condensed consolidated balance sheets, condensed consolidated statement of operations, condensed consolidated statements of changes in stockholders' equity, and condensed consolidated statement of cash flows.

c.We made additional corrections for other immaterial errors.

d.We adjusted for the tax impacts of the revisions related to such errors described above.

We concluded that the errors were not material, either individually or in the aggregate, to our previously issued condensed consolidated financial statements for the impacted period. To correct the immaterial errors, we have revised our previously issued condensed consolidated financial statements as of and for the period ended September 30, 2023.

We have revised the condensed consolidated balance sheet, condensed consolidated statement of operations, condensed consolidated statement of comprehensive income (loss), condensed consolidated statement of changes in stockholders' equity, and condensed consolidated statement of cash flows for the period ended September 30, 2023, as well as the associated Notes to the condensed consolidated financial statements to reflect the correction of these immaterial errors in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2024. The following tables reflect the errors discussed in a through d above.

The following table reflects the revisions to the previously issued condensed consolidated balance sheet as of September 30, 2023 (in thousands):
8
System1, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

As Previously ReportedRevision AdjustmentAs Currently Reported
Liabilities and Stockholders' Equity
Deferred tax liability$15,009 $338 $15,347 (d)
Total liabilities687,066 338 687,404 
Stockholders’ Equity / Members’ Deficit
Additional paid-in capital $849,398 $867 $850,265 (a) (b)
Accumulated deficit(646,242)7,027 (639,215)(a) (b) (d)
Accumulated other comprehensive loss(435)156 (279)(d)
Total stockholders' equity attributable to System1, Inc.$202,732 $8,050 $210,782 
Non-controlling interest37,746 (8,388)29,358 (b)
Total stockholders' equity$240,478 $(338)$240,140 
Total liabilities and stockholders' equity$927,544 $— $927,544 

The following tables reflect the revisions to the previously issued condensed consolidated statement of operations for the three and nine months ended September 30, 2023 (in thousands):

Three Months Ended September 30, 2023
As Previously ReportedRevision AdjustmentAs Currently Reported
Salaries and benefits$26,689 $6 $26,695 (a)
Total operating expenses108,666 6 108,672 
Operating loss(20,848)(6)(20,854)
Loss before income tax$(27,038)$(6)$(27,044)
Income tax expense (benefit)(920)(196)(1,116)(d)
Net loss from continuing operations(26,118)190 (25,928)
Net loss from discontinued operations, net of tax(137,209)— (137,209)
Net loss(163,327)190 (163,137)
Less: Net loss from continuing operations attributable to non-controlling interest(6,328)247 (6,081)(b)
Less: Net loss from discontinued operations attributable to non-controlling interest(25,566)— (25,566)
Net loss attributable to System1, Inc.$(131,433)$(57)$(131,490)
Amounts attributable to System1, Inc.:
Net loss from continuing operations$(19,790)$(57)$(19,847)(a) (b) (d)
Net loss from discontinued operations(111,643)— (111,643)
Net loss attributable to System1, Inc.$(131,433)$(57)$(131,490)
Basic and diluted net loss per share:
Continuing operations$(0.21)$— $(0.21)
Discontinued operations(1.19)0.01 (1.18)(b)
Basic and diluted net loss per share$(1.40)$0.01 $(1.39)
Weighted average number of shares outstanding - basic and diluted93,941 418 94,359 (b)
9
System1, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

Nine Months Ended September 30, 2023
As Previously ReportedRevision AdjustmentAs Currently Reported
Salaries and benefits$82,484 $(588)$81,896 (a)
Total operating expenses373,349 (588)372,761 
Operating loss(67,498)588 (66,910)
Loss before income tax$(98,033)$588 $(97,445)
Income tax expense (benefit)(10,626)(988)(11,614)(d)
Net loss from continuing operations(87,407)1,576 (85,831)
Net loss from discontinued operations, net of tax(163,222)— (163,222)
Net loss(250,629)1,576 (249,053)
Less: Net loss from continuing operations attributable to non-controlling interest(19,543)554 (18,989)(b)
Less: Net loss from discontinued operations attributable to non-controlling interest(30,472)— (30,472)
Net loss attributable to System1, Inc.$(200,614)$1,022 $(199,592)
Amounts attributable to System1, Inc.:
Net loss from continuing operations$(67,864)$1,022 $(66,842)(a) (b) (d)
Net loss from discontinued operations(132,750)— (132,750)
Net loss attributable to System1, Inc.$(200,614)$1,022 $(199,592)
Basic and diluted net loss per share:
Continuing operations$(0.73)$0.02 $(0.71)(b)
Discontinued operations(1.42)— (1.42)
Basic and diluted net loss per share$(2.15)$0.02 $(2.13)
Weighted average number of shares outstanding - basic and diluted93,281 368 93,649 (b)

The following tables reflect the revisions related to the previously issued condensed consolidated statement of comprehensive loss for the three and nine months ended September 30, 2023 (in thousands):

Three Months Ended September 30, 2023
As Previously ReportedRevision AdjustmentAs Currently Reported
Net loss$(163,327)$190 $(163,137)(a) (d)
Other comprehensive loss:
Foreign currency translation loss(188)— (188)
Comprehensive loss(163,515)190 (163,325)
Comprehensive loss attributable to non-controlling interest(31,932)247 (31,685)(b)
Comprehensive loss attributable to System1, Inc.$(131,583)$(57)$(131,640)

10
System1, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

Nine Months Ended September 30, 2023
As Previously ReportedRevision AdjustmentAs Currently Reported
Net loss$(250,629)$1,576 $(249,053)(a) (d)
Other comprehensive loss:
Foreign currency translation loss(109)(1)(110)(c)
Comprehensive loss(250,738)1,575 (249,163)
Comprehensive loss attributable to non-controlling interest(50,019)554 (49,465)(b)
Comprehensive loss attributable to System1, Inc.$(200,719)$1,021 $(199,698)

The following tables reflect the revisions to the previously issued condensed consolidated statement of changes in stockholders' equity for the nine months ended September 30, 2023 (in thousands). Although the impact of such revisions is pervasive throughout the condensed consolidated statement of changes in stockholders' equity as a result of the errors described above, the most significant revisions include a reduction of net loss of $1.6 million, an increase of non-controlling interest of $1.8 million, a reduction in accumulated deficit of $1.0 million and a reduction in additional paid-in-capital of $1.0 million.

Class A Common Stock
Class C Common Stock
Shares
Amount
Shares
Amount
Additional Paid-In-Capital
Accumulated Deficit
Accumulated Other Comprehensive Loss
Non-Controlling Interest
Total Stockholders’
Equity
As Previously Reported
Balance at December 31, 202291,674 $9 21,747 $2 $831,566 $(439,296)$(260)$78,650 $470,671 
Net loss— — — — — (33,952)— (9,174)(43,126)
Cumulative-effect of adoption of ASU 2016-13— — — — — (326)— — (326)
Issuance of restricted stock, net of forfeitures and shares withheld for taxes832 — — — (1,730)— — — (1,730)
Issuance of common stock in connection with settlement of incentive plan407 — — — 1,659 — — — 1,659 
Conversion of Class C shares to Class A shares234 — (234)— 955 — — (955)— 
Increase in tax receivable agreement liability— — — — (441)— — — (441)
Other comprehensive loss— — — — — — (62)(47)(109)
Stock-based compensation— — — — 6,963 — — — 6,963 
Balance at March 31, 202393,147 $9 21,513 $2 $838,972 $(473,574)$(322)$68,474 $433,561 
Net loss— — — — — (35,230)— (8,947)(44,177)
Issuance of restricted stock, net of forfeitures and shares withheld for taxes455 — — — (314)— — — (314)
Other comprehensive income (loss)— — — — — — 209 (22)187 
Stock-based compensation— — — — 5,571 — — — 5,571 
Balance at June 30, 202393,602 $9 21,513 $2 $844,229 $(508,804)$(113)$59,505 $394,828 
Net loss— — — — — (131,433)— (31,894)(163,327)
Issuance of restricted stock, net of forfeitures and shares withheld for taxes656 — — — (54)— — — (54)
11
System1, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

Class A Common Stock
Class C Common Stock
Shares
Amount
Shares
Amount
Additional Paid-In-Capital
Accumulated Deficit
Accumulated Other Comprehensive Loss
Non-Controlling Interest
Total Stockholders’
Equity
Other comprehensive loss— — — — — — (165)(23)(188)
Stock-based compensation— — — — 7,102 — — — 7,102 
Balance at September 30, 202394,258 $9 21,513 $2 $851,277 $(640,237)$(278)$27,588 $238,361 
Revision Adjustments
Net loss— $— — $— $— $150 $— $50 $200 (a) (b) (d)
Issuance of restricted stock, net of forfeitures and shares withheld for taxes— — — — 281 — — (281)— (a) (b)
Issuance of common stock in connection with settlement of incentive plan— — — — 160 — — (160)— (b)
Conversion of Class C shares to Class A shares— — — — 92 — — (92)— (b)
Stock-based compensation— — — — (760)— — 958 198 (a) (b)
Balance at March 31, 2023— $— — $— $(227)$150 $—