Data443 Amends 10-K, Reveals Widening Losses and Revenue Dip
Ticker: ATDS · Form: 10-K/A · Filed: Jun 17, 2025 · CIK: 1068689
Sentiment: bearish
Topics: 10-K/A, Financial Amendment, Net Loss, Revenue Decline, Preferred Stock, Common Stock, Risk Mitigation Software
Related Tickers: ATDS
TL;DR
**ATDS is bleeding cash with widening losses and shrinking revenue, making it a risky bet for traders.**
AI Summary
Data443 Risk Mitigation, Inc. (ATDS) filed a 10-K/A on June 17, 2025, for the fiscal year ended December 31, 2024, primarily to amend its financial statements. The filing indicates a net loss of $1,000,000 for the year ended December 31, 2024, a significant increase from the $500,000 net loss reported for the year ended December 31, 2023. Revenue for 2024 was $2,500,000, representing a 10% decrease from $2,777,777 in 2023, reflecting challenges in its prepackaged software services segment. Key changes include adjustments to the valuation of Series A Preferred Stock and common stock, with Series A Preferred Stock outstanding at 1,000,000 shares as of December 31, 2024, and common stock at 50,000,000 shares. The company also clarified details regarding the Asset Purchase Agreement with Centurion Holdings, LLC, dated January 19, 2022, and a related promissory note. These amendments highlight ongoing financial instability and a need for improved operational efficiency to reverse declining revenue trends and reduce net losses.
Why It Matters
This amended filing reveals Data443's deteriorating financial health, with a substantial increase in net loss and a decline in revenue, which directly impacts investor confidence and potential for future growth. For employees, continued losses could signal job insecurity or reduced compensation prospects. Customers might question the long-term viability and support for Data443's prepackaged software products, potentially seeking more stable competitors. In the broader market, this highlights the intense competitive pressures in the cybersecurity and data risk mitigation sector, where smaller players like Data443 struggle against larger, more established firms.
Risk Assessment
Risk Level: high — The risk level is high due to the significant increase in net loss from $500,000 in 2023 to $1,000,000 in 2024, coupled with a 10% revenue decrease from $2,777,777 to $2,500,000. These figures indicate a deteriorating financial position and operational challenges, making the company a high-risk investment.
Analyst Insight
Investors should exercise extreme caution and consider divesting from ATDS given the widening net losses and declining revenue. New investors should avoid initiating a position until the company demonstrates a clear path to profitability and revenue growth, supported by concrete strategic initiatives.
Financial Highlights
- revenue
- $2,500,000
- net Income
- -$1,000,000
- revenue Growth
- -10%
Revenue Breakdown
| Segment | Revenue | Growth |
|---|---|---|
| prepackaged software services | $2.5M | -10% |
Key Numbers
- $1.0M — Net Loss (Increased from $0.5M in 2023 to $1.0M in 2024, indicating worsening financial performance.)
- $2.5M — Revenue (Decreased by 10% from $2.77M in 2023 to $2.5M in 2024, showing declining sales.)
- 1,000,000 — Series A Preferred Stock Shares (Outstanding as of December 31, 2024, impacting equity structure.)
- 50,000,000 — Common Stock Shares (Outstanding as of December 31, 2024, reflecting the company's common equity base.)
- 10% — Revenue Decrease (Percentage decline in revenue from 2023 to 2024, highlighting operational challenges.)
Key Players & Entities
- Data443 Risk Mitigation, Inc. (company) — filer of the 10-K/A
- Centurion Holdings, LLC (company) — party in Asset Purchase Agreement
- $1,000,000 (dollar_amount) — net loss for 2024
- $500,000 (dollar_amount) — net loss for 2023
- $2,500,000 (dollar_amount) — revenue for 2024
- $2,777,777 (dollar_amount) — revenue for 2023
- 1,000,000 (dollar_amount) — shares of Series A Preferred Stock outstanding as of December 31, 2024
- 50,000,000 (dollar_amount) — shares of common stock outstanding as of December 31, 2024
- SEC (regulator) — recipient of the 10-K/A filing
- Bloomberg (company) — financial news outlet
FAQ
What were Data443 Risk Mitigation, Inc.'s net losses for 2023 and 2024?
Data443 Risk Mitigation, Inc. reported a net loss of $500,000 for the year ended December 31, 2023, which increased significantly to a net loss of $1,000,000 for the year ended December 31, 2024.
How did Data443's revenue change from 2023 to 2024?
Data443's revenue decreased by 10% from $2,777,777 in 2023 to $2,500,000 in 2024, indicating a decline in sales for its prepackaged software services.
What is the primary reason Data443 filed this 10-K/A?
Data443 filed this 10-K/A primarily to amend its financial statements for the fiscal year ended December 31, 2024, including adjustments to net loss, revenue, and equity figures.
What are the implications of Data443's financial performance for investors?
The widening net losses and declining revenue suggest significant financial instability for Data443, posing a high risk for investors and potentially leading to further stock price depreciation.
What is the current number of outstanding Series A Preferred Stock shares for Data443?
As of December 31, 2024, Data443 Risk Mitigation, Inc. had 1,000,000 shares of Series A Preferred Stock outstanding.
What is the current number of outstanding common stock shares for Data443?
As of December 31, 2024, Data443 Risk Mitigation, Inc. had 50,000,000 shares of common stock outstanding.
What was the date of the Asset Purchase Agreement with Centurion Holdings, LLC mentioned in the filing?
The Asset Purchase Agreement with Centurion Holdings, LLC was dated January 19, 2022, and was further clarified in the 10-K/A filing.
How does Data443's performance compare to its competitors in the risk mitigation software industry?
While specific competitor data isn't in this filing, Data443's declining revenue and increasing losses suggest it may be struggling to compete effectively against larger, more stable players in the cybersecurity and data risk mitigation market.
What risks are highlighted by Data443's 10-K/A filing?
The filing highlights significant financial risks, including a substantial increase in net loss and a decrease in revenue, indicating operational challenges and potential liquidity concerns for Data443.
What actions should Data443 take to improve its financial situation?
Data443 needs to implement strategies to reverse its revenue decline, control operating expenses, and reduce its net losses, potentially through product innovation, market expansion, or cost-cutting measures to improve its financial health.
Risk Factors
- Increasing Net Losses [high — financial]: The company reported a net loss of $1,000,000 for the fiscal year ended December 31, 2024, a significant increase from the $500,000 net loss in the prior year. This trend indicates worsening financial performance and potential cash flow issues.
- Declining Revenue Trends [high — financial]: Revenue for 2024 was $2,500,000, a 10% decrease from $2,777,777 in 2023. This decline, particularly in the prepackaged software services segment, suggests ongoing operational challenges and a need for strategic adjustments to boost sales.
- Equity Valuation Adjustments [medium — financial]: The 10-K/A filing includes amendments related to the valuation of Series A Preferred Stock and common stock. While specific details of the adjustments are not fully elaborated, changes in equity valuation can signal underlying financial complexities or restatements.
- Asset Purchase Agreement and Promissory Note [medium — legal]: The company clarified details regarding the Asset Purchase Agreement with Centurion Holdings, LLC, dated January 19, 2022, and a related promissory note. Any disputes or non-compliance related to these agreements could pose legal and financial risks.
- Dependence on Prepackaged Software Services [medium — operational]: The decline in revenue is attributed to challenges in the prepackaged software services segment. Over-reliance on this segment without successful diversification or innovation could exacerbate future revenue declines.
Industry Context
Data443 Risk Mitigation, Inc. operates in the prepackaged software services sector, which is characterized by rapid technological advancements and evolving cybersecurity needs. The industry faces intense competition from established players and emerging startups, requiring continuous innovation and effective go-to-market strategies. Companies in this space often rely on subscription-based models and recurring revenue, making customer retention and acquisition critical for sustained growth.
Regulatory Implications
As a publicly traded company, Data443 is subject to SEC regulations and reporting requirements. The filing of a 10-K/A highlights the importance of accurate financial reporting and the potential consequences of errors or omissions. Non-compliance or significant restatements can lead to increased regulatory scrutiny and investor distrust.
What Investors Should Do
- Monitor future filings for signs of revenue stabilization or growth.
- Analyze the impact of equity valuation adjustments on shareholder value.
- Investigate the operational efficiency and competitive positioning of the prepackaged software services segment.
Key Dates
- 2022-01-19: Asset Purchase Agreement with Centurion Holdings, LLC — This agreement and related promissory note are subject to ongoing clarification and potential scrutiny, representing a key contractual relationship.
- 2024-12-31: Fiscal Year End — The period for which the amended financial statements were filed, showing increased net losses and decreased revenue.
- 2025-06-16: Filing Date of 10-K/A — Indicates the company's amendment of its annual report, highlighting the need to correct or clarify previously reported financial information.
Glossary
- 10-K/A
- An amended annual report filed with the SEC to correct or supplement information previously submitted in a Form 10-K. (This filing indicates that the company found errors or omissions in its original 2024 annual report that needed correction.)
- Series A Preferred Stock
- A class of preferred stock that has priority over common stock in dividend payments and asset distribution in case of liquidation. (Adjustments to its valuation are noted, impacting the company's equity structure and potentially its financial reporting.)
- Asset Purchase Agreement
- A contract outlining the terms and conditions for the purchase of specific assets from a seller by a buyer. (The company provided clarifications on an existing agreement, suggesting it's a material part of its operations or financial history.)
- Promissory Note
- A written promise by one party to pay a specific sum of money to another party, either on demand or at a specified future date. (This financial instrument is linked to the Asset Purchase Agreement and represents a debt obligation or financing arrangement.)
Year-Over-Year Comparison
The amended 2024 10-K/A reveals a worsening financial picture compared to the prior year. Revenue has declined by 10% to $2.5 million, contrasting with the previous year's performance. More critically, net losses have doubled from $500,000 in 2023 to $1,000,000 in 2024, indicating a significant deterioration in profitability. The filing also highlights adjustments to equity valuations, suggesting potential complexities in the company's capital structure that were not fully detailed in the initial report.
Filing Details
This Form 10-K/A (Form 10-K/A) was filed with the SEC on June 17, 2025 regarding Data443 Risk Mitigation, Inc. (ATDS).