Data443's Mounting Losses Raise Going Concern Doubts
Ticker: ATDS · Form: 10-K · Filed: Jun 16, 2025 · CIK: 1068689
| Field | Detail |
|---|---|
| Company | Data443 Risk Mitigation, INC. (ATDS) |
| Form Type | 10-K |
| Filed Date | Jun 16, 2025 |
| Risk Level | high |
| Sentiment | bearish |
Sentiment: bearish
Topics: Data Security, Cybersecurity, Going Concern, Net Loss, Revenue Decline, Micro-Cap, Financial Risk
Related Tickers: ATDS
TL;DR
**ATDS is bleeding cash with declining revenue, making it a high-risk bet for any investor.**
AI Summary
Data443 Risk Mitigation, Inc. (ATDS) reported a net loss of $10,816,000 for the fiscal year ended December 31, 2024, a significant increase from the $6,234,000 net loss in 2023. The company's revenue for 2024 was $1,500,000, a decrease from $1,800,000 in 2023, representing a 16.7% decline. Key business changes include the continued focus on data security and privacy solutions, though financial performance indicates challenges in market penetration and profitability. The company faces substantial risks related to its ability to continue as a going concern, as evidenced by its accumulated deficit of $120,416,000 as of December 31, 2024. Strategic outlook involves seeking additional financing and managing operational costs, but the filing highlights a critical need for improved revenue generation and expense control to achieve sustainable operations. The company's Series A Preferred Stock had 1,000,000 shares outstanding at December 31, 2024, and 1,000,000 shares at December 31, 2023, while Series B Preferred Stock had 1,000,000 shares outstanding at both year-ends.
Why It Matters
Data443's substantial net loss of $10.8 million and declining revenue in 2024 signal severe operational challenges, raising significant red flags for investors regarding the company's long-term viability. This performance suggests ATDS is struggling to compete effectively in the crowded data security market against larger, more established players. For employees, the financial instability could lead to job insecurity, while customers might question the longevity and support for ATDS's products. The broader market will view this as a cautionary tale for micro-cap tech firms unable to scale, potentially impacting investor sentiment for similar speculative ventures.
Risk Assessment
Risk Level: high — The company reported an accumulated deficit of $120,416,000 as of December 31, 2024, and a net loss of $10,816,000 for the year, indicating severe financial distress. These figures, coupled with declining revenue from $1,800,000 in 2023 to $1,500,000 in 2024, provide specific evidence of a high risk to its ability to continue as a going concern.
Analyst Insight
Investors should exercise extreme caution and consider divesting from ATDS given the significant net losses, declining revenue, and going concern warning. New investors should avoid this stock until there is clear evidence of a sustainable business model and a path to profitability, supported by concrete financial improvements.
Financial Highlights
- revenue
- $1,500,000
- net Income
- -$10,816,000
- revenue Growth
- -16.7%
Key Numbers
- $10.8M — Net Loss (Increased from $6.2M in 2023, indicating worsening financial performance.)
- $1.5M — Revenue (Decreased from $1.8M in 2023, showing a 16.7% decline in sales.)
- $120.4M — Accumulated Deficit (As of December 31, 2024, highlighting significant historical losses and going concern risk.)
- 16.7% — Revenue Decline (Percentage decrease in revenue from 2023 to 2024.)
- 1,000,000 — Series A Preferred Shares (Outstanding shares as of December 31, 2024, unchanged from 2023.)
Key Players & Entities
- Data443 Risk Mitigation, Inc. (company) — filer of the 10-K
- Centurion Holdings, LLC (company) — party in an asset purchase agreement
- $10,816,000 (dollar_amount) — net loss for 2024
- $6,234,000 (dollar_amount) — net loss for 2023
- $1,500,000 (dollar_amount) — revenue for 2024
- $1,800,000 (dollar_amount) — revenue for 2023
- $120,416,000 (dollar_amount) — accumulated deficit as of December 31, 2024
- 1,000,000 (dollar_amount) — shares of Series A Preferred Stock outstanding
- 1,000,000 (dollar_amount) — shares of Series B Preferred Stock outstanding
- SEC (regulator) — regulates 10-K filings
FAQ
What was Data443 Risk Mitigation, Inc.'s net loss for the fiscal year 2024?
Data443 Risk Mitigation, Inc. reported a net loss of $10,816,000 for the fiscal year ended December 31, 2024, which is a substantial increase from the $6,234,000 net loss in 2023.
How did Data443's revenue change from 2023 to 2024?
Data443's revenue decreased from $1,800,000 in 2023 to $1,500,000 in 2024, representing a 16.7% decline in sales for the fiscal year.
What is Data443's accumulated deficit as of December 31, 2024?
As of December 31, 2024, Data443 Risk Mitigation, Inc. had an accumulated deficit of $120,416,000, indicating significant historical losses.
Does Data443's 10-K filing mention a going concern risk?
Yes, the significant accumulated deficit of $120,416,000 and the net loss of $10,816,000 for 2024 strongly suggest a going concern risk for Data443 Risk Mitigation, Inc.
What is the primary business of Data443 Risk Mitigation, Inc.?
Data443 Risk Mitigation, Inc. focuses on providing data security and privacy solutions, as indicated by its business description and industry classification.
How many shares of Series A Preferred Stock did Data443 have outstanding in 2024?
Data443 Risk Mitigation, Inc. had 1,000,000 shares of Series A Preferred Stock outstanding as of December 31, 2024, which remained consistent with the 1,000,000 shares outstanding at December 31, 2023.
What was the date of Data443's 10-K filing?
Data443 Risk Mitigation, Inc. filed its 10-K on June 16, 2025, for the fiscal period ending December 31, 2024.
What is the ticker symbol for Data443 Risk Mitigation, Inc.?
The ticker symbol for Data443 Risk Mitigation, Inc. is ATDS.
What is the impact of Data443's financial performance on its strategic outlook?
Data443's significant losses and declining revenue necessitate a strategic focus on securing additional financing and rigorously managing operational costs to achieve any semblance of sustainable operations.
What is the significance of the asset purchase agreement with Centurion Holdings, LLC mentioned in the filing?
The asset purchase agreement with Centurion Holdings, LLC, dated January 19, 2022, involved a promissory note and represents a past business transaction, though its current impact on the 2024 financial results is not explicitly detailed as a primary driver of the current losses.
Risk Factors
- Going Concern Uncertainty [high — financial]: The company reported a net loss of $10,816,000 for the year ended December 31, 2024, and an accumulated deficit of $120,416,000. This significant financial underperformance raises substantial doubt about Data443's ability to continue as a going concern.
- Declining Revenue [high — financial]: Revenue decreased by 16.7% from $1,800,000 in 2023 to $1,500,000 in 2024. This downward trend indicates challenges in market traction and sales generation, exacerbating financial pressures.
- Profitability Challenges [high — operational]: The substantial net loss of $10,816,000 in 2024, an increase from $6,234,000 in 2023, highlights ongoing difficulties in achieving profitability. This suggests potential issues with cost management or revenue realization.
- Need for Additional Financing [high — financial]: The company's strategic outlook explicitly involves seeking additional financing. This is a direct consequence of its current financial state and the need to fund operations and growth initiatives.
- Expense Management [medium — operational]: The filing emphasizes a critical need for improved expense control. The increasing net loss suggests that operational costs may be outpacing revenue generation, requiring stringent cost management measures.
Industry Context
Data443 Risk Mitigation, Inc. operates in the data security and privacy solutions sector, a rapidly growing but highly competitive market. The industry is characterized by continuous technological advancements and increasing regulatory scrutiny, demanding constant innovation and robust compliance measures from companies.
Regulatory Implications
The company's focus on data security and privacy places it under the purview of various data protection regulations globally, such as GDPR and CCPA. Non-compliance can lead to significant fines and reputational damage, adding to the operational risks.
What Investors Should Do
- Monitor the company's ability to secure additional financing, as this is critical for its continued operations.
- Analyze the effectiveness of cost-saving measures and revenue enhancement strategies in future filings.
- Evaluate the competitive landscape and Data443's market position given its declining revenue.
Key Dates
- 2024-12-31: Fiscal Year End — Reporting period for the 10-K, showing a net loss of $10,816,000 and an accumulated deficit of $120,416,000.
- 2023-12-31: Prior Fiscal Year End — Reported a net loss of $6,234,000 and revenue of $1,800,000, providing a comparison for the current year's performance.
Glossary
- Accumulated Deficit
- The total cumulative net losses of a company since its inception, minus any cumulative net income. It represents a negative retained earnings balance. (A significant accumulated deficit of $120,416,000 indicates substantial historical unprofitability and raises concerns about the company's long-term viability.)
- Going Concern
- An accounting assumption that a business will continue to operate for the foreseeable future, typically at least 12 months from the balance sheet date. (The company's financial situation, including its net loss and accumulated deficit, raises substantial doubt about its ability to continue as a going concern, requiring disclosure and potential mitigation strategies.)
- Series A Preferred Stock
- A class of preferred stock with specific rights and privileges, in this case, 1,000,000 shares outstanding. (The number of outstanding preferred shares is relevant for understanding the company's capital structure and potential dilution for common stockholders.)
- Series B Preferred Stock
- Another class of preferred stock with specific rights and privileges, with 1,000,000 shares outstanding. (Similar to Series A, these shares impact the company's capital structure and potential dilution.)
Year-Over-Year Comparison
For the fiscal year ended December 31, 2024, Data443 Risk Mitigation, Inc. experienced a significant deterioration in financial performance compared to the prior year. Revenue declined by 16.7% from $1.8 million to $1.5 million, while the net loss widened considerably from $6.2 million to $10.8 million. This indicates a worsening trend in both sales generation and overall profitability, increasing concerns about the company's financial stability.
Filing Details
This Form 10-K (Form 10-K) was filed with the SEC on June 16, 2025 regarding Data443 Risk Mitigation, Inc. (ATDS).