10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number 000-50658

Marchex, Inc.

(Exact name of Registrant as specified in its charter)


Delaware	35-2194038
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1200 5th Ave, Suite 1300
Seattle, WA (Address of Principal Executive Offices)	98101 (Zip Code)

Registrant’s telephone number, including area code: (206) 331-3300

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 such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 Exchange Act). Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:

    Title of each class

    Trading
Symbol(s)

    Name of each exchange on which registered

    Class B Common Stock

    MCHX

    The Nasdaq Global Select Market

As of May 1, 2023, the registrant had 4,660,927 shares of Class A common stock, $.01 par value per share, and 38,688,784 shares of Class B common stock, $.01 par value per share, outstanding, respectively.

EXPLANATORY NOTE

This Amendment No. 1 on Form 10-Q/A (this “Amendment”) amends the Quarterly Report on Form 10-Q of Marchex, Inc. (the “Company”) for the quarter ended March 31, 2023, that was filed with the Securities and Exchange Commission (the “SEC”) on May 5, 2023 (the “Original Filing”). The purpose of this Amendment is solely to correct inadvertent errors in Exhibits 31.1 and 32 to the Original Filing, specifically Exhibit 31.1 referencing the Annual Report on Form 10-K rather than the Quarterly Report on Form 10-Q, and Exhibit 32 referencing the period ended March 31, 2022 rather than March 31, 2023 and not being signed by the Company's Principal Executive Officer. Accordingly, the Company is filing revised Exhibits 31.1 and 32 to correct these inadvertent errors. Because the other exhibits contained in the Original Filing are unchanged, the Company has also revised the Exhibit Index in Item 6 of Part II to indicate such other exhibits are incorporated by reference from the Original Filing. The remainder of the text of Original Filing is included in this Amendment without change. Except for the revised Exhibits 31.1 and 32 and the changes to the Exhibit Index, this Amendment continues to speak as of the date of the Original Filing and does not reflect events occurring after the date of the Original Filing or modify or update the disclosures therein in any way.

Marchex, Inc.

Form 10-Q

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Condensed Consolidated Financial Statements (unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Stockholders’ Equity	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	24
Item 4.	Controls and Procedures	24

PART II.	OTHER INFORMATION	25
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 4.	Mine Safety Disclosures	38
Item 6.	Exhibits	39
Signature		40

PART I—FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

MARCHEX, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)


	December 31,			March 31,
	2022			2023
Assets
Current assets:
Cash and cash equivalents	$	20,474		$	15,710
Accounts receivable, net		8,396			8,047
Prepaid expenses and other current assets		2,015			2,397
Total current assets		30,885			26,154
Property and equipment, net		4,050			4,530
Right-of-use lease asset		738			495
Other assets, net		973			1,118
Goodwill		17,558			17,558
Intangible assets from acquisitions, net		2,590			2,059
Total assets	$	56,794		$	51,914
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	2,037		$	1,342
Accrued benefits and payroll		3,566			2,981
Other accrued expenses and current liabilities		3,825			4,261
Deferred revenue and deposits		1,384			1,676
Right of use liability, current		1,252			189
Finance lease, current		—			161
Total current liabilities		12,064			10,610
Deferred tax liabilities		233			232
Finance lease, non-current		-			290
Right of use liability non-current		385			336
Total liabilities		12,682			11,468
Commitments and contingencies - See Note 10
Stockholders’ equity:
Common stock, $0.01 par value, Authorized 137,500 shares
Class A: 12,500 shares authorized; 4,661 shares issued and outstanding at December 31, 2022 and March 31, 2023		49			49
Class B: 125,000 shares authorized; 38,497 shares issued and outstanding at December 31, 2022, including 1,105 shares of restricted stock; and 38,674 shares issued and outstanding at March 31, 2023, including 1,218 shares of restricted stock		385			387
Additional paid-in capital		354,999			355,807
Accumulated deficit		(311,321	)		(315,797	)
Total stockholders’ equity		44,112			40,446
Total liabilities and stockholders’ equity	$	56,794		$	51,914

See accompanying Notes to the Condensed Consolidated Financial Statements.

MARCHEX, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)


	Three Months Ended March 31,
	2022			2023
Revenue	$	13,171		$	12,216
Expenses:
Service costs(1)(3)		4,935			5,424
Sales and marketing(1)(3)		3,165			3,970
Product development(1)(3)		3,460			4,164
General and administrative(1)(3)		2,606			2,617
Amortization of intangible assets from acquisitions(2)		531			531
Acquisition and disposition-related costs		5			13
Total operating expenses		14,702			16,719
Loss from operations		(1,531	)		(4,503	)
Interest income and other, net		(21	)		57
Loss before provision for income taxes		(1,552	)		(4,446	)
Income tax expense		30			30
Net loss applicable to common stockholders	$	(1,582	)	$	(4,476	)
Basic and diluted net loss per Class A and Class B share applicable to common stockholders	$	(0.04	)	$	(0.11	)
Shares used to calculate basic net loss per share applicable to common stockholders:
Class A		4,661			4,661
Class B		38,666			37,835
Shares used to calculate diluted net loss per share applicable to common stockholders:
Class A		4,661			4,661
Class B		43,327			42,496
(1) Excludes amortization of intangibles from acquisitions
(2) Components of amortization of intangibles from acquisitions
Service costs		117			117
Sales and marketing		414			414
Total	$	531		$	531
(3) Components of related party support services fee recovery
Service costs	$	781		$	380
Sales and marketing		231			50
Product development		517			67
General and administrative		503			54
Total	$	2,032		$	551

See accompanying Notes to the Condensed Consolidated Financial Statements.

MARCHEX, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands)

(unaudited)


	Class A				Class B								Additional					Total
	common stock				common stock				Treasury stock				paid-in		Accumulated			stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		capital		deficit			equity
Balances at December 31, 2021		4,661	$	49		37,391	$	374		—	$	—	$	354,155	$	(303,076	)	$	51,502
Issuance of common stock upon exercise of options, issuance and vesting of restricted stock and under employee stock purchase plan, net		—		—

SEC Form 10-Q/A filed by Marchex Inc. (Amendment)