ZDGE Zedge Inc

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

  

FORM 8-K/A

(Amendment No. 1)

  

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): February 5, 2025

 

Zedge, Inc.

(Exact name of registrant as specified in its charter)

  

Delaware		1-37782		26-3199071
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

1178 Broadway, Ste. 1450 (3rd Floor) New York, NY		10001
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code: (330) 577-3424

 

Not Applicable

(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 (see General Instruction A.2. below):

 

☐

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 B common stock, par value $0.01 per share		ZDGE		NYSE American

 

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.  ☐

 

 

 

Explanatory Note

 

On January 21, 2025, Zedge, Inc. (the “Company”) filed a Current Report on 8-K (the “Original 8-K”) under Item 2.05 to, among other things, report a restructuring initiative. Pursuant to Item 2.05(d) of Form 8-K, the Company is now filing this Amendment No. 1 to refine its disclosure related to the scope of the restructuring efforts and the amount of its estimated savings related to the restructuring. The disclosure included in Item 2.05 of the Original 8-K otherwise remains unchanged. The Original Report is hereby amended to provide the information set forth herein, which was unable to be determined at the time of the Original Report. 

 

Item 2.05. Costs Associated with Exit or Disposal Activities.

 

On February 5, 2025, the Company announced additional restructuring initiatives, notably the closure of its Norwegian operations. This closure, along with the consolidation of certain of the related activities in the Company’s current operations in Lithuania and Israel, is projected to result in approximately $0.9 million in annualized compensation-related savings.

 

The previously announced restructuring actions, which include a significant reorganization of the GuruShots team, are expected to yield approximately $1.7 million in annualized compensation-related savings. In conjunction with this efforts, the Company is also targeting reductions in non-employee expenses related to its restructuring efforts. This includes scaling back paid player acquisition initiatives at GuruShots for the remainder of fiscal 2025, with a goal of reducing non-employee expenses by approximately $0.1 to $0.3 million. Additionally, the Company anticipates an additional reduction in annualized expenses for GuruShots (and Zedge) of approximately $1.2 million, beginning in fiscal Q4, upon the completion of employee retention bonuses related to the 2022 acquisition of GuruShots, which are scheduled to conclude in April 2025.

 

Overall, the estimated total savings from the global restructuring and other cost reduction initiatives are expected to range from $3.9 million to $4.1 million annually. Cumulatively, these efforts will include a 22% workforce reduction, which is projected to yield about $2.6 million in pre-tax annualized compensation-related savings, as well as the targeted non-employee cost reductions.

 

The Company expects that accounting charges related to its restructuring efforts will primarily be reflected in the results for the second and third fiscal quarters, covering periods ending January 31 and April 30, 2025, respectively.

 

A copy of the press release issued by the Company on February 5, 2025, announcing the estimated savings from the global restructuring plan and other cost reductions, is furnished as Exhibit 99.1 and is incorporated herein by reference.

 

Item 7.01. Regulation FD Disclosure.

 

On February 5, 2025, the Company issued a press release announcing the estimated savings from the global restructuring plan and other cost reductions. A copy of the press release is furnished as Exhibit 99.1 and is incorporated herein by reference.

 

The Company is furnishing the information contained in this Report, including Exhibit 99.1, pursuant to Item 7.01 of Form 8-K promulgated by the Securities and Exchange Commission (the “SEC”). This information shall not be deemed to be “filed” with the SEC or incorporated by reference into any other filing with the SEC. In addition, the press release contains statements intended as “forward-looking statements” that are subject to the cautionary statements about forward-looking statements set forth in the press release.

 

 

Forward-Looking Statements

 

This current report on Form 8-K contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect the Company’s current views with respect to, among other things, its operations, including the recently announced plan to implement a global workforce reduction and restructuring of our operations and its expected impact, its financial performance, its industry and its business. Forward-looking statements include all statements that are not historical facts. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “believe(s),” “expect(s),” “potential,” “continue(s),” “may,” “will,” “should,” “could,” “would,” “seek(s),” “predict(s),” “intend(s),” “trends,” “plan(s),” “estimate(s),” “anticipates,” “projection,” “will likely result” and or the negative version of these words or other comparable words of a future or forward-looking nature. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors include but are not limited to those described under “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended July 31, 2024 filed with the Securities and Exchange Commission (the “SEC”) as such factors may be updated from time to time in the Company’s periodic filings with the SEC. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No		Document
99.1		Press Release issued February 5, 2025.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

SIGNATURE

 

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

 

	ZEDGE, INC.
	By:	/s/ Jonathan Reich
	Name:	Jonathan Reich
	Title:	Chief Executive Officer

 

Dated: February 12, 2025

 

 

EXHIBIT INDEX

 

Exhibit No		Document
99.1		Press Release issued February 5, 2025.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

4

Exhibit 99.1

 

ZEDGE INCREASES COST REDUCTION EFFORTS TO A TARGETED $4 MILLION ANNUALLY

 

Estimated total global restructuring and other cost reductions to save $3.9 to $4.1 million annually relative to Q1 FY25 run rate – FY24 free cash flow* was $4.7 million

 

Total global restructuring efforts to date include a 22% workforce reduction with expected annualized compensation-related cost savings of approximately $2.6 million (pre-tax); additional $0.1 to $0.3 million in annualized non-employee cost reductions being targeted

 

Other annual cost reductions of $1.2 million stem from the completion of scheduled payments of GuruShots acquisition-related retention bonuses

 

New York, NY – February 5, 2025 – Zedge, Inc. (NYSE AMERICAN: ZDGE), $ZDGE, a leader in digital marketplaces and interactive games that foster creativity, self-expression and community engagement, today announced additional restructuring initiatives, mainly the closure of its Norway operations. Combined with the previously announced headcount and compensation expense reductions at GuruShots and other initiatives, these actions mark a key milestone in the Company’s strategy to streamline operations and enhance profitability while positioning for growth and revamped focus.

 

Jonathan Reich, CEO of Zedge, commented:
“Today’s announcement, including the closure of our Norwegian subsidiary, marks an end to our aggressive restructuring efforts. Combined with the actions announced on January 21, 2025, and some additional reductions, we expect to lower our annualized expense run rate by roughly $4 million, or approximately $0.30 per share, on a pre-tax basis. This is significant progress, given that we generated $30 million in revenue and $4.7 million in free cash flow in FY24.

 

“Beyond cost savings, these measures will consolidate our workforce in Lithuania and Israel, streamlining operations, driving efficiency and reducing expenses beyond compensation. These changes are designed to position us for sustainable growth and support our strategic objectives.”

Estimated Change in Expense (vs Q1 FY25)
in $M		Annualized Reductions
Restructuring:
Compensation-Related Expense			($2.6)
Non-employee			($0.1) - ($0.3)
Other:
Expiration of GS Retention Bonus			($1.2)
Total			($3.9) - ($4.1)

 

Cost-saving benefits in the above table are expected to begin taking effect in Zedge’s third and fourth fiscal quarters.

 

 

Highlights of Zedge’s Restructuring Initiatives

Announced February 5, 2025:

 

Closure of Norwegian Subsidiary - $0.9 million in annualized compensation-related savings

·

Zedge is ceasing operations in Norway while consolidating its activities in Lithuania and Israel. The Company expects this move to enhance operational efficiency and reduce expenses.

 

Announced January 21, 2025:

 

Rightsizing the GuruShots Workforce - $1.7 million in annualized compensation-related savings 

·

As part of the restructuring, the GuruShots team underwent a significant reorganization. These changes aim to bring GuruShots closer to breakeven while supporting the development of the GuruShots 2.0 product strategy.

 

Non-employee expense reduction targets - $0.1 to $0.3 million 

·

Zedge is also targeting non-employee expense reductions related to its restructuring initiatives, including scaling back GuruShots paid player acquisition initiatives for the remainder of fiscal 2025.

 

Reimagining GuruShots Gameplay and Monetization 

·

The GuruShots team is conducting a comprehensive review of the game via the GuruShots 2.0 initiative, reimagining gameplay, progression dynamics, monetization strategies, and technology infrastructure. Once the GuruShots 2.0 strategy and roadmap are finalized, Zedge plans to re-invest strategically based on achieving key milestones.

 

Additional Cost Savings

Zedge also expects to benefit from the completion (in April 2025) of GuruShots employee retention bonuses (that were committed to as part of the 2022 acquisition), which will further reduce GuruShots (and Zedge’s) annualized expense run-rate by approximately $1.2 million beginning in fiscal Q4.

 

Restructuring Charges
Zedge anticipates accounting charges related to its restructuring efforts will primarily be reflected in the Company’s second and third fiscal quarter results, covering periods ending January 31 and April 30, 2025, respectively.

 

By completing these restructuring efforts, Zedge is positioning itself for sustainable growth while improving operational focus and cost efficiency.

 

*

Free cash flow is a non-GAAP metric defined as cash flow from operations ($5.9 million in FY24) minus capital expenditures ($1.2 million in FY24). Zedge believes this is relevant because it is a key valuation metric used by investors to evaluate a company’s performance.

 

 

About Zedge

 

Zedge empowers tens of millions of consumers and creators each month with its suite of interconnected platforms that enable creativity, self-expression and e-commerce and foster community through fun competitions. Zedge’s ecosystem of product offerings includes the Zedge Marketplace, a freemium marketplace offering mobile phone wallpapers, video wallpapers, ringtones, notification sounds, and pAInt, a generative AI image maker; GuruShots, “The World’s Greatest Photography Game,” a skill-based photo challenge game; and Emojipedia, the #1 trusted source for ‘all things emoji.’ For more information, visit https://www.investor.zedge.net/ .

 

Follow us on X: @Zedge @Emojipedia

Follow us on Zedge LinkedIn Emojipedia LinkedIn

 

Download the Zedge App:

 

 

 

Download the GuruShots App:

 

 

 

Contact:

 

Brian Siegel, IRC, MBA

Senior Managing Director

Hayden IR

(346) 396-8696

ir@zedge.net

 

 

3

v3.25.0.1

Cover	Feb. 05, 2025
Cover [Abstract]
Document Type	8-K/A
Amendment Flag	true
Amendment Description	On January 21, 2025, Zedge, Inc. (the “Company”) filed a Current Report on 8-K (the “Original 8-K”) under Item 2.05 to, among other things, report a restructuring initiative. Pursuant to Item 2.05(d) of Form 8-K, the Company is now filing this Amendment No. 1 to refine its disclosure related to the scope of the restructuring efforts and the amount of its estimated savings related to the restructuring. The disclosure included in Item 2.05 of the Original 8-K otherwise remains unchanged. The Original Report is hereby amended to provide the information set forth herein, which was unable to be determined at the time of the Original Report.
Document Period End Date	Feb. 05, 2025
Entity File Number	1-37782
Entity Registrant Name	Zedge, Inc.
Entity Central Index Key	0001667313
Entity Tax Identification Number	26-3199071
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	1178 Broadway
Entity Address, Address Line Two	Ste. 1450 (3rd Floor)
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10001
City Area Code	330
Local Phone Number	577-3424
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Class B common stock, par value $0.01 per share
Trading Symbol	ZDGE
Security Exchange Name	NYSEAMER
Entity Emerging Growth Company	false

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