Arena Group Holdings, Inc. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer(s) and principal financial officer(s), or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. In accordance with Exchange Act Rules 13a-15 and 15d-15, an evaluation was completed under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of and for the fiscal year ended December 31, 2022. In light of the material weaknesses described below, we performed additional analyses, reconciliations, and other post-closing procedures to determine whether our consolidated financial statements are prepared in accordance with generally accepted accounting principles. Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective in providing reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act was recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. In addition, as permitted by SEC guidance, management excluded from its assessment the operations of Parade, which was acquired on April 1, 2022 and accounted for approximately 13.1% of our consolidated total assets as of December 31, 2022 and approximately 6.0% of our consolidated revenue for the year ended December 31, 2022, and Men’s Journal which was acquired on December 15, 2022 and accounted for approximately 12.3% of our consolidated total assets as of December 31, 2022 and approximately 0.2% of our consolidated revenue for the year ended December 31, 2022. Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act). Internal control over financial reporting is a process, including policies and procedures, designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles. Our management assessed our internal control over financial reporting based on the Internal Control—Integrated Framework (2013 Framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Our system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Based on our evaluation under the framework in COSO, our management concluded that our internal control over financial reporting was not effective as of December 31, 2022 due to the material weaknesses described below. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. We have identified the following control deficiencies that constitute material weaknesses in our internal control over financial reporting as of December 31, 2022: (i) we had inadequate segregation of duties consistent with control objectives related to our information technology general controls (“ITGCs”), specifically as it relates to change management; and (ii) there was insufficient validation of non-Google impression data provided by certain third-party service providers. These material weaknesses continue and have not been remediated as of the date of filing of this Annual Report on Form 10-K. 47 Management is currently evaluating remedial actions to address the material weaknesses identified as of December 31, 2022. The material weaknesses identified did not result in any misstatement of our financial statements. Auditor’s Report on Internal Control Over Financing Reporting The effectiveness of our internal control over financial reporting as of December 31, 2022 has been audited by Marcum LLP , an independent registered public accounting firm, as stated in their report included in Part II, Item 8 of this Annual Report on Form 10-K. Changes in Internal Control over Financial Reporting There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Inherent Limitations on the Effectiveness of Controls The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, in designing and evaluating the disclosure controls and procedures, management recognizes that any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting. Item 9B. Other Information None. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. Part III Item 10. Directors, Executive Officers and Corporate Governance The information required under this item is incorporated herein by reference to our proxy statement for our 2023 Annual Meeting of Stockholders to be filed with the SEC not later than 120 days after December 31, 2022. Item 11. Executive Compensation The information required under this item is incorporated herein by reference to our proxy statement for our 2023 Annual Meeting of Stockholders to be filed with the SEC not later than 120 days after December 31, 2022. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required under this item is incorporated herein by reference to our proxy statement for our 2023 Annual Meeting of Stockholders to be filed with the SEC not later than 120 days after December 31, 2022, with the exception of those items listed below. 48 Securities Authorized for Issuance Under Equity Compensation Plans A summary of our securities authorized for issuance under equity compensation plans as of December 31, 2022 is as follows: Equity Compensation Plan Information Plan Category (a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (b) Weighted Average Exercise Price of Outstanding Options, Warrants and Rights (c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) Equity compensation plans approved by security holders 6,060,877 $ 9.77 504,782 Equity compensation plans not approved by security holders 1,142,338 11.25 119,756 Total 7,203,215 $ 10.01 624,538 Plans Adopted Without Approval of Security Holders Publisher Partner Warrant Program On May 20, 2020, our Board approved the third Publisher Partner Warrant Program, which superseded the second Publisher Partner Warrant Program and authorized us to grant Publisher Partner Warrants to purchase up to 90,910 shares of our common stock. Such Publisher Partner Warrants granted under the third Publisher Partner Warrant Program were to be issued with the same terms as under the second Publisher Partner Warrant Program that was terminated on March 10, 219, except that any Publisher Partner Warrants issued under the third Publisher Partner Warrant Program are no longer subject to performance conditions. Warrants issued under the second Publisher Partner Warrant Program were to be issued with the same terms as under the first Publisher Partner Program, except that the shares of our common stock underlying the Publisher Partner Warrants under the second Publisher Partner Warrant Program were to be earned and vest over three-years. Warrants issued prior to the third and second Publisher Partner Warrant Programs, or under the first Publisher Partner Warrant Program that was approved by our Board on December 19, 2016, were exercisable over a three-year vesting period once earned based on certain performance conditions within six-months issuance, on a cashless basis with a five-year term. The issuance of the Publisher Partner Warrants is administered by management and approved by our Board. We have not granted any Publisher Partner Warrants under any such program since fiscal 2018. On November 2, 2022, our Board approved a plan (the “Warrant Incentive Program”) to grant warrants to certain publishers (the “New Publisher Partner Warrants”), that authorized us to grant New Publisher Partner Warrants to purchase up to 33,000 shares of our common stock. The New Publisher Partner Warrants granted under the Warrant Incentive Program will have the following terms: (i) one-third will become exercisable and vest on the one-year anniversary of the issuance; (ii) the remaining warrants will become exercisable and vest in a series of twenty-four (24) successive equal monthly installments following the first anniversary of the issuance; and (iii) the New Publisher Partner Warrants will have a five-year term. Ross Levinsohn, our Chief Executive Officer, has the authority granted by our Board, to issue up to 400 warrants at his discretion under the Warrant Incentive Program to each Publisher Partner. Outside Options During fiscal 2018, our Board approved the granting of options outside of the 2016 Plan (the “Outside Options”) to certain officers, directors, and employees to provide equity incentive in exchange for consideration in the form of services to us. The Outside Options are exercisable for shares of our common stock. The Outside Options either vest upon the passage of time or are tied to the achievement of certain performance targets. On January 8, 2021, our Board approved an amendment to the Outside Option award grants, which eliminated the performance targets, therefore, the awards continue to vest solely on the time vesting conditions. Our Board approved a repricing of our Outside Options for a certain employee on March 18, 2022 and our stockholders approved the repricing on June 2, 2022. 49 Warrants On June 14, 2019, we issued 999,540 warrants to acquire our common stock to ABG in connection with the Sports Illustrated Licensing Agreement, expiring in ten years. Half the warrants have an exercise price of $9.24 per share (the “$9.24 Warrants”). The other half of the warrants have an exercise price of $18.48 per share (the “$18.48 Warrants”). The warrants provide for the following: (1) 40% of the $9.24 Warrants and 40% of the $18.48 Warrants vest in equal monthly increments over a period of two years beginning on the one year anniversary of the date of issuance of the warrants (any unvested portion of such warrants to be forfeited by ABG upon certain terminations by us of the Sports Illustrated Licensing Agreement) (the “Time-Based Warrants”); (2) 60% of the $9.24 Warrants and 60% of the $18.48 Warrants vest based on the achievement of certain performance goals for the licensed brands in calendar years 2020, 2021, 2022, or 2023; (3) under certain circumstances we may require ABG to exercise all (and not less than all) of the warrants, in which case all of the warrants will be vested; (4) all of the warrants automatically vest upon certain terminations of the Licensing Agreement by ABG or upon a change of control of the Company (the “Performance-Based Warrants”); and (5) ABG has the right to participate, on a pro-rata basis (including vested and unvested warrants, exercised or unexercised), in any future equity issuance (subject to customary exceptions). In June 2021, the exercise price of fifty percent (50%) of the $18.48 Warrants was changed to $9.24 per share in exchange for additional benefits under the Sports Illustrated Licensing Agreement. On October 26, 2020, we issued 5,681 warrants to AllHipHop, LLC (the “AllHipHop Warrants”) to acquire our common stock in exchange for the surrender and termination of 6,819 previously issued Publisher Partner Warrants, with an exercise price of $14.30. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required under this item is incorporated herein by reference to our proxy statement for our 2023 Annual Meeting of Stockholders to be filed with the SEC not later than 120 days after December 31, 2022. Item 14. Principal Accountant Fees and Services The information required under this item is incorporated herein by reference to our proxy statement for our 2023 Annual Meeting of Stockholders to be filed with the SEC not later than 120 days after December 31, 2022. Part IV Item 15. Exhibits and Financial Statement Schedules (a) The following documents are filed as part of this Annual Report: 1. Index to Consolidated Financial Statements . Our consolidated financial statements and the Report of Marcum LLP, Independent Registered Public Accounting Firms are included in Part IV of this Annual Report on the pages indicated: Page Report of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets as of December 31, 2022 and 2021 F-4 Consolidated Statements of Operations for the Years Ended December 31, 2022 and 2021 F-5 Consolidated Statements of Stockholders’ Deficiency for the Years Ended December 31, 2022 and 2021 F-6 Consolidated Statements of Cash Flows for the Years Ended December 31, 2022 and 2021 F-8 Notes to Consolidated Financial Statements F-9 2. Financial Statement Schedules . Reference is made to the Financial Statements filed under Item 8, Part II of this Annual Report. 50 Exhibit Description 2.1 Agreement and Plan of Merger, dated as of March 13, 2018, by and among the Company, HP Acquisition Co., Inc., HubPages, Inc., and Paul Edmondson as the securityholder representative, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on March 19, 2018. 2.2 Amendment to Agreement and Plan of Merger, dated as of April 25, 2018, by and among TheMaven, Inc., HP Acquisition Co., Inc., HubPages, Inc., and Paul Edmondson as the securityholder representative, which was filed as Exhibit 2.2 to our Annual Report on Form 10-K filed on January 8, 2021. 2.3 Second Amendment to Agreement and Plan of Merger, dated as of June 1, 2018, by and among TheMaven, Inc., HP Acquisition Co., Inc., HubPages, Inc., and Paul Edmondson as the securityholder representative, which was filed as Exhibit 10.1 to our Current Report on Form 8-K/A filed on June 4, 2018. 2.4 Third Amendment to Agreement and Plan of Merger, dated as of May 31, 2019, by and among TheMaven, Inc., HP Acquisition Co., Inc., HubPages, Inc., and Paul Edmondson as the securityholder representative, which was filed as Exhibit 2.4 to our Annual Report on Form 10-K filed on January 8, 2021. 2.5 Fourth Amendment to Agreement and Plan of Merger, dated as of December 15, 2020, by and among TheMaven, Inc., HP Acquisition Co., Inc., HubPages, Inc., and Paul Edmondson as the securityholder representative, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on December 21, 2020. 2.6 Amended and Restated Asset Purchase Agreement, dated as of August 4, 2018, by and among the Company, Maven Coalition, Inc., and Say Media, Inc., which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on August 9, 2018. 2.7 Amendment to Amended and Restated Asset Purchase Agreement, dated as of August 24, 2018, by and among the Company, Maven Coalition, Inc., and Say Media, Inc., which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on August 29, 2018. 2.8 Agreement and Plan of Merger, dated as of October 12, 2018, by and among the Company, SM Acquisition Co., Inc., Say Media, Inc., and Matt Sanchez as the Securityholder Representative, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on October 17, 2018. 2.9 Amendment to Agreement and Plan of Merger, dated as of October 17, 2018, by and among the Company, SM Acquisition Co., Inc., Say Media, Inc., and Matt Sanchez as the Securityholder Representative, which was filed as Exhibit 10.2 to our Current Report on Form 8-K filed on October 17, 2018. 2.10 Agreement and Plan of Merger, dated as of June 11, 2019, by and among the Company, TST Acquisition Co., Inc., and TheStreet, Inc., which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on June 12, 2019. 2.11 Asset Purchase Agreement, dated December 7, 2022, by and among The Arena Media Brands, LLC, Weider Publications, LLC and A360 Media, LLC, which was filed as Exhibit 2.1 to our Current Report on Form 8-K filed on December 20, 2022. 3.1 Amended and Restated Certificate of Incorporation of the Registrant, which was filed as Exhibit 3.1 to our Current Report on Form 8-K filed on October 13, 2021. 3.2 Second Amended and Restated Bylaws, which was filed as Exhibit 3.2 to our Current Report on Form 8-K filed on October 13, 2021. 3.3 Certificate of Elimination of Series F Convertible Preferred Stock as filed with the Delaware Secretary of State on September 7, 2021, which was filed as Exhibit 3.1 to our Current Report on Form 8-K filed September 13, 2021. 3.4 Certificate of Elimination of Series I Convertible Preferred Stock as filed with the Delaware Secretary of State on September 7, 2021, which was filed as Exhibit 3.2 to our Current Report on Form 8-K filed September 13, 2021. 3.5 Certificate of Elimination of Series J Convertible Preferred Stock as filed with the Delaware Secretary of State on September 7, 2021, which was filed as Exhibit 3.3 to our Current Report on Form 8-K filed September 13, 2021. 3.6 Certificate of Elimination of Series K Convertible Preferred Stock as filed with the Delaware Secretary of State on September 7, 2021, which was filed as Exhibit 3.4 to our Current Report on Form 8-K filed September 13, 2021. 3.7 Certificate of Amendment as filed with the Delaware Secretary of State on January 20, 2022, which was filed Exhibit 3.1 to our Current Report on Form 8-K filed January 26, 2022. 3.8 Certificate of Correction of the Certificate of Amendment of the Amended and Restated Certificate of Incorporation, filed with the Secretary of State of the State of Delaware on January 26, 2022, which was filed as Exhibit 3.2 to our Current Report on Form 8-K filed January 26, 2022. 51 3.9 Certificate of Correction of the Certificate of Amendment of the Amended and Restated Certificate of Incorporation, filed with the Secretary of State of the State of Delaware on February 3, 2022, which was filed as Exhibit 3.1 to our Current Report on Form 8-K filed February 9, 2022. 4.1 Specimen Common Stock Certificate, which was filed as Exhibit 4.3 to Amendment No. 1 to Registration Statement on Form SB-2/A (Registration No. 333-48040) on September 23, 1996. 4.2 Common Stock Purchase Warrant issued on June 6, 2018 to L2 Capital, LLC, which was filed as Exhibit 10.3 to our Current Report on Form 8-K filed on June 12, 2018. 4.3 Common Stock Purchase Warrant issued on June 15, 2018 to Strome Mezzanine Fund LP, which was filed as Exhibit 10.4 to our Current Report on Form 8-K filed on June 21, 2018. 4.4 Form of Common Stock Purchase Warrant issued on October 18, 2018, which was filed as Exhibit 10.3 to our Current Report on Form 8-K filed on October 24, 2018. 4.5 Form of Warrant for Channel Partners Program, which was filed as Exhibit 4.3 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2016. 4.6 Form of MDB Warrant issued in connection with the Share Exchange Agreement, which was filed as Exhibit 10.3 to our Current Report on Form 8-K, filed on November 7, 2016. 4.7 Common Stock Purchase Warrant (exercise price $0.42 per share), dated June 14, 2019, issued to ABG-SI LLC, which was filed as Exhibit 4.16 to our Annual Report on Form 10-K, filed on August 16, 2021. 4.8 Common Stock Purchase Warrant (exercise price $0.84 per share), dated June 14, 2019, issued to ABG-SI LLC, which was filed as Exhibit 4.17 to our Annual Report on Form 10-K filed on January 8, 2021. 4.9 Form of 2019 Warrant for Channel Partners Program, which was filed as Exhibit 4.18 to our Annual Report on Form 10-K filed on April 9, 2021. 4.10 Form of 2020 Warrant for Channel Partners Program, which was filed as Exhibit 4.19 to our Annual Report on Form 10-K filed on April 9, 2021. 4.18 Form of Bridge Notes. which was filed as Exhibit 4.1 to our Current Report on Form 8-K filed on December 20, 2022. 4.19* Description of Securities. 10.1 Securities Purchase Agreement, dated January 4, 2018, by and between the Company and certain investors named therein, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on January 5, 2018. 10.2 Registration Rights Agreement, dated January 4, 2018, by and between the Company and certain investors named therein, which was filed as Exhibit 10.2 to our Current Report on Form 8-K filed on January 5, 2018. 10.3 Securities Purchase Agreement, dated March 30, 2018, by and among the Company and certain investors named therein, which was filed as Exhibit 10.11 to our Annual Report on Form 10-K filed on January 8, 2021. 10.4 Registration Rights Agreement, dated March 30, 2018, by and among the Company and certain investors named therein, which was filed as Exhibit 10.12 to our Annual Report on Form 10-K filed on January 8, 2021. 10.5 Securities Purchase Agreement, dated June 15, 2018, between the Company and each purchaser named therein, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on June 21, 2018. 10.6 Registration Rights Agreement, dated June 15, 2018, by and between the Company and each purchaser named therein, which was filed as Exhibit 10.3 to our Current Report on Form 8-K filed on June 21, 2018. 10.7 Form of Securities Purchase Agreement, dated as of August 9, 2018, by and between the Company and each purchaser named therein, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on August 10, 2018. 10.8 Form of Registration Rights Agreement, dated as of August 9, 2018, by and between the Company and each purchaser named therein, which was filed as Exhibit 10.2 to our Current Report on Form 8-K filed on August 10, 2018. 10.9 Securities Purchase Agreement, dated October 18, 2018, by and between the Company and each investor named therein, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on October 24, 2018. 10.10 Securities Purchase Agreement, dated December 12, 2018, by and between the Company and each investor named therein, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on December 13, 2018. 10.11 Registration Rights Agreement, dated December 12, 2018, by and between the Company and each investor named therein, which was filed as Exhibit 10.3 to our Current Report on Form 8-K filed on December 13, 2018. 10.12 Securities Purchase Agreement, dated March 18, 2019, by and between the Company and each investor named therein, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on March 22, 2019. 10.13 Registration Rights Agreement, dated March 18, 2019, by and between the Company and each investor named therein, which was filed as Exhibit 10.3 to our Current Report on Form 8-K filed on March 22, 2019. 10.14 Securities Purchase Agreement, dated March 27, 2019, by and between the Company and each investor named therein, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on March 28, 2019. 52 10.15 Registration Rights Agreement, dated March 27, 2019, by and between the Company and each investor named therein, which was filed as Exhibit 10.3 to our Current Report on Form 8-K filed on March 28, 2019. 10.16 Securities Purchase Agreement, dated April 8, 2019, by and between the Company and each investor named therein, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on April 12, 2019. 10.17 Registration Rights Agreement, dated April 8, 2019, by and between the Company and each investor named therein, which was filed as Exhibit 10.3 to our Current Report on Form 8-K filed on April 12, 2019. 10.18 Pledge and Security Agreement, dated June 10, 2019, by and among the Company, Maven Coalition, Inc., HubPages, Inc., Say Media, Inc., TST Acquisition Co., Inc., and the investor named therein, which was filed as Exhibit 10.5 to our Current Report on Form 8-K filed on June 12, 2019. 10.19 Confirmation and Ratification Agreement, dated June 14, 2019, by and among the Company, Maven Coalition, Inc., HubPages, Inc., Say Media, Inc., TST Acquisition Co., Inc., and the investor named therein, which was filed as Exhibit 10.3 to our Current Report on Form 8-K filed on June 19, 2019. 10.20 Form of Securities Purchase Agreement, dated as of June 28, 2019, by and among the Company and each of the several purchasers named thereto, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on July 3, 2019. 10.21 Form of Registration Rights Agreement, dated as of June 28, 2019, by and among the Company and each of the several purchasers named thereto, which was filed as Exhibit 10.2 to our Current Report on Form 8-K filed on July 3, 2019. 10.22 Form of Second Amended and Restated Promissory Note due June 14, 2022, which was filed as Exhibit 10.2 to our Current Report on Form 8-K filed on September 3, 2019. 10.23 Form of Securities Purchase Agreement, dated as of October 7, 2019, by and among the Company and each of the several purchasers named therein, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on October 11, 2019. 10.24 Form of Registration Rights Agreement, dated as of October 7, 2019, by and among the Company and each of the several purchasers named therein, which was filed as Exhibit 10.2 to our Current Report on Form 8-K filed on October 11, 2019. 10.25 Third Amended and Restated Note Purchase Agreement, dated December 15, 2022, by and among the Company, the subsidiary guarantors party thereto, BRF Finance Co., LLC, as agent and purchaser, and the other purchasers from time to time party thereto, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on December 20, 2022. 10.26 Sixth Amendment to Financing and Security Agreement, dated December 15, 2022, by and among the Company, the subsidiaries of the Company party thereto and SLR Digital Finance LLC, which was filed as Exhibit 10.2 to our Current Report on Form 8-K filed on December 20, 2022. 10.27 Form of 15% Delayed Draw Term Note, issued on March 24, 2020, which was filed as Exhibit 10.2 to our Current Report on Form 8-K filed on March 30, 2020. 10.28 Form of Series H Securities Purchase Agreement, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on August 20, 2020. 10.29 Sublease, dated January 14, 2020, by and between Saks & Company LLC and Maven Coalition, Inc., which was filed as Exhibit 10.51 to our Annual Report on Form 10-K filed on August 16, 2021. 10.30 Office Lease Agreement, dated October 25, 2019, by and between Street Retail West I, LP and the Company, which was filed as Exhibit 10.54 to our Annual Report on Form 10-K filed on August 16, 2021. 10.31 Asset Purchase Agreement, dated March 9, 2020, by and among Maven Coalition, Inc., Petametrics Inc., doing business as LiftIgniter, and the Company, which was filed as Exhibit 10.59 to our Annual Report on Form 10-K filed on August 16, 2021. 10.32+ Form of Stock Option Award Agreement – 2016 Stock Incentive Plan, which was filed as Exhibit 10.62 to our Annual Report on Form 10-K filed on August 16, 2021. 10.33+ Form of Stock Option Award Agreement – 2019 Equity Incentive Plan, which was filed as Exhibit 10.63 to our Annual Report on Form 10-K filed on August 16, 2021. 10.34+ Independent Director Agreement, effective as of September 3, 2018, by and between the Company and Todd D. Sims, which was filed as Exhibit 10.71 to our Annual Report on Form 10-K filed on August 16, 2021. 10.35+ First Amendment to the 2016 Stock Incentive Plan, which was filed as Exhibit 10.80 to our Annual Report on Form 10-K filed on August 16, 2021. 10.36+ Second Amendment to the 2016 Stock Incentive Plan, which was filed as Exhibit 10.81 to our Annual Report on Form 10-K filed on August 16, 2021. 10.37+ Form of Restricted Equity Award Grant Notice – 2019 Equity Incentive Plan, which was filed as Exhibit 10.82 to our Annual Report on Form 10-K filed on August 16, 2021. 10.38+ Form of Restricted Stock Unit Grant Notice – 2019 Equity Incentive Plan, which was filed as Exhibit 10.83 to our Annual Report on Form 10-K filed on August 16, 2021. 53 10.39+ Stock Option Award Agreement, dated March 11, 2019, by and between the Company and Douglas B. Smith, which was filed as Exhibit 10.84 to our Annual Report on Form 10-K filed on August 16, 2021. 10.40+ Stock Option Award Agreement, dated March 11, 2019, by and between the Company and Douglas B. Smith, which was filed as Exhibit 10.85 to our Annual Report on Form 10-K filed on August 16, 2021. 10.41 Channel Partners Warrant Program adopted on May 20, 2020, which was filed as Exhibit 10.112 to our Annual Report on Form 10-K filed on April 9, 2021. 10.42+ Stock Option Award Agreement, dated January 16, 2019, by and between the Company and Andrew Q. Kraft, which was filed as Exhibit 10.119 to our Annual Report on Form 10-K filed on April 9, 2021. 10.43+ Stock Award Agreement, dated January 16, 2019, by and between the Company and Andrew Q. Kraft, which was filed as Exhibit 10.120 to our Annual Report on Form 10-K filed on April 9, 2021. 10.44+ Maven Executive Bonus Plan, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on January 14, 2021. 10.45 Amendment No. 1 to Agreement and Plan of Merger, dated July 12, 2019, by and among the Company, TheStreet, Inc., and TST Acquisition Co., Inc., which was filed as Exhibit 10.122 to our Annual Report on Form 10-K filed on April 9, 2021. 10.46+ Executive Employment Agreement, effective January 1, 2021, by and between the Company and Paul Edmondson, which was filed as Exhibit 10.4 to our Current Report on Form 8-K on February 23, 2021. 10.47+ Amended and Restated Executive Employment Agreement, effective January 1, 2021, by and between the Company and Douglas B. Smith, which was filed as Exhibit 10.2 to our Current Report on Form 8-K on February 23, 2021. 10.48+ Stock Option Grant Notice, dated April 10, 2019, by and between the Company and Paul Edmondson, which was filed as Exhibit 10.127 to our Annual Report on Form 10-K filed on April 9, 2021. 10.49+ Stock Option Grant Notice, dated April 10, 2019, by and between the Company and Douglas Smith, which was filed as Exhibit 10.130 to our Annual Report on Form 10-K filed on April 9, 2021. 10.50+ Form of Amendment to Stock Option Award Agreement, by and between the Company and certain grantees awarded stock options on April 10, 2019, which was filed as Exhibit 10.131 to our Annual Report on Form 10-K filed on April 9, 2021. 10.51+ Executive Employment Agreement, effective as of February 18, 2021, by and between the Company and Robertson Barrett, which was filed as Exhibit 10.3 to our Current Report on Form 8-K on February 23, 2021. 10.52 Services Agreement, dated as of December 22, 2020, by and between the Company and Whisper Advisors, LLC, which was filed as Exhibit 10.134 to our Annual Report on Form 10-K on April 9, 2021. 10.53+ Stock Option Award Agreement, dated September 14, 2018, by and between the Company and Paul Edmondson, which was filed as Exhibit 10.135 to our Annual Report on Form 10-K on April 9, 2021. 10.54+ Amended and Restated Executive Employment Agreement, effective January 1, 2021, by and between the Company and Andrew Kraft, which was filed as Exhibit 10.6 to our Current Report on Form 8-K on February 23, 2021. 10.55+ Second Amended and Restated Executive Employment Agreement, effective January 1, 2021, by and between the Company and Avi Zimak, which was filed as Exhibit 10.7 to our Current Report on Form 8-K on February 23, 2021. 10.56+ Second Amendment to theMaven, Inc.’s 2019 Equity Incentive Plan, dated February 18, 2021, which was filed as Exhibit 10.1 to our Current Report on Form 8-K on February 24, 2021. 10.57+ First Amendment to theMaven, Inc.’s 2019 Equity Incentive Plan, dated March 16, 2020, which was filed as Exhibit 10.141 to our Annual Report on Form 10-K on April 9, 2021. 10.58+ 2019 Equity Incentive Plan, which was filed as Exhibit 10.142 to our Annual Report on Form 10-K on April 9, 2021. 10.59 2016 Stock Incentive Plan, which was filed as Exhibit 4.4 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2016. 10.60 Financing and Security Agreement, dated February 2020, by and among Maven Coalition, Inc., theMaven, Inc., Maven Media Brands, LLC, TheStreet, Inc., and FPP Finance LLC, which was filed as Exhibit 10.8 to our Quarterly Report on Form 10-Q on May 7, 2021. 10.61 First Amendment to Financing and Security Agreement, dated March 24, 2020, by and among Maven Coalition, Inc., theMaven, Inc., Maven Media Brands, LLC, TheStreet, Inc., and FPP Financing LLC, which was filed as Exhibit 10.9 to our Quarterly Report on Form 10-Q on May 7, 2021. 10.62 Intercreditor Agreement, dated February 24, 2020, by and between FPP Finance LLC and BRF Finance Co., LLC, which was filed as Exhibit 10.10 to our Quarterly Report on Form 10-Q on May 7, 2021. 54 10.63 Amendment No. 1 to Intercreditor Agreement, dated March 24, 2020, by and between FPP Finance LLC and BRF Finance Co., LLC, which was filed as Exhibit 10.11 to our Quarterly Report on Form 10-Q on May 7, 2021. 10.64 Form of Securities Purchase Agreement among the Company and each of the several purchasers signatory thereto, which was filed as Exhibit 10.2 to our Current Report on Form 8-K on May 25, 2021. 10.65 Form of Registration Rights Agreement among the Company and each of the several purchasers signatory thereto, which was filed as Exhibit 10.3 to our Current Report on Form 8-K on May 25, 2021. 10.66 Stock Purchase Agreement, dated June 4, 2021, by and among the Company, Maven Media Brands, LLC, College Spun Media Incorporated, Matthew Lombardi, Alyson Shontell Lombardi, Timothy Ray, Andrew Holleran, and the Representative, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on June 7, 2021. 10.67 Second Amended and Restated Executive Employment Agreement, effective August 26, 2020, by and between the Company and Ross Levinsohn, which was filed as Exhibit 10.1 to our Current Report on Form 8-K on February 23, 2021. 10.68 Third Amendment to Financing and Security Agreement, dated as of December 6, 2021, by and among theMaven, Inc., Maven Coalition, Inc., Maven Media Brands, LLC, TheStreet, Inc., College Spun Media Incorporated, and Fast Pay Partners LLC, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on December 10, 2021. 10.69+ Amendment No. 1 to Second Amended & Restated Executive Employment Agreement, dated as of December 22, 2021, by and between the Company and Ross Levinsohn, which was filed as Exhibit 10.2 to our Current Report on Form 8-K filed on January 10, 2022. 10.70 Form of Stock Purchase Agreement by and between the Company and certain investors, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on January 28, 2022. 10.71 Asset Purchase Agreement between the Company and Fulltime Fantasy Sports, LLC, dated July 15, 2021, which was filed as Exhibit 10.5 to our Quarterly Report on Form 10-Q on November 15, 2021. 10.72^ Amended Licensing Agreement by and between the Company and ABG-SI LLC, which was filed as Exhibit 10.1 to our Current Report on Form 8-K/A filed on November 29, 2022. 10.73*^ Amendment No. 5 to Licensing Agreement by and between the Company and ABG-SI LLC. 21.1* Subsidiaries of the Arena Group Holdings, Inc. 23.1* Consent of Marcum LLP, independent registered accounting firm. 24.1* Power of Attorney (included in the signature pages hereto) 31.1* Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended. 31.2* Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended. 32.1* Certification of Chief Executive Officer pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002. 32.2* Certification of Chief Financial Officer pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002. 101.INS Inline XBRL* Instance Document. 101.SCH Inline XBRL* Taxonomy Extension Schema Document. 101.CAL Inline XBRL* Taxonomy Extension Calculation Linkbase Document. 101.DEF Inline XBRL* Taxonomy Extension Definition Linkbase Document. 101.LAB Inline XBRL* Taxonomy Extension Label Linkbase Document. 101.PRE Inline XBRL* Taxonomy Presentation Linkbase Document. 104* Cover Page Interactive Data (embedded within the Inline XBRL document and contained in Exhibit 101) * Filed Herewith. ^ Registrant has omitted portions of the exhibit as permitted under Item 601(b)(10) of Regulations S-K. + Indicates a management or compensatory plan or arrangement in which directors or executive officers are eligible to participate. The certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Annual Report on Form 10-K and are not deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall they be deemed incorporated by reference into any filing under the Securities Act of the Exchange Act. (b) Exhibits. See Item 15(a) above. Item 16. Form 10–K Summary None. 55 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized. The Arena Group Holdings, Inc. Dated: March 31, 2023 By: /s/ ROSS LEVINSOHN Ross Levinsohn Chief Executive Officer and Chairman of the Board (Principal Executive Officer) By: /s/ DOUGLAS B. SMITH Douglas B. Smith Chief Financial Officer (Principal Financial Officer) By: /s/ SPIROS CHRISTOFORATOS Spiros Christoforatos Chief Accounting Officer (Principal Accounting Officer) Power of Attorney KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Ross Levinsohn and Douglas B. Smith, jointly and severally, as his or her attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the U.S. Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the Registrant and in the capacities indicated and on the dates indicated. Signature Title /s/ ROSS LEVINSOHN Chief Executive Officer and Chairman of the Board Ross Levinsohn (Principal Executive Officer) Date: March 31, 2023 /s/ DOUGLAS B. SMITH Chief Financial Officer Douglas B. Smith (Principal Financial Officer) Date: March 31, 2023 /s/ SPIROS CHRISTOFORATOS Chief Accounting Officer Spiros Christoforatos (Principal Accounting Officer) Date: March 31, 2023 /s/ H. HUNT ALLRED Director H. Hunt Allred Date: March 31, 2023 /s/ CARLO ZOLA Director Carlo Zola Date: March 31, 2023 /s/ CHRISTOPHER PETZEL Director Christopher Petzel Date: March 31, 2023 /s/ LAURA LEE Director B. Laura Lee Date: March 31, 2023 /s/ DANIEL SHRIBMAN Director Daniel Shribman Date: March 31, 2023 /s/ TODD D. SIMS Director Todd D. Sims Date: March 31, 2023 56 The Arena Group Holdings, Inc. and Subsidiaries Index to Consolidated Financial Statements PAGE Report of Independent Registered Public Accounting Firm (PCAOB ID NO: 688 ) F-2 Consolidated Balance Sheets as of December 31, 2022 and 2021 F-4 Consolidated Statements of Operations for the Years Ended December 31, 2022 and 2021 F-5 Consolidated Statements of Stockholders’ Deficiency for the Years Ended December 31, 2022 and 2021 F-6 Consolidated Statements of Cash Flows for the Years Ended December 31, 2022 and 2021 F-8 Notes to Consolidated Financial Statements F-9 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of Directors of The Arena Group Holdings, Inc. and Subsidiaries Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of The Arena Group Holdings, Inc and Subsidiaries (the “Company”) as of December 31, 2022 and 2021, the related consolidated statements of operations, stockholders’ deficiency and cash flows for each of the two years in the period ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2022, and 2021, in conformity with accounting principles generally accepted in the United States of America. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), the Company's internal control over financial reporting as of December 31, 2022, based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013 and our report dated March 31, 2023 , expressed an adverse opinion on the effectiveness of the Company’s internal control over financial reporting because of the existence of material weaknesses. Explanatory Paragraph – Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1, the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Evaluation of acquisition-date fair value of acquired intangible assets As discussed in Note 4 to the consolidated financial statements, the Company acquired Athlon Holdings, Inc. (“Parade”) on April 1, 2022 for a purchase price of $15.9 million and A360 Media, LLC (“Men’s Journal”) on December 15, 2022 for a purchase price of $25.0 million. In connection with these business combinations, the Company recorded intangible assets related to advertiser relationships and trade names for $8.5 million and related to advertiser relationships and brand names for $13.0 million, respectively. We identified and evaluated the acquisition-date fair value of the intangible assets acquired in the transactions as critical audit matters. These critical audit matters required a degree of subjectivity in calculating its fair value. A discounted cash flow model included internally-developed assumptions with limited observable market information was used to calculate the value and was sensitive to possible changes to key assumptions, including: (i) forecasted revenue growth rates, (ii) forecasted earnings before interest, tax, depreciation, and amortization (EBITDA) margins and (iii) weighted-average cost of capital (WACC), including the discount rate. The primary procedures we performed to address these critical audit matters included evaluating the Company’s forecasted revenue growth rates for each acquisition to their respective historical results to assess Parade’s and Men’s Journal’s ability to accurately forecast. In addition, we involved a valuation specialist to assist with (i) evaluating the valuation approach used by the Company to calculate the fair value of the intangible assets and (ii) assessing the Company’s WACC calculation, by comparing it against an independently estimated WACC. /s/ Marcum llp Marcum LLP We have served as the Company’s auditor since 2019. Los Angeles, California March 31, 2023 F- 2 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER FINANCIAL REPORTING To the Stockholders and Board of Directors of The Arena Group Holdings, Inc. and Subsidiaries Adverse Opinion on Internal Control over Financial Reporting We have audited The Arena Group Holdings, Inc.’s (the "Company") internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, because of the effect of the material weaknesses described in the following paragraph on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. A material weakness is a control deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. The following material weaknesses have been identified and included in “Management's Annual Report on Internal Control Over Financial Reporting”: The Company had inadequate segregation of duties consistent with control objectives related to our information technology general controls (“ITGCs”), specifically as relates to change management; and there was insufficient validation of non-Google impression data provided by certain third-party service providers. These material weaknesses continue and have not been remediated as of the date of filing this Annual Report. These material weaknesses were considered in determining the nature, timing and extent of audit tests applied in our audit of the fiscal 2022 consolidated financial statements, and this report does not affect our report dated March 31, 2023 on those financial statements. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets as of December 31, 2022 and the related consolidated statements of operations, shareholders’ deficiency, and cash flows for the year ended December 31, 2022 of the Company and our report dated March 31, 2023 expressed an unqualified opinion on those financial statements. Explanatory Paragraph – Excluded Subsidiaries As described in “Management Annual Report on Internal Control over Financial Reporting”, management has excluded its wholly-owned subsidiaries, Athlon Holdings, Inc. (“Parade”) and A360 Media LLC (“Men’s Journal”), from its assessment of internal control over financial reporting as of December 31, 2022 because these entities were acquired by the Company in purchase business combinations during 2022. We have also excluded Parade and Men’s Journal from our audit of internal control over financial reporting. These subsidiaries’ combined total assets and total revenues represent approximately 25.4% and 6.2%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2022. Basis for Opinion The Company's management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying "Management Annual Report on Internal Control Over Financial Reporting". Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Because of the inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that degree of compliance with the policies or procedures may deteriorate. /s/ Marcum llp Marcum LLP Los Angeles, CA March 31, 2023 F- 3 THE ARENA GROUP HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS 2022 2021 As of December 31, 2022 2021 ($ in thousands, except share data) Assets Current assets: Cash and cash equivalents $ 13,871 $ 9,349 Restricted cash 502 502 Accounts receivable, net 33,950 21,660 Subscription acquisition costs, current portion 25,931 30,162 Royalty fees - 11,250 Prepayments and other current assets 4,441 4,748 Total current assets 78,695 77,671 Property and equipment, net 735 636 Operating lease right-of-use assets 372 528 Platform development, net 10,330 9,299 Subscription acquisition costs, net of current portion 14,133 8,235 Acquired and other intangible assets, net 58,970 57,356 Other long-term assets 1,140 639 Goodwill 39,344 19,619 Total assets $ 203,719 $ 173,983 Liabilities, mezzanine equity and stockholders’ deficiency Current liabilities: Accounts payable $ 12,863 $ 11,982 Accrued expenses and other 23,102 24,011 Line of credit 14,092 11,988 Unearned revenue 58,703 54,030 Subscription refund liability 845 3,087 Operating lease liabilities 427 374 Liquidated damages payable 5,843 5,197 Bridge notes 34,805 - Current portion of long-term debt 65,684 5,744 Total current liabilities 216,364 116,413 Unearned revenue, net of current portion 19,701 15,277 Operating lease liabilities, net of current portion 358 785 Liquidating damages payable, net of current portion 494 7,008 Other long-term liabilities 5,307 7,556 Deferred tax liabilities 465 362 Long-term debt, net of current portion - 64,373 Total liabilities 242,689 211,774 Commitments and contingencies (Note 28) - - Mezzanine equity: Series G redeemable and convertible preferred stock, $ 0.01 par value, $ 1,000 per share liquidation value and 1,800 shares designated; aggregate liquidation value: $ 168 ; Series G shares issued and outstanding: 168 ; common shares issuable upon conversion: 8,582 at December 31, 2022 and 2021 168 168 Series H convertible preferred stock, $ 0.01 par value, $ 1,000 per share liquidation value and 23,000 shares designated; aggregate liquidation value: $ 14,356 and $ 15,066 ; Series H shares issued and outstanding: 14,356 and 15,066 ; common shares issuable upon conversion: 1,981,128 and 2,075,200 at December 31, 2022 and 2021, respectively 13,008 13,718 Total mezzanine equity 13,176 13,886 Stockholders’ deficiency: Common stock, $ 0.01 par value, authorized 1,000,000,000 shares: issued and outstanding; 18,303,193 and 12,635,591 shares December 31, 2022 and 2021, respectively 182 126 Common stock to be issued - - Additional paid-in capital 270,743 200,410 Accumulated deficit ( 323,071 ) ( 252,213 ) Total stockholders’ deficiency ( 52,146 ) ( 51,677 ) Total liabilities, mezzanine equity and stockholders’ deficiency $ 203,719 $ 173,983 See accompanying notes to consolidated financial statements. F- 4 THE ARENA GROUP HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS 2022 2021 Years Ended December 31, 2022 2021 ($ in thousands, except share data) Revenue $ 220,935 $ 189,140 Cost of revenue (includes amortization for developed technology and platform development for 2022 and 2021 of $ 9,459 and $ 8,829 , respectively) 132,923 110,530 Gross profit 88,012 78,610 Operating expenses Selling and marketing 72,489 81,929 General and administrative 53,499 55,612 Depreciation and amortization 17,650 16,345 Loss on impairment of assets 257 1,192 Loss on impairment of lease - 466 Loss on termination of lease - 7,345 Total operating expenses 143,895 162,889 Loss from operations ( 55,883 ) ( 84,279 ) Other (expenses) income Change in valuation of warrant derivative liabilities - 34 Interest expense, net ( 11,428 ) ( 10,449 ) Liquidated damages ( 1,140 ) ( 2,637 ) Gain upon debt extinguishment - 5,717 Total other expenses ( 12,568 ) ( 7,335 ) Loss before income taxes ( 68,451 ) ( 91,614 ) Income tax benefit 1,063 1,674 Loss from continuing operations ( 67,388 ) ( 89,940 ) Loss from discontinued operations, net of tax ( 3,470 ) - Net loss $ ( 70,858 ) $ ( 89,940 ) Basic and diluted net loss per common share: Continuing operations $ ( 3.82 ) $ ( 7.87 ) Discontinued operations ( 0.20 ) - Basic and diluted net loss per common share $ ( 4.02 ) $ ( 7.87 ) Weighted average number of common shares outstanding – basic and diluted 17,625,619 11,429,740 See accompanying notes to consolidated financial statements. F- 5 THE ARENA GROUP HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIENCY Year Ended December 31, 2022 Shares Par Value Shares Par Value Paid-in Capital Accumulated Deficit Stockholders’ Deficiency Common Stock Common Stock to be Issued Additional Total Shares Par Value Shares Par Value Paid-in Capital Accumulated Deficit Stockholders’ Deficiency ($ in thousands, except share data) Balance at January 1, 2022 12,635,591 $ 126 49,134 $ - $ 200,410 $ ( 252,213 ) $ ( 51,677 ) Beginning balance, value 12,635,591 $ 126 49,134 $ - $ 200,410 $ ( 252,213 ) $ ( 51,677 ) Issuance of common stock for restricted stock units 832,233 8 - - ( 8 ) - - Common stock withheld for taxes ( 373,394 ) ( 4 ) - - ( 4,464 ) - ( 4,468 ) Repurchase of restricted stock awards classified as liabilities ( 26,214 ) - - - - - - Issuance of common stock in connection with acquisitions 330,863 3 - - 3,138 - 3,141 Issuance of common stock in connection with merger 7,851 - ( 7,851 ) - - - - Issuance of common stock in connection with professional services 14,617 - - - 184 - 184 Issuance of common stock in connection with settlement of liquidated damages 505,655 5 - - 6,680 - 6,685 Gain upon issuance of common stock in connection with settlement of liquidated damages - - - - 323 - 323 Issuance of common stock upon conversion of Series H convertible preferred stock 97,980 1 - - 709 - 710 Issuance of common stock in connection with public offering 4,181,603 42 - - 30,448 - 30,490 Issuance of common stock upon exercise of stock options 96,408 1 - - 94 - 95 Stock-based compensation - - - - 33,229 - 33,229 Net loss - - - - - ( 70,858 ) ( 70,858 ) Ending balance, value 18,303,193 $ 182 41,283 $ - $ 270,743 $ ( 323,071 ) $ ( 52,146 ) Balance at December 31, 2022 18,303,193 $ 182 41,283 $ - $ 270,743 $ ( 323,071 ) $ ( 52,146 ) F- 6 Year Ended December 31, 2021 Common Stock Common Stock to be Issued Additional Total Shares Par Value Shares Par Value Paid-in Capital Accumulated Deficit Stockholders’ Deficiency ($ in thousands, except share data) Balance at January 1, 2021 10,415,618 $ 104 49,134 $ - $ 141,856 $ ( 162,273 ) $ ( 20,313 ) Beginning balance, value 10,415,618 $ 104 49,134 $ - $ 141,856 $ ( 162,273 ) $ ( 20,313 ) Issuance of restricted stock awards to the board of directors 48,856 - - - - - - Forfeiture of unvested restricted stock awards ( 6,844 ) - - - - - - Issuance of common stock for restricted stock units 34,395 - - - - - - Repurchase of restricted stock awards classified as liabilities ( 22,178 ) - - - - - - Reclassification of warrants to equity - - - - 1,113 - 1,113 Issuance of common stock in connection with professional services 14,205 - - - 125 - 125 Issuance of restricted stock in connection with an acquisition 228,898 2 - - 500 - 502 Issuance of common stock upon exercise of stock options 3,858 - - - - - - Common stock withheld for taxes ( 4,355 ) - - - ( 70 ) - ( 70 ) Issuance of common stock in connection with private placement 1,299,027 13 - - 19,825 - 19,838 Issuance of common stock upon conversion of Series H convertible preferred stock 624,111 7 - - 4,523 - 4,530 Stock-based compensation - - - - 32,538 - 32,538 Net loss - - - - - ( 89,940 ) ( 89,940 ) Balance at December 31, 2021 12,635,591 $ 126 49,134 $ - $ 200,410 $ ( 252,213 ) $ ( 51,677 ) Ending balance, value 12,635,591 $ 126 49,134 $ - $ 200,410 $ ( 252,213 ) $ ( 51,677 ) See accompanying notes to consolidated financial statements. F- 7 THE ARENA GROUP HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS 2022 2021 Years Ended December 31, 2022 2021 ($ in thousands) Cash flows from operating activities Net loss $ ( 70,858 ) $ ( 89,940 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation of property and equipment 539 443 Amortization of platform development and intangible assets 26,570 24,731 Amortization of debt costs 1,581 2,106 Loss on impairment of assets 466 1,192 Loss on impairment of lease - 466 Loss on termination of lease - 7,345 Change in valuation of warrant derivative liabilities - ( 34 ) Liquidated damages 1,140 2,637 Gain upon debt extinguishment - ( 5,717 ) Accrued and noncash converted interest 320 6,956 Stock-based compensation 31,345 30,493 Deferred income taxes ( 1,200 ) ( 1,674 ) Bad debt expense 658 499 Other 184 - Change in operating assets and liabilities net of effect of acquisitions: Accounts receivable ( 2,038 ) ( 3,884 ) Subscription acquisition costs ( 1,667 ) 3,108 Royalty fees 11,250 15,000 Prepayments and other current assets 2,280 49 Other long-term assets ( 285 ) 692 Accounts payable ( 6,535 ) 3,752 Accrued expenses and other ( 2,996 ) 7,474 Unearned revenue 3,898 ( 15,819 ) Subscription refund liability ( 2,379 ) ( 949 ) Operating lease liabilities ( 218 ) ( 2,489 ) Other long-term liabilities ( 3,359 ) ( 1,166 ) Net cash used in operating activities ( 11,304 ) ( 14,729 ) Cash flows from investing activities Purchases of property and equipment ( 530 ) ( 377 ) Capitalized platform development ( 5,179 ) ( 4,819 ) Proceeds from sale of equity investment 2,450 - Payments for acquisitions, net of cash ( 35,331 ) ( 7,950 ) Net cash used in investing activities ( 38,590 ) ( 13,146 ) Cash flows from financing activities Proceeds from bridge notes, net of debt costs 34,728 - Proceeds from long-term debt - 5,086 Payments of long-term debt ( 5,928 ) - Proceeds, net of repayments, under line of credit 2,104 4,809 Proceeds from common stock public offering, net of offering costs 32,058 - Payments of issuance costs from common stock public offering ( 1,568 ) - Proceeds from common stock private placement - 20,005 Payments of issuance costs from common stock private placement - ( 167 ) Proceeds from exercise of common stock options 95 - Payment of deferred cash payment ( 453 ) - Payment for taxes related to common stock withheld for taxes ( 4,468 ) ( 70 ) Payment of restricted stock liabilities ( 2,152 ) ( 1,472 ) Net cash provided by financing activities 54,416 28,191 Net increase in cash, cash equivalents, and restricted cash 4,522 316 Cash, cash equivalents, and restricted cash – beginning of year 9,851 9,535 Cash, cash equivalents, and restricted cash – end of year $ 14,373 $ 9,851 Cash, cash equivalents, and restricted cash Cash and cash equivalents $ 13,871 $ 9,349 Restricted cash 502 502 Total cash, cash equivalents, and restricted cash $ 14,373 $ 9,851 Supplemental disclosure of cash flow information Cash paid for interest $ 9,528 $ 1,393 Cash paid for income taxes - - Noncash investing and financing activities Reclassification of stock-based compensation to platform development $ 1,884 $ 2,045 Issuance of common stock in connection with professional services - 125 Restricted stock issued in connection with an acquisition - 502 Debt costs recorded in accrued expenses and other and in other long-term liabilities 441 509 Reclassification of warrants to equity - 1,113 Issuance of common stock in connection with settlement of liquidated damages 7,008 - Issuance of common stock in connection with an acquisition 3,141 - Deferred cash payments recorded in connection with acquisitions 628 1,324 Assumption of liabilities in connection with acquisitions 17,100 85 See accompanying notes to consolidated financial statements. F- 8 THE ARENA GROUP HOLDINGS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ($ in thousands, unless otherwise stated) 1. Organization and Basis of Presentation Organization The Arena Holdings Group, Inc. (formerly known as TheMaven, Inc.) (“The Arena Group” or the “Company”), was incorporated in Delaware on October 1, 1990. On October 11, 2016, the predecessor entity now known as The Arena Group exchanged its shares with another entity that was incorporated in Delaware on July 22, 2016. On November 4, 2016, these entities consummated a recapitalization. This resulted in The Arena Group becoming the parent entity, and the other Delaware entity becoming the wholly owned subsidiary. On December 19, 2019, the Company’s wholly owned subsidiaries The Arena Platform, Inc. (formerly known as Maven Coalition, Inc.), and HubPages, Inc. (“HubPages”), a Delaware corporation that was acquired by the Company in a merger during 2018, were merged into another of the Company’s wholly owned subsidiaries, Say Media, Inc. (“Say Media”), a Delaware corporation that was acquired by the Company in a merger during 2018, with Say Media as the surviving corporation. On January 6, 2020, Say Media changed its name to The Arena Platform, Inc. (“Arena Platform”). As of December 31, 2022, the Company’s wholly owned subsidiaries consist of The Arena Platform, The Arena Media Brands, LLC (“Arena Media”) (formerly known as Maven Media Brands, LLC) formed during 2019 as a wholly owned subsidiary of The Arena Group), TheStreet, Inc. (“TheStreet” acquired by the Company in a merger during 2019), College Spun Media Incorporated (“The Spun” acquired by the Company in a merger during 2021 as further described in Note 4) and Athlon Holdings, Inc. (“Parade” acquired by the Company in a merger during 2022 as further described in Note 4). The Company changed its legal name to The Arena Group Holdings, Inc. from TheMaven, Inc. on February 8, 2022. The Company’s subsidiaries changed their corporate names to The Arena Platform, Inc. from Maven Coalition, Inc. and to The Arena Media Brands, LLC from Maven Media Brands, LLC on February 18, 2022. Unless the context indicates otherwise, The Arena Group, The Arena Platform, TheStreet, The Spun and Parade, are together hereinafter referred to as the “Company.” Reverse Stock Split On February 8, 2022, the Company’s board of directors (the “Board”) approved a one-for-twenty-two (1-for-22) reverse stock split of its outstanding shares of common stock that was effective February 8, 2022. The Company’s common stock began trading on the NYSE American (the “NYSE American”) on February 9, 2022 (as further described below). At the effective time, every twenty-two shares of issued and outstanding common stock were automatically combined into one issued and outstanding share of common stock, without any change in the number of authorized shares. No fractional shares were issued as a result of the reverse stock split. Any fractional shares that would otherwise have resulted from the reverse stock split were rounded up to the next whole number. F- 9 The accompanying financial statements and notes to the financial statements give effect to the reverse stock split for all periods presented. The shares of common stock retained a par value of $ 0.01 per share. Accordingly, stockholders’ deficiency reflects the reverse stock split by reclassifying from “common stock” to “additional paid-in capital” in an amount equal to the par value of the decreased shares resulting from the reverse stock split. In connection with the reverse stock split, proportionate adjustments were made to increase the per share exercise prices and decrease the number of shares of common stock issuable upon exercise of common stock options and warrants whereby approximately the same aggregate price is required to be paid for such securities upon exercise as had been payable immediately preceding the reverse stock split. Any fractional shares that would otherwise be issued as a result of the reverse stock split were rounded up to the nearest whole share. On February 9, 2022, in connection with the Company’s legal name change and reverse stock split, the Company up-listed its common stock to the NYSE American, which began trading on February 9, 2022 under the symbol “AREN.” The Company’s common stock, prior to the up-list, was quoted on the OTC Markets Group Inc.’s (“OTCM”) OTCQX ® Best Market (the “OTCQX”) under the symbol “MVEN.” Business Operations The Company is a tech-powered media company that focuses on building deep content verticals powered by a best-in-class digital media platform (the “Platform”) empowering premium publishers who impact, inform, educate, and entertain. The Company’s strategy is to focus on key verticals where audiences are passionate about a topic category (e.g., sports and finance), and where it can leverage the strength of its core brands to grow its audience and increase monetization both within its core brands as well as its media publishers (each, a “Publisher Partner”). The Company’s focus is on leveraging its Platform and iconic brands in targeted verticals to maximize audience reach, improve engagement, and optimize monetization of digital publishing assets for the benefit of its users, its advertiser clients, and its greater than 40 owned and operated properties as well as properties it runs on behalf of independent Publisher Partners. The Company operates the media businesses for Sports Illustrated (“Sports Illustrated”), owns and operates TheStreet and The Spun, Parade, and Men’s Journal and powers more than 225 independent Publisher Partners, including History, and the many sports team sites that comprise FanNation, among others. Each Publisher Partner joins the Platform by invitation only and is drawn from premium media brands and independent publishing businesses with the objective of augmenting the Company’s position in key verticals and optimizing the performance of the Publisher Partner. Publisher Partners incur the costs in content creation on their respective channels and receive a share of the revenue associated with their content. Because of the state-of-the-art technology and large scale of the Platform and the Company’s expertise in search engine optimization, social media, ad monetization and subscription marketing Publisher Partners continually benefit from the Company’s ongoing technological advances and bespoke audience development expertise. Additionally, the Company believes the lead brand within each vertical creates a halo benefit for all Publisher Partners in the vertical while each of them adds to the breadth and quality of content. While they benefit from these critical performance improvements they also may save substantially in costs of technology, infrastructure, advertising sales, and member marketing and management. The Company’s growth strategy is to continue to expand by adding new premium publishers with high quality brands and content either as independent Publisher Partners or by acquiring publishers as owned and operated entities. The Company entered into a licensing agreement, as amended, (the “Sports Illustrated Licensing Agreement”) with ABG-SI LLC (“ABG”) a brand development, marketing, and entertainment company, in October 2019. Since assuming management of the Sports Illustrated media assets, the Company has implemented significant changes to rebuild the historic brand and beacon of sports journalism, to evolve and expand the business, and to position it for growth and continued success going forward. With respect to Sports Illustrated Swim (“SI Swim”), the Company has transitioned to a female-focused lifestyle brand, with the annual content release in May 2022. The Company’s fan-facing event to celebrate the 2022 annual content release and ongoing digital sponsorships was held over several nights in May 2022 and the Company partnered with Hard Rock, Maybelline, Celsius, Frida Mom and others. F- 10 SI Sportsbook was launched in 2021 in Colorado and has expanded to several state through the end of fiscal 2022. The Company provides the content for SI Sportsbook. Its partner, 888 Holdings PCC, one of the world’s leading online betting and gaming companies, provides the gambling engine. TheStreet is a leading financial news and information provider to investors and institutions worldwide and has produced business news and market analysis for individual investors. TheStreet brings its editorial tradition, strong subscription platform, and valuable membership base to the Company, and benefits from its mobile-friendly CMS, social, video, and monetization technology. The Spun, founded in September 2012, and acquired by the Company in June 2021, is an online independent sports publication that brings readers the most interesting athletic stories of the day. The Spun focuses on the social media aspect of the industry. The former chief executive officer of The Spun is now serving as the Company’s Senior Vice President of Growth. The Company acquired Parade, a premium-branded company in April 2022, which helped to expand its digital audience reach. Parade has become the anchor of the Company’s new lifestyle vertical and Athlon Sports, one of Parade’s premium brands, has expanded the Company’s sports vertical. In the fourth quarter of fiscal 2022, the Company discontinued the Parade print business (as further described in Note 3). The Company acquired the digital assets of Men’s Journal from Weider Publications, a subsidiary of A360 Media, LLC in December 2022 to supplement its growing lifestyle vertical. This suite of digital assets provides its audience with access to premium active lifestyle brands including Men’s Journal, Men’s Fitness, Surfer, Powder, Bike, SKATEboarding, Snowboarder and NewSchoolers. HubPages enhances the user’s experience by including content from individual creators to the HubPages network of premium content channels that are owned and operated by the Company. These channels, such as PetHelpful, dengarden and Fashionista, act as an open community for writers, explorers, knowledge seekers, and conversation starters to connect in an interactive and informative online space. Seasonality The Company does experience seasonality during the year, as a result of advertising seasonality and sports seasons and major sporting events. Advertising typically peaks in the fourth quarter of the Company’s fiscal year as advertisers concentrate their budgets during the holiday season. This trend is magnified as it also includes the professional sports and college football seasons, which account for a significant portion of the Company’s advertising revenue during that period of the year. Other sporting events such as the Super Bowl, Winter and Summer Olympics, soccer’s World Cup, and major golf, tennis and cycling events create increased traffic surrounding the respective events. Going Concern The Company performed an annual reporting period going concern assessment. Management is required to assess the Company’s ability to continue as a going concern. These consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. The Company’s consolidated financial statements do not include any adjustments that might be necessary if it is unable to continue as a going concern. F- 11 Most recently, for the year ended December 31, 2022, the Company incurred a net loss from continuing operations of $ 67,388 , had cash on hand of $ 13,871 and a working capital deficit of $ 137,669 . The Company’s net loss from continuing operations and working capital deficit have been evaluated by management to determine if the significance of those conditions or events would limit its ability to meet our obligations when due. Furthermore, since the Company’s Bridge Notes of $ 36,000 , Senior Secured Notes of $ 62,691 and Delayed Draw Term Notes of $ 4,000 , totaling $ 102,691 (collectively “its current debt”) are due by December 31, 2023 (see Note 19, and Note 20), unless the Company is able to refinance or extend its current debt beyond its current maturity, it may not be able to meet its obligations when due. In its evaluation, management determined there is substantial doubt about the Company’s ability to continue as a going concern for a one-year period following the financial statement issuance date, unless it is able to refinance or extend the maturities of its current debt. The Company plans to refinance or extend the maturities of its current debt to alleviate the conditions that raise substantial doubt about its ability to continue as a going concern. Reclassifications Certain prior year amounts have been reclassified to conform to current period presentation. These reclassifications were immaterial, both individually and in aggregate. These changes did not impact previously reported loss from operations or net loss. F- 12 2. Summary of Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the financial statements of The Arena Group and its wholly owned subsidiaries, Arena Media, Arena Platform, TheStreet, The Spun and Parade. Intercompany balances and transactions have been eliminated in consolidation. Foreign Currency The functional currency of the Company’s foreign subsidiaries is the local currencies (Canadian dollar), as it is the monetary unit of account of the principal economic environment in which the Company’s foreign subsidiaries operate. All assets and liabilities of the foreign subsidiaries are translated at the current exchange rate as of the end of the period, and revenue and expenses are translated at average exchange rates in effect during the period. The gain or loss resulting from the process of translating foreign currencies into U.S. dollars was immaterial for the years ended December 31, 2022 and 2021, and therefore, a foreign currency cumulative translation adjustment was not reported as a component of accumulated other comprehensive income (loss) and the unrealized foreign exchange gain or loss was omitted from the consolidated statements of cash flows. Foreign currency transaction gains and losses, if any, resulting from or expected to result from transactions denominated in a currency other than the functional currency are recognized in other income on the consolidated statements of operations. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported results of operations during the reporting period. Significant estimates include: reserves for bad debt; capitalization of platform development and associated useful lives; goodwill and other acquired intangible assets and associated useful lives; assumptions used in accruals for potential liabilities; revenue recognition and estimates of standalone selling price of performance obligations for revenue contracts with multiple performance obligations; stock-based compensation and the determination of the fair value; valuation allowances for deferred tax assets and uncertain tax positions; accounting for business combinations; and assumptions used to calculate contingent liabilities. These estimates are based on information available as of the date of the consolidated financial statements; therefore, actual results could differ from management’s estimates. Risks and Uncertainties The Company’s business and operations are sensitive to general business and economic conditions in the United States and worldwide. These conditions include short-term and long-term interest rates, inflation, fluctuations in debt and equity capital markets and the general condition of the United States and world economy. A host of factors beyond the Company’s control could cause fluctuations in these conditions. Adverse developments in these general business and economic conditions could have a material adverse effect on the Company’s financial condition and the results of its operations. In addition, the Company will compete with many companies that currently have extensive and well-funded projects, marketing and sales operations as well as extensive human capital. The Company may be unable to compete successfully against these companies. The Company’s industry is characterized by rapid changes in technology and market demands. As a result, the Company’s products, services, or expertise may become obsolete or unmarketable. The Company’s future success will depend on its ability to adapt to technological advances, anticipate customer and market demands, and enhance its current technology under development. F- 13 The Companies services, products and properties may be adversely impacted by uncertain economic conditions, including the impact of the ongoing COVID-19 pandemic; the Ukraine – Russia conflict; adverse changes in interest rates, foreign currency exchange rates, tax laws or tax rates; inflation; a recession; contraction in the availability of credit in the marketplace due to legislation or other economic conditions, which may potentially impair its ability to access the capital markets on terms acceptable to it or at all; and the effects of government initiatives to manage economic conditions. The Company cannot also predict how future economic conditions will affect its users and Publisher Partners and any negative impact on its users or Publisher Partners may also have an adverse impact its results of operations or financial condition. A severe or prolonged economic downturn, as result of a global pandemic such as the COVID-19 pandemic or otherwise, could result in a variety of risks to the Company’s business, including weakened demand for its products and services and its ability to raise additional capital when needed on favorable terms, if at all. With the initial onset of COVID-19 pandemic, the Company faced significant change in its advertisers’ buying behavior. Since May 2020, there has been a steady recovery in the advertising market in both pricing and volume, which coupled with the return of professional and college sports yielded steady growth in revenues. Given that the Company’s sports vertical relies on sporting events to generate content and comprises a material portion of its revenues, the cash flows and results of operations are susceptible to a widespread cancellation of sporting events or a general limitation of uncertain economic conditions, such as COVID-19 pandemic, that occurred during the 2020 calendar year. Future widespread shutdowns of in-person economic activity could have a material impact on the Company’s business. As a result of the Company’s advertising revenue declining in early 2020 caused by the widespread cancellations of sporting events, the Company is vulnerable to a risk of loss in the near term and it is at least reasonably possible that events or circumstances may occur that could cause an impact in the near term as a result of uncertain economic conditions. Since August 2018, B. Riley FBR, Inc. (“B. Riley FBR”), a registered broker-dealer owned by B. Riley Financial, Inc., a diversified publicly traded financial services company (“B. Riley”), has been instrumental in providing investment banking services to the Company and in raising debt and equity capital for the Company. These services have included raising equity capital to support the stock acquisition of Parade (as described in Note 4) and acquisition of certain assets of Men’s Journal (as described in Note 4). B. Riley has also assisted in the raising of debt and equity capital for various acquisitions, refinancing and working capital purposes including the Bridge Notes (as described in Note 19), Senior Secured Notes and Delayed Draw Term Notes (as described in Note 20), Series H Preferred Stock (as described in Note 21), and Common Stock Public Offering and Common Stock Private Placement (as described in Note 22). Segment Reporting The Company operates in one reportable segment which focuses on a publishing platform. The Company’s business offerings have similar operating characteristics and similar long-term operating performance, including the types of customers, nature of product or services, distribution methods and regulatory environment. The chief operating decision maker (the “CODM”) of the Company reviews specific financial and operational data and other key metrics to make resource allocation decisions and assesses performance by review of profit and loss information on a consolidated basis. The CODM does not review specific financial or operational data on a disaggregated basis or by aggregating operating segments into one reportable segment. The consolidated financial statements reflect the financial results of the Company’s one reportable segment. Revenue Recognition In accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers , revenues are recognized when control of the promised goods or services are transferred to the Company’s customers, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company generates all of its revenue from contracts with customers. The Company accounts for revenue on a gross basis, as compared to a net basis, on its statements of operations. The Company has made this determination based on its control of the advertising inventory and the ability to monetize the advertising inventory or publications before transfer to the customer and because it is also the primary obligor responsible for providing the services to the customer. Cost of revenues is presented as a separate line item on the statements of operations. F- 14 The following is a description of the principal activities from which the Company generates revenue: Advertising Revenue Digital Advertising – The Company recognizes revenue from digital advertisements at the point when each ad is viewed. The quantity of advertisements, the impression bid prices and revenue are reported on a real-time basis. The Company enters into contracts with advertising networks to serve display or video advertisements on the digital media pages associated with its various channels. Although reported advertising transactions are subject to adjustment by the advertising network partners, any such adjustments are known within a few days of month end. The Company owes its independent Publisher Partners a revenue share of the advertising revenue earned, which is recorded as service costs in the same period in which the associated advertising revenue is recognized. Advertising revenue that is comprised of fees charged for the placement of advertising, on the Company’s flagship website, TheStreet.com, is recognized as the advertising or sponsorship is displayed, if collection of the resulting receivable is reasonably assured. Print Advertising – Advertising related revenues for print advertisements are recognized when advertisements are published (defined as an issue’s on-sale date), net of provisions for estimated rebates, rate adjustments, and discounts. Subscription Revenue Digital Subscriptions – The Company enters into contracts with internet users that subscribe to premium content on the owned and operated media channels and facilitate such contracts between internet users and its Publisher Partners. These contracts provide internet users with a membership subscription to access the premium content. The Company owes its independent Publisher Partners a revenue share of the membership subscription revenue earned, which is initially deferred and recorded as deferred contract costs. The Company recognizes deferred contract costs over the membership subscription term in the same pattern that the associated membership subscription revenue is recognized. Subscription revenue generated from the Company’s flagship website TheStreet.com from institutional and retail customers is comprised of subscriptions and license fees for access to securities investment information, stock market commentary, director and officer profiles, relationship capital management services, and transactional information pertaining to mergers and acquisitions and other changes in the corporate control environment. Subscriptions are charged to customers’ credit cards or are directly billed to corporate subscribers, and are generally billed in advance on a monthly, quarterly or annual basis. The Company calculates net subscription revenue by deducting from gross revenue an estimate of potential refunds from cancelled subscriptions as well as chargebacks of disputed credit card charges. Net subscription revenue is recognized ratably over the subscription periods. Unearned revenue relates to payments for subscription fees for which revenue has not been recognized because services have not yet been provided. Print Revenue Print revenue includes magazine subscriptions and single copy sales at newsstands. Print Subscriptions – Revenue from magazine subscriptions is deferred and recognized proportionately as products are distributed to subscribers. Newsstand – Single copy revenue is recognized on the publication’s on-sale date, net of provisions for estimated returns. The Company bases its estimates for returns on historical experience and current marketplace conditions. Licensing and Syndication Revenue Content licensing-based revenues and syndication revenues are accrued generally monthly or quarterly based on the specific mechanisms of each contract. Generally, revenues are accrued based on estimated sales and adjusted as actual sales are reported by partners. These adjustments are typically recorded within three months of the initial estimates and have not been material. Any minimum guarantees are typically earned evenly over the fiscal year. F- 15 Nature of Performance Obligations At contract inception, the Company assesses the obligations promised in its contracts with customers and identifies a performance obligation for each promise to transfer a good or service or bundle that is distinct. To identify the performance obligations, the Company considers all the promises in the contract, whether explicitly stated or implied based on customary business practices. For a contract that has more than one performance obligation, the Company allocates the total contract consideration to each distinct performance obligation on a relative standalone selling price basis. Revenue is recognized when, or as, the performance obligations are satisfied, and control is transferred to the customer. Digital Advertising – The Company sells digital advertising inventory on its websites directly to advertisers or through advertising agencies. The Company’s performance obligations related to digital advertising are generally satisfied when the advertisement is run on the Company’s platform. The price for direct digital advertising is determined in contracts with the advertisers. Revenue from the sale of direct digital advertising is recognized when the advertisements are delivered based on the contract. The customer is invoiced the agreed-upon price in the month following the month that the advertisements are delivered with normal trade terms. The agreed upon price is adjusted for estimated provisions for rebates, rate adjustments, and discounts. As part of the Company’s customary business practices, digital advertising contracts may include a guaranteed number of impressions and sales incentives to its customers including volume discounts, rebates, value added impressions, etc. For all such contracts that include these types of variable consideration, the Company estimates the variable consideration and factors in such an estimate when determining the transaction price. Print Advertising – The Company provides advertisement placements in print media directly to advertisers or through advertising agencies. The Company’s performance obligations related to print advertising are satisfied when the magazine in which an advertisement appears is published, which is defined as an issue’s on-sale date. The customer is invoiced the agreed-upon price when the advertisements are published under normal industry trade terms. The agreed upon price is adjusted for estimated provisions for rebates, rate adjustments, and discounts. As part of the Company’s customary business practices, print advertising contracts include guaranteed circulation levels of magazines, referred to as rate base, and a number of sales incentives to its customers including volume discounts, rebates, bonus pages, etc. For all such contracts that include these types of variable consideration, the Company estimates such when determining the transaction price. Digital Subscriptions – The Company recognizes revenue from each membership subscription to access the premium content over time based on a daily calculation of revenue during the reporting period, which is generally one year. Subscriber payments are initially recorded as unearned revenue on the balance sheets. As the Company provides access to the premium content over the membership subscription term, the Company recognizes revenue and proportionately reduces the unearned revenue balance. Print Subscriptions – The Company sells magazines to consumers through subscriptions. Each copy of a magazine is determined to be a distinct performance obligation that is satisfied when the publication is sent to the customer. The majority of the Company’s subscription sales are prepaid at the time of order. Subscriptions may be canceled at any time for a refund of the price paid for remaining issues. As the contract may be canceled at any time for a full refund of the unserved copies, the contract term is determined to be on an issue-to-issue basis as these contracts do not have substantive termination penalties. Revenues from subscriptions are deferred and recognized proportionately as subscribers are served. Some magazine subscription offers contain more than one magazine title in a bundle. The Company allocates the total contract consideration to each distinct performance obligation, or magazine title, based on a standalone-selling price basis. Newsstand – The Company sells single copy magazines, or bundles of single copy magazines, to wholesalers for ultimate resale on newsstands primarily at major retailers and grocery/drug stores, and in digital form on tablets and other electronic devices. Publications sold to magazine wholesalers are sold with the right to receive credit from the Company for magazines returned to the wholesaler by retailers. Revenue is recognized on the issue’s on-sale date as the date aligns most closely with the date that control is transferred to the customer. The Company bases its estimates for returns on historical experience and current marketplace conditions. Licensing and Syndication – The Company has entered into various licensing and syndication agreements that provide third-party partners with the right to utilize the Company’s content. Functional licenses in national media consist of content licensing. F- 16 Timing of Satisfaction of Performance Obligations Point-in-Time Performance Obligations – For performance obligations related to certain digital advertising space and sales of print advertisements, the Company determines that the customer can direct the use of and obtain substantially all the benefits from the advertising products as the digital impressions are served or on the issue’s on-sale date. For performance obligations related to sales of magazines through subscriptions, the customer obtains control when each magazine issue is mailed to the customer on or before the issue’s on-sale date. For sales of single copy magazines on newsstands, revenue is recognized on the issue’s on-sale date as the date aligns most closely with the date that control is transferred to the customer. Revenues from functional licenses and syndication arrangements are recognized at a point-in-time when access to the completed content is granted to the partner. Over-Time Performance Obligations – For performance obligations related to sales of certain digital advertising space, the Company transfers control and recognizes revenue over time by measuring progress towards complete satisfaction using the most appropriate method. For performance obligations related to digital advertising, the Company satisfies its performance obligations on some flat-fee digital advertising placements over time using a time-elapsed output method. Determining a measure of progress requires management to make judgments that affect the timing of revenue recognized. The Company has determined that the above method provides a faithful depiction of the transfer of goods or services to the customer. For performance obligations recognized using a time-elapsed output method, the Company’s efforts are expended evenly throughout the period. Performance obligations related to subscriptions to premium content on the digital media channels provides access for a given period of time, which is generally one year. The Company recognizes revenue from each membership subscription over time based on a daily calculation of revenue during the reporting period. Transaction Price and Amounts Allocated to Performance Obligations Determining the Transaction Price – Certain advertising contracts contain variable components of the transaction price, such as volume discounts and rebates. The Company has sufficient historical data and has established processes to reliably estimate these variable components of the transaction price. Subscription revenue generated from the flagship website TheStreet.com is subject to estimation and variability due to the fact that, in the normal course of business, subscribers may for various reasons contact the Company or their credit card companies to request a refund or other adjustment for a previously purchased subscription. With respect to many of the Company’s annual newsletter subscription products, the Company offers the ability to receive a refund during the first 30 days but none thereafter. Accordingly, the Company maintains a provision for estimated future revenue reductions resulting from expected refunds and chargebacks related to subscriptions for which revenue was recognized in a prior period. The calculation of this provision is based upon historical trends and is reevaluated each quarter. The Company typically does not offer any type of variable consideration in standard magazine subscription contracts. For these contracts, the transaction price is fixed upon establishment of the contract that contains the final terms of the sale including description, quantity and price of each subscription purchased. Therefore, the Company does not estimate variable consideration or perform a constraint analysis for these contracts. A right of return exists for newsstand contracts. The Company has sufficient historical data to estimate the final amount of returns and reduces the transaction price at contract inception for the expected return reserve. There is no variable consideration related to functional licenses. F- 17 Estimating Standalone-Selling Prices – For contracts that contain multiple performance obligations, the Company allocates the transaction price to each performance obligation on a relative standalone-selling price basis. The standalone-selling price is the price at which the Company would sell a promised good or service separately to the customer. In situations in which an obligation is bundled with other obligations and the total amount of consideration does not reflect the sum of individual observable prices, the Company allocates the discount to (1) a single obligation if the discount is attributable to that obligation or (2) prorates across all obligations if the discount relates to the bundle. When standalone-selling price is not directly observable, the Company estimates and considers all the information that is reasonably available to the Company, including market conditions, entity specific factors, customer information, etc. The Company maximizes the use of observable inputs and applies estimation methods consistently in similar circumstances. Measuring Obligations for Returns and Refunds – The Company accepts product returns in some cases. The Company establishes provisions for estimated returns concurrently with the recognition of revenue. The provisions are established based upon consideration of a variety of factors, including, among other things, recent and historical return rates for both specific products and distributors and the impact of any new product releases and projected economic conditions. As of December 31, 2022 and 2021, a subscription refund liability of $ 845 and $ 3,087 , respectively, was recorded for the provision for the estimated returns and refunds on the consolidated balance sheets. Contract Modifications The Company occasionally enters into amendments to previously executed contracts that constitute contract modifications. The Company assesses each of these contract modifications to determine: ● if the additional services and goods are distinct from the services and goods in the original arrangement; and ● if the amount of consideration expected for the added services or goods reflects the stand-alone selling price of those services and goods. A contract modification meeting both criteria is accounted for as a separate contract. A contract modification not meeting both criteria is considered a change to the original contract and is accounted for on either a prospective basis as a termination of the existing contract and the creation of a new contract, or a cumulative catch-up basis (further details are provided under the headings Contract Balances and Subscription Acquisition Costs ). F- 18 Disaggregation of Revenue The following table provides information about disaggregated revenue by category, geographical market and timing of revenue recognition: Schedule of Disaggregation of Revenue 2022 2021 Years Ended December 31, 2022 2021 Revenue by category: Digital revenue Digital advertising $ 109,317 $ 62,865 Digital subscriptions 21,156 29,629 Licensing and syndication revenue 18,173 8,471 Other digital revenue 1,166 43 Total digital revenue 149,812 101,008 Print revenue Print advertising 10,214 9,051 Print subscriptions 60,909 79,081 Total print revenue 71,123 88,132 Total revenue $ 220,935 $ 189,140 Revenue by geographical market: United States $ 212,270 $ 182,706 Other 8,665 6,434 Total revenue $ 220,935 $ 189,140 Revenue by timing of recognition: At point in time $ 138,870 $ 159,512 Over time 82,065 29,628 Total revenue $ 220,935 $ 189,140 Cost of Revenue Cost of revenue represents the cost of providing the Company’s digital media channels and advertising and membership services. The cost of revenue that the Company has incurred in the periods presented primarily include: Publisher Partner guarantees and revenue share payments; amortization of developed technology and platform development; royalty fees; hosting and bandwidth and software license fees; printing and distribution costs; payroll and related expenses for customer support, technology maintenance; fees paid for data analytics and to other outside service providers; and stock-based compensation of related personnel (as described in Note 23). Contract Balances The timing of the Company’s performance under its various contracts often differs from the timing of the customer’s payment, which results in the recognition of a contract asset or a contract liability. A contract asset is recognized when a good or service is transferred to a customer and the Company does not have the contractual right to bill for the related performance obligations. An asset is recognized when certain costs incurred to obtain a contract meet the capitalization criteria ( further details are provided under the heading Subscription Acquisition Costs ). A contract liability is recognized when consideration is received from the customer prior to the transfer of goods or services. F- 19 The following table provides information about contract balances: Schedule of Contract with Customer, Asset and Liability 2022 2021 As of December 31, 2022 2021 Unearned revenue (short-term contract liabilities): Digital revenue $ 18,571 $ 14,693 Print revenue 40,132 39,337 Total short-term contract liabilities $ 58,703 $ 54,030 Unearned revenue (long-term contract liabilities): Digital revenue $ 1,118 $ 1,446 Print revenue 18,583 13,831 Total long-term contract liabilities $ 19,701 $ 15,277 Unearned Revenue – Unearned revenue, also referred to as contract liabilities, include payments received in advance of performance under the contracts and are recognized as revenue over time. The Company records contract liabilities as unearned revenue on the consolidated balance sheets. Digital subscription and print subscription revenue of $ 50,813 was recognized during the year ended December 31, 2022 from unearned revenue at the beginning of the year. During January of 2020, February of 2020 and December of 2021, the Company modified certain digital and print subscription contracts that prospectively changed the frequency of the related issues (or magazines) required to be delivered on a yearly basis (the “Contract Modifications”). The Company determined that the remaining digital content and magazines to be delivered are distinct from the digital content or magazines already provided under the original contract. As a result, the Company in effect established a new contract that included only the remaining digital content or magazines. Accordingly, the Company allocated the remaining performance obligations in the contracts as consideration from the original contract that has not yet been recognized as revenue. For the years ended December 31, 2022 and 2021, the Company recognized revenue of $ 2,986 and $ 2,821 , respectively, resulting from the Contract Modifications. Cash, Cash Equivalents, and Restricted Cash The Company maintains cash, cash equivalents, and restricted cash at banks where amounts on deposit may exceed the Federal Deposit Insurance Corporation limit during the year. Cash and cash equivalents represent cash and highly liquid investments with an original contractual maturity at the date of purchase of three months. As of December 31, 2022 and 2021, cash and cash equivalents consist primarily of checking, savings deposits and money market accounts. These deposits exceeded federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant credit risk regarding its cash and cash equivalents. The following table reconciles total cash, cash equivalents, and restricted cash: Schedule of Cash and Restricted Cash 2022 2021 As of December 31, 2022 2021 Cash and cash equivalents $ 13,871 $ 9,349 Restricted cash 502 502 Total cash, cash equivalents, and restricted cash $ 14,373 $ 9,851 As of December 31, 2022 and 2021, the Company had restricted cash of $ 502 , which serves as collateral for certain credit card merchant accounts with a bank. F- 20 Accounts Receivable and Allowance for Doubtful Accounts The Company receives payments from advertising customers based upon contractual payment terms; accounts receivable is recorded when the right to consideration becomes unconditional and are generally collected within 90 days. The Company generally receives payments from digital and print subscription customers at the time of sign up for each subscription; accounts receivable from merchant credit card processors are recorded when the right to consideration becomes unconditional and are generally collected weekly. Accounts receivable are written off when deemed uncollectible and collection of the receivable is no longer being actively pursued. Accounts receivable as of December 31, 2022 and 2021 of $ 33,950 and $ 21,660 , respectively, are presented net of allowance for doubtful accounts of $ 2,236 and $ 1,578 , respectively, on the consolidated balance sheets. Subscription Acquisition Costs Subscription acquisition costs include the incremental costs of obtaining a contract with a customer, paid to external parties, if the Company expects to recover those costs. The Company has determined that sales commissions paid on all third-party agent sales of subscriptions are direct and incremental costs of obtaining a contract with a customer and, therefore, meet the capitalization criteria. The Company has elected to apply the practical expedient to amortize these costs at the portfolio level. The sales commissions paid to third-party agents are amortized as the magazines are sent to the subscriber on an issue-by-issue basis. The Company determined that commissions paid for subscriber renewal contracts to all third-party agents are not from a specifically anticipated future contract, therefore, the commissions paid on renewals are amortized as the magazines are sent to the subscriber over the renewal term on an issue-by-issue basis. Direct mail costs for renewal subscriptions are expensed as incurred since they do not meet the capitalization criteria. Amortization of subscription acquisition costs of $ 37,190 and $ 46,264 for the years ended December 31, 2022 and 2021, respectively, are included within selling and marketing expenses on the consolidated statements of operations. No impairment losses have been recognized for subscription acquisition costs for the years ended December 31, 2022 and 2021. The Contract Modifications resulted in subscription acquisition costs to be recognized on a prospective basis in the same proportion as the revenue that has not yet been recognized. As of December 31, 2022 and 2021, subscription acquisition costs were $ 40,064 (short-term of $ 25,931 and long-term of $ 14,133 ) and $ 38,397 (short-term of $ 30,162 and long-term of $ 8,235 ), respectively, on the consolidated balance sheets. Subscription acquisition cost as of December 31, 2022 presented as current assets of $ 25,931 are expected to be amortized during the year ending December 31, 2023 and $ 14,133 presented as long-term assets are expected to be amortized after the year ending December 31, 2024. Concentrations Significant Customers – Concentration of credit risk with respect to accounts receivable is limited to customers to whom the Company makes significant sales. While a reserve for the potential write-off of accounts receivable is maintained, the Company has not written off any significant accounts to date. To control credit risk, the Company performs regular credit evaluations of its customers’ financial condition. Revenue from significant customers as a percentage of the Company’s total revenue represent 13.9 % and 11.3 % from a customer for the years ended December 31, 2022 and 2021, respectively. Significant accounts receivable balances as a percentage of the Company’s total accounts receivable represent 0.0 % and 10.7 % from a customer for the years ended December 31, 2022, and 2021, respectively. Significant Vendors – Concentrations of risk with respect to third party vendors who provide products and services to the Company are limited. If not limited, such concentrations could impact profitability if a vendor failed to fulfill their obligations or if a significant vendor was unable to renew an existing contract and the Company was not able to replace the related product or service at the same cost. Significant accounts payable balances as a percentage of the Company’s total accounts payable represent 14.1 %, and 10.5 % from a vendor for the years ended December 31, 2022, and 2021, respectively. F- 21 Leases The Company has lease arrangements for certain equipment and its offices. Leases are recorded as an operating lease right-of-use assets and operating lease liabilities on the consolidated balance sheets. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets. At inception, the Company determines whether an arrangement that provides control over the use of an asset is a lease. When it is reasonably certain that the Company will exercise the renewal period, the Company includes the impact of the renewal in the lease term for purposes of determining total future lease payments. Rent expense is recognized on a straight-line basis over the lease term. Property and Equipment Property and equipment is stated at cost less accumulated depreciation and amortization. Maintenance and repairs are charged to expense as incurred. Gains and losses from disposition of property and equipment are included on the statements of operations when realized. Depreciation and amortization are provided using the straight-line method over the following estimated useful lives: Schedule of Depreciation and Amortization, Useful Lives of Assets Office equipment and computers 1 – 3 years Furniture and fixtures 1 – 5 years Platform Development The Company capitalizes platform development costs for internal use when planning and design efforts are successfully completed, and development is ready to commence. The Company places capitalized platform development assets into service and commences amortization when the applicable project or asset is substantially complete and ready for its intended use. Once placed into service, the Company capitalizes qualifying costs of specified upgrades or enhancements to capitalized platform development assets when the upgrade or enhancement will result in new or additional functionality. The Company capitalizes internal labor costs, including payroll-based and stock-based compensation, benefits and payroll taxes, that are incurred for certain capitalized platform development projects related to the Company’s technology platform. The Company’s policy with respect to capitalized internal labor stipulates that labor costs for employees working on eligible internal use capital projects are capitalized as part of the historical cost of the project when the impact, as compared to expensing such labor costs, is material. Platform development costs are amortized on a straight-line basis over three years, which is the estimated useful life of the related asset and is recorded in cost of revenues on the consolidated statements of operations. Business Combinations The Company accounts for business combinations using the acquisition method of accounting. The acquisition method of accounting requires that the purchase price, including the fair value of contingent consideration, of the acquisition be allocated to the assets acquired and liabilities assumed using the estimated fair values determined by management as of the acquisition date. Goodwill is measured as the excess of consideration transferred and the net fair values of the assets acquired, and the liabilities assumed at the date of acquisition. While the Company uses its best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the acquisition date, the Company’s estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, the Company records adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill to the extent the Company identifies adjustments to the preliminary purchase price allocation. Upon the conclusion of the measurement period, which may be up to one year from the acquisition date, or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the consolidated statements of operations. Additionally, the Company identifies acquisition-related contingent payments and determines their respective fair values as of the acquisition date, which are recorded as accrued liabilities on the consolidated balance sheets. Subsequent changes in fair value of contingent payments are recorded on the consolidated statements of operations. The Company expenses transaction costs related to the acquisition as incurred. F- 22 Intangible Assets Intangible assets with finite lives, consisting of developed technology and trade names, are amortized using the straight-line method over the estimated economic lives of the assets. A finite lived intangible asset is tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Intangible assets with an indefinite useful life are not amortized. Long-Lived Assets The Company periodically evaluates the carrying value of long-lived assets to be held and used when events or circumstances warrant such a review. The carrying value of a long-lived asset to be held and used is considered impaired when the anticipated separately identifiable undiscounted cash flows from such an asset are less than the carrying value of the asset. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily by reference to the anticipated cash flows discounted at a rate commensurate with the risk involved. Goodwill Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets of businesses acquired in a business combination. Goodwill is not amortized but rather is tested for impairment at least annually on December 31, or more frequently if events or changes in circumstances indicate that the carrying amount of goodwill may not be recoverable. The Company operates as one reporting unit, therefore, the impairment test is performed at the consolidated entity level. Recoverability of goodwill is determined by comparing the fair value of Company’s reporting unit to the carrying value of the underlying net assets in the reporting unit. If the fair value of the reporting unit is determined to be less than the carrying value of its net assets, goodwill is deemed impaired, and an impairment loss is recognized to the extent that the carrying value of goodwill exceeds the difference between the fair value of the reporting unit and the fair value of its other assets and liabilities. Debt Costs Debt costs consist of cash and noncash consideration paid to lenders and third parties with respect to debt and other financing transactions, including legal fees and placement fees. Such costs are deferred and amortized over the term of the related debt. Upon the settlement of debt the pro rata portion of any related unamortized debt costs are charged to operations. Additional consideration in the form of warrants and other derivative financial instruments issued to lenders are accounted for at fair value utilizing information determined by consultants with the Company’s independent valuation firm. The fair value of warrants and derivatives are recorded as a reduction to the carrying amount of the related debt and amortized to interest expense over the term of such debt, with the initial offsetting entries recorded as a liability on the balance sheet. Upon the settlement of the debt the pro rata portion of any related unamortized debt cost is charged to operations. Liquidated Damages Liquidated damages are incurred when: (i) a registration rights agreement provides for damages if the Company does not register the shares of the Company’s common stock within the requisite time frame (the “Registration Rights Damages”), which, in general, provides for a cash payment equal to 1.0% per month of the amount invested, on a daily pro rata basis for any portion of a month, as partial liquidated damages per month, upon the occurrence of certain events, up to a maximum amount of 6.0% of the aggregate amount invested, subject to interest at the rate of 1.0% per month until paid in full; and (ii) a securities purchase agreement provides for damages if the Company fails for any reason to satisfy a public information requirement within the requisite time frame with the Securities and Exchange Commission (“SEC”) (the “Public Information Failure Damages”), which, in general, provides for a cash payment equal to 1.0% of the aggregate amount invested for each 30-day period, or pro rata portion thereof, as partial liquidated damages per month, up to a maximum of 6 months, subject to interest at the rate of 1.0% per month until paid in full . Collectively, the Registration Rights Damages and the Public Information Failure Damages are referred to as the “Liquidated Damages” on the consolidated balance sheets. F- 23 Selling and Marketing Selling and marketing expenses consist of compensation, employee benefits and stock-based compensation of selling and marketing, account management support teams, as well as commissions, travel, trade show sponsorships and events, conferences and advertising costs. The Company’s advertising expenses relate to direct-mail costs for magazine subscription acquisition efforts, and print and digital advertising that are expensed when an advertisement takes place. During the years ended December 31, 2022 and 2021, the Company incurred advertising expenses of $ 5,987 and $ 6,962 , respectively, which are included within selling and marketing on the consolidated statements of operations. General and Administrative General and administrative expenses consist primarily of payroll for executive personnel, technology personnel incurred in developing conceptual formulation and determination of existence of needed technology, and administrative personnel along with any related payroll costs; professional services, including accounting, legal and insurance; facilities costs; conferences; other general corporate expenses; and stock-based compensation of related personnel. Derivative Financial Instruments The Company accounted for freestanding contracts that were settled in the Company’s equity securities, including common stock warrants, to be designated as an equity instrument, generally as a liability. A contract so designated was carried at fair value on the consolidated balance sheets, with any changes in fair value recorded as a gain or loss on the consolidated statements of operations. The Company recorded all derivatives on the consolidated balance sheets at fair value, adjusted at the end of each reporting period to reflect any material changes in fair value, with any such changes classified as changes in derivatives valuation in the consolidated statements of operations. The calculation of the fair value of derivatives utilized highly subjective and theoretical assumptions that could have materially affected fair values from period to period. The recognition of these derivative amounts did not have any impact on cash flows. At the date of settlement of a freestanding equity contract or common stock warrants, the pro rata fair value of the related warrant liability and any embedded derivative liability was transferred to additional paid-in capital. Fair Value of Financial Instruments The authoritative guidance with respect to fair value established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels and requires that assets and liabilities carried at fair value be classified and disclosed in one of three categories, as presented below. Disclosure as to transfers in and out of Levels 1 and 2, and activity in Level 3 fair value measurements, is also required. Level 1 . Observable inputs such as quoted prices in active markets for an identical asset or liability that the Company has the ability to access as of the measurement date. Financial assets and liabilities utilizing Level 1 inputs include active-exchange traded securities and exchange-based derivatives. F- 24 Level 2 . Inputs, other than quoted prices included within Level 1, which are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. Financial assets and liabilities utilizing Level 2 inputs include fixed income securities, non-exchange-based derivatives, mutual funds, and fair-value hedges. Level 3 . Unobservable inputs in which there is little or no market data for the asset or liability which requires the reporting entity to develop its own assumptions. Financial assets and liabilities utilizing Level 3 inputs include infrequently traded non-exchange-based derivatives and commingled investment funds and are measured using present value pricing models. The Company determines the level in the fair value hierarchy within which each fair value measurement falls in its entirety, based on the lowest level input that is significant to the fair value measurement in its entirety. In determining the appropriate levels, the Company performs an analysis of the assets and liabilities at each reporting period end. The carrying amount of the Company’s financial instruments comprising of cash, restricted cash, accounts receivable, accounts payable and accrued expenses and other approximate fair value because of the short-term maturity of these instruments. Preferred Stock Preferred stock (the “Preferred Stock”) (as described in Note 21) is reported as a mezzanine obligation between liabilities and stockholders’ deficiency. If it becomes probable that the Preferred Stock will become redeemable, the Company will re-measure the Preferred Stock by adjusting the carrying value to the redemption value of the Preferred Stock assuming each balance sheet date is a redemption date. Stock-Based Compensation The Company provides stock-based compensation in the form of (a) stock awards to employees and directors, comprised of restricted stock awards and restricted stock units, (b) stock option grants to employees, directors and consultants, (c) common stock warrants to Publisher Partners (no warrants were issued during the years ended December 31, 2022 or 2021) (further details are provided under the headings Publisher Partner Warrants and New Publisher Partner Warrants in Note 23), and (d) common stock warrants to ABG (further details are provided under the heading ABG Warrants in Note 23). The Company accounts for stock awards and stock option grants to employees, directors and consultants, and non-employee awards to certain directors and consultants by measuring the cost of services received in exchange for the stock-based payments as compensation expense in the Company’s consolidated financial statements. Stock awards and stock option grants to employees and non-employees which are time-vested, are measured at fair value on the grant date, and charged to operations ratably over the vesting period. Stock awards and stock option grants to employees and non-employees which are performance-vested, are measured at fair value on the grant date and charged to operations when the performance condition is satisfied or over the service. The fair value measurement of stock awards and grants used for stock-based compensation is as follows: (1) restricted stock awards and restricted stock units which are time-vested, are determined using the quoted market price of the Company’s common stock at the grant date; (2) stock option grants which are time-vested and performance-vested, are determined utilizing the Black-Scholes option-pricing model at the grant date; (3) restricted stock units and stock option grants which provide for market-based vesting with a time-vesting overlay, are determined through consultants with the Company’s independent valuation firm using the Monte Carlo model at the grant date; (4) Publisher Partner Warrants were determined utilizing the Black-Scholes option-pricing model; and (5) ABG warrants are determined utilizing the Monte Carlo model (further details are provided in Note 23). Fair value determined under the Black-Scholes option-pricing model and Monte Carlo model is affected by several variables, the most significant of which are the life of the stock award, the exercise price of the stock option or warrants, as compared to the fair market value of the common stock on the grant date, and the estimated volatility of the common stock over the term of the stock award. Estimated volatility was determined under the (1) “Probability Weighted Scenarios” where one scenario assumes that the Company’s common stock will be up-listed on a national stock exchange (the “Exchange”) on a certain listing date (the “Up-list”) where the estimated volatility was based on evaluating the average historical volatility of a group of peer companies that are publicly traded and the second scenario assumes that the Company’s common stock is not up-listed on the Exchange prior to the final vesting date of the grants (the “No Up-list”) where the historical volatility of the Company’s common stock was evaluated based upon market comparisons; and the (2) “Up-list Scenario” where the Company estimated volatility based on evaluating the average historical volatility of a group of peer companies that are publicly traded after the Company up-listed to the NYSE American. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The fair market value of common stock is determined by reference to the quoted market price of the Company’s common stock. F- 25 The Company has elected to recognize forfeitures as they occur and to recognize stock-based compensation cost on a straight-line basis over the total requisite service period for awards with graded vesting. The Company classifies stock-based compensation cost on its consolidated statements of operations in the same manner in which the award recipient’s cash compensation cost is classified. Income Taxes The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to operating loss carryforwards and temporary differences between financial statement bases of existing assets and liabilities and their respective income tax bases. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in the income tax rates on deferred tax asset and liability balances is recognized in income in the period that includes the enactment date of such rate change. A valuation allowance is recorded for loss carryforwards and other deferred tax assets when it is determined that it is more likely than not that such loss carryforwards and deferred tax assets will not be realized. The Company follows accounting guidance that sets forth a threshold for financial statement recognition, measurement, and disclosure of a tax position taken or expected to be taken on a tax return. Such guidance requires the Company to determine whether a tax position of the Company is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on technical merits of the position. Loss per Common Share Basic loss per share is computed using the weighted average number of common shares outstanding during the period and excludes any dilutive effects of common stock equivalent shares, such as stock options, restricted stock, and warrants. All restricted stock awards are considered outstanding but are included in the computation of basic loss per common share only when the restrictions expire, the shares are no longer forfeitable, and are thus vested. Restricted stock units are included in the computation of basic loss per common share only when the restrictions expire, the shares are no longer forfeitable, and are thus vested. Contingently issuable shares are included in basic loss per common share only when there are no circumstances under which those shares would not be issued. Diluted loss per common share is computed using the weighted average number of common shares outstanding and common stock equivalent shares outstanding during the period using the treasury stock method. The Company excluded the outstanding securities summarized below (capitalized terms are described herein), which entitle the holders thereof to acquire shares of the Company’s common stock, from its calculation of net loss per common share, as their effect would have been anti-dilutive. Common stock equivalent shares are excluded from the diluted calculations when a net loss is incurred as they would be anti-dilutive. F- 26 Schedule of Net Income (Loss) Per Common Share As of December 31, 2022 2021 Series G Preferred Stock 8,582 8,582 Series H Preferred Stock 1,981,128 2,075,200 Financing Warrants 107,956 116,118 ABG Warrants 999,540 999,540 AllHipHop Warrants 5,681 5,681 Publisher Partner Warrants 4,154 35,607 Restricted stock awards 97,403 194,806 Restricted stock units 994,766 1,636,111 Common stock options 6,199,521 5,525,395 Total 10,398,731 10,597,040 Recent Accounting Pronouncements Recently Adopted Accounting Standards In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) , which updates various codification topics to simplify the accounting guidance for certain financial instruments with characteristics of liabilities and equity, with a specific focus on convertible instruments and the derivative scope exception for contracts in an entity’s own equity and amends the diluted earnings per share computation for these instruments. On January 1, 2022, the Company adopted ASU 2020-06 with no material impact to its consolidated financial position, results of operations or cash flows. In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic470-50), Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options, a consensus of the Emerging Issues Task Force (EITF), to provide explicit guidance on accounting by issuers for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after the modification or exchange. On January 1, 2022, the Company adopted ASU 2021-04 with no material impact to its consolidated financial position, results of operations, cash flows or disclosures. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires an acquirer to account for revenue contracts acquired in a business combination in accordance with Topic 606 as if it had originated the contracts. The acquirer may assess how the acquiree applied Topic 606 to determine what to record for the acquired contracts. This update should lead to recognition and measurement consistent with what’s reported in the acquiree’s financial statements, provided that the acquiree prepared financial statements in accordance with GAAP. The new standard marks a change from current GAAP, under which assets and liabilities acquired in a business combination, including contract assets and contract liabilities arising from revenue contracts, are generally recognized at fair value at the acquisition date. On January 1, 2022, the Company adopted ASU 2021-08 with no material impact to its consolidated financial position, results of operations or cash flows. This new accounting standard will be applied prospectively to business combinations. Recently Issued Accounting Standards In March 2022, the FASB issued ASU 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, addressing areas identified by the FASB as part of its post-implementation review of its previously issued credit losses standard (ASU 2016-13) that introduced the current expected credit losses (CECL) model. ASU 2022-02 eliminates the accounting guidance for troubled debt restructurings by creditors that have adopted the CECL model and enhances disclosure requirements for certain loan refinancings and restructurings made with borrowers experiencing financial difficulty. This update requires an entity to disclose current-period gross write-offs for financing receivables and net investment in leases by year of origination in the vintage disclosures. As the Company has already adopted ASU 2016-13, the new guidance is effective for the fiscal years beginning after December 15, 2022 and for interim periods within those fiscal years. Early adoption is permitted. The adoption of ASU 2022-02 is not expected to have a material impact on the Company’s consolidated financial statements. F- 27 In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions , which clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. This update also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction and requires certain disclosures for equity securities subject to contractual sale restrictions. ASU 2022-03 is effective for the Company in the fiscal year beginning after December 15, 2023, and interim periods within the fiscal year. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the impact that the adoption of this new accounting standard will have on its consolidated financial statements. Management does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s financial statement presentation or disclosures. 3. Discontinued Operations The Company, upon Board approval on September 15, 2022, discontinued (i.e., the “discontinued operations”) the Parade print business (“Parade Print”) that was acquired on April 1, 2022 (as part of the Parade acquisition, as further described below in Note 4), on November 13, 2022 (the last date of any obligation to deliver issues of Parade Print). The table below sets forth the loss from discontinued operations for the period from April 1, 2022 to December 31, 2022: Schedule of Discontinued Operations Revenue $ 26,817 Cost of revenue 23,015 Gross profit 3,802 Operating expense Selling and marketing 5,396 General and administrative 1,722 Loss on impairment of assets 209 Total operating expenses 7,327 Loss from discontinued operations ( 3,525 ) Income tax benefit 55 Net loss from discontinued operations $ ( 3,470 ) The discontinued operations of Parade Print also included Relish and Spry Living print products that were acquired as part of the Parade acquisition. An existing purchase commitment for paper used in the production of Parade Print has been recognized as part of the discontinued operations. During the year ended December 31, 2022, as part of the discontinued operations, the Company recognized $ 750 of severance and related commissions for certain employees, where it identified a number of Parade employees who were primarily focused on Parade Print that departed in a one-time restructuring. During the year ended December 31, 2022, the Company recorded depreciation and amortization of $ 0 ; and operating and investing noncash items of $ 209 and $ 0 , respectively, as part of the discontinued operations. F- 28 4. Acquisitions The Company uses the acquisition method of accounting, which is based on ASC, Business Combinations (Topic 805) , and uses the fair value concepts which requires, among other things, that most assets acquired, and liabilities assumed be recognized at their fair values as of the acquisition date. 2022 Acquisitions Athlon Holdings, Inc . - On April 1, 2022, the Company acquired 100 % of the issued and outstanding capital stock of Athlon Holdings, Inc. (or Parade), a Tennessee corporation, for a purchase price of $ 15,854 , as adjusted for the working capital adjustment as of the closing date of the transaction. The working capital adjustment is pending acceptance by the sellers (further details are provided in Note 28). As a part of the closing consideration, the Company also acquired cash of $ 1,840 , that was further adjusted post-closing for the working capital adjustment. The purchase price of $ 15,854 , as discounted, is comprised of (i) a cash portion of $ 12,827 , with $ 11,840 paid at closing and $ 987 estimated to be paid post-closing (as further described below) and (ii) the issuance of 314,103 shares of the Company’s common stock with a fair market value of $ 3,141 . The number of shares of the Company’s common stock issued was determined based on a $ 3,000 value using the common stock trading price for the 10 trading days preceding the April 1, 2022 closing date. Certain of Parade’s key employees entered into either advisory agreements or employment agreements with the Company. Parade operates in the United States. The amount estimated to be paid post-closing of $987 will be or was paid as follows: (i) $742 is expected to be paid upon receipts of certain tax refunds due to the sellers (consisting of $3,000 for the deferred cash payments, as discounted, less a $2,258 cash adjustment); and (ii) $245 was paid within two business days from the date the Company received proceeds from the sale of the equity interest in Just Like Falling Off a Bike, LLC that was held by Parade as of the closing date (paid on April 7, 2022) . The Company received a final valuation report from a third-party valuation firm after the preliminary purchase price was adjusted during the quarterly period ended September 30, 2022. After considering the results of the final valuation report, the Company estimated that the purchase consideration decreased by $321. The decrease in the purchase price was related to an increase in identifiable assets of $54, an increase in deferred tax liabilities of $27, with a decrease in the working capital adjustment of $321, resulting in a decrease in goodwill of $348 . The composition of the purchase price is as follows: Schedule of Preliminary Purchase Price Cash $ 12,085 Common stock 3,141 Deferred cash payments, as discounted 628 Total purchase consideration $ 15,854 The Company incurred $ 200 in transaction costs related to the acquisition, which primarily consisted of legal and accounting expenses. The acquisition-related expenses were recorded within general and administrative expense on the consolidated statements of operations. F- 29 The purchase price allocation resulted in the following amounts being allocated to the assets acquired and liabilities assumed at the closing date of the acquisition based upon their respective fair values as summarized below: Summary of Price Allocation for Acquisition Cash $ 2,604 Accounts receivable 10,855 Other current assets 1,337 Equity investment 2,450 Fixed assets 108 Digital content 355 Advertiser relationships 6,202 Trade names 2,261 Goodwill 2,587 Accounts payable ( 7,416 ) Accrued expenses and other ( 2,440 ) Unearned revenue ( 1,203 ) Other long-term liabilities ( 543 ) Deferred tax liabilities ( 1,303 ) Net assets acquired $ 15,854 The Company utilized an independent appraisal firm to assist in the determination of the fair values of the assets acquired and liabilities assumed, which required certain significant management assumptions and estimates. The fair value of the digital content was determined using a cost approach. The fair values of the advertiser relationships were determined by projecting the acquired entity’s cash flows, deducting notional contributory asset charges on supporting assets (working capital, tangible assets, trade names, and the assembled workforce) to compute the excess cash flows associated with the advertiser relationships. The fair values of the trade names were determined by projecting revenue associated with each trade name and applying a royalty rate to compute the amount of the royalty payments the company is relieved from paying due to its ownership of the trade names. The estimated weighted average useful life is two years ( 2.00 years) for digital content, eight point seventy-five years ( 8.75 years) for advertiser relationships, and fourteen point five years ( 14.50 years) for trade names. The excess purchase price over the fair value amounts assigned to the assets acquired and liabilities assumed represents goodwill from the acquisition. Goodwill is recorded as a non-current asset that is not amortized but is subject to an annual review for impairment. No portion of the goodwill related to the acquisition will be deductible for tax purposes. F- 30 Supplemental Pro forma Information The following table summarizes the results of continuing operations of the Parade acquisition from the acquisition date included in the consolidated results of continuing operations and the unaudited pro forma results of continuing operations of the combined entity had the date of the acquisition been January 1, 2021: Schedule of Supplemental Proforma Information 2022 2021 Years Ended December 31, 2022 2021 Parade continuing operations from acquisition date of April 1, 2022 (unaudited): Revenue $ 13,253 $ - Net loss 1,086 - Combined entity continuing operations supplemental pro forma information had the acquisition date been January 1, 2021 (unaudited): Revenue: Parade $ 17,522 $ 19,522 Arena 207,682 189,140 Total continuing operations supplemental pro forma revenue $ 225,204 $ 208,662 Net income (loss): Parade $ 1,222 $ 2,872 Arena ( 68,474 ) ( 89,940 ) Adjustments ( 1,967 ) ( 49 ) Total continuing operations supplemental pro forma net loss $ ( 69,219 ) $ ( 87,117 ) The information presented above is for illustrative purposes only and is not necessarily indicative of results that would have been achieved if the acquisition had occurred as of the beginning of the Company’s reporting period. The adjustments for the years ended December 31, 2022 and 2021 of ($ 1,967 ) and ($ 49 ), respectively, represents adjustments: (1) to record depreciation and amortization expense related to the fixed and intangible assets acquired from the acquisition of ($ 864 ) and ($ 1,152 ); (2) to record (reverse) the nonrecurring transaction cost related to the acquisition of $ 200 and ($ 200 ); and (3) to record the deferred tax (benefit) provision related to the acquisition of ($ 1,303 ) and $ 1,303 , respectively. Buffalo Groupe, LLC – On September 27, 2022, the Company entered into an asset purchase agreement with Buffalo Groupe, LLC, doing business as Morning Read, where it purchased certain intellectual properties, certain assumed contracts, and other certain rights related to the intellectual properties (collectively, the “Morning Read Purchased Assets”) and assumed certain liabilities related to the Morning Read Purchased Assets. The purchase consideration consisted of a cash payment of $850 at closing. The Company accounted for the acquisition as an asset acquisition in accordance with ASC 805-50, as substantially all of the fair value of the gross assets acquired by the Company is concentrated in a group of similar identifiable assets. The purchase consideration totaled $ 850 , which was assigned to the brand name acquired on the closing date of the acquisition. The useful life for the brand name is ten years ( 10.0 years). A360 Media, LLC – On December 15, 2022 (the closing date), pursuant to an asset purchase agreement entered into December 7, 2022, the Company acquired certain assets and liabilities from Weider Publications, a subsidiary of A360 Media, LLC (or Men’s Journal) related to the digital media operations of Men’s Journal and other men’s active lifestyle brands. The Company paid $ 25,000 in cash for the acquisition consisting of: (i) $ 23,000 paid at closing; (ii) $ 1,000 deposited into an escrow account to be released in accordance with the terms of the agreement, subject to adjustments for any indemnification payments; and (iii) $ 1,000 paid in November 2022. The Company also assumed certain liabilities consisting of: (i) $ 1,430 an assumed lease obligation, as discounted (representing $ 3,189 in deferred payments over twenty-seven months (27) for the assumption of a lease obligation); and (ii) $ 4,078 in deferred revenue obligations to deliver certain publications to the subscribers of Men’s Journal ($ 3,941 in unearned revenue after consideration of an estimated subscription refund liability of $ 137 ). In accordance with the practical expedients under ASU 2021-08, the Company has elected to apply (i) the practical expedient to the modification of the subscriber contracts at the acquisition date to determine the performance obligations and transaction price; and (ii) to use the estimated selling price of a subscriber contract as the standalone selling price of the replacement magazine based on the number of magazines expected to be delivered to the Men’s Journal subscribers to satisfy the performance obligations. The agreement contains customary representations, warranties and covenants. Men’s Journal operates in the United States. F- 31 The Company accounted for the asset acquisition as a business combination in accordance with ASC 805 since the acquisition met the definition of a business under the applicable guidance. The Company incurred $ 283 in transaction costs related to the acquisition, which primarily consisted of legal and accounting expenses. The acquisition-related expenses were recorded within general and administrative expense on the consolidated statements of operations. The preliminary purchase price allocation resulted in the following amounts being allocated to the assets acquired and liabilities assumed at the closing date of the acquisition based upon their respective fair values as summarized below: Schedule of Preliminary Price Allocation Lease deposit receivable $ 420 Advertiser relationships 6,860 Brand names 6,090 Goodwill 17,138 Unearned revenue ( 3,941 ) Subscription refund liability ( 137 ) Assumed lease obligation ( 1,430 ) Net assets acquired $ 25,000 The Company utilized an independent appraisal firm to assist in the determination of the fair values of the assets acquired and liabilities assumed, which required certain significant management assumptions and estimates. The fair value of the advertiser relationships were determined by applying the multi-period earnings method of the income approach and the fair values of the brand names were determined by applying the relief-from-royalty method. The estimated weighted average useful life is twelve and one-half years ( 12.5 years) for the advertiser relationships and eleven years ( 11.0 years) for the brand names. The excess-of purchase price over the fair value amounts assigned to the assets acquired and liabilities assumed represents goodwill from the acquisition. Goodwill is recorded as a non-current asset that is not amortized but is subject to an annual review for impairment. A portion of the goodwill will be deductible for tax purposes. Supplemental Pro forma Information The pro forma disclosures have been deemed impracticable for this acquisition since after making reasonable efforts the Company is unable to accept assumptions made by Men’s Journal. The Company has determined, based on the information provided by Men’s Journal and made available to the Company, that the earnings from the prior periods could not be verified since the acquisition only included certain activities of Men’s Journal and financial statements were not available. In this regard, the Company: (1) made reasonable effort to obtain certain financial results of the certain activities but Men’s Journal was unable to apply the requirement; and (2) the presentation of the pro forma results and the assumptions made by management were unable be independently substantiated. 2021 Acquisitions College Spun Media Incorporated – On June 4, 2021, the Company acquired all of the issued and outstanding shares of capital stock of College Spun Media Incorporated, a New Jersey corporation (or The Spun), for an aggregate of $ 11,830 in cash and the issuance of an aggregate of 194,806 restricted shares of the Company’s common stock, with one-half of the shares vesting on the first anniversary of the closing (vested on June 4, 2022) and the remaining one-half of the shares vesting on the second anniversary of the closing. The cash payment consists of: (i) $ 10,830 paid at closing (of the cash paid at closing, $ 830 represents adjusted cash pursuant to working capital adjustments), and (ii) $ 500 to be paid on the first anniversary of the closing ($ 500 paid on June 4, 2022 consisted of principal of $ 453 and imputed interest of $ 47 ) and $ 500 to be paid on the second anniversary date of the closing. The vesting of one-half of the shares of the Company’s common stock remain subject to the continued employment of certain selling employees. The Spun operates in the United States. F- 32 The composition of the purchase price is as follows: Schedule of Preliminary Purchase Price Cash $ 10,830 Deferred cash payments, as discounted 905 Total purchase consideration $ 11,735 The Company incurred $ 128 in transaction costs related to the acquisition, which primarily consisted of legal and accounting. The acquisition-related expenses were recorded within general and administrative expense on the consolidated statements of operations. The Company received a final valuation report from a third-party valuation firm after the preliminary purchase price was recorded for the quarterly period ended June 30, 2021. After considering the results of that valuation report, the Company estimated the fair value for the brand name of $ 5,175 , along with a decrease for working capital accounts of $ 1,932 (consisting of adjusted amounts for cash, accounts receivable, accrued expenses and deferred tax liabilities) resulting in a corresponding decrease to goodwill of $ 3,977 . The purchase price allocation resulted in the following amounts being allocated to the assets acquired and liabilities assumed at the closing date of the acquisition based upon their respective fair values as summarized below: Summary of Price Allocation for Acquisition Cash $ 3,214 Accounts receivable 1,772 Other current assets 5 Brand name 5,175 Goodwill 3,479 Accrued expenses ( 85 ) Deferred tax liabilities ( 1,825 ) Net assets acquired $ 11,735 The Company utilized an independent appraisal to assist in the determination of the fair values of the assets acquired and liabilities assumed, which required certain significant management assumptions and estimates. The fair value of the brand name was determined by projecting the acquired entity’s cash flows, deducting notional contributory asset charges on supporting assets (working capital and the assembled workforce) to compute the excess cash flows associated with the brand with a useful life of ten years ( 10.0 years). The excess-of purchase price over the fair value amounts assigned to the assets acquired and liabilities assumed represents goodwill from the acquisition. Goodwill is recorded as a non-current asset that is not amortized but is subject to an annual review for impairment. No portion of the goodwill will be deductible for tax purposes. Fulltime Fantasy Sports, LLC – On July 15, 2021, the Company entered into an asset purchase agreement with Fulltime Fantasy Sports, LLC, where it purchased certain intellectual property, subscriber and customer records, and other certain rights related to the intellectual property (collectively the “Fulltime Fantasy Purchased Assets”) and assumed certain liabilities related to the Fulltime Fantasy Purchased Assets. The purchase price consisted of: (i) a cash payment of $ 335 (paid in advance), including transaction related costs of $ 35 , (ii) the issuance of 34,092 shares the Company’s restricted common stock (subject to certain vesting earn-out provisions and certain buy-back rights), with 11,364 shares of restricted common stock vested at closing, and (iii) a cash earn-out payment of $ 450 ($ 225 paid in January 2022 and $ 225 paid June 2022) and 22,728 shares of restricted common stock ( 11,364 vested on December 31, 2021 and 11,364 vested on June 30, 2022). The Company accounted for the acquisition as an asset acquisition in accordance with ASC 805-50, as substantially all of the fair value of the gross assets acquired by the Company is concentrated in a group of similar identifiable assets. All direct acquisition-related costs of $ 35 are assigned to the assets in relation to the relative fair value of the acquired assets and recorded as part of the consideration transferred. F- 33 The composition of the purchase price is as follows: Schedule of Preliminary Purchase Price Cash (including $ 35 of transaction related costs) $ 335 Restricted stock 168 Deferred cash payments 419 Deferred restricted stock 335 Total purchase consideration $ 1,257 The purchase price resulted in $ 1,257 (including $ 35 of transaction related costs) being assigned to a database acquired at the closing date of the acquisition. The useful life for the database is three years ( 3.0 years). 5 . Prepayments and Other Current Assets Prepayments and other current assets are summarized as follows: Schedule of Prepayments and Other Current Assets 2022 2021 As of December 31, 2022 2021 Prepaid expenses $ 2,321 $ 2,978 Prepaid supplies 927 487 Prepaid software license - 129 Refundable income and franchise taxes 957 745 Unamortized debt costs 216 - Other receivables 20 409 Total prepayments and other current assets $ 4,441 $ 4,748 6. Royalty Fees Royalty fees represent royalties due to ABG in connection with the Sports Illustrated Licensing Agreement. The Company’s guaranteed minimum annual royalties are $ 15,000 , subject to certain provisions, with payment to be made in advance on a quarterly basis. The royalty fee payments are amortized monthly. As of December 31, 2022 and 2021, $ 0 and $ 11,250 , respectively, were paid in advance and reflected within current assets on the consolidated balance sheets. 7. Property and Equipment Property and equipment are summarized as follows: Schedule of Property and Equipment 2022 2021 As of December 31, 2022 2021 Office equipment and computers $ 1,744 $ 1,345 Furniture and fixtures 240 1 Property and equipment, Gross 1,984 1,346 Less accumulated depreciation and amortization ( 1,249 ) ( 710 ) Net property and equipment $ 735 $ 636 Depreciation and amortization expense for the years ended December 31, 2022 and 2021 was $ 539 and $ 443 , respectively. Impairment charges for property and equipment for the years ended December 31, 2022 and 2021 of $ 0 and $ 425 , respectively, have been recorded on the consolidated statements of operations. 8. Leases The Company’s real estate lease for the use of office space was subleased during the year ended December 31, 2022. The Company determines whether an arrangement contains a lease at inception. Lease assets and liabilities are recognized upon commencement of the lease based on the present value of the future minimum lease payments over the lease term. The lease term includes options to extend the lease when it is reasonably certain that the Company will exercise that option. The Company’s current lease is a long-term operating lease with a remaining fixed payment term of 1.75 years. F- 34 The table below presents supplemental information related to operating leases: Schedule of Supplemental Information Related to Operating Leases As of December 31, 2022 2021 Operating lease costs during the year (1) $ 969 $ 2,500 Cash payments included in the measurement of operating lease liabilities during the year 469 2,787 Operating lease liabilities arising from obtaining lease right-of-use assets during the year - - Weighted-average remaining lease term (in years) as of year-end 1.75 2.75 Weighted-average discount rate during the year 9.90 % 9.90 % (1) Operating lease costs is presented net of sublease income that is not material. The Company generally utilizes its incremental borrowing rate based on information available at the commencement of the lease in determining the present value of future payments since the implicit rate for most of the Company’s leases is not readily determinable. Variable lease expense includes rental increases that are not fixed, such as those based on amounts paid to the lessor based on cost or consumption, such as maintenance and utilities. The components of operating lease costs were follows: Schedule of Operating Lease Costs 2022 2021 As of December 31, 2022 2021 Operating lease costs: Cost of revenue $ - $ 1,797 Selling and marketing - 516 General and administrative 1,187 405 Total operating costs ( 1 ) 1,187 2,718 Less sublease income ( 218 ) ( 218 ) Total operating lease costs $ 969 $ 2,500 (1) Includes certain costs associated with a business membership agreement (see below) that permits access to certain office space for the years ended December 31, 2022 and 2021 of $ 170 and $ 612 , respectively, and month-to-month lease arrangements for the years ended December 31, 2022 and 2021 of $ 95 and $ 320 , respectively. Maturities of the operating lease liability as of December 31, 2022 are summarized as follows: Summary of Maturity of lease liabilities Years Ending December 31, 2023 $ 486 2024 373 Minimum lease payments 859 Less imputed interest ( 74 ) Present value of operating lease liability $ 785 Current portion of operating lease liability $ 427 Long-term portion of operating lease liability 358 Total operating lease liability $ 785 Sublease Agreement – In November 2021, the Company entered into an agreement to sublease its leased office space for the duration of its operating lease through September 2024, where it is entitled to receive sublease income of $ 637 . In connection with the sublease agreement, the Company: (1) reduced the value of its right-of-use asset and lease liability by $ 1,002 based on a remeasurement of its existing operating lease to exclude any renewal options in its lease liability; and (2) recognized a loss on impairment of the lease for the year ended December 31, 2021 of $ 466 as reflected on the consolidated statements of operations. As of December 31, 2022, the Company is entitled to receive total sublease income of $ 477 . F- 35 Business Membership – Effective October 1, 2021, the Company entered into a business membership agreement with York Factory LLC, doing business as SaksWorks, that permits access to certain office space with furnishings, referred to as SaksWorks Memberships. This membership provides a certain number of accounts that equate to the use of the space granted. Effective June 1, 2022, the SaksWorks membership agreement was amended and assigned to Convene SW MSA Holdings, LLC (“Convene”). The term of the agreement with Convene is for twenty-seven months from the initial effective date of October 1, 2021 with SaksWorks. The annual membership fee with Convene is $ 500 payable in equal monthly installments. The agreement also provides for: (1) additional accounts at predetermined pricing; and (2) renewal of agreement at the end on the term for a twelve-month period at the then-current market price and pricing structure on such renewal date. As of December 31, 2022, the Company had $ 500 of remaining payments under the agreement with Convene. Lease Termination – Effective September 30, 2021, the Company terminated a certain lease arrangement for office space and as a result, relinquished the space and derecognized a right-of-use asset of $ 15,673 , a lease liability of $ 17,935 and recorded a penalty upon termination of $ 9,606 (as discounted since the amount of the liability and timing of the Cash Payments, as defined below, are fixed), resulting in a net loss upon termination for the year ended December 31, 2021 of $ 7,345 (or loss upon lease termination), which has been reflected on the consolidated statements of operations. In connection with the termination, the Company agreed to pay the landlord cash of $ 10,000 (the “Cash Payments”) and $ 1,475 in market rate advertising. The Cash Payments were paid or remain due as follows: $ 1,000 paid in December 2021; $ 1,000 paid in October 2022; $ 4,000 due on October 1, 2023; and $ 4,000 due on October 1, 2024. 9. Platform Development Platform development costs are summarized as follows: Summary of Platform Development Costs 2022 2021 As of December 31, 2022 2021 Platform development $ 21,493 $ 21,997 Less accumulated amortization ( 11,163 ) ( 12,698 ) Net platform development $ 10,330 $ 9,299 A summary of platform development activity is as follows: Summary of Platform Development Cost Activity As of December 31, 2022 2021 Platform development beginning of year $ 21,997 $ 16,029 Payroll-based costs capitalized 5,179 4,819 Less dispositions ( 7,357 ) ( 460 ) Total capitalized payroll-based costs 19,819 20,388 Stock-based compensation 1,884 2,045 Impairments ( 210 ) ( 436 ) Platform development end of year $ 21,493 $ 21,997 Amortization expense for platform development for the year ended December 31, 2022 and 2021 was $ 5,822 and $ 4,485 , respectively. Amortization expense for platform development is included in cost of revenues on the consolidated statements of operations. Impairment charges for platform development for the years ended December 31, 2022 and 2021 of $ 210 and $ 436 , respectively, have been recorded on the consolidated statements of operations. F- 36 10. Intangible Assets Intangible assets subject to amortization consisted of the following: Schedule of Intangible Assets Subject to Amortization Weighted Average As of December 31, 2022 As of December 31, 2021 Useful Life (in years) Carrying Amount Accumulated Amortization Net Carrying Amount Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology 5.0 $ 17,333 $ ( 14,883 ) $ 2,450 $ 17,579 $ ( 11,465 ) $ 6,114 Trade name 16.0 5,380 ( 1,180 ) 4,200 3,328 ( 782 ) 2,546 Brand name 9.5 12,115 ( 908 ) 11,207 5,175 ( 298 ) 4,877 Subscriber relationships 5.1 73,459 ( 47,146 ) 26,313 73,459 ( 32,623 ) 40,836 Advertiser relationships 9.8 15,302 ( 1,368 ) 13,934 2,240 ( 570 ) 1,670 Database 3.0 2,397 ( 1,753 ) 644 2,397 ( 1,104 ) 1,293 Digital content 2.0 355 ( 133 ) 222 - - - Subtotal amortizable intangible assets 126,341 ( 67,371 ) 58,970 104,178 ( 46,842 ) 57,336 Website domain name - - - 20 - 20 Total intangible assets $ 126,341 $ ( 67,371 ) $ 58,970 $ 104,198 $ ( 46,842 ) $ 57,356 Developed technology, trade name, brand name, subscriber relationships, advertiser relationships, and database intangible assets subject to amortization were recorded as part of the Company’s business acquisitions. The website domain name was not being amortized and was impaired during the year ended December 31, 2022. Amortization expense for the years ended December 31, 2022 and 2021 was $ 20,748 and $ 20,246 , respectively. Impairment charges for intangible assets for the years ended December 31, 2022 and 2021 of $ 47 and $ 331 , respectively, were recorded on the consolidated statements of operations. Estimated total amortization expense for the next five years and thereafter related to the Company’s intangible assets subject to amortization as of December 31, 2022 is as follows: Schedule of Future Estimated Amortization expense For Intangible Assets Years Ending December 31, 2023 $ 20,959 2024 14,472 2025 3,394 2026 3,240 2027 3,240 Thereafter 13,665 Intangible assets ,net $ 58,970 11. Other Assets Other assets are summarized as follows: Summary of Other Assets 2022 2021 As of December 31, 2022 2021 Security deposit $ 420 $ 110 Prepaid insurance 504 529 Unamortized debt cost 216 - Total o ther assets $ 1,140 $ 639 F- 37 12. Goodwill The changes in carrying value of goodwill are as follows: Schedule of Changes in Carrying Value of Goodwil l 2022 2021 As of December 31, 2022 2021 Carrying value at beginning of year $ 19,619 $ 16,140 Goodwill acquired in acquisition of The Spun - 3,479 Goodwill acquired in acquisition of Parade 2,587 - Goodwill acquired in acquisition of Men’s Journal 17,138 - Carrying value at end of year $ 39,344 $ 19,619 The Company performs its annual impairment test at the reporting unit level, which is the operating segment or one level below the operating segment. Management determined that the Company would be aggregated into a single reporting unit for purposes of performing the impairment test for goodwill. The Company, as part of its annual impairment evaluation of goodwill of its one reporting unit, performs the goodwill impairment test in accordance with applicable guidance. The guidance provides an entity with the option to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If an entity determines that this is the case, it is required to perform the goodwill impairment test to identify potential goodwill impairment and measure the amount of goodwill impairment loss to be recognized for that reporting unit, if any. If an entity determines that the fair value of a reporting unit is greater than its carrying amount, the goodwill impairment test is not required. The annual impairment test was performed on December 31, 2022. No impairment of goodwill has been identified during the years ended December 31, 2022 and 2021. 13. Restricted Stock Liabilities On December 15, 2020, the Company entered into an amendment for certain restricted stock awards and units that were previously issued to certain employees in connection with the HubPages merger. Pursuant to the amendment, the Company agreed to purchase the vested restricted stock awards, at a price of $ 88.00 per share in 24 equal monthly installments on the second business day of each calendar month beginning on January 4, 2021, subject to certain conditions. The following table presents the activity of the restricted stock liabilities: Schedule of Components of Restricted Stock liabilities 2022 2021 As of and for the Years Ended December 31, 2022 2021 Restricted stock liabilities (before imputed interest) $ 2,307 $ 3,801 Less imputed interest ( 155 ) ( 177 ) Present value of restricted stock liabilities 2,152 3,624 Less payments during the years ( 2,152 ) ( 1,472 ) Restricted stock liabilities at end of year (reflected in accrued expenses and other) $ - $ 2,152 During the years ended December 31, 2022 and 2021, the Company recorded the repurchase of 26,214 and 22,178 shares of the Company’s restricted stock awards, respectively, on the consolidated statements of stockholders’ deficiency. Effective April 4, 2022, there were no longer any shares of the Company’s common stock subject to repurchase. During the years ended December 31, 2022 and 2021, the Company paid $ 2,307 and $ 1,419 in cash for the repurchase, including interest of $ 155 and $ 254 , respectively. F- 38 14. Accrued Expenses and Othe r Accrued expenses and other are summarized as follows: Schedule of Accrued Expenses As of December 31, 2022 2021 General accrued expenses $ 6,339 $ 4,491 Accrued payroll and related taxes 5,221 7,124 Accrued publisher expenses 4,911 6,319 Deferred cash payments 1,123 656 Sales tax liability 645 779 Restricted stock liabilities - 2,152 Lease termination liability 4,753 1,846 Other accrued expenses 110 644 Total accrued expenses and other $ 23,102 $ 24,011 15. Line of Credit SLR Credit Facility – On December 15, 2022, the Company entered into an amendment to its financing and security agreement for its line of credit with SLR Digital Finance LLC (formerly FPP Finance LLC) (“SLR”), that was previously amended on December 6, 2021, pursuant to which (i) the maximum amount of advances available was increased to $ 40,000 (subject to certain limits and eighty-five ( 85 % ) of eligible accounts receivable ), (ii) the interest rate on the line of credit was amended to be the prime rate plus 4.0% per annum of the amount advanced (subject to minimum utilization of at least 10% of the maximum amount of advances available) (as of December 31, 2022 the rate was 11.5%), and (iii) the maturity of the line of credit was extended to December 31, 2024; provided that the maturity date will be December 31, 2023 if the Company has not refinanced, repaid or extended all of its Senior Secured Notes (as defined below) due December 31, 2023 by August 31, 2023, and provided further, that SLR will be entitled to accelerate the obligations if the Company has not refinanced, repaid or extended all of its Senior Secured Notes due December 31, 2023 by September 30, 2023 . In the event that the line of credit is accelerated, the Company will be obligated to pay SLR a termination fee of $ 900 . The amendment also permitted the Company to enter into the Bridge Notes (as defined below). The line of credit is for working capital purposes and is secured by a first lien on all the Company’s cash and accounts receivable and a second lien on all other assets. In connection with the line of credit, the Company incurred debt costs of $ 441 that are being amortized over the life of the line of credit with the unamortized balance reflected in prepayment and other current assets of $ 216 and other long-term assets of $ 216 , as of December 31, 2022, respectively. As of December 31, 2022, the effective interest rate on the line of credit was 12.7 % . As of December 31, 2022 and 2021, the balance outstanding under the line of credit was $ 14,092 and $ 11,988 , respectively. 16. Liquidated Damages Payable Liquidated Damages payable are summarized as follows (capitalized terms are described herein): Summary of Liquidated Damages As of December 31, 2022 Registration Rights Damages Public Information Failure Damages Accrued Interest Balance MDB common stock to be issued (1) $ 15 $ - $ - $ 15 Series H Preferred Stock 618 626 570 1,814 Convertible debentures - 704 280 984 Series J Preferred Stock 932 932 525 2,389 Series K Preferred Stock 437 478 220 1,135 Total $ 2,002 $ 2,740 $ 1,595 $ 6,337 (1) Shares of common stock issuable to MDB Capital Group, LLC (“MDB”). F- 39 As of December 31, 2022, the short-term and long-term liquidated damages payable were $ 5,843 and $ 494 , respectively, totaling $ 6,337 . The long-term portion was converted into shares of the Company’s common stock (see Note 29 under the heading of Liquidated Damages ). The Company will continue to accrue interest on the Liquidated Damages balance at 1% per month based on the balance outstanding until paid. There is no scheduled date when the unpaid Liquidated Damages become due. The Series K Preferred Stock (as defined below) remains subject to Registration Rights Damages and Public Information Failure Damages, which will accrue in certain circumstances, limited to 6 % of the aggregate amount invested (see Note 16). As of December 31, 2021 Registration Rights Damages Public Information Failure Damages Accrued Interest Balance MDB common stock to be issued (1) $ 15 $ - $ - $ 15 Series H Preferred Stock 1,164 1,172 792 3,128 Convertible debentures - 873 242 1,115 Series I Preferred Stock 1,386 1,386 613 3,385 Series J Preferred Stock 1,560 1,560 490 3,610 Series K Preferred Stock 180 722 50 952 Total $ 4,305 $ 5,713 $ 2,187 $ 12,205 (1) Shares of common stock issuable to MDB. As of December 31, 2021, the short-term and long-term liquidated damages payable were $ 5,197 and $ 7,008 , respectively, totaling $ 12,205 . The long-term portion was converted into shares of the Company’s common stock on January 24, 2022 (see Note 22, under the heading Common Stock for Liquidated Damages ). Information with respect to the Liquidated Damages recognized on the consolidated statements of operations is provided in Note 24. 17. Other Long-term Liabilities Other long-term liabilities consisted of the following: Schedule of Other long- term liabilities 2022 2021 As of December 31, 2022 2021 Lease termination liability $ 3,621 $ 6,928 Other lease liability 1,486 - Deferred cash payment liabilities - 410 Other 200 218 Total other long-term liabilities Other long -Term liabilities $ 5,307 $ 7,556 F- 40 18. Fair Value Measurement The Company’s financial instruments consist of level 1, Level 2 and level 3 assets as of December 31, 2022 and 2021. As of December 31, 2022 and 2021, the Company’s cash and cash equivalents of $ 13,871 and $ 9,349 , respectively, were Level 1 assets and included savings deposits, overnight investments, and other liquid funds with financial institutions. Financial instruments measured at fair value during the year consisted of the following: Schedule of Fair Value of Financial Instruments As of December 31, 2022 Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Senior Secured Notes $ 61,787 $ - $ 61,787 $ - As of December 31, 2021 Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Senior Secured Notes $ 60,756 $ - $ 60,756 $ - Senior Secured Notes – The carrying value of the Senior Secured Notes (as defined below) approximates fair value based on current market interest rates for debt instruments of similar credit standing and, consequently, their fair values are based on Level 2 inputs. The quantitative information utilized in the fair value calculation of the Level 3 liabilities are as follows: Unearned Revenue – The fair value of unearned revenue remaining in connection with the 2019 acquisitions of Sports Illustrated Licensed Brands, was determined with the following inputs: (1) projection of when unearned revenue will be earned; (2) expense necessary to fulfill the subscriptions; (3) gross up of the fulfillment costs to include a market participant level of profitability; (4) slight premium to the fulfillment-costs plus a reasonable profit metric; and (5) reduce projected future cash flows to present value using an appropriate discount rate. The unearned revenue remaining from the acquisitions as of December 31, 2022 and 2021 was $ 1,154 and $ 4,855 , respectively. The changes in unearned revenue with inputs classified as Level 3 of the fair value hierarchy are reflected within revenue on the consolidated statements of operations. Warrant Derivative Liabilities – The Company accounted for certain warrants issued in connection with previously issued convertible debentures, as derivative liabilities, which required the Company carry such amounts on its consolidated balance sheets as a liability at fair value, as adjusted at each reporting period end. The Company determined the fair value of the Strome Warrants and B. Riley Warrants (as described in Note 22) utilizing the Black-Scholes valuation model as further described below. These warrants were classified as Level 3 within the fair-value hierarchy prior to reclassification to equity (as described below). Inputs to the valuation model include the Company’s publicly quoted stock price, the stock volatility, the risk-free interest rate, the remaining life of the warrants, the exercise price or conversion price, and the dividend rate. The Company uses the closing stock price of its common stock over an appropriate period of time to compute stock volatility. These assumptions are summarized as follows: Strome Warrants – 2021 assumptions upon reclassification to equity: Black-Scholes option-pricing; expected life: 1.54 years; risk-free interest rate: 0.60 % ; volatility factor: 146.68 % ; dividend rate: 0.0 % ; transaction date closing market price: $ 0.62 ; exercise price: $ 0.50 . B. Riley Warrants – 2021 assumptions upon reclassification to equity: Black-Scholes option-pricing; expected life: 3.88 years; risk-free interest rate: 1.14 % ; volatility factor: 144.61 % ; dividend rate: 0.0 % ; transaction date closing market price: $ 0.62 ; exercise price: $ 0.33 . F- 41 The following table represents the carrying amounts, change in valuation for the Company’s warrants accounted for as a derivative liability and classified within Level 3 of the fair-value hierarchy and fair value recorded upon reclassification to equity as of and during the year ended December 31, 2021: Schedule of Valuation Activity for the Embedded Conversion Feature Liability Carrying Amount at Beginning of Year Change in Valuation Reclassification to Equity Carrying Amount at End of Year Strome Warrants $ 704 $ ( 75 ) $ ( 629 ) $ - B. Riley Warrants 443 41 ( 484 ) - Total $ 1,147 $ ( 34 ) $ ( 1,113 ) $ - For the year ended December 31, 2021, the change in valuation of warrant derivative liabilities recognized within other income on the consolidated statements of operations was $ 34 . The Strome Warrants and B. Riley Warrants were reclassified to equity upon filing an effective registration statement during the year ended December 31, 2021, resulting in a $ 1,113 offset within additional paid-in capital on the consolidated statements of stockholders’ deficiency. 19. Bridge Notes On December 15, 2022, the Company issued $ 36,000 aggregate principal amount of senior secured notes (the “Bridge Notes”) pursuant to a third amended and restated note purchase agreement (as described below) with B. Riley, in its capacity as agent for the purchasers and as purchaser. The Company received net proceeds of $ 34,728 from the issuance of the Bridge Notes. Interest on the Bridge Notes is payable in cash at a rate of 12 % per annum quarterly in arrears on March 31, 2023, June 30, 2023, September 30, 2023, and December 31, 2023; provided that, on March 1, 2023, May 1, 2023, and July 1, 2023, the interest rate on the Bridge Notes will increase by 1.5 % per annum, with maturity on December 31, 2023 . The Bridge Notes are subject to certain mandatory prepayment requirements, including, but not limited to, a requirement that the Company apply the net proceeds from certain debt incurrences or equity offerings to repay the Bridge Notes. The Company may elect to prepay the Bridge Notes, at any time, in whole or in part with no premium or penalty. The Bridge Notes are secured by liens on the same collateral that secures indebtedness under the Company’s outstanding Senior Secured Notes (as defined below) and are guaranteed by the Company’s subsidiaries that guarantee the Senior Secured Notes. The Bridge Notes provide for certain covenants and event of default provisions similar to those contained in the Senior Secured Notes. In connection with the Bridge Notes, the Company incurred debt costs of $ 1,272 that are being amortized over the expected life of the debt. As of December 31, 2022, the effective interest rate was 19.0 %. As of December 31, 2022, the balance outstanding under the Bridge Notes was $ 34,805 ($ 36,000 principal balance less unamortized debt costs of $ 1,195 ). 20. Long-term Debt Senior Secured Notes As of December 31, 2022 and 2021, the Company had an outstanding obligation with B. Riley, in its capacity as agent for the purchasers and as purchaser, pursuant to a third amended and restated note purchase agreement (the “Senior Secured Notes”) entered into on December 15, 2022, where it amended the second amended and restated note purchase agreement issued on January 23, 2022. The Senior Secured Notes, prior to and including the third amended and restated note purchase agreement, provide for: ● a provision for the Company to enter into Delayed Draw Term Notes (as described below), in the aggregate principal amount of $ 9,928 as of December 31, 2021; ● a provision where the Company added $ 13,852 to the principal balance of the notes for interest payable on the notes on last day of a fiscal quarter from September 30, 2020 to December 31, 2021 as payable in-kind; F- 42 ● a provision where the paid in-kind interest can be paid in shares of the Company’s common stock based upon the conversion rate specified in the Certificate of Designation for the Series K Preferred Stock, subject to certain adjustments; ● an interest rate of 10.0 % per annum, subject to adjustment in the event of default, with a provision that within one (1) business day after receipt of cash proceeds from any issuance of equity interests, the Company will prepay certain obligations in an amount equal to such cash proceeds, net of underwriting discounts and commissions; ● interest on the notes will be payable after February 15, 2022, at the agent’s sole discretion, either (a) in cash quarterly in arrears on the last day of each fiscal quarter or (b) by continuing to add such interest due on such payment dates to the principal amount of the notes; ● a maturity date of December 31, 2023, subject to certain acceleration conditions; ● all borrowings under the notes to be collateralized by substantially all assets of the Company; and ● the Company to enter into the Bridge Notes for $ 36,000 and to increase the line of credit with SLR in an aggregate principal amount not to exceed $ 40,000 . Delayed Draw Term Notes As of December 31, 2022 and 2021, the Company had an outstanding obligation with B. Riley, in its capacity as agent for the purchasers and as purchaser, pursuant to a third amended and restated note purchase agreement (the “Delayed Draw Term Notes”) entered into on December 15, 2022, where it amended the second amended and restated note purchase agreement issued on January 23, 2022: The Delayed Draw Term Notes, prior to and including the third amended and restated note purchase agreement, provide for: ● an interest rate of 10.0 % per annum, subject to adjustment in the event of default; ● a drawdown of $ 5,086 ($ 4,578 net proceeds were received after payment of commitment and funding fees paid $ 509 ) on December 28, 2021; and ● interest on the notes to be payable after February 15, 2022, at the agent’s sole discretion, either (a) in cash quarterly in arrears on the last day of each fiscal quarter or (b) by continuing to add such interest due on such payment dates to the principal amount of the notes; a maturity date on December 31, 2022 for $ 5,928 of principal due (repaid with the proceeds from the Bridge Notes) with the remaining balance due of $ 4,000 on December 31, 2023, subject to certain acceleration terms; and ● all borrowings under the notes to be collateralized by substantially all assets of the Company. F- 43 The following table summarizes the long-term debt: Schedule of Long Term Debt As of December 31, 2022 As of December 31, 2021 Principal Balance Unamortized Discount and Debt Issuance Costs Carrying Value Principal Balance Unamortized Discount and Debt Issuance Costs Carrying Value Senior Secured Notes, as amended, matures December 31, 2023 $ 62,691 $ ( 904 ) $ 61,787 $ 62,691 $ ( 1,935 ) $ 60,756 Delayed Draw Term Notes, as amended, matures December 31, 2023 4,000 ( 103 ) 3,897 9,928 ( 567 ) 9,361 Total $ 66,691 $ ( 1,007 ) $ 65,684 $ 72,619 $ ( 2,502 ) $ 70,117 Carrying value: Current portion $ 65,684 $ 5,744 Long-term portion - 64,373 Total $ 65,684 $ 70,117 As of December 31, 2022 and 2021, the Company’s Delayed Draw Term Notes, as amended, carrying value of $ 3,897 and $ 9,361 , respectively, was as follows: (1) $ 0 and $ 5,928 for the first draw (less unamortized discount and debt issuance costs of $ 0 and $ 180 ), respectively; and (2) $ 4,000 and $ 4,000 for the second draw (less unamortized discount and debt issuance costs of $ 103 and $ 387 ), respectively. As of December 31, 2022, the effective interest of the Senior Secured Notes and Delayed Draw Term Notes second draw was 11.4 % and 12.5 %, respectively. The Company’s principal maturities of long-term debt are due December 31, 2023 in the amount of $ 66,691 . Information for the years ended December 31, 2022 and 2021 with respect to interest expense related to long-term debt is provided below. F- 44 Interest Expense The following table represents interest expense: Summary of Interest Expense Years Ended December 31, 2022 2021 Amortization of debt costs: Senior Secured Notes $ 1,031 $ 1,806 Delayed Draw Term Notes 464 300 Bridge Notes 77 - Line of credit 9 - Total amortization of debt costs 1,581 2,106 Accrued and noncash converted interest: Senior Secured Notes - 6,394 Delayed Draw Term Notes - 548 Bridge Notes 204 - Parade 116 - Payroll Protection Program Loan - 14 Total accrued and noncash converted interest 320 6,956 Cash paid interest: Senior Secured Notes 6,356 - Delayed Draw Term Notes 980 - Line of credit 1,328 825 Other 864 568 Total cash paid interest 9,528 1,393 Total interest expense $ 11,429 $ 10,455 Paycheck Protection Program Loan During the year ended December 31, 2021, the Company recorded a $ 5,717 (including accrued interest of $ 14 ) gain upon debt extinguishment that was recognized pursuant to a Paycheck Protection Program Loan that was forgiven on June 22, 2021 that was entered into on April 6, 2020 with JPMorgan Chase Bank, N.A. under the enacted Coronavirus Aid, Relief, and Economic Security Act administered by the U.S. Small Business Administration, in other income on the consolidated statements of operations. 21. Preferred Stock The Company has the authority to issue 1,000,000 shares of preferred stock, $ 0.01 par value per share, consisting of authorized and/or outstanding shares as of December 31, 2022 as follows: ● 2,000 authorized shares were designated as “Series F Convertible Preferred Stock”, none of which were outstanding. The Series F Convertible Preferred Stock was eliminated on September 7, 2021. ● 1,800 authorized shares designated as “Series G Convertible Preferred Stock” (as further described below), of which 168.496 shares are outstanding. ● 23,000 authorized shares designated as “Series H Convertible Preferred Stock” (as further described below), of which 14,356 shares are outstanding. ● 25,800 authorized shares were designated as “Series I Convertible Preferred Stock” (the “Series I Preferred Stock”) on June 27, 2019, none of which were outstanding. The Series I Preferred Stock was eliminated on September 7, 2021. ● 35,000 authorized shares were designated as “Series J Convertible Preferred Stock” (the “Series J Preferred Stock”) on October 4, 2019, none of which were outstanding. The Series J Preferred Stock was eliminated on September 7, 2021. F- 45 ● 20,000 authorized shares were designated as “Series K Convertible Preferred Stock” (the “Series K Preferred Stock”) on October 22, 2020, none of which were outstanding. The Series K Preferred Stock was eliminated on September 7, 2021. ● 600,000 authorized shares were designated as “Series L Junior Participating Preferred Stock”, par value $ 0.01 per share, in connection with the entry by the Company into that certain Rights Agreement with American Stock Transfer & Trust Company, LLC as of May 4, 2021 (as amended and restated on May 2, 2022 and otherwise from time to time, the “Amended and Restated Rights Agreement”). The extension of the term of the Amended and Restated Rights Agreement was approved by a vote of the stockholders at the Annual Meeting on June 2, 20022. The Series L Junior Participating Preferred Stock was eliminated on July 18, 2022, thereby effectively terminating all preferred share purchase rights under the Amended and Restated Rights Agreement such that the shares of Series L Junior Participating Preferred Stock are no longer issued or outstanding. Series G Preferred Stock On May 30, 2000, the Company sold 1,800 shares of its Series G Convertible Preferred Stock (the “Series G Preferred Stock”), of which 1,631.504 were converted prior to November 2001 and 168.496 shares continue to be outstanding, at a stated value of $ 1 per share, convertible into shares of the Company’s common stock , as adjusted for the stock split on February 8, 2022, and will be further adjusted in the event of another stock splits, stock dividends, combinations of shares and similar transactions subject to stock splits. The Series G Preferred Stock is convertible into shares of common stock, at the option of the holder, subject to certain limitations. The Company may require holders to convert all (but not less than all) of the Series G Preferred Stock or buy out all outstanding shares of Series G Preferred Stock at the liquidation value of $ 168 . Holders of Series G Preferred Stock are not entitled to dividends and have no voting rights, unless required by law or with respect to certain matters relating to the Series G Preferred Stock. Upon a change in control, sale of or similar transaction, as defined in the Certificate of Designation for the Series G Preferred Stock, the holder of the Series G Preferred Stock has the option to deem such transaction as a liquidation and may redeem their 168.496 shares at the liquidation value of $ 1 per share, or an aggregate amount of $ 168 . The sale of all the assets of the Company on June 28, 2007 triggered the redemption option. As such redemption was not in the control of the Company, the Series G Preferred Stock has been accounted for as if it is redeemable preferred stock and is classified on the consolidated balance sheets as a mezzanine obligation between liabilities and stockholders’ deficiency. Series H Preferred Stock As of January 1, 2021, the Company had 19,596 shares of Series H Convertible Preferred Stock (the “Series H Preferred Stock”) outstanding at a stated value of $ 1,000 per share, convertible into shares of the Company’s common stock, as adjusted for the stock split on February 8, 2022, and will be further adjusted in the event of another stock splits, stock dividends, combinations of shares and similar transactions, at the option of the holder subject to certain limitations, at a conversion rate equal to the stated value divided by the conversion price of $ 7.26 per share. The Series H Preferred Stock was subject to Registration Rights Damages and Public Information Failure Damages (see Note 16). Each Series H Preferred Stock votes on an as-if-converted to common stock basis, subject to beneficial ownership blocker provisions and other certain conditions. The holders of the Series H Preferred Stock can participate any time the Company grants, issues or sells any common stock equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of common stock, subject to certain conditions, adjustments, and limitations. All the shares of Series H Preferred Stock automatically convert into shares of the Company’s common stock on the fifth anniversary of the initial first closing, or August 10, 2023, at the conversion price of $ 7.26 per share. F- 46 The shares of Series H Preferred Stock were subject to limitations on conversion into shares of the Company’s common stock until the date that increased the number of authorized shares of its common stock to at least a number permitting all the Series H Preferred Stock to be converted in full, which was filed on December 18, 2020, therefore this limitation was removed (as further described in Note 22). The following table represents the activity of the Series H Preferred Stock from January 1, 2021 through December 31, 2022: Schedule of Components of Preferred Stock Shares Amount Series H Preferred Stock at January 1, 2021 19,596 $ 18,248 Conversion of Series H Preferred Stock into common stock during the year ended December 31, 2021 ( 4,530 ) ( 4,530 ) Series H Preferred Stock at December 31, 2021 15,066 13,718 Conversion of Series H Preferred Stock into common stock during the year ended December 31, 2022 ( 710 ) ( 710 ) Series H Preferred Stock at December 31, 2022 14,356 $ 13,008 The Company recorded the issuance of shares of the Company’s common stock upon conversion of the Series H Preferred Stock of 97,980 and 624,111 with a corresponding amount of $ 710 and $ 4,530 during the years ended December 31, 2022 and 2021, respectively, on the consolidated statements of stockholders’ deficiency. 22. Stockholders’ Deficiency Common Stock The Company has the authority to issue 1,000,000,000 shares of common stock, $ 0.01 par value per share as the result of filing on December 18, 2020, a Certificate of Amendment with the Secretary of the State of Delaware to increase the number of authorized shares of its common stock from 100,000,000 shares to 1,000,000,000 shares. Common Stock Public Offering – During the year ended December 31, 2022, the Company raised gross proceeds of $ 34,498 pursuant to a firm commitment underwritten public offering of 4,181,603 shares of the Company’s common stock (on February 15, 2022 the Company issued 3,636,364 shares and on March 11, 2022 the Company issued 545,239 shares pursuant to the underwriter’s overallotment that was exercised on March 10, 2022), at a public offering price of $ 8.25 per share. The Company received net proceeds of $ 32,058 , after deducting underwriting discounts and commissions and other offering costs payable by the Company. In addition, the Company directly incurred offering costs of $ 1,568 and recorded $ 30,490 upon the issuance of its common stock, as reflected on the consolidated statements of stockholders’ deficiency. Common Stock Private Placement – During the year ended December 31, 2021, the Company entered into securities purchase agreements with several accredited investors, pursuant to which the Company sold an aggregate of 1,299,027 shares of the Company’s common stock at a price of $ 15.40 per share for aggregate gross proceeds of $ 20,005 ( 974,351 shares were issued on May 20, 2021 and May 25, 2021 for gross proceeds of $ 15,005 and 324,676 shares were issued on June 2, 2021 for gross proceeds of $ 5,000 ). After payment of legal fees and expenses of $ 167 , of which $ 100 was paid in cash to B. Riley, the Company received net proceeds of $ 19,838 as reflected on the consolidated statements of stockholders’ deficiency. The shares of the Company’s common stock issued in connection with the common stock private placement is subject to Registration Rights Damages and Public Information Failure Damages, in certain circumstances and limited to 6 % of the aggregate amount invested (see Note 16). Common Stock Withheld – The Company recorded the repurchase of vested restricted common stock of 373,394 shares for the payment for taxes of $ 4,468 , and 4,355 shares for the payment for taxes of $ 70 , during the years ended December 31, 2022 and 2021, respectively, as reflected on the consolidated statements of stockholders’ deficiency. F- 47 Common Stock for Acquisitions – The Company recorded the issuance of 330,863 shares of the Company’s common stock as follows: (i) 314,103 shares were issued pursuant to the Parade stock acquisition on April 1, 2022, with a fair market value of $ 3,141 , as further described in Note 4; and (ii) 16,760 shares were issued on March 9, 2022, pursuant to an asset acquisition entered into March 9, 2020 with no fair value recognized at the time of issuance, during the year ended December 31, 2022, as reflected on the consolidated statements of stockholders’ deficiency. Common Stock for Liquidated Damages – The Company entered into several stock purchase agreements with several investors on January 24, 2022, where the Company was liable to for liquidated damages, pursuant to which the Company issued an aggregate of 505,655 shares of its common stock at a price equal to $ 13.86 per share (determined based on the volume-weighted average price of the Company’s common stock at the close of trading on the sixty (60) previous trading days), to the investors in lieu of an aggregate of $ 7,008 owed in liquidated damages. In connection with the stock purchase agreements, the Company filed a registration statement covering the resale of 505,655 shares of the Company’s common stock. The Company recorded $ 6,685 in connection with the issuance of shares of the Company’s common stock and recognized a gain of $ 323 on the settlement of the liquidated damages, which was recorded as additional paid-in capital on the consolidated statement of stockholders’ deficiency. Exercise of Stock Options – The Company recorded the exercise of 96,408 common stock options for shares of the Company’s common stock for cash of $ 95 , during the year ended December 31, 2022, as reflected on the consolidated statements of stockholders’ deficiency. Professional Services – The Company issued, in connection with entering into several professional services agreements, 14,617 and 14,205 shares of the Company’s common stock ( 14,617 shares consisted of 1,134 shares issued on January 12, 2022 at $ 13.20 and 13,483 shares issued on January 26, 2022 at $ 12.54 ) and ( 14,205 shares issued on January 21, 2021 at $ 8.80 ) that were recorded at the trading price on the issuance date during the years ended December 31, 2022 and 2021 of $ 184 and $ 125 , respectively, as reflected on the consolidated statements of stockholders’ deficiency. Restricted Stock Units – The Company issued, in connection with the vesting of restricted stock units, 832,233 shares of the Company’s common stock (as described in Note 23) and 34,395 shares of the Company’s common stock ( 11,667 shares issued in connection with an asset acquisition and 22,728 shares issued to a certain board member) during the years ended December 31, 2022 and 2021, respectively, as reflected on the consolidated statements of stockholders’ equity. Restricted Common Stock – The Company issued, in connection with certain acquisitions, 228,898 shares of the Company’s restricted common stock ( 194,806 shares in connection with The Spun, as further described below, and 34,092 shares in connection with Fulltime Fantasy, as further described in Note 4) during the year ended December 31, 2021, as reflected on the consolidated statements of stockholders’ deficiency. Restricted Stock Awards During the year ended December 31, 2021, the Company issued an aggregate of 48,856 shares of its common stock as restricted stock awards to certain members of the Board, subject to continued service with the Company, with vesting generally over a twelve-month period (or shorter if granted after January 1, 2021 so that the awards are fully vested as of December 31, 2021) from the grant date, of which 6,844 unvested restricted stock awards were forfeited. Unless otherwise stated, the fair value of a restricted stock award is determined based on the number of shares granted and the quoted price of the Company’s common stock on the date issued. The estimated fair value of these shares is being recognized as compensation expense over the vesting period of the award (see Note 23) . F- 48 A summary of the restricted stock award activity during the year ended December 31, 2022 is as follows: Summary of Restricted Stock Award Activity Number of Shares Weighted Average Grant-Date Fair Value Restricted stock awards outstanding at January 1, 2022 194,806 $ 16.94 Vested ( 97,403 ) ( 16.94 ) Restricted stock awards outstanding at December 31, 2022 97,403 16.94 During the year ended December 31, 2021, the Company permitted an exchange of 4,035 shares from vested restricted stock awards for the exercise of 7,893 common stock options (issued under the 2019 Plan, see Note 23) for the net exercise of 3,858 common stock options for shares of the Company’s common stock as reflected on the consolidated statements of stockholders’ deficiency. Information with respect to stock-based compensation cost and unrecognized stock-based compensation cost related to the restricted stock awards is provided under the heading Stock-Based Compensation in Note 23. Common Stock to be Issued In connection with the Say Media merger on December 12, 2018, the Company issued 7,851 shares of the Company’s common stock during the year ended December 31, 2022, out of the total shares required to be issued of 46,406 as of January 1, 2021. As of December 31, 2022, 38,555 shares of the Company’s common stock have not been issued and are to be issued. In connection with a closing of a private placement on January 4, 2018, MDB, as the placement agent, was entitled to receive 2,728 shares of the Company’s common stock that have not been issued as of December 31, 2022, as reflected on the consolidated statements of stockholders’ deficiency as common stock to be issued that were subject to Liquidated Damages (see Note 16). Common Stock Warrants Warrants issued to purchase shares of the Company’s common stock to Strome, and B. Riley (collectively the “Financing Warrants”) are described below. Strome Warrants – On June 15, 2018, the Company modified the two securities purchase agreements dated January 4, 2018 and March 30, 2018 with Strome Mezzanine Fund LP (“Strome”). As consideration for such modification, the Company issued warrants to Strome (the “Strome Warrants”) to purchase 68,182 shares of common stock, exercisable at price of $ 11.00 per share (as amended), which were carried on the consolidated balance sheets as a derivative liability at fair value, as adjusted at each period-end since, among other criteria, delivery of unregistered shares was precluded upon exercise (see Note 18). The Strome Warrants are exercisable for a period of five years, subject to customary anti-dilution adjustments, and may, in the event there is no effective registration statement covering the resale of the warrant shares, be exercised on a cashless basis in certain circumstances. B. Riley Warrants – On October 18, 2018, the Company issued warrants to B. Riley (the “B. Riley Warrants”) to purchase up to 39,774 shares of the Company’s common stock, with an original exercise price of $ 22.00 per share (subsequently adjusted to $ 7.26 ), subject to customary anti-dilution adjustments, which were carried on the consolidated balance sheets as a derivative liability at fair value, as adjusted at each period-end since, among other criteria, delivery of unregistered shares was precluded upon exercise (see Note 18). F- 49 The B. Riley Warrants are exercisable for a period of five years, subject to customary anti-dilution adjustments, and may, in the event, at any time after the six-month anniversary of the issuance of the warrants, if there is no effective registration statement covering the re-sale of the shares of common stock underlying the warrants, the warrants may be exercised on a cashless basis. A summary of the Financing Warrants activity during the year ended December 31, 2022 is as follows: Summary of Warrant Activity Weighted Average Weighted Remaining Number Average Contractual of Exercise Life Shares Price (in Years) Financing Warrants outstanding at January 1, 2022 116,118 $ 13.20 2.94 Expired ( 8,162 ) 35.22 Financing Warrants outstanding at December 31, 2022 107,956 10.61 1.32 Financing Warrants exercisable at December 31, 2022 107,956 10.61 1.32 The Financing Warrants outstanding and exercisable classified within the statement of stockholders’ deficiency as of December 31, 2022 are summarized as follows: Schedule of Common Stock Financing Warrants Outstanding and Exercisable Exercise Price Expiration Date Total Exercisable (Shares) Strome Warrants $ 11.00 June 15, 2023 68,182 B. Riley Warrants 7.26 October 18, 2025 39,774 Total outstanding and exercisable 107,956 The intrinsic value of exercisable but unexercised in-the-money Financing Warrants as of December 31, 2022 was $ 133 based on a fair market value of the Company’s common stock of $ 10.61 per share on December 31, 2022. AllHipHop Warrants – On October 26, 2020, the Company exchanged 6,819 of Publisher Partner Warrants (as further described under the heading Publisher Partner Warrants ) granted to AllHipHop, LLC for an aggregate of 5,681 warrants for shares of the Company’s common stock with an exercise price of $ 14.30 (the “AllHipHop Warrants”). The AllHipHop Warrants are exercisable for a period of five years, subject to customary anti-dilution adjustments, and may be exercised on a cashless basis. F- 50 ABG Warrants – On June 14, 2019, the Company issued 999,540 warrants to acquire the Company’s common stock to ABG (the “ABG Warrants”) in connection with the Sports Illustrated Licensing Agreement, expiring in ten years . Half the warrants have an exercise price of $9.24 per share (the “$9.24 Warrants”). The other half of the warrants have an exercise price of $ 18.48 per share (the “$18.48 Warrants”). The warrants provide for the following: (1) 40% of the $9.24 Warrants and 40% of the $18.48 Warrants vest in equal monthly increments over a period of two years beginning on the one year anniversary of the date of issuance of the warrants (any unvested portion of such warrants to be forfeited by ABG upon certain terminations by the Company of the Sports Illustrated Licensing Agreement) (the “Time-Based Warrants”); (2) 60% of the $9.24 Warrants and 60% of the $18.48 Warrants vest based on the achievement of certain performance goals for the licensed brands in calendar years 2020, 2021, 2022, or 2023; (3) under certain circumstances the Company may require ABG to exercise all (and not less than all) of the warrants, in which case all of the warrants will be vested; (4) all of the warrants automatically vest upon certain terminations of the Licensing Agreement by ABG or upon a change of control of the Company (the “Performance-Based Warrants”); and (5) ABG has the right to participate, on a pro-rata basis (including vested and unvested warrants, exercised or unexercised), in any future equity issuance of the Company (subject to customary exceptions) . On June 4, 2021, the Company amended certain ABG Warrants in exchange for additional benefits under the Sports Illustrated Licensing Agreement as follows: ● The exercise price of 99,954 Time-Based Warrants (50% of the original warrants granted totaling 199,908 ) were adjusted from $ 18.48 to $ 9.24 per share as adjusted for any stock splits, combinations, stock dividends, reclassifications, recapitalizations and other similar events (further details on the modifications are provided in Note 23). ● The exercise price of 149,931 Performance-Based Warrants (50% of the original warrants granted totaling 299,862 ) were adjusted from $ 18.48 to $ 9.24 per share as adjusted for any stock splits, combinations, stock dividends, reclassifications, recapitalizations and other similar events (further details on the modifications are provided in Note 23). Information with respect to stock-based compensation cost and unrecognized stock-based compensation cost related to the ABG Warrants is provided in Note 23. Publisher Partner Warrants – On May 20, 2020, the Board approved a third publisher partner warrant program, which superseded the second publisher partner warrant program and authorized the Company to grant publisher partner warrants to purchase up to 90,910 shares of the Company’s common stock (the “Publisher Partner Warrants”). The issuance of the Publisher Partner Warrants is administered by management and approved by the Board. New Publisher Partner Warrants – On November 2, 2022, the Board approved a warrant incentive program to grant warrants to certain publishers (the “New Publisher Partner Warrants”), that authorized the Company to grant New Publisher Partner Warrants to purchase up to 33,000 shares of the Company’s common stock. The New Publisher Partner Warrants will have the following terms: (i) one-third will become exercisable and vest on the one-year anniversary of the issuance; (ii) the remaining warrants will become exercisable and vest in a series of twenty-four (24) successive equal monthly installments following the first anniversary of the issuance; and (iii) a five-year term. The issuance of the New Publisher Partner Warrants is administered by management and approved by the Board. No New Publisher Partner Warrants have been issued. Information with respect to stock-based compensation cost and unrecognized stock-based compensation cost related to the Publisher Partner Warrants is provided in Note 23. 23. Stock – Based Compensation Stock-Based Compensation The Company issued stock-based compensation awards under several plans as follows: ● 2016 Plan – On December 19, 2016, the Board adopted the 2016 Stock Incentive Plan (the “2016 Plan”) that allowed the Company to grant statutory and non-statutory common stock options, and restricted stock awards to acquire shares of the Company’s common stock to employees, directors and consultants, with vesting variable vesting provisions consisting of time-based and performance-based. The Company is no longer issuing awards under the 2016 Plan. ● 2019 Plan – On April 4, 2019, the Board adopted the 2019 Equity Incentive Plan (the “2019 Plan”) that allowed awards of stock options, restricted stock awards, restricted stock units, unrestricted stock awards, and stock appreciation rights, with variable vesting provisions consisting of time-based, performance-based, or market-based. The Company is no longer issuing option awards under the 2019 Plan. F- 51 ● Outside Options – The Company granted stock options outside the 2016 Plan and 2019 Plan (the “Outside Options”) that allowed the Company to grant statutory and non-statutory common stock options, with variable vesting provisions consisting time-based, performance-based targets and certain performance achievements. The Company is no longer issuing Outside Options. ● 2022 Plan – On April 18, 2022, the Board adopted the 2022 Stock and Equity Compensation Plan (the “2022 Plan”) that was approved by the Company’s stockholders’ on June 2, 2022 with a maximum number of shares authorized to be issued under the plan of 1,800,000 . The purpose of the 2022 Plan is to foster the growth and success of the Company by providing a means to attract, motivate and retain officers, directors, key employees, and consultants through awards of stock options, stock appreciation rights, restricted stock awards, unrestricted stock awards and restricted stock units. Shares subject to an award that have been canceled, expired, settled in cash, or not issued or forfeited for any reason will not reduce the aggregate number of shares that may be subject to or delivered under the 2022 Plan and will be available for future awards granted under the 2022 Plan. Common stock options issued under the 2022 Plan may have a term of up to ten years and may have variable vesting provisions based on time and performance. The issuance of awards under the 2022 Plan will be administered by the Board or any committee of directors designated by the Board. Restricted Stock Awards On October 7, 2021, the Company modified 18,940 restricted stock awards that were issued to certain members of the board upon their resignation from the Board to accelerate the vesting upon their resignation, resulting in incremental cost of $ 41 that was recognized at the modification date. Restricted Stock Units During the year ended December 31, 2022, the Company issued restricted stock units to various employees and members of the board subject to continued service. Upon vesting of the award, subject to certain conditions for release of the award, the Company issues the underlying common stock of the Company. The fair value of a restricted stock unit was determined based on the number of shares granted and the quoted price of the Company’s common stock on the date issued during the years ended December 31, 2022, 2021 and 2020. A summary of the restricted stock unit activity during the year ended December 31, 2022 is as follows: Schedule of Restricted Stock Units Activity Number of Shares Weighted Average Grant-Date Unvested Vested Fair Value Restricted stock units outstanding at January 1, 2022 1,636,111 155,211 $ 14.93 Granted 442,145 - 11.35 Vested ( 1,074,398 ) 1,074,398 - Released - ( 832,233 ) - Cancelled ( 9,092 ) - - Restricted stock units outstanding at December 31, 2022 994,766 397,376 15.44 On November 22, 2022, the Company modified 232,816 restricted stock units that were issued to one employee (Ross Levinsohn) to remove the market trading volume condition, resulting in incremental cost of $ 321 at the modification date. The Company’s policy is to repurchase the number of shares of its common stock at the fair market value at the time of issuance upon conversion of restricted stock units to cover the tax obligations. In addition, the Company’s policy is to issue new shares of its common stock upon conversion of restricted stock units. During the year ending December 31, 2023, the Company expects to repurchase approximately 725,000 shares of its common stock upon conversion of restricted stock units that are expected to vest and be released during the period. The total intrinsic value of shares of the Company’s common stock issued for restricted stock units that were released during the years ended December 31, 2022 and 2021 were $ 8,707 and $ 285 , respectively. Information with respect to stock-based compensation cost related to the restricted stock units is included within the Restricted Stock caption under the heading Stock-Based Compensation . F- 52 Common Stock Options During the years ended December 31, 2022 and 2021, the Company issued common stock options under the 2016 Plan, 2019 Plan, 2022 Plan along with Outside Options, consisting of primarily of incentive stock options with a term of up to ten years and variable vesting provisions consisting of time-based, performance-based, or market-based. The estimated fair value of the common stock option awards is recognized as compensation expense over the vesting period of the award. The fair value of common stock option awards granted during the year ended December 31, 2022 were calculated using a Black-Scholes options pricing model for the time-based awards and performance-based awards by an independent appraisal firm under the Up-List Scenario after the Company was listed on the NYSE American. The fair value of common stock option awards granted during the year ended December 31, 2021 was calculated using the Black-Scholes option pricing model for the time-based and performance-based awards by an independent appraisal firm under the Probability Weighted Scenarios, prior to the Company listed on the NYSE American, utilizing the following assumptions: Schedule of Fair Value of Stock Options Assumptions Years Ended December 31, 2022 2021 Up-list No Up-list Up-list No Up-list Risk-free interest rate 0.97 % - 4.36 % 0.97 % - 1.44 % 0.16 % - 1.48 % 0.16 % - 1.48 % Expected dividend yield 0.00 % 0.00 % 0.00 % 0.00 % Expected volatility 42.00 % - 82.00 % 82.00 % - 137.00 % 65.00 % - 90.00 % 133.00 % - 140.00 % Expected life 3.0 – 6.0 years 3.0 – 6.0 years 3.0 – 6.0 years 3.0 – 6.0 years A summary of the common stock option activity during the year ended December 31, 2022 is as follows: Summary of Stock Option Activity Weighted Average Weighted Remaining Number Average Contractual of Exercise Life Shares Price (in Years) Common stock options outstanding at January 1, 2022 5,525,395 $ 15.26 8.20 Granted 1,370,217 10.64 Exercised ( 341,113 ) 8.79 Forfeited ( 234,963 ) 13.91 Expired ( 120,015 ) 12.34 Common stock options outstanding at December 31, 2022 6,199,521 9.73 7.61 Common stock options exercisable at December 31, 2022 3,444,261 9.55 7.00 Common stock options not vested at December 31, 2022 2,755,260 Common stock options available for future grants at December 31, 2022 (1) 504,782 (1) Shares of the Company’s common stock available for future grants under the 2022 Plan represent 1,800,000 shares authorized less an aggregate of 964,455 common stock options outstanding and 330,763 restricted stock units outstanding. The aggregate grant date fair value of common stock options granted during the years ended December 31, 2022 and 2021 was $ 7,194 and $ 29,124 , respectively. The weighted-average grant-date fair value of common stock options granted during the years ended December 31, 2022 and 2021 were $ 5.25 and $ 12.23 , respectively. The total fair value of common stock options vested during the years ended December 31, 2022 and 2021 were $ 12,694 and $ 14,808 , respectively. The total intrinsic value of common stock options exercised during the years ended December 31, 2022 and 2021 were $ 1,507 and $ 50 , respectively. The unvested common stock options for which the vesting is expected based on achievement of a performance condition as of December 31, 2022 were 684,867 with a weighted average remaining contractual term of 6.55 years. The Company’s policy is to repurchase the number of shares of its common stock at the fair market value at the time of issuance of its common stock upon exercise of common stock options to cover the tax obligations and any cashless exercise. In addition, the Company’s policy is to issue new shares of its common stock upon exercise of common stock options. The intrinsic value of exercisable but unexercised in-the-money common stock option awards as of December 31, 2022 was $ 5,534 based on a fair market value of the Company’s common stock of $ 10.61 per share on December 31, 2022. F- 53 The exercise prices under the common stock options outstanding and exercisable are as follows as of December 31, 2022: Schedule of Exercise Prices of Common Stock Options Exercise Outstanding Vested Price (Shares) (Shares) $ 3.74 to $ 10.50 4,879,580 3,167,307 $ 10.51 to $ 15.52 1,239,913 201,976 $ 15.53 to $ 20.54 11,270 10,765 $ 20.55 to $ 25.56 26,365 21,820 $ 25.57 to $ 30.58 1,251 1,251 $ 30.59 to $ 35.60 6,366 6,366 $ 35.61 to $ 40.62 2,728 2,728 $ 40.63 to $ 48.40 32,048 32,048 6,199,521 3,444,261 2022 Stock Option Repricing On March 18, 2022, the Company approved a repricing of certain outstanding stock options (the “Stock Option Repricing”) granted under the Company’s 2016 Plan and 2019 Plan that had an exercise price above $ 8.82 per share, including certain outstanding stock options held by senior management of the Company under the Outside Options. The Stock Options Repricing was approved by the Board and stockholders. As a result of the Stock Option Repricing, the exercise prices were set to $ 8.82 per share, which was the closing sale price of the Company’s common stock as listed on the NYSE American exchange on March 18, 2022. Except for the repricing of the stock options under the2019 Plan, all terms and conditions of each stock option remain in full force and effect. For the repricing of the stock options under the 2019 Plan, the Company (i) modified the exercise price; (ii) will allow cashless exercise as a method of paying the exercise price, and (iii) will waive a lock-up provision in the stock option agreements. All other term and conditions of each of the stock options under the 2019 Plan remain in full force and effect. The Stock Option Repricing of approximately 4,343,017 stock option grants (for 340 employees) that were issued to employees of the Company, including senior management, resulted in incremental cost of $ 6,061 , of which $ 143 was recognized at the time of the Stock Option Repricing for the fully vested awards and included on the consolidated statements of operations, and $ 5,918 will recognized over the remaining vesting term of the original award at the repricing date. 2021 Stock Option Modifications On January 8, 2021, the Company modified certain common stock option awards under the 2016 Plan as follows: ● 10,000 common stock option grants that were subject to performance-vesting (revenue targets) were modified to remove the performance-vesting conditions and fully vest the award at the modification date with no further service requirement, resulting in incremental cost of $ 35 , recognized at the modification date. ● 9,091 common stock option grants were that were subject to performance-vesting (publishing onboarding targets) were modified to remove the performance-vesting conditions and fully vest the award at the modification date with no further service requirement, resulting in no incremental cost. On June 3, 2021, the Company modified certain common stock option awards in connection with a consulting agreement entered into on August 26, 2020, as amended on June 3, 2021, which extended to consulting term through August 26, 2022 (the “Amended Consulting Agreement”), as follows: ● 102,272 common stock option grants that were time-vesting were modified to permit the common stock options to be exercisable for their full term, or 10-years, resulting in no incremental cost. On October 7, 2021, the Company modified certain common stock option awards upon the resignation of certain board members from the Board as follows: ● 7,160 common stock option grants that were fully vested and subject time-vesting were modified to permit an extension of the exercise period for 2-years, or through October 7, 2023, resulting in no incremental cost. F- 54 On January 8, 2021, the Company modified certain common stock option awards under the 2019 Plan as follows: ● 475,946 common stock option grants that were issued to senior management were subject to market-based vesting (stock price targets) with a time-vesting overlay were modified to remove the market-based conditions with only the time-vesting condition remaining after the modification, resulting in incremental cost of $ 125 , to be recognized over the remaining time-vesting period of the original award at the modification date. ● 194,319 common stock option grants that were issued to senior management were subject to performance-vesting (revenue targets) were modified to remove the performance-vesting conditions and replace the time-vesting condition such that the common stock options will vest with respect to one-third of the grant when the option holder completes one year of continuous service beginning on the grant date and the remaining common stock options will vest monthly over twenty-four months when the option holder completes each month of continuous service thereafter, resulting in no incremental cost. ● 572,674 common stock option grants that were subject to market-based vesting (stock price targets) with a time-vesting overlay were modified, in general, to remove the market-based condition and replace the time-vesting condition such that the common stock options will vest with respect to one-third of the grant when the option holder completes one year of continuous service beginning on the grant date and the remaining common stock options will vest monthly over twenty-four months when the option holder completes each month of continuous service thereafter, resulting in incremental cost of $ 14 , to be recognized over the remaining time-vesting period of the original award at the modification date. On June 3, 2021, the Company modified certain common stock option awards under the 2019 Plan in connection with the Amended Consulting Agreement as follows: ● 659,511 common stock option grants that were subject to performance-vesting conditions (stock-price targets) were modified such that: (1) 90,910 common stock option awards were vested at the modification date, resulting in incremental cost of $ 51 (recognized at the modification date); and (2) 568,601 common stock option awards would vest, subject to the Company’s common stock being listing on a national securities exchange, upon market-based conditions (stock price targets), resulting in incremental cost of $ 513 (to be recognized over the implied service period, or through August 26, 2022, at the modification date) measured by an independent appraisal, subject to certain volume weighted average price provisions and permitting the common stock options to be exercisable for their full term, or 10-years, as follows: Summary of Common Stock Options Exercisable Stock Number of Shares Price that Vest $ 14.30 114,035 $ 22.00 151,522 $ 33.00 151,522 $ 44.00 151,522 568,601 On October 7, 2021, the Company modified certain common stock option awards upon the resignation of certain board members from the Board as follows: ● 65,951 common stock options grants that were subject to market-based vesting (stock price targets) with a time-vesting overlay were modified to remove the market-based conditions and to accelerate the vesting upon resignation from the Board with an extension of the exercise period for 2-years, or through October 7, 2023, resulting in incremental cost of $ 267,912 , recognized at the modification date. Information with respect to stock-based compensation cost and unrecognized stock-based compensation cost related to the common stock options is provided under the heading Stock-Based Compensation . F- 55 ABG Warrants In connection with the Sports Illustrated Licensing Agreement and issuance of the ABG Warrants to purchase up to 999,540 shares of the Company’s common stock, the Company recorded the issuance of the warrants as stock-based compensation with the fair value of the warrants measured at the time of issuance and expensed over the requisite service period. A summary of the ABG Warrant activity during the year ended December 31, 2022 is as follows: Schedule of Warrants Activity Number of Shares Weighted Average Exercise Weighted Average Remaining Contractual Life Unvested Vested Price (in years) ABG Warrants outstanding at January 1, 2022 699,677 299,863 $ 11.55 7.46 Vested ( 99,953 ) 99,953 10.39 - ABG Warrants outstanding at December 31, 2022 599,724 399,816 11.55 6.46 The intrinsic value of exercisable but unexercised in-the-money ABG Warrants as of December 31, 2022 was $ 411 based on a fair market value of the Company’s common stock of $ 10.61 per share on December 31, 2022. The exercise prices of the ABG Warrants outstanding and exercisable are as follows as of December 31, 2022. Schedule of Exercise Prices of Common Stock Options Exercise Outstanding Exercisable Price (Shares) (Shares) $ 9.24 749,655 299,862 $ 18.48 249,885 99,954 999,540 399,816 2021 Modifications As a result of the amendment to the ABG Warrants on June 4, 2021, as previously mentioned above, the Company recognized incremental cost as follows: ● 99,954 Time-Based Warrants that were modified to reduce the exercise price to $ 9.24 per share, resulted in incremental cost of $ 417 (to be recognized over the remaining vesting period, or through June 14, 2022) measured by an independent appraisal by calculating the fair value of the amended warrant over the calculated fair value of the original warrant immediately before the modification, with the excess fair value of the amended warrant recognized as additional compensation cost at the modification date, or the incremental cost, since the modification did not change the expectation that the award would ultimately vest (probable-to-probable). ● 149,931 Performance-Based Warrants that were modified to reduce the exercise price to $ 9.24 per share, resulted in incremental cost of $ 618 (to be recognized over the remaining vesting period, or through December 31, 2023) measured by an independent appraisal by calculating the fair value of the amended warrant over the calculated fair value of the original warrant immediately before the modification, with the excess fair value of the amended warrant recognized as additional compensation cost at the modification date, or the incremental cost, since the modification did not change the expectation that the award would ultimately vest (probable-to-probable). Information with respect to compensation cost and unrecognized compensation cost related to the ABG Warrants is provided under the heading Stock-Based Compensation . F- 56 Publisher Partner Warrants On August 23, 2018, as amended, the Board approved the Publisher Partner Warrant Program to be administered by management that authorized the Company to grant Publisher Partner Warrants. As of December 31, 2022, Publisher Partner Warrants to purchase up to 90,910 shares of the Company’s common stock were reserved for grant. The Publisher Partner Warrants were subject to certain performance conditions with vesting over a three year period with a term of five years from issuance and could also be exercised on a cashless basis. Performance conditions were generally based on the average of number of unique visitors on the channel operation by the Publisher Partner generated during the six-month period from the launch of the Publisher Partner’s operations on the Company’s technology platform or the revenue generated during the period from the issuance date through a specified end date. A summary of the Publisher Partner Warrants activity during the year ended December 31, 2022 is as follows: Schedule of Warrants Activity Weighted Average Weighted Remaining Number Average Contractual of Exercise Life Shares Price (in Years) Publisher Partner Warrants outstanding at January 1, 2022 35,607 $ 28.88 0.53 Expired ( 31,453 ) Publisher Partner Warrants outstanding at December 31, 2022 4,154 38.81 0.09 Publisher Partner Warrants exercisable at December 31, 2022 1,881 37.06 0.19 Publisher Partner Warrants not vested at December 31, 2022 2,273 Publisher Partner Warrants available for future grants at December 31, 2022 86,756 There was no intrinsic value of exercisable but unexercised in-the-money Publisher Partner Warrants since the fair market value of $ 10.61 per share of the Company’s common stock was lower than the exercise prices on December 31, 2022. The exercise prices of the Publisher Partner Warrants outstanding and exercisable are as follows as of December 31, 2022. Schedule of Exercise Prices of Common Stock Options Exercise Outstanding Exercisable Price (Shares) (Shares) $ 29.04 to $ 34.03 96 96 $ 34.04 to $ 39.03 1,247 1,247 $ 39.04 to $ 44.03 2,763 490 $ 44.04 to $ 49.50 48 48 4,154 1,881 F- 57 Stock-Based Compensation Stock–based compensation and equity-based expense charged to operations or capitalized during the years ended December 31, 2022 and 2021 are summarized as follows: Summary of Stock-based Compensation Year Ended December 31, 2022 Restricted Stock Common Stock Options ABG Warrants Totals Cost of revenue $ 3,730 $ 6,505 $ - $ 10,235 Selling and marketing 270 2,502 - 2,772 General and administrative 9,067 7,776 1,495 18,338 Total costs charged to operations 13,067 16,783 1,495 31,345 Capitalized platform development - 1,884 - 1,884 Total stock-based compensation $ 13,067 $ 18,667 $ 1,495 $ 33,229 Year Ended December 31, 2021 Restricted Stock Common Stock Options ABG Warrants Totals Cost of revenue $ 999 $ 6,479 $ - $ 7,478 Selling and marketing 2,118 3,258 - 5,376 General and administrative 8,953 6,870 1,816 17,639 Total costs charged to operations 12,070 16,607 1,816 30,493 Capitalized platform development 54 1,991 - 2,045 Total stock-based compensation $ 12,124 $ 18,598 $ 1,816 $ 32,538 Unrecognized compensation expense related to the stock-based compensation awards and equity-based awards as of December 31, 2022 was as follows: Schedule of Unrecognized Compensation Expense As of December 31, 2022 Restricted Stock Common Stock Options ABG Warrants Totals Unrecognized compensation expense $ 13,515 $ 17,369 $ 1,006 $ 31,890 Weighted average period expected to be recognized (in years) 1.53 1.62 1.00 1.56 24. Liquidated Damages During the years December 31, 2022 and 2021, the Company recorded liquidated damages of $ 1,140 and $ 2,637 (including accrued interest of $ 652 and $ 1,007 ), respectively. During the year December 31, 2022, Liquidated Damages of $ 488 were recorded as a result of Registration Rights Damages resulting from not registering the Series K Preferred Stock timely. 25. Income Taxes The components of the (provision) benefit for income taxes consist of the following: Schedule of Income Taxes 2022 2021 Years Ended December 31, 2022 2021 Current tax (provision) benefit: Federal $ - $ - State and local ( 77 ) - Total current tax (provision) benefit ( 77 ) - Deferred tax (provision) benefit: Federal 12,593 18,028 State and local 3,506 4,440 Change in valuation allowance ( 14,959 ) ( 20,794 ) Total deferred tax benefit 1,140 1,674 Total income tax benefit $ 1,063 $ 1,674 F- 58 The components of deferred tax assets and liabilities were as follows: Schedule of Components of Deferred Tax Assets and Liabilities 2022 2021 As of December 31, 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 51,023 $ 41,806 Interest limitation carryforward 5,444 2,861 Tax credit carryforwards 264 264 Allowance for doubtful accounts 757 590 Accrued expenses and other 1,340 1,768 Lease termination 1,869 1,897 Liquidated damages 1,717 2,240 Unearned revenue 3,744 5,383 Stock-based compensation 6,931 4,779 Operating lease liability 118 165 Depreciation and amortization 3,706 3,029 Deferred tax assets 76,913 64,782 Valuation allowance ( 65,406 ) ( 50,447 ) Total deferred tax assets 11,507 14,335 Deferred tax liabilities: Prepaid expenses - ( 101 ) Acquisition-related intangibles ( 11,972 ) ( 14,596 ) Total deferred tax liabilities ( 11,972 ) ( 14,697 ) Net deferred tax liabilities $ ( 465 ) $ ( 362 ) The Company must make judgements as to the realization of deferred tax assets that are dependent upon a variety of factors, including the generation of future taxable income, the reversal of deferred tax liabilities, and tax planning strategies. To the extent that the Company believes that recovery is not likely, it must establish a valuation allowance. A valuation allowance has been established for deferred tax assets which the Company does not believe meet the “more likely than not” criteria. The Company’s judgments regarding future taxable income may change due to changes in market conditions, changes in tax laws, tax planning strategies or other factors. If the Company’s assumptions and consequently its estimates change in the future, the valuation allowances it has established may be increased or decreased, resulting in a respective increase or decrease in income tax expense. Based upon the Company’s historical operating losses and the uncertainty of future taxable income, the Company has provided a valuation allowance primarily against its deferred tax assets up to the deferred tax liabilities, except for deferred tax liabilities on indefinite lived intangible assets, as of December 31, 2022 and 2021. As of December 31, 2022, the Company had federal, state, and local net operating loss carryforwards available of $ 190,070 , $ 133,419 and $ 51,503 respectively, to offset future taxable income. Net operating losses for U.S. federal tax purposes of $ 164,167 do not expire (limited to 80% of taxable income in a given year) and $ 25,903 will expire, if not utilized, through 2037 in various amounts. As of December 31, 2021, the Company had federal, state, and local net operating loss carryforwards available of $ 155,849 , $ 112,217 and $ 37,417 , respectively, to offset future taxable income. Sections 382 and 383 of the Internal Revenue Code imposes restrictions on the use of a corporation’s net operating losses, as well as certain recognized built-in losses and other carryforwards, after an ownership change occurs. A section 382 ownership change occurs if one or more stockholders or groups of stockholders who own at least 5% of the Company’s common stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. Future issuances or sales of the Company’s common stock (including certain transactions involving the Company’s common stock that are outside of the Company’s control) could also result in an ownership change under section 382. If an ownership change occurs, Section 382 would impose an annual limit on the amount of pre-change net operating losses and other losses the Company can use to reduce its taxable income generally equal to the product of the total value of the Company’s outstanding equity immediately prior to the ownership change (subject to certain adjustments) and the long-term tax-exempt interest rate for the month of the ownership change. F- 59 The Company believes that it did have a change in control under these sections in connection with its recapitalization on November 4, 2016 and utilization of the carryforwards would be limited such that the majority of the carryforwards will never be available. Accordingly, the Company has not recorded those net operating loss carryforwards and credit carryforwards in its deferred tax assets. The Company completed a preliminary section 382 analysis as of December 31, 2022 and 2021 and concluded it may have experienced an ownership change as a result of certain equity offerings during the rolling three-year period of 2019 to 2021. The Company concluded that its federal net operating loss carryforwards, including any net operating loss carryforwards as a result of the mergers during 2018 and 2019, resulted in annual limitations on the overall net operating loss carryforward and that an ownership change, if any, would impose an annual limit on the net operating loss carryforwards and could cause federal income taxes (similar provisions apply for state and local income taxes) to be paid earlier than otherwise would be paid if such limitations were not in effect. The federal, state, and local net operating loss carryforwards are stated net of any such anticipated limitations as of December 31, 2022 and 2021. The provision (benefit) for income taxes on the statements of operations differs from the amount computed by applying the statutory federal income tax rate to loss before the benefit for income taxes, as follows: Schedule of Tax Benefit and Effective Income Tax Years Ended December 31, 2022 2021 Amount Percent Amount Percent Federal benefit expected at statutory rate $ ( 14,375 ) 21.0 % $ ( 19,239 ) 21.0 % State and local taxes, net of federal benefit ( 3,429 ) 5.0 % ( 4,440 ) 4.8 % Stock-based compensation 3,894 - 5.7 % 4,882 - 5.3 % Unearned revenue ( 696 ) 1.0 % ( 2,703 ) 3.0 % Interest expense 56 - 0.1 % 64 - 0.1 % Liquidated damages ( 760 ) 1.1 % - 0.0 % Gain upon debt extinguishment - 0.0 % ( 1,201 ) 1.3 % Other differences, net ( 997 ) 1.6 % 213 - 0.2 % Valuation allowance 14,959 - 21.9 % 20,794 - 22.7 % Other permanent differences 285 - 0.4 % ( 44 ) 0.0 % Income tax benefit and effective income tax rate $ ( 1,063 ) 1.6 % ( 1,674 ) 1.8 % The Company recognizes the tax benefit from uncertain tax positions only if it is “more likely than not” that the tax positions will be sustained on examination by the tax authorities, based on the technical merits of the position. The tax benefit is measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company recognizes interest and penalties related to income tax matters in income tax expense. The Company is also required to assess at each reporting date whether it is reasonably possible that any significant increases or decreases to its unrecognized tax benefits will occur during the next 12 months. The Company did not recognize any uncertain tax position, or any accrued interest and penalties associated with uncertain tax positions for the years ended December 31, 2022 and 2021. The Company files tax returns in the U.S. federal jurisdiction and New York, California, and other states. The Company is generally subject to examination by income tax authorities for three years from the filing of a tax return, therefore, the federal and certain state returns from 2019 forward and the California returns from 2018 forward are subject to examination. The Company currently is not under examination by any tax authority. 26. Pension Plans The Company has a qualified 401(k) defined contribution plan that allows eligible employees of the Company to participate in the plan, subject to limitations. The plan allows for discretionary matching contributions by the Company, up to 4% of eligible annual compensation made by participants of the plan . The Company contributions to the plan were $ 1,138 and $ 1,347 for the years ended December 31, 2022 and 2021, respectively. F- 60 27. Related Party Transactions For the years ended December 31, 2022 and 2021, the Company had several transactions with B. Riley, a principal stockholder, where it paid fees associated with the debt, common stock public offering and private placements totaling $ 3,440 and $ 609 , respectively. The Company entered into transactions with B. Riley where it borrowed funds under the Bridge Notes of $ 36,000 during the year ended December 31, 2022, and the Delayed Draw Term Notes of $ 5,086 during the year ended December 31, 2021. The Company incurred interest expense to B. Riley of $ 7,540 and $ 6,940 for the years ended December 31, 2022 and 2021, respectively. Service and Consulting Contracts On August 26, 2020, the Company entered into a consulting agreement with James C. Heckman, the Company’s former Chief Executive Officer. On June 3, 2021, the consulting agreement was amended that extended the term of the agreement for one-year, or to August 26, 2022, and in connection with the amendment the Company advanced $ 500 to Mr. Heckman. During the years ended December 31, 2022 and 2021, the Company recognized consulting fees for Mr. Heckman of $ 307 and $ 780 , respectively. During the years ended December 31, 2022 and 2021, the Company paid an entity affiliated with Mr. Heckman, Roundtable Media, L.L.C., a net revenue share amount of $ 181 and $ 2 , respectively, in connection with a partner agreement. Repurchases of Restricted Stock On December 15, 2020, the Company entered into an amendment for certain restricted stock awards and units that were previously issued to certain employees in connection with the HubPages merger, pursuant to which the Company agreed to repurchase from certain key personnel of HubPages, including Paul Edmondson, one of the Company’s officers, and his spouse, an aggregate of 16,802 shares of the Company’s common stock at a price of $ 4 per share each month for a period of 24 months, for aggregate proceeds to Mr. Edmondson and his spouse of $ 67 per month (see Note 13). 28. Commitments and Contingencies Claims and Litigation From time to time, the Company may be subject to claims and litigation arising in the ordinary course of business. The Company is not currently a party to any pending or threatened legal proceedings that it believes would reasonably be expected to have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows. In connection with the Athlon working capital adjustment (as previously disclosed in Note 4), the Company prepared the working capital adjustment. The sellers are challenging the Company’s adjustments and both parties have agreed to a standstill and tolling agreement while the adjustments are being reviewed and discussed. The amount due from this challenge, if any, is not estimatable as of the issuance date of these consolidated financial statements. 29. Subsequent Events The Company performed an evaluation of subsequent events through the date of filing of these consolidated financial statements with the SEC. Other than the below described subsequent events, there were no material subsequent events which affected, or could affect, the amounts or disclosures on the consolidated financial statements. F- 61 Liquidated Damages On February 8, 2023, the Company entered into a stock purchase agreement with an investor, where the Company was liable to for liquidated damages, pursuant to which the Company issued 47,252 shares of its common stock at a price equal to $ 10.56 per share (determined based on the volume-weighted average price of the Company’s common stock at the close of trading on the sixty (60) previous trading days), to the investor in lieu of an aggregate of $ 499 owed in liquidated damages as of the conversion date. Common Stock Options From January 2023 through the date these consolidated financial statements were issued, the Company granted common stock options and restricted stock units totaling 147,696 shares of the Company’s common stock, all of which remain outstanding as of the date these consolidated financial statements were issued, to acquire shares of the Company’s common stock to officers, directors, employees and consultants. Acquisition On January 11, 2023, the Company entered into an asset purchase agreement with Teneology, Inc., pursuant to which it acquired certain assets (consisting of the RoadFood media business, including digital and television assets; the Moveable Feast media business, including digital and television assets; the Fexy-branded content studio business; and the MonkeySee YouTube Channel media business), for a purchase price of $ 2,956 . The purchase price consisted of the following: (1) $ 500 cash paid at closing; (2) $ 75 cash payments due in three equal installments of $ 25 on March 1, 2023, April 1, 2023 and May 1, 2023; (3) $ 200 deferred cash payment due on the first anniversary of the closing date, subject to certain indemnity provisions; and (4) the issuance of 274,692 shares of the Company’s common stock, subject to certain lock-up provisions, on the closing date with a fair value of $ 2,181 (fair value was determined based on the Company’s common stock trading price of $ 7.94 per share on the closing date). The number of shares of the Company’s common stock issued was determined based on a $ 2,225 value using the common stock trading price on the day immediately preceding the January 11, 2023 closing date. F- 62