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 December 31, 2023. 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. Remediation of the Previously Reported Material Weaknesses in Internal Control Over Financial Reporting 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 the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. As reported in Part II, Item 9A to our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 31, 2023, we did not maintain effective internal control over financial reporting because of the material weaknesses described below. Specifically, in preparing our financial statements for the year ended December 31, 2022, we identified the following control deficiencies that constituted 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 were remedied in fiscal 2023 by (i) implementing new permissions and approval requirements in our change management process in our systems previously identified with inadequate segregation of duties and (ii) obtaining, reviewing, and mapping a System and Organization Controls – SOC 1 Type 2 report from third party service providers for the effectiveness of third party controls relevant to our internal control over financial reporting, including validation of impression data, and implementing compensating management controls to further validate non-Google impressions data provided by certain third party service providers. 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 the above evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2023. This Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the SEC that permit the Company to provide only management’s report in this Annual Report. 42 Changes in Internal Control over Financial Reporting Except as described above under “Remediation of the Previously Reported Material Weaknesses 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 quarter ended December 31, 2023 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 On December 29, 2023, we failed to make the interest payment due pursuant to the Third A&R NPA (as defined in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Senior Secured Notes”) in the amount of approximately $2.8 million, resulting in an event of default under the Arena Notes. On January 5, 2024, we entered into a forbearance agreement (the “Forbearance Agreement”) with Renew Group Private Limited, the lender under the Third A&R NPA, pursuant to which Renew agreed to a forbearance period through March 29, 2024, while reserving its rights and remedies. On March 27, 2024, the forbearance period was extended through the earlier of the following: (a) April 30, 2024; (b) the occurrence of the closing of the Business Combination and (c) the termination of the Business Combination prior to closing. The outstanding principal on the Arena Notes was approximately $110.7 million as of December 31, 2023 . 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 2024 Annual Meeting of Stockholders to be filed with the SEC not later than 120 days after December 31, 2023. Item 11. Executive Compensation The information required under this item is incorporated herein by reference to our proxy statement for our 2024 Annual Meeting of Stockholders to be filed with the SEC not later than 120 days after December 31, 2023. 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 2024 Annual Meeting of Stockholders to be filed with the SEC not later than 120 days after December 31, 2023. 43 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 2024 Annual Meeting of Stockholders to be filed with the SEC not later than 120 days after December 31, 2023. Item 14. Principal Accountant Fees and Services The information required under this item is incorporated herein by reference to our proxy statement for our 2024 Annual Meeting of Stockholders to be filed with the SEC not later than 120 days after December 31, 2023. 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, 2023 and 2022 F-3 Consolidated Statements of Operations for the Years Ended December 31, 2023 and 2022 F- 4 Consolidated Statements of Stockholders’ Deficiency for the Years Ended December 31, 2023 and 2022 F-5 Consolidated Statements of Cash Flows for the Years Ended December 31, 2023 and 2022 F-7 Notes to Consolidated Financial Statements F-8 2. Financial Statement Schedules . Schedule II – Valuation and Qualifying Accounts for the Years Ended December 31, 2023 and 2022. 44 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. 2.12 Business Combination Agreement, dated as of November 5, 2023, among The Arena Group Holdings, Inc., Simplify Inventions, LLC, Bridge Media Networks, LLC, New Arena Holdco, Inc., Energy Merger Sub I, LLC and Energy Merger Sub II, which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on November 7, 2023. 2.13 Amendment No. 1 to Business Combination Agreement, dated December 1, 2023, by and between the Company, Simplify Inventions, LLC, Bridge Media Networks, LLC, New Arena Holdco, Inc., Energy Merger Sub I, LLC and Energy Merger Sub II, which was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 5, 2023. 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. 45 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. 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. 3.10 Certificate of Amendment to the Amended and Restated Certificate of Incorporation, which was filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on June 2, 2023. 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 Form of 2023 Notes, which was filed as Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q filed on November 14, 2023. 4.20* 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. 46 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. 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. 47 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. 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. 48 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. 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, which was filed as Exhibit 10.73 to our Annual Report on Form 10-K filed on March 31, 2023. 10.74 Form of Common Stock Purchase Agreement, which was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 31, 2023. 10.75+ Amended and Restated 2022 Stock and Incentive Compensation Plan, which was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 2, 2023. 10.76 Binding Letter of Intent, dated August 14, 2023, by and between the Company and Simplify Inventions, LLC, which was filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on November 14, 2023. 10.77 Form of Voting and Support Agreement, dated August 14, 2023, by and between the Company and certain stockholders. which was filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed on November 14, 2023. 10.78 Amendment to Third Amended and Restated Note Purchase Agreement, dated August 14, 2023, by and between 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 10.3 to the Company’s Quarterly Report on Form 10-Q filed on November 14, 2023. 10.79+ Amendment No. 3 to Second Amended & Restated Executive Employment Agreement, dated as of September 7, 2023, by and between the Company and Ross Levinsohn, which was filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed on November 14, 2023. 49 10.80+ First Amendment to Executive Employment Agreement, dated August 15, 2023, by and between the Company and Henry Robertson Barrett, which was filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q filed on November 14, 2023. 10.81+ Severance Agreement, dated August 14, 2023, by and between the Company and Henry Robertson Barrett, which was filed as Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q filed on November 14, 2023. 10.82+ Severance Agreement, dated August 14, 2023, by and between the Company and Douglas B. Smith, which was filed as Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q filed on November 14, 2023. 10.83 Seventh Amendment to Financing and Security Agreement, dated August 31, 2023, by and among the Company, certain subsidiaries of the Company party thereto and SLR Digital Finance LLC, which was filed as Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q filed on November 14, 2023. 10.84 Side Letter to Licensing Agreement, dated October 1, 2023, by and between the Company and ABG-SI LLC, which was filed as Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q filed on November 14, 2023. 10.85 Common Stock Subscription Agreement, dated as of November 5, 2023, between New Arena Holdco, Inc. and 5-Hour International Corporation Pte. Ltd. , which was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 7, 2023. 10.86# Preferred Stock Subscription Agreement, dated as of November 5, 2023, between New Arena Holdco, Inc. and The Hans Foundation USA, which was filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on November 7, 2023. 10.87 Amendment No. 2 to Third Amended and Restated Note Purchase Agreement, dated December 1, 2023, by and between 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 10.2 to the Company’s Current Report on Form 8-K filed on December 5, 2023. 10.88 Waiver of Liquidated Damages and Release of Claims, dated December 1, 2023, by and among the Company, Simplify Inventions, LLC and B. Riley Principal Investments, LLC, which was filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on December 5, 2023. 10.89 Forbearance Letter, which was filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on January 5, 2024. 10.90 Subscription Agreement, dated February 14, 2024, by and between the Company and Simplify, which was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 14, 2024. 10.91* Forbearance Letter between the Company and Renew Group Private Limited dated as of March 27 , 2024. 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. 97.1* Clawback Policy of Arena Group Holdings, Inc . 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) 50 * Filed Herewith ** This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act. # Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. Registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request. ^ 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. THE ARENA GROUP HOLDINGS, INC. AND SUBSIDIARIES Annual Report on Form 10-K Schedule II Valuation of Qualifying Accounts Years Ended December 31, 2023 and 2022 ($ in thousands) Additions Balances at Beginning of Year Charge to Costs and Expenses Other Deductions from Reserves Balances at End of Year 2023 Allowance for doubtful accounts receivable $ 2,236 $ 315 $ - $ (1,570 ) $ 981 Valuation allowances for deferred tax assets 65,406 - 10,961 - 76,367 2022 Allowance for doubtful accounts receivable 1,578 658 - - 2,236 Valuation allowances for deferred tax assets 50,447 - 14,959 - 65,406 Item 16. Form 10–K Summary None. 51 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: April 1, 2024 By: /s/ CAVITT RANDALL Cavitt Randall Chief Executive Officer (Principal Executive Officer) By: /s/ DOUGLAS B. SMITH Douglas B. Smith Chief Financial Officer (Principal Financial and Accounting Officer) Power of Attorney KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Cavitt Randall 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/ CAVITT RANDALL Chief Executive Officer and Chairman of the Board Cavitt Randall (Principal Executive Officer) Date: April 1, 2024 /s/ DOUGLAS B. SMITH Chief Financial Officer Douglas B. Smith (Principal Financial and Accounting Officer) Date: April 1, 2024 /s/ H. HUNT ALLRED Director H. Hunt Allred Date: April 1, 2024 /s/ CARLO ZOLA Director Carlo Zola Date: April 1, 2024 /s/ CHRISTOPHER PETZEL Director Christopher Petzel Date: April 1, 2024 /s/ LAURA LEE Director B. Laura Lee Date: April 1, 2024 /s/ CHRISTOPHER FOWLER Director Christopher Fowler Date: April 1, 2024 52 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, 2023 and 2022 F-3 Consolidated Statements of Operations for the Years Ended December 31, 2023 and 2022 F-4 Consolidated Statements of Stockholders’ Deficiency for the Years Ended December 31, 2023 and 2022 F-5 Consolidated Statements of Cash Flows for the Years Ended December 31, 2023 and 2022 F-7 Notes to Consolidated Financial Statements F-8 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders 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, 2023 and 2022, the related consolidated statements of operations, stockholders’ deficiency and cash flows for each of the two years in the period ended December 31, 2023, 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, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. 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 may need to restructure its debt 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 Public Company Accounting Oversight Board (United States) (“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. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. 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 Critical audit matters 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. We determined that there are no critical audit matters. /s/ Marcum llp Marcum LLP We have served as the Company’s auditor since 2019. New York, NY April 1, 2024 F- 2 THE ARENA GROUP HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS 2023 2022 As of December 31, 2023 2022 ($ in thousands, except share data) Assets Current assets: Cash and cash equivalents $ 9,284 $ 13,871 Restricted cash - 502 Accounts receivable, net 44,811 33,950 Subscription acquisition costs, current portion 29,706 25,931 Prepayments and other current assets 6,598 4,441 Total current assets 90,399 78,695 Property and equipment, net 328 735 Operating lease right-of-use assets 176 372 Platform development, net 8,723 10,330 Subscription acquisition costs, net of current portion 7,215 14,133 Acquired and other intangible assets, net 38,459 58,970 Other long-term assets 1,003 1,140 Goodwill 42,575 39,344 Total assets $ 188,878 $ 203,719 Liabilities, mezzanine equity and stockholders’ deficiency Current liabilities: Accounts payable $ 10,357 $ 12,863 Accrued expenses and other 30,771 23,102 Line of credit 19,609 14,092 Unearned revenue 59,786 58,703 Subscription refund liability 449 845 Operating lease liability 358 427 Contingent consideration 1,571 - Liquidated damages payable 2,924 5,843 Bridge notes 7,887 34,805 Debt 102,309 65,684 Total current liabilities 236,021 216,364 Unearned revenue, net of current portion 10,679 19,701 Operating lease liability, net of current portion - 358 Liquidating damages payable, net of current portion - 494 Other long-term liabilities 406 5,307 Deferred tax liabilities 599 465 Total liabilities 247,705 242,689 Commitments and contingencies (Note 27) - - 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, 2023 and 2022 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: $ 0 and $ 14,356 ; Series H shares issued and outstanding: none and 14,356 ; common shares issuable upon conversion: none and 1,981,128 at December 31, 2023 and 2022, respectively - 13,008 Total mezzanine equity 168 13,176 Stockholders’ deficiency: Common stock, $ 0.01 par value, authorized 1,000,000,000 shares: issued and outstanding; 23,836,706 and 18,303,193 shares December 31, 2023 and 2022, respectively 237 182 Common stock to be issued - - Additional paid-in capital 319,421 270,743 Accumulated deficit ( 378,653 ) ( 323,071 ) Total stockholders’ deficiency ( 58,995 ) ( 52,146 ) Total liabilities, mezzanine equity and stockholders’ deficiency $ 188,878 $ 203,719 See accompanying notes to consolidated financial statements. F- 3 THE ARENA GROUP HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS 2023 2022 Years Ended December 31, 2023 2022 ($ in thousands, except share data) Revenue $ 244,203 $ 220,935 Cost of revenue (includes amortization for developed technology and platform development for 2023 and 2022 of $ 8,782 and $ 9,459 , respectively) 142,240 132,923 Gross profit 101,963 88,012 Operating expenses Selling and marketing 74,245 72,489 General and administrative 44,152 53,499 Depreciation and amortization 18,924 17,650 Loss on impairment of assets 119 257 Loss on sale of assets 325 - Total operating expenses 137,765 143,895 Loss from operations ( 35,802 ) ( 55,883 ) Other expenses Change in valuation of contingent consideration ( 1,010 ) - Interest expense, net ( 17,965 ) ( 11,428 ) Liquidated damages ( 583 ) ( 1,140 ) Total other expenses ( 19,558 ) ( 12,568 ) Loss before income taxes ( 55,360 ) ( 68,451 ) Income tax (provision) benefit ( 222 ) 1,063 Loss from continuing operations ( 55,582 ) ( 67,388 ) Loss from discontinued operations, net of tax - ( 3,470 ) Net loss $ ( 55,582 ) $ ( 70,858 ) Basic and diluted net loss per common share: Continuing operations $ ( 2.49 ) $ ( 3.82 ) Discontinued operations - ( 0.20 ) Basic and diluted net loss per common share $ ( 2.49 ) $ ( 4.02 ) Weighted average number of common shares outstanding – basic and diluted 22,323,763 17,625,619 See accompanying notes to consolidated financial statements F- 4 THE ARENA GROUP HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIENCY Year Ended December 31, 2023 Shares Par Value Shares Par Value Capital Deficit Deficiency Common Stock Common Stock to be Issued Additional Paid-in Accumulated Total Stockholders’ Shares Par Value Shares Par Value Capital Deficit Deficiency ($ in thousands, except share data) Balance at January 1, 2023 18,303,193 $ 182 41,283 $ - $ 270,743 $ ( 323,071 ) $ ( 52,146 ) Issuance of common stock in connection with registered direct offering 2,963,918 30 - - 11,114 - 11,144 Issuance of common stock upon conversion of series H convertible preferred stock 1,981,128 20 - - 12,988 - 13,008 Issuance of common stock in connection with the acquisition of Fexy Studios 274,692 3 - - 1,997 - 2,000 Issuance of common stock in connection with settlement of liquidated damages 47,252 - - - 369 - 369 Gain upon issuance of common stock in connection with settlement of liquidated damages - - - - 130 - 130 Issuance of common stock for restricted stock units 429,528 4 - - ( 4 ) - - Common stock withheld for taxes ( 202,382 ) ( 2 ) - - ( 1,421 ) - ( 1,423 ) Issuance of common stock upon exercise of stock options 795 - - - - - - Issuance of common stock in connection with acquisition 38,582 - ( 38,582 ) - - - - Reclassification to liability upon modification of common stock option - - - - ( 68 ) - ( 68 ) Gain upon forgiveness of liquidated damages with principal stockholder - - - - 3,497 - 3,497 Stock-based compensation - - - - 20,076 - 20,076 Net loss - - - - - ( 55,582 ) ( 55,582 ) Balance at December 31, 2023 23,836,706 $ 237 2,701 $ - $ 319,421 $ ( 378,653 ) $ ( 58,995 ) F- 5 THE ARENA GROUP HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIENCY Year Ended December 31, 2022 Common Stock Common Stock to be Issued Additional Paid-in Accumulated Total Stockholders’ Shares Par Value Shares Par Value Capital Deficit Deficiency ($ in thousands, except share data) Balance at January 1, 2022 12,635,591 $ 126 49,134 $ - $ 200,410 $ ( 252,213 ) $ ( 51,677 ) Balance 12,635,591 $ 126 49,134 $ - $ 200,410 $ ( 252,213 ) $ ( 51,677 ) Issuance of common stock upon conversion of series H preferred stock 97,980 1 - - 709 - 710 Issuance of stock in connection with acquisitions 330,863 3 - - 3,138 - 3,141 Issuance of stock in connection with the merger of Say Media 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 in connection with the exercise of stock options 96,408 1 - - 94 - 95 Issuance of common stock for restricted stock units 832,233 8 - - ( 8 ) - - Common stock withheld for taxes upon issuance of underlying shares for restricted stock units ( 373,394 ) ( 4 ) - - ( 4,464 ) - ( 4,468 ) Repurchase restricted stock awards in connection with HubPages merger ( 26,214 ) - - - - - - Issuance of common stock in connection with public offering 4,181,603 42 - - 30,448 - 30,490 Stock-based compensation - - - - 33,229 - 33,229 Net loss - - - - - ( 70,858 ) ( 70,858 ) Balance at December 31, 2022 18,303,193 $ 182 41,283 $ - $ 270,743 $ ( 323,071 ) $ ( 52,146 ) Balance 18,303,193 $ 182 41,283 $ - $ 270,743 $ ( 323,071 ) $ ( 52,146 ) See accompanying notes to consolidated financial statements. F- 6 THE ARENA GROUP HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS 2023 2022 Years Ended December 31, 2023 2022 ($ in thousands) Cash flows from operating activities Net loss $ ( 55,582 ) $ ( 70,858 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation of property and equipment 352 539 Amortization of platform development and intangible assets 27,354 26,570 Amortization of debt costs 2,378 1,581 Noncash and accrued interest 3,824 320 Loss on impairment of assets 119 466 Loss on sale of assets 325 - Change in valuation of contingent consideration 1,010 - Liquidated damages 583 1,140 Stock-based compensation 19,060 31,345 Deferred income taxes 134 ( 1,200 ) Bad debt expense 315 658 Other - 184 Change in operating assets and liabilities net of effect of acquisitions: Accounts receivable ( 11,599 ) ( 2,038 ) Subscription acquisition costs 3,143 ( 1,667 ) Royalty fees - 11,250 Prepayments and other current assets ( 2,157 ) 2,280 Other long-term assets ( 77 ) ( 285 ) Accounts payable ( 2,663 ) ( 6,535 ) Accrued expenses and other 3,453 ( 2,996 ) Unearned revenue ( 7,970 ) 3,898 Subscription refund liability ( 396 ) ( 2,379 ) Operating lease liability ( 231 ) ( 218 ) Other long-term liabilities ( 6,147 ) ( 3,359 ) Net cash used in operating activities ( 24,772 ) ( 11,304 ) Cash flows from investing activities Purchases of property and equipment - ( 530 ) Capitalized platform development ( 3,773 ) ( 5,179 ) Proceeds from sale of assets 1,061 - Proceeds from sale of equity investment - 2,450 Payments for acquisitions, net of cash ( 500 ) ( 35,331 ) Net cash used in investing activities ( 3,212 ) ( 38,590 ) Cash flows from financing activities Proceeds from bridge notes, net of debt costs 8,000 34,728 Payments of long-term debt - ( 5,928 ) Proceeds, net of repayments, under line of credit 5,517 2,104 Proceeds from common stock public offering, net of offering costs 11,500 32,058 Payments of issuance costs from common stock public offering ( 167 ) ( 1,568 ) Payments of debt issuance costs ( 457 ) - Proceeds from exercise of common stock options - 95 Payment of deferred cash payment ( 75 ) ( 453 ) Payment for taxes related to common stock withheld for taxes ( 1,423 ) ( 4,468 ) Payment of restricted stock liabilities - ( 2,152 ) Net cash provided by financing activities 22,895 54,416 Net (decrease) increase in cash, cash equivalents, and restricted cash ( 5,089 ) 4,522 Cash, cash equivalents, and restricted cash – beginning of year 14,373 9,851 Cash, cash equivalents, and restricted cash – end of year $ 9,284 $ 14,373 Cash, cash equivalents, and restricted cash Cash and cash equivalents $ 9,284 $ 13,871 Restricted cash - 502 Total cash, cash equivalents, and restricted cash $ 9,284 $ 14,373 Supplemental disclosure of cash flow information Cash paid for interest $ 12,101 $ 9,528 Cash paid for income taxes 85 - Noncash investing and financing activities Reclassification of stock-based compensation to platform development $ 1,016 $ 1,884 Debt costs recorded in accrued expenses and other and in other long-term liabilities 189 441 Issuance of common stock upon conversion of Series H convertible preferred stock 13,008 511 Issuance of common stock in connection with settlement of liquidated damages 499 7,008 Issuance of common stock in connection with an acquisition 2,000 3,141 Deferred cash payments recorded in connection with acquisitions 246 949 Assumption of liabilities in connection with acquisitions 1,246 17,110 Reclassification to liability upon common stock modification 68 - See accompanying notes to consolidated financial statements. F- 7 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”), which 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”), which 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, 2023, 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) 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 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. 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.” F- 8 Business Operations The Company is a media company that leverages technology to build deep content verticals powered by anchor brands and a best-in-class digital media platform (the “Platform”) empowering publishers who impact, inform, educate, and entertain. The Company’s strategy is to focus on key subject matter verticals where audiences are passionate about a topic category (e.g., sports and finance) 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 for its media publisher partners (each, a “Publisher Partner”). The Company’s focus is on leveraging its Platform and brands in targeted verticals to maximize audience reach, enhance 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 owns and operates TheStreet, The Spun, Parade, and Men’s Journal and powers more than 320 independent Publisher Partners, including the many sports team sites that comprise FanNation. Each Publisher Partner joins the Platform by invitation only with the objective of improving our position in key verticals while 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 our expertise in search engine optimization, social media, ad monetization and subscription marketing, Publisher Partners continually benefit from our ongoing technological advances and audience development expertise. Additionally, we believe the lead brands within our verticals create a halo benefit for all Publisher Partners while each of them adds to the breadth and quality of content. Platform The Company developed the Platform, a proprietary online publishing platform that provides its owned and operated media businesses, Publisher Partners (who are third parties producing and publishing content on their own domains), and individual creators contributing content to its owned and operated sites (“Expert Contributors”), the ability to produce and manage editorially focused content through tools and services provided by it. The Company has also developed proprietary advertising technology, techniques and relationships that allow it, its Publisher Partners, and its Expert Contributors to monetize editorially focused online content through various display and video advertisements and tools and services for driving a subscription or membership based business and other monetization services (the “Monetization Solutions” and, together with the Platform, the “Platform Services”). The Company’s Platform offers audiences bespoke content with optimized design and page construction. The Platform comprises state-of-the-art publishing tools, video platforms, social distribution channels, newsletter technology, machine learning content recommendations, notifications, and other technology that deliver a complete set of features to drive a digital media business in an entirely cloud-based suite of services. The Company’s software engineering and product development teams are experienced at delivering these services at scale. The Company continues to develop the Platform software by combining proprietary code with components from the open-source community, plus select commercial services as well as identifying, acquiring, and integrating other platform technologies where it sees unique long-term benefits to it. 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- 9 Most recently, for the year ended December 31, 2023, the Company incurred a net loss from continuing operations of $ 55,582 , had cash on hand of $ 9,284 and a working capital deficit of $ 145,622 . 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 its obligations when due. Also, since the Company’s 2023 Notes (see Note 18), Senior Secured Notes, Delayed Draw Term Notes and 2022 Bridge Notes (see Note 19) (collectively “its current debt”) are subject to a forbearance period through the earlier of the following: (a) April 30, 2024 ; (b) the occurrence of the closing of the Business Combination and (c) the termination of the Business Combination prior to closing (as further described in Note 28) unless the Company is able to refinance or modify the terms of its current debt it runs the risk that its debt could be called, therefore, 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 modify its current debt. The Company plans to refinance or modify the maturities of its current debt and complete the Business Combination to alleviate the conditions that raise substantial doubt about its ability to continue as a going concern, however, there can be no assurance that the Company will be able to refinance or modify its current debt and complete the Business Combination. 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. 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. F- 10 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. Uncertainty in the global economy presents significant risks to the Company’s business. Increases in inflation, rising interest rates, instability in the global banking system, geopolitical factors, including the ongoing conflicts in Ukraine and Israel and the responses thereto, and the remaining effects of the COVID-19 pandemic may have an adverse effect on the Company’s business. While the Company is closely monitoring the impact of the current macroeconomic conditions on all aspects of its business, the ultimate extent of the impact on its business remains highly uncertain and will depend on future developments and factors that continue to evolve. Most of these developments and factors are outside of the Company’s control and could exist for an extended period of time. As a result, the Company is subject to continuing risks and uncertainties. Effective December 1, 2023, 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”) that was instrumental in providing investment banking services to the Company and in raising debt and equity capital for the Company, and Renew Group Private Limited (“Renew”) entered into agreement where Renew purchased $ 110,691 in aggregate principal amount of the notes outstanding with B. Riley, including the 2023 Notes (as described in Note 18), Senior Secured Notes, Delayed Draw Term Notes and 2022 Bridge Notes (as described in Note 19), which constitute all of the notes outstanding with B. Riley and also assumed the role of agent under the Note Purchase Agreement, as further described in Note 26. The indirect owner of Renew also has an indirect non-controlling interest in Simplify Inventions, LLC (“Simplify”), a principal stockholder (as further described in Note 26). 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 revenue is presented as a separate line item on the consolidated statements of operations. F- 11 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- 12 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. F- 13 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. 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- 14 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, 2023 and 2022, a subscription refund liability of $ 449 and $ 845 , 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- 15 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 2023 2022 Years Ended December 31, 2023 2022 Revenue by category: Digital revenue Digital advertising $ 135,376 $ 109,317 Digital subscriptions 12,764 21,156 Licensing and syndication revenue 18,482 18,173 Other digital revenue 5,384 1,166 Total digital revenue 172,006 149,812 Print revenue Print advertising 9,881 10,214 Print subscriptions 62,316 60,909 Total print revenue 72,197 71,123 Total revenue $ 244,203 $ 220,935 Revenue by geographical market: United States $ 234,012 $ 218,110 Other 10,191 2,825 Total revenue $ 244,203 $ 220,935 Revenue by timing of recognition: At point in time $ 231,439 $ 199,779 Over time 12,764 21,156 Total revenue $ 244,203 $ 220,935 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 22). F- 16 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. The following table provides information about contract balances: Schedule of Contract with Customer, Asset and Liability 2023 2022 As of December 31, 2023 2022 Unearned revenue (short-term contract liabilities): Digital revenue $ 14,397 $ 18,571 Print revenue 45,389 40,132 Total short-term contract liabilities $ 59,786 $ 58,703 Unearned revenue (long-term contract liabilities): Digital revenue $ 542 $ 1,118 Print revenue 10,137 18,583 Total long-term contract liabilities $ 10,679 $ 19,701 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 $ 68,985 was recognized during the year ended December 31, 2023 from unearned revenue at the beginning of the year. During January 2020, February 2020 and December 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, 2023 and 2022, the Company recognized revenue of $ 554 and $ 2,986 , 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, 2023 and 2022, 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 2023 2022 As of December 31, 2023 2022 Cash and cash equivalents $ 9,284 $ 13,871 Restricted cash - 502 Total cash, cash equivalents, and restricted cash $ 9,284 $ 14,373 As of December 31, 2023 and 2022, the Company had restricted cash of $ 0 and $ 502 , which served as collateral for certain credit card merchant accounts with a bank. F- 17 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 have been reduced by an allowance for doubtful accounts. The Company maintains the allowance for estimated losses resulting from the inability of the Company’s customers to make required payments. The allowance represents the current estimate of lifetime expected credit losses over the remaining duration of existing accounts receivable considering current market conditions and supportable forecasts when appropriate. The estimate is a result of the Company’s ongoing evaluation of collectability, customer creditworthiness, historical levels of credit losses, and future expectations. 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, 2023 and 2022 of $ 44,811 and $ 33,950 , respectively, are presented net of allowance for doubtful accounts. The following table summarizes the allowance for doubtful accounts activity: Schedule of Allowance For Doubtful Accounts 2023 2022 Years Ended of December 31, 2023 2022 Allowance for doubtful accounts beginning of year $ 2,236 $ 1,578 Additions 315 658 Deductions - write-offs ( 1,570 ) - Allowance for doubtful accounts end of year $ 981 $ 2,236 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 $ 38,112 and $ 37,190 for the years ended December 31, 2023 and 2022, 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, 2023 and 2022. 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. The current portion of the subscription acquisition costs as of December 31, 2023 and 2022 was $ 29,706 and $ 25,931 , respectively. The noncurrent portion of the subscription acquisition costs as of December 31, 2023 and 2022 was $ 7,215 and $ 14,133 , respectively. Subscription acquisition costs as of December 31, 2023 presented as current assets of $ 29,706 are expected to be amortized over a one-year period, or through December 31, 2024, and presented as long-term assets of $ 7,215 are expected to be amortized after the one-year period ending December 31, 2024. F- 18 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 material 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 approximately 10.0 % from a customer for the year ended December 31, 2023. Revenue from significant customers as a percentage of the Company’s total revenue represent 13.9 % from a customer for the year ended December 31, 2022. 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 12.2 %, and 14.1 % from a vendor for the years ended December 31, 2023, and 2022, respectively. Leases The Company has lease arrangements for 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. Maintenance and repairs are charged to expense as incurred. Gains and losses from disposition of property and equipment are included on the consolidated 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 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 revenue on the consolidated statements of operations. F- 19 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. 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. F- 20 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 The Company incurred liquidated damages 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. 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, 2023 and 2022, the Company incurred advertising expenses of $ 4,372 and $ 5,987 , 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 accounts for freestanding contracts that are settleable in the Company’s equity securities, including the put option on the Company’s common stock, to be designated as an equity instrument, generally as a liability. A contract so designated is 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, with no impact on cash flows. At the date of settlement of a freestanding equity contract, the pro rata fair value of the related liability is transferred to additional paid-in capital. F- 21 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. 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 20) 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 year ended December 31, 2022) (further details are provided under the headings Publisher Partner Warrants and New Publisher Partner Warrants in Note 22), and (d) common stock warrants to ABG (further details are provided under the heading ABG Warrants in Note 22). 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 period. F- 22 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 22). Estimated volatility was determined under the (1) “Probability Weighted Scenarios” (prior to the reverse stock split on February 8, 2022) 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” (after the reverse stock split on February 8, 2022) 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. 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. F- 23 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. Schedule of Net Income (Loss) Per Common Share As of December 31, 2023 2022 Series G Preferred Stock 8,582 8,582 Series H Preferred Stock - 1,981,128 Financing Warrants - 107,956 ABG Warrants 999,540 999,540 AllHipHop Warrants 5,682 5,682 Publisher Partner Warrants 9,800 4,154 Restricted stock awards - 97,403 Restricted stock units 199,267 994,766 Common stock options 5,451,968 6,199,521 Total 6,674,839 10,398,732 Recent Accounting Pronouncements Recently Adopted Accounting Standards In March 2022, the Financial Accounting Standards Board (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 was adopted on January 1, 2023. The adoption of ASU 2022-02 did not have a material impact on the Company’s consolidated financial statements. Recently Issued Accounting Standards 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. In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative , which incorporates certain SEC disclosure requirements into the FASB Accounting Standards Codification (“Codification”). The amendments are expected to clarify or improve disclosure and presentation requirements of a variety of Codification Topics, allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC’s regulations. ASU 2023-06 will become effective for each amendment on the effective date of the SEC’s corresponding disclosure rule changes. The Company is currently evaluating the impact that the adoption of this new standard will have on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions. The provisions of ASU 2023-09 are effective for annual periods beginning after December 15, 2024; early adoption is permitted using either a prospective or retrospective transition method. The Company expects ASU 2023-09 to require additional disclosures in the notes to its consolidated financial statements. F- 24 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. Further information is provided under the heading Supplemental Pro Forma Information in Note 4. 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. 4. Acquisitions and Dispositions 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. 2023 Acquisition Teneology, Inc. – On January 11, 2023, the Company entered into an asset purchase agreement with Teneology, Inc., (“Teneology”) 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, collectively “Fexy Studios”), for a purchase price of $ 3,307 . The purchase price consisted of the following: (1) $ 500 cash paid at closing (including an advance payment of $ 250 prior to closing); (2) $ 75 deferred cash payments due in three equal installments of $ 25 on March 1, 2023 (paid), April 1, 2023 (paid) and May 1, 2023 (paid); (3) $ 200 deferred cash payment due on the first anniversary of the closing date, subject to certain indemnity provisions (not paid in January 2024, further details are provided under the heading Fexy Put Option in Note 28); and (4) the issuance of 274,692 shares of the Company’s common stock, subject to certain lock-up provisions, with a fair value of $ 2,000 on the transaction closing date (fair value was determined based on an independent appraisal); and which is subject to a put option under certain conditions (the “contingent consideration”) (as further described below in Note 17). 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 (on the closing date the common stock trading price was $ 7.94 per share). The agreement also provided for a cash retention pool for certain employees of $ 300 , subject to vesting over three years upon continued employment and other conditions. F- 25 The composition of the purchase price is as follows: Schedule of Composition Preliminary Assets Purchase Price Cash $ 500 Common stock 2,000 Contingent consideration 561 Deferred cash payments, as discounted 246 Total purchase consideration $ 3,307 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 $ 99 in transaction costs related to the acquisition, which primarily consisted of legal and accounting expenses. The acquisition-related expenses were recorded in general and administrative expenses on the consolidated statements of operations. 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 Preliminary Assets Purchase Price Allocation Advertiser relationships $ 663 Brand names 659 Goodwill 1,985 Net assets acquired $ 3,307 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 valued using the excess earnings method of the income approach and the brand names were valued using the relief-from-royalty method of the income approach. The estimated useful life is fifteen years ( 15.0 years) for the advertiser relationships and twelve years ( 12.0 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. The Company expects $ 1,678 of goodwill to 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 Teneology. The Company has determined, based on the information provided by Teneology 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 Teneology 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 Teneology was unable to comply with this request; and (2) the presentation of the pro forma results and the assumptions made by Teneology management were unable to be independently substantiated. F- 26 2023 Disposition On November 17, 2023, the Company sold certain assets related to one of Parade’s business components known as Athlon Outdoors for cash proceeds of $ 1,061 ($ 1,000 sale price (with a target working capital of $ 272 ) plus a preliminary working capital adjustment of $ 61 ), as further reduced by a final working capital adjustment of $ 153 , as reflected in accrued expenses and other on the consolidated balance sheets, resulting in a final sale price of $ 908 . In connection with the sale, the Company disposed of certain advertiser relationships and trade name relating to that business component with a carrying value of $ 639 and $ 172 , respectively, along with the accounts receivable and accounts payable of the business component of $ 453 and $ 31 , respectively, resulting in a recognized loss on sale of assets of $ 325 as reflected on the consolidated statements of operations. 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 27). 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 Composition of 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- 27 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 Purchase Price Allocation 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. 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, 2022: Schedule of Supplemental Proforma Information Year Ended December 31, 2022 Parade continuing operations from acquisition date of April 1, 2022 (unaudited): Revenue $ 40,071 Net loss ( 2,494 ) Combined entity continuing operations supplemental pro forma information had the acquisition date been January 1, 2022 (unaudited): Revenue: Parade $ 55,981 Arena 207,681 Total continuing operations supplemental pro forma revenue $ 263,662 Net loss: Parade $ ( 3,070 ) Arena ( 67,788 ) Adjustments ( 1,940 ) Total continuing operations supplemental pro forma net loss $ ( 72,798 ) 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 at the beginning of the Company’s reporting period and does not reflect the discontinued operations of Parade Print that was acquired on April 1, 2022 (as part of the Parade acquisition). The adjustments for the year ended December 31, 2022 of ($1,940), represents adjustments: (1) to record depreciation and amortization expense related to the fixed and intangible assets acquired from the acquisition of ($864); (2) to reverse the nonrecurring transaction cost related to the acquisition of $200; and (3) to reverse the deferred tax benefit related to the acquisition of ($1,276). 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. F- 28 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) $ 2,676 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. 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. In connection with the acquisition of Men’s Journal, the Company received a final valuation report during the quarterly period ended September 30, 2023 from a third party valuation firm after the preliminary purchase price was determined. After considering the results of the final valuation report, the Company estimated that the purchase consideration increased by $ 1,246 as a result of an increase in the fair value of the assumed lease obligation with an offset recorded to goodwill (see Note 11). 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: Schedule of Preliminary Price Allocation Lease deposit receivable $ 420 Advertiser relationships 6,860 Brand names 6,090 Goodwill 18,384 Unearned revenue ( 3,941 ) Subscription refund liability ( 137 ) Assumed lease obligation ( 2,676 ) 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. The Company expects $ 12,299 of goodwill to 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. F- 29 5 . Prepayments and Other Current Assets Prepayments and other current assets are summarized as follows: Schedule of Prepayments and Other Current Assets 2023 2022 As of December 31, 2023 2022 Prepaid expenses $ 2,946 $ 2,321 Prepaid supplies 773 927 Refundable income and franchise taxes 157 957 Unamortized debt costs 209 216 Employee retention credits 2,468 - Other receivables 45 20 Total prepayments and other current assets $ 6,598 $ 4,441 Under the provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and the subsequent extensions of the CARES Act, the Company was eligible for a refundable employee retention credit subject to certain criteria. The Company determined that it qualifies for the tax credit under the CARES Act. In connection with the CARES Act, the Company adopted a policy to recognize the employee retention credit when earned and to offset the credit against the related expenditure. During the year ended December 31, 2023, the Company recorded the employee retention credits as a reduction to payroll and related expenses of $ 6,868 in operating expenses on the consolidated statements of operations with a corresponding receivable included in prepaid expenses and other current assets on the consolidated balance sheets for the respective periods. During the year ended December 31, 2023, the Company received $ 4,400 in employee retention credits and has a receivable balance remaining of $ 2,468 as of December 31, 2023. 6. Property and Equipment Property and equipment are summarized as follows: Schedule of Property and Equipment 2023 2022 As of December 31, 2023 2022 Office equipment and computers $ 1,744 $ 1,744 Furniture and fixtures 166 240 Gross property and equipment 1,910 1,984 Less accumulated depreciation and amortization ( 1,582 ) ( 1,249 ) Net property and equipment $ 328 $ 735 Depreciation and amortization expense for the years ended December 31, 2023 and 2022 was $ 352 and $ 539 , respectively. Impairment charges for property and equipment for the years ended December 31, 2023 and 2022 of $ 55 and $ 0 , respectively, have been recorded on the consolidated statements of operations. 7. Leases The Company’s real estate lease for the use of office space was subleased during the year ended December 31, 2023. 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 operating lease has a remaining fixed payment term of 0.75 years. F- 30 The table below presents supplemental information related to the operating lease: Schedule of Supplemental Information Related to Operating Leases As of December 31, 2023 2022 Operating lease costs during the year (1) $ 1,052 $ 969 Cash payments included in the measurement of operating lease liability during the year 486 469 Weighted-average remaining lease term (in years) as of year-end 0.75 1.75 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 the Company’s lease 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 2023 2022 As of December 31, 2023 2022 Operating lease costs: General and administrative 1,344 1,187 Total operating costs ( 1 ) 1,344 1,187 Less sublease income ( 292 ) ( 218 ) Total operating lease costs $ 1,052 $ 969 (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, 2023 and 2022 of $ 620 and $ 668 , respectively, and month-to-month lease arrangements for the years ended December 31, 2023 and 2022 of $ 396 and $ 320 , respectively. Maturities of the operating lease liability as of December 31, 2023 are summarized as follows: Summary of Maturity of Lease Liabilities Minimum lease payments - 2024 $ 373 Less imputed interest ( 15 ) Present value of operating lease liability $ 358 Current portion of operating lease liability $ 358 Long-term portion of operating lease liability - Total operating lease liability $ 358 Sublease Agreement – The Company has entered into agreements to sublease certain space that it does not occupy, through the duration of the lease terms, with one sublease through September 2024 and two other subleases through March 2024. As of December 31, 2023, the Company is entitled to receive total sublease income of $ 537 . 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 initial term of the agreement with Convene was through December 31, 2023, with provisions for renewals. The Company terminated the arrangement effective December 31, 2023. F- 31 Lease Termination – Effective September 30, 2021, the Company terminated a certain lease arrangement for office space. 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 paid in October 2023; and $ 4,000 due on October 1, 2024, with imputed interest recognized at 10.0 % per annum, and the market advertising of $ 615 has been delivered during the year ended December 31, 2023, leaving $ 860 to be delivered as of December 31, 2023, with the current amount due, net of imputed interest, reflected in accrued expenses and other on the consolidated balance sheets. 8. Platform Development Platform development costs are summarized as follows: Summary of Platform Development Costs 2023 2022 As of December 31, 2023 2022 Platform development $ 26,054 $ 21,493 Less accumulated amortization ( 17,331 ) ( 11,163 ) Net platform development $ 8,723 $ 10,330 A summary of platform development activity is as follows: Summary of Platform Development Cost Activity As of December 31, 2023 2022 Platform development beginning of year $ 21,493 $ 21,997 Payroll-based costs capitalized 3,773 5,179 Less dispositions ( 164 ) ( 7,357 ) Total capitalized payroll-based costs 25,102 19,819 Stock-based compensation 1,016 1,884 Impairments ( 64 ) ( 210 ) Platform development end of year $ 26,054 $ 21,493 Amortization expense for platform development for the year ended December 31, 2023 and 2022 was $ 6,332 and $ 5,822 , respectively. Amortization expense for platform development is included in cost of revenue on the consolidated statements of operations. Impairment charges for platform development for the years ended December 31, 2023 and 2022 of $ 64 and $ 210 , respectively , have been recorded on the consolidated statements of operations. 9. Intangible Assets Intangible assets subject to amortization consisted of the following: Schedule of Intangible Assets Subject to Amortization As of December 31, 2023 As of December 31, 2022 Weighted Average Useful Life (in years) Carrying Amount Accumulated Amortization Net Carrying Amount Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology 4.70 $ 17,333 $ ( 17,333 ) $ - $ 17,333 $ ( 14,883 ) $ 2,450 Trade name 16.10 5,181 ( 1,547 ) 3,634 5,380 ( 1,180 ) 4,200 Brand name 9.70 12,774 ( 2,374 ) 10,400 12,115 ( 908 ) 11,207 Subscriber relationships 5.10 73,459 ( 61,654 ) 11,805 73,459 ( 47,146 ) 26,313 Advertiser relationships 10.20 15,182 ( 2,832 ) 12,350 15,302 ( 1,368 ) 13,934 Database 3.00 2,397 ( 2,171 ) 226 2,397 ( 1,753 ) 644 Digital content 2.00 355 ( 311 ) 44 355 ( 133 ) 222 Total intangible assets $ 126,681 $ ( 88,222 ) $ 38,459 $ 126,341 $ ( 67,371 ) $ 58,970 F- 32 Intangible assets subject to amortization were recorded as part of the Company’s business acquisitions. Amortization expense for the years ended December 31, 2023 and 2022 was $ 21,022 and $ 20,748 , respectively, of which amortization expense for developed technology of $ 2,130 and $ 2,831 , respectively, is included in cost of revenue on the consolidated statements of operations. No impairment charges for the year ended December 31, 2023 was recorded for the intangible assets. Impairment charges for the year ended December 31, 2022 of $ 47 were recorded for the intangible assets 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, 2023 is as follows: Schedule of Future Estimated Amortization expense For Intangible Assets Years Ending December 31, 2024 $ 14,544 2025 3,427 2026 3,214 2027 3,214 2028 2,964 Thereafter 11,096 Intangible assets ,net $ 38,459 10. Other Long-Term Assets Other assets are summarized as follows: Summary of Other Assets 2023 2022 As of December 31, 2023 2022 Security deposit $ 420 $ 420 Other receivables 90 - Prepaid insurance 284 504 Unamortized debt cost 209 216 Total other assets $ 1,003 $ 1,140 11. Goodwill The changes in carrying value of goodwill are as follows: Schedule of Changes in Carrying Value of Goodwill 2023 2022 As of December 31, 2023 2022 Carrying value at beginning of year $ 39,344 $ 19,619 Goodwill acquired in acquisition of Parade - 2,587 Goodwill acquired in acquisition of Men’s Journal 1,246 17,138 Goodwill acquired in acquisition of Fexy Studios 1,985 - Loss on impairment - - Carrying value at end of year $ 42,575 $ 39,344 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 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, 2023. No goodwill impairment was identified during the years ended December 31, 2023 and 2022, respectively. 12. Restricted Stock Liabilities The Company recorded the repurchase of 26,214 shares of the Company’s restricted common stock during the year ended December 31, 2022 on the consolidated statement of stockholders’ deficiency. Effective April 4, 2022, there are no longer any shares of the Company’s common stock subject to repurchase. During the year ended December 31, 2022, the Company paid $ 2,307 in cash for the repurchase ($ 2,152 in principal and $ 155 in interest). 13. Accrued Expenses and Other Accrued expenses and other are summarized as follows: Schedule of Accrued Expenses 2023 2022 As of December 31, 2023 2022 General accrued expenses $ 6,486 $ 6,339 Accrued payroll and related taxes 5,448 5,221 Accrued publisher expenses 7,596 4,911 Accrued interest 3,824 - Liabilities in connection with acquisitions and dispositions 1,119 1,123 Assumed lease liability 1,328 - Lease termination liability 4,481 4,753 Other accrued expenses 489 755 Total accrued expenses and other $ 30,771 $ 23,102 F- 33 14. Line of Credit Arena Credit Agreement – 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 (“SLR” or the “amended line of credit”), as further amended on August 31, 2023 in connection with the Business Combination (see Note 28) (the “SLR Amendment”) pursuant to which the SLR Amendment provided for an extension of the maturity date, additional event of default provisions in connection with the Business Combination, payment of certain fees in connection with the Business Combination, additional borrowings under the 2023 Notes (see Note 18) pursuant to the First Amendment (see Note 18 and Note 27), and issuance of Series A preferred stock in connection with the Business Combination, all of which are more fully described herein. Collectively the amended line of credit and SLR Amendment are referred to as the “line of credit” (or the “Arena Credit Agreement”). In connection with the Arena Notes Default (as further described under the heading Arena Loan Agreement in Note 28) there was a cross-default of the line of credit, or the SLR Default (as further described under the heading Arena Credit Agreement Default in Note 28). The line of credit provided for (i) $ 40,000 maximum amount of advances available (subject to certain limits and eighty-five ( 85 %) of eligible accounts receivable) pursuant to the amended line of credit, (ii) an interest rate at 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, 2023 the stated interest rate was 12.5%), (iii) payment of a fee equal to 2.25% of the maximum line amount with respect to any termination of the agreement prior to December 31, 2025 at the option of the Company at any time with 60 day notice pursuant to the SLR Amendment, (iv) a payment of a performance fee in the amount equal to 2.25% of the maximum line amount, under certain circumstances pursuant to the Business Combination in connection with a deal deadline or in the event of a deal failure, as defined in the SLR Amendment, further the performance fee will survive the termination of the agreement, pursuant to the SLR Amendment, (v) a payment of a success fee if the Business Combination is consummated, of 0.3% or 0.6% of the maximum line amount if the transaction closes on or before December 31, 2023 or after December 31, 2023, respectively, or $0 if the transaction closes after the deal deadline, pursuant to the SLR Amendment, and (vi) a maturity date of December 31, 2025 . The SLR Amendment also permitted the Company to enter into the 2023 Notes in an aggregate of $ 8,000 (as further described under the heading 2023 Bridge Notes in Note 18) and permitted the issuance of the Series A preferred stock for $ 25,000 in connection with the Business Combination. The line of credit was for working capital purposes and was 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 SLR Amendment and amended line of credit, the Company incurred debt costs of $ 200 and $ 441 , respectively, with the SLR Amendment debt cost plus the unamortized debt cost at the time of the SLR Amendment being amortized over the life of the extended maturity date of the line of credit. The unamortized balance, as of December 31, 2023 and 2022, was reflected in prepayment and other current assets of $ 209 and $ 216 , respectively, and other long-term assets of $ 209 and $ 216 , respectively . As of December 31, 2023, the effective interest rate on the line of credit was 13.7 %. As of December 31, 2023 and 2022, the balance outstanding under the line of credit was $ 19,609 and $ 14,092 , respectively, as reflected on the consolidated balance sheets. As of December 31, 2023, in connection with the SLR Default, the Company recorded a $ 900 termination fee representing 2.25 % of the maximum line amount, as reflected in accrued expenses and other on the consolidated balance sheets. 15. Liquidated Damages Payable Liquidated damages were recorded as a result of the following: (i) certain registration rights agreements provide for damages if the Company does not register certain shares of the Company’s common stock within the requisite time frame (the “Registration Rights Damages”); and (ii) certain securities purchase agreements provide for damages if the Company does not maintain its periodic filings with the SEC within the requisite time frame (the “Public Information Failure Damages”). F- 34 Obligations with respect to the liquidated damages payable are summarized as follows: Summary of Liquidated Damages As of December 31, 2023 Registration Rights Damages Public Information Failure Damages Accrued Interest Balance MDB common stock to be issued ( 1 ) $ 15 $ - $ - $ 15 Series H convertible preferred stock 565 574 659 1,798 Convertible debentures (2) - 144 72 216 Series J convertible preferred stock ( 2 ) 152 152 129 433 Series K convertible preferred stock ( 2 ) 166 70 226 462 Total $ 898 $ 940 $ 1,086 $ 2,924 (1) Shares of common stock issuable to MDB Capital Group, LLC (“MDB”) (see Common Stock to be Issued in Note 21). (2) Represents previously issued and converted debt or equity securities. On February 8, 2023, the Company entered into a stock purchase agreement with an investor, where the Company was liable for liquidated damages, pursuant to which the Company issued 47,252 shares of its common stock, in satisfaction of the liquidated damages, 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. The Company prepared and filed a registration statement covering the resale of these shares of the Company’s common stock issued in lieu of payment of these liquidated damages in cash. During the year ended December 31, 2023, the Company recorded $ 499 in connection with the issuance of shares of the Company’s common stock on the consolidated statements of stockholders’ deficiency (further details are provided under the heading Common Stock for Liquidated Damages in Note 21). On December 1, 2023, the Company entered into a waiver of liquidated damages and release of claims, where B. Riley, a principal stockholder at the time, relinquished any claims to liquidated damages and accrued interest thereon amounting to $ 3,497 , which resulted in a gain on forgiveness of debt. Given this transaction was with a related party and in connection with other contemporaneous transactions with another principal stockholder, Simplify (further described in Note 26), the gain of $ 3,497 was recorded within additional paid-in capital on the consolidated statement of stockholders’ deficiency. As of December 31, 2023, the short-term liquidated damages payable was $ 2,924 . The Company will continue to accrue interest on the liquidated damages balance at 1 % per month based on the balance outstanding as of December 31, 2023, or $ 2,924 , until paid. There is no scheduled date when the unpaid liquidated damages become due. The previously issued and converted Series K convertible preferred stock 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. 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 ( 2 ) - 704 280 984 Series J convertible preferred stock ( 2 ) 932 932 525 2,389 Series K convertible preferred stock ( 2 ) 437 478 220 1,135 Total $ 2,002 $ 2,740 $ 1,595 $ 6,337 (1) Shares of common stock issuable to MDB. (2) Represents previously issued and converted debt or equity securities. F- 35 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 on January 24, 2022 (further details are provided under heading Common Stock for Liquidated Damages in Note 21). Information with respect to the liquidated damages recognized on the consolidated statements of operations is provided in Note 23. 16. Other Long-term Liabilities Other long-term liabilities consisted of the following: Schedule of Other long- term liabilities 2023 2022 As of December 31, 2023 2022 Lease termination liability $ - $ 3,621 Assumed lease liability 350 1,486 Other 56 200 Total other long-term liabilities $ 406 $ 5,307 17. Fair Value Measurement The Company’s financial instruments consist of level 1, Level 2 and level 3 assets as of December 31, 2023 and 2022. As of December 31, 2023 and 2022, the Company’s cash and cash equivalents of $ 9,284 and $ 13,871 , respectively, were Level 1 assets and included savings deposits, overnight investments, and other liquid funds with financial institutions. The Company accounted for certain common stock issued in connection with the acquisition of Fexy Studios that is subject to a put option (which provides for a cash payment to the sellers on the first anniversary date of the closing (or January 11, 2024) in the event the common stock trading price on such date is less than the common stock trading price on the day immediately preceding the acquisition date, or $ 8.10 per share), as a derivative liability, which requires the Company to carry such amounts on its consolidated balance sheets as a liability at fair value, as adjusted at each reporting period-end (further details are provided under the heading Fexy Put Option in Note 28). Financial instruments measured at fair value during the year ended December 31, 2023, related to the Company’s current debt, with a carrying value of $ 7,887 and $ 102,309 for the Bridge Notes and Debt as of December 31, 2023, respectively, approximates fair value due to their short nature and based on current market interest rates for debt instruments of similar credit standing. Financial instruments measured at fair value during the year consisted of the following: Schedule of Fair Value of Financial Instruments As of December 31, 2023 Fair Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Contingent consideration $ 1,571 $ - $ 1,571 $ - 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 $ - Contingent Consideration – The fair value of the contingent consideration is primarily dependent on the common stock trading price on the first anniversary of the closing of the Fexy Studios acquisition, or January 11, 2024. The estimated fair value was calculated based on the $ 8.10 put option amount based on the exercise price of the Company’s common stock at the acquisition date, less the $ 2.38 the Company’s common stock trading price as of the reporting date, or $ 5.72 per share, multiplied by the number of shares subject to the put option of 274,692 , which approximated the value if the Black-Scholes option-pricing model was used given the proximity date of the put option. For the year ended December 31, 2023, the change in valuation of the contingent consideration of $ 1,010 was recognized in other expenses on the consolidated statement of operations. Further details are provided under the heading Fexy Put Option in Note 28. F- 36 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, 2023 and 2022 was $ 523 and $ 1,154 , 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. 18. Bridge Notes 2023 Notes In connection with the Note Purchase Agreement, First Amendment and Second Amendment (as further described under the heading Principal Stockholders in Note 26), on August 31, 2023, the Company issued $ 5,000 aggregate principal amount of senior secured notes (the “2023 Notes”). The provisions of the First Amendment also permit certain incremental borrowings in the amount up to $ 3,000 at the sole discretion of the purchaser (the “Incremental 2023 Notes”), subject to a minimum amount of $ 1,000 and other conditions. On September 29, 2023, the Company issued $ 1,000 aggregate principal amount of senior secured notes pursuant to the incremental borrowings. On November 27, 2023, the Company issued $ 2,000 aggregate principal amount of senior secured notes pursuant to the incremental borrowings. In connection with the issuance of the 2023 Notes, the Company received net proceeds of $ 7,643 from the issuance of the notes and incurred debt costs of $ 357 that is being amortized over the expected life of the debt. The terms of 2023 Notes provide for: ● an interest rate fixed at 10.0 % per annum; ● a maturity date of April 30, 2024 , as amended pursuant to the Second Amendment from December 31, 2023, subject to consummation of the Business Combination (see Note 28) on or prior to April 30, 2024, as amended pursuant to the Second Amendment from December 31, 2023, which may result in an event of default if not consummated, and a prepayment requirement to apply a portion of the net proceeds from the Business Combination to repay $ 8,000 (and any additional amounts borrowed pursuant to the incremental borrowing arrangement described above) under the notes; ● a provision for the failure to repay the $ 8,000 prepayment requirement in full with the proceeds of the Business Combination or failure to consummate the Business Combination by April 30, 2024, as amended pursuant to the Second Amendment from December 31, 2023, will result in an event of default under the notes; and ● an election to prepay the notes, at any time, at 100 % of the principal amount due with no premium or penalty. F- 37 The debt issuance cost incurred under the debt modifications pursuant to the First Amendment are being amortized over the term of the 2023 Notes. The debt modification pursuant to the Second Amendment resulted in the unamortized debt issuance cost being amortized over the extended term of the 2023 Notes. On December 29, 2023, the Company failed to make the interest payment due on the 2023 Notes resulting in an event of default with subsequent agreement to a forbearance period through the earlier of the following: (a) April 30, 2024; (b) the occurrence of the closing of the Business Combination and (c) the termination of the Business Combination prior to closing (collectively the “forbearance”) ( further details are provided for under the heading Arena Loan Agreement in Note 28). As of December 31, 2023, the effective interest rate on the 2023 Notes was 14.2 %. As of December 31, 2023, the current balance outstanding under the 2023 Notes was $ 7,887 , net of unamortized cost of $ 113 , with the principal balance due of $ 8,000 , subject to the forbearance. Information for the years ended December 31, 2023 and 2022, with respect to interest expense related to the 2023 Notes is provided under the heading Interest Expense in Note 19. 2022 Bridge Notes On December 15, 2022, the Company issued $ 36,000 aggregate principal amount of senior secured notes (the “2022 Bridge Notes”) pursuant to the Note Purchase Agreement. In connection with the issuance of the notes, the Company received net proceeds of $ 34,728 and incurred debt costs of $ 1,272 that were being amortized over the expected life of the debt. As of December 31, 2022, the balance outstanding under the 2022 Bridge Notes was $ 34,805 ($ 36,000 principal balance less unamortized debt costs of $ 1,195 ), that was modified during the year ended December 31, 2023 (further details are provided under the heading 2022 Bridge Notes in Note 19). 19. Long-term Debt Senior Secured Notes Pursuant to the Note Purchase Agreement, as amended by the First Amendment and Second Amendment ( as further described under the heading Principal Stockholders in Note 26), as of December 31, 2023 and 2022, the Company has notes outstanding referred to as the senior secured notes (the “Senior Secured Notes”), the delayed draw term notes (the “Delayed Draw Term Notes”) and the 2022 Bridge Notes, as further described below. The terms of the Senior Secured Notes provide for: ● a provision for the Company to enter into Delayed Draw Term Notes (as described below); ● a provision where the Company added $ 13,852 to the principal balance of the notes for interest payable prior to January 1, 2022 as payable in-kind; ● 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 convertible 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, unless waived, the Company will prepay certain obligations in an amount equal to such cash proceeds, net of underwriting discounts and commissions; ● interest on the notes 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, 2026 (as amended from December 31, 2023 pursuant to the First Amendment), subject to consummation of the Business Combination (see Note 28) on or prior to April 30, 2024, as amended pursuant to the Second Amendment from December 31, 2023, which may result in an event of default if not consummated, and subject to certain acceleration conditions; and ● the Company to enter into the 2022 Bridge Notes for $ 36,000 and to increase the line of credit with SLR in an aggregate principal amount not to exceed $ 40,000 . F- 38 Delayed Draw Term Notes The terms of the Delayed Draw Term Notes provide for: ● an interest rate of 10.0 % per annum, subject to adjustment in the event of default; ● interest on the notes 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; and ● a maturity date on December 31, 2026 (as amended from December 31, 2023 pursuant to the First Amendment), subject to consummation of the Business Combination on or prior to April 30, 2024, as amended pursuant to the Second Amendment from December 31, 2023, which may result in an event of default if not consummated, and subject to certain acceleration terms. 2022 Bridge Notes Pursuant to the First Amendment, the 2022 Bridge Notes outstanding as of December 31, 2022 were amended and reclassified from a current liability to a noncurrent liability. In connection with the debt modification, the Company incurred debt issuance costs of $ 100 that are being amortized over the life of the 2022 Bridge Notes and a portion of the note maturity was extended as further described below. The terms of the 2022 Bridge Notes provide for: ● an interest rate fixed at 10.0 % per annum (as amended from interest that was payable in cash at an interest rate of 12 % per annum quarterly; with interest rate increases of 1.5 % per annum on March 1, 2023, May 1, 2023, and July 1, 2023, pursuant to the First Amendment); ● a maturity date of December 31, 2026 (as amended from December 31, 2023 pursuant to the First Amendment), subject to consummation of the Business Combination on or prior to April 30, 2024, as amended pursuant to the Second Amendment from December 31, 2023, which may result in an event of default if not consummated, and 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 notes; ● a prepayment requirement to apply a portion of the net proceeds from the Business Combination to repay $ 20,000 of the principal balance under the notes upon the earlier of April 30, 2024, as amended pursuant to the Second Amendment from December 31, 2023 or the closing of the Business Combination; ● a provision for the failure to repay the $ 20,000 prepayment requirement in full with the proceeds of the Business Combination or failure to consummate the Business Combination by April 30, 2024, as amended pursuant to the Second Amendment from December 31, 2023, will result in an event of default under the notes; and ● an election to prepay the notes, at any time, in whole or in part with no premium or penalty. F- 39 The following table summarizes the debt: Schedule of long term debt As of December 31, 2023 As of December 31, 2022 Principal Balance Unamortized Discount and Debt Issuance Costs Carrying Value Principal Balance Unamortized Discount and Debt Issuance Costs Carrying Value Senior Secured Notes, effective interest rate of 10.1% as of December 31, 2023, as amended, matures December 31, 2026, subject to acceleration $ 62,691 $ ( 272 ) $ 62,419 $ 62,691 $ ( 904 ) $ 61,787 Senior Secured Notes, effective interest rate of 10.1 % as of December 31, 2023, as amended $ 62,691 $ ( 272 ) $ 62,419 $ 62,691 $ ( 904 ) $ 61,787 Delayed Draw Term Notes, effective interest rate of 10.2 % as of December 31, 2023, as amended 4,000 ( 31 ) 3,969 4,000 ( 103 ) 3,897 2022 Bridge Notes, effective interest rate of 10.2 % as of December 31, 2023, as amended 36,000 ( 79 ) 35,921 - - - Total $ 102,691 $ ( 382 ) $ 102,309 $ 66,691 $ ( 1,007 ) $ 65,684 The debt issuance costs incurred under the debt modification pursuant to the First Amendment are being amortized over the term of the long-term debt. The debt modification pursuant to the Second Amendment resulted in the unamortized debt issuance cost being amortized over the extended term of the long-term debt. On December 29, 2023, the Company failed to make the interest payment due on the Secured Senior Notes, Delayed Draw Term Notes and 2022 Bridge Notes (collectively the “debt”) resulting in an event of default with subsequent agreement to a forbearance period through the earlier of the following: (a) April 30, 2024; (b) the occurrence of the closing of the Business Combination and (c) the termination of the Business Combination prior to closing (or the forbearance) (further details are provided for under the heading Arena Loan Agreement in Note 28). As of December 31, 2023, the current maturities of the debt were $ 102,309 , with the principal balance due of $ 102,691 , subject to the forbearance. Information for the years ended December 31, 2023 and 2022 with respect to interest expense related to long-term debt is provided below. F- 40 Interest Expense The following table represents interest expense: Summary of Interest Expense 2023 2022 Years Ended December 31, 2023 2022 Amortization of debt costs: Line of credit $ 214 $ 9 2023 Notes 244 - Senior Secured Notes 632 1,031 Delayed Draw Term Notes 72 464 2022 Bridge Notes 1,216 77 Total amortization of debt costs 2,378 1,581 Noncash and accrued interest: 2023 Notes 173 - Senior Secured Notes 1,602 - Delayed Draw Term Notes 102 - 2022 Bridge Notes 920 - Line of credit termination fee 900 - Parade - 116 Other accrued interest 127 204 Total noncash and accrued interest 3,824 320 Cash paid interest: Line of credit 2,023 1,328 2023 Notes 44 - Senior Secured Notes 4,754 6,356 Delayed Draw Term Notes 303 980 2022 Bridge Notes 3,763 - Other 1,214 863 Total cash paid interest 12,101 9,527 Less interest income (1) ( 338 ) - Total interest expense $ 17,965 $ 11,428 (1) During the year ended December 31, 2023, the Company recorded interest income of $ 338 related to the refunds received from the employee retention credits. Noncash and accrued interest of $ 204 as of December 31, 2022 related to the 2022 Bridge Notes, was paid in cash during the year ended December 31, 2023. 20. 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, 2023 as follows: ● 1,800 authorized shares designated as “Series G Convertible Preferred Stock” (as further described below), of which 168 shares are outstanding as of December 31, 2023 and 2022. ● 23,000 authorized shares designated as “Series H Convertible Preferred Stock” (as further described below), of which none and 14,356 shares were outstanding as of December 31, 2023 and 2022, respectively. F- 41 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 $ 1,000 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 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 $ 1,000 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. The holder of the Series G Preferred Stock still has the ability to exercise the redemption option. Series H Preferred Stock All of the then outstanding shares of Series H convertible Preferred Stock (the “Series H Preferred Stock”) automatically converted into shares of the Company’s common stock on the fifth anniversary date of the initial first closing of the Series H Preferred Stock, or on August 10, 2023, at the conversion price of $ 7.26 per share (the “automatic mandatory conversion”). Further details are provided under the heading Common Stock in Note 21. 21. Stockholders’ Deficiency Common Stock The Company has the authority to issue 1,000,000,000 shares of common stock, 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 Registered Direct Offering – On March 31, 2023, the Company entered into common stock purchase agreements with certain purchasers, pursuant to which the Company issued and sold in a registered direct offering an aggregate of 2,963,918 shares of the Company’s common stock, at a purchase price of $ 3.88 per share. The gross proceeds received were $ 11,500 and after deducting offering expenses of $ 356 , the Company received net proceeds of $ 11,144 , as reflected on the consolidated statements of stockholder’s deficiency. No underwriter or placement agent participated in the registered direct offering. The net proceeds were intended for working capital and other general corporate purposes. Further information is provided in Note 26. Common Stock for Series H Preferred Stock – During the years ended December 31, 2023 and 2022, the Company recorded the issuance of 1,981,128 (of which 1,759,224 were issued in accordance with the automatic mandatory conversion) and 97,980 shares of common stock, respectively, upon conversion of 14,356 (of which 12,748 were issued were issued in accordance with the automatic mandatory conversion) and 710 shares of Series H Preferred Stock, respectively, with a corresponding amount of $ 13,008 (representing 14,356 shares of Series H Preferred Stock at $ 1,000 stated par value per share, less issuance cost of $ 1,348 ) and $ 710 (representing 710 shares of Series H Preferred Stock at $ 1,000 stated par value per share), respectively, as reflected on the consolidated statements of stockholders’ deficiency. F- 42 Common Stock for Acquisitions – During the years ended December 31, 2023 and 2022, the Company recorded the issuance of 274,692 and 330,863 shares of the Company’s common stock, respectively, as reflected on the consolidated statements of stockholders’ deficiency as follows: (i) 274,692 shares issued pursuant to the Fexy Studios asset acquisition on January 11, 2023, with a fair value of $ 2,000 on the transaction closing date, as further described in Note 4; and (ii) 330,863 shares issued consisted of (a) 314,103 shares 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 (b) 16,760 shares 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. Common Stock for Liquidated Damages – During the years ended December 31, 2023 and 2022, the Company entered into several stock purchase agreements with an investor where it was liable for liquidated damages, pursuant to which the Company issued 47,252 and 505,655 , respectively, shares of its common stock, as follows: (i) 47,252 shares of common stock were issued to the investor in lieu of an aggregate of $ 499 owed in liquidated damages as of the conversion date ($494 as of December 31, 2022 plus $5 in additional interest through the conversion date), where the Company recorded $369 in connection with the issuance of shares of the Company’s common stock and a gain of $130 on the settlement of the liquidated damages, both as reflected in additional paid-in capital, totaling $499; and (ii) 505,655 shares of common stock were issued 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, where 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, both of which were recorded as additional paid-in capital on the consolidated statements of stockholders’ deficiency. In connection with the 505,655 shares of common stock issued, the Company filed a registration statement covering the resale of those shares of the Company’s common stock. Restricted Stock Units – The Company issued, in connection with the vesting of restricted stock units, 429,528 shares of the Company’s common stock and 832,233 shares of the Company’s common stock (as described in Note 22) during the years ended December 31, 2023 and 2022, respectively, as reflected on the consolidated statements of stockholders’ equity. Common Stock Withheld – The Company recorded the repurchase of vested restricted common stock of 202,382 shares for the payment for taxes of $ 1,423 , and 373,394 shares for the payment for taxes of $ 4,468 , during the years ended December 31, 2023 and 2022, respectively, as reflected on the consolidated statements of stockholders’ deficiency. Exercise of Stock Options – The Company recorded the exercise of 795 and 96,408 common stock options for shares of the Company’s common stock for cash of $ 0 and $ 95 , during the years ended December 31, 2023 and 2022, respectively, as reflected on the consolidated statements of stockholders’ deficiency. Common Stock to be Issued – In connection with the Say Media merger on December 12, 2018, the Company issued 38,582 and 7,851 shares of the Company’s common stock during the year ended December 31, 2023 and 2022, respectively, which were required to be issued as of January 1, 2022. Professional Services – During the year ended December 31, 2022, the Company issued, in connection with entering into several professional services agreements, 14,617 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 ) that were recorded at the trading price on the issuance date of $ 184 , as reflected on the consolidated statements of stockholders’ deficiency. Common Stock Public Offering – On February 15, 2022 and March 11, 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 of $ 2,440 to B. Riley (see Note 26). 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. F- 43 Restricted Stock Awards 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 22). A summary of the restricted stock award activity during the year ended December 31, 2023 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, 2023 97,403 $ 16.94 Vested ( 97,403 ) ( 16.94 ) Restricted stock awards outstanding at December 31, 2023 - 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 22. Common Stock 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 2,701 shares of the Company’s common stock ( subject to liquidated damages, see Note 15), which have not been issued as of December 31, 2023, as reflected on the consolidated statements of stockholders’ deficiency as common stock to be issued (see Note 15). Common Stock Warrants Warrants were issued to purchase shares of the Company’s common stock in connection with various financings (the “Financing Warrants”), all of which have expired. A summary of the Financing Warrants activity during the year ended December 31, 2023 is as follows: Summary of Warrant Activity Weighted Average Weighted Remaining Average Contractual Number of Exercise Life Shares Price (in Years) Financing Warrants outstanding at January 1, 2023 107,956 $ 10.61 0.58 Expired ( 107,956 ) 10.61 Financing Warrants outstanding at December 31, 2023 - - AllHipHop Warrants – On October 26, 2020, the Company granted AllHipHop, LLC an aggregate of 5,682 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. The AllHipHop Warrants were in exchange for the surrender and termination of 6,819 previously issued Publisher Partner Warrants. F- 44 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 Licensing Agreement, expiring in ten years . The warrants provided time-based vesting in equal monthly increments over a period of two years beginning on the one year anniversary of the date of issuance of the warrants (the “Time-Based Warrants”) and performance based vesting based on the achievement of certain performance goals for the licensed brands in calendar years 2020, 2021, 2022, or 2023 (the “Performance-Based Warrants”). The warrants also provide that (1) 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; (2) all of the warrants automatically vest upon certain terminations of the Licensing Agreement by ABG or upon a change of control of the Company; and (3) 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). As of December 31, 2023, 399,816 Time-Based Warrants vested and 599,724 Performance-Based Warrants vested as of the issuance date of these consolidated financial statements were issued (further details are provided under the heading ABG Warrants in Note 28 as to the full vesting of the ABG Warrants in January 2024). Information with respect to stock-based compensation cost and unrecognized stock-based compensation cost related to the ABG Warrants is provided in Note 22. 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. Information with respect to stock-based compensation cost and unrecognized stock-based compensation cost related to the New Publisher Partner Warrants is provided in Note 22. 22. 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 restricted stock awards and statutory and non-statutory common stock options 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. ● 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. F- 45 ● 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 is administered by the Board or any committee of directors designated by the Board. Restricted Stock Units During the year ended December 31, 2023 and 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, 2023, and 2022. A summary of the restricted stock unit activity during the year ended December 31, 2023 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, 2023 994,766 397,376 $ 15.44 Granted 148,970 - 5.77 Vested ( 645,023 ) 645,023 Released - ( 429,528 ) Cancelled ( 299,446 ) - Restricted stock units outstanding at December 31, 2023 199,267 612,871 13.55 On February 28, 2023 and June 30, 2023, the Company modified certain restricted stock units as a result of the resignation of two senior executives, where 38,026 and 42,635 restricted stock units with time-based vesting that were unvested were vested, respectively, subject to certain provisions, resulting in no incremental cost. On November 22, 2022, the Company modified 232,816 restricted stock units that were issued to one former 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 of new shares of its common stock upon conversion of a restricted stock unit to cover the tax obligations. During the year ending December 31, 2024, the Company expects to repurchase approximately 295,000 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, 2023 and 2022 were $ 2,955 and $ 8,707 , 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- 46 Common Stock Options During the years ended December 31, 2023 and 2022, the Company issued common stock options under the 2022 Plan, consisting of primarily of incentive stock options with a term of up to ten years with time-based vesting provisions over three years. The fair value of common stock option awards granted during the years ended December 31, 2023 and 2022 was calculated using a Black-Scholes options-pricing model for the time-based awards under the Up-list Scenario, after the Company’s common stock was listed on the NYSE American. The fair value of common stock option awards granted during the year ended December 31, 2022 was calculated using the Black-Scholes option-pricing model for the time-based under the Probability Weighted Scenarios, prior to the Company’s common stock being listed on the NYSE American. The assumptions utilized are as follows: Schedule of Fair Value of Stock Options Assumptions Years Ended December 31, 2023 2022 Up-list Up-list No Up-list Risk-free interest rate 3.46 % - 4.82 % 0.97 % - 4.36 % 0.97 % - 1.44 % Expected dividend yield 0.00 % 0.00 % 0.00 % Expected volatility 46.43 % - 47.27 % 42.00 % - 82.00 % 82.00 % - 137.00 % Expected life 6 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, 2023 is as follows: Summary of Stock Option Activity Weighted Average Weighted Remaining Average Contractual Number of Exercise Life Shares Price (in Years) Common stock options outstanding at January 1, 2023 6,199,521 $ 15.26 8.20 Granted 287,993 4.22 Exercised ( 6,927 ) 8.82 Forfeited ( 449,333 ) 9.70 Expired ( 579,286 ) 9.38 Common stock options outstanding at December 31, 2023 5,451,968 9.56 4.43 Common stock options exercisable at December 31, 2023 4,049,393 9.64 5.06 Common stock options not vested at December 31, 2023 1,402,575 Common stock options available for future grants at December 31, 2023 (1) 542,847 (1) Common stock available for future issuance under the 2022 Plan represent 1,800,000 of authorized shares; less 1,066,597 common stock options outstanding and 190,556 restricted stock units outstanding. The aggregate grant date fair value of common stock options granted during the years ended December 31, 2023 and 2022 was $ 610 and $ 7,194 , respectively. The weighted-average grant-date fair value of common stock options granted during the years ended December 31, 2023 and 2022 were $ 2.12 and $ 5.25 , respectively. The total intrinsic value of common stock options exercised during the years ended December 31, 2023 and 2022 were $ 10 and $ 1,507 , respectively. The total fair value of common stock options vested during the years ended December 31, 2023 and 2022 were $ 10,155 and $ 12,694 , respectively. The unvested common stock options for which the vesting is expected based on achievement of a performance condition as of December 31, 2023 were 583,143 with a weighted average remaining contractual term of 5.28 years. F- 47 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. There was no intrinsic value of exercisable but unexercised in-the-money common stock option awards as of December 31, 2023 based on a fair market value of the Company’s common stock of $ 2.38 per share on December 31, 2023. The exercise prices under the common stock options outstanding and exercisable are as follows as of December 31, 2023: Schedule of Exercise Prices of Common Stock Options Exercise Outstanding Vested Price (Shares) (Shares) $ 2.48 to $ 10.50 4,318,901 3,308,790 $ 10.51 to $ 15.52 1,062,379 670,956 $ 15.53 to $ 20.54 9,091 9,091 $ 20.55 to $ 25.56 25,683 24,642 $ 25.57 to $ 30.58 910 910 $ 30.59 to $ 35.60 4,320 4,320 $ 35.61 to $ 40.62 2,728 2,728 $ 40.63 to $ 48.40 27,956 27,956 5,451,968 4,049,393 Modification of Awards – On February 28, 2023, the Company modified certain equity awards as a result of the resignation of a senior executive employee where 38,026 restricted stock units with time-based vesting that were unvested were vested and 21,117 options to purchase shares of the Company’s common stock with time-based vesting that were unvested were vested, each subject to compliance with applicable securities laws and certain other provisions. In connection with the modification of these equity awards, the Company agreed to purchase a total of 45,632 options to purchase shares of the Company’s common stock (including previously vested options to purchase shares of the Company’s common stock of 24,515 ) as of the resignation date of the employee at a price of $ 10.29 per share, reduced by the exercise price and required tax withholdings, subject to certain conditions. The modification of the equity awards resulted in the unamortized costs being recognized at the modification date. The cash price of $ 10.29 per option less the strike price of $ 8.82 per option resulted in incremental cost of $ 68 being recognized at the modification date. The modification resulted in liability classification of the equity awards, with $ 68 paid during the year ended December 31, 2023. On June 30, 2023, the Company modified certain equity awards upon the resignation of a senior executive employee pursuant to which unvested restricted stock units for 42,635 shares of the Company’s common stock vested, and unvested options for 29,701 shares of the Company’s common stock vested with the exercise period extended for the 10 -year contractual term of the options from the grant date of the award. In connection with the termination, the unamortized costs of the awards of $ 773 was recognized at the termination date and $ 284 of incremental cost was recognized as a result of the option award modification upon termination of the senior executive. On November 2, 2023, the Company modified options of former a senior executive officer for 450,560 shares of the Company’s common stock, pursuant to which the exercise period would be extended for the 10 -year contractual term from the grant date of the award subject to continued employment through the closing date of the Business Combination (see Note 28) (the “conditions”). Incremental costs in connection with the modification was $ 380 , of which no cost was recognized at the modification date since the conditions were not satisfied and the employment of the officer was terminated. F- 48 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, as well as 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 the 2019 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. 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 . ABG Warrants In connection with the 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, 2023 is as follows: Schedule of Warrants Activity Number of Shares Weighted Average Weighted Average Remaining Contractual Life Unvested Vested Exercise Price (in years) ABG Warrants outstanding at January 1, 2023 599,724 399,816 $ 11.55 6.46 Vested - - ABG Warrants outstanding at December 31, 2023 599,724 399,816 11.55 5.46 There was no intrinsic value of exercisable but unexercised in-the-money ABG Warrants as of December 31, 2023 based on a fair market value of the Company’s common stock of $ 2.38 per share on December 31, 2023. Information on the acceleration of the vesting of the ABG Warrants is provided in Note 28. The exercise prices of the ABG Warrants outstanding and exercisable are as follows as of December 31, 2023. 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 Information with respect to compensation cost and unrecognized compensation cost related to the ABG Warrants is provided under the heading Stock-Based Compensation . F- 49 Publisher Partner Warrants Publisher Partner Warrants – Publisher Partner Warrants outstanding as of January 1, 2023, totaling 4,154 , expired during the year ended December 31, 2023. As of December 31, 2023, there are no Publisher Partner Warrants outstanding. New Publisher Partner Warrants A summary of the New Publisher Partner Warrants activity during the year ended December 31, 2023 is as follows: Schedule of Warrants Activity Weighted Average Weighted Remaining Average Contractual Number of Exercise Life Shares Price (in Years) New Publisher Partner Warrants outstanding at January 1, 2023 - $ - - Granted 9,800 6.91 - New Publisher Partner Warrants outstanding at December 31, 2023 9,800 6.91 4.15 New Publisher Partner Warrants exercisable at December 31, 2023 1,084 10.56 3.92 New Publisher Partner Warrants not vested at December 31, 2023 8,716 New Publisher Partner Warrants available for future grants at December 31, 2023 23,000 There was no intrinsic value of exercisable but unexercised in-the-money New Publisher Partner Warrants since the fair market value of $ 2.38 per share of the Company’s common stock was lower than the exercise prices on December 31, 2023. The exercise prices of the New Publisher Partner Warrants outstanding and exercisable are as follows as of December 31, 2023. Schedule of Exercise Prices of Common Stock Options Exercise Outstanding Exercisable Price (Shares) (Shares) $ 5.30 6,800 - $ 10.56 3,000 1,084 9,800 1,084 Stock-Based Compensation Stock–based compensation and equity-based expense charged to operations or capitalized during the years ended December 31, 2023 and 2022 are summarized as follows: Summary of Stock-based Compensation Year Ended December 31, 2023 Restricted Stock Common Stock Options ABG Warrants Totals Cost of revenue $ 2,092 4,460 10 $ 6,562 Selling and marketing 257 1,402 - 1,659 General and administrative 6,372 3,457 1,010 10,839 Total costs charged to operations 8,721 9,319 1,020 19,060 Capitalized platform development - 1,016 - 1,016 Total stock-based compensation $ 8,721 10,335 1,020 $ 20,076 F- 50 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 Unrecognized compensation expense related to the stock-based compensation awards and equity-based awards as of December 31, 2023 was as follows: Schedule of Unrecognized Compensation Expense As of December 31, 2023 Restricted Stock Common Stock Options ABG Warrants Totals Unrecognized compensation expense $ 1,191 $ 4,192 $ 26 $ 5,409 Weighted average period expected to be recognized (in years) 1.84 1.33 2.01 1.45 23. Liquidated Damages During the years December 31, 2023 and 2022, the Company recorded liquidated damages of $ 583 and $ 1,140 (including accrued interest of $ 583 and $ 652 ), 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 convertible preferred stock timely. 24. Income Taxes The components of the (provision) benefit for income taxes consist of the following: Schedule of Income Taxes 2023 2022 Years Ended December 31, 2023 2022 Current tax (provision) benefit: Federal $ - $ - State and local ( 88 ) ( 77 ) Total current tax (provision) benefit ( 88 ) ( 77 ) Deferred tax (provision) benefit: Federal ( 57 ) 985 State and local ( 77 ) 155 Total deferred tax (provision) benefit ( 134 ) 1,140 Total income tax (provision) benefit $ ( 222 ) $ 1,063 F- 51 The components of deferred tax assets and liabilities were as follows: Schedule of Components of Deferred Tax Assets and Liabilities 2023 2022 As of December 31, 2023 2022 Deferred tax assets: Net operating loss carryforwards $ 52,353 $ 51,023 Interest limitation carryforward 10,028 5,444 Tax credit carryforwards 264 264 Allowance for doubtful accounts 388 757 Accrued expenses and other 891 1,340 Lease termination 1,017 1,869 Liquidated damages 794 1,717 Unearned revenue 5,148 3,744 Stock-based compensation 7,229 6,931 Operating lease liability 58 118 Depreciation and amortization 4,146 3,706 Deferred tax assets 82,316 76,913 Valuation allowance ( 76,367 ) ( 65,406 ) Total deferred tax assets 5,949 11,507 Deferred tax liabilities: Acquisition-related intangibles ( 6,548 ) ( 11,972 ) Total deferred tax liabilities ( 6,548 ) ( 11,972 ) Net deferred tax liabilities $ ( 599 ) $ ( 465 ) 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, 2023 and 2022. As of December 31, 2023, the Company had federal, state, and local net operating loss carryforwards available of $ 193,801 , $ 145,968 and $ 53,002 respectively, to offset future taxable income. Net operating losses for U.S. federal tax purposes of $ 138,243 do not expire (limited to 80% of taxable income in a given year) and $ 55,558 will expire, if not utilized, through 2037 in various amounts. 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 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- 52 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, 2023 and 2022 and concluded it may have experienced an ownership change as a result of certain equity transactions during the rolling three-year period of 2021 to 2023. 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, 2023 and 2022. 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, 2023 2022 Amount Percent Amount Percent Federal benefit expected at statutory rate $ ( 11,626 ) 21.0 % $ ( 14,375 ) 21.0 % State and local taxes, net of federal benefit ( 2,526 ) 4.6 % ( 3,429 ) 5.0 % Stock-based compensation 3,472 - 6.3 % 3,894 - 5.7 % Unearned revenue ( 562 ) 1.0 % ( 696 ) 1.0 % Interest expense 62 - 0.1 % 56 - 0.1 % Gain upon debt extinguishment - 0.0 % ( 760 ) 0.0 % Other differences, net 678 - 1.2 % ( 997 ) 1.6 % Valuation allowance 10,961 - 19.8 % 14,959 - 21.9 % Other permanent differences ( 237 ) 0.4 % 285 - 0.4 % Income tax provision (benefit) and effective income tax rate $ 222 - 0.4 % ( 1,063 ) 1.6 % 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, 2023 and 2022. 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 2020 forward and the California returns from 2019 forward are subject to examination. The Company currently is under examination by a state tax authority. 25. 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 $ 2,125 and $ 1,808 for the years ended December 31, 2023 and 2022, respectively. F- 53 26. Related Party Transactions Principal Stockholders The Company has an outstanding obligation with Renew, an affiliated entity of Simplify, where Renew purchased the all the outstanding debt held by BRF Finance Co., LLC (“BRF”) an affiliated entity of B. Riley Financial, Inc. (“B. Riley”) (as further described below), who now holds the debt in its capacity as agent for the purchasers and as purchaser, pursuant to the third amended and restated note purchase agreement entered into on December 15, 2022 (the “Note Purchase Agreement”), as amended by the first amendment to the Note Purchase Agreement on August 14, 2023 (the “First Amendment”) with an effective date of August 31, 2023, as further amended by the second amendment to the Note Purchase Agreement on December 1, 2023 (the “Second Amendment”). The Note Purchase Agreement contains provisions related to the 2023 Notes, Senior Secured Notes, Delayed Draw Term Notes and 2022 Bridge Notes, all as further described above and referred to as the “Notes”. Under the terms of the Note Purchase Agreement, First Amendment and Second Amendment, in the event there is a mandatory prepayment requirement, the principal payment of the Notes will be applied to: (1) the 2023 Notes until paid in full; (2) then to the 2022 Bridge Notes until paid in full; (3) then to the Delayed Draw Terms Notes until paid in full; and (4) then to the Senior Secured Notes. All borrowings under the Notes are collateralized by substantially all assets of the Company secured by liens and guaranteed by the Company’s subsidiaries. The Notes provide for a default interest rate equal to the rate of interest in effect at the time of default plus 4.0%, along with other provision for acceleration of the Notes under certain conditions. The Notes provide for certain affirmative covenants, including certain financial reporting obligations. On November 30, 2023, Simplify entered into a stock purchase and assignment agreement (the “Stock Purchase Agreement”), pursuant to which it purchased an aggregate of 10,512,236 shares of the Company’s common stock for aggregate consideration of $ 30,485 on December 1, 2023 from B. Riley and other affiliated entities of B. Riley and certain other sellers (collectively the “Sellers”), resulting in Simplify becoming a principal stockholder and the Sellers no longer owning any of the Company’s common stock. On November 30, 2023, Renew, an affiliated entity of Simplify and a principal stockholder, and BRF, an affiliate of the Sellers, entered into a securities purchase and assignment agreement (the “Debt Purchase Agreement”), pursuant to which BRF sold and assigned to Renew all of BRF’s rights, duties, liabilities and obligations pursuant to the Note Purchase Agreement, as amended, and the Notes purchased thereunder and the collateral securing such Notes on December 1, 2023 (further details are provided under the heading Arena Loan Agreement in Note 28), resulting in BRF no longer holding any debt securities of the Company. The aggregate principal balance under the Notes was $ 110,691 at the time of purchase by Renew. As of November 30, 2023, Daniel Shribman, Chief Investment Officer of BRF, and Todd Sims, President of B. Riley Venture Capital, a subsidiary of BRF, resigned as members of the Board of the Company. For the years ended December 31, 2023 and 2022, the Company paid in cash interest of $ 9,068 and $ 7,132 , respectively, on the Notes due to BRF, an affiliated of B. Riley, a former principal stockholder. For the year ended December 31, 2023, the Company incurred interest of $ 2,797 for the period from October 1, 2023 to December 31, 2023 on the Notes held by Renew, an affiliated entity of Simplify, a principal stockholder, where the Company defaulted on the payment of $ 2,797 interest due on December 29, 2023. On March 31, 2023, in connection with the registered direct offering, the Company entered into common stock purchase agreements for 1,009,021 shares of the Company’s common stock for a total of $ 3,915 in gross proceeds with B. Riley, a former principal stockholder, at a price per share of $ 3.88 per share. On August 10, 2023, the Series H Preferred Stock automatically converted into shares of the Company’s common stock at the conversion price of $ 7.26 per share, of which 134,550 shares were issued to B. Riley, a former principal stockholder. F- 54 On August 31, 2023, September 29, 2023 and November 27, 2023, in connection with the 2023 Notes, BRF, an affiliated entity of B. Riley, a former principal stockholder, issued $ 5,000 , $ 1,000 and $ 2,000 , respectively, in aggregate principal amount under the 2023 Note, where the Company incurred fees of $ 357 . The Company entered into transactions with B. Riley, a former principal stockholder, where it borrowed funds under the 2022 Bridge Notes of $ 36,000 during the year ended December 31, 2022. For the year ended December 31, 2022, the Company had certain transactions with B. Riley, a former principal stockholder, where it paid fees associated with the common stock public offering totaling $ 2,440 . Registered Direct Offering On March 31, 2023, in connection with the registered direct offering, the Company entered into common stock purchase agreements for 317,518 shares of the Company’s common stock for a total of $ 1,232 in gross proceeds with certain directors and affiliates, at a price of $ 3.88 per share, as follows: (i) 64,000 shares for $ 248 to H. Hunt Allred, a director, through certain trusts ( 32,000 shares are directly beneficially owned by the Allred 2002 Trust - HHA and 32,000 shares are directly beneficially owned by the by Allred 2002Trust - NLA); (ii) 195,529 shares for $ 759 to 180 Degree Capital Corp, a beneficial holder of more than 5% of the Company’s common stock; (iii) 25,773 shares for $ 100 to Daniel Shribman, a former director; (iv) 25,773 shares for $ 100 to Ross Levinsohn, a former director and the Company’s former Chief Executive Officer; and (v) 6,443 shares for $ 25 to Paul Edmonson, an executive officer. 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, Inc., including Paul Edmondson, one of the Company’s officers, and his spouse, an aggregate of 764 shares of the Company’s common stock at a price of $ 88.00 per share each month for a period of 24 months, for aggregate proceeds to Mr. Edmondson and his spouse of $ 67 per month. For year ended December 31, 2022, the Company paid Mr. Edmonson and his spouse $ 269 for 3,056 shares of the Company’s common stock. 27. 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. Further information is provided under the heading Legal Contingencies in Note 28. 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. Royalty Fees – The Company guaranteed minimum annual royalties of $ 15,000 to ABG. The initial term of the minimum guarantee will expire December 31, 2029. Further details are provided under the heading Sports Illustrated Licensing Termination Rights in Note 28. 28. 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- 55 Arena Loan Agreement On January 5, 2024, as part of negotiations with Renew, in connection with the Company’s failure on December 29, 2023 to make the interest payment due on the Arena Loan Agreement, dated December 15, 2022 held by Renew (the “Arena Notes”) in the amount of $ 2,797 , that resulted in an event of default under the Arena Notes (the “Arena Notes Default”), Renew agreed in writing to a forbearance period through March 29, 2024, subject to the Company retaining a chief restructuring officer acceptable to Renew, while reserving its rights and remedies. The outstanding principal on the Arena Notes was $ 110,691 as of December 31, 2023. In addition, while the Company continues discussions with Renew to restructure and/or amend the Arena Notes, the Board engaged, and Renew accepted, FTI Consulting Inc., (“FTI”), a global business advisory firm, to assist the Company with its turnaround plans and forge an expedited path to sustainable positive cash flow and earnings to create shareholder value (the “FTI Engagement”). In connection with the FTI Engagement, Jason Frankl, a senior managing director of FTI, was appointed as the Company’s Chief Business Transformation Officer. He was later appointed as interim President in addition to his role as the Company’s Chief Business Transformation Officer, as referenced below. On March 27, 2024, the forbearance period was extended through the earlier of the following: (a) April 30, 2024 ; (b) the occurrence of the closing of the Business Combination (as further described below) and (c) the termination of the Business Combination prior to closing. Sports Illustrated License Termination Rights On January 2, 2024, the Company failed to make a quarterly payment due to ABG, pursuant to the Licensing Agreement, of $ 3,750 (the “ABG Default”). On January 3, 2024, ABG issued a notice of breach with the intent to exercise its right of termination. On January 18, 2024, ABG notified the Company of its intention to terminate the Licensing Agreement, effective immediately, in accordance with its rights under the Licensing Agreement. Upon such termination, a fee of $ 45,000 became immediately due and payable by the Company to ABG pursuant to the terms and conditions of the Licensing Agreement. On March 18, 2024, ABG announced it had reached an agreement in principle with a third party that will become the new operator of the Sports Illustrated media business. The Company is engaging in continuing discussions with ABG regarding the timing and terms of the transition of the Sports Illustrated media business to this third party. ABG Warrants On January 2, 2024, in connection with the ABG Default, the Performance-Based Warrants totaling 599,724 vested as a result of the default pursuant to certain provisions where all of the warrants automatically vest upon certain terminations of the Licensing Agreement by ABG. Resignation and Appointments On January 3, 2024, the Board appointed Jason Frankl as Chief Business Transformation Officer of the Company, effective immediately, reporting directly to the Board. On January 4, 2024, the Board accepted the resignation of Manoj Bhargava from his position as interim Chief Executive Officer effective immediately. On January 19, 2024, the Company accepted the resignation of Ross Levinsohn, the Company’s former Chief Executive Officer and Chairman of the Board. On January 23, 2024, the Board appointed Jason Frankl as interim President of the Company, effective immediately, reporting directly to the Board. On January 23, 2024, the Board appointed Cavitt Randall as Chairman of the Board, effective immediately. On February 9, 2024, the Board appointed Cavitt Randall as the Company’s Chief Executive Officer, effective February 13, 2024. On February 16, 2024, the Board appointed Manoj Bhargava as the Company’s Co-President, effective immediately. F- 56 Business Combination On February 9, 2024, New Arena Holdco, Inc. (“New Arena”), a wholly owned subsidiary of the Company, filed a Registration Statement on Form S-4 (File No. 333-276999) with the SEC in connection with the Business Combination Agreement by and among the Company, Simplify, Bridge Media Networks, LLC (“Bridge Media”), New Arena and the other parties dated November 5, 2023, as amended on December 1, 2023 (the “Transaction Agreement”), that provides for the Company to combine its operations with those of Bridge Media, a wholly owned subsidiary of Simplify by way of a series of mergers with and among New Arena (the “Mergers”), subject to customary conditions, including the approval by the Company’s shareholders and certain regulatory approvals. Immediately following the Mergers, the Transaction Agreement provides for: (i) the purchase by The Hans Foundation USA, a nonprofit nonstock corporation (the “Hans Foundation”) of 25,000 shares of New Arena Series A Preferred Stock, par value $ 0.0001 per share, at a purchase price of $ 1,000.00 per share, for an aggregate purchase price of $ 25,000 (such amount, the “Preferred Stock Financing Amount,” and such financing, the “Preferred Stock Financing”) pursuant to the subscription agreement, dated as of November 5, 2023 (the “Preferred Stock Subscription Agreement”), by and between New Arena and the Hans Foundation; and (ii) the purchase by 5-Hour International Corporation Pte. Ltd. (“5-Hour”) of 5,000,000 shares of New Arena common stock, par value $ 0.0001 per share at a purchase price of $ 5.00 per share, for an aggregate purchase price of $ 25,000 (such amount, the “Common Stock Financing Amount,” such financing, the “Common Stock Financing”) pursuant to the subscription agreement, dated as of November 5, 2023 (the “Common Stock Subscription Agreement”), by and between New Arena and 5-Hour. Further, concurrently with the closing of the Mergers, pursuant to that certain Committed Equity Facility Term Sheet, dated November 5, 2023, by and between Arena and Simplify (the “Committed Equity Facility Term Sheet”), New Arena will enter into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Simplify, pursuant to which Simplify will agree to purchase, at New Arena’s request, up to $ 20,000 in aggregate purchase price of shares of New Arena common stock from time to time during the 12 months following the closing date at a price per share equal to the lesser of (i) the volume-weighted average price of the New Arena common stock for the last sixty trading days prior to the purchase date and (ii) $ 3.86 per share (the “Equity Line of Credit”), along with New Arena 60,000 shares of New Arena’s common stock as payment of a 1.5 % commitment fee. Immediately following the closing, (i) Simplify will own approximately 79 % of the outstanding shares of New Arena common stock, par value $ 0.0001 per share, on a fully diluted basis, (ii) 5-Hour will own approximately 6 % of the outstanding New Arena common stock and (iii) former Arena stockholders will own the remaining outstanding New Arena common stock. Such amounts exclude the ownership of shares of New Arena common stock that may be issued from time to time pursuant to the Equity Line of Credit. Following the closing, Arena common stock will be delisted from the NYSE American and deregistered under the Securities Exchange Act of 1934, as amended, and cease to be publicly traded. New Arena and its subsidiaries will operate under Arena’s current name “The Arena Group Holdings, Inc.” The Company anticipates that New Arena common stock will be traded on the NYSE American under Arena’s current stock ticker symbol “AREN.” Common Stock Private Placement On February 14, 2024, the Company entered into a subscription agreement (the “Subscription Agreement”) with Simplify, pursuant to which the Company agreed to sell and issue to Simplify in a private placement (the “Private Placement”) an aggregate of 5,555,555 shares (the “Private Placement Shares”) of the Company’s common stock, par value $ 0.01 per share, at a purchase price of $ 2.16 per share, a price equal to the 60-day volume weighted average price of the Company’s common stock. The Private Placement closed on February 14, 2024 and the Company received net proceeds from the Private Placement of approximately $ 12,000 . The Company intends to use the net proceeds from the Private Placement for working capital and general corporate purposes. Prior to the consummation of the Private Placement, the Company’s public stockholders held a majority of the outstanding shares of the Company’s common stock. Following the issuance of the Private Placement Shares to Simplify, Simplify owns approximately 54.5 % of the outstanding shares of the Company’s common stock, resulting in a change in control. As a result, Simplify has the ability to determine the outcome of any issue submitted to the Company’s stockholders for approval, including the election of directors. The funds used by Simplify to purchase the Private Placement Shares came from the working capital of Simplify. F- 57 Arena Credit Agreement Default The Arena Notes Default created an event of cross-default under the Arena Credit Agreement with SLR (the “SLR Default”), resulting in SLR no longer providing for any additional funding under the debt, while paying down the debt with payments received from the Company’s customers in accordance with the terms of the agreement. The Company has refinanced the line of credit with a new credit facility with Simplify (as described below under the heading Simplify Loan ). As of the issuance date of the consolidated financial statements, there was no principal amount due under the Arena Credit Agreement. Fexy Put Option On February 15, 2024, in connection with the contingent consideration related to the acquisition of Fexy Studios, the Company agreed to pay the amount due of $ 2,478 in four (4) equal installments of approximately $ 620 starting February 16, 2024 and then on the 15th day of each March, April and May of 2024 comprised of the following: (i) $2,225 pursuant to the put option where the Company gave the recipients of the contingent consideration a right to put their 274,692 shares of the Company’s common stock; (ii) $200 deferred payment due under the purchase agreement; and (iii) $53 in other costs and reimbursable transition expenses payable. Simplify Loan On March 13, 2024, the Company entered into a working capital loan with Simplify (the “Simplify Loan”), pursuant to which the Company has available up to $ 25,000 at 10 % interest rate per annum. The loan is secured by certain assets of the Company. On closing, the Company borrowed $ 7,748 , of which $ 3,448 was used to repay the outstanding loan balance, accrued interest, certain fees and contingency reserves under the Arena Credit Agreement. Legal Contingencies On January 30, 2024, the former President of Media filed an action against the Company and Manoj Bhargava, alleging claims for breach of contract, failure to pay wages and defamation, among other things, in the United States District Court of the Southern District of New York, and seeking damages in an unspecified amount. The Company believes that it has strong defenses to these claims and intends to vigorously defend itself and the allegations made in this lawsuit. On March 21, 2024, the former CEO and Chairman of the Board filed an action against the Company, members of the Board of directors and Simplify, alleging claims for retaliation, breach of contract, wrongful termination and age discrimination, among other things, in the Superior Court of the State of California seeking damages in an amount of $ 20,000 . The Company believes that it has strong defenses to these claims and intends to vigorously defend itself and the allegations made in this lawsuit. Common Stock From January 1, 2024 through the date these consolidated financial statements were issued, the Company issued 378,292 shares of its common stock as follows: (i) 36,608 shares to members of the Board; (ii) 256,853 shares pursuant to vested restricted stock units that were released; and (iii) 84,831 shares to certain former employees. Compensation Plans From January 1, 2024 through the date these consolidated financial statements were issued, the Company granted common stock options and restricted stock units totaling 22,843 and 222,396 , respectively, to acquire shares of the Company’s common stock to officers, directors, employees and consultants. F- 58