What changed in this filing

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Item 1A. Risk Factors

2025-04-15 compared with 2024-04-01 · 365 added, 302 removed, 389 unchanged (63% of the section changed)

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RELATED TO OUR BUSINESS

If we fail to retain current users or add new users,

or if our users decrease their level of engagement with the Platform, our business would be seriously harmed.

we fail to retain current users or add new users, or if our users decrease their level of engagement with the Platform, our business

would be seriously harmed.

success of our business and our ability to attract and retain advertisers heavily depends on the size of our user base and the level

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fail to maintain our brand image or our reputation is damaged.

license agreement to operate the Sports Illustrated media business was terminated by the licensor, which may materially harm our

business, operating results and financial condition.

connection with our failure to make a quarterly payment due to ABG pursuant to the Licensing Agreement of approximately $3,750,000, on

January 18, 2024, ABG notified us of the termination of the Licensing Agreement, effective immediately, in accordance with its rights

under the Licensing Agreement.

Upon such termination, a fee of $45.0 million became immediately due and payable by us to ABG pursuant

to the terms and conditions of the Licensing Agreement.

In addition, upon termination of the Licensing Agreement, all outstanding and

unvested warrants to purchase shares of Arena common stock issued to ABG in connection with the Licensing Agreement became immediately

vested and exercisable.

March 18, 2024, ABG announced it had reached an agreement in principle with a third party to become the new operator of the Sports

Illustrated media business.

We are engaging in discussions with ABG and the third party regarding the timing and terms of

the transition of the Sports Illustrated media business to the aforementioned third party.

loss of the rights to operate the Sports Illustrated media business, in addition to termination payments that are due following termination

of the Licensing Agreement, could harm our competitiveness in our industry, damage any goodwill we may have generated, and otherwise

have a material adverse effect on our business, operating results and financial condition.

Any subsequent rebranding efforts we may undertake

may require significant resources and expenses and may affect our ability to attract and retain customers, all of which may have a material

adverse effect on our business, contracts, financial condition, operating results, liquidity and prospects.

defaulted on certain covenants included in our debt agreements that could result in the acceleration of the related debt or the

exercise of other remedies.

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 (as described below) (the “Arena Notes Default”).

On January 5, 2024, we entered into a forbearance

agreement (the “Forbearance Agreement”) with Renew Group Private Limited (“Renew”), 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

The forbearance period is subject to us retaining a chief restructuring officer acceptable to Renew.

Also on January 5,

2024, the Company’s board of directors finalized an engagement with 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”).

As part of the FTI Engagement, Jason Frankl, a senior managing director of FTI, was appointed as the Company’s Chief Business

Transformation Officer.

Jason Frankl is a chief restructuring officer

acceptable to Renew.

On March 27, 2024, the forbearance period was extended through the earlier of the following:

(a) April 30,

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.

Arena Notes Default, as well as the Company’s failure to make a quarterly payment due to ABG pursuant to the Licensing

Agreement, resulted in an Event of Default under its credit and security agreement dated February 2020 (as amended, the “Arena

Credit Agreement”) with SLR Digital Finance LLC (“SLR”).

On March 13, 2024 the Company entered into a loan

agreement (the “Arena Loan Agreement”), by and between the Company and Simplify Inventions, LLC (“Simplify”

and in reference to the loan agreement, the “Simplify Loan”), which provides for up to $25 million of borrowings to be

used for working capital and general corporate purposes.

Upon the closing, the Company borrowed approximately $7.7 million, of which

approximately $3.4 million was used to repay the outstanding loan balance, accrued interest, certain fees and contingency reserves

under its Arena Credit Agreement.

The indirect owner of Renew also has an indirect non-controlling interest in Simplify.

under the Arena Loan Agreement are secured by substantially all of our assets.

Upon the termination of the forbearance period under the Forbearance Agreement, Renew can declare

all outstanding borrowings under the Arena Notes, together with accrued and unpaid interest and fees, to be immediately due and

In addition, Simplify could declare all outstanding borrowings under the Arena Loan Agreement together with accrued and

unpaid interest and fees, to be immediately due and payable and, subject to the terms of the intercreditor agreement between Renew

and Simplify, foreclose on our assets.

Any of these actions would have a material adverse effect on our business, financial

condition, or results of operations and could lead to selling assets, cutting costs, reducing cash requirements, filing bankruptcy

or ceasing operations.

license agreement to operate the Sports Illustrated media business was terminated by the licensor, which may materially harm our business,

operating results and financial condition.

described in Note 25, Commitments and Contingencies , to our accompanying consolidated financial statements under Item 8 of

this Annual Report, ABG-SI, LLC (“ABG”) has alleged that we failed to make a quarterly payment due to ABG pursuant to

the Licensing Agreement, dated June 14, 2019, with ABG (“Licensing Agreement”) of approximately $3.8 million, and on

January 18, 2024, ABG notified us of the termination of the Licensing Agreement, effective immediately, in accordance with its

rights under the Licensing Agreement.

As stated in the notice of termination, ABG believes that a fee of $45.0 million became

immediately due and payable by us to ABG pursuant to the terms and conditions of the Licensing Agreement.

In addition, upon

termination of the Licensing Agreement, all outstanding and unvested warrants to purchase shares of Arena common stock issued to ABG

in connection with the Licensing Agreement became immediately vested and exercisable.

On March 18, 2024, ABG announced it had

reached an agreement in principle with a third party to become the new operator of the Sports Illustrated media business.

2024, ABG Group filed an action against us and Manoj Bhargava, the former interim CEO of the Company and a principal stockholder, alleging,

among other things, breach of contract in the United States District Court of the Southern District of New York seeking damages in the

amount of $48.8 million ($3.8 million royalty fee liability and $45.0 million termination fee liability as reflected in current liabilities

from discontinued operations).

See Item 3 of this Annual Report and Note 25, Commitments and Contingencies , to our accompanying

consolidated financial statements under Item 8 of this Annual Report for additional information.

loss of the rights to operate the Sports Illustrated media business, in addition to the alleged and disputed termination payments that

are due following termination of the Licensing Agreement, could harm our competitiveness in our industry, damage any goodwill we may

have generated, and otherwise have a material adverse effect on our business, operating results and financial condition.

Any subsequent

rebranding efforts we may undertake may require significant resources and expenses and may affect our ability to attract and retain customers,

all of which may have a material adverse effect on our business, contracts, financial condition, operating results, liquidity and prospects.

in our current debt obligations or any future indebtedness may limit our discretion in operating our business.

third amended and restated note purchase agreement (the “Third A&R NPA”) is, and any future indebtedness may be, secured

by all or a portion of our assets in which the lenders may have a security interest.

Any security interests that we grant will be set

forth in a security agreement and evidenced by the filing of financing statements by the agent for the lenders.

Any restrictive provision

or negative covenant in the agreements governing our indebtedness, including the Third A&R NPA, our other current debt agreements

or any of our future indebtedness limits or may limit our operating discretion, which could have a material adverse effect on our financial

condition, results of operations and cash flows.

A failure to comply with the restrictive provisions or negative covenants in the Third

A&R NPA, our other current debt agreements, or any of our future indebtedness may result in an event of default and/or restrict our

ability to control the disposition of our assets and our utilization of any indebtedness.

See “Management’s Discussion and

Analysis of Financial Condition and Results of Operations” for more.

Artificial Intelligence (“AI”) technology may negatively impact our ability to attract, engage, and retain audiences;

and monetize our intellectual property;

maintain and grow our revenue streams;

avoid reputational harm;

and involve other risks.

advances in the use of AI may significantly alter the market for our products and services.

These technologies make it easier to access,

duplicate, and distribute our content, or otherwise generate output based on our content, without authorization, fair compensation, or

proper attribution.

These technologies may reduce our online traffic and audience sizes, infringe our intellectual property rights, harm

existing and potential new revenue streams, damage our brand, and adversely affect our business, financial condition, and results of

Our reputation may also be harmed if these technologies wrongly attribute inaccurate information to us.

We seek to limit

such threats;

however, controlling unauthorized use of our content and intellectual property is difficult and preventative measures implemented

by us may not prevent misuse, misattribution, and infringement of our intellectual property.

Although we do not believe these threats

have been material to our businesses to date, we expect to continue to be subject to these threats and, as a result

we may experience a negative impact on our business and financial condition.

market in which we participate is intensely competitive, and if we do not compete effectively, our operating results could be harmed.

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adversely affect our revenues and operating results.

Internet search engines’ algorithms and methodologies are modified, traffic to our content could be reduced and our ability to

attract and retain our audiences could be adversely impacted.

Our search engine optimization capability in connection with audience acquisition efforts substantially depends on

various internet search engines, such as Google, to direct a significant amount of traffic to the content published on the Platform.

are used by these search engines to determine search result listings and the order of such listings displayed in response to specific

Search engines frequently revise their algorithms in an attempt to optimize their search result listings.

Future algorithm changes

by Google or any other search engines could cause content published on the Platform to receive less favorable placements, which could

reduce the number of readers who view this content and impact our ability to effectively serve digital advertisements to our audience.

If we are unable to respond effectively to changes made by search engine providers to their algorithms and other processes, this could

have a material adverse effect on our revenues and operating results.

sales and payment cycle for online advertising is long, and such sales may not occur when anticipated or at all, all of which could adversely

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costs, diversion of development resources and injury to our reputation or damage to our efforts to expand brand awareness.

growing percentage of users whose computers, tablets, or phones do not support identification through third party cookies, mobile

identifiers, or other tracking technologies could adversely affect our business, results of operations, and financial

growing percentage of users whose computers, tablets, or phones do not support identification through third party cookies, mobile identifiers,

or other tracking technologies could adversely affect our business, results of operations, and financial conditions.

rely heavily on our ability to collect and disclose data and metrics in order to attract new advertisers and retain existing advertisers.

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and expand our administrative capabilities.

In the past two years, we have entered into multiple strategic transactions which have significantly

In the past two years, we have entered into strategic transactions which have significantly

expanded our business and placed significant strain on our resources.

To manage any further growth, we will be required to improve existing,

and implement new, operational and financial systems and properly manage our employee base.

If we are unable to manage growth effectively,

our business could be harmed.

To manage any further growth, organically or through further acquisitions,

we will be required to improve existing, and implement new, operational and financial systems and properly manage our employee base.

If we are unable to manage growth effectively, our business could be harmed.

strategic relationships that we may be able to develop and on which we may come to rely may not be successful.

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successfully implement our strategy of building valuable strategic relationships could harm our business.

significant portion of our revenues is derived from a single customer.

If we were to lose this customer, our revenues could decrease

significantly.

the year ended December 31, 2023, approximately 10% of our revenue was derived from sales to a single customer.

The loss of this customer,

or a significant reduction in sales to such customer, could adversely affect our financial condition and operating results.

Interruptions

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rights in the event of a significant disruption of the Platform, which may adversely affect our business and operating results.

Cyber-attacks

and other security threats and disruptions could have a material adverse effect on our business.

a tech-powered media company, we face cybersecurity threats, such as ransomware and denial-of-service, and attacks on technical infrastructure.

Our customers and suppliers face similar cybersecurity threats, and a cybersecurity incident impacting us or any of these entities could

materially adversely affect our operations, performance and results of operations.

sophistication of threats continues to evolve and grow, including the risk associated with the use of emerging technologies, such as

artificial intelligence and quantum computing, for nefarious purposes.

In addition to cybersecurity threats, we face threats to the security

of our systems and employees from terrorist acts, sabotage or other disruptions, any of which could adversely affect our business.

improper conduct of our employees or others working on behalf of us who have access to confidential or sensitive information could also

adversely affect our business and reputation.

Our customers (including sites that we operate for our customers) and suppliers experience

similar security threats.

we are unable to protect sensitive information, including complying with evolving information security, data protection and privacy regulations,

our customers or governmental authorities could investigate the adequacy of our threat mitigation and detection processes and procedures;

and could bring actions against us for noncompliance with applicable laws and regulations.

Moreover, depending on the severity of an

incident, our customers’ data, our employees’ data, our intellectual property (including trade secrets and research, development

and engineering know-how), and other third party data (such as suppliers) could be compromised, which could adversely affect our business.

Products and services we provide to customers also carry cybersecurity risks, including risks that they could be breached or fail to

detect, prevent or combat attacks, which could result in losses to our customers and claims against us, and could harm our relationships

with our customers and financial results.

the persistence, sophistication, volume and novelty of threats we face, we may not be successful in preventing or mitigating an attack

that could have a material adverse effect on us and the costs related to cyber or other security threats or disruptions may not be fully

insured or indemnified by other means.

suppliers face similar security threats and an incident at one of these entities could adversely impact our business.

These entities

are typically outside our control and may have access to our information with varying levels of security and cybersecurity resources,

expertise, safeguards and capabilities.

Adversaries actively seek to exploit security and cybersecurity weaknesses in our supply chain.

Breaches in our supply chain could in the future compromise our data and adversely affect customer deliverables.

We also must rely on

our supply chain for adequately detecting and reporting cyber incidents, which could affect our ability to report or respond to cybersecurity

incidents effectively or in a timely manner.

Failures by our suppliers could result in damages to you and have an adverse effect on our

business and operations.

operate our exclusive coalition of professional-managed online media channels on third party cloud platforms and data center hosting

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Failure of these third party systems

could cause us to render credits or pay penalties or cause our Publisher Partners to terminate their contractual arrangements with

could cause us to render credits or pay penalties or cause our Publisher Partners to terminate their contractual arrangements with us.

are subject to certain standard terms and conditions with Amazon Web Services and Google Cloud, companies which have broad discretion

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employee and third party non-disclosure and invention assignment agreements and other methods to protect our proprietary technology.

Our business, profitability and growth prospects could be adversely affected if we fail to receive adequate protection of our

proprietary rights.

Our business, profitability and growth prospects could be adversely affected if we fail to receive adequate protection of our proprietary

could be required to cease certain activities or incur substantial costs due to claims of infringement of another party’s intellectual

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upon our business and financial results.

are subject to many laws and regulations in the United States and abroad that are constantly evolving and involve matters central

to our business.

are subject to many laws and regulations in the United States and abroad that are constantly evolving and involve matters central to

our business.

are subject or will be subject in the future to myriad constantly evolving laws, statutes and regulations in the United States as well

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information, electronic contracts and other communications, competition, protection of minors, consumer protection, telecommunications,

employee classification, product liability, taxation, economic or other trade prohibitions or sanctions, securities law compliance, and

online payment services, and the related compliance costs.

Our failure to comply with these laws and regulations could adversely affect

our business and cause significant penalties to be imposed on us.

employee classification, product liability, taxation, economic or other trade prohibitions or sanctions (including tariffs), securities

law compliance, and online payment services, and the related compliance costs.

Our failure to comply with these laws and regulations

could adversely affect our business and cause significant penalties to be imposed on us.

particular, the growth and development of Internet content, commerce and communities may prompt more stringent consumer protection, privacy,

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adopted laws may prove difficult and costly for us.

We are subject to risks from changes to regulations,

government funding, trade policies and tariffs imposed by governments that impact our advertising clients.

Changes in regulations, government funding, trade policies and tariffs imposed by the U.S.

and other governments

could have an impact on advertisers and the advertising market.

If advertisers’ operating costs increase due to the changes in policy,

and they are unsuccessful in passing these increases along to consumers, then the advertisers will likely seek to reduce costs in other

ways, including the amount of their advertising.

Additionally, changes in regulations, government funding, trade policies and tariffs

could also have the impact of preventing advertisers from deploying new goods and services and reducing the related advertising dollars.

The recently announced tariffs by the U.S.

government on product imports from certain countries may result in an outsize impact on certain

industries that are key advertising categories for us, including automotive and consumer goods.

The uncertainty regarding the ultimate

impact of any changes in regulations, government funding, trade policies or tariffs could also impact advertisers as they continue to

determine changes needed to their businesses.

Such changes in trade policy or the imposition of tariffs could have a material adverse

effect on our customers’ advertising spend, which could have a material adverse effect on our business, results of operations, and

financial condition.

services involve the storage and transmission of digital information;

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information, litigation liability, regulatory exposure, reputational harm and increased security costs.

and our third party service providers experience attempted cyber-attacks of varying degrees on a regular basis, one of which

infiltrated our systems and accessed a limited amount of our non-financial and encrypted data.

We expect to incur significant,

increasing costs in ongoing efforts to detect and prevent cybersecurity-related incidents.

We cannot ensure that our efforts to

prevent cyber security incidents will succeed.

While we purchase liability coverage for certain of these types of

matters, a significant cybersecurity incident could subject us to reputational harm, loss of revenue, financial liability and other

damage that may exceed our insurance coverage and preclude us from obtaining adequate insurance levels in the future.

and our third party service providers experience attempted cyber-attacks of varying degrees on a regular basis, one of which infiltrated

our systems and accessed a limited amount of our non-financial and encrypted data.

We expect to incur significant, increasing costs in

ongoing efforts to detect and prevent cybersecurity-related incidents.

We cannot ensure that our efforts to prevent cyber security incidents

will succeed.

While we purchase liability coverage for certain of these types of matters, a significant cybersecurity incident could

subject us to reputational harm, loss of revenue, financial liability and other damage that may exceed our insurance coverage and preclude

us from obtaining adequate insurance levels in the future.

or future strategic alliances, long-term investments and acquisitions may have a material and adverse effect on our business, reputation,

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may enter strategic business relationships with third parties to further our business purpose from time to time.

These alliances could subject us

to risks, including risks associated with sharing proprietary information, non-performance by the third party and increased expenses

in establishing new strategic alliances, any of which may materially and adversely affect our business.

We may have limited ability to

monitor or control the actions of these third parties and, to the extent any of these strategic third parties suffer negative publicity

or harm to their reputation from events relating to their business, we may also suffer negative publicity or harm to our reputation by

virtue of our association.

These alliances could

subject us to risks, including risks associated with sharing proprietary information, non-performance by the third party and increased

expenses in establishing new strategic alliances, any of which may materially and adversely affect our business.

We may have limited

ability to monitor or control the actions of these third parties and, to the extent any of these strategic third parties suffer negative

publicity or harm to their reputation from events relating to their business, we may also suffer negative publicity or harm to our reputation

by virtue of our association.

acquisitions and the subsequent integration of new assets and businesses into our own will require significant attention from our management

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acquisitions may be significant.

In addition to, in some cases, having to obtain shareholders’ approval, we may also have to obtain approvals and licenses

from relevant authorities for the acquisitions, which could result in increased delay and costs.

In addition to, in some cases, having to obtain shareholders’ approval, we may also have to obtain

approvals and licenses from relevant authorities for the acquisitions, which could result in increased delay and costs.

products may require availability of components or known technology from third parties and their non-availability can impede our growth.

license/buy certain technology integral to our products from third parties, including open-source and commercially available

Our inability to acquire and maintain any third party product licenses or integrate the related third party products into

our products in compliance with license arrangements, could result in delays in product development until equivalent products can be

identified, licensed and integrated.

We also expect to require new licenses in the future as our business grows and technology

We cannot provide assurance that these licenses will continue to be available to us on commercially reasonable terms, if at

license/buy certain technology integral to our products from third parties, including open-source and commercially available software.

Our inability to acquire and maintain any third party product licenses or integrate the related third party products into our products

in compliance with license arrangements, could result in delays in product development until equivalent products can be identified, licensed

and integrated.

We also expect to require new licenses in the future as our business grows and technology evolves.

We cannot provide

assurance that these licenses will continue to be available to us on commercially reasonable terms, if at all.

business is subject to the risk of catastrophic events such as pandemics, earthquakes, flooding, fire, and power outages, and to interruption

by man-made acts, such as war and terrorism.

business is vulnerable to damage or interruption from pandemics, earthquakes, flooding, fire, power outages, telecommunications

failures, terrorist attacks, acts of war, human errors, break-ins, and similar events.

A significant natural disaster could have a

material adverse effect on our business, results of operations, and financial condition, and our insurance coverage may be

insufficient to compensate us for losses that may occur.

Furthermore, acts of terrorism, which may be targeted at metropolitan areas

that have higher population density than rural areas, could cause disruptions in our or our Publisher Partners’ businesses or

business is vulnerable to damage or interruption from pandemics, earthquakes, flooding, fire, power outages, telecommunications failures,

terrorist attacks, acts of war, human errors, break-ins, and similar events.

A significant natural disaster could have a material adverse

effect on our business, results of operations, and financial condition, and our insurance coverage may be insufficient to compensate

us for losses that may occur.

Furthermore, acts of terrorism, which may be targeted at metropolitan areas that have higher population

density than rural areas, could cause disruptions in our or our Publisher Partners’ businesses or the U.S.

economy as a whole.

Our technology infrastructure may also be vulnerable to computer viruses, break-ins, denial-of-service

attacks, and similar disruptions from unauthorized tampering with our computer systems, which could lead to interruptions, delays

and loss of critical data.

We may not have sufficient protection or recovery plans in some circumstances.

As we rely heavily on our

computer and communications systems and the Internet to conduct our business and provide high-quality user and customer service,

these disruptions could negatively impact our ability to run our business and either directly or indirectly disrupt our Publisher

Partners’ businesses, which could adversely affect our business, results of operations, and financial condition.

with the reporting obligations under the United States securities laws and Section 404 of Sarbanes-Oxley requires expenditure of capital and other resources and may divert management’s attention.

If we fail to comply with these reporting

obligations or to maintain adequate internal controls our operations, and investors’ confidence in us, could be materially and

Our technology infrastructure may also be vulnerable to computer viruses, break-ins, denial-of-service attacks, and similar disruptions

from unauthorized tampering with our computer systems, which could lead to interruptions, delays and loss of critical data.

have sufficient protection or recovery plans in some circumstances.

As we rely heavily on our computer and communications systems and

the Internet to conduct our business and provide high-quality user and customer service, these disruptions could negatively impact our

ability to run our business and either directly or indirectly disrupt our Publisher Partners’ businesses, which could adversely

affect our business, results of operations, and financial condition.

with the reporting obligations under the United States securities laws and Section 404 of Sarbanes-Oxley requires expenditure of

capital and other resources and may divert management’s attention.

If we fail to comply with these reporting obligations or to

maintain adequate internal controls our operations, our business, and investors’ confidence in us, could be materially and

adversely affected.

a public company, we are required to comply with the periodic reporting obligations of the Exchange Act, Sarbanes-Oxley and other applicable

securities rules and regulations, including the preparation of annual reports, quarterly reports, and current reports.

Complying with

these rules and regulations have caused us and will continue to cause us to incur additional legal and financial compliance costs and

make some activities more difficult, time-consuming and costly.

a public company, we are required to comply with the periodic reporting obligations of the Exchange Act, the Sarbanes-Oxley and other

applicable securities rules and regulations.

with these rules and regulations has caused us and will continue to cause us to incur additional legal and financial compliance costs

and make some activities more difficult, time-consuming and costly.

Further, by complying with public disclosure requirements, our business

and financial condition are more visible, which may result in increased threatened or actual litigation.

preparing our financial statements for the year ended December 31, 2022, we identified material weaknesses in our internal control over

financial reporting, which were remediated in 2023 with the implementation of additional controls and procedures.

may in the future discover material weaknesses in other areas of our internal control over financial reporting that require remediation.

discussed in Item 9A of this Annual Report on Form 10-K, in the course of preparing our financial statements, we identified the following

material weaknesses in our internal control over financial reporting (i) our finance and accounting policies, including those governing

revenue recognition, expense recognition, and balance sheet valuation principles and methodologies, have not been fully documented;

(ii) we did not maintain a sufficient system of internal controls to validate data provided by certain third party service providers.

As a result of the identified material weaknesses, our management concluded that our internal control over financial reporting was not

effective as of December 31, 2024.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial

reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will

not be prevented or detected on a timely basis.

The material weaknesses identified in Item 9A of this Annual Report on Form 10-K did

not result in any misstatement of our financial statements.

Our management is currently undertaking remedial actions to address the material

weaknesses identified as of December 31, 2024.

However, we may in the future discover material

weaknesses in other areas of our internal control over financial reporting that require remediation.

cannot assure you that the measures we have taken to date, and actions we may take in the future, will be sufficient to remediate the

control deficiencies that led to the material weaknesses in our internal control over financial reporting or that they will prevent or

avoid potential future material weaknesses.

we fail to timely meet our reporting obligations under the Exchange Act, Sarbanes -Oxley and other applicable securities rules and

regulations in their entirety, we could be subject to penalties under federal securities laws and regulations of the NYSE American

and face lawsuits, and our ability to access financing on favorable terms could be restricted severely.

We will also not be able to

obtain independent accountant certifications required for public companies under Sarbanes-Oxley.

In addition, pursuant to Section

404 of Sarbanes-Oxley, we are required to evaluate and provide a report of management on our internal control over

financial reporting which has, and will continue to, require increased costs, expenses and management resources.

evaluation and testing process of our internal controls, if we identify one or more material weaknesses in our internal control over

financial reporting, we will be unable to certify that our internal control over financial reporting is effective.

We cannot assure

you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the

failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition

or results of operations, cause us to lose investor confidence, prevent us from obtaining capital on favorable terms or at all, and subject

us to sanctions or investigations by the SEC, the NYSE American or other regulatory authorities.

we fail to timely meet our reporting obligations under the Exchange Act, Sarbanes-Oxley and other applicable securities rules and regulations

in their entirety, we could be subject to penalties under federal securities laws and regulations of the NYSE American and face lawsuits,

and we will not be able to obtain independent accountant certifications required for public companies under Sarbanes-Oxley.

or results of operations.

If we are unable to conclude that our internal control over financial reporting is effective, or if our independent

registered public accounting firm determines we have a material weakness or significant deficiency in our internal control over financial

reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our common

stock could decline, and we could be subject to sanctions or investigations by the SEC or other regulatory authorities.

Failure to remedy

any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required

of public companies, could also restrict our future access to the capital markets.

economic and market conditions could adversely affect our business, reputation, and results of operations.

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have a history of losses.

the year ended December 31, 2023, we had net loss of approximately $193.8 million compared to approximately $135.0 million for the year

ended December 31, 2022.

Our accumulated deficit as of December 31, 2023 was approximately $373.1 million.

In fiscal 2023, we had net

loss of approximately $55.6 million compared to approximately $70.9 million in fiscal 2022.

Our accumulated deficit as of December 31,

2022 was approximately $378.7 million.

We may continue to incur losses in the future if we do not achieve sufficient revenue or adequately

reduce costs to achieve and maintain profitability.

There is no assurance that our operations will generate sufficient cash flows to

support our continued operations in the future without needing to seek additional capital funding or borrowings.

We can provide no assurance

that if we need to seek such additional outside capital that it will be available on favorable terms or at all.

Any failure to achieve

and maintain profitability could have a materially adverse effect on our ability to implement our business plan, our results and operations,

and our financial condition.

Our financial

conditions raise substantial doubt about our ability to continue as a “going concern” through one year from the date of the

financial statements contained herein if the Business Combination is not consummated and we are unable to refinance or modify the terms

of the Third A&R NPA and the underlying debt with Renew.

the year ended December 31, 2023, Arena incurred a net loss of $55.6 million.

For year ended December 31, 2023 and year ended December

31, 2022, our cash on hand of $9.3 million and $13.9 million and a working capital deficit of $63.3 million and $137.7 million,

respectively.

Arena’s net loss 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.

a result, management determined there is substantial doubt about Arena’s ability to continue as a going concern for a one-year

period following the financial statement issuance date, unless (i) Arena closes the transactions contemplated by the business

combination agreement by and among the Company, Simplify, Bridge Media Networks, LLC (“Bridge Media”), New Arena Holdco,

Inc (“New Arena”) and the other parties dated November 5, 2023, as amended on December 1, 2023 (the “Business

Combination”) and (ii) Arena is able to refinance or modify the terms of the Third A&R NPA and the underlying debt with

Renew, which is subject to a forbearance period through the earlier of the following:

(a) April 30, 2024, (b) the closing of the

Business Combination, and (c) the termination of the Business Combination, and establishes debt payments that are serviceable by the

Company’s cash flow.

If we are unable to raise additional capital, we may be required to take additional measures to

conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a

potential transaction and reducing overhead expenses.

We cannot provide any assurance that financing sources will be available to us

on commercially acceptable terms or if at all, that our plans to consummate the Business Combination will be successful or the

Company will be able to refinance or modify the terms of the Third A&R NPA and the underlying debt with Renew .

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

the year ended December 31, 2024 ,

we had net loss of approximately $100.7 million compared to approximately $55.6 million for the year ended December 31, 2023.

Our accumulated

deficit as of December 31, 2024 was approximately $479.4 million compared to approximately $378.7 million as of December 31, 2023.

may continue to incur losses in the future if we do not achieve sufficient revenue or adequately reduce costs to achieve and maintain

profitability.

There is no assurance that our operations will generate sufficient cash flows to support our continued operations in the

future without needing to seek additional capital funding or borrowings.

We can provide no assurance that if we need to seek such additional

outside capital that it will be available on favorable terms or at all.

Any failure to achieve and maintain profitability could have

a materially adverse effect on our ability to implement our business plan, our results and operations, and our financial condition.

financial condition raises substantial doubt about our ability to continue as a “going concern” through one year from the

date of the issuance of the financial statements contained herein due to the recurrence of net losses.

the year ended December 31, 2024, we incurred a net loss from continuing operations of approximately $7.7 million, and as of December

31, 2024, had cash on hand of approximately $4.4 million.

Management has evaluated our current and historical net losses from continuing

operations to determine if the significance of those conditions or events would limit our ability to meet our obligations when due, including

under the Loan Documents and Simplify Loan.

In its evaluation, management determined that substantial doubt exists about our ability

to continue as a going concern for a one-year period following the financial statement issuance date due to the net loss from continued

operations and working capital deficit.

can be no assurance that we will be able to execute plans to rectify the recurrence of net losses.

If we are unable to execute these

plans, it could lead to selling assets and further reducing costs and cash requirements.

results of operations may fluctuate significantly and may not meet our expectations or those of securities analysts and investors.

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are likely to fluctuate as well.

Although we have experienced substantial revenue growth, we may not be able to sustain this growth rate

or current revenue levels or achieve profitability.

In addition, because our business is evolving, our historical results of operations

may be of limited utility in assessing our future prospects.

We expect to face challenges, risks, and difficulties frequently experienced

by growing companies in rapidly developing industries, including those relating to:

We may not be able to sustain current growth rates, current revenue levels, or achieve profitability.

In addition, because our business is evolving, our historical results of operations may be of limited utility in assessing our future

We expect to face challenges, risks, and difficulties frequently experienced by growing companies in rapidly developing industries,

including those relating to:

in demand and pricing for our products, services and the Platform;

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example, we could face claims relating to information published or made available on the Platform.

In particular, the nature of our

business exposes us to claims related to defamation, intellectual property rights and rights of publicity and privacy.

be able to monitor or edit a significant portion of the content that appears on the Platform.

This risk is enhanced in certain

jurisdictions outside the United States where our protection from liability for third party actions may be unclear and where we may

be less protected under local laws than we are in the United States.

We could also face fines or orders restricting or blocking our

services in particular geographies as a result of content hosted on our services.

If any of these events occur, our business could

be seriously harmed.

employees are highly experienced, having worked in our industry for many years and prior employers may try to assert that our

employees are breaching restrictive covenants and other limitations imposed by past employment arrangements.

We believe that all of

our employees are free to work for us in their various capacities and have not breached past employment arrangements.

Notwithstanding our care in our employment practices, a prior employer may assert a claim against us.

Such claims can be costly to

contest, disruptive to our work environment, and may be detrimental to our operations and financial results.

insurance may not cover any such claims that rise in the ordinary course of business, may not provide sufficient payments to cover

all the costs to resolve one or more such claims, and may not continue to be available on terms acceptable to us.

In particular, the nature of our business

exposes us to claims related to defamation, intellectual property rights and rights of publicity and privacy.

We might not be able to

monitor or edit a significant portion of the content that appears on the Platform.

This risk is enhanced in certain jurisdictions outside

the United States where our protection from liability for third party actions may be unclear and where we may be less protected under

local laws than we are in the United States.

We could also face fines or orders restricting or blocking our services in particular geographies

as a result of content hosted on our services.

If any of these events occur, our business could be seriously harmed.

employees are highly experienced, having worked in our industry for many years and prior employers may try to assert that our employees

are breaching restrictive covenants and other limitations imposed by past employment arrangements.

We believe that all of our employees

are free to work for us in their various capacities and have not breached past employment arrangements.

Notwithstanding our care in our

employment practices, a prior employer may assert a claim against us.

Such claims can be costly to contest, disruptive to our work environment,

and may be detrimental to our operations and financial results.

insurance may not cover any such claims that rise in the ordinary course of business, may not provide sufficient payments to cover all

the costs to resolve one or more such claims, and may not continue to be available on terms acceptable to us.

A claim brought against

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ability to utilize our net operating loss carryforwards may be limited.

of December 31, 2023, we had federal net operating loss carryforwards, or NOLs, due to prior period losses of $193.8 million, and certain

NOLs could expire before we generate sufficient taxable income to make use of our NOLs.

Subject to certain limitations, NOLs can be used

to offset taxable income for U.S.

of December 31, 2024, we had federal net operating loss carryforwards, or NOLs, due to prior period losses of approximately $210.6 million,

and certain NOLs could expire before we generate sufficient taxable income to make use of our NOLs.

Subject to certain limitations, NOLs

can be used to offset taxable income for U.S.

federal income tax purposes.

However, Section 382 of the Internal Revenue Code of 1986, as amended,

may limit certain NOLs we may use in any year for U.S.

federal income tax purposes in the event of certain changes in ownership of our

If an “ownership change” occurs, Section 382 would impose an annual limit on certain pre-ownership NOLs and other

tax attributes we can use to reduce our taxable income, potentially increasing and accelerating our liability for income taxes, and also

potentially causing those tax attributes to expire unused.

In addition, our ability to use our net operating losses is dependent on our

ability to generate taxable income, and certain net operating losses could expire before we generate sufficient taxable income to make

use of our net operating losses.

However, Section 382 of the Internal Revenue Code of 1986,

as amended, may limit certain NOLs we may use in any year for U.S.

federal income tax purposes in the event of certain changes in ownership

of our Company.

If an “ownership change” occurs, Section 382 would impose an annual limit on certain pre-ownership NOLs and

other tax attributes we can use to reduce our taxable income, potentially increasing and accelerating our liability for income taxes,

and also potentially causing those tax attributes to expire unused.

In addition, our ability to use our net operating losses is dependent

on our ability to generate taxable income, and certain net operating losses could expire before we generate sufficient taxable income

to make use of our net operating losses.

RELATED TO GOVERNANCE AND COMMON STOCK

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the loss of which could adversely affect our business.

are dependent on the continued services and on the performance of our key executive officers, management team, and other key

We also depend on our ability to identify, attract, hire, train, retain, and motivate other highly skilled technical,

managerial, sales, operational, business development, and customer service personnel.

Competition for such personnel is intense, and

there can be no assurance that we will be able to successfully attract, assimilate, or retain sufficiently qualified personnel.

loss or limitation of the services of any of our executive officers, members of our management team, or other key personnel or the

inability to attract and retain additional qualified key personnel, could have a material adverse effect on our business, financial

condition, or results of operations.

are dependent on the continued services and on the performance of our key executive officers, management team, and other key personnel.

We also depend on our ability to identify, attract, hire, train, retain, and motivate other highly skilled technical, managerial, sales,

operational, business development, and customer service personnel.

Competition for such personnel is intense, and there can be no assurance

that we will be able to successfully attract, assimilate, or retain sufficiently qualified personnel.

The loss or limitation of the services

of any of our executive officers, members of our management team, or other key personnel or the inability to attract and retain additional

qualified key personnel, could have a material adverse effect on our business, financial condition, or results of operations.

elimination of monetary liability against our directors, officers, and employees under Delaware law and the existence of indemnification

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lawsuits against our directors, officers, and employees.

Amended and Restated Certificate of Incorporation, as amended (our “Certificate of Incorporation”), and our Second Amended

Amended and Restated Certificate of Incorporation, as amended (our “Certificate of Incorporation”), and our Third Amended

and Restated Bylaws (our “Bylaws”) contain provisions permitting us to eliminate the personal liability of our directors

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will make our common stock less attractive to investors.

the consummation of the Business Combination, we will be a “smaller reporting company,” as defined in Item 10(f)(1) of Regulation

As a smaller reporting company, we are eligible for exemptions from various reporting requirements applicable to other public companies

that are not smaller reporting companies, including, but not limited to reduced disclosure obligations, including with respect to executive

compensation, in our periodic reports, proxy statements, and registration statements.

We will continue to be a smaller reporting company

if either (i) the market value of our stock held by non-affiliates is less than $250 million as of the prior June 30, or (ii) our

annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates

is less than $700 million as of the prior June 30.

We cannot predict if investors will find our common stock less attractive because

we may rely on these exemptions.

are a “smaller reporting company,” as defined in Item 10(f)(1) of Regulation S-K.

As a smaller reporting company, we are

eligible for exemptions from various reporting requirements applicable to other public companies that are not smaller reporting companies,

including, but not limited to reduced disclosure obligations, including with respect to executive compensation, in our periodic reports,

proxy statements, and registration statements.

We will continue to be a smaller reporting company if either (i) the market value of our

stock held by non-affiliates is less than $250 million as of the prior June 30, or (ii) our annual revenue is less than $100 million

during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million as

of the prior June 30.

We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.

in our Certificate of Incorporation and Bylaws and Delaware law may discourage a takeover attempt even if a takeover might be beneficial

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any action asserting

a claim against us arising pursuant to the DGCL, our Certificate of Incorporation, or our Bylaws;

any action to interpret, apply, enforce,

or determine the validity of our Certificate of Incorporation or our Bylaws;

or any action asserting a claim against us that is governed

by the internal affairs doctrine.

This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial

forum that it finds favorable for disputes with us or any of our directors, officers, or other employees, which may discourage lawsuits

with respect to such claims.

Alternatively, if a court were to find the choice of forum provision contained in our restated certificate

of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action

in other jurisdictions, which could harm our business, operating results, and financial condition.

because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law (“DGCL”),

which prohibits an “interested stockholder” owning in excess of 15% of our outstanding voting stock from merging or combining

with us for a period of three years after the date of the transaction in which such stockholder acquired in excess of 15% of our outstanding

voting stock, unless the merger or combination is approved in a prescribed manner.

These provisions could limit the price that certain

investors might be willing to pay in the future for shares of our common stock.

a claim against us arising pursuant to the Delaware General Corporation Law (“DGCL”), our Certificate of Incorporation, or

any action to interpret, apply, enforce, or determine the validity of our Certificate of Incorporation or our Bylaws;

any action asserting a claim against us that is governed by the internal affairs doctrine.

This choice of forum provision may limit a

stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors,

officers, or other employees, which may discourage lawsuits with respect to such claims.

Alternatively, if a court were to find the choice

of forum provision contained in our Certificate of Incorporation to be inapplicable or unenforceable in an action, we may incur additional

costs associated with resolving such action in other jurisdictions, which could harm our business, operating results, and financial condition.

because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the DGCL, which prohibits an “interested

stockholder” owning in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years

after the date of the transaction in which such stockholder acquired in excess of 15% of our outstanding voting stock, unless the merger

or combination is approved in a prescribed manner.

These provisions could limit the price that certain investors might be willing to

pay in the future for shares of our common stock.

for indemnification by our directors and officers may reduce our available funds to satisfy successful third party claims against us

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In addition, Section 145 of the DGCL or our Certificate of Incorporation provides that:

● We indemnify our directors and officers for serving us in those capacities or for serving

other business enterprises at our request, to the fullest extent permitted by Delaware law.

Delaware law provides that a corporation may indemnify such person if such person acted in

good faith and in a manner such person reasonably believed to be in or not opposed to the

best interests of the corporation and, with respect to any criminal action or proceeding,

had no reasonable cause to believe such person’s conduct was unlawful.

indemnify our directors and officers for serving us in those capacities or for serving other

business enterprises at our request, to the fullest extent permitted by Delaware law.

law provides that a corporation may indemnify such person if such person acted in good faith

and in a manner such person reasonably believed to be in or not opposed to the best interests

of the corporation and, with respect to any criminal action or proceeding, had no reasonable

cause to believe such person’s conduct was unlawful.

may, in our discretion, indemnify employees and agents in those circumstances where indemnification

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are required to advance expenses, as incurred, to our directors and officers in connection

with defending a legal proceeding, except that such directors or officers shall undertake to repay

such advances if it is ultimately determined that such person is not entitled to indemnification.

with defending a legal proceeding, except that such directors or officers shall undertake

to repay such advances if it is ultimately determined that such person is not entitled to

indemnification.

rights conferred in our Certificate of Incorporation are not exclusive, and we are authorized

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market price of our common stock.