UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

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

For the quarterly period ended ~~September 30,~~March 31, ~~2022~~2023

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

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

For the transition period from __________ to __________

Commission file number 1-12471

THE ARENA GROUP HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware		68-0232575
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

200 Vesey Street, 24^thFloor New York, New York		10281
(Address of principal executive offices)		(Zip Code)

(212) 321-5002

(Registrant’s telephone number, including area code)

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, ~~$0.01~~ par value $0.01		AREN		NYSE American

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company, ~~(as defined~~” and “emerging growth company” in Rule 12b-2 of the Exchange ~~Act).~~Act.

Large accelerated filer ☐		Accelerated filer ☐ ☒
Non-accelerated filer ☒	☐	Smaller reporting company ☒
		Emerging growth company ☐

If an emerging growth company, indicated by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ or No ☒

As of ~~November 7, 2022,~~May 8, 2023, the Registrant had ~~18,245,040~~21,999,098 shares of common stock outstanding.

TABLE OF CONTENTS

Forward-Looking Statements

This Quarterly Report on Form 10-Q (this “Quarterly Report”) of The Arena Group Holdings, Inc. (the “Company,” “we,” “our,” and “us”) contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements relate to future events or future performance and include, without limitation, statements concerning our business strategy, future revenues, market growth, capital requirements, product introductions, and expansion plans and the adequacy of our funding. Other statements contained in this Quarterly Report that are not historical facts are also forward-looking statements. We have tried, wherever possible, to identify forward-looking statements by terminology such as “may,” “will,” “could,” “should,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” and other stylistic variants denoting forward-looking statements.

We caution investors that any forward-looking statements presented in this Quarterly Report, or that we may make orally or in writing from time to time, are based on information currently available, as well as our beliefs and assumptions. The actual outcome related to forward-looking statements will be affected by known and unknown risks, trends, uncertainties, and factors that are beyond our control or ability to predict. Although we believe that our assumptions are reasonable, they are not guarantees of future performance, and some will inevitably prove to be incorrect. As a result, our actual future results can be expected to differ from our expectations, and those differences may be material. Accordingly, investors should use caution in relying on forward-looking statements, which are based only on known results and trends at the time they are made, to anticipate future results or trends. We detail other risks in our public filings with the Securities and Exchange Commission (the “SEC”), including in Part I, Item 1A., Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022 filed with the SEC on March 31, 2023. The discussion in this Quarterly Report should be read in conjunction with the condensed consolidated financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report and our consolidated financial statements and notes thereto included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

This Quarterly Report and all subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances after the date of this Quarterly Report except as may be required by law.

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL INFORMATION

THE ARENA GROUP HOLDINGS, INC. AND SUBSIDIARIES

Index to Condensed Consolidated Financial Statements

	PAGE
Condensed Consolidated Balance Sheets ~~– September 30, 2022~~- March 31, 2023 (Unaudited) and December 31, ~~2021~~2022	5
Condensed Consolidated Statements of Operations (Unaudited) - Three Months Ended March 31, 2023 and ~~Nine Months Ended September 30,~~ 2022 ~~and 2021~~	6
Condensed Consolidated Statements of Stockholders’ Deficiency (Unaudited) - ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~	7
Condensed Consolidated Statements of Cash Flows (Unaudited) - ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~	108
Notes to Condensed Consolidated Financial Statements (Unaudited)	119

THE ARENA GROUP HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30, 2022
(unaudited)
December 31, 2021
($ in thousands, except share data)
Assets
Current assets:
Cash and cash equivalents $ 13,303 $ 9,349
Restricted cash 502 502
Accounts receivable, net 33,662 21,660
Subscription acquisition costs, current portion 22,800 30,162
Royalty fees - 11,250
Prepayments and other current assets 3,978 4,748
Total current assets 74,245 77,671
Property and equipment, net 793 636
Operating lease right-of-use assets 415 528
Platform development, net 10,339 9,299
Subscription acquisition costs, net of current portion 7,497 8,235
Acquired and other intangible assets, net 51,155 57,356
Other long-term assets 564 639
Goodwill 22,554 19,619
Total assets $ 167,562 $ 173,983
Liabilities, mezzanine equity and stockholders’ deficiency
Current liabilities:
Accounts payable $ 11,746 $ 11,982
Accrued expenses and other 22,354 24,011
Line of credit 18,474 11,988
Unearned revenue 51,683 54,030
Subscription refund liability 837 3,087
Operating lease liabilities 413 374
Liquidated damages payable 5,836 5,197
Current portion of long-term debt 5,899 5,744
Total current liabilities 117,242 116,413
Unearned revenue, net of current portion 11,491 15,277
Operating lease liabilities, net of current portion 471 785
Liquidating damages payable, net of current portion - 7,008
Other long-term liabilities 3,771 7,556
Deferred tax liabilities 403 362
Long-term debt 65,433 64,373
Total liabilities 198,811 211,774
Commitments and contingencies (Note 16) -
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 September 30, 2022 and December 31, 2021 168 168
Series H convertible preferred stock, $0.01 par value, $1,000 per share liquidation value and 23,000 shares designated; aggregate liquidation value: $14,556 and $15,066; Series H shares issued and outstanding: 14,556 and 15,066; common shares issuable upon conversion: 2,008,728 and 2,075,200 at September 30, 2022 and December 31, 2021, respectively 13,207 13,718
Total mezzanine equity 13,375 13,886
Stockholders’ deficiency:
Common stock, $0.01 par value, authorized 1,000,000,000 shares; issued and outstanding: 18,149,622 and 12,632,947 shares at September 30, 2022 and December 31, 2021, respectively 182 126
Common stock to be issued - -
Additional paid-in capital 264,568 200,410
Accumulated deficit (309,374 ) (252,213 )
Total stockholders’ deficiency (44,624 ) (51,677 )
Total liabilities, mezzanine equity and stockholders’ deficiency $ 167,562 $ 173,983

March 31, 2023
(unaudited)
December 31, 2022
($ in thousands, except share data)
Assets
Current assets:
Cash and cash equivalents $ 15,961 $ 13,871
Restricted cash 502 502
Accounts receivable, net 23,561 33,950
Subscription acquisition costs, current portion 31,908 25,931
Prepayments and other current assets 12,037 4,441
Total current assets 83,969 78,695
Property and equipment, net 565 735
Operating lease right-of-use assets 327 372
Platform development, net 10,189 10,330
Subscription acquisition costs, net of current portion 12,460 14,133
Acquired and other intangible assets, net 54,844 58,970
Other long-term assets 1,025 1,140
Goodwill 41,329 39,344
Total assets $ 204,708 $ 203,719
Liabilities, mezzanine equity and stockholders’ deficiency
Current liabilities:
Accounts payable $ 15,458 $ 12,863
Accrued expenses and other 21,467 23,102
Line of credit 9,559 14,092
Unearned revenue 60,584 58,703
Subscription refund liability 940 845
Operating lease liability 442 427
Contingent consideration 1,060 -
Liquidated damages payable 5,970 5,843
Bridge notes 35,433 34,805
Term debt 65,932 65,684
Total current liabilities 216,845 216,364
Unearned revenue, net of current portion 21,234 19,701
Operating lease liability, net of current portion 242 358
Liquidated damages payable, net of current portion 124 494
Other long-term liabilities 5,314 5,307
Deferred tax liabilities 472 465
Total liabilities 244,231 242,689
Commitments and contingencies (Note 18) - -
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 March 31, 2023 and December 31, 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: $14,356; Series H shares issued and outstanding: 14,356; common shares issuable upon conversion: 1,981,128 at March 31, 2023 and December 31, 2022 13,008 13,008
Total mezzanine equity 13,176 13,176
Stockholders’ deficiency:
Common stock, $0.01 par value, authorized 1,000,000,000 shares; issued and outstanding: 21,773,078 and 18,303,193 shares at March 31, 2023 and December 31, 2022, respectively 217 182
Common stock to be issued - -
Additional paid-in capital 289,532 270,743
Accumulated deficit (342,448 ) (323,071 )
Total stockholders’ deficiency (52,699 ) (52,146 )
Total liabilities, mezzanine equity and stockholders’ deficiency $ 204,708 $ 203,719
See accompanying notes to condensed consolidated financial ~~statements~~statements.

5
THE ARENA GROUP HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
2023 2022
Three Months Ended March 31,
2023 2022
($ in thousands, except per share data)
Revenue $ 51,380 $ 48,243
Cost of revenue (includes amortization of platform development and developed technology for 2023 and 2022 of $2,369 and $2,311, respectively) 30,035 28,497
Gross profit 21,345 19,746
Operating expenses
Selling and marketing 17,969 17,216
General and administrative 13,053 13,514
Depreciation and amortization 4,766 4,202
Loss on impairment of assets 119 257
Total operating expenses 35,907 35,189
Loss from operations (14,562 ) (15,443 )
Other expenses
Change in fair value of contingent consideration (499 ) -
Interest expense (4,182 ) (2,820 )
Liquidated damages (127 ) (172 )
Total other expenses (4,808 ) (2,992 )
Loss before income taxes (19,370 ) (18,435 )
Income tax provision (7 ) (14 )
Net loss $ (19,377 ) $ (18,449 )
Basic and diluted net loss per common share $ (1.04 ) $ (1.20 )
Weighted average number of common shares outstanding – basic and diluted 18,718,555 15,381,306
See accompanying notes to condensed consolidated financial statements.
6

THE ARENA GROUP HOLDINGS, INC. AND SUBSIDIARIES
~~CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS~~
~~(unaudited)~~

2022 2021 2022 2021

Three Months Ended
September 30,

Nine Months Ended
September 30,

2022 2021 2022 2021
($ in thousands, except share data)
Revenue $ 66,706 $ 59,575 $ 180,024 $ 127,936
Cost of revenue (includes amortization of developed technology and platform development for three months ended 2022 and 2021 of $2,413 and $2,242, respectively and for the nine months ended 2022 and 2021 of $7,099 and $6,566, respectively) 40,504 32,215 115,730 83,264
Gross profit 26,202 27,360 64,294 44,672
Operating expenses
Selling and marketing 20,103 22,892 56,626 54,232
General and administrative 13,847 14,557 43,325 37,587
Depreciation and amortization 4,478 4,055 13,124 11,982
Loss on lease termination - 7,345 - 7,345
Loss on impairment of assets 209 904 466 904
Total operating expenses 38,637 49,753 113,541 112,050
Loss from operations (12,435 ) (22,393 ) (49,247 ) (67,378 )
Other (expense) income
Change in valuation of warrant derivative liabilities - 802 - 497
Interest expense, net (3,184 ) (2,512 ) (8,510 ) (7,695 )
Liquidated damages (339 ) (834 ) (639 ) (2,198 )
Gain upon debt extinguishment - - - 5,717
Total other (expense) income (3,523 ) (2,544 ) (9,149 ) (3,679 )
Loss before income taxes (15,958 ) (24,937 ) (58,396 ) (71,057 )
Income taxes (547 ) 230 1,235 230
Net loss $ (16,505 ) $ (24,707 ) $ (57,161 ) $ (70,827 )
Basic and diluted net loss per common share $ (0.90 ) $ (2.15 ) $ (3.30 ) $ (6.38 )
Weighted average number of common shares outstanding – basic and diluted 18,284,670 11,491,412 17,339,882 11,100,416
~~See accompanying notes to condensed consolidated financial statements.~~
6
~~THE ARENA GROUP HOLDINGS, INC. AND SUBSIDIARIES~~
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIENCY
(unaudited)

Three ~~and Nine~~ Months Ended ~~September 30, 2022~~March 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 per 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 the acquisition of Fexy Studios 274,692 3 - - 1,997 - 2,000
Issuance of common stock in connection with settlement of liquidated damages 35,486 - - - 324 - 324
Gain upon issuance of common stock in connection with settlement of liquidated damages - - - - 46 - 46
Issuance of common stock for restricted stock units 397,376 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 registered direct offering 2,963,918 30 - - 11,181 - 11,211
Reclassification to liability upon modification of common stock option - - - - (68 ) - (68 )
Stock-based compensation - - - - 6,734 - 6,734
Issuance of common stock upon conversion of Series H convertible preferred stock
Issuance of common stock upon conversion of Series H convertible preferred stock, shares
Issuance of common stock for restricted stock units in connection with an acquisition
Issuance of common stock for restricted stock units in connection with an acquisition, shares
Issuance of common stock in connection with professional services
Issuance of common stock in connection with professional services, shares
Repurchase restricted stock classified as liabilities
Repurchase restricted stock classified as liabilities, shares
Issuance of common stock in connection with public offering
Issuance of common stock in connection with public offering, shares
Net loss - - - - - (19,377 ) (19,377 )
Balance at March 31, 2023 21,773,078 $ 217 41,283 $ - $ 289,532 $ (342,448 ) $ (52,699 )
Shares Par Value Shares Par Value Paid-in Capital Accumulated Deficit Stockholders’ Deficiency
Common Stock Common Stock to be Issued Additional Total
Shares Par Value Shares Par Value Paid-in Capital Accumulated Deficit Stockholders’ Deficiency
($ in thousands, except share data)
Balance at June 30, 2022 17,827,526 $ 178 41,283 $ - $ 258,727 $ (292,869 ) $ (33,964 )
Issuance of common stock for restricted stock units 541,719 5 - - (5 ) - -
Issuance of common stock upon exercise (including cashless exercise) of stock options 38,152 - - - 94 - 94
Common stock withheld for taxes (257,775 ) (1 ) - - (2,963 ) - (2,964 )
Stock-based compensation - - - - 8,715 - 8,715
Net loss - - - - - (16,505 ) (16,505 )
Balance at September 30, 2022 18,149,622 $ 182 41,283 $ - $ 264,568 $ (309,374 ) $ (44,624 )
Common Stock Common Stock to be Issued Additional Total
Shares Par Value Shares Par Value Paid-in Capital Accumulated Deficit Stockholders’ Deficiency
($ in thousands, except share data)
Balance at January 1, 2022 12,632,947 $ 126 49,134 $ - $ 200,410 $ (252,213 ) $ (51,677 )
Issuance of common stock upon conversion of Series H convertible preferred stock 70,380 1 - - 510 - 511
Issuance of common stock for restricted stock units in connection with an acquisition 16,760 - - - - - -
Issuance of common stock in connection with professional services 14,617 - - - 184 - 184
Issuance of common stock in connection with settlement of liquidated damages 505,671 5 - - 6,680 - 6,685
Gain upon issuance of common stock in connection with settlement of liquidated damages - - - - 323 - 323
Issuance of common stock for restricted stock units 718,530 7 - - (7 ) - -
Issuance of common stock upon cashless exercise of stock options 20 - - - - - -
Common stock withheld for taxes (324,798 ) (2 ) - - (3,518 ) - (3,520 )
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
Issuance of common stock in connection with the acquisition of Athlon 314,103 3 - - 3,138 - 3,141
Issuance of common stock upon exercise (including cashless exercise) of stock options 38,152 - - - 94 - 94
Issuance of common stock in connection with Say Media merger 7,851 - (7,851 ) - - - -
Stock-based compensation - - - - 26,306 - 26,306
Net loss - - - - - (57,161 ) (57,161 )
Balance at September 30, 2022 18,149,622 $ 182 41,283 $ - $ 264,568 $ (309,374 ) $ (44,624 )
7
~~THE ARENA GROUP HOLDINGS, INC. AND SUBSIDIARIES~~
~~CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIENCY~~
~~(unaudited)~~

Three ~~and Nine~~ Months Ended ~~September 30, 2021~~
Common Stock Common Stock to be Issued Additional Total
Shares Par Value Shares Par Value Paid-in Capital Accumulated Deficit Stockholders’ Deficiency
($ in thousands, except share data)
Balance at June 30, 2021 11,962,537 $ 119 49,134 $ - $ 175,837 $ (208,393 ) $ (32,437 )
Issuance of common stock upon conversion of Series H convertible preferred stock 6,888 - - - 50 - 50
Issuance of restricted stock in connection with the acquisition of Fulltime Fantasy 34,091 - - - 502 - 502
Issuance of common stock for restricted stock units 22,728 - - - - - -
Forfeiture of unvested restricted stock awards (6,844 ) - - - - - -
Common stock withheld for taxes (2,130 ) - - - (29 ) - (29 )
Stock-based compensation - - - - 8,962 - 8,962
Net loss - - - - - (24,707 ) (24,707 )
Balance at September 30, 2021 12,017,270 $ 119 49,134 $ - $ 185,322 $ (233,100 ) $ (47,659 )
8
~~THE ARENA GROUP HOLDINGS, INC. AND SUBSIDIARIES~~
~~CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIENCY~~
~~(unaudited)~~March 31, 2022

~~Three and Nine Months Ended September 30, 2021~~
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 per share data)
Balance at January 1, 2022 12,635,591 $ 126 49,134 $ - $ 200,410 $ (252,213 ) $ (51,677 )
Beginning balance, value 12,635,591 $ 126 49,134 $ - $ 200,410 $ (252,213 ) $ (51,677 )
Issuance of common stock upon conversion of Series H convertible preferred stock 70,380 1 - - 510 - 511
Issuance of common stock for restricted stock units in connection with an acquisition 16,760 - - - - - -
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 for restricted stock units 155,211 2 - - (2 ) - -
Common stock withheld for taxes (67,023 ) (1 ) - - (555 ) - (556 )
Repurchase restricted stock classified as liabilities (8,064 ) - - - - - -
Issuance of common stock in connection with public offering 4,181,603 42 - - 30,448 - 30,490
Stock-based compensation - - - - 8,054 - 8,054
Net loss - - - - - (18,449 ) (18,449 )
Balance at March 31, 2022 17,504,730 $ 175 49,134 $ - $ 246,052 $ (270,662 ) $ (24,435 )
Ending balance, value 17,504,730 $ 175 49,134 $ - $ 246,052 $ (270,662 ) $ (24,435 )
Common Stock Common Stock to be Issued Additional Total
Shares Par Value Shares Par Value Paid-in Capital Accumulated Deficit Stockholders’ Deficiency
($ in thousands, except share data)
Balance at January 1, 2021 10,412,963 $ 104 49,134 $ - $ 141,856 $ (162,273 ) $ (20,313 )
Issuance of restricted stock awards to the board of directors 40,334 - - - - - -
Repurchase restricted stock classified as liabilities (12,098 ) - - - - - -
Issuance of common stock for restricted stock units in connection with an acquisition 11,667 - - - - - -
Issuance of common stock in connection with professional services 14,205 - - - 125 - 125
Issuance of restricted stock in connection with the acquisition of The Spun 194,806 2 - - (2 ) - -
Issuance of common stock upon cashless exercise of stock options 3,859 - - - - - -
Common stock withheld for taxes (4,356 ) - - - (70 ) - (70 )
Issuance of common stock in connection with private placement 1,299,027 13 - - 19,825 - 19,838
Issuance of common stock upon conversion of series H preferred stock 6,888 - - - 50 - 50
Issuance of restricted stock in connection with the acquisition of Fulltime Fantasy 34,091 - - - 502 - 502
Issuance of common stock for restricted stock units 22,728 - - - - - -
Forfeiture on unvested restricted stock awards (6,844 ) - - - - - -
Stock-based compensation - - - - 23,036 - 23,036
Net loss - - - - - (70,827 ) (70,827 )
Balance at September 30, 2021 12,017,270 $ 119 49,134 $ - $ 185,322 $ (233,100 ) $ (47,659 )

See accompanying notes to condensed consolidated financial statements.
97
THE ARENA GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
2022 2021
Nine Months Ended September 30,
2022 2021
($ in thousands)
Cash flows from operating activities
Net loss $ (57,161 ) $ (70,827 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment 395 334
Amortization of platform development and intangible assets 19,828 18,214
Gain upon debt extinguishment - (5,717 )
Loss on termination of lease - 7,345
Amortization of debt discounts 1,215 1,534
Loss on impairments of assets 466 904
Change in valuation of warrant derivative liabilities - (497 )
Noncash and accrued interest 86 5,273
Liquidated damages 639 2,198
Stock-based compensation 24,777 21,689
Deferred income taxes (1,235 ) (230 )
Other 468 (1,060 )
Change in operating assets and liabilities net of effect of business combination:
Accounts receivable (1,385 ) (173 )
Subscription acquisition costs 8,100 (8,434 )
Royalty fees 11,250 11,250
Prepayments and other current assets 2,107 (78 )
Other long-term assets 75 639
Accounts payable (7,652 ) 1,215
Accrued expenses and other (3,390 ) 5,566
Unearned revenue (7,382 ) 5,389
Subscription refund liability (2,250 ) 344
Operating lease liabilities (162 ) (2,448 )
Other long-term liabilities (3,465 ) (692 )
Net cash used in operating activities (14,676 ) (8,262 )
Cash flows from investing activities
Purchases of property and equipment (444 ) (300 )
Capitalized platform development (3,990 ) (3,017 )
Proceeds from sale of equity investment 2,450 -
Payments for acquisition of business, net of cash acquired (10,331 ) (7,357 )
Net cash used in investing activities (12,315 ) (10,674 )
Cash flows from financing activities
Borrowings (repayments) under line of credit 6,486 (473 )
Proceeds from common stock public offering, net of offering costs 32,058 -
Payments of issuance costs from common stock public offering (1,568 ) -
Net exercise of common stock options 94 -
Payment of The Spun deferred cash payment (453 ) -
Proceeds from common stock private placement - 20,005
Payments of issuance costs from common stock private placement - (167 )
Payment for taxes related to repurchase of restricted common stock (3,520 ) (70 )
Payment of restricted stock liabilities (2,152 ) (1,165 )
Net cash provided by financing activities 30,945 18,130
Net increase (decrease) in cash, cash equivalents, and restricted cash 3,954 (806 )
Cash, cash equivalents, and restricted cash – beginning of period 9,851 9,535
Cash, cash equivalents, and restricted cash – end of period $ 13,805 $ 8,729
Cash, cash equivalents, and restricted cash
Cash and cash equivalents $ 13,303 $ 8,228
Restricted cash 502 501
Total cash, cash equivalents, and restricted cash $ 13,805 $ 8,729
Supplemental disclosure of cash flow information
Cash paid for interest $ 7,209 $ 902
Cash paid for income taxes - -
Noncash investing and financing activities
Reclassification of stock-based compensation to platform development $ 1,529 $ 1,347
Restricted stock issued in connection with acquisition of Fulltime Fantasy - 503
Deferred cash payments in connection with acquisition of Fulltime Fantasy - 419
Issuance of common stock in connection with settlement of liquidated damages 7,008 -
Issuance of common stock in connection with professional services - 125
Common stock issued in connection with acquisition of Athlon 3,141 -
Deferred cash payments in connection with acquisition of Athlon 949 -
Assumption of liabilities in connection with acquisition of Athlon 11,602 -
Deferred cash payments in connection with acquisition of The Spun - 905
Assumption of liabilities in connection with acquisition of The Spun - 2
Conversion of Series H convertible preferred stock into common stock 511 -
2023 2022
Three Months Ended March 31,
2023 2022
($ in thousands)
Cash flows from operating activities
Net loss $ (19,377 ) $ (18,449 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment 114 114
Amortization of platform development and intangible assets 7,021 6,399
Amortization of debt discounts 930 660
Loss on impairment of assets 119 257
Change in fair value of contingent consideration 499 -
Liquidated damages 127 172
Stock-based compensation 6,427 7,367
Deferred income taxes 7 14
Bad debt expense 36 183
Change in operating assets and liabilities net of effect of business combination:
Accounts receivable 10,303 1,594
Subscription acquisition costs (4,304 ) 6,150
Royalty fees - 3,750
Prepayments and other current assets (7,596 ) (224 )
Other long-term assets 61 52
Accounts payable 2,595 (4,912 )
Accrued expenses and other (2,144 ) (7,444 )
Unearned revenue 3,464 (8,358 )
Subscription refund liability 95 (553 )
Operating lease liabilities (56 ) (54 )
Other long-term liabilities 7 (29 )
Net cash used in operating activities (1,672 ) (13,311 )
Cash flows from investing activities
Purchases of property and equipment - (71 )
Capitalized platform development (1,188 ) (1,582 )
Payments for acquisition (500 ) -
Net cash used in investing activities (1,688 ) (1,653 )
Cash flows from financing activities
Repayments under line of credit, net borrowing (4,533 ) (2,697 )
Proceeds from common stock from registered direct offering 11,500 -
Payments of offering cost from common stock from registered direct offering (69 ) -
Proceeds from issuance of common stock from public offering, net of offering cost - 32,058
Payment of taxes from common stock withheld (1,423 ) (556 )
Payment of deferred cash payments (25 ) -
Payment of restricted stock liabilities - (710 )
Net cash provided by financing activities 5,450 28,095
Net increase in cash, cash equivalents, and restricted cash 2,090 13,131
Cash, cash equivalents, and restricted cash – beginning of period 14,373 9,851
Cash, cash equivalents, and restricted cash – end of period $ 16,463 $ 22,982
Cash, cash equivalents, and restricted cash
Cash and cash equivalents $ 15,961 $ 22,480
Restricted cash 502 502
Total cash, cash equivalents, and restricted cash $ 16,463 $ 22,982
Supplemental disclosure of cash flow information
Cash paid for interest $ 3,252 $ 2,160
Cash paid for income taxes - -
Noncash investing and financing activities
Reclassification of stock-based compensation to platform development $ 307 $ 687
Offering costs included in accrued expenses and other 220 1,568
Issuance of common stock in connection with settlement of liquidated damages 370 7,008
Issuance of common stock upon conversion of Series H convertible preferred stock - 511
Issuance of common stock issued in connection with an acquisition 2,000 -
Deferred cash payments recorded in connection with acquisitions 246 -
Reclassification to liability upon common stock modification 68 -

See accompanying notes to condensed consolidated financial statements.

108

THE ARENA GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
($ in thousands, unless otherwise stated)
1.Summary of Significant Accounting Policies
1. ~~Summary of Significant Accounting Policies~~

Basis of Presentation

The condensed consolidated financial statements include the accounts of The Arena Group Holdings, Inc. (formerly known as TheMaven, Inc.) and its wholly owned subsidiaries (“The Arena Group” or the “Company”), after eliminating all significant intercompany balances and transactions. The Company ~~does not have any material off-balance sheet arrangements. The Company~~ changed its ~~corporate~~legal name to The Arena Group Holdings, Inc. from TheMaven, Inc. on February 8, 2022.

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete audited financial statements. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements, which are included in The Arena Group’s Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, filed with the SEC ~~as of April 1, 2022.~~on March 31, 2023.

The condensed consolidated financial statements as of ~~September 30, 2022,~~March 31, 2023, and for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ are unaudited but, in management’s opinion, include all adjustments necessary for a fair presentation of the results of interim periods. All such adjustments are of a normal recurring nature. The year-end condensed consolidated balance sheet as of December 31, ~~2021,~~2022, was derived from audited financial statements, but does not include all disclosures required by GAAP. The results of operations for interim periods are not necessarily indicative of the results to be expected for the entire fiscal year.

The ~~novel coronavirus (“COVID-19”) pandemic impacted~~Company is subject to continuing risks and uncertainties in connection with the ~~Company less during the third quarter~~current macroeconomic environment, including as a result of ~~2022 than it did in 2021. During the initial onset of COVID-19, the Company faced significant change in its advertisers’ buying behavior. Since May 2020, however, there has been a steady recovery~~inflation, increasing interest rates or foreign exchange rates, instability in the ~~advertising market in both pricing~~global banking system, geopolitical factors, including the ongoing Ukraine – Russia conflict, supply chain disruptions and ~~volume. This, coupled with~~ the ~~return~~ongoing effects of ~~professional and college sports, has yielded steady growth in revenues in 2020 as compared to 2021.~~the COVID-19 pandemic. Given that certain of ~~our~~the Company’s sports businesses rely on sporting events to generate content and ~~comprises~~comprise a material portion of the Company’s revenues, the Company’s cash flows and results of operations could be negatively impacted by a ~~widespread cancellation of~~significant downturn in economic activity, or general spending on sporting events or a general limitation of societal activity, ~~akin~~due to ~~what occurred in the Unites States and elsewhere during 2020 and, to a lesser extent, during 2021.~~market conditions, economic uncertainty or recession.

The Company operates in one reportable segment.

Reverse Stock Split
On February 8, 2022, the Company’s board of directors (the “Board”) approved ~~The Company effected~~ a ~~1-for-22~~one-for-twenty-two (1-for-22) reverse stock split as of ~~February 9, 2022. The condensed consolidated financial statements and the notes thereto give effect to such reverse stock split for all periods presented. The~~its outstanding shares of common stock ~~retained~~that was effective February 8, 2022. The Company’s common stock began trading on the NYSE American (the “NYSE American”) on February 9, 2022. 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 ~~par value~~result 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. Any fractional shares that would otherwise ~~be issued as a result of~~have resulted from the reverse stock split were rounded up to the ~~nearest~~next whole ~~share.~~number.

119

Going Concern
The Company’s condensed 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 condensed consolidated financial statements do not include any adjustments that might be necessary if it is unable to continue as a going concern.
For the three months ended March 31, 2023, the Company incurred a net loss of $19,377. For the three months ended March 31, 2023 and year ended December 31, 2022, the Company had cash on hand of $15,961 and $13,871 and a working capital deficit of $132,876 and $137,669, respectively. The Company’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. Furthermore, since the Company’s Bridge Notes of $36,000, Senior Secured Notes of $62,691 and Delayed Draw Term Notes of $4,000, totaling $102,691 (collectively “its current debt”) are due within twelve months from the date these (unaudited) condensed consolidated financial statements were issued, unless the Company is able to refinance or extend its current debt beyond its current maturity, it may not be able to meet its obligations when due.
As a result, management determined there is substantial doubt about the Company’s ability to continue as a going concern for a one-year period following the financial statement issuance date, unless it is able to refinance or extend the maturities of its current debt.
The Company plans to refinance or extend the maturities of its current debt to alleviate the conditions that raise substantial doubt about its ability to continue as a going concern, however, there can be no assurance that the Company will be able to refinance or extend the maturities of its current debt.
Use of Estimates

Preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, the Company evaluates its estimates, including those related to the allowance for credit losses, fair values of financial instruments, capitalization of platform development, intangible assets and goodwill, useful lives of intangible assets and property and equipment, income taxes, fair value of assets acquired and liabilities assumed in ~~the~~ business acquisitions, determination of the fair value of stock-based compensation and valuation of derivatives liabilities and contingent liabilities, among others. The Company bases its estimates on assumptions, both historical and forward looking, that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

Recently Adopted Accounting Standards

In ~~August 2020,~~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 ~~2020-06,~~ ~~Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40)~~~~, which updates various codification topics to simplify~~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 ~~instruments with characteristics~~difficulty. This update requires an entity to disclose current-period gross write-offs for financing receivables and net investment in leases by year of ~~liabilities and equity, with a specific focus~~origination in the vintage disclosures. As the Company has already adopted ASU 2016-13, the new guidance was adopted on ~~convertible instruments and the derivative scope exception for contracts in an entity’s own equity and amends the diluted earnings per share computation for these instruments. On~~ January 1, ~~2022, the Company adopted~~2023. The adoption of ASU ~~2020-06 with no~~2022-02 did not have a material impact ~~to its~~on the Company’s condensed consolidated financial ~~position, results of operations or cash flows.~~statements.

~~In May 2021, the FASB issued ASU 2021-04,~~ Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options, a consensus of the Emerging Issues Task Force (EITF), to provide explicit guidance on accounting by issuers for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after the modification or exchange. On January 1, 2022, the Company adopted ASU 2021-04 with no material impact to its condensed consolidated financial position, results of operations, cash flows or disclosures.
~~In October 2021, the FASB issued ASU 2021-08,~~ ~~Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers~~, which requires an acquirer to account for revenue contracts acquired in a business combination in accordance with Topic 606 as if it had originated the contracts. The acquirer may assess how the acquiree applied Topic 606 to determine what to record for the acquired contracts. This update should lead to recognition and measurement consistent with what’s reported in the acquiree’s financial statements, provided that the acquiree prepared financial statements in accordance with GAAP. The new standard marks a change from current GAAP, under which assets and liabilities acquired in a business combination, including contract assets and contract liabilities arising from revenue contracts, are generally recognized at fair value at the acquisition date. On January 1, 2022, the Company adopted ASU 2021-08 with no material impact to its condensed financial position, results of operations or cash flows. This new accounting standard will be applied prospectively to business combinations.
1210

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 underlying restrictions expire, the shares are no longer forfeitable, and are thus vested. ~~Restricted~~All restricted stock units are included in the computation of basic loss per common share only when the underlying restrictions expire, the shares are no longer forfeitable, and are thus vested. Contingently issuable shares are included in basic loss per common share only when there are no circumstances under which those shares would not be issued. Diluted loss per common share is computed using the weighted average number of common shares outstanding and common stock equivalent shares outstanding during the period using the treasury stock method.

The Company excluded the outstanding securities summarized below (capitalized terms are described herein), which entitle the holders thereof to acquire shares of the Company’s common stock, from its calculation of net loss per common share, as their effect would have been anti-dilutive. Common stock equivalent shares are excluded from the diluted calculations when a net loss is incurred as they would be anti-dilutive.
Schedule of Net Income (Loss) Per Common Share
2022 2021 2023 2022
As of September 30, As of March 31,
2022 2021 2023 2022
Series G convertible preferred stock 8,582 8,582 8,582 8,582
Series H Preferred Stock 2,008,728 2,692,906
Restricted Stock Awards 97,402 188,543
Financing Warrants 116,118 131,003
Series H convertible preferred stock 1,981,128 2,004,971
Financing warrants 107,956 116,118
ABG Warrants 999,540 999,540 999,540 999,540
AllHipHop warrants 5,682 5,682 5,681 5,681
Publisher Partner Warrants 5,629 35,889 11,002 26,893
Equity Plans 7,583,100 7,646,788
Outside Options 134,098 138,644
Restricted stock awards 97,403 194,806
Restricted stock units 888,152 1,209,508
Common stock options 6,183,262 5,541,818
Total 10,958,879 11,847,577 10,282,706 10,107,917

~~Reclassifications~~2.
Acquisitions
Certain prior quarter amounts have been reclassified to conform to current period presentation. These reclassifications were immaterial, both individually and in the aggregate. These changes did not impact previously reported loss from operations or net loss.

2. ~~Acquisitions~~
The Company uses the acquisition method of accounting, which is based on ASC, Business Combinations (Topic 805), and uses the fair value concepts which requires, among other things, that most assets acquired, and liabilities assumed be recognized at their fair values as of the acquisition date.

~~2022 Acquisitions~~
~~Athlon Holdings,~~Teneology, Inc. – On ~~April 1, 2022,~~January 11, 2023, the Company entered into an asset purchase agreement with Teneology, Inc., (“Teneology”) pursuant to which it acquired ~~100~~%certain assets (consisting of the ~~issued~~RoadFood media business, including digital and ~~outstanding capital stock of Athlon Holdings, Inc., a Tennessee corporation (“Athlon”~~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 ~~preliminary~~ purchase price of $~~16,175~~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), ~~as adjusted for~~April 1, 2023 and May 1, 2023, with the ~~estimated working capital adjustment as~~remaining payments subject to certain conditions; (3) $200 deferred cash payment due on the first anniversary of the closing date, ~~of the transaction. The purchase price is pending finalization of a working capital adjustment and deferred taxes and could be~~ subject to ~~further revision if additional information related to the fair value of the identifiable net assets become available. 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 preliminary purchase price of $16,175, as discounted, is comprised of (i) a cash portion of $13,162, with $11,840~~ ~~paid at closing~~certain indemnity provisions; and $~~1,322~~ ~~estimated to be paid post-closing (as further described below) and (ii)~~(4) the issuance of ~~314,103~~274,692 shares of the Company’s common stock, subject to certain lock-up provisions, with a fair ~~market~~ value of $~~3,141~~2,000 on the transaction closing date (fair value was determined based on a preliminary independent appraisal); and which is subject to a put option under certain conditions (the “contingent consideration”) (as further described below in Note 9). The number of shares of the Company’s common stock issued was determined based on a $~~3,000~~2,225 value using the common stock trading price ~~for~~on the ~~10 trading days~~day immediately preceding the ~~April 1, 2022~~January 11, 2023 closing ~~date. Certain of Athlon’s key employees entered into either advisory agreements or employment agreements with the Company. Athlon operates in the United States.~~
13
~~The amount estimated to be paid post-closing of $1,322 will be or was paid as follows: (i) $1,077 will be paid on the nine-month anniversary of~~date (on the closing date ~~or January 1, 2023 (consisting~~the common stock trading price was $7.94 per share). The agreement also provided for a cash retention pool for certain employees of ~~$3,000 for the deferred cash payments, as discounted, less a $1,923 cash adjustment);~~$300, subject to vesting over three years upon continued employment and (ii) $245 was paid within two business days from the date the Company received proceeds of $2,450 from the sale of the equity investment in Just Like Falling Off a Bike, LLC that was held by Athlon as of the closing date (paid on April 7, 2022).other conditions.

11
After the condensed consolidated financial statements for the quarterly period ended June 30, 2022 were issued, the Company received an updated valuation report from a third-party valuation firm. After considering the results of that valuation report, the Company estimated that the purchase consideration decreased by $940. The decrease in the purchase price was related to a decrease in the working capital adjustment of $180, an increase in fixed assets of $46, a decrease in identifiable assets of $477 (digital content increased $355, advertiser relationships decreased $498, and trade names decreased $334), a decrease in deferred tax liabilities of $533, and a decrease in goodwill of $862.

The composition of the preliminary purchase price is as follows:
Schedule of Preliminary Purchase Price

Cash $ 500
Common stock 2,000
Contingent consideration 561
Deferred cash payments, as discounted 246
Total purchase consideration $ 3,307

Cash $ 12,085
Common stock 3,141
Deferred cash payments, as discounted 949
Total purchase consideration $ 16,175
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 $~~200~~99 in transaction costs related to the acquisition, which primarily consisted of legal and accounting expenses. The acquisition-related expenses were recorded ~~within~~in general and administrative ~~expense~~expenses on the condensed consolidated statements of operations.

The preliminary purchase price allocation resulted in the following amounts being allocated to the assets acquired and liabilities assumed at the closing date of the acquisition based upon their respective fair values as summarized below:
~~Summary~~Schedule of Preliminary Price Allocation ~~for Acquisition~~

Cash $ 2,604
Accounts receivable 10,855
Other current assets 1,337
Equity investment 2,450
Fixed assets 108
Digital content 355
Advertiser relationships 6,132
Trade names 2,277
Goodwill 2,935
Accounts payable (7,416 )
Accrued expenses and other (2,440 )
Unearned revenue (1,203 )
Other long-term liabilities (543 )
Deferred tax liabilities (1,276 )
Net assets acquired $ 16,175

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 preliminary 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~~advertiser relationships were valued using ~~a cost~~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 ~~fair values of~~estimated useful life is fifteen years (15.0 years) for 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 twotwelve years (~~2.00~~12.0 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~~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. ~~No portion of the goodwill will be deductible for tax purposes.~~
14
~~Supplemental Pro forma Information~~
The following table summarizes the results of operations of the Athlon acquisition from the acquisition date included in the condensed consolidated results of operations and the unaudited pro forma results of operations of the combined entity had the date of the acquisition been January 1, 2021:
~~Schedule Of Supplemental Cash Flow Information~~
2022 2021 2022 2021

Three Months Ended
September 30,

Nine Months Ended
September 30,

2022 2021 2022 2021
Athlon from acquisition date of April 1, 2022 (unaudited):
Revenue $ 15,370 $ - $ 32,887 $ -
Net income 81 - 2,521 -
Combined entity supplemental pro forma information had the acquisition date been January 1, 2021 (unaudited):
Revenue:
Athlon $ 15,370 $ 15,966 $ 48,797 $ 51,458
Arena 51,336 59,575 147,137 127,936
Total supplemental pro forma revenue $ 66,706 $ 75,541 $ 195,934 $ 179,394
Net income (loss):
Athlon $ 81 $ 1,030 $ 1,945 $ 3,644
Arena (16,586 ) (24,707 ) (58,682 ) (70,827 )
Adjustments 533 (306 ) (1,310 ) 158
Total supplemental pro forma net loss $ (15,972 ) $ (23,983 ) $ (59,047 ) $ (67,025 )
The information presented above is for illustrative purposes only and is not necessarily indicative of results that would have been achieved if the acquisition had occurred as of the beginning of the Company’s reporting period.
~~The adjustments for the three months ended September 2022 and 2021 of $533~~ ~~and ($306), respectively, represents adjustments: (1) to record depreciation and amortization expense related to the fixed and intangible assets acquired from the acquisition of $~~0 ~~and ($306); and (2) to record the deferred tax (benefit) provision related to the acquisition $533~~ ~~and $~~0~~, respectively. The adjustments for the nine months ended September 2022 and 2021 of ($1,310) and $158, respectively, represents adjustments (1) to record depreciation and amortization expense related to the fixed and intangible assets acquired from the acquisition of ($234) and ($918); (2) to record (reverse) the nonrecurring transaction cost related to the acquisition of $200~~ ~~and ($200); and (3) to record the deferred tax (benefit) provision related to the acquisition of ($1,276) and $1,276, respectively.~~
~~Further details are provided under the heading~~ ~~Athlon Acquisition~~ ~~in Note 17.~~
~~Buffalo Groupe, LLC~~ – On September 27, 2022, the Company entered into an asset purchase agreement with Buffalo Groupe, LLC, doing business as Morning Read, a Virginia limited liability company, where it purchased certain intellectual properties (including all media properties, trademarks, service marks, domain names, trade names corporate names and other identifiers of goodwill), 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 asset acquisition in accordance with ASC 805-50, as substantially all of the fair value of the gross assets acquired by the Company is concentrated in a group of similar identifiable assets.
~~The purchase consideration totaled $850,~~ ~~which was assigned to the brand name acquired on the closing date of the acquisition. The useful life for the brand name is ten years (10.0~~ ~~years).~~
15
~~2021 Acquisitions~~
~~College Spun Media Incorporated~~ ~~– On June 4, 2021, the Company acquired all of the issued and outstanding shares of capital stock of College Spun Media Incorporated, a New Jersey corporation (“The Spun”), for an aggregate of $11,830~~ ~~in cash and the issuance of an aggregate of~~ ~~194,806~~ restricted shares of the Company’s common stock, with one-half of the shares vesting on the first anniversary of the closing date and the remaining one-half of the shares vesting on the second anniversary of the closing date, subject to a customary working capital adjustment based on cash and accounts receivable as of the closing date. The cash payment consists of: (i) $~~10,830~~ ~~paid at closing (of the cash paid at closing, $830~~ ~~represents adjusted cash pursuant to the working capital adjustments), and (ii) $500~~ ~~to be paid on the first anniversary of the closing and $500~~ to be paid on the second anniversary date of the closing. The vesting of shares of the Company’s common stock is subject to the continued employment of certain selling employees. The Spun operates in the United States.
~~The composition of the purchase price is as follows:~~
~~Schedule of Preliminary Purchase Price~~

Cash $ 10,830
Deferred cash payments, as discounted 905
Total purchase consideration $ 11,735
~~The Company incurred $128~~ in transaction costs related to the acquisition, which primarily consisted of legal and accounting expenses. The acquisition related expenses were recorded in general and administrative expense in the condensed consolidated statements of operations.
After the June 30, 2021 condensed consolidated financial statements were issued, the Company received a final valuation report from a third-party valuation firm. After considering the results of that valuation report, the Company estimated the fair values for the brand name of $~~5,175, along with a decrease for working capital accounts of $1,932~~ ~~(consisting of adjusted amounts for cash, accounts receivable, accrued expenses and deferred tax liabilities) resulting in a corresponding decrease to goodwill of $3,977~~.
The purchase price allocation resulted in the following amounts being allocated to the assets acquired and liabilities assumed at the closing date of the acquisition based upon their respective fair values as summarized below:
~~Summary of Price Allocation for Acquisition~~

Cash $ 3,214
Accounts receivable 1,772
Other current assets 5
Brand name 5,175
Goodwill 3,479
Accrued expenses and other (85)
Deferred tax liabilities (1,825)
Net assets acquired $ 11,735
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 brand name was determined by projecting the acquired entity’s cash flows, deducting notional contributory asset charges on supporting assets (working capital and the assembled workforce) to compute the excess cash flows associated with the brand with a useful life of ten years (~~10.0~~ ~~years).~~
The excess-of purchase price over the fair value amounts assigned to the assets acquired and liabilities assumed represents goodwill from the acquisition. Goodwill is recorded as a non-current asset that is not amortized but is subject to an annual review for impairment. NoA portion of the goodwill will be deductible for tax purposes.

~~Fulltime Fantasy Sports, LLC~~ Supplemental Pro forma Information~~– On July 15, 2021,~~
The pro forma disclosures have been deemed impracticable for this acquisition since after making reasonable efforts the Company entered into an asset purchase agreement with Fulltime Fantasy Sports, LLC, a Delaware limited liability company (“Fulltime Fantasy”), where it purchased certain intellectual properties (including databases, documentsis unable to accept assumptions made by Teneology. The Company has determined, based on the information provided by Teneology and ~~certain rights related~~made available to the ~~intellectual properties), subscriber~~Company, that the earnings from the prior periods could not be verified since the acquisition only included certain activities of Teneology and ~~customer records,~~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 apply the requirement; and ~~other certain rights related to~~(2) the ~~intellectual properties (collectively~~presentation of the ~~“Fulltime Fantasy Purchased Assets”) and assumed certain liabilities related to the Fulltime Fantasy Purchased Assets. The purchase price consisted of: (1) a cash payment of $335~~ ~~(paid in advance), including transaction related costs of $~~35~~, (2)~~ ~~34,092restricted shares the Company’s common stock (subject to certain vesting earn-out provisions and certain buy-back rights), with~~ ~~11,364~~ ~~shares vested at closing and another~~ ~~11,364~~ ~~shares vested on December 31, 2021, and (3) a cash earn-out payment of $225~~ ~~(paid in January 2022). The remaining consideration of a cash earn-out payment of $225~~ ~~was paid on June 30, 2022~~pro forma results and the ~~remaining~~ ~~11,364~~ ~~restricted shares of the Company’s common stock vested on June 30, 2022.~~assumptions made by management were unable to be independently substantiated.

1612
The Company accounted for the 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. Transaction-related costs of $35 ~~were assigned to the identifiable asset and recorded as part of the consideration transferred.~~

~~The composition of the purchase price is as follows:~~3.Balance Sheet Components
~~Schedule of Preliminary Purchase Price~~
Cash (including $35,000 of transaction related costs) $ 335
Restricted stock 168
Deferred cash payments 419
Deferred restricted stock 335
Total purchase consideration $ 1,257
~~The purchase consideration totaled $1,257~~ ~~(including $~~35 ~~of transaction related costs), which was assigned to a database acquired on the closing date of the acquisition. The useful life for the database is three years (3.0 years).~~
3. ~~Balance Sheet Components~~

The components of certain balance sheet amounts are as follows:

Accounts Receivable – 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 collectibility, 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 March 31, 2023 and December 31, 2022 of $23,561 and $33,950, respectively, are presented net of allowance for doubtful accounts. The following table summarizes the allowance for doubtful accounts ~~as of September 30, 2022 and December 31, 2021 was $2,278~~ ~~and $1,578, respectively.~~activity:
Schedule of Allowance For Doubtful Accounts

Three Months Ended March 31, 2023
(unaudited)
Year Ended
December 31, 2022
Allowance for doubtful accounts beginning of period $ 2,236 $ 1,578
Additions 64 980
Deductions – write-offs (28 ) (322 )
Allowance for doubtful accounts end of period $ 2,272 $ 2,236
Subscription Acquisition Costs – Subscription acquisition costs include the incremental costs of obtaining a contract with a customer, paid to external parties, if itthe 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 and, therefore, meet the capitalization criteria. The Company has elected to apply the practical expedient to account for 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. Subscription acquisition costs are included within selling and marketing expenses inon the condensed consolidated statements of operations.

The current portion of the subscription acquisition costs as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 was $~~22,800~~31,908 and $~~30,162~~25,931, respectively. The noncurrent portion of the subscription acquisition costs as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 was $~~7,497~~12,460 and $~~8,235~~14,133, respectively. Subscription acquisition costs as of ~~September 30, 2022~~March 31, 2023 presented as current assets of $~~22,800~~31,908 are expected to be amortized over a one-year period, or through ~~September 30, 2023~~March 31, 2024, and $~~7,497~~12,460 presented as long-term assets are expected to be amortized after the one-year period ending ~~September 30, 2023.~~March 31, 2024.
Amortization of subscription acquisition costs of $10,005 and $9,723 for the three months ended March 31, 2023 and 2022, respectively, are included in selling and marketing expenses on the condensed consolidated statements of operations. No impairment losses have been recognized for subscription acquisition costs for the three months ended March 31, 2023 and 2022.
13

~~Royalty Fees~~Prepayments and other current assets – ~~Royalty fees represent royalties due~~Prepayments and other current assets are summarized as follows:
Schedule of Prepayments and Other Current Assets

March 31, 2023
(unaudited)
December 31, 2022
As of

March 31, 2023
(unaudited)
December 31, 2022
Prepaid expenses $ 3,840 $ 2,321
Prepaid supplies 923 927
Refundable income and franchise taxes 157 957
Unamortized debt costs 216 216
Employee retention credits 6,868 -
Other receivables 33 20
Total prepayments and other current assets $ 12,037 $ 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 is eligible for refundable employee retention credits subject to ~~ABG-SI, LLC (“ABG”) in~~certain criteria. The Company determined that it qualifies for the tax credit under the CARES Act. In connection with the ~~Sports Illustrated media business. The Company’s guaranteed minimum annual royalties are~~CARES Act, the Company adopted a policy to recognize the employee retention credits when earned and to offset the credit against the related expenditure. For the three months ended March 31, 2023, the Company recorded the employee retention credits as a reduction to payroll and related expenses of $~~15,000~~6,868, in operating expenses on the condensed consolidated statements of operations with ~~payment to be made~~a corresponding receivable included in ~~advance on a quarterly basis,~~prepaid expenses and ~~the royalty fee payments are amortized monthly. The Company’s guaranteed minimum annual royalties are $15,000~~ ~~and require payment in advance on a quarterly basis that are amortized monthly. As of September 30, 2022 and December 31, 2021, $~~0 ~~and $11,250, respectively, were paid in advance and reflected within~~other current assets on the condensed consolidated balance sheets.

17
Property and Equipment – Property and equipment are summarized as follows:
Schedule of Property and Equipment
September 30, 2022 December 31, 2021
March 31, 2023
(unaudited)
December 31, 2022
As of As of
September 30, 2022 December 31, 2021
March 31, 2023
(unaudited)
December 31, 2022
Office equipment and computers $ 1,670 $ 1,345 $ 1,777 $ 1,744
Furniture and fixtures 228 1 133 240
Property and equipment, gross 1,898 1,346
Property and equipment, Gross 1,910 1,984
Less accumulated depreciation and amortization (1,105 ) (710 ) (1,345 ) (1,249 )
Net property and equipment $ 793 $ 636 $ 565 $ 735

Depreciation and amortization expense for the three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ was $~~150~~114 and $114, respectively. ~~Depreciation and amortization expense for~~For the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021 was~~impairment charges of $~~395~~55 and $~~334~~0, ~~respectively. No impairment charges~~respectively, have been recorded for property and equipment on the ~~three and nine months ended September 30, 2022. Impairment charges~~condensed consolidated statements of $~~427~~ ~~have been recorded for the three and nine months ended September 30, 2021.~~operations.
14
Platform Development – Platform development costs are summarized as follows:
Summary of Platform Development Costs
September 30, 2022 December 31, 2021
As of
September 30, 2022 December 31, 2021
Platform development $ 19,948 $ 21,997
Less accumulated amortization (9,609 ) (12,698 )
Net platform development $ 10,339 $ 9,299
~~Amortization expense for the three months ended September 30, 2022 and 2021, was $1,511~~ ~~and $1,144, respectively. Amortization expense for the nine months ended September 30, 2022 and 2021, was $4,268~~ ~~and $3,273, respectively.~~

March 31, 2023
(unaudited)
December 31, 2022
As of

March 31, 2023
(unaudited)
December 31, 2022
Platform development $ 22,764 $ 21,493
Less accumulated amortization (12,575 ) (11,163 )
Net platform development $ 10,189 $ 10,330

A summary of platform development activity for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 is as follows:
Summary of Platform Development Cost Activity

Platform development beginning of year $ 21,997
Payroll-based costs capitalized during the period 3,990
Platform development beginning of period $ 21,493
Payroll-based costs capitalized 1,188
Less dispositions (7,357 ) (160 )
Total capitalized costs 18,630 22,521
Stock-based compensation 1,529 307
Impairments (211 ) (64 )
Platform development end of period $ 19,948 $ 22,764

Amortization expense for the three months ended March 31, 2023 and 2022, was $1,573 and $1,344, respectively. Amortization expense for platform development is included in cost of revenues on the condensed consolidated statements of operations. For the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, impairment charges of $~~211~~64 ~~has~~and $210, respectively, have been ~~recorded~~record for platform ~~development. For~~development on the ~~three and nine months ended September 30, 2021, impairment charges~~condensed consolidated statements of $~~435~~ ~~have been recorded for platform development.~~operations.

18
Intangible Assets – Intangible assets subject to amortization consisted of the following:
Schedule of Intangible Assets Subjects to Amortization
As of September 30, 2022 As of December 31, 2021 As of March 31, 2023
(unaudited) As of December 31, 2022

Carrying Amount
Accumulated Amortization Net Carrying Amount
Carrying Amount
Accumulated Amortization Net Carrying Amount Carrying Amount Accumulated Amortization Net Carrying Amount Carrying Amount Accumulated Amortization Net Carrying Amount
Developed technology $ 17,333 $ (14,069 ) $ 3,264 $ 17,579 $ (11,465 ) $ 6,114 $ 17,333 $ (15,679 ) $ 1,654 $ 17,333 $ (14,883 ) $ 2,450
Trade names 5,396 (1,069 ) 4,327 3,328 (782 ) 2,546
Brand names 6,025 (685 ) 5,340 5,175 (298 ) 4,877
Trade name 5,380 (1,287 ) 4,093 5,380 (1,180 ) 4,200
Brand name 12,774 (1,274 ) 11,500 12,115 (908 ) 11,207
Subscriber relationships 73,459 (43,510 ) 29,949 73,459 (32,623 ) 40,836 73,459 (50,769 ) 22,690 73,459 (47,146 ) 26,313
Advertiser relationships 8,372 (1,113 ) 7,259 2,240 (570 ) 1,670 15,965 (1,776 ) 14,189 15,302 (1,368 ) 13,934
Database 2,397 (1,856 ) 541 2,397 (1,753 ) 644
Digital content 355 (89 ) 266 - - - 355 (178 ) 177 355 (133 ) 222
Database 2,397 (1,647 ) 750 2,397 (1,104 ) 1,293
Subtotal amortizable intangible assets 113,337 (62,182 ) 51,155 104,178 (46,842 ) 57,336
Website domain name - - - 20 - 20
Total intangible assets $ 113,337 $ (62,182 ) $ 51,155 $ 104,198 $ (46,842 ) $ 57,356 $ 127,663 $ (72,819 ) $ 54,844 $ 126,341 $ (67,371 ) $ 58,970

Intangible assets subject to amortization were recorded as part of the Company’s business acquisitions. Amortization expense for the three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ was $~~5,230~~5,448 and $~~5,039~~5,055, ~~respectively. Amortization~~respectively, of which amortization expense for ~~the nine months ended September 30, 2022 and 2021 was~~developed technology of $~~15,560~~796 and $~~14,941~~967, ~~respectively.~~respectively, is included in cost of revenues on the condensed consolidated statements of operations. For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ impairment charges of $~~209~~0 and $4247, respectively, ~~were~~have been recorded for the intangible ~~assets.~~assets on the condensed consolidated statements of operations.

~~Goodwill~~ ~~– The changes in carrying value of goodwill are as follows:~~4. Leases
~~Schedule of Goodwill~~
September 30, 2022 December 31, 2021
As of
September 30, 2022 December 31, 2021
Carrying value at beginning of year $ 19,619 $ 16,140
Goodwill acquired in acquisition of The Spun - 3,479
Goodwill acquired in acquisition of Athlon 2,935 -
Carrying value at end of period $ 22,554 $ 19,619
The Company performs its annual impairment test at the reporting unit level, which is the operating segment or one level below the operating segment. Management determined that the Company would be aggregated into a single reporting unit for purposes of performing the impairment test for goodwill.
4. ~~Leases~~

The Company’s real estate lease for the use of office space ~~was~~is subleased ~~during the year ended December 31, 2021~~ (as further described below). The Company’s current lease is a long-term operating lease with a remaining fixed payment term of ~~2.01~~1.51 years.

15
The table below presents supplemental information related to operating leases:
Schedule of Supplemental Information Related to Operating Leases
Nine Months Ended Year Ended Three Months Ended March 31,
September 30, 2022 December 31, 2021 2023 2022
Operating lease costs during the period (1) $ 727 $ 2,718 $ 240 $ 179
Cash payments included in the measurement of operating lease liabilities during the period $ 351 $ 2,787 $ 121 $ 117
Weighted-average remaining lease term (in years) as of period-end 2.01 2.75 1.51 2.51
Weighted-average discount rate during the period 9.90 % 9.90 % 9.9 % 9.9 %

(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 leases is not readily determinable.

19
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, ~~including~~such as maintenance and utilities.

The components of operating lease costs were as follows:
Schedule of Operating Lease Costs
2022 2021 2022 2021 2023 2022

Three Months Ended
September 30,

Nine Months Ended
September 30,
Three Months Ended March 31,
2022 2021 2022 2021 2023 2022
Operating lease costs:
Cost of revenue $ - $ 630 $ - $ 1,261 $ - $ -
Selling and marketing - 181 - 362 - -
General and administrative 328 148 891 297 295 234
Total operating lease costs (1) 328 959 891 1,920 295 234
Sublease income (55 ) - (164 ) - (55 ) (55 )
Total $ 273 $ 959 $ 727 $ 1,920 $ 240 $ 179

(1) Includes certain costs associated with a business membership agreement (see below) that permits access to certain office space for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 of $~~170~~155 and $~~510~~170, respectively, and month-to-month lease arrangements for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 of $9576 and $~~191~~0, respectively.

Maturities of the operating lease liability as of ~~September 30, 2022~~March 31, 2023 are summarized as follows:
Summary of Maturity of Lease Liabilities
Years Ending December 31,
2022 (remaining three months of the year) $ 120
2023 486
2023 (remaining nine months of the year) $ 366
2024 373 373
Minimum lease payments 979 739
Less imputed interest (95 ) (55 )
Present value of operating lease liability $ 884 $ 684
Current portion of operating lease liability $ 413 $ 442
Long-term portion of operating lease liability 471 242
Total operating lease liability $ 884 $ 684

Sublease Agreement – In November 2021, the Company entered into an agreement to sublease its leased office space for the duration of its operating lease through September 2024. As of ~~September 30, 2022,~~March 31, 2023, the Company is entitled to receive ~~total~~ sublease income of $~~537~~414.

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 (each~~furnishings(the “membership”). This membership provides a certain number of accounts that equate to the use of the space ~~granted)~~granted, or membership accounts. Effective June 1, 2022, the SaksWorks membership agreement was amended and assigned to Convene SW MSA Holdings, LLC (“Convene”). The term of the membership agreement ~~was~~with Convene is for 27twenty-seven months from the initial effective date of October 1, 2021 with ~~15 months~~SaksWorks. The annual membership fee with Convene is $620 ($500 for a dedicated membership area and $120 for minimum membership accounts) payable in equal monthly installments. The membership agreement also provides for: (1) additional membership accounts at predetermined pricing; and (2) renewal of the membership agreement at the end of the term for a twelve-month period at the then-current market price and pricing structure on such renewal date. As of March 31, 2023, the Company had $568 of remaining ~~at $~~57 ~~per month for 110 accounts.~~payments under the membership agreement with Convene.

5. ~~Line of Credit~~16
5.Goodwill

The changes in carrying value of goodwill are as follows:
Schedule of Changes in Carrying Value of Goodwill

March 31, 2023
(unaudited)
December 31, 2022
As of

March 31, 2023
(unaudited)
December 31, 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 - 17,138
Goodwill acquired in acquisition of Fexy Studios 1,985 -
Goodwill acquired in acquisition 1,985 -
Carrying value at end of period $ 41,329 $ 39,344
6.Line of Credit
SLR Credit Facility – On December ~~6, 2021,~~15, 2022, the Company entered into an amendment to its financing and security agreement for its line of credit with SLR Digital Finance LLC (formerly FPP Finance ~~LLC~~LLC) (“~~FastPay”~~SLR”) ~~that was originally entered into on February 27, 2020,~~, pursuant to which (i) the maximum amount of advances available was increased to $~~25,000~~ ~~from $15,000~~40,000 (subject to certain limits and eighty-five (85%) of eligible accounts receivable), (ii) the interest rate on the ~~facility applicable margin~~line of credit was ~~decreased~~amended to ~~6.0~~%be the prime rate plus 4.0% per annum ~~from~~ ~~8.5% per annum (the facility bears interest~~of the amount advanced (subject to minimum utilization of at least 10% of the ~~LIBOR~~maximum amount of advances available) (as of March 31, 2023 the rate ~~plus the applicable margin)~~was 12.0%), and (iii) the maturity ~~date~~of the line of credit was extended to ~~February 28, 2024 from February 6, 2022.~~December 31, 2024; provided that the maturity date will be December 31, 2023 if the Company has not refinanced, repaid or extended all of its Senior Secured Notes (as defined below) due December 31, 2023 by August 31, 2023, and provided further, that SLR will be entitled to accelerate the maturity date of the obligations if the Company has not refinanced, repaid or extended all of its Senior Secured Notes due December 31, 2023 by September 30, 2023. In the event that the line of credit is accelerated, the Company will be obligated to pay SLR a termination fee of $900. The amendment also permitted the Company to enter into the Bridge Notes (as defined below). The line of credit is for working capital purposes and is secured by a first lien on all the Company’s cash and accounts receivable and a second lien on all other assets. In connection with the line of credit, the Company incurred debt costs of $441 that are being amortized over the life of the line of credit with the unamortized balance, as of March 31, 2023, reflected in prepayment and other current assets of $216 and other long-term assets of $162. As of ~~September 30,~~December 31, 2022, the unamortized balance was reflected in other current assets of $216 and other long-term assets of $216. As of March 31, 2023, the effective interest rate on the line of credit was 14.0%. As of March 31, 2023 and December 31, ~~2021,~~2022, the balance outstanding under the ~~FastPay~~ line of credit was $~~18,474~~9,559 and $~~11,988~~14,092, ~~respectively.~~respectively, as reflected on the condensed consolidated balance sheets.

20
Information for the three months ended March 31, 2023 and 2022 with respect to interest expense related to the line of credit is provided under the heading Interest Expense in Note 11.
7.Restricted Stock Liabilities
6. ~~Restricted Stock Liabilities~~

On December 15, 2020, the Company entered into an amendment for certain restricted stock awards and units that were previously issued to certain employees in connection with a previous merger ~~(the “HubPages merger”).~~with HubPages. Pursuant to the amendment, the Company ~~committed~~agreed to ~~repurchase~~ ~~48,389~~purchase the vested restricted stock awards, ~~as of December 31, 2020~~ at a price of $88.00 per share in 24 equal monthly installments on the second business day of each calendar month beginning on January 4, 2021, subject to certain conditions.

The ~~following table presents the components of the restricted stock liabilities:~~
~~Schedule of Components of Restricted Stock Liabilities~~
September 30, 2022 December 31, 2021
As of
September 30, 2022 December 31, 2021
Restricted stock liabilities (before imputed interest) $ 2,307 $ 3,801
Less imputed interest (155 ) (177 )
Present value of restricted stock liabilities 2,152 3,624
Less principal payments during the period (2,152 ) (1,472 )
Restricted stock liabilities at end of period (reflected in accrued expenses and other) $ - $ 2,152
~~The~~ Company recorded the repurchase of ~~26,214~~8,064 ~~and~~ ~~12,098~~ ~~during the nine months ended September 30, 2022 and 2021, respectively,~~shares of the Company’s restricted common stock during the three months ended March 31, 2022 on the condensed consolidated statements of stockholders’ ~~deficiency. Effective~~deficiency, representing a payment of $710, exclusive of imputed interest of $78, as reflected on the condensed consolidated statements of cash flows. On April 4, 2022, ~~there are no longer any~~the Company paid $1,597 for the remaining 18,134 shares of the Company’s restricted common stock that were outstanding as of March 31, 2022 that were subject to repurchase. ~~During the nine months ended September 30, 2022 and 2021, the Company paid $2,307~~ ~~and $1,419~~ ~~in cash for the repurchase, including interest of $155~~ ~~and $254, respectively.~~

Further details are provided under the heading Repurchases of Restricted Stock in Note 17.
7. ~~Liquidated Damages Payable~~17
8.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”).

Obligations with respect to the liquidated damages payable are summarized as follows:
Summary of Liquidated Damages
As of September 30, 2022
As of March 31, 2023
(unaudited)

Registration
Rights
Damages

Public
Information
Failure
Damages

Accrued
Interest
Balance
Registration
Rights
Damages

Public
Information
Failure
Damages

Accrued
Interest
Balance
MDB common stock to be issued (1) $ 15 $ - $ - $ 15 $ 15 $ - $ - $ 15
Series H convertible preferred stock 618 626 533 1,777 618 626 607 1,851
Convertible debentures - 704 258 962 - 704 300 1,004
Series J convertible preferred stock 932 932 467 2,331 932 932 580 2,444
Series K convertible preferred stock 191 478 82 751 306 289 185 780
Total $ 1,756 $ 2,740 $ 1,340 $ 5,836 $ 1,871 $ 2,551 $ 1,672 $ 6,094

21
As of December 31, 2021 As of December 31, 2022

Registration
Rights
Damages

Public
Information
Failure
Damages

Accrued
Interest
Balance
Registration
Rights
Damages

Public
Information
Failure
Damages

Accrued
Interest
Balance
MDB common stock to be issued (1) $ 15 $ - $ - $ 15 $ 15 $ - $ - $ 15
Series H convertible preferred stock 1,164 1,172 792 3,128 618 626 570 1,814
Convertible debentures - 873 242 1,115 - 704 280 984
Series I convertible preferred stock 1,386 1,386 613 3,385
Series J convertible preferred stock 1,560 1,560 490 3,610 932 932 525 2,389
Series K convertible preferred stock 180 722 50 952 437 478 220 1,135
Total $ 4,305 $ 5,713 $ 2,187 $ 12,205 $ 2,002 $ 2,740 $ 1,595 $ 6,337

(1) Consists of shares of common stock issuable to MDB Capital Group, LLC (“MDB”).

~~During the three and nine months ended September 30, 2022, the Company recorded liquidated damages of $339~~ ~~and $639~~ ~~(including accrued interest of $143~~ ~~and $300), respectively. During the three and nine months ended September 30, 2022, liquidated damages of $197~~ were recorded as a result of the Registration Rights Damages resulting from not registering Series K convertible preferred stock (the “Series K Preferred Stock”) timely. Further details as of the date these condensed consolidated financial statements were issued are provided under the heading ~~Liquidated Damages~~ ~~in Note 17.~~
As of ~~September 30,~~March 31, 2023 and December 31, 2022, the short-term liquidated damages payable were $5,970and $5,843, respectively, and the long-term liquidated damages payable were, $~~5,836~~124 and $0494, respectively. During the three months ended March 31, 2023 a portion of the long-term portion was converted into shares of the Company’s common stock on February 10, 2023, as further described below. The Company will continue to accrue interest on the liquidated damages balance at 1.0% per month based on the balance outstanding as of ~~September 30, 2022~~March 31, 2023, or $5,970, until paid. There is no scheduled date when the unpaid liquidated damages become due.
~~As of December 31, 2021, the short-term~~ The Series K convertible preferred stock remains subject to Registration Rights Damages and ~~long-term liquidated damages payable were $~~Public Information Failure Damages, which will accrue in certain circumstances, limited to ~~5,197~~6 ~~and $7,008, respectively. The long-term portion was converted into shares~~% of the ~~Company’s common stock on January 24, 2022, as further described below.~~aggregate amount invested.

On ~~January 24, 2022,~~February 8, 2023, the Company entered into ~~several~~a stock purchase ~~agreements~~agreement with ~~several investors,~~an investor, where the Company was liable to for liquidated damages, pursuant to which the Company ~~issued an aggregate of~~agreed to the issue ~~505,671~~47,252 shares of its common stock at a price equal to $~~13.86~~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 ~~ninety~~sixty (60) previous trading days), to the ~~investors~~investor in lieu of an aggregate of $~~7,008~~494 owed in liquidated ~~damages. In connection with~~damages as of the ~~stock purchase agreements,~~conversion date. On February 10, 2023 and April 10, 2023, the Company issued 35,486 and 11,766 shares of its common stock, respectively, in satisfaction of the liquidated damages. The Company prepared and filed a registration statement covering the resale of ~~the~~ ~~505,671~~these shares of the Company’s common ~~stock. The~~stock issued in lieu of payment of these liquidated damages in cash. On February 10, 2023, the Company recorded $~~6,685~~324 in connection with the issuance of shares of the Company’s common stock and ~~recognized~~ a gain of $~~323~~46 on the settlement of the liquidated damages, totaling $370, which was recorded ~~within~~in additional paid-in capital on the condensed consolidated statement of stockholders’ deficiency.

8. ~~Fair Value Measurements~~18
Further details subsequent to the date of these condensed consolidated financial statements were issued are provided under the heading Liquidated Damages in Note 19.
9.Fair Value

The Company estimates the fair value of financial instruments using available market information and valuation methodologies the Company believes to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of amounts the Company would realize upon disposition.

The fair value hierarchy consists of three broad levels of inputs that may be used to measure fair value, which are described below:

Level 1. Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2. Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and
Level 3. Assets or liabilities for which fair value is based on valuation models with significant unobservable pricing inputs and which result in the use of management estimates.

22
The Company accounted for certain ~~warrants (as described under~~common stock issued in connection with the ~~heading Common Stock Warrants~~Fexy Studios acquisition 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 ~~Note 10)~~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 ~~liabilities,~~liability, which ~~required~~requires the Company to carry such amounts on its condensed consolidated balance sheets as a liability at fair value, as adjusted at each reporting period-end. ~~As of December 31, 2021, the Strome Warrants and B. Riley Warrants (as described in Note 11) were classified within equity.~~

Liabilities measured at fair value on a recurring basis consisted of the following as of March 31, 2023:
Schedule of Fair Value of Financial Instruments
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 $ 1,060 $ - $ 1,060 $ -
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 Fexy Studios, or January 11, 2024. The estimated fair value was calculated using the Black Scholes option pricing model using the following inputs: (i) $8.10 exercise price equal to the closing price of the Company’s common stock at the acquisition date; (ii) $4.25 common stock price equal to the trading price of the Company’s common stock as of the reporting date; (iii) 0.78 years for the expected term; (iv) 4.77% annualized risk free rate; and (v) 70.00% selected volatility. For the three months ended ~~September 30, 2021,~~March 31, 2023, the change in valuation of ~~warrant derivative liabilities~~the contingent consideration of $~~802~~499 was recognized asin other ~~income on the condensed consolidated statement of operations. For the nine months ended September 30, 2021, the change in valuation of warrant derivative liabilities of $497~~ ~~was recognized as other expense~~expenses on the condensed consolidated statement of operations.
9. ~~Long-term Debt~~19
10.Bridge Notes

~~Senior Secured Note~~
~~As of September 30,~~On December 15, 2022, ~~and December 31, 2021,~~ the ~~Company’s outstanding obligation under its~~Company issued $36,000 aggregate principal amount of senior secured notes (the “Bridge Notes”) pursuant to a third amended and restated note purchase agreement (as described below) with BRF Finance Co., LLC,(“BRF”) an affiliated entity of B. Riley Financial, Inc. (“B. Riley”), in its capacity as agent for the purchasers and as purchaser. The Company received net proceeds of $34,728 from the issuance of the Bridge Notes. Interest on the Bridge Notes is payable in cash at a rate of 12% per annum quarterly in arrears on March 31, 2023, June 30, 2023, September 30, 2023, and December 31, 2023; provided that, on March 1, 2023, May 1, 2023, and July 1, 2023, the interest rate on the Bridge Notes will increase by 1.5% per annum, with maturity on December 31, 2023. The Bridge Notes are subject to certain mandatory prepayment requirements, including, but not limited to, a requirement that the Company apply the net proceeds from certain debt incurrences or equity offerings to repay the Bridge Notes. The Company may elect to prepay the Bridge Notes, at any time, in whole or in part with no premium or penalty. The Bridge Notes are secured by liens on the same collateral that secures indebtedness under the Company’s outstanding Senior Secured Notes (as defined below) and are guaranteed by the Company’s subsidiaries that guarantee the Senior Secured Notes. The Bridge Notes provide for certain covenants and event of default provisions similar to those contained in the Senior Secured Notes. In connection with the Bridge Notes, the Company incurred debt costs of $1,272 that are being amortized over the expected life of the debt. As of March 31, 2023, the effective interest rate was 19.0%. As of March 31, 2023 and December 31, 2022, the balance outstanding under the Bridge Notes was $35,433 ($36,000 principal balance less unamortized debt costs of $567) and $34,805 ($36,000 principal balance less unamortized debt costs of $1,195), respectively.
Information for the three months ended March 31, 2023 with respect to interest expense related to the Bridge Notes is provided under the heading Interest Expense in Note 11.
11.Term Debt
Senior Secured Notes
As of March 31, 2023 and December 31, 2022, the Company had an outstanding obligation with BRF, in its capacity as agent for the purchasers and as purchaser, ~~is summarized as follows:~~pursuant to a third amended and restated note purchase agreement (the “Senior Secured Notes”) entered into on December 15, 2022, where it amended the second amended and restated note purchase agreement issued on January 23, 2022.
The Senior Secured Notes, prior to and including the third amended and restated note purchase agreement, provide for:

● ~~On March 24, 2020, the Company entered into~~ a ~~second amended and restated note when the principal balance outstanding under its note issued on September 19, 2019 was $51,336~~ ~~(including accrued interest), due on September 14, 2022 (as further amended). The terms of the note also permitted~~provision for the Company to enter into a Delayed Draw Term ~~Note~~Notes (as described below), in ~~the~~an aggregate principal amount of $~~12,000~~9,928 as of December 31, 2021 (the Company repaid $5,928 on December 31, 2022);

● ~~On October 23, 2020,~~a provision where the Company ~~entered into a first amendment~~added $13,852 to ~~second amended and restated note issued on March 24, 2020 (“Amendment 1”), where~~ the ~~maturity date was changed to December 31, 2022 (as further amended) from September 14, 2022, subject to certain acceleration conditions and~~principal balance of the notes for interest payable on the ~~note~~notes on last day of a fiscal quarter from September 30, 2020 ~~December 31, 2020, March 31, 2021, September 30, 2021, September 30, 2021, and~~to December 31, 2021 ~~will be~~as payable in-kind;
● a provision where the paid in-kind ~~in arrears on the last day of such fiscal quarter. Alternatively, at the option of the holder, such~~ interest amounts originally could have been paid in shares of previously designated Series K Preferred Stock; however, after December 18, 2020, the date the Series K Preferred Stock was converted into shares of the Company’s common stock, such interest amounts can be ~~converted into~~paid in shares of the Company’s common stock based upon the conversion rate specified in the Certificate of Designation for the Series K ~~Preferred Stock,~~convertible preferred stock, subject to certain adjustments;

● ~~On May 19, 2021, the Company entered into a second amendment to the second amended and restated note issued March 24, 2020 (“Amendment 2”), pursuant to which: (i) the~~an interest rate ~~on the Senior Secured Note, as defined below, decreased from a rate~~ of ~~12.0~~10.0%% per annum, subject to adjustment in the event of default, with a ~~rate of~~ ~~10.0% per annum; and (ii) the Company agreed~~provision that within one (1) business day after receipt of cash proceeds from any issuance of equity interests, itunless waived, the Company will prepay ~~the~~ certain obligations in an amount equal to such cash proceeds, net of underwriting discounts and commissions; provided, that, this mandatory prepayment obligation does not apply to any proceeds that the Company received from shares of the Company’s common stock issued pursuant to a certain securities purchase agreement during the 90-day period commencing on May 20, 2021;

● ~~On December 6, 2021,~~interest on the ~~Company entered into a third amendment~~notes will be payable after February 15, 2022, at the agent’s sole discretion, either (a) in cash quarterly in arrears on the last day of each fiscal quarter or (b) by continuing to add such interest due on such payment dates to the ~~second amended and restated note issued March 24, 2020 (“Amendment 3”), where the Company was permitted to increase the FastPay line of credit in an aggregate~~ principal amount ~~not~~of the notes;
● a maturity date of December 31, 2023, subject to ~~exceed $~~certain acceleration conditions;
~~25,000~~;
● all borrowings under the notes to be collateralized by substantially all assets of the Company; and

● ~~On January 23, 2022,~~ the Company ~~entered~~to enter into ~~a fourth amendment~~the Bridge Notes for $36,000 and to increase the ~~second amended and restated note issued March 24, 2020 (“Amendment 4”), where the maturity date on the note was extended~~line of credit with SLR in an aggregate principal amount not to (i) December 31, 2023 from December 31, 2022 upon the consummation of the equity financing on February 15, 2022 (further details are provided below), or (ii) the date accelerated pursuant to certain terms of Amendment 4.exceed $40,000.
Collectively, the second amended and restated note and Amendment 1, Amendment 2, Amendment 3 and Amendment 4 thereto are referred to as the “Senior Secured Note,” with all borrowings collateralized by substantially all assets of the Company.
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After the date of Amendment 4, interest on the note will be payable, 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 note. Interest on the Senior Secured Note will accrue for each calendar quarter on the outstanding principal amount of the note at an aggregate rate of ~~10.0~~% per annum, subject to adjustment in the event of default. Further, interest that was payable during fiscal years 2020 and 2021 and added to the principal amount under the note remains subject to the conversion election under Amendment 1.

Delayed Draw Term ~~Note~~Notes
As of March 31, 2023 and December 31, 2022, the Company had an outstanding obligation with BRF, in its capacity as agent for the purchasers and as purchaser, pursuant to a third amended and restated note purchase agreement (the “Delayed Draw Term Notes”) entered into on December 15, 2022, where it amended the second amended and restated note purchase agreement issued on January 23, 2022.

~~As of September 30, 2022~~The Delayed Draw Term Notes, prior to and ~~December 31, 2021,~~including the ~~Company’s outstanding obligation under its delayed draw term~~third amended and restated note ~~with B. Riley is summarized as follows:~~purchase agreement, provide for:

● ~~On March 24, 2020, the Company entered into a delayed draw term note (the “Delayed Draw Term Note”) with~~ an interest rate of ~~15.0~~10.0%% per annum, ~~pursuant~~subject to ~~the second amended and restated note purchase agreement,~~adjustment in the ~~aggregate principal amount~~event of $~~12,000. The terms of the note provided that up to $8,000~~ ~~in principal amount was due on March 31, 2021;~~default;

● ~~On March 24, 2020,~~interest on the ~~Company drew down $6,914~~ ~~under~~notes to be payable after February 15, 2022, at the ~~Delayed Draw Term Note, with interest payable in-kind~~agent’s sole discretion, either (a) in cash quarterly in arrears on the last day of each fiscal ~~quarter;~~quarter or (b) by continuing to add such interest due on such payment dates to the principal amount of the notes;

● ~~On October 23, 2020, pursuant to the terms of Amendment 1, the~~a maturity date ~~of the Delayed Draw Term Note was changed~~on December 31, 2023, subject to March 31, 2022 (as further amended) from March 31, 2021. Amendment 1 also provided that the holder, could originally elect, in lieu of receipt of cash for payment of all or any portion of the interest due or cash payments up to a certain conversion portion of the Delayed Draw Term Note, to receive shares of Series K Preferred Stock; however, after December 18, 2020, the date the Series K Preferred Stock converted into shares of the Company’s common stock, the holder may elect, in lieu of receipt of cash for such amounts, shares of the Company’s common stock at the price the Company last sold shares of the Company’s common stock;
● ~~On October 23, 2020, $3,367~~, including principal and accrued interest of the Delayed Draw Term Note, converted into shares of the Company’s Series K Preferred Stock, which shares were further converted into shares of the Company’s common stock;
● ~~On May 19, 2021, pursuant to Amendment 2, the interest rate on the Delayed Draw Term Note decreased to a rate of~~ ~~10.0% per annum from a rate of~~ ~~15.0% per annum;~~
● ~~On December 28, 2021, the Company drew down $5,086~~ ~~under the Delayed Draw Term Note, and after payment of commitment and funding fees paid of $509, the Company received net proceeds of $4,578~~;acceleration terms; and

● ~~On February 15, 2022, pursuant~~all borrowings under the notes to ~~Amendment 4,~~be collateralized by substantially all assets of the ~~maturity date on the Delayed Draw Term Note was extended to (i) December 31, 2022 from March 31, 2022 for $5,925~~ ~~of principal due and (ii) December 31, 2023 from March 31, 2022 for $4,000~~ ~~of principal due, subject to certain acceleration terms.~~Company.
Amendment 4 also provided that interest will be payable, at the agent’s sole discretion, either (a) in cash quarterly in arrears on the last day of each fiscal quarter or (b) in kind quarterly in arrears on the last day of each fiscal quarter, and will accrue for each fiscal quarter on the principal amount outstanding under the note at an aggregate rate of ~~10.0% per annum, subject to adjustment in the event of default.~~
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The following table summarizes the ~~long-term~~term debt:

Schedule of Long Term Debt
As of September 30, 2022 As of December 31, 2021
Principal Balance (including accrued interest) Unamortized Discount and Debt Issuance Costs Carrying Value Principal Balance (including accrued interest) Unamortized Discount and Debt Issuance Costs Carrying Value
Senior Secured Note, as amended, matures December 31, 2023 $ 62,691 $ (1,132 ) $ 61,559 $ 62,691 $ (1,935 ) $ 60,756
Delayed Draw Term Note, as amended, matures December 31, 2023 9,928 (155 ) 9,773 9,928 (567 ) 9,361
Total $ 72,619 $ (1,287 ) $ 71,332 $ 72,619 $ (2,502 ) $ 70,117
Carrying value
Current portion $ 5,899 $ 5,744
Long-term portion 65,433 64,373
Total $ 71,332 $ 70,117

As of March 31, 2023
(unaudited)
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, as amended, matures December 31, 2023 $ 62,691 $ (681 ) $ 62,010 $ 62,691 $ (904 ) $ 61,787
Delayed Draw Term Notes, as amended, matures December 31, 2023 4,000 (78 ) 3,922 4,000 (103 ) 3,897
Total $ 66,691 $ (759 ) $ 65,932 $ 66,691 $ (1,007 ) $ 65,684

As of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the ~~Company’s Delayed Draw Term Note, as amended,~~term debt carrying value of $~~9,773~~65,932 and $~~9,361~~65,684, respectively, was reflected as ~~follows: (1) $5,899~~ ~~and $5,744~~ ~~for~~a current liability on the ~~first draw (including accrued interest and less unamortized discount and debt issuance costs of $~~26 ~~and $180), respectively; and (2) $3,874~~ ~~and $3,617~~ ~~for the second draw (including accrued interest and less unamortized discount and debt issuance costs of $129~~ ~~and $387), respectively.~~condensed consolidated balance sheets. As of ~~September 30, 2022,~~March 31, 2023, the effective interest rate of the Senior Secured ~~Note,~~Notes and Delayed Draw Term ~~Note first draw~~Notes were 11.4% and ~~second draw was~~ ~~11.4~~12.5%%, ~~11.7% and~~ ~~12.5~~%, respectively.

The ~~following table summarizes~~Company’s principal maturities of ~~long-term debt:~~term debt are due December 31, 2023 in the amount of $66,691.
~~Schedule of Principal Maturities of Long-term Debt~~
Years Ending December 31,
2022 $ 5,924
2023 66,695
Total $ 72,619

~~10.~~Information for the three months ended March 31, 2023 and 2022 with respect to interest expense related to term debt is provided below.
Interest Expense
The following table represents interest expense:
Summary of Interest Expense
Three Months Ended March 31,
2023 2022
Amortization of debt costs:
Line of credit $ 54 $ -
Bridge Notes 628 -
Senior Secured Notes 223 350
Delayed Draw Term Notes 25 310
Total amortization of debt costs 930 660
Cash paid interest:
Line of credit 438 252
Bridge Notes 1,127 -
Senior Secured Notes 1,567 1,567
Delayed Draw Term Notes 100 247
Other 20 94
Total cash paid interest 3,252 2,160
Total interest expense $ 4,182 $ 2,820
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12. Preferred Stock

The Company has the authority to issue 1,000,000 shares of preferred stock, $0.01 par value per share, ~~which~~consisting of authorized and/or outstanding shares as of ~~September 30, 2022 has been designated and issued~~March 31, 2023 as follows:

● 1,800 authorized shares designated as “Series G Convertible Preferred Stock”, of which 168 shares are outstanding.

● 23,000 authorized shares designated as “Series H Convertible Preferred Stock” (as further described below), of which ~~14,556~~14,356 shares are outstanding.
~~Series H Preferred Stock~~13.Stockholders’ Equity
~~The Company recorded the issuance of~~ ~~70,380~~ ~~shares of the Company’s common stock upon conversion of~~ ~~510~~ shares of the Company’s series H convertible preferred stock (the “Series H Preferred Stock”) during the nine months ended September 30, 2022, as reflected on the condensed consolidated statements of stockholders’ deficiency. The Company recorded the issuance of ~~6,888~~ ~~shares of the Company’s common stock upon conversion of~~ 50 ~~shares of the Company’s Series H Preferred Stock during the three and nine months ended September 30, 2021, as reflected on the condensed consolidated statements of stockholders’ deficiency.~~
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~~Series L Preferred Stock~~
On May 4, 2021, a special committee of the Board declared a dividend of one preferred stock purchase right to be paid to the stockholders of record at the close of business on May 14, 2021 for (i) each outstanding share of the Company’s common stock and (ii) each share of the Company’s common stock issuable upon conversion of each share of the Company’s Series H Preferred Stock. Each preferred stock purchase right entitles the registered holder to purchase, subject to a rights agreement (the “Rights Agreement”), from the Company one one-thousandth of a share of the Company’s then-newly created Series L Junior Participating Preferred Stock, par value $~~0.01~~ ~~per share (the “Series L Preferred Stock”), at a price of $4.00, subject to certain adjustments. The Series L Preferred Stock was entitled, when, as and if declared, to a preferential per share quarterly dividend payment equal to the greater of~~ (i) $1.00 per share or (ii) 1,000 times the aggregate per share amount of all cash dividends, and 1,000 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions paid to the holders of the Company’s common stock. The Series L Preferred Stock was entitled to 1,000 votes on all matters submitted to a vote of the stockholders of the Company. In the event of any merger, consolidation or other transaction in which shares of the Company’s common stock are converted or exchanged, the Series L Preferred Stock was entitled to receive 1,000 times the amount received per one share of the Company’s common stock.
The Rights Agreement was set to expire on May 3, 2022; however, on May 2, 2022, the Board elected to extend the expiration date by an amended and restated rights agreement (the “Extended Rights Agreement”), which was ratified by the Company’s stockholders on June 2, 2022.
The Company eliminated the Series L Preferred Stock. Even though the stockholders ratified the Extended Rights Agreement, the Board determined that the Rights Agreement was no longer necessary or in the best interest of the Company and its stockholders. The Board thus determined to terminate the Rights Agreement by amending its expiration date from May 3, 2024 to July 15, 2022 pursuant to an amendment to the Extended Rights Agreement. The amendment effectively terminated all preferred share purchase rights under the Rights Agreement such that they are no longer issued or outstanding.
~~11.~~ ~~Stockholders’ Equity~~

Common Stock
The Company has the authority to issue 1,000,000,000 shares of common stock, $0.01 par value per share.
On March 31, 2023, the Company entered into common stock purchase agreements with certain purchasers, pursuant to which the Company agreed to issue and sell in a registered direct offering an aggregate of 2,963,918 shares of the Company’s common stock, $0.01 par value per share at a purchase price of $3.88 per share. The gross proceeds received were $11,500 and after deducting offering expenses of $289, the Company received net proceeds of $11,211, as reflected on the condensed consolidated statements of stockholder’s deficiency. No underwriter or placement agent participated in the registered direct offering. The Company intends to use the net proceeds for working capital and other general corporate purposes.

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. 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 condensed consolidated statements of stockholders’ deficiency.
~~On April 27, 2022, the Company issued~~ ~~7,851~~ shares of the Company’s common stock in connection with a previous merger with Say Media, Inc. (the “Say Media merger”). These shares were previously classified as common stock to be issued on the condensed consolidated statements of stockholders’ deficiency.
~~On May 20, 2021 and May 25, 2021, the Company entered into securities purchase agreements with several accredited investors, pursuant to which the Company sold an aggregate of~~ ~~974,351~~ ~~shares of the Company’s common stock, at a per share price of $15.40~~ ~~for aggregate gross proceeds of $15,005~~ ~~in a private placement. On September 2, 2021, the Company entered into a securities purchase agreement with an accredited investor, pursuant to which the Company sold an aggregate of~~ ~~324,676~~ ~~shares of the Company’s common stock, at a per share price of $15.40~~ ~~for gross proceeds of $5,000~~ ~~in a private placement that was in addition to the closings that occurred on May 20, 2021 and May 25, 2021. After payment of legal fees and expenses the investors of $167, of which $100~~ ~~was paid in cash to B. Riley, the Company received net proceeds of $19,838. The Company used the proceeds for general corporate purposes.~~
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~~Common Stock Warrants~~14.Compensation Plans

The Company issued warrants to purchase shares of the Company’s common stock to MDB Capital Group, LLC (the “MDB Warrants”), L2 Capital, LLC (the “L2 Warrants”), Strome Mezzanine Fund LP (the “Strome Warrants”),provides stock-based and ~~B. Riley Financial, Inc. (the “B. Riley Warrants”) in connection with various financing transactions (collectively, the “Financing Warrants”).~~
~~The Financing Warrants outstanding and exercisable as of September 30, 2022 are summarized as follows:~~
~~Schedule of Common Stock Financing Warrants Outstanding and Exercisable~~
Exercise Price Expiration Date Total Outstanding and Exercisable Shares
Strome Warrants $ 11.00 June 15, 2023 68,182
B. Riley Warrants 7.26 October 18, 2025 39,773
MDB Warrants 25.30 October 19, 2022 5,435
MDB Warrants 55.00 October 19, 2022 2,728
Total 116,118
~~The intrinsic value of exercisable but unexercised in-the-money stock warrants as of September 30, 2022 was $232, based on a fair market value of the Company’s common stock of $13.10~~ ~~per share on September 30, 2022.~~
~~12.~~ ~~Compensation Plans~~
~~The Company provides stock-based~~equity-based compensation in the form of (a) restricted stock awards and restricted stock units to certain employees ~~(referred to as the~~(the “Restricted ~~Stock Awards”~~Stock”), (b) stock option ~~grants to employees, directors and consultants under the 2016 Stock Incentive Plan (the “2016 Plan”), (c) stock option~~ awards, ~~restricted stock awards and units,~~ unrestricted stock awards and stock appreciation rights to employees, directors and consultants under ~~the 2019 Equity Incentive Plan~~various plans (the ~~“2019 Plan”~~“Common Stock Options”), ~~(d)~~and (c) common stock option awards, restricted stock awards and units, unrestricted stock awards, and stock appreciation rights to employees, directors and consultants under the Equity Incentive Plan (the “2022 Plan”) (collectively, the 2016 Plan, 2019 Plan and 2022 Plan arewarrants, referred to as the ~~“Equity Plans”), (e) stock option awards outside of~~ABG Warrants and Publisher Partner Warrants (collectively the ~~2016 Plan, 2019 Plan and 2022 Plan to certain officers, directors and employees (referred to~~“Warrants”) as referenced in the “Outside Options”), (f) common stock warrants to the Company’s publisher partners (referred to as the “Publisher Partner Warrants”), and (g) common stock warrants to ABG (referred to as the “ABG Warrants”). Effective with the adoption of the 2022 Plan, the Company ceased issuing new awards under the 2016 Plan and 2019 Plan.below table.

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Stock-based compensation and equity-based expense charged to operations or capitalized ~~during the three and nine months ended September 30, 2022 and 2021~~ are summarized as follows:
Summary of Stock-based Compensation
Restricted
Stock Equity Outside ABG
Awards Plans Options Warrants Totals
During the Three Months Ended September 30, 2022
Cost of revenue $ 402 $ 2,370 $ - $ - $ 2,772
Selling and marketing - 810 - - 810
General and administrative 7 4,472 - 250 4,729
Total costs charged to operations 409 7,652 - 250 8,311
Capitalized platform development - 404 - - 404
Total stock-based compensation $ 409 $ 8,056 $ - $ 250 $ 8,715

During the Three Months Ended September 30, 2021
Cost of revenue $ 12 $ 1,719 $ 1 $ - $ 1,732
Selling and marketing - 1,346 75 - 1,421
General and administrative 414 4,162 - 746 5,322
Total costs charged to operations 426 7,227 76 746 8,475
Capitalized platform development 2 482 3 - 487
Total stock-based compensation $ 428 $ 7,709 $ 79 $ 746 $ 8,962
Restricted
Stock Equity Outside ABG
Awards Plans Options Warrants Totals
During the Nine Months Ended September 30, 2022
Cost of revenue $ 1,236 $ 6,366 $ - $ - $ 7,602
Selling and marketing - 2,149 - - 2,149
General and administrative 7 13,669 105 1,245 15,026
Total costs charged to operations 1,243 22,184 105 1,245 24,777
Capitalized platform development - 1,529 - - 1,529
Total stock-based compensation $ 1,243 $ 23,713 $ 105 $ 1,245 $ 26,306

During the Nine Months Ended September 30, 2021
Cost of revenue $ 61 $ 4,865 $ 4 $ - $ 4,930
Selling and marketing - 3,835 224 - 4,059
General and administrative 560 10,642 - 1,498 12,700
Total costs charged to operations 621 19,342 228 1,498 21,689
Capitalized platform development 11 1,330 6 - 1,347
Total stock-based compensation $ 632 $ 20,672 $ 234 $ 1,498 $ 23,036
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Three Months Ended March 31, 2023
Restricted Stock Common Stock Options Warrants Totals
Cost of revenue $ 794 $ 1,291 $ - $ 2,085
Selling and marketing 65 388 - 453
General and administrative 2,352 1,291 246 3,889
Total costs charged to operations 3,211 2,970 246 6,427
Capitalized platform development - 307 - 307
Total stock-based compensation $ 3,211 $ 3,277 $ 246 $ 6,734

Three Months Ended March 31, 2022
Restricted Stock Common Stock Options Warrants Totals
Cost of revenue $ 868 $ 1,289 $ - $ 2,157
Selling and marketing 73 527 - 600
General and administrative 1,858 2,237 515 4,610
Total costs charged to operations 2,799 4,053 515 7,367
Capitalized platform development - 687 - 687
Total stock-based compensation $ 2,799 $ 4,740 $ 515 $ 8,054

Unrecognized compensation expense and expected weighted-average period to be recognized related to the stock-based compensation awards and equity-based awards as of ~~September 30, 2022 was~~March 31, 2023 were as follows:
Schedule of Unrecognized Compensation Expense
Restricted ��
Stock Equity Outside ABG
Awards Plans Options Warrants Totals
Unrecognized compensation cost $ 1,112 $ 36,606 $ - $ 1,257 $ 38,975
Expected weighted-average period expected to be recognized (in years) 0.68 2.22 - 1.25 2.14
As of March 31, 2023
Restricted Stock Common Stock Options Warrants Totals
Unrecognized compensation expense $ 10,757 $ 13,941 $ 794 $ 25,492
Weighted average period expected to be recognized (in years) 1.39 1.47 0.84 1.42
~~Further details as~~Modification of ~~the date these condensed consolidated financial statements were issued are provided under the heading~~ ~~Compensation Plans~~Awards – ~~in Note 17.~~
~~Stock Option Repricing~~
On ~~March 18, 2022,~~February 28, 2023, the Company ~~approved a repricing of~~modified certain ~~outstanding stock options (the “Stock Option Repricing”) granted under the Company’s 2016 Plan and the 2019 Plan that had an exercise price above $8.82~~ per share, including certain outstanding stock options held by senior management of the Company. The Stock Option Repricing also included certain outstanding stock options granted outside of the 2016 Plan and 2019 Plan. The Stock Options Repricing was approved by the Board and stockholders. Asequity awards as a result of the ~~Stock Option Repricing, the exercise prices~~resignation of a senior executive employee where 38,026 restricted stock units with time-based vesting that were ~~set to $~~unvested were vested and ~~8.82~~21,117 ~~per share, which was the closing sale price~~options for shares of the Company’s common stock ~~as listed on~~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 ~~NYSE American exchange on March 18, 2022. Except for~~modification of these equity awards, the ~~repricing~~Company agreed to purchase a total of 45,632 options of shares of the Company’s common stock (including previously vested options ~~under the 2019 Plan, all terms and conditions~~ of ~~each stock option remain in full force and effect. For the repricing~~shares of the Company’s common stock ~~options under~~of 24,515) as of the ~~2019 Plan,~~resignation date of the ~~Company (i) modified the exercise price; (ii) will allow cashless exercise as~~employee at a ~~method~~price of ~~paying~~$10.29 per share, reduced by the exercise price and ~~(iii) will waive a lock-up provision~~required tax withholdings, subject to certain conditions. The modification of the equity awards resulted in the ~~stock~~unamortized costs being recognized at the modification date. The cash price of $10.29 per option ~~agreements. All other term and conditions~~less the strike price 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~~8.82 ~~stock~~per 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~~68 ~~was~~being recognized at the ~~time~~modification date. The modification resulted in liability classification of the ~~Stock Option Repricing for the fully vested~~equity awards, with $68 reflected in accrued expenses and ~~included in~~other as of March 31, 2023 on the condensed consolidated ~~statement of operations, and $5,918~~ ~~will recognized over the remaining vesting term of the original award at the repricing date.~~balance sheets.

Publisher Partner Warrants – On March 13, 2023, the Company issued 9,800 warrants for shares of the Company’s common stock (3,000 warrants were issued with an effective date of November 3, 2022 and an exercise price of $10.56 and 6,800 warrants were issued with an effective date of March 13, 2023 and an exercise price of $5.30) under the warrant incentive plan approved on November 2, 2022, referred to as the New Publisher Partner Warrants, with the following terms: (i) one-third of the warrants 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.
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15.Revenue Recognition
~~13.~~ ~~Revenue Recognition~~

Disaggregation of Revenue

The following table provides information about disaggregated revenue by ~~product line,~~category, geographical market and timing of revenue recognition:
Schedule of Disaggregation of Revenue
2022 2021 2022 2021 2023 2022

Three Months Ended
September 30,

Nine Months Ended
September 30,
Three Months Ended March 31,
2022 2021 2022 2021 2023 2022
Revenue by category:
Digital revenue
Digital advertising $ 28,513 $ 18,325 $ 74,852 $ 39,397 $ 23,504 $ 21,646
Digital subscriptions 4,629 7,699 16,580 22,474 3,871 6,461
Other revenue 4,848 4,221 13,193 5,834
Licensing and syndication revenue 4,622 3,101
Other digital revenue 636 364
Total digital revenue 37,990 30,245 104,625 67,705 32,633 31,572
Print revenue
Print advertising 12,541 3,356 27,697 6,904 2,082 1,368
Print subscriptions 16,175 25,974 47,702 53,327 16,665 15,303
Total print revenue 28,716 29,330 75,399 60,231 18,747 16,671
Total $ 66,706 $ 59,575 $ 180,024 $ 127,936 $ 51,380 $ 48,243
Revenue by geographical market:
United States $ 64,187 $ 57,764 $ 174,680 $ 123,652 $ 49,575 $ 47,321
Other 2,519 1,811 5,344 4,284 1,805 922
Total $ 66,706 $ 59,575 $ 180,024 $ 127,936 $ 51,380 $ 48,243
Revenue by timing of recognition:
At point in time $ 62,077 $ 51,876 $ 163,444 $ 105,462 $ 47,509 $ 41,782
Over time 4,629 7,699 16,580 22,474 3,871 6,461
Total $ 66,706 $ 59,575 $ 180,024 $ 127,936 $ 51,380 $ 48,243
Revenue $ 66,706 $ 59,575 $ 180,024 $ 127,936
Total revenue $ 51,380 $ 48,243
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. 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
September 30, 2022 December 31, 2021

March 31, 2023
(unaudited)
December 31, 2022
As of As of
September 30, 2022 December 31, 2021
March 31, 2023
(unaudited)
December 31, 2022
Unearned revenue (short-term contract liabilities):
Digital subscriptions $ 18,020 $ 14,693
Digital revenue $ 19,342 $ 18,571
Print revenue 33,663 39,337 41,242 40,132
Total unearned revenue (short-term contract liabilities) $ 51,683 $ 54,030
Total short-term contract liabilities $ 60,584 $ 58,703
Unearned revenue (long-term contract liabilities):
Digital subscriptions $ 871 $ 1,446
Digital revenue $ 825 $ 1,118
Print revenue 10,620 13,831 20,409 18,583
Total unearned revenue (long-term contract liabilities) $ 11,491 $ 15,277
Total long-term contract liabilities $ 21,234 $ 19,701
Unearned Revenue – Unearned revenue, also referred to as contract liabilities, include payments received in advance of performance under ~~the~~certain contracts and are recognized as revenue over time. The Company records contract liabilities as unearned revenue on the condensed consolidated balance sheets.
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16.Income Taxes
~~14.~~ ~~Income Taxes~~

The provision for income taxes in interim periods is determined using an estimate of the Company’s annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of its annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The quarterly provision for income taxes, and estimate of the Company’s annual effective tax rate, are subject to variation due to several factors, including variability in pre-tax income (or loss), the mix of jurisdictions to which such income relates, changes in how the Company conducts business, and tax law developments.

The income tax provision effective tax rate ~~benefit~~ for the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ was ~~2.2~~0.04% and ~~0.3~~0.08%, respectively. The deferred income ~~tax benefit~~taxes for the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022 was primarily due to ~~discrete items.~~deferred tax liabilities on indefinite lived intangible assets.

The realization of deferred tax assets is dependent upon a variety of factors, including the generation of future taxable income, the reversal of deferred tax liabilities, and tax planning strategies. Based upon the Company’s historical operating losses and the uncertainty of future taxable income, the Company has provided a valuation allowance against most of the deferred tax assets as of ~~September 30, 2022~~March 31, 2023 and ~~2021.~~2022.

~~15.~~ ~~Related Party~~
As of March 31, 2023 and 2022, the Company has no uncertain tax positions or interest and penalties accrued.
17.Related Party Transactions

For the nine months ended September 30, 2022 and 2021, the Company had several transactions with B. Riley, a principal stockholder, where the Company paid fees associated with the common stock public offering totaling approximately $~~2,440~~ ~~and $~~0~~, respectively.~~Principal Stockholder
For the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ the Company paid in cash orinterest of $2,998 and accrued interest that was added to the principal of $1,815, respectively, on the Senior Secured Note and Delayed Draw Term Note due to BRF, which is an affiliate of B. Riley, a principal stockholder.
On March 31, 2023, the Company entered into common stock purchase agreements with certain purchasers, pursuant to which the Company agreed to issue and sell in a registered direct offering an aggregate of 2,963,918 shares of the Company’s common stock. Certain affiliates of B. Riley participated in the registered direct offering and purchased an aggregate of 1,009,021 shares of the Company’s common stock at a price per share of $3.88 per share for a total consideration of $790.
For the three months ended March 31, 2022, the Company had certain transactions with B. Riley, a principal stockholder, ofwhere it paid fees associated with the common stock public offering totaling $~~1,856~~2,440 ~~(paid in cash) and $1,641~~ (accrued interest that was added to the principal), respectively. For the nine months ended September 30, 2022 and 2021, the Company paid in cash or accrued interest that was added to the principal on the Senior Secured Note and Delayed Draw Term Note due to B. Riley, a principal stockholder, of $~~5,507~~ ~~(paid in cash) and $5,253~~ ~~(accrued interest that was added to the principal), respectively.~~.
Consulting and Service Contracts

For the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ the Company paid an entity affiliated with James C. Heckman, its former Chief Executive Officer, Roundtable Media, L.L.C., net revenue share amounts of $66 and $107, respectively, in connection with a partner agreement. For the three months ended March 31, 2022, the Company paid consulting fees of $43165 ~~and $~~52~~, respectively,~~ in connection with a consulting agreement, as amended from time to time. ~~For the nine months ended September 30, 2022 and 2021, the Company paid Mr. Heckman consulting fees of $307~~ ~~and $155~~, respectively, in connection with a consulting agreement, as amended from time to time. For the nine months ended September 30, 2022, the Company paid an entity affiliated with Mr. Heckman, Roundtable Media, L.L.C., a net revenue share amount of $52 ~~and $~~82~~, respectively, in connection with a partner agreement.~~
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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, ~~(as further described in Note 6),~~ pursuant to which the Company agreed to repurchase ~~shares of the Company’s common stock~~ from certain key personnel of HubPages, Inc., including ~~from~~ Paul Edmondson, one of the Company’s officers, and his spouse, an aggregate of ~~16,802~~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 the ~~nine~~three months ended ~~September 30,~~March 31, 2022, the Company ~~repurchased~~ paid Mr. Edmonson and his spouse $~~9,927~~269 for 3,056 shares of the Company’s common ~~stock for $874. Effective April 4, 2022, Mr. Edmondson no longer has any shares of the Company’s common stock subject to repurchase.~~stock.

~~16.~~ ~~Commitments and Contingencies~~25

~~Contingent Liability~~18.Commitments and Contingencies

In connection with the Company’s underwritten public offering in February 2022, the Company may have a contingent liability arising out of possible violations of the Securities Act of 1933, as amended (the “Securities Act”) in connection with an investor presentation, which the Company publicly filed. Specifically, the furnishing of the investor presentation publicly may have constituted an “offer to sell” as described in Section 5(b)(1) of the Securities Act and the investor presentation may be deemed to be a prospectus that did not meet the requirements of Section 10 of the Securities Act, resulting in a potential violation of Section 5(b)(1) of the Securities Act. Any liability would depend upon the number of shares purchased by investors who reviewed and relied upon the investor presentation. If a claim were brought by any such investor and a court were to conclude that the public disclosure of such investor presentation constituted a violation of the Securities Act, the Company could be required to repurchase the shares sold to the investors at the original purchase price, plus statutory interest. The Company could also incur considerable expense in contesting any such claims. As of the issuance date of these consolidated financial statements, no legal proceedings or claims have been made or threatened by any investors. The likelihood and magnitude of this contingent liability, if any, is not determinable at this time.
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.

~~17.~~ ~~Subsequent Events~~
Royalty Fees – The Company guaranteed minimum annual royalties of $15,000 to ABG-SI, LLC. The initial term of the minimum guarantee will expire December 31, 2029.
19.Subsequent Events

The Company performed an evaluation of subsequent events through the date of filing of these condensed 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 condensed consolidated financial ~~statements.~~statements.

Liquidated Damages

On April 10, 2023, the Company issued 11,766 shares of its common stock in connection with a stock purchase agreement, where the Company was liable for liquidated damages in lieu of an aggregate of $124 owed in liquidated damages.
Series H Convertible Preferred Stock
On April 17, 2023, the Company issued 207,000 shares of its common stock upon conversion of 1,500 shares of its Series H convertible preferred stock.
Common Stock
On April 14, 2023 and May 3, 2023, the Company issued in aggregate 7,254 shares of its common stock upon the vesting of certain restricted stock units.
Compensation Plans
From ~~October~~April 1, ~~2022~~2023 through the date these condensed consolidated financial statements were issued, the Company ~~accrued additional liquidated damages of $100~~ ~~(including accrued interest) as a result~~granted options for shares of the ~~Registration Rights Damages resulting from not registering Series K Preferred Stock timely,~~Company’s common stock, restricted stock units and ~~the liquidated damages will continue to accrue until the registration statement registering such preferred~~restricted stock ~~is effective, up to a maximum~~awards totaling 10,827, all of $~~473~~.which remain outstanding.

~~Athlon Acquisition~~
On September 16, 2022, management announced its plan to dispose of certain operations of Athlon, referred to as the Parade print business, after the last edition is distributed in November 2022, as well as the Relish and Spry Living print products after October 2022 (collectively, “Parade Print”). The Company expects to incur certain charges and settlement a potential liability (as further described below) in connection with these activities in the quarter ending December 31, 2022.
The Company estimates severance and related commissions for the employees, where the Company identified a number of Parade employees who are primarily focused on the print business and who will be departing in a one-time restructuring event of $~~1,000~~, ~~and a potential liability to settle an existing purchase commitment for paper used in the production of Parade Print. The potential liability amount will be recorded at the time of the disposal.~~
~~As a result of the planned disposal, certain pro forma adjustments reflected in the supplemental pro forma information are subject to change.~~
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ should be read together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report and in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, ~~2021~~2022 included in the Annual Report on Form 10-K filed with the SEC on ~~April 1, 2022.~~March 31, 2023. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of a number of ~~factors, including those set forth above.~~factors. We caution that assumptions, expectations, projections, intentions or beliefs about future events may, and often do, vary from actual results and the differences can be material. Please see ~~the section above under the heading~~ “Forward-Looking Statements.”
~~All dollar figures are presented in thousands unless otherwise stated.~~

Overview

We are a tech-powered media company that focuses on building deep content verticals powered by a best-in-class digital media platform (the “Platform”) empowering premium publishers who impact, inform, educate, and entertain. Our strategy is to focus on key verticals where audiences are passionate about a topic category (e.g., sports and finance), and where we can leverage the strength of our core brands to grow our audience and increase monetization both within our core brands as well as our media ~~publishers~~publisher partners (each, a “Publisher Partner”). Our focus is on leveraging our Platform and iconic brands in targeted verticals to maximize audience reach, improve engagement, and optimize monetization of digital publishing assets for the benefit of our users, our advertiser clients, and our greater than 40 owned and operated properties as well as properties we run on behalf of independent Publisher Partners. We operate the media businesses for Sports Illustrated, ~~(the “Sports Illustrated media business”),~~ own and operate TheStreet, Inc. ~~(“TheStreet”),~~ College Spun Media Incorporated, ~~(“The Spun”),~~Parade Media, and ~~Athlon Holdings, Inc. (“Athlon”),~~Men’s Journal and power more than ~~200~~225 independent Publisher Partners, including ~~Biography, History, and~~ the many sports team sites that comprise ~~FanNation, among others.~~FanNation. Each Publisher Partner joins the Platform by ~~invitation-only~~invitation only and is drawn from premium media brands and independent publishing businesses with the objective of augmenting our position in key verticals and optimizing the performance of the Publisher Partner. Publisher Partners incur the costs in content creation on their respective channels and receive a share of the revenue associated with their content. Because of the state-of-the-art technology and large scale of the Platform and our expertise in search engine optimization, social media, ad monetization and subscription marketing, ~~and ad monetization,~~ Publisher Partners continually benefit from our ongoing technological advances and bespoke audience development expertise. Additionally, we believe the lead brand within each vertical creates a halo benefit for all Publisher Partners in the vertical while each of them adds to the breadth and quality of content. While ~~they~~the Publisher Partners benefit from these critical performance improvements they also may save substantially in costs of technology, infrastructure, advertising sales, and member marketing and management.

Of the more than 225 Publisher Partners, a large majority of them publish content within one of our four verticals of sports, finance, lifestyle or men’s lifestyle, and oversee an online community for their respective sites, leveraging our Platform, monetization operation, distribution channels and data and analytics offerings and benefiting from our ability to engage the collective audiences within a single network. Generally, Publisher Partners are independently owned, strategic partners who receive a share of revenue from the interaction with their content. Audiences expand and advertising revenue may improve due to the scale we have achieved by combining all Publisher Partners onto a single platform and a large and experienced sales organization. They may also benefit from our membership marketing and management systems, which we believe will enhance their revenue.
Our growth strategy is to continue to expand by adding new premium publishers with high quality brands and content either as independent Publisher Partners or by acquiring publishers as owned and operated entities.

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Impact of Macroeconomic Conditions

Uncertainty in the global economy presents significant risks to our business. We are subject to continuing risks and uncertainties in connection with the current macroeconomic environment, including as a result of increases in inflation, rising interest rates and instability in the global banking system and geopolitical factors, including the ongoing conflict between Russia and Ukraine and the responses thereto, and the remaining effects of the COVID-19 pandemic. While we are closely monitoring the impact of the current macroeconomic conditions on all aspects of our business, the ultimate extent of the impact on our 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 our control and could exist for an extended period of time. As a result, we are subject to continuing risks and uncertainties and continue to closely monitor the impact of the current conditions on our business. For additional information, see the sections titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 31, 2023 and in this Quarterly Report.
Key Operating Metrics
We monitor and review the key operating metrics described below as we believe that these metrics are relevant for our industry and specifically to us and to understanding our business. Moreover, they form the basis for trends informing certain predictions related to our financial condition. Our key operating metrics focus primarily on our digital advertising revenue, which has experienced significant growth in recent periods, including ~~an 81%~~a 74% increase year-over-year from ~~2020~~2021 to ~~2021~~2022 and a ~~90%~~9% increase in the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023, as compared to the same period in fiscal ~~2021.~~2022. Management monitors and reviews these metrics because such metrics are readily measurable in real time and can provide valuable insight into the performance of and trends related to our digital advertising revenue and our overall business. We consider only those key operating metrics described here to be material to our financial condition, results of operations and future prospects.

Our key operating metrics are identified below:

● Revenue per page view (“RPM”) – represents the advertising revenue earned per 1,000 pageviews. It is calculated as our advertising revenue during a period divided by our total page views during that period and multiplied by $1,000; and

● Monthly average pageviews – represents the total number of pageviews in a given month or the average of each month’s pageviews in a fiscal quarter or year, which is calculated as the total number of page views recorded in a quarter or year divided by three months or 12 months, respectively.

For pricing indicators, we focus on RPM as it is the pricing metric most closely aligned with monthly average pageviews. RPM is an indicator of yield and pricing driven by both advertising density and demand from our advertisers.

Monthly average pageviews are measured across all properties hosted on the Arena Platform and provide us with insight into volume, engagement and effective page management and are therefore our primary measure of traffic. We utilize a third-party source, Google Analytics, to confirm this traffic data.

As described above, these key operating metrics are critical for management as they provide insights into our digital advertising revenue generation and overall business performance. This information also provides feedback on the content on our website and its ability to attract and engage users, which allows us to make strategic business decisions designed to drive more users to read or view more of our content and generate higher advertising revenue across all properties hosted on the Arena Platform.

For the ~~three and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 our RPM was ~~$18.08~~$16.77 and ~~$15.77,~~$15.02, respectively. For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 our monthly average pageviews were ~~498,031,050~~467,296,344 and 515,104,614, respectively. For the three and nine months ended September 30, 2021 our RPM was $16.46 and $13.59, respectively. For the three and nine months ended September 30, 2021 our monthly average pageviews were 378,714,372 and 325,391,284,480,352,466, respectively.
All dollar figures presented below are in thousands unless otherwise stated.
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Liquidity and Capital Resources

Cash and Working Capital Facility

As of ~~September 30, 2022,~~March 31, 2023, our principal sources of liquidity consisted of cash of ~~$13,303.~~$15,961. In addition, as of ~~September 30, 2022,~~March 31, 2023, we had ~~$6,526~~$30,441 available for additional use, subject to eligible accounts receivable, under our working capital ~~facility~~line of credit with ~~FPP~~SLR Digital Finance LLC (formerly FastPay) (“~~FastPay”~~SLR”). As of ~~September 30, 2022,~~March 31, 2023, the outstanding balance of the ~~FastPay~~SLR working capital ~~facility~~line of credit was ~~$18,474.~~$9,559. We also had accounts receivable, net of our advances from ~~FastPay~~SLR of ~~$15,188~~$14,002 as of ~~September 30, 2022.~~March 31, 2023. Our cash balance as of the issuance date of our accompanying condensed consolidated financial statements is ~~$10,934.~~$6,144.

34
Off-Balance Sheet Arrangements

As of March 31, 2023, pursuant to our line of credit with SLR, as disclosed above, in the event that our line of credit is accelerated, we will be obligated to pay SLR a termination fee of $900.
As of March 31, 2023, in connection with the Sports Illustrated media business, we guaranteed a minimum annual royalty of $15,000 through December 31, 2029, for a total of $86,250.
Material Contractual Obligations

We have material contractual obligations that arise in the normal course of business primarily consisting of employment contracts, consulting agreements, leases, liquidated damages, debt and related interest payments. Purchase obligations consist of contracts primarily related to merchandise, equipment, and third-party services, the majority of which are due in the next 12 months. See Notes 4, 78, 10 and 911 in our accompanying condensed consolidated financial statements for amounts outstanding as of ~~September 30, 2022,~~March 31, 2023, related to leases, liquidated damages, bridge notes and ~~long-term debt, respectively.~~term debt. During 2022, we assumed the lease from Men’s Journal for office space in Carlsbad, California, that expires in March 2025, and we remain responsible for $3,074 over the lease term. The lease provides for fixed payments ranging from $89 to $94 over the remainder of the lease term, with an estimate of common expenses per month of $25 through the end of the lease term. There have been no material changes ~~during~~from the nine months ended September 30, 2022 to our contractual obligations as compared to those disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” includeddisclosures in our Annual Report on Form ~~10-K for the year ended December 31, 2021.~~
~~Contingent Liability~~
We may have a contingent liability arising out of possible violations of the Securities Act in connection with an investor presentation, which we furnished as Exhibit 99.2 to our Current Report on Form 8-K and Current Report on Form 8-K/A filed on January 31, 2022 and February 1, 2022, respectively. Specifically, the furnishing of the investor presentation publicly may have constituted an “offer to sell” as described in Section 5(b)(1) of the Securities Act and the investor presentation may be deemed to be a prospectus that does not meet the requirements of Section 10 of the Securities Act, resulting in a potential violation of Section 5(b)(1) of the Securities Act. Any liability would depend upon the number of shares purchased by investors who reviewed and relied upon such investor presentation that may have constituted a potential violation of Section 5 of the Securities Act. If a claim were brought by any such ‘recipients’ of such investor presentation and a court were to conclude that the public disclosure of such investor presentation constituted a violation of Section 5 of the Securities Act, we could be required to repurchase the shares sold to the investors who reviewed such investor presentation at the original purchase price, plus statutory interest. We could also incur considerable expense in contesting any such claims. As of the date of the filing of this Quarterly Report, no legal proceedings or claims have been made or threatened by any investors in our offering. Such payments and expenses, if required, could significantly reduce the amount of working capital we have available for our operations and business plan, delay or prevent us from completing our plan of operations, or force us to raise additional funding, which funding may not be available on favorable terms, if at all.10-K.

Working Capital Deficit

We have financed our working capital requirements since inception through issuances of equity securities and various debt financings. Our working capital deficit as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 was as follows:

As of As of
September 30, 2022 December 31, 2021 March 31, 2023 December 31, 2022
Current assets $ 74,245 $ 77,671 $ 83,969 $ 78,695
Current liabilities (117,242 ) (116,413 ) (216,845 ) (216,364 )
Working capital deficit (42,997 ) (38,742 ) (132,876 ) (137,669 )

As of ~~September 30, 2022,~~March 31, 2023, we had a working capital deficit of ~~$42,997,~~$132,876, as compared to ~~$38,742~~$137,669 as of December 31, ~~2021,~~2022, consisting of ~~$74,245~~$83,969 in total current assets and ~~$117,242~~$216,845 in total current liabilities. As of December 31, ~~2021,~~2022, our working capital deficit consisted of ~~$77,671~~$78,695 in total current assets and ~~$116,413~~$216,364 in total current liabilities.

29
Our cash flows ~~during~~for the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ consisted of the following:

Nine Months Ended September 30,
2022 2021
Net cash used in operating activities $ (14,676 ) $ (8,262 )
Net cash used in investing activities (12,315 ) (10,674 )
Net cash provided by financing activities 30,945 18,130
Net increase (decrease) in cash, cash equivalents, and restricted cash $ 3,954 $ (806 )
Cash, cash equivalents, and restricted cash, end of period $ 13,805 $ 8,729
35
Three Months Ended March 31,
2023 2022
Net cash used in operating activities $ (1,672 ) $ (13,311 )
Net cash used in investing activities (1,688 ) (1,653 )
Net cash provided by (used in) financing activities 5,450 28,095
Net increase (decrease) in cash, cash equivalents, and restricted cash $ 2,090 $ 13,131
Cash, cash equivalents, and restricted cash, end of period $ 16,463 $ 22,982

For the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, net cash used in operating activities was ~~$14,676,~~$1,672, consisting primarily of ~~$184,858~~$59,394 of cash paid to employees, Publisher Partners, expert contributors, suppliers, and vendors, and for revenue share arrangements, advance of royalty fees and professional services; and ~~$7,209~~$3,252 of cash paid for interest, offset by ~~$177,391~~$60,974 of cash received from customers. For the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, net cash used in operating activities was ~~$8,262,~~$13,311, consisting primarily of ~~$132,422~~$58,227 of cash paid to employees, Publisher Partners, expert contributors, suppliers, and vendors, and for revenue share arrangements, advance of royalty fees and professional services; and ~~$902~~$2,160 of cash paid for interest, offset by ~~$125,062~~$47,076 of cash received from customers.

For the ~~nine~~three months ended ~~September 30,~~March 31, 2023, net cash used in investing activities was $1,688, consisting primarily of $1,188 for capitalized costs for our Platform and $500 for the acquisition of a business. For the three months ended March 31, 2022, net cash used in investing activities was ~~$12,315,~~$1,653 consisting primarily of ~~$10,331 for the acquisition of a business; $3,990~~$1,582 for capitalized costs for our ~~Platform;~~Platform and $444 for property and equipment, offset by $2,450 from the sale of an equity investment. For the nine months ended September 30, 2021, net cash used in investing activities was $10,674, consisting primarily of $7,357 for the acquisition of businesses; $3,017 for capitalized costs for our Platform; and $300$71 for property and equipment.

For the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, net cash provided by financing activities was ~~$30,945,~~$5,450, consisting primarily of ~~$30,490 (net~~$11,431 (excluding accrued offering costs of ~~issuance costs paid of $1,568)~~$69) in net proceeds from athe public offering of common ~~stock; $6,486~~stock less (i) $4,533 from ~~advancements~~repayments of our ~~FastPay~~SLR line of credit; (ii) $25 in payment of deferred cash payments, and ~~$94 from exercises of common stock options, offset by $3,520~~(iii) $1,423 for tax payments relating to the withholding of shares of common stock for certain ~~employees; $2,152~~employees. For the three months ended March 31, 2022, net cash provided by financing activities was $28,095 consisting primarily of $32,058 (excluding accrued offering costs of $1,568) in net proceeds from the public offering of common stock less (i) $2,697 from repayments of our SLR line of credit; (ii) $710 related to payments of restricted stock liabilities; and $453 payment for The Spun deferred cash payment. For the nine months ended September 30, 2021, net cash provided by financing activities was $18,130 consisting primarily of $19,838 (net of issuance cost paid of $167) in net proceeds from a private placement of common stock, offset by $1,165 related to payments of restricted stock liabilities; $473 from repayments of our FastPay line of credit; and $70(iii) $556 for tax payments relating to the withholding of shares of common stock for certain employees.
Results of Operations

Three Months Ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~
Three months ended March 31, 2023 versus 2022
2023 2022 $ Change % Change
Revenue $ 51,380 $ 48,243 $ 3,137 6.5 %
Cost of revenue 30,035 28,497 1,538 5.4 %
Gross profit 21,345 19,746 1,599 8.1 %
Operating expenses
Selling and marketing 17,969 17,216 753 4.4 %
General and administrative 13,053 13,514 (461 ) -3.4 %
Depreciation and amortization 4,766 4,202 564 13.4 %
Loss on disposition of assets 119 257 (138 ) -53.7 %
Total operating expenses 35,907 35,189 718 2.0 %
Loss from operations (14,562 ) (15,443 ) 881 -5.7 %
Total other expenses (4,808 ) (2,992 ) (1,816 ) 60.7 %
Loss before income taxes (19,370 ) (18,435 ) (935 ) 5.1 %
Income tax provision (7 ) (14 ) 7 -50.0 %
Net loss $ (19,377 ) $ (18,449 ) $ (928 ) 5.0 %
Basic and diluted net loss per common share $ (1.04 ) $ (1.20 ) $ 0.16 -13.3 %
Weighted average number of shares outstanding – basic and diluted 18,718,555 15,381,306

Three Months Ended September 30, 2022 versus 2021
2022 2021 $ Change % Change
Revenue $ 66,706 $ 59,575 $ 7,131 12.0 %
Cost of revenue 40,504 32,215 8,289 25.7 %
Gross profit 26,202 27,360 (1,158 ) -4.2 %
Operating expenses
Selling and marketing 20,103 22,892 (2,789 ) -12.2 %
General and administrative 13,847 14,557 (710 ) -4.9 %
Depreciation and amortization 4,478 4,055 423 10.4 %
Loss on lease termination - 7,345 (7,345 ) -100.0 %
Loss impairment of assets 209 904 (695 ) -76.9 %
Total operating expenses 38,637 49,753 (11,116 ) -22.3 %
Loss from operations (12,435 ) (22,393 ) 9,958 -44.5 %
Total other (expense) (3,523 ) (2,544 ) (979 ) 38.5 %
Loss before income taxes (15,958 ) (24,937 ) 8,979 -36.0 %
Income taxes (547 ) 230 (777 ) -337.8 %
Net loss $ (16,505 ) $ (24,707 ) $ (8,202 ) -33.2 %
Basic and diluted net loss per common share $ (0.90 ) $ (2.15 ) $ 1.25 -58.1 %
Weighted average number of common shares outstanding – basic and diluted 18,284,670 11,491,412 6,793,258 59.1 %
3630
~~Net Loss~~
For the three months ended ~~September 30, 2022, as referenced in the above table,~~March 31, 2023, net loss was ~~$16,505,~~$19,377, as compared to ~~$24,707~~$18,449 for the three months ended ~~September 30, 2021,~~March 31, 2022, which represents ~~a decrease of $8,202. The primary driver for the decrease in net loss was~~ an increase of ~~$7,131~~$928. While the loss from operations improved $881 due to a $3,137 increase in revenue, ~~with a decrease~~which was partially offset by an increase in operating expenses of ~~$11,116~~$718 during the three months ended ~~September 30, 2022.~~March 31, 2023, the increase in net loss reflected an increase in other expenses, primarily as a result of an increase in interest expense of $1,362 included in other expenses.

Revenue

The following table sets forth revenue, ~~by product line~~cost of revenue, and ~~the corresponding percent of total revenue:~~gross profit:

Three Months Ended September 30, 2022 versus 2021
2022 2021 $ Change % Change
Digital revenue
Digital advertising $ 28,513 $ 18,325 $ 10,188 55.6 %
Digital subscriptions 4,629 7,699 (3,070 ) -39.9 %
Other revenue 4,848 4,221 627 14.9 %
Total digital revenue 37,990 30,245 7,745 25.6 %
Print revenue
Print advertising 12,541 3,356 9,185 273.7 %
Print subscriptions 16,175 25,974 (9,799 ) -37.7 %
Total print revenue 28,716 29,330 (614 ) -2.1 %
Total revenue $ 66,706 $ 59,575 $ 7,131 12.0 %
Three Months Ended March 31, 2023 versus 2022
2023 2022 $ Change % Change
Revenue $ 51,380 $ 48,243 $ 3,137 6.5 %
Cost of revenue 30,035 28,497 1,538 5.4 %
Gross profit $ 21,345 $ 19,746 $ 1,599 8.1 %

For the three months ended ~~September 30, 2022,~~March 31, 2023 we had gross profit of $21,345, as ~~referenced in the above table, total revenue increased $7,131 or 12.0% from $59,575~~compared to $66,706. The majority of the revenue driver was derived from total digital revenue which increased $7,745, or 25.6%, from the prior year period primarily due to an increase in digital advertising revenue of $10,188, or 55.6%. The increase in digital advertising revenue was mainly driven by a 32% increase in monthly average pageviews and a 10% increase in revenue per pageview with 86% of the total increase driven by organic growth and the remainder due to the acquisition of Athlon. Other revenue increased by $627, or 15%, ~~despite the fact that the~~ Sports Illustrated Swim magazine (“SI Swim”) launch added $3,033 of revenue to the third quarter of 2021 but was launched in the second quarter of 2022. Total print revenue decreased $614, or 2.1%, from $29,330$19,746 for the three months ended ~~September 30, 2021 to $28,716~~March 31, 2022, an increase of $1,599. Gross profit percentage for the three months ended ~~September 30, 2022 primarily related~~March 31, 2023 was 41.5%, as compared to 40.9% for the three months ended March 31, 2022.
The improvement in gross profit percentage was driven by more favorable revenue shares on premium digital advertising. As a ~~planned~~result, Publisher Partner revenue share as a percentage of digital advertising revenue was 23.3% for the three months ended March 31, 2023, as compared to 55.0% for the three months ended March 31, 2022.
The following table sets forth revenue by category:
Three Months Ended March 31, 2023 versus 2022
2023 2022 $ Change % Change
Digital revenue:
Digital advertising $ 23,504 $ 21,646 $ 1,858 8.6 %
Digital subscriptions 3,871 6,461 (2,590 ) -40.1 %
Licensing and syndication revenue 4,622 3,101 1,521 49.0 %
Other digital revenue 636 364 272 74.7 %
Total digital revenue 32,633 31,572 1,061 3.4 %
Print revenue:
Print advertising 2,082 1,368 714 52.2 %
Print subscriptions 16,665 15,303 1,362 8.9 %
Total print revenue 18,747 16,671 2,076 12.5 %
Total revenue $ 51,380 $ 48,243 $ 3,137 6.5 %
For the three months ended March 31, 2023, total revenue increased $3,137 to $51,380 from $48,243 for the three months ended March 31, 2022. The primary sources of revenue for the three months ended March 31, 2023 were as follows: (i) digital advertising of $23,504, (ii) digital subscriptions of $3,871, (iii) licensing and syndication revenue and other digital revenue of $5,258, (iv) print advertising of $2,082 and (v) print subscriptions of $16,665.
The primary driver of the increase in our total revenue is derived from our licensing and syndication, digital advertising revenue and other digital revenue which increased by $1,521, $1,858 and $272, respectively. This was offset by a $2,590 decrease ~~from~~in digital subscriptions, resulting in a $1,061 increase in total digital revenue in the three months ended March 31, 2023 as compared to the prior year period. In addition, total print revenue increased by $2,076 as print advertising increased by $714 and print subscriptions grew by $1,362, both reflecting improvements in the results of Sports Illustrated ~~media business as we reduced the rate base from 1.7 million to 1.2 million to focus on more profitable subscriptions. This was largely offset by~~and the addition of the Athlon ~~publications,~~Outdoor properties, which were acquired ~~during~~as part of the ~~second quarter~~Parade Media acquisition in April of 2022.
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Cost of Revenue
The following table sets forth cost of revenue by category:

Three Months Ended September 30, 2022 versus 2021
2022 2021 $ Change % Change
Publisher Partner revenue share payments $ 4,471 $ 4,913 $ (442 ) -9.0 %
Technology, Platform and software licensing fees 4,851 2,363 2,488 105.3 %
Royalty fees 3,750 3,750 - 0.0 %
Content and editorial expenses 11,057 11,943 (886 ) -7.4 %
Printing, distribution and fulfillment costs 11,058 5,240 5,818 111.0 %
Amortization of developed technology and platform development 2,413 2,242 171 7.6 %
Stock-based compensation 2,772 1,732 1,040 60.0 %
Other cost of revenue 132 32 100 312.5 %
Total cost of revenue $ 40,504 $ 32,215 $ 8,289 25.7 %
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Three Months Ended March 31, 2023 versus 2022
2023 2022 $ Change % Change
Publisher Partner revenue share payments $ 4,247 $ 5,042 $ (795 ) -15.8 %
Technology, Platform and software licensing fees 4,237 3,174 1,063 33.5 %
Royalty fees 3,750 3,750 - 0.0 %
Content and editorial expenses 9,403 9,192 211 2.3 %
Printing, distribution and fulfillment costs 3,853 2,857 996 34.9 %
Amortization of developed technology and platform development 2,369 2,311 58 2.5 %
Stock-based compensation 2,085 2,157 (72 ) -3.3 %
Other cost of revenue 91 14 77 550.0 %
Total cost of revenue $ 30,035 $ 28,497 $ 1,538 5.4 %

For the three months ended ~~September 30, 2022, as referenced in the above table,~~March 31, 2023, we recognized cost of revenue of ~~$40,504,~~$30,035, as compared to ~~$32,215~~$28,497 for the three months ended ~~September 30, 2021,~~March 31, 2022, which represents an increase of ~~$8,289 or 25.7%.~~$1,538. Cost of revenue for the ~~third~~first quarter of ~~2022,~~2023 was impacted by increases in (i) technology, Platform and software licensing fees of $1,063, (ii) printing, distribution and fulfillment costs of ~~$5,818, primarily due to the Athlon acquisition, which was acquired~~$996, partially offset by decreases in ~~the second quarter~~(iii) Publisher Partner revenue share payments of ~~2022. We announced that we would be shutting down the Parade print business as of November 13, 2022, eliminating unprofitable aspects of the business.~~$795.

Operating Expenses
Selling and Marketing

The following table sets forth selling and marketing expenses from continuing operations by category:

Three Months Ended September 30, 2022 versus 2021 Three Months Ended March 31, 2023 versus 2022
2022 2021 $ Change % Change 2023 2022 $ Change % Change
Payroll and employee benefits of selling and marketing account management support teams $ 5,025 $ 3,004 $ 2,021 67.3 % $ 4,288 $ 3,281 $ 1,007 30.7 %
Stock-based compensation 810 1,421 (611 ) -43.0 % 453 600 (147 ) -24.5 %
Professional marketing services 550 882 (332 ) -37.6 % 679 617 62 10.0 %
Circulation costs 1,808 1,056 752 71.2 % 1,048 783 265 33.8 %
Subscription acquisition costs 9,778 13,013 (3,235 ) -24.9 % 10,005 9,723 282 2.9 %
Advertising costs 1,474 2,344 (870 ) -37.1 % 985 1,310 (325 ) -24.8 %
Other selling and marketing expenses 658 1,172 (514 ) -43.9 % 511 902 (391 ) -43.3 %
Total selling and marketing $ 20,103 $ 22,892 $ (2,789 ) -12.2 % $ 17,969 $ 17,216 $ 753 4.4 %
For the three months ended ~~September 30, 2022, as referenced in the above table,~~March 31, 2023, we incurred selling and marketing ~~expenses~~costs of ~~$20,103~~$17,969, as compared to ~~$22,892~~$17,216 for the three months ended ~~September 30, 2021, a decrease of $2,789 or 12.2% from the prior period.~~March 31, 2022. The ~~decrease~~increase in selling and marketing ~~expenses of $2,789 was primarily due to decreases in subscription acquisition~~ costs of ~~$3,235; advertising costs of $870; stock-based compensation of $611; and other selling and marketing expenses $514. Offsetting these decreases,~~$753 is primarily related to a $1,007 increase in payroll and employee benefits offor our selling and marketing account management support teams, ~~increased $2,021~~partially offset by a decrease in other selling and marketing expenses of $391. The increase in circulation costs ~~grew by $752, both of which were a result of~~reflects the addition of the Athlon ~~properties, which were acquired in the second quarter of 2022.~~Outdoor properties.
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General and Administrative

The following table sets forth general and administrative expenses by category:

Three Months Ended September 30, 2022 versus 2021
2022 2021 $ Change % Change
Payroll and related expenses for executive and administrative personnel $ 4,573 $ 3,586 $ 987 27.5 %
Stock-based compensation 4,729 5,322 (593 ) -11.1 %
Professional services, including accounting, legal and insurance 3,166 4,090 (924 ) -22.6 %
Other general and administrative expenses 1,379 1,559 (180 ) -11.5 %
Total general and administrative $ 13,847 $ 14,557 $ (710 ) -4.9 %
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Three Months Ended March 31, 2023 versus 2022
2023 2022 $ Change % Change
Payroll and related expenses for executive and administrative personnel $ 3,798 $ 3,974 $ (176 ) -4.4 %
Stock-based compensation 3,889 4,610 (721 ) -15.6 %
Professional services, including accounting, legal and insurance 3,425 3,638 (213 ) -5.9 %
Other general and administrative expenses 1,941 1,292 649 50.2 %
Total general and administrative $ 13,053 $ 13,514 $ (461 ) -3.4 %

For the three months ended ~~September 30, 2022, as referenced in the above table,~~March 31, 2023, we incurred general and administrative ~~expenses~~costs of ~~$13,847~~$13,053 as compared to ~~$14,557~~$13,514 for the three months ended ~~September 30, 2021,~~March 31, 2022. The $461 decrease in general and administrative expenses is primarily due to a decrease ~~of $710 or 4.9% from the prior period. The decrease is primarily related to professional services of $924; and~~in stock-based compensation of ~~$593,~~$721, partially offset by an increase in ~~payroll and related~~other general corporate expenses of ~~$987.~~$649.

Other ~~(Expenses) Income~~Expenses

The following table sets forth other ~~(expense) income:~~expenses:

Three Months Ended September 30, 2022 versus 2021 Three Months Ended March 31, 2023 versus 2022
2022 2021 $ Change % Change 2023 2022 $ Change % Change
Change in valuation of warrant derivative liabilities $ - $ 802 $ (802 ) -100.0 %
Interest expense (3,184 ) (2,512 ) (672 ) 26.8 %
Change in fair value of contingent consideration $ (499 ) $ - $ (499 ) 100.0 %
Interest expense, net (4,182 ) (2,820 ) (1,362 ) 48.3 %
Liquidated damages (339 ) (834 ) 495 -59.4 % (127 ) (172 ) 45 -26.2 %
Total other expenses $ (3,523 ) $ (2,544 ) $ (979 ) 38.5 % $ (4,808 ) $ (2,992 ) $ (1,816 ) 60.7 %

Change in ~~Valuation~~Fair Value of ~~Warrant Derivative Liabilities~~Contingent Consideration. The change in fair value of ~~$802 in the valuation~~contingent consideration of ~~warrant derivative liabilities~~$499 for the three months ended ~~September 30, 2021 was~~March 31, 2023 represents the ~~result no longer having any warrant derivative liabilities as of September 30, 2022.~~change in the put option on our common stock in connection with the Fexy Studios acquisition.

Interest Expense. We incurred interest expense of ~~$3,184~~$4,182 and $2,820 for the three months ended ~~September 30,~~March 31, 2023 and 2022, respectively, as ~~compared to $2,512 for the three months ended September 30, 2021. The increase in interest expense~~a result of ~~$672 was primarily from additional cash paid interest from~~ our ~~debt.~~debt increase.

Liquidated Damages. We recorded $127 of accrued interest on our liquidated damages ~~of $339~~payable for the three months ended ~~September 30, 2022, as compared to $834~~March 31, 2023 primarily from the issuance of our convertible debentures, Series H convertible preferred stock, Series I convertible preferred stock, Series J convertible preferred stock and Series K convertible preferred stock. We recorded $172 of accrued interest on our liquidated damages payable for the three months ended ~~September 30, 2021. The decrease~~March 31, 2022 primarily from issuance of ~~$495 primarily resulted from no further liquidated damages assessed under certain corresponding agreements and only recording interest expense related to~~ the ~~previous liquidated damages assessed.~~
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~~Nine Months Ended September 30, 2022 and 2021~~
Nine Months Ended September 30, 2022 versus 2021
2022 2021 $ Change % Change
Revenue $ 180,024 $ 127,936 $ 52,088 40.7 %
Cost of revenue 115,730 83,264 32,466 39.0 %
Gross profit 64,294 44,672 19,622 43.9 %
Operating expenses
Selling and marketing 56,626 54,232 2,394 4.4 %
General and administrative 43,325 37,587 5,738 15.3 %
Depreciation and amortization 13,124 11,982 1,142 9.5 %
Loss on lease termination - 7,345 (7,345 ) -100.0 %
Loss on impairment of assets 466 904 (438 ) -48.5 %
Total operating expenses 113,541 112,050 1,491 1.3 %
Loss from operations (49,247 ) (67,378 ) 18,131 -26.9 %
Total other (expense) (9,149 ) (3,679 ) (5,470 ) 148.7 %
Loss before income taxes (58,396 ) (71,057 ) 12,661 -17.8 %
Income taxes 1,235 230 1,005 437.0 %
Net loss $ (57,161 ) $ (70,827 ) $ 13,666 -19.3 %
Basic and diluted net loss per common share $ (3.30 ) $ (6.38 ) $ 3.08 -48.3 %
Weighted average number of common shares outstanding – basic and diluted 17,339,882 11,100,416 6,239,466 56.2 %
~~Net loss~~same securities as outlined above.

For the nine months ended September 30, 2022, as referenced in the above table, net loss was $57,161, as compared to $70,827 for the nine months ended September 30, 2021, which represents an improvement of $13,666. The primary driver for the improvement in net loss was due to an $52,088 increase in revenue, which was partially offset by an increase in cost of revenue of $32,466; and an increase in operating expenses of $1,491 during the nine months ended September 30, 2022.
~~Revenue~~
~~The following table sets forth revenue by product line and the corresponding percent of total revenue:~~
Nine Months Ended September 30, 2022 versus 2021
2022 2021 $ Change % Change
Digital revenue
Digital advertising $ 74,852 $ 39,397 $ 35,455 90.0 %
Digital subscriptions 16,580 22,474 (5,894 ) -26.2 %
Other revenue 13,193 5,834 7,359 126.1 %
Total digital revenue 104,625 67,705 36,920 54.5 %
Print revenue
Print advertising 27,697 6,904 20,793 301.2 %
Print subscriptions 47,702 53,327 (5,625 ) -10.5 %
Total print revenue 75,399 60,231 15,168 25.2 %
Total revenue $ 180,024 $ 127,936 $ 52,088 40.7 %
4033
For the nine months ended September 30, 2022, as referenced in the above table, total revenue increased $52,088, or 40.7% from $127,936 to $180,024. Total digital revenue increased $36,920, or 54.5%, from the prior year period, primarily due to an increase in digital advertising revenue of $35,455, or 90.0%. The increase in digital advertising revenue was mainly due to a 58% increase in average pageviews and a 16% increase in revenue per pageview for the nine months ended September 30, 2022, as compared to the same period in the prior year with 95% of the total increase driven by organic growth and the remainder due to the acquisition of Athlon. Other revenue increased by $7,359, or 126%, as we added new licensing and syndication relationships and by expanding existing ones to leverage our content with increased monetization. Total print revenue increased $15,168, or 25.2%, from $60,231 for the nine months ended September 30, 2021 to $75,399 for the nine months ended September 30, 2022 primarily related to $26,988 from Athlon magazine circulations, which was acquired during the second quarter of 2022, offset by a decrease of $11,820 from the Sports Illustrated media business.
~~Cost of Revenue~~
~~The following table sets forth cost of revenue by category:~~
Nine Months Ended September 30, 2022 versus 2021
2022 2021 $ Change % Change
Publisher Partner revenue share payments $ 14,242 $ 15,759 $ (1,517 ) -9.6 %
Technology, Platform and software licensing fees 12,561 7,579 4,982 65.7 %
Royalty fees 11,250 11,250 - 0.0 %
Content and editorial expenses 36,104 25,864 10,240 39.6 %
Printing, distribution and fulfillment costs 26,602 11,171 15,431 138.1 %
Amortization of developed technology and platform development 7,099 6,566 533 8.1 %
Stock-based compensation 7,602 4,930 2,672 54.2 %
Other cost of revenue 270 145 125 86.2 %
Total cost of revenue $ 115,730 $ 83,264 $ 32,466 39.0 %
For the nine months ended September 30, 2022, as referenced in the above table, we recognized cost of revenue of $115,730, as compared to $83,264 for the nine months ended September 30, 2021, which represents an increase of $32,466 or 39.0%. Cost of revenue for the nine months ended September 30, 2022 was impacted by increases in printing, distribution and fulfillment costs of $15,431; and content and editorial expenses of $10,240, with both increases primarily due to the Athlon acquisition, which occurred in the second quarter of 2022; technology, Platform and software licensing fees of $4,982; stock-based compensation of $2,672; and amortization of developed technology and platform development of $533; partially offset by a decrease in Publisher Partner revenue share payments of $1,517.
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~~Operating Expenses~~
~~Selling and Marketing~~
~~The following table sets forth selling and marketing expenses by category:~~
Nine Months Ended September 30, 2022 versus 2021
2022 2021 $ Change % Change
Payroll and employee benefits of selling and marketing account management support teams $ 13,276 $ 8,518 $ 4,758 55.9 %
Stock-based compensation 2,149 4,059 (1,910 ) -47.1 %
Professional marketing services 2,390 1,895 495 26.1 %
Circulation costs 3,613 2,831 782 27.6 %
Subscription acquisition costs 28,463 28,539 (76 ) -0.3 %
Advertising costs 4,591 5,503 (912 ) -16.6 %
Other selling and marketing expenses 2,144 2,887 (743 ) -25.7 %
Total selling and marketing $ 56,626 $ 54,232 $ 2,394 4.4 %
For the nine months ended September 30, 2022, as referenced in the above table, we incurred selling and marketing expenses of $56,626, as compared to $54,232 for the nine months ended September 30, 2021, an increase of $2,394 or 4.4% from the prior year period. The increase in selling and marketing expenses of $2,394 is primarily related to increase in payroll of selling and marketing account management support teams of $4,758, of which $3,355 was related to the addition of the Athlon business.
~~General and Administrative~~
~~The following table sets forth general and administrative expenses by category:~~
Nine Months Ended September 30, 2022 versus 2021
2022 2021 $ Change % Change
Payroll and related expenses for executive, sales and administrative personnel $ 13,501 $ 11,018 $ 2,483 22.5 %
Stock-based compensation 15,026 12,700 2,326 18.3 %
Professional services, including accounting, legal and insurance 10,043 10,125 (82 ) -0.8 %
Other general and administrative expenses 4,755 3,744 1,011 27.0 %
Total general and administrative $ 43,325 $ 37,587 $ 5,738 15.3 %
For the nine months ended September 30, 2022, as referenced in the above table, we incurred general and administrative expenses of $43,325, as compared to $37,587 for the nine months ended September 30, 2021, an increase of $5,738 or 15.3% from the prior year period. The increase was primarily related to payroll and related expenses for executive and administrative personnel of $2,483; stock-based compensation of $2,326; and other general and administrative expenses of $1,011.
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~~Other (Expenses) Income~~
~~The following table sets forth other (expense) income:~~
Nine Months Ended September 30, 2022 versus 2021
2022 2021 $ Change % Change
Change in valuation of warrant derivative liabilities $ - $ 497 $ (497 ) -100.0 %
Interest expense (8,510 ) (7,695 ) (815 ) 10.6 %
Liquidated damages (639 ) (2,198 ) 1,559 -70.9 %
Gain upon debt extinguishment - 5,717 (5,717 ) -100.0 %
Total other expenses $ (9,149 ) $ (3,679 ) $ (5,470 ) 148.7 %
~~Change in Valuation of Warrant Derivative Liabilities~~. The change of $497 in the valuation of warrant derivative liabilities for the nine months ended September 30, 2021 was the result of no longer having any warrant derivative liabilities as of September 30, 2022.
~~Interest Expense~~. We incurred interest expense of $8,510 for the nine months ended September 30, 2022, as compared to $7,695 for the nine months ended September 30, 2021. The increase in interest expense of $815 was primarily from additional cash paid interest from our debt.
~~Liquidated Damages~~. We recorded liquidated damages of $639 for the nine months ended September 30, 2022, as compared to $2,198 for the nine months ended September 30, 2021. The decrease of $1,559 primarily resulted from no further liquidated damages assessed under certain corresponding agreements and only recording interest expense related to the previous liquidated damages assessed.
~~Gain Upon Debt Extinguishment. We recorded a gain upon debt extinguishment of $5,717 (including accrued interest) pursuant to the forgiveness of the Paycheck Protection Program Loan for the nine months ended September 30, 2021.~~

Use of Non-GAAP Financial Measures

We report our financial results in accordance with generally accepted accounting principles in the United States of America (“GAAP”); however, management believes that certain non-GAAP financial measures provide users of our financial information with useful supplemental information that enables a better comparison of our performance across periods. We believe Adjusted EBITDA provides visibility to the underlying continuing operating performance by excluding the impact of certain items that are noncash in nature or not related to our core business operations. We calculate Adjusted EBITDA as net loss, adjusted for (i) interest expense, (ii) income taxes, (iii) depreciation and amortization, (iv) stock-based compensation, (v) change in ~~derivative valuations,~~fair value of contingent consideration; (vi) liquidated damages, (vii) ~~gain upon extinguishment of debt, (viii) loss on lease termination, (ix)~~ loss on impairment of assets, ~~(x) professional~~(viii) employee retention credit, and ~~vendor fees, and (xi)~~(ix) employee restructuring payments.

Our non-GAAP Adjusted EBITDA may not be comparable to a similarly titled measure used by other companies, has limitations as an analytical tool, and should not be considered in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Additionally, we do not consider our non-GAAP Adjusted EBITDA as superior to, or a substitute for, the equivalent measures calculated and presented in accordance with GAAP. Some of the limitations are that Adjusted EBITDA:

● does not reflect interest expense, or the cash required to service our debt, which reduces cash available to us;
● does not reflect deferred income taxes, which is a noncash expense;
● does not reflect depreciation and amortization expense and, although this is a noncash expense, the assets being depreciated may have to be replaced in the future, increasing our cash requirements;
● does not reflect stock-based compensation and, therefore, does not include all of our compensation costs;
● does not reflect the change in ~~derivative valuations and, although this~~fair value of contingent consideration, which is a noncash ~~expense, the change in the valuations each reporting period are not impacted by our actual business operations but is instead strongly tied to the change in the market value of our common stock;~~expense;
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● does not reflect liquidated damages and, therefore, does not include future cash requirements if we repay the liquidated damages in cash instead of shares of our common stock (which the investor would need to agree to);
● does not reflect any ~~gains upon debt extinguishment, which we do not consider in our evaluation of our business operations;~~
● ~~does not reflect any losses on termination of our leases, which is a noncash operating expense;~~
● ~~does not reflect any~~ losses from the impairment of assets, which is a noncash operating expense;
● does not reflect the ~~professional and vendor fees incurred~~employee retention credits recorded by us for ~~services provided by consultants, accountants, lawyers, and other vendors, which services were~~payroll related ~~to certain types of events that are not reflective of our business operations;~~tax credits under the Cares Act; and
● does not reflect payments related to employee restructuring changes for ~~the former Chief Financial Officer of Athlon and~~ our former Chief Executive Officer.

The following table presents a reconciliation of Adjusted EBITDA to net loss, which is the most directly comparable GAAP measure, for the periods indicated:

Three Months Ended
September 30,

Nine Months Ended
September 30,

2022 2021 2022 2021
Net loss $ (16,505 ) $ (24,707 ) $ (57,161 ) $ (70,827 )
Add:
Interest expense (1) 3,184 2,512 8,510 7,695
Deferred income taxes 547 (230 ) (1,235 ) (230 )
Depreciation and amortization (2) 6,891 6,297 20,223 18,548
Stock-based compensation (3) 8,311 8,475 24,777 21,689
Change in derivative valuations - (802 ) - (497 )
Liquidated damages (4) 339 834 639 2,198
Gain upon debt extinguishment (5) - - - (5,717 )
Loss on lease termination (6) - 7,345 - 7,345
Loss on impairment of assets (7) 209 904 466 904
Professional and vendor fees (8) - 2,124 - 5,152
Employee restructuring payments (9) - 513 679 580
Adjusted EBITDA $ 2,976 $ 3,265 $ (3,102 ) $ (13,160 )
Three Months Ended March 31,
2023 2022
Net loss $ (19,377 ) $ (18,449 )
Add (deduct):
Interest expense, net (1) 4,182 2,820
Income tax benefit 7 14
Depreciation and amortization (2) 7,135 6,513
Stock-based compensation (3) 6,427 7,367
Change in fair value of contingent consideration (4) 499 -
Liquidated damages (5) 127 172
Loss on impairment of assets (6) 119 257
Employee retention credit (7) (6,868 ) -
Employee restructuring payments (8) 3,288 174
Adjusted EBITDA $ (4,461 ) $ (1,132 )

(1) Represents interest expense (net of interest income) of $3,184 and $2,512, for the three months ended September 30, 2022 and 2021, respectively, and interest expense (net of interest income) of $8,510 and $7,695, for the nine months ended September 30, 2022 and 2021, respectively. Interest expense is related to our capital ~~structure. Interest expense~~structure and varies over time due to a variety of financing transactions. Interest expense includes ~~$281~~$930 and ~~$533~~$660 for amortization of debt discounts for the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively, ~~and $1,215 and $1,534 for amortization of debt discounts for the nine months ended September 30, 2022 and 2021,~~ as presented in our condensed consolidated statements of cash flows, which ~~are~~is a noncash item. Investors should note that interest expense will recur in future periods.
34
(2) ~~Represents depreciation~~Depreciation and amortization is related to our developed technology and Platform included within cost of revenues of ~~$2,413~~$2,369 and ~~$2,242,~~$2,311, for the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively, and depreciation and amortization included within operating expenses of ~~$4,478~~$4,766 and ~~$4,055~~$4,202 for the three months ended ~~September 30,~~March 31, 2023 and 2022, and 2021, respectively. Represents depreciation and amortization related to our developed technology and Platform included within cost of revenues of $7,099 and $6,566, for the nine months ended September 30, 2022 and 2021, respectively, and depreciation and amortization included within operating expenses of $13,124 and $11,982 for the nine months ended September 30, 2022 and 2021, respectively. We believe (i) the amount of depreciation and amortization expense in any specific period may not directly correlate to the underlying performance of our business operations and (ii) such expenses can vary significantly between periods as a result of new acquisitions and full amortization of previously acquired tangible and intangible assets. Investors should note that the use of tangible and intangible assets contributed to revenue in the periods presented and will contribute to future revenue generation and should also note that such expense will recur in future periods.
44
(3) ~~Represents~~Stock-based compensation represents noncash costs ~~arising~~arise from the grant of stock-based awards to employees, consultants and directors. We believe that excluding the effect of stock-based compensation from Adjusted EBITDA assists management and investors in making period-to-period comparisons in our operating performance because (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations, and (ii) such expenses can vary significantly between periods as a result of the timing of grants of new stock-based awards, including grants in connection with acquisitions. Additionally, we believe that excluding stock-based compensation from Adjusted EBITDA assists management and investors in making meaningful comparisons between our operating performance and the operating performance of other companies that may use different forms of employee compensation or different valuation methodologies for their stock-based compensation. Investors should note that stock-based compensation is a key incentive offered to employees whose efforts contributed to the operating results in the periods presented and are expected to contribute to operating results in future periods. Investors should also note that such expenses will recur in the future.
(4) ~~Represents~~Change in fair value of contingent consideration represents the change in the put option on our common stock in connection with the Fexy Studios acquisition.
(5) Liquidated damages (or interest expense related to accrued liquidated damages) represents amounts we owe to certain of our investors in private placements offerings conducted in fiscal years 2018 through 2020, pursuant to which we agreed to certain covenants in the respective securities purchase agreements and registration rights agreements, including the filing of resale registration statements and becoming current in our reporting obligations, which we were not able to timely meet.
~~(5)~~ ~~Represents a gain upon extinguishment of the Paycheck Protection Program Loan.~~
(6) ~~Represents our loss related to the surrender and termination~~Loss on impairment of ~~our lease of office space located in New York based on our decision to~~assets represents certain assets that are no longer ~~lease office space.~~useful.
(7) ~~Represents our impairment of certain assets that no longer are useful.~~Employee retention credit represents payroll related tax credits under the Cares Act.
(8)
Represents one-time, non-recurring third party professional and vendor fees recorded in connection with services provided by consultants, accountants, lawyers, and other vendors (these fees are collectively referred to as “Professional Fees”) related to (i) the preparation of periodic reports in order for us to become current on our Exchange Act reporting obligations, (ii) up-list to a national exchange, (iii) contemplated and completed acquisitions, (iv) public and private offerings of our securities and other financings, and (v) stockholder disputes and the implementation of our Rights Agreement.
~~The table below summarizes the costs defined above that we incurred during fiscal 2021:~~

Three Months Ended
September 30,

Nine Months Ended
September 30,

Category 2022 2021 2022 2021
(i) Catch-up periodic reports $ - $ 1,654 $ - $ 3,795
(ii) Up-list - 61 - 93
(iii) M&A - 89 - 338
(iv) Public & private offerings and other financings - 120 - 388
(v) Stockholder disputes/Rights Agreement - 200 - 538
Totals $ - $ 2,124 $ - $ 5,152
We incurred the majority of the Professional Fees during the three and nine months ended September 30, 2021 for preparation of our Exchange Act periodic reports, and because these costs were incurred for multiple reporting periods over several years simultaneously, the invoices received from our vendors itemized the services that each vendor provided for each respective reporting obligation (i.e., a quarterly or annual audit by year). As such, we were able to reasonably estimate the cost of a normal year’s compliance with Exchange Act reporting requirements related to periodic reports. Therefore, we did not adjust for (or add back) such normal year’s fees in calculating Adjusted EBITDA. Management believes that these Professional Fees represent non-recurring, infrequent and unusual expenses and does not expect to incur such expenses in the future.
~~(9)~~ ~~Represents~~Employee restructuring payments represents severance payments to ~~the former Chief Financial Officer of Athlon~~employees under employer restructuring arrangements and payments to our former Chief Executive Officer for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021.~~respectively.
Critical Accounting Policies and Estimates
Our management’s discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with GAAP. In preparing the condensed consolidated financial statements, we make estimates and judgments that affect the reported amounts of assets, liabilities, stockholders’ equity, revenue, expenses, and related disclosures. We re-evaluate our estimates on an on-going basis. Our estimates are based on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Because of the uncertainty inherent in these matters, actual results may differ from these estimates and could differ based upon other assumptions or conditions.
Except as described in Note 1, Summary of Significant Accounting Policies, of the Notes to our condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q, there have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022 that was filed with the SEC on March 31, 2023.
Recent Accounting Pronouncements
See Note 1, Summary of Significant Accounting Policies, of the Notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion about new accounting pronouncements adopted as of the date of this report.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Not applicable to a “smaller reporting company” as defined in Item 10(f)(1) of SEC Regulation S-K.

ITEM 4. 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)~~Rule13a-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.

35
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 the end of the period covered by this Quarterly Report. In light of the material weaknesses described 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 that continue and have not been remediated as of the date of filing of this Quarterly Report, we have performed additional analyses, reconciliations, and other post-closing procedures to determine whether our condensed consolidated financial statements are prepared in accordance with GAAP. Based on that evaluation, ~~conducted in accordance with SEC’s guidance in Release No. 34-55929,~~ our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of ~~such date~~March 31, 2023 in providing reasonable assurance that the 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.

45
As permitted by SEC guidance, management excluded from its assessment the operations of Athlon, which was acquired on April 1, 2022, and which accounted for approximately 14.9% of our consolidated total assets as of September 30, 2022 and approximately 17.1% of our consolidated revenue, for the nine months ended September 30, 2022.
Changes in Internal Control over Financial Reporting

In connection with our continued monitoring and maintenance of our ~~controls~~control procedures as part of the implementation of Section 404 of the Sarbanes-Oxley Act of 2002, we continue to review, test, and improve the effectiveness of our internal controls. There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the ~~period covered by this Quarterly Report~~three months ended March 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.
36
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS

From time to time, we may be subject to claims and litigation arising in the ordinary course of business. We are not currently subject to any pending or threatened legal proceedings that we believe would reasonably be expected to have a material adverse effect on our business, financial condition, results of operations or cash flows.

ITEM 1A. RISK FACTORS

There are numerous factors that affect our business and operating results, many of which are beyond our control. The following risk factor supplements and, to the extent inconsistent, supersedes, therisk factors described in Part I, “Item IA. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022 filed with the SEC on March 31, 2023 (the “2022 Form 10-K”). The risk factor included herein as well as the risk factors described in the 2022 Form 10-K should be carefully considered, together with the other information contained or incorporated by reference in this Quarterly Report on Form 10-Q and in our other filings with SEC in connection with evaluating us, our business and the forward-looking statements contained in this Quarterly ~~Report.~~Report on Form 10-Q. Additional risks and uncertainties not known to us at present, or that we currently deem immaterial, may affect us. The occurrence of any of these known or unknown risks could have a material adverse impact on our business, financial condition and results of operations.
Unfavorable economic and market conditions could adversely affect our business, reputation and results of operations.
Our services, products and properties are may be adversely impacted by uncertain economic conditions, including the impact of the ongoing COVID-19 pandemic; the Ukraine – Russia conflict; adverse changes in interest rates, foreign currency exchange rates, tax laws or tax rates; inflation; a recession; contraction in the availability of credit in the marketplace due to legislation or other economic conditions, which may potentially impair our ability to access the capital markets on terms acceptable to us or at all; and the effects of government initiatives to manage economic conditions. Moreover, there has been recent turmoil in the global banking system. For example, on March 10, 2023, Silicon Valley Bank (“SVB”) was closed by the California Department of Financial Protection & Innovation and the Federal Deposit Insurance Corporation (the “FDIC”) was named Receiver. While at the time of closing on March 10, 2023, [we had minimal cash, cash equivalents, restricted cash and investments] at SVB or under SVB management and the FDIC has taken steps to make whole all depositors of SVB, there is no assurance that similar guarantees will be made in the event of further bank closures and continued instability in the global banking system. Our ongoing cash management strategy is to maintain diversity in our deposit accounts across financial institutions, but deposits in these institutions may exceed the amount of insurance provided on such deposits and there can be no assurance that this strategy will be successful. If other banks and financial institutions enter receivership or become insolvent in the future in response to financial conditions affecting the banking system and financial markets, then our ability to access our cash, cash equivalents, restricted cash and investments may be threatened, which could have a material adverse effect on our business and financial condition. Moreover, events such as the closure of SVB, in addition to other global macroeconomic conditions, may cause further turbulence and uncertainty in the capital markets. Furthermore, we cannot predict how future economic conditions will affect our users and Publisher Partners and any negative impact on our users or Publisher Partners may also have an adverse impact on our results of operations or financial condition. A severe or prolonged economic downturn, as result of a global pandemic such as the COVID-19 pandemic or otherwise, could result in a variety of risks to our business, including weakened demand for our products and services and our ability to raise additional capital when needed on favorable terms, if at all. Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~During the three months ended September 30, 2022, we issued or repurchased unregistered securities to the extent identified in this Item 2.~~
~~Unregistered Issuances~~
None.
~~Repurchases~~
~~None.~~

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.
46
ITEM 5. OTHER INFORMATION

None.
37
ITEM 6. EXHIBITS

The following documents are filed as part of this Quarterly Report:

Exhibit
Number
Description of Document

3.1* ~~Certificate of Elimination of Series L Convertible Preferred Stock, as filed with the Delaware Secretary of State on July 18, 2022.~~
~~4.1~~ Amendment No. 1 to the Amended and Restated Rights Agreement, dated as of July 15, 2022, by and between The Arena Group Holdings, Inc. and American Stock Transfer & Trust Company, LLC., which was filed as Exhibit 4.1 to our Current Report on Form 8-K on July 15, 2022.
10.1
~~Standstill~~Form of Common Stock Purchase Agreement, dated July 15, 2022, by and among The Arena Group Holdings, Inc., B. Riley Financial, Inc., B. Riley Securities, Inc., B. Riley Principal Investments, LLC, BRF Investments, LLC, Bryant R. Riley and their affiliates and subsidiaries, which was filed as Exhibit 10.1 to ~~our~~the Company’s Current Report on Form 8-K filed on ~~July 15, 2022.~~March 31, 2023.

31.1* Chief Executive Officer’s Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2* Chief Financial Officer’s Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

~~32.1*#~~32.1# Chief Executive Officer’s Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

~~32.2*#~~32.2# Chief Financial Officer’s Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*+ Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).

101.SCH*+ Inline XBRL Taxonomy Extension Schema ~~Document.~~Document

101.CAL*+ Inline XBRL Taxonomy Extension Calculation Linkbase ~~Document.~~Document

101.LAB*+ Inline XBRL Taxonomy Extension Label Linkbase ~~Document.~~Document

101.PRE*+ Inline XBRL Taxonomy Extension Presentation Linkbase ~~Document.~~Document

101.DEF*+ Inline XBRL Taxonomy Extension Definition Linkbase ~~Document.~~Document

~~104~~104* Cover Page Interactive Data File (embedded within the Inline XBRL document).

* 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.

~~+ In accordance with Regulation S-T, the Inline XBRL related information on Exhibit No. 101 to this Quarterly Report on Form 10-Q shall be deemed “furnished” herewith but not “filed”.~~
4738

SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

The Arena Group Holdings, Inc.

Date: ~~November 9, 2022~~May 10, 2023 By: /s/ ROSS LEVINSOHN
Ross Levinsohn
Chief Executive Officer
(Principal Executive Officer)

Date: ~~November 9, 2022~~May 10, 2023 By: /s/ ~~SPIROS CHRISTOFORATOS~~DOUGLAS B. SMITH
~~Spiros Christoforatos~~Douglas B. Smith
Chief ~~Accounting~~Financial Officer
(Principal ~~Accounting~~Financial Officer)

4839

	Page Number

PART I - FINANCIAL INFORMATION	44

Item 1. Condensed Consolidated Financial Statements	44

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	2733

Item 3. Quantitative and Qualitative Disclosures About Market Risk	35
	45
Item 4. Controls and Procedures	35

~~Item 4. Controls and Procedures~~PART II - OTHER INFORMATION	4537

~~PART II - OTHER INFORMATION~~Item 1. Legal Proceedings	4637

~~Item 1. Legal Proceedings~~	46

Item 1A. Risk Factors	4637

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	37
	46
Item 3. Defaults Upon Senior Securities	37

Item 4. Mine Safety Disclosures	37

Item 5. Other Information	37

Item 6. Exhibits	38

~~Item 3. Defaults Upon Senior Securities~~SIGNATURES	3946

~~Item 4. Mine Safety Disclosures~~	46

~~Item 5. Other Information~~	47

~~Item 6. Exhibits~~	47

~~SIGNATURES~~	48

	September 30, 2022 (unaudited)			December 31, 2021
	($ in thousands, except share data)
Assets
Current assets:
Cash and cash equivalents	$	13,303		$	9,349
Restricted cash		502			502
Accounts receivable, net		33,662			21,660
Subscription acquisition costs, current portion		22,800			30,162
Royalty fees		-			11,250
Prepayments and other current assets		3,978			4,748
Total current assets		74,245			77,671
Property and equipment, net		793			636
Operating lease right-of-use assets		415			528
Platform development, net		10,339			9,299
Subscription acquisition costs, net of current portion		7,497			8,235
Acquired and other intangible assets, net		51,155			57,356
Other long-term assets		564			639
Goodwill		22,554			19,619
Total assets	$	167,562		$	173,983
Liabilities, mezzanine equity and stockholders’ deficiency
Current liabilities:
Accounts payable	$	11,746		$	11,982
Accrued expenses and other		22,354			24,011
Line of credit		18,474			11,988
Unearned revenue		51,683			54,030
Subscription refund liability		837			3,087
Operating lease liabilities		413			374
Liquidated damages payable		5,836			5,197
Current portion of long-term debt		5,899			5,744
Total current liabilities		117,242			116,413
Unearned revenue, net of current portion		11,491			15,277
Operating lease liabilities, net of current portion		471			785
Liquidating damages payable, net of current portion		-			7,008
Other long-term liabilities		3,771			7,556
Deferred tax liabilities		403			362
Long-term debt		65,433			64,373
Total liabilities		198,811			211,774
Commitments and contingencies (Note 16)		-
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 September 30, 2022 and December 31, 2021		168			168
Series H convertible preferred stock, $0.01 par value, $1,000 per share liquidation value and 23,000 shares designated; aggregate liquidation value: $14,556 and $15,066; Series H shares issued and outstanding: 14,556 and 15,066; common shares issuable upon conversion: 2,008,728 and 2,075,200 at September 30, 2022 and December 31, 2021, respectively		13,207			13,718
Total mezzanine equity		13,375			13,886
Stockholders’ deficiency:
Common stock, $0.01 par value, authorized 1,000,000,000 shares; issued and outstanding: 18,149,622 and 12,632,947 shares at September 30, 2022 and December 31, 2021, respectively		182			126
Common stock to be issued		-			-
Additional paid-in capital		264,568			200,410
Accumulated deficit		(309,374	)		(252,213	)
Total stockholders’ deficiency		(44,624	)		(51,677	)
Total liabilities, mezzanine equity and stockholders’ deficiency	$	167,562		$	173,983

	March 31, 2023 (unaudited)			December 31, 2022
	($ in thousands, except share data)
Assets
Current assets:
Cash and cash equivalents	$	15,961		$	13,871
Restricted cash		502			502
Accounts receivable, net		23,561			33,950
Subscription acquisition costs, current portion		31,908			25,931
Prepayments and other current assets		12,037			4,441
Total current assets		83,969			78,695
Property and equipment, net		565			735
Operating lease right-of-use assets		327			372
Platform development, net		10,189			10,330
Subscription acquisition costs, net of current portion		12,460			14,133
Acquired and other intangible assets, net		54,844			58,970
Other long-term assets		1,025			1,140
Goodwill		41,329			39,344
Total assets	$	204,708		$	203,719
Liabilities, mezzanine equity and stockholders’ deficiency
Current liabilities:
Accounts payable	$	15,458		$	12,863
Accrued expenses and other		21,467			23,102
Line of credit		9,559			14,092
Unearned revenue		60,584			58,703
Subscription refund liability		940			845
Operating lease liability		442			427
Contingent consideration		1,060			-
Liquidated damages payable		5,970			5,843
Bridge notes		35,433			34,805
Term debt		65,932			65,684
Total current liabilities		216,845			216,364
Unearned revenue, net of current portion		21,234			19,701
Operating lease liability, net of current portion		242			358
Liquidated damages payable, net of current portion		124			494
Other long-term liabilities		5,314			5,307
Deferred tax liabilities		472			465
Total liabilities		244,231			242,689
Commitments and contingencies (Note 18)		-			-
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 March 31, 2023 and December 31, 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: $14,356; Series H shares issued and outstanding: 14,356; common shares issuable upon conversion: 1,981,128 at March 31, 2023 and December 31, 2022		13,008			13,008
Total mezzanine equity		13,176			13,176
Stockholders’ deficiency:
Common stock, $0.01 par value, authorized 1,000,000,000 shares; issued and outstanding: 21,773,078 and 18,303,193 shares at March 31, 2023 and December 31, 2022, respectively		217			182
Common stock to be issued		-			-
Additional paid-in capital		289,532			270,743
Accumulated deficit		(342,448	)		(323,071	)
Total stockholders’ deficiency		(52,699	)		(52,146	)
Total liabilities, mezzanine equity and stockholders’ deficiency	$	204,708		$	203,719

	2023			2022
	Three Months Ended March 31,
	2023			2022
	($ in thousands, except per share data)
Revenue	$	51,380		$	48,243
Cost of revenue (includes amortization of platform development and developed technology for 2023 and 2022 of $2,369 and $2,311, respectively)		30,035			28,497
Gross profit		21,345			19,746
Operating expenses
Selling and marketing		17,969			17,216
General and administrative		13,053			13,514
Depreciation and amortization		4,766			4,202
Loss on impairment of assets		119			257
Total operating expenses		35,907			35,189
Loss from operations		(14,562	)		(15,443	)
Other expenses
Change in fair value of contingent consideration		(499	)		-
Interest expense		(4,182	)		(2,820	)
Liquidated damages		(127	)		(172	)
Total other expenses		(4,808	)		(2,992	)
Loss before income taxes		(19,370	)		(18,435	)
Income tax provision		(7	)		(14	)
Net loss	$	(19,377	)	$	(18,449	)
Basic and diluted net loss per common share	$	(1.04	)	$	(1.20	)
Weighted average number of common shares outstanding – basic and diluted		18,718,555			15,381,306

	2022			2021			2022			2021
	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
	($ in thousands, except share data)
Revenue	$	66,706		$	59,575		$	180,024		$	127,936
Cost of revenue (includes amortization of developed technology and platform development for three months ended 2022 and 2021 of $2,413 and $2,242, respectively and for the nine months ended 2022 and 2021 of $7,099 and $6,566, respectively)		40,504			32,215			115,730			83,264
Gross profit		26,202			27,360			64,294			44,672
Operating expenses
Selling and marketing		20,103			22,892			56,626			54,232
General and administrative		13,847			14,557			43,325			37,587
Depreciation and amortization		4,478			4,055			13,124			11,982
Loss on lease termination		-			7,345			-			7,345
Loss on impairment of assets		209			904			466			904
Total operating expenses		38,637			49,753			113,541			112,050
Loss from operations		(12,435	)		(22,393	)		(49,247	)		(67,378	)
Other (expense) income
Change in valuation of warrant derivative liabilities		-			802			-			497
Interest expense, net		(3,184	)		(2,512	)		(8,510	)		(7,695	)
Liquidated damages		(339	)		(834	)		(639	)		(2,198	)
Gain upon debt extinguishment		-			-			-			5,717
Total other (expense) income		(3,523	)		(2,544	)		(9,149	)		(3,679	)
Loss before income taxes		(15,958	)		(24,937	)		(58,396	)		(71,057	)
Income taxes		(547	)		230			1,235			230
Net loss	$	(16,505	)	$	(24,707	)	$	(57,161	)	$	(70,827	)
Basic and diluted net loss per common share	$	(0.90	)	$	(2.15	)	$	(3.30	)	$	(6.38	)
Weighted average number of common shares outstanding – basic and diluted		18,284,670			11,491,412			17,339,882			11,100,416

	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 per 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 the acquisition of Fexy Studios		274,692			3			-		-		1,997			-			2,000
Issuance of common stock in connection with settlement of liquidated damages		35,486			-			-		-		324			-			324
Gain upon issuance of common stock in connection with settlement of liquidated damages		-			-			-		-		46			-			46
Issuance of common stock for restricted stock units		397,376			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 registered direct offering		2,963,918			30			-		-		11,181			-			11,211
Reclassification to liability upon modification of common stock option		-			-			-		-		(68	)		-			(68	)
Stock-based compensation		-			-			-		-		6,734			-			6,734
Issuance of common stock upon conversion of Series H convertible preferred stock
Issuance of common stock upon conversion of Series H convertible preferred stock, shares
Issuance of common stock for restricted stock units in connection with an acquisition
Issuance of common stock for restricted stock units in connection with an acquisition, shares
Issuance of common stock in connection with professional services
Issuance of common stock in connection with professional services, shares
Repurchase restricted stock classified as liabilities
Repurchase restricted stock classified as liabilities, shares
Issuance of common stock in connection with public offering
Issuance of common stock in connection with public offering, shares
Net loss		-			-			-		-		-			(19,377	)		(19,377	)
Balance at March 31, 2023		21,773,078		$	217			41,283	$	-	$	289,532		$	(342,448	)	$	(52,699	)

	Common Stock						Common Stock to be Issued					Additional						Total
	Shares			Par Value			Shares			Par Value		Paid-in Capital			Accumulated Deficit			Stockholders’ Deficiency
	($ in thousands, except share data)
Balance at January 1, 2022		12,632,947		$	126			49,134		$	-	$	200,410		$	(252,213	)	$	(51,677	)
Issuance of common stock upon conversion of Series H convertible preferred stock		70,380			1			-			-		510			-			511
Issuance of common stock for restricted stock units in connection with an acquisition		16,760			-			-			-		-			-			-
Issuance of common stock in connection with professional services		14,617			-			-			-		184			-			184
Issuance of common stock in connection with settlement of liquidated damages		505,671			5			-			-		6,680			-			6,685
Gain upon issuance of common stock in connection with settlement of liquidated damages		-			-			-			-		323			-			323
Issuance of common stock for restricted stock units		718,530			7			-			-		(7	)		-			-
Issuance of common stock upon cashless exercise of stock options		20			-			-			-		-			-			-
Common stock withheld for taxes		(324,798	)		(2	)		-			-		(3,518	)		-			(3,520	)
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
Issuance of common stock in connection with the acquisition of Athlon		314,103			3			-			-		3,138			-			3,141
Issuance of common stock upon exercise (including cashless exercise) of stock options		38,152			-			-			-		94			-			94
Issuance of common stock in connection with Say Media merger		7,851			-			(7,851	)		-		-			-			-
Stock-based compensation		-			-			-			-		26,306			-			26,306
Net loss		-			-			-			-		-			(57,161	)		(57,161	)
Balance at September 30, 2022		18,149,622		$	182			41,283		$	-	$	264,568		$	(309,374	)	$	(44,624	)

	2022			2021
	Nine Months Ended September 30,
	2022			2021
	($ in thousands)
Cash flows from operating activities
Net loss	$	(57,161	)	$	(70,827	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment		395			334
Amortization of platform development and intangible assets		19,828			18,214
Gain upon debt extinguishment		-			(5,717	)
Loss on termination of lease		-			7,345
Amortization of debt discounts		1,215			1,534
Loss on impairments of assets		466			904
Change in valuation of warrant derivative liabilities		-			(497	)
Noncash and accrued interest		86			5,273
Liquidated damages		639			2,198
Stock-based compensation		24,777			21,689
Deferred income taxes		(1,235	)		(230	)
Other		468			(1,060	)
Change in operating assets and liabilities net of effect of business combination:
Accounts receivable		(1,385	)		(173	)
Subscription acquisition costs		8,100			(8,434	)
Royalty fees		11,250			11,250
Prepayments and other current assets		2,107			(78	)
Other long-term assets		75			639
Accounts payable		(7,652	)		1,215
Accrued expenses and other		(3,390	)		5,566
Unearned revenue		(7,382	)		5,389
Subscription refund liability		(2,250	)		344
Operating lease liabilities		(162	)		(2,448	)
Other long-term liabilities		(3,465	)		(692	)
Net cash used in operating activities		(14,676	)		(8,262	)
Cash flows from investing activities
Purchases of property and equipment		(444	)		(300	)
Capitalized platform development		(3,990	)		(3,017	)
Proceeds from sale of equity investment		2,450			-
Payments for acquisition of business, net of cash acquired		(10,331	)		(7,357	)
Net cash used in investing activities		(12,315	)		(10,674	)
Cash flows from financing activities
Borrowings (repayments) under line of credit		6,486			(473	)
Proceeds from common stock public offering, net of offering costs		32,058			-
Payments of issuance costs from common stock public offering		(1,568	)		-
Net exercise of common stock options		94			-
Payment of The Spun deferred cash payment		(453	)		-
Proceeds from common stock private placement		-			20,005
Payments of issuance costs from common stock private placement		-			(167	)
Payment for taxes related to repurchase of restricted common stock		(3,520	)		(70	)
Payment of restricted stock liabilities		(2,152	)		(1,165	)
Net cash provided by financing activities		30,945			18,130
Net increase (decrease) in cash, cash equivalents, and restricted cash		3,954			(806	)
Cash, cash equivalents, and restricted cash – beginning of period		9,851			9,535
Cash, cash equivalents, and restricted cash – end of period	$	13,805		$	8,729
Cash, cash equivalents, and restricted cash
Cash and cash equivalents	$	13,303		$	8,228
Restricted cash		502			501
Total cash, cash equivalents, and restricted cash	$	13,805		$	8,729
Supplemental disclosure of cash flow information
Cash paid for interest	$	7,209		$	902
Cash paid for income taxes		-			-
Noncash investing and financing activities
Reclassification of stock-based compensation to platform development	$	1,529		$	1,347
Restricted stock issued in connection with acquisition of Fulltime Fantasy		-			503
Deferred cash payments in connection with acquisition of Fulltime Fantasy		-			419
Issuance of common stock in connection with settlement of liquidated damages		7,008			-
Issuance of common stock in connection with professional services		-			125
Common stock issued in connection with acquisition of Athlon		3,141			-
Deferred cash payments in connection with acquisition of Athlon		949			-
Assumption of liabilities in connection with acquisition of Athlon		11,602			-
Deferred cash payments in connection with acquisition of The Spun		-			905
Assumption of liabilities in connection with acquisition of The Spun		-			2
Conversion of Series H convertible preferred stock into common stock		511			-


Cash	$	500
Common stock		2,000
Contingent consideration		561
Deferred cash payments, as discounted		246
Total purchase consideration	$	3,307


Cash	$	12,085
Common stock		3,141
Deferred cash payments, as discounted		949
Total purchase consideration	$	16,175


Cash	$	2,604
Accounts receivable		10,855
Other current assets		1,337
Equity investment		2,450
Fixed assets		108
Digital content		355
Advertiser relationships		6,132
Trade names		2,277
Goodwill		2,935
Accounts payable		(7,416	)
Accrued expenses and other		(2,440	)
Unearned revenue		(1,203	)
Other long-term liabilities		(543	)
Deferred tax liabilities		(1,276	)
Net assets acquired	$	16,175


Advertiser relationships	$	663
Brand names		659
Goodwill		1,985
Net assets acquired	$	3,307


Cash	$	10,830
Deferred cash payments, as discounted		905
Total purchase consideration	$	11,735


Cash	$	3,214
Accounts receivable		1,772
Other current assets		5
Brand name		5,175
Goodwill		3,479
Accrued expenses and other		(85)
Deferred tax liabilities		(1,825)
Net assets acquired	$	11,735

Cash (including $35,000 of transaction related costs)	$	335
Restricted stock		168
Deferred cash payments		419
Deferred restricted stock		335
Total purchase consideration	$	1,257

	Three Months Ended March 31, 2023 (unaudited)			Year Ended December 31, 2022
Allowance for doubtful accounts beginning of period	$	2,236		$	1,578
Additions		64			980
Deductions – write-offs		(28	)		(322	)
Allowance for doubtful accounts end of period	$	2,272		$	2,236

	March 31, 2023 (unaudited)		December 31, 2022
	As of
	March 31, 2023 (unaudited)		December 31, 2022
Prepaid expenses	$	3,840	$	2,321
Prepaid supplies		923		927
Refundable income and franchise taxes		157		957
Unamortized debt costs		216		216
Employee retention credits		6,868		-
Other receivables		33		20
Total prepayments and other current assets	$	12,037	$	4,441

	September 30, 2022			December 31, 2021			March 31, 2023 (unaudited)			December 31, 2022
	As of						As of
	September 30, 2022			December 31, 2021			March 31, 2023 (unaudited)			December 31, 2022
Office equipment and computers	$	1,670		$	1,345		$	1,777		$	1,744
Furniture and fixtures		228			1			133			240
Property and equipment, gross		1,898			1,346
Property and equipment, Gross								1,910			1,984
Less accumulated depreciation and amortization		(1,105	)		(710	)		(1,345	)		(1,249	)
Net property and equipment	$	793		$	636		$	565		$	735


Platform development beginning of year	$	21,997
Payroll-based costs capitalized during the period		3,990
Platform development beginning of period				$	21,493
Payroll-based costs capitalized					1,188
Less dispositions		(7,357	)		(160	)
Total capitalized costs		18,630			22,521
Stock-based compensation		1,529			307
Impairments		(211	)		(64	)
Platform development end of period	$	19,948		$	22,764

	As of September 30, 2022							As of December 31, 2021							As of March 31, 2023 (unaudited)							As of December 31, 2022
	Carrying Amount		Accumulated Amortization			Net Carrying Amount		Carrying Amount		Accumulated Amortization			Net Carrying Amount		Carrying Amount		Accumulated Amortization			Net Carrying Amount		Carrying Amount		Accumulated Amortization			Net Carrying Amount
Developed technology	$	17,333	$	(14,069	)	$	3,264	$	17,579	$	(11,465	)	$	6,114	$	17,333	$	(15,679	)	$	1,654	$	17,333	$	(14,883	)	$	2,450
Trade names		5,396		(1,069	)		4,327		3,328		(782	)		2,546
Brand names		6,025		(685	)		5,340		5,175		(298	)		4,877
Trade name																5,380		(1,287	)		4,093		5,380		(1,180	)		4,200
Brand name																12,774		(1,274	)		11,500		12,115		(908	)		11,207
Subscriber relationships		73,459		(43,510	)		29,949		73,459		(32,623	)		40,836		73,459		(50,769	)		22,690		73,459		(47,146	)		26,313
Advertiser relationships		8,372		(1,113	)		7,259		2,240		(570	)		1,670		15,965		(1,776	)		14,189		15,302		(1,368	)		13,934
Database																2,397		(1,856	)		541		2,397		(1,753	)		644
Digital content		355		(89	)		266		-		-			-		355		(178	)		177		355		(133	)		222
Database		2,397		(1,647	)		750		2,397		(1,104	)		1,293
Subtotal amortizable intangible assets		113,337		(62,182	)		51,155		104,178		(46,842	)		57,336
Website domain name		-		-			-		20		-			20
Total intangible assets	$	113,337	$	(62,182	)	$	51,155	$	104,198	$	(46,842	)	$	57,356	$	127,663	$	(72,819	)	$	54,844	$	126,341	$	(67,371	)	$	58,970

	Nine Months Ended			Year Ended			Three Months Ended March 31,
	September 30, 2022			December 31, 2021			2023			2022
Operating lease costs during the period (1)	$	727		$	2,718		$	240		$	179
Cash payments included in the measurement of operating lease liabilities during the period	$	351		$	2,787		$	121		$	117
Weighted-average remaining lease term (in years) as of period-end		2.01			2.75			1.51			2.51
Weighted-average discount rate during the period		9.90	%		9.90	%		9.9	%		9.9	%

Years Ending December 31,
2022 (remaining three months of the year)	$	120
2023		486
2023 (remaining nine months of the year)				$	366
2024		373			373
Minimum lease payments		979			739
Less imputed interest		(95	)		(55	)
Present value of operating lease liability	$	884		$	684
Current portion of operating lease liability	$	413		$	442
Long-term portion of operating lease liability		471			242
Total operating lease liability	$	884		$	684

	As of September 30, 2022								As of March 31, 2023 (unaudited)
	Registration Rights Damages		Public Information Failure Damages		Accrued Interest		Balance		Registration Rights Damages		Public Information Failure Damages		Accrued Interest		Balance
MDB common stock to be issued (1)	$	15	$	-	$	-	$	15	$	15	$	-	$	-	$	15
Series H convertible preferred stock		618		626		533		1,777		618		626		607		1,851
Convertible debentures		-		704		258		962		-		704		300		1,004
Series J convertible preferred stock		932		932		467		2,331		932		932		580		2,444
Series K convertible preferred stock		191		478		82		751		306		289		185		780
Total	$	1,756	$	2,740	$	1,340	$	5,836	$	1,871	$	2,551	$	1,672	$	6,094

	●	~~On March 24, 2020, the Company entered into~~ a ~~second amended and restated note when the principal balance outstanding under its note issued on September 19, 2019 was $51,336~~ ~~(including accrued interest), due on September 14, 2022 (as further amended). The terms of the note also permitted~~provision for the Company to enter into a Delayed Draw Term ~~Note~~Notes (as described below), in ~~the~~an aggregate principal amount of $~~12,000~~9,928 as of December 31, 2021 (the Company repaid $5,928 on December 31, 2022);

	●	~~On October 23, 2020,~~a provision where the Company ~~entered into a first amendment~~added $13,852 to ~~second amended and restated note issued on March 24, 2020 (“Amendment 1”), where~~ the ~~maturity date was changed to December 31, 2022 (as further amended) from September 14, 2022, subject to certain acceleration conditions and~~principal balance of the notes for interest payable on the ~~note~~notes on last day of a fiscal quarter from September 30, 2020 ~~December 31, 2020, March 31, 2021, September 30, 2021, September 30, 2021, and~~to December 31, 2021 ~~will be~~as payable in-kind;

	●	a provision where the paid in-kind ~~in arrears on the last day of such fiscal quarter. Alternatively, at the option of the holder, such~~ interest amounts originally could have been paid in shares of previously designated Series K Preferred Stock; however, after December 18, 2020, the date the Series K Preferred Stock was converted into shares of the Company’s common stock, such interest amounts can be ~~converted into~~paid in shares of the Company’s common stock based upon the conversion rate specified in the Certificate of Designation for the Series K ~~Preferred Stock,~~convertible preferred stock, subject to certain adjustments;

	●	~~On May 19, 2021, the Company entered into a second amendment to the second amended and restated note issued March 24, 2020 (“Amendment 2”), pursuant to which: (i) the~~an interest rate ~~on the Senior Secured Note, as defined below, decreased from a rate~~ of ~~12.0~~10.0%% per annum, subject to adjustment in the event of default, with a ~~rate of~~ ~~10.0% per annum; and (ii) the Company agreed~~provision that within one (1) business day after receipt of cash proceeds from any issuance of equity interests, itunless waived, the Company will prepay ~~the~~ certain obligations in an amount equal to such cash proceeds, net of underwriting discounts and commissions; provided, that, this mandatory prepayment obligation does not apply to any proceeds that the Company received from shares of the Company’s common stock issued pursuant to a certain securities purchase agreement during the 90-day period commencing on May 20, 2021;

	●	~~On December 6, 2021,~~interest on the ~~Company entered into a third amendment~~notes will be payable after February 15, 2022, at the agent’s sole discretion, either (a) in cash quarterly in arrears on the last day of each fiscal quarter or (b) by continuing to add such interest due on such payment dates to the ~~second amended and restated note issued March 24, 2020 (“Amendment 3”), where the Company was permitted to increase the FastPay line of credit in an aggregate~~ principal amount ~~not~~of the notes;

	●	a maturity date of December 31, 2023, subject to ~~exceed $~~certain acceleration conditions;
~~25,000~~;
	●	all borrowings under the notes to be collateralized by substantially all assets of the Company; and

	●	~~On January 23, 2022,~~ the Company ~~entered~~to enter into ~~a fourth amendment~~the Bridge Notes for $36,000 and to increase the ~~second amended and restated note issued March 24, 2020 (“Amendment 4”), where the maturity date on the note was extended~~line of credit with SLR in an aggregate principal amount not to (i) December 31, 2023 from December 31, 2022 upon the consummation of the equity financing on February 15, 2022 (further details are provided below), or (ii) the date accelerated pursuant to certain terms of Amendment 4.exceed $40,000.

	●	~~On March 24, 2020, the Company entered into a delayed draw term note (the “Delayed Draw Term Note”) with~~ an interest rate of ~~15.0~~10.0%% per annum, ~~pursuant~~subject to ~~the second amended and restated note purchase agreement,~~adjustment in the ~~aggregate principal amount~~event of $~~12,000. The terms of the note provided that up to $8,000~~ ~~in principal amount was due on March 31, 2021;~~default;

	●	~~On March 24, 2020,~~interest on the ~~Company drew down $6,914~~ ~~under~~notes to be payable after February 15, 2022, at the ~~Delayed Draw Term Note, with interest payable in-kind~~agent’s sole discretion, either (a) in cash quarterly in arrears on the last day of each fiscal ~~quarter;~~quarter or (b) by continuing to add such interest due on such payment dates to the principal amount of the notes;

	●	~~On October 23, 2020, pursuant to the terms of Amendment 1, the~~a maturity date ~~of the Delayed Draw Term Note was changed~~on December 31, 2023, subject to March 31, 2022 (as further amended) from March 31, 2021. Amendment 1 also provided that the holder, could originally elect, in lieu of receipt of cash for payment of all or any portion of the interest due or cash payments up to a certain conversion portion of the Delayed Draw Term Note, to receive shares of Series K Preferred Stock; however, after December 18, 2020, the date the Series K Preferred Stock converted into shares of the Company’s common stock, the holder may elect, in lieu of receipt of cash for such amounts, shares of the Company’s common stock at the price the Company last sold shares of the Company’s common stock;

	●	~~On October 23, 2020, $3,367~~, including principal and accrued interest of the Delayed Draw Term Note, converted into shares of the Company’s Series K Preferred Stock, which shares were further converted into shares of the Company’s common stock;

	●	~~On May 19, 2021, pursuant to Amendment 2, the interest rate on the Delayed Draw Term Note decreased to a rate of~~ ~~10.0% per annum from a rate of~~ ~~15.0% per annum;~~

	●	~~On December 28, 2021, the Company drew down $5,086~~ ~~under the Delayed Draw Term Note, and after payment of commitment and funding fees paid of $509, the Company received net proceeds of $4,578~~;acceleration terms; and

	●	~~On February 15, 2022, pursuant~~all borrowings under the notes to ~~Amendment 4,~~be collateralized by substantially all assets of the ~~maturity date on the Delayed Draw Term Note was extended to (i) December 31, 2022 from March 31, 2022 for $5,925~~ ~~of principal due and (ii) December 31, 2023 from March 31, 2022 for $4,000~~ ~~of principal due, subject to certain acceleration terms.~~Company.

	As of September 30, 2022							As of December 31, 2021
	Principal Balance (including accrued interest)		Unamortized Discount and Debt Issuance Costs			Carrying Value		Principal Balance (including accrued interest)		Unamortized Discount and Debt Issuance Costs			Carrying Value
Senior Secured Note, as amended, matures December 31, 2023	$	62,691	$	(1,132	)	$	61,559	$	62,691	$	(1,935	)	$	60,756
Delayed Draw Term Note, as amended, matures December 31, 2023		9,928		(155	)		9,773		9,928		(567	)		9,361
Total	$	72,619	$	(1,287	)	$	71,332	$	72,619	$	(2,502	)	$	70,117
Carrying value
Current portion						$	5,899						$	5,744
Long-term portion							65,433							64,373
Total						$	71,332						$	70,117

	As of March 31, 2023 (unaudited)							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, as amended, matures December 31, 2023	$	62,691	$	(681	)	$	62,010	$	62,691	$	(904	)	$	61,787
Delayed Draw Term Notes, as amended, matures December 31, 2023		4,000		(78	)		3,922		4,000		(103	)		3,897
Total	$	66,691	$	(759	)	$	65,932	$	66,691	$	(1,007	)	$	65,684

	●	1,800 authorized shares designated as “Series G Convertible Preferred Stock”, of which 168 shares are outstanding.

	●	23,000 authorized shares designated as “Series H Convertible Preferred Stock” (as further described below), of which ~~14,556~~14,356 shares are outstanding.

	Exercise Price		Expiration Date	Total Outstanding and Exercisable Shares
Strome Warrants	$	11.00	June 15, 2023		68,182
B. Riley Warrants		7.26	October 18, 2025		39,773
MDB Warrants		25.30	October 19, 2022		5,435
MDB Warrants		55.00	October 19, 2022		2,728
Total					116,118

	Restricted
	Stock		Equity		Outside		ABG
	Awards		Plans		Options		Warrants		Totals
During the Three Months Ended September 30, 2022
Cost of revenue	$	402	$	2,370	$	-	$	-	$	2,772
Selling and marketing		-		810		-		-		810
General and administrative		7		4,472		-		250		4,729
Total costs charged to operations		409		7,652		-		250		8,311
Capitalized platform development		-		404		-		-		404
Total stock-based compensation	$	409	$	8,056	$	-	$	250	$	8,715

During the Three Months Ended September 30, 2021
Cost of revenue	$	12	$	1,719	$	1	$	-	$	1,732
Selling and marketing		-		1,346		75		-		1,421
General and administrative		414		4,162		-		746		5,322
Total costs charged to operations		426		7,227		76		746		8,475
Capitalized platform development		2		482		3		-		487
Total stock-based compensation	$	428	$	7,709	$	79	$	746	$	8,962

	Three Months Ended March 31, 2023
	Restricted Stock		Common Stock Options		Warrants		Totals
Cost of revenue	$	794	$	1,291	$	-	$	2,085
Selling and marketing		65		388		-		453
General and administrative		2,352		1,291		246		3,889
Total costs charged to operations		3,211		2,970		246		6,427
Capitalized platform development		-		307		-		307
Total stock-based compensation	$	3,211	$	3,277	$	246	$	6,734