See accompanying notes to condensed consolidated financial ~~statements~~.statements.

See accompanying notes to condensed consolidated financial ~~statements~~statements.

On October 11, 2016, Integrated Surgical Systems, Inc. (“~~Parent”~~Integrated”), a Delaware corporation incorporated on October 1, 1990, and Amplify Media Network, Inc. (“Amplify”), a Nevada corporation incorporated on July 22, 2016, executed a share exchange agreement, as amended, that provided for each outstanding common share of Amplify to be converted into 4.13607 common shares of Integrated (the “Exchange Ratio”), and for each outstanding warrant and stock option to purchase shares of Amplify common stock be cancelled in exchange for a warrant or stock option to purchase shares of Integrated common stock based on the Exchange Ratio (the “Recapitalization”).

On November 4, 2016 (the “Recapitalization Date”), the consummation of the Recapitalization became effective and Amplify became a wholly-owned subsidiary of Integrated. Pursuant to the Recapitalization, Integrated: (1) issued to the shareholders of Amplify an aggregate of 12,517,152 shares of Integrated common stock (see Note 14); and (2) issued to MDB Capital Group, LLC (“MDB”) as an advisory fee, warrants to purchase 1,169,607 shares of Integrated common stock. Existing Integrated stock options to purchase 175,000 shares of Integrated common stock were assumed pursuant to the Recapitalization. Amplify had no common stock options or warrants outstanding as of the Recapitalization Date.

Amplify’sCertificate of Incorporation was subsequently amended to change its name to Amplify Media Network, Inc. on July 27, 2016, to TheMaven Network, Inc. on October 14, 2016, and to Maven Coalition, Inc. ~~(“Subsidiary”~~on March 5, 2018 (Amplify is subsequently referred to herein as “Coalition”) ~~(collectively “TheMaven” or~~.

Integrated was originally incorporated in Delaware on October 1, 1990 under the name Integrated Surgical Systems, Inc, and its Certificate of Incorporation was subsequently amended to change its name to TheMaven, Inc. on December 2, 2016. Integrated is subsequently referred to herein as “Maven” (unless the context indicates otherwise, Maven, Coalition, and HubPages, Inc. (as described in Note 3) are together hereinafter referred to as the “Company”) ~~are operating~~.

The Company operates a digital, distribution and ~~continuing to develop an exclusive network~~monetization platforms that is shared by a coalition of independent, professionally managed online media ~~channels, with an underlying technology platform.~~publishers (“Maven(s)”). Each ~~channel will be operated~~Maven joins the coalition by ~~an invite only Channel Partner~~invitation-only and is drawn from professional journalists, subject matter experts, ~~reporters,~~ group evangelists and social leaders. ~~Channel Partners will~~Mavens publish content and oversee an online community for their respective channels, leveraging a proprietary, ~~socially-driven,~~socially driven, mobile-enabled, video-focused technology platform to engage niche audiences within a single network.

~~2. Basis~~ Generally, Mavens are independently owned strategic partners who receive a share of ~~Presentation~~

~~TheMaven Network, Inc. was incorporated in Nevada on July 22, 2016, under~~revenue from the ~~name “Amplify Media, Inc.” On July 27, 2016,~~interaction with their content. When they join, Mavens benefit from the corporate name was amended to “Amplify Media Network, Inc.” and on October 14, 2016, the corporate name was changed to “TheMaven Network, Inc.” On March 5, 2018 the corporate name was changed to Maven Coalition, Inc.

~~TheMaven, Inc. was formerly known as Integrated Surgical Systems, Inc., a Delaware corporation (“~~~~Integrated~~~~”). From June 2007 until November 4, 2016, Integrated was a non-active “shell company” as defined by regulations~~state-of-the-art technology of the ~~Securities and Exchange Commission (SEC). On August 11, 2016, Integrated entered into~~Company’s platform, allowing them to dramatically upgrade performance. At the same time, advertising revenue is dramatically improved due to the scale the Company has achieved by combining all Mavens onto a ~~loan to Subsidiary that provided initial funding totaling $735,099 for the Subsidiary’s operations. On October 14, 2016 Integrated entered into a Share Exchange Agreement (the “~~~~Share Exchange Agreement~~~~”) with Subsidiary~~single platform and the ~~shareholders of Subsidiary, holding~~large and experienced sales organization. They also benefit from the Company’s membership marketing and management systems to further enhance their revenue. Additionally, the lead brand within each vertical creates a halo benefit for all ~~of the issued and outstanding shares of Subsidiary (collectively, “~~~~Subsidiary Shareholders~~~~”). The Share Exchange Agreement was amended on November 4, 2016 to include certain newly issued shares of Subsidiary~~Mavens in the ~~transaction and make related changes~~vertical while each of them adds to the ~~agreement~~breadth and ~~the Share Exchange was consummated. The transaction resulted~~quality of content. While they benefit from these critical performance improvements they also save substantially in ~~Parent acquiring Subsidiary by the exchange~~costs of ~~all of the outstanding shares of Subsidiary for 12,517,152 newly issued shares of the common stock, $0.01 par value (the “~~~~Common Stock~~~~”) of Parent, representing approximately 56.7% of the issued~~technology, infrastructure, advertising sales and outstanding shares of Common Stock immediately after the transaction. The transaction is referred to as the “Recapitalization.” The Recapitalization was consummated on November 4, 2016, as a result of which Maven Coalition, Inc. became a wholly owned subsidiary of Integrated (the “~~Closing~~~~”). The note payable between Integrated~~member marketing and Subsidiary was an interdependent transaction with the Recapitalization and was ultimately cancelled upon closing of the Recapitalization. On December 2, 2016, Integrated amended its Certificate of Incorporation to change its name from “Integrated Surgical Systems, Inc.” to “TheMaven, Inc.”

From June 2007 until the closing of the Recapitalization, Integrated was a non-active “shell company” as defined by regulations of the SEC and, accordingly, the Recapitalization was accounted for as a reverse recapitalization rather than a business combination. As the Subsidiary is deemed to be the purchaser for accounting purposes under reverse recapitalization accounting, the Company’s financial statements are presented as a continuation of Subsidiary, and the accounting for the Recapitalization is equivalent to the issuance of stock by Subsidiary for the net monetary assets of Parent as of the Closing accompanied by a recapitalization. See Note 9 for summary of the assets acquired, transaction costs and the consideration exchanged in the Recapitalization.management.

The Company’s growth strategy is to continue to expand the coalition by adding new Mavens in key verticals that management believes will expand the scale of unique users interacting on the Company’s technology platform. In each vertical, the Company seeks to build around a leading brand, surround it with subcategory Maven specialists and further enhance coverage with individual expert contributors. The primary means of expansion is adding Mavens as independent strategic partners. However, in some circumstances the Company will acquire entities that bring crucial technology that will enhance the platform or branded content providers that may serve as the cornerstone of an important vertical.

The Company’s common stock is traded on the Over-the-Counter Market under the symbol “MVEN”

The condensed consolidated financial statements ~~have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations~~ of the ~~Securities~~Company as of September 30, 2018, and ~~Exchange Commission (“SEC”). Our unaudited condensed financial statements reflect all adjustments, which~~for the three months and nine months ended, are inunaudited. In the opinion of management of the Company, all adjustments, including normal recurring accruals, have been made that are necessary ~~for a fair presentation of our~~to present fairly the financial position ~~and results~~ of ~~operations. Such adjustments are of a normal recurring nature, unless otherwise noted. The balance sheet~~the Company as of ~~June~~September 30, 2018, and the results of its operations for the three months and ~~six~~nine months ended ~~June~~September 30, 2018 and 2017, and its cash flows for the nine months ended September 30, 2018 and 2017. Operating results for the interim periods presented are not necessarily indicative of the results to be expected for a full fiscal year. The consolidated balance sheet at December 31, 2017, has been derived from the ~~entire year.~~Company’s audited financial statements at such date.

~~Due~~The condensed consolidated financial statements and related notes have been prepared pursuant to the ~~resignation~~rules and regulations of BDO USA, LLP, our registered public accounting firm, on September 28, 2018, the unaudited interim financial statements for the three and six months ended June 30, 2018, have not been reviewed by a registered public accounting firm and the Form 10-Q is considered substantially deficient and not timely filed. The Company plans to remediate this situation by beginning a search for a replacement registered public accounting firm, which when engaged will review the financial statements in this Quarterly Report on Form 10-Q that have not been reviewed by a registered public accounting firm and an appropriate amendment thereto filed with the Securities and Exchange ~~Commission.~~Commission (the “SEC”). These condensed consolidated financial statements have been prepared in accordance with the United States generally accepted accounting principles (“US GAAP”) for interim financial information, the instructions to Form 10-Q and Regulation S-X. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations. These financial statements should be read in conjunction with the financial statements and other information included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, as filed with the SEC on May 15, 2018.

The Company’s condensed consolidated financial statements have been presented on the basis that itthe Company is a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. ~~The Company’s activities are subject to significant risks~~As reflected in the accompanying condensed consolidated financial statements, the Company had revenues of $1,460,958through September 30, 2018, and ~~uncertainties, including~~has experienced recurring net losses from operations, negative working capital, and negative operating cash flows. During the ~~need for additional capital, as described below.~~

~~As of June~~nine months ended September 30, 2018, the Company ~~since the Recapitalization, has generated less than $400,000~~incurred a net loss attributable to common stockholders of $35,463,647, utilized cash in ~~revenue~~operating activities of $6,288,695, and ~~has financed its operations through (a) the Recapitalization transaction with Parent, (b) a loan from Parent that was cancelled upon closing~~had an accumulated deficit of ~~the Recapitalization and (c) four private placements~~$25,890,222 as of common stock in April and October 2017 and January and March 2018 and (d) three separate borrowing transactions in June 2018. The Company also completed a private placement of Series H convertible preferred stock in AugustSeptember 30, 2018. The Company has ~~incurred operating losses~~financed its working capital requirements since inception through the issuance of its debt and equity securities.

In December 2019, a novel strain of coronavirus (“COVID-19”) was reported in Wuhan, China. On March 11, 2020 the World Health Organization has declared COVID-19 to constitute a “Public Health Emergency of International Concern.” Many national governments and sports authorities around the world have made the decision to postpone/cancel high attendance sports events in an effort to reduce the spread of the COVID-19 virus. In addition, many governments and businesses have limited non-essential work activity, furloughed and/or terminated many employees and closed some operations and/or locations, all of which has had a negative ~~operating cash flows,~~impact on the economic environment.

As a result of these factors the Company has experienced a decline in revenues and ~~it expects~~earnings since early March 2020. While the Company has implemented cost reduction measures in an effort to ~~continue to incur operating losses and negative operating cash flows for at least~~offset such volume declines, the duration of these declines remains uncertain. If the volume declines do not stabilize over the next ~~year.~~ few months, the Company’s 2020 financial results and operations may be adversely impacted. The extent of the impact on the Company’s operational and financial performance will depend on the Company’s willingness and ability to take further cost reduction measures as well as future developments, including the duration and spread of the outbreak, related group gathering and sports event advisories and restrictions, and the extent and effectiveness of containment actions taken, all of which are highly uncertain and cannot be predicted at the time of issuance of these condensed consolidated financial statements.

As a result of the above factors, management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern ~~and~~within one year of the date that the accompanying condensed consolidated financial statements are being issued. In addition, the Company’s previous independent registered public accounting firm, in ~~its~~their report on the Company’s ~~2017~~ consolidated financial statements ~~on Form 10-K, has raised~~for the year ended December 31, 2017, had also expressed substantial doubt about the Company’s ability to continue as a going concern.

The ability of the Company to continue as a going concern is impacted by the uncertainty surrounding COVID-19 and could therefore be dependent upon the Company’s ability to raise additional funds to ultimately achieve sustainable operating revenues and profitability. From October 2018 through April 2020, the Company has raised aggregate net proceeds of approximately $139 million through various debt and preferred stock private placements (see Note 18). The Company believes that based on its current assessment of the impact of COVID-19 it ~~currently does not have~~has sufficient ~~funds~~resources to ~~support its operations or implement~~fully fund its business ~~plan for one year beyond~~operations through April 30, 2021. However, due to the ~~date~~uncertainty regarding the duration of ~~these~~the impact of COVID-19 and its effect on the Company’s financial ~~statements. In order to continue business operations past that point,~~performance the Company ~~currently anticipates~~estimates that it ~~will need to raise additional debt and/or equity capital. The Company will also need to raise~~may require additional capital ~~to complete its acquisition plans. There can be no assurances that~~in capital markets today, which are less liquid given the Company will be able to secure any such additional financing on acceptable terms and conditions, or at all. If cash resources become insufficient to satisfy the Company’s ongoing cash requirements, the Company will be required to scale back or discontinue portionslack of ~~its operations and adjusts its overall business plans, or obtain funds, if available (although there can be no certainty), or to discontinue its operations entirely.~~

The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary if the ~~financial position, results~~Company is unable to continue as a going concern.

Certain comparative amounts as of ~~operations~~December 31, 2017 and ~~cash flows~~ for the three months and ~~six~~nine months ended ~~June~~September 30, 2017 have been reclassified to conform to the current period’s presentation. These reclassifications were immaterial, both individually and in the aggregate. These changes did not impact previously reported loss from operations or net loss.

The accompanying condensed consolidated financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) and include the financial statements of Maven and its wholly-owned subsidiaries, Coalition, and HubPages, a new wholly-owned subsidiary formed on March 13, 2018 to facilitate the acquisition transaction described in Note 3. Intercompany balances and ~~June 30, 2017. All intercompany~~ transactions ~~and balances~~ have been eliminated in consolidation.

The preparation of the condensed consolidated financial statements in conformity with ~~accounting principles generally accepted in the United States of America~~GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and ~~the~~ disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses ~~for the reporting period. Actual results could materially differ from those estimates.~~

The Company operates a coalition of online media channels and will provide digital media (text, audio and video) over the Internet that users may access on demand. As a broadcaster that transmits third party content owned by our channel partners via digital media, the Company applies ASC 920, “Entertainment – Broadcasters”. The channel partners generally receive variable amounts of consideration that are dependent upon the calculation of revenue earned by the channel in a given month, referred to as a “revenue share”, that are payable in arrears. In certain circumstances, there is a monthly fixed fee minimum or a fixed yield (“revenue per 1000 impressions”) based on the volume of advertising impressions served. We disclose fixed dollar commitments for channel content licenses in Note 13 Commitments and Contingencies. Channel partner agreements that include fixed yield based on the volume of impressions served are not included in Note 13 because they cannot be quantified but are expected to be significant. The expense related to channel partner agreements are reported in “Service Costs” in the Statements of Operations. The cash payments related to channel partner agreements are classified within “Net cash used in operating activities” on the Statements of Cash Flows.

During the third quarter of 2017, the Company adopted ASC 606, “Revenue from Contracts with Customers” as the accounting standard for revenue recognition. Since the Company had not previously generated revenue from customers the Company did not have to transition its accounting method from ASC 605, “Revenue Recognition”.

Revenues are recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company generates all of its revenue from contracts with customers. The following is a description of the principal activities from which the Company generates revenue:

The Company enters into contracts with advertising networks to serve display or video advertisements on the digital media pages associated with our various channels. In accordance with ASC 606 the Company recognizes revenue from advertisements at the point in time when each ad is viewed as reported by our advertising network partners. The quantity of advertisements, the impression bid prices and revenue are reported on a real-time basis. Although reported advertising transactions are subject to adjustment by the advertising network partners, any such adjustments are known within a few days of month end. The Company owes our independent publisher channel partners a revenue share of the advertising revenue earned and this is recorded as service costs in the same period in which the associated advertising revenue is recognized.

The Company enters into contracts with Internet users that subscribe to premium content on the digital media channels. These contracts provide Internet users with a subscription to access the premium content for a given period of time, which is generally one year. In accordance with ASC 606 the Company recognizes revenue from each membership subscription over time based on a daily calculation of revenue during the reporting period. Subscribers make payment for a subscription by credit card and the amount of the subscription collected in cash is initially recorded as deferred revenue on the balance sheet. As the Company provides accessSignificant estimates include those related to the premium content over the subscription term the Company recognizes revenue and proportionately reduces the deferred revenue balance. The Company owes our independent publisher channel partners a revenue shareselection of the membership revenue earned and this is initially deferred as deferred contract costs. The Company recognizes deferred contract costs over the subscription term in the same pattern that the associated membership revenue is recognized.

~~The following table provides information about disaggregated revenue by product line, geographical market and timing of revenue recognition:~~

In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09,Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 eliminates transaction- and industry-specific revenue recognition guidance under current GAAP and replaces it with a principles-based approach for determining revenue recognition. ASU 2014-09 requires that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The FASB has recently issued ASU 2016-08, ASU 2016-10, ASU 2016-11, ASU 2016-12, and ASU 2016-20, all of which clarify certain implementation guidance within ASU 2014-09. The Company began recognition of revenue from contracts with customers as a result of the launch of its network operations during the quarter beginning July 1, 2017; the Company had not previously generated revenues from customers prior to that date. The Company adopted the provisions of ASU 2014-09 in the quarter beginning July 1, 2017 using the modified retrospective approach, which requires that the Company apply the new guidance to all new contracts initiated on or after January 1, 2017. As the Company did not have any contracts which had remaining obligations as of the January 1, 2017 effective date, the Company was not required to record an adjustment to the opening balance of its retained earnings (accumulated deficit) account on such date. Under this method, the Company is not required to restate comparative periods in its financial statements.

In November 2016, the FASB issued ASU 2016-18,Statement of Cash Flows (Topic 230) (“ASU 2016-18”). ASU 2016-18 addresses diversity in practice due to a lack of guidance on how to classify and present changes in restricted cash or restricted cash equivalents in the statement of cash flows. ASU 2016-18 does not define restricted cash and does not require any change in practice for what an entity reports as restricted cash. ASU 2016-18 requires that a statement of cash flows explain the change during the period in restricted cash or restricted cash equivalents, in addition to changes in cash and cash equivalents. Restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Consequently, transfers between cash and restricted cash will not be presented as a separate line item in the operating, investing or financing sections of the cash flow statement. ASU 2016-18 requires an entity to disclose information about the nature of the restrictions and amounts described as restricted cash and restricted cash equivalents. Further, when cash, cash equivalents, restricted cash, and restricted cash equivalents are presented in more than one line item on the balance sheet, an entity must reconcile these amounts to the total shown on the statement of cash flows, either in narrative or tabular format, and should be provided on the face of the cash flow statement or in the notes to the financial statements. The Company adopted the provisions of ASU 2016-18 in the quarter beginning January 1, 2018. The adoption of ASU 2016-18 did not affect the presentation of the Company’s cash flow statement for the year ended December 31, 2017, however, the Company has expanded its disclosure with respect to restricted cash.

In February 2016, the FASB issued ASU No. 2016-02,Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires a lessee to record a right-of-use asset and a corresponding lease liability, initially measured at the present value of the lease payments, on the balance sheet for all leases with terms longer than 12 months, as well as the disclosure of key information about leasing arrangements. ASU 2016-02 requires recognition in the statement of operations of a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. ASU 2016-02 requires classification of all cash payments within operating activities in the statement of cash flows. Disclosures are required to provide the amount, timing and uncertainty of cash flows arising from leases. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. ASU 2016-02 has subsequently been amended and modified by ASU 2018-10, 2018-11 and 2018-20. ASU 2016-02 (including the subsequent amendments and modifications) is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Accordingly, the Company intends to adopt the provisions of ASU 2016-02 in the quarter beginning January 1, 2019. The Company has not completed its analysis of the impact that the adoption of ASU 2016-02 will have on the Company’s financial statement presentation or disclosures subsequent to adoption.

In June 2016, the FASB issued Accounting Standards Update 2016-13,Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments(“ASU 2016-13”). ASU 2016-13 requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The amendments broaden the information that an entity must consider in developing its expected credit loss estimate for assets measured either collectively or individually. The use of forecasted information incorporates more timely information in the estimate of expected credit loss, which will be more decision useful to users of the financial statements. ASU 2016-13 is effective for the Company for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is allowed as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the implementation approach and the impact of adoption of this new standard, along with subsequent clarifying guidance, on the Company’s financial statements and related disclosures.

In ~~May~~July 2017, the FASB issued Accounting Standards Update No. 2017-11,Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features; (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception(“ASU ~~2017-09,~~ 2017-11”). ASU 2017-11 allows companies to exclude a down round feature when determining whether a financial instrument (or embedded conversion feature) is considered indexed to the entity’s own stock. As a result, financial instruments (or embedded conversion features) with down round features are no longer required to be accounted for as derivative liabilities. A company will recognize the value of a down round feature only when it is triggered, and the strike price has been adjusted downward. For equity-classified freestanding financial instruments, an entity will treat the value of the effect of the down round as a dividend and a reduction of income available to common shareholders in computing basic earnings per share. For convertible instruments with embedded conversion features containing down round provisions, entities will recognize the value of the down round as a beneficial conversion discount to be amortized to earnings. ASU 2017-11 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company intends to adopt the provisions of ASU 2017-11 in the quarter beginning January 1, 2019. The Company has not completed its analysis of the impact that the adoption of ASU 2017-11 will have on the Company’s financial statement presentation or disclosures subsequent to adoption.

In June 2018, the FASB issued ASU 2018-07,Compensation – Stock Compensation (Topic 718): ~~Scope of Modification Accounting.~~ This ASU provides clarity and reduces both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718 to a change in terms or conditions of a share-based payment award. The amendments in this ASU are effective for public entities for fiscal years and interim periods beginning after December 15, 2017, with early adoption permitted. The adoption of ASU 2017-09 did not have a material effect on the financial statements and related disclosures.

~~In June 2018, the FASB issued~~~~ASU 2018-07, Compensation – Stock Compensation (Topic 718),~~ Improvements to Nonemployee ~~Share-based Payments~~Share-Based Payment Accounting an (“ASU ~~which~~2018-07”). ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. ASU 2018-07 ~~is required~~also clarifies that Topic 718 does not apply to share-based payments used to effectively provide (1) financing to the issuer or (2) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for ~~fiscal years beginning after December 15, 2018~~under Revenue from Contracts with ~~early adoption is permitted. The Company is currently assessing the potential impact of adopting~~Customers (Topic 606). ASU 2018-07 ~~on its financial statements and related disclosures.~~

~~In February 2016, the FASB issued~~~~ASU 2016-02, Leases (Topic 842),~~ which supersedes all existing guidance on accounting for leases in ASC Topic 840. ASU 2016-02 is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet. ASU 2016-02 will continue to classify leases as either finance or operating, with classification affecting the pattern of expense recognition in the statement of income. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. ~~Early~~Accordingly, the Company intends to adopt the provisions of ASU 2018-07 in the quarter beginning January 1, 2019. The Company has not completed its analysis of the impact that the adoption of ASU 2018-07 will have on the Company’s financial statement presentation or disclosures subsequent to adoption.

Management does not believe that any other recently issued, but not yet effective, authoritative guidance, if currently adopted, would have a material impact on the Company’s financial statement presentation or disclosures.

On March 13, 2018, the Company and HubPages, together with HP Acquisition Co, Inc. (“HPAC”), a wholly-owned subsidiary of the Company incorporated in Delaware on March 13, 2018 in order to facilitate the acquisition of HubPages by the Company, entered into an Agreement and Plan of Merger, as amended (the “Merger Agreement”), pursuant to which HPAC would merge with and into HubPages, with HubPages continuing as the surviving corporation in the merger and as a wholly-owned subsidiary of the Company (the “Merger”). On June 1, 2018, the parties to the Merger Agreement entered into an amendment (the “Amendment”), pursuant to which the parties agreed, among other things, that on or before June 15, 2018 the Company would (i) pay directly to counsel for HubPages the legal fees and expenses incurred by HubPages in connection with the transactions contemplated by the Merger Agreement as of the date of such payment (the “Counsel Payment”); and (ii) deposit into escrow the sum of (x) $5,000,000 minus (y) the amount of the Counsel Payment. On June 15, 2018, the Company made the requisite payment of $5,000,000 under the Merger Agreement.

On August 23, 2018, the Company acquired all the outstanding shares of HubPages, a Delaware corporation, for total cash consideration of $10,569,904, pursuant to the Merger. The results of operation of the acquired business and the estimated fair market values of the assets acquired and liabilities assumed have been included in the condensed consolidated financial statements as of the acquisition date. The Company acquired HubPages to enhance the user’s experience by increasing content. HubPages is ~~permitted. ASU 2016-02~~a digital media company that operates a network of 27 premium content channels that act as an open community for writers, explorers, knowledge seekers and conversation starters to connect in an interactive and informative online space. HubPages operates in the United States.

The Company uses the acquisition method of accounting which is ~~required~~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. Maven is the accounting acquirer and HubPages merged with Maven’s wholly owned subsidiary HPAC. The condensed consolidated financial statements of Maven for period prior to the Merger are considered to be ~~applied with a modified retrospective approach to each prior reporting period presented with various optional practical expedients.~~ the historical financial statements of the Company.

The Company paid cash consideration of $10,000,000 to the stockholders and holders of vested options of HubPages, including a $5,000,000 deposit paid on June 15, 2018, as well as additional cash consideration of $569,904, which consists of legal fees and costs incurred by HubPages, for total cash consideration of $10,569,904. The Company also issued a total of 2,399,997 shares of the Company’s common stock, subject to vesting and a true-up provision (as described in Note 14), to certain key personnel of HubPages who agreed to continue their employment with HubPages subsequent to the closing of the transaction. The shares issued are for post combination services (see Note 14).

The Company incurred $95,393 in transaction costs related to the acquisition, which primarily consisted of banking, legal, accounting and valuation-related expenses. The acquisition related expenses were recorded in general and administrative expenses in the condensed consolidated statements of operations.

The purchase price allocation resulted in the following amounts being allocated to the assets acquired (cash acquired of $1,537,308 is ~~currently assessing~~included in current assets) and liabilities assumed at the ~~potential impact~~closing date of ~~adopting ASU 2016-02 on its financial~~the acquisition based upon their respective fair values as summarized below:

The Company funded the closing of the Merger from the net proceeds from the Series H Preferred Stock financing (as described in Note 13).

The fair value of the intangible assets were determined as follows: developed technology was determined under the income approach; and tradename was determined by employing the relief from royalty approach. The useful life for the intangible assets is five 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. The Company believes the factors that contributed to goodwill include the acquisition of a talented workforce that expands the Company’s expertise and synergies that are specific to the Company’s consolidated business and not available to market participants. No portion of the goodwill will be deductible for tax purposes.

The amounts of HubPages revenue and earnings included in the Company’s condensed consolidated statements of operations for the period ended September 30, 2018, and ~~related disclosures.~~the revenue and earnings of the combined entity had the acquisition date been January 1, 2018 and 2017, are as follows:

For the nine months ended September 30, 2018, supplemental pro forma earnings were adjusted to exclude $95,393 of acquisition-related costs. The supplemental pro forma earnings for the nine months ended September 30, 2018 and 2017 were adjusted for the vesting of restricted stocks awards to HubPages employees in connection with the Merger of $460,100 and $505,400, respectively, and the amortization of the acquired assets of $706,600 and $772,200, respectively.

For the three months ended September 30, 2018, supplemental pro forma earnings were adjusted to exclude $95,393 of acquisition-related costs. The supplemental pro forma earnings for three months ended September 30, 2018 and 2017 were adjusted for the vesting of restricted stocks awards to HubPages employees in connection with the Merger of $104,600 and $177,200, respectively, and the amortization of the acquired assets by $203,500 and $261,200, respectively.

On March 19, 2018, the Company entered into a non-binding letter of intent (the “Letter of Intent”) to acquire Say Media, ~~Inc. (“Say Media”),~~ a media and publishing technology ~~company (the “Letter of Intent”). The acquisition will be subject~~company. Pursuant to ~~negotiation and execution of definitive documentation and various conditions precedent. In connection with~~ the Letter of Intent, ~~on March 26, 2018,~~ Maven loaned ~~$1,000,000 to~~ Say Media ~~and was issued~~$1,000,000 under a secured promissory note in the principal amount of $1,000,000 from Say Media (the “Note”). The Note bears interest at the rate of 5% per annum and is secured against all of the assets of Say Media. During the quarter ended June 30,dated March 26, 2018 ~~approximately $13,000 of interest accrued on this Note. The Note is due and~~ payable on the ~~six-month~~six month anniversary of the earlier of (i) the termination of the Letter of Intent, or (ii) if Maven and Say Media should execute a definitive agreement ~~with respect to~~(as defined in the ~~proposed acquisition,~~Letter of Intent), the termination of the definitive ~~agreement. As~~agreement (such date, the “Maturity Date”). Under the secured promissory note, interest shall accrue at a rate of ~~June~~5% per annum, with all accrued and unpaid interest payable on the Maturity Date, with prepayment permitted at any time without premium or penalty. In the event of default, interest would accrue at a rate of 10%.

Additional promissory notes were issued as follows: (1) on July 23, 2018, a secured promissory note in the principal amount of $250,000, with a Maturity Date and interest terms as outlined above; (2) on August 21, 2018, a senior secured promissory note in the principal amount of $322,363, due and payable on February 21, 2019, with interest terms as outlined above; (3) subsequent to the balance sheet date, on November 30, 2018, a senior secured promissory note in the principal amount of $4,322,165 (as of September 30, 2018 the ~~Company believes it will either collect~~balance under such promissory note was $2,122,691), due and payable on or before the ~~note receivable from Say Media or that~~first business day following the ~~amount advanced to Say Media~~earlier of (i) the consummation of the Closing, as defined under the ~~note receivable will be applied to the purchase price of the proposed acquisition,~~Merger Agreements, as described below, and ~~therefore believes that it is not probable a loss has been incurred related to the note receivable. Therefore, no allowance is deemed necessary against the outstanding amount of $1,000,000~~(ii) February 21, 2019, with interest terms as outlined above; totaling $3,695,054 in promissory notes as of ~~June~~September 30, 2018.

~~6. Fixed Assets~~On December 12, 2018 pursuant to an Agreement and Plan of Merger entered into on October 12, 2018 and amended on October 17, 2018 (collectively the “Merger Agreements”), the Company settled the promissory notes receivable by effectively forgiving $1,166,556 of the balance due as of September 30, 2018 as reflected in the condensed consolidated statements of operations. The remaining balance due under the promissory notes receivable of $2,528,498 as of September 30, 2018 was reflected as an advance against the purchase price. See Note 16 and 18 for additional information concerning this transaction.

Property and equipment costs as of September 30, 2018 and December 31, 2017 ~~fixed~~are summarized as follows:

Depreciation expense for the three months ended September 30, 2018 and 2017 was $7,096 and $2,663, respectively. Depreciation expense for the nine months ended September 30, 2018 and 2017 was $19,341 and $7,990, respectively. Depreciation expense is included in research and development expenses and general and administrative expenses, as appropriate, in the condensed consolidated statements of operations.

Platform development costs as of September 30, 2018 and December 31, 2017 are summarized as follows:

A summary of platform development cost activity for the nine months ended September 30, 2018 is as follows:

Amortization expense for the platform development costs for the three months ended September 30, 2018 and 2017, was $488,565 and $173,000, respectively. Amortization expense for the platform development costs for the nine months ended September 30, 2018 and 2017, was $1,271,281 and $226,000, respectively. Amortization expense for platform development is included in cost of revenues in the condensed consolidated statements of operations.

Intangible assets ~~net~~subject to amortization as of September 30, 2018 consisted of the following:

~~In May 2017,~~Intangible assets subject to amortization were recorded as part of the Company’s business acquisition of HubPages for the developed technology and tradename. The website domain name has an infinite life and is not being amortized. Amortization expense for three months and nine months ended September 30, 2018 was $146,942.

As of September 30, 2018, estimated total amortization expense for the next five years related to the Company’s intangible assets subject to amortization is as follows:

The changes in the carrying value of goodwill during the nine months ended September 30, 2018 is as follows:

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 ~~launched its website and began amortization~~would be aggregated into a single reporting unit for purposes of ~~capitalized website development cost. The Company recorded amortization expense of $433,204 in~~performing the ~~three~~impairment test for goodwill. For the nine months ended ~~June~~September 30, 2018, there is no change in goodwill and no impairment. The impairment evaluation process includes, amongst other things, making assumptions about variables, such as revenue growth, including long-term growth rates, profitability and discount rates.

Accrued expenses as of September 30, 2018 and ~~$53,000 in~~December 31, 2017 are summarized as follows:

As of September 30, 2018, the ~~three months ended June 30, 2017. The~~ Company recorded ~~amortization expense~~$2,667,798 as Liquidated Damages in its condensed consolidated balance sheets. The components of ~~$782,716~~the Liquidating Damages consist of the following.

Registration Rights Damages– On September 28, 2018, the Company determined that the registration statement covering the Series H Preferred Stock would not be probable of being declared effective within the requisite time frame, therefore, the Company would be liable for the maximum Liquidating Damages in connection with the ~~six months ended June 30,~~Series H Preferred Stock issuance, with any related interest provisions (see Note 13).

Public Information Failure Damages – On September 28, 2018, ~~and $53,000~~the Company determined that the public information requirements in connection with the ~~six months ended June 30, 2017.~~Series H Preferred Stock (as further described below) would not be probable of being satisfied within the requisite time frame, therefore, the Company would be liable for the maximum Liquidating Damages in connection with the Series H Preferred Stock issuance, with any related interest provisions (see Note 13).

The Company ~~recorded depreciation expense~~accounts for certain warrants and the embedded conversion features of ~~$6,613~~the 8% Promissory Notes and ~~$2,065~~10% Convertible Debentures (both as described in Note 12) as derivative liabilities, which requires that the Company carry such amount in its condensed consolidated balance sheets as a liability at fair value, as adjusted at each reporting period-end.

The Company determined, due to their greater complexity, prior to the reset provision (as described in Note 12), the fair value of the L2 Warrants (as described in Note 14) and the embedded conversion feature with respect to the 8% Promissory Notes, as of the date of repayment, and 10% Convertible Debentures, as of the date of conversion, using appropriate valuation models derived through consultations with the Company’s independent valuation firm. The Company determined the fair value of the Strome Warrants (as described in Note 14) utilizing the Black-Scholes valuation model as further described below. After the reset provision, the Company determined the fair value of the L2 Warrants utilizing the Black-Scholes valuation model as further described below since such valuation model meets the fair value measurement objective based on the substantive characteristics of the instrument. These warrants and the embedded conversion features are classified as Level 3 within the fair-value hierarchy. Inputs to the valuation model include the Company’s publicly-quoted stock price, the stock volatility, the risk-free interest rate, the remaining life of the warrants, notes and debentures, the exercise price or conversion price, and the dividend rate. The Company uses the closing stock price of its common stock over an appropriate period of time to compute stock volatility. These inputs are summarized as follows:

L2 Warrants – Valuation model: Black-Scholes option-pricing; expected life: 4.69 years; risk-free interest rate: 2.94%; volatility factor: 120.50%; dividend rate: 0.0%; transaction date closing market price: $0.61; exercise price: $0.50.

Strome Warrants – Valuation model: Black-Scholes option-pricing; expected life: 4.71 years; risk-free interest rate: 2.94%; volatility factor: 120.34%; dividend rate: 0.0%; transaction date closing market price: $0.61; exercise price: $0.50.

The following table represents the carrying amount, valuation and roll-forward of activity for the Company’s warrants accounted for as a derivative liability and classified within Level 3 of the fair-value hierarchy for the nine months ended September 30, 2018:

The following table represents the carrying amount, valuation and a roll-forward of activity for the embedded conversion feature liability with respect to the 8% Promissory Notes and 10% Convertible Debentures accounted for as a derivative liability and classified within Level 3 of the fair-value hierarchy for the nine months ended September 30, 2018:

The change in valuation of derivative liabilities recognized in the condensed consolidated statements of operations as (expense)/income for the three months and nine months ended ~~June~~September 30, 2017 was $(3,311) and $6,939, respectively.

In addition, the carrying amount of the embedded conversion feature with respect to the Series G Preferred Stock (as described in Note 13) as of September 30, 2018 and ~~June 30,~~December 31, 2017 ~~respectively. The Company recorded depreciation expense of $12,243~~was $29,735 (no further fair value required at each period-end as this is not considered a derivative liability) and ~~$3,336 in the six months ended June 30, 2018 and June 30, 2017,~~$72,563, respectively.

7.The Company did not have any derivative liabilities as of or during the three months and nine months ended September 30, 2017.

~~During the second quarter, the Company completed three separate financing transactions that involved the issuance of debt, convertible debt and warrants as shown in the following table:~~

~~During~~In May 2018, the ~~Company borrowed a total of $663,000 from the CEO of~~Company’s Chief Executive Officer began advancing funds to the Company in order to ~~continue~~meet minimum operating needs. Such advances were made pursuant to ~~fund operations. The loan is evidenced by a~~ promissory ~~note payable upon~~notes that were due on demand, with interest at the minimum applicable federal rate, which iswas approximately ~~2.34 percent.~~2.51% at September 30, 2018. At September 30, 2018, the total principal amount of advances outstanding, including accrued interest of $6,853, was $966,389.

On June 6, 2018, the Company repaid $63,000 of the amount borrowed from the CEO in May 2018 and on June 6, 2018 the Company borrowed $135,000 from the CEO on a new promissory note payable upon demand with interest at the minimum applicable federal rate which is approximately 2.34 percent.

~~On July 13, 2018 the Company borrowed $225,000 from the CEO on a new promissory note payable upon demand with interest at the minimum applicable federal rate which is approximately 2.34 percent.~~

On June 6, 2018, the Company entered into a ~~Securities Purchase Agreement (the “Purchase Agreement”)~~securities purchase agreement with L2 Capital, LLC (“L2”), pursuant to which L2 purchased from the Company a convertible promissory note (the “8% Promissory ~~Note (the “Note”~~Notes”), issuable in tranches, in the aggregate principal amount of ~~$1,126,112~~$1,681,668 for an aggregate purchase price of ~~$1,000,000 (the “Consideration”).~~$1,500,000, with interest at 8% per annum and the maturity date for each tranche funded is seven months from the date of issuance. The ~~initial~~8% Promissory Notes required an increasing premium for any prepayment from 20% for the first 90 days to 38% after 181 days, an increased conversion rate to a 40% discount if in default, a default rate of 18% plus a repayment premium of 40%, plus 5% for each additional default, and liquidated damages in addition to the default rates, ranging from 30% to 100% for certain breaches of the 8% Promissory Notes, subject to mandatory prepayment, including the above described premiums, equal to 50% of new funds raised by the Company in excess of $11,600,000 in the private placement of its securities.

On June 11, 2018, a first tranche of $570,556, ~~(which includes~~which included $15,000 of L2’s legal ~~expenses),~~expenses, was purchased for ~~an aggregate purchase~~a price of $500,000, ~~was issued by the Company to L2 on~~reflecting an original issue discount and debt discount of $70,556. On June ~~11,~~15, 2018, ~~when the proceeds were received by the Company. The~~a second tranche of $555,556 was purchased for ~~an aggregate purchase~~a price of $500,000, ~~was issued by~~an original issue discount of $55,556. In connection with the ~~Company to L2 on June 15, 2018 when the proceeds were received by the Company. In addition, on the dates thereof,~~first and second tranche, the Company issued warrants to L2, ~~(the “Warrants”), related to each tranche~~ exercisable for ~~approximately~~ 216,120 and ~~238,934~~210,438 shares of the Company’s ~~Common Stock,~~common stock at an exercise price of $1.30 and $1.20 per share, respectively (the “L2 Warrants”).

L2 had the sole discretion to purchase additional promissory notes, in certain circumstances, which expired. The promissory notes and any accrued but unpaid interest were convertible into common stock, at any time, at a conversion price equal to the lowest volume weighted average price (“VWAP”) during the ten trading day period ending on the issue date of the note. As a result of the closing of the 10% Debenture offering on June 15, 2018 (refer to 10% Convertible Debentures below), L2 no longer has the right to invest in the Company under the securities purchase agreement.

The warrants included a reset provision which provided that ~~at the time of L2’s funding of each additional tranche under the Note, if any,~~ the number of shares issuable under the ~~Warrant~~warrants shall increase by the quotient of 50% of the face value of the respective tranche and 110% multiplied by the ~~volume weighted average price (“VWAP”)~~VWAP of the Company’s ~~Common Stock~~common stock on the trading day immediately prior to the funding date of the respective ~~tranche.~~ tranche (see Note 14).

The ~~Warrant~~Company accounted for the warrants and embedded conversion features of the promissory notes as derivative liabilities, as the Company was required to adjust downward (a reset provision) the exercise price of the warrants (floor price of $0.50 per share) and the conversion price of the promissory note under certain circumstances, which required the Company carry such amounts in its condensed consolidated balance sheets as liabilities at fair value, as adjusted at each period-end. Upon issuance, the Company recognized a derivative liability of $760,499 ($600,898 for the warrants and $159,601 for the embedded conversion feature). The derivative liability was treated as a debt discount and amortized over the term of the debt and upon extinguishment of the debt the Company recognized a gain for the embedded conversion feature derivative liability of $129,741 for the change in fair value during the three months ended September 30, 2018 (see Note 11).

During the three months and nine months ended September 30, 2018, interest of $56,857 and $71,218, respectively, was charged to expense, which consisted of $40,073 and $50,232, respectively, from the accretion of original issue discount and debt discount and $16,784 and $20,986, respectively, from the accrual of interest payable.

During the three months and nine months ended September 30, 2018, $241,682 and $309,211, respectively, was charged to interest expense from the amortization of debt discounts.

On September 6, 2018, the Company repaid the 8% Promissory Notes. The total amount borrowed was $1,000,000, and under the terms of the loan agreement the Company repaid $1,351,334 to satisfy the debt obligation. A loss on extinguishment of the debt in the amount of $722,619 was recorded upon repayment which is ~~exercisable~~reflected in interest expense during the three months ended September 30, 2018.

On June 15, 2018, the Company entered into a securities purchase agreement with four accredited investors to purchase an aggregate of $4,775,000 in principal amount of the Company’s 10% Convertible Debenture, due on June 30, 2019 (the “10% Convertible Debentures”). Included in the aggregate total of $4,775,000 is $1,025,000 from two of the Company’s executives. The 10% Convertible Debentures were convertible into an aggregate of 3,698,110 shares of the Company’s common stock based on a conversion price of $1.2912 per share. The 10% Convertible Debentures were interest bearing at the rate of 10% per annum, that was payable in cash semi-annually on December 31 and June 30, beginning on December 31, 2018. Upon the occurrence of certain events, the holders of the 10% Convertible Debentures were also entitled to receive an additional payment, if necessary, to provide the holders with a 20% annual internal rate of return on their investment. The Company had the option, under certain circumstances, to redeem some or all of the outstanding principal amount for an amount equal to the principal amount (plus accrued but unpaid interest thereon) or the option to cause the holders to convert their debt at a certain conversion price, otherwise, the Company was not permitted to prepay any portion of the principal amount without the prior written consent of the debt holders.

Additionally, pursuant to a registration rights agreement entered into in connection with the purchase agreement, the Company agreed to register the shares issuable upon conversion of the 10% Convertible Debentures for resale by the holders of the 10% Convertible Debentures. The Company had committed to file the registration statement by no later than 45 days after June 15, 2018 and to cause the registration statement to become effective by no later than 120 days after June 15, 2018 (or, in the event of a full review by the staff of the SEC, 150 days following June 15, 2018). The registration rights agreement provided for Liquidated Damages upon the occurrence of certain events up to a maximum amount of 6% of the aggregate amount invested by such holders. Liquidated Damages were waived as part of the roll-over of the 10% Convertible Debentures into Series H Preferred Stock.

The securities purchase agreement also included a provision that required the Company to maintain its periodic filings with the SEC in order to satisfy the public information requirements under Rule 144(c) of the Securities Act. If the Company failed for any reason to satisfy the current public information requirement, then the Company would have been obligated to pay to each holder a cash payment equal to 1.0% of the amount invested as partial Liquidated Damages, up to a maximum of six months. Such payments were subject to interest at the rate of 1.0% per month until paid in full. The 10% Convertible Debentures was rolled over into Series H Preferred Stock before the due date for the commencement of the Liquidated Damages.

Upon issuance, the Company accounted for an embedded conversion feature of the 10% Convertible Debentures as a derivative liability totaling $471,002, as the Company was required to adjust downward the conversion price of the debt under certain circumstances, which required that the Company carry such amount in its consolidated balance sheet as a liability at fair value, as adjusted at each period-end. The derivative liability was treated as a debt discount and amortized over the term of the debt and upon extinguishment of the debt the Company recognized a loss for the embedded conversion feature derivative liability of $570,998 for the change in fair value during the three months ended September 30, 2018 (see Note 11).

During the three months and nine months ended September 30, 2018, interest of $49,076 and $69,920, respectively, was charged to expense from the accrual of interest payable.

During the three months and nine months ended September 30, 2018, $45,860 and $64,452, respectively, was charged to interest expense from the amortization of debt discounts.

On August 10, 2018, the 10% Convertible Debentures with an aggregate principal amount of $4,775,000 plus obligations of $955,000 were converted into 5,730 shares of Series H Preferred Stock. A loss on extinguishment of the debt in the amount of $249,630 was recorded upon conversion which is reflected in interest expense during the three months ended September 30, 2018.

The Company has the authority to issue 1,000,000 shares of preferred stock, $0.01 par value per share, consisting of 10,270 authorized shares originally designated as series A through E with designations subsequently eliminated, 2,000 authorized shares designated as “Series F Convertible Preferred Stock,” none of which are outstanding, 1,800 authorized shares designated as “Series G Convertible Preferred Stock” (as further described below), of which 168.496 shares are outstanding as of September 30, 2018, and 23,000 authorized shares designated as “Series H Convertible Preferred Stock” (as further described below), of which 19,399.25 shares are outstanding as of September 30, 2018.

On May 30, 2000, the Company sold 1,800 shares of its Series G Convertible Preferred Stock (the “Series G Preferred Stock”) and warrants, which expired on November 29, 2003, to purchase 63,000 shares of common stock to four investors. The Series G Preferred Stock has a stated value of $1,000 per share and is convertible into shares of common stock, at the option of the holder, subject to certain limitations. The Series G Preferred Stock was initially convertible into common stock at a conversion price equal to 85% of the lowest sale price of the common stock over the five trading days preceding the date of the conversion, subject to a maximum conversion price of $16.30, adjusted for a 1-for-10 reverse stock split effective July 26, 2007. The Company may require holders to convert all (but not less than all) of the Series G Preferred Stock at any time after November 30, 2003 or buy out all outstanding shares of Series G Preferred Stock at the then conversion price. Holders of Series G Preferred Stock are not entitled to dividends and have no voting rights, unless required by law or with respect to certain matters relating to the Series G Preferred Stock.

Prior to November 2001, 1,631.504 of the initial 1,800 shares of Series G Preferred Stock were converted into the Company’s common stock by the holders thereof. No conversions have taken place since November 2001. The remaining 168.496 shares continue to be outstanding.

Upon a change in control, sale of or similar transaction, as defined in the Certificate of Designation for the Series G Preferred Stock, the holder of the Series G Preferred Stock has the option to deem such transaction as a liquidation and may redeem their 168.496 shares at the liquidation value of $1,000 per share, or an aggregate amount of $168,496. The sale of all the assets of the Company on June 28, 2007 triggered the redemption option. As such redemption was not in the control of the Company, the Series G Preferred Stock has been accounted for as if it was redeemable preferred stock and is classified in the condensed consolidated balance sheets as a mezzanine obligation between liabilities and stockholders’ equity.

On August 10, 2018, the Company closed on a securities purchase agreement (the “Securities Purchase Agreement”) with certain accredited investors, pursuant to which the Company issued an aggregate of 19,399.25 shares of Series H Convertible Preferred Stock (the “Series H Preferred Stock”) at a stated value of $1,000, initially convertible into 58,785,606 shares of the Company’s common stock, at the option of the holder subject to certain limitations, at a conversion rate equal to the stated value divided by the conversion price of $0.33 per share (the “Conversion Price”), for aggregate gross proceeds of $19,399,250. Of the shares of Series H Preferred Stock issued, 5,730 shares were issued upon conversion of an aggregate principal amount of $4,775,000, plus prepayment obligations of $955,000, of the 10% Convertible Debentures issued by the Company on June 15, 2018 to certain accredited investors, including 1,200 shares of Series H Preferred Stock issued to Heckman Maven Fund L.P. (affiliated with James Heckman, the Company’s Chief Executive Officer), and 30 shares of Series H Preferred Shares issued to Josh Jacobs, the Company’s President.

B. Riley FBR, Inc. (“B. Riley FBR”) is a registered broker-dealer owned by B. Riley Financial, Inc., a diversified publicly traded financial services company (“B. Riley”), which acted as placement agent for the Series H Preferred Stock financing. In consideration for its services as placement agent, the Company paid B. Riley FBR a cash fee of $575,000 (including a previously paid retainer of $75,000) and issued to B. Riley FBR 669.25 shares (stated value of $1,000 per share) of Series H Preferred Stock. In addition, entities affiliated with B. Riley FBR purchased 5,592 shares of Series H Preferred Stock in the financing (total issuance cost of $1,194,546).

The terms of Series H Preferred Stock and the number of shares of common stock issuable is adjustable in the event of stock splits, stock dividends, combinations of shares and similar transactions. In addition, if at any time prior to the nine month anniversary of the closing date, the Company sells or grants any option or right to purchase or issues any shares of common stock, or securities convertible into shares of common stock, with net proceeds in excess of $1,000,000 in the aggregate, entitling any person to acquire shares of common stock at an effective price per share that is lower than the then Conversion Price (such lower price, the “Base Conversion Price”), then the Conversion Price shall be reduced to equal the Base Conversion Price. All the shares of Series H Preferred Stock shall automatically convert into shares of common stock on the fifth anniversary of the closing date at the then Conversion Price.

In addition, if at any time the Company grants, issues or sells any common stock equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of common stock (the “Purchase Rights”), then a holder of the Series H Preferred Stock will be entitled to acquire the aggregate Purchase Rights which the holder could have acquired if the holder had held the number of shares of common stock acquirable upon complete conversion of such holder’s Series H Preferred Stock immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, subject to certain conditions, adjustments and limitations.

Pursuant to the registration rights agreement entered into on August 10, 2018 in connection with the Securities Purchase Agreement, the Company agreed to register the shares issuable upon conversion of the Series H Preferred Stock for resale by the holders. The Company committed to file the registration statement by no later than 75 days after the closing date and to cause the registration statement to become effective, in general, by no later than 120 days after the closing date (or, in the event of a full review by the staff of the Securities and Exchange Commission (“SEC”), 150 days following the closing date). The registration rights agreement provides for a cash payment equal to 1.0% per month of the amount invested as partial liquidated damages upon the occurrence of certain events, on each monthly anniversary, payable within 7 days of such event, up to a maximum amount of 6.0% of the aggregate amount invested, subject to interest at 12.0% per annum, accruing daily, until paid in full. The Company recognized $1,347,254 of Liquidating Damages during the three months ended September 30, 2018, with respect to its registration rights agreement (see Note 10).

The Securities Purchase Agreement included a provision that requires the Company to maintain its periodic filings with the SEC in order to satisfy the Public Information Failure Payments requirements under Rule 144(c) of the Securities Act. If the Company fails for any reason to satisfy the current public information requirement after 6 months of the closing date, then the Company will be obligated to pay to each holder a cash payment equal to 1.0% of the aggregate amount invested for each 30-day period, or pro rata portion thereof, as partial liquidated damages per month, up to a maximum of ~~five years~~6 months, subject to interest at the rate of 1.0% per month until paid in full. The Company recognized $1,305,544 of Liquidating Damages during the three months ended September 30, 2018, with respect to its public information requirements (see Note 10).

During the three months ended September 30, 2018, in connection with the 19,399.25 Series H Preferred Stock issuance, the Company recorded a beneficial conversion feature in the amount of $18,045,496 for the underlying common shares since the nondetachable conversion feature was in-the-money (the Conversion Price of $0.33 was lower than the Company’s common stock trading price of $0.86) at the issuance date. The beneficial conversion feature was recognized as a deemed dividend.

Information with respect to Series I Convertible Preferred Stock is provided in Note 18.

Information with respect to Series J Convertible Preferred Stock is provided in Note 18.

The Company has the authority to issue 100,000,000 shares of common stock, $0.01 par value per share.

On January 4, 2018, the Company issued an aggregate of 1,200,000 shares of its common stock to an investor, Strome Mezzanine Fund LP (“Strome”), in a private placement at a price of $2.50 per share. The Company received gross proceeds of $3,000,000 from the private placement, which was received prior to December 31, 2017, and was therefore classified as restricted cash and as a private placement advance in the consolidated balance sheet at December 31, 2017. Upon completion of the private placement on January 4, 2018, the funds were reclassified to cash and stockholders’ equity.

In connection with the January 4, 2018 closing of the private placement, MDB, as the placement agent, was entitled to receive 60,000 shares of the Company’s common stock (presented as “Common Stock to be Issued” within stockholders’ equity) valued at $150,000 (value based on private placement price of $2.50 per share). In addition, MDB received warrants to purchase 60,000 shares of the Company’s common stock at an exercise price ~~equal~~of $2.50 per share (refer to ~~110%~~Common Stock Warrants below).

Pursuant to the registration rights agreement entered into on January 4, 2018 with the investor, the Company agreed to register for resale the shares of common stock purchased pursuant to the private placement. The Company also committed to register the 60,000 shares issued to MDB. The Company committed to file the registration statement no later than 200 days after the closing and to cause the registration statement to become effective no later than the earlier of (i) 7 business days after the SEC informs the Company that no review of the ~~VWAP~~registration statement will be made or (ii) when the SEC has no further comments on the registration statement. The registration rights agreement provides for liquidated damages upon the occurrence of certain events, including the Company’s failure to file the registration statement or to cause it to become effective by the deadlines set forth above. The amount of liquidated damages payable to the investor is 1.0% of the aggregate amount invested for each 30-day period, or pro rata portion thereof, during which the default continues, up to a maximum amount of 5.0% of the aggregate amount invested or the value of the securities registered by the placement agent. The purchaser of the shares of common stock waived the liquidated damages when the purchaser converted certain notes payable into Series H Preferred Stock in August 2018 (see Note 17) The Company recognized $15,001 of Liquidating Damages for the three and nine months ended September 30, 2018, with respect to its registration rights agreement for the common stock issued to MDB in conjunction with the January 4, 2018 private placement.

On March 30, 2018, the Company issued an aggregate of 500,000 shares of its common stock to Strome in a second closing of the private placement entered into on January 4, 2018 at a price of $2.50 per share. The Company received gross proceeds of $1,250,000 from the second closing of the private placement. No costs were incurred in connection with the second closing of the private placement.

The Company entered into a registration rights agreement on March 30, 2018 with the investor, pursuant to which the Company agreed to register for resale the shares of common stock purchased pursuant to the placement. The Company committed to file the registration statement no later than 270 days after the closing and to cause the registration statement to become effective no later than the earlier of (i) 7 business days after the SEC informs the Company that no review of the registration statement will be made or (ii) when the SEC has no further comments on the registration statement. The registration rights agreement provides for liquidated damages upon the occurrence of certain events, including the Company’s failure to file the registration statement or to cause it to become effective by the deadlines set forth above. The amount of liquidated damages payable to the investor is 1.0% of the aggregate amount invested for each 30-day period, or pro rata portion thereof, during which the default continues, up to a maximum amount of 5.0% of the aggregate amount invested. The purchaser of the shares of common stock waived the liquidated damages when the purchaser converted certain notes payable into Series H Preferred Stock in August 2018 (see Note 12).

Information with respect to the issuance of common stock in connection with the acquisition of Say Media is provided in Note 18.

During August 2016 and October 2016 the Company issued 12,209,677 and 307,475, respectively, shares of common stock to management and employees, as restricted stock awards, that contained a Company buy-back right for a certain number of shares pursuant to the achievement of a unique user performance condition (the “Performance Condition”) issued at the original cash consideration paid, which totaled $2,952 or approximately $0.0002 per share. On November 4, 2016, in conjunction with the Recapitalization, the number of shares subject to the buy-back was modified, resulting in a modification of the restricted stock awards. The shares vest over a three-year period starting on the beginning of the month of the issuance date, with one-third vesting in one year, and the balance monthly over the remaining two years. Because these shares require continued service to the Company, the estimated fair value of the shares is being recognized as compensation expense over the vesting period of the award.

As of December 31, 2017, the Performance Condition was determined based on 4,977,144 unique users accessing Maven’s channels in November 2017. Based on this level of unique users, 2,453,362 shares subject to the buy-back right were earned under the Performance Condition and 1,927,641 shares remained subject to the buy-back right. The Company’s Board made a determination on March 12, 2018 to waive the buy-back right, resulting in a modification of the restricted stock awards which resulted in incremental compensation cost of $2,756,527 at the time of the modification, of which $202,357 and $1,970,790, respectively, was recognized during the three months and nine months ended September 30, 2018.

On August 23, 2018, in connection with the Merger, the Company issued a total of 2,399,997 shares of common stock to certain key personnel of HubPages who agreed to continue their employment with HubPages, as restricted stock awards, subject to a repurchase right and vesting, The repurchase right which expired in March 2019 unexercised, gave the Company the option to repurchase a certain number of shares at par value based on a performance condition as defined in the terms of the Merger Agreement. The shares vest in twenty-four equal monthly installments beginning September 23, 2019 and ending September 23, 2021 and the estimated fair value of these shares is being recognized as compensation expense over the vesting period of the award. The restricted stock awards provide for a true-up period that if the common stock is sold for less than $2.50 the holder will receive, subject to certain conditions, additional shares of common stock up to a maximum of the amount of shares originally received (or 2,400,000 in aggregate to all holders) for the shares that re sold for less than $2.50. The true-up period, in general, is 13 months after the consummation of the Merger until 90 days following completion of vesting, or July 30, 2021. The restricted stock awards were fair valued upon issuance by an independent appraisal firm. For subsequent event related to these restricted stock awards see Note 18.

On September 13, 2018, the Company issued 148,813 shares of common stock to certain members of the Board, as restricted awards, subject to continued service with the Company. The shares vest over a four-month period beginning September 30, 2018 and the estimated fair value of these shares is being recognized as compensation expense over the vesting period of the award.

The fair value of a restricted stock award is determined based on the number of shares granted and the quoted price of the Company’s common stock on the date issued.

A summary of the restricted stock award activity during the nine months ended September 30, 2018 is as follows:

At September 30, 2018, total compensation cost for the restricted stock awards, including the effect of the waiver of the buy-back right, not yet recognized was $4,101,987. This cost will be recognized over a period of approximately 1.87 years with a total of $776,423 remaining to be recognized before December 31, 2018. The Company paid to the holder the par value or $2,047 for the forfeited unvested restricted stock awards of 204,735 in January 2019.

Information with respect to stock based compensation expense of the restricted stock awards is provided in Note 15.

Warrants issued to ~~the funding date~~purchase shares of the ~~respective tranche,~~Company’s common stock to MDB, L2, and Strome (collectively the “Financing Warrants”) are described below.

MDB Warrants – On November 4, 2016, in conjunction with the Recapitalization, Integrated issued warrants to MDB (the “MDB Warrants”) to purchase 1,169,607 shares of common stock with an exercise price of $0.20 per share, of which 842,117 were exercised on April 30, 2018 under the cashless exercise provisions. A total of 327,490 warrants remain outstanding as of September 30, 2018 after the cashless exercise, subject to customary anti-dilution adjustments, and expire on November 4, 2021. On October 19, 2017, the Company issued warrants to MDB which acted as placement agent in connection with a private placement of its common stock, to purchase 119,565 shares of common stock. The warrants have an exercise price of $1.15 per share, subject to customary anti-dilution adjustments, and expire on October 19, 2022. On January 4, 2018, the Company issued warrants to MDB which acted as placement agent in connection with a private placement of its common stock, to purchase 60,000 shares of common stock. The warrants have an exercise price of $2.50 per share, subject to customary anti-dilution adjustments, and may, in the event there is no effective registration statement covering the re-sale of the warrant shares, be exercised on a cashless ~~basis. See Note 14 regarding~~basis, and expire on October 19, 2022. A total of 507,055 warrants are outstanding as of September 30, 2018. The MDB Warrants are recorded within additional paid-in capital in the ~~repayment~~condensed consolidated statements of ~~the 8% Convertible Notes Payable on September 6, 2018.~~stockholders’ equity.

~~On June 15,~~ – Effective as of August 3, 2018, four investors invested a total of $4,775,000 in a convertible debt offering (“Debentures”). Included in the total was an investment of $1 million by the Company’s CEO and an investment of $25,000 by the Company’s President. Interest is payable on the Debentures at the rate of 10% per annum, payable in cash semi-annually on December 31 and June 30, and on maturity, beginning on December 31, 2018, and the Debentures are due and payable on June 30, 2019 (the “Maturity Date”). On the Maturity Date, and on any conversion priorpursuant to the ~~Maturity Date, each Investor will be entitled~~reset provision, the Company adjusted the exercise price to ~~receive additional interest payment to provide the Investor with a 20% annual Internal Rate of Return.~~

~~The Debentures are convertible into shares of the Company’s common stock, at the option of the Investor at any time prior to the Maturity Date, at a conversion price of $1.2912~~$0.50 per share or(the floor exercise price) for the ~~Company must pay liquidated damages as defined in the Debenture. The Company also has the option~~L2 Warrants and issued additional warrants to redeem some or all of the outstanding principal amount of the Debenture and further provides that if after the Company undertakes a subsequent financing (or financings) for gross proceeds of at least $20 million (a “Qualified Offering”), the Company has the option,L2 to cause the Investors to convert, plus make a cash payment to the Investors in an aggregate amount to provide the Investor with a 20% annual Internal Rate of Return through the date of payment, in addition to other obligations defined in the Debenture Agreement. The Debentures were converted into shares of Series H Convertible Preferred Stock on August 10, 2018. See also Note 14 Subsequent Events regarding the conversion of the 10% Convertible Notes Payable into Series H Preferred Stock.

The Company’s Certificate of Incorporation authorized 1,000,000 shares of undesignated, serial preferred stock. Preferred stock may be issued from time to time in one or more series. The Board of Directors is authorized to determine the rights, preferences, privileges, and restrictions granted to and imposed upon any wholly unissued series of preferred stock and designation of any such series without any further vote or action by the Company’s stockholders.

~~As of June 30, 2018, the Company’s only outstanding series of convertible preferred stock is the Series G Convertible Preferred Stock (“Series G”).~~

The Series G stock has a stated value of $1,000 per share and is convertible into common stock at a conversion price equal to 85% of the lowest sale price of the common stock on its listed market over the five trading days preceding the date of conversion (“Beneficial Conversion Feature”), subject to a maximum conversion price. The number ofpurchase 640,405 shares of common stock ~~that~~at an exercise price of $0.50 per share. As a result of the warrants exercise price being reduced to the floor exercise price on August 3, 2018 and triggering of the reset provision, the warrants no longer contain any reset provisions and will continue to be carried in the condensed consolidated balance sheets as a derivative liability at fair value, as adjusted at each period-end since, among other criteria, they require the delivery of registered shares upon exercise. At September 30, 2018, the warrants derivative liability was $545,872.

The warrants are exercisable for a period of five years, subject to customary anti-dilution adjustments, and may, in the event there is no effective registration statement covering the re-sale of the warrant shares, be ~~converted is determined by dividing~~exercised on a cashless basis in certain circumstances. A total of 1,066,963 warrants are outstanding as of September 30, 2018, requiring a share reserve under the ~~stated value of~~warrant instrument calling for three times the number of ~~shares~~warrants issuable for anti-dilution provisions, or a total reserve of Series G to be converted by the conversion price. The Company may elect to pay the Series G holder in cash at the current market price multiplied by the number of shares of common stock issuable upon conversion.

For the three months and six months ended June 30, 2018, no shares of Series G were converted into shares of common stock. At June 30, 2018, the outstanding Series G shares were convertible into a minimum of 150,1753,200,889 shares of common stock.

~~Upon a change~~Strome Warrants – On June 15, 2018, the Company modified the two securities purchase agreements dated January 4, 2018 and March 30, 2018 with Strome to eliminate the true-up provision under which the Company was committed to issue up to 1,700,000 shares of common stock in ~~control, sale~~certain circumstances, as further described below. As consideration for such modification, the Company issued warrants to Strome (the “Strome Warrants”) to purchase 1,500,000 shares of ~~or similar transaction, as defined in the Certificate~~common stock, exercisable at an initial price of ~~Designation for the Series G, each holder of the Series G has the option to deem such transaction as a liquidation and may redeem his or her shares at the liquidation value of $1,000,~~$1.19 per share for a period of five years, subject to a reset provision and customary anti-dilution provisions. Strome was also granted observer rights on the Company’s Board.

The January 4, 2018 financing transaction did not include any true-up or make-good provisions, nor did it contain any lock-up provisions, however, the March 30, 2018 financing transaction included a true-up provision and a lock-up provision. The true-up provision required the Company to issue additional shares of common stock if Strome sold shares on a national securities exchange or the OTC marketplace or in an ~~aggregate amount of $168,496. The~~arm’s-length unrelated third-party private sale ~~of all the assets on June 28, 2007 triggered the preferred stockholders’ redemption option. As such redemption is not~~ in the ~~control~~90-day period beginning one year after March 30, 2018 at less than $2.50 per share, up to a maximum of one share for each share originally sold to Strome. In addition, the Company entered into a separate agreement with Strome dated March 30, 2018 that extended the true-up provisions to the shares of common stock sold in the January 4, 2018 financing. Accordingly, under this true-up provision, which became effective March 30, 2018, the Company was obligated to issue up to an additional 1,700,000 shares of common stock to Strome without any further consideration under certain conditions in the future. As a result of the true-up provision, the maximum number of shares issuable in these transactions were 3,400,000 with a $1.25 floor price per share, and may, in the event there is no effective registration statement covering the re-sale of the warrant shares, be exercised on a cashless basis in certain circumstances.

Effective as of August 3, 2018, pursuant to the reset provision, the Company adjusted the ~~Series G stock has been~~exercise price to $0.50 per share (the floor price) for such warrants. The Company accounted for the Strome Warrants, upon issuance, as ~~if it~~a derivative liability because the warrants had a downward reset provision with a floor of $0.50 per share. The Company recorded the warrants at fair value in its condensed consolidated balance sheets, with adjustments to fair value at each period-end. Upon issuance, the Company recognized a derivative liability of $1,344,648. As a result of the warrants exercise price being reduced to the floor exercise price on August 3, 2018 and the triggering of the reset provision, the warrants no longer contain any reset provisions and will continue to be carried in the condensed consolidated balance sheets as a derivative liability at fair value, as adjusted at each period-end since, among other criteria, they require the delivery of registered shares upon exercise. At September 30, 2018, the warrants derivative liability was ~~redeemable preferred~~$767,449.

A summary of the Financing Warrants activity during the nine months ended September 30, 2018 is as follows:

The exercise of the 842,117 warrants in April 2018 on a cashless basis resulting in the issuance of 736,853 net shares of common stock ~~and is classified on~~when the ~~balance sheet between liabilities and stockholders’ equity.~~common stock price was $1.60 per share. The aggregate issue date fair value of the Financing Warrants issued during the nine months ended September 30, 2018 was $3,322,166.

~~9. Recapitalization on November 4, 2016~~The exercise prices of the Financing Warrants outstanding and exercisable are as follows as of September 30, 2018:

As described in Note 2, the Company has accounted for the Recapitalization, which closed on November 4, 2016, as a reverse recapitalization. Because Integrated was a non-operating public shell corporation the transaction is considered to be a capital transaction in substance rather than a business combination. The transaction is equivalent to the issuance of stock by the Subsidiary for the net monetary assets of the Parent accompanied by a recapitalization.

Prior to the Recapitalization, Integrated had 9,530,379 issued and outstanding shares of common stock. In the Recapitalization, holders of Subsidiary’s common stock received 4.13607 shares of Parent common stock for each Subsidiary share, totaling 12,517,152 shares. After the Recapitalization a total of 22,047,531 shares of Parent common stock were outstanding as of December 31, 2016.

Integrated and Subsidiary agreed to the terms of Recapitalization to reflect the arms-length negotiated fair value of the Subsidiary as $2.5 million relative to the fair value of Integrated’s cash and available for sale investment securities. This resulted in the former shareholders of Subsidiary obtaining 56.7% voting control of the Company’s issued and outstanding common stock.

The ~~Company has authorized 100,000,000 shares of common stock, $0.01 par~~intrinsic value of ~~which 30,975,206 and 28,516,009 shares were issued and outstanding~~exercisable but unexercised in-the-money stock warrants as of ~~June~~September 30, 2018 ~~and December 31, 2017, respectively.~~

On August 11, 2016, management and employees of Subsidiary in conjunction with the incorporation on July 22, 2016 received 12,209,677 shares of common stock as adjusted for the Recapitalization exchange ratio of 4.13607. These shares were subject to a Company option to buy back the shares at the original cash consideration paid, which totaled $2,952 orwas approximately $0.0002 per share. Pursuant to the achievement of the Unique User Performance Condition, the employees vest their ownership in these shares over a three-year period beginning August 1, 2016 with one-third vesting on August 1, 2017 and the balance monthly over the remaining two years. Because these shares require continued service to the Company the estimated fair value is recognized as compensation expense over the vesting period of the award.

~~As of December 31, 2017, the Unique User Performance Condition was determined~~$416,000, based on ~~4,977,144 unique users accessing Maven channels in November 2017. Based~~a fair market value of $0.61 per share on this level of unique users 56% of the shares subject to the performance condition were released and 1,927,641 of the escrow shares were subject to the Company’s buy-back right. The Company’s Board of Directors made a determination on March 12, 2018 to waive the buy-back right. This waiver of the buy-back right related to 1,927,641 shares is a modification of the terms of the restricted stock awards and will result in incremental compensation cost of approximately $2.8 million that will be recognized over a period of approximately 1.3 years, with a total of $2.2 million to be recognized in 2018, of which $225,000 and $1.5 million was recognized in the three and six months ended JuneSeptember 30, 2018.

~~At June 30, 2018, total compensation cost, including~~Information with respect to the ~~effect of the waiver of the buy-back right,~~equity-based expense related to ~~restricted stock awards but not yet recognized was $3.0 million. This cost will be recognized over a period of approximately 1.3 years with a total of $1.13 million remaining to be recognized~~the Financing Warrants is provided in ~~2018.~~Note 15.

On March 28, 2018, the Board ~~of Directors~~ approved an increase in the ~~total~~ number of shares of the Company’s common stock reserved for grant pursuant to the 2016 Stock Incentive Plan (the “2016 Plan”) from 3,000,000 shares to ~~5,000,000.~~5,000,000 shares. In August 2018, the Company increased the authorized number of shares of common stock under the 2016 Plan from 5,000,000 shares to 10,000,000 shares. The Company’s shareholders approved the increase in the number of shares authorized under the 2016 Plan on April 3, 2020. The 2016 Plan is administered by the Board, ~~of Directors,~~ and there were no grants prior to the formation of the 2016 Plan. Shares ~~of common stock that are issued under the Plan or~~ subject to ~~outstanding incentive awards~~an award that lapse, expire, are forfeited or for any reason are terminated unexercised or unvested will ~~be applied to reduce the maximum number of shares of common stock remaining~~automatically again become available for issuance under the ~~Plan, provided, however, that that shares subject to an incentive award that expire will automatically become available for issuance. Options~~2016 Plan. Common stock options issued under the 2016 Plan may have a term of up to ten years and may have variable vesting provisions.

~~In conjunction with~~At September 30, 2018, options to acquire 9,693,831 shares of the ~~Recapitalization,~~Company’s common stock had been granted under the ~~Company assumed 175,000 fully-vested~~2016 Plan, and options ~~25,000 were exercised in 2017 and 125,000 were exercised in 2018 and 25,000 are still outstanding, in connection with the Recapitalization with an exercise price~~to acquire 306,169 shares of ~~$0.17 per share, which expire on May 15, 2019.~~common stock remain available for future grant.

The estimated fair value of ~~stock-based~~the stock based awards is recognized as compensation expense over the vesting period of the award. The fair value of ~~restricted stock awards is determined based on~~ the ~~number of shares granted and the quoted price of the Company’s~~ common ~~stock on the date of grant. The fair value of~~ stock option awards is estimated at the grant date as calculated using the Black-Scholes option-pricing model. The Black-Scholes model requires various highly judgmental assumptions including expected volatility and option life. ~~The fair values of our stock option grants were estimated with the following average assumptions:~~

The fair value of common stock options granted during the nine months ended September 30, 2018 were ~~estimated with~~calculated using the Black-Scholes option-pricing model utilizing the following assumptions:

~~For~~A summary of the ~~six~~common stock option activity during the nine months ended ~~June~~September 30, 2018 ~~option activity was~~is as follows:

The ~~Company has granted 3,3982,887 options under the Plan. In the three months ended June 30, 2018, the Company recorded stock-based compensation~~aggregate grant date fair value of $275,867 related to the grants. Of the total stock-based compensation, $214,038 was expensed in General and Administrative and Research and Development expenses and $61,829 was capitalized as Website Development Costs. In the six months ended June 30, 2018, the Company recorded stock-based compensation of $542,175 related to the grants. Of the total stock-based compensation, $433,424 was expensed in General and Administrative and Research and Development expenses and $108,751 was capitalized as Website Development Costs.

~~At June 30, 2018, total compensation cost related to~~common stock options granted ~~under~~during the ~~Plan but not yet recognized~~nine months ended September 30, 2018 was ~~$3,726,000. This cost will be amortized on a straight-line method over a period of approximately 1.98 years.~~$5,549,585. The aggregate intrinsic value ~~represents~~as of September 30, 2018 and December 31, 2017 was none and $1,573,000, respectively.

In conjunction with the ~~difference between~~Recapitalization, the Company assumed 175,000 fully-vested common stock options having an exercise price of $0.17 per share and an expiration date of May 15, 2019. Of those options, 125,000 were exercised in June 2018 on a cashless basis resulting in the ~~underlying options and the quoted price~~issuance of ~~our~~106,154 net shares of common stock.

The exercise prices of common stock ~~for the number~~options outstanding and exercisable are as follows as of ~~options that were in-the-money at June 30, 2018.~~

~~The following table summarizes certain information about stock options for the six months ended June~~September 30, 2018:

Outstanding options for 8,428,836 shares of the Company’s common stock had not vested at September 30, 2018.

At September 30, 2018, there was approximately $4,950,651 of total unrecognized compensation expense related to common stock options granted which is expected to be recognized over a weighted-average period of approximately 3.68 years.

The ~~following table summarizes the~~intrinsic value of exercisable but unexercised in-the-money common ~~shares reserved for future issuance under the Plan~~stock options as of ~~June~~September 30, ~~2018:~~2018 was approximately $45,833, based on a fair market value of $0.61 per share of the Company’s common stock on September 30, 2018.

~~On December 19, 2016,~~At September 30, 2018, Channel Partner Warrants to purchase 4,215,500 shares of the Company’s ~~Board of Directors approved a program to be administered by management that authorized the Company to issue up to 5,000,000~~ common stock had been issued, and warrants to ~~provide equity incentive to its Channel Partners to motivate and reward them~~purchase 900,992, after considering the reduction in the total warrants available of 2,000,000, shares of common stock remain available for ~~their services to~~future grant.

Upon the ~~Company and to align~~performance condition being met under the ~~interests~~terms of the Channel ~~Partners with those of stockholders of the Company. The following table summarizes the activity in Channel~~ Partner Warrants, ~~during the six months ended June 30, 2018:~~

~~In the six months ended June 30, 2018, the Company~~such warrant will be earned and issued, ~~225,000 common stock warrants to 13 of the Channel Partners. The warrants have a performance condition~~ and once earned will vest over three years and expire in five years from issuance. The ~~exercise prices range from $1.15~~warrants are revalued each reporting period to ~~$1.99 with a weighted average of $1.84. The performance conditions~~determine the amount to be recorded as an expense in the respective period. As the warrants vest, they are ~~generally based~~valued on ~~the average number of unique visitors on the Channel operated by the~~each vesting date. Channel Partner generated during the six-month period from the launch of the Channel Partners operations on theMaven Network or the revenue generated during the period from issuance date through December 31, 2021 Equity grantsWarrants with performance conditions that do not have sufficiently large disincentive for non-performance ~~may be~~are measured at fair value that is not fixed until performance is complete. The ~~Company recognizes~~estimated fair value of the equity-based awards is recognized as an expense ~~for equity-based payments to non-employees as~~at the ~~services are received. The Company has specific objective criteria, such as the~~vesting date of ~~launch of a Channel on~~ the ~~Company’s platform, for determination~~award. The fair value of the ~~period over which services are received~~warrant is estimated at the vesting date as calculated using the Black-Scholes option-pricing model. The Black-Scholes model requires various highly judgmental assumptions including expected volatility and ~~expense is recognized. In~~warrant life.

The fair value of Channel Partner Warrants issued during the ~~three and six~~nine months ended ~~June~~September 30, 2018 were calculated using the ~~Company recorded stock-based compensation of zero and $136,587 related to these warrants, respectively.~~

~~Other Warrants~~Black-Scholes option-pricing model utilizing the following assumptions:

A summary of the ~~Investment Banking Advisory Agreement more fully described in Note 12, Integrated issued warrants to MDB Capital Group, LLC to purchase 1,169,607 shares of Parent common stock in conjunction with~~Channel Partner Warrants activity during the ~~Recapitalization. On April~~nine months ended September 30, 2018 ~~the holders exercised 842,117 warrants under the cash-less~~is as follows:

The exercise ~~provisions and received 736,852 shares of common stock upon the exercise when the stock price was $1.60~~prices range from $1.32 to $2.25 per share. ~~A total of 328,153 warrants remain outstanding as of June 30, 2018.~~ The ~~warrants have an exercise price of $0.20 per share and expire on November 4, 2021. The aggregate~~ intrinsic value of ~~the 328,153 warrants at June 30, 2018 is $328,000.~~

~~Private Placement~~exercisable but unexercised in-the-money Channel Partner Warrants as of ~~Common Stock~~

In January 2018 and March 2018, the Company raised pursuant to a private placement $3,000,000 and $1,250,000, respectively. The $3 million was received prior to December 31, 2017 and was classified as Restricted Cash in the December 31, 2017 balance sheet and then subsequently reclassified to Cash in January 2018 upon completion of the private placement subscription documents. In addition, the investment was classified as Investor Demand Payable in the December 31, 2017 balance sheet and then subsequently reclassified to equity in January 2018.

~~The impact on our results of operations of recording stock-based compensation expense for the three months ended June~~September 30, 2018 was ~~as follows:~~none based on a fair market value of $0.61 per share on September 30, 2018

~~In addition,~~A summary of stock based compensation and equity-based expense charged to operations or capitalized during the three months and nine months ended ~~June~~September 30, 2018 ~~stock-based compensation totaling $907,978 during the application~~ and ~~development stage was capitalized for website development.~~

~~The impact on our results of operations of recording stock-based compensation expense for the three months ended June 30,~~ 2017 ~~was~~is as follows:

~~In addition, during the three months ended June 30, 2017 stock-based compensation totaling $212,156 during the application and development stage was capitalized for website development.~~

~~The impact on our results of operations of recording stock-based compensation expense for the six months ended June 30, 2018 was as follows:~~

~~In addition, during the six months ended June 30, 2018 stock-based compensation totaling $907,978 during the application and development stage was capitalized for website development.~~

~~The impact on our results of operations of recording stock-based compensation expense for the six months ended June 30, 2017 was as follows:~~

~~In addition, during the six months ended June 30, 2017 stock-based compensation totaling $444,841 during the application and development stage was capitalized for website development.~~

Deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

As a result of the Company’s cumulative losses, management has concluded that a full valuation allowance against the Company’s net deferred tax assets is appropriate. No income tax liabilities existed as of June 30, 2018 and December 31, 2017 due to the Company’s continuing operating losses.

On April 4, 2017, the Company completed a private placement of its common stock, selling 3,765,000 shares at $1.00 per share, for total gross proceeds of $3,765,000. In connection with the offering, the Company paid $188,250 in cash and issued 162,000 shares of common stock to MDB, ~~Capital Group LLC,~~ which acted as placement agent.

On October 19, 2017, the Company completed a private placement of its common stock, selling 2,391,304 shares at $1.15 per share, for total gross proceeds of $2,750,000. In connection with the offering, the Company issued 119,565 shares of common stock and warrants to purchase 119,565 shares of common stock ~~warrants~~ to MDB, ~~Capital Group LLC,~~ which acted as placement agent.

On January 4, 2018, the Company completed a private placement of its common stock, selling 1,200,000 shares at $2.50 per share, for total gross proceeds of $3,000,000. In connection with the offering, MDB, which acted as placement agent, was entitled to 60,000 shares of common stock and warrants to purchase 60,000 shares of common stock.

Mr. Christopher Marlett was a director of the Company until February 1, 2018. Mr. Marlett is the Chief Executive Officer of MDB. Mr. Gary Schuman, who was the Chief Financial Officer of the Company until May 15, 2017, is the Chief Financial Officer and Chief Compliance Officer of MDB. The Company compensated Mr. Schuman for his services at the rate of $3,000 per month until his resignation. Mr. Robert Levande was a director of the Company until July 5, 2017. Mr. Levande is a senior managing director of MDB.

During September 2018, John A. Fichthorn joined the Board of the Company and during November 2018 he was elected as Chairman of the Board and Chairman of the Finance Committee. Until March of 2020 Mr. Fichthorn served as Head of Alternative Investments for B. Riley Capital Management, LLC, which is an SEC-registered investment adviser and a wholly-owned subsidiary of B. Riley. During September 2018, Todd D. Sims joined the Board of the Company and is also a member of the Board of Directors of B. Riley. Mr. Sims serves on the Board of the Company as a designee of B. Riley. Since August 2018, B. Riley FBR has been instrumental in raising debt and equity capital for the Company to supports its acquisitions of HubPages and Say Media (see Note 18) and for refinancing and working capital purposes.

Prior to and interdependent upon the closing of the Recapitalization, the Parent provided a series of advances for an aggregated amount of approximately $735,000 to the Subsidiary under a promissory note (the “Term Note”). The Term Note was guaranteed by MDB in the amount of $150,000 and Mr. Heckman, the Company’s Chief Executive Officer, in the amount of $350,000 and secured by a mortgage held by the Parent on certain properties owned by Mr. Heckman located in the State of Washington and the Province of British Columbia (“Mortgage”). At the Closing of the Recapitalization, the Term Note was cancelled and the Personal Guarantee, the Mortgage and the MDB Guarantee were terminated.

Ms. Rinku Sen became a director of the Company in November 2017 and has provided consulting services and operates a channel on ~~our~~the Company’s platform. During the ~~year~~three months and nine months ended ~~December 31, 2017,~~September 30, 2018, the Company paid Ms. Sen ~~was paid $15,000~~$0 and $15,521, respectively, for these services.

Effective on September 20, 2017, the Company entered into a six-month contract, with automatic renewals unless cancelled, with a company located in Nicaragua that is owned by Mr. Christopher Marlett, a then director of the Company, to provide content conversion services. ~~The estimated monthly costs are expected to be less than $5,000 per month.~~During the three months and nine months ended September 30, 2018, the Company paid $44,200 and $64,350, respectively, for these services.

~~During~~In May 2018, the ~~Company borrowed a total of $663,000 from the CEO of~~Company’s Chief Executive Officer began advancing funds to the Company in order to ~~continue~~meet minimum operating needs. Such advances were made pursuant to ~~fund operations. The loan is evidenced by a~~ promissory ~~note payable upon~~notes that were due on demand, with interest at the minimum applicable federal rate, which iswas approximately ~~2.34 percent.~~2.51% as of September 30, 2018. At September 30, 2018, the total principal amount of advances outstanding, including accrued interest of $6,853, was $966,389.

On June 15, 2018, four investors invested a total of $4,775,000 in a convertible debt offering (“Debentures”). Included in the total was an investment of ~~$1 million~~$1,000,000 by the Company’s ~~CEO~~Chief Executive Officer and $25,000 from the Company’s President. Interest is payable on the Debentures at the rate of 10% per annum, payable in cash semi-annually on December 31 and June 30, and on maturity, beginning on December 31, 2018, and the Debentures are due and payable on June 30, 2019 (the “Maturity Date”). On the Maturity Date, and on any conversion prior to the Maturity Date, each Investor will be entitled to receive additional interest ~~payment~~payments to provide the Investor with a 20% annual Internal Rate of Return. The Company will recognize this annual Internal Rate of Return requirement for accounting purposes when such Debentures are repaid or otherwise satisfied.

As a result of the Say Media acquisition on December 12, 2018, the Company ~~borrowed $225,000 from~~settled the ~~CEO on~~promissory notes receivable by effectively forgiving $1,166,556 of the balance due as of September 30, 2018 as reflected in the condensed consolidated statements of operations. The Company has a ~~new~~balance due under the promissory ~~note payable upon demand with interest at the minimum applicable federal rate~~notes receivable of $2,528,498 as of September 30, 2018 which is ~~approximately 2.34 percent~~considered an advance against the purchase price for the acquisition. See Note 18 for additional information concerning this transaction. At September 30, 2018, the Company had the following balances on its condensed consolidated balance sheet; accounts receivable of $84,287, and accounts payable of $186,248. During the three months and nine months ended September 30, 2018, the Company reflected the following on its condensed consolidated statement of operations; revenues of $81,976 and $84,287, respectively, and operating expenses of $117,647 and $117,647, respectively.

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 legal proceedings that it believes would reasonably be expected to have a material adverse effect on the Company’s business, financial condition or results of operations.Operating Lease

In April 2018, ~~Maven~~the Company entered into an office sublease agreement to sublease of 7,457 rentable square feet at 1500 Fourth Avenue, Suite 200, Seattle, ~~Washington 98101.~~Washington. The sublease has a term of 41 months, commencing on June 1, 2018, with base rent at a rate of $25.95 per square foot per annum in months 1 through 12, rising to $37 per square foot in months 37 to 41. Upon execution of the sublease in April 2018, the Company paid $60,249 as prepaid rent and a security deposit of $22,992. The following table shows the aggregate commitment by year:

The Company is currently evaluating the impact that the adoption of ASC Topic 842,Leases, will have at January 1, 2019 upon recognition of the right-of-use assets and corresponding lease liability, initially measured at the present value of the lease payments, on its condensed consolidated balance sheets for this lease commitment, as well as the disclosure of key information about this lease arrangement, including the overall presentation on its condensed consolidated financial statements.

On a select basis, the Company has provided revenue share guarantees to certain independent publishers that transition their publishing operations from another platform to theMaven.net or maven.io. These arrangements generally guarantee the publisher a monthly amount of income for a period of 12 to 24 months from inception of the publisher contract that is the greater of (a) a fixed monthly minimum, or (b) the calculated earned revenue share. During the three months ended ~~June~~September 30, 2018 and ~~June 30,~~ 2017, the Company paid Channel Partner guarantees of ~~$397,200~~$297,887 and ~~$53,333,~~$164,336, respectively. During the ~~six~~nine months ended ~~June~~September 30, 2018 and ~~June 30,~~ 2017, the Company paid Channel Partner guarantees of ~~$803,486~~$1,101,373 and ~~$98,000,~~$202,669, respectively. To the extent that the fixed monthly minimum paid exceeds the earned revenue share (defined as an Over Advance) in any month during the first 12 to 24 months (“the Guarantee Period”), then the Company may recoup the aggregate Over Advance that was expensed in the Guarantee Period during the 12 months following the Guarantee Period of the publisher contract to the extent that the earned revenue share exceeds the monthly minimum in those future months. As of JuneAt September 30, 2018, the aggregate commitment ~~is $547,000 and the Over Advance contingent amount that the Company may recoup is approximately $500,000.~~was $23,750. The following table shows the aggregate commitment by year:

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 or results of operations.

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 in the condensed consolidated financial statements.

On ~~July 13,~~October 18, 2018, the Company ~~borrowed $225,000 from the CEO on a new promissory note payable upon demand with interest at the minimum applicable federal rate which is approximately 2.34 percent.~~

~~On August 4, 2018, the Company and Say Media, Inc., a Delaware corporation (“Say”),~~ entered into a securities purchase agreement with two accredited investors, B. Riley and an ~~Amended & Restated Asset Purchase Agreement (the “APA”),~~affiliated entity of B. Riley, pursuant to which the Company ~~will acquire substantially all of the assets of Say and assume certain liabilities of Say (the “Acquisition”). On August 24, 2018, the Company and Say entered into a modification~~issued to the APA to re-negotiate the Acquisition as a merger rather than as an asset purchase arrangement. The parties are continuing to negotiate the terms of a merger agreement. The parties have agreed to restructure the Company’s proposed acquisition of Say from an asset purchase to a merger. Accordingly, the End Date (as that term is definedinvestors 10% original issue discount senior secured convertible debentures (the “10% OID Convertible Debentures”) in the ~~APA) has been pushed back from August 20, 2018 to September 10, 2018, to give~~aggregate principal amount of $3,500,000, which, after taking into account the ~~parties time to negotiate a definitive merger agreement pursuant to which a to-be-formed subsidiary of the Company will merge with~~5% original issue discount, and ~~into Say, with Say continuing as the surviving corporation in the merger and a wholly-owned subsidiary of the Company.~~

~~In connection with the Amendment, the Company made a $100,000 payment to a creditor of Say and a $450,000 payment to counsel for Say for~~ legal fees and expenses ~~incurred to date and that may be incurred~~of the investors, resulted in the ~~future, in each case, by Say in connection with the transactions contemplated by the APA and the negotiation, execution and consummation~~Company receiving net proceeds of ~~the proposed merger agreement between Say and the Company.~~

~~Subsequent~~$3,285,000. The Company issued warrants to the ~~initial Acquisition Agreement, the Company has made cash payments to Say Media or to creditors of Say Media totaling $3,680,000:~~

~~Summary of the APA Prior to Modification to Renegotiate the Acquisition as a Merger~~

Pursuant to the APA, the Company shall (i) pay to Say $5,887,072 in cash consideration at closing, up to $1,250,000 of which shall be paid by cancelling (x) the $1,000,000 Promissory Note of Say dated March 26, 2018 and (y) the $250,000 Promissory Note of Say dated July 23, 2018, (ii) issue to Say a secured promissory note in principal amount of $7,434,003, due on December 10, 2018 (the “Note”), (iii) issue (A) 1,840,000 restricted shares of Common Stock of the Company to Say and (B) 160,000 restricted shares of Common Stock of the Company, plus that number of convertible securities equal to $350,000 divided by the lowest price per share paid in the Company’s then most recent equity financing, to Say What, LLC, in partial satisfaction of certain senior promissory notes issued by Say to Say What, (iv) pay Say’s legal fees and expenses in connection with the transaction, up to $250,000, (v) on or before October 15, 2018, deliver a Letter of Credit to Say as partial security for the Company’s obligations under the Note, (vi) reimburse Say for its legal, accounting and other costs incurred in connection with the winding down and dissolution of Say, in an aggregate amount not to exceed $300,000, and (vii) issue to certain employees and consultants of Say who will continue to be service providers of the Company, a further 2,000,000 restricted shares of Common Stock of the Company.

The APA contains typical representations and warranties by Say about its business, operations and financial condition. Consummation of the Acquisition is subject to certain customary closing conditions. The Company will have to obtain financing for the Letter of Credit in October 2018 and for the repayment of the Note in December 2018, and there can be no assurance that the Company will be able to obtain the necessary funds on terms acceptable to it or at all. The Note will have a security interest in all the assets of the Company.

~~Furthermore, effective as of August 3, 2018, the Company adjusted the exercise price of the Common Stock Purchase Warrant~~investors to purchase up to ~~1.5 million shares of the Company’s Common Stock, issued to the Strome Mezzanine Fund LP on June 15, 2018, from $1.19 per share to $0.50 per share.~~

On August 10, 2018 (the “Closing Date”), the Company, closed on a securities purchase agreement (the “Securities Purchase Agreement”) with certain accredited investors (the “Investors”), pursuant to which the Company sold an aggregate of 18,730 shares of the Company’s Series H Convertible Preferred Stock, par value $0.01 per share (the “Series H Preferred Stock”), at a stated value of $1,000 (the “Stated Value”), initially convertible into 56,757,575875,000 shares of the Company’s common stock ~~par value $0.01~~in connection with this securities purchase agreement. The debentures were due and payable on October 31, 2019. Interest accrued on the debentures at the rate of 10% per ~~share (the “Common Stock”), at a~~annum, payable on the earlier of conversion, rate equal to the Stated Value divided by the conversion price of $0.33 (the “Conversion Price”), for aggregate gross proceeds of $13 million. Of the shares of Series H Preferred Stock issued, 5,730 were issued upon conversion of an aggregate principal amount of $4,775,000 and interest and prepayment amounts of the 10% Convertible Debentures (the “Debentures”) issued by the Company on June 15, 2018 to certain accredited investors, including 1,200 shares of Series H Preferred Stock issued to James Heckman, the Company’s Chief Executive Officer, and 30 shares of Series H Preferred Stock issued Josh Jacobs, the Company’s President.

B. Riley FBR, Inc. (“B. Riley”) acted as placement agent for the financing. In consideration for its services as placement, the Company paid B. Riley a fee of $575,000 (including a previously paid retainer of $75,000) and issued to B. Riley 669 shares of Series H Preferred Stock. In addition, entities affiliated with B. Riley purchased 5,592 shares of Series H Preferred Stock in the financing.redemption or October 31, 2019.

The ~~number of~~debentures were convertible into shares of ~~Common Stock issuable upon conversion~~the Company’s common stock at the option of the Series H Preferred Stock is currently 58,784,849. The terms of Series H Preferred Stock and the number of shares of Common Stock issuable is adjustable in the event of stock splits, stock dividends, combinations of shares and similar transactions. In addition, ifinvestor at any time prior to October 31, 2019, at a conversion price of $1.00 per share, subject to adjustment for stock splits, stock dividends and similar transactions, and were subject to certain redemption rights by the ~~nine month anniversary~~Company. On December 12, 2018, there was a roll-over of the ~~Closing Date,~~10% OID Convertible Debentures into the 12% Convertible Debentures (as further described below).

On December 12, 2018, the Company ~~sells~~entered into a securities purchase agreement with three accredited investors, pursuant to which the Company issued to the investors 12% senior secured subordinated convertible debentures (the “12% Convertible Debentures”) in the aggregate principal amount of $13,091,528, which includes (i) the roll-over of an aggregate of $3,551,528 in principal and interest of the 10% OID Convertible Debentures issued to two of the investors on October 18, 2018, and (ii) a placement fee, payable in cash, of $540,000 to the Company’s placement agent, B. Riley FBR, in the offering. After taking into account legal fees and expenses of the investors, the Company received net proceeds of $8,950,000. The 12% Convertible Debentures are due and payable on December 31, 2020. Interest accrues at the rate of 12% per annum, payable on the earlier of conversion or ~~grants any option or right~~December 31, 2020. The Company’s obligations under the 12% Convertible Debentures are secured by a security agreement, dated as of October 18, 2018, by and among the Company and each investor thereto.

Subject to ~~purchase or issues any~~the Company receiving shareholder approval to increase its authorized shares of ~~Common Stock, or securities~~common stock, principal and interest accrued on the 12% Convertible Debentures are convertible into shares of ~~Common Stock,~~common stock, at the option of the investor at any time prior to December 31, 2020, at a conversion price of $0.33 per share, subject to adjustment for stock splits, stock dividends and similar transactions, and beneficial ownership blocker provisions. If the Company does not perform certain of its obligations in a timely manner, it must pay Liquidated Damages to the investors (see Note 17).

As long as any portion of the 12% Convertible Debentures remain outstanding, unless investors holding at least 51% in principal amount of the then outstanding 12% Convertible Debentures otherwise agree, the Company shall not, among other things enter into, incur, assume or guarantee any indebtedness, except for certain permitted indebtedness.

On March 18, 2019, the Company entered into a securities purchase agreement with ~~net proceeds in excess~~two accredited investors, including John Fichthorn, the Company’s Chairman of ~~$1 million~~the Board, pursuant to which the Company issued 12% Convertible Debentures in the aggregate ~~entitling any person~~principal amount of $1,696,000, which includes a placement fee of $96,000 paid to ~~acquire shares~~B. Riley FBR in the form of ~~Common Stock at~~a 12% Convertible Debenture, for acting as the Company’s placement agent in the offering. After taking into account legal fees and expenses of $10,000 which were paid in cash, the Company received net proceeds of $1,590,000.

On March 27, 2019, the Company entered into a securities purchase agreement with an ~~effective price per share that is lower than~~accredited investor pursuant to which the ~~then Conversion Price (such lower price,~~Company issued 12% Convertible Debentures in the ~~“Base Conversion Price”), then~~aggregate principal amount of $318,000, which includes a placement fee of $18,000 paid to B. Riley FBR in the ~~Conversion Price shall be reduced to equal~~form of a 12% Debenture for acting as the ~~Base Conversion Price. All~~Company’s placement agent in the offering. After taking into account legal fees and expenses, the Company received net proceeds of $300,000.

On April 8, 2019, the Company entered into a securities purchase agreement with an accredited investor, Todd D. Sims, a member of the ~~shares~~Company’s Board, pursuant to which the Company issued a 12% Convertible Debenture in the aggregate principal amount of ~~Series H Preferred Stock shall convert automatically~~$100,000. In connection with this placement, B. Riley FBR waived its placement fee of $6,000 for acting as the Company’s placement agent in the offering. After taking into account legal fees and expenses, the Company received net proceeds of $100,000.

The 12% Convertible Debentures issued on March 18, 2019, March 27, 2019 and April 8, 2019 are convertible into shares of ~~Common Stock on~~ the ~~fifth anniversary~~Company’s common stock at the option of the ~~Closing Date~~investor at any time prior to December 31, 2020, at a conversion price of $0.40 per share, subject to adjustment for stock splits, stock dividends and similar transactions, and beneficial ownership blocker provisions. All other terms of the ~~then Conversion Price.~~12% Convertible Debentures issued on March 18, 2019, March 27, 2019 and April 8, 2019 are identical to the 12% Convertible Debentures issued on December 12, 2018.

~~In connection with the financing, B. Riley and a majority-in-interest of the Investors each have been granted the right to designate one director~~Pursuant to the Company’s Board of Directors, (each a “Designee”). Further, so long as at least 20% of the shares of Series H Preferred Stock issued in the financing are outstanding, the Company shall recommend to its stockholders that it elect each Designee to serve as a director on the Company’s Board of Directors.

The Company intends to use the net proceeds from the financing to consummate its previously announced acquisitions of Say Media, Inc. and HubPages, Inc. and for working capital and general corporate purposes.

~~Additionally, pursuant to a Registration Rights Agreement (“Registration Rights Agreement”)~~registration rights agreements entered into in connection with the ~~Securities Purchase Agreement,~~securities purchase agreements on March 18, 2019, March 27, 2019 and April 8, 2019, the Company agreed to register the shares issuable upon conversion of the ~~Series H Preferred Stock~~12% Convertible Debentures for resale by the ~~Investors.~~investors. The Company ~~has~~ committed to file the registration statement bythe later of (i) the 30th calendar day following the date the Company files its Annual Report on Form 10-K for the fiscal year ended December 31, 2018 with the SEC, but in no event later than ~~75 days~~May 15, 2019, and (ii) the 30th calendar day after all the ~~Closing Date and~~Series H Preferred Stock have been registered pursuant to ~~cause the~~a registration statement ~~to become effective by no later than 120 days after the Closing Date (or, in the event~~under a certain registration rights agreement, dated as of ~~a full review by the staff of the Securities and Exchange Commission, 150 days following the Closing Date).~~August 9, 2018. The registration rights agreements provide for Registration Rights ~~Agreement provides for liquidated damages~~Damages (as further described in Note 10) upon the occurrence of certain events up to a maximum amount of 6% of the aggregate amount invested ~~by such Investor~~(refer to “Liquidating Damages” below for further details).

The securities purchase agreements also included a provision that requires the Company to maintain its periodic filings with the SEC in order to satisfy the public information requirements under Rule 144(c) of the Securities Act. If the Company fails for any reason to satisfy the current public information requirement, then the Company will be obligated to pay Public Information Failure Damages (as further described in Note 10) to each holder, consisting of a cash payment equal to 1% of the amount invested as partial liquidated damages, up to a maximum of six months, subject to interest at the rate of 1% per month until paid in full (refer to “Liquidating Damages” below for further details).

On October 12, 2018, the Company, Say Media, a Delaware corporation, SM Acquisition Co., Inc., a Delaware corporation (“SMAC”), which is a wholly-owned subsidiary of the Company incorporated in Delaware on September 6, 2018 to facilitate the merger, and Matt Sanchez, solely in his capacity as a representative of the Say Media security holders, entered into the Merger Agreements, pursuant to which SMAC will merge with and into Say Media, with Say Media continuing as the surviving corporation in the merger as a wholly-owned subsidiary of the Company.

On December 12, 2018, the Company consummated the merger with Say Media, pursuant to the ~~Purchase Agreement.~~terms of the Merger Agreements.

In connection with the consummation of the merger, total cash consideration of $9,537,397 was paid (net of cash acquired of $534,637), including the following: (1) $6,703,653 to a creditor of Say Media; (2) $250,000 transaction bonus to a designated employee of Say Media; (3) $2,078,498 advanced prior to September 30, 2018 for certain execution payments in connection with the acquisition; and (4) $505,246 for legal fees ($450,000 was advanced for acquisition related legal fees of Say Media paid on August 27, 2018 and additional cash consideration of $55,246 was paid at the Closing for acquisition related legal fees incurred). Furthermore, under the terms of the Merger Agreements, the Company agreed to issue 5,500,000 shares of its common stock to the former holders of Say Media’s Preferred Stock. The Company also issued a total of 2,000,000 restricted stock awards (see below “Restricted Stock Awards”), subsequent to the acquisition, to acquire common stock of the Company to key personnel for continuing services with Say Media, subject to vesting, and repurchase rights under certain circumstances. The shares issued are for post combination services.

From October 1, 2018 through December 12, 2018, the Company granted stock options, of which 56,000 are outstanding as of the issuance of these condensed consolidated financial statements, to acquire shares of common stock.

On ~~August 23, 2018, TheMaven, Inc. consummated~~April 4, 2019, the ~~merger between HubPages, Inc. (“HubPages”~~Board of the Company adopted the 2019 Equity Incentive Plan (the “2019 Plan”). The purpose of the 2019 Plan is to seek, to better secure, and to retain the services of a select group of persons, to provide incentives for those persons to exert maximum efforts for the success of the Company and its affiliates, and to provide a means by which those persons have an opportunity to benefit from increases in the value of the Company’s common stock through the granting of stock awards.

The 2019 Plan allows the Company to grant non-statutory stock options, stock appreciation rights, restricted stock awards and/or restricted stock units awards to acquire shares of the Company’s common stock to the Company’s employees, directors and consultants, all of which require the achievement of certain price targets by the Company’s common stock.

From April 10, 2019 through March 26, 2020, the Company granted stock options, of which 79,494,813 are outstanding as of the issuance of these condensed consolidated financial statements, to acquire shares of the Company’s common stock to officers, directors, employees and consultants. The Company’s shareholders approved the 2019 Plan and the maximum number of shares authorized of 85,000,000 under the plan on April 3, 2020. The Company does not currently have sufficient authorized but unissued common shares to allow for the exercise of the stock options granted under this plan; accordingly, any stock option grants under this plan are considered as unfunded and cannot be exercised until sufficient common shares have been authorized.

From October 1, 2018 through February 22, 2019, the Company granted restricted stock awards, of which 906,367 are outstanding as of the issuance of these condensed consolidated financial statements, for shares of common stock. In connection with the Say Media acquisition the Company granted restricted stock awards, of which 1,175,000 are outstanding as of the issuance of these condensed consolidated financial statements, for shares of common stock. On May 31, 2019, the Company granted 2,399,997 restricted stock units to the holders of the restricted stock awards in connection with the Merger in consideration for an amendment to the true up provisions.

From December 12, 2018 through March 16, 2019, the Company granted stock options, of which 3,821,333 are outstanding as of the issuance of these condensed consolidated financial statements, to acquire shares of the Company’s ~~wholly-owned subsidiary, HP~~common stock to officers, directors and employees outside of the 2016 Plan and the 2019 Plan. The Company does not currently have sufficient authorized but unissued common shares to allow for the exercise of these stock options, these stock option grants are considered as unfunded and cannot be exercised until sufficient common shares have been authorized.

Under ASC 815-40-35, the Company adopted a sequencing policy whereby, in the event that reclassification of contracts from equity to assets or liabilities is necessary pursuant to ASC 815 due to the Company’s inability to demonstrate it has sufficient authorized shares, shares will be allocated on the basis of the earliest issuance date of potentially dilutive instruments, with the earliest grants receiving the first allocation of shares. Pursuant to ASC 815, issuance of securities to the Company’s employees or directors are not subject to the sequencing policy.

On May 3, 2019, the Company announced the appointment of Douglas Smith as the Company’s Chief Financial Officer.

Pursuant to the terms of an Employment Agreement with the Company, dated as of May 1, 2019, Mr. Smith shall receive an annual salary of $400,000 and be entitled to receive bonuses to be agreed by Company and Mr. Smith in good faith from time to time based on then current financial status of the Company. If Mr. Smith’s employment with the Company is terminated by the Company Without Cause or by Mr. Smith for Good Reason (as those terms are defined in the Employment Agreement), then Mr. Smith shall be entitled to receive a lump sum payment equal to six months of his annual salary.

Mr. Smith was granted options to purchase up to 1,500,000 shares of the Company’s common stock, having an exercise price of $0.57 per share, a term of 10 years, and subject to vesting as described below. These options were granted outside of the 2016 Plan and the 2019 Plan. Of the 1,500,000 options granted: (i) 1,000,000 options will vest over 36 months, with 1/3 vesting after 12 months of continuous service and 1/36 vesting monthly for each month of continuous service thereafter; and (ii) 500,000 will vest over 36 months, with 1/3 vesting after 12 months of continuous service and 1/36 vesting monthly for each month of continuous service thereafter, subject to the Company’s common stock being listed on a national securities exchange.

Mr. Smith was also granted options to purchase up to 1,064,008 shares of the Company’s common stock, having an exercise price of $0.46 per share, a term of 10 years, and subject to vesting based both on time and targets tied to the Company’s common stock, as follows: (i) the options will vest over 36 months, with 1/3 vesting after 12 months of continuous service and 1/36 vesting monthly for each month of continuous service thereafter; and (ii) the Company’s common stock must be listed on a national securities exchange, with incremental vesting upon achievement of certain stock price targets based on a 45-day VWAP during which time the average monthly trading volume of the common stock must be at least 15% of the Company’s aggregate market capitalization.

On June 11, 2019, the Company, TST Acquisition Co., Inc., a Delaware corporation (“~~HPAC”~~TSTAC”), ina newly-formed indirect wholly-owned subsidiary of the Company, and TheStreet, Inc., a Delaware corporation (“TheStreet”), entered into an agreement and plan of merger, pursuant to which ~~HPAC merged~~TSTAC will merge with and into ~~HubPages,~~TheStreet, with ~~HubPages~~TheStreet continuing as the surviving corporation in the merger and as a wholly-owned subsidiary of the Company.

The merger agreement provided that all issued and outstanding shares of common stock of TheStreet (other than those shares with respect to which appraisal rights have been properly exercised) will be exchanged for an aggregate of $16,500,000 in cash. Pursuant to the terms of the merger agreement, on June 10, 2019, the Company ~~(the “Merger”)~~deposited $16,500,000 into an escrow account pursuant to an escrow agreement, dated June 10, 2019, by and among the Company, TheStreet and Citibank, N.A., as escrow agent.

On August 7, 2019, the Company consummated the merger between TheStreet and TSTAC, pursuant to which TSTAC merged with and into TheStreet, with TheStreet continuing as the surviving corporation in the merger and as an indirect wholly-owned subsidiary of the Company, pursuant to the terms of the ~~previously announced an Agreement and Plan of Merger (the “Merger Agreement”),~~merger agreement dated as of ~~March 13, 2018,~~June 11, 2019, as ~~amended, among the Company, HubPages, HPAC and Paul Edmondson, solely in his capacity as Securityholder Representative.~~

amended. In connection with the consummation of the ~~Merger,~~merger, the Company paid a total of ~~$10 million~~$16,500,000 in cash to ~~HubPages’ stockholders~~TheStreet’s stockholders. This transaction was funded through a debt financing arranged by a subsidiary of B. Riley Financial, Inc. (see below “Amended and ~~holders~~Restated Note Purchase Agreement”).

On August 8, 2019, in connection with the merger, finance and stock market expert Jim Cramer, who co-founded TheStreet, agreed to enter into a new partnership with TheStreet through Cramer Digital, a new production company featuring the digital rights and content created by Mr. Cramer and his team of ~~vested options.~~financial experts. The partnership will allow Mr. Cramer to continue his subscription and content offerings and will be under his editorial control. The Company ~~also~~expects that TheStreet’s senior management will continue with the Company subsequent to the merger.

On June 10, 2019, the Company entered into a note purchase agreement with one accredited investor, BRF Finance Co., LLC, an affiliated entity of B. Riley, pursuant to which the Company issued to the investor a 12% senior secured note, due July 31, 2019, in the aggregate principal amount of $20,000,000, which after taking into account B. Riley’s placement fee of $1,000,000 and legal fees and expenses of the investor, resulted in the Company receiving net proceeds of $18,865,000, of which $16,500,000 was deposited into escrow to fund TheStreet merger consideration and the balance of $2,365,000 was to be used by the Company for working capital and general corporate purposes.

On June 14, 2019, the Company and ABG-SI LLC (“ABG”), a Delaware limited liability company and indirect wholly-owned subsidiary of Authentic Brands Group, entered into a licensing agreement (the “Licensing Agreement”) pursuant to which the Company shall have the exclusive right and license in the United States, Canada, Mexico, United Kingdom, Republic of Ireland, Australia and New Zealand to operate the Sports Illustrated media business (in the English and Spanish languages), including to (i) operate the digital and print editions ofSports Illustrated(including all special interest issues and the swimsuit issue) andSports Illustrated for Kids, (ii) develop new digital media channels under the Sports Illustrated brands and (iii) operate certain related businesses, including without limitation, special interest publications, video channels, bookazines and the licensing and/or syndication of certain products and content under the Sports Illustrated brand (collectively, the “Licensed Business”). The Company is not required to implement geo filtering or other systems to prevent users located outside the territory from accessing the digital channels in the territory.

The initial term of the Licensing Agreement shall commence upon the termination of the Meredith License Agreement (as defined below) and shall continue through December 31, 2029. The Company has the option, subject to certain conditions, to renew the term of the Licensing Agreement for nine consecutive renewal terms of 10 years each (collectively, the “Term”), for a total of ~~2.4 million~~100 years.

The Licensing Agreement provides that the Company shall pay to ABG annual royalties in respect of each year of the Term based on gross revenues (“Royalties”) with guaranteed minimum annual amounts. The Company has prepaid ABG $45,000,000 against future Royalties. ABG will pay to the Company a share of revenues relating to certain Sports Illustrated business lines not licensed to the Company, such as commerce. The two companies will be partnering in building the brand worldwide.

Pursuant to a publicly announced agreement between ABG and Meredith Corporation (“Meredith”), an Iowa corporation, Meredith operated the Licensed Business under license from ABG (the “Meredith License Agreement). On October 3, 2019 Maven, ABG and Meredith entered into a Transition Services Agreement and an Outsourcing Agreement whereby the parties agreed to the terms and conditions under which Meredith would continue to operate certain aspects of the business, and provide certain services during the fourth quarter of 2019 as all activities were transitioned over to Maven. Through these agreements, Maven took over operating control of the Sports Illustrated business.

The Company has agreed to issue to ABG within 30 days of the execution of the Licensing Agreement warrants to acquire common stock of the Company representing 10% of the Company’s fully diluted equity securities (“Warrants”). Half the Warrants shall have an exercise price of $0.42 per share (the “Forty-Two Cents Warrants”). The other half of the Warrants shall have an exercise price of $0.84 per share (the “Eighty-Four Cents Warrants”). The Warrants provide for the following: (1) 40% of the Forty-Two Cents Warrants and 40% of the Eighty-Four Cents Warrants shall vest in equal monthly increments over a period of two years beginning on the one year anniversary of the date of issuance of the Warrants (any unvested portion of such Warrants to be forfeited by ABG upon certain terminations by the Company of the Licensing Agreement); (2) 60% of the Forty-Two Cents Warrants and 60% of the Eighty-Four Cents Warrants shall vest based on the achievement of certain performance goals for the Licensed Business in calendar years 2020, 2021, 2022 or 2023; (3) under certain circumstances the Company may require ABG to exercise all (and not less than all) of the Warrants, in which case all of the Warrants shall be vested; (4) all of the Warrants shall automatically vest upon certain terminations of the Licensing Agreement by ABG or upon a change of control of the Company; and (5) ABG shall have the right to participate, on a pro-rata basis (including vested and unvested Warrants, exercised or unexercised), in any future equity issuance of the Company (subject to customary exceptions).

Additionally, Ross Levinsohn, the former senior executive from Fox and Yahoo!, had agreed to become the new Chief Executive Officer of the Licensed Business.

Mr. Levinsohn was a director of the Company from November 4, 2016 through October 20, 2017. In conjunction with Mr. Levinsohn’s services as a director of the Company, he received restricted stock awards for 245,434 shares of common stock. Mr. Levinsohn retained his restricted ~~Common Stock,~~stock awards and they continued to vest subsequent to his resignation from the Board on October 20, 2017. The restricted stock awards will continue to vest through October 16, 2019. In conjunction with the vesting of the restricted stock awards, the Company recognized stock based compensation cost of $16,616 and $71,619 for the three months and nine months ended September 30, 2018, respectively, and $28,634 and $14,317 for the three months and nine months ended September 30, 2017, respectively, which was included in general and administrative expenses in the condensed consolidated statements of operations.

On April 10, 2019, the Company entered into an Advisory Services Agreement with Mr. Levinsohn to provide advisory services with respect to strategic transactions in the media and digital publishing industries, in exchange for which Mr. Levinsohn was granted a stock option to purchase 532,004 shares of common stock, exercisable for a period of 10 years at $0.46 per share (the closing market price on April 10, 2019) subject to vesting (i) based on the achievement by the Company of stock price and liquidity targets and becoming listed on a national securities exchange and (ii) a concurrent 36-month vesting period with a 12-month cliff, and may not be exercised until the Company has increased its authorized shares of common stock to ~~certain key personnel~~a sufficient number to permit the full exercise of ~~HubPages who agreed to continue their employment with HubPages.~~the stock options granted; accordingly, these stock option grants are considered as unfunded and cannot be exercised until sufficient common shares have been authorized.

On June 11, 2019, Mr. Levinsohn was granted stock options, in conjunction with Mr. Levinsohn’s services relating to the Company’s entry into the Licensing Agreement, to acquire 2,000,000 shares of ~~8% Convertible Notes Payable~~common stock under the Company’s 2019 Plan. These stock options vest monthly over three years, with one-third vesting after 12 months of continuous service from the grant date and a further 1/36 vesting at the end of each month of continuous service thereafter, exercisable for a period of ten years at $0.42 per share (the closing market price on June 11, 2019), and may not be exercised until the Company has increased its authorized shares of common stock to a sufficient number to permit the full exercise of the stock options granted; accordingly, these stock option grants are considered as unfunded and cannot be exercised until sufficient common shares have been authorized.

On September ~~6, 2018,~~16, 2019, Mr. Levinsohn was granted a stock options, in conjunction with Mr. Levinsohn’s services relating to the Company’s entry into the Licensing Agreement, to acquire 2,000,000 shares of common stock under the Company’s 2019 Plan. These stock options vest monthly over three years, with one-third vesting after 12 months of continuous service from the grant date and the remaining two-thirds over next 24 months subject to meeting certain revenue targets, exercisable for a period of ten years, $0.78 per share (the closing market price on September 16, 2019), and may not be exercised until the Company ~~repaid~~has increased its authorized shares of common stock to a sufficient number to permit the 8%full exercise of the stock options granted; accordingly, these stock option grants are considered as unfunded and cannot be exercised until sufficient common shares have been authorized.

Mr. Levinsohn has also entered into an agreement with the Company to purchase $500,000 of the Company’s newly-designated Series I Convertible ~~Notes Payable~~Preferred Stock.

On June 14, 2019, the Company entered into an amended and restated note purchase agreement with one accredited investor, BRF Finance Co., LLC, an affiliated entity of B. Riley, which amended and restated the 12% senior secured note dated June 10, 2019, by and among the Company and the investor. Pursuant to ~~L2 Capital, LLC.~~this amendment, the Company issued an amended and restated 12% senior secured note, due June 14, 2022, in the aggregate principal amount of $68,000,000, which amends, restates and supersedes that $20,000,000 12% senior secured note issued by the Company on June 10, 2019 to the investor. The Company received additional gross proceeds of $48,000,000, which after taking into account B. Riley’s placement fee of $2,400,000 and legal fees and expenses of the investor, the Company received net proceeds of $45,550,000, of which $45,000,000 was paid to ABG-SI LLC against future royalties in connection with the Company’s previously announced Licensing Agreement, dated June 14, 2019, with ABG-SI LLC, and the balance of $550,000 will be used by the Company for working capital and general corporate purposes.

On August 27, 2019, the Company entered into a first amendment to the amended note purchase agreement with one accredited investor, BRF Finance Co., LLC, an affiliated entity of B. Riley, which amended the amended and restated 12% senior secured note dated June 14, 2019. Pursuant to this first amendment, the Company received gross proceeds of $3,000,000, which after taking into account a closing fee paid to the investor of $150,000 and legal fees and expenses of the investor, the Company received net proceeds of approximately $2,830,000, which will be used by the Company for working capital and general corporate purposes.

On February 27, 2020, the Company entered into a second amendment to amended and restated note purchase agreement with one accredited investor, BRF Finance Co., LLC,an affiliated entity of B. Riley,which amended the first amendment to the amended and restated 12% senior secured note dated August 27, 2019. Pursuant to the second amendment, the Company is (i) allowed to replace its previous $3.5 million working capital facility with a new $15.0 million working capital facility; and (ii) permitted to account for the issuance by the investor of a $3.0 million letter of credit to the Company’s landlord for the Company’s lease of the premises located at 225 Liberty Street, 27th Floor, New York, NY 10281.

On September 10, 2019, a total of 1,078,661 warrants were exercised on a cashless basis, for a total of 539,331 shares of common stock.

On June 27, 2019, 25,800 authorized shares of the Company’s preferred stock were designated as “Series I Convertible Preferred Stock” (the “Series I Preferred Stock”). On June 28, 2019, the Company closed on a securities purchase agreement with certain accredited investors, pursuant to which the Company issued an aggregate of 23,100 shares of Series I Preferred Stock at a stated value of $1,000, initially convertible into 46,200,000 shares of the Company’s common stock at a conversion rate equal to the stated value divided by the conversion price of $0.50 per share, for aggregate gross proceeds of $23,100,000.

In consideration for its services as placement agent, the Company paid B. Riley FBR a cash fee of $1,386,000 plus $52,500 in reimbursement of legal fees and other transaction costs. The Company used approximately $21.7 million of the net proceeds from the financing to partially repay the amended and restated 12% senior secured note dated June 14, 2019, and to pay deferred fees of approximately $3,400,000 related to that borrowing facility.

Pursuant to the registration rights agreements entered into in connection with the securities purchase agreements on June 28, 2019, the Company agreed to register the shares issuable upon conversion of the Series I Preferred Stock for resale by the investors. The Company committed to file the registration statement no later than the 30th calendar day following the date the Company files (i) its annual report on Form 10-K for the fiscal year ended December 31, 2018, (ii) all its required quarterly reports on Form 10-Q since the quarter ended September 30, 2018 through September 30, 2019, and (iii) current Form 8-K in connection with the acquisitions of TheStreet and its license with ABG-SI LLC, with the SEC, but in no event later than December 1, 2019. The Company committed to cause the registration statement to become effective by no later than 90 days after December 1, 2019, subject to certain conditions. The registration rights agreements provide for Registration Rights Damages (as further described in Note 10) upon the occurrence of certain events up to a maximum amount ~~borrowed was $1~~of 6% of the aggregate amount invested (refer to “Liquidating Damages” below for further details).

On October 4, 2019, 35,000 authorized shares of the Company’s preferred stock were designated as “Series J Convertible Preferred Stock” (the “Series J Preferred Stock”). On October 7, 2019, the Company closed on a securities purchase agreement with certain accredited investors, pursuant to which the Company issued an aggregate of 20,000 shares of Series J Preferred Stock at a stated value of $1,000, initially convertible into 28,571,428 shares of the Company’s common stock at a conversion rate equal to the stated value divided by the conversion price of $0.70 per share, for aggregate gross proceeds of $20,000,000.

In consideration for its services as placement agent, the Company paid B. Riley FBR a cash fee of $525,240 plus $43,043 in reimbursement of legal fees and other transaction costs. The Company used $5.0 million of the net proceeds from the financing to partially repay the amended and restated 12% senior secured note dated June 14, 2019, and to use net proceeds of approximately $14.4 million for working capital and general corporate purposes.

Pursuant to the registration rights agreements entered into in connection with the securities purchase agreements on October 7, 2019, the Company agreed to register the shares issuable upon conversion of the Series J Preferred Stock for resale by the investors. The Company committed to file the registration statement no later than the 30th calendar day following the date the Company files (i) its annual report on Form 10-K for the fiscal year ended December 31, 2018, (ii) all its required quarterly reports on Form 10-Q since the quarter ended September 30, 2018 through September 30, 2019, and (iii) current Form 8-K in connection with the acquisitions of TheStreet, Say Media, HubPages, and its license with ABG-SI LLC, with the SEC, but in no event later than March 31, 2020. The Company committed to cause the registration statement to become effective by no later than 90 days after March 31, 2020, subject to certain conditions. The registration rights agreements provide for Registration Rights Damages (as further described in Note 10) upon the occurrence of certain events up to a maximum amount of 6% of the aggregate amount invested (refer to “Liquidating Damages” below for further details).

On December 9, 2019, the Company announced the appointment of William Sornsin as the Company’s Chief Operating Officer. Mr. Sornsin has been with the Company since 2016 and has filled various roles with the Company since that time. Mr. Paul Edmondson, who had also held the position of Chief Operating Officer, will continue as the Company’s President.

On December 9, 2019, Company announced the appointment of Mr. Avi Zimak as the Company’s Chief Revenue Officer and Head of Global Strategic Partnerships. Mr. Zimak, will be employed on a full time basis, at an annual salary of $450,000. Mr. Zimak will be paid a signing bonus of $250,000, subject to recapture in certain circumstances if Mr. Zimak’s employment ends before the second anniversary of the date of his employment agreement. Mr. Zimak will be eligible for an annual bonus of up to $450,000, based on the achievement in each calendar year of defined annual revenue targets, calculated on a quarterly basis, and paid quarterly subject to an annual reconciliation. Mr. Zimak will be granted a ten-year stock option to purchase up to an aggregate of 2,250,000 shares of common stock under the 2019 Plan. The stock options will vest as to 1,125,000 shares, in three equal installments, based on performance targets tied to the achievement of established annual revenue targets for fiscal years 2020 to and including 2022. The remaining 1,250,000 stock options will vest as follows: (i) 1/3 will vest after 12 months from the date of the employment agreement; and (ii) then 1/36th will vest at the end of each month thereafter, concluding 36 months from the effect date of the employment agreement. Currently these options are unfunded, and the Company has agreed to timely increase the availability of shares of common stock to permit the exercise of the options upon vesting. At the commencement of the employment, Mr. Zimak will also be awarded restricted stock units for 250,000 shares of common stock, vesting one year after the date of the employment agreement, with the shares to be delivered on the fifth anniversary of the date of the employment agreement. The term of the employment agreement is for an initial period of two years, and it is automatically renewed for one additional year periods thereafter if not previously terminated. The employment agreement has early termination provisions for cause, permanent incapacity, and death. Mr. Zimak has the right to terminate for good reason in certain circumstances. In the event of certain of the early termination events, the Company will be obligated to pay salary compensation, bonus amounts and various of the restricted stock units will continue to vest. In the event of termination, the vested stock options and further vesting will be governed by the terms of the stock option grant and the plan under which they are granted. During the employment period and for one year thereafter, Mr. Zimak will be subject to the Company’s typical non-solicitation and competition provisions for all executive employees.

On December 19, 2019, the Company’s wholly owned subsidiaries Maven Coalition, Inc., a Nevada corporation, and HubPages, Inc, a Delaware corporation, were merged into the Company’s wholly owned subsidiary Say Media, Inc, a Delaware corporation. On January 6, 2020 Say Media, Inc. amended its certificate of incorporation to change its name to Maven Coalition, Inc.

On January 14, 2020, the Company entered into a lease agreement for offices at 225 Liberty Street, 27^th Floor, New York, New York, with an effective date in February 1, 2020. Under the terms of the agreement, the Company ~~repaid $1,351,000 to satisfy~~has a rent abatement for the ~~debt. A loss on repayment~~initial nine months of the ~~debt~~lease term, with rent payments commencing during November 1, 2020 and the lease expiring in November 30, 2032. The Company has a maximum tenant allowance of $408,680 for certain costs. Monthly rental payments are as follows: 1) initial sixty-month term $252,019; 2) second sixty-month term $269,048; and 3) remainder twenty-five month term $286,076; for total minimum lease payments of $38,415,920. In addition to the ~~amount~~fixed rent the Company will also pay a portion of ~~$751,000 was recorded.~~the operating costs associated with the space and is entitled to.

~~This report by TheMaven, Inc. (“Parent”)~~The Company is currently evaluating the impact that the adoption of ASC Topic 842,Leases, which includes information for its wholly owned subsidiary Maven Coalition, Inc. (“Subsidiary”) (collectively “Maven,” “Company” or “we”) contains “forward-looking statements,” within the meaning of Section 27Awill have at January 1, 2019 upon recognition of the ~~Securities Act of 1933, as amended (the “Securities Act”),~~right-of-use assets and ~~Section 21E~~corresponding lease liability, initially measured at the present value of the ~~Securities Exchange Act~~lease payments, on its balance sheet for this lease commitment, as well as the disclosure of ~~1934, as amended (the “Exchange Act”~~key information about this lease arrangement, including the overall presentation on its condensed consolidated financial statements.

On February 27, 2020 the Company entered into a Financing and Security Agreement with FPP Finance LLC (“FastPay”)~~. Forward-looking statements relate~~ pursuant to ~~future events or future performance and include, without limitation, statements concerning the Company’s business strategy, future revenues, market growth,~~which FastPay extended a $15,000,000 line of credit for working capital ~~requirements, product introductions and expansion plans and the adequacy~~purposes secured by a first lien on all of the Company’s ~~funding. Other~~cash and accounts receivable and a second lien on all other assets. Borrowings under the facility bear interest at the LIBOR Rate plus 8.50% and have a final maturity of February 6, 2022. The balance outstanding as of the issuance of these condensed consolidated financial statements ~~contained~~was $4,924,531.

On March 9, 2020, the Company entered into an asset purchase agreement with Petametrics Inc., dba LiftIgniter, a Delaware corporation where it purchased substantially all the assets, including the intellectual property and excluding certain accounts receivable, and assumed certain liabilities. The purchase price consisted of: 1) cash payment of $184,086 on February 19, 2020, in ~~this Report~~connection with the repayment of all outstanding indebtedness, 2) at closing a cash payment of $131,202, 3) collections of certain accounts receivable, 4) on the first anniversary date of the closing issuance of restricted stock units for an aggregate of up to 312,500 shares of the Company’s common stock, and 5) on the second anniversary date of the closing issuance of restricted stock units for an aggregate of up to 312,500 shares of the Company’s common stock.

On March 24, 2020, the Company entered into a second amended and restated note purchase agreement with BRF Finance Co., LLC, an affiliated entity of B. Riley, in its capacity as agent for the purchasers, which amended and restated the amended and restated note purchase agreement dated June 14, 2019, as amended. Pursuant to the second amended and restated note purchase agreement, the Company issued a 15% delayed draw term note (the “Term Note”), in the aggregate principal amount of $12,000,000 to the investor. Up to $8,000,000 in principal amount under the Term Note is due on March 31, 2021, with the balance thereunder due on June 14, 2022. Interest on amounts outstanding under the Term Note are payable in kind in arrears on the last day of each fiscal quarter. On March 25, 2020, the Company drew down $6,913,865 under the Term Note, and after taking into account $793,109 of commitment and funding fees paid to the Investor and legal fees and expenses of the investor, the Company received net proceeds of approximately $6,000,000, which will be used by the Company for working capital and general corporate purposes. Additional borrowings under the note requested by the Company may be made at the option of the purchasers. Pursuant to the note purchase agreement, interest on amounts outstanding under the notes previously issued under the amended and restated note purchase agreement with respect to (x) interest payable on the notes previously issued under the amended and restated note purchase agreement on March 31, 2020 and June 30, 2020, and (y) at the Company’s option with the consent of requisite purchasers, interest payable on the previously issued under the amended and restated note purchase agreement on September 30, 2020 and December 31, 2020, in lieu of the payment in cash of all or any portion of the interest due on such dates, will be payable in kind in arrears on the last day of such fiscal quarter. The balance outstanding as of the issuance of these condensed consolidated financial statements was $6,913,865.

In connection with entering into the note purchase agreement, the Company entered into an amendment to its $15 million FastPay working capital facility to permit the additional secured debt that ~~are not historical facts are also forward-looking statements.~~may be incurred under the note.

On April 6, 2020, the Company entered into a note agreement with JPMorgan Chase Bank, N.A. under the recently enacted Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) administered by the U.S. Small Business Administration (“SBA”). The Company received total proceeds of approximately $5.7 million under the note. In accordance with the requirements of the CARES Act, the Company will use proceeds from the note agreement primarily for payroll costs. The note is scheduled to mature on April 6, 2022 and has ~~tried, wherever~~a 0.98% interest rate and is subject to the terms and conditions applicable to loans administered by the SBA under the CARES Act. The balance outstanding as of the issuance of these condensed consolidated financial statements was $5,702,725.

Forgiveness of the note is only available for principal that is used for the limited purposes that qualify for forgiveness under SBA requirements, and that to obtain forgiveness, the Company must request it and must provide documentation in accordance with the SBA requirements, and certify that the amounts the Company is requesting to be forgiven qualify under those requirements. The Company also understands that it shall remain responsible under the note for any amounts not forgiven, and that interest payable under the note will not be forgiven but that the SBA may pay the Loan interest on forgiven amounts. The requirements for forgiveness include, among other requirements, provide for eligible expenditures, necessary records/documentation, or possible reductions of the forgiven amount due to ~~identify forward-looking statements by terminology~~changes in number of employees or compensation and the Company is responsible to review the SBA’s program materials.

The Company determined that it is contingently liable for certain for the Registration Rights Damages and Public Information Failure Damages (collectively the Liquidating Damages) covering the 12% Convertible Debentures, Series I Preferred Stock, and Series J Preferred Stock, therefore, a contingent obligation of $4,178,778 (including interest computed at 1% per month based on the balance outstanding of these Liquidating Damages) exist as of the issuance of these condensed consolidated financial statements.

As a result of these factors the Company has experienced a decline in revenues and earnings since early March 2020. While the Company has implemented cost reduction measures in an effort to offset such volume declines, the duration of these declines remains uncertain. If the volume declines do not stabilize over the next few months, the Company’s 2020 financial results and operations may be adversely impacted. The extent of the impact on the Company’s operational and financial performance will depend on the Company’s willingness and ability to take further cost reduction measures as ~~“may,” “will,” “could,” “should,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates”~~well as future developments, including the duration and ~~other comparable terminology.~~spread of the outbreak, related group gathering and sports event advisories and restrictions, and the extent and effectiveness of containment actions taken, all of which are highly uncertain and cannot be predicted at the time of issuance of these condensed consolidated financial statements.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, was enacted March 27, 2020. Among the business provisions, the CARES Act provided for various payroll tax incentives, changes to net operating loss carryback and carryforward rules, business interest expense limitation increases, and bonus depreciation on qualified improvement property. The Company ~~cautions investors that any forward-looking statements presented in this report, or that~~is evaluating the ~~Company may make orally or in writing from time to time, are based~~impact of the CARES Act on the beliefs of, assumptions made by, and information currently available to, the Company. Such statements are based on assumptions, and the actual outcome will be affected by known and unknown risks, trends, uncertainties and factors that are beyond the Company’s control or ability to predict. Although the Company believes that its assumptions are reasonable, they are not guarantees of future performance, and some will inevitably prove to be incorrect. As a result, the Company’s actual future results can be expected to differ from its 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. Certain risks are discussed in this Report and also from time to time in the Company’s other filings with the Securities and Exchange Commission (the “SEC”).financial statements.

This report and all subsequent written and oral forward-looking statements attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. The Company does not undertake any obligation to release publicly any revisions to its forward-looking statements to reflect events or circumstances after the date of this Report.

~~Item~~ITEM 2. ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the Company’s financial statements, including the notes thereto, appearing elsewhere in this report. This discussion may contain certain forward-looking statements based on current expectations that involve risks and uncertainties. Actual results and timing of certain events may differ significantly from those projected in such forward-looking statements due to a number of factors, including those set forth elsewhere in this Report.

Overview

The Company ~~was incorporated~~operates one of the largest digital, monetization and distribution platforms that is shared by a coalition of independent, professionally managed online media publishers (“Mavens”). Each Maven joins the coalition by invitation-only and is drawn from professional journalists, subject matter experts, group evangelists and social leaders. Mavens publish content and oversee an online community for their respective channels, leveraging a proprietary, socially-driven, mobile-enabled, video-focused technology platform to engage niche audiences within a single network. Generally, Mavens are independently owned strategic partners who receive a share of revenue from the interaction with their content. When they join, Mavens benefit from the state-of-the-art technology of our platform, allowing them to dramatically upgrade performance. At the same time, advertising revenue is dramatically improved due to the scale the Company has achieved by combining all Mavens onto a single platform and the large and experienced sales organization. They also benefit from our membership marketing and management systems to further enhance their revenue. Additionally, the lead brand within each vertical creates a halo benefit for all Mavens in the vertical while each of them adds to the breadth and quality of content. While they benefit from these critical performance improvements they also save substantially in costs of technology, infrastructure, advertising sales and member marketing and management.

The Company’s growth strategy is to continue to expand the coalition by adding new Mavens in key verticals that management believes will expand the scale of unique users interacting on the Company’s technology platform. In each vertical, the Company seeks to build around a leading brand, surround it with subcategory Maven specialists and further enhance coverage with individual expert contributors. The primary means of expansion is adding Mavens as independent strategic partners. However, in some circumstances the Company will acquire crucial content providers as the cornerstone of an important vertical.

The Company’s common stock is traded on the Over-the-Counter Market under the ~~name~~symbol “MVEN”.

Recent Developments

10% OID Convertible Debentures

On October 18, 2018, the Company entered into a securities purchase agreement with two accredited investors, B. Riley and an affiliated entity of ~~Integrated Surgical Systems,~~B. Riley, pursuant to which the Company issued to the investors 10% original issue discount senior secured convertible debentures (the “10% OID Convertible Debentures”) in the aggregate principal amount of $3,500,000, which, after taking into account the 5% original issue discount, and legal fees and expenses of the investors, resulted in the Company receiving net proceeds of $3,285,000. The Company issued warrants to the investors to purchase up to 875,000 shares of the Company’s common stock in connection with this securities purchase agreement. The debentures were due and payable on October 31, 2019. Interest accrued on the debentures at the rate of 10% per annum, payable on the earlier of conversion, redemption or October 31, 2019.

The debentures were convertible into shares of the Company’s common stock at the option of the investor at any time prior to October 31, 2019, at a conversion price of $1.00 per share, subject to adjustment for stock splits, stock dividends and similar transactions, and were subject to certain redemption rights by the Company. On December 12, 2018, there was a roll-over of the 10% OID Convertible Debentures into the 12% Convertible Debentures (as further described below).

12% Convertible Debentures

On December 12, 2018, the Company entered into a securities purchase agreement with three accredited investors, pursuant to which the Company issued to the investors 12% senior secured subordinated convertible debentures (the “12% Convertible Debentures”) in the aggregate principal amount of $13,091,528, which includes (i) the roll-over of an aggregate of $3,551,528 in principal and interest of the 10% OID Convertible Debentures issued to two of the investors on October 18, 2018, and (ii) a placement fee, payable in cash, of $540,000 to the Company’s placement agent, B. Riley FBR, in the offering. After taking into account legal fees and expenses of the investors, the Company received net proceeds of $8,950,000. The 12% Convertible Debentures are due and payable on December 31, 2020. Interest accrues at the rate of 12% per annum, payable on the earlier of conversion or December 31, 2020. The Company’s obligations under the 12% Convertible Debentures are secured by a security agreement, dated as of October 18, 2018, by and among the Company and each investor thereto.

Subject to the Company receiving shareholder approval to increase its authorized shares of common stock, principal and interest accrued on the 12% Convertible Debentures are convertible into shares of common stock, at the option of the investor at any time prior to December 31, 2020, at a conversion price of $0.33 per share, subject to adjustment for stock splits, stock dividends and similar transactions, and beneficial ownership blocker provisions. If the Company does not perform certain of its obligations in a timely manner, it must pay Liquidated Damages to the investors (see Note 17).

On March 18, 2019, the Company entered into a securities purchase agreement with two accredited investors, including John Fichthorn, the Company’s Chairman of the Board, pursuant to which the Company issued 12% Convertible Debentures in the aggregate principal amount of $1,696,000, which includes a placement fee of $96,000 paid to B. Riley FBR in the form of a 12% Convertible Debenture, for acting as the Company’s placement agent in the offering. After taking into account legal fees and expenses of $10,000 which were paid in cash, the Company received net proceeds of $1,590,000.

On March 27, 2019, the Company entered into a securities purchase agreement with an accredited investor pursuant to which the Company issued 12% Convertible Debentures in the aggregate principal amount of $318,000, which includes a placement fee of $18,000 paid to B. Riley FBR in the form of a 12% Debenture for acting as the Company’s placement agent in the offering. After taking into account legal fees and expenses, the Company received net proceeds of $300,000.

On April 8, 2019, the Company entered into a securities purchase agreement with an accredited investor, Todd D. Sims, a member of the Company’s Board, pursuant to which the Company issued a 12% Convertible Debenture in the aggregate principal amount of $100,000. In connection with this placement, B. Riley FBR waived its placement fee of $6,000 for acting as the Company’s placement agent in the offering. After taking into account legal fees and expenses, the Company received net proceeds of $100,000.

The 12% Convertible Debentures issued on March 18, 2019, March 27, 2019 and April 8, 2019 are convertible into shares of the Company’s common stock at the option of the investor at any time prior to December 31, 2020, at a conversion price of $0.40 per share, subject to adjustment for stock splits, stock dividends and similar transactions, and beneficial ownership blocker provisions. All other terms of the 12% Convertible Debentures issued on March 18, 2019, March 27, 2019 and April 8, 2019 are identical to the 12% Convertible Debentures issued on December 12, 2018.

Pursuant to the registration rights agreements entered into in connection with the securities purchase agreements on March 18, 2019, March 27, 2019 and April 8, 2019, the Company agreed to register the shares issuable upon conversion of the 12% Convertible Debentures for resale by the investors. The Company committed to file the registration statement the later of (i) the 30th calendar day following the date the Company files its Annual Report on Form 10-K for the fiscal year ended December 31, 2018 with the SEC, but in no event later than May 15, 2019, and (ii) the 30th calendar day after all the Series H Preferred Stock have been registered pursuant to a registration statement under a certain registration rights agreement, dated as of August 9, 2018. The registration rights agreements provide for Registration Rights Damages (as further described in Note 10) upon the occurrence of certain events up to a maximum amount of 6% of the aggregate amount invested (refer to “Liquidating Damages” below for further details).

Acquisition of Say Media, Inc.

On October 12, 2018, the Company, Say Media, a Delaware corporation, SM Acquisition Co., Inc., a Delaware corporation (“SMAC”), which is a wholly-owned subsidiary of the Company incorporated in Delaware on September 6, 2018 to facilitate the merger, and Matt Sanchez, solely in ~~1990. It~~his capacity as a representative of the Say Media security holders, entered into the Merger Agreements, pursuant to which SMAC will merge with and into Say Media, with Say Media continuing as the surviving corporation in the merger as a wholly-owned subsidiary of the Company.

On December 12, 2018, the Company consummated the merger with Say Media, pursuant to the terms of the Merger Agreements.

In connection with the consummation of the merger, total cash consideration of $9,537,397 was ~~founded~~paid (net of cash acquired of $534,637), including the following: (1) $6,703,653 to ~~design, manufacture, sell~~a creditor of Say Media; (2) $250,000 transaction bonus to a designated employee of Say Media; (3) $2,078,498 advanced prior to September 30, 2018 for certain execution payments in connection with the acquisition; and (4) $505,246 for legal fees ($450,000 was advanced for acquisition related legal fees of Say Media paid on August 27, 2018 and additional cash consideration of $55,246 was paid at the Closing for acquisition related legal fees incurred). Furthermore, under the terms of the Merger Agreements, the Company agreed to issue 5,500,000 shares of its common stock to the former holders of Say Media’s Preferred Stock. The Company also issued a total of 2,000,000 restricted stock awards (see below “Restricted Stock Awards”), subsequent to the acquisition, to acquire common stock of the Company to key personnel for continuing services with Say Media, subject to vesting, and repurchase rights under certain circumstances. The shares issued are for post combination services.

2016 Equity Incentive Plan

2019 Equity Incentive Plan

On April 4, 2019, the Board of the Company adopted the 2019 Equity Incentive Plan (the “2019 Plan”). The purpose of the 2019 Plan is to seek, to better secure, and to retain the services of a select group of persons, to provide incentives for those persons to exert maximum efforts for the success of the Company and its affiliates, and to provide a means by which those persons have an opportunity to benefit from increases in the value of the Company’s common stock through the granting of stock awards.

From April 10, 2019 through March 26, 2020, the Company granted stock options, of which 79,494,813 are outstanding as of the issuance of these condensed consolidated financial statements, to acquire shares of the Company’s common stock to officers, directors, employees and consultants. The Company’s shareholders approved the 2019 Pan and the maximum number of shares authorized of 85,000,000 under the plan on April 3, 2020. The Company does not currently have sufficient authorized but unissued common shares to allow for the exercise of the stock options granted under this plan; accordingly, any stock option grants under this plan are considered as unfunded and cannot be exercised until sufficient common shares have been authorized.

Restricted Stock Awards

Equity Grants Outside Option Plans

From December 12, 2018 through March 16, 2019, the Company granted stock options, of which 3,821,333 are outstanding as of the issuance of these condensed consolidated financial statements, to acquire shares of the Company’s common stock to officers, directors and employees outside of the 2016 Plan and the 2019 Plan. The Company does not currently have sufficient authorized but unissued common shares to allow for the exercise of these stock options, these stock option grants are considered as unfunded and cannot be exercised until sufficient common shares have been authorized.

Adoption of Sequencing Policy

Appointment of New Chief Financial Officer

On May 3, 2019, the Company announced the appointment of Douglas Smith as the Company’s Chief Financial Officer.

Mr. Smith was granted options to purchase up to 1,500,000 shares of the Company’s common stock, having an exercise price of $0.57 per share, a term of 10 years, and subject to vesting as described below. These options were granted outside of the 2016 Plan and the 2019 Plan. Of the 1,500,000 options granted: (i) 1,000,000 options will vest over 36 months, with 1/3 vesting after 12 months of continuous service ~~image-directed, computer-controlled robotic software~~ and ~~hardware~~1/36 vesting monthly for each month of continuous service thereafter; and (ii) 500,000 will vest over 36 months, with 1/3 vesting after 12 months of continuous service and 1/36 vesting monthly for each month of continuous service thereafter, subject to the Company’s common stock being listed on a national securities exchange.

Acquisition of TheStreet, Inc. and Partnership with Cramer Digital

On June 11, 2019, the Company, TST Acquisition Co., Inc., a Delaware corporation (“TSTAC”), a newly-formed indirect wholly-owned subsidiary of the Company, and TheStreet, Inc., a Delaware corporation (“TheStreet”), entered into an agreement and plan of merger, pursuant to which TSTAC will merge with and into TheStreet, with TheStreet continuing as the surviving corporation in the merger and as a wholly-owned subsidiary of the Company.

The merger agreement provided that all issued and outstanding shares of common stock of TheStreet (other than those shares with respect to which appraisal rights have been properly exercised) will be exchanged for an aggregate of $16,500,000 in cash. Pursuant to the terms of the merger agreement, on June 10, 2019, the Company deposited $16,500,000 into an escrow account pursuant to an escrow agreement, dated June 10, 2019, by and among the Company, TheStreet and Citibank, N.A., as escrow agent.

On August 7, 2019, the Company consummated the merger between TheStreet and TSTAC, pursuant to which TSTAC merged with and into TheStreet, with TheStreet continuing as the surviving corporation in the merger and as an indirect wholly-owned subsidiary of the Company, pursuant to the terms of the merger agreement dated as of June 11, 2019, as amended. In connection with the consummation of the merger, the Company paid a total of $16,500,000 in cash to TheStreet’s stockholders. This transaction was funded through a debt financing arranged by a subsidiary of B. Riley Financial, Inc. (see below “Amended and Restated Note Purchase Agreement”).

On August 8, 2019, in connection with the merger, finance and stock market expert Jim Cramer, who co-founded TheStreet, agreed to enter into a new partnership with TheStreet through Cramer Digital, a new production company featuring the digital rights and content created by Mr. Cramer and his team of financial experts. The partnership will allow Mr. Cramer to continue his subscription and content offerings and will be under his editorial control. The Company expects that TheStreet’s senior management will continue with the Company subsequent to the merger.

Note Purchase Agreement

ABG-SI LLC Licensing Agreement

The initial term of the Licensing Agreement shall commence upon the termination of the Meredith License Agreement (as defined below) and shall continue through December 31, 2029. The Company has the option, subject to certain conditions, to renew the term of the Licensing Agreement for ~~use~~nine consecutive renewal terms of 10 years each (collectively, the “Term”), for a total of 100 years.

The Licensing Agreement provides that the Company shall pay to ABG annual royalties in ~~orthopedic surgical procedures.~~respect of each year of the Term based on gross revenues (“Royalties”) with guaranteed minimum annual amounts. The Company has prepaid ABG $45,000,000 against future Royalties. ABG will pay to the Company a share of revenues relating to certain Sports Illustrated business lines not licensed to the Company, such as commerce. The two companies will be partnering in building the brand worldwide.

Additionally, Ross Levinsohn, the former senior executive from Fox and Yahoo!, had agreed to become the new Chief Executive Officer of the Licensed Business.

Mr. Levinsohn was a director of the Company from November 4, 2016 through October 20, 2017. In conjunction with Mr. Levinsohn’s services as a director of the Company, he received restricted stock awards for 245,434 shares of common stock. Mr. Levinsohn retained his restricted stock awards and they continued to vest subsequent to his resignation from the Board on October 20, 2017. The restricted stock awards will continue to vest through October 16, 2019. In conjunction with the vesting of the restricted stock awards, the Company recognized stock based compensation cost of $16,616 and $71,619 for the three months and nine months ended September 30, 2018, respectively, and $28,634 and $14,317 for the three months and nine months ended September 30, 2017, respectively, which was included in general and administrative expenses in the condensed consolidated statements of operations.

On April 10, 2019, the Company entered into an Advisory Services Agreement with Mr. Levinsohn to provide advisory services with respect to strategic transactions in the media and digital publishing industries, in exchange for which Mr. Levinsohn was granted a stock option to purchase 532,004 shares of common stock, exercisable for a period of 10 years at $0.46 per share (the closing market price on April 10, 2019) subject to vesting (i) based on the achievement by the Company of stock price and liquidity targets and becoming listed on a national securities exchange and (ii) a concurrent 36-month vesting period with a 12-month cliff, and may not be exercised until the Company has increased its authorized shares of common stock to a sufficient number to permit the full exercise of the stock options granted; accordingly, these stock option grants are considered as unfunded and cannot be exercised until sufficient common shares have been authorized.

On June 11, 2019, Mr. Levinsohn was granted stock options, in conjunction with Mr. Levinsohn’s services relating to the Company’s entry into the Licensing Agreement, to acquire 2,000,000 shares of common stock under the Company’s 2019 Plan. These stock options vest monthly over three years, with one-third vesting after 12 months of continuous service from the grant date and a further 1/36 vesting at the end of each month of continuous service thereafter, exercisable for a period of ten years at $0.42 per share (the closing market price on June 11, 2019), and may not be exercised until the Company has increased its authorized shares of common stock to a sufficient number to permit the full exercise of the stock options granted; accordingly, these stock option grants are considered as unfunded and cannot be exercised until sufficient common shares have been authorized.

On September 16, 2019, Mr. Levinsohn was granted a stock options, in conjunction with Mr. Levinsohn’s services relating to the Company’s entry into the Licensing Agreement, to acquire 2,000,000 shares of common stock under the Company’s 2019 Plan. These stock options vest monthly over three years, with one-third vesting after 12 months of continuous service from the grant date and the remaining two-thirds over next 24 months subject to meeting certain revenue targets, exercisable for a period of ten years, $0.78 per share (the closing market price on September 16, 2019), and may not be exercised until the Company has increased its authorized shares of common stock to a sufficient number to permit the full exercise of the stock options granted; accordingly, these stock option grants are considered as unfunded and cannot be exercised until sufficient common shares have been authorized.

Mr. Levinsohn has also entered into an agreement with the Company to purchase $500,000 of the Company’s newly-designated Series I Convertible Preferred Stock.

Amended and Restated Note Purchase Agreement

On June 14, 2019, the Company entered into an amended and restated note purchase agreement with one accredited investor, BRF Finance Co., LLC, an affiliated entity of B. Riley, which amended and restated the 12% senior secured note dated June 10, 2019, by and among the Company and the investor. Pursuant to this amendment, the Company issued an amended and restated 12% senior secured note, due June 14, 2022, in the aggregate principal amount of $68,000,000, which amends, restates and supersedes that $20,000,000 12% senior secured note issued by the Company on June 10, 2019 to the investor. The Company received additional gross proceeds of $48,000,000, which after taking into account B. Riley’s placement fee of $2,400,000 and legal fees and expenses of the investor, the Company received net proceeds of $45,550,000, of which $45,000,000 was paid to ABG-SI LLC against future royalties in connection with the Company’s previously announced Licensing Agreement, dated June 14, 2019, with ABG-SI LLC, and the balance of $550,000 will be used by the Company for working capital and general corporate purposes.

Warrant Exercise

On September 10, 2019, a total of 1,078,661 warrants were exercised on a cashless basis, for a total of 539,331 shares of common stock.

Series I Convertible Preferred Stock

On June 27, 2019, 25,800 authorized shares of the Company’s preferred stock were designated as “Series I Convertible Preferred Stock” (the “Series I Preferred Stock”). On June 28, ~~2007, Integrated completed~~2019, the ~~sale~~Company closed on a securities purchase agreement with certain accredited investors, pursuant to which the Company issued an aggregate of ~~substantially all~~23,100 shares of ~~its operating assets. After completion~~Series I Preferred Stock at a stated value of $1,000, initially convertible into 46,200,000 shares of the ~~sale, Integrated no longer engaged~~Company’s common stock at a conversion rate equal to the stated value divided by the conversion price of $0.50 per share, for aggregate gross proceeds of $23,100,000.

In consideration for its services as placement agent, the Company paid B. Riley FBR a cash fee of $1,386,000 plus $52,500 in ~~any business activities~~reimbursement of legal fees and ~~then sought to locate a suitable acquisition target to complete a business combination. From June 2007 until the closing~~other transaction costs. The Company used approximately $21.7 million of the ~~Recapitalization~~net proceeds from the financing to partially repay the amended and restated 12% senior secured note dated June 14, 2019, and to pay deferred fees of approximately $3,400,000 related to that borrowing facility.

Pursuant to the registration rights agreements entered into in connection with the securities purchase agreements on ~~November 4, 2016, Integrated was a non-active “shell company” as defined by regulations~~June 28, 2019, the Company agreed to register the shares issuable upon conversion of the ~~SEC. As~~Series I Preferred Stock for resale by the investors. The Company committed to file the registration statement no later than the 30th calendar day following the date the Company files (i) its annual report on Form 10-K for the fiscal year ended December 31, 2018, (ii) all its required quarterly reports on Form 10-Q since the quarter ended September 30, 2018 through September 30, 2019, and (iii) current Form 8-K in connection with the acquisitions of TheStreet and its license with ABG-SI LLC, with the SEC, but in no event later than December 1, 2019. The Company committed to cause the registration statement to become effective by no later than 90 days after December 1, 2019, subject to certain conditions. The registration rights agreements provide for Registration Rights Damages (as further described in Note 10) upon the occurrence of certain events up to a ~~result~~maximum amount of 6% of the ~~Recapitalization, on~~aggregate amount invested (refer to “Liquidating Damages” below for further details).

The securities purchase agreements also included a ~~going forward basis,~~provision that requires the Company to maintain its periodic filings with the SEC in order to satisfy the public information requirements under Rule 144(c) of the Securities Act. If the Company fails for any reason to satisfy the current public information requirement, then the Company will ~~continue~~be obligated to pay Public Information Failure Damages (as further described in Note 10) to each holder, consisting of a cash payment equal to 1% of the amount invested as partial liquidated damages, up to a maximum of six months, subject to interest at the rate of 1% per month until paid in full (refer to “Liquidating Damages” below for further details).

Series J Convertible Preferred Stock

Pursuant to the registration rights agreements entered into in connection with the securities purchase agreements on October 7, 2019, the Company agreed to register the shares issuable upon conversion of the Series J Preferred Stock for resale by the investors. The Company committed to file the registration statement no later than the 30th calendar day following the date the Company files (i) its ~~public~~annual report on Form 10-K for the fiscal year ended December 31, 2018, (ii) all its required quarterly reports on Form 10-Q since the quarter ended September 30, 2018 through September 30, 2019, and (iii) current Form 8-K in connection with the acquisitions of TheStreet, Say Media, HubPages, and its license with ABG-SI LLC, with the SEC, ~~on an operating company basis. On December 2, 2016,~~but in no event later than March 31, 2020. The Company committed to cause the ~~corporate name was changed from “Integrated Surgical Systems, Inc.”~~registration statement to ~~“TheMaven, Inc.”~~become effective by no later than 90 days after March 31, 2020, subject to certain conditions. The registration rights agreements provide for Registration Rights Damages (as further described in Note 10) upon the occurrence of certain events up to a maximum amount of 6% of the aggregate amount invested (refer to “Liquidating Damages” below for further details).

~~TheMaven Network, Inc. was incorporated~~The securities purchase agreements also included a provision that requires the Company to maintain its periodic filings with the SEC in ~~Nevada~~order to satisfy the public information requirements under Rule 144(c) of the Securities Act. If the Company fails for any reason to satisfy the current public information requirement, then the Company will be obligated to pay Public Information Failure Damages (as further described in Note 10) to each holder, consisting of a cash payment equal to 1% of the amount invested as partial liquidated damages, up to a maximum of six months, subject to interest at the rate of 1% per month until paid in full (refer to “Liquidating Damages” below for further details).

Appointment of Chief Operating Officer

Appointment of Chief Revenue Officer

On December 9, 2019, Company announced the appointment of Mr. Avi Zimak as the Company’s Chief Revenue Officer and Head of Global Strategic Partnerships. Mr. Zimak, will be employed on ~~July 22, 2016,~~a full time basis, at an annual salary of $450,000. Mr. Zimak will be paid a signing bonus of $250,000, subject to recapture in certain circumstances if Mr. Zimak’s employment ends before the second anniversary of the date of his employment agreement. Mr. Zimak will be eligible for an annual bonus of up to $450,000, based on the achievement in each calendar year of defined annual revenue targets, calculated on a quarterly basis, and paid quarterly subject to an annual reconciliation. Mr. Zimak will be granted a ten-year stock option to purchase up to an aggregate of 2,250,000 shares of common stock under the ~~name “Amplify Media,~~2019 Plan. The stock options will vest as to 1,125,000 shares, in three equal installments, based on performance targets tied to the achievement of established annual revenue targets for fiscal years 2020 to and including 2022. The remaining 1,250,000 stock options will vest as follows: (i) 1/3 will vest after 12 months from the date of the employment agreement; and (ii) then 1/36th will vest at the end of each month thereafter, concluding 36 months from the effect date of the employment agreement. Currently these options are unfunded, and the Company has agreed to timely increase the availability of shares of common stock to permit the exercise of the options upon vesting. At the commencement of the employment, Mr. Zimak will also be awarded restricted stock units for 250,000 shares of common stock, vesting one year after the date of the employment agreement, with the shares to be delivered on the fifth anniversary of the date of the employment agreement. The term of the employment agreement is for an initial period of two years, and it is automatically renewed for one additional year periods thereafter if not previously terminated. The employment agreement has early termination provisions for cause, permanent incapacity, and death. Mr. Zimak has the right to terminate for good reason in certain circumstances. In the event of certain of the early termination events, the Company will be obligated to pay salary compensation, bonus amounts and various of the restricted stock units will continue to vest. In the event of termination, the vested stock options and further vesting will be governed by the terms of the stock option grant and the plan under which they are granted. During the employment period and for one year thereafter, Mr. Zimak will be subject to the Company’s typical non-solicitation and competition provisions for all executive employees.

Merger of Subsidiaries

On December 19, 2019, the Company’s wholly owned subsidiaries Maven Coalition, Inc.~~” On July 27, 2016,~~, a Nevada corporation, and HubPages, Inc, a Delaware corporation, were merged into the ~~corporate name was amended to “Amplify Media Network, Inc.” and on October 14, 2016, the corporate name was changed to “TheMaven Network, Inc.” TheMaven Network, Inc. is a 100%~~Company’s wholly owned subsidiary Say Media, Inc, a Delaware corporation. On January 6, 2020 Say Media, Inc. amended its certificate of ~~the TheMaven, Inc. On March 5, 2018, the corporate~~incorporation to change its name ~~was changed~~ to Maven Coalition, Inc.

~~Going Concern~~Operating Lease

On January 14, 2020, the Company entered into a lease agreement for offices at 225 Liberty Street, 27^th Floor, New York, New York, with an effective date in February 1, 2020. Under the terms of the agreement, the Company has a rent abatement for the initial nine months of the lease term, with rent payments commencing during November 1, 2020 and the lease expiring in November 30, 2032. The Company has a maximum tenant allowance of $408,680 for certain costs. Monthly rental payments are as follows: 1) initial sixty-month term $252,019; 2) second sixty-month term $269,048; and 3) remainder twenty-five month term $286,076; for total minimum lease payments of $38,415,920. In addition to the fixed rent the Company will also pay a portion of the operating costs associated with the space and is entitled to.

The Company is currently evaluating the impact that the adoption of ASC Topic 842,Leases, will have at January 1, 2019 upon recognition of the right-of-use assets and corresponding lease liability, initially measured at the present value of the lease payments, on its balance sheet for this lease commitment, as well as the disclosure of key information about this lease arrangement, including the overall presentation on its condensed consolidated financial statements.

FastPay Credit Facility

On February 27, 2020 the Company entered into a Financing and Security Agreement with FPP Finance LLC (“FastPay”) pursuant to which FastPay extended a $15,000,000 line of credit for working capital purposes secured by a first lien on all of the Company’s cash and accounts receivable and a second lien on all other assets. Borrowings under the facility bear interest at the LIBOR Rate plus 8.50% and have a final maturity of February 6, 2022. The balance outstanding as of the issuance of these condensed consolidated financial statements was $4,924,531.

Asset Acquisition of Petametrics Inc.

On March 9, 2020, the Company entered into an asset purchase agreement with Petametrics Inc., dba LiftIgniter, a Delaware corporation where it purchased substantially all the assets, including the intellectual property and excluding certain accounts receivable, and assumed certain liabilities. The purchase price consisted of: 1) cash payment of $184,086 on February 19, 2020, in connection with the repayment of all outstanding indebtedness, 2) at closing a cash payment of $131,202, 3) collections of certain accounts receivable, 4) on the first anniversary date of the closing issuance of restricted stock units for an aggregate of up to 312,500 shares of the Company’s common stock, and 5) on the second anniversary date of the closing issuance of restricted stock units for an aggregate of up to 312,500 shares of the Company’s common stock.

Delayed Draw Term Loan

Payroll Protection Program Loan

On April 6, 2020, the Company entered into a note agreement with JPMorgan Chase Bank, N.A. under the recently enacted Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) administered by the U.S. Small Business Administration (“SBA”). The Company received total proceeds of approximately $5.7 million under the note. In accordance with the requirements of the CARES Act, the Company will use proceeds from the note agreement primarily for payroll costs. The note is scheduled to mature on April 6, 2022 and has a 0.98% interest rate and is subject to the terms and conditions applicable to loans administered by the SBA under the CARES Act. The balance outstanding as of the issuance of these condensed consolidated financial statements was $5,702,725.

Forgiveness of the note is only available for principal that is used for the limited purposes that qualify for forgiveness under SBA requirements, and that to obtain forgiveness, the Company must request it and must provide documentation in accordance with the SBA requirements, and certify that the amounts the Company is requesting to be forgiven qualify under those requirements. The Company also understands that it shall remain responsible under the note for any amounts not forgiven, and that interest payable under the note will not be forgiven but that the SBA may pay the Loan interest on forgiven amounts. The requirements for forgiveness include, among other requirements, provide for eligible expenditures, necessary records/documentation, or possible reductions of the forgiven amount due to changes in number of employees or compensation and the Company is responsible to review the SBA’s program materials.

Liquidating Damages

Coronavirus (COVID-19)

As a result of these factors the Company has experienced a decline in revenues and earnings since early March 2020. While the Company has implemented cost reduction measures in an effort to offset such volume declines, the duration of these declines remains uncertain. If the volume declines do not stabilize over the next few months, the Company’s 2020 financial results and operations may be adversely impacted. The extent of the impact on the Company’s operational and financial performance will depend on the Company’s willingness and ability to take further cost reduction measures as well as future developments, including the duration and spread of the outbreak, related group gathering and sports event advisories and restrictions, and the extent and effectiveness of containment actions taken, all of which are highly uncertain and cannot be predicted at the time of issuance of these condensed consolidated financial statements.

Going Concern

The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Recent Accounting Pronouncements

See Note 2 to the accompanying condensed consolidated financial statements for the Recent Accounting Pronouncements.

Risks and Uncertainties

The Company ~~believes that it currently does~~has a limited operating history and has not ~~have sufficient funds~~generated significant revenues to ~~support its~~date. The Company’s business and operations ~~or implement its~~are sensitive to general business ~~plan for one year~~and economic conditions in the U.S. and worldwide. These conditions include short-term and long-term interest rates, inflation, fluctuations in debt and equity capital markets and the general condition of the U.S. and world economy. A host of factors beyond the ~~date~~Company’s control could cause fluctuations in these conditions. Adverse developments in these general business and economic conditions could have a material adverse effect on the Company’s financial condition and the results of ~~these financial statements.~~ its operations.

In ~~order to continue business operations past that point, the Company currently anticipates that it will need to raise additional debt and/or equity capital. There can be no assurances that~~addition, the Company will compete with many companies that currently have extensive and well-funded projects, marketing and sales operations as well as extensive human capital. The Company may be ~~able~~unable to ~~secure any such additional financing on acceptable terms~~compete successfully against these companies. The Company’s industry is characterized by rapid changes in technology and ~~conditions, or at all. If cash resources become insufficient to satisfy~~market demands. As a result, the Company’s ~~ongoing cash requirements,~~products, services, and/or expertise may become obsolete and/or unmarketable. The Company’s future success will depend on its ability to adapt to technological advances, anticipate customer and market demands, and enhance its current technology under development.

Concentrations

B. Riley FBR, Inc. (“B. Riley FBR”) is a registered broker-dealer owned by B. Riley Financial, Inc., a diversified publicly-traded financial services company (“B. Riley”), which acted as placement agent for the Series H Preferred Stock financing. In consideration for its services as placement agent, the Company ~~will be required~~paid B. Riley FBR a cash fee of $575,000 (including a previously paid retainer of $75,000) and issued to ~~scale back or discontinue portions~~B. Riley FBR 669 shares of Series H Preferred Stock. In addition, entities affiliated with B. Riley FBR purchased 5,592 shares of Series H Preferred Stock in the financing. John A. Fichthorn joined the Board of Directors of the Company in September 2018 and was elected as Chairman of the Board of Directors and Chairman of the Finance Committee in November 2018. Mr. Fichthorn currently serves as Head of Alternative Investments for B. Riley Capital Management, LLC, which is an SEC-registered investment adviser and a wholly-owned subsidiary of B. Riley. Todd D. Sims also joined the Board of Directors of the Company in September 2018 and is also a member of the Board of Directors of B. Riley. Mr. Fichthorn and Mr. Sims serve on the Board of Directors of the Company as designees of B. Riley. Since August 2018, B. Riley FBR has been instrumental in raising debt and equity capital for the Company to supports it acquisitions of HubPages, Inc. and Say Media, Inc., and for refinancing and working capital purposes.

Significant Customers – Concentration of credit risk with respect to accounts receivable is limited to customers to whom the Company makes significant sales. While a reserve for the potential write-off of accounts receivable is maintained, the Company has not written off any significant accounts to date. To control credit risk, the Company performs regular credit evaluations of its ~~operations~~customers’ financial condition. Refer to Note 2.

Critical Accounting Policies and ~~adjusts its overall business plans, or obtain funds, if available (although there~~Estimates

The preparation of the Company’s consolidated financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the notes to the consolidated financial statements. Some of those judgments can be ~~no certainty),~~subjective and complex, and therefore, actual results could differ materially from those estimates under different assumptions or ~~to discontinue its operations entirely.~~

~~Revenue~~conditions.

~~During~~Significant estimates include those related to assumptions used in accruals for potential liabilities, capitalization of platform development costs, valuation of equity instruments, including the ~~third quarter~~calculation of volatility, valuation of derivatives, and the realization of deferred tax assets, as described in Note 4 to the condensed consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and in Note 2 to the ~~Company adopted ASC 606, “Revenue from Contracts with Customers” as~~consolidated unaudited financial statements included elsewhere in this Quarterly Report on Form 10-Q/A for the ~~accounting standard for revenue recognition. Since~~quarterly period ended June 30, 2018.

Results of Operations

At September 30, 2018, the Company had generated revenues of $1,460,958, did not ~~previously generated~~have any positive cash flows from operations, and was dependent on its ability to raise equity capital to fund its operating requirements.

The Company expects to experience typical media company ad and sponsorship sales seasonality, which is strong in the fourth quarter and slower in the first quarter.

The Company’s condensed consolidated statements of operations as discussed herein are presented below.

Three Months Ended
September 30,

Nine Months Ended
September 30,

2018 2017 2018 2017
Revenue $ 1,157,917 $ 6,064 $ 1,460,958 $ 6,064
Cost of revenue 1,784,073 449,567 3,922,594 641,606
Gross loss (626,156 ) (443,503 ) (2,461,636 ) (635,542 )
Operating expenses:
Research and development 411,268 30,776 598,645 104,095
General and administrative 2,573,142 1,300,767 7,998,609 3,639,204
Total operating expenses 2,984,410 1,331,543 8,597,254 3,743,299
Loss from operations (3,610,566 ) (1,775,046 ) (11,058,890 ) (4,378,841 )
Other (expense) income:
Change in valuation of embedded derivative liabilities 134,987 (3,311 ) 263,531 6,939
Interest expense (1,428,463 ) - (1,552,006 ) -
Interest income 2,199 61 16,583 411
True-up termination fee - - (1,344,648 ) -
Settlement of promissory notes receivable (1,166,556 ) - (1,166,556 ) -
Liquidated damages (2,652,798 ) - (2,667,798 ) -
Total other (expense) income (5,110,631 ) (3,250 ) (6,450,894 ) 7,350
Loss before income taxes (8,721,197 ) (1,778,296 ) (17,509,784 ) (4,371,491 )
Benefit for income taxes 91,633 - 91,633 -
Net loss (8,629,564 ) (1,778,296 ) (17,418,151 ) (4,371,491 )
Deemed dividend on Series H convertible preferred stock (18,045,496 ) - (18,045,496 ) -
Net loss attributable to common shareholders $ (26,675,060 ) $ (1,778,296 ) $ (35,463,647 ) $ (4,371,491 )
Basic and diluted net loss per common share $ (0.96 ) $ (0.11 ) $ (1.40 ) $ (0.33 )
Weighted average number of common shares outstanding – basic and diluted 27,835,555 16,367,424 25,382,551 13,091,231
Three Months Ended September 30, 2018 and 2017
Revenue. For the three months ended September 30, 2018 revenue ~~from customers~~was $1,157,917. The operation of online media channels did not begin until May 2017. Accordingly, the Company did not ~~have to transition its accounting method from ASC 605, “Revenue Recognition”.~~
Revenues are recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company generates all of its revenue from contracts with customers. The following is a description of the principal activities from which the Company generates revenue:

~~Advertising~~
The Company enters into contracts with advertising networks to serve display or video advertisements on the digital media pages associated with our various channels. In accordance with ASC 606 the Company recognizes revenue from advertisements at the point in time when each ad is viewed as reported by our advertising network partners. The quantity of advertisements, the impression bid prices and revenue are reported on a real-time basis.
~~Membership~~
The Company enters into contracts with Internet users that subscribe to premium content on the digital media channels. These contracts provide Internet users with a subscription to access the premium content for a given period of time, which is generally one year. In accordance with ASC 606 the Company recognizes revenue from each membership subscription over time based on a daily calculation of revenue during the reporting period. Subscribers make payment for a subscription by credit card and the amount of the subscription collected in cash is initially recorded as deferred revenue on the balance sheet. As the Company provides access to the premium content over the subscription term the Company recognizes revenue and proportionately reduces the deferred revenue balance. The Company owes our independent publisher channel partners a revenue share of the membership revenue earned and this is initially deferred as deferred contract costs. The Company recognizes deferred contract costs over the subscription term in the same pattern that the associated membership revenue is recognized.
~~Cost of Revenue~~
Our cost of revenue represents the cost of providing our digital media network channels and advertising and membership services. The cost of revenue that we have incurred in the periods presented primarily include:
· ~~channel partner guarantees and revenue share payments;~~
· ~~amortization of website development costs;~~
· ~~hosting and bandwidth and software license fees;~~
· ~~stock-based compensation related to channel partner warrants;~~
· ~~programmatic advertising platform costs;~~
· ~~payroll and related expenses of related personnel;~~
· ~~fees paid for data analytics and to other outside service providers;~~
· ~~depreciation of our websites, network equipment and software;~~
· ~~maintaining our websites;~~
· ~~credit card processing fees; and~~
· ~~stock-based compensation of related personnel.~~
~~Research and Development~~
~~Research and development costs consist primarily of expenses incurred in the research and development, creation and enhancement of our products and services.~~
~~Our research and development expenses include:~~
· ~~payroll and related expenses for personnel;~~
· ~~costs incurred in developing features and functionality of the services we offer; and~~
· ~~stock-based compensation of related personnel.~~
28
~~Website Development Costs~~
For the periods presented, substantially all of our technology expenses are website development costs that were capitalized as intangible costs. Technology costs are expensed as incurred or capitalized into property and equipment in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 350,~~Intangibles – Goodwill and Other~~. This statement requires that costs incurred in the preliminary project and post-implementation stages of an internal use software project be expensed as incurred and that certain costs incurred in the application development stage of a project be capitalized.
~~Website development costs capitalized during the application development stage of a project include:~~
· ~~payroll and related expenses for personnel;~~
· ~~costs of computer hardware and software;~~
· ~~costs incurred in developing features and functionality; and~~
· ~~stock-based compensation of related personnel.~~
~~General and Administrative~~
~~General and administrative expenses consist primarily of:~~
· ~~payroll and related expenses for executive, sales and administrative personnel;~~
· ~~professional services, including accounting, legal and insurance;~~
· ~~facilities costs;~~
· ~~other general corporate expenses; and~~
· ~~stock-based compensation of related personnel.~~
~~Stock-Based Compensation~~
We measure stock-based compensation cost at the grant date based on the fair value of the award and recognize it as expense over the vesting or service period, as applicable, of the stock award using the straight-line method. In 2016, the Company adopted Accounting Standards Update No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09). This ASU impacts several aspects of accounting for share-based payment transactions, including certain income tax consequences, forfeitures, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Upon adoption, the Company elected to account for forfeitures as they occur.
~~Provision for Income Taxes~~
We utilize the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax law is recognized in results of operations in the period that includes the enactment date.

~~Results of Operations~~
~~The table below shows the Company’s revenues and cost of~~generate any significant revenue for the three months ~~and six months ended:~~ended September 30, 2017.

~~Three Months ended:~~
June 30, 2018 June 30, 2017
Revenue $ 216,356 $ -
Cost of revenue 1,084,322 192,039
Gross loss $ (867,966 ) $ (192,039 )
~~Six Months ended:~~
June 30, 2018 June 30, 2017
Revenue $ 303,041 $ -
Cost of revenue 2,120,030 192,039
Gross loss $ (1,816,989 ) $ (192,039 )
~~We did not begin operating our online media channels until May~~Cost of Revenue. For the three months ended September 30, 2018 and 2017, because we were still developing the technology platform and recruiting the initial independent publishers to join our coalition. As such we did not earn revenue in the first and second quarters of 2017 and did not incur costs of revenue attributable to operating our online media channels until May 2017. Our cost of revenue ~~represents the~~was $1,784,073 and $449,567, respectively, and consists primarily of fixed monthly ~~cost~~costs of providing ~~our~~the Company’s digital media network channels and advertising and membership services, such as channel partner guarantee payments, amortization of website development costs, channel partner warrant expense, hosting and ~~exceeded revenue by $867,966 in the second quarter of 2018~~bandwidth, and ~~$1,816,989 in the six months ended June 30, 2018.~~programmatic adverting and other costs. Cost of revenue may exceed revenue until the Company grows the number of online media channels and attracts an audience of unique users of sufficient size that the incremental revenues exceed the fixed monthly operating costs. ~~Cost of revenue for~~During the three months ~~and six months~~ ended ~~June~~September 30, ~~2018 consisted of:~~
Three and Six Months ended June 2018 Three
Months Six
Months

Channel partner guarantee payments $ 400,000 $ 803,000
Amortization of website development costs 433,000 783,000
Channel partner warrant expense - 137,000
Hosting and bandwidth 79,000 140,000
Programmatic advertising costs 28,000 52,000
All other costs 144,000 205,000
$ 1,084,000 $ 2,120,000
Operating expenses increased by $1,333,067 in the quarter ended June 30, 2018 to $2,729,691 compared with $1,396,624 in the period ended June 30,2017. For the six months ended June 30, 2018 operating expenses increased by $2,951,091 to $5.352,597 from $2,401,506 in the six months ended June 30, 2017, as explained below. The primary reason for the increase in operating expenses is that during the first quarter of 2018, the Company recorded ~~a charge of $998,000 for~~ stock-based compensation ~~due~~negative true-up adjustment of $1,630 related to the ~~remeasurement of the fair value of restricted stock awards due to a modification in March 2018. The Company also expanded operations rapidly during 2017.~~channel partner warrants.

~~Three Months~~Research and Development. For the three months ended ~~June~~September 30, 2018
June 30, 2018 June 30, 2017
Research and development $ 96,973 $ 9,297
General and administrative 2,632,718 1,387,327
Total operating expenses $ 2,729,691 $ 1,396,624

~~Six Months ended June 2018~~ and 2017, research and development costs were $411,268 and $30,776, respectively.

June 30, 2018 June 30, 2017
Research and development $ 187,377 $ 73,319
General and administrative 5,165,220 2,328,187
Total operating expenses $ 5,352,597 $ 2,401,506
General and Administrative. For the three months ended September 30, 2018 and 2017, general and administrative ~~expenses~~costs were $2,573,142 and $1,300,767, respectively and consists of payroll and benefits, stock-based compensation, professional fees, conferences, public relations, and other costs.
63

General and administrative ~~expenses totaled approximately $2,633,000 and $5,165,000 in~~costs increased by $1,272,375 or 97.8% for the three months ~~and six months~~ ended ~~June~~September 30, ~~2018. General and administrative expenses totaled approximately $1,387,000 and $2,328,000 in the three months and six months ended June 30,~~2018 as compared to 2017, ~~respectively. The primary~~primarily as a result of an increase in ~~operating expenses was due~~payroll and benefits of $327,509, stock-based compensation of $651,953, professional fees of $29,460, and public relations of $207,607 relating to ~~increased general and administrative expenses as~~ the ~~Company~~Company’s expanded business operations to recruit more independent publishers to join the network. In addition, the Company increased headcount from 19 to 29, with two additional senior executives, the Co-Executive Chairman to lead advertising and the Chief Financial Officer, five in technology development and three in administration. The increased stock-based compensation and payroll related costs as well as additional travel, professional fees, and marketing represented the primary increase in general and administrative expenses.
Three Months ended:
June 30, 2018 June 30, 2017
Payroll and benefits $ 691,000 $ 418,000
Stock-based compensation 457,000 478,000
Professional fees 349,000 86,000
Travel and meals 94,000 111,000
Conferences 594,000 86,000
Public relations 64,000 30,000
Board fees 19,000 19,000
Insurance 37,000 102,000
Contractors 43,000 27,000
Rent 28,000 18,000
Public company compliance 19,000 3,000
All other 238,000 9,000
$ 2,633,000 $ 1,387,000
Six Months ended:
June 30, 2018 June 30, 2017
Payroll and benefits $ 1,282,000 $ 697,000
Stock-based compensation 1,671,000 764,000
Professional fees 739,000 254,000
Travel and meals 186,000 144,000
Conferences 596,000 100,000
Public relations 147,000 51,000
Board fees 36,000 38,000
Insurance 72,000 145,000
Contractors 106,000 45,000
Rent 47,000 33,000
Public company compliance 19,000 7,000
All other 264,000 51,000
$ 5,165,000 $ 2,328,000

~~Research and development expenses~~

~~The Company spent $96,973~~Change in ~~the three months ended June 30, 2018 which was expensed as Research and Development Costs. Research and development costs increased from $9,297 in the three months ended June 30, 2017.~~
~~Website Development Costs~~
The Company’s technology operations were primarily in the application and development phase which were capitalized. Capitalized website development costs in the three and six months ended June 30, 2018 and June 30, 2017 consistedValuation of ~~the following:~~
Three Months ended:
June 30, 2018 June 30, 2017
Payroll and benefits $ 603,000 $ 499,000
Stock-based compensation 238,000 233,000
$ 841,000 $ 732,000
Six Months ended:
June 30, 2018 June 30, 2017
Payroll and benefits $ 1,133,000 $ 914,000
Stock-based compensation 1,146,000 445,000
$ 2,279,000 $ 1,359,000
Embedded Derivative Liabilities. For the three months ended ~~June~~September 30, 2018, ~~and June 30, 2017,~~ the ~~total net loss was $3,461,618 or $0.14 loss per basic and diluted share and $1,588,367 or $0.12 loss per basic and diluted share, respectively.~~
~~For~~decrease in the six months ended June 30, 2018 and June 30, 2017, the total net loss was approximately $7,033,547 or $0.29 loss per basic and diluted share and $2,593,195 or $0.23 loss per basic and diluted share, respectively.
~~Liquidity and Capital Resources~~
~~Working Capital~~
fair value of derivatives resulted in a gain of $134,987. The Company ~~had a deficit~~did not have any significant fair value change in working capital of approximately $5.9 million as of June 30, 2018 compared with positive working capital of $3.4 million as of December 31, 2017. This was a decrease of approximately $9.3 million due to $4.1 million cash used in operations and $7.2 million for investing activities in excess of the receipt of gross proceeds of $1.25 million received during the six months ended June 30, 2018 from the private placement, net of stock issuance costs. The Company also received funding from a series of notes payable, some of which included warrants, which total $5.3 million and are classified as current liabilities as of June 30, 2018.
June 30, December 31,
2018 2017
Current Assets $ 628,778 $ 3,860,967
Current Liabilities, excluding amounts to be paid in stock or warrants $ (6,520,069 ) $ (416,444 )
Working Capital $ (5,891,291 ) $ 3,444,523
~~The following table summarizes the Company’s cash flows~~derivatives during the three months ended ~~June~~September 30, ~~2018 and June 30, 2017:~~2017.

June 30, June 30,
2018 2017
Net Cash Used in Operating Activities $ (4,104,967 ) $ (1,738,072 )
Net Cash Used in Investing Activities (7,157,631 ) (948,800 )
Net Cash Provided by Financing Activities 7,759,536 3,537,052
Increase (Decrease) in Cash and Restricted Cash during the Period $ (3,503,062 ) $ 850,180

Cash and Restricted Cash at Beginning of Period 3,619,249 598,294

Cash and Restricted Cash, End of Period $ 116,187 $ 1,448,474

Interest Expense. For the ~~six~~three months ended ~~June~~September 30, 2018, net cash used in operating activities was $4,104,967 which was due to the net loss of $7,341,892 reduced by non-cash expenses for stock-based compensation of approximately $1,912,000, amortization and depreciation of $795.000, noncash interest expense of ~~$145,000~~$1,428,463, primarily consisting of amortization of accretion of original issue discount and ~~increased working capital changes~~debt discount on notes payable of ~~approximately $366,000.~~$327,615, extinguishment of debt of $972,250, and accrued interest of $65.860. The Company did not have any interest expense for the three months ended September 30, 2017.

~~From January 1,~~Interest Income. For the three months ended September 30, 2018, interest income of $2,199 was derived from deposits held at financial institutions. The Company had interest income of $61 during the three months ended September 30, 2017.
Settlement of Promissory Notes Receivable. On December 12, 2018 pursuant to ~~June 30,~~the merger agreement entered into on October 12, 2018 and amended on October 17, 2018, the Company ~~has continued to incur operating losses and negative cash flow from operating and investing activities. The Company~~settled the promissory notes receivable by effectively forgiving $1,166,556 of the balance due as of September 30, 2018 as reflected during the three months ended September 30, 2018 in ~~2018 has financed its operations through private placements~~the condensed consolidated statements of ~~common stock in January and March 2018 and three separate borrowing transactions in June 2018. The Company also completed a private placement of Series H convertible preferred stock in August 2018.~~ operations.

~~Private Placements of Common Stock~~
Liquidated Damages. On ~~January 4,~~September 28, 2018, the Company ~~sold 1,200,000 shares at $2.50 per share for total gross proceeds of $3 million in a private offering. This investment was wired to~~determined that the Company on December 29, 2017. Because this stock purchase was not executed prior to December 31, 2017, the invested funds are recorded as Restricted Cash and as Investor Demand Payable. In 2018, upon execution of the stock purchase agreement this investment was reclassified to Common Stock and Additional Paid in Capital. As of January 4, 2018, the cash which was recorded as Restricted Cash as of December 31, 2017 was reclassified to Cash and was available for use to fund operations.
~~On March 30, 2018 the Company sold 500,000 shares at $2.50 per share for total gross proceeds of $1,250,000 in a private offering.~~
~~Shareholder Loans~~
During May 2018, the Company borrowed a total of $663,000 from the CEO of the Company in order to continue to fund operations. The loan is evidenced by a promissory note payable upon demand with interest at the minimum applicable federal rate, which is approximately 2.34 percent.
On June 6, 2018, the Company repaid $63,000 of the amount borrowed from the CEO in May and the Company borrowed $121,000 from the CEO on a new promissory note payable upon demand with interest at the minimum applicable rate which is approximately 2.34 percent.
~~8% Convertible Notes Payable~~
On June 6, 2018, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with L2 Capital, LLC (“L2”), pursuant to which L2 purchased from the Company a Promissory Note (the “Note”), issuable in tranches, in the aggregate principal amount of $1,126,112 for an aggregate purchase price of $1,000,000 (the “Consideration”). The initial tranche of $570,556 (which includes $15,000 of L2’s legal expenses), for an aggregate purchase price of $500,000, was issued by the Company to L2 on June 11, 2018 when the proceeds were received by the Company. The second tranche of $555,556, for an aggregate purchase price of $500,000, was issued by the Company to L2 on June 15, 2018 when the proceeds were received by the Company. In addition, on the dates thereof, the Company issued warrants to L2 (the “Warrants”), related to each tranche exercisable for approximately 216,120 and 238,934 shares of the Company’s Common Stock, provided, that at the time of L2’s funding of each additional tranche under the Note, if any, the number of shares issuable under the Warrant shall increase by the quotient of 50% of the face value of the respective tranche and 110% multiplied by the volume weighted average price (“VWAP”) of the Company’s Common Stock on the trading day immediately prior to the funding date of the respective tranche. The Warrant is exercisable for a period of five years at an exercise price equal to 110% of the VWAP of the Company’s Common Stock on the trading day immediately prior to the funding date of the respective tranche, subject to customary anti-dilution adjustments, and may, in the event there is no effective registration statement covering the ~~re-sale of the warrant shares, be exercised on a cashless basis.~~
On September 6, 2018, the Company repaid the 8% Convertible Notes Payable to L2 Capital, LLC. The total amount borrowed was $1 million and under the terms of the agreement the Company repaid $1,351,000 to satisfy the debt. A loss on repayment of the debt in the amount of $751,000 was recorded.
~~10% Convertible Notes Payable~~
On June 15, 2018, four investors invested a total of $4,775,000 in a convertible debt offering (“Debentures”). Included in the total was an investment of $1 million by the Company’s CEO and $25,000 by the Company’s President. Interest is payable on the Debentures at the rate of 10% per annum, payable in cash semi-annually on December 31 and June 30, and on maturity, beginning on December 31, 2018, and the Debentures are due and payable on June 30, 2019 (the “Maturity Date”). On the Maturity Date, and on any conversion prior to the Maturity Date, each Investor will be entitled to receive additional interest payment to provide the Investor with a 20% annual Internal Rate of Return.
~~The Debentures are convertible into shares of the Company’s~~ common stock, at the option of the Investor at any time prior to the Maturity Date, at a conversion price of $1.2912 per share or the Company must pay liquidated damages as defined in the Debenture. The Company also has the option to redeem some or all of the outstanding principal amount of the Debenture and further provides that if after the Company undertakes a subsequent financing (or financings) for gross proceeds of at least $20 million (a “Qualified Offering”), the Company has the option, to cause the Investors to convert, plus make a cash payment to the Investors in an aggregate amount to provide the Investor with a 20% annual Internal Rate of Return through the date of payment, in addition to other obligations defined in the Debenture Agreement. The Debentures were converted into shares of Series H Convertible Preferred Stock on August 10, 2018. See also Note 14 Subsequent Events.
There can be no assurance that Maven will be able to obtain the necessary funds on terms acceptable to it or at all. Additional funds for working capital will be required to fund operations and implement its acquisition plans and repay its debt obligations.
We anticipate needing a substantial amount of additional capital to sustain our current operations and implement the current business plan of the Company as now budgeted. We do not believe that the proceeds of the private placement of common stock completed on January 5, 2018 and March 30, 2018, and the financings in the second and third quarters of 2018 will be sufficient to allow us to implement our business plan to the point where our revenues will cover our operating costs and the expansion of our offerings. Without additional funding, we will have to modify our longer-term business plan. The funds that we will need may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. We anticipate thereafter that we will need additional capital as we expand our operations, and do not anticipate that our income will cover our full operating expenses for the foreseeable future.

~~Funding Required for Planned Mergers and Acquisitions~~
The Company’s strategy includes acquiring related online media, publishing and technology businesses by merger or acquisition that management believes will expand the scale of unique users interacting on our technology platform. We believe that with an increased scale in unique users, we will be able to obtain improved advertising terms and grow advertising revenue. In 2018, the Company has announced agreements related to two proposed acquisitions:
~~HubPages, Inc.~~
~~The acquisition of HubPages, Inc. was closed on August 23, 2018. The following is a chronology of the acquisition:~~
On March 13, 2018, the Company and HubPages, Inc. (“HubPages”), together with HP Acquisition Co., Inc. (“HPAC”) that is a wholly-owned subsidiary of the Company, entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which HPAC will merge with and into HubPages, with HubPages continuing as the surviving corporation in the merger and as a wholly-owned subsidiary of the Company (the “Merger”). On June 1, 2018, the parties to the Merger Agreement entered into an amendment (the “Amendment”). Pursuant to the terms of the Amendment, the parties agreed, among other things, that on or before June 15, 2018 the Company shall (i) pay directly to counsel for HubPages the legal fees and expenses incurred by HubPages in connection with the transactions contemplated by the Merger Agreement as of the date of such payment (the “Counsel Payment”); and (ii) deposit into escrow the sum of (x) $5,000,000 minus (y) the amount of the Counsel Payment (the “Revised Termination Fee” and, together with the Counsel Payment, the “Amendment Payments”). On June 15, 2018, the Company made the requisite payments totaling $5 million under the Merger Agreement.
Upon the Company making the Amendment Payments, the Merger Agreement shall be amended, among other things, by (i) delaying the date upon which the Company could be obligated to pay a termination fee to HubPages in the event the Company was unable to close the Merger from June 1, 2018 to August 31, 2018, (ii) increasing the termination fee from $1,000,000 to an amount equal to the Revised Termination Fee, and (iii) removing the $1,500,000 Indemnity Escrow Amount (as that term is defined in the Merger Agreement) from the Merger Agreement, such that these funds will now be paid to HubPages’ stockholders at closing as opposed to being held in escrow.
On June 15, 2018 the Company used the majority of the funding noted above to fund the Company’s $5,000,000 payment obligation under the previously disclosed Amendment to its Merger Agreement with HubPages, Inc. (“HubPages”).
~~On August 23, 2018, the Company paid $5,570,000 to complete the acquisition of HubPages. The total acquisition consideration paid in cash was approximately $10.6 million.~~
~~Say Media Inc.~~
On March 19, 2018, the Company entered into a non-binding letter of intent to acquire Say Media Inc. (“Say Media”), a media and publishing technology company (the “Letter of Intent”). The acquisition will be subject to negotiation and execution of definitive documentation and various conditions precedent. In connection with the Letter of Intent on March 26, 2018 Maven loaned $1 million to Say Media and was issued a secured promissory note in the principal amount of $1 million from Say Media.
On August 4, 2018, the Company and Say Media, Inc., a Delaware corporation (“Say”), entered into an Amended & Restated Asset Purchase Agreement (the “APA”), pursuant to which the Company will acquire substantially all of the assets of Say and assume certain liabilities of Say (the “Acquisition”).

Pursuant to the APA, the Company shall (i) pay to Say $5,887,072 in cash consideration at closing, up to $1,250,000 of which shall be paid by cancelling (x) the $1,000,000 Promissory Note of Say dated March 26, 2018 and (y) the $250,000 Promissory Note of Say dated July 23, 2018, (ii) issue to Say a secured promissory note in principal amount of $7,434,003, due on December 10, 2018 (the “Note”), (iii) issue (A) 1,840,000 restricted shares of Common Stock of the Company to Say and (B) 160,000 restricted shares of Common Stock of the Company, plus that number of convertible securities equal to $350,000 divided by the lowest price per share paid in the Company’s then most recent equity financing, to Say What, LLC, in partial satisfaction of certain senior promissory notes issued by Say to Say What, (iv) pay Say’s legal fees and expenses in connection with the transaction, up to $250,000, (v) on or before October 15, 2018, deliver a Letter of Credit to Say as partial security for the Company’s obligations under the Note, (vi) reimburse Say for its legal, accounting and other costs incurred in connection with the winding down and dissolution of Say, in an aggregate amount not to exceed $300,000, and (vii) issue to certain employees and consultants of Say who will continue to be service providers of the Company, a further 2,000,000 restricted shares of Common Stock of the Company.
The APA contains typical representations and warranties by Say about its business, operations and financial condition. Consummation of the Acquisition is subject to certain customary closing conditions. The Company will have to obtain financing for the Letter of Credit in October 2018 and for the repayment of the Note in December 2018, and there can be no assurance that the Company will be able to obtain the necessary funds on terms acceptable to it or at all.
Furthermore, effective as of August 3, 2018, the Company adjusted the exercise price of the Common Stock Purchase Warrant to purchase up to 1.5 million shares of the Company’s Common Stock, issued to the Strome Mezzanine Fund LP on June 15, 2018, from $1.19 per share to $0.50 per share.

~~Funding Required for Acquisition of Say Media, Inc.~~
The Maven is negotiating the acquisition of Say Media, and it anticipates that the final terms of the acquisition will require financing to pay a portion of the consideration at the closing and thereafter. The current estimate of funding to complete the transaction, as previously disclosed, is approximately $10 million, however as all the terms are in discussion the actual amount of funding and timing has yet to be determined. There can be no assurance that Maven will be able to obtain the necessary funds on terms acceptable to it or at all. Accordingly, there is no assurance that the proposed acquisition will be completed as contemplated.
~~Series H Convertible Preferred Stock~~
On August 10, 2018 (the “Closing Date”), the Company, closed on a securities purchase agreement (the “Securities Purchase Agreement”) with certain accredited investors (the “Investors”), pursuant to which the Company sold an aggregate of 18,730 shares of the Company’s Series H Convertible Preferred Stock, par value $0.01 per share (the “Series H Preferred Stock”), at a stated value of $1,000 (the “Stated Value”), initially convertible into 56,757,575 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), at a conversion rate equal to the Stated Value divided by the conversion price of $0.33 (the “Conversion Price”), for aggregate gross proceeds of $13 million. Of the shares of Series H Preferred Stock issued, 5,730 were issued upon conversion of an aggregate $4,775,000 of 10% Convertible Debentures (the “Debentures”) issued by the Company on June 15, 2018 to certain accredited investors, including 1,200 shares of Series H Preferred Stock issued to James Heckman, the Company’s Chief Executive Officer, and 30 shares of Series H Preferred Stock issued Josh Jacobs, the Company’s President.
~~The number of~~ shares issuable upon conversion of the Series H Preferred Stock ~~is adjustable in~~would not be declared effective within the ~~event of stock splits, stock dividends, combinations of shares and similar transactions. In addition, if at any~~requisite time ~~prior~~frame, therefore, the Company accrued liquidating damages under the registration rights agreement. The Company determined that pursuant to the ~~nine month anniversary of the Closing Date, the Company sells or grants any option or right to~~securities purchase or issues any shares of Common Stock, or securities convertible into shares of Common Stock, with net proceeds in excess of $1 million in the aggregate, entitling any person to acquire shares of Common Stock at an effective price per share that is lower than the then Conversion Price (such lower price, the “Base Conversion Price”), then the Conversion Price shall be reduced to equal the Base Conversion Price. All of the shares of Series H Preferred Stock shall convert automatically into shares of Common Stock on the fifth anniversary of the Closing Date at the then Conversion Price.
B. Riley FBR, Inc. (“B. Riley”) acted as placement agent for the financing. In consideration for its services as placement, the Company paid B. Riley a fee of $575,000 (including a previously paid retainer of $75,000) and issued to B. Riley 669 shares of Series H Preferred Stock. In addition, entities affiliated with B. Riley purchased 5,592 shares of Series H Preferred Stock in the financing.

In connection with the financing, B. Riley and a majority-in-interest of the Investors have each been granted the right to designate one director to the Company’s Board of Directors, (each a “Designee”). Further, so long as at least 20% of the shares of Series H Preferred Stock issued in the financing are outstanding, the Company shall recommend to its stockholders that it elect each Designee to serve as a director on the Company’s Board of Directors.
The Company used some of the net proceeds to complete the acquisition of HubPages and intends to use a further portion of the net proceeds from the financing to consummate its previously announced acquisition of Say Media, Inc. and for working capital and general corporate purposes.
~~Additionally, pursuant to a Registration Rights Agreement (“Registration Rights Agreement”)~~agreement entered into in connection with the ~~Securities Purchase Agreement,~~Series H Preferred Stock, the Company ~~agreed~~would not be able to ~~register~~maintain its periodic filings in the requisite time frame with the SEC in order to satisfy the public information requirements, therefore, the Company accrued liquidating damages for the public information requirements. For the three months ended September 30, 2018 the total liquidating damages charged to operations of $2,652,798 was from the registration rights agreement and public information requirements. The Company did not have any liquidating damages charged to operations for the three months ended September 30, 2017.
Deemed Dividend on Series H Convertible Preferred Stock. For the three months ended September 30, 2018, in connection with the 19,399.25 Series H Preferred Stock issuance, the Company recorded a beneficial conversion feature in the amount of $18,045,496 for the underlying common shares since the nondetachable conversion feature was in-the-money (the Conversion Price of $0.33 was lower than the Company’s common stock trading price of $0.86) at the issuance date. The beneficial conversion feature was recognized as a deemed dividend.
Net Loss. For the three months ended September 30, 2018, the Company incurred a net loss of $8,629,564, as compared to a net loss of $1,778,296 for the three months ended September 30, 2017.
Nine Months Ended September 30, 2018 and 2017
Revenue. For the nine months ended September 30, 2018 revenue was $1,460,958. The operation of on-line media channels did not begin until May 2017. Accordingly, the Company did not generate any significant revenue for the three months ended September 30, 2017.
64
Cost of Revenue. For the nine months ended September 30, 2018 and 2017, cost of revenue was $3,922,594 and $641,606, respectively, and consists primarily of fixed monthly costs of providing the Company’s digital media network channels and advertising and membership services, such as channel partner guarantee payments, amortization of website development costs, channel partner warrant expense, hosting and bandwidth, and programmatic adverting and other costs. Cost of revenue may exceed revenue until the Company grows the number of online media channels and attracts an audience of unique users of sufficient size that the incremental revenues exceed the fixed monthly operating costs. During the nine months ended September 30, 2018, the Company recorded stock-based compensation of $153,447 related to the channel partner warrants.
Research and Development. For the nine months ended September 30, 2018, and 2017, research and development costs were $598,645 and $104,095, respectively.
General and Administrative. For the nine months ended September 30, 2018 and 2017, general and administrative costs were $7,998,609 and $3,639,204, respectively and consists of payroll and benefits, stock-based compensation, professional fees, conferences, public relations, and other costs.
General and administrative costs increased by $4,359,405 or 119.8% for the nine months ended September 30, 2018 as compared to 2017, primarily as a result of an increase in payroll and benefits of $915,772, stock-based compensation of $1,922,877, professional fees of $598,405, conferences of $513,188, and public relations of $328,975 relating to the Company’s expanded business operations to recruit more independent publishers to join the network.
Change in Valuation of Embedded Derivative Liabilities. For the nine months ended September 30, 2018, the decrease in the fair value of derivatives resulted in a gain of $263,531. The Company did not have any significant fair value change in derivatives during the nine months ended September 30, 2017.
Interest Expense. For the nine months ended September 30, 2018, interest expense of $1,552,006, primarily consisting of amortization of accretion of original issue discount and debt discount on notes payable of $423,894, extinguishment of debt of $972,250, and accrued interest of $90,906. The Company did not have any interest expense for the nine months ended September 30, 2017.
Interest Income. For the nine months ended September 30, 2018, interest income of $16,583 was derived from derived from deposits held at financial institutions and Say Media promissory notes receivable. The Company had interest income of $411 during the nine months ended September 30, 2017.
True-Up Termination Fee. On June 15, 2018, the Company entered into a securities purchase agreement with four investors to sell $4,775,000 principal amount of 10% Senior Convertible Debentures. Strome Mezzanine Fund LP (“Strome”) purchased $3,000,000 of such amount and two senior executives of the Company and another investment fund purchased the remaining $1,775,000 of such amount. On June 15, 2018, the Company also modified two previous securities purchase agreements dated January 4, 2018 and March 30, 2018 with Strome to eliminate a true-up provision entered into on March 30, 2018 under which the Company was committed to issue up to 1,700,000 shares of common stock in certain circumstances. As consideration for such modification, the Company issued a warrant to Strome to purchase 1,500,000 shares of common stock, exercisable at an initial price of $1.19 per share for a period of 5 years. The estimated fair value of this warrant on the June 15, 2018 issuance date of $1,344,648, calculated pursuant to the Black-Scholes option-pricing model, was charged to operations as true-up termination fee during the nine months ended September 30, 2018.
Settlement of Promissory Notes Receivable. On December 12, 2018 pursuant to the merger agreement entered into on October 12, 2018 and amended on October 17, 2018, the Company settled the promissory notes receivable by effectively forgiving $1,166,556 of the balance due as of September 30, 2018 as reflected during the three months ended September 30, 2018 in the condensed consolidated statements of operations.
65
Liquidated Damages. On September 28, 2018, the Company determined that the registration statement covering the common shares issuable upon conversion of the Series H Preferred Stock ~~for resale by~~would not be declared effective within the ~~Investors.~~requisite time frame, therefore, the Company accrued liquidating damages under the registration rights agreement. The Company has committed to file the registration statement by no later than 75 days after the Closing Date and to cause the registration statement to become effective by no later than 120 days after the Closing Date (or, in the event of a full review by the staff of the Securities and Exchange Commission, 150 days following the Closing Date). The Registration Rights Agreement provides for liquidated damages upon the occurrence of certain events up to a maximum amount of 6% of the aggregate amount invested by such Investordetermined that pursuant to the ~~Purchase Agreement.~~
~~Current Cash Balance and Additional Funding Required~~
~~As of September 22, 2018,~~securities purchase agreement entered into in connection with the Series H Preferred Stock, the Company ~~has cash of $2,185,000.~~
We have no contracts or arrangements for any additional funding at this time. There can be no assurance that we will be able to raise any funding or will be able to meet our accrued obligations. If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we willwould not be able to ~~meet our other obligations~~maintain its periodic filings in the requisite time frame with the SEC in order to satisfy the public information requirements, therefore, the Company accrued liquidating damages for the public information requirements For the nine months ended September 30, 2018 the total liquidating damages charged to operations of $2,667,798 was primarily from the registration rights agreement and public information requirements. The Company did not have any liquidating damages charged to operations for the three months ended September 30, 2017.
Deemed Dividend on Series H Convertible Preferred Stock. For the nine months ended September 30, 2018, in connection with the 19,399.25 Series H Preferred Stock issuance, the Company recorded a beneficial conversion feature in the amount of $18,045,496 for the underlying common shares since the nondetachable conversion feature was in-the-money (the Conversion Price of $0.33 was lower than the Company’s common stock trading price of $0.86) at the issuance date. The beneficial conversion feature was recognized as ~~they become due. In such event, we will be forced~~a deemed dividend.
Net Loss. For the nine months ended September 30, 2018, the Company incurred a net loss of $17,418,151, as compared to ~~scale down or perhaps even cease our operations. These estimates may change significantly depending~~a net loss of $4,371,491 for the nine months ended September 30, 2017.
Liquidity and Capital Resources – September 30, 2018
The Company’s condensed consolidated financial statements have been presented on the ~~nature~~basis that the Company is a going concern, which contemplates the realization of ~~our business activities~~assets and ~~our ability~~satisfaction of liabilities in the normal course of business. The Company has had modest revenues to ~~raise~~date, and has experienced recurring net losses from operations and negative operating cash flows. The Company has financed its working capital ~~from our shareholders or other sources.~~requirements since inception through the issuance of its debt and equity securities.

~~There are no assurances that we will be able~~In December 2019, a novel strain of coronavirus (“COVID-19”) was reported in Wuhan, China. On March 11, 2020 the World Health Organization has declared COVID-19 to ~~obtain further funds required for our continued operations. We will pursue various financing alternatives~~constitute a “Public Health Emergency of International Concern.” Many national governments and sports authorities around the world have made the decision to ~~meet our immediate~~postpone/cancel high attendance sports events in an effort to reduce the spread of the COVID-19 virus. In addition, many governments and ~~long-term financial requirements. There can be no assurance that additional financing will be available to us when needed~~ businesses have limited non-essential work activity, furloughed and/or ~~if available, that it can be obtained~~terminated many employees and closed some operations and/or locations, all of which has had a negative impact on ~~commercially reasonable terms. If we are not able to obtain~~ the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations.
~~Contractual Obligations~~economic environment.

As a ~~“smaller reporting company”, we~~result of these factors the Company has experienced a decline in revenues and earnings since early March 2020. While the Company has implemented cost reduction measures in an effort to offset such volume declines, the duration of these declines remains uncertain. If the volume declines do not stabilize over the next few months, the Company’s 2020 financial results and operations may be adversely impacted. The extent of the impact on the Company’s operational and financial performance will depend on the Company’s willingness and ability to take further cost reduction measures as well as future developments, including the duration and spread of the outbreak, related group gathering and sports event advisories and restrictions, and the extent and effectiveness of containment actions taken, all of which are ~~not required to provide tabular disclosure~~highly uncertain and cannot be predicted at the time of ~~contractual obligations.~~issuance of these condensed consolidated financial statements.

~~Off-Balance Sheet Arrangements~~At September 30, 2018, the Company had a working capital deficiency of $2,890,964, as compared to working capital of $3,444,523 at December 31, 2017, an decrease in working capital of $6,335,487 for the nine months ended September 30, 2018. The decrease in working capital during the nine months ended September 30, 2018 was the result of short-term debt incurred during the period being utilized towards the acquisition funding of a company (see “Recent Developments” above”) aggregating $9,032,596, acquisitions of property and equipment and platform development costs of $1,689,590, debt service, and ongoing research and development and operating activities.

~~The Company does not have any off-balance sheet arrangements, including any outstanding derivative~~As a result of the above factors, management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the accompanying condensed consolidated financial ~~instruments, off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. We do not engage~~statements are being issued. In addition, the Company’s previous independent registered public accounting firm, in ~~trading activities involving non-exchange traded contracts.~~
~~Seasonality~~
~~Once we are actively providing services to our customer base, we expect to experience typical media company ad and sponsorship sales seasonality, which is strong in~~their report on the ~~fourth quarter and slower in the first quarter.~~
~~Effects of Inflation~~
~~To date inflation has not had a material impact on our business or operating results.~~
~~Critical Accounting Policies and Estimates~~
~~In our Annual Report on Form 10-K~~Company’s consolidated financial statements for the year ended December 31, 2017, ~~we disclosed our critical accounting policies~~had also expressed substantial doubt about the Company’s ability to continue as a going concern.
66
The ability of the Company to continue as a going concern is impacted by the uncertainty surrounding COVID-19 and could therefore be dependent upon the Company’s ability to raise additional funds to ultimately achieve sustainable operating revenues and profitability. From October 2018 through April 2020, the Company has raised aggregate net proceeds of approximately $139 million through various debt and preferred stock private placements (see Note 18). The Company believes that based on its current assessment of the impact of COVID-19 it has sufficient resources to fully fund its business operations through April 30, 2021. However, due to the uncertainty regarding the duration of the impact of COVID-19 and its effect on the Company’s financial performance the Company estimates ~~upon~~that it may require additional capital in capital markets today, which ~~our~~are less liquid given the lack of clarity surrounding COVID-19.
The accompanying condensed consolidated financial statements ~~are derived. There have been no changes~~do not include any adjustments that might be necessary if the Company is unable to ~~these policies since~~continue as a going concern.
Operating Activities. For the nine months ended September 30, 2018, operating activities utilized cash of $6,288,695, as compared to utilizing cash of $2,654,964 for the nine months ended September 30, 2017, to fund the Company’s ongoing research and development and operating activities.
Investing Activities. For the nine months ended September 30, 2018, investing activities consisted of payments for the acquisition of a business totaling $9,032,596, and $1,689,590 for the acquisition of property and equipment and platform development. For the nine months ended September 30, 2017, the Company investing activities consisted of $1,513,813 for the acquisition of property and equipment and platform development.
Financing Activities. For the nine months ended September 30, 2018, financing activities consisted of net proceeds from the issuance of Series H convertible preferred stock of $12,474,704, the receipt of $1,000,000 and $4,775,000 of proceeds from the sale of 8% convertible promissory notes payable and 10% convertible debentures, respectively. The Company also received $1,250,000 from the private placement of common stock, and $1,009,446 officer notes. During the nine months ended September 30, 2018, the Company repaid $1,351,334 for the 8% convertible promissory notes and $49,911 in officer loans. For the nine months ended September 30, 2017, financing activities consisted of the receipt of $3,519,544 from the private placement of common stock.
Summary of Principal Cash Operating Obligations and Commitments
The following table sets forth the Company’s principal cash operating obligations and commitments for the next five fiscal years as of September 30, 2018 aggregating $1,805,481. Amounts included in the 2018 column represent amounts due at September 30, 2018 for the remainder of the 2018 fiscal year ending December 31, ~~2017. Readers are encouraged to review these disclosures in conjunction with the review of this report.~~2018.

Payments Due by Year
Total 2018 2019 2020 2021 2022

Operating leases $ 804,024 $ 58,580 $ 253,282 $ 265,345 $ 226,817 $ -
Employment contracts 435,417 137,500 297,917 - - -
Consulting agreements 566,040 93,540 465,300 7,200 - -
Total $ 1,805,481 $ 289,620 $ 1,016,499 $ 272,545 $ 226,817 $ -
~~Recently Adopted Standards~~
See Recent Developments above for cash operating obligations and commitments after the balance sheet date.

~~In May 2017,~~Off-Balance Sheet Arrangements
At September 30, 2018, the ~~FASB issued~~~~ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting.~~ This ASU provides clarity and reduces both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718 to a change in terms or conditions of a share-based payment award. The amendments in this ASU are effective for public entities for fiscal years and interim periods beginning after December 15, 2017, with early adoption permitted. The adoption of ASU 2017-09Company did not have ~~a material effect on the financial statements and related disclosures.~~
~~Recently Issued Accounting Pronouncements~~
~~In June 2018, the FASB issued~~~~ASU 2018-07, Compensation – Stock Compensation (Topic 718), Improvements to Nonemployee Share-based Payments Accounting~~any transactions, obligations or relationships that is intended to simplify the accounting and provide consistency with the accounting for employees. ASU 2018-07 is required for fiscal years beginning after December 15, 2018. Early adoption is permitted. The Company is currently assessing the potential impact of adopting ASU 2018-07 on its financial statements and related disclosures.
~~In February 2016, the FASB issued~~~~ASU 2016-02, Leases (Topic 842),~~ which supersedes all existing guidance on accounting for leases in ASC Topic 840. ASU 2016-02 is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet. ASU 2016-02 will continue to classify leases as either finance or operating, with classification affecting the pattern of expense recognition in the statement of income. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. ASU 2016-02 is required tocould be applied with a modified retrospective approach to each prior reporting period presented with various optional practical expedients. The Company is currently assessing the potential impact of adopting ASU 2016-02 on its financial statements and related disclosures.considered off-balance sheet arrangements.

~~Item~~ITEM 3. ~~Quantitative and Qualitative Disclosures about Market Risk~~QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Not ~~required of smaller reporting companies.~~applicable.
67

~~Item~~ITEM 4. ~~Controls and Procedures~~CONTROLS AND PROCEDURES

~~Evaluation of~~ Disclosure Controls and Procedures

~~Disclosure~~Management, with the participation of the Company’s principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of September 30, 2018. The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports ~~filed~~that it files or ~~submitted~~submits under the ~~Securities and~~ Exchange Act ~~of 1934, as amended (“Exchange Act”)~~ is recorded, processed, summarized and reported within the time ~~period~~periods specified in the ~~SEC’s~~Securities and Exchange Commission rules and ~~forms. Disclosure controls~~forms, and ~~procedures include, without limitation, controls and procedures designed to ensure~~ that such information ~~required to be disclosed in the reports filed under the Exchange Act~~ is accumulated and communicated to management, including the ~~Chief Executive Officer~~Company’s principal executive officer and ~~Chief~~principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, the principal executive officer and principal financial officer concluded that, due to a material weakness in internal control over financial reporting described inPart II, Item 9A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017,the Company’s disclosure controls and procedures were not effective as of September 30, 2018.
Changes in Internal Control over Financial ~~Officer. We carried out an evaluation, under~~Reporting
Other than with respect to the ~~supervision and~~remediation efforts discussed below, there were no changes in internal control over financial reporting that occurred during the fiscal quarter ended September 30, 2018 that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.
Remediation Efforts to Address Material Weaknesses
Management, 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 March 31, 2018 (the “Evaluation Date”). Based upon the evaluation of our disclosure controls and procedures as of the Evaluation Date, the Chief Executive Officer and Chief Financial Officer, intends to remediate the material weaknesses identified as of December 31, 2017. Based on the evaluation of the material weaknesses, management concluded that ~~our disclosure controls and procedures were not effective because of the identification of material weaknesses in our~~ internal ~~control over financial reporting which are identified below:~~
~~Internal~~ controls over financial reporting were ineffective because: (1) the Company lacks a functioning audit committee resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) the Company has inadequate segregation of duties consistent with control objectives; (3) the Company lacks accounting resources to perform review over complex accounting analysis required by the Company, including analysis related to stock-based compensation, capitalized software, identification and treatment of derivative instruments, fair value measurements, and income taxes. The Company also has inadequate accounting resources and processes for timely concluding on complex accounting matters, and (4) the Company has ineffective controls over its period end financial disclosure and reporting processes. ~~The aforementioned material weaknesses were identified by our Chief Executive Officer and Chief Financial Officer in connection with the review of our financial statements as of June 30, 2018.~~

~~Changes in Internal Control over Financial Reporting~~
~~No change in our internal control over financial reporting (as defined in Rules 13a-15(f)~~Management and ~~15d-15(f) under~~ the ~~Exchange Act) occurred during the quarter ended March 31, 2018 that has materially affected or is reasonably likely to materially affect our disclosure controls~~audit committee evaluated these matters and ~~procedures.~~
~~During the first quarter of 2018, we began implementing~~have instituted a remediation plan ~~to remediate~~commenced during the material weaknesses identified above. These actions include: (1) hiring a Corporate Controller with experience working in public companies and (2) hiring a staff accountant with experience working in public companies. These two additions in personnel augment the experiencesecond quarter of our Chief Financial Officer and are expected to provide additional segregation of duties and resources for preparation and review of complex accounting issues, as well as preparation and review of our financial statements and disclosures.2019. The Company ~~also plans to create a separate audit committee~~expects that the remediation of ~~the Board of Directors to enhance oversight in the establishment and monitoring of required internal controls and procedures. The~~these material weaknesses will ~~not~~ be ~~considered remediated until~~fully complete during the fourth quarter of 2019. The Company will develop additional controls ~~have operated~~and procedures for ~~a sufficient period of time and until management has concluded that the controls are operating effectively.~~continued improvement in its control environment as deemed necessary.

39
68

~~Part~~PART II ~~– Other Information~~- OTHER INFORMATION

~~Item~~ITEM 1. ~~Legal Proceedings~~LEGAL PROCEEDINGS

From time to time, the Company may be subject to ~~other~~ claims and litigation arising in the ordinary course of business. The Company is not currently ~~a party~~subject 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 or results of operations.

~~Item~~ITEM 1A. ~~Risk Factors~~RISK FACTORS

~~There have been no material changes in the risk factors~~TheRisk Factors set forth in ~~Part I, Item 1A, “Risk Factors” in our~~the Company’s Annual Report on Form 10-K for the ~~period~~fiscal year ended December 31, ~~2017.~~2017 (the “2017 Form 10-K”) should be read carefully in connection with evaluating the Company’s business and in connection with the forward-looking statements contained in this Quarterly Report on Form 10-Q. Any of the risks described in the 2017 Form 10-K and the factors identified in this Quarterly Report on form 10-Q could materially adversely affect the Company’s business, financial condition or future results and the actual outcome of matters as to which forward-looking statements are made. These are not the only risks that the Company faces. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial also may materially adversely affect the Company’s business, financial condition and/or operating results.

~~Item 2. Unregistered Sales of Equity Securities~~Our business and ~~Use of Proceeds (Update)~~operations have been adversely affected by, and are expected to continue to be adversely affected by, the recent COVID-19 outbreak..

~~None.~~As a result of the recent COVID-19 outbreak or other adverse public health developments, including voluntary and mandatory quarantines, travel restrictions and other restrictions, our operations, and those of our customers, have and are anticipated to continue to experience delays or disruptions and temporary suspensions of operations. In addition, our financial condition and results of operations have been and are likely to continue to be adversely affected by the coronavirus outbreak. The timeline and potential magnitude of the COVID-19 outbreak is currently unknown.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Not applicable.

~~Item~~ITEM 3. ~~Defaults Upon Senior Securities~~DEFAULTS UPON SENIOR SECURITIES

~~None.~~Not applicable.

~~Item~~ITEM 4. ~~Mine Safety Disclosure~~MINE SAFETY DISCLOSURES

Not applicable.

~~Item~~ITEM 5. ~~Other Information~~OTHER INFORMATION

~~None.~~Not applicable.

~~Item~~ITEM 6. ~~Exhibits~~EXHIBITS

A list of exhibits required to be filed as part of this report is set forth in the Index to Exhibits, which is presented elsewhere in this document, and is incorporated herein by reference.
~~Exhibit~~ ~~Description~~
69
31.1* ~~Certification Pursuant to Exchange Act Rule 13a-14(a) of Chief Executive Officer.~~
31.2* ~~Certification Pursuant to Exchange Act Rule 13a-14(a) of Chief Financial Officer~~
32.1* ~~Certification Pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002 of Chief Executive Officer.~~
32.2* ~~Certification Pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002 of Chief Financial Officer~~
101*
101.INS* ~~XBRL Instance Document~~
101.SCH* ~~XBRL Taxonomy Extension Schema Document~~
101.CAL* ~~XBRL Taxonomy Extension Calculation Linkbase Document~~
101.DEF* ~~XBRL Taxonomy Extension Definition Linkbase Document~~
101.LAB* ~~XBRL Taxonomy Extension Label Linkbase Document~~
101.PRE* ~~XBRL Taxonomy Extension Presentation Linkbase Document~~
* ~~To be filed by amendment.~~

SIGNATURES

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

~~theMaven, Inc.~~THEMAVEN, INC.
(Registrant)

Date: May 18, 2020 By: /s/ ~~James~~JAMES C. ~~Heckman, Jr.~~HECKMAN, JR.
James C. Heckman, Jr.
Chief Executive Officer
Date: May 18, 2020 By: /s/ DOUGLAS B. SMITH

~~By:~~ ~~/s/ Martin L. Heimbigner~~
~~Martin L. Heimbigner~~Douglas B. Smith
Chief Financial Officer

70
~~Dated: September 28, 2018~~
INDEX TO EXHIBITS
The following documents are filed as part of this report:
Exhibit
Number
Description of Document
31.1* Officer’s Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1* Officer’s Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS** XBRL Instance Document
101.SCH** XBRL Taxonomy Extension Schema Document
101.CAL** XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB** XBRL Taxonomy Extension Label Linkbase Document
101.PRE** XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF** XBRL Taxonomy Extension Definition Linkbase Document
* Filed herewith.
** In accordance with Regulation S-T, the XBRL related information on Exhibit No. 101 to this Quarterly Report on Form 10-Q shall be deemed “furnished” herewith but not “filed”.

42
71

Large accelerated filer¨ [ ]		Accelerated filer¨ [ ]
Non-accelerated filer [X]
~~Non-accelerated filer~~x	Smaller reporting companyþ [X]

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.01 par value		MVEN		OTC Markets

~~Part I.~~	~~Consolidated Financial Information~~	3 Page Number

~~Item 1.~~PART I - FINANCIAL INFORMATION	~~Financial Statements~~	31

Item 1. Condensed Consolidated Financial Statements	1

Condensed Consolidated Balance Sheets ~~as of June~~– September 30, 2018 ~~(Not Reviewed)~~(Unaudited) and December 31, 2017 ~~(Unaudited)~~	31

Condensed Consolidated Statements of Operations ~~for the three months~~(Unaudited) – Three Months and ~~six months ended June~~Nine Months Ended September 30, 2018 ~~(Not Reviewed)~~ and 2017 ~~(Unaudited)~~	42

Condensed Consolidated Statement of Stockholders’ Equity ~~for the six months ended June~~(Deficiency) (Unaudited) – Nine Months Ended September 30, 2018 ~~(Not Reviewed)~~and 2017	53

Condensed Consolidated Statements of Cash Flows ~~for the six months ended June~~(Unaudited) – Nine Months Ended September 30, 2018 ~~(Not Reviewed)~~ and 2017 ~~(Unaudited)~~	65

Notes to Condensed Consolidated Financial Statements ~~(Unaudited~~(Unaudited) – Three Months and ~~Not reviewed)~~Nine Months Ended September 30, 2018 and 2017	76

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2650

Item 3.	Quantitative and Qualitative ~~Disclosure about~~Disclosures About Market Risk	3967

Item 4.	Controls and Procedures	3968

~~Part II.~~PART II - OTHER INFORMATION	~~Other Information~~	4069

Item 1.	Legal Proceedings	4069

Item 1A.	Risk Factors	4069

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4069

Item 3. Defaults Upon Senior Securities	69

Item 4. Mine Safety Disclosures	69

Item 5. Other Information	69

Item 6. Exhibits	69

SIGNATURES	70

	September 30, 2018			December 31, 2017
	(Unaudited)
Assets
Current assets:
Cash	$	1,862,012		$	619,249
Restricted cash		-			3,000,000
Accounts receivable		1,577,926			53,202
Deferred contract fulfillment costs		19,338			14,147
Prepaid expenses and other current assets		352,572			174,369
Total current assets		3,811,848			3,860,967
Promissory notes receivable		2,528,498			-
Property and equipment, net		64,588			54,670
Platform development, net		4,530,996			2,633,057
Intangible assets, net		6,881,058			20,000
Goodwill		1,857,663			-
Total assets	$	19,674,651		$	6,568,694
Liabilities, mezzanine equity and stockholders’ (deficiency) equity
Current liabilities:
Accounts payable	$	684,158		$	162,308
Accrued expenses		1,028,172			150,136
Liquidating damages payable		2,667,798			-
Contract liability		42,974			31,437
Derivative liabilities		1,313,321			72,563
Officer promissory notes, including accrued interest of $6,853		966,389			-
Total current liabilities		6,702,812			416,444
Investor demand payable		-			3,000,000
Deferred rent		17,245			-
Total liabilities		6,720,057			3,416,444
Commitments and contingencies (Note 17)
Mezzanine equity:
Series G redeemable and convertible preferred stock, $0.01 par value, $1,000 per share liquidation value; aggregate liquidation values $168,496; Series G shares designated: 1,800; Series G shares issued and outstanding: 168.496; common shares issuable upon conversion: 188,791 and 98,698 shares at September 30, 2018 and December 31, 2017, respectively		168,496			168,496
Series H convertible preferred stock, $0.01 par value, $1,000 per share liquidation value; aggregate liquidation value $19,399,250; Series H shares designated: 23,000; Series H shares issued and outstanding: 19,399.25; common shares issuable upon conversion: 58,785,606 shares at September 30, 2018		18,045,496			-
Total mezzanine equity		18,213,992			168,496
Stockholders’ (deficiency) equity:
Common stock, $0.01 par value, authorized 100,000,000 shares; issued and outstanding and issuable: 33,403,091 and 28,516,009 shares at September 30, 2018 and December 31, 2017, respectively		334,030			285,159
Common stock to be issued		600			-
Additional paid-in capital		20,296,194			11,170,666
Accumulated deficit		(25,890,222	)		(8,472,071	)
Total stockholders’ (deficiency) equity		(5,259,398	)		2,983,754
Total liabilities, mezzanine equity and stockholders’ (deficiency) equity	$	19,674,651		$	6,568,694

	June 30, 2018 Not Reviewed			December 31, 2017
Assets

Current assets:
Cash	$	116,187		$	619,249
Restricted cash		-			3,000,000
Accounts receivable		208,140			53,202
Deferred contract fulfillment costs		11,449			14,147
Prepayments and other current assets		293,002			174,369
Total current assets		628,778			3,860,967

Notes receivable		1,000,000			-
Fixed assets, net		4,196,794			2,687,727
Installment payments related to pending business combination		5,000,000			-
Intangible assets		20,000			20,000

Total Assets	$	10,845,572		$	6,568,694

Liabilities and stockholders’ equity

Current liabilities:
Accounts payable	$	515,685		$	162,308
Accrued expenses		916,468			222,699
Deferred rent		4,311			-
Deferred revenue		23,763			31,437
Conversion and warrant liabilities		1,856,394			-
Shareholder notes payable		734,536			-
8% convertible notes payable		316,755			-
10% convertible notes payable		1,843,812			-
Total current liabilities		6,211,724			416,444

Investor demand payable		-			3,000,000
Total liabilities		6,211,724			3,416,444

Commitments and contingencies (Note 13)

Redeemable Series G convertible preferred stock, $0.01 par value, 1,000,000 shares authorized; 168 shares issued and outstanding ($168,496 aggregate liquidation value)		168,496			168,496

Stockholders’ equity:
Common stock, $0.01 par value, 100,000,000 shares authorized; 30,975,206 and 28,516,009 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively		309,751			285,159
Additional paid-in capital		19,661,219			11,170,666
Accumulated deficit		(15,505,618	)		(8,472,071	)
Total stockholders’ equity		4,465,352			2,983,754
Total liabilities and stockholders’ equity	$	10,845,572		$	6,568,694

	1
~~Item 5.~~	~~Other Information~~	40

~~Item 6.~~	~~Exhibits~~	41

~~Signatures~~		42

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Revenue	$	1,157,917		$	6,064		$	1,460,958		$	6,064
Cost of revenue		1,784,073			449,567			3,922,594			641,606
Gross loss		(626,156	)		(443,503	)		(2,461,636	)		(635,542	)
Operating expenses:
Research and development		411,268			30,776			598,645			104,095
General and administrative		2,573,142			1,300,767			7,998,609			3,639,204
Total operating expenses		2,984,410			1,331,543			8,597,254			3,743,299
Loss from operations		(3,610,566	)		(1,775,046	)		(11,058,890	)		(4,378,841	)
Other (expense) income:
Change in valuation of derivative liabilities		134,987			(3,311	)		263,531			6,939
Interest expense		(1,428,463	)		-			(1,552,006	)		-
Interest income		2,199			61			16,583			411
True-up termination fee		-			-			(1,344,648	)		-
Settlement of promissory notes receivable		(1,166,556	)		-			(1,166,556	)		-
Liquidated damages		(2,652,798	)		-			(2,667,798	)		-
Total other (expense) income		(5,110,631	)		(3,250	)		(6,450,894	)		7,350
Loss before income taxes		(8,721,197	)		(1,778,296	)		(17,509,784	)		(4,371,491	)
Benefit for income taxes		91,633			-			91,633			-
Net loss		(8,629,564	)		(1,778,296	)		(17,418,151	)		(4,371,491	)
Deemed dividend on Series H convertible preferred stock		(18,045,496	)		-			(18,045,496	)		-
Net loss attributable to common shareholders	$	(26,675,060	)	$	(1,778,296	)	$	(35,463,647	)	$	(4,371,491	)
Basic and diluted net loss per common share	$	(0.96	)	$	(0.11	)	$	(1.40	)	$	(0.33	)
Weighted average number of common shares outstanding – basic and diluted		27,835,555			16,367,424			25,382,551			13,091,231

	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2018 Not Reviewed			2017			2018 Not Reviewed			2017
Revenue	$	216,356		$	-		$	303,041		$	-
Cost of revenue		1,084,322			192,039			2,120,030			192,039
Gross loss		(867,966	)		(192,039	)		(1,816,989	)		(192,039	)

Operating Expenses:

Research and development		96,973			9,297			187,377			73,319
General and administrative		2,632,718			1,387,327			5,165,220			2,328,187
Total operating expenses		2,729,691			1,396,624			5,352,597			2,401,506

Loss from operations		(3,597,657	)		(1,588,663	)		(7,169,586	)		(2,593,545	)

Other income (expense):		-			-			-			-
Change in derivatives valuation		315,194			-			315,194			-
Interest expense		(179,155	)		-			(179,155	)		-
Interest and dividend income, net		-			296			-			350

Total other income (expense), net		136,039			296			136,039			350

Net loss	$	(3,461,618	)	$	(1,588,367	)	$	(7,033,547	)	$	(2,593,195	)

Basic and diluted net loss per common share	$	(0.14	)	$	(0.12	)	$	(0.29	)	$	(0.23	)

Weighted average number of shares outstanding – basic and diluted		24,456,548			13,293,694			23,994,466			11,425,984

																	Total
	Common Stock						Common Stock to be Issued				Additional Paid-in			Accumulated			Stockholders’ Equity
	Shares			Par Value			Shares		Par Value		Capital			Deficit			(Deficiency)
Balance, January 1, 2018		28,516,009		$	285,159			-	$	-	$	11,170,666		$	(8,472,071	)	$	2,983,754
Reclassification of investor demand payable		1,200,000			12,000			-		-		2,988,000			-			3,000,000
Proceeds from private placement of common stock		500,000			5,000			-		-		863,105			-			868,105
Stock based compensation		-			-			-		-		2,258,870			-			2,258,870
Net loss		-			-			-		-		-			(3,571,929	)		(3,571,929	)
Balance, March 31, 2018		30,216,009			302,159			-		-		17,280,641			(12,044,000	)		5,538,800
Proceeds from private placement of common stock		-			-			-		-		381,895			-			381,895
Costs incurred in connection with private placement of common stock		-			-			60,000		600		(600	)		-			-
Cashless exercise of common stock warrants		736,853			7,369			-		-		(7,369	)		-			-
Cashless exercise of common stock options		106,154			1,061			-		-		(1,061	)		-			-
Stock based compensation		-			-			-		-		1,078,658			-			1,078,658
Net loss		-			-			-		-		-			(5,216,658	)		(5,216,658	)
Balance, June 30, 2018		31,059,016			310,589			60,000		600		18,732,164			(17,260,658	)		1,782,695
Issuance of restricted stock in connection with merger of HubPages		2,399,997			24,000			-		-		(24,000	)		-			-
Issuance of restricted stock to the board of directors		148,813			1,488			-		-		(1,488	)		-			-
Repurchase of restricted stock		(204,735	)		(2,047	)		-		-		2,047			-			-
Beneficial conversion feature on Series H convertible preferred stock		-			-			-		-		18,045,496			-			18,045,496
Deemed dividend on Series H convertible preferred stock		-			-			-		-		(18,045,496	)		-			(18,045,496	)
Stock based compensation		-			-			-		-		1,587,471			-			1,587,471
Net loss		-			-			-		-		-			(8,629,564	)		(8,629,564	)
Balance, September 30, 2018		33,403,091		$	334,030			60,000	$	600	$	20,296,194		$	(25,890,222	)	$	(5,259,398	)

	Common Stock				Additional Paid-in-			Accumulated			Total Stockholders’
	Shares		Amount		Capital			Deficit			Equity
Balance at January 1, 2018		28,516,009	$	285,159	$	11,170,666		$	(8,472,071	)	$	2,983,754
Private placement of common stock, net of costs		1,700,000		17,000		3,851,105			-			3,868,105
Exercise of stock options		22,344		223		(223	)		-			-
Exercise of warrants		736,853		7,369		(7,369	)		-			-
Warrants issued in conjunction with issuance of convertible notes payable		-		-		1,588,250			-			1,588,250
Stock based compensation		-		-		3,058,790			-			3,058,790
Net loss		-		-		-			(7,033,547	)		(7,033,547	)
Balance at June 30, 2018		30,975,206	$	309,751	$	19,661,219		$	(15,505,618	)	$	4,465,352

	Quarter Ended June 30, 2018
	Advertising		Membership		Total
By Product Lines:	$	199,616	$	16,740	$	216,356

		United States				Other				Total
By Geographical Markets:		$	216,356			$	-			$	216,356

	At a Point in Time		Over Time		Total
By Timing of Revenue Recognition:	$	199,616	$	16,740	$	216,356

	Six Months Ended June 30, 2018
	Advertising		Membership		Total
By Product Lines:	$	272,459	$	30,582	$	303,041

~~Office equipment and computers~~	~~3-5 years~~
~~Furniture and fixtures~~	~~5-8 years~~
~~Website development costs~~	~~2-3 years~~

		~~Page~~

	June 30, 2018		December 31, 2017
Cash	$	116,187	$	619,249
Restricted cash		-		3,000,000

Total cash and restricted cash	$	116,187	$	3,619,249

	Three Months Ended September 30, 2018		Nine Months Ended September 30, 2018
Revenue by product line:
Advertising	$	1,142,229	$	1,414,688
Membership subscriptions		15,688		46,270
Total	$	1,157,917	$	1,460,958
Revenue by geographical market:
United States	$	1,157,917	$	1,460,958
Other		-		-
Total	$	1,157,917	$	1,460,958
Revenue by timing of recognition:
At point in time	$	1,142,229	$	1,414,688
Over time		15,688		46,270
Total	$	1,157,917	$	1,460,958

	Three Months Ended September 30, 2018			Nine Months Ended September 30, 2018
Customer 1		-			-
Customer 2		34	%		27	%
Customer 3		13	%		17	%

Office equipment and computers		3 years
Furniture and fixtures		3 – 5 years

	September 30,
	2018		2017
Series G Preferred Stock		188,791		172,374
Series H Preferred Stock		58,785,606		-
Unvested and forfeitable restricted stock awards		5,340,362		8,012,972
Financing Warrants		3,074,018		1,169,607
Channel Partner Warrants		1,099,008		3,424,500
Common stock options		9,693,831		2,069,137
Total		78,181,616		14,848,590

Current assets	$	1,588,096
Accounts receivable and unbilled receivables		1,033,080
Other assets		25,812
Developed technology		6,740,000
Tradename		268,000
Goodwill		1,857,663
Current liabilities		(851,114	)
Deferred tax liability		(91,633	)
Net assets acquired	$	10,569,904

	Revenue		Earnings
Actual from August 23, 2018 to September 30, 2018	$	843,042	$	162,550
Supplemental pro forma from July 1, 2018 to September 30, 2018 (unaudited)		2,250,154		(8,854,343	)
Supplemental pro forma from July 1, 2017 to September 30, 2017 (unaudited)		1,296,903		(1,854,412	)
Supplemental pro forma from January 1, 2018 to September 30, 2018 (unaudited)		6,001,424		(18,003,676	)
Supplemental pro forma from January 1, 2017 to September 30, 2017 (unaudited)		3,095,570		(5,403,026	)

	September 30, 2018		December 31, 2017
Platform development costs	$	6,314,528	$	3,145,308
Less accumulated amortization		(1,783,532)		(512,251)
Net platform development costs	$	4,530,996	$	2,633,057

Platform development at January 1, 2018	$	3,145,308
Costs capitalized during the period:
Payroll-based costs		1,660,331
Stock based compensation costs		1,508,889
Platform development at September 30, 2018	$	6,314,528

	September 30, 2018
	Carrying Amount		Accumulated Amortization			Net Carrying Amount
Developed technology	$	6,740,000	$	(141,323	)	$	6,598,677
Tradename		268,000		(5,619	)		262,381
Website domain name		20,000		-			20,000
Total intangible assets	$	7,028,000	$	(146,942	)	$	6,881,058

September 30,
2019	$	1,401,600
2020		1,401,600
2021		1,401,600
2022		1,401,600
2023		1,254,658
	$	6,861,058

	September 30, 2018
Goodwill at January 1, 2018	$	-
Goodwill acquired in acquisition of HubPages		1,857,663
Goodwill at September 30, 2018	$	1,857,663

	September 30, 2018		December 31, 2017
General accrued expenses	$	175,140	$	150,136
Accrued payroll and related taxes		191,425		-
Accrued publisher expenses		609,525		-
Other accrued expenses		52,082		-
Total accrued expenses	$	1,028,172	$	150,136

	L2 Warrants			Strome Warrants			Total Derivative Liabilities
Carrying amount at January 1, 2018	$	-		$	-		$	-
Issuance of warrants on June 11, 2018		312,749			-			312,749
Issuance of warrants on June 15, 2018		288,149			1,344,648			1,632,797
Change in fair value		(55,026	)		(577,199	)		(632,225	)
Carrying amount at September 30, 2018	$	545,872		$	767,449		$	1,313,321

	8% Promissory Notes			10% Convertible Debentures			Series G Conversion Feature			Total Derivative Liabilities
Carrying amount at January 1, 2018	$	-		$	-		$	72,563		$	72,563
Recognition of conversion feature on June 11, 2018		78,432			-			-			78,432
Recognition of conversion feature on June 15, 2018		81,169			471,002			-			552,171
Derivative liability change upon extinguishment of debt		(29,860	)		(1,042,000	)		-			(1,071,860	)
Change in fair value		(129,741	)		570,998			(72,563	)		368,694
Carrying amount at September 30, 2018	$	-		$	-		$	-		$	-

	Attributable to Debt Instrument			Conversion Feature Additional Paid-in Capital		Conversion Feature and Warrant Liabilities		Proceeds Net of Repayment
Shareholder notes payable ("CEO Loan")	$	797,982		$	-	$	-	$	797,982
Repayment of shareholder notes payable		(63,446	)		-		-		(63,446	)
8% convertible notes payable		273,474			-		726,526		1,000,000
10% convertible notes payable		1,741,687			1,588,250		1,445,063		4,775,000
Total gross proceeds net of repayments	$	2,749,697		$	1,588,250	$	2,171,589	$	6,509,536

						Weighted
	Number of Shares					Average Grant-Date
	Unvested			Vested		Fair Value
Restricted stock awards outstanding at January 1, 2018		6,979,596			5,537,556	$	0.41
Issued		2,548,810			-		1.01
Vested		(3,983,309	)		3,983,309
Forfeited		(204,735	)		-
Restricted stock awards outstanding at September 30, 2018		5,340,362			9,520,865		0.86

						Weighted
						Average
				Weighted		Remaining
	Number			Average		Contractual
	of			Exercise		Life
	Shares			Price		(in Years)

Financing Warrants outstanding at January 1, 2018		1,289,172		$	0.29
Issued		1,986,558			1.24
Exercised		(842,117	)		0.20
Issued as result of the reset provision on August 3, 2018		640,405			0.83
Financing Warrants outstanding at September 30, 2018		3,074,018			1.20		4.5
Financing Warrants exercisable at September 30, 2018		3,074,018			1.20		4.5

		Financing		Financing
		Warrants		Warrants
Exercise		Outstanding		Exercisable
Price		(Shares)		(Shares)
	$0.20		327,490		327,490
	$0.50		2,566,963		2,566,963
	$1.15		119,565		119,565
	$2.50		60,000		60,000
			3,074,018		3,074,018

~~Expected life~~	~~6.0 years~~
Risk-free interest rate			~~2.60~~2.27% to 2.91	%
Expected ~~annual volatility~~		~~113.87~~	%
~~Dividend~~dividend yield		0.00	%