UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~June 30, 2020~~March 31, 2021

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

For the transition period from __________ to __________

Commission file number 1-12471

THEMAVEN, INC.

(Exact name of registrant as specified in its charter)

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

225 Liberty Street, 27^th Floor New York, New York		10281
(Address of principal executive offices)		(Zip Code)

~~(775) 600-2765~~

(212) 321-5002

(Registrant’s telephone number, including area code)

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
N/A		N/A		N/A

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

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

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

Large accelerated filer [ ]		Accelerated filer [ ]
Non-accelerated filer [X]		Smaller reporting company [X]
		Emerging growth company [ ]

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

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

As of ~~May 5,~~August 13, 2021, the Registrant had ~~230,287,723~~263,441,879 shares of common stock outstanding.

	Page Number

PART I - FINANCIAL INFORMATION	41

Item 1. Condensed Consolidated Financial Statements	41

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	2722

Item 3. Quantitative and Qualitative Disclosures About Market Risk	3528

Item 4. Controls and Procedures	3528

PART II - OTHER INFORMATION	3629

Item 1. Legal Proceedings	3629

Item 1A. Risk Factors	3629

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	4629

Item 3. Defaults Upon Senior Securities	4630

Item 4. Mine Safety Disclosures	4630

Item 5. Other Information	4630

Item 6. Exhibits	4631

SIGNATURES	4732

Forward-Looking Statements

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

We caution investors that any forward-looking statements presented in this Quarterly Report, or that we may make orally or in writing from time to time, are based on the beliefs of, assumptions made by, and information currently available to, us. 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 our control or ability to predict. Although we believe that our assumptions are reasonable, they are not guarantees of future performance, and some will inevitably prove to be incorrect. As a result, our actual future results can be expected to differ from our expectations, and those differences may be material. Accordingly, investors should use caution in relying on forward-looking statements, which are based only on known results and trends at the time they are made, to anticipate future results or trends. Other risks are detailed by us in our public filings with the Securities and Exchange Commission (the “SEC”), including in Item 1A., Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. The discussion in this Quarterly Report should be read in conjunction with the condensed consolidated financial statements and notes thereto included in Item 1 of this Quarterly Report and our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

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

This Quarterly Report is being filed for the ~~three and six months~~quarter ended ~~June 30, 2020,~~March 31, 2021, as a late report to comply with the reporting obligations applicable to us under the Exchange Act. Unless specifically required to provide information for the ~~three and six months~~quarter ended ~~June 30, 2020,~~March 31, 2021, by the rules and regulations of the SEC, the discussion of our business reflects our current assets and current operations. Where the information relates to the ~~three and six months~~quarter ended ~~June 30, 2020,~~March 31, 2021, we have made a reasonable effort herein to make that clear. Also, to be clear, the financial information in the condensed consolidated financial statements and footnotes accompanying this Quarterly Report and the other financial information and management’s discussion ~~and analysis~~ about the condensed consolidated financial statements relate to the ~~historical~~ period for the ~~three and six months~~quarter ended ~~June 30, 2020.~~March 31, 2021.

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL INFORMATION

THEMAVEN, INC. AND SUBSIDIARIES

Index to Condensed Consolidated Financial Statements

	PAGE
Condensed Consolidated Balance Sheets ~~as of June 30, 2020~~- March 31, 2021 (Unaudited) and December 31, ~~2019~~2020	52
Condensed Consolidated Statements of Operations ~~for the Quarterly Periods~~(Unaudited) - Three Months Ended ~~June 30,~~March 31, 2021 and 2020 ~~and 2019~~	63
Condensed Consolidated Statements of Stockholders’ Deficiency ~~for the Quarterly Periods~~(Unaudited) - Three Months Ended ~~June 30,~~March 31, 2021 and 2020 ~~and 2019~~	74
Condensed Consolidated Statements of Cash Flows ~~for the Quarterly Periods~~(Unaudited) - Three Months Ended ~~June 30,~~March 31, 2021 and 2020 ~~and 2019~~	95
Notes to Condensed Consolidated Financial Statements (Unaudited)	106

THEMAVEN, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

March 31, 2021
(unaudited)
December 31, 2020
Assets
Current assets:
Cash and cash equivalents $ 4,524,734 $ 9,033,872
Restricted cash 500,809 500,809
Accounts receivable, net 14,089,590 16,497,626
Subscription acquisition costs, current portion 31,171,595 28,146,895
Royalty fees, current portion 15,000,000 15,000,000
Prepayments and other current assets 6,422,576 4,667,263
Total current assets 71,709,304 73,846,465
Property and equipment, net 1,117,403 1,129,438
Operating lease right-of-use assets 18,108,197 18,292,196
Platform development, net 7,463,671 7,355,608
Royalty fees, net of current portion 7,500,000 11,250,000
Subscription acquisition costs, net of current portion 18,682,545 13,358,585
Acquired and other intangible assets, net 66,550,845 71,501,835
Other long-term assets 1,568,502 1,330,812
Goodwill 16,139,377 16,139,377
Total assets $ 208,839,844 $ 214,204,316
Liabilities, mezzanine equity and stockholders’ deficiency
Current liabilities:
Accounts payable $ 10,148,600 $ 8,228,977
Accrued expenses and other 16,735,761 14,718,193
Line of credit 5,426,790 7,178,791
Unearned revenue 65,863,189 61,625,676
Subscription refund liability 4,772,991 4,035,531
Operating lease liabilities 1,022,294 1,059,671
Liquidated damages payable 9,822,725 9,568,091
Warrant derivative liabilities 1,812,931 1,147,895
Total current liabilities 115,605,281 107,562,825
Unearned revenue, net of current portion 28,300,040 23,498,597
Restricted stock liabilities, net of current portion 1,519,156 1,995,810
Operating lease liabilities, net of current portion 19,680,225 19,886,083
Other long-term liabilities 597,678 753,365
Deferred tax liabilities
210,832

210,832

Long-term debt 64,754,198 62,194,272
Total liabilities 230,667,410 216,101,784
Commitments and contingencies (Note 12)
Mezzanine equity:
Series G redeemable and convertible preferred stock, $0.01 par value, $1,000 per share liquidation value and 1,800 shares designated; aggregate liquidation value: $168,496; Series G shares issued and outstanding: 168,496; common shares issuable upon conversion: 188,791 at March 31, 2021 and December 31, 2020 168,496 168,496
Series H convertible preferred stock, $0.01 par value, $1,000 per share liquidation value and 23,000 shares designated; aggregate liquidation value: $19,597,000; Series H shares issued and outstanding: 19,597; common shares issuable upon conversion: 59,384,849 at March 31, 2021 and December 31, 2020 18,247,496 18,247,496
Total mezzanine equity 18,415,992 18,415,992
Stockholders’ deficiency:
Common stock, $0.01 par value, authorized 1,000,000,000 shares; issued and outstanding: 230,326,425 and 229,085,167 shares at March 31, 2021 and December 31, 2020, respectively 2,303,264 2,290,851
Common stock to be issued 10,809 10,809
Additional paid-in capital 145,178,960 139,658,166
Accumulated deficit (187,736,591 ) (162,273,286 )
Total stockholders�� deficiency (40,243,558 ) (20,313,460 )
Total liabilities, mezzanine equity and stockholders’ deficiency $ 208,839,844 $ 214,204,316
See accompanying notes to condensed consolidated financial statements.
2
THEMAVEN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended March 31,
2021 2020
Revenue $ 33,615,481 $ 30,412,853
Cost of revenue (includes amortization of developed technology and platform development for 2021 and 2020 of $2,166,415 and $2,040,129, respectively) 28,208,372 26,738,833
Gross profit 5,407,109 3,674,020
Operating expenses
Selling and marketing 17,528,709 9,359,938
General and administrative 5,638,830 10,410,205
Depreciation and amortization 3,963,234 4,096,680
Total operating expenses 27,130,773 23,866,823
Loss from operations (21,723,664 ) (20,192,803 )
Other (expense) income
Change in valuation of warrant derivative liabilities (665,036 ) 139,219
Change in valuation of embedded derivative liabilities - 1,621,000
Interest expense (2,819,971 ) (3,799,728 )
Interest income - 1,743
Liquidated damages (254,634 ) (546,055 )
Other - -
Total other expense (3,739,641 ) (2,583,821 )
Loss before income taxes (25,463,305 ) (22,776,624 )
Income taxes - -
Net loss $ (25,463,305 ) $ (22,776,624 )
Basic and diluted net loss per common share $ (0.11 ) $ (0.59 )
Weighted average number of common shares outstanding – basic and diluted 230,033,140 38,643,277
See accompanying notes to condensed consolidated financial statements.
3
THEMAVEN, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIENCY
(unaudited)
Three Months Ended March 31, 2021
Common Stock Common Stock to be Issued Additional Total
Shares Par
Value Shares Par
Value
Paid-in
Capital

Accumulated
Deficit
Stockholders’
Deficiency
Balance at January 1, 2021 229,085,167 $ 2,290,851 1,080,930 $ 10,809 $ 139,658,166 $ (162,273,286 ) $ (20,313,460 )
Issuance of restricted stock awards to the board of directors 805,165 8,052 - - (8,052 ) - -
Repurchase restricted stock classified as liabilities (133,068 ) (1,331 ) - - 1,331 - -
Issuance of common stock for restricted stock units in connection with the acquisition of LiftIgniter
256,661

2,567
- -
(2,567
) - -
Issuance of common stock in connection with professional services
312,500

3,125
- -
121,875
-
125,000

Stock-based compensation - - - - 5,408,207 - 5,408,207
Net loss - - - - - (25,463,305 ) (25,463,305 )
Balance at March 31, 2021
230,326,425
$
2,303,264
1,080,930 $ 10,809 $ 145,178,960 $ (187,736,591 ) $ (40,243,558 )
Three Months Ended March 31, 2020
Common Stock Common Stock to be Issued Additional Total
Shares Par Value Shares Par Value
Paid-in
Capital
Accumulated Deficit Stockholders’
Deficiency
Balance at January 1, 2020 37,119,117 $ 371,190 3,938,287 $ 39,383 $ 35,562,766 $ (73,041,323 ) $ (37,067,984 )
Issuance of restricted stock units in connection with the acquisition of LiftIgniter - - - - 500,000 - 500,000
Issuance of restricted stock awards to the board of directors 562,500 5,625 - - (5,625 ) - -
Common stock withheld for taxes (206,881 ) (2,069 ) - - (167,412 ) - (169,481 )
Stock-based compensation - - - - 3,930,172 - 3,930,172
Net loss - - - - - (22,776,624 ) (22,776,624 )
Balance at March 31, 2020 37,474,736 $ 374,746 3,938,287 $ 39,383 $ 39,819,901 $ (95,817,947 ) $ (55,583,917 )
See accompanying notes to condensed consolidated financial statements.
4

~~THEMAVEN, INC. AND SUBSIDIARIES~~

~~CONDENSED CONSOLIDATED BALANCE SHEETS~~THEMAVEN, INC. AND SUBSIDIARIES

June 30, 2020
(unaudited)
December 31, 2019
Assets
Current assets:
Cash and cash equivalents $ 2,274,789 $ 8,852,281
Restricted cash 1,000,809 620,809
Accounts receivable, net 10,561,022 16,233,955
Subscription acquisition costs, current portion 8,750,230 3,142,580
Royalty fees, current portion 15,000,000 15,000,000
Prepayments and other current assets 4,467,607 4,310,735
Total current assets 42,054,457 48,160,360
Property and equipment, net 1,329,534 661,277
Operating lease right-of-use assets 19,589,040 3,980,649
Platform development, net 6,864,805 5,892,719
Royalty fees, net of current portion 18,750,000 26,250,000
Subscription acquisition costs, net of current portion 7,785,479 3,417,478
Acquired and other intangible assets, net 82,194,391 91,404,144
Other long-term assets 1,799,349 1,085,287
Goodwill 16,139,377 16,139,377
Total assets $ 196,506,432 $ 196,991,291
Liabilities, mezzanine equity and stockholders’ deficiency
Current liabilities:
Accounts payable $ 8,466,629 $ 9,580,186
Accrued expenses and other 12,203,633 16,483,201
Line of credit 3,243,882 -
Unearned revenue 55,419,426 32,163,087
Subscription refund liability 3,277,849 3,144,172
Operating lease liabilities 1,506,992 2,203,474
Liquidated damages payable 9,248,188 8,080,514
Convertible debt 930,375 741,197
Warrant derivative liabilities 1,261,705 1,644,200
Embedded derivative liabilities 8,958,000 13,501,000
Total current liabilities 104,516,679 87,541,031
Unearned revenue, net of current portion 14,816,588 31,179,211
Operating lease liabilities, net of current portion 19,919,015 2,616,132
Other long-term liability 242,310 242,310
Officer promissory notes 322,831 319,351
Convertible debt, net of current portion 15,219,549 12,497,765
Long-term debt 60,390,250 44,009,745
Total liabilities 215,427,222 178,405,545
Commitments and contingencies (Note 12)
Mezzanine equity:
Series G redeemable and convertible preferred stock, $0.01 par value, $1,000 per share liquidation value and 1,800 shares designated; aggregate liquidation value: $168,496; Series G shares issued and outstanding: 168,496; common shares issuable upon conversion: 188,791 at June 30, 2020 and December 31, 2019 168,496 168,496
Series H convertible preferred stock, $0.01 par value, $1,000 per share liquidation value and 23,000 shares designated; aggregate liquidation value $19,399,250; Series H; Series H shares issued and outstanding: 19,400; common shares issuable upon conversion: 58,787,879 at June 30, 2020 and December 31, 2019 18,045,496 18,045,496
Series I convertible preferred stock, $0.01 par value, $1,000 per share liquidation value and 25,800 shares designated; aggregate liquidation value: $23,100,000; Series I shares issued and outstanding: 23,100; common shares issuable upon conversion: 46,200,000 at June 30, 2020 and December 31, 2019 19,699,742 19,699,742
Series J convertible preferred stock, $0.01 par value, $1,000 per share liquidation value and 35,000 shares designated; aggregate liquidation value: $20,000,000; Series J shares issued and outstanding: 20,000; common shares issuable upon conversion: 28,571,428 at June 30, 2020 and December 31, 2019 17,739,996 17,739,996
Total mezzanine equity 55,653,730 55,653,730
Stockholders’ deficiency:
Common stock, $0.01 par value, authorized 1,000,000,000 shares; issued and outstanding: 38,590,363 and 37,119,117 shares at June 30, 2020 and December 31, 2019, respectively 385,902 371,190
Common stock to be issued 25,879 39,383
Additional paid-in capital 43,992,975 35,562,766
Accumulated deficit (118,979,276 ) (73,041,323 )
Total stockholders’ deficiency (74,574,520 ) (37,067,984 )
Total liabilities, mezzanine equity and stockholders’ deficiency $ 196,506,432 $ 196,991,291
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Three Months Ended March 31,
2021 2020
Cash flows from operating activities
Net loss $ (25,463,305 ) $ (22,776,624 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment 109,814 183,261
Amortization of platform development and intangible assets 6,019,835 5,953,548
Amortization of debt discounts 694,236 1,570,853
Change in valuation of warrant derivative liabilities 665,036 (139,219 )
Change in valuation of embedded derivative liabilities - (1,621,000 )
Accrued interest 1,865,690 2,046,893
Liquidated damages 254,634 546,055
Stock-based compensation 5,099,012 3,560,120
Other (508,665 ) (213,982 )
Change in operating assets and liabilities net of effect of business combination:
Accounts receivable 2,916,701 621,643
Subscription acquisition costs (8,348,660 ) (3,104,468 )
Royalty fees 3,750,000 3,750,000
Prepayments and other current assets (1,630,313 ) (623,057 )
Other long-term assets (237,690 ) (365,481 )
Accounts payable 1,919,623 2,547,552
Accrued expenses and other 1,821,317 (3,730,191 )
Unearned revenue 9,038,956 1,337,842
Subscription refund liability 737,460 (96,241 )
Operating lease liabilities (214,923 ) 398,843
Net cash used in operating activities (1,511,242 ) (10,153,653 )
Cash flows from investing activities
Purchases of property and equipment (97,779 ) (859,079 )
Capitalized platform development (867,713 ) (853,926 )
Payments for acquisition of business - (315,289 )
Net cash used in investing activities (965,492 ) (2,028,294 )
Cash flows from financing activities
Proceeds from delayed draw term note - 6,000,000
Borrowings (repayments) under line of credit (1,752,001 ) �� 5,415,914
Payment for taxes related to repurchase of restricted common stock - (169,481 )
Payment of restricted stock liabilities (280,403 ) -
Net cash provided by (used for) financing activities (2,032,404 ) 11,246,433
Net decrease in cash, cash equivalents, and restricted cash (4,509,138 ) (935,514 )
Cash, cash equivalents, and restricted cash – beginning of period
9,534,681 9,473,090
Cash, cash equivalents, and restricted cash – end of period $ 5,025,543 $ 8,537,576
Supplemental disclosure of cash flow information
Cash paid for interest $ 260,045 $ 181,982
Cash paid for income taxes - -
Noncash investing and financing activities
Reclassification of stock-based compensation to platform development $ 309,195 $ 370,052
Issuance of common stock in connection with professional services
125,000
-
Debt discount on delayed draw term note - 913,865
Restricted stock units issued in connection with acquisition of LiftIgniter - 500,000
Assumption of liabilities in connection with acquisition of LiftIgniter - 140,381

See accompanying notes to condensed consolidated financial statements.

5
~~THEMAVEN, INC. AND SUBSIDIARIES~~

~~CONDENSED~~ ~~CONSOLIDATED STATEMENTS OF OPERATIONS~~
~~(unaudited)~~

Three Months Ended
June 30,

Six Months Ended
June 30,

2020 2019 2020 2019
Revenue $ 23,090,940 $ 5,770,283 $ 53,503,793 $ 12,044,246
Cost of revenue (includes amortization of developed technology and platform development for six months ended 2020 and 2019 of $4,259,333 and $2,686,289, respectively) 24,874,179 5,487,172 51,613,012 11,139,737
Gross profit (loss) (1,783,239 ) 283,111 1,890,781 904,509
Operating expenses
Selling and marketing 8,409,343 1,451,101 17,769,281 2,600,393
General and administrative 7,270,511 5,871,015 17,680,716 10,096,268
Depreciation and amortization 4,127,126 107,637 8,223,806 215,977
Total operating expenses 19,806,980 7,429,753 43,673,803 12,912,638
Loss from operations (21,590,219 ) (7,146,642 ) (41,783,022 ) (12,008,129 )
Other (expense) income
Change in valuation of warrant derivative liabilities 243,276 (166,075 ) 382,495 (541,770 )
Change in valuation of embedded derivative liabilities 2,922,000 (1,396,000 ) 4,543,000 (3,779,000 )
Interest expense (4,116,407 ) (1,876,054 ) (7,916,135 ) (3,177,262 )
Interest income 1,640 63 3,383 3,234
Liquidated damages (621,619 ) (853 ) (1,167,674 ) (17,740 )
Other - - - 126
Total other expense (1,571,110 ) (3,438,919 ) (4,154,931 ) (7,512,412 )
Loss before income taxes (23,161,329 ) (10,585,561 ) (45,937,953 ) (19,520,541 )
Income taxes - - - -
Net loss $ (23,161,329 ) $ (10,585,561 ) $ (45,937,953 ) $ (19,520,541 )
Basic and diluted net loss per common share $ (0.59 ) $ (0.30 ) $ (1.17 ) $ (0.55 )
Weighted average number of common shares outstanding – basic and diluted 39,217,524 35,556,188 39,171,629 35,208,771
~~See accompanying notes to condensed consolidated financial statements.~~
6
~~THEMAVEN, INC. AND SUBSIDIARIES~~

~~CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIENCY~~THEMAVEN, INC. AND SUBSIDIARIES
~~(unaudited)~~

~~Six Months Ended June 30, 2020~~
Common Stock to
Common Stock be Issued Additional Total
Shares Par Value Shares Par Value
Paid-in
Capital

Accumulated
Deficit

Stockholders’
Deficiency

Balance at January 1, 2020 37,119,117 $ 371,190 3,938,287 $ 39,383 $ 35,562,766 $ (73,041,323 ) $   (37,067,984 )
Issuance of restricted stock units in connection with the acquisition of LiftIgniter - - - - 500,000 - 500,000
Issuance of restricted stock awards to the board of directors 562,500 5,625 - - (5,625 ) - -
Common stock withheld for taxes (206,881 ) (2,069 ) - - (167,412 ) - (169,481 )
Stock-based compensation - - - - 3,930,172 - 3,930,172
Net loss - - - - - (22,776,624 ) (22,776,624 )
Balance at March 31, 2020 37,474,736 $ 374,746 3,938,287 39,383 $ 39,819,901 $ (95,817,947 ) $ (55,583,917 )
Issuance of common stock in connection with the acquisition of Say Media 1,350,394 13,504 (1,350,394 ) (13,504 ) - - -
Issuance of restricted stock awards to the board of directors - - - - - - -
Common stock withheld for taxes (234,767 ) (2,348 ) - - (109,992 ) - (112,340 )
Stock-based compensation - - - - 4,283,066 - 4,283,066
Net loss - - - - - (23,161,329 ) (23,161,329 )
Balance at June 30, 2020 38,590,363 $ 385,902 2,587,893 25,879 $ 43,992,975 $ (118,979,276 ) $ (74,574,520 )
~~See accompanying notes to condensed consolidated financial statements.~~
7
~~THEMAVEN, INC. AND SUBSIDIARIES~~
~~CONDENSED~~ ~~CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIENCY~~
~~(unaudited)~~
~~Six Months Ended June 30, 2019~~

Common Stock
Common Stock to be Issued
Additional
Total
Shares Par Value Shares Par Value
Paid-in Capital

Accumulated
Deficit

Stockholders’
Deficiency

Balance at January 1, 2019 35,768,619 $ 357,685 5,127,167 $ 51,272 $ 23,413,077 $ (34,539,954 ) $   (10,717,920 )
Issuance of common stock in connection with the merger of Say Media 1,188,880 11,889 (1,188,880 ) (11,889 ) - - -
Forfeiture of restricted stock (120,000 ) (1,200 ) - - 1,200 - -
Issuance of restricted stock awards to the board of directors 833,333 8,333 - - (8,333 ) - -
Cashless exercise of common stock options 15,341 154 - - (154 ) - -
Stock-based compensation - - - - 1,487,575 - 1,487,575
Net loss - - - - - (8,934,980 ) (8,934,980 )
Balance at March 31, 2019 37,686,173 $ 376,861 3,938,287 39,383 $ 24,893,365 $ (43,474,934 ) $ (18,165,325 )
Forfeiture of restricted stock (580,000 ) (5,800 ) - - 5,800 - -
Common stock withheld for taxes (167,246 ) (1,672 ) - - (73,588 ) - (75,260 )
Stock-based compensation - - - - 3,044,620 - 3,044,620
Net loss - - - - - (10,585,561 ) (10,585,561 )
Balance at June 30, 2019 36,938,927 $ 369,389 3,938,287
$
39,383 $ 27,870,197 $ (54,060,495 ) $ (25,781,526 )
~~See accompanying notes to condensed consolidated financial statements.~~
8
~~THEMAVEN, INC. AND SUBSIDIARIES~~
~~CONDENSED~~ ~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~
~~(unaudited)~~
Six Months Ended June 30,
2020 2019
Cash flows from operating activities
Net loss $ (45,937,953 ) $ (19,520,541 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment 396,966 21,177
Amortization of platform development and intangible assets 12,086,173 2,881,089
Amortization of debt discounts 3,206,982 1,580,796
Change in valuation of warrant derivative liabilities (382,495 ) 541,770
Change in valuation of embedded derivative liabilities (4,543,000 ) 3,779,000
Accrued interest 4,385,240 907,582
Liquidated damages 1,167,674 17,740
Stock-based compensation 7,343,575 3,959,925
Other (141,188 ) (6,812 )
Change in operating assets and liabilities net of effect of business combination:
Accounts receivable 5,852,029 10,261,222
Factor receivables - (6,130,674 )
Subscription acquisition costs (9,975,651 ) 17,056
Royalty fees 7,500,000 (45,000,000 )
Prepayments and other current assets (156,872 ) 140,091
Other long-term assets (714,062 ) 27,628
Accounts payable (1,167,051 ) (2,672,264 )
Accrued expenses and other (4,279,568 ) 2,414,501
Unearned revenue 6,806,829 (300,057 )
Subscription refund liability 133,677 -
Operating lease liabilities 998,010 (2,810 )
Net cash used in operating activities (17,420,685 ) (47,083,581 )
Cash flows from investing activities
Purchases of property and equipment (1,065,223 ) (25,400 )
Capitalized platform development (2,061,081 ) (980,257 )
Advance related to pending acquisition of TheStreet, Inc. - (16,500,000 )
Payments for acquisition of business (315,289 ) -
Net cash used in investing activities (3,441,593 ) (17,505,657 )
Cash flows from financing activities
Proceeds from delayed draw term note 6,000,000 -
Proceeds from long-term debt 5,702,725 68,000,000
Repayments of long-term debt - (4,640,000 )
Payment of debt issuance costs - (3,595,000 )
Proceeds from 12% senior convertible debentures - 2,000,000
Proceeds from issuance of Series I convertible preferred stock - 15,000,000
Payment of issuance costs of Series I convertible preferred stock - (1,406,000 )
Borrowings under line of credit, net 3,243,882 415,404
Payment for taxes related to repurchase of restricted common stock (281,821 ) (75,260 )
Repayment of officer promissory notes - (366,842 )
Net cash provided by financing activities 14,664,786 75,332,302
Net increase (decrease) in cash, cash equivalents, and restricted cash (6,197,492 ) 10,743,064
Cash, cash equivalents, and restricted cash – beginning of period 9,473,090 2,527,289
Cash, cash equivalents, and restricted cash – end of period $ 3,275,598 $ 13,270,353
Supplemental disclosure of cash flow information
Cash paid for interest $ 323,913 $ 731,126
Cash paid for income taxes - -
Noncash investing and financing activities
Reclassification of stock-based compensation to platform development $ 869,663 $ 572,270
Debt discount on delayed draw term note 913,865 -
Restricted stock units issued in connection with acquisition of LiftIgniter 500,000 -
Assumption of liabilities in connection with acquisition of LiftIgniter 140,381 -
Discount of 12% senior convertible debentures allocated to embedded derivative liabilities - 1,074,000
Liquidated damages liability recorded against cash proceeds for 12% senior convertible debentures - 84,000
Liquidated damages liability recorded against cash proceeds for Series I convertible preferred stock - 1,940,400
Series I convertible preferred stock subscription receivable - 8,100,000
~~See accompanying notes to condensed consolidated financial statements.~~
9
~~THEMAVEN, INC. AND SUBSIDIARIES~~
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
~~(unaudited)~~
~~1. Summary of Significant Accounting Policies~~
1. Summary of Significant Accounting Policies

Basis of Presentation

The condensed consolidated financial statements include the accounts of TheMaven, Inc. and its wholly owned subsidiaries (“Maven” or the “Company”), after eliminating all significant intercompany balances and transactions. The Company does not have any off-balance sheet arrangements.

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of 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, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America (“U.S. ~~GAAP~~GAAP”) for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements, which are included in Maven’s Annual Report on Form 10-K (the “Form 10-K”) for the year ended December 31, ~~2019,~~2020, filed with the SEC on ~~April 9,~~August 16, 2021.

The condensed consolidated financial statements as of ~~June 30,~~December 31, 2020, and for the three ~~and six~~ months ended ~~June 30,~~March 31, 2021 and 2020, ~~and 2019,~~ are unaudited but, in management’s opinion, include all adjustments necessary for a fair presentation of the results of interim periods. All such adjustments are of a normal recurring nature. The year-end condensed consolidated balance sheet as of December 31, ~~2019,~~2020, was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The results of operations for interim periods are not necessarily indicative of the results to be expected for the entire fiscal year.
~~Liquidity~~
The Company performed an annual reporting period going concern assessment. Management is required to assess its ability to continue as a going concern. The condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. These condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
~~The Company has a history of recurring losses.~~ The Company’s ~~recurring losses from operations and net capital deficiency have been evaluated~~impact during the first quarter of 2021 by management to determine if the significance of those conditions or events would limit its ability to meet its obligations when due. The operating loss realized for the six months ended June 30, 2020 was primarily a result of a marketing investment in customer growth, together with investments in people and technology as the Company continued to expand its operations. The operating loss realized in fiscal 2019 was primarily a result of investments in people, infrastructure for the Company’s technology platform, and operations expanding during fiscal 2019 with the acquisition of TheStreet, Inc. (“TheStreet”) and the licensing agreement for certain Sports Illustrated brands, along with continued costs based on the strategic growth plans in other verticals.
As reflected in these condensed consolidated financial statements, the Company had revenues of $53,503,793 for the six months ended June 30, 2020, and experienced recurring net losses from operations, negative working capital, and negative operating cash flows. During the six months ended June 30, 2020, the Company incurred a net loss of $45,937,953, utilized cash in operating activities of $17,420,685, and as of June 30, 2020, had an accumulated deficit of $118,979,276. The Company has financed its working capital requirements since inception through the issuance of debt and equity securities.
~~Additionally, as a result of~~ the novel coronavirus (“COVID-19”) pandemic ~~the Company experienced~~has been to a ~~decline~~lesser extent than in 2020. Beginning in 2021, restrictions on non-essential work activity have begun to lift and sporting and other events have begun to be held, with attendance closer to pre-pandemic levels, which has resulted in an increase in traffic and advertising revenue in the first and second quarters of 2020. The Company implemented cost reduction measures in an effort to offset these declines. Since May 2020, there has been a steady recovery in the advertising market in both pricing and volume, which coupled with the return of professional and college sports yielded steady growth in revenues through the balance of 2020 and start of 2021.revenue. The Company expects a continued modest growth in advertising revenue back toward pre-pandemic levels, however, such growth depends on future developments, including the duration and spread of the COVID-19 ~~future sport~~pandemic, whether related group gathering and sports event advisories and restrictions will be put in place again, and the extent and effectiveness of containment and other actions ~~taken.~~
~~Management has evaluated whether relevant conditions or events, considered in~~taken, including the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern. Substantial doubt exists when conditions and events, considered in the aggregate, indicate it is probable that a company will not be able to meet its obligations as they become due within one year after the issuance date of its financial statements. Management’s assessment is based on the relevant conditions that are known or reasonably knowable aspercentage of the ~~date these condensed consolidated financial statements were issued or were available to be issued.~~
~~Management’s assessment of the Company’s ability to meet its future obligations is inherently judgmental, subjective, and susceptible to change. The factors~~population that the Company considered important in its going concern analysis, include, but are not limited to, its fiscal 2021 cash flow forecast and its fiscal 2021 operating budget. Management also considered the Company’s ability to repay its obligations through future equity and the implementation of cost reduction measures in effect to offset revenue and earnings declines from COVID-19. These factors consider information including, but not limited to, the Company’s financial condition, liquidity sources, obligations due within one year after the issuance date of these condensed consolidated financial statements, the funds necessary to maintain operations and financial conditions, including negative financial trends or other indicators of possible financial difficulty.
In particular, the Company’s plan for the: (1) 2021 cash flow forecast, considered the use of its working capital line with FastPay (as described in Note 5) to fund changes in working capital, where the Company has available credit of approximately $10.1 million as of the issuance date of these condensed consolidated financial statements for the six months ended June 30, 2020, and that the Company does not anticipate the need for any further borrowings that are subject to the holders approval, from its Delayed Draw Term Note (as described in Note 8) where the Company may be permitted to borrow up to an additional $5,000,000; and (2) 2021 operating budget, considered that approximately sixty-five percent of the Company’s revenue is from recurring subscriptions, generally paid in advance, and that digital subscription revenue, that accounts for approximately thirty percent of subscription revenue, grew approximately thirty percent during 2020 demonstrating the strength of its premium brand, and the plan to continue to grow its subscription revenue from its acquisition of TheStreet and the launch of premium digital subscriptions from its Sports Illustrated licensed brands.
The Company has considered both quantitative and qualitative factors as part of the assessment that are known or reasonably knowable as of the date these condensed consolidated financial statements were issued or were available to be issued and concluded that conditions and events considered in the aggregate, do not raise substantial doubt about the Company’s ability to continue as a going concern for a one-year period following the financial statement issuance date.
receives COVID-19 vaccinations.

Reclassifications

Certain prior year amounts have been reclassified to conform to the fiscal 2020 ~~presentation with no impact to previously reported earnings.~~presentation.

Use of Estimates

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

106

Contract Modifications

The Company occasionally enters into amendments to previously executed contracts that constitute contract modifications. The Company assesses each of these contract modifications to determine:

● if the additional services and goods are distinct from the services and goods in the original arrangement; and

● if the amount of consideration expected for the added services or goods reflects the stand-alone selling price of those services and goods.

A contract modification meeting both criteria is accounted for as a separate contract. A contract modification not meeting both criteria is considered a change to the original contract and is accounted for on either a prospective basis as a termination of the existing contract and the creation of a new contract, or a cumulative catch-up basis (see Note 3 and Note 11).

Recently Adopted Accounting Standards
In ~~June 2016,~~December 2019, the FASB issued ASU ~~2016-13,~~2019-12, ~~Financial Instruments – Credit Losses~~Income Taxes (Topic ~~326)~~740): Simplifying the Accounting for Income Taxes, which ~~introduces a new model for recognizing credit losses for~~removes certain financial instruments, including loans, accounts receivable and debt securities. The new model requires an estimate of expected credit losses over the life of exposure to be recorded through the establishment of an allowance account, which is presented as an offsetexceptions related to the ~~related financial asset. The expected credit loss is recorded upon~~approach for intra-period tax allocation, the ~~initial~~methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. This guidance also clarifies and simplifies other areas of ASC 740. Certain amendments in this update must be applied on a prospective basis, certain amendments must be applied on a retrospective basis, and certain amendments must be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings/(deficit) in the ~~financial asset.~~period of adoption. On January 1, ~~2020,~~2021, the Company adopted ASU ~~2016-13 using the modified retrospective approach with no material impact to its condensed consolidated financial statements.~~
~~In January 2017, the FASB issued ASU 2017-04,~~ ~~Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment~~, which simplifies how an entity is required to test goodwill for impairment. The amendments require goodwill impairment to be measured using the difference between the carrying amount and the fair value of the reporting unit and require the loss recognized to not exceed the total amount of goodwill allocated to that reporting unit. On January 1, 2020, the Company adopted ASU 2017-04 on a prospective basis2019-12 with no material impact to its condensed consolidated financial position, results of operations or cash flows.

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40), which updates various codification topics to simplify the accounting guidance for certain financial instruments with characteristics of liabilities and equity, with a specific focus on convertible instruments and the derivative scope exception for contracts in an entity’s own equity and amends the diluted EPS computation for these instruments. On January 1, 2021, the Company adopted ASU 2020-06 with no material impact to its condensed consolidated financial statements.
In October 2020, the FASB issued ASU 2020-08, Codification Improvements to Subtopic 310-20 – Receivables – Nonrefundable Fees and Other Costs, which clarifies that a reporting entity should assess whether a callable debt security purchased at a premium is within the scope of ASC 310-20-35-33 each reporting period, which impacts the amortization period for nonrefundable fees and other costs. On January 1, 2021, the Company adopted ASU 2020-08 with no material impact to its condensed consolidated financial statements.
In October 2020, the FASB issued ASU 2020-10, Codification Improvements, which updates various codification topics by clarifying or improving disclosure requirements to align with the SEC’s regulations. On January 1, 2021, the Company adopted ASU 2020-10 with no material impact to its condensed consolidated financial statements.
7
Loss per Common Share

Basic loss per share is computed using ~~the loss available to common stockholders over~~ the weighted average number of common shares outstanding during the period and excludes any dilutive effects of common stock equivalent shares, such as stock options, restricted stock, and warrants. All restricted stock awards are considered outstanding but is included in the computation of basic loss per common share only when the underlying restrictions expire, the shares are no longer forfeitable, and are thus vested. All restricted stock units are included in the computation of basic loss per common share only when the underlying restrictions expire, the shares are no longer forfeitable, and are thus vested. Contingently issuable shares are included in basic loss per common share only when there are no ~~circumstance~~circumstances under which those shares would not be issued. Diluted loss per common share is computed using the weighted average number of common shares outstanding and common stock equivalent shares outstanding during the period using the treasury stock method. Common stock equivalent shares are excluded from the computation if their effect is anti-dilutive.

The Company excluded the outstanding securities summarized below (capitalized terms are described herein), which entitle the holders thereof to acquire shares of the Company’s common stock, from its calculation of net income loss per common share, as their effect would have been anti-dilutive.

As of June 30, As of March 31,
2020 2019 2021 2020
Series G Preferred Stock 188,791 188,791
Series G convertible preferred stock �� 188,791 188,791
Series H Preferred Stock 58,787,879 58,787,879 59,384,849 58,787,879
Series I Preferred Stock 46,200,000 46,200,000 - 46,200,000
Series J Preferred Stock 28,571,428 - - 28,571,428
Indemnity shares of common stock 412,500 825,000 - 412,500
Restricted Stock Awards 1,433,332 3,574,997 316,667 1,991,665
Financing Warrants 2,882,055 3,949,018 2,882,055 2,882,055
ABG Warrants 21,989,844 - 21,989,844 21,989,844
Channel Partner Warrants 789,541 939,540
AllHipHop warrants 125,000 -
Publisher Partner Warrants 789,541 939,540
Restricted Stock Units 2,399,997 2,399,997 - 2,399,997
Common Stock Awards 8,033,936 9,047,892 7,078,723 8,063,811
Common Equity Awards 82,744,480
48,154,840
157,945,671 77,106,507
Outside Options 2,986,000 3,732,667 3,050,000 3,730,667
Total 257,419,783 177,800,621 253,751,141 253,264,684

11 2. Acquisition
2. ~~Acquisitions~~

On March 9, 2020, the Company entered into an asset purchase agreement with Petametrics Inc., dba LiftIgniter, a Delaware corporation (“LiftIgniter”), 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) a cash payment of $184,087 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, the issuance of restricted stock units for an aggregate of up to 312,500 shares of the Company’s common stock (of which 256,661 shares of the Company’s common stock were issued during the three months ended March 31, 2021 and 55,839 are to be issued), and (5) on the second anniversary date of the closing, the issuance of restricted stock units for an aggregate of up to 312,500 shares of the Company’s common stock.

8
The composition of the ~~preliminary~~ purchase price is as follows:

Cash $ 315,289
Indemnity restricted stock units for shares of common stock 500,000
Total purchase consideration $ 815,289

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

Accounts receivable $ 37,908
Developed technology 917,762
Accounts payable (53,494 )
Unearned revenue (86,887 )
Net assets acquired $ 815,289

The useful life for the developed technology is ~~five~~three years ~~(5.0~~(3.0 years).

~~3. Balance Sheet Components~~
3. Balance Sheet Components

The components of certain balance sheet amounts are as follows:

Accounts Receivable – Accounts receivable are presented net of allowance for doubtful accounts. The allowance for doubtful accounts as of ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 was ~~$445,317~~$718,912 and ~~$304,129,~~$892,352, respectively.
Subscription Acquisition Costs – Subscription acquisition costs include the incremental costs of obtaining a contract with a customer, paid to external parties, if it expects to recover those costs. The current portion of the subscription acquisition costs as of ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 was ~~$8,750,230~~$31,171,595 and ~~$3,142,580,~~$28,146,895, respectively. The noncurrent portion of the subscription acquisition costs as of ~~June 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 was ~~$7,785,479~~$18,682,545 and ~~$3,417,478,~~$13,358,585, respectively.

Certain contract amendments resulted in a modification to the subscription acquisition costs that will be recognized on a prospective basis in the same proportion as the revenue that has not yet been recognized (further details are provided under the heading Contract Balances in Note 11).
Property and Equipment – Property and equipment are summarized as follows:
As of
March 31, 2021 December 31, 2020
Office equipment and computers $ 1,439,071 $ 1,341,292
Furniture and fixtures 19,997 19,997
Leasehold improvements 345,516 345,516
1,804,584 1,706,805
Less accumulated depreciation and amortization (687,181 ) (577,367 )
Net property and equipment $ 1,117,403 $ 1,129,438
Depreciation and amortization expense for the three months ended March 31, 2021 and 2020 was $109,814 and $638,796, respectively. Depreciation and amortization expense is included in selling and marketing expenses and general and administrative expenses, as appropriate, on the consolidated statements of operations.

Platform Development – Platform development costs are summarized as follows:

As of As of
June 30, 2020 December 31, 2019 March 31, 2021 December 31, 2020
Platform development $ 13,609,436 $ 10,678,692 $ 17,204,336 $ 16,027,428
Less accumulated amortization (6,744,631 ) (4,785,973 ) (9,740,665 ) (8,671,820 )
Net platform development $ 6,864,805 $ 5,892,719 $ 7,463,671 $ 7,355,608

A summary of platform development activity for the ~~six~~three months ended ~~June 30, 2020~~March 31, 2021 and year ended December 31, ~~2019~~2020 is as follows:

As of As of
June 30, 2020 December 31, 2019 March 31, 2021 December 31, 2020
Platform development beginning of period $ 10,678,692 $ 6,833,900 $ 16,027,428 $ 10,678,692
Payroll-based costs capitalized during the period 2,061,081 2,537,402 867,713 3,750,541
Total capitalized costs 12,739,773 9,371,302 16,895,141 14,429,233
Stock-based compensation 869,663 1,307,390 309,195 1,608,995
Dispositions - (10,800 )
Platform development end of period $ 13,609,436 $ 10,678,692 $ 17,204,336 $ 16,027,428
9

Amortization expense for the three months ended ~~June 30,~~March 31, 2021 and 2020, was $1,068,845 and ~~2019 was $1,037,834 and $623,819,~~$920,824, respectively.
~~Amortization expense for the six months ended June 30, 2020 and 2019 was $1,958,658 and $1,211,289, respectively.~~
12

Intangible Assets – Intangible assets subject to amortization consisted of the following:

As of June 30, 2020 As of December 31, 2019 As of March 31, 2021 As of December 31, 2020

Carrying Amount
Accumulated Amortization Net Carrying Amount

Carrying Amount
Accumulated Amortization Net Carrying Amount

Carrying Amount
Accumulated Amortization Net Carrying Amount

Carrying Amount
Accumulated
Amortization Net Carrying Amount
Developed technology $ 20,055,866 $ (6,391,034 ) $ 13,664,832 $ 19,138,104 $ (4,090,359 ) $ 15,047,745 $ 19,070,857 $ (9,381,310 ) $ 9,689,547 $ 19,070,857 $ (8,283,740 ) $ 10,787,117
Noncompete agreement 480,000 (372,000 ) 108,000 480,000 (252,000 ) 228,000 480,000 (480,000 ) - 480,000 (480,000 ) -
Trade name 3,328,000 (364,042 ) 2,963,958 3,328,000 (224,745 ) 3,103,255 3,328,000 (572,992 ) 2,755,008 3,328,000 (503,342 ) 2,824,658
Subscriber relationships 73,458,799 (10,846,438 ) 62,612,361 73,458,799 (3,587,837 ) 69,870,962 73,458,799 (21,734,342 ) 51,724,457 73,458,799 (18,105,041 ) 55,353,758
Advertiser relationships 2,240,000 (213,577 ) 2,026,423 2,240,000 (94,635 ) 2,145,365 2,240,000 (391,984 ) 1,848,016 2,240,000 (332,515 ) 1,907,485
Database 1,140,000 (341,183 ) 798,817 1,140,000 (151,183 ) 988,817 1,140,000 (626,183 ) 513,817 1,140,000 (531,183 ) 608,817
Subtotal amortizable intangible assets 100,702,665 (18,528,274 ) 82,174,391 99,784,903 (8,400,759 ) 91,384,144 99,717,656 (33,186,811 ) 66,530,845 99,717,656 (28,235,821 ) 71,481,835
Website domain name 20,000 - 20,000 20,000 - 20,000 20,000 - 20,000 20,000 - 20,000
Total intangible assets $ 100,722,665 $ (18,528,274 ) $ 82,194,391 $ 99,804,903 $ (8,400,759 ) $ 91,404,144 $ 99,737,656 $ (33,186,811 ) $ 66,550,845 $ 99,737,656 $ (28,235,821 ) $ 71,501,835

Amortization expense for the three months ended ~~June 30,~~March 31, 2021 and 2020 was $4,950,990 and ~~2019 was $5,094,791 and $834,900,~~$5,032,724, respectively. ~~Amortization expense for the six months ended June 30, 2020 and 2019 was $10,127,515 and $1,669,800.~~ No impairment charges have been recorded during for the ~~six~~three months ended ~~June 30, 2020~~March 31, 2021 and ~~2019.~~2020.

~~4. Leases~~
4. Leases

The Company’s leases are primarily comprised of real estate leases for the use of office space, with certain lease arrangements that contain equipment. The Company determines whether an arrangement contains a lease at inception. Lease assets and liabilities are recognized upon commencement of the lease based on the present value of the future minimum lease payments over the lease term. The lease term includes options to extend the lease when it is reasonably certain that the Company will exercise that option. Substantially all of the leases are long-term operating leases for facilities with fixed payment terms between 1.5 and 12.8 years.

The table below presents supplemental information related to operating leases:

Six Months Ended June 30, 2020
Three Months Ended March 31, 2021
Operating cash flows for operating leases $ 1,349,213 $ 968,473
Noncash lease liabilities arising from obtaining operating leased assets during the period $ 16,617,790 $ -
Weighted-average remaining lease term 11.13 years 11.02
Weighted-average discount rate 13.46 % 13.58 %

The Company generally utilizes its incremental borrowing rate based on information available at the commencement of the lease in determining the present value of future payments since the implicit rate for most of the Company’s leases is not readily determinable.

10
Variable lease expense includes rental increases that are not fixed, such as those based on amounts paid to the lessor based on cost or consumption, such as maintenance and utilities.

Operating lease costs recognized for the three months ended ~~June 30,~~March 31, 2021 and 2020 were $908,465 and ~~2019 were $1,062,181 and $130,951,~~$1,037,904, respectively. ~~Operating lease costs for the six months ended June 30, 2020 and 2019 were $2,100,085 and $261,903, respectively.~~
13

Maturities of operating lease liabilities as of ~~June 30, 2020~~March 31, 2021 are summarized as follows:

Years Ending December 31,
2020 (remaining six months of the year) $ 1,839,773
2021 3,804,853
2021 (remaining nine months of the year) $ 2,836,380
2022 3,525,158 3,525,158
2023 3,528,696 3,528,696
2024 3,526,406 3,526,406
2025 3,740,591
Thereafter 27,563,572 23,822,981
Minimum lease payments 43,788,458 40,980,212
Less imputed interest (22,362,451 ) (20,277,693 )
Present value of operating lease liabilities $ 21,426,007 $ 20,702,519
Current portion of operating lease liabilities $ 1,506,992 $ 1,022,294
Long-term portion of operating lease liabilities 19,919,015 19,680,225
Total operating lease liabilities $ 21,426,007 $ 20,702,519

~~Future minimum lease payments under operating leases as of December 31, 2019, were as follows:~~
Payments due by Year
Total 2020 2021 2022 2023 2024 Thereafter
Operating leases $ 6,132,252 $ 2,579,924 $ 685,111 $ 472,084 $ 486,247 $ 500,834 $ 1,408,052
~~Further details as of the date these condensed consolidated financial statements were issued or were available to be issued are provided under the heading~~ ~~Leases~~ ~~in Note 13).~~
~~5. Line of Credit~~
5. Line of Credit

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 ~~June 30,~~March 31, 2021 and December 31, 2020 was ~~$3,243,882.~~$5,426,790 and $7,178,791, respectively. As of the date these condensed consolidated financial statements were issued or were available to be issued the balance outstanding was approximately ~~$4.9 million.~~$6,500,000.

6. Restricted Stock Liabilities
~~SallyPort Credit Facility~~ ~~– During November 2018,~~
On December 15, 2020, the Company entered into an amendment for certain restricted stock awards and units that were previously issued to certain employees in connection with a ~~factoring note agreement with Sallyport Commercial Finance, LLC (“Sallyport”)~~previous merger. Pursuant to ~~increase working capital through accounts receivable factoring. As~~the amendment, the Company committed to repurchase 1,064,549 vested restricted stock awards as of December 31, ~~2019, Sallyport collected accounts receivable~~2020 at a price of $4.00 per share in ~~excess~~24 equal monthly installments on the second business day of each calendar month beginning January 4, 2021, subject to certain conditions.
11
The following table presents the components of the balance outstanding under the note, therefore, the Company was due $626,532 from Sallyport which was reflected within accounts receivable on the condensed consolidated balance sheet. Effective January 30, 2020, the Company’s factoring facility with Sallyport was closedrestricted stock liabilities as of March 31, 2021 and ~~funds were no longer available for advance.~~December 31, 2020:

As of
March 31, 2021 December 31, 2020
Restricted stock liabilities recorded upon modification of the restricted stock awards and units (1,064,549 restricted stock to be purchased at $4.00 per share) $ 4,258,196 $ 4,258,196
Less imputed interest (457,461 ) (457,462 )
Present value of restricted stock liabilities 3,800,735 3,800,734
Less payments (excluding imputed interest) (457,829 ) (177,425 )
Restricted stock liabilities $ 3,342,906 $ 3,623,309
Current portion of restricted stock liabilities $ 1,823,750 $ 1,627,499
Long-term portion of restricted stock liabilities 1,519,156 1,995,810
Total restricted stock liabilities $ 3,342,906 $ 3,623,309
~~6. Fair Value Measurements~~
7. Fair Value Measurements

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

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

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

14
The Company accounts for certain warrants (as described under the heading Common Stock Warrants in Note 9) ~~and~~as derivative liabilities, which requires the Company to carry such amounts on its condensed consolidated balance sheets as a liability at fair value, as adjusted at each reporting period-end. The Company accounted for the embedded conversion features of the 12% senior convertible debentures (the “12% Convertible Debentures”) as derivative liabilities, which required the Company to carry such amounts on its condensed consolidated balance sheets as a liability at fair value, as adjusted at each reporting period-end. As of December 31, 2020, there was no longer any principal or accrued but unpaid interest outstanding under the 12% Convertible Debentures since certain holders converted the debt into shares of the Company’s common stock and certain holders were paid in cash.

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.

12
Warrant Derivative Liabilities

The following table presents the assumptions used for the warrant derivative liabilities under the Black-Scholes option-pricing model:

As of June 30, 2020 As of December 31, 2019
Strome Warrants B. Riley Warrants Strome Warrants B. Riley Warrants
Expected life 2.96 5.30 3.45 5.80
Risk-free interest rate 0.18 % 0.29 % 1.62 % 1.76 %
Volatility factor 138.50 % 135.13 % 144.54 % 127.63 %
Dividend rate 0 % 0 % 0 % 0 %
Transaction date closing market price $ 0.65 $ 0.65 $ 0.80 $ 0.80
Exercise price $ 0.50 $ 1.00 $ 0.50 $ 1.00
As of March 31, 2021 As of December 31, 2020
Strome Warrants B. Riley Warrants Strome Warrants B. Riley Warrants
Expected life 2.21 4.55 2.45 4.79
Risk-free interest rate 0.16 % 0.92 % 0.13 % 0.36 %
Volatility factor 150.37 % 151.48 % 150.55 % 140.95 %
Dividend rate 0 % 0 % 0 % 0 %
Transaction date closing market price $ 0.91 $ 0.91 $ 0.60 $ 0.60
Exercise price $ 0.50 $ 1.00 $ 0.50 $ 1.00

The following table represents the carrying amounts and change in valuation for the Company’s warrants accounted for as a derivative liability and classified within Level 3 of the fair-value hierarchy:

As of and for the Six Months Ended
June 30, 2020

As of and for the Six Months Ended
June 30, 2019

Carry Amount at Beginning of Period Change in Valuation Carrying Amount at End of Period Carry Amount at Beginning of Period Change in Valuation Carrying Amount at End of Period
L2 Warrants $ - $ - $ - $ 418,214 $ 173,181 $ 591,395
Strome Warrants 1,036,687 (260,345 ) 776,342 587,971 243,464 831,435
B. Riley Warrants 607,513 (122,150 ) 485,363 358,050 125,125 483,175
Total $ 1,644,200 $ (382,495 ) $ 1,261,705 $ 1,364,235 $ 541,770 $ 1,906,005

As of and for the Three Months Ended
March 31, 2021

As of and for the Three Months Ended
March 31, 2020

Carry Amount at Beginning of Period Change in Valuation Carrying Amount at End of Period Carry Amount at Beginning of Period Change in Valuation Carrying Amount at End of Period
Strome Warrants $ 704,707 $ 398,861 $ 1,103,568 $ 1,036,687 $ (110,081 ) $ 926,606
B. Riley Warrants 443,188 266,175 709,363 607,513 (29,138 ) 578,375
Total $ 1,147,895 $ 665,036 $ 1,812,931 $ 1,644,200 $ (139,219 ) $ 1,504,981

For the three months ended ~~June 30,~~March 31, 2021 and 2020, ~~and 2019,~~ the change in valuation of warrant derivative liabilities recognized as other income (expense) on the condensed consolidated statements of operations was $243,276 and ($166,075), respectively. For the six months ended June 30, 2020 and 2019, the change in valuation of warrant derivative liabilities recognized as other income (expense) on the condensed consolidated statementsstatement of operations, as described in the above table, was ~~$382,495~~($665,036) and ~~($541,770),~~$139,219, respectively.
Embedded Derivative Liabilities

The carrying amount for the conversion option features, buy-in features, and default remedy features under the 12% Convertible Debentures accounted for as embedded derivative liabilities and classified within Level 3 of the fair-value hierarchy were $8,958,000 and $13,501,000 as of June 30, 2020 and December 31, 2019, respectively.
For the three months ended ~~June~~March 30, 2020, ~~and 2019~~, the change in valuation of embedded derivative liabilities recognized as other income ~~(expense)~~ on the condensed consolidated statements of operations was ~~$2,922,000 and ($1,396,000), respectively. For the six months ended June 30, 2020~~ ~~and~~ ~~2019~~, ~~the change in valuation of embedded derivative liabilities recognized as other income (expense) on the condensed consolidated statements of operations was $4,543,000 and ($3,779,000), respectively.~~$1,621,000.

15 8. Long-term Debt
~~7. Convertible Debt~~
~~12% Convertible Debentures~~
~~During 2018 and 2019, the~~ Company had various financings through the issuance of the 12% Convertible Debentures which were due and payable on December 31, 2020. Interest accrued 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. The 12% Convertible Debentures were subject to the Company receiving stockholder approval to increase its authorized shares of common stock before conversion. Principal on the 12% Convertible Debentures were convertible into shares of the Company’s common stock, at the option of the investor at any time prior to December 31, 2020, at either a per share conversion price of $0.33 (with respect to the 12% Convertible Debentures issued in 2018) or $0.40 (with respect to the 12% Convertible Debentures issued in 2019), subject to adjustment for stock splits, stock dividends and similar transactions, and certain beneficial ownership blocker provisions.
The 12% Convertible Debentures were issued and convertible into shares of the Company’s common stock as follows: (1) gross proceeds of $13,091,528 on December 12, 2018, convertible into 39,671,297 shares; (2) gross proceeds of $1,696,000 on March 18, 2019, convertible into 4,240,000 shares; (3) gross proceeds of $318,000 on March 27, 2019, convertible into 795,000 shares; and (4) gross proceeds of $100,000 on April 8, 2019, convertible into 250,000 shares. Upon issuance of the various financings, the Company accounted for the embedded conversion option feature, buy-in feature, and default remedy feature as embedded derivative liabilities, which required the Company to carry such amount on its condensed consolidated balance sheets as a liability at fair value, as adjusted at each period-end (see Note 6). The Company also incurred additional debt issuance cost. The embedded derivative liabilities and debt issuance cost were treated as a debt discount and amortized over the term of the debt.
~~The following table summarizes the convertible debt:~~
As of June 30, 2020 As of December 31, 2019
Principal Balance (including accrued interest) Unamortized Discount and Debt Issuance Costs Carrying Value Principal Balance (including accrued interest) Unamortized Discount and Debt Issuance Costs Carrying Value
12% Convertible Debentures, due on December 31, 2020 $ 18,146,745 $ (1,996,821 ) $ 16,149,924 $ 17,119,571 $ (3,880,609 ) $ 13,238,962
As of December 31, 2020, there was no longer any principal or accrued but unpaid interest outstanding under the 12% Convertible Debentures. Certain holders converted the debt into shares of the Company’s common stock and certain holders were paid in cash (further details are provided under the heading ~~12% Convertible Debentures~~ ~~in Note 13).~~
~~8. Long-term Debt~~

12% Second Amended Senior Secured ~~Note~~Notes

Below is a summary of the various amended and restated notes, as well as various amendments thereto, to the 12% senior secured note that was originally issued on June 10, 2019, for gross proceeds of ~~$20,000,000, due July 31, 2019.~~$20,000,000. The transactions leading up to the 12% second amended and restated note that is outstanding as of ~~June 30, 2020~~March 31, 2021 consisted of:

● Amended and restated note issued on June 14, 2019, where the Company received gross proceeds of $48,000,000, together with the $20,000,000 gross proceeds received on June 10, 2019 for total gross proceeds of $68,000,000, due June 14, 2022;

● First amendment to the amended and restated note issued on August 27, 2019, where the Company received gross proceeds of $3,000,000;
16

● Second amendment to the amended and restated note issued on February 27, 2020, where the Company issued a $3,000,000 letter of credit to the Company’s landlord for leased premises; and

● Second amended and restated note issued on March 24, 2020, where the Company was permitted to enter into a 15.0% delayed draw term note, in the aggregate principal amount of $12,000,000.
13
● First amendment to second amended and restated note issued on March 24, 2020 was entered into on October 23, 2020 (“Amendment 1”), where the maturity date was changed to December 31, 2022, subject to certain acceleration conditions and interest payable on the notes on September 30, 2020, December 31, 2020, March 31, 2021, June 30, 2021, September 30, 2021, and December 31, 2021 will be payable in-kind in arrears on the last day of such fiscal quarter. Alternatively, at the option of the holder, such interest amounts originally could have been paid in shares of Series K convertible preferred stock (the “Series K Preferred Stock”); however, after December 18, 2020, the date the Series K Preferred Stock converted into shares of the Company’s common stock, such interest amounts can be converted into shares of the Company’s common stock based upon the conversion rate specified in the Certificate of Designation for the Series K Preferred Stock, subject to certain adjustments.

Collectively the amended and restated notes and amendments thereto and the second amended and restated notes and Amendment 1 thereto are referred to as the ~~12%~~“12% Second Amended Senior Secured ~~Note,~~Notes,” with all borrowings collateralized by substantially all assets of the Company. Pursuant to the 12% Second Amended Senior Secured Note, interest on amounts outstanding with respect to (i) interest that was payable on March 31, 2020 and June 30, 2020, and (ii) at the Company’s option, with the consent of requisite purchasers, interest that was payable 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, would be payable in-kind in arrears on the last day of such applicable fiscal quarter (further details as of the date these condensed consolidated financial statements were issued or were available to be issued are provided under the heading ~~12% Second Amended Senior Secured Note~~ ~~in Note 13).~~

Delayed Draw Term Note

On March 24, 2020, the Company entered into a 15% delayed draw term note (the “Delayed Draw Term Note”) pursuant to the second amended and restated note purchase agreement, in the aggregate principal amount of $12,000,000.

On March 24, 2020, the Company drew down $6,913,865 under the Delayed Draw Term Note, and after payment of commitment and funding fees paid of $793,109, and other of its legal fees and expenses that were incurred, the Company received net proceeds of $6,000,000. The net proceeds were used for working capital and general corporate purposes. Additional borrowings under the Delayed Draw Term Note requested by the Company may be made at the option of the purchasers, subject to certain conditions. Up to $8,000,000 in principal amount under the note was originally due on March 31, 2021. Interest on amounts outstanding under the note was payable in-kind in arrears on the last day of each fiscal ~~quarter (further details as~~quarter.
On October 23, 2020, pursuant to the terms of Amendment 1, the maturity date of the ~~date these condensed consolidated financial statements were issued or were available to be issued are provided under the heading~~ Delayed Draw Term Note was changed from March 31, 2021 to March 31, 2022. Amendment 1 also provided that the holder, could originally elect, in lieu of receipt of cash for payment of all or any portion of the interest due or cash payments up to a certain conversion portion of the Delayed Draw Term Note, ~~13).~~to receive shares of Series K Preferred Stock; however, after December 18, 2020, the date the Series K Preferred Stock converted into shares of the Company’s common stock, the holder may elect, in lieu of receipt of cash for such amounts, shares of the Company’s common stock at the price the Company last sold shares of the Company’s common stock.

~~Payroll~~Paycheck Protection Program Loan

On April 6, 2020, the Company entered into a note agreement with JPMorgan Chase Bank, N.A. (“JPMorgan Chase”) under the recently enacted Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) administered by the U.S. Small Business Administration (“SBA”) ~~in the principal amount~~(the “Paycheck Protection Program Loan”). The Company received total proceeds of $5,702,725 ~~pursuant to Title 1~~under the Paycheck Protection Program Loan. In accordance with the requirements of the CARES Act, ~~(the “PPP Loan”).~~
~~The PPP~~the Company used proceeds from the Paycheck Protection Program Loan ~~proceeds were used to pay~~primarily for payroll ~~costs, including salaries, commissions, and similar compensation, group health care benefits, and paid leaves; rent; utilities; and interest on certain other outstanding debt.~~costs. The ~~amount that will be forgiven will be calculated in part with reference to the Company’s full time headcount during the 24 week period following the funding of the PPP Loan.~~
~~The note is~~Paycheck Protection Program Loan was scheduled to mature on April 6, ~~2022. The~~2022, with a 0.98% interest rate onand is subject to the ~~note is a fixed rate of 0.98% per annum. To~~terms and conditions applicable to loans administered by the ~~extent that the amounts owed~~SBA under the ~~PPP~~CARES Act. The Paycheck Protection Program Loan ~~or a portion of them, are not~~was fully forgiven ~~the Company will be required to make principal and interest payments in monthly installments.~~
17
~~The following table summarizes the long-term debt:~~
As of June 30, 2020 As of December 31, 2019
Principal Balance (including accrued interest) Unamortized Discount and Debt Issuance Costs Carrying Value Principal Balance (including accrued interest) Unamortized Discount and Debt Issuance Costs Carrying Value
12% Second Amended Senior Secured Note, as amended, due on December 31, 2022 $ 52,995,840 $ (4,718,958 ) $ 48,276,882 $ 49,921,345 $ (5,911,600 ) $ 44,009,745
Delayed Draw Term Note, as amended, due on March 31, 2022 7,193,956 (783,313 ) 6,410,643 - - -
Payroll Protection Program Loan, scheduled to mature on April 6, 2022 5,702,725 - 5,702,725 - - -
Total $ 65,892,521 $ (5,502,271 ) $ 60,390,250 $ 49,921,345 $ (5,911,600 ) $ 44,009,745
~~9. Stockholders’ Equity~~on June 22, 2021.

~~Common Stock~~
~~The Company has the authority to issue 1,000,000,000 shares of common stock, $0.01 par value per share (further~~Further details as of the date these condensed consolidated financial statements were issued or were available to be issued are provided under the heading ~~Amendment to Certificate of Incorporation~~Long-term Debt in Note ~~13).~~13.
14
The following table summarizes the long-term debt:
As of March 31, 2021 As of December 31, 2020
Principal Balance (including accrued interest) Unamortized Discount and Debt Issuance Costs Carrying Value Principal Balance (including accrued interest) Unamortized Discount and Debt Issuance Costs Carrying Value
12% Second Amended Senior Secured Note, as amended, due on December 31, 2022 $ 57,984,974 $ (3,356,743 ) $ 54,628,231 $ 56,296,091 $ (3,739,690 ) $ 52,556,401
Delayed Draw Term Note, as amended, due on March 31, 2022 4,457,153 (47,883 ) 4,409,270 4,294,318 (359,172 ) 3,935,146
Paycheck Protection Program Loan, scheduled to mature April 6, 2022, however, fully forgiven on June 22, 2021 5,716,697 - 5,716,697 5,702,725 - 5,702,725
Total $ 68,158,824 $ (3,404,626 ) $ 64,754,198 $ 66,293,134 $ (4,098,862 ) $ 62,194,272
9. Stockholders’ Equity
Common Stock
The Company has the authority to issue 1,000,000,000 shares of common stock, $0.01 par value per share.

Common Stock Warrants

The Company issued warrants to purchase shares of the Company’s common stock to MDB Capital Group, LLC (the “MDB Warrants”), L2 Capital, LLC (the “L2 Warrants”), Strome Mezzanine Fund LP (the “Strome Warrants”), and B. Riley Financial, Inc. (the “B. Riley Warrants”) in connection with various financing transactions (collectively, the “Financing Warrants”).

The Financing Warrants outstanding and exercisable as of ~~June 30, 2020~~March 31, 2021 are summarized as follows:

Outstanding
Exercise Price Expiration Date
Classified as
Derivative
Liabilities
(Shares)

Classified
within Stockholders’ Equity
(Shares)
Total Exercisable (Shares)
MDB Warrants $ 0.20 November 4, 2021 - 327,490 327,490
Strome Warrants 0.50 June 15, 2023 1,500,000 - 1,500,000
B. Riley Warrants 1.00 October 18, 2025 875,000 - 875,000
MDB Warrants 1.15 October 19, 2022 - 119,565 119,565
MDB Warrants 2.50 October 19, 2022 - 60,000 60,000
Total outstanding and exercisable 2,375,000 507,055 2,882,055
Outstanding
Exercise Price Expiration Date Classified as Derivative Liabilities (Shares)
Classified
within Stockholders’ Equity
(Shares)
Total Exercisable (Shares)
MDB Warrants $ 0.20 November 4, 2021 - 327,490 327,490
Strome Warrants 0.50 June 15, 2023 1,500,000 - 1,500,000
B. Riley Warrants 1.00 October 18, 2025 875,000 - 875,000
MDB Warrants 1.15 October 19, 2022 - 119,565 119,565
MDB Warrants 2.50 October 19, 2022 - 60,000 60,000
Total outstanding and exercisable 2,375,000 507,055 2,882,055

The intrinsic value of exercisable but unexercised in-the-money stock warrants as of ~~June 30, 2020~~March 31, 2021 was ~~$372,371,~~$847,518, based on a fair market value of the Company’s common stock of ~~$0.65~~$0.91 per share on ~~June 30, 2020.~~March 31, 2021.

1815

~~10. Compensation Plans~~
10. Compensation Plans

The Company provides stock-based compensation in the form of (a) stock awards to employees and directors, comprised of restricted stock awards and restricted stock units (collectively referred to as the “Restricted Stock Awards”), (b) stock option grants to employees, directors and consultants (referred to as the “Common Stock Awards”) (c) stock option awards, restricted stock awards, unrestricted stock awards, and stock appreciation rights to employees, directors and consultants (collectively the “Common Equity Awards”), (d) stock option awards outside of the 2016 Stock Incentive Plan and 2019 Equity Incentive Plan to certain officers, directors and employees (referred to as the “Outside Options”), (e) common stock warrants to the Company’s ~~channel~~publisher partners (referred to as the ~~“Channel~~“Publisher Partner Warrants”), and (f) common stock warrants to ABG-SI, LLC (referred to as the “ABG Warrants”).

Stock-based compensation and equity-based expense charged to operations or capitalized during the three months ended March 31, 2021 and ~~six months ended June 30,~~ 2020 ~~and 2019~~ are summarized as follows:

Restricted Common Common Channel
Stock Stock Equity Outside Partner ABG
Awards Awards Awards Options Warrants Warrants Totals
During the Three Months Ended June 30, 2020
Cost of revenue $ 35,750 $ 27,970 $ 1,073,674 $ 1,967 $ 27,623 $ - $ 1,166,984
Selling and marketing 298,187 23,783 701,925 43,489 - - 1,067,384
General and administrative 135,332 138,156 819,916 95,394 - 360,289 1,549,087
Total costs charged to operations 469,269 189,909 2,595,515 140,850 27,623 360,289 3,783,455
Capitalized platform development 75,709 80,608 341,642 1,652 - - 499,611
Total stock-based compensation $ 544,978 $ 270,517 $ 2,937,157 $ 142,502 $ 27,623 $ 360,289 $ 4,283,066

During the Three Months Ended June 30, 2019
Cost of revenue $ 26,526 $ 6,965 $ 131,057 $ 149 $ 6,561 $ - $ 171,258
Selling and marketing - 25,995 120,036 25,305 - - 171,336
General and administrative 859,222 395,087 931,393 44,695 - 67,307 2,297,704
Total costs charged to operations 885,748 428,047 1,182,486 70,149 6,561 67,307 2,640,298
Capitalized platform development 194,353 42,793 165,030 2,146 - - 404,322
Total stock-based compensation $ 1,080,101 470,840 $ 1,347,516 $ 72,295 $ 6,561 $ 67,307 $ 3,044,620

During the Six Months Ended June 30, 2020
Cost of revenue $ 73,326 $ 97,766 $ 2,083,266 $ 3,173 $ 35,662 $ - $ 2,293,193
Selling and marketing 597,402 59,511 1,380,204 98,867 - - 2,135,984
General and administrative 158,252 309,828 1,575,163 150,577 - 720,578 2,914,398
Total costs charged to operations 828,980 467,105 5,038,633 252,617 35,662 720,578 7,343,575
Capitalized platform development 145,992 121,765 597,643 4,263 - - 869,663
Total stock-based compensation $ 974,972 $ 588,870 $ 5,636,276 $ 256,880 $ 35,662 $ 720,578 $ 8,213,238

During the Six Months Ended June 30, 2019
Cost of revenue $ 61,901 $ 27,184 $ 131,057 $ 1,278 $ 18,909 $ - $ 240,329
Selling and marketing 34,393 47,940 120,036 77,251 - - 279,620
General and administrative 1,574,859 799,517 932,285 66,008 - 67,307 3,439,976
Total costs charged to operations 1,671,153 874,641 1,183,378 144,537 18,909 67,307 3,959,925
Capitalized platform development 332,309 72,785 165,030 2,146 - - 572,270
Total stock-based compensation $ 2,003,462 947,426 $ 1,348,408 $ 146,683 $ 18,909 $ 67,307 $ 4,532,195
19
Restricted Common Common Publisher
Stock Stock Equity Outside Partner ABG
Awards Awards Awards Options Warrants Warrants Totals
During the Three Months Ended March 31, 2021
Cost of revenue $ 24,460 $ 127,063 $ 1,290,374 $ 2,041 $ - $ - $ 1,443,938
Selling and marketing - 5,038 971,513 74,806 - - 1,051,357
General and administrative 3,445 117,327 2,126,615 - - 356,330 2,603,717
Total costs charged to operations 27,905 249,428 4,388,502 76,847 - 356,330 5,099,012
Capitalized platform development 4,823 2,720 300,034 1,618 - - 309,195
Total stock-based compensation $ 32,728 $ 252,148 $ 4,688,536 $ 78,465 $ - $ 356,330 $ 5,408,207

During the Three Months Ended March 31, 2020
Cost of revenue $ 37,576 $ 69,796 $ 1,009,592 $ 1,206 $ 8,039 $ - $ 1,126,209
Selling and marketing 299,215 35,728 678,279 55,378 - - 1,068,600
General and administrative 22,920 171,672 755,247 55,183 - 360,289 1,365,311
Total costs charged to operations 359,711 277,196 2,443,118 111,767 8,039 360,289 3,560,120
Capitalized platform development 70,283 41,157 256,001 2,611 - - 370,052
Total stock-based compensation $ 429,994 318,353 $ 2,699,119 $ 114,378 $ 8,039 $ 360,289 $ 3,930,172

Unrecognized compensation expense and expected weighted-average period to be recognized related to the stock-based compensation awards and equity-based awards as of ~~June 30, 2020~~March 31, 2021 was as follows:

Restricted Common Common Publisher
Stock Stock Equity Outside Partner ABG
Restricted Stock Awards Common Stock Awards Common Equity Awards Outside Options Channel Partner Warrants ABG Warrants Totals Awards Awards Awards Options Warrants Warrants Totals
Unrecognized compensation expense $ 902,489 $ 1,230,827 $ 26,166,996 $ 464,309 $ 1,011 $ 3,942,598 $ 32,708,230 $ 48,891 $ 226,834 $ 67,977,275 $ 292,584 $ - $ 2,857,773 $ 71,403,357
Weighted average period expected to be recognized (in years) �� 0.69 0.87 2.27 1.68 0.25 2.88 2.24
Expected weighted-average period expected to be recognized (in years) 0.70 0.44 2.46 0.94 - 2.13 2.43
16

~~11. Revenue Recognition~~Further details as of the date these condensed consolidated financial statements were issued or were available to be issued are provided under the heading Compensation Plans in Note 13.
11. Revenue Recognition

Disaggregation of Revenue

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

Three Months Ended
June 30,

Six Months Ended
June 30,
As of March 31,
2020 2019 2020 2019 2021 2020
Revenue by product line:
Advertising $ 7,541,616 $ 5,670,712 $ 19,379,600 $ 11,808,066 $ 11,074,425 $ 11,837,984
Digital subscriptions 6,089,450 56,021 11,626,697 107,934 7,084,481 5,537,247
Magazine circulation 8,629,166 - 21,166,698 - 14,710,023 12,537,532
Other 830,708 43,550 1,330,798 128,246 746,552 500,090
Total $ 23,090,940 $ 5,770,283 $ 53,503,793 $ 12,044,246 $ 33,615,481 $ 30,412,853
Revenue by geographical market:
United States $ 22,049,636 $ 5,770,283 $ 51,331,766 $ 12,044,246 $ 32,528,417 $ 29,282,130
Other 1,041,304 - 2,172,027 - 1,087,064 1,130,723
Total $ 23,090,940 $ 5,770,283 $ 53,503,793 $ 12,044,246 $ 33,615,481 $ 30,412,853
Revenue by timing of recognition:
At point in time $ 17,001,490 $ 5,714,262 $ 41,877,096 $ 11,936,312 $ 26,531,000 $ 24,875,606
Over time 6,089,450 56,021 11,626,697 107,934 7,084,481 5,537,247
Total $ 23,090,940 $ 5,770,283 $ 53,503,793 $ 12,044,246 $ 33,615,481 $ 30,412,853
20
Contract Balances

The timing of the Company’s performance under its various contracts often differs from the timing of the customer’s payment, which results in the recognition of a contract asset or a contract liability. A contract asset is recognized when a good or service is transferred to a customer and the Company does not have the contractual right to bill for the related performance obligations. A contract liability is recognized when consideration is received from the customer prior to the transfer of goods or services.
The following table provides information about contract balances:

As of As of
June 30, 2020 December 31, 2019 March 31, 2021 December 31, 2020
Unearned revenue (short-term contract liabilities):
Digital subscriptions 12,688,136 8,634,939 $ 16,815,476 $ 15,039,331
Magazine circulation 42,731,290 23,528,148 49,047,713 46,586,345
$ 55,419,426 $ 32,163,087 $ 65,863,189 $ 61,625,676
Unearned revenue (long-term contract liabilities):
Digital subscriptions $ 1,473,758 $ 478,557 $ 802,124 $ 593,136
Magazine circulation 13,135,330 30,478,154 27,297,916 22,712,961
Other 207,500 222,500 200,000 192,500
$ 14,816,588 $ 31,179,211 $ 28,300,040 $ 23,498,597
Unearned Revenue– Unearned revenue, also referred to as contract liabilities, include payments received in advance of performance under the contracts and are recognized as revenue over time. The Company records contract liabilities as unearned revenue on the consolidated balance sheets. Digital subscription and magazine circulation revenue of ~~$17,211,363~~$22,071,978 was recognized during the ~~six~~three months ended ~~June 30, 2020~~March 31, 2021 from unearned revenue at the beginning of the year.
17

During January and February of 2020, the Company modified certain digital and magazine subscription contracts that prospectively changed the frequency of the related issues required to be delivered on a yearly basis. The Company determined that the remaining digital content and magazines to be delivered are distinct from the digital content or magazines already provided under the original contract. As a result, the Company in effect established a new contract that included only the remaining digital content or magazines. Accordingly, the Company allocated the remaining performance obligations in the contracts as consideration from the original contract that has not yet been recognized as revenue.

21 12. Commitments and Contingencies
~~12. Commitments and Contingencies~~

Revenue Guarantees

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. For the three months ended ~~June 30,~~March 31, 2021 and 2020, ~~and 2019,~~ the Company recognized ~~Channel Partner~~publisher partner guarantees of ~~$2,628,477~~$1,763,357 and ~~$1,115,640, respectively. For the six months ended June 30, 2020 and 2019, the Company recognized Channel Partner guarantees of $5,002,564 and $2,370,632,~~$2,374,087, respectively.

Claims and Litigation

From time to time, the Company may be subject to claims and litigation arising in the ordinary course of business. The Company is not currently a party to any pending or threatened legal proceedings that it believes would reasonably be expected to have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

Liquidated Damages
The following table summarizes the contingent obligations with respect to the ~~Series J Preferred Stock~~ liquidated damages as of the date these condensed consolidated financial statements were issued or were available to be issued:

Registration rights damages $ 120,000
Public information failure damages 180,000
Accrued interest 19,903
$ 319,903
Registration Rights Damages Public Information Failure Damages Accrued Interest Balance
Series H Preferred Stock $ - $ 5,236 $ 93,575 $ 98,811
12% Convertible Debentures - - 36,320 36,320
Series I Preferred Stock - - 111,184 111,184
Series J Preferred Stock 240,000 240,000 108,059 588,059
Series K Preferred Stock - 661,680 11,221 672,901
Total $ 240,000 $ 906,916 $ 360,359 $ 1,507,275

~~13. Subsequent Events~~
13. Subsequent Events

The Company performed an evaluation of subsequent events through the date of filing of these condensed consolidated financial statements with the SEC. Other than the below described subsequent events, there were no material subsequent events which affected, or could affect, the amounts or disclosures on the condensed consolidated financial statements.

Compensation Plans
~~On December 15, 2020, the Company entered into an amendment for certain restricted stock awards and restricted stock units. Pursuant to the amendment:~~
● ~~the restricted stock awards would cease to vest and all unvested shares would be deemed unvested and forfeited, leaving an aggregate of 1,064,549 shares vested;~~
● the restricted stock units were modified to vest on December 31, 2020 and as of the close of business on December 31, 2020, each restricted stock unit was terminated and deemed forfeited, with no shares vesting thereunder; and
● subject to certain conditions, the Company agreed to purchase from certain key personnel the vested restricted stock awards, at a price of $4.00 per share in 24 equal monthly installments on the second business day of each calendar month beginning on January 4, 2021.
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On January 8, 2021, the board of directors (the “Board”) approved an amendment to certain option awards granted under the 2019 Equity Incentive Plan (the “2019 Plan”) to remove certain vesting conditions for the performance-based awards. In general, pursuant to the amendment:
● ~~the common stock options would vest with respect to one-third of the grant when the option holder completes one year of continuous service beginning on the grant date; and~~
● ~~the remaining common stock options would vest monthly over twenty-four months when the option holder completes each month of continuous service thereafter.~~
On February 18, 2021, the Board approved an amendment to the Company’s 2019 Plan to increase the number of shares of the Company’s common stock, available for issuance under the 2019 Plan from 85,000,000 shares to 185,000,000 shares.
On February 18, 2021, the Board approved up to an aggregate amount of 26,200,000 stock options to be made on or before March 18, 2021 for shares of the Company’s common stock to certain executive officers of the Company under the 2019 Plan. A total of 11,158,049 stock options were granted and designated as a non-qualified stock options, subject to certain terms and conditions.
On February 18, 2021, the Board approved the issuance of restricted stock units to certain executive officers of the Company under the 2019 Plan. A total of 26,048,781 restricted stock units were granted, subject to certain terms and conditions.

From ~~July 2020~~April 2021 through the date these condensed consolidated financial statements were issued or were available to be issued, the Company granted common stock options, restricted stock units and restricted stock awards totaling ~~77,157,799 (includes 11,158,049 stock options and 26,048,781 restricted stock units issued on February 28, 2021 as described above),~~6,153,053, all of which ~~77,157,799~~ remain outstanding.

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~~12% Convertible Debentures~~
Long-term Debt
On December 31, 2020, certain holders converted the 12% Convertible Debentures representing an aggregate of $18,104,949 of the then-outstanding principal and accrued but unpaid interest into 53,887,470 shares of the Company’s common stock at effective conversion per-share prices ranging from $0.33 to $0.40. Further, the Company repaid an aggregate of $1,130,903 of the 12% Convertible Debentures, including the then-outstanding principal and accrued interest in cash. As of December 31, 2020, there was no longer any principal or accrued but unpaid interest outstanding under the 12% Convertible Debentures. As a result of the conversion of certain 12% Convertible Debentures into shares of the Company’s common stock, the Company will no longer have an embedded derivative liability related to the conversion option features, buy-in features, and default remedy features and will recognize the fair value of such amount upon conversion as additional paid-in capital. Further, with respect to the conversion of the accrued interest into shares of the Company’s common stock, the Company will recognize a loss on conversion, as deemed appropriate, at the time of conversion.

12% Second Amended Senior Secured ~~Note~~Notes
– On ~~October 23, 2020,~~May 19, 2021, the Company entered into ~~Amendment No. 1~~an amendment to the second amended and restated note purchase agreement (“Amendment 1”2”) with BRF Finance Co., ~~pursuant to~~LLC, an affiliated entity of B. Riley Financial, Inc., in its capacity as agent for the purchasers and as purchaser, which ~~the maturity date of~~further amended the 12% Second Amended Senior Secured Notes, ~~was changed to December 31, 2022, subject to certain acceleration conditions.~~dated March 24, 2020, as amended. Pursuant to Amendment 1,2: (i) the interest ~~payable~~rate on the 12% Second Amended Senior Secured Notes ~~on September 30, 2020, December 31, 2020, March 31, 2021, June 30, 2021, September 30, 2021,~~decreased from a rate of 12% per annum to a rate of 10% per annum; and ~~December 31, 2021~~(ii) the Company agreed that within one (1) business day after receipt of cash proceeds from any issuance of equity interests, it will ~~be payable in-kind~~prepay the certain obligations in ~~arrears on~~an amount equal to such cash proceeds, net of underwriting discounts and commissions; provided, that, this mandatory prepayment obligation does not apply to any proceeds that the last day of such fiscal quarter. Alternatively, at the option of the holder, such interest amounts originally could have been paid in shares of “Series K Convertible Preferred Stock” (“Series K Preferred Stock”); however, after December 18, 2020, the date the Series K Preferred Stock converted intoCompany received from shares of the Company’s common stock ~~all such interest amounts can be paid in shares of~~issued pursuant to the ~~Company’s common stock based upon~~securities purchase agreement (as further described below under the ~~conversion rate specified for~~heading Common Stock) during the ~~Series K Preferred Stock (or $0.40).~~90-day period commencing on May 20, 2021.

The balance outstanding under the 12% Second Amended Senior Secured ~~Note~~Notes as of the date these condensed consolidated financial statements were issued or were available to be issued was approximately ~~$56.3~~$60.1 million, which included outstanding principal of approximately ~~$48.8~~$48.8 million, payment of in-kind interest of approximately ~~$4.2~~$10.8 million that the Company was permitted to add to the aggregate outstanding principal balance, and unpaid accrued interest of approximately ~~$3.3~~$0.5 million.
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Delayed Draw Term Note
– On ~~October 23, 2020,~~May 19, 2021, pursuant to Amendment 2, the ~~terms of Amendment 1, the maturity date of~~interest rate on the Delayed Draw Term Note ~~was changed~~decreased from ~~March 31, 2021 to March 31, 2022. Amendment 1 also provided that the holder, could originally elect, in lieu~~a rate of ~~receipt of cash for payment of all or any portion of the interest due or cash payments up~~15% per annum to a ~~certain conversion portion (as further described in Amendment 1)~~rate of the Delayed Draw Term Note, to receive shares of Series K Preferred Stock; however, after December 18, 2020, the date the Series K Preferred Stock converted into shares of the Company’s common stock, the holder may elect, in lieu of receipt of cash for such amounts, shares of the Company’s common stock based upon the conversion rate specified for the Series K Preferred Stock (or $0.40).10% per annum.

As of the date these condensed consolidated financial statements were issued or were available to be issued, $3,367,000, including $3,295,505 of principal amount of the Delayed Draw Term Note and $71,495 of accrued interest, had been converted into shares of our Series K Preferred Stock. The ~~aggregate principal amount~~balance outstanding under the Delayed Draw Term Note as of the date these condensed consolidated financial statements were issued or were available to be issued was approximately ~~$4.3~~$4.6 million, ~~(including~~which included outstanding principal of approximately $3.5 million, and payment of in-kind interest of approximately ~~$0.7~~$1.1 million ~~which~~that the Company was ~~added~~permitted to add to the aggregate outstanding ~~Delayed Draw Term Note balance).~~principal balance.
Paycheck Protection Program Loan – On June 22, 2021, the SBA authorized full forgiveness of $5,702,725 under the Paycheck Protection Program Loan; thus the Company will not need to make any payments on the Paycheck Protection Program Loan that JPMorgan Chase facilitates as an SBA lender. JPMorgan Chase will apply the forgiveness amount the SBA authorized, plus all accrued interest, to the Company’s Paycheck Protection Program Loan. The requirements under this program are established by the SBA. All requests for Paycheck Protection Program Loan forgiveness are subject to SBA eligibility.

Preferred Stock
~~Series H Preferred Stock –~~ Between August 14, 2020 and August 20, 2020, the Company entered into additional securities purchase agreements for the sale of “Series H Convertible Preferred Stock” (“Series H Preferred Stock”) with accredited investors, pursuant to which the Company issued 108 shares (after it rescinded the issuance of 2,145 shares that were deemed null and void and the purchase price was repaid to certain holders on October 28, 2020), at a stated value of $1,000 per share, which shares were initially convertible into 327,273 shares of the Company’s common stock at a conversion rate equal to the stated value divided by the conversion price of $0.33 per share, for aggregate gross proceeds of $130,896. The proceeds were used for working capital and general corporate purposes. The number of shares issuable upon conversion of the Series H Preferred Stock will be adjusted in the event of stock splits, stock dividends, combinations of shares and similar transactions. Each Series H Preferred Stock shall vote on an as-if-converted to common stock basis, subject to beneficial ownership blocker provisions and other certain conditions.
~~On September 21, 2020, an investor converted 300 shares of Series H Preferred Stock into 909,090 shares of the Company’s common stock.~~
On October 31, 2020, the Company issued 389 shares of Series H Preferred Stock to James Heckman at the stated value of $1,000, convertible into 1,178,787 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 shares of Series H Preferred Stock were issued in connection with the cancellation of promissory notes payable to Mr. Heckman in the aggregate outstanding principal amount of $389,000.
The shares of Series H Preferred Stock were subject to limitations on conversion into shares of the Company’s common stock until the date an amendment to the Company’s Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”), was filed and accepted with the State of Delaware that increases the number of authorized shares of its common stock to at least a number permitting all the Series H Preferred Stock to be converted in full (further details are provided under the heading ~~Amendment to Certificate of Incorporation~~).
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 commencing from the six (6) month anniversary date of issuance of the Series H Preferred Shares, then the Company will be obligated to pay Public Information Failure Damages (as further described in Note 14 to the audited consolidated financial statements for the year ended December 31, 2019) 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.
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~~Series J Preferred Stock –~~ On September 4, 2020, the Company closed on an additional “Series J Convertible Preferred Stock” (“Series J Preferred Stock”) issuance with two accredited investors, pursuant to which we issued an aggregate of 10,500 shares of Series J Preferred Stock at a stated value of $1,000 per share, initially convertible into 15,013,072 shares of our common stock at a conversion rate equal to the stated value divided by the conversion price of $0.70, for aggregate gross proceeds of $6,000,000, which was used for working capital and general corporate purposes. The number of shares issuable upon conversion of the Series J Preferred Stock will be adjusted in the event of stock splits, stock dividends, combinations of shares and similar transactions. Each share of Series J Convertible Preferred Stock shall vote on an as-if-converted to common stock basis, subject to certain conditions.
All of the shares of the Series J Preferred Stock converted automatically into shares of the Company’s common stock on December 18, 2020, the date the Company filed a Certificate of Amendment (the “Certificate of Amendment”) to the Certificate of Incorporation, which Certificate of Amendment increased the number of authorized shares of the Company’s common stock to at least a number that permitted all the Series J Preferred Stock, the “Series K Convertible Preferred Stock” (the “Series K Preferred Stock”), the “Series I Convertible Preferred Stock” (“Series I Preferred Stock”), and the Series H Preferred Stock, to be converted in full (further details are provided under the heading ~~Amendment to Certificate of Incorporation~~).
Pursuant to a registration rights agreement entered into in connection with the securities purchase agreements, 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 by no later than the 30th calendar day following the date the Company files its (a) Annual Reports on Form 10-K for the fiscal year ended December 31, 2018 and December 31, 2019, (b) all its required Quarterly Reports on Form 10-Q since the quarter ended September 30, 2018, through the quarter ended September 30, 2020, and (c) any Form 8-K Reports that the Company is required to file with the SEC; but in no event later than April 30, 2021 (the “Series J Filing Date”). The Company also committed to cause the registration statement to become effective by no later than 60 days after the Series J Filing Date (or, in the event of a full review by the staff of the SEC, 120 days following the Series J Filing Date). The registration rights agreement provides for Registration Rights Damages (as further described in Note 14 to the audited consolidated financial statements for the year ended December 31, 2019) upon the occurrence of certain events up to a maximum amount of 6% of the aggregate amount invested.
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 commencing from the six (6) month anniversary date of issuance of the Series J Preferred Shares, then the Company will be obligated to pay Public Information Failure Damages (as further described in Note 14 to the audited consolidated financial statements for the year ended December 31, 2019) 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.
~~Series K Preferred Stock~~ – On October 22, 2020, 20,000 authorized shares of the Company’s preferred stock were designated the Series K Preferred Stock. Between October 23, 2020 and November 11, 2020, the Company closed on several securities purchase agreements with accredited investors, pursuant to which the Company issued an aggregate of 18,042 shares of Series K Preferred Stock at a stated value of $1,000, initially convertible into 45,105,000 shares of the Company’s common stock at a conversion rate equal to the stated value divided by the conversion price of $0.40 per share, for aggregate gross proceeds of $18,042,000. The number of shares issuable upon conversion of the Series K Preferred Stock will be adjusted in the event of stock splits, stock dividends, combinations of shares and similar transactions. Each Series K Preferred Stock votes on an as-if-converted to common stock basis, subject to certain conditions.
In consideration for its services as placement agent, the Company paid B. Riley FBR, Inc. (“B. Riley FBR”) a cash fee of $560,500. The Company used approximately $3.4 million of the net proceeds from the financing to partially repay the Delayed Draw Term Note ~~and used approximately $2.6 million for payment on a prior investment, with the remainder of~~ ~~approximately $11.5 million for working capital and general corporate purposes.~~
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All of the shares of the Series K Preferred Stock converted automatically into shares of the Company’s common stock on December 18, 2020, the date the Company filed a the Certificate of Amendment to the Certificate of Incorporation, which Certificate of Amendment increased the number of authorized shares of the Company’s common stock to at least a number that permitted all the Series J Preferred Stock, the Series K Preferred Stock, the Series I Preferred Stock, and the Series H Preferred Stock, to be converted in full (further details are provided under the heading ~~Amendment to Certificate of Incorporation~~).
Pursuant to a registration rights agreement entered into in connection with the securities purchase agreements, the Company agreed to register the shares issuable upon conversion of the Series K Preferred Stock for resale by the investors. The Company committed to file the registration statement by no later than the 30th calendar day following the date the Company files its (a) Annual Reports on Form 10-K for the fiscal year ended December 31, 2018 and December 31, 2019, (b) all its required Quarterly Reports on Form 10-Q since the quarter ended September 30, 2018, through the quarter ended September 30, 2020, and (c) any Form 8-K Reports that the Company is required to file with the SEC; provided, however, if such 30th calendar day is on or after February 12, 2021, then such 30th calendar date shall be tolled until the 30th calendar day following the date that the Company files its Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (the “Series K Filing Date”). The Company also committed to cause the registration statement to become effective by no later than 90 days after the Series K Filing Date (or, in the event of a full review by the staff of the SEC, 120 days following the Series K Filing Date). The registration rights agreement provides for Registration Rights Damages (as further described in Note 14 to the audited consolidated financial statements for the year ended December 31, 2019) upon the occurrence of certain events up to a maximum amount of 6% of the aggregate amount invested.
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 commencing from the six (6) month anniversary date of issuance of the Series K Preferred Shares, then the Company will be obligated to pay Public Information Failure Damages (as further described in Note 14 to the audited consolidated financial statements for the year ended December 31, 2019) 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.
~~Series L Preferred Stock~~ – On May 4, 2021, ~~the Special Finance & Governance Committee (the “Special Committee”)~~a special committee of the Board of the Company adopted a Rights Agreement (i) to ensure that all stockholders of the Company receive fair and equal treatment in the event of a proposed takeover of the Company, (ii) to guard against two-tier or partial tender offers, open market accumulations, creeping stock accumulation programs and other tactics designed to gain control of the Company without paying all stockholders a fair and adequate price, including a sufficient premium for such controlling interest, (iii) to protect the Company and its stockholders from efforts to capitalize on market volatility and macroeconomic conditions to obtain control of the Company on terms that the Board determines are not in the best interests of the Company and its stockholders and (iv) to enhance the Board’s ability to negotiate with a prospective acquirer.
~~Also on May 4, 2021, the Special Committee~~ declared a dividend of one preferred stock purchase right ~~(each a “Right”)~~ to be paid to the stockholders of record at the close of business on May 14, 2021 for (i) each outstanding share of the Company’s common stock and (ii) each share of the Company’s common stock issuable upon conversion of each share of the Company’s Series H convertible preferred stock (the “Series H Preferred ~~Stock.~~Stock”). Each ~~Right~~preferred stock purchase right entitles the registered holder to purchase, subject to ~~the Rights Agreement,~~a rights agreement, from the Company one one-thousandth of a share of the Company’s newly created Series L Junior Participating Preferred Stock, par value $0.01 per share (the “Series L Preferred Stock”), at a price of $4.00, subject to certain adjustments. The Series L Preferred Stock will be entitled, when, as and if declared, to a preferential per share quarterly dividend payment equal to the greater of (i) $1.00 per share or (ii) 1,000 times the aggregate per share amount of all cash dividends, and 1,000 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions paid to the holders of the Company’s ~~Common Stock.~~common stock. The Series L Preferred Stock will be entitled to 1,000 votes on all matters submitted to a vote of the stockholders of the Company. In the event of any merger, consolidation or other transaction in which shares of the Company’s common stock are converted or exchanged, the Series L Preferred Stock will be entitled to receive 1,000 times the amount received per one share of the Company’s common stock.

19
~~Leases~~Common Stock

On ~~October 30, 2020,~~May 20, 2021 and May 25, 2021, the Company entered into securities purchase agreements with several accredited investors, pursuant to which the Company sold an aggregate of 21,435,718 shares of its common stock, at a per share price of $0.70 for aggregate gross proceeds of approximately $15.0 million in a private placement. On June 2, 2021, the Company entered into a ~~surrender~~securities purchase agreement with an accredited investor, pursuant to which the Company ~~effectively surrendered certain property located~~sold an aggregate of 7,142,857 shares of its common stock, at a per share price of $0.70 for gross proceeds of approximately $5.0 million in ~~New York, New York back~~a private placement that was in addition to the ~~landlord.~~ closings that occurred on May 20, 2021 and May 25, 2021 as referenced above. The Company intends to use the proceeds for general corporate purposes.
Pursuant to the ~~surrender agreement,~~registration rights agreements entered into in connection with the ~~security deposit of $500,000 held by the landlord and reflected within restricted cash on the condensed consolidated balance sheets was applied to the balance in arrears. In addition,~~securities purchase agreements, the Company agreed to ~~pay $68,868 per month~~register the shares of the Company’s common stock issued in the private placements. The Company committed to file the registration statement on the earlier of: (i) in the event the Company does not obtain a waiver from ~~January 1, 2021 through June 1, 2022~~the holders of the shares of the Company’s common stock that were issued upon the conversion of the Series K Preferred Stock (the “Waiver”), within ten (10) calendar days following the date the Company’s registration statement(s) on Form S-1, registering for resale shares of the Company’s common stock that were issued in connection with offerings prior to the date of the registration rights agreement (the “Prior Registration Statements”), is declared effective by the SEC; and (ii) in the event the Company does obtain the Waiver, the earliest practicable date on which the Company is permitted by the SEC guidance to file the initial registration statement following the filing of the Prior Registration Statements (the “Filing Date”). The Company also committed to cause the registration statement to become effective by no later than 90 days after the Filing Date (or, in the event of a full review by the staff of the SEC, 120 days following the Filing Date). The registration rights agreement provides for Registration Rights Damages upon the occurrence of certain events up to a maximum amount of 6% of the aggregate amount invested pursuant to the securities purchase agreements.
The securities purchase agreements included a provision that requires the Company to maintain its periodic filings with the SEC in order to satisfy the ~~remaining outstanding balance~~public information requirements under Rule 144(c) of ~~$1,239,624 owed~~the Securities Act. If the Company fails for any reason to satisfy the current public information requirement at any time during the period commencing from the twelve (12) month anniversary of the date the Company becomes current in its filing obligations and ending at such time that all of the common stock may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the current public information requirement under Rule 144(c) or (ii) has ever been an issuer described in Rule 144(i)(1)(i) or becomes an issuer in the future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a “Public Information Failure”) then, in addition to such purchaser’s other available remedies, the Company shall pay to a purchaser, in cash, as partial liquidated damages and not as a penalty, an amount in cash equal to one percent (1.0%) of the aggregate subscription amount of the purchaser’s shares then held by the purchaser on the day of a Public Information Failure and on every thirtieth (30th) day (pro-rated for periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public Information Failure is cured up to a maximum of five (5) 30-day periods and (b) such time that such public information is no longer required for the purchasers to transfer the shares pursuant to Rule 144. Public Information Failure Damages shall be paid on the earlier of (i) the last day of the calendar month during which such Public Information Failure Damages are incurred and (ii) the third (3rd) business day after the event or failure giving rise to the ~~landlord. The landlord agreed not~~Public Information Failure Damages is cured. In the event the Company fails to ~~charge any late fees,~~make Public Information Failure Damages in a timely manner, such Public Information Failure Damages shall bear interest ~~charges, or other penalties relating to~~at the ~~surrender~~rate of ~~the property.~~1.0% per month (prorated for partial months) until paid in full.
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~~Amendment to Certificate of Incorporation~~Heckman Stock Option Modifications

On ~~December 18, 2020,~~June 3, 2021, the Company ~~filed~~and Mr. Heckman, the Company’s former Chief Executive Officer, entered into an amendment to certain option grants under the Company’s 2016 Plan and 2019 Plan. The amendment to the 2016 Plan options, clarifies that the option qualifies as a ~~Certificate~~non-statutory stock option and that it remains exercisable for the remainder of ~~Amendment~~the term of the option. The amendment to ~~its Certificate~~the 2019 Plan options, clarifies that the option qualifies as a non-statutory stock option and that it remains exercisable for the remainder of ~~Incorporation~~the term of the option. The 2019 Plan amendment also changed the vesting schedule of the option to ~~increase the number~~provide for immediate vesting of ~~authorized~~2,000,000 shares of ~~its common stock from 100,000,000 shares~~options, with the remainder of the options being subject to ~~1,000,000,000 shares. As a result, as~~performance-based vesting that is tied to the price of ~~December 18, 2020,~~ the ~~Company has a sufficient number of authorized but unissued shares of its common stock available for issuance required under all of its securities that are convertible into shares of its~~Company’s common stock.

~~As a result~~Acquisition of College Spun Media Incorporated
On June 4, 2021, the Company acquired all of the ~~increase~~issued and outstanding shares of capital stock of College Spun Media Incorporated for an aggregate of $11.0 million in ~~authorized~~cash and ~~unissued~~the issuance of an aggregate of 4,285,714 restricted shares of the Company’s common stock, ~~on December 18, 2020, all~~with one-half of the ~~Series I Preferred Stock, Series J Preferred Stock (including~~ shares ~~issued subsequent~~vesting on the first anniversary of the closing date and the remaining one-half of the shares vesting on the second anniversary of the closing date. The cash payment consists of: (i) $10.8 million paid at closing (additional cash paid at closing of $0.8 million represents adjusted cash pursuant to ~~June 30, 2020~~the agreement), and (ii) $0.5 million to be paid on the first anniversary of the closing and $0.5 million to be paid on the second anniversary date of the closing, subject to a customary working capital adjustment based on cash and accounts receivable as ~~described above) and Series K Preferred Stock (including shares issued subsequent to June 30, 2020 as described above), were converted into~~of the closing date. The vesting of shares of the Company’s common stock ~~accordingly,~~is subject to the ~~Company will recognize a beneficial conversion feature, as deemed appropriate, at the time~~continued employment of ~~conversion.~~certain selling employees.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations for the ~~six~~three months ended ~~June 30,~~March 31, 2021 and 2020 ~~and 2019~~ should be read together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report and in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, ~~2019~~2020 included in the Company’s Annual Report on Form 10-K filed with the SEC on ~~April 9,~~August 16, 2021. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of a number of factors, including those set forth above. We caution that assumptions, expectations, projections, intentions or beliefs about future events may, and often do, vary from actual results and the differences can be material. Please see “Forward-Looking Statements.”

Overview

We operate a best-in-class technology platform empowering premium publishers who impact, inform, educate and entertain. We operate a significant portion of the media businesses for Sports Illustrated (“Sports Illustrated”), own and operate TheStreet, Inc. (the “TheStreet”), and power more than 250 independent ~~brands including History, Maxim, and Biography. Our~~brands. The Maven technology platform (the “Maven Platform”) provides digital publishing, distribution, and monetization capabilities ~~to our own~~for the Sports Illustrated and TheStreet ~~media~~ businesses as well as ~~to the~~a coalition of independent, professionally managed, online media publishers ~~(referred~~(each a “Publisher Partner”). Each Publisher Partner joins the media-coalition by invitation-only and is drawn from premium media brands and independent publishing businesses. Publisher Partners publish content and oversee an online community for their respective sites, leveraging our proprietary technology platform to asengage the ~~“Channel Partners”).~~collective audiences within a single network. Generally, ~~the Channel~~Publisher Partners are independently owned, strategic partners who receive a share of revenue from the interaction with their content. When they join, we believe Publisher Partners will benefit from the proprietary technology of the Maven Platform, techniques and relationships. Advertising revenue may improve due to the scale we have achieved by combining all Publisher Partners onto a single platform and a large and experienced sales organization. They may also benefit from our membership marketing and management systems, ~~to further~~which we believe will enhance their revenue. Additionally, we believe the lead brand within each vertical creates a halo benefit for all Publisher Partners in the vertical while each of them adds to the breadth and quality of content. While they benefit from these critical performance improvements they also may save substantially in costs of technology, infrastructure, advertising sales, and member marketing and management.

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Our growth strategy is to continue to expand by adding new premium publishers with high quality brands and content either as independent ~~Channel~~Publisher Partners or by acquiring publishers as owned and operated entities. By adding premium content brands, we will further expand the scale of the Maven Platform, improve monetization effectiveness in both advertising and subscription revenues, and enhance the attractiveness to consumers and advertisers.

Liquidity and Capital Resources

As of ~~June 30, 2020,~~March 31, 2021, our principal sources of liquidity consisted of cash of approximately ~~$2.3~~$4.5 million. As of the issuance date of our accompanying condensed consolidated financial statements for the three ~~and six~~ months ended ~~June 30, 2020,~~March 31, 2021, we had also raised funds from the issuance of ~~convertible preferred~~common stock ~~and from loan proceeds~~ of approximately ~~$20.8~~$20.0 million, in addition to the use of additional proceeds from our working capital facility with FastPay, all of which are discussed in greater detail below in the section entitled “Future Liquidity.”

We During the three months ended March 31, 2021, wecontinued to be focused on growing our existing operations and seeking accretive and complementary strategic acquisitions as part of our growth strategy. We believed, that with additional sources of liquidity and the ability to raise additional capital or incur additional indebtedness to supplement our then internal projections, we would be able to execute our growth plan and finance our working capital requirements.

We have financed our working capital requirements since inception through issuances of equity securities and various debt financings. Our working capital deficit as of ~~June 30, 2020 and~~March 31, 2021and December 31, ~~2019~~2020 was as follows:

As of
June 30, 2020 December 31, 2019
Current assets $ 42,054,457 $ 48,160,360
Current liabilities (104,516,679 ) (87,541,031 )
Working capital deficit (62,462,222 ) (39,380,671 )
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As of
March 31, 2021 December 31, 2020
Current assets $ 71,709,304 $ 73,846,465
Current liabilities (115,605,281 ) (107,562,825 )
Working capital deficit (43,895,977 ) (33,716,360 )

As of ~~June 30, 2020,~~March 31, 2021, we had a working capital deficit of approximately ~~$62.5~~$43.9 million, as compared to approximately ~~$39.4~~$33.7 million as of December 31, ~~2019,~~2020, consisting of approximately ~~$42.1~~$71.7 million in total current assets and approximately ~~$104.5~~$115.6 million in total current liabilities. Included in current assets as of ~~June 30, 2020~~March 31, 2021 was approximately ~~$1.0~~$0.5 million of restricted cash. Also included in our working capital deficit are non-cash current liabilities, consisting of approximately ~~$1.3~~$1.8 million of warrant ~~derivative liabilities and approximately $9.0 million of embedded~~ derivative liabilities, leaving a working capital deficit that requires cash payments of approximately ~~$53.2~~$42.6 million.

Six Months Ended June 30,
2020 2019
Net cash used in operating activities $ (17,420,685 ) $ (47,083,581 )
Net cash used in investing activities (3,441,593 ) (17,505,657 )
Net cash provided by financing activities 14,664,786 75,332,302
Net (decrease) increase in cash, cash equivalents, and restricted cash $ (6,197,492 ) $ 10,743,064
Cash, cash equivalents, and restricted cash, end of period $ 3,275,598 $ 13,270,353
Our cash flows during the three months ended March 31, 2021 and 2020 consisted of the following:
Three Months Ended March 31,
2021 2020
Net cash used in operating activities $ (1,511,242 ) $ (10,153,653 )
Net cash used in investing activities (965,492 ) (2,028,294 )
Net cash (used in) provided by financing activities (2,032,404 ) 11,246,433
Net decrease in cash, cash equivalents, and restricted cash $ (4,509,138 ) $ (935,514 )
Cash, cash equivalents, and restricted cash, end of period $ 5,025,543 $ 8,537,576

For the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021, net cash used in operating activities was approximately ~~$17.4~~$1.5 million, consisting primarily of: ~~(i)~~ approximately ~~$56.1~~$38.0 million of cash received from customers (including payments received in advance of performance obligations); less ~~(ii) less~~(i) approximately ~~$73.1~~$39.2 million of cash paid (a) to employees, ~~channel partners,~~Publisher Partners, expert contributors, suppliers, and vendors, and (b) for revenue share arrangements and professional services; and ~~less (iii)~~(ii) approximately $0.3 million of cash paid for interest; as compared to the ~~six months~~year ended ~~June 30, 2019,~~March 31, 2020, where net cash used in operating activities was approximately ~~$47.1~~$10.2 million, consisting primarily of: ~~(i)~~ approximately ~~$15.9~~$29.2 million of cash received from customers (including payments received in advance of performance obligations); less ~~(ii)~~(y) approximately ~~$62.2~~$39.1 million of cash paid (a) to employees, ~~channel partners,~~Publisher Partners, suppliers, and vendors, and (b) for revenue share arrangements, advance of royalty fees and professional services; and ~~less (iii)~~(z) approximately ~~$0.7~~$0.2 million of cash paid for interest.

23
For the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021, net cash used in investing activities was approximately ~~$3.4~~$1.0 million, consisting primarily of: (i) approximately $0.1 million for property and equipment; and (ii) approximately $0.9 million for capitalized costs for our Maven Platform; as compared to the three months ended March 31, 2020, where net cash used in investing activities was approximately $2.0 million consisting primarily of: (x) approximately $0.3 million for the acquisition of a business; ~~(ii)~~(y) approximately ~~$1.1~~$0.9 million for ~~purchases of~~ property and equipment; and ~~(iii)~~(z) approximately $2.1 million for our capitalized cost for our Maven Platform; as compared to the six months ended June 30, 2019, where net cash used in investing activities was approximately $17.5 million, consisting primarily of (i) approximately $16.5 million for advance related to pending acquisition; (ii) and $1.0$0.9 million for capitalized costs for our Maven Platform.

For the ~~six~~three months ended ~~June 30,~~March 31, 2021, net cash used by financing activities was approximately $2.0 million, consisting primarily of: (i) approximately $1.8 million from repayment under our line of credit; and (ii) approximately $0.3 million in payments of restricted stock liabilities; as compared to the three months ended March 31, 2020, where net cash provided by financing activities was approximately ~~$14.7~~$11.2 million, consisting primarily of: ~~(i)~~(x) approximately ~~$11.7~~$6.0 million in net proceeds from the Delayed Draw Term ~~Note and PPP Loan; less (ii)~~Note; (y) approximately ~~$3.2~~$5.4 million ~~in repayments of~~from borrowing under our line of credit; and ~~(iii)~~less (z) approximately ~~$0.3~~$0.2 million in payments for ~~taxes relating to repurchase~~tax withholdings on the net settlement of restricted shares; as compared to the six months ended June 30, 2019, where net cash provided by financing activities was approximately $75.3 million, consisting primarily of: (i) approximately $13.6 million in net proceeds from the issuance of Series I Preferred Stock; (ii) approximately $2.0 million in gross proceeds from 12% Convertible Debentures; (iii) approximately $59.8 million in proceeds from issuance of long-term debt (12% Amended Senior Secured Notes) net of repayments and debt issuance costs; and less (iv) approximately $0.1 million in payments for taxes related to repurchase of restricted common stock; (v) approximately $0.4 million in repayment of officer promissory notes; and (vi) approximately $0.4 million in repayments of our line of credit.share awards.

Future Liquidity

From ~~July~~April 1, ~~2020~~2021 to the issuance date of our accompanying ~~condensed~~ consolidated financial statements for the three ~~and six~~ months ended ~~June 30, 2020,~~March 31, 2021, we continued to incur operating losses and negative cash flow from operating and investing activities. We ~~have~~ raised approximately ~~$20.8~~$20.0 million in net proceeds during May 2021 pursuant to the sale and issuances of ~~convertible preferred stock.~~shares of our common stock in a private placement offering. Our cash balance as of the ~~issuance~~ date ofour accompanying ~~condensed~~ consolidated financial statements for the three ~~and six~~ months ended ~~June 30, 2020~~March 31, 2021 were issued or were available to be issued was approximately ~~$2.4~~$6.8 million.

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~~The table below summarizes the equity financings through the issuance date of our accompanying condensed consolidated financial statements:~~
Series H Preferred Stock $ 130,000
Series J Preferred Stock 6,000,000
Series K Preferred Stock 14,675,000
Total $ 20,805,000
Results of Operations

Three Months Ended ~~June 30,~~March 31, 2021 and 2020 ~~and 2019~~
Three Months Ended June 30, 2020 versus 2019 Three Months Ended March 31, 2021 versus 2020
2020 2019 $ Change % Change 2021 2020 $ Change % Change
Revenue $ 23,090,940 $ 5,770,283 $ 17,320,657 300.2 % $ 33,615,481 $ 30,412,853 $ 3,202,628 10.5 %
Cost of revenue 24,874,179 5,487,172 19,387,007 353.3 % 28,208,372 26,738,833 1,469,539 5.5 %
Gross profit (loss) (1,783,239 ) 283,111 (2,006,350 ) -729.9 %
Gross profit 5,407,109 3,674,020 1,733,089 47.2 %
Operating expenses
Selling and marketing 8,409,343 1,451,101 6,958,242 479.5 % 17,528,709 9,359,938 8,168,771 87.3 %
General and administrative 7,270,511 5,871,015 1,399,496 23.8 % 5,638,830 10,410,205 (4,771,375 ) -45.8 %
Depreciation and amortization 4,127,126 107,637 4,019,489 3,734.3 % 3,963,234 4,096,680 (133,446 ) -3.3 %
Total operating expenses 19,806,980 7,429,753 12,377,227 166.6 % 27,130,773 23,866,823 3,263,950 13.7 %
Loss from operations (21,590,219 ) (7,146,642 ) (14,443,577 ) 202.1 % (21,723,664 ) (20,192,803 ) (1,530,861 ) 7.6 %
Total other (expense) income (1,571,110 ) (3,438,919 1,867,809 -54.3 %
Total other (expense) (3,739,641 ) (2,583,821 ) (1,155,820 ) 44.7 %
Loss before income taxes (23,161,329 ) (10,585,561 ) (12,575,768 ) 118.8 % (25,463,305 ) (22,776,624 ) (2,686,681 ) 11.8 %
Income taxes - - - 0.0 % - - - 0.0 %
Net loss $ (23,161,329 ) $ (10,585,561 ) $ (12,575,768) 118.8 % $ (25,463,305 ) $ (22,776,624 ) $ (2,686,681 ) 11.8 %
Basic and diluted net loss per common share $ (0.59 ) $ (0.30 ) $ (0.29 ) 96.9 % $ (0.11 ) $ (0.59 ) $ 0.48 -81.4 %
Weighted average number of shares outstanding – basic and diluted 39,217,524 35,556,188 3,661,336 10.3 %
Weighted average number of common shares outstanding – basic and diluted 230,033,140 38,643,277 191,122,262 495.3 %

For the three months ended ~~June 30, 2020,~~March 31, 2021, the total net loss was approximately ~~$23.2~~$25.5 million. The total net loss increased by approximately ~~$12.6~~$2.7 million as compared to the three months ended ~~June 30, 2019~~March 31, 2020, which had a net loss of approximately ~~$10.6~~$22.8 million. The primary reasons for the increase in the total net loss is that our operations continued to ~~rapidly~~ expand during the three months ended June 30, 2020, as they did in the comparable period in 2019. In particular, during the three months ended June 30, 2020 we operated our Sports Illustrated media business that we acquired after June 30, 2019. For the three months ended June 30, 2019, we operated our legacy business and also our previously acquired businesses that included HubPages, Inc. (“HubPages”) and Say Media, Inc. (“Say Media”).March 31, 2021. The basic and diluted net loss per common share for the three months ended ~~June 30, 2020~~March 31, 2021 of ~~$0.59 increased~~$0.11 decreased from ~~$0.30~~$0.59 for the three months ended ~~June 30, 2019,~~March 31, 2020, primarily because of our net loss per common share ~~increased~~decreased along with the increase of the daily weighted average shares outstanding to ~~39,217,524~~230,033,140 shares from ~~35,556,188~~38,643,277 shares.

Our growth strategy is principally focused on adding new publisher partners to our Maven Platform. In addition, if the right opportunity exists, we would consider also acquiring related online media, publishing and technology businesses by merger or acquisition transactions. This combined growth strategy expanded the scale of unique users interacting on our Maven Platform with increased revenues during the three months ended ~~June 30, 2020.~~March 31, 2021. We expect revenues increases in subsequent periods will come from organic growth in operations, addition of more publisher partners, and mergers and acquisitions.
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Revenue

The following table sets forth revenue, cost of revenue, and gross ~~(profit) loss:~~profit:

Three Months Ended June 30, 2020 versus 2019 Three Months Ended March 31, 2021 versus 2020
2020 2019 Change % Change 2021 2020 Change % Change
(percentage reflect cost of revenue as a percentage of total revenue) (percentage reflect cost of revenue as a percentage of total revenue)
Revenue $ 23,090,940 100.0 % $ 5,770,283 100.0 % $ 17,320.657 300.2 % $ 33,615,481 100.0 % $ 30,412,853 100.0 % $ 3,202,628 10.5 %
Cost of revenue 24,874,179 107.7 % 5,487,172 95.1 % 19,387,007 353.3 % 28,208,372 83.9 % 26,738,833 87.9 % 1,469,539 5.5 %
Gross profit $ (1,783,239 ) -7.7 % $ 283,111 4.9 % $ (2,066,350 ) -729.9 % $ 5,407,109 16.1 % $ 3,674,020 12.1 % $ 1,733,089 47.2 %

For the three months ended ~~June 30, 2020,~~March 31, 2021 we had revenue of approximately ~~$23.1~~$33.6 million, as compared to revenue of approximately ~~$5.8~~$30.4 million for the three months ended ~~June 30, 2019.~~March 31, 2020.

The following table sets forth revenue by product line and the corresponding percent of total revenue:

Three Months Ended June 30, 2020 versus 2019
2020 2019 Change % Change
(percentages reflect product line as a percentage of total revenue)
Advertising $ 7,541,616 32.7 % $ 5,670,712 98.3 % $ 1,870,904 32.4 %
Digital subscriptions 6,089,450 26.4 % 56,021 1.0 % 6,033,429 104.6 %
Magazine circulation 8,629,166 37.4 % - 0.0 % 8,629,166 149.5 %
Other 830,708 3.6 % 43,550 0.8 % 787,158 13.6 %
Total revenue $ 23,090,940 100.0 % $ 5,770,283 100.0 % $ 17,320,657 300.2 %
Three Months Ended March 31, 2021 versus 2020
2021 2020 Change % Change
(percentages reflect product line as a percentage of total revenue)
Advertising $ 11,074,425 32.9 % $ 11,837,984 38.9 % $ (763,559 ) -2.5 %
Digital subscriptions 7,084,481 21.1 % 5,537,247 18.2 % 1,547,234 5.1 %
Magazine circulation 14,710,023 43.8 % 12,537,532 41.2 % 2,172,491 7.1 %
Other 746,552 2.2 % 500,090 1.6 % 246,462 0.8 %
Total revenue $ 33,615,481 100.0 % $ 30,412,853 100.0 % $ 3,202,628 10.5 %

For the three months ended ~~June 30, 2020,~~March 31, 2021, the primary sources of revenue were as follows: (i) advertising of approximately ~~$7.5~~$11.1 million; (ii) digital subscriptions of approximately ~~$6.1~~$7.1 million; (iii) magazine circulation of approximately ~~$8.6~~$14.7 million; and (iv) approximately $0.8 million from other ~~revenue of approximately $0.9 million.~~revenue. Our advertising revenue decreased by approximately $0.8 million in the three months ended March 31, 2021 due to decreased revenue in our legacy business. Our digital subscriptions increased by approximately ~~$1.9~~$1.5 million in the three months ended March 31, 2021 due to additional revenue of approximately ~~$1.4~~$2.5 million generated by TheStreet ~~and~~offset by approximately ~~$3.6~~$1.0 million decrease in our Sports Illustrated media business. Our magazine circulation increased by approximately $2.2 million in the three months ended March 31, 2021 generated by our Sports Illustrated media business. Our other revenue increased by approximately $0.2 million in the three months ended March 31, 2021 due to additional revenue of approximately $0.1 million generated by our Sports Illustrated media business and approximately ~~$3.1~~$0.1 million ~~decrease in~~by our legacy business. Our digital subscriptions increased by approximately $6.0 million, due to additional revenue of approximately $5.4 million generated by TheStreet and approximately $0.5 million generated by our Sports Illustrated media business. Our magazine circulation contributed approximately $8.6 million as a result of the Sports Illustrated media business acquired during the fourth quarter of 2019.

Cost of Revenue
For the three months ended ~~June 30,~~March 31, 2021 and 2020, ~~and 2019,~~ we recognized cost of revenue of approximately ~~$24.9~~$28.2 million and ~~$5.5~~approximately $26.7 million, respectively. The increase of approximately ~~$19.4~~$1.5 million in cost of revenue during the three months ended March 31, 2021 is primarily from: (i) our ~~Channel~~Publisher Partner guarantees and revenue share payments of approximately ~~$1.9~~$1.0 million; (ii) payroll, ~~stock based~~stock-based compensation, and related expenses for customer support, technology maintenance, and occupancy costs of related personnel of approximately ~~$7.5~~$2.6 million; (iii) amortization of our Maven Platform of approximately $0.9 million (which includes our Maven Platform spending and amortization related to acquired developed technology from our acquisitions); (iv) royalty fees of approximately $3.8 million; (v) hosting, bandwidth, and software licensing fees of approximately ~~$0.5~~$0.1 million; ~~(vi)~~and (iv) amortization of our Maven Platform of approximately $0.1 million; less (y) printing, distribution, and fulfillment costs of approximately ~~$3.2 million; (vii) fees paid for data analytics~~$2.2 million, and ~~to other outside service providers of approximately $0.4 million; and (viii)~~(z) other costs of revenue of approximately ~~$1.4~~$0.1 million.

For the three months ended ~~June 30, 2020,~~March 31, 2021, we capitalized costs related to our Maven Platform of approximately ~~$1.7~~$1.2 million, as compared to approximately ~~$0.9~~$0.6 million for the three months ended ~~June 30, 2019.~~March 31, 2020. For the three months ended ~~June 30, 2020,~~March 31, 2021, the capitalization of our Maven Platform consisted ofof: (i) approximately ~~$1.2~~$0.9 million in payroll and related expenses, including taxes and ~~benefits,~~benefits; (ii) approximately ~~$0.5~~$0.3 million in stock-based compensation for related personnel, and (iii) amortization of approximately $2.2 million.

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Operating Expenses

The following table sets forth operating expenses and the corresponding percentage of total revenue:

Three Months Ended June 30, 2020 versus 2019
2020 2019 Change % Change
(percentages reflect expense as a percentage of total revenue)
Selling and marketing $ 8,409,343 36.4 % $ 1,451,101 25.1 % $ 6,958,242 93.7 %
General and administrative 7,270,511 31.5 % 5,871,015 101.7 % 1,399,496 18.8 %
Depreciation and amortization 4,127,126 17.9 % 107,637 1.9 % 4,019,489 54.1 %
Total operating expenses $ 19,806,980 $ 7,429,753 $ 12,377,227 166.6 %
Three Months Ended March 31, 2021 versus 2020
2021 2020 Change % Change
(percentages reflect expense as a percentage of total revenue)
Selling and marketing $ 17,528,709 52.1 % $ 9,359,938 30.8 % $ 8,168,771 26.9 %
General and administrative 5,638,830 16.8 % 10,410,205 34.2 % (4,771,375 ) -15.7 %
Depreciation and amortization 3,963,234 11.8 % 4,096,680 13.5 % (133,446 ) -0.4 %
Total operating expenses $ 27,130,773 $ 23,866,823 $ 3,263,950 13.7 %

Selling and Marketing. For the three months ended ~~June 30, 2020,~~March 31, 2021, we incurred selling and marketing costs of approximately ~~$8.4~~$17.5 million, as compared to approximately ~~$1.5~~$9.4 million for the three months ended ~~June 30, 2019.~~March 31, 2020. The increase in selling and marketing ~~cost~~costs of approximately ~~$7.0~~$8.2 million is primarily from payroll of selling and marketing account management support teams, along with the related benefits and stock-based compensation of approximately ~~$2.6~~$2.4 million; circulation costs of approximately ~~$1.6~~$6.7 million; less (i) advertising costs of approximately ~~$1.6~~$0.5 million; and (ii) other selling and marketing related costs of approximately ~~$0.9~~$0.4 million.

General and Administrative. For the three months ended ~~June 30, 2020,~~March 31, 2021, we incurred general and administrative costs of approximately ~~$7.3~~$5.6 million from payroll and related expenses, professional services, occupancy costs, stock-based compensation of related personnel, depreciation and amortization, and other corporate expense, as compared to approximately ~~$5.9~~$10.4 million for the three months ended ~~June 30, 2019.~~March 31, 2020. The ~~increase~~decrease in general and administrative expenses of approximately ~~$1.4~~$4.8 million is primarily from our ~~increase~~decrease in ~~headcount,~~payroll, along with the related benefits and ~~stock-based compensation~~stock-compensation of approximately ~~$0.1~~$4.4 million; facilities costs of approximately $0.2 million; conferences costs of approximately $0.2 million; and other general corporate expenses of approximately $0.3 million; and an increase in professional services, including accounting, legal and insurance of approximately ~~$0.7 million; facilities costs of approximately $0.4 million; and other general corporate expenses of approximately~~ $0.2 million.
Other ~~(Expense)~~(Expenses) Income

The following table sets forth other (expense) income:

Three Months Ended June 30, 2020 versus 2019 Three Months Ended March 31, 2021 versus 2020
2020 2019 Change % Change 2021 2020 Change % Change
(percentages reflect other expense (income) as a percentage of the total) (percentages reflect other expense (income) as a percentage of the total)
Change in valuation of warrant derivative liabilities $ 243,276 -15.5 % $ (166,075 ) 4.8 % $ 409,351 -11.9 % $ (665,036 ) 17.8 % $ 139,219 -5.4 % $ (804,255 ) 31.1 %
Change in valuation of embedded derivative liabilities 2,922,000 -186.0 % (1,396,000 ) 40.6 % 4,318,000 -125.6 % - 0.0 % 1,621,000 -62.7 % (1,621,000 ) 62.7 %
Interest expense (4,116,407 ) 262.0 % (1,876,054 ) 54.6 % (2,240,353 ) 65.1 % (2,819,971 ) 75.4 % (3,799,728 ) 147.1 % 979,757 -37.9 %
Interest income 1,640 -0.1 % 63 0.0 % 1,577 0.0 % - 0.0 % 1,743 -0.1 % (1,743 ) 0.1 %
Liquidated damages (621,619 ) 39.6 % (853 ) 0.0 % (620,766 ) 18.1 % (254,634 ) 6.8 % (546,055 ) 21.1 % 291,421 -11.3 %
Other income - 0.0 % - 0.0 % - 0.0 %
Total other (expense) $ (1,571,110 ) 100.0 % $ (3,438,919 ) 100.0 % $ 1,867,809 -54.3 % $ (3,739,641 ) 100.0 % $ (2,583,821 ) 100.0 % $ (1,155,820 ) 44.7 %

Change in Valuation of Warrant Derivative Liabilities. The change in valuation of warrant derivative liabilities for the three months ended ~~June 30, 2020~~March 31, 2021 was the result of the increase in the fair value of the warrant derivative liabilities as of March 31, 2021, as compared to the change in the valuation for the three months ended March 31, 2020 where the change was from a decrease in the fair value of the warrant derivative liabilities as of June 30, 2020, as compared to the change in the valuation of the three months ended June 30, 2019 where the change was from an increase in the fair value of the warrant derivative liabilities as of June 30, 2019.March 31, 2020.

Change in Valuation of Embedded Derivative Liabilities. ~~The~~There was no change in valuation of embedded derivative liabilities for the three months ended ~~June 30,~~March 31, 2021 since the underlying instrument related to the embedded derivative liabilities was settled in 2020, as compared to the change in the valuation for the three months ended March 31, 2020 where the change was ~~the result of the~~from a decrease in the fair value of the embedded derivative liabilities as of June 30, 2020, as compared to the change in the valuation of the three months ended June 30, 2019 where the change was from an increase in the fair value of the embedded derivative liabilities as of June 30, 2019.March 31, 2020.

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Interest Expense. We incurred interest expense of approximately ~~$4.1~~$2.8 million for the three months ended ~~June 30, 2020,~~March 31, 2021, as compared to approximately $3.8 million for the three months ended March 31, 2020. The decrease in interest expense of approximately $1.0 million is primarily from an approximately ~~$1.6~~$0.9 million decrease from the amortization of debt discount on notes payable; approximately ~~$2.3~~$0.2 million decrease of accrued interest; and an increase of approximately $0.1 million of other interest, as compared to approximately $1.9 million for the three months ended June 30, 2019, primarily from approximately $0.9 million from amortization of debt discount on notes payable; approximately $0.8 million of accrued interest; and approximately $0.2 million of other interest.

Liquidated Damages. We recorded ~~liquidated~~approximately $0.3 million in liquidating damages, ~~of approximately $0.6 million for~~including the accrued interest thereon, during the three months ended ~~June 30, 2020,~~March 31, 2021, primarily from the issuance of our 12% Convertible Debentures, Series H Preferred Stock, Series I convertible preferred stock (the “Series I Preferred Stock”), and Series J convertible preferred stock (the “Series J Convertible”) in fiscal 2020 since we determined that: (1) the registration statements registering for resale the shares of common stock issuable upon conversion of the 12% Convertible Debentures, Series H Preferred Stock, Series I Preferred Stock and Series J Preferred Stock issued during 2019. The liquidated damages were recognized because we determined that: (i) registration statements covering the shares of common stock issuable upon conversion under the aforementioned instruments would not be declared effective within the requisite time frame; and ~~(ii)~~(2) that we would not be able to ~~file~~become current in our periodic ~~reports in the requisite time frame~~filing obligations with the SEC in order to satisfy the public information requirements under the applicable securities purchase agreements.
~~Six Months Ended June 30, 2020 and 2019~~
Six Months Ended June 30, 2020 versus 2019
2020 2019 $ Change % Change
Revenue $ 53,503,793 $ 12,044,246 $ 41,459,547 344.2 %
Cost of revenue 51,613,012 11,139,737 40,473,275 363.3 %
Gross profit (loss) 1,890,781 904,509 986,272 109.0 %
Operating expenses
Selling and marketing 17,769,281 2,600,393 15,168,888 583.3 %
General and administrative 17,680,716 10,096,268 7,584,448 75.1 %
Depreciation and amortization 8,223,806 215,977 8,007,829 3,707.7 %
Total operating expenses 43,673,803 12,912,638 30,761,165 238.2 %
Loss from operations (41,783,022 ) (12,008,129 ) (30,718,255 ) 248.0 %
Total other expense (4,154,931 ) (7,512,412 ) 3,357,481 -44.7 %
Loss before income taxes (45,937,953 ) (19,520,541 ) (26,417,412 ) 135.3 %
Income taxes - - - 0.0 %
Net loss $ (45,937,953 ) $ (19,520,541 ) $ (26,417,412 ) 135.3 %
Basic and diluted net loss per common share $ (1.17 ) $ (0.55 ) $ (0.62 ) 113.2 %
Weighted average number of shares outstanding – basic and diluted 39,171,629 35,208,771 3,962,858 11.3 %
For the six months ended June 30, 2020, the total net loss was approximately $45.9 million. The total net loss increased by approximately $26.4 million as compared to the three months ended June 30, 2019 net loss of approximately $19.5 million. The primary reasons for the increase in the total net loss is that our operations continued to rapidly expand during the six months ended June 30, 2020 as they did in the comparable period in 2019. In particular, during the six months ended June 30, 2020 we operated our Sports Illustrated media business that we acquired after June 30, 2019. For the six months ended June 30, 2019, we operated our legacy business and also our previously acquired businesses that included HubPages and Say Media. The basic and diluted net loss per common share for the six months ended June 30, 2020 of $1.17 increased from $0.55 for the six months ended June 30, 2019, primarily because the weighted average basic and diluted shares increased as the net loss per common share increased along with the daily weighted average shares outstanding increase to 39,171,629 shares from 35,208,771 shares.
32
~~Revenue~~
~~The following table sets forth revenue, cost of revenue, and gross profit:~~
Six Months Ended June 30, 2020 versus 2019
2020 2019 Change % Change
(percentage reflect cost of revenue as a percentage of total revenue)
Revenue $ 53,503,793 100.0 % $ 12,044,246 100.0 % $ 41,459,547 344.2 %
Cost of revenue 51,613,012 96.5 % 11,139,737 92.5 % 40,473,275 363.3 %
Gross profit $ 1,890,781 3.5 % $ 904,509 7.5 % $ 986,272 109.0 %
~~For the six months ended June 30, 2020, we had revenue of approximately $53.5 million, as compared to revenue of approximately $12.0 million for the six months ended June 30, 2019.~~
~~The following table sets forth revenue by product line and the corresponding percent of total revenue:~~
Six Months Ended June 30, 2020 versus 2019
2020 2019 Change % Change
(percentages reflect product line as a percentage of total revenue)
Advertising $ 19,379,600 36.2 % $ 11,808,066 98.0 % $ 7,571,534 62.9 %
Digital subscriptions 11,626,697 21.7 % 107,934 0.9 % 11,518,763 95.6 %
Magazine circulation 21,166,698 39.6 % - 0.0 % 21,166,698 175.7 %
Other 1,330,798 2.5 % 128,246 1.1 % 1,202,552 10.0 %
Total revenue $ 53,503,793 100.0 % $ 12,044,246 100.0 % $ 41,459,547 344.2 %
For the six months ended June 30, 2020, the primary sources of revenue were as follows: (i) advertising of approximately $19.4 million; (ii) digital subscriptions of approximately $11.6 million; (iii) magazine circulation of approximately $21.2 million; and (iv) other revenue of approximately $1.3 million. Our advertising revenue increased by approximately $7.6 million, due to additional revenue of approximately $2.4 million generated by TheStreet, approximately $9.4 million generated by our Sports Illustrated media business, and approximately $4.2 million decrease in our legacy business. Our digital subscriptions increased by approximately $11.5 million, due to additional revenue of approximately $9.8 million generated by TheStreet and approximately $1.5 million generated by our Sports Illustrated media business. Our magazine circulation contributed approximately $21.2 million as a result of the Sports Illustrated media business acquired during the fourth quarter of 2019.
Our growth strategy is principally focused on adding new publisher partners to our technology platform. In addition, where the right opportunity exists, we will also acquire related online media, publishing and technology businesses by merger or acquisitions. This combined growth strategy has expanded the scale of unique users interacting on our technology platform with increased revenues during the six months ended June 30, 2020. We expect revenues increases in subsequent periods will come from organic growth in operations, addition of more publisher partners, and mergers and acquisitions.
~~Cost of Revenue~~
For the six months ended June 30, 2020 and 2019, we recognized cost of revenue of approximately $51.6 million and approximately $11.1 million, respectively. The increase of approximately $40.5 million in cost of revenue is primarily from: (i) our Channel Partner guarantees and revenue share payments of approximately $3.2 million; (ii) payroll, stock-based compensation, and related expenses for customer support, technology maintenance, and occupancy costs of related personnel of approximately $15.3 million; (iii) amortization of our Maven Platform of approximately $1.6 million (which includes our Maven Platform spending and amortization related to acquired developed technology from our acquisitions); (iv) royalty fees of approximately $7.5 million; (v) hosting, bandwidth, and software licensing fees of approximately $0.8 million; (vi) printing, distribution, and fulfillment costs of approximately $8.9 million; (vii) fees paid for data analytics and to other outside service providers of approximately $0.6 million; and (viii) other costs of revenue of approximately $2.7 million.
For the six months ended June 30, 2020, we capitalized costs related to our Maven Platform of approximately $2.9 million, as compared to approximately $1.6 million in the six months ended June 30, 2019. For the six months ended June 30, 2020, the capitalization of our Maven Platform consisted of approximately $2.1 million in payroll and related expenses, including taxes and benefits, approximately $0.9 million in stock-based compensation for related personnel, and amortization of approximately $4.3 million.
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~~Operating Expenses~~
~~The following table sets forth operating expenses and the corresponding percentage of total revenue:~~
Six Months Ended June 30, 2020 versus 2019
2020 2019 Change % Change
(percentages reflect expense as a percentage of total revenue)
Selling and marketing $ 17,769,281 33.2 % $ 2,600,393 21.6 % $ 15,168,888 117.5 %
General and administrative 17,680,716 33.0 % 10,096,268 83.8 % 7,584,448 58.7 %
Depreciation and amortization 8,223,806 15.4 % 215,977 1.8 % 8,007,829 62.0 %
Total operating expenses $ 43,673,803 $ 12,912,638 $ 30,761,165 238.2 %
~~Selling and Marketing~~. For the six months ended June 30, 2020, we incurred selling and marketing costs of approximately $17.8 million, as compared to approximately $2.6 million for the six months ended June 30, 2019. The increase in selling and marketing cost of approximately $15.2 million is primarily from payroll of selling and marketing account management support teams, along with the related benefits and stock-based compensation of approximately $5.7 million; office, travel, conferences and occupancy costs of approximately $0.6 million; circulation costs of approximately $2.6 million; advertising costs of approximately $4.2 million; and other selling and marketing related costs of approximately $1.9 million.
~~General and Administrative~~. For the six months ended June 30, 2020, we incurred general and administrative costs of approximately $17.7 million from payroll and related expenses, professional services, occupancy costs, stock based compensation of related personnel, depreciation and amortization, and other corporate expense, as compared to approximately $10.1 million for the six months ended June 30, 2019. The increase in general and administrative expenses of approximately $7.6 million is primarily from our increase in headcount, along with the related benefits and stock-based compensation of approximately $2.8 million; professional services, including accounting, legal and insurance of approximately $2.9 million; facilities costs of approximately $0.9 million; and other general corporate expenses of approximately $0.8 million.
~~Other (Expense) Income~~
~~The following table sets forth other (expense) income:~~
Six Months Ended June 30, 2020 versus 2019
2020 2019 Change % Change
(percentages reflect other expense (income) as a percentage of the total)
Change in valuation of warrant derivative liabilities $ 382,495 -9.2 % $ (541,770 ) 7.2 % $ 924,265 -12.3 %
Change in valuation of embedded derivative liabilities 4,543,000 -109.3 % (3,779,000 ) 50.3 % 8,322,000 -110.8 %
Interest expense (7,916,135 ) 190.5 % (3,177,262 ) 42.3 % (4,738,873 ) 63.1 %
Interest income 3,383 -0.1 % 3,234 0.0 % 149 0.0 %
Liquidated damages (1,167,674 ) 28.1 % (17,740 ) 0.2 % (1,149,934 ) 15.3 %
Other income - 0.0 % 126 0.0 % (126 ) 0.0 %
Total other expense $ (4,154,931 ) 100.0 % $ (7,512,412
)
100.0 % $ 3,357,481 -44.7 %
~~Change in Valuation of Warrant Derivative Liabilities~~. The change in valuation of warrant derivative liabilities for the six months ended June 30, 2020 was the result of the decrease in the fair value of the warrant derivative liabilities as of June 30, 2020, as compared to change in the valuation for the six months ended June 30, 2019 where the change was from an increase in the fair value of the warrant derivative liabilities as of June 30, 2019.
~~Change in Valuation of Embedded Derivative Liabilities~~. The change in valuation of embedded derivative liabilities for the six months ended June 30, 2020 was the result of the decrease in the fair value of the embedded derivative liabilities as of June 30, 2020 as compared to the change in the valuation for the six months ended June 30, 2019 where the change was from an increase in the fair value of the embedded derivative liabilities as of June 30, 2019.
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~~Interest Expense~~. We incurred interest expense of approximately $7.9 million for the six months ended June 30, 2020, primarily from approximately $3.2 million from amortization of debt discount on notes payable; approximately $4.4 million of accrued interest; and approximately $0.3 million of other interest, as compared to approximately $3.2 million for the six months ended June 30, 2019, primarily from approximately $1.6 million from amortization of debt discount on notes payable; approximately $1.2 million of accrued interest; and approximately $0.4 million of other interest.
~~Liquidated Damages~~. We recorded liquidated damages, including the accrued interest thereon, of approximately ~~$1.2~~$0.5 million ~~for the six months ended June 30,~~in fiscal 2020 primarily from issuance of our 12% Convertible Debentures, Series H Preferred Stock, Series I Preferred Stock and Series J Preferred Stock, ~~issued during 2019. The~~which liquidated damages were ~~recognized because we determined that: (i) registration statements covering~~based upon the shares of common stock issuable upon conversion under the aforementioned instruments would not be declared effective within the requisite time frame; and (ii) that we would not be able to file our periodic reports in the requisite time frame with the SEC in order to satisfy the public information requirements under the securities purchase agreements.reasons set forth above.
~~Recent Disruptions to Our Operations~~
Beginning in March 2020, our normal business operations were disrupted by a series of events surrounding the COVID-19 pandemic and related measures to control it. To a lesser extent, these disruptions continue as of the date the condensed consolidated financial statements for the three and six months ended June 30, 2020 were issued. See “Item 1A, Risk Factors – Because of the effects of COVID-19 pandemic and the uncertainty about their persistence, we may need to raise more capital to continue operations.”

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

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

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer(s) and principal financial officer(s), or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

In accordance with Exchange Act Rules 13a-15 and 15d-15, an evaluation was completed under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were not effective in providing reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act was recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms.

Changes in Internal Control over Financial Reporting

In connection with our continued monitoring and maintenance of our controls procedures as part of the implementation of Section 404 of the Sarbanes, we continue to review, test, and improve the effectiveness of our internal controls. There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the period ended ~~June 30, 2020,~~March 31, 2021, or subject to the date we completed our evaluation, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

ITEM 1A. RISK FACTORS

There are numerous factors that affect our business and operating results, many of which are beyond our control. The ~~following is a description of significant~~risk factors ~~that might cause~~described in Part I, “Item IA. Risk Factors” in our ~~future results to differ materially from those currently expected. The risks described below are not~~Annual Report on Form 10-K, for the ~~only risks we face.~~year ended December 31, 2020, should be carefully considered, together with the other information contained or incorporated by reference in this Quarterly Report on Form 10-Q and in our other filings with SEC in connection with evaluating us, our business and the forward-looking statements contained in this Quarterly Report on Form 10-Q. Additional risks and uncertainties not ~~presently~~ known to us at present, or that we currently deem immaterial, may ~~also~~ affect ~~our business operations. If~~us. The occurrence of any of ~~the following~~these known or unknown risks actually occur, our business, financial condition, results of operations, cash flows, and/or our ability to pay our debts and other liabilities could suffer. As a result, the trading price and liquidity of our securities could decline, perhaps significantly, and you could lose all or part of your investment. The risks discussed below also include forward-looking statements and our actual results may differ substantially from those discussed in these forward-looking statements. See the section entitled “Forward-Looking Statements.”
~~RISKS RELATED TO OUR BUSINESS AND OUR FINANCIAL CONDITION~~
~~Our business operations have been and may continue to be materially and adversely affected by the outbreak of COVID-19.~~ An outbreak of respiratory illness caused by COVID-19 emerged in late 2019 and has spread globally. In March 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic based on the rapid increase in global exposure. COVID-19 continues to spread throughout the world. 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 impact on the economic environment.
Beginning in March 2020, as a result of the COVID-19 pandemic, our revenue and earnings began to decline largely due to the cancellation of high attendance sports events and the resulting decrease in traffic to the Maven Platform and advertising revenue. This initial decrease in revenue and earnings were partially offset by revenues generated by TheStreet, as well as some recovery of sporting events (including, in some cases, limited in-person attendance) that have generated content for the licensing and/or syndication of certain products and content under the Sports Illustrated brand (collectively, the “Sports Illustrated Licensed Brands”). Despite this perceived recovery, the future impact, or continued impact, from the COVID-19 pandemic remains uncertain.
The extent of the impact on our operational and financial performance will depend, in part, on future developments, including the duration and spread of the COVID-19 pandemic, related group gathering and sports event advisories and restrictions, and the extent and effectiveness of containment actions taken, all of which remain uncertain at the time of issuance of our accompanying consolidated financial statements.
These and other impacts of the COVID-19 pandemic, or other pandemics or epidemics, could have the effect of heightening many of the other risks described in this Quarterly Report under the “Risk Factors” section.
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~~Because of the effects of COVID-19 pandemic and the uncertainty about their persistence, we may need to raise more capital to continue operations.~~ At June 30, 2020, we had cash of approximately $2.3 million. From July 1, 2020 through the issuance date of our accompany condensed consolidated financial statements, we raised aggregate net proceeds of approximately $20.8 million through various preferred stock private placements. As of the date our accompanying condensed consolidated financial statements for the three and six months ended June 30, 2020 were issued or were available to be issued, we had cash of approximately $2.3 million. Please refer to Item 2, ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~, under the section entitled “Future Liquidity,” for additional information. We have seen stabilization in our markets since the spring of 2020 and believe that based on our current assessment of the impact of COVID-19, we have sufficient resources to fully fund our business operations through 12 months from the issuance date of our accompanying condensed consolidated financial statements. However, due to the uncertainty regarding the duration of the impact of COVID-19 and its effect on our financial performance and the potential that our traffic and advertising revenue becomes destabilized again, we may require additional capital. We have not had difficulties accessing the capital markets during 2020, however, due to the uncertainty surrounding COVID-19, we may experience difficulties in the future.
As market conditions present uncertainty as to our ability to secure additional capital, there can be no assurances that we will be able to secure additional financing on acceptable terms, or at all, as and when necessary to continue to conduct operations. Our future liquidity and capital requirements will depend upon numerous factors, including the success of our offerings and competing technological and market developments. We may need to raise funds through public or private financings, strategic relationships, or other arrangements. There can be no assurance that such funding, will be available on terms acceptable to us, or at all. Furthermore, any equity financing will be dilutive to existing stockholders, and debt financing, if available, may involve restrictive covenants that may limit our operating flexibility with respect to certain business matters. Strategic arrangements may require us to relinquish our rights or grant licenses to some or substantial parts of our intellectual property. If funds are raised through the issuance of equity securities, the percentage ownership of our stockholders will be reduced, stockholders may experience additional dilution in net book value per share, and such equity securities may have rights, preferences, or privileges senior to those of the holders of our existing capital stock. If adequate funds are not available on acceptable terms, we may not be able to continue operating, develop or enhance products, take advantage of future opportunities or respond to competitive pressures, any of which could have a material ~~adverse effect on our business, operating results, and financial condition.~~
~~We have incurred losses since our inception, have yet to achieve profitable operations, and anticipate that we will continue to incur losses for the foreseeable future.~~ We have had losses from inception, and as a result, have relied on capital funding or borrowings to fund our operations. Our accumulated deficit as of December 31, 2019 was approximately $73.0 million. Our accumulated deficit as of June 30, 2020 was approximately $119.0 million. The financial statements for the three months ended March 31, 2020 and the three and six months ended June 30, 2020 are the only financial statements we have issued for any periods during fiscal 2020. While we anticipate generating profits in fiscal 2021, the uncertainty surrounding the COVID-19 pandemic yields some doubt as to our ability to do so and could require us to raise additional capital. We cannot predict whether we will be able to continue to find capital to support our business plan if the negative effects of the COVID-19 pandemic continue longer than anticipated.
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We identified material weaknesses in our internal control over financial reporting. If we do not adequately address these material weaknesses or if other material weaknesses or significant deficiencies in our internal control over financial reporting are discovered, our financial statements could contain material misstatements and our business, operations and stock price may be adversely affected. ~~As disclosed under Item 4,~~ ~~Controls and Procedures~~, of this Quarterly Report, our management has identified material weaknesses in our internal control over financial reporting at June 30, 2020 and we expect to identify material weaknesses in our internal controls over financial reporting at December 31, 2020. We expect to have remediated our material weaknesses in our internal control over financial reporting during the quarter ending June 30, 2021, of which there can be no assurance. Under standards established by the Public Company Accounting Oversight Board, a material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis. Although no material misstatement of our historical financial statements was identified, the existence of these material weaknesses or significant deficiencies could result in material misstatements in our financial statements and we could be required to restate our financial statements. Further, significant costs and resources may be needed to remediate the identified material weaknesses or any other material weaknesses or internal control deficiencies. If we are unable to remediate, evaluate, and test our internal controls on a timely basis in the future, management will be unable to conclude that our internal controls are effective and our independent registered public accounting firm will be unable to express an unqualified opinion on the effectiveness of our internal controls. If we cannot produce reliable financial reports, investors may lose confidence in our financial reporting, the price of our common stock could be adversely impacted and we could be subject to sanctions or investigations by the SEC or other regulatory authorities, which could negatively impact our business, financial condition, and results of operations.
As of the date of filing this Quarterly Report, we currently lack certain internal controls over our financial reporting. While we have three independent directors serving on our Board, have added to our accounting staff, and have hired a new Chief Technology Officer, we are implementing such controls at this time. The lack of such controls makes it difficult to ensure that information required to be disclosed in our reports filed and submitted under the Exchange Act is recorded, processed, summarized, and reported as and when required.
We cannot assure you that we will be able to develop and implement the necessary internal controls over financial reporting. The absence of such internal controls may inhibit investors from purchasing our shares and may make it more difficult for us to raise debt or equity financing.
~~If we fail to retain current users or add new users, or if our users decrease their level of engagement with the Maven Platform, our business would be seriously harmed.~~ The success of our business heavily depends on the size of our user base and the level of engagement of our users. Thus, our business performance will also become increasingly dependent on our ability to increase levels of user engagement in existing and new markets. We are continuously subject to a highly competitive market in order to attract and retain our users’ attention. A number of factors could negatively affect user retention, growth, and engagement, including if:
● ~~users increasingly engage with competing platforms instead of ours;~~
● ~~we fail to introduce new and exciting products and services, or such products and services do not achieve a high level of market acceptance;~~
● ~~we fail to accurately anticipate consumer needs, or we fail to innovate and develop new software and products that meet these needs;~~
● ~~we fail to price our products competitively;~~
● ~~we do not provide a compelling user experience because of the decisions we make regarding the type and frequency of advertisements that we display;~~
● ~~we are unable to combat spam, bugs, malwares, viruses, hacking, or other hostile or inappropriate usage on our products;~~
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● ~~there are changes in user sentiment about the quality or usefulness of our existing products in the short-term, long-term, or both;~~
● ~~there are increased user concerns related to privacy and information sharing, safety, or security;~~
● ~~there are adverse changes in our products or services that are mandated by legislation, regulatory authorities, or legal proceedings;~~
● ~~technical or other problems frustrate the user experience, particularly if those problems prevent us from delivering our products in a fast and reliable manner;~~
● we, our Channel Partners, or other companies in our industry are the subject of adverse media reports or other negative publicity, some of which may be inaccurate or include confidential information that we are unable to correct or retract; or
● ~~we fail to maintain our brand image or our reputation is damaged.~~
Any decrease in user retention, growth, or engagement could render our products less attractive to users, advertisers, or our Channel Partners, thereby reducing our revenues from them, which may have a material and adverse impact on our business, financial condition and results of operations. In addition, there can be no assurance that we will succeed in developing products and services that eventually become widely accepted, that we will be able to timely release products and services that are commercially viable, or that we will establish ourselves as a successful player in a new business area. Our inability to do so would have an adverse impact on our business, financial condition, and results of operations.
~~The market in which we participate is intensely competitive, and if we do not compete effectively, our operating results could be harmed.~~ The digital media industry is fragmented and highly competitive. There are many players in the digital media market, many with greater name recognition and financial resources, which may give them a competitive advantage. Some of our current and potential competitors have substantially greater financial, technical, marketing, distribution, and other resources than we do. Our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards, customer, and user requirements and trends. In addition, our customers and strategic partners may become competitors in the future. Certain of our competitors may be able to negotiate alliances with strategic partners on more favorable terms than we are able to negotiate. Pricing pressures and increased competition generally could result in reduced sales, reduced margins, losses, or the failure of the Maven Platform to achieve or maintain more widespread market acceptance, any of which could adversely affect our revenues and operating results. With the introduction of new technologies, the evolution of the Maven Platform, and new market entrants, we expect competition to intensify in the future.
~~We may have difficulty managing our growth.~~ We have added, and expect to continue to add, channel partner and end-user support capabilities, to continue software development activities, and to expand our administrative operations. In the past two years, we have entered into multiple strategic transactions. These strategic transactions, which have significantly expanded our business, have and are expected to place a significant strain on our managerial, operational, and financial resources. To manage any further growth, we will be required to improve existing, and implement new, operational, customer service, and financial systems, procedures and controls and expand, train, and manage our growing employee base. We also will be required to expand our finance, administrative, technical, and operations staff. There can be no assurance that our current and planned personnel, systems, procedures, and controls will be adequate to support our anticipated growth, that management will be able to hire, train, retain, motivate, and manage required personnel or that our management will be able to successfully identify, manage and exploit existing and potential market opportunities. If we are unable to manage growth effectively, our business could be harmed.
~~The strategic relationships that we may be able to develop and on which we may come to rely may not be successful.~~ We will seek to develop strategic relationships with advertising, media, technology, and other companies to enhance the efforts of our market penetration, business development, and advertising sales revenues. These relationships are expected to, but may not, succeed. There can be no assurance that these relationships will develop and mature, or that potential competitors will not develop more substantial relationships with attractive partners. Our inability to successfully implement our strategy of building valuable strategic relationships could harm our business.
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We rely heavily on our ability to collect and disclose data and metrics in order to attract new advertisers and retain existing advertisers. Any restriction, whether by law, regulation, policy, or other reason, on our ability to collect and disclose data that our advertisers find useful would impede our ability to attract and retain advertisers. Our advertising revenue could be seriously harmed by many other factors, including:
● ~~a decrease in the number of active users of the Maven Platform;~~
● ~~our inability to create new products that sustain or increase the value of our advertisements;~~
● ~~our inability to increase the relevance of targeted advertisements shown to users;~~
● ~~adverse legal developments relating to advertising, including changes mandated by legislation, regulation, or litigation; and~~
● ~~difficulty and frustration from advertisers who may need to reformat or change their advertisements to comply with our guidelines.~~
The occurrence of any of these or other factors could result in a reduction in demand for advertisements, which may reduce the prices we receive for our advertisements or cause advertisers to stop advertising with us altogether, either of which would negatively affect our business, financial condition, and results of operations.
~~The sales and payment cycle for online advertising is long, and such sales, which have been significantly impacted by the COVID-19 pandemic, may not occur when anticipated or at all.~~ The decision process is typically lengthy for brand advertisers and sponsors to commit to online campaigns. Some of their budgets are planned a full year in advance. The COVID-19 pandemic significantly impacted the amount and pricing of advertising throughout the media industry and it is uncertain when and to what extent advertisers will return to more normal spending levels. The decision process for such purchases, even in normal business situations, is subject to delays and aspects that are beyond our control. In addition, some advertisers and sponsors take months after the campaign runs to pay, and some may not pay at all, or require partial “make-goods” based on performance.
~~We are dependent on the continued services and on the performance of our key executive officers, management team, and other key personnel, the loss of which could adversely affect our business.~~ Our future success largely depends upon the continued services of our key executive officers, management team, and other key personnel. The loss of the services of any of such key personnel could have a material adverse effect on our business, operating results, and financial condition. We depend on the continued services of our key personnel as they work closely with both our employees and our Channel Partners. Such key personnel are also responsible for our day-to-day operations. Although we have employment agreements with some of our key personnel, these are at-will employment agreements, albeit with non-competition and confidentiality provisions and other rights typically associated with employment agreements. We do not believe that any of our executive officers are planning to leave or retire in the near term; however, we cannot assure that our executive officers or members of our management team will remain with us. We also depend on our ability to identify, attract, hire, train, retain, and motivate other highly skilled technical, managerial, sales, operational, business development, and customer service personnel. Competition for such personnel is intense, and there can be no assurance that we will be able to successfully attract, assimilate, or retain sufficiently qualified personnel. The loss or limitation of the services of any of our executive officers, members of our management team, or key personnel, including our regional and country managers, or the inability to attract and retain additional qualified key personnel, could have a material adverse effect on our business, financial condition, or results of operations.
~~Our revenues could decrease if the Maven Platform does not continue to operate as intended.~~ The Maven Platform performs complex functions and is vulnerable to undetected errors or unforeseen defects that could result in a failure to operate or inefficiency. There can be no assurance that errors and defects will not be found in current or new products or, if discovered, that we will be able to successfully correct them in a timely manner or at all. The occurrence of errors and defects could result in loss of or delay in revenue, loss of market share, increased development costs, diversion of development resources and injury to our reputation or damage to our efforts to expand brand awareness.
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~~Interruptions or performance problems associated with our technology and infrastructure may adversely affect our business and operating results.~~ Our growth will depend in part on the ability of our users and Channel Partners to access the Maven Platform at any time and within an acceptable amount of time. We believe that the Maven Platform is proprietary and we rely on the expertise of members of our engineering, operations, and software development teams for their continued performance. It is possible that the Maven Platform may experience performance problems due to a variety of factors, including infrastructure changes, introductions of new functionality, human or software errors, capacity constraints due to an overwhelming number of users accessing the Maven Platform software simultaneously, denial of service attacks, or other security related incidents. We may not be able to identify the cause or causes of any performance problems within an acceptable period of time. It may be that it will be difficult to maintain and/or improve our performance, especially during peak usage times and as the Maven Platform becomes more complex and our user traffic increases. If the Maven Platform software is unavailable or if our users are unable to access it within a reasonable amount of time or at all, our business would be negatively affected. Therefore, in the event of any of the factors described above, or certain other failures of our infrastructure, partner or user data may be permanently lost. Moreover, the partnership agreements with our Channel Partners include service level standards that obligate us to provide credits or termination rights in the event of a significant disruption in the Maven Platform. To the extent that we do not effectively address capacity constraints, upgrade our systems as needed, and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, our business and operating results may be adversely affected.
~~We operate our exclusive coalition of professional-managed online media channels on third party cloud platforms and data center hosting facilities.~~ We rely on software and services licensed from, and cloud platforms provided by, third parties in order to offer our digital media services. Any errors or defects in third-party software or cloud platforms could result in errors in, or a failure of, our digital media services, which could harm our business. Any damage to, or failure of, these third-party systems generally could result in interruptions in the availability of our digital media services. As a result of this third-party reliance, we may experience the aforementioned issues, which could cause us to render credits or pay penalties, could cause our Channel Partners to terminate their contractual arrangements with us, and could adversely affect our ability to grow our audience of unique visitors, all of which could reduce our ability to generate revenue. Our business would also be harmed if our users and potential users believe our product and services offerings are unreliable. In the event of damage to, or failure of, these third-party systems, we would need to identify alternative channels for the offering of our digital media services, which would consume substantial resources and may not be effective. We are also subject to certain standard terms and conditions with Amazon Web Services and Google Cloud related to data storage purposes. These providers have broad discretion to change their terms of service and other policies with respect to us, and those changes may be unfavorable to us. Therefore, we believe that maintaining successful partnerships with Amazon Web Services, Google Cloud, and other third-party suppliers is critical to our success.
~~Real or perceived errors, failures, or bugs in the Maven Platform could adversely affect our operating results and growth prospects.~~ Because the Maven Platform is complex, undetected errors, failures, vulnerabilities, or bugs may occur, especially when updates are deployed. Despite testing by us, errors, failures, vulnerabilities, or bugs may not be found in the Maven Platform until after they are deployed to our customers. We expect from time to time to discover software errors, failures, vulnerabilities, and bugs in the Maven Platform and anticipate that certain of these errors, failures, vulnerabilities, and bugs will only be discovered and remediated after deployment to our Channel Partners and used by subscribers. Real or perceived errors, failures, or bugs in our software could result in negative publicity, loss of or delay in market acceptance of the Maven Platform, loss of competitive position, or claims by our Channel Partners or subscribers for losses sustained by them. In such an event, we may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct the problem.
~~Malware, viruses, hacking attacks, and improper or illegal use of the Maven Platform could harm our business and results of operations.~~ Malware, viruses, and hacking attacks have become more prevalent in our industry and may occur on our systems in the future. Any security breach caused by hacking, which involves efforts to gain unauthorized access to information or systems, or to cause intentional malfunctions or loss or corruption of data, software, hardware, or other computer equipment, and the inadvertent transmission of computer viruses could harm our business, financial condition and operating results. Any failure to detect such attack and maintain performance, reliability, security and availability of products and technical infrastructure to the satisfaction of our users may also seriously harm our reputation and our ability to retain existing users and attract new users.
41
Our information technology systems are susceptible to a growing and evolving threat of cybersecurity risk. Any substantial compromise of our data security, whether externally or internally, or misuse of agent, customer, or employee data, could cause considerable damage to our reputation, cause the public disclosure of confidential information, and result in lost sales, significant costs, and litigation, which would negatively affect our financial position and results of operations. Although we maintain policies and processes surrounding the protection of sensitive data, which we believe to be adequate, there can be no assurances that we will not be subject to such claims in the future.
~~If we are unable to protect our intellectual property rights, our business could suffer.~~ Our success significantly depends on our proprietary technology. We rely on a combination of copyright, trademark and trade secret laws, employee and third-party non-disclosure and invention assignment agreements and other methods to protect our proprietary technology. However, these only afford limited protection, and unauthorized parties may attempt to copy aspects of the Maven Platform’s features and functionality, or to use information that we consider proprietary or confidential. There can be no assurance that the Maven Platform will be protectable by patents, but if they are, any efforts to obtain patent protection that is not successful may harm our business in that others will be able to use our technologies. For example, previous disclosures or activities unknown at present may be uncovered in the future and adversely impact any patent rights that we may obtain. In addition, the laws of some foreign countries do not protect proprietary rights to the same extent as do the laws of the United States. There can be no assurance that the steps taken by us to protect our proprietary rights will be adequate or that third parties will not infringe or misappropriate our trademarks, copyrights, and similar proprietary rights. If we resort to legal proceedings to enforce our intellectual property rights, those proceedings could be expensive and time-consuming and could distract our management from our business operations. Our business, profitability and growth prospects could be adversely affected if we fail to receive adequate protection of our proprietary rights.
~~We could be required to cease certain activities and/or incur substantial costs as a result of any claim of infringement of another party’s intellectual property rights.~~ Some of our competitors, and other third parties, may own technology patents, copyrights, trademarks, trade secrets and website content, which they may use to assert claims against us. We cannot assure you that we will not become subject to claims that we have misappropriated or misused other parties’ intellectual property rights. Any claim or litigation alleging that we have infringed or otherwise violated intellectual property or other rights of third parties, with or without merit, and whether or not settled out of court or determined in our favor, could be time-consuming and costly to address and resolve, and could divert the time and attention of our management and technical personnel.
~~The results of any intellectual property litigation to which we might become a party may require us to do one or more of the following:~~
● ~~cease making, selling, offering, or using technologies or products that incorporate the challenged intellectual property;~~
● ~~make substantial payments for legal fees, settlement payments, or other costs or damages;~~
● ~~obtain a license, which may not be available on reasonable terms, to sell or use the relevant technology; or~~
● ~~redesign technology to avoid infringement.~~
If we are required to make substantial payments or undertake any of the other actions noted above as a result of any intellectual property infringement claims against us, such payments or costs could have a material adverse effect upon our business and financial results.
42
We are subject to a variety of laws and regulations in the United States and abroad that involve matters central to our business, including privacy, data protection, and personal information, rights of publicity, content, intellectual property, advertising, marketing, distribution, data security, data retention and deletion, personal information, electronic contracts and other communications, competition, protection of minors, consumer protection, telecommunications, employee classification, product liability, taxation, economic or other trade prohibitions or sanctions, securities law compliance, and online payment services. The introduction of new products, expansion of our activities in certain jurisdictions, or other actions that we may take may subject us to additional laws, regulations, monetary penalties or other government scrutiny. In addition, foreign data protection, privacy, competition, and other laws and regulations can impose different obligations or be more restrictive than those in the United States. Many of these laws and regulations are still evolving and could be interpreted or applied in ways that could limit or harm our business, require us to make certain fundamental and potentially detrimental changes to the products and services we offer, or subject us to claims. For example, laws relating to the liability of providers of online services for activities of their users and other third-parties are currently being tested by a number of claims, including actions based on invasion of privacy and other torts, unfair competition, copyright, and trademark infringement, and other theories based on the nature and content of the materials searched, the ads posted, or the content provided by users. In addition, there have been calls by members of Congress, from both parties, to limit the scope of the current immunities and safe harbors afforded online publishers with regard to user content and communications under the federal Digital Millennium Copyright Act and the federal Communications Decency Act. Any material reduction of those protections would make us more vulnerable to third party claims arising out of user content published by our online services.
These United States federal and state and foreign laws and regulations, which in some cases can be enforced by private parties in addition to government entities, are constantly evolving and can be subject to significant change, which could adversely affect our business. As a result, the application, interpretation, and enforcement of these laws and regulations are often uncertain, particularly in the new and rapidly evolving industry in which we operate and may be interpreted and applied inconsistently from country to country and inconsistently with our current policies and practices. Any change in legislation and regulations could affect our business. For example, regulatory or legislative actions affecting the manner in which we display content to our users or obtain consent to various practices could adversely affect user growth and engagement. Such actions could affect the manner in which we provide our services or adversely affect our financial results.
~~Furthermore, significant penalties could be imposed on us for failure to comply with various statutes or regulations. Violations may result from:~~
● ~~ambiguity in statutes;~~
● ~~regulations and related court decisions;~~
● ~~the discretion afforded to regulatory authorities and courts interpreting and enforcing laws;~~
● ~~new regulations affecting our business; and~~
● ~~changes to, or interpretations of, existing regulations affecting our business.~~
While we prioritize ensuring that our business and compensation model are compliant, and that any product or income related claims are truthful and non-deceptive, we cannot be certain that the Federal Trade Commission (the “FTC”) or similar regulatory body in another country will not modify or otherwise amend its guidance, laws, or regulations or interpret in a way that would render our current practices inconsistent with the same.
Our services involve the storage and transmission of digital information; therefore, cybersecurity incidents, including those caused by unintentional errors and those intentionally caused by third parties, may expose us to a risk of loss, unauthorized disclosure or other misuse of this information, litigation liability and regulatory exposure, reputational harm and increased security costs. We and our third-party service providers experience cyber-attacks of varying degrees on a regular basis. We expect to incur significant costs in ongoing efforts to detect and prevent cybersecurity-related incidents and these costs may increase in the event of an actual or perceived data breach or other cybersecurity incident. The COVID-19 pandemic has increased opportunities for cyber-criminals and the risk of potential cybersecurity incidents, as more companies and individuals work online. We cannot ensure that our efforts to prevent cybersecurity incidents will succeed. An actual or perceived breach of our cybersecurity could impact the market perception of the effectiveness of our cybersecurity controls. If our users or business partners, including our Channel Partners, are harmed by such an incident, they could lose trust and confidence in us, decrease their use of our services or stop using them in entirely. We could also incur significant legal and financial exposure, including legal claims, higher transaction fees and regulatory fines and penalties, which in turn could have a material and adverse effect on our business, reputation and operating results. While our insurance policies include liability coverage for certain of these types of matters, a significant cybersecurity incident could subject us to liability or other damages that exceed our insurance coverage.
43
~~Prior employers of our employees may assert violations of past employment arrangements.~~ Our employees are highly experienced, having worked in our industry for many years. Prior employers may try to assert that our employees are breaching restrictive covenants and other limitations imposed by past employment arrangements. We believe that all of our employees are free to work for us in their various capacities and have not breached past employment arrangements. Notwithstanding our care in our employment practices, a prior employer may assert a claim. Such claims will be costly to contest, highly disruptive to our work environment, and may be detrimental to our operations.
~~Our products may require availability of components or known technology from third parties and their non-availability can impede our growth.~~ We license/buy certain technology integral to our products from third parties, including open-source and commercially available software. Our inability to acquire and maintain any third-party product licenses or integrate the related third-party products into our products in compliance with license arrangements, could result in delays in product development until equivalent products can be identified, licensed, and integrated. We also expect to require new licenses in the future as our business grows and technology evolves. We cannot provide assurance that these licenses will continue to be available to us on commercially reasonable terms, if at all.
~~Government regulations may increase our costs of doing business.~~ The adoption or modification of laws or regulations relating to online media, communities, commerce, security and privacy could harm our business, operating results and financial condition by increasing our costs and administrative burdens. It may take years to determine whether and how existing laws such as those governing intellectual property, privacy, security, libel, consumer protection, and taxation apply. Laws and regulations directly applicable to Internet activities are becoming more diverse and prevalent in all global markets. We must comply with regulations in the United States, as well as any other regulations adopted by other countries where we may do business. The growth and development of Internet content, commerce and communities may prompt calls for more stringent consumer protection laws, privacy laws and data protection laws, both in the United States and abroad, as well as new laws governing the taxation of these activities. Compliance with any newly adopted laws may prove difficult for us and may harm our business, operating results, and financial condition.
~~We may face lawsuits or incur liabilities in the future in connection with our businesses.~~ In the future, we may face lawsuits or incur liabilities in connection with our businesses. For example, we could face claims relating to information that is published or made available on the Maven Platform. In particular, the nature of our business exposes us to claims related to defamation, intellectual property rights and rights of publicity and privacy. We might not be able to monitor or edit a significant portion of the content that appears on the Maven Platform. This risk is enhanced in certain jurisdictions outside the United States where our protection from liability for third-party actions may be unclear and where we may be less protected under local laws than we are in the United States. We could also face fines or orders restricting or blocking our services in particular geographies as a result of content hosted on our services. If any of these events occur, our business could be seriously harmed.
~~RISKS RELATED TO AN INVESTMENT IN OUR SECURITIES~~
~~There may be no liquid market for our common stock.~~ We provide no assurances of any kind or nature whatsoever that an active market for our common stock will ever develop. There has been no sustained activity in the market for our common stock. Investors should understand that there may be no alternative exit strategy for them to recover or liquidate their investments in our common stock. Accordingly, investors must be prepared to bear the entire economic risk of an investment in us for an indefinite period of time. Even if an active trading market develops over time, we cannot predict how liquid that market might become. Our common stock is quoted on the OTC Markets Group, Inc.’s (the “OTCM”) Pink Open Market (the “OTC Pink”). Trading in stock quoted on over-the-counter markets is often thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with our operations or business prospects. The trading price of our common stock is likely to be highly volatile and could be subject to wide fluctuations in price in response to various factors, some of which are beyond our control. These factors include:
● ~~Quarterly variations in our results of operations or those of our competitors;~~
● ~~Announcements by us or our competitors of acquisitions, new products and services, significant contracts, commercial relationships, or capital commitments;~~
● ~~Disruption or substantive changes to our operations, including the impact of the COVID-19 pandemic;~~
● ~~Variations in our sales and earnings from period to period;~~
● ~~Commencement of, or our involvement in, litigation;~~
● ~~Any major change in our board or management;~~
● ~~Changes in governmental regulations or in the status of our regulatory approvals; and~~
● ~~General market conditions and other factors, including factors unrelated to our own operating performance.~~
44
~~We are subject to the reporting requirements of the United States securities laws, which will require expenditure of capital and other resources, and may divert management’s attention.~~ We are a public reporting company subject to the information and reporting requirements of the Exchange Act, the Sarbanes-Oxley Act (“Sarbanes”), and other applicable securities rules and regulations. Complying with these rules and regulations have caused us and will continue to cause us to incur additional legal and financial compliance costs, make some activities more difficult, be time-consuming or costly, and continue to increase demand on our systems and resources. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and operating results. We are not current in our SEC filings and the cost of completing historical filings in addition to maintaining current financial reporting has been, and will continue to be, a financial burden for us. If we fail to or are unable to comply with Sarbanes, we will not be able to obtain independent accountant certifications that Sarbanes requires publicly traded companies to obtain. Further, by complying with public disclosure requirements, our business and financial condition are more visible, which we believe may result in the likelihood of increased threatened or actual litigation, including by competitors and other third parties. Compliance with these additional requirements may also divert management’s attention from operating our business. Any of these may adversely affect our operating results.
~~We may not be able to attract the attention of major brokerage firms or securities analysts in our efforts to raise capital.~~ In due course, we plan to seek to have our common stock quoted on a national securities exchange in the United States. There can be no assurance that we will be able to garner a quote for our common stock on an exchange. Even if we are successful in doing so, security analysts and major brokerage houses may not provide coverage of us. We may also not be able to attract any brokerage houses to conduct secondary offerings with respect to our securities.
~~Because we are subject to the “penny stock” rules and regulations, the level of trading activity in our common stock is limited, and our stockholders may have difficulties selling their shares.~~ SEC regulations define penny stocks to be any non-exchange equity security that has a market price of less than $5.00 per share, subject to certain exemptions. The regulations of the SEC promulgated under the Exchange Act require additional disclosure relating to the market for penny stocks in connection with trades in any stock defined as a penny stock. Unless an exception is available, those regulations require the broker-dealer to deliver, prior to any transaction involving a penny stock, a standardized risk disclosure schedule prepared by the SEC, to provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, monthly account statements showing the market value of each penny stock held in the purchaser’s account, to make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a stock that becomes subject to the penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage market investor interest in and limit the marketability of our common stock. There can be no assurance that our common stock will qualify for exemption from the penny stock rules. In any event, even if our common stock were exempt from the penny stock rules, we would remain subject to Section 15(b)(6) of the Exchange Act, which gives the SEC the authority to restrict any person from participating in a distribution of penny stock, if the SEC finds that such a restriction would be in the public interest.
In addition to the “penny stock” rules promulgated by the SEC, the Financial Industry Regulatory Authority (“FINRA”) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives, and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our common stock.
45

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

~~None.~~The following sets forth certain unregistered sales of our equity securities for prior periods that were not previously disclosed, as well as unregistered sales of our equity securities that occurred through the date of filing this Quarterly Report:
On January 1, 2019, we issued 833,333 shares of our common stock as restricted stock awards to five members of our board of directors subject to continued service with us. The awards vest over a twelve-month period from the grant date. The per share fair value on the grant date was $0.48. The issuance was exempt from the registration requirements of the Securities Act by virtue of Section 4(a)(2) thereof as a transaction not involving a public offering.
On June 14, 2019, our board of directors approved the grant of the warrants to acquire up to 21,989,844 shares our common stock to ABG-SI, LLC in connection with the Sports Illustrated licensed brands. Half the warrants have an exercise price of $0.42 per share (the “Forty-Two Cents Warrants”). The other half of the warrants 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 will 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; (2) 60% of the Forty-Two Cents Warrants and 60% of the Eighty-Four Cents Warrants will vest based on the achievement of certain performance goals for the Sports Illustrated licensed brands in calendar years 2020, 2021, 2022, or 2023; (3) under certain circumstances we may require ABG to exercise all (and not less than all) of the warrants, in which case all of the warrants will be vested; (4) all of the warrants will automatically vest upon certain terminations by ABG of the licensing agreement we entered into with Sports Illustrated or upon a change of control of us; and (5) ABG will have the right to participate, on a pro-rata basis (including vested and unvested warrants, exercised or unexercised), in any of our future equity issuances (subject to customary exceptions). Pursuant to an amendment to the licensing agreement, the exercise price of fifty percent (50%) of the Eighty-Four Cents Warrants was changed to $0.42 per share in exchange for additional benefits under the Sports Illustrated licensing agreement. The issuance was exempt from the registration requirements of the Securities Act by virtue of Section 4(a)(2) thereof as a transaction not involving a public offering.
Between March 16, 2019 and December 2, 2019, we granted stock options exercisable for an aggregate of up to 68,137,863 shares of our common stock to participants under our 2019 Equity Incentive Plan as payment for services rendered. The exercise prices per share ranged from $0.40 to $0.89. The issuances were exempt from the registration requirements of the Securities Act by virtue of Section 4(a)(2) thereof as a transaction not involving a public offering.
29
Between January 2, 2020 and December 31, 2020, we granted stock options exercisable for an aggregate of up to approximately 22,143,768 shares of our common stock to participants under our 2019 Equity Incentive Plan as payment for services rendered. The exercise prices per share ranged from $0.34 to $0.93. The issuances were exempt from the registration requirements of the Securities Act by virtue of Section 4(a)(2) thereof as a transaction not involving a public offering.
On May 18, 2020 and June 5, 2020, we granted restricted stock units representing 3,250,000 shares of our common stock to participants under our 2019 Equity Incentive Plan as payment for services rendered. The fair value per share ranged from $0.44 to $0.50. The issuance was exempt from the registration requirements of the Securities Act by virtue of Section 4(a)(2) thereof as a transaction not involving a public offering.
Between January 1, 2021 and June 28, 2021, we granted stock options exercisable for an aggregate of up to 45,500,009 shares of our common stock to participants under our 2019 Equity Incentive Plan as payment for services rendered. The exercise prices per share ranged from $0.59 to $0.97. The issuances were exempt from the registration requirements of the Securities Act by virtue of Section 4(a)(2) thereof as a transaction not involving a public offering.
Between February 18, 2021 and June 18, 2021, we granted restricted stock units representing 36,508,945 shares of our common stock to participants under our 2019 Equity Incentive Plan as payment for services rendered. The fair values per share ranged from $0.73 and $0.90. The issuances were exempt from the registration requirements of the Securities Act by virtue of Section 4(a)(2) thereof as a transaction not involving a public offering.
On January 1, 2021, we issued 750,000 shares of our common stock as restricted stock awards to six members of our board of directors subject to continued service with us. The awards vest over a twelve-month period from the grant date. The per share fair value was $0.60. The issuance was exempt from the registration requirements of the Securities Act by virtue of Section 4(a)(2) thereof as a transaction not involving a public offering.
On March 9, 2021, we issued 55,165 shares of our common stock as restricted stock awards to one new member of our board of directors subject to continued service with us. The awards vest over a ten-month period from the grant date. The per share fair value on the grant date was $0.74. The issuance was exempt from the registration requirements of the Securities Act by virtue of Section 4(a)(2) thereof as a transaction not involving a public offering.
On March 9, 2021, we issued 256,661 shares of our common stock to LiftIgniter as part of the consideration owed under the asset purchase agreement. The fair value per share on the date of issuance was $0.79. The issuance was exempt from the registration requirements of the Securities Act by virtue of Section 4(a)(2) thereof as a transaction not involving a public offering.
On June 14, 2021, we issued 82,158 shares of our common stock as restricted stock awards to two new members of our board of directors subject to continued service with us. The awards vest over a seven-month period from the grant date. The per share fair value on the grant date was $0.84. The issuance was exempt from the registration requirements of the Securities Act by virtue of Section 4(a)(2) thereof as a transaction not involving a public offering.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.
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ITEM 6. EXHIBITS

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

Exhibit
Number
Description of Document

~~4.1~~10.1ǂ ~~Form of 2020 Warrant for Channel Partners Program,~~Maven Executive Bonus Plan, which was filed as Exhibit ~~4.19~~10.1 to our ~~Annual~~Current Report on Form ~~10-K,~~8-K filed on ~~April 9,~~January 14, 2021.

~~10.1~~10.2ǂ ~~Note, dated April 6, 2020, issued by TheStreet, Inc. in favor of JPMorgan Chase Bank, N.A., which was filed as Exhibit 10.68 to our Annual Report on Form 10-K, filed on April 9, 2021.~~
~~10.2+~~ ~~Executive Chairman Agreement, dated as of June 5, 2020, by and between the Company and John Fichthorn, which was filed as Exhibit 10.72 to our Annual Report on Form 10-K, filed on January 8, 2021.~~
~~10.3+~~ Second Amended and Restated Executive Employment Agreement, dated ~~May 1,~~February 18, 2021 and effective on August 26, 2020, by and between the Company and Ross Levinsohn, which was filed as Exhibit ~~10.90~~10.1 to our ~~Annual~~Current Report on Form ~~10-K,~~8-K filed on ~~April 9,~~February 23, 2021.

~~10.4~~10.3ǂ ~~Channel Partners Warrant Program adopted on May 20, 2020,~~Amended and Restated Executive Employment Agreement, dated February 18, 2021 and effective January 1, 2021, by and between the Company and Douglas Smith, which was filed as Exhibit ~~10.112~~10.2 to our ~~Annual~~Current Report on Form ~~10-K,~~8-K filed on ~~April 9,~~February 23, 2021.

~~10.5~~10.4ǂ ~~Amendment to 2020 Outside Director Compensation Policy, dated May 27, 2020,~~Executive Employment Agreement, effective February 16, 2021, by and between the Company and Robertson Barrett, which was filed as Exhibit ~~10.114~~10.3 to our ~~Annual~~Current Report on Form ~~10-K,~~8-K filed on ~~April 9,~~February 23, 2021.

~~10.6~~10.5ǂ ~~Consulting~~Executive Employment Agreement, dated ~~April 11, 2020,~~February 17, 2021 and effective on January 1, 2021, by and between ~~Maven Coalition, Inc.~~the Company and ~~AQKraft Advisory Services, LLC,~~Paul Edmondson, which was filed as Exhibit ~~10.116~~10.4 to our ~~Annual~~Current Report on Form ~~10-K,~~8-K filed on ~~April~~February 23, 2021.
10.6ǂ Executive Employment Agreement, dated February 17, 2021 and effective on January 1, 2021, by and between the Company and Jill Marchisotto, which was filed as Exhibit 10.5 to our Current Report on Form 8-K filed on February 23, 2021.
10.7ǂ Amended and Restated Executive Employment Agreement, dated February 22, 2021 and effective on January 1, 2021, by and between the Company and Andrew Kraft, which was filed as Exhibit 10.6 to our Current Report on Form 8-K filed on February 23, 2021.
10.8ǂ Second Amended and Restated Executive Employment Agreement, dated February 22, 2021 and effective on January 1, 2021, by and between the Company and Avi Zimak, which was filed as Exhibit 10.7 to our Current Report on Form 8-K filed on February 23, 2021.
10.9ǂ Second Amendment to theMaven, Inc.’s 2019 Equity Incentive Plan, dated February 18, 2021, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on February 24, 2021.
10.10ǂ Letter Agreement between the Company and Joshua Jacobs, effective as of March 9, 2021, which was filed as Exhibit 10.1 to our Current Report on Form 8-K on March 12, 2021.

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

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

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

32.2* Chief Financial 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”.

ǂ Management contract or compensatory plan or agreement.
4631

SIGNATURES

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

TheMaven, Inc.

Date: ~~May 12,~~August 16, 2021 By: /s/ ROSS LEVINSOHN
Ross Levinsohn
Chief Executive Officer
(Principal Executive Officer)

Date: ~~May 12,~~August 16, 2021 By: /s/ DOUGLAS B. SMITH
Douglas B. Smith
Chief Financial Officer
(Principal Financial and Accounting Officer)

4732

	March 31, 2021 (unaudited)			December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	4,524,734		$	9,033,872
Restricted cash		500,809			500,809
Accounts receivable, net		14,089,590			16,497,626
Subscription acquisition costs, current portion		31,171,595			28,146,895
Royalty fees, current portion		15,000,000			15,000,000
Prepayments and other current assets		6,422,576			4,667,263
Total current assets		71,709,304			73,846,465
Property and equipment, net		1,117,403			1,129,438
Operating lease right-of-use assets		18,108,197			18,292,196
Platform development, net		7,463,671			7,355,608
Royalty fees, net of current portion		7,500,000			11,250,000
Subscription acquisition costs, net of current portion		18,682,545			13,358,585
Acquired and other intangible assets, net		66,550,845			71,501,835
Other long-term assets		1,568,502			1,330,812
Goodwill		16,139,377			16,139,377
Total assets	$	208,839,844		$	214,204,316
Liabilities, mezzanine equity and stockholders’ deficiency
Current liabilities:
Accounts payable	$	10,148,600		$	8,228,977
Accrued expenses and other		16,735,761			14,718,193
Line of credit		5,426,790			7,178,791
Unearned revenue		65,863,189			61,625,676
Subscription refund liability		4,772,991			4,035,531
Operating lease liabilities		1,022,294			1,059,671
Liquidated damages payable		9,822,725			9,568,091
Warrant derivative liabilities		1,812,931			1,147,895
Total current liabilities		115,605,281			107,562,825
Unearned revenue, net of current portion		28,300,040			23,498,597
Restricted stock liabilities, net of current portion		1,519,156			1,995,810
Operating lease liabilities, net of current portion		19,680,225			19,886,083
Other long-term liabilities		597,678			753,365
Deferred tax liabilities		210,832			210,832
Long-term debt		64,754,198			62,194,272
Total liabilities		230,667,410			216,101,784
Commitments and contingencies (Note 12)
Mezzanine equity:
Series G redeemable and convertible preferred stock, $0.01 par value, $1,000 per share liquidation value and 1,800 shares designated; aggregate liquidation value: $168,496; Series G shares issued and outstanding: 168,496; common shares issuable upon conversion: 188,791 at March 31, 2021 and December 31, 2020		168,496			168,496
Series H convertible preferred stock, $0.01 par value, $1,000 per share liquidation value and 23,000 shares designated; aggregate liquidation value: $19,597,000; Series H shares issued and outstanding: 19,597; common shares issuable upon conversion: 59,384,849 at March 31, 2021 and December 31, 2020		18,247,496			18,247,496
Total mezzanine equity		18,415,992			18,415,992
Stockholders’ deficiency:
Common stock, $0.01 par value, authorized 1,000,000,000 shares; issued and outstanding: 230,326,425 and 229,085,167 shares at March 31, 2021 and December 31, 2020, respectively		2,303,264			2,290,851
Common stock to be issued		10,809			10,809
Additional paid-in capital		145,178,960			139,658,166
Accumulated deficit		(187,736,591	)		(162,273,286	)
Total stockholders�� deficiency		(40,243,558	)		(20,313,460	)
Total liabilities, mezzanine equity and stockholders’ deficiency	$	208,839,844		$	214,204,316

	Three Months Ended March 31,
	2021			2020
Revenue	$	33,615,481		$	30,412,853
Cost of revenue (includes amortization of developed technology and platform development for 2021 and 2020 of $2,166,415 and $2,040,129, respectively)		28,208,372			26,738,833
Gross profit		5,407,109			3,674,020
Operating expenses
Selling and marketing		17,528,709			9,359,938
General and administrative		5,638,830			10,410,205
Depreciation and amortization		3,963,234			4,096,680
Total operating expenses		27,130,773			23,866,823
Loss from operations		(21,723,664	)		(20,192,803	)
Other (expense) income
Change in valuation of warrant derivative liabilities		(665,036	)		139,219
Change in valuation of embedded derivative liabilities		-			1,621,000
Interest expense		(2,819,971	)		(3,799,728	)
Interest income		-			1,743
Liquidated damages		(254,634	)		(546,055	)
Other		-			-
Total other expense		(3,739,641	)		(2,583,821	)
Loss before income taxes		(25,463,305	)		(22,776,624	)
Income taxes		-			-
Net loss	$	(25,463,305	)	$	(22,776,624	)
Basic and diluted net loss per common share	$	(0.11	)	$	(0.59	)
Weighted average number of common shares outstanding – basic and diluted		230,033,140			38,643,277

	Common Stock						Common Stock to be Issued				Additional						Total
	Shares			Par Value			Shares		Par Value		Paid-in Capital			Accumulated Deficit			Stockholders’ Deficiency
Balance at January 1, 2021		229,085,167		$	2,290,851			1,080,930	$	10,809	$	139,658,166		$	(162,273,286	)	$	(20,313,460	)
Issuance of restricted stock awards to the board of directors		805,165			8,052			-		-		(8,052	)		-			-
Repurchase restricted stock classified as liabilities		(133,068	)		(1,331	)		-		-		1,331			-			-
Issuance of common stock for restricted stock units in connection with the acquisition of LiftIgniter		256,661			2,567			-		-		(2,567	)		-			-
Issuance of common stock in connection with professional services		312,500			3,125			-		-		121,875			-			125,000
Stock-based compensation		-			-			-		-		5,408,207			-			5,408,207
Net loss		-			-			-		-		-			(25,463,305	)		(25,463,305	)
Balance at March 31, 2021		230,326,425		$	2,303,264			1,080,930	$	10,809	$	145,178,960		$	(187,736,591	)	$	(40,243,558	)

	Common Stock						Common Stock to be Issued				Additional						Total
	Shares			Par Value			Shares		Par Value		Paid-in Capital			Accumulated Deficit			Stockholders’ Deficiency
Balance at January 1, 2020		37,119,117		$	371,190			3,938,287	$	39,383	$	35,562,766		$	(73,041,323	)	$	(37,067,984	)
Issuance of restricted stock units in connection with the acquisition of LiftIgniter		-			-			-		-		500,000			-			500,000
Issuance of restricted stock awards to the board of directors		562,500			5,625			-		-		(5,625	)		-			-
Common stock withheld for taxes		(206,881	)		(2,069	)		-		-		(167,412	)		-			(169,481	)
Stock-based compensation		-			-			-		-		3,930,172			-			3,930,172
Net loss		-			-			-		-		-			(22,776,624	)		(22,776,624	)
Balance at March 31, 2020		37,474,736		$	374,746			3,938,287	$	39,383	$	39,819,901		$	(95,817,947	)	$	(55,583,917	)

	June 30, 2020 (unaudited)			December 31, 2019
Assets
Current assets:
Cash and cash equivalents	$	2,274,789		$	8,852,281
Restricted cash		1,000,809			620,809
Accounts receivable, net		10,561,022			16,233,955
Subscription acquisition costs, current portion		8,750,230			3,142,580
Royalty fees, current portion		15,000,000			15,000,000
Prepayments and other current assets		4,467,607			4,310,735
Total current assets		42,054,457			48,160,360
Property and equipment, net		1,329,534			661,277
Operating lease right-of-use assets		19,589,040			3,980,649
Platform development, net		6,864,805			5,892,719
Royalty fees, net of current portion		18,750,000			26,250,000
Subscription acquisition costs, net of current portion		7,785,479			3,417,478
Acquired and other intangible assets, net		82,194,391			91,404,144
Other long-term assets		1,799,349			1,085,287
Goodwill		16,139,377			16,139,377
Total assets	$	196,506,432		$	196,991,291
Liabilities, mezzanine equity and stockholders’ deficiency
Current liabilities:
Accounts payable	$	8,466,629		$	9,580,186
Accrued expenses and other		12,203,633			16,483,201
Line of credit		3,243,882			-
Unearned revenue		55,419,426			32,163,087
Subscription refund liability		3,277,849			3,144,172
Operating lease liabilities		1,506,992			2,203,474
Liquidated damages payable		9,248,188			8,080,514
Convertible debt		930,375			741,197
Warrant derivative liabilities		1,261,705			1,644,200
Embedded derivative liabilities		8,958,000			13,501,000
Total current liabilities		104,516,679			87,541,031
Unearned revenue, net of current portion		14,816,588			31,179,211
Operating lease liabilities, net of current portion		19,919,015			2,616,132
Other long-term liability		242,310			242,310
Officer promissory notes		322,831			319,351
Convertible debt, net of current portion		15,219,549			12,497,765
Long-term debt		60,390,250			44,009,745
Total liabilities		215,427,222			178,405,545
Commitments and contingencies (Note 12)
Mezzanine equity:
Series G redeemable and convertible preferred stock, $0.01 par value, $1,000 per share liquidation value and 1,800 shares designated; aggregate liquidation value: $168,496; Series G shares issued and outstanding: 168,496; common shares issuable upon conversion: 188,791 at June 30, 2020 and December 31, 2019		168,496			168,496
Series H convertible preferred stock, $0.01 par value, $1,000 per share liquidation value and 23,000 shares designated; aggregate liquidation value $19,399,250; Series H; Series H shares issued and outstanding: 19,400; common shares issuable upon conversion: 58,787,879 at June 30, 2020 and December 31, 2019		18,045,496			18,045,496
Series I convertible preferred stock, $0.01 par value, $1,000 per share liquidation value and 25,800 shares designated; aggregate liquidation value: $23,100,000; Series I shares issued and outstanding: 23,100; common shares issuable upon conversion: 46,200,000 at June 30, 2020 and December 31, 2019		19,699,742			19,699,742
Series J convertible preferred stock, $0.01 par value, $1,000 per share liquidation value and 35,000 shares designated; aggregate liquidation value: $20,000,000; Series J shares issued and outstanding: 20,000; common shares issuable upon conversion: 28,571,428 at June 30, 2020 and December 31, 2019		17,739,996			17,739,996
Total mezzanine equity		55,653,730			55,653,730
Stockholders’ deficiency:
Common stock, $0.01 par value, authorized 1,000,000,000 shares; issued and outstanding: 38,590,363 and 37,119,117 shares at June 30, 2020 and December 31, 2019, respectively		385,902			371,190
Common stock to be issued		25,879			39,383
Additional paid-in capital		43,992,975			35,562,766
Accumulated deficit		(118,979,276	)		(73,041,323	)
Total stockholders’ deficiency		(74,574,520	)		(37,067,984	)
Total liabilities, mezzanine equity and stockholders’ deficiency	$	196,506,432		$	196,991,291

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Revenue	$	23,090,940		$	5,770,283		$	53,503,793		$	12,044,246
Cost of revenue (includes amortization of developed technology and platform development for six months ended 2020 and 2019 of $4,259,333 and $2,686,289, respectively)		24,874,179			5,487,172			51,613,012			11,139,737
Gross profit (loss)		(1,783,239	)		283,111			1,890,781			904,509
Operating expenses
Selling and marketing		8,409,343			1,451,101			17,769,281			2,600,393
General and administrative		7,270,511			5,871,015			17,680,716			10,096,268
Depreciation and amortization		4,127,126			107,637			8,223,806			215,977
Total operating expenses		19,806,980			7,429,753			43,673,803			12,912,638
Loss from operations		(21,590,219	)		(7,146,642	)		(41,783,022	)		(12,008,129	)
Other (expense) income
Change in valuation of warrant derivative liabilities		243,276			(166,075	)		382,495			(541,770	)
Change in valuation of embedded derivative liabilities		2,922,000			(1,396,000	)		4,543,000			(3,779,000	)
Interest expense		(4,116,407	)		(1,876,054	)		(7,916,135	)		(3,177,262	)
Interest income		1,640			63			3,383			3,234
Liquidated damages		(621,619	)		(853	)		(1,167,674	)		(17,740	)
Other		-			-			-			126
Total other expense		(1,571,110	)		(3,438,919	)		(4,154,931	)		(7,512,412	)
Loss before income taxes		(23,161,329	)		(10,585,561	)		(45,937,953	)		(19,520,541	)
Income taxes		-			-			-			-
Net loss	$	(23,161,329	)	$	(10,585,561	)	$	(45,937,953	)	$	(19,520,541	)
Basic and diluted net loss per common share	$	(0.59	)	$	(0.30	)	$	(1.17	)	$	(0.55	)
Weighted average number of common shares outstanding – basic and diluted		39,217,524			35,556,188			39,171,629			35,208,771

							Common Stock to
	Common Stock						be Issued						Additional						Total
	Shares			Par Value			Shares			Par Value			Paid-in Capital			Accumulated Deficit			Stockholders’ Deficiency
Balance at January 1, 2020		37,119,117		$	371,190			3,938,287		$	39,383		$	35,562,766		$	(73,041,323	)	$	(37,067,984	)
Issuance of restricted stock units in connection with the acquisition of LiftIgniter		-			-			-			-			500,000			-			500,000
Issuance of restricted stock awards to the board of directors		562,500			5,625			-			-			(5,625	)		-			-
Common stock withheld for taxes		(206,881	)		(2,069	)		-			-			(167,412	)		-			(169,481	)
Stock-based compensation		-			-			-			-			3,930,172			-			3,930,172
Net loss		-			-			-			-			-			(22,776,624	)		(22,776,624	)
Balance at March 31, 2020		37,474,736		$	374,746			3,938,287			39,383		$	39,819,901		$	(95,817,947	)	$	(55,583,917	)
Issuance of common stock in connection with the acquisition of Say Media		1,350,394			13,504			(1,350,394	)		(13,504	)		-			-			-
Issuance of restricted stock awards to the board of directors		-			-			-			-			-			-			-
Common stock withheld for taxes		(234,767	)		(2,348	)		-			-			(109,992	)		-			(112,340	)
Stock-based compensation		-			-			-			-			4,283,066			-			4,283,066
Net loss		-			-			-			-			-			(23,161,329	)		(23,161,329	)
Balance at June 30, 2020		38,590,363		$	385,902			2,587,893			25,879		$	43,992,975		$	(118,979,276	)	$	(74,574,520	)

	Common Stock						Common Stock to be Issued						Additional						Total
	Shares			Par Value			Shares			Par Value			Paid-in Capital			Accumulated Deficit			Stockholders’ Deficiency
Balance at January 1, 2019		35,768,619		$	357,685			5,127,167		$	51,272		$	23,413,077		$	(34,539,954	)	$	(10,717,920	)
Issuance of common stock in connection with the merger of Say Media		1,188,880			11,889			(1,188,880	)		(11,889	)		-			-			-
Forfeiture of restricted stock		(120,000	)		(1,200	)		-			-			1,200			-			-
Issuance of restricted stock awards to the board of directors		833,333			8,333			-			-			(8,333	)		-			-
Cashless exercise of common stock options		15,341			154			-			-			(154	)		-			-
Stock-based compensation		-			-			-			-			1,487,575			-			1,487,575
Net loss		-			-			-			-			-			(8,934,980	)		(8,934,980	)
Balance at March 31, 2019		37,686,173		$	376,861			3,938,287			39,383		$	24,893,365		$	(43,474,934	)	$	(18,165,325	)
Forfeiture of restricted stock		(580,000	)		(5,800	)		-			-			5,800			-			-
Common stock withheld for taxes		(167,246	)		(1,672	)		-			-			(73,588	)		-			(75,260	)
Stock-based compensation		-			-			-			-			3,044,620			-			3,044,620
Net loss		-			-			-			-			-			(10,585,561	)		(10,585,561	)
Balance at June 30, 2019		36,938,927		$	369,389			3,938,287		$	39,383		$	27,870,197		$	(54,060,495	)	$	(25,781,526	)

	Six Months Ended June 30,
	2020			2019
Cash flows from operating activities
Net loss	$	(45,937,953	)	$	(19,520,541	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of property and equipment		396,966			21,177
Amortization of platform development and intangible assets		12,086,173			2,881,089
Amortization of debt discounts		3,206,982			1,580,796
Change in valuation of warrant derivative liabilities		(382,495	)		541,770
Change in valuation of embedded derivative liabilities		(4,543,000	)		3,779,000
Accrued interest		4,385,240			907,582
Liquidated damages		1,167,674			17,740
Stock-based compensation		7,343,575			3,959,925
Other		(141,188	)		(6,812	)
Change in operating assets and liabilities net of effect of business combination:
Accounts receivable		5,852,029			10,261,222
Factor receivables		-			(6,130,674	)
Subscription acquisition costs		(9,975,651	)		17,056
Royalty fees		7,500,000			(45,000,000	)
Prepayments and other current assets		(156,872	)		140,091
Other long-term assets		(714,062	)		27,628
Accounts payable		(1,167,051	)		(2,672,264	)
Accrued expenses and other		(4,279,568	)		2,414,501
Unearned revenue		6,806,829			(300,057	)
Subscription refund liability		133,677			-
Operating lease liabilities		998,010			(2,810	)
Net cash used in operating activities		(17,420,685	)		(47,083,581	)
Cash flows from investing activities
Purchases of property and equipment		(1,065,223	)		(25,400	)
Capitalized platform development		(2,061,081	)		(980,257	)
Advance related to pending acquisition of TheStreet, Inc.		-			(16,500,000	)
Payments for acquisition of business		(315,289	)		-
Net cash used in investing activities		(3,441,593	)		(17,505,657	)
Cash flows from financing activities
Proceeds from delayed draw term note		6,000,000			-
Proceeds from long-term debt		5,702,725			68,000,000
Repayments of long-term debt		-			(4,640,000	)
Payment of debt issuance costs		-			(3,595,000	)
Proceeds from 12% senior convertible debentures		-			2,000,000
Proceeds from issuance of Series I convertible preferred stock		-			15,000,000
Payment of issuance costs of Series I convertible preferred stock		-			(1,406,000	)
Borrowings under line of credit, net		3,243,882			415,404
Payment for taxes related to repurchase of restricted common stock		(281,821	)		(75,260	)
Repayment of officer promissory notes		-			(366,842	)
Net cash provided by financing activities		14,664,786			75,332,302
Net increase (decrease) in cash, cash equivalents, and restricted cash		(6,197,492	)		10,743,064
Cash, cash equivalents, and restricted cash – beginning of period		9,473,090			2,527,289
Cash, cash equivalents, and restricted cash – end of period	$	3,275,598		$	13,270,353
Supplemental disclosure of cash flow information
Cash paid for interest	$	323,913		$	731,126
Cash paid for income taxes		-			-
Noncash investing and financing activities
Reclassification of stock-based compensation to platform development	$	869,663		$	572,270
Debt discount on delayed draw term note		913,865			-
Restricted stock units issued in connection with acquisition of LiftIgniter		500,000			-
Assumption of liabilities in connection with acquisition of LiftIgniter		140,381			-
Discount of 12% senior convertible debentures allocated to embedded derivative liabilities		-			1,074,000
Liquidated damages liability recorded against cash proceeds for 12% senior convertible debentures		-			84,000
Liquidated damages liability recorded against cash proceeds for Series I convertible preferred stock		-			1,940,400
Series I convertible preferred stock subscription receivable		-			8,100,000

	●	if the additional services and goods are distinct from the services and goods in the original arrangement; and

	●	if the amount of consideration expected for the added services or goods reflects the stand-alone selling price of those services and goods.

	As of June 30,				As of March 31,
	2020		2019		2021		2020
Series G Preferred Stock		188,791		188,791
Series G convertible preferred stock					��	188,791		188,791
Series H Preferred Stock		58,787,879		58,787,879		59,384,849		58,787,879
Series I Preferred Stock		46,200,000		46,200,000		-		46,200,000
Series J Preferred Stock		28,571,428		-		-		28,571,428
Indemnity shares of common stock		412,500		825,000		-		412,500
Restricted Stock Awards		1,433,332		3,574,997		316,667		1,991,665
Financing Warrants		2,882,055		3,949,018		2,882,055		2,882,055
ABG Warrants		21,989,844		-		21,989,844		21,989,844
Channel Partner Warrants		789,541		939,540
AllHipHop warrants						125,000		-
Publisher Partner Warrants						789,541		939,540
Restricted Stock Units		2,399,997		2,399,997		-		2,399,997
Common Stock Awards		8,033,936		9,047,892		7,078,723		8,063,811
Common Equity Awards		82,744,480		48,154,840		157,945,671		77,106,507
Outside Options		2,986,000		3,732,667		3,050,000		3,730,667
Total		257,419,783		177,800,621		253,751,141		253,264,684

Cash	$	315,289
Indemnity restricted stock units for shares of common stock		500,000
Total purchase consideration	$	815,289

Accounts receivable	$	37,908
Developed technology		917,762
Accounts payable		(53,494	)
Unearned revenue		(86,887	)
Net assets acquired	$	815,289

	As of
	March 31, 2021			December 31, 2020
Office equipment and computers	$	1,439,071		$	1,341,292
Furniture and fixtures		19,997			19,997
Leasehold improvements		345,516			345,516
		1,804,584			1,706,805
Less accumulated depreciation and amortization		(687,181	)		(577,367	)
Net property and equipment	$	1,117,403		$	1,129,438

	As of						As of
	June 30, 2020			December 31, 2019			March 31, 2021			December 31, 2020
Platform development	$	13,609,436		$	10,678,692		$	17,204,336		$	16,027,428
Less accumulated amortization		(6,744,631	)		(4,785,973	)		(9,740,665	)		(8,671,820	)
Net platform development	$	6,864,805		$	5,892,719		$	7,463,671		$	7,355,608

	As of June 30, 2020							As of December 31, 2019							As of March 31, 2021							As of December 31, 2020
	Carrying Amount		Accumulated Amortization			Net Carrying Amount		Carrying Amount		Accumulated Amortization			Net Carrying Amount		Carrying Amount		Accumulated Amortization			Net Carrying Amount		Carrying Amount		Accumulated Amortization			Net Carrying Amount
Developed technology	$	20,055,866	$	(6,391,034	)	$	13,664,832	$	19,138,104	$	(4,090,359	)	$	15,047,745	$	19,070,857	$	(9,381,310	)	$	9,689,547	$	19,070,857	$	(8,283,740	)	$	10,787,117
Noncompete agreement		480,000		(372,000	)		108,000		480,000		(252,000	)		228,000		480,000		(480,000	)		-		480,000		(480,000	)		-
Trade name		3,328,000		(364,042	)		2,963,958		3,328,000		(224,745	)		3,103,255		3,328,000		(572,992	)		2,755,008		3,328,000		(503,342	)		2,824,658
Subscriber relationships		73,458,799		(10,846,438	)		62,612,361		73,458,799		(3,587,837	)		69,870,962		73,458,799		(21,734,342	)		51,724,457		73,458,799		(18,105,041	)		55,353,758
Advertiser relationships		2,240,000		(213,577	)		2,026,423		2,240,000		(94,635	)		2,145,365		2,240,000		(391,984	)		1,848,016		2,240,000		(332,515	)		1,907,485
Database		1,140,000		(341,183	)		798,817		1,140,000		(151,183	)		988,817		1,140,000		(626,183	)		513,817		1,140,000		(531,183	)		608,817
Subtotal amortizable intangible assets		100,702,665		(18,528,274	)		82,174,391		99,784,903		(8,400,759	)		91,384,144		99,717,656		(33,186,811	)		66,530,845		99,717,656		(28,235,821	)		71,481,835
Website domain name		20,000		-			20,000		20,000		-			20,000		20,000		-			20,000		20,000		-			20,000
Total intangible assets	$	100,722,665	$	(18,528,274	)	$	82,194,391	$	99,804,903	$	(8,400,759	)	$	91,404,144	$	99,737,656	$	(33,186,811	)	$	66,550,845	$	99,737,656	$	(28,235,821	)	$	71,501,835

Six Months Ended June 30, 2020
Three Months Ended March 31, 2021
Operating cash flows for operating leases	$	1,349,213		$	968,473
Noncash lease liabilities arising from obtaining operating leased assets during the period	$	16,617,790		$	-
Weighted-average remaining lease term		11.13 years			11.02
Weighted-average discount rate		13.46	%		13.58	%

Years Ending December 31,
2020 (remaining six months of the year)	$	1,839,773
2021		3,804,853
2021 (remaining nine months of the year)				$	2,836,380
2022		3,525,158			3,525,158
2023		3,528,696			3,528,696
2024		3,526,406			3,526,406
2025					3,740,591
Thereafter		27,563,572			23,822,981
Minimum lease payments		43,788,458			40,980,212
Less imputed interest		(22,362,451	)		(20,277,693	)
Present value of operating lease liabilities	$	21,426,007		$	20,702,519
Current portion of operating lease liabilities	$	1,506,992		$	1,022,294
Long-term portion of operating lease liabilities		19,919,015			19,680,225
Total operating lease liabilities	$	21,426,007		$	20,702,519

			Payments due by Year
	Total		2020		2021		2022		2023		2024		Thereafter
Operating leases	$	6,132,252	$	2,579,924	$	685,111	$	472,084	$	486,247	$	500,834	$	1,408,052

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

	As of June 30, 2020						As of December 31, 2019
	Strome Warrants			B. Riley Warrants			Strome Warrants			B. Riley Warrants
Expected life		2.96			5.30			3.45			5.80
Risk-free interest rate		0.18	%		0.29	%		1.62	%		1.76	%
Volatility factor		138.50	%		135.13	%		144.54	%		127.63	%
Dividend rate		0	%		0	%		0	%		0	%
Transaction date closing market price	$	0.65		$	0.65		$	0.80		$	0.80
Exercise price	$	0.50		$	1.00		$	0.50		$	1.00

	As of and for the Six Months Ended June 30, 2020							As of and for the Six Months Ended June 30, 2019
	Carry Amount at Beginning of Period		Change in Valuation			Carrying Amount at End of Period		Carry Amount at Beginning of Period		Change in Valuation		Carrying Amount at End of Period
L2 Warrants	$	-	$	-		$	-	$	418,214	$	173,181	$	591,395
Strome Warrants		1,036,687		(260,345	)		776,342		587,971		243,464		831,435
B. Riley Warrants		607,513		(122,150	)		485,363		358,050		125,125		483,175
Total	$	1,644,200	$	(382,495	)	$	1,261,705	$	1,364,235	$	541,770	$	1,906,005

	As of and for the Three Months Ended March 31, 2021						As of and for the Three Months Ended March 31, 2020
	Carry Amount at Beginning of Period		Change in Valuation		Carrying Amount at End of Period		Carry Amount at Beginning of Period		Change in Valuation			Carrying Amount at End of Period
Strome Warrants	$	704,707	$	398,861	$	1,103,568	$	1,036,687	$	(110,081	)	$	926,606
B. Riley Warrants		443,188		266,175		709,363		607,513		(29,138	)		578,375
Total	$	1,147,895	$	665,036	$	1,812,931	$	1,644,200	$	(139,219	)	$	1,504,981

	As of June 30, 2020							As of December 31, 2019
	Principal Balance (including accrued interest)		Unamortized Discount and Debt Issuance Costs			Carrying Value		Principal Balance (including accrued interest)		Unamortized Discount and Debt Issuance Costs			Carrying Value
12% Convertible Debentures, due on December 31, 2020	$	18,146,745	$	(1,996,821	)	$	16,149,924	$	17,119,571	$	(3,880,609	)	$	13,238,962

	●	Amended and restated note issued on June 14, 2019, where the Company received gross proceeds of $48,000,000, together with the $20,000,000 gross proceeds received on June 10, 2019 for total gross proceeds of $68,000,000, due June 14, 2022;

	●	First amendment to the amended and restated note issued on August 27, 2019, where the Company received gross proceeds of $3,000,000;

	●	Second amendment to the amended and restated note issued on February 27, 2020, where the Company issued a $3,000,000 letter of credit to the Company’s landlord for leased premises; and

	●	Second amended and restated note issued on March 24, 2020, where the Company was permitted to enter into a 15.0% delayed draw term note, in the aggregate principal amount of $12,000,000.

				Outstanding
	Exercise Price		Expiration Date	Classified as Derivative Liabilities (Shares)		Classified within Stockholders’ Equity (Shares)		Total Exercisable (Shares)
MDB Warrants	$	0.20	November 4, 2021		-		327,490		327,490
Strome Warrants		0.50	June 15, 2023		1,500,000		-		1,500,000
B. Riley Warrants		1.00	October 18, 2025		875,000		-		875,000
MDB Warrants		1.15	October 19, 2022		-		119,565		119,565
MDB Warrants		2.50	October 19, 2022		-		60,000		60,000
Total outstanding and exercisable					2,375,000		507,055		2,882,055

	Restricted		Common		Common				Channel
	Stock		Stock		Equity		Outside		Partner		ABG
	Awards		Awards		Awards		Options		Warrants		Warrants		Totals
During the Three Months Ended June 30, 2020
Cost of revenue	$	35,750	$	27,970	$	1,073,674	$	1,967	$	27,623	$	-	$	1,166,984
Selling and marketing		298,187		23,783		701,925		43,489		-		-		1,067,384
General and administrative		135,332		138,156		819,916		95,394		-		360,289		1,549,087
Total costs charged to operations		469,269		189,909		2,595,515		140,850		27,623		360,289		3,783,455
Capitalized platform development		75,709		80,608		341,642		1,652		-		-		499,611
Total stock-based compensation	$	544,978	$	270,517	$	2,937,157	$	142,502	$	27,623	$	360,289	$	4,283,066

During the Three Months Ended June 30, 2019
Cost of revenue	$	26,526	$	6,965	$	131,057	$	149	$	6,561	$	-	$	171,258
Selling and marketing		-		25,995		120,036		25,305		-		-		171,336
General and administrative		859,222		395,087		931,393		44,695		-		67,307		2,297,704
Total costs charged to operations		885,748		428,047		1,182,486		70,149		6,561		67,307		2,640,298
Capitalized platform development		194,353		42,793		165,030		2,146		-		-		404,322
Total stock-based compensation	$	1,080,101		470,840	$	1,347,516	$	72,295	$	6,561	$	67,307	$	3,044,620

During the Six Months Ended June 30, 2020
Cost of revenue	$	73,326	$	97,766	$	2,083,266	$	3,173	$	35,662	$	-	$	2,293,193
Selling and marketing		597,402		59,511		1,380,204		98,867		-		-		2,135,984
General and administrative		158,252		309,828		1,575,163		150,577		-		720,578		2,914,398
Total costs charged to operations		828,980		467,105		5,038,633		252,617		35,662		720,578		7,343,575
Capitalized platform development		145,992		121,765		597,643		4,263		-		-		869,663
Total stock-based compensation	$	974,972	$	588,870	$	5,636,276	$	256,880	$	35,662	$	720,578	$	8,213,238

During the Six Months Ended June 30, 2019
Cost of revenue	$	61,901	$	27,184	$	131,057	$	1,278	$	18,909	$	-	$	240,329
Selling and marketing		34,393		47,940		120,036		77,251		-		-		279,620
General and administrative		1,574,859		799,517		932,285		66,008		-		67,307		3,439,976
Total costs charged to operations		1,671,153		874,641		1,183,378		144,537		18,909		67,307		3,959,925
Capitalized platform development		332,309		72,785		165,030		2,146		-		-		572,270
Total stock-based compensation	$	2,003,462		947,426	$	1,348,408	$	146,683	$	18,909	$	67,307	$	4,532,195

Registration rights damages	$	120,000
Public information failure damages		180,000
Accrued interest		19,903
	$	319,903

	●	~~the restricted stock awards would cease to vest and all unvested shares would be deemed unvested and forfeited, leaving an aggregate of 1,064,549 shares vested;~~

	●	the restricted stock units were modified to vest on December 31, 2020 and as of the close of business on December 31, 2020, each restricted stock unit was terminated and deemed forfeited, with no shares vesting thereunder; and

	●	subject to certain conditions, the Company agreed to purchase from certain key personnel the vested restricted stock awards, at a price of $4.00 per share in 24 equal monthly installments on the second business day of each calendar month beginning on January 4, 2021.