Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or Section 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.

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).

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

If an emerging growth company, indicate 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).

As of ~~August 17,~~November 22, 2021, there were ~~65,564,435~~137,083,339 shares of the registrant’s common stock outstanding.

This Quarterly Report on Form 10-Q includes market and industry data that we have obtained from third-party sources, including industry publications, as well as industry data prepared by our management on the basis of its knowledge of and experience in the industries in which we operate (including our management’s estimates and assumptions relating to such industries based on that knowledge). Management has developed its knowledge of such industries through its experience and participation in these industries. While our management believes the third-party sources referred to in this Quarterly Report on Form 10-Q are reliable, neither we nor our management have independently verified any of the data from such sources referred to in this Quarterly Report on Form 10-Q or ascertained the underlying economic assumptions relied upon by such sources. Furthermore, internally prepared and third-party market prospective information, in particular, are estimates only and there will usually be differences between the prospective and actual results, because events and circumstances frequently do not occur as expected, and those differences may be material. Also, references in this Quarterly Report on Form 10-Q to any publications, reports, surveys or articles prepared by third parties should not be construed as depicting the complete findings of the entire publication, report, survey or article. The information in any such publication, report, survey or article is not incorporated by reference in this Quarterly Report on Form 10-Q.

Solely for convenience, we refer to trademarks in this Quarterly Report on Form 10-Q without the ® or the ™ or symbols, but such references are not intended to indicate that we will not assert, to the fullest extent under applicable law, our rights to our own trademarks. Other service marks, trademarks and trade names referred to in this Quarterly Report on Form 10-Q, if any, are the property of their respective owners, although for presentational convenience we may not use the ® or the ™ symbols to identify such trademarks.

Unless the context otherwise indicates, when used in this Quarterly Report on Form 10-Q, the terms “Vinco Ventures” “we,” “us,” “our,” the “Company” and similar terms refer to Vinco Ventures, Inc., a Nevada corporation formerly known as Edison Nation, Inc., Xspand Products Lab, Inc. and Idea Lab Products, Inc., and all of our subsidiaries and affiliates.

This Quarterly Report on Form 10-Q for the period ended ~~June~~September 30, 2021 (the “Quarterly Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements relate to future events (including, without limitation, the terms, timing and closing of our proposed acquisitions or our future financial performance). We have attempted to identify forward-looking statements by using terminology such as “anticipates,” “believes,” “expects,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predict,” “should” or “will” or the negative of these terms or other comparable terminology. These statements are only predictions; uncertainties and other factors may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels or activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Our expectations are as of the date this Quarterly Report is filed, and we do not intend to update any of the forward-looking statements after the date this Quarterly Report is filed to confirm these statements to actual results, unless required by law.

You should not place undue reliance on forward looking statements. The cautionary statements set forth in this Quarterly Report identify important factors which you should consider in evaluating our forward-looking statements. These factors include, among other things:

This Quarterly Report on Form 10-Q also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other industry data. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We have not independently verified the statistical and other industry data generated by independent parties and contained in this Quarterly Report and, accordingly, we cannot guarantee their accuracy or completeness, though we do generally believe the data to be reliable. In addition, projections, assumptions and estimates of our future performance and the future performance of the industries in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including, but not limited to, the possibility that we may fail to ~~preserve~~enhance our expertise and offerings in ~~consumer product development;~~the media and entertainment industry; that existing and potential distribution partners and other business partners we rely on for our business may opt to work with, or favor the products and services of, competitors if our competitors offer more favorable products, services or pricing terms; that we may be unable to maintain or grow sources of revenue; that we may be unable to maintain or achieve profitability; that we may be unable to attract and retain key personnel; or that we may not be able to effectively manage, or to increase, our relationships with ~~customers;~~customers and users; that we may have unexpected increases in costs and expenses.

Specifically, our investment in Lomotif and related growth initiatives may fail to deliver our expected benefits, for reasons relating to including, but not limited to, our and Lomotif’s capital requirements and whether we will be able to raise capital as needed; our ability to successfully develop the business and revenue models for Lomotif’s social media platform, Lomo TV, and Lomo Records with ZASH; whether Lomotif can retain its existing users and attract new users to its platform; whether Lomotif can attract and maintain relationships with influencers, artists, and other content creators or publishers who will provide compelling content to the platform; our ability to integrate the operations of Lomotif within the Vinco Ventures conglomerate and create synergies between Lomotif and other businesses and assets we have acquired or plan to acquire in the media and entertainment industry; the ability of Lomotif’s platform and associated products and services to compete effectively; Lomotif’s ability to retain reliable developers, vendors and suppliers to support its operations; failure of third parties to promote Lomotif’s platform and associated products and services effectively or at all; breaches of network and data security measures; a disruption or failure of networks and information systems; Lomotif’s ability to protect its patents and other intellectual property and operate its businesses without infringing upon the intellectual property rights of others; changes in local, state, federal and international laws and regulations that will adversely affect Lomotif’s business; risk of attempts at unauthorized or improper use of the platform and damages to Lomotif’s reputations resulted therefrom; the inability to maintain or rebuild the value of the Lomotif brands; the inability to successfully respond to rapid changes in technologies and user tastes and preferences and remain competitive; the impact of any legal proceedings or governmental action against Lomotif; and whether Lomotif will continue to receive the services of key management and retain qualified personnel. These and other factors discussed above could cause results to differ materially from those expressed in the estimates made by ~~the~~any independent parties and by us.

The accompanying notes are an integral part of these condensed consolidated financial statements.


	For the Three Months Ended June 30,						For the Six Months Ended June 30,						For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2021 (Unaudited)			2020 (Unaudited)			2021 (Unaudited)			2020 (Unaudited)			2021 (Unaudited)			2020 (Unaudited)			2021 (Unaudited)			2020 (Unaudited)
Revenues, net	$	2,691,811		$	5,173,982		$	5,256,973		$	7,127,328		$	2,231,986		$	2,522,141		$	7,488,959		$	9,649,469
Cost of revenues		1,721,189			4,004,936			3,374,570			5,368,655			1,531,840			1,505,234			4,906,410			6,873,889
Gross profit		970,622			1,169,046			1,882,403			1,758,673			700,146			1,016,907			2,582,549			2,775,580

Operating expenses:
Selling, general and administrative		5,941,652			2,377,853			17,602,532			5,567,516			25,869,419			2,617,961			43,471,951			8,185,477
Operating loss		(4,971,030	)		(1,208,807	)		(15,720,129	)		(3,808,843	)		(25,169,273	)		(1,601,054	)		(40,889,402	)		(5,409,897	)

Other (expense) income:
Rental income		28,703			25,703			54,407			51,407			17,136			25,704			71,543			77,111
Interest expense		(2,715,481	)		(847,154	)		(15,410,414	)		(1,571,111	)		(27,012,312	)		(1,004,627	)		(42,422,726	)		(2,575,738	)
Loss on issuance of warrants		(133,699,181	)		-			(208,855,715	)		-			(206,948,147	)		-			(415,803,862	)		-
Change in fair value of warrant liability		(37,154,989	)		-			(773,447	)		-			(287,117,556	)		-			(287,891,003	)		-
Change in fair value of short-term investment		(52,000	)		-			(122,000	)		-			(614,000	)		-			(736,000	)		-
Loss on disposal of interest in joint venture		(301,645	)		-			(301,645	)		-			-			-			(301,645	)		-
Gain on divestiture		-			-			-			-
Other income														649,009			-			649,009			-
Total other (expense) income		(173,894,593	)		(821,451	)		(225,408,814	)		(1,519,704	)		(521,025,870	)		(978,923	)		(746,434,684	)		2,498,627
Loss before income taxes		(178,865,623	)		(2,030,258	)		(241,128,943	)		(5,328,547	)		(546,195,143	)		(2,579,977	)		(787,324,086	)		(7,908,524	)
Income tax expense		-			-			-			-			-			-			-			-
Net loss from continuing operations	$	(178,865,623	)	$	(2,030,258	)	$	(241,128,943	)	$	(5,328,547	)	$	(546,195,143	)	$	(2,579,977	)	$	(787,324,086	)	$	(7,908,524	)
Net income (loss) attributable to noncontrolling interests		22,543			22,241			50,577			22,241
Net loss attributable to noncontrolling interests														(3,885,333	)		(37,439	)		(3,834,756	)		(15,198	)
Net loss from continuing operations attributable to Vinco Ventures, Inc.		(178,888,166	)		(2,052,499	)		(241,179,520	)		(5,350,788	)		(542,309,810	)		(2,542,538	)		(783,489,330	)		(7,893,326	)
Net loss from discontinued operations		(4,780,580	)		428,119			(4,958,780	)		4,995,900
Net income (loss) from discontinued operations														(153,320	)		(291,506	)		(5,112,100	)		4,704,394
Provision for income taxes for discontinued operations		-			-			-			-			-			-			-			-
Net loss attributable to Vinco Ventures, Inc.	$	(183,668,746	)	$	(1,624,380	)	$	(246,138,300	)	$	(354,888	)	$	(542,463,130	)	$	(2,834,044	)	$	(788,601,430	)	$	(3,188,932	)
Net loss per share:
Net (loss) income per share - basic	$	(5.13	)	$	(0.18	)	$	(8.95	)	$	(0.04	)
Net (loss) income per share - diluted	$	(5.13	)	$	(0.18	)	$	(8.95	)	$	(0.04	)
Net loss per share - basic													$	(7.59	)	$	(0.30	)	$	(18.63	)	$	(0.29	)
Net loss per share - diluted													$	(7.59	)	$	(0.30	)	$	(18.63	)	$	(0.29	)
Weighted average number of common shares outstanding – basic and diluted		35,831,466			8,920,554			27,489,580			8,551,012			71,516,431			9,324,023			42,326,468			10,853,242

The accompanying notes are an integral part of these condensed consolidated financial statements.

	For the three months ended June 30, 2021 and 2020:																						For the three months ended September 30, 2021 and 2020:
	Preferred stock						Common Stock				Additional Paid-in			Accumulated			Noncontrolling			Total Stockholders’			Preferred stock				Common Stock				Additional Paid-in			Accumulated			Noncontrolling			Total Stockholders’
	Shares			Amount			Shares		Amount		Capital			Deficit			Interest			Equity			Shares		Amount		Shares		Amount		Capital			Deficit			Interest			Equity

Balance, March 31, 2021 (Unaudited)		764,618			765			25,685,981	$	25,686	$	66,002,229		$	(86,118,452	)	$	(1,865,863	)	$	(21,955,635	)
Balance, June 30, 2021 (Unaudited)																								-		-		59,927,241	$	59,927	$	244,026,879		$	(269,787,198	)	$	(1,843,320	)	$	(27,543,712	)
Issuance of common stock to investors																								-		-		1,007,194		1,007		2,798,993			-			-			2,800,000
Issuance of common stock to consultants		-			-			451,272		451		(451	)		-			-			-			-		-		425,000		425		1,163,434			-			-			1,163,859
Issuance of common stock to employees		-			-			1,598,355		1,598		(1,598	)		-			-			-			-		-		30,000		30		(30	)		-			-			-
Issuance of common stock upon exercise of warrants		-			-			30,862,188		30,862		86,063,953			-			-			86,094,815			-		-		37,469,814		37,470		92,518,525			-			-			92,555,995
Offering costs – exercise of warrants		-			-			-		-		(7,379,064	)		-			-			(7,379,064	)		-		-		-		-		(5,001,251	)		-			-			(5,001,251	)
Conversions under notes payable		-			-			564,827		565		1,153,922			-			-			1,154,487			-		-		5,412,132		5,412		20,175,838			-			-			20,181,250
Conversion of preferred stock into common stock		(764,618	)		(765	)		764,618		765		-			-			-			-			-		-		-		-		-			-			-			-
Exercise of warrant liabilities		-			-			-		-		89,394,620			-			-			89,394,620			-		-		-		-		248,366,633			-			-			248,366,633
Issuance of common stock – acquisitions																								-		-		2,750,000		2,750		8,879,750			-			-			8,882,500
Stock-based compensation		-			-			-		-		1,393,268			-			-			1,393,268			-		-		-		-		5,023,571			-			479,161			5,502,732
Shares reserved for future issuance of common stock as consideration for the Emmersive asset acquisition		-			-			-		-		7,400,000			-			-			7,400,000
Net income (loss)		-			-			-		-		-			(183,668,746	)		22,543			(183,646,203	)
Balance, June 30, 2021 (Unaudited)		-		$	-			59,927,241	$	59,927	$	244,026,879		$	(269,787,198	)	$	(1,843,320	)	$	(27,543,712	)
Noncontrolling interest																								-		-		-		-		-			-			27,441,251			27,441,251
Net loss																								-		-		-		-		-			(542,463,130	)		(3,885,333	)		(546,348,463	)
Balance, September 30, 2021 (Unaudited)																								-	$	-		107,021,381	$	107,021	$	617,952,342		$	(812,250,328	)	$	22,191,759		$	(171,999,206	)

Balance, March 31, 2020 (Unaudited)		-		$	-			8,676,501	$	8,677	$	28,790,704		$	(17,225,970	)	$	(344,090	)	$	11,229,321
Balance, June 30, 2020 (Unaudited)																								-	$	-		9,618,401	$	9,618	$	30,802,083		$	(18,850,350	)	$	(1,020,849	)	$	10,940,502
Issuance of common stock to note holders		-			-			279,400		279		588,411			-			-			588,690			-		-		763,266		763		1,502,087			-			-			1,502,850
Issuance of common stock for divestiture		-			-			150,00		150		404,850			-			-			405,000
Issuance of common stock to employees																								-		-		150,000		150		319,350			-			-			319,500
Issuance of common stock to consultants		-			-			212,500		212		(212	)		-			-			-			-		-		371,624		372		1,192,246			-			-			1,192,618
Stock-based compensation		-			-			-		-		319,630			-			-			319,630			-		-		-		-		(387,074	)		-			-			(387,074	)
Issuance of common stock for Global Clean Solutions, LLC acquisition		-			-			300,000		300		698,700			-			-			699,000
Issuance of common stock cancellation of non-voting membership interest in Edison Nation Holdings, LLC																								-		-		990,000		990		(990	)		-			-			-
Distributions		-			-			-		-		-			-			(699,000	)		(699,000	)		-		-		-		-		-			-			(71,931	)		(71,931	)
Net (loss) income		-			-			-		-		-			(1,624,380	)		22,241			(1,602,139	)
Balance, June 30, 2020 (Unaudited)		-			-			9,618,401		9,618		30,802,083			(18,850,350	)		(1,020,849	)		10,940,502
Net loss																								-		-		-		-		-			(2,834,044	)		(37,439	)		(2,871,483	)
Balance, September 30, 2020 (Unaudited)																								-		-		11,893,291		11,893		33,427,702			(21,684,394	)		(1,130,219	)		10,624,982

The accompanying notes are an integral part of these condensed consolidated financial statements.

	2021 (Unaudited)			2020 (Unaudited)
	Six Months Ended June 30,						Nine Months Ended September 30,
	2021 (Unaudited)			2020 (Unaudited)			2021 (Unaudited)			2020 (Unaudited)
Cash Flow from Operating Activities
Net loss from continuing operations attributable to Vinco Ventures, Inc.	$	(241,179,520	)	$	(5,350,788	)	$	(783,489,330	)	$	(7,893,326	)
Net income attributable to noncontrolling interests		50,577			22,241			(3,834,756	)		(15,198	)
Net loss from continuing operations		(241,128,943	)		(5,328,547	)		(787,324,086	)		(7,908,524	)
Adjustments to reconcile net (income) loss to net cash used in operating activities:
Discontinued operations		(4,958,780	)		4,995,900			(5,112,100	)		4,704,394
Depreciation and amortization		1,081,623			612,406			5,013,544			938,844
Amortization of financing costs		15,597,936			1,227,046			42,324,603			2,015,422
Stock-based compensation		10,003,767			1,588,427			16,829,359			2,765,022
Amortization of right of use asset		48,327			153,820			80,333			226,167
Gain on debt extinguishment		(852,352	)		-			(852,352	)		-
Loss on disposal of discontinued operations		4,130,580			(4,911,760	)
Loss (gain) on divestiture								4,130,580			(4,911,760	)
Loss on disposal of joint venture								304,643			-
Change in fair value of short-term investments		122,400			-			736,000			-
Loss on issuance of warrants		208,855,715			-			415,803,862			-
Change in fair value of warrant liability		773,447			-			287,891,003			-
Changes in assets and liabilities:
Accounts receivable		(1,596,881	)		(978,097	)		(591,061	)		(1,037,432	)
Inventory		169,793			178,227			232,213			(146,126	)
Prepaid expenses and other current assets		(378,831	)		(967,109	)		(2,835,791	)		(612,276	)
Accounts payable		(819,943	)		(344,847	)		2,027,185			(367,355	)
Accrued expenses and other current liabilities		(775,082	)		1,425,622			(356,941	)		1,237,169
Operating lease liabilities		(47,714	)		(148,518	)		(80,582	)		(219,608	)
Due from related party		(17,050	)		9,532			(17,050	)		4,753
Net cash used in operating activities		(9,791,988	)		(2,487,898	)		(21,796,639	)		(3,311,310	)

Cash Flows from Investing Activities
Purchase of property and equipment		(88,633	)		(61,917	)		(281,164	)		(193,429	)
Cash received from sale of assets of CBAV 1, LLC		2,529,564			-			2,529,565			-
Equity method investment		(12,000,000	)		-
Acquisition, net of cash received								(90,761,200	)		-
Funding of loan receivable		(5,000,000	)		-			(20,150,000	)		-
Net cash used in investing activities		(14,559,069	)		(61,917	)		(108,662,799	)		(193,429	)

Cash Flows from Financing Activities
(Repayments) borrowings under line of credit		(379,333	)		1,678,540
Borrowings under line of credit								-			1,144,100
Borrowings under convertible notes payable		19,720,000			1,436,000			122,000,000			1,660,000
Borrowings under notes payable		73,000			1,767,352			73,000			1,739,852
Repayments under lines of credit								(379,333	)		-
Repayments under notes payable		(2,145,475	)		(824,472	)		(1,143,318	)		(947,127	)
Repayments under convertible notes payable								(1,498,462	)		-
Repayments under notes payable- related parties		(1,951,012	)		(14,508	)		(2,714,677	)		(14,508	)
Fees paid for financing costs		(120,261	)		(143,479	)		(10,205,678	)		(33,762	)
Distributions								-			(71,931	)
Net proceeds from issuance of common stock		3,255,000			-			6,055,000			-
Net proceeds from exercise of warrants		80,406,355			-			167,961,099			-
Net cash provided by financing activities		98,858,274			3,899,433			280,147,631			3,476,624
Net increase (decrease) in cash and cash equivalents		74,507,217			1,349,618
Cash and cash equivalents - beginning of period		249,356			412,719
Cash and cash equivalents - end of period	$	74,756,573			1,762,337
Net increase (decrease) in cash and cash equivalents, and restricted cash								149,688,193			(28,115	)
Cash and cash equivalents, and restricted cash – beginning of period								249,356			412,719
Cash and cash equivalents, and restricted cash - end of period							$	149,937,549			384,604

Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:
Interest	$	858,388		$	144,740		$	976,282		$	239,682
Income taxes	$	(14,738	)	$	235,725		$	-		$	235,725
Noncash investing and financing activity:
Shares issued to note holders	$	422,672		$	-		$	422,672		$	2,292,864
Shares issued to holder of line of credit							$	1,178,750		$	-
Shares issued for the divestiture of Cloud B, Inc.							$	-		$	405,000
Shares issued for the acquisition of Lomotif Private Limited							$	10,135,000		$	-
Conversions under notes payable	$	12,248,507		$	424,000		$	31,251,007		$	1,524,000
Issuance of warrants to note holders	$	208,855,715		$	-		$	102,938,515		$	1,018,953
Shares reserved for EVNT, LLC	$	7,400,000		$	-		$	7,400,000		$	-
Distribution for issuance of shares to noncontrolling interest members of Global Clean Solutions, LLC							$	-		$	699,000

The accompanying notes are an integral part of these condensed consolidated financial statements.

The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and with Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (the “SEC”). Accordingly, they do not contain all information and footnotes required by GAAP for annual financial statements. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of ~~June~~September 30, 2021 and the results of operations, changes in stockholders’ equity, and cash flows for the periods presented. The results of operations for the three and ~~six~~nine months ended ~~June~~September 30, 2021 are not necessarily indicative of the operating results for the full fiscal year for any future period.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. The Company’s accounting policies are described in the Notes to Consolidated Financial Statements in its Annual Report on Form 10-K for the year ended December 31, 2020, and updated, as necessary, in this Quarterly Report on Form 10-Q.

As used herein, the terms the “Company,” “Vinco Ventures” “we,” “us,” “our” and similar refer to Vinco Ventures, Inc. (f/k/a Edison Nation, Inc.), a Nevada corporation incorporated on July 18, 2017 under the laws of the State of Nevada as Idea Lab X Products, Inc. and also formerly known as Xspand Products Lab, Inc. prior to its name change on September 12, 2018, and/or its wholly-owned and majority-owned operating subsidiaries. On November 5, 2020, the Company (the “Parent”) and its wholly owned subsidiary, Vinco Ventures, Inc. (the “Merger Sub”), entered into an Agreement and Plan of Merger (the “Agreement”). Under the terms of the Agreement, the Merger Sub merged with and into the Parent and the Parent became the surviving corporation of the Merger (the “Surviving Corporation”). The name of the Surviving Corporation became Vinco Ventures, Inc. The transaction closed on November 10, 2020.

Vinco Ventures is ~~a vertically-integrated, end-to-end, consumer product research & development, manufacturing, sales~~focused on digital media and ~~fulfillment company. The Company’s proprietary web-enabled platform provides a low risk, high reward platform and process to connect innovators of new product ideas with potential licensees.~~content technologies.

As of ~~June~~September 30, 2021, Vinco Ventures ~~had eight~~ wholly-owned ~~subsidiaries:~~subsidiaries included: Cryptyde, Inc. (“Cryptyde”), Cryptyde Shared Services, LLC (“Cryptyde Shared”), CW Machines, LLC (“CW”), TBD Safety, LLC (“TBD”), Vinco Ventures Shared Services LLC (“Vinco ~~Shared~~”Shared”), Ferguson Containers, Inc. (“Fergco”), CBAV1, LLC (“CB1”), Pirasta, LLC (“Pirasta”), Honey Badger Media LLC (“Honey Badger”), EVNT Platform LLC (“Emmersive Entertainment”) and Edison Nation Holdings, LLC. ~~Vinco Ventures owns~~ 50~~% of Best Party Concepts, LLC and Global Clean Solutions, LLC, all of which are consolidated as VIE’s with noncontrolling interests.~~ Edison Nation Holdings, LLC is the single member of Edison Nation, LLC and Everyday Edisons, LLC. Edison Nation, LLC is the single member of Safe TV Shop, LLC. Vinco Ventures owns a 50% voting membership interest in ZVV Media Partners, LLC (“ZVV”), 50% of Best Party Concepts, LLC and 50% of Global Clean Solutions, LLC, all of which are consolidated as VIE’s with noncontrolling interests. ZVV owns 80% of Lomotif Private Limited (“Lomotif”). Lomotif owns 100% of Lomotif, Inc.

In April 2021, the Company agreed to unwind the joint venture of Ed Roses, LLC and recognized a loss of $301,645.

On September 12, 2021, the Company filed Articles of Incorporation with the State of Nevada for a new wholly owned subsidiary, Cryptyde, Inc.

On September 16, 2021, Cryptyde Shares Services, LLC was formed as a wholly-owned subsidiary of Ferguson Containers, Inc.

On September 16, 2021, EVNT Platform, LLC became a wholly-owned subsidiary of Ferguson Containers, Inc.

For the ~~six~~nine months ended ~~June~~September 30, 2021, our operations lost approximately $~~15,720,129~~40,889,402, of which approximately $~~11,085,000~~ 21,416,921was non-cash and approximately $~~1,428,000~~ 6,528,000was related to transaction costs and other non-recurring items.

At ~~June~~September 30, 2021, we had total current assets of approximately $~~80,620,757~~ 174,916,076and current liabilities of approximately $~~8,829,464~~37,427,946 resulting in working capital of approximately $~~71,791,293~~137,488,130, of which $~~3,333,333~~28,481,485 was convertible notes payable. At ~~June~~September 30, 2021, we had total assets of $~~121,276,499~~336,914,684 and total liabilities of $~~148,820,211~~508,913,890, of which ~~139,695,115~~468,612,700 was related to the warrant liabilities,resulting in stockholders’ deficit of $~~27,543,712~~171,999,206.

The Company received proceeds of $.45,959,160 from sale of our securities subsequent to September 30, 2021.

The Company believes it has sufficient cash for at least the next twelve months from the date of issuance of these condensed financial statements. The ability to continue as a going concern is dependent upon the Company’s ability to attract significant new

Our principal sources of capital ~~attain a reasonable threshold of operating efficiencies~~are our cash and ~~achieve profitable operations~~cash equivalents, and cash generated from ~~the~~ sale of ~~its products.~~

our securities. Our principal uses of capital are operating ~~needs include the planned costs to operate our business,~~expenses, including amounts required to fund working capital and capital ~~expenditures. Our future~~expenditures, acquisition costs and capital ~~requirements~~contributions to our subsidiaries and ~~the adequacy of~~consolidated variable interest entities. We currently anticipate that our available funds and cash flow from financing activities will ~~depend on many factors, including~~be sufficient to meet our ~~ability to successfully commercialize~~operational cash needs and fund our ~~products~~planned acquisitions and ~~services, competing technological and market developments, and~~investments for at least the ~~need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement our product and service offerings.~~next twelve months.

The consolidated financial statements include the accounts of Vinco Ventures, Inc. and its wholly-owned, ~~and~~ majority owned ~~subsidiaries.~~ subsidiaries and consolidated variable interest entities. All intercompany balances and transactions have been eliminated.

Certain amounts previously presented in the consolidated financial statements have been reclassified to conform to the current year presentation. Such reclassifications had no effect on the previously reported net loss, Stockholders’ equity or cash flows.

Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, together with amounts disclosed in the related notes to the financial statements.

The Company’s significant estimates used in these financial statements include, but are not limited to, accounts receivable reserves, the valuation allowance related to the Company’s deferred tax assets, the recoverability and useful lives of long-lived assets, debt conversion features, stock-based compensation, certain assumptions related to the valuation of the reserved shares and the assets acquired and liabilities assumed related to the Company’s acquisitions. Certain of the Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is reasonably possible that these external factors could have an effect on the Company’s estimates and could cause actual results to differ from those estimates.

A component of an entity that is disposed of by sale or abandonment is reported as discontinued operations if the transaction represents a strategic shift that will have a major effect on an entity’s operations and financial results. The results of discontinued operations are aggregated and presented separately in the Consolidated Statement of Operations. Assets and liabilities of the discontinued operations are aggregated and reported separately as assets and liabilities of discontinued operations in the Consolidated Balance Sheet, including the comparative prior year period. The Company’s cash flows are reflected as cash flows from discontinued operations within the Company’s Consolidated Statements of Cash Flows for each period presented.

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents in the consolidated financial statements.

Restricted cash includes cash held in a bank under a deposit account control agreement with Hudson Bay Master Fund.

The Company has cash on deposit in several financial institutions which, at times, may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The Company has not experienced losses in such accounts and periodically evaluates the creditworthiness of its financial institutions. The Company reduces its credit risk by placing its cash and cash equivalents with major financial institutions. The Company had approximately $~~74,756,573~~149,937,549 of cash and cash equivalents at ~~June~~September 30, 2021 of which none was held in foreign bank accounts and $147,451,668 wasnot covered by FDIC insurance limits as of ~~June~~September 30, 2021. The Company had $100,000,000 of cash at September 30, 2021 under a deposit account control agreement as collateral against the July 2021 Hudson Bay Financing (See Note 10 — Debt).

Accounts receivable are carried at their contractual amounts, less an estimate for uncollectible amounts. Management estimates the allowance for bad debts based on existing economic conditions, historical experience, the financial conditions of the customers, and the amount and age of past due accounts. Receivables are considered past due if full payment is not received by the contractual due date. Past due accounts are generally written off against the allowance for bad debts only after all collection attempts have been exhausted.

NoTwo customers represented ~~more than 10%~~34% and 14% of total accounts ~~receivable.~~receivable, respectively as of September 30, 2021.

Inventory is recorded at the lower of cost or net realizable value on a first-in, first-out basis. The Company reduces the carrying value of inventories for those items that are potentially excess, obsolete, or slow moving based on changes in customer demand, technology developments, or other economic factors.

Short-term investments consisted of equity securities. The Company classified its investments as trading securities. Accordingly, such investments were reported at fair market value, with the resultant unrealized gains and losses reported as a component of the consolidated statements of operations. Fair value for trading securities was determined by reference to quoted market prices.

Property and equipment are stated at cost, net of accumulated depreciation and amortization, which is recorded commencing at the in-service date using the straight-line method over the estimated useful lives of the assets, as follows: 3 to 5 years for office equipment, 5to 7 years for furniture and fixtures, 6 to 10 years for machinery and equipment, 10 to 15 years for building improvements,5 years for software,5 years for molds, 5 to 7 years for vehicles and 40 years for buildings.

We ~~apply the equity method of accou~~nting to investments when we have significant influence, but not controlling interest in the investee. Judgment regarding the level of influence over each equity method investment includes considering key factors such as ownership interest, representationrecord intangible assets based on their fair value on the ~~board~~date of ~~directors, participation in policy-making decisions and material intercompany transactions. The Company’s proportionate share~~acquisition. Goodwill is recorded for the difference between the fair value of the purchase consideration over the fair value of the net ~~income (loss) resulting from~~identifiable tangible and intangible assets acquired. We perform an impairment assessment of goodwill on an annual basis, or whenever impairment indicators exist. In the absence of any impairment indicators, goodwill is assessed for impairment during the fourth quarter of each fiscal year. Judgments regarding the existence of impairment indicators are based on market conditions and operational performance of the business.

We may assess our goodwill for impairment initially using a qualitative approach to determine whether it is more likely than not that the fair value of these ~~investments will~~assets is greater than their carrying value. When performing a qualitative test, we assess various factors including industry and market conditions, macroeconomic conditions and performance of our businesses. If the results of the qualitative assessment indicate that it is more likely than not that our goodwill and other indefinite-lived intangible assets are impaired, a quantitative impairment analysis would be ~~reported under~~performed to determine if impairment is required. We may also elect to perform a ~~line-item captioned equity~~quantitative analysis of goodwill initially rather than using a qualitative approach.

The impairment testing for goodwill is performed at the reporting unit level. The valuation methods used in the quantitative fair value assessment, discounted cash flow and market multiples method, ~~investment income in~~requires our ~~Consolidated Statements~~management to make certain assumptions and estimates regarding certain industry trends and future profitability of ~~Operations. The~~our reporting units. If the fair value of a reporting unit exceeds the related carrying value, the reporting unit’s goodwill is considered not to be impaired and no further testing is performed. If the carrying value of ~~our equity method investments~~a reporting unit exceeds its fair value, an impairment loss is ~~reported in equity method investments in the Consolidated Balance Sheets. The Company’s equity method investments are reported at cost and adjusted each period~~recorded for the ~~Company’s share~~difference. The valuation of goodwill is affected by, among other things, our business plan for the ~~investee’s income or loss~~future and ~~dividend paid, if any. The Company classifies distributions received from equity-method investments using~~estimated results of future operations. Future events could cause us to conclude that impairment indicators exist, and, therefore, that goodwill may be impaired.

Intangible assets include the ~~cumulative earnings approach on~~cost of developed technology, customer relationships, trademarks and identifiable media platforms. Intangible assets are amortized utilizing the ~~Consolidated Statements of Cash Flows. The Company assesses investments~~straight-line method over their remaining economic useful lives. Vinco Ventures reviews long-lived assets and intangible assets for potential impairment ~~whenever~~annually and when events or changes in circumstances indicate ~~that~~ the carrying ~~value~~amount of an ~~investment~~asset may not be recoverable. ~~The Company did~~In the event the expected undiscounted future cash flows resulting from the use of the asset is less than the carrying amount of the asset, an impairment loss is recorded equal to the excess of the asset’s carrying value over its fair value. If an asset is determined to be impaired, the loss is measured based on quoted market prices in active markets, if available. If quoted market prices are not ~~record any impairments relate~~davailable, the estimate of fair value is based on various valuation techniques, including a discounted value of estimated future cash flows. In the event that management decides to ~~its investments in 2021. For~~no longer allocate resources to a patent portfolio, an impairment loss equal to the ~~six months ended June 30, 2021, there was no income or loss.~~remaining carrying value of the asset is recorded.

Generally, the Company considers all revenues as arising from contracts with ~~customers.~~customers. Revenue is recognized based on the five-step process outlined in the Accounting Standards Codification (“ASC”) 606:

Step 1 – Identify the Contract with the Customer – A contract exists when (a) the parties to the contract have approved the contract and are committed to perform their respective obligations, (b) the entity can identify each party’s rights regarding the goods or services to be transferred, (c) the entity can identify the payment terms for the goods or services to be transferred, (d) the contract has commercial substance and it is probable that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.

Step 2 – Identify Performance Obligations in the Contract – Upon execution of a contract, the Company identifies as performance obligations each promise to transfer to the customer either (a) goods or services that are distinct, or (b) a series of distinct goods or services that are substantially the same and have the same pattern of transfer to the customer. To the extent a contract includes multiple promised goods or services, the Company must apply judgement to determine whether the goods or services are capable of being distinct within the context of the contract. If these criteria are not met, the goods or services are accounted for as a combined performance obligation.

Step 3 – Determine the Transaction Price – When (or as) a performance obligation is satisfied, the Company shall recognize as revenue the amount of the transaction price that is allocated to the performance obligation. The contract terms are used to determine the transaction price. Generally, all contracts include fixed consideration. If a contract did include variable consideration, the Company would determine the amount of variable consideration that should be included in the transaction price based on expected value method. Variable consideration would be included in the transaction price, if in the Company’s judgement, it is probable that a significant future reversal of cumulative revenue under the contract would not occur.

Step 4 – Allocate the Transaction Price – After the transaction price has been determined, the next step is to allocate the transaction price to each performance obligation in the contract. If the contract only has one performance obligation, the entire transaction price will be applied to that obligation. If the contract has multiple performance obligations, the transaction price is allocated to the performance obligations based on the relative standalone selling price (SSP) at contract inception.

Step 5 – Satisfaction of the Performance Obligations (and Recognize Revenue) – Revenue is recognized when (or as) goods or services are transferred to a customer. The Company satisfies each of its performance obligations by transferring control of the promised good or service underlying that performance obligation to the customer. Control is the ability to direct the use of and obtain substantially all of the remaining benefits from an asset. It includes the ability to prevent other entities from directing the use of and obtaining the benefits from an asset. Indicators that control has passed to the customer include: a present obligation to pay; physical possession of the asset; legal title; risks and rewards of ownership; and acceptance of the asset(s). Performance obligations can be satisfied at a point in time or over time.

Substantially all of the Company’s revenues continue to be recognized when control of the goods or service is transferred to the customer, which is upon ~~shipment~~delivery of the ~~finished~~ goods or service to the customer. Goods include non-fungible tokens and revencues are recognized when the rights of the non-fungible token are transferred to the customer. All sales have fixed pricing and there are currently no material variable components included in the Company’s revenue. Additionally, the Company will issue credits for defective merchandise, historically these credits for defective merchandise have not been material.

The Company’s primary revenue streams include the sale and/or licensing of consumer goods and packaging materials for innovative products. The Company’s licensing business is not material and has not been separately disaggregated for segment purposes. The Company’s disaggregated revenues for the three and ~~six~~nine months ended ~~June~~September 30, 2021 and 2020 was as follows:

For the three and ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, the following customer represented more than 10% of total net revenues:

Schedule of Revenue from External Customers ~~and Long-Lived Assets, by Geographical Areas~~

	For the Three Months Ended June 30,						For the Six Months Ended June 30,					For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2021			2020			2021			2020		2021			2020		2021			2020
Customer:
Customer A		11	%		*			11	%		*		7	%		0*		10	%		0*
Customer B		*			11	%		*			*
Customer C		*			11	%		*			*

For the three and ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, the following geographical regions represented more than 10% of total net revenues:

The Company measures the fair value of financial assets and liabilities based on the guidance of ASC 820 “Fair Value Measurements and Disclosures” (“ASC 820”) which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable

Level 3 — inputs that are unobservable (for example, cash flow modeling inputs based on assumptions)

The carrying amounts of the Company’s financial instruments, such as cash, accounts receivable and accounts payable, approximate fair values due to the short-term nature of these instruments. The carrying amount of the Company’s notes payable approximates fair value because the effective yields on these obligations, which include contractual interest rates, taken together with other features such as concurrent issuance of warrants, are comparable to rates of returns for instruments of similar credit risk. The loan held for investment was acquired at fair value, which resulted in a discount.

The following fair value of financial assets and liabilities and the input level used to determine the fair value at ~~June~~September 30, 2021 is presented below:

The following fair value of financial assets and liabilities and the input level used to determine the fair value at December 31, 2020 is presented below:

	Fair Value Measurements as of December 31, 2021						Fair Value Measurements as of December 31, 2020
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3

Assets:
Short-term investments	$	1,018,000	$	-	$	-	$	282,000	$	-	$	-

Liabilities:
Warrant liability		-		-		-
Total		1,018,000		-		-		282,000		-		-

The following table presents a reconciliation of the Company’s liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the ~~six~~nine months ended ~~June~~September 30, 2021:

	Warrant Liability (Level 3)			Warrant Liability (Level 3)
Balance, December 31, 2020	$	-		$	-
Issuance of warrants		228,575,715			518,742,375
Change in fair value		773,447			287,891,005
Exercise of warrants		(89,654,047	)		(338,020,680	)
Balance, June 30, 2021	$	139,695,115
Balance, September 30, 2021				$	468,612,700

U.S. equity stocks represent investment in stocks of U.S. based companies. The valuation inputs for U.S. equity stocks are based on the last published price reported on the major stock market on which the securities are traded and are primarily classified as Level 1. Securities whose valuation inputs are not based on observable market information are classified as Level 3.

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”.

The Company classifies a warrant to purchase shares of its common stock as a liability on its consolidated balance sheets as this warrant is a free-standing financial instrument that may require the Company to transfer consideration upon exercise ~~(Please see~~(See Note 11 — Warrant Liability for further information). Each warrant is initially recorded at fair value on date of grant using the Black-Scholes model and net of issuance costs, and it is subsequently re-measured to fair value at each subsequent balance sheet date. Changes in fair value of the warrant are recognized as a component of other income (expense), net in the consolidated statement of operations and comprehensive loss. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the warrant.

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

The Company uses the United States dollar as its functional and reporting currency since the majority of the Company’s revenues, expenses, assets and liabilities are in the United States. Assets and liabilities in foreign currencies are translated using the exchange rate at the balance sheet date, while revenue and expense accounts are translated at the average exchange rates prevailing during the year. Equity accounts are translated at historical exchange rates. Gains and losses from foreign currency transactions and translation for the three and ~~six~~nine months ended ~~June~~September 30, 2021 and 2020 and the cumulative translation gains and losses as of ~~June~~September 30, 2021 and December 31, 2020 were not material.

Basic net income (loss) per common share is computed by dividing net loss by the weighted average number of vested common shares outstanding during the period. Diluted net income per common share is computed by dividing net income by the weighted average number vested of common shares, plus the net impact of common shares (computed using the treasury stock method), if dilutive, resulting from the exercise of dilutive securities. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive.

As of ~~June~~September 30, 2021 and 2020, the Company excluded the common stock equivalents summarized below, which entitled the holders thereof to ultimately acquire shares of common stock, from its calculation of earnings per share, as their effect would have been anti-dilutive.

Schedule of ~~Antidilutive~~Anti-dilutive Securities Excluded from Computation of Earnings Per Share

	June 30,		June 30,		September 30,		September 30,
	2021		2020		2021		2020
Selling Agent Warrants		-		160,492		-		160,492
Shares reserved in exchange for the cancellation of certain non-voting membership interest in Edison Nation Holdings, LLC		-		990,000
Shares reserved in exchange for the cancellation of certain non-voting membership interest in EVNT, LLC		1,000,000		-		1,000,000		-
Placement Agent Warrants		4,911,692		-		6,291,604		-
Options		80,000		80,000		80,000		80,000
Convertible shares under notes payable		2,700,587		999,536		30,060,454		558,803
Warrants for noteholders		45,491,829		750,000		86,529,254		625,000
Warrants for investors		1,500,000		-		1,007,194		-
Restricted stock units		-		270,000		-		120,000
Series B Convertible Stock		-		-		-		-
Shares to be issued		-		46,500		1,150,796		165,000
Total	$	55,684,108	$	3,296,528	$	126,119,302	$	1,709,295

The Company has evaluated subsequent events through the date which the financial statements were issued. Based upon such evaluation, except for items described in Note 15, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the financial statements.

The Company uses “the management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s chief operating decision maker is the Chairman and Chief Executive Officer (“CEO”) of the Company, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. The Company deploys resources on a consolidated level to all brands of the Company and therefore the Company only identifies one reportable operating segment with multiple product offerings.

On March 12, 2021, the bankruptcy court approved the sale of the CBAV1, LLC Assets to BTL Diffusion SARL, the winning bidder, at the auction held on March 10, 2021 and March 11, 2021 for a total sum of $~~3,000,000, which includes a cash payment at closing in the amount of $2,650,000, less certain closing costs and credits, and additional royalty payments in the amount of $150,000~~ ~~on April 15, 2022 and in the amount of $200,000~~ ~~on April 15, 2023 (“CBAV1-BTL Transaction”).~~

~~A first closing of the CBAV1-BTL Transaction occurred on April 16, 2021, with the transfer of assets and release of funds completed on April 21, 2021 (“Final Closing”). Contemporaneously with the Final Closing, a certain license agreement between CBAV1 and Edison Nation, LLC (“Edison Nation”) terminated and any remaining operational assets of Edison Nation were transferred to BTL.~~

~~The table below shows the assets that the Company transferred to BTL and the components of the loss on discontinued operations:~~

On February 17, 2020, the Company divested its Cloud B, Inc. subsidiary and entered into an Agreement for the Purchase and Sale of Cloud B, Inc.(the “Purchase Agreement”), with Pearl 33 Holdings, LLC (the “Buyer”), pursuant to which the Buyer purchased from the Company (and the Company sold and assigned) ~~80,065~~ ~~shares of common stock of Cloud B (the “Cloud B Shares”) for $1.00~~ ~~and an indemnification agreement as described below, constituting a~~ ~~72.15% ownership interest in Cloud B, based on~~ ~~110,964~~ ~~shares of Cloud B’s common stock outstanding as of February 17, 2020. In accordance with the agreement, all of the liabilities of Cloud B were assumed by Pearl 33.~~

On February 17, 2020, as part of the sale of Cloud B, Inc., the Company entered into an indemnification agreement with Pearl 33 Holdings, LLC in connection with the divestiture of Cloud B, Inc., whereby pursuant to such agreement the Company is limited to the issuance of ~~150,000~~ shares of the Company’s common stock to the Buyer for indemnification of claims against Cloud B Inc. In addition, the Company shall indemnify the Buyer for expenses (including attorneys’ fees and all other costs, expenses and obligations) in connection with defending any Claim in connection with the Cloud B. The Company has recorded $~~405,000~~ ~~related to the fair value of the 150,000 shares of common stock which will be issued to the Buyer.~~

~~The table below shows the assets and liabilities that the Company was relieved of in the transaction:~~

~~Please~~ ~~see~~~~Note 15 — Discontinued Operations~~ ~~for further information.~~

On ~~November 30, 2020,~~July 25, 2021, ZVV, a joint venture of the Company and ~~its wholly owned subsidiary, SRM~~ZASH Global Media and Entertainment ~~LTD entered into a Stock Exchange Agreement with Jupiter Wellness, Inc.~~Corporation (“~~Jupiter”~~ZASH”)~~. Under~~, completed the ~~terms~~acquisition of 80% of the ~~Exchange Agreement, Jupiter agreed to~~outstanding capital stock of Lomotif for a total purchase ~~all outstanding shares~~price of ~~common stock (the “Exchange Shares”) issued by SRM from the Company. As consideration for the purchase of the Exchange Shares, Jupiter issued the Company~~ ~~200,000~~$109,765,000 ~~shares of its restricted common stock, symbol JUPW as listed on NASDAQ Capital Markets. Please~~ ~~see~~~~Note 15 — Discontinued Operations~~ ~~for further information.~~.

The activity of Lomotif is included in the Company’s consolidated statements of operations from the acquisition date to September 30, 2021 included selling, general and administrative expenses of $6,691,611 and a net loss of $6,747,008.

The Company believes that this combination will strengthen its future growth opportunities in digital media and content technologies. The Company accounted for this acquisition as a business combination under the acquisition method of accounting. The following table summarizes the preliminary purchase price allocation of fair values of the assets acquired and liabilities assumed at the date of acquisition:

Summary of Preliminary Purchase Price Allocation of Fair Values of the Assets Acquired and Liabilities Assumed

On September 29, 2020, the Company entered into a Purchase and Sale Agreement (the “Agreement”) with Graphene Holdings, LLC, Mercury FundingCo, LLC, Ventus Capital, LLC and Jetco Holdings, LLC (together the “Sellers”) to acquire all outstanding Membership Units (the “Units”) of TBD Safety, LLC (“TBD”). Collectively, the Sellers owned all outstanding Units of TBD. Under the terms of the Agreement, the Company issued a total of Two Million Two Hundred Ten Thousand Three Hundred Eighty-Two (2,210,382) shares of the Company’s common stock and a total of Seven Hundred Sixty-Four Thousand Six Hundred Eighteen (764,618) shares of a newly designated Preferred Stock (the “Preferred”). In addition, the Company and Sellers entered into a Registration Rights Agreement (the “Registration Rights Agreement”) in favor of the Sellers obligating the Company to register such common stock and shares of common stock to be issued upon conversion of the Preferred within 120 days after the Closing. The Sellers also had an Earn Out Consideration, which provides that at such time as the assets purchased in the Agreement achieve cumulative revenue of $10,000,000, the Sellers will earn a total of One Hundred Twenty-Five Thousand (125,000) shares of common stock. The closing of the transaction occurred on October 16, 2020.

On April 17, 2021, Vinco Ventures, Inc. (“Vinco”) and EVNT Platform, LLC, a wholly owned subsidiary of Vinco (“the Company” or “Buyer”), entered into (and closed on) a certain Asset Contribution Agreement (“Asset Contribution Agreement”) with Emmersive Entertainment, Inc. (“Emmersive” or “Seller”), pursuant to which Emmersive contributed/transferred to the Company the assets used for Emmersive’s business, which include digital assets, software and certain physical assets (the “Contributed Assets”) in consideration for, among other things, the Company assuming certain obligations of Emmersive, hiring certain employees, and issuing 1,000,000preferred membership units (“Preferred Units”) in the Company to Emmersive and/or its shareholders (“Preferred Members”) pursuant to a First Amended and Restated Operating Agreement for the Company dated as of April 17, 2021(“Amended Operating Agreement”). Certain put rights are associated with Preferred Units, which if exercised by the Preferred Members, obligates Vinco to purchase the Preferred Units in exchange for 1,000,000shares of Vinco Venture’s common stock (“Put Rights”). In addition, the Preferred Members have the opportunity to earn up to 4,000,000Conditional Preferred Units if certain conditions are satisfied for each of the four earn out targets (“Earn-Out Targets”). The Earn-Out Targets are described below:

Earn-Out Target 1: In the event that the Company (1) develops a minimally viable product for the NFT Technology to validate the utility of the product/platform with features to attract and transact with customers and (2) is successful on-boarding a minimum of 10 approved influential celebrities on or before December 31, 2021, the Company shall issue to Emmersive and/or Emmersive’s Shareholders, 1,000,000 Conditional Preferred Units, with Put Rights.

Earn-Out Target 2: In the event that the Company generates a minimum of $7,000,000 in annualized booked revenues inclusive of revenues generated from the celebrities onboarded by the Company (collectively “Attributed Revenue”) in any three-calendar-month period ending on or before March 31, 2022 (i.e. more than $1,750,000 in Attributed Revenue in a period of three consecutive calendar months), the Company shall issue to Emmersive and/or Emmersive’s Shareholders 1,000,000 Conditional Preferred Units, with the Put Rights.

Earn-Out Target 3: In the event that the Company generates a minimum of $28,000,000 in annualized Attributed Revenues in any three-calendar-month period ending on or before December 31, 2022 (i.e. more than $7,000,000 in Attributed Revenue in a period of three consecutive calendar months), the Company shall issue to Emmersive and/or Emmersive’s Shareholders 1,000,000 Conditional Preferred Units, with Put Rights.

Earn Out Target 4: In the event that the Company generates a minimum of $62,000,000 in annualized Attributed Revenues in any three-calendar-month period ending on or before December 31, 2023 (i.e. more than $15,500,000 in Attributed Revenue in a period of three consecutive calendar months), the Company shall issue to Emmersive and/or Emmersive’s Shareholders 1,000,000 Conditional Preferred Units, with Put Rights.

On April 17, 2021, the transactions under both the Asset Contribution Agreement and Amended Operating Agreement closed. The Preferred Units and Conditional Preferred Units were valued at $2,100,00and $5,300,000, respectively, and recorded as an intangible asset.

The following table summarizes the aggregate purchase price consideration paid for the acquisition of the asset:

On November 10, 2020, the Company, through its wholly owned subsidiary, Honey Badger Media, LLC, entered into a series of transactions to acquire certain assets and license a platform with Honey Badger Media, LLC, a Delaware limited liability company, for $300,000and 750,000shares of common stock. The transaction was treated as an asset purchase and not accounted for as a business combination due to substantially all of the fair value of gross assets acquired were concentrated to a group of similar identifiable assets which was media licensing assets. In addition, there was limited inputs, processes and outputs, which did not meet the requirements to be a business. On January 5, 2021, the Company issued 750,000shares of our common stock in connection with the asset acquisition.

On March 11, 2020, the Company issued 238,750shares of our common stock to acquire the assets of HMNRTH, LLC. On July 1, 2020, the Company made payment in the amount of $70,850to the principals of HMNRTH, LLC. The transaction was treated as an asset purchase and not accounted for as a business combination due to the limited inputs, processes and outputs, which did not meet the requirements to be a business.

On March 12, 2021, the bankruptcy court approved the sale of the CBAV1, LLC Assets to BTL Diffusion SARL, the winning bidder, at the auction held on March 10, 2021 and March 11, 2021 for a total sum of $3,000,000, which includes a cash payment at closing in the amount of $2,650,000, less certain closing costs and credits, and additional royalty payments in the amount of $150,000 on April 15, 2022 and in the amount of $200,000 on April 15, 2023 (“CBAV1-BTL Transaction”).

A first closing of the CBAV1-BTL Transaction occurred on April 16, 2021, with the transfer of assets and release of funds completed on April 21, 2021 (“Final Closing”). Contemporaneously with the Final Closing, a certain license agreement between CBAV1 and Edison Nation, LLC (“Edison Nation”) terminated and any remaining operational assets of Edison Nation were transferred to BTL.

The table below shows the assets that the Company transferred to BTL and the components of the loss on discontinued operations:

On February 17, 2020, the Company divested its Cloud B, Inc. subsidiary and entered into an Agreement for the Purchase and Sale of Cloud B, Inc.(the “Purchase Agreement”), with Pearl 33 Holdings, LLC (the “Buyer”), pursuant to which the Buyer purchased from the Company (and the Company sold and assigned) 80,065 shares of common stock of Cloud B (the “Cloud B Shares”) for $1.00 and an indemnification agreement as described below, constituting a 72.15% ownership interest in Cloud B, based on 110,964 shares of Cloud B’s common stock outstanding as of February 17, 2020. In accordance with the agreement, all of the liabilities of Cloud B were assumed by Pearl 33.

On February 17, 2020, as part of the sale of Cloud B, Inc., the Company entered into an indemnification agreement with Pearl 33 Holdings, LLC in connection with the divestiture of Cloud B, Inc., whereby pursuant to such agreement the Company is limited to the issuance of 150,000 shares of the Company’s common stock to the Buyer for indemnification of claims against Cloud B Inc. In addition, the Company shall indemnify the Buyer for expenses (including attorneys’ fees and all other costs, expenses and obligations) in connection with defending any Claim in connection with the Cloud B. The Company has recorded $405,000 related to the fair value of the 150,000 shares of common stock which will be issued to the Buyer.

The table below shows the assets and liabilities that the Company was relieved of in the transaction:

On November 30, 2020, the Company and its wholly owned subsidiary, SRM Entertainment, LTD entered into a Stock Exchange Agreement with Jupiter Wellness, Inc. (“Jupiter”). Under the terms of the Exchange Agreement, Jupiter agreed to purchase all outstanding shares of common stock (the “Exchange Shares”) issued by SRM from the Company. As consideration for the purchase of the Exchange Shares, Jupiter issued the Company 200,000 shares of its restricted common stock, symbol JUPW as listed on NASDAQ Capital Markets. SeeNote 15 — Discontinued Operations for further information.

The Company is involved in the formation of various entities considered to be Variable Interest Entities (“VIEs”). The Company evaluates the consolidation of these entities as required pursuant to ASC Topic 810 relating to the consolidation of VIEs. These VIEs are primarily partnerships formed to supply consumer goods to through various distribution and retail channels.

The Company’s determination of whether it is the primary beneficiary of VIE is based in part on an assessment of whether or not the Company and its related parties are exposed to the majority of the risks and rewards of the entity. Typically, the Company is entitled to substantially all or portion of the economics of these VIEs. The Company is the primary beneficiary of the VIE entities.

~~In April 2021, the Company agreed to unwind the joint venture of Ed Roses, LLC and recognized a loss of $301,645~~.

The following table presents the carrying values of the assets and liabilities of entities that are VIEs and consolidated by the Company at ~~June~~September 30, 2021:

	June 30, 2021		December 31, 2020		September 30, 2021		December 31, 2020

Assets
Current assets:
Cash and cash equivalents	$	3,845	$	10,481	$	8,931,879	$	10,481
Accounts receivable, net		-		94,195		-		94,195
Inventory		-		240,158		-		240,158
Loans receivable						17,050,000
Intangible assets, net						-
Prepaid expenses and other current assets		-		-		2,462,552		-
Total current assets		3,845		344,834		28,444,431		344,834
Property and equipment, net		-		-		135,108		-
Intangible assets, net						139,932,672
Total assets	$	3,845	$	344,834	$	168,512,211	$	344,834

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	29,164	$	217,558	$	823,449	$	217,558
Accrued expenses and other current liabilities		43,473		113,576		1,579,729		113,576
Line of credit, net of debt issuance costs of $0 and $15,573, respectively		1,133,652		1,133,652
Lines of credit						-		1,133,652
Notes payable, current		-		150,000		-		150,000
Due to related party		315,666		315,666		315,666		315,666
Total current liabilities		1,521,955		1,930,452		2,718,844		1,930,452
Debt						2,650,000		-
Total liabilities					$	5,368,844	$	1,930,452

The following table presents the operations of entities that are VIEs and consolidated by the Company at ~~June~~September 30, 2021:

	2021			2020			2021			2020			2021			2020			2021			2020
	For the Three Months Ended June 30,						For the Six Months Ended June 30,						For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2021			2020			2021			2020			2021			2020			2021			2020
Revenues, net	$	92,945		$	1,051,945		$	307,339		$	1,274,477		$	-		$	184,715		$	307,339		$	1,459,192
Cost of revenues		9,530			789,000			93,685			994,923			-			69,191			93,685			1,064,114
Gross profit		83,415			262,945			213,654			279,554			-			115,524			213,654			395,078

Operating expenses:
Selling, general and administrative		4,320			136,648			104,741			203,562			11,761,747			91,114			11,866,488			294,676
Operating income		79,095			126,297			108,913			75,992
Operating (loss) income														(11,761,747	)		24,410			(11,652,834	)		100,402

Other (expense) income:
Interest expense		(34,010	)		(21,331	)		(7,760	)		(56,956	)		(155,476	)		(73,840	)		(163,236	)		(130,796	)
Other income														98,353						98,353
Total other (expense) income		(34,010	)		(21,331	)		(7,760	)		(56,956	)		(57,123	)		(73,840	)		(64,883	)		(130,796	)
Loss before income taxes		45,085			104,966			101,153			19,036			(11,818,870	)		(49,430	)		(11,717,717	)		(30,394	)
Income tax expense		-			-			-			-			-			-			-			-
Net income	$	45,085		$	104,966		$	101,153		$	19,036
Net loss													$	(11,818,870	)	$	(49,430	)	$	(11,717,717	)	$	(30,394	)

At ~~June~~September 30, 2021, the Company had ~~one~~no unconsolidated ~~VIE,~~ VIE’s. The Company has consolidated both ZVV and Lomotif, for which the Company has determined it holds a variable interest.

On May 28, 2021, the Company, ~~held~~Vinco Acquisition Corporation and ZASH entered into that certain Second Amendment to their Agreement to Complete a ~~variable interest.~~Plan of Merger (the “Second Amendment”) to define certain milestones with dates to be completed to consummate the closing of the Lomotif acquisition and the ZASH merger.

On July 19, 2021, ZASH, Lomotif, the Lomotif selling shareholders identified on the signature page to the Lomotif SPA and ZVV, entered into a Deed of Variation and Supplement (the “Deed of Variation”) whereby, among other things, ZASH novated all of its rights and obligations under the Lomotif SPA to ZVV and ZVV assumed all of ZASH’s rights and obligations under the Lomotif SPA as if ZVV had been a party to the Lomotif SPA in place of ZASH. On July 23, 2021, ZVV closed on the transaction which resulted in ZVV acquiring an 80% interest in Lomotif.

On July 22, 2021, ZASH and the Company entered into a Second Amended and Restated Limited Liability Company Agreement of ZVV, pursuant to which ZASH and Vinco Ventures each own a 50% voting membership interest in ZVV, ZASH owns a 75% economic interest in ZVV after return of unreturned capital contributions and the Company owns a 25% economic interest in ZVV after return of unreturned capital contributions (See Note 3 – Acquisitions and Divestitures).

On May 20, 2020 (the “Effective Date”), the Company entered into an Agreement and Plan of Share Exchange (the “Share Exchange Agreement”) with PPE Brickell Supplies, LLC, a Florida limited liability company (“PPE”), and Graphene Holdings, LLC, a Wyoming limited liability company (“Graphene”, and together with PPE, the “Sellers”), whereby the Company purchased 25 membership units of Global Clean Solutions, LLC, a Nevada limited liability company (“Global”) from each of PPE and Graphene, for a total of fifty (50) units, representing fifty percent (50%) of the issued and outstanding units of Global (the “Purchase Units”).. The Company issued 250,000 shares of its restricted common stock, $0.001 par value per share (the “Common Stock”) to PPE, and 50,000 shares of Common Stock to Graphene, in consideration for the Purchase Units. Global Clean Solutions, LLC is a VIE. The fair value of the shares of $699,000 was treated as a distribution to the noncontrolling interest members.

Pursuant to the terms of the Share Exchange Agreement, the Sellers may earn additional shares of Common Stock upon Global realizing the following revenue targets: (i) In the event that Global’s total orders equal or exceed $1,000,000, Graphene shall receive 200,000 shares of Common Stock; (ii) In the event that Global’s total orders equal or exceed $10,000,000, PPE shall receive 100,000 shares of restricted Common Stock; and (iii) In the event that Global’s total orders equal or exceed $25,000,000, Graphene shall receive 125,000 shares of restricted Common Stock. Additionally, the Company shall be entitled to appoint two managers to the Board of Managers of Global. The fair value of the shares is expensed over the estimated vesting period and is adjusted based on the number of shares that vest.

On the Effective Date, the Company entered into an Amended Limited Liability Company Agreement of Global (the “Amended LLC Agreement”). The Amended LLC Agreement amends the original Limited Liability Company Agreement of Global, dated May 13, 2020. The Amended LLC defines the operating rules of Global and the ownership percentage of each member: Vinco Ventures, Inc. 50%, PPE 25% and Graphene 25%.

On the Effective Date, the Company (as “Guarantor”) entered into a Secured Line of Credit Agreement (the “Credit Agreement”) with Global and PPE. Under the terms of the Credit Agreement, PPE is to make available to Global a revolving credit loan in a principal aggregate amount at any one time not to exceed $2,500,000. Upon each drawdown of funds against the credit line, Global shall issue a Promissory Note (the “Note”) to PPE. The Note shall accrue interest at 3% per annum and have a maturity date of six (6) ~~months~~months.. In the event of a default, any and all amounts due to PPE by Global, including principal and accrued but unpaid interest, shall increase by forty (40%) percent and the interest shall increase to five (5%) percent (the “Default Interest”).

On the Effective Date, the Company (as “Guarantor”) entered into a Security Agreement (the “Security Agreement”) with Global (as “Borrower”) and PPE as the secured party, whereby the Company placed 1,800,000 shares of Common Stock (the “Reserve Shares”) in reserve with its transfer agent in the event of default under the Credit Agreement. In the event of a default that is not cured by the defined cure period, the PPE may liquidate the Reserve Shares until the Global’s principal, interest and associated expenses are recovered. The number of Reserve Shares may be increased through the issuance of True-Up shares in the event the original number of Reserve Shares is insufficient.

In April 2021, the Company agreed to unwind the joint venture of Ed Roses, LLC and recognized a loss of $301,645.

As of ~~June~~September 30, 2021 and December 31, 2020, short-term investments consisted of the following:

	June 30,			December 31,			September 30,			December 31,
	2021			2020			2021			2020
Jupiter Wellness, Inc. (JUPW) ⁽ⁱ⁾	$	1,040,000		$	1,040,000		$	1,040,000		$	1,040,000
Unrealized losses		(144,400	)		(22,000	)		(758,000	)		(22,000	)
Total short-term investments	$	895,600		$	1,018,000		$	282,000		$	1,018,000

As of ~~June~~September 30, 2021 and December 31, 2020, property and equipment consisted of the following:

	June 30,			December 31,			September 30,			December 31,
	2021			2020			2021			2020
Land	$	79,100		$	79,100		$	-		$	79,100
Buildings – rental property		463,635			463,635			58,052			463,635
Building improvements		800,225			800,225			818,986			800,225
Equipment and machinery		4,144,145			4,122,917			4,286,256			4,122,917
Furniture and fixtures		368,137			368,137			387,637			368,137
Computer software		55,500			-			111,760			-
Molds		79,300			79,300			79,300			79,300
Vehicles		533,866			521,962			533,867			521,962
Property, Plant and Equipment, Gross		6,523,908			6,435,276
Property, plant and Equipment, gross								6,275,858			6,435,276
Less: accumulated depreciation		(5,490,098	)		(5,424,475	)		(5,303,707	)		(5,424,475	)
Total property and equipment, net	$	1,033,810		$	1,010,801		$	972,151		$	1,010,801

Depreciation expense for the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020 was $~~65,623~~136,312 and $169,141, respectively.

As of ~~June~~September 30, 2021 and December 31, 2020, loan receivable consisted of the following:

~~As of June 30, 2021 and December 31, 2020, the carrying amount of equity method investments consisted of the following:~~

For the ~~six~~nine months ended ~~June~~September 30, 2021, there was 0 change in the carrying amount of goodwill.

The Company utilized the simplified test for goodwill impairment. The amount recognized for impairment is equal to the difference between the carrying value and the asset’s fair value. The valuation methods used in the quantitative fair value assessment was a discounted cash flow method and required management to make certain assumptions and estimates regarding certain industry trends and future profitability of our reporting units.

The Company’s preliminary purchase price allocation for the Lomotif acquisition has allocated all of the proceeds in excess of the identifiable tangible assets to developed technology, a identifiable intangible assets (See Note 3 — Acquisitions and Divestitures).

Amortization expense for the nine months ended September 30, 2021 and 2020 was $4,907,365 and $825,821, respectively.

The estimated future amortization of intangibles subject to amortization at December 31, 2020 was as follows:

As of September 30, 2021 and December 31, 2020, debt consisted of the following:

	June 30,			December 31,			September 30,			December 31,
	2021			2020			2021			2020
Line of credit:
Lines of credit	$	1,133,652		$	1,133,652		$	-		$	1,133,652
Receivable financing		-			367,301			-			367,301
Total lines of credit		1,133,652			1,500,953			-	��		1,500,953

Senior convertible notes payable:
Senior convertible notes payable– related parties		422,272			1,428,161			302,272			1,428,161
Convertible notes payable		10,000,000			591,104
Senior convertible notes payable								120,000,000			591,104
Debt issuance costs		(6,821,756	)		(280,511	)		(91,613,604	)		(280,511	)
Total long-term senior convertible notes payable		3,600,516			1,738,754
Less: current portion of long-term notes payable		(3,333,333	)		(577,260	)
Noncurrent portion of long-term convertible notes payable		267,183			1,161,494
Total senior convertible notes payable								28,688,668			1,738,754
Less: current portion of convertible notes payable								(28,481,485	)		(577,260	)
Convertible notes payable – related parties, net of current portion								207,183			1,161,494

Notes payable:
Notes payable		35,151			1,932,088			181,419			1,932,088
Debt issuance costs		-			(34,997	)		-			(34,997	)
Total long-term debt		35,151			1,897,091
Less: current portion of long-term debt		(15,185	)		(1,301,212	)
Noncurrent portion of long-term debt		19,966			595,879
Total notes payable								181,419			1,897,091
Less: current portion of notes payable								(15,357	)		(1,301,212	)
Notes payable , net of current portion								166,062			595,879

Notes payable – related parties:
Notes payable		876,500			2,827,512			2,612,835			2,827,512
Debt issuance costs		-			(33,833	)		-			(33,833	)
Total notes payable – related parties:		876,500			2,793,679			2,612,835			2,793,679
Less: current portion of long-term debt – related parties		(876,500	)		(1,389,922	)
Noncurrent portion of long-term debt – related parties	$	-		$	1,403,757
Less: current portion of notes payable – related parties								(112,835	)		(1,389,922	)
Notes payable – related parties, net of current portion							$	2,500,000		$	1,403,757

On July 22, 2021 (the “Effective Date”), Vinco Ventures, Inc. (the “Company”) consummated the closing of a private placement offering (the “Offering”) whereby pursuant to the Securities Purchase Agreement (the “Purchase Agreement”) entered into by the Company on July 22, 2021 with Hudson Bay Master Fund Ltd (the “Investor”), the Company issued a Senior Secured Convertible Note in the amount of $120,000,000 for the purchase price of $100,000,000 (the “Note”) and five (5) year warrants (the “Warrant”) to purchase shares of the Company’s common stock, par value $0.001 per share (“Common Stock”).

The Note shall carry no interest unless and until an event of default shall occur and the Note matures on July 22, 2022. The Note contains a voluntary conversion mechanism whereby the Noteholder may convert at any time after the Initial Convertibility Date (as defined therein), in whole or in part, the outstanding principal and interest under the Note into shares of the Common Stock at a conversion price of $2.655 per share (the “Conversion Shares”). The Note is guaranteed by the Company’s subsidiaries and certain other guarantors and is a senior secured obligation of the Company and its subsidiaries. The Note contains customary events of default (each an “Event of Default��). If an Event of Default occurs, interest under the Note will accrue at a rate of eighteen percent (18%) per annum and the outstanding principal amount of the Note, plus accrued but unpaid interest, liquidated damages and other amounts owing with respect to the Note will become, at the Note holder’s election, immediately due and payable in cash. Upon completion of a Change of Control (as defined in the Note), the Note’s holder may require the Company to purchase any outstanding portion of the Note in cash at a price in accordance with the terms of the Note.

Pursuant to the Purchase Agreement, the Investor received a Warrant. The Warrant contains an exercise price of $2.655 per share, subject to adjustments as provided under the terms of the Warrant. In connection with the closing of the Offering, the Warrant was issued for an aggregate of 32,697,548 shares of Common Stock (the “Warrant Shares”).

The Company also entered into a Registration Rights Agreement with the Investor (the “Registration Rights Agreement”). The Registration Rights Agreement provides that the Company shall (i) file with the Securities and Exchange Commission (the “Commission”) a Registration Statement by 30 days following the Closing Date of the Purchase Agreement to register the Conversion Shares and Warrant Shares (the “Registration Statement”); and (ii) use all commercially reasonable efforts to have the Registration Statement declared effective by the Commission within 60 days following the Closing Date or at the earliest possible date, or 75 days following the Closing Date if the Registration Statement receives comments from the Commission.

Palladium Capital Group, LLC. (the “Placement Agent”) acted as placement agent for the Offering. The Placement Agent received cash compensation of $1,000,000 plus a Note of $8,000,000 which was deferred (8% of the gross proceeds to the Company plus an additional 1% of the gross proceeds to the Company for non-accountable expenses). The Company has paid $4,000,000 of the remaining $8,000,000.

The conversion feature on the Note and the Warrants were approved by shareholders on October 14, 2021.

On February 23, 2021 (the “Effective Date”), the Company consummated the closing of a private placement offering (the “Offering”) whereby pursuant to the Securities Purchase Agreement (the “Purchase Agreement”) entered into by the Company on February 18, 2021 with one accredited investor (the “Investor”), the Company issued a Senior Convertible Note for the purchase price of $10,000,000~~(the~~ (the “Note”) and five (5) year warrants (the “February Warrants”) to purchase shares of the Company’s common stock, par value $0.001per share (“Common Stock”). The Company issued the February Warrants to the Investor representing the right to acquire an aggregate of 18,568,188 shares of Common Stock. The February Warrants contain an exercise price of $3.722 per share.

The Note carries an interest rate of 6% per annum compounding monthly and matures on February 23, 2022. The Note contains a voluntary conversion mechanism whereby the Noteholder may convert at any time after the Issuance Date, in whole or in part, the outstanding principal and interest under the Note into shares of the Common Stock at a conversion price of $4.847 per share (the “Conversion Shares”). The Note shall be a senior unsecured obligation of the Company and its subsidiaries. The Note contains customary events of default (each an “Event of Default”). If an Event of Default occurs, interest under the Note will accrue at a rate of twelve percent (12%) per annum and the outstanding principal amount of the Note, plus accrued but unpaid interest, liquidated damages and other amounts owing with respect to the Note will become, at the Note holder’s election, immediately due and payable in cash. Upon completion of a Change of Control (as defined in the Note), the Note’s holder may require the Company to purchase any outstanding portion of the Note in cash at a price in accordance with the terms of the Note.

The Investor fully converted $10,000,000 of principal into 2,063,132 of the Company’s common shares and made a cash payment for the remaining accrued interest. The principal and interest is fully paid as of September 30, 2021.

Pursuant to the Purchase Agreement, the Investor received a Warrant in an amount equal to 900% of the shares of Common Stock initially issuable to the Investor pursuant to the conversion terms of the Investor’s Note. The Warrant contains an exercise price of $3.722per share, subject to adjustments as provided under the terms of the Warrant. In connection with the closing of the Offering, the Warrant was exercisable for an aggregate of 18,568,188shares of Common Stock (the “Warrant Shares”). As of ~~June~~September 30, 2021, the Investor has exercised 13,968,188 warrants.

Palladium Capital Group, LLC. (the “Placement Agent”) acted as placement agent for the Offering. The Placement Agent received cash compensation of $900,000 (8% of the gross proceeds to the Company plus an additional 1% of the gross proceeds to the Company for non-accountable expenses). The Placement Agent also received a Warrant granting the Holder the right to purchase 1,650,346 shares of the Company’s common stock at an exercise price of $3.722 with an expiration date of February 23, 2026.

On June 4, 2021, the Company entered into a warrant exercise agreement (the “June 2021 Warrant Agreement”) with the Investor whereby the Company agreed to issue additional warrants, to purchase shares of Common Stock at a per-share exercise price equal to $3.30 (the “Incentive Warrants”, all pursuant to the terms and conditions set forth in the June 2021 Warrant Agreement. At the Closing (as defined in Section 2 of the June 2021 Agreement), the parties shall execute and deliver a registration rights agreement, (the “Registration Rights Agreement”), pursuant to which the Company will agree to register the shares of Common Stock underlying the Incentive Warrants.

Subject to the terms of June 2021 Warrant Agreement, the Company shall issue and deliver Incentive Warrants to the Investor to initially purchase zero shares of Common Stock, which number of shares shall be subject to adjustment, including the provision of Incentive Warrants on a 1.75-for-one basis for the additional exercise of each Existing Warrant on or prior to July 7, 2021. During the ~~six~~nine months ended ~~June~~September 30, 2021, the Investor exercised 15,898,188 warrants and received 27,821,829 incentive warrants.

The June 2021 Warrant Agreement includes customary representations, warranties and covenants, and customary conditions to closing, expense and reimbursement obligations and termination provisions.

On July 7, 2021, the Company entered into an Amendment to the June 2021 Warrant Agreement (the “Amendment Agreement”). Under the terms of the Amendment Agreement, the exercise date for the June Warrants has been extended to August 9, 2021 (the “Adjustment Date”).

On January 25, 2021 (the “Effective Date”), the Company consummated the closing of a private placement offering (the “Offering”) whereby pursuant to the Securities Purchase Agreement (the “Purchase Agreement”) entered into by the Company on January 21, 2021 with Hudson Bay Master Fund, Ltd (the “Investor”), the Company issued a Senior Convertible Note for the purchase price of $12,000,000~~(the~~ (the “Note”) and a five (5) year warrant (the “January Warrant”) to purchase shares of the Company’s common stock, par value $0.001per share (“Common Stock”). The Company issued the January Warrants to the Investor representing the right to acquire an aggregate of 15,000,000 shares of the Company’s common stock, $0.001 par value per share (the “Common Stock”). The January Warrants contain an exercise price of $2.00 per share.

~~The Investor converted $11,000,000~~ ~~of principal and $39,190~~ ~~of interest into~~ ~~5,519,595~~ ~~of the Company’s common shares.~~

The Note carries an interest rate of 6% per annum and matures on the 12-month anniversary of the Issuance Date (as defined in the Note). The Note contains a voluntary conversion mechanism whereby the Noteholder may convert at any time after the Issuance Date, in whole or in part, the outstanding balance of the Note into shares of the Common Stock at a conversion price of $2.00 per share (the “Conversion Shares”). The Note shall be a senior obligation of the Company and its subsidiaries. The Note contains customary events of default (each an “Event of Default”). If an Event of Default occurs, interest under the Note will accrue at a rate of twelve percent (12%) per annum and the outstanding principal amount of the Note, plus accrued but unpaid interest, liquidated damages and other amounts owing with respect to the Note will become, at the Note holder’s election, immediately due and payable in cash. Upon completion of a Change of Control (as defined in the Note), the Note’s holder may require the Company to purchase any outstanding portion of the Note in cash at a price in accordance with the terms of the Note.

The Investor fully converted $12,000,000 of principal and $41,690 of interest into 6,020,845 of the Company’s common shares. The principal and interest is fully paid as of September 30, 2021.

Pursuant to the Purchase Agreement, the Investor received a Warrant in an amount equal to 250% of the shares of Common Stock initially issuable to each Investor pursuant to the Investor’s Note. The Warrant contains an exercise price of $2.00per share. In connection with the closing of the Offering, the Warrant was issued to purchase an aggregate of 15,000,000shares of Common Stock (the “Warrant Shares”). As of ~~June~~September 30, 2021, the Investor has exercised 15,000,000 warrants.

The Company also entered into a Registration Rights Agreement with the Investor (the “Registration Rights Agreement”). The Registration Rights Agreement provides that the Company shall (i) file with the Securities and Exchange Commission (the “Commission”) a Registration Statement by 30 days following the Closing Date to register the Conversion Shares and Warrant Shares (the “Registration Statement”); and (ii) use all commercially reasonable efforts to have the Registration Statement declared effective by the Commission within 60 days following the Closing Date or at the earliest possible date, or 75 days following the Closing Date if the Registration Statement receives comments from the Commission.

Palladium Capital Group, LLC (the “Placement Agent”) acted as placement agent for the Offering. The Placement Agent received cash compensation of $1,080,000 (8% of the gross proceeds to the Company plus an additional 1% of the gross proceeds to the Company for non-accountable expenses). The Placement Agent also received a Warrant dated January 25, 2021 granting the Holder the right to purchase 480,000 shares of the Company’s common stock at an exercise price of $2.00 with an expiration date of January 25, 2026.

On May 24, 2021, the Company entered into a warrant exercise agreement (the “May 2021 Warrant Agreement”) with the Investor who agreed to exercise 2,870,000 shares of Common Stock underlying the January Warrants and the Company agreed to issue additional warrants, to purchase shares of Common Stock at a per-share exercise price equal to $3.20 (the “Incentive Warrants”, all pursuant to the terms and conditions set forth in the May 2021 Warrant Agreement. At the Closing (as defined in Section 2(b) of the May 2021 Warrant Agreement), the parties shall execute and deliver a registration rights agreement, (the “Registration Rights Agreement”), pursuant to which the Company will agree to register the shares of Common Stock underlying the Incentive Warrants. During the ~~six~~nine months ended ~~June~~September 30, 2021, the Investor exercised 13,070,000 warrants and received 13,070,000 incentive warrants.

Subject to the terms of May 2021 Warrant Agreement, (i) the Investor shall pay to the Company an amount equal to the exercise price of the January Warrants in effect as of the date of such exercise multiplied by 2,870,000 shares (as adjusted for any share split or similar transaction after the date hereof) (the “Exercised Warrant Shares”) and (ii) the Company shall issue and deliver Incentive Warrants to the Investor to initially purchase an aggregate number of shares equal to the number of Exercised Warrant Shares, which number of shares shall be subject to adjustment, including the provision of Incentive Warrants on a one-for-one basis for the additional exercise of each January Warrant on or prior to June 1, ~~2021~~2021..

The May 2021 Warrant Agreement includes customary representations, warranties and covenants, and customary conditions to closing, expense and reimbursement obligations and termination provisions.

On July 29, 2020, the Company entered into a Securities Purchase Agreement (the “Agreement”) with Jefferson Street Capital, LLC (the “Investor”) wherein the Company issued the Investor a Convertible Promissory Note (the “Note”) in the amount of $224,000 ($24,000 OID). The Note has a term of six (6) months, is due on January 29, 2021 and has a one-time interest charge of 2%2%. In addition, the Company issued the Investor 14,266 shares of Common Stock (the “Origination Shares”) as an origination fee. The transaction closed on July 29, 2020. On January 28, 2021, the Company paid all outstanding principal and interest in the amount of $260,233.

On April 7, 2020, the Company entered into a Securities Purchase Agreement (the “Agreement”) with Jefferson Street Capital, LLC (the “Investor”) wherein the Company issued the Investor a Convertible Promissory Note (the “Note”) in the amount of $168,000($ ($18,000OID). The Note has a term of six (6) months, is due on October 7, 2020and has a one-time interest charge of 2%2%. In addition, the Company issued the Investor 10,700shares of Common Stock (the “Origination Shares”) as an origination fee. The transaction closed on April 9, 2020. On October 7, 2020, the Company and Investor entered into a Forbearance Agreement (the “Forbearance Agreement”). Under the terms of the Forbearance Agreement, the Company requested and the Investor agreed to temporarily forebear, until the earlier of (i) December 9, 2020 or (ii) at such time as a default shall occur under and pursuant to the Purchase Agreement, the Note or the Agreement, from exercising its right to convert amounts due under the Note into Common Stock of the Company, in exchange for a one-time cash payment forbearance fee equal to $12,500 paid upon execution of the Agreement.On December 23, 2020, the Investor submitted a Notice of Conversion for $45,000 in principal and $750 in fees. On December 29, 2020, the Company issued 41,730 shares to satisfy the conversion obligation. The Investor converted $54,830 of principal into 54,830 of the Company’s common shares. The Note was paid in full on February 1, 2021.

On April 7, 2020, the Company entered into a Securities Purchase Agreement (the “Agreement”) with BHP Capital NY Inc. (the “Investor”) wherein the Company issued the Investor a Convertible Promissory Note (the “Note”) in the amount of $168,000 ($18,000 OID). The Note has a term of six (6) months, is due on October 7, 2020 and has a one-time interest charge of 2%2%. In addition, the Company issued the Investor 10,700 shares of Common Stock (the “Origination Shares”) as an origination fee. The transaction closed on April 9, 2020. The note was paid in full on January 29, 2021.

Lomotif Private Limited notes payable consist of the following obligations at September 30, 2021:

Lomotif Private Limited notes payable – related parties consist of the following obligations at September 30, 2021:

On December 4, 2019, the Company agreed to issue and sell to 32 Entertainment LLC (“32E”) a 10% Senior Secured Note (the “32E Note”), in the principal amount of $250,000. The maturity date of the 32E Note is December 4, 2020. In addition, the Company issued to 32E 10,000 shares of common stock as an inducement to 32E to purchase the 32E Note. The fees were recorded as a debt discount and amortized over the term of the note. The $250,000 of proceeds from the 32E Note was used for general working capital needs of the Company and the repayment of debt related to Horberg Enterprises. On May 19, 2020, the Company entered into an Amendment (the “Amendment”) to the 32E Note. Under the terms of the Amendment, the Company issued to 32E an Amended Subordinate Secured Note (the “Replacement Note”) in the principal amount of $200,000 that accrued interest at ~~16%~~16% annually and matured on May 21, 2021. On May 28, 2020, the Company paid $50,000 toward the principal plus interest in the amount of $6,250 for a total of $56,250. 32E also received 40,000 restricted stock units and surrendered the warrant issued to it in the December 4, 2019 financing transaction. The note was paid in full on January 28, 2021.

On January 2, 2020, Ed Roses, LLC (the “Partnership”) entered into a Loan Agreement (the “Agreement”) with Sook Hyun Lee (the “Lender”). Under the terms of the Agreement, the Lender agreed to lend $150,000 to the Partnership for general working capital. The Loan is due on April 15, 2020 (the “Maturity Date”) and accrues interest at ~~15%~~15% per annum. The Agreement shall automatically renew at the Maturity date for successive 90-day periods unless written notice is remitted by either party. On the Maturity date, the Partnership shall pay the Lender all unpaid principal and interest and a $30,000 commitment fee. The Lender shall have a collateral interest in the accounts receivable of the Partnership, including but not limited to 7 Eleven receivables. As collateral, Edison Nation, Inc. placed 75,000 shares of common stock in reserve. The note was paid in full on March 11, 2021.

On January 10, 2020, the Company entered into a 5% Promissory Note Agreement with Equity Trust Company on behalf of Rawleigh Ralls (“Ralls”) for an aggregate principal amount of $267,000 (the “Ralls Note”), pursuant to which Ralls purchased the Ralls Note from the Company for $250,000 and an original issue discount of $17,000, and the Company issued to Ralls a warrant (the “Ralls Warrant”) to purchase 125,000 shares of the Company’s common stock valued at $86,725 estimated using the Black-Scholes option-valuation model. The Company paid the Note in full on January 27, 2021.

On January 15, 2020, the Company entered into a 5% Promissory Note Agreement with Paul J. Solit & Julie B. Solit (“Solits”) for an aggregate principal amount of $107,000 (the “Solit Note”), pursuant to which the Solits purchased the Solit Note from the Company for $100,000 and an original issue discount of $7,000, and the Company issued to the Solits a warrant (the “Solit Warrant”) to purchase 50,000 shares of the Company’s common stock valued at $31,755 estimated using the Black-Scholes option-valuation model. The Company paid the Note in full on January 27, 2021. The Solit Warrant was exercised on January 22, 2021.

On January 17, 2020, the Company entered into a 5% Promissory Note Agreement with Richard O’Leary (“O’Leary”) (“Lender”) for an aggregate principal amount of $53,500 (the “O’Leary Note”), pursuant to which O’Leary purchased the O’Leary Note from the Company for $50,000 and an original issue discount of $3,500, and the Company issued to O’Leary a warrant (the “O’Leary Warrant”) to purchase 25,000 shares of the Company’s common stock valued at $16,797 estimated using the Black-Scholes option-valuation model. The Company paid the Note in full on January 27, 2021. The O’Leary Warrant was exercised on February 18, 2021.

On April 15, 2020, the Company entered into a loan agreement (“(the “First Choice PPP Loan”) with First Choice Bank under the Paycheck Protection Program (the “PPP”), which iswas part of the ~~recently enacted~~ Coronavirus Aid, Relief, and Economic Security Act ~~(“CARES Act”)~~ administered by the United States Small Business Administration (“SBA”). The Company received proceeds of $789,852 from the First Choice PPP Loan. ~~In accordance with the requirements of the PPP, the Company intends to use proceeds from the PPP Loan primarily for payroll costs, subject to thresholds, rent and utilities. The PPP Loan has a~~ ~~1.00%~~ ~~interest rate per annum and matures on~~ ~~April 15, 2022~~ and is subject to the terms and conditions applicable to loans administered by the SBA under the PPP. Under the terms of the PPP, certain amounts of the PPP Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. The PPP Loan is included in notes payable on the consolidated balance sheet. On May 4, 2021, the ~~Company’s~~First Choice PPP loan was forgiven and the carrying value of $789,852 was recorded as a gain on extinguishment as part of interest expense. In accordance with the requirements of the PPP, the Company used the proceeds from the First Choice PPP Loan primarily for payroll costs, subject to thresholds, rent and utilities. The First Choice PPP Loan had a 1.00% interest rate per annum and a maturity date of April 15, 2022 and was subject to the terms and conditions applicable to loans administered by the SBA under the PPP. The First Choice PPP Loan is included in notes payable on the consolidated balance sheet.

On May 4, 2020, TBD Safety, LLC, the Company’s wholly owned subsidiary, entered into a loan agreement (“(the “First Home PPP Loan”) with First Home Bank under the Paycheck Protection Program (the “PPP”), which is part of the recently enacted Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) administered by the United States Small Business Administration (“SBA”).PPP. The Company received proceeds of $62,500 from the First Home PPP Loan. ~~In accordance with the requirements of the PPP, the Company intends to use proceeds from the PPP Loan primarily for payroll costs, subject to thresholds, rent and utilities. The PPP Loan has a~~ ~~1.00%~~ ~~interest rate per annum and matures on~~ ~~May 4, 2022~~ and is subject to the terms and conditions applicable to loans administered by the SBA under the PPP. Under the terms of the PPP, certain amounts of the PPP Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. The PPP Loan is included in notes payable on the consolidated balance sheet. On April 16, 2021, the ~~TBD Safety~~First Home PPP ~~loan~~Loan was forgiven and the carrying value of $62,500 was recorded as a gain on extinguishment as part of interest expense.In accordance with the requirements of the PPP, the Company used the proceeds from the First Home PPP Loan primarily for payroll costs, subject to thresholds, rent and utilities. The First Home PPP Loan had a 1.00% interest rate per annum and a maturity date of May 4, 2022 and was subject to the terms and conditions applicable to loans administered by the SBA under the PPP. The First Home PPP Loan is included in notes payable on the consolidated balance sheet.

On February 21, 2020, the Company entered into a receivables financing arrangement for certain receivables of the Company not to exceed $1,250,000 at any one time. The agreement allows for borrowings up to ~~85%~~85% of the outstanding receivable based on the credit quality of the customer. The fee is between 1%1% and 2%2% of the total invoices financed.

On November 12, 2019, the Company entered into a Receivables Purchase Agreement with a financial institution (the “Receivables Purchase Agreement”), whereby the Company agreed to the sale of $250,000 of receivables for $200,000. The proceeds were used for general working capital. The note was paid in full on February 1, 2021.

In April 2019, we entered into a receivables financing arrangement for certain receivables of the Company. The agreement allows for borrowings up to ~~80%~~80% of the outstanding receivable based on the credit quality of the customer. The fee is between 1%1% and 2%2% of the total invoices financed. The receivables financing arrangement was paid in full and terminated on March 30, 2021.

On the Effective Date, the Company (as “Guarantor”) entered into a Secured Line of Credit Agreement (the “Credit Agreement”) with Global and PPE. Under the terms of the Credit Agreement, PPE is to make available to Global a revolving credit loan in a principal aggregate amount at any one time not to exceed $2,500,000. Upon each drawdown of funds against the credit line, Global shall issue a Promissory Note (the “Note”) to PPE. The Note shall accrue interest at 3% per annum and have a maturity date of six (6) months. In the event of a default, any and all amounts due to PPE by Global, including principal and accrued but unpaid interest, shall increase by forty (40%) percent and the interest shall increase to five (5%) percent (the “Default Interest”).The ~~balance at June~~outstanding principal and interest was fully settled and paid as of September 30, 2021 ~~is $~~for ~~1,133,652~~575,000. shares of common stock.

The scheduled maturities of the debt for the next five years as of ~~June~~September 30, 2021, are as follows:

For the Years Ended December 31,	Amount			Amount
2021 (excluding the six months ended June 30, 2021)		2,017,659
2021 (excluding the nine months ended September 30, 2021)					116,610
2022		10,015,530			122,665,530
2023		434,386			314,386
2024		-			-
2025		-			-
Thereafter		-			-
Long-term Debt, Gross		12,467,575			123,096,526
Less: debt discount		(6,821,756	)		(91,613,605	)
Long-term Debt	$	5,645,819		$	31,482,921

For the three and ~~six~~nine months ended ~~June~~September 30, 2021, interest expense was $~~2,715,481~~27,012,312 and $~~15,410,414~~42,422,726, respectively, of which $~~277,083~~617,314 and ~~$190,549~~$340,231 was related party interest expense. For the three and ~~six~~nine months ended ~~June~~September 30, 2020, interest expense was $847,154 and $1,571,111, respectively of which $75,692 and $152,326 were related party interest expense.

For the ~~six~~nine months ended ~~June~~September 30, 2021, the Company issued warrants to purchase shares of the Company’s common stock related to multiple private placements. The warrants are as follows:

The warrants are subject to anti-dilution adjustments outlined in the Agreement. The warrants issued in the first quarter were classified as a liability with an initial fair value of $94,876,534, of which $75,156,534 was immediately expensed and $19,720,000 was recorded as a deferred debt discount. The warrants issued in the second quarter were classified as a liability with an initial fair value of $133,699,181which was immediately expensed. The warrants issued in the third quarter were classified as a liability with an initial fair value of $290,166,663, of which $206,948,147 was immediately expensed and $83,218,516 was recorded as a deferred debt discount. In addition, the warrants must be valued every reporting period and adjusted to market with the increase or decrease being adjusted through earnings. The change in fair value of the warrant liability for the three and ~~six~~nine months ended ~~June~~September 30, 2021 was a loss of $~~773,447~~287,117,556 and ~~37,154,989~~$287,891,003 , respectively. As of ~~June~~September 30, 2021, the fair value of the warrant liability was $~~139,695,115~~468,612,700.

The warrants were valued using the ~~Black-Scholes~~Monte-Carlo simulation pricing model to calculate the ~~grant-date~~September 30, 2021 fair value ~~upon issuance~~ of the warrants with the following assumptions:

~~The warrants were valued using the Black-Scholes pricing model to calculate the June 30, 2021 fair value of the warrants with the following assumptions:~~

As of September 30, 2021, Lomotif owed ZASH $2,500,000 in original principal amount under two promissory notes. See Note 10 – Debt for further information. In addition, ZASH was performing certain management functions on behalf of ZVV for which ZASH received $3,500,000 during the three and nine months ended September 30, 2021. Our Chairman and member of the board of managers of ZVV, Roderick Vanderbilt, founded ZASH, serves as the President of ZASH, and has a pre-existing personal and business relationship with the current controlling shareholder of ZASH, Theodore Farnsworth. Mr. Farnsworth is also a member of the board of managers of ZVV.

On October 12, 2021, ZVV entered into a promissory note (the “Magnifi U Note”) with Magnifi U, Inc. (“Magnifi U”), pursuant to which ZVV loaned Magnifi U $1,500,000. The Magnifi U Note bears interest at 3% annually and Magnifi U is obligated to pay the full amount of principal and interest in one balloon payment on October 12, 2023. Our Chief Executive Officer, President and director and member of the board of managers of ZVV, Lisa King, is the founder of Magnifi U and serves as its chief executive officer. ZASH has a 15% ownership interest in Magnifi U resulting from its equity investment of $5,000,000 in Magnifi U. Founded in August 2020, Magnifi U is a personalized and immersive online education platform whose goal is to help its users develop life skills, nurture strengths and live with purpose.

On November 17, 2020, the Company, through its subsidiary, Edison Nation, LLC (the “Vendor”), entered into an Inventory Management Agreement (the “Agreement”) with the Forever 8 Fund, LLC (“F8”), an entity which Christopher B. Ferguson, our ~~President~~former Chairman and Chief Executive Officer, holds a ~~45%~~45% ownership interest. Under the terms of the Agreement, F8 desires to maintain inventory of and sell to Vendor certain Products pursuant to the terms and conditions set forth in the Agreement. As consideration for the inventory management services provided under this Agreement, Vendor agrees to pay F8 a fee for each unit of each Product sold on a Platform determined in accordance with the fee schedule set forth in the applicable Product Schedule (the “Fee Schedule”) based on the Age of Inventory Sold set forth on the Fee Schedule (the “F8 Fees”). Prior to the signing of the agreement, F8 advanced the Vendor ~~$239,283~~ $239,283 that was utilized to pay for deposits with the Vendors factories. This Agreement shall commence on the Effective Date and shall continue in full force and effect until January 31, 2022 (the “Initial Term”), unless terminated earlier as provided in this Agreement. The balance outstanding at ~~June~~September 30, 2021 is $0.

As of ~~June~~September 30, 2021 and December 31, 2020, due to related party consists of net amounts due to SRM Entertainment Group LLC (“SRM LLC”) and NL Penn Capital, LP (“NL Penn”), the majority owner of both, which are owned by Chris Ferguson, our former Chairman and Chief Executive Officer. The amount due to NL Penn was assigned to TXC Services, LLC. The amount due to related parties is related to the acquisitions of Pirasta, LLC and Best Party Concepts, LLC offset by operating expenses that were paid by SRM and Edison Nation on behalf of SRM LLC and NL Penn. As of ~~June~~September 30, 2021 and December 31, 2020, the net amount due to related parties was $15,401and $32,452, respectively. Such amounts are due currently. NL Penn and affiliated entities may lend additional capital to Edison Nation pursuant to terms and conditions similar to the current working capital lenders to Edison Nation such as Franklin Capital. In addition, Edison Nation borrows working capital from Franklin Capital, and Mr. Ferguson is a personal guarantor on the working capital facility provided to Edison Nation by Franklin Capital.

On February 2, 2021, the Company entered into an Employment Agreement (the “Agreement”) with Christopher Ferguson (the “Executive”) for the role of Chief Executive Officer. The Agreement is effective as of November 12, 2020 (the “Effective Date”) and has a term of three (3) years (the “Term”) from the Effective Date. Thereafter, the Agreement shall automatically be renewed and the Term shall be extended for additional consecutive terms of 1 year (each a “Renewal Term”), unless such renewal is objected to by either the Company or the Executive. The Executive’s initial annual base salary shall be $200,000, less applicable withholdings (the “Base Salary”) and 120,000common shares that shall vest in their entirety on issuance. For 2021, the Executive shall receive a cash bonus in the amount equal to 30% of the annual Base Salary, and an award of 200% shares of the Company’s common stock, which shall vest in their entirety on issuance (the “Principal Market”), which shall be received by the Executive no later than the first 30 days of the current fiscal year. The Executive shall be entitled to 150,000shares of the Company’s common stock, due immediately upon an increase of 2.5 times the Enterprise Value of the Company on a 5-day closing average from the effectiveness of the Agreement. ~~As of June 30, 2021,~~For clarification, the Enterprise Value ~~has been achieved.~~as of the Company at the effective date was $25,042,464. Mr. Ferguson tendered his resignation as (i) the Company’s Chief Executive Officer, effective October 25, 2021 and (ii) Chairman of the Board of Directors, effective October 19, 2021.

On February 2, 2021, the Company entered into an Employment Agreement (the “Agreement”) with Brett Vroman (the “Executive”) for the role of Chief Financial Officer. The Agreement is effective as of November 12, 2020 (the “Effective Date”) and has a term of three (3) years (the “Term”) from the Effective Date. Thereafter, the Agreement shall automatically be renewed and the Term shall be extended for additional consecutive terms of 1 year (each a “Renewal Term”), unless such renewal is objected to by either the Company or the Executive. The Executive’s initial annual base salary shall be $200,000, less applicable withholdings (the “Base Salary”) and 120,000common shares that shall vest in their entirety on issuance. For 2021, Executive shall receive a cash bonus in the amount equal to 30% of the annual Base Salary, and an award of 200% shares of the Company’s common stock, which shall vest in their entirety on issuance (the “Principal Market”), which shall be received by the Executive no later than the first 30 days of the current fiscal year. Upon the execution of this agreement, the Executive is entitled to a one-time past performance bonus for the work completed in fiscal years 2018, 2019 and 2020 of 150,000shares of the Company’s common stock, which shall vest in their entirety on issuance. The Executive shall be entitled to 100,000shares of the Company’s common stock, due immediately upon an increase of 2.5 times the Enterprise Value of the Company on a 5-day closing average from the effectiveness of the Agreement. ~~As of June 30, 2021,~~For clarification, the Enterprise Value as of the Company at the effective date was $25,042,464. Mr. Vroman initially tendered his resignation as an officer of the Company, effective November 4, 2021, and has ~~been achieved.~~accepted the position of Chief Financial Officer and Treasurer of Cryptyde, Inc., a wholly-owned subsidiary of the Company. However, on November 9, 2021, Mr. Vroman and the Company elected to retain Mr. Vroman as Chief Financial Officer of the Company until the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021 is filed with the Securities and Exchange Commission on or before November 22, 2021.

On February 2, 2021, the Company entered into an Employment Agreement (the “Agreement”) with Brian Mc Fadden (the “Executive”) for the role of Chief Strategy Officer. The Agreement is effective as of November 12, 2020 (the “Effective Date”) and has a term of three (3) years (the “Term”) from the Effective Date. Thereafter, the Agreement shall automatically be renewed and the Term shall be extended for additional consecutive terms of 1 year (each a “Renewal Term”), unless such renewal is objected to by either the Company or the Executive. The Executive’s initial annual base salary shall be $200,000, less applicable withholdings (the “Base Salary”) and 120,000 common shares that shall vest in their entirety on issuance. For 2021, the Executive shall receive a cash bonus in the amount equal to 30% of the annual Base Salary, and an award of 200% shares of the Company’s common stock, which shall vest in their entirety on issuance (the “Principal Market”), which shall be received by the Executive no later than the first 30 days of the current fiscal year. Upon the execution of the Agreement, the Executive is entitled to a one-time signing bonus of 150,000 shares of the Company’s common stock, which shall vest in their entirety on issuance. The Executive shall be entitled to 100,000 shares of the Company’s common stock, due immediately upon an increase of 2.5 times the Enterprise Value of the Company on a 5-day closing average from the effectiveness of the Agreement. ~~As of June 30, 2021,~~For clarification, the Enterprise Value ~~has been achieved.~~as of the Company at the effective date was $25,042,464. On September 23, 2021, Brian McFadden submitted his resignation effective immediately as the Company’s Chief Strategy Officer in order to accept the role as President of the Company’s newly formed subsidiary, Cryptyde, Inc. The Company and Mr. McFadden shall enter into a new Employment Agreement on terms to be agreed upon within 30 days of his acceptance of the role as President of Cryptyde, Inc.

The Company has entered into non-cancellable operating leases for office, warehouse, and distribution facilities, with original lease periods expiring through 2022. In addition to minimum rent, certain of the leases require payment of real estate taxes, insurance, common area maintenance charges, and other executory costs. Differences between rent expense and rent paid are recognized as adjustments to operating lease right-of-use assets on the consolidated balance sheets.

Total rent expense for the three and ~~six~~nine months ended ~~June~~September 30, 2021 was ~~$32.724~~ $163,911 and ~~$59,277,~~$223,188, respectively. Total rent expense for the three and ~~six~~nine months ended ~~June~~September 30, 2020 was $122,943 and $269,709, respectively. Rent expense is included in general and administrative expense on the consolidated statements of operations.

As of ~~June~~September 30, 2021, the Company had operating lease liabilities of $~~107,776~~$- and right of use assets for operating leases of $~~104,707~~80,544. During the three and ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, operating cash outflows relating to operating lease liabilities was $~~23,723~~5,806 and $~~74,776~~80,582, respectively, and the expense for right of use assets for operating leases was $24,163and $72,490~~77,823~~, respectively. As of ~~June~~September 30, 2021, the Company’s operating leases had a weighted-average remaining term of ~~1.6~~0.9 years and weighted-average discount rate of ~~4.5%~~4.5%. Excluded from the measurement of operating lease liabilities and operating lease right-of-use assets were certain office, warehouse and distribution contracts that qualify for the short-term lease recognition exception.

Fergco leases a portion of the building located in Washington, New Jersey that it owns under a month-to-month lease. Total rental income related to the leased space for both the three and ~~six~~nine months ended ~~June~~September 30, 2021 was $~~28,703~~17,136 and $~~54,407~~71,543, respectively, and is included in other income on the consolidated statements of operations. Total rental income related to the leased space for both the three and ~~six~~nine months ended ~~June~~September 30, 2020 was $~~25,703~~25,704 and $~~51,407~~77,111, respectively, and is included in other income on the consolidated statements of operations.

The Company is involved in claims and litigation in the ordinary course of business, some of which seek monetary damages, including claims for punitive damages, which are not covered by insurance. For certain pending matters, accruals have not been established because such matters have not progressed sufficiently through discovery, and/or development of important factual information and legal information is insufficient to enable the Company to estimate a range of possible loss, if any. An adverse determination in one or more of these pending matters could have an adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

We are, and may in the future become, subject to various legal proceedings and claims that arise in or outside the ordinary course of business.

~~Oceanside Traders, LLC v. Cloud b, Inc. and Vinco Ventures, Inc. f/k/a Edison Nation, Inc.~~

On April 14, 2020, Oceanside Traders, LLC filed a complaint against Cloud B, Inc. and Vinco Ventures, Inc. with the Superior Court of Ocean County, State of New Jersey, alleging breach of contract and other claims resulting in total damages in the amount of $~~440,383, consisting of $141,007~~ ~~for failure to pay plaintiff for goods sold, for $138,180~~ ~~for overpayments and $161,196~~ for lost profits. On November 9, 2020, Plaintiff filed an amended complaint, adding other defendants, alleging breach of contract, breach of covenant of good faith and fair dealing, quasi-contract/unjust enrichment, conversion, fraud, negligent misrepresentation, fraudulent transfer, and piercing the corporate veil. On December 4, 2020, Vinco Ventures, Inc. filed its amended answer. On December 28, 2020, the other defendants filed a motion to dismiss on jurisdictional grounds which is currently pending before the court. On February 24, 2021, the Company entered into a Settlement Agreement and General Release of All Claims (the “Settlement Agreement”) with Edison Nation, LLC, Pearl 33 Holdings, LLC and Christopher Ferguson (collectively, the “Settling Defendants”) and Oceanside Traders, LLC (the “Plaintiff”). Under the terms of the Settlement Agreement, the Settling Defendants agreed to pay the Plaintiff the sum of $150,000 within one business day of execution of the Settlement Agreement. In exchange, the Plaintiff agreed to dismiss the Amended Complaint in its entirety and with prejudice against the Settling Defendants. The Company made payment in the amount of $150,000 on February 25, 2021.

On March 13, 2019, Rosenberg Fortuna & Laitman, LLP and Mark Principe filed a complaint against Safe TV Shop, LLC with the Supreme Court of the State of New York, County of Nassau alleging a breach of indemnification arising out of the use of a certain packaging material. On February 12, 2020, the parties entered a Stipulation and Settlement and Consent Agreement for a Consent Judgment in the amount of $~~50,000~~. Safe TV, LLC has no assets and there have been no operations by Safe TV, LLC since the date of acquisition by Vinco Ventures, Inc. On April 5, 2021, the Company, through Safe TV Shop, LLC, entered into a Settlement Agreement and Release of Claims (the “Settlement”). ~~Under the terms of the Settlement, the Company is to make payment in the amount of $25,000 on or before April 9, 2021. The Company made payment in the amount of $25,000 on April 8, 2021.~~

On October 27, 2020, Gerald Whitt, et al, the minority shareholders of Cloud b Inc. (“Whitt Plaintiffs”) filed a civil complaint in the Superior Court of the State of California against Vinco Ventures, Inc., CBAV1, LLC and other parties, alleging fraudulent concealment, breach of fiduciary duty, breach of contract, breach of confidence, intentional misrepresentation, negligent misrepresentation, unfair business practices and civil conspiracy (the “Whitt Complaint”). ~~The Whitt Plaintiffs seek “in excess of $8,000,000” in damages. Defendants’ position is that the Whitt Complaint is frivolous and the filing of same was an abuse of process.~~ Defendants have not been served with the Whitt Complaint. On or about June 4, 2021, CBAV1 entered into a settlement agreement with the trustee for Cloud b, Inc., whereby ~~CBAV1 paid $500,000~~ ~~to the Cloud b Estate for distribution to its unsecured creditors. As part of the settlement,~~ all derivative claims on behalf of Cloud b, Inc. in the Whitt Complaint were released as to CBAV1 and its affiliates, shareholders, officers, directors, employees and other parties. There are a limited number of non-derivative claims against individuals that were not ~~released.~~

~~In re CBAV1, LLC, Debtor, Chapter 11 Bankruptcy/In re Cloud b, Inc., Debtor Chapter 7 Bankruptcy~~

~~On October 30, 2020, CBAV1, LLC filed a voluntary petition under Chapter 11 of title 11 of~~released that are not expected to have any impact on the ~~United States Code, as amended (the “Bankruptcy Code”).~~ On October 30, 2020, Cloud b filed a voluntary petition under Chapter 7 of the Bankruptcy Code. On November 15, 2020, a prospective buyer entered into a non-binding letter of intent to purchase the CBAV1 Assets for $2,250,000. On December 18, 2020, CBAV1, LLC filed a motion to sell substantially of the CBAV1 Assets free and clear of all interests, liens, claims and encumbrances. On that same date, CBAV1, LLC also filed a motion to approve (i) certain procedures for the submission of bids in connection with the sale of substantially all of the assets, (ii) the break-up fee and expense reimbursement, (iii) scheduling an auction and (iv) scheduling a sale hearing. On January 21, 2021, the prospective buyer entered into an asset purchase agreement to buy the CBAV1 Assets for $~~2,250,000, on terms and conditions set forth therein.~~ On March 12, 2021, the court approved the sale of the CBAV1 Assets to the winning bidder at the auction held on March 10, 2021 and March 11, 2021 for the total sum of $3,000,000 US. A cash payment in the amount of $2,650,000, less certain credits, was made at closing on April 21, 2021 with additional payments in the amounts of $150,000 US due on April 15, 2022 and $200,000 US on April 15, 2023.Company.

Vinco Ventures, Inc., et al. v. Milam Knecht & Warner, LLP, Michael D. Milam, Gerald Whitt, Alexander Whitt, et al.

On December 31, 2020, Vinco Ventures, Inc., and other parties, filed a complaint against the Whitt Plaintiffs, and other parties, with the United States District Court for Eastern District of Pennsylvania, alleging intentional misrepresentation, negligent misrepresentation, negligence, conspiracy, unfair business practices, abuse of process, civil extortion, trade libel and defamation. ~~Defendants entered their appearances, Plaintiffs filed an amended complaint~~All claims were dismissed and/or settled except for two (2) claims (unfair business practices and ~~Defendants filed motions to dismiss the complaint, which are currently pending before the Court.~~defamation) against Gerald Whitt.

The Company is authorized to issue 250,000,000 shares of common stock. As of ~~June~~September 30, 2021 and December 31, 2020, there were ~~59,927,241~~ 107,021,381and 14,471,403shares of common stock issued and outstanding, respectively.

On January 29, 2021 (the “Effective Date”), the Company consummated the closing of a private placement offering of $3,300,000 whereby pursuant to the Securities Purchase Agreement entered into by the Company on January 28, 2021 with BHP Capital NY Inc (the “Investor”), the Company issued 1,500,000 shares of restricted common stock and a five (5) year warrant to purchase shares of the Company’s common stock.

During the ~~six~~nine months ended ~~June~~September 30, 2021, warrant shares of ~~31,742,986~~69,212,800 were exercised and the Company received net proceeds of $~~87,785,419~~180,341,414.

On October 16, 2020, the Company filed a Certificate of Designation (the “Designation”) with the Secretary of State of Nevada, which designates 1,000,000 shares of the Company’s preferred stock, par value $0.001 per share, as Series B Convertible Preferred Stock (“Series B”). Pursuant to the terms of the Designation, holders of the Series B shall be entitled to dividends, a liquidation preference and shall have conversion rights. Each share of Series B shall be convertible into 1 share of Common Stock, on or after the twelve-month anniversary of the Original Issue Date at the option of the Holder thereof, for a total not to exceed 1,000,000 shares of Common Stock. The holders of the Series B shall have no voting rights.

On February 2, 2021, the Company filed an Amendment to the Certificate of Designation (the “Amendment”) for the Company’s Series B Convertible Preferred Stock (“Preferred Stock”). Under the Amendment, each share of Preferred Stock shall entitle the holder thereof to vote on all matters voted on by the holders of Common Stock, voting together as a single class with other shares entitled to vote at all meetings of the stockholders of the Corporation. With respect to any such vote, each share of Preferred Stock shall entitle the holder thereof to cast the number of votes equal to the number of whole shares of Common Stock into which such shares of Preferred Stock are then convertible (the “Conversion Shares”). Such right may be exercised at any annual meeting or special meeting, or pursuant to any written consent of stockholders.

On March 25, 2020, the Company filed a certificate of amendment to the Company’s articles of incorporation with the Secretary of State of the State of Nevada in order to: (i) increase the number of shares of the Company’s authorized preferred stock, par value $0.001 per share, from 0 shares to 30,000,000 shares of preferred stock; (ii) clarify the application of the forum selection clause in the Company’s amended and restated articles of incorporation, specifically that such clause does not apply to federal causes of actions arising under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (the “Exchange Act”); and (iii) include affirmative changes to correspond to the Company’s First Amended and Restated Bylaws, confirming that the Company’s shareholders may vote by written consent.

On May 26, 2021, the Company issued 764,618 shares of common stock valued at $1,276,912 upon conversion of the Company’s Series B Preferred Stock.

The Company is authorized to issue 30,000,000 shares of preferred stock. As of ~~June~~September 30, 2021 and December 31, 2020, there were 0 and 764,618 shares of Series B Preferred Stock issued and outstanding, respectively.

On September 4, 2021, the Company’s board of directors approved the Vinco Ventures, Inc. 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan provides for the issuance of up to 9,000,000 (9,000,000 remaining as of November 19, 2021) shares of common stock to help align the interests of management and our shareholders and reward our executive officers for improved Company performance. Stock incentive awards under the Plan can be in the form of stock options, restricted stock units, performance awards and restricted stock that are made to employees, directors and service providers. Awards are subject to forfeiture until vesting conditions have been satisfied under the terms of the award. The exercise price of stock options is equal to the fair market value of the underlying Company common stock on the date of grant.

On July 15, 2020, the Company filed a Registration Statement on Form S-8 registering 1,764,705 (258,376 remaining as of November 19, 2021) shares of common stock to be issued as stock-based incentives under the Company’s Amended and Restated Vinco Ventures, Inc. Omnibus Incentive Plan.

On September 26, 2018, the Compensation Committee of the board of directors approved the terms of compensation to be paid to non-employee directors for fiscal year 2018. Compensation for non-employee directors includes an annual retainer of $20,000, an annual committee meeting fee of $5,000, if such director chairs a committee of the board of directors, and an award of options to purchase 20,000 shares of the Company’s common stock (the “Options”). The restricted stock underlying such Options were to vest one year after the grant date. However, the Options were never granted. Accordingly, On November 15, 2019, in lieu of granting the Options, the Company granted each member of the board of directors restricted stock units of 20,000 shares which vested immediately, except for Toper Taylor who received 30,000 shares in November 2019, related to the share amounts due to him under the terms of his agreement with us. In addition, the Company granted each non-employee director restricted stock units of 30,000 shares, which vested on January 1, 2020.

On September 6, 2018, the Company’s board of directors approved an amendment and restatement of the Company’s omnibus incentive plan solely to reflect the Company’s name change to Edison Nation, Inc. Thus, the Edison Nation, Inc. Omnibus Incentive Plan (the “Plan”) which remains effective as of February 9, 2018, provides for the issuance of up to 1,764,705(~~287,659~~17,220 remaining as of ~~June 30,~~November 19, 2021) shares of common stock to help align the interests of management and our stockholders and reward our executive officers for improved Company performance. Stock incentive awards under the Plan can be in the form of stock options, restricted stock units, performance awards and restricted stock that are made to employees, directors and service providers. Awards are subject to forfeiture until vesting conditions have been satisfied under the terms of the award. The exercise price of stock options is equal to the fair market value of the underlying Company common stock on the date of grant.

The following table summarizes stock option awards outstanding at ~~June~~September 30, 2021:

	Shares		Weighted Average Exercise Price		Remaining Contractual Life in Years		Aggregate Intrinsic Value		Shares		Weighted Average Exercise Price		Remaining Contractual Life in Years		Aggregate Intrinsic Value
Balance, December 31, 2020		80,000	$	7.01		3.2		-		80,000	$	7.01		3.2		-
Granted		-		-		-		-		-		-		-		-
Balance, June 30, 2021		80,000	$	7.01		2.9		-
Exercisable, June 30, 2021		80,000	$	7.01		2.9		-
Balance, September 30, 2021										80,000	$	7.01		2.9		-
Exercisable, September 30, 2021										80,000	$	7.01		2.9		-

As of ~~June~~September 30, 2021, there were no unvested options to purchase shares of the Company’s common stock and there was no unrecognized equity-based compensation expense that the Company expected to recognize over a remaining weighted-average period.

The Company issued ~~2,861,227~~2,891,227 shares of common stock to employees for services valued at $~~7,495,864~~7,590,664 for the ~~six~~nine months ended ~~June~~September 30, 2021.

The Company issued ~~1,457,849~~1,891,272 shares of common stock to vendors for services valued at $~~3,365,840~~4,213,602 for the ~~six~~nine months ended ~~June~~September 30, 2021.

From time to time, the Company grants shares of common stock to consultants and non-employee vendors for services performed. The awards are valued at the market value of the underlying common stock at the date of grant and vest based on the terms of the contract which is usually upon grant.

Vinco and the Purchaser also entered into a Registration Rights Agreement, dated as of July 23, 2021, whereby Vinco agree to prepare and file, within 40 days of the closing, with the SEC a registration statement covering the resale of all Purchased Shares and Warrant Shares issued and sold to the Purchaser pursuant to the Purchase Agreement. In the event that such registration statement is not filed within 40 days of the closing, or if such registration statement does not become effective within 80 days of its filing, Vinco shall issue an additional 50,360 shares of Common Stock and warrants to purchase an additional 50,360 shares of Common Stock to the Purchaser.

On January 28, 2021 (the “Effective Date”), the Company consummated the closing of a private placement offering (the “Offering”) whereby pursuant to the Securities Purchase Agreement (the “SPA”) entered into by the Company on January 28, 2021 with BHP Capital NY Inc (the “Investor”), the Company issued 1,500,000 shares of restricted common stock and a five (5) year warrant (the “Warrant”) to purchase shares of the Company’s common stock, par value $0.001 per share (“Common Stock”).

Pursuant to the SPA, the Investor received a Warrant in an amount equal to 100% of the shares of Common Stock issued to the Investor under the SPA. The Warrant contains an exercise price of $2.20 per share. In connection with the closing of the Offering, the Warrant was issued to purchase an aggregate of 1,500,000 shares of Common Stock (the “Warrant Shares”).

The Company also entered into a Registration Rights Agreement with the Investor (the “Registration Rights Agreement”). The Registration Rights Agreement provides that the Company shall (i) file with the Securities and Exchange Commission (the “Commission”) a Registration Statement by 30 days following the Closing Date to register the Conversion Shares and Warrant Shares (the “Registration Statement”); and (ii) use all commercially reasonable efforts to have the Registration Statement declared effective by the Commission within 60 days following the Closing Date or at the earliest possible date, or 75 days following the Closing Date if the Registration Statement receives comments from the Commission.

On January 28, 2021 (the “Effective Date”), the Company consummated the closing of a private placement offering (the “Offering”) whereby pursuant to the Securities Purchase Agreement (the “SPA”) entered into by the Company on January 28, 2021 with BHP Capital NY Inc (the “Investor”), the Company issued ~~1,500,000~~ ~~shares of restricted common stock and a five (~~5~~) year warrant (the “Warrant”) to purchase shares of the Company’s common stock, par value $0.001~~ ~~per share (“Common Stock”).~~

~~Pursuant to the SPA, the Investor received a Warrant in an amount equal to~~ ~~100% of the shares of Common Stock issued to the Investor under the SPA. The Warrant contains an exercise price of $2.20~~ ~~per share. In connection with the closing of the Offering, the Warrant was issued to purchase an aggregate of~~ ~~1,500,000~~ ~~shares of Common Stock (the “Warrant Shares”).~~

On June 4, 2021, the Company entered into a warrant exercise agreement (the “Agreement”) with BHP Capital NY Inc. (“BHP”) who agreed to exercise a portion of the January Warrants and the Company agreed to issue additional warrants, to purchase shares of Common Stock at a per-share exercise price equal to $3.20 (the “Incentive Warrants”, all pursuant to the terms and conditions set forth in the Agreement. At the Closing (as defined in Section 2(b) of the Agreement), the Parties shall execute and deliver a registration rights agreement (the “Registration Rights Agreement”), pursuant to which the Company will agree to register the shares of Common Stock underlying the Incentive Warrants. Subject to the terms of Agreement, (i) BHP shall pay to the Company an amount equal to the exercise price in effect as of the date of such exercise multiplied by 1,500,000 shares (as adjusted for any share split or similar transaction after the date hereof) (the “Exercised Warrant Shares”) and (ii) the Company shall issue and deliver Incentive Warrants to BHP to initially purchase an aggregate number of shares equal to the number of Exercised Warrant Shares, which number of shares shall be subject to adjustment upon the exercise of further shares pursuant to the January Warrants. During the ~~six~~nine months ended ~~June~~September 30, 2021, the Investor exercised 1,500,000 warrants and received 1,500,000 incentive warrants.

Discontinued operations are accounted for in accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Section 360-10-35 Property, Plant and Equipment. In accordance with FASB ASC Section 360-10-35, the net assets of discontinued operations are recorded on our consolidated balance sheets at carrying value. The results of operations of discontinued operations are segregated from continuing operations and reported separately as discontinued operations in our consolidated statements of loss and comprehensive loss.

On March 12, 2021, the bankruptcy court approved the sale of the CBAV1, LLC Assets to BTL Diffusion SARL, the winning bidder, at the auction held on March 10, 2021 and March 11, 2021 for a total sum of $3,000,000, which includes a cash payment at closing in the amount of $2,650,000, less certain closing costs and credits, and additional royalty payments in the amount of $150,000 on April 15, 2022 and in the amount of $200,000 on April 15, 2023 (“CBAV1-BTL Transaction”).

On November 30, 2020, the Company (the “Seller”) and its wholly owned subsidiary, SRM Entertainment, LTD (“SRM”) entered into a Stock Exchange Agreement (the “Exchange Agreement”) with Jupiter Wellness, Inc. (“Jupiter”)(the “Buyer”). Under the terms of the Exchange Agreement, the Buyer agreed to purchase all outstanding shares of common stock (the “Exchange Shares”) issued by SRM from the Seller. As consideration for the purchase of the Exchange Shares, the Buyer agreed to exchange 200,000 shares of its restricted common stock (the “Consideration Shares”), symbol JUPW as listed on NASDAQ Capital Markets. The Company made the decision to divest the amusement park business due to the slow re-openings of amusement parks around the world and the investment that would have been needed to remain open and the investment required to relaunch as the amusement parks begin to get back to full capacity.

The following table presents the carrying values of the assets and liabilities of our discontinued operations at ~~June~~September 30, 2021 and December 31, 2020, respectively:

	June 30, 2021		December 31, 2020		September 30, 2021		December 31, 2020

Assets
Current assets:
Accounts receivable, net	$	-	$	220,964	$	-	$	220,964
Inventory		-		559,737		-		559,737
Prepaid expenses and other current assets		-		261,980		-		261,980
Total current assets		-		1,042,680		-		1,042,680
Intangible assets, net		-		5,739,524		-		5,739,524
Total assets	$	-	$	6,782,204	$	-	$	6,782,204

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	120,729	$	487,454	$	-	$	487,454
Total current liabilities	$	120,729	$	487,454	$	-	$	487,454

The following table presents the summary results of operations of our discontinued operations for the three and ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, respectively:

											2021			2020			2021			2020
	For the Three Months Ended June 30,					For the Six Months Ended June 30,					For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2021			2020		2021			2020		2021			2020			2021			2020
Revenues, net	$	-		$	1,706,044		697,883			3,419,808	$	-		$	1,729,006			697,883			5,148,814
Cost of revenues		-			884,848		490,195			1,939,541		-			1,163,630			490,195			3,103,171
Gross profit		-			821,196		207,688			1,480,267		-			565,376			207,688			2,045,643

Operating expenses:
Selling, general and administrative		99,286			393,077		385,888			1,396,127		-			856,883			385,888			2,253,011
Operating income		(99,286	)		428,119		178,200			84,140		-			(291,507	)		(178,200	)		(207,366	)

Other (expense) income:
(Loss) gain on disposal		(4,308,780	)		-		(4,308,780	)		4,911,760		(153,320	)		-			(4,933,900	)		4,911,760
Total other (expense) income		(4,308,780	)		-		(4,308,780	)		4,911,760		(153,320	)		-			(4,933,900	)		4,911,760
(Loss) income before income taxes		(4,408,066	)		428,119		(4,486,980	)		4,995,900		(153,320	)		(291,507	)		(5,112,100	)		4,704,394
Income tax expense		-			-		-			-		-			-			-			-
Net (loss) income	$	(4,408,066	)	$	428,119		(4,486,980	)		4,995,900	$	(153,320	)	$	(291,507	)		(5,112,100	)		4,704,394

On October 1, 2021, ZVV and ZASH and AdRizer LLC (“AdRizer”) entered into a Letter of Intent (as amended, the “LOI”) for ZASH or ZVV to acquire all the outstanding membership and other equity interests of AdRizer. The LOI has an exclusivity period ending on December 31, 2021. The parties are continuing their negotiations of the structure of the transaction and preparation of definitive documentation for the acquisition. Pursuant to current discussions among the parties, ZVV is expected to acquire all the outstanding membership/equity interests in AdRizer, either via merger, purchase of such membership/equity interests from the AdRizer members, or other transaction structure, as mutually agreed, such that AdRizer will continue as a wholly owned subsidiary of ZVV, for an aggregate purchase price of $108,000,000 payable as follows: (i) $15,000,000 payable in cash at closing, to be funded by Vinco Ventures as a capital contribution to ZVV, (ii) $10,000,000 in cash to be funded by Vinco Ventures as a capital contribution to ZVV, which will be placed in escrow for a period of 12 months after the closing to secure the indemnification obligations of the AdRizer members, and (iii) $83,000,000 in common stock of ZASH or Vinco Ventures to be issued two years from (or otherwise locked up for two years from) the closing date, subject to conditions to be agreed upon. The stock consideration value will be based on a mutually agreeable valuation.

In addition, ZASH or ZVV are expected to invest a minimum of $5,000,000 of cash in AdRizer for its post-closing working capital needs, to be funded $1,000,000at closing and $1,000,000 every 3 months thereafter.

On October 2, 2021, Vinco Ventures, Inc.’s wholly owned subsidiary, Cryptyde, Inc., filed Articles of Organization with the State of Nevada to form CW Machines, LLC. The formation of CW Machines, LLC is part of a joint venture with Wattum Management, Inc.

On October 8, 2021, the Company issued 56,250 shares of common stock to a consultant for services performed in connection with EVNT Platform, LLC.

On October 14, 2021, the Company’s wholly owned subsidiary, Cryptyde, Inc. (the “Lender”), entered into a Senior Secured Promissory Note (the “Note”) with Wattum Management, Inc. (the “Borrower”) to loan funds in the principal amount of $4,000,000. The Note bears interest at 5% annually, to be amortized over 25 years and the Borrower shall pay the full amount of principal and interest in one balloon payment on October 12, 2026 (the “Maturity Date”). The Note is secured, through a Security Agreement, by all current and future assets of the Borrower. The transaction closed on October 26, 2021.

On October 19, 2021, the Company issued 6,672,710 shares of common stock to note holders, EVNT Platform, LLC preferred members, consultants and employees and directors.

On October 26, 2021, the Company issued 7,222,804 shares of common stock to warrant holders for the exercise of warrants.

On October 27, 2021, the Company issued 1,007,194 shares of common stock to warrant holders for the exercise of warrants.

Christopher Ferguson, tendered his resignation as (i) the Company’s Chief Executive Officer, effective October 25, 2021 and (ii) Chairman of the Board of Directors, effective October 19, 2021.

Lisa King has been appointed as the Company’s Chief Executive Officer and President, effective October 25, 2021. The Company and Ms. King are entering into an employment agreement to be effective as of October 25, 2021.

Stephen Garrow has been appointed as the Company’s Chief Operating Officer, effective October 25, 2021. The Company and Mr. Garrow are entering into an employment agreement to be effective as of October 25, 2021.

Philip Jones is expected to be appointed as the Company’s Chief Financial Officer, effective on or about November 23, 2021. The Company and Mr. Jones plan to enter into an employment agreement to be effective as of the date of Mr. Jones’ appointment as the Chief Financial Officer.

On ~~July 7,~~November 1, 2021, the Company announced that its wholly owned subsidiary, Cryptyde, Inc., had entered into ~~an amendment agreement~~a joint venture with ~~Hudson Bay~~Wattum Management, Inc. to launch a newly formed entity, CW Machines, LLC, to sale turnkey BTC mining operations.

On November 8, 2021, Cryptyde, Inc. filed its Form 10 registration statement with the United States Securities and Exchange Commission in connection with the ~~January warrants~~planned spinoff of selected subsidiaries, Cryptyde, Inc., Ferguson Containers, Inc., EVNT Platform, LLC and ~~February warrants which extended the exercise period of the warrant exercise agreement dated June 4, 2021 to August 9, 2021.~~

On July 23, 2021, Vinco entered into a Securities Purchase Agreement (the “Purchase Agreement”) with BHP Capital NY Inc. (the “Purchaser”) whereby Vinco agreed to (i) issue and sell to the Purchaser up to ~~1,007,194~~ ~~shares of Vinco’s common stock, par value $0.001~~ ~~per share (the “Purchased Shares”) at a purchase price of $2.78~~ ~~per share and (ii) issue warrants (the “Warrants”) to purchase up to~~ ~~1,007,194~~ ~~shares of Vinco’s Common Stock (the “Warrant Shares”) with an exercise price of $2.78~~ ~~per share, resulting in an aggregate of $2,800,000~~ ~~of Purchased Shares and Warrants. The Warrants are immediately exercisable and have a term of exercise equal to three (~~3) years. In connection with the Purchase Agreement, Vinco and the Purchaser also entered into a Registration Rights Agreement, dated as of July 23, 2021, whereby Vinco agree to prepare and file, within 40 days of the closing, with the SEC a registration statement covering the resale of all Purchased Shares and Warrant Shares issued and sold to the Purchaser pursuant to the Purchase Agreement. In the event that such registration statement is not filed within 40 days of the closing, or if such registration statement does not become effective within 80 days of its filing, Vinco shall issue an additional ~~50,360~~ ~~shares of Common Stock and warrants to purchase an additional~~ ~~50,360~~ ~~shares of Common Stock to the Purchaser.~~

On ~~July 22,~~November 11, 2021, the Company and Hudson Bay Master Fund Ltd (the “Effective Date”), Vinco Ventures, Inc. (the “Company”) consummated the closing of a private placement offering (the “Offering”) whereby pursuant to the Securities Purchase Agreement (the “Purchase Agreement”“Holder”) entered into bya Warrant Exercise Agreement (the “November WEA”), whereby, the Company onand the Holder agreed the Holder would exercise 2,438,700 July ~~22, 2021 with one accredited investor~~Warrants and 9,561,300 August Series A Warrants (collectively, the “Exercised Warrants”) representing the right to acquire shares (the ~~“Investor”~~“Exercised Warrant Shares”), of Common Stock and the Company ~~issued a Senior Secured Convertible Note in the amount of $120,000,000~~ ~~for the purchase price of $100,000,000 ($20,000,000~~ ~~OID)(the “Note”) and five (~~5~~) year~~would issue additional warrants ~~(the “Warrant”)~~ to purchase shares of ~~the Company’s common stock, par value $0.001~~ ~~per share (“Common Stock”).~~

~~The Note shall carry no interest unless and until an event of default shall occur and matures on~~ ~~July 22, 2022~~. The Note contains a voluntary conversion mechanism whereby the Noteholder may convert at any time after the Issuance Date, in whole or in part, the outstanding principal and interest under the Note into shares of the Common Stock at a ~~conversion~~per-share exercise price equal to $4.527 (the “November Warrants” and, together with the July Warrants and the August Series A Warrants, the “Warrants”), and to amend the September Warrant issued by the Company to the Holder pursuant to that certain Warrant Exercise Agreement dated as of $~~4.00~~ ~~per share (the “Conversion Shares”). The Note shall be a senior secured obligation of~~September 1, 2021 by and among the Company and ~~its subsidiaries. The Note contains customary events of default (each an “Event of Default”). If an Event of Default occurs, interest under~~ the ~~Note will accrue at a rate of twelve percent (~~18%Holder (“September WEA”) ~~per annum~~ and the ~~outstanding principal amount~~July Notes.

The proceeds to the Company from the exercise of the ~~Note, plus accrued~~Exercised Warrants were approximately $31.86 million, before deducting certain expenses incurred by the Company in connection with the November WEA and, including, but ~~unpaid interest, liquidated damages and other amounts owing with respect~~not limited to, expenses of the Holder’s legal counsel.

Subject to the ~~Note will become, at~~satisfaction (or waiver) of the ~~Note holder’s election, immediately due and payable in cash. Upon completion of a Change of Control (as defined~~conditions set forth in the ~~Note),~~November WEA, (i) the ~~Note’s holder may require the Company to purchase any outstanding portion of the Note in cash at a price in accordance with the terms of the Note.~~

~~Pursuant~~Holder shall pay to the ~~Purchase Agreement, the Investor received a Warrant in~~Company an amount equal to the Exercise Price multiplied by the applicable Exercised Warrant Shares, (ii) the Company shall issue and deliver to the Holder the Exercised Warrant Shares of the Exercised Warrants, and (iii) ~~100~~the Company shall issue and deliver to the Holder November Warrants to initially purchase an aggregate number of shares equal to 125% of the number of Exercised Warrant Shares plus the number of any other shares issued to the Holder upon the exercise of other outstanding warrants or the conversion of the Company’s outstanding convertible notes prior to December 31, 2021, which number of shares shall be subject to adjustments as set forth therein.~~% of~~ Additionally, pursuant to the November WEA, the “Minimum Cash” requirement contained in the July Note was amended to provide that the Minimum Cash amount is not required at any time to exceed the Principal outstanding at such time.

Additionally, the parties executed and delivered a Registration Rights Agreement (the “Registration Rights Agreement”), pursuant to which the Company agreed to file an initial registration statement with respect to the shares of Common Stock ~~initially issuable~~underlying the Registrable Securities by January 15, 2022.

Pursuant to the ~~Investor pursuant to~~November WEA, by no later than one hundred twenty (120) calendar days after the ~~conversion terms of the Investor’s Note. The Warrant contains an exercise price of $4.00~~ ~~per share, subject to adjustments as provided under the terms of the Warrant. In connection with the closing of the Offering, the Warrant was issued for an aggregate of~~ ~~32,697,548~~ ~~shares of Common Stock (the “Warrant Shares”).~~

~~The Company also entered into a Registration Rights Agreement with the Investor (the “Registration Rights Agreement”). The Registration Rights Agreement provides that~~Closing Date, the Company shall ~~(i)~~ file with the Securities and Exchange Commission a definitive proxy statement for a special meeting of the stockholders of Common Stock (the ~~“Commission”~~“Stockholder Meeting”) ~~a Registration Statement by 30~~, soliciting each such stockholder’s affirmative vote at the Stockholder Meeting for approval of resolutions providing for (i) the issuance of all the shares of Common Stock issuable pursuant to the November Warrants, (ii) approving any voluntary adjustments that the Company may offer pursuant to the terms of any of the November Warrants, and (iii) the increase in authorized number of shares of Common Stock of the Company to at least 300,000,000. The Stockholder Meeting shall be promptly called and held not later than one hundred fifty (150) calendar days ~~following~~after the Closing Date (the “Stockholder Meeting Deadline”). In the event Stockholder Approval is not obtained on or prior to the Stockholder Meeting Deadline, the Holder can elect to, instead of receiving the ~~Purchase Agreement to register the Conversion Shares and~~November Warrant Shares, (the “Registration Statement”); and (ii) use all commercially reasonable efforts to have the Registration Statement declared effective by the Commission within 60 days following the Closing Date or at the earliest possible date, or 75 days following the Closing Date if the Registration Statement receives commentsreceive an aggregate cash payment from the ~~Commission.~~Company equal to such number of November Warrant Shares multiplied by $0.65

~~Palladium Capital Group, LLC. (the “Placement Agent”) acted as placement agent~~ for ~~the Offering.~~ ~~The Placement Agent received cash compensation of $1,000,000~~ plus a Note of $8,000,000 which is deferred and only due upon the closing of the merger with Zash (8% of the gross proceeds to the Company plus an additional 1% of the gross proceeds to the Company for non-accountable expenses).

On ~~July 19,~~November 11, 2021, ~~Zash, Lomotif Private Limited~~the Company’s wholly owned subsidiary, Cryptyde, Inc. (“~~Lomotif”~~TYDE”), ~~the Lomotif selling shareholders~~ and ~~ZVV,~~ Hudson Bay Master Fund Ltd (the “Holder”) entered into ~~a Deed of Variation and Supplement~~an Amendment Agreement (the ~~“Deed of Variation”~~“Amendment Agreement”) whereby ~~among other things, Zash novated all of its rights and obligations under~~ the Lomotif SPA to ZVV and ZVV assumed all of Zash’s rights and obligations under the Lomotif SPA as if ZVV had been a party to the Lomotif SPA in place of Zash. On July 23, 2021, ZVV paid as consideration $~~100~~ ~~million from the Senior Secured Convertible Note that closed on July 22, 2021, which resulted in ZVV acquiring an~~ 80~~% interest in Lomotif.~~

~~On July 1, 2021, the Company issued a total of~~ ~~30,000~~ ~~shares valued at $94,800~~ ~~to an employee for severance.~~

~~On August 18, 2021, the Company entered into a warrant exercise agreement (the “Agreement”) with the Investor whereby the Parties~~parties agreed that, subject to the satisfaction (or waiver) of the conditions set forth in ~~Sections 4 and 5 of~~ the Amendment Agreement: (i) the ~~Investor~~Holder shall ~~pay~~amend its right to receive the Spin-off Distribution in the form of shares of TYDE’s common stock (“TYDE Common Stock”) and to receive instead a warrant issued by TYDE to purchase TYDE Common Stock for such number of shares of TYDE Common Stock that the Holder would have been entitled to receive in the Spin-off Distribution had the Holder exercised all its Company Warrants on the record date for the Spin-off Distribution (the “TYDE Warrant”); and (ii) contemporaneously with the entry into the Amendment Agreement, for TYDE and the Holder to enter into a registration rights agreement (the “TYDE Registration Rights Agreement”) to provide for all Registrable Securities to be covered by a registration statement filed and declared effective on or prior to the distribution date of the Spin-off Transactions. The Company ~~an amount equal~~agreed to issue to the ~~Exercise Price as defined in~~Holder the ~~January Warrants and February Warrants (the “Existing Warrants”) in effect as of the date of such exercise multiplied by the Existing~~November Warrant ~~shares as defined in the Agreement; (ii) the Company shall issue and deliver~~pursuant to the ~~Investor the Existing Warrant shares as~~terms and conditions set forth in ~~Section 1 of~~ the ~~Existing Warrants; (iii) the Company shall~~November WEA and (ii) TYDE agreed to issue ~~and deliver~~ to the ~~Investor additional warrants to purchase an aggregate of~~ ~~20,500,000~~ ~~shares of Common Stock at an exercise price of $2.655~~ ~~per share, subject to adjustments provided therein (the “August Series A Warrants”); and (iv)~~Holder the ~~Company shall issue and deliver to the Investor additional warrants to purchase an aggregate of~~ ~~2,000,000~~ ~~shares of Common Stock at an exercise price of $2.655~~ per share, subject to adjustments provided therein (the “August Series B Warrants,” and together with the August Series A Warrants, the “August Warrants”). The terms of the August Series A Warrants and the August Series B Warrants are substantially identical, except that, upon stockholder approval, the August Series B Warrants will be subject to an Alternate Cashless Exercise, as defined therein.

~~In addition,~~TYDE Warrant pursuant to the ~~Agreement, the Parties also agreed, among other things, that (i) upon entering into the Agreement, the exercise price of the July Warrants is reduced to $2.655~~ ~~per share;~~terms and ~~(ii) the definition of “Initial Exercisability Date” (as defined~~conditions set forth in the ~~June Incentive Warrant) is amended to mean August 18, 2021.~~

~~On August 18, 2021, the Investor exercised the remaining~~ ~~4,600,000~~Amendment Agreement. ~~warrants under the February Warrants at a price of $3.722~~ ~~for a total amount of $17,121,200~~.

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

You should read the following discussion of our financial condition and results of operations in conjunction with our condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission. In addition to our historical condensed consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly in Part II, Item 1A, “Risk Factors.”

Vinco ~~Ventures: End-to-end product innovation, development~~Ventures is Focused on Digital Media and ~~commercialization~~Content Technologies

Our Company was incorporated on July 18, 2017 in the State of Nevada under the name of Idea Lab X Products, Inc, On September 12, 2017, we filed an Amendment to our Articles of Incorporation changing the name to Xspand Products Lab, Inc., and then on September 7, 2018 we filed an Amendment to our Articles of Incorporation changing the name to Edison Nation, Inc. On November 5, 2020, the Company (the “Parent”) and its wholly owned subsidiary, Vinco Ventures, Inc. (the “Merger Sub”), entered into an Agreement and Plan of Merger (the “Agreement”). Under the terms of the Agreement, the Merger Sub merged with and into the Parent and the Parent became the surviving corporation of the Merger (the “Surviving Corporation”). The name of the Surviving Corporation became Vinco Ventures, Inc. The transaction closed on November 10, 2020.

In connection with the recent acquisition of Lomotif Private Limited (“Lomotif”) by ZVV Media Partners, LLC (“ZVV”), our joint venture with ZASH Global Media and Entertainment Corp., we are transitioning from focusing on end-to-end consumer product innovation, development and commercialization to digital media and content technologies. We currently operate in the following markets through our subsidiaries and consolidated variable interest entities:

~~Vinco Ventures,~~Lomotif – Lomotif is a video-sharing social networking platform that is democratizing video creation. Since the company was co-founded by video enthusiast Paul Yang in 2014, Lomotif has been granted three technology patents focused on empowering creators to share and watch short videos with ease through remix and collaboration. Yang’s bold vision is to build the world’s largest video vocabulary to accelerate the world’s transition to video-first expression. Lomotif, available in the Apple and Google stores, is a downloadable app that has grown worldwide as a grassroots social community with dedicated users spanning from Asia to South America to the U.S.

Cryptyde – Cryptyde, Inc. is focused on leveraging blockchain technologies to disrupt consumer facing industries. Rather than create a new industry, Cryptyde seeks to ~~be involved~~alter an existing one allowing us to gain adoption and reach scale faster. With this focus, Cryptyde first entered the music streaming industry with ~~every step~~its launch of E-NFT.com; a streaming music NFT platform. With platform success Cryptyde has expanded into the ~~consumer product life cycle~~crypto mining ecosystem, leveraging its knowledge of blockchain technologies with the goal of bringing bitcoin mining to a price point for the everyday consumer.

Ferguson Containers – ~~from ideation, to research~~Ferguson Containers, Inc. (“Ferguson”) manufactures and development, manufacturing, sales, packaging and fulfillment. The Company also seeks to raise awareness of the Vinco Ventures brand name as a diversified consumer products business through a number of media channels.

The first stage of development for any consumer product is the impetus to turn an idea into a salable commodity. Considered to be the “go-to” resource for independent innovators with great consumer product invention ideas, Vinco Ventures through its Edison Nation web portal maintains a consumer-facing online presence whereby innovators can submit ideas for consideration by us. If an idea is successfully chosen, Vinco Ventures will apply its proprietary, web-enabled new product development (“NPD”) and commercialization platform that can take a product from idea through final e-commerce sale. Vinco Ventures presently engages with over 180,000 registered online innovators and entrepreneurs interested in accessing the Company’s NPD platform to bring innovative, new products to market focusing on high-interest, high-velocity consumer categories. The Company generates revenue from its web presence by charging a fee for each idea submission, and also through subscription-based plans for innovators that wish to submit high volumes of ideas.

Since its inception, the Edison Nation web portal has received over 200,000 idea submissions, with products selling in excess of $250 million at retail through the management of over 300 client product campaigns with distribution across diverse channels including e-commerce, mass merchandisers, specialty product chains, entertainment venues, national drug chains, and tele-shopping. These clients include many of the largest manufacturers and retailers in the world including Amazon, Bed Bath and Beyond, HSN, Rite Aid, P&G, and Black & Decker. The Company generates revenue from licensing agreements with such manufacturers and retailers. Such agreements are entered into when innovators submit their ideas through Vinco Ventures’ web portal. Occasionally, the Company also generates revenue from innovators that wish to use the Company’s product development resources, but license or distribute products themselves.

Vinco Ventures has a number of internally developed brands (“EN Brands”) which act as a launchpad for new innovative items that have matriculated through the innovation portal. These EN Brands include Cloud B, Pirasta, Uber Mom, Lily and Grey, Trillion Trees, and Barkley Lane. Additionally, the Company offers a partnership model for entrepreneurs and businesses that are seeking to elevate their existing brands. Recent partnerships for Vinco Ventures include 4Keeps Roses and Mother K. Within the partnership model, the Company seeks to identify new lines of distribution and provide innovation through development of new item that enhance the brands overall image and consumer adoption.

Once most consumer products are ideated, developed, manufactured, and possibly even licensed, they must be packaged and distributed. Currently, we maintain a logistics center in Clearwater, Florida. The Company generates revenue from the sale ofsells custom packaging for ~~many of~~virtually any product. In Ferguson’s experience, packaging has the capability to “tell” the products ~~that have~~story, generating increased product awareness, promote brand image, and drive unit growth. Ferguson’s senior management has more than 100 years of combined experience marketing, producing and delivering packaging materials. A hallmark of its operation is its quick production cycle. Ferguson can often begin a production run ~~through our NPD or in-house~~within minutes of receipt of an order. Many of Ferguson’s products are manufactured from 100% post-consumer recycled material. When production is complete, Ferguson typically ships the product ~~development process. The Company also sells packaging products to~~using its own trucks rather than relying on a ~~number of other entities that are not related to the Company’s product development process, including pharmaceutical and e-commerce companies. For packaging products, the Company~~common carrier. Ferguson does not have long-term agreements with its customers, and instead manufactures and sells its packaging products subject to purchase orders from its customers. No assurances can be given that Ferguson’s customers will continue to submit purchase orders for new products.

Edison Nation – Edison Nation, LLC matches an innovator’s intellectual property with vertical product category leaders in a licensing structure whereby the innovator can earn up to 50% of the contracted licensing fee. Product categories include kitchenware, small appliances, toys, pet care, baby products, health & beauty aids, entertainment venue merchandise, and housewares.

Once a product is ready for distribution, consumer awareness must be raised in order to sell the product. Accordingly, the Company has begun to pursue a media strategy. First, the Company is seeking to re-release episodes of the ‘Everyday Edisons’ television program, while simultaneously seeking a distribution partner for forthcoming episodes. The Company intends to generate revenue from the Everyday Edisons brand by entering into a contract with a broadcast network or online streaming service. The Company is seeking to expand its web presence by acquiring or creating other innovator-facing internet media properties. The Company intends to generate revenue from such internet media through the display of paid advertisements on its properties.

Today’s consumers have shorter attention spans and are unlikely to commit to lengthy content unless they are convinced of its value. The ~~process~~right piece of short-form content enables brands to rapidly communicate key messages, improving the asset’s ability to capture the attention of target audiences. Short-form content is also a ready-made resource for ~~developing~~users who consume content on mobile devices. Additionally, video generates a much larger number of shares than long-form content, text or image posts. By investing in Lomotif, a short-form video platform and ~~launching consumer products has changed significantly in recent years. Previously, Fortune 500~~related growth initiatives and ~~other companies maintained multimillion-dollar research and development divisions~~continuing to develop and launch products to be sold primarily on retail shelves and supported by large television and print advertising investment. The emergence of e-commerce giants, including Amazon.com, has caused retail shelf space to no longer be a requirement to launch a new product. Crowdfunding sites like Kickstarter enable solo entrepreneurs to inexpensively produce an advertising video and quickly introduce a new product to millions of potential customers, and to quickly gain those customers for a low cost of acquisition relative to the cost and time required in prior years as expensive traditional advertising investment is no longer required to gain market awareness. For example, according to Statista.com, crowdfunded sales of products will exceed $18.9 billion in 2021. The consumer shift away from brick and mortar retailers toward e-commerce has resulted in the bankruptcy or downsizing of many iconic retailers which sold toys, including Toys R Us, Sears, Kmart, and K-B Toys, with the resultant loss in shelf space and available locations helping to driveleverage our ~~market opportunity. By utilizing the opportunities to market products over the internet, rather than through traditional, commercial channels,~~B.I.G. (Buy. Innovate. Grow.) strategy, we believe we can ~~reach~~grow into a ~~much broader market for~~robust and disruptive media and entertainment company worldwide, with tens of millions of users around the world that we expect will enable us to leverage our ~~brands~~content globally. Our ability to successfully implement our business plans including acquisition plans and ~~products.~~

~~The Company believes that its anticipated~~achieving our growth strategy will ~~be driven by six macroeconomic factors:~~

In addition, we intend to acquire more small brands that have achieved approximately $1 million in retail sales over the trailing twelve-month period with a track record of generating free cash flow. By leveraging our expertise in helping companies launch thousands of new products anddepend upon our ability to obtain financing at acceptable terms, attain a reasonable threshold of operating efficiencies and create ~~unique, customized packaging,~~and expand revenue sources from the businesses, platforms and technologies we ~~will seek~~acquired and invested in.

On November 8, 2021, our subsidiary Cryptyde, Inc. (“Cryptyde”) filed a Form 10 registration statement with the Securities and Exchange Commission in connection with our previously announced planned spin-off of Cryptyde. Cryptyde is focused on leveraging blockchain technology to ~~elevate the value~~disrupt consumer facing industries. Current operations of ~~these acquired brands by improving each part~~Cryptyde include E-NFT.com, a streaming music NFT Platform, and CW Machines LLC, a crypto mining ecosystem which seeks to leverage Cryptyde’s knowledge of ~~their launch process, based on our own marketing methodologies.~~

~~We believe our acquisition strategy will allow us~~blockchain technologies to ~~acquire small brands using~~bring bitcoin mining to a ~~combination of shares of our common stock, cash and other consideration, such as earn-outs. We intend to use our acquisition strategy in order to acquire up to ten or more small brands per year~~price point for the ~~next three years.~~everyday consumer. Cryptyde will also include our Ferguson Containers business. In ~~situations where we deem that a brand~~connection with the spin-off, Cryptyde is ~~not a “fit” for~~expected to become an independent, publicly traded company. The spin-off is expected to become effective in early 2022.

On July 25, 2021, ZVV completed the acquisition ~~or partnership, we may provide the brand with certain manufacturing or consulting services that will assist the brand to achieve its goals.~~

~~On November 30, 2020, the Company and its wholly owned subsidiary, SRM Entertainment, LTD entered into a Stock Exchange Agreement with Jupiter Wellness, Inc. (“Jupiter”). Under the terms~~of 80% of the ~~Exchange Agreement, Jupiter agreed to~~outstanding capital stock on a fully diluted basis of Lomotif for a total purchase ~~all outstanding shares~~price of common stock (the “Exchange Shares”) issued by SRM from the Company. As consideration for the purchase of the Exchange Shares, Jupiter issued the Company 200,000 shares of its restricted common stock, symbol JUPW as listed on NASDAQ Capital Markets. The Company made the decision to divest the amusement park business due to the slow re-openings of amusement parks around the world and the investment that would have been needed to remain open and the investment required to relaunch as the amusement parks begin to get back to full capacity. Please ~~see~~~~Note 15 — Discontinued Operations~~ ~~for further information.~~$109,765,000.

~~During 2020, the Company had three distinct business units, which allows the Company to focus~~COVID-19 and Impact on ~~growing sales and leveraging operations. The units consist of:~~

● ~~Innovate~~. The Vinco Ventures New Product Development (“NPD”) platform helps inventors go from idea to reality. This is accomplished by optimizing the Company’s new product election process through deeper analytics to predict success on platforms like crowdfunding and web marketplaces like Amazon. The Company drives brand awareness of the platform by producing content for inventors and innovators on media platforms including our own Everyday Edison’s television show.

● ~~Build and Launch~~. Distributed by geography, industry skillset and expertise in the development process to ensure efficient product build and launch our teams of product designers and developers take the product from the concept to the consumers’ hand. The bulk of the Company’s operations are part of this business unit, and the Company will continue to develop this unit to meet the needs of our product launch schedule.

● ~~Sell~~. Our omni-channel sales effort is divided into three groups: (1) business-to-business revenue opportunities including traditional brick and mortar retailers, (2) online marketplaces and direct-to-consumer revenue opportunities, and (3) our NiTRO Team (Near Term Revenue Opportunities). NiTRO, identifies brands and products lines that would benefit from being part of Vinco Ventures.

In November 2020, in connection with the name change and startup of Honey Badger, the Company set a path for new key fundamentals in their strategy. Vinco Ventures, Inc. plans to leverage the new market opportunity by utilizing their B.I.G. Strategy: Buy. Innovate. Grow.

● ~~Buy.~~ ~~Acquisitions is our model. We will seek to acquire significant brands to continue to add to the Portfolio.~~

● ~~Innovate.~~ – Leverage the internal traffic platforms of Honey Badger, our brands are able to quickly innovate and determine the highest conversion traffic and target accordingly. Once identified, we scale while maintaining conversions for success.

● ~~Grow.~~ ~~More targeted traffic equals more conversions. With our internal engines, we are able to expedite growth of our acquired brands to reach their target numbers quicker.~~

~~Innovate: The Vinco Ventures New Product Development & Commercialization Platform~~

New product ideas have little value without the ability and skill required to commercialize them. The considerable investment and executional “know how” needed to initiate a process – from idea to product distribution – has always been a challenge for the individual innovator. Vinco Ventures’ web presence is designed to take advantage of online marketplace and crowdfunding momentum for our future growth mitigating new product development risk while allowing for optimized product monetization based on a product’s likelihood to succeed. To that end, Vinco Ventures empowers and enables innovators and entrepreneurs to develop and launch products, gain consumer adoption and achieve commercial scale efficiently at little to no cost.

The cornerstone of Vinco Ventures’ competitive advantage is its NPD platform, which is designed to optimize product licensing and commercialization through best-in-class digital technologies, sourcing / manufacturing expertise and one of the largest sets of go-to-market solutions. The NPD platform can take a product from idea through ecommerce final sale in a matter of months versus a year or more for capital intensive and inefficient new product development protocols traditionally used by legacy manufacturers serving “big box” retailers.

Interested innovators enter the Vinco Ventures web site to register for a free account by providing their name and email address. The member then creates a username and password to use on the site. Once registered, the member is provided with their own unique, password protected dashboard by which they can begin submitting ideas and join online member forums to learn about industry trends, common questions, engage in member chats, and stay informed of the latest happenings at Vinco Ventures. They can also track the review progress of ideas they submit through their dashboard.

Vinco Ventures accepts ideas through a secure online submission process. Once a member explores the active searches in different product categories being run on the platform for potential licensees seeking new product ideas to be commercialized, the member can submit their new product ideas for processing. Vinco Ventures regularly works with different companies and retailers in various product categories to help them find new product ideas.

~~Registered members pay $25 to submit an idea. This submission fee covers a portion of the cost to review each idea submitted to the platform. There are no additional fees after the submission fee.~~

~~Although the platform might not have an active search that matches the innovator’s idea, the Vinco Ventures licensing team hosts an ongoing search for new consumer product ideas in all categories.~~

“Insider Membership” is Vinco Ventures’ premium level of membership. Members that are insiders (“Insiders”) receive feedback on all their ideas submitted and gain access to online features that aren’t available to registered members. In addition, Insiders pay $20 for each idea submitted (20% discount vs. a registered member), can opt-in ideas for free, as well as receive other benefits. An annual membership costs $99, or $9.25 / month automatically debited from a credit card each month. Also included online is feedback to the innovator on the status of each stage of the process and notification when ideas are not selected to move forward during any stage in the review process.

Insiders also have access to the Insider Licensing Program (the “ILP”). The primary benefit of the ILP is having the Vinco Ventures licensing team working directly on an innovator’s behalf to help secure a licensing agreement with one of the company’s manufacturing partners. If an idea is selected for commercialization by a retail partner, Vinco Ventures will invest in any necessary patent applications, filings and maintenance. The innovator’s name is included on any patent or patent application that Vinco Ventures files on the member’s behalf after the idea has been selected.

~~In addition to the above member programs, Vinco Ventures ASOTV (~~~~“As Seen on TV”~~~~) Team hosts a search for new products suitable for marketing via DRTV (~~~~“Direct Response TV”~~~~) and subsequent distribution in national retail chains including mass merchandisers, specialty retail, drug chains and department stores.~~

Led by the Company’s licensing team (which has over 150 years of combined experience in a variety of industries and product categories), all ideas submitted by innovators through the Company’s website are reviewed and assessed through an 8-stage process. Vinco Ventures’ product idea review process is confidential with non-disclosure agreements executed with every participating registered or “Insider” member.

The NPD platform’s database of over 85,000 product ideas helps determine which inventions have a substantial market opportunity quickly through proprietary algorithms that have been developed incorporating continuous learning from marketplace experience and changes in category requirements.

Selected ideas are assessed by the licensing team based on nine key factors: competing products, uniqueness, retail pricing, liability & safety, marketability, manufacturing cost, patentability, consumer relevant features and benefits, and commercialization.

The time required to review ideas depends upon different variables, such as: the number of searches concurrently running on Vinco Ventures platform, idea volume and complexity of the search, how many presentation dates to licensees are pending, the date an idea is submitted.

Presentation dates to potential licensees are usually set a few weeks following the close of the search. After the presentation has been given to a licensing / retail partner, the partner has 45 days to 6 months to select ideas on which they will move forward.

Due to the public nature of licensing, Vinco Ventures only accepts ideas from Insiders that are patented or patent-pending. A valid provisional patent application is required. The cost of submitting an idea to the ILP is $100, and a member must be an “Insider” to be considered.

The Vinco Ventures ASOTV new product development process follows a six-stage protocol appropriate for the broadcast-based sales channel. For more information regarding the ASOTV process, the Vinco Ventures NPD platform, its features and member benefits, visit ~~https://app.edisonnation.com/faq~~.

~~Once an innovator’s idea is judged to be a potentially viable, commercial product and selected for potential commercialization, the Company acquires intellectual property rights from the innovator.~~

Once an innovator’s intellectual property is secured, the innovator’s product idea can then either be licensed to a manufacturer or retailer or developed and marketed directly by Vinco Ventures. In either case, Vinco Ventures serves as the point-of-contact with the innovator for term sheets, royalty negotiation and concluding licensing agreements. Vinco Ventures also maintains contact with the innovator to keep them engaged during product development.

In general, innovators are paid a percentage of the Company’s revenue from the commercialization of the innovator’s intellectual property. This percentage varies with the Company’s investment in the development of the intellectual property, including whether the Company decides to license the innovator’s idea for commercialization or instead, to directly develop and market the innovator’s idea.

With product design, product prototyping and creation of marketing assets all resourced with expert Vinco Ventures in-house capabilities, we have made protracted, high-cost, high-risk research and development models obsolete.

Vinco Ventures custom designs most products in-house for specific customers and their needs. We utilize our existing tooling to produce samples and prototypes for customer reviews, refinement and approval, as well as our in-house packaging design and fabrication resources.

The Company’s design and product development professionals are dedicated to the commercialization and marketability of new product concepts advanced through the company’s NPD platform and for licensors / partners like Disney World and Universal Studios.

No matter the product, Vinco Ventures’ objective is to optimize its marketability, function, value and appearance for the benefit of the consumer end user. From concept and prototyping, through design-for-manufacture, special attention is paid to a product’s utility, ease of use, lowest cost bill of materials, and how it “communicates” its features and benefits through design.

The combined experience and expertise of the Company’s team spans many high-demand categories including household items, small appliances, kitchenware, and toys. The Company’s in-house capabilities are complimented by third-party engineering and prototyping contractors, and category-specific expert resources within select manufacturers.

To provide greater flexibility in the manufacturing and delivery of products, and as part of a continuing effort to reduce manufacturing costs, Vinco Ventures has concentrated production of most of the Company’s products in third-party manufacturers located in China and Hong Kong. The Company maintains a fully staffed Hong Kong office for sourcing, overseeing manufacturing and quality assurance.

Vinco Ventures utilizes a variety of contracted manufacturing facilities to supply a majority of its products. The Company continues to explore more efficient and expert manufacturing partners to gain greater economies of scale, potential consolidation, and cost savings on an on-going basis.

Consumer Products ~~are also purchased from unrelated enterprises with specific expertise in the design, development, and manufacture those specialty products.~~

We base our production schedules on customer orders and forecasts, considering historical trends, results of market research, and current market information. Actual shipments of ordered products and order cancellation rates are affected by consumer acceptance of product lines, strength of competing products, marketing strategies of retailers, changes in buying patterns of both retailers and consumers, and overall economic conditions. Unexpected changes in these factors could result in a lack of product availability or excess inventory in a product line.

~~Most of our raw materials are available from numerous suppliers but may be subject to fluctuations in price.~~

Vinco Ventures partners with many of the biggest and most well-known online entities, consumer products companies and retailers. They use the Company’s platform as a “think engine” to develop targeted products, significantly reduce research and development expense, and expedite time to market.

Each potential licensee of an innovator’s idea publishes an exclusive page on the Vinco Ventures web site with innovation goals and timeline for their search. Appropriate new product ideas are submitted in 100% confidence with all intellectual property safely guarded.

~~Once the search concludes, Vinco Ventures presents each potential licensee with the best patent protected, or patentable ideas that can be selected for development.~~

Licensing partners and customers include Amazon, Bed, Bath & Beyond, Church & Dwight, Black & Decker, HSN, Worthington Industries, Pampered Chef, Boston America Corp., Walmart, Target, PetSmart, “As Seen on TV,” Sunbeam, Home Depot, and Apothecary Products.

Vinco Ventures has established a commercialization path to include the development and management of crowdfunding campaigns. This is evolving to be a engine for future growth. The benefits of crowdfunding include increased product testing efficiency, decreased financial risk, and the ability to get closer to the end consumer, simultaneously.

The ability for consumers to re-order product not only gauges marketplace demand, but it can also be leveraged as a quantitative “proof point” for potential sales to licensees. Most importantly, the money pledged for orders can be used to finance manufacturing and ecommerce launch marketing costs as negative working capital.

Our Omni-channel sales effort is divided into three groups: (1) business-to-business revenue opportunities including traditional brick and mortar retailers, (2) online marketplaces and direct-to-consumer revenue opportunities, and (3) our NiTRO Team (Near Term Revenue Opportunities). NiTRO, identifies brands and products lines that would benefit from being part of Vinco Ventures.

Vinco Ventures’ business to business team sells products through a diverse network of manufacturers, distributors and retailers. New customer prospects are gained through outbound sales calls, trade show participation, web searches, referrals from existing customers.

The online team for the company has expertise in selling products on platforms such as the Amazon marketplace as well as portals like Walmart.com and “crowd-funded” websites such as Kickstarter and Indiegogo.

The NiTRO team identifies small, unique brands that could benefit from becoming part of a larger consumer products organization with more resources. The team seeks to negotiate a mutually beneficial agreement whereby the respective branded products become part of Vinco Ventures’ portfolio of consumer products.

In order to expand the Company’s universe of registered innovators and entrepreneurs submitting ideas on the Vinco Ventures NPD web platform, the Company has entered a global agreement for distribution of two existing 13-episode seasons of the Company’s Everyday Edison TV series with a leading digital media service company. The series will be available in its original English version as well as voiceover adaptations in German, French, and Spanish. Distribution is planned for Europe and the Middle East through digital content providers such as Amazon Prime Video.

The process for developing and launching consumer products has changed significantly in recent years. Previously, Fortune 500 and specialty consumer product companies funded multimillion-dollar NPD divisions to develop and launch products. These products were sold primarily on “big box” retail shelves supported by large marketing investments.

The emergence of ecommerce giants, including Amazon and Walmart.com, has disrupted traditional NPD and commercialization paths and has accelerated a consumer shift away from “brick and mortar” retailers. The result has been the bankruptcy or downsizing of many iconic retailers, including Toys R Us, JC Penney, Macy’s, Sears, Kmart, Office Depot, Family Dollar, and K-B Toys, with a commensurate loss of shelf space and accessible locations.

Moreover, crowdfunding sites, like Kickstarter and Indiegogo, have also disrupted NPD process cycles and are now “mainstream.” In fact, as of October 2018, Kickstarter’s cumulative pledged funding exceeded $3.9 billion according to Kickstarter published data. Statista.com estimates that crowdfunded sales of products will exceed $18.9 billion by 2021.

These crowdfunding sites have enabled individual innovators and entrepreneurs to design, prototype and market unique products to millions of potential customers with significantly lower acquisition costs when compared to the capital and time required by legacy NPD processes.

COVID-19 has caused and continues to cause significant loss of life and disruption to the global economy, including the curtailment of activities by businesses and consumers in much of the world as governments and others seek to limit the spread of the disease, and through business and transportation shutdowns and restrictions on people’s movement and congregation.

As a result of the pandemic, we have experienced, and continue to experience, weakened demand for our ~~traditional~~historical products. Many of our customers have been unable to sell our products in their stores due to government-mandated closures and have deferred or significantly reduced orders for our products. We expect these trends to continue until such closures are significantly curtailed or lifted. In addition, the pandemic has reduced foot traffic in the stores where our products are sold that remain open, and the global economic impact of the pandemic has temporarily reduced consumer demand for our products as they focus on purchasing essential goods.

In the United States and Asia, many of our key accounts remain closed or are operating at significantly reduced volumes. As a result, we have made the strategic decision to expand our operations through our Edison Nation Medical (“Ed Med”) division. Through Ed Med, the Company wholesales Personal Protective Equipment (“PPE”) products through an online portal for hospitals, government agencies and distributors.

Given these factors, the Company anticipates that the greatest impact from the COVID-19 pandemic in fiscal 2020 occurred in the first quarter of 2020 resulting in a significant net sales decline as compared to the first quarter of 2019.

In addition, certain of our suppliers and the manufacturers of certain of our products were adversely impacted by COVID-19. As a result, we faced delays or difficulty sourcing products, which negatively affected our business and financial results. Even if we are able to find alternate sources for such products, they may cost more and cause delays in our supply chain, which could adversely impact our profitability and financial condition.

We have taken actions to protect our employees in response to the pandemic, including closing our corporate offices and requiring our office employees to work from home. At our distribution centers, certain practices are in effect to safeguard workers, including a staggered work schedule, and we are continuing to monitor direction from local and national governments carefully. Additionally, our two retail locations have been closed until further notice.

As a result of the impact of COVID-19 on our financial results, and the anticipated future impact of the pandemic, we implemented cost control measures and cash management actions during 2020, including:

● Furloughing a significant portion of our employees in the first quarter of 2020;

● Implementing 20% salary reductions across our executive team and other members of upper-level management in the first and second quarter of 2020;

● Executing reductions in operating expenses, planned inventory levels and non-product development capital expenditures throughout 2020; and

● Proactively managing working capital, including reducing incoming inventory to align with anticipated sales.

In terms of the Company’s consumer products business, competition is intensifying due to trends towards shorter life cycles for the development, production and marketability of consumer products. Competition is also intensifying due to the availability of online-only distributors, including Amazon.com, which can promote a wide variety of consumer products and represent a wide variety of manufacturers at low cost and limited overhead.

Vinco Ventures’ competitive set includes other online inventor platforms (e.g., InventHelp, Quirky, Mako Design + Invent, Davison, and Invention City). Each of these companies operate different types of business models that combine different consulting, development and service fees, and royalty structures.

Vinco Ventures was originally founded by the creators of the Emmy Award winning PBS television show, Everyday Edisons. One of the original founders, Louis Freeman, is currently a member of the Vinco Ventures board of directors. The Company’s model differs significantly from others in the inventor space in that it assumes the considerable financial risk, manpower and time required to monetize a product, from concept selection through sale. A portion of the commercialized product’s net profit is shared with the inventor through a variety of forms of licensing agreements.

The Company also competes with large manufacturing companies who develop and commercialize their own products in categories in which Vinco Ventures currently participates. However, we also are increasing the Company’s “co-op-etition” footprint with companies, like Black & Decker, who not only compete in product development but also have become active “cooperative” participants on the Vinco Ventures online innovation platform.

We sell our products to a diverse network of customers. Domestically, we sell our products to specialty retailers, mass-market retailers and e-commerce sites. Internationally, we sell our products directly to similar retailers and distributors.

One customer represented 11% and 11% of our revenues for the three months ended June 30, 2021 and 2020, respectively. No customers represented more than 10% for the six months ended June 30, 2021 and 2020, respectively.

We believe that Vinco Ventures’ intellectual property rights have significant value in the marketplace, and that in order to maintain a competitive advantage in the marketplace, that we must continue to develop and maintain the proprietary aspects of our technologies. We rely on a combination of patent, trademark, trade secret, copyright and other intellectual property rights and measures to protect our intellectual property.

We seek protection on our products in as many countries as practical, through registered trademarks, copyrights and patents to the extent that such protection is available, cost effective and valuable to our products and brands. We also rely on other forms of intellectual property rights and measures, including trade secrets and nondisclosure agreements, to maintain and protect proprietary aspects of our products and technologies. We require our employees and consultants to execute confidentiality agreements in connection with their employment or consulting relationships with us. We also require our employees and consultants to disclose and assign to us all inventions conceived during the term of their employment or engagement which relate to our business.

Although we believe we are sufficiently protected, the failure to obtain or the loss of some of these intellectual property rights could have an adverse effect on our business, financial condition and results of operations.

~~The consumer products business is highly seasonal with consumers making a large percentage of purchases during the traditional holiday season.~~

These seasonal purchasing patterns and requisite production lead times create risk to our business associated with the underproduction of popular consumer products and the overproduction of less popular consumer products that do not match consumer demand.

These factors increase the risk that the Company may not be able to meet demand for certain products at peak demand times or that our own inventory levels may be adversely impacted by the need to pre-build products before orders are placed. Additionally, as retailers manage their inventories, we may experience cyclical ordering patterns for products and product lines that may cause our sales to vary significantly from period to period.

E-commerce has partially reduced traditional seasonality to moderate seasonality. We intend to expand this flattening of traditional seasonality from e-commerce channels to our business as well, including through the continued emergence of crowd-funded “micro brands” that we believe will further delink demand for our products and services from historical demand fluctuation.

Our products sold in the United States are subject to the provisions of the Consumer Product Safety Act, as amended by the Consumer Product Safety Improvement Act of 2008, the Federal Hazardous Substances Act, and the Consumer Product Safety Improvement Act of 2008, and may also be subject to the requirements of the Flammable Fabrics Act or the Food, Drug, and Cosmetics Act and the regulations promulgated pursuant to such statutes. These statutes and the related regulations ban from the market consumer products that fail to comply with applicable product safety laws, regulations, and standards. The Consumer Product Safety Commission may require the recall, repurchase, replacement, or repair of any such banned products or products that otherwise create a substantial risk of injury and may seek penalties for regulatory noncompliance under certain circumstances. Similar laws exist in some states. We believe that we are in substantial compliance with these laws and regulations. Our products sold worldwide are subject to the provisions of similar laws and regulations in many jurisdictions, including the European Union and Canada. We believe that we are in substantial compliance with these laws and regulations.

We maintain a quality control program to help ensure compliance with applicable product safety requirements. Nonetheless, we may in the future experience, issues in products that result in recalls, withdrawals, or replacements of products. A product recall could have a material adverse effect on our results of operations and financial condition, depending on the product affected by the recall and the extent of the recall efforts required.

Our advertising is subject to the Federal Trade Commission Act, The Children’s Television Act of 1990, the rules and regulations promulgated by the Federal Trade Commission, and the Federal Communications Commission, as well as laws of certain countries that regulate advertising and advertising to children. In addition, our web-based products and services and other online and digital communications activity are or may be subject to US and foreign privacy-related regulations, including the US Children’s Online Privacy Protection Act of 1998 and the EU Data Protection Directive (Directive 95/46/EC) and related national regulations. We believe that we are in substantial compliance with these laws and regulations.

Our worldwide operations are subject to the requirements of various environmental laws and regulations in the jurisdictions where those operations are located. We believe that we are in substantial compliance with these laws and regulations. Our operations are from time to time the subject of investigations, conferences, discussions, and negotiations with various federal, state and local environmental agencies within and outside the United States with respect to the discharge or cleanup of hazardous waste. We are not aware of any material cleanup liabilities.

Furthermore, we are subject to various other federal, state, local and international laws and regulations applicable to its business. We believe that we are in substantial compliance with these laws and regulations.

~~Factors Which May Influence Future Results of Operations~~Recent Developments

The following is a description of ~~factors which may influence~~recent events regarding our ~~future results of operations,~~warrant liabilities, important transactions and management transition, which we believe are important to an understanding of our business, financial position and results of operations.

On January 25, 2021, the Company consummated the closing of a private placement offering (the “Offering”) whereby pursuant to the Securities Purchase Agreement (the “Purchase Agreement”) entered into by the Company on January 21, 2021 with Hudson Bay Master Fund, Ltd (the “Investor”), the Company issued a Senior Convertible Note for the purchase price of $12,000,000 (the “Note”) and a five (5) year warrant (the “Warrant”) to purchase shares of the Company’s common stock, par value $0.001 per share (“Common Stock”). The Investor converted $11,000,000 of principal and $39,190 of interest into 5,519,595 of the Company’s common shares. Pursuant to the Purchase Agreement, the Investor received a Warrant in an amount equal to 250% of the shares of Common Stock initially issuable to each Investor pursuant to the Investor’s Note. The Warrant contains an exercise price of $2.00 per share. In connection with the closing of the Offering, the Warrant was issued to purchase an aggregate of 15,000,000 shares of Common Stock (the “Warrant Shares”).

On February 23, 2021, the Company consummated the closing of a private placement offering (the “Offering”) whereby pursuant to the Securities Purchase Agreement (the “Purchase Agreement”) entered into by the Company on February 18, 2021 with one accredited investor (the “Investor”), the Company issued a Senior Convertible Note for the purchase price of $10,000,000 (the “Note”) and five (5) year warrants (the “Warrant”) to purchase shares of ~~the Company’s common stock, par value $0.001 per share (“~~Common ~~Stock”).~~Stock. Pursuant to the Purchase Agreement, the Investor received a Warrant in an amount equal to 900% of the shares of Common Stock initially issuable to the Investor pursuant to the conversion terms of the Investor’s Note. The Warrant contains an exercise price of $3.722 per share, subject to adjustments as provided under the terms of the Warrant. In connection with the closing of the Offering, the Warrant was exercisable for an aggregate of 18,568,188 shares of Common Stock (the “Warrant Shares”).

Palladium Capital Group, LLC. acted as placement agent for both Offerings. The Placement Agent received a Warrant granting the Holder the right to purchase 480,000 and 1,650,346 shares, respectively, of ~~the Company’s common stock~~Common Stock at an exercise price of $2.00 and $3.722, respectively, with an expiration date of January 25, 2026 and February 23, 2026, respectively.

On January 29, 2021, the Company consummated the closing of a private placement offering of $3,300,000 whereby pursuant to the Securities Purchase Agreement entered into by the Company on January 28, 2021 with BHP Capital NY Inc, the Company issued 1,500,000 shares of restricted common stock and a five (5) year warrant to purchase 1,500,000 shares of the ~~Company’s common stock.~~Common Stock.

On May 24, 2021, the Company entered into a warrant exercise agreement (the “May 2021 Warrant Agreement”) with the Investor whereby the Company agreed to issue additional warrants, to purchase shares of Common Stock at a per-share exercise price equal to $3.20 (the “Incentive Warrants”). Subject to the terms of May 2021 Agreement, the Company shall issue and deliver Incentive Warrants to the Investor to initially purchase zero shares of Common Stock, which number of shares shall be subject to adjustment, including the provision of Incentive Warrants on a 1.00-for-one basis for the additional exercise of each Existing Warrant.

On June 4, 2021, the Company entered into a warrant exercise agreement (the “June 2021 Warrant Agreement”) with the Investor whereby the Company agreed to issue additional warrants, to purchase shares of Common Stock at a per-share exercise price equal to $3.30 (the “Incentive Warrants”). Subject to the terms of June 2021 Agreement, the Company shall issue and deliver Incentive Warrants to the Investor to initially purchase zero shares of Common Stock, which number of shares shall be subject to adjustment, including the provision of Incentive Warrants on a 1.75-for-one basis for the additional exercise of each Existing Warrant.

The warrants are subject to anti-dilution adjustments outlined in the Agreement. The warrants may require cash settlement under certain conditions, such as a tender offer. The warrants were classified as a liability with an initial fair value at the time of issuance of $228,575,715 of which $208,855,715 was immediately expensed as a loss on issuance of warrants and $19,720,000 was recorded as a deferred debt discount.

In addition, the warrants must be valued every reporting period and adjusted to market with the increase or decrease being adjusted through earnings. As of ~~June~~September 30, 2021, the fair value of the warrant liability was $139,695,115. For the three and ~~six~~nine months ended ~~June~~September 30, 2021, the Company recorded a loss of $208,855,715 and $75,156,534, respectively. The warrants are valued using the Black-Scholes pricing model to calculate the fair value of the warrants.

The Note shall carry no interest unless and until an event of default shall occur and the Note matures on July 22, 2022. The Note contains a voluntary conversion mechanism whereby the Noteholder may convert at any time after the Initial Convertibility Date (as defined therein), in whole or in part, the outstanding principal and interest under the Note into shares of the Common Stock at a conversion price of $4.00 per share (the “Conversion Shares”). The Note is guaranteed by the Company’s subsidiaries and certain other guarantors and is a senior secured obligation of the Company and its subsidiaries. The Note contains customary events of default (each an “Event of Default”). If an Event of Default occurs, interest under the Note will accrue at a rate of eighteen percent (18%) per annum and the outstanding principal amount of the Note, plus accrued but unpaid interest, liquidated damages and other amounts owing with respect to the Note will become, at the Note holder’s election, immediately due and payable in cash. Upon completion of a Change of Control (as defined in the Note), the Note’s holder may require the Company to purchase any outstanding portion of the Note in cash at a price in accordance with the terms of the Note.

Pursuant to the Purchase Agreement, the Investor received a Warrant. The Warrant contains an exercise price of $4.00 per share, subject to adjustments as provided under the terms of the Warrant. In connection with the closing of the Offering, the Warrant was issued for an aggregate of 32,697,548 shares of Common Stock (the “Warrant Shares”).

Palladium Capital Group, LLC. (the “Placement Agent”) acted as placement agent for the Offering. The Placement Agent received cash compensation of $1,000,000 plus a Note of $8,000,000 which is deferred and only due upon the closing of the merger (8% of the gross proceeds to the Company plus an additional 1% of the gross proceeds to the Company for non-accountable expenses).

On August 18, 2021, the Company entered into a warrant exercise agreement (the “Agreement”) with Hudson Bay Master Fund Ltd (the “Investor”)whereby the Parties agreed that, subject to the satisfaction (or waiver) of the conditions set forth in Sections 4 and 5 of the Agreement: (i) the Investor shall pay to the Company an amount equal to the Exercise Price (as defined in the Existing Warrants) in effect as of the date of such exercise multiplied by the Existing Warrant Shares (as defined in the Agreement); (ii) the Company shall issue and deliver to the Investor the Existing Warrant Shares as set forth in Section 1 of the Existing Warrants; (iii) the Company shall issue and deliver to the Investor additional warrants to purchase an aggregate of 20,500,000 shares of Common Stock at an exercise price of $2.655 per share, subject to adjustments provided therein (the “August Series A Warrants”); and (iv) the Company shall issue and deliver to the Investor additional warrants to purchase an aggregate of 2,000,000 shares of Common Stock at an exercise price of $2.655 per share, subject to adjustments provided therein (the “August Series B Warrants,” and together with the August Series A Warrants, the “August Warrants”). The terms of the August Series A Warrants and the August Series B Warrants are substantially identical, except that, upon stockholder approval, the August Series B Warrants will be subject to an Alternate Cashless Exercise, as defined therein.

In addition, pursuant to the Agreement, the Parties also agreed, among other things, that (i) upon entering into the Agreement, the exercise price of the July Warrants is reduced to $2.655 per share; and (ii) the definition of “Initial Exercisability Date” (as defined in the June Incentive Warrant) is amended to mean August 18, 2021. The Parties to the Agreement acknowledge and agree that the transactions contemplated by each of the Agreement and July SPA are and were permitted under each of the currently outstanding warrants and notes issued by the Company to the Investor.

On September 1, 2021, Vinco Ventures, Inc. (the “Company”) entered into a warrant exercise agreement (the “Agreement”) with Hudson Bay Master Fund Ltd (the “Investor”) whereby the parties agreed that, subject to the satisfaction (or waiver) of the conditions set forth in Sections 4 and 5 of the Agreement: (i) the Investor shall exercise warrants that were issued on May 24, 2021 and are currently held by the Investor for 6,900,000 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at the exercise price set on May 24, 2021; (ii) the Company shall issue and deliver to the Investor warrants to purchase an aggregate of 20,000,000 shares of Common Stock at an exercise price of $9.00 per share, subject to adjustments provided therein (the “September Series A Warrants”); and (iii) the Company shall issue and deliver to the Investor warrants to purchase an aggregate of 2,000,000 shares of Common Stock at an exercise price of $9.00 per share, subject to adjustments provided therein (the “September Series B Warrants,” and together with the September Series A Warrants, the “September Warrants”). The terms of the September Series A Warrants and the September Series B Warrants are substantially identical, except that, upon stockholder approval, the September Series B Warrants will be subject to an Alternate Cashless Exercise, as defined therein.

At the Closing (as defined in Section 2(b) of the Agreement), the parties executed and delivered a Registration Rights Agreement (the “Registration Rights Agreement”), pursuant to which the Company agreed to file an initial registration statement with respect to the shares of Common Stock underlying the September Warrants and certain other warrants and convertible notes previously issued by the Company by October 1, 2021.

On September 8, 2021, the Investor entered into a Securities Purchase Agreement (the “SPA”) with Armistice Capital Master Fund Ltd. (the “Buyer”), whereby the Investor sold 5,000,000 of the Series A Warrants to the Buyer. On September 8, 2021, the Investor entered into a Securities Purchase Agreement (the “SPA”) with CVI Investments, Inc. (the “Buyer”), whereby the Investor sold 3,000,000 of the Series A Warrants to the Buyer.

Also see Note 16 – Subsequent Events - in the consolidated financial statements included in this report.

On April 17, 2021, the Company and EVNT Platform, LLC, a wholly owned subsidiary of the Company, entered into (and closed on) a certain Asset Contribution Agreement (“Asset Contribution Agreement”) with Emmersive Entertainment, Inc., pursuant to which Emmersive contributed/transferred to the Company the assets used for Emmersive’s business, which include digital assets, software and certain physical assets in consideration for, among other things, the Company assuming certain obligations of Emmersive, hiring certain employees, and issuing 1,000,000 preferred membership units (“Preferred Units”) in the Company to Emmersive and/or its shareholders (“Preferred Members”) pursuant to a First Amended and Restated Operating Agreement for the Company dated as of April 17, 2021). Certain put rights are associated with Preferred Units, which if exercised by the Preferred Members, obligates Vinco to purchase the Preferred Units in exchange for 1,000,000 shares of Vinco Venture’s common stock. In addition, the Preferred Members have the opportunity to earn up to 4,000,000 Conditional Preferred Units if certain conditions are satisfied for each of the four earn out targets. The Earn-Out Targets are described below:

On April 17, 2021, the transactions under both the Asset Contribution Agreement and Amended Operating Agreement closed.

Agreement to Complete a Merger with Zash Global Media and Entertainment Corporation

On January 20, 2021, the Company, and its newly formed wholly owned subsidiary, Vinco Acquisition Corporation (the “Merger Sub”), entered into an Agreement to Complete a Plan of Merger (the “Agreement to Complete”) with ZASH Global Media and Entertainment Corporation (“ZASH”).

The Agreement contemplates a reverse triangular merger of Merger Sub with and into ZASH in a transaction intended to qualify as a tax-free reorganization under Sections 368(a)(l)(A) and 368(a)(2)I of the Code. Under the terms of the Agreement to Complete, ZASH’s holders of common stock, par value $0.001, shall receive shares of Common Stock of the Company in exchange for all issued and outstanding ZASH shares of common stock. ZASH will then become an indirect wholly-owned subsidiary of the Company. In connection with the foregoing, the Company engaged a third-party valuation firm to perform a valuation of ZASH and to issue a Transaction Fairness Opinion. The valuation report will be relied upon to set the resulting post-closing ownership ratio. Upon completion of the closing, ZASH will be the controlling entity.

The certificate of incorporation of the Company will be amended and restated at and as of the Effective Time, in substantial conformance with the certificate of incorporation of ZASH immediately prior to the closing, and the name of the Company will be changed to “ZASH Global Media and Entertainment Corporation.” The bylaws of the Company will be amended and restated at and as of the Closing to become the equivalent of the bylaws of ZASH immediately prior to the closing. At the closing, certain officers and directors of the Company and the Merger Sub immediately prior to the Effective Time shall resign and the officers and directors of ZASH immediately prior to the closing will be appointed as officers and directors of the Company and the surviving corporation, in each case until their respective successors are duly elected or appointed and qualified; provided, however that the Company shall have the right to appoint two (2) person to serve as a member of the Board of Directors of the surviving corporation and ZASH shall have the right to appoint three (3) persons to serve as members of the Board of Directors of the surviving company.

On March 30, 2021, the Company, Vinco Acquisition Corporation and ZASH entered into that certain First Amendment to Agreement to Complete a Plan of Merger, which amends the Merger Agreement dated January 20, 2021 to extend the closing date of the merger to on or about May 28, 2021.

On May 28, 2021, the Company, Vinco Acquisition Corporation and ZASH Global Media and Entertainment Corporation (“ZASH”) entered into that certain Second Amendment to the Agreement (the “Second Amendment”) to define certain milestones with dates to be completed to consummate the closing of the Lomotif Private Limited (“Lomotif”) acquisition and the ZASH merger; (i) the Company and ZASH intend to acquire Lomotif through their joint venture, ZVV Media Partners, LLC (the “Joint Venture”); (ii) the Parties have completed an Amended and Restated Limited Liability Company Agreement for the Joint Venture in preparation for the anticipated acquisition of Lomotif through the Joint Venture; (iii) Gemini Valuation Services will complete and present an independent third-party valuation on ZASH on or before June 11, 2021; (iv) sign the final Agreement and Plan of Merger and Reorganization on or before June 24, 2021; (v) issue a formal proxy to shareholders for the approval of the ZASH merger with the Company on or before July 15, 2021; and (vi) extend the closing date to August 31, 2021, but no later than the first business day following the satisfaction or waiver of all conditions to the obligations of the Parties to consummate the transaction.

On July 19, 2021, Zash Global Media and Entertainment Corp. (“Zash”), Lomotif Private Limited (“Lomotif”), the Lomotif selling shareholders identified on the signature page to the Lomotif SPA and ZVV MEDIA PARTNERS, LLC (“ZVV”), entered into that certain Deed of Variation and Supplement (the “Deed of Variation”) whereby, among other things, Zash novated all of its rights and obligations under the Lomotif SPA to ZVV and ZVV assumed all of Zash’s rights and obligations under the Lomotif SPA as if ZVV had been a party to the Lomotif SPA in place of Zash. On July 23, 2021, ZVV closed on the transaction which resulted in ZVV acquiring an 80% interest in Lomotif.

On January 19, 2021, Vinco Ventures, Inc. (“Vinco Ventures”), ZVV Media Partners, LLC (the “Company”) and Zash Global Media and Entertainment Corporation (“ZASH”) entered into a Contribution Agreement (the “Agreement”). Vinco Ventures and ZASH desire to establish the newly formed Company in order to engage in the development and production of consumer facing content and related activities.

Under the terms of the Agreement, Vinco Ventures and ZASH shall contribute certain assets (the “Contributed Assets”) to the Company. At Closing, Vinco Ventures and ZASH shall enter into a limited liability operating agreement of the Company and a content distribution agreement with American Syndication Media Corporation (“ASMC”). The Company shall not assume any liabilities of either Vinco Ventures or ZASH except those liabilities arising in or specifically relating to periods, events or occurrences happening with respect to the Contributed Assets on or after the Closing Date. In consideration of the Contributed Assets, the Company shall issue to Vinco Ventures and ZASH 5,000 Units. The transaction closed on January 19, 2021.

On October 30, 2020, the Company received a letter of intent from a prospective purchaser dated October 22, 2020 setting forth the terms of an offer to purchase Cloud b assets from CBAV1, LLC (“CBAV1”), the Company’s wholly owned subsidiary (the “LOI”). The Cloud b assets include but are not limited to intellectual property, know how, brand names, trade names, patents, models, internet websites, domains, social network assets, production facilities, including the molds of all products, and inventory (“Cloud b Assets”).

By way of background, the Cloud b Assets were pledged as collateral (“Collateral”) to secure a promissory note from East West Bank dated in or around May 25, 2011, along with amendments and modifications to the loan agreement (“Secured Note”). On June 4, 2018, CBAV1 acquired the Secured Note in accordance with the Cloud B Assignment of Loan and Security Agreement from East West Bank. On October 30, 2018, pursuant to the Stock Purchase Agreement, the Company became the beneficial owner of 72.16% of Cloud b, Inc.’s shares of common stock. CBAV1 provided Notification of Disposition of Collateral (pursuant to its notice of default dated August 7, 2018 to Cloud b, Inc.) and scheduled a Public Sale of the Collateral to the highest qualified bidder for February 11, 2019 (“Public Sale”). CBAV1 submitted the highest bid for the Collateral at the Public Sale and inured to the benefit of the Cloud b Assets. On February 17, 2020, the Company entered into the Agreement for The Purchase and Sale of Common Stock of Cloud b, Inc. and pursuant therewith, sold its ownership interest in Cloud b, Inc. to the buyer.

To effectuate the sale of the Cloud b assets to the prospective purchaser, the Company has determined that it is in the best interests of the company and its shareholders for CBAV1 and the prospective buyer to utilize the jurisdiction and protections of the bankruptcy court to effectuate the sale of the Cloud b Assets free and clear of any obligations.

The current assets of CBAV1 were estimated to be in excess of $2,000,000 and the current liabilities were estimated to be less than $100,000.

By utilizing the jurisdiction of the bankruptcy court, the Cloud b Assets can be transferred to the prospective purchaser free and clear of liens and obligations. Any unsecured creditors or minority shareholders of Cloud b, Inc. will have the opportunity to assert any claims or actions within the sale proceeding under the jurisdiction of the bankruptcy court.

On March 12, 2021, the bankruptcy court approved the sale of the CBAV1, LLC Assets to BTL Diffusion SARL, the winning bidder, at the auction held on March 10, 2021 and March 11, 2021 for a total sum of $3,000,000, which includes a cash payment at closing in the amount of $2,650,000, less certain closing costs and credits, and additional royalty payments in the amount of $150,000 on April 15, 2022 and in the amount of $200,000 on April 15, 2023 (“CBAV1-BTL ~~Transaction~~”Transaction”).

A dry closing of the CBAV1-BTL Transaction occurred on April 16, 2021, with the transfer of assets and release of funds completed on April 21, 2021 (“Final ~~Closing~~”Closing”). Contemporaneously with the Final Closing, a certain license agreement between CBAV1 and Edison Nation, LLC (“Edison ~~Nation~~”Nation”) terminated and any remaining operational assets of Edison Nation were transferred to BTL.

Upon closing, Jupiter delivered 150,000 of the Consideration Shares and held 50,000 of the Consideration Shares in escrow (“Escrow Shares”). Jupiter shall release the Escrow Shares upon SRM generating $200,000 in cash receipts and revenue prior to January 15, 2021. As of the date of the ~~Registration Statement,~~quarterly report, the Company has received all Exchange Shares.

As a ~~performance based~~performance-based incentive, the Buyer shall pay to the Seller two percent (2%) of gross sales of Jupiter’s private label sun care products if such gross sales are in excess of twelve million dollars ($12,000,000) earned during the 2021 calendar year.

At Closing, the Company (as “Stockholder”) and Jupiter entered into a Leak Out Agreement, whereby the Company was limited in the sales of the Consideration Shares upon the following terms: (i) As such time as the Stockholder is able to resell the Consideration Shares in accordance with the provisions of Rule 144 of the Securities Act (the “Expiration of the Holding Period”), the Stockholder agrees to limit the resales of such Shares in the public market as follows:

On November 10, 2020, the Company, through its wholly owned subsidiary, Honey Badger Media, LLC, entered into a series of transactions with Honey Badger Media, LLC, a Delaware limited liability company:

On November 10, 2020, under the terms of the Asset Purchase Agreement (the “Agreement”), the Company (the “Buyer”) agreed to purchase from Honey Badger Media, LLC (the “Seller”) all of the Seller’s rights, title and interest in and to the Internet Websites, Domain Names, and all of the respective content (the “Domains”), and any other rights associated with the domains, including, without limitation, any intellectual property rights, all related Domains, logos, customer lists and agreements, email lists, passwords, usernames and trade names; and all of the related social media accounts including but not limited to, Instagram, Twitter, Facebook, Instagram, and Pinterest at closing (collectively the “Purchased Assets”). In consideration for the sale of the Purchased Assets, the Buyer agreed to pay the Seller the amount of Three Hundred Thousand Dollars (US $300,000).

On November 10, 2020, under the terms of the Platform License Agreement (the “License Agreement”), Honey Badger Media, LLC (the “Licensor”) granted the Company (the “Licensee”) a perpetual, exclusive, worldwide license (the “~~License~~”“License”) to implement and commercialize the assets connected with the Platform, including, but not limited to, the right to use all of Licensor’s intellectual property rights comprising the Platform, owned by or licensed to Licensor that are utilized as part of the Platform (“Licensed Related ~~Assets~~”Assets”). In consideration for the License, the Licensee agreed to pay to the Licensor a fee equal to thirty percent (30%) of the Net Profits generated from Licensee’s clients through the Platform and Licensed Related Assets and the Licensee’s parent company agreed to issue the Licensor 750,000 shares of common stock.

On March 11, 2020, the Company and its wholly owned subsidiary, Scalematix, LLC (together the “Buyer”), entered into an Asset Purchase Agreement (the “Agreement”) with HMNRTH, LLC (the “Seller”) and TCBM Holdings, LLC (the “Owner”) (together Seller and Owner the “Selling Parties”) for the purchase of certain assets in the health wellness industry and related consumer products industry. Under the terms of the Agreement, Buyer is to remit $70,850 via wire transfer at Closing and shall issue to a representative of the Selling Parties Two Hundred Thirty-Eight Thousand Seven Hundred and Fifty (238,750) shares of restricted common stock. The shares were issued on March 16, 2020 and valued at $477,500.

On May 20, 2020 (the “Effective Date”), the “Company entered into an Agreement and Plan of Share Exchange (the “Share Exchange Agreement”) with PPE Brickell Supplies, LLC, a Florida limited liability company (“PPE”), and Graphene Holdings, LLC, a Wyoming limited liability company (“Graphene”, and together with PPE, the “Sellers”), whereby the Company purchased 25 membership units of Global Clean Supplies, LLC, a Nevada limited liability company (“Global”) from each of PPE and Graphene, for a total of fifty (50) units, representing fifty percent (50%) of the issued and outstanding units of Global (the “Purchase Units”). The Company issued 250,000 shares of its restricted common stock, $0.001 par value per share (the “Common Stock”) to PPE, and 50,000 shares of Common Stock to Graphene, in consideration for the Purchase Units.

On September 29, 2020, the Company entered into a Purchase and Sale Agreement (the “Agreement”) with Graphene Holdings, LLC, Mercury FundingCo, LLC, Ventus Capital, LLC and Jetco Holdings, LLC (together the “Sellers”) to acquire all outstanding Membership Units (the “Units”) of TBD Safety, LLC (“TBD”). Collectively, the Sellers owned all outstanding Units of TBD. Under the terms of the Agreement, the Company issued a total of Two Million Two Hundred Ten Thousand Three Hundred Eighty-Two (2,210,382) shares of the Company’s common stock and a total of Seven Hundred Sixty-Four Thousand Six Hundred Eighteen (764,618) shares of a newly designated Preferred Stock (the “Preferred”). In addition, the Company and Sellers entered into a Registration Rights Agreement (the “Registration Rights Agreement”) in favor of the Sellers obligating the Company to register such common stock and shares of common ~~ctock~~stock to be issued upon conversion of the Preferred within 120 days after the Closing. The Sellers also had an Earn Out Consideration, which provides that at such time as the assets purchased in the Agreement achieve cumulative revenue of $10,000,000, the Sellers will earn a total of One Hundred Twenty-Five Thousand (125,000) shares of common stock. The closing of the transaction occurred on October 16, 2020. ~~Please~~ ~~see~~See Note 3 — Acquisitions and Divestitures for further information.

Edison Nation Holdings, LLC formed Edison Nation Medical (“EN Medical”) in May of 2012 as a partnership with Carolinas Healthcare Systems (now called Atrium). Atrium is the ^2nd largest healthcare system in the US. Carolina Health (Atrium) looked to identify a way to aggregate and commercialize the healthcare related innovations that were coming from their physicians, nurses, and patients, and Edison Nation offered a platform to provide that function.

EN Medical built out a separate platform, leveraging the Edison Nation model to look for ideas that improved patient care and lowered costs. EN collected some great ideas, but the market shifted and EN found that the licensing model was very difficult as big medical device companies wanted to acquire companies with sales versus just buying IP and prototypes.

Today, EN Medical operates an online portal granting hospitals, government agencies and distributors access to its catalog of medical supplies and hand sanitizers.

On February 2, 2021, the Company entered into an Employment Agreement (the “Agreement”) with Christopher Ferguson (the “Executive”) for the role of Chief Executive Officer. The Agreement is effective as of November 12, 2020 (the “Effective Date”) and has a term of three (3) years (the “Term”) from the Effective Date. Thereafter, the Agreement shall automatically be renewed and the Term shall be extended for additional consecutive terms of 1 year (each a “~~Renewal Term~~”“Renewal Term”), unless such renewal is objected to by either the Company or the Executive. The Executive’s initial annual base salary shall be $200,000, less applicable withholdings (the “Base Salary”) and 120,000 common shares that shall vest in their entirety on issuance. The Base Salary shall be payable in accordance with the Company’s normal payroll procedures in effect from time to time. The Base Salary due of shares, shall be payable within the first 30 days of the year. On each anniversary of the Agreement, the base salary will increase no less than $15,000 (“minimum”). For 2021, the Executive shall receive a cash bonus in the amount equal to 30% of the annual Base Salary, and an award of 200% shares of the Company’s common stock, which shall vest in their entirety on issuance (the “~~Principal Market~~”“Principal Market”), which shall be received by the Executive no later than the first 30 days of the current fiscal year. The Executive shall be entitled to 150,000 shares of the Company’s common stock, due immediately upon an increase of 2.5 times the Enterprise Value on a 5-day closing average from the effectiveness of the Agreement. For clarification, the Enterprise Value as of the Company at the effective date was $25,042,464. Mr. Ferguson tendered his resignation as (i) the Company’s Chief Executive Officer, effective October 25, 2021 and (ii) Chairman of the Board of Directors, effective October 19, 2021.

On February 2, 2021, the Company entered into an Employment Agreement (the “Agreement”) with Brett Vroman (the “Executive”) for the role of Chief Financial Officer. The Agreement is effective as of November 12, 2020 (the “Effective Date”) and has a term of three (3) years (the “Term”) from the Effective Date. Thereafter, the Agreement shall automatically be renewed and the Term shall be extended for additional consecutive terms of 1 year (each a “~~Renewal Term~~”“Renewal Term”), unless such renewal is objected to by either the Company or the Executive. The Executive’s initial annual base salary shall be $200,000, less applicable withholdings (the “~~Base Salary~~”“Base Salary”) and 120,000 common shares that shall vest in their entirety on issuance. The Base Salary shall be payable in accordance with the Company’s normal payroll procedures in effect from time to time. The Base Salary due of shares, shall be payable within the first 30 days of the year. On each anniversary of the Agreement, the base salary will increase no less than $15,000 (“minimum”). For 2021, Executive shall receive a cash bonus in the amount equal to 30% of the annual Base Salary, and an award of 200% shares of the Company’s common stock, which shall vest in their entirety on issuance (the “~~Principal Market~~”“Principal Market”), which shall be received by the Executive no later than the first 30 days of the current fiscal year. Upon the execution of this agreement, the Executive is entitled to a one-time past performance bonus for the work completed in fiscal years 2018, 2019 and 2020 of 150,000 shares of the Company’s common stock, which shall vest in their entirety on issuance. The Executive shall be entitled to 100,000 shares of the Company’s common stock, due immediately upon an increase of 2.5 times the Enterprise Value on a 5-day closing average from the effectiveness of the Agreement. For clarification, the Enterprise Value as of the Company at the effective date was $25,042,464. Mr. Vroman tendered his resignation as the Chief Financial Officer of the Company, effective November 4, 2021, and has accepted the position of Chief Financial Officer and Treasurer of Cryptyde, Inc., a wholly-owned subsidiary of the Company. However on November 9, 2021, Mr. Vroman and the Company elected to retain Mr. Vroman as Chief Financial Officer of the Company until the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021 is filed with the Securities and Exchange Commission on or before November 22, 2021.

On February 2, 2021, the Company entered into an Employment Agreement (the “Agreement”) with Brian Mc Fadden (the “Executive”) for the role of Chief Strategy Officer. The Agreement is effective as of November 12, 2020 (the “Effective Date”) and has a term of three (3) years (the “Term”) from the Effective Date. Thereafter, the Agreement shall automatically be renewed and the Term shall be extended for additional consecutive terms of 1 year (each a “~~Renewal Term~~”“Renewal Term”), unless such renewal is objected to by either the Company or the Executive. The Executive’s initial annual base salary shall be $200,000, less applicable withholdings (the “Base Salary”) and 120,000 common shares that shall vest in their entirety on issuance. The Base Salary shall be payable in accordance with the Company’s normal payroll procedures in effect from time to time. The Base Salary due of shares, shall be payable within the first 30 days of the year. On each anniversary of the Agreement, the base salary will increase no less than $15,000 (“minimum”). For 2021, the Executive shall receive a cash bonus in the amount equal to 30% of the annual Base Salary, and an award of 200% shares of the Company’s common stock, which shall vest in their entirety on issuance (the “~~Principal Market~~”“Principal Market”), which shall be received by the Executive no later than the first 30 days of the current fiscal year. Upon the execution of the Agreement, the Executive is entitled to a one-time signing bonus of 150,000 shares of the Company’s common stock, which shall vest in their entirety on issuance. The Executive shall be entitled to 100,000 shares of the Company’s common stock, due immediately upon an increase of 2.5 times the Enterprise Value on a 5-day closing average from the effectiveness of the Agreement. For clarification, the Enterprise Value as of the Company at the effective date was $25,042,464. Mr. Mc Fadden tendered his resignation as the Chief Strategy Officer of the Company on September 23, 2021 in order to accept the role as President of the Company’s newly formed subsidiary, Cryptyde, Inc.

Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements as well as the reported expenses during the reporting periods. The accounting estimates that require our most significant, difficult and subjective judgments have an impact on revenue recognition, the determination of share-based compensation and financial instruments. We evaluate our estimates and judgments on an ongoing basis. Actual results may differ materially from these estimates under different assumptions or conditions.

Our significant accounting policies are more fully described in Note 2 to our consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

We sell consumer products across a variety of categories to retailers, distributors and manufacturers. We also sell consumer products directly to consumers through e-commerce channels. In addition, we generate revenues form media properties through social media monetization.

Our cost of revenues includes inventory costs, materials and supplies costs, internal labor costs and related benefits, subcontractor costs, depreciation, overhead and shipping and handling costs.

Selling, general and administrative expenses consist of selling, marketing, advertising, payroll, administrative, finance and professional expenses.

We earn rental income from a month-to-month lease on a portion of the building located in Washington, New Jersey that we ~~own.~~previously owned until August 2021.

Interest expense includes the cost of our borrowings under our debt arrangements.

Loss on issuance of warrants includes the fair value of the warrants at issuance on the grant date.

Change in fair value of the warrant liability includes the change in the fair value of the warrants at the measurement date based on the Monte Carlo simulation method.

Change in fair value of the short-term investment includes the change in the fair value of the underlying security at the measurement date.

Three Months Ended ~~June~~September 30, 2021 versus Three Months Ended ~~June~~September 30, 2020

The following table sets forth information comparing the components of net (loss) income for the three months ended ~~June~~September 30, 2021 and 2020:

For the three months ended ~~June~~September 30, 2021, revenues decreased by ~~$2,482,171~~$290,155 or ~~47.97%~~11.50%, as compared to the three months ended ~~June~~September 30, 2020. The decrease was primarily the result of a decrease in revenues from the Edison Nation Medical division.

For the three months ended ~~June~~September 30, 2021, cost of revenues ~~decreased~~increased by ~~$2,283,747~~$26,606 or ~~57.02%~~1.77%, as compared to the three months ended ~~June~~September 30, 2020. The ~~decrease~~increase was primarily attributable to the ~~decrease in total consolidated revenues.~~product mix of goods sold.

For the three months ended ~~June~~September 30, 2021, gross profit decreased by ~~$198,424,~~$316,761, or ~~16.97%~~31.15%, as compared to the three months ended ~~June~~September 30, 2020. The decrease was primarily a result of the decrease in revenues.

Selling, general and administrative expenses were ~~$5,941,652~~$25,869,419 and ~~$2,377,853~~$2,617,961 for the three months ended ~~June~~September 30, 2021 and 2020, respectively, representing an increase of ~~$3,563,799,~~$23,251,458, or ~~149.87%~~888.15%. The increase was primarily the result of an increase in stock-based compensation of ~~$1,037,351, profession~~$5,636,405, professional fees of ~~$897,021,~~$5,498,863, depreciation and amortization of ~~$326,316~~$3,640,200 and payroll and related benefits of ~~$702,150.~~$1,058,786, consulting and management fees of 5,036,418.

Rental income was ~~$28,703~~$17,136 and ~~$25,703~~$25,704 for the three months ended ~~June~~September 30, 2021 and 2020, respectively.

Interest expense was ~~$2,715,481~~$27,012,312 for the three months ended ~~June~~September 30, 2021 versus ~~$847,154~~$1,004,627 in the previous three months ended ~~June~~September 30, 2020. The increase in interest expense was related to the ~~two financings~~private placements completed in ~~the first quarter~~2021 of ~~$22,000,000~~$142,000,000 which included debt issuance costs related to original issue discount, the issuance of warrants and beneficial conversion features that were amortized and included as part of interest expense.

Loss on issuance of warrants was ~~$133,699,181~~$206,948,147 and $0 for the three months ended ~~June~~September 30, 2021 and 2020, respectively. The issuance of warrants was related to the issuance of warrants in connection with the three private placements completed in the second quarter of 2021. Change in fair value of warrants was a loss of ~~$37,154,989~~$287,117,556 and $0 for the three months ended ~~June~~September 30, 2021 and 2020, respectively. The change in fair value of warrants was related to a reduction in the warrant liability due to a change in the underlying assumptions of the ~~Black-Scholes~~Monte-Carlo simulation model, mostly related to a ~~decrease~~increase in the Company’s share price.

Income tax expense was $0 and $0 for the three months ended ~~June~~September 30, 2021 and 2020, respectively.

~~Six~~Nine Months Ended ~~June~~September 30, 2021 versus ~~Six~~Nine Months Ended ~~June~~September 30, 2020

The following table sets forth information comparing the components of net (loss) income for the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020:

For the ~~six~~nine months ended ~~June~~September 30, 2021, revenues decreased by ~~$1,870,355~~$2,160,510 or ~~26.24%~~22.39%, as compared to the ~~six~~nine months ended ~~June~~September 30, 2020. The decrease was primarily the result of a decrease in business operations from the Edison Nation Medical division.

For the ~~six~~nine months ended ~~June~~September 30, 2021, cost of revenues decreased by ~~$1,994,085~~$1,967,479 or ~~37.14%~~28.62%, as compared to the ~~six~~nine months ended ~~June~~September 30, 2020. The decrease was primarily attributable to the decrease in total consolidated revenues.

For the ~~six~~nine months ended ~~June~~September 30, 2021, gross profit ~~increased~~decreased by ~~$123,730,~~$193,031, or ~~7.04%~~6.95%, as compared to the ~~six~~nine months ended ~~June~~September 30, 2020. The ~~increase~~decrease was primarily a result of ~~higher~~lower margin revenues in ~~2021 due to less revenues from the Edison Nation Medical division.~~2021.

Selling, general and administrative expenses were ~~$17,602,532~~$43,471,951 and ~~$5,567,516~~$8,185,477 for the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, respectively, representing an increase of ~~$12,035,016,~~$35,286,474, or ~~216.16%~~431.09%. The increase was primarily the result of an increase in stock-based compensation of ~~$8,415,342,~~$14,051,747, professional fees of ~~$1,452,916,~~$7,195,038, depreciation and amortization of ~~$452,458~~$4,092,658 and payroll and related benefits of ~~$412,367.~~$1,200,169 and consulting and management fees of $5,022,071.

Rental income was ~~$54,407~~$71,543 and ~~$51,407~~$77,111 for the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, respectively.

Interest expense was ~~$15,410,414~~$42,422,726 for the ~~six~~nine months ended ~~June~~September 30, 2021 versus ~~$1,571,111~~$2,575,737 in the previous ~~six~~nine months ended ~~June~~September 30, 2020. The increase in interest expense was related to the ~~two financings~~private placements completed in ~~the first quarter~~2021 of ~~$22,000,000~~$142,000,000 which included debt issuance costs related to original issue discount, the issuance of warrants and beneficial conversion features that were amortized and included as part of interest expense.

Loss on issuance of warrants was ~~$208,855,715~~$415,803,862 and $0 for the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, respectively. The issuance of warrants was related to the issuance of warrants in connection with the ~~three~~ private placements completed in the first ~~six~~nine months of 2021. Change in fair value of warrants was a loss of ~~$773,447~~$287,891,003 and $0 for the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, respectively. The change in fair value of warrants was related to a reduction in the warrant liability due to a change in the underlying assumptions of the ~~Black-Scholes~~Monte-Carlo simulation model, mostly related to a ~~decrease~~increase in the Company’s share price.

Income tax expense was $0 and $0 for the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, respectively.

The Company defines EBITDA as net loss before interest, taxes and depreciation and amortization. The Company defines Adjusted EBITDA as EBITDA, further adjusted to eliminate the impact of certain non-recurring items and other items that we do not consider in our evaluation of our ongoing operating performance from period to period. These items will include stock-based compensation, restructuring and severance costs, transaction costs, acquisition costs, certain other non-recurring charges and gains that the Company does not believe reflects the underlying business performance.

For the three and ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, EBITDA and Adjusted EBITDA consisted of the following:

EBITDA and Adjusted EBITDA is a financial measure that is not calculated in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Management believes that because Adjusted EBITDA excludes (a) certain non-cash expenses (such as depreciation, amortization and stock-based compensation) and (b) expenses that are not reflective of the Company’s core operating results over time (such as restructuring costs, litigation or dispute settlement charges or gains, and transaction-related costs), this measure provides investors with additional useful information to measure the Company’s financial performance, particularly with respect to changes in performance from period to period. The Company’s management uses EBITDA and Adjusted EBITDA (a) as a measure of operating performance, (b) for planning and forecasting in future periods, and (c) in communications with the Company’s board of directors concerning the Company’s financial performance. The Company’s presentation of EBITDA and Adjusted EBITDA are not necessarily comparable to other similarly titled captions of other companies due to different methods of calculation and should not be used by investors as a substitute or alternative to net income or any measure of financial performance calculated and presented in accordance with U.S. GAAP. Instead, management believes EBITDA and Adjusted EBITDA should be used to supplement the Company’s financial measures derived in accordance with U.S. GAAP to provide a more complete understanding of the trends affecting the business.

Although Adjusted EBITDA is frequently used by investors and securities analysts in their evaluations of companies, Adjusted EBITDA has limitations as an analytical tool, and investors should not consider it in isolation or as a substitute for, or more meaningful than, amounts determined in accordance with U.S. GAAP. Some of the limitations to using non-GAAP measures as an analytical tool are (a) they do not reflect the Company’s interest income and expense, or the requirements necessary to service interest or principal payments on the Company’s debt, (b) they do not reflect future requirements for capital expenditures or contractual commitments, and (c) although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and non-GAAP measures do not reflect any cash requirements for such replacements.

For the ~~six~~nine months ended ~~June~~September 30, 2021, our operations lost approximately ~~$15,720,129,~~$42,214,710, of which approximately ~~$11,085,000~~$21,416,921 was non-cash and approximately ~~$1,428,000~~$6,528,000 was related to transaction costs and other non-recurring items.

At ~~June~~September 30, 2021, we had total current assets of approximately ~~$80,620,757~~$174,916,076 and current liabilities of approximately ~~$8,829,464~~$37,427,946 resulting in working capital of approximately ~~$71,791,293,~~$137,488,130, of which ~~$3,333,333~~$28,481,485 was convertible notes payable. At ~~June~~September 30, 2021, we had total assets of ~~$121,276,499~~$336,914,684 and total liabilities of ~~$148,820,211,~~$508,913,890, of which ~~139,695,115~~468,612,700 was related to the warrant liabilities, resulting in stockholders’ deficit of ~~$27,543,712.~~$171,999,206.

~~The Company believes it has sufficient cash for at least the next twelve months~~We received proceeds of $45,959,160 from ~~the date~~sales of ~~issuance of these condensed financial statements. The ability~~our securities subsequent to ~~continue as a going concern is dependent upon the Company’s ability to attract significant new~~September 30, 2021.

our securities. Our principal uses of capital are operating ~~needs include the planned costs to operate our business,~~expenses, including amounts required to fund working capital and capital ~~expenditures. Our future~~expenditures, acquisition costs and capital ~~requirements~~contributions to our subsidiaries and ~~the adequacy of~~consolidated variable interest entities. We currently anticipate that our available funds and cash flow from financing activities will ~~depend on many factors, including~~be sufficient to meet our ~~ability to successfully commercialize~~operational cash needs and fund our ~~products~~planned acquisitions and ~~services, competing technological and market developments, and~~investments for the ~~need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement our product and service offerings.~~foreseeable future.

During the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, our sources and uses of cash were as follows:

Net cash used in operating activities for the ~~six~~nine months ended ~~June~~September 30, 2021 was ~~$9,791,988~~$21,796,639 which included net loss from continuing operations of ~~$241,128,943~~$787,324,086 that included ~~$3,465,708~~$1,622,027 of cash used by changes in operating assets and liabilities, stock-based compensation of ~~$10,003,767,~~$16,829,359, loss on issuance of warrants of ~~$208,855,715,~~$415,803,862, change in fair value of warrant liability of $287,891,003, depreciation and amortization of ~~$1,081,623,~~$5,013,543, amortization of financing costs of ~~$15,597,936,~~$42,324,603, loss on disposal of $4,130,580, gain on debt extinguishment of $852,352 and amortization of right of use assets of ~~$48,327.~~$80,333. Net cash used in operating activities for the ~~six~~nine months ended ~~June~~September 30, 2020 was ~~$2,487,898~~$3,311,310, which included a net loss from continuing operations of ~~$332,647 that~~$7,908,524 and net income from discontinued operations of $4,704,394. The net loss included ~~$825,190~~$1,140,875 of cash used by changes in operating assets and liabilities ~~stock-based compensation~~and a gain on disposal of ~~$1,588,427, depreciation and amortization of $612,406, amortization of financing costs of $1,227,046 and amortization of right of use assets of $153,820~~$4,911,760 which was offset by ~~a gain on divestiture~~stock-based compensation of ~~a subsidiary~~$2,765,022 and amortization of ~~$4,911,760.~~debt issuance costs of $2,015,422.

Net cash used in investing activities was ~~$14,559,069~~$108,662,799 and ~~$61,917~~$193,249 for the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, respectively. Net cash used in investing activities was largely attributable to the Company’s ~~equity method investment~~joint venture, ZVV Media Partners, LLC, acquiring an 80.0% interest in Lomotif Private Limited of $90,761,200 and funding of ~~loan~~loans receivable $18,150,000 offset by the receipt of funds of $2,529,565 related to the sale of the assets of CBAV 1, LLC.

Net cash provided by financing activities for the ~~six~~nine months ended ~~June~~September 30, 2021 totaled ~~$98,858,274~~$280,147,361 which related to borrowings under convertible notes of $122,000,000 and proceeds from the exercise of warrants of $167,961,099. Net cash provided by financing activities for the nine months ended September 30, 2020 totaled $3,476,624 which related mostly to borrowings under convertible notes and proceeds from the exercise of warrants. Net cash provided by financing activities for the three months ended June 30, 2020 totaled $3,899,433 which related mostly to borrowings under convertible notespayable and borrowings under notes payable.

We did not have, during the periods presented, and we do not currently have, any relationships with any organizations or financial partnerships, such as structured finance or special purpose entities, that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

The Company’s management, with the participation of the Company’s Principal Executive Officer and Principal Financial and Accounting Officer has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly report. Based on such evaluation, the Company’s Principal Executive Officer and Principal Financial and Accounting Officer have concluded that, as of the end of such period covered by this Quarterly Report, the Company’s disclosure controls and procedures were not effective to provide reasonable assurance that information that it is required to disclose in reports that the Company files with the SEC is recorded, processed, summarized and reported within the time periods specified by the Exchange Act rules and regulations.

During the three months ended ~~June~~September 30, 2021, there were no changes in our internal control over financial reporting that materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Under the supervision and with the participation of management, including our principal executive officer, we have not completed an evaluation of the effectiveness of our internal control over financial reporting based on the COSO Framework. Based on this evaluation under the COSO Framework, management concluded that our internal control over financial reporting was not effective as of ~~June~~September 30, 2021.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting.

However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

As of December 31, 2020, management completed an effective assessment of the Company’s internal control over financial reporting based on the 2013 Committee of Sponsoring Organizations (COSO) framework. Management has concluded that as of December 31, ~~2021,~~2020, our internal control over financial reporting was not effective to detect the inappropriate application of U.S. GAAP. There have not been any changes to internal controls during the three months ended ~~June~~September 30, 2021. Management identified the following material weaknesses set forth below in our internal control over financial reporting.

We are not required by current SEC rules to include, and do not include, an auditor’s attestation report regarding our internal controls over financial reporting. Accordingly, our registered public accounting firm has not attested to management’s reports on our internal control over financial reporting.

From time to time, the Company is party to legal actions that are routine and incidental to its business. However, based upon available information and in consultation with legal counsel, management does not expect the ultimate disposition of any or a combination of these actions to have a material adverse effect on the Company’s assets, business, cash flow, condition (financial or otherwise), liquidity, prospects and\or results of operations.

~~Not applicable to smaller reporting companies.~~Lomotif-related Risk Factors

We may face difficulty in integrating the operations of the business or assets we have acquired and may acquire in the future, and there is no guarantee that we may realize the expected benefits from our acquisitions and investments, including our investments in ZVV, our joint venture with ZASH which owns an 80% interest in Lomotif, and other businesses we intend to acquire or invest in, such as AdRizer and ZASH, to complement Lomotif’s business and to further our plan to disrupt the media and entertainment industry.

Acquisitions have been and may continue to be an important component of our growth strategy as we transition to be focused on the development of digital media and content technologies; however, we will need to integrate these acquired businesses and assets successfully in order for our growth strategy to succeed and for us to become profitable. In July 2021, ZVV, a joint venture of Vinco Ventures and ZASH, completed the acquisition of 80% of Lomotif, which we believe was a key step taken to achieve our plan to build a media and entertainment company worldwide with users around the world that allows us to leverage our content globally. Through ZVV, we and ZASH currently intend to complete an acquisition of AdRizer, a full-service tracking platform for advertisers seeking ROI optimization and digital analytics, which we believe can complement Lomotif’s business and help to monetize Lomotif’s platform. We also plan to complete a business combination with ZASH, which we believe will enable us to offer a variety of media and entertainment formats through Lomotif and other distribution channels. In reviewing potential acquisitions or investments, we target brands, assets or companies that we believe offer attractive products, technologies or offerings, the ability for us to leverage our offerings, opportunities to drive our brands, competencies, or other synergies. However, there is no guarantee that our acquisitions and investments, including our investments in ZVV and Lomotif, will be successful or beneficial as we expected, and such acquisitions and investments can consume significant amounts of management attention and other resources. Loss in our investments or failure to integrate our acquired businesses in a cost-efficient and effective manner may negatively impact our business, financial condition, operating results, and stock price.

To integrate Lomotif and other businesses we acquire or invest in in the media and digital entertainment industry (collectively, the “acquired businesses”), we will need to implement, and the management teams of the acquired businesses will need to adopt, our policies, procedures and best practices, and cooperate with each other in aspects of their operations. We may face difficulty with the integration of the acquired businesses, such as coordinating geographically dispersed organizations, integrating personnel with disparate business backgrounds and combining different corporate cultures. Our acquired businesses may not be profitable and not have sophisticated financial reporting systems in place, and we are relying on their adoption of our best practices to operate their businesses more efficiently to achieve and maintain profitability. However, we may fail in implementing our policies and procedures, or the policies and procedures may not be effective or provide the results we anticipate for a particular business. Further, we will be relying on these policies and procedures in preparing our financial and other reports as a public company, so any failure of acquired businesses to properly adopt these policies and procedures could impair our public reporting. Management of the acquired businesses may not have the operational or business expertise that we require to successfully implement our policies, procedures and best practices.

In addition, our growth strategy also includes the development of digital properties that we intend to integrate with Lomotif. This will require, among other things, the integration of the individual websites, platforms and databases of Lomotif with each other business that we develop or acquire. This will be a complex undertaking that may prove more difficult, expensive and time consuming than we expect. Even if we are able to achieve this integration, it may not achieve the benefits we anticipate. If we fail to do this properly and in a timely manner, it could harm our revenue and relationship with our users.

If we fail to successfully integrate Lomotif into our internal control over financial reporting, the integrity of our financial reporting could be compromised which could result in a material adverse effect on our reported financial results.

As a private company, Lomotif was not subject to the requirements of the Exchange Act, with respect to internal control over financial reporting. The integration of Lomotif into our internal control over financial reporting may require significant time and resources from our management and other personnel and may increase our compliance costs. If we fail to successfully integrate these operations, our internal control over financial reporting may not be effective. Failure to achieve and maintain an effective internal control environment could have a material adverse effect on our ability to accurately report our financial results and the market’s perception of our business and stock price.

As of September 30, 2021, Lomotif had not generated any significant revenues and is likely to continue to experience significant net losses for the foreseeable future. Lomotif has a limited operating history upon which investors can evaluate its future prospects.

As of September 30, 2021, Lomotif had not generated any significant revenues and had experienced significant net losses since inception and, given the significant operating and capital expenditures associated with its business plans, we anticipate it will continue to incur net losses and significant negative cash flows for the foreseeable future. If Lomotif ever does achieve profitability, of which no assurances can be given, Lomotif may be unable to sustain or increase such profitability. To achieve and sustain profitability, Lomotif will need to accomplish numerous objectives, including attracting and substantially increasing the number of users, content creators, influencers, and paying advertisers on its platform, securing tipping point scale of user adoption, developing sources of revenue and economies of scale. There is a significant risk that Lomotif will be unable to achieve these objectives, which would damage its business and could lead to the loss of our investment in Lomotif.

Lomotif does not have a history of significant revenue generation upon which an evaluation of its business plan or performance and prospects can be made. The business and prospects of Lomotif must be considered in the light of the potential problems, delays, uncertainties and complications encountered in connection with a new business in a market in which there are larger and more established competitors. The risks include, but are not limited to, our ability to: develop new sources of revenue using the Lomotif platform; monetize the Lomotif platform; attract new users and retain users; encourage purchases by advertisers; continue developing innovative products, services and technologies in response to user demand; increase brand awareness through marketing and promotional activities; react to changes in user access to and use of the internet; expand into new market segments; integrate new devices, platforms and operating systems; take advantage of any growth in the relevant markets; compete successfully for users, influencers, advertisers, publishers, and business partners with other video-sharing and streaming platforms; and protect Lomotif’s intellectual property and ensure compliance with applicable laws and regulations including those relating to data privacy. There are no assurances that Lomotif can successfully address these challenges and achieve its growth goals in a cost-effective manner.

It is difficult to accurately forecast future revenues of Lomotif as it is still developing its mobile user marketing, revenue generating services and business models. The current and future expense levels are based largely on estimates of planned operations and future revenues rather than experience. If Lomotif’s forecasts prove incorrect, our business, operating results, financial condition, and stock price may be materially and adversely affected. Any significant reduction in planned or actual revenues may immediately and adversely affect our business, financial condition, operating results, and stock price.

To continue to support the business objectives of Lomotif, Lomotif has an ongoing need for additional funding. As of September 30, 2021, we have provided ZVV with $141,385,000 in funding in the form of capital contributions, of which $109,765,000 was related to the purchase consideration, $2,000,000 has been used to fund Lomotif and $10,000,000 has been used to make loans to ZASH pending completion of our expected business combination with ZASH. The source of such funding has been the sale of our convertible notes and warrants in numerous financing transactions. We expect to continue funding ZVV and Lomotif with the proceeds of the financing transactions that we have already completed, and may in the future need to complete additional financing transactions for the purpose of funding ZVV, Lomotif and ZASH. Such financing transactions have been and may in the future be dilutive to our stockholders.

Lomotif has incurred losses since its inception and has a present need for additional funding from us or ZVV. For the foreseeable future, we expect to fund ZVV for the purpose of funding Lomotif, until Lomotif’s revenues generated from advertising, streaming and other sources, if any, are sufficient to sustain Lomotif’s operations. We may continue to fund ZVV for the purpose of making loans to ZASH, or we may make additional loans to ZASH directly, until completion of our anticipated business combination with ZASH. A great portion of our prior funding to Lomotif and ZASH has been spent for developing and acquiring a variety of content for Lomotif, Lomo TV and Lomo Records, and we expect an ongoing need for funding to support this operational objective to retain and increase Lomotif’s user base. The financing transactions that we have completed to date, involving the sale of our convertible notes and warrants, have been dilutive to our stockholders, and any future equity financing transactions that we may need to complete in order to raise additional funding to fund our growth objectives with respect to Lomotif and ZASH, will be dilutive to our stockholders. In addition, to support Lomotif’s effort to monetize its platform and achieve profitability, we may decide to acquire or invest in other businesses, technologies, and assets, such as AdRizer, which we believe can complement Lomotif’s current business activities, both financially and strategically. We may need additional equity financing for such acquisitions or investments, or we may issue our securities as consideration for such acquisitions, each of which would further dilute our stockholders and may adversely affect our stock price. There are no assurances that we will be able to raise any additional needed capital on terms acceptable to us. If we are unable to obtain sufficient amounts of additional capital to fund our growth objectives with respect to Lomotif and ZASH and any future acquisitions, we may be required to reduce the scope of our planned growth or otherwise alter our business objectives and operations, which could harm our business, financial condition, operating results, and stock price.

Lomotif’s business is highly competitive, and the industry is characterized by constant change. In order to compete Lomotif may need to rapidly evolve its business model and continuously innovate its technologies or to design features that meet the expectations of its users to retain and grow the number of users, advertisers and business partners on the platform.

Social platforms are characterized by constant change, including rapid technological evolution, continual shifts in customer demands and preferences, frequent introductions of new products and services and the constant emergence of new industry standards and practices. In addition, short videos and streaming, each as a content format, may be replaced by new content formats. Lomotif’s success will depend, in part, on its ability to respond to these changes in a cost-effective and timely manner; failure to do so may cause Lomotif’s user base to shrink and user engagement to decline, thereby materially and adversely affecting its results of operations. Lomotif began operations in 2015 and has continuously changed and upgraded the technology and features on which its platform relies. Lomotif recently launched Lomo TV and Lomo Records with ZASH to introduce new content and services to its platform, engage new segments of users, and develop potential new revenue sources.

Lomotif faces significant competition in the market of social platforms including companies operating worldwide established video-sharing social platforms such as TikTok, Kuaishou, Snapchat and Instagram. Some of its current and potential competitors have significantly greater resources and better competitive positions in certain markets than it does. These factors may allow its competitors to respond more effectively than Lomotif to new or emerging technologies and changes in market requirements. Lomotif’s competitors may develop products, features, or services that are similar to its or that can achieve greater market acceptance, may undertake more far-reaching and successful product development efforts or marketing campaigns, or may adopt more aggressive pricing policies. In launching and increasing various streaming services, such as Lomo TV and Lomo Records, Lomotif also faces competition from traditional providers of entertainment video, including broadcasters and cable network operators, as well as internet-based e-commerce or entertainment video providers which are increasing their streaming video offerings. Several of these competitors have long operating histories, large customer bases, strong brand recognition, exclusive rights to certain content and significant financial, marketing and other resources. They may secure better terms from licensors and influencers, adopt more aggressive pricing and devote more resources to product development, technology, infrastructure, content acquisitions and marketing. As a result, Lomotif’s competitors may acquire and engage users at the expense of the growth or engagement of Lomotif’s user base, which may negatively affect its business and financial results.

We believe that Lomotif’s ability to compete effectively depends upon many factors both within and beyond our control, including:

If Lomotif is not able to effectively compete, its user base and level of user engagement may decrease, which could make it less attractive to influencers, publishers, advertisers, and business partners, and materially and adversely affect its business, revenue prospects and results of operations.

If Lomotif fails to retain its existing users, keeps them engaged or acquire new users in a cost-efficient manner, its business, financial condition, results of operations and prospects may be materially and adversely affected. A majority of Lomotif’s current user base is not in the United States and it may not be able to gain a significant number of users in the United States as quickly or as cost effectively as it experienced with other jurisdictions, and will likely need to change or enhance its technology platform to accommodate a user base in the United States at scale.

The size of user base and the level of user engagement are critical to Lomotif’s success. Its expected monetization methods, including advertising, paid features, non-fungible tokens or functions, live streaming, e-commerce and online games, depend on its ability to significantly increase the size of its user base and user engagement. A majority of Lomotif’s current user base is not in the United States. While Lomotif is prioritizing the United States as a region to grow its user base, it may not be able to gain a significant number of users in the United States as quickly or cost effectively as it experienced with other jurisdictions and will likely need to change or enhance its technology platform to accommodate a user base in the United States at scale. If Lomotif fails to grow its user base in the United States or generally, either due to its failure to retain existing users or attract new users, or its users becoming less active, there may be less frequent access of users to its platform, less user engagement with any ads displayed on the platform, and less user spend with paid products or services offered by the platform. This could drive influencers and other content creators away from the Lomotif platform, discourage advertisers from purchasing advertisements on the platform, dissuade merchants from promoting products on the platform, and dissuade publishers and game developers from distributing their tv shows, music records, and games through the platform. As a result, Lomotif may not be able to generate the level of revenues expected, or suffer from decline in revenues. Lomotif may need to conduct more marketing and branding activities and incur additional selling and marketing expenses to retain existing users and attract new users, influencers, advertisers, merchants, game developers and publishers, which may reduce its profitability.

Growing Lomotif’s user base and maintaining a high level of user engagement require it to adequately and timely respond to changes in user preferences, attract and retain popular influencers and offer new features and contents. A number of factors could negatively affect user retention, growth and engagement, including if:

If Lomotif’s users, influencers, publishers and other content creators and licensors do not continue to contribute content or their contributions are not perceived as valuable to other users, Lomotif may experience a decline in user growth, retention, and engagement, which could result in the loss of advertisers and revenue.

Lomotif’s success depends on its ability to provide Lomotif users with engaging content, whether through its platform or the associated Lomo TV and Lomo Records, which in part depends on the content contributed by its users, influencers, publishers and other content creators and licensors. If its existing and target content contributors, including influencers, celebrities, artists, athletes, journalists, sports teams, media outlets and brands, publishers, and other users, are not interested in contributing, or do not continue to contribute engaging content to Lomotif, user growth, retention, and engagement may decline. That, in turn, may impair Lomotif’s ability to maintain good relationships with its advertisers and business partners or attract new advertisers and business partners, which may seriously harm its business.

Lomotif faces risks related to third-parties on which it relies and with whom it does business. Changes to third-party operating systems, networks, mobile devices, third-party standards, mobile application distribution channels, targeting and measurement tools or third-party terms of service may negatively affect Lomotif’s business. In addition, Lomotif may fail to partner with third-party platforms that integrate with its platform or other products which could harm its business.

Lomotif relies on third parties to supply these services and provide revenue sources. It is important that Lomotif’s platform and related products and services work well across a range of mobile operating systems, complex networks and mobile devices that Lomotif does not control. The networks maintained and services provided by such third parties are vulnerable to damage or interruption, which could impact Lomotif’s results of operations. Any disruption or cancelation of service or partnership by Lomotif or by a third-party with Lomotif could affect user experience, drive users away and discourage advertisers and partners from working with Lomotif.

Furthermore, Lomotif expects to continue to devote significant resources to creating and supporting products and services across multiple platforms and devices. Lomotif may not be successful in maintaining and developing relationships with key participants in the mobile industry or in developing services that operate effectively with these operating systems, networks, devices and standards. Failing to attract and retain a substantial number of new device manufacturers, suppliers, distributors, developers and users, or failing to develop products and technologies that work well on new devices and platforms, could harm Lomotif’s business, financial condition, and operating results and ability to capture future business opportunities.

In addition, the conduct of third parties which provide infrastructure, services, content and collaboration opportunities to Lomotif may affect Lomotif’s business. We cannot be certain whether any such third party has or will infringe any other person’s legal rights or violate any regulatory requirements. While Lomotif is on watch for irregularities or non-compliance in the business practices of any parties with whom Lomotif pursues existing or future cooperation, we cannot assure you that any of these irregularities will be corrected in a prompt and proper manner or that they will not expose us or Lomotif to liability or reputational harm.

The long-term and largely fixed cost nature of certain contractual relationships and commitments Lomotif has or may need to enter into may limit Lomotif’s operating flexibility and could adversely affect its liquidity or results of operations.

In connection with licensing streaming content, Lomotif has and may need to enter into multi-year commitments with content providers. In addition, Lomotif has and may need to multi-year commitments for content that it produces, either directly or through third parties, including elements associated with these productions such as non-cancelable commitments under talent agreements. The payment terms of these agreements are typically not tied to member usage or the size of Lomotif’s user base (“fixed cost”) but may be determined by costs of production or tied to such factors as titles licensed or theatrical exhibition receipts.

Given the multiple-year duration and largely fixed cost nature of certain content commitments, if user acquisition and retention do not meet expectations, margins may be adversely impacted. Payment terms for certain content commitments, such as content Lomo TV or Lomo Records directly produces or will produce, may typically require more up-front cash payments than other content licenses or arrangements whereby Lomotif does not cashflow the production of such content. To the extent revenue growth does not meet expectations, Lomotif’s liquidity and results of operations could be adversely affected as a result of content commitments and accelerated payment requirements of certain agreements. In addition, the long-term and fixed cost nature of certain content commitments may limit flexibility in planning for, or reacting to changes in Lomotif’s business and the market segments in which Lomotif operates. If Lomo TV or Lomo Records licenses or produces content that is not favorably received by consumers in a territory, or is unable to be shown in a territory, the acquisition and retention of users may be adversely impacted and, given the long-term and fixed cost nature of certain of Lomotif’s content commitments, it may not be able to adjust its content offering quickly and its results of operation may be adversely impacted.

Lomotif relies on a combination of patent, trademark, trade secret, copyright, domain names, proprietary technologies and other intellectual property rights to protect its intellectual property. Lomotif’s patents may expire and may not be extended, Lomotif’s patent applications or patent rights may be contested, circumvented, invalidated, limited in scope or Lomotif may be subject to other forms of intellectual property infringement cases that result in liability and prevent Lomotif from continuing to use the intellectual property on which it currently relies. In particular, Lomotif may not be able to prevent others from developing and deploying competing technologies, which could have a material and adverse effect on its business, financial condition, results of operations and prospects.

Lomotif relies on patented technology for mixing and editing videos. Lomotif may not be able to prevent others from developing or exploiting competing technologies, which could have a material and adverse effect on its business operations, financial condition and results of operations. Lomotif’s patents registered in the United States are generally subject to finite and non-extendable terms. Currently, Lomotif also has patent applications pending in the United States and has filed a PCT application, but we cannot assure you that Lomotif will be granted patents pursuant to pending applications. Even if Lomotif’s patent applications succeed and Lomotif is issued patents in accordance with them, it is still uncertain whether these patents will be contested, circumvented or invalidated in the future.

The rights granted under any issued patents may not provide Lomotif with proprietary protection or competitive advantages. Further, the claims under any patents that issue from patent applications may not be broad enough to prevent others from developing technologies that are similar or that achieve results similar to Lomotif’s technology. It is also possible that the intellectual property rights of others will bar Lomotif from licensing or from exploiting any patents that issue from Lomotif’s pending applications. Numerous U.S. and patents issued in other regions and pending patent applications owned by others exist in the fields in which Lomotif has developed and is developing technology. These patents and patent applications might have priority over Lomotif’s patent applications and could subject its patent applications to invalidation or subject it to patent infringement lawsuits in its current and in any future jurisdictions into which Lomotif expands.

Finally, litigation may be necessary in the future to enforce Lomotif’s intellectual property rights and to protect its trade secrets or defend against claims of infringement by Lomotif. Such litigation could be costly, time-consuming, and distracting to management, and could result in the impairment or loss of portions of Lomotif’s available intellectual property or result in payment of substantial damages, penalties and fines or to the removal of relevant content from Lomotif’s website. It may also result in Lomotif’s need to seek license arrangements which may not be available on commercially reasonable terms. Further, efforts to enforce intellectual property rights may be met with defenses, counterclaims and countersuits attacking the validity and enforceability of Lomotif’s intellectual property rights, and if such defenses, counterclaims or countersuits are successful, Lomotif could lose valuable intellectual property rights. Lomotif’s inability to protect proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of management’s attention and resources, could delay further sales or the implementation of the Lomotif platform, impair the functionality of the platform, delay introductions of platform’s features, result in Lomotif substituting inferior or more costly technologies into platforms or damage Lomotif’s reputation.

Lomotif relies on a combination of patent, trademark, trade secret, copyright and other intellectual property rights and measures to protect its intellectual property and ensure strong branding with users, but trademarks registered, internet search engine keywords purchased and domain names which are already registered by third parties that are similar to Lomotif’s trademarks, brands or websites or third-party misappropriation of Lomotif’s data and copying of Lomotif’s platform could cause confusion for users, divert users from Lomotif’s products and services or harm Lomotif’s reputation and brand image.

Competitors and other third parties may register trademarks or purchase internet search engine keywords or domain names that are similar to Lomotif’s in order to divert potential users from its platform to theirs. Preventing such unauthorized use is inherently difficult. If Lomotif is unable to prevent such unauthorized use, competitors and other third parties may continue to drive potential online customers away from Lomotif’s platform to competing, irrelevant or potentially offensive platforms, which could harm Lomotif’s reputation and cause Lomotif to lose revenues.

Third parties may misappropriate Lomotif’s data through scraping its platform or by other means and may aggregate the data on their own platforms. In addition, “copycat” or piracy-based platforms or apps may misappropriate data on Lomotif’s platform and attempt to imitate Lomotif’s brand or the functionality of Lomotif’s platform. Copied and pirated content may prove to be competitive with Lomotif’s content. If Lomotif becomes aware of such platforms, it may employ technological and legal measures in an attempt to halt their operations if these efforts are commercially reasonable.

Lomotif may not be able to detect all such actions in a timely manner and, even if Lomotif could, technological and legal measures when employed may be insufficient to stop their operations. In those cases, Lomotif’s available remedies may not be adequate to protect against such platforms. Regardless of whether Lomotif can successfully enforce Lomotif’s rights against these platforms, any measures that Lomotif may take could require significant financial or other resources from Lomotif or from us. Those platforms may also lure away some of Lomotif’s users or advertisers or reduce its market share, causing material and adverse effects to Lomotif’s business, financial condition, results of operations and prospects.

Any material disruption or breach of Lomotif’s information technology systems or those of third-party partners could materially damage user and business partner relationships, and could subject Lomotif to significant reputational, financial, legal and operational consequences.

Computer hackers, governments or cyber terrorists may attempt to penetrate Lomotif’s network security and Lomotif’s website. Unauthorized access to Lomotif’s proprietary business information or user data may be obtained through break-ins, sabotage, breach of Lomotif’s secure network by an unauthorized party, computer viruses, computer denial-of-service attacks, employee theft or misuse, breach of the security of the networks of Lomotif’s third-party providers or other misconduct. Despite the implementation of security measures, the servers of Lomotif’s computing providers and other systems, and other third parties on which Lomotif relies, are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. In addition, the techniques used by computer programmers who may attempt to penetrate and sabotage Lomotif’s network security or website change frequently and may not be recognized until launched against a target, Lomotif may be unable to anticipate these techniques.

Any material disruption or slowdown of Lomotif’s systems or those of third parties on which Lomotif depends on, including a disruption or slowdown caused by Lomotif’s failure to successfully manage significant increases in user volume or successfully upgrade applicable systems, system failures, viruses, security breaches, or other causes, could harm Lomotif’s brand and reputation, and adversely affect its revenue prospectus or cause revenues to decline. To the extent that any disruption or security breach was to result in a loss of or damage to data or applications, or inappropriate disclosure of confidential or proprietary information, Lomotif could incur liability or reputational damage and the further development of products and services could be delayed. In addition, if changes in technology cause Lomotif’s information systems, or those of third parties on which Lomotif depends, to become obsolete, or if such information systems are inadequate to handle Lomotif’s growth, Lomotif could lose users and its business and operating results could be adversely affected.

Lomotif’s products and internal systems rely on software and hardware that is highly technical, and any errors, bugs, or vulnerabilities in these systems, or failures to address or mitigate technical limitations in Lomotif’s systems, could adversely affect its business.

Lomotif’s products, services and internal systems rely on software and hardware, including software and hardware developed or maintained internally or by third parties, that is highly technical and complex. In addition, Lomotif’s products and internal systems depend on the ability of such software and hardware to store, retrieve, process and manage large amounts of data. The software and hardware on which Lomotif relies has contained, and may in the future contain, errors, bugs or vulnerabilities, and Lomotif’s systems are subject to certain technical limitations that may compromise Lomotif’s ability to meet its objectives. Some errors, bugs, or vulnerabilities inherently may be difficult to detect and may only be discovered after the code has been released for external or internal use.

Errors, bugs, vulnerabilities, design defects, or technical limitations within the software and hardware on which Lomotif relies have in the past led to, and may in the future lead to, outcomes including a negative experience for users and advertisers who use Lomotif’s products and services, compromised ability of its products and services to perform in a manner consistent with Lomotif’s terms, contracts or policies, delayed product or service introductions or enhancements, targeting, measurement or billing errors, compromised ability to protect the data of Lomotif’s users or its intellectual property or other data, or reductions in its ability to provide some or all of its services. For example, Lomotif makes commitments to its users as to how their data will be used within and across Lomotif’s products, and its systems are subject to errors, bugs and technical limitations that may prevent it from fulfilling these commitments reliably. In addition, any errors, bugs, vulnerabilities or defects in Lomotif’s systems or the software and hardware on which Lomotif relies, failures to properly address or mitigate the technical limitations in Lomotif’s systems, or associated degradations or interruptions of service or failures to fulfill its commitments to its users, have in the past led to, and may in the future lead to, outcomes including damage to Lomotif’s reputation, loss of users, loss of advertisers, loss of revenue, regulatory inquiries, litigation, or liability for fines, damages, or other remedies, any of which could adversely affect its business and financial results.

Lomotif’s focus on user experience and acting for the long-term may conflict with the short-term operating results of its business, and also negatively impact Lomotif’s relationships with advertisers or other third parties.

Lomotif strives to focus on user experience and satisfaction, which Lomotif believes is essential to its success and serves the best, long-term interests of the business. Therefore, Lomotif has made, and may make in the future, significant investments or changes in strategy that it thinks will benefit its users, even if the decision negatively impacts its operating results in the short term. In addition, this focus on the user experience may also negatively impact relationships with advertisers or other third parties and may not result in the long-term benefits that Lomotif expects, in which case the success of its business and operating results could be harmed.

Spammers and malicious applications may affect user experience, which could reduce Lomotif’s ability to attract users and advertisers and materially and adversely affect its business, financial condition and results of operations.

Spammers may use Lomotif’s platforms to send targeted and untargeted spam messages to users, which may affect user experience. As a result, Lomotif’s users may use Lomotif’s products and services less or stop using them altogether. In spamming activities, spammers typically create multiple user accounts for the purpose of sending spam messages. Although Lomotif attempts to identify and delete accounts created for spamming purposes, it may not be able to effectively eliminate all spam messages from Lomotif’s platforms in a timely fashion. Any spamming activities could have a material and adverse effect on its business, financial condition and results of operations.

User misconduct and inappropriate content may adversely impact Lomotif’s brand image, business and results of operations, and Lomotif may be held liable for information or content displayed on, retrieved from or linked to its platform or website or distributed to its users. Social media platforms have received increased scrutiny from stakeholders in recent years. Lomotif may experience negative publicity involving Lomotif, its users, its content, its platform, its management, its business model or its industry in general.

Lomotif’s short video and streaming platform enables users to present and exchange information, interact with others and engage in various other online activities, many of which are conducted in real time. As it is difficult to control user behavior in real time, Lomotif’s platform may be misused by individuals or groups of individuals who engaged in, among other things, immoral, inappropriate, disrespectful, fraudulent or illegal activities. While Lomotif has developed its own technologies and is using technologies licensed from others as well as other measures to detect inappropriate content and activities, Lomotif cannot guarantee that it will be able to fully prevent inappropriate content from being posted on its platform or inappropriate activities from being carried out on Lomotif’s platform.

Moreover, as Lomotif has no control over the offline behavior of Lomotif’s users, to the extent that such behavior is associated with Lomotif’s platform, its ability to protect its brand image and reputation may be limited. Lomotif’s business and the public perception of its brand may be materially and adversely affected by misconduct conducted on or linked to Lomotif’s platform. It is possible that Lomotif’s users may engage in conversations or activities on its platform that may be deemed illegal under the laws and regulations of certain countries within which Lomotif operates.

If any of Lomotif’s users suffers or alleges to have suffered physical, financial or emotional harm arising from any contact initiated on Lomotif’s platform, Lomotif may face civil lawsuits or other proceedings initiated by the affected user, or governmental or regulatory actions. Defending such actions could be costly and involve significant time and attention of Lomotif’s management and other resources, which could materially and adversely affect its business, financial condition, results of operations and prospects. There can be no assurance that Lomotif can detect all illegal or inappropriate content displayed on, retrieved from or linked to its platform or website. If Lomotif is held liable for any of the aforementioned incidents in the future, its business, financial condition and results of operations may be materially and adversely affected.

Negative publicity involving Lomotif, its users, content, platform, management, business model or industry in general may materially and adversely harm Lomotif’s brand and, as a result, its business. We cannot assure you that Lomotif will be able to effectively manage negative publicity. We cannot guarantee that there will not be negative news in relation to Lomotif as well as its users and content on its platform. The dissemination of such news to the public may have an adverse effect on Lomotif’s reputation or brand image. Lomotif may have to incur significant expenses in order to remedy the effects of these negative reports, which may materially and adversely affect its results of operations.

If Lomotif is unable to attract, train and retain qualified personnel or if the efforts of Lomotif’s management and other key personnel do not continue as expected, its business may be materially and adversely affected.

Lomotif’s success depends largely upon the continued services of its key executives including its founder and Chief Executive Officer, Paul Yang. Lomotif’s future success also depends, to a significant extent, on its ability to attract, train and retain qualified personnel, particularly management, technical and marketing personnel with expertise in the internet industry; inability to do so may materially and adversely affect its business. Since the internet industry is characterized by high demand and intense competition for talent, we cannot assure you that Lomotif will be able to attract or retain qualified staff or other highly skilled employees. As Lomotif is relatively young, its ability to train and integrate new employees into its operations may not meet the growing demands of its business which may materially and adversely affect Lomotif’s ability to grow its business, which may affect its results of operations.

If Lomotif’s goodwill or intangible assets become impaired, we may be required to record a significant charge to earnings.

Goodwill is a significant asset on Lomotif’s balance sheet. Under U.S. generally accepted accounting principles, or GAAP, we review our intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Goodwill is required to be tested for impairment at least annually. As of September 30, 2021, we had recorded a total of $120,320,054 of goodwill and intangible assets, net related to our acquisition of Lomotif. An adverse change in market conditions, particularly if such change has the effect of changing one of our critical assumptions or estimates, could result in a change to the estimation of fair value that could result in an impairment charge to our goodwill or intangible assets.

Lomotif’s business is subject to a variety of laws, regulations, rules, policies and other obligations, which most notably include those related to data privacy and protection. Any violation of the law or regulations governing Lomotif’s operations, including those related to losses or unauthorized access to or releases of confidential information or personal data could subject Lomotif to significant reputational, financial, legal and operational consequences.

Lomotif’s business requires it to collect, use, store and otherwise process confidential information, including, among other things, personally identifiable information, or PII, with respect to users and employees. Lomotif is subject to laws, and regulations, and additional laws and regulations as Lomotif’s global expansion evolves, relating to the collection, use, retention, security, transfer or otherwise processing of PII. In many cases, these laws and regulations not only apply to third-party transactions, but also may restrict transfers of PII from Lomotif to us or from us or Lomotif to our subsidiaries. Several jurisdictions have passed laws in this area, and other jurisdictions are considering imposing additional and possibly more stringent restrictions. These laws continue to develop and may vary from jurisdiction to jurisdiction.

Complying with emerging and changing international requirements may cause Lomotif to incur substantial costs or require Lomotif to change its business practices. Non-compliance could result in significant penalties or legal liability as well as reputational harm. Data protection, privacy, and other laws and regulations, including those in Europe and the U.S., may impose varying obligations. Regulatory authorities around the world are considering a number of legislative and regulatory proposals concerning data protection. In addition, the interpretation and application of consumer and data protection laws are often uncertain. It is possible that these laws may be interpreted and applied in a manner that is inconsistent with Lomotif’s data practices. These legislative and regulatory proposals, if adopted, and such interpretations could, in addition to the possibility of fines and reputational harm, result in an order requiring Lomotif to change it data practices, which could have an adverse effect on its business and results of operations. Complying with these various laws could cause Lomotif to incur substantial costs or require Lomotif to change its business practices in a manner adverse to the business.

Although Lomotif’s operations in Europe are currently limited, recent legal developments have created compliance uncertainty regarding the processing of personal data that might nonetheless affect it. The General Data Protection Regulation, or GDPR, which came into application in the European Union, or EU, on May 25, 2018, applies to all of Lomotif’s activities conducted from an establishment in the EU or related to any products and services that Lomotif offers to EU users. The GDPR creates significant new requirements regarding the protection of personal data and significantly increases the financial penalties for noncompliance. Lomotif may be considered in violation of the GDPR and thus be required to adopt additional measures in the future. If Lomotif fails to comply with the requirements stipulated by the GDPR in a timely manner, or at all, Lomotif may be subject to significant penalties and fines, which may in turn adversely affect its business, reputation, financial condition and operating results. In addition to the new requirements imposed by the GDPR, the privacy requirements and expectations created in the EU by the GDPR are stricter than certain other regions. These requirements include rules restricting the flow of data across borders. These restrictions may cause companies to localize data and may otherwise impact the use of Lomotif’s services.

Additionally, California recently enacted legislation that has been dubbed the first “GDPR-like” law in the U.S. Known as the California Consumer Privacy Act, or CCPA, it creates new individual privacy rights for consumers (as that word is broadly defined in the law) and places increased privacy and security obligations on entities handling personal data of consumers or households. The CCPA, which went into effect on January 1, 2020, requires covered companies to provide new disclosures to California consumers, and provides such consumers new ways to opt-out of certain sales of personal information. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. The CCPA may increase Lomotif’s compliance costs and potential liability. Some observers have noted that the CCPA could mark the beginning of a trend toward more stringent privacy legislation in the U.S., which could increase Lomotif’s potential liability and adversely affect its business.

Lomotif faces risks and uncertainties arising from laws, regulations, rules and the political and economic climate in the jurisdictions across the globe within which it does business, including, without limitation, the U.S., Brazil, India, Russia and Singapore.

Failure to comply with such applicable laws, regulations and rules may subject Lomotif’s global operations to strict scrutiny by local authorities, which in turn may materially and adversely affect Lomotif’s globalized operations. As Lomotif expands operations in additional emerging markets and regions, Lomotif may have to adapt its business models or operations to the local markets due to various legal requirements and market conditions. Lomotif’s international operations and expansion efforts may result in increased costs and are subject to various risks, including difficulties in obtaining licenses, permits or other applicable governmental authorizations, content control from local authorities, uncertain enforcement of intellectual property rights, potential claims of intellectual property infringement, the complexity of compliance with laws and regulations and cultural differences.

Compliance with applicable laws, regulations and rules related to matters that are central to Lomotif’s business, including those related to streaming services, content restrictions, data privacy, virtual items, anti-corruption laws, anti-money laundering and the protection of minors, increase the costs and risk exposure of doing business in multiple jurisdictions across the globe. In some cases, compliance with the laws and regulations of one country could violate the laws and regulations of another country. As Lomotif’s globalized operations evolve, we cannot assure you that Lomotif will be able to fully comply with the legal requirements of each jurisdiction and successfully adapt its business models to local market conditions. Due to the complexity involved in Lomotif’s global business expansion, we cannot assure you that Lomotif is in compliance with all local laws or regulations, including license requirements, or that Lomotif’s licenses will be successfully renewed or expanded to cover all of its areas of operations.

Recent Sales of Unregistered Securities; Uses of Proceeds from Registered Securities

In connection with the foregoing, the Company relied upon the exemptions from registration provided by Rule 701 and Section 4(a)(2) under the Securities Exchange Act of 1933, as amended:

On January 5, 2021, the Company issued 750,000 shares of common stock valued at $1,125,000 as per the terms of the Platform License Agreement between the Company and Honey Badger Media, LLC dated November 10, 2020.

On January 5, 2021, the Company issued 150,000 shares of common stock valued at $225,000 under the Company’s 2020 Omnibus Plan to a consultant for services rendered on behalf of the Company.

On January 11, 2021, the Company issued 100,000 shares of common stock valued at $150,000 to a consultant for services rendered on behalf of the Company.

On January 19, 2021, the Company issued 200,000 shares of common stock valued at $300,000 for the partial exercise of the warrant issued in connection with the Greentree financing.

On January 20, 2021, the Company issued 27,415 shares of common stock valued at $41,123 to Jefferson Street Capital, LLC in satisfaction of $740,000 principal against a note issued on April 7, 2020.

On January 21, 2021, the Company issued 58,000 shares of common stock valued at $87,000 to a consultant for services rendered on behalf of the Company.

On January 21, 2021, the Company issued 350,000 shares of common stock valued at $525,000 for the partial exercise of the warrant issued in connection with the Greentree financing.

On January 22, 2021, the Company issued 51,129 shares of common stock valued at $76,694 for the exercise of the placement agent warrant issued in connection with the Greentree financing.

On January 22, 2021, the Company issued 67,744 shares of common stock valued at $101,616 for the exercise of the placement agent warrant issued in connection with the Greentree financing.

On January 22, 2021, the Company issued 20,358 shares of common stock valued at $30,537 for the exercise of the placement agent warrant issued in connection with the Greentree financing.

On January 22, 2021, the Company issued 50,000 shares of common stock valued at $75,000 for the exercise of a warrant.

On February 1, 2021, the Company issued 27,415 shares of common stock valued at $27,515 to Jefferson Street Capital, LLC in satisfaction of $26,766 principal against a note issued on April 7, 2020.

On February 2, 2021, the Company issued 100,000 shares of common stock valued at $319,000 for settlement of investment banking services.

On February 2, 2021, the Company issued 209 shares of common stock for a cashless exercise of a warrant.

On February 4, 2021, the Company issued 243,483 shares of common stock valued at $486,966 as true up shares in connection with the Greentree financing.

On February 4, 2021, the Company issued 25,000 shares of common stock valued at $40,750 as incentive shares for a Note Agreement dated November 2, 2020.

On February 4, 2021, the Company issued 25,000 shares of common stock valued at $31,250 to a consultant for services rendered on behalf of the Company.

On February 4, 2021, the Company issued 255,000 shares of common stock valued at $351,900 to certain employees for services rendered on behalf of the Company.

On February 4, 2021, the Company issued 210,000 shares of common stock valued at $287,700 to Directors of the Company’s Board of Directors for services rendered.

On February 4, 2021, the Company issued 150,000 shares of common stock valued at $205,500 to a consultant for services rendered on behalf of the Company.

On February 18, 2021, the Company issued 13,705 shares of common stock valued at $52,764 to certain employees for services rendered on behalf of the Company.

On February 18, 2021, the Company issued 25,000 shares of common stock valued at $50,000 for the exercise of a warrant.

On February 19, 2021, the Company issued 25,000 shares of common stock valued at $99,750 for the extended use of a trademark.

On February 23, 2021, the Company issued 25,000 shares of common stock valued at $68,500 for expenses related to a joint venture.

On February 23, 2021, the Company issued 60,000 shares of common stock valued at $231,000 to the Company’s counsel for services rendered on behalf of the Company.

On February 23, 2021, the Company issued 450,000 shares of common stock valued at $792,000 to certain employees as per the terms of their employment agreements.

On March 2, 2021, the Company issued 1,505,502 shares of common stock valued at $3,011,004 to a noteholder for conversion against a convertible note.

On March 2, 2021, the Company issued 150,000 shares of common stock valued at $187,500 to a consultant for services rendered on behalf of the Company.

On March 2, 2021, the Company issued 16,667 shares of common stock valued at $20,000 to a director in satisfaction of compensation due for services as a director.

On March 2, 2021, the Company issued 79,167 shares of common stock valued at $95,000 to a director in satisfaction of compensation due for services as a director.

On March 2, 2021, the Company issued 83,333 shares of common stock valued at $100,000 to a director in satisfaction of compensation due for services as a director.

On March 2, 2021, the Company issued 75,000 shares of common stock valued at $90,000 to a director in satisfaction of compensation due for services as a director.

On March 2, 2021, the Company issued 5,000 shares of common stock valued at $7,850 to a noteholder as additional incentive shares as per terms of an amendment.

On March 2, 2021, the Company issued 20,000 shares of common stock valued at $26,600 to a noteholder as additional incentive shares as per terms of an amendment.

On March 2, 2021, the Company issued 10,000 shares of common stock valued at $13,900 to a noteholder as additional incentive shares as per terms of an amendment.

On March 2, 2021, the Company issued 30,000 shares of common stock valued at $40,800 to an employee for services rendered on behalf of the Company.

On March 2, 2021, the Company issued 50,000 shares of common stock valued at $68,000 to an employee for services rendered on behalf of the Company.

On March 12, 2021 the Company issued 100,167 shares of common stock valued at $200,334 to a noteholder for conversion against a convertible note.

On March 18, 2021 the Company issued 150,425 shares of common stock valued at $300,850 to a noteholder for conversion against a convertible note.

On March 19, 2021 the Company issued 250,750 shares of common stock valued at $501,500 to a noteholder for conversion against a convertible note.

On March 19, 2021 the Company issued 501,750 shares of common stock valued at $1,003,500 to a noteholder for conversion against a convertible note.

On March 19, 2021 the Company issued 1,003,667 shares of common stock valued at $2,007,334 to a noteholder for conversion against a convertible note.

On March 26, 2021, the Company issued 96,000 shares of common stock valued at $192,000 upon partial exercise of a warrant issued to a placement agent.

On April 7, 2021, the Company issued 150,000 shares of common stock valued at $382,500 for consulting services as per the Consulting Agreements entered into on March 31, 2021.

On April 7, 2021, the Company issued 525,541 shares of common stock valued at $924,952 to an employee as per the terms of an employment agreement.

On April 7, 2021, the Company issued 475,541 shares of common stock valued at $836,794 to an employee as per the terms of an employment agreement.

On April 7, 2021, the Company issued 597,273 shares of common stock valued at $1,051,200 to an employee as per the terms of an employment agreement.

On May 19, 2021, the Company issued 501,250 shares of common stock to a noteholder in satisfaction of $1,000,000 principal and $2,500 in accrued interest.

During May and June 2021, the Company issued a total of 13,070,000 shares of common stock valued at $26,140,000 upon exercise of a warrant.

On June 7, 2021, the Company issued a total of 10,000 shares of common stock valued at $44,100 as compensation for inventor advisory services for Edison Nation, LLC.

On June 7, 2021, the Company issued 384,000 shares of common stock valued at $768,000 upon exercise of a warrant.

On June 9, 2021, the Company issued 1,930,000 shares of common stock valued at $3,860,000 upon exercise of a warrant.

On June 9, 2021, the Company issued 1,200,000 shares of common stock valued at $4,466,400 upon exercise of a warrant.

On June 9, 2021, the Company issued a total of 150,000 shares of common stock valued at $382,500 for consulting services.

On June 9, 2021, the Company issued a total of 63,577 shares of common stock valued at $151,987 for the conversion of debt assumed as per the terms of the Asset Contribution Agreement with Emmersive Entertainment, Inc.

On June 9, 2021, the Company issued 10,000 shares of common stock valued at $20,000 upon exercise of a warrant.

On June 9, 2021, the Company issued 1,500,000 shares of common stock valued at $3,300,000 upon exercise of a warrant.

On June 10, 2021, the Company issued 3,000,000 shares of common stock valued at $11,166,000 upon exercise of a warrant.

On June 11, 2021, the Company issued 3,500,000 shares of common stock valued at $13,027,000 upon exercise of a warrant.

On June 11, 2021, the Company issued 100,000 shares of common stock valued at $246,000 for consulting services.

On June 15, 2021, the Company issued 2,368,188 shares of common stock valued at $8,814,396 upon exercise of a warrant.

On June 15, 2021, the Company issued 2,868,188 shares of common stock valued at $10,675,396 upon exercise of a warrant.

On June 16, 2021, the Company issued 1,000,000 shares of common stock valued at $3,722,000 upon exercise of a warrant.

On June 18, 2021, the Company issued 1,400,000 shares of common stock valued at $5,210,800 upon exercise of a warrant.

On June 21, 2021, the Company issued 1,000,000 shares of common stock valued at $3,722,000 upon exercise of a warrant.

On June 30, 2021, the Company issued a total of 41,272 shares of common stock valued at $127,943 for consulting services.

On July 1, 2021, the Company issued a total of 30,000 shares valued at $94,800 to an employee for severance.

On July 30, 2021, the Company issued 1,007,194 shares of common stock valued at $2,799,999 as per the terms of the Securities Purchase Agreement.

On August 19, 2021, the Company issued 4,600,000 shares of common stock valued at $17,121,200 upon exercise of a warrant.

On August 30, 2021, the Company issued 1,955,546 shares of common stock valued at $6,453,302 upon exercise of a warrant.

On August 31, 2021, the Company issued 200,000 shares of common stock valued at $505,500 for consulting services.

On August 31, 2021, the Company issued 1,800,000 shares of common stock valued at $6,334,200 upon exercise of a warrant.

On September 1, 2021, the Company issued 24,000 shares of common stock valued at $120,000 to a noteholder for conversion against a convertible note.

On September 2, 2021, the Company issued 6,900,000 shares of common stock valued at $22,080,000 upon exercise of a warrant.

On September 2, 2021, the Company issued 594,560 shares of common stock valued at $1,951,952 upon exercise of a warrant.

On September 3, 2021, the Company issued 1,500,000 shares of common stock valued at $4,800,000 upon exercise of a warrant.

On September 3, 2021, the Company issued 2,063,132 shares of common stock valued at $10,000,000 to a noteholder for conversion against a convertible note.

On September 7, 2021, the Company issued 575,000 shares of common stock valued at $1,178,750 to a noteholder for conversion against a convertible note.

On September 10, 2021, the Company issued 3,100,000 shares of common stock valued at $10,230,000 upon exercise of a warrant.

On September 13, 2021, the Company issued 5,500,000 shares of common stock valued at $18,535,000 to a noteholder as per terms of the Side Agreement.

On September 14, 2021, the Company issued 5,331,250 shares of common stock valued at $17,060,000 upon exercise of a warrant.

On September 14, 2021, the Company issued 445,786 shares of common stock valued at $1,659,215 upon exercise of a warrant.

On September 15, 2021, the Company issued 1,500,000 shares of common stock valued at $4,866,125 upon exercise of a warrant.

On September 15, 2021, the Company issued 225,000 shares of common stock valued at $1,833,750 upon the terms of the Settlement Agreement.

On September 20, 2021, the Company issued 7,742,672 shares of common stock valued at $22,067,818 upon exercise of a warrant.

On September 20, 2021, the Company issued 5,400,000 shares of common stock valued at $14,337,000 upon exercise of a warrant.

On September 20, 2021, the Company issued 2,342,672 shares of common stock valued at $7,730,818 upon exercise of a warrant.

On September 22, 2021, the Company issued 2,000,000 shares of common stock valued at $5,310,000 upon exercise of a warrant.

On October 8, 2021, the Company issued 56,250 shares of common stock valued at $231,188 for consulting services related to EVNT Platform, LLC.

On October 19, 2021, the Company issued 36,000 shares of common stock valued at $180,000 to a noteholder for conversion against a convertible note.

On October 19, 2021, the Company issued 1,000,000 shares of common stock valued at $2,100,000 to the preferred shareholders of EVNT Platform, LLC for conversion against the preferred shares into common shares of the Company.

On October 19, 2021, the Company issued 90,000 shares of common stock valued at $369,450 for consulting services related to EVNT Platform, LLC.

On October 19, 2021, the Company issued 3,561,710 shares of common stock valued at $19,018,108 for services and severances to employees.

On October 19, 2021, the Company issued 1,515,000 shares of common stock valued at $8,678,100 for services and severances to directors.

On October 19, 2021, the Company issued 270,000 shares of common stock valued at $1,441,800 for services related to corporate legal and accounting.

On October 19, 2021, the Company issued 200,000 shares of common stock valued at $597,000 for contract settlement related to corporate legal and operations agreements.

On October 26, 2021, the Company issued 7,222,804 shares of common stock valued at $29,479,745 upon exercise of a warrant.

On October 27, 2021, the Company issued 1,007,194 shares of common stock valued at $2,800,000 upon exercise of a warrant.

On November 8, 2021, the Company issued 62,000 shares of common stock valued at $164,610 upon exercise of a warrant.

On November 9, 2021, the Company issued 1,750,000 shares of common stock valued at $7,000,000 to a noteholder for conversion against a convertible note.

On November 12, 2021, the Company issued 12,000,000 shares of common stock valued at $31,860,000 upon exercise of a warrant.

On November 15, 2021, the Company issued 1,291,000 shares of common stock valued at $3,427,605 upon exercise of a warrant.

Exhibit

Incorporated By Reference to

Filed

Incorporated By Reference to

Filed

Number

Description

Form

Exhibit

Filing Date

Herewith

Description

Form

Exhibit

Filing Date

Herewith

3.1

Articles of Merger, filed with the Secretary of State of Nevada effective September 7, 2018

8-K

3.1

September 12, 2018

Articles of Merger, filed with the Secretary of State of Nevada effective September 7, 2018

8-K

3.1

September 12, 2018

3.2

Second Amended and Restated Bylaws of Edison Nation, Inc.

8-K

3.2

September 12, 2018

Second Amended and Restated Bylaws of Edison Nation, Inc.

8-K

3.2

September 12, 2018

3.3

Second Amended and Restated Articles of Incorporation of Edison Nation, Inc.

8-K

3.1

March 26, 2020

Second Amended and Restated Articles of Incorporation of Edison Nation, Inc.

8-K

3.1

March 26, 2020

3.4

Articles of Incorporation Cryptyde, Inc.

8-K

10.1

October 6, 2021

10.5+

Amended and Restated Edison Nation, Inc. Omnibus Incentive Plan

8-K

3.3

September 12, 2018

Amended and Restated Edison Nation, Inc. Omnibus Incentive Plan

8-K

3.3

September 12, 2018

10.21

10% Senior Secured Note with 32 Entertainment LLC, dated December 4, 2019

S-1

10.26

February 12, 2020

10% Senior Secured Note with 32 Entertainment LLC, dated December 4, 2019

S-1

10.26

February 12, 2020

10.22

Common Stock Purchase Warrant with 32 Entertainment LLC, dated December 4, 2019

S-1

10.27

February 12, 2020

Common Stock Purchase Warrant with 32 Entertainment LLC, dated December 4, 2019

S-1

10.27

February 12, 2020

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Nevada		82-2199200
(State or Other Jurisdiction		(I.R.S. Employer
of Incorporation or Organization)		Identification No.)

~~1 West Broad~~6 North Main Street, ~~Suite 1004~~
~~Bethlehem~~Fairport, ~~Pennsylvania~~NY		~~18018~~14450
(Address of Principal Executive Offices)		(Zip Code)

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller Reporting Company ☒
	Emerging Growth Company ☒

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.001 par value per share		BBIG		Nasdaq

		Page Number

PART I		4
Item 1.	Financial Statements (Unaudited)	4
	Condensed Consolidated Balance Sheets as of ~~June~~September 30, 2021 (Unaudited) and December 31, 2020	5
	Condensed Consolidated Statements of Operations for the three and ~~six~~nine months ended ~~June~~September 30, 2021 and 2020 (Unaudited)	6
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and ~~six~~nine months ended ~~June~~September 30, 2021 and 2020 (Unaudited)	7
	Condensed Consolidated Statements of Cash Flows for the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020 (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3437
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5551
Item 4.	Controls and Procedures	5652

PART II			5854
Item 1.	Legal Proceedings	5854
Item 1A.	Risk Factors	5854
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5865
Item 3.	Defaults Upon Senior Securities	6068
Item 4.	Mine Safety Disclosures	6068
Item 5.	Other Information	6068
Item 6.	Exhibits	6068

	Signatures	7633

	Page Number

Condensed Consolidated Balance Sheets as of ~~June~~September 30, 2021 (Unaudited) and December 31, 2020	5
Condensed Consolidated Statements of Operations for the three and ~~six~~nine months ended ~~June~~September 30, 2021 and 2020 (Unaudited)	6
Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and ~~six~~nine months ended ~~June~~September 30, 2021 and 2020 (Unaudited)	7
Condensed Consolidated Statements of Cash Flows for the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020 (Unaudited)	8
Notes to Condensed Consolidated Financial Statements	9

	●	Our ability to effectively execute our business ~~plan;~~plans including our plan to disrupt the media and entertainment industry;

	●	Our ability to manage our expansion, growth and operating expenses;

	●	Our ability to protect our brands and reputation;

	●	Our ability to obtain adequate financing to support our development plans;

	●	Our ability to repay our debts;

	●	Our ability to rely on third-party suppliers, ~~outside of the United States;~~content contributors, developers, and other business partners;

	●	Our ability to evaluate and measure our business, prospects and performance metrics;

	●	Our ability to compete and succeed in a highly competitive and evolving industry;

	●	Our ability to respond and adapt to changes in technology and customer behavior;

	●	Risks in connection with completed or potential acquisitions, dispositions and other strategic growth opportunities and initiatives;

	●	Risks related to the anticipated timing of the closing of any potential acquisitions;

	●	Risks related to the integration with regards to potential or completed acquisitions;

	●	Risks related to the integration with regards to potential or completed acquisitions and the achievement of our expected benefits with our acquisitions and investments, including, but not limited to, our investment in Lomotif Private Limited (“Lomotif”) through a joint venture of Vinco Ventures and ZASH Global Media and Entertainment Corporation (“ZASH”);

	●	Various risks related to health epidemics, pandemics and similar outbreaks, such as the coronavirus disease 2019 (“COVID-19”) pandemic, which may have material adverse effects on our business, financial position, results of operations and/or cash flows.

	June 30, 2021			December 31, 2020
		(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	74,756,573		$	249,356
Accounts receivable, net		2,907,002			1,382,163
Short-term investments		895,600			1,018,000
Inventory		852,147			1,127,725
Prepaid expenses and other current assets		1,209,435			522,259
Current assets of discontinued operations		-			1,042,680
Total current assets		80,620,757			5,342,183
Property and equipment, net		1,033,810			1,010,801
Right of use assets, net		104,707			153,034
Loan receivable		5,000,000			-
Equity method investment		12,000,000			-
Intangible assets, net		16,533,373			9,798,813
Goodwill		5,983,852			5,983,852
Non-current assets of discontinued operations		-			5,739,524
Total assets	$	121,276,499		$	28,028,207

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	1,791,982		$	3,618,339
Accrued expenses and other current liabilities		1,284,168			2,101,610
Deferred revenues		131,578			152,040
Current portion of operating leases liabilities		99,293			96,777
Income tax payable		27,643			27,643
Line of credit, net of debt issuance costs of $0 and $15,573, respectively		1,133,652			1,500,953
Current portion of convertible notes payable, net of debt issuance costs of $6,666,667 and $0, respectively		3,333,333			577,260
Current portion of notes payable, net of debt issuance costs of $0 and $212,848, respectively		15,185			1,301,212
Current portion of notes payable – related parties		876,500			1,389,923
Due to related party		15,401			32,452
Current liabilities of discontinued operations		120,729			487,454
Total current liabilities		8,829,464			11,285,663
Operating leases liabilities –net of current portion		8,483			58,713
Convertible notes payable – related parties, net of current portion, net of debt discount of $172,984 and $366,666, respectively		267,183			1,161,495
Notes payable, net of current portion		19,966			595,879
Notes payable – related parties, net of current portion		-			1,403,756
Warrant liability		139,695,115			-
Total liabilities	$	148,820,211		$	14,505,506
Commitments and Contingencies (Note 12)		-			-

Stockholders’ equity
Preferred stock, $0.001 par value, 30,000,000 shares authorized as of June 30, 2021 and December 31, 2020, respectively	$	-		$	-
Series B Preferred Stock, $0.001 par value, 1,000,000 shares authorized; 0 and 764,618 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively		-			765
Preferred stock., value		-			-
Common stock, $0.001 par value, 250,000,000 shares authorized 59,927,241 and 14,471,403 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively		59,927			14,471
Additional paid-in-capital		244,026,879			39,050,260
Accumulated deficit		(269,787,198	)		(23,648,898	)
Total stockholders’ (deficit) equity attributable to Vinco Ventures, Inc.		(25,700,392	)		15,416,598
Noncontrolling interests		(1,843,320	)		(1,893,897	)
Total stockholders’ equity		(27,543,712	)		13,522,701
Total liabilities and stockholders’ equity	$	121,276,499		$	28,028,207

	September 30, 2021			December 31, 2020
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	49,937,549		$	249,356
Restricted cash		100,000,000			-
Short-term investments		282,000			1,018,000
Accounts receivable, net		1,901,182			1,382,163
Inventory		789,727			1,127,725
Loans receivable
Intangible assets, net
Prepaid expenses and other current assets		3,855,618			522,259
Loan held for investment		18,150,000			-
Current assets of discontinued operations		-			1,042,680
Total current assets		174,916,076			5,342,183
Property and equipment, net		972,151			1,010,801
Right of use assets, net		80,544			153,034
Intangible assets, net		154,962,061			9,798,813
Goodwill		5,983,852			5,983,852
Non-current assets of discontinued operations		-			5,739,524
Total assets	$	336,914,684		$	28,028,207

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	5,587,010		$	3,618,339
Accrued expenses and other current liabilities		3,040,564			2,101,610
Deferred revenues		64,243			152,040
Current portion of operating leases liabilities		83,408			96,777
Income tax payable		27,643			27,643
Line of credit, net of debt issuance costs of $0 and $15,573, respectively		-			1,500,953
Current portion of convertible notes payable, net of debt issuance costs of $91,518,515 and $0, respectively		28,481,485			577,260
Current portion of notes payable, net of debt issuance costs of $0 and $212,848, respectively		15,357			1,301,212
Current portion of notes payable – related parties		112,835			1,389,923
Notes payable, current		-			-
Due to related party		15,401			32,452
Current liabilities of discontinued operations		-			487,454
Total current liabilities		37,427,946			11,285,663
Operating leases liabilities –net of current portion		-			58,713
Convertible notes payable – related parties, net of current portion, net of debt discount of $95,089 and $366,666, respectively		207,183			1,161,495
Notes payable, net of current portion		166,061			595,879
Notes payable – related parties, net of current portion		2,500,000			1,403,756
Warrant liability		468,612,700			-

Total liabilities	$	508,913,890		$	14,505,506
Commitments and Contingencies (Note 12)					-

Stockholders’ equity
Preferred stock, $0.001 par value, 30,000,000 shares authorized as of September 30, 2021 and December 31, 2020, respectively	$	-		$	-
Series B Preferred Stock, $0.001 par value, 1,000,000 shares authorized; 0 and 764,618 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively		-			765
Common stock, $0.001 par value, 250,000,000 shares authorized 107,021,381 and 14,471,403 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively		107,021			14,471
Additional paid-in-capital		617,952,342			39,050,260
Accumulated deficit		(812,250,328	)		(23,648,898	)
Total stockholders’ (deficit) equity attributable to Vinco Ventures, Inc.		(194,190,965	)		15,416,598
Noncontrolling interests		22,191,759			(1,893,897	)
Total stockholders’ equity		(171,999,206	)		13,522,701
Total liabilities and stockholders’ equity	$	336,914,684		$	28,028,207


	For the nine months ended September 30, 2021 and 2020:
	Preferred stock						Common Stock						Additional Paid-in			Accumulated			Noncontrolling			Total Stockholders’
	Shares			Amount			Shares			Amount			Capital			Deficit			Interest			Equity

Balance, January 1, 2021		764,618			765			14,471,403		$	14,471		$	39,050,260		$	(23,648,898	)	$	(1,893,897	)	$	13,522,701
Issuance of common stock to noteholders		-			-			303,483			304			422,368			-			-			422,672
Return of common stock from noteholder held as collateral
Return of common stock from noteholder held as collateral, shares
Issuance of common stock for divestiture
Issuance of common stock for divestiture, shares
Issuance of warrants- noteholders
Divestiture of Cloud B
Distributions
Issuance of common stock cancellation of non-voting membership interest in Edison Nation Holdings, LLC
Issuance of common stock cancellation of non-voting membership interest in Edison Nation Holdings, LLC, shares
Conversion option
Conversion option, shares
Issuance of common stock to investors		-			-			2,507,194			2,507			6,052,493			-			-			6,055,000
Issuance of common stock to consultants		-			-			1,819,272			1,819			3,198,375			-			-			3,200,194
Issuance of common stock to employees		-			-			2,891,227			2,891			3,289,299			-			-			3,292,190
Issuance of common stock upon exercise of warrants		-			-			69,212,800			69,213			180,272,201			-			-			180,341,414
Offering costs – exercise of warrants		-			-			-			-			(12,380,315	)		-			-			(12,380,315	)
Conversion under notes payable		-			-			11,551,384			11,551			32,418,206			-			-			32,429,757
Exercise of warrant liabilities		-			-			-			-			338,020,680			-			-			338,020,680
Stock-based compensation								-			-			10,077,275			-			479,161			10,556,436
Issuance of common stock – acquisitions		-			-			3,500,000			3,500			10,131,500			-			-			10,135,000
Conversion of preferred stock to common		(764,618	)		(765	)		764,618			765			-			-			-			-
Shares reserved for future issuance of common stock as consideration for the Emmersive asset acquisition		-			-			-			-			7,400,000			-			-			7,400,000
Noncontrolling interest																				27,441,251			27,441,251
Net loss		-			-			-			-			-			(788,601,430	)		(3,834,756	)		(792,436,186	)
Balance, September 30, 2021 (Unaudited)		-		$	-			107,021,381		$	107,021		$	617,952,342		$	(812,250,328	)	$	22,191,759		$	(171,999,206	)

Balance, January 1, 2020		-			-			8,015,756		$	8,016		$	26,259,576		$	(18,495,462	)	$	(317,698	)	$	7,454,432
Issuance of common stock to note holders		-			-			1,202,666			1,202			2,291,662			-			-			2,292,864
Return of common stock from noteholder held as collateral		-			-			(153,005	)		(153	)		153			-			-			-
Issuance of common stock for divestiture		-			-			150,000			150			404,850			-			-			405,000
Issuance of common stock to consultants		-			-			1,237,874			1,238			1,754,142			-			-			1,755,380
Stock-based compensation		-			-			-			-			681,306			-			-			681,306
Issuance of common stock to employees and directors		-			-			150,000			150			319,350			-			-			319,500
Conversion option		-			-			990,000			990			(990	)		-			-			-
Issuance of common stock for Global Clean Solutions, LLC acquisition		-			-			300,000			300			698,700			-			-			699,000
Issuance of warrants- noteholders		-			-			-			-			1,018,953			-			-			1,018,953
Divestiture of Cloud B		-			-			-			-			-			-			(26,392	)		(26,392	)
Distributions		-			-			-			-			-			-			(770,931	)		(770,931	)
Net loss		-			-			-			-			-			(3,188,932	)		(15,198	)		(3,204,130	)
Balance, September 30, 2020 (Unaudited)		-		$	-			11,893,291		$	11,893		$	33,427,702		$	(21,684,394	)	$	(1,130,219	)	$	10,624,982


	For the six months ended June 30, 2021 and 2020:
	Preferred stock						Common Stock						Additional Paid-in			Accumulated			Noncontrolling			Total Stockholders’
	Shares			Amount			Shares			Amount			Capital			Deficit			Interest			Equity

Balance, January 1, 2021		764,618			765			14,471,403		$	14,471		$	39,050,260		$	(23,648,898	)	$	(1,893,897	)	$	13,522,701
Issuance of common stock to noteholders		-			-			303,483			304			422,368			-			-			422,672
Returned common stock from note holder
Returned common stock from note holder, shares
Issuance of common stock to investors		-			-			1,500,000			1,500			3,253,500			-			-			3,255,000
Offering costs
Issuance of common stock to noteholders
Issuance of common stock for divestiture, shares
Returned common stock from noteholder
Returned common stock from noteholder, shares
Issuance of common stock to consultants		-			-			1,394,272			1,394			2,034,941			-			-			2,036,335
Issuance of warrants to noteholders and beneficial conversion option
Issuance of common stock to employees		-			-			2,861,227			2,861			3,289,329			-			-			3,292,190
Issuance of common stock upon exercise of warrants		-			-			31,742,986			31,743			87,753,676			-			-			87,785,419
Offering costs – exercise of warrants		-			-			-			-			(7,379,064	)		-			-			(7,379,064	)
Conversion under notes payable		-			-			6,139,252			6,139			12,242,368			-			-			12,248,507
Exercise of warrant liabilities		-			-			-			-			89,654,047			-			-			89,654,047
Stock-based compensation								-			-			5,053,704			-			-			5,053,704
Issuance of common stock acquisitions		-			-			750,000			750			1,251,750			-			-			1,252,500
Conversion of preferred stock to common		(764,618	)		(765	)		764,618			765			-			-			-			-
Shares reserved for future issuance of common stock as consideration for the Emmersive asset acquisition		-			-			-			-			7,400,000			-			-			7,400,000
Issuance of common stock for Global Clean Solutions, LLC acquisition
Issuance of common stock for Global Clean Solutions, LLC acquisition, shares
Divestiture of Cloud B
Common stock reserved for future issuance to Emmersive sellers
Distributions
Net income		-			-			-			-			-			(246,138,300	)		50,577			(246,087,723	)
Balance, June 30, 2021 (Unaudited)		-		$	-			59,927,241		$	59,927		$	244,026,879		$	(269,787,198	)	$	(1,843,320	)	$	(27,543,712	)

Balance, January 1, 2020		-			-			8,015,756		$	8,016		$	26,259,576		$	(18,495,462	)	$	(317,698	)	$	7,454,432
Issuance of common stock to note holders		-			-			439,400			439			789,575			-			-			790,014
Returned common stock from noteholder		-			-			(153,005	)		(153	)		153			-			-			-
Issuance of common stock to consultants		-			-			866,250			866			561,896			-			-			562,762
Issuance of warrants to noteholders and beneficial conversion option		-			-			-			-			1,018,953			-			-			1,018,953
Divestiture of Cloud B		-			-			-			-			-			-			(26,392	)		(26,392	)
Issuance of common stock for divestiture		-			-			150,000			150			404,850			-			-			405,000
Stock-based compensation		-			-			-			-			1,068,380			-			-			1,068,380
Issuance of common stock for Global Clean Solutions, LLC acquisition		0			-			300,000			300			698,700			-			-			699,000
Distributions		-			-			-			-			-			-			(699,000	)		(699,000	)
Net (loss) income		-			-			-			-			-			(354,888	)		22,241			(332,647	)
Balance, June 30, 2020 (Unaudited)		-		$	-			9,618,401		$	9,618		$	30,802,083		$	(18,850,350	)	$	(1,020,849	)	$	10,940,502

	Fair Value Measurements as of June 30, 2021
	Level 1		Level 2		Level 3

Assets:
Short-term investments	$	895,600	$	-	$	-

Liabilities:
Warrant liability		-		-		139,695,115
Total		895,600		-		139,695,115

	Fair Value Measurements as of September 30, 2021
	Level 1		Level 2		Level 3

Assets:
Short-term investments	$	282,000	$	-	$	-

Liabilities:
Warrant liability		-		-		468,612,700
Total		282,000		-		468,612,700

	~~June 30, 2021~~
~~Cash received from buyer~~		~~2,529,565~~

~~Accounts receivable~~		~~(293,005~~	)
~~Inventory~~		~~(665,522~~	)
~~Prepaid expenses~~		~~(160,666~~	)
~~Intangible assets~~		~~(5,540,952~~	)
~~Loss on divestiture~~		~~4,130,580~~
~~Operating loss of discontinued operations~~		~~178,200~~
~~Bankruptcy costs~~		~~650,000~~
~~Loss on discontinued operations~~		~~4,958,780~~

	February 17, 2020
Accounts payable		4,005,605
Accrued Expenses		370,289
Income Tax Payable		14,473
Notes Payable		900,000
Non-Controlling Interest		26,393
Shares to be issued to Buyer		(405,000	)
Gain on divestiture	$	4,911,760

	Lomotif
Cash paid	$	92,000,000
Fair value of issued shares		8,882,500
Issuance of debt selling shareholder()		8,000,000
Fair value of conversion feature to selling shareholder*		882,500
Purchase consideration	$	109,765,000

	Lomotif
Cash and cash equivalents	$	1,238,800
Prepaid expenses and other current assets		247,458
Property and equipment		91,007
Intangible assets		143,237,848
Total assets acquired		144,815,113

Debt		5,567,794
Accounts payable		706,531
Accrued expenses and other liabilities		1,334,538
Total liabilities assumed		7,608,863
Noncontrolling interest		(27,441,250	)

Total assets acquired, net		109,765,000

	April 17, 2021

Fair value of shares reserved for future issuance	$	7,400,000
Fair value of assumed notes payable		151,987
Total		7,551,987

	April 21, 2021
Cash received from buyer		2,529,565

Accounts receivable		(293,005	)
Inventory		(665,522	)
Prepaid expenses		(160,666	)
Intangible assets		(5,540,952	)
Loss on divestiture		4,130,580
Operating loss of discontinued operations		178,200
Bankruptcy costs		803,320
Loss on discontinued operations		5,112,100

			Weight
	Estimated		Average		Gross				Net
	Useful		Useful		Carrying		Accumulated		Carrying
	Life		Life		Amount		Amortization		Amount
Finite lived intangible assets:
Customer relationships		15 years		11.9 years	$	670,000	$	137,722	$	532,278
Developed technology		7 years		6.8 years		156,172,041		5,314,266		150,857,775
Membership network		7 years		3.9 years		1,740,000		766,429		973,571
Digital media		7 years		6.1 years		1,552,500		194,063		1,358,437
Total finite lived intangible assets					$	160,134,541	$	6,412,480	$	153,722,061

Indefinite lived intangible assets:
Trademarks and tradenames		Indefinite			$	1,240,000	$	-	$	1,240,000
Total indefinite lived intangible assets					$	1,240,000	$	-	$	1,240,000
Total intangible assets					$	161,374,541	$	6,412,480	$	154,962,061

			Weighted
	Estimated		Average		Gross				Net
	Useful		Useful		Carrying		Accumulated		Carrying
	Life		Life		Amount		Amortization		Amount
Finite lived intangible assets:
Customer relationships		15 years		12.8 years	$	4,270,000	$	624,223	$	3,645,777
Developed technology		7 years		5.9 years		7,400,000		1,330,476		6,069,524
Membership network		7 years		4.7 years		1,740,000		580,000		1,160,000
Digital media		7 years		6.9 years		1,552,500		29,464		1,523,036
Total finite lived intangible assets					$	14,962,500	$	2,564,163	$	12,398,337

Indefinite lived intangible assets:
Trademarks and tradenames		Indefinite			$	3,140,000	$	-	$	3,140,000
Total indefinite lived intangible assets					$	3,140,000	$	-	$	3,140,000
Total intangible assets					$	18,102,500	$	2,564,163	$	15,538,337

For the Years Ended December 31,	Amount
2021 (excludes amortization through September 30, 2021)	$	5,586,844
2022		22,347,373
2023		22,347,373
2024		22,347,373
2025		22,135,945
Thereafter		58,957,153
Total	$	153,722,061

	Original Principal		Additional Principal		Carrying Value

	$	1,260,843	$	132,562	$	1,128,281
Note issued on February 10,2021 with a maturity date on February 9, 2023 and an annual interest rate of 3%. The principal of the note had the option to automatically convert into common stock based on the valuation at the time of a qualified financing round with accrued interest being forgone or receive a payment equal to the sum of one and a half times (1.5x) the purchase amount.	$	100,000		50,000		150,000
Total	$	100,000	$	50,000	$	150,000

	Original Principal		Unamortized Discount		Carrying Value

Note issued to Zash Global Media and Entertainment on February 23, 2021 with a maturity date on February 22, 2028 and an annual interest rate of 2%.	$	1,500,000	$	-	$	1,500,000
Note issued to Zash Global Media and Entertainment on March 30, 2021 with a maturity date on March 28, 2028 and an annual interest rate of 2%.	$	1,000,000		-		1,000,000
Total	$	2,500,000	$	-	$	2,500,000

	Warrant Shares		Exercise Price
Hudson Bay Warrant; June 4, 2021		20,270,406	$	3.300
Palladium Capital Warrant; June 4, 2021		115,800	$	3.300
Hudson Bay Warrant; July 22, 2021		32,697,548	$	2.655
Hudson Bay Series A Warrant; August 19, 2021		9,561,300	$	2.655
Hudson Bay Series B Warrant; August 19, 2021()		2,000,000	$	2.655
Palladium Capital Group Series A Warrant; August 19, 2021		1,640,000	$	3.200
Palladium Capital Group Series B Warrant; August 19, 2021()		160,000	$	2.655
Hudson Bay Series A Warrant; September 1, 2021()		12,000,000	$	9.000
Armistice Capital Series A Warrant; September 1, 2021()		5,000,000	$	9.000
CVI Investments Series A Warrant; September 1, 2021()		3,000,000	$	9.000
Hudson Bay Series B Warrant; September 1, 2021()		2,000,000	$	9.000
Palladium Capital Group Series A Warrant; September 1, 2021		1,600,000	$	2.655
Palladium Capital Group Series B Warrant; September 1, 2021()		160,000	$	9.000
Palladium Capital Group Warrant; July 22, 2021		2,615,804	$	2.655
BHP Capital Warrant; July 23, 2021		1,007,194	$	2.780

*	The Series B Warrant has effective exercise price of $0.00 as alternative cashless feature allowing for issuance of shares of common stock at 1:1 ratio of warrant shares.
**	On September 8, 2021 and September 14, 2021, Hudson Bay sold 5,000,000 and 3,000,000 of their September 1, 2021 Series A Warrants warrant shares to Armistice Capital Master Fund Ltd. And CVI Investments, Inc., respectively.

	Warrant Shares		Exercise Price
Hudson Bay Warrant; January 25, 2021		15,000,000	$	2.000
Palladium Capital Warrant; January 25, 2021		480,000	$	2.000
BHP Capital NY Warrant; January 28, 2021		1,500,000	$	2.200
Hudson Bay Warrant; February 23, 2021		18,568,188	$	3.722
Palladium Capital Warrant; February 23, 2021		1,650,346	$	3.722
Hudson Bay Warrant; May 24, 2021		13,070,000	$	3.200
Palladium Capital Warrant; May 24, 2021		1,200,000	$	3.200
BHP Capital Warrant; June 4, 2021		1,500,000	$	3.200
Hudson Bay Warrant; June 4, 2021		27,821,829	$	3.300
Palladium Capital Warrant; June 4, 2021		2,071,346	$	3.300

	Dividend Yield			Expected Volatility			Risk-free Interest Rate			Expected Life
Hudson Bay Warrant; June 4, 2021		0.00	%		131.75	%		0.28	%		2.5 years
Palladium Capital Warrant; June 4, 2021		0.00	%		131.75	%		0.28	%		2.5 years
Hudson Bay Warrant; July 22, 2021		0.00	%		131.75	%		0.28	%		2.5 years
Hudson Bay Series A Warrant; August 19, 2021		0.00	%		131.75	%		0.28	%		2.5 years
Hudson Bay Series B Warrant; August 19, 2021		0.00	%		131.75	%		0.28	%		2.5 years
Palladium Capital Group Series A Warrant; August 19, 2021		0.00	%		131.75	%		0.28	%		2.5 years
Palladium Capital Group Series B Warrant; August 19, 2021		0.00	%		131.75	%		0.28	%		2.5 years
Hudson Bay Series A Warrant; September 1, 2021		0.00	%		131.75	%		0.28	%		2.5 years
Hudson Bay Series B Warrant; September 1, 2021		0.00	%		131.75	%		0.28	%		2.5 years
Palladium Capital Group Series A Warrant; September 1, 2021		0.00	%		131.75	%		0.28	%		2.5 years
Palladium Capital Group Series B Warrant; September 1, 2021		0.00	%		131.75	%		0.28	%		2.5 years
Palladium Capital Group Warrant; July 22, 2021		0.00	%		131.75	%		0.28	%		2.5 years
BHP Capital Warrant; July 23, 2021		0.00	%		131.75	%		0.28	%		2.5 years

	Dividend Yield			Expected Volatility			Risk-free Interest Rate			Expected Life
Hudson Bay Warrant; January 25, 2021		0.00	%		109.95	%		0.13	%		2.5 years
Palladium Capital Warrant; January 25, 2021		0.00	%		109.95	%		0.13	%		2.5 years
BHP Capital NY Warrant; January 28, 2021		0.00	%		110.00	%		0.12	%		2.5 years
Hudson Bay Warrant; February 23, 2021		0.00	%		110.94	%		0.11	%		2.5 years
Palladium Capital Warrant; February 23, 2021		0.00	%		110.94	%		0.11	%		2.5 years
Hudson Bay Warrant; May 24, 2021		0.00	%		115.38	%		0.14	%		2.5 years
Palladium Capital Warrant; May 24, 2021		0.00	%		115.38	%		0.14	%		2.5 years
BHP Capital Warrant; June 4, 2021		0.00	%		117.11	%		0.16	%		2.5 years
Hudson Bay Warrant; June 4, 2021		0.00	%		117.14	%		0.16	%		2.5 years
Palladium Capital Warrant; June 4, 2021		0.00	%		117.14	%		0.16	%

	●	~~The significant growth of ecommerce (Up 32.4% in 2020 versus 2019 (eMarketer 2020));~~

	●	~~The increasing velocity of “brick and mortar” retail closures;~~

	●	Product innovation and immediate delivery gratification driving consumer desire for next-generation products with distinctive sets of features and benefits without a reliance on brand awareness and familiarity;

	●	~~The marriage of media-based entertainment and consumer goods~~

	●	~~The rapid adoption of crowdsourcing to expedite successful new product launches; and~~

	●	The opportunity to market products over the internet and television, rather than through traditional, commercial channels, to reach a much broader, higher qualified target market for brands, and products.

	●	~~Stage #1 — Preliminary Review:~~ The licensing team performs a preliminary review to ensure an invention meets the program criteria. Factors that might stall an idea from moving forward include: an invention is cost-prohibitive, has engineering challenges, and/or major players in the marketplace have already launched products like it. If none of these apply, an idea will be approved and move on to the preparation phase.
	●	~~Stage #2 — Preparation:~~ The licensing team performs a best partner review. Vinco Ventures’ retail and manufacturing contacts are assessed, and the team begins to plan which licensors would be the best fit for an idea. A gap analysis and visits the store shelves are executed to gain greater understanding of marketplace potential.
	●	~~Stage #3 — Pitching:~~ At this phase, an idea can become a “Finalist.” The licensing team begins to proactively pitch an idea to potential licensees using a proprietary presentation system. When a company expresses interest, the team proceeds into term sheets and negotiations while staying in constant contact with the prospect until the best possible deal is struck for the innovator.
	●	~~Stage #4 — Outcome:~~ In the end, the market decides what products will be successful. There are no guarantees. If for some reason Vinco Ventures is not successful in finding a licensing partner, a complete debrief is given to the Insider.

	●	~~Our branded products sold through traditional retail channels of distribution and other channels of business to business distribution;~~

	●	~~Our branded products sold through direct to consumer platforms such as the Amazon marketplace as well as portals like Walmart.com;~~

	●	~~Member idea submission and ILP program fees: $25 per submission (registered members); $20 per submission (Insider members); $100 per submission (ILP members);~~

	●	~~Licensing agents~~: We match an innovator’s intellectual property with vertical product category leaders in a licensing structure whereby the innovator can earn up to 50% of the contracted licensing fee. Product categories include kitchenware, small appliances, toys, pet care, baby products, health & beauty aids, entertainment venue merchandise, and housewares; and

	●	~~Product principals~~: We work with innovators directly, providing such innovators direct access to all of Vinco Ventures’ resources. Depending on case-by-case factors, innovators may receive a range of up to 35% - 50% of profits.

	a.	No shares in any one day more than ten percent (10%) of the average of the daily trading volume on all trading markets on which the Consideration Shares are then quoted or listed for the five trading days preceding the sale of the Consideration Shares, and;

	b.	Any permitted resales by the Stockholder shall be at the then current bid price of the Common Stock.

	Three Months Ended September 30,						Period over Period Change
	2021			2020			$			%

Revenues, net	$	2,231,986		$	2,522,141		$	(290,155	)		-11.50	%
Cost of revenues		1,531,840			1,505,234			26,606			1.77	%
Gross profit		700,146			1,016,907			(316,761	)		-31.15	%

Operating expenses:
Selling, general and administrative		25,869,419			2,617,961			23,251,458			888.15	%
Operating (loss)		(25,169,273	)		(1,601,054	)		(23,568,219	)		1,472.04	%

Other (expense) income:
Rental income		17,136			25,704			(8,568	)		-33.33	%
Interest (expense)		(27,012,312	)		(1,004,627	)		(26,007,685	)		2,588.79	%
Loss on issuance of warrants		(206,948,147	)		-			(206,948,147	)		-100.00	%
Change in fair value of warrant liability		(287,117,556	)		-			(287,117,556	)		-100.00	%
Change in fair value of short-term investment		(614,000	)		-			(614,000	)		-100.00	%
Other income		649,009			-			649,009			100.00	%
Total other (expense), net		(521,025,870	)		(978,923	)		(520,046,947	)		53,124.40	%
Loss before income taxes		(546,195,143	)		(2,579,977	)		(543,615,166	)		21,070.54	%
Income tax expense		-			-			-			-	%
Net loss from continuing operations		(546,195,143	)		(2,579,977	)		(543,615,166	)		21,070.54	%
Net income attributable to noncontrolling interests		(3,885,333	)		(37,439	)		(3,847,894	)		10,277.77	%
Net loss from continuing operations attributable to Vinco Ventures, Inc.		(542,309,810	)		(2,542,538	)		(539,767,272	)		21,229.47	%
Net income (loss) from discontinued operations		(153,320	)		(291,506	)		138,186			-47.40	%
Net (loss) income attributable to Vinco Ventures, Inc.	$	(542,463,130	)	$	(2,834,044	)	$	(539,629,086	)		19,040.96	%

	Three Months Ended June 30,						Period over Period Change
	2021			2020			$			%

Revenues, net	$	2,691,811		$	5,173,982		$	(2,482,171	)		-47.97	%
Cost of revenues		1,721,189			4,004,936			(2,283,747	)		-57.02	%
Gross profit		970,622			1,169,046			(198,424	)		-16.97	%

Operating expenses:
Selling, general and administrative		5,941,652			2,377,853			3,563,799			149.87	%
Operating (loss)		(4,971,030	)		(1,208,807	)		(3,762,223	)		-311.23	%

Other (expense) income:
Rental income		28,703			25,703			3,000			11.67	%
Interest (expense)		(2,715,481	)		(847,154	)		(1,868,327	)		-220.54	%
Loss on issuance of warrants		(133,699,181	)		-			(133,699,181	)		-100.00	%
Change in fair value of warrant liability		(37,154,989	)		-			(37,154,989	)		-100.00	%
Change in fair value of short-term investment		(52,000	)		-			(52,000	)		-100.00	%
Loss on disposal of assets and interests in joint venture		(301,645	)		-			(301,645	)		-100.00	%
Total other (expense), net		(173,894,593	)		(821,451	)		(173,073,142	)		-21,069.20	%
Loss before income taxes		(178,865,623	)		(2,030,258	)		(176,835,365	)		-8,709.99	%
Income tax expense		-			-			-			-	%
Net loss from continuing operations		(178,865,623	)		(2,030,258	)		(176,835,365	)		-8,709.99	%
Net income attributable to noncontrolling interests		22,543			22,241			5,793			26.05	%
Net loss from continuing operations attributable to Vinco Ventures, Inc.		(178,888,166	)		(2,052,499	)		(176,841,158	)		-8,615.90	%
Net income (loss) from discontinued operations		(4,780,580	)		428,119			606,319			-141.62	%
Net (loss) income attributable to Vinco Ventures, Inc.	$	(183,668,746	)	$	(1,624,380	)	$	(177,447,477	)		-10,924.01	%

	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Net income (loss) from continuing operations	$	(178,865,623	)	$	(1,602,139	)	$	(241,128,943	)	$	(332,647	)
Net income (loss) from discontinued operations		(4,780,580	)					(4,958,780	)
Interest expense, net		2,715,481			841,529			15,410,414			1,571,111
Income tax expense		-			-			-			-
Depreciation and amortization		636,082			296,108			1,081,623			612,406
EBITDA		(180,294,640	)		(464,502	)		(229,595,686	)		1,850,870
Stock-based compensation		1,306,267			268,916			10,003,769			1,588,427
Loss on issuance of warrant liability		133,699,181			-			208,855,715			-
Change in fair value of warrant liability		37,154,989			-			773,447			-
Restructuring and severance costs		-			189,009			-			431,145
Transaction and acquisition costs		723,760			-			1,428,325			82,736
Other non-recurring costs		-			-			-			40,860
Loss (gain) on divestiture		4,130,580			-			4,130,580			(4,911,760	)
Adjusted EBITDA (1)	$	(3,279,863	)	$	(6,577	)	$	(4,403,850	)	$	(917,722	)