THEMAVEN : Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-K)

The following discussion of our financial condition and results of operations
for the year ended December 31, 2018 should be read in conjunction with the
consolidated financial statements and the notes to those statements that are
included elsewhere in this Annual Report. Our discussion includes
forward-looking statements based upon current expectations that involve risks
and uncertainties, such as our plans, objectives, expectations and intentions.
Actual results and the timing of events could differ materially from those
anticipated in these forward-looking statements as a result of a number of
factors. We use words such as "anticipate", "estimate", "plan", "project",
"continuing", "ongoing", "expect", "believe", "intend", "may", "will", "should",
"could", and similar expressions to identify forward-looking statements.

Please see "Our Future Business" and "Future Liquidity" for additional important information.

Overview



We operate a best-in-class technology platform empowering premium publishers who
impact, inform, educate, and entertain. We operate the media businesses for
Sports Illustrated and TheStreet, and power more than 250 independent brands
including History, Maxim, and Biography. The Maven Platform provides digital
publishing, distribution, and monetization capabilities to our own Sports
Illustrated and TheStreet media businesses as well as to the Channel Partners.
Generally, the Channel Partners are independently owned strategic partners who
receive a share of revenue from the interaction with their content. They also
benefit from our membership marketing and management systems to further enhance
their revenue.



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

Liquidity and Capital Resources

As of December 31, 2018, our principal sources of liquidity consisted of cash of
$2,406,596, approximately $2.5 million available for borrowing under our
factoring facility with Sallyport Commercial Finance, LLC ("Sallyport"), and
anticipated additional funding under the 12% senior secured subordinated
convertible debenture (referred to herein as the "12% convertible debentures")
financing of approximately $2.1 million, which occurred in March and April 2019.
The maximum amount available to us under the factoring facility with Sallyport
was $3,500,000.



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

We have financed our working capital requirements since inception through issuances of equity securities and various debt financings. Our working capital as of December 31, 2018 and 2017 was as follows:

                                 As of December 31,
                                2018             2017
Current assets              $   9,533,342     $ 3,860,967
Current liabilities           (21,849,647 )      (416,444 )
Working (deficit) capital     (12,316,305 )     3,444,523




As of December 31, 2018, we had a working capital deficit of $12,316,305,
consisting of $9,533,342 in total current assets and $21,849,647 in total
current liabilities. Included in current assets as of December 31, 2017 was
$3,000,000 of restricted cash. The $3,000,000 of restricted cash was received
prior to December 31, 2017 and was classified as restricted cash in the December
31, 2017 balance sheet and then subsequently reclassified to cash in January
2018 upon completion of the private placement of 1.2 million shares of our
common stock. In addition, the investment was classified as an investor demand
payable in the December 31, 2017 balance sheet and then subsequently
reclassified to equity in January 2018 upon completion of this private
placement.



Our cash flows during the years ended December 31, 2018 and 2017 consisted of
the following:



                                                            Years Ended December 31,
                                                             2018              2017

Net cash used in operating activities                    $  (7,417,680 )   $ (4,194,392 )
Net cash used in investing activities                      (23,589,027 )     (2,039,599 )
Net cash provided by financing activities                   29,914,747     

9,254,946

Net (decrease) increase in cash, cash equivalents, and
restricted cash                                          $  (1,091,960 )   $  3,020,955
Cash, cash equivalents, and restricted cash, end of
year                                                     $   2,527,289     $  3,619,249

For the year ended December 31, 2018, net cash used in operating activities was
$7,417,680, consisting primarily of approximately $7,080,000 for general and
administrative expenses.

For the year ended December 31, 2018, net cash used in investing activities was
$23,589,027, consisting primarily of $18,035,356 for business acquisitions
(which included the acquisition of HubPages where we recognized $6,740,000 for
developed technology and $268,000 for the trade name, and the acquisition of Say
Media where we recognized $8,010,000 for developed technology, $480,000 for the
trade name, and $480,000 for a noncompete agreement), $3,366,031 for promissory
notes receivable, and $2,156,015 for our capitalized platform development.



For the year ended December 31, 2018, net cash provided by financing activities
was $29,914,747, consisting of (i) $12,315,496 in net proceeds after payment of
issuance costs from the issuance of shares of Series H convertible preferred
stock (the "Series H Preferred Stock") (for additional information see below),
(ii) $1,250,000 in net proceeds from a private placement of 500,000 shares of
our common stock (iii) $16,637,680 in aggregate proceeds, less repayments, from
the issuance of 8% promissory notes, 10% convertible debentures, 10% original
issue discount senior secured convertible debentures (referred to herein as the
"10% OID convertible debentures), and 12% convertible debentures, and (iv)
$667,825 in net proceeds from promissory notes issued in favor of certain of our
officers, offset by $956,254 in repayments under our factoring facility with
Sallyport.



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On August 10, 2018, we entered into a securities purchase agreement with certain
accredited investors, pursuant to which we issued an aggregate of 19,400 shares
of our Series H Preferred Stock at a stated value of $1,000, initially
convertible into 58,785,606 shares of our common stock, at the option of the
holder subject to certain limitations, at a conversion rate equal to the stated
value divided by the conversion price of $0.33 per share, for aggregate gross
proceeds of $19,399,250. Of the shares of Series H Preferred Stock issued,
Strome Mezzanine Fund LP ("Strome") received 3,600 shares, James C. Heckman, our
then-Chief Executive Officer, received 1,200 shares, and Joshua Jacobs, our
then-President, received 30 shares upon conversion of the 10% OID convertible
debentures.

Our consolidated financial statements have been presented on the basis that we
are a going concern, which contemplates the realization of assets and
satisfaction of liabilities in the normal course of business. We had revenues of
$5,700,199 during 2018 and have experienced recurring net losses from operations
and negative operating cash flows. Consequently, we were dependent upon
continued access to funding and capital resources from both new investors and
related parties. If continued funding and capital resources are unavailable at
reasonable terms, we may not be able to implement our growth plan and plan of
operations. These financings may include terms that may be highly dilutive

to
existing stockholders.



Future Liquidity

From January 1, 2019 to the issuance date of our accompanying consolidated
financial statements for the year ended December 31, 2018, we continued to incur
operating losses and negative cash flow from operating and investing activities.
We have raised $64.7 million in net proceeds pursuant to the sale and issuances
of Series H Preferred Stock, Series I convertible preferred stock (the "Series I
Preferred Stock"), Series J convertible preferred stock (the "Series J Preferred
Stock"), and Series K convertible preferred stock (the "Series K Preferred
Stock") and $85.9 million in various debt financings. Our cash balance as of
January 4, 2021 was approximately $9.4 million. Summarized below are the
additional debt financings and/or issued equity securities through the issuance
date of our consolidated financial statements.



Debt Financings

Included in the $85.9 million of debt financings (see Note 24, Subsequent Events, in the accompanying consolidated financial statements for further details) are the following:

12% Convertible Debentures. On March 18, 2019, we entered into a securities
purchase agreement with three accredited investors, Strome Mezzanine Fund II, LP
("Strome II"), B. Riley FBR, Inc. ("B. Riley FBR"), and John Fichthorn, our
Chairman of our Board, pursuant to which we issued 12% convertible debentures in
the aggregate principal amount of $1,696,000. We paid a placement agent fee

of
$96,000 to B. Riley FBR.

On March 27, 2019, we entered into a securities purchase agreement with two
accredited investors, including B. Riley FBR, pursuant to which we issued 12%
convertible debentures in the aggregate principal amount of $318,000. We paid a
placement agent fee of $18,000 to B. Riley FBR.

On April 8, 2019, we entered into a securities purchase agreement with an accredited investor, Todd D. Sims, a member of our Board, pursuant to which we issued a 12% convertible debenture in the aggregate principal amount of $100,000.

The 12% convertible debentures issued on March 18, 2019, March 27, 2019, and
April 8, 2019 are convertible into shares of our common stock at the option of
the investor at any time prior to December 31, 2020, at a conversion price of
$0.40 per share, subject to adjustment for stock splits, stock dividends, and
similar transactions, and beneficial ownership blocker provisions. Until
December 18, 2020, the date we filed a Certificate of Amendment to our Restated
Certificate of Incorporation, as amended (the "Certificate of Amendment"), to
increase the number of authorized shares of our common stock, the holders were
unable to fully convert their respective 12% convertible debentures. We granted
the holders a security interest pursuant to a security agreement, dated October
18, 2018, to secure the obligations under the 12% convertible debentures. We
also entered into a registration rights agreement with the investors, pursuant
to which we agreed to register for resale on behalf of the selling stockholders,
the shares of our common stock issuable upon conversion of the 12% convertible
debentures. On December 31, 2020, noteholders converted the 12% convertible
debentures representing an aggregate of $18,104,949 of the then-outstanding
principal and accrued but unpaid interest into 53,887,470 shares of our common
stock at effective conversion per-share prices ranging from $0.33 to $0.40.
Despite the terms of the 12% convertible debentures, the noteholders agreed to
allow us to repay accrued but unpaid interest in shares of our common stock. The
remaining 12% convertible debentures representing an aggregate of $1,130,903 of
outstanding principal and accrued interest were not converted and, instead, such
amounts were repaid in cash to the noteholders.



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12% Senior Secured Note. On June 10, 2019, we entered into a note purchase
agreement with one accredited investor, BRF Finance Co., LLC ("BRF Finance"), an
affiliated entity of B. Riley Financial, Inc. ("B. Riley"), pursuant to which we
issued to the investor a 12% senior secured note, due July 31, 2019, in the
aggregate principal amount of $20,000,000, which after taking into account BRF
Finance's placement fee of $1,000,000 and its legal fees and expenses, resulted
in the receipt by us of net proceeds of $18,865,000, of which $16,500,000 was
used to fund TheStreet escrow account and the remainder for general corporate
purposes. The balance outstanding under the 12% senior secured note was no
longer outstanding as of June 14, 2019. Please see the section entitled "Amended
and Restated 12% Senior Secured Notes" below.



Amended and Restated 12% Senior Secured Notes. On June 14, 2019, we entered into
an amended and restated note purchase agreement with one accredited investor,
BRF Finance, an affiliated entity of B. Riley, which amended and restated note
purchase agreement, and the 12% senior secured note issued by us thereunder on
June 10, 2019. Pursuant to the amended and restated note purchase agreement, we
issued an amended and restated 12% senior secured note, due June 14, 2022, in
the aggregate principal amount of $68,000,000, which amended, restated, and
superseded the $20,000,000 12% senior secured note originally issued by us on
June 10, 2019. We received additional gross proceeds of $48,000,000, which after
taking into account the placement fee paid to BRF Finance, a registered
broker-dealer affiliated with B. Riley, of $2,400,000 and legal fees and
expenses of the investor, resulted in us receiving net proceeds of $45,550,000,
of which $45,000,000 was used to prepay the Royalties and the remainder for
general corporate purposes. We also paid a success fee to B. Riley FBR of
$3,400,000.



On August 27, 2019, we entered into a first amendment to the amended and
restated note purchase agreement with one accredited investor, BRF Finance, an
affiliated entity of B. Riley, which amended the amended and restated 12% senior
secured note due June 14, 2022. Pursuant to this first amendment, we received
additional gross proceeds of $3,000,000, which after taking into account BRF
Finance's placement fee of $150,000 and its legal fees and expenses, resulted in
us receiving net proceeds of $2,832,618.



On October 8, 2019, we issued the third amended and restated 12% senior secured
note due June 14, 2022 in connection with a partial paydown of the second
amended and restated 12% senior secured note due June 14, 2022. We also issued
5,000 shares of our Series J Preferred Stock to BRF Finance as a partial payment
of approximately $4,800,000 of the outstanding balance.



On February 27, 2020, we entered into a second amendment to the amended and
restated note purchase agreement dated as of June 14, 2019 with one accredited
investor, BRF Finance, an affiliated entity of B. Riley, which further amended
the amended and restated 12% senior secured note due June 14, 2022. Pursuant to
the second amendment to the amended and restated note purchase agreement, we
replaced our previous $3,500,000 working capital facility with Sallyport with a
new $15,000,000 working capital facility with FPP Finance LLC ("FastPay"); and
(ii) BRF Finance issued a letter of credit in the amount of approximately
$3,000,000 to our landlord for our lease of the premises located at 225 Liberty
Street, 27th Floor, New York, New York 10281.



The balance outstanding under our amended and restated 12% senior secured notes
as of the issuance date of our consolidated financial statements for the year
ended December 31, 2018 was $56,296,090, which included outstanding principal of
$48,838,702, payment of in-kind interest of $7,457,388 that we were permitted to
add to the aggregate outstanding principal balance. During October 2019,
approximately $4,800,000 of the outstanding balance was converted to Series J
Preferred Stock (for further details refer to Amendment 1 under the heading
Delayed Draw Term Note).



FastPay Credit Facility. On February 6, 2020, we entered into a financing and
security agreement with FastPay, pursuant to which FastPay extended a
$15,000,000 line of credit for working capital purposes secured by a first lien
on all of our cash and accounts receivable and a second lien on all other
assets. Borrowings under the facility bear interest at the LIBOR Rate plus 8.50%
and have a final maturity of February 6, 2022. This line of credit was amended
by that certain first amendment to financing and security agreement dated March
24, 2020 to permit us to amend and restate the 12% senior secured notes. The
aggregate principal amount outstanding, plus accrued and unpaid interest, as of
December 31, 2020 was approximately $7,179,000.



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Effective January 30, 2020, our factoring facility available with Sallyport was
closed and funds were no longer available for advance. As of May 4, 2020, there
was no balance outstanding under the facility.



Delayed Draw Term Note. On March 24, 2020, we entered into a second amended and
restated note purchase agreement with BRF Finance, an affiliated entity of B.
Riley, in its capacity as agent for the purchasers, which further amended and
restated the amended and restated note purchase agreement dated June 14, 2019,
as amended. Pursuant to the second amended and restated note purchase agreement,
we issued a 15% delayed draw term note (the "Term Note"), in the aggregate
principal amount of $12,000,000 to the investor. Up to $8,000,000 in principal
amount under the Term Note is due on March 31, 2021, with the balance thereunder
due on June 14, 2022. Interest on amounts outstanding under the Term Note are
payable in kind in arrears on the last day of each fiscal quarter.



On March 25, 2020, we drew down $6,913,865 under the Term Note, and after
payment of commitment and funding fees paid to BRF Finance in the amount of
$793,109, and other of its legal fees and expenses that we paid, we received net
proceeds of approximately $6,000,000. The net proceeds were used by us for
working capital and general corporate purposes. Additional borrowings under the
note requested by us may be made at the option of the purchasers.



Pursuant to the second amended and restated note purchase agreement, interest on
amounts outstanding under the notes previously issued under the amended and
restated note purchase agreement with respect to (i) interest payable on the
notes previously issued under the amended and restated note purchase agreement
on March 31, 2020 and June 30, 2020, and (ii) at our option, with the consent of
requisite purchasers, interest payable on the notes previously issued under the
amended and restated note purchase agreement on September 30, 2020, in lieu of
the payment in cash of all or any portion of the interest due on such dates,
will be payable in kind in arrears on the last day of such fiscal quarter.

In connection with entering into the second amended and restated note purchase agreement, we entered into an amendment to our $15 million FastPay working capital facility to permit the additional secured debt that may be incurred under the Term Note.

Pursuant to the second amended and restated note purchase agreement, dated
October 23, 2020 ("Amendment 1"), interest payable on the notes on September 30,
2020, December 31, 2020, March 31, 2021, June 30, 2021, September 30, 2021, and
December 31, 2021 will be payable in-kind in arrears on the last day of such
fiscal quarter. Alternatively, at the option of the holder, such interest
amounts can be converted into shares of our common stock at the price we last
sold shares of our common stock. In addition, $3,367,090, including $3,295,506
of principal amount of the Term Note and $71,585 of accrued interest, was
converted into shares of our Series K Preferred Stock and the maturity date of
the Term Note was changed from March 31, 2021 to March 31, 2022. The aggregate
principal amount outstanding as of December 31, 2020 was $4,294,228 (including
payment of in-kind interest of $675,868, which was added to the outstanding

note
balance).



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



The note may be eligible for forgiveness for the principal amounts that are used
for the limited purposes that qualify for forgiveness under SBA requirements. In
order to obtain forgiveness, we must request it and must provide documentation
in accordance with the SBA requirements and certify that the amounts we are
requesting to be forgiven qualify under those requirements. We will remain
responsible under the note for any amounts not forgiven, and that interest
payable under the note will not be forgiven but that the SBA may pay the note
interest on forgiven amounts. Requirements for forgiveness, among other
requirements, provide for eligible expenditures, necessary
records/documentation, or possible reductions of the forgiven amount due to
changes in number of employees or compensation. It is our expectation that 100%
of the principal amount of the note will be forgiven.



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Equity Securities



Included in the $64.7 million of equity raises (see Note 24, Subsequent Events,
in the accompanying consolidated financial statements for further details)

are
the following:



Series H Preferred Stock. Between August 14, 2020 and August 20, 2020, we
entered into several securities purchase agreements for the sale of Series H
Preferred Stock with certain accredited investors, pursuant to which we issued
an aggregate of 2,253 shares, at a stated value of $1,000 per share, initially
convertible into 6,825,000 shares of our common stock at a conversion rate equal
to the stated value divided by the conversion price of $0.33 per share, for
aggregate gross proceeds of $2,730,000 for working capital and general corporate
purposes. The number of shares issuable upon conversion of the Series H
Preferred Stock will be adjusted in the event of stock splits, stock dividends,
combinations of shares, and similar transactions. Each share of Series H
Preferred Stock is entitled to vote on an as-if-converted to common stock basis,
subject to beneficial ownership blocker provisions and other certain conditions.
On October 28, 2020, we entered into a mutual rescission agreement with two of
the investors, pursuant to which the stock purchase agreements associated with
2,146 shares of Series H Preferred Stock were rescinded and deemed null and
void.



Series I Preferred Stock. On June 27, 2019, 25,800 authorized shares of our
preferred stock were designated by our Board as Series I Preferred Stock. On
June 28, 2019, we closed on a securities purchase agreement with certain
accredited investors, pursuant to which we issued an aggregate of 23,100 shares
of Series I Preferred Stock at a stated value of $1,000, initially convertible
into 46,200,000 shares of our common stock at a conversion rate equal to the
stated value divided by the conversion price of $0.50 per share, for aggregate
gross proceeds of $23,100,000 for working capital and general corporate
purposes. The number of shares issuable upon conversion of the Series I
Preferred Stock will be adjusted in the event of stock splits, stock dividends,
combinations of shares and similar transactions. Each share of Series I
Preferred Stock is entitled to vote on an as-if-converted to common stock basis,
subject to certain conditions.



In consideration for its services as placement agent, we paid B. Riley FBR a
cash fee of $1,386,000 plus $52,500 in reimbursement of legal fees and other
transaction costs. We used approximately $18,300,000 of the net proceeds from
the financing to partially repay the amended and restated 12% senior secured
note due June 14, 2022, and to pay deferred fees of approximately $3,400,000
related to that borrowing facility.



On December 18, 2020, in connection with the filing of a Certificate of
Amendment to increase the number of authorized shares of our common stock, the
then-outstanding shares of Series I Preferred Stock automatically converted into
shares of our common stock. Accordingly, we do not have any shares of our Series
I Preferred Stock currently outstanding.



Series J Preferred Stock. On October 4, 2019, 35,000 authorized shares of our
preferred stock were designated by our Board as Series J Preferred Stock. On
October 7, 2019, we closed on a securities purchase agreement with certain
accredited investors, pursuant to which we issued an aggregate of 20,000 shares
of Series J Preferred Stock at a stated value of $1,000, initially convertible
into 28,571,428 shares of our common stock at a conversion rate equal to the
stated value divided by the conversion price of $0.70 per share, for aggregate
gross proceeds of $20,000,000 for working capital and general corporate
purposes. The number of shares issuable upon conversion of the Series J
Preferred Stock will be adjusted in the event of stock splits, stock dividends,
combinations of shares, and similar transactions. Each share of Series J
Preferred Stock is entitled to vote on an as-if-converted to common stock basis,
subject to certain conditions.



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On September 4, 2020, we closed on an additional Series J Preferred Stock
issuance with two accredited investors, pursuant to which we issued an aggregate
of 10,500 shares of Series J Preferred Stock at a stated value of $1,000 per
share, initially convertible into 15,000,000 shares of our common stock at a
conversion rate equal to the stated value divided by the conversion price of
$0.70, for aggregate gross proceeds of $6,000,000 for working capital and
general corporate purposes.



On December 18, 2020, in connection with the filing of the Certificate of
Amendment to increase the number of authorized shares of our common stock, the
then-outstanding shares of Series J Preferred Stock automatically converted into
shares of our common stock. Accordingly, we do not have any shares of our Series
J Preferred Stock currently outstanding.



Series K Preferred Stock. On October 22, 2020, 20,000 shares of our preferred
stock were designated by our Board as Series K Preferred Stock. Between October
23, 2020 and November 11, 2020, we entered into several securities purchase
agreements with accredited investors, pursuant to which we issued an aggregate
of 18,042 shares of Series K Preferred Stock at a stated value of $1,000 per
share, initially convertible into 45,105,000 shares of our common stock at a
conversion rate equal to the stated value divided by the conversion price of
$0.40 per share, for aggregate gross proceeds of $18,042,090. The number of
shares issuable upon conversion of the Series K Preferred Stock will be adjusted
in the event of stock splits, stock dividends, combinations of shares, and
similar transactions. Each share of Series K Preferred Stock is entitled to vote
on an as-if-converted to common stock basis, subject to other certain
conditions.



In consideration for its services as placement agent, we paid B. Riley FBR a
cash fee of $400,500. We used an approximately $3,400,000 of the net proceeds
from the financing to partially repay the amended and restated 12% secured
senior notes due June 14, 2022 and used approximately $2,600,00 for payment on a
prior investment, with the remainder of approximately $12,000,000 for working
capital and general corporate purposes.



On December 18, 2020, in connection with the filing of the Certificate of
Amendment to increase the number of authorized shares of our common stock, the
then-outstanding shares of Series K Preferred Stock automatically converted into
shares of our common stock. Accordingly, we do not have any shares of our Series
K Preferred Stock currently outstanding.



Going Concern



We performed an annual reporting period going concern assessment. Management is
required to assess our ability to continue as a going concern. This Annual
Report has been prepared assuming that we will continue as a going concern,
which contemplates the realization of assets and the liquidation of liabilities
in the normal course of business. Our accompanying consolidated financial
statements do not include any adjustments that might be necessary if we are
unable to continue as a going concern.



We have a history of recurring losses. Our recurring losses from operations and
net capital deficiency have been evaluated by management to determine if the
significance of those conditions or events would limit our ability to meet our
obligations when due. In part, the operating loss realized in fiscal 2018 was
primarily a result of investments in people, infrastructure for the Maven
Platform and the operations rapidly expanding during fiscal 2018 with the
acquisitions of HubPages and Say Media, along with continued costs based on the
strategic growth plans in other verticals.



As reflected in our accompanying consolidated financial statements, we had
revenues of $5,700,199 for the year ended December 31, 2018, and have
experienced recurring net losses from operations, negative working capital, and
negative operating cash flows. During the year ended December 31, 2018, we
incurred a net loss attributable to common stockholders of $44,113,379, utilized
cash in operating activities of $7,417,680, and as of December 31, 2018, had an
accumulated deficit of $34,539,954. We have financed our working capital
requirements since inception through the issuance of debt and equity securities.



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In 2020, we have also been impacted by the COVID-19 pandemic. Many national
governments and sports authorities around the world have made the decision to
postpone/cancel high attendance sports events in an effort to reduce the spread
of COVID-19. In addition, many governments and businesses have limited
non-essential work activity, furloughed, and/or terminated many employees and
closed some operations and/or locations, all of which has had a negative impact
on the economic environment. As a result of these factors, we experienced a
decline in traffic, advertising revenue, and earnings since early March 2020,
due to the cancellation of high attendance sports events and the resulting
decrease in traffic to the Maven Platform and advertising revenue. We have
implemented cost reduction measures in an effort to offset our revenue and
earnings declines, while experiencing increased cash flows by growth in digital
subscriptions. The extent of the impact on our operational and financial
performance will depend on future developments, including the duration and
spread of the COVID-19 pandemic, related group gathering and sports event
advisories and restrictions, and the extent and effectiveness of containment
actions taken, all of which remain uncertain at the time of issuance of our
accompanying consolidated financial statements.



Management has evaluated whether relevant conditions or events, considered in
the aggregate, raise substantial doubt about our ability to continue as a going
concern. Substantial doubt exists when conditions and events, considered in the
aggregate, indicate it is probable that a company will not be able to meet its
obligations as they become due within one year after the issuance date of its
financial statements. Management's assessment is based on the relevant
conditions that are known or reasonably knowable as of December 31, 2020.



Management's assessment of our ability to meet our future obligations is
inherently judgmental, subjective and susceptible to change. The factors that we
considered important in our going concern analysis, include, but are not limited
to, our fiscal 2021 cash flow forecast and our fiscal 2021 operating budget.
Management also considered our ability to repay our convertible debt through
future equity and the implementation of cost reduction measures in effect to
offset revenue and earnings declines from COVID-19. These factors consider
information including, but not limited to, our financial condition, liquidity
sources, obligations due within one year after the issuance date of our
accompanying financial statements, the funds necessary to maintain operations
and financial conditions, including negative financial trends or other
indicators of possible financial difficulty.



In particular, our plan for the: (1) 2021 cash flow forecast, considered the use
of our working capital line with FastPay (as described in Note 24, Subsequent
Events, to our accompanying consolidated financial statements) to fund changes
in working capital, where we have available credit of approximately $8 million
as of the issuance date of the accompanying consolidated financial statements,
and that we do not anticipate the need for any further borrowings that are
subject to the holders approval, from our 12% amended senior secured notes (as
described in Note 24, Subsequent Events, to our accompanying consolidated
financial statements) where we may be permitted to borrow up to an additional $5
million; and (2) 2021 operating budget, considered that approximately sixty-five
percent of our revenue is from recurring subscriptions, generally paid in
advance, and that digital subscription revenue, that accounts for approximately
thirty percent of subscription revenue, grew approximately thirty percent in
2020 demonstrating the strength of our premium brand, and the plan to continue
to grow our subscription revenue from our 2019 acquisition of TheStreet (as
described in Note 24, Subsequent Events, to our accompanying consolidated
financial statements) and to launch premium digital subscriptions from our
Sports Illustrated licensed brands (as described in Note 24, Subsequent Events,
to our accompanying consolidated financial statements), in January 2021.



We have considered both quantitative and qualitative factors as part of the
assessment that are known or reasonably knowable as of December 31, 2020, and
concluded that conditions and events considered in the aggregate, do not raise
substantial doubt about our ability to continue as a going concern for a
one-year period following the financial statement issuance date.



35







Results of Operations



For the year ended December 31, 2018, the total net loss was $26,067,883. The
total net loss increased by $19,783,570 from $6,284,313 in 2017. The primary
reasons for the increase in the total net loss is that the operations rapidly
expanded during 2018 (see below comparison). The basic and diluted net loss per
common share for the year ended December 31, 2018 was $1.69, compared to $0.42
for the year ended December 31, 2017. The primary reasons for the increase in
the net loss attributable to common stockholders is the deemed dividend on
Series H Preferred Stock of $18,045,496, the other expenses of $12,145,644, and
the weighted average shares outstanding calculated on a daily weighted average,
basic and diluted, increase to 26,135,299 shares from 14,919,232 shares due to
the issuance of our common stock in a private placement, partial vesting of
restricted stock, exercise of common stock warrants, issuance of restricted
stock awards in connection with the acquisitions of HubPages and Say Media, and
issuance of shares of our common stock in connection with the acquisition of Say
Media.

Our growth strategy is principally focused on adding new publisher partners to
our technology platform. In addition, where the right opportunity exists, we
will also acquire related online media, publishing and technology businesses by
merger. This combined growth strategy has expanded the scale of unique users
interacting on our technology platform with increased revenues during 2018. We
expect revenues increases in subsequent years will come from organic growth in
operations, addition of more publisher partners, and mergers and acquisitions.

Comparison of 2018 to 2017

                                      Years Ended December 31,
                                       2018              2017           $ Change         % Change
Revenue                            $   5,700,199     $     76,995     $   5,623,204         7,303.3 %
Cost of revenue                        7,641,684        1,590,636         6,051,048           380.4 %
Gross loss                            (1,941,485 )     (1,513,641 )        (427,844 )          28.3 %
Operating expenses:
Research and development               1,179,944          114,873         1,065,071           927.2 %
General and administrative            10,892,443        4,720,824         6,171,619           130.7 %
Total operating expenses              12,072,387        4,835,697         7,236,690           149.7 %
Loss from operations                 (14,013,872 )     (6,349,338 )      (7,664,534 )         120.7 %
Total other (expense) income         (12,145,644 )         65,025       (12,210,669 )     -18,778.4 %
Loss before income taxes             (26,159,516 )     (6,284,313 )     (19,875,203 )         316.3 %
Benefit for income taxes                  91,633                -            91,633           100.0 %
Net loss                             (26,067,883 )     (6,284,313 )     (19,783,570 )         314.8 %
Deemed dividend on Series H
preferred stock                      (18,045,496 )              -       (18,045,496 )         100.0 %
Basic and diluted net loss per
common share                       $ (44,113,379 )   $ (6,284,313 )   $ (37,829,066 )         602.0 %




Revenue



For the year ended December 31, 2018, we had revenue of $5,700,199, as compared
to revenue of $76,995 for the year ended December 31, 2017. The primary source
of revenue was from advertising and membership subscriptions of $5,614,953 and
$85,246, respectively, in 2018 and $62,777 and $14,218, respectively, in 2017.
During 2018, revenue was primarily from operations of on-line media channels
from the Mavens generating advertising and membership subscriptions, and as a
result of the acquisition of HubPages in August 2018 and Say Media in December
2018. During 2017, revenue was primarily from operations of on-line media
channels, which went live in May 2017, generating advertising and memberships
that began in the third quarter of 2017.



36







Cost of Revenue



For the year ended December 31, 2018, we recognized cost of revenue of
$7,641,684 from operating our online media channels primarily attributable to
fixed monthly cost of providing our digital media network channels and
advertising and membership services, as compared to $1,590,636 for the year
ended December 31, 2017. The increase of $6,051,048 in cost is primarily from
our Channel Partners' guarantee payments of $896,928, payroll and benefits of
$450,366, amortization of our capitalized platform development of $1,324,373
(which resulted from spending for our capitalized platform development of during
2018 $4,006,399), amortization of acquired developed technology of $558,423
(which resulted from the acquisitions of HubPages and Say Media for the
technology development during 2018 of $14,750,000), and revenue share payments
of $2,247,453.



During the year ended December 31, 2018, since our technology operations were
primarily in the application and development phase we capitalized platform
development of $4,006,399, as compared to $2,605,162 in 2017, consisting of
$2,086,963 in payroll and related expenses, including taxes and benefits, as
compared to $1,990,589 in 2017, and $1,850,384 in stock based compensation for
related personnel, as compared to $614,573 in 2017, resulting in amortization of
$1,836,625 reflected in cost of revenue for our capitalized platform
development, as compared to $512,252 in 2017.



Operating Expenses

Research and Development. For the year ended December 31, 2018, we incurred
research and development expenses of $1,179,944 from development of our platform
in the preliminary project and post-implementation stages, as compared to
$114,873 for the year ended December 31, 2017. The increase in research and
development expenses is primarily from payroll and benefits of $640,760,
stock-based compensation of $196,867, and other related research and development
costs of $209,120.



General and Administrative. For the year ended December 31, 2018, we incurred
general and administrative expenses of $10,892,443 from payroll and related
expenses, professional services, facilities costs, stock-based compensation of
related personnel, depreciation and amortization, and other corporate expense,
as compared to $4,720,824 for the year ended December 31, 2017. The increase in
general and administrative expenses of $6,171,619 is primarily from our increase
in headcount from 24 to 87, with three additional senior executives, the Chief
Operating Officer, the Chief Strategy & Revenue Officer, and the Chief Product
Officer, fourteen in technology development and forty-six in administration,
along with the related benefits of $1,393,144. In addition to the payroll and
related benefits, we incurred additional stock-based compensation of $2,588,785,
travel of $80,305, conferences of $444,919, facilities costs of $230,835,
consultants of $143,972, public relations of $91,338, insurance of $92,310, and
professional fees of $997,358.



Other (Expenses) Income



For the year ended December 31, 2018, we had net other expenses of $12,145,644,
as compared to net other income of $65,025 for the year ended December 31, 2017,
which was the result primarily from the items below.

Change in Valuation of Warrant Derivative Liabilities. For the year ended December 31, 2018, the decrease in the fair value of the warrant derivative liabilities resulted in a gain of $964,124. We did not have any warrant derivative liabilities for the year ended December 31, 2017.

Change in Valuation of Embedded Derivative Liabilities. For the year ended
December 31, 2018, the increase in the fair value of the embedded derivative
liabilities resulted in a loss of $2,971,694, as compared to the decrease in the
fair value of $64,614 for the year ended December 31, 2017.



37







True-Up Termination Fee. On June 15, 2018, we entered into a securities purchase
agreement with four investors to sell $4,775,000 principal amount of 10% senior
convertible debentures. Strome purchased $3,000,000 of such principal amount and
two of our senior executives and another investment fund purchased the remaining
$1,775,000 of such amount. On June 15, 2018, we also modified two previous
securities purchase agreements dated January 4, 2018 and March 30, 2018 with
Strome to eliminate the true-up provision under which we were committed to issue
up to 1,700,000 shares of our common stock in certain circumstances. As
consideration for such modification, we issued a warrant to Strome to purchase
1,500,000 shares of our common stock, exercisable at an initial price of $1.19
per share for a five-year period. The estimated fair value of this warrant on
the June 15, 2018 issuance date of $1,344,648, calculated pursuant to the
Black-Scholes option-pricing model, was charged to operations as true-up
termination fee during the year ended December 31, 2018. We did not have a
true-up termination fee for the year ended December 31, 2017.



Settlement of Promissory Notes Receivable. On December 12, 2018, pursuant to the
merger agreement with Say Media entered into on October 12, 2018, as amended on
October 17, 2018, we settled the promissory notes receivable by effectively
forgiving $3,366,031 of the balance due as of December 31, 2018. We did not have
any settlement of promissory notes receivable for the year ended December 31,
2017.



Interest Expense. For the year ended December 31, 2018, we incurred interest
expense of $2,508,874, primarily consisting of amortization of accretion of
original issue discount and debt discount on notes payable of $671,436,
extinguishment of debt of $2,620,253, accrued interest of $193,416, and other
interest of $120,629, less gain on extinguishment of embedded derivatives
liabilities upon extinguishment of host instrument of $1,096,860, as compared to
no interest expense for the year ended December 31, 2017.



Liquidated Damages. For the year ended December 31, 2018, we recorded $2,940,654
of liquidated damages primarily from issuance of the Series H Preferred Stock
and 12% convertible debentures since we determined that: (i) a registration
statement registering shares of our common stock issuable upon conversion of the
Series H Preferred Stock and conversion of the 12% convertible debentures would
not be declared effective by the SEC within the requisite time frame; and (ii)
that we would not be able to maintain the timely filing of our periodic reports
with the SEC in order to satisfy the public information requirements under the
securities purchase agreements. We did not have any liquidated damages for

the
year ended December 31, 2017.



Deemed Dividend on Series H Preferred Stock. For the year ended December 31,
2018, in connection with the issuance of 19,400 shares of our Series H Preferred
Stock, we recorded a beneficial conversion feature in the amount of $18,045,496
for the underlying shares of our common stock since the nondetachable conversion
feature was in-the-money (the conversion price of $0.33 per share was lower than
the closing price of our common stock of $0.86) at the issuance date. The
beneficial conversion feature was recognized as a deemed dividend. We did not
have a deemed dividend for the year ended December 31, 2017.

Recent Disruptions to Our Operations

Our normal business operations have recently been disrupted by a series of
events surrounding the COVID-19 pandemic and related measures to control it. See
"Item 1A, Risk Factors - Because of the effects of COVID-19 pandemic and the
uncertainty about their persistence, we may not be able to continue operations
as a going concern."



Seasonality

We expect to experience typical media company advertising and membership sales seasonality, which is strong in the fiscal fourth quarter and slower in the fiscal first quarter.

Effects of Inflation

To date inflation has not had a material impact on our business or operating results.

38







Our Future Business



During 2019, we announced that our Board, supported by its management team, had
commenced a process to explore strategic growth opportunities through mergers
and acquisitions. In connection with our strategic growth, in 2019, we completed
our previously announced proposed acquisition and licensing agreement as
follows:



TheStreet



On June 11, 2019, we, TSTAC, a newly-formed indirect wholly-owned subsidiary of
ours, and TheStreet, entered into TheStreet Merger Agreement, pursuant to which
TSTAC would merge with and into TheStreet, with TheStreet continuing as the
surviving corporation in TheStreet Merger and as an indirect wholly-owned
subsidiary of ours. On August 7, 2019, we consummated TheStreet Merger, pursuant
to which TSTAC merged with and into TheStreet.



Pursuant to TheStreet Merger Agreement, all issued and outstanding shares of
common stock of TheStreet (other than those shares with respect to which
appraisal rights have been properly exercised) were exchanged for an aggregate
of $16,500,000 in cash. Further, pursuant to the terms of TheStreet Merger
Agreement, on June 10, 2019, we deposited $16,500,000 into an escrow account
pursuant to an escrow agreement, dated June 10, 2019, by and among the Company,
TheStreet and Citibank, N.A., as escrow agent. TheStreet Merger was funded
through a debt financing arranged by a subsidiary of B. Riley (see below
"Funding for Acquisition of TheStreet").



On August 7, 2019, in connection with TheStreet Merger, we entered into the
Cramer Agreement with Mr. Cramer, pursuant to which Mr. Cramer and Cramer
Digital agreed to provide the Cramer Services. In consideration for the Cramer
Services, we pay Cramer Digital the Revenue Share. In addition, we pay Cramer
Digital approximately $3,000,000 as an annualized guarantee payment in equal
monthly draws, recoupable against the Revenue Share. We also issued two options
to Cramer Digital pursuant to our 2019 Plan. The first option was to purchase up
to two million shares of our common stock at an exercise price of $0.72, the
closing stock price on August 7, 2019, the grant date. This option vests over 36
months. The second option was to purchase up to three million shares of our
common stock at an exercise price of $0.54, the closing stock price on April 21,
2020, the grant date. In the event Cramer Digital and we agree to renew the term
of the Cramer Agreement for a minimum of three years from the end of the second
year of the current term, 900,000 shares will vest on the Trigger Date. The
remaining shares will vest equally on the 12-month anniversary of the Trigger
Date, the 24-month anniversary of the Trigger Date, and the 36-month anniversary
of the Trigger Date.

In addition, we provide Cramer Digital with a marketing budget, access to personnel and support services, and production facilities. Finally, the Cramer Agreement provides that we will reimburse fifty percent of the cost of the rented office space by Cramer Digital, up to a maximum of $4,250 per month.

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



39

The Sports Illustrated Licensing Agreement

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

The initial term of the Sports Illustrated Licensing Agreement commenced on October 4, 2019, upon the termination of the Meredith License Agreement and continues through December 31, 2029. We have the option, subject to certain conditions, to renew the term of the Sports Illustrated Licensing Agreement for nine consecutive renewal terms of 10 years each, for a total of 100 years.

The Sports Illustrated Licensing Agreement provides that we will pay to ABG
Royalties in respect of each year of the Term based on gross revenues, with
guaranteed minimum annual amounts. We prepaid $45,000,000 to ABG against future
Royalties. ABG will pay to us a share of revenues relating to certain Sports
Illustrated business lines not licensed to us, such as all gambling-related
advertising and monetization, events, and commerce. The two companies are
partnering in building the brand worldwide. This transaction was funded through
a debt financing arranged by a subsidiary of B. Riley (see below "Funding for
Sports Illustrated Licensing Agreement").



Pursuant to the Meredith License Agreement between ABG and Meredith, Meredith
operated the Sports Illustrated Licensed Brands under license from ABG. On
October 3, 2019, Meredith and we entered into various agreements, including the
Transition Agreement, whereby the parties agreed to the terms and conditions
under which Meredith continued to operate certain aspects of the Sports
Illustrated Licensed Brands, and provided certain services during the fourth
quarter of 2019 until all activities were transitioned over to us. Through these
agreements, we took over operating control of the Sports Illustrated Licensed
Brands, and the Transition Agreement was terminated on October 4, 2019.



Pursuant to the Sports Illustrated Licensing Agreement, we issued to ABG
warrants to acquire 21,989,844 shares of our common stock (the "Warrants"). Half
of the Warrants have an exercise price of $0.42 per share (the "Forty-Two Cents
Warrants"). The other half of the Warrants have an exercise price of $0.84 per
share (the "Eighty-Four Cents Warrants"). The Warrants provide for the
following: (1) 40% of the Forty-Two Cents Warrants and 40% of the Eighty-Four
Cents Warrants will vest in equal monthly increments over a period of two years
beginning on the one-year anniversary of the date of issuance of the Warrants
(any unvested portion of such Warrants to be forfeited by ABG upon certain
terminations by us of the Sports Illustrated Licensing Agreement); (2) 60% of
the Forty-Two Cents Warrants and 60% of the Eighty-Four Cents Warrants will vest
based on the achievement of certain performance goals for the Sports Illustrated
Licensed Brands in calendar years 2020, 2021, 2022, or 2023; (3) under certain
circumstances we may require ABG to exercise all (and not less than all) of the
Warrants, in which case all of the Warrants will be vested; (4) all of the
Warrants will automatically vest upon certain terminations of the Licensing
Agreement by ABG or upon a change of control of us; and (5) ABG will have the
right to participate, on a pro-rata basis (including vested and unvested
Warrants, exercised or unexercised), in any of our future equity issuances
(subject to customary exceptions).



40







Funding for the Sports Illustrated Licensing Agreement. On June 14, 2019, we
entered into an amended and restated note purchase agreement with one accredited
investor, BRF Finance, an affiliated entity of B. Riley, which amended and
restated the 12% senior secured note dated June 10, 2019. Pursuant to this
amendment, we issued an amended and restated 12% senior secured note, due June
14, 2022, in the aggregate principal amount of $68,000,000, which amended,
restated, and superseded that $20,000,000 12% senior secured note issued by us
on June 10, 2019 to the investor. We received additional gross proceeds of
$48,000,000, which, after taking into account BRF Finance's placement fee of
$2,400,000 and legal fees and expenses of the investor, we received net proceeds
of $45,550,000, of which $45,000,000 was paid to ABG against future Royalties in
connection with the Sports Illustrated Licensing Agreement, dated June 14, 2019,
with ABG, and the balance of $550,000 was used by us for working capital and
general corporate purposes.

In 2020, we completed the following acquisitions:

Asset Acquisition of LiftIgniter

On March 9, 2020, we entered into an asset purchase agreement with LiftIgniter
and Maven Coalition, whereby Maven Coalition purchased substantially all the
assets of LiftIgniter's machine learning platform, which personalizes content
and product recommendations in real-time. The purchased assets included
LiftIgniter's intellectual property and excluded certain accounts receivable.
Maven Coalition also assumed certain of LiftIgniter's liabilities. The purchase
price consisted of: (i) a cash payment of $184,086 on February 19, 2020, in
connection with the repayment of certain of its outstanding indebtedness; (ii) a
cash payment at closing of $131,202; (ii) collections of certain accounts
receivable; (iv) on the first anniversary date of the closing issuance of
restricted stock units for an aggregate of up to 312,500 shares of our Common
Stock; and (v) on the second anniversary date of the closing issuance of
restricted stock units for an aggregate of up to 312,500 shares of our common
stock.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America ("GAAP") requires
management to make estimates and assumptions that affect the reported amount of
assets and liabilities, the disclosure of contingent assets and liabilities and
the reported amounts of revenue and expenses during the reported periods. The
more critical accounting estimates include estimates related to revenue
recognition, platform development, impairment of long-lived assets, and
stock-based compensation. We also have other key accounting policies, which
involve the use of estimates, judgments and assumptions that are significant to
understanding our results, which are described in Note 2, Summary of Significant
Accounting Policies, in our consolidated financial statements.



Our discussion and analysis of the financial condition and results of operations
is based upon our consolidated financial statements included elsewhere in this
Report, which have been prepared in accordance with GAAP. We believe the
following critical accounting policies affect our more significant judgments and
estimates used in the preparation of the financial statements. Actual results
may differ from these estimates under different assumptions or conditions.

Revenue



We adopted Accounting Standards Codification ("ASC") 606, Revenue from Contracts
with Customers ("ASC 606"), as the accounting standard for revenue recognition,
which was effective as of January 1, 2017. Since we had not previously generated
revenue from customers, we did not have to transition its accounting method from
ASC 605, Revenue Recognition.



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



41







Advertising. We enter into contracts with advertising networks to serve display
or video advertisements on the digital media pages associated with its various
channels. In accordance with ASC 606, we recognized revenue from advertisements,
the impression bid prices, and revenue are reported on a real-time basis.
Although reported advertising transactions are subject to adjustment by the
advertising network partners, any such adjustments are known within a few days
of month end. We owe its independent publisher Channel Partners a revenue share
of the advertising revenue earned which is recorded as service costs in the same
period in which the associated advertising revenue is recognized.



Membership. We enter into contracts with internet users that subscribe to
premium content on the digital media channels. These contracts provide internet
users with a membership subscription to access the premium content for a given
period of time, which is generally one year. In accordance with ASC 606, we
recognize revenue from each membership subscription over time based on a daily
calculation of revenue during the reporting period. Subscriber payments are
initially recorded as deferred revenue on the balance sheet. As we provide
access to the premium content over the membership subscription term, we
recognize revenue and proportionately reduce the contract liability balance. We
owe its independent publisher Channel Partners a revenue share of the membership
subscription revenue earned, which is initially deferred and recorded as a
contract fulfillment cost. We recognize contract fulfillment costs over the
membership subscription term in the same pattern that the associated membership
subscription revenue is recognized.



Cost of Revenue



Our cost of revenue represents the cost of providing our digital media network
channels and advertising and membership services. The cost of revenue that we
have incurred in the periods presented primarily include:



  ? Channel Partner guarantees and revenue share payments;




  ? amortization of developed technology and platform development;




  ? hosting and bandwidth and software license fees;




       ?      stock based compensation related to certain warrants to purchase up
              to 2,000,000 shares of our common stock (the "Channel Partner
              Warrants") granted pursuant to the Channel Partner Warrant Program
              (the "Channel Partner Warrant Program");




  ? programmatic advertising platform costs;




  ? payroll and related expenses of related personnel;




  ? fees paid for data analytics and to other outside service providers;




  ? stock based compensation of related personnel.




Research and Development

Research and development consist primarily of expenses incurred in the research and development of our platform in the preliminary project and post-implementation stages.

Our research and development expenses include:

  ? payroll and related expenses for personnel;




       ?      costs incurred in developing conceptual formulation and
              determination of existence of needed technology; and




  ? stock based compensation of related personnel.




42

Platform Development



For the years presented, substantially all of our technology expenses are
platform development costs that were capitalized as intangible costs. Technology
costs are expensed as incurred or capitalized into property and equipment in
accordance with the Financial Accounting Standards Board ("FASB") ASC Topic 350,
Intangibles - Goodwill and Other. This ASC requires that costs incurred in the
preliminary project and post-implementation stages of an internal use software
project be expensed as incurred and that certain costs incurred in the
application development stage of a project be capitalized.



We capitalize internal labor costs, including compensation, benefits and payroll
taxes, incurred for certain capitalized platform development projects. Our
policy with respect to capitalized internal labor stipulates that labor costs
for employees working on eligible internal use capital projects are capitalized
as part of the historical cost of the project when the impact, as compared to
expensing such labor costs, is material.

Platform development capitalized during the application development stage of a project include:

  ? payroll and related expenses for personnel;




  ? costs incurred in developing features and functionality; and




  ? stock based compensation of related personnel.




General and Administrative

General and administrative expenses consist primarily of:

? payroll and related expenses for executive, sales and administrative

              personnel;




  ? professional services, including accounting, legal, and insurance;

? depreciation of office equipment, computers, and furniture and fixtures;

  ? facilities costs;




  ? conferences;




  ? other general corporate expenses; and




  ? stock-based compensation of related personnel.




Stock-Based Compensation



We provide stock-based compensation in the form of (i) restricted stock awards
to employees and directors, (ii) stock option grants to employees, directors,
and consultants, and (iii) the Channel Partners Warrants.



We account for restricted stock awards and stock option grants to employees,
directors, and consultants by measuring the cost of services received in
exchange for the stock-based payments as compensation expense in our financial
statements. Restricted stock awards and stock option grants to employees, which
are time-vested are measured at fair value on the grant date and charged to
operations ratably over the vesting period. Restricted stock awards and stock
option grants to employees that are performance-vested are measured at fair
value on the grant date and charged to operations when the performance condition
is satisfied.



43







We account for stock-based payments to certain directors and consultants and its
Channel Partners by determining the value of the stock compensation based upon
the measurement date at either (i) the date at which a performance commitment is
reached or (ii) at the date at which the necessary performance to earn the
equity instruments is complete.



The fair value of restricted stock awards, which are time-vested is determined
using the quoted market price of our common stock at the grant date. The fair
value of restricted stock awards which provide for performance-vesting and a
true-up provision (as described in Note 17, Stockholders' Equity, in our
accompanying consolidated financial statements) is determined through
consultants with our independent valuation firm using the binomial pricing model
at the grant date. The fair value of stock options granted and Channel Partner
Warrants granted as stock-based payments are determined utilizing the
Black-Scholes option-pricing model, which is affected by several variables, the
most significant of which are the life of the equity award, the exercise price
of the stock option or warrants, as compared to the fair market value of our
common stock on the grant date, and the estimated volatility of our common stock
over the term of the equity award. Estimated volatility is based on the
historical volatility of our common stock and is evaluated based upon market
comparisons. The risk-free interest rate is based on the U.S. Treasury yield
curve in effect at the time of grant. The fair market value of common stock is
determined by reference to the quoted market price of our common stock.

We capitalize the cost of stock based compensation awards based on the fair value of such awards for platform development and expenses the cost of stock based compensation awards based on the fair value of such awards to cost of revenues, general and administrative expense, or research and development expenses, as appropriate, in its consolidated statements of operations.

Income Taxes



We utilize the asset and liability method of accounting for income taxes. Under
this method, deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax law is recognized in results of operations in the period that
includes the enactment date.

Impairment of Long-Lived Assets

We periodically evaluate the carrying value of long-lived assets to be held and
used when events or circumstances warrant such a review. The carrying value of a
long-lived asset to be held and used is considered impaired when the anticipated
separately identifiable undiscounted cash flows from such an asset are less than
the carrying value of the asset. In that event, a loss is recognized based on
the amount by which the carrying value exceeds the fair value of the long-lived
asset. Fair value is determined primarily by reference to the anticipated cash
flows discounted at a rate commensurate with the risk involved.



Sequencing Policy



Under authoritative guidance, we adopted a sequencing policy whereby, in the
event that reclassification of contracts from equity to assets or liabilities is
necessary pursuant to ASC 815 due to our inability to demonstrate we have
sufficient authorized shares of our common stock, shares of our common stock
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 our employees or
directors are not subject to the sequencing policy.



Based on a preliminary analysis, we determined that during the fourth quarter
ending December 31, 2019, we did not have authorized and unissued shares of our
common stock available for issuance that we could potentially be required to
deliver under our equity contracts. Information with respect to the issuance of
dilutive and potentially dilutive instruments subsequent to the year ended
December 31, 2018 is in our accompany consolidated financial statements in Note
24, Subsequent Events, under the heading Sequencing Policy.



44







On December 18, 2020, we filed a Certificate of Amendment to our Amended and
Restated Certificate of Incorporation to increase the number of authorized
shares of our common stock from 100,000,000 shares to 1,000,000,000 shares. As a
result, as of December 18, 2020, we have a sufficient number of authorized but
unissued shares of our common stock available for issuance required under all of
our securities that are convertible into shares of our common stock.

Recently Issued Accounting Pronouncements

Note 2, Summary of Significant Accounting Policies, in our accompanying consolidated financial statements appearing elsewhere in this Annual Report includes Recently Issued Accounting Pronouncements.

Off-Balance Sheet Arrangements

As of December 31, 2018, the following transactions, obligations, or relationships represent our off-balance sheet arrangements:

Warrant Derivative Liabilities

L2 Warrants. Effective as of August 3, 2018, pursuant to the reset provision, we
adjusted the exercise price to $0.50 per share (the floor exercise price) for
the warrants previously issued to L2 Capital, LLC ("L2") and issued additional
warrants to L2 to purchase up to 640,405 shares of our common stock at an
exercise price of $0.50 per share (as further described in Note 17,
Stockholders' Equity, in our accompanying consolidated financial statements). As
a result of the exercise price of the warrants being reduced to the floor
exercise price on August 3, 2018 and triggering of the reset provision, the
warrants no longer contained any reset provisions and will continue to be
carried on our consolidated balance sheets as a derivative liability at fair
value, as adjusted at each period-end since, among other criteria, delivery of
unregistered shares is precluded upon exercise. The warrants are exercisable for
a period of five years, subject to customary anti-dilution adjustments, and may,
in the event there is no effective registration statement covering the re-sale
of the warrant shares, be exercised on a cashless basis in certain
circumstances. Warrants exercisable for up to 1,066,963 shares of our common
stock were outstanding as of December 31, 2018, with a derivative liability at
fair value of $418,214. L2 exercised these warrants during September 2019 on a
cashless basis, therefore, this derivative liability had no impact on our cash
resources.

Strome Warrants. On June 15, 2018, we modified the two securities purchase
agreements dated January 4, 2018 and March 30, 2018 with Strome to eliminate the
true-up provision under which we were committed to issue up to 1,700,000 shares
of our common stock in certain circumstances (as further described in Note 17,
Stockholders' Equity, in our accompanying consolidated financial statements). As
consideration for such modification, we issued warrants to Strome (the "Strome
Warrants") to purchase up to 1,500,000 shares of our common stock, at an initial
exercise price of $1.19 per share for a period of five years, subject to a reset
provision and customary anti-dilution provisions. Strome was also granted
observer rights on our Board. On August 3, 2018, as a result of the warrant
exercise price being reduced to the floor exercise price and the triggering of
the reset provision, the warrants no longer contained any reset provisions and
will continue to be carried on our consolidated balance sheets as a derivative
liability at fair value, as adjusted at each period-end since, among other
criteria, delivery of unregistered shares is precluded upon exercise. Warrants
exercisable for up to 1,500,000 shares of our common stock were outstanding as
of December 31, 2018, with a derivative liability fair value of $587,971. In the
event Strome decided to exercise these warrants, since shares of our common
stock were available to settle the instrument, there would be no impact to

our
cash resources.



45

B. Riley Warrants. On October 18, 2018, we issued warrants to the investors to
purchase up to 875,000 shares of our common stock in connection with the 10% OID
convertible debentures, with an exercise price of $1.00 per share (as further
described in Note 17, Stockholders' Equity, in our accompanying consolidated
financial statements). The warrant instrument provides that upon the
consummation of a subsequent financing, the $1.00 exercise price shall be
adjusted under certain conditions. We determined that the aforementioned $1.00
exercise price adjustment provisions were inconsequential since we did not
anticipate a consumption of a subsequent financing that would trigger a
subsequent financing condition, therefore, we will carry the warrants on our
consolidated balance sheets as a derivative liability at fair value, as adjusted
at each period-end since, among other criteria, delivery of unregistered shares
is precluded upon exercise. The warrants are exercisable for a period of seven
years, subject to customary anti-dilution adjustments, and may, if at any time
after the six-month anniversary of the issuance of the warrants there is no
effective registration statement covering the re-sale of the shares of common
stock underlying the warrants, be exercised on a cashless basis. Warrants
exercisable for up to 875,000 shares of our common stock were outstanding as of
December 31, 2018, with a derivative liability fair value of $358,050. In the
event B. Riley decided to exercise these warrants (which are subject to certain
contractual exercise limitations), since shares of our common stock were
available to settle the instrument after considering the contractual exercise
limitations, there would be no impact to our cash resources.

Embedded Derivative Liabilities

12% Convertible Debentures. On December 12, 2018, we entered into a securities
purchase agreement with three accredited investors, pursuant to which we issued
to the investors 12% convertible debentures in the aggregate principal amount of
$13,091,528, which included (i) the roll-over of an aggregate of $3,551,528 in
principal and interest of the 10% OID convertible debentures issued to two of
the investors on October 18, 2018 (as further described in Note 15, Convertible
Debt, in our accompanying consolidated financial statements), and (ii) a
placement fee of $540,000 to the placement agent, B. Riley FBR, in the offering.
After payment of legal fees and expenses of the investors, we received net
proceeds of $8,950,000. The 12% convertible debentures issued on December 12,
2018 are convertible into shares of our common stock at the option of the
investor at any time prior to December 31, 2020, at a conversion price of $0.33
per share, subject to adjustment for stock splits, stock dividends, and similar
transactions, and beneficial ownership blocker provisions. The 12% convertible
debentures are due and payable on December 31, 2020. Interest accrues at the
rate of 12% per annum, payable on the earlier of conversion or December 31,
2020. Our obligations under the 12% convertible debentures are secured pursuant
to the security agreement we entered into with each investor.



Subject to us receiving stockholder approval to increase our authorized number
of shares of our common stock, principal on the 12% convertible debentures are
convertible into shares of our common stock, at the option of the investor, at
any time prior to December 31, 2020, at a conversion price of $0.33 per share,
subject to adjustment for stock splits, stock dividends, and similar
transactions, and beneficial ownership blocker provisions.



Upon issuance of the 12% convertible debentures, we recognized a conversion
option, buy-in feature, and default remedy feature as embedded derivatives that
were bifurcated from the note instruments; therefore, we will carry the embedded
derivative liabilities on our consolidated balance sheets at fair value, as
adjusted at each period-end since, among other criteria, delivery of
unregistered shares is precluded upon conversion. As of December 31, 2018, the
fair value of the embedded derivative liabilities was $7,387,000. In the event
the investors decided to exercise their conversion rights under the debentures
(which are subject to certain contractual conversion limitations), since shares
of our common stock are available to settle the instruments after considering
the contractual conversion limitations, there would be no impact to our cash
resources.



46







Contractual Obligations

The following table sets forth our principal cash operating obligations and commitments as of December 31, 2018, aggregating to $1,871,106.

                                               Payments due by Year *
                          Total           2019           2020          2021
Operating leases       $ 1,100,689     $   526,027     $ 347,845     $ 226,817
Employment contracts       297,917         297,917             -             -
Consulting agreement       472,500         465,300         7,200             -
Total                  $ 1,871,106     $ 1,289,244     $ 355,045     $ 226,817




* Subsequent to December 31, 2018, we entered into to several operating lease
obligations which are not reflected in the table (refer to Note 24, Subsequent
Events, in our accompanying consolidated financial statements).

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