Arena Group Holdings Inc
For the period ended Sep 30, 2024. Filed Nov 14, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 14, 2024
PAAI$0.89+7.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-19.
0001493152-24-032945
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001493152-24-045851
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 106 previous paragraphs and 102 current paragraphs.
59 unchanged; 38 reworded; 5 added; 9 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 27 previous and 20 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
Effective August 19, 2024, the Business Combination Agreement, dated November 5, 2023, as amended (the “Business Combination Agreement”), among us, Simplify, Bridge Media Networks, LLC, New Arena Holdco, Inc., Energy Merger Sub I, LLC and Energy Merger Sub II, LLC was terminated by mutual agreement. The Business Combination Agreement was terminated as a result of previously disclosed negotiations between us and Simplify around alternative structures or options to the transactions contemplated by the Business Combination Agreement. We incurred no penalties as a result of the early termination of the Business Combination Agreement.
Current report
On August 19, 2024, we entered into the Amended Promissory Note, in connection with an amendment to our March 13, 2024 working capital loan agreement with Simplify, pursuant to which we have available up to $50,000 (originally $25,000) at ten percent (10.0%) interest rate per annum (the “Applicable Interest Rate”), payable monthly in arrears, with a maturity on December 1, 2026 (originally March 13, 2026). In connection with the Amended Promissory Note, on August 19, 2024, we and Simplify also entered into a common stock purchase agreement (the “Common Stock Purchase Agreement”), whereby $15,000 of outstanding indebtedness under the Simplify Loan was exchanged shares of our common stock.
Current report
For the nine months ended September 30, 2024, we incurred a net loss from continuing operations of $14,880, and as of September 30, 2024, had cash on hand of $5,773 and a working capital deficit of $209,596. Management has evaluated our net loss from continuing operations and working capital deficit to determine if the significance of those conditions or events would limit our ability to meet our obligations when due, including under the Loan Documents and Simplify Loan (further details are provided in the accompanying condensed consolidated financial statements in Notes 10 and 12). In our evaluation, management determined that substantial doubt exists about our ability to continue as a going concern for a one-year period following the financial statement issuance date due to the net loss from continued operations and working capital deficit.
Current report
Our financial results have improved in recent periods due to restructuring activities and implementation of a new operating structure. In addition, we plan to continue improving monthly financial performance through the reduction of costs and monthly cash requirements, maintain compliance with the terms of all outstanding debt agreements, and take actions to resolve current and potential future liabilities to alleviate the conditions that raise substantial doubt about its ability to continue as a going concern, such as resolving pending litigation. However, there can be no assurance that we will be able to execute these plans. If we are unable to execute these plans, it could lead to selling assets and further reducing costs and cash requirements.
Current report
Nine Months Ended September 30, 2024 and 2023
Removed paragraphs (9)
Previous report
On February 9, 2024, New Arena Holdco, Inc. (“New Arena”), a wholly owned subsidiary of us, filed a Registration Statement on Form S-4 (File No. 333-276999) with the SEC in connection with the Business Combination Agreement by and among us, Simplify, Bridge Media, New Arena and the other parties dated November 5, 2023, as amended on December 1, 2023 and July 12, 2024 (the “Transaction Agreement”), that provides for us to combine our operations with those of Bridge Media, a wholly owned subsidiary of Simplify by way of a series of mergers with and among New Arena (the “Mergers”), subject to customary conditions, including the approval by our shareholders and certain regulatory approvals (the “Business Combination”). Immediately following the Mergers, the Transaction Agreement provides for: (i) the purchase by The Hans Foundation USA, a nonprofit nonstock corporation (the “Hans Foundation”) of 25,000 shares of New Arena Series A Preferred Stock, par value $0.0001 per share, at a purchase price of $1,000.00 per share, for an aggregate purchase price of $25,000 pursuant to the subscription agreement, dated as of November 5, 2023, by and between New Arena and the Hans Foundation; and (ii) the purchase by 5-Hour International Corporation Pte. Ltd. (“5-Hour”) of 5,000,000 shares of New Arena common stock, par value $0.0001 per share (the “New Arena Common Stock”) at a purchase price of $5.00 per share, for an aggregate purchase price of $25,000 pursuant to the subscription agreement, dated as of November 5, 2023, by and between New Arena and 5-Hour. Further, concurrently with the closing of the Mergers, pursuant to that certain Committed Equity Facility Term Sheet, dated November 5, 2023, by and between New Arena and Simplify, New Arena will enter into a Stock Purchase Agreement with Simplify, pursuant to which Simplify will agree to purchase, at New Arena’s request, up to $20,000 in aggregate purchase price of shares of New Arena Common Stock from time to time during the 12 months following the closing date at a price per share equal to the lesser of (i) the volume-weighted average price of the New Arena Common Stock for the last sixty trading days prior to the purchase date and (ii) $3.86 per share (the “Equity Line of Credit”), along with 60,000 shares of New Arena Common Stock as payment of a 1.5% commitment fee.
Previous report
On July 12, 2024, we entered into a second amendment to the Transaction Agreement, pursuant to which the outside termination date for the Business Combination was extended from August 5, 2024 to November 5, 2024. In addition, certain changes were made to the contemplated post-combination officers and directors.
Previous report
As of July 11, 2024, the Audit Committee (the “Committee”) of our Board of Directors (the “Board”) approved the dismissal of Marcum LLP (“Marcum”) as our independent registered public accounting firm, effective immediately.
Previous report
On July 11, 2024, the Committee approved the appointment of KPMG LLP (“KPMG”) as our independent registered public accounting firm to perform independent audit services, effective immediately. The selection of KPMG as the Company’s independent registered accounting firm was recommended by the Committee and approved by the Board.
Previous report
On August 2, 2024, Bridge Media shut down all of its operations and laid off substantially all of the employees. We are discussing with Simplify possible alternative structures or options to the transactions contemplated under the Business Combination.
Previous report
For the six months ended June 30, 2024, we incurred a net loss from continuing operations of $19,658, and as of June 30, 2024, had cash on hand of $6,085 and a working capital deficit of $231,579. Our net loss from continuing operations and working capital deficit 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. Management also evaluated the 2023 Notes (see Note 11 in our accompanying condensed consolidated financial statements), Senior Secured Notes, Delayed Draw Term Notes and 2022 Bridge Notes (see Note 12 in our accompanying condensed consolidated financial statements) (collectively our “current debt”) that are subject to a forbearance period through the earlier of the following: (a) September 30, 2024, as further extended on July 12, 2024 to December 31, 2024 (as further described under the headingArena Loan Agreement in Note 20 in our accompanying condensed consolidated financial statements); (b) the occurrence of the closing of the Business Combination(as further described in Note 18 in our accompanying condensed consolidated financial statements); or (c) the termination of the Business Combination prior to closing. In addition to the forgoing, management evaluated the August 2, 2024 shut down all of the operations and layoff of substantially all of the employees of Bridge Media Networks, LLC (“Bridge Media”), an affiliated entity of Simplify Inventions, LLC (“Simplify”), and both parties to the Business Combination. Unless we are able to refinance or modify the terms of our current debt we run the risk that our debt could be called, therefore, we may not be able to meet our obligations when due.
Previous report
In its evaluation, management determined that substantial doubt exists about our ability to continue as a going concern for a one-year period following the financial statement issuance date. The plans to seek refinancing or modification of the terms of our current debt, complete the Business Combination orenter into possible alternative structures or options to the transactions contemplated under the Business Combination which are discussed below are outside of management’s control.
Previous report
We plan to refinance or modify the terms of our current debt, complete the Business Combination or enter into possible alternative structures or options to the transactions contemplated under the Business Combination based on our continuing discussions with Simplify(as further discussed above inRecent Developments) to alleviate the conditions that raised substantial doubt about our ability to continue as a going concern. However, there can be no assurance that we will be able to refinance or modify the terms of our current debt, complete the Business Combination or enter into possible alternative structures or options to the transactions contemplated under the Business Combination.
Previous report
Six Months Ended June 30, 2024 and 2023
Reworded paragraphs (38)
Previous wording
The following discussion and analysis of our financial condition and results of operations for the three and six months ended June 30, 2024 and2023should be read together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report and in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2023 included in the Annual Report on Form 10-K filed with the SEC on April 1, 2024. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of a number of factors. We caution that assumptions, expectations, projections, intentions or beliefs about future events may, and often do, vary from actual results and the differences can be material. Please see “Forward-Looking Statements.”
Current wording
The following discussion and analysis of our financial condition and results of operations for the three and nine months ended September 30, 2024 and2023should be read together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report and in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2023 included in the Annual Report on Form 10-K filed with the SEC on April 1, 2024. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of a number of factors. We caution that assumptions, expectations, projections, intentions or beliefs about future events may, and often do, vary from actual results and the differences can be material. Please see “Forward-Looking Statements.”
Previous wording
On July 12, 2024, we entered into a third amendment to the Note Purchase Agreement, pursuant to which interest that was, or will be, due on December 31, 2023, March 31, 2024, June 30, 2024 and September 30, 2024 will now be due on or before December 31, 2024, as well as the interest otherwise due on December 31, 2024. The deferral is contingent on, among other things, no events of default occurring under our Secured Senior Notes, Delayed Draw Term Notes and 2022 Bridge Notes (collectively referred to as our current debt (as defined below) during the deferral period.
Current wording
On July 12, 2024, we entered into a Third Amendment to the Third Amended and Restated Note Purchase Agreement (“Amendment No. 3”), pursuant to which interest that was, or will be, due on December 31, 2023, March 31, 2024, June 30, 2024 and September 30, 2024 will now be due on or before December 31, 2024, as well as the interest otherwise due on December 31, 2024. The deferral is contingent on, among other things, no events of default occurring under its Bridge Notes and Debt (both as further described in the accompanying condensed consolidated financial statements in Note 10 and Note 11, and referred to as the “Loan Documents”) during the deferral period. On November 6, 2024, we received a letter from Renew Group Private Limited (“Renew”) confirming the Company is not currently in default under the Loan Documents due to the cure of the default identified in the forbearance letter.
Previous wording
Uncertainty in the global economy presents significant risks to our business. Increases in inflation, increasing and continued elevated interest rates, instability in the global banking system, geopolitical factors, including the ongoing conflicts in Ukraine and Israel and the responses thereto, and the remaining effects of the COVID-19 pandemic may have an adverse effect on our business. While we are closely monitoring the impact of the current macroeconomic conditions on all aspects of our business, the ultimate extent of the impact on our business remains highly uncertain and will depend on future developments and factors that continue to evolve. Most of these developments and factors are outside of our control and could exist for an extended period of time. As a result, we are subject to continuing risks and uncertainties. For additional information, see the sections titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on April 1, 2024 and in this Quarterly Report.
Current wording
Uncertainty in the global economy presents significant risks to our business. Increases in inflation, instability in the global banking system, geopolitical factors, including the ongoing conflicts in Ukraine and Israel and the responses thereto may have an adverse effect on our business. While we are closely monitoring the impact of the current macroeconomic conditions on all aspects of our business, the ultimate extent of the impact on our business remains highly uncertain and will depend on future developments and factors that continue to evolve. Most of these developments and factors are outside of our control and could exist for an extended period of time. As a result, we are subject to continuing risks and uncertainties. For additional information, see the sections titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on April 1, 2024 and in this Quarterly Report.
Previous wording
We monitor and review our key operating metrics as we believe that these metrics are relevant for our industry and specifically to us and to understanding our business. Moreover, they form the basis for trends informing certain predictions related to our financial condition. Our key operating metrics focus primarily on our digital advertising revenue, which has experienced significant growth in recent periods. As indicated in the Results of Operations section below, for the three months ended June 30, 2024, digital advertising revenue decreased by 10.0%, as compared to the same period in fiscal 2023. For the six months ended June 30, 2024, digital advertising revenue increased by 3.2%, as compared to the same period in 2023. Management monitors and reviews these metrics because such metrics are readily measurable in real time and can provide valuable insight into the performance of and trends related to our digital advertising revenue and our overall business. We consider only those key operating metrics described here to be material to our financial condition, results of operations and future prospects.
Current wording
We monitor and review our key operating metrics as we believe that these metrics are relevant for our industry and specifically to us and to understanding our business. Moreover, they form the basis for trends informing certain predictions related to our financial condition. Our key operating metrics focus primarily on our digital advertising revenue, which has experienced significant growth in recent periods. As indicated in the Results of Operations section below, for the three months ended September 30, 2024, digital advertising revenue decreased by approximately 19%, as compared to the same period in fiscal 2023. For the nine months ended September 30, 2024, digital advertising revenue decreased by approximately 6%, as compared to the same period in 2023. Management monitors and reviews these metrics because such metrics are readily measurable in real time and can provide valuable insight into the performance of and trends related to our digital advertising revenue and our overall business. We consider only those key operating metrics described here to be material to our financial condition, results of operations and future prospects.
Previous wording
For the three and six months ended June 30, 2024, our RPM was $22.90 and $21.22, respectively. For the three and six months ended June 30, 2023, our RPM was $20.95 and $17.58, respectively. The 9% and 21% increases in RPM for the three and six months reflect a significant increase in video advertising as a percentage of total digital advertising as digital video advertising is sold at a significantly higher price than digital display advertising.
Current wording
For the three and nine months ended September 30, 2024, our RPM was $24.69 and $22.27, respectively. For the three and nine months ended September 30, 2023, our RPM was $23.41 and $19.60, respectively. The 5% and 14% increases in RPM for the three and nine months reflect a significant increase in video advertising as a percentage of total digital advertising as digital video advertising is sold at a significantly higher price than digital display advertising.
Previous wording
For the three and six months ended June 30, 2024, our monthly average pageviews were 295,011,396 and 347,347,690, respectively, as compared to 355,435,417 and 377,551,837 for the three and six months ended June 30, 2023. The 17% and 8% decreases in monthly average pageviews reflect algorithmic changes at Google, Facebook and other platforms which subdued user click-throughs to the original content.
Current wording
For the three and nine months ended September 30, 2024, our monthly average pageviews were 301,721,996 and 332,312,606, respectively, as compared to 388,410,170 and 380,578,813 for the three and nine months ended September 30, 2023. The 22% and 13% decreases in monthly average pageviews reflect algorithmic changes at Google, Facebook and other platforms which subdued user click-throughs to the original content.
Previous wording
As of June 30, 2024, our principal sources of liquidity consisted of cash of $6,085 and accounts receivable from continuing operations, net of our allowance for credit losses, of $22,698. In addition, as of June 30, 2024, we had $12,252 available for additional use under our working capital loan with Simplify. As of June 30, 2024, the outstanding balance of the Simplify working capital loan was $12,748. Our cash balance as of the issuance date of our accompanying condensed consolidated financial statements is $6,719.
Current wording
As of September 30, 2024, our principal sources of liquidity consisted of cash of $5,773 and accounts receivable from continuing operations, net of our allowance for credit losses, of $25,858. In addition, as of September 30, 2024, we had $48,900 available for additional use under our working capital loan with Simplify. As of September 30, 2024, the outstanding balance of the Simplify working capital loan was $1,100. Our cash balance as of the issuance date of our accompanying condensed consolidated financial statements is $7,085.
Previous wording
We have material contractual obligations that arise in the normal course of business primarily consisting of employment contracts, consulting agreements, leases, liquidated damages, debt and related interest payments. Purchase obligations consist of contracts primarily related to merchandise, equipment, and third-party services, the majority of which are due in the next 12 months. See Notes 5, 8, 10, 11 and 12 in our accompanying condensed consolidated financial statements for amounts outstanding as of June 30, 2024, related to leases, liquidated damages, working capital loan, bridge notes and debt, respectively. During 2022, we assumed the lease from Men’s Journal for office space in Carlsbad, California, that expires in March 2025, and we remain responsible for $1,080 over the lease term. The lease provides for fixed payments ranging from $89 to $94 over the remainder of the lease term, with an estimate of common expenses per month of $25 through the end of the lease term. Other than with respect to leases, as described in Note 5,Leases, in our accompanying condensed consolidated financial statements, there have been no material changes from the disclosures in our Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
We have material contractual obligations that arise in the normal course of business primarily consisting of employment contracts, consulting agreements, leases, liquidated damages, debt and related interest payments. Purchase obligations consist of contracts primarily related to merchandise, equipment, and third-party services, the majority of which are due in the next 12 months. See Notes 5, 8, 10, 11 and 12 in our accompanying condensed consolidated financial statements for amounts outstanding as of September 30, 2024, related to leases, liquidated damages, working capital loan, bridge notes and debt, respectively. During 2022, we assumed the lease from Men’s Journal for office space in Carlsbad, California, that expires in March 2025, and we remain responsible for $720 over the lease term. The lease provides for fixed payments ranging from $89 to $94 over the remainder of the lease term, with an estimate of common expenses per month of $25 through the end of the lease term. Other than with respect to leases, as described in Note 5,Leases, in our accompanying condensed consolidated financial statements, there have been no material changes from the disclosures in our Annual Report on Form 10-K for the year ended December 31, 2023.
Previous wording
In connection with our discontinued operations from the discontinuance of the Sports Illustrated media business, we recorded the termination fee liability of $45,000 and recognized a loss on impairment of assets of $39,391 for the six months ended June 30, 2024. As a result of this discontinuance, our total liabilities from the discontinued operations were $97,516, offset by our total assets from discontinued operations of $1,014 as of June 30, 2024.
Current wording
In connection with our discontinued operations from the discontinuance of the Sports Illustrated media business, we recorded the termination fee liability of $45,000 and recognized a loss on impairment of assets of $39,391 for the nine months ended September 30, 2024. As a result of this discontinuance, our total liabilities from the discontinued operations were $98,378, partially offset by our total assets from discontinued operations of $528 as of September 30, 2024.
Previous wording
Loss from our discontinued operations, net of tax, was $91,887 and $12,810 for the six months ended June 30, 2024 and 2023, respectively.
Current wording
Loss from our discontinued operations, net of tax, was $92,709 and $15,204 for the nine months ended September 30, 2024 and 2023, respectively.
Previous wording
Further details are provided in our accompanying condensed consolidated financial statements in Note 2,*Discontinued Operations,*related to ourdiscontinued operations and Note 19,Commitments and Contingencies, regarding our legal matters and an action filed by ABG Group againstthe Company and Manoj Bhargava on April 1, 2024.
Current wording
Further details are provided in our accompanying condensed consolidated financial statements in Note 2,*Discontinued Operations,*related to our discontinued operations and Note 19,Commitments and Contingencies, regarding our legal matters and an action filed by ABG Group against the Company and Manoj Bhargava on April 1, 2024.
Previous wording
As of June 30, 2024, we had a working capital deficit of $231,579, as compared to $145,622 as of December 31, 2023, consisting of $35,352 in total current assets and $266,931 in total current liabilities. As of December 31, 2023, our working capital deficit consisted of $90,399 in total current assets and $236,021 in total current liabilities.
Current wording
As of September 30, 2024, we had a working capital deficit of $209,596, as compared to $145,622 as of December 31, 2023, consisting of $37,834 in total current assets and $247,430 in total current liabilities. As of December 31, 2023, our working capital deficit consisted of $90,399 in total current assets and $236,021 in total current liabilities.
Previous wording
Our cash flows for the six months ended June 30, 2024 and 2023 consisted of the following:
Current wording
Our cash flows for the nine months ended September 30, 2024 and 2023 consisted of the following:
Previous wording
For the six months ended June 30, 2024, net cash used in operating activities was $5,161, consisting primarily of $90,094 of cash paid to employees, Publisher Partners, expert contributors, suppliers, and vendors, and for revenue share arrangements, professional services, and $2,033 of cash paid for interest, offset by $93,222 of cash received from customers. For the six months ended June 30, 2023, net cash used in operating activities was $16,400, consisting primarily of $119,903 of cash paid to employees, Publisher Partners, expert contributors, suppliers, and vendors, and for revenue share arrangements, advance of royalty fees and professional services, and $7,140 of cash paid for interest, offset by $110,643 of cash received from customers.
Current wording
For the nine months ended September 30, 2024, net cash used in operating activities was $7,507, consisting primarily of $124,161 of cash paid to employees, Publisher Partners, expert contributors, suppliers, and vendors, and for revenue share arrangements, professional services, and $2,698 of cash paid for interest, offset by $119,352 of cash received from customers. For the nine months ended September 30, 2023, net cash used in operating activities was $22,265, consisting primarily of $179,166 of cash paid to employees, Publisher Partners, expert contributors, suppliers, and vendors, and for revenue share arrangements, advance of royalty fees and professional services, and $10,835 of cash paid for interest, offset by $167,736 of cash received from customers.
Previous wording
For the six months ended June 30, 2024, net cash used in investing activities was $1,512 consisting of (i) $27 for purchase of property and equipment and (ii) $1,485 for capitalized costs for our Platform. For the six months ended June 30, 2023, net cash used in investing activities was $2,632, consisting of $2,132 for capitalized costs for our Platform and $500 for the acquisition of a business.
Current wording
For the nine months ended September 30, 2024, net cash used in investing activities was $2,819 consisting of (i) $54 for purchase of property and equipment and (ii) $2,765 for capitalized costs for our Platform. For the nine months ended September 30, 2023, net cash used in investing activities was $3,467, consisting of $2,967 for capitalized costs for our Platform and $500 for the acquisition of a business.
Previous wording
For the six months ended June 30, 2024, net cash provided by financing activities was $3,474, consisting of (i) $561 for the payment of the contingent consideration, (ii) $20,027 from repayment of our line of credit with SLR Digital Finance LLC (“SLR”) and (iii) $486 for tax payments relating to the withholding of shares of common stock for certain employees, less (iv) $12,000 in net proceeds from the common stock private placement, and (v) $12,748 in net proceeds from our working capital loan with Simplify. For the six months ended June 30, 2023, net cash provided by financing activities was $10,650, consisting of (i) $11,500 (before a reduction for accrued offering costs of $167) in proceeds from the public offering of common stock, and (ii) $815 of proceeds from our SLR line of credit; less (iii) $75 for deferred cash payments, and (iv) $1,423 for tax payments relating to the withholding of shares of common stock for certain employees.
Current wording
For the nine months ended September 30, 2024, net cash provided by financing activities was $6,815, primarily consisting of (i) $561 for the payment of the contingent consideration, (ii) $20,027 from repayment of our line of credit with SLR Digital Finance LLC (“SLR”) and (iii) $497 for tax payments relating to the withholding of shares of common stock for certain employees, less (iv) $12,000 in net proceeds from the common stock private placement, and (v) $16,100 in net proceeds from our working capital loan with Simplify. For the nine months ended September 30, 2023, net cash provided by financing activities was $18,649, consisting primarily of $11,500 (before a reduction for accrued offering costs of $167) in net proceeds from the public offering of common stock and $3,211 from borrowings under our SLR line of credit, $5,703 (excluding debt issuance costs of $100) in net proceeds from issuance of notes; offset by $1,423 tax payments relating to the withholding of shares of common stock for certain employees, and $75 payment of deferred cash payments.
Previous wording
For the six months ended June 30, 2024, the net loss from continuing operations improved $6,393 to $19,658, as compared to our prior period of $26,051. This improvement was primarily due to a $9,427 decrease in operating expenses that was offset by a decrease in gross profit of $3,894.
Current wording
For the three months ended September 30, 2024, the net income from continuing operations improved $13,550 to $4,778 as compared to our prior period net loss of $8,772. This improvement was primarily due to a $9,478 decrease in operating expenses and an increase in gross profit of $3,043.
Previous wording
For the three months ended June 30, 2024 we had gross profit of $10,718, as compared to $13,217 for the three months ended June 30, 2023, a decrease of $2,499. Gross profit percentage for the three months ended June 30, 2024 was 39.4%, as compared to 38.8% for the three months ended June 30, 2023.
Current wording
For the three months ended September 30, 2024 we had gross profit of $16,993, as compared to $13,950 for the three months ended September 30, 2023, an increase of $3,043. Gross profit percentage for the three months ended September 30, 2024 was 50.6%, as compared to 37.7% for the three months ended September 30, 2023.
Previous wording
The increase in gross profit percentage was driven by a higher mix of revenue from sports partners, which receive a revenue share, resulting in Publisher Partner revenue share as a percentage of digital advertising revenue increasing to 20.0% for the three months ended June 30, 2024, as compared to 23.9% for the three months ended June 30, 2023.
Current wording
The increase in gross profit percentage was driven by a higher mix of revenue from sports partners, which receive a revenue share, resulting in Publisher Partner revenue share as a percentage of digital advertising revenue increasing to 20.8% for the three months ended September 30, 2024, as compared to 26.8% for the three months ended September 30, 2023.
Previous wording
For the three months ended June 30, 2024, total revenue decreased $6,889, or a 20.2% decrease, to $27,183 from $34,072 for the three months ended June 30, 2023. This reflected a decrease in print revenue of $2,795 due primarily to the shutdown of Athlon Outdoor print operations, which was further reduced by a decrease of 13.4% in digital revenue of $4,094, primarily from decreases in our digital advertising of$2,301, and digital subscriptions of $1,816.
Current wording
For the three months ended September 30, 2024, total revenue decreased $3,441, or a 9.3% decrease, to $33,555 from $36,996 for the three months ended September 30, 2023. This reflected a decrease in print revenue of $1,941 due primarily to the shutdown of Athlon Outdoor print operations, which was further reduced by a decrease of 4.3% in digital revenue of $1,500, primarily from decreases in our digital advertising of $5,184, and digital subscriptions of $1,155.
Previous wording
The primary driver of the decrease in our digital revenue is a 10.0% decrease in our digital advertising revenue from $23,019 for the three months ended June 30, 2023 to $20,718 in the current year period. Other digital revenue increased by $502 to $1,721 for the three months ended June 30, 2024 driven by the expansion in our e-commerce revenue.
Current wording
The primary driver of the decrease in our digital revenue is an 18.3% decrease in our digital advertising revenue from $28,251 for the three months ended September 30, 2023 to $23,067 in the current year period. Other digital revenue increased by $5,232 to $6,320 for the three months ended September 30, 2024 driven by the expansion in our e-commerce revenue.
Previous wording
For the three months ended June 30, 2024, we recognized cost of revenue of $16,465 as compared to $20,855 for the three months ended June 30, 2023, which represents a decrease of $4,390. Cost of revenue for the second quarter of 2024 was impacted by decreases in technology, Platform and software licensing fees of $1,173, Publisher Partner revenue share payments of $1,368, amortization of developed technology and platform development of $816, printing, distribution and fulfillment costs of $671 and stock-based compensation costs of $537.
Current wording
For the three months ended September 30, 2024, we recognized cost of revenue of $16,562 as compared to $23,046 for the three months ended September 30, 2023, which represents a decrease of $6,484. Cost of revenue was impacted by decreases in technology, Platform and software licensing fees of $1,121, Publisher Partner revenue share payments of $2,769, amortization of developed technology and platform development of $717, printing, distribution and fulfillment costs of $620 and stock-based compensation costs of $593.
Previous wording
For the three months ended June 30, 2024, we incurred selling and marketing costs of $3,751 as compared to $6,904 for the three months ended June 30, 2023. The decrease in selling and marketing costs of $3,153 is primarily related to decreases in payroll and employee benefits costs of $1,037, professional marketing services of $1,221, circulation costs of $510, and stock-based compensation of $258.
Current wording
For the three months ended September 30, 2024, we incurred selling and marketing costs of $2,011 as compared to $6,422 for the three months ended September 30, 2023. The decrease in selling and marketing costs of $4,411 is primarily related to decreases in payroll and employee benefits costs of $2,791, due to restructuring activities and reduction in direct sales workforce. In addition, decreases were noted in professional marketing services of $861, circulation costs of $391, and stock-based compensation of $255.
Previous wording
For the three months ended June 30, 2024, we incurred general and administrative costs of $8,632 as compared to $11,601 for the three months ended June 30, 2023. The $2,969 decrease in general and administrative expenses is primarily due to decreases in stock-based compensation of $3,824, and payroll and related expenses of $399; partially offset by an increase professional services, including accounting, legal and insurance of $965.
Current wording
For the three months ended September 30, 2024, we incurred general and administrative costs of $6,023 as compared to $10,940 for the three months ended September 30, 2023. The $4,917 decrease in general and administrative expenses is primarily due to decreases in stock-based compensation of $2,182, payroll and related expenses of $1,717, and other general and administrative expenses of $1,022.
Previous wording
Change in Fair Value of Contingent Consideration. The change in fair value of contingent consideration of $0 for the three months ended June 30, 2024 is due to the put option on our common stock in connection with the Fexy Studios acquisition no longer being outstanding.
Current wording
Change in Fair Value of Contingent Consideration. The change in fair value of contingent consideration for three months ended September 30, 2024 of $0, is due to the put option on our common stock in connection with the Fexy Studios acquisition no longer being outstanding as of September 30, 2024.
Previous wording
Interest Expense. We incurred interest expense of $4,249 and $5,001 for the three months ended June 30, 2024 and 2023, respectively, a decrease of $752 from the prior period, as a result of our decrease in debt.
Current wording
Interest Expense. We incurred interest expense of $3,159 and $4,042 for the three months ended September 30, 2024 and 2023, respectively, a decrease of $883 from the prior period, as a result of our decrease in debt.
Previous wording
Liquidated Damages. We recorded $76 of accrued interest on our liquidated damages payable for the three months ended June 30, 2024 primarily from the issuance of our convertible debentures, Series H convertible preferred stock, Series I convertible preferred stock, Series J convertible preferred stock and Series K convertible preferred stock in prior years. We recorded $177 of accrued interest on our liquidated damages payable for the three months ended June 30, 2023 primarily from issuance of the same securities as described above.
Current wording
Liquidated Damages. We recorded $77 of accrued interest on our liquidated damages payable for the three months ended September 30, 2024 primarily from the issuance of our convertible debentures, Series H convertible preferred stock, Series I convertible preferred stock, Series J convertible preferred stock and Series K convertible preferred stock in prior years. We recorded $151 of accrued interest on our liquidated damages payable for the three months ended September 30, 2023 primarily from issuance of the same securities as described above.
Previous wording
For the three months ended June 30, 2024, the net loss from continuing operations improved $4,589 to $6,938 as compared to our prior period of $11,527. This improvement was primarily due to a $6,274 decrease in operating expenses that was offset by a decrease in gross profit of $2,499.
Current wording
For the nine months ended September 30, 2024, the net loss from continuing operations improved $19,943 to $14,880, as compared to our prior period of $34,823. This improvement was primarily due to a $18,905 decrease in operating expenses that was partially offset by a decrease in gross profit of $851.
Previous wording
For the six months ended June 30, 2024 we had gross profit of $19,651, as compared to $23,545 for the six months ended June 30, 2023, a decrease of $3,894. Gross profit percentage for the six months ended June 30, 2024 was 35.0%, as compared to 37.7% for the three months ended June 30, 2023.
Current wording
For the nine months ended September 30, 2024 we had gross profit of $36,644, as compared to $37,495 for the nine months ended September 30, 2023, a decrease of $851. Gross profit percentage for the nine months ended September 30, 2024 was 40.9%, as compared to 37.7% for the nine months ended September 30, 2023.
Previous wording
The reduction in gross profit percentage was driven by a higher mix of revenue from sports partners, which receive a revenue share, resulting in Publisher Partner revenue share as a percentage of digital advertising revenue increasing to 24.1% for the six months ended June 30, 2024, as compared to 23.1% for the six months ended June 30, 2023.
Current wording
The increase in gross profit percentage was driven by a higher mix of revenue from sports partners, which receive a revenue share, resulting in Publisher Partner revenue share as a percentage of digital advertising revenue increasing to 23.0% for the nine months ended September 30, 2024, as compared to 24.6% for the nine months ended September 30, 2023.
Previous wording
For the six months ended June 30, 2024, total revenue decreased $6,366, or a 10.2% decrease, to $56,124 from $62,490 for the six months ended June 30, 2023. This reflected a decrease in print revenue of $4,284 due primarily to the shutdown of Athlon Outdoor print operations and a 3.6% decrease in digital revenue from $57,180 for the six months ended June 30, 2023 to $55,098 for the six months ended June 30, 2024.
Current wording
For the nine months ended September 30, 2024, total revenue decreased $9,807, or a 9.9% decrease, to $89,679 from $99,486 for the nine months ended September 30, 2023. This reflected a decrease in total print revenue of $6,225 due primarily to the shutdown of Athlon Outdoor print operations and a 3.9% decrease in digital revenue from $91,711 for the nine months ended September 30, 2023 to $88,129 for the nine months ended September 30, 2024.
Previous wording
The primary drivers of the decrease in our digital revenue are a decrease in our digital subscriptions of $3,143 and a $1,530 decline in licensing and syndication revenue, partially offset by a 3.2%, or $1,354, increase in our digital advertising revenue from $42,112 for the six months ended June 30, 2023 to $43,466 in the current year period. In addition, other digital revenue increased by $1,237 to $3,007 for the six months ended June 30, 2024 driven by the expansion in our e-commerce revenue.
Current wording
The primary drivers of the decrease in our digital revenue are a decrease in our digital subscriptions of $4,298, a $3,830 decrease in our digital advertising revenue, and a $1,923 decrease in licensing and syndication revenue. In addition, other digital revenue increased by $6,469 to $9,327 for the nine months ended September 30, 2024 driven by the expansion in our e-commerce revenue.
Previous wording
For the six months ended June 30, 2024, we recognized cost of revenue of $36,473, as compared to $38,945 for the six months ended June 30, 2023, which represents a decrease of $2,472. Cost of revenue for the six months ended June 30, 2024 was impacted by decreases in technology, Platform and software licensing fees of $708, printing, distribution and fulfillment costs of $1,299, stock-based compensation costs of $2,135, and amortization of developed technology and platform development of $1,636; partially offset by increases in Publisher Partner revenue share payments of $769 and content and editorial expenses of $2,224.
Current wording
For the nine months ended September 30, 2024, we recognized cost of revenue of $53,035, as compared to $61,991 for the nine months ended September 30, 2023, which represents a decrease of $8,956. Cost of revenue for the nine months ended September 30, 2024 was impacted by decreases in printing, distribution and fulfillment costs of $1,919, stock-based compensation costs of $2,728, amortization of developed technology and platform development costs of $2,353, technology, Platform and software licensing fees of $1,829, and Publisher Partner revenue share payments of $2,000; partially offset by increases in content and editorial expenses of $1,511.
Previous wording
For the six months ended June 30, 2024, we incurred selling and marketing costs of $8,315, as compared to $12,751 for the six months ended June 30, 2023. The decrease in selling and marketing costs of $4,436 is primarily related to decreases in payroll and employee benefits costs of $1,589, professional marketing services of $1,783, advertising costs of $382 and stock based compensation of $517; partially offset by other selling and marketing expenses of $177.
Current wording
For the nine months ended September 30, 2024, we incurred selling and marketing costs of $10,326, as compared to $19,173 for the nine months ended September 30, 2023. The decrease in selling and marketing costs of $8,847 is primarily related to decreases in payroll and employee benefits costs of $4,380 due to restructuring activities and reduction in direct sales workforce. In addition, decreases were noted in professional marketing services of $2,644, advertising costs of $492, circulation costs of $732, and stock based compensation of $772; partially offset by other selling and marketing expenses of $174.
Previous wording
For the six months ended June 30, 2024, we incurred general and administrative costs of $18,767 as compared to $24,576 for the six months ended June 30, 2023. The $5,809 decrease in general and administrative expenses is primarily due to decreases in stock-based compensation of $7,291; partially offset by an increase in payroll and related expenses of $459 and professional services, including accounting, legal and insurance of $1,137.
Current wording
For the nine months ended September 30, 2024, we incurred general and administrative costs of $24,790 as compared to $35,516 for the nine months ended September 30, 2023. The $10,726 decrease in general and administrative expenses is primarily due to decreases in stock-based compensation of $9,473, payroll and related expenses of $1,258, and other general and administrative expenses of $1,136; partially offset by an increase in professional services, including accounting, legal and insurance of $1,141.
Previous wording
Change in Fair Value of Contingent Consideration. The change in fair value of contingent consideration of $313 for the six months ended June 30, 2024 represents the change in the put option on our common stock in connection with the Fexy Studios acquisition.
Current wording
Change in Fair Value of Contingent Consideration. The change in fair value of contingent consideration for the nine months ended September 30, 2024 of $313, represents the change in the put option on our common stock in connection with the Fexy Studios acquisition.
Previous wording
Interest Expense. We incurred interest expense of $8,588 and $9,183 for the six months ended June 30, 2024 and 2023, respectively, a decrease of $595 from the prior period, as a result of interest rate changing.
Current wording
Interest Expense. We incurred interest expense of $11,747 and $13,225 for the nine months ended September 30, 2024 and 2023, respectively, a decrease of $1,478 from the prior period, as a result of interest rate changing.
Previous wording
Liquidated Damages. We recorded $152 of accrued interest on our liquidated damages payable for the six months ended June 30, 2024 primarily from the issuance of our convertible debentures, Series H convertible preferred stock, Series I convertible preferred stock, Series J convertible preferred stock and Series K convertible preferred stock in prior years. We recorded $304 of accrued interest on our liquidated damages payable for the six months ended June 30, 2023 primarily from issuance of the same securities as described above.
Current wording
Liquidated Damages. We recorded $229 of accrued interest on our liquidated damages payable for the nine months ended September 30, 2024 primarily from the issuance of our convertible debentures, Series H convertible preferred stock, Series I convertible preferred stock, Series J convertible preferred stock and Series K convertible preferred stock in prior years. We recorded $455 of accrued interest on our liquidated damages payable for the nine months ended September 30, 2023 primarily from issuance of the same securities as described above.