Arena Group Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

($ in thousands, unless otherwise stated)

1. Summary of Significant Accounting Policies

Basis of Presentation

The condensed consolidated financial statements include the accounts of The Arena Group Holdings, Inc. and its wholly owned subsidiaries (“The Arena Group” or the “Company”), after eliminating all significant intercompany balances and transactions.

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete audited financial statements. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements, which are included in The Arena Group’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on April 15, 2025.

The condensed consolidated financial statements as of June 30, 2025 and 2024, and for the three and six months ended June 30, 2025 and 2024, are unaudited but, in management’s opinion, include all adjustments necessary for a fair presentation of the results of interim periods. All such adjustments are of a normal recurring nature. The year-end condensed consolidated balance sheet as of December 31, 2024, was derived from audited financial statements, but does not include all disclosures required by GAAP. The results of operations for interim periods are not necessarily indicative of the results to be expected for the entire fiscal year.

The Company’s business and operations are sensitive to general business and economic conditions in the United States and worldwide. These conditions include short-term and long-term interest rates, inflation, fluctuations in debt and equity capital markets and the general condition of the United States and world economy. A host of factors beyond the Company’s control could cause fluctuations in these conditions. Adverse developments in these general business and economic conditions could have a material adverse effect on the Company’s financial condition and the results of its operations.

In addition, the Company will compete with many companies that currently have extensive and well-funded projects, marketing and sales operations as well as extensive human capital. The Company may be unable to compete successfully against these companies. The Company’s industry is characterized by rapid changes in technology and market demands. As a result, the Company’s products, services, or expertise may become obsolete or unmarketable. The Company’s future success will depend on its ability to adapt to technological advances, anticipate customer and market demands, and enhance its current technology under development.

Uncertainty in the global economy presents significant risks to the Company’s business. Increases in inflation, instability in the global banking system, geopolitical factors, including the ongoing conflicts in Ukraine and Israel and the responses thereto, and the impact of tariffs on print production costs and the overall market for advertising may have an adverse effect on the Company’s business. While the Company is closely monitoring the impact of the current macroeconomic conditions on all aspects of its business, the ultimate extent of the impact on its 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 the Company’s control and could exist for an extended period of time. As a result, the Company is subject to continuing risks and uncertainties.

Segment Reporting

The Company operates within the media industry, providing digital content across four primary verticals (as further described in Note 19) through its publishing platform. The Company leverages its publishing platform to build content verticals powered by anchor brands. The Company’s strategy is to focus on key subject matter verticals where audiences are passionate about a topic category where it can leverage the strength of its core brands to grow its audience and monetize editorially focused online content through various display and video advertisements that are viewed by internet users of the content. The Company hasfour reportable segments: Sports & Leisure, Finance, Lifestyle, and Platform. The Company’s reportable segments are organized in subject matter verticals that offer content on the respective topic.

The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer. The CODM evaluates performance and allocates resources for all of the Company's reportable segments based on segment gross profit. This segment profit measure is defined as segment revenue less segment cost of revenue, consisting of those costs and expenses directly attributable to the segment. The segment profit measure is used by the CODM to assess the performance of each segment by comparing the results of each segment with one another (see Note 19).

Going Concern Assessment

The Company’s condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. The Company’s condensed consolidated financial statements do not include any adjustments that might be necessary if it is unable to continue as a going concern.

For the three months and six months ended June 30, 2025 the Company reported income from continuing operations of $12,412, and $16,409, respectively. As of June 30, 2025, the Company had cash on hand of $6,771.

In prior periods, the Company disclosed that substantial doubt existed regarding its ability to continue as a going concern due to recurring losses, a working capital deficit, and limited liquidity. The Company continues to improve financial performance through revenue growth and reduction of costs and monthly cash requirements, and to maintain compliance with the terms of all outstanding debt agreements, and has taken actions to resolve current and potential future liabilities, such as resolving pending litigation. The Company posted consecutive profitable quarters in the third and fourth quarters of 2024 and the first and second quarters of 2025. The previously disclosed working capital deficit existed due to the Company’s classification of its outstanding debt as a current liability and the accrual of several liabilities from discontinued operations. These conditions no longer exist.

As a result of these developments, management has concluded that the conditions that previously raised substantial doubt about the Company’s ability to continue as a going concern no longer exist. Accordingly, management has determined that there is no longer substantial doubt about the Company’s ability to continue as a going concern for at least one year from the date the financial statements are issued.

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported results of operations during the reporting period. Significant estimates include: allowance for credit losses; capitalization of platform development and associated useful lives; goodwill and other acquired intangible assets and associated useful lives; assumptions used in accruals for potential liabilities; stock-based compensation and the determination of the fair value; valuation allowances for deferred tax assets and uncertain tax positions; and assumptions used to calculate contingent liabilities. These estimates are based on information available as of the date of the condensed consolidated financial statements; therefore, actual results could differ from management’s estimates.

Recently Issued Accounting Standards Updates

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. ASU 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions. The provisions of ASU 2023-09 are effective for annual periods beginning after December 15, 2024; early adoption is permitted using either a prospective or retrospective transition method. The Company expects ASU 2023-09 to require additional disclosures in the notes to its condensed consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures(Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU aims to enhance the transparency of financial reporting by requiring public business entities (PBEs) to provide detailed disclosures about the components of significant expense captions presented in the income statement. The Company will be required to disclose, in a tabular format, the amounts recognized within each relevant expense caption in the income statement. This

ASU is effective for fiscal years beginning after December 15, 2026; early adoption is permitted using either a prospective or retrospective transition method. The Company is not planning to early adopt. The Company expects ASU 2024-23 to require additional tabular disclosures in the notes to its condensed consolidated financial statements.

Income (loss) per Common Share

Basic net income (loss) per common share is computed using the weighted average number of common shares outstanding during the periods presented. Diluted net income (loss) per common share is computed using the weighted average number of common shares outstanding adjusted to include the potentially dilutive effect of stock awards.

The following table sets forth the computation of basic and diluted income (loss) per common share attributable to the Company’s stockholders(in thousands, except per share data):

(1) Includes: restricted stock awards only when the underlying restrictions expire, the shares are no longer forfeitable, and are thus vested; restricted stock units only when the underlying restrictions expire, the shares are no longer forfeitable, and are thus vested; and contingently issuable shares only when there are no circumstances under which those shares would not be issued.

(2)There wasno dilutive effect from the Series G convertible preferred stock, restricted stock units, or common stock options for the three and six months ended June 30, 2024 due to the net loss in the periods.

Potentially dilutive securities include dilutive common stock from assumed exercise of stock options, restricted stock units, and warrants, using the treasury stock method. Under the treasury stock method, potential shares outstanding are not included in the computation of diluted net income per common share if their effect is anti-dilutive. Anti-dilutive potential shares of common stock are as follows:

2. Discontinued Operations

On March 18, 2024, the Company discontinued the Sports Illustrated media business (the “SI Business”) that was operated under the Licensing Agreement with ABG-SI, LLC (“ABG”) dated June 14, 2019 (as amended to date, the “Licensing Agreement”). This discontinuation of the SI Business (i.e., discontinued operations) followed the termination of the Licensing Agreement by ABG on January 18, 2024. The last date of any obligation of the Company to perform under the Licensing Agreement was March 18, 2024. In connection with the termination, certain ABG Warrants vested (further described in Note 14).

On April 29, 2025, the ABG Group Legal Matters (as further described in Note 18) were resolved through a confidential settlement with outstanding liabilities being released by all sides. In connection with the settlement, all ABG Warrants were forfeited.

The table below sets forth the income (loss) from discontinued operations:

(1) Revenue for the three and six months ended June 30, 2025 include the derecognition of SI related subscription liabilities of $45,107 for which the Company has no remaining obligations.

(2) Cost of revenue and selling and marking expenses for the three and six months ended June 30, 2025, include adjustments to previously reported accounts payable that were settled for a reduced amount.

(3) General and administrative expenses for the three and six months ended June 30, 2025, include a reversal of SI business related liabilities, including a $45,000 termination fee liability (recorded in the six months ended June 30, 2024), a $3,750 royalty fee liability and $221 of previously reported accounts payable that was settled for a reduced amount.

(4) Loss on impairment of assets for the six months ended June 30, 2024 of $39,391, includes $8,601 for the impairment of intangible assets and $30,790 for the impairment of subscription acquisition costs.

The table below sets forth the major classes of liabilities of the discontinued operations:

(1) Further details related to the royalty fee liability of $3,750 and termination fee liability of $45,000 are described under the heading ABG Group Legal Matters in Note 18.

The table below sets forth the cash flows of the discontinued operations:

Further details regarding legal matters in connection with the discontinued operations are provided under the heading ABG Group Legal Matters in Note 18.

3. Acquisitions and Dispositions

The Company uses the acquisition method of accounting, which is based on ASC 805, Business Combinations (ASC 805), and uses the fair value concept which requires, among other things, that most assets acquired, and liabilities assumed be recognized at their fair values as of the acquisition date.

On May 12, 2025, the Company entered into a Membership Purchase Agreement to purchase 100% of the membership interests of TravelHost LLC from Simplify Inventions LLC ("Simplify") for a purchase price of $1,000. In addition to the acquisition of the membership interests, the acquisition also included an assignment of certain contracts from Bridge Media Networks, LLC, an affiliate of Simplify. The Company accounted for the transaction as an asset purchase as the acquisition did not meet the definition of a business under ASC 805, Business Combinations. The full purchase price was allocated to the intangible asset brand names.

4. Balance Sheet Components

The components of certain balance sheet amounts are as follows:

Accounts Receivable and Allowance for Credit Losses – The Company receives payments from advertising customers based upon contractual payment terms; accounts receivable is recorded when the right to consideration becomes unconditional and are generally collected within 90 days. The Company generally receives payments from digital subscription customers at the time of sign up for each subscription; accounts receivable from merchant credit card processors are recorded when the right to consideration becomes unconditional and are generally collected weekly. Accounts receivable have been reduced by an allowance for credit losses. The Company maintains the allowance for estimated losses resulting from the inability of the Company’s customers to make required payments. The allowance represents the current estimate of lifetime expected credit losses over the remaining duration of existing accounts receivable considering current market conditions and supportable forecasts when appropriate. The estimate is a result of the Company’s ongoing evaluation of collectability, customer creditworthiness, historical levels of credit losses, and future expectations. Accounts receivable are written off when deemed uncollectible and collection of the receivable is no longer being actively pursued. Accounts receivable as of June 30, 2025 and December 31, 2024 of $40,077 and $31,115, respectively, are presented net of allowance for credit losses.

The following table summarizes the allowance for credit losses activity:

Prepayments and Other Current Assets – Prepayments and other current assets are summarized as follows:

Under the provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and the subsequent extensions of the CARES Act, the Company was eligible for a refundable employee retention credit subject to certain criteria. As of June 30, 2025 and December 31, 2024, the Company has a receivable balance of $2,468 as presented in the above table.

Property and Equipment – Property and equipment are summarized as follows:

Depreciation and amortization expense for the three months ended June 30, 2025 and 2024 was $31 and $63, respectively. Depreciation and amortization expense for the six months ended June 30, 2025 and 2024 was $72 and $130, respectively. No impairment charges for the three or six months ended June 30, 2025 and 2024 were incurred.

Platform Development – Platform development costs are summarized as follows:

A summary of platform development activity for the six months ended June 30, 2025 is as follows:

Amortization expense for platform development for the three months ended June 30, 2025 and 2024 was $1,108 and $1,507, respectively. Amortization expense for platform development for the six months ended June 30, 2025 and 2024 was $2,384 and $3,056, respectively. Amortization expense for platform development is included in cost of revenue on the consolidated statements of operations and comprehensive loss. No impairment charges for platform development for the three or six months ended June 30, 2025 and 2024 were recorded on the consolidated statements of operations and comprehensive loss.

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

Intangible assets subject to amortization were recorded as part of the Company’s business acquisitions. Amortization expense for both the three months ended June 30, 2025 and 2024 was $850, and is included in cost of revenue on the condensed consolidated statements of operations and comprehensive loss. Amortization expense for the six months ended June 30, 2025 and 2024 was $1,699 and $1,770, respectively, and is included in cost of revenue on the condensed consolidated statements of operations and comprehensive loss.

No impairment charges from continuing operations for the three months ended June 30, 2025 and 2024 was recorded for intangible assets. Impairment charges for the six months ended June 30, 2024 of $1,198 was recorded as a result of the disposition of Fexy Studios intangible assets, including the advertiser relationships of $608 and brand names of $590, on the consolidated statements of operations and comprehensive loss. There wereno impairment charges for the six months ended June 30, 2025.

Accrued Expenses and Other – Accrued expenses and other are summarized as follows:

5. Leases

The Company has a real estate lease for the use of office space.

The table below presents supplemental information related to the operating lease:

(1)Operating lease costs are presented net of sublease income that is not material.

(2)There were no cash payments included in the measure of operating lease liabilities during the period since the Company has a deferral period through January 2026 before any cash payments are required under a lease with an effective date of April 1, 2024 and an initial lease term of 6.67 years.

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

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

The components of operating lease costs were as follows:

Maturities of the operating lease liabilities as of June 30, 2025 are summarized as follows:

6. Goodwill

Goodwill is as follows:

7. Liquidated Damages Payable

Liquidated damages were recorded as a result of the following: (i) certain registration rights agreements that provide for damages if the Company does not register certain shares of the Company’s common stock within the requisite time frame (the “Registration Rights Damages”); and (ii) certain securities purchase agreements that provide for damages if the Company does not maintain its periodic filings with the SEC within the requisite time frame (the “Public Information Failure Damages”).

Obligations with respect to the liquidated damages payable are summarized as follows:

(1)Consists of shares of common stock issuable to MDB Capital Group, LLC (“MDB”).

(2)Represents previously issued and converted debt or equity securities.

As of June 30, 2025 and December 31, 2024, the short-term liquidated damages payable were$3,381 and$3,230, respectively. The Company will continue to accrue interest on the liquidated damages balance at 1.0% per month based on the balance outstanding as of June 30, 2025, or$3,381, until paid. There is no scheduled date when the unpaid liquidated damages become due. The Series K convertible preferred stock remains subject to Registration Rights Damages and Public Information Failure Damages, which will accrue in certain circumstances, limited to 6% of the aggregate amount invested.

During the six months ended June 30, 2025 and 2024, the Company recorded accrued interest on liquidated damages of$76 and $76, respectively. During the six months ended June 30, 2025 and 2024, the Company recorded accrued interest on liquidated damages of $151 and $152, respectively.

8. Fair Value

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

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

Level 1. Quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2. Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and

Level 3. Assets or liabilities for which fair value is based on valuation models with significant unobservable pricing inputs and which result in the use of management estimates.

The Company’s financial instruments consist of Level 1, Level 2 and Level 3 assets as of June 30, 2025 and December 31, 2024. As of June 30, 2025 and December 31, 2024, the Company’s cash and cash equivalents of $6,771 and $4,362, respectively, were Level 1 assets and included savings deposits, overnight investments, and other liquid funds with financial institutions.

Fexy Put Option – The Company accounted for certain common stock issued in connection with the Fexy Studios acquisition that was subject to a put option (the “Fexy Put Option”), which provided for a cash payment to the sellers on the first anniversary date of the closing (on January 11, 2024) in the event the common stock trading price on such date was less than the common stock trading price on the day immediately preceding the acquisition date of $8.10 per share, as a derivative liability, which required the Company to carry such amounts on the condensed consolidated balance sheets as a liability at fair value, as adjusted at each reporting period-end.

On February 15, 2024, in connection with the contingent consideration related to the acquisition of Fexy Studios, the Company agreed to pay the amount due of $2,478 in four (4) equal installments of approximately $620 starting February 16, 2024 (paid $620 in February 2024) and then on the 15th day of March (paid $620 in March 2024), April (paid $620 in April 2024) and May (paid $620 in May 2024) of 2024 comprised of the following: (i) $2,225 pursuant to the Fexy Put Option where the Company gave the recipients of the contingent consideration a right to put their 274,692 shares of the Company’s common stock; (ii) $200 deferred payment due under the purchase agreement; and (iii) $53 in other costs and reimbursable transition expenses payable. During the six months ended June 30, 2024, the Company paid the Fexy Put Option and recorded the repurchase of 274,692 shares of the Company’s common stock issued in connection with the acquisition, resulting in a loss of $379 as reflected on the condensed consolidated statements of stockholders’ deficiency.

In connection with the Fexy Put Option, during thesix months ended June 30, 2024, the Company recognized a loss in change in valuation of the contingent consideration of $313, as reflected in other expense on the consolidated statements of operations.

The Simplify Loan (as described below), carried at amortized costs, has a carrying value of $2,651 and $10,651 as of June 30, 2025 and December 31, 2024, respectively, and the Term Debt (as described below), carried at amortized cost, has a carrying value of $110,499 and $110,436 as of June 30, 2025 and December 31, 2024, respectively.

9. Simplify Loan

On August 19, 2024, the Company entered into an amended and restated promissory note (the “Amended Promissory Note”), in connection with the amendment to the March 13, 2024 working capital loan agreement with Simplify, a related party as further described in Note 17 (the “Simplify Loan”), pursuant to which the Company has 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). The Simplify Loan is secured by certain assets of the Company and its subsidiaries, which are also guarantors of the obligations. In connection with the Amended Promissory Note, on August 19, 2024, the Company 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 for shares of the Company’s common stock. In the event of a default, including but not limited to the failure to pay any amounts when due, the interest will accrue at the Applicable Interest Rate plus five percent (5.0%) and the Simplify Loan will be payable upon demand to Simplify. As of June 30, 2025 and December 31, 2024, the balance outstanding on the Simplify Loan was $2,651 and $10,651, respectively.

Information for the three and six months ended June 30, 2025 and 2024, with respect to interest expense related to the Simplify Loan is provided under the heading Interest Expense in Note 11.

10. Term Debt

Pursuant to the Note Purchase Agreement, as amended from time-to time, leading to the Third Amended and Restated Note Purchase Agreement dated December 15, 2022 (the “Third Amended and Restated Notes”), as of June 30, 2025 and December 31, 2024, the Company has notes outstanding referred to as the senior secured notes (the “Senior Secured Notes”), the delayed draw term notes (the “Delayed Draw Term Notes”), the 2022 bridge notes (the “2022 Bridge Notes”) and the 2023 Notes (as defined below), as further described below (see Note 17) and collectively referred to as the “Term Debt”.

Senior Secured Notes

The terms of the Senior Secured Notes provide for:

Delayed Draw Term Notes

The terms of the Delayed Draw Term Notes provide for:

2022 Bridge Notes

The terms of the 2022 Bridge Notes provide for:

2023 Notes

The terms of the 2023 Notes, pursuant to Amendment No. 1 under the Third Amended and Restated Notes dated August 14, 2023, provide for:

The following table summarizes Term Debt:

The debt issuance costs incurred, as amended based on certain debt modifications, are being amortized on a straight-line basis (which approximates the effective interest method) over the applicable term of the Term Debt.

On December 29, 2023, the Company failed to make the interest payment due on the Term Debt resulting in an event of default with subsequent agreement to a forbearance period that was extended to September 30, 2024. On July 12, 2024, the Company entered into a third amendment to the Third Amended and Restated Notes dated as of December 15, 2022 (“Amendment No. 3”) which further deferred the accrued interest due date to December 31, 2024. On November 6, 2024, the Company received a letter from Renew (as described below) confirming the Company was not then in default under the Term Debt due to the cure of the default identified in the forbearance letter (as updated from time-to-time the “forbearance letter”), and all interest was paid as of December 31, 2024. Further details are provided under the heading Principal Stockholders in Note 17.

Information for the three and six months ended June 30, 2025 and 2024 with respect to interest expense related to the Term Debt is provided below.

11. Interest Expense

The following table represents interest expense:

12. Preferred Stock

The Company has the authority to issue 1,000,000 shares of preferred stock, $0.01 par value per share, consisting of authorized and/or outstanding shares as of June 30, 2025 as follows:

•1,800 authorized shares designated as “Series G Convertible Preferred Stock”, of which 168 shares are outstanding.

•23,000 authorized shares designated as “Series H Convertible Preferred Stock”, of whichno shares are outstanding.

13. Stockholders’ Deficiency

Common Stock

The Company has the authority to issue 1,000,000,000 shares of common stock,$0.01 par value per share.

Restricted Stock Units – The Company issued, in connection with the vesting of restricted stock units,4,999 and 68,975 shares of the Company’s common stock during the three months ended June 30, 2025 and 2024, respectively, as reflected on the condensed consolidated statements of stockholders’ deficiency. The Company issued, in connection with the vesting of restricted stock units,12,498 and 747,140 shares of the Company’s common stock during the six months ended June 30, 2025 and 2024, respectively, as reflected on the condensed consolidated statements of stockholders’ deficiency.

Common Stock Withheld – The Company recorded the repurchase of 2,061 shares related to vested restricted common stock for the payment for taxes of $12 during the three months ended June 30, 2025, and the repurchase of 8,606 shares related to vested restricted common stock for the payment for taxes of $7 during the three months ended June 30, 2024, as reflected on the consolidated statements of stockholders’ deficiency. The Company recorded the repurchase of 4,875 shares related to vested restricted common stock for the payment for taxes of $16 during thesix months ended June 30, 2025, and the repurchase of 290,777 shares related to vested restricted common stock for the payment for taxes of $486 during the six months ended June 30, 2024, as reflected on the consolidated statements of stockholders’ deficiency.

Common Stock Purchase Agreement – On August 19, 2024, in connection with the Amended Promissory Note, the Company and Simplify entered into a Common Stock Purchase Agreement, where $15,000 of outstanding indebtedness under the March 13, 2024 Simplify Loan was exchanged for 17,797,817 shares of the Company’s common stock at a purchase price of approximately 0.84 per share, based on a 60-day volume weighted-average price of the Company’s common stock, as reflected on the condensed consolidated statements of stockholders’ deficiency. Further information is provided in Note 17.

Common Stock Private Placement – On February 14, 2024, the Company entered into a subscription agreement (the “Subscription Agreement”) with Simplify, pursuant to which the Company agreed to sell and issue to Simplify in a private placement (the “Private Placement”) an aggregate of 5,555,555 shares (the “Private Placement Shares”) of the Company’s common stock, at a purchase price of $2.16 per share, a price equal to the 60-day volume weighted average price of the Company’s common stock. The Private Placement closed on February 14, 2024 and the Company received proceeds from the Private Placement of $12,000 as reflected on the condensed consolidated statements of stockholders’ deficiency. The proceeds were used for working capital and general corporate purposes. Further information is provided in Note 17.

14. Compensation Plans

The Company provides stock-based and equity-based compensation in the form of (a) restricted stock awards and restricted stock units to certain employees (the “Restricted Stock”), (b) stock option awards, unrestricted stock awards and stock appreciation rights to employees, directors and consultants under various plans (the “Common Stock Options”), and (c) common stock warrants, referred to as the ABG Warrants and Publisher Partner Warrants (collectively the “Warrants”) as referenced in the below table. The ABG Warrants were forfeited as part of the ABG settlement as noted below.

Stock-based compensation and equity-based expense charged to operations or capitalized are summarized as follows:

Unrecognized compensation expense and expected weighted-average period to be recognized related to the stock-based compensation awards and equity-based awards as of June 30, 2025 were as follows:

Vesting of Warrants – On January 2, 2024, in connection with the default under the Licensing Agreement, the performance based Warrants totaling 599,724 vested as a result of the default pursuant to certain provisions where all of the ABG Warrants automatically vest upon certain terminations of the Licensing Agreement by ABG. Of the ABG Warrants that vested,449,793 had an exercise price of $9.24 per share and 149,931 had an exercise price of $18.48 per share. The accelerated vesting of the ABG Warrants did not result in any additional stock-based compensation expense during the three or six months ended June 30, 2024. The ABG Warrants were forfeited as part of the ABG settlement.

15. Revenue Recognition

Disaggregation of Revenue

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

For the three months and six months ended June 30, 2025 and 2024, disaggregated revenue represents revenue from continuing operations.

Revenues recognized from existing unearned revenue were$1,541 and$3,739 for thethree and six months ended June 30, 2025, respectively. Revenues recognized from existing unearned revenue were$4,204 and$11,352 for thethree and six months ended June 30, 2024, respectively.

Contract Balances

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

The following table provides information about contract balances:

The unearned revenue recognized during the six months ended June 30, 2025 was $5,925.

16. Income Taxes

The provision for income taxes in interim periods is determined using an estimate of the Company’s annual effective tax rate ("ETR"), adjusted for discrete items, if any, that arise during the period. In calculating the provision for interim income taxes, an estimated annual ETR is applied to year-to-date ordinary income. At the end of each interim period, the Company updates its estimate of the annual ETR expected to be applicable for the full fiscal year.

The income tax provision ETR for the three months ended June 30, 2025 and 2024 was 7.31% and (0.51)%, respectively, and for the six months ended June 30, 2025 and 2024 was 7.16% and (0.39)%, respectively. The increase in the ETR for the three and six months ended June 30, 2025, compared to the same periods in 2024, was primarily due to higher federal and state income taxes resulting from pre-tax income in the three and six months ended June 30, 2025 as compared to losses for the same periods in 2024.

The Company's ETR for the three and six months ended June 30, 2025 and 2024 remained below the U.S. federal statutory rate primarily due to the impact of the full valuation allowance. Based upon the Company’s historical operating losses, despite the reported positive pre-tax income during the three and six months ended June 30, 2025, management concluded that the evidence of recent profitability was not yet sufficient to overcome the negative evidence of cumulative losses in recent years. As a result, the Company has provided a valuation allowance against the deferred tax assets that will not be realized as of June 30, 2025 and 2024.

As of June 30, 2025 and 2024, the Company has no uncertain tax positions or interest and penalties accrued related to income taxes.

On July 4, 2025, the One Big Beautiful Bill Act (the “Act") was signed into law. The Act makes permanent key elements of the U.S. Tax Cuts and Jobs Act of 2017, including bonus depreciation and domestic research cost expensing, and interest deductibility. The Company is currently evaluating the impact of the Act upon our future effective tax rate, tax liabilities, and cash taxes.

17. Related Party Transactions

Principal Stockholders

Business Acquisition - On May 12, 2025, the Company entered into a Membership Purchase Agreement to purchase 100% of the membership interests of TravelHost LLC from Simplify for a purchase price of $1,000. In addition to the acquisition of the membership interests, the acquisition also included an assignment of certain contracts from Bridge Media Networks, LLC, an affiliate of Simplify.

Term Debt– On January 5, 2024, as part of negotiations with Renew Group Private Limited (“Renew”), an affiliated entity of Simplify, in connection with the Company’s failure on December 29, 2023 to make the interest payment due on the Term Debt, dated December 15, 2022 held by Renew in the amount of $2,797, that resulted in an event of default under the Term Debt, Renew agreed in writing to a forbearance period through March 29, 2024 (subsequently extended to September 30, 2024), that was originally subject to the Company retaining a chief restructuring officer acceptable to Renew, while reserving its rights and remedies. In connection with the forbearance, the Company had an engagement with FTI Consulting Inc., a global business advisory firm (“FTI”) from January 5, 2024 through April 26, 2024, to assist the Company with its turnaround plans and forge an expedited path to sustainable positive cash flow and earnings to create shareholder value (the “FTI Engagement”). In connection with the FTI Engagement, Jason Frankl, a senior managing director of FTI, was appointed as the Company’s Chief Business Transformation Officer. He was later appointed as the interim Co-President. Upon completion of their work under the FTI Engagement satisfactory to Renew and the Company, the FTI Engagement was terminated as of April 26, 2024 and Mr. Frankl resigned as Co-President and Chief Business Transformation Officer.

On July 12, 2024, as described above, the Company entered into 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 was due on or before December 31, 2024, as well as the interest otherwise due on December 31, 2024 (all of which was paid before December 31, 2024). The deferral was contingent on, among other things, no events of default occurring under the Term Debt during the deferral period. On November 6, 2024, the Company received a letter from Renew confirming the Company is not currently in default under the Term Debt due to the cure of the default identified in the forbearance letter (see Note 10). As of June 30, 2025, the outstanding principal on the Term Debt was $110,691.

For the three andsix months ended June 30, 2025, the Company had certain transactions with Renew, where it paid interest totaling $2,798 and $5,565, respectively, under the Term Debt. Pursuant to the forbearance letter, no interest was paid for the six months ended June 30, 2024.

Simplify Loan– For the three and six months ended June 30, 2025, the Company had certain transactions with Simplify, where it paid interest totaling $114 and $308, respectively, under the Simplify Loan. Pursuant to the forbearance letter, no interest was paid for the three and six months ended June 30, 2024.

Simplify Revenue –For the three andsix months ended June 30, 2025, the Company recognized digital advertising revenue from transactions with Living Essentials, LLC (“Living Essentials”), an affiliated entity of Simplify, totaling $880 and $1,830, respectively. The outstanding accounts receivable due from Living Essentials were $1,905 as of June 30, 2025.

Common Stock Private Placement–As a result of the issuance of the Private Placement Shares to Simplify, Simplify owns approximately 54.3% (subsequently increased to 71.4% in connection with the Common Stock Purchase Agreement) of the outstanding shares of the Company’s common stock, resulting in a change in control. As a result, Simplify has the ability to determine the outcome of any issue submitted to the Company’s stockholders for approval, including the election of directors. Prior to the consummation of the Private Placement, the Company’s public stockholders held a majority of the outstanding shares of the Company’s common stock.

18. Commitments and Contingencies

Legal Contingencies

Claims and Litigation – From time to time, the Company may be subject to claims and litigation arising in the ordinary course of business. The outcome of any litigation is inherently uncertain. Based on the Company’s current knowledge it believes that the final outcome of the matters discussed below will not likely, individually or in the aggregate, have a material adverse effect on its business, financial position, results of operations or cash flows; however, in light of the uncertainties involved in such matters, there can be no assurance that the outcome of each case or the costs of litigation, regardless of outcome, will not have a material adverse effect on the Company’s business.

On January 30, 2024, the former President, Media filed an action against the Company and Manoj Bhargava, the former interim CEO and a principal stockholder, alleging claims for breach of contract, failure to pay wages and defamation, among other things, in the United States District Court of the Southern District of New York, seeking damages in an unspecified amount. On November 15, 2024, the Company has executed a confidential settlement agreement with the former President, Media which fully resolved the matter to the satisfaction of the parties to the litigation.

On March 21, 2024, the former CEO and Chairman of the board of directors filed an action against the Company, members of its board of directors and Simplify, alleging claims for retaliation, breach of contract, wrongful termination and age discrimination, among other things, in the Superior Court of the State of California seeking damages in an amount of $20,000. The Company and former board member Carlo Zola filed a Cross Complaint and Answer on June 20, 2024. Apart from Mr. Zola, the remaining individual board member defendants successfully filed a Motion to Quash Service of Summons based on lack of jurisdiction, and they have been dismissed from the case. On September 13, 2024, the former CEO and Chairman filed an Answer to the Company’s Cross Complaint. On April 8, 2025, the former CEO and Chairman, the Company, and Mr. Zola filed a Stipulation to allow the former CEO and Chairman to file a First Amended Complaint, which adds a new cause of action for alleged breach of contract based upon the Company’s refusal to advance certain attorneys’ fees to him. The Court has not yet approved the filing of the First Amended Complaint, and the Company will respond to the First Amended Complaint in due course. The Company intends to vigorously defend itself against the allegations made in this lawsuit.

ABG Group Legal Matters

On March 18, 2024, the Company discontinued the Sports Illustrated media business (the “SI Business”) that was operated under a Licensing Agreement with ABG-SI, LLC (“ABG”). The disposal of the SI Business represented the discontinuation of the Company’s print subscription business, which was a component that represented a strategic shift that had a major effect on the Company’s financial results, and the component was classified as a discontinued operation.

On April 1, 2024, ABG and certain of its affiliates (the "ABG Group") filed an action against the Company and Manoj Bhargava, the former interim CEO and a principal stockholder, in the United States District Court of the Southern District of New York alleging, among other things, breach of contract related to the termination of the SI business, seeking damages in the amount of $48,750 ($3,750 royalty fee liability and $45,000 termination fee liability) that had been reflected in current liabilities from discontinued operations as of June 30, 2024 resulting from the March 18, 2024 action.

On June 7, 2024, the Company filed a response denying the ABG Group’s alleged breach of contract action and filed a counterclaim against the ABG Group and Minute Media, Inc., alleging, among other things, unfair competition, misappropriation of trade secrets, unjust enrichment, breach of contract, and tortious interference with contract.

On April 29, 2025, the Company entered into a confidential settlement agreement with the ABG Group and Minute Media, Inc., resolving all outstanding claims and counterclaims related to the matter. As a result, the Company has released the previously accrued liability related to the ABG dispute, with no further obligations remaining under the terminated licensing agreement. The ABG Warrants were also forfeited as part of the settlement. The impact of the settlement is reflected in the condensed consolidated financial statements for the three and six months ended June 30, 2025.

19. Segment Reporting

The Company leverages its Platform to build content verticals powered by anchor brands. The Company’s strategy is to focus on key subject matter verticals where audiences are passionate about a topic category where it can leverage the strength of its core brands to grow its audience and monetize editorially focused online content through various display and video advertisements that are viewed by internet users of the content.

The Company’s CODM is the Chief Executive Officer. The Company’s CODM reviews segment gross profit by vertical when evaluating performance and making resource allocation decisions rather than focusing on consolidated company net income, which resulted in a change to reportable segments. The prior period presented has been re-cast to reflect this change. Changes to the CODM in subsequent periods may result in a change to reportable segments. This segment profit measure is defined as segment revenue less segment cost of revenue, consisting of costs and expenses directly attributable to the segment. The Company hasfour reportable segments: Sports & Leisure, Finance, Lifestyle, and Platform. The Company’s reportable segments are organized in subject matter verticals that offer content on the respective topic.

Each of the reportable segments derives its revenue from digital advertising, digital subscriptions, performance marketing, publisher revenue, and licensing and publisher revenues.

The following tables summarize key financial information by segment:

The Company’s long-lived assets, consisting of property and equipment, and operating leases, are located in the United States. No asset information is provided to the CODM.

20. Subsequent Events

On July 31, 2025, the Company announced a share repurchase program under which the Company may repurchase up to 3 million shares of its common stock through July 31, 2026. The Company may repurchase shares from time to time through open-market transactions, privately negotiated transactions, or otherwise, including under Rule 10b5-1 trading plans, subject to market conditions, share price, and other factors. The program may be suspended, modified, or terminated at any time. The share repurchase program will be funded through operating cash flow.