Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries The Arena Group Reports Record Revenues and Audience Growth for Third Quarter of 2021 By: The Arena Group via Business Wire November 15, 2021 at 16:06 PM EST Third Quarter Revenues up 86% and Sports Audience Grows 166% Year-Over-Year; Growth and Contribution Margin Demonstrates Business Model Effectiveness TheMaven, Inc. operating under the brand name “The Arena Group” (OTCQX: MVEN), a tech-powered media company (“Company”), today announced financial results for the three and nine-month period ended September 30, 2021. 2021 Financial and Operational Highlights Total revenue increased 86% to $59.6 million in the third quarter of 2021 compared to $32.1 million in the third quarter of 2020. Revenue for the first nine months of 2021 increased 50% to $127.9 million compared to $85.6 million, effectively matching the full-year 2020 revenue. Advertising revenue increased 130% to $21.7 million in the third quarter of 2021 compared to $9.4 million in the third quarter of 2020, reflecting the improved monetization and efficiency of the Company’s unified technology platform. The company ended the third quarter with recurring subscription revenue accounting for more than 50% of all revenues. Magazine circulation revenue increased 102% to $26.0 million in the third quarter of 2021 compared to $12.9 million in the third quarter of 2020, reflecting higher subscriber levels and the diminishing effect of acquisition accounting adjustments from the commencement of Sports Illustrated media group operations in 2019. Quarterly gross profit percentage doubled to 46% compared to 23% in the third quarter of 2020. Net Loss, inclusive of a $7.3 million non-cash charge for exiting the Company’s New York City office lease, was $24.7 million, or $(0.10) per basic and diluted share for the quarter, compared to a net loss of $21.4 million, or $(0.55) per basic and diluted share, in the third quarter of 2020, a 68% improvement year-over-year. Recent Business Highlights The successful launch of the Sports Illustrated Sportsbook in September has provided robust content offerings for sports bettors and fantasy players nationwide, and the opportunity for fans to place bets in Colorado. A strategic partnership in podcasting and audio with iHeartMedia, the leading audio and media company in America, kicked off during the third quarter of 2021 Since acquiring The Spun in June, monthly revenue has tripled to more than $2 million with expenses remaining relatively flat; its monthly audience has increased by 50% to more than 30 million users; and monthly page views have doubled to more than 110 million. The Company paid a net $7.4 million in cash as part of the purchase price for The Spun, and expects to recover this cash outlay from The Spun’s operations before the end of this year. SI Swim executed a rebranding and pivot towards becoming a female lifestyle brand. As a result, revenues doubled over the same period in 2020 and impressions grew by more than 15 billion year-over-year. The Arena Group’s social presence has expanded with video views across social platforms increasing to over 170 million, highlighted by two original series on Snap; a large presence on TikTok and the growth of its brands across Instagram. Management Commentary “Since I was asked to lead this business last September, the executive team and I have already achieved our initial goals to transform this company and make it a highly efficient, data driven, technology powered media company that could scale operations, grow audiences, expand margins and drive profitable growth,” said Ross Levinsohn, Chairman and Chief Executive Officer of The Arena Group. “With a proven model, and tremendous momentum heading into 2022, we believe we will expand our footprint and business operations into new verticals, and new areas of growth including the launch of a commerce initiative and plans to enter both the NFT and Metaverse in the year ahead. With premium brands, award-winning content and broad distribution reaching more than 120 million people every month, we are well-positioned to grow in the fourth quarter of 2021, fiscal 2022 and beyond.” “Over the past year, we have successfully expanded our sports vertical, anchored by Sports Illustrated, the most trusted brand in sports,” added Levinsohn. “Premium content delivered to multiple platforms and diversified revenue has helped us grow exponentially this year. Our sports vertical is the fastest growing media property in the United States, according to Comscore, growing unique visitors by 166% year-over-year. Importantly, our sports media vertical reached nearly 53 million monthly users according to Comscore in September. This impressive improvement in content, traffic, and monetization serves as the formula for additional verticals that we plan to pursue.” “Our financial vertical, anchored by The Street.com, and featuring a robust, highly profitable subscription business, will follow this clear and proven roadmap,” continued Levinsohn. “We anticipate announcing several important developments about the future of this flagship product over the course of the coming weeks and months. In addition, we expect to expand into additional verticals in the same fashion, with the goal of launching new verticals over the next 16 months, all benefiting from our innovative and expert approach and our scalable technology platform.” “In the first nine months of 2021, we have generated approximately $128 million in revenue, essentially matching our full-year revenue last year, demonstrating rapid growth,” added Levinsohn. “With accelerating momentum and continued optimization and growth of our traffic, we anticipate a meaningful improvement in profitability going forward. We have begun the process of uplisting to a national exchange, and while we do not control the timing or outcome of this process, we plan to move as quickly as possible.” Financial Results for the Three Months Ended September 30, 2021 Compared to the Three Months Ended September 30, 2020 Revenue was $59.6 million for the quarter, up 86% compared to $32.1 million. The increase was due to a 130% increase in advertising revenue to $21.7 million. The increase in advertising revenue was primarily due to additional revenue of approximately $6.8 million generated as a result of a doubling of advertising sponsorships of the Sports Illustrated Swim business and other growth in the Sports Illustrated media business, and approximately $5.5 million from the addition of The Spun, which was acquired during the second quarter of 2021. In addition, magazine circulation revenue increased by 102% to $26.0 million for the third quarter of 2021 reflecting a drive to increase subscribers in the fourth quarter of 2020 and the diminishing effect of acquisition accounting adjustments on the subscribers that existed when the Company began operating the Sports Illustrated Media Group in October of 2019. Other revenue (primarily licensing and e-commerce revenue) increased by 216% to $4.2 million during the third quarter of 2021 driven in part by an increase in advertising and sponsorships related to the SI Swim and other Sports Illustrated media businesses. These increases were partially offset by a 9% decrease in digital subscription revenue to $7.7 million for the third quarter of 2021, compared to approximately $8.5 million for the third quarter of 2020. Digital subscription revenue represented approximately 12.9% of total revenue in the third quarter of 2021 compared to 26.4% during the same period last year. Gross profit was $27.4 million, representing a 46% gross profit percentage for the third quarter of 2021, which was double the gross profit percentage of 23% on gross profit of $7.4 million for the third quarter of 2020. For the three months ended September 30, 2021 and 2020, the Company recognized cost of revenue of approximately $32.2 million and approximately $24.7 million, respectively. The increase in cost of revenue of approximately $7.5 million is primarily related to: printing, distribution, and fulfillment costs of approximately $3.4 million, reflecting increase production costs related the SI Swim issue and sponsorships; payroll, stock-based compensation, and related expenses for customer support, technology maintenance, and occupancy costs of related personnel of approximately $2.6 million; other costs of revenue related to SI Swim events of approximately $1.3 million; and amortization of our platform of approximately $0.2 million. Total operating expenses were approximately $49.8 million in the third quarter of 2021 compared to $21.2 million in the third quarter of 2020. The increase was due to a $7.3 million non-cash charge related to exiting the Company’s lease in its New York City office, a $4.2 million non-cash increase in stock-based compensation expense and a $9.4 million increase in circulation expenses tied to the increase of $13.1 million in magazine circulation revenue. Net loss was $24.7 million, or $(0.10) per basic and diluted share for the third quarter of 2021, compared to a net loss of $21.4 million, or $(0.55) per basic and diluted share for the third quarter of 2020, a 82% improvement year over year. Financial Results for the Nine Months Ended September 30, 2021 Compared to the Nine Months Ended September 30, 2020 Revenue was $127.9 million year-to-date, up 50% compared to $85.6 million. The increase reflects a diversification of revenue including a 61% increase in advertising revenue, a 57% increase in magazine circulation revenue, a 12% increase in digital subscription revenue and a 119% increase in other revenue. Gross profit for the nine months ended September 2021, was $44.0 million compared to $9.3 million during the same period last year. Total operating expenses were $111.3 million during this period, compared to approximately $64.8 million for the same period last year. However, of the $46.5 million increase in costs, $16.4 million were non-cash items including stock based compensation and a charge related to the exiting of our New York City lease, and $22.4 million was an increase in circulation expense, which was correlated to a $19.3 million increase in magazine circulation revenue. Net loss was $70.8 million, or $(0.29) per basic and diluted share for the nine months ended September 30, 2021, compared to a net loss of $67.2 million, or $(1.72) per basic and diluted share for the prior year period. Balance Sheet and Liquidity as of September 30, 2021 Cash and cash equivalents were $8.2 million as of September 30, 2021, compared to $6.7 million as of June 30, 2021 and $9.0 million as of December 31, 2020. For the nine months ended September 30, 2021, net cash used in operating activities was approximately $8.3 million, as compared to $20.3 million in the prior year period, a $12.0 million improvement. The improvement was a result of a $42.9 million increase in cash received from customers (including payments received in advance of performance obligations) to $125.1 million in the nine months ended September 30, 2021 from $82.1 million in the prior year period, offset by a $30.5 million increase in cash paid (a) to employees, publisher partners, expert contributors, suppliers, and vendors, and (b) for revenue share arrangements and professional services and (c) cash paid for interest to $132.5 million in the nine months ended September 30, 2021 as compared $102.0 million for the nine months ended September 30, 2020. For the nine months ended September 30, 2021, net cash used in investing activities was approximately $10.7 million, consisting primarily of: (a) approximately $7.4 million used to acquire The Spun; (b) approximately $0.3 million for property and equipment; and (c) approximately $3.0 million for capitalized costs for the Company’s platform; as compared to the nine months ended September 30, 2020, where net cash used in investing activities was approximately $4.3 million consisting primarily of: (x) approximately $0.3 million used for the acquisition of a business; (y) approximately $1.1 million for property and equipment; and (z) approximately $2.9 million for capitalized costs for the Company’s platform. Conference Call Management will host a conference call to discuss these results today at 5 p.m. ET. To access the call, please dial 888-506-0062 (toll free) or 973-528-0011 and if requested, reference conference ID 306741. The conference call will also be webcast live on the Investor Relations section of The Arena Group’s website at https://investors.thearenagroup.net/news-and-events/events. Following the conclusion of the live call, a replay of the webcast will be available on the Investor Relations section of the Company's website for at least 90 days. A telephonic replay of the conference call will also be available from 7 p.m. ET on November 15, 2021 until 11:59 p.m. ET on November 29, 2021 by dialing 877-481-4010 (United States) or 919-882-2331 (international) and using the passcode 43643. About The Arena Group The Arena Group creates dynamic, digital destinations that delight consumers with stories and news about the things they love – their favorite sports teams, the inside scoop on personal finance, and the latest on lifestyle essentials. The Company's robust media ecosystem brings together consumers, publishers and advertisers while harnessing the authority of trusted brands and the editorial prowess of leading writers and editors. For more on best-in-class capabilities in direct sales and programmatic advertising, data, SEO, social, and operations, visit www.thearenagroup.net. Forward Looking Statements This press release includes statements that constitute forward-looking statements. Forward-looking statements may be identified by the use of words such as “forecast,” “guidance,” “plan,” “estimate,” “will,” “would,” “project,” “maintain,” “intend,” “expect,” “anticipate,” “prospect,” “strategy,” “future,” “likely,” “may,” “should,” “believe,” “continue,” “opportunity,” “potential,” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters, and include, for example, statements related to the expected effects on the Company’s business from the COVID-19 pandemic. These forward-looking statements are based on information available at the time the statements are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or suggested by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the duration and scope of the COVID-19 pandemic and impact on the demand for the Company products; the ability of the Company to expand its verticals; the Company’s ability to grow its subscribers; the Company’s ability to grow its advertising revenue; general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth; the effects of steps that the Company could take to reduce operating costs; the inability of the Company to sustain profitable sales growth; circumstances or developments that may make the Company unable to implement or realize the anticipated benefits, or that may increase the costs, of its current and planned business initiatives; and those factors detailed by theMaven, Inc. in its public filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K and Quarterly Reports on 10-Q. Should one or more of these risks, uncertainties, or facts materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by the forward-looking statements contained herein. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Except as required under the federal securities laws and the rules and regulations of the Securities and Exchange Commission, we do not have any intention or obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. THEMAVEN, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS September 30, 2021 December 31, 2020 (unaudited) Assets Current assets: Cash and cash equivalents $ 8,227,840 $ 9,033,872 Restricted cash 500,809 500,809 Accounts receivable, net 19,519,147 16,497,626 Subscription acquisition costs, current portion 31,257,268 28,146,895 Royalty fees, current portion 15,000,000 15,000,000 Prepayments and other current assets 4,875,177 4,667,263 Total current assets 79,380,241 73,846,465 Property and equipment, net 668,663 1,129,438 Operating lease right-of-use assets 2,048,900 18,292,196 Platform development, net 8,011,707 7,355,608 Royalty fees, net of current portion - 11,250,000 Subscription acquisition costs, net of current portion 18,682,545 13,358,585 Acquired and other intangible assets, net 57,817,905 71,501,835 Other long-term assets 692,021 1,330,812 Goodwill 22,861,872 16,139,377 Total assets $ 190,163,854 $ 214,204,316 Liabilities, mezzanine equity and stockholders’ deficiency Current liabilities: Accounts payable $ 9,443,576 $ 8,228,977 Accrued expenses and other 21,287,989 14,718,193 Line of credit 6,705,391 7,178,791 Unearned revenue 71,305,655 61,625,676 Subscription refund liability 4,379,364 4,035,531 Operating lease liabilities 282,011 1,059,671 Liquidated damages payable 11,765,706 9,568,091 Current portion of long-term debt 4,565,982 - Warrant derivative liabilities 651,083 1,147,895 Total current liabilities 130,386,757 107,562,825 Unearned revenue, net of current portion 19,207,736 23,498,597 Restricted stock liabilities, net of current portion 521,621 1,995,810 Operating lease liabilities, net of current portion 1,972,165 19,886,083 Other long-term liabilities 8,072,442 753,365 Deferred tax liabilities 577,960 210,832 Long-term debt, net of current portion 58,718,289 62,194,272 Total liabilities 219,456,970 216,101,784 Commitments and contingencies (1) - - Mezzanine equity: Series G redeemable and convertible preferred stock, $0.01 par value, $1,000 per share liquidation value and 1,800 shares designated; aggregate liquidation value: $168,496; Series G shares issued and outstanding: 168,496; common shares issuable upon conversion: 188,791 at September 30, 2021 and December 31, 2020 168,496 168,496 Series H convertible preferred stock, $0.01 par value, $1,000 per share liquidation value; aggregate liquidation value $19,546,000 and $19,596,000; Series H shares designated: 23,000; Series H shares issued and outstanding: 19,546 and 19,596; common shares issuable upon conversion: 59,243,926 and 59,395,476 shares at September 30, 2021 and December 31, 2020, respectively 18,197,496 18,247,496 Total mezzanine equity 18,365,992 18,415,992 Stockholders’ deficiency: Common stock, $0.01 par value, authorized 1,000,000,000 shares; issued and outstanding: 264,246,777 and 229,085,167 shares at September 30, 2021 and December 31, 2020, respectively 2,642,467 2,290,851 Common stock to be issued 10,809 10,809 Additional paid-in capital 182,787,419 139,658,166 Accumulated deficit (233,099,803 ) (162,273,286 ) Total stockholders’ deficiency (47,659,108 ) (20,313,460 ) Total liabilities, mezzanine equity and stockholders’ deficiency $ 190,163,854 $ 214,204,316 THEMAVEN, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Revenue $ 59,573,508 $ 32,089,993 $ 127,935,501 $ 85,593,786 Cost of revenue (includes amortization of developed technology and platform development for three months ended 2021 and 2020 of $2,241,243 and $2,089,286, respectively, and for nine months ended 2021 and 2020 of $6,565,600 and $6,348,619, respectively) 32,173,859 24,708,941 83,978,050 76,321,953 Gross profit 27,399,649 7,381,052 43,957,451 9,271,833 Operating expenses Selling and marketing 22,712,193 9,928,901 55,122,357 27,698,182 General and administrative 23,023,883 7,172,175 44,230,360 24,852,891 Depreciation and amortization 4,055,432 4,053,184 11,981,998 12,276,990 Total operating expenses 49,791,508 21,154,260 111,334,715 64,828,063 Loss from operations (22,391,859 ) (13,773,208 ) (67,377,264 ) (55,556,230 ) Other (expense) income Change in valuation of warrant derivative liabilities 801,755 (517,405 ) 496,812 (134,910 ) Change in valuation of embedded derivative liabilities - (2,370,000 ) - 2,173,000 Interest expense (2,512,637 ) (4,253,180 ) (7,695,317 ) (12,169,315 ) Interest income - 1,116 471 4,499 Liquidated damages (833,612 ) (319,903 ) (2,197,615 ) (1,487,577 ) Other expenses - (31,851 ) - (31,851 ) Gain upon debt extinguishment - - 5,716,697 - Total other expense (2,544,494 ) (7,491,223 ) (3,678,952 ) (11,646,154 ) Loss before income taxes (24,936,353 ) (21,264,431 ) (71,056,216 ) (67,202,384 ) Income taxes 229,699 - 229,699 - Net loss (24,706,654 ) (21,264,431 ) (70,826,517 ) (67,202,384 ) Deemed dividend on Series H convertible preferred stock - (132,663 ) - (132,663 ) Net loss attributable to common stockholders $ (24,706,654 ) $ (21,397,094 ) $ (70,826,517 ) $ (67,335,047 ) Basic and diluted net loss per common stock $ (0.10 ) $ (0.55 ) $ (0.29 ) $ (1.72 ) Weighted average number of common stock outstanding – basic and diluted 252,811,058 39,186,432 244,209,151 39,177,864 THEMAVEN, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) Nine Months Ended September 30, 2021 2020 Cash flows from operating activities Net loss $ (70,826,517 ) $ (67,202,384 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation of property and equipment 333,891 536,729 Amortization of platform development and intangible assets 18,213,707 18,088,880 Loss on disposition of assets 862,442 105,123 Loss upon lease termination 7,344,655 - Gain upon debt extinguishment (5,716,697 ) - Amortization of debt discounts 1,533,537 4,899,625 Change in valuation of warrant derivative liabilities (496,812 ) 134,910 Change in valuation of embedded derivative liabilities - (2,173,000 ) Accrued interest 5,273,159 6,832,376 Liquidated damages 2,197,615 1,487,577 Stock-based compensation 21,688,226 11,185,953 Deferred income taxes (229,699 ) - Other (1,014,932 ) (296,019 ) Change in operating assets and liabilities net of effect of acquisitions: Accounts receivable (173,266 ) 4,893,512 Subscription acquisition costs (8,434,333 ) (11,053,054 ) Royalty fees 11,250,000 11,250,000 Prepayments and other current assets (78,347 ) 327,088 Other long-term assets 638,791 (376,142 ) Accounts payable 1,214,599 (968,581 ) Accrued expenses and other 5,566,243 (2,484,525 ) Unearned revenue 5,389,118 2,871,080 Subscription refund liability 343,833 (169,693 ) Operating lease liabilities (2,448,282 ) 1,837,138 Other long-term liabilities (692,255 ) - Net cash used in operating activities (8,261,324 ) (20,273,407 ) Cash flows from investing activities Purchases of property and equipment (299,999 ) (1,085,392 ) Capitalized platform development (3,016,924 ) (2,885,788 ) Payments for acquisition of businesses, net of cash acquired (7,356,949 ) (315,289 ) Net cash used in investing activities (10,673,872 ) (4,286,469 ) Cash flows from financing activities Proceeds from long-term debt - 11,702,725 Borrowings (repayments) under line of credit (473,400 ) 3,328,431 Proceeds from common stock private placement 20,005,000 - Proceeds from issuance of Series H convertible preferred stock - 113,000 Proceeds from issuance of Series J convertible preferred stock - 6,000,000 Payments of issuance costs from common stock private placement (167,243 ) - Payment for taxes related to repurchase of restricted common stock (70,238 ) (322,778 ) Payment of restricted stock liabilities (1,164,955 ) - Net cash provided by financing activities 18,129,164 20,821,378 Net decrease in cash, cash equivalents, and restricted cash (806,032 ) (3,738,498 ) Cash, cash equivalents, and restricted cash – beginning of period 9,534,681 9,473,090 Cash, cash equivalents, and restricted cash – end of period $ 8,728,649 $ 5,734,592 Supplemental disclosure of cash flow information Cash paid for interest $ 896,580 $ 437,314 Cash paid for income taxes - - Noncash investing and financing activities Reclassification of stock-based compensation to platform development $ 1,347,624 $ 1,259,163 Issuance of common stock in connection with professional services 125,000 - Deferred cash payments in connection with acquisition of The Spun 905,109 - Assumption of liabilities in connection with acquisition of The Spun 1,500 - Debt discount on delayed draw term note - 913,865 Restricted stock units issued in connection with acquisition of LiftIgniter - 500,000 Assumption of liabilities in connection with acquisition of LiftIgniter - 140,381 Restricted stock issued in connection with acquisition of Fulltime Fantasy 502,500 - Deferred cash payments in connection with acquisition of Fulltime Fantasy 419,367 Deemed dividend on Series H convertible preferred stock - 132,663 View source version on businesswire.com: https://www.businesswire.com/news/home/20211115006254/en/Contacts Rob Fink FNK IR Arena@fnkir.com 646.809.4048 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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The Arena Group Reports Record Revenues and Audience Growth for Third Quarter of 2021 By: The Arena Group via Business Wire November 15, 2021 at 16:06 PM EST Third Quarter Revenues up 86% and Sports Audience Grows 166% Year-Over-Year; Growth and Contribution Margin Demonstrates Business Model Effectiveness TheMaven, Inc. operating under the brand name “The Arena Group” (OTCQX: MVEN), a tech-powered media company (“Company”), today announced financial results for the three and nine-month period ended September 30, 2021. 2021 Financial and Operational Highlights Total revenue increased 86% to $59.6 million in the third quarter of 2021 compared to $32.1 million in the third quarter of 2020. Revenue for the first nine months of 2021 increased 50% to $127.9 million compared to $85.6 million, effectively matching the full-year 2020 revenue. Advertising revenue increased 130% to $21.7 million in the third quarter of 2021 compared to $9.4 million in the third quarter of 2020, reflecting the improved monetization and efficiency of the Company’s unified technology platform. The company ended the third quarter with recurring subscription revenue accounting for more than 50% of all revenues. Magazine circulation revenue increased 102% to $26.0 million in the third quarter of 2021 compared to $12.9 million in the third quarter of 2020, reflecting higher subscriber levels and the diminishing effect of acquisition accounting adjustments from the commencement of Sports Illustrated media group operations in 2019. Quarterly gross profit percentage doubled to 46% compared to 23% in the third quarter of 2020. Net Loss, inclusive of a $7.3 million non-cash charge for exiting the Company’s New York City office lease, was $24.7 million, or $(0.10) per basic and diluted share for the quarter, compared to a net loss of $21.4 million, or $(0.55) per basic and diluted share, in the third quarter of 2020, a 68% improvement year-over-year. Recent Business Highlights The successful launch of the Sports Illustrated Sportsbook in September has provided robust content offerings for sports bettors and fantasy players nationwide, and the opportunity for fans to place bets in Colorado. A strategic partnership in podcasting and audio with iHeartMedia, the leading audio and media company in America, kicked off during the third quarter of 2021 Since acquiring The Spun in June, monthly revenue has tripled to more than $2 million with expenses remaining relatively flat; its monthly audience has increased by 50% to more than 30 million users; and monthly page views have doubled to more than 110 million. The Company paid a net $7.4 million in cash as part of the purchase price for The Spun, and expects to recover this cash outlay from The Spun’s operations before the end of this year. SI Swim executed a rebranding and pivot towards becoming a female lifestyle brand. As a result, revenues doubled over the same period in 2020 and impressions grew by more than 15 billion year-over-year. The Arena Group’s social presence has expanded with video views across social platforms increasing to over 170 million, highlighted by two original series on Snap; a large presence on TikTok and the growth of its brands across Instagram. Management Commentary “Since I was asked to lead this business last September, the executive team and I have already achieved our initial goals to transform this company and make it a highly efficient, data driven, technology powered media company that could scale operations, grow audiences, expand margins and drive profitable growth,” said Ross Levinsohn, Chairman and Chief Executive Officer of The Arena Group. “With a proven model, and tremendous momentum heading into 2022, we believe we will expand our footprint and business operations into new verticals, and new areas of growth including the launch of a commerce initiative and plans to enter both the NFT and Metaverse in the year ahead. With premium brands, award-winning content and broad distribution reaching more than 120 million people every month, we are well-positioned to grow in the fourth quarter of 2021, fiscal 2022 and beyond.” “Over the past year, we have successfully expanded our sports vertical, anchored by Sports Illustrated, the most trusted brand in sports,” added Levinsohn. “Premium content delivered to multiple platforms and diversified revenue has helped us grow exponentially this year. Our sports vertical is the fastest growing media property in the United States, according to Comscore, growing unique visitors by 166% year-over-year. Importantly, our sports media vertical reached nearly 53 million monthly users according to Comscore in September. This impressive improvement in content, traffic, and monetization serves as the formula for additional verticals that we plan to pursue.” “Our financial vertical, anchored by The Street.com, and featuring a robust, highly profitable subscription business, will follow this clear and proven roadmap,” continued Levinsohn. “We anticipate announcing several important developments about the future of this flagship product over the course of the coming weeks and months. In addition, we expect to expand into additional verticals in the same fashion, with the goal of launching new verticals over the next 16 months, all benefiting from our innovative and expert approach and our scalable technology platform.” “In the first nine months of 2021, we have generated approximately $128 million in revenue, essentially matching our full-year revenue last year, demonstrating rapid growth,” added Levinsohn. “With accelerating momentum and continued optimization and growth of our traffic, we anticipate a meaningful improvement in profitability going forward. We have begun the process of uplisting to a national exchange, and while we do not control the timing or outcome of this process, we plan to move as quickly as possible.” Financial Results for the Three Months Ended September 30, 2021 Compared to the Three Months Ended September 30, 2020 Revenue was $59.6 million for the quarter, up 86% compared to $32.1 million. The increase was due to a 130% increase in advertising revenue to $21.7 million. The increase in advertising revenue was primarily due to additional revenue of approximately $6.8 million generated as a result of a doubling of advertising sponsorships of the Sports Illustrated Swim business and other growth in the Sports Illustrated media business, and approximately $5.5 million from the addition of The Spun, which was acquired during the second quarter of 2021. In addition, magazine circulation revenue increased by 102% to $26.0 million for the third quarter of 2021 reflecting a drive to increase subscribers in the fourth quarter of 2020 and the diminishing effect of acquisition accounting adjustments on the subscribers that existed when the Company began operating the Sports Illustrated Media Group in October of 2019. Other revenue (primarily licensing and e-commerce revenue) increased by 216% to $4.2 million during the third quarter of 2021 driven in part by an increase in advertising and sponsorships related to the SI Swim and other Sports Illustrated media businesses. These increases were partially offset by a 9% decrease in digital subscription revenue to $7.7 million for the third quarter of 2021, compared to approximately $8.5 million for the third quarter of 2020. Digital subscription revenue represented approximately 12.9% of total revenue in the third quarter of 2021 compared to 26.4% during the same period last year. Gross profit was $27.4 million, representing a 46% gross profit percentage for the third quarter of 2021, which was double the gross profit percentage of 23% on gross profit of $7.4 million for the third quarter of 2020. For the three months ended September 30, 2021 and 2020, the Company recognized cost of revenue of approximately $32.2 million and approximately $24.7 million, respectively. The increase in cost of revenue of approximately $7.5 million is primarily related to: printing, distribution, and fulfillment costs of approximately $3.4 million, reflecting increase production costs related the SI Swim issue and sponsorships; payroll, stock-based compensation, and related expenses for customer support, technology maintenance, and occupancy costs of related personnel of approximately $2.6 million; other costs of revenue related to SI Swim events of approximately $1.3 million; and amortization of our platform of approximately $0.2 million. Total operating expenses were approximately $49.8 million in the third quarter of 2021 compared to $21.2 million in the third quarter of 2020. The increase was due to a $7.3 million non-cash charge related to exiting the Company’s lease in its New York City office, a $4.2 million non-cash increase in stock-based compensation expense and a $9.4 million increase in circulation expenses tied to the increase of $13.1 million in magazine circulation revenue. Net loss was $24.7 million, or $(0.10) per basic and diluted share for the third quarter of 2021, compared to a net loss of $21.4 million, or $(0.55) per basic and diluted share for the third quarter of 2020, a 82% improvement year over year. Financial Results for the Nine Months Ended September 30, 2021 Compared to the Nine Months Ended September 30, 2020 Revenue was $127.9 million year-to-date, up 50% compared to $85.6 million. The increase reflects a diversification of revenue including a 61% increase in advertising revenue, a 57% increase in magazine circulation revenue, a 12% increase in digital subscription revenue and a 119% increase in other revenue. Gross profit for the nine months ended September 2021, was $44.0 million compared to $9.3 million during the same period last year. Total operating expenses were $111.3 million during this period, compared to approximately $64.8 million for the same period last year. However, of the $46.5 million increase in costs, $16.4 million were non-cash items including stock based compensation and a charge related to the exiting of our New York City lease, and $22.4 million was an increase in circulation expense, which was correlated to a $19.3 million increase in magazine circulation revenue. Net loss was $70.8 million, or $(0.29) per basic and diluted share for the nine months ended September 30, 2021, compared to a net loss of $67.2 million, or $(1.72) per basic and diluted share for the prior year period. Balance Sheet and Liquidity as of September 30, 2021 Cash and cash equivalents were $8.2 million as of September 30, 2021, compared to $6.7 million as of June 30, 2021 and $9.0 million as of December 31, 2020. For the nine months ended September 30, 2021, net cash used in operating activities was approximately $8.3 million, as compared to $20.3 million in the prior year period, a $12.0 million improvement. The improvement was a result of a $42.9 million increase in cash received from customers (including payments received in advance of performance obligations) to $125.1 million in the nine months ended September 30, 2021 from $82.1 million in the prior year period, offset by a $30.5 million increase in cash paid (a) to employees, publisher partners, expert contributors, suppliers, and vendors, and (b) for revenue share arrangements and professional services and (c) cash paid for interest to $132.5 million in the nine months ended September 30, 2021 as compared $102.0 million for the nine months ended September 30, 2020. For the nine months ended September 30, 2021, net cash used in investing activities was approximately $10.7 million, consisting primarily of: (a) approximately $7.4 million used to acquire The Spun; (b) approximately $0.3 million for property and equipment; and (c) approximately $3.0 million for capitalized costs for the Company’s platform; as compared to the nine months ended September 30, 2020, where net cash used in investing activities was approximately $4.3 million consisting primarily of: (x) approximately $0.3 million used for the acquisition of a business; (y) approximately $1.1 million for property and equipment; and (z) approximately $2.9 million for capitalized costs for the Company’s platform. Conference Call Management will host a conference call to discuss these results today at 5 p.m. ET. To access the call, please dial 888-506-0062 (toll free) or 973-528-0011 and if requested, reference conference ID 306741. The conference call will also be webcast live on the Investor Relations section of The Arena Group’s website at https://investors.thearenagroup.net/news-and-events/events. Following the conclusion of the live call, a replay of the webcast will be available on the Investor Relations section of the Company's website for at least 90 days. A telephonic replay of the conference call will also be available from 7 p.m. ET on November 15, 2021 until 11:59 p.m. ET on November 29, 2021 by dialing 877-481-4010 (United States) or 919-882-2331 (international) and using the passcode 43643. About The Arena Group The Arena Group creates dynamic, digital destinations that delight consumers with stories and news about the things they love – their favorite sports teams, the inside scoop on personal finance, and the latest on lifestyle essentials. The Company's robust media ecosystem brings together consumers, publishers and advertisers while harnessing the authority of trusted brands and the editorial prowess of leading writers and editors. For more on best-in-class capabilities in direct sales and programmatic advertising, data, SEO, social, and operations, visit www.thearenagroup.net. Forward Looking Statements This press release includes statements that constitute forward-looking statements. Forward-looking statements may be identified by the use of words such as “forecast,” “guidance,” “plan,” “estimate,” “will,” “would,” “project,” “maintain,” “intend,” “expect,” “anticipate,” “prospect,” “strategy,” “future,” “likely,” “may,” “should,” “believe,” “continue,” “opportunity,” “potential,” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters, and include, for example, statements related to the expected effects on the Company’s business from the COVID-19 pandemic. These forward-looking statements are based on information available at the time the statements are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or suggested by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the duration and scope of the COVID-19 pandemic and impact on the demand for the Company products; the ability of the Company to expand its verticals; the Company’s ability to grow its subscribers; the Company’s ability to grow its advertising revenue; general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth; the effects of steps that the Company could take to reduce operating costs; the inability of the Company to sustain profitable sales growth; circumstances or developments that may make the Company unable to implement or realize the anticipated benefits, or that may increase the costs, of its current and planned business initiatives; and those factors detailed by theMaven, Inc. in its public filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K and Quarterly Reports on 10-Q. Should one or more of these risks, uncertainties, or facts materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by the forward-looking statements contained herein. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Except as required under the federal securities laws and the rules and regulations of the Securities and Exchange Commission, we do not have any intention or obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. THEMAVEN, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS September 30, 2021 December 31, 2020 (unaudited) Assets Current assets: Cash and cash equivalents $ 8,227,840 $ 9,033,872 Restricted cash 500,809 500,809 Accounts receivable, net 19,519,147 16,497,626 Subscription acquisition costs, current portion 31,257,268 28,146,895 Royalty fees, current portion 15,000,000 15,000,000 Prepayments and other current assets 4,875,177 4,667,263 Total current assets 79,380,241 73,846,465 Property and equipment, net 668,663 1,129,438 Operating lease right-of-use assets 2,048,900 18,292,196 Platform development, net 8,011,707 7,355,608 Royalty fees, net of current portion - 11,250,000 Subscription acquisition costs, net of current portion 18,682,545 13,358,585 Acquired and other intangible assets, net 57,817,905 71,501,835 Other long-term assets 692,021 1,330,812 Goodwill 22,861,872 16,139,377 Total assets $ 190,163,854 $ 214,204,316 Liabilities, mezzanine equity and stockholders’ deficiency Current liabilities: Accounts payable $ 9,443,576 $ 8,228,977 Accrued expenses and other 21,287,989 14,718,193 Line of credit 6,705,391 7,178,791 Unearned revenue 71,305,655 61,625,676 Subscription refund liability 4,379,364 4,035,531 Operating lease liabilities 282,011 1,059,671 Liquidated damages payable 11,765,706 9,568,091 Current portion of long-term debt 4,565,982 - Warrant derivative liabilities 651,083 1,147,895 Total current liabilities 130,386,757 107,562,825 Unearned revenue, net of current portion 19,207,736 23,498,597 Restricted stock liabilities, net of current portion 521,621 1,995,810 Operating lease liabilities, net of current portion 1,972,165 19,886,083 Other long-term liabilities 8,072,442 753,365 Deferred tax liabilities 577,960 210,832 Long-term debt, net of current portion 58,718,289 62,194,272 Total liabilities 219,456,970 216,101,784 Commitments and contingencies (1) - - Mezzanine equity: Series G redeemable and convertible preferred stock, $0.01 par value, $1,000 per share liquidation value and 1,800 shares designated; aggregate liquidation value: $168,496; Series G shares issued and outstanding: 168,496; common shares issuable upon conversion: 188,791 at September 30, 2021 and December 31, 2020 168,496 168,496 Series H convertible preferred stock, $0.01 par value, $1,000 per share liquidation value; aggregate liquidation value $19,546,000 and $19,596,000; Series H shares designated: 23,000; Series H shares issued and outstanding: 19,546 and 19,596; common shares issuable upon conversion: 59,243,926 and 59,395,476 shares at September 30, 2021 and December 31, 2020, respectively 18,197,496 18,247,496 Total mezzanine equity 18,365,992 18,415,992 Stockholders’ deficiency: Common stock, $0.01 par value, authorized 1,000,000,000 shares; issued and outstanding: 264,246,777 and 229,085,167 shares at September 30, 2021 and December 31, 2020, respectively 2,642,467 2,290,851 Common stock to be issued 10,809 10,809 Additional paid-in capital 182,787,419 139,658,166 Accumulated deficit (233,099,803 ) (162,273,286 ) Total stockholders’ deficiency (47,659,108 ) (20,313,460 ) Total liabilities, mezzanine equity and stockholders’ deficiency $ 190,163,854 $ 214,204,316 THEMAVEN, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Revenue $ 59,573,508 $ 32,089,993 $ 127,935,501 $ 85,593,786 Cost of revenue (includes amortization of developed technology and platform development for three months ended 2021 and 2020 of $2,241,243 and $2,089,286, respectively, and for nine months ended 2021 and 2020 of $6,565,600 and $6,348,619, respectively) 32,173,859 24,708,941 83,978,050 76,321,953 Gross profit 27,399,649 7,381,052 43,957,451 9,271,833 Operating expenses Selling and marketing 22,712,193 9,928,901 55,122,357 27,698,182 General and administrative 23,023,883 7,172,175 44,230,360 24,852,891 Depreciation and amortization 4,055,432 4,053,184 11,981,998 12,276,990 Total operating expenses 49,791,508 21,154,260 111,334,715 64,828,063 Loss from operations (22,391,859 ) (13,773,208 ) (67,377,264 ) (55,556,230 ) Other (expense) income Change in valuation of warrant derivative liabilities 801,755 (517,405 ) 496,812 (134,910 ) Change in valuation of embedded derivative liabilities - (2,370,000 ) - 2,173,000 Interest expense (2,512,637 ) (4,253,180 ) (7,695,317 ) (12,169,315 ) Interest income - 1,116 471 4,499 Liquidated damages (833,612 ) (319,903 ) (2,197,615 ) (1,487,577 ) Other expenses - (31,851 ) - (31,851 ) Gain upon debt extinguishment - - 5,716,697 - Total other expense (2,544,494 ) (7,491,223 ) (3,678,952 ) (11,646,154 ) Loss before income taxes (24,936,353 ) (21,264,431 ) (71,056,216 ) (67,202,384 ) Income taxes 229,699 - 229,699 - Net loss (24,706,654 ) (21,264,431 ) (70,826,517 ) (67,202,384 ) Deemed dividend on Series H convertible preferred stock - (132,663 ) - (132,663 ) Net loss attributable to common stockholders $ (24,706,654 ) $ (21,397,094 ) $ (70,826,517 ) $ (67,335,047 ) Basic and diluted net loss per common stock $ (0.10 ) $ (0.55 ) $ (0.29 ) $ (1.72 ) Weighted average number of common stock outstanding – basic and diluted 252,811,058 39,186,432 244,209,151 39,177,864 THEMAVEN, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) Nine Months Ended September 30, 2021 2020 Cash flows from operating activities Net loss $ (70,826,517 ) $ (67,202,384 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation of property and equipment 333,891 536,729 Amortization of platform development and intangible assets 18,213,707 18,088,880 Loss on disposition of assets 862,442 105,123 Loss upon lease termination 7,344,655 - Gain upon debt extinguishment (5,716,697 ) - Amortization of debt discounts 1,533,537 4,899,625 Change in valuation of warrant derivative liabilities (496,812 ) 134,910 Change in valuation of embedded derivative liabilities - (2,173,000 ) Accrued interest 5,273,159 6,832,376 Liquidated damages 2,197,615 1,487,577 Stock-based compensation 21,688,226 11,185,953 Deferred income taxes (229,699 ) - Other (1,014,932 ) (296,019 ) Change in operating assets and liabilities net of effect of acquisitions: Accounts receivable (173,266 ) 4,893,512 Subscription acquisition costs (8,434,333 ) (11,053,054 ) Royalty fees 11,250,000 11,250,000 Prepayments and other current assets (78,347 ) 327,088 Other long-term assets 638,791 (376,142 ) Accounts payable 1,214,599 (968,581 ) Accrued expenses and other 5,566,243 (2,484,525 ) Unearned revenue 5,389,118 2,871,080 Subscription refund liability 343,833 (169,693 ) Operating lease liabilities (2,448,282 ) 1,837,138 Other long-term liabilities (692,255 ) - Net cash used in operating activities (8,261,324 ) (20,273,407 ) Cash flows from investing activities Purchases of property and equipment (299,999 ) (1,085,392 ) Capitalized platform development (3,016,924 ) (2,885,788 ) Payments for acquisition of businesses, net of cash acquired (7,356,949 ) (315,289 ) Net cash used in investing activities (10,673,872 ) (4,286,469 ) Cash flows from financing activities Proceeds from long-term debt - 11,702,725 Borrowings (repayments) under line of credit (473,400 ) 3,328,431 Proceeds from common stock private placement 20,005,000 - Proceeds from issuance of Series H convertible preferred stock - 113,000 Proceeds from issuance of Series J convertible preferred stock - 6,000,000 Payments of issuance costs from common stock private placement (167,243 ) - Payment for taxes related to repurchase of restricted common stock (70,238 ) (322,778 ) Payment of restricted stock liabilities (1,164,955 ) - Net cash provided by financing activities 18,129,164 20,821,378 Net decrease in cash, cash equivalents, and restricted cash (806,032 ) (3,738,498 ) Cash, cash equivalents, and restricted cash – beginning of period 9,534,681 9,473,090 Cash, cash equivalents, and restricted cash – end of period $ 8,728,649 $ 5,734,592 Supplemental disclosure of cash flow information Cash paid for interest $ 896,580 $ 437,314 Cash paid for income taxes - - Noncash investing and financing activities Reclassification of stock-based compensation to platform development $ 1,347,624 $ 1,259,163 Issuance of common stock in connection with professional services 125,000 - Deferred cash payments in connection with acquisition of The Spun 905,109 - Assumption of liabilities in connection with acquisition of The Spun 1,500 - Debt discount on delayed draw term note - 913,865 Restricted stock units issued in connection with acquisition of LiftIgniter - 500,000 Assumption of liabilities in connection with acquisition of LiftIgniter - 140,381 Restricted stock issued in connection with acquisition of Fulltime Fantasy 502,500 - Deferred cash payments in connection with acquisition of Fulltime Fantasy 419,367 Deemed dividend on Series H convertible preferred stock - 132,663 View source version on businesswire.com: https://www.businesswire.com/news/home/20211115006254/en/Contacts Rob Fink FNK IR Arena@fnkir.com 646.809.4048
Third Quarter Revenues up 86% and Sports Audience Grows 166% Year-Over-Year; Growth and Contribution Margin Demonstrates Business Model Effectiveness
TheMaven, Inc. operating under the brand name “The Arena Group” (OTCQX: MVEN), a tech-powered media company (“Company”), today announced financial results for the three and nine-month period ended September 30, 2021. 2021 Financial and Operational Highlights Total revenue increased 86% to $59.6 million in the third quarter of 2021 compared to $32.1 million in the third quarter of 2020. Revenue for the first nine months of 2021 increased 50% to $127.9 million compared to $85.6 million, effectively matching the full-year 2020 revenue. Advertising revenue increased 130% to $21.7 million in the third quarter of 2021 compared to $9.4 million in the third quarter of 2020, reflecting the improved monetization and efficiency of the Company’s unified technology platform. The company ended the third quarter with recurring subscription revenue accounting for more than 50% of all revenues. Magazine circulation revenue increased 102% to $26.0 million in the third quarter of 2021 compared to $12.9 million in the third quarter of 2020, reflecting higher subscriber levels and the diminishing effect of acquisition accounting adjustments from the commencement of Sports Illustrated media group operations in 2019. Quarterly gross profit percentage doubled to 46% compared to 23% in the third quarter of 2020. Net Loss, inclusive of a $7.3 million non-cash charge for exiting the Company’s New York City office lease, was $24.7 million, or $(0.10) per basic and diluted share for the quarter, compared to a net loss of $21.4 million, or $(0.55) per basic and diluted share, in the third quarter of 2020, a 68% improvement year-over-year. Recent Business Highlights The successful launch of the Sports Illustrated Sportsbook in September has provided robust content offerings for sports bettors and fantasy players nationwide, and the opportunity for fans to place bets in Colorado. A strategic partnership in podcasting and audio with iHeartMedia, the leading audio and media company in America, kicked off during the third quarter of 2021 Since acquiring The Spun in June, monthly revenue has tripled to more than $2 million with expenses remaining relatively flat; its monthly audience has increased by 50% to more than 30 million users; and monthly page views have doubled to more than 110 million. The Company paid a net $7.4 million in cash as part of the purchase price for The Spun, and expects to recover this cash outlay from The Spun’s operations before the end of this year. SI Swim executed a rebranding and pivot towards becoming a female lifestyle brand. As a result, revenues doubled over the same period in 2020 and impressions grew by more than 15 billion year-over-year. The Arena Group’s social presence has expanded with video views across social platforms increasing to over 170 million, highlighted by two original series on Snap; a large presence on TikTok and the growth of its brands across Instagram. Management Commentary “Since I was asked to lead this business last September, the executive team and I have already achieved our initial goals to transform this company and make it a highly efficient, data driven, technology powered media company that could scale operations, grow audiences, expand margins and drive profitable growth,” said Ross Levinsohn, Chairman and Chief Executive Officer of The Arena Group. “With a proven model, and tremendous momentum heading into 2022, we believe we will expand our footprint and business operations into new verticals, and new areas of growth including the launch of a commerce initiative and plans to enter both the NFT and Metaverse in the year ahead. With premium brands, award-winning content and broad distribution reaching more than 120 million people every month, we are well-positioned to grow in the fourth quarter of 2021, fiscal 2022 and beyond.” “Over the past year, we have successfully expanded our sports vertical, anchored by Sports Illustrated, the most trusted brand in sports,” added Levinsohn. “Premium content delivered to multiple platforms and diversified revenue has helped us grow exponentially this year. Our sports vertical is the fastest growing media property in the United States, according to Comscore, growing unique visitors by 166% year-over-year. Importantly, our sports media vertical reached nearly 53 million monthly users according to Comscore in September. This impressive improvement in content, traffic, and monetization serves as the formula for additional verticals that we plan to pursue.” “Our financial vertical, anchored by The Street.com, and featuring a robust, highly profitable subscription business, will follow this clear and proven roadmap,” continued Levinsohn. “We anticipate announcing several important developments about the future of this flagship product over the course of the coming weeks and months. In addition, we expect to expand into additional verticals in the same fashion, with the goal of launching new verticals over the next 16 months, all benefiting from our innovative and expert approach and our scalable technology platform.” “In the first nine months of 2021, we have generated approximately $128 million in revenue, essentially matching our full-year revenue last year, demonstrating rapid growth,” added Levinsohn. “With accelerating momentum and continued optimization and growth of our traffic, we anticipate a meaningful improvement in profitability going forward. We have begun the process of uplisting to a national exchange, and while we do not control the timing or outcome of this process, we plan to move as quickly as possible.” Financial Results for the Three Months Ended September 30, 2021 Compared to the Three Months Ended September 30, 2020 Revenue was $59.6 million for the quarter, up 86% compared to $32.1 million. The increase was due to a 130% increase in advertising revenue to $21.7 million. The increase in advertising revenue was primarily due to additional revenue of approximately $6.8 million generated as a result of a doubling of advertising sponsorships of the Sports Illustrated Swim business and other growth in the Sports Illustrated media business, and approximately $5.5 million from the addition of The Spun, which was acquired during the second quarter of 2021. In addition, magazine circulation revenue increased by 102% to $26.0 million for the third quarter of 2021 reflecting a drive to increase subscribers in the fourth quarter of 2020 and the diminishing effect of acquisition accounting adjustments on the subscribers that existed when the Company began operating the Sports Illustrated Media Group in October of 2019. Other revenue (primarily licensing and e-commerce revenue) increased by 216% to $4.2 million during the third quarter of 2021 driven in part by an increase in advertising and sponsorships related to the SI Swim and other Sports Illustrated media businesses. These increases were partially offset by a 9% decrease in digital subscription revenue to $7.7 million for the third quarter of 2021, compared to approximately $8.5 million for the third quarter of 2020. Digital subscription revenue represented approximately 12.9% of total revenue in the third quarter of 2021 compared to 26.4% during the same period last year. Gross profit was $27.4 million, representing a 46% gross profit percentage for the third quarter of 2021, which was double the gross profit percentage of 23% on gross profit of $7.4 million for the third quarter of 2020. For the three months ended September 30, 2021 and 2020, the Company recognized cost of revenue of approximately $32.2 million and approximately $24.7 million, respectively. The increase in cost of revenue of approximately $7.5 million is primarily related to: printing, distribution, and fulfillment costs of approximately $3.4 million, reflecting increase production costs related the SI Swim issue and sponsorships; payroll, stock-based compensation, and related expenses for customer support, technology maintenance, and occupancy costs of related personnel of approximately $2.6 million; other costs of revenue related to SI Swim events of approximately $1.3 million; and amortization of our platform of approximately $0.2 million. Total operating expenses were approximately $49.8 million in the third quarter of 2021 compared to $21.2 million in the third quarter of 2020. The increase was due to a $7.3 million non-cash charge related to exiting the Company’s lease in its New York City office, a $4.2 million non-cash increase in stock-based compensation expense and a $9.4 million increase in circulation expenses tied to the increase of $13.1 million in magazine circulation revenue. Net loss was $24.7 million, or $(0.10) per basic and diluted share for the third quarter of 2021, compared to a net loss of $21.4 million, or $(0.55) per basic and diluted share for the third quarter of 2020, a 82% improvement year over year. Financial Results for the Nine Months Ended September 30, 2021 Compared to the Nine Months Ended September 30, 2020 Revenue was $127.9 million year-to-date, up 50% compared to $85.6 million. The increase reflects a diversification of revenue including a 61% increase in advertising revenue, a 57% increase in magazine circulation revenue, a 12% increase in digital subscription revenue and a 119% increase in other revenue. Gross profit for the nine months ended September 2021, was $44.0 million compared to $9.3 million during the same period last year. Total operating expenses were $111.3 million during this period, compared to approximately $64.8 million for the same period last year. However, of the $46.5 million increase in costs, $16.4 million were non-cash items including stock based compensation and a charge related to the exiting of our New York City lease, and $22.4 million was an increase in circulation expense, which was correlated to a $19.3 million increase in magazine circulation revenue. Net loss was $70.8 million, or $(0.29) per basic and diluted share for the nine months ended September 30, 2021, compared to a net loss of $67.2 million, or $(1.72) per basic and diluted share for the prior year period. Balance Sheet and Liquidity as of September 30, 2021 Cash and cash equivalents were $8.2 million as of September 30, 2021, compared to $6.7 million as of June 30, 2021 and $9.0 million as of December 31, 2020. For the nine months ended September 30, 2021, net cash used in operating activities was approximately $8.3 million, as compared to $20.3 million in the prior year period, a $12.0 million improvement. The improvement was a result of a $42.9 million increase in cash received from customers (including payments received in advance of performance obligations) to $125.1 million in the nine months ended September 30, 2021 from $82.1 million in the prior year period, offset by a $30.5 million increase in cash paid (a) to employees, publisher partners, expert contributors, suppliers, and vendors, and (b) for revenue share arrangements and professional services and (c) cash paid for interest to $132.5 million in the nine months ended September 30, 2021 as compared $102.0 million for the nine months ended September 30, 2020. For the nine months ended September 30, 2021, net cash used in investing activities was approximately $10.7 million, consisting primarily of: (a) approximately $7.4 million used to acquire The Spun; (b) approximately $0.3 million for property and equipment; and (c) approximately $3.0 million for capitalized costs for the Company’s platform; as compared to the nine months ended September 30, 2020, where net cash used in investing activities was approximately $4.3 million consisting primarily of: (x) approximately $0.3 million used for the acquisition of a business; (y) approximately $1.1 million for property and equipment; and (z) approximately $2.9 million for capitalized costs for the Company’s platform. Conference Call Management will host a conference call to discuss these results today at 5 p.m. ET. To access the call, please dial 888-506-0062 (toll free) or 973-528-0011 and if requested, reference conference ID 306741. The conference call will also be webcast live on the Investor Relations section of The Arena Group’s website at https://investors.thearenagroup.net/news-and-events/events. Following the conclusion of the live call, a replay of the webcast will be available on the Investor Relations section of the Company's website for at least 90 days. A telephonic replay of the conference call will also be available from 7 p.m. ET on November 15, 2021 until 11:59 p.m. ET on November 29, 2021 by dialing 877-481-4010 (United States) or 919-882-2331 (international) and using the passcode 43643. About The Arena Group The Arena Group creates dynamic, digital destinations that delight consumers with stories and news about the things they love – their favorite sports teams, the inside scoop on personal finance, and the latest on lifestyle essentials. The Company's robust media ecosystem brings together consumers, publishers and advertisers while harnessing the authority of trusted brands and the editorial prowess of leading writers and editors. For more on best-in-class capabilities in direct sales and programmatic advertising, data, SEO, social, and operations, visit www.thearenagroup.net. Forward Looking Statements This press release includes statements that constitute forward-looking statements. Forward-looking statements may be identified by the use of words such as “forecast,” “guidance,” “plan,” “estimate,” “will,” “would,” “project,” “maintain,” “intend,” “expect,” “anticipate,” “prospect,” “strategy,” “future,” “likely,” “may,” “should,” “believe,” “continue,” “opportunity,” “potential,” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters, and include, for example, statements related to the expected effects on the Company’s business from the COVID-19 pandemic. These forward-looking statements are based on information available at the time the statements are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or suggested by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the duration and scope of the COVID-19 pandemic and impact on the demand for the Company products; the ability of the Company to expand its verticals; the Company’s ability to grow its subscribers; the Company’s ability to grow its advertising revenue; general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth; the effects of steps that the Company could take to reduce operating costs; the inability of the Company to sustain profitable sales growth; circumstances or developments that may make the Company unable to implement or realize the anticipated benefits, or that may increase the costs, of its current and planned business initiatives; and those factors detailed by theMaven, Inc. in its public filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K and Quarterly Reports on 10-Q. Should one or more of these risks, uncertainties, or facts materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by the forward-looking statements contained herein. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Except as required under the federal securities laws and the rules and regulations of the Securities and Exchange Commission, we do not have any intention or obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. THEMAVEN, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS September 30, 2021 December 31, 2020 (unaudited) Assets Current assets: Cash and cash equivalents $ 8,227,840 $ 9,033,872 Restricted cash 500,809 500,809 Accounts receivable, net 19,519,147 16,497,626 Subscription acquisition costs, current portion 31,257,268 28,146,895 Royalty fees, current portion 15,000,000 15,000,000 Prepayments and other current assets 4,875,177 4,667,263 Total current assets 79,380,241 73,846,465 Property and equipment, net 668,663 1,129,438 Operating lease right-of-use assets 2,048,900 18,292,196 Platform development, net 8,011,707 7,355,608 Royalty fees, net of current portion - 11,250,000 Subscription acquisition costs, net of current portion 18,682,545 13,358,585 Acquired and other intangible assets, net 57,817,905 71,501,835 Other long-term assets 692,021 1,330,812 Goodwill 22,861,872 16,139,377 Total assets $ 190,163,854 $ 214,204,316 Liabilities, mezzanine equity and stockholders’ deficiency Current liabilities: Accounts payable $ 9,443,576 $ 8,228,977 Accrued expenses and other 21,287,989 14,718,193 Line of credit 6,705,391 7,178,791 Unearned revenue 71,305,655 61,625,676 Subscription refund liability 4,379,364 4,035,531 Operating lease liabilities 282,011 1,059,671 Liquidated damages payable 11,765,706 9,568,091 Current portion of long-term debt 4,565,982 - Warrant derivative liabilities 651,083 1,147,895 Total current liabilities 130,386,757 107,562,825 Unearned revenue, net of current portion 19,207,736 23,498,597 Restricted stock liabilities, net of current portion 521,621 1,995,810 Operating lease liabilities, net of current portion 1,972,165 19,886,083 Other long-term liabilities 8,072,442 753,365 Deferred tax liabilities 577,960 210,832 Long-term debt, net of current portion 58,718,289 62,194,272 Total liabilities 219,456,970 216,101,784 Commitments and contingencies (1) - - Mezzanine equity: Series G redeemable and convertible preferred stock, $0.01 par value, $1,000 per share liquidation value and 1,800 shares designated; aggregate liquidation value: $168,496; Series G shares issued and outstanding: 168,496; common shares issuable upon conversion: 188,791 at September 30, 2021 and December 31, 2020 168,496 168,496 Series H convertible preferred stock, $0.01 par value, $1,000 per share liquidation value; aggregate liquidation value $19,546,000 and $19,596,000; Series H shares designated: 23,000; Series H shares issued and outstanding: 19,546 and 19,596; common shares issuable upon conversion: 59,243,926 and 59,395,476 shares at September 30, 2021 and December 31, 2020, respectively 18,197,496 18,247,496 Total mezzanine equity 18,365,992 18,415,992 Stockholders’ deficiency: Common stock, $0.01 par value, authorized 1,000,000,000 shares; issued and outstanding: 264,246,777 and 229,085,167 shares at September 30, 2021 and December 31, 2020, respectively 2,642,467 2,290,851 Common stock to be issued 10,809 10,809 Additional paid-in capital 182,787,419 139,658,166 Accumulated deficit (233,099,803 ) (162,273,286 ) Total stockholders’ deficiency (47,659,108 ) (20,313,460 ) Total liabilities, mezzanine equity and stockholders’ deficiency $ 190,163,854 $ 214,204,316 THEMAVEN, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Revenue $ 59,573,508 $ 32,089,993 $ 127,935,501 $ 85,593,786 Cost of revenue (includes amortization of developed technology and platform development for three months ended 2021 and 2020 of $2,241,243 and $2,089,286, respectively, and for nine months ended 2021 and 2020 of $6,565,600 and $6,348,619, respectively) 32,173,859 24,708,941 83,978,050 76,321,953 Gross profit 27,399,649 7,381,052 43,957,451 9,271,833 Operating expenses Selling and marketing 22,712,193 9,928,901 55,122,357 27,698,182 General and administrative 23,023,883 7,172,175 44,230,360 24,852,891 Depreciation and amortization 4,055,432 4,053,184 11,981,998 12,276,990 Total operating expenses 49,791,508 21,154,260 111,334,715 64,828,063 Loss from operations (22,391,859 ) (13,773,208 ) (67,377,264 ) (55,556,230 ) Other (expense) income Change in valuation of warrant derivative liabilities 801,755 (517,405 ) 496,812 (134,910 ) Change in valuation of embedded derivative liabilities - (2,370,000 ) - 2,173,000 Interest expense (2,512,637 ) (4,253,180 ) (7,695,317 ) (12,169,315 ) Interest income - 1,116 471 4,499 Liquidated damages (833,612 ) (319,903 ) (2,197,615 ) (1,487,577 ) Other expenses - (31,851 ) - (31,851 ) Gain upon debt extinguishment - - 5,716,697 - Total other expense (2,544,494 ) (7,491,223 ) (3,678,952 ) (11,646,154 ) Loss before income taxes (24,936,353 ) (21,264,431 ) (71,056,216 ) (67,202,384 ) Income taxes 229,699 - 229,699 - Net loss (24,706,654 ) (21,264,431 ) (70,826,517 ) (67,202,384 ) Deemed dividend on Series H convertible preferred stock - (132,663 ) - (132,663 ) Net loss attributable to common stockholders $ (24,706,654 ) $ (21,397,094 ) $ (70,826,517 ) $ (67,335,047 ) Basic and diluted net loss per common stock $ (0.10 ) $ (0.55 ) $ (0.29 ) $ (1.72 ) Weighted average number of common stock outstanding – basic and diluted 252,811,058 39,186,432 244,209,151 39,177,864 THEMAVEN, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) Nine Months Ended September 30, 2021 2020 Cash flows from operating activities Net loss $ (70,826,517 ) $ (67,202,384 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation of property and equipment 333,891 536,729 Amortization of platform development and intangible assets 18,213,707 18,088,880 Loss on disposition of assets 862,442 105,123 Loss upon lease termination 7,344,655 - Gain upon debt extinguishment (5,716,697 ) - Amortization of debt discounts 1,533,537 4,899,625 Change in valuation of warrant derivative liabilities (496,812 ) 134,910 Change in valuation of embedded derivative liabilities - (2,173,000 ) Accrued interest 5,273,159 6,832,376 Liquidated damages 2,197,615 1,487,577 Stock-based compensation 21,688,226 11,185,953 Deferred income taxes (229,699 ) - Other (1,014,932 ) (296,019 ) Change in operating assets and liabilities net of effect of acquisitions: Accounts receivable (173,266 ) 4,893,512 Subscription acquisition costs (8,434,333 ) (11,053,054 ) Royalty fees 11,250,000 11,250,000 Prepayments and other current assets (78,347 ) 327,088 Other long-term assets 638,791 (376,142 ) Accounts payable 1,214,599 (968,581 ) Accrued expenses and other 5,566,243 (2,484,525 ) Unearned revenue 5,389,118 2,871,080 Subscription refund liability 343,833 (169,693 ) Operating lease liabilities (2,448,282 ) 1,837,138 Other long-term liabilities (692,255 ) - Net cash used in operating activities (8,261,324 ) (20,273,407 ) Cash flows from investing activities Purchases of property and equipment (299,999 ) (1,085,392 ) Capitalized platform development (3,016,924 ) (2,885,788 ) Payments for acquisition of businesses, net of cash acquired (7,356,949 ) (315,289 ) Net cash used in investing activities (10,673,872 ) (4,286,469 ) Cash flows from financing activities Proceeds from long-term debt - 11,702,725 Borrowings (repayments) under line of credit (473,400 ) 3,328,431 Proceeds from common stock private placement 20,005,000 - Proceeds from issuance of Series H convertible preferred stock - 113,000 Proceeds from issuance of Series J convertible preferred stock - 6,000,000 Payments of issuance costs from common stock private placement (167,243 ) - Payment for taxes related to repurchase of restricted common stock (70,238 ) (322,778 ) Payment of restricted stock liabilities (1,164,955 ) - Net cash provided by financing activities 18,129,164 20,821,378 Net decrease in cash, cash equivalents, and restricted cash (806,032 ) (3,738,498 ) Cash, cash equivalents, and restricted cash – beginning of period 9,534,681 9,473,090 Cash, cash equivalents, and restricted cash – end of period $ 8,728,649 $ 5,734,592 Supplemental disclosure of cash flow information Cash paid for interest $ 896,580 $ 437,314 Cash paid for income taxes - - Noncash investing and financing activities Reclassification of stock-based compensation to platform development $ 1,347,624 $ 1,259,163 Issuance of common stock in connection with professional services 125,000 - Deferred cash payments in connection with acquisition of The Spun 905,109 - Assumption of liabilities in connection with acquisition of The Spun 1,500 - Debt discount on delayed draw term note - 913,865 Restricted stock units issued in connection with acquisition of LiftIgniter - 500,000 Assumption of liabilities in connection with acquisition of LiftIgniter - 140,381 Restricted stock issued in connection with acquisition of Fulltime Fantasy 502,500 - Deferred cash payments in connection with acquisition of Fulltime Fantasy 419,367 Deemed dividend on Series H convertible preferred stock - 132,663 View source version on businesswire.com: https://www.businesswire.com/news/home/20211115006254/en/
