UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $0.01 AREN NYSE American FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission fil ...

The Arena Group Holdings, Inc. (NYSE:AREN) Q2 2023 Earnings Conference Call August 14, 2023 4:30 PM ET Company Participants Rob Fink - FNK Investor Relations Ross Levinsohn - Chairman and Chief Executive Officer Doug Smith - Chief Financial Officer Andrew Kraft - Chief Operating Officer Conference Call Participants Mark Argento - Lake Street Capital Markets Daniel Day - B. Riley Securities Operator Welcome to The Arena Group Q2 2023 Earnings Conference Call. I will now turn the call over to Rob Fink, Invest ...

Revenue Performance - Digital advertising revenue increased by 19% and 14% for the three and six months ended June 30, 2023, compared to the same periods in 2022[154]. - Revenue per page view (RPM) for the three and six months ended June 30, 2023, was $22.98 and $19.73, respectively, compared to $17.00 and $16.01 for the same periods in 2022[157]. - For the three months ended June 30, 2023, total revenue increased by $5,054, or 9.4%, to $58,806 compared to $53,752 for the same period in 2022[176]. - Total revenue for the six months ended June 30, 2023, increased by $8,191 to $110,186 compared to $101,995 for the same period in 2022, representing an 8.0% growth[192]. Digital Subscriptions - Digital subscriptions decreased by $2,112, or 38.5% for the three months ended June 30, 2023[176]. - Digital subscriptions decreased by $4,702 to $7,249 for the six months ended June 30, 2023, reflecting a 39.3% decline[192][193]. Profitability and Loss - The company incurred a net loss of $38,861 for the six months ended June 30, 2023, with cash on hand of $5,489[159]. - Net loss for the three months ended June 30, 2023 was $19,484, a reduction of $2,723 from $22,207 in the same period of 2022[172]. - Net loss from continuing operations for the six months ended June 30, 2023, was $38,861, a decrease of $1,795 from $40,656 in the prior year, indicating a 4.4% improvement[186]. Operating Expenses - Total operating expenses for the six months ended June 30, 2023, were $71,867, a slight decrease of $83 compared to $71,950 in the same period of 2022[186]. - Operating expenses decreased by $801, leading to a loss from operations of $14,296, which improved by $6,335 compared to the prior year[172]. - Total selling and marketing expenses for the three months ended June 30, 2023, were $19,503, an increase of $2,020 or 11.6% from $17,483 in the prior year[181]. - Selling and marketing expenses totaled $37,472 for the six months ended June 30, 2023, reflecting an increase of $2,773 or 8.0% from $34,699 in the prior year[197]. - General and administrative expenses decreased by $3,112 to $11,722 for the three months ended June 30, 2023, primarily due to reductions in stock-based compensation and professional services[182]. - General and administrative expenses decreased by $3,573 or 12.6% to $24,775 for the six months ended June 30, 2023, compared to $28,348 in the same period of 2022[199]. Cash Flow and Working Capital - Net cash used in operating activities for the six months ended June 30, 2023, was $16,400, compared to $7,465 for the same period in 2022[168]. - The working capital deficit increased to $144,754 as of June 30, 2023, from $137,669 as of December 31, 2022[166]. - The company had $25,093 available under its working capital line of credit as of June 30, 2023[161]. Debt and Financing - The company plans to refinance or extend the maturities of its current debt totaling $102,691 to alleviate concerns about its ability to continue as a going concern[160]. - Interest expense increased significantly to $5,001 for the three months ended June 30, 2023, compared to $2,506 in the same period of 2022, marking a 99.6% rise[183][184]. - Interest expense increased by $3,857 or 72.4% to $9,183 for the six months ended June 30, 2023, compared to $5,326 in the prior year[200]. Investments and Commitments - A binding letter of intent was signed with Simplify Inventions, LLC to expand video capabilities, involving a cash investment of approximately $50,000 and an advertising commitment of $12,000 annually for five years[150]. - The company guaranteed a minimum annual royalty of $15,000 through December 31, 2029, related to the Sports Illustrated media business[162]. Other Financial Metrics - Gross profit for the three months ended June 30, 2023 was $21,664, an increase of $5,534, representing a gross profit margin of 36.8%, up from 30.0% in the prior year[174]. - Gross profit for the six months ended June 30, 2023, was $43,009, an increase of $7,133 or 19.9% from $35,876 in the prior year, with a gross profit margin improvement to 39.0%[190][192]. - Total cost of revenue for the three months ended June 30, 2023 was $37,142, a decrease of $480 from $37,622 in the same period of 2022[179]. - For the six months ended June 30, 2023, total cost of revenue was $67,177, an increase of $1,058 or 1.6% compared to $66,119 in the same period of 2022[194]. Stock and Shares - The weighted average number of shares outstanding increased to 22,074,500 from 18,258,890 year-over-year[171]. - The company reported a basic and diluted net loss per common share of $(0.88) for continuing operations, an improvement of $0.30 from $(1.18) in the prior year[171]. Adjusted EBITDA - Adjusted EBITDA for the six months ended June 30, 2023 was $(4,536), compared to $(5,340) for the same period in 2022[206]. - Stock-based compensation decreased by $985 or 20.4% to $3,845 for the six months ended June 30, 2023[194]. - Stock-based compensation is a noncash cost that affects Adjusted EBITDA, which helps in making period-to-period comparisons of operating performance[208]. Changes in Fair Value - The change in fair value of contingent consideration was $90 for the three months ended June 30, 2023, reflecting the impact of the Fexy Studios acquisition[183]. - The change in fair value of contingent consideration was $(409) for the six months ended June 30, 2023, representing a 100% change from no prior value[200]. - Change in fair value of contingent consideration relates to the put option on common stock from the Fexy Studios acquisition[209]. Miscellaneous - Liquidated damages are owed to investors from private placements conducted between 2018 and 2020 due to unmet covenants[211]. - Loss on impairment of assets indicates certain assets are no longer useful[211]. - Employee retention credit represents payroll-related tax credits under the Cares Act[211]. - Employee restructuring payments include severance payments to employees and payments to the former CEO for the three and six months ended June 30, 2023 and 2022, respectively[211]. - Management's financial analysis is based on GAAP-compliant condensed consolidated financial statements, with estimates that may differ from actual results[212]. - There have been no material changes to critical accounting policies and estimates compared to the previous Annual Report[213]. - Recent accounting pronouncements are discussed in the Notes to the condensed consolidated financial statements[214]. - Market risk disclosures are not applicable to smaller reporting companies as defined by SEC regulations[215].

INVESTOR PRESENTATION The Arena Group | Investor Presentation | 2 DISCLAIMER This presentation by The Arena Group Holdings, Inc., which includes information for its wholly owned subsidiaries, The Arena Platform, Inc., The Arena Media Brands, LLC, TheStreet, Inc., College Spun Media Incorporated, Athlon Holdings, Inc. and Athlon Sports Communications, Inc. (collectively “The Arena Group,” the “Company” or “we”), contains “forward-looking” statements that are based on our management’s beliefs and assumptions ...

The Arena Group Holdings, Inc. (NYSE:AREN) Q1 2023 Earnings Conference Call May 10, 2023 4:30 PM ET Company Participants Rob Fink - Investor Relations Ross Levinsohn - Chairman & Chief Executive Officer Doug Smith - Chief Financial Officer Andrew Kraft - Chief Operating Officer Conference Call Participants Mark Argento - Lake Street Griffin Boss - B. Riley Operator Good day and welcome to the Arena Group First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A ...

PART I – FINANCIAL INFORMATION [ITEM 1. Condensed Consolidated Financial Statements](index=5&type=section&id=ITEM%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents The Arena Group Holdings, Inc's unaudited condensed consolidated financial statements for the three months ended March 31, 2023 and 2022 [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Metric | March 31, 2023 ($ in thousands) | December 31, 2022 ($ in thousands) | |:---|:---|:---| | Total Assets | $204,708 | $203,719 | | Total Liabilities | $244,231 | $242,689 | | Total Mezzanine Equity | $13,176 | $13,176 | | Total Stockholders' Deficiency | $(52,699) | $(52,146) | - The company's total assets slightly increased from **$203,719 thousand** at December 31, 2022, to **$204,708 thousand** at March 31, 2023, while stockholders' deficiency deepened from **$(52,146) thousand** to **$(52,699) thousand**[9](index=9&type=chunk)[10](index=10&type=chunk)[11](index=11&type=chunk) [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) | Metric | Three Months Ended March 31, 2023 ($ in thousands) | Three Months Ended March 31, 2022 ($ in thousands) | |:---|:---|:---| | Revenue | $51,380 | $48,243 | | Gross Profit | $21,345 | $19,746 | | Loss from Operations | $(14,562) | $(15,443) | | Net Loss | $(19,377) | $(18,449) | | Basic and Diluted Net Loss Per Common Share | $(1.04) | $(1.20) | - Revenue increased by **$3,137 thousand (6.5%)** year-over-year, and despite an improved loss from operations, the net loss widened by **$928 thousand**, while net loss per common share improved from **$(1.20) to $(1.04)**[13](index=13&type=chunk) [Condensed Consolidated Statements of Stockholders' Deficiency](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Deficiency) | Metric | Balance at Jan 1, 2023 ($ in thousands) | Balance at March 31, 2023 ($ in thousands) | |:---|:---|:---| | Common Stock Par Value | $182 | $217 | | Additional Paid-in Capital | $270,743 | $289,532 | | Accumulated Deficit | $(323,071) | $(342,448) | | Total Stockholders' Deficiency | $(52,146) | $(52,699) | - Total stockholders' deficiency increased from **$(52,146) thousand** to **$(52,699) thousand**, primarily due to a **net loss of $19,377 thousand**, partially offset by proceeds from a stock offering and stock-based compensation[15](index=15&type=chunk)[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Activity | Three Months Ended March 31, 2023 ($ in thousands) | Three Months Ended March 31, 2022 ($ in thousands) | |:---|:---|:---| | Net Cash Used in Operating Activities | $(1,672) | $(13,311) | | Net Cash Used in Investing Activities | $(1,688) | $(1,653) | | Net Cash Provided by Financing Activities | $5,450 | $28,095 | | Net Increase in Cash, Cash Equivalents, and Restricted Cash | $2,090 | $13,131 | | Cash, Cash Equivalents, and Restricted Cash – End of Period | $16,463 | $22,982 | - Net cash used in operating activities significantly decreased from **$(13,311) thousand** in Q1 2022 to **$(1,672) thousand** in Q1 2023, while net cash from financing activities decreased substantially from **$28,095 thousand to $5,450 thousand**[21](index=21&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [1. Summary of Significant Accounting Policies](index=13&type=section&id=1.%20Summary%20of%20Significant%20Accounting%20Policies) - The unaudited financial statements assume the Company will continue as a going concern, though management has identified **substantial doubt** about this ability without debt refinancing[26](index=26&type=chunk)[27](index=27&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) - The Company operates in one reportable segment and is subject to macroeconomic risks including inflation, rising interest rates, and global banking instability[28](index=28&type=chunk)[29](index=29&type=chunk) Anti-Dilutive Securities Excluded from EPS Calculation | Security Type | March 31, 2023 | March 31, 2022 | |:---|:---|:---| | Series G convertible preferred stock | 8,582 | 8,582 | | Series H convertible preferred stock | 1,981,128 | 2,004,971 | | Common stock options | 6,183,262 | 5,541,818 | | Total Anti-Dilutive Securities | 10,282,706 | 10,107,917 | [2. Acquisitions](index=15&type=section&id=2.%20Acquisitions) - On January 11, 2023, the Company acquired Fexy Studios for a total purchase price of **$3,307 thousand**[41](index=41&type=chunk)[43](index=43&type=chunk) Fexy Studios Acquisition Purchase Consideration | Component | Amount ($ in thousands) | |:---|:---| | Cash | $500 | | Common stock | $2,000 | | Contingent consideration | $561 | | Deferred cash payments, as discounted | $246 | | **Total Purchase Consideration** | **$3,307** | Fexy Studios Preliminary Purchase Price Allocation | Asset Acquired | Amount ($ in thousands) | |:---|:---| | Advertiser relationships | $663 | | Brand names | $659 | | Goodwill | $1,985 | | **Net Assets Acquired** | **$3,307** | [3. Balance Sheet Components](index=17&type=section&id=3.%20Balance%20Sheet%20Components) Allowance for Doubtful Accounts Activity | Metric | March 31, 2023 ($ in thousands) | December 31, 2022 ($ in thousands) | |:---|:---|:---| | Beginning Balance | $2,236 | $1,578 | | Additions | $64 | $980 | | Deductions – write-offs | $(28) | $(322) | | **Ending Balance** | **$2,272** | **$2,236** | - Subscription acquisition costs' current portion increased to **$31,908 thousand** and the noncurrent portion decreased to **$12,460 thousand** as of March 31, 2023[51](index=51&type=chunk) Prepayments and Other Current Assets | Component | March 31, 2023 ($ in thousands) | December 31, 2022 ($ in thousands) | |:---|:---|:---| | Prepaid expenses | $3,840 | $2,321 | | Employee retention credits | $6,868 | $0 | | **Total** | **$12,037** | **$4,441** | Net Intangible Assets | Intangible Asset Type | March 31, 2023 ($ in thousands) | December 31, 2022 ($ in thousands) | |:---|:---|:---| | Developed technology | $1,654 | $2,450 | | Brand name | $11,500 | $11,207 | | Subscriber relationships | $22,690 | $26,313 | | Advertiser relationships | $14,189 | $13,934 | | **Total Intangible Assets, Net** | **$54,844** | **$58,970** | [4. Leases](index=19&type=section&id=4.%20Leases) - Operating lease costs increased to **$240 thousand** for Q1 2023 from **$179 thousand** in the prior year, with a weighted-average remaining lease term of **1.51 years**[63](index=63&type=chunk) - The Company expects to receive **$414 thousand** in sublease income through September 2024[67](index=67&type=chunk) [5. Goodwill](index=21&type=section&id=5.%20Goodwill) Goodwill Carrying Value | Metric | March 31, 2023 ($ in thousands) | December 31, 2022 ($ in thousands) | |:---|:---|:---| | Carrying value at beginning of year | $39,344 | $19,619 | | Goodwill acquired in acquisition of Fexy Studios | $1,985 | $0 | | **Carrying value at end of period** | **$41,329** | **$39,344** | - Goodwill increased by **$1,985 thousand** due to the acquisition of Fexy Studios in Q1 2023, reaching a total of **$41,329 thousand**[69](index=69&type=chunk) [6. Line of Credit](index=21&type=section&id=6.%20Line%20of%20Credit) - The SLR Credit Facility's maximum advances increased to **$40,000 thousand** with an interest rate of **prime plus 4.0% (12.0%)**, and maturity was extended to December 31, 2024[70](index=70&type=chunk) Line of Credit Outstanding Balance | Metric | March 31, 2023 ($ in thousands) | December 31, 2022 ($ in thousands) | |:---|:---|:---| | Balance Outstanding | $9,559 | $14,092 | [7. Restricted Stock Liabilities](index=21&type=section&id=7.%20Restricted%20Stock%20Liabilities) - The Company repurchased **8,064 shares** of restricted common stock for **$710 thousand** during Q1 2022, with the remaining **18,134 shares** repurchased for **$1,597 thousand** in April 2022[73](index=73&type=chunk) [8. Liquidated Damages Payable](index=22&type=section&id=8.%20Liquidated%20Damages%20Payable) Liquidated Damages Payable | Metric | March 31, 2023 ($ in thousands) | December 31, 2022 ($ in thousands) | |:---|:---|:---| | Short-term | $5,970 | $5,843 | | Long-term | $124 | $494 | | **Total** | **$6,094** | **$6,337** | - The Company settled **$494 thousand** in liquidated damages by issuing **47,252 shares** of common stock, resulting in a **$46 thousand gain** on settlement[79](index=79&type=chunk) [9. Fair Value](index=23&type=section&id=9.%20Fair%20Value) Liabilities Measured at Fair Value (March 31, 2023) | Liability | Fair Value (Level 3 Inputs) ($ in thousands) | |:---|:---| | Contingent consideration | $1,060 | - The contingent consideration from the Fexy Studios acquisition is valued at **$1,060 thousand**, with a **$499 thousand** change in fair value recognized as other expenses in Q1 2023[83](index=83&type=chunk)[84](index=84&type=chunk) [10. Bridge Notes](index=24&type=section&id=10.%20Bridge%20Notes) - The Company issued **$36,000 thousand** in senior secured Bridge Notes with an initial interest rate of **12% per annum**, maturing on December 31, 2023[86](index=86&type=chunk) Bridge Notes Outstanding Balance | Metric | March 31, 2023 ($ in thousands) | December 31, 2022 ($ in thousands) | |:---|:---|:---| | Balance Outstanding | $35,433 | $34,805 | | Effective Interest Rate | 19.0% | N/A | [11. Term Debt](index=24&type=section&id=11.%20Term%20Debt) - The Senior Secured Notes and Delayed Draw Term Notes, totaling **$66,691 thousand** in principal, mature on December 31, 2023, and carry an interest rate of **10.0% per annum**[88](index=88&type=chunk)[89](index=89&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk) Term Debt Carrying Value | Debt Type | March 31, 2023 ($ in thousands) | December 31, 2022 ($ in thousands) | |:---|:---|:---| | Senior Secured Notes | $62,010 | $61,787 | | Delayed Draw Term Notes | $3,922 | $3,897 | | **Total Term Debt Carrying Value** | **$65,932** | **$65,684** | Total Interest Expense | Component | Three Months Ended March 31, 2023 ($ in thousands) | Three Months Ended March 31, 2022 ($ in thousands) | |:---|:---|:---| | Amortization of debt costs | $930 | $660 | | Cash paid interest | $3,252 | $2,160 | | **Total Interest Expense** | **$4,182** | **$2,820** | [12. Preferred Stock](index=27&type=section&id=12.%20Preferred%20Stock) - As of March 31, 2023, the Company had **168 shares** of Series G and **14,356 shares** of Series H Convertible Preferred Stock outstanding[94](index=94&type=chunk) [13. Stockholders' Equity](index=27&type=section&id=13.%20Stockholders'%20Equity) - On March 31, 2023, the Company completed a registered direct offering, issuing **2,963,918 shares** of common stock and generating net proceeds of **$11,211 thousand**[95](index=95&type=chunk) - In Q1 2022, the Company raised **$32,058 thousand** net proceeds from a public offering of **4,181,603 common shares**[96](index=96&type=chunk) [14. Compensation Plans](index=27&type=section&id=14.%20Compensation%20Plans) Total Stock-Based Compensation Expense | Metric | Three Months Ended March 31, 2023 ($ in thousands) | Three Months Ended March 31, 2022 ($ in thousands) | |:---|:---|:---| | Total costs charged to operations | $6,427 | $7,367 | | Capitalized platform development | $307 | $687 | | **Total Stock-Based Compensation** | **$6,734** | **$8,054** | - Unrecognized compensation expense for stock-based awards totaled **$25,492 thousand** as of March 31, 2023, with a weighted-average recognition period of **1.42 years**[101](index=101&type=chunk) - In February 2023, the Company modified certain equity awards for a resigning senior executive, resulting in a **$68 thousand** incremental cost[101](index=101&type=chunk) [15. Revenue Recognition](index=29&type=section&id=15.%20Revenue%20Recognition) Revenue by Category | Revenue Category | Three Months Ended March 31, 2023 ($ in thousands) | Three Months Ended March 31, 2022 ($ in thousands) | |:---|:---|:---| | Digital advertising | $23,504 | $21,646 | | Digital subscriptions | $3,871 | $6,461 | | Licensing and syndication revenue | $4,622 | $3,101 | | Print advertising | $2,082 | $1,368 | | Print subscriptions | $16,665 | $15,303 | | **Total Revenue** | **$51,380** | **$48,243** | - Total revenue increased by **6.5%** year-over-year, driven by growth in digital advertising, licensing, print advertising, and print subscriptions, partially offset by a **40.1% decrease** in digital subscriptions[105](index=105&type=chunk) Unearned Revenue (Contract Liabilities) | Unearned Revenue Type | March 31, 2023 ($ in thousands) | December 31, 2022 ($ in thousands) | |:---|:---|:---| | Short-term | $60,584 | $58,703 | | Long-term | $21,234 | $19,701 | | **Total** | **$81,818** | **$78,404** | [16. Income Taxes](index=30&type=section&id=16.%20Income%20Taxes) - The effective tax rate was **0.04%** for Q1 2023 and **0.08%** for Q1 2022, with a valuation allowance provided against most deferred tax assets due to historical operating losses[109](index=109&type=chunk) [17. Related Party Transactions](index=30&type=section&id=17.%20Related%20Party%20Transactions) - The Company paid **$2,998 thousand** in cash interest and accrued **$1,815 thousand** in interest on notes to BRF, an affiliate of principal stockholder B. Riley, during Q1 2023[110](index=110&type=chunk) - Affiliates of B. Riley purchased **1,009,021 shares** of common stock for **$790 thousand** in the March 2023 registered direct offering[110](index=110&type=chunk) [18. Commitments and Contingencies](index=31&type=section&id=18.%20Commitments%20and%20Contingencies) - The Company guaranteed minimum annual royalties of **$15,000 thousand** to ABG-SI, LLC, with total commitments of **$86,250 thousand** through December 31, 2029[115](index=115&type=chunk)[133](index=133&type=chunk) [19. Subsequent Events](index=31&type=section&id=19.%20Subsequent%20Events) - On April 10, 2023, the Company issued **11,766 common shares** to settle **$124 thousand** in liquidated damages[117](index=117&type=chunk) - On April 17, 2023, **207,000 common shares** were issued upon conversion of **1,500 Series H** convertible preferred stock[118](index=118&type=chunk) - From April 1, 2023, through the filing date, the Company granted **10,827** options, restricted stock units, and restricted stock awards[120](index=120&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of The Arena Group's business strategy, key operating metrics, liquidity, and a detailed analysis of its financial results for Q1 2023 versus Q1 2022 - The Arena Group is a tech-powered media company focused on building deep content verticals leveraging its platform and iconic brands like Sports Illustrated and TheStreet, Inc[122](index=122&type=chunk) - The Company's growth strategy involves expanding by adding new premium publishers as independent Publisher Partners or through acquisitions[124](index=124&type=chunk) - Uncertainty in the global economy, including inflation, rising interest rates, and banking instability, presents significant risks to the business[126](index=126&type=chunk) [Key Operating Metrics](index=33&type=section&id=Key%20Operating%20Metrics) - Digital advertising revenue increased by **9%** in Q1 2023 compared to Q1 2022[127](index=127&type=chunk) Key Operating Metrics | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | |:---|:---|:---| | Revenue per page view (RPM) | $16.77 | $15.02 | | Monthly average pageviews | 467,296,344 | 480,352,466 | - RPM increased by **11.65%** year-over-year, indicating improved yield and pricing, while monthly average pageviews decreased by **2.72%**[130](index=130&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) - As of March 31, 2023, the Company had **$15,961 thousand** in cash and **$30,441 thousand** available under its working capital line of credit[132](index=132&type=chunk) Working Capital Deficit | Metric | March 31, 2023 ($ in thousands) | December 31, 2022 ($ in thousands) | |:---|:---|:---| | Current assets | $83,969 | $78,695 | | Current liabilities | $(216,845) | $(216,364) | | **Working capital deficit** | **$(132,876)** | **$(137,669)** | - The working capital deficit improved slightly from **$(137,669) thousand** at year-end 2022 to **$(132,876) thousand** at March 31, 2023[136](index=136&type=chunk) Cash Flow Summary | Cash Flow Activity | Three Months Ended March 31, 2023 ($ in thousands) | Three Months Ended March 31, 2022 ($ in thousands) | |:---|:---|:---| | Net cash used in operating activities | $(1,672) | $(13,311) | | Net cash used in investing activities | $(1,688) | $(1,653) | | Net cash provided by financing activities | $5,450 | $28,095 | | **Net increase in cash, cash equivalents, and restricted cash** | **$2,090** | **$13,131** | [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Consolidated Results of Operations | Metric | Three Months Ended March 31, 2023 ($ in thousands) | Three Months Ended March 31, 2022 ($ in thousands) | Change ($) | Change (%) | |:---|:---|:---|:---|:---| | Revenue | $51,380 | $48,243 | $3,137 | 6.5% | | Gross profit | $21,345 | $19,746 | $1,599 | 8.1% | | Loss from operations | $(14,562) | $(15,443) | $881 | -5.7% | | Net loss | $(19,377) | $(18,449) | $(928) | 5.0% | - Gross profit percentage improved from **40.9%** in Q1 2022 to **41.5%** in Q1 2023, driven by more favorable revenue shares on premium digital advertising[145](index=145&type=chunk)[146](index=146&type=chunk) Revenue by Category (YoY Change) | Revenue Category | 2023 ($ in thousands) | 2022 ($ in thousands) | Change ($) | Change (%) | |:---|:---|:---|:---|:---| | Digital advertising | $23,504 | $21,646 | $1,858 | 8.6% | | Digital subscriptions | $3,871 | $6,461 | $(2,590) | -40.1% | | Licensing and syndication revenue | $4,622 | $3,101 | $1,521 | 49.0% | | Print advertising | $2,082 | $1,368 | $714 | 52.2% | | Print subscriptions | $16,665 | $15,303 | $1,362 | 8.9% | | **Total Revenue** | **$51,380** | **$48,243** | **$3,137** | **6.5%** | Cost of Revenue by Category (YoY Change) | Cost of Revenue Category | 2023 ($ in thousands) | 2022 ($ in thousands) | Change ($) | Change (%) | |:---|:---|:---|:---|:---| | Publisher Partner revenue share payments | $4,247 | $5,042 | $(795) | -15.8% | | Technology, Platform and software licensing fees | $4,237 | $3,174 | $1,063 | 33.5% | | Printing, distribution and fulfillment costs | $3,853 | $2,857 | $996 | 34.9% | | **Total Cost of Revenue** | **$30,035** | **$28,497** | **$1,538** | **5.4%** | Operating Expenses (YoY Change) | Operating Expense Category | 2023 ($ in thousands) | 2022 ($ in thousands) | Change ($) | Change (%) | |:---|:---|:---|:---|:---| | Selling and marketing | $17,969 | $17,216 | $753 | 4.4% | | General and administrative | $13,053 | $13,514 | $(461) | -3.4% | | Depreciation and amortization | $4,766 | $4,202 | $564 | 13.4% | | **Total Operating Expenses** | **$35,907** | **$35,189** | **$718** | **2.0%** | Other Expenses (YoY Change) | Other Expense Category | 2023 ($ in thousands) | 2022 ($ in thousands) | Change ($) | Change (%) | |:---|:---|:---|:---|:---| | Change in fair value of contingent consideration | $(499) | $0 | $(499) | 100.0% | | Interest expense, net | $(4,182) | $(2,820) | $(1,362) | 48.3% | | Liquidated damages | $(127) | $(172) | $45 | -26.2% | | **Total Other Expenses** | **$(4,808)** | **$(2,992)** | **$(1,816)** | **60.7%** | [Use of Non-GAAP Financial Measures](index=39&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) - Adjusted EBITDA is presented as a non-GAAP measure to provide insight into underlying operating performance[158](index=158&type=chunk) Adjusted EBITDA Reconciliation | Metric | 2023 ($ in thousands) | 2022 ($ in thousands) | |:---|:---|:---| | Net loss | $(19,377) | $(18,449) | | Interest expense, net | $4,182 | $2,820 | | Depreciation and amortization | $7,135 | $6,513 | | Stock-based compensation | $6,427 | $7,367 | | Change in fair value of contingent consideration | $499 | $0 | | Liquidated damages | $127 | $172 | | Loss on impairment of assets | $119 | $257 | | Employee retention credit | $(6,868) | $0 | | Employee restructuring payments | $3,288 | $174 | | **Adjusted EBITDA** | **$(4,461)** | **$(1,132)** | - Adjusted EBITDA worsened from **$(1,132) thousand** in Q1 2022 to **$(4,461) thousand** in Q1 2023, primarily due to the employee retention credit and increased employee restructuring payments[161](index=161&type=chunk) [Critical Accounting Policies and Estimates](index=40&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - No material changes to critical accounting policies and estimates were reported compared to the Annual Report on Form 10-K for the year ended December 31, 2022[165](index=165&type=chunk) [Recent Accounting Pronouncements](index=40&type=section&id=Recent%20Accounting%20Pronouncements) - The adoption of ASU 2022-02 on January 1, 2023, did not have a material impact on the Company's condensed consolidated financial statements[35](index=35&type=chunk)[166](index=166&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable as the Company qualifies as a "smaller reporting company" - The Company is a "smaller reporting company" and is not required to provide quantitative and qualitative disclosures about market risk[167](index=167&type=chunk) [ITEM 4. Controls and Procedures](index=40&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2023, despite ongoing material weaknesses from the prior year - Despite unremediated material weaknesses, management concluded that disclosure controls and procedures were **effective** as of March 31, 2023, after performing additional analyses[170](index=170&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended March 31, 2023[171](index=171&type=chunk) - The effectiveness of internal controls is subject to inherent limitations and may deteriorate due to changing conditions[172](index=172&type=chunk) PART II - OTHER INFORMATION [ITEM 1. Legal Proceedings](index=43&type=section&id=ITEM%201.%20Legal%20Proceedings) The Company is not currently involved in any legal proceedings expected to have a material adverse effect on its business - The Company is not currently a party to any legal proceedings expected to have a material adverse effect on its business[174](index=174&type=chunk) [ITEM 1A. Risk Factors](index=43&type=section&id=ITEM%201A.%20Risk%20Factors) Unfavorable economic conditions, including inflation, rising interest rates, and global banking instability, could adversely affect the Company's business and results - Unfavorable economic conditions, including inflation, rising interest rates, and instability in the global banking system, pose **significant risks** to the Company's business[176](index=176&type=chunk)[177](index=177&type=chunk) - The Company's cash management strategy includes diversifying deposits, but deposits may exceed insurance limits, and there is no assurance of success in further bank closures[177](index=177&type=chunk) - A severe or prolonged economic downturn could weaken demand for products and impair the ability to raise additional capital[177](index=177&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report during the period - No unregistered sales of equity securities or use of proceeds were reported[178](index=178&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=43&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) The Company reported no defaults upon senior securities during the period - No defaults upon senior securities were reported[178](index=178&type=chunk) [ITEM 4. Mine Safety Disclosures](index=43&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - Mine Safety Disclosures are not applicable to the Company[178](index=178&type=chunk) [ITEM 5. Other Information](index=43&type=section&id=ITEM%205.%20Other%20Information) There is no other information to report under this item - No other information was reported[178](index=178&type=chunk) [ITEM 6. Exhibits](index=44&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed as part of the Quarterly Report on Form 10-Q - Exhibits include CEO and CFO certifications (31.1, 31.2, 32.1, 32.2) and Inline XBRL documents (101.INS, 101.SCH, 101.CAL, 101.LAB, 101.PRE, 101.DEF, 104)[180](index=180&type=chunk)[181](index=181&type=chunk)[182](index=182&type=chunk)[183](index=183&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk)[187](index=187&type=chunk) [SIGNATURES](index=45&type=section&id=SIGNATURES) - The report was signed on May 10, 2023, by Ross Levinsohn, Chief Executive Officer, and Douglas B. Smith, Chief Financial Officer[189](index=189&type=chunk)

[Part I](index=8&type=section&id=Part%20I) This part covers the company's business operations, risk factors, properties, and legal proceedings [Business](index=8&type=section&id=Item%201.%20Business) The Arena Group is a tech-powered media company leveraging iconic brands and a digital platform to grow audience and monetization across sports, finance, and lifestyle verticals [The Platform](index=8&type=section&id=The%20Platform) The company operates a proprietary digital publishing platform providing content management, distribution, and monetization solutions for its owned brands and Publisher Partners - The company has developed a proprietary online publishing platform that provides content management, video publishing, social distribution, and monetization solutions to its owned media businesses and third-party Publisher Partners[24](index=24&type=chunk)[25](index=25&type=chunk) - Publisher Partners utilize the platform services, incurring their own content creation costs, and share the generated revenue with The Arena Group based on a pre-defined agreement, allowing for content scaling at a variable cost[23](index=23&type=chunk)[27](index=27&type=chunk) [Our Brands and Growth Strategy](index=9&type=section&id=Our%20Brands%20and%20Growth%20Strategy) The company's growth strategy centers on a vertical model, expanding major brands and initiatives like content syndication, podcasts, e-commerce, and new acquisitions - The company's business model is centered on a vertical strategy, building around major brands like Sports Illustrated (sports), TheStreet (finance), and Parade/Men's Journal (lifestyle) to create a "halo effect" for other partners in the same vertical[29](index=29&type=chunk)[30](index=30&type=chunk) - Key growth initiatives for 2023 include increasing content syndication, offering podcasts and e-commerce, growing the SI Sportsbook, acquiring or developing new verticals, and adding new Publisher Partners[30](index=30&type=chunk) - The company has actively expanded its brand portfolio through licensing and acquisitions, including Sports Illustrated (2019), The Spun (2021), Parade (2022), and Men's Journal (2022), to anchor its key lifestyle and sports verticals[32](index=32&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) [Intellectual Property](index=11&type=section&id=Intellectual%20Property) The company protects its technology and content through a combination of patents, copyrights, trademarks, and trade secret laws - The company protects its technology and content through a combination of patents, copyrights, trademarks, and trade secret laws[43](index=43&type=chunk) Intellectual Property Holdings as of December 31, 2022 | IP Type | Count | | :--- | :--- | | U.S. Issued Patents | 7 | | U.S. Copyright Registrations | ~1,300 | | Registered Domain Names | >1,600 | | U.S. Trademark Registrations | 165 | | Foreign Trademark Registrations | 88 | [Competition](index=12&type=section&id=Competition) The digital media industry is highly competitive and fragmented, with the company competing against a wide range of content players, media companies, and social platforms - The digital media industry is highly competitive and fragmented, with The Arena Group competing with a wide range of companies for user attention and advertising revenue[49](index=49&type=chunk)[73](index=73&type=chunk) - Competitors include niche content players (Vice, Buzzfeed), major media companies (CNN, ESPN), content management software providers (WordPress, Medium), and social platforms (YouTube, Facebook)[50](index=50&type=chunk) [Government Regulations](index=13&type=section&id=Government%20Regulations) The company's operations are subject to evolving U.S. and international laws, particularly concerning data privacy, data protection, and content regulation - The company's operations are subject to numerous evolving U.S. and international laws, particularly concerning data privacy, data protection, and content regulation[52](index=52&type=chunk) - Key regulations impacting the business include the California Consumer Privacy Act (CCPA) / California Privacy Rights Act (CPRA) and the EU's General Data Protection Regulation (GDPR), which impose significant compliance requirements and penalties for non-compliance[53](index=53&type=chunk)[56](index=56&type=chunk) - The company is also exposed to regulations concerning online behavioral advertising, with potential restrictions on user tracking technologies that could adversely affect a significant revenue source[58](index=58&type=chunk) [Human Capital Resources](index=15&type=section&id=Human%20Capital%20Resources) The company employs 400 individuals, with a portion of its workforce represented by a union, and is focused on diversity, equity, and inclusion initiatives - As of December 31, 2021, the company had **400 employees**, with **391 full-time**, and approximately **23%** of the workforce (92 employees), primarily Sports Illustrated editorial staff, are represented by The NewsGuild of New York[64](index=64&type=chunk) - The company launched its first company-wide Diversity, Equity, and Inclusion (DEI) Council in 2022 to advise senior leadership and plans to conduct its first engagement survey in 2023[66](index=66&type=chunk) [Risk Factors](index=16&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks across its business operations, financial condition, and governance, including intense competition, reliance on user engagement, cybersecurity threats, a history of losses, and dependence on key executives [Risks Related to Our Business](index=16&type=section&id=Risks%20Related%20to%20Our%20Business) The business is highly dependent on user retention and growth, faces intense competition, relies on third-party content, and is vulnerable to restrictions on tracking technologies - The business is highly dependent on retaining and growing its user base and their level of engagement, with failure to do so seriously harming the business[71](index=71&type=chunk) - The digital media market is intensely competitive, with many competitors possessing greater financial and technical resources[73](index=73&type=chunk) - The company relies on key third-party content contributors, and the loss of their services could adversely affect the business[76](index=76&type=chunk)[77](index=77&type=chunk) - Increasing restrictions on third-party cookies and other tracking technologies could negatively impact the company's ability to deliver targeted advertising and measure effectiveness, potentially harming financial results[78](index=78&type=chunk)[80](index=80&type=chunk) [Economic and Operational Risks](index=19&type=section&id=Economic%20and%20Operational%20Risks) The company faces concentration risk from a single customer, vulnerability to technology infrastructure interruptions, cybersecurity threats, and material weaknesses in internal financial controls - A significant portion of revenue (**13.9% in fiscal 2022**) is derived from a single customer, creating a concentration risk[91](index=91&type=chunk) - The business is vulnerable to interruptions or performance problems with its technology and infrastructure, which is hosted on third-party cloud platforms like Amazon Web Services and Google Cloud[92](index=92&type=chunk)[94](index=94&type=chunk) - Cybersecurity incidents, malware, and hacking attacks pose a significant threat, potentially leading to data loss, reputational harm, and litigation[97](index=97&type=chunk)[108](index=108&type=chunk) - The company has identified material weaknesses in its internal control over financial reporting related to IT general controls (segregation of duties) and insufficient validation of third-party impression data[120](index=120&type=chunk) [Risks Related to Our Indebtedness, Financial Condition, and Internal Control](index=26&type=section&id=Risks%20Related%20to%20Our%20Indebtedness%2C%20Financial%20Condition%2C%20and%20Internal%20Control) The company has a history of losses, faces uncertainty in securing additional capital, and may have limitations on utilizing its net operating loss carryforwards - The company has a history of losses, with a net loss of approximately **$70.9 million** in fiscal 2022 and an accumulated deficit of **$323.1 million** as of December 31, 2022[128](index=128&type=chunk) - There is uncertainty regarding the company's ability to secure additional capital, which may be necessary to continue operations and fund growth[125](index=125&type=chunk)[126](index=126&type=chunk) - The company's ability to utilize its significant federal net operating loss carryforwards (**$190.1 million** as of Dec 31, 2022) may be limited due to ownership changes under Section 382 of the Internal Revenue Code[134](index=134&type=chunk) [Risks Related to Governance and Investment in Our Securities](index=28&type=section&id=Risks%20Related%20to%20Governance%20and%20Investment%20in%20Our%20Securities) The company is dependent on key executives, has provisions that may deter takeovers, and its stock price has been volatile with potential for future dilution - The company is dependent on the continued services of its key executive officers and management team[135](index=135&type=chunk)[136](index=136&type=chunk) - Provisions in the company's Certificate of Incorporation, Bylaws, and Delaware law may discourage or make a takeover attempt more difficult[142](index=142&type=chunk)[143](index=143&type=chunk) - The trading price of the company's common stock has been and may continue to be volatile[148](index=148&type=chunk) - Future sales or issuances of common stock could cause substantial dilution to existing stockholders and cause the market price to decline[152](index=152&type=chunk)[153](index=153&type=chunk) [Properties](index=32&type=section&id=Item%202.%20Properties) The Arena Group leases office spaces in New Jersey and California, including occupied, sublet, and unoccupied locations - The company leases office space in Hoboken, NJ (occupied by The Spun), Santa Monica, CA (sublet), and Carlsbad, CA (unoccupied)[156](index=156&type=chunk) [Legal Proceedings](index=32&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently subject to any material legal proceedings expected to adversely affect its business or financial condition - The company states it is not currently subject to any material legal proceedings[157](index=157&type=chunk) [Part II](index=32&type=section&id=Part%20II) This part details the company's common stock market, management's discussion and analysis of financial performance, and audited financial statements [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=32&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock began trading on NYSE American in February 2022, with approximately 186 record holders, and no cash dividends have been paid or are planned - The company's common stock began trading on the NYSE American under the symbol "AREN" on February 9, 2022[157](index=157&type=chunk) - As of March 21, 2023, there were approximately **186 holders of record** of the common stock[158](index=158&type=chunk) - The company has never paid cash dividends and does not intend to in the foreseeable future[159](index=159&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In fiscal 2022, revenue increased to $220.9 million, driven by digital advertising growth, despite a $70.9 million net loss and a $137.7 million working capital deficit, raising going concern doubts due to maturing debt [Key Operating Metrics](index=33&type=section&id=Key%20Operating%20Metrics) This section presents key digital advertising metrics, including revenue per page view and monthly average pageviews, for fiscal years 2022 and 2021 Key Digital Advertising Metrics (2022 vs. 2021) | Metric | 2022 | 2021 | | :--- | :--- | :--- | | Revenue per page view (RPM) | $17.24 | $15.24 | | Monthly average pageviews | 516,129,297 | 350,761,233 | [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity relies on cash and credit facilities, but significant debt maturities and recurring losses raise substantial doubt about its ability to continue as a going concern - As of December 31, 2022, principal sources of liquidity consisted of **$13.9 million** in cash and **$25.9 million** available under its working capital line of credit with SLR Digital Finance LLC[171](index=171&type=chunk) - Management has concluded there is substantial doubt about the company's ability to continue as a going concern for one year, primarily due to significant debt maturing by December 31, 2023, with plans to refinance or extend this debt[175](index=175&type=chunk)[176](index=176&type=chunk) Working Capital Deficit (in thousands) | | 2022 | 2021 | | :--- | :--- | :--- | | Current assets | $78,695 | $77,671 | | Current liabilities | $(216,364) | $(116,413) | | **Working capital deficit** | **$(137,669)** | **$(38,742)** | Summary of Cash Flows (in thousands) | | Year Ended Dec 31, 2022 | Year Ended Dec 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(11,304) | $(14,729) | | Net cash used in investing activities | $(38,590) | $(13,146) | | Net cash provided by financing activities | $54,416 | $28,191 | [Results of Operations](index=39&type=section&id=Results%20of%20Operations) This section provides a comparative analysis of the company's financial performance, including revenue, gross profit, and net loss, with a detailed breakdown by revenue category Comparison of Operations (in thousands) | Metric | 2022 | 2021 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $220,935 | $189,140 | 16.8% | | Gross Profit | $88,012 | $78,610 | 12.0% | | Loss from Operations | $(55,883) | $(84,279) | -33.7% | | Net Loss | $(70,858) | $(89,940) | -21.2% | | Basic & Diluted EPS | $(4.02) | $(7.87) | -48.9% | Revenue Breakdown by Category (in thousands) | Revenue Category | 2022 | 2021 | Change (%) | | :--- | :--- | :--- | :--- | | **Total Digital Revenue** | **$149,812** | **$101,008** | **48.3%** | | - Digital Advertising | $109,317 | $62,865 | 73.9% | | - Digital Subscriptions | $21,156 | $29,629 | -28.6% | | - Licensing & Syndication | $18,173 | $8,471 | 114.5% | | **Total Print Revenue** | **$71,123** | **$88,132** | **-19.3%** | | - Print Advertising | $10,214 | $9,051 | 12.8% | | - Print Subscriptions | $60,909 | $79,081 | -23.0% | | **Total Revenue** | **$220,935** | **$189,140** | **16.8%** | - The **73.9% increase in digital advertising revenue** was driven by a **47.1% increase in monthly average pageviews** and a **13.1% increase in RPM**, while the decrease in print subscription revenue was primarily due to a planned reduction in the Sports Illustrated rate base to focus on more profitable subscriptions[199](index=199&type=chunk) [Use of Non-GAAP Financial Measures](index=42&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) This section provides a reconciliation of the company's net loss to Adjusted EBITDA, a non-GAAP financial measure, for fiscal years 2022 and 2021 Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | | 2022 | 2021 | | :--- | :--- | :--- | | **Net loss** | **$(70,858)** | **$(89,940)** | | Loss from discontinued operations, net of tax | $3,470 | - | | Interest expense, net | $11,428 | $10,449 | | Income tax benefit | $(1,063) | $(1,674) | | Depreciation and amortization | $27,109 | $25,174 | | Stock-based compensation | $31,345 | $30,493 | | Other adjustments | $1,670 | $13,433 | | **Adjusted EBITDA** | **$3,101** | **$(12,063)** | [Financial Statements and Supplementary Data](index=49&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements and the independent auditor's report, which includes an adverse opinion on internal controls and a going concern emphasis due to material weaknesses and recurring losses [Report of Independent Registered Public Accounting Firm](index=62&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The independent auditor issued an adverse opinion on internal control over financial reporting due to material weaknesses and highlighted substantial doubt about the company's ability to continue as a going concern - The auditor, Marcum LLP, issued an **adverse opinion** on the effectiveness of the company's internal control over financial reporting as of December 31, 2022, due to identified material weaknesses[288](index=288&type=chunk)[296](index=296&type=chunk) - The auditor's report includes an explanatory paragraph highlighting substantial doubt about the company's ability to continue as a going concern, citing a significant working capital deficiency and recurring losses[289](index=289&type=chunk) - Critical audit matters identified were the evaluation of the acquisition-date fair value of intangible assets acquired in the Parade and Men's Journal transactions, which involved subjective judgments on forecasted revenue, EBITDA margins, and discount rates[292](index=292&type=chunk)[293](index=293&type=chunk) [Consolidated Financial Statements](index=66&type=section&id=Consolidated%20Financial%20Statements) This section provides the company's consolidated balance sheet and statement of operations data for fiscal years 2022 and 2021, presented in thousands Consolidated Balance Sheet Data (in thousands) | | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Total Current Assets | $78,695 | $77,671 | | Total Assets | $203,719 | $173,983 | | Total Current Liabilities | $216,364 | $116,413 | | Total Liabilities | $242,689 | $211,774 | | Total Stockholders' Deficiency | $(52,146) | $(51,677) | Consolidated Statement of Operations Data (in thousands) | | Year Ended Dec 31, 2022 | Year Ended Dec 31, 2021 | | :--- | :--- | :--- | | Revenue | $220,935 | $189,140 | | Gross Profit | $88,012 | $78,610 | | Loss from Continuing Operations | $(67,388) | $(89,940) | | Net Loss | $(70,858) | $(89,940) | [Notes to Consolidated Financial Statements](index=73&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed notes to the consolidated financial statements, covering significant events like stock splits, acquisitions, debt obligations, and net operating loss carryforwards - The company completed a **1-for-22 reverse stock split** effective February 8, 2022, and up-listed its common stock to the NYSE American on February 9, 2022[321](index=321&type=chunk)[324](index=324&type=chunk) - In 2022, the company acquired Athlon Holdings, Inc. (Parade) for a purchase price of **$15.9 million** and the digital assets of Men's Journal for **$25.0 million** in cash[436](index=436&type=chunk)[448](index=448&type=chunk) - As of Dec 31, 2022, the company had significant debt obligations, including **$34.8 million** in Bridge Notes, **$65.7 million** in Senior Secured and Delayed Draw Term Notes, and a **$14.1 million** balance on its line of credit, with the majority maturing by Dec 31, 2023[489](index=489&type=chunk)[507](index=507&type=chunk)[513](index=513&type=chunk) - The company has federal net operating loss carryforwards of **$190.1 million** as of Dec 31, 2022, but their usability is subject to limitations under IRC Section 382 due to past and potential future ownership changes[602](index=602&type=chunk)[603](index=603&type=chunk) [Controls and Procedures](index=49&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that internal control over financial reporting was ineffective as of December 31, 2022, due to material weaknesses in IT general controls and data validation, despite effective disclosure controls after additional procedures - Management concluded that internal control over financial reporting was **not effective** as of December 31, 2022[251](index=251&type=chunk) - Two material weaknesses were identified: (i) inadequate segregation of duties in IT general controls related to change management, and (ii) insufficient validation of non-Google impression data from certain third-party service providers[252](index=252&type=chunk) - Despite the material weaknesses, management concluded that disclosure controls and procedures were effective, as additional post-closing analyses were performed to ensure financial statements were prepared in accordance with GAAP[248](index=248&type=chunk) - The effectiveness of internal control over financial reporting as of December 31, 2022, has been audited by Marcum LLP, which issued an adverse opinion[254](index=254&type=chunk)[288](index=288&type=chunk) [Part III](index=51&type=section&id=Part%20III) This part provides information on the company's directors, executive officers, corporate governance, executive compensation, and security ownership [Directors, Executive Officers and Corporate Governance](index=51&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the company's 2023 Annual Meeting of Stockholders proxy statement - This section incorporates information by reference from the forthcoming 2023 Proxy Statement[258](index=258&type=chunk) [Executive Compensation](index=51&type=section&id=Item%2011.%20Executive%20Compensation) Information on executive compensation is incorporated by reference from the company's 2023 Annual Meeting of Stockholders proxy statement - This section incorporates information by reference from the forthcoming 2023 Proxy Statement[258](index=258&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=51&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section details securities authorized for issuance under equity compensation plans, with 7,203,215 securities outstanding and 624,538 available for future issuance as of December 31, 2022 Equity Compensation Plan Information as of December 31, 2022 | Plan Category | Securities to be Issued Upon Exercise (a) | Weighted-Average Exercise Price (b) | Securities Remaining for Future Issuance (c) | | :--- | :--- | :--- | :--- | | Approved by security holders | 6,060,877 | $9.77 | 504,782 | | Not approved by security holders | 1,142,338 | $11.25 | 119,756 | | **Total** | **7,203,215** | **$10.01** | **624,538** | [Part IV](index=53&type=section&id=Part%20IV) This part lists the exhibits and financial statement schedules filed as part of the Annual Report, including the independent auditor's report and various material agreements [Exhibits and Financial Statement Schedules](index=53&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section provides an index to the consolidated financial statements and a comprehensive list of exhibits filed with the Annual Report, including material contracts and corporate documents - This section contains the index to the Consolidated Financial Statements and the Report of Marcum LLP, Independent Registered Public Accounting Firm[269](index=269&type=chunk) - A detailed list of exhibits filed with the report is provided, including material contracts, debt agreements, and corporate charters[272](index=272&type=chunk)[273](index=273&type=chunk)[274](index=274&type=chunk)

Arena Group Holdings, Inc. (NYSE:AREN) Q4 2022 Results Conference Call March 16, 2023 4:30 PM ET Company Participants Rob Fink - Investor Relations Ross Levinsohn - Chairman and Chief Executive Officer Douglas Smith - Chief Financial Officer Conference Call Participants Mark Argento - Lake Street Capital Daniel Day - B. Riley Operator Greetings and welcome to the Arena Group Fourth Quarter and Full Year 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode, a questions-and- ...

The Arena Group Holdings, Inc. (NYSE:AREN) Q3 2022 Earnings Conference Call November 9, 2022 4:30 PM ET Company Participants Rob Fink - Investor Relations Ross Levinsohn - Chairman and Chief Executive Officer Douglas Smith - Chief Financial Officer Andrew Kraft - Chief Operating Officer Conference Call Participants Mark Argento - Lake Street Capital Daniel Wolfe - 180 Degree Capital Dan Day - B. Riley Operator Good afternoon, ladies and gentlemen, and welcome to the Arena Group Third Quarter 2022 Earnings C ...