The Arena Group (NYSE: AREN) sees Q2 2026 revenue halve and swings to loss
The Arena Group Holdings, Inc. reported sharply lower results from continuing operations for the quarter ended June 30, 2026. Revenue fell 50.7% to $22,183, driven mainly by weaker digital advertising as search algorithm changes reduced referral traffic and mix shifted away from higher-yield properties. Gross profit declined to $8,668, with gross margin compressing as cost of revenue decreased less than revenue.
Operating expenses were reduced, with general and administrative costs down 41.0% to $3,655, and selling and marketing modestly lower, reflecting cost discipline and lower legal/professional fees. Income from operations dropped to $2,280 from $16,412, and after net interest expense of $2,450 and a small tax benefit, the company recorded a loss from continuing operations of $176, versus income of $12,412 a year earlier.
For the first six months of 2026, revenue declined to $42,589 from $76,827 and loss from continuing operations was $2,834. Despite this, cash from operating activities was positive at $2,051, and cash and cash equivalents were $11,170 with working capital of $18,777. Term debt remained high at a carrying value of $97,606, and stockholders’ deficiency widened to $(7,550). The company highlighted pressure on key metrics such as RPM and page views, and described ongoing optimization efforts to stabilize audience and improve monetization.
Positive
- None.
Negative
- Revenue from continuing operations dropped 50.7% year-over-year in Q2 2026 to $22,183, with gross profit down 65.9% and income from continuing operations swinging from a $12,412 profit to a small loss, reflecting severe pressure on the core digital advertising-driven business.
- Six-month revenue fell 44.6% to $42,589 and the company reported a loss from continuing operations of $2,834, while carrying $97,606 of term debt and a stockholders’ deficiency of $(7,550), indicating a highly leveraged capital structure and negative equity.
Filing Explained
After June 30, the company completed InfoSentience’s acquisition with $1,000 cash and $1,000 contingent consideration; debt principal stayed at $97,691 as covenants were added.
This Form 10-Q is an unaudited quarterly report; its subsequent-events note says the company completed an acquisition on
The disclosed consideration separates a completed
Those covenants are tested quarterly on a trailing-twelve-month basis beginning with the first full fiscal quarter after closing.
The next material resolution points are the acquisition's accounting and earnout measurement, and the first full fiscal quarter's covenant test under the
Key Figures
Q2 2026 Revenue: $22,183
Q2 2025 Revenue: $45,012
Q2 2026 Gross Profit: $8,668
+5 more
8 metrics
Q2 2026 Revenue
$22,183
Revenue from continuing operations for the three months ended June 30, 2026
Q2 2025 Revenue
$45,012
Prior-year revenue from continuing operations for the three months ended June 30, 2025
Q2 2026 Gross Profit
$8,668
Gross profit for the three months ended June 30, 2026
Loss from Continuing Operations
$176
Loss from continuing operations for the three months ended June 30, 2026
Six-Month 2026 Revenue
$42,589
Revenue from continuing operations for the six months ended June 30, 2026
Cash and Cash Equivalents
$11,170
Cash and cash equivalents balance as of June 30, 2026
Term Debt Carrying Value
$97,606
Carrying value of Term Debt as of June 30, 2026
Working Capital Surplus
$18,777
Working capital as of June 30, 2026
Key Terms
discontinued operations, liquidated damages, valuation allowance, Term Debt, +1 more
5 terms
discontinued operations financial
"This discontinuation of the SI Business (i.e., discontinued operations) followed the termination"
Discontinued operations are parts of a company that it has decided to sell or shut down, and no longer plans to run in the future. This matters to investors because it helps them understand which parts of the business are ongoing and which are being phased out, providing a clearer picture of the company’s current performance and future prospects. Think of it like a store closing a department—it no longer contributes to sales or profits.
liquidated damages financial
"Liquidated damages were recorded as a result of the following: (i) certain registration rights"
A pre-agreed sum that one party must pay if it breaks a contract, chosen so both sides avoid arguing over the exact amount of loss later. Think of it like a fixed cancellation fee for a reservation: it makes potential costs predictable. For investors, liquidated damages matter because they create a known financial liability that can affect cash flow, contract risk, balance-sheet exposure and deal valuations.
valuation allowance financial
"the Company maintains a valuation allowance against certain deferred tax assets, primarily related"
A valuation allowance is a reserve set aside to reduce the value of certain assets on a company's financial records when there is uncertainty about whether they will generate the expected benefits. It acts like a caution sign, indicating that some assets might not be fully recoverable or worth their recorded amount. This matters to investors because it provides a more realistic picture of a company's financial health and potential risks.
Term Debt financial
"collectively referred to as the “Term Debt”. On December 31, 2025, the Company entered into"
Term debt is money a company borrows that must be paid back on a fixed schedule over a set period, usually longer than a year, such as a multi-year loan or a bond. It matters to investors because it shapes a company’s future cash commitments, interest costs and financial risk — like a mortgage versus a short-term bill — and therefore influences profitability, creditworthiness and the potential for dilution or default.
Revenue per page view (“RPM”) financial
"Our key operating metrics are •Revenue per page view (“RPM”) – represents the advertising"
AI-generated analysis. How Rhea-AI works. Not financial advice.
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FAQ
How did The Arena Group (AREN) perform financially in Q2 2026?
The Arena Group reported Q2 2026 revenue of $22,183, down 50.7% from $45,012 in Q2 2025. Gross profit fell to $8,668, and results from continuing operations moved to a $176 loss from $12,412 income a year earlier.
What were The Arena Group’s (AREN) results for the first half of 2026?
For the six months ended June 30, 2026, The Arena Group generated revenue of $42,589, down from $76,827 in 2025, and recorded a loss from continuing operations of $2,834 compared with income of $16,409 in the prior-year period.
What is The Arena Group’s (AREN) liquidity position as of June 30, 2026?
As of June 30, 2026, The Arena Group held cash and cash equivalents of $11,170 and net working capital of $18,777. Operating activities provided $2,051 of cash in the first half, and management believes liquidity is sufficient for at least the next twelve months.
How much debt does The Arena Group (AREN) have outstanding?
As of June 30, 2026, The Arena Group’s term debt totaled $97,691 in principal with a carrying value of $97,606, bearing interest generally at 10.0% per annum. A December 2025 amendment extended the maturity date on this Term Debt to December 31, 2027.
What happened to The Arena Group’s (AREN) RPM and traffic in 2026?
For the three and six months ended June 30, 2026, RPM was $23.96 and $21.12 versus $25.12 and $23.85 in 2025. Monthly average page views declined to 187,715,312 and 196,971,983, largely due to search algorithm changes reducing referral traffic.
How did discontinued operations affect The Arena Group’s (AREN) prior results?
In Q2 and first half of 2026, The Arena Group recorded $0 income from discontinued operations. In 2025, discontinued operations, related to the former Sports Illustrated business, contributed $96,227 and $96,250 of net income in the comparable three- and six‑month periods.
What is The Arena Group’s (AREN) stockholders’ equity position?
As of June 30, 2026, The Arena Group reported a stockholders’ deficiency of $(7,550), compared with $(4,825) at December 31, 2025. Total assets were $106,115 and total liabilities $113,665, reflecting negative equity and a leveraged balance sheet.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended June 30, 2026
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from __________ to __________
Commission file number 1-12471
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
| (Address of principal executive offices) | (Zip Code) | ||||
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | o | x | ||||||||||||
| Non-accelerated filer | o | Smaller reporting company | ||||||||||||
| Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ or No x
As of August 10, 2026, the Registrant had 47,610,653 shares of common stock outstanding.
TABLE OF CONTENTS
| Page Number | |||||
PART I - FINANCIAL INFORMATION | 3 | ||||
Item 1. Condensed Consolidated Financial Statements (Unaudited) | 3 | ||||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 31 | ||||
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 45 | ||||
Item 4. Controls and Procedures | 45 | ||||
PART II - OTHER INFORMATION | 47 | ||||
Item 1. Legal Proceedings | 47 | ||||
Item 1A. Risk Factors | 47 | ||||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 47 | ||||
Item 3. Defaults Upon Senior Securities | 48 | ||||
Item 4. Mine Safety Disclosures | 48 | ||||
Item 5. Other Information | 48 | ||||
Item 6. Exhibits | 48 | ||||
SIGNATURES | 51 | ||||
Table of Contents
Forward-Looking Statements
This Quarterly Report on Form 10-Q (this “Quarterly Report”) of The Arena Group Holdings, Inc. (the “Company,” “we,” “our,” and “us”) contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements relate to future events or future performance and include, without limitation, statements concerning our business strategy, future revenues and income from continuing operations, anticipated yield growth and monetization improvements, cost reductions, debt refinancing efforts, market growth, capital requirements, product introductions and technological capabilities, expansion plans, our stock price relative to our peers and our share repurchase program. Other statements contained in this Quarterly Report that are not historical facts are also forward-looking statements. We have tried, wherever possible, to identify forward-looking statements by terminology such as “may,” “will,” “could,” “should,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” and other stylistic variants denoting forward-looking statements.
We caution investors that any forward-looking statements presented in this Quarterly Report, or that we may make orally or in writing from time to time, are based on information currently available, as well as our beliefs and assumptions. The actual outcome related to forward-looking statements will be affected by known and unknown risks, trends, uncertainties, and factors that are beyond our control or ability to predict. Although we believe that our assumptions are reasonable, they are not guarantees of future performance, and some will inevitably prove to be incorrect. As a result, our actual future results can be expected to differ from our expectations, and those differences may be material. Accordingly, investors should use caution in relying on forward-looking statements, which are based only on known results and trends at the time they are made, to anticipate future results or trends. We detail other risks in our public filings with the Securities and Exchange Commission (the “SEC”), including in Part I, Item 1A, Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 16, 2026 and in Part II, Item 1A, Risk Factors, in this Quarterly Report. The discussion in this Quarterly Report should be read in conjunction with the condensed consolidated financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report and our consolidated financial statements and notes thereto included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2025.
This Quarterly Report and all subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances after the date of this Quarterly Report except as may be required by law.
2
Table of Contents
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL INFORMATION
THE ARENA GROUP HOLDINGS, INC. AND SUBSIDIARIES
Index to Condensed Consolidated Financial Statements (Unaudited)
| PAGE | |||||
Condensed Consolidated Balance Sheets – As of June 30, 2026 (Unaudited) and December 31, 2025 | 4 | ||||
Condensed Consolidated Statements of Operations (Unaudited) - Three Months and Six Months Ended June 30, 2026 and 2025 | 5 | ||||
Condensed Consolidated Statements of Stockholders’ Deficiency (Unaudited) - Three Months and Six Months Ended June 30, 2026 and 2025 | 6 | ||||
Condensed Consolidated Statements of Cash Flows (Unaudited) - Six Months Ended June 30, 2026 and 2025 | 8 | ||||
Notes to Condensed Consolidated Financial Statements (Unaudited) | 9 | ||||
3
Table of Contents
THE ARENA GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of dollars, except for share data)
| As of | |||||||||||
| June 30, 2026 | December 31, 2025 | ||||||||||
| (Unaudited) | |||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable (net of allowances of $ | |||||||||||
| Prepayments and other current assets | |||||||||||
| Total current assets | |||||||||||
| Property and equipment, net | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Platform development, net | |||||||||||
| Acquired and other intangible assets, net | |||||||||||
| Other long-term assets | |||||||||||
| Goodwill | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and stockholders’ deficiency | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued expenses and other | |||||||||||
| Unearned revenue | |||||||||||
Subscription and returns reserve liability | |||||||||||
| Operating lease liability, current portion | |||||||||||
| Liquidated damages payable | |||||||||||
| Total current liabilities | |||||||||||
| Unearned revenue, net of current portion | |||||||||||
| Operating lease liability, net of current portion | |||||||||||
| Deferred tax liabilities | |||||||||||
| Term debt | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies (Note 18) | |||||||||||
| Stockholders' deficiency: | |||||||||||
Common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Total stockholders’ deficiency | ( | ( | |||||||||
| Total liabilities and stockholders’ deficiency | $ | $ | |||||||||
See accompanying notes to condensed consolidated financial statements
4
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THE ARENA GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands of dollars, except for share data)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenue | $ | $ | $ | $ | |||||||||||||||||||
Cost of revenue (includes amortization of platform development and developed technology for the three months ended June 30, 2026 and 2025 of $ | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Selling and marketing | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||
| Income from operations | |||||||||||||||||||||||
| Other (expense) | |||||||||||||||||||||||
| Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
| Liquidated damages | ( | ( | ( | ( | |||||||||||||||||||
| Total other expense | ( | ( | ( | ( | |||||||||||||||||||
| (Loss) income before income taxes | ( | ( | |||||||||||||||||||||
| Income tax benefit (provision) | ( | ( | |||||||||||||||||||||
| (Loss) income from continuing operations | ( | ( | |||||||||||||||||||||
| Income from discontinued operations, net of tax | |||||||||||||||||||||||
| Net (loss) income | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Basic net income (loss) per common share (Note 1): | |||||||||||||||||||||||
| Continuing operations | $ | $ | $ | ( | $ | ||||||||||||||||||
| Discontinued operations | |||||||||||||||||||||||
| Basic net income (loss) per common share | $ | $ | $ | ( | $ | ||||||||||||||||||
| Diluted net income (loss) per common share (Note 1): | |||||||||||||||||||||||
| Continuing operations | $ | $ | $ | ( | $ | ||||||||||||||||||
| Discontinued operations | |||||||||||||||||||||||
| Diluted net income (loss) per common share | $ | $ | $ | ( | $ | ||||||||||||||||||
| Weighted average number of common shares outstanding (Note 1): | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
5
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THE ARENA GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIENCY (Unaudited)
(In thousands of dollars, except for share data)
Three and Six Months Ended June 30, 2026
| Common Stock | Common To Be Issued | ||||||||||||||||||||||||||||||||||||||||
| Shares | Par Value | Shares | Par value | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders' Deficiency | |||||||||||||||||||||||||||||||||||
| Balance at April 1, 2026 | $ | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||
| Issuance of common stock for restricted stock units | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||
| Common Stock | Common To Be Issued | ||||||||||||||||||||||||||||||||||||||||
| Shares | Par Value | Shares | Par value | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders' Deficiency | |||||||||||||||||||||||||||||||||||
| Balance at January 1, 2026 | $ | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||
| Issuance of common stock for restricted stock units | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
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THE ARENA GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIENCY (Unaudited)
(In thousands of dollars, except for share data)
Three and Six Months Ended June 30, 2025
| Common Stock | Common To Be Issued | ||||||||||||||||||||||||||||||||||||||||
| Shares | Par Value | Shares | Par value | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders' Deficiency | |||||||||||||||||||||||||||||||||||
| Balance at April 1, 2025 | $ | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||
| Issuance of common stock for restricted stock units | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| Common stock withheld for taxes | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | $ | — | — | |||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||
| Common Stock | Common To Be Issued | ||||||||||||||||||||||||||||||||||||||||
| Shares | Par Value | Shares | Par value | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders' Deficiency | |||||||||||||||||||||||||||||||||||
| Balance at January 1, 2025 | $ | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||
| Issuance of common stock for restricted stock units | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| Common stock withheld for taxes | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
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THE ARENA GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands of dollars)
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities | |||||||||||
| Net (loss) income | $ | ( | $ | ||||||||
| Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: | |||||||||||
| Depreciation of property and equipment | |||||||||||
| Amortization of platform development and intangible assets | |||||||||||
| Amortization of debt costs | |||||||||||
| Liquidated damages | |||||||||||
| Stock-based compensation | |||||||||||
| Deferred income taxes | ( | ||||||||||
| Provision for credit losses | |||||||||||
| Non-cash lease expense | |||||||||||
| Other, net | ( | ||||||||||
| Change in operating assets and liabilities: | |||||||||||
| Accounts receivable | ( | ||||||||||
| Prepayments and other current assets | |||||||||||
| Other long-term assets | |||||||||||
| Accounts payable | ( | ||||||||||
| Accrued expenses and other | ( | ( | |||||||||
| Unearned revenue | ( | ( | |||||||||
| Subscription and returns reserve liability | ( | ||||||||||
| Operating lease liability | ( | ||||||||||
Net cash provided by operating activities | |||||||||||
| Cash flows from investing activities | |||||||||||
| Purchases of intangible assets | ( | ||||||||||
| Capitalized platform development | ( | ( | |||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Cash flows from financing activities | |||||||||||
| Repayment of Simplify loan | ( | ||||||||||
| Payments of taxes from common stock withheld | ( | ||||||||||
Net cash used in financing activities | ( | ||||||||||
| Net change in cash and cash equivalents | |||||||||||
| Cash and cash equivalents — beginning of year | |||||||||||
| Cash and cash equivalents — end of period | $ | $ | |||||||||
| Supplemental disclosures of cash flow information | |||||||||||
| Cash paid for interest | $ | $ | |||||||||
| Cash paid for income taxes | |||||||||||
| Noncash investing and financing activities | |||||||||||
| Reclassification of stock-based compensation to platform development | $ | $ | |||||||||
| Purchase of intangible asset with accrued expenses and other | |||||||||||
See accompanying notes to condensed consolidated financial statements.
8
Table of Contents
THE ARENA GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
($ in thousands, unless otherwise stated)
1. Summary of Significant Accounting Policies
Basis of Presentation
The condensed consolidated financial statements include the accounts of The Arena Group Holdings, Inc. and its wholly owned subsidiaries (“The Arena Group” or the “Company”), after eliminating all significant intercompany balances and transactions.
The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete audited financial statements. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements, which are included in The Arena Group’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 16, 2026.
The condensed consolidated financial statements as of June 30, 2026 and 2025, and for the three months and six months ended June 30, 2026 and 2025, are unaudited but, in management’s opinion, include all adjustments necessary for a fair presentation of the results of interim periods. All such adjustments are of a normal recurring nature. The year-end condensed consolidated balance sheet as of December 31, 2025, was derived from audited financial statements, but does not include all disclosures required by GAAP. The results of operations for interim periods are not necessarily indicative of the results to be expected for the entire fiscal year.
The Company’s business and operations are sensitive to general business and economic conditions in the United States and worldwide. These conditions include short-term and long-term interest rates, inflation, fluctuations in debt and equity capital markets and the general condition of the United States and world economy. A host of factors beyond the Company’s control could cause fluctuations in these conditions. Adverse developments in these general business and economic conditions could have a material adverse effect on the Company’s financial condition and the results of its operations.
In addition, the Company will compete with many companies that currently have extensive and well-funded projects, marketing and sales operations as well as extensive human capital. The Company may be unable to compete successfully against these companies. The Company’s industry is characterized by rapid changes in technology and market demands. As a result, the Company’s products, services, or expertise may become obsolete or unmarketable. Changes in algorithms may affect search engine rankings throughout the sector and potentially lead to decreased traffic to the Company's websites. The Company’s future success will depend on its ability to adapt to technological advances, anticipate customer and market demands, and enhance its current technology under development.
Uncertainty in the global economy presents significant risks to the Company’s business. Increases in inflation, instability in the global banking system, geopolitical factors, including the ongoing conflicts in Ukraine and in the Middle East and the responses thereto, and the impact of tariffs on print production costs and the overall market for advertising may have an adverse effect on the Company’s business. While the Company is closely monitoring the impact of the current macroeconomic conditions on all aspects of its business, the ultimate extent of the impact on its business remains highly uncertain and will depend on future developments and factors that continue to evolve. Most of these developments and factors are outside of the Company’s control and could exist for an extended period of time. As a result, the Company is subject to continuing risks and uncertainties.
Segment Reporting
The Company operates within the media industry, providing digital content across four
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monetize editorially focused online content through various display and video advertisements that are viewed by internet users of the content. The Company has four
The Company’s chief operating decision maker (“CODM”) is the Chief Executive Officer. The CODM evaluates performance and allocates resources for all of the Company's reportable segments based on segment gross profit. This segment profit measure is defined as segment revenue less segment cost of revenue, consisting of those costs and expenses directly attributable to the segment. The segment profit measure is used by the CODM to assess the performance of each segment by comparing the results of each segment with one another (see Note 19).
Use of Estimates
The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported results of operations during the reporting period. Significant estimates include: allowance for credit losses; capitalization of platform development and associated useful lives; goodwill and other acquired intangible assets and associated useful lives; assumptions used in accruals for potential liabilities; stock-based compensation and the determination of the fair value; valuation allowances for deferred tax assets and uncertain tax positions; and assumptions used to calculate contingent liabilities. These estimates are based on information available as of the date of the condensed consolidated financial statements; therefore, actual results could differ from management’s estimates.
Recently Issued Accounting Standards Updates
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU aims to enhance the transparency of financial reporting by requiring public business entities (PBEs) to provide detailed disclosures about the components of significant expense captions presented in the income statement. The Company will be required to disclose, in a tabular format, the amounts recognized within each relevant expense caption in the income statement. This ASU is effective for fiscal years beginning after December 15, 2026; early adoption is permitted using either a prospective or retrospective transition method. The Company is not planning to early adopt. The Company expects ASU 2024-03 to require additional tabular disclosures in the notes to its condensed consolidated financial statements.
Income (loss) per Common Share
Basic net income (loss) per common share is computed using the weighted average number of common shares outstanding during the periods presented. Diluted net income (loss) per common share is computed using the weighted average number of common shares outstanding adjusted to include the potentially dilutive effect of stock awards, and in the three and six months ended June 30, 2025, our Series G convertible preferred stock.
The following table sets forth the computation of basic and diluted income (loss) per common share attributable to the Company’s stockholders (in thousands, except per share data):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| (Loss) income from continuing operations | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Income from discontinued operations, net of tax | |||||||||||||||||||||||
| Net (loss) income | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted average number of shares of common stock outstanding - basic (1) | |||||||||||||||||||||||
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| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Add: effect of dilutive Series G convertible preferred stock (2) | |||||||||||||||||||||||
| Add: effect of dilutive restricted stock units | |||||||||||||||||||||||
| Add: effect of dilutive common stock options | |||||||||||||||||||||||
| Weighted average number of common shares outstanding – dilutive | |||||||||||||||||||||||
| Net income (loss) from continuing operations | $ | $ | $ | ( | $ | ||||||||||||||||||
| Net income (loss) from discontinued operations | |||||||||||||||||||||||
| Basic net income (loss) per common share | $ | $ | $ | ( | $ | ||||||||||||||||||
| Net income (loss) from continuing operations | $ | $ | $ | ( | $ | ||||||||||||||||||
| Net income (loss) from discontinued operations | |||||||||||||||||||||||
| Diluted net income (loss) per common share | $ | $ | $ | ( | $ | ||||||||||||||||||
(1) Includes: restricted stock awards only when the underlying restrictions expire, the shares are no longer forfeitable, and are thus vested; restricted stock units only when the underlying restrictions expire, the shares are no longer forfeitable, and are thus vested; and contingently issuable shares only when there are no circumstances under which those shares would not be issued.
(2) On December 9, 2025, 168 shares of Series G Convertible Preferred Stock were converted to common stock. As a result, no convertible preferred shares are outstanding as of June 30, 2026.
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Financing Warrants (1) | |||||||||||||||||||||||
| ABG Warrants (1) | |||||||||||||||||||||||
| AllHipHop Warrants (1) | |||||||||||||||||||||||
| Publisher Partner Warrants (1) | |||||||||||||||||||||||
| Restricted stock units | |||||||||||||||||||||||
| Common stock options | |||||||||||||||||||||||
| Anti-dilutive securities, excluded | |||||||||||||||||||||||
(1) Financing Warrants, ABG Warrants, AllHipHop Warrants, and Publisher Partner Warrants were all either expired, forfeited, or cancelled as of December 31, 2025.
2. Discontinued Operations
On March 18, 2024, the Company discontinued the Sports Illustrated media business (the “SI Business”) that was operated under the Licensing Agreement with ABG-SI, LLC (“ABG”) dated June 14, 2019 (as amended to date, the “Licensing Agreement”). This discontinuation of the SI Business (i.e., discontinued operations) followed the termination of the Licensing Agreement by ABG on January 18, 2024. The last date of any obligation of the Company to perform under the Licensing Agreement was March 18, 2024.
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On April 29, 2025, the ABG Group Legal Matters (as further described in Note 18) were resolved through a confidential settlement with outstanding liabilities being released by all sides. The remaining assets and liabilities of the SI Business were settled.
The table below sets forth the income from discontinued operations:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenue (1) | $ | $ | $ | $ | |||||||||||||||||||
| Cost of revenue (2) | ( | ( | |||||||||||||||||||||
| Gross profit | $ | $ | $ | $ | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Selling and marketing (2) | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| General and administrative (3) | ( | ( | |||||||||||||||||||||
| Total operating expenses (income) | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Income from discontinued operations | |||||||||||||||||||||||
| Net income from discontinued operations | $ | $ | $ | $ | |||||||||||||||||||
(1) Revenue for the three and six months ended June 30, 2025 include the derecognition of SI related subscription liabilities of $45,107
(2) Cost of revenue and selling and marketing expenses for the three and six months ended June 30, 2025, include adjustments to previously reported accounts payable that were settled for a reduced amount.
(3) General and administrative expenses for the three and six months ended June 30, 2025, include a reversal of SI business related liabilities, including a $45,000 termination fee liability (recorded in the six months ended June 30, 2024), a $3,750 royalty fee liability and $221 of previously reported accounts payable that was settled for a reduced amount.
The table below sets forth the cash flows of the discontinued operations:
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities from discontinued operations | |||||||||||
| Net income from discontinued operations | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Accounts payable | ( | ||||||||||
| Accrued expenses and other | ( | ||||||||||
| Subscription refund liability | ( | ||||||||||
| Subscription liability | ( | ||||||||||
| Royalty fee liability | ( | ||||||||||
| Termination fee liability | ( | ||||||||||
| Net cash provided by operating activities from discontinued operations | $ | $ | |||||||||
3. Acquisitions and Dispositions
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On May 12, 2025, the Company entered into a Membership Interest Purchase Agreement to purchase 100 % of the membership interests of TravelHost LLC ("TravelHost") from Simplify Inventions LLC ("Simplify"), a related party as further described in Note 17, Related Party Transactions, for a purchase price of $1,000 . Because TravelHost is an affiliate of the Company under common control of Simplify, the Company accounted for the transaction as a common control transfer of assets and recorded the acquired intangible assets at Simplify’s carryover basis within intangible assets, net in the accompanying consolidated balance sheet.
4. Balance Sheet Components
The components of certain balance sheet amounts are as follows:
Accounts Receivable and Allowance for Credit Losses – The Company receives payments from advertising, performance marketing and syndication customers based upon contractual payment terms; accounts receivable are recorded when the right to consideration becomes unconditional and are generally collected within 90 days. Accounts receivable from merchant credit card processors are recorded when the right to consideration becomes unconditional and are generally collected weekly. Accounts receivable have been reduced by an allowance for credit losses. The Company maintains the allowance for estimated losses resulting from the inability of the Company’s customers to make required payments. The allowance represents the current estimate of lifetime expected credit losses over the remaining duration of existing accounts receivable considering current market conditions and supportable forecasts when appropriate. The estimate is a result of the Company’s ongoing evaluation of collectability, customer creditworthiness, historical levels of credit losses, and future expectations. Accounts receivable are written off when deemed uncollectible and collection of the receivable is no longer being actively pursued. Accounts receivable as of June 30, 2026 and December 31, 2025 of $18,489 and $22,270 , respectively, are presented net of allowance for credit losses.
The following table summarizes the allowance for credit losses activity:
| Six Months Ended June 30, 2026 | Year Ended December 31, 2025 | ||||||||||
| Allowance for credit losses beginning of year | $ | $ | |||||||||
| Additions | |||||||||||
| Deductions - write-off | ( | ( | |||||||||
| Allowance for credit losses end of period | $ | $ | |||||||||
Prepayments and Other Current Assets – Prepayments and other current assets are summarized as follows:
| As of | |||||||||||
| June 30, 2026 | December 31, 2025 | ||||||||||
| Prepaid expense | $ | $ | |||||||||
| Prepaid supplies | |||||||||||
| Employee retention credits | |||||||||||
| Total prepayments and other current assets | $ | $ | |||||||||
Under the provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and the subsequent extensions of the CARES Act, the Company was eligible for a refundable employee retention credit subject to certain criteria. As of June 30, 2026 and December 31, 2025, the Company has a receivable balance of $1,285 and $1,294 , respectively, as presented in the above table.
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Property and Equipment – Property and equipment are summarized as follows:
| As of | |||||||||||
| June 30, 2026 | December 31, 2025 | ||||||||||
| Office equipment and computers | $ | $ | |||||||||
| Leasehold improvements | |||||||||||
| Furniture and fixtures | |||||||||||
| Less accumulated depreciation and amortization | ( | ( | |||||||||
| Net property and equipment | $ | $ | |||||||||
Depreciation and amortization expense for the three months ended June 30, 2026 and 2025 was $15 and $31 , respectively. Depreciation and amortization expense for the six months ended June 30, 2026 and 2025 was $15 and $72 , respectively. No
Platform Development – Platform development costs are summarized as follows:
| As of | |||||||||||
| June 30, 2026 | December 31, 2025 | ||||||||||
| Platform development | $ | $ | |||||||||
| Less accumulated amortization | ( | ( | |||||||||
| Net platform development | $ | $ | |||||||||
A summary of platform development activity for the six months ended June 30, 2026 is as follows:
| Platform development beginning of period | $ | ||||||||||
| Capitalized costs | |||||||||||
| Less dispositions (1) | ( | ||||||||||
| Total capitalized costs | |||||||||||
| Platform development end of period | $ | ||||||||||
(1) Dispositions represent fully amortized legacy platform costs written-off upon decommissioning and replacement.
Amortization expense for platform development for the three months ended June 30, 2026 and 2025 was $1,078 and $1,108 , respectively. Amortization expense for platform development for the six months ended June 30, 2026 and 2025 was $2,128 and $2,384 , respectively. Amortization expense for platform development is included in cost of revenue on the consolidated statements of operations. No
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Intangible Assets – Intangible assets subject to amortization consisted of the following:
| As of June 30, 2026 | As of December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| Carrying Amount | Accumulated Amortization | Net Carrying Amount | Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||||||||||||||||||||||||
| Developed technology | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
| Brand name | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Trade name | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Subscriber relationships | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Advertiser relationships | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Database | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Digital content | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Total intangible assets | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
Intangible assets subject to amortization were recorded as part of the Company’s business acquisitions. Amortization expense for the three months ended June 30, 2026 and 2025 was $893 and $850 , respectively, and is included in Depreciation and amortization on the condensed consolidated statements of operations. Amortization expense for the six months ended June 30, 2026 and 2025 was $1,786 and $1,699 , respectively, and is included in Depreciation and amortization on the condensed consolidated statements of operations.
Accrued Expenses and Other – Accrued expenses and other are summarized as follows:
| As of | |||||||||||
| June 30, 2026 | December 31, 2025 | ||||||||||
| General accrued expenses | $ | $ | |||||||||
| Accrued payroll and related taxes | |||||||||||
| Accrued publisher expenses | |||||||||||
| Liabilities in connection with acquisitions and dispositions | |||||||||||
| Other accrued expenses | |||||||||||
| Total accrued expenses and other | $ | $ | |||||||||
5. Leases
The Company has a real estate lease for the use of office space. In March 2026, the Company entered into an operating sublease agreement for a portion of office space that it previously occupied. Sublease income is recognized on a straight-line basis over the sublease term and totaled $161 and $187 for the three and six months ended June 30, 2026.
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The table below presents supplemental information related to the operating lease:
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Operating lease costs during the period | $ | $ | |||||||||
| Operating sublease income | ( | ||||||||||
| Cash payments included in the measurement of operating lease liabilities during the period (1) | |||||||||||
| Operating lease liability arising from obtaining lease right-of-use assets during the period | $ | ||||||||||
| Weighted-average remaining lease term (in years) as of period-end | |||||||||||
| Weighted-average discount rate during the period | % | % | |||||||||
The Company generally utilizes its incremental borrowing rate based on information available at the commencement of the lease in determining the present value of future payments since the implicit rate for the Company’s leases is not readily determinable.
Variable lease expense includes rental increases that are not fixed, such as those based on amounts paid to the lessor based on cost or consumption, such as maintenance and utilities.
The components of operating lease costs were as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Operating lease costs included in: | |||||||||||||||||||||||
| General and administrative | $ | $ | $ | $ | |||||||||||||||||||
| Total operating costs | |||||||||||||||||||||||
| Less sublease income | ( | ( | |||||||||||||||||||||
| Total operating lease costs, net | $ | ( | $ | $ | $ | ||||||||||||||||||
Maturities of the operating lease liabilities as of June 30, 2026 are summarized as follows:
| Years Ending December 31, | |||||
| 2026 (remaining six months of the year) | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Minimum lease payments | |||||
| Less imputed interest | ( | ||||
| Present value of operating lease liabilities | |||||
| Current portion of operating lease liabilities | |||||
| Long-term portion of operating lease liabilities | |||||
| Total operating lease liabilities | $ | ||||
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6. Goodwill
Goodwill is as follows:
| As of | |||||||||||
| June 30, 2026 | December 31, 2025 | ||||||||||
| Carrying value at beginning of year | $ | $ | |||||||||
| Carrying value at end of period | $ | $ | |||||||||
7. Liquidated Damages Payable
Liquidated damages were recorded as a result of the following: (i) certain registration rights agreements that provide for damages if the Company does not register certain shares of the Company’s common stock within the requisite time frame (the “Registration Rights Damages”); and (ii) certain securities purchase agreements that provide for damages if the Company does not maintain its periodic filings with the SEC within the requisite time frame (the “Public Information Failure Damages”).
Obligations with respect to the liquidated damages payable are summarized as follows:
| As of June 30, 2026 | |||||||||||||||||||||||
| Registration Rights Damages | Public Information Failure Damages | Accrued Interest | Balance | ||||||||||||||||||||
| MDB common stock to be issued (1) | $ | $ | $ | $ | |||||||||||||||||||
| Series H convertible preferred stock | |||||||||||||||||||||||
| Convertible debentures (2) | |||||||||||||||||||||||
| Series J convertible preferred stock (2) | |||||||||||||||||||||||
| Series K convertible preferred stock (2) | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| As of December 31, 2025 | |||||||||||||||||||||||
| Registration Rights Damages | Public Information Failure Damages | Accrued Interest | Balance | ||||||||||||||||||||
| MDB common stock to be issued (1) | $ | $ | $ | $ | |||||||||||||||||||
| Series H convertible preferred stock | |||||||||||||||||||||||
| Convertible debentures (2) | |||||||||||||||||||||||
| Series J convertible preferred stock (2) | |||||||||||||||||||||||
| Series K convertible preferred stock (2) | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
(1)Consists of shares of common stock issuable to MDB Capital Group, LLC (“MDB”).
(2)Represents previously issued and converted debt or equity securities.
As of June 30, 2026 and December 31, 2025, the short-term liquidated damages payable were $3,686 and $3,535 , respectively. The Company will continue to accrue interest on the liquidated damages balance at 1.0 % per month based on the balance outstanding as of June 30, 2026, or $3,686 , until paid. There is no scheduled date when the unpaid liquidated damages become due.
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During the three months ended June 30, 2026 and 2025, the Company recorded accrued interest on liquidated damages of $76 151
8. Fair Value
The Company estimates the fair value of financial instruments using available market information and valuation methodologies the Company believes to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of amounts the Company would realize upon disposition.
The fair value hierarchy consists of three broad levels of inputs that may be used to measure fair value, which are described below:
Level 1. Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2. Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and
Level 3. Assets or liabilities for which fair value is based on valuation models with significant unobservable pricing inputs and which result in the use of management estimates.
The Company’s financial instruments may consist of Level 1, Level 2 and Level 3 valuations. As of June 30, 2026 and December 31, 2025, the Company’s cash equivalents of $4,308 and $4,241 , respectively, were Level 1 assets and included savings deposits, overnight investments, and other liquid funds with financial institutions.
9. Simplify Loan
On August 19, 2024, the Company entered into an amended and restated promissory note (the “Amended Promissory Note”), in connection with the amendment to the March 13, 2024 working capital loan agreement with Simplify, a related party as further described in Note 17 (the “Simplify Loan”), pursuant to which the Company had available up to $50,000 at ten percent (10.0 %) interest rate per annum (the “Applicable Interest Rate”). The Simplify Loan is secured by certain assets of the Company and its subsidiaries, which are also guarantors of the obligations. In the event of a default, including but not limited to the failure to pay any amounts when due, the interest will accrue at the Applicable Interest Rate plus five percent (5.0 %) and the Simplify Loan will be payable upon demand to Simplify.
On December 31, 2025, the Company entered into Amendment No. 2 to the Simplify Loan, which reduced the maximum principal amount available under the Simplify Loan to $25,000 and extended the maturity date to December 1, 2027. All other material terms and conditions of the Simplify Loan, as previously disclosed, remain unchanged. As of both June 30, 2026 and December 31, 2025, there was no
Information for the three and six months ended June 30, 2026 and 2025, with respect to interest expense related to the Simplify Loan is provided under the heading Interest Expense in Note 11.
10. Term Debt
Pursuant to the Note Purchase Agreement, as amended from time to time, leading to the Third Amended and Restated Note Purchase Agreement dated December 15, 2022 (the “Third Amended and Restated Notes”), as of June 30, 2026 and December 31, 2025, the Company has notes outstanding referred to as the senior secured notes (the “Senior Secured Notes”), the delayed draw term notes (the “Delayed Draw Term Notes”), the 2022 bridge notes (the “2022 Bridge Notes”) and the 2023 Notes, as further described below (see Note 17) and collectively referred to as the “Term Debt”.
On December 31, 2025, the Company entered into Amendment No. 4 to the Third Amended and Restated Note Purchase Agreement (“Amendment No. 4”). Amendment No. 4 amended the definition of “Maturity Date” for all of the Term Debt to the earlier of (i) December 31, 2027 or (ii) acceleration upon an event of default. In addition, the Company made a
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curtailment payment of $13,000 , which was applied to reduce the outstanding principal balance of all notes in the Term Debt.
Senior Secured Notes
The terms of the Senior Secured Notes provide for:
● | a provision for the Company to enter into Delayed Draw Term Notes (as described below); | |||||||
● | a provision where the Company added $ | |||||||
● | a provision where the paid in-kind interest can be paid in shares of the Company’s common stock based upon the conversion rate specified in the Certificate of Designation for the Series K convertible preferred stock, subject to certain adjustments; | |||||||
● | an interest rate of | |||||||
● | interest on the notes payable after February 15, 2022, at the agent’s sole discretion, either (a) in cash quarterly in arrears on the last day of each fiscal quarter or (b) by continuing to add such interest due on such payment dates to the principal amount of the notes; | |||||||
● | a maturity date of December 31, 2027, subject to certain acceleration conditions; and | |||||||
● | the Company to enter into the 2022 Bridge Notes for $ | |||||||
Delayed Draw Term Notes
The terms of the Delayed Draw Term Notes provide for:
● | an interest rate of | |||||||
● | interest on the notes payable after February 15, 2022, at the agent’s sole discretion, either (a) in cash quarterly in arrears on the last day of each fiscal quarter or (b) by continuing to add such interest due on such payment dates to the principal amount of the notes; and | |||||||
● | a maturity date on December 31, 2027, subject to certain acceleration terms. | |||||||
2022 Bridge Notes
The terms of the 2022 Bridge Notes provide for:
● | an interest rate fixed at | |||||||
● | a maturity date of December 31, 2027, subject to certain mandatory prepayment requirements, including, but not limited to, a requirement that the Company apply the net proceeds from certain debt incurrences or equity offerings to repay the notes; and | |||||||
● | an election to prepay the 2022 Bridge Notes, at any time, in whole or in part with no premium or penalty. | |||||||
2023 Notes
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The terms of the 2023 Notes, pursuant to Amendment No. 1 under the Third Amended and Restated Notes dated August 14, 2023, provide for:
● | an interest rate fixed at | |||||||
● | a maturity date of December 31, 2027; and | |||||||
● | an election to prepay the 2023 Notes, at any time, at | |||||||
The following table summarizes Term Debt:
| As of June 30, 2026 | As of December 31, 2025 | ||||||||||||||||||||||||||||||||||
| Principal Balance | Unamortized Discount and Debt Issuance Costs | Carrying Value | Principal Balance | Unamortized Discount and Debt Issuance Costs | Carrying Value | ||||||||||||||||||||||||||||||
Senior Secured Notes, effective interest rate of | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Delayed Draw Term Notes, effective interest rate of | ( | ( | |||||||||||||||||||||||||||||||||
2022 Bridge Notes, effective interest rate of | ( | ( | |||||||||||||||||||||||||||||||||
2023 Notes, effective interest rate of | |||||||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
The debt issuance costs incurred, as amended based on certain debt modifications, are being amortized on a straight-line basis (which approximates the effective interest method) over the applicable term of the Term Debt.
Information for the three and six months ended June 30, 2026 and 2025 with respect to interest expense related to the Term Debt is provided below.
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11. Interest Expense
The following table represents interest expense:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Amortization of debt costs: | |||||||||||||||||||||||
| Term Debt (related party) | $ | $ | $ | $ | |||||||||||||||||||
| Total amortization of debt costs | |||||||||||||||||||||||
| Cash paid interest: | |||||||||||||||||||||||
| Simplify Loan (related party) | |||||||||||||||||||||||
| Term Debt (related party) | |||||||||||||||||||||||
| Other | |||||||||||||||||||||||
| Total cash paid interest | |||||||||||||||||||||||
| Less: Interest Income | ( | ( | |||||||||||||||||||||
| Total interest expense, net | $ | $ | $ | $ | |||||||||||||||||||
12. Preferred Stock
The Company has the authority to issue 1,000,000 shares of preferred stock, $0.01 par value per share. As of June 30, 2026, no shares of preferred stock were outstanding.
13. Stockholders’ Deficiency
Common Stock
The Company has the authority to issue 1,000,000,000 shares of common stock, $0.01 par value per share.
Restricted Stock Units – The Company issued, in connection with the vesting of restricted stock units 7,863 and 4,999 shares of the Company’s common stock during the three months ended June 30, 2026 and 2025, respectively, as reflected on the condensed consolidated statements of stockholders’ deficiency. The Company issued, in connection with the vesting of restricted stock units, 15,723 and 12,498 shares of the Company’s common stock during the six months ended June 30, 2026 and 2025, respectively, as reflected on the condensed consolidated statements of stockholders’ deficiency.
14. Compensation Plans
The Company provides stock-based and equity-based compensation in the form of (a) restricted stock awards and restricted stock units to certain employees (the “Restricted Stock”), (b) stock option awards, unrestricted stock awards and stock appreciation rights to employees, directors and consultants under various plans (the “Common Stock Options”), and (c) common stock warrants, referred to as the ABG Warrants and Publisher Partner Warrants (collectively the “Warrants”) as referenced in the below table. The ABG Warrants were forfeited as part of the settlement with the ABG Group (see Note 18). All Publisher Partner Warrants were cancelled in December 2025.
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Stock-based compensation and equity-based expense charged to operations or capitalized are summarized as follows:
| Three Months Ended June 30, 2026 | |||||||||||||||||||||||
| Restricted Stock | Equity Plans | Warrants | Totals | ||||||||||||||||||||
| Cost of revenue | $ | $ | $ | $ | |||||||||||||||||||
| Selling and marketing | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Total costs charged to operations | |||||||||||||||||||||||
| Total stock-based compensation | $ | $ | $ | $ | |||||||||||||||||||
| Six months ended June 30, 2026 | |||||||||||||||||||||||
| Restricted Stock | Equity Plans | Warrants | Totals | ||||||||||||||||||||
| Cost of revenue | $ | $ | $ | $ | |||||||||||||||||||
| Selling and marketing | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Total costs charged to operations | |||||||||||||||||||||||
| Total stock-based compensation | $ | $ | $ | $ | |||||||||||||||||||
| Three Months Ended June 30, 2025 | |||||||||||||||||||||||
| Restricted Stock | Equity Plans | Warrants | Totals | ||||||||||||||||||||
| Cost of revenue | $ | $ | $ | $ | |||||||||||||||||||
| Selling and marketing | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Total costs charged to operations | |||||||||||||||||||||||
| Capitalized platform development | |||||||||||||||||||||||
| Total stock-based compensation | $ | $ | $ | $ | |||||||||||||||||||
| Six Months Ended June 30, 2025 | |||||||||||||||||||||||
| Restricted Stock | Equity Plans | Warrants | Totals | ||||||||||||||||||||
| Cost of revenue | $ | $ | $ | $ | |||||||||||||||||||
| Selling and marketing | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Total costs charged to operations | |||||||||||||||||||||||
| Capitalized platform development | |||||||||||||||||||||||
| Total stock-based compensation | $ | $ | $ | $ | |||||||||||||||||||
Unrecognized compensation expense and expected weighted-average period to be recognized related to the stock-based compensation awards and equity-based awards as of June 30, 2026 were as follows:
| Restricted Stock | Equity Plans | Warrants | Totals | ||||||||||||||||||||
| Unrecognized compensation cost | $ | $ | $ | $ | |||||||||||||||||||
| Weighted-average period expected to be recognized (in years) | |||||||||||||||||||||||
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15. Revenue Recognition
Disaggregation of Revenue
The following table provides information about disaggregated revenue by category, geographical market and timing of revenue recognition:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenue by category: | |||||||||||||||||||||||
| Digital revenue | |||||||||||||||||||||||
| Digital advertising | $ | $ | $ | $ | |||||||||||||||||||
| Digital subscriptions | |||||||||||||||||||||||
| Publisher revenue | |||||||||||||||||||||||
| Performance marketing | |||||||||||||||||||||||
| Other digital revenue | |||||||||||||||||||||||
| Total digital revenue | |||||||||||||||||||||||
| Print revenue | |||||||||||||||||||||||
| Print revenue | |||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | |||||||||||||||||||
| Revenue by geographical market: | |||||||||||||||||||||||
| United States | $ | $ | $ | $ | |||||||||||||||||||
| Other | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| Revenue by timing of recognition: | |||||||||||||||||||||||
| At point in time | $ | $ | $ | $ | |||||||||||||||||||
| Over time | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
Contract Balances
The timing of the Company’s performance under its various contracts often differs from the timing of the customer’s payment, which results in the recognition of a contract asset or a contract liability. A contract asset is recognized when a good or service is transferred to a customer and the Company does not have the contractual right to bill for the related performance obligations. A contract liability is recognized when consideration is received from the customer prior to the transfer of goods or services.
The following table provides information about contract balances:
| As of | |||||||||||
| June 30, 2026 | December 31, 2025 | ||||||||||
| Unearned revenue (short-term contract liabilities): | |||||||||||
| Digital revenue | $ | $ | |||||||||
| Unearned revenue (long-term contract liabilities): | |||||||||||
| Digital revenue | $ | $ | |||||||||
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16. Income Taxes
The provision for income taxes in interim periods is determined using an estimate of the Company’s annual effective tax rate ("ETR"), adjusted for discrete items, if any, that arise during the period. In calculating the provision for interim income taxes, an estimated annual ETR is applied to year-to-date ordinary income. At the end of each interim period, the Company updates its estimate of the annual ETR expected to be applicable for the full fiscal year.
The income tax provision ETR for the three months ended June 30, 2026 and 2025 was 2.61 % and 7.31 %, respectively. The income tax provision ETR for the six months ended June 30, 2026 and 2025 was 7.68 % and 7.16 %, respectively. The decrease in the ETR for the three months ended June 30, 2026 and increase in ETR for the six months ended June 30, 2026, compared to the same periods in 2025, was primarily due to a decrease in pre-tax book income in the three and six months ended June 30, 2026 as compared to the income for the same periods in 2025.
The Company's ETR for the six months ended June 30, 2026 and 2025 remained below the U.S. federal statutory rate primarily due to the impact of the full valuation allowance. As of June 30, 2026, the Company maintains a valuation allowance against certain deferred tax assets, primarily related to net operating loss carryforwards and other deductible temporary differences. The realizability of deferred tax assets is assessed each reporting period based on all available positive and negative evidence.
The Company is now in a cumulative three-year income position, as some significant losses incurred in prior years are no longer included in the calculation and management currently forecasts profitability in subsequent quarters and cumulative pretax income for the full fiscal year. However, for the six months ended June 30, 2026, the Company incurred a pretax loss and continues to maintain a full valuation allowance.
While this positive evidence has not yet outweighed the historical negative evidence as of June 30, 2026, continued achievement of forecasted results could result in a partial or full release of the valuation allowance in a future interim period. Any such release, if recognized, could materially affect income tax expense and the effective tax rate.
As of June 30, 2026 and 2025, the Company had no uncertain tax positions or interest and penalties accrued related to income taxes.
17. Related Party Transactions
Principal Stockholders
Term Debt – As of June 30, 2026, the outstanding principal balance on the Term Debt with Renew Group Private Limited (“Renew”) was $97,691 . For the three months ended June 30, 2026 and 2025, the Company paid interest totaling $2,470 and $2,798 , respectively. For the six months ended June 30, 2026 and 2025, the Company paid interest totaling $4,912 and $5,565 , respectively.
Simplify Loan – For the three and six months ended June 30, 2025, the Company paid interest totaling $114 and $308 , respectively, under the Simplify Loan. The Company did not
Simplify Revenue – For the three months ended June 30, 2026 and 2025, the Company recognized digital advertising revenue from transactions with Living Essentials, LLC (“Living Essentials”), an affiliated entity of Simplify, totaling $100 and $880 , respectively. For the six months ended June 30, 2026 and 2025, the Company recognized digital advertising revenue from transactions with Living Essentials, totaling $350 and $1,830 , respectively. The outstanding accounts receivable due from Living Essentials were $74 as of June 30, 2026 and $193 as of December 31, 2025.
Simplify Expenses – For the three and six months ended June 30, 2026, the Company recognized a reduction of expenses from transactions with Agency 5, LLC ("Agency 5"), an affiliated entity of Simplify, totaling $0 and $51 , respectively. No 0 as of June 30, 2026 and $70 as of December 31, 2025.
Common Stock Owned by Simplify – Based on the Schedule 13D/A filed with the SEC on December 27, 2024 (which is its most recent filing), Simplify owns approximately 71.13 % of the outstanding shares of the Company’s common stock. As a result, Simplify has the ability to determine the outcome of any issue submitted to the Company’s stockholders for
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approval, including the election of directors. Prior to the consummation of the February 14, 2024 private placement of 5,555,555 shares of the Company's common stock to Simplify, the Company’s public stockholders held a majority of the outstanding shares of the Company’s common stock.
Asset Acquisition – The acquisition of TravelHost, as described in Note 3, Acquisitions and Dispositions, was a related party transaction. TravelHost was acquired from Simplify and also included an assignment of certain contracts from Bridge Media Networks, LLC, an affiliate of Simplify.
18. Commitments and Contingencies
Legal Contingencies
Claims and Litigation – The Company is subject to claims and litigation arising in the ordinary course of business. These matters typically involve routine litigation incidental to the Company's operations, including, but not limited to, commercial disputes, employment-related claims, and intellectual property matters. While the Company believes it has meritorious defenses to these claims, the ultimate outcome of these matters cannot be predicted with certainty.
Management believes that the resolution of these matters, individually or in the aggregate, will not have a material adverse effect on the Company's financial position, results of operations, or cash flows. The Company continues to monitor these matters and will update its assessments as new information becomes available.
Based on current knowledge, the Company believes that the final outcome of the matters discussed below will not likely, have a material adverse effect on its business, financial position, results of operations or cash flows; however, in light of the uncertainties involved in such matters, there can be no assurance that the outcome of each case or the costs of litigation, regardless of outcome, will not have a material adverse effect on the Company’s business.
On March 21, 2024, the former CEO and Chairman of the board of directors filed an action against the Company, members of its board of directors and Simplify, alleging claims for retaliation, breach of contract, wrongful termination and age discrimination, among other things, in the Superior Court of the State of California seeking damages in an amount of $20,000 . The Company and former board member Carlo Zola filed a Cross Complaint and Answer on June 20, 2024. Apart from Mr. Zola, the remaining individual board member defendants successfully filed a Motion to Quash Service of Summons based on lack of jurisdiction, and they have been dismissed from the case. On September 13, 2024, the former CEO and Chairman filed an Answer to the Company’s Cross Complaint. On May 15, 2025, the former CEO and Chairman filed a First Amended Complaint, which adds a new cause of action for alleged breach of contract based upon the Company’s refusal to advance certain attorneys’ fees to him. On May 28, 2025, the Company filed an Answer to the First Amended Complaint. The Company intends to vigorously defend itself against the allegations made in this lawsuit.
ABG Group Legal Matters
On March 18, 2024, the Company discontinued the Sports Illustrated media business (the “SI Business”) that was operated under a Licensing Agreement with ABG-SI, LLC (“ABG”). The disposal of the SI Business represented the discontinuation of the Company’s print subscription business, which was a component that represented a strategic shift that had a major effect on the Company’s financial results, and the component was classified as a discontinued operation.
On April 1, 2024, ABG and certain of its affiliates (the "ABG Group") filed an action against the Company and Manoj Bhargava, the former interim CEO and a principal stockholder, in the United States District Court of the Southern District of New York alleging, among other things, breach of contract related to the termination of the SI business, seeking damages in the amount of $48,750 ($3,750 royalty fee liability and $45,000 termination fee liability) resulting from the March 18, 2024 action.
19. Segment Reporting
The Company leverages its Platform to build content verticals powered by anchor brands. The Company’s strategy is to focus on key subject matter verticals where audiences are passionate about a topic category where it can leverage the
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strength of its core brands to grow its audience and monetize editorially focused online content through various display and video advertisements that are viewed by internet users of the content.
The Company’s CODM is the Chief Executive Officer. The Company’s CODM reviews segment gross profit by vertical when evaluating performance and making resource allocation decisions. This segment profit measure is defined as segment revenue less segment cost of revenue, consisting of costs and expenses directly attributable to the segment. The Company has four
Each of the reportable segments derives its revenue from digital advertising, digital subscriptions, publisher revenue, performance marketing, and other digital revenue.
The following tables summarize key financial information by segment:
| Three Months Ended June 30, 2026 | |||||||||||||||||||||||||||||
| Sports & Leisure | Finance | Lifestyle | Platform & Other | Total | |||||||||||||||||||||||||
| Digital advertising | $ | $ | $ | $ | |||||||||||||||||||||||||
| Digital subscriptions | |||||||||||||||||||||||||||||
| Publisher revenue | |||||||||||||||||||||||||||||
| Performance Marketing | |||||||||||||||||||||||||||||
| Other digital revenue | |||||||||||||||||||||||||||||
| Total digital revenue | |||||||||||||||||||||||||||||
| Print revenue | |||||||||||||||||||||||||||||
| Total revenue | $ | ||||||||||||||||||||||||||||
| Less: (1) | |||||||||||||||||||||||||||||
| External Cost of Content | |||||||||||||||||||||||||||||
| Internal Cost of Content | |||||||||||||||||||||||||||||
| Technology costs | |||||||||||||||||||||||||||||
| Print, distribution and fulfillment costs | |||||||||||||||||||||||||||||
| Other segment items (2) | |||||||||||||||||||||||||||||
| Segment gross profit | $ | $ | $ | $ | |||||||||||||||||||||||||
| Reconciliation of Segment Gross Profit to Loss Before Income Taxes: | |||||||||||||||||||||||||||||
| Less unallocated cost of revenue amounts: | |||||||||||||||||||||||||||||
| Internal cost of content | |||||||||||||||||||||||||||||
| Technology costs | |||||||||||||||||||||||||||||
| Amortization of developed technology and platform development | |||||||||||||||||||||||||||||
| Selling and marketing | |||||||||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||||||||
| Interest expense, net | |||||||||||||||||||||||||||||
| Liquidated damages | |||||||||||||||||||||||||||||
| Total unallocated costs | |||||||||||||||||||||||||||||
| Loss before income taxes | $ | ( | |||||||||||||||||||||||||||
(1)The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker.
(2)Other segment items primarily consist of sponsored content costs.
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| Three Months Ended June 30, 2025 | |||||||||||||||||||||||||||||
| Sports & Leisure | Finance | Lifestyle | Platform & Other | Total | |||||||||||||||||||||||||
| Digital advertising | $ | $ | $ | $ | |||||||||||||||||||||||||
| Digital subscriptions | |||||||||||||||||||||||||||||
| Publisher revenue | |||||||||||||||||||||||||||||
| Performance Marketing | |||||||||||||||||||||||||||||
| Other digital revenue | |||||||||||||||||||||||||||||
| Total digital revenue | |||||||||||||||||||||||||||||
| Print revenue | |||||||||||||||||||||||||||||
| Total revenue | $ | ||||||||||||||||||||||||||||
| Less: (1) | |||||||||||||||||||||||||||||
| External Cost of Content | |||||||||||||||||||||||||||||
| Internal Cost of Content | |||||||||||||||||||||||||||||
| Technology costs | |||||||||||||||||||||||||||||
| Print, distribution and fulfillment costs | ( | ( | |||||||||||||||||||||||||||
| Other segment items | |||||||||||||||||||||||||||||
| Segment gross profit | $ | $ | $ | $ | |||||||||||||||||||||||||
| Reconciliation of Segment Gross Profit to Income Before Income Taxes: | |||||||||||||||||||||||||||||
| Less unallocated cost of revenue amounts: | |||||||||||||||||||||||||||||
| Internal cost of content | |||||||||||||||||||||||||||||
| Technology costs | |||||||||||||||||||||||||||||
| Amortization of developed technology and platform development | |||||||||||||||||||||||||||||
| Selling and marketing | |||||||||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||||||||
| Interest expense, net | |||||||||||||||||||||||||||||
| Liquidated damages | |||||||||||||||||||||||||||||
| Total unallocated costs | |||||||||||||||||||||||||||||
| Income before income taxes | $ | ||||||||||||||||||||||||||||
(1)The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker.
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| Six months ended June 30, 2026 | |||||||||||||||||||||||||||||
| Sports & Leisure | Finance | Lifestyle | Platform & Other | Total | |||||||||||||||||||||||||
| Digital advertising | $ | $ | $ | $ | |||||||||||||||||||||||||
| Digital subscriptions | |||||||||||||||||||||||||||||
| Publisher revenue | |||||||||||||||||||||||||||||
| Performance Marketing | |||||||||||||||||||||||||||||
| Other digital revenue | |||||||||||||||||||||||||||||
| Total digital revenue | |||||||||||||||||||||||||||||
| Print revenue | |||||||||||||||||||||||||||||
| Total revenue | $ | ||||||||||||||||||||||||||||
| Less: (1) | |||||||||||||||||||||||||||||
| External Cost of Content | |||||||||||||||||||||||||||||
| Internal Cost of Content | |||||||||||||||||||||||||||||
| Technology costs | |||||||||||||||||||||||||||||
| Print, distribution and fulfillment costs | |||||||||||||||||||||||||||||
| Other segment items (2) | |||||||||||||||||||||||||||||
| Segment gross profit | $ | $ | $ | $ | |||||||||||||||||||||||||
| Reconciliation of Segment Gross Profit to Loss Before Income Taxes: | |||||||||||||||||||||||||||||
| Unallocated cost of revenue amounts: | |||||||||||||||||||||||||||||
| Internal cost of content | |||||||||||||||||||||||||||||
| Technology costs | |||||||||||||||||||||||||||||
| Amortization of developed technology and platform development | |||||||||||||||||||||||||||||
| Selling and marketing | |||||||||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||||||||
| Interest expense, net | |||||||||||||||||||||||||||||
| Liquidated damages | |||||||||||||||||||||||||||||
| Total unallocated costs | |||||||||||||||||||||||||||||
| Loss before income taxes | $ | ( | |||||||||||||||||||||||||||
(1)The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker.
(2)Other segment items primarily consist of sponsored content costs.
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| Six Months Ended June 30, 2025 | |||||||||||||||||||||||||||||
| Sports & Leisure | Finance | Lifestyle | Platform & Other | Total | |||||||||||||||||||||||||
| Digital advertising | $ | $ | $ | $ | |||||||||||||||||||||||||
| Digital subscriptions | |||||||||||||||||||||||||||||
| Publisher revenue | |||||||||||||||||||||||||||||
| Performance Marketing | |||||||||||||||||||||||||||||
| Other digital revenue | |||||||||||||||||||||||||||||
| Total digital revenue | |||||||||||||||||||||||||||||
| Print revenue | |||||||||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Less: (1) | |||||||||||||||||||||||||||||
| External Cost of Content | |||||||||||||||||||||||||||||
| Internal Cost of Content | |||||||||||||||||||||||||||||
| Technology costs | |||||||||||||||||||||||||||||
| Print, distribution and fulfillment costs | ( | ( | |||||||||||||||||||||||||||
| Other segment items | |||||||||||||||||||||||||||||
| Segment gross profit | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Reconciliation of Segment Gross Profit to Income (Loss) Before Income Taxes: | |||||||||||||||||||||||||||||
| Less unallocated cost of revenue amounts: | |||||||||||||||||||||||||||||
| Internal cost of content | |||||||||||||||||||||||||||||
| Technology costs | |||||||||||||||||||||||||||||
| Amortization of developed technology and platform development | |||||||||||||||||||||||||||||
| Selling and marketing | |||||||||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||||||||
| Interest expense, net | |||||||||||||||||||||||||||||
| Liquidated damages | |||||||||||||||||||||||||||||
| Total unallocated costs | |||||||||||||||||||||||||||||
| Income before income taxes | $ | ||||||||||||||||||||||||||||
(1)The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker.
The Company’s long-lived assets, consisting of property and equipment, and operating leases, are located in the United States. No asset information is provided to the CODM.
20. Subsequent Events
Acquisition of InfoSentience
On July 31, 2026 the Company completed the acquisition of 100 % of the issued and outstanding equity interests of Fantasy Journalist, Inc. (d/b/a InfoSentience), pursuant to a Stock Purchase Agreement. Fantasy Journalist is engaged in the business of deterministic artificial intelligence ("AI"), providing automated reports using AI to convert raw data into personalized narrative content.
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Total consideration for the acquisition was $2,000 , which consisted of $1,000 in cash paid at closing and estimated contingent consideration of $1,000 . The contingent consideration in the form of a three-year earnout payable in cash based on net revenue generated using InfoSentience’s technology.
Due to the timing of the closing of the transaction relative to the issuance of these financial statements, the initial accounting and valuation for the business combination is incomplete.
Term Debt and Simplify Loan
Effective August 7, 2026, the Company entered into a new debt agreement with Renew, which replaced the Term Debt and the Simplify Loan. The new debt agreement extended the maturity of the Term Debt by three years , added net leverage and fixed charge coverage covenants, and eliminated the $25,000 Simplify Loan. The interest rate remained unchanged from the Term Debt at 10.0 % per annum under the new agreement. There was no change in the principal amount of $97,691 . Additionally, the new debt agreement requires financial covenants to be tested quarterly on a trailing twelve-month basis, commencing with the first full fiscal quarter after closing: (i) maximum Total Net Leverage Ratio of 3.50x; and (ii) minimum Fixed Charge Coverage Ratio of 1.20:1.00. The new debt agreement also includes standard affirmative and negative operating covenants on the Company .
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (dollars in thousands, other than RPM)
The following discussion and analysis of our financial condition and results of operations for the three and six months ended June 30, 2026 and 2025 should be read together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report and in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2025 included in the Annual Report on Form 10-K filed with the SEC on March 16, 2026. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of a number of factors. We caution that assumptions, expectations, projections, intentions or beliefs about future events may, and often do, vary from actual results and the differences can be material. Please see “Forward-Looking Statements.”
Overview
The Arena Group Holdings, Inc. (“Arena Group,” “we,” or “our”) is a brand, data and IP company that builds, acquires, and scales high-performing digital assets. We combine technology, storytelling, and entrepreneurship to create deep content verticals that engage passionate audiences across sports & leisure, lifestyle, and finance.
Impact of Macroeconomic Conditions
Uncertainty in the global economy presents significant risks to our business. Increases in inflation, instability in the global banking system, geopolitical factors, including the ongoing conflicts in Ukraine and in the Middle East and the responses thereto, and the impact of tariffs on print production costs and the overall market for advertising may have an adverse effect on our business. While we are closely monitoring the impact of the current macroeconomic conditions on all aspects of our business, the ultimate extent of the impact on our business remains highly uncertain and will depend on future developments and factors that continue to evolve. Most of these developments and factors are outside of our control and could exist for an extended period of time. As a result, we are subject to continuing risks and uncertainties. For additional information, see the sections titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 16, 2026 and in this Quarterly Report.
Key Operating Metrics
Our key operating metrics are:
•Revenue per page view (“RPM”) – represents the advertising revenue earned per 1,000 page views. It is calculated as our advertising revenue during a period divided by our total page views during that period and multiplied by $1,000; and
•Monthly average page views – represents the total number of page views in a given month or the average of each month’s page views in a fiscal quarter or year, which is calculated as the total number of page views recorded in a quarter or year divided by three months or 12 months, respectively.
We monitor and review our key operating metrics as we believe that these metrics are relevant for our industry and specifically to us and to understanding our business. Moreover, they form the basis for trends informing certain predictions related to our financial condition. Our key operating metrics focus primarily on our digital advertising revenue, which is our most significant revenue stream. Management monitors and reviews these metrics because such metrics are readily measurable in real time and can provide valuable insight into the performance of and trends related to our digital advertising revenue and our overall business. We consider only those key operating metrics described here to be material to our financial condition, results of operations and future prospects.
For pricing indicators, we focus on RPM as it is the pricing metric most closely aligned with monthly average page views. RPM is an indicator of yield and pricing driven by both advertising density and demand from our advertisers.
Monthly average page views are measured across all properties hosted on the Platform and provide us with insight into volume, engagement and effective page management and are therefore our primary measure of traffic. We utilize a third-party source, Google Analytics, to confirm this traffic data.
As described above, these key operating metrics are critical for management as they provide insights into our digital advertising revenue generation and overall business performance. This information also provides feedback on the content
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on our website and its ability to attract and engage users, which allows us to make strategic business decisions designed to drive more users to read or view more of our content and generate higher advertising revenue across all properties hosted on the Platform.
For the three and six months ended June 30, 2026, our RPM was $23.96 and $21.12 compared to $25.12 and $23.85 for the same periods in 2025. The declines were primarily driven by broader advertising yield softness across the digital media landscape and unfavorable traffic mix shift away from higher yielding properties. For the three and six months ended June 30, 2026, monthly average page views were 187,715,312 and 196,971,983 compared to 423,358,110 and 375,434,097 for the same periods in 2025. These contractions were primarily attributable to core search engine algorithm updates in late 2025 that altered external referral patterns. Though these changes had an adverse impact on our first-half of 2026 results, the results of our optimization testing during the first quarter of 2026 are expected to stabilize audience and maximize yield over the remainder of the year. To further mitigate the impact of these algorithm updates, management is actively executing yield-enhancement initiatives, refining site architecture, elevating high-authority core content, and accelerating AI-driven traffic monetization tools. These technical enhancements are intended to stabilize audience reach, maximize yield, and align with evolving search engine indexing practices.
All dollar figures presented below are in thousands unless otherwise stated.
Liquidity and Capital Resources
Liquidity
While we continue to report positive cash flow from operations and currently maintain a cash balance of approximately $11 million, our ability to meet ongoing liquidity needs and support future growth is dependent, in part, on our access to external financing. If we cannot generate or obtain needed funds, we might be forced to make substantial reductions in our operating and capital expenses or pursue restructuring plans, which could adversely affect our business operations and ability to execute our current business strategy. In addition, if a default occurs as a result, our lender could elect to declare the indebtedness, together with accrued interest and other fees, to be immediately due and payable and proceed against any collateral securing that indebtedness. In addition, if repayment of our indebtedness is accelerated as a result of such default, we cannot assure you that we would have sufficient assets or access to credit to repay such indebtedness.
For the three and six months ended June 30, 2026, we reported a loss from continuing operations of $176 and $2,834, respectively. Despite these losses, we generated positive cash flow from operations for the six months ended June 30, 2026, and had cash and cash equivalents of $11,170 as of June 30, 2026.
Based on our current liquidity position, including cash on hand, expected operating cash flows, current operating plans and forecasts, and projected compliance with debt covenants, management believes that we have sufficient liquidity to meet our obligations as they come due for at least the next twelve months.
Cash
As of June 30, 2026, our principal sources of liquidity consisted of cash and cash equivalents of $11,170 and accounts receivable, net of allowance for credit losses, of 18,489. Our cash balance as of the issuance date of our accompanying condensed consolidated financial statements is $11,338.
Debt Refinance
Effective August 7, 2026, we entered into a new debt agreement with Renew that replaced our existing Term Debt and eliminated the $25,000 Simplify Loan. See FN 20, Subsequent Event, for further details.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Material Contractual Obligations
We have material contractual obligations that arise in the normal course of business primarily consisting of employment contracts, consulting agreements, leases, liquidated damages, debt and related interest payments. Purchase obligations consist of contracts primarily related to merchandise, equipment, and third party services, the majority of which are due in
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the next 12 months. See Note 5, Leases, Note 7, Liquidated Damages Payable, and Note 9, Simplify Loan and Note 10, Term Debt, in our accompanying condensed consolidated financial statements for amounts outstanding as of June 30, 2026, related to other material contractual obligations.
Discontinued Operations
On March 18, 2024, we discontinued the Sports Illustrated media business (the “SI Business”) that was operated under the Licensing Agreement with ABG-SI, LLC (“ABG”) dated June 14, 2019 (as amended to date, the “Licensing Agreement”). This discontinuation of the SI Business (i.e., discontinued operations) followed the termination of the Licensing Agreement by ABG on January 18, 2024. Income from our discontinued operations, net of tax, was $0 and $96,227 for the three months ended June 30, 2026 and 2025, respectively. Income from our discontinued operations, net of tax, was $0 and $96,250 for the six months ended June 30, 2026 and 2025, respectively.
On April 29, 2025, the ABG Group Legal Matters (as further described in Note 18) were resolved through a confidential settlement with outstanding liabilities being released by all sides. The remaining assets and liabilities of the SI Business were settled.
Working Capital
We have financed our working capital requirements since inception through issuances of equity securities and various debt financings. Our working capital surplus as of June 30, 2026 and December 31, 2025 is as follows:
| As of | |||||||||||
| June 30, 2026 | December 31, 2025 | ||||||||||
| Current assets | $ | 32,435 | $ | 35,630 | |||||||
| Current liabilities | (13,658) | (17,003) | |||||||||
| Working capital surplus | $ | 18,777 | $ | 18,627 | |||||||
As of June 30, 2026, we had working capital of $18,777, consisting of $32,435 in total current assets and $13,658 in total current liabilities as compared to working capital of $18,627 as of December 31, 2025. As of December 31, 2025, our working capital surplus consisted of $35,630 in total current assets and $17,003 in total current liabilities.
Our cash flows for the six months ended June 30, 2026 and 2025 consisted of the following:
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Net cash provided by operating activities | $ | 2,051 | $ | 13,970 | |||||||
| Net cash used in investing activities | (1,219) | (3,545) | |||||||||
| Net cash used in financing activities | — | (8,016) | |||||||||
| Net increase in cash and cash equivalents | $ | 832 | $ | 2,409 | |||||||
| Cash and cash equivalents, end of period | $ | 11,170 | $ | 6,771 | |||||||
For the six months ended June 30, 2026, net cash provided by operating activities was $2,051, consisting primarily of $44,834 of cash received from customers, offset by $37,871 of cash paid to employees, Publisher Partners, expert contributors, suppliers, and vendors, and for revenue share arrangements and professional services, and $4,912 of cash paid for interest. For the six months ended June 30, 2025, net cash provided by operating activities was $13,970, consisting primarily of $21,501 of cash received from customers, offset by $1,645 of cash paid to employees, Publisher Partners, expert contributors, suppliers, and vendors, and for revenue share arrangements and professional services and $5,886 of cash paid for interest. Prior period amounts are impacted by the settlement of discontinued operations liabilities.
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For the six months ended June 30, 2026, net cash used in investing activities was $1,219, consisting of $769 related to capitalized costs for our Platform and $450 related to purchases of intangible assets. For the six months ended June 30, 2025, net cash used in investing activities consisted of $3,545 for capitalized costs for our Platform.
For the six months ended June 30, 2026, there was no net cash used in financing activities. For the six months ended June 30, 2025, net cash used in financing activities was $8,016, consisting of (i) $16 for tax payments relating to the withholding of shares of common stock for certain employees, and (ii) $8,000 for repayments of the Simplify Loan.
Share Repurchase Program
On July 31, 2025, we announced a share repurchase program under which we may have repurchased up to 3 million shares of our common stock through July 31, 2026, from time to time through open-market transactions, privately negotiated transactions, or otherwise, including under Rule 10b5-1 trading plans, subject to market conditions, share price, and other factors. No shares were repurchased under this program prior to its expiration on July 31, 2026.
Results of Operations
Three Months Ended June 30, 2026 and 2025
The following table sets forth revenue, cost of revenue, gross profit, income from operations, income (loss) from continuing operations and net income (loss):
| Three Months Ended June 30, | 2026 versus 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||
| Revenue | $ | 22,183 | $ | 45,012 | $ | (22,829) | -50.7 | % | |||||||||||||||
| Cost of revenue | 13,515 | 19,577 | (6,062) | -31.0 | % | ||||||||||||||||||
| Gross profit | 8,668 | 25,435 | (16,767) | -65.9 | % | ||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Selling and marketing | 1,825 | 1,942 | (117) | -6.0 | % | ||||||||||||||||||
| General and administrative | 3,655 | 6,200 | (2,545) | -41.0 | % | ||||||||||||||||||
| Depreciation and amortization | 908 | 881 | 27 | 3.1 | % | ||||||||||||||||||
| Total operating expenses | 6,388 | 9,023 | (2,635) | -29.2 | % | ||||||||||||||||||
| Income from operations | 2,280 | 16,412 | (14,132) | -86.1 | % | ||||||||||||||||||
| Total other expense | (2,526) | (3,021) | 495 | -16.4 | % | ||||||||||||||||||
| (Loss) income before income taxes | (246) | 13,391 | (13,637) | -101.8 | % | ||||||||||||||||||
| Income tax benefit (provision) | 70 | (979) | 1,049 | 107.2 | % | ||||||||||||||||||
| (Loss) income from continuing operations | (176) | 12,412 | (12,588) | -101.4 | % | ||||||||||||||||||
| Income from discontinued operations, net of tax | — | 96,227 | (96,227) | -100.0 | % | ||||||||||||||||||
| Net (loss) income | $ | (176) | $ | 108,639 | $ | (108,815) | -100.2 | % | |||||||||||||||
For the three months ended June 30, 2026, loss from continuing operations was $176, as compared to income from continuing operations of $12,412 in the prior period. The decline in profitability was primarily attributable to a $22,829 decrease in revenue, largely attributable to lower digital advertising revenue driven by reduction in traffic volumes between periods. This decline was partially offset by decreases of $6,062 in cost of revenues, $2,635 in operating expenses, and $1,049 benefit from income tax and $495 from interest expense.
Revenue
The following table sets forth revenue, cost of revenue, and gross profit:
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| Three Months Ended June 30, | 2026 versus 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||
| Revenue | $ | 22,183 | $ | 45,012 | $ | (22,829) | -50.7 | % | |||||||||||||||
| Cost of revenue | 13,515 | 19,577 | (6,062) | -31.0 | % | ||||||||||||||||||
| Gross profit | $ | 8,668 | $ | 25,435 | $ | (16,767) | -65.9 | % | |||||||||||||||
For the three months ended June 30, 2026, we generated gross profit of $8,668, as compared to $25,435 for the three months ended June 30, 2025, a decrease of $16,767. Gross margin for the three months ended June 30, 2026 was 39.1%, compared to 56.5% for the three months ended June 30, 2025.
Total revenue decreased by 50.7% during the period, primarily due to lower digital advertising revenue. The decline was driven by changes in referral traffic patterns compared to the prior-year period. In addition, broader market dynamics in the digital advertising industry, exacerbated by aforementioned traffic volatility and unfavorable traffic mix shift away from higher yielding properties, negatively impacted advertising demand and monetization during the period.
Cost of revenue decreased by 31.0%, primarily driven by lower external cost of content enabled by our variable cost structure under the entrepreneurial publishing model. Cost of revenue reductions were partially offset by an increase in cost of goods sold related to our ShopHQ e-commerce business which increased as revenues associated with ShopHQ increased.
The following table sets forth revenue by category:
| Three Months Ended June 30, | 2026 versus 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||
| Digital revenue: | |||||||||||||||||||||||
| Digital advertising | $ | 13,337 | $ | 31,693 | $ | (18,356) | -57.9 | % | |||||||||||||||
| Digital subscriptions | 805 | 1,479 | (674) | -45.6 | % | ||||||||||||||||||
| Publisher Revenue | 3,504 | 5,621 | (2,117) | -37.7 | % | ||||||||||||||||||
| Performance Marketing | 2,888 | 5,730 | (2,842) | -49.6 | % | ||||||||||||||||||
| Other digital revenue | 1,438 | 244 | 1,194 | 489.3 | % | ||||||||||||||||||
| Total digital revenue | 21,972 | 44,767 | (22,795) | -50.9 | % | ||||||||||||||||||
| Print revenue | 211 | 245 | (34) | -13.9 | % | ||||||||||||||||||
| Total revenue | $ | 22,183 | $ | 45,012 | $ | (22,829) | -50.7 | % | |||||||||||||||
For the three months ended June 30, 2026, total revenue decreased by $22,829, or a 50.7% decrease, to $22,183 from $45,012 for the three months ended June 30, 2025. There was a 50.9% decrease in total digital revenue from $44,767 for the three months ended June 30, 2025 to $21,972 for the three months ended June 30, 2026.
The $18,356 decrease in digital advertising revenue was primarily attributable to lower audience traffic, including the impact of search algorithm changes that reduced referral traffic, together with a modest decline in monetization yield between periods. Performance marketing revenue decreased by $2,842 primarily due to lower traffic and changes in affiliate rates. Publisher revenue declined by $2,117 as traffic levels across certain distribution partners decreased. These decreases were partially offset by a $1,194 increase in other digital revenue, primarily attributable to an increase in revenue from the ShopHQ e-commerce platform. ShopHQ broadened our e-commerce reach by adding drop-ship e-commerce operations, and interactive social selling capabilities, while accelerating first-party data collection efforts that are expected to yield audience and customer insights and improve engagements throughout our business. To mitigate the impact of search and traffic related volatility, we continue to refine our content, yield and distribution strategies.
Cost of Revenue
The following table sets forth cost of revenue by category:
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| Three Months Ended June 30, | 2026 versus 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||
| External cost of content | $ | 3,802 | $ | 8,627 | $ | (4,825) | -55.9 | % | |||||||||||||||
| Internal cost of content | 4,488 | 6,275 | (1,787) | -28.5 | % | ||||||||||||||||||
| Technology costs | 3,237 | 3,776 | (539) | -14.3 | % | ||||||||||||||||||
| Printing, distribution and fulfillment costs | 81 | (213) | 294 | 138.0 | % | ||||||||||||||||||
| Amortization of developed technology and platform development | 1,078 | 1,108 | (30) | -2.7 | % | ||||||||||||||||||
| Other | 829 | 4 | 825 | 20,625.0 | % | ||||||||||||||||||
| Total cost of revenue | $ | 13,515 | $ | 19,577 | $ | (6,062) | -31.0 | % | |||||||||||||||
For the three months ended June 30, 2026, we recognized cost of revenue of $13,515 as compared to $19,577 for the three months ended June 30, 2025, a decrease of $6,062. The decrease reflected the variable nature of the Company’s content cost structure, as lower traffic volumes drove reductions in external cost of content and third-party content costs. Internal costs of content was lower due to continued cost discipline. The Company also realized lower technology costs during the period as reduced traffic and ad-serving activity lowered related variable platform costs. These savings were partially offset by higher costs of products sold associated with the ShopHQ e-commerce business, which increased as revenues associated with ShopHQ increased.
Operating Expenses
Selling and Marketing
The following table sets forth selling and marketing expenses from continuing operations by category:
| Three Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Selling and marketing | $ | 1,825 | $ | 1,942 | |||||||
| Selling and marketing as a percentage of revenues | 8 | % | 4 | % | |||||||
For the three months ended June 30, 2026, we incurred selling and marketing expenses of $1,825 as compared to $1,942 for the three months ended June 30, 2025. The decrease of $117 reflects savings achieved through ongoing cost-optimization initiatives across advertising, marketing and advertising operations tools, partially offset by incremental marketing spend supporting the expansion of our ShopHQ e-commerce business launched in late 2025.
General and Administrative
The following table sets forth general and administrative expenses by category:
| Three Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| General and administrative | $ | 3,655 | $ | 6,200 | |||||||
| General and administrative as a percentage of revenues | 16 | % | 14 | % | |||||||
General and administrative expenses totaled $3,655 for the three months ended June 30, 2026 compared to $6,200 for the three months ended June 30, 2025, a decrease of $2,545. The decrease was primarily driven by lower legal and other professional fees following the successful resolution of legacy corporate matters, complemented by ongoing overhead cost discipline and better receivable collections resulting in lower bad debt expense.
Segment Revenue
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We report our segment results as Sports & Leisure, Finance, Lifestyle, and Platform & Other. Additionally, certain expenses are not allocated to our segments because they represent centralized activities which cannot be accurately allocated.
The following table sets forth revenue by segment:
| Three Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Segment revenue: | |||||||||||
| Sports & Leisure | $ | 6,087 | $ | 16,723 | |||||||
| Finance | 5,910 | 13,097 | |||||||||
| Lifestyle | 8,123 | 12,275 | |||||||||
| Platform & Other | 2,063 | 2,917 | |||||||||
| Total Revenue | $ | 22,183 | $ | 45,012 | |||||||
Sports & Leisure – the decrease of $10,636 was primarily driven by lower digital advertising and publisher revenue, reflecting industry-wide declines in organic traffic volume and monetization.
Finance – the decrease of $7,187 was attributable to a reduction in digital advertising revenue and in performance marketing revenue, reflecting industry-wide declines in referral traffic volume and changes to commission structures at affiliate partners and a reduction in digital subscription revenue as we transition our portfolio toward more efficient, ad-supported monetization channels.
Lifestyle – the decrease of $4,152 was primarily driven by lower digital advertising revenue, reflecting industry-wide declines in organic traffic volume.
Platform & Other – the decrease of $854 was primarily driven by a reduction in underperforming partner sites, partially offset by an increase in other digital revenue attributable to the ShopHQ e-commerce business.
Segment Gross Profit
The following table sets forth segment gross profit:
| Three Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Segment gross profit: | |||||||||||
| Sports & Leisure | $ | 2,957 | $ | 10,890 | |||||||
| Finance | 3,823 | 9,068 | |||||||||
| Lifestyle | 4,894 | 7,518 | |||||||||
| Platform & Other | 195 | 1,290 | |||||||||
| Segment gross profit | $ | 11,869 | $ | 28,766 | |||||||
The $16,897 decrease in total segment gross profit across all categories was primarily driven by the aforementioned reductions in digital advertising revenue resulting from compounded traffic volume headwinds and lower monetization rates, which collectively outpaced the variable cost savings realized from our strategic transition to an entrepreneurial publishing model, lower internal cost of content and lower technology costs.
The following table reconciles segment gross profit to gross profit:
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| Three Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Segment gross profit: | $ | 11,869 | $ | 28,766 | |||||||
| Arena level activities | |||||||||||
| Internal cost of content | (513) | (825) | |||||||||
| Technology costs | (1,610) | (1,398) | |||||||||
| Amortization of developed technology and platform development | (1,078) | (1,108) | |||||||||
| Gross profit | $ | 8,668 | $ | 25,435 | |||||||
Other Expenses
The following table sets forth other expenses:
| Three Months Ended June 30, | 2026 versus 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||
| Interest expense, net | $ | (2,450) | $ | (2,945) | $ | 495 | -16.8 | % | |||||||||||||||
| Liquidated damages | (76) | (76) | — | — | % | ||||||||||||||||||
| Total other expense | (2,526) | (3,021) | 495 | -16.4 | % | ||||||||||||||||||
Interest Expense – We incurred interest expense of $2,450 for the three months ended June 30, 2026 compared to $2,945 for three months ended June 30, 2025. The $495 decrease in interest expense reflects lower interest charges following repayment of the Simplify Loan throughout 2025 and the $13,000 curtailment payment applied to the Company’s term debt in December 2025 pursuant to Amendment No. 4 to the Third Amended and Restated Note Purchase Agreement.
Liquidated Damages – We recorded liquidated damages of $76 for the three months ended June 30, 2026, as compared to $76 for the three months ended June 30, 2025. The liquidated damages related to (i) certain registration rights agreements that provide for damages if we do not register certain shares of the Company’s common stock within the requisite time frame; and (ii) certain securities purchase agreements that provide for damages if the we do not maintain our periodic filings with the SEC within the requisite time frame.
Six Months Ended June 30, 2026 and 2025
The following table sets forth revenue, cost of revenue, gross profit, income from operations, income (loss) from continuing operations and net income (loss):
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| Six Months Ended June 30, | 2026 versus 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||
| Revenue | $ | 42,589 | $ | 76,827 | $ | (34,238) | -44.6 | % | |||||||||||||||
| Cost of revenue | 26,840 | 35,723 | (8,883) | -24.9 | % | ||||||||||||||||||
| Gross profit | 15,749 | 41,104 | (25,355) | -61.7 | % | ||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Selling and marketing | 3,676 | 4,076 | (400) | -9.8 | % | ||||||||||||||||||
| General and administrative | 8,296 | 11,483 | (3,187) | -27.8 | % | ||||||||||||||||||
| Depreciation and amortization | 1,801 | 1,771 | 30 | 1.7 | % | ||||||||||||||||||
| Total operating expenses | 13,773 | 17,330 | (3,557) | -20.5 | % | ||||||||||||||||||
| Income from operations | 1,976 | 23,774 | (21,798) | -91.7 | % | ||||||||||||||||||
| Total other expense | (5,022) | (6,100) | 1,078 | -17.7 | % | ||||||||||||||||||
| (Loss) income before income taxes | (3,046) | 17,674 | (20,720) | -117.2 | % | ||||||||||||||||||
| Income tax benefit (provision) | 212 | (1,265) | 1,477 | 116.8 | % | ||||||||||||||||||
| (Loss) income from continuing operations | (2,834) | 16,409 | (19,243) | -117.3 | % | ||||||||||||||||||
| Income from discontinued operations, net of tax | — | 96,250 | (96,250) | -100.0 | % | ||||||||||||||||||
| Net (loss) income | $ | (2,834) | $ | 112,659 | $ | (115,493) | -102.5 | % | |||||||||||||||
For the six months ended June 30, 2026, loss from continuing operations was $2,834, as compared to income from continuing operations of $16,409 in the prior period. The decline in profitability was primarily attributable to a $34,238 decrease in revenue, largely attributable to lower digital advertising and performance marketing resulting from lower traffic volumes, changes in referral traffic patterns and reduced monetization between periods. This revenue decline was partially offset by the Company’s flexible cost structure and expense discipline, including decreases of $8,883 in cost of revenues, $3,557 in operating expenses, $1,477 benefit from income tax and $1,078 from interest expense.
Revenue
| Six Months Ended June 30, | 2026 versus 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||
| Revenue | $ | 42,589 | $ | 76,827 | $ | (34,238) | -44.6 | % | |||||||||||||||
| Cost of revenue | 26,840 | 35,723 | (8,883) | -24.9 | % | ||||||||||||||||||
| Gross profit | $ | 15,749 | $ | 41,104 | $ | (25,355) | -61.7 | % | |||||||||||||||
For the six months ended June 30, 2026, we generated gross profit of $15,749, as compared to $41,104 for the six months ended June 30, 2025, a decrease of $25,355. Gross margin for the six months ended June 30, 2026 was 37.0%, compared to 53.5% for the six months ended June 30, 2025.
Total revenue for the period decreased by 44.6%, principally reflecting decreased digital advertising revenue resulting from lower traffic volumes, altered referral trends and softer ad pricing compared to the prior-year period. Revenue in the first quarter of 2026 was also impacted by ongoing digital platform enhancements, which prioritize long-term audience expansion but created short-term revenue headwinds in select areas during the period. Though revenue increased in the second quarter of 2026, it lagged prior year performance due to the aforementioned lower traffic volumes and an unfavorable traffic mix shift away from higher yielding properties which reduced monetization in comparison to 2025.
Cost of revenue decreased by 24.9% partially offsetting lower revenues, primarily driven by lower external cost of content enabled by our variable cost structure under the entrepreneurial publishing model and as traffic volumes declined. Gross margin contracted year over year as the decline in higher-margin digital advertising revenue more than offset cost reductions and was further impacted by added cost of products sold from the ShopHQ e-commerce business.
The following table sets forth revenue from continuing operations by category:
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| Six Months Ended June 30, | 2026 versus 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||
| Digital revenue: | |||||||||||||||||||||||
| Digital advertising | $ | 24,698 | $ | 53,510 | $ | (28,812) | -53.8 | % | |||||||||||||||
| Digital subscriptions | 1,621 | 3,150 | (1,529) | -48.5 | % | ||||||||||||||||||
| Publisher Revenue | 7,755 | 8,725 | (970) | -11.1 | % | ||||||||||||||||||
| Performance Marketing | 5,398 | 10,520 | (5,122) | -48.7 | % | ||||||||||||||||||
| Other digital revenue | 2,645 | 470 | 2,175 | 462.8 | % | ||||||||||||||||||
| Total digital revenue | 42,117 | 76,375 | (34,258) | -44.9 | % | ||||||||||||||||||
| Print revenue | 472 | 452 | 20 | 4.4 | % | ||||||||||||||||||
| Total revenue | $ | 42,589 | $ | 76,827 | $ | (34,238) | -44.6 | % | |||||||||||||||
For the six months ended June 30, 2026, total revenue decreased by $34,238, or a 44.6% decrease, to $42,589 from $76,827 for the six months ended June 30, 2025. There was a 44.9% decrease in total digital revenue from $76,375 for the six months ended June 30, 2025 to $42,117 for the six months ended June 30, 2026.
Digital revenue declined year over year primarily as search and referral traffic pressures reduced advertising impressions and high-intent commerce activity. Digital advertising revenue decreased $28,812 due to lower audience traffic and traffic referral patterns, while performance marketing revenue decreased $5,122 due to lower commerce-oriented traffic and changes in affiliate rates. Digital subscription revenue decreased $1,529 as the Company continued to reposition portions of its portfolio toward ad-supported monetization models. These declines were partially offset by a $2,175 increase in Other digital revenue, primarily from the ShopHQ e-commerce business, which broadened the Company’s revenue base by adding transaction-based e-commerce capabilities and incremental first-party customer engagement opportunities. Management continues to address traffic volatility through ongoing refinement of content, distribution and yield strategies, while also pursuing revenue diversification initiatives intended to reduce reliance on search-driven advertising revenue over time.
The following table sets forth cost of revenue by category:
| Six Months Ended June 30, | 2026 versus 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||
| External cost of content | $ | 7,494 | $ | 12,722 | $ | (5,228) | -41.1 | % | |||||||||||||||
| Internal cost of content | 9,210 | 13,270 | (4,060) | -30.6 | % | ||||||||||||||||||
| Technology costs | 6,309 | 7,377 | (1,068) | -14.5 | % | ||||||||||||||||||
| Printing, distribution and fulfillment costs | 233 | (36) | 269 | 747.2 | % | ||||||||||||||||||
| Amortization of developed technology and platform development | 2,128 | 2,384 | (256) | -10.7 | % | ||||||||||||||||||
| Other | 1,466 | 6 | 1,460 | 24333.3 | % | ||||||||||||||||||
| Total cost of revenue | $ | 26,840 | $ | 35,723 | $ | (8,883) | -24.9 | % | |||||||||||||||
For the six months ended June 30, 2026, we recognized cost of revenue of $26,840 as compared to $35,723 for the six months ended June 30, 2025, a decrease of $8,883. The decrease reflected the Company’s ability to flex portions of its cost structure in response to lower traffic and revenue levels, including reduced external cost of content and active reductions of internal cost of content. The Company also benefited from lower technology costs as reduced traffic and ad-serving volumes lowered variable platform costs. These savings were partially offset by higher cost of products sold from the ShopHQ e-commerce operations as a result of increased ShopHQ revenue.
Operating Expenses
Selling and Marketing
The following table sets forth selling and marketing expenses from continuing operations by category:
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| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Selling and marketing | $ | 3,676 | $ | 4,076 | |||||||
| Selling and marketing as a percentage of revenues | 9 | % | 5 | % | |||||||
For the six months ended June 30, 2026, we incurred selling and marketing expenses of $3,676 as compared to $4,076 for the six months ended June 30, 2025. The $400 decrease was primarily attributable to continued cost discipline and optimization across advertising, marketing and advertising operations tools, partially offset by incremental marketing investments supporting the growth of the Company’s ShopHQ e-commerce business, which was launched in late 2025. Although selling and marketing costs decreased period over period, they still represent a higher percentage of revenues in the current period due to the decline in revenue levels between periods.
General and Administrative
The following table sets forth general and administrative expenses by category:
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| General and administrative | $ | 8,296 | $ | 11,483 | |||||||
| General and administrative as a percentage of revenues | 19 | % | 15 | % | |||||||
For the six months ended June 30, 2026, we incurred general and administrative expenses of $8,296 as compared to $11,483 for the six months ended June 30, 2025. The $3,187 decrease primarily reflected lower legal and other professional fees following the successful resolution of certain legacy corporate matters, as well as continued overhead spending discipline, lower bad debt expense from improved accounts receivable collections processes, and reduced corporate and state sales and use tax-related costs associated with lower revenue levels.
Segment Revenue
We report our segment results as Sports & Leisure, Finance, Lifestyle, and Platform & Other. Additionally, certain expenses are not allocated to our segments because they represent centralized activities which cannot be accurately allocated.
The following table sets forth revenue by segment:
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Segment revenue: | |||||||||||
| Sports & Leisure | $ | 12,313 | $ | 29,186 | |||||||
| Finance | 11,125 | 21,195 | |||||||||
| Lifestyle | 14,632 | 20,154 | |||||||||
| Platform & Other | 4,519 | 6,292 | |||||||||
| Total Revenue | $ | 42,589 | $ | 76,827 | |||||||
Sports & Leisure – the decrease of $16,873 was primarily driven by lower digital advertising revenue, reflecting industry-wide declines in organic traffic volume and monetization rates. In addition, performance marketing revenue declined due to reduced traffic and changes in affiliate partner commission structures.
Finance – the decrease of $10,070 primarily reflected lower digital advertising revenue from industry-wide declines in organic traffic and monetization, lower performance marketing revenue due to changes in referral traffic patterns and affiliate partner commission structures, and reduced digital subscription revenue as the Company continued transitioning portions of its portfolio toward ad-supported monetization channels.
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Lifestyle – the decrease of $5,522 was primarily driven by lower digital advertising revenue, reflecting industry-wide declines in organic traffic volume.
Platform & Other – the decrease of $1,773 was primarily driven by a reduction in underperforming partner sites, partially offset by an increase in other digital revenue attributable to ShopHQ e-commerce business.
Segment Gross Profit
The following table sets forth segment gross profit:
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Segment gross profit: | |||||||||||
| Sports & Leisure | $ | 5,969 | $ | 18,426 | |||||||
| Finance | 7,123 | 14,292 | |||||||||
| Lifestyle | 8,526 | 12,205 | |||||||||
| Platform & Other | 653 | 2,395 | |||||||||
| Segment gross profit | $ | 22,271 | $ | 47,318 | |||||||
The $25,047 decrease was primarily attributable to lower digital advertising revenue as a result of traffic-volume headwinds and lower monetization rates, which reduced digital advertising revenue across the portfolio. Revenue declines were partially offset by reductions in external cost of content under the entrepreneurial publishing model. Internal content costs and technology-related expenses were also reduced due to disciplined spending.
The following table reconciles segment gross profit to gross profit:
| Six Months Ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Segment gross profit: | $ | 22,271 | $ | 47,318 | |||||||
| Arena level activities | |||||||||||
| Internal cost of content | (992) | (1,185) | |||||||||
| Technology costs | (3,402) | (2,645) | |||||||||
| Amortization of developed technology and platform development | (2,128) | (2,384) | |||||||||
| Gross profit | $ | 15,749 | $ | 41,104 | |||||||
Other Expenses
The following table sets forth other expenses:
| Six Months Ended June 30, | 2026 versus 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||
| Interest expense | (4,871) | (5,949) | $ | 1,078 | -18.1 | % | |||||||||||||||||
| Liquidated damages | (151) | (151) | $ | — | — | % | |||||||||||||||||
| Total other expense | $ | (5,022) | $ | (6,100) | $ | 1,078 | -17.7 | % | |||||||||||||||
Interest Expense – We incurred interest expense of $4,871 for the six months ended June 30, 2026 compared to $5,949 for six months ended June 30, 2025. The $1,078 decrease in interest expense reflects lower interest charges following repayment of the Simplify Loan throughout 2025 and the $13,000 curtailment payment applied to the Company’s term debt in December 2025 pursuant to Amendment No. 4 to the Third Amended and Restated Note Purchase Agreement.
Liquidated Damages – We recorded liquidated damages (as described above) of $151 for the six months ended June 30, 2026, as compared to $151 for the six months ended June 30, 2025.
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Use of Non-GAAP Financial Measures
We report our financial results in accordance with generally accepted accounting principles in the United States of America (“GAAP”); however, management believes that certain non-GAAP financial measures provide users of our financial information with useful supplemental information that enables a better comparison of our performance across periods. We believe Adjusted EBITDA provides visibility to the underlying continuing operating performance by excluding the impact of certain items that are noncash in nature or not related to our core business operations. We calculate Adjusted EBITDA as net income (loss) as adjusted for income from discontinued operations, interest expense (net), income taxes, and depreciation and amortization. We further adjust for stock-based compensation and other special items that do not reflect our ongoing core operational performance, including impairment costs, third-party vendor or professional settlement fees, liquidated damages, and government tax incentive credits. Our non-GAAP measure may not be comparable to similarly titled measures used by other companies, have limitations as an analytical tool, and should not be considered in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Additionally, we do not consider our non-GAAP measure as superior to, or a substitute for, the equivalent measure calculated and presented in accordance with GAAP. Some of the limitations are that our non-GAAP measure:
● | does not reflect interest expense and financing fees, or the cash required to service our debt, which reduces cash available to us; | |||||||
● | does not reflect income tax provision or benefit, which is a noncash income or expense; | |||||||
● | does not reflect depreciation and amortization expense and, although this is a noncash expense, the assets being depreciated may have to be replaced in the future, increasing our cash requirements; | |||||||
● | does not reflect stock-based compensation and, therefore, does not include all of our compensation costs; | |||||||
● | does not reflect the change in valuation of contingent consideration, and, although this is a noncash income or expense, the change in the valuations each reporting period are not impacted by our actual business operations but is instead strongly tied to the change in the market value of our common stock; | |||||||
● | does not reflect liquidated damages and, therefore, does not include future cash requirements if we repay the liquidated damages in cash instead of shares of our common stock (which the investor would need to agree to); | |||||||
● | does not reflect any losses from the impairment of assets, which is a noncash operating expense; | |||||||
● | does not reflect any losses from the sale of assets, which is a noncash operating expense; | |||||||
● | does not reflect the employee retention credits recorded by us for payroll related tax credits under the CARES Act; | |||||||
● | does not reflect payments related to employee severance and employee restructuring charges for our former executives; | |||||||
● | does not reflect the professional and vendor fees incurred by us for services provided by consultants, accountants, lawyers, and other vendors, which services were related to certain types of events that are not reflective of our business operations; and | |||||||
● | may not reflect proper non-direct cost allocations. | |||||||
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The following table presents a reconciliation of Adjusted EBITDA to net (loss) income, which is the most directly comparable GAAP measure, for the periods indicated:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net (loss) income | $ | (176) | $ | 108,639 | $ | (2,834) | $ | 112,659 | |||||||||||||||
| Less: (Income) from discontinued operations | — | (96,227) | — | (96,250) | |||||||||||||||||||
| (Loss) income from continuing operations | (176) | 12,412 | (2,834) | 16,409 | |||||||||||||||||||
| Add: | |||||||||||||||||||||||
| Interest expense, net (1) | 2,450 | 2,945 | 4,871 | 5,949 | |||||||||||||||||||
| Income taxes | (70) | 979 | (212) | 1,265 | |||||||||||||||||||
| Depreciation and amortization (2) | 1,986 | 1,989 | 3,929 | 4,155 | |||||||||||||||||||
| Stock-based compensation (3) | 45 | 151 | 109 | 333 | |||||||||||||||||||
| Liquidated damages (4) | 76 | 76 | 151 | 151 | |||||||||||||||||||
| Other (5) | 97 | — | 97 | — | |||||||||||||||||||
| Adjusted EBITDA | $ | 4,408 | $ | 18,552 | $ | 6,111 | $ | 28,262 | |||||||||||||||
(1) | Interest expense is related to our capital structure and varies over time due to a variety of financing transactions. Interest expense includes $14 and $31 for amortization of debt costs for the three months ended June 30, 2026 and 2025, respectively. Interest expense includes $28 and $63 for amortization of debt discounts for the six months ended June 30, 2026 and 2025, respectively. These amounts are noncash items. Investors should note that cash interest payments will recur in future periods. | |||||||
(2) | Depreciation and amortization related to our developed technology and our Platform is included within cost of revenues of $1,078 and $1,108 for the three months ended June 30, 2026 and 2025, respectively, and depreciation and amortization is included within operating expenses of $908 and $881 for the three months ended June 30, 2026 and 2025, respectively. Depreciation and amortization related to our developed technology and our Platform is included within cost of revenues of $2,128 and $2,384 for the six months ended June 30, 2026 and 2025, respectively, and depreciation and amortization is included within operating expenses of $1,801 and $1,771 for the six months ended June 30, 2026 and 2025, respectively. We believe (i) the amount of depreciation and amortization expense in any specific period may not directly correlate to the underlying performance of our business operations and (ii) such expenses can vary significantly between periods as a result of new acquisitions and full amortization of previously acquired tangible and intangible assets. Investors should note that the use of tangible and intangible assets contributed to revenue in the periods presented and will contribute to future revenue generation and should also note that such expense will recur in future periods. | |||||||
(3) | Stock-based compensation represents noncash costs arising from the grant of stock-based awards to employees, consultants and directors. We believe that excluding the effect of stock-based compensation from Adjusted EBITDA assists management and investors in making period-to-period comparisons in our operating performance because (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations, and (ii) such expenses can vary significantly between periods as a result of the timing of grants of new stock-based awards, including grants in connection with acquisitions. Additionally, we believe that excluding stock-based compensation from Adjusted EBITDA assists management and investors in making meaningful comparisons between our operating performance and the operating performance of other companies that may use different forms of employee compensation or different valuation methodologies for their stock-based compensation. Investors should note that stock-based compensation is a key incentive offered to employees whose efforts contributed to the operating results in the periods presented and are expected to contribute to operating results in future periods. Investors should also note that such expenses will recur in the future. | |||||||
| (4) | Liquidated damages (or interest expense related to accrued liquidated damages) represents amounts we owe to certain of our investors in private placements offerings conducted in fiscal years 2018 through 2020, pursuant to which we agreed to certain covenants in the respective securities purchase agreements and registration rights agreements, including the filing of resale registration statements and becoming current in our reporting obligations, which we were not able to timely meet. | |||||||
| (5) | Represents acquisition-related fair value adjustments associated with contract assets acquired in the Parade acquisition. Management excludes these transaction-related adjustments as they are not reflective of our ongoing operational performance. | |||||||
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Critical Accounting Estimates
Our management’s discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with GAAP. In preparing the condensed consolidated financial statements, we make estimates and judgments that affect the reported amounts of assets, liabilities, stockholders’ equity, revenue, expenses, and related disclosures. We re-evaluate our estimates on an on-going basis. Our estimates are based on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Because of the uncertainty inherent in these matters, actual results may differ from these estimates and could differ based upon other assumptions or conditions.
Except as described in Note 1, Summary of Significant Accounting Policies, of the notes to our condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q, there have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025 that was filed with the SEC on March 16, 2026.
Recently Issued Accounting Standards Updates
Note 1, Summary of Significant Accounting Policies, in our accompanying condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q includes Recently Issued Accounting Standards updates.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Not applicable to a “smaller reporting company” as defined in Item 10(f)(1) of SEC Regulation S-K.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer(s) and principal financial officer(s), or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
In accordance with Exchange Act Rules 13a-15 and 15d-15, an evaluation was completed under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Based on that evaluation, our management, including our Chief Executive Officer and Principal Financial Officer, concluded that our disclosure controls and procedures were not effective as of June 30, 2026 in providing reasonable assurance that the information required to be disclosed in our reports filed or submitted under the Exchange Act was recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms due to the material weakness described below.
Material Weakness in Internal Control over Financial Reporting and Remediation Plan
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Internal control over financial reporting is a process, including policies and procedures, designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
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In connection with the preparation of our Annual Report on Form 10-K for the year ended December 31, 2025 that was filed with the SEC on March 16, 2026, our management concluded that our internal control over financial reporting was not effective as of December 31, 2025 due to the following material weakness which we previously reported and continues to exist: we did not design and maintain effective controls over the completeness and accuracy of information received from a third-party programmatic advertising services provider used in recording certain advertising revenues.
This material weakness has not been remediated as of the date of filing of this Quarterly Report. We intend to expand and formalize documentation around the review and oversight procedures performed to validate data provided by the third party providing ad serving services, provide training to relevant personnel on the enhanced documentation requirements, and, as necessary, implement additional controls to independently verify completeness and accuracy of third party data used in financial reporting to address this material weakness. We will continue to evaluate and adjust remediation actions as needed to ensure the remedial measures remain appropriate and sustainable.
We believe that the actions listed above will provide appropriate remediation of the material weakness. Due to the nature of the remediation process and the need for sufficient time after implementation to evaluate and test the design and effectiveness of the controls, no assurance can be given as to the timing for completion of remediation. The material weakness will be fully remediated when we conclude that the controls have been operating for sufficient time and independently validated by management.
We believe that, notwithstanding the material weakness mentioned above, the unaudited condensed consolidated financial statements contained in this Quarterly Report present fairly, in all material respects, the condensed consolidated balance sheets, statements of operations, stockholders’ deficiency, and cash flows of the Company and its subsidiaries in conformity with U.S. generally accepted accounting principles as of the dates and for the periods stated therein.
Changes in Internal Control over Financial Reporting
Except as described above under “Material Weakness in Internal Control over Financial Reporting and Remediation Plan”, there have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three months ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on the Effectiveness of Controls
The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, in designing and evaluating the disclosure controls and procedures, management recognizes that any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are subject to claims and litigation arising in the ordinary course of business. Except as described in Note 18, Commitments and Contingencies of the notes to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, we are not currently subject to any pending or threatened legal proceedings that we believe would reasonably be expected to have a material adverse effect on our business, financial condition, results of operations or cash flows.
ITEM 1A. RISK FACTORS
There are numerous factors that affect our business and operating results, many of which are beyond our control. The following risk factors supplement and, to the extent inconsistent, supersede, the risk factors described in Part I, “Item IA. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 16, 2026 (the “2025 Form 10-K”). The risk factors included herein as well as the risk factors described in the 2025 Form 10-K should be carefully considered, together with the other information contained or incorporated by reference in this Quarterly Report on Form 10-Q and in our other filings with the SEC in connection with evaluating us, our business and the forward-looking statements contained in this Quarterly Report on Form 10-Q. Additional risks and uncertainties not known to us at present, or that we currently deem immaterial, may affect us. The occurrence of any of these known or unknown risks could have a material adverse impact on our business, financial condition and results of operations.
Our use and incorporation of a broad range of artificial intelligence technologies in our services and operations present risks, uncertainties, and challenges that could adversely affect our business, financial condition, and results of operations.
Our ability to attract and retain publisher partners, expert contributors, audience, and customers depends on our capacity to develop and support innovative products and services, including through developing or deploying emerging technologies such as artificial intelligence. Some of our products, services, publishing tools and processes leverage AI, including both machine learning and Generative and Agentic AI, and we continue to make investments in initiatives focused on the further development and deployment of these technologies. However, there is no assurance that our use or development of AI will enhance our offerings or services or their marketability, improve operating results, or deliver anticipated benefits, and our initiatives involving AI may be unsuccessful. While implementation of these technologies offers the potential for innovation and competitive differentiation, it also poses significant risks and uncertainties, especially given its early stage of commercial adoption. The use of AI in our initiatives and offerings or services, or in our internal business operations, may give rise to risks related to accuracy, bias, discrimination, intellectual property infringement, misappropriation or leakage of proprietary, confidential and personal information, defamation, data privacy, and cybersecurity. Furthermore, the use of AI in the creation of content could have an adverse impact on both traffic and revenue. Any error, defect, or vulnerability in our AI-powered business processes could undermine the quality of our offerings and services, adversely impact our partners’ businesses, subject us or our partners to regulatory scrutiny, fines or litigation and cause reputational harm.
These technologies are subject to an evolving and fragmented legal and regulatory landscape. The absence of a unified regulatory framework, and the risk of divergent or conflicting regulations across jurisdictions applicable to our business, could increase the complexity and costs of compliance for us and our partners. New or changing legal requirements may limit or restrict our use of AI, impose burdensome obligations, or require us to modify or discontinue certain offerings. Any of these factors, alone or in combination, could adversely affect our business, reputation, or results of operations.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Company Repurchases of Equity Securities
During the three months ended June 30, 2026, the Company did not repurchase any shares of its common stock under its previously announced share repurchase program. As of June 30, 2026, a total of 3,000,000 shares remained available for repurchase under the program. The following table sets forth certain information with respect to repurchases of our common shares during the three months ended June 30, 2026:
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Period | Total number of shares (or units) purchased | Average price paid per share (1) | Total number of shares purchased as part of publicly announced plans or programs (2) | Maximum number of shares that may yet be purchased under the plans or programs (2) | |||||||||||||
Apr 1- Apr 30, 2026 | 0 | $— | 0 | 3,000,000 | |||||||||||||
| May 1- May 31, 2026 | 0 | — | 0 | 3,000,000 | |||||||||||||
| Jun 1- Jun 30, 2026 | 0 | — | 0 | 3,000,000 | |||||||||||||
Total | 0 | $— | 0 | 3,000,000 | |||||||||||||
(1) Average price paid per share includes broker commissions, if any.
(2) On July 31, 2025, we announced a share repurchase program under which we may have repurchased up to 3 million shares of our common stock through July 31, 2026, from time to time through open-market transactions, privately negotiated transactions, or otherwise, including under Rule 10b5-1 trading plans, subject to market conditions, share price, and other factors. No shares were repurchased under this program prior to its expiration on July 31, 2026.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
ITEM 6. EXHIBITS
The following documents are filed as part of this Quarterly Report:
| Exhibit Number | Description of Document | |||||||
| 2.1 | Agreement and Plan of Merger, dated as of March 13, 2018, by and among the Company, HP Acquisition Co., Inc., HubPages, Inc., and Paul Edmondson as the securityholder representative, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on March 19, 2018. | |||||||
| 2.2 | Amendment to Agreement and Plan of Merger, dated as of April 25, 2018, by and among TheMaven, Inc., HP Acquisition Co., Inc., HubPages, Inc., and Paul Edmondson as the securityholder representative, which was filed as Exhibit 2.2 to our Annual Report on Form 10-K filed on January 8, 2021. | |||||||
| 2.3 | Second Amendment to Agreement and Plan of Merger, dated as of June 1, 2018, by and among TheMaven, Inc., HP Acquisition Co., Inc., HubPages, Inc., and Paul Edmondson as the securityholder representative, which was filed as Exhibit 10.1 to our Current Report on Form 8-K/A filed on June 4, 2018. | |||||||
| 2.4 | Third Amendment to Agreement and Plan of Merger, dated as of June 30, 2019, by and among TheMaven, Inc., HP Acquisition Co., Inc., HubPages, Inc., and Paul Edmondson as the securityholder representative, which was filed as Exhibit 2.4 to our Annual Report on Form 10-K filed on January 8, 2021. | |||||||
| 2.5 | Fourth Amendment to Agreement and Plan of Merger, dated as of December 15, 2020, by and among TheMaven, Inc., HP Acquisition Co., Inc., HubPages, Inc., and Paul Edmondson as the securityholder representative, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on December 21, 2020. | |||||||
| 2.6 | Amended and Restated Asset Purchase Agreement, dated as of August 4, 2018, by and among the Company, Maven Coalition, Inc., and Say Media, Inc., which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on August 9, 2018. | |||||||
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| 2.7 | Amendment to Amended and Restated Asset Purchase Agreement, dated as of August 24, 2018, by and among the Company, Maven Coalition, Inc., and Say Media, Inc., which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on August 29, 2018. | |||||||
| 2.8 | Agreement and Plan of Merger, dated as of October 12, 2018, by and among the Company, SM Acquisition Co., Inc., Say Media, Inc., and Matt Sanchez as the Securityholder Representative, which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on October 17, 2018. | |||||||
| 2.9 | Amendment to Agreement and Plan of Merger, dated as of October 17, 2018, by and among the Company, SM Acquisition Co., Inc., Say Media, Inc., and Matt Sanchez as the Securityholder Representative, which was filed as Exhibit 10.2 to our Current Report on Form 8-K filed on October 17, 2018. | |||||||
| 2.10 | Agreement and Plan of Merger, dated as of June 11, 2019, by and among the Company, TST Acquisition Co., Inc., and TheStreet, Inc., which was filed as Exhibit 10.1 to our Current Report on Form 8-K filed on June 12, 2019. | |||||||
| 2.11 | Asset Purchase Agreement, dated December 7, 2022, by and among The Arena Media Brands, LLC, Weider Publications, LLC and A360 Media, LLC, which was filed as Exhibit 2.1 to our Current Report on Form 8-K filed on December 20, 2022. | |||||||
| 2.12 | Business Combination Agreement, dated as of November 5, 2023, among The Arena Group Holdings, Inc., Simplify Inventions, LLC, Bridge Media Networks, LLC, New Arena Holdco, Inc., Energy Merger Sub I, LLC and Energy Merger Sub II, which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on November 7, 2023. | |||||||
| 2.13 | Amendment No. 1 to Business Combination Agreement, dated December 1, 2023, by and between the Company, Simplify Inventions, LLC, Bridge Media Networks, LLC, New Arena Holdco, Inc., Energy Merger Sub I, LLC and Energy Merger Sub II, which was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 5, 2023. | |||||||
| 2.14 | Second Amendment to the Business Combination Agreement dated November 5, 2023, among the Company, Simplify Inventions, LLC, a Delaware limited liability company, Bridge Media Networks, LLC, a Michigan limited liability company and a wholly owned subsidiary of Simplify, New Arena Holdco, Inc., a Delaware corporation and a wholly owned subsidiary of Arena, Energy Merger Sub I, LLC, a Delaware limited liability company and a wholly owned subsidiary of Newco, and Energy Merger Sub II, LLC, a Delaware limited liability company and a wholly owned subsidiary of Newco, dated July 12, 2024, which was filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on July 17, 2024. | |||||||
| 3.1 | Amended and Restated Certificate of Incorporation of the Registrant, which was filed as Exhibit 3.1 to our Current Report on Form 8-K filed on October 13, 2021. | |||||||
| 3.2 | Second Amended and Restated Bylaws, which was filed as Exhibit 3.2 to our Current Report on Form 8-K filed on October 13, 2021. | |||||||
| 3.3 | Certificate of Elimination of Series F Convertible Preferred Stock as filed with the Delaware Secretary of State on September 7, 2021, which was filed as Exhibit 3.1 to our Current Report on Form 8-K filed September 13, 2021. | |||||||
| 3.4 | Certificate of Elimination of Series I Convertible Preferred Stock as filed with the Delaware Secretary of State on September 7, 2021, which was filed as Exhibit 3.2 to our Current Report on Form 8-K filed September 13, 2021. | |||||||
| 3.5 | Certificate of Elimination of Series J Convertible Preferred Stock as filed with the Delaware Secretary of State on September 7, 2021, which was filed as Exhibit 3.3 to our Current Report on Form 8-K filed September 13, 2021. | |||||||
| 3.6 | Certificate of Elimination of Series K Convertible Preferred Stock as filed with the Delaware Secretary of State on September 7, 2021, which was filed as Exhibit 3.4 to our Current Report on Form 8-K filed September 13, 2021. | |||||||
| 3.7 | Certificate of Amendment as filed with the Delaware Secretary of State on January 20, 2022, which was filed Exhibit 3.1 to our Current Report on Form 8-K filed January 26, 2022. | |||||||
| 3.8 | Certificate of Correction of the Certificate of Amendment of the Amended and Restated Certificate of Incorporation, filed with the Secretary of State of the State of Delaware on January 26, 2022, which was filed as Exhibit 3.2 to our Current Report on Form 8-K filed January 26, 2022. | |||||||
| 3.9 | Certificate of Correction of the Certificate of Amendment of the Amended and Restated Certificate of Incorporation, filed with the Secretary of State of the State of Delaware on February 3, 2022, which was filed as Exhibit 3.1 to our Current Report on Form 8-K filed February 9, 2022. | |||||||
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| 3.10 | Certificate of Amendment to the Amended and Restated Certificate of Incorporation, which was filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on June 2, 2023. | |||||||
| 4.1 | Specimen Common Stock Certificate, which was filed as Exhibit 4.3 to Amendment No. 1 to Registration Statement on Form SB-2/A (Registration No. 333-48040) on September 23, 1996. | |||||||
| 4.2 | Form of Bridge Notes. which was filed as Exhibit 4.1 to our Current Report on Form 8-K filed on December 20, 2022. | |||||||
| 4.3 | Form of 2023 Notes, which was filed as Exhibit 4.1 to the Company’s Quarterly Report on Form 10-Q filed on November 14, 2023. | |||||||
| 31.1* | Chief Executive Officer’s Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
| 31.2* | Principal Financial Officer’s Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
| 32.1** | Chief Executive Officer’s Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| 32.2** | Principal Financial Officer’s Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| 101.INS* | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | |||||||
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
*Filed herewith.
**This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act.
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SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| The Arena Group Holdings, Inc. | ||||||||
Date: August 10, 2026 | By: | /s/ PAUL EDMONDSON | ||||||
| Paul Edmondson | ||||||||
| Chief Executive Officer | ||||||||
| (Principal Executive Officer) | ||||||||
Date: August 10, 2026 | By: | /s/ GEOFFREY WAIT | ||||||
| Geoffrey Wait | ||||||||
| Principal Financial Officer | ||||||||
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Filing Exhibits & Attachments
9 documentsFinancial & Certifications
Other Documents
- EX-101 XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT 66.0 KB
- EX-101 XBRL TAXONOMY EXTENSION CALCULATION LINKBASE DOCUMENT 99.5 KB
- EX-101 XBRL TAXONOMY EXTENSION DEFINITION LINKBASE DOCUMENT 402.1 KB
- EX-101 XBRL TAXONOMY EXTENSION LABEL LINKBASE DOCUMENT 692.6 KB
- EX-101 XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT 551.2 KB