Stock-Based Compensation

9 Months Ended

12 Months Ended

Sep. 30, 2021

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

11. Compensation Plans

The Company provides stock-based compensation in the form of (a) stock awards to employees and directors, comprised of restricted stock awards and restricted stock units (collectively referred to as the “Restricted Stock Awards”), (b) stock option grants to employees, directors and consultants (referred to as the “Common Stock Awards”) (c) stock option awards, restricted stock awards, unrestricted stock awards, and stock appreciation rights to employees, directors and consultants (collectively the “Common Equity Awards”), (d) stock option awards outside of the 2016 Stock Incentive Plan and 2019 Equity Incentive Plan to certain officers, directors and employees (referred to as the “Outside Options”), (e) common stock warrants to the Company’s publisher partners (referred to as the “Publisher Partner Warrants”), and (f) common stock warrants to ABG-SI, LLC (referred to as the “ABG Warrants”).

Stock-based compensation and equity-based expense charged to operations or capitalized during the three months ended September 30, 2021 and 2020 are summarized as follows:

	Restricted		Common		Common				Publisher
	Stock		Stock		Equity		Outside		Partner		ABG
	Awards		Awards		Awards		Options		Warrants		Warrants		Totals
During the Three Months Ended September 30, 2021
Cost of revenue	$	11,808	$	23,217	$	1,696,147	$	967	$	-	$	-	$	1,732,139
Selling and marketing		-		3,970		1,341,948		75,193		-		-		1,421,111
General and administrative		414,163		78,017		4,081,766		-		-		745,636		5,319,582
Total costs charged to operations		425,971		105,204		7,119,861		76,160		-		745,636		8,472,832
Capitalized platform development		2,328		-		483,854		2,690		-		-		488,872
Total stock-based compensation	$	428,299	$	105,204	$	7,603,715	$	78,850	$	-	$	745,636	$	8,961,704
During the Three Months Ended September 30, 2020
Cost of revenue	$	35,610	$	53,149	$	1,178,276	$	2,471	$	992	$	-	$	1,270,498
Selling and marketing		323,164		42,695		734,391		43,900		-		-		1,144,150
General and administrative		80,306		127,786		855,390		-		-		364,248		1,427,730
Total costs charged to operations		439,080		223,630		2,768,057		46,371		992		364,248		3,842,378
Capitalized platform development		88,619		32,680		267,013		1,188		-		-		389,500
Total stock-based compensation	$	527,699		256,310	$	3,035,070	$	47,559	$	992	$	364,248	$	4,231,878

Stock-based compensation and equity-based expense charged to operations or capitalized during the nine months ended September 30, 2021 and 2020 are summarized as follows:

	Restricted		Common		Common				Publisher
	Stock		Stock		Equity		Outside		Partner		ABG
	Awards		Awards		Awards		Options		Warrants		Warrants		Totals
During the Nine Months Ended September 30, 2021
Cost of revenue	$	60,838	$	169,482	$	4,694,925	$	4,463	$	-	$	-	$	4,929,708
Selling and marketing		-		13,899		3,820,996		224,371		-		-		4,059,266
General and administrative		559,505		297,283		10,344,247		-		-		1,498,217		12,699,252
Total costs charged to operations		620,343		480,664		18,860,168		228,834		-		1,498,217		21,688,226
Capitalized platform development		11,276		5,071		1,324,805		6,472		-		-		1,347,624
Total stock-based compensation	$	631,619	$	485,735	$	20,184,973	$	235,306	$	-	$	1,498,217	$	23,035,850
During the Nine Months Ended September 30, 2020
Cost of revenue	$	108,936	$	150,915	$	3,261,542	$	5,644	$	36,654	$	-	$	3,563,691
Selling and marketing		920,566		102,206		2,114,595		142,767		-		-		3,280,134
General and administrative		238,558		437,614		2,430,553		150,577		-		1,084,826		4,342,128
Total costs charged to operations		1,268,060		690,735		7,806,690		298,988		36,654		1,084,826		11,185,953
Capitalized platform development		234,611		154,445		864,656		5,451		-		-		1,259,163
Total stock-based compensation	$	1,502,671		845,180	$	8,671,346	$	304,439	$	36,654	$	1,084,826	$	12,445,116

Unrecognized compensation expense and expected weighted-average period to be recognized related to the stock-based compensation awards and equity-based awards as of September 30, 2021 was as follows:

	Restricted		Common		Common				Publisher
	Stock		Stock		Equity		Outside		Partner		ABG
	Awards		Awards		Awards		Options		Warrants		Warrants		Totals
Unrecognized compensation expense	$	2,750,000	$	-	$	54,255,910	$	135,741	$	-	$	3,788,429	$	60,930,080
Expected weighted-average period expected to be recognized (in years)		1.68		-		2.14		0.44		-		1.63		2.08

Pursuant to an amendment with ABG-SI, LLC on June 4, 2021, the exercise price related to the ABG Warrants exercisable for up to 10,994,922 shares of the Company’s common stock was changed to $0.42 per share from $0.84 per share in exchange for additional benefits under the Sports Illustrated licensing agreement.

Further details as of the date these condensed consolidated financial statements were issued or were available to be issued are provided under the heading Compensation Plans in Note 15.

22. Stock-Based Compensation

Common Stock Awards

2016 Plan – On December 19, 2016, the Board adopted the 2016 Stock Incentive Plan (the “2016 Plan”). The purpose of the 2016 Plan is to advance the interests of the Company and its stockholders by enabling the Company and its subsidiaries to attract and retain qualified individuals through opportunities for equity participation in the Company, and to reward those individuals who contribute to the Company’s achievement of its economic objectives. The 2016 Plan allows the Company to grant statutory and non-statutory common stock options, and restricted stock awards (collectively the “common stock awards”) to acquire shares of the Company’s common stock to the Company’s employees, directors and consultants. Shares subject to an award that lapse, expire, are forfeited or for any reason are terminated unexercised or unvested will automatically again become available for issuance under the 2016 Plan. Stock awards issued under the 2016 Plan may have a term of up to ten years and may have variable vesting provisions consisting of time-based and performance-based.

On March 28, 2018, the Board approved an increase in the number of shares of the Company’s common stock reserved for grant pursuant to the 2016 Plan from 3,000,000 shares to 5,000,000 shares. On August 23, 2018, the Board increased the authorized number of shares of common stock under the 2016 Plan from 5,000,000 shares to 10,000,000 shares. The Company’s stockholders approved the increase in the number of shares authorized under the 2016 Plan on April 3, 2020. The issuance of common stock awards under the 2016 Plan is administered by the Company and approved by the Board.

The estimated fair value of the common stock awards is recognized as compensation expense over the vesting period of the award.

The fair value of common stock awards granted during the year ended December 31, 2020 were calculated using the Black-Scholes option pricing model under the Probability Weighted Scenarios utilizing the following assumptions:

	Up-list			No Up-list
Risk-free interest rate		0.45	%		0.45	%
Expected dividend yield		0.00	%		0.00	%
Expected volatility		71.00	%		132.00	%
Expected life		6.0 years			6.0 years

A summary of the common stock award activity during the years ended December 31, 2020 and 2019 is as follows:

						Weighted
						Average
				Weighted		Remaining
	Number			Average		Contractual
	of			Exercise		Life
	Shares			Price		(in Years)
Common stock awards outstanding at January 1, 2019		9,405,541		$	0.61		9.30
Exercised		(25,000	)		0.17
Forfeited		(1,197,776	)		0.73
Expired		(118,204	)		1.09
Common stock awards outstanding at December 31, 2019		8,064,561			0.62		8.34
Granted		234,000			0.90
Exercised		(6,944	)		0.56
Forfeited		(601,179	)		1.09
Expired		(788,101	)		0.53
Common stock awards outstanding at December 31, 2020		6,902,337			0.86		7.50
Common stock awards exercisable at December 31, 2020		6,027,418			0.90		7.47
Common stock awards not vested at December 31, 2020		874,919
Common stock awards available for future grants at December 31, 2020		3,097,663

The aggregate grant date fair value of common stock awards granted during the years ended December 31, 2020 was $117,000.

The intrinsic value of exercisable but unexercised in-the-money common stock awards as of December 31, 2020 was approximately $185,413 based on a fair market value of the Company’s common stock of $0.60 per share on December 31, 2020.

The exercise prices under the 2016 Plan for the common stock awards outstanding and exercisable are as follows as of December 31, 2020:

Exercise		Outstanding		Exercisable
Price		(Shares)		(Shares)
	Under $1.00		4,825,750		3,982,816
$	1.01 to $1.25		780,751		779,843
$	1.51 to $1.75		250,000		229,479
$	1.76 to $2.00		924,169		913,613
$	2.01 to $2.25		121,667		121,667
			6,902,337		6,027,418

Information with respect to stock-based compensation expense and unrecognized stock-based compensation expense related to the common stock awards is provided under the heading Stock-Based Compensation.

Common Equity Awards

2019 Plan – On April 4, 2019, the Board adopted the 2019 Equity Incentive Plan (the “2019 Plan”). The purpose of the 2019 Plan is to retain the services of our directors, employees, and consultants and align the interests of these individuals with the interests of our stockholders through awards of stock options, restricted stock awards, unrestricted stock awards, and stock appreciation rights (collectively the “common equity awards”). Certain common equity awards require the achievement of certain price targets of the Company’s common stock. Shares subject to a common equity award that lapse, expire, are forfeited or for any reason are terminated unexercised or unvested will automatically again become available for issuance under the 2019 Plan. Common stock options issued under the 2019 Plan may have a term of up to ten years and may have variable vesting provisions consisting of time-based, performance-based, or market-based.

The Company’s stockholders approved the 2019 Plan and the maximum number of shares authorized of 85,000,000 under the 2019 Plan on April 3, 2020 (further details subsequent to the issuance date of these consolidated financial statements are provided under the heading 2019 Equity Incentive Plan in Note 27). The issuance of common equity awards under the 2019 Plan is administered by the Company and approved by the Board. Prior to December 18, 2020, the Company did not have sufficient authorized but unissued shares of common stock to allow for the exercise of these common equity awards granted; accordingly, any common equity awards granted were considered unfunded and were not exercisable until sufficient common shares were authorized (further details are provided in Note 21).

The estimated fair value of the common equity awards is recognized as compensation expense over the vesting period of the award.

The fair value of common equity awards granted during the years ended December 31, 2020 and 2019 were calculated using the Black-Scholes option pricing model for the time-based and performance-based awards by an independent appraisal firm under the Probability Weighted Scenarios utilizing the following assumptions:

	December 31, 2020						December 31, 2019
	Up-list			No Up-list			Up-list			No Up-list
Expected life		0.20% - 0.79	%		0.20% - 0.79	%		1.51% - 2.59	%		1.51% - 2.59	%
Risk-free interest rate		0.00	%		0.00	%		0.00	%		0.00	%
Volatility factor		61.00% - 91.00	%		61.00% - 142.00	%		69.00% - 95.00	%		119.00% - 149.00	%
Dividend rate		3.0 – 6.7 years			3.0 – 6.7 years			3.0 – 6.0 years			3.0 – 6.0 years

The fair value of common equity awards granted during the year ended December 31, 2019 were calculated using the Monte Carlo model for the market-based awards by an independent appraisal firm under the Probability Weighted Scenarios utilizing the following assumptions:

	Up-list			No Up-list
Expected life		2.20% - 2.70	%		2.16% - 2.71	%
Risk-free interest rate		0.00	%		0.00	%
Volatility factor		140.00% - 146.00	%		110.00	%
Dividend rate		10.0 years			10.0 years

A summary of the common equity award activity during the years ended December 31, 2020 and 2019 is as follows:

						Weighted
						Average
				Weighted		Remaining
	Number			Average		Contractual
	of			Exercise		Life
	Shares			Price		(in Years)
Common equity awards outstanding at January 1, 2019		-		$	-		-
Granted		68,180,863			0.53
Forfeited		(3,167,218	)		0.53
Common equity awards outstanding at December 31, 2019		65,013,645			0.53		9.43
Granted		25,393,768			0.71
Forfeited		(8,342,377	)		0.61
Expired		(2,722	)		0.56
Common equity awards vested at December 31, 2020		82,062,314			0.58		8.65
Common equity awards exercisable at December 31, 2020		13,608,686			0.54		8.49
Common equity awards not vested at December 31, 2020		68,453,628
Common equity awards available for future grants at December 31, 2020		2,937,686

The aggregate grant date fair value for the common equity awards granted during the years ended December 31, 2020 and 2019 was $11,180,642 and $30,864,185, respectively.

The intrinsic value of exercisable but unexercised in-the-money common equity awards as of December 31, 2020 was approximately $1,416,000 based on a fair market value of the Company’s common stock of $0.60 per share on December 31, 2020.

The exercise prices under the 2019 Plan for the common equity awards outstanding and exercisable are as follows as of December 31, 2020:

Exercise	Outstanding		Exercisable
Price	(Shares)		(Shares)
No exercise price		250,000		250,000
Under $1.00		81,812,314		13,358,686
		82,062,314		13,608,686

Information with respect to stock-based compensation expense and unrecognized stock-based compensation expense related to the common equity awards is provided under the heading Stock-Based Compensation.

Outside Options

The Company granted stock options outside the 2016 Plan and 2019 Plan during the year ended December 31, 2020 to certain officers, directors and employees of the Company as approved by the Board and administered by the Company (the “outside options”). The stock options were to acquire shares of the Company’s common stock and were subject to: (1) time-based vesting; (2) certain performance-based targets; and (3) certain performance achievements. Options to purchase common stock issued pursuant to the Outside Plan may have a term of up to ten years. The issuance of outside options is administered by the Company and approved by the Board. Prior to December 18, 2020, the Company did not have sufficient authorized but unissued shares of common stock to allow for the exercise of these outside options granted; accordingly, any common stock options granted were considered unfunded and were not exercisable until sufficient common shares were authorized (further details are provided in Note 21).

The fair value for the outside options granted during the year ended December 31, 2019 were calculated using the Black-Scholes option pricing model for the time-based and performance-based awards by an independent appraisal firm under the Probability Weighted Scenarios utilizing the following assumptions:

	Up-list			No Up-list
Risk-free interest rate		2.49% –2.57	%		2.49% – 2.57	%
Expected dividend yield		0.00	%		0.00	%
Expected volatility		74.00% – 95.00	%		122.00% – 142.00	%
Expected life		3.0 – 5.8 years			3.0 – 5.8 years

A summary of outside option activity during the years ended December 31, 2020 and 2019 is as follows:

						Weighted
						Average
				Weighted		Remaining
	Number			Average		Contractual
	of			Exercise		Life
	Shares			Price		(in Years)
Outside options outstanding at January 1, 2019		2,414,000		$	0.36		9.94
Granted		1,500,000			0.57
Exercised		(2,000	)		0.35
Forfeited		(180,000	)		0.35
Expired		(7,333	)		0.35
Outside options outstanding at December 31, 2019		3,724,667			0.21		9.04
Forfeited		(195,333	)		0.46
Expired		(477,334	)		0.39
Outside options outstanding at December 31, 2020		3,052,000			0.46		8.07
Outside options exercisable at December 31, 2020		2,376,333			0.43		6.20
Outside options not vested at December 31, 2020		675,667

The aggregate grant date fair value of outside options granted during the year ended December 31, 2019 was $675,000.

The intrinsic value of exercisable but unexercised in-the-money outside options as of December 31, 2020 was approximately $401,583 based on a fair market value of the Company’s common stock of $0.60 per share on December 31, 2020.

The exercise prices of outside options outstanding and exercisable are as follows as of December 31, 2020:

Exercise	Outstanding		Exercisable
Price	(Shares)		(Shares)
Under $1.00		3,052,000		2,376,333

Information with respect to stock-based compensation expense and unrecognized stock-based compensation expense related to the outside options is provided under the heading Stock-Based Compensation.

Publisher Partner Warrants

On December 19, 2016, as amended on August 23, 2017, and August 23, 2018, the Board approved the Channel Partner Warrant Program to be administered by management that authorized the Company to grant Publisher Partner Warrants. As of December 31, 2020, Publisher Partner Warrants to purchase up to 2,000,000 shares of the Company’s common stock were reserved for grant.

The Publisher Partner Warrants had certain performance conditions. Pursuant to the terms of the Publisher Partner Warrants, the Company would notify the respective Publisher Partner of the number of shares earned, with one-third of the earned shares vesting on the notice date, one-third of the earned shares vesting on the first anniversary of the notice date, and the remaining one-third of the earned shares vesting on the second anniversary of the notice date. The Publisher Partner Warrants had a term of five years from issuance and could also be exercised on a cashless basis. Performance conditions are generally based on the average of number of unique visitors on the channel operation by the Publisher Partner generated during the six-month period from the launch of the Publisher Partner’s operations on the Company’s technology platform or the revenue generated during the period from the issuance date through a specified end date.

A summary of the Publisher Partner Warrants activity during the years ended December 31, 2020 and 2019 is as follows:

						Weighted
						Average
				Weighted		Remaining
	Number			Average		Contractual
	of			Exercise		Life
	Shares			Price		(in Years)
Publisher Partner Warrants outstanding at January 1, 2019		1,017,140		$	1.47		3.26
Forfeited		(77,599	)		1.62
Publisher Partner Warrants outstanding at December 31, 2019		939,541			1.46		2.57
Forfeited		(150,000	)
Publisher Partner Warrants outstanding at December 31, 2020		789,541			1.34		1.50
Publisher Partner Warrants exercisable at December 31, 2020		463,041			1.31		1.52
Publisher Partner Warrants not vested at December 31, 2020		326,500
Publisher Partner Warrants available for future grants at December 31, 2020		1,210,459

During the year ended December 31, 2020, the Company recognized incremental compensation costs as a result of the Exchange of $27,754 (see Note 21).

There was no intrinsic value of exercisable but unexercised in-the-money Publisher Partner Warrants since the fair market value of $0.60 per share of the Company’s common stock was lower than the exercise prices on December 31, 2020.

The exercise prices of the Publisher Partner Warrants outstanding and exercisable are as follows as of December 31, 2020.

Exercise		Outstanding		Exercisable
Price		(Shares)		(Shares)
	Under $1.00		40,000		40,000
$	1.01 to $1.25		465,419		275,419
$	1.26 to $1.50		68,277		68,277
$	1.51 to $1.75		110,318		27,818
$	1.76 to $2.00		104,449		50,449
$	2.01 to $2.25		1,078		1,078
			789,541		463,041

Information with respect to compensation expense and unrecognized compensation expense related to the Publisher Partner Warrants is provided below.

Restricted Stock Units

On May 31, 2019, the Company issued 2,399,997 restricted stock units to certain employees in settlement of the true-up provisions of the restricted stock awards issued at the time of the HubPages merger. Each restricted stock unit represented the right to receive a number of the shares of the Company’s common stock pursuant to a grant agreement, subject to certain terms and conditions, and was to be credited to a separate account maintained by the Company in certain circumstances. All amounts credited to the separate account will be part of the general assets of the Company. The restricted stock units were to vest in accordance with the grant agreement in six equal installments at four-month intervals on the first of each month, starting on June 1, 2019, with the final vesting date on February 1, 2021. In addition to the vesting schedule as aforementioned, the restricted stock units would not vest until the Company increased its authorized shares of the Company’s common stock. Each restricted stock unit granted and credited to the separate account for the employee will be issued by the Company upon the authorized shares of the Company’s common stock increased (further details are provided in Note 21). Further, unless otherwise specified in an employee’s grant agreement, vesting will cease upon the termination of the employees continuous service.

The fair value of a restricted stock award is determined based on the number of shares granted and the quoted price of the Company’s common stock on the date issued during the year ended December 31, 2019.

A summary of the restricted stock unit activity during the years ended December 31, 2020 and 2019 is as follows:

	Number of Shares					Weighted Average Grant-Date
	Unvested			Vested		Fair Value
Restricted stock units outstanding at January 1, 2019		-			-	$	-
Granted		2,399,997			-		0.45
Restricted stock units outstanding at December 31, 2019		2,399,997			-		0.45
Forfeited		(2,399,997	)		-
Restricted stock units outstanding at December 31, 2020		-			-		-

As aforementioned (see Note 12), the restricted stock units were forfeited on December 31, 2020.

Information with respect to stock-based compensation expense and unrecognized stock-based compensation expense related to the restricted stock units is included within the Restricted Stock Awards caption under the heading Stock-Based Compensation.

ABG Warrants

In connection with the Sports Illustrated Licensing Agreement and issuance of the ABG Warrants to purchase up to 21,989,844 shares of the Company’s common stock, the Company recorded the issuance of the warrants as stock-based compensation with the fair value of the warrants measured at the time of issuance and expensed over the requisite service period.

The fair value of the ABG Warrants issued during the year ended December 31, 2019 were calculated using the Monte Carlo model by an independent appraisal firm under the Probability Weighted Scenarios utilizing the following assumptions:

	Up-list			No Up-list
Risk-free interest rate		2.00% – 2.10	%		2.00% – 2.10	%
Expected dividend yield		0.00	%		0.00	%
Expected volatility		51.00% – 52.00	%		121.00% – 123.00	%
Expected life		6.0 – 7.3 years			6.2 – 7.3 years

A summary of the ABG Warrant activity during the years ended December 31, 2020 and 2019 is as follows:

	Number of Shares					Weighted Average Exercise		Weighted Average Remaining Contractual Life
	Unvested			Vested		Price		(in years)
ABG Warrants outstanding at January 1, 2019		-			-	$	-
Issued		21,989,844			-		0.63
ABG Warrants outstanding at December 31, 2019		21,989,844			-		0.63		9.46
Vested		(2,198,985	)		2,198,985		0.63
ABG Warrants outstanding at December 31, 2020		19,790,859			2,198,985		0.63		8.46

The aggregate issue date fair value of the ABG Warrants issued during the year ended December 31, 2019 was $5,458,979.

The intrinsic value of exercisable but unexercised in-the-money ABG Warrants as of December 31, 2020 was approximately $197,909 based on a fair market value of the Company’s common stock of $0.60 per share on December 31, 2020.

Information with respect to compensation expense and unrecognized compensation expense related to the ABG Warrants is provided under the heading Stock-Based Compensation.

Stock-Based Compensation

Stock–based compensation and equity-based expense charged to operations or capitalized during the years ended December 31, 2020 and 2019 are summarized as follows:

	Year Ended December 31, 2020
	Restricted		Common		Common				Publisher
	Stock		Stock		Equity		Outside		Partner		ABG
	Awards		Awards		Awards		Options		Warrants		Warrants		Totals
Cost of revenue	$	163,181	$	156,043	$	3,975,625	$	8,394	$	36,673	$	-	$	4,339,916
Selling and marketing		1,486,722		114,640		2,454,432		272,431		-		-		4,328,225
General and administrative		317,982		615,604		3,439,803		150,577		-		1,449,074		5,973,040
Total costs charged to operations		1,967,885		886,287		9,869,860		431,402		36,673		1,449,074		14,641,181
Capitalized platform development		361,519		178,284		1,062,792		6,400		-		-		1,608,995
Total stock-based compensation	$	2,329,404		1,064,571	$	10,932,652	$	437,802	$	36,673	$	1,449,074	$	16,250,176

	Year Ended December 31, 2019
	Restricted		Common		Common				Publisher
	Stock		Stock		Equity		Outside		Partner		ABG
	Awards		Awards		Awards		Options		Warrants		Warrants		Totals
Cost of revenue	$	122,192	$	44,520	$	774,632	$	1,580	$	50,828	$	-	$	993,752
Selling and marketing		34,393		100,388		455,280		242,399		-		-		832,460
General and administrative		2,541,468		1,660,607		3,383,338		157,359		-		795,803		8,538,575
Total costs charged to operations		2,698,053		1,805,515		4,613,250		401,338		50,828		795,803		10,364,787
Capitalized platform development		535,004		175,837		590,618		5,931		-		-		1,307,390
Total stock-based compensation	$	3,233,057		1,981,352	$	5,203,868	$	407,269	$	50,828	$	795,803	$	11,672,177

Unrecognized compensation expense related to the stock-based compensation awards and equity-based awards as of December 31, 2020 was as follows:

	As of December 31, 2020
	Restricted Stock Awards		Common Stock Awards		Common Equity Awards		Outside Options		Publisher Partner Warrants		ABG Warrants		Totals
Unrecognized compensation expense	$	81,620	$	371,932	$	19,874,675	$	283,388	$	-	$	3,214,102	$	23,825,717
Weighted average period expected to be recognized (in years)		0.95		0.67		1.87		1.18		-		2.38		1.91