Stock–Based Compensation

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Stock–Based Compensation

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 136,363 shares to 227,272 shares. On August 23, 2018, the Board increased the authorized number of shares of common stock under the 2016 Plan from 227,272 shares to 454,545 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, 2021 and 2020 is as follows:

						Weighted
						Average
				Weighted		Remaining
	Number			Average		Contractual
	of			Exercise		Life
	Shares			Price		(in Years)
Common stock awards outstanding at January 1, 2020		366,571		$	13.64		8.34
Granted		10,637			19.80
Exercised		(316	)		12.32
Forfeited		(27,327	)		23.98
Expired		(35,823	)		11.66
Common stock awards outstanding at December 31, 2020		313,742			18.92		7.50
Granted		8,041			27.42
Forfeited		(176	)		12.32
Expired		(28,266	)		26.84
Common stock awards outstanding at December 31, 2021		293,341			18.49		6.49
Common stock awards exercisable at December 31, 2021		293,341			18.49		6.49
Common stock awards not vested at December 31, 2021		-
Common stock awards available for future grants at December 31, 2021		161,204

The aggregate grant date fair value of common stock awards granted during the years ended December 31, 2021 was $173,934.

On January 8, 2021, the Company modified certain common stock awards as follows:

● 10,000 common stock option grants that were subject to performance-vesting (revenue targets) were modified to remove the performance-vesting conditions and fully vest the award at the modification date with no further service requirement, resulting in incremental cost of $35,352 (recognized at the modification date).

● 9,091 common stock option grants were that were subject to performance-vesting (publishing onboarding targets) were modified to remove the performance-vesting conditions and fully vest the award at the modification date with no further service requirement, resulting in no incremental cost.

On June 3, 2021, the Company modified certain common stock awards in connection with a consulting agreement entered into on August 26, 2020, as amended on June 3, 2021, which extended to consulting term through August 26, 2022 (the “Amended Consulting Agreement”), as follows:

● 102,272 common stock option grants that were time-vesting were modified to permit the common stock options to be exercisable for their full term, or 10-years, resulting in no incremental cost.

On October 7, 2021, the Company modified certain common stock awards upon the resignation of certain board members from the Board as follows:

● 7,160 common stock option grants that were fully vested and subject time-vesting were modified to permit an extension of the exercise period for 2-years, or through October 7, 2023, resulting in no incremental cost.

The intrinsic value of exercisable but unexercised in-the-money common stock awards as of December 31, 2021 was $384,720 based on a fair market value of the Company’s common stock of $14.08 per share on December 31, 2021.

The exercise prices under the 2016 Plan for the common stock awards outstanding and exercisable are as follows as of December 31, 2021:

Exercise		Outstanding		Exercisable
Price		(Shares)		(Shares)
	Under $11.00		32,591		32,591
	$11.01 to $16.50		171,797		171,797
	$16.51 to $22.00		-		-
	$22.01 to $27.50		41,486		41,486
	$27.51 to $33.00		910		910
	$33.01 to $38.50		11,366		11,366
	$38.51 to $44.00		34,509		34,509
	$44.01 to $49.50		682		682
			293,341		293,341

Information with respect to stock-based compensation cost and unrecognized stock-based compensation cost 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, restricted stock units, 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 3,863,636 under the 2019 Plan on April 3, 2020. On February 18, 2021, the Board increased the authorized number of shares of common stock under the 2019 Plan from 3,863,637 shares to 8,409,090 shares. 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).

During the years ended December 31, 2021 and 2020, the Company issued restricted stock units of shares of the Company’s common stock of 1,677,680 and 147,728, respectively, to senior management under the 2019 Plan, subject to vesting and other terms and conditions.

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

Unless otherwise stated, the fair value of a restricted stock unit is determined based on the number of shares granted and the quoted price of the Company’s common stock on the date issued.

The fair value of common equity awards granted during the years ended December 31, 2021 and 2020 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:

	Year Ended December 31, 2021				Year Ended December 31, 2020
	Up-list		No Up-list		Up-list		No Up-list
Risk-free interest rate		0.16% - 1.48%		0.16% - 1.48%		0.20% - 0.79%		0.20% - 0.79%
Expected dividend yield		0.00%		0.00%		0.00%		0.00%
Expected volatility		65.00% - 90.00%		133.00% - 140.00%		61.00% - 91.00%		61.00% - 142.00%
Expected life		3.0 – 6.0 years		3.0 – 6.0 years		3.0 – 6.7 years		3.0 – 6.7 years

A summary of the common equity award activity during the years ended December 31, 2021 and 2020 is as follows:

						Weighted
						Average
				Weighted		Remaining
	Number			Average		Contractual
	of			Exercise		Life
	Shares			Price		(in Years)
Common equity awards outstanding at January 1, 2020		2,955,166		$	11.66		9.43
Granted		1,154,263			15.62
Forfeited		(379,199	)		13.42
Expired		(124	)		12.32
Common equity awards outstanding at December 31, 2020		3,730,106			12.76		8.65
Granted		3,981,907			10.86
Exercised		(7,893	)		10.12
Issued		(22,728	)		-
Forfeited		(433,982	)		16.01
Expired		(339,956	)		12.02
Common equity awards outstanding at December 31, 2021 (1)		6,907,454			11.23		8.63
Common equity awards exercisable at December 31, 2021		2,052,532			12.04		8.16
Common equity awards not vested at December 31, 2021 (1)		4,854,922
Common equity awards available for future grants at December 31, 2021 (2)		1,408,443

(1) Includes 1,814,044 restricted stock units outstanding

(2) Excludes 70,465 restricted stock awards vested as of December 31, 2021 that were issued under the 2019 Plan

The aggregate grant date fair value for the common equity awards granted during the years ended December 31, 2021 and 2020 was $58,093,478 and $11,180,642, respectively.

On January 8, 2021, the Company modified certain common equity awards as follows:

● 475,946 common stock option grants that were issued to senior management were subject to market-based vesting (stock price targets) with a time-vesting overlay were modified to remove the market-based conditions with only the time-vesting condition remaining after the modification, resulting in incremental cost of $125,650 (to be recognized over the remaining time-vesting period of the original award at the modification date).

● 194,319 common stock option grants that were issued to senior management were subject to performance-vesting (revenue targets) were modified to remove the performance-vesting conditions and replace the time-vesting condition such that the common stock options will vest with respect to one-third of the grant when the option holder completes one year of continuous service beginning on the grant date and the remaining common stock options will vest monthly over twenty-four months when the option holder completes each month of continuous service thereafter, resulting in no incremental cost.

● 572,674 common stock option grants that were subject to market-based vesting (stock price targets) with a time-vesting overlay were modified, in general, to remove the market-based condition and replace the time-vesting condition such that the common stock options will vest with respect to one-third of the grant when the option holder completes one year of continuous service beginning on the grant date and the remaining common stock options will vest monthly over twenty-four months when the option holder completes each month of continuous service thereafter, resulting in incremental cost of $13,893 (to be recognized over the remaining time-vesting period of the original award at the modification date).

On June 3, 2021, the Company modified certain common equity awards in connection with the Amended Consulting Agreement as follows:

● 659,511 common stock option grants that were subject to performance-vesting conditions (stock-price targets) were modified such that: (1) 90,910 common stock option awards were vested at the modification date, resulting in incremental cost of $51,293 (recognized at the modification date); and (2) 568,601 common stock option awards would vest, subject to the Company’s common stock being listing on a national securities exchange, upon market-based conditions (stock price targets), resulting in incremental cost of $512,883 (to be recognized over the implied service period, or through August 26, 2022, at the modification date) measured by an independent appraisal, subject to certain volume weighted average price provisions and permitting the common stock options to be exercisable for their full term, or 10-years, as follows:

Stock		Number of Shares
Price		that Vest
	$14.30		114,035
	$22.00		151,522
	$33.00		151,522
	$44.00		151,522
			568,601

On October 7, 2021, the Company modified certain common equity awards upon the resignation of certain board members from the Board as follows:

● 65,951 common stock options grants that were subject to market-based vesting (stock price targets) with a time-vesting overlay were modified to remove the market-based conditions and to accelerate the vesting upon resignation from the Board with an extension of the exercise period for 2-years, or through October 7, 2023, resulting in incremental cost of $267,912 (recognized at the modification date).

The intrinsic value of exercisable (or issuable in the case of vested restricted stock units) but unexercised (or unissued in the case of restricted stock units) in-the-money common equity awards as of December 31, 2021 was $6,572,579 based on a fair market value of the Company’s common stock of $14.08 per share on December 31, 2021.

The exercise prices under the 2019 Plan for the common equity awards outstanding and exercisable are as follows as of December 31, 2021:

Exercise		Outstanding		Exercisable
Price		(Shares)		(Shares)
	No exercise price		1,802,686		166,574
	$7.00 to $9.99		132,281		83,496
	$10.00 to $12.99		1,802,249		974,941
	$13.00 to $15.99		334,825		135,689
	$16.00 to $18.99		1,803,385		664,881
	$19.00 to $21.99		1,032,028		26,951
			6,907,454		2,052,532

Information with respect to stock-based compensation cost and unrecognized stock-based compensation cost 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 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 as outside options 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).

A summary of outside option activity during the years ended December 31, 2021 and 2020 is as follows:

						Weighted
						Average
				Weighted		Remaining
	Number			Average		Contractual
	of			Exercise		Life
	Shares			Price		(in Years)
Outside options outstanding at January 1, 2020		169,304		$	4.62		9.04
Forfeited		(8,879	)		10.12
Expired		(21,697	)		8.58
Outside options outstanding at December 31, 2020		138,728			10.12		8.07
Forfeited		(31	)		7.70
Expired		(60	)		7.70
Outside options outstanding at December 31, 2021		138,637			10.08		7.07
Outside options exercisable at December 31, 2021		132,955			9.98		7.07
Outside options not vested at December 31, 2021		5,682

The intrinsic value of exercisable but unexercised in-the-money outside options as of December 31, 2021 was $545,753 based on a fair market value of the Company’s common stock of $14.08 per share on December 31, 2021.

The exercise prices of outside options outstanding and exercisable are as follows as of December 31, 2021:

Exercise		Outstanding		Exercisable
Price		(Shares)		(Shares)
	$7.00 to $9.99		70,455		70,455
	$10.00 to $12.99		68,182		62,500
			138,637		132,955

Information with respect to stock-based compensation cost and unrecognized stock-based compensation cost 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, 2021, Publisher Partner Warrants to purchase up to 90,909 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, 2021 and 2020 is as follows:

						Weighted
						Average
				Weighted		Remaining
	Number			Average		Contractual
	of			Exercise		Life
	Shares			Price		(in Years)
Publisher Partner Warrants outstanding at January 1, 2020		42,707		$	32.12		2.57
Forfeited		(6,819	)
Publisher Partner Warrants outstanding at December 31, 2020		35,888			29.48		1.50
Expired		(281	)
Publisher Partner Warrants outstanding at December 31, 2021		35,607			28.33		0.50
Publisher Partner Warrants exercisable at December 31, 2021		20,766			28.88		0.53
Publisher Partner Warrants not vested at December 31, 2021		14,841
Publisher Partner Warrants available for future grants at December 31, 2021		55,303

On October 26, 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 $14.08 per share of the Company’s common stock was lower than the exercise prices on December 31, 2021.

The exercise prices of the Publisher Partner Warrants outstanding and exercisable are as follows as of December 31, 2021.

Exercise		Outstanding		Exercisable
Price		(Shares)		(Shares)
	$20.00 to $24.99		6,390		1,844
	$25.00 to $29.99		17,009		12,918
	$30.00 to $34.99		2,521		2,521
	$35.00 to $39.99		4,888		1,138
	$40.00 to $44.99		4,749		2,295
	$45.00 to $49.99		50		50
			35,607		20,766

Information with respect to stock-based compensation cost and unrecognized stock-based compensation cost related to the Publisher Partner Warrants is provided under the heading Stock-Based Compensation.

Restricted Stock Units

On May 31, 2019, the Company issued 109,090 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, which was amended on December 15, 2020 where all of the restricted stock units were forfeited on December 31, 2020 (as further described in Note 12). The terms under which the restricted stock units were granted are summarized as follows:

● 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;

● The restricted stock units were to vest six equal installments, subject to the conditions as outlined below, at four-month intervals on the first of each month, starting on June 1, 2019, with the final vesting date on February 1, 2021;

● 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 was be issued by the Company upon the authorized shares of the Company’s common stock increased (further details are provided in Note 21); and

● Unless otherwise specified in an employee’s grant agreement, vesting would have ceased upon the termination of the employees continuous service.

The fair value of a restricted stock unit was 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, 2020.

A summary of the restricted stock unit activity during the years ended December 31, 2021 and 2020 is as follows:

						Weighted Average
	Number of Shares					Grant-Date
	Unvested			Vested		Fair Value
Restricted stock units outstanding at January 1, 2020		109,091			-	$	9.90
Forfeited		(109,091	)		-
Restricted stock units outstanding at December 31, 2020		-			-		-
Restricted stock units outstanding at December 31, 2021		-			-		-

Information with respect to stock-based compensation cost related to the restricted stock units is included within the Common Equity 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 999,540 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.

A summary of the ABG Warrant activity during the years ended December 31, 2021 and 2020 is as follows:

	Number of Shares					Weighted Average		Weighted Average Remaining Contractual Life
	Unvested			Vested		Exercise Price		(in years)
ABG Warrants outstanding at January 1, 2020		999,540			-	$	13.86		9.46
Vested		(99,954	)		99,954		13.86
ABG Warrants outstanding at December 31, 2020		899,586			99,954		13.86		8.46
Vested		(199,909	)		199,909		12.06
ABG Warrants outstanding at December 31, 2021		699,677			299,863		11.55		7.46

The intrinsic value of exercisable but unexercised in-the-money ABG Warrants as of December 31, 2021 was $1,007,868 based on a fair market value of the Company’s common stock of $14.08 per share on December 31, 2021.

The exercise prices of the ABG Warrants outstanding and exercisable are as follows as of December 31, 2021.

Exercise		Outstanding		Exercisable
Price		(Shares)		(Shares)
	$9.24		749,655		208,238
	$18.48		249,885		91,625
			999,540		299,863

Information with respect to compensation cost and unrecognized compensation cost 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, 2021 and 2020 are summarized as follows:

	Year Ended December 31, 2021
	Restricted		Common		Common				Publisher
	Stock		Stock		Equity		Outside		Partner		ABG
	Awards		Awards		Awards		Options		Warrants		Warrants		Totals
Cost of revenue	$	196,651	$	303,899	$	6,974,374	$	2,981	$	-	$	-	$	7,477,905
Selling and marketing		-		34,832		5,265,382		75,653		-		-		5,375,867
General and administrative		1,535,865		174,123		13,879,175		234,101		-		1,816,485		17,639,749
Total costs charged to operations		1,732,516		512,854		26,118,931		312,735		-		1,816,485		30,493,521
Capitalized platform development		11,128		7,101		2,018,993		8,042		-		-		2,045,264
Total stock-based compensation	$	1,743,644		519,955	$	28,137,924	$	320,777	$	-	$	1,816,485	$	32,538,785

	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

Unrecognized compensation expense related to the stock-based compensation awards and equity-based awards as of December 31, 2021 was as follows:

	As of December 31, 2021
	Restricted Stock Awards		Common Stock Awards		Common Equity Awards		Outside Options		Publisher Partner Warrants		ABG Warrants		Totals
Unrecognized compensation expense	$	2,354,832	$	-	$	45,556,247	$	37,694	$	-	$	2,433,889	$	50,382,662
Weighted average period expected to be recognized (in years)		1.41		-		1.98		0.19		-		1.67		1.94