13. Subsequent Events

On January 4, 2018, the Company, pursuant to a private placement of its common stock, sold 1,200,000 shares at $2.50 per share for total gross proceeds of $3 million. This investment was wired to the Company on December 29, 2017. Because this stock purchase was not executed prior to December 31, 2017, the invested funds are recorded as Restricted Cash and as Investor Demand Payable. In 2018, upon execution of the stock purchase agreement this investment was reclassified to Common Stock and Additional Paid in Capital. As of January 4, 2018, the cash which was recorded as Restricted Cash as of December 31, 2017 was reclassified to Cash and was available for use to fund operations.

On March 13, 2018, the Company and HubPages, Inc. (“HubPages”), together with HP Acquisition Co., Inc. (“HPAC”) that is a wholly-owned subsidiary of the Company, entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which HPAC will merge with and into HubPages, with HubPages continuing as the surviving corporation in the merger and as a wholly-owned subsidiary of the Company (the “Merger”). The Merger Agreement provides that all issued and outstanding common stock and preferred stock of HubPages, along with all outstanding vested stock options issued by HubPages will be exchanged for an aggregate of $10 million in cash (the “Merger Consideration”). The aggregate Merger Consideration to be issued at closing shall be reduced by (i) $1.5 million to be held in escrow to satisfy any indemnification obligations due under the Merger Agreement and (ii) to the extent that a seller-side representation and warranty insurance policy is obtained and bound at closing, 50% of the total premium, underwriting costs, brokerage commissions and other fees and expenses of such policy. In addition, the Merger Agreement provides that all outstanding unvested stock options issued by HubPages will be cancelled for no additional consideration and that at closing certain Key Personnel (as that term is defined in the Merger Agreement) will receive an aggregate of 2.4 million shares of the Company’s common stock, subject to cut-back and vesting as set forth in the Merger Agreement. Subject to the satisfaction or waiver of all closing conditions, and obtaining the necessary financing, the Company expects to consummate the Merger by June 1, 2018. Should the Company not be able to consummate the Merger by June 1, 2018 due to its inability to obtain the funds necessary to pay the Merger Consideration, the Company shall be obligate to pay HubPages a termination fee of $1 million.

On March 19, 2018, the Company entered into a non-binding letter of intent to acquire Say Media Inc. (“Say Media”), a media and publishing technology company (the “Letter of Intent”). Pursuant to the terms of the non-binding Letter of Intent, the aggregate consideration proposed to be payable in connection with the acquisition of Say Media is $20 million, comprised of (A) $7.5 million in cash, consisting of (i) a $1 million Note (as described below), and (ii) $6.5 million in cash; (B) $9.6 million of Maven common stock and options to purchase shares of Maven common stock (valued at a price of $2.50 per share), consisting of (i) 2,088,900 shares of common stock to be issued at closing to the stockholders of Say Media, and (ii) 1,751,100 options to purchase shares of common stock to be issued to certain employees of Say Media who accept offers of continued employment with Say Media as the surviving company; and (C) $2.9 million in cash and common stock consisting of (i) a $2.5 million short-term, secured promissory note due 90 days after closing, (the “Maven Note”), to be secured by all of the assets, tangible and intangible, of Maven and its subsidiaries (including HubPages, Inc. and/or Say Media, assuming the consummation of those respective acquisitions), and (ii) 160,000 shares of common stock, to be issued to an affiliated entity of Say Media’s chief executive officer (the “Say Lender”), in satisfaction of certain senior promissory notes issued by Say Media. All of the foregoing acquisition consideration is subject to adjustment if the average monthly unique users across Say Media’s content management system and publishing platform (the “Say Media Platform”) for the 60 days prior to closing is less than 40 million; provided that the 160,000 shares of common stock to be issued to the Say Lender is subject to adjustment if the average credited monthly unique users on the Say Media Platform for the 60 days prior to the maturity date of the Maven Note is less than 70 million. The Letter of Intent contemplates that at closing, $1.5 million will be placed into an indemnity escrow for 24 months, with $750,000 to be released after 12 months. In addition, 15% of shares of Maven common stock to be issued to the stockholders of Say Media and 15% of the shares of Maven common stock to be issued to the Say Lender will be locked-up to satisfy any indemnification claims, with 100% of those shares to be lock-up for a period of 12 months and 50% of those shares to be lock-up for a period of 24 months. Maven has committed to issuing up to a maximum of 4 million additional shares of common stock if the recipients of the equity consideration, if and when they sell their equity after vesting during the 36 months after closing if the sales price achieved is less than $2.50.

In connection with the Letter of Intent, on March 26, 2018, Maven loaned $1,000,000 to Say Media and was issued a secured promissory note in the principal amount of $1,000,000 from Say Media (the “Note”). The Note bears interest at the rate of 5% per annum and is secured against all of the assets of Say Media. The Note is due and payable on the six-month anniversary of the earlier of (i) the termination of the Letter of Intent or (ii) if Maven and Say Media should execute a definitive agreement with respect to the proposed acquisition, the termination of the definitive agreement. The acquisition will be subject to negotiation and execution of definitive documentation and various conditions precedent. In connection with the Letter of Intent on March 26, 2018 Maven loaned $1 million to Say Media and was issued a secured promissory note in the principal amount of $1 million from Say Media.

On March 30, 2018 the Company, pursuant to a private placement of its common stock, sold 500,000 shares at $2.50 per share for total gross proceeds of $1,250,000.

On April 25, 2018, Maven entered into an office sublease agreement to sublease of 7,457 rentable square feet at 1500 Fourth Avenue, Seattle, Washington 98101. The sublease has a term of 41 months, commencing on June 1, 2018, with base rent at a rate of $25.95 per square foot per annum in months 1 through 12, rising to $37 per square foot in months 37 to 41. Upon execution of the sublease in April 2018, the Company paid $60,249, as prepaid rent and a security deposit of $22,992.

On April 30, 2018, a holder of 842,117 warrants with an exercise price of $0.20 per share exercised those warrants and received upon cashless exercise a total of 736,852 common shares.

On April 30, 2018, a holder of 25,000 with an exercise price of $0.17 per share exercised those warrants and received upon cashless exercise a total of 22.344 common shares.

From January 1, 2018 to April 30, 2018, the Company has continued to incur operating losses and negative cash flow from operating and investing activities. The Company has been able to raise $1,250,000 in gross proceeds pursuant to a private placement of its common stock. However, the Company’s cash balance at April 30, 2018 is approximately $257,000.

In order to fully fund operations through the end of May 2018, the Company will need to raise approximately $850,000. There can be no assurance that Maven will be able to obtain the necessary funds on terms acceptable to it or at all. Additional funds for working capital will be required to fund operations past May 31, 2018. There are no assurances that we will be able to obtain further funds required for our continued operations. We will pursue various financing alternatives to meet our immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations.