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, 2021

☐	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: 001-38448

VINCO VENTURES, INC.

(Exact Name of Registrant as Specified in Its Charter)

Nevada		82-2199200
(State or Other Jurisdiction		(I.R.S. Employer
of Incorporation or Organization)		Identification No.)

1 West Broad Street, Suite 1004
Bethlehem, Pennsylvania		18018
(Address of Principal Executive Offices)		(Zip Code)

(866) 900-0992

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or Section 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 ☐ No

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 ☐ No

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 ☐	Accelerated filer ☐
Non-accelerated filer ☒	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. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☒ No

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.001 par value per share		BBIG		Nasdaq

As of August 17, 2021, there were 65,564,435 shares of the registrant’s common stock outstanding.

EDISON NATION, INC.

TABLE OF CONTENTS

		Page Number

PART I		4
Item 1.	Financial Statements (Unaudited)	4
	Condensed Consolidated Balance Sheets as of June 30, 2021 (Unaudited) and December 31, 2020	5
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2021 and 2020 (Unaudited)	6
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2021 and 2020 (Unaudited)	7
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020 (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	55
Item 4.	Controls and Procedures	56

PART II		58
Item 1.	Legal Proceedings	58
Item 1A.	Risk Factors	58
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	58
Item 3.	Defaults Upon Senior Securities	60
Item 4.	Mine Safety Disclosures	60
Item 5.	Other Information	60
Item 6.	Exhibits	60

	Signatures	63

USE OF MARKET AND INDUSTRY DATA

This Quarterly Report on Form 10-Q includes market and industry data that we have obtained from third-party sources, including industry publications, as well as industry data prepared by our management on the basis of its knowledge of and experience in the industries in which we operate (including our management’s estimates and assumptions relating to such industries based on that knowledge). Management has developed its knowledge of such industries through its experience and participation in these industries. While our management believes the third-party sources referred to in this Quarterly Report on Form 10-Q are reliable, neither we nor our management have independently verified any of the data from such sources referred to in this Quarterly Report on Form 10-Q or ascertained the underlying economic assumptions relied upon by such sources. Furthermore, internally prepared and third-party market prospective information, in particular, are estimates only and there will usually be differences between the prospective and actual results, because events and circumstances frequently do not occur as expected, and those differences may be material. Also, references in this Quarterly Report on Form 10-Q to any publications, reports, surveys or articles prepared by third parties should not be construed as depicting the complete findings of the entire publication, report, survey or article. The information in any such publication, report, survey or article is not incorporated by reference in this Quarterly Report on Form 10-Q.

Solely for convenience, we refer to trademarks in this Quarterly Report on Form 10-Q without the ® or the ™ or symbols, but such references are not intended to indicate that we will not assert, to the fullest extent under applicable law, our rights to our own trademarks. Other service marks, trademarks and trade names referred to in this Quarterly Report on Form 10-Q, if any, are the property of their respective owners, although for presentational convenience we may not use the ® or the ™ symbols to identify such trademarks.

OTHER PERTINENT INFORMATION

Unless the context otherwise indicates, when used in this Quarterly Report on Form 10-Q, the terms “Vinco Ventures” “we,” “us,” “our,” the “Company” and similar terms refer to Vinco Ventures, Inc., a Nevada corporation formerly known as Edison Nation, Inc., Xspand Products Lab, Inc. and Idea Lab Products, Inc., and all of our subsidiaries and affiliates.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q for the period ended June 30, 2021 (the “Quarterly Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements relate to future events (including, without limitation, the terms, timing and closing of our proposed acquisitions or our future financial performance). We have attempted to identify forward-looking statements by using terminology such as “anticipates,” “believes,” “expects,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predict,” “should” or “will” or the negative of these terms or other comparable terminology. These statements are only predictions; uncertainties and other factors may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels or activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Our expectations are as of the date this Quarterly Report is filed, and we do not intend to update any of the forward-looking statements after the date this Quarterly Report is filed to confirm these statements to actual results, unless required by law.

You should not place undue reliance on forward looking statements. The cautionary statements set forth in this Quarterly Report identify important factors which you should consider in evaluating our forward-looking statements. These factors include, among other things:

	●	Our ability to effectively execute our business plan;

	●	Our ability to manage our expansion, growth and operating expenses;

	●	Our ability to protect our brands and reputation;

	●	Our ability to repay our debts;

	●	Our ability to rely on third-party suppliers outside of the United States;

	●	Our ability to evaluate and measure our business, prospects and performance metrics;

	●	Our ability to compete and succeed in a highly competitive and evolving industry;

	●	Our ability to respond and adapt to changes in technology and customer behavior;

	●	Risks in connection with completed or potential acquisitions, dispositions and other strategic growth opportunities and initiatives;

	●	Risks related to the anticipated timing of the closing of any potential acquisitions;

	●	Risks related to the integration with regards to potential or completed acquisitions;

	●	Various risks related to health epidemics, pandemics and similar outbreaks, such as the coronavirus disease 2019 (“COVID-19”) pandemic, which may have material adverse effects on our business, financial position, results of operations and/or cash flows.

This Quarterly Report on Form 10-Q also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other industry data. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We have not independently verified the statistical and other industry data generated by independent parties and contained in this Quarterly Report and, accordingly, we cannot guarantee their accuracy or completeness, though we do generally believe the data to be reliable. In addition, projections, assumptions and estimates of our future performance and the future performance of the industries in which we operate are necessarily subject to a high degree of uncertainty and risk due to a variety of factors. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including, but not limited to, the possibility that we may fail to preserve our expertise in consumer product development; that existing and potential distribution partners may opt to work with, or favor the products of, competitors if our competitors offer more favorable products or pricing terms; that we may be unable to maintain or grow sources of revenue; that we may be unable maintain profitability; that we may be unable to attract and retain key personnel; or that we may not be able to effectively manage, or to increase, our relationships with customers; that we may have unexpected increases in costs and expenses. These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.

PART I

INDEX TO FINANCIAL STATEMENTS

	Page Number

Condensed Consolidated Balance Sheets as of June 30, 2021 (Unaudited) and December 31, 2020	5
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2021 and 2020 (Unaudited)	6
Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2021 and 2020 (Unaudited)	7
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020 (Unaudited)	8
Notes to Condensed Consolidated Financial Statements	9

Vinco Ventures, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS

	June 30, 2021			December 31, 2020
		(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	74,756,573		$	249,356
Accounts receivable, net		2,907,002			1,382,163
Short-term investments		895,600			1,018,000
Inventory		852,147			1,127,725
Prepaid expenses and other current assets		1,209,435			522,259
Current assets of discontinued operations		-			1,042,680
Total current assets		80,620,757			5,342,183
Property and equipment, net		1,033,810			1,010,801
Right of use assets, net		104,707			153,034
Loan receivable		5,000,000			-
Equity method investment		12,000,000			-
Intangible assets, net		16,533,373			9,798,813
Goodwill		5,983,852			5,983,852
Non-current assets of discontinued operations		-			5,739,524
Total assets	$	121,276,499		$	28,028,207

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	1,791,982		$	3,618,339
Accrued expenses and other current liabilities		1,284,168			2,101,610
Deferred revenues		131,578			152,040
Current portion of operating leases liabilities		99,293			96,777
Income tax payable		27,643			27,643
Line of credit, net of debt issuance costs of $0 and $15,573, respectively		1,133,652			1,500,953
Current portion of convertible notes payable, net of debt issuance costs of $6,666,667 and $0, respectively		3,333,333			577,260
Current portion of notes payable, net of debt issuance costs of $0 and $212,848, respectively		15,185			1,301,212
Current portion of notes payable – related parties		876,500			1,389,923
Due to related party		15,401			32,452
Current liabilities of discontinued operations		120,729			487,454
Total current liabilities		8,829,464			11,285,663
Operating leases liabilities –net of current portion		8,483			58,713
Convertible notes payable – related parties, net of current portion, net of debt discount of $172,984 and $366,666, respectively		267,183			1,161,495
Notes payable, net of current portion		19,966			595,879
Notes payable – related parties, net of current portion		-			1,403,756
Warrant liability		139,695,115			-
Total liabilities	$	148,820,211		$	14,505,506
Commitments and Contingencies (Note 12)		-			-

Stockholders’ equity
Preferred stock, $0.001 par value, 30,000,000 shares authorized as of June 30, 2021 and December 31, 2020, respectively	$	-		$	-
Series B Preferred Stock, $0.001 par value, 1,000,000 shares authorized; 0 and 764,618 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively		-			765
Preferred stock., value		-			-
Common stock, $0.001 par value, 250,000,000 shares authorized 59,927,241 and 14,471,403 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively		59,927			14,471
Additional paid-in-capital		244,026,879			39,050,260
Accumulated deficit		(269,787,198	)		(23,648,898	)
Total stockholders’ (deficit) equity attributable to Vinco Ventures, Inc.		(25,700,392	)		15,416,598
Noncontrolling interests		(1,843,320	)		(1,893,897	)
Total stockholders’ equity		(27,543,712	)		13,522,701
Total liabilities and stockholders’ equity	$	121,276,499		$	28,028,207

The accompanying notes are an integral part of these condensed consolidated financial statements.

Vinco Ventures, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2021 (Unaudited)			2020 (Unaudited)			2021 (Unaudited)			2020 (Unaudited)
Revenues, net	$	2,691,811		$	5,173,982		$	5,256,973		$	7,127,328
Cost of revenues		1,721,189			4,004,936			3,374,570			5,368,655
Gross profit		970,622			1,169,046			1,882,403			1,758,673

Operating expenses:
Selling, general and administrative		5,941,652			2,377,853			17,602,532			5,567,516
Operating loss		(4,971,030	)		(1,208,807	)		(15,720,129	)		(3,808,843	)

Other (expense) income:
Rental income		28,703			25,703			54,407			51,407
Interest expense		(2,715,481	)		(847,154	)		(15,410,414	)		(1,571,111	)
Loss on issuance of warrants		(133,699,181	)		-			(208,855,715	)		-
Change in fair value of warrant liability		(37,154,989	)		-			(773,447	)		-
Change in fair value of short-term investment		(52,000	)		-			(122,000	)		-
Loss on disposal of interest in joint venture		(301,645	)		-			(301,645	)		-
Gain on divestiture		-			-			-			-
Total other (expense) income		(173,894,593	)		(821,451	)		(225,408,814	)		(1,519,704	)
Loss before income taxes		(178,865,623	)		(2,030,258	)		(241,128,943	)		(5,328,547	)
Income tax expense		-			-			-			-
Net loss from continuing operations	$	(178,865,623	)	$	(2,030,258	)	$	(241,128,943	)	$	(5,328,547	)
Net income (loss) attributable to noncontrolling interests		22,543			22,241			50,577			22,241
Net loss from continuing operations attributable to Vinco Ventures, Inc.		(178,888,166	)		(2,052,499	)		(241,179,520	)		(5,350,788	)
Net loss from discontinued operations		(4,780,580	)		428,119			(4,958,780	)		4,995,900
Provision for income taxes for discontinued operations		-			-			-			-
Net loss attributable to Vinco Ventures, Inc.	$	(183,668,746	)	$	(1,624,380	)	$	(246,138,300	)	$	(354,888	)
Net loss per share:
Net (loss) income per share - basic	$	(5.13	)	$	(0.18	)	$	(8.95	)	$	(0.04	)
Net (loss) income per share - diluted	$	(5.13	)	$	(0.18	)	$	(8.95	)	$	(0.04	)
Weighted average number of common shares outstanding – basic and diluted		35,831,466			8,920,554			27,489,580			8,551,012

The accompanying notes are an integral part of these condensed consolidated financial statements.

Vinco Ventures, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY


	For the six months ended June 30, 2021 and 2020:
	Preferred stock						Common Stock						Additional Paid-in			Accumulated			Noncontrolling			Total Stockholders’
	Shares			Amount			Shares			Amount			Capital			Deficit			Interest			Equity

Balance, January 1, 2021		764,618			765			14,471,403		$	14,471		$	39,050,260		$	(23,648,898	)	$	(1,893,897	)	$	13,522,701
Issuance of common stock to noteholders		-			-			303,483			304			422,368			-			-			422,672
Returned common stock from note holder
Returned common stock from note holder, shares
Issuance of common stock to investors		-			-			1,500,000			1,500			3,253,500			-			-			3,255,000
Offering costs
Issuance of common stock to noteholders
Issuance of common stock for divestiture, shares
Returned common stock from noteholder
Returned common stock from noteholder, shares
Issuance of common stock to consultants		-			-			1,394,272			1,394			2,034,941			-			-			2,036,335
Issuance of warrants to noteholders and beneficial conversion option
Issuance of common stock to employees		-			-			2,861,227			2,861			3,289,329			-			-			3,292,190
Issuance of common stock upon exercise of warrants		-			-			31,742,986			31,743			87,753,676			-			-			87,785,419
Offering costs – exercise of warrants		-			-			-			-			(7,379,064	)		-			-			(7,379,064	)
Conversion under notes payable		-			-			6,139,252			6,139			12,242,368			-			-			12,248,507
Exercise of warrant liabilities		-			-			-			-			89,654,047			-			-			89,654,047
Stock-based compensation								-			-			5,053,704			-			-			5,053,704
Issuance of common stock acquisitions		-			-			750,000			750			1,251,750			-			-			1,252,500
Conversion of preferred stock to common		(764,618	)		(765	)		764,618			765			-			-			-			-
Shares reserved for future issuance of common stock as consideration for the Emmersive asset acquisition		-			-			-			-			7,400,000			-			-			7,400,000
Issuance of common stock for Global Clean Solutions, LLC acquisition
Issuance of common stock for Global Clean Solutions, LLC acquisition, shares
Divestiture of Cloud B
Common stock reserved for future issuance to Emmersive sellers
Distributions
Net income		-			-			-			-			-			(246,138,300	)		50,577			(246,087,723	)
Balance, June 30, 2021 (Unaudited)		-		$	-			59,927,241		$	59,927		$	244,026,879		$	(269,787,198	)	$	(1,843,320	)	$	(27,543,712	)

Balance, January 1, 2020		-			-			8,015,756		$	8,016		$	26,259,576		$	(18,495,462	)	$	(317,698	)	$	7,454,432
Issuance of common stock to note holders		-			-			439,400			439			789,575			-			-			790,014
Returned common stock from noteholder		-			-			(153,005	)		(153	)		153			-			-			-
Issuance of common stock to consultants		-			-			866,250			866			561,896			-			-			562,762
Issuance of warrants to noteholders and beneficial conversion option		-			-			-			-			1,018,953			-			-			1,018,953
Divestiture of Cloud B		-			-			-			-			-			-			(26,392	)		(26,392	)
Issuance of common stock for divestiture		-			-			150,000			150			404,850			-			-			405,000
Stock-based compensation		-			-			-			-			1,068,380			-			-			1,068,380
Issuance of common stock for Global Clean Solutions, LLC acquisition		-			-			300,000			300			698,700			-			-			699,000
Distributions		-			-			-			-			-			-			(699,000	)		(699,000	)
Net (loss) income		-			-			-			-			-			(354,888	)		22,241			(332,647	)
Balance, June 30, 2020 (Unaudited)		-		$	-			9,618,401		$	9,618		$	30,802,083		$	(18,850,350	)	$	(1,020,849	)	$	10,940,502

	For the three months ended June 30, 2021 and 2020:
	Preferred stock						Common Stock				Additional Paid-in			Accumulated			Noncontrolling			Total Stockholders’
	Shares			Amount			Shares		Amount		Capital			Deficit			Interest			Equity

Balance, March 31, 2021 (Unaudited)		764,618			765			25,685,981	$	25,686	$	66,002,229		$	(86,118,452	)	$	(1,865,863	)	$	(21,955,635	)
Issuance of common stock to consultants		-			-			451,272		451		(451	)		-			-			-
Issuance of common stock to employees		-			-			1,598,355		1,598		(1,598	)		-			-			-
Issuance of common stock upon exercise of warrants		-			-			30,862,188		30,862		86,063,953			-			-			86,094,815
Offering costs – exercise of warrants		-			-			-		-		(7,379,064	)		-			-			(7,379,064	)
Conversions under notes payable		-			-			564,827		565		1,153,922			-			-			1,154,487
Conversion of preferred stock into common stock		(764,618	)		(765	)		764,618		765		-			-			-			-
Exercise of warrant liabilities		-			-			-		-		89,394,620			-			-			89,394,620
Stock-based compensation		-			-			-		-		1,393,268			-			-			1,393,268
Shares reserved for future issuance of common stock as consideration for the Emmersive asset acquisition		-			-			-		-		7,400,000			-			-			7,400,000
Net income (loss)		-			-			-		-		-			(183,668,746	)		22,543			(183,646,203	)
Balance, June 30, 2021 (Unaudited)		-		$	-			59,927,241	$	59,927	$	244,026,879		$	(269,787,198	)	$	(1,843,320	)	$	(27,543,712	)

Balance, March 31, 2020 (Unaudited)		-		$	-			8,676,501	$	8,677	$	28,790,704		$	(17,225,970	)	$	(344,090	)	$	11,229,321
Issuance of common stock to note holders		-			-			279,400		279		588,411			-			-			588,690
Issuance of common stock for divestiture		-			-			150,00		150		404,850			-			-			405,000
Issuance of common stock to consultants		-			-			212,500		212		(212	)		-			-			-
Stock-based compensation		-			-			-		-		319,630			-			-			319,630
Issuance of common stock for Global Clean Solutions, LLC acquisition		-			-			300,000		300		698,700			-			-			699,000
Distributions		-			-			-		-		-			-			(699,000	)		(699,000	)
Net (loss) income		-			-			-		-		-			(1,624,380	)		22,241			(1,602,139	)
Balance, June 30, 2020 (Unaudited)		-			-			9,618,401		9,618		30,802,083			(18,850,350	)		(1,020,849	)		10,940,502

The accompanying notes are an integral part of these condensed consolidated financial statements.

Vinco Ventures, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	2021 (Unaudited)			2020 (Unaudited)
	Six Months Ended June 30,
	2021 (Unaudited)			2020 (Unaudited)
Cash Flow from Operating Activities
Net loss from continuing operations attributable to Vinco Ventures, Inc.	$	(241,179,520	)	$	(5,350,788	)
Net income attributable to noncontrolling interests		50,577			22,241
Net loss from continuing operations		(241,128,943	)		(5,328,547	)
Adjustments to reconcile net (income) loss to net cash used in operating activities:
Discontinued operations		(4,958,780	)		4,995,900
Depreciation and amortization		1,081,623			612,406
Amortization of financing costs		15,597,936			1,227,046
Stock-based compensation		10,003,767			1,588,427
Amortization of right of use asset		48,327			153,820
Gain on debt extinguishment		(852,352	)		-
Loss on disposal of discontinued operations		4,130,580			(4,911,760	)
Change in fair value of short-term investments		122,400			-
Loss on issuance of warrants		208,855,715			-
Change in fair value of warrant liability		773,447			-
Changes in assets and liabilities:
Accounts receivable		(1,596,881	)		(978,097	)
Inventory		169,793			178,227
Prepaid expenses and other current assets		(378,831	)		(967,109	)
Accounts payable		(819,943	)		(344,847	)
Accrued expenses and other current liabilities		(775,082	)		1,425,622
Operating lease liabilities		(47,714	)		(148,518	)
Due from related party		(17,050	)		9,532
Net cash used in operating activities		(9,791,988	)		(2,487,898	)

Cash Flows from Investing Activities
Purchase of property and equipment		(88,633	)		(61,917	)
Cash received from sale of assets of CBAV 1, LLC		2,529,564			-
Equity method investment		(12,000,000	)		-
Funding of loan receivable		(5,000,000	)		-
Net cash used in investing activities		(14,559,069	)		(61,917	)

Cash Flows from Financing Activities
(Repayments) borrowings under line of credit		(379,333	)		1,678,540
Borrowings under convertible notes payable		19,720,000			1,436,000
Borrowings under notes payable		73,000			1,767,352
Repayments under notes payable		(2,145,475	)		(824,472	)
Repayments under notes payable- related parties		(1,951,012	)		(14,508	)
Fees paid for financing costs		(120,261	)		(143,479	)
Net proceeds from issuance of common stock		3,255,000			-
Net proceeds from exercise of warrants		80,406,355			-
Net cash provided by financing activities		98,858,274			3,899,433
Net increase (decrease) in cash and cash equivalents		74,507,217			1,349,618
Cash and cash equivalents - beginning of period		249,356			412,719
Cash and cash equivalents - end of period	$	74,756,573			1,762,337

Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:
Interest	$	858,388		$	144,740
Income taxes	$	(14,738	)	$	235,725
Noncash investing and financing activity:
Shares issued to note holders	$	422,672		$	-
Conversions under notes payable	$	12,248,507		$	424,000
Issuance of warrants to note holders	$	208,855,715		$	-
Shares reserved for EVNT, LLC	$	7,400,000		$	-

The accompanying notes are an integral part of these condensed consolidated financial statements.

Vinco Ventures, Inc. and Subsidiaries

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Basis of Presentation and Nature of Operations

The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and with Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (the “SEC”). Accordingly, they do not contain all information and footnotes required by GAAP for annual financial statements. The condensed consolidated financial statements include the accounts of the Company and its wholly-owned and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of June 30, 2021 and the results of operations, changes in stockholders’ equity, and cash flows for the periods presented. The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of the operating results for the full fiscal year for any future period.

These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. The Company’s accounting policies are described in the Notes to Consolidated Financial Statements in its Annual Report on Form 10-K for the year ended December 31, 2020, and updated, as necessary, in this Quarterly Report on Form 10-Q.

As used herein, the terms the “Company,” “Vinco Ventures” “we,” “us,” “our” and similar refer to Vinco Ventures, Inc. (f/k/a Edison Nation, Inc.), a Nevada corporation incorporated on July 18, 2017 under the laws of the State of Nevada as Idea Lab X Products, Inc. and also formerly known as Xspand Products Lab, Inc. prior to its name change on September 12, 2018, and/or its wholly-owned and majority-owned operating subsidiaries. On November 5, 2020, the Company (the “Parent”) and its wholly owned subsidiary, Vinco Ventures, Inc. (the “Merger Sub”), entered into an Agreement and Plan of Merger (the “Agreement”). Under the terms of the Agreement, the Merger Sub merged with and into the Parent and the Parent became the surviving corporation of the Merger (the “Surviving Corporation”). The name of the Surviving Corporation became Vinco Ventures, Inc. The transaction closed on November 10, 2020.

Vinco Ventures is a vertically-integrated, end-to-end, consumer product research & development, manufacturing, sales and fulfillment company. The Company’s proprietary web-enabled platform provides a low risk, high reward platform and process to connect innovators of new product ideas with potential licensees.

As of June 30, 2021, Vinco Ventures had eight wholly-owned subsidiaries: TBD Safety, LLC (“TBD”), Vinco Ventures Shared Services LLC (“Vinco Shared”), Ferguson Containers, Inc. (“Fergco”), CBAV1, LLC (“CB1”), Pirasta, LLC (“Pirasta”), Honey Badger Media LLC (“Honey Badger”), EVNT Platform LLC (“Emmersive Entertainment”) and Edison Nation Holdings, LLC. Vinco Ventures owns 50% of Best Party Concepts, LLC and Global Clean Solutions, LLC, all of which are consolidated as VIE’s with noncontrolling interests. Edison Nation Holdings, LLC is the single member of Edison Nation, LLC and Everyday Edisons, LLC. Edison Nation, LLC is the single member of Safe TV Shop, LLC.

In April 2021, the Company agreed to unwind the joint venture of Ed Roses, LLC and recognized a loss of $301,645.

Liquidity

For the six months ended June 30, 2021, our operations lost approximately $15,720,129, of which approximately $11,085,000 was non-cash and approximately $1,428,000 was related to transaction costs and other non-recurring items.

At June 30, 2021, we had total current assets of approximately $80,620,757 and current liabilities of approximately $8,829,464 resulting in working capital of approximately $71,791,293, of which $3,333,333 was convertible notes payable. At June 30, 2021, we had total assets of $121,276,499 and total liabilities of $148,820,211, of which 139,695,115 related to the warrant liabilities, resulting in stockholders’ deficit of $27,543,712.

The Company believes it has sufficient cash for at least the next twelve months from the date of issuance of these condensed financial statements. The ability to continue as a going concern is dependent upon the Company’s ability to attract significant new sources of capital, attain a reasonable threshold of operating efficiencies and achieve profitable operations from the sale of its products.

Our operating needs include the planned costs to operate our business, including amounts required to fund working capital and capital expenditures. Our future capital requirements and the adequacy of our available funds will depend on many factors, including our ability to successfully commercialize our products and services, competing technological and market developments, and the need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement our product and service offerings.

Vinco Ventures, Inc. and Subsidiaries

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 2 — Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of Vinco Ventures, Inc. and its wholly-owned and majority owned subsidiaries. All intercompany balances and transactions have been eliminated.

Reclassifications

Certain amounts previously presented in the consolidated financial statements have been reclassified to conform to the current year presentation. Such reclassifications had no effect on the previously reported net loss, Stockholders’ equity or cash flows.

Use of Estimates

Preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, together with amounts disclosed in the related notes to the financial statements.

The Company’s significant estimates used in these financial statements include, but are not limited to, accounts receivable reserves, the valuation allowance related to the Company’s deferred tax assets, the recoverability and useful lives of long-lived assets, debt conversion features, stock-based compensation, certain assumptions related to the valuation of the reserved shares and the assets acquired and liabilities assumed related to the Company’s acquisitions. Certain of the Company’s estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is reasonably possible that these external factors could have an effect on the Company’s estimates and could cause actual results to differ from those estimates.

Discontinued Operations

A component of an entity that is disposed of by sale or abandonment is reported as discontinued operations if the transaction represents a strategic shift that will have a major effect on an entity’s operations and financial results. The results of discontinued operations are aggregated and presented separately in the Consolidated Statement of Operations. Assets and liabilities of the discontinued operations are aggregated and reported separately as assets and liabilities of discontinued operations in the Consolidated Balance Sheet, including the comparative prior year period. The Company’s cash flows are reflected as cash flows from discontinued operations within the Company’s Consolidated Statements of Cash Flows for each period presented.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents in the consolidated financial statements.

Vinco Ventures, Inc. and Subsidiaries

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 2 — Summary of Significant Accounting Policies — (Continued)

The Company has cash on deposit in several financial institutions which, at times, may be in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The Company has not experienced losses in such accounts and periodically evaluates the creditworthiness of its financial institutions. The Company reduces its credit risk by placing its cash and cash equivalents with major financial institutions. The Company had approximately $74,756,573 of cash and cash equivalents at June 30, 2021 of which none was held in foreign bank accounts not covered by FDIC insurance limits as of June 30, 2021.

Accounts Receivable

Accounts receivable are carried at their contractual amounts, less an estimate for uncollectible amounts. Management estimates the allowance for bad debts based on existing economic conditions, historical experience, the financial conditions of the customers, and the amount and age of past due accounts. Receivables are considered past due if full payment is not received by the contractual due date. Past due accounts are generally written off against the allowance for bad debts only after all collection attempts have been exhausted.

No customers represented more than 10% of total accounts receivable.

Inventory

Inventory is recorded at the lower of cost or net realizable value on a first-in, first-out basis. The Company reduces the carrying value of inventories for those items that are potentially excess, obsolete, or slow moving based on changes in customer demand, technology developments, or other economic factors.

Short-Term Investments

Short-term investments consisted of equity securities. The Company classified its investments as trading securities. Accordingly, such investments were reported at fair market value, with the resultant unrealized gains and losses reported as a component of the consolidated statements of operations. Fair value for trading securities was determined by reference to quoted market prices.

Property and Equipment, Net

Property and equipment are stated at cost, net of accumulated depreciation and amortization, which is recorded commencing at the in-service date using the straight-line method over the estimated useful lives of the assets, as follows: 3 to 5 years for office equipment, 5 to 7 years for furniture and fixtures, 6 to 10 years for machinery and equipment, 10 to 15 years for building improvements, 5 years for software, 5 years for molds, 5 to 7 years for vehicles and 40 years for buildings.

Equity Method Investments

We apply the equity method of accounting to investments when we have significant influence, but not controlling interest in the investee. Judgment regarding the level of influence over each equity method investment includes considering key factors such as ownership interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions. The Company’s proportionate share of the net income (loss) resulting from these investments will be reported under a line-item captioned equity method investment income in our Consolidated Statements of Operations. The carrying value of our equity method investments is reported in equity method investments in the Consolidated Balance Sheets. The Company’s equity method investments are reported at cost and adjusted each period for the Company’s share of the investee’s income or loss and dividend paid, if any. The Company classifies distributions received from equity-method investments using the cumulative earnings approach on the Consolidated Statements of Cash Flows. The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable. The Company did not record any impairments related to its investments in 2021. For the six months ended June 30, 2021, there was no income or loss.

Revenue Recognition

Generally, the Company considers all revenues as arising from contracts with customers. Revenue is recognized based on the five-step process outlined in the Accounting Standards Codification (“ASC”) 606:

Step 1 – Identify the Contract with the Customer – A contract exists when (a) the parties to the contract have approved the contract and are committed to perform their respective obligations, (b) the entity can identify each party’s rights regarding the goods or services to be transferred, (c) the entity can identify the payment terms for the goods or services to be transferred, (d) the contract has commercial substance and it is probable that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.

Vinco Ventures, Inc. and Subsidiaries

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 2 — Summary of Significant Accounting Policies — (Continued)

Step 2 – Identify Performance Obligations in the Contract – Upon execution of a contract, the Company identifies as performance obligations each promise to transfer to the customer either (a) goods or services that are distinct, or (b) a series of distinct goods or services that are substantially the same and have the same pattern of transfer to the customer. To the extent a contract includes multiple promised goods or services, the Company must apply judgement to determine whether the goods or services are capable of being distinct within the context of the contract. If these criteria are not met, the goods or services are accounted for as a combined performance obligation.

Step 3 – Determine the Transaction Price – When (or as) a performance obligation is satisfied, the Company shall recognize as revenue the amount of the transaction price that is allocated to the performance obligation. The contract terms are used to determine the transaction price. Generally, all contracts include fixed consideration. If a contract did include variable consideration, the Company would determine the amount of variable consideration that should be included in the transaction price based on expected value method. Variable consideration would be included in the transaction price, if in the Company’s judgement, it is probable that a significant future reversal of cumulative revenue under the contract would not occur.

Step 4 – Allocate the Transaction Price – After the transaction price has been determined, the next step is to allocate the transaction price to each performance obligation in the contract. If the contract only has one performance obligation, the entire transaction price will be applied to that obligation. If the contract has multiple performance obligations, the transaction price is allocated to the performance obligations based on the relative standalone selling price (SSP) at contract inception.

Step 5 – Satisfaction of the Performance Obligations (and Recognize Revenue) – Revenue is recognized when (or as) goods or services are transferred to a customer. The Company satisfies each of its performance obligations by transferring control of the promised good or service underlying that performance obligation to the customer. Control is the ability to direct the use of and obtain substantially all of the remaining benefits from an asset. It includes the ability to prevent other entities from directing the use of and obtaining the benefits from an asset. Indicators that control has passed to the customer include: a present obligation to pay; physical possession of the asset; legal title; risks and rewards of ownership; and acceptance of the asset(s). Performance obligations can be satisfied at a point in time or over time.

Substantially all of the Company’s revenues continue to be recognized when control of the goods is transferred to the customer, which is upon shipment of the finished goods to the customer. All sales have fixed pricing and there are currently no material variable components included in the Company’s revenue. Additionally, the Company will issue credits for defective merchandise, historically these credits for defective merchandise have not been material.

Disaggregation of Revenue

The Company’s primary revenue streams include the sale and/or licensing of consumer goods and packaging materials for innovative products. The Company’s licensing business is not material and has not been separately disaggregated for segment purposes. The Company’s disaggregated revenues for the three and six months ended June 30, 2021 and 2020 was as follows:

Schedule of Disaggregation of Revenue

For the Three Months

Ended June 30,

For the Six Months

Ended June 30,

2021

2020

2021

2020

Revenues:

Product sales

2,626,689

5,123,067