Note 17 — Subsequent Events

July 6, 2022 Alternative Exercise of Hudson Bay Warrants and Cash Payment and Postponement of Annual Meeting

On June 30, 2022, the Company postponed its special stockholder meeting from July 1, 2022 to July 26, 2022 which was subsequently postponed again to August 23, 2022 and then postponed indefinitely. This meeting was to be held to approve various proposals including amending the Company’s Amended and Restated Articles of Incorporation to increase the number of its authorized shares of common stock from 250,000,000 to 750,000,000. The postponement of the meeting triggered an alternative exercise notice clause in the Company’s November and December 2021 warrants, as amended, which allows the holder to put the warrants back to the Company in exchange for cash payments of $0.65 and $0.36 per warrant for the November and December 2021 warrants, respectively. The Holder exercised this provision in July 2022 resulting in a cash payment of $33,886,612 and cancelation of 82,260,699 warrants. Additionally, per the terms of the amended July 2021 convertible note the Company made a cash payment of $33,000,000.

On August 18, 2022, the Company entered into a Purchase Agreement, in which it agreed to repurchase $55,000,000 of the principal amount of the note then outstanding for $65,000,000. The Company was permitted to release up to $70,000,000 from Restricted Cash, provided that $65,000,000 of the amount was wired directly from the Control Account to the Holder of the note as payment.

Business Changes

On July 22, 2022, the Company entered into one of two anticipate software license agreements with its strategic partner, AI-Pros Inc. (“AI-Pros”). The license provides Vinco the right to use AI-Pros’ tools and technologies, which could allow Vinco to participate in a social media platform that it believes can significantly enhance its position in the digital advertising markets.

The Company is in the process of terminating the software licensing agreements with AI-Pros.

Litigation and Management Changes

On August 5, 2022, Vinco Ventures, Inc. was subject to a Temporary Restraining Order (“TRO”) filed in the State of Nevada. The TRO outlined various management disputes between existing members of the Board of Directors and members of executive management. On September 28, 2022, the Company entered into a settlement agreement (the “Agreement”) with respect to the litigation entitled “Vinco Ventures, Inc. v. Theodore Farnsworth, Lisa King, Roderick Vanderbilt and Erik Noble” in the Eight Judicial District Court located in Clark County, Nevada. The Agreement set forth the following, among other things (a) Ross Miller is the interim sole CEO and shall run the Company under the oversight of the Company’s Board of Directors, with Lisa King and Rod Vanderbilt remaining as directors, (b) John Colucci, former Co-CEO and Phillip Jones, former CFO, both resigned effective immediately as officers and director (in the case of Colucci) of the Company, (c) Michael Distasio and Elliot Goldstein resigned effective immediately as Directors of the Company, (e) John Colucci received three month’s severance and Phillip Jones received four month’s severance, in addition to any accrued and unpaid payroll, (f) The Company shall pay six months’ worth of COBRA payments for Jones, (g) All directors are to be paid all director fees due to the date of severance, (h) Elliot Goldstein is to be paid $100,000 in lieu to any matters related to his stock options and RSUs, (i) All outgoing directors and officers entered into three year noncompete agreements with the Company, and (j) All parties entered into mutual releases with the Company.

On October 26, 2022, the Company entered into an engagement agreement with Ankura Consulting Group for interim CFO services, with Brendan Bosack, one of its principals, named as Interim CFO of the Company. The agreement calls for services to be rendered at $900 per hour up to $30,000 per week. The agreement is for an indefinite term and cancellable by either party.

Effective December 12, 2022, the Board of Directors of the Company unanimously approved the following:

From the date of court appointment, August 19, 2022 through December 12, 2022, executive compensation paid to Ross Miller, interim Chief Executive Officer totaled $210,000; executive compensation paid to Gabe Hunterton totaled $135,000, and disbursements totaling $163,525 were made to advisors to Ross Miller.

Impairment Charges

Subsequent to June 30, 2022, the Company determined that a triggering event had occurred due various management disputes between existing members of the Board of Directors and members of executive management and the receipt of an Alternative Exercise from Hudson Bay, and Amendment to the July 2021 Note. Taken in conjunction with the resulting Going Concern, the Company abandoned its product business. Our consumer products business was led by Edison Nation. Edison Nation had a number of internally developed brands (“EN Brands”). These EN Brands included Cloud B, Pirasta, Uber Mom, Lily and Grey, Trillion Trees, and Barkley Lane. We impaired the related intangible assets in the third quarter, which included customer relationships, developed technology, membership network and trademarks of $3,747,349 (net of amortization) and goodwill of $4,938,674 associated with this business.

In addition, with the spinoff of Cryptyde, there was a change in how the Company planned to utilize the EVNT platform from its acquisition. Management made the determination that it was no longer interested in continuing to operate and profit from E-NFT. The developed technology intangible asset for the EVNT platform of $6,607,989 (net of amortization) was fully impaired at September 30, 2022.

Further we performed a quantitative impairment test for both the remaining goodwill and intangible assets of the remaining business, Lomotif and AdRizer and recorded an estimated impairment charge of $96,901,960 and $16,546,760 respectively in the third quarter.

ZASH Global Media Equity Transaction

On December 19, 2022, the Vinco Ventures, Inc. entered into a material definitive agreement to complete the purchase of the membership interests (“Membership Interests”) in ZVV Media Partners from ZASH Global Media. The purchase price shall be (a) 10 shares of Vinco Ventures, Inc.’s Series B Preferred Stock (which shall be convertible into 144 million common shares of ZVV Media Partners, for which issuance will be subject to Nasdaq rules) and for which a Certificate of Designation was to be filed in the State of Nevada before December 21, 2022 (and will be issued in the near future), was subject to approval of both ZVV Media Partners and ZASH Global Media and compliance with all Nasdaq and SEC compliance (“Purchase Equity”), and (b) the deemed satisfaction of all outstanding indebtedness and other obligations owing from ZASH Global Media to ZVV Media Partners or the ZVV Media Partners, including, without limitation, pursuant to (i) the Promissory Note issued by ZASH Global Media to ZVV Media Partners dated February 18, 2021 in the original principal amount of $5,000,000, and (ii) the Secured Promissory Note issued by ZASH Global Media to Vinco Ventures, Inc. dated June 29, 2022 in the original principal amount of $56,955,168. Vinco Ventures, Inc. shall issue the Purchase Equity to ZASH Global Media at the Closing (as defined herein) or such later time as agreed by the Parties in writing.

Nasdaq

On August 26, 2022, the Company filed a Current Report on Form 8-K in which it disclosed that it had received notification from Nasdaq that required the Company to submit to Nasdaq, on or before October 17, 2022, a Plan of Compliance with regard to the filing of its Quarterly Report on Form 10-Q for the period ended June 30, 2022. The Plan of Compliance was submitted as of October 17, 2022. This 10-Q and the subsequent third quarter 10-Q satisfy the Plan.

As a result of a delinquency notice received with respect to the Company’s as yet filed 10-Q for the quarter ended June 30, 2022, the Company submitted a plan of compliance to file the second quarter 10-Q and the third quarter 10-Q no later than February 13, 2023. The Company submitted an update to this plan of compliance to Nasdaq confirming the above referenced timetable. The Company was unable to file the Form 10-Q for period ending September 30, 2022 by February 13, 2023.

On November 17, 2022, the Company received a notice (the “November Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market, LLC (“Nasdaq”) advising the Company that it was not in compliance with Nasdaq’s continued listing requirements under the Nasdaq Listing Rule 5250(c)(1) (“Rule 5250”) as a result of the Company’s failure to file its Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 (“Form 10-Q”) with the United States SEC in a timely manner, which deadline was November 14, 2022. Rule 5250 requires listed companies to timely file all required periodic reports with the SEC.

On December 1, 2022, the Company received a notice (“December Notice”) from the Listing Qualifications Department of Nasdaq advising the Company that it was not in compliance with Nasdaq’s continued listing requirements under the Nasdaq Listing Rule 5550(a)(2) (“Rule 5550”) as a result of requiring listed securities to maintain a minimum bid price of $1 per share. Based upon the closing bid price for the last 30 consecutive business days, the Company no longer meets this requirement. However, Rule 5550 also provides the Company a compliance period of 180 calendar days in which to regain compliance. If at any time during this 180 day period the closing bid price of the Company’s security is at least $1 for a minimum of ten consecutive business days, Nasdaq will provide written confirmation of compliance and this matter will be closed.

On February 14, 2023, the Company received a Staff Determination letter (the “Letter”) from Nasdaq. The Letter states that on August 19 and November 17, 2022, Staff notified the Company that it did not comply with Nasdaq’s filing requirements set forth in Listing Rule 5250(c)(1) (the “Rule”) because it had not filed its Form 10-Q for the period ended June 30, 2022, and its Form 10-Q for the period ended September 30, 2022 (the “Delinquent Filings”). Staff granted the Company an exception until January 31, 2023, to regain compliance with the Rule. Subsequently, on January 26, 2023, the Company requested additional time to file the Delinquent Filings and Staff granted the Company an exception until February 13, 2023, to regain compliance with the Rule.

Upon further review, Staff determined that the Company did not meet the terms of the exception because it had not filed the Delinquent Filings by February 13, 2023. The Company will appeal Staff’s determination to a Hearings Panel (the “Panel”), pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 Series. A hearing request will stay the suspension of the Company’s securities and the filing of the Form 25-NSE pending the Panel’s decision. The Company filed a hearing request and remitted the hearing filing fee prior to February 17, 2023.

Equity Changes

On October 14, 2022, the Company filed an amendment to its Articles of Incorporation to reallocate its previously authorized 250 million shares of stock as 245 million shares of Common Stock and 5 million shares of Preferred Stock, which Preferred Stock may be issued upon the subsequent filing with the Nevada Secretary of State of one or more certificates of designation for series of preferred stock. It subsequently amended the filing to be 249 million shares of Common Stock and 1 million shares of Preferred Stock.

Acquisition of National Enquirer

On February 6, 2023, the Company entered into a joint venture with ICON Publishing, LLC to acquire in cash the National Enquirer (both U.S. and U.K. editions), the National Examiner, and Globe under an Asset Purchase Agreement from magazine publisher a360 Media, LLC. The transaction includes the acquisition of all print and digital assets and owned intellectual property of the National Enquirer, National Examiner and Globe. The closing of the acquisition is subject to certain consents and customary conditions to closing as described in the Asset Purchase Agreement.

Securities Purchase Agreement

On February 5, 2023, the Company has entered into a Securities Purchase Agreement for the purchase of a $1,500,000 principal amount convertible note, a $10,000,000 principal amount convertible note and shares of Series A perpetual non-convertible preferred stock of the Company designated as Series A Preferred Stock, $0.001 par value. The $10,000,000 proceeds from the purchase of the $10,000,000 note shall be held in a DACA account and is redeemable by the investors when certain conditions are met, and the $1,500,000 note shall be convertible by the investors pursuant to the term set forth therein. The note shall be convertible into Company common stock at an initial conversion price of $0.7831, representing 110% of the closing price of the Common Stock on February 3, 2023. Each investor herein shall have $2 million of the $10 million note and $300,000 of the $1.5 million note (for each investor’s portion of both notes, convertible initially into 2,937,046 shares in the aggregate).

Each holder of outstanding share of Series A Preferred Stock will have the voting rights to vote together with the class of stockholders of Common Stock, as a single class, upon any matter submitted to the stockholders of Common Stock for a vote as of a record date established by the Board of Directors of the Company. For so long as any Series A shares remain issued and outstanding, the holders of each share shall have the right to vote, in an amount equal to one percent (1%) of the total voting power of then-outstanding shares of Common Stock of the Company entitled to vote in such class, calculated as provided herein.

The Company closed the transaction on February 10, 2023.

Exchange Agreement

On February 5, 2023, the Company entered into an Exchange Agreement with a Holder pursuant to which the Company and the Holder desire: (i) to exchange $250,000 aggregate principal amount of that certain convertible secured Note issued to the Holder on July 22, 2021 (the “July Note”) for an aggregate of 26,000,000 shares of Common Stock and (ii) to amend the July Note as set forth herein. On the Initial Closing Date, $105,000 aggregate principal amount of the July Note was exchanged into 10,800,000 shares of Common Stock and on the first (1st) trading day immediately following the date on which the Company amends its Articles of Incorporation to increase the authorized shares of the Company, $145,000 aggregate principal amount of the July Note shall be exchanged into 15,200,000 shares of Common Stock.

The Company and the Holder agreed that Section 2 of the July Note is amended and restated to be non interest bearing except if there is an event of default at which time the interest rate shall be 18%, and the minimum cash on deposit in the Control Account shall not be less than $3,000,000. The conversion price of the July Note was voluntarily and irrevocably reduced to $0.7831.

On February 10, 2022, the Holder released $4,000,000 from the Control Account to the Company. Up to another $3 million shall be released over future time periods if certain conditions are met.