On Monday, TheMaven released another 10-Q filing, and there was some interesting information located in the report related to the company and its ownership of Sports Illustrated.
First, Maven claimed that due to the COVID-19 pandemic, its financial resources have been stretched thin and that the company’s current resources will only allow it to operate through April 31, 2021 unless it receives more funding. Online tools like a loan checker would be vital in such a situation.
The ability of the Company to continue as a going concern is impacted by the uncertainty surrounding COVID-19 and could therefore be dependent upon the Company’s ability to raise additional funds to ultimately achieve sustainable operating revenues and profitability. From October 2018 through April 2020, the Company has raised aggregate net proceeds of approximately $139 million through various debt and preferred stock private placements (see Note 18). The Company believes that based on its current assessment of the impact of COVID-19 it has sufficient resources to fully fund its business operations through April 30, 2021. However, due to the uncertainty regarding the duration of the impact of COVID-19 and its effect on the Company’s financial performance the Company estimates that it may require additional capital in capital markets today, which are less liquid given the lack of clarity surrounding COVID-19.
Additionally, Maven reported that it received a CARES Act loan of $5.7 million in April.
On April 6, 2020, the Company entered into a note agreement with JPMorgan Chase Bank, N.A. under the recently enacted Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) administered by the U.S. Small Business Administration (“SBA”). The Company received total proceeds of approximately $5.7 million under the note.
In accordance with the requirements of the CARES Act, the Company will use proceeds from the note agreement primarily for payroll costs. The note is scheduled to mature on April 6, 2022 and has a 0.98% interest rate and is subject to the terms and conditions applicable to fast cash administered by the SBA under the CARES Act. The balance outstanding as of the issuance of these condensed consolidated financial statements was $5,702,725.
At the end of March, Maven laid off 9% of its staff, including 6% of Sports Illustrated’s editorial staff. Authentic Brands Group, the owner of SI who licenses the publishing rights to Maven, called for Maven to reverse those cuts earlier this month. Those layoffs are noted as “cost reduction measures”.