VINCO VENTURES : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. (form 10-Q)

Overview

Vinco Ventures: End-to-end product innovation, development and commercialization

Our Company was incorporated on July 18, 2017 in the State of Nevada under the
name of Idea Lab X Products, Inc, On September 12, 2017, we filed an Amendment
to our Articles of Incorporation changing the name to Xspand Products Lab, Inc.,
and then on September 7, 2018 we filed an Amendment to our Articles of
Incorporation changing the name to Edison Nation, Inc. 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, Inc. seeks to be involved with every step of the consumer
product life cycle - from ideation, to research and development, manufacturing,
sales, packaging and fulfillment. The Company also seeks to raise awareness of
the Vinco Ventures brand name as a diversified consumer products business
through a number of media channels.



The first stage of development for any consumer product is the impetus to turn
an idea into a salable commodity. Considered to be the "go-to" resource for
independent innovators with great consumer product invention ideas, Vinco
Ventures through its Edison Nation web portal maintains a consumer-facing online
presence whereby innovators can submit ideas for consideration by us. If an idea
is successfully chosen, Vinco Ventures will apply its proprietary, web-enabled
new product development ("NPD") and commercialization platform that can take a
product from idea through final e-commerce sale. Vinco Ventures presently
engages with over 180,000 registered online innovators and entrepreneurs
interested in accessing the Company's NPD platform to bring innovative, new
products to market focusing on high-interest, high-velocity consumer categories.
The Company generates revenue from its web presence by charging a fee for each
idea submission, and also through subscription-based plans for innovators that
wish to submit high volumes of ideas.



Since its inception, the Edison Nation web portal has received over 200,000 idea
submissions, with products selling in excess of $250 million at retail through
the management of over 300 client product campaigns with distribution across
diverse channels including e-commerce, mass merchandisers, specialty product
chains, entertainment venues, national drug chains, and tele-shopping. These
clients include many of the largest manufacturers and retailers in the world
including Amazon, Bed Bath and Beyond, HSN, Rite Aid, P&G, and Black & Decker.
The Company generates revenue from licensing agreements with such manufacturers
and retailers. Such agreements are entered into when innovators submit their
ideas through Vinco Ventures' web portal. Occasionally, the Company also
generates revenue from innovators that wish to use the Company's product
development resources, but license or distribute products themselves.



Vinco Ventures has a number of internally developed brands ("EN Brands") which
act as a launchpad for new innovative items that have matriculated through the
innovation portal. These EN Brands include Cloud B, Pirasta, Uber Mom, Lily and
Grey, Trillion Trees, and Barkley Lane. Additionally, the Company offers a
partnership model for entrepreneurs and businesses that are seeking to elevate
their existing brands. Recent partnerships for Vinco Ventures include 4Keeps
Roses and Mother K. Within the partnership model, the Company seeks to identify
new lines of distribution and provide innovation through development of new item
that enhance the brands overall image and consumer adoption.



Once most consumer products are ideated, developed, manufactured, and possibly
even licensed, they must be packaged and distributed. Currently, we maintain a
logistics center in Clearwater, Florida. The Company generates revenue from the
sale of custom packaging for many of the products that have run through our NPD
or in-house product development process. The Company also sells packaging
products to a number of other entities that are not related to the Company's
product development process, including pharmaceutical and e-commerce companies.
For packaging products, the Company does not have long-term agreements with
customers, and instead manufactures and sells its packaging products subject to
purchase orders from its customers.



Once a product is ready for distribution, consumer awareness must be raised in
order to sell the product. Accordingly, the Company has begun to pursue a media
strategy. First, the Company is seeking to re-release episodes of the 'Everyday
Edisons' television program, while simultaneously seeking a distribution partner
for forthcoming episodes. The Company intends to generate revenue from the
Everyday Edisons brand by entering into a contract with a broadcast network or
online streaming service. The Company is seeking to expand its web presence by
acquiring or creating other innovator-facing internet media properties. The
Company intends to generate revenue from such internet media through the display
of paid advertisements on its properties.



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Market Strategy



The process for developing and launching consumer products has changed
significantly in recent years. Previously, Fortune 500 and other companies
maintained multimillion-dollar research and development divisions to develop and
launch products to be sold primarily on retail shelves and supported by large
television and print advertising investment. The emergence of e-commerce giants,
including Amazon.com, has caused retail shelf space to no longer be a
requirement to launch a new product. Crowdfunding sites like Kickstarter enable
solo entrepreneurs to inexpensively produce an advertising video and quickly
introduce a new product to millions of potential customers, and to quickly gain
those customers for a low cost of acquisition relative to the cost and time
required in prior years as expensive traditional advertising investment is no
longer required to gain market awareness. For example, according to
Statista.com, crowdfunded sales of products will exceed $18.9 billion in 2021.
The consumer shift away from brick and mortar retailers toward e-commerce has
resulted in the bankruptcy or downsizing of many iconic retailers which sold
toys, including Toys R Us, Sears, Kmart, and K-B Toys, with the resultant loss
in shelf space and available locations helping to drive our market opportunity.
By utilizing the opportunities to market products over the internet, rather than
through traditional, commercial channels, we believe we can reach a much broader
market for our brands and products.

Leveraging Evolving Market Opportunities for Growth

The Company believes that its anticipated growth will be driven by six macroeconomic factors:

    ?   The significant growth of ecommerce (Up 32.4% in 2020 versus 2019
        (eMarketer 2020));

    ?   The increasing velocity of "brick and mortar" retail closures;

? Product innovation and immediate delivery gratification driving consumer

desire for next-generation products with distinctive sets of features and

        benefits without a reliance on brand awareness and familiarity;

    ?   The marriage of media-based entertainment and consumer goods

? The rapid adoption of crowdsourcing to expedite successful new product

launches; and

? The opportunity to market products over the internet and television,

        rather than through traditional, commercial channels, to reach a much
        broader, higher qualified target market for brands, and products.




In addition, we intend to acquire more small brands that have achieved
approximately $1 million in retail sales over the trailing twelve-month period
with a track record of generating free cash flow. By leveraging our expertise in
helping companies launch thousands of new products and our ability to create
unique, customized packaging, we will seek to elevate the value of these
acquired brands by improving each part of their launch process, based on our own
marketing methodologies.



We believe our acquisition strategy will allow us to acquire small brands using
a combination of shares of our common stock, cash and other consideration, such
as earn-outs. We intend to use our acquisition strategy in order to acquire up
to ten or more small brands per year for the next three years. In situations
where we deem that a brand is not a "fit" for acquisition or partnership, we may
provide the brand with certain manufacturing or consulting services that will
assist the brand to achieve its goals.



On November 30, 2020, the Company and its wholly owned subsidiary, SRM
Entertainment, LTD entered into a Stock Exchange Agreement with Jupiter
Wellness, Inc. ("Jupiter"). Under the terms of the Exchange Agreement, Jupiter
agreed to purchase all outstanding shares of common stock (the "Exchange
Shares") issued by SRM from the Company. As consideration for the purchase of
the Exchange Shares, Jupiter issued the Company 200,000 shares of its restricted
common stock, symbol JUPW as listed on NASDAQ Capital Markets. The Company made
the decision to divest the amusement park business due to the slow re-openings
of amusement parks around the world and the investment that would have been
needed to remain open and the investment required to relaunch as the amusement
parks begin to get back to full capacity. Please see Note 15 - Discontinued
Operations for further information.



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One Company Initiative



During 2020, the Company had three distinct business units, which allows the
Company to focus on growing sales and leveraging operations. The units consist
of:



? Innovate. The Vinco Ventures New Product Development ("NPD") platform helps
inventors go from idea to reality. This is accomplished by optimizing the
Company's new product election process through deeper analytics to predict
success on platforms like crowdfunding and web marketplaces like Amazon. The
Company drives brand awareness of the platform by producing content for
inventors and innovators on media platforms including our own Everyday Edison's
television show.



? Build and Launch. Distributed by geography, industry skillset and expertise in
the development process to ensure efficient product build and launch our teams
of product designers and developers take the product from the concept to the
consumers' hand. The bulk of the Company's operations are part of this business
unit, and the Company will continue to develop this unit to meet the needs

of
our product launch schedule.



? Sell. Our omni-channel sales effort is divided into three groups: (1)
business-to-business revenue opportunities including traditional brick and
mortar retailers, (2) online marketplaces and direct-to-consumer revenue
opportunities, and (3) our NiTRO Team (Near Term Revenue Opportunities). NiTRO,
identifies brands and products lines that would benefit from being part of

Vinco
Ventures.



In November 2020, in connection with the name change and startup of Honey
Badger, the Company set a path for new key fundamentals in their strategy. Vinco
Ventures, Inc. plans to leverage the new market opportunity by utilizing their
B.I.G. Strategy: Buy. Innovate. Grow.

? Buy. Acquisitions is our model. We will seek to acquire significant brands to continue to add to the Portfolio.

? Innovate. - Leverage the internal traffic platforms of Honey Badger, our
brands are able to quickly innovate and determine the highest conversion traffic
and target accordingly. Once identified, we scale while maintaining conversions
for success.

? Grow. More targeted traffic equals more conversions. With our internal engines, we are able to expedite growth of our acquired brands to reach their target numbers quicker.

Innovate: The Vinco Ventures New Product Development & Commercialization Platform

New product ideas have little value without the ability and skill required to
commercialize them. The considerable investment and executional "know how"
needed to initiate a process - from idea to product distribution - has always
been a challenge for the individual innovator. Vinco Ventures' web presence is
designed to take advantage of online marketplace and crowdfunding momentum for
our future growth mitigating new product development risk while allowing for
optimized product monetization based on a product's likelihood to succeed. To
that end, Vinco Ventures empowers and enables innovators and entrepreneurs to
develop and launch products, gain consumer adoption and achieve commercial scale
efficiently at little to no cost.



The cornerstone of Vinco Ventures' competitive advantage is its NPD platform,
which is designed to optimize product licensing and commercialization through
best-in-class digital technologies, sourcing / manufacturing expertise and one
of the largest sets of go-to-market solutions. The NPD platform can take a
product from idea through ecommerce final sale in a matter of months versus a
year or more for capital intensive and inefficient new product development
protocols traditionally used by legacy manufacturers serving "big box"
retailers.

Product Submission Aggregation

Interested innovators enter the Vinco Ventures web site to register for a free
account by providing their name and email address. The member then creates a
username and password to use on the site. Once registered, the member is
provided with their own unique, password protected dashboard by which they can
begin submitting ideas and join online member forums to learn about industry
trends, common questions, engage in member chats, and stay informed of the
latest happenings at Vinco Ventures. They can also track the review progress of
ideas they submit through their dashboard.



Vinco Ventures accepts ideas through a secure online submission process. Once a
member explores the active searches in different product categories being run on
the platform for potential licensees seeking new product ideas to be
commercialized, the member can submit their new product ideas for processing.
Vinco Ventures regularly works with different companies and retailers in various
product categories to help them find new product ideas.

Registered members pay $25 to submit an idea. This submission fee covers a portion of the cost to review each idea submitted to the platform. There are no additional fees after the submission fee.

Although the platform might not have an active search that matches the innovator's idea, the Vinco Ventures licensing team hosts an ongoing search for new consumer product ideas in all categories.

"Insider Membership" is Vinco Ventures' premium level of membership. Members
that are insiders ("Insiders") receive feedback on all their ideas submitted and
gain access to online features that aren't available to registered members. In
addition, Insiders pay $20 for each idea submitted (20% discount vs. a
registered member), can opt-in ideas for free, as well as receive other
benefits. An annual membership costs $99, or $9.25 / month automatically debited
from a credit card each month. Also included online is feedback to the innovator
on the status of each stage of the process and notification when ideas are not
selected to move forward during any stage in the review process.



Insiders also have access to the Insider Licensing Program (the "ILP"). The
primary benefit of the ILP is having the Vinco Ventures licensing team working
directly on an innovator's behalf to help secure a licensing agreement with one
of the company's manufacturing partners. If an idea is selected for
commercialization by a retail partner, Vinco Ventures will invest in any
necessary patent applications, filings and maintenance. The innovator's name is
included on any patent or patent application that Vinco Ventures files on the
member's behalf after the idea has been selected.



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In addition to the above member programs, Vinco Ventures ASOTV ("As Seen on TV")
Team hosts a search for new products suitable for marketing via DRTV ("Direct
Response TV") and subsequent distribution in national retail chains including
mass merchandisers, specialty retail, drug chains and department stores.



Product Submission Review



Led by the Company's licensing team (which has over 150 years of combined
experience in a variety of industries and product categories), all ideas
submitted by innovators through the Company's website are reviewed and assessed
through an 8-stage process. Vinco Ventures' product idea review process is
confidential with non-disclosure agreements executed with every participating
registered or "Insider" member.



                               [[Image Removed]]



The NPD platform's database of over 85,000 product ideas helps determine which
inventions have a substantial market opportunity quickly through proprietary
algorithms that have been developed incorporating continuous learning from
marketplace experience and changes in category requirements.



Selected ideas are assessed by the licensing team based on nine key factors:
competing products, uniqueness, retail pricing, liability & safety,
marketability, manufacturing cost, patentability, consumer relevant features and
benefits, and commercialization.



The time required to review ideas depends upon different variables, such as: the
number of searches concurrently running on Vinco Ventures platform, idea volume
and complexity of the search, how many presentation dates to licensees are
pending, the date an idea is submitted.



Presentation dates to potential licensees are usually set a few weeks following
the close of the search. After the presentation has been given to a licensing /
retail partner, the partner has 45 days to 6 months to select ideas on which
they will move forward.

The ILP incorporates a four-stage process:

? Stage #1 - Preliminary Review: The licensing team performs a preliminary

review to ensure an invention meets the program criteria. Factors that

might stall an idea from moving forward include: an invention is

cost-prohibitive, has engineering challenges, and/or major players in the

marketplace have already launched products like it. If none of these

apply, an idea will be approved and move on to the preparation phase.

? Stage #2 - Preparation: The licensing team performs a best partner review.

Vinco Ventures' retail and manufacturing contacts are assessed, and the

team begins to plan which licensors would be the best fit for an idea. A

gap analysis and visits the store shelves are executed to gain greater

understanding of marketplace potential.

? Stage #3 - Pitching: At this phase, an idea can become a "Finalist." The

licensing team begins to proactively pitch an idea to potential licensees

using a proprietary presentation system. When a company expresses

interest, the team proceeds into term sheets and negotiations while

staying in constant contact with the prospect until the best possible deal

is struck for the innovator.

? Stage #4 - Outcome: In the end, the market decides what products will be

successful. There are no guarantees. If for some reason Vinco Ventures is

not successful in finding a licensing partner, a complete debrief is given

        to the Insider.




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Due to the public nature of licensing, Vinco Ventures only accepts ideas from
Insiders that are patented or patent-pending. A valid provisional patent
application is required. The cost of submitting an idea to the ILP is $100, and
a member must be an "Insider" to be considered.



The Vinco Ventures ASOTV new product development process follows a six-stage
protocol appropriate for the broadcast-based sales channel. For more information
regarding the ASOTV process, the Vinco Ventures NPD platform, its features and
member benefits, visit https://app.edisonnation.com/faq.

Acquisition of Intellectual Property

Once an innovator's idea is judged to be a potentially viable, commercial product and selected for potential commercialization, the Company acquires intellectual property rights from the innovator.

Once an innovator's intellectual property is secured, the innovator's product
idea can then either be licensed to a manufacturer or retailer or developed and
marketed directly by Vinco Ventures. In either case, Vinco Ventures serves as
the point-of-contact with the innovator for term sheets, royalty negotiation and
concluding licensing agreements. Vinco Ventures also maintains contact with the
innovator to keep them engaged during product development.



In general, innovators are paid a percentage of the Company's revenue from the
commercialization of the innovator's intellectual property. This percentage
varies with the Company's investment in the development of the intellectual
property, including whether the Company decides to license the innovator's idea
for commercialization or instead, to directly develop and market the innovator's
idea.

Build and Launch: Product Design and Development

With product design, product prototyping and creation of marketing assets all resourced with expert Vinco Ventures in-house capabilities, we have made protracted, high-cost, high-risk research and development models obsolete.

Vinco Ventures custom designs most products in-house for specific customers and
their needs. We utilize our existing tooling to produce samples and prototypes
for customer reviews, refinement and approval, as well as our in-house packaging
design and fabrication resources.



The Company's design and product development professionals are dedicated to the
commercialization and marketability of new product concepts advanced through the
company's NPD platform and for licensors / partners like Disney World and
Universal Studios.



No matter the product, Vinco Ventures' objective is to optimize its
marketability, function, value and appearance for the benefit of the consumer
end user. From concept and prototyping, through design-for-manufacture, special
attention is paid to a product's utility, ease of use, lowest cost bill of
materials, and how it "communicates" its features and benefits through design.



The combined experience and expertise of the Company's team spans many
high-demand categories including household items, small appliances, kitchenware,
and toys. The Company's in-house capabilities are complimented by third-party
engineering and prototyping contractors, and category-specific expert resources
within select manufacturers.

Manufacturing, Materials, and Logistics

To provide greater flexibility in the manufacturing and delivery of products,
and as part of a continuing effort to reduce manufacturing costs, Vinco Ventures
has concentrated production of most of the Company's products in third-party
manufacturers located in China and Hong Kong. The Company maintains a fully
staffed Hong Kong office for sourcing, overseeing manufacturing and quality
assurance.

Vinco Ventures utilizes a variety of contracted manufacturing facilities to supply a majority of its products. The Company continues to explore more efficient and expert manufacturing partners to gain greater economies of scale, potential consolidation, and cost savings on an on-going basis.

Products are also purchased from unrelated enterprises with specific expertise in the design, development, and manufacture those specialty products.

We base our production schedules on customer orders and forecasts, considering
historical trends, results of market research, and current market information.
Actual shipments of ordered products and order cancellation rates are affected
by consumer acceptance of product lines, strength of competing products,
marketing strategies of retailers, changes in buying patterns of both retailers
and consumers, and overall economic conditions. Unexpected changes in these
factors could result in a lack of product availability or excess inventory

in a
product line.



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Most of our raw materials are available from numerous suppliers but may be subject to fluctuations in price.

Sell: Paths to Market

Vinco Ventures partners with many of the biggest and most well-known online entities, consumer products companies and retailers. They use the Company's platform as a "think engine" to develop targeted products, significantly reduce research and development expense, and expedite time to market.

Each potential licensee of an innovator's idea publishes an exclusive page on
the Vinco Ventures web site with innovation goals and timeline for their search.
Appropriate new product ideas are submitted in 100% confidence with all
intellectual property safely guarded.

Once the search concludes, Vinco Ventures presents each potential licensee with the best patent protected, or patentable ideas that can be selected for development.

Licensing partners and customers include Amazon, Bed, Bath & Beyond, Church &
Dwight, Black & Decker, HSN, Worthington Industries, Pampered Chef, Boston
America Corp., Walmart, Target, PetSmart, "As Seen on TV," Sunbeam, Home Depot,
and Apothecary Products.

Online Marketplace and Crowdfunding

Vinco Ventures has established a commercialization path to include the
development and management of crowdfunding campaigns. This is evolving to be a
engine for future growth. The benefits of crowdfunding include increased product
testing efficiency, decreased financial risk, and the ability to get closer to
the end consumer, simultaneously.

The ability for consumers to re-order product not only gauges marketplace demand, but it can also be leveraged as a quantitative "proof point" for potential sales to licensees. Most importantly, the money pledged for orders can be used to finance manufacturing and ecommerce launch marketing costs as negative working capital.

Sales, Marketing, and Advertising

Our Omni-channel sales effort is divided into three groups: (1)
business-to-business revenue opportunities including traditional brick and
mortar retailers, (2) online marketplaces and direct-to-consumer revenue
opportunities, and (3) our NiTRO Team (Near Term Revenue Opportunities). NiTRO,
identifies brands and products lines that would benefit from being part of

Vinco
Ventures.

Vinco Ventures' business to business team sells products through a diverse
network of manufacturers, distributors and retailers. New customer prospects are
gained through outbound sales calls, trade show participation, web searches,
referrals from existing customers.

The online team for the company has expertise in selling products on platforms such as the Amazon marketplace as well as portals like Walmart.com and "crowd-funded" websites such as Kickstarter and Indiegogo.

The NiTRO team identifies small, unique brands that could benefit from becoming
part of a larger consumer products organization with more resources. The team
seeks to negotiate a mutually beneficial agreement whereby the respective
branded products become part of Vinco Ventures' portfolio of consumer products.



Media Strategy



In order to expand the Company's universe of registered innovators and
entrepreneurs submitting ideas on the Vinco Ventures NPD web platform, the
Company has entered a global agreement for distribution of two existing
13-episode seasons of the Company's Everyday Edison TV series with a leading
digital media service company. The series will be available in its original
English version as well as voiceover adaptations in German, French, and Spanish.
Distribution is planned for Europe and the Middle East through digital content
providers such as Amazon Prime Video.



Sources of Revenue

The Company aggressively pursues six sources of sales volume:

? Our branded products sold through traditional retail channels of

distribution and other channels of business to business distribution;

? Our branded products sold through direct to consumer platforms such as the

Amazon marketplace as well as portals like Walmart.com;

? Member idea submission and ILP program fees: $25 per submission

(registered members); $20 per submission (Insider members); $100 per

submission (ILP members);

? Licensing agents: We match an innovator's intellectual property with

vertical product category leaders in a licensing structure whereby the

innovator can earn up to 50% of the contracted licensing fee. Product

        categories include kitchenware, small appliances, toys, pet care, baby
        products, health & beauty aids, entertainment venue merchandise, and
        housewares; and

    ?   Product principals: We work with innovators directly, providing such

innovators direct access to all of Vinco Ventures' resources. Depending on

case-by-case factors, innovators may receive a range of up to 35% - 50% of

        profits.




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Market Overview



The process for developing and launching consumer products has changed
significantly in recent years. Previously, Fortune 500 and specialty consumer
product companies funded multimillion-dollar NPD divisions to develop and launch
products. These products were sold primarily on "big box" retail shelves
supported by large marketing investments.



The emergence of ecommerce giants, including Amazon and Walmart.com, has
disrupted traditional NPD and commercialization paths and has accelerated a
consumer shift away from "brick and mortar" retailers. The result has been the
bankruptcy or downsizing of many iconic retailers, including Toys R Us, JC
Penney, Macy's, Sears, Kmart, Office Depot, Family Dollar, and K-B Toys, with a
commensurate loss of shelf space and accessible locations.



Moreover, crowdfunding sites, like Kickstarter and Indiegogo, have also
disrupted NPD process cycles and are now "mainstream." In fact, as of October
2018, Kickstarter's cumulative pledged funding exceeded $3.9 billion according
to Kickstarter published data. Statista.com estimates that crowdfunded sales of
products will exceed $18.9 billion by 2021.



These crowdfunding sites have enabled individual innovators and entrepreneurs to
design, prototype and market unique products to millions of potential customers
with significantly lower acquisition costs when compared to the capital and time
required by legacy NPD processes.



COVID-19



COVID-19 has caused and continues to cause significant loss of life and
disruption to the global economy, including the curtailment of activities by
businesses and consumers in much of the world as governments and others seek to
limit the spread of the disease, and through business and transportation
shutdowns and restrictions on people's movement and congregation.



As a result of the pandemic, we have experienced, and continue to experience,
weakened demand for our traditional products. Many of our customers have been
unable to sell our products in their stores due to government-mandated closures
and have deferred or significantly reduced orders for our products. We expect
these trends to continue until such closures are significantly curtailed or
lifted. In addition, the pandemic has reduced foot traffic in the stores where
our products are sold that remain open, and the global economic impact of the
pandemic has temporarily reduced consumer demand for our products as they focus
on purchasing essential goods.



In the United States and Asia, many of our key accounts remain closed or are
operating at significantly reduced volumes. As a result, we have made the
strategic decision to expand our operations through our Edison Nation Medical
("Ed Med") division. Through Ed Med, the Company wholesales Personal Protective
Equipment ("PPE") products through an online portal for hospitals, government
agencies and distributors.

Given these factors, the Company anticipates that the greatest impact from the
COVID-19 pandemic in fiscal 2020 occurred in the first quarter of 2020 resulting
in a significant net sales decline as compared to the first quarter of 2019.



In addition, certain of our suppliers and the manufacturers of certain of our
products were adversely impacted by COVID-19. As a result, we faced delays or
difficulty sourcing products, which negatively affected our business and
financial results. Even if we are able to find alternate sources for such
products, they may cost more and cause delays in our supply chain, which could
adversely impact our profitability and financial condition.



We have taken actions to protect our employees in response to the pandemic,
including closing our corporate offices and requiring our office employees to
work from home. At our distribution centers, certain practices are in effect to
safeguard workers, including a staggered work schedule, and we are continuing to
monitor direction from local and national governments carefully. Additionally,
our two retail locations have been closed until further notice.



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As a result of the impact of COVID-19 on our financial results, and the anticipated future impact of the pandemic, we implemented cost control measures and cash management actions during 2020, including:

? Furloughing a significant portion of our employees in the first quarter of 2020;

? Implementing 20% salary reductions across our executive team and other members of upper-level management in the first and second quarter of 2020;

? Executing reductions in operating expenses, planned inventory levels and non-product development capital expenditures throughout 2020; and

? Proactively managing working capital, including reducing incoming inventory to align with anticipated sales.

Leveraging Evolving Market Opportunities for Growth

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Competition and Industry Background

In terms of the Company's consumer products business, competition is intensifying due to trends towards shorter life cycles for the development, production and marketability of consumer products. Competition is also intensifying due to the availability of online-only distributors, including Amazon.com, which can promote a wide variety of consumer products and represent a wide variety of manufacturers at low cost and limited overhead.

Vinco Ventures' competitive set includes other online inventor platforms (e.g.,
InventHelp, Quirky, Mako Design + Invent, Davison, and Invention City). Each of
these companies operate different types of business models that combine
different consulting, development and service fees, and royalty structures.



Vinco Ventures was originally founded by the creators of the Emmy Award winning
PBS television show, Everyday Edisons. One of the original founders, Louis
Freeman, is currently a member of the Vinco Ventures board of directors. The
Company's model differs significantly from others in the inventor space in that
it assumes the considerable financial risk, manpower and time required to
monetize a product, from concept selection through sale. A portion of the
commercialized product's net profit is shared with the inventor through a
variety of forms of licensing agreements.



The Company also competes with large manufacturing companies who develop and
commercialize their own products in categories in which Vinco Ventures currently
participates. However, we also are increasing the Company's "co-op-etition"
footprint with companies, like Black & Decker, who not only compete in product
development but also have become active "cooperative" participants on the Vinco
Ventures online innovation platform.



Customers



We sell our products to a diverse network of customers. Domestically, we sell
our products to specialty retailers, mass-market retailers and e-commerce sites.
Internationally, we sell our products directly to similar retailers and
distributors.

One customer represented 14% and 11% of our revenues for the three months ended March 31, 2021 and 2020, respectively.

Intellectual Property



We believe that Vinco Ventures' intellectual property rights have significant
value in the marketplace, and that in order to maintain a competitive advantage
in the marketplace, that we must continue to develop and maintain the
proprietary aspects of our technologies. We rely on a combination of patent,
trademark, trade secret, copyright and other intellectual property rights and
measures to protect our intellectual property.



We seek protection on our products in as many countries as practical, through
registered trademarks, copyrights and patents to the extent that such protection
is available, cost effective and valuable to our products and brands. We also
rely on other forms of intellectual property rights and measures, including
trade secrets and nondisclosure agreements, to maintain and protect proprietary
aspects of our products and technologies. We require our employees and
consultants to execute confidentiality agreements in connection with their
employment or consulting relationships with us. We also require our employees
and consultants to disclose and assign to us all inventions conceived during the
term of their employment or engagement which relate to our business.



Although we believe we are sufficiently protected, the failure to obtain or the
loss of some of these intellectual property rights could have an adverse effect
on our business, financial condition and results of operations.



37







Seasonality

The consumer products business is highly seasonal with consumers making a large percentage of purchases during the traditional holiday season.

These seasonal purchasing patterns and requisite production lead times create
risk to our business associated with the underproduction of popular consumer
products and the overproduction of less popular consumer products that do not
match consumer demand.



These factors increase the risk that the Company may not be able to meet demand
for certain products at peak demand times or that our own inventory levels may
be adversely impacted by the need to pre-build products before orders are
placed. Additionally, as retailers manage their inventories, we may experience
cyclical ordering patterns for products and product lines that may cause our
sales to vary significantly from period to period.



E-commerce has partially reduced traditional seasonality to moderate
seasonality. We intend to expand this flattening of traditional seasonality from
e-commerce channels to our business as well, including through the continued
emergence of crowd-funded "micro brands" that we believe will further delink
demand for our products and services from historical demand fluctuation.

Government Regulations and Environmental Quality

Our products sold in the United States are subject to the provisions of the
Consumer Product Safety Act, as amended by the Consumer Product Safety
Improvement Act of 2008, the Federal Hazardous Substances Act, and the Consumer
Product Safety Improvement Act of 2008, and may also be subject to the
requirements of the Flammable Fabrics Act or the Food, Drug, and Cosmetics Act
and the regulations promulgated pursuant to such statutes. These statutes and
the related regulations ban from the market consumer products that fail to
comply with applicable product safety laws, regulations, and standards. The
Consumer Product Safety Commission may require the recall, repurchase,
replacement, or repair of any such banned products or products that otherwise
create a substantial risk of injury and may seek penalties for regulatory
noncompliance under certain circumstances. Similar laws exist in some states. We
believe that we are in substantial compliance with these laws and regulations.
Our products sold worldwide are subject to the provisions of similar laws and
regulations in many jurisdictions, including the European Union and Canada. We
believe that we are in substantial compliance with these laws and regulations.



We maintain a quality control program to help ensure compliance with applicable
product safety requirements. Nonetheless, we may in the future experience,
issues in products that result in recalls, withdrawals, or replacements of
products. A product recall could have a material adverse effect on our results
of operations and financial condition, depending on the product affected by the
recall and the extent of the recall efforts required.



Our advertising is subject to the Federal Trade Commission Act, The Children's
Television Act of 1990, the rules and regulations promulgated by the Federal
Trade Commission, and the Federal Communications Commission, as well as laws of
certain countries that regulate advertising and advertising to children. In
addition, our web-based products and services and other online and digital
communications activity are or may be subject to US and foreign privacy-related
regulations, including the US Children's Online Privacy Protection Act of 1998
and the EU Data Protection Directive (Directive 95/46/EC) and related national
regulations. We believe that we are in substantial compliance with these laws
and regulations.



Our worldwide operations are subject to the requirements of various
environmental laws and regulations in the jurisdictions where those operations
are located. We believe that we are in substantial compliance with these laws
and regulations. Our operations are from time to time the subject of
investigations, conferences, discussions, and negotiations with various federal,
state and local environmental agencies within and outside the United States with
respect to the discharge or cleanup of hazardous waste. We are not aware of any
material cleanup liabilities.

Furthermore, we are subject to various other federal, state, local and international laws and regulations applicable to its business. We believe that we are in substantial compliance with these laws and regulations.

38

Factors Which May Influence Future Results of Operations

The following is a description of factors which may influence our future results
of operations, and which we believe are important to an understanding of our
business and results of operations.



Warrant Liabilities



On January 25, 2021, the Company consummated the closing of a private placement
offering (the "Offering") whereby pursuant to the Securities Purchase Agreement
(the "Purchase Agreement") entered into by the Company on January 21, 2021 with
Hudson Bay Master Fund, Ltd (the "Investor"), the Company issued a Senior
Convertible Note for the purchase price of $12,000,000 (the "Note") and a five
(5) year warrant (the "Warrant") to purchase shares of the Company's common
stock, par value $0.001 per share ("Common Stock"). The Investor converted
$11,000,000 of principal and $39,190 of interest into 5,519,595 of the Company's
common shares. Pursuant to the Purchase Agreement, the Investor received a
Warrant in an amount equal to 250% of the shares of Common Stock initially
issuable to each Investor pursuant to the Investor's Note. The Warrant contains
an exercise price of $2.00 per share. In connection with the closing of the
Offering, the Warrant was issued to purchase an aggregate of 15,000,000 shares
of Common Stock (the "Warrant Shares").



On February 23, 2021, the Company consummated the closing of a private placement
offering (the "Offering") whereby pursuant to the Securities Purchase Agreement
(the "Purchase Agreement") entered into by the Company on February 18, 2021 with
one accredited investor (the "Investor"), the Company issued a Senior
Convertible Note for the purchase price of $10,000,000 (the "Note") and five (5)
year warrants (the "Warrant") to purchase shares of the Company's common stock,
par value $0.001 per share ("Common Stock"). Pursuant to the Purchase Agreement,
the Investor received a Warrant in an amount equal to 900% of the shares of
Common Stock initially issuable to the Investor pursuant to the conversion terms
of the Investor's Note. The Warrant contains an exercise price of $3.722 per
share, subject to adjustments as provided under the terms of the Warrant. In
connection with the closing of the Offering, the Warrant was exercisable for an
aggregate of 18,568,188 shares of Common Stock (the "Warrant Shares").



Palladium Capital Group, LLC. acted as placement agent for both Offerings. The
Placement Agent received a Warrant granting the Holder the right to purchase
480,000 and 1,650,346 shares, respectively, of the Company's common stock at an
exercise price of $2.00 and $3.722, respectively, with an expiration date of
January 25, 2026 and February 23, 2026, respectively.



On January 29, 2021, the Company consummated the closing of a private placement
offering of $3,300,000 whereby pursuant to the Securities Purchase Agreement
entered into by the Company on January 28, 2021 with BHP Capital NY Inc, the
Company issued 1,500,000 shares of restricted common stock and a five (5) year
warrant to purchase 1,500,000 shares of the Company's common stock.



The warrants are subject to anti-dilution adjustments outlined in the Agreement.
The warrants may require cash settlement under certain conditions, such as a
tender offer. The warrants were classified as a liability with an initial fair
value at the time of issuance of $96,495,977, of which $75,156,534 was
immediately expensed as a loss on issuance of warrants and $19,720,000 was
recorded as a deferred debt discount. In addition, the warrants must be valued
every reporting period and adjusted to market with the increase or decrease
being adjusted through earnings. As of March 31, 2021, the fair value of the
warrant liability was $58,235,566. For the three months ended March 31, 2021,
the Company recorded a gain of $36,381,542. The warrants are valued using the
Black-Scholes pricing model to calculate the fair value of the warrants.

EVNT Platform, LLC Asset Contribution Agreement

On April 17, 2021, the Company and EVNT Platform, LLC, a wholly owned subsidiary
of the Company, entered into (and closed on) a certain Asset Contribution
Agreement ("Asset Contribution Agreement") with Emmersive Entertainment, Inc.,
pursuant to which Emmersive contributed/transferred to the Company the assets
used for Emmersive's business, which include digital assets, software and
certain physical assets in consideration for, among other things, the Company
assuming certain obligations of Emmersive, hiring certain employees, and issuing
1,000,000 preferred membership units ("Preferred Units") in the Company to
Emmersive and/or its shareholders ("Preferred Members") pursuant to a First
Amended and Restated Operating Agreement for the Company dated as of April 17,
2021). Certain put rights are associated with Preferred Units, which if
exercised by the Preferred Members, obligates Vinco to purchase the Preferred
Units in exchange for 1,000,000 shares of Vinco Venture's common stock. In
addition, the Preferred Members have the opportunity to earn up to 4,000,000
Conditional Preferred Units if certain conditions are satisfied for each of the
four earn out targets. The Earn-Out Targets are described below:



Earn-Out Target 1: In the event that the Company (1) develops a minimally viable
product for the NFT Technology to validate the utility of the product/platform
with features to attract and transact with customers and (2) is successful
on-boarding a minimum of 10 approved influential celebrities on or before
December 31, 2021, the Company shall issue to Emmersive and/or Emmersive's
Shareholders, 1,000,000 Conditional Preferred Units, with Put Rights.



Earn-Out Target 2: In the event that the Company generates a minimum of
$7,000,000 in annualized booked revenues inclusive of revenues generated from
the celebrities onboarded by the Company (collectively "Attributed Revenue") in
any three-calendar-month period ending on or before March 31, 2022 (i.e. more
than $1,750,000 in Attributed Revenue in a period of three consecutive calendar
months), the Company shall issue to Emmersive and/or Emmersive's Shareholders
1,000,000 Conditional Preferred Units, with the Put Rights.



Earn-Out Target 3: In the event that the Company generates a minimum of
$28,000,000 in annualized Attributed Revenues in any three-calendar-month period
ending on or before December 31, 2022 (i.e. more than $7,000,000 in Attributed
Revenue in a period of three consecutive calendar months), the Company shall
issue to Emmersive and/or Emmersive's Shareholders 1,000,000 Conditional
Preferred Units, with Put Rights.



Earn Out Target 4: In the event that the Company generates a minimum of
$62,000,000 in annualized Attributed Revenues in any three-calendar-month period
ending on or before December 31, 2023 (i.e. more than $15,500,000 in Attributed
Revenue in a period of three consecutive calendar months), the Company shall
issue to Emmersive and/or Emmersive's Shareholders 1,000,000 Conditional
Preferred Units, with Put Rights.

On April 17, 2021, the transactions under both the Asset Contribution Agreement and Amended Operating Agreement closed.

Agreement to Complete a Merger with Zash Global Media and Entertainment Corporation

On January 20, 2021, the Company, and its newly formed wholly owned subsidiary,
Vinco Acquisition Corporation (the "Merger Sub"), entered into an Agreement to
Complete a Plan of Merger (the "Agreement to Complete") with ZASH Global Media
and Entertainment Corporation ("ZASH").



The Agreement contemplates a reverse triangular merger of Merger Sub with and
into ZASH in a transaction intended to qualify as a tax-free reorganization
under Sections 368(a)(l)(A) and 368(a)(2)I of the Code. Under the terms of the
Agreement to Complete, ZASH's holders of common stock, par value $0.001, shall
receive shares of Common Stock of the Company in exchange for all issued and
outstanding ZASH shares of common stock. ZASH will then become an indirect
wholly-owned subsidiary of the Company. In connection with the foregoing, the
Company engaged a third-party valuation firm to perform a valuation of ZASH and
to issue a Transaction Fairness Opinion. The valuation report will be relied
upon to set the resulting post-closing ownership ratio. Upon completion of the
closing, ZASH will be the controlling entity.



39







The certificate of incorporation of the Company will be amended and restated at
and as of the Effective Time, in substantial conformance with the certificate of
incorporation of ZASH immediately prior to the closing, and the name of the
Company will be changed to "ZASH Global Media and Entertainment Corporation."
The bylaws of the Company will be amended and restated at and as of the Closing
to become the equivalent of the bylaws of ZASH immediately prior to the closing.
At the closing, certain officers and directors of the Company and the Merger Sub
immediately prior to the Effective Time shall resign and the officers and
directors of ZASH immediately prior to the closing will be appointed as officers
and directors of the Company and the surviving corporation, in each case until
their respective successors are duly elected or appointed and qualified;
provided, however that the Company shall have the right to appoint two (2)
person to serve as a member of the Board of Directors of the surviving
corporation and ZASH shall have the right to appoint three (3) persons to serve
as members of the Board of Directors of the surviving company.



On March 30, 2021, the Company, Vinco Acquisition Corporation and ZASH entered
into that certain First Amendment to Agreement to Complete a Plan of Merger,
which amends the Merger Agreement dated January 20, 2021 to extend the closing
date of the merger to on or about May 28, 2021.



Contribution Agreement with Zash Global Media and Entertainment Corporation



On January 19, 2021, Vinco Ventures, Inc. ("Vinco Ventures"), ZVV Media
Partners, LLC (the "Company") and Zash Global Media and Entertainment
Corporation ("ZASH") entered into a Contribution Agreement (the "Agreement").
Vinco Ventures and ZASH desire to establish the newly formed Company in order to
engage in the development and production of consumer facing content and related
activities.

Under the terms of the Agreement, Vinco Ventures and ZASH shall contribute
certain assets (the "Contributed Assets") to the Company. At Closing, Vinco
Ventures and ZASH shall enter into a limited liability operating agreement of
the Company and a content distribution agreement with American Syndication Media
Corporation ("ASMC"). The Company shall not assume any liabilities of either
Vinco Ventures or ZASH except those liabilities arising in or specifically
relating to periods, events or occurrences happening with respect to the
Contributed Assets on or after the Closing Date. In consideration of the
Contributed Assets, the Company shall issue to Vinco Ventures and ZASH 5,000
Units. The transaction closed on January 19, 2021.

Closing on the Sale of Assets of CBAV1, LLC

On October 30, 2020, the Company received a letter of intent from a prospective
purchaser dated October 22, 2020 setting forth the terms of an offer to purchase
Cloud b assets from CBAV1, LLC ("CBAV1"), the Company's wholly owned subsidiary
(the "LOI"). The Cloud b assets include but are not limited to intellectual
property, know how, brand names, trade names, patents, models, internet
websites, domains, social network assets, production facilities, including the
molds of all products, and inventory ("Cloud b Assets").



By way of background, the Cloud b Assets were pledged as collateral
("Collateral") to secure a promissory note from East West Bank dated in or
around May 25, 2011, along with amendments and modifications to the loan
agreement ("Secured Note"). On June 4, 2018, CBAV1 acquired the Secured Note in
accordance with the Cloud B Assignment of Loan and Security Agreement from East
West Bank. On October 30, 2018, pursuant to the Stock Purchase Agreement, the
Company became the beneficial owner of 72.16% of Cloud b, Inc.'s shares of
common stock. CBAV1 provided Notification of Disposition of Collateral (pursuant
to its notice of default dated August 7, 2018 to Cloud b, Inc.) and scheduled a
Public Sale of the Collateral to the highest qualified bidder for February 11,
2019 ("Public Sale"). CBAV1 submitted the highest bid for the Collateral at the
Public Sale and inured to the benefit of the Cloud b Assets. On February 17,
2020, the Company entered into the Agreement for The Purchase and Sale of Common
Stock of Cloud b, Inc. and pursuant therewith, sold its ownership interest

in
Cloud b, Inc. to the buyer.

To effectuate the sale of the Cloud b assets to the prospective purchaser, the
Company has determined that it is in the best interests of the company and its
shareholders for CBAV1 and the prospective buyer to utilize the jurisdiction and
protections of the bankruptcy court to effectuate the sale of the Cloud b Assets
free and clear of any obligations.



40

The current assets of CBAV1 were estimated to be in excess of $2,000,000 and the current liabilities were estimated to be less than $100,000.

By utilizing the jurisdiction of the bankruptcy court, the Cloud b Assets can be
transferred to the prospective purchaser free and clear of liens and
obligations. Any unsecured creditors or minority shareholders of Cloud b, Inc.
will have the opportunity to assert any claims or actions within the sale
proceeding under the jurisdiction of the bankruptcy court.



On March 12, 2021, the bankruptcy court approved the sale of the CBAV1, LLC
Assets to BTL Diffusion SARL, the winning bidder, at the auction held on March
10, 2021 and March 11, 2021 for a total sum of $3,000,000, which includes a cash
payment at closing in the amount of $2,650,000, less certain closing costs and
credits, and additional royalty payments in the amount of $150,000 on April 15,
2022 and in the amount of $200,000 on April 15, 2023 ("CBAV1-BTL Transaction").



A dry closing of the CBAV1-BTL Transaction occurred on April 16, 2021, with the
transfer of assets and release of funds completed on April 21, 2021 ("Final
Closing"). Contemporaneously with the Final Closing, a certain license agreement
between CBAV1 and Edison Nation, LLC ("Edison Nation") terminated and any
remaining operational assets of Edison Nation were transferred to BTL.

Stock Exchange Agreement for Sale of SRM Entertainment, LTD

On November 30, 2020, the Company (the "Seller") and its wholly owned
subsidiary, SRM Entertainment, LTD ("SRM") entered into a Stock Exchange
Agreement (the "Exchange Agreement") with Jupiter Wellness, Inc. ("Jupiter")(the
"Buyer"). Under the terms of the Exchange Agreement, the Buyer agreed to
purchase all outstanding shares of common stock (the "Exchange Shares") issued
by SRM from the Seller. As consideration for the purchase of the Exchange
Shares, the Buyer agreed to exchange 200,000 shares of its restricted common
stock (the "Consideration Shares"), symbol JUPW as listed on NASDAQ Capital
Markets.



Upon closing, Jupiter delivered 150,000 of the Consideration Shares and held
50,000 of the Consideration Shares in escrow ("Escrow Shares"). Jupiter shall
release the Escrow Shares upon SRM generating $200,000 in cash receipts and
revenue prior to January 15, 2021. As of the date of the Registration Statement,
the Company has received all Exchange Shares.



As a performance based incentive, the Buyer shall pay to the Seller two percent
(2%) of gross sales of Jupiter's private label sun care products if such gross
sales are in excess of twelve million dollars ($12,000,000) earned during the
2021 calendar year.

At Closing, the Company (as "Stockholder") and Jupiter entered into a Leak Out
Agreement, whereby the Company was limited in the sales of the Consideration
Shares upon the following terms: (i) As such time as the Stockholder is able to
resell the Consideration Shares in accordance with the provisions of Rule 144 of
the Securities Act (the "Expiration of the Holding Period"), the Stockholder
agrees to limit the resales of such Shares in the public market as follows:

a. No shares in any one day more than ten percent (10%) of the average of the

daily trading volume on all trading markets on which the Consideration Shares

are then quoted or listed for the five trading days preceding the sale of the

Consideration Shares, and;

b. Any permitted resales by the Stockholder shall be at the then current bid

     price of the Common Stock.

Honey Badger Media Purchase and Licensing Agreement

On November 10, 2020, the Company, through its wholly owned subsidiary, Honey Badger Media, LLC, entered into a series of transactions with Honey Badger Media, LLC, a Delaware limited liability company:

On November 10, 2020, under the terms of the Asset Purchase Agreement (the
"Agreement"), the Company (the "Buyer") agreed to purchase from Honey Badger
Media, LLC (the "Seller") all of the Seller's rights, title and interest in and
to the Internet Websites, Domain Names, and all of the respective content (the
"Domains"), and any other rights associated with the domains, including, without
limitation, any intellectual property rights, all related Domains, logos,
customer lists and agreements, email lists, passwords, usernames and trade
names; and all of the related social media accounts including but not limited
to, Instagram, Twitter, Facebook, Instagram, and Pinterest at closing
(collectively the "Purchased Assets"). In consideration for the sale of the
Purchased Assets, the Buyer agreed to pay the Seller the amount of Three Hundred
Thousand Dollars (US $300,000).



On November 10, 2020, under the terms of the Platform License Agreement (the
"License Agreement"), Honey Badger Media, LLC (the "Licensor") granted the
Company (the "Licensee") a perpetual, exclusive, worldwide license (the
"License") to implement and commercialize the assets connected with the
Platform, including, but not limited to, the right to use all of Licensor's
intellectual property rights comprising the Platform, owned by or licensed to
Licensor that are utilized as part of the Platform ("Licensed Related Assets").
In consideration for the License, the Licensee agreed to pay to the Licensor a
fee equal to thirty percent (30%) of the Net Profits generated from Licensee's
clients through the Platform and Licensed Related Assets and the Licensee's
parent company agreed to issue the Licensor 750,000 shares of common stock.

41

Acquisition of HMNRTH, LLC Assets

On March 11, 2020, the Company and its wholly owned subsidiary, Scalematix, LLC
(together the "Buyer"), entered into an Asset Purchase Agreement (the
"Agreement") with HMNRTH, LLC (the "Seller") and TCBM Holdings, LLC (the
"Owner") (together Seller and Owner the "Selling Parties") for the purchase of
certain assets in the health wellness industry and related consumer products
industry. Under the terms of the Agreement, Buyer is to remit $70,850 via wire
transfer at Closing and shall issue to a representative of the Selling Parties
Two Hundred Thirty-Eight Thousand Seven Hundred and Fifty (238,750) shares of
restricted common stock. The shares were issued on March 16, 2020 and valued at
$477,500.

Global Clean Solutions Agreement and Plan of Share Exchange

On May 20, 2020 (the "Effective Date"), the "Company entered into an Agreement
and Plan of Share Exchange (the "Share Exchange Agreement") with PPE Brickell
Supplies, LLC, a Florida limited liability company ("PPE"), and Graphene
Holdings, LLC, a Wyoming limited liability company ("Graphene", and together
with PPE, the "Sellers"), whereby the Company purchased 25 membership units of
Global Clean Supplies, LLC, a Nevada limited liability company ("Global") from
each of PPE and Graphene, for a total of fifty (50) units, representing fifty
percent (50%) of the issued and outstanding units of Global (the "Purchase
Units"). The Company issued 250,000 shares of its restricted common stock,
$0.001 par value per share (the "Common Stock") to PPE, and 50,000 shares of
Common Stock to Graphene, in consideration for the Purchase Units.



Pursuant to the terms of the Share Exchange Agreement, the Sellers may earn
additional shares of Common Stock upon Global realizing the following revenue
targets: (i) In the event that Global's total orders equal or exceed $1,000,000,
Graphene shall receive 200,000 shares of Common Stock; (ii) In the event that
Global's total orders equal or exceed $10,000,000, PPE shall receive 100,000
shares of restricted Common Stock; and (iii) In the event that Global's total
orders equal or exceed $25,000,000, Graphene shall receive 125,000 shares of
restricted Common Stock. Additionally, the Company shall be entitled to appoint
two managers to the Board of Managers of Global.

Acquisition of TBD Safety, LLC

On September 29, 2020, the Company entered into a Purchase and Sale Agreement
(the "Agreement") with Graphene Holdings, LLC, Mercury FundingCo, LLC, Ventus
Capital, LLC and Jetco Holdings, LLC (together the "Sellers") to acquire all
outstanding Membership Units (the "Units") of TBD Safety, LLC ("TBD").
Collectively, the Sellers owned all outstanding Units of TBD. Under the terms of
the Agreement, the Company issued a total of Two Million Two Hundred Ten
Thousand Three Hundred Eighty-Two (2,210,382) shares of the Company's common
stock and a total of Seven Hundred Sixty-Four Thousand Six Hundred Eighteen
(764,618) shares of a newly designated Preferred Stock (the "Preferred"). In
addition, the Company and Sellers entered into a Registration Rights Agreement
(the "Registration Rights Agreement") in favor of the Sellers obligating the
Company to register such common stock and shares of common ctock to be issued
upon conversion of the Preferred within 120 days after the Closing. The Sellers
also had an Earn Out Consideration, which provides that at such time as the
assets purchased in the Agreement achieve cumulative revenue of $10,000,000, the
Sellers will earn a total of One Hundred Twenty-Five Thousand (125,000) shares
of common stock. The closing of the transaction occurred on October 16, 2020.
Please see Note 3 - Acquisitions and Divestitures for further information.

Edison Nation Medical Operations

Edison Nation Holdings, LLC formed Edison Nation Medical ("EN Medical") in May
of 2012 as a partnership with Carolinas Healthcare Systems (now called Atrium).
Atrium is the 2nd largest healthcare system in the US. Carolina Health (Atrium)
looked to identify a way to aggregate and commercialize the healthcare related
innovations that were coming from their physicians, nurses, and patients, and
Edison Nation offered a platform to provide that function.



EN Medical built out a separate platform, leveraging the Edison Nation model to
look for ideas that improved patient care and lowered costs. EN collected some
great ideas, but the market shifted and EN found that the licensing model was
very difficult as big medical device companies wanted to acquire companies with
sales versus just buying IP and prototypes.

Today, EN Medical operates an online portal granting hospitals, government agencies and distributors access to its catalog of medical supplies and hand sanitizers.

Executive Compensation Agreements

On February 2, 2021, the Company entered into an Employment Agreement (the
"Agreement") with Christopher Ferguson (the "Executive") for the role of Chief
Executive Officer. The Agreement is effective as of November 12, 2020 (the
"Effective Date") and has a term of three (3) years (the "Term") from the
Effective Date. Thereafter, the Agreement shall automatically be renewed and the
Term shall be extended for additional consecutive terms of 1 year (each a
"Renewal Term"), unless such renewal is objected to by either the Company or the
Executive. The Executive's initial annual base salary shall be $200,000, less
applicable withholdings (the "Base Salary") and 120,000 common shares that shall
vest in their entirety on issuance. The Base Salary shall be payable in
accordance with the Company's normal payroll procedures in effect from time to
time. The Base Salary due of shares, shall be payable within the first 30 days
of the year. On each anniversary of the Agreement, the base salary will increase
no less than $15,000 ("minimum"). For 2021, the Executive shall receive a cash
bonus in the amount equal to 30% of the annual Base Salary, and an award of 200%
shares of the Company's common stock, which shall vest in their entirety on
issuance (the "Principal Market"), which shall be received by the Executive no
later than the first 30 days of the current fiscal year. The Executive shall be
entitled to 150,000 shares of the Company's common stock, due immediately upon
an increase of 2.5 times the Enterprise Value on a 5-day closing average from
the effectiveness of the Agreement. For clarification, the Enterprise Value as
of the Company at the effective date was $25,042,464.



On February 2, 2021, the Company entered into an Employment Agreement (the
"Agreement") with Brett Vroman (the "Executive") for the role of Chief Financial
Officer. The Agreement is effective as of November 12, 2020 (the "Effective
Date") and has a term of three (3) years (the "Term") from the Effective Date.
Thereafter, the Agreement shall automatically be renewed and the Term shall be
extended for additional consecutive terms of 1 year (each a "Renewal Term"),
unless such renewal is objected to by either the Company or the Executive. The
Executive's initial annual base salary shall be $200,000, less applicable
withholdings (the "Base Salary") and 120,000 common shares that shall vest in
their entirety on issuance. The Base Salary shall be payable in accordance with
the Company's normal payroll procedures in effect from time to time. The Base
Salary due of shares, shall be payable within the first 30 days of the year. On
each anniversary of the Agreement, the base salary will increase no less than
$15,000 ("minimum"). For 2021, Executive shall receive a cash bonus in the
amount equal to 30% of the annual Base Salary, and an award of 200% shares of
the Company's common stock, which shall vest in their entirety on issuance (the
"Principal Market"), which shall be received by the Executive no later than the
first 30 days of the current fiscal year. Upon the execution of this agreement,
the Executive is entitled to a one-time past performance bonus for the work
completed in fiscal years 2018, 2019 and 2020 of 150,000 shares of the Company's
common stock, which shall vest in their entirety on issuance. The Executive
shall be entitled to 100,000 shares of the Company's common stock, due
immediately upon an increase of 2.5 times the Enterprise Value on a 5-day
closing average from the effectiveness of the Agreement. For clarification, the
Enterprise Value as of the Company at the effective date was $25,042,464.



On February 2, 2021, the Company entered into an Employment Agreement (the
"Agreement") with Brian Mc Fadden (the "Executive") for the role of Chief
Strategy Officer. The Agreement is effective as of November 12, 2020 (the
"Effective Date") and has a term of three (3) years (the "Term") from the
Effective Date. Thereafter, the Agreement shall automatically be renewed and the
Term shall be extended for additional consecutive terms of 1 year (each a
"Renewal Term"), unless such renewal is objected to by either the Company or the
Executive. The Executive's initial annual base salary shall be $200,000, less
applicable withholdings (the "Base Salary") and 120,000 common shares that shall
vest in their entirety on issuance. The Base Salary shall be payable in
accordance with the Company's normal payroll procedures in effect from time to
time. The Base Salary due of shares, shall be payable within the first 30 days
of the year. On each anniversary of the Agreement, the base salary will increase
no less than $15,000 ("minimum"). For 2021, the Executive shall receive a cash
bonus in the amount equal to 30% of the annual Base Salary, and an award of 200%
shares of the Company's common stock, which shall vest in their entirety on
issuance (the "Principal Market"), which shall be received by the Executive no
later than the first 30 days of the current fiscal year. Upon the execution of
the Agreement, the Executive is entitled to a one-time signing bonus of 150,000
shares of the Company's common stock, which shall vest in their entirety on
issuance. The Executive shall be entitled to 100,000 shares of the Company's
common stock, due immediately upon an increase of 2.5 times the Enterprise Value
on a 5-day closing average from the effectiveness of the Agreement. For
clarification, the Enterprise Value as of the Company at the effective date

was
$25,042,464.



42

Critical Accounting Policies and Significant Judgments and Estimates

Our management's discussion and analysis of our financial condition and results
of operations are based on our consolidated financial statements, which have
been prepared in accordance with accounting principles generally accepted in the
United States of America, or GAAP. The preparation of these consolidated
financial statements requires us to make estimates and assumptions that affect
the reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities as of the date of the consolidated financial statements
as well as the reported expenses during the reporting periods. The accounting
estimates that require our most significant, difficult and subjective judgments
have an impact on revenue recognition, the determination of share-based
compensation and financial instruments. We evaluate our estimates and judgments
on an ongoing basis. Actual results may differ materially from these estimates
under different assumptions or conditions.



Our significant accounting policies are more fully described in Note 2 to our
consolidated financial statements included elsewhere in this Quarterly Report on
Form 10-Q.

Components of our Results of Operations

Revenues

We sell consumer products across a variety of categories to retailers, distributors and manufacturers. We also sell consumer products directly to consumers through e-commerce channels. In addition, we generate revenues form media properties through social media monetization.

Cost of Revenues



Our cost of revenues includes inventory costs, materials and supplies costs,
internal labor costs and related benefits, subcontractor costs, depreciation,
overhead and shipping and handling costs.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist of selling, marketing, advertising, payroll, administrative, finance and professional expenses.

Rental Income

We earn rental income from a month-to-month lease on a portion of the building located in Washington, New Jersey that we own.

Interest Expense, Net

Interest expense includes the cost of our borrowings under our debt arrangements.

43







Results of Operations

Three Months Ended March 31, 2021 versus Three Months Ended March 31, 2020

The following table sets forth information comparing the components of net (loss) income for the three months ended March 31, 2021 and 2020:

                                     Three Months Ended March 31,           Period over Period Change
                                         2021               2020                $                 %

Revenues, net                      $      2,565,162     $  1,953,346      $      611,816           31.32 %
Cost of revenues                          1,653,381        1,363,719             289,662           21.24 %
Gross profit                                911,781          589,627             322,154           54.64 %

Operating expenses:
Selling, general and
administrative                           11,660,880        3,288,949           8,371,931          254.55 %
Operating (loss)                        (10,749,099 )     (2,699,322 )        (8,049,777 )        298.21 %

Other (expense) income:
Rental income                                25,704           25,704                   -             0.0 %
Interest (expense)                      (12,694,933 )       (723,957 )       (11,970,976 )      1,653.55 %
Loss on issuance of warrants            (75,156,534 )              -         (75,156,534 )       -100.00 %
Change in fair value of warrant
liability                                36,381,542                -          36,381,542          100.00 %
Change in fair value of
short-term investment                       (70,000 )              -             (70,000 )       -100.00 %
Gain on divestirure                               -                -                   -             0.0 %
Total other (expense), net              (51,514,221 )       (698,253 )       (50,815,968 )      7,277.59 %
Loss before income taxes                (62,263,320 )     (3,397,575 )       (58,865,745 )      1,732.58 %
Income tax expense                                -                -                  -                - %
Net loss from continuing
operations                              (62,263,320 )     (3,397,575 )       (58,865,745 )      1,732.58 %
Net income attributable to
noncontrolling interests                     28,034                -              28,034          100.00 %
Net loss from continuing
operations attributable to Vinco
Ventures, Inc.                          (62,291,354 )     (3,397,575 )       (58,893,779 )      1,733.41 %
Net income (loss) from
discontinued operations
attributable to Vinco Ventures,
Inc.                                       (178,200 )       (244,693 )           (66,493 )         27.17 %
Gain on divestiture from
discontinued operations                           -        4,911,760          (4,911,760 )       -100.00 %
Net (loss) income attributable
to Edison Nation, Inc.             $    (62,469,554 )   $  1,269,492      $

 (63,739,046 )     -5,020.83 %






Revenue



For the three months ended March 31, 2021, revenues increased by $611,816 or
31.32%, as compared to the three months ended March 31, 2020. The increase was
primarily the result of increase in business operations due to our Honey Badger
subsidiary and corrugated box business.



Cost of Revenues

For the three months ended March 31, 2021, cost of revenues increased by $289,662 or 21.24%, as compared to the three months ended March 31, 2020. The increase was primarily attributable to the increase in total consolidated revenues.

Gross Profit



For the three months ended March 31, 2021, gross profit increased by $322,154,
or 54.64%, as compared to the three months ended March 31, 2020. The increase
was primarily a result of the decrease in revenues.



Operating Expenses



Selling, general and administrative expenses were $11,660,880 and $3,288,949 for
the three months ended March 31, 2021 and 2020, respectively, representing an
increase of $8,371,931, or 254.55%. The increase was primarily the result of an
increase in stock-based compensation.



Rental Income

Rental income was $25,704 for both the three months ended March 31, 2021 and 2020.

44







Interest expense



Interest expense was $12,694,933 for the three months ended March 31, 2021
versus $723,957 in the previous three months ended March 31, 2020. The increase
in interest expense was related to the two financings in the first quarter of
$22,000,000 which included the issuance of warrants and beneficial conversion
features that were amortized and included as part of interest expense.

Loss on issuance of warrants and change in fair value of warrants

Loss on issuance of warrants was $75,156,534 and $0 for the three months ended
March 31, 2021 and 2020, respectively. The issuance of warrants was related to
the issuance of warrants in connection with the three private placements
completed in the first quarter of 2021. Change in fair value of warrants was a
gain of 36,381,542 and $0 for the three months ended March 31, 2021 and 2020,
respectively. The change in fair value of warrants was related to a reduction in
the warrant liability due to a change in the underlying assumptions of the
Black-Scholes model, mostly related to a decrease in the Company's share price.



Income tax expense

Income tax expense was $0 and $0 for the three months ended March 31, 2021 and 2020, respectively.

Non-GAAP Measures



EBITDA and Adjusted EBITDA



The Company defines EBITDA as net loss before interest, taxes and depreciation
and amortization. The Company defines Adjusted EBITDA as EBITDA, further
adjusted to eliminate the impact of certain non-recurring items and other items
that we do not consider in our evaluation of our ongoing operating performance
from period to period. These items will include stock-based compensation,
restructuring and severance costs, transaction costs, acquisition costs, certain
other non-recurring charges and gains that the Company does not believe reflects
the underlying business performance.



For the three months ended March 31, 2021 and 2020, EBITDA and Adjusted EBITDA
consisted of the following:



                                                      For the Three Months
                                                        Ended March 31,
                                                     2021              2020

Net income (loss) from continuing operations $ (62,263,320 ) $ 1,269,492 Net income (loss) from discontinued operations (178,200 )

  -
Interest expense, net                               12,694,933          723,957
Depreciation and amortization                          445,541          316,298
EBITDA                                             (49,301,046 )      2,309,747
Stock-based compensation                             8,697,502        1,319,511
Loss on issuance of warrant liability               75,156,534
Change in fair value of warrant liability          (36,381,542 )           

-

Restructuring and severance costs                            -          

242,136

Transaction and acquisition costs                      704,565           

82,736

Other non-recurring costs                                    -           40,860
Gain on divestiture                                          -       (4,911,760 )
                                                             -                -
Adjusted EBITDA                                  $  (1,123,987 )   $   (916,770 )

EBITDA and Adjusted EBITDA is a financial measure that is not calculated in
accordance with accounting principles generally accepted in the United States of
America ("U.S. GAAP"). Management believes that because Adjusted EBITDA excludes
(a) certain non-cash expenses (such as depreciation, amortization and
stock-based compensation) and (b) expenses that are not reflective of the
Company's core operating results over time (such as restructuring costs,
litigation or dispute settlement charges or gains, and transaction-related
costs), this measure provides investors with additional useful information to
measure the Company's financial performance, particularly with respect to
changes in performance from period to period. The Company's management uses
EBITDA and Adjusted EBITDA (a) as a measure of operating performance, (b) for
planning and forecasting in future periods, and (c) in communications with the
Company's board of directors concerning the Company's financial performance. The
Company's presentation of EBITDA and Adjusted EBITDA are not necessarily
comparable to other similarly titled captions of other companies due to
different methods of calculation and should not be used by investors as a
substitute or alternative to net income or any measure of financial performance
calculated and presented in accordance with U.S. GAAP. Instead, management
believes EBITDA and Adjusted EBITDA should be used to supplement the Company's
financial measures derived in accordance with U.S. GAAP to provide a more
complete understanding of the trends affecting the business.



Although Adjusted EBITDA is frequently used by investors and securities analysts
in their evaluations of companies, Adjusted EBITDA has limitations as an
analytical tool, and investors should not consider it in isolation or as a
substitute for, or more meaningful than, amounts determined in accordance with
U.S. GAAP. Some of the limitations to using non-GAAP measures as an analytical
tool are (a) they do not reflect the Company's interest income and expense, or
the requirements necessary to service interest or principal payments on the
Company's debt, (b) they do not reflect future requirements for capital
expenditures or contractual commitments, and (c) although depreciation and
amortization charges are non-cash charges, the assets being depreciated and
amortized will often have to be replaced in the future, and non-GAAP measures do
not reflect any cash requirements for such replacements.



45

Liquidity and Capital Resources

For the three months ended March 31, 2021, our operations lost approximately
$10,749,009, of which approximately $9,143,000 was non-cash and approximately
$705,000 was related to transaction costs and other non-recurring items.



At March 31, 2021, we had total current assets of approximately $11,238,811 and
current liabilities of approximately $7,144,413 resulting in working capital of
approximately $4,094,398, of which $1,263,755 was related party notes payable.
At March 31, 2021, we had total assets of $45,473,359 and total liabilities of
$67,428,994 resulting in stockholders' deficit of $21,955,635.



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.



46







Cash Flows

During the three months ended March 31, 2021 and 2020, our sources and uses of cash were as follows:

Cash Flows from Operating Activities

Net cash used in operating activities for the three months ended March 31, 2020
was $4,140,110 which included net loss from continuing operations of $62,291,354
that included $1,969,052 of cash used by changes in operating assets and
liabilities, stock-based compensation of $8,697,502, change in fair value of
earnout of $38,774,992, depreciation and amortization of $445,541, amortization
of financing costs of $12,418,929 and amortization of right of use assets of
$24,163. Net cash used in operating activities for the three months ended March
31, 2020 was $1,153,505 which included net income of $1,269,492 that included
$204,493 of cash provided by changes in operating assets and liabilities,
stock-based compensation of $1,319,511, depreciation and amortization of
$316,299, amortization of financing costs of $570,636 and amortization of right
of use assets of $77,823 which was offset by a gain on divestiture of a
subsidiary of $4,911,760.

Cash Flows from Investing Activities

Net cash used in investing activities was $12,018,228 and $31,918 for the three
months ended March 31, 2021 and 2020, respectively. Net cash used in investing
activities was largely attributable to the Company's other investments.

Cash Flows from Financing Activities

Net cash provided by financing activities for the three months ended March 31,
2021 totaled $21,434,726 which related mostly to borrowings under convertible
notes and borrowings under notes payable. Net cash provided by financing
activities for the three months ended March 31, 2020 totaled $1,304,766 which
related mostly to borrowings under convertible notes and borrowings under notes
payable.

Off-Balance Sheet Arrangements

We did not have, during the periods presented, and we do not currently have, any
relationships with any organizations or financial partnerships, such as
structured finance or special purpose entities, that would have been established
for the purpose of facilitating off-balance sheet arrangements or other
contractually narrow or limited purposes.

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