Filed Pursuant to Rule 424(b)(3)

Registration No. 333-262105

 

PROSPECTUS SUPPLEMENT NO. 2

(to Prospectus dated April 21, 2022)

 

 

 

BuzzFeed, Inc.
112,304,633 Shares of Class A Common Stock
15,637,500 Shares of Class A Common Stock Underlying Convertible Notes
292,500 Warrants to Purchase Shares of Class A Common Stock
9,875,833 Shares of Class A Common Stock Underlying Warrants

 

This prospectus supplement supplements the prospectus dated April 21, 2022 (the “Prospectus”), which forms a part of our registration statement on Form S-1, as amended (No. 333-262105). This prospectus supplement is being filed to update and supplement the information in the Prospectus with the information contained in our quarterly report on Form 10-Q for the quarterly period ended March 31, 2022, filed with Securities and Exchange Commission on May 16, 2022 (the “Quarterly Report”). Accordingly, we have attached the Quarterly Report to this prospectus supplement.

 

The Prospectus and this prospectus supplement relate to the offer and sale from time to time by the selling securityholders named in the Prospectus (the “Selling Securityholders”) of up to 112,304,633 shares of Class A common stock, par value $0.0001 per share (the “Class A common stock”), consisting of (A) up to (i) 109,094,037 shares of Class A common stock (including shares of Class A common stock issuable upon conversion of shares of Class B common stock, par value $0.0001 per share (the “Class B common stock”) and shares of Class A common stock issuable upon conversion of shares of Class C common stock, par value $0.0001 per share (the “Class C common stock”)), including shares being registered pursuant to that certain Amended and Restated Registration Rights Agreement, dated December 3, 2021, between us and certain of the Selling Securityholders granting such holders registration rights with respect to such shares; (ii) 3,210,596 shares of Class A common stock issuable following the exercise or settlement of certain stock options and restricted stock units; (iii) 15,637,500 shares of Class A common stock reserved for issuance upon the conversion of convertible senior notes; and (iv) 9,875,833 shares of Class A common stock issuable upon the exercise of warrants; and (B) 292,500 warrants, consisting of (a) 259,167 Private Placement Warrants and (b) 33,333 Working Capital Warrants.

 

Our Class A common stock and warrants are listed on the Nasdaq Capital Market under the symbols “BZFD” and “BZFDW,” respectively. On May 13, 2022, the last reported sales price of our Class A common stock and the warrants were $3.76 per share and $0.64 per warrant, respectively.

 

This prospectus supplement updates and supplements the information in the Prospectus and is not complete without, and may not be delivered or utilized except in combination with, the Prospectus, including any amendments or supplements thereto. This prospectus supplement should be read in conjunction with the Prospectus and if there is any inconsistency between the information in the Prospectus and this prospectus supplement, you should rely on the information in this prospectus supplement.

 

Investing in our securities involves risks. See the section entitled “Risk Factors” beginning on page 8 of the Prospectus to read about factors you should consider before buying our securities.

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

The date of this prospectus supplement is May 16, 2022

 

 

 

 

 

 

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q


QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from      to        

Commission file number: 001-39877


BuzzFeed, Inc.

(Exact Name of Registrant as Specified in Its Charter)


Delaware

    

85-3022075

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

111 East 18th Street New York, New York

10003

(Address of principal executive offices)

(Zip Code)

(646) 589-8592

(Registrant’s telephone number, including area code)

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

Title of each class

    

Trading Symbol(s)

    

Name of each exchange on which registered

Class A Common Stock, $0.0001 par value per share

BZFD

The Nasdaq Stock Market LLC

Redeemable warrants, each whole warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50 per share

BZFDW

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes    No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes    No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes No

As of May 12, 2022, there were 116,688,959 shares of the registrant’s Class A common stock outstanding, 12,293,614 shares of the registrant’s Class B common stock outstanding and 6,478,031 shares of the registrant’s Class C common stock outstanding.


Table of Contents

BUZZFEED, INC.

TABLE OF CONTENTS

Page

PART I

FINANCIAL INFORMATION

5

Item 1

Financial Statements (unaudited)

5

Condensed Consolidated Balance Sheets

5

Condensed Consolidated Statements of Operations

6

Condensed Consolidated Statements of Comprehensive Income (Loss)

7

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

8

Condensed Consolidated Statements of Cash Flows

9

Notes to Condensed Consolidated Financial Statements

10

Item 2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

29

Item 3

Quantitative and Qualitative Disclosures About Market Risk

40

Item 4

Controls and Procedures

41

PART II

OTHER INFORMATION

42

Item 1

Legal Proceedings

42

Item 1A

Risk Factors

42

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

43

Item 3

Defaults Upon Senior Securities

43

Item 4

Mine Safety Disclosures

44

Item 5

Other Information

44

Item 6

Exhibits

44

SIGNATURES

45

2


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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Quarterly Report on Form 10-Q may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which statements involve substantial risks and uncertainties. Our forward-looking statements include, but are not limited to, statements regarding our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “can,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Quarterly Report on Form 10-Q may include, for example, statements about:

anticipated trends, growth rates, and challenges in our business and in the markets in which we operate;

demand for products and services and changes in traffic;

changes in the business and competitive environment in which we operate;

developments and projections relating to our competitors and the digital media industry;

the impact of national and local economic and other conditions and developments in technology, each of which could influence the levels (rate and volume) of our advertising, the growth of our business and the implementation of our strategic initiatives;

poor quality broadband infrastructure in certain markets;

technological developments;

our success in retaining or recruiting, or changes required in, officers, key employees or directors;

our business, operations and financial performance, including expectations with respect to our financial and business performance, including financial projections and business metrics and any underlying assumptions thereunder and future business plans and growth opportunities;

our future capital requirements and sources and uses of cash, including our ability to obtain additional capital in the future;

expectations regarding future acquisitions, partnerships or other relationships with third parties;

government regulation, including revised foreign content and ownership regulations;

the impact of the COVID-19 pandemic on our business and the actions we may take in the future in response thereto;

our ability to maintain the listing of our Class A common stock and warrants on Nasdaq; and

other factors detailed under the section entitled “Risk Factors” herein and in our Annual Report on Form 10-K for the year ended December 31, 2021.

The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the section entitled “Risk Factors” herein and in our Annual Report on Form 10-K for the year ended December 31, 2021. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material

3


Table of Contents

respects from those projected in these forward-looking statements. There may be additional risks that we consider immaterial or which are unknown. It is not possible to predict or identify all such risks. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

This Quarterly Report on Form 10-Q contains estimates and information concerning our industry, our business, and the market for our products and services, including our general expectations of our market position, market growth forecasts, our market opportunity, and size of the markets in which we participate, that are based on industry publications, surveys, and reports that have been prepared by independent third parties. This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to these estimates. Although we have not independently verified the accuracy or completeness of the data contained in these industry publications, surveys, and reports, we believe the publications, surveys, and reports are generally reliable, although such information is inherently subject to uncertainties and imprecision. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section titled “Risk Factors” herein and in our Annual Report on Form 10-K for the year ended December 31, 2021. These and other factors could cause results to differ materially from those expressed in these publications and reports.

Investors and others should note that we may announce material business and financial information to our investors using our investor relations website (https://investors.buzzfeed.com), U.S. Securities and Exchange Commission (“SEC”) filings, webcasts, press releases, and conference calls. We use these mediums to communicate with investors and the general public about our company, our products and services, and other issues. It is possible that the information that we make available may be deemed to be material information. We therefore encourage investors, the media, and others interested in our company to review the information that we post on our investor relations website.

4


Table of Contents

PART I: FINANCIAL INFORMATION

ITEM 1: Financial Statements (unaudited)

BUZZFEED, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

March 31, 

December 31,

2022

    

(Unaudited)

    

2021

Assets

Current assets

Cash and cash equivalents

$

74,540

$

79,733

Accounts receivable (net of allowance for doubtful accounts of $1,668 as at March 31, 2022 and $1,094 as at December 31, 2021)

 

98,092

 

142,909

Prepaid and other current assets

 

26,768

 

29,017

Total current assets

 

199,400

 

251,659

Property and equipment, net

 

23,065

 

23,052

Right-of-use assets

73,103

Capitalized software costs, net

 

17,902

 

16,554

Intangible assets, net

132,717

136,513

Goodwill

194,050

194,881

Prepaid and other assets

 

15,538

 

14,555

Total assets

$

655,775

$

637,214

Liabilities and Equity

Current liabilities

Accounts payable

$

14,673

$

16,025

Accrued expenses

 

23,584

 

31,386

Deferred rent

 

 

4,894

Deferred revenue

 

3,142

 

1,676

Accrued compensation

 

26,935

 

37,434

Current lease liabilities

24,258

Other current liabilities

 

2,706

 

2,731

Total current liabilities

 

95,298

 

94,146

Deferred rent

 

 

12,504

Noncurrent lease liabilities

66,174

Debt

 

143,032

 

141,878

Derivative liability

6,450

4,875

Warrant liabilities

8,354

4,938

Other liabilities

 

1,956

 

3,992

Total liabilities

 

321,264

 

262,333

Commitments and contingencies

Redeemable noncontrolling interest

 

2,458

 

2,294

Stockholders’ equity

Class A Common stock, $0.0001 par value; 700,000 shares authorized; 116,689 and 116,175 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively

 

12

 

11

Class B Common stock, $0.0001 par value; 20,000 shares authorized; 12,294 and 12,397 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively

 

1

 

1

Class C Common stock, $0.0001 par value; 10,000 shares authorized; 6,478 issued and outstanding at March 31, 2022 and December 31, 2021

 

1

 

1

Additional paid-in capital

 

700,167

 

695,869

Accumulated deficit

 

(367,000)

 

(322,106)

Accumulated other comprehensive loss

 

(3,336)

(3,233)

Total BuzzFeed, Inc. stockholders’ equity

 

329,845

 

370,543

Noncontrolling interests

2,208

2,044

Total stockholders’ equity

332,053

372,587

Total liabilities and equity

$

655,775

$

637,214

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

5


Table of Contents

BUZZFEED, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited) (In thousands, except per share amounts)

Three Months Ended March 31, 

    

2022

    

2021

Revenue

$

91,558

$

72,648

Costs and Expenses

Cost of revenue, excluding depreciation and amortization

 

60,818

 

42,123

Sales and marketing

 

17,803

 

11,378

General and administrative

 

32,562

 

23,702

Research and development

 

7,192

 

6,699

Depreciation and amortization

 

8,481

 

5,269

Total costs and expenses

 

126,856

 

89,171

Loss from operations

 

(35,298)

 

(16,523)

Other income, net

 

862

 

660

Interest expense, net

(4,789)

(278)

Change in fair value of warrant liabilities

(3,416)

Change in fair value of derivative liability

(1,575)

Loss before income taxes

 

(44,216)

 

(16,141)

Income tax provision (benefit)

 

350

 

(4,816)

Net loss

 

(44,566)

 

(11,325)

Net income attributable to the redeemable noncontrolling interest

 

164

 

60

Net income (loss) attributable to noncontrolling interests

164

(18)

Net loss attributable to BuzzFeed, Inc.

$

(44,894)

$

(11,367)

Net loss per Class A, Class B and Class C common share:

Basic

$

(0.33)

$

(0.75)

Diluted

$

(0.33)

$

(0.75)

Weighted average common shares outstanding:

Basic

136,425

15,188

Diluted

 

136,425

 

15,188

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

6


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BUZZFEED, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited) (In thousands)

Three Months Ended March 31, 

    

2022

    

2021

Net loss

$

(44,566)

$

(11,325)

Other comprehensive loss

 

 

Foreign currency translation adjustment

 

(103)

 

(329)

Other comprehensive loss

 

(103)

 

(329)

Comprehensive loss

 

(44,669)

 

(11,654)

Comprehensive income attributable to the redeemable noncontrolling interest

 

164

 

60

Comprehensive income (loss) attributable to noncontrolling interests

 

164

 

(18)

Comprehensive loss attributable to BuzzFeed, Inc.

$

(44,997)

$

(11,696)

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

7


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BUZZFEED, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(Unaudited) (In thousands)

Three Months Ended March 31, 2022

Accumulated

Total

Common Stock –

Common Stock –

Common Stock –

Additional

other

BuzzFeed, Inc.

Total

Class A

    

Class B

Class C

paid-in

Accumulated

comprehensive

stockholders'

Noncontrolling

stockholders’

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

capital

    

deficit

    

loss

equity

    

interests

    

equity

Balance at January 1, 2022

116,175

$

11

12,397

$

1

6,478

$

1

$

695,869

$

(322,106)

$

(3,233)

$

370,543

$

2,044

$

372,587

Net loss

(44,894)

(44,894)

164

(44,730)

Stock-based compensation

3,940

3,940

3,940

Issuance of common stock in connection with share-based plans

411

1

358

359

359

Other comprehensive loss

(103)

(103)

(103)

Conversion of Class B common stock to Class A common stock

103

(103)

Balance at March 31, 2022

116,689

$

12

12,294

$

1

6,478

$

1

$

700,167

$

(367,000)

$

(3,336)

$

329,845

$

2,208

$

332,053

    

 

    

Three Months Ended March 31, 2021

Accumulated 

Total BuzzFeed,

Common Stock –

Common Stock – Class

Common Stock – Class

other

Inc.

Total

Class A

B

C

Additional

Accumulated

 comprehensive 

stockholders’

Noncontrolling

stockholders’

    

Shares

    

Amount

    

Shares

    

Amount

    

Shares

    

Amount

    

paid-in capital

    

deficit

    

loss

    

 (deficit) equity

    

interests

    

(deficit) equity

Balance at January 1, 2021

1,540

$

 

10,439

$

1

 

$

$

36,373

$

(346,818)

$

(3,359)

$

(313,803)

$

$

(313,803)

 

Net loss

 

 

 

 

 

 

 

(11,367)

 

 

(11,367)

 

(18)

 

(11,385)

 

Issuance of common stock

 

 

 

 

3,839

 

1

 

34,999

 

 

 

35,000

 

 

35,000

 

HuffPost Acquisition

 

 

 

 

2,639

 

 

24,064

 

 

 

24,064

 

2,122

 

26,186

 

Stock-based compensation

 

 

 

 

 

 

138

 

 

 

138

 

 

138

 

Issuance of common stock upon exercise of stock options

6

 

 

49

 

 

 

 

142

 

 

 

142

 

 

142

 

Other comprehensive loss

 

 

 

 

 

 

 

 

(329)

 

(329)

 

(329)

 

Balance at March 31, 2021

1,546

$

 

10,488

$

1

 

6,478

$

1

$

95,716

$

(358,185)

$

(3,688)

$

(266,155)

$

2,104

$

(264,051)

 

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

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BUZZFEED, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited) (In thousands)

Three Months Ended March 31, 

    

2022

    

2021

Operating activities:

Net loss

$

(44,566)

$

(11,325)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

8,481

5,269

Unrealized loss (gain) on foreign currency

142

(180)

Stock based compensation

3,940

138

Change in fair value of warrants

3,416

Change in fair value of derivative liability

1,575

Amortization of debt discount and deferred issuance costs

1,154

Deferred income tax

507

(4,318)

Provision for doubtful accounts

 

574

(515)

Unrealized gain on investment

(1,260)

Non-cash lease expense

4,690

Changes in operating assets and liabilities:

Accounts receivable

 

44,227

37,076

Prepaid expenses and other current assets and prepaid expenses and other assets

 

2,864

(9,073)

Accounts payable

 

(5,741)

(2,004)

Deferred rent

 

(2,498)

Accrued compensation

 

(10,117)

(1,083)

Accrued expenses, other current liabilities and other liabilities

 

(4,688)

(1,685)

Lease liabilities

(5,517)

Deferred revenue

 

1,461

(284)

Cash provided by operating activities

 

1,142

9,518

Investing activities:

Capital expenditures

 

(2,369)

(907)

Capitalization of internal-use software

 

(3,553)

(1,335)

Cash from acquired business, net

 

 

5,200

Cash (used in) provided by investing activities

(5,922)

2,958

Financing activities:

Proceeds from issuance of common stock

35,000

Proceeds from exercise of stock options

358

142

Deferred reverse recapitalization costs

(585)

 

Cash (used in) provided by financing activities

(227)

35,142

Effect of currency translation on cash and cash equivalents

(186)

(534)

Net (decrease) increase in cash, cash equivalents and restricted cash

(5,193)

47,084

Cash and cash equivalents and restricted cash at beginning of period

79,733

106,126

Cash and cash equivalents and restricted cash at end of period

$

74,540

$

153,210

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

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BUZZFEED, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited) (Tabular amounts in thousands, except per share amounts)

1. Description of the Business

BuzzFeed, Inc. (referred to herein, collectively with its subsidiaries, as “BuzzFeed” or the “Company”) is a global media company with social, content-driven publishing technology. BuzzFeed provides breaking news, original reporting, entertainment, and video across its owned and operated brands and the social web to its global audience. BuzzFeed derives its revenue primarily from content, advertising and commerce sold to leading brands. The Company has one reportable segment.

On December 3, 2021 (the “Closing Date”), the Company consummated the previously announced business combinations in connection with (i) that certain Agreement and Plan of Merger, dated June 24, 2021 (as amended, the “Merger Agreement”), by and among 890 5th Avenue Partners, Inc., a Delaware corporation (“890”), Bolt Merger Sub I, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of 890 (“Merger Sub I”), Bolt Merger Sub II, Inc., a Delaware corporation and a direct, wholly-owned subsidiary of 890 (“Merger Sub II”), and BuzzFeed, Inc., a Delaware corporation (“ Legacy BuzzFeed”), pursuant to which (a) Merger Sub I merged with and into Legacy BuzzFeed (the “First Merger”), with Legacy BuzzFeed surviving the First Merger as a wholly-owned subsidiary of 890 and (b) immediately following the First Merger, Legacy BuzzFeed merged with and into Merger Sub II (the “Second Merger” and, together with the First Merger, the “Two-Step Merger”), with Merger Sub II surviving the Second Merger as a wholly-owned subsidiary of 890; and (ii) the Membership Interest Purchase Agreement, dated as of March 27, 2021 (as amended, the “C Acquisition Purchase Agreement”), by and among Legacy BuzzFeed, CM Partners, LLC, Complex Media, Inc., Verizon CMP Holdings LLC and HDS II, Inc., pursuant to which the surviving entity acquired 100% of the membership interests of CM Partners, LLC. CM Partners, LLC, together with Complex Media, Inc., is referred to herein as “Complex Networks.” The Two-Step Merger and the other transactions contemplated by the Merger Agreement, including the acquisition by the surviving entity of Complex Networks, are hereinafter referred to as the “Business Combination.” In connection with the consummation of the Business Combination, 890 was renamed “BuzzFeed, Inc.”

Liquidity

As of and for the three months ended March 31, 2022, the Company had cash and cash equivalents of  $74.5 million and positive operating cash inflows. However, the Company has a history of losses, and had an accumulated deficit of $367.0 million as of March 31, 2022. The Company has cash available on hand and management believes its existing capital resources will be sufficient to support the Company’s operations and meet its obligations as they become due within one year from the date these condensed consolidated financial statements are issued.

The Business Combination

On the Closing Date: (i) each issued and outstanding share of Class A common stock, par value $0.0001 per share (the “890 Class A common stock”), and Class F common stock, par value $0.0001 per share (the “890 Class F common stock”), of 890 became one share of BuzzFeed Class A common stock, par value $0.0001 per share (the “BuzzFeed Class A common stock”); (ii) each issued and outstanding whole warrant to purchase shares of 890 Class A common stock became a warrant to acquire one share of BuzzFeed Class A common stock at an exercise price of $11.50 per share (each a “BuzzFeed warrant”); and (iii) each issued and outstanding unit of 890 that had not been previously separated into the underlying share of 890 Class A common stock and the underlying warrants of 890 upon the request of the holder thereof was cancelled and entitled the holder thereof to one share of BuzzFeed Class A common stock and one-third of one BuzzFeed warrant.

In addition, on the Closing Date (i) each share of Legacy BuzzFeed Class A common stock and Legacy BuzzFeed preferred stock (other than Series F Preferred Stock and Series G Preferred Stock, any cancelled shares or dissenting shares) issued and outstanding was cancelled and automatically converted into the right to receive 0.306 shares of BuzzFeed Class A Common Stock; (ii) all of the shares of Series F Preferred Stock and Series G Preferred Stock issued and outstanding were cancelled and automatically converted into the right to receive 30,880,000 shares of BuzzFeed Class A Common Stock; (iii) each share of Class B Common Stock of Legacy BuzzFeed issued and outstanding (other than any cancelled shares or dissenting shares) was cancelled and automatically converted into the right to receive 0.306 shares of BuzzFeed Class B Common Stock; and (iv) each share of Class C Common Stock of Legacy BuzzFeed issued and outstanding was cancelled and automatically converted into the right to receive 0.306 shares of BuzzFeed Class C Common Stock, in each case in accordance with the applicable provisions of the Merger Agreement. As a result, shares of BuzzFeed capital stock no longer represent an ownership interest in Legacy BuzzFeed, but instead represent an ownership interest in BuzzFeed.

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In addition, pursuant to subscription agreements entered into in connection with the Merger Agreement, the Company issued, and certain investors purchased, $150.0 million aggregate principal amount of unsecured convertible notes due 2026 concurrently with the closing of the Business Combination (the “Notes”).

Holders of 27,133,519 shares of 890 Class A common stock sold in 890’s initial public offering (the “Public Shares”) properly exercised their right to have their public shares redeemed for a full pro rata portion of the trust account holding the proceeds from 890’s initial public offering, calculated as of two business days prior to the Closing, which was approximately $10.00 per share, or $271.3 million in the aggregate. Approximately $16.2 million remained in 890’s trust account and was used to partially fund the Business Combination.

The following table summarizes the proceeds raised and issuance costs incurred related to the Business Combination. The total net proceeds from the reverse recapitalization were paid in December 2021, except for $0.6 million which was paid in the first quarter of 2022.

Cash from reverse recapitalization

    

$

16,167

890 reverse recapitalization costs

 

(13,795)

BuzzFeed reverse recapitalization costs

 

(14,609)

Net proceeds from reverse recapitalization

$

(12,237)

Proceeds from Notes

$

150,000

Issuance costs

 

(6,757)

Issuance costs settled in stock

 

563

Proceeds from issuance of Notes, net of issuance costs

$

143,806

After giving effect to the Business Combination (including the issuance of 10,000,000 shares of BuzzFeed Class A common stock pursuant to the C Acquisition Purchase Agreement), the redemption of Public Shares as described above and the separation of the former 890 units, as of the Closing Date, there were 110,789,875 shares of BuzzFeed Class A common stock issued and outstanding, 15,872,459 shares of BuzzFeed Class B common stock issued and outstanding and 6,478,031 shares of BuzzFeed Class C common stock issued and outstanding.

The Two-Step Merger was accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded (the “Reverse Recapitalization”). Under this method of accounting, 890 was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Legacy BuzzFeed issuing stock for the net assets of 890, accompanied by a recapitalization. The net assets of 890 were stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Reverse Recapitalization are those of Legacy BuzzFeed.

The determination of Legacy BuzzFeed being the accounting acquirer for the Two-Step Merger was primarily based on evaluation of the following facts and circumstances: (i) Legacy BuzzFeed’s existing stockholders own the majority of the shares and have the majority of the voting interests in BuzzFeed with more than 97% of the voting interests; (ii) Legacy BuzzFeed appointed the majority of the directors on BuzzFeed’s Board; (iii) Legacy BuzzFeed’s existing management comprises the majority of the management of BuzzFeed; (iv) Legacy BuzzFeed is the larger entity based on historical revenues and business operations and comprises the majority of the ongoing operations of BuzzFeed; and (v) Legacy BuzzFeed assumed BuzzFeed’s name.

In accordance with guidance applicable to these circumstances, the equity structure has been recast in all comparative periods up to the Closing Date to reflect the number of shares of the Company’s common stock, $0.0001 par value per share, issued to Legacy BuzzFeed’s stockholders in connection with the Business Combination. As such, the shares and corresponding capital amounts and earnings per share related to Legacy BuzzFeed redeemable convertible preferred stock (other than Series F Preferred Stock and Series G Preferred Stock) and Legacy BuzzFeed common stock prior to the Business Combination have been retroactively recast as shares reflecting the Exchange Ratio of 0.306 established in the Business Combination. Shares of Legacy BuzzFeed Series F Preferred Stock and Series G Preferred Stock have been retroactively restated based on the exchange into 30,880,000 shares of BuzzFeed Class A common stock established in the Business Combination.

BuzzFeed Class A common stock and warrants commenced trading on the Nasdaq Stock Market LLC under the symbols “BZFD” and “BZFDW,” respectively, on December 6, 2021.

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COVID-19

In March 2020, the World Health Organization declared the viral strain of COVID-19 a global pandemic and recommended containment and mitigation measures worldwide. The spread of COVID-19 and the resulting economic contraction has resulted in increased business uncertainty and significantly impacted our business and results of operations.

We believe that the COVID-19 pandemic drove a shift in commerce from offline to online, including an increase in online shopping, which we believe contributed to the rapid growth we experienced in our commerce revenue for fiscal 2020. However, the growth of our commerce revenue has decelerated during 2021 and continuing in the first quarter of 2022 as shelter-in-place orders were lifted, consumers returned to shopping in stores, and retailers struggled with supply chain disruptions and labor shortages.

The continued duration and severity of the COVID-19 pandemic is uncertain, rapidly changing, and difficult to predict. The degree to which COVID-19-related disruptions impact the Company’s future results will depend on future developments, which are outside of the Company’s control, including, but not limited to, the duration of the pandemic, its severity, the success of actions taken to contain or prevent the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions can resume. Our growth rate may continue to be impacted by additional macroeconomic factors beyond our control, such as inflation, retail businesses reopening, increased consumer spending on travel and other discretionary items, and the absence of new U.S. and other government economic stimulus programs, among other things.

2. Summary of Significant Accounting Policies

Basis of Financial Statements and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. As such, the accompanying condensed consolidated financial statements and these related notes should be read in conjunction with the Company’s consolidated financial statements and related notes as of and for the year ended December 31, 2021, as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

The condensed consolidated financial statements include all normal recurring adjustments that, in the opinion of management, are necessary to present fairly the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year ended December 31, 2022.

The condensed consolidated financial statements include the accounts of BuzzFeed, Inc., and its wholly-owned and majority-owned subsidiaries, and any variable interest entities for which the Company is the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation.

Certain prior year figures have been reclassified to conform to current period presentation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported results of operations during the reporting period. Due to the use of estimates inherent in the financial reporting process actual results could differ from those estimates.

Key estimates and assumptions relate primarily to revenue recognition, fair values of intangible assets acquired in business combinations, valuation allowances for deferred income tax assets, allowance for doubtful accounts, fair value of the derivative liability, fair values used for stock-based compensation in periods prior to the Business Combination, useful lives of fixed assets, and capitalized software costs.

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Recently Adopted Accounting Pronouncements

The Company, an emerging growth company, or EGC, has elected to take advantage of the benefits of the extended transition period provided for in Section 7(a)(2)(B) of the Securities Act, for complying with new or revised accounting standards which allows the Company to defer adoption of certain accounting standards until those standards would otherwise apply to private companies.

In February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842), which supersedes existing guidance on accounting for leases in Leases (Topic 840) and generally requires leased assets and lease liabilities to be recognized on the balance sheet. On January 1, 2022, the Company adopted Accounting Standards Codification (“ASC”) 842 using the modified retrospective method. Prior period amounts were not adjusted and continue to be reported in accordance with historical accounting under ASC 840. The Company elected to use the package of practical expedients permitted under the transition guidance. Accordingly, the Company did not reassess (i) whether any expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases, or (iii) any initial direct costs for any existing leases. The Company elected to use the practical expedient to combine lease and non-lease components for all classes of assets. Additionally, the Company elected not to record on the balance sheet leases with a term of twelve months or less. Upon adoption, the Company recorded right of use assets of $77.8 million and lease liabilities of $96.0 million. The adoption of ASC 842 did not result in a material impact to the condensed consolidated statements of operations or cash flows. See Note 15 for more information about the adoption of ASC 842 and related disclosures.

In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other (Topic 350): Internal-Use Software (“ASU 2018-15”). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The guidance was effective for the Company for annual reporting periods beginning after December 15, 2020, and interim reporting periods beginning after December 15, 2021. The Company adopted ASU 2018-15 prospectively for the Company’s annual reporting period effective January 1, 2021 and for interim reporting periods beginning on January 1, 2022. The adoption did not have a significant impact on the Company’s condensed consolidated financial statements.

In October 2021, the FASB issued ASU No.2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). ASU 2021-08 requires an acquirer to account for revenue contracts acquired in a business combination in accordance with ASC 606, as if it had originated the contracts. Prior to ASU 2021-08, an acquirer generally recognized assets acquired and liabilities assumed in a business combination, including contract assets and contract liabilities arising from revenue contracts with customers and other similar contracts, at fair value on the acquisition date. As permitted by the ASU, the Company elected to early adopt the amendments in the fourth quarter of 2021 and retrospectively applied ASU 2021-08 to its acquisitions that occurred in 2021. The adoption of ASU 2021-08 did not have a significant impact on the Company’s condensed consolidated financial statements.

In August 2020, the FASB issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40), Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). The ASU eliminates two of the three models in ASC 470-20 that require separating embedded conversion features from convertible instruments. As a result, only conversion features accounted for under the substantial premium model in ASC 470-20 and those that require bifurcation in accordance with ASC 815-15 will be accounted for separately. For contracts in an entity’s own equity, the new guidance eliminates some of the requirements in ASC 815-40 for equity classification. The guidance also addresses how convertible instruments are accounted for in the diluted earnings per share (EPS) calculation and requires enhanced disclosures about the terms of convertible instruments and contracts in an entity’s own equity. Early adoption is permitted for all entities for fiscal periods beginning after December 15, 2020, including interim periods within the same fiscal year. The ASU allows entities to use a modified or full retrospective transition method. The Company elected to early adopt ASU 2020-06 effective January 1, 2021. The adoption of ASU 2020-06 did not have a significant impact on the Company’s condensed consolidated financial statements.

On January 1, 2021, the Company adopted the amended guidance in ASU 2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials, which aligns the accounting for capitalizing production costs of episodic television series with the guidance for films. As a result, the capitalization of costs incurred to produce episodic television series is no longer limited to the amount of revenue contracted in the initial market until persuasive evidence of a secondary market exists. In addition, under this guidance we test our film costs for impairment on a title-by-title basis or together with other films and series as part of a group, based on the predominant monetization strategy of the film or series. Further, for film costs monetized in a film group, the guidance requires any change to the estimated life of the film or television series to be accounted for prospectively. The guidance eliminates existing balance sheet classification guidance and adds new disclosure requirements relating to costs for acquired and

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produced films and television series. The adoption of this guidance did not have a material impact on the condensed consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326), which changes the impairment model for most financial assets, including accounts receivable, and replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. The guidance is effective for the Company for interim and annual periods beginning after December 15, 2022, with early adoption permitted. The Company is currently assessing the timing and impact of adopting ASU 2016-13 on the Company’s condensed consolidated financial statements.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this ASU simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, Income Taxes. The amendments also improve consistent application and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The guidance is effective for the Company for annual periods beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. The Company is currently assessing the timing and impact of adopting the new guidance on the Company’s condensed consolidated financial statements.

3. Acquisitions and Dispositions

C Acquisition

On December 3, 2021, the Company completed the acquisition of 100% of the members’ interests of Complex Networks, a publisher of online media content targeting Millennial and Gen Z consumers (the “C Acquisition”).

The following table summarizes the fair value of consideration exchanged as a result of the C Acquisition:

Cash consideration(1)

    

$

197,966

Share consideration(2)

 

96,200

Total consideration

$

294,166


(1) Includes the cash purchase price of $200.0 million adjusted for certain closing specified liabilities as specified in the C Acquisition Purchase Agreement.

(2) Represents 10,000,000 shares of BuzzFeed Class A common stock at a price of $9.62 per share, which is based on the Company’s closing stock price for Class A common stock on the Closing Date.

The following table summarizes the preliminary determination of the fair value of identifiable assets acquired and liabilities assumed from the C Acquisition. The purchase price allocation for the assets acquired and liabilities assumed may be subject to change as additional information is obtained during the acquisition measurement period. As the Company continues to finalize the fair value of assets acquired and liabilities assumed, purchase price adjustments have been recorded and additional purchase price adjustments may

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be recorded during the measurement period. The Company reflects measurement period adjustments in the period in which the adjustments occur.

    

Measurement

Period

Preliminary

Adjustments

Updated Preliminary

Cash

    

$

2,881

$

2,881

Accounts receivable

 

22,581

11

22,592

Prepaid and other current assets

 

17,827

17,827

Property and equipment

 

332

(15)

317

Intangible assets

 

119,100

119,100

Goodwill

 

189,391

(831)

188,560

Accounts payable

 

(2,661)

(2,661)

Accrued expenses

 

(12,319)

486

(11,833)

Accrued compensation

 

(12,867)

349

(12,518)

Deferred revenue

 

(5,855)

(5,855)

Deferred tax liabilities

 

(22,776)

(22,776)

Other liabilities

 

(1,468)

(1,468)

Total consideration for Complex Networks

 

$

294,166

$

294,166

The table below indicates the estimated fair value of each of the identifiable intangible assets:

    

    

Weighted Average 

Asset Fair Value

Useful Life (Years)

Trademarks & tradenames

 

97,000

 

15

Customer relationships

 

17,000

 

4

Developed technology

 

5,100

 

3

The fair values of the intangible assets were estimated using Level 3 inputs. The fair value of trademarks and trade names was determined using the relief from royalty method, the fair value of customer relationships was determined using the multi-period excess earnings approach, and the fair value of acquired technology was determined using the replacement cost approach. The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired resulted in $188.6 million of goodwill, which is primarily attributed to workforce and synergies, and is not deductible for tax purposes.

Pro Forma Financial Information

The following unaudited pro forma information has been presented as if the C Acquisition occurred on January 1, 2020. The information is based on the historical results of operations of Complex Networks, adjusted for:

1.The allocation of purchase price and related adjustments, including adjustments to amortization expense related to the fair value of intangible assets acquired;
2.Impacts of issuance of the Notes to partially fund the acquisition, including interest;
3.The movement and allocation of all acquisition-related costs incurred during the three months ended March 31, 2021 to the three months ended March 31, 2020;
4.Associated tax-related impacts of adjustments; and
5.Changes to align accounting policies.

The pro forma results do not necessarily represent what would have occurred if the C Acquisition had taken place on January 1, 2020, nor do they represent the results that may occur in the future. The pro forma adjustments were based on available information and

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upon assumptions that the Company believes are reasonable to reflect the impact of this acquisition on the Company’s historical financial information on a supplemental pro forma basis. The following table presents the Company’s pro forma combined revenue and net loss.

    

Three Months Ended March 31,

2021

Revenue

$

92,662

Net loss

 

(18,443)

Acquisition of HuffPost and Verizon Investment

On February 16, 2021, the Company completed the acquisition of 100% of TheHuffingtonPost.com, Inc. (“HuffPost”) (the “HuffPost Acquisition”), a publisher of online news and media content, from entities controlled by Verizon Communications Inc. (“Verizon”). The Company issued 6,478,032 shares of non-voting BuzzFeed Class C common stock to an entity controlled by Verizon, of which 2,639,322 were in exchange for the acquisition of HuffPost and 3,838,710 were in exchange for a concurrent $35.0 million cash investment in the Company by Verizon, which was accounted for as a separate transaction.

The following table summarizes the fair value of consideration exchanged as a result of the HuffPost Acquisition:

Fair value of common stock issued(1)

    

$

24,064

Working capital adjustments

 

(490)

Total consideration

$

23,574


(1) – Represents 8,625,234 shares of Legacy BuzzFeed common stock issued at a value of $2.79 per share. The fair value per share was determined using Level 3 inputs using a combination of a market approach based on guideline public companies and an income approach based on estimated discounted cash flows.

The following table summarizes the determination of the fair value of identifiable assets acquired and liabilities assumed from the HuffPost Acquisition. During the year ended December 31, 2021, the Company finalized the fair value of assets acquired and liabilities assumed. Measurement period adjustments were reflected in the fourth quarter of 2021, which is the period in which the adjustments occurred. The adjustments resulted from deferred income tax adjustments.

    

    

Measurement 

    

Period 

Preliminary

Adjustments

Final

Cash and cash equivalents

 

$

5,513

 

$

 

$

5,513

Accounts receivable

 

3,383

 

 

3,383

Prepaid and other current assets

 

611

 

 

611

Deferred tax assets

 

116

 

15

 

131

Property and equipment

 

620

 

 

620

Intangible assets

 

19,500

 

 

19,500

Goodwill

 

5,927

 

(437)

 

5,490

Accounts payable

 

(1,410)

 

 

(1,410)

Accrued expenses

 

(4,249)

 

 

(4,249)

Deferred tax liabilities

 

(4,251)

 

422

 

(3,829)

Other liabilities

 

(63)

 

 

(63)

Noncontrolling interests

 

(2,123)

 

 

(2,123)

Total consideration for HuffPost

$

23,574

$

$

23,574

The fair values of the intangible assets were estimated using Level 3 inputs. The fair value of trademarks and trade names was determined using the relief from royalty method and the fair value of acquired technology was determined using the replacement cost approach. The useful lives of the acquired trademarks and trade names and acquired technology are 15 years and three years, respectively. The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired resulted in $5.5 million of goodwill, which is primarily attributed to workforce and synergies, and is not deductible for tax purposes.

The HuffPost Acquisition did not have a material impact on the Company’s revenue or net loss for the three months ended March 31, 2021.

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4. Revenue Recognition

Disaggregated Revenue

The table below presents the Company’s revenue disaggregated based on the nature of its arrangements. Management uses these categories of revenue to evaluate the performance of its businesses and to assess its financial results and forecasts.

Three Months Ended March 31,

    

2022

    

2021

Advertising

$

48,668

$

38,649

Content

 

32,279

 

19,537

Commerce and other

 

10,611

 

14,462

Total

$

91,558

$

72,648

The following table presents the Company’s revenue disaggregated by geography:

    

Three Months Ended March 31,

2022

2021

Revenue:

United States

$

83,100

$

65,602

International

8,458

 

7,046

Total

$

91,558

$

72,648

Contract Balances

The timing of revenue recognition, billings and cash collections can result in billed accounts receivable, unbilled receivables (contract assets), and deferred revenues (contract liabilities). The payment terms and conditions within the Company’s contracts vary by type, the substantial majority of which require that customers pay for their services on a monthly or quarterly basis, as the services are being provided. When the timing of revenue recognition differs from the timing of payments made by customers, the Company recognizes either unbilled revenue (its performance precedes the billing date) or deferred revenue (customer payment is received in advance of performance). In addition, we have determined our contracts generally do not include a significant financing component.

The Company’s contract assets are presented in Prepaid and other current assets on the accompanying condensed consolidated balance sheets and totaled $6.8 million and $13.3 million at March 31, 2022 and December 31, 2021, respectively. These amounts relate to revenue recognized during the respective year that is expected to be invoiced and collected in the next twelve months.

The Company’s contract liabilities, which are recorded in Deferred revenue on the accompanying condensed consolidated balance sheets, are expected to be recognized as revenues during the succeeding twelve-month period. Deferred revenue totaled and $3.1 million and $1.7 million at March 31, 2022 and December 31, 2021, respectively.

The amount of revenue recognized during the three months ended March 31, 2022 that was included in the deferred revenue balance as of December 31, 2021 was $1.0 million.

Transaction Price Allocated to Remaining Performance Obligations

We have certain licensing contracts with minimum guarantees and terms extending beyond one year. Revenue to be recognized related to the remaining performance obligations was $3.0 million at March 31, 2022 and is expected to be recognized over the next three years. This amount does not include: (i) contracts with an original expected duration of one year or less, such as advertising contracts, (ii) variable consideration in the form of sales-based royalties, and (iii) variable consideration allocated entirely to wholly unperformed performance obligations.

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5. Fair Value Measurements

The Company’s financial assets and liabilities that are measured at fair value on a recurring basis are summarized below:

    

March 31, 2022

Level 1

Level 2

Level 3

Total

Assets:

    

    

    

Cash equivalents:

Money market funds

$

$

$

$

Total

$

$

$

$

Liabilities:

 

  

 

  

 

  

 

  

Derivative liability

$

$

$

6,450

$

6,450

Other non-current liabilities:

 

  

 

  

 

  

 

  

Public Warrants

 

8,107

 

 

 

8,107

Private Warrants

 

 

247

 

 

247

Total

$

8,107

$

247

$

6,450

$

14,804

    

December 31, 2021

    

Level 1

    

Level 2

    

Level 3

    

Total

Assets:

Cash equivalents:

Money market funds

$

1

 

$

$

$

1

Total

$

1

 

$

$

$

1

Liabilities:

 

  

 

 

 

  

Derivative liability

$

 

$

$

4,875

$

4,875

Other non-current liabilities:

 

  

 

 

 

  

Public Warrants

 

4,792

 

 

4,792

Private Warrants

 

 

146

 

146

Total

$

4,792

 

$

146

$

4,875

$

9,813

The Company’s investments in money market funds are measured at amortized cost, which approximates fair value.

The Company’s warrant liability as of March 31, 2022 and December 31, 2021 includes public and private warrants that were originally issued by 890, but which were assumed by the Company as part of the Closing of the Business Combination (the “Public Warrants” and “Private Warrants”, respectively, or together, the “Public and Private Warrants”). The Public and Private Warrants are recorded on the balance sheet at fair value. The carrying amount is subject to remeasurement at each balance sheet date. With each remeasurement, the carrying amount is adjusted to fair value, with the change in fair value recognized in the Company’s condensed consolidated statements of operations and comprehensive loss.

The Public Warrants are publicly traded under the symbol “BZFDW”, and the fair value of the Public Warrants at a specific date is determined by the closing price of the Public Warrants as of that date. As such, the Public Warrants are classified within Level 1 of the fair value hierarchy. The closing price of the Public Warrants was $0.85 and $0.50 as of March 31, 2022 and December 31, 2021, respectively.

As of March 31, 2022 and December 31, 2021, Level 3 instruments consisted of the Company’s derivative liability related to the Notes. Fair value measurements categorized within Level 3 are sensitive to changes in the assumptions or methodologies used to determine fair value, and such changes could result in a significant increase or decrease in the fair value. To measure the fair value of the derivative liability, the Company compared the calculated value of the Notes with the indicated value of the host instrument, defined as the straight-debt component of the Notes. The difference between the value of the straight-debt host instrument and the fair value of

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the Notes resulted in the value of the derivative liability. The value of the straight-debt host instrument was estimated based on a binomial lattice model, excluding the conversion option and the make-whole payment upon conversion.

The following table provides quantitative information regarding the significant unobservable inputs used by the Company related to the derivative liability:

    

March 31, 

    

December 31,

 

    

2022

    

2021

 

Term (in years)

 

4.7

 

4.9

Risk-free rate

 

2.42

%  

1.25

%

Volatility

 

35.4

%  

31.5

%

The following table represents the activity of the Level 3 instruments:

    

Derivative

 Liability

Balance as of December 31, 2021

$

4,875

Change in fair value of derivative liability

 

1,575

Balance as of March 31, 2022

$

6,450

There were no transfers between fair value measurement levels during the three months ended March 31, 2022.

Equity Investment

For equity investments in entities that the Company does not exercise significant influence over, if the fair value of the investment is not readily determinable, the investment is accounted for at cost, and adjusted for subsequent observable price changes. If the fair value of the investment is readily determinable, the investment is accounted for at fair value. The Company reviews equity investments without readily determinable fair values at each period end to determine whether they have been impaired.

As of March 31, 2022 and December 31, 2021, the Company had an investment in equity securities of a privately-held company without a readily determinable fair value. The total carrying value of the investment, included in prepaid and other assets on the condensed consolidated balance sheets, was $3.6 million and $2.3 million as of March 31, 2022 and December 31, 2021, respectively. The Company concluded that the fair value of the investment increased $1.3 million during the three months ended March 31, 2022 as the result of observable price changes in orderly transactions for a similar investment in the same issuer.

6. Property and Equipment, net

Property and equipment, net consisted of the following:

    

March 31, 2022

    

December 31, 2021

Leasehold improvements

$

49,692

$

47,573

Furniture and fixtures

 

6,160

 

6,029

Computer equipment

 

5,343

 

5,134

Video equipment

 

648

 

648

Total

61,843

59,384

Less: Accumulated depreciation

 

(38,778)

 

(36,332)

Net Carrying Value

$

23,065

$

23,052

Depreciation totaled $2.5 million and $1.9 million for the  three months ended March 31, 2022 and 2021, respectively, included in Depreciation and amortization expense.

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7. Capitalized Software Costs, net

Capitalized software costs, net consisted of the following:

    

March 31,2022

    

December 31,2021

Website and internal-use software

$

85,461

$

81,908

Less: Accumulated amortization

 

(67,559)

 

(65,354)

Net Carrying Value

$

17,902

$

16,554

During the three months ended March 31, 2022 and 2021, the Company capitalized $3.6 million and $1.3 million, respectively, included in Capitalized software costs and amortized $2.2 million and $3.0 million, respectively, included in Depreciation and amortization expense.

8. Intangible Assets, net

The following table presents the detail of intangible assets for the periods presented and the weighted average remaining useful lives:

    

March 31, 2022

    

December 31, 2021

Weighted-

Weighted-

Average 

Average

Remaining 

Gross 

Remaining 

Useful Lives

Carrying 

Accumulated 

Net Carrying 

Useful Lives

Gross Carrying 

Accumulated 

    

(in years)

    

Value

    

Amortization

    

Value

    

(in years)

    

Value

    

Amortization

    

Net Carrying Value

Acquired Technology

 

2

$

10,600

$

2,628

$

7,972

3

$

10,600

$

1,745

$

8,855

Trademarks and Trade Names

 

15

 

111,000

 

3,206

 

107,794

15

 

111,000

 

1,356

 

109,644

Trademarks and Trade Names

 

Indefinite

 

1,368

 

 

1,368

Indefinite

 

1,368

 

 

1,368

Customer Relationships

 

4

 

17,000

 

1,417

 

15,583

4

 

17,000

 

354

 

16,646

Total

$

139,968

$

7,251

$

132,717

$

139,968

$

3,455

$

136,513

Amortization expense associated with intangible assets for the three months ended March 31, 2022 and 2021 was $3.8 million and $0.3 million, respectively, included in Depreciation and amortization expense.

Estimated future amortization expense as of March 31, 2022 is as follows (in thousands):

Remainder of 2022

    

$

11,387

2023

 

15,183

2024

 

13,438

2025

 

11,296

2026

 

7,400

Thereafter

 

72,645

Total

$

131,349

9. Debt

Revolving Credit Facility

On December 30, 2020, the Company entered into a new three-year, $50.0 million, revolving loan and standby letter of credit facility agreement (the “Revolving Credit Facility”). The Revolving Credit Facility provides for the issuance of up to $15.5 million of standby letters of credit and aggregate borrowings under the Revolving Credit Facility are generally limited to 95% of qualifying investment grade accounts receivable and 90% of qualifying non-investment grade accounts receivable, subject to adjustment at the discretion of the lenders. The Revolving Credit Facility includes covenants that, among other things, require the Company to maintain at least $25.0 million of unrestricted cash at all times, and limits the ability of the Company to incur additional indebtedness, pay

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dividends, hold unpermitted investments, or make material changes to the business. The Company was in compliance with the financial covenant as of March 31, 2022. The $15.5 million of standby letters of credit were issued during the three months ended March 31, 2021 in favor of certain of the Company’s landlords. The Revolving Credit Facility was amended and restated in connection with the closing of the Business Combination, namely to, among other things, add the Company and certain other entities as guarantors.

Borrowings under the Revolving Credit Facility bear interest at LIBOR, subject to a floor rate of 0.75%, plus a margin of 3.75% to 4.25%, depending on the level of the Company’s utilization of the facility (4.50% at March 31, 2022), and subject to a monthly minimum utilization of $15.0 million. The facility also includes an unused commitment fee of 0.375%.

The Company had outstanding borrowings of $28.5 million and outstanding letters of credit of $15.5 million under the Revolving Credit Facility at March 31, 2022 and December 31, 2021. The total unused borrowing capacity was $6.0 million and $5.4 million as of March 31, 2022 and December 31, 2021, respectively.

As of March 31, 2022 and December 31, 2021, the Company had $0.3 million of costs in connection with the issuance of debt included in prepaid and other assets in the condensed consolidated balance sheet.

Convertible Notes

In June 2021, the Company entered into subscription agreements with certain purchasers to sell $150.0 million aggregate principal amount of unsecured convertible notes due 2026. In connection with the Business Combination, the Company completed the Convertible Note Financing of $150.0 million of unsecured convertible notes. The Notes bear interest at a rate of 8.50% per annum, payable semi-annually. The Notes are convertible into shares of Class A common stock, or a combination of cash and Class A common stock, at the Company’s election, at an initial conversion price of $12.50 and mature on December 3, 2026.

The Company may, at its election, force conversion of the Notes after the third anniversary of the issuance of the Notes, subject to a holder’s prior right to convert and certain other conditions, if the volume-weighted average trading price of the BuzzFeed Class A common stock is greater than or equal to 130% of the conversion price for more than 20 trading days during a period of 30 consecutive trading days. In the event that a holder of the Notes elects to convert its Notes after the one year anniversary, and prior to the three-year anniversary, of the issuance of the Notes, the Company will be obligated to pay an amount equal to: (i) from the one year anniversary of the issuance of the Notes to the two year anniversary of the issuance of the Notes, an amount equal to 18 month’s interest declining ratably on a monthly basis to 12 month’s interest on the aggregate principal amount of the Notes so converted and (ii) from the two year anniversary of the issuance of the Notes to the three year anniversary of the issuance of the Notes, an amount equal to 12 month’s interest declining ratably on a monthly basis to zero month’s interest, in each case, on the aggregate principal amount of the Notes so converted (the “Interest Make-Whole Payment”). The Interest Make-Whole Payment will be payable in cash. Without limiting a holder’s right to convert the Notes at its option, interest will cease to accrue on the Notes during any period in which the Company would otherwise be entitled to force conversion of the Notes, but is not permitted to do so solely due to the failure of a trading volume condition specified in the indenture governing the Notes.

Each holder of a Note will have the right to cause the Company to repurchase for cash all or a portion of the Notes held by such holder (i) at any time after the third anniversary of the closing date, at a price equal to par plus accrued and unpaid interest; or (ii) at any time upon the occurrence of a fundamental change (as defined in the indenture governing the Notes), at a price equal to 101% of par plus accrued and unpaid interest.

The indenture governing the Notes includes restrictive covenants that, among other things, limit the Company’s ability to incur additional debt or liens, make restricted payments or investments, dispose of significant assets, transfer intellectual property, or enter into transactions with affiliates.

In accounting for the Notes, the Company bifurcated a derivative liability representing the conversion option, with a fair value at issuance of $31.6 million. To measure the fair value of the derivative liability, the Company compared the calculated value of the Notes with the indicated value of the host instrument, defined as the straight-debt component of the Notes. The difference between the value of the straight-debt host instrument and the fair value of the Notes resulted in the value of the derivative liability. The value of the straight-debt host instrument was estimated based on a binomial lattice model, excluding the conversion option and the make-whole payment upon conversion. The derivative liability is remeasured at each reporting date with the resulting gain or loss recorded in Change in fair value of derivative liability within the condensed consolidated statements of operations.

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Interest expense on the Notes is recognized at an effective interest rate of 15% and totaled $4.3 million for the three months ended March 31, 2022, of which amortization of the debt discount and issuance costs comprised $1.2 million.

The net carrying amount of the Notes as of March 31, 2022 and December 31, 2021 was:

    

March 31, 2022

    

December 31, 2021

Principal outstanding

    

$

150,000

$

150,000

Unamortized debt discount and issuance costs

 

(35,473)

(36,627)

Net carrying value

$

114,527

$

113,373

The fair value of the Notes was approximately $127.5 million and $126.0 million as of March 31, 2022 and December 31, 2021, respectively. The fair value of the Notes was estimated using Level 3 inputs.

10.Redeemable Noncontrolling Interest

The redeemable noncontrolling interest represents the interests in BuzzFeed Japan held by Yahoo Japan, which is puttable to the Company in certain conditions, none of which were met at March 31, 2022, including material breach of the Joint Venture Agreement with Yahoo Japan (“JVA”) by the Company or the bankruptcy or liquidation of the Company. The redeemable noncontrolling interest is presented outside of the permanent equity on the Company’s condensed consolidated balance sheets as the put right is outside of the Company’s control. Pursuant to the terms of the original JVA, Yahoo Japan held a 49% interest in BuzzFeed Japan. On May 1, 2021, The HuffingtonPost Japan, Limited, a consolidated subsidiary, merged into BuzzFeed Japan. As a result of the merger, Yahoo Japan’s interest in the combined entity was diluted to 24.5%.

The table below presents the reconciliation of changes in redeemable noncontrolling interest:

    

2022

    

2021

Balance as of January 1,

$

2,294

$

848

Allocation of net (income) loss

 

164

 

60

Balance as of March 31,

$

2,458

$

908

11.Stockholders’ Equity

Common Stock

In connection with the closing of the Business Combination, the Company authorized the issuance of 700,000,000 shares of Class A common stock, par value $0.0001 per share, 20,000,000 shares of Class B common stock, par value $0.0001 per share, and 10,000,000 shares of Class C common stock, par value $0.0001 per share. Each share of Class A common stock is entitled to one vote and each share of Class B common stock is entitled to fifty votes. Class C common stock is non-voting.

Preferred Stock

In connection with the closing of the Business Combination, the Company authorized the issuance of 50,000,000 shares of preferred stock, par value $0.0001 per share. The board of directors is authorized, without further stockholder approval, to issue such preferred stock in one or more series, to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. There were no issued and outstanding shares of preferred stock as of March 31, 2022 or December 31, 2021.

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Stock-Based Compensation

Stock Options

A summary of the stock option activity under the Company’s equity incentive plans is presented below:

    

    

Weighted

    

Weighted

    

Average

Average

Aggregate 

Number of

Exercise

Remaining

Intrinsic

    

Shares

    

Price

    

Term

    

 Value

Balance as of December 31, 2021

 

4,560

$

6.29

 

3.07

$

2,670

Granted

 

593

 

4.33

Exercised

 

(308)

 

1.02

Forfeited

 

(83)

 

6.48

Expired

 

(407)

 

7.38

Balance as of March 31, 2022