UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2024

☐ 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: 001-40079

RUMBLE INC.

(Exact name of registrant as specified in its charter)

Delaware		85-1087461
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

444 Gulf of Mexico Dr
Longboat Key, FL 34228

(Address of Principal Executive Offices, including zip code)

(941) 210-0196

(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, par value $0.0001 per share	RUM	The Nasdaq Global Market
Warrants to purchase one share of Class A common stock	RUMBW	The Nasdaq Global Market

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 August 8, 2024, the registrant had issued and outstanding (i) 118,077,296 shares of Class A common stock, par value $0.0001 per share, (ii) 165,153,628 shares of Class C common stock, par value $0.0001 per share, and (iii) 105,782,403 shares of Class D common stock, par value $0.0001 per share.

RUMBLE INC.

Quarterly Report on Form 10-Q

TABLE OF CONTENTS

		Page
PART 1 - FINANCIAL INFORMATION		1

Item 1.	Unaudited Condensed Consolidated Financial Statements	1

	Unaudited Condensed Consolidated Statements of Operations	3

	Unaudited Condensed Consolidated Balance Sheets	4

	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity	5

	Unaudited Condensed Consolidated Statements of Cash Flows	7

	Notes to Unaudited Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38

Item 4.	Control and Procedures	38

PART II - OTHER INFORMATION		39

Item 1A.	Risk Factors	40

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42

Item 6.	Exhibits	43

SIGNATURES		44

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements regarding, among other things, our plans, strategies and prospects, both business and financial. These statements are based on the beliefs and assumptions of our management. Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot provide assurance that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “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. Investors should read statements that contain these words carefully because they discuss future expectations, contain projects of future results of operations or financial condition; or state other “forward-looking” information. Forward-looking statements are based on information available as of the date of this Quarterly Report and may involve significant judgments and assumptions, known and unknown risks and uncertainties and other factors, many of which are outside our control. There may be events in the future that management is not able to predict accurately or over which we have no control. We do not undertake any obligation to update to otherwise correct any forward-looking statements contained herein to reflect events or circumstances after the date they were made, whether as a result of new information, future events, inaccuracies that become apparent after the date hereof or otherwise, except as may be required under applicable laws. The risk factors and cautionary language contained in this Quarterly Report provide examples of risks, uncertainties, and events that may cause actual results to differ materially from the expectations described in such forward-looking statements, including among other things:

●

our ability to grow and manage future growth profitably over time, maintain relationships with customers, compete within our industry and retain key employees;

●

the possibility that we may be adversely impacted by economic, business, and/or competitive factors;

●

our limited operating history makes it difficult to evaluate our business and prospects;

●

our recent and rapid growth may not be indicative of future performance;

●

we may not continue to grow or maintain our active user base, and we may not be able to achieve or maintain profitability;

●

risks relating to our ability to attract new advertisers, or the potential loss of existing advertisers or the reduction of or failure by existing advertisers to maintain or increase their advertising budgets;

●

Rumble Cloud, our recently launched cloud business may not achieve success, and, as a result, our business, financial condition and results of operations could be adversely affected;

●

negative media campaigns may adversely impact our financial performance, results of operations, and relationships with our business partners, including content creators and advertisers;

●

spam activity, including inauthentic and fraudulent user activity, if undetected, may contribute to some amount of overstatement of our performance indicators, including reporting of MAUs by Google;

●

we collect, store, and process large amounts of user video content and personal information of our users and subscribers. If our security measures are breached, our sites and applications may be perceived as not being secure, traffic and advertisers may curtail or stop viewing our content or using our services, our business and operating results could be harmed, and we could face governmental investigations and legal claims from users and subscribers;

●

we may fail to comply with applicable privacy laws;

●

we are subject to cybersecurity risks and interruptions or failures in our information technology systems and as we grow and gain recognition, we will likely need to expend additional resources to enhance our protection from such risks. Notwithstanding our efforts, a cyber incident could occur and result in information theft, data corruption, operational disruption and/or financial loss;

●

we may be found to have infringed on the intellectual property of others, which could expose us to substantial losses or restrict our operations;

●

we may face liability for hosting a variety of tortious or unlawful materials uploaded by third parties, notwithstanding the liability protections of Section 230 of the Communications Decency Act of 1996 (“Section 230”);

●

we may face negative publicity for removing, or declining to remove, certain content, regardless of whether such content violated any law;

●

paid endorsements by our content creators may expose us to regulatory risk, liability, and compliance costs, and, as a result, may adversely affect our business, financial condition and results of operations;

●

our traffic growth, engagement, and monetization depend upon effective operation within and compatibility with operating systems, networks, devices, web browsers and standards, including mobile operating systems, networks, and standards that we do not control;

●

our business depends on continued and unimpeded access to our content and services on the internet. If we or those who engage with our content experience disruptions in internet service, or if internet service providers are able to block, degrade or charge for access to our content and services, we could incur additional expenses and the loss of traffic and advertisers;

●

we face significant market competition, and if we are unable to compete effectively with our competitors for traffic and advertising spend, our business and operating results could be harmed;

●

we rely on data from third parties to calculate certain of our performance metrics. Real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business;

●

changes to our existing content and services could fail to attract traffic and advertisers or fail to generate revenue;

●

we derive the majority of our revenue from advertising. The failure to attract new advertisers, the loss of existing advertisers, or the reduction of or failure by existing advertisers to maintain or increase their advertising budgets would adversely affect our business;

●

we depend on third-party vendors, including internet service providers, advertising networks, and data centers, to provide core services;

iii

●

hosting and delivery costs may increase unexpectedly;

	●	we have offered and intend to continue to offer incentives, including economic incentives, to content creators to join our platform, and these arrangements may involve fixed payment obligations that are not contingent on actual revenue or performance metrics generated by the applicable content creator but rather are based on our modeled financial projections for that creator, which if not satisfied may adversely impact our financial performance, results of operations and liquidity;

	●	we may be unable to develop or maintain effective internal controls;

●

potential diversion of management’s attention and consumption of resources as a result of acquisitions of other companies and success in integrating and otherwise achieving the benefits of recent and potential acquisitions;

●

we may fail to maintain adequate operational and financial resources or raise additional capital or generate sufficient cash flows;

●

changes in tax rates, changes in tax treatment of companies engaged in e-commerce, the adoption of new tax legislation, or exposure to additional tax liabilities may adversely impact our financial results;

●

compliance obligations imposed by new privacy laws, laws regulating social media platforms and online speech in certain jurisdictions in which we operate, or industry practices may adversely affect our business; and

●

other risks and uncertainties indicated in this Quarterly Report and in other filings that we have made or will make with the Securities and Exchange Commission (the “SEC”), including the risk factors described under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023.

PART I - FINANCIAL INFORMATION

ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Rumble Inc.

Condensed Consolidated Interim Financial Statements

(Expressed in U.S. Dollars)

For the three and six months ended June 30, 2024 and 2023

Rumble Inc.

Condensed Consolidated Interim Financial Statements

(Expressed in U.S. Dollars)

For the three and six months ended June 30, 2024 and 2023

	Contents
Condensed Consolidated Interim Financial Statements
Condensed Consolidated Interim Statements of Operations	3
Condensed Consolidated Interim Balance Sheets	4
Condensed Consolidated Interim Statements of Shareholders’ Equity	5
Condensed Consolidated Interim Statements of Cash Flows	7
Notes to the Condensed Consolidated Interim Financial Statements	8-22

Rumble Inc.

Condensed Consolidated Interim Statements of Operations

(Expressed in U.S. Dollars)

(Unaudited)

	Three months ended June 30,						Six months ended June 30,
	2024			2023			2024			2023

Revenues	$	22,469,543		$	24,974,054		$	40,202,999		$	42,589,429

Expenses
Cost of services (content, hosting, other)	$	35,692,133		$	40,849,816		$	67,520,487		$	66,864,181
General and administrative		10,415,016			9,199,183			19,737,395			17,794,279
Research and development		5,319,230			4,348,760			9,847,022			6,966,419
Sales and marketing		6,274,749			3,697,312			9,571,491			7,032,877
Acquisition-related transaction costs		-			704,202			-			704,202
Amortization and depreciation		3,564,219			1,043,560			5,990,361			1,724,634
Changes in fair value of contingent consideration		17,768			(373,996	)		1,354,357			(373,996	)

Total expenses		61,283,115			59,468,837			114,021,113			100,712,596

Loss from operations		(38,813,572	)		(34,494,783	)		(73,818,114	)		(58,123,167	)
Interest income		2,174,166			3,570,423			4,696,118			6,878,350
Other expense		(3,869	)		(2,495	)		(73,577	)		(18,401	)
Changes in fair value of warrant liability		10,014,200			1,489,250			(723,695	)		(6,842,500	)

Loss before income taxes		(26,629,075	)		(29,437,605	)		(69,919,268	)		(58,105,718	)
Income tax expense		(151,625	)		(16,475	)		(151,472	)		(16,475	)

Net loss	$	(26,780,700	)	$	(29,454,080	)	$	(70,070,740	)	$	(58,122,193	)

Loss per share – basic and diluted	$	(0.13	)	$	(0.15	)	$	(0.35	)	$	(0.29	)
Weighted-average number of common shares used in computing net loss per share - basic and diluted		204,091,819			201,257,144			202,998,041			201,006,921

Share-based compensation expense included in expenses:
Cost of services (content, hosting, and other)	$	2,538,203		$	689,732		$	2,927,113		$	1,198,807
General and administrative		3,061,516			2,743,507			7,037,387			4,438,058
Research and development		666,468			298,176			937,340			365,274
Sales and marketing		291,194			129,261			418,435			167,747
Total share-based compensation expense	$	6,557,381		$	3,860,676		$	11,320,275		$	6,169,886

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

Rumble Inc.

Condensed Consolidated Interim Balance Sheets

(Expressed in U.S. Dollars)

(Unaudited)

	June 30, 2024			December 31, 2023
Assets

Current assets
Cash and cash equivalents	$	153,103,502		$	218,338,658
Marketable securities		1,135,200			1,135,200
Accounts receivable		10,093,581			5,440,447
Prepaid expenses and other		18,888,144			13,090,072
		183,220,427			238,004,377

Other non-current assets		646,089			1,626,802
Property and equipment, net		18,974,584			19,689,987
Right-of-use assets, net		2,503,733			2,473,903
Intangible assets, net		27,197,853			23,262,428
Goodwill		10,655,391			10,655,391
	$	243,198,077		$	295,712,888

Liabilities and Shareholders’ Equity

Current liabilities
Accounts payable and accrued liabilities	$	24,848,092		$	24,713,203
Deferred revenue		13,109,111			7,003,891
Deferred tax liability		1,030,757			-
Lease liabilities		1,229,177			975,844
Contingent consideration		-			863,643
		40,217,137			33,556,581

Lease liabilities, long-term		1,391,530			1,630,837
Contingent consideration, net of current portion		-			705,717
Warrant liability		8,420,300			7,696,605
Other liability		500,000			500,000
		50,528,967			44,089,740
Commitments and contingencies (Note 13)

Shareholders’ equity
Preferred shares ($0.0001 par value per share, 20,000,000 shares authorized, no shares issued or outstanding)		-			-
Common shares ($0.0001 par value per share, 700,000,000 Class A shares authorized, 118,015,270 and 114,926,700 shares issued and outstanding, as of June 30, 2024 and December 31, 2023, respectively; 170,000,000 Class C authorized, 165,153,621 and 165,353,621shares issued and outstanding, as of June 30, 2024 and December 31, 2023, respectively; 110,000,000 Class D authorized, 105,782,403 and 105,782,403 shares issued and outstanding, as of June 30, 2024 and December 31, 2023, respectively)		768,812			768,523
Accumulated deficit		(215,273,903	)		(145,203,163	)
Additional paid-in capital		407,174,201			396,057,788
		192,669,110			251,623,148
	$	243,198,077		$	295,712,888

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

Rumble Inc.

Condensed Consolidated Interim Statements of Shareholders’ Equity

(Expressed in U.S. Dollars)

(Unaudited)

For the three months ended June 30, 2024
	Number of Common Stock												Additional Paid-in			Accumulated
	Class A		Class C		Class D		Class A		Class C		Class D		Capital			Deficit			Total
Balance March 31, 2024		115,126,700		165,153,621		105,782,403	$	741,430	$	16,515	$	10,578	$	398,420,787		$	(188,493,203	)	$	210,696,107
Issuance of Class A Common Stock in connection with Callin acquisition		845,570		-		-		85		-		-		2,739,184			-			2,739,269
Issuance of Class A Common Stock upon exercise of stock options and vesting of restricted stock units		2,043,000		-		-		204		-		-		294,577			-			294,781
Net share settlement on restricted stock units		-		-		-		-		-		-		(788,128	)		-			(788,128	)
Share-based compensation		-		-		-		-		-		-		6,507,781			-			6,507,781
Loss for the period		-		-		-		-		-		-		-			(26,780,700	)		(26,780,700	)
Balance June 30, 2024		118,015,270		165,153,621		105,782,403	$	741,719	$	16,515	$	10,578	$	407,174,201		$	(215,273,903	)	$	192,669,110

For the six months ended June 30, 2024
	Number of Common Stock														Additional Paid-in			Accumulated
	Class A		Class C			Class D		Class A		Class C			Class D		Capital			Deficit			Total
Balance December 31, 2023		114,926,700		165,353,621			105,782,403	$	741,410	$	16,535		$	10,578	$	396,057,788		$	(145,203,163	)	$	251,623,148
Issuance of Class A Common Stock in exchange for Class C Common Stock		200,000		(200,000	)		-		20		(20	)		-		-			-			-
Issuance of Class A Common Stock in connection with Callin acquisition		845,570		-			-		85		-			-		2,739,184			-			2,739,269
Issuance of Class A Common Stock upon exercise of stock options and vesting of restricted stock units		2,043,000		-			-		204		-			-		294,577			-			294,781
Net share settlement on restricted stock units		-		-			-		-		-			-		(788,128	)		-			(788,128	)
Share-based compensation		-		-			-		-		-			-		8,870,780			-			8,870,780
Loss for the period		-		-			-		-		-			-		-			(70,070,740	)		(70,070,740	)
Balance June 30, 2024		118,015,270		165,153,621			105,782,403	$	741,719	$	16,515		$	10,578	$	407,174,201		$	(215,273,903	)	$	192,669,110

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

Rumble Inc.

Condensed Consolidated Interim Statements of Shareholders’ Equity

(Expressed in U.S. Dollars)

(Unaudited)

For the three months ended June 30, 2023
	Number of Common Stock													Additional Paid-in			Accumulated
	Class A			Class C		Class D		Class A		Class C		Class D		Capital			Deficit			Total
Balance March 31, 2023		111,467,763			167,662,214		105,782,403	$	741,013	$	16,766	$	10,578	$	369,958,333		$	(57,450,814	)	$	313,275,876
Issuance of Class A Common Stock in connection with the Callin acquisition		966,857			-		-		147		-		-		14,520,968			-			14,521,115
Issuance costs in connection with Callin acquisition		-			-		-		-		-		-		(40,478	)		-			(40,478	)
Issuance of Class A Common Stock upon vesting of restricted stock units		94,145			-		-		9		-		-		(9	)		-			-
Net share settlement on restricted stock units		(44,625	)		-		-		-		-		-		(447,589	)		-			(447,589	)
Share-based compensation		-			-		-		-		-		-		3,860,676			-			3,860,676
Loss for the period		-			-		-		-		-		-		-			(29,454,080	)		(29,454,080	)
Balance June 30, 2023		112,484,140			167,662,214		105,782,403	$	741,169	$	16,766	$	10,578	$	387,851,901		$	(86,904,894	)	$	301,715,520

For the six months ended June 30, 2023
	Number of Common Stock													Additional Paid-in			Accumulated
	Class A			Class C		Class D		Class A		Class C		Class D		Capital			Deficit			Total
Balance December 31, 2022		111,467,763			167,662,214		105,782,403	$	741,013	$	16,766	$	10,578	$	367,649,123		$	(28,782,701	)	$	339,634,779
Issuance of issuable Class A Common Stock in connection with the Callin acquisition		966,857			-		-		147		-		-		14,520,968			-			14,521,115
Issuance costs in connection with Callin acquisition		-			-		-		-		-		-		(40,478	)		-			(40,478	)
Issuance of Class A Common Stock upon vesting of restricted stock units		94,145			-		-		9		-		-		(9	)		-			-
Net share settlement on restricted stock units		(44,625	)		-		-		-		-		-		(447,589	)		-			(447,589	)
Share-based compensation		-			-		-		-		-		-		6,169,886			-			6,169,886
Loss for the period		-			-		-		-		-		-		-			(58,122,193	)		(58,122,193	)
Balance June 30, 2023		112,484,140			167,662,214		105,782,403	$	741,169	$	16,766	$	10,578	$	387,851,901		$	(86,904,894	)	$	301,715,520

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

Rumble Inc.

Condensed Consolidated Interim Statements of Cash Flows

(Expressed in U.S. Dollars)

(Unaudited)

For the six months ended June 30,	2024			2023

Cash flows provided by (used in)
Operating activities
Net loss for the period	$	(70,070,740	)	$	(58,122,193	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization and depreciation		5,990,361			1,724,634
Share-based compensation		8,605,289			5,722,297
Non-cash interest expense		51,888			13,487
Non-cash marketing expense		3,000,000			-
Amortization on right-of-use assets		535,930			290,863
Change in fair value of warrants		723,695			6,842,500
Change in fair value of contingent consideration		1,354,357			(373,996	)

Changes in operating assets and liabilities:
Accounts receivable		(4,653,134	)		(2,102,138	)
Prepaid expenses and other		(4,845,637	)		(6,681,846	)
Accounts payable and accrued liabilities		155,289			10,980,889
Deferred revenue		3,105,220			7,486,791
Deferred tax liability		1,030,757			-
Operating lease liabilities		(575,345	)		(306,116	)
Net cash used in operating activities		(55,592,070	)		(34,524,828	)

Investing activities
Purchase of property and equipment		(1,790,891	)		(7,684,880	)
Purchase of intangible assets		(3,499,502	)		(356,779	)
Cash acquired in connection with Callin acquisition		-			1,000,989
Cash paid to non-accredited investors in connection with Callin acquisition		(204,846	)		-
Cash paid in connection with North River acquisition		(3,654,500	)		-
Net cash used in investing activities		(9,149,739	)		(7,040,670	)

Financing activities
Taxes paid from net share settlement for share-based compensation		(788,128	)		-
Proceeds from exercise of stock options		294,781			-
Share issuance costs		-			(40,478	)
Net cash used in financing activities		(493,347	)		(40,478	)
Decrease in cash and cash equivalents during the period		(65,235,156	)		(41,605,976	)

Cash and cash equivalents, beginning of period		218,338,658			337,169,279
Cash and cash equivalents, end of period	$	153,103,502		$	295,563,303

Supplemental cash flow information
Cash paid for income taxes	$	146,865		$	16,475
Cash paid for interest		-			4,212
Cash paid for lease liabilities		535,930			392,141

Non-cash investing and financing activities:
Non-cash consideration related to the acquisition of Callin (Note 3)		-			18,226,572
Class A Common Stock issued to settle contingent consideration liability		1,404,753			-
Property and equipment in accounts payable and accrued liabilities		863,860			2,567,031
Recognition of operating right-of-use assets in exchange of operating lease liabilities		565,760			-
Share-based compensation capitalized related to intangible assets		265,490			-

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

Rumble Inc.

Notes to the Condensed Consolidated Interim Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

For the three and six months ended June 30, 2024 and 2023

1.	Overview and Basis of Presentation

Nature of Operations

On December 1, 2021, Rumble Inc., a corporation formed under the laws of the Province of Ontario, Canada (“Legacy Rumble”) and CF Acquisition VI, a Delaware corporation (“CFVI”) entered into a business agreement (the “Business Combination Agreement”). On September 16, 2022, pursuant to the terms of the Business Combination Agreement, Legacy Rumble and CFVI announced the completion of a transaction whereby CFVI was renamed Rumble Inc. and Legacy Rumble was renamed Rumble Canada Inc.

Rumble Inc. (“Rumble” or the “Company”) is a high growth, video sharing platform and cloud services provider designed to help content creators manage, distribute, and monetize their content by connecting them with brands, publishers, and directly to their subscribers and followers. The Company’s registered office is located at 444 Gulf of Mexico Drive, Longboat Key, Florida, 34228. The Company’s shares of Class A common stock and warrants are traded on The Nasdaq Global Market (“Nasdaq”) under the symbol “RUM” and “RUMBW”, respectively.

Basis of Presentation

The accompanying unaudited condensed consolidated interim financial statements (the “financial statements”) are prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and include the results of the Company and its wholly-owned subsidiaries. Any reference in these notes to applicable guidance is meant to refer to the authoritative guidance found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”). All intercompany balances and transactions have been eliminated upon consolidation. These financial statements are presented in U.S. dollars, which is the functional currency of the Company.

These financial statements should be read in conjunction with the Company’s annual consolidated financial statements for the year ended December 31, 2023 (“Annual Financial Statements”). These financial statements have been prepared using the same accounting policies that were described in Note 2 to the Annual Financial Statements.

Use of Estimates

The preparation of these financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments, 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 financial statements, as well as the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates the estimates used, which include but are not limited to the: allowance for credit losses; valuation of share-based compensation awards; estimates in the determination of the fair value of assets acquired and liabilities assumed in connection with acquisitions; fair value of financial instruments including warrant liability and contingent consideration; discount rate in determining lease liabilities; valuation of long-lived assets and their associated useful lives, valuation of goodwill; and the realization of tax assets, estimates of tax liabilities, and valuation of deferred taxes. These estimates, judgments, and assumptions are reviewed periodically and the impact of any revisions are reflected in the financial statements in the period in which such revisions are made. Actual results could differ materially from those estimates, judgments, or assumptions, and such differences could be material to the Company’s consolidated financial position and results of operations.

Rumble Inc.

Notes to the Condensed Consolidated Interim Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

For the three and six months ended June 30, 2024 and 2023

Summary of Significant Accounting Policies

Trade and Barter Transactions

The Company engages in trade and barter transactions whereby the Company and its counterparty exchange media campaigns or other promotional services. The Company reviews each transaction to ensure the advertising it receives has economic substance and records revenue in an amount equal to the fair value of the products and services received unless this is not reasonable to estimate, in which case the consideration is measured based on the standalone selling price of the advertising inventory promised or delivered to the customer. Trade and barter revenue is recognized when the performance obligation is fulfilled and follows the same pattern of recognition as the Company’s normal advertising revenue. Trade and barter expense is recorded when goods or services are consumed. Trade and barter revenue for the three and six months ended June 30, 2024 and 2023 were $nil and $nil, respectively. Trade and barter expenses for the three and six months ended June 30, 2024 and 2023 were $3,000,000 and $nil, respectively. The trade and barter expense is recorded in sales and marketing expense in the condensed consolidated interim statement of operations.

Prior Period Reclassifications

Certain amounts in expenses and other income (expenses) in prior periods have been reclassified to conform with current period presentation. The reclassification has no impact on net loss, loss per share or total shareholders’ equity.

Acquisitions

Acquisition of Callin Corp.

On May 15, 2023 (the “Acquisition Date”), the Company acquired 100% of the outstanding equity of Callin Corp. (“Callin”), a podcasting and live streaming platform. Callin creates a seamless experience for its users to create, discover, and consume live and recorded content. The Company has determined that Callin meets the definition of a business and has accounted for the acquisition as a business combination. The fair value of the assets acquired and the liabilities assumed by the Company in connection with the acquisition is as follows:

Total consideration	$	18,226,572

Net assets acquired:
Cash	$	1,000,989
Accounts receivable		10,939
Prepaid expenses		200,651
Property and equipment		37,841
Software and technology		9,352,000
Accounts payable, accruals, and other liabilities		(1,137,814	)
Deferred tax liability		(1,230,526	)
Total net assets acquired	$	8,234,080

Goodwill	$	9,992,492

Rumble Inc.

Notes to the Condensed Consolidated Interim Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

For the three and six months ended June 30, 2024 and 2023

Acquisitions (Continued)

Acquisition of Callin Corp. (Continued)

The fair value of the consideration consists of the following:

	Fair Value
Shares issued	$	6,055,409
Shares to be issued		3,747,209
Replacement awards		15,578
Contingent consideration (liability) – retention payments		3,491,741
Contingent consideration (equity) – milestone 1		2,490,152
Contingent consideration (equity) – milestone 2		2,356,483
Contingent consideration payable		70,000
Total consideration	$	18,226,572

Under the terms of the acquisition agreement, the Company is required to issue upfront share consideration of 981,243 shares of Class A Common Stock to the preferred shareholders and SAFE note holders of Callin. The fair value of the Company’s Class A Common Stock on the acquisition date was $9.99 per share. In addition, the Company issued rights to four payments each consisting of 375,000 contingently issuable shares of Class A Common Stock to the common shareholders, series FF preferred shareholders, option holders and continuing employees of Callin contingent on the following conditions being met:

●

Retention payment 1: Services are provided by a selling shareholder for 12 months;

●

Retention payment 2: Services are provided by a selling shareholder for 24 months;

●

Milestone payment 1: Within 12 months, certain feature development and technical performance criteria are achieved, and the acquired technology is integrated into the Company’s existing software and

●

Milestone payment 2: Within 24 months, certain feature development and technical performance criteria are achieved.

In assessing what is part of the business combination, the Company has determined that because the two retention payments are contingent on a selling shareholder providing services post-combination, the portion of those tranches earned by the party providing services should be reflected in the Company’s financial statements as post-combination expense. In addition, where future services are required by employees in order to earn rights to the contingent consideration, such rights are being accounted for either entirely as post-combination expense or as replacement awards where the rights replace unvested options or restricted series FF preferred shares that were originally granted by Callin. Rights to contingent consideration held by non-accredited investors will be settled in cash at $8.92 per share. For the remainder, the four tranches of contingently issuable shares have been accounted for as contingent consideration.

The following table shows the breakdown of the contingently issuable shares:

	Number of Shares
Contingent consideration		903,689
Share-based compensation (Note 11)		596,311
Total contingently issuable shares		1,500,000

Rumble Inc.

Notes to the Condensed Consolidated Interim Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

For the three and six months ended June 30, 2024 and 2023

Acquisitions (Continued)

Acquisition of Callin Corp. (Continued)

During the three and six months ended June 30, 2024, certain of the contingently issuable shares were issued. Refer to Note 11 for the share-based compensation and below for the impact on contingent consideration.

The fair value of the contingent consideration has been estimated as follows:

Retention payments 1 and 2

At the acquisition date, the Company determined that retention payments 1 and 2 are one unit of account requiring the Company to issue a variable number of shares that is not indexed to the Company’s stock. As a result, the consideration that is contingent on one of the selling shareholder’s providing services has been classified as a liability. The contingent consideration is classified Level 3 in the fair value hierarchy. The key inputs into the fair value determination are the probability of achieving the milestones, which impacts the expected number of shares to be issued, and the share price on the acquisition date. At the acquisition date, management estimated the number of shares to be issued is 349,523.

On May 15, 2024, retention payment 1 was met resulting in the issuance of 196,469 shares of Class A Common Stock and a cash payment of $106,026. Retention payment 2 was reclassified to equity because the number of shares to be issued if the contingency is met is now fixed. As a result, the Company recognized $1,334,516 in equity and $184,448 in accounts payable and accrued liabilities.

The Company has recognized a change in fair value for the retention payment 1 and 2 contingent consideration of $17,768 and $1,354,357 due to the change in the Company’s stock price and the probability of each contingency being met for the three and six months ended June 30, 2024, respectively.

Milestone payments 1 and 2

The Company has determined that milestone payments 1 and 2 are separate units of account because a fixed number of shares will be issued if each contingency is met, and meeting one contingency is not dependent on the other. The key inputs into the fair value determination are the probability of each contingency being met, and the share price on the acquisition date. As of June 30, 2024, milestone payments 1 and 2 were met resulting in the issuance of 513,330 shares of Class A Common Stock and a cash payment of $98,820.

The acquired goodwill relates to Callin’s workforce and synergies that are expected to be realized upon the integration of Callin’s technology with the Rumble platform. Such synergies will include the ability to leverage the creator relationships that Rumble has secured to date and will allow for a greater ability to establish brand recognition and monetization of the Callin platform in the future. The goodwill is not expected to be deductible for tax purposes.

Acquisition of North River Project Inc.

On October 3, 2023, the Company acquired 100% of the outstanding equity of North River Project Inc. (“North River”), for $10,000,000 Canadian Dollars ($7,293,000 US Dollars) in cash upfront and future contingent cash payments of up to $10,000,000 Canadian Dollars. The contingent consideration contains two payments each consisting of $5,000,000 Canadian Dollars upon the completion of feature development and integration of the acquired technology into the Company’s existing software within a 5-year period. The Company has elected to account for the contingent consideration at the point in time in which the payments have been met. During the six months ended June 30, 2024, one of the milestones was achieved and consequently the Company made a cash payment of $5,000,000 Canadian Dollars ($3,654,500 US Dollars) to the former North River equityholders.

Rumble Inc.

Notes to the Condensed Consolidated Interim Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

For the three and six months ended June 30, 2024 and 2023

3.	Acquisitions (Continued)

Acquisition of North River Project Inc. (Continued)

The Company allocated the contingent payment to the acquired assets based on their relative fair value on the date of acquisition as follows:

	Fair Value
Software and technology	$	4,500,536
Assembled workforce		184,721
Deferred tax liability		(1,030,757	)
Total consideration	$	3,654,500

The additions were allocated to the cost basis of the acquired assets and the Company recognized a cumulative catch up on the amortization expense in the amount of $744,351 during the three and six months ended June 30, 2024.

The acquired software and technology was assigned a useful life of 5 years and the assembled workforce was assigned a useful life of 2 years. The assets are recorded in intangible assets in the Company’s condensed consolidated interim balance sheet.

Revenue from Contracts with Customers

The following table presents revenues disaggregated by type:

	Three months ended				Six months ended
	June 30				June 30
	2024		2023		2024		2023

Audience Monetization	$	19,742,569	$	22,796,394	$	35,092,007	$	38,583,692
Other Initiatives		2,726,974		2,177,660		5,110,992		4,005,737
Total revenues	$	22,469,543	$	24,974,054	$	40,202,999	$	42,589,429

Audience Monetization

Audience Monetization includes: advertising fees on the Rumble platform; subscription fees earned primarily from consumer product offerings such as Locals and badges; revenues generated from content that is licensed by third-parties; pay-per-view; and fees from tipping and platform hosting fees. Advertising fees are generated by delivering digital video and display advertisements as well as cost-per-message-read advertisements. Digital video and display advertisements are placed on Rumble websites or mobile applications. Customers pay for advertisements either directly or through relationships with advertising agencies or resellers, based on the number of impressions delivered or the number of actions such as clicks, or purchases taken, by our users.

Rumble Inc.

Notes to the Condensed Consolidated Interim Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

For the three and six months ended June 30, 2024 and 2023

Revenue from Contracts with Customers (Continued)

Other Initiatives

Other Initiatives includes: digital advertisements that are placed on Rumble’s network of third-party publisher websites or mobile applications and cloud. Cloud includes consumption-based fees, subscriptions for infrastructure and professional services.

The Company recognizes revenue either at a point in time, or over time, depending upon the characteristics of the contract.

	Three months ended				Six months ended
	June 30				June 30
	2024		2023		2024		2023

Point in time	$	7,304,391	$	5,439,110	$	13,817,795	$	10,515,698
Over time		15,165,152		19,534,944		26,385,204		32,073,731
Total revenues	$	22,469,543	$	24,974,054	$	40,202,999	$	42,589,429

Deferred Revenue

Deferred revenue recorded at June 30, 2024 is expected to be fully recognized by June 30, 2025. The deferred revenue balance was $13,109,111 and $7,003,891 as of June 30, 2024 and December 31, 2023, respectively.

Cash, Cash Equivalents, and Marketable Securities

Cash and cash equivalents as of June 30, 2024 and December 31, 2023 consist of the following:

	Contracted	June 30, 2024		December 31, 2023
	Maturity	Balance		Balance

Cash	Demand	$	7,135,586	$	11,632,839
Treasury bills and money market funds	Demand		145,967,916		206,705,819
		$	153,103,502	$	218,338,658

Marketable securities consist of term deposits of $1,135,200 and $1,135,200 as at June 30, 2024 and December 31, 2023, respectively. The Company did not have any long-term investments as at June 30, 2024 or December 31, 2023.

As of June 30, 2024 and December 31, 2023, the Company entered into a guarantee/ standby letter of credit in the amount of $1,362,500 which will be used towards the issuance of credit for running the Company’s day-to-day business operations.

Rumble Inc.

Notes to the Condensed Consolidated Interim Financial Statements

(Expressed in U.S. Dollars)

(Unaudited)

For the three and six months ended June 30, 2024 and 2023

Property and Equipment

	June 30,		December 31,
	2024		2023
Computer hardware	$	23,747,540	$	21,969,345
Furniture and fixtures		123,417		121,077
Leasehold improvements		1,922,257