NOTE 11 – SUBSEQUENT EVENTS

The Company has evaluated events that have occurred after the balance sheet and through the date the financial statements were issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the financial statements, except as disclosed below.

Stock-Based Compensation

Subsequent to December 31, 2021, the Company granted 53,192 shares of immediately vested common stock to non-employee directors under the 2021 Plan with an aggregate grant date fair value of $100,000.

Subsequent to December 31, 2021, the Company issued an aggregate of 489,990 RSUs and a target number of 184,376 PSUs, all issued under the 2021 Plan. The RSUs vest ratably over four years and the PSUs are earned based upon based upon actual net revenue generated by the Company during 2022 as compared to the targeted revenue specified in each award. Depending on actual net revenues generated as compared to the targeted amounts, the grantees may earn between 0% and 150% of their target award. The awards had an aggregate issuance date fair value of approximately $1,500,000.

Subsequent to December 31, 2021, the Company’s chief financial officer surrendered to the Company 3,397 shares of common stock in order to satisfy a tax withholding obligation of approximately $18,000 in connection with a previous grant.

Settlement Agreement

On March 11, 2022, the Company, Aureus Holdings, LLC d/b/a Lo70s (“Lo70s”) and JPAR, LLC entered into a Settlement Agreement and Mutual Release (the “Lo70s Settlement Agreement”).  Pursuant to the Lo70s Settlement Agreement, the parties agreed to dismiss the litigation (Aureus Holdings, LLC d/b/a Lo70s v. Kubient, Inc., et al., Superior Court of Delaware, Case No. N20C-07-061) and resolve all claims among them, including potential or future claims arising from the letter of intent that the Company and Lo70s had entered into in March 2019, as well as a consulting agreement entered into between the Company and an employee of Lo70s in connection with such letter of intent. On March 14, 2022, the court in the matter entered an order approving the Lo70s Settlement Agreement, and the case was dismissed with prejudice. In the Lo70s Settlement Agreement, the Company expressly denies any and all liability and the dismissal of the case with prejudice was entered by the court without a final judgment of liability entered against the Company Under the terms of the Lo70s Settlement Agreement, the Company made a cash payment of $975,000 to Lo70s in full satisfaction of the matter, as well as the releases and covenants of Lo70s and JPAR, LLC set forth in the Lo70s Settlement Agreement, such that the Lo70s Settlement Agreement fully concludes this matter. During the year ended December 31, 2021, the Company recognized a loss on settlement of approximately $875,000 such that, as of December 31, 2021, it had accrued for the $975,000 cash payment.