x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 84-1797523 | |||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||||
Common Stock, par value $0.0001 | CURI | NASDAQ | ||||||||||||||
Warrants, each exercisable for one share of Common Stock at an exercise price of $11.50 per share | CURIW | NASDAQ |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||||||||||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||||||||||||
Emerging growth company | ☒ |
CURIOSITYSTREAM INC.
TABLE OF CONTENTS
Page | ||||||||
i
March 31, | December 31, | |||||||
2023 | 2022 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 48,668 | $ | 40,007 | ||||
Restricted cash | 500 | 500 | ||||||
Short-term investments in debt securities | — | 14,986 | ||||||
Accounts receivable, net | 9,699 | 10,899 | ||||||
Other current assets | 2,189 | 3,118 | ||||||
Total current assets | 61,056 | 69,510 | ||||||
Investments in equity method investees | 10,547 | 10,766 | ||||||
Property and equipment, net | 1,000 | 1,094 | ||||||
Content assets, net | 66,373 | 68,502 | ||||||
Operating lease right-of-use | 3,633 | 3,702 | ||||||
Other assets | 493 | 539 | ||||||
Total assets | $ | 143,102 | $ | 154,113 | ||||
Liabilities and stockholders’ equity | ||||||||
Current liabilities | ||||||||
Content liabilities | $ | 1,656 | $ | 2,862 | ||||
Accounts payable | 7,500 | 6,065 | ||||||
Accrued expenses and other liabilities | 3,380 | 7,752 | ||||||
Deferred revenue | 13,863 | 14,281 | ||||||
Total current liabilities | 26,399 | 30,960 | ||||||
Warrant liability | 331 | 257 | ||||||
Non-current operating lease liabilities | 4,560 | 4,648 | ||||||
Other liabilities | 655 | 622 | ||||||
Total liabilities | 31,945 | 36,487 | ||||||
Stockholders’ equity | ||||||||
Common stock, $0.0001 par value – 125,000 shares authorized as of March 31, 2023 and December 31, 2022; 52,961 shares issued and outstanding as of March 31, 2023; 52,853 shares issued and outstanding as of December 31, 2022 | 5 | 5 | ||||||
Additional paid-in capital | 360,002 | 358,760 | ||||||
Accumulated other comprehensive loss | — | (40 | ) | |||||
Accumulated deficit | (248,850 | ) | (241,099 | ) | ||||
Total stockholders’ equity | 111,157 | 117,626 | ||||||
Total liabilities and stockholders’ equity | $ | 143,102 | $ | 154,113 | ||||
For the three months ended March 31, | ||||||||
2023 | 2022 | |||||||
Revenues | $ | 12,387 | $ | 17,627 | ||||
Operating expenses | ||||||||
Cost of revenues | 9,001 | 11,850 | ||||||
Advertising and marketing | 3,115 | 14,768 | ||||||
General and administrative | 8,059 | 10,503 | ||||||
20,175 | 37,121 | |||||||
Operating loss | (7,788 | ) | (19,494 | ) | ||||
Change in fair value of warrant liability | (74 | ) | 3,860 | |||||
Interest and other income (expense) | 388 | (57 | ) | |||||
Equity method investment loss | (219 | ) | (156 | ) | ||||
Loss before income taxes | (7,693 | ) | (15,847 | ) | ||||
Provision for income taxes | 58 | 45 | ||||||
Net loss | $ | (7,751 | ) | $ | (15,892 | ) | ||
Net loss per share | ||||||||
Basic | $ | (0.15 | ) | $ | (0.30 | ) | ||
Diluted | $ | (0.15 | ) | $ | (0.30 | ) | ||
Weighted average number of common shares outstanding | ||||||||
Basic | 52,950 | 52,750 | ||||||
Diluted | 52,950 | 52,750 |
For the three months ended March 31, | ||||||||
2023 | 2022 | |||||||
Net loss | $ | (7,751 | ) | $ | (15,892 | ) | ||
Other comprehensive income (loss) | ||||||||
Unrealized gain (loss) on available for sale securities | 40 | (233 | ) | |||||
Total comprehensive loss | $ | (7,711 | ) | $ | (16,125 | ) | ||
Accumulated | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||
Common Stock | Preferred Stock | Additional Paid-in | Other Comprehensive | Accumulated | ||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Income (Loss) | Deficit | ||||||||||||||||||||||||||
Balance as of December 31, 2021 | 52,677 | $ | 5 | — | $ | — | $ | 352,334 | $ | (222 | ) | $ | (190,182 | ) | $ | 161,935 | ||||||||||||||||
Net loss | — | — | — | — | — | — | (15,892 | ) | (15,892 | ) | ||||||||||||||||||||||
Stock-based compensation, net | 90 | — | — | — | 1,651 | — | — | 1,651 | ||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | (233 | ) | — | (233 | ) | ||||||||||||||||||||||
Balance as of March 31, 2022 | 52,767 | $ | 5 | — | $ | — | $ | 353,985 | $ | (455 | ) | $ | (206,074 | ) | $ | 147,461 | ||||||||||||||||
Balance as of December 31, 2022 | 52,853 | $ | 5 | — | $ | — | $ | 358,760 | $ | (40 | ) | $ | (241,099 | ) | $ | 117,626 | ||||||||||||||||
Net loss | — | — | — | — | — | — | (7,751 | ) | (7,751 | ) | ||||||||||||||||||||||
Stock-based compensation, net | 108 | — | — | — | 1,242 | — | — | 1,242 | ||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 40 | — | 40 | ||||||||||||||||||||||||
Balance as of March 31, 2023 | 52,961 | $ | 5 | — | $ | — | $ | 360,002 | $ | — | $ | (248,850 | ) | $ | 111,157 | |||||||||||||||||
(In thousands, except par value) | September 30, 2023 | December 31, 2022 | |||||||||
(Unaudited) | |||||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 40,304 | $ | 40,007 | |||||||
Restricted cash | 500 | 500 | |||||||||
Short-term investments in debt securities | — | 14,986 | |||||||||
Accounts receivable | 6,877 | 10,899 | |||||||||
Other current assets | 1,410 | 3,118 | |||||||||
Total current assets | 49,091 | 69,510 | |||||||||
Investments in equity method investees | 6,666 | 10,766 | |||||||||
Property and equipment, net | 822 | 1,094 | |||||||||
Content assets, net | 45,900 | 68,502 | |||||||||
Operating lease right-of-use assets | 3,418 | 3,702 | |||||||||
Other assets | 411 | 539 | |||||||||
Total assets | $ | 106,308 | $ | 154,113 | |||||||
Liabilities and stockholders’ equity | |||||||||||
Current liabilities | |||||||||||
Content liabilities | $ | 128 | $ | 2,862 | |||||||
Accounts payable | 6,963 | 6,065 | |||||||||
Accrued expenses and other liabilities | 4,154 | 7,752 | |||||||||
Deferred revenue | 12,997 | 14,281 | |||||||||
Total current liabilities | 24,242 | 30,960 | |||||||||
Warrant liability | 74 | 257 | |||||||||
Non-current operating lease liabilities | 4,378 | 4,648 | |||||||||
Other liabilities | 675 | 622 | |||||||||
Total liabilities | 29,369 | 36,487 | |||||||||
Stockholders’ equity | |||||||||||
Common stock, $0.0001 par value – 125,000 shares authorized as of September 30, 2023, and December 31, 2022; 53,071 shares issued and outstanding as of September 30, 2023; 52,853 issued and outstanding as of December 31, 2022 | 5 | 5 | |||||||||
Additional paid-in capital | 362,270 | 358,760 | |||||||||
Accumulated other comprehensive loss | — | (40) | |||||||||
Accumulated deficit | (285,336) | (241,099) | |||||||||
Total stockholders’ equity | 76,939 | 117,626 | |||||||||
Total liabilities and stockholders’ equity | $ | 106,308 | $ | 154,113 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(Unaudited and in thousands except per share amounts) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Revenues | $ | 15,630 | $ | 23,569 | $ | 42,114 | $ | 63,544 | |||||||||||||||
Operating expenses | |||||||||||||||||||||||
Cost of revenues | 8,494 | 13,566 | 27,428 | 38,404 | |||||||||||||||||||
Advertising and marketing | 5,106 | 5,626 | 12,424 | 31,602 | |||||||||||||||||||
General and administrative | 6,959 | 8,757 | 22,998 | 29,863 | |||||||||||||||||||
Impairment of content assets | 18,970 | — | 18,970 | — | |||||||||||||||||||
Impairment of goodwill and intangible assets | — | — | — | 3,603 | |||||||||||||||||||
39,529 | 27,949 | 81,820 | 103,472 | ||||||||||||||||||||
Operating loss | (23,899) | (4,380) | (39,706) | (39,928) | |||||||||||||||||||
Change in fair value of warrant liability | 74 | 514 | 184 | 4,852 | |||||||||||||||||||
Interest and other income (expense) | 31 | (478) | 856 | (564) | |||||||||||||||||||
Equity method investment loss | (2,638) | (94) | (5,092) | (566) | |||||||||||||||||||
Loss before income taxes | (26,432) | (4,438) | (43,758) | (36,206) | |||||||||||||||||||
Provision for income taxes | 133 | 64 | 479 | 165 | |||||||||||||||||||
Net loss | $ | (26,565) | $ | (4,502) | $ | (44,237) | $ | (36,371) | |||||||||||||||
Net loss per share | |||||||||||||||||||||||
Basic | $ | (0.50) | $ | (0.09) | $ | (0.83) | $ | (0.69) | |||||||||||||||
Diluted | $ | (0.50) | $ | (0.09) | $ | (0.83) | $ | (0.69) | |||||||||||||||
Weighted average number of common shares outstanding | |||||||||||||||||||||||
Basic | 53,040 | 52,793 | 52,999 | 52,773 | |||||||||||||||||||
Diluted | 53,040 | 52,793 | 52,999 | 52,773 |
For the three months ended March 31, | ||||||||
2023 | 2022 | |||||||
Cash flows from operating activities | ||||||||
Net loss | $ | (7,751 | ) | $ | (15,892 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
Change in fair value of warrant liability | 74 | (3,860 | ) | |||||
Additions to content assets | (3,723 | ) | (14,470 | ) | ||||
Change in content liabilities | (1,206 | ) | (5,672 | ) | ||||
Amortization of content assets | 5,852 | 9,038 | ||||||
Depreciation and amortization expenses | 127 | 209 | ||||||
Amortization of premiums and accretion of discounts associated with investments in debt securities, net | 26 | 411 | ||||||
Stock-based compensation | 1,267 | 1,788 | ||||||
Equity method investment loss | 219 | 156 | ||||||
Other non-cash items | 121 | 120 | ||||||
Changes in operating assets and liabilities | ||||||||
Accounts receivable | 1,200 | 10,052 | ||||||
Other assets | 944 | 2,227 | ||||||
Accounts payable | 1,440 | 4,990 | ||||||
Accrued expenses and other liabilities | (4,514 | ) | (3,677 | ) | ||||
Deferred revenue | (384 | ) | 2,293 | |||||
Net cash used in operating activities | (6,308 | ) | (12,287 | ) | ||||
Cash flows from investing activities | ||||||||
Purchases of property and equipment | (5 | ) | (22 | ) | ||||
Investment in equity method investees | — | (813 | ) | |||||
Sales of investments in debt securities | — | 2,502 | ||||||
Maturities of investments in debt securities | 15,000 | 19,603 | ||||||
Purchases of investments in debt securities | — | (1,497 | ) | |||||
Net cash provided by investing activities | 14,995 | 19,773 | ||||||
Cash flows from financing activities | ||||||||
Payments related to tax withholding | (26 | ) | (137 | ) | ||||
Net cash used in financing activities | (26 | ) | (137 | ) | ||||
Net increase in cash, cash equivalents and restricted cash | 8,661 | 7,349 | ||||||
Cash, cash equivalents and restricted cash, beginning of period | 40,507 | 17,547 | ||||||
Cash, cash equivalents and restricted cash, end of period | $ | 49,168 | $ | 24,896 | ||||
Supplemental disclosure: | ||||||||
Cash paid for taxes | $ | — | $ | 177 | ||||
Cash paid for operating leases | 134 | 131 | ||||||
Right-of-use | — | 3,965 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(Unaudited and in thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Net loss | $ | (26,565) | $ | (4,502) | $ | (44,237) | $ | (36,371) | |||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||
Unrealized gain on available for sale securities | — | 270 | 40 | 40 | |||||||||||||||||||
Total comprehensive loss | $ | (26,565) | $ | (4,232) | $ | (44,197) | $ | (36,331) |
(Unaudited and in thousands) | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2023 | 53,026 | $ | 5 | $ | 361,392 | $ | — | $ | (258,771) | $ | 102,626 | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | (26,565) | (26,565) | |||||||||||||||||||||||||||||||||||||||||
Stock-based compensation, net | 45 | — | 878 | — | — | 878 | |||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2023 | 53,071 | $ | 5 | $ | 362,270 | $ | — | $ | (285,336) | $ | 76,939 | ||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | 52,853 | $ | 5 | $ | 358,760 | $ | (40) | $ | (241,099) | $ | 117,626 | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | (44,237) | (44,237) | |||||||||||||||||||||||||||||||||||||||||
Stock-based compensation, net | 218 | — | 3,510 | — | — | 3,510 | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | 40 | — | 40 | |||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2023 | 53,071 | $ | 5 | $ | 362,270 | $ | — | $ | (285,336) | $ | 76,939 | ||||||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | 52,786 | $ | 5 | $ | 355,555 | $ | (452) | $ | (222,051) | $ | 133,057 | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | (4,502) | (4,502) | |||||||||||||||||||||||||||||||||||||||||
Stock-based compensation, net | 16 | — | 1,656 | — | — | 1,656 | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | 270 | — | 270 | |||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2022 | 52,802 | $ | 5 | $ | 357,211 | $ | (182) | $ | (226,553) | $ | 130,481 | ||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | 52,677 | $ | 5 | $ | 352,334 | $ | (222) | $ | (190,182) | $ | 161,935 | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | (36,371) | (36,371) | |||||||||||||||||||||||||||||||||||||||||
Stock-based compensation, net | 125 | — | 4,877 | — | — | 4,877 | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | 40 | — | 40 | |||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2022 | 52,802 | $ | 5 | $ | 357,211 | $ | (182) | $ | (226,553) | $ | 130,481 |
Nine Months Ended September 30, | |||||||||||
(Unaudited and in thousands) | 2023 | 2022 | |||||||||
Cash flows from operating activities | |||||||||||
Net loss | $ | (44,237) | $ | (36,371) | |||||||
Adjustments to reconcile net loss to net cash used in operating activities | |||||||||||
Change in fair value of warrant liability | (183) | (4,852) | |||||||||
Additions to content assets | (14,074) | (31,729) | |||||||||
Change in content liabilities | (2,734) | (4,706) | |||||||||
Amortization of content assets | 17,706 | 29,510 | |||||||||
Depreciation and amortization expenses | 370 | 573 | |||||||||
Impairment of content assets | 18,970 | — | |||||||||
Impairment of goodwill and intangible assets | — | 3,603 | |||||||||
Amortization of premiums and accretion of discounts associated with investments in debt securities, net | 26 | 1,087 | |||||||||
Stock-based compensation | 3,586 | 5,055 | |||||||||
Equity method investment loss | 5,092 | 566 | |||||||||
Other non-cash items | 363 | 288 | |||||||||
Changes in operating assets and liabilities | |||||||||||
Accounts receivable | 4,022 | 6,342 | |||||||||
Other assets | 1,737 | 4,994 | |||||||||
Accounts payable | 903 | 4,188 | |||||||||
Accrued expenses and other liabilities | (3,947) | (4,792) | |||||||||
Deferred revenue | (1,230) | (4,500) | |||||||||
Net cash used in operating activities | (13,630) | (30,744) | |||||||||
Cash flows from investing activities | |||||||||||
Purchases of property and equipment | (5) | (130) | |||||||||
Investment in equity method investees | (992) | (2,438) | |||||||||
Sales of investments in debt securities | — | 22,893 | |||||||||
Maturities of investments in debt securities | 15,000 | 41,873 | |||||||||
Purchases of investments in debt securities | — | (1,497) | |||||||||
Net cash provided by investing activities | 14,003 | 60,701 | |||||||||
Cash flows from financing activities | |||||||||||
Payments related to tax withholding | (76) | (178) | |||||||||
Net cash used in financing activities | (76) | (178) | |||||||||
Net increase in cash, cash equivalents and restricted cash | 297 | 29,779 | |||||||||
Cash, cash equivalents and restricted cash, beginning of period | 40,507 | 17,547 | |||||||||
Cash, cash equivalents and restricted cash, end of period | $ | 40,804 | $ | 47,326 | |||||||
Supplemental disclosure: | |||||||||||
Cash paid for taxes | $ | 144 | $ | 571 | |||||||
Cash paid for operating leases | $ | 360 | $ | 352 | |||||||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ | — | $ | 3,965 |
(In thousands) | Spiegel Venture | Nebula | Total | ||||||||||||||
Balance at December 31, 2022 | $ | 2,899 | $ | 7,867 | $ | 10,766 | |||||||||||
Investments in equity method investees | 992 | — | 992 | ||||||||||||||
Equity method investment loss | (2,025) | (3,067) | (5,092) | ||||||||||||||
Balance at September 30, 2023 | $ | 1,866 | $ | 4,800 | $ | 6,666 |
Spiegel Venture | Nebula | Total | ||||||||||
(in thousands) | ||||||||||||
Balance, December 31, 2022 | $ | 2,899 | $ | 7,867 | $ | 10,766 | ||||||
Equity method investment income (loss) | 28 | (247 | ) | (219 | ) | |||||||
Balance, March 31, 2023 | $ | 2,927 | $ | 7,620 | $ | 10,547 | ||||||
(In thousands) | September 30, 2023 | December 31, 2022 | |||||||||
Cash and cash equivalents | $ | 40,304 | $ | 40,007 | |||||||
Restricted cash | 500 | 500 | |||||||||
Cash and cash equivalents and restricted cash | $ | 40,804 | $ | 40,507 |
March 31, | December 31, | |||||||
2023 | 2022 | |||||||
(in thousands) | ||||||||
Cash and cash equivalents | $ | 48,668 | $ | 40,007 | ||||
Restricted cash | 500 | 500 | ||||||
Cash, cash equivalents and restricted cash | $ | 49,168 | $ | 40,507 | ||||
As of March 31, 2023 | As of December 31, 2022 | |||||||||||||||||||||||||||||||
Cash and Cash Equivalents | Short-term Investments | Investments (non-current) | Total | Cash and Cash Equivalents | Short-term Investments | Investments (non-current) | Total | |||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||
Level 1 Securities | ||||||||||||||||||||||||||||||||
Money market funds | $ | 47,272 | $ | — | — | $ | 47,272 | $ | 17,724 | $ | — | — | $ | 17,724 | ||||||||||||||||||
Total Level 1 Securities | $ | 47,272 | — | — | $ | 47,272 | $ | 17,724 | — | — | $ | 17,724 | ||||||||||||||||||||
Level 2 Securities | ||||||||||||||||||||||||||||||||
Corporate debt securities | — | — | — | — | — | $ | 14,986 | — | $ | 14,986 | ||||||||||||||||||||||
Total Level 2 Securities | — | — | — | — | — | $ | 14,986 | — | $ | 14,986 | ||||||||||||||||||||||
Total | $ | 47,272 | — | — | $ | 47,272 | $ | 17,724 | $ | 14,986 | — | $ | 32,710 | |||||||||||||||||||
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||
(In thousands) | Cash and cash equivalents | Short-term investments | Total | Cash and cash equivalents | Short-term investments | Total | |||||||||||||||||||||||||||||
Level 1 securities: | |||||||||||||||||||||||||||||||||||
Money market funds | $ | 38,375 | $ | — | $ | 38,375 | $ | 17,724 | $ | — | $ | 17,724 | |||||||||||||||||||||||
Total Level 1 securities | $ | 38,375 | — | $ | 38,375 | $ | 17,724 | — | $ | 17,724 | |||||||||||||||||||||||||
Level 2 securities: | |||||||||||||||||||||||||||||||||||
Corporate debt securities | — | — | — | — | $ | 14,986 | $ | 14,986 | |||||||||||||||||||||||||||
Total Level 2 securities | — | — | — | — | $ | 14,986 | $ | 14,986 | |||||||||||||||||||||||||||
Total | $ | 38,375 | — | $ | 38,375 | $ | 17,724 | $ | 14,986 | $ | 32,710 |
December 31, 2022 | |||||||||||||||||||||||
(In thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||||||||
Debt securities: | |||||||||||||||||||||||
Corporate | $ | 15,026 | — | $ | (40) | $ | 14,986 | ||||||||||||||||
Total | $ | 15,026 | — | $ | (40) | $ | 14,986 |
As of December 31, 2022 | ||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||
(in thousands) | ||||||||||||||||
Debt Securities: | ||||||||||||||||
Corporate | $ | 15,026 | — | $ | (40 | ) | $ | 14,986 | ||||||||
Total | $ | 15,026 | — | $ | (40 | ) | $ | 14,986 | ||||||||
As of | ||||||||
March 31, | December 31, | |||||||
2023 | 2022 | |||||||
(in thousands) | ||||||||
Licensed content, net | ||||||||
Released, less amortization | $ | 11,790 | $ | 11,154 | ||||
Prepaid and unreleased | 3,086 | 4,014 | ||||||
14,876 | 15,168 | |||||||
Produced content, net | ||||||||
Released, less amortization | 32,332 | 33,094 | ||||||
In production | 19,165 | 20,240 | ||||||
51,497 | 53,334 | |||||||
Total | $ | 66,373 | $ | 68,502 | ||||
(in thousands) | September 30, 2023 | December 31, 2022 | |||||||||
Licensed content, net: | |||||||||||
Released, less amortization and impairment1 | $ | 6,308 | $ | 11,154 | |||||||
Prepaid and unreleased | 7,997 | 4,014 | |||||||||
Total Licensed content, net | 14,305 | 15,168 | |||||||||
Produced content, net: | |||||||||||
Released, less amortization and impairment2 | 20,792 | 33,094 | |||||||||
In production | 10,803 | 20,240 | |||||||||
Total produced content, net | 31,595 | 53,334 | |||||||||
Total content assets | $ | 45,900 | $ | 68,502 | |||||||
1 The September 30, 2023, amount reflects a $4.4 million impairment charge recorded for the three months ended September 30, 2023. See Impairment Assessment below. | |||||||||||
2 The September 30, 2023, amount reflects a $14.6 million impairment charge recorded for the three months ended September 30, 2023. See Impairment Assessment below. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Licensed content | $ | 1,728 | $ | 1,793 | $ | 5,478 | $ | 6,590 | |||||||||||||||
Produced content | 3,661 | 8,588 | 12,229 | 22,920 | |||||||||||||||||||
Total | $ | 5,389 | $ | 10,381 | $ | 17,707 | $ | 29,510 |
Three Months Ended March 31, | ||||||||
2023 | 2022 | |||||||
(in thousands) | ||||||||
Licensed content | $ | 1,945 | $ | 2,999 | ||||
Produced content | 3,907 | 6,039 | ||||||
Total | $ | 5,852 | $ | 9,038 | ||||
(in thousands) | September 30, 2023 | December 31, 2022 | |||||||||
Private Placement Warrants | $ | 74 | $ | 257 | |||||||
As of March 31, 2023 | As of December 31, 2022 | |||||||
(in thousands) | ||||||||
Level 3 | ||||||||
Private Placement Warrants | $ | 331 | $ | 257 | ||||
Total Level 3 | $ | 331 | $ | 257 | ||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||||
Subscriptions: | |||||||||||||||||||||||||||||||||||||||||||||||
O&O Service | $ | 6,601 | 42 | % | $ | 7,890 | 33 | % | $ | 19,664 | 47 | % | $ | 23,110 | 36 | % | |||||||||||||||||||||||||||||||
App Services | 830 | 5 | % | 960 | 4 | % | 2,556 | 6 | % | 3,018 | 5 | % | |||||||||||||||||||||||||||||||||||
Subscriptions total | 7,431 | 47 | % | 8,850 | 38 | % | 22,220 | 53 | % | 26,128 | 41 | % | |||||||||||||||||||||||||||||||||||
License fees: | |||||||||||||||||||||||||||||||||||||||||||||||
Partner Direct Business | 1,177 | 8 | % | 1,157 | 5 | % | 3,361 | 8 | % | 3,491 | 5 | % | |||||||||||||||||||||||||||||||||||
Bundled Distribution | 1,504 | 10 | % | 2,595 | 11 | % | 4,487 | 11 | % | 10,250 | 16 | % | |||||||||||||||||||||||||||||||||||
Content Licensing | 5,082 | 32 | % | 10,790 | 46 | % | 10,715 | 25 | % | 21,692 | 34 | % | |||||||||||||||||||||||||||||||||||
License fees total | 7,763 | 50 | % | 14,542 | 62 | % | 18,563 | 44 | % | 35,433 | 56 | % | |||||||||||||||||||||||||||||||||||
Other* | 436 | 3 | % | 177 | 1 | % | 1,331 | 3 | % | 1,983 | 3 | % | |||||||||||||||||||||||||||||||||||
Total revenues | $ | 15,630 | $ | 23,569 | $ | 42,114 | $ | 63,544 | |||||||||||||||||||||||||||||||||||||||
* Other revenue primarily relates to other marketing services |
Three Months Ended March 31, | ||||||||||||||||
2023 | 2022 | |||||||||||||||
(in thousands, except percentages) | ||||||||||||||||
Subscriptions – O&O Service | $ | 6,642 | 54 | % | $ | 7,307 | 41 | % | ||||||||
Subscriptions – App Services | 878 | 7 | % | 1,048 | 6 | % | ||||||||||
Subscriptions – Total | 7,520 | 61 | % | 8,355 | 47 | % | ||||||||||
License Fees – Partner Direct | 1,102 | 9 | % | 1,143 | 7 | % | ||||||||||
License Fees – Bundled Distribution | 1,473 | 12 | % | 3,767 | 21 | % | ||||||||||
License Fees – Content Licensing | 2,018 | 16 | % | 4,248 | 24 | % | ||||||||||
License Fees – Total | 4,593 | 37 | % | 9,158 | 52 | % | ||||||||||
Other – Total (1) | 274 | 2 | % | 114 | 1 | % | ||||||||||
Total Revenues | $ | 12,387 | $ | 17,627 | ||||||||||||
Remainder of year ending December 31, 2023 | December 31, | ||||||||||||||||||||||||||||||||||||||||
(in thousands) | 2024 | 2025 | 2026 | 2027 | Thereafter | Total | |||||||||||||||||||||||||||||||||||
Remaining performance obligations | $ | 1,671 | $ | 4,972 | $ | 2,179 | $ | 417 | $ | 34 | $ | 219 | $ | 9,492 |
Remainder of year ending December 31, | For the years ending December 31, | |||||||||||||||||||||||||||
2023 | 2024 | 2025 | 2026 | 2027 | Thereafter | Total | ||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||
Remaining Performance Obligations | $ | 5,695 | $ | 4,156 | $ | 2,096 | $ | 193 | $ | 31 | $ | 195 | $ | 12,366 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Trade and barter license fees: Content Licensing | $ | 4,949 | $ | — | $ | 7,416 | $ | — | |||||||||||||||
Other trade and barter revenue* | 250 | — | 774 | — | |||||||||||||||||||
Total trade and barter revenues | $ | 5,199 | $ | — | $ | 8,190 | $ | — | |||||||||||||||
* Other revenue primarily relates to other marketing services |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Trade and barter advertising and marketing | $ | 648 | $ | — | $ | 1,172 | $ | — | |||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||
(in thousands) | 2023 | 2022 | |||||||||||||||||||||
Trade and barter additions to content assets | $ | 7,124 | $ | — | |||||||||||||||||||
September 30, 2023 | December 31, 2022 | ||||||||||
Exercise price | $ | 11.50 | $ | 11.50 | |||||||
Stock price (CURI) | $ | 0.71 | $ | 1.14 | |||||||
Expected volatility | 92.00 | % | 77.00 | % | |||||||
Expected warrant term (years) | 2.0 | 2.8 | |||||||||
Risk-free interest rate | 5.03 | % | 4.22 | % | |||||||
Dividend yield | 0 | % | 0 | % | |||||||
Fair Value per Private Placement Warrant | $ | 0.02 | $ | 0.07 |
As of March 31, 2023 | As of December 31, 2022 | |||||||
Exercise price | $ | 11.50 | $ | 11.50 | ||||
Stock price (CURI) | $ | 1.35 | $ | 1.14 | ||||
Expected volatility | 79.00 | % | 77.00 | % | ||||
Expected warrant term (years) | 2.5 | 2.8 | ||||||
Risk-free interest rate | 3.94 | % | 4.22 | % | ||||
Dividend yield | 0 | % | 0 | % | ||||
Fair Value per Private Placement Warrant | $ | 0.09 | $ | 0.07 |
Three months ended March 31, | ||||||||
2023 | 2022 | |||||||
(in thousands, except per share data) | ||||||||
Numerator - Basic and Diluted EPS: | ||||||||
Net loss | $ | (7,751 | ) | $ | (15,892 | ) | ||
Denominator - Basic and Diluted EPS: | ||||||||
Weighted–average shares | 52,950 | 52,750 | ||||||
Net loss per share - Basic and Diluted | $ | (0.15 | ) | $ | (0.30 | ) | ||
(In thousands except per share amounts) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Numerator — Basic and Diluted EPS: | |||||||||||||||||||||||
Net loss | $ | (26,565) | $ | (4,502) | $ | (44,237) | $ | (36,371) | |||||||||||||||
Denominator — Basic and Diluted EPS: | |||||||||||||||||||||||
Weighted–average shares | 53,040 | 52,793 | 52,999 | 52,773 | |||||||||||||||||||
Net loss per share — Basic and Diluted | $ | (0.50) | $ | (0.09) | $ | (0.83) | $ | (0.69) |
Antidilutive shares excluded: | March 31, | |||||||
2023 | 2022 | |||||||
(in thousands) | ||||||||
Options | 4,630 | 5,293 | ||||||
Restricted Stock Units | 1,030 | 1,020 | ||||||
Warrants | 6,730 | 6,730 | ||||||
Total | 12,390 | 13,043 | ||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(In thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||||||||
Options | 33 | 5,190 | 33 | 5,190 | |||||||||||||||||||
Restricted stock units | 2,430 | 1,047 | 2,430 | 1,047 | |||||||||||||||||||
Warrants | 6,730 | 6,730 | 6,730 | 6,730 | |||||||||||||||||||
Total | 9,193 | 12,967 | 9,193 | 12,967 |
Number of Shares Available for Issuance Under the Plan | Stock Options | Restricted Stock Units | |||||||||||||||||||||||||||
(In thousands except share price and fair value amounts) | Number of Shares | Weighted- Average Exercise Price | Number of Shares | Weighted- Average Grant Date Fair Value | |||||||||||||||||||||||||
Balance at December 31, 2022 | 1,815 | 4,632 | $ | 7.13 | 759 | $ | 7.14 | ||||||||||||||||||||||
Granted | (1,923) | — | — | 1,923 | 1.06 | ||||||||||||||||||||||||
Options exercised and RSUs vested | 71 | — | — | (209) | 8.75 | ||||||||||||||||||||||||
Forfeited or expired | 4,642 | (4,599) | 7.17 | (43) | 11.91 | ||||||||||||||||||||||||
Balance at September 30, 2023 | 4,605 | 33 | $ | 5.30 | 2,430 | $ | 2.46 |
Stock Options | Restricted Stock Units | |||||||||||||||||||
Number of Shares Available for Issuance Under the Plan | Number of Shares | Weighted- Average Exercise Price | Number of Shares | Weighted- Average Grant Date Fair Value | ||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||
Balance at December 31, 2022 | 1,815 | 4,632 | $ | 7.13 | 759 | $ | 7.14 | |||||||||||||
Granted | (342 | ) | — | — | 342 | 1.41 | ||||||||||||||
Options exercised and RSUs vested | 18 | — | — | (49 | ) | 10.27 | ||||||||||||||
Forfeited or expired | 23 | (2 | ) | 5.88 | (21 | ) | 9.85 | |||||||||||||
Balance at March 31, 2023 | 1,514 | 4,630 | $ | 7.13 | 1,030 | $ | 4.89 | |||||||||||||
Three months ended March 31, | ||||||
2023 | 2022 | |||||
Dividend yield | N/A | 0 | % | |||
Expected volatility | N/A | 60% - 65 | % | |||
Expected term (years) | N/A | 6.00 - 6.50 | ||||
Risk-free interest rate | N/A | 1.40% - 2.44 | % | |||
Weighted average grant date fair value | N/A | $2.30 | ||||
(in thousands) | ||||||
Stock-based compensation - Options | $777 | $967 | ||||
Stock-based compensation - RSUs | $490 | $821 |
(Stock-based compensation data in thousands) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Dividend yield | N/A | N/A | N/A | 0 | % | ||||||||||||||||||
Expected volatility | N/A | 65% - 70% | N/A | 60% - 70% | |||||||||||||||||||
Expected term (years) | N/A | N/A | N/A | 6.00 - 6.50 | |||||||||||||||||||
Risk-free interest rate | N/A | 2.81% - 2.95% | N/A | 1.40% - 2.95% | |||||||||||||||||||
Weighted average grant date fair value | N/A | N/A | N/A | $ | 1.91 | ||||||||||||||||||
Stock-based compensation — Options | $ | 5 | $ | 999 | $ | 1,553 | $ | 2,913 | |||||||||||||||
Stock-based compensation — RSUs | $ | 892 | $ | 674 | $ | 2,033 | $ | 2,142 | |||||||||||||||
Total stock-based compensation | $ | 897 | $ | 1,673 | $ | 3,586 | $ | 5,055 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||||||||||
United States | $ | 8,973 | 57 | % | $ | 13,845 | 59 | % | $ | 23,595 | 56 | % | $ | 40,348 | 63 | % | |||||||||||||||||||||||||||||||
International: | |||||||||||||||||||||||||||||||||||||||||||||||
Canada | 1,674 | 11 | % | 412 | 2 | % | 2,566 | 6 | % | 1,215 | 2 | % | |||||||||||||||||||||||||||||||||||
Germany | 149 | 1 | % | 3,287 | 14 | % | 1,797 | 4 | % | 4,704 | 7 | % | |||||||||||||||||||||||||||||||||||
Netherlands | 1,566 | 10 | % | 516 | 2 | % | 3,216 | 8 | % | 1,068 | 2 | % | |||||||||||||||||||||||||||||||||||
Other | 3,268 | 21 | % | 5,509 | 23 | % | 10,940 | 26 | % | 16,209 | 26 | % | |||||||||||||||||||||||||||||||||||
Total International | 6,657 | 43 | % | 9,724 | 41 | % | 18,519 | 44 | % | 23,196 | 37 | % | |||||||||||||||||||||||||||||||||||
Total revenue | $ | 15,630 | 100 | % | $ | 23,569 | 100 | % | $ | 42,114 | 100 | % | $ | 63,544 | 100 | % |
Three months ended March 31, | ||||||||||||||||
2023 | 2022 | |||||||||||||||
(in thousands) | ||||||||||||||||
United States | $ | 6,686 | 54 | % | $ | 11,799 | 67 | % | ||||||||
International: | ||||||||||||||||
Netherlands | 1,246 | 10 | % | 65 | 0 | % | ||||||||||
United Kingdom | 562 | 5 | % | 1,901 | 11 | % | ||||||||||
Other | 3,893 | 31 | % | 3,862 | 22 | % | ||||||||||
Total International | 5,701 | 46 | % | 5,828 | 33 | % | ||||||||||
$ | 12,387 | 100 | % | $ | 17,627 | 100 | % | |||||||||
(In thousands) | September 30, 2023 | December 31, 2022 | |||||||||
Accounts receivable | $ | 1,045 | $ | 3,358 | |||||||
Accounts payable | $ | 376 | $ | 404 |
Balance sheets: | March 31, | December 31, | ||||||
2023 | 2022 | |||||||
(in thousands) | ||||||||
Accounts receivable | $ | 2,804 | $ | 3,358 | ||||
Accounts payable | 788 | 404 | ||||||
Accrued expenses and other liabilities | 14 | — |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(In thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Revenues | $ | — | $ | 2,192 | $ | 1,084 | $ | 4,233 | |||||||||||||||
Cost of revenues | $ | 1,142 | $ | 1,096 | $ | 3,508 | $ | 3,135 |
Statement of operations: | Three months ended March 31, | |||||||
2023 | 2022 | |||||||
(in thousands) | ||||||||
Revenues | $ | 794 | $ | — | ||||
Cost of revenues | 1,202 | 990 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(In thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Operating lease cost | $ | 120 | $ | 121 | $ | 362 | $ | 363 | |||||||||||||||
Short-term lease cost* | — | 6 | (16) | 42 | |||||||||||||||||||
Variable lease cost | 13 | 12 | 38 | 36 | |||||||||||||||||||
Total lease cost | $ | 133 | $ | 139 | $ | 384 | $ | 441 | |||||||||||||||
* Short term lease cost includes a refund received by the Company during the nine months ended September 30, 2023, for office space it previously occupied. |
Three months ended March 31, | ||||||||
2023 | 2022 | |||||||
(in thousands) | ||||||||
Operating lease cost | 121 | 121 | ||||||
Short-term lease cost | — | 18 | ||||||
Variable lease cost | 13 | 11 | ||||||
Total lease cost | 134 | 150 | ||||||
(In thousands) | |||||
Three remaining months of 2023 | $ | 106 | |||
2024 | 557 | ||||
2025 | 571 | ||||
2026 | 585 | ||||
2027 | 600 | ||||
Thereafter | 3,346 | ||||
Total lease payments | $ | 5,765 | |||
Less: imputed interest | (1,061) | ||||
Present value of total lease liabilities | $ | 4,704 |
Remaining nine months of 2023 | $ | 409 | ||
2024 | 557 | |||
2025 | 571 | |||
2026 | 585 | |||
2027 | 600 | |||
Thereafter | 3,346 | |||
Total Lease Payments | $ | 6,068 | ||
Less: imputed interest | (1,165 | ) | ||
Present value of total lease liabilities | $ | 4,903 | ||
Item
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Cautionary Note Regarding Forward-looking Statements
Overview
Three Months Ended March 31, | ||||||||||||||||
2023 | 2022 | |||||||||||||||
(in thousands) | ||||||||||||||||
Direct Business | $ | 8,582 | 70 | % | $ | 8,334 | 47 | % | ||||||||
Bundled Distribution | 1,473 | 12 | % | 3,767 | 21 | % | ||||||||||
Content Licensing | 2,018 | 16 | % | 4,248 | 24 | % | ||||||||||
Enterprise | 40 | 0 | % | 1,163 | 7 | % | ||||||||||
Other | 274 | 2 | % | 114 | 1 | % | ||||||||||
|
|
|
| |||||||||||||
Total Revenues | $ | 12,387 | $ | 17,627 | ||||||||||||
|
|
|
|
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||||
Direct Business | $ | 8,574 | 55 | % | $ | 8,589 | 36 | % | $ | 25,466 | 60 | % | $ | 25,476 | 40 | % | |||||||||||||||||||||||||||||||
Content Licensing | 5,082 | 33 | % | 10,790 | 46 | % | 10,715 | 25 | % | 21,692 | 34 | % | |||||||||||||||||||||||||||||||||||
Bundled Distribution | 1,504 | 10 | % | 2,595 | 11 | % | 4,487 | 12 | % | 10,250 | 16 | % | |||||||||||||||||||||||||||||||||||
Enterprise | 34 | 0 | % | 1,418 | 6 | % | 115 | 0 | % | 4,143 | 7 | % | |||||||||||||||||||||||||||||||||||
Other | 436 | 3 | % | 177 | 1 | % | 1,331 | 3 | % | 1,983 | 3 | % | |||||||||||||||||||||||||||||||||||
Revenues | $ | 15,630 | $ | 23,569 | $ | 42,114 | $ | 63,544 |
18
Our App Services enable access to CuriosityStream on almost every major consumer device, including streaming media players like Roku, Apple TV and Amazon Fire TV, major smart TV brands (e.g., LG, Vizio, Samsung) and gaming consoles. The MVPD, vMVPDmultichannel video programming distributors (“MVPDs”), virtual MVPDs (“vMVPDs”) and digital distributor partners making up our Partner Direct Business pay us a license fee for sales to individuals who subscribe to CuriosityStream via the partners’ respective platforms. We have affiliate agreement relationships with, and our service is available directly from, major MVPDs that include Comcast, Cox, Dish and vMVPDs and digital distributors that include Amazon Prime Video Channels, Apple Channel, Roku Channel, Sling TV and YouTube TV.
In addition to our Direct Business described above, our Bundled Distribution business includes affiliate relationships with our Bundled MVPD Partners and vMVPDs, which are broadband and wireless companies in the U.S. and international territories to whom we can offer a broad scope of rights, including 24/7 “linear” channels, our on-demand content library, mobile rights and pricing and packaging flexibility, in exchange for an annual fixed fee or fee per subscriber.
In
Our Unaudited Consolidated Financial Statements
Key Factors Affecting Results of Operations
Currently, the main sources of our revenue are (i) subscriber and license fees earned from our Direct Business (“Direct Business”), (ii) bundled license fees from distribution affiliates (“Bundled Distribution”), (iii) license fees from content licensing arrangements (“Content Licensing”), (iv) subscriber fees from our Enterprise business (“Enterprise”), and (v) Other revenue, including advertising and sponsorships (“Other”).
Cost of revenues encompasses content amortization, distribution fees, revenue sharing arrangements, hosting and streaming delivery costs, payment processing costs, commission costs, and subtitling and broadcast costs.
19
Results of Operations
The Company operates as one reporting segment.
Three months ended March 31, | ||||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | |||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||
Subscriptions | $ | 7,520 | 61 | % | $ | 8,355 | 47 | % | $ | (835 | ) | (10 | %) | |||||||||||
License fees | 4,593 | 37 | % | 9,158 | 52 | % | (4,565 | ) | (50 | %) | ||||||||||||||
Other | 274 | 2 | % | 114 | 1 | % | 160 | 140 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Revenues | $ | 12,387 | 100 | % | $ | 17,627 | 100 | % | $ | (5,240 | ) | (30 | %) | |||||||||||
Operating expenses | ||||||||||||||||||||||||
Cost of revenues | 9,001 | 45 | % | 11,850 | 32 | % | (2,849 | ) | (24 | %) | ||||||||||||||
Advertising and marketing | 3,115 | 15 | % | 14,768 | 40 | % | (11,653 | ) | (79 | %) | ||||||||||||||
General and administrative | 8,059 | 40 | % | 10,503 | 28 | % | (2,444 | ) | (23 | %) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total operating expenses | $ | 20,175 | 100 | % | $ | 37,121 | 100 | % | $ | (16,946 | ) | (46 | %) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Operating loss | (7,788 | ) | (19,494 | ) | 11,706 | (60 | %) | |||||||||||||||||
Other income (expense) | ||||||||||||||||||||||||
Change in fair value of warrant liability | (74 | ) | 3,860 | (3,934 | ) | n/m | ||||||||||||||||||
Interest and other income (expense) | 388 | (57 | ) | 445 | n/m | |||||||||||||||||||
Equity method investment loss | (219 | ) | (156 | ) | (63 | ) | 40 | % | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Loss before income taxes | $ | (7,693 | ) | $ | (15,847 | ) | $ | 8,154 | (51 | %) | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Provision for income taxes | 58 | 45 | 13 | 29 | % | |||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Net loss | $ | (7,751 | ) | $ | (15,892 | ) | $ | 8,141 | (51 | %) | ||||||||||||||
|
|
|
|
|
|
|
|
n/m - percentage not meaningful
Three Months Ended September 30, | $ Change | % Change* | |||||||||||||||||||||||||||||||||
(Unaudited and in thousands) | 2023 | 2022 | |||||||||||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||||||||||
Subscriptions | $ | 7,431 | 47 | % | $ | 8,850 | 38 | % | $ | (1,419) | (16 | %) | |||||||||||||||||||||||
License fee | 7,763 | 50 | % | 14,542 | 61 | % | (6,779) | (47 | %) | ||||||||||||||||||||||||||
Other | 436 | 3 | % | 177 | 1 | % | 259 | 146 | % | ||||||||||||||||||||||||||
Total revenue | $ | 15,630 | 100 | % | $ | 23,569 | 100 | % | $ | (7,939) | (34 | %) | |||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||
Cost of revenues | 8,494 | 21 | % | 13,566 | 49 | % | (5,072) | (37 | %) | ||||||||||||||||||||||||||
Advertising and marketing | 5,106 | 13 | % | 5,626 | 20 | % | (520) | (9 | %) | ||||||||||||||||||||||||||
General and administrative | 6,959 | 18 | % | 8,757 | 31 | % | (1,798) | (21 | %) | ||||||||||||||||||||||||||
Impairment of content assets | 18,970 | 48 | % | — | — | % | 18,970 | 100 | % | ||||||||||||||||||||||||||
Total operating expenses | $ | 39,529 | 100 | % | $ | 27,949 | 100 | % | $ | 11,580 | 41 | % | |||||||||||||||||||||||
Operating loss | (23,899) | (4,380) | (19,519) | 446 | % | ||||||||||||||||||||||||||||||
Other income (expense) | |||||||||||||||||||||||||||||||||||
Change in fair value of warrant liability | 74 | 514 | (440) | n/m | |||||||||||||||||||||||||||||||
Interest and other income (expense) | 31 | (478) | 509 | n/m | |||||||||||||||||||||||||||||||
Equity method investment loss | (2,638) | (94) | (2,544) | 2706 | % | ||||||||||||||||||||||||||||||
Loss before income taxes | $ | (26,432) | $ | (4,438) | $ | (21,994) | 496 | % | |||||||||||||||||||||||||||
Provision for income taxes | 133 | 64 | 69 | n/m | |||||||||||||||||||||||||||||||
Net loss | $ | (26,565) | $ | (4,502) | $ | (22,063) | 490 | % | |||||||||||||||||||||||||||
* n/m = percentage not meaningful |
Revenue for
Bundled Distribution agreements, partially offset by an increase of from new trade and barter license agreements. The decrease in Subscriptions revenue resultedof $1.4 million was primarily fromdue to the termination of certain corporate subscriptions related to certain bulk agreements, that endedwhich termination occurred in the third quarter of 2022.
The decrease in License Fees revenue
Operating Expenses
OperatingSeptember 30, 2023, operating expenses were $39.5 million compared to $27.9 million for the same period in 2022, an increase of $11.6 million, or 41%.
decrease in content amortization and a decrease in revenue share expense related to bundled and premier tier arrangements with other streaming services.
20
Content Assets. Advertising & Marketing: Advertising and marketing expenses forFor the three months ended March 31,September 30, 2023, decreasedwe incurred an impairment charge of $19.0 million related to $3.1 million from $14.8 million our content assets. In comparison, no such impairments were incurred for the same period in 2022. For a more detailed discussion of the impairment charge and the underlying factors contributing to the impairment, refer to Note 4 - Content Assets in the Notes to Unaudited Consolidated Financial Statements.
General and Administrative: General and administrative expenses for the three months ended March 31, 2023 decreased to $8.1 million from $10.5$4.4 million for the three months ended March 31, 2022. This decrease of $2.4 million, or 23%, is primarilysame period in 2022.This increase was almost entirely attributable to a decrease of $1.1the
Operating loss for the three months ended March 31, 2023 and 2022 was $7.8 million and $19.5 million, respectively. The decrease in our operating loss of $11.7 million, or 60%, resulted from the decrease in operating expenses of $16.9 million, or 46%, partially offset by the decrease in revenue of $5.2 million, or 30%,in each case during the three months ended March 31, 2023, compared to the three months ended March 31, 2022, as described above.
For the three months ended March 31,September 30, 2023, the Company recognized a $0.1 million loss related to the change in fair value of the warrant liability due to an increase in the fair value of thewarrant liability related to Private Placement Warrants comparedresulted in income of $0.1 million, a decrease of $0.4 million from the income of $0.5 million in the same period in 2022. The change primarily stemmed from fluctuations in the market price of our common stock and the corresponding changes to a gain of $3.9 million recognizedthe underlying assumptions used in the valuation model used for our Private Placement Warrants during the three months ended March 31, 2022 due to a decreasesame period in the fair value of the Private Placement Warrants.
2022.
Interest and other income (expense) for the three months ended March 31,September 30, 2023, was $0.4$0.1 million income compared to $0.1$0.5 million expense for the three months ended March 31,same period in 2022. The increase isdecrease was primarily related to an increasea decrease in interest income during the current year period.
For the three months ended March 31,September 30, 2023, and 2022, the Company recorded $0.2a loss of $2.6 million equity method investmentcompared to a loss of $0.1 million for the same period in 2022, related to its investments in Spiegel Venture and Nebula.
Provision for The increase was primarily due to the $2.3 million impairment charge recorded by the Company to its investment in Nebula during the third quarter of 2023.
We had a
21
Net
Nine Months Ended September 30, 2023 | $ Change | % Change* | ||||||||||||||||||||||||||||||||||||
(Unaudited and in thousands) | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||||||||||||||
Subscriptions | $ | 22,220 | 53 | % | $ | 26,128 | 41 | % | $ | (3,908) | (15 | %) | ||||||||||||||||||||||||||
License fee | 18,563 | 44 | % | 35,433 | 56 | % | (10,094) | (28 | %) | |||||||||||||||||||||||||||||
Other | 1,331 | 3 | % | 1,983 | 3 | % | (911) | (46 | %) | |||||||||||||||||||||||||||||
Total revenue | $ | 42,114 | 100 | % | $ | 63,544 | 100 | % | $ | (21,430) | (34 | %) | ||||||||||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||||||||||||||||
Cost of revenues | 27,428 | 34 | % | 38,404 | 37 | % | (10,976) | (29 | %) | |||||||||||||||||||||||||||||
Advertising and marketing | 12,424 | 15 | % | 31,602 | 31 | % | (19,178) | (61 | %) | |||||||||||||||||||||||||||||
General and administrative | 22,998 | 28 | % | 29,863 | 29 | % | (6,865) | (23 | %) | |||||||||||||||||||||||||||||
Impairment of content assets | 18,970 | 23 | % | — | — | % | 18,970 | 100 | % | |||||||||||||||||||||||||||||
Impairment of goodwill and intangible assets | — | — | 3,603 | 3 | % | (3,603) | (100 | %) | ||||||||||||||||||||||||||||||
Total operating expenses | $ | 81,820 | 100 | % | $ | 103,472 | 100 | % | $ | (21,652) | (21 | %) | ||||||||||||||||||||||||||
Operating loss | (39,706) | (39,928) | 222 | (1 | %) | |||||||||||||||||||||||||||||||||
Other income (expense) | ||||||||||||||||||||||||||||||||||||||
Change in fair value of warrant liability | 184 | 4,852 | (4,668) | (96 | %) | |||||||||||||||||||||||||||||||||
Interest and other income (expense) | 856 | (564) | 1,420 | n/m | ||||||||||||||||||||||||||||||||||
Equity method investment loss | (5,092) | (566) | (4,526) | (420 | %) | |||||||||||||||||||||||||||||||||
Loss before income taxes | $ | (43,758) | $ | (36,206) | $ | (7,552) | 21 | % | ||||||||||||||||||||||||||||||
Provision for income taxes | 479 | 165 | 314 | n/m | ||||||||||||||||||||||||||||||||||
Net loss | $ | (44,237) | $ | (36,371) | $ | (7,866) | 22 | % |
Our principal uses of
Flow Analysis
Three months ended March 31, | ||||||||
2023 | 2022 | |||||||
(in thousands) | ||||||||
Net cash used in operating activities | $ | (6,308 | ) | $ | (12,287 | ) | ||
Net cash provided by investing activities | 14,995 | 19,773 | ||||||
Net cash used in financing activities | (26 | ) | (137 | ) | ||||
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Net increase in cash, cash equivalents and restricted cash | $ | 8,661 | $ | 7,349 | ||||
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Nine Months Ended September 30, | |||||||||||
(Unaudited and in thousands) | 2023 | 2022 | |||||||||
Net cash used in operating activities | $ | (13,630) | $ | (30,744) | |||||||
Net cash provided by investing activities | 14,003 | 60,701 | |||||||||
Net cash used in financing activities | (76) | (178) | |||||||||
Net increase in cash, cash equivalents and restricted cash | $ | 297 | $ | 29,779 |
During
The net cash outflow used by operating activities for
The net cash outflow used by operating activities for the threenine months ended March 31,September 30, 2023, $7.1 million was attributable to non-cash trade and barter arrangements.
22
Cash Flows from Investing Activities
During
The net
The net For the nine months ended September 30, 2022, our cash inflow provided by investing activities for the three months ended March 31, 2022, was primarily due to the sale and maturities of investments in debt securities of $22.1$64.8 million, partially offset by purchases of investments in debt securities of $1.5 million and investments in Nebula of $0.8$2.4 million.
During
each period.
Off Balance Sheet Arrangements
Critical Accounting Policies and Estimates
Content acquired or licensed through trade and barter transactions is also reported within additions to content assets.
23
Amortization of content assets is reported within “Cost of revenues” in the unaudited consolidated statements of operations. Based on factors including historical and estimated viewing patterns, the Company previously amortized the content assets (licensed and produced) in “Cost of revenues” on the unaudited consolidated statements of operations on a straight-line basis over the shorter of each title’s contractual window of availability or estimated period of use, beginning withat the month of first availability.time a title is published on the Company’s platform. Starting July 1, 2021, the Company amortizesbegan amortizing content assets on an accelerated basis in the initial two months after a title is published, on the Company’s platform, as the Company has observed and expects more upfront viewing of content, generally as a result of additional marketing efforts.
abandoned.
Subscriptions —Recognition
The Company generates revenue from monthly subscription fees from its O&O Service. CuriosityStream subscribers enter into month-to-month or annual subscriptions with the Company. The Company bills the monthly subscriber on each subscriber’s monthly anniversary date and recognizes the revenue ratably over each monthly membership period. The annual subscription fees are collected by the Company at the start of the annual subscription period and are recognized ratably over the subsequent twelve-month period. Revenues are presented net of the taxes that are collected from subscribers and remitted to governmental authorities.
The Company also earns subscription revenues through its App Services. These subscriptions are similar to the O&O Service subscriptions, but are generated based on agreements with certain streaming media players as well as with Smart TV brands and gaming consoles. Under these agreements, the streaming media player typically bills the subscriber directly and then remits the collected subscriptions to the Company, net of a distribution fee. The Company recognizes the gross subscription revenues when earned and simultaneously recognizes the corresponding distribution fees as an expense. The Company is the principal in these relationships as the Company retains control over service delivery to its subscribers.
License Fees —
The Company generates license fee revenues from MVPDs such as Comcast and Cox as well as from vMVPDs such as Amazon and Sling TV (MVPDs and vMVPDs are also referred to as affiliates). Under the terms of the agreements with these affiliates, the Company receives license fees based upon contracted programming rates and subscriber levels reported by the affiliates. In exchange, the Company licenses its content to the affiliates for distribution to their subscribers. The Company earns revenue under these agreements either based on the total number of subscribers multiplied by rates specified in the agreements or based on fixed fee arrangements. These revenues are recognized over the term of each agreement when earned.
. In the second quarter of 2023, the Company began entering into trade and barter transactions primarily for the purpose of exchanging content assets through licensing agreements with media counterparties, while certain transactions may also include the exchange of advertising, whereby the Company and its counterparty exchange media campaigns or other promotional services. The Company has distribution agreements which grant a licensee limited distribution rightsreviews each transaction to confirm that the content assets, advertising or other services it receives have economic substance, and records revenue in an amount equal to the fair value of what it receives and at the time that it completes its performance obligation. For advertising, the performance obligation is satisfied upon the Company’s programs for varying terms, generally indelivery of the media campaign or other service to the counterparty. For an exchange for a fixed license fee. Revenueof content, the performance obligation is recognized oncesatisfied at the time the content is made available for the licenseecounterparty to use.
The Company’s performance obligations include (1) access to its SVOD platform viause, which represents the Company’s O&O Service and App Services, (2) access to the Company’s content assets, and (3) licenses of specific program titles. In contracts containing the right to access the Company SVOD platform, the performance obligationpoint in time that control is satisfied as access to the SVOD platform is provided post any free trial period. In contracts which contain access to the Company’s content assets, the performance obligation is satisfied as access to the content is provided. For contracts with licenses of specific program titles, the performance obligation is satisfied as that content is made available for the customer to use.
Recently Adopted Financial Accounting Standards
transferred.
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ItemITEM 3. Quantitative and Qualitative Disclosures About Market Risk
QUANTITATIVE AND QUALITATIVE DISCLOSURES REGARDING MARKET RISK
Item
Disclosure Controls and Procedures
CONTROLS AND PROCEDURES
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Item
LEGAL PROCEEDINGS
Item
RISK FACTORS
Item
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Item
DEFAULTS UPON SENIOR SECURITIES
Item
MINE SAFETY DISCLOSURES
26
Item
OTHER INFORMATION
Item
EXHIBITS
Incorporated By Reference | |||||||||||||||||||||||||||||||||||||||
Exhibit No. | Description | Form | File No. | Exhibit | Filing Date | Filed/Furnished Herewith | |||||||||||||||||||||||||||||||||
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31.1 | |||||||||||||||||||||||||||||||||||||||
| X | ||||||||||||||||||||||||||||||||||||||
31.2 | X | ||||||||||||||||||||||||||||||||||||||
32.1* | X | ||||||||||||||||||||||||||||||||||||||
101. INS** | Inline XBRL Instance Document | X | |||||||||||||||||||||||||||||||||||||
101. SCH | Inline XBRL Taxonomy Extension Schema Document | X | |||||||||||||||||||||||||||||||||||||
101. CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X | |||||||||||||||||||||||||||||||||||||
101. LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | X | |||||||||||||||||||||||||||||||||||||
101. PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | X | |||||||||||||||||||||||||||||||||||||
101. DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | X | |||||||||||||||||||||||||||||||||||||
104 | Cover Page Interactive Data File (as formatted as Inline XBRL and contained in Exhibit 101) | X |
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CURIOSITYSTREAM INC. | |||||||||||||
Date: | By: | /s/ Clint Stinchcomb | |||||||||||
Name: | Clint Stinchcomb | ||||||||||||
Title: | President and Chief Executive Officer | ||||||||||||
(Principal Executive Officer) | |||||||||||||
Date: | By: | /s/ Peter Westley | |||||||||||
Name: | Peter Westley | ||||||||||||
Title: | Chief Financial Officer and Treasurer | ||||||||||||
(Principal Financial and Accounting Officer) |
28