UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM 10-Q
_____________________
(MARK ONE)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
For the quarter ended March 31,September 30, 2023
| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
For the transition period fromto
_________ to _________
Commission file
number: 001-39139
_____________________
CURIOSITYSTREAM INC.
(Exact Name of Registrant as Specified in Its Charter)
_____________________
Delaware | 84-1797523 | |||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||
8484 Georgia Ave., Suite 700
Silver Spring,
Maryland 20910
(Address of principal executive offices)
(301)
755-2050
(Issuer’s telephone number)
_____________________
Securities registered pursuant to Section 12(b) of the Act:
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 | ||||||||||||||
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 ☒x No ☐
oIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation(§ (§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 ☒x No ☐o
S-T
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 definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” inRule 12b-2
of the Exchange Act.| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||||||||||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||||||||||||
| Emerging growth company | ☒ | |||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule
12b-2
of the Exchange Act). Yes ☐ No ☒As of May 10,November 3, 2023 there were 52,970,260 shares, 53,075,952 shares of Common Stock of the registrant were issued and outstanding.
CURIOSITYSTREAM INC.
QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2023
TABLE OF CONTENTS
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 | |||||||
The accompanying notes are an integral part of these consolidated financial statements.
1
| 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 | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
2
CURIOSITYSTREAM INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
| 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) | |||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
3
CURIOSITYSTREAM INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
| (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 | ||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
4
CURIOSITYSTREAM INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| 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 | |||||||
The accompanying notes are an integral part of these consolidated financial statements.
5
The principal business of CuriosityStream Inc. (the “Company” or “CuriosityStream”) is to provideproviding customers with access to high quality factual content via a direct subscription videowhothat deliver CuriosityStream content via the distributor’s platform or system. The Company’s online library available for streaming spans the entire category of factual entertainment including science, history, society, nature, lifestyle, and technology. The library is composed of more than six thousandthousands of accessible on-demand and ad-free productions and includes shows and series from leading non-fictionnonfiction producers.
on-demand
(SVOD) platform accessible by internet connected devices, or indirectly via distribution partners The Company’s content assets are available for consuming directly through its owned and operated website (“O&O Service”), mobile applications developed for iOS and Android operating systems (“App Services”), and via the platforms and systems of third-party partners in exchange for license fees. The Company offers subscribers a monthly or annual subscription. The price for a subscription varies depending on the content included (e.g., Direct Service or Smart Bundle service) and the length of the subscription (e.g., monthly or annual) selected by the customer. As an additional part of the Company’s App Services, it has built applications to make its service accessible on almost every major customer 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. In addition, CuriosityStream has affiliate agreement relationships with, and its content assets are available through, certain multichannel video programming distributors (“MVPDs”) and virtual MVPDs (“vMVPDs”). The Company also has distribution agreements which grant other media companies certain distribution rights to the Company’s programs, referred to as content licensing deals. The Company also sells selected rights to content it creates before production begins.
The accompanying unaudited consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and are consistent in all material respects with those applied in the Company’s consolidated financial statements as of and for the year ended December 31, 2022.
In the opinion of management, the unaudited consolidated financial statements include all adjustments of a normal recurring nature necessary for the fair presentation of the Company’s financial position, results of operations, and cash flows. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes andincluded in the Annual Report on FormMarch 31,September 30, 2023, are not necessarily indicative of the results to be expected for the year ending December 31, 2023.
Management’s Discussion and Analysis of Financial Condition, and Results of Operations
10-K
for the year ended December 31, 2022. The results of operations for the three and nine months ended Impairment
During the three months ended September 30, 2023, the Company adopted the new accounting guidanceidentified certain indicators of impairment related to credit lossesits content assets and performed an analysis of these assets to assess if fair value was less than unamortized costs. Refer to Note 4 - Balance Sheet Components for further discussion. In addition, during the three months ended September 30, 2023, the Company separately performed an analysis of its Investments in equity method investees to determine if an “other-than-temporary” impairment existed. Refer to Note 3 - Equity Investments, for further discussion on financial instrumentsthe results of this analysis.
6
The Company periodically reviews and evaluates the recoverability of its long-lived assets. Where applicable, estimates of net future cash flows, on an undiscounted basis, are calculated based on future revenue and operating performance estimates. If appropriate and where deemed necessary, a reduction in the current interim period,carrying value is recorded based on the difference between the carrying value and the fair value based on discounted cash flows.
During the three months ended September 30, 2023, the Company identified certain indicators of impairment with respect to its long-lived asset group, including the adoptioncontinual decline in the Company’s stock price. Based on the resulting impairment analysis, the Company determined that the undiscounted cash flows of the respective guidance not resulting in a material impactlong-lived asset group, exceeded the carrying value as of September 30, 2023, subsequent to the Company’s consolidated financial statements.impairment of content assets discussed above. As such, no impairment charges with respect to the long-lived asset group were required to be recorded by the Company during the three months ended September 30, 2023.
Use of estimatesEstimates
The preparation of consolidated financial statements in conformity with U.S. GAAP and the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements and accompanying notes. Actual results couldcould differ from those estimates. Significant items subject to such estimates include theamortization and fair value of content asset amortization policy,assets, the assessment of the recoverability of content assets and equity method investments, and the determination of fair value ofestimates related to non-monetary transactions, share-based awards, and liability classified warrants and measurement of income tax assets andwarrants.
Concentration of risk
Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash, cash equivalents, investments, and accounts receivable. The Company maintains its cash, cash equivalents, and investments with high credit quality financial institutions; at times, such balances with the financial institutions may exceed the applicable FDIC-insured limits.
Accounts receivable, net are typically unsecured and are derived from revenues earned from customers primarily located in the United States.States.
Fair value measurementValue Measurement of financial instruments
Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The applicable accounting guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value:
•Level 1 —: Quoted prices in active markets for identical assets or liabilities.
•Level 2 —: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
•Level 3 — : Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurements. The Company reviews the fair value hierarchy classification at each reporting period. Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy.
7
The Company’s assets measured at fair value on a recurring basis includehave included its investments in money market funds and corporate debt securities.securities (at December 31, 2022). Level 1 inputs were derived by using unadjusted quoted prices for identical assets in active markets and were used to value the Company’s investments in money market funds and U.S. government debt securities. Level 2 inputs were derived using prices for similar investments and were used to value the Company’s investments in corporate and municipal debt securities.
The Company’s liabilities measured at fair value on a recurring basis include its private placement warrants issued to Software Acquisition Holdings LLC, the Company’s former Sponsor, in a private placement offering (the “Private Placement Warrants”). The fair value of the Private Placement Warrants is considered a Level 3 valuation and is determined using the Black-ScholesBlack-Scholes valuation model. Refer to Note 6 - Stockholders’ Equity for significant assumptions which the Company used in the fair value model for the Private Placement Warrants.
Certain assets are measured at fair value on a nonrecurring basis and are subject to fair value adjustments only in certain circumstances, e.g., when there is evidence of impairment indicators. During the three-months ended September 30, 2023, the Company performed an analysis of its investments in equity method investees to determine if an “other-than-temporary” impairment exists. In addition, the Company assessed the fair value of its content as a result of identifying indicators of impairment related to those assets. The resulting fair value measurements of the equity-method investments and content assets are considered to be Level 3 measurements. Refer to Note 3 - Equity Investments and Note 4 - Balance Sheet Components for further discussion of the results of these analyses.
The Company’s remaining financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses and other liabilities are carried at cost, which approximates fair value because of the short-term maturity of these instruments.
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)“Financial Instruments— “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASUdidhas not havehad a material impact on its consolidated financial statements.
No. 2016-13,
2016-13”).”
The amendments in this update introduce a new standard to replace the incurred loss impairment methodology underprior
U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.The Company determines its allowance for doubtful accounts based on historical loss experience, customer financial condition, and current economic conditions.
The Company adopted the new standard effective January 1, 2023, which | (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 | |||||||||||
8
SPIEGEL VENTURE
In July 2021, the Company acquired a 32% ownership in Spiegel TV Geschichte und Wissen GmbH & Co. KG (the “Spiegel Venture”)
Spiegel Venture, which prior to the Company’s equity purchase, was jointly owned and operated by Spiegel TV GmbH (“Spiegel TV”) and Autentic GmbH (“Autentic”), operates two documentary channels, together with an SVOD service as well as a FAST channel, which provide factual content to pay television audiences in Germany.Germany and certain German-speaking countries. The Company has not received any dividends from the Spiegel Venture as of March 31,September 30, 2023.
Per the Share Purchase Agreement (as amended in early 2023, the “SPA”), in the event Spiegel Venture achieved certain financial targets during its 2022 fiscal period, the Company is required to make an additional payment related to its 32% equity ownership to both Spiegel TV and Autentic (the “Holdback Payment”). During the three months ended June 30, 2023, the Company determined Spiegel Venture had achieved such financial targets, resulting in the Company paying a Holdback Payment in the amount of $0.9 million to Spiegel Venture during July 2023.
The Company has a call option that permits it to require Spiegel TV and Autentic to sell their ownership interests in Spiegel Venture (“Call Option”) to the Company. The Call Option, exercisable at a value based on a determinable calculation in the Share Purchase Agreement, which was amended during the three months ended March 31, 2023 (as amended, the “SPA”),SPA, is initially exercisable only during the period that is the later of (i) the
30-day
period following the adoption of Spiegel Venture’s audited financial statements for the fiscal year 2025, and (ii) the period between March 1, 2026, and March 30, 2026.Together with the Call Option, each of Spiegel TV and Autentic has a put option that permits it to require the Company to purchase their interest (“Put Option”) at a value based on a determinable calculation outlined in the SPA. The Put Option is only exercisable upon the achievement of certain defined conditions, as outlined in the SPA, and is initially exercisable only during the period that is the later of (i) the
60-day
period following the adoption of Spiegel Venture’s audited financial statements for the fiscal year 2025, and (ii) the period between April 1, 2026 and April 30, 2026.
In the event the Call Option or Put Option is not exercised, both options
will
continue to be available to each respective party in the following year through perpetuity, with its exercise limited to the same date range as outlined above. The Put Option is not currently considered to be probable of becoming exercisable based on the defined conditions in the SPA.NEBULA
Watch Nebula LLC (“Nebula”)
is an SVOD technology platform built for and by a group of independent content creators. On August 23, 2021, the Company purchased a 12% ownership interest in Nebula for $6.0 million. Nebula is an SVOD technology platform built for and by a group of content creators. Should Nebula meet certain quarterly targets through the third quarter of 2023,Upon its initial investment, the Company is obligated to purchase additional ownership interests, each for a payment of $0.8 million. Aftereach payment the Company will obtain an additional 1.625% of equity ownership interests. The Company did not make further investments in Nebula during the three months ended March 31, 2023. The Company’stotal ownership interest in Nebula as of March 31, 2023 is 16.875%.Prior to the Company’s investment, Nebula was a 100% wholly owned subsidiary of Standard Broadcast LLC (“Standard”). The Company obtained 25% of the representation on Nebula’s Board of Directors, providing the Company with significant influence, but not a controlling interest.
Since the time of its original investment, the Company has been obligated to purchase additional incremental ownership interests, each for a payment of $0.8 million and representing 1.625% of equity ownership, if Nebula meets certain quarterly targets. The Company has made three subsequent incremental purchases, bringing its total ownership interest in Nebula to 16.875% as of September 30, 2023. The Company did not make further investments in Nebula during the three and nine months ended September 30, 2023, and the obligation to make additional purchases ended as of September 30, 2023. The Company has not received dividends from Nebula as of MarchSeptember 30, 2023.
Since August 2021, the Company has included access to Nebula’s SVOD service as a part of a combined CuriosityStream / Watch Nebula subscription offer and as part of the Company’s Smart Bundle subscription package. As part of this arrangement, the Company has shared revenue with Nebula, based on certain metrics, and paid monthly. On September 26, 2023, Nebula provided the Company with a notice of non-renewal (the “Nebula Non-Renewal”), which will result in the expiration of the revenue share at the end of 2023. Nebula is still required to make its service available to subscribers to either of these offerings through the end of the term of any such subscription that exists as of December 31, 2023.
9
IMPAIRMENT ASSESSMENT
The Company’s carrying values forCompany regularly reviews its Investments in equity method investmentsinvestees for impairment, including when the carrying value of an investment exceeds its related market or fair value. If it has been determined that an investment has sustained an “other-than-temporary” decline in value, the investment is written-down to its fair value. The factors the Company considers in determining an “other-than-temporary” decline has occurred includes, but is not limited to, (i) the determined market value of the investee in relation to its cost basis, (ii) the financial condition and operating performance of the investee, and (iii) the Company’s intent and ability to retain the investment for a sufficient period of time to allow for recovery in the market value of the investment.
As a result of the Company’s impairment analysis, it determined the fair value of its investment in the Spiegel Venture exceeded the carrying value as of March 31,September 30, 2023, and December 31, 2022as such no “other-than-temporary” impairment charge was required.
As a result of the Company’s impairment analysis related to Nebula, it determined that the carrying value of this investment exceeded the fair value as of September 30, 2023. As such, the Company recorded a $2.3 million impairment, which is included in equity method investment loss, for the three months ended September 30, 2023. The primary factor impacting the decrease in fair value of this investment is the expected decrease in Nebula’s revenue share as follows:a result of the Nebula Non-Renewal, as discussed above.
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 | ||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
A reconciliation of the Company’s cash and cash equivalents in the consolidated balance sheets to cash, cash equivalents and restricted cash in the consolidated statements of cash flows is as follows:
| (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,September 30, 2023, agreements.agreements.
and December 31, 2022
, restricted cash includes cash deposits required by a bank as collateral related to corporate credit card 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 | ||||||||||||||||||||||||
10
| 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 | ||||||||
Content assets consisted of the following:
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. | |||||||||||
Of the $6.3 million unamortized cost of the licensed content that hashad been released is expected toas of September 30, 2023, the Company expects that $3.1 million, $1.6 million and $0.9 million will be amortized in each of the next three years, respectively. As of March 31, 2023,
Impairment Assessment
The Company’s business model is generally subscription-based as opposed to a model based on generating revenues at a specific title level. Content assets are predominantly monetized as a group and therefore are reviewed in aggregate at a group level when an event or change in circumstances indicates a change in the expected usefulness of the content or that the fair value may be less than unamortized cost. If such changes are identified, the aggregated content assets will be stated at the lower of unamortized cost or fair value. In addition, unamortized costs are written off for content assets that have been or are expected to be abandoned.
During the three months ended September 30, 2023, due to the continued adverse macro and microeconomic conditions, including the competitive environment and its impact on the Company’s subscriber growth, the Company revised its forecasted subscriber growth and forecasted cash flow assumptions. Additionally, companies in the streaming industry have experienced a decline in market valuations, and reflecting this market trend and the factors above, the market price of the Company’s common shares had declined significantly through September 30, 2023.
11
Given these factors, as well as the Company’s declining market capitalization and operating losses during the quarter, the Company identified an indicator of impairment related to its content asset group and performed an analysis of content assets to assess if the fair value was less than unamortized cost. To determine if an impairment existed, the Company utilized a traditional discounted cash flow approach based on expectations for the monetization of its content assets in the aggregate, including estimates for future cash inflows and outflows. As a result of this impairment analysis of content assets, the Company determined that the unamortized cost exceeded the fair value, and as such, the Company recorded a $19.0 million impairment for the three months ended September 30, 2023.
The discounted cash flow analysis includes cash flow estimates of revenue and costs, as well as a discount rate (a Level 3 fair value measurement). Estimates of future revenue and costs involve measurement uncertainty, and it is therefore possible that further reductions in the carrying value of content assets may be required as a consequence of changes in management’s future revenue estimates. The discount rate utilized in the discount cash flow analysis was based on the weighted average cost of capital of the Company plus a risk premium representing the risk associated with the Company’s content assets. The discount rate may be impacted by adverse changes in the macroeconomic environment and volatility in the debt and equity markets.
Amortization
In accordance with its accounting policy for content assets, the Company amortizedamortizes licensed content costs and produced content costs,, which is included inwithin cost of revenues onin the Company’s
Warrant liabilityWARRANT LIABILITY
Note
unaudited consolidated statements of operations,operations. For the three and nine months ended September 30, 2023, and 2022, content amortization was as follows:
| 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 | ||||
As described in Note 6 - Stockholders’ Equity, the Private Placement Warrants are classified as aTheAs of September 30, 2023, and December 31, 2022, the fair value of the Private Placement Warrants, as determined using Level 3 inputs, was as follows:
non-current
liability and reported at fair value at each reporting period. | (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 | ||||
12
NOTE 5 — Revenue
- REVENUEThe following table sets forth the Company’s revenues disaggregated by type for the three and nine months ended March 31,September 30, 2023, and 2022, as well as the relative percentage of each revenue type to total revenue.revenue:
| 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 | ||||||||||||
REMAINING PERFORMANCE OBLIGATIONS
were
unsatisfied| 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 | ||||||||||||||
These amounts include only fixed consideration or minimum guarantees and do not include amounts related to (i)(a) contracts with an original expected term of one year or less or (ii)(b) licenses of content that are solely based on sales or usage-based royalties.
DEFERRED REVENUES