UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

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

For the quarter ended ~~June 30, 2021~~March 31, 2022

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

For the transition period from to

Commission file number: 001-39139

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 ☒ No ☐

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

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

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

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

As of ~~August 10, 2021,~~May 12, 2022, there were ~~52,594,879~~52,773,884 shares of Common Stock of the registrant issued and outstanding.

CURIOSITYSTREAM INC.

FORM 10-Q FOR THE QUARTER ENDED ~~JUNE 30, 2021~~MARCH 31, 2022

TABLE OF CONTENTS

		Page
Part I. Financial Information
Item 1. Financial Statements		1
Consolidated Balance Sheets		1
Consolidated Statements of Operations		2
Consolidated Statements of Comprehensive Loss		3
Consolidated Statements of ~~Redeemable Convertible Preferred Stock and~~ Stockholder’s Equity (Deficit)		4
Consolidated Statements of Cash Flows		5
Notes to Unaudited Consolidated Financial Statements		6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		2318
Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk		3226
Item 4. Controls and Procedures		3326
Part II. Other Information
~~Part II. Other Information~~
Item 1. Legal Proceedings		3427
Item 1A. Risk Factors		3427
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		3427
Item 3. Defaults Upon Senior Securities		3427
Item 4. Mine Safety Disclosures		3427
Item 5. Other Information		28
34Item 6. Exhibits		28
~~Item 6. Exhibits~~Part III. Signatures		34

~~Part III. Signatures~~		3529

~~PART I - FINANCIAL INFORMATION~~

~~Item 1. Interim Financial Statements.~~

CuriosityStream Inc.

Consolidated Balance Sheets

(in thousands, except par value)

	June 30,				December 31,			March 31,			December 31,
	2021				2020			2022			2021
	(unaudited)							(unaudited)
Assets

Current assets
Cash and cash equivalents	$	7,069			$	11,203		$	22,715		$	15,216
Restricted cash		6,681				6,181			2,181			2,331
Short-term investments		92,487				22,171
Short-term investments in debt securities									60,011			65,833
Accounts receivable		10,811				7,222			13,441			23,493
Other current assets		3,830				4,467			4,190			6,413
Total current assets		120,878				51,244			102,538			113,286

Investments		55,716				2,825
Investments in debt securities									-			15,430
Investments in equity method investees									10,644			9,987
Property and equipment, net		1,298				1,346			1,254			1,342
Content assets, net		49,136				32,926			78,114			72,682
Intangibles, net		1,253				-			1,248			1,369
Goodwill		2,565				-			2,793			2,793
Operating lease right-of-use assets									3,900			-
Other assets		310				254			686			689
Total assets	$	231,156			$	88,595		$	201,177		$	217,578

Liabilities and stockholders’ equity (deficit)

Current liabilities
Current content liabilities	$	6,581			$	2,116
Content liabilities								$	4,012		$	9,684
Accounts payable		5,364				3,577			8,396			3,428
Accrued expenses and other liabilities		4,627				3,313			9,159			12,429
Deferred revenue		21,462				12,678			24,758			22,430
Total current liabilities		38,034				21,684			46,325			47,971

Warrant liability		22,865				20,843			1,801			5,661
Non-current deferred rent liability		1,309		��		1,027
Non-current operating lease liabilities									4,903			-
Other liabilities		165				67			687			2,011

Total liabilities		62,373				43,621			53,716			55,643

Stockholders’ equity (deficit)
Preferred stock, $0.0001 par value – 1,000 shares authorized at June 30, 2021 and December 31, 2020; 0 shares issued and outstanding as of June 30, 2021 and December 31, 2020		-				-
Common stock, $0.0001 par value – 125,000 shares authorized at June 30, 2021 and December 31, 2020; 52,583 shares issued and outstanding at June 30, 2021; 40,289 shares issued and 39,542 shares outstanding as of December 31, 2020		5				4
Preferred stock, $0.0001 par value – 1,000 shares authorized as of March 31, 2022 and December 31, 2021; 0 shares issued and outstanding as of March 31, 2022 and December 31, 2021									-			-
Common stock, $0.0001 par value – 125,000 shares authorized as of March 31, 2022 and December 31, 2021; 52,767 shares issued and outstanding as of March 31, 2022; 52,677 issued and outstanding as of December 31, 2021									5			5
Additional paid-in capital		349,597				197,507			353,985			352,334
Accumulated other comprehensive income (loss)		(1,213	)			10
Accumulated other comprehensive loss									(455	)		(222	)
Accumulated deficit		(179,606	)			(152,547	)		(206,074	)		(190,182	)
Total stockholders’ equity (deficit)		168,783				44,974			147,461			161,935
Total liabilities and stockholders’ equity (deficit)	$	231,156			$	88,595		$	201,177		$	217,578

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

CuriosityStream Inc.

~~CuriosityStream Inc.~~

Consolidated Statements of Operations

(in thousands, except for per share data)

(unaudited)

	For the three months ended June 30,						For the six months ended June 30,						For the three months ended March 31,
	2021			2020			2021			2020			2022			2021

Revenues	$	15,344		$	12,049		$	25,280			19,516		$	17,627		$	9,936

Operating expenses
Cost of revenues		5,722			4,671			9,880			7,337			11,850			4,158
Advertising and marketing		11,520			8,304			23,769			21,009			14,768			12,248
General and administrative		9,153			3,437			17,885			7,621			10,503			8,733
		26,395			16,412			51,534			35,967			37,121			25,139
Operating loss		(11,051	)		(4,363	)		(26,254	)		(16,451	)		(19,494	)		(15,203	)

Other income (expense)
Change in fair value of warrant liability		1,764			-			(2,022	)		-			3,860			(3,786	)
Interest and other income		1,036			86			1,296			418
Interest and other (expense) income														(57	)		260
Equity interests loss														(156	)		-
Loss before income taxes		(8,251	)		(4,277	)		(26,980	)		(16,033	)		(15,847	)		(18,729	)
Provision for income taxes		53			40			79			77			45			26
Net loss	$	(8,304	)	$	(4,317	)	$	(27,059	)	$	(16,110	)	$	(15,892	)	$	(18,755	)

Less preferred dividends and accretion of issuance costs		-			(4,354	)		-			(8,591	)
Net loss attributable to common stockholders	$	(8,304	)	$	(8,671	)	$	(27,059	)	$	(24,701	)

Net loss per share attributable to common stockholders
Net loss per share
Basic	$	(0.16	)	$	(0.66	)	$	(0.54	)	$	(1.88	)	$	(0.30	)	$	(0.39	)
Diluted	$	(0.19	)	$	(0.66	)	$	(0.54	)	$	(1.88	)	$	(0.30	)	$	(0.39	)

Weighted average number of common shares outstanding
Basic		52,567			13,165			50,327			13,165			52,750			48,071
Diluted		52,968			13,165			50,327			13,165			52,750			48,071

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

CuriosityStream Inc.

~~CuriosityStream Inc.~~

Consolidated Statements of Comprehensive Loss

~~(in thousands)~~

~~(unaudited)~~

For the three months ended
June 30, For the six months ended
June 30,
2021 2020 2021 2020

Net loss $ (8,304 ) $ (4,317 ) $ (27,059 ) $ (16,110 )
Other comprehensive loss
Unrealized (loss) gain on available for sale securities (769 ) 320 (1,223 ) (92 )
Total comprehensive loss $ (9,073 ) $ (3,997 ) $ (28,282 ) $ (16,202 )

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

~~CuriosityStream Inc.~~

~~Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholder’s Equity (Deficit)~~

(in thousands)

(unaudited)

Accumulated
Additional Other Comprehensive Total Stockholders’
Common Stock Preferred Stock Paid-in Income Accumulated Equity
Shares Amount Shares Amount Capital (Loss) Deficit (Deficit)
Balance as of March 31, 2021 52,549 $ 5 - $ - $ 347,967 $ (444 ) $ (171,302 ) $ 176,226
Net loss - - - - - - (8,304 ) (8,304 )
Stock-based compensation, net 3 - - - 1,515 - - 1,515
Exercise of Options 31 - - - 115 - - 115
Other comprehensive loss - - - - - (769 ) - (769 )
Balance as of June 30, 2021 52,583 $ 5 - $ - $ 349,597 $ (1,213 ) $ (179,606 ) $ 168,783

Balance at December 31, 2020 40,289 $ 4 - $ - $ 197,507 $ 10 $ (152,547 ) $ 44,974
Net loss - - - - - - (27,059 ) (27,059 )
Stock-based compensation, net 3 - - - 3,838 - - 3,838
Issuance of Common Stock 7,475 1 - - 94,100 - - 94,101
Common Stock issuance costs - - - - (707 ) - - (707 )
Exercise of Options 103 - - - 437 - - 437
Exercise of Warrants 4,733 - - - 54,422 - - 54,422
Cancellation of escrow shares (20 ) - - - - - - -
Other comprehensive loss - - - - - (1,223 ) - (1,223 )
Balance as of June 30, 2021 52,583 $ 5 - $ - $ 349,597 $ (1,213 ) $ (179,606 ) $ 168,783

Redeemable Accumulated
Convertible
Series A Additional Other Comprehensive Total Stockholders’
Preferred Stock Common Stock Preferred Stock Paid-in Income Accumulated Equity
Shares Amount Shares Amount Shares Amount Capital (Loss) Deficit (Deficit)
Balance at March 31, 2020 18,383 $ 159,411 13,165 $ 1 - $ - $ - $ (223 ) $ (107,210 ) $ (107,432 )
Net loss - - - - - - - - (4,317 ) (4,317 )
Stock-based compensation - - - - - - 438 - - 438
Redeemable convertible preferred stock adjustment to redemption value - 4,354 - - - - (438 ) - (3,916 ) (4,354 )
Other comprehensive loss - - - - - - - 320 - 320
Balance at June 30, 2020 18,383 $ 163,765 13,165 $ 1 - $ - $ - $ 97 $ (115,443 ) $ (115,345 )

Balance at December 31, 2019 18,383 $ 155,174 13,165 $ 1 - $ - $ - $ 189 $ (91,506 ) $ (91,316 )
Net loss - - - - - - - - (16,110 ) (16,110 )
Stock-based compensation - - - - - - 764 - - 764
Redeemable convertible preferred stock adjustment to redemption value - 8,591 - - - - (764 ) - (7,827 ) (8,591 )
Other comprehensive loss - - - - - - - (92 ) - (92 )
Balance at June 30, 2020 18,383 $ 163,765 13,165 $ 1 - $ - $ - $ 97 $ (115,443 ) $ (115,345 )

	For the three months ended March 31,
	2022			2021

Net loss	$	(15,892	)	$	(18,755	)
Other comprehensive loss
Unrealized loss on available for sale securities		(233	)		(454	)

Total comprehensive loss	$	(16,125	)	$	(19,209	)

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

CuriosityStream Inc.

~~CuriosityStream Inc.~~

Consolidated Statements of ~~Cash Flows~~Stockholder’s Equity (Deficit)

(in thousands)

(unaudited)

For the six months ended
June 30,
2021 2020
Cash flows from operating activities
Net loss $ (27,059 ) $ (16,110 )
Adjustments to reconcile net loss to net cash used in operating activities
Change in fair value of warrant liability 2,022 -
Additions to content assets (22,199 ) (10,285 )
Change in content liabilities 4,465 (2,056 )
Amortization of content assets 6,989 4,697
Amortization, depreciation and accretion 569 269
Stock-based compensation 3,860 764
Changes in operating assets and liabilities
Accounts receivable (3,526 ) (4,708 )
Other assets 185 434
Accounts payable 1,773 (2,967 )
Accrued expenses and other liabilities 1,091 (509 )
Deferred revenue 8,474 1,955
Net cash used in operating activities (23,356 ) (28,516 )

Cash flows from investing activities
Purchases of property and equipment (175 ) (220 )
Business acquisition (4,000 ) -
Sales of investments 4,882 35,568
Maturities of investments 11,980 8,500
Purchases of investments (141,644 ) (12,227 )
Net cash (used in) provided by investing activities (128,957 ) 31,621

Cash flows from financing activities
Exercise of stock options 409 -
Exercise of warrants 54,898 -
Tax withholding required for equity awards (22 ) -
Proceeds from issuance of Common Stock 94,101 -
Payment of offering costs (707 ) -
Borrowings on line of credit - 1,000
Repayments on line of credit - (1,000 )
Net cash provided by financing activities 148,679 -

Net increase (decrease) in cash, cash equivalents and restricted cash (3,634 ) 3,105
Cash, cash equivalents and restricted cash, beginning of period 17,384 8,819
Cash, cash equivalents and restricted cash, end of period $ 13,750 $ 11,924

Supplemental schedule of non-cash financing activities:
Preferred dividends and accretion of issuance costs $ - $ 8,591

Supplemental disclosure:
Interest payments $ - $ -
Cash paid for taxes $ 30 $ 98


��													Accumulated						Total
	Common Stock					Preferred Stock				Additional Paid-in			Other Comprehensive			Accumulated			Stockholders’ Equity
	Shares			Amount		Shares		Amount		Capital			Income (Loss)			Deficit			(Deficit)
Balance as of December 31, 2020		40,289		$	4		-	$	-	$	197,507		$	10		$	(152,547	)	$	44,974
Net loss		-			-		-		-		-			-			(18,755	)		(18,755	)
Stock-based compensation		-			-		-		-		2,323			-			-			2,323
Issuance of Common Stock		7,475			1		-		-		94,100			-			-			94,101
Common Stock issuance costs		-			-		-		-		(707	)		-			-			(707	)
Exercise of Options		72			-		-		-		322			-			-			322
Exercise of Warrants		4,733			-		-		-		54,422			-			-			54,422
Cancellation of escrow shares		(20	)		-		-		-		-			-			-			-
Other comprehensive loss		-			-		-		-		-			(454	)		-			(454	)
Balance as of March 31, 2021		52,549		$	5		-	$	-	$	347,967		$	(444	)	$	(171,302	)	$	176,226

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

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

CuriosityStream Inc.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	For the three months ended March 31,
	2022			2021
Cash flows from operating activities
Net loss	$	(15,892	)	$	(18,755	)
Adjustments to reconcile net loss to net cash used in operating activities
Change in fair value of warrant liability		(3,860	)		3,786
Additions to content assets		(14,470	)		(9,040	)
Change in content liabilities		(5,672	)		1,388
Amortization of content assets		9,038			2,746
Depreciation and amortization expenses		209			95
Amortization of premiums and accretion of discounts associated with investments in debt securities, net		411			166
Stock-based compensation		1,788			2,323
Equity interests loss		156			-
Other non-cash items		120			-
Changes in operating assets and liabilities
Accounts receivable		10,052			300
Other assets		2,227			(1,221	)
Accounts payable		4,990			2,177
Accrued expenses and other liabilities		(3,677	)		(775	)
Deferred revenue		2,293			4,220
Net cash used in operating activities		(12,287	)		(12,590	)

Cash flows from investing activities
Purchases of property and equipment		(22	)		-
Investment in equity method investees		(813	)		-
Sales of investments in debt securities		2,502			3,011
Maturities of investments in debt securities		19,603			2,980
Purchases of investments in debt securities		(1,497	)		(141,644	)
Net cash provided by (used in) investing activities		19,773			(135,653	)

Cash flows from financing activities
Exercise of stock options		-			293
Exercise of warrants		-			54,898
Payments related to tax withholding		(137	)		-
Proceeds from issuance of Common Stock		-			94,101
Payment of offering costs		-			(413	)
Net cash (used in) provided by financing activities		(137	)		148,879

Net increase in cash, cash equivalents and restricted cash		7,349			636
Cash, cash equivalents and restricted cash, beginning of period		17,547			17,384
Cash, cash equivalents and restricted cash, end of period	$	24,896		$	18,020

Supplemental disclosure:
Cash paid for taxes	$	177		$	2
Cash paid for operating leases	$	131		$	-
Right-of-use assets obtained in exchange for new operating lease liabilities ⁽¹⁾	$	3,965		$	-

⁽¹⁾	Includes adoption of new leasing guidance effective January 1, 2022. See Note 12 for further details.

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

CuriosityStream Inc.
Notes to the Unaudited Consolidated Financial Statements
(in thousands, except share and per share data)

Note 1 — Organization and business

On October 14, 2020 (the “Closing Date”), CuriosityStream Inc., a Delaware corporation (formerly named Software Acquisition Group Inc. (or “SAQN ”), a publicly traded special purpose acquisition company) consummated a merger pursuant to that certain Agreement and PlanThe principal business of Merger (the “Merger Agreement”), dated August 10, 2020, by and among Software Acquisition Group Inc., CS Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Software Acquisition Group Inc. (“Merger Sub”), CuriosityStream Operating Inc., a Delaware corporation (formerly named CuriosityStream Inc.) (“Legacy CuriosityStream”), and Hendricks Factual Media LLC, a Delaware limited liability company (“HFM”).

Pursuant to the terms of the Merger Agreement, a business combination between Software Acquisition Group Inc. and Legacy CuriosityStream was effected through the merger of Merger Sub with and into Legacy CuriosityStream, with Legacy CuriosityStream surviving as the surviving company and a wholly-owned subsidiary of Software Acquisition Group Inc. (the “Merger” and collectively with the other transactions described in the Merger Agreement, the “Business Combination”). On the Closing Date, Software Acquisition Group Inc. changed its name to CuriosityStream Inc. (the “Company” or “CuriosityStream”) ~~and Legacy CuriosityStream changed its name to CuriosityStream Operating Inc., and has subsequently changed its name to Curiosity Inc.~~

~~The principal business of CuriosityStream~~ is to provide customers with access to high quality factual content via a direct subscription video on-demand (SVoD) platform accessible by internet connected devices, or indirectly via distribution partners who deliver CuriosityStream content via the distributor’s platform or system. The 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 three thousand accessible on-demand and ad-free productions and includes shows and series from leading non-fiction producers.

The Company’s content assets are available 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 streaming resolution (e.g., HD or 4K) 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, all major smart TV brands (e.g., LG, Vizio, Samsung, Sony) and gaming consoles. In addition, CuriosityStream has affiliate agreement relationships with, and its content assets are available through, ~~major~~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 program sales deals. The Company also sells selected rights (such as in territories or on platforms that are not currently being exploited by the Company) to content created before production begins.

Note 2 — Basis of presentation and summary of significant accounting policies

Basis of presentation

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, ~~2020.~~2021.

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 and Management’s Discussion and Analysis of Financial Condition, and Results of Operations included in the Annual Report on Form 10-K for the year ended December 31, ~~2020, as amended.~~2021. The results of operations for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, ~~2021.~~2022.

Certain amounts presented in prior periods have been reclassified to conform to the current period presentation.

There have been no material changes in the Company’s significant accounting policies asother than the effects of adopting new accounting guidance related to leases (see below) compared to the significant accounting policies described in the Company’s consolidated financial statements as of and for the year ended December 31, ~~2020.~~2021.

Use of estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Significant areas in which management uses estimates include content asset amortization, the assessment of the recoverability of ~~the~~ content assets, equity method investments, intangible assets and goodwill, the fair value of assets and liabilities for allocation of the purchase price of companies acquired, and the fair value of ~~common stock,~~ share-based awards and liability classified warrants.

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 are typically unsecured and are derived from revenues earned from customers primarily located in the United States.

~~Cash and cash equivalents and restricted cash~~

~~The Company considers all highly liquid short-term investments purchased with an original maturity of three months or less to be cash equivalents.~~

At June 30, 2021, restricted cash represents cash deposits required by a bank as collateral related to the Company’s line of credit of $4,500 and corporate credit card agreements of $500. The Company has also reserved funds of $1,181 related to the Paycheck Protection Program (PPP) loan (see Note 5) in an escrow account until the PPP loan is forgiven. In addition, as part of the acquisition of One Day University (see Note 3), a holdback amount of $500 is reserved for indemnification purposes until one year after the acquisition date.

Fair value 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.

The Company’s assets measured at fair value on a recurring basis include its investments in money market funds and corporate, ~~debt securities~~U.S. government, and ~~government~~municipal debt securities. 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~~private placement warrants issued to Software Acquisition holdings LLC in a private placement that closed concurrently with the Company’s initial public offering (the “Private Placement ~~Warrants.~~Warrants”). The fair value of the Private Placement Warrants is considered a Level 3 valuation and is determined using the Black-Scholes valuation model. Refer to Note 67 for significant assumptions which the Company used in the fair value model for the Private Placement Warrants.

The Company’s remaining financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses and ~~borrowings on the line of credit~~other liabilities are carried at cost, which approximates fair value because of the short-term maturity of these instruments.

~~Investments~~

The Company holds investments in money market funds, government debt securities, and corporate debt securities which the Company classifies as available-for-sale. The investments are therefore carried at fair value based on unadjusted quoted market prices (Level 1) and quoted prices for comparable assets (Level 2), as noted below:

As of June 30, 2021 As of December 31, 2020
Cash and
Cash Short-term Investments Cash and
Cash Short-term Investments
Equivalents Investments (non-current) Total Equivalents Investments (non-current) Total
Level 1 Securities
Money market funds $ 4,097 $ - $ - $ 4,097 $ 2,165 $ - $ - $ 2,165
Government debt securities - 27,722 7,999 35,721 5,999 12,892 - 18,891
Total Level 1 Securities 4,097 27,722 7,999 39,818 8,164 12,892 - 21,056

Level 2 Securities
Corporate debt securities - 61,916 47,717 109,633 - 8,054 2,825 10,879
Municipal debt securities - 2,849 - 2,849 - 1,225 - 1,225
Total Level 2 Securities - 64,765 47,717 112,482 - 9,279 2,825 12,104
Total $ 4,097 $ 92,487 $ 55,716 $ 152,300 $ 8,164 $ 22,171 $ 2,825 $ 33,160

Unrealized gains and losses are recorded in accumulated other comprehensive income or loss, a component of stockholders’ equity (deficit). Realized gains and losses are reclassified from accumulated other comprehensive income or loss into earnings as a component of net income or loss. Realized gains reported in interest and other income in the accompanying consolidated statements of operations were not significant in the three and six months ended June 30, 2021 and 2020. The Company evaluates unrealized losses on investments, if any, to determine if other-than-temporary impairment is required to be recognized. No such other-than-temporary impairments were recognized during the three and six months ended June 30, 2021 and 2020. Investments in debt securities that will mature within one year of the balance sheet dates are reflected as Short-term investments in the accompanying consolidated balance sheets.

~~The following tables summarize the Company’s corporate and government debt securities:~~

As of June 30, 2021
Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value
Debt Securities:
Corporate $ 110,843 $ 1 $ (1,211 ) $ 109,633
U.S. Government 35,723 1 (3 ) 35,721
Municipalities 2,850 - (1 ) 2,849
Total $ 149,416 $ 2 $ (1,215 ) $ 148,203

~~The fair value of the Company’s investments in corporate and government debt securities at June 30, 2021 by contractual maturity is as follows:~~

June 30,
2021
Amortized Cost Estimated Fair Value
Due in one year or less $ 93,160 $ 92,487
Due after one year through five years 56,256 55,716
Due after five years - -
Total $ 149,416 $ 148,203

~~Warrants~~

As described in Note 6, the Private Placement Warrants are classified as a non-current liability and reported at fair value at each reporting period. The fair value of the Private Placement Warrants as of June 30, 2021 and December 31, 2020 was as follows:

As of
June 30,
2021 As of
December 31,
2020
Level 3
Private Placement Warrants $ 22,865 $ 20,843
Total Level 3 $ 22,865 $ 20,843

~~Content assets, net~~

The Company acquires, licenses and produces content, including original programming, in order to offer members unlimited viewing of factual entertainment content. The content licenses are for a fixed fee and specific windows of availability. Payments for content, including additions to content assets and the changes in related liabilities, are classified within “Net cash used in operating activities” on the consolidated statements of cash flows.

The Company recognizes its content assets (licensed and produced) as “Content assets, net” on the consolidated balance sheets. For licenses, the Company capitalizes the fee per title and records a corresponding liability at the gross amount of the liability when the license period begins, the cost of the title is known, and the title is accepted and available for streaming. For productions, the Company capitalizes costs associated with the production, including development costs, direct costs and production overhead.

Based on factors including historical and estimated viewing patterns, the Company generally amortizes the content assets (licensed and produced) in “Cost of revenues” on the 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 with the month of first availability. The Company reviews factors impacting the amortization of content assets on an ongoing basis and will record amortization on an accelerated basis when there is more upfront use of a title, for instance due to significant program sales.

The Company’s business model is generally subscription based as opposed to a model generating revenues at a specific title level. Content assets (licensed and produced) 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 for assets that have been, or are expected to be, abandoned are written off.

~~Revenue recognition~~

The following table sets forth the Company’s revenues disaggregated by type for the three and six months ended June 30, 2021 and 2020, as well as the relative percent of each revenue type to total revenue.

Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020

Subscriptions – O&O Service $ 4,549 30 % $ 3,178 26 % $ 8,671 34 % $ 5,812 30 %
Subscriptions – App Services 1,131 7 % 889 7 % 1,886 7 % 1,706 9 %
Subscriptions – Total 5,680 37 % 4,067 33 % 10,557 41 % 7,518 39 %

License Fees – Affiliates 4,579 30 % 4,225 35 % 9,082 36 % 8,226 42 %
License Fees – Program Sales 5,031 33 % 3,753 32 % 5,517 23 % 3,768 19 %
License Fees – Total 9,610 63 % 7,978 67 % 14,599 59 % 11,994 61 %

Other – Total 54 0 % 4 0 % 124 0 % 4 0 %
Total Revenues $ 15,344 $ 12,049 $ 25,280 $ 19,516

~~Subscriptions — O&O Service~~

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 offers gift certificates for use on a future date. The Company recognizes revenue from gift certificates when the services have been provided. The gift certificates do not expire.~~

~~Subscription — App Services~~

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 (see Note 1). 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.

~~Licensing — Affiliates~~

The Company generates license fee revenues from MVPDs such as Altice, 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.

~~Licensing — Program Sales~~

The Company has distribution agreements which grant a licensee limited distribution rights to the Company’s programs for varying terms, generally in exchange for a fixed license fee. Revenue is recognized once the content is made available for the licensee to use.

The Company’s performance obligations include (1) access to its SVoD platform via 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 obligation 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.

Payment terms for access to the Company’s SVoD services require payment in advance on or prior to the date access to the service is provided. Payments for contracts providing access to the Company’s content assets are paid either in advance, over the license term, or on a sales and usage basis. Payments for licenses of specific program titles are paid either upfront or over the license term on a fixed fee basis, or on a sales and usage basis. To date, there has been no financing component associated with the Company’s revenue arrangements and such arrangements do not contain rights of return provisions.

~~Revenues expected to be recognized in the future related to performance obligations that are unsatisfied at June 30, 2021 are as follows:~~

Rest of
year ending
December 31, For the twelve months ending December 31,
2021 2022 2023 2024 2025 Thereafter Total
Remaining Performance Obligations $ 10,650 $ 8,365 $ 1,271 $ 108 $ 13 $ 98 $ 20,505

These amounts include only fixed consideration or minimum guarantees and do not include amounts related to (i) contracts with an original expected term of one year or less or (ii) licenses of content that are solely based on sales or usage-based royalties.

Contract liabilities (i.e., deferred revenue) consists of subscriber and affiliate license fees billed that have not been recognized, amounts contractually billed or collected for program sales in advance of the related content being made available to the customer, and unredeemed gift certificates and other prepaid subscriptions that have not been redeemed. Total deferred revenues were $21,627 and $12,745 at June 30, 2021 and December 31, 2020, respectively. The increase in deferred revenues is primarily due to the growth in annual subscriptions from O&O and App Services, which require upfront annual payments, as well as an increase in the volume of program sales activity.

~~Revenues of $2,208~~Recently Issued and ~~$7,861 were recognized during the three and six months ended June 30, 2021, related to the balance of deferred revenue at December 31, 2020.~~

~~Warrant liability~~

The Company classifies its Private Placement Warrants as liabilities as the terms of these warrants provide for potential changes to the settlement amounts dependent upon the characteristics of the warrant holder and because the holder of a warrant is not an input into the pricing of a fixed-for-fixed option on equity shares, such provision would preclude the warrant from being classified in equity and thus the warrant should be classified as a liability. The Private Placement Warrants are recorded at fair value on the consolidated balance sheets and changes in the fair value of the Company’s Private Placement Warrants in each period are reported in earnings.Adopted Financial Accounting Standards

~~Goodwill and intangible assets~~

Goodwill represents the excess of the cost of acquisitions over the amount assigned to tangible and identifiable intangible assets acquired less liabilities assumed. At least annually, in the fourth quarter of each fiscal year or more frequently if indicators of impairment exist, management performs a review to determine if the carrying value of goodwill is impaired. The identification and measurement of goodwill impairment involves the estimation of fair value at the Company’s reporting unit level.

The Company performs an initial assessment of qualitative factors to determine whether the existence of events and circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of relevant events and circumstances, the Company determines that it is more likely than not that the fair value of the reporting unit exceeds its carrying value and there is no indication of impairment, no further testing is performed; however, if the Company concludes otherwise, an impairment test must be performed by estimating the fair value of the reporting unit and comparing it with its carrying value, including goodwill.

Intangible assets other than goodwill are carried at cost and amortized over their estimated useful lives. The Company reviews identifiable finite-lived intangible assets to be held and used for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Determination of recoverability is based on the lowest level of identifiable estimated undiscounted cash flows resulting from use of the asset and its ultimate disposition. Measurement of any impairment loss is based on the amount by which the carrying value of the asset exceeds its fair value.

~~Recently issued financial accounting standards~~

As an emerging growth company (“EGC”), the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act until such time as the Company is no longer considered to be an EGC.

In February 2016, the ~~FASB~~Financial Accounting Standards Board (FASB) issued ~~ASU~~Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842), which ~~requires lessees to recognize~~supersedes the historical lease guidance under Accounting Standards Codification (ASC) 840. Topic 842 increases transparency and comparability among organizations by requiring the recognition of lease assets and lease liabilities on the balance sheet and disclosure of key information about leasing arrangements for ~~those leases classified as operating leases under current U.S. GAAP. ASU 2016-02 requires that a lessee should recognize a liability to make lease payments (the lease liability)~~both lessees and ~~a right-of-use asset representing its right~~lessors. The Company adopted the new standard effective January 1, 2022, using the modified retrospective method and electing to use the ~~underlying asset~~package of practical expedients permitted under the transition guidance, which allows for the carry forward of historical lease ~~term~~classification for existing leases on the adoption date and does not require the assessment of existing lease contracts to determine whether the contracts contain a lease or initial direct costs. Prior periods were not retrospectively adjusted.

The adoption of this standard resulted in the recognition of operating lease liabilities of $5.3 million with corresponding right-of-use (ROU) assets in the amount of $4.0 million, net of existing deferred rent and lease incentives of $1.3 million. The Company did not have any finance lease liabilities as of the adoption date. There was no cumulative effect adjustment to the opening balance ~~sheet. The~~of accumulated deficit as of January 1, 2022. Adoption of this new guidance ~~also requires qualitative and quantitative disclosures related~~did not have an impact on the unaudited consolidated statements of operations or cash flows. Refer to ~~the nature, timing and uncertainty of cash flows arising from leases. The guidance is effective~~Note 12 for ~~the Company’s fiscal year beginning January 1, 2022, with early adoption permitted, and is required to be implemented using a modified retrospective approach. The Company is currently assessing~~further information regarding the impact of adoption of Topic 842 on the ~~new standard on its~~Company’s unaudited consolidated financial statements, but anticipates a material increase in assets and liabilities due to the recognition of the required right-of-use asset and corresponding lease liability for all lease obligations that are currently classified as operating leases, such as real estate leases for corporate headquarters, as well as additional disclosure on all its lease obligations. The income statement recognition of lease expense is not expected to significantly change from the current methodology.statements.

Accounting Standards Effective in Future Periods

In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326), which requires that an entity measure and recognize expected credit losses for financial assets held at amortized cost and replaces the incurred loss impairment methodology in current U.S. GAAP with a methodology that requires consideration of a broader range of information to estimate credit losses. The guidance also modifies the impairment model for available-for-sale debt securities. ASU 2016-13 is effective for the Company’s fiscal year beginning January 1, 2023. The Company ~~is continuing to assess~~does not expect the ~~potential impacts~~implementation of ASU 2016-13 to have a material impact on its consolidated financial statements.

Note 3 – ~~Business Combinations~~Equity Investments

~~Acquisition~~Spiegel TV Geschichte und Wissen GmbH & Co. KG (the “Spiegel Venture”)

In July 2021, the Company acquired 32% ownership in the Spiegel Venture for $3.3 million. The Spiegel Venture, which prior to the Company’s equity purchase, was jointly owned and operated by Spiegel TV and Autentic, operates two documentary channels, together with various SVoD services, which provide factual content to pay television audiences in Germany. The Company has not received any dividends from the Spiegel Venture as of ~~One Day University~~March 31, 2022.

Watch Nebula LLC (“Nebula”)

On ~~May 11,~~August 23, 2021, the Company ~~consummated the acquisition~~purchased a 12% ownership interest in Watch Nebula LLC for $6.0 million. Nebula is an SVoD technology platform built for and by a group of ~~100%~~content creators. The Company is committed to purchasing an additional 13% ownership interest through eight quarterly payments of ~~One Day University (ODU) pursuant to that certain Asset Purchase Agreement, (APA) dated May 11, 2021 (“the Acquisition Date”), by and among ODU and~~$0.8 million, which after each payment, the Company ~~for~~will obtain an additional 1.625% of equity ownership interests. Prior to the ~~aggregate consideration~~Company’s investment, Nebula was a 100% wholly owned subsidiary of ~~$4,500~~Standard Broadcast LLC (“~~the Acquisition”~~Standard”). ~~ODU provides access to talks and lectures from professors at colleges and universities in the United States.~~

~~At closing~~The Company obtained 25% of the ~~Acquisition,~~representation on Nebula’s Board of Directors, providing the Company ~~paid $4,000 of cash consideration~~ with ~~the remaining $500 to be held by the~~significant influence, but not a controlling interest. The Company as a holdback for indemnification purposes. The holdback of $500 will be released twelve months after the Acquisition Date and is recorded in restricted cash and in accrued expenses and other liabilitieshas not received dividends from Nebula as of ~~June 30, 2021 on the unaudited consolidated balance sheets.~~

The acquisition was accounted for as a purchase, with the results of operations, which were not material, of ODU included in the Company's consolidated results from May 11, 2021. Based on a preliminary purchase price allocation, the purchase consideration was allocated to assets acquired and liabilities assumed based on their fair values as of the Acquisition Date as follows:

Accounts receivable $ 35
Property and equipment 11
Content and intangibles 2,300
Goodwill 2,565
Accounts payable (3 )
Deferred revenue (408 )
$ 4,500

The preliminary allocation of the estimated purchase price is based upon management's estimates and is subject to revision, as a more detailed analysis of intangible assets, certain tangible assets, and other assets and liabilities is completed and additional information on the fair value of assets and liabilities becomes available, including receipt of final appraisals of the net assets acquired. A change in the fair value of the net assets may change the amount of the purchase price allocable to goodwill and could impact the amounts of amortization expense. The Company used discounted cash flows analyses, which represent Level 3 fair value measurements, to assess certain components of its purchase price allocation, including acquired intangible assets.

The acquisition of goodwill arises from the opportunity for synergies of the combined companies to grow and strengthen the Company's content proposition by adding lectures from top professors and expanding the customer base. The acquisition expands the Company's subscription video on demand services by adding monthly and annual subscribers. The goodwill is not amortized for financial reporting purposes, but is deductible for federal tax purposes.

The Company incurred approximately $21 in Acquisition-related expenses, which are reported in general and administrative expenses of the consolidated statement of operations for the three and six months ended June 30, 2021.

The amounts allocated to content and intangibles has been attributed to the following categories and will be amortized over the useful lives of each individual asset identified on a straight-line basis as follows:

Fair value Estimated
useful life
(Years)

Content $ 1,000 4.2

Customer relationships 700 3.0
Trademark 500 6.5
Covenant-not-to-compete 100 3.0
Total intangibles 1,300

Total content and intangibles $ 2,300

Content relates to the lectures available on the ODU library as well as premium programs available for purchase on the ODU platform. The cost approach was used to estimate the value of the content library as of the valuation date. The economic life was determined based on the lecturer’s license period of 5 years starting on the date the titles were published. ODU content is recorded as part of Content assets, net on the unaudited consolidated balance sheets.March 31, 2022.

~~Customer relationships represent the fair value~~The Company’s carrying values for its equity method investments as of the future projected revenue that will be derived from the sales of lectures to existing customers of ODU. Customer relationships were valued using the discounted cash flow method under the income approach. The underlying cash flows are based on historical attrition rates. The economic life was determined based on the period in which the Company expects to receive most of the cash flows from the existing customers.March 31, 2022 and December 31, 2021 is as follows:

	Spiegel Venture			Nebula			Total
	(in thousands)

Balance, December 31, 2021	$	3,089		$	6,898		$	9,987
Investments in equity method investees ⁽¹⁾		-			813			813
Equity interests loss		(133	)		(23	)		(156	)
Balance, March 31, 2022	$	2,956		$	7,688		$	10,644

⁽¹⁾

Nebula’s investment in equity method investees balance includes an accrual of $0.8 million also reported in Accrued expenses and other liabilities as of March 31, 2022.

Note 4 —Balance sheet components

The trademark intangible relates to the “One Day University” trade name. The fair value was determined using the relief-from-royalty method under the income approach. This valuation method estimates the fair value of an asset calculating the revenues attributable to the trademark for the use of the asset, multiplied by a royalty rate. The economic life was determined based on the remaining expected period of use of the trademark.Cash, cash equivalents and restricted cash

~~Covenant-not-to-compete relates to an agreement between the Company and ODU’s management not to work for a competitor~~A reconciliation of the ~~Company~~Company’s cash and ~~limits ODU management’s ability~~cash equivalents in the consolidated balance sheets to ~~compete with~~cash, cash equivalents and restricted cash in the ~~Company. The valuation method used~~consolidated statements of cash flows as of March 31, 2022 and December 31, 2021 is as follows:

	March 31,		December 31,
	2022		2021
	(in thousands)

Cash and cash equivalents	$	22,715	$	15,216
Restricted cash		2,181		2,331
Cash, cash equivalents and restricted cash	$	24,896	$	17,547

At March 31, 2022, restricted cash includes funds reserved of $1.2 million related to ~~estimate~~ the ~~fair value was~~Paycheck Protection Program (PPP) loan (see Note 6) which are being held in an escrow account until the ~~income approach. The economic life was determined based on~~PPP loan is forgiven, the ~~remaining contractual life~~One Day University holdback of ~~the covenant-not-to-compete agreement.~~$0.5 million and cash deposits required by a bank as collateral related to corporate credit card agreements of $0.5 million.

~~Intangible~~Investments in debt securities

The Company’s investments in debt securities at fair value based on unadjusted quoted market prices (Level 1) and quoted prices for comparable assets ~~as of June 30, 2021~~(Level 2) are:

	As of March 31, 2022								As of December 31, 2021
	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	$	20,374	$	-	$	-	$	20,374	$	11,709	$	-	$	-	$	11,709
U.S. Government debt securities		-		12,461		-		12,461		-		13,582		-		13,582
Total Level 1 Securities		20,374		12,461		-		32,835		11,709		13,582		-		25,291

Level 2 Securities
Corporate debt securities		-		46,950		-		46,950		-		50,641		15,430		66,071
Municipal debt securities		-		600		-		600		-		1,610		-		1,610
Total Level 2 Securities		-		47,550		-		47,550		-		52,251		15,430		67,681
Total	$	20,374	$	60,011	$	-	$	80,385	$	11,709	$	65,833	$	15,430	$	92,972

The following tables summarize the Company’s corporate, U.S. government, and municipal debt securities:

	As of March 31, 2022
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(in thousands)

Debt Securities:
Corporate	$	47,368	$	-	$	(418	)	$	46,950
U.S. Government		12,498		-		(37	)		12,461
Municipalities		600		-		-			600

Total	$	60,466	$	-	$	(455	)	$	60,011

	As of December 31, 2021
	Amortized Cost		Gross Unrealized Gains			Gross Unrealized Losses				Estimated Fair Value
	(in thousands)
Debt Securities:
Corporate	$	66,281	$	-	$		(210	)	$		66,071
U.S. Government		13,594		-			(12	)			13,582
Municipalities		1,610		-			-				1,610

Total	$	81,485	$	-		$	(222	)		$	81,263

There were ~~comprised~~no material realized gains or losses recorded during the three months ended March 31, 2022 or 2021.

Content assets

Content assets consisted of the following:

As of June 30, 2021
Remaining Amortization
Period (in years) Gross
Carrying
Amount Accumulated
Amortization Net
Carrying
Amount

Trademark 6.4 $ 500 $ 11 $ 489
Covenant-not-to-compete 2.9 100 5 95
Customer relationships 2.9 700 31 669
Intangible assets, net $ 1,300 $ 47 $ 1,253

~~Reverse merger acquisition~~

On October 14, 2020, the Company consummated the Merger, pursuant to the terms of the Merger Agreement dated August 10, 2020, with Legacy CuriosityStream surviving the merger as a wholly owned subsidiary of the Company.

At the effective time of the Merger (the “Effective Time”), all (100%) of the issued and outstanding shares of capital stock of Legacy CuriosityStream were converted into an aggregate of 31,556,837 shares (the “Merger Shares”) of Common Stock. Pursuant to the Merger Agreement, 1,501,758 Merger Shares issued by the Company at closing would be held in escrow for a period of twelve months after the Closing Date to satisfy indemnification obligations and an additional 19,924 Merger Shares would be held in escrow pending final working capital calculations (collectively, the “Escrow Shares”). On February 22, 2021, the 19,924 Merger Shares held in escrow pending final working capital calculations were released and cancelled from escrow.

In connection with the Closing, and pursuant to the terms of a PIPE Subscription Agreement entered into by the Company with certain third-party investors (the “PIPE Investors”) in connection with the execution of the Merger Agreement, the Company completed the issuance of an aggregate of 2,500,000 newly-issued shares of Common Stock for an aggregate purchase price of $25.0 million (the “PIPE”). The shares of Common Stock issued by the Company pursuant to the PIPE were issued concurrently with the Closing of the Merger on the Closing Date.

The Company received $16.5 million in cash from the SAQN trust account and $25.0 million from the PIPE investors related to the issuance of 2,500,000 shares of Common Stock. The Company paid a total of $5.7 million of transaction costs related to the Business Combination.

~~Note 4 — Content assets~~

~~Content assets consisted of the following:~~

					As of
					March 31,		December 31,
	As of				2022		2021
	June 30, 2021		December 31, 2020		(in thousands)
Licensed content, net
Released, less amortization		10,108		9,985	$	11,961	$	11,406
Prepaid and unreleased		4,783		3,022		7,144		9,119
		14,891		13,007		19,105		20,525
Produced content, net
Released, less amortization		13,137		9,071		23,940		18,507
In production		21,095		10,848		35,069		33,650
In development and pre-production		13		-
		34,245		19,919		59,009		52,157
Total	$	49,136	$	32,926	$	78,114	$	72,682

As of ~~June 30, 2021, $4,903, $2,961,~~March 31, 2022, $5.4 million, $3.2 million, and ~~$1,148~~$1.5 million of the ~~$10,108~~$12.0 million unamortized cost of the licensed content that has been released is expected to be amortized in each of the next three years. As of ~~June 30, 2021, $3,274, $3,274,~~March 31, 2022, $6.3 million, $6.1 million, and ~~$3,169~~$5.4 million of the ~~$13,137~~$23.9 million unamortized cost of the produced content that has been released is expected to be amortized in each of the next three years.

In accordance with its accounting policy for content assets, the Company amortized licensed content costs and produced content costs during the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively, as follows:

									Three Months Ended March 31,
	Three Months Ended June 30,				Six Months Ended June 30,				2022		2021
	2021		2020		2021		2020		(in thousands)

Licensed content	$	1,595	$	2,050	$	3,278	$	3,352	$	2,999	$	1,683
Produced content		2,658		1,114		3,711		1,345		6,039		1,063
	$	4,253	$	3,164	$	6,989	$	4,697
Total									$	9,038	$	2,746

Warrant liability

As described in Note 7, the Private Placement Warrants are classified as a non-current liability and reported at fair value at each reporting period. The fair value of the Private Placement Warrants as of March 31, 2022 and December 31, 2021, was as follows:

	As of March 31, 2022		As of December 31, 2021
	(in thousands)
Level 3
Private Placement Warrants	$	1,801	$	5,661
Total Level 3	$	1,801	$	5,661

Note 5 — Revenue

The following table sets forth the Company’s revenues disaggregated by type for the three months ended March 31, 2022 and March 31, 2021, as well as the relative percentage of each revenue type to total revenue.

	Three Months Ended March 31,
	2022				2021
	(in thousands)

Subscriptions – O&O Service	$	7,307	41	%	$	3,966	40	%
Subscriptions – App Services		1,048	6	%		911	9	%
Subscriptions – Total		8,355	47	%		4,877	49	%

License Fees – Affiliates		4,910	28	%		4,503	45	%
License Fees – Program Sales		4,248	24	%		486	5	%
License Fees – Total		9,158	52	%		4,989	50	%

Other – Total ⁽¹⁾		114	1	%		70	1	%

Total Revenues	$	17,627			$	9,936

(1)	Other revenue includes revenues primarily related to other marketing services.

Revenues expected to be recognized in the future related to performance obligations that are unsatisfied at March 31, 2022 are as follows:

	Remainder of year ending December 31,		For the years ending December 31,
	2022		2023		2024		2025		2026		Thereafter		Total
	(in thousands)
Remaining Performance Obligations	$	14,671	$	7,602	$	4,967	$	3,260	$	20	$	140	$	30,660

Contract liabilities (i.e., deferred revenue) consists of subscriber and affiliate license fees billed that have not been recognized, amounts contractually billed or collected for program sales in advance of the related content being made available to the customer, and unredeemed gift certificates and other prepaid subscriptions that have not been redeemed. Total deferred revenues were $25.4 million and $23.2 million at March 31, 2022 and December 31, 2021, respectively. The increase in deferred revenues is primarily due to the growth in annual subscriptions from O&O and App Services, which require upfront annual payments, as well as an increase in the volume of program sales activity.

Revenues of $9.9 million were recognized during the three months ended March 31, 2022, related to the balance of deferred revenue at December 31, 2021.

Note ~~5 — Line of credit and Paycheck~~6 —Paycheck Protection Program Loan

On February 12, 2020, the Company obtained a one-year $4,500 line of credit facility from a bank. The line of credit calls for interest-only monthly payments at a rate equal to the LIBOR Daily Floating Rate plus 2.25%. The loan carries an unused fee of 0.25% annually on all committed but unused capital, payable quarterly in arrears. The entire unpaid principal balance was scheduled to be due upon the original loan maturity date of February 28, 2021. The line of credit facility is collateralized by cash of $4,500. At June 30, 2021 and December 31, 2020, there were no balances drawn and owed under the facility. During February 2021, the loan maturity date was extended to February 28, 2022.

On May 1, 2020, the Company applied for and received funding from the Paycheck Protection Program (“PPP”) in the amount of ~~$1,158~~$1.2 million under the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) (the “PPP Loan”). The PPP Loan ~~matures~~was set to mature in May 2022 and ~~bears~~bore interest at a rate of 1.0% per annum. ~~Monthly amortized principal and interest payments are deferred for six months after the date of disbursement.~~ The PPP provides that the use of the PPP Loan amount shall be limited to certain qualifying expenses and may be partially or wholly forgiven in accordance with the requirements set forth in the CARES Act. The amount of loan proceeds eligible for forgiveness takes into account a number of factors, including the amount of loan proceeds used by the Company during the specified period after the loan origination for certain purposes including payroll costs, rent payments on certain leases, and certain qualified utility payments.

The Company elected to recognize earnings as funds are applied to covered expenses and classify the application of funds as a reduction of the related expense in the unaudited consolidated statement of operations. ~~During~~On April 16, 2022, the ~~six months ended June 30, 2020, $990 of loan proceeds were applied to cover payroll and non-payroll expenses per~~Company received the ~~PPP. As a result, general and administrative expenses during the period from May 1 to June 30, 2020 within the statement of operations were reduced by this amount. Should the Company’s~~ loan forgiveness ~~application be rejected,~~letter from the ~~Company may be required to repay all, or a portion of~~Small Business Administration (SBA) stating that the ~~funds received under the PPP under an amortization schedule through May 2025 with an annual interest rate of 1%. The Company believes it~~loan has ~~met all the requirements under the PPP, and anticipates that it will not be required to repay any portion of the grant.~~been forgiven in full including applicable interest.

Note 67 — ~~Redeemable convertible preferred stock and stockholders’~~Stockholders’ equity

Common Stock

~~In connection with the Business Combination, the Company amended and restated its certificate of incorporation.~~ As of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the Company has authorized the issuance of 126,000,000 shares of capital stock, par value of $0.0001 per share, consisting of (a) 125,000,000 shares of common stock, and (b) 1,000,000 shares of preferred stock.

On February 8, 2021, the Company consummated an underwritten public offering (the “Offering”) of 6,500,000 shares of the Company’s common stock, par value per share $0.0001 (“Common Stock”), plus an over-allotment option to purchase up to 975,000 additional shares of Common Stock granted to the underwriters who participated in the Offering, which was exercised by the underwriters in full on February 5, 2021. The net proceeds from the Offering were $94,100, after deducting $6,811 in underwriting discounts and commissions. The Company also incurred and paid offering expenses in connection with the Offering of $707 during the six months ended June 30, 2021.Warrants

~~Warrants~~

As of ~~June 30, 2021,~~March 31, 2022, the Company had 3,054,203 ~~Public Warrants (including 353,000~~publicly traded warrants that were sold as part of the units of Software Acquisition Group Inc. in its initial public offering on November 22, 2019 and that were issued to the PIPE Investors in connection with ~~the PIPE)~~our business combination that closed on October 14, 2020 (the “Public Warrants”) and 3,676,000 Private Placement Warrants outstanding. Private Placement Warrants are liability-classified, and the Public Warrants ~~and PIPE Warrants~~ are equity-classified.

~~Following the consummation of the Business Combination, holders of the Public Warrants, Private Placement Warrants, and PIPE Warrants are entitled to acquire common stock of the Company.~~ Each whole warrant entitles the registered holder to purchase one share of the Company’s common stock at an exercise price of $11.50 per ~~share, beginning 30 days after the Closing Date.~~share. All Warrants will expire ~~five years after the completion of the Business Combination.~~October 14, 2025.

~~Once the Public Warrants and PIPE Warrants became exercisable, the~~The Company has the right to redeem the outstanding ~~warrants~~Public Warrants in whole and not in part at a price of $0.01 per warrant upon a minimum of 30 days’ prior written notice of redemption, if and only if the last sale price of the Company’s common stock matched or exceeded $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sent the notice of redemption to the warrant holders.

The Private Placement Warrants are identical to the Public Warrants except that, so long as they are held by ~~the Sponsor~~Software Acquisition Group LLC or its permitted transferees: (i) they will not be redeemable by the Company; (ii) they may be exercised by the holders on a cashless basis; and (iii) they are subject to registration rights.

Warrant Type
Cash Exercise
Price per Share

Warrants
Outstanding
12/31/20

Warrants
Exercised
during the six months ended
06/30/21

Warrants
Outstanding
06/30/21

Public Warrants (CURIW) and PIPE Warrants $ 11.50 7,786,589 (4,732,386 ) 3,054,203
Private Placement $ 11.50 3,676,000 - 3,676,000
Total 11,462,589 (4,732,386 ) 6,730,203

The Company received total proceeds of $54,898 related to the exercise of Public Warrants of which $54,422 relate to warrants exercised during the six months ended June 30, 2021 and $476 relate to warrants exercised in December 2020. There were no exercises of warrants ~~exercised~~ during the three months ended ~~June 30, 2021.~~March 31, 2022.

The warrant liability related to the Private Placement Warrants is recorded at fair value as of each reporting date with the change in fair value reported within other income (expense) in the accompanying unaudited consolidated statements of operations as “Change in fair value of warrant liability” until the warrants are exercised, expired or other facts and circumstances lead the warrant liability to be reclassified to stockholder’s equity (deficit). The fair value of the warrant liability for the Private Placement Warrants was estimated using a Black-Scholes pricing model using Level 3 inputs. The significant assumptions used in preparing the Black-Scholes option pricing model are as follows:

	As of June 30, 2021			As of December 31, 2020			As of March 31, 2022			As of December 31, 2021
Exercise Price	$	11.50		$	11.50		$	11.50		$	11.50
Stock Price (CURI)	$	13.64		$	13.95		$	2.90		$	5.93
Expected volatility		50.00	%		39.63	%		67.00	%		58.00	%
Expected warrant term (years)		4.29			4.78			3.5			3.8
Risk-free interest rate		0.67	%		0.36	%		2.44	%		1.12	%
Dividend yield		0	%		0	%		0	%		0	%
Fair Value per Private Placement Warrant	$	6.22		$	5.67		$	0.49		$	1.54

The change in fair value of the private placement warrant liability for ~~the~~ three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and March 31, 2021 resulted in a gain of ~~$1,764~~$3.9 million and a loss of ~~$2,022,~~$3.8 million, respectively.

During November and December 2018, in connection with a private placement equity offering, Legacy CuriosityStream issued 14,557,000 shares of Series A Redeemable Convertible Preferred Stock (“Series A Preferred Stock”) in exchange for gross proceeds of $145,570. Legacy CuriosityStream incurred equity issuance costs of $8,027 in connection with this offering, which were reflected as a reduction to the initial carrying value of the Series A Preferred Stock balance.

Holders of Series A Preferred Stock were entitled to dividends equal to 10% of the Accrued Value (defined as the original liquidation preference of $10.00 per share of Series A Preferred Stock plus an additional amount equal to the dollar amount of any accrued but unpaid dividends) per annum. Such dividends were cumulative and accrued daily in arrears. Cash dividends were payable when, as and if declared by the Board of Directors. If the Board of Directors did not declare a cash dividend in respect of all or a portion of the dividend when due, the Accrued Value of the Series A Preferred Stock was increased by a corresponding amount.

The Company classifies preferred shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control, as temporary equity. Given the redemption rights contained within the Series A Preferred Stock, the Company accounted for the outstanding preferred stock as temporary equity through the Closing Date. Series A Preferred Stock was initially recorded at its fair value, net of transaction costs, at the original issuance date. At each reporting period prior to the Closing Date, the amount was adjusted by accreting changes in the redemption value over the period from the date of issuance to the earliest redemption date.

Note 78 — Earnings (loss) per share

Basic and diluted earnings (loss) per share calculations are calculated on the basis of the weighted average number of shares of the Company’s common stock outstanding during the respective periods. Diluted earnings (loss) per share give effect to all dilutive potential common shares outstanding during the period using the treasury stock method for stock options and other potentially dilutive ~~securities and the if-converted method for redeemable convertible preferred stock prior to the Business Combination.~~securities. In computing diluted earnings (loss) per share, the average fair value of the Company’s common stock for the period is used to determine the number of shares assumed to be purchased from the exercise price of the options. Purchases of treasury stock reduce the outstanding shares commencing on the date that the stock is purchased. Common stock equivalents are excluded from the calculation when a loss is incurred as their effect would be anti-dilutive.

	Three months ended March 31,
	2021			2020
	(in thousands, except per share data)

Numerator - Basic and Diluted EPS:
Net loss	$	(15,892	)	$	(18,755	)

Denominator - Basic and Diluted EPS:
Weighted–average shares		52,750			48,071

Net loss per share- Basic and Diluted	$	(0.30	)	$	(0.39	)

Three months ended
June 30, Six months ended
June 30,
2021 2020 2021 2020

Numerator - Basic EPS:
Net loss $ (8,304 ) $ (4,317 ) $ (27,059 ) $ (16,110 )
Preferred dividends and accretion of issuance costs - (4,354 ) - (8,591 )
Net loss attributable to common stockholders - basic (8,304 ) (8,671 ) (27,059 ) (24,701 )

Denominator - Basic EPS:
Weighted–average shares – basic 52,566,608 13,164,675 50,327,141 13,164,675

Net loss per share attributable to common stockholders – basic $ (0.16 ) $ (0.66 ) $ (0.54 ) $ (1.88 )

Numerator - Diluted EPS:
Net loss $ (8,304 ) $ (4,317 ) $ (27,059 ) $ (16,110 )
Preferred dividends and accretion of issuance costs - (4,354 ) - (8,591 )
Decrease in fair value of Private Placement Warrants (1,784 ) - - -
Net loss attributable to common stockholders - diluted (10,088 ) (8,671 ) (27,059 ) (24,701 )

Denominator - Diluted EPS:
Weighted–average shares – basic 52,566,608 13,164,675 50,327,141 13,164,675
Incremental common shares from assumed exercise of Private Placement Warrants 401,846 - - -
Weighted–average shares – diluted 52,968,454 13,164,675 50,327,141 13,164,675

Net loss per share attributable to common stockholders – diluted $ (0.19 ) $ (0.66 ) $ (0.54 ) $ (1.88 )

For the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and March 31, 2021, ~~and 2020,~~ the following share equivalents were excluded from the computation of diluted net loss per share as the inclusion of such shares would be anti-dilutive due to the net loss incurred during each period and for the Private Placement Warrants, due to the change in fair value of warrant liability resulting in an increase to net loss for the six months ended June 30, 2021.anti-dilutive. Common shares issuable for warrants, options, and restricted stock units represent the total amount of outstanding warrants, stock options, and restricted stock units at ~~June 30, 2021~~March 31, 2022 and ~~2020.~~March 31, 2021.

Antidilutive shares excluded:	March 31,
	2022		2021
	(in thousands)
Options		5,293		4,836
Restricted Stock Units		1,020		684
Warrants		6,730		6,730
		13,043		12,250

Three months ended
June 30, Six months ended
June 30,
2021 2020 2021 2020
Antidilutive shares excluded:
Options 4,737,222 2,566,312 4,737,222 2,566,312
Restricted Stock Units 772,284 - 772,284 -
Warrants 3,054,203 - 6,730,203 -
Series A Preferred Stock - 18,382,847 - 18,382,847
8,563,709 20,949,159 12,239,709 20,949,159

Note 89 — Stock-based compensation

The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. The fair value is recognized in earnings over the period during which an employee is required to provide the service. The Company accounts for forfeitures as they occur.

CuriosityStream 2020 Omnibus Plan

In October 2020, the Board of Directors of the Company adopted the CuriosityStream 2020 Omnibus Plan (the “2020 Plan”). ~~The 2020 Plan became effective upon consummation of the Business Combination and succeeds the Legacy CuriosityStream Stock Option Plan.~~ Upon adoption of the 2020 Plan, a total of 7,725,000 shares were approved to be issued as stock options, share appreciation rights, restricted stock units and restricted stock.

The following table summarizes stock option and restricted stock unit (RSU) activity, prices, and values for the ~~six~~three months ended ~~June 30, 2021:~~ March 31, 2022:

				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, 2021		1,821			4,747		$	7.61		850		$	11.41
Granted		(809	)		549			3.88		260			4.85
Options exercised and RSUs vested		27			-			-		(73	)		13.87
Forfeited or expired		21			(3	)		4.15		(17	)		12.40

Balance at March 31, 2022		1,060			5,293		$	7.23		1,020		$	9.54

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
Outstanding at December 31, 2020 2,538,648 4,710,717 $ 7.06 413,277 $ 9.21
Granted ⁽¹⁾ (584,024 ) 207,398 15.96 376,626 14.74
Options exercised and RSUs vested - (103,572 ) 4.06 (7,726 ) 13.79
Forfeited or expired 87,214 (77,321 ) 4.13 (9,893 ) 11.56
Outstanding at June 30, 2021 2,041,838 4,737,222 $ 7.50 772,284 $ 11.83

~~(1)~~

Included in options granted during the six months ended June 30, 2021, is a total of 152,358 fully vested options with an exercise price of $16.42 and a five-year contractual term, which resulted in compensation expense totaling $0.9 million being recorded upon grant. Such options were granted during the three months ended March 31, 2021.

There were no options exercised during the three months ended March 31, 2022. The intrinsic value of options exercised during the three ~~and six~~ months ended ~~June 30,~~March 31, 2021 was ~~$315 and $1,266, respectively. There were no options exercised during the six months ended June 30, 2020.~~$1.0 million.

Options and RSUs ~~historically~~generally have a four-year vesting period with 25% of the shares vesting on each anniversary date. ~~Grants during the six months ended June 30, 2021 generally have a four-year vesting period with options vesting quarterly or monthly and RSUs vesting monthly.~~ When options are exercised, the Company’s policy is to issue previously unissued shares of Common Stock to satisfy share option exercises.

RSUs generally have a four-year or a quarterly vesting period with 1/48^th of the shares vesting monthly or 6.25% of the shares vesting quarterly. Upon vesting and distribution, the Company’s policy is to issue previously unissued shares of Common Stock to satisfy restricted stock units vested, net of shares withheld for taxes if elected by the RSU holder.

The fair value of stock option awards is estimated using the Black-Scholes option pricing model, which includes ~~several~~a number of assumptions including Company’s estimates of stock price volatility, employee stock option exercise behaviors, future dividend payments, and risk-free interest rates.

The expected term of options granted is the estimated period of time from the beginning of the vesting period to the date of expected exercise or other settlement, based on historical exercises and post-vesting terminations. The Company generally estimates expected term based on the midpoint between the vesting date and the end of the contractual term, also known as the simplified method, given the lack of historical exercise behavior.

The Company uses its own historical volatility as well as the historical volatility of similar public companies for estimating volatility. The risk-free interest rate is estimated using the rate of return on U.S. Treasury securities with maturities that approximate to the expected term of the option. The Company does not currently anticipate declaring any dividends.

Assumptions used to value the options granted and the resulting weighted-average grant date fair value and stock-based compensation expense for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and March 31, 2021 ~~and 2020~~ were as follows:

	Three months ended June 30,					Six months ended June 30,						March 31,
	2021		2020			2021			2020			2022			2021

Dividend yield		N/A		0	%		0	%		0	%		0	%		0	%
Expected volatility		N/A		60	%		60	%		60	%		60% - 65	%		60	%
Expected term (years)		N/A		6.25			2.50-6.25			6.25			6.00 - 6.50			2.50 - 6.25
Risk-free interest rate		N/A		1.48	%		0.14%-1.11	%		0.45%-1.72	%		1.40% - 2.44	%		0.14% - 1.11%
Weighted average grant date fair value		N/A	$	2.38		$	6.61		$	2.06		$	2.30		$	6.61
Stock-based compensation – Options	$	910	$	438		$	2,729		$	764

													(in thousands)
Stock-based compensation - Options												$	967		$	1,819
Stock-based compensation - RSUs	$	627	$	-		$	1,131		$	-		$	821		$	504

Stock-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized on a straight-line basis over the requisite service period.

Note 910 — Segment and geographic information

The Company operates as 1 ~~operating~~reporting segment. The Company’s chief operating decision maker (“CODM”) is its chief executive officer, who reviews financial information presented on an entity-wide basis for purposes of making operating decisions, assessing financial performance and allocating resources.

All long-lived tangible assets are located in the United States. Revenue by geographic location, based on the location of the customers, with noone foreign country individually comprising greater than 10% of total revenue, is as follows:

	Three months ended March 31,
	2022				2021
	(in thousands)

United States	$	11,799	67	%	$	7,156	72	%
International:
United Kingdom		1,901	11	%		169	2	%
Other		3,927	22	%		2,611	26	%
Total International	$	5,828	33	%		2,780	28	%
	$	17,627	100	%	$	9,936	100	%

Note 11 — Related party transactions

Equity investments

The Company incurred $1.0 million in revenue share to Nebula from subscription sales related to the Bundled Marketing and Premium Tier Agreement which is recorded in Cost of revenues on the unaudited consolidated statement of operations. The Bundled and Premium Tier subscriptions bundles the Nebula SVoD subscription with the CuriosityStream subscription for a single subscription fee through the CuriosityStream Premium Tier.

Note 12 — Leases

The Company adopted the new leases guidance contained in Topic 842 effective January 1, 2022 using the modified retrospective method. Therefore, the reported results for the three months ended March 31, 2022 and the financial position as of March 31, 2022 reflect the application of this new guidance, while the reported results for the three months ended March 31, 2021 and the financial position as of December 31, 2021 were not adjusted and continue to be reported under the prior lease accounting guidance in effect for the prior periods.

Company as a Lessee

The Company has entered into a non-cancellable operating lease agreement for office space, which expires in 2033. The Company’s operating lease for this office space includes fixed rent payments and variable lease payments, which are primarily related to common area maintenance and utility charges. The Company has elected to not separate lease and non-lease components, as such all amounts paid under the lease are classified as either fixed or variable lease payments. Fixed leases payments were included in the calculation of ROU assets and leases liabilities and variable lease payments are recognized as lease expense. The Company has determined that no renewal clauses are reasonably certain of being exercised and have not included any renewal periods within the lease term for this lease.

At March 31, 2022, the Company had operating lease ROU assets of $3.9 million, current lease liabilities of $0.3 million, and non-current lease liabilities of $4.9 million. In measuring operating lease liabilities, the Company used a weighted average discount rate of 4.4% in existence as of the January 1, 2022 adoption date. The weighted average remaining lease term at March 31, 2022 was 11.2 years.

Components of Lease Cost

Three Months Ended
June 30, Six Months Ended
June 30,
2021 2020 2021 2020
United States $ 12,111 79 % $ 10,241 85 % $ 19,266 76 % $ 16,069 82 %
International 3,233 21 % 1,808 15 % 6,014 24 % 3,447 18 %
$ 15,344 100 % $ 12,049 100 % $ 25,280 100 % $ 19,516 100 %

The Company’s total operating lease cost for the three months ended March 31, 2022 was comprised of the following:

	(in thousands)
Operating lease cost	$	121
Short-term lease cost		18
Variable lease cost		11
Total lease cost	$	150

Maturity of Lease Liabilities

As of March 31, 2022, maturities of our operating lease liabilities, which do not include short-term leases and variable lease payments, are as follows (in thousands):

Remaining nine months of 2022	$	399
2023		543
2024		557
2025		571
2026		585
Thereafter		3,946
Total Lease Payments	$	6,601
Less: imputed interest		(1,382	)
Present value of total lease liabilities	$	5,219

Company as Lessor

The Company sublets a portion of its office space to a related party and accounts for the arrangement as an operating lease. Related party sublease rental income is recognized on a straight-line basis and is included in Interest and other income in the accompanying consolidated statements of operations. For the three months ended March 31, 2022, operating lease income from the Company’s sublet was less than $0.1 million. As of March 31, 2022, total remaining future minimum lease payments receivable on the Company’s operating lease was $0.7 million.

Note 1013 — Commitments and contingencies

Content commitments

At ~~June 30, 2021,~~March 31, 2022, the Company had ~~$30,074~~$22.4 million of content obligations comprised of ~~$6,581~~$4.0 million included in ~~current~~ content liabilities in the accompanying unaudited consolidated balance sheets, and ~~$23,493~~$18.4 million of obligations that are not reflected in the accompanying consolidated balance sheets as they did not yet meet the asset recognition criteria for content ~~assets (see Note 4).~~assets. Content obligations of ~~$25,848~~$15.8 million and ~~$4,226~~$2.6 million are expected to be paid during the ~~six~~nine months ending December 31, ~~2021~~2022 and the year ending December 31, ~~2022,~~2023, respectively.

At December 31, ~~2020,~~2021, the Company had ~~$26,022~~$39.0 million of content obligations comprised of ~~$2,116~~$9.7 million included in current content liabilities in the accompanying unaudited consolidated balance sheets and ~~$23,906~~$29.4 million of obligations that are not reflected in the accompanying unaudited consolidated balance sheets as they did not yet meet the asset recognition criteria for content assets.

Content obligations include amounts related to licensed, commissioned and internally produced streaming content. An obligation for the production of content includes non-cancelable commitments under creative talent and employment agreements. An obligation for the licensed and commissioned content is incurred at the time the Company enters into an agreement to obtain future titles. Once a title becomes available, a content liability is generally recorded. Certain agreements include the obligation to license rights for unknown future titles, the ultimate quantity and/or fees for which are not yet determinable as of the reporting date.

Advertising commitments

The Company has certain commitments with regards to future advertising and marketing expenses as stated in the various licensee agreements. Certain of the agreements do not specify the amount of advertising and marketing commitment; however, the total commitments for agreements which do specify the amount are ~~$12,016~~$17.3 million as of ~~June 30, 2021,~~March 31, 2022, of which ~~$6,016,~~$16.6 million, $0.5 million and ~~$6,000~~$0.3 million are expected to be paid during the ~~six~~nine months ending December 31, ~~2021~~2022 and ~~the year~~years ending December 31, ~~2022,~~2023 and 2024, respectively.

~~Operating leases~~

The Company leases corporate office space in Silver Spring, Maryland. The lease expires February 28, 2033. The terms of the lease include a rent abatement period of ten months and a tenant improvement allowance of $93 and $295 for 2020 and 2021, respectively.

Total rent paid under the terms of the lease was $43 and $136 for the three months ended June 30, 2021 and 2020, respectively. Total rent paid was $43 and $272 for the six months ended June 30, 2021 and 2020, respectively. Rent expense has been calculated on a straight-line basis over the term of the lease. Accordingly, rent expense included in general and administrative expenses in the accompanying consolidated statements of operations was $127 and $133 for the three months ended June 30, 2021, and 2020, respectively, and rent expense was $257 and $266 for the six months ended June 30, 2021, and 2020, respectively. The rent and sublease rental income future minimum lease payments for the above operating lease are as follows:

CuriosityStream rent Sublease rental income Net rent

Remainder of six months ending December 31, 2021 261 (26 ) 235

Years Ending December 31,
2022 530 (53 ) 477
2023 543 (54 ) 489
2024 557 (56 ) 501
2025 571 (57 ) 514
Thereafter 4,531 (453 ) 4,078

$ 6,993 $ (699 ) $ 6,294

Note 1114 — Income taxes

The Company recorded a provision for income taxes ~~totaling $53 and $40~~were less than $0.1 million for the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and $79 and $77 for the six months ended June 30, 2021 and 2020,~~ respectively, primarily related to foreign withholding income taxes. The Company’s provision for income taxes differs from the federal statutory rate primarily due to the Company being in a full valuation allowance position and not recognizing a tax benefit attributable to generated losses for either federal or state income tax purposes.

~~Note 12 — Subsequent events~~

The Company agreed to acquire a limited partnership interest in Spiegel TV Geschichte und Wissen GmbH & Co. KG, a German limited liability partnership (“JV”), and shares of its general partner, Spiegel TV Geschichte und Wissen Verwaltungs-GmbH for a purchase price of approximately $4.2 million. The Company will hold 32% of the JV’s partnership interest and 32% of the general partner’s shares. The Company, Spiegel TV and Autentic GmbH contemporaneously entered into content licensing and pay television and SVOD distribution agreements as well as a shareholders’ agreement dated July 8, 2021. The closing of the transaction is subject to certain approvals under German law.

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

The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of our results of operations and financial condition. These forward-looking statements are subject to risks and uncertainties that could cause actual results and events to differ materially from those included in forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in Amendment No. 1 to our Annual Report on Form 10-K/A for the year ended December 31, 2020, filed with the Securities and Exchange Commission (“SEC”). Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “we,” “us,” “our,” and “the Company” are intended to mean the business and operations of CuriosityStream.

Cautionary Note Regarding Forward-looking Statements

All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q including, without limitation, statements under this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. When used in this Quarterly Report on Form 10-Q, words such as “anticipate,” “attribute,” “believe,” “continue,” “hope,” “estimate,” “expect,” ~~“intend”~~“intend,” “may,” “might,” “potential,” “seek,” “should,” “will” and “would,” and similar expressions, as they relate to us or the Company’s management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company’s management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on the Company’s behalf are qualified in their entirety by this paragraph. These forward-looking statements are subject to risks and uncertainties that could cause actual results and events to differ materially from those included in forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission (“SEC”). We assume no obligation to revise or publicly release any revision to any forward-looking statements contained in this Quarterly Report on Form 10-Q, unless required by law.

Overview

CuriosityStream is a media and entertainment company that offers premium video programming across the ~~entire category~~principal categories of factual entertainment, including science, history, society, nature, lifestyle and technology. Our mission is to provide premium factual entertainment that informs, enchants and inspires. We are seeking to meet demand for high-quality factual entertainment via SVoD platforms, as well as via bundled content licenses for SVoD and linear offerings, partner bulk sales, brand partnerships and content sales. We are well-positioned for growth as a digital-native video platform monetizing content across this broad revenue stack.

We operate our business as a single operating segment that provides premium streaming content through multiple channels, including the use of various applications, partnerships and affiliate relationships. We generate our revenue through six ~~lines of business:~~products and services: Direct to Consumer Business, Partner Direct Business, Bundled Distribution, Program Sales, Corporate & Association Partnerships and ~~Sponsorships. For~~Other. The table below shows our revenue generated through each of the ~~six~~foregoing products and services for the three months ended ~~June 30, 2021, Direct to Consumer~~March 31, 2022 and Corporate & Association Partnerships together represented approximately 41% of our revenue, followed by Bundled Distribution (approximately 28% of our revenue) and Partner Direct Business (approximately 8% of our revenue), Program Sales (approximately 23% of our revenue) and Sponsorships (less than 1% of our revenue). Our product and service lines and channels through which we generate revenue are described in further detail below.March 31, 2021:

	Three Months Ended March 31,
	2022				2021
	(in thousands)
Direct to Consumer (Subscriptions – O&O and App Services)	$	7,192	41	%	$	4,816	48	%
Partner Direct Business (License Fees – Affiliates)		1,143	6	%		977	10	%
Bundled Distribution (License Fees – Affiliates)		3,767	21	%		3,526	35	%
Program Sales		4,248	24	%		486	5	%
Corporate & Association Partnerships (Subscriptions – O&O Service)		1,163	7	%		61	1	%
Other		114	1	%		70	1	%
Revenues	$	17,627			$	9,936

Our award-winning video content library features ~~more than 3,100~~thousands of nonfiction episodes, including more than 1,000 original, commissioned or co-produced documentaries, of short-form, mid-form and long-form ~~duration, with an estimated $1 billion in original production value.~~duration. Our content, approximately one-third of which is originally produced ~~and~~with the ~~other~~remaining two-thirds consisting of ~~which is~~ licensed programming, is available directly through our O&O Service and App Services. 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, all major smart TV brands (e.g., LG, Vizio, Samsung, Sony) and gaming consoles like Xbox. Our Direct Service is available to any household in the world with a broadband connection for $2.99 per month or $19.99 per ~~year~~year. We also provide a premium service for ~~high definition resolution, or~~ $9.99 per month or $69.99 per ~~year for service in 4K.~~year.

The MVPD, vMVPD 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, Roku Channels, Sling TV and YouTube TV.

In addition to our Direct to Consumer Business and Partner Direct ~~Businesses,~~Business, we have affiliate relationships with ~~MVPDs and~~our Bundled MVPD Partners and MVPDs, which are broadband and wireless companies in the U.S. and international territories to whom we can offer a broad scope ~~sets~~ 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 Program Sales Business, we sell to certain media companies a collection of our existing titles in a traditional program sales deal. We also sell selected rights (such as in territories or on platforms that are lower priority for us) to content we create before we even begin production. This latter model reduces risk in our content development decisions and creates program sales revenue.

Our Corporate & Association Partnerships business ~~to date has been~~is comprised primarily of selling subscriptions in bulk to companies and organizations that in turn offer these subscriptions to their employees and members as an employment benefit or “gift of curiosity.” To date, over 3027 companies have purchased annual subscriptions at bulk discounts for their employees.

In the future, we ~~hope to enter into multi-year integrated partnerships where we create and distribute content in support of these partners’ Corporate Social Responsibility (CSR) and membership initiatives.~~

~~In the future, we~~also hope to continue developing integrated digital brand partnerships with advertisers. These sponsorship campaigns ~~would~~ offer companies the chance to be associated with CuriosityStream content in a variety of forms, including short and long form program integration, branded social media promotional videos, broadcast advertising spots, and digital display ads. We believe the impressions accumulated in these multi-faceted campaigns would roll up to verifiable metrics for the clients. We executed ~~on two such sponsorships in the last quarter of 2020: one in the financial services sector as well as a brand in the health and fitness sector.~~

The sixth line of business in our revenue stack is our Program Sales Business. We are able to sell to certain media companies a collection of our existing titles in a traditional program sales deal and we are currently party to a multi-year, multi-million dollar program sales agreement with one such ~~media company. We are also able to sell selected rights (such as~~advertising agreement in territories or on platforms that are lower priority for us) to content we create before we even begin production. This latter model reduces risk in our content development decisions and creates program sales revenue.

~~Recent Developments~~

~~Equity Financing~~

~~On February 8,~~ 2021 we consummated an underwritten public offering (the “Offering”) of 6,500,000 shares of the Company’s common stock, par value per share $0.0001 (“Common Stock”), plus an over-allotment option to purchase up to 975,000 additional shares of Common Stock granted to the underwriters who participated in the Offering, which over-allotment option was exercised by the underwriters in full on February 5, 2021. The net proceeds to us from the Offering were $94.1 million, after deducting $6.8 million in underwriting discounts and commissions. We also incurred and paid offering expenses in connection with the Offering of $0.7 million during the six months ended June 30, 2021. The Offering was made pursuant to the Company’s Registration Statement on Form S-1, filed with the SEC on February 1, 2021 and declared effective on February 3, 2021. During the six months ended June 30, 2021, we received funds of approximately $54.9 million for the exercise of 4.8 million Public Warrants. The receipt of the net proceeds from the Offering as well as proceeds received from the exercise of Public Warrants during the six months ended June 30, 2021 has resulted in a significant cash balance that has mitigated the Company’s potential capital risk for the foreseeable future. There were no warrants exercised during the three months ended June 30, 2021.

~~Asset Purchase Agreement~~

On May 11, 2021, the Company consummated the acquisition of 100% ownership of One Day University pursuant to that certain Asset Purchase Agreement, dated May 11, 2021, by and among One Day University and the Company for the aggregate consideration of $4.5 million. One Day University provides access to talks and lectures from professors at colleges and universities in the United States. The acquisition complements and enhances the Company’s offering of premium factual content and provides additional long-term revenue and promotional opportunities by connecting directly with new audiences in new formats.Nebula.

~~Partnership with SPIEGEL TV~~

On July 29, 2021, the Company announced the expansion of its European footprint through a partnership with SPIEGEL TV, the subsidiary of the German media conglomerate SPIEGEL, and its partner, Autentic, a factual content producer and distributor. Germany is the Company’s top non-English-speaking market, and the partnership expands the Company’s reach through the addition of hundreds of hours of German-dubbed programming to the Company’s SVoD service as well as a rebranded linear channel in German-speaking Europe.

~~COVID-19 Pandemic~~

In March 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic, which continues to spread throughout the United States and globally. The full extent of the impact of the COVID-19 pandemic on our business, operations and financial results will depend on numerous evolving factors that we may not be able to accurately predict. See Item 1A: “Risk Factors” section set forth in Amendment No. 1 to our 2020 Annual Report on Form 10-K/A for additional details. In an effort to protect the health and safety of our employees, our workforce has had and continues in most instances to spend a significant amount of time working from home, international travel has been severely curtailed. Our other partners have similarly had their operations disrupted, including those partners that we use for our operations as well as development, production, and post-production of content. While we and our partners have resumed productions and related operations in many parts of the world, our ability to produce content remains affected by the pandemic. In an effort to contain COVID-19 or slow its spread, governments around the world have also enacted various measures, some of which have been subsequently rescinded, modified or reinstated, including orders to close all businesses not deemed “essential,” isolate residents to their homes or places of residence, and practice social distancing. In addition, COVID-19 vaccinations have been increasing, though at a decreasing rate with significant resistance to vaccination in certain geographies and among certain groupings of people. We anticipate that these actions and the global health crisis caused by COVID-19, including any resurgences, notably by the “delta” variant of the virus, will continue to negatively impact business activity across the globe. We will continue to actively monitor the situation and may take further actions that alter our business operations as may be required by federal, state, local or foreign authorities, or that we determine are in the best interests of our employees, customers, partners and stockholders. It is not clear what potential effects any such alterations or modifications may have on our business, including the effects on our customers, suppliers or vendors, or on our financial results.

Key Factors Affecting Results of Operations

Our future operating results and cash flows are dependent upon a number of opportunities, challenges, and other factors, including our ability to efficiently grow our subscriber base and expand our service offerings to maximize subscriber lifetime value. In particular, we believe that the following factors significantly affected our results of operations over the ~~periods presented below~~last fiscal quarter and are expected to continue to have such significant effects:

Revenues

Currently, the main sources of our revenue are (i) subscriber fees from the Direct to Consumer Business and Direct Subscribers, (ii) license fees from affiliates who receive subscriber fees for CuriosityStream from such affiliates’ subscribers (“Partner Direct Business” and “Partner Direct Subscribers”) ~~and~~, (iii) bundled license fees from distribution affiliates (“Bundled MVPD Business” and “Bundled MVPD Subscribers”)., and (iv) license fees from program sales arrangements. As of ~~June 30, 2021,~~March 31, 2022, we had approximately 2024 million total paying subscribers, including Direct Subscribers, Partner Direct Subscribers and Bundled MVPD Subscribers.

Since our founding in 2015, we have generated the majority of our revenues from Direct Subscribers in the form of monthly or annual subscription plans. We charge $2.99 per month or $19.99 ~~dollars~~ per year for our standard Direct Service, ~~in high-definition resolution~~ or $9.99 per month or $69.99 per year for ~~service~~our premium Direct Service. We may in ~~4K.~~the future increase the price of our subscription plans, which may have a positive effect on our revenue from this line of our business. The MVPD, vMVPD and digital distributor partners making up our Partner Direct Business pay us a ~~revenue share or~~ license fee. We recognize subscription revenues ratably during each subscriber’s monthly or yearly subscription period. We pay a fixed percentage distribution fee to our partners for subscribers accessing our platform via App Services to compensate these partners for access to their customer and subscriber bases. Our MVPD, vMVPD and digital distributor partners host and stream our content to their customers via their own platforms, such as set top boxes in the case of most MVPDs. We do not incur billing, streaming or backend costs associated with content distribution through our MVPD, vMVPD and digital distributor partners.

Operating Costs

Our primary operating costs relate to the cost of producing and acquiring our content, the costs of advertising and marketing our service, personnel costs, and distribution fees. As of ~~June 30, 2021,~~March 31, 2022, licensed content represented ~~2,081~~3,322 titles and original titles represented ~~1,006~~1,100 titles. Producing and co-producing content and commissioned content is generally more costly than content acquired through licenses.

The Company’s business model is subscription based as opposed to a model generating revenues at a specific title level. Content assets (licensed and produced) 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 library will be stated at the lower of unamortized cost or fair value. In addition, unamortized costs for assets that have been, or are expected to be, abandoned are written off. For a discussion of the accounting policies for content impairment write-down and management estimates involved therein, see “— Critical Accounting Policies and Estimates” below.

Further, our advertising and marketing expenditures and personnel costs constitute primary operating costs for our business. These costs may fluctuate based on advertising and marketing objectives and personnel needs. In general, we have been and intend to continue to focus marketing dollars on efficient customer acquisition. With respect to personnel costs, ~~for the first several years of our existence,~~ we ~~invested heavily in engineering, marketing and programming staff to build the Company and its service offering. Beginning in 2019, however, we began to~~ focus on revenue-generating personnel, such as sales staff and ~~other revenue-generating personnel.~~roles that support the improvement, maintenance and marketing of our Direct Service.

Results of Operations

The financial data in the following ~~tables set~~table sets forth selected financial information derived from our unaudited consolidated financial statements for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and March 31, 2021 ~~and 2020~~ and shows our results of operations as a percentage of revenue or as a percentage of ~~costs.~~costs, as applicable, for the periods indicated. We conduct business through one operating segment, ~~CuriosityStream Inc.~~CuriosityStream.

	Three months ended March 31,
	2022					2021					$ Change			% Change
	(unaudited)
	(in thousands)

Revenues
Subscriptions	$	8,355		47	%	$	4,877		49	%	$	3,478			71	%
License fee		9,158		52	%		4,989		50	%		4,169			84	%
Other		114		1	%		70		1	%		44			63	%
Total Revenues	$	17,627		100	%	$	9,936		100	%	$	7,691			77	%
Operating expenses
Cost of revenues		11,850		32	%		4,158		17	%		7,692			185	%
Advertising and marketing		14,768		40	%		12,248		48	%		2,520			21	%
General and administrative		10,503		28	%		8,733		35	%		1,770			20	%
Total operating expenses	$	37,121		100	%	$	25,139		100	%	$	11,982			48	%
Operating loss		(19,494	)				(15,203	)				(4,291	)		28	%
Other income (expense)
Change in fair value of warrant liability		3,860					(3,786	)				7,646			(202	%)
Interest and other (expense) income		(57	)				260					(317	)		(122	%)
Equity interests loss		(156	)				-					(156	)		n/m
Loss before income taxes	$	(15,847	)			$	(18,729	)			$	2,882			(15	%)
Provision for income taxes		45					26					19			73	%
Net loss	$	(15,892	)			$	(18,755	)			$	2,863			(15	%)

~~Comparison of the three months ended June 30, 2021 and 2020~~

Three months ended
June 30,
2021 2020 $ Change % Change
(unaudited)
(in thousands)
Revenues:
Subscriptions $ 5,680 37 % $ 4,067 34 % $ 1,613 40 %
License fee 9,610 63 % 7,978 66 % 1,632 20 %
Other 54 0 % 4 0 % 50 n/m
Total Revenues $ 15,344 100 % $ 12,049 100 % $ 3,295 27 %
Operating expenses:
Cost of revenues 5,722 22 % 4,671 28 % 1,051 23 %
Advertising and marketing 11,520 44 % 8,304 51 % 3,216 39 %
General and administrative 9,153 34 % 3,437 21 % 5,716 166 %
Total operating expenses $ 26,395 100 % $ 16,412 100 % $ 9,983 61 %
Operating loss (11,051 ) (4,363 ) (6,688 ) 153 %
Other income (expense)
Change in fair value of warrant liability 1,764 - 1,764 n/m
Interest and other income (expenses) 1,036 86 950 1,105 %
Loss before income taxes $ (8,251 ) (4,277 ) $ (3,974 ) 93 %
Provision for income taxes 53 40 13 33 %
Net loss $ (8,304 ) $ (4,317 ) $ (3,987 ) 92 %

n/m - percentage not meaningful

Revenue

Revenue for the three months ended ~~June 30,~~March 31, 2022 and March 31, 2021 ~~and 2020~~ was ~~$15.3~~$17.6 million and ~~$12.0~~$9.9 million, respectively. The increase of ~~$3.3~~$7.7 million, or ~~27%~~77%, is due to a ~~$1.6~~$3.5 million increase in subscription revenue and a ~~$1.6~~$4.2 million increase in license fee ~~revenue, and $0.1 million increase in other~~ revenue.

The increase in subscription revenue of ~~$1.6~~$3.5 million resulted primarily from ana $2.4 million increase ~~of $1.9 million~~ in subscriber fees received ~~by us~~ from Direct ~~subscribers~~Subscribers for annual plans ~~offset by~~which resulted from increased brand awareness from greater advertising and marketing spending and a ~~$0.3~~$1.1 million ~~decrease~~increase in ~~Corporate & Association Partnership sales.~~corporate subscriptions related to the bulk agreement with Redbox executed in the last quarter of 2021. The increase ~~of $1.6 million~~ in license fees of $4.2 million resulted primarily from a ~~$1.3~~$3.8 million increase in ~~revenue from Program Sales for delivery~~license fees related to a larger volume of ~~titles made during the period. The remaining~~program sales arrangements and a $0.4 million increase ~~of $0.3 million on license revenue is primarily~~in bundled distribution due to ~~an increase~~new agreements launched in the second half of ~~$0.3 million in revenue from Partner Direct. The increase in other revenue of $0.1 million is due to sponsorship revenue deals with customers.~~2021.

Operating Expenses

Operating expenses for the three months ended ~~June 30,~~March 31, 2022 and 2021 ~~and 2020~~ were ~~$26.4~~$37.1 million and ~~$16.4~~$25.1 million, respectively. This increase of ~~$10.0~~$12.0 million, or ~~61%~~48%, primarily resulted from the ~~changes in the components of our operating expenses described below:~~following:

Cost of ~~Revenues~~Revenues: : Cost of revenues for the three months ended ~~June 30, 2021~~March 31, 2022 increased to ~~$5.7~~$11.9 million from ~~$4.6~~$4.2 million for the three months ended ~~June 30, 2020.~~March 31, 2021. Cost of revenues primarily includes content amortization, hosting and streaming delivery costs, payment processing costs and distribution fees, commission costs and subtitling and broadcast costs. This increase of ~~$1.1~~$7.7 million, or ~~23%~~185%, is primarily due ~~primarily~~ to the increase in content amortization of ~~$1.1~~$6.3 million, of which ~~$0.2 million~~ is ~~due to~~primarily driven by the ~~timing~~increase in program sales arrangements resulting in significant accelerated amortization, as well as an increase in the number and ~~number~~cost of titles published during the three months ended ~~June 30, 2021 as~~March 31, 2022 compared to the three months ended ~~June 30, 2020 and $0.9 million~~March 31, 2021. The balance of the increase in cost of revenues is primarily due to ~~accelerated content amortization~~a $1.2 million increase in revenue share expense related to ~~our program sales contracts during~~bundled and premier tier arrangements with other streaming services and an increase of $0.2 million in subtitling and broadcast costs.

Advertising & Marketing: Advertising and marketing expenses for the three months ended ~~June 30, 2021 when~~March 31, 2022, increased to $14.8 million from $12.2 million for the three months ended March 31, 2021. This increase of $2.5 million, or 21% is primarily due to an increase in digital advertising of $1.4 million, an increase in radio advertising of $3.6 million, partially offset by a decrease of $1.6 million in TV advertising and a decrease of $0.9 million in partner platforms, brand awareness, and other advertising compared to the prior year period.

~~Advertising and Marketing~~: Advertising and marketing expenses for the three months ended June 30, 2021 increased to $11.5 million from $8.3 million for the three months ended June 30, 2020. This increase of $3.2 million, or 39%, was principally due to an increase in digital advertising of $2.8 million, an increase in radio advertising of $1.2 million and an increase in partner platform advertising of $0.3 million. This overall increase is partially offset by a decrease of $0.9 million in TV advertising and a decrease of $0.2 million in brand awareness advertising when compared to the second quarter of 2020.

General and ~~Administrative~~Administrative:: General and administrative expenses for the three months ended ~~June 30, 2021~~March 31, 2022 increased to ~~$9.1~~$10.5 million from ~~$3.4~~$8.7 million for the three months ended ~~June 30, 2020.~~March 31, 2021. This increase of ~~$5.7~~$1.8 million, or ~~approximately 166%~~20%, ~~was~~is primarily ~~due~~attributable to ~~an increase of $1.1~~$1.4 million ~~in stock-based compensation in the three months ended June 30, 2021 when compared to the three months ended June 30, 2020. Also, an increase of $1.7 million in~~for incremental salaries and benefits ~~as well as bonus costs is attributable~~in addition to the increased headcount for the current period when compared to the second quarter of 2020. The remaining increase in general and administrative cost is primarily due to an increase of $1.3 million related for professional fees, increase of $0.4 million related to insurance costs and increase of $0.1 million related to licenses and subscriptions. During the three months ended June 30, 2020, the Company applied the receipts of the PPP loan of $1.0 million to reduce qualifying general and administrative costs, whereas there was no such activity during the three months ended June 30, 2021.several other changes that were not individually significant. We expect to incur additional expenses in future periods as we continue to invest in corporate infrastructure to support the Company’s activities, including adding personnel and systems to our administrative and revenue-generating functions.

Operating Loss

Operating loss for the three months ended ~~June 30,~~March 31, 2022 and March 31, 2021 ~~and 2020~~ was ~~$11.1~~$19.5 million and ~~$4.4~~$15.2 million, respectively. The increase of ~~$6.7~~$4.3 million, or ~~approximately 153%~~28%, in operating loss resulted from the increase in ~~revenue~~operating expenses of ~~$3.3~~$12.0 million, or ~~27%~~48%, offset by ~~the~~an increase in ~~operating expenses~~revenue of ~~$10.0~~$7.7 million, or ~~61%~~77%, in each case during the three months ended ~~June 30, 2021~~March 31, 2022 compared to the three months ended ~~June 30, 2020,~~March 31, 2021, as described above.

Change in Fair Value of Warrant Liability

For the three months ended ~~June 30, 2021,~~March 31, 2022, the Company recognized a ~~$1.8~~$3.9 million gain related to the change in fair value of the warrant liability, which was due to a decrease in the fair value of the Private Placement Warrants for the quarter, compared to a loss of $3.8 million recognized during the three months ended ~~June 30, 2021. There~~March 31, 2021, which was ~~no comparable activity~~due to an increase in the fair value of the Private Placement Warrants in the prior ~~year~~ period.

Interest and ~~Other Income (Expense)~~other income (expense)

Interest and other income (expense) for the three months ended ~~June 30, 2021 increased $1.0~~March 31, 2022 was a $0.1 million expense compared to $0.3 million in income for the ~~same period in 2020,~~three months ended March 31, 2021, primarily due to ~~interest income related to~~amortization of the ~~purchase of investments.~~Company’s investment account with no comparable amount during the three months ended March 31, 2021.

Equity Interests Loss

For the three months ended March 31, 2022, the Company recorded $0.2 million equity interests loss related to the equity investments in the Spiegel Venture and Nebula with no comparable income or loss in the three months ended March 31, 2021.

Provision for Income Taxes

Due to ~~our~~generating a loss ~~from operations~~before income taxes in each of the three months ended ~~June 30,~~March 31, 2022 and March 31, 2021, ~~and 2020,~~ we had a provision for income taxes of ~~$53~~$45 thousand and ~~$40~~$26 thousand, respectively. This increase of $19 thousand, or 73%, was primarily due to an increase in foreign withholding tax expense ~~as a result of the~~due to an increase in contracts executed with ~~third~~ parties in foreign ~~jurisdictions in the three months ended June 30, 2021 when compared to the three months ended June 30, 2020.~~jurisdictions. The Company’s provision for income taxes differs from the federal statutory rate primarily due to the Company being in a full valuation allowance position and not recognizing a benefit for either federal or state income tax purposes.

Net Loss

Net loss for the three months ended ~~June 30,~~March 31, 2022 and March 31, 2021 ~~and 2020~~ was ~~$8.3~~$15.9 million and ~~$4.3~~$18.8 million, respectively. The ~~increase~~decrease of ~~$4.0~~net loss of $2.9 million, or ~~approximately 92%~~15%, ~~resulted~~is primarily ~~from the increase in operating expenses, offset by a smaller increase in revenue as well as~~due to the change in the fair value of the warrant liability ~~during~~that resulted in a gain of $3.9 million for the three months ended ~~June 30, 2021~~March 31, 2022 compared to a loss of $3.7 million for the three months ended ~~June 30, 2020, as described above.~~

~~Comparison of the six months ended June 30,~~March 31, 2021 and ~~2020.~~

Six months ended
June 30,
2021 2020 $ Change % Change
(unaudited)
(in thousands)
Revenues:
Subscriptions $ 10,557 42 % $ 7,518 39 % $ 3,039 40 %
License fee 14,599 58 % 11,994 61 % 2,605 22 %
Other 124 0 % 4 0 % 120 n/m
Total Revenues $ 25,280 100 % $ 19,516 100 % $ 5,764 30 %
Operating expenses:
Cost of revenues 9,880 19 % 7,337 20 % 2,543 35 %
Advertising and marketing 23,769 46 % 21,009 59 % 2,760 13 %
General and administrative 17,885 35 % 7,621 21 % 10,264 135 %
Total operating expenses $ 51,534 100 % $ 35,967 100 % $ 15,567 43 %
Operating loss (26,254 ) (16,451 ) (9,803 ) 60 %
Other income (expense)
Change in fair value of warrant liability (2,022 ) - (2,022 ) n/m
Interest and other income (expenses) 1,296 418 878 210 %
Loss before income taxes $ (26,980 ) (16,033 ) $ (10,947 ) 68 %
Provision for income taxes 79 77 2 3 %
Net loss $ (27,059 ) $ (16,110 ) $ (10,949 ) 68 %

~~n/m - percentage not meaningful~~

~~Revenue~~

Revenue for the six months ended June 30, 2021 and 2020 was $25.3 million and $19.5 million, respectively. The increase of $5.8 million, or 30% is due to a $3.0 million increase in subscription revenue, a $2.6 million increase in license fee revenue, and a $0.1 million increase in other revenue. The increase in subscription revenue of $3.0 million resulted from an increase of $3.6 million in subscriber fees received by us from Direct subscribers for annual plans offset by a $0.6 million decrease in Corporate & Association Partnership sales. The increase of $2.6 million in license fees resulted primarily from a $1.7 million increase in revenue from Program Sales for delivery of titles made during the period. The remaining increase of $0.9 million on license revenue is due to an increase of $0.7 million in revenue from Partner Direct Business and an increase of $0.2 million in revenue from Bundled MVPD partners, in each case as a result of an increase in the number of users and/or subscribers for our service. The increase in other revenue of $0.1 million is due to new sponsorship revenue deals with customers.

~~Operating Expenses~~

Operating expenses for the six months ended June 30, 2021 and 2020 were $51.5 million and $35.9 million, respectively. This increase of $15.6 million, or 43%, primarily resulted from the changes in the components of our operating expenses described below:

~~Cost of Revenues~~: Cost of revenues for the six months ended June 30, 2021 increased to $9.9 million from $7.3 million for the six months ended June 30, 2020. Cost of revenues primarily includes content amortization, hosting and streaming delivery costs, payment processing costs and distribution fees, commission costs and subtitling and broadcast costs. This increase of $2.5 million, or 35%, is due primarily to the increase in content amortization of $2.3 million, of which $0.9 million is due to the timing and number of titles published during the six months ended June 30, 2021 as compared to the six months ended June 30, 2020 and $1.4 million is due to accelerated content amortization related to our program sales contracts during the six months ended June 30, 2021 when compared to the prior year period. The remaining increase in cost of revenues is due to slight increases in hosting and streaming delivery costs, processing and distribution fees, and subtitling and broadcast costs (total increase of $0.3 million). The increase of cost of revenues is consistent with the increase in revenue, ~~during the six months ended June 30, 2021.~~

~~Advertising and Marketing~~: Advertising and marketing expenses for the six months ended June 30, 2021 increased to $23.8 million from $21.0 million for the six months ended June 30, 2020. This increase of $2.8 million, or 13%, was principally due to an increase in digital advertising of $3.0 million, an increase in radio advertising of $1.5 million and an increase in partner platform advertising of $0.9 million, partially offset by ~~a decrease of $2.5 million in TV advertising and a decrease of $0.1 million in brand awareness advertising when compared to the prior period.~~

~~General and Administrative~~: General and administrative expenses for the six months ended June 30, 2021 increased to $17.9 million from $7.6 million for the six months ended June 30, 2020. This increase of $10.3 million, or approximately 135%, was primarily due to an increase of $3.1 million in stock-based compensation in the period when compared to the six months ended June 30, 2020. Of this increase related to stock-based compensation, $2.2 million is due to the recurring recognition of compensation expense over the service period and $0.9 million is due to the immediate recognition of stock-based compensation expense of a fully vested award granted in January 2021 to an executive. Also, an increase of $2.7 million in salaries and benefits as well as bonus costs is attributable to the increased headcount of mid to senior management hires for the current period when compared to the prior period. The remaining increase in general and administrative cost is primarily due to an increase of $2.3 million related to professional fees, increase of licenses and subscriptions of $0.4 million and $0.8 million related to insurance costs. During the six months ended June 30, 2020, the Company applied the receipts of the PPP loan of $1.0 million to reduce qualifying general and administrative costs, whereas there was no such activity during the six months ended June 30, 2021. We expect to incur additional expenses in future periods as we continue to invest in corporate infrastructure, including adding personnel and systems to our administrative and revenue-generating functions.

~~Operating Loss~~

Operating loss for the six months ended June 30, 2021 and 2020 was $26.3 million and $16.5 million, respectively. The increase of $9.8 million, or approximately 60%, in operating loss resulted from the increase in revenue of $5.8 million, or 30%, offset by the increase in operating expenses of $15.6 million, or 43%, in each case during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, as described above.

~~Change in Fair Value of Warrant Liability~~

For the six months ended June 30, 2021, the Company recognized a $2.0 million loss related to the change in fair value of the warrant liability, which was due to an increase in the fair value of the Private Placement Warrants during the six months ended June 30, 2021. There was no comparable activity in the prior year period.

~~Interest and Other Income (Expense)~~

Interest and other income (expense) for the six months ended June 30, 2021 and 2020 increased $0.9 million compared to the same period in 2020, primarily due to interest income related to the purchase of investments.

~~Provision for Income Taxes~~

Due to our loss from operations in each of the six months ended June 30, 2021 and 2020, we had a provision for income taxes of $79 thousand and $77 thousand, respectively. This increase was primarily due to an increase in foreign withholding tax expense as a result of the increase in contracts executed with third parties in foreign jurisdictions in the six months ended June 30, 2021 when compared to the six months ended June 30, 2020. The Company’s provision for income taxes differs from the federal statutory rate primarily due to the Company being in a full valuation allowance position and not recognizing a benefit for either federal or state income tax purposes.

~~Net Loss~~

~~Net loss for the six months ended June 30, 2021 and 2020 was $27.1 million and $16.1 million, respectively. The increase of $11.0 million, or approximately 68%, resulted primarily from the increase in~~higher operating expenses and ~~change in fair value of the warrant liability, partially offset by a smaller increase in revenue as well as an increase in~~equity interest ~~and other income, in each case during the six months ended June 30, 2021 as compared to the six months ended June 30, 2020, as described above.~~loss.

Liquidity and Capital Resources

As of ~~June 30, 2021,~~March 31, 2022, we had cash and cash equivalents, including restricted cash, of ~~$13.8~~$24.9 million. In addition, the Company had available for sale investments in debt securities totaling $60.0 million, all of which were classified as short-term investments. All of the Company’s investments in debt securities can be readily converted to cash to meet the Company’s ongoing operating cash flow needs. For the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, we incurred a net loss of ~~$27.1~~$15.9 million and used ~~$23.4~~$12.3 million of net cash in operating activities, ~~while investing activities~~ used ~~$129~~$19.8 million of net cash ~~and~~in investing activities, while financing activities ~~provided $148.7~~used $0.1 million of net cash.

Through the date of the Merger, we have financed our operations primarily from the net proceeds of our sale of Series A Preferred Stock in November and December 2018. An additional source of liquidity includes borrowings under our Line of Credit Facility with a bank (the “Line of Credit”). This Line of Credit provides for borrowings of up to $4.5 million with interest-only monthly payments at a rate equal to the LIBOR Daily Floating Rate plus 2.25%. The Line of Credit carries an unused fee of 0.25% annually on all committed but unused capital, payable quarterly in arrears. The entire unpaid principal balance is due when the Line of Credit matures on February 28, 2022, following the execution of a one-year extension during February 2021. The Line of Credit is collateralized by cash of $4.5 million that is held in restricted cash in current assets on the consolidated balance sheet.

On February 8, 2021, we consummated the Offering. The net proceeds from the Offering were $94.1 million, after deducting $6.8 million in underwriting discounts and commissions. We also incurred offering expenses in connection with the Offering of $0.7 million, of which all was paid during the six months ended June 30, 2021. During the six months ended June 30, 2021, we received funds of approximately $54.9 million for the exercise of 4.8 million Public Warrants. There was no exercise of Public Warrants during the three months ended June 30, 2021.

We believe that our ~~cash flows from financing, combined with our~~ current cash ~~and investment~~ levels and ~~available borrowing capacity,~~investments in debt securities that are readily convertible to cash will be adequate to support our ongoing operations, capital expenditures and working capital for at least the next twelve months, as evidenced by our cash flows from financing activities and cash and investment balances as of June 30, 2021. We believe that we have access to additional funds, if needed, through the capital markets to obtain further financing under the current market conditions.months.

Our principal uses of cash are to acquire content, promote our service through advertising and marketing, and provide for working capital to operate our business. We have experienced significant net losses since our inception, and, given the significant operating and capital expenditures associated with our business plan, we anticipate that we will continue to incur net losses.

Cash Flows

The following table presents our cash flows from operating, investing and financing activities for the ~~periods indicated:~~three months ended March 31, 2022 and March 31, 2021:

	Three months ended March 31,
	2022			2021
	(in thousands)

Net cash used in operating activities	$	(12,287	)	$	(12,590	)
Net cash provided by (used in) investing activities		19,773			(135,653	)
Net cash (used in) provided by financing activities		(137	)		148,879
Net increase in cash, cash equivalents and restricted cash	$	7,349		$	636

Cash Flow from Operating Activities

For the six months ended
June 30,
2021 2020
(unaudited)
(in thousands)

Net cash used in operating activities $ (23,356 ) $ (28,516 )
Net cash provided by (used in) investing activities (128,957 ) 31,621
Net cash provided by financing activities 148,679 -
Net increase (decrease) in cash, cash equivalents and restricted cash $ (3,634 ) $ 3,105

Cash flow from operating activities primarily consists of net losses, changes to our content assets (including acquisitions and amortization), and other working capital items.

During the ~~six~~three months ended ~~June 30,~~March 31, 2022 and March 31, 2021, ~~and 2020,~~ we recorded a net cash outflow from operating activities of ~~$23.4~~$12.3 million and ~~$28.5~~$12.6 million, respectively, or a decreased outflow of ~~$5.1~~$0.3 million, or ~~18%~~2%. The decreased outflow from operating activities was primarily due to ~~an increase in content liabilities, accounts payable, and accrued expenses and other liabilities of $7.3 million during the six months ended June 30, 2021 as compared to~~ a decrease of $5.5 million during the six months ended June 30, 2020, the increase in deferred revenue being $6.5 million larger during the six months ended June 30, 2021, and stock-based compensation expense, amortization of content assets, and change in fair value of warrant liability ~~increasing $7.4~~of $7.7 million (from a loss of $3.8 million during the ~~six~~three months ended ~~June 30,~~March 31, 2021 ~~as compared~~ to a gain of $3.9 million during the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022), an increase in the investment of content assets of $5.4 million, an increase in the change in content liabilities of $7.1 million, and a decrease in the change of deferred revenue of $1.9 million. These outflows are partially offset by ~~a $10.9 million~~an increase in ~~net loss and $11.9~~the change in accounts receivable of $9.7 million ~~higher level of additions~~due to ~~content assets~~larger collections in the current year ~~period.~~period than in the prior year period, an increase in amortization of content assets of $6.3 million, an increase in the change in accrued expenses and other liabilities of $1.1 million and a decrease in net loss of $2.3 million during the three months ended March 31, 2022 compared to the three months ended March 31, 2021.

Cash Flow ~~from~~Provided by (Used in) Investing Activities

Cash flow from investing activities consists of purchases, sales and maturities of investments, as well as equity investments and purchases of property and equipment.

During the ~~six~~three months ended ~~June 30,~~March 31, 2022 and March 31, 2021, ~~and 2020,~~ we recorded a net cash inflow from investing activities of $19.8 million and a net cash outflow from investing activities of ~~$129 million and a net cash inflow from investing activities of $31.6~~$135.6 million, respectively, or ~~an increased~~a decrease of cash outflow of ~~$160.6 million.~~$155.4 million, or 114%. The ~~increase~~decrease in cash outflow from investing activities was primarily due to the decrease on purchases of available for sale investments of ~~$141.6~~$140.1 million ~~during the six months ended June 30, 2021. We had~~and a net increase in sales and maturities of $4.9 million and $12.0 million respectively, during the six months ended June 30, 2021 compared to sales and maturities of investments of $35.6 million and $8.5 million, respectively, during the six months ended June 30, 2020.$16.6 million. The Company also had cash outflows of ~~$4.0~~$0.8 million related to quarterly contributions to the ~~Acquisition of ODU~~Nebula equity method investment during the ~~six~~three months ended ~~June 30,~~March 31, 2022, with no comparable activity during the three months ended March 31, 2021.

Cash Flow ~~from~~Provided by (Used in) Financing Activities

During the ~~six~~three months ended ~~June 30,~~March 31, 2022 and March 31, 2021, we recorded net cash outflow from financing activities of $0.1 million and a net cash inflow from financing activities of ~~$148.7~~$148.9 million, ~~which~~respectively. The net cash inflow during the three months ended March 31, 2021 of $148.9 million was attributable to the receipt of proceeds from the ~~Offering~~issuance of common stock of $94.1 million (net of $6.8 million of underwriting discounts and commissions), the exercise of 4.8 million Public Warrants of $54.9 million, and the exercise of ~~warrants~~stock options of ~~$54.9~~$0.3 million, partially offset by the payments of transaction costs related to the ~~Offering~~issuance of ~~$0.7 million incurred~~common stock of $0.4 million. There was no comparable activity during the ~~six~~three months ended ~~June 30, 2021. During the six months ended June 30, 2020, financing cash activities were limited to borrowings and payments of $1 million each on the line of credit.~~March 31, 2022.

Capital Expenditures

Going forward, we expect to make expenditures for additions to our content assets, and purchases of property and equipment. The amount, timing and allocation of capital expenditures are largely discretionary and within management’s control. Depending on market conditions, we may choose to defer a portion of our budgeted expenditures until later periods to achieve the desired balance between sources and uses of liquidity and prioritize capital projects that we believe have the highest expected returns and potential to generate cash flow. Subject to financing alternatives, we may also increase our capital expenditures significantly to take advantage of opportunities we consider to be attractive.

~~Off-Balance~~Off Balance Sheet Arrangements

As of ~~June 30, 2021,~~March 31, 2022, we had no off-balance sheet arrangements.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operation is based upon our ~~consolidated~~ financial statements, which have been prepared in accordance with U.S. GAAP. Certain amounts included in or affecting the ~~consolidated~~ financial statements presented in this Annual Report and related disclosure must be estimated, requiring management to make assumptions with respect to values or conditions which cannot be known with certainty at the time the ~~consolidated~~ financial statements are prepared. Management believes that the accounting policies set forth below comprise the most important “critical accounting policies” for the Company. A ~~“critical~~critical accounting ~~policy”~~policy is one which is both important to the portrayal of a company’s financial condition and results of operations and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Management evaluates such policies on an ongoing basis, based upon historical results and experience, consultation with experts and other methods that management considers reasonable in the particular circumstances under which the judgments and estimates are made, as well as management’s forecasts as to the manner in which such circumstances may change in the future.

Content Assets

The Company acquires, licenses and produces content, including original programming, in order to offer ~~members~~customers unlimited viewing of factual entertainment content. The content licenses are for a fixed fee and specific windows of availability. Payments for content, including additions to content ~~library~~assets and the changes in related liabilities, are classified within “Net cash used in operating activities” on the unaudited consolidated statements of cash flows.

The Company recognizes its content ~~library~~assets (licensed and produced) as “Content assets, net” on the unaudited consolidated balance sheets. For licenses, the Company capitalizes the fee per title and records a corresponding liability at the gross amount of the liability when the license period begins, the cost of the title is known, and the title is accepted and available for streaming. For productions, the Company capitalizes costs associated with the production, including development costs, direct costs, and production overhead.

Based on factors including historical and estimated viewing patterns, the Company ~~generally amortizes~~previously amortized the content ~~library~~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 with the month of first availability. Starting July 1, 2021, the Company amortizes 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. Furthermore, the amortization of original content is more accelerated than that of licensed content. We review factors that impact the amortization of the content assets on a regular basis and the estimates related to these factors require considerable management judgment. The Company ~~reviews~~continues to review factors impacting the amortization of ~~the~~ content ~~library~~assets on an ongoing basis and will also record amortization on an accelerated basis when there is more upfront use of a title, for instance due to significant program sales.

As a result of a sustained decrease in the Company’s share price during the three months ended March 31, 2022, we concluded that a triggering event had occurred and conducted impairment testing of our content assets. As a result of this review, we determined no impairment charges were necessary. Refer to the “Goodwill and intangible assets” section below for further details with respect to the impairment testing performed by the Company over its goodwill, definite-lived intangibles and other long-lived assets (including content assets) as of March 31, 2022.

Goodwill and intangible assets

Intangible assets other than goodwill are carried at cost and amortized over their estimated useful lives. Amortization is recorded within General and administrative expenses on the consolidated statements of operations. The Company reviews identifiable finite-lived intangible assets to be held and used for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Determination of recoverability is based on the lowest level of identifiable estimated undiscounted cash flows resulting from use of the asset and its ultimate disposition. Measurement of any impairment loss is based on the amount by which the carrying value of the asset exceeds its fair value.

As a result of a sustained decrease in the Company’s share price during the three months ended March 31, 2022, we concluded that a triggering event had occurred and conducted impairment testing of our goodwill and intangible assets. We determined that for purposes of this recoverability test, the lowest level of identifiable cash flows that are largely independent of other asset groups is at the entity level and as a result, we conducted the recoverability test at the entity level.

To determine the fair value of our identified entity level asset group, we used a weighting of fair values derived from the income approach and the market approach. Under the income approach, we project our future cash flows and discount these cash flows to reflect their relative risk. The cash flows used are consistent with those the Company uses in its internal planning, which reflects actual business trends experienced and our long-term business strategy. As such, key estimates and factors used in this method include, but are not limited to, revenue, margin, and operating expense growth rates, as well as a discount rate, and a terminal growth rate. Under the market approach, we use the guideline company and guideline transaction methods to develop valuation multiples and compare our company to similar publicly traded companies.

In order to further validate the reasonableness of fair value as determined by the income and market approaches described above, a reconciliation to market capitalization is then performed by estimating a reasonable control premium and other market factors. Future changes in the judgments, assumptions and estimates that are used in the impairment testing for our asset group could result in significantly different estimates of fair value.

~~Revenue recognition~~As a result of this review, we determined our asset group passed the recoverability test as the carrying value of our asset group exceeded our carrying value by approximately 10% and as a result, no impairment charges were necessary. Overall, in the event there are future adverse changes in our projected cash flows and/or changes in key assumptions, including but not limited to an increase in our discount rate, lower market multiples, lower revenue growth, lower margin, higher operating expenses, and/or a lower terminal growth rate, we may be required to record a non-cash impairment charge to our goodwill and intangible assets as well as other long-lived assets (including our content assets). Such a non-cash charge would likely have a material adverse effect on our consolidated statement of operations and balance sheet in the reporting period of the charge. While management believes the assumptions used in our impairment test are reasonable, the fair value estimate is most sensitive to our discount rate and market multiple assumptions as these amounts are reflective of the market’s perception of our ability to achieve our projected cash flows.

In the period following March 31, 2022, there has been a further decline in the Company’s market capitalization, based upon the Company’s publicly quoted share price, below the Company’s carrying or book value. If this decline in our share price is sustained for the following reporting period, this would require further testing of our identified asset group, which may result in an impairment. Absent changes to our projected cash flows, we would adjust our discount rate and market multiple assumptions as these amounts are reflective of the market’s perception of risks to achieving our projected cash flows and other economic factors. Those factors alone, or in combination with other factors, could cause our asset group carrying value to exceed its fair value, resulting in impairment.

Revenue recognition

Subscriptions — O&O Service

~~Subscription~~Subscriptions — App Services

The Company also earns subscription revenues through its App Services. These subscriptions are similar to the O&O Service subscriptions, but ~~these subscriptions~~ 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.

~~Licensing~~License Fees — Affiliates

~~Licensing~~License Fees — Program Sales

Recently Issued Financial Accounting Standards

The information set forth under Note 2 to the unaudited consolidated financial statements under the caption “Basis of presentation and summary of significant accounting policies” is incorporated herein by reference.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4. Controls and Procedures

~~Evaluation of~~ Disclosure Controls and Procedures

We maintain disclosure controls and procedures ~~that are~~ designed to ~~ensure~~provide reasonable assurance that information required to be disclosed in ~~the~~our reports that we file or ~~submit~~submits under the Exchange Act ~~is (1)~~are recorded, processed, summarized and reported within the specified time periods ~~specified~~ in the ~~SEC’s~~ rules and forms of the SEC, and ~~(2)~~that such information is accumulated and communicated to ~~our~~the Company’s management, including ~~our~~its Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure. ~~As of June 30, 2021 (the “Evaluation Date”), our~~

Our management, with the participation of ~~our Chief Executive Officer~~the CEO and ~~Chief Financial Officer,~~the CFO, evaluated the effectiveness of our disclosure controls and procedures (as defined in ~~Rules~~Rule 13a-15(e) ~~and~~or 15d-15(e) promulgated under the Exchange Act).

as of March 31, 2022. Based ~~upon their evaluation,~~on these evaluations, our ~~Chief Executive Officer~~CEO and ~~Chief Financial Officer~~the CFO concluded that our disclosure controls and procedures ~~are~~were effective as of ~~the Evaluation Date.~~

On April 12, 2021, the staff of the SEC issued an SEC Staff Statement (“the SEC Staff Statement”) in which the SEC Staff clarified its interpretations of certain generally accepted accounting principles related to warrants issued by Special Purpose Acquisition Companies (“SPACs”). Based on the clarifications expressed in the SEC Staff Statement which resulted in the restatement discussed in our Annual Report on Form 10-K/A for the year ended DecemberMarch 31, 2020, the Company’s management and the Chief Executive Officer and Chief Financial Officer concluded as of December 31, 2020, there was a material weakness in controls related to the classification and accounting for warrants issued by a SPAC, which did not operate effectively to appropriately apply the provisions of ASC 815.2022.

~~Remediation of Material Weakness~~Changes in Internal Control Over Financial Reporting

~~To remediate~~Our management is required to evaluate, with the ~~material weakness, the Company studied~~participation of our CEO and ~~clarified its understanding of the accounting of contracts that may be settled~~our CFO, any changes in the Company’s own stock, such as warrants, as equity of the entity or as an asset or liability as highlighted in the SEC Staff Statement, and implemented additional review procedures and enhanced its accounting policy related to the accounting for such contracts to determine proper accounting in accordance with GAAP as clarified by the SEC Staff Statement. Based on actions taken, as well as the evaluation of the design and operating effectiveness of these new controls, management believes that the material weakness has been remediated, subject to the ongoing evaluation of the design and operating effectiveness of these controls in connection with its annual assessment of internal control over financial reporting.

~~Changes~~ (as defined in ~~Internal Control over Financial Reporting~~

~~There has been no change in our internal control over financial reporting~~Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during ~~the~~each fiscal quarter ~~ended June 30, 2021 covered by this Quarterly Report on Form 10-Q~~ that ~~has~~ materially affected, or isare reasonably likely to materially affect, our internal control over financial ~~reporting other than the~~reporting. There were no changes ~~described above related to the material weakness related to the accounting for warrants issued by SPACs.~~

~~We have not experienced any material impact to~~in our internal ~~controls~~control over financial reporting ~~despite~~during the ~~fact~~quarter ended March 31, 2022 that ~~certain of our employees~~have materially affected, or are ~~working remotely due~~reasonably likely to ~~the COVID-19 pandemic. We are continually monitoring and assessing the COVID-19 situation and~~materially affect, our internal ~~controls to minimize any impact on their design and operating effectiveness.~~control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. We are not presently a party to any legal proceedings that, if determined adversely to us, we believe would individually or in the aggregate have a material adverse effect on our business, results of operations, financial condition or cash ~~flows~~flows.

Item 1A. Risk Factors.

Factors that could cause our actual results to differ materially from those in this Quarterly Report on Form 10-Q are any of the risks described in ~~Amendment No. 1 to~~ our Annual Report on Form ~~10-K/A~~10-K filed with the SEC on ~~May 7, 2021.~~March 31, 2022. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.

Except as set forth below, there have been no material changes from the risk factors previously disclosed under the heading “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on March 31, 2022.

We may incur non-cash impairment charges for our content assets, goodwill and other intangible assets which would negatively impact our operating results.

We regularly review our long-lived assets, including our content assets, goodwill and other finite-lived intangible assets for impairment. Goodwill is subject to impairment review on an annual basis and whenever potential impairment indicators are present. Other long-lived assets, including our content assets, and finite-lived intangible assets are reviewed when there is an indication that an impairment may have occurred.

As of March 31, 2022, we had a content assets carrying value of $78.1 million. We perform an impairment test for our content assets at least annually or when we observe indicators of impairment, including, among other things, a sustained decrease in the share price of our Common Stock and market capitalization. As of March 31, 2022, we had a goodwill balance of $2.8 million. We test goodwill for impairment at least annually or more frequently if indicators of impairment exist and other finite-lived intangible assets whenever events or changes in circumstances indicate that the varying value of the assets may not be recoverable. Impairment may result from, among other indicators, a decline in the share price of the Company or market capitalization and negative industry or economic trends.

As a result of a sustained decrease in our share price during the three months ended March 31, 2022, we concluded that a triggering event had occurred and conducted impairment testing of our content assets, goodwill and finite-lived intangible assets. Accordingly, we performed interim quantitative impairment testing at March 31, 2022 for our content assets, goodwill and finite-lived intangible assets, however, we determined that an impairment did not occur during the three months ended March 31, 2022.

In the period following March 31, 2022, there has been a further decline in our share price and market capitalization. If this decline is sustained for the following reporting period, this would require further testing of our content assets, goodwill or other finite-lived intangible assets, which may result in an impairment. The impairment of all or part of our content assets, goodwill or other finite-lived intangible assets may have a material adverse effect on our business, financial condition or results of operations. The amount of impairment determined reduces the carrying value of the asset and is expensed in that period as a charge to our results of operations. It is possible that we may never realize the full value of our intangible assets.

The fair value determinations underlying the quantitative aspect of our impairment testing require considerable judgment and are sensitive to changes in underlying assumptions, estimates and market factors. Estimating the fair value of our reporting unit and intangible assets requires us to make assumptions and estimates regarding our future plans, as well as industry, economic and regulatory conditions. If current expectations are not met, or if market factors outside of our control change significantly, then our reporting unit or intangible assets might become impaired in the future, adversely affecting our operating results and financial position. The carrying amounts of our content assets, goodwill and finite-lived intangible assets are susceptible to impairment risk if there are unfavorable changes in such assumptions, estimates and market factors. To the extent that business conditions deteriorate or key assumptions and estimates differ significantly from our management’s expectations, it may be necessary to recognize an impairment charge in the future.

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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

None.

Item 6. Exhibits

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

Incorporated By Reference

Exhibit No.

Description

Form

File No.

Exhibit

Filing Date

Filed/Furnished
Herewith

3.1

Second Amended and Restated Certificate of Incorporation

8-K

001-39139

3.1

10/15/2020

3.2

Amended and Restated Bylaws

8-K

001-39139

3.2

10/15/2020

31.1

Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*

Certification of the Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101. INS**

Inline XBRL Instance Document

101. SCH

Inline XBRL Taxonomy Extension Schema Document

101. CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101. LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101. PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

101. DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

104

Cover Page Interactive Data File (as formatted as Inline XBRL and contained in Exhibit 101)

~~Incorporated By Reference~~

~~Exhibit No.~~

~~Description~~

~~Form~~

~~File No.~~

~~Exhibit~~

~~Filing Date~~

Filed/Furnished
Herewith

~~31.1~~

~~Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~

~~31.2~~

~~Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~

32.1*

~~Certification of the Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~

101. INS**

~~Inline XBRL Instance Document~~

~~101. SCH~~

~~Inline XBRL Taxonomy Extension Schema Document~~

~~101. CAL~~

~~Inline XBRL Taxonomy Extension Calculation Linkbase Document~~

~~101. LAB~~

~~Inline XBRL Taxonomy Extension Label Linkbase Document~~

~~101. PRE~~

~~Inline XBRL Taxonomy Extension Presentation Linkbase Document~~

~~101. DEF~~

~~Inline XBRL Taxonomy Extension Definition Linkbase Document~~

~~104~~

~~Cover Page Interactive Data File (as formatted as Inline XBRL and contained in Exhibit 101)~~

This document is being furnished with this Form 10-Q. This certification is deemed not filed for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act, or the Exchange Act.

The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.

	CURIOSITYSTREAM INC.

Date: ~~August 13, 2021~~May 16, 2022	By:	/s/ Clint Stinchcomb
	Name:	Clint Stinchcomb
	Title:	President and Chief Executive Officer
		(Principal Executive ~~Officer~~Officer))

Date: ~~August 13, 2021~~May 16, 2022	By:	/s/ Jason Eustace
	Name:	Jason Eustace
	Title:	Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)

3529

~~0001776909 us-gaap:FairValueInputsLevel1Member 2020-12-31~~ iso4217:USD xbrli:shares

													Accumulated
										Additional			Other Comprehensive						Total Stockholders’
	Common Stock					Preferred Stock				Paid-in			Income			Accumulated			Equity
	Shares			Amount		Shares		Amount		Capital			(Loss)			Deficit			(Deficit)
Balance as of March 31, 2021		52,549		$	5		-	$	-	$	347,967		$	(444	)	$	(171,302	)	$	176,226
Net loss		-			-		-		-		-			-			(8,304	)		(8,304	)
Stock-based compensation, net		3			-		-		-		1,515			-			-			1,515
Exercise of Options		31			-		-		-		115			-			-			115
Other comprehensive loss		-			-		-		-		-			(769	)		-			(769	)
Balance as of June 30, 2021		52,583		$	5		-	$	-	$	349,597		$	(1,213	)	$	(179,606	)	$	168,783

Balance at December 31, 2020		40,289		$	4		-	$	-	$	197,507		$	10		$	(152,547	)	$	44,974
Net loss		-			-		-		-		-			-			(27,059	)		(27,059	)
Stock-based compensation, net		3			-		-		-		3,838			-			-			3,838
Issuance of Common Stock		7,475			1		-		-		94,100			-			-			94,101
Common Stock issuance costs		-			-		-		-		(707	)		-			-			(707	)
Exercise of Options		103			-		-		-		437			-			-			437
Exercise of Warrants		4,733			-		-		-		54,422			-			-			54,422
Cancellation of escrow shares		(20	)		-		-		-		-			-			-			-
Other comprehensive loss		-			-		-		-		-			(1,223	)		-			(1,223	)
Balance as of June 30, 2021		52,583		$	5		-	$	-	$	349,597		$	(1,213	)	$	(179,606	)	$	168,783

	Redeemable															Accumulated
	Convertible Series A												Additional			Other Comprehensive						Total Stockholders’
	Preferred Stock				Common Stock				Preferred Stock				Paid-in			Income			Accumulated			Equity
	Shares		Amount		Shares		Amount		Shares		Amount		Capital			(Loss)			Deficit			(Deficit)
Balance at March 31, 2020		18,383	$	159,411		13,165	$	1		-	$	-	$	-		$	(223	)	$	(107,210	)	$	(107,432	)
Net loss		-		-		-		-		-		-		-			-			(4,317	)		(4,317	)
Stock-based compensation		-		-		-		-		-		-		438			-			-			438
Redeemable convertible preferred stock adjustment to redemption value		-		4,354		-		-		-		-		(438	)		-			(3,916	)		(4,354	)
Other comprehensive loss		-		-		-		-		-		-		-			320			-			320
Balance at June 30, 2020		18,383	$	163,765		13,165	$	1		-	$	-	$	-		$	97		$	(115,443	)	$	(115,345	)

Balance at December 31, 2019		18,383	$	155,174		13,165	$	1		-	$	-	$	-		$	189		$	(91,506	)	$	(91,316	)
Net loss		-		-		-		-		-		-		-			-			(16,110	)		(16,110	)
Stock-based compensation		-		-		-		-		-		-		764			-			-			764
Redeemable convertible preferred stock adjustment to redemption value		-		8,591		-		-		-		-		(764	)		-			(7,827	)		(8,591	)
Other comprehensive loss		-		-		-		-		-		-		-			(92	)		-			(92	)
Balance at June 30, 2020		18,383	$	163,765		13,165	$	1		-	$	-	$	-		$	97		$	(115,443	)	$	(115,345	)

	As of June 30, 2021								As of December 31, 2020
	Cash and Cash		Short-term		Investments				Cash and Cash		Short-term		Investments
	Equivalents		Investments		(non-current)		Total		Equivalents		Investments		(non-current)		Total
Level 1 Securities
Money market funds	$	4,097	$	-	$	-	$	4,097	$	2,165	$	-	$	-	$	2,165
Government debt securities		-		27,722		7,999		35,721		5,999		12,892		-		18,891
Total Level 1 Securities		4,097		27,722		7,999		39,818		8,164		12,892		-		21,056

Level 2 Securities
Corporate debt securities		-		61,916		47,717		109,633		-		8,054		2,825		10,879
Municipal debt securities		-		2,849		-		2,849		-		1,225		-		1,225
Total Level 2 Securities		-		64,765		47,717		112,482		-		9,279		2,825		12,104
Total	$	4,097	$	92,487	$	55,716	$	152,300	$	8,164	$	22,171	$	2,825	$	33,160

	Three Months Ended June 30,								Six Months Ended June 30,
	2021				2020				2021				2020

Subscriptions – O&O Service	$	4,549	30	%	$	3,178	26	%	$	8,671	34	%	$	5,812	30	%
Subscriptions – App Services		1,131	7	%		889	7	%		1,886	7	%		1,706	9	%
Subscriptions – Total		5,680	37	%		4,067	33	%		10,557	41	%		7,518	39	%

License Fees – Affiliates		4,579	30	%		4,225	35	%		9,082	36	%		8,226	42	%
License Fees – Program Sales		5,031	33	%		3,753	32	%		5,517	23	%		3,768	19	%
License Fees – Total		9,610	63	%		7,978	67	%		14,599	59	%		11,994	61	%

Other – Total		54	0	%		4	0	%		124	0	%		4	0	%
Total Revenues	$	15,344			$	12,049			$	25,280			$	19,516

	Rest of year ending December 31,		For the twelve months ending December 31,
	2021		2022		2023		2024		2025		Thereafter		Total
Remaining Performance Obligations	$	10,650	$	8,365	$	1,271	$	108	$	13	$	98	$	20,505

Accounts receivable	$	35
Property and equipment		11
Content and intangibles		2,300
Goodwill		2,565
Accounts payable		(3	)
Deferred revenue		(408	)
	$	4,500

	Fair value		Estimated useful life (Years)

Content	$	1,000	4.2

Customer relationships		700	3.0
Trademark		500	6.5
Covenant-not-to-compete		100	3.0
Total intangibles		1,300

Total content and intangibles	$	2,300

		As of June 30, 2021
	Remaining Amortization Period (in years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount

Trademark	6.4	$	500	$	11	$	489
Covenant-not-to-compete	2.9		100		5		95
Customer relationships	2.9		700		31		669
Intangible assets, net		$	1,300	$	47	$	1,253

Warrant Type	Cash Exercise Price per Share		Warrants Outstanding 12/31/20		Warrants Exercised during the six months ended 06/30/21			Warrants Outstanding 06/30/21
Public Warrants (CURIW) and PIPE Warrants	$	11.50		7,786,589		(4,732,386	)		3,054,203
Private Placement	$	11.50		3,676,000		-			3,676,000
Total				11,462,589		(4,732,386	)		6,730,203

				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
Outstanding at December 31, 2020		2,538,648			4,710,717		$	7.06		413,277		$	9.21
Granted ⁽¹⁾		(584,024	)		207,398			15.96		376,626			14.74
Options exercised and RSUs vested		-			(103,572	)		4.06		(7,726	)		13.79
Forfeited or expired		87,214			(77,321	)		4.13		(9,893	)		11.56
Outstanding at June 30, 2021		2,041,838			4,737,222		$	7.50		772,284		$	11.83

	CuriosityStream rent		Sublease rental income			Net rent

Remainder of six months ending December 31, 2021		261		(26	)		235

Years Ending December 31,
2022		530		(53	)		477
2023		543		(54	)		489
2024		557		(56	)		501
2025		571		(57	)		514
Thereafter		4,531		(453	)		4,078

	$	6,993	$	(699	)	$	6,294