Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 10, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-38125 | |
Entity Registrant Name | CHICKEN SOUP FOR THE SOUL ENTERTAINMENT, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-2560811 | |
Entity Address, Address Line One | 132 East Putnam Avenue – Floor 2W | |
Entity Address, City or Town | Cos Cob | |
Entity Address, State or Province | CT | |
Entity Address, Postal Zip Code | 06807 | |
City Area Code | 855 | |
Local Phone Number | 398-0443 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001679063 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2023 | |
Amendment Flag | false | |
Class A Common Stock and Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 31,382,275 | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Class A Common Stock | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 23,727,769 | |
Trading Symbol | CSSE | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 7,654,506 | |
Common Stock Purchase Warrant | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock Purchase Warrant | |
Security Exchange Name | NASDAQ | |
Trading Symbol | CSSEL | |
9.75% Series A Cumulative Redeemable Perpetual Preferred Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 9.75% Series A Cumulative Redeemable Perpetual Preferred Stock | |
Security Exchange Name | NASDAQ | |
Trading Symbol | CSSEP | |
9.50% Notes Due 2025 | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 9.50% Notes Due 2025 | |
Security Exchange Name | NASDAQ | |
Trading Symbol | CSSEN | |
Class Z Warrants | ||
Document Information [Line Items] | ||
Title of 12(g) Security | Class Z Warrants | |
Trading Symbol | CSSEZ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
ASSETS | ||
Cash, cash equivalents and restricted cash | $ 6,917,111 | $ 18,738,395 |
Accounts receivable, net of allowance for doubtful accounts of $1,592,078 and $1,277,597, respectively | 159,316,288 | 113,963,425 |
Prepaid expenses and other current assets | 9,044,398 | 13,196,180 |
Operating lease right-of-use assets | 14,549,978 | 16,315,342 |
Content assets, net | 109,708,725 | 126,090,508 |
Intangible assets, net | 290,025,906 | 305,425,709 |
Goodwill | 261,322,774 | 260,748,057 |
Other assets, net | 27,714,084 | 29,401,793 |
Total assets | 878,599,264 | 883,879,409 |
LIABILITIES AND EQUITY | ||
Accounts payable | 65,156,863 | 50,960,682 |
Accrued expenses | 93,694,320 | 87,817,015 |
Due to affiliated companies | 4,022,477 | 3,778,936 |
Programming obligations | 58,228,000 | 55,883,788 |
Film library acquisition obligations | 30,189,206 | 39,750,121 |
Accrued participation costs | 46,333,084 | 28,695,713 |
Debt, net | 511,902,350 | 479,653,611 |
Contingent consideration | 6,866,449 | 7,311,949 |
Put option obligation | 4,400,000 | 11,400,000 |
Operating lease liabilities | 16,127,975 | 18,079,469 |
Other liabilities | 22,868,837 | 20,800,186 |
Total liabilities | 859,789,561 | 804,131,470 |
Commitments and contingencies (Note 15) | ||
Stockholders' Equity: | ||
Series A cumulative redeemable perpetual preferred stock, $.0001 par value, liquidation preference of $25.00 per share, 10,000,000 shares authorized; 5,556,605 and 4,496,345 shares issued and outstanding, respectively; redemption value of $138,915,125 and $112,408,625, respectively | 555 | 450 |
Additional paid-in capital | 396,992,240 | 355,185,280 |
Deficit | (350,061,978) | (247,752,446) |
Accumulated other comprehensive income | (70,969) | 47,528 |
Class A common stock held in treasury, at cost (2,422,842 and 2,422,842 shares, respectively) | (28,165,913) | (28,165,913) |
Total stockholders' equity | 18,697,280 | 79,317,224 |
Noncontrolling interests | 112,423 | 430,715 |
Total equity | 18,809,703 | 79,747,939 |
Total liabilities and equity | 878,599,264 | 883,879,409 |
Class A Common Stock | ||
Stockholders' Equity: | ||
Common stock value | 2,579 | 1,559 |
Class B Common Stock | ||
Stockholders' Equity: | ||
Common stock value | $ 766 | $ 766 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Accounts Receivable | $ 1,872,302 | $ 1,277,597 |
Series A Preferred Stock | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Preferred Stock, Liquidation Preference Per Share | $ 25 | $ 25 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 5,556,605 | 4,496,345 |
Preferred Stock, Shares Outstanding | 5,556,605 | 4,496,345 |
Preferred Stock, Redemption Amount | $ 138,915,125 | $ 112,408,625 |
Class A Common Stock | ||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 140,000,000 | 140,000,000 |
Common Stock, Shares, Issued | 26,003,931 | 15,621,562 |
Common Stock, Shares, Outstanding | 23,581,089 | 13,198,720 |
Treasury Stock, Common, Shares | 2,422,842 | 2,422,842 |
Class B Common Stock | ||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 20,000,000 | 20,000,000 |
Common Stock, Shares, Issued | 7,654,506 | 7,654,506 |
Common Stock, Shares, Outstanding | 7,654,506 | 7,654,506 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Condensed Consolidated Statements of Operations | ||||
Net revenues | $ 79,910,063 | $ 37,636,947 | $ 189,509,356 | $ 66,843,144 |
Costs and expenses | ||||
Operating | 65,285,767 | 31,596,524 | 161,592,135 | 54,171,932 |
Selling, general and administrative | 24,556,530 | 17,373,018 | 57,320,081 | 30,189,538 |
Amortization and depreciation | 10,995,085 | 1,680,443 | 22,178,802 | 3,328,701 |
Management and license fees | 4,926,349 | 3,763,695 | 12,778,490 | 6,684,315 |
Total costs and expenses | 105,763,731 | 54,413,680 | 253,869,508 | 94,374,486 |
Operating loss | (25,853,668) | (16,776,733) | (64,360,152) | (27,531,342) |
Interest expense | 17,901,099 | 2,022,770 | 34,567,358 | 3,333,229 |
Other non-operating income, net | (1,370,495) | (279,405) | (2,065,185) | (481,197) |
Loss before income taxes and preferred dividends | (42,384,272) | (18,520,098) | (96,862,325) | (30,383,374) |
Income tax provision | (1,898,687) | 14,000 | (684,536) | 34,000 |
Net loss before noncontrolling interests and preferred dividends | (40,485,585) | (18,534,098) | (96,177,789) | (30,417,374) |
Net loss attributable to noncontrolling interests | (76,942) | (142,350) | (204,604) | (180,735) |
Net loss attributable to Chicken Soup for the Soul Entertainment, Inc. | (40,408,643) | (18,391,748) | (95,973,185) | (30,236,639) |
Less: preferred dividends | 3,323,756 | 2,391,442 | 6,336,347 | 4,673,511 |
Net loss available to common stockholders | $ (43,732,399) | $ (20,783,190) | $ (102,309,532) | $ (34,910,150) |
Net loss per common share: | ||||
Basic | $ (1.50) | $ (1.39) | $ (4.07) | $ (2.30) |
Diluted | $ (1.50) | $ (1.39) | $ (4.07) | $ (2.30) |
Weighted-average common shares outstanding: | ||||
Basic | 29,171,223 | 14,950,458 | 25,163,744 | 15,152,222 |
Diluted | 29,171,223 | 14,950,458 | 25,163,744 | 15,152,222 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Condensed Consolidated Statements of Comprehensive Loss | ||||
Net loss | $ (40,485,585) | $ (18,534,098) | $ (96,177,789) | $ (30,417,374) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | (57,251) | (25,008) | (232,185) | (26,612) |
Comprehensive loss attributable to noncontrolling interests | 27,990 | 13,712 | 113,688 | 14,727 |
Comprehensive loss | $ (40,514,846) | $ (18,545,394) | $ (96,296,286) | $ (30,429,259) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) | Class A Common Stock Common Stock 1091 Media, LLC | Class A Common Stock Common Stock Landmark Studios Group | Class A Common Stock Common Stock Lincoln Park | Class A Common Stock Common Stock Director | Class A Common Stock Common Stock | Class A Common Stock Lincoln Park | Class B Common Stock Common Stock | Preferred Stock 1091 Media, LLC | Preferred Stock | Additional Paid-in Capital 1091 Media, LLC | Additional Paid-in Capital Lincoln Park | Additional Paid-in Capital Director | Additional Paid-in Capital | Deficit | Treasury Stock, Common [Member] | Accumulated Other Comprehensive Income (Loss) | Subsidiary convertible Preferred Stock | Noncontrolling Interests Locomotive Global Inc. | Noncontrolling Interests | Locomotive Global Inc. | 1091 Media, LLC | Lincoln Park | Total |
Balance at Dec. 31, 2021 | $ 899 | $ 766 | $ 370 | $ 240,609,345 | $ (136,462,244) | $ (13,202,407) | $ 571 | $ 651,853 | $ 91,599,153 | ||||||||||||||
Balance (in shares) at Dec. 31, 2021 | 8,964,330 | 7,654,506 | 3,698,318 | ||||||||||||||||||||
Share based compensation - stock options | 933,047 | 933,047 | |||||||||||||||||||||
Share based compensation - common stock | 63,750 | 63,750 | |||||||||||||||||||||
Issuance of common stock, net | $ 8 | ||||||||||||||||||||||
Issuance of common stock, net (in shares) | 84,000 | ||||||||||||||||||||||
Issuance of preferred stock, net | $ 5 | 1,288,734 | 1,288,739 | ||||||||||||||||||||
Issuance of preferred stock, net (in shares) | 52,060 | ||||||||||||||||||||||
Locomotive business combination / 1091 business combination / Redbox business combination | $ 38 | $ 8 | $ 5,283,705 | $ 144,118 | $ 144,118 | $ 5,283,751 | |||||||||||||||||
Locomotive business combination / 1091 business combination / Redbox business combination (in shares) | 375,000 | 80,000 | |||||||||||||||||||||
Acquisition of subsidiary noncontrolling interest | (2,200,008) | (2,200,000) | |||||||||||||||||||||
Purchase of treasury stock | (8,584,102) | (8,584,102) | |||||||||||||||||||||
Dividends on preferred stock | (2,282,069) | (2,282,069) | |||||||||||||||||||||
Net loss attributable to noncontrolling interest | (38,385) | (38,385) | |||||||||||||||||||||
Other comprehensive loss, net | (1,604) | (1,604) | |||||||||||||||||||||
Comprehensive loss attributable to noncontrolling interests | (1,015) | 1,015 | |||||||||||||||||||||
Net loss | (11,844,891) | (11,844,891) | |||||||||||||||||||||
Balance at Mar. 31, 2022 | $ 945 | $ 766 | $ 383 | 245,978,573 | (150,589,204) | (21,786,509) | (18) | 756,571 | 74,361,507 | ||||||||||||||
Balance (in shares) at Mar. 31, 2022 | 9,423,330 | 7,654,506 | 3,830,378 | ||||||||||||||||||||
Balance at Dec. 31, 2021 | $ 899 | $ 766 | $ 370 | 240,609,345 | (136,462,244) | (13,202,407) | 571 | 651,853 | 91,599,153 | ||||||||||||||
Balance (in shares) at Dec. 31, 2021 | 8,964,330 | 7,654,506 | 3,698,318 | ||||||||||||||||||||
Comprehensive loss attributable to noncontrolling interests | (14,727) | ||||||||||||||||||||||
Net loss | (30,236,639) | ||||||||||||||||||||||
Balance at Jun. 30, 2022 | $ 964 | $ 766 | $ 394 | 250,874,126 | (171,372,394) | (27,158,429) | (11,314) | 600,509 | 52,934,622 | ||||||||||||||
Balance (in shares) at Jun. 30, 2022 | 9,608,332 | 7,654,506 | 3,943,148 | ||||||||||||||||||||
Balance at Mar. 31, 2022 | $ 945 | $ 766 | $ 383 | 245,978,573 | (150,589,204) | (21,786,509) | (18) | 756,571 | 74,361,507 | ||||||||||||||
Balance (in shares) at Mar. 31, 2022 | 9,423,330 | 7,654,506 | 3,830,378 | ||||||||||||||||||||
Share based compensation - stock options | 894,108 | 894,108 | |||||||||||||||||||||
Share based compensation - common stock | 63,750 | 63,750 | |||||||||||||||||||||
Issuance of common stock, net | $ 16 | 1,120,403 | 1,120,419 | ||||||||||||||||||||
Issuance of common stock, net (in shares) | 155,871 | ||||||||||||||||||||||
Issuance of preferred stock, net | $ 11 | 2,727,469 | 2,727,480 | ||||||||||||||||||||
Issuance of preferred stock, net (in shares) | 112,770 | ||||||||||||||||||||||
Stock issued under ESPP | $ 1 | 89,825 | 89,826 | ||||||||||||||||||||
Stock issued under ESPP (in shares) | 12,133 | ||||||||||||||||||||||
Stock issued as payment for management and licensing fees | $ 2 | $ (2) | |||||||||||||||||||||
Stock issued as payment for management and licensing fees (in shares) | 16,998 | ||||||||||||||||||||||
Purchase of treasury stock | (5,371,920) | (5,371,920) | |||||||||||||||||||||
Dividends on preferred stock | (2,391,442) | (2,391,442) | |||||||||||||||||||||
Net loss attributable to noncontrolling interest | (142,350) | (142,350) | |||||||||||||||||||||
Other comprehensive loss, net | (25,008) | (25,008) | |||||||||||||||||||||
Comprehensive loss attributable to noncontrolling interests | 13,712 | (13,712) | (13,712) | ||||||||||||||||||||
Net loss | (18,391,748) | (18,391,748) | |||||||||||||||||||||
Balance at Jun. 30, 2022 | $ 964 | $ 766 | $ 394 | 250,874,126 | (171,372,394) | (27,158,429) | $ (11,314) | 600,509 | 52,934,622 | ||||||||||||||
Balance (in shares) at Jun. 30, 2022 | 9,608,332 | 7,654,506 | 3,943,148 | ||||||||||||||||||||
Balance at Dec. 31, 2022 | $ 1,559 | $ 766 | $ 450 | 355,185,280 | (247,752,446) | (28,165,913) | $ 47,528 | 430,715 | 79,747,939 | ||||||||||||||
Balance (in shares) at Dec. 31, 2022 | 15,621,562 | 7,654,506 | 4,496,345 | ||||||||||||||||||||
Share based compensation - stock options | 850,821 | 850,821 | |||||||||||||||||||||
Share based compensation - common stock | 63,750 | 63,750 | |||||||||||||||||||||
Issuance of common stock, net | $ 50 | $ 21 | $ 1,469,950 | 1,887,220 | $ 1,470,000 | 1,887,241 | |||||||||||||||||
Issuance of common stock, net (in shares) | 500,000 | 359,831 | |||||||||||||||||||||
Issuance of preferred stock, net | $ 61 | 10,657,221 | 10,657,282 | ||||||||||||||||||||
Issuance of preferred stock, net (in shares) | 617,182 | ||||||||||||||||||||||
Stock issued under ESPP | $ 18 | 156,773 | 156,791 | ||||||||||||||||||||
Stock issued under ESPP (in shares) | 8,703 | ||||||||||||||||||||||
Stock issued as payment for management and licensing fees | $ 113 | 3,449,887 | 3,450,000 | ||||||||||||||||||||
Stock issued as payment for management and licensing fees (in shares) | 1,131,148 | ||||||||||||||||||||||
Dividends on preferred stock | (3,012,591) | (3,012,591) | |||||||||||||||||||||
Net loss attributable to noncontrolling interest | (127,662) | (127,662) | |||||||||||||||||||||
Other comprehensive loss, net | (174,934) | (174,934) | |||||||||||||||||||||
Comprehensive loss attributable to noncontrolling interests | (85,698) | 85,698 | |||||||||||||||||||||
Net loss | (55,564,542) | (55,564,542) | |||||||||||||||||||||
Balance at Mar. 31, 2023 | $ 1,761 | $ 766 | $ 511 | 373,720,902 | (306,329,579) | (28,165,913) | (41,708) | 217,355 | 39,404,095 | ||||||||||||||
Balance (in shares) at Mar. 31, 2023 | 17,621,244 | 7,654,506 | 5,113,527 | ||||||||||||||||||||
Balance at Dec. 31, 2022 | $ 1,559 | $ 766 | $ 450 | 355,185,280 | (247,752,446) | (28,165,913) | 47,528 | 430,715 | 79,747,939 | ||||||||||||||
Balance (in shares) at Dec. 31, 2022 | 15,621,562 | 7,654,506 | 4,496,345 | ||||||||||||||||||||
Issuance of common stock, net (in shares) | 500,000 | ||||||||||||||||||||||
Comprehensive loss attributable to noncontrolling interests | (113,688) | ||||||||||||||||||||||
Net loss | (95,973,185) | ||||||||||||||||||||||
Balance at Jun. 30, 2023 | $ 2,579 | $ 766 | $ 555 | 396,992,240 | (350,061,978) | (28,165,913) | (70,969) | 112,423 | 18,809,703 | ||||||||||||||
Balance (in shares) at Jun. 30, 2023 | 26,003,931 | 7,654,506 | 5,556,605 | ||||||||||||||||||||
Balance at Mar. 31, 2023 | $ 1,761 | $ 766 | $ 511 | 373,720,902 | (306,329,579) | (28,165,913) | (41,708) | 217,355 | 39,404,095 | ||||||||||||||
Balance (in shares) at Mar. 31, 2023 | 17,621,244 | 7,654,506 | 5,113,527 | ||||||||||||||||||||
Share based compensation - stock options | 594,613 | 594,613 | |||||||||||||||||||||
Share based compensation - common stock | 63,750 | 63,750 | |||||||||||||||||||||
Issuance of common stock, net | $ 778 | 15,099,661 | 15,100,439 | ||||||||||||||||||||
Issuance of common stock, net (in shares) | 7,978,888 | ||||||||||||||||||||||
Issuance of preferred stock, net | $ 44 | 6,281,767 | 6,281,811 | ||||||||||||||||||||
Issuance of preferred stock, net (in shares) | 443,078 | ||||||||||||||||||||||
Stock issued as payment for management and licensing fees | $ 40 | 1,231,547 | 1,231,587 | ||||||||||||||||||||
Stock issued as payment for management and licensing fees (in shares) | 403,799 | ||||||||||||||||||||||
Dividends on preferred stock | (3,323,756) | (3,323,756) | |||||||||||||||||||||
Net loss attributable to noncontrolling interest | (76,942) | (76,942) | |||||||||||||||||||||
Other comprehensive loss, net | (57,251) | (57,251) | |||||||||||||||||||||
Comprehensive loss attributable to noncontrolling interests | 27,990 | (27,990) | (27,990) | ||||||||||||||||||||
Net loss | (40,408,643) | (40,408,643) | |||||||||||||||||||||
Balance at Jun. 30, 2023 | $ 2,579 | $ 766 | $ 555 | $ 396,992,240 | $ (350,061,978) | $ (28,165,913) | $ (70,969) | $ 112,423 | $ 18,809,703 | ||||||||||||||
Balance (in shares) at Jun. 30, 2023 | 26,003,931 | 7,654,506 | 5,556,605 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows | 6 Months Ended | |
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | |
Cash flows from Operating Activities: | ||
Net loss | $ (96,177,789) | $ (30,417,374) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Share-based compensation | 1,572,934 | 1,954,655 |
Content asset impairment and amortization | 40,438,142 | 15,145,637 |
Amortization of deferred financing and debt discount costs | 1,899,265 | 366,748 |
Amortization and depreciation of intangibles, property and equipment | 22,178,802 | 5,044,338 |
Bad debt and video return expense | 2,070,544 | 1,274,127 |
Non-cash settlement of management and licensing fees | 4,681,587 | |
Non-cash addition to long term debt | 27,716,581 | |
Deferred income taxes | (584,033) | |
Changes in operating assets and liabilities: | ||
Trade accounts receivable | (47,423,407) | (3,905,533) |
Prepaid expenses and other assets | 4,779,512 | (1,339,116) |
Content assets | (17,132,985) | (58,810,149) |
Accounts payable, accrued expenses and other payables | 18,738,083 | 8,406,731 |
Film library acquisition and programming obligations | (3,009,309) | 29,970,417 |
Accrued participation costs | 17,637,371 | 7,365,711 |
Other liabilities | 701,190 | 2,145,770 |
Net cash used in operating activities | (21,913,512) | (22,798,038) |
Cash flows from Investing Activities: | ||
Expenditures for property and equipment | (3,113,500) | (1,254,747) |
Business combination, net of cash acquired | (6,672,474) | |
Net cash used in investing activities | (3,113,500) | (7,927,221) |
Cash flows from Financing Activities: | ||
Principal payments on debt | (179,996) | |
Repurchase of common stock | (13,956,022) | |
Payment of contingent consideration | (445,500) | (5,054,700) |
Payment of put option obligation | (7,000,000) | |
Acquisition of noncontrolling interests | (750,000) | |
Payments on capital leases | (964,705) | |
Proceeds from 9.50% notes due 2025, net | 11,094,946 | |
Payments on film acquisition advances | (7,825,947) | |
Proceeds from issuance of preferred stock | 16,939,093 | 4,016,219 |
Proceeds from revolving loan | 5,406,518 | |
Proceeds from film acquisition advances | 10,129,999 | |
Increase (decrease) in due to affiliated companies | 243,541 | 2,655,577 |
Dividends paid to preferred stockholders | (6,123,040) | (4,623,833) |
Net cash provided (used) by financing activities | 13,437,913 | 9,948,953 |
Effect of foreign exchanges on cash, cash equivalents and restricted cash | (232,185) | (26,612) |
Net decrease in cash, cash equivalents and restricted cash | (11,821,284) | (20,802,918) |
Cash, cash equivalents and restricted cash at beginning of period | 18,738,395 | 44,286,105 |
Cash, cash equivalents and restricted cash at end of the period | 6,917,111 | 23,483,187 |
Supplemental data: | ||
Cash paid for interest | 3,092,790 | 2,634,140 |
Non-cash investing activities: | ||
Property and equipment in accounts payable and accrued expenses | 547,379 | 180,764 |
Non-cash financing activities: | ||
Class A common stock and additional consideration for acquisition of noncontrolling interest | 2,228,680 | |
Non-cash settlement of management and licensing fees | 4,681,587 | |
Non-cash film acquisition advance | 11,130,768 | 2,876,000 |
PIK interest increase in HPS debt | 27,716,581 | |
Class A Common Stock | ||
Cash flows from Financing Activities: | ||
Proceeds from issuance of Class A common stock | $ 18,614,471 | $ 1,210,245 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Parenthetical) | Jun. 30, 2023 | Jun. 30, 2022 | Jul. 17, 2020 |
9.50% Notes Due 2025 | |||
Reconciliation of cash and cash equivalents to the condensed consolidated balance sheets | |||
Interest rate (as a percent) | 9.50% | 9.50% | 9.50% |
Description of the Business
Description of the Business | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Business | Note 1 – Description of the Business Chicken Soup for the Soul Entertainment, Inc. is a Delaware corporation formed on May 4, 2016, that provides premium content to value conscious consumers. The Company is one of the largest advertising-supported video-on-demand (AVOD) companies in the U.S., with three flagship AVOD streaming services: Redbox, Crackle and Chicken Soup for the Soul. In addition, the company operates Redbox Free Live TV, a free ad-supported streaming television service (FAST), with approximately 180 channels as well as a transaction video-on-demand (TVOD) service. To provide original and exclusive content to its viewers, the company creates, acquires, and distributes films and TV series through its Screen Media and Chicken Soup for the Soul TV Group subsidiaries. Chicken Soup for the Soul Entertainment is a subsidiary of Chicken Soup for the Soul, LLC, which publishes the famous books series and produces super-premium pet food under the Chicken Soup for the Soul (CSS) brand name. References to “CSSE,” the “Company,” “we,” “us” and “our” refer to Chicken Soup for the Soul Entertainment, Inc. and its consolidated subsidiaries, unless the context otherwise requires. The acquisition of Redbox in August 2022 added another established brand and leading home entertainment provider to the Chicken Soup for the Soul Entertainment portfolio of companies. For some 20 years, Redbox has focused on providing U.S. customers with the best value in entertainment and the most choice in how they consume it, through physical media and/or digital services. Through its physical media business, consumers can rent or purchase new-release DVDs and Blu-ray DiscsTM from its nationwide network of approximately 28,500 self-service kiosks. In the recent past, Redbox transformed from a pure-play DVD rental company to a multi-faceted entertainment company, providing additional value and choice to consumers through multiple digital products across a variety of content windows. The Redbox digital business includes Redbox On Demand, a TVOD service offering digital rental or purchase of new release and catalog movies; Redbox Free On Demand, an AVOD service providing free movies and TV shows on demand; and Redbox Free Live TV, an FLTV service giving access to approximately 180 linear channels. Redbox also generates service revenue by providing installation, merchandising and break-fix services to other kiosk businesses, and by selling third-party display advertising via its mobile app, website, and e-mails, as well as display and video advertising at the kiosk. The Company is managed by the Company CEO Mr. William J. Rouhana, Jr, and has historically operated and reported as one segment the production and distribution of video content. The Company currently operates in the United States and India and derives its revenue primarily in the United States. The Company distributes content in over 56 countries and territories worldwide. Financial Condition and Liquidity As of June 30, 2023, the Company has a deficit of $350.1 million and for the three and six months ended June 30, 2023, the Company had a net loss attributable to common stockholders of $43.7 million and $102.3 million, respectively. The current cash position and available capital resources as compared to current obligations will require the Company to raise significant additional capital through one or more financing transactions if it experiences a delay in collecting its accounts receivable. Such financing transactions could include accounts receivable financing, asset sales, or sales of equity or debt, or a combination of the foregoing transactions. The Company believes that such transactions are available on commercially reasonable terms, and it is in active negotiations with respect to one or more such transactions. There can be no assurance, however, that the Company will be successful in consummating any such transaction for the net proceeds required or at all. Additionally, the Company has been actively involved in cost reduction initiatives to reduce forward operating expenses and to improve operational cash flow. Further, the parent company, CSS, has agreed that upon request of the board of directors, it will defer payment of any and all cash portions of the fees payable by us to CSS under the CSS Management Agreement and CSS License Agreement for up to 12 months. There can be no assurance that the efforts to reduce operating costs and other obligations, together with the capital raising initiatives, will prove successful overall. If the Company is not successful, it may need to curtail growth initiatives or certain operations and could suffer loss of certain content vendor and distribution relationships and other adverse consequences. The Company is also exploring strategic initiatives including certain asset sales or a strategic sale of the Company and the board of directors will be forming a strategic initiatives committee to evaluate transactions that management believes are currently available to our company. Based on the Company’s financial position at June 30, 2023, history of recurring losses and negative operational cash flows, along with debt maturities and interest payments in the next 12 months we reviewed the Company’s ability to continue as a going concern. Our forecasted cash flows indicated a short-fall in cash flows in the assessment period and thus management has alleviated that short-fall by accelerating the collection of long-dated receivables, obtained commitments to factor account receivables, put in place pans to further reduce future operating costs as well as, received a commitment from CSS, upon request of our board of directors, on relief of future cash management fees for up to 12 months. The combination of these, together with equity and/or debt financings, that we believe are available to us on commercially reasonable terms, will be adequate to meet our known operational cash needs over the next twelve months. The Company intends to continue to utilize several sources to raise capital including the following: ● in April 2023, the Company closed on an underwritten public offering of Class A common stock that provided net proceeds of $10.4 million, ● our At-The-Market equity offerings, including sale of Class A common and preferred shares, ● the Company entered a purchase commitment, and raised $1.5 million in March of 2023 with Lincoln Park Capital Fund, LLC who will purchase up to $50 million worth of our Class A common stock over a three-year period at the Company’s option, based on defined volume requirements and certain defined guidelines, ● the Company regularly engages in normal course content financings to fund a portion of its content distribution rights acquisitions through various financing partners, ● since the merger with Redbox, the Company continues to have the ability to PIK our interest payments under the HPS credit facility through February 11, 2024. Also, as permitted under the credit facility, the Company has the ability to enter into up to a $40 million dollar asset-based lending facility secured by our accounts receivable with HPS’s consent. Finally, the Company has the ability to factor accounts receivable and sell certain assets subject to defined terms under the credit agreement. The Company monitors its cash flow, working capital, capital base, operational spending, and leverage ratios with the long-term goal of maintaining our credit worthiness. If required to access debt or equity financing for our operating needs, the Company may incur additional debt and/or issue preferred stock or Class A common stock, which could serve to materially increase our liabilities and/or cause dilution to existing holders. There can be no assurance that the Company would be able to access debt or equity financing if required on a timely basis or at all or on terms that are commercially reasonable. If the Company should be required to obtain debt or equity financing and are unable to do so on the required terms, its operations and financial performance could be materially adversely affected. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Summary of Significant Accounting Policies | |
Basis of Presentation and Summary of Significant Accounting Policies | Note 2 – Basis of Presentation and Summary of Significant Accounting Policies The accompanying interim condensed consolidated financial statements of Chicken Soup for the Soul Entertainment, Inc. and subsidiaries have been prepared in conformity with accounting principles generally accepted in the United States and are consistent in all material respects with those applied in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2023. These condensed consolidated financial statements are unaudited and have been prepared by the Company following the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted as permitted by such rules and regulations; however, the Company believes the disclosures are adequate to make the information presented not misleading. The interim financial information is unaudited, but reflects all normal recurring adjustments that are, in the opinion of management, necessary to fairly present the information set forth herein. The interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Interim results are not necessarily indicative of the results for a full year. The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant items subject to such estimates and assumptions include revenue recognition, estimated film ultimate revenues, allowance for doubtful accounts, intangible assets, share-based compensation expense, valuation allowance for net deferred income taxes and amortization of programming and film library costs. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. On a regular basis, the Company evaluates the assumptions, judgments, and estimates. Actual results may differ from these estimates. There have been no material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Reclassifications Certain amounts have been reclassified to conform to the current period’s presentation. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents include restricted cash of $3.4 million at June 30, 2023 and $3.7 million at December 31, 2022. See Note 11 for additional information. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization. Expenditures that extend the life, increase the capacity, or improve the efficiency of property and equipment are capitalized, while expenditures for repairs and maintenance are expensed as incurred. Depreciation and amortization are recognized using the straight-line method over the following approximate useful lives: Useful Life Redbox kiosks and components 3 Computers and software 2 Leasehold improvements (shorter of life of asset or remaining lease term) 3 Office furniture and equipment 5 Vehicles 3 The value of the Company’s property and equipment as of June 30, 2023 and December 31, 2022 is included in Other assets, net on the Consolidated Balance Sheets and is as follows (in thousands): June 30, December 31, 2023 2022 Redbox kiosks and components $ 13,200,210 $ 13,707,512 Computers and software 18,190,174 13,857,011 Leasehold improvements (shorter of life of asset or remaining lease term) 5,119,077 5,119,077 Office furniture and equipment 1,287,104 1,287,104 Vehicles 2,850,275 2,747,604 Property and equipment, at cost 40,646,840 36,718,308 Accumulated depreciation and amortization (17,197,547) (11,570,457) Property and equipment, net $ 23,449,293 $ 25,147,851 Internal-Use Software The Company capitalizes costs incurred to develop or obtain internal-use software during the application development stage. Capitalization of software development costs occurs after the preliminary project stage is complete, management authorizes the project, and it is probable that the project will be completed, and the software will be used for the function intended. The Company expenses costs incurred for training, data conversion, and maintenance, as well as spending in the post-implementation stage. A subsequent addition, modification or upgrade to internal-use software is capitalized only to the extent that it enables the software to perform a task it previously could not perform. The internal-use software is included in computers and software under property and equipment in the Company’s Consolidated Balance Sheets. The Company amortizes internal-use software over its estimated useful life on a straight-line basis. Assumed Redbox Warrant Liabilities The Company classified its Redbox public and private placement warrants as a liability at their fair value. This liability is subject to remeasurement at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s Statements of Operations in Other non-operating income, net. The public warrants are valued at a market price based on a quoted price in an active market. As both the public and private warrants have mostly the same characteristics the quoted price is used to remeasure all of the warrants. See Note 16 for additional information. Asset Retirement Obligations The asset retirement obligation (“ARO”) represents the estimated amounts the Company is obligated to pay to return the space a kiosk occupies to its original condition upon removal of a kiosk. The Company utilizes current retirement costs to estimate the expected cash outflows for retirement obligations. The timing of kiosk removals cannot be reasonably determined. The Company’s $12.6 million of ARO liabilities are included in Other liabilities on the Consolidated Balance Sheets. Promotional Codes and Gift Cards Redbox offers its consumers the option to purchase stored value products in the form of bulk promotional codes and electronic gift cards. There are no expiration dates on these products and the Company does not charge service fees that cause a decrement to customer balances in the case of gift cards. Cash receipts from the sale of promotional codes and gift cards are recorded as deferred revenue in Accrued expenses and recognized as revenue upon redemption. Additionally, the Company recognizes revenue from non-redeemed or partially redeemed promotional codes and gift cards in proportion to the historical redemption patterns, referred to as “breakage.” Estimated breakage revenue is recognized over time in proportion to actual promotional code and gift card redemptions and is not material in any period presented. As of June 30, 2023 and December 31, 2022, $7.4 million and $7.3 million, respectively, were deferred related to purchased but unredeemed promotional codes and gift cards and are included in Accrued expenses in the accompanying Consolidated Balance Sheets. Loyalty Program Redbox Perks allows members to earn points based on transactional and non-transactional activities with Redbox. As customers accumulate points, the Company defers revenue based on its estimate of both the amount of consideration paid by Perks members to earn awards and the value of the eventual award it expects the members to redeem. The Company defers an appropriate amount of revenue in order to properly recognize revenue from Perks members in relation to the benefits of the program. The Company also estimates the quantity of points that will not be redeemed by Perks members (“breakage”). Breakage reduces the amount of revenue deferred from loyalty points over the period of, and in proportion to, the actual redemptions of loyalty points based on observed historical breakage and consumer rental patterns. As of June 30, 2023 and December 31, 2022, $2.0 million and $2.3 million, respectively, of revenue was deferred related to Perks and is included in Accrued expenses in the accompanying Consolidated Balance Sheets. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Note 3 – Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which requires an entity to assess impairment of its financial instruments based on its estimate of expected credit losses. Since the issuance of ASU 2016-13, the FASB released several amendments to improve and clarify the implementation guidance. The provisions of ASU 2016-13 and the related amendments are effective for fiscal years (and interim reporting periods within those years) beginning after December 15, 2022 (fiscal year 2023 for the Company). Entities are required to apply these changes through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The adoption did not have a direct material impact on our financial statements. In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU 2021-08”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers. The adoption did not have an immediate direct impact on our financial statements. Recently Issued Accounting Standards In June 2022, the FASB issued ASU No. 2022-03, “Fair Value Measurements (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions,” which clarifies and amends the guidance of measuring the fair value of equity securities subject to contractual restrictions that prohibit the sale of the equity securities. The guidance will be effective for fiscal years beginning after December 15, 2023 and interim periods within those fiscal years. We do not expect the adoption to have a material impact on our consolidated financial statements. The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the condensed consolidated financial statements. |
Business Combination
Business Combination | 6 Months Ended |
Jun. 30, 2023 | |
Business Combinations [Abstract] | |
Business Combination | Note 4 – Business Combinations Merger with Redbox Entertainment Inc . On August 11, 2022, the Company acquired all the outstanding equity interests of Redbox. Immediately prior to the merger closing, CSSE entered into a definitive financing arrangement with HPS Investment Partners, LLC (“HPS”), that amended Redbox’s existing credit facility and the Company issued a warrant to HPS to acquire 4.5% of CSSE on a fully diluted post-merger basis. See Note 11 and Note 16 for additional information. On closing of the merger, based on the exchange rate of 0.087 for each outstanding Redbox Class A common share, each vested and unvested restricted stock units and the common units of Redbox’s Redwood Intermediate LLC subsidiary, the Company issued an aggregate of approximately 4.7 million shares of Class A common stock and assumed the outstanding warrants of Redbox. Included in the Class A common stock were 199,231 shares issued in connection with the acceleration and settlement of outstanding Redbox’s restricted stock units, or RSUs. The preliminary fair value of the Redbox RSUs was $2.9 million, of which $0.7 million was associated with services rendered prior to the acquisition and the remaining $2.2 million was expensed upon the acceleration of vesting immediately following the completion of the acquisition. The results of operations and financial position of Redbox are included in the Company’s consolidated financial statements from the date of acquisition. The Company’s transaction costs of $17.5 million were expensed as incurred in the merger and transaction costs on the Consolidated Statement of Operations for the year ended December 31, 2022. The transaction was accounted for as a business combination. The purchase price consideration is determined with reference to the value of equity that the Company issued to the Redbox shareholders. The preliminary purchase price was calculated as follows (in thousands): Class A common stock $ 65,828,719 Class A common stock issued upon vesting of Redbox RSUs 703,244 Class A common stock warrants issued to Redbox warrant holders 3,473,185 Total merger consideration $ 70,005,148 The acquisition of Redbox has been accounted for using the acquisition method of accounting, which requires that assets acquired, and liabilities assumed be recognized at their fair values as of the acquisition date. The following table summarizes the preliminary allocation of the purchase price to the assets acquired and liabilities assumed as of the acquisition date and subject to change up to one year after the date of acquisition and could result in changes to the amounts recorded below: Assets acquired: Cash, cash equivalents and restricted cash $ 12,921,550 Accounts receivable 17,629,843 Content library 21,241,822 Prepaid expenses and other assets 16,448,641 Property and equipment 15,504,940 Right-of-use assets 7,183,735 Intangible assets (1) 291,200,000 Goodwill 215,859,533 Total assets acquired 597,990,064 Liabilities assumed: Debt 359,854,921 Accounts payable and accrued expenses 91,809,662 Operating lease liabilities 7,183,736 Financing lease liabilities 2,241,304 Other liabilities 66,895,293 Total liabilities assumed 527,984,916 Net assets acquired $ 70,005,148 (1) The weighted-average useful life of the intangible assets acquired is approximately 14 years . The above allocation of the purchase price is based upon certain preliminary valuations and other analyses that have not been completed as of the date of this filing. Any changes in the estimated fair values of the net assets recorded for this business combination upon the finalization of more detailed analyses of the facts and circumstances that existed at the date of the transaction will change the allocation of the purchase price. As such, the purchase price allocations for this transaction are preliminary estimates, which are subject to change within the measurement period. The identifiable intangible assets included customer relationships, technology and trade names and are being amortized on a straight-line basis ranging from 3 years to 15 years . The valuation methods require several judgments and assumptions to determine the fair value of intangible assets, including growth rates, discount rates, customer attrition rates, expected levels of cash flows, and tax rate. Key assumptions used included revenue projections for fiscal 2022 through 2037, a tax rate of 25% , a discount rate of 11% - 12% , and a royalty rate of 2% . The technology intangible asset was valued using the estimated replacement cost method. Goodwill is attributable to the workforce of Redbox as well as expected future growth into new and existing markets and approximately $7.9 million is deductible for income tax purposes. Unaudited Pro Forma Financial Information The following table reflects the pro forma operating results for the Company which gives effect to the acquisition of Redbox as if it had occurred on January 1, 2022. The pro forma results are based on assumptions that the Company believes are reasonable under the circumstances. The pro forma results are not necessarily indicative of future results. The pro forma financial information includes the historical results of the Company and Redbox adjusted for certain items, which are described below, and does not include the effects of any synergies or cost reduction initiatives related to the acquisition. Three Months Ended Six Months Ended June 30, 2022 June 30, 2022 Net revenue $ 103,631,039 $ 196,064,236 Net loss $ (69,284,040) $ (110,816,000) Pro forma net loss for the three and six months ended June 30, 2022 reflect adjustments primarily related to acquisition costs, interest expense, the amortization of intangible assets and stock-based compensation expense. The unaudited pro forma financial information is not necessarily indicative of what the Company’s consolidated results would have been if the acquisition had been completed at the beginning of the period. 1091 Pictures Acquisition On March 4, 2022, the Company consummated its acquisition of certain of the assets of 1091 Media, LLC , including all of the outstanding equity of its operating subsidiary, TOFG LLC, which does business under the name 1091 Pictures (“1091 Pictures”). 1091 Pictures provides full-service distribution services to film and series owners, including access to platforms that reach more than 100 countries, and related marketing support, and has a library of approximately 4,000 licensed films and television shows. The Company paid consideration of $13,283,750 through the payment of $8,000,000 in cash, the issuance of 375,000 shares of the Company’s Class A common stock and the issuance of 80,000 shares of the Company’s Series A preferred stock. The Company has allocated the purchase price to the identifiable net assets acquired, including intangible assets and liabilities assumed, based on the estimated fair values at the date of acquisition. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities was recorded as goodwill. The allocation of the purchase price to the fair values of the assets acquired and liabilities assumed at the date of the acquisition was as follows: Accounts receivable, net $ 4,677,133 Content assets 4,695,000 Other assets 49,347 Intangibles 2,810,000 Goodwill 5,476,711 Total assets acquired 17,708,191 Accounts payable and accrued expenses 129,244 Revenue share payable 1,623,177 Accrued third-party share 3,999,544 Total liabilities assumed 5,751,965 Net assets acquired $ 11,956,226 Cash consideration $ 8,000,000 Equity consideration - Class A common stock 3,303,750 Equity consideration - Series A Preferred Stock 1,980,000 Purchase price consideration 13,283,750 Less: cash acquired (1,327,524) Total Estimated Purchase Price $ 11,956,226 The $2,810,000 of acquired intangibles represents the estimated fair value of the quality control certification process, trademarks, technology and noncompete agreements. These definite lived intangible assets are being amortized on a straight-line basis over their estimated useful life of 24 Financial Impact of Acquisitions The following tables illustrate the stand-alone financial performance attributable to acquisitions included in the Company’s condensed consolidated statement of operations: Three Months Ended June 30, 2023 Redbox 1091 Total Net revenue $ 42,943,214 $ 6,523,948 $ 49,467,162 Net income (loss) $ (25,023,177) $ 1,119,144 $ (23,904,033) Three Months Ended June 30, 2022 Redbox 1091 Total Net revenue $ — $ 4,843,063 $ 4,843,063 Net income (loss) $ — $ (268,973) $ (268,973) Six Months Ended June 30, 2023 Redbox 1091 Total Net revenue $ 86,267,798 $ 18,093,763 $ 104,361,561 Net income (loss) $ (53,218,360) $ 3,433,557 $ (49,784,803) Six Months Ended June 30, 2022 Redbox 1091 Total Net revenue $ - $ 6,255,235 $ 6,255,235 Net income (loss) $ - $ (221,659) $ (221,659) |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2023 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | Note 5 – Revenue Recognition The following table disaggregates our revenue by source: Three Months Ended June 30, % of % of 2023 revenue 2022 revenue Revenue: VOD and streaming $ 31,723,589 40 % $ 29,510,365 78 % Retail 30,960,409 38 % — 0 % Licensing and other 17,226,065 22 % 8,126,582 22 % Net revenue $ 79,910,063 100 % $ 37,636,947 100 % Six Months Ended June 30, % of % of 2023 revenue 2022 revenue Revenue: VOD and streaming $ 66,335,175 35 % $ 50,857,728 76 % Retail 63,219,863 33 % — 0 % Licensing and other 59,954,318 32 % 15,985,416 24 % Net revenue $ 189,509,356 100 % $ 66,843,144 100 % VOD and streaming VOD and streaming revenue is generated as the Company exhibits content through the Crackle Plus and Redbox streaming services including AVOD, FAST and TVOD platforms available via connected TV’s, smartphones, tablets, gaming consoles and the web through our owned and operated platforms, as well as third-party platforms. The Company generates streaming revenues for our networks in three primary ways, selling advertisers video ad inventory on our AVOD and FAST streaming services, selling advertisers the ability to present content to our viewers, often with fewer commercials, and selling advertisers product and content integrations and sponsorships related to our original productions, as well as revenues from our direct-to-consumer TVOD platform. In addition, this revenue source includes third-party streaming platform license revenues, including TVOD, AVOD, FAST and SVOD related revenues. Retail Revenue from Redbox movie rentals is recognized for the period that the movie is rented and is recorded net of promotional discounts offered to the Company’s consumers, uncollected amounts and refunds that it grants to its customers. The sale of previously rented movies out of our kiosks is recognized at the time of sale. On rental transactions for which the related movie has not yet been returned to the kiosk at month-end, revenue is recognized with a corresponding receivable recorded in the balance sheet, net of a reserve for potentially uncollectable amounts that is considered a reduction from gross revenue as collectability is not reasonably assured. Licensing and other Licensing and other revenue included in this revenue source is generated as the Company licenses movies and television series worldwide, through Screen Media Ventures and 1091 Pictures, through license agreements across channels, including theatrical and home video. Additionally, Licensing and other also includes the sale of content, other revenue related to the Company’s intellectual property, and content services revenue, including development, non-writing executive producer fees and production services. Contract balances include the following: June 30, December 31, 2023 2022 Accounts receivable, net $ 33,453,692 $ 39,467,049 Contract assets (included in accounts receivable) 125,862,596 74,496,376 Total accounts receivable, net $ 159,316,288 $ 113,963,425 Deferred revenue (included in accrued expenses) $ (15,944,129) $ (12,043,508) During the three months ending June 30, 2023, customer A represented 31% of the total revenue. During the six months ending June 30, 2023, customers A and B represented 13% and 22% of the total revenue, respectively. As of June 30, 2023 customers A and B represented 15% and 26%, respectively, of the total accounts receivable, net. As of December 31, 2022 customers C and D represented 14% and 12%, respectively, of the total accounts receivable, net. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Compensation [Abstract] | |
Share-Based Compensation | Note 6 – Share-Based Compensation Effective January 1, 2017, the Company adopted the 2017 Long Term Incentive Plan (the “Plan”) to attract and retain certain employees. The Plan provides for the issuance of up to 5,000,000 common stock equivalents, inclusive of an additional 2,500,000 shares authorized by the shareholders of the Company on June 30, 2022, subject to the terms and conditions of the Plan. The Plan generally provides for quarterly and bi-annual vesting over terms ranging from two three years The Company recognizes stock options granted under the Plan at fair value determined by applying the Black Scholes options pricing model to the grant date market value of the underlying common shares of the Company. The compensation expense associated with these stock options is amortized on a straight-line basis over their respective vesting periods. For the three months ended June 30, 2023 and 2022, the Company recognized $594,613 and $894,108, respectively, and for the six months ended June 30, 2023 and 2022, the Company recognized $1,445,434 and $1,827,155, respectively, of non-cash share-based compensation expense in selling, general and administrative expenses in the condensed consolidated statements of operations. Stock options activity through June 30, 2023 is as follows: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contract Intrinsic Stock Options Price Term (Yrs.) Value Outstanding at December 31, 2022 1,511,046 $ 14.89 3.15 $ — Granted — — — — Forfeited (37,000) 19.27 — — Exercised — — — — Expired — — — — Outstanding at June 30, 2023 1,474,046 $ 14.62 2.64 $ — Vested and exercisable at December 31, 2022 889,623 $ 14.02 2.62 $ — Vested and exercisable at June 30, 2023 1,053,417 $ 14.35 2.31 $ — As of June 30, 2023 the Company had unrecognized pre-tax compensation expense of $3,419,758 related to non-vested stock options under the Plan of which $1,540,470, $1,709,556, and $169,732 will be recognized in 2023, 2024 and 2025, respectively. We used the following weighted average assumptions to estimate the fair value of stock options granted for the periods presented as follows: Six Months Ended June 30, Weighted Average Assumptions: 2023 (a) 2022 Expected dividend yield — % — % Expected equity volatility — % 68.3 % Expected term (years) — 5 Risk-free interest rate — % 2.62 % Exercise price per stock option $ — $ 8.83 Market price per share $ — $ 8.83 Weighted average fair value per stock option $ — $ 4.95 (a) There were no stock options granted during the six months ended June 30, 2023. The risk-free rates are based on the implied yield available on U.S. Treasury constant maturities with remaining terms equivalent to the respective expected terms of the options. The Company estimates expected terms for stock options awarded to employees using the simplified method in accordance with ASC 718, Stock Compensation, The Company also awards common stock under the Plan to directors, employees and third-party consultants that provide services to the Company. The value is based on the market price of the stock on the date granted and amortized over the vesting period. For the three months ended June 30, 2023 and 2022, the Company recognized in selling, general and administrative expense, non-cash share-based compensation expense relating to common stock grants of $63,750. For the six months ended June 30, 2023 and 2022, the Company recognized in selling, general and administrative expense, non-cash share-based compensation expense relating to common stock grants of $127,500. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 7 – Earnings Per Share Basic earnings (loss) per share is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share is computed by dividing the net income (loss) available to common stockholders by the weighted-average number of common shares outstanding and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares include stock options and warrants outstanding during the period, using the treasury stock method. Potentially dilutive common shares are excluded from the computations of diluted earnings per share if their effect would be anti-dilutive. A net loss available to common stockholders causes all potentially dilutive securities to be anti-dilutive and are not included. There were no anti-dilutive stock options or warrants for the three and six month periods ending June 30, 2023. Basic and diluted loss per share is computed as follows: Three Months Ended June 30, 2023 2022 Net loss available to common stockholders $ (43,732,399) $ (20,783,190) Basic weighted-average common shares outstanding 29,171,223 14,950,458 Dilutive effect of options and warrants — — Weighted-average diluted common shares outstanding 29,171,223 14,950,458 Basic and diluted loss per share $ (1.50) $ (1.39) Six Months Ended June 30, 2023 2022 Net loss available to common stockholders $ (102,309,532) $ (34,910,150) Basic weighted-average common shares outstanding 25,163,744 15,152,222 Dilutive effect of options and warrants — — Weighted-average diluted common shares outstanding 25,163,744 15,152,222 Basic and diluted loss per share $ (4.07) $ (2.30) |
Content Assets, net
Content Assets, net | 6 Months Ended |
Jun. 30, 2023 | |
Content Assets [Abstract] | |
Content Assets, net | Note 8 – Content Assets, net Content assets, net consists of the following: June 30, December 31, 2023 2022 Original productions: Programming costs released $ 31,164,062 $ 31,081,500 In production 1,711,071 806,009 In development 9,360,440 8,377,649 Accumulated amortization (a) (32,458,465) (31,651,552) Programming costs, net 9,777,108 8,613,606 Film library: Film library acquisition costs 222,145,902 208,982,878 Accumulated amortization (b) (151,066,417) (125,967,305) Film library costs, net 71,079,485 83,015,573 Licensed program rights: Programming rights 65,211,646 56,288,723 Accumulated amortization (36,359,514) (21,827,394) Programming rights, net 28,852,132 34,461,329 Content assets, net $ 109,708,725 $ 126,090,508 (a) (b) Original productions programming costs consist primarily of episodic television programs which are available for distribution through a variety of platforms, including Crackle. Amounts capitalized include development costs, production costs and direct production overhead costs. Film library consists primarily of the cost of acquiring film distribution rights and related acquisition costs. Costs related to original productions and film library are amortized in the proportion that revenues bear to management’s estimates of the ultimate revenues expected to be recognized from various forms of exploitation. Programming rights consists of licenses to various titles which the Company makes available for streaming on Crackle and Redbox’s kiosks and streaming services for an agreed upon license period. Amortization of content assets is as follows: Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 Original productions $ 316,794 $ 760,109 $ 806,913 $ 2,917,904 Film library 2,045,465 7,807,244 21,457,510 13,743,925 Licensed program rights 7,183,681 170,052 14,532,120 26,091 Content asset impairment — — 3,641,602 — Total content asset amortization $ 9,545,940 $ 8,737,405 $ 40,438,145 $ 16,687,920 During the three and six months ended June 30, 2023 the Company recorded content impairments of $3,641,602. During the three and six months ended June 30, 2022, the Company did not record any impairments related to content assets. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Note 9 – Intangible Assets and Goodwill Intangible assets, net, consists of the following: Gross Net Carrying Accumulated Carrying Amount Amortization Impairment Amount June 30, 2023: Crackle Plus content rights $ 1,708,270 $ 1,708,270 $ - $ - Crackle Plus brand value 18,807,004 11,082,700 - 7,724,304 Crackle Plus partner agreements 4,005,714 3,304,714 - 701,000 Distribution network 3,600,000 2,500,000 - 1,100,000 Locomotive contractual rights 1,206,870 685,622 - 521,248 1091 intangible assets 2,810,000 1,377,778 - 1,432,222 Redbox - Trade names and trademarks 82,700,000 4,824,167 - 77,875,833 Redbox - Technology 30,800,000 3,850,000 - 26,950,000 Redbox - Customer Relationships 177,700,000 12,276,250 - 165,423,750 Popcornflix brand value 7,163,943 366,394 3,500,000 3,297,549 Total definite lived intangibles 330,501,801 41,975,895 3,500,000 285,025,906 Chicken Soup for the Soul Brand 5,000,000 - - 5,000,000 Total indefinite lived intangibles 5,000,000 - - 5,000,000 Total $ 335,501,801 $ 41,975,895 $ 3,500,000 $ 290,025,906 December 31, 2022: Crackle Plus content rights $ 1,708,270 $ 1,708,270 $ — $ — Crackle Plus brand value 18,807,004 9,739,341 — 9,067,663 Crackle Plus partner agreements 4,005,714 2,904,143 — 1,101,571 Distribution network 3,600,000 1,900,000 — 1,700,000 Locomotive contractual rights 1,206,870 484,477 — 722,393 1091 intangible assets 2,810,000 861,111 — 1,948,889 Redbox - Trade names and trademarks 82,700,000 2,067,500 — 80,632,500 Redbox - Technology 30,800,000 1,650,000 — 29,150,000 Redbox - Customer Relationships 177,700,000 5,261,250 — 172,438,750 Popcornflix brand value 7,163,943 — 3,500,000 3,663,943 Total definite lived intangibles 330,501,801 26,576,092 3,500,000 300,425,709 Chicken Soup for the Soul Brand 5,000,000 — — 5,000,000 Total indefinite lived intangibles 5,000,000 — — 5,000,000 Total $ 335,501,801 $ 26,576,092 $ 3,500,000 $ 305,425,709 Amortization expense was $7.8 million and $1.7 million for the three months ended June 30, 2023 and 2022, respectively, and $15.4 million and 3.2 million for the six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023 amortization expense for the next five years is expected be: Remainder of 2023 $ 15,399,802 2024 29,275,033 2025 27,124,226 2026 24,716,973 2027 23,709,455 Beyond 164,800,417 Total $ 285,025,906 Total goodwill on our Condensed Consolidated Balance Sheets was $261.3 million and $260.7 million as of June 30, 2023 and December 31, 2022, respectively, and is comprised of the following: June 30, 2023 Online Networks Distribution & Production Redbox Beginning balance $ 18,911,027 $ 26,552,214 $ 215,284,816 Adjustments — — 574,717 Total $ 18,911,027 $ 26,552,214 $ 215,859,533 December 31, 2022 Online Networks Distribution & Production Redbox Beginning balance $ 18,911,027 $ 21,075,503 $ — Acquisitions — 5,476,711 215,284,816 Total $ 18,911,027 $ 26,552,214 $ 215,284,816 The Company is still assessing the goodwill allocation associated with its acquisition of Redbox between its reporting units. There was no impairment recorded related to goodwill and intangible assets in the six months ended June 30, 2023 and 2022, respectively. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Leases | Note 10 – Leases At June 30, 2023, the following amounts were recorded on the Condensed Consolidated Balance Sheets relating to our operating and finance leases. June 30, December 31, 2023 2022 Right-of-Use Assets Operating lease right-of-use assets $ 14,549,978 $ 16,315,342 Lease Liabilities: Operating lease liabilities $ 16,127,975 $ 18,079,469 Finance Lease cost Amortization of right-of-use assets $ 997,195 $ 827,191 Interest of lease liabilities 59,238 35,633 Total finance lease cost $ 1,056,433 $ 862,824 June 30, December 31, 2023 2022 Operating leases Weighted average remaining lease term 5.6 years 5.9 years Weighted average discount rate 7% 7% Finance Leases Weighted average remaining lease term 2.3 years 1.1 years Weighted average discount rate 5% 4% As our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at the lease commencement date. Upon transition to ASC Topic 842, the Company used the incremental borrowing rate on January 1, 2022 for all operating leases that commenced prior to that date. We have operating leases primarily for office space. Lease costs are generally fixed, with certain contracts containing escalations in the lessors’ annual costs. For the three months ended June 30, 2023, and 2022, rent expense including short-term leases was $1.7 million and $0.8 million, respectively, and $3.5 million and $1.3 million, for the six months ended June 30, 2023 and 2022, respectively. Cash paid for amounts included in operating lease liabilities was $2.6 million as of June 30, 2023. The expected future payments relating to our operating and finance lease liabilities at June 30, 2023 are as follows: Operating Financing Remainder of 2023 $ 2,397,348 $ 539,908 2024 4,195,546 1,017,604 2025 3,675,921 762,930 2026 2,104,048 415,065 2027 1,643,022 3,316 Thereafter 5,230,326 — Total minimum payments 19,246,211 2,738,823 Less amounts representing interest 3,118,236 206,497 Present value of minimum payments $ 16,127,975 $ 2,532,326 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Note 11 – Debt Debt, net for the periods presented was as follows: June 30, December 31, 2023 2022 HPS term $ 357,576,139 $ 335,342,705 HPS revolving loan 87,845,483 82,362,336 Notes due 2025 44,855,900 44,855,900 Film acquisition advances 31,696,179 27,837,565 MUFG Bank, LTD film financing facility 6,023,449 6,577,243 Other debt 2,532,325 3,204,255 Total gross debt 530,529,475 500,180,004 Less: debt issuance costs and discounts (18,627,125) (20,526,393) Total debt, net 511,902,350 479,653,611 Less: current portion (23,087,645) (18,798,515) Total long-term debt, net $ 488,814,705 $ 460,855,096 HPS Credit Agreement On August 11, 2022, concurrently with the consummation of the Redbox merger transaction described in Note 4, the Company entered into an Amended and Restated Credit Agreement (“HPS Credit Agreement”) by and among the Company, as primary borrower, Redbox Automated, as co-borrower, the Lenders named therein, and HPS Investment Partners LLC, as administrative agent, and collateral agent (“HPS”). Pursuant to the terms of the HPS Credit Agreement, the Company obtained (i) a term loan facility consisting of the conversion, and assumption by us, of all “Senior Obligations” under (and as defined in) the HPS Credit Agreement (other than any outstanding Sixth Amendment Incremental Revolving Loans under (and as defined in) the credit agreement (the “Redbox Credit Agreement”), dated as of October 20, 2017, by and among Redwood Intermediate, LLC, Redbox Automated, Redwood Incentives LLC, the lenders party thereto and HPS, as amended from time to time thereafter, with the sixth amendment thereto occurring on April 15, 2022 (this last amendment being referred to as the “Sixth Amendment”) and (ii) an $80 million revolving credit facility (with any outstanding Sixth Amendment Incremental Revolving Loans under the Redbox Credit Agreement as amended by the Sixth Amendment being deemed, and assumed by us as, revolving loans thereunder), combined all together referred to as the “Senior Facilities”. Interest is payable on the Senior Facilities entirely in cash or, for a period of up to 18 months, could be paid by increasing the principal amount of the Senior Facilities (PIK Interest), or through a combination of cash and PIK Interest. The applicable margin for borrowings under the HPS Term Loan and Revolving Credit Facility is 7.25% plus the greater of SOFR or 1.0% per annum. In addition, the loan contains an unused line fee of 3.625% per annum. Interest and fees on the loan are payable in arrears on the payment dates and on the maturity of the loan. The maturity of the revolving credit facility is 30 months or February 11, 2025 and the term loan is 5 years or August 11, 2027. Beginning in August of 2024 the Company may be subject to quarterly payments based upon any excess cash flow. At the closing, the Company assumed $357.5 million of debt ($325.8 million under a term loan and $31.7 million funded under an $80 million revolving credit facility) and drew down $25.9 million on the revolving credit facility, all at an interest rate of SOFR plus 7.25% (10.3%). On September 19, 2022, the Company made an additional draw under the revolving facility of $22.3 million with an interest rate of SOFR plus 7.25% (10.85%). Furthermore, the Company issued a warrant to HPS to acquire 4.5% of the fully diluted shares of the Company’s common stock (known as Class A common stock and Class B common stock as a single class) and paid closing costs of $1.2 million. The warrant was valued at $14.9 million and is included in debt issuance costs and is being amortized over the life of the debt. Since August 11, 2022, the Company has elected to PIK interest accrued on the outstanding debt, resulting in an increase to the Senior Facilities. The total outstanding debt had a net book value of $445.4 million ($357.6 million under a term loan and $87.8 million under a revolving credit facility). The total PIK interest of $39.6 million has been deferred and compounded and added to the principal balance including an additional $27.7 million during the six months ended June 30, 2023. Dividend Restrictions & Covenants The Credit Agreement contains certain customary affirmative covenants and negative covenants, including a limitation on the Company’s ability to pay dividends on its Class A Common Stock or make other restricted payments. The covenant prohibiting dividends and other restricted payments has certain limited exceptions, including customary overhead, legal, accounting and other professional fees and expenses; taxes; customary salary, bonus and other benefits. Prepayments & Collateral The Senior Facilities require CSSE to prepay outstanding term loan borrowings, subject to certain exceptions, with: ● ● ● CSSE may voluntarily repay outstanding loans that are funded solely by internally generated cash from business operations under the Senior Facilities at any time, without prepayment premium or penalty, except customary “breakage” costs with respect to SOFR rate loans. All obligations under the Senior Facilities are unconditionally guaranteed by each of CSSE’s existing and future direct and indirect material, wholly-owned domestic subsidiaries, subject to certain exceptions. The obligations of the Company and its subsidiary guarantors under the HPS Credit Agreement are secured by a first priority lien in substantially all of the assets of the Company and its subsidiaries, subject to certain exceptions. Letters of Credit Under the HPS Credit Agreement, the Company has a letter of credit arrangement to provide for the issuance of standby letters of credit. The arrangement supports the collateral requirements for insurance claims and is good for one year to be renewed annually if necessary. The letter of credit is cash-collateralized at 105% in the amount of $2.9 million as of June 30, 2023. Additionally, there is a letter of credit arrangement of $0.3 million that serves as a security deposit for leased warehouse space and is pledged by an equal amount of cash pledged as collateral. The Company’s letter of credit arrangements collateral is classified as restricted cash and reflects balances of $3.2 million as of June 30, 2023. 9.50% Notes Due 2025 On July 17, 2020, the Company completed a public offering of 9.50% Notes due 2025 (the “Notes”) in the aggregate principal amount of $21,000,000. On August 5, 2020, the Company sold an additional $1,100,000 of July Notes pursuant to the partial exercise of the overallotment option. The Notes bear interest at 9.50% per annum, payable every June 30, June 30, September 30, and December 31, and at maturity. The Notes mature on July 31, 2025. The sale of the Notes resulted in net proceeds of approximately $20,995,000 after deducting underwriting discounts and commissions of approximately $1,105,000. The Company used $13,333,333 of the net proceeds to repay the outstanding principal under the Commercial Loan. On December 22, 2020, the Company completed a public offering of 9.50% Notes due 2025 (the “December Notes”) in the aggregate principal amount of $9,387,750. On December 29, 2020, the Company sold an additional $1,408,150 of December Notes pursuant to the partial exercise of the overallotment option. The stated principal of $25.00 per note was discounted 2% to the public offering price of $24.50 per note. On April 20, 2022, the Company completed a public offering of 9.50% Notes due 2025 (the “Notes”) in the aggregate principal amount of $10,400,000. On May 5, 2022, the Company sold an additional $1,560,000 of Notes pursuant to the exercise of the overallotment option. The stated principal of $25.00 per note was discounted 2% to the public offering price of $24.85 per note. The sale of the Notes resulted in net proceeds of approximately $11,094,946 after deducting underwriting discounts and commissions of approximately $865,054. The 9.50% Notes are not secured by any of our assets. As a result, the Notes are effectively subordinated to all of our existing and future secured indebtedness, such as any new loan facility or other indebtedness to which we grant a security interest, including our film acquisition advances and our MUFG Bank, LTD film financing facility. Film Acquisition Advances: Great Point Media Limited On August 27, 2020, the Company entered into a Film Acquisition Advance Agreement with Great Point Media Limited (“GPM”). GPM advanced to the Company $10.2 million of acquisition advances on August 28, 2020 (the “Acquisition Advance”) and may, directly, or through affiliated entities, fund additional acquisition advances in the future. Pursuant to the agreement, GPM has formed a US-based special purpose vehicle (the “SPV”), which has been assigned the territorial licenses and distribution rights in certain films and productions owned or to be acquired by Screen Media Ventures Inc., CSSE’s wholly owned subsidiary. The Company pays the SPV on a quarterly basis adjusted gross receipts generated on each of the assigned productions during the two-year term of the agreement, until the SPV has recouped the full Acquisition Advance for each of the productions together with interest and additional participation amounts on gross receipts generated by the productions. The Acquisition Advance bears interest at 10% per annum compounded monthly on the amount outstanding. In the event the SPV has not recouped the full Acquisition Advance from gross receipts generated within the two-year contractual term, the Company shall pay the remaining balance outstanding, if any, by no later than January 14, 2023. As of June 30, 2023 and December 31, 2022, the outstanding balance was $6.5 million and $6.1 million, respectively. Subsequently, the facility was amended such that the remaining balance is payable in four installments due within the year 2023. All other terms shall remain unaffected. Film Acquisition Advances: Media Entertainment Partners In January 2022, the Company began entering into individual film acquisition advance agreements with Media Entertainment Partners (“MEP”). Under the agreements, MEP financed the Company $33.1 million of acquisition advances and may, directly, or through affiliated entities, fund additional acquisition advances in the future. Pursuant to an arrangement, MEP has formed a US-based special purpose vehicle (the “SPV”), which has been assigned the territorial licenses and distribution rights in certain films and productions owned or to be acquired by Screen Media Ventures Inc., CSSE’s wholly owned subsidiary. Generally, the Company will pay the SPV on a quarterly basis over 30 months the advance plus interest at 12% per annum compounded monthly on the amount outstanding. Under the distribution agreement with the SPV, after Screen Media Venture’s recoupment, the SPV is entitled to receive a profit participation in the net receipts of the film and, provides Screen Media Venture a bargain purchase option to reacquire the film rights after 6 years. As of June 30, 2023 and December 31, 2022, the outstanding balance was $25.2 million and $21.7 million, respectively. MUFG Bank, LTD Film Financing Facility On December 29, 2020, Redbox Entertainment, LLC entered into a four-year, $20 million film financing facility with MUFG Bank, LTD (formerly known as Union Bank) (the “Union Film Financing Facility”). The facility is used exclusively to pay for minimum guarantees, license fees and related distribution expenses for original content obtained under the Company’s Redbox Entertainment label. On April 15, 2022, Redbox agreed, pursuant to the Voting and Support Agreement, to (i) permanently reduce a portion of the Union Revolving Credit Facility in an amount equal to $10.6 million (and the Company made such reduction) and (ii) among other agreements, refrain from borrowing under the Union Film Financing Facility without the consent of Aspen and Redwood Holdco, LP (other than with respect to certain scheduled borrowings and borrowings to cover interest, fees and expenses). There is no additional availability under the Union Film Financing Facility as of December 31, 2022. Borrowings outstanding under the Union Film Financing Facility as of the merger at August 11, 2022 and at December 31, 2022 was $6.6 million and as of June 30, 2023 $6.0 million. Borrowings under the Union Film Financing Facility bear interest at either the alternate base rate or SOFR (based on an interest period selected by the Company of one month, three months or six months) in each case plus a margin. The alternate base rate loans bear interest at a per annum rate equal to the greatest of (i) the base rate in effect on such date, (ii) the federal funds effective rate in effect on such day plus 0.50%, and (iii) daily one month SOFR plus 1.10%. The film financing facility borrowings that are SOFR loans bear interest at a per annum rate equal to the applicable SOFR plus an applicable margin. The borrowing interest rate for the Union Film Financing Facility was 7.94% as of June 30, 2023. In addition to paying interest on outstanding principal under the Union Film Financing Facility, the Company is required to pay a commitment fee at 0.50% per annum to the lenders in respect of the unutilized commitments thereunder. As of June 30, 2023, the expected aggregate maturities of debt for each of the next five years are as follows: Remainder of 2023 $ 15,644,433 2024 20,154,760 2025 136,764,049 2026 387,012 2027 357,579,221 Beyond — Total $ 530,529,475 |
Put Option Obligation
Put Option Obligation | 6 Months Ended |
Jun. 30, 2023 | |
Put Option Obligation [Abstract] | |
Put Option Obligation | Note 12 – Put Option Obligation As part of the additional purchase price for the Sonar Entertainment, Inc business acquisition, the Company issued a 5% interest in CSS AVOD, Inc. and a Put Option that, if exercised, requires the Company to repurchase these shares of CSS AVOD, Inc. from the investor for $11,500,000 in cash. The Put Option is exercisable, with 60 day’s written notice, by the investor at any time during a three-year period commencing on October 8, 2022 and expiring on November 7, 2025 (“Put Election Period”). In February 2023, MidCap Financial Trust exercised their Put Option resulting in the Put Price of $11,500,000 payable by May 2023, in exchange for Midcap’s Financial Trust’s 5% interest in CSS AVOD. As of June 30, 2023 the Company has paid $7,000,000 and under an amendment and modification to the Put Option will pay the remaining balance during the remainder of the year. Upon payment, the Company will own 100% of CSS AVOD. As of June 30, 2023, the 5% interest in CSS AVOD, Inc. consists of the following, June 30, 2023 Put Option Obligation $ 4,400,000 Noncontrolling Interests 94,247 Total $ 4,494,247 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 13 – Income Taxes For the six months ended June 30, 2023, the Company’s effective income tax rate was 0.7%, which differed from the federal statutory rate of 21.0% primarily due to the Company’s valuation allowance and state income taxes. For the six months ended June 30, 2022, the Company’s effective income tax rate was a benefit of 0.0% primarily due to the Company’s valuation allowance and state income taxes. The Company evaluates its deferred tax assets on a quarterly basis to determine if they can be realized and establishes a valuation allowance when it is more likely than not that all or a portion of the net deferred tax asset may not be realized. At June 30, 2023, the Company determined that a portion of its deferred tax assets are not more likely than not to be realized. The Company maintains a valuation allowance against the net operating loss carryovers of A Sharp and Pivot Share, since it was determined that it is more likely than not, based on available objective evidence, that these separate filing jurisdictions would have insufficient taxable income in the current or carryforward periods under the tax laws to realize the future tax benefits for this portion of its deferred tax assets. On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA”) into law. The IRA contains several revisions to the Internal Revenue Code, including a 15% corporate minimum income tax and a 1% excise tax on corporate stock repurchases in tax years beginning after December 31, 2022 with certain exclusions for (a) repurchased shares for withholding taxes on vested restricted stock units (“RSUs”) and (b) treasury shares reissued in the same tax year for settlement of stock option exercises or vesting of RSUs. While these tax law changes have no immediate effect and are not expected to have a material adverse effect on our results of operations going forward, we will continue to evaluate its impact as further information becomes available. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 14 – Related Party Transactions Chicken Soup For The Soul Productions, LLC Chicken Soup For The Soul Productions LLC (“CSS”) is the parent and controlling stockholder of the Company. At June 30, 2023, CSS directly owns 100% of the Company’s Class B common stock and 3,177,962 shares of the Company’s Class A common stock. On a combined basis CSS has an ownership interest of 34.7% of the total outstanding common stock and 79.6% control of the voting power of the Company. CSS is controlled by Mr. William J. Rouhana, Jr., the Company’s CEO. The Company has agreements with CSS and its affiliated companies that provide the Company with access to important assets and resources including key personnel and office space. The assets and resources provided are included as a part of a management services agreement and a license agreement, where combined, the Company pays 10% of its net revenue earned to CSS. Beginning in August 2022 until certain conditions are met, under the terms of the HPS Credit Facility, the 10% fee as it relates to Redbox’s net revenues is applied to certain limited revenue categories. In March of 2023, the Company entered into a modification of the CSS Management Agreement and CSS License Agreement pursuant to which (a) $3.45 million of the aggregate fees under the CSS Management Agreement and CSS License Agreement that have been earned by CSS in the first quarter of 2023 and (b) 25% (or $12.75 million) of the next $51 million of such fees that will be earned by CSS after April 1, 2023 shall be paid through the issuance by our company of shares of our Class A common stock. The Company issued 1,534,947 shares of Class common stock as of June 30, 2023. The shares that shall become issuable in the future under clause (b) shall be issued each fiscal quarter as such fees are earned at a fixed price of $3.05 per share. As of June 30, 2023, $8.1 million of future management and license fees will be offset by Class A common stock. For the three and six months ended June 30, 2023 and 2022, the Company recorded management and license fees of $4,926,349 and $12,778,490, respectively, and $3,763,695 and $6,684,315, respectively. Due To/From Affiliated Companies The Company is part of CSS’s central cash management system whereby payroll and benefits are administered by CSS and the related expenses are charged to its subsidiaries and funds are transferred between affiliates to fulfill joint liquidity needs and business initiatives. Settlements fluctuate period over period due to timing of liquidity needs. As of June 30, 2023 and December 31, 2022, the intercompany payable, with affiliated companies is as follows: June 30, December 31, 2023 2022 Due to affiliated companies $ 4,022,477 $ 3,778,936 Total due to/due from affiliated companies $ 4,022,477 $ 3,778,936 Other Related Parties In the ordinary course of business, the Company is involved in transactions with certain minority shareholders of a consolidated subsidiary related to licensing of television and film programming properties. For the three and six months ended June 30, 2023 and 2022 the amount of revenue recognized was $0 and $0, respectively. At June 30, 2023 and December 31, 2022, the Company had accounts receivable of $3.5 million and $4.8 million, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 15 – Commitments and Contingencies Content Obligations Content obligations include amounts related to the acquisition, licensing, and production of content. An obligation for the acquisition and licensing of content is incurred at the time we enter into an agreement to obtain future titles. Once a title is delivered, accepted and becomes available for exploitation, a content liability is recorded on the condensed consolidated balance sheet. As of June 30, 2023, the Company had $134.7 million of content obligations, comprised of $30.2 million in film library acquisition obligations, $58.2 million of programming obligations and $46.3 million of accrued participation costs. As of December 31, 2022, the Company had $124.3 million of content obligations, comprised of $39.8 million in film library acquisition obligations, $55.8 million of programming obligations and $28.7 million of accrued participation costs. In the ordinary course of business, the Company from time to time enters into contractual arrangements under which it agrees to commitments with producers and other content providers for the acquisition of content and distribution rights which are in production or have not yet been completed, delivered to, and accepted by the Company ready for exploitation. Based on those contractual arrangements, generally, the Company is committed but is not contractually liable to transfer any financial consideration until final delivery and acceptance has occurred. These commitments are expected to be fulfilled in the normal course of business. Additionally, the Company licenses minimum quantities of theatrical and direct-to-video titles under licensing agreements with certain movie content providers. The total estimated content commitments under the terms of the Company’s distribution and license agreements in effect as of June 30, 2023 is presented in the following table: Total 2023 2024 2025 and thereafter Minimum estimated content commitments $ 73,829,738 $ 60,656,588 $ 13,173,150 $ — Acquisition of Sonar Assets The Company owes contingent consideration related to the acquisition of Sonar of $6.9 million at June 30, 2023. The liability is an estimate and is payable upon the collection of receipts from defined receivables, noncontracted TV business receipts and profit participations on a slate of development projects. See Note 12 for additional information. Legal and Other Matters The Company is not presently a party to any legal proceedings the resolution of which the Company believes would have a material adverse effect on its business, financial condition, operating results, or cash flows. However, any legal proceedings are subject to inherent uncertainties, and an unfavorable outcome could include monetary damages, and excessive verdicts can result from litigation, and as such, could result in a material adverse impact on our business, financial position, results of operations, and /or cash flows. Additionally, although the Company has specific insurance for certain potential risks, the Company may in the future incur judgments or enter into settlements of claims which may have a material adverse impact on its business, financial condition, or results of operations in the future. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | Note 16 – Stockholders’ Equity Amendment to Authorized Shares On June 30, 2022, the shareholders of the Company approved an increase in the total authorized shares from 100,000,000 to 200,000,000, comprised of 140,000,000 million shares of Class A common stock, 20,000,000 share of Class B common stock and 40,000,000 shares of preferred stock, of which, 10,000,000 are classified as Series A preferred stock. Treasury Stock On February 28, 2022, the Board of Directors increased the total authorization under the Company’s stock repurchase program by $10,000,000 to $30,000,000. At June 30, 2023, the Company had $3,474,299 of authorization remaining under the stock repurchase program. During the six months ended June 30, 2023, the Company has not repurchased any shares of Class A Common Stock. At the Market Offerings During the six months ended June 30, 2023, the Company completed the sale of an aggregate of 1,060,260 shares of Series A preferred stock, generating net proceeds of $16,938,093. During the six months ended June 30, 2022, the Company completed the sale of an aggregate of 164,830 shares of Class A preferred stock, generating net proceeds of $4,016,219 During the six months ended June 30, 2023, the Company completed the sale of an aggregate of 3,375,897 shares of Class A common stock, generating net proceeds of $5,820,404. Shares Issued In Lieu of Payment During the six months ended June 30, 2023, the Company issued 1,534,947 shares of Class A common stock to its parent in lieu of $4,681,587 cash for fees due under the CSS Management Agreement and the CSS License Agreement. See Note 14, for more information. Common Stock Purchase Agreement On March 12, 2023, the Company, entered into a purchase agreement (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park” or “Investor”), which provides that, upon the terms and subject to the conditions and limitations set forth therein, the Company may sell to Lincoln Park up to $50,000,000 of shares (the “Purchase Shares”) of the Company’s Class A common stock (the “Class A common stock”) over the thirty-six As of June 30, 2023 the Company sold 500,000 shares of Class A common stock to Lincoln Park for net proceeds of $1,470,000. Warrants Warrant activity for the six months ended June 30, 2023 is as follows: Weighted Weighted Average Average Remaining Outstanding Outstanding Exercise Contract Warrants at December 31, 2022 Issued Exercised Expired at June 30, 2023 Price Term (Yrs.) Class W 526,362 — — (526,362) — $ — — Class Z 123,109 — — — 123,109 12.00 1.00 CSSE Class I 800,000 — — — 800,000 8.13 0.87 CSSE Class II 1,200,000 — — — 1,200,000 9.67 0.87 CSSE Class III-A 380,000 — — — 380,000 11.61 0.87 CSSE Class III-B 1,620,000 — — — 1,620,000 11.61 0.87 Redbox Public (CSSEL) (1) 1,039,183 — — — 1,039,183 132.18 3.32 Redbox Private (1) 339,065 — — — 339,065 132.18 3.32 Total 6,027,719 — — (526,362) 5,501,357 $ 32.75 1.49 (1) The number of warrants is shown on an as converted basis based on exchange ratio of 0.087 , the gross warrants are 11,944,627 public and 3,897,303 private. Warrants Classified as Liabilities In connection with the merger of Redbox, the Company assumed all of Redbox’s 15,841,930 outstanding Public and Private Placement Warrants. The Redbox warrants prior to assumption had entitled the holder to purchase one whole share of Redbox Class A common stock at a price of $11.50 per share, subject to adjustment. As a result of the mergers and adjustment caused thereby, 11.494 warrants (the “Per Share Warrant Requirement”) are required to purchase one whole share of Company Class A common stock at an aggregate exercise price of $132.18 per share, subject to adjustment. This was calculated by dividing the pre-merger $11.50 per-share exercise price of the Redbox warrants by the 0.087 Exchange Ratio. No fractional shares will be issued upon exercise of the warrants, with shares of Company Class A common stock issued upon exercise of such warrants rounded up to nearest whole share based on the total shares of Company Class A common stock being exercised and, subject to the Per Share Warrant Requirement. The public warrants expire five years after issuance (October 24, 2026) or earlier upon redemption or liquidation. The Company may redeem the public warrants under the following conditions: • In whole and not in part; • At a price of $0.01 per warrant; • Upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and • if, and only if, the last reported sale price of the Company’s Class A common stock equals or exceeds $206.90 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) 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 gives proper notice of such redemption and provided certain other conditions are met. The redemption criteria discussed above prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and the Company issues a notice of redemption of the warrants, each warrant holder will be entitled to exercise its warrant prior to the scheduled redemption date. However, the price of the Company’s Class A common stock may fall below the $206.90 redemption trigger price (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) as well as the $132.18 warrant exercise price after the redemption notice is issued. The Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants are exercisable on a cashless basis and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. As both the terms of the Private and Public warrants are substantively the same, the Company has determined to use the fair market value of the Public warrants to value all of the warrants. At the time of initial recording the warrants, they were valued at $2.52 per warrant or approximately $3,473,184. As of June 30, 2023 the fair market value of the warrants was $0.02 or $24,946. |
Segment Reporting and Geographi
Segment Reporting and Geographic Information | 6 Months Ended |
Jun. 30, 2023 | |
Segment and Geographic Information [Abstract] | |
Segment Reporting and Geographic Information | Note 17 – Segment Reporting and Geographic Information The Company’s reportable segments have been determined based on the distinct nature of its operations, the Company’s internal management structure, and the financial information that is evaluated regularly by the Company’s chief operating decision maker. The Company operates in one reportable segment and currently operates in the United States and internationally. Net revenue generated in the United States accounted for approximately 99% and 82% of total net revenue for three months ended June 30, 2023 and 2022, respectively, and 74% and 84% of total net revenue for six months ended June 30, 2023 and 2022, respectively. All of the Company’s long-lived assets are based in the United States. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Summary of Significant Accounting Policies | |
Reclassifications | Reclassifications Certain amounts have been reclassified to conform to the current period’s presentation. |
Cash and Cash Equivalents | Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents include restricted cash of $3.4 million at June 30, 2023 and $3.7 million at December 31, 2022. See Note 11 for additional information. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization. Expenditures that extend the life, increase the capacity, or improve the efficiency of property and equipment are capitalized, while expenditures for repairs and maintenance are expensed as incurred. Depreciation and amortization are recognized using the straight-line method over the following approximate useful lives: Useful Life Redbox kiosks and components 3 Computers and software 2 Leasehold improvements (shorter of life of asset or remaining lease term) 3 Office furniture and equipment 5 Vehicles 3 The value of the Company’s property and equipment as of June 30, 2023 and December 31, 2022 is included in Other assets, net on the Consolidated Balance Sheets and is as follows (in thousands): June 30, December 31, 2023 2022 Redbox kiosks and components $ 13,200,210 $ 13,707,512 Computers and software 18,190,174 13,857,011 Leasehold improvements (shorter of life of asset or remaining lease term) 5,119,077 5,119,077 Office furniture and equipment 1,287,104 1,287,104 Vehicles 2,850,275 2,747,604 Property and equipment, at cost 40,646,840 36,718,308 Accumulated depreciation and amortization (17,197,547) (11,570,457) Property and equipment, net $ 23,449,293 $ 25,147,851 |
Internal-Use Software | Internal-Use Software The Company capitalizes costs incurred to develop or obtain internal-use software during the application development stage. Capitalization of software development costs occurs after the preliminary project stage is complete, management authorizes the project, and it is probable that the project will be completed, and the software will be used for the function intended. The Company expenses costs incurred for training, data conversion, and maintenance, as well as spending in the post-implementation stage. A subsequent addition, modification or upgrade to internal-use software is capitalized only to the extent that it enables the software to perform a task it previously could not perform. The internal-use software is included in computers and software under property and equipment in the Company’s Consolidated Balance Sheets. The Company amortizes internal-use software over its estimated useful life on a straight-line basis. |
Assumed Redbox Warrant Liabilities | Assumed Redbox Warrant Liabilities The Company classified its Redbox public and private placement warrants as a liability at their fair value. This liability is subject to remeasurement at each balance sheet date. With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s Statements of Operations in Other non-operating income, net. The public warrants are valued at a market price based on a quoted price in an active market. As both the public and private warrants have mostly the same characteristics the quoted price is used to remeasure all of the warrants. See Note 16 for additional information. |
Asset Retirement Obligations | Asset Retirement Obligations The asset retirement obligation (“ARO”) represents the estimated amounts the Company is obligated to pay to return the space a kiosk occupies to its original condition upon removal of a kiosk. The Company utilizes current retirement costs to estimate the expected cash outflows for retirement obligations. The timing of kiosk removals cannot be reasonably determined. The Company’s $12.6 million of ARO liabilities are included in Other liabilities on the Consolidated Balance Sheets. |
Promotional Codes and Gift Cards | Promotional Codes and Gift Cards Redbox offers its consumers the option to purchase stored value products in the form of bulk promotional codes and electronic gift cards. There are no expiration dates on these products and the Company does not charge service fees that cause a decrement to customer balances in the case of gift cards. Cash receipts from the sale of promotional codes and gift cards are recorded as deferred revenue in Accrued expenses and recognized as revenue upon redemption. Additionally, the Company recognizes revenue from non-redeemed or partially redeemed promotional codes and gift cards in proportion to the historical redemption patterns, referred to as “breakage.” Estimated breakage revenue is recognized over time in proportion to actual promotional code and gift card redemptions and is not material in any period presented. As of June 30, 2023 and December 31, 2022, $7.4 million and $7.3 million, respectively, were deferred related to purchased but unredeemed promotional codes and gift cards and are included in Accrued expenses in the accompanying Consolidated Balance Sheets. |
Loyalty Program | Loyalty Program Redbox Perks allows members to earn points based on transactional and non-transactional activities with Redbox. As customers accumulate points, the Company defers revenue based on its estimate of both the amount of consideration paid by Perks members to earn awards and the value of the eventual award it expects the members to redeem. The Company defers an appropriate amount of revenue in order to properly recognize revenue from Perks members in relation to the benefits of the program. The Company also estimates the quantity of points that will not be redeemed by Perks members (“breakage”). Breakage reduces the amount of revenue deferred from loyalty points over the period of, and in proportion to, the actual redemptions of loyalty points based on observed historical breakage and consumer rental patterns. As of June 30, 2023 and December 31, 2022, $2.0 million and $2.3 million, respectively, of revenue was deferred related to Perks and is included in Accrued expenses in the accompanying Consolidated Balance Sheets. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Summary of Significant Accounting Policies | |
Schedule of property and equipment useful lives | Useful Life Redbox kiosks and components 3 Computers and software 2 Leasehold improvements (shorter of life of asset or remaining lease term) 3 Office furniture and equipment 5 Vehicles 3 |
Schedule of property and equipment | The value of the Company’s property and equipment as of June 30, 2023 and December 31, 2022 is included in Other assets, net on the Consolidated Balance Sheets and is as follows (in thousands): June 30, December 31, 2023 2022 Redbox kiosks and components $ 13,200,210 $ 13,707,512 Computers and software 18,190,174 13,857,011 Leasehold improvements (shorter of life of asset or remaining lease term) 5,119,077 5,119,077 Office furniture and equipment 1,287,104 1,287,104 Vehicles 2,850,275 2,747,604 Property and equipment, at cost 40,646,840 36,718,308 Accumulated depreciation and amortization (17,197,547) (11,570,457) Property and equipment, net $ 23,449,293 $ 25,147,851 |
Business Combination (Tables)
Business Combination (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Schedule of proforma financial information | Three Months Ended Six Months Ended June 30, 2022 June 30, 2022 Net revenue $ 103,631,039 $ 196,064,236 Net loss $ (69,284,040) $ (110,816,000) |
Schedule of stand-alone financial performance | Three Months Ended June 30, 2023 Redbox 1091 Total Net revenue $ 42,943,214 $ 6,523,948 $ 49,467,162 Net income (loss) $ (25,023,177) $ 1,119,144 $ (23,904,033) Three Months Ended June 30, 2022 Redbox 1091 Total Net revenue $ — $ 4,843,063 $ 4,843,063 Net income (loss) $ — $ (268,973) $ (268,973) Six Months Ended June 30, 2023 Redbox 1091 Total Net revenue $ 86,267,798 $ 18,093,763 $ 104,361,561 Net income (loss) $ (53,218,360) $ 3,433,557 $ (49,784,803) Six Months Ended June 30, 2022 Redbox 1091 Total Net revenue $ - $ 6,255,235 $ 6,255,235 Net income (loss) $ - $ (221,659) $ (221,659) |
Redbox Entertainment Inc. | |
Schedule of preliminary allocation of the purchase price | Class A common stock $ 65,828,719 Class A common stock issued upon vesting of Redbox RSUs 703,244 Class A common stock warrants issued to Redbox warrant holders 3,473,185 Total merger consideration $ 70,005,148 |
Schedule of fair values of assets acquired | Assets acquired: Cash, cash equivalents and restricted cash $ 12,921,550 Accounts receivable 17,629,843 Content library 21,241,822 Prepaid expenses and other assets 16,448,641 Property and equipment 15,504,940 Right-of-use assets 7,183,735 Intangible assets (1) 291,200,000 Goodwill 215,859,533 Total assets acquired 597,990,064 Liabilities assumed: Debt 359,854,921 Accounts payable and accrued expenses 91,809,662 Operating lease liabilities 7,183,736 Financing lease liabilities 2,241,304 Other liabilities 66,895,293 Total liabilities assumed 527,984,916 Net assets acquired $ 70,005,148 (1) The weighted-average useful life of the intangible assets acquired is approximately 14 years . |
1091 Media, LLC | |
Schedule of preliminary allocation of the purchase price | Accounts receivable, net $ 4,677,133 Content assets 4,695,000 Other assets 49,347 Intangibles 2,810,000 Goodwill 5,476,711 Total assets acquired 17,708,191 Accounts payable and accrued expenses 129,244 Revenue share payable 1,623,177 Accrued third-party share 3,999,544 Total liabilities assumed 5,751,965 Net assets acquired $ 11,956,226 Cash consideration $ 8,000,000 Equity consideration - Class A common stock 3,303,750 Equity consideration - Series A Preferred Stock 1,980,000 Purchase price consideration 13,283,750 Less: cash acquired (1,327,524) Total Estimated Purchase Price $ 11,956,226 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Revenue Recognition [Abstract] | |
Schedule of disaggregate of revenue | Three Months Ended June 30, % of % of 2023 revenue 2022 revenue Revenue: VOD and streaming $ 31,723,589 40 % $ 29,510,365 78 % Retail 30,960,409 38 % — 0 % Licensing and other 17,226,065 22 % 8,126,582 22 % Net revenue $ 79,910,063 100 % $ 37,636,947 100 % Six Months Ended June 30, % of % of 2023 revenue 2022 revenue Revenue: VOD and streaming $ 66,335,175 35 % $ 50,857,728 76 % Retail 63,219,863 33 % — 0 % Licensing and other 59,954,318 32 % 15,985,416 24 % Net revenue $ 189,509,356 100 % $ 66,843,144 100 % |
Schedule of contract balances | June 30, December 31, 2023 2022 Accounts receivable, net $ 33,453,692 $ 39,467,049 Contract assets (included in accounts receivable) 125,862,596 74,496,376 Total accounts receivable, net $ 159,316,288 $ 113,963,425 Deferred revenue (included in accrued expenses) $ (15,944,129) $ (12,043,508) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Compensation [Abstract] | |
Schedule of stock options activity | Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contract Intrinsic Stock Options Price Term (Yrs.) Value Outstanding at December 31, 2022 1,511,046 $ 14.89 3.15 $ — Granted — — — — Forfeited (37,000) 19.27 — — Exercised — — — — Expired — — — — Outstanding at June 30, 2023 1,474,046 $ 14.62 2.64 $ — Vested and exercisable at December 31, 2022 889,623 $ 14.02 2.62 $ — Vested and exercisable at June 30, 2023 1,053,417 $ 14.35 2.31 $ — |
Schedule of weighted average assumptions to estimate the fair value of stock options | Six Months Ended June 30, Weighted Average Assumptions: 2023 (a) 2022 Expected dividend yield — % — % Expected equity volatility — % 68.3 % Expected term (years) — 5 Risk-free interest rate — % 2.62 % Exercise price per stock option $ — $ 8.83 Market price per share $ — $ 8.83 Weighted average fair value per stock option $ — $ 4.95 (a) There were no stock options granted during the six months ended June 30, 2023. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of components of basic and diluted loss per share | Three Months Ended June 30, 2023 2022 Net loss available to common stockholders $ (43,732,399) $ (20,783,190) Basic weighted-average common shares outstanding 29,171,223 14,950,458 Dilutive effect of options and warrants — — Weighted-average diluted common shares outstanding 29,171,223 14,950,458 Basic and diluted loss per share $ (1.50) $ (1.39) Six Months Ended June 30, 2023 2022 Net loss available to common stockholders $ (102,309,532) $ (34,910,150) Basic weighted-average common shares outstanding 25,163,744 15,152,222 Dilutive effect of options and warrants — — Weighted-average diluted common shares outstanding 25,163,744 15,152,222 Basic and diluted loss per share $ (4.07) $ (2.30) |
Content Assets, net (Tables)
Content Assets, net (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Content Assets [Abstract] | |
Schedule of content assets | June 30, December 31, 2023 2022 Original productions: Programming costs released $ 31,164,062 $ 31,081,500 In production 1,711,071 806,009 In development 9,360,440 8,377,649 Accumulated amortization (a) (32,458,465) (31,651,552) Programming costs, net 9,777,108 8,613,606 Film library: Film library acquisition costs 222,145,902 208,982,878 Accumulated amortization (b) (151,066,417) (125,967,305) Film library costs, net 71,079,485 83,015,573 Licensed program rights: Programming rights 65,211,646 56,288,723 Accumulated amortization (36,359,514) (21,827,394) Programming rights, net 28,852,132 34,461,329 Content assets, net $ 109,708,725 $ 126,090,508 (a) (b) |
Schedule of content asset amortization | Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 Original productions $ 316,794 $ 760,109 $ 806,913 $ 2,917,904 Film library 2,045,465 7,807,244 21,457,510 13,743,925 Licensed program rights 7,183,681 170,052 14,532,120 26,091 Content asset impairment — — 3,641,602 — Total content asset amortization $ 9,545,940 $ 8,737,405 $ 40,438,145 $ 16,687,920 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets, net | Gross Net Carrying Accumulated Carrying Amount Amortization Impairment Amount June 30, 2023: Crackle Plus content rights $ 1,708,270 $ 1,708,270 $ - $ - Crackle Plus brand value 18,807,004 11,082,700 - 7,724,304 Crackle Plus partner agreements 4,005,714 3,304,714 - 701,000 Distribution network 3,600,000 2,500,000 - 1,100,000 Locomotive contractual rights 1,206,870 685,622 - 521,248 1091 intangible assets 2,810,000 1,377,778 - 1,432,222 Redbox - Trade names and trademarks 82,700,000 4,824,167 - 77,875,833 Redbox - Technology 30,800,000 3,850,000 - 26,950,000 Redbox - Customer Relationships 177,700,000 12,276,250 - 165,423,750 Popcornflix brand value 7,163,943 366,394 3,500,000 3,297,549 Total definite lived intangibles 330,501,801 41,975,895 3,500,000 285,025,906 Chicken Soup for the Soul Brand 5,000,000 - - 5,000,000 Total indefinite lived intangibles 5,000,000 - - 5,000,000 Total $ 335,501,801 $ 41,975,895 $ 3,500,000 $ 290,025,906 December 31, 2022: Crackle Plus content rights $ 1,708,270 $ 1,708,270 $ — $ — Crackle Plus brand value 18,807,004 9,739,341 — 9,067,663 Crackle Plus partner agreements 4,005,714 2,904,143 — 1,101,571 Distribution network 3,600,000 1,900,000 — 1,700,000 Locomotive contractual rights 1,206,870 484,477 — 722,393 1091 intangible assets 2,810,000 861,111 — 1,948,889 Redbox - Trade names and trademarks 82,700,000 2,067,500 — 80,632,500 Redbox - Technology 30,800,000 1,650,000 — 29,150,000 Redbox - Customer Relationships 177,700,000 5,261,250 — 172,438,750 Popcornflix brand value 7,163,943 — 3,500,000 3,663,943 Total definite lived intangibles 330,501,801 26,576,092 3,500,000 300,425,709 Chicken Soup for the Soul Brand 5,000,000 — — 5,000,000 Total indefinite lived intangibles 5,000,000 — — 5,000,000 Total $ 335,501,801 $ 26,576,092 $ 3,500,000 $ 305,425,709 |
Schedule of future amortization expense | Remainder of 2023 $ 15,399,802 2024 29,275,033 2025 27,124,226 2026 24,716,973 2027 23,709,455 Beyond 164,800,417 Total $ 285,025,906 |
Schedule of goodwill | June 30, 2023 Online Networks Distribution & Production Redbox Beginning balance $ 18,911,027 $ 26,552,214 $ 215,284,816 Adjustments — — 574,717 Total $ 18,911,027 $ 26,552,214 $ 215,859,533 December 31, 2022 Online Networks Distribution & Production Redbox Beginning balance $ 18,911,027 $ 21,075,503 $ — Acquisitions — 5,476,711 215,284,816 Total $ 18,911,027 $ 26,552,214 $ 215,284,816 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Schedule of amounts recorded in condensed consolidated balance sheet | June 30, December 31, 2023 2022 Right-of-Use Assets Operating lease right-of-use assets $ 14,549,978 $ 16,315,342 Lease Liabilities: Operating lease liabilities $ 16,127,975 $ 18,079,469 Finance Lease cost Amortization of right-of-use assets $ 997,195 $ 827,191 Interest of lease liabilities 59,238 35,633 Total finance lease cost $ 1,056,433 $ 862,824 June 30, December 31, 2023 2022 Operating leases Weighted average remaining lease term 5.6 years 5.9 years Weighted average discount rate 7% 7% Finance Leases Weighted average remaining lease term 2.3 years 1.1 years Weighted average discount rate 5% 4% |
Schedule of expected future payments relating to our operating lease liabilities | Operating Financing Remainder of 2023 $ 2,397,348 $ 539,908 2024 4,195,546 1,017,604 2025 3,675,921 762,930 2026 2,104,048 415,065 2027 1,643,022 3,316 Thereafter 5,230,326 — Total minimum payments 19,246,211 2,738,823 Less amounts representing interest 3,118,236 206,497 Present value of minimum payments $ 16,127,975 $ 2,532,326 |
Schedule of expected future payments relating to our finance lease liabilities | Operating Financing Remainder of 2023 $ 2,397,348 $ 539,908 2024 4,195,546 1,017,604 2025 3,675,921 762,930 2026 2,104,048 415,065 2027 1,643,022 3,316 Thereafter 5,230,326 — Total minimum payments 19,246,211 2,738,823 Less amounts representing interest 3,118,236 206,497 Present value of minimum payments $ 16,127,975 $ 2,532,326 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of debt | June 30, December 31, 2023 2022 HPS term $ 357,576,139 $ 335,342,705 HPS revolving loan 87,845,483 82,362,336 Notes due 2025 44,855,900 44,855,900 Film acquisition advances 31,696,179 27,837,565 MUFG Bank, LTD film financing facility 6,023,449 6,577,243 Other debt 2,532,325 3,204,255 Total gross debt 530,529,475 500,180,004 Less: debt issuance costs and discounts (18,627,125) (20,526,393) Total debt, net 511,902,350 479,653,611 Less: current portion (23,087,645) (18,798,515) Total long-term debt, net $ 488,814,705 $ 460,855,096 |
Schedule of aggregate maturities of long-term debt | Remainder of 2023 $ 15,644,433 2024 20,154,760 2025 136,764,049 2026 387,012 2027 357,579,221 Beyond — Total $ 530,529,475 |
Put Option Obligation (Tables)
Put Option Obligation (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
CSS AVOD Inc. | |
Business Acquisition [Line Items] | |
Schedule of Options Indexed to Issuer's Equity [Table Text Block] | June 30, 2023 Put Option Obligation $ 4,400,000 Noncontrolling Interests 94,247 Total $ 4,494,247 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of intercompany receivable and payable | June 30, December 31, 2023 2022 Due to affiliated companies $ 4,022,477 $ 3,778,936 Total due to/due from affiliated companies $ 4,022,477 $ 3,778,936 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of estimated content commitments | Total 2023 2024 2025 and thereafter Minimum estimated content commitments $ 73,829,738 $ 60,656,588 $ 13,173,150 $ — |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Stockholders' Equity Note [Abstract] | |
Schedule of warrant activity | Weighted Weighted Average Average Remaining Outstanding Outstanding Exercise Contract Warrants at December 31, 2022 Issued Exercised Expired at June 30, 2023 Price Term (Yrs.) Class W 526,362 — — (526,362) — $ — — Class Z 123,109 — — — 123,109 12.00 1.00 CSSE Class I 800,000 — — — 800,000 8.13 0.87 CSSE Class II 1,200,000 — — — 1,200,000 9.67 0.87 CSSE Class III-A 380,000 — — — 380,000 11.61 0.87 CSSE Class III-B 1,620,000 — — — 1,620,000 11.61 0.87 Redbox Public (CSSEL) (1) 1,039,183 — — — 1,039,183 132.18 3.32 Redbox Private (1) 339,065 — — — 339,065 132.18 3.32 Total 6,027,719 — — (526,362) 5,501,357 $ 32.75 1.49 (1) The number of warrants is shown on an as converted basis based on exchange ratio of 0.087 , the gross warrants are 11,944,627 public and 3,897,303 private. |
Description of the Business (De
Description of the Business (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Mar. 12, 2023 USD ($) | Apr. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) item | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) segment country item | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Aug. 31, 2022 item | |
Number of flagship | item | 3 | 3 | ||||||
Number of channels | item | 180 | 180 | ||||||
Number of reportable segments | segment | 1 | |||||||
Number of countries and territories worldwide the company has a presence | country | 56 | |||||||
Deficit | $ (350,061,978) | $ (350,061,978) | $ (247,752,446) | |||||
Net loss | (43,732,399) | $ (20,783,190) | (102,309,532) | $ (34,910,150) | ||||
Asset-based Lending Facility, Available | $ 40,000,000 | $ 40,000,000 | ||||||
Lincoln Park | ||||||||
Term of shares offering | 36 months | 3 years | ||||||
Maximum | Lincoln Park | ||||||||
Aggregate value of shares to be issued | $ 50,000,000 | |||||||
Redbox Entertainment Inc. | ||||||||
Number of self service kiosks operated | item | 28,500 | |||||||
Class A common stock | ||||||||
Proceeds from issuance of Class A common stock | $ 10,400,000 | $ 18,614,471 | $ 1,210,245 | |||||
Class A common stock | Lincoln Park | ||||||||
Proceeds from issuance of Class A common stock | $ 1,470,000 | |||||||
Aggregate value of shares to be issued | $ 50,000,000 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Disaggregation of Revenue [Line Items] | ||
Restricted Cash | $ 3.4 | $ 3.7 |
Accrued expenses | ||
Disaggregation of Revenue [Line Items] | ||
Deferred promotional codes and gift cards | 7.4 | 7.3 |
Deferred loyalty program | 2 | $ 2.3 |
Other liabilities | ||
Disaggregation of Revenue [Line Items] | ||
Asset retirement obligation | $ 12.6 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Property and Equipment (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | $ 40,646,840 | $ 36,718,308 |
Accumulated depreciation and amortization | (17,197,547) | (11,570,457) |
Property and equipment, net | 23,449,293 | 25,147,851 |
Redbox kiosks and components | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | $ 13,200,210 | 13,707,512 |
Redbox kiosks and components | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 3 years | |
Redbox kiosks and components | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 5 years | |
Computers and software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | $ 18,190,174 | 13,857,011 |
Computers and software | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 2 years | |
Computers and software | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 3 years | |
Leasehold improvements (shorter of life of asset or remaining lease term) | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | $ 5,119,077 | 5,119,077 |
Leasehold improvements (shorter of life of asset or remaining lease term) | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 3 years | |
Leasehold improvements (shorter of life of asset or remaining lease term) | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 6 years | |
Office furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | $ 1,287,104 | 1,287,104 |
Office furniture and equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 5 years | |
Office furniture and equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 7 years | |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | $ 2,850,275 | $ 2,747,604 |
Vehicles | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 3 years | |
Vehicles | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 4 years |
Business Combination - Purchase
Business Combination - Purchase Price Consideration Allocation (Details) - USD ($) | Aug. 11, 2022 | Mar. 04, 2022 |
Redbox Entertainment Inc. | ||
Business Acquisition [Line Items] | ||
Warrant consideration | $ 3,473,185 | |
Total | 70,005,148 | |
1091 Media, LLC | ||
Business Acquisition [Line Items] | ||
Cash consideration | $ 8,000,000 | |
Total | 13,283,750 | |
Less: cash acquired | (1,327,524) | |
Total Estimated Purchase Price | 11,956,226 | |
RSUs | Redbox Entertainment Inc. | ||
Business Acquisition [Line Items] | ||
Equity consideration | 703,244 | |
Common Stock | Class A Common Stock | Redbox Entertainment Inc. | ||
Business Acquisition [Line Items] | ||
Equity consideration | $ 65,828,719 | |
Common Stock | Class A Common Stock | 1091 Media, LLC | ||
Business Acquisition [Line Items] | ||
Equity consideration | 3,303,750 | |
Preferred Stock | Series A Preferred Stock | 1091 Media, LLC | ||
Business Acquisition [Line Items] | ||
Equity consideration | $ 1,980,000 |
Business Combination - Purcha_2
Business Combination - Purchase Price to Fair Value of Net Assets Acquired of Redbox (Details) - USD ($) | Aug. 11, 2023 | Jun. 30, 2023 | Dec. 31, 2022 |
Assets acquired: | |||
Goodwill | $ 261,322,774 | $ 260,748,057 | |
Redbox Entertainment Inc. | |||
Assets acquired: | |||
Cash, cash equivalents and restricted cash | $ 12,921,550 | ||
Accounts receivable | 17,629,843 | ||
Content library | 21,241,822 | ||
Prepaid expenses and other assets | 16,448,641 | ||
Property and equipment | 15,504,940 | ||
Right-of-use assets | 7,183,735 | ||
Intangible assets(1) | 291,200,000 | ||
Goodwill | 215,859,533 | $ 215,859,533 | $ 215,284,816 |
Total assets acquired | 597,990,064 | ||
Liabilities assumed: | |||
Debt | 359,854,921 | ||
Accounts payable and accrued expenses | 91,809,662 | ||
Operating lease liabilities | 7,183,736 | ||
Financing lease liabilities | 2,241,304 | ||
Other liabilities | 66,895,293 | ||
Total liabilities assumed | 527,984,916 | ||
Net assets acquired | $ 70,005,148 |
Business Combination - Purcha_3
Business Combination - Purchase Price to Fair Value of Net Assets Acquired (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 | Mar. 04, 2022 |
Purchase price consideration allocated to fair value of net assets acquired: | |||
Goodwill | $ 261,322,774 | $ 260,748,057 | |
1091 Media, LLC | |||
Purchase price consideration allocated to fair value of net assets acquired: | |||
Accounts receivable, net | $ 4,677,133 | ||
Content assets | 4,695,000 | ||
Other assets | 49,347 | ||
Intangibles | 2,810,000 | ||
Goodwill | 5,476,711 | ||
Total assets acquired | 17,708,191 | ||
Accounts payable and accrued expenses | 129,244 | ||
Revenue share payable | 1,623,177 | ||
Accrued third party share | 3,999,544 | ||
Total liabilities assumed | 5,751,965 | ||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | $ 11,956,226 |
Business Combination - Addition
Business Combination - Additional Information (Details) | 3 Months Ended | 6 Months Ended | ||||||||
Aug. 11, 2022 USD ($) shares | Aug. 10, 2022 USD ($) | Mar. 04, 2022 USD ($) country item shares | May 21, 2021 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Aug. 11, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Exchange ratio | 0.087 | 0.087 | ||||||||
Contingent consideration | $ 6,866,449 | $ 6,866,449 | $ 7,311,949 | |||||||
Net revenue | 49,467,162 | $ 4,843,063 | 104,361,561 | $ 6,255,235 | ||||||
Net loss | (23,904,033) | (268,973) | (49,784,803) | (221,659) | ||||||
1091 Media, LLC | ||||||||||
Number of countries full service distribution provided | country | 100 | |||||||||
Number of licensed films | item | 4,000 | |||||||||
Redbox Entertainment Inc. | ||||||||||
Percentage of shares of common stock | 4.50% | |||||||||
Exchange ratio | 0.087 | |||||||||
Fair value of RSUs | $ 2,900,000 | $ 700,000 | ||||||||
Purchase price consideration | $ 70,005,148 | |||||||||
Intangibles | $ 291,200,000 | |||||||||
Weighted-average useful life of intangible assets | 14 years | |||||||||
Net revenue | 42,943,214 | 86,267,798 | ||||||||
Net loss | (25,023,177) | (53,218,360) | ||||||||
Expected tax deductible amount | $ 7,900,000 | |||||||||
Redbox Entertainment Inc. | Selling, general and administrative | ||||||||||
Accelerated stock based compensation expense | 2,200,000 | |||||||||
Transaction Costs | $ 17,500,000 | |||||||||
Redbox Entertainment Inc. | Tax rate | ||||||||||
Fair value measurements of intangible assets | 25 | |||||||||
Redbox Entertainment Inc. | Royalty rate | ||||||||||
Fair value measurements of intangible assets | 2 | |||||||||
Redbox Entertainment Inc. | Minimum | ||||||||||
Estimated useful lives | 3 years | |||||||||
Redbox Entertainment Inc. | Minimum | Discount rate | ||||||||||
Fair value measurements of intangible assets | 11 | |||||||||
Redbox Entertainment Inc. | Maximum | ||||||||||
Estimated useful lives | 15 years | |||||||||
Redbox Entertainment Inc. | Maximum | Discount rate | ||||||||||
Fair value measurements of intangible assets | 12 | |||||||||
Redbox Entertainment Inc. | RSUs | ||||||||||
Number of shares issued | shares | 199,231 | |||||||||
Redbox Entertainment Inc. | Common Stock | Class A Common Stock | ||||||||||
Number of shares issued | shares | 4,700,000 | |||||||||
1091 Media, LLC | ||||||||||
Purchase price consideration | $ 13,283,750 | |||||||||
Cash consideration | 8,000,000 | |||||||||
Intangibles | 2,810,000 | |||||||||
Cash Acquired from Acquisition | $ 1,327,524 | |||||||||
Net revenue | 6,523,948 | 4,843,063 | 18,093,763 | 6,255,235 | ||||||
Net loss | 1,119,144 | $ (268,973) | 3,433,557 | $ (221,659) | ||||||
1091 Media, LLC | Minimum | ||||||||||
Estimated useful lives | 24 months | |||||||||
1091 Media, LLC | Maximum | ||||||||||
Estimated useful lives | 36 months | |||||||||
1091 Media, LLC | Common Stock | Class A Common Stock | ||||||||||
Number of shares issued | shares | 375,000 | |||||||||
1091 Media, LLC | Preferred Stock | Series A Preferred Stock | ||||||||||
Number of shares issued | shares | 80,000 | |||||||||
Sonar Entertainment Inc. | ||||||||||
Contingent consideration | $ 6,900,000 | $ 6,900,000 | ||||||||
CSS AVOD Inc. | ||||||||||
Percentage of shares of common stock | 5% | 5% | 5% | |||||||
Cash consideration | $ 11,500,000 |
Business Combination - Pro Form
Business Combination - Pro Forma Revenue (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2022 | Jun. 30, 2023 | |
Business Combinations [Abstract] | ||
Net revenue | $ 103,631,039 | $ 196,064,236 |
Net loss | $ (69,284,040) | $ (110,816,000) |
Business Combination - Standalo
Business Combination - Standalone financial performance (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Net revenue | $ 49,467,162 | $ 4,843,063 | $ 104,361,561 | $ 6,255,235 |
Net income (loss) | (23,904,033) | (268,973) | (49,784,803) | (221,659) |
Redbox Entertainment Inc. | ||||
Net revenue | 42,943,214 | 86,267,798 | ||
Net income (loss) | (25,023,177) | (53,218,360) | ||
1091 Media, LLC | ||||
Net revenue | 6,523,948 | 4,843,063 | 18,093,763 | 6,255,235 |
Net income (loss) | $ 1,119,144 | $ (268,973) | $ 3,433,557 | $ (221,659) |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregates our revenue by major operations (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Net revenues | $ 79,910,063 | $ 37,636,947 | $ 189,509,356 | $ 66,843,144 |
Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | $ 79,910,063 | $ 37,636,947 | $ 189,509,356 | $ 66,843,144 |
Revenue | Customer Concentration Risk [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk percentage | 100% | 100% | 100% | 100% |
VOD and streaming | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | $ 31,723,589 | $ 29,510,365 | $ 66,335,175 | $ 50,857,728 |
VOD and streaming | Customer Concentration Risk [Member] | Revenue | Customer Concentration Risk [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk percentage | 40% | 78% | 35% | 76% |
Retail | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | $ 30,960,409 | $ 63,219,863 | ||
Retail | Customer Concentration Risk [Member] | Revenue | Customer Concentration Risk [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk percentage | 38% | 0% | 33% | 0% |
Licensing and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | $ 17,226,065 | $ 8,126,582 | $ 59,954,318 | $ 15,985,416 |
Licensing and other | Customer Concentration Risk [Member] | Revenue | Customer Concentration Risk [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk percentage | 22% | 22% | 32% | 24% |
Revenue Recognition - Contract
Revenue Recognition - Contract assets (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Contract with Customer, Contract Asset, Contract Liability, and Receivable [Abstract] | ||
Accounts receivable, net | $ 33,453,692 | $ 39,467,049 |
Contract assets (included in accounts receivable) | 125,862,596 | 74,496,376 |
Total accounts receivable, net | 159,316,288 | 113,963,425 |
Deferred revenue (included in accrued expenses) | $ (15,944,129) | $ (12,043,508) |
Revenue Recognition - Additiona
Revenue Recognition - Additional information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | |||||
Net revenues | $ 79,910,063 | $ 37,636,947 | $ 189,509,356 | $ 66,843,144 | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer A [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk percentage | 15% | ||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer B [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk percentage | 26% | ||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer C [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk percentage | 14% | ||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer D [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk percentage | 12% | ||||
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | Customer A [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk percentage | 31% | 13% | |||
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | Customer B [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Concentration risk percentage | 22% |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Stock Options, Options granted | 0 | |
Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Stock Options, Total outstanding at the beginning of the period | 1,511,046 | |
Number of Stock Options, Options forfeited | (37,000) | |
Number of Stock Options, Total outstanding at the end of the period | 1,474,046 | 1,511,046 |
Number of Stock Options, Total vested and exercisable | 1,053,417 | 889,623 |
Weighted Average Exercise Price, Beginning of period | $ 14.89 | |
Weighted Average Exercise Price, Forfeited | 19.27 | |
Weighted Average Exercise Price, End of period | 14.62 | $ 14.89 |
Weighted Average Exercise Price, Vested and Exercisable | $ 14.35 | $ 14.02 |
Weighted Average Remaining Contract Term, Total outstanding | 2 years 7 months 20 days | 3 years 1 month 24 days |
Weighted Average Remaining Contract Term Exercise Price, Vested and Exercisable | 2 years 3 months 21 days | 2 years 7 months 13 days |
Share-Based Compensation - Weig
Share-Based Compensation - Weighted average assumptions (Details) - $ / shares | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Valuation assumptions: | ||
Expected equity volatility | 68.30% | |
Expected term (years) | 5 years | |
Risk-free interest rate | 2.62% | |
Exercise price per stock option | $ 8.83 | |
Market price per share | 8.83 | |
Weighted average fair value per stock option | $ 4.95 | |
Number of Stock Options, Options granted | 0 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Aug. 11, 2022 | Jun. 30, 2022 | Jan. 01, 2017 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2025 | Dec. 31, 2024 | Dec. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Common stock equivalents authorized under Plan | 5,000,000 | |||||||||
Additional shares authorized under the plan | 2,500,000 | |||||||||
Unrecognized pre-tax compensation expense | $ 3,419,758 | $ 3,419,758 | ||||||||
Minimum | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting period for share-based plan | 2 years | |||||||||
Maximum | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting period for share-based plan | 3 years | |||||||||
Scenario, Forecast [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based compensation expense recognized | $ 169,732 | $ 1,709,556 | $ 1,540,470 | |||||||
Straight-line [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based compensation expense recognized | 594,613 | $ 894,108 | 1,445,434 | $ 1,827,155 | ||||||
Management [Member] | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based compensation expense recognized | $ 63,750 | $ 63,750 | $ 127,500 | $ 127,500 | ||||||
Redbox Entertainment Inc. | Selling, general and administrative | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Accelerated stock based compensation expense | $ 2,200,000 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Reconciliation Per share [Abstract] | ||||
Net loss available to common stockholders | $ (43,732,399) | $ (20,783,190) | $ (102,309,532) | $ (34,910,150) |
Basic weighted-average common shares outstanding | 29,171,223 | 14,950,458 | 25,163,744 | 15,152,222 |
Weighted-average diluted common shares outstanding | 29,171,223 | 14,950,458 | 25,163,744 | 15,152,222 |
Basic loss per share | $ (1.50) | $ (1.39) | $ (4.07) | $ (2.30) |
Diluted loss per share | $ (1.50) | $ (1.39) | $ (4.07) | $ (2.30) |
Content Assets, net (Details)
Content Assets, net (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Content Assets [Abstract] | |||||
Programming costs released | $ 31,164,062 | $ 31,164,062 | $ 31,081,500 | ||
In production | 1,711,071 | 1,711,071 | 806,009 | ||
In development | 9,360,440 | 9,360,440 | 8,377,649 | ||
Accumulated amortization | (32,458,465) | (32,458,465) | (31,651,552) | ||
Programming costs, net | 9,777,108 | 9,777,108 | 8,613,606 | ||
Film library acquisition costs | 222,145,902 | 222,145,902 | 208,982,878 | ||
Accumulated amortization | (151,066,417) | (151,066,417) | (125,967,305) | ||
Film library costs, net | 71,079,485 | 71,079,485 | 83,015,573 | ||
Programming rights | 65,211,646 | 65,211,646 | 56,288,723 | ||
Accumulated amortization | (36,359,514) | (36,359,514) | (21,827,394) | ||
Programming rights, net | 28,852,132 | 28,852,132 | 34,461,329 | ||
Content assets, net | 109,708,725 | 109,708,725 | 126,090,508 | ||
Programming costs impairment | $ 0 | $ 0 | 0 | $ 0 | |
Television Programming Costs Impairment, Original Productions | 10,352,207 | 10,352,207 | |||
Television Programming Costs Impairment, Acquired Film Library | 12,236,701 | $ 8,595,099 | |||
Content asset impairment | $ 3,641,602 |
Content Assets, net - Amortizat
Content Assets, net - Amortization (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Content Assets [Abstract] | ||||
Original productions | $ 316,794 | $ 760,109 | $ 806,913 | $ 2,917,904 |
Film library | 2,045,465 | 7,807,244 | 21,457,510 | 13,743,925 |
Licensed program rights | 7,183,681 | 170,052 | 14,532,120 | 26,091 |
Content asset impairment | 3,641,602 | |||
Total content asset amortization | $ 9,545,940 | $ 8,737,405 | $ 40,438,145 | $ 16,687,920 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill - Finite-lived (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Gross Carrying Amount | $ 330,501,801 | $ 330,501,801 |
Accumulated Amortization | 41,975,895 | 26,576,092 |
Impairment | 3,500,000 | 3,500,000 |
Impairment | 3,500,000 | 3,500,000 |
Net Carrying Amount | 285,025,906 | 300,425,709 |
Indefinite lived intangible assets | 5,000,000 | 5,000,000 |
Finite and indefinite intangible assets, Gross Carrying Amount | 335,501,801 | 335,501,801 |
Finite and indefinite intangible assets, Net Carrying Amount | 290,025,906 | 305,425,709 |
Crackle Plus content rights | ||
Gross Carrying Amount | 1,708,270 | 1,708,270 |
Accumulated Amortization | 1,708,270 | 1,708,270 |
Crackle Plus brand value | ||
Gross Carrying Amount | 18,807,004 | 18,807,004 |
Accumulated Amortization | 11,082,700 | 9,739,341 |
Net Carrying Amount | 7,724,304 | 9,067,663 |
Crackle Plus partner agreements | ||
Gross Carrying Amount | 4,005,714 | 4,005,714 |
Accumulated Amortization | 3,304,714 | 2,904,143 |
Net Carrying Amount | 701,000 | 1,101,571 |
Distribution network | ||
Gross Carrying Amount | 3,600,000 | 3,600,000 |
Accumulated Amortization | 2,500,000 | 1,900,000 |
Net Carrying Amount | 1,100,000 | 1,700,000 |
Locomotive contractual rights | ||
Gross Carrying Amount | 1,206,870 | 1,206,870 |
Accumulated Amortization | 685,622 | 484,477 |
Net Carrying Amount | 521,248 | 722,393 |
1091 intangible asset | ||
Gross Carrying Amount | 2,810,000 | 2,810,000 |
Accumulated Amortization | 1,377,778 | 861,111 |
Net Carrying Amount | 1,432,222 | 1,948,889 |
Trade names and trademarks | ||
Gross Carrying Amount | 82,700,000 | 82,700,000 |
Accumulated Amortization | 4,824,167 | 2,067,500 |
Net Carrying Amount | 77,875,833 | 80,632,500 |
Technology | ||
Gross Carrying Amount | 30,800,000 | 30,800,000 |
Accumulated Amortization | 3,850,000 | 1,650,000 |
Net Carrying Amount | 26,950,000 | 29,150,000 |
Customer Relationships | ||
Gross Carrying Amount | 177,700,000 | 177,700,000 |
Accumulated Amortization | 12,276,250 | 5,261,250 |
Net Carrying Amount | 165,423,750 | 172,438,750 |
Popcornflix brand value | ||
Gross Carrying Amount | 7,163,943 | 7,163,943 |
Accumulated Amortization | 366,394 | 0 |
Impairment | 3,500,000 | 3,500,000 |
Net Carrying Amount | 3,297,549 | 3,663,943 |
Chicken Soup for the Soul Brand | ||
Indefinite lived intangible assets | $ 5,000,000 | $ 5,000,000 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Amortization Expense (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2023 | $ 15,399,802 | |
2024 | 29,275,033 | |
2025 | 27,124,226 | |
2026 | 24,716,973 | |
2027 | 23,709,455 | |
Beyond | 164,800,417 | |
Amortization expense | $ 285,025,906 | $ 300,425,709 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill - Goodwill (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Dec. 31, 2022 | Aug. 11, 2023 | Dec. 31, 2021 | |
Goodwill | $ 261,322,774 | $ 260,748,057 | ||
Online networks | ||||
Goodwill | 18,911,027 | 18,911,027 | $ 18,911,027 | |
Distribution and Production | ||||
Goodwill | 26,552,214 | 26,552,214 | $ 21,075,503 | |
Acquisitions | 5,476,711 | |||
Redbox Entertainment Inc. | ||||
Goodwill | 215,859,533 | 215,284,816 | $ 215,859,533 | |
Adjustments | $ 574,717 | |||
Acquisitions | $ 215,284,816 |
Intangible Assets and Goodwil_5
Intangible Assets and Goodwill - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Amortization expense | $ 7,800,000 | $ 1,700,000 | $ 15,400,000 | $ 3,200,000 | |
Intangible assets | $ 261,300,000 | 261,300,000 | $ 260,700,000 | ||
Goodwill and intangible asset impairment | $ 0 | $ 0 |
Leases - Balance sheet (Details
Leases - Balance sheet (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Right-of-Use Assets | ||
Operating lease right-of-use assets | $ 14,549,978 | $ 16,315,342 |
Lease Liabilities: | ||
Operating lease liabilities | 16,127,975 | 18,079,469 |
Finance Lease cost | ||
Amortization of right-of-use assets | 997,195 | 827,191 |
Interest of lease liabilities | 59,238 | 35,633 |
Total finance lease cost | $ 1,056,433 | $ 862,824 |
Operating leases, weighted average remaining lease term (in years) | 5 years 7 months 6 days | 5 years 10 months 24 days |
Operating leases, weighted average discount rate (as percentage) | 7% | 7% |
Finance Leases, weighted average remaining lease term (in years) | 2 years 3 months 18 days | 1 year 1 month 6 days |
Finance Leases, weighted average discount rate (as percentage) | 5% | 4% |
Leases - Future payments of ope
Leases - Future payments of operating and finance lease liabilities (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Operating | ||
Remainder of 2023 | $ 2,397,348 | |
2024 | 4,195,546 | |
2025 | 3,675,921 | |
2026 | 2,104,048 | |
2027 | 1,643,022 | |
Thereafter | 5,230,326 | |
Total minimum payments | 19,246,211 | |
Less amounts representing interest | 3,118,236 | |
Present value of minimum payments | 16,127,975 | $ 18,079,469 |
Financing | ||
Remainder of 2023 | 539,908 | |
2024 | 1,017,604 | |
2025 | 762,930 | |
2026 | 415,065 | |
2027 | 3,316 | |
Total minimum payments | 2,738,823 | |
Less amounts representing interest | 206,497 | |
Present value of minimum payments | $ 2,532,326 | |
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities. |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Leases [Abstract] | ||||
Rent expenses | $ 1.7 | $ 0.8 | $ 3.5 | $ 1.3 |
Cash paid for operating lease | $ 2.6 |
Debt - Schedule (Details)
Debt - Schedule (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Total gross debt | $ 530,529,475 | $ 500,180,004 |
Less: debt issuance costs and discounts | (18,627,125) | (20,526,393) |
Total debt, net | 511,902,350 | 479,653,611 |
Less: current portion | (23,087,645) | (18,798,515) |
Total long-term debt, net | 488,814,705 | 460,855,096 |
HPS Term Loan | ||
Total gross debt | 357,576,139 | 335,342,705 |
HPS Revolving Loan | ||
Total gross debt | 87,845,483 | 82,362,336 |
MUFG Bank Film Financing Facility | ||
Total gross debt | 6,023,449 | 6,577,243 |
9.50% Notes Due 2025 | ||
Total gross debt | 44,855,900 | 44,855,900 |
Film Acquisition Advance | ||
Other debt | 2,532,325 | 3,204,255 |
Total gross debt | 31,696,179 | 27,837,565 |
Total debt, net | $ 6,500,000 | $ 6,100,000 |
Debt - Future principal payment
Debt - Future principal payments (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
Remainder of 2023 | $ 15,644,433 | |
2024 | 20,154,760 | |
2025 | 136,764,049 | |
2026 | 387,012 | |
2027 | 357,579,221 | |
Total debt | $ 530,529,475 | $ 500,180,004 |
Debt - Narrative (Details)
Debt - Narrative (Details) | 1 Months Ended | 6 Months Ended | ||||||||||||
Aug. 11, 2022 USD ($) | May 05, 2022 USD ($) $ / shares | Apr. 20, 2022 USD ($) | Dec. 29, 2020 USD ($) $ / shares | Jul. 17, 2020 USD ($) | Apr. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) item | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | May 15, 2022 USD ($) | Jan. 31, 2022 USD ($) | Dec. 22, 2020 USD ($) | Aug. 27, 2020 USD ($) | Aug. 05, 2020 USD ($) | |
Outstanding debt | $ 530,529,475 | $ 500,180,004 | ||||||||||||
Payment of interest due | 27,716,581 | |||||||||||||
Outstanding balance | $ 511,902,350 | 479,653,611 | ||||||||||||
HPS Credit Agreement | ||||||||||||||
Debt instrument interest payment term | 18 months | |||||||||||||
Outstanding debt | $ 445,400,000 | |||||||||||||
PIK interests | 39,600,000 | |||||||||||||
Additional amount of PIK interest | 27,700,000 | |||||||||||||
Line of credit | $ 357,500,000 | |||||||||||||
Revolving credit facility | HPS Credit Agreement | ||||||||||||||
Unused line fee percentage | 3.625% | |||||||||||||
Additional borrowing capacity | $ 80,000,000 | |||||||||||||
Proceeds from revolving credit facility | 25,900,000 | |||||||||||||
Additional proceeds from line of credit | $ 22,300,000 | |||||||||||||
Outstanding debt | $ 87,800,000 | |||||||||||||
Debt instrument term | 30 months | |||||||||||||
Line of credit | $ 31,700,000 | |||||||||||||
Maximum borrowing capacity | $ 80,000,000 | |||||||||||||
Revolving credit facility | HPS Credit Agreement | SOFR | ||||||||||||||
Margin on base rate | 7.25% | |||||||||||||
Interest rate | 1% | |||||||||||||
Line of credit facility, interest rate | 10.30% | |||||||||||||
Percentage of interest rate on additional borrowings | 10.85% | |||||||||||||
Standby Letters of Credit | HPS Credit Agreement | ||||||||||||||
Percentage of cash collateral for letters of credit | 105% | |||||||||||||
Term of collateral pledged | 1 year | |||||||||||||
Average balance | $ 2,900,000 | |||||||||||||
Standby Letters of Credit | HPS Credit Agreement | Asset Pledged as Collateral | ||||||||||||||
Contingently liable for letter of credit | 300,000 | |||||||||||||
Average balance | 3,200,000 | |||||||||||||
MUFG Bank Film Financing Facility | ||||||||||||||
Additional borrowing capacity | 0 | |||||||||||||
Outstanding debt | 6,023,449 | 6,577,243 | ||||||||||||
Commitment fee on term loan | $ 0.50 | |||||||||||||
Debt instrument term | 4 years | |||||||||||||
Line Of credit facility reduced amount | $ 10,600,000 | |||||||||||||
Line of credit current borrowing capacity | $ 20,000,000 | |||||||||||||
Line of credit | $ 6,000,000 | 6,600,000 | ||||||||||||
Line of credit interest rate at period | 7.94% | |||||||||||||
MUFG Bank Film Financing Facility | Scenario One | ||||||||||||||
Debt instrument term | 1 month | |||||||||||||
MUFG Bank Film Financing Facility | Scenario Two | ||||||||||||||
Debt instrument term | 3 months | |||||||||||||
MUFG Bank Film Financing Facility | Scenario Three | ||||||||||||||
Debt instrument term | 6 months | |||||||||||||
MUFG Bank Film Financing Facility | SOFR | ||||||||||||||
Margin on base rate | 1.10% | |||||||||||||
MUFG Bank Film Financing Facility | Fed Funds Effective Rate Overnight Index Swap Rate | ||||||||||||||
Margin on base rate | 0.50% | |||||||||||||
Redbox Entertainment Inc. | ||||||||||||||
Percentage of shares of common stock | 4.50% | |||||||||||||
Redbox Entertainment Inc. | HPS Credit Agreement | ||||||||||||||
Percentage of shares of common stock | 4.50% | |||||||||||||
Payments for merger related costs | $ 1,200,000 | |||||||||||||
Fair value of warrant | $ 14,900,000 | |||||||||||||
9.50% Notes Due 2025 | ||||||||||||||
Original principal amount | $ 1,560,000 | $ 10,400,000 | $ 21,000,000 | $ 1,100,000 | ||||||||||
Interest rate | 9.50% | 9.50% | 9.50% | |||||||||||
Proceeds from issuance of Class A common stock | 11,094,946 | $ 20,995,000 | ||||||||||||
Payment of preferred stock issuance costs | $ 865,054 | 1,105,000 | ||||||||||||
Percentage of cash collateral for letters of credit | 9.50% | |||||||||||||
Outstanding debt | $ 44,855,900 | 44,855,900 | ||||||||||||
Stated principal per note | $ / shares | $ 25 | |||||||||||||
Discounted percentage | 2% | |||||||||||||
Offering price per note | $ / shares | $ 24.85 | |||||||||||||
9.50% Notes Due 2025 December Notes | ||||||||||||||
Original principal amount | $ 1,408,150 | $ 9,387,750 | ||||||||||||
Interest rate | 9.50% | |||||||||||||
Stated principal per note | $ / shares | $ 25 | |||||||||||||
Discounted percentage | 2% | |||||||||||||
Offering price per note | $ / shares | $ 24.50 | |||||||||||||
Film Acquisition Advance | ||||||||||||||
Original principal amount | $ 10,200,000 | |||||||||||||
Interest rate | 10% | |||||||||||||
Outstanding debt | 31,696,179 | 27,837,565 | ||||||||||||
Long-term debt term | 2 years | |||||||||||||
Outstanding balance | $ 6,500,000 | 6,100,000 | ||||||||||||
Number of installments | item | 4 | |||||||||||||
Film Acquisition Advance | Media Entertainment Partners | ||||||||||||||
Original principal amount | $ 33,100,000 | |||||||||||||
Interest rate | 12% | |||||||||||||
Long-term debt term | 30 months | |||||||||||||
Outstanding balance | $ 25,200,000 | $ 21,700,000 | ||||||||||||
Period for reacquiring film rights | 6 years | |||||||||||||
Commercial Loan | ||||||||||||||
Repayments of commercial loan | $ 13,333,333 | |||||||||||||
Term Loan | HPS Credit Agreement | ||||||||||||||
Outstanding debt | $ 357,600,000 | |||||||||||||
Debt instrument term | 5 years | |||||||||||||
Line of credit | $ 325,800,000 | |||||||||||||
Class A Common Stock | ||||||||||||||
Proceeds from issuance of Class A common stock | $ 10,400,000 | $ 18,614,471 | $ 1,210,245 |
Put Option Obligation (Details)
Put Option Obligation (Details) - CSS AVOD Inc. - USD ($) | 6 Months Ended | ||
May 21, 2021 | Jun. 30, 2023 | Feb. 28, 2023 | |
Business Acquisition [Line Items] | |||
Percentage of shares of common stock | 5% | 5% | |
Cash consideration | $ 11,500,000 | ||
Notice period | 60 days | ||
Election period | 3 years | ||
Midcap Capital Fund, LLC | |||
Business Acquisition [Line Items] | |||
Percentage of shares of common stock | 100% | 5% | |
Cash consideration | $ 7,000,000 | ||
Consideration payable | $ 11,500,000 | ||
Put Option | |||
Business Acquisition [Line Items] | |||
Option Contract Indexed to Equity, Settlement, Cash, Amount | 4,494,247 | ||
Put Option | Parent | |||
Business Acquisition [Line Items] | |||
Option Contract Indexed to Equity, Settlement, Cash, Amount | 4,400,000 | ||
Put Option | Noncontrolling Interests | |||
Business Acquisition [Line Items] | |||
Option Contract Indexed to Equity, Settlement, Cash, Amount | $ 94,247 |
Income Taxes (Details)
Income Taxes (Details) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 0.70% | 0% |
Federal statutory rate of 21% | 21% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Related Party Transactions [Abstract] | ||
Due to affiliated companies | $ 4,022,477 | $ 3,778,936 |
Total due to/due from affiliated companies | $ 4,022,477 | $ 3,778,936 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Mar. 31, 2023 | Aug. 31, 2022 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | ||||||||
Share Price | $ 8.83 | $ 8.83 | ||||||
Management And License Fees | $ 4,926,349 | $ 3,763,695 | $ 12,778,490 | $ 6,684,315 | ||||
CSS | ||||||||
Related Party Transaction [Line Items] | ||||||||
Percentage of voting interest by parent | 79.60% | |||||||
CSS management agreement and CSS license agreement | ||||||||
Related Party Transaction [Line Items] | ||||||||
Shares issued | 1,534,947 | |||||||
Aggregate fees payable under the management and license agreement | $ 3,450,000 | $ 3,450,000 | ||||||
Percentage of fees payable through the issuance of common stock | 25% | |||||||
Fees payable through issuance of common stock | $ 12,750,000 | |||||||
Amount of fees earned in second quarter | $ 51,000,000 | $ 51,000,000 | ||||||
Share Price | $ 3.05 | $ 3.05 | ||||||
Value of shares issuable in lieu of payments | $ 8,100,000 | $ 8,100,000 | ||||||
CSS | ||||||||
Related Party Transaction [Line Items] | ||||||||
Percentage of revenue fees earned applied to limited revenue categories | 10% | |||||||
Percentage of revenue earned paid to related party | 10% | |||||||
CSS | Management and license fees | ||||||||
Related Party Transaction [Line Items] | ||||||||
Management And License Fees | 4,926,349 | 3,763,695 | $ 12,778,490 | 6,684,315 | ||||
Minority Shareholders Of Subsidiary | ||||||||
Related Party Transaction [Line Items] | ||||||||
Revenue from related parties | 0 | $ 0 | 0 | $ 0 | ||||
Accounts receivable outstanding | $ 3,500,000 | $ 3,500,000 | $ 4,800,000 | |||||
Class A common stock | CSS | ||||||||
Related Party Transaction [Line Items] | ||||||||
Shares issued | 3,177,962 | |||||||
Class A common stock | CSS | Management and license fees | ||||||||
Related Party Transaction [Line Items] | ||||||||
Shares issued | 1,534,947 | |||||||
Class B Common Stock | CSS | ||||||||
Related Party Transaction [Line Items] | ||||||||
Noncontrolling interests percent | 100% | 100% | ||||||
Common Stock | CSS | ||||||||
Related Party Transaction [Line Items] | ||||||||
Noncontrolling interests percent | 34.70% | 34.70% | ||||||
Common Stock | Class A common stock | ||||||||
Related Party Transaction [Line Items] | ||||||||
Shares issued | 7,978,888 | 359,831 | 155,871 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) | 6 Months Ended | |||
May 21, 2021 | Jun. 30, 2023 | Feb. 28, 2023 | Dec. 31, 2022 | |
Programming obligations | $ 58,228,000 | $ 55,883,788 | ||
Contingent consideration | 6,866,449 | 7,311,949 | ||
Content Acquisition, Licensing And Production | ||||
Content obligation | 134,700,000 | 124,300,000 | ||
Library acquisition | 30,200,000 | 39,800,000 | ||
Programming obligations | 58,200,000 | 55,800,000 | ||
Minimum estimated content commitments | 46,300,000 | $ 28,700,000 | ||
Sonar Entertainment Inc. | ||||
Contingent consideration | $ 6,900,000 | |||
CSS AVOD Inc. | ||||
Cash consideration | $ 11,500,000 | |||
Percentage of shares of common stock | 5% | 5% | ||
CSS AVOD Inc. | Midcap Capital Fund, LLC | ||||
Cash consideration | $ 7,000,000 | |||
Consideration payable | $ 11,500,000 | |||
Percentage of shares of common stock | 100% | 5% |
Commitments and Contingencies_2
Commitments and Contingencies - Estimated Commitments (Details) - Acquisition of Content and Distribution Rights | Jun. 30, 2023 USD ($) |
Other Commitments [Line Items] | |
2023 | $ 60,656,588 |
2024 | 13,173,150 |
Minimum estimated content payments | $ 73,829,738 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||
Mar. 12, 2023 USD ($) | Jun. 30, 2022 shares | Jun. 29, 2022 shares | Apr. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) D $ / shares shares | Mar. 31, 2023 USD ($) | Jun. 30, 2022 USD ($) shares | Jun. 30, 2023 USD ($) D $ / shares shares | Jun. 30, 2022 USD ($) shares | Dec. 31, 2022 $ / shares shares | Aug. 11, 2022 | Feb. 28, 2022 USD ($) | Feb. 27, 2022 USD ($) | |
Number of shares authorized | shares | 200,000,000 | 100,000,000 | |||||||||||
Stock repurchase program, shares authorized value | $ 30,000,000 | $ 10,000,000 | |||||||||||
Remaining stock repurchase plan authorized | $ 3,474,299 | $ 3,474,299 | |||||||||||
Issuance of common stock, net | $ 15,100,439 | $ 1,887,241 | $ 1,120,419 | ||||||||||
Exchange ratio | 0.087 | 0.087 | |||||||||||
Redbox Entertainment Inc. | |||||||||||||
Exchange ratio | 0.087 | ||||||||||||
Lincoln Park | |||||||||||||
Issuance of common stock, net | $ 1,470,000 | ||||||||||||
Term of shares offering | 36 months | 3 years | |||||||||||
Lincoln Park | Maximum | |||||||||||||
Aggregate value of shares to be issued | $ 50,000,000 | ||||||||||||
Redbox warrants | |||||||||||||
Term of warrants | 5 years | 5 years | |||||||||||
Warrant price | $ / shares | $ 2.52 | $ 2.52 | |||||||||||
Warrants and rights outstanding | $ 3,473,184 | $ 3,473,184 | |||||||||||
Fair market value of warrants per warrant | 0.02 | 0.02 | |||||||||||
Fair market value of warrants | $ 24,946 | $ 24,946 | |||||||||||
Warrants Classified as Liabilities, Warrants Assumed | shares | 15,841,930 | 15,841,930 | |||||||||||
Warrants Classified as Liabilities, Price Per Share Prior To Assumptions | $ / shares | $ 11.50 | $ 11.50 | |||||||||||
Warrants Classified as Liabilities, Warrant Conversion Into Share Ratio | 11.494 | 11.494 | |||||||||||
Warrants Classified as Liabilities, Exchange Ratio | 0.087 | 0.087 | |||||||||||
Redbox Public (CSSEL) | |||||||||||||
Warrant redemption price per share | $ / shares | $ 0.01 | $ 0.01 | |||||||||||
Warrant redemption term | 30 days | ||||||||||||
Warrants Classified as Liabilities, Aggregate Exercise Price | $ / shares | $ 132.18 | $ 132.18 | |||||||||||
Class A Common Stock | |||||||||||||
Common stock, shares authorized | shares | 140,000,000 | 140,000,000 | 140,000,000 | 140,000,000 | 140,000,000 | 140,000,000 | |||||||
Proceeds from issuance of common stock | $ 10,400,000 | $ 18,614,471 | $ 1,210,245 | ||||||||||
Common Stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||
Class A Common Stock | At the Market Offering | |||||||||||||
Shares issued | shares | 3,375,897 | ||||||||||||
Proceeds from sale of stock | $ 5,820,404 | ||||||||||||
Class A Common Stock | Lincoln Park | |||||||||||||
Shares issued | shares | 500,000 | ||||||||||||
Proceeds from issuance of common stock | $ 1,470,000 | ||||||||||||
Aggregate value of shares to be issued | $ 50,000,000 | ||||||||||||
Class A Common Stock | CSS | Management and license fees | |||||||||||||
Shares issued | shares | 1,534,947 | ||||||||||||
Issuance of common stock, net | $ 4,681,587 | ||||||||||||
Class A Common Stock | Redbox Public (CSSEL) | |||||||||||||
Common stock at a price | $ / shares | $ 206.90 | $ 206.90 | |||||||||||
Number of trading days | D | 20 | 20 | |||||||||||
Number of trading days prior to notice of redemption | D | 30 | 30 | |||||||||||
Class B Common Stock | |||||||||||||
Common stock, shares authorized | shares | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | |||||||
Common Stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||
Preferred Stock | |||||||||||||
Preferred stock, shares authorized | shares | 40,000,000 | 40,000,000 | 40,000,000 | ||||||||||
Series A Preferred Stock | |||||||||||||
Preferred stock, shares authorized | shares | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | |||||||
Series A Preferred Stock | At the Market Offering | |||||||||||||
Shares issued | shares | 1,060,260 | 164,830 | |||||||||||
Proceeds from sale of stock | $ 16,938,093 | $ 4,016,219 | |||||||||||
Stock Repurchase Program | Class A Common Stock | |||||||||||||
Number of stock repurchased | shares | 0 |
Stockholders' Equity - Warrants
Stockholders' Equity - Warrants (Details) | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | 6,027,719 |
Class of Warrants or Rights Expired | (526,362) |
Class of Warrant or Right, Outstanding | 5,501,357 |
Weighted Average Exercise Price | $ / shares | $ 32.75 |
Class of Warrant or Right, Weighted Average Remaining Contact Term | 1 year 5 months 26 days |
Class W | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | 526,362 |
Class of Warrants or Rights Expired | (526,362) |
Class Z | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | 123,109 |
Class of Warrant or Right, Outstanding | 123,109 |
Weighted Average Exercise Price | $ / shares | $ 12 |
Class of Warrant or Right, Weighted Average Remaining Contact Term | 1 year |
CSSE Class I | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | 800,000 |
Class of Warrant or Right, Outstanding | 800,000 |
Weighted Average Exercise Price | $ / shares | $ 8.13 |
Class of Warrant or Right, Weighted Average Remaining Contact Term | 10 months 13 days |
CSSE Class II | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | 1,200,000 |
Class of Warrant or Right, Outstanding | 1,200,000 |
Weighted Average Exercise Price | $ / shares | $ 9.67 |
Class of Warrant or Right, Weighted Average Remaining Contact Term | 10 months 13 days |
CSSE Class III A | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | 380,000 |
Class of Warrant or Right, Outstanding | 380,000 |
Weighted Average Exercise Price | $ / shares | $ 11.61 |
Class of Warrant or Right, Weighted Average Remaining Contact Term | 10 months 13 days |
CSSE Class III B | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | 1,620,000 |
Class of Warrant or Right, Outstanding | 1,620,000 |
Weighted Average Exercise Price | $ / shares | $ 11.61 |
Class of Warrant or Right, Weighted Average Remaining Contact Term | 10 months 13 days |
Redbox Public (CSSEL) | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | 1,039,183 |
Class of Warrant or Right, Outstanding | 1,039,183 |
Weighted Average Exercise Price | $ / shares | $ 132.18 |
Class of Warrant or Right, Weighted Average Remaining Contact Term | 3 years 3 months 25 days |
Redbox Private | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | 339,065 |
Class of Warrant or Right, Outstanding | 339,065 |
Weighted Average Exercise Price | $ / shares | $ 132.18 |
Class of Warrant or Right, Weighted Average Remaining Contact Term | 3 years 3 months 25 days |
Public Warrant | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | 11,944,627 |
Private Warrant | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | 3,897,303 |
Segment Reporting and Geograp_2
Segment Reporting and Geographic Information (Details) - segment | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Number of reportable segments | 1 | |||
Sales Revenue, Net [Member] | UNITED STATES | Customer Concentration Risk | ||||
Concentration risk percentage | 99% | 82% | 74% | 84% |