x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 84-1797523 | |||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||||
Common Stock, par value $0.0001 | CURI | NASDAQ | ||||||||||||||
Warrants, each exercisable for one share of Common Stock at an exercise price of $11.50 per share | CURIW | NASDAQ |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||||||||||
Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||||||||||||
Emerging growth company | ☒ |
CURIOSITYSTREAM INC.
TABLE OF CONTENTS
Page | ||||||||
Item 1. Financial Statements (unaudited) | ||||||||
i
March 31, | December 31, | |||||||
2023 | 2022 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 48,668 | $ | 40,007 | ||||
Restricted cash | 500 | 500 | ||||||
Short-term investments in debt securities | — | 14,986 | ||||||
Accounts receivable, net | 9,699 | 10,899 | ||||||
Other current assets | 2,189 | 3,118 | ||||||
Total current assets | 61,056 | 69,510 | ||||||
Investments in equity method investees | 10,547 | 10,766 | ||||||
Property and equipment, net | 1,000 | 1,094 | ||||||
Content assets, net | 66,373 | 68,502 | ||||||
Operating lease right-of-use | 3,633 | 3,702 | ||||||
Other assets | 493 | 539 | ||||||
Total assets | $ | 143,102 | $ | 154,113 | ||||
Liabilities and stockholders’ equity | ||||||||
Current liabilities | ||||||||
Content liabilities | $ | 1,656 | $ | 2,862 | ||||
Accounts payable | 7,500 | 6,065 | ||||||
Accrued expenses and other liabilities | 3,380 | 7,752 | ||||||
Deferred revenue | 13,863 | 14,281 | ||||||
Total current liabilities | 26,399 | 30,960 | ||||||
Warrant liability | 331 | 257 | ||||||
Non-current operating lease liabilities | 4,560 | 4,648 | ||||||
Other liabilities | 655 | 622 | ||||||
Total liabilities | 31,945 | 36,487 | ||||||
Stockholders’ equity | ||||||||
Common stock, $0.0001 par value – 125,000 shares authorized as of March 31, 2023 and December 31, 2022; 52,961 shares issued and outstanding as of March 31, 2023; 52,853 shares issued and outstanding as of December 31, 2022 | 5 | 5 | ||||||
Additional paid-in capital | 360,002 | 358,760 | ||||||
Accumulated other comprehensive loss | — | (40 | ) | |||||
Accumulated deficit | (248,850 | ) | (241,099 | ) | ||||
Total stockholders’ equity | 111,157 | 117,626 | ||||||
Total liabilities and stockholders’ equity | $ | 143,102 | $ | 154,113 | ||||
For the three months ended March 31, | ||||||||
2023 | 2022 | |||||||
Revenues | $ | 12,387 | $ | 17,627 | ||||
Operating expenses | ||||||||
Cost of revenues | 9,001 | 11,850 | ||||||
Advertising and marketing | 3,115 | 14,768 | ||||||
General and administrative | 8,059 | 10,503 | ||||||
20,175 | 37,121 | |||||||
Operating loss | (7,788 | ) | (19,494 | ) | ||||
Change in fair value of warrant liability | (74 | ) | 3,860 | |||||
Interest and other income (expense) | 388 | (57 | ) | |||||
Equity method investment loss | (219 | ) | (156 | ) | ||||
Loss before income taxes | (7,693 | ) | (15,847 | ) | ||||
Provision for income taxes | 58 | 45 | ||||||
Net loss | $ | (7,751 | ) | $ | (15,892 | ) | ||
Net loss per share | ||||||||
Basic | $ | (0.15 | ) | $ | (0.30 | ) | ||
Diluted | $ | (0.15 | ) | $ | (0.30 | ) | ||
Weighted average number of common shares outstanding | ||||||||
Basic | 52,950 | 52,750 | ||||||
Diluted | 52,950 | 52,750 |
For the three months ended March 31, | ||||||||
2023 | 2022 | |||||||
Net loss | $ | (7,751 | ) | $ | (15,892 | ) | ||
Other comprehensive income (loss) | ||||||||
Unrealized gain (loss) on available for sale securities | 40 | (233 | ) | |||||
Total comprehensive loss | $ | (7,711 | ) | $ | (16,125 | ) | ||
Accumulated | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||
Common Stock | Preferred Stock | Additional Paid-in | Other Comprehensive | Accumulated | ||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Income (Loss) | Deficit | ||||||||||||||||||||||||||
Balance as of December 31, 2021 | 52,677 | $ | 5 | — | $ | — | $ | 352,334 | $ | (222 | ) | $ | (190,182 | ) | $ | 161,935 | ||||||||||||||||
Net loss | — | — | — | — | — | — | (15,892 | ) | (15,892 | ) | ||||||||||||||||||||||
Stock-based compensation, net | 90 | — | — | — | 1,651 | — | — | 1,651 | ||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | (233 | ) | — | (233 | ) | ||||||||||||||||||||||
Balance as of March 31, 2022 | 52,767 | $ | 5 | — | $ | — | $ | 353,985 | $ | (455 | ) | $ | (206,074 | ) | $ | 147,461 | ||||||||||||||||
Balance as of December 31, 2022 | 52,853 | $ | 5 | — | $ | — | $ | 358,760 | $ | (40 | ) | $ | (241,099 | ) | $ | 117,626 | ||||||||||||||||
Net loss | — | — | — | — | — | — | (7,751 | ) | (7,751 | ) | ||||||||||||||||||||||
Stock-based compensation, net | 108 | — | — | — | 1,242 | — | — | 1,242 | ||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 40 | — | 40 | ||||||||||||||||||||||||
Balance as of March 31, 2023 | 52,961 | $ | 5 | — | $ | — | $ | 360,002 | $ | — | $ | (248,850 | ) | $ | 111,157 | |||||||||||||||||
(In thousands, except par value) | March 31, 2024 | December 31, 2023 | |||||||||
(Unaudited) | |||||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | 38,750 | $ | 37,715 | |||||||
Restricted cash | 125 | 500 | |||||||||
Accounts receivable | 4,876 | 4,760 | |||||||||
Other current assets | 1,831 | 2,315 | |||||||||
Total current assets | 45,582 | 45,290 | |||||||||
Investments in equity method investees | 4,598 | 6,354 | |||||||||
Property and equipment, net | 639 | 727 | |||||||||
Content assets, net | 40,154 | 44,943 | |||||||||
Operating lease right-of-use assets | 3,279 | 3,350 | |||||||||
Other assets | 311 | 358 | |||||||||
Total assets | $ | 94,563 | $ | 101,022 | |||||||
Liabilities and stockholders’ equity | |||||||||||
Current liabilities | |||||||||||
Content liabilities | $ | 74 | $ | 407 | |||||||
Accounts payable | 3,288 | 4,765 | |||||||||
Accrued expenses and other liabilities | 4,766 | 3,705 | |||||||||
Deferred revenue | 14,651 | 14,521 | |||||||||
Total current liabilities | 22,779 | 23,398 | |||||||||
Warrant liability | 74 | 44 | |||||||||
Non-current operating lease liabilities | 4,187 | 4,283 | |||||||||
Other liabilities | 562 | 651 | |||||||||
Total liabilities | 27,602 | 28,376 | |||||||||
Stockholders’ equity | |||||||||||
Common stock, $0.0001 par value – 125,000 shares authorized as of March 31, 2024, and December 31, 2023; 53,306 shares issued and outstanding as of March 31, 2024; 53,286 issued and outstanding as of December 31, 2023 | 5 | 5 | |||||||||
Additional paid-in capital | 363,319 | 362,636 | |||||||||
Accumulated other comprehensive loss | — | — | |||||||||
Accumulated deficit | (296,363) | (289,995) | |||||||||
Total stockholders’ equity | 66,961 | 72,646 | |||||||||
Total liabilities and stockholders’ equity | $ | 94,563 | $ | 101,022 |
Three Months Ended March 31, | |||||||||||||||||||||||
(Unaudited and in thousands except per share amounts) | 2024 | 2023 | |||||||||||||||||||||
Revenues | $ | 12,001 | $ | 12,387 | |||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Cost of revenues | 6,748 | 9,001 | |||||||||||||||||||||
Advertising and marketing | 3,105 | 3,115 | |||||||||||||||||||||
General and administrative | 5,802 | 8,059 | |||||||||||||||||||||
15,655 | 20,175 | ||||||||||||||||||||||
Operating loss | (3,654) | (7,788) | |||||||||||||||||||||
Change in fair value of warrant liability | (30) | (74) | |||||||||||||||||||||
Interest and other income (expense) | 439 | 388 | |||||||||||||||||||||
Equity method investment loss | (1,756) | (219) | |||||||||||||||||||||
Loss before income taxes | (5,001) | (7,693) | |||||||||||||||||||||
Provision for income taxes | 34 | 58 | |||||||||||||||||||||
Net loss | $ | (5,035) | $ | (7,751) | |||||||||||||||||||
Net loss per share | |||||||||||||||||||||||
Basic | $ | (0.09) | $ | (0.15) | |||||||||||||||||||
Diluted | $ | (0.09) | $ | (0.15) | |||||||||||||||||||
Weighted average number of common shares outstanding | |||||||||||||||||||||||
Basic | 53,301 | 52,950 | |||||||||||||||||||||
Diluted | 53,301 | 52,950 |
For the three months ended March 31, | ||||||||
2023 | 2022 | |||||||
Cash flows from operating activities | ||||||||
Net loss | $ | (7,751 | ) | $ | (15,892 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
Change in fair value of warrant liability | 74 | (3,860 | ) | |||||
Additions to content assets | (3,723 | ) | (14,470 | ) | ||||
Change in content liabilities | (1,206 | ) | (5,672 | ) | ||||
Amortization of content assets | 5,852 | 9,038 | ||||||
Depreciation and amortization expenses | 127 | 209 | ||||||
Amortization of premiums and accretion of discounts associated with investments in debt securities, net | 26 | 411 | ||||||
Stock-based compensation | 1,267 | 1,788 | ||||||
Equity method investment loss | 219 | 156 | ||||||
Other non-cash items | 121 | 120 | ||||||
Changes in operating assets and liabilities | ||||||||
Accounts receivable | 1,200 | 10,052 | ||||||
Other assets | 944 | 2,227 | ||||||
Accounts payable | 1,440 | 4,990 | ||||||
Accrued expenses and other liabilities | (4,514 | ) | (3,677 | ) | ||||
Deferred revenue | (384 | ) | 2,293 | |||||
Net cash used in operating activities | (6,308 | ) | (12,287 | ) | ||||
Cash flows from investing activities | ||||||||
Purchases of property and equipment | (5 | ) | (22 | ) | ||||
Investment in equity method investees | — | (813 | ) | |||||
Sales of investments in debt securities | — | 2,502 | ||||||
Maturities of investments in debt securities | 15,000 | 19,603 | ||||||
Purchases of investments in debt securities | — | (1,497 | ) | |||||
Net cash provided by investing activities | 14,995 | 19,773 | ||||||
Cash flows from financing activities | ||||||||
Payments related to tax withholding | (26 | ) | (137 | ) | ||||
Net cash used in financing activities | (26 | ) | (137 | ) | ||||
Net increase in cash, cash equivalents and restricted cash | 8,661 | 7,349 | ||||||
Cash, cash equivalents and restricted cash, beginning of period | 40,507 | 17,547 | ||||||
Cash, cash equivalents and restricted cash, end of period | $ | 49,168 | $ | 24,896 | ||||
Supplemental disclosure: | ||||||||
Cash paid for taxes | $ | — | $ | 177 | ||||
Cash paid for operating leases | 134 | 131 | ||||||
Right-of-use | — | 3,965 |
Three Months Ended March 31, | |||||||||||||||||||||||
(Unaudited and in thousands) | 2024 | 2023 | |||||||||||||||||||||
Net loss | $ | (5,035) | $ | (7,751) | |||||||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||
Unrealized gain on available for sale securities | — | 40 | |||||||||||||||||||||
Total comprehensive loss | $ | (5,035) | $ | (7,711) |
(Unaudited and in thousands) | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | 52,853 | $ | 5 | $ | 358,760 | $ | (40) | $ | (241,099) | $ | 117,626 | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | (7,751) | (7,751) | |||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation, net | 108 | — | 1,242 | — | — | 1,242 | |||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | 40 | — | 40 | |||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2023 | 52,961 | $ | 5 | $ | 360,002 | $ | — | $ | (248,850) | $ | 111,157 | ||||||||||||||||||||||||||||||||||||
Balance at December 31, 2023 | 53,287 | $ | 5 | $ | 362,636 | $ | — | $ | (289,995) | $ | 72,646 | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | (5,035) | (5,035) | |||||||||||||||||||||||||||||||||||||||||
Dividends declared | — | — | — | — | (1,333) | (1,333) | |||||||||||||||||||||||||||||||||||||||||
Stock-based compensation, net | 19 | — | 683 | — | — | 683 | |||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2024 | 53,306 | $ | 5 | $ | 363,319 | $ | — | $ | (296,363) | $ | 66,961 | ||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||
(Unaudited and in thousands) | 2024 | 2023 | |||||||||
Cash flows from operating activities | |||||||||||
Net loss | $ | (5,035) | $ | (7,751) | |||||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | |||||||||||
Change in fair value of warrant liability | 30 | 74 | |||||||||
Additions to content assets | (426) | (3,723) | |||||||||
Change in content liabilities | (333) | (1,206) | |||||||||
Amortization of content assets | 5,215 | 5,852 | |||||||||
Depreciation and amortization expenses | 117 | 127 | |||||||||
Amortization of premiums and accretion of discounts associated with investments in debt securities, net | — | 26 | |||||||||
Stock-based compensation | 689 | 1,267 | |||||||||
Equity method investment loss | 1,756 | 219 | |||||||||
Other non-cash items | 122 | 121 | |||||||||
Changes in operating assets and liabilities | |||||||||||
Accounts receivable | (116) | 1,200 | |||||||||
Other assets | 502 | 944 | |||||||||
Accounts payable | (1,477) | 1,440 | |||||||||
Accrued expenses and other liabilities | (419) | (4,514) | |||||||||
Deferred revenue | 41 | (384) | |||||||||
Net cash provided by (used in) operating activities | 666 | (6,308) | |||||||||
Cash flows from investing activities | |||||||||||
Purchases of property and equipment | — | (5) | |||||||||
Maturities of investments in debt securities | — | 15,000 | |||||||||
Net cash provided by investing activities | — | 14,995 | |||||||||
Cash flows from financing activities | |||||||||||
Payments related to tax withholding | (6) | (26) | |||||||||
Net cash used in financing activities | (6) | (26) | |||||||||
Net increase in cash, cash equivalents and restricted cash | 660 | 8,661 | |||||||||
Cash, cash equivalents and restricted cash, beginning of period | 38,215 | 40,507 | |||||||||
Cash, cash equivalents and restricted cash, end of period | $ | 38,875 | $ | 49,168 | |||||||
Supplemental disclosure: | |||||||||||
Cash refund for taxes | $ | (2) | $ | — | |||||||
Cash paid for operating leases | $ | 138 | $ | 134 | |||||||
(In thousands) | Spiegel Venture | Nebula | Total | ||||||||||||||
Balance at December 31, 2023 | $ | 1,736 | $ | 4,618 | $ | 6,354 | |||||||||||
Equity method investment loss | (1,519) | (237) | (1,756) | ||||||||||||||
Balance at March 31, 2024 | $ | 217 | $ | 4,381 | $ | 4,598 |
Spiegel Venture | Nebula | Total | ||||||||||
(in thousands) | ||||||||||||
Balance, December 31, 2022 | $ | 2,899 | $ | 7,867 | $ | 10,766 | ||||||
Equity method investment income (loss) | 28 | (247 | ) | (219 | ) | |||||||
Balance, March 31, 2023 | $ | 2,927 | $ | 7,620 | $ | 10,547 | ||||||
(In thousands) | March 31, 2024 | December 31, 2023 | |||||||||
Cash and cash equivalents | $ | 38,750 | $ | 37,715 | |||||||
Restricted cash1 | 125 | 500 | |||||||||
Cash and cash equivalents and restricted cash | $ | 38,875 | $ | 38,215 | |||||||
1 Restricted cash included cash deposits required by a bank as collateral related to corporate credit card agreements. |
March 31, | December 31, | |||||||
2023 | 2022 | |||||||
(in thousands) | ||||||||
Cash and cash equivalents | $ | 48,668 | $ | 40,007 | ||||
Restricted cash | 500 | 500 | ||||||
Cash, cash equivalents and restricted cash | $ | 49,168 | $ | 40,507 | ||||
As of March 31, 2023 | As of December 31, 2022 | |||||||||||||||||||||||||||||||
Cash and Cash Equivalents | Short-term Investments | Investments (non-current) | Total | Cash and Cash Equivalents | Short-term Investments | Investments (non-current) | Total | |||||||||||||||||||||||||
(in thousands) | (in thousands) | |||||||||||||||||||||||||||||||
Level 1 Securities | ||||||||||||||||||||||||||||||||
Money market funds | $ | 47,272 | $ | — | — | $ | 47,272 | $ | 17,724 | $ | — | — | $ | 17,724 | ||||||||||||||||||
Total Level 1 Securities | $ | 47,272 | — | — | $ | 47,272 | $ | 17,724 | — | — | $ | 17,724 | ||||||||||||||||||||
Level 2 Securities | ||||||||||||||||||||||||||||||||
Corporate debt securities | — | — | — | — | — | $ | 14,986 | — | $ | 14,986 | ||||||||||||||||||||||
Total Level 2 Securities | — | — | — | — | — | $ | 14,986 | — | $ | 14,986 | ||||||||||||||||||||||
Total | $ | 47,272 | — | — | $ | 47,272 | $ | 17,724 | $ | 14,986 | — | $ | 32,710 | |||||||||||||||||||
(In thousands) | Cash and Cash Equivalents | ||||||||||||||||||||||||||||||||||
March 31, 2024 | December 31, 2023 | ||||||||||||||||||||||||||||||||||
Level 1 securities: | |||||||||||||||||||||||||||||||||||
Money market funds | $ | 36,544 | $ | 36,072 | |||||||||||||||||||||||||||||||
Total Level 1 securities | $ | 36,544 | $ | 36,072 | |||||||||||||||||||||||||||||||
As of December 31, 2022 | ||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||||
(in thousands) | ||||||||||||||||
Debt Securities: | ||||||||||||||||
Corporate | $ | 15,026 | — | $ | (40 | ) | $ | 14,986 | ||||||||
Total | $ | 15,026 | — | $ | (40 | ) | $ | 14,986 | ||||||||
As of | ||||||||
March 31, | December 31, | |||||||
2023 | 2022 | |||||||
(in thousands) | ||||||||
Licensed content, net | ||||||||
Released, less amortization | $ | 11,790 | $ | 11,154 | ||||
Prepaid and unreleased | 3,086 | 4,014 | ||||||
14,876 | 15,168 | |||||||
Produced content, net | ||||||||
Released, less amortization | 32,332 | 33,094 | ||||||
In production | 19,165 | 20,240 | ||||||
51,497 | 53,334 | |||||||
Total | $ | 66,373 | $ | 68,502 | ||||
(in thousands) | March 31, 2024 | December 31, 2023 | |||||||||
Licensed content, net: | |||||||||||
Released, less amortization and impairment1 | $ | 10,221 | $ | 8,271 | |||||||
Prepaid and unreleased | 4,966 | 8,357 | |||||||||
Total Licensed content, net | 15,187 | 16,628 | |||||||||
Produced content, net: | |||||||||||
Released, less amortization and impairment2 | 23,425 | 22,880 | |||||||||
In production | 1,542 | 5,435 | |||||||||
Total produced content, net | 24,967 | 28,315 | |||||||||
Total content assets | $ | 40,154 | $ | 44,943 | |||||||
Three Months Ended March 31, | |||||||||||||||||||||||
(in thousands) | 2024 | 2023 | |||||||||||||||||||||
Licensed content | $ | 1,698 | $ | 1,945 | |||||||||||||||||||
Produced content | 3,517 | 3,907 | |||||||||||||||||||||
Total | $ | 5,215 | $ | 5,852 |
Three Months Ended March 31, | ||||||||
2023 | 2022 | |||||||
(in thousands) | ||||||||
Licensed content | $ | 1,945 | $ | 2,999 | ||||
Produced content | 3,907 | 6,039 | ||||||
Total | $ | 5,852 | $ | 9,038 | ||||
(in thousands) | March 31, 2024 | December 31, 2023 | |||||||||
Private Placement Warrants | $ | 74 | $ | 44 | |||||||
As of March 31, 2023 | As of December 31, 2022 | |||||||
(in thousands) | ||||||||
Level 3 | ||||||||
Private Placement Warrants | $ | 331 | $ | 257 | ||||
Total Level 3 | $ | 331 | $ | 257 | ||||
Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | 2024 | 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Direct Business: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Direct-to-Consumer | 8,068 | 67 | % | 7,480 | 60 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Partner Direct Business | 1,462 | 12 | % | 1,102 | 9 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Direct Business | 9,530 | 79 | % | 8,582 | 69 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Content Licensing: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Library sales | 868 | 7 | % | 817 | 7 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Presales | 296 | 2 | % | 1,201 | 10 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Content Licensing | 1,164 | 10 | % | 2,018 | 16 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bundled Distribution | 1,142 | 10 | % | 1,416 | 11 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Enterprise | 68 | 1 | % | 97 | 1 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | 97 | 1 | % | 274 | 2 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total revenues | $ | 12,001 | $ | 12,387 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||||
2023 | 2022 | |||||||||||||||
(in thousands, except percentages) | ||||||||||||||||
Subscriptions – O&O Service | $ | 6,642 | 54 | % | $ | 7,307 | 41 | % | ||||||||
Subscriptions – App Services | 878 | 7 | % | 1,048 | 6 | % | ||||||||||
Subscriptions – Total | 7,520 | 61 | % | 8,355 | 47 | % | ||||||||||
License Fees – Partner Direct | 1,102 | 9 | % | 1,143 | 7 | % | ||||||||||
License Fees – Bundled Distribution | 1,473 | 12 | % | 3,767 | 21 | % | ||||||||||
License Fees – Content Licensing | 2,018 | 16 | % | 4,248 | 24 | % | ||||||||||
License Fees – Total | 4,593 | 37 | % | 9,158 | 52 | % | ||||||||||
Other – Total (1) | 274 | 2 | % | 114 | 1 | % | ||||||||||
Total Revenues | $ | 12,387 | $ | 17,627 | ||||||||||||
Remainder of Year Ending December 31, 2024 | Year Ended December 31, | ||||||||||||||||||||||||||||||||||
(in thousands) | 2025 | 2026 | 2027 | Thereafter | Total | ||||||||||||||||||||||||||||||
Remaining performance obligations | $ | 1,192 | $ | 613 | $ | 92 | $ | 46 | $ | 20 | $ | 1,963 |
Remainder of year ending December 31, | For the years ending December 31, | |||||||||||||||||||||||||||
2023 | 2024 | 2025 | 2026 | 2027 | Thereafter | Total | ||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||||||
Remaining Performance Obligations | $ | 5,695 | $ | 4,156 | $ | 2,096 | $ | 193 | $ | 31 | $ | 195 | $ | 12,366 |
March 31, 2024 | December 31, 2023 | ||||||||||
Exercise price | $ | 11.50 | $ | 11.50 | |||||||
Stock price (CURI) | $ | 1.07 | $ | 0.54 | |||||||
Expected volatility | 90.00 | % | 100.00 | % | |||||||
Expected warrant term (years) | 1.5 | 1.8 | |||||||||
Risk-free interest rate | 4.81 | % | 4.23 | % | |||||||
Dividend yield | 2.3 | % | 0 | % | |||||||
Fair Value per Private Placement Warrant | $ | 0.02 | $ | 0.01 |
As of March 31, 2023 | As of December 31, 2022 | |||||||
Exercise price | $ | 11.50 | $ | 11.50 | ||||
Stock price (CURI) | $ | 1.35 | $ | 1.14 | ||||
Expected volatility | 79.00 | % | 77.00 | % | ||||
Expected warrant term (years) | 2.5 | 2.8 | ||||||
Risk-free interest rate | 3.94 | % | 4.22 | % | ||||
Dividend yield | 0 | % | 0 | % | ||||
Fair Value per Private Placement Warrant | $ | 0.09 | $ | 0.07 |
Three months ended March 31, | ||||||||
2023 | 2022 | |||||||
(in thousands, except per share data) | ||||||||
Numerator - Basic and Diluted EPS: | ||||||||
Net loss | $ | (7,751 | ) | $ | (15,892 | ) | ||
Denominator - Basic and Diluted EPS: | ||||||||
Weighted–average shares | 52,950 | 52,750 | ||||||
Net loss per share - Basic and Diluted | $ | (0.15 | ) | $ | (0.30 | ) | ||
(In thousands except per share amounts) | Three Months Ended March 31, | ||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||
Numerator — Basic and Diluted EPS: | |||||||||||||||||||||||
Net loss | $ | (5,035) | $ | (7,751) | |||||||||||||||||||
Denominator — Basic and Diluted EPS: | |||||||||||||||||||||||
Weighted–average shares | 53,301 | 52,950 | |||||||||||||||||||||
Net loss per share — Basic and Diluted | $ | (0.09) | $ | (0.15) |
Antidilutive shares excluded: | March 31, | |||||||
2023 | 2022 | |||||||
(in thousands) | ||||||||
Options | 4,630 | 5,293 | ||||||
Restricted Stock Units | 1,030 | 1,020 | ||||||
Warrants | 6,730 | 6,730 | ||||||
Total | 12,390 | 13,043 | ||||||
Three Months Ended March 31, | |||||||||||||||||||||||
(in thousands) | 2024 | 2023 | |||||||||||||||||||||
Options | 31 | 4,630 | |||||||||||||||||||||
Restricted stock units | 2,478 | 1,030 | |||||||||||||||||||||
Warrants | 6,730 | 6,730 | |||||||||||||||||||||
Total | 9,239 | 12,390 |
Number of Shares Available for Issuance Under the Plan | Stock Options | Restricted Stock Units | |||||||||||||||||||||||||||
(in thousands except share price and fair value amounts) | Number of Shares | Weighted- Average Exercise Price | Number of Shares | Weighted- Average Grant Date Fair Value | |||||||||||||||||||||||||
Balance at December 31, 2023 | 4,762 | 32 | $ | 5.79 | 2,058 | $ | 2.57 | ||||||||||||||||||||||
Granted | (469) | — | — | 469 | 0.54 | ||||||||||||||||||||||||
RSUs vested | 12 | — | — | (31) | 12.98 | ||||||||||||||||||||||||
Forfeited or expired | 20 | (2) | 5.88 | (18) | 10.61 | ||||||||||||||||||||||||
Balance at March 31, 2024 | 4,325 | 31 | $ | 5.30 | 2,478 | $ | 1.95 |
Stock Options | Restricted Stock Units | |||||||||||||||||||
Number of Shares Available for Issuance Under the Plan | Number of Shares | Weighted- Average Exercise Price | Number of Shares | Weighted- Average Grant Date Fair Value | ||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||
Balance at December 31, 2022 | 1,815 | 4,632 | $ | 7.13 | 759 | $ | 7.14 | |||||||||||||
Granted | (342 | ) | — | — | 342 | 1.41 | ||||||||||||||
Options exercised and RSUs vested | 18 | — | — | (49 | ) | 10.27 | ||||||||||||||
Forfeited or expired | 23 | (2 | ) | 5.88 | (21 | ) | 9.85 | |||||||||||||
Balance at March 31, 2023 | 1,514 | 4,630 | $ | 7.13 | 1,030 | $ | 4.89 | |||||||||||||
Three months ended March 31, | ||||||
2023 | 2022 | |||||
Dividend yield | N/A | 0 | % | |||
Expected volatility | N/A | 60% - 65 | % | |||
Expected term (years) | N/A | 6.00 - 6.50 | ||||
Risk-free interest rate | N/A | 1.40% - 2.44 | % | |||
Weighted average grant date fair value | N/A | $2.30 | ||||
(in thousands) | ||||||
Stock-based compensation - Options | $777 | $967 | ||||
Stock-based compensation - RSUs | $490 | $821 |
(stock-based compensation in thousands) | Three Months Ended March 31, | ||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||
Stock-based compensation — Options | $ | 5 | $ | 777 | |||||||||||||||||||
Stock-based compensation — RSUs | $ | 684 | $ | 490 | |||||||||||||||||||
Total stock-based compensation | $ | 689 | $ | 1,267 |
Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
United States | $ | 7,425 | 62 | % | $ | 6,686 | 54 | % | |||||||||||||||||||||||||||||||||||||||
International: | |||||||||||||||||||||||||||||||||||||||||||||||
Netherlands | 208 | 2 | % | 1,246 | 10 | % | |||||||||||||||||||||||||||||||||||||||||
Other | 4,368 | 36 | % | 4,455 | 36 | % | |||||||||||||||||||||||||||||||||||||||||
Total International | 4,576 | 38 | % | 5,701 | 46 | % | |||||||||||||||||||||||||||||||||||||||||
Total revenue | $ | 12,001 | 100 | % | $ | 12,387 | 100 | % |
Three months ended March 31, | ||||||||||||||||
2023 | 2022 | |||||||||||||||
(in thousands) | ||||||||||||||||
United States | $ | 6,686 | 54 | % | $ | 11,799 | 67 | % | ||||||||
International: | ||||||||||||||||
Netherlands | 1,246 | 10 | % | 65 | 0 | % | ||||||||||
United Kingdom | 562 | 5 | % | 1,901 | 11 | % | ||||||||||
Other | 3,893 | 31 | % | 3,862 | 22 | % | ||||||||||
Total International | 5,701 | 46 | % | 5,828 | 33 | % | ||||||||||
$ | 12,387 | 100 | % | $ | 17,627 | 100 | % | |||||||||
(In thousands) | March 31, 2024 | December 31, 2023 | |||||||||
Accounts receivable | $ | 479 | $ | 811 | |||||||
Accounts payable | $ | 3 | $ | 374 |
Balance sheets: | March 31, | December 31, | ||||||
2023 | 2022 | |||||||
(in thousands) | ||||||||
Accounts receivable | $ | 2,804 | $ | 3,358 | ||||
Accounts payable | 788 | 404 | ||||||
Accrued expenses and other liabilities | 14 | — |
Three Months Ended March 31, | |||||||||||||||||||||||
(In thousands) | 2024 | 2023 | |||||||||||||||||||||
Revenues | $ | 111 | $ | 794 | |||||||||||||||||||
Cost of revenues | $ | 15 | $ | 1,202 |
Statement of operations: | Three months ended March 31, | |||||||
2023 | 2022 | |||||||
(in thousands) | ||||||||
Revenues | $ | 794 | $ | — | ||||
Cost of revenues | 1,202 | 990 |
Three Months Ended March 31, | |||||||||||||||||||||||
(In thousands) | 2024 | 2023 | |||||||||||||||||||||
Operating lease cost | $ | 119 | $ | 121 | |||||||||||||||||||
Variable lease cost | 12 | 13 | |||||||||||||||||||||
Total lease cost | $ | 131 | $ | 134 | |||||||||||||||||||
Three months ended March 31, | ||||||||
2023 | 2022 | |||||||
(in thousands) | ||||||||
Operating lease cost | 121 | 121 | ||||||
Short-term lease cost | — | 18 | ||||||
Variable lease cost | 13 | 11 | ||||||
Total lease cost | 134 | 150 | ||||||
Remaining nine months of 2023 | $ | 409 | ||
2024 | 557 | |||
2025 | 571 | |||
2026 | 585 | |||
2027 | 600 | |||
Thereafter | 3,346 | |||
Total Lease Payments | $ | 6,068 | ||
Less: imputed interest | (1,165 | ) | ||
Present value of total lease liabilities | $ | 4,903 | ||
(In thousands) | |||||
Nine remaining months of 2024 | $ | 419 | |||
2025 | 571 | ||||
2026 | 585 | ||||
2027 | 600 | ||||
2028 | 615 | ||||
Thereafter | 2,731 | ||||
Total lease payments | $ | 5,521 | |||
Less: imputed interest | (961) | ||||
Present value of total lease liabilities | $ | 4,560 |
Item
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Cautionary Note Regarding Forward-looking Statements
Overview
Created
Three Months Ended March 31, | ||||||||||||||||
2023 | 2022 | |||||||||||||||
(in thousands) | ||||||||||||||||
Direct Business | $ | 8,582 | 70 | % | $ | 8,334 | 47 | % | ||||||||
Bundled Distribution | 1,473 | 12 | % | 3,767 | 21 | % | ||||||||||
Content Licensing | 2,018 | 16 | % | 4,248 | 24 | % | ||||||||||
Enterprise | 40 | 0 | % | 1,163 | 7 | % | ||||||||||
Other | 274 | 2 | % | 114 | 1 | % | ||||||||||
|
|
|
| |||||||||||||
Total Revenues | $ | 12,387 | $ | 17,627 | ||||||||||||
|
|
|
|
Three Months Ended March 31, | Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Unaudited and in thousands) | 2024 | 2023 | Total | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Direct Business | $ | 9,530 | $ | 8,582 | $ | 948 | 11 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
Content Licensing | 1,164 | 2,018 | (854) | (42 | %) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bundled Distribution | 1,142 | 1,416 | (274) | (19 | %) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Enterprise | 68 | 97 | (29) | n/m | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | 97 | 274 | (177) | (65 | %) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total revenue | 12,001 | 12,387 | (386) | (3 | %) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of revenues | 6,748 | 9,001 | (2,253) | (25 | %) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Advertising and marketing | 3,105 | 3,115 | (10) | — | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
General and administrative | 5,802 | 8,059 | (2,257) | (28 | %) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total operating expenses | 15,655 | 20,175 | (4,520) | (22 | %) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating loss | (3,654) | (7,788) | 4,134 | (53 | %) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other income (expense) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in fair value of warrant liability | (30) | (74) | 44 | n/m | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest and other income (expense) | 439 | 388 | 51 | n/m | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity method investment loss | (1,756) | (219) | (1,537) | 702 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss before income taxes | $ | (5,001) | $ | (7,693) | $ | 2,692 | (35 | %) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Provision for income taxes | 34 | 58 | (24) | n/m | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | $ | (5,035) | $ | (7,751) | $ | 2,716 | (35 | %) | |||||||||||||||||||||||||||||||||||||||||||||||||||
* n/m = percentage not meaningful |
18
Our App Services enable access to CuriosityStreamSmart Bundle pricing remains unchanged. However, we may in the future increase the price of these existing subscription plans, which may have a positive effect on almost every major consumer device, including streaming media players like Roku, Apple TV and Amazon Fire TV, major smart TV brands (e.g.our revenue from this line of our business.
In addition to
Three Months Ended March 31, | Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | 2024 | 2023 | Total | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Direct-to-Consumer | 8,068 | 7,480 | 588 | 8 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Partner Direct Business | $ | 1,462 | $ | 1,102 | 360 | 33 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Direct Business | $ | 9,530 | $ | 8,582 | $ | 948 | 41 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, | Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | 2024 | 2023 | Total | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Library sales1 | $ | 868 | $ | 817 | $ | 51 | 6 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
Presales | 296 | 1,201 | (905) | (75 | %) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Content Licensing | 1,164 | 2,018 | (854) | (42 | %) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
1 The 2024 amount included $0.2 million from trade and barter transactions. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In
worldwide.
Our
ads while delivering our content through advertising-based video-on-demand (AVOD), transactional video-on-demand (TVOD), free advertising-supported streaming television (FAST), YouTube and other similar distribution channels.
Key Factors Affecting Results
$0.2 million, or 65%, from the same period in 2023. This decline was largely due to certain short-term marketing partnerships that we entered into during the early part of 2023, including a $0.2 million campaign that we provided through a trade and barter arrangement, which were not renewed in 2024.
streaming delivery costs, payment processing costs, commission costs, and subtitling and broadcast costs. Producing and co-producing content and commissioned content is generally more costly than content acquired through licenses.
Currently, the main sourcesTable of ourContents
Since the Company was founded in 2015, we have generated the majority of our revenues from consumers directly accessing our content in the form of monthly or annual subscription plans. Currently, most legacy subscribers pay $2.99 per month or $19.99 per year for our standard CuriosityStream service. As of March 27, 2023, we increased our standard pricing for new subscribers to this service to $4.99 per month or $39.99 per year. We also provide awith Smart Bundle service for $9.99 per month or $69.99 per year. Currently,and digital distributor partners, as well as fees owed to the Spiegel Venture related to our Smart Bundle pricing and pricing for most legacy subscribers remain unchanged. However, we may in the future increase the price of these existing subscription plans, which may have a positive effect on our revenue from this line of our business.German SVOD service. We pay a fixed percentage distribution fee to our partners for subscribers accessing our platform via App Services to compensate these partners for access to their customer and subscriber bases. The MVPD, vMVPD and digital distributor partners making up our Partner Direct Businessbusiness pay us a license fee, and host and stream our content to their customers via their own platforms, such as set top boxes in the case of most MVPDs. We do not incur billing, streaming or backend costs associated with content distribution through our MVPD, vMVPD and digital distributor partners.
Operating Costs
Our primary operating costs relate to the
Three Months Ended March 31, | Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | 2024 | 2023 | Total | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Content amortization | $ | 5,215 | $ | 5,852 | $ | (637) | (11 | %) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Other1 | 1,533 | 3,149 | (1,616) | (51 | %) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total cost of revenues | $ | 6,748 | $ | 9,001 | $ | (2,253) | (62 | %) | |||||||||||||||||||||||||||||||||||||||||||||||||||
1 Includes commissions, distribution fees, production and broadcast, promotions and sponsorships, and other expenses. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Company’s primary business model is subscription based as opposed2023. Other cost of revenues also declined due to a model generating revenues at a specific title level. Content assets (licensed and produced) are predominantly monetized as a group and therefore are reviewedreduction in aggregate at a group level when an event or change in circumstances indicates a change in the expected usefulness of the content orrevenue share arrangements, including specifically our arrangement with Nebula that the fair value may be less than unamortized cost. If such changes are identified, the aggregated content library will be statedexpired at the lowerend of unamortized cost or fair value. In addition, unamortized costs for assets that have been, or are expected to be, abandoned are written off. For a discussion of the accounting policies for content impairment write-down2023.
Further, ourMarketing
19
Results of Operations
The Company operates as one reporting segment. The financial data in the following table sets forth selected financial information derived from our unaudited consolidated financial statementsdetails general and administrative costs for the three months ended March 31, 20232024, and March 31, 2022 and shows our results2023:
Three Months Ended March 31, | Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | 2024 | 2023 | Total | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payroll and related | $ | 2,652 | $ | 3,589 | $ | (937) | (26 | %) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Professional services | 1,051 | $ | 1,927 | (876) | (45 | %) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | 689 | 1,267 | (578) | (46 | %) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Technology and subscriptions | 374 | 423 | (49) | (12 | %) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other1 | 1,036 | 853 | 183 | 21 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total general and administrative | $ | 5,802 | $ | 8,059 | $ | (2,257) | (28 | %) | |||||||||||||||||||||||||||||||||||||||||||||||||||
1 Includes facilities costs, depreciation and amortization, insurance, technology and subscriptions, travel and other expenses. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Three months ended March 31, | ||||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | |||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||
Subscriptions | $ | 7,520 | 61 | % | $ | 8,355 | 47 | % | $ | (835 | ) | (10 | %) | |||||||||||
License fees | 4,593 | 37 | % | 9,158 | 52 | % | (4,565 | ) | (50 | %) | ||||||||||||||
Other | 274 | 2 | % | 114 | 1 | % | 160 | 140 | % | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total Revenues | $ | 12,387 | 100 | % | $ | 17,627 | 100 | % | $ | (5,240 | ) | (30 | %) | |||||||||||
Operating expenses | ||||||||||||||||||||||||
Cost of revenues | 9,001 | 45 | % | 11,850 | 32 | % | (2,849 | ) | (24 | %) | ||||||||||||||
Advertising and marketing | 3,115 | 15 | % | 14,768 | 40 | % | (11,653 | ) | (79 | %) | ||||||||||||||
General and administrative | 8,059 | 40 | % | 10,503 | 28 | % | (2,444 | ) | (23 | %) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Total operating expenses | $ | 20,175 | 100 | % | $ | 37,121 | 100 | % | $ | (16,946 | ) | (46 | %) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Operating loss | (7,788 | ) | (19,494 | ) | 11,706 | (60 | %) | |||||||||||||||||
Other income (expense) | ||||||||||||||||||||||||
Change in fair value of warrant liability | (74 | ) | 3,860 | (3,934 | ) | n/m | ||||||||||||||||||
Interest and other income (expense) | 388 | (57 | ) | 445 | n/m | |||||||||||||||||||
Equity method investment loss | (219 | ) | (156 | ) | (63 | ) | 40 | % | ||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Loss before income taxes | $ | (7,693 | ) | $ | (15,847 | ) | $ | 8,154 | (51 | %) | ||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Provision for income taxes | 58 | 45 | 13 | 29 | % | |||||||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||||
Net loss | $ | (7,751 | ) | $ | (15,892 | ) | $ | 8,141 | (51 | %) | ||||||||||||||
|
|
|
|
|
|
|
|
n/m - percentage not meaningful
Revenue
Revenue for the three months ended March 31, 2023, and 2022 was $12.4 million and $17.6 million, respectively. The decrease of $5.2 million, or 30%, is primarily due to decreases of $4.6 million in License Fees revenue and $0.8 million in Subscriptions revenue.
The decrease in Subscriptions revenue resulted primarily from corporate subscriptions related to certain bulk agreements that ended in the third quarter of 2022.
The decrease in License Fees revenue of $4.5 million resulted primarily from a $2.2 million decrease in content licensing arrangements and a decrease of $2.3 million in bundled distribution agreements, compared to the three months ended March 31, 2022.
Operating Expenses
Operating expenses for the three months ended March 31, 2023, and 2022 were $20.2 million and $37.1 million, respectively. The decrease of $17.0 million, or 46%, primarily resulted from the following:
Cost of Revenues: Cost of revenues for the three months ended March 31, 2023, decreased to $9.0 million from $11.8 million for the three months ended March 31, 2022. Cost of revenues primarily includes content amortization, hosting and streaming delivery costs, payment processing costs and distribution fees, commission costs and subtitling and broadcast costs. The decrease of $2.8 million, or 24%, is primarily due to the decrease in content amortization of $3.2 million, which is primarily driven by the decrease in accelerated amortization on certain content licensing arrangements, partially offset by an increase of $0.4 million in foreign language translation and broadcasting fees.
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Advertising & Marketing: Advertising and marketing expenses for the three months ended March 31, 2023, decreased to $3.1 million from $14.8 million for the three months ended March 31, 2022. This decrease of $11.7 million, or 79%, is primarily due to reduced digital marketing spending of $4.2 million, radio advertising spending of $4.1 million and television and social media advertising spending of $3.1 million.
General and Administrative: General and administrative expenses for the three months ended March 31, 2023 decreased to $8.1 million from $10.5 million for the three months ended March 31, 2022. This decrease of $2.4 million, or 23%, is primarily attributable to a decrease of $1.1 million in salaries and benefits expense, a decrease of $0.5 million in stock based compensation, and a decrease of $0.8 million in various other categories.
Operating Loss
Operating loss for the three months ended March 31, 2023 and 2022 was $7.8 million and $19.5 million, respectively. The decrease in our operating loss of $11.7 million, or 60%, resulted from the decrease in operating expenses of $16.9 million, or 46%, partially offset by the decrease in revenue of $5.2 million, or 30%,in each case during the three months ended March 31, 2023, compared to the three months ended March 31, 2022, as described above.
Change in Fair Value of Warrant Liability
For the three months ended March 31, 2023,2024, general and administrative expenses decreased to $5.8 million from $8.1 million for the Company recognized a $0.1same period in 2023. This decrease of $2.3 million, lossor 28%, was primarily the result of lower payroll and related tocosts and stock-based compensation of $0.9 million and 0.6 million, respectively, primarily driven by our smaller average workforce size as well as reduced incentive compensation. Professional services costs also declined by 45% as we streamlined various outside services during the changeyear and brought certain finance and operations functions internal.
Interest and Other Income (Expense)
Interest and other income (expense) for the three months ended March 31, 2023 was $0.4 million income compared to $0.1 million expense for the three months ended March 31, 2022. The increase is primarily related to an increase in interest income during the current period.
values.
Provision for This increase in losses is primarily attributable to write-downs recorded by the Spiegel Venture.
We had a provision for income taxes of $0.1 million in each of
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Net Loss
Net loss for the three months ended March 31, 2023 and 2022 was $7.7 million and $15.9 million, respectively. The decrease in our net loss of $8.2 million, or 51%, is primarily due to the decrease in operating expenses of $16.9 million and an increase in interest and other income (expense) of $0.4 million, partially offset by a decrease in revenue of $5.2 million and change in the fair value of warrant liability of $3.9 million.
investments in institutional money market funds and short-term deposits held at major global financial institutions. We regularly monitor the creditworthiness of the financial institutions and money market fund asset managers with whom we invest our funds, and we maintain a level of liquidity sufficient to allow us to meet our cash needs in both the short term and long term.
Our principal uses of
Flow Analysis
Three months ended March 31, | ||||||||
2023 | 2022 | |||||||
(in thousands) | ||||||||
Net cash used in operating activities | $ | (6,308 | ) | $ | (12,287 | ) | ||
Net cash provided by investing activities | 14,995 | 19,773 | ||||||
Net cash used in financing activities | (26 | ) | (137 | ) | ||||
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Net increase in cash, cash equivalents and restricted cash | $ | 8,661 | $ | 7,349 | ||||
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Cash Flows from 2023:
Three Months Ended March 31, | |||||||||||
(Unaudited and in thousands) | 2024 | 2023 | |||||||||
Net cash used in operating activities | $ | 666 | $ | (6,308) | |||||||
Net cash provided by investing activities | — | 14,995 | |||||||||
Net cash used in financing activities | (6) | (26) | |||||||||
Net increase in cash, cash equivalents and restricted cash | $ | 660 | $ | 8,661 |
During
Three Months Ended March 31, | |||||||||||
(in thousands) | 2024 | 2023 | |||||||||
Net loss | $ | (5,035) | $ | (7,751) | |||||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | |||||||||||
Change in fair value of warrant liability | 30 | 74 | |||||||||
Additions to content assets | (426) | (3,723) | |||||||||
Change in content liabilities | (333) | (1,206) | |||||||||
Amortization of content assets | 5,215 | 5,852 | |||||||||
Stock-based compensation | 689 | 1,267 | |||||||||
Equity interests loss | 1,756 | 219 | |||||||||
Other depreciation, amortization and non-cash items | 239 | 274 | |||||||||
Changes in operating assets and liabilities | (1,469) | (1,314) | |||||||||
Net cash provided by (used in) operating activities | $ | 666 | $ | (6,308) |
The net cash outflow used by operating activities for the three months ended March 31, 2023, was primarily due to our $7.7 million net loss and $1.4 million of net cash used in changes in operating assets and liabilities, partially offset by $2.8 million addback of non-cash expenses net of content additions. The most significant components of non-cash expenses include amortization of content assets of $5.9 million and stock-based compensation expense of $1.3 million, substantially offset by additions to content assets of $3.7 million and the change in content liabilities of $1.2 million. The components of changes in operating assets and liabilities were primarily attributed to a decrease in accrued expenses and other liabilities of $4.5 million and in deferred revenue of $0.4 million, partially offset by an increase in accounts payable of $1.4 million, a decrease in accounts receivable of $1.1 million and a decrease in other assets of $0.9 million.
The netoperating cash outflow used by operating activitiesof $7.0 million.
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Cash Flows from Investing Activities
During
The net cash inflow provided by investing activitiesoutflows. In contrast, for the three months ended March 31,same period in 2023, wasour cash inflows were primarily due to maturities of investments in debt securities of $15.0 million.
The net cash inflow provided by investing activities for the three months ended March 31, 2022, was primarily due to the sale and maturities of investments in debt securities of $22.1 million, partially offset by purchases of investments in debt securities of $1.5 million and investments in Nebula of $0.8 million.
securities.
During the three months ended March 31, 2023 and 2022, we recorded net cash outflow from financing activities of $0.1 million, which is attributable to payments of withholding taxes during the respective periods.
Capital Expenditures
Off Balance Sheet Arrangements
Critical Accounting Policies and Estimates
Content Assets
The Company acquires, licenses and produces content,
The Company recognizes its content assets (licensedSecurities and produced) as “Content assets, net”Exchange Commission on the unaudited consolidated balance sheets. For licenses, the Company capitalizes the fee per title and recordsMarch 25, 2024. This comprehensive discussion helps to ensure that stakeholders have a corresponding liability at the gross amountcomplete understanding of the liability whenaccounting methodologies and principles that influence the license period begins, the cost of the title is known, and the title is accepted and available for streaming. For productions, the Company capitalizes costs associated with the production, including development costs, direct costs, and production overhead.
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Based on factors including historical and estimated viewing patterns, the Company previously amortized the content assets (licensed and produced) in “Cost of revenues” on the unaudited consolidatedfinancial statements of operations on a straight-line basis over the shorter of each title’s contractual window of availability or estimated period of use, beginning with the month of first availability. Starting July 1, 2021, the Company amortizes content assets on an accelerated basis in the initial two months after a title is published on the Company’s platform, as the Company has observed and expects more upfront viewing of content, generally as a result of additional marketing efforts. Furthermore, the amortization of original content is more accelerated than that of licensed content. We review factors that impact the amortization of the content assets on a regular basis and the estimates related to these factors require considerable management judgment. The Company continues to review factors impacting the amortization of content assets on an ongoing basis and will also record amortization on an accelerated basis when there is more upfront use of a title, for instance due to significant content licensing.
The Company’s business model is generally subscription based as opposed to a model generating revenues at a specific title level. Content assets (licensed and produced) are predominantly monetized as a group and therefore are reviewed in aggregate at a group level when an event or change in circumstances indicates a change in the expected usefulness of the content or that the fair value may be less than unamortized cost. If such changes are identified, the aggregated content assets will be stated at the lower of unamortized cost or fair value. In addition, unamortized costs for assets that have been, or are expected to be, abandoned are written off.
Revenue recognition
Subscriptions — O&O Service
The Company generates revenue from monthly subscription fees from its O&O Service. CuriosityStream subscribers enter into month-to-month or annual subscriptions with the Company. The Company bills the monthly subscriber on each subscriber’s monthly anniversary date and recognizes the revenue ratably over each monthly membership period. The annual subscription fees are collected by the Company at the start of the annual subscription period and are recognized ratably over the subsequent twelve-month period. Revenues are presented net of the taxes that are collected from subscribers and remitted to governmental authorities.
herein.
The Company also earns subscription revenues through its App Services. These subscriptions are similar to the O&O Service subscriptions, but are generated based on agreements with certain streaming media players as well as with Smart TV brands and gaming consoles. Under these agreements, the streaming media player typically bills the subscriber directly and then remits the collected subscriptions to the Company, net of a distribution fee. The Company recognizes the gross subscription revenues when earned and simultaneously recognizes the corresponding distribution fees as an expense. The Company is the principal in these relationships as the Company retains control over service delivery to its subscribers.
License Fees — Partner Direct and Bundled Distribution
The Company generates license fee revenues from MVPDs such as Comcast and Cox as well as from vMVPDs such as Amazon and Sling TV (MVPDs and vMVPDs are also referred to as affiliates). Under the terms of the agreements with these affiliates, the Company receives license fees based upon contracted programming rates and subscriber levels reported by the affiliates. In exchange, the Company licenses its content to the affiliates for distribution to their subscribers. The Company earns revenue under these agreements either based on the total number of subscribers multiplied by rates specified in the agreements or based on fixed fee arrangements. These revenues are recognized over the term of each agreement when earned.
License Fees — Content Licensing
The Company has distribution agreements which grant a licensee limited distribution rights to the Company’s programs for varying terms, generally in exchange for a fixed license fee. Revenue is recognized once the content is made available for the licensee to use.
The Company’s performance obligations include (1) access to its SVOD platform via the Company’s O&O Service and App Services, (2) access to the Company’s content assets, and (3) licenses of specific program titles. In contracts containing the right to access the Company SVOD platform, the performance obligation is satisfied as access to the SVOD platform is provided post any free trial period. In contracts which contain access to the Company’s content assets, the performance obligation is satisfied as access to the content is provided. For contracts with licenses of specific program titles, the performance obligation is satisfied as that content is made available for the customer to use.
Recently Adopted Financial Accounting Standards
The information set forth under in Note 2 - Basis of Presentation and Summary of Significant Accounting Policies in the Unaudited Notes to the unaudited consolidated financial statements under the caption “Basis of presentation and summary of significant accounting policies”Interim Consolidated Financial Statements is incorporated herein by reference.
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ItemITEM 3. Quantitative and Qualitative Disclosures About Market Risk
QUANTITATIVE AND QUALITATIVE DISCLOSURES REGARDING MARKET RISK
Item
Disclosure Controls and Procedures
CONTROLS AND PROCEDURES
Changes in Internal Control Over Financial Reporting
2024.
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Item
LEGAL PROCEEDINGS
Item
RISK FACTORS
Item
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Item
DEFAULTS UPON SENIOR SECURITIES
Item
MINE SAFETY DISCLOSURES
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None.
Item
EXHIBITS
Incorporated By Reference | |||||||||||||||||||||||||||||||||||||||
Exhibit No. | Description | Form | File No. | Exhibit | Filing Date | Filed/Furnished Herewith | |||||||||||||||||||||||||||||||||
3.2 |
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31.1 | |||||||||||||||||||||||||||||||||||||||
| X | ||||||||||||||||||||||||||||||||||||||
31.2 | X | ||||||||||||||||||||||||||||||||||||||
32.1* | X | ||||||||||||||||||||||||||||||||||||||
101. INS** | Inline XBRL Instance Document | X | |||||||||||||||||||||||||||||||||||||
101. SCH | Inline XBRL Taxonomy Extension Schema Document | X | |||||||||||||||||||||||||||||||||||||
101. CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X | |||||||||||||||||||||||||||||||||||||
101. LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | X | |||||||||||||||||||||||||||||||||||||
101. PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | X | |||||||||||||||||||||||||||||||||||||
101. DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | X | |||||||||||||||||||||||||||||||||||||
104 | Cover Page Interactive Data File (as formatted as Inline XBRL and contained in Exhibit 101) | X |
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CURIOSITYSTREAM INC. | ||||||||||||
Date: May | By: | /s/ Clint Stinchcomb | ||||||||||
Name: | Clint Stinchcomb | |||||||||||
Title: | President and Chief Executive Officer | |||||||||||
(Principal Executive Officer) | ||||||||||||
Date: May | By: | /s/ Peter Westley | ||||||||||
Name: | Peter Westley | |||||||||||
Title: | Chief Financial Officer and Treasurer | |||||||||||
(Principal Financial and Accounting Officer) |
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