Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 27, 2023 | Jun. 30, 2022 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
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 Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 110.5 | ||
Entity Central Index Key | 0001679063 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Amendment Flag | false | ||
Auditor Name | Rosenfield and Company, PLLC | ||
Auditor Firm ID | 5905 | ||
Auditor Location | New York, New York | ||
Class A Common Stock and Class B Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 21,721,760 | ||
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 | 14,067,254 | ||
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, $0.0001 par value per share | ||
Security Exchange Name | NASDAQ | ||
Trading Symbol | CSSEP | ||
9.50% Notes Due 2025 | |||
Document Information [Line Items] | |||
Title of 12(b) Security | 9.50% Notes Due 2025 | ||
Security Exchange Name | NASDAQ | ||
Trading Symbol | CSSEN | ||
Class W Warrants | |||
Document Information [Line Items] | |||
Title of 12(g) Security | Class W Warrants | ||
Trading Symbol | CSSEW | ||
Class Z Warrants | |||
Document Information [Line Items] | |||
Title of 12(g) Security | Class Z Warrants | ||
Trading Symbol | CSSEZ |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
ASSETS | ||
Cash, cash equivalents and restricted cash | $ 18,738,395 | $ 44,286,105 |
Accounts receivable, net of allowance for doubtful accounts of $1,277,597 and $786,830, respectively | 113,963,425 | 60,213,807 |
Prepaid expenses and other current assets | 13,196,180 | 1,904,273 |
Operating lease right-of-use assets | 16,315,342 | |
Content assets, net | 126,090,508 | 63,645,396 |
Intangible assets, net | 305,425,709 | 30,199,034 |
Goodwill | 260,748,057 | 39,986,530 |
Other assets, net | 29,401,793 | 4,774,925 |
Total assets | 883,879,409 | 245,010,070 |
LIABILITIES AND EQUITY | ||
Accounts payable | 50,960,682 | 12,547,652 |
Accrued expenses | 87,817,015 | 22,094,505 |
Due to affiliated companies | 3,778,936 | 489,959 |
Programming obligations | 55,883,788 | 1,641,250 |
Film library acquisition obligations | 39,750,121 | 24,673,866 |
Accrued participation costs | 28,695,713 | 12,323,329 |
Debt, net | 479,653,611 | 54,859,599 |
Contingent consideration | 7,311,949 | 9,764,256 |
Put option obligation | 11,400,000 | 11,400,000 |
Operating lease liabilities | 18,079,469 | |
Other liabilities | 20,800,186 | 3,616,501 |
Total liabilities | 804,131,470 | 153,410,917 |
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; 4,496,345 and 3,698,318 shares issued and outstanding, respectively; redemption value of $112,408,625 and $92,457,950, respectively | 450 | 370 |
Additional paid-in capital | 355,185,280 | 240,609,345 |
Deficit | (247,752,446) | (136,462,244) |
Accumulated other comprehensive income | 47,528 | 571 |
Class A common stock held in treasury, at cost (2,422,842 and 944,502 shares, respectively) | (28,165,913) | (13,202,407) |
Total stockholders' equity | 79,317,224 | 90,947,300 |
Noncontrolling interests | 430,715 | 651,853 |
Total equity | 79,747,939 | 91,599,153 |
Total liabilities and equity | 883,879,409 | 245,010,070 |
Class A Common Stock | ||
Stockholders' Equity: | ||
Common stock value | 1,559 | 899 |
Class B Common Stock | ||
Stockholders' Equity: | ||
Common stock value | $ 766 | $ 766 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Accounts Receivable | $ 1,277,597 | $ 786,830 |
Treasury Stock, Common, Shares | 2,422,842 | 944,502 |
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 | 4,496,345 | 3,698,318 |
Preferred Stock, Shares Outstanding | 4,496,345 | 3,698,318 |
Preferred Stock, Redemption Amount | $ 112,408,625 | $ 92,457,950 |
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 | 15,621,562 | 8,964,330 |
Common Stock, Shares, Outstanding | 13,198,720 | 8,019,828 |
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 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Consolidated Statements of Operations | ||
Net revenues | $ 252,810,110 | $ 110,395,466 |
Costs and expenses | ||
Operating | 215,820,880 | 88,933,738 |
Selling, general and administrative | 93,537,386 | 47,874,241 |
Amortization and depreciation | 20,716,325 | 5,728,051 |
Management and license fees | 18,400,648 | 11,039,547 |
Merger, transaction, and other costs | 21,003,791 | 2,781,507 |
Total costs and expenses | 369,479,030 | 156,357,084 |
Operating loss | (116,668,920) | (45,961,618) |
Interest expense | 27,840,340 | 4,831,175 |
Other non-operating income, net | (5,259,102) | (379,151) |
Loss before income taxes and preferred dividends | (139,250,158) | (50,413,642) |
Income tax (benefit) provision | (37,301,242) | 66,000 |
Net loss before noncontrolling interests and preferred dividends | (101,948,916) | (50,479,642) |
Net loss attributable to noncontrolling interests | (404,664) | (73,458) |
Net loss attributable to Chicken Soup for the Soul Entertainment, Inc. | (101,544,252) | (50,406,184) |
Less: preferred dividends | 9,745,950 | 9,013,540 |
Net loss available to common stockholders | $ (111,290,202) | $ (59,419,724) |
Net loss per common share: | ||
Basic | $ (6.45) | $ (3.96) |
Diluted | $ (6.45) | $ (3.96) |
Weighted-average common shares outstanding: | ||
Basic | 17,261,460 | 15,018,421 |
Diluted | 17,261,460 | 15,018,421 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Consolidated Statements of Comprehensive Loss | ||
Net loss | $ (101,948,916) | $ (50,479,642) |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | 86,365 | 1,372 |
Comprehensive loss attributable to noncontrolling interests | (39,408) | (801) |
Comprehensive loss | $ (101,901,959) | $ (50,479,071) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Class A Common Stock Common Stock 1091 Media, LLC | Class A Common Stock Common Stock Redbox Entertainment Inc. | Class A Common Stock Common Stock Landmark Studios Group | Class A Common Stock Common Stock HPS Investment Partners, LLC | Class A Common Stock Common Stock | Class B Common Stock Common Stock | Preferred Stock 1091 Media, LLC | Preferred Stock | Additional Paid-in Capital 1091 Media, LLC | Additional Paid-in Capital Redbox Entertainment Inc. HPS Investment Partners, LLC | Additional Paid-in Capital Redbox Entertainment Inc. | Additional Paid-in Capital HPS Investment Partners, LLC | Additional Paid-in Capital | Deficit | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Subsidiary convertible Preferred Stock | Noncontrolling Interests Locomotive Global Inc. | Noncontrolling Interests | Locomotive Global Inc. | 1091 Media, LLC | Redbox Entertainment Inc. HPS Investment Partners, LLC | Redbox Entertainment Inc. | Total |
Balance at Dec. 31, 2020 | $ 516 | $ 766 | $ 210 | $ 106,425,548 | $ (77,247,982) | $ (632,729) | $ 36,350,000 | $ 205,462 | $ 65,101,791 | |||||||||||||||
Balance (in shares) at Dec. 31, 2020 | 5,157,053 | 7,654,506 | 2,098,318 | |||||||||||||||||||||
Share based compensation - stock options | 2,684,307 | 2,684,307 | ||||||||||||||||||||||
Share based compensation - common stock | 2,563,500 | 2,563,500 | ||||||||||||||||||||||
Shares issued to directors | $ 2 | (2) | ||||||||||||||||||||||
Shares issued to directors (in shares) | 5,135 | |||||||||||||||||||||||
Issuance of common stock | $ 303 | 95,310,510 | 95,310,813 | |||||||||||||||||||||
Issuance of common stock (in shares) | 3,023,727 | |||||||||||||||||||||||
Issuance of preferred stock, net | $ 160 | 36,349,840 | $ (36,350,000) | |||||||||||||||||||||
Issuance of preferred stock, net (in shares) | 1,600,000 | |||||||||||||||||||||||
Stock options exercised | $ 52 | 2,989,715 | 2,989,767 | |||||||||||||||||||||
Stock options exercised (in shares) | 522,871 | |||||||||||||||||||||||
Warrant exercises | $ 12 | 285,941 | 285,953 | |||||||||||||||||||||
Warrant exercises (in shares) | 119,988 | |||||||||||||||||||||||
Acquisition of subsidiary noncontrolling interest | (6,000,000) | (6,000,000) | ||||||||||||||||||||||
Purchase of treasury stock | (12,569,678) | (12,569,678) | ||||||||||||||||||||||
Dividends on preferred stock | (9,013,540) | (9,013,540) | ||||||||||||||||||||||
Common stock grant | $ 14 | (14) | ||||||||||||||||||||||
Common stock grant (in shares) | 135,556 | |||||||||||||||||||||||
Elimination of noncontrolling interests | 205,462 | (205,462) | ||||||||||||||||||||||
Net loss attributable to noncontrolling interest | (73,458) | (73,458) | ||||||||||||||||||||||
Business combination | 724,510 | 724,510 | ||||||||||||||||||||||
Other comprehensive gain (loss), net | $ 1,372 | 1,372 | ||||||||||||||||||||||
Comprehensive income (loss) attributable to noncontrolling interests | (801) | 801 | 801 | |||||||||||||||||||||
Net loss | (50,406,184) | (50,406,184) | ||||||||||||||||||||||
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 | 3,382,529 | 3,382,529 | ||||||||||||||||||||||
Share based compensation - common stock | 255,000 | 255,000 | ||||||||||||||||||||||
Share based compensation - Redbox | $ 2,232,182 | $ 2,232,182 | ||||||||||||||||||||||
Issuance of common stock | $ 8 | $ 45 | 3,630,422 | 3,630,467 | ||||||||||||||||||||
Issuance of common stock (in shares) | 84,000 | 456,573 | ||||||||||||||||||||||
Issuance of preferred stock, net | $ 72 | 17,079,943 | 17,080,015 | |||||||||||||||||||||
Issuance of preferred stock, net (in shares) | 718,027 | |||||||||||||||||||||||
Stock options exercised | $ 4 | 301,696 | 301,700 | |||||||||||||||||||||
Stock options exercised (in shares) | 40,000 | |||||||||||||||||||||||
Warrant exercises | $ 98 | $ (98) | ||||||||||||||||||||||
Warrant exercises (in shares) | 1,011,530 | |||||||||||||||||||||||
Warrant Issued - HPS | $ 14,920,068 | $ 14,920,068 | ||||||||||||||||||||||
Stock issued under ESPP | $ 2 | 200,589 | 200,591 | |||||||||||||||||||||
Stock issued under ESPP (in shares) | 27,934 | |||||||||||||||||||||||
Locomotive business combination / 1091 business combination / Redbox business combination | $ 37 | $ 466 | $ 8 | $ 5,283,705 | $ 68,482,415 | $ 144,118 | $ 144,118 | $ 5,283,750 | $ 68,482,881 | |||||||||||||||
Locomotive business combination / 1091 business combination / Redbox business combination (in shares) | 375,000 | 4,662,195 | 80,000 | |||||||||||||||||||||
Acquisition of subsidiary noncontrolling interest | (2,200,000) | (2,199,992) | ||||||||||||||||||||||
Purchase of treasury stock | (13,956,022) | (13,956,022) | ||||||||||||||||||||||
Dividends on preferred stock | (9,745,950) | (9,745,950) | ||||||||||||||||||||||
RSU vesting, net of shares withheld for payroll taxes | 1,007,484 | (1,007,484) | ||||||||||||||||||||||
Net loss attributable to noncontrolling interest | 86,365 | (404,664) | (318,299) | |||||||||||||||||||||
Other comprehensive gain (loss), net | (39,408) | (39,408) | ||||||||||||||||||||||
Comprehensive income (loss) attributable to noncontrolling interests | 39,408 | 39,408 | ||||||||||||||||||||||
Net loss | (101,544,252) | (101,544,252) | ||||||||||||||||||||||
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 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from Operating Activities: | ||
Net loss | $ (101,948,916) | $ (50,479,642) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Share-based compensation | 5,869,711 | 5,247,807 |
Content asset amortization | 74,523,774 | 48,777,684 |
Amortization of deferred financing and debt discount costs | 1,057,175 | 495,974 |
Amortization and depreciation of intangibles, property and equipment | 23,565,986 | 7,408,155 |
Bad debt and video return expense | 3,316,112 | 2,522,629 |
Loss on impairment of intangible assets & goodwill | 3,500,000 | 2,044,647 |
Loss on debt extinguishment | 485,541 | |
Deferred income taxes | (35,092,120) | |
Changes in operating assets and liabilities: | ||
Trade accounts receivable | (34,663,305) | (19,626,535) |
Prepaid expenses and other assets | (14,091,077) | (431,249) |
Content assets | (92,632,179) | (48,402,762) |
Accounts payable, accrued expenses and other payables | 18,049,218 | 7,902,826 |
Film library acquisition and programming obligations | 69,318,793 | 13,001,238 |
Accrued participation costs | 21,070,077 | (212,322) |
Other liabilities | (5,265,790) | 1,381,931 |
Net cash used in operating activities | (62,937,000) | (30,369,619) |
Cash flows from Investing Activities: | ||
Expenditures for property and equipment | (5,811,993) | (1,605,795) |
Business combination, net of cash acquired | 6,249,074 | (19,419,204) |
Increase in due from affiliated companies | 5,648,652 | |
Net cash used in investing activities | 437,081 | (15,376,347) |
Cash flows from Financing Activities: | ||
Principal payments on debt | (5,649,459) | |
Repurchase of common stock | (13,956,022) | (12,569,678) |
Payment of contingent consideration | (7,150,000) | (8,627,284) |
Acquisition of noncontrolling interests | (749,992) | (6,000,000) |
Payments of revolving loan | (26,119,991) | |
Payments on capital leases | (879,384) | |
Proceeds from 9.50% notes due 2025, net | 11,094,946 | |
Payments on film acquisition advances | (5,209,111) | |
Proceeds from other debt | 2,562,911 | |
Payments on other debt | (1,479,558) | |
Proceeds from issuance of preferred stock | 17,080,015 | |
Proceeds from revolving loan | 55,313,051 | 17,756,482 |
Proceeds from film acquisition advances | 8,521,115 | |
Proceeds from exercise of stock options and warrants | 502,291 | 3,275,720 |
Increase in due to affiliated companies | 3,288,977 | 489,959 |
Dividends paid to preferred stockholders | (9,583,871) | (8,688,580) |
Net cash provided by financing activities | 36,865,844 | 75,297,973 |
Effect of foreign exchanges on cash, cash equivalents and restricted cash | 86,365 | 1,372 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (25,547,710) | 29,553,379 |
Cash, cash equivalents and restricted cash at beginning of period | 44,286,105 | 14,732,726 |
Cash, cash equivalents and restricted cash at end of the period | 18,738,395 | 44,286,105 |
Supplemental data: | ||
Cash paid for interest | 5,375,480 | 4,783,413 |
Non-cash investing activities: | ||
Property and equipment in accounts payable and accrued expenses | 676,187 | $ 383,015 |
Non-cash financing activities: | ||
Class A common stock and additional consideration for acquisition of noncontrolling interest | 2,228,680 | |
Class A common stock and assumption of warrants for Redbox Merger | $ 70,005,148 | |
Warrant issued in conjunction with HPS credit facility | 14,920,068 | |
Non-cash film acquisition advances | $ 18,339,885 | |
Preferred stock issued for Crackle Plus acquisition | 40,000,000 | |
Class A Common Stock | ||
Cash flows from Financing Activities: | ||
Proceeds from issuance of Class A common stock | $ 3,630,467 | $ 95,310,813 |
Class A Common Stock | 1091 Media, LLC | ||
Non-cash financing activities: | ||
Preferred stock issued for Crackle Plus acquisition | 3,303,750 | |
Preferred Stock | 1091 Media, LLC | ||
Non-cash financing activities: | ||
Preferred stock issued for Crackle Plus acquisition | 1,980,000 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) | Dec. 31, 2022 | Apr. 20, 2022 | Dec. 31, 2021 | Jul. 17, 2020 |
9.50% Notes Due 2025 | ||||
Interest rate | 9.50% | 9.50% | 9.50% | 9.50% |
Description of the Business
Description of the Business | 12 Months Ended |
Dec. 31, 2022 | |
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 over 160 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. 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 Discs TM 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. In connection with the acquisition of Redbox, the Company is reassessing its reportable segments. 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 December 31, 2022, the Company had a deficit of $247.8 million since inception and for the year ended December 31, 2022, the Company had a net loss attributable to common stockholders of $111.3 million. The Company believes that with the cash on hand, anticipated operational cash flows, together with equity and or debt offerings in 2023, including the issuance of common and preferred shares, additional film financings, and the ability to enter into an asset-based lending facility (up to $40 million permitted under our HPS credit facility) will be sufficient to meet the Company’s cash requirements beyond the next twelve months. The Company monitors cash flow liquidity, its capital base, operational spending, and leverage ratios with the long-term goal of maintaining Company credit worthiness. See Note 19, Subsequent Events, for additional information. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company and its wholly and majority owned subsidiaries in which a controlling financial interest is maintained and variable interest entities (“VIEs”), where the Company is considered the primary beneficiary, after the elimination of intercompany transactions. The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (‘‘GAAP’’). Reclassifications Certain amounts reported for prior years have been reclassified to conform to the current year’s presentation. The reclassifications have no effect on the reported net loss. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company’s significant estimates include those related to revenue recognition, ultimate revenues, future cash flows of long-lived asset groups and the fair value of indefinite lived intangibles and goodwill. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents include highly liquid investments with original maturities of three months or less and consist primarily of money market funds. Such investments are stated at cost, which approximates fair value. For the years ended December 31, 2022 and 2021, restricted cash was $3.7 million and $1.6 million, respectively. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. 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 is recognized using the straight-line method over the following approximate useful lives: D Useful Life Redbox kiosks and components 3 - 5 years Computers and software 2 - 3 years Leasehold improvements (shorter of life of asset or remaining lease term) 3 - 6 years Office furniture and equipment 5 - 7 years Vehicles 3 - 4 years The value of the Company’s property and equipment as of December 31, 2022 is included in Other assets, net on the Consolidated Balance Sheets and is as follows: December 31, 2022 Redbox kiosks and components $ 13,707,512 Computers and software 13,857,011 Leasehold improvements (shorter of life of asset or remaining lease term) 5,119,077 Office furniture and equipment 1,287,104 Vehicles 2,747,604 Property and equipment, at cost 36,718,308 Accumulated depreciation and amortization (11,570,457) Property and equipment, net $ 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, Stockholder’s Equity, 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 $13.7 million of ARO liabilities are included in Other liabilities on the Consolidated Balance Sheets. Fair Value Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measurements, a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies, is as follows: Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets. Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3—Valuations based on unobservable inputs reflecting the Company’s own assumptions. These valuations require significant judgment and estimates. At December 31, 2022 and 2021, the fair value of the Company’s financial instruments including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, approximated their carrying value due primarily to the relative short-term nature of these instruments. Certain liabilities, including contingent consideration are measured at fair value on a recurring basis. Other assets and liabilities, including television and film content costs, goodwill, intangible assets are adjusted to fair value after initial recognition, only if an impairment charge is recognized. Impairment charges, if applicable, are generally determined using a discounted cash flow (DCF), which is a Level 3 valuation technique. Foreign Currency Translation Assets and liabilities of the Company’s foreign subsidiaries with a functional currency other than the U.S. Dollar are translated into U.S. Dollars using applicable exchange rates at the balance sheet date. Revenue and expenses are translated at average exchange rates effective during the year. The resulting foreign currency translation gains and losses are included as a component of accumulated other comprehensive gain within Stockholders’ Equity on the Company’s Consolidated Balance Sheets. Assets and liabilities of the Company’s foreign subsidiaries for which the functional currency is not the U.S. Dollar are re-measured into U.S. Dollars using applicable exchange rates at the balance sheet date, except nonmonetary assets and liabilities, which are re-measured at the historical exchange rates prevailing when acquired. Revenue and expenses are re-measured at average exchange rates effective during the year. Foreign currency translation gains and losses from re-measurement are included in Other non-operating (income) expense in the accompanying Consolidated Statements of Operations. The amounts of net gain (loss) on foreign currency re-measurement recognized were immaterial for all periods presented. Business Combinations The Company accounts for acquisitions of businesses using the acquisition method of accounting. The purchase price is allocated to the identifiable net assets acquired, including intangible assets, liabilities assumed and contingent liabilities acquired, as well as amounts attributed to noncontrolling interests, are recorded at fair value. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities, if any, is recorded as goodwill. Any transaction costs are expensed as incurred. Determining the fair value of assets acquired and liabilities assumed requires significant judgment, including the selection of valuation methodologies, estimates of future revenue and cash flows and discount rates. See Note 4, Business Combinations, for additional information. Accounts Receivable Accounts receivable are stated at the amounts management expects to collect and are stated net of allowance for uncollectible accounts and video returns. An allowance for doubtful accounts is recorded based on a combination of historical experience, expected economic conditions and industry trends. For the years ended December 31, 2022 and 2021, the provision for doubtful accounts charged to operating expense was $427,270 and $691,406, respectively. Content Assets The Company produces original productions and acquires rights to films and television programming to exhibit on the Company’s AVOD Networks and to distribute to third parties, including sub-distributors. The Company also develops and produces programming for third parties. Original Productions Content assets related to original productions include the unamortized costs of completed, in-process, or in-development long-form and short-form video content produced by the Company. For video content, the Company’s capitalized costs include all direct production and financing costs, capitalized interest when applicable, and production overhead. The costs of producing video content are amortized using the individual-film-forecast method. These costs are amortized in the proportion that current period’s revenue bears to management’s estimate of ultimate revenue expected to be recognized from each production. For an episodic television series, the period over which ultimate revenue is estimated cannot exceed ten years following the date of delivery of the first episode, or, if still in production, five years from the date of delivery of the most recent episode, if later. Film Library The film library includes the cost of acquiring individual title distribution rights or an acquired film library. Films are amortized using the individual-film-forecast-computation method. The film library is stated at the lower of unamortized cost or fair value. Amortization is based upon management’s best estimate of total future, or ultimate revenue. Amortization is adjusted when necessary to reflect increases or decreases in forecasted ultimate revenues. Ultimate revenues for individual films is no longer than 10 years and for an acquired film library, no longer than 20 years. Monetization & Recoverability of Content Content assets (licensed and produced) are predominantly monetized individually and therefore are reviewed at the individual level when an event or change in circumstance indicates a change in the expected usefulness of the content or the fair value may be less than the unamortized cost. The determination of the predominant monetization strategy is made at commencement of the production or license period and the classification of the monetization strategy as individual or group only changes if there is a significant change to the title’s monetization strategy relative to its initial assessment. Original productions, films and acquired film libraries are stated at the lower of amortized cost or estimated fair value. The valuation of content is reviewed at the individual title level or acquired library level, when an event or change in circumstances indicates that the fair value may be less than its unamortized cost and the valuation is based on a DCF methodology with assumptions for cash flows. Key inputs employed in the DCF methodology include estimates of a film ultimate revenue and costs as well as a discount rate. The discount rate utilized in the DCF is based on the weighted average cost of capital of the Company plus a risk premium representing the risk associated with acquiring a film. An impairment charge is recorded in the amount by which the unamortized costs exceed the estimated fair value. Estimates of future revenue involve measurement uncertainties and it is therefore possible that reductions in the carrying value of film library costs may be required because of changes in management’s future revenue estimates. See Note 8, Content Assets, for additional information. Licensed Program Rights and Obligations Programming rights acquired under license agreements are recorded as an asset and a corresponding liability upon commencement of the license period. The programming rights are amortized over the license period based on the expected monetization of each show, straight-line, or a ratable basis. Programming obligations represent the gross commitment amounts to be paid to program suppliers over the life of the contracts. License fees payable to suppliers based on a percentage of advertising revenue generated are reflected in Accrued expenses. Impairment of Long-Lived Assets The Company reviews its long-lived assets, other than goodwill and intangible assets with indefinite lives, for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset grouping may not be recoverable. If the sum of the expected future cash flows, undiscounted and without interest, is less than the carrying amount of the asset, an impairment loss is recognized as the amount by which the carrying amount of the asset exceeds its fair value. The expected cash flows are based on assumptions regarding the Company’s future business outlook and where appropriate, include a residual value based on a revenue market multiple. While the Company continues to review and analyze many factors that can impact its business prospects in the future, its analyses are subjective and are based on conditions existing at and trends leading up to the time the assumptions are made. Actual results could differ from these assumptions. See Note 9, Intangible Assets and Goodwill, for additional information. Goodwill and Intangible Assets Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination which are not individually identified and is allocated to the Company’s reporting units. The Company does not amortize goodwill. Intangible assets with finite lives, which primarily consist of acquired customer bases, non-compete agreements, content rights, brand value, contractual and partner agreements are generally amortized on a straight-line basis over their estimated lives, which range from 3 to 7 years. Amortization expense is included in amortization and depreciation in the Consolidated Statements of Operations. Goodwill and other intangible assets with indefinite lives are tested for impairment on an annual basis and between annual tests if events occur or circumstances change that would more likely than not reduce the fair value its carrying amount. If the carrying value of goodwill or an indefinite-lived intangible asset exceeds fair value, an impairment charge is recognized. The fair value of the Company’s reporting units or indefinite lived intangible assets are based on assumptions regarding its future business outlook. The Company continues to review and analyze many factors that can impact its business prospects in the future, its analyses are subjective and are based on conditions existing at and trends leading up to the time the assumptions are made. Actual results could differ from these assumptions. See Note 9, Intangible Assets and Goodwill, for additional information. Income Taxes The Company records income taxes under the asset and liability method in accordance with FASB ASC Section 740. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. A valuation allowance is established, when necessary, to reduce net deferred tax assets to the amount expected to be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. The Company accounts for uncertain tax positions in accordance with the authoritative guidance issued by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 740: Income Taxes The Company includes interest and penalties related to its uncertain tax positions as part of income tax expense within its Consolidated Statements of Operations. At December 31, 2022 and 2021, the liabilities related to total unrecognized tax benefits were $0.1 million and $0.0 million, respectively. See Note 13, Income Taxes, for additional information. 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 December 31, 2022, $7.3 million was 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 December 31, 2022, $2.3 million of revenue was deferred related to Perks and is included in Accrued expenses in the accompanying Consolidated Balance Sheets. Film Library Acquisition Obligations Film library acquisition obligations represent amounts due in connection with acquiring film distribution rights that have been delivered. Pursuant to the film distribution rights agreements, the Company’s right to distribute films may revert to the licensor if the Company is unable to satisfy its financial obligations with respect to the acquisition of the related distribution rights. See Note 15, Commitments and Contingencies, for additional information. Accrued Participation Costs Parties involved in the production of a title may be compensated in part by contingent payments based on the financial results of a title pursuant to contractual formulas (participations) and by contingent amounts due under provisions of collective bargaining agreements (residuals). Such costs are collectively referred to as participation costs. Participations may be given to creative talent, such as actors or writers, or to entities from whom distribution rights are licensed. Such amounts are estimated based on film ultimate revenues or airings. Related Party Transactions – Due To/Due From Affiliated Companies The Company follows subtopic 850-10 of the FASB ASC for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 the related parties include subsidiaries and affiliates of the Company and Chicken Soup for the Soul Holdings, LLC (“CSS”), the Company’s parent company. The financial statements and accompanying notes include disclosures of material related party agreements and transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. See Note 14, Related Party Transactions, for additional information. Revenue Recognition Revenue from contracts with customers is recognized as contractual performance obligations are satisfied; generally, this occurs at the point in time when the customer has the ability to direct the use and obtain substantially all the benefits of that good or service. The Company’s contractual performance obligations include the licensing or sale of content, production services, or delivery of online advertisements. Revenue is measured at contract inception as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services to customers. The Company also generates revenue through its Redbox Service business by providing installation, merchandising and break-fix services to other kiosk operators. The performance obligations are normally satisfied at the time the service is provided. Revenue from 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. Revenue from a direct sale out of the kiosk of previously rented movies is recognized at the time of sale. Revenue from On Demand rentals or purchases is also recognized at the time of sale. See Note 5, Revenue Recognition, for additional information. Share-Based Compensation The Company’s policy is to issue new shares for purchases under its Long-term Incentive Plan. Share-based compensation expense is estimated at the grant date based on a stock option’s fair value. The determination of the share-based compensation expense related to stock options is calculated using a Black-Scholes-Merton option pricing model and is affected by the Company’s stock price, expected stock price volatility over the term of the awards, expected term, risk free interest rate and expected dividends. The Company records forfeitures as they occur. See Note 6, Share-Based Compensation, for additional information. Employee Benefits 401(k) Plan Redbox had historically sponsored a 401(k) plan for all of its eligible employees. The plan includes optional employee contributions as a percentage of eligible earnings, subject to Internal Revenue Service limitations. The Company matches up to 100% on the first 3% of participating employees’ contributions and 50% on each of the next 2% (up to a maximum of 4% when the participant contributes at least 5%). In connection with the Redbox merger, the Company’s matching contribution to the Redbox 401(k) plan was $604,068 for the year ended December 31, 2022. Matching contributions to the 401(k) plan are expensed as incurred. Advertising Costs Advertising costs are expensed as incurred and included in Selling, general and administrative expenses on the Consolidated Statements of Operations. Advertising expense was $8.2 million and $4.8 million for the years ended December 31, 2022 and 2021, respectively. Treasury Stock Treasury stock is accounted for using the cost method. Earnings (Loss) Per Share Basic earnings (loss) per share is computed based on the weighted average number of shares of all classes of common stock outstanding during the period. Diluted earnings (loss) per share is computed based on the weighted average number of common shares outstanding during the period increased, when applicable, by dilutive common stock equivalents, comprised of Class W warrants, Class Z warrants, Class I warrants, Class II warrants, Class III-A warrants, Class III-B warrants and stock options outstanding. When the Company has a net loss, dilutive common stock equivalents are not included as they would be anti-dilutive. In computing the effect of dilutive common stock equivalents, the Company uses the treasury stock method to calculate the related incremental shares. See Note 7, Earnings per Share, for additional information. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Note 3 – Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under current GAAP. ASU 2016-02 requires that a lessee should recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. ASU 2016-02 was effective for public companies’ fiscal years beginning after December 15, 2018 (including interim periods within those periods) using a modified retrospective approach. Because the Company is an emerging growth company, the Company adopted the new lease accounting standard by applying the new lease guidance at the adoption date on January 1, 2022, and as allowed under the standard, elected not to restate comparative periods. As of January 1, 2022, in connection with the adoption of the new lease accounting standard, the Company recorded an operating lease right-of-use asset totaling $8.6 million with a corresponding lease liability totaling $10 million. Refer to Note 10, Leases, for further details on the adoption of the new standard. In March 2020, FASB issued Accounting Standards Update (“ASU”) No. 2020-04, “Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The amendments in this update provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. The Company adopted ASU-2020-04 in the second quarter of 2021 on a prospective basis and will apply this guidance as contracts are modified through December 2022. The adoption did not have an immediate direct impact on the Company’s consolidated financial statements. The Company does not expect there to be a material impact on the financial statements. In March 2019, FASB issued Accounting Standards Update (“ASU”) No. 2019-02, “Improvements to Accounting for Costs of Films and License Agreements for Program Materials.” The amendments in this ASU align the accounting for production costs of an episodic television series with the accounting for production costs of films. In addition, the ASU modifies certain aspects of the capitalization, impairment, presentation and disclosure requirements under the current film and broadcaster entertainment industry guidance. As the Company is an emerging growth company, the new guidance is effective for fiscal years beginning after December 15, 2020 (fiscal year 2021 for the Company). The new guidance was applied on a prospective basis. The Company adopted ASU 2019-02 in the first quarter of 2021 and the adoption had no material impact to the consolidated financial statements. In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). ASU 2019-12 removes certain exceptions for performing intra-period tax allocations, recognizing deferred taxes for investments, and calculating income taxes in interim periods. The guidance also simplifies the accounting for franchise taxes, transactions that result in a step-up in the tax basis of goodwill, and the effect of enacted changes in tax laws or rates in interim periods. The Company adopted ASU 2019-12 in the first quarter of 2021 and the adoption had no material impact to the consolidated financial statements. In November 2018, the FASB issued ASU No. 2018-18, “Collaborative Arrangements (Topic 808) – Clarifying the Interaction between Topic 808 and Topic 606.” The amendments in this ASU clarify that certain transactions between collaborative arrangement participants should be accounted for as revenue under Topic 606, Revenue from Contracts with Customers, when the collaborative arrangement participant is a customer in the context of a unit of account and precludes recognizing as revenue consideration received from a collaborative arrangement participant if the participant is not a customer. As the Company is an emerging growth company, the new guidance is effective for fiscal years beginning after December 15, 2020 (fiscal year 2021 for the Company). The Company adopted ASU 2018-18 in the first quarter of 2021 and the adoption had no material impact to the consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.” The new guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this update. As the Company is an emerging growth company, the new guidance is effective for fiscal years beginning after December 15, 2020 (fiscal year 2021 for the Company). The Company adopted ASU 2018-15 in the first quarter of 2021 and the adoption had no material impact to the consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted 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 Company does not expect the adoption of the amendments to have a material impact on its consolidated 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 Company does not expect the adoption of the amendments to have a material impact on its consolidated financial statements. 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. The Company does not expect the adoption to have a material impact on our consolidated financial statements. In September 2022, the Financial Accounting Standards Board issued ASU No. 2022-04, “Liabilities – Supplier Finance Programs” (Subtopic 405—50) giving guidance to enhance the transparency of supplier finance programs to allow financial statement users to understand the effect on working capital, liquidity, and cash flows. The new guidance requires disclosure of key terms of the program, including a description of the payment terms, payment timing and assets pledged as security or other forms of guarantees provided to the finance provider or intermediary. Other requirements include the disclosure of the amount that remains unpaid as of the end of the reporting period, a description of where these obligations are presented in the balance sheet and a rollforward of the obligation during the annual period. The guidance is effective in the first quarter of 2023, except for the rollforward, which is effective in 2024. Early adoption is permitted. The Company does not expect the adoption to have a material impact on the 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 consolidated financial statements. |
Business Combination
Business Combination | 12 Months Ended |
Dec. 31, 2022 | |
Business Combinations [Abstract] | |
Business Combination | Note 4 – Business Combination 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, Debt, and Note 16, Stockholder’s Equity, 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, transaction, and other costs on the Consolidated Statement of Operations. 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: 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 17,704,843 Content library 21,241,822 Prepaid expenses and other assets 16,783,468 Property and equipment 15,504,940 Right-of-use assets 7,183,735 Intangible assets (1) 291,200,000 Goodwill 215,284,816 Total assets acquired 597,825,174 Liabilities assumed: Debt 359,854,921 Accounts payable and accrued expenses 91,644,772 Operating lease liabilities 7,183,736 Financing lease liabilities 2,241,304 Other liabilities 66,895,293 Total liabilities assumed 527,820,026 Net assets acquired $ 70,005,148 (1) The weighted-average useful life of 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 $7.9 million is deductible for income tax purposes. For the year ended December 31, 2022 Redbox contributed $86.3 million of revenue and $35.9 million of net loss to the Company’s consolidated operating results. 1091 Pictures Acquisitions 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 purchase price allocation is preliminary and subject to change up to one year after the date of acquisition and could result in changes to the amounts recorded below. The preliminary 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 to 36 months. Acquisition of Sonar Assets On May 21, 2021, the Company consummated its acquisition of the principal assets of Sonar Entertainment, Inc. (“SEI”) and certain of the direct and indirect subsidiaries of SEI (collectively, “Sonar”). Sonar is an award-winning independent television studio that owns, develops, produces, finances and distributes content for global audiences. In consideration for the assets purchased from Sonar (“Purchased Assets”), the Company paid to Sonar an initial cash purchase price of $18,902,000 and from time to time will be required to pay additional purchase price based on the performance of the acquired assets. During the 18-month period following the closing, the Company has the right (the “Buyout Option”), exercisable upon written notice to Sonar during such period, to buy out all future entitlements (i.e., additional purchase price and other entitlements not yet due and payable to Sonar as of the date of such notice) in exchange for a one-time payment to Sonar. In connection with the transaction, the Company formed a new subsidiary, CSS AVOD Inc., and issued shares of common stock, representing 5% of the after-issued equity of CSS AVOD, to MidCap Financial Trust, as Agent. At any time during the three-year period immediately following the 18-month anniversary of the asset purchase agreement closing, MidCap, as Agent, shall have the right upon 60 days’ prior written notice to CSSE to require CSSE to purchase such CSS AVOD Shares for $11,500,000 (“Put Election”). In February 2023, MidCap exercised their put option requiring CSSE to purchase such CSS AVOD Shares for $11,500,000. See Note 19, Subsequent Events, for further details. The Sonar acquisition was accounted for as a purchase of a business in accordance with ASC 805 and the aggregate purchase price consideration of $53,812,000 has been allocated to assets acquired 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 assumed at the date of the acquisition was as follows: May 21, 2021 Accounts receivable, net $ 17,373,257 Film library 13,000,000 Intangible asset 3,600,000 Total identifiable assets acquired 33,973,257 Goodwill 19,838,743 Net assets acquired $ 53,812,000 The amount related to the acquired intangible asset represent the estimated fair value of the distribution network. This definite lived intangible asset is being amortized on a straight-line basis over its estimated useful life of 36 months. Goodwill was calculated as the excess of the consideration transferred over the fair value of the identifiable net assets acquired and liabilities assumed, and represents the future economic benefits expected to arise from the intangible assets acquired that do not qualify for separate recognition. The fair values of assets acquired were based upon valuations performed by independent third-party valuation experts. Cash $ 18,902,000 Fair Value of Additional Purchase Price – Library Accounts Receivable 1,580,000 Fair Value of Additional Purchase Price – Contracted TV Cash Flow 13,700,000 Fair Value of Additional Purchase Price – % of Film Cash Flow 630,000 Fair Value of Additional Purchase Price – % of Non-TV Business Cash Flow 2,300,000 Fair Value of Additional Purchase Price – Development Slate Cash Flow 5,200,000 Fair Value of Additional Purchase Price – CSS AVOD Equity Put 11,500,000 Total Estimated Purchase Price $ 53,812,000 Based on the terms of the asset purchase agreement, the Company estimated the fair value of the Additional Purchase Price components based on, but not limited to, expected future collection of receivables, expected future revenue and cash flows, expected growth rates, and estimated discount rates. The Additional Purchase Price included a 5% interest in CSS AVOD and a Put Option that requires the Company to purchase the shares of CSS AVOD, Inc. (5.0% of the entity) from the investor for $11,500,000. The fair value of the 5.0% interest in CSS AVOD, Inc. was estimated based on expected future cash flows. The Put Option was valued by the Company via a Black-Sholes valuation model assuming an initial price of $125,000, a strike price of $11,500,000, volatility of 100.0% and term of 1.5 years. Of the $34.9 million of contingent consideration, the Company has paid $7.2 million during 2022 and $8.6 million in 2021. There has not been a significant change in the fair value of the contingent consideration as of December 31, 2022. On October 21, 2021, the Company acquired a 51% ownership stake in Locomotive Global Inc. for $650,000. Financial Impact of Acquisitions The following tables illustrate the stand-alone financial performance attributable to the acquisitions included in the Company’s consolidated statement of operations: Year Ended December 31, 2022 Redbox Sonar Other Total Net revenue $ 86,322,726 $ 40,992,549 $ 27,852,492 $ 155,167,767 Net income (loss) $ (35,870,791) $ 24,034,837 $ 811,180 $ (11,024,774) Year Ended December 31, 2021 Redbox Sonar Other Total Net revenue $ - $ 19,207,115 $ 2,886,862 $ 22,093,977 Net income (loss) $ - $ 9,750,510 $ (17,711) $ 9,732,799 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. Years Ended December 31, 2022 Net revenue $ 409,200,000 Net loss $ (287,625,000) Pro forma net losses for the year ended December 31, 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 respective periods. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2022 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | Note 5 – Revenue Recognition The following tables disaggregate the Company’s revenue by source: Year Ended December 31, % of % of 2022 revenue 2021 revenue Revenue: VOD and streaming $ 144,484,749 57 % $ 62,630,109 57 % Retail 67,756,426 27 % — 0 % Licensing and other 40,568,935 16 % 47,765,357 43 % Net revenue $ 252,810,110 100 % $ 110,395,466 100 % VOD and streaming VOD and streaming revenue included in this revenue source is generated as the Company exhibits content through the Crackle Plus and Redbox streaming services including AVOD, FAST, TVOD platforms available via connected TV’s, smartphones, tablets, gaming consoles and the web through the Company’s owned and operated platforms, as well as third-party platforms. The Company generates streaming revenues for its networks in three primary ways, selling advertisers video ad inventory on its AVOD and FAST streaming services, selling advertisers the ability to present content to its viewers, often with fewer commercials, and selling advertisers product and content integrations and sponsorships related to its original productions, as well as revenues from the Company’s 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 the Company’s 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 and content services revenue, including development, non-writing executive producer fees and production services. For the years ended December 31, 2022 and 2021, the total licensing revenues, including VOD and streaming $114,327,307 and $64,027,207, respectively. For all customer contracts, the Company evaluates whether it is the principal (i.e., report revenue on a gross basis) or the agent (i.e., report revenue on a net basis). Generally, the Company reports revenue for show productions, acquired distribution rights for films, the sub-licensing of acquired distribution rights and advertising placed on CSSE properties on a gross basis (the amount billed to its customers is recorded as revenue, and the amount paid to the Company’s vendors is recorded as a cost of revenue). The Company is the principal because it controls the assets or contractual distribution right before it is transferred to its customers. The Company controls are evidenced by its sole ability to monetize the asset, being primary obligor to its customers, having discretion in establishing pricing, or a combination of these factors. The Company also generates revenue through agency relationships in which revenue is reported net of agency commissions and publisher payments in arrangements where the Company does not own the asset in the form of content or ad inventory. In the ordinary course of business and as part of its content acquisition strategy, the Company will acquire a film or the worldwide rights to distribute a film, to improve its overall film library offering and generate attractive risk adjusted film returns. The Company will sometimes look to sub-license rights to distributors when it is attractive to do so in order to reduce the risk associated with the acquisition of rights. During the years ended December 31, 2022 and 2021, the Company relicensed a subset of acquired film rights for approximately $0 and $6,537,000, respectively. No impairment losses have arisen from any Company contracts with customers during the years ended December 31, 2022 and 2021, respectively. Performance obligations The unit of measure under ASC 606 is a performance obligation, which is a promise in a contract to transfer a distinct or series of distinct goods or services to a customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Company contracts have either a single performance obligation as the promise to transfer services is not separately identifiable from other promises in the contracts and is, therefore, not distinct, or have multiple performance obligations, most commonly due to the contract covering multiple service offerings. For contracts with multiple performance obligations, the contract’s transaction price can generally be readily allocated to each performance obligation based upon the selling price of each distinct service in the contract. In cases where estimates are needed to allocate the transaction price, the Company uses historical experience and projections based on currently available information. Contract balances Contract balances include the following: December 31, December 31, 2022 2021 Accounts receivable, net $ 39,467,049 $ 25,818,447 Contract assets (included in accounts receivable) 74,496,376 34,395,360 Total accounts receivable, net $ 113,963,425 $ 60,213,807 Deferred revenue (included in accrued expenses) $ 12,043,508 $ 1,536,687 Contract assets are primarily comprised of unbilled receivables that are generally paid over time in accordance with the terms of the Company’s contracts with customers and are transferred to accounts receivable when the timing and right to payment becomes unconditional. Contract liabilities or deferred revenues relate to advance consideration received from customers under the terms of its contractual arrangements in advance of satisfaction of the contractual performance obligation. The Company generally receives payments from customers based upon contractual billing schedules and arrangements. Contract receivables are recognized in the period the Company performs the agreed upon performance obligations and the Company’s right to consideration becomes unconditional. Payment terms vary by the type and location of the customer and the goods or services provided. The term between invoicing and when payment is due not generally significant, but can extend from 1 - 5 years where a significant financing component exists with a minimum guarantee or a fixed license fee. A contract asset results when goods or services have been transferred to the customer, but payment is contingent upon a future event, other than the passage of time (i.e. type of unbilled receivable). Given the nature of its business from time to time the Company engages with distributors for terms that include minimum guarantees, that may include a significant financing component, which are contractually paid over a period of time at a variable rate of payment – based on sales and net cash collections made by the distributor from third parties. These minimum guarantees are generally collectible via royalty payments on a monthly or quarterly basis over the term of the contractual arrangement. The Company records deferred revenue (also referred to as contract liabilities under Topic 606) when cash payments are received in advance of the Company satisfying its performance obligations. The Company’s deferred revenue balances primarily relate to advance payments received related to content distribution rights agreements and production sponsorship arrangements. These contract liabilities are recognized as revenue when the related performance obligations are satisfied. No significant changes in the timeframe of the satisfaction of contract liabilities have occurred during the year ended December 31, 2022. Arrangements with multiple performance obligations In contracts with multiple performance obligations, the Company identifies each performance obligation and evaluates whether the performance obligations are distinct within the context of the contract at contract inception. When multiple performance obligations are identified, the Company identifies how control transfers to the customer for each distinct contract obligation and determines the period when the obligations are satisfied. If obligations are satisfied in the same period, no allocation of revenue is deemed to be necessary. In the event performance obligations within a bundled contract do not run concurrently, the Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company generally determines standalone selling prices based on the prices charged to customers or by using expected cost-plus margins. Performance obligations that are not distinct at contract inception are combined. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
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 The Company recognizes these 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 year ended December 31, 2022 and 2021, the Company recognized $3,382,529 and $2,684,307, respectively, of non-cash share-based compensation expense in selling, general and administrative expense in the Consolidated Statements of Operations. Stock options activity as of December 31, 2022 and 2021 is as follows: Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contract Intrinsic Stock Options Price Term (Yrs.) Value Outstanding at December 31, 2020 1,131,250 $ 8.13 2.66 $ 13,417,900 Granted 847,213 20.68 Forfeited (14,958) 16.20 Exercised (a) (586,166) 7.26 Expired — — Outstanding at December 31, 2021 1,377,339 $ 16.13 3.37 $ 2,579,201 Granted 322,500 8.32 Forfeited (88,793) 19.27 Exercised (40,000) 7.54 Expired (60,000) 9.60 Outstanding at December 31, 2022 1,511,046 $ 14.89 3.15 $ — Vested and exercisable at December 31, 2021 648,119 $ 11.64 2.77 $ 2,407,521 Vested and exercisable at December 31, 2022 889,623 $ 14.02 2.62 $ — (a) During the year ended December 31, 2021, 184,550 stock options were exercised and converted to 121,255 shares of Class A Common Stock via the cashless exercise option. As of December 31, 2022, the Company had unrecognized pre-tax compensation expense of $5,258,223 related to non-vested stock options under the Plan of which $3,307,617, $1,778,937, and $171,669 will be recognized in 2023 2024 and 2025, respectively. In addition to the compensation expense discussed above, the Company also recognized stock-based compensation in connection with the Redbox Merger which upon completion triggered accelerated vesting under the Redbox plans. There is $2,232,182 of additional compensation expense in selling, general and administrative expenses in the consolidated Statements of Operations. The Company used the following weighted average assumptions to estimate the fair value of stock options granted for the periods presented as follows: Year Ended December 31, Weighted Average Assumptions: 2022 2021 Expected dividend yield — % — % Expected equity volatility 80.7 % 62.0 % Expected term (years) 5 5 Risk-free interest rate 3.27 % 1.29 % Exercise price per stock option $ 9.52 $ 16.13 Market price per share $ 9.52 $ 16.13 Weighted average fair value per stock option $ 5.45 $ 8.66 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 grants 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 year ended December 31, 2022 and 2021, the Company recognized in selling, general and administrative expense, non-cash share-based compensation expense relating to stock grants of $255,000 and $2,563,500, respectively. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2022 | |
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 antidilutive. A net loss available to common stockholders causes all potentially dilutive securities to be antidilutive. Basic and diluted loss per share are computed as follows: Year Ended December 31, 2022 2021 Net loss available to common stockholders $ (111,290,202) $ (59,419,724) Basic weighted-average common shares outstanding 17,261,460 15,018,421 Dilutive effect of options and warrants — — Weighted-average diluted common shares outstanding 17,261,460 15,018,421 Basic and diluted loss per share $ (6.45) $ (3.96) Anti-dilutive stock options and warrants 356,969 3,440,866 |
Content Assets
Content Assets | 12 Months Ended |
Dec. 31, 2022 | |
Content Assets [Abstract] | |
Content Assets | Note 8 – Content Assets Content assets consists of the following: December 31, December 31, 2022 2021 Original productions: Programming costs released $ 31,081,500 $ 25,669,921 In production 806,009 562,808 In development 8,377,649 6,662,591 Accumulated amortization (a) (31,651,552) (23,268,306) Programming costs, net 8,613,606 9,627,014 Film library: Film library acquisition costs 208,982,878 134,463,191 Accumulated amortization (b) (125,967,305) (80,847,748) Film library costs, net 83,015,573 53,615,443 Licensed program rights: Programming rights 56,288,723 1,209,362 Accumulated amortization (21,827,394) (806,423) Programming rights, net 34,461,329 402,939 Content assets, net $ 126,090,508 $ 63,645,396 (a) (b) Original productions programming costs consists 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 to create episodic programming 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. Amortization, including impairments of content assets is as follows: Years Ended December 31, 2022 2021 Original productions $ 4,080,670 $ 4,920,027 Film library 40,269,681 34,011,566 Licensed program rights 21,020,971 51,237 Content asset impairment 9,152,452 9,794,854 Total content asset amortization $ 74,523,774 $ 48,777,684 In fourth quarter of 2021, the Company reorganized production operations due to the acquisition of Sonar Entertainment and formed Chicken Soup for The Soul Television Group. In connection with this change, the Company performed an evaluation of shows in development and monetization strategies across the Company’s content portfolio, that resulted in the identification of content not consistent with management’s strategy and accelerated amortization associated with changes in the expected monetization of certain programs. For the years ended December 31, 2022 and 2021, the Company recognized content impairment charges of $9.2 million and $9.8 million, respectively. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Note 9 – Intangible Assets and Goodwill Intangible assets, consists of the following: Gross Net Carrying Accumulated Carrying Amount Amortization Impairment Amount 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 December 31, 2021: Crackle Plus content rights $ 1,708,270 $ 1,494,736 $ — $ 213,534 Crackle Plus brand value 18,807,004 7,052,626 — 11,754,378 Crackle Plus partner agreements 4,005,714 2,103,000 — 1,902,714 Distribution network 3,600,000 700,000 — 2,900,000 Locomotive contractual rights 1,356,868 92,403 — 1,264,465 Total definite lived intangibles 29,477,856 11,442,765 — 18,035,091 Popcornflix Brand 7,163,943 — — 7,163,943 Chicken Soup for the Soul Brand 5,000,000 — — 5,000,000 Total indefinite lived intangibles 12,163,943 — — 12,163,943 Total $ 41,641,799 $ 11,442,765 $ — $ 30,199,034 Amortization expense was $15,133,327 and $5,547,939 for the years ended December 31, 2022 and 2021, respectively. During the year ended December 31, 2021 management determined that the Company’s sole SVOD service’s acquired customer intangible base and reporting unit goodwill was impaired. All other long lived intangible assets groupings were deemed recoverable as of December 31, 2022 and 2021, respectively. As of December 31, 2022 amortization expense for the next 5 years is expected be: 2023 $ 30,799,605 2024 29,275,033 2025 27,124,226 2026 24,716,973 2027 and beyond 188,509,872 Total $ 300,425,709 Total goodwill on the Consolidated Balance Sheets was $260,748,057 and $39,986,530 as of December 31, 2022 and December 31, 2021, respectively. Changes in the carrying amount of goodwill by reporting units for the years ended December 31, 2022 and 2021 were as follows: December 31, 2022 Online Networks Distribution & Production Redbox Beginning balance $ 18,911,027 $ 21,075,503 $ — Acquisitions — 5,476,711 215,284,816 Accumulated impairment losses — — — Total $ 18,911,027 $ 26,552,214 $ 215,284,816 December 31, 2021 Online Networks Distribution & Production SVOD Beginning balance $ 18,911,027 $ 1,236,760 $ 1,300,319 Acquisitions — 19,838,743 — Accumulated impairment losses — — (1,300,319) Total $ 18,911,027 $ 21,075,503 $ — Goodwill and Indefinite Lived Intangible Asset Impairment: Goodwill relating to the Company’s three reporting units and other intangible assets with indefinite lives are reviewed for impairment on an annual basis at December 31, 2022, or more frequently if events or circumstances indicate the carrying amount may not be recoverable. For annual impairment tests, the Company performs a qualitative or quantitative assessment, as required, for its reporting units and the indefinite lived intangibles. For the 2021 and 2022 assessment, the Company performed a qualitative assessment of its CSS indefinite lived brand intangible and determined it was not impaired. The Company weighed the relative impact of market-specific and macroeconomic factors, as well as factors specific to the indefinite lived asset. Based on the qualitative assessments, the Company concluded that the fair value of the indefinite lived intangible asset is greater than its carrying value, and therefore, performing a quantitative test was unnecessary. In 2021 the Company performed a qualitative test for its Popcornflix indefinite lived intangible. Weighing the relative impact of market-specific and macroeconomic factors for the AVOD market, as well as, factors specific to the Popcornflix AVOD service. The Company’s assessment included expected future revenue estimates for the Popcornflix service and revenue multiples from publicly traded companies with operations and characteristics similar to Popcornflix. In 2022 the Company performed a quantitative test on its Popcornflix indefinite lived intangible. Based on the quantitative test during the year ended December 31, 2022, the company recognized an impairment For the 2021 assessment of Goodwill, the Company performed a qualitative assessment of the Distribution & Production reporting unit and determined it was not impaired. In 2022, the Company performed a quantitative assessment. The Company weighed the relative impact of market-specific and macroeconomic factors, as well as factors specific to the reporting unit. Based on the quantitative assessment, the Company concluded that the fair value of the reporting unit is greater than its carrying value therefore there was no impairment. In 2021 and 2022, the Company performed a qualitative and quantitative test for its Online Networks reporting unit. The Online Networks reporting unit had a negative equity value as of December 31, 2022 and 2021, and is therefore not deemed to be impaired, as the reporting unit’s fair value exceeds the carrying value. In 2021, the Company performed a qualitative and quantitative test for its SVOD reporting unit. In 2021 the Company found that the SVOD reporting unit’s goodwill was impaired as of December 31, 2021, resulting in a charge of $1,300,319. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | Note 10 – Leases At December 31, 2022, the following amounts were recorded on the Consolidated Balance Sheets relating to the Company’s operating and finance leases. December 31, 2022 Right-of-Use Assets Operating lease right-of-use assets $ 16,315,342 Lease Liabilities: Operating lease liabilities $ 18,079,469 Finance Lease cost Amortization of right-of-use assets $ 827,191 Interest of lease liabilities 35,633 Total finance lease cost $ 862,824 December 31, 2022 Operating leases Weighted average remaining lease term 5.9 years Weighted average discount rate 7% Finance Leases Weighted average remaining lease term 1.1 years Weighted average discount rate 4% As the Company’s leases do not provide an implicit interest rate, the Company uses its 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. The Company has operating leases primarily for office space. Lease costs are generally fixed, with certain contracts containing escalations in the lessors’ annual costs. For the years ended December 31, 2022, and 2021, rent expense including short-term leases was $4.2 million and $2.0 million, respectively. Cash paid for amounts included in operating lease liabilities was $3.1 million as of December 31, 2022. The expected future payments relating to the operating and finance lease liabilities at December 31, 2022 are as follows: Operating Financing 2023 $ 4,941,930 $ 1,269,035 2024 4,195,546 649,825 2025 3,675,921 390,759 2026 2,104,048 86,163 2027 and thereafter 6,873,348 — Total minimum payments 21,790,793 2,395,782 Less amounts representing interest 3,711,324 274,880 Present value of minimum payments $ 18,079,469 $ 2,120,902 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Note 11 – Debt Long-term debt for the periods presented was as follows: December 31, December 31, 2022 2021 HPS term $ 335,342,705 $ — HPS revolving loan 82,362,336 — Notes due 2025 44,855,900 32,895,900 Film acquisition advances 27,837,565 6,196,909 Midcap revolving loan — 17,585,699 MUFG Union Bank film financing facility 6,577,243 — Other debt 3,204,255 — Total gross debt 500,180,004 56,678,508 Less: debt issuance costs and discounts (20,526,393) (1,818,909) Total debt, net 479,653,611 54,859,599 Less: current portion (18,798,515) (6,196,909) Total long-term debt, net $ 460,855,096 $ 48,662,690 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. During the year ended December 31, 2022, the Company exercised the option to PIK interest accrued on the outstanding debt. The total outstanding debt had net book value of $417.7 million ($335.3 million under a term loan, $80 million under a revolving credit facility and $2.4 million under a revolving PIK loan). The total PIK interests of $11.9 million was deferred and compounded and added to the principal balance. 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 for customary overhead, legal, accounting and other professional fees and expenses; taxes; customary salary, bonus and other benefits. The Company is in compliance with the covenants at December 31, 2022. 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 $3.1 million as of December 31, 2022. 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 $3.4 million as of December 31, 2022. 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 March 31, 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 Union Bank 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 December 31, 2022, the outstanding balance was $6.1 million. Subsequently, the “Term Sheet,” was amended such that the remaining balance is payable in four installments due within the year of 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 $26.9 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 December 31, 2022, the outstanding balance was $21.7 million. MidCap Revolving Loan On May 21, 2021, the Company entered into a credit agreement with Midcap Financial Trust. The credit agreement provides the Company with a revolving loan in an aggregate principal amount not to exceed $30,000,000 at any time outstanding. On the closing date, the Company made an initial draw down on the loan of $18,272,931 in connection with funding the SEI acquisition. The availability under the loan at any time is subject to the borrowing base, which is equal to 85% of the eligible accounts receivable minus the sum of all reserves and is adjusted monthly, as necessary. The loan bears interest at 4% plus the greater of LIBOR or 0.75% per annum. In addition, the loan contains an unused line fee of 0.5% per annum and a collateral management fee of 0.504% per annum. Interest and fees on the loan are payable in arrears on the first day of each month and on the maturity of the loan. The Credit Agreement and other loan documents contain customary representations and warranties and affirmative and negative covenants. Under the Credit Agreement, the Company is required to maintain minimum liquidity in the form of borrowing base availability or cash on hand in an aggregate amount of not less than $6,000,000. As of December 31, 2022, the Company paid off all of the outstanding balances and closed this loan. MUFG Union Bank Film Financing Facility On December 29, 2020, Redbox Entertainment, LLC entered into a four-year, $20 million film financing facility with MUFG Union Bank (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 December 31, 2022 were $6.6 million and $6.6 million, respectively. Borrowings under the Union Film Financing Facility bear interest at either the alternate base rate or LIBOR (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 ½ of 1.0%, and (iii) daily one month LIBOR plus 1.0%. The film financing facility borrowings that are LIBOR loans bear interest at a per annum rate equal to the applicable LIBOR plus a margin of 0.50%. The borrowing interest rate for the Union Film Financing Facility was 7.1% as of December 31, 2022. 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 December 31, 2022, the expected aggregate maturities of debt for each of the next five years are as follows: 2023 $ 18,798,514 2024 16,976,734 2025 128,980,029 2026 82,022 2027 and beyond 335,342,705 Total $ 500,180,004 |
Put Option Obligation
Put Option Obligation | 12 Months Ended |
Dec. 31, 2022 | |
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 October 7, 2025 (“Put Election Period”). In February 2023, MidCap exercised their put option requiring CSSE to purchase such CSS AVOD Shares for $11,500,000. See Note 19, Subsequent Events, for further details. As of December 31, 2022, the 5% interest in CSS AVOD, Inc. consists of the following: December 31, 2022 Put Option Obligation $ 11,400,000 Noncontrolling Interests 94,247 Total $ 11,494,247 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 13 – Income Taxes The Company’s current and deferred income tax provision are as follows: Year Ended December 31, 2022 2021 Current provision: States $ (343,361) $ 66,000 Total current provision $ (343,361) $ 66,000 Deferred provision: Deferred income tax (benefit) provision $ (36,957,881) $ — Total deferred (benefit) provision (36,957,881) — Total income tax (benefit) provision $ (37,301,242) $ 66,000 The provision for income taxes is different from amounts computed by applying the U.S. statutory rates to consolidated loss before taxes. The significant reason for these differences is as follows: Year Ended December 31, 2022 2021 Federal statutory rate of 21% 21.00 % 21.00 % Increase (decrease) resulting from: Crackle amortization — % (0.21) % State and local taxes 4.40 % (0.46) % Valuation Allowance 3.30 % — Transaction Costs (0.90) % — Programming costs — % (10.99) % Share-based compensation - long-term incentive plan — % (1.41) % Film library — % (8.32) % Allowance for doubtful accounts — % 0.24 % Other (1.00) % 0.15 % Actual tax provision 26.80 % 0.00 % Deferred income taxes reflect the “temporary differences” between the financial statement carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and net operating losses, adjusted by the relevant tax rate. The components of the deferred tax assets and liabilities are as follows: December 31, December 31, 2022 2021 Deferred tax assets: Net operating loss carry-forwards $ 36,323,046 $ 14,503,000 Section 163(j) carryover 6,325,013 — ROU liabilities 4,582,241 — Compensatory accruals 3,228,997 — ARO liabilities 3,461,123 — Other liabilities 3,800,018 — Property plant & equipment 3,374,008 — Acquisition-related costs — 539,000 Film library and other intangibles 18,608,104 16,883,000 Other liabilities — 337,000 Total deferred tax assets 79,702,550 32,262,000 Valuation allowance (25,291,302) (31,412,000) Total deferred tax assets, net 54,411,248 850,000 Deferred tax liabilities: Programming costs — (299,000) ROU assets (4,135,123) — Intangible assets (51,706,018) — Indefinite lived intangibles (2,195,876) — Goodwill (987,618) — Other assets (1,334,703) (551,000) Total deferred tax liabilities (60,359,338) (850,000) Net deferred tax asset (liabilities) $ (5,948,090) $ — The Company and its subsidiaries have combined net operating losses of approximately $145.0 million, $10.8 million of which were incurred before 2018 and expire between 2031 and 2037 with the balance of $134.2 million having no expiration under changes made by the Tax Cuts and Jobs Act but may only be utilized generally to offset 80 percent of taxable income. The ultimate realization of the tax benefit from net operating losses is dependent upon future taxable income, if any, of the Company. Internal Revenue Code Section 382 imposes limitations on the use of net operating loss carryovers when the stock ownership of one or more 5% stockholders (stockholders owning 5% or more of the Company’s outstanding capital stock) has increased by more than 50 percentage points. Additionally, the separate-return-limitation-year (SRLY) rules that apply to consolidated returns may limit the utilization of losses in a given year when consolidated tax returns are filed. Management has determined that because of a recent history of recurring losses, the ultimate realization of the net operating loss carryovers is not assured and has recorded a partial valuation allowance. Public trading of the Company’s stock poses a risk of an additional successive ownership change beyond the control of the Company that could trigger a limitation of the use of the loss carryover. The valuation allowance decreased by $6.1 million and increased by $11.5 million for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, the Company's effective income tax rate was a benefit of 26.8%, which differed from the federal statutory rate of 21.0% primarily due to the release of a portion of the Company’s valuation allowance as a result of the acquired deferred tax liability of Redbox. In connection with the Redbox acquisition, the Company recorded a deferred tax liability of $42.7 million, which enabled the Company to release a portion of the beginning of year’s valuation allowance of $27.4 million. As of December 31, 2021, the Company’s effective income tax rate was a benefit of 0.0% primarily due to the fact that the Company recorded a full valuation allowance. 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 December 31, 2022, 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 Pivotshare, 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 the Company’s results of operations going forward, the Company will continue to evaluate their impact as further information becomes available. Unrecognized Tax Benefits The aggregate changes in the balance of unrecognized tax benefits were as follows: December 31, December 31, 2022 2021 Balance, beginning of the period $ — $ — Additions based on tax positions related to the current year 86,192 — Additions for tax positions related to prior years 36,976 — Reductions for tax positions related to prior years — — Deductions for tax positions related to prior years — — Deductions for tax positions effectively settled — — Balance, end of period $ 123,168 $ — The Company recognizes interest and penalties, if any, related to income tax matters in income tax expense. The Company accrued interest of $0.0 million and $0.0 million for the years ended December 31, 2022 and 2021, respectively. At December 31, 2022 and 2021, $0.1 million and $0.0 million, respectively, of unrecognized tax benefits would favorably impact the effective tax rate if recognized. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2022 | |
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 December 31, 2022, CSS directly owns approximately 100% of the Company’s Class B common stock. CSS ownership of Class B common stock represents an ownership interest of 36.7% of the total outstanding common stock and 85% 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 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. A summary of the relevant ongoing agreements is as follows: CSS Management Services Agreement The Company is a party to a Management Services Agreement with CSS (the “Management Agreement”). Under the terms of the Management Agreement, the Company is provided with the operational expertise of the CSS companies’ personnel, including its chief executive officer, chief financial officer, chief accounting officer, chief strategy officer, and senior brand advisor, and with other services, including accounting, legal, marketing, management, data access and back-office systems. The Management Agreement also requires CSS to provide headquarter office space and equipment usage. Under the terms of the Management Agreement, the Company pays a quarterly fee to CSS equal to 5% of the net revenue as reported under GAAP for each fiscal quarter. For the years ended December 31, 2022 and 2021, the Company recorded management fee expense of $9.2 million and $5.5 million, respectively, payable to CSS. The term of the Management Agreement is five years, with automatic one-year renewals thereafter unless either party elects to terminate by delivering written notice at least 90 days prior to the end of the then current term. The Management Agreement is terminable earlier by either party by reason of certain prescribed and uncured defaults by the other party. The Management Agreement will automatically terminate in the event of the Company’s bankruptcy or a bankruptcy of CSS or if the Company no longer has licensed rights from CSS under the License Agreement described below. CSS License Agreement and Marketing Support Fee The Company is a party to a trademark and intellectual property license agreement with CSS (the “License Agreement”). Under the terms of the License Agreement, the Company has been granted a perpetual, exclusive license to utilize the Brand and related content, such as stories published in the Chicken Soup for the Soul books, for visual exploitation worldwide. Under the License Agreement, the Company pays a license fee to CSS equal to 4% of net revenue for each fiscal quarter. In addition, CSS provides marketing support for the Company’s productions through its email distribution, blogs and other marketing and public relations resources. The Company pays a quarterly fee to CSS for those services equal to 1% of net revenue as reported under GAAP for each fiscal quarter for such support. For the years ended December 31, 2022 and 2021, the Company recorded a combined license and marketing support fee expense of $9.2 million and $5.5 million, respectively, payable to CSS. 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 December 31, 2022 and 2021, the Company had an intercompany payable and receivable, respectively, with affiliated companies. December 31, December 31, 2022 2021 Due to affiliated companies $ 3,778,936 $ 489,959 Total due to/due from affiliated companies $ 3,778,936 $ 489,959 See Note 19, Subsequent Events, for additional information. Other Related Parties In the ordinary course of business, the Company is involved in arms-length transactions with certain minority shareholders of a consolidated subsidiary related to the licensing of television and film programming properties. For the years ended December 31, 2022 and 2021, the amount of revenue recognized was $0 and $6.1 million, respectively. At December 31, 2022 and 2021, the Company had accounts receivable of $4.8 million and $6.4 million, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
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 the Company enters into agreements to obtain future titles. Once a title is delivered, accepted and becomes available for exploitation, a content liability is recorded on the consolidated balance sheet. As of December 31, 2022, the Company had $124.3 million in content obligations, comprised of $39.8 million of film library acquisition obligations, $55.8 million of programming obligations and $28.7 million of accrued participation costs. As of December 31, 2021, the Company had $38.6 million in content obligations, comprised of $24.7 million of film library acquisition obligations, $1.6 million of programming obligations and $12.3 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 which are expected to be fulfilled in the normal course of business have. 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 December 31, 2022 is presented in the following table. The Company does not include any estimated obligation for these future titles beyond the known minimum amount. Future minimum payments off-balance sheet content commitments as of December 31, 2022 were as follows: Total 2023 2024 2025 and thereafter Minimum estimated content commitments $ 98,021,577 $ 88,311,297 $ 9,710,280 $ — Acquisition of Sonar Assets The Company owes contingent consideration related to the acquisition of Sonar of $7.3 million at December 31, 2022. The liability is an estimate and is payable upon the collection of receipts from defined receivables, noncontracted TV business receipts and profit participation on a slate of development projects. Additionally, the Company has a Put Obligation for $11,500,000 to acquire 5% of the shares of CSS AVOD Inc., that can be triggered any time during the three-year period immediately following the 18-month anniversary of the asset purchase agreement. See Note 4, Business Combinations, and Note 12, Put Option Obligation, for additional information. In February 2023, MidCap exercised their put option requiring CSSE to purchase such CSS AVOD Shares for $11,500,000. See Note 19, Subsequent Events, for further details. 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 its 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. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
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 25, 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 December 31, 2022, the Company had $3,474,299 of authorization remaining under the $30,000,000 stock repurchase program. During 2022, the Company repurchased 1,410,036 shares of common stock at an average price of $9.90. During 2021, the Company repurchased 870,267 shares of common stock at an average price of $14.44. Common Stock Issuance for Redbox Merger On August 11, 2022, the Company acquired all the outstanding equity interests of Redbox. In conjunction with the merger, the Company issued 4,662,195 shares of its Class A common stock. See Note 4, Business Combinations, for additional information. Common and Preferred Stock Issuance for 1091 On March 4, 2022, the Company acquired all the outstanding equity interests of 1091. In conjunction with the merger, the Company issued 375,000 shares of its Class A common stock and 80,000 shares of its preferred stock. See Note 4, Business Combinations, for additional information. Underwritten Public Common Stock Offering On July 7, 2021, the Company completed an underwritten public offering of 1,875,000 shares of common stock at a price $40.00 per common share, generating net proceeds of $70,500,000. Common Stock Private Placement On January 20, 2021, the Company completed a private placement of 1,022,727 shares of common stock at a price of $22.00 per common share, generating net proceeds of $21,374,994. At the Market Offering During the years ended December 31, 2022 and 2021, the Company completed the sale of an aggregate of 376,163 and 126,000 shares, respectively of Class A common stock, generating net proceeds of $3,702,926 and $3,435,819 in the respective periods. During the years ended December 31, 2022, the Company completed the sale of an aggregate of 718,027 shares, respectively of preferred stock, generating net proceeds of $16,699,901 during the period. There were no similar sales of preferred stock during the year ended December 31, 2021. See Note 19, Subsequent Events, for additional information. Noncontrolling Interests Noncontrolling interests represent an equity interest in consolidated subsidiaries, including CSS AVOD, Locomotive Global and Landmark Studio Group. On September 8, 2021, the Company purchased an additional 25,000 units of common equity in Landmark Studio Group from Cole investments VII, LLC for $6,000,000. On March 3, 2022, the Company purchased the remaining equity interest in Landmark Studio Group in exchange for 84,000 shares of Class A common stock and $2,200,000, of which $1,450,000 is payable two years from the acquisition date. The purchase increased the Company’s ownership in Landmark Studio Group from 78.5.5% to 100%. In October 2021, the Company acquired a 51% stake in Locomotive Global Inc., a film production services company in India. Subsidiary Convertible Preferred Stock The subsidiary convertible preferred stock represented the equity attributable to the noncontrolling interest holder as a part of the Crackle Plus business combination. Given the terms of the transaction, the noncontrolling interest holder had the right to convert their Preferred Units in Crackle Plus into Common Units representing common ownership of 49% in Crackle Plus or into Series A Preferred Stock of the Company. On January 13, 2021, the Company issued 1,600,000 shares of its Series A Preferred Stock to CPEH pursuant to the Put Option granted to CPEH under the JV Operating Agreement, as amended. The Put Option was exercised on December 14, 2020. The Company had the option to elect to pay cash in lieu of issuing Series A Preferred Stock. The Company elected to satisfy the Put Option entirely through the issuance of Series A Preferred Stock. As a result of CPEH’s exercise of the Put Option, the Company now owns 100% of Crackle Plus. Voting Rights Common Stock Holders of shares of Class A Common Stock and Class B Common Stock have substantially identical rights, except that holders of shares of Class A Common Stock are entitled to one vote per share and holders of shares of Class B Common Stock are entitled to ten votes per share. Holders of shares of Class A Common Stock and Class B Common Stock vote together as a single class on all matters (including the election of directors) submitted to a vote of stockholders, unless otherwise required by law or charter. Preferred Stock Holders of Series A Preferred Stock generally have no voting rights except for the right to add two members to the board of directors if dividends payable on the outstanding Series A Preferred Stock are in arrears for eighteen Dividend Rights Common Stock Shares of Class A Common Stock and Class B Common Stock shall be treated equally, identically and ratably, on a per share basis, with respect to any dividends or distributions as may be declared and paid from time to time by the Board of Directors out of any assets legally available thereof. Preferred Stock Holders of the Series A Preferred Stock will receive cumulative cash dividends at a rate of 9.75% per annum, as and when declared by the Board of Directors. No Preemptive or Similar Rights The Company’s common stock is not entitled to preemptive rights and is not subject to conversion, redemption or sinking fund provisions. Right to Receive Liquidation Distributions Subject to the preferential or other rights of any holders of preferred stock then outstanding, including the Series A Preferred Stock, upon dissolution, liquidation or winding up, whether voluntary or involuntary, holders of Class A Common Stock and Class B Common Stock will be entitled to receive ratably all of the Company’s assets available for distribution to the stockholders unless disparate or different treatment of the shares of each such class with respect to distributions upon any such liquidation, dissolution or winding up is approved in advance by the affirmative vote (or written consent if action by written consent of stockholders is permitted at such time under the certificate of incorporation) of the holders of a majority of the outstanding shares of Class A Common Stock and Class B Common Stock, each voting separately as a class. Warrants Warrant activity as of December 31, 2022 is as follows: Weighted Weighted Average Average Remaining Outstanding Outstanding Exercise Contract Warrants at December 31, 2021 Issued Exercised at December 31, 2022 Price Term (Yrs.) Class W 526,362 — — 526,362 $ 7.50 0.75 Class Z 123,109 — — 123,109 12.00 1.75 CSSE Class I 800,000 — — 800,000 8.13 1.62 CSSE Class II 1,200,000 — — 1,200,000 9.67 1.62 CSSE Class III-A 380,000 — — 380,000 11.61 1.62 CSSE Class III-B 1,620,000 — — 1,620,000 11.61 1.62 HPS — 1,011,530 (1,011,530) — — — Redbox Public (CSSEL) (1) — 1,039,183 — 1,039,183 132.18 4.07 Redbox Private (1) — 339,065 — 339,065 132.18 4.07 Total 4,649,471 2,389,778 (1,011,530) 6,027,719 $ 30.54 1.85 (1) The number of warrants is shown on an as converted basis based on the exchange ratio of 0.087 , the gross warrants are 11,944,627 public and 3,897,303 private. In connection with the HPS Credit Agreement, the Company issued HPS and affiliates a five-year warrant (“Credit Facility Warrants”) to purchase up to an aggregate of 1,011,530 shares of the Company’s Class A common stock, at a per-share exercise price of $0.0001. All the Credit Facility Warrants were exercised in September 2022. 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 December 31, 2022 the fair market value of the warrants was $0.02 or $25,222. For year ended December 31, 2022, the Company recognized a gain of $3,447,963 on the change in fair value of the warrant liabilities in Other income (expense), net in the Company’s Consolidated Statements of Operations. |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2022 | |
Segment and Geographic Information [Abstract] | |
Segment and Geographic Information | Note 17 – Segment 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, the production and distribution of video content, and currently operates in the United States and internationally. Net revenue generated in the United States accounted for approximately 95% and 78% of total net revenue for the years ended December 31, 2022 and 2021, respectively. All of the Company’s long-lived assets are based in the United States. |
Client Concentration
Client Concentration | 12 Months Ended |
Dec. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
Client Concentration | Note 18 – Client Concentration Customers with concentrations in excess of 10% of Net revenue and Gross accounts receivable are as follows: Year Ended December 31, Revenues 2022 2021 Customer A — % 16 % Year Ended December 31, Accounts Receivable 2022 2021 Customer A 14 % — % Customer B 12 % 27 % |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 19 – Subsequent Events Authorization for Additional Preferred Shares On March 1, 2023, the Company increased the number of shares of authorized Series A Preferred Stock from 5,000,000 to 6,000,000 shares. Class A 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, par value $0.0001 per share (the “Class A common stock”) over the thirty-six The Company may also direct Lincoln Park, on any business day on which an Accelerated Purchase has been completed and all of the shares to be purchased thereunder have been properly delivered to Lincoln Park in accordance with the Purchase Agreement, to make additional purchases upon the same terms as an Accelerated Purchase (an “Additional Accelerated Purchase”). The purchase price of Regular Purchases, Accelerated Purchases and Additional Accelerated Purchases and the minimum closing sale price for a Regular Purchase will be adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction occurring during the business days used to compute the purchase price. The aggregate number of shares that the Company can sell to Lincoln Park under the Purchase Agreement may in no case exceed 2,712,094 shares (subject to adjustment as described above) of Class A common stock (which is equal to approximately 19.99% of the shares of the Class A common stock outstanding immediately prior to the execution of the Purchase Agreement) (the “Exchange Cap”), unless (i) shareholder approval is obtained to issue Purchase Shares above the Exchange Cap, in which the Exchange Cap will no longer apply, or (ii) the average price of all applicable sales of Class A common stock to Lincoln Park under the Purchase Agreement equals or exceeds $3.47 per share (subject to adjustment as described above) (which represents the Minimum Price, as defined under Nasdaq Listing Rule 5635(d), on the Nasdaq Global Market immediately preceding the signing of the Purchase Agreement, such that the transactions contemplated by the Purchase Agreement are exempt from the Exchange Cap limitation under applicable Nasdaq rules). The Purchase Agreement may be terminated by the Company at any time, at its sole discretion, without any cost or penalty, by giving one There are no limitations on the use of proceeds, financial or business covenants, restrictions on future financings (other than restrictions on the Company’s ability to enter into a similar type of agreement or Equity Line of Credit during the Term, excluding an “at-the-market” transaction with a registered broker-dealer), rights of first refusal, participation rights, penalties, or liquidated damages in the Purchase Agreement. The Company may deliver Purchase Notices under the Purchase Agreement, subject to market conditions, and in light of its capital needs, from time to time and under the limitations contained in the Purchase Agreement. Any proceeds that the Company receives under the Purchase Agreement are expected to be used for working capital and general corporate purposes. Sonar Acquisition Put Option MidCap Financial Trust exercised their Put Option resulting in the Put Price of $11,500,000 payable by March 31, 2023, in exchange for Midcap’s Financial Trust’s 5% interest in CSS AVOD. Upon payment, the Company will own 100% of CSS AVOD. See Note 4 for additional information. Offering of Class A Common Stock On March 31, 2023 the Company announced the pricing of an underwritten public offering Class A common stock (the offering). The company offered 4,688,015 shares of its Class A common stock at a price of $2.30 per share. The net proceeds of the offer are expected to be approximately $10.4 million. The Company intends to use the proceeds of this offering for general corporate purposes and working capital, including payment of an aggregate of approximately $3.8 million due to CSS under the CSS Management Agreement and CSS License Agreement for 2022. Investment from Parent Company and Equitization of Certain Obligations On March 30, 2023, the Company entered into a modification with CSS to each of the CSS Management Agreement and CSS License Agreement (the “CSS Agreements Modification”), 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 on and after April 1, 2023 shall be paid through the issuance by our company of shares of our Class A common stock. The shares payable with respect to clause (a), above, shall be paid promptly following the execution of the CSS Agreements Modification. The shares that shall become issuable in the future under clause (b) shall be issued each fiscal quarter as such fees are earned. The shares shall be valued at the higher of (a) $3.05 (which was the highest of the closing price (as reflected on Nasdaq.com) of our Class A common stock on the trading day immediately preceding the signing of the modification, and the average closing price of our Class A common stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of the modification), and (b) the average closing price of our Class A common stock (as reflected on Nasdaq.com) for the five trading days immediately following the filing of this annual report on Form 10-K for the year ended December 31, 2022. It is anticipated that the approximately $3.8 million investment by CSS in this offering, and the equitization by CSS of fees under the CSS Management Agreement and CSS License Agreement as described above will increase the Company’s available working capital position by approximately $20 million dollars. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company and its wholly and majority owned subsidiaries in which a controlling financial interest is maintained and variable interest entities (“VIEs”), where the Company is considered the primary beneficiary, after the elimination of intercompany transactions. The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (‘‘GAAP’’). |
Reclassifications | Reclassifications Certain amounts reported for prior years have been reclassified to conform to the current year’s presentation. The reclassifications have no effect on the reported net loss. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company’s significant estimates include those related to revenue recognition, ultimate revenues, future cash flows of long-lived asset groups and the fair value of indefinite lived intangibles and goodwill. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include highly liquid investments with original maturities of three months or less and consist primarily of money market funds. Such investments are stated at cost, which approximates fair value. For the years ended December 31, 2022 and 2021, restricted cash was $3.7 million and $1.6 million, respectively. |
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 December 31, 2022, $7.3 million was 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 December 31, 2022, $2.3 million of revenue was deferred related to Perks and is included in Accrued expenses in the accompanying Consolidated Balance Sheets. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. 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 is recognized using the straight-line method over the following approximate useful lives: D Useful Life Redbox kiosks and components 3 - 5 years Computers and software 2 - 3 years Leasehold improvements (shorter of life of asset or remaining lease term) 3 - 6 years Office furniture and equipment 5 - 7 years Vehicles 3 - 4 years The value of the Company’s property and equipment as of December 31, 2022 is included in Other assets, net on the Consolidated Balance Sheets and is as follows: December 31, 2022 Redbox kiosks and components $ 13,707,512 Computers and software 13,857,011 Leasehold improvements (shorter of life of asset or remaining lease term) 5,119,077 Office furniture and equipment 1,287,104 Vehicles 2,747,604 Property and equipment, at cost 36,718,308 Accumulated depreciation and amortization (11,570,457) Property and equipment, net $ 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, Stockholder’s Equity, 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 $13.7 million of ARO liabilities are included in Other liabilities on the Consolidated Balance Sheets. |
Fair Value | Fair Value Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measurements, a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies, is as follows: Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets. Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3—Valuations based on unobservable inputs reflecting the Company’s own assumptions. These valuations require significant judgment and estimates. At December 31, 2022 and 2021, the fair value of the Company’s financial instruments including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, approximated their carrying value due primarily to the relative short-term nature of these instruments. Certain liabilities, including contingent consideration are measured at fair value on a recurring basis. Other assets and liabilities, including television and film content costs, goodwill, intangible assets are adjusted to fair value after initial recognition, only if an impairment charge is recognized. Impairment charges, if applicable, are generally determined using a discounted cash flow (DCF), which is a Level 3 valuation technique. |
Foreign Currency Translation | Foreign Currency Translation Assets and liabilities of the Company’s foreign subsidiaries with a functional currency other than the U.S. Dollar are translated into U.S. Dollars using applicable exchange rates at the balance sheet date. Revenue and expenses are translated at average exchange rates effective during the year. The resulting foreign currency translation gains and losses are included as a component of accumulated other comprehensive gain within Stockholders’ Equity on the Company’s Consolidated Balance Sheets. Assets and liabilities of the Company’s foreign subsidiaries for which the functional currency is not the U.S. Dollar are re-measured into U.S. Dollars using applicable exchange rates at the balance sheet date, except nonmonetary assets and liabilities, which are re-measured at the historical exchange rates prevailing when acquired. Revenue and expenses are re-measured at average exchange rates effective during the year. Foreign currency translation gains and losses from re-measurement are included in Other non-operating (income) expense in the accompanying Consolidated Statements of Operations. The amounts of net gain (loss) on foreign currency re-measurement recognized were immaterial for all periods presented. |
Business Combinations | Business Combinations The Company accounts for acquisitions of businesses using the acquisition method of accounting. The purchase price is allocated to the identifiable net assets acquired, including intangible assets, liabilities assumed and contingent liabilities acquired, as well as amounts attributed to noncontrolling interests, are recorded at fair value. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities, if any, is recorded as goodwill. Any transaction costs are expensed as incurred. Determining the fair value of assets acquired and liabilities assumed requires significant judgment, including the selection of valuation methodologies, estimates of future revenue and cash flows and discount rates. See Note 4, Business Combinations, for additional information. |
Accounts Receivable | Accounts Receivable Accounts receivable are stated at the amounts management expects to collect and are stated net of allowance for uncollectible accounts and video returns. An allowance for doubtful accounts is recorded based on a combination of historical experience, expected economic conditions and industry trends. For the years ended December 31, 2022 and 2021, the provision for doubtful accounts charged to operating expense was $427,270 and $691,406, respectively. |
Content Assets | Content Assets The Company produces original productions and acquires rights to films and television programming to exhibit on the Company’s AVOD Networks and to distribute to third parties, including sub-distributors. The Company also develops and produces programming for third parties. Original Productions Content assets related to original productions include the unamortized costs of completed, in-process, or in-development long-form and short-form video content produced by the Company. For video content, the Company’s capitalized costs include all direct production and financing costs, capitalized interest when applicable, and production overhead. The costs of producing video content are amortized using the individual-film-forecast method. These costs are amortized in the proportion that current period’s revenue bears to management’s estimate of ultimate revenue expected to be recognized from each production. For an episodic television series, the period over which ultimate revenue is estimated cannot exceed ten years following the date of delivery of the first episode, or, if still in production, five years from the date of delivery of the most recent episode, if later. |
Film Library | Film Library The film library includes the cost of acquiring individual title distribution rights or an acquired film library. Films are amortized using the individual-film-forecast-computation method. The film library is stated at the lower of unamortized cost or fair value. Amortization is based upon management’s best estimate of total future, or ultimate revenue. Amortization is adjusted when necessary to reflect increases or decreases in forecasted ultimate revenues. Ultimate revenues for individual films is no longer than 10 years and for an acquired film library, no longer than 20 years. |
Monetization & Recoverability of Content | Monetization & Recoverability of Content Content assets (licensed and produced) are predominantly monetized individually and therefore are reviewed at the individual level when an event or change in circumstance indicates a change in the expected usefulness of the content or the fair value may be less than the unamortized cost. The determination of the predominant monetization strategy is made at commencement of the production or license period and the classification of the monetization strategy as individual or group only changes if there is a significant change to the title’s monetization strategy relative to its initial assessment. Original productions, films and acquired film libraries are stated at the lower of amortized cost or estimated fair value. The valuation of content is reviewed at the individual title level or acquired library level, when an event or change in circumstances indicates that the fair value may be less than its unamortized cost and the valuation is based on a DCF methodology with assumptions for cash flows. Key inputs employed in the DCF methodology include estimates of a film ultimate revenue and costs as well as a discount rate. The discount rate utilized in the DCF is based on the weighted average cost of capital of the Company plus a risk premium representing the risk associated with acquiring a film. An impairment charge is recorded in the amount by which the unamortized costs exceed the estimated fair value. Estimates of future revenue involve measurement uncertainties and it is therefore possible that reductions in the carrying value of film library costs may be required because of changes in management’s future revenue estimates. See Note 8, Content Assets, for additional information. |
Licensed program rights and obligations | Licensed Program Rights and Obligations Programming rights acquired under license agreements are recorded as an asset and a corresponding liability upon commencement of the license period. The programming rights are amortized over the license period based on the expected monetization of each show, straight-line, or a ratable basis. Programming obligations represent the gross commitment amounts to be paid to program suppliers over the life of the contracts. License fees payable to suppliers based on a percentage of advertising revenue generated are reflected in Accrued expenses. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews its long-lived assets, other than goodwill and intangible assets with indefinite lives, for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset grouping may not be recoverable. If the sum of the expected future cash flows, undiscounted and without interest, is less than the carrying amount of the asset, an impairment loss is recognized as the amount by which the carrying amount of the asset exceeds its fair value. The expected cash flows are based on assumptions regarding the Company’s future business outlook and where appropriate, include a residual value based on a revenue market multiple. While the Company continues to review and analyze many factors that can impact its business prospects in the future, its analyses are subjective and are based on conditions existing at and trends leading up to the time the assumptions are made. Actual results could differ from these assumptions. See Note 9, Intangible Assets and Goodwill, for additional information. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination which are not individually identified and is allocated to the Company’s reporting units. The Company does not amortize goodwill. Intangible assets with finite lives, which primarily consist of acquired customer bases, non-compete agreements, content rights, brand value, contractual and partner agreements are generally amortized on a straight-line basis over their estimated lives, which range from 3 to 7 years. Amortization expense is included in amortization and depreciation in the Consolidated Statements of Operations. Goodwill and other intangible assets with indefinite lives are tested for impairment on an annual basis and between annual tests if events occur or circumstances change that would more likely than not reduce the fair value its carrying amount. If the carrying value of goodwill or an indefinite-lived intangible asset exceeds fair value, an impairment charge is recognized. The fair value of the Company’s reporting units or indefinite lived intangible assets are based on assumptions regarding its future business outlook. The Company continues to review and analyze many factors that can impact its business prospects in the future, its analyses are subjective and are based on conditions existing at and trends leading up to the time the assumptions are made. Actual results could differ from these assumptions. See Note 9, Intangible Assets and Goodwill, for additional information. |
Income Taxes | Income Taxes The Company records income taxes under the asset and liability method in accordance with FASB ASC Section 740. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. A valuation allowance is established, when necessary, to reduce net deferred tax assets to the amount expected to be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that includes the enactment date. The Company accounts for uncertain tax positions in accordance with the authoritative guidance issued by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 740: Income Taxes The Company includes interest and penalties related to its uncertain tax positions as part of income tax expense within its Consolidated Statements of Operations. At December 31, 2022 and 2021, the liabilities related to total unrecognized tax benefits were $0.1 million and $0.0 million, respectively. See Note 13, Income Taxes, for additional information. |
Film Library Acquisition Obligations | Film Library Acquisition Obligations Film library acquisition obligations represent amounts due in connection with acquiring film distribution rights that have been delivered. Pursuant to the film distribution rights agreements, the Company’s right to distribute films may revert to the licensor if the Company is unable to satisfy its financial obligations with respect to the acquisition of the related distribution rights. See Note 15, Commitments and Contingencies, for additional information. |
Accrued Participation Costs | Accrued Participation Costs Parties involved in the production of a title may be compensated in part by contingent payments based on the financial results of a title pursuant to contractual formulas (participations) and by contingent amounts due under provisions of collective bargaining agreements (residuals). Such costs are collectively referred to as participation costs. Participations may be given to creative talent, such as actors or writers, or to entities from whom distribution rights are licensed. Such amounts are estimated based on film ultimate revenues or airings. |
Related Party Transactions - Due To/Due From Affiliated Companies | Related Party Transactions – Due To/Due From Affiliated Companies The Company follows subtopic 850-10 of the FASB ASC for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 the related parties include subsidiaries and affiliates of the Company and Chicken Soup for the Soul Holdings, LLC (“CSS”), the Company’s parent company. The financial statements and accompanying notes include disclosures of material related party agreements and transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. See Note 14, Related Party Transactions, for additional information. |
Revenue Recognition | Revenue Recognition Revenue from contracts with customers is recognized as contractual performance obligations are satisfied; generally, this occurs at the point in time when the customer has the ability to direct the use and obtain substantially all the benefits of that good or service. The Company’s contractual performance obligations include the licensing or sale of content, production services, or delivery of online advertisements. Revenue is measured at contract inception as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services to customers. The Company also generates revenue through its Redbox Service business by providing installation, merchandising and break-fix services to other kiosk operators. The performance obligations are normally satisfied at the time the service is provided. Revenue from 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. Revenue from a direct sale out of the kiosk of previously rented movies is recognized at the time of sale. Revenue from On Demand rentals or purchases is also recognized at the time of sale. See Note 5, Revenue Recognition, for additional information. |
Share-Based Compensation | Share-Based Compensation The Company’s policy is to issue new shares for purchases under its Long-term Incentive Plan. Share-based compensation expense is estimated at the grant date based on a stock option’s fair value. The determination of the share-based compensation expense related to stock options is calculated using a Black-Scholes-Merton option pricing model and is affected by the Company’s stock price, expected stock price volatility over the term of the awards, expected term, risk free interest rate and expected dividends. The Company records forfeitures as they occur. See Note 6, Share-Based Compensation, for additional information. |
Employee Benefits 401(k) Plan | Employee Benefits 401(k) Plan Redbox had historically sponsored a 401(k) plan for all of its eligible employees. The plan includes optional employee contributions as a percentage of eligible earnings, subject to Internal Revenue Service limitations. The Company matches up to 100% on the first 3% of participating employees’ contributions and 50% on each of the next 2% (up to a maximum of 4% when the participant contributes at least 5%). In connection with the Redbox merger, the Company’s matching contribution to the Redbox 401(k) plan was $604,068 for the year ended December 31, 2022. Matching contributions to the 401(k) plan are expensed as incurred. |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred and included in Selling, general and administrative expenses on the Consolidated Statements of Operations. Advertising expense was $8.2 million and $4.8 million for the years ended December 31, 2022 and 2021, respectively. |
Treasury Stock | Treasury Stock Treasury stock is accounted for using the cost method. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) per share is computed based on the weighted average number of shares of all classes of common stock outstanding during the period. Diluted earnings (loss) per share is computed based on the weighted average number of common shares outstanding during the period increased, when applicable, by dilutive common stock equivalents, comprised of Class W warrants, Class Z warrants, Class I warrants, Class II warrants, Class III-A warrants, Class III-B warrants and stock options outstanding. When the Company has a net loss, dilutive common stock equivalents are not included as they would be anti-dilutive. In computing the effect of dilutive common stock equivalents, the Company uses the treasury stock method to calculate the related incremental shares. See Note 7, Earnings per Share, for additional information. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
Schedule of property and equipment useful lives | D Useful Life Redbox kiosks and components 3 - 5 years Computers and software 2 - 3 years Leasehold improvements (shorter of life of asset or remaining lease term) 3 - 6 years Office furniture and equipment 5 - 7 years Vehicles 3 - 4 years |
Schedule of property and equipment | December 31, 2022 Redbox kiosks and components $ 13,707,512 Computers and software 13,857,011 Leasehold improvements (shorter of life of asset or remaining lease term) 5,119,077 Office furniture and equipment 1,287,104 Vehicles 2,747,604 Property and equipment, at cost 36,718,308 Accumulated depreciation and amortization (11,570,457) Property and equipment, net $ 25,147,851 |
Business Combination (Tables)
Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Schedule of stand-alone financial performance | Year Ended December 31, 2022 Redbox Sonar Other Total Net revenue $ 86,322,726 $ 40,992,549 $ 27,852,492 $ 155,167,767 Net income (loss) $ (35,870,791) $ 24,034,837 $ 811,180 $ (11,024,774) Year Ended December 31, 2021 Redbox Sonar Other Total Net revenue $ - $ 19,207,115 $ 2,886,862 $ 22,093,977 Net income (loss) $ - $ 9,750,510 $ (17,711) $ 9,732,799 |
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 17,704,843 Content library 21,241,822 Prepaid expenses and other assets 16,783,468 Property and equipment 15,504,940 Right-of-use assets 7,183,735 Intangible assets (1) 291,200,000 Goodwill 215,284,816 Total assets acquired 597,825,174 Liabilities assumed: Debt 359,854,921 Accounts payable and accrued expenses 91,644,772 Operating lease liabilities 7,183,736 Financing lease liabilities 2,241,304 Other liabilities 66,895,293 Total liabilities assumed 527,820,026 Net assets acquired $ 70,005,148 (1) The weighted-average useful life of intangible assets acquired is approximately 14 years . |
Schedule of proforma financial information | Years Ended December 31, 2022 Net revenue $ 409,200,000 Net loss $ (287,625,000) |
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 |
Sonar Entertainment Inc. | |
Schedule of preliminary allocation of the purchase price | May 21, 2021 Accounts receivable, net $ 17,373,257 Film library 13,000,000 Intangible asset 3,600,000 Total identifiable assets acquired 33,973,257 Goodwill 19,838,743 Net assets acquired $ 53,812,000 |
Schedule of fair values of assets acquired | Cash $ 18,902,000 Fair Value of Additional Purchase Price – Library Accounts Receivable 1,580,000 Fair Value of Additional Purchase Price – Contracted TV Cash Flow 13,700,000 Fair Value of Additional Purchase Price – % of Film Cash Flow 630,000 Fair Value of Additional Purchase Price – % of Non-TV Business Cash Flow 2,300,000 Fair Value of Additional Purchase Price – Development Slate Cash Flow 5,200,000 Fair Value of Additional Purchase Price – CSS AVOD Equity Put 11,500,000 Total Estimated Purchase Price $ 53,812,000 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue Recognition [Abstract] | |
Schedule of disaggregate of revenue | Year Ended December 31, % of % of 2022 revenue 2021 revenue Revenue: VOD and streaming $ 144,484,749 57 % $ 62,630,109 57 % Retail 67,756,426 27 % — 0 % Licensing and other 40,568,935 16 % 47,765,357 43 % Net revenue $ 252,810,110 100 % $ 110,395,466 100 % |
Schedule of contract balances | December 31, December 31, 2022 2021 Accounts receivable, net $ 39,467,049 $ 25,818,447 Contract assets (included in accounts receivable) 74,496,376 34,395,360 Total accounts receivable, net $ 113,963,425 $ 60,213,807 Deferred revenue (included in accrued expenses) $ 12,043,508 $ 1,536,687 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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, 2020 1,131,250 $ 8.13 2.66 $ 13,417,900 Granted 847,213 20.68 Forfeited (14,958) 16.20 Exercised (a) (586,166) 7.26 Expired — — Outstanding at December 31, 2021 1,377,339 $ 16.13 3.37 $ 2,579,201 Granted 322,500 8.32 Forfeited (88,793) 19.27 Exercised (40,000) 7.54 Expired (60,000) 9.60 Outstanding at December 31, 2022 1,511,046 $ 14.89 3.15 $ — Vested and exercisable at December 31, 2021 648,119 $ 11.64 2.77 $ 2,407,521 Vested and exercisable at December 31, 2022 889,623 $ 14.02 2.62 $ — (a) During the year ended December 31, 2021, 184,550 stock options were exercised and converted to 121,255 shares of Class A Common Stock via the cashless exercise option. |
Schedule of weighted average assumptions to estimate the fair value of stock options | Year Ended December 31, Weighted Average Assumptions: 2022 2021 Expected dividend yield — % — % Expected equity volatility 80.7 % 62.0 % Expected term (years) 5 5 Risk-free interest rate 3.27 % 1.29 % Exercise price per stock option $ 9.52 $ 16.13 Market price per share $ 9.52 $ 16.13 Weighted average fair value per stock option $ 5.45 $ 8.66 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of components of basic and diluted loss per share | Year Ended December 31, 2022 2021 Net loss available to common stockholders $ (111,290,202) $ (59,419,724) Basic weighted-average common shares outstanding 17,261,460 15,018,421 Dilutive effect of options and warrants — — Weighted-average diluted common shares outstanding 17,261,460 15,018,421 Basic and diluted loss per share $ (6.45) $ (3.96) Anti-dilutive stock options and warrants 356,969 3,440,866 |
Content Assets (Tables)
Content Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Content Assets [Abstract] | |
Schedule of content assets | December 31, December 31, 2022 2021 Original productions: Programming costs released $ 31,081,500 $ 25,669,921 In production 806,009 562,808 In development 8,377,649 6,662,591 Accumulated amortization (a) (31,651,552) (23,268,306) Programming costs, net 8,613,606 9,627,014 Film library: Film library acquisition costs 208,982,878 134,463,191 Accumulated amortization (b) (125,967,305) (80,847,748) Film library costs, net 83,015,573 53,615,443 Licensed program rights: Programming rights 56,288,723 1,209,362 Accumulated amortization (21,827,394) (806,423) Programming rights, net 34,461,329 402,939 Content assets, net $ 126,090,508 $ 63,645,396 (a) (b) |
Schedule of content asset amortization | Years Ended December 31, 2022 2021 Original productions $ 4,080,670 $ 4,920,027 Film library 40,269,681 34,011,566 Licensed program rights 21,020,971 51,237 Content asset impairment 9,152,452 9,794,854 Total content asset amortization $ 74,523,774 $ 48,777,684 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets, net | Gross Net Carrying Accumulated Carrying Amount Amortization Impairment Amount 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 December 31, 2021: Crackle Plus content rights $ 1,708,270 $ 1,494,736 $ — $ 213,534 Crackle Plus brand value 18,807,004 7,052,626 — 11,754,378 Crackle Plus partner agreements 4,005,714 2,103,000 — 1,902,714 Distribution network 3,600,000 700,000 — 2,900,000 Locomotive contractual rights 1,356,868 92,403 — 1,264,465 Total definite lived intangibles 29,477,856 11,442,765 — 18,035,091 Popcornflix Brand 7,163,943 — — 7,163,943 Chicken Soup for the Soul Brand 5,000,000 — — 5,000,000 Total indefinite lived intangibles 12,163,943 — — 12,163,943 Total $ 41,641,799 $ 11,442,765 $ — $ 30,199,034 |
Schedule of future amortization expense | 2023 $ 30,799,605 2024 29,275,033 2025 27,124,226 2026 24,716,973 2027 and beyond 188,509,872 Total $ 300,425,709 |
Schedule of goodwill | December 31, 2022 Online Networks Distribution & Production Redbox Beginning balance $ 18,911,027 $ 21,075,503 $ — Acquisitions — 5,476,711 215,284,816 Accumulated impairment losses — — — Total $ 18,911,027 $ 26,552,214 $ 215,284,816 December 31, 2021 Online Networks Distribution & Production SVOD Beginning balance $ 18,911,027 $ 1,236,760 $ 1,300,319 Acquisitions — 19,838,743 — Accumulated impairment losses — — (1,300,319) Total $ 18,911,027 $ 21,075,503 $ — |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Schedule of amounts recorded in condensed consolidated balance sheet | December 31, 2022 Right-of-Use Assets Operating lease right-of-use assets $ 16,315,342 Lease Liabilities: Operating lease liabilities $ 18,079,469 Finance Lease cost Amortization of right-of-use assets $ 827,191 Interest of lease liabilities 35,633 Total finance lease cost $ 862,824 December 31, 2022 Operating leases Weighted average remaining lease term 5.9 years Weighted average discount rate 7% Finance Leases Weighted average remaining lease term 1.1 years Weighted average discount rate 4% |
Schedule of expected future payments relating to our operating lease liabilities | Operating Financing 2023 $ 4,941,930 $ 1,269,035 2024 4,195,546 649,825 2025 3,675,921 390,759 2026 2,104,048 86,163 2027 and thereafter 6,873,348 — Total minimum payments 21,790,793 2,395,782 Less amounts representing interest 3,711,324 274,880 Present value of minimum payments $ 18,079,469 $ 2,120,902 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of debt | December 31, December 31, 2022 2021 HPS term $ 335,342,705 $ — HPS revolving loan 82,362,336 — Notes due 2025 44,855,900 32,895,900 Film acquisition advances 27,837,565 6,196,909 Midcap revolving loan — 17,585,699 MUFG Union Bank film financing facility 6,577,243 — Other debt 3,204,255 — Total gross debt 500,180,004 56,678,508 Less: debt issuance costs and discounts (20,526,393) (1,818,909) Total debt, net 479,653,611 54,859,599 Less: current portion (18,798,515) (6,196,909) Total long-term debt, net $ 460,855,096 $ 48,662,690 |
Schedule of aggregate maturities of long-term debt | 2023 $ 18,798,514 2024 16,976,734 2025 128,980,029 2026 82,022 2027 and beyond 335,342,705 Total $ 500,180,004 |
Put Option Obligation (Tables)
Put Option Obligation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
CSS AVOD Inc. | |
Business Acquisition [Line Items] | |
Schedule of interest in acquire | December 31, 2022 Put Option Obligation $ 11,400,000 Noncontrolling Interests 94,247 Total $ 11,494,247 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of current and deferred income tax provision | Year Ended December 31, 2022 2021 Current provision: States $ (343,361) $ 66,000 Total current provision $ (343,361) $ 66,000 Deferred provision: Deferred income tax (benefit) provision $ (36,957,881) $ — Total deferred (benefit) provision (36,957,881) — Total income tax (benefit) provision $ (37,301,242) $ 66,000 |
Schedule of reconciliation of effective income tax rate | Year Ended December 31, 2022 2021 Federal statutory rate of 21% 21.00 % 21.00 % Increase (decrease) resulting from: Crackle amortization — % (0.21) % State and local taxes 4.40 % (0.46) % Valuation Allowance 3.30 % — Transaction Costs (0.90) % — Programming costs — % (10.99) % Share-based compensation - long-term incentive plan — % (1.41) % Film library — % (8.32) % Allowance for doubtful accounts — % 0.24 % Other (1.00) % 0.15 % Actual tax provision 26.80 % 0.00 % |
Schedule of components of deferred tax assets and liabilities | December 31, December 31, 2022 2021 Deferred tax assets: Net operating loss carry-forwards $ 36,323,046 $ 14,503,000 Section 163(j) carryover 6,325,013 — ROU liabilities 4,582,241 — Compensatory accruals 3,228,997 — ARO liabilities 3,461,123 — Other liabilities 3,800,018 — Property plant & equipment 3,374,008 — Acquisition-related costs — 539,000 Film library and other intangibles 18,608,104 16,883,000 Other liabilities — 337,000 Total deferred tax assets 79,702,550 32,262,000 Valuation allowance (25,291,302) (31,412,000) Total deferred tax assets, net 54,411,248 850,000 Deferred tax liabilities: Programming costs — (299,000) ROU assets (4,135,123) — Intangible assets (51,706,018) — Indefinite lived intangibles (2,195,876) — Goodwill (987,618) — Other assets (1,334,703) (551,000) Total deferred tax liabilities (60,359,338) (850,000) Net deferred tax asset (liabilities) $ (5,948,090) $ — |
Schedule of aggregate changes in the balance of unrecognized tax benefits | December 31, December 31, 2022 2021 Balance, beginning of the period $ — $ — Additions based on tax positions related to the current year 86,192 — Additions for tax positions related to prior years 36,976 — Reductions for tax positions related to prior years — — Deductions for tax positions related to prior years — — Deductions for tax positions effectively settled — — Balance, end of period $ 123,168 $ — |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
Schedule of intercompany receivable and payable | December 31, December 31, 2022 2021 Due to affiliated companies $ 3,778,936 $ 489,959 Total due to/due from affiliated companies $ 3,778,936 $ 489,959 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Acquisition of Content and Distribution Rights | |
Other Commitments [Line Items] | |
Schedule of estimated content commitments | Total 2023 2024 2025 and thereafter Minimum estimated content commitments $ 98,021,577 $ 88,311,297 $ 9,710,280 $ — |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of warrant activity | Warrant activity as of December 31, 2022 is as follows: Weighted Weighted Average Average Remaining Outstanding Outstanding Exercise Contract Warrants at December 31, 2021 Issued Exercised at December 31, 2022 Price Term (Yrs.) Class W 526,362 — — 526,362 $ 7.50 0.75 Class Z 123,109 — — 123,109 12.00 1.75 CSSE Class I 800,000 — — 800,000 8.13 1.62 CSSE Class II 1,200,000 — — 1,200,000 9.67 1.62 CSSE Class III-A 380,000 — — 380,000 11.61 1.62 CSSE Class III-B 1,620,000 — — 1,620,000 11.61 1.62 HPS — 1,011,530 (1,011,530) — — — Redbox Public (CSSEL) (1) — 1,039,183 — 1,039,183 132.18 4.07 Redbox Private (1) — 339,065 — 339,065 132.18 4.07 Total 4,649,471 2,389,778 (1,011,530) 6,027,719 $ 30.54 1.85 (1) The number of warrants is shown on an as converted basis based on the exchange ratio of 0.087 , the gross warrants are 11,944,627 public and 3,897,303 private. |
Client Concentration (Tables)
Client Concentration (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
Schedules of concentration risk with net revenue and gross accounts receivable | Year Ended December 31, Revenues 2022 2021 Customer A — % 16 % Year Ended December 31, Accounts Receivable 2022 2021 Customer A 14 % — % Customer B 12 % 27 % |
Description of the Business (De
Description of the Business (Details) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) item segment country | Dec. 31, 2021 USD ($) | Aug. 31, 2022 item | |
Number of flagship | item | 3 | ||
Number of channels | item | 160 | ||
Number of reportable segments | segment | 1 | ||
Number of countries and territories worldwide the company has a presence | country | 56 | ||
Deficit | $ | $ (247,752,446) | $ (136,462,244) | |
Net loss | $ | (111,290,202) | $ (59,419,724) | |
HPS Credit Agreement | Asset Based Lending Facility | Maximum | |||
Aggregate principal amount | $ | $ 40,000,000 | ||
Redbox Entertainment Inc. | |||
Number of self service kiosks operated | item | 32,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Other) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Restricted Cash | $ 3,700,000 | $ 1,600,000 |
Provision for doubtful accounts | $ 427,270 | 691,406 |
Period following the date of delivery of the first episode over with the ultimate revenue may be estimated | 10 years | |
Period from date of delivery of most recent episode if still in production the ultimate revenue may be estimated | 5 years | |
Unrecognized tax benefits | $ 123,168 | 0 |
Advertising expense | $ 8,200,000 | $ 4,800,000 |
Minimum | ||
Estimate of useful lives | 3 years | |
Maximum | ||
Period of ultimate revenue estimated for individual films | 10 years | |
Period of ultimate revenue estimated for acquired film library | 20 years | |
Estimate of useful lives | 7 years | |
Accrued expenses | ||
Deferred promotional codes and gift cards | $ 7,300,000 | |
Deferred loyalty program | 2,300,000 | |
Other liabilities | ||
Asset retirement obligation | $ 13,700,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, at cost | $ 36,718,308 |
Accumulated depreciation and amortization | (11,570,457) |
Property and equipment, net | 25,147,851 |
Redbox kiosks and components | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, at cost | $ 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 | $ 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 |
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 |
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 | $ 2,747,604 |
Vehicles | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Vehicles | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 4 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Employee Benefits 401(k) Plan (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Employee Benefits 401(k) Plan | |
Employees' contributions | 3% |
Participant contribution | 5% |
Contribution to the Redbox 401(k) plan | $ 604,068 |
Scenario One | |
Employee Benefits 401(k) Plan | |
Employers' contributions | 100% |
Employees' contributions | 2% |
Scenario Two | |
Employee Benefits 401(k) Plan | |
Employers' contributions | 50% |
Employees' contributions | 4% |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Details) - USD ($) | Dec. 31, 2022 | Jan. 01, 2022 |
Operating lease right-of-use assets | $ 16,315,342 | |
Operating lease liabilities | $ 18,079,469 | |
ASU 2016-02 | ||
Operating lease right-of-use assets | $ 8,600,000 | |
Operating lease liabilities | $ 10,000,000 |
Business Combination - Purchase
Business Combination - Purchase Price Consideration Allocation (Details) - USD ($) | 12 Months Ended | ||
Mar. 04, 2022 | May 21, 2021 | Dec. 31, 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 | ||
Sonar Entertainment Inc. | |||
Business Acquisition [Line Items] | |||
Cash consideration | $ 18,902,000 | ||
Total | 53,812,000 | ||
Fair Value of Additional Purchase Price - Library Account Receivable | Sonar Entertainment Inc. | |||
Business Acquisition [Line Items] | |||
Total | 1,580,000 | ||
Fair Value of Additional Purchase Price - Contracted TV Cash Flow | Sonar Entertainment Inc. | |||
Business Acquisition [Line Items] | |||
Total | 13,700,000 | ||
Fair Value of Additional Purchase Price - % of Film Cash Flow | Sonar Entertainment Inc. | |||
Business Acquisition [Line Items] | |||
Total | 630,000 | ||
Fair Value of Additional Purchase Price - % of Non-TV Business Cash Flow | Sonar Entertainment Inc. | |||
Business Acquisition [Line Items] | |||
Total | 2,300,000 | ||
Fair Value of Additional Purchase Price - Development Slate Cash Flow | Sonar Entertainment Inc. | |||
Business Acquisition [Line Items] | |||
Total | 5,200,000 | ||
Fair Value of Additional Purchase Price - CSS AVOD Equity Put | Sonar Entertainment Inc. | |||
Business Acquisition [Line Items] | |||
Total | $ 11,500,000 | ||
RSUs | Redbox Entertainment Inc. | |||
Business Acquisition [Line Items] | |||
Equity consideration | 703,244 | ||
Class A Common Stock | 1091 Media, LLC | |||
Business Acquisition [Line Items] | |||
Equity consideration | 3,303,750 | ||
Series A Preferred Stock | 1091 Media, LLC | |||
Business Acquisition [Line Items] | |||
Equity consideration | $ 1,980,000 | ||
Common Stock | Class A Common Stock | Redbox Entertainment Inc. | |||
Business Acquisition [Line Items] | |||
Equity consideration | $ 65,828,719 |
Business Combination - Purcha_2
Business Combination - Purchase Price to Fair Value of Net Assets Acquired of Redbox (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Assets acquired: | |||
Goodwill | $ 260,748,057 | $ 39,986,530 | |
Redbox Entertainment Inc. | |||
Assets acquired: | |||
Cash, cash equivalents and restricted cash | 12,921,550 | ||
Accounts receivable | 17,704,843 | ||
Content library | 21,241,822 | ||
Prepaid expenses and other assets | 16,783,468 | ||
Property and equipment | 15,504,940 | ||
Right-of-use assets | 7,183,735 | ||
Intangible assets(1) | 291,200,000 | ||
Goodwill | 215,284,816 | $ 1,300,319 | |
Total assets acquired | 597,825,174 | ||
Liabilities assumed: | |||
Debt | 359,854,921 | ||
Accounts payable and accrued expenses | 91,644,772 | ||
Operating lease liabilities | 7,183,736 | ||
Financing lease liabilities | 2,241,304 | ||
Other liabilities | 66,895,293 | ||
Total liabilities assumed | 527,820,026 | ||
Net assets acquired | $ 70,005,148 |
Business Combination - Purcha_3
Business Combination - Purchase Price to Fair Value of Net Assets Acquired (Details) - USD ($) | Dec. 31, 2022 | Mar. 04, 2022 | Dec. 31, 2021 | May 21, 2021 |
Purchase price consideration allocated to fair value of net assets acquired: | ||||
Goodwill | $ 260,748,057 | $ 39,986,530 | ||
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 | |||
Net assets acquired | $ 11,956,226 | |||
Sonar Entertainment Inc. | ||||
Purchase price consideration allocated to fair value of net assets acquired: | ||||
Accounts receivable, net | $ 17,373,257 | |||
Film library | 13,000,000 | |||
Intangibles | 3,600,000 | |||
Goodwill | 19,838,743 | |||
Net assets acquired | 33,973,257 | |||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | $ 53,812,000 |
Business Combination - Addition
Business Combination - Additional Information (Details) | 1 Months Ended | 12 Months Ended | ||||||||
Mar. 31, 2023 USD ($) | Aug. 11, 2022 USD ($) shares | Aug. 10, 2022 USD ($) | Mar. 04, 2022 USD ($) item country shares | Oct. 21, 2021 USD ($) | May 21, 2021 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Oct. 31, 2021 | |
Exchange ratio | 0.087 | |||||||||
Contingent consideration | $ 7,311,949 | $ 9,764,256 | ||||||||
Net revenue | 155,167,767 | 22,093,977 | ||||||||
Net loss | (11,024,774) | 9,732,799 | ||||||||
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 | $ 700,000 | |||||||||
Purchase price consideration | 70,005,148 | |||||||||
Intangibles | 291,200,000 | |||||||||
Weighted-average useful life of intangible assets | 14 years | |||||||||
Net revenue | 86,322,726 | |||||||||
Net loss | (35,870,791) | |||||||||
Expected tax deductible amount | $ 7,900,000 | |||||||||
Redbox Entertainment Inc. | Selling, general and administrative | ||||||||||
Accelerated stock based compensation expense | 2,232,182 | |||||||||
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 | |||||||||
Fair value of RSUs | $ 2,900,000 | |||||||||
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 | |||||||||
1091 Media, LLC | Minimum | ||||||||||
Estimated useful lives | 24 years | |||||||||
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. | ||||||||||
Purchase price consideration | $ 53,812,000 | |||||||||
Cash consideration | 18,902,000 | |||||||||
Intangibles | $ 3,600,000 | |||||||||
Estimated useful lives | 36 months | |||||||||
Net revenue | 40,992,549 | 19,207,115 | ||||||||
Net loss | $ 24,034,837 | 9,750,510 | ||||||||
CSS AVOD Inc. | ||||||||||
Percentage of shares of common stock | 5% | 5% | ||||||||
Cash consideration | $ 11,500,000 | $ 11,500,000 | ||||||||
Contingent consideration | 34,900,000 | |||||||||
Contingent consideration arrangements, liability paid | $ 7,200,000 | $ 8,600,000 | ||||||||
CSS AVOD Inc. | Subsequent Event | ||||||||||
Percentage of shares of common stock | 100% | 100% | ||||||||
Cash consideration | $ 11,500,000 | $ 11,500,000 | ||||||||
CSS AVOD Inc. | Put Option | ||||||||||
Percentage of shares of common stock | 5% | |||||||||
Cash consideration | $ 11,500,000 | |||||||||
CSS AVOD Inc. | Strike price | Put Option | ||||||||||
Initial price and strike price | 11,500,000 | |||||||||
CSS AVOD Inc. | Option volatility | Put Option | ||||||||||
Initial price and strike price | 100 | |||||||||
CSS AVOD Inc. | Expected term | Put Option | ||||||||||
Initial price and strike price | 1.5 | |||||||||
CSS AVOD Inc. | Initial price | Put Option | ||||||||||
Initial price and strike price | 125,000 | |||||||||
Locomotive Global Inc. | ||||||||||
Percentage of shares of common stock | 51% | 51% | ||||||||
Purchase price consideration | $ 650,000 |
Business Combination - Standalo
Business Combination - Standalone financial performance (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Net revenue | $ 155,167,767 | $ 22,093,977 |
Net income (loss) | (11,024,774) | 9,732,799 |
Redbox Entertainment Inc. | ||
Net revenue | 86,322,726 | |
Net income (loss) | (35,870,791) | |
Sonar Entertainment Inc. | ||
Net revenue | 40,992,549 | 19,207,115 |
Net income (loss) | 24,034,837 | 9,750,510 |
Other | ||
Net revenue | 27,852,492 | 2,886,862 |
Net income (loss) | $ 811,180 | $ (17,711) |
Business Combination - Pro Form
Business Combination - Pro Forma Revenue (Details) - Redbox Entertainment Inc. | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Business Acquisition [Line Items] | |
Net revenue | $ 409,200,000 |
Net loss | $ (287,625,000) |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregates our revenue by major operations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Net revenues | $ 252,810,110 | $ 110,395,466 |
Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | $ 252,810,110 | $ 110,395,466 |
Revenue | Customer Concentration Risk [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 100% | 100% |
VOD and streaming | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 144,484,749 | $ 62,630,109 |
VOD and streaming | Customer Concentration Risk [Member] | Revenue | Customer Concentration Risk [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 57% | 57% |
Retail | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 67,756,426 | |
Retail | Revenue | Customer Concentration Risk [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 27% | 0% |
Licensing and other | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 40,568,935 | $ 47,765,357 |
Licensing and other | Customer Concentration Risk [Member] | Revenue | Customer Concentration Risk [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk percentage | 16% | 43% |
Licensing revenues | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | $ 114,327,307 | $ 64,027,207 |
Revenue Recognition - Contract
Revenue Recognition - Contract assets (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Contract with Customer, Contract Asset, Contract Liability, and Receivable [Abstract] | ||
Accounts receivable, net | $ 39,467,049 | $ 25,818,447 |
Contract assets (included in accounts receivable) | 74,496,376 | 34,395,360 |
Total accounts receivable, net | 113,963,425 | 60,213,807 |
Deferred revenue (included in accrued expenses) | $ 12,043,508 | $ 1,536,687 |
Revenue Recognition - Additiona
Revenue Recognition - Additional information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Impairment losses from CSSE contracts with customers | $ 0 | $ 0 |
Net revenues | $ 252,810,110 | 110,395,466 |
Revenue, Remaining Performance Obligation, Optional Exemption, Performance Obligation [true false] | true | |
Revenue, Practical Expedient, Incremental Cost of Obtaining Contract [true false] | true | |
Licensing revenues | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | $ 114,327,307 | 64,027,207 |
Film rights relicensed | ||
Disaggregation of Revenue [Line Items] | ||
Net revenues | $ 0 | $ 6,537,000 |
Minimum | ||
Disaggregation of Revenue [Line Items] | ||
Contract receivable extension term | 1 year | |
Maximum | ||
Disaggregation of Revenue [Line Items] | ||
Contract receivable extension term | 5 years |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - Employee Stock Option [Member] - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of Stock Options, Total outstanding at the beginning of the period | 1,377,339 | 1,131,250 | |
Number of Stock Options, Options granted | 322,500 | 847,213 | |
Number of Stock Options, Options forfeited | (88,793) | (14,958) | |
Number of Stock Options, Options exercised | (40,000) | (586,166) | |
Number of Stock Options, Options expired | (60,000) | ||
Number of Stock Options, Total outstanding at the end of the period | 1,511,046 | 1,377,339 | 1,131,250 |
Number of Stock Options, Total vested and exercisable | 889,623 | 648,119 | |
Weighted Average Exercise Price, Beginning of period | $ 16.13 | $ 8.13 | |
Weighted Average Exercise Price, Granted | 8.32 | 20.68 | |
Weighted Average Exercise Price, Forfeited | 19.27 | 16.20 | |
Weighted Average Exercise Price, Exercised | 7.54 | 7.26 | |
Weighted Average Exercise Price, Expired | 9.60 | ||
Weighted Average Exercise Price, End of period | 14.89 | 16.13 | $ 8.13 |
Weighted Average Exercise Price, Vested and Exercisable | $ 14.02 | $ 11.64 | |
Weighted Average Remaining Contract Term, Total outstanding | 3 years 1 month 24 days | 3 years 4 months 13 days | 2 years 7 months 28 days |
Weighted Average Remaining Contract Term Exercise Price, Vested and Exercisable | 2 years 7 months 13 days | 2 years 9 months 7 days | |
Aggregate Intrinsic Value, Total outstanding Balance, Beginning of the period | $ 2,579,201 | $ 13,417,900 | |
Aggregate Intrinsic Value, Total outstanding Balance, End of the period | 2,579,201 | $ 13,417,900 | |
Aggregate Intrinsic Value, Vested and Exercisable | $ 2,407,521 | ||
Stock options were exercised | 184,550 | ||
Class A Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Converted shares | 121,255 |
Share-Based Compensation - Weig
Share-Based Compensation - Weighted average assumptions (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Valuation assumptions: | ||
Expected equity volatility | 80.70% | 62% |
Expected term (years) | 5 years | 5 years |
Risk-free interest rate | 3.27% | 1.29% |
Exercise price per stock option | $ 9.52 | $ 16.13 |
Market price per share | 9.52 | 16.13 |
Weighted average fair value per stock option | $ 5.45 | $ 8.66 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||||
Aug. 11, 2022 | Jan. 01, 2017 | Jun. 30, 2022 | Dec. 31, 2025 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
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 | ||||||
Share-based compensation expense recognized | $ 3,307,617 | ||||||
Unrecognized pre-tax compensation expense | 5,258,223 | ||||||
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 | $ 171,669 | $ 1,778,937 | |||||
Straight-line [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation expense recognized | 3,382,529 | $ 2,684,307 | |||||
Management [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based compensation expense recognized | $ 255,000 | $ 2,563,500 | |||||
Redbox Entertainment Inc. | Selling, general and administrative | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Accelerated stock based compensation expense | $ 2,232,182 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Net loss available to common stockholders | $ (111,290,202) | $ (59,419,724) |
Basic weighted-average common shares outstanding | 17,261,460 | 15,018,421 |
Weighted-average diluted common shares outstanding | 17,261,460 | 15,018,421 |
Basic loss per share | $ (6.45) | $ (3.96) |
Diluted loss per share | $ (6.45) | $ (3.96) |
Stock Options And Warrants [Member] | ||
Dilutive effect of options and warrants | 356,969 | 3,440,866 |
Content Assets (Details)
Content Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Content Assets [Abstract] | ||
Programming costs released | $ 31,081,500 | $ 25,669,921 |
In production | 806,009 | 562,808 |
In development | 8,377,649 | 6,662,591 |
Accumulated amortization | (31,651,552) | (23,268,306) |
Programming costs, net | 8,613,606 | 9,627,014 |
Film library acquisition costs | 208,982,878 | 134,463,191 |
Accumulated amortization | (125,967,305) | (80,847,748) |
Net film library costs | 83,015,573 | 53,615,443 |
Programming rights | 56,288,723 | 1,209,362 |
Accumulated amortization | (21,827,394) | (806,423) |
Programming rights, net | 34,461,329 | 402,939 |
Content assets, net | 126,090,508 | 63,645,396 |
Television Programming Costs Impairment, Original Productions | 4,302,576 | 6,049,631 |
Television Programming Costs Impairment, Acquired Film Library | $ 4,849,876 | $ 3,745,223 |
Content Assets - Amortization (
Content Assets - Amortization (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Content Assets [Abstract] | ||
Total content asset amortization | $ 15,133,327 | $ 5,547,939 |
Original productions | 4,080,670 | 4,920,027 |
Film library | 40,269,681 | 34,011,566 |
Licensed program rights | 21,020,971 | 51,237 |
Content asset impairment | 9,152,452 | 9,794,854 |
Total content asset amortization | $ 74,523,774 | $ 48,777,684 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill - Finite-lived (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Gross Carrying Amount | $ 330,501,801 | $ 29,477,856 |
Accumulated Amortization | 26,576,092 | 11,442,765 |
Impairment | 3,500,000 | |
Impairment | 3,500,000 | |
Net Carrying Amount | 300,425,709 | 18,035,091 |
Indefinite lived intangible assets | 5,000,000 | 12,163,943 |
Finite and indefinite intangible assets, Gross Carrying Amount | 335,501,801 | 41,641,799 |
Finite and indefinite intangible assets, Net Carrying Amount | 305,425,709 | 30,199,034 |
Website Development | ||
Gross Carrying Amount | 3,600,000 | |
Accumulated Amortization | 700,000 | |
Net Carrying Amount | 2,900,000 | |
Crackle Plus content rights | ||
Gross Carrying Amount | 1,708,270 | 1,708,270 |
Accumulated Amortization | 1,708,270 | 1,494,736 |
Net Carrying Amount | 213,534 | |
Crackle Plus brand value | ||
Gross Carrying Amount | 18,807,004 | 18,807,004 |
Accumulated Amortization | 9,739,341 | 7,052,626 |
Net Carrying Amount | 9,067,663 | 11,754,378 |
Crackle Plus partner agreements | ||
Gross Carrying Amount | 4,005,714 | 4,005,714 |
Accumulated Amortization | 2,904,143 | 2,103,000 |
Net Carrying Amount | 1,101,571 | 1,902,714 |
Distribution network | ||
Gross Carrying Amount | 3,600,000 | |
Accumulated Amortization | 1,900,000 | |
Net Carrying Amount | 1,700,000 | |
Locomotive contractual rights | ||
Gross Carrying Amount | 1,206,870 | 1,356,868 |
Accumulated Amortization | 484,477 | 92,403 |
Net Carrying Amount | 722,393 | 1,264,465 |
1091 intangible asset | ||
Gross Carrying Amount | 2,810,000 | |
Accumulated Amortization | 861,111 | |
Net Carrying Amount | 1,948,889 | |
Trade names and trademarks | ||
Gross Carrying Amount | 82,700,000 | |
Accumulated Amortization | 2,067,500 | |
Net Carrying Amount | 80,632,500 | |
Technology | ||
Gross Carrying Amount | 30,800,000 | |
Accumulated Amortization | 1,650,000 | |
Net Carrying Amount | 29,150,000 | |
Customer Relationships | ||
Gross Carrying Amount | 177,700,000 | |
Accumulated Amortization | 5,261,250 | |
Net Carrying Amount | 172,438,750 | |
Popcornflix brand value | ||
Gross Carrying Amount | 7,163,943 | |
Impairment | 3,500,000 | |
Net Carrying Amount | 3,663,943 | |
Popcornflix brand value | ||
Indefinite lived intangible assets | 7,163,943 | |
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 ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2023 | $ 30,799,605 | |
2024 | 29,275,033 | |
2025 | 27,124,226 | |
2026 | 24,716,973 | |
2027 and beyond | 188,509,872 | |
Amortization expense | $ 300,425,709 | $ 18,035,091 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill - Goodwill (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | May 21, 2021 | Dec. 31, 2020 | |
Goodwill | $ 260,748,057 | $ 39,986,530 | ||
Sonar Entertainment Inc. | ||||
Goodwill | $ 19,838,743 | |||
Online networks | ||||
Goodwill | 18,911,027 | 18,911,027 | $ 18,911,027 | |
Distribution and Production | ||||
Goodwill | 26,552,214 | 21,075,503 | 1,236,760 | |
Acquisitions | 5,476,711 | 19,838,743 | ||
Redbox Entertainment Inc. | ||||
Goodwill | 215,284,816 | $ 1,300,319 | ||
Acquisitions | 215,284,816 | |||
Accumulated impairment losses | $ (1,300,319) | |||
SVOD | ||||
Accumulated impairment losses | $ (1,300,319) |
Intangible Assets and Goodwil_5
Intangible Assets and Goodwill - Narrative (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | |
Amortization expense | $ 15,133,327 | $ 5,547,939 |
Intangible assets | $ 260,748,057 | 39,986,530 |
Number of reporting units | segment | 3 | |
Goodwill and intangible asset impairment | $ 3,500,000 | $ 2,044,647 |
SVOD | ||
Goodwill, Impairment Loss | 1,300,319 | |
Popcornflix brand value | ||
Impairment of intangible assets | $ 3,500,000 | |
Impairment, Intangible Asset, Finite-Lived, Statement of Income or Comprehensive Income [Extensible Enumeration] | Business Combination, Acquisition Related Costs | |
Useful lives | 5 years | |
Goodwill, Impairment Loss | $ 0 |
Leases - Balance sheet (Details
Leases - Balance sheet (Details) | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Right-of-Use Assets | |
Operating lease right-of-use assets | $ 16,315,342 |
Lease Liabilities: | |
Operating lease liabilities | 18,079,469 |
Finance Lease cost | |
Amortization of right-of-use assets | 827,191 |
Interest of lease liabilities | 35,633 |
Total finance lease cost | $ 862,824 |
Operating leases, weighted average remaining lease term (in years) | 5 years 10 months 24 days |
Operating leases, weighted average discount rate (as percentage) | 7% |
Finance Leases, weighted average remaining lease term (in years) | 1 year 1 month 6 days |
Finance Leases, weighted average discount rate (as percentage) | 4% |
Leases - Future payments of ope
Leases - Future payments of operating and finance lease liabilities (Details) | Dec. 31, 2022 USD ($) |
Operating | |
2023 | $ 4,941,930 |
2024 | 4,195,546 |
2025 | 3,675,921 |
2026 | 2,104,048 |
2027 and thereafter | 6,873,348 |
Total minimum payments | 21,790,793 |
Less amounts representing interest | 3,711,324 |
Present value of minimum payments | 18,079,469 |
Financing | |
2023 | 1,269,035 |
2024 | 649,825 |
2025 | 390,759 |
2026 | 86,163 |
Total minimum payments | 2,395,782 |
Less amounts representing interest | 274,880 |
Present value of minimum payments | $ 2,120,902 |
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities. |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Rent expenses | $ 4.2 | $ 2 |
Cash paid for operating lease | $ 3.1 |
Debt - Schedule (Details)
Debt - Schedule (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Total debt | $ 500,180,004 | $ 56,678,508 |
Less: debt issuance costs and discounts | (20,526,393) | (1,818,909) |
Total debt, net | 479,653,611 | 54,859,599 |
Less: current portion | (18,798,515) | (6,196,909) |
Total long-term debt, net | 460,855,096 | 48,662,690 |
HPS Term Loan | ||
Total debt | 335,342,705 | |
HPS Revolving Loan | ||
Total debt | 82,362,336 | |
Midcap Revolving Loan | ||
Total debt | 17,585,699 | |
Film Acquisition Advance | ||
Total debt | 27,837,565 | 6,196,909 |
MUFG Union Bank Film Financing Facility | ||
Total debt | 6,577,243 | |
9.50% Notes Due 2025 | ||
Total debt | 44,855,900 | $ 32,895,900 |
Film Acquisition Advance | ||
Other debt | 3,204,255 | |
Total debt, net | $ 6,100,000 |
Debt - Future principal payment
Debt - Future principal payments (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | ||
2023 | $ 18,798,514 | |
2024 | 16,976,734 | |
2025 | 128,980,029 | |
2026 | 82,022 | |
2027 and beyond | 335,342,705 | |
Total debt | $ 500,180,004 | $ 56,678,508 |
Debt - Narrative (Details)
Debt - Narrative (Details) | 12 Months Ended | ||||||||||||
Aug. 11, 2022 USD ($) | May 05, 2022 USD ($) $ / shares | May 21, 2021 USD ($) | Dec. 29, 2020 USD ($) $ / shares | Aug. 27, 2020 USD ($) | Jul. 17, 2020 USD ($) | Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) | Apr. 20, 2022 USD ($) | Apr. 15, 2022 USD ($) | Jan. 31, 2022 USD ($) | Dec. 22, 2020 USD ($) | Aug. 05, 2020 USD ($) | |
Outstanding debt | $ 500,180,004 | $ 56,678,508 | |||||||||||
Outstanding balance | $ 479,653,611 | $ 54,859,599 | |||||||||||
HPS Credit Agreement | |||||||||||||
Debt instrument interest payment term | 18 months | ||||||||||||
Outstanding debt | $ 417,700,000 | ||||||||||||
PIK interests | 11,900,000 | ||||||||||||
Line of credit | $ 357,500,000 | ||||||||||||
Revolving PIK Loan | HPS Credit Agreement | |||||||||||||
Outstanding debt | 2,400,000 | ||||||||||||
Revolving credit facility | HPS Credit Agreement | |||||||||||||
Unused line fee percentage | 0.03625% | ||||||||||||
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 | $ 80,000,000 | ||||||||||||
Debt instrument term | 30 months | ||||||||||||
Line of credit | $ 31,700,000 | ||||||||||||
Line of Credit Facility, 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 interest rate at period | 10.30% | ||||||||||||
Percentage of interest rate on additional borrowings | 10.85% | ||||||||||||
Revolving Loan. | |||||||||||||
Interest rate | 0.75% | ||||||||||||
Revolving Loan. | LIBOR | |||||||||||||
Interest rate | 4% | ||||||||||||
Revolving Loan. | Midcap Financial Trust, Credit Agreement | |||||||||||||
Original principal amount | $ 30,000,000 | ||||||||||||
Amount withdrawn | $ 18,272,931 | ||||||||||||
Percentage of loan available with respect to borrowing base | 85% | ||||||||||||
Unused line fee percentage | 0.50% | ||||||||||||
Collateral management fee percentage | 0.504% | ||||||||||||
Minimum cash liquidity | $ 6,000,000 | ||||||||||||
Standby Letters of Credit | HPS Credit Agreement | |||||||||||||
Percentage of cash collateral for letters of credit | 105% | ||||||||||||
Term of collateral pledged | 1 year | ||||||||||||
Average balance | $ 3,100,000 | ||||||||||||
Standby Letters of Credit | HPS Credit Agreement | Asset Pledged as Collateral | |||||||||||||
Contingently liable for letter of credit | 300,000 | ||||||||||||
Average balance | 3,400,000 | ||||||||||||
MUFG Union Bank Film Financing Facility | |||||||||||||
Additional borrowing capacity | 0 | ||||||||||||
Outstanding debt | 6,577,243 | ||||||||||||
Commitment fee on term loan | $ 0.0050 | ||||||||||||
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 | $ 6,600,000 | $ 6,600,000 | |||||||||||
Line of credit interest rate at period | 0.071% | ||||||||||||
MUFG Union Bank Film Financing Facility | Scenario One | |||||||||||||
Debt instrument term | 1 month | ||||||||||||
MUFG Union Bank Film Financing Facility | Scenario Two | |||||||||||||
Debt instrument term | 3 months | ||||||||||||
MUFG Union Bank Film Financing Facility | Scenario Three | |||||||||||||
Debt instrument term | 6 months | ||||||||||||
MUFG Union Bank Film Financing Facility | Base Rate | |||||||||||||
Margin on base rate | 0.01% | ||||||||||||
MUFG Union Bank Film Financing Facility | LIBOR | |||||||||||||
Margin on base rate | 0.005% | ||||||||||||
MUFG Union Bank Film Financing Facility | Fed Funds Effective Rate Overnight Index Swap Rate | |||||||||||||
Margin on base rate | 0.01% | ||||||||||||
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 | $ 21,000,000 | $ 10,400,000 | $ 1,100,000 | |||||||||
Interest rate | 9.50% | 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 | |||||||||||
Outstanding debt | $ 44,855,900 | $ 32,895,900 | |||||||||||
Stated principal per note | $ / shares | $ 25 | ||||||||||||
Discounted percentage | 2% | ||||||||||||
Offering price per note | $ / shares | $ 24.85 | ||||||||||||
9.50% Notes Due 2025 December Notes [Member] | |||||||||||||
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% | ||||||||||||
Long-term debt term | 2 years | ||||||||||||
Outstanding balance | $ 6,100,000 | ||||||||||||
Number of installments | item | 4 | ||||||||||||
Film Acquisition Advance | Media Entertainment Partners | |||||||||||||
Original principal amount | $ 26,900,000 | ||||||||||||
Interest rate | 0.12% | ||||||||||||
Long-term debt term | 30 months | ||||||||||||
Outstanding balance | $ 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 | $ 335,300,000 | ||||||||||||
Debt instrument term | 5 years | ||||||||||||
Line of credit | $ 325,800,000 | ||||||||||||
Class A Common Stock | |||||||||||||
Proceeds from issuance of Class A common stock | $ 3,630,467 | $ 95,310,813 |
Put Option Obligation (Details)
Put Option Obligation (Details) - CSS AVOD Inc. - USD ($) | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | May 21, 2021 | Mar. 31, 2023 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | ||||
Percentage of shares of common stock | 5% | 5% | ||
Cash consideration | $ 11,500,000 | $ 11,500,000 | ||
Notice period | 60 days | |||
Election period | 3 years | |||
Put Option | ||||
Business Acquisition [Line Items] | ||||
Open Option Contracts Written, at Fair Value | $ 11,494,247 | |||
Put Option | Parent | ||||
Business Acquisition [Line Items] | ||||
Open Option Contracts Written, at Fair Value | 11,400,000 | |||
Put Option | Noncontrolling Interests | ||||
Business Acquisition [Line Items] | ||||
Open Option Contracts Written, at Fair Value | $ 94,247 | |||
Subsequent Event | ||||
Business Acquisition [Line Items] | ||||
Percentage of shares of common stock | 100% | 100% | ||
Cash consideration | $ 11,500,000 | $ 11,500,000 |
Income Taxes - Current and Defe
Income Taxes - Current and Deferred Income Tax Provision (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Current provision: | ||
States | $ (343,361) | $ 66,000 |
Total current provision | (343,361) | 66,000 |
Deferred provision: | ||
Deferred income tax (benefit) provision | (36,957,881) | |
Total deferred (benefit) provision | (36,957,881) | |
Total income tax (benefit) provision | $ (37,301,242) | $ 66,000 |
Income Taxes - Income Tax Recon
Income Taxes - Income Tax Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate of 21% | 21% | 21% |
Increase (decrease) resulting from: | ||
Crackle amortization | 0.21% | |
State and local taxes | 4.40% | (0.46%) |
Valuation Allowance | 3.30% | |
Transaction Costs | 0.90% | |
Programming costs | 10.99% | |
Share-based compensation - long-term incentive plan | 1.41% | |
Film library | 8.32% | |
Allowance for doubtful accounts | 0.24% | |
Other | (1.00%) | 0.15% |
Actual tax provision | 26.80% | 0% |
Income Taxes - Deferred taxes (
Income Taxes - Deferred taxes (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred Tax Assets: | ||
Net operating loss carry-forwards | $ 36,323,046 | $ 14,503,000 |
Section 163(j) carryover | 6,325,013 | |
ROU liabilities | 4,582,241 | |
Compensatory accruals | 3,228,997 | |
ARO liabilities | 3,461,123 | |
Other liabilities | 3,800,018 | |
Property plant & equipment | 3,374,008 | |
Acquisition-related costs | 539,000 | |
Film library and other intangibles | 18,608,104 | 16,883,000 |
Other liabilities | 337,000 | |
Total deferred tax assets | 79,702,550 | 32,262,000 |
Valuation allowance | (25,291,302) | (31,412,000) |
Total deferred tax assets, net | 54,411,248 | 850,000 |
Deferred Tax Liabilities: | ||
Programming costs | (299,000) | |
ROU assets | (4,135,123) | |
Intangible assets | (51,706,018) | |
Indefinite lived intangibles | (2,195,876) | |
Goodwill | (987,618) | |
Other assets | (1,334,703) | (551,000) |
Total deferred tax liabilities | (60,359,338) | (850,000) |
Net deferred tax asset (liabilities) | $ (5,948,090) | $ 0 |
Income Taxes - Additional infor
Income Taxes - Additional information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Net operating losses | $ 145,000,000 | $ 10,800,000 |
Operating loss carryforwards with no expiration | $ 134,200,000 | |
Percentage of operating loss carryforwards offset on taxable income | 80 | |
Deferred tax asset valuation allowance | $ (6,100,000) | $ 11,500,000 |
Effective income tax rate | 26.80% | 0% |
Federal statutory rate of 21% | 21% | 21% |
Deferred tax liability | $ 60,359,338 | $ 850,000 |
Valuation allowance | $ 25,291,302 | $ 31,412,000 |
Redbox Entertainment Inc. | ||
Effective income tax rate | 26.80% | |
Federal statutory rate of 21% | 21% | |
Deferred tax liability | $ 42,700,000 | |
Valuation allowance | $ 27,400,000 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized Tax Benefits, Beginning Balance | $ 0 | |
Additions based on tax positions related to the current year | 86,192 | |
Additions for tax positions related to prior years | 36,976 | |
Unrecognized Tax Benefits, Ending Balance | 123,168 | |
Accrued interest and penalties | 0 | $ 0 |
Unrecognized tax benefits that would impact effective tax rate | $ 100,000 | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Related Party Transactions [Abstract] | ||
Due to affiliated companies | $ 3,778,936 | $ 489,959 |
Total due to/due from affiliated companies | $ 3,778,936 | $ 489,959 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Aug. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||
Percentage of revenue fees earned applied to limited revenue categories | 10% | ||
Quarterly management fees as a percent of net revenue | 5% | ||
Management And License Fees | $ 18,400,648 | $ 11,039,547 | |
Period prior to end of current term that notice must be received to terminate | 90 days | ||
Revenue from related parties | 6,100,000 | ||
CSS | |||
Related Party Transaction [Line Items] | |||
Percentage of voting interest by parent | 85% | ||
Percentage of revenue earned paid to related party | 10% | ||
Management Agreement | |||
Related Party Transaction [Line Items] | |||
Management fee expense | $ 9,200,000 | 5,500,000 | |
Agreement term | 5 years | ||
Agreement renewal term | 1 year | ||
CSS | |||
Related Party Transaction [Line Items] | |||
License and marketing support fee expense | $ 9,200,000 | 5,500,000 | |
CSS | License Agreement | |||
Related Party Transaction [Line Items] | |||
Quarterly license fee as a percent of net revenue | 4 | ||
Quarterly marketing fees as a percent of net revenue | 1% | ||
Minority Shareholders Of Subsidiary | |||
Related Party Transaction [Line Items] | |||
Revenue from related parties | $ 0 | ||
Accounts receivable outstanding | $ 4,800,000 | $ 6,400,000 | |
Class B Common Stock | CSS | |||
Related Party Transaction [Line Items] | |||
Noncontrolling interests percent | 100% | ||
Common Stock | CSS | |||
Related Party Transaction [Line Items] | |||
Noncontrolling interests percent | 36.70% |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Mar. 31, 2023 | May 21, 2021 | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Programming obligations | $ 55,883,788 | $ 1,641,250 | |||
Contingent consideration | 7,311,949 | 9,764,256 | |||
Content Acquisition, Licensing And Production [Member] | |||||
content obligation | 124,300,000 | 38,600,000 | |||
Library acquisition | 39,800,000 | 24,700,000 | |||
Programming obligations | 55,800,000 | 1,600,000 | |||
Other Commitment | 28,700,000 | $ 12,300,000 | |||
Contingent consideration | 7,300,000 | ||||
Sonar Entertainment Inc. | |||||
Cash consideration | $ 18,902,000 | ||||
CSS AVOD Inc. | |||||
Contingent consideration | 34,900,000 | ||||
Cash consideration | $ 11,500,000 | $ 11,500,000 | |||
Percentage of shares of common stock | 5% | 5% | |||
Commencement period | 18 months | ||||
CSS AVOD Inc. | Subsequent Event | |||||
Cash consideration | $ 11,500,000 | $ 11,500,000 | |||
Percentage of shares of common stock | 100% | 100% |
Commitments and Contingencies_2
Commitments and Contingencies - Future minimum payments (Details) - Acquisition of Content and Distribution Rights | Dec. 31, 2022 USD ($) |
Other Commitments [Line Items] | |
2023 | $ 88,311,297 |
2024 | 9,710,280 |
Minimum estimated content payments | $ 98,021,577 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) | 12 Months Ended | ||||||||||||
Aug. 11, 2022 shares | Jun. 30, 2022 shares | Jun. 29, 2022 shares | Mar. 04, 2022 shares | Mar. 03, 2022 USD ($) shares | Sep. 08, 2021 USD ($) shares | Jul. 07, 2021 USD ($) $ / shares shares | Jan. 20, 2021 USD ($) $ / shares shares | Jan. 13, 2021 shares | Dec. 31, 2022 USD ($) D Vote director $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Feb. 26, 2022 USD ($) | Feb. 25, 2022 USD ($) | |
Number of shares authorized | 200,000,000 | 100,000,000 | |||||||||||
Preferred Stock, Shares Authorized | 40,000,000 | ||||||||||||
Stock Repurchase Program, Authorized Amount | $ | $ 3,474,299 | $ 30,000,000 | $ 10,000,000 | ||||||||||
Market price per share | $ / shares | $ 9.52 | $ 16.13 | |||||||||||
Stock Repurchased During Period, Value | $ | $ 30,000,000 | ||||||||||||
Elimination of noncontrolling interests | $ | 2,199,992 | $ 6,000,000 | |||||||||||
Purchase | $ | $ 749,992 | $ 6,000,000 | |||||||||||
Class of Warrant or Right, Outstanding | 6,027,719 | 4,649,471 | |||||||||||
Weighted Average Exercise Price | $ / shares | $ 30.54 | ||||||||||||
Exchange ratio | 0.087 | ||||||||||||
Landmark Studios Group | |||||||||||||
Elimination of noncontrolling interests | $ | $ 2,200,000 | ||||||||||||
Sale of stock consideration payable | $ | $ 1,450,000 | ||||||||||||
Term of sale of stock consideration payable | 2 years | ||||||||||||
Crackle Plus Entity | |||||||||||||
Common ownership percent | 100% | 49% | |||||||||||
Redbox Entertainment Inc. | |||||||||||||
Exchange ratio | 0.087 | ||||||||||||
Private Placement [Member] | |||||||||||||
Market price per share | $ / shares | $ 22 | ||||||||||||
Shares issued | 1,022,727 | ||||||||||||
Proceeds from Issuance of Common Stock | $ | $ 21,374,994 | ||||||||||||
At The Market Offering [Member] | |||||||||||||
Proceeds from sale of stock | $ | $ 3,702,926,000,000 | $ 3,435,819,000,000 | |||||||||||
Dividend percentage (as a percent) | 9.75% | ||||||||||||
Public offerings [Member] | |||||||||||||
Shares issued | 1,875,000 | ||||||||||||
Common stock at a price | $ / shares | $ 40 | ||||||||||||
Gross proceeds | $ | $ 70,500,000 | ||||||||||||
Common Units [Member] | |||||||||||||
Shares issued | 25,000 | ||||||||||||
Purchase | $ | $ 6,000,000 | ||||||||||||
HPS | |||||||||||||
Term of warrants | 5 years | ||||||||||||
Number of securities called by warrants or rights | 1,011,530 | ||||||||||||
Weighted Average Exercise Price | $ / shares | $ 0.0001 | ||||||||||||
Redbox warrants | |||||||||||||
Warrant price | $ / shares | $ 2.52 | ||||||||||||
Warrants and rights outstanding | $ | $ 3,473,184 | ||||||||||||
Fair market value of warrants per warrant | $ | 0.02 | ||||||||||||
Fair market value of warrants | $ | 25,222 | ||||||||||||
Fair value adjustment of warrants | $ | $ 3,447,963 | ||||||||||||
Warrants Classified as Liabilities, Warrants Assumed | 15,841,930 | ||||||||||||
Warrants Classified as Liabilities, Price Per Share Prior To Assumptions | $ / shares | $ 11.50 | ||||||||||||
Warrants Classified as Liabilities, Warrant Conversion Into Share Ratio | 11.494 | ||||||||||||
Warrants Classified as Liabilities, Exchange Ratio | 0.087 | ||||||||||||
Redbox Public (CSSEL) | |||||||||||||
Class of Warrant or Right, Outstanding | 1,039,183 | ||||||||||||
Weighted Average Exercise Price | $ / shares | $ 132.18 | ||||||||||||
Warrant redemption price per share | $ / shares | $ 0.01 | ||||||||||||
Warrant redemption term | 30 days | ||||||||||||
Warrants Classified as Liabilities, Aggregate Exercise Price | $ / shares | $ 132.18 | ||||||||||||
Class A Common Stock | |||||||||||||
Common Stock, Shares Authorized | 140,000,000 | 140,000,000 | 140,000,000 | ||||||||||
Proceeds from Issuance of Common Stock | $ | $ 3,630,467 | $ 95,310,813 | |||||||||||
Common stock voting rights | one | ||||||||||||
Number of votes per share | Vote | 1 | ||||||||||||
Preferred stock number of votes | Vote | 0 | ||||||||||||
Number of members that may be added to the board of directors if preferred dividends in arrears for extended period | director | 2 | ||||||||||||
Period of consecutive or non-consecutive periods the dividends payable in arrears will allow for the addition of members to the board of directors by the holders of the Series A Preferred stock | 18 months | ||||||||||||
Class A Common Stock | Landmark Studios Group | |||||||||||||
Acquisition of subsidiary noncontrolling interest (in shares) | 84,000 | ||||||||||||
Class A Common Stock | Redbox Entertainment Inc. | |||||||||||||
Number of shares issued in business acquisition | 4,662,195 | ||||||||||||
Class A Common Stock | 1091 Media, LLC | |||||||||||||
Number of shares issued in business acquisition | 375,000 | ||||||||||||
Class A Common Stock | At The Market Offering [Member] | |||||||||||||
Shares issued | 376,163 | 126,000 | |||||||||||
Class A Common Stock | Redbox Public (CSSEL) | |||||||||||||
Common stock at a price | $ / shares | $ 206.90 | ||||||||||||
Number of trading days | D | 20 | ||||||||||||
Number of trading days prior to notice of redemption | D | 30 | ||||||||||||
Class B Common Stock | |||||||||||||
Common Stock, Shares Authorized | 20,000,000 | 20,000,000 | 20,000,000 | ||||||||||
Number of votes per share | Vote | 10 | ||||||||||||
Preferred Stock | 1091 Media, LLC | |||||||||||||
Number of shares issued in business acquisition | 80,000 | ||||||||||||
Preferred Stock | At The Market Offering [Member] | |||||||||||||
Shares issued | 718,027 | ||||||||||||
Proceeds from sale of stock | $ | $ 16,699,901 | ||||||||||||
Series A Preferred Stock | |||||||||||||
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||||
Shares issued | 1,600,000 | ||||||||||||
Landmark Studios Group | |||||||||||||
Noncontrolling interests percent | 100% | ||||||||||||
Stock Repurchase Program | Class A Common Stock | |||||||||||||
Stock Repurchased During Period, Shares | 1,410,036 | 870,267 | |||||||||||
Market price per share | $ / shares | $ 9.90 | $ 14.44 |
Stockholders' Equity - Warrants
Stockholders' Equity - Warrants (Details) | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | 4,649,471 |
Class of Warrant or Right, Issued | 2,389,778 |
Class of Warrant or Right, Exercised | (1,011,530) |
Class of Warrant or Right, Outstanding | 6,027,719 |
Weighted Average Exercise Price | $ / shares | $ 30.54 |
Class of Warrant or Right, Weighted Average Remaining Contact Term | 1 year 10 months 6 days |
Class W | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | 526,362 |
Class of Warrant or Right, Outstanding | 526,362 |
Weighted Average Exercise Price | $ / shares | $ 7.50 |
Class of Warrant or Right, Weighted Average Remaining Contact Term | 9 months |
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 9 months |
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 | 1 year 7 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 | 1 year 7 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 | 1 year 7 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 | 1 year 7 months 13 days |
HPS | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Issued | 1,011,530 |
Class of Warrant or Right, Exercised | (1,011,530) |
Weighted Average Exercise Price | $ / shares | $ 0.0001 |
Redbox Public (CSSEL) | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Issued | 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 | 4 years 25 days |
Redbox Private | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Issued | 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 | 4 years 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 and Geographic Inform_2
Segment and Geographic Information (Details) - segment | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of reportable segments | 1 | |
Sales Revenue, Net [Member] | UNITED STATES | Customer Concentration Risk [Member] | ||
Concentration risk percentage | 95% | 78% |
Client Concentration (Details)
Client Concentration (Details) - Customer Concentration Risk [Member] | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Customer A [Member] | Accounts Receivable [Member] | ||
Concentration Risk, Percentage | 14% | |
Customer A [Member] | Sales Revenue, Net [Member] | ||
Concentration Risk, Percentage | 16% | |
Customer B [Member] | Accounts Receivable [Member] | ||
Concentration Risk, Percentage | 12% | 27% |
Subsequent Events (Details)
Subsequent Events (Details) | 1 Months Ended | 12 Months Ended | ||||||||||
Apr. 02, 2023 USD ($) | Mar. 31, 2023 USD ($) $ / shares shares | Mar. 30, 2023 USD ($) D $ / shares | Mar. 12, 2023 USD ($) item D $ / shares shares | May 21, 2021 USD ($) | Jan. 13, 2021 shares | Mar. 31, 2023 USD ($) $ / shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Mar. 01, 2023 shares | Feb. 28, 2023 shares | Jun. 30, 2022 shares | |
Subsequent Events | ||||||||||||
Preferred stock, shares authorized | shares | 40,000,000 | |||||||||||
Share price | $ / shares | $ 9.52 | $ 16.13 | ||||||||||
CSS AVOD Inc. | ||||||||||||
Subsequent Events | ||||||||||||
Cash consideration | $ 11,500,000 | $ 11,500,000 | ||||||||||
Percentage of shares of common stock | 5% | 5% | ||||||||||
Series A preferred stock | ||||||||||||
Subsequent Events | ||||||||||||
Preferred stock, shares authorized | shares | 10,000,000 | 10,000,000 | 10,000,000 | |||||||||
Shares issued | shares | 1,600,000 | |||||||||||
Class A common stock | ||||||||||||
Subsequent Events | ||||||||||||
Common Stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||||
Proceeds from issuance of Class A common stock | $ 3,630,467 | $ 95,310,813 | ||||||||||
Subsequent events | CSS management agreement and CSS license agreement | ||||||||||||
Subsequent Events | ||||||||||||
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 | |||||||||||
Number of trading days | D | 5 | |||||||||||
Number of trading days immediately following the filing of annual report | D | 5 | |||||||||||
Investments by CSS | $ 3,800,000 | |||||||||||
Amount of increase (decrease) in working capital | $ 20,000,000 | |||||||||||
Subsequent events | CSS AVOD Inc. | ||||||||||||
Subsequent Events | ||||||||||||
Cash consideration | $ 11,500,000 | $ 11,500,000 | ||||||||||
Percentage of shares of common stock | 100% | 100% | ||||||||||
Subsequent events | Maximum | CSS management agreement and CSS license agreement | ||||||||||||
Subsequent Events | ||||||||||||
Share price | $ / shares | $ 3.05 | |||||||||||
Subsequent events | Lincoln Park purchase agreement | ||||||||||||
Subsequent Events | ||||||||||||
Term of shares offering | 36 months | |||||||||||
Subsequent events | Lincoln Park purchase agreement | Regular purchase | ||||||||||||
Subsequent Events | ||||||||||||
Threshold business days | D | 10 | |||||||||||
Subsequent events | Lincoln Park purchase agreement | Maximum | ||||||||||||
Subsequent Events | ||||||||||||
Aggregate value of shares to be issued | $ 50,000,000 | |||||||||||
Subsequent events | Lincoln Park purchase agreement | Maximum | Regular purchase | ||||||||||||
Subsequent Events | ||||||||||||
Value of shares to be issued | $ 1,000,000 | |||||||||||
Subsequent events | Lincoln Park purchase agreement | Maximum | Accelerated purchase | ||||||||||||
Subsequent Events | ||||||||||||
Shares multiplier | 3 | |||||||||||
Shares to be issued (as a percent) | 30% | |||||||||||
Share issue price (as percent) | 97% | |||||||||||
Subsequent events | Offering of class A common stock | ||||||||||||
Subsequent Events | ||||||||||||
Shares issued | shares | 4,688,015 | |||||||||||
Proceeds from issuance of Class A common stock | $ 10,400,000 | |||||||||||
Share price | $ / shares | $ 2.30 | $ 2.30 | ||||||||||
Subsequent events | Offering of class A common stock | CSS management agreement and CSS license agreement | ||||||||||||
Subsequent Events | ||||||||||||
Investments by CSS | $ 3,800,000 | $ 3,800,000 | ||||||||||
Subsequent events | Series A preferred stock | ||||||||||||
Subsequent Events | ||||||||||||
Preferred stock, shares authorized | shares | 6,000,000 | 5,000,000 | ||||||||||
Subsequent events | Class A common stock | ||||||||||||
Subsequent Events | ||||||||||||
Shares issued | shares | 375,000 | |||||||||||
Common stock at a price | $ / shares | $ 4 | |||||||||||
Proceeds from issuance of Class A common stock | $ 1,500,000 | |||||||||||
Subsequent events | Class A common stock | Lincoln Park purchase agreement | ||||||||||||
Subsequent Events | ||||||||||||
Common Stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||||||||||
Exchange cap (as percent) | 19.99% | |||||||||||
Notice period | 1 day | |||||||||||
Shares issued for payment of initial fee | shares | 125,000 | |||||||||||
Subsequent events | Class A common stock | Lincoln Park purchase agreement | Regular purchase | ||||||||||||
Subsequent Events | ||||||||||||
Number of sale prices considered for average share price calculation | item | 3 | |||||||||||
Subsequent events | Class A common stock | Lincoln Park purchase agreement | Minimum | ||||||||||||
Subsequent Events | ||||||||||||
Share price | $ / shares | $ 3.47 | |||||||||||
Subsequent events | Class A common stock | Lincoln Park purchase agreement | Maximum | ||||||||||||
Subsequent Events | ||||||||||||
Aggregate shares to be issued | shares | 2,712,094 | |||||||||||
Additional shares issued for payment of initial fee | shares | 125,000 | |||||||||||
Subsequent events | Class A common stock | Lincoln Park purchase agreement | Maximum | Regular purchase | ||||||||||||
Subsequent Events | ||||||||||||
Number of shares to be issued | shares | 20,000 |