| DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS CuriosityStream Inc., formerly known as
Software Acquisition Group Inc. (the "Company"), was a blank check company incorporated in Delaware on May 9, 2019.
The Company was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization
or other similar business combination with one or more businesses. Business Combination On October 14, 2020 (the "Closing
Date"), the Company consummated the previously announced merger pursuant to the Agreement and Plan of Merger (the "Merger
Agreement"), dated August 10, 2020, by and among the Company, CS Merger Sub, Inc., a Delaware corporation and a wholly-owned
subsidiary of the Company ("Merger Sub"), CuriosityStream Operating Inc., a Delaware corporation (formerly named CuriosityStream
Inc.) ("Legacy CuriosityStream") and Hendricks Factual Media LLC, a Delaware limited liability company ("HFM"). Pursuant to the terms of the Merger Agreement,
a business combination between the Company and Legacy CuriosityStream was effected through the merger of Merger Sub with and into
Legacy CuriosityStream, with Legacy CuriosityStream surviving such merger as a wholly-owned subsidiary of the Company (the "Merger"
and, the completion of the Merger, the "Closing"). At the effective time of the Merger (the "Effective Time"),
all (100%) of the issued and outstanding shares of capital stock of Legacy CuriosityStream were converted into an aggregate of
31,556,837 shares (the "Merger Shares") of the Company's Class A Common Stock, par value $0.0001 per share ("Common
Stock"). Pursuant to the Merger Agreement, 1,501,758 Merger Shares issued by the Company at closing will be held in escrow
for a period of twelve (12) months after the Closing to satisfy indemnification obligations and an additional 19,924 Merger Shares
will be held in escrow pending final working capital calculations (collectively, the "Escrow Shares"). In connection with the Closing, and pursuant
to the terms of a PIPE Subscription Agreement entered into by the Company with certain third-party investors (the "PIPE
Investors") in connection with the execution of the Merger Agreement, the Company completed the issuance of an aggregate
of 2,500,000 newly-issued shares of Common Stock for an aggregate purchase price of $25,000,000 (the "PIPE"). The
shares of Common Stock issued by the Company pursuant to the PIPE were issued concurrently with the Closing of the Merger on the
Closing Date. Also in connection with the Closing, the
Company changed its name from "Software Acquisition Group Inc." to "CuriosityStream Inc." In
connection with the Closing, the Company withdrew $125,975,252 of Funds from the Trust Account (as defined below) to fund the
redemptions of 12,549,512 shares. Upon the closing:
● Merger
Sub merged with and into Legacy CuriosityStream, with Legacy CuriosityStream surviving
as a wholly-owned subsidiary of the Company;
● each
share of common stock of Merger Sub issued and outstanding immediately prior to the Effective
Time was converted into and exchanged for one validly issued, fully paid and nonassessable
share of Common Stock, par value $0.01 per share, of Legacy CuriosityStream to be held
by the Company;
● all
issued and outstanding shares of Legacy CuriosityStream capital stock converted into
an aggregate of 31,556,837 shares of Common Stock (inclusive of the Escrow Shares);
● all
shares of Legacy CuriosityStream capital stock held in treasury were canceled without
any conversion thereof;
● all
of the 3,737,500 outstanding shares of the Company's Class B Common Stock, par
value $0.0001 per share, held by the Software Acquisition Holdings, LLC (the "Sponsor"),
converted into an aggregate of 3,737,500 shares of Common Stock, 2,242,500 of which are
subject to certain vesting conditions;
● of
the 4,740,000 Private Placement Warrants held by the Sponsor immediately prior to the
Effective Time, (i) 711,000 were forfeited by the Sponsor and (ii) an aggregate of 353,000
were forfeited by the Sponsor and reissued by the Company to certain PIPE Investors and
holders of Common Stock existing prior to the Effective Time;
● all
of the remaining outstanding Company Units were converted, pursuant to their terms, into
one share of Common Stock and one-half (1/2) of one warrant; and
● all
of the outstanding options to acquire Legacy CuriosityStream common stock were converted
into options to acquire an aggregate of 2,214,246 shares of Common Stock;
● the
Company issued an aggregate of 2,500,000 shares of Common Stock to the PIPE Investors
pursuant to the closing of the PIPE. As a result of the foregoing Transactions,
as of the Closing Date and immediately following the completion of the Merger and the PIPE, the Company had the following outstanding
securities:
● 37,952,325
shares of Common Stock (inclusive of the Escrow Shares);
● options
to acquire an aggregate of 2,214,246 shares of Common Stock; and
● 7,475,000
public warrants and 4,029,000 Private Placement Warrants, each exercisable for one share
of Common Stock at a price of $11.50 per share. Business Prior to the Business Combination Prior to the Business Combination, the
Company's subsidiary was comprised of CS Merger Sub, Inc. All activity through September 30, 2020
relates to the Company's formation, the initial public offering (the "Initial Public Offering"), which is described
below, identifying a target company for a Business Combination and consummating the acquisition of Legacy CuriosityStream. The registration statements for the Company's
Initial Public Offering were declared effective on November 19, 2019. On November 22, 2019, the Company consummated the Initial
Public Offering of 14,950,000 units (the "Units" and, with respect to the shares of Class A common stock included
in the Units sold, the "Public Shares"), which includes the full exercise by the underwriter of the over-allotment
option to purchase an additional 1,950,000 Units, at $10.00 per Unit, generating gross proceeds of $149,500,000, which is described
in Note 3. Simultaneously with the closing of the
Initial Public Offering, the Company consummated the sale of 4,740,000 warrants (the "Private Placement Warrants")
at a price of $1.00 per Private Placement Warrant in a private placement to the "Sponsor, generating gross proceeds of $4,740,000,
which is described in Note 4. Following the closing of the Initial Public
Offering on November 22, 2019, an amount of $149,500,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the
Initial Public Offering, and the sale of the Private Warrants was placed in a trust account (the "Trust Account")
and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with
a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund meeting the
conditions of Rule 2a-7 of the Investment Company Act of 1940, as amended (the "Investment Company Act"), as determined
by the Company, until the earlier of: (i) the consummation of a Business Combination or (ii) the distribution of the funds in
the Trust Account to the Company's stockholders, as described below. Transaction costs amounted to $8,745,223
consisting of $2,990,000 of underwriting fees, $5,232,500 of deferred underwriting fees and $522,723 of other offering costs. |
