Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2021 | |
Document and Entity Information | |
Document Type | S-1 |
Entity Registrant Name | Redbox Entertainment Inc. |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Central Index Key | 0001820201 |
Amendment Flag | false |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS | Sep. 30, 2021USD ($) |
Current Assets: | |
Total current assets | $ 67,252,000 |
Other assets | 723,000 |
Total Assets | 402,772,000 |
Current liabilities: | |
Due to related party | 357,000 |
Total current liabilities | 91,580,000 |
Total Liabilities | 477,611,000 |
Commitments and contingencies | |
Stockholders' Equity (Deficit) | |
Common stock | 3,000 |
Additional paid-in capital | 239,722,000 |
Accumulated deficit | (314,564,000) |
Total Stockholders' Equity (Deficit) | (74,839,000) |
Total Liabilities and Stockholders' Equity (Deficit) | 402,772,000 |
Seaport Global Acquisition Corp | |
Current Assets: | |
Cash | 61,743 |
Prepaid Expenses | 177,159 |
Total current assets | 238,902 |
Investments held in Trust Account | 145,218,069 |
Other assets | 3,116 |
Total Assets | 145,460,087 |
Current liabilities: | |
Accrued expenses | 530,044 |
Total current liabilities | 530,044 |
Warrant liability | 16,467,107 |
Deferred underwriting fee payable | 5,031,250 |
Total Liabilities | 22,028,401 |
Commitments and contingencies | |
Class A common stock subject to possible redemption,14,375,000 shares at redemption value at September 30, 2021 and December 31, 2020, respectively | 145,218,069 |
Stockholders' Equity (Deficit) | |
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding | 0 |
Accumulated deficit | (21,786,742) |
Total Stockholders' Equity (Deficit) | (21,786,383) |
Total Liabilities and Stockholders' Equity (Deficit) | 145,460,087 |
Class A Common Stock | Seaport Global Acquisition Corp | |
Stockholders' Equity (Deficit) | |
Common stock | 0 |
Class B Common Stock | Seaport Global Acquisition Corp | |
Stockholders' Equity (Deficit) | |
Common stock | 359 |
Total Stockholders' Equity (Deficit) | $ 359 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 60,000,000 | 60,000,000 | 60,000,000 |
Common stock, shares issued | 31,274,065 | 27,962,554 | 27,962,554 |
Common stock, shares outstanding | 31,274,065 | 27,962,554 | 27,962,554 |
Seaport Global Acquisition Corp | |||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | |
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
Class A Common Stock | Seaport Global Acquisition Corp | |||
Shares subject to possible redemption | 14,375,000 | 14,375,000 | |
Common stock, par value | $ 0.0001 | $ 0.0001 | |
Common stock, shares authorized | 100,000,000 | 100,000,000 | |
Common stock, shares issued | 0 | 0 | |
Common stock, shares outstanding | 0 | 0 | |
Class A Common Stock Subject to Redemption | Seaport Global Acquisition Corp | |||
Shares subject to possible redemption | 14,375,000 | 14,375,000 | |
Class B Common Stock | Seaport Global Acquisition Corp | |||
Common stock, par value | $ 0.0001 | $ 0.0001 | |
Common stock, shares authorized | 10,000,000 | 10,000,000 | |
Common stock, shares issued | 3,593,750 | 3,593,750 | |
Common stock, shares outstanding | 3,593,750 | 3,593,750 |
CONDENSED STATEMENT OF OPERATIO
CONDENSED STATEMENT OF OPERATIONS - USD ($) | Dec. 02, 2020 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Loss from operations | $ (99,154,000) | $ (27,764,000) | $ (62,185,000) | $ 29,755,000 | $ 126,063,000 | |||||
Other income (expense): | ||||||||||
Total other income (expense) | (32,522,000) | (44,578,000) | (45,155,000) | |||||||
Net income (loss) | $ (92,938,000) | $ (39,135,000) | $ (69,503,000) | $ (7,567,000) | $ 61,453,000 | |||||
Weighted Average Number of Shares Outstanding, Diluted | 30,839,870 | 27,870,539 | 27,906,742 | 27,779,339 | 28,197,409 | |||||
Basic weighted average shares outstanding | 30,839,870 | 27,870,539 | 27,906,742 | 27,779,339 | 27,623,415 | |||||
Earnings Per Share, Basic | $ (3.01) | $ (1.40) | $ (2.49) | $ (0.27) | $ 2.22 | |||||
Earnings Per Share, Diluted | $ (3.01) | $ (1.40) | $ (2.49) | $ (0.27) | $ 2.18 | |||||
Seaport Global Acquisition Corp | ||||||||||
Operating and formation costs | $ 500,559 | $ 191,371 | $ 1,416,280 | |||||||
Loss from operations | (500,559) | (191,371) | (1,416,280) | |||||||
Other income (expense): | ||||||||||
Interest earned on investments held in Trust Account | 1,869 | 6,702 | 23,867 | |||||||
Change in fair value of warrant liability | $ (8,400,000) | (1,344,965) | 5,441,188 | 855,644 | ||||||
Total other income (expense) | (1,343,096) | (2,288,801) | 879,511 | |||||||
Net income (loss) | (1,843,655) | $ (3,821,824) | $ 5,128,710 | 2,097,430 | (536,769) | |||||
Class A Common Stock | Seaport Global Acquisition Corp | ||||||||||
Other income (expense): | ||||||||||
Net income (loss) | $ (1,843,655) | $ 2,097,430 | $ (536,769) | |||||||
Weighted Average Number of Shares Outstanding, Diluted | 14,375,000 | 2,605,469 | 14,375,000 | |||||||
Basic weighted average shares outstanding | 14,375,000 | 2,605,469 | 14,375,000 | |||||||
Earnings Per Share, Basic | $ (0.10) | $ 0.34 | $ (0.03) | |||||||
Earnings Per Share, Diluted | $ (0.10) | $ 0.34 | $ (0.03) | |||||||
Class A common stock subject to possible redemption | Seaport Global Acquisition Corp | ||||||||||
Other income (expense): | ||||||||||
Weighted Average Number of Shares Outstanding, Diluted | 14,375,000 | 14,375,000 | ||||||||
Basic weighted average shares outstanding | 14,375,000 | 14,375,000 | ||||||||
Earnings Per Share, Basic | $ (0.10) | $ (0.03) | ||||||||
Earnings Per Share, Diluted | $ (0.01) | $ (0.03) | ||||||||
Class B non-redeemable common stock | Seaport Global Acquisition Corp | ||||||||||
Other income (expense): | ||||||||||
Weighted Average Number of Shares Outstanding, Diluted | 3,593,750 | 3,593,750 | 3,593,750 | |||||||
Basic weighted average shares outstanding | 3,593,750 | 3,593,750 | 3,593,750 | |||||||
Earnings Per Share, Basic | $ (0.10) | $ 0.34 | $ (0.03) | |||||||
Earnings Per Share, Diluted | $ (0.01) | $ 0.34 | $ (0.03) |
CONDENSED STATEMENT OF CHANGES
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) | Class A Common StockSeaport Global Acquisition Corp | Class A Common Stock Subject to RedemptionSeaport Global Acquisition Corp | Class A Common Stock Not Subject to RedemptionSeaport Global Acquisition Corp | Class B Common StockSeaport Global Acquisition Corp | Additional Paid-in CapitalSeaport Global Acquisition Corp | Additional Paid-in Capital | Accumulated Income (Deficit)Seaport Global Acquisition Corp | Accumulated Income (Deficit) | Common Stock [Member] | Seaport Global Acquisition Corp | Total |
Balance at the beginning at Dec. 31, 2017 | $ 222,831,000 | $ (88,407,000) | $ 134,427,000 | ||||||||
Balance at the beginning (in shares) at Dec. 31, 2017 | 3 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) | 61,453,000 | 61,453,000 | |||||||||
Balance at the end at Dec. 31, 2018 | 222,928,000 | (144,312,000) | 78,619,000 | ||||||||
Balance at the end (in shares) at Dec. 31, 2018 | 3 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) | (7,567,000) | (7,567,000) | |||||||||
Balance at the end at Dec. 31, 2019 | 223,084,000 | (152,176,000) | $ 3,000 | 70,911,000 | |||||||
Balance at the end (in shares) at Dec. 31, 2019 | 3 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) | (39,135,000) | (39,135,000) | |||||||||
Balance at the end at Sep. 30, 2020 | 223,062,000 | (191,258,000) | $ 3,000 | 31,807,000 | |||||||
Balance at the beginning at Dec. 31, 2019 | 223,084,000 | (152,176,000) | $ 3,000 | 70,911,000 | |||||||
Balance at the beginning (in shares) at Dec. 31, 2019 | 3 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) | (69,503,000) | (69,503,000) | |||||||||
Balance at the end at Dec. 31, 2020 | $ (21,225,746) | $ 359 | 223,085,000 | $ (21,226,105) | (221,626,000) | $ 3,000 | $ (21,225,746) | 1,462,000 | |||
Balance at the end (in shares) at Dec. 31, 2020 | 3,593,750 | 3 | |||||||||
Balance at the beginning at Jul. 23, 2020 | $ 0 | $ 0 | $ 0 | 0 | 0 | ||||||
Balance at the beginning (in shares) at Jul. 23, 2020 | 0 | 0 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) | $ 2,097,430 | 2,097,430 | $ 2,097,430 | $ 2,097,430 | 2,097,430 | 2,097,430 | |||||
Balance at the end at Dec. 31, 2020 | (21,225,746) | $ 359 | 223,085,000 | (21,226,105) | (221,626,000) | $ 3,000 | (21,225,746) | 1,462,000 | |||
Balance at the end (in shares) at Dec. 31, 2020 | 3,593,750 | 3 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) | 5,128,710 | 5,128,710 | |||||||||
Change in value of Class A common stock subject to possible redemption | 17,259 | 17,259 | |||||||||
Balance at the end at Mar. 31, 2021 | $ 359 | (16,114,654) | (16,114,295) | ||||||||
Balance at the end (in shares) at Mar. 31, 2021 | 3,593,750 | ||||||||||
Balance at the beginning at Dec. 31, 2020 | $ (21,225,746) | $ 359 | 223,085,000 | (21,226,105) | (221,626,000) | $ 3,000 | (21,225,746) | 1,462,000 | |||
Balance at the beginning (in shares) at Dec. 31, 2020 | 3,593,750 | 3 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) | (536,769) | $ (536,769) | (92,938,000) | (536,769) | (92,938,000) | ||||||
Balance at the end at Sep. 30, 2021 | $ 359 | 239,722,000 | (21,786,742) | (314,564,000) | $ 3,000 | (21,786,383) | (74,839,000) | ||||
Balance at the end (in shares) at Sep. 30, 2021 | 3,593,750 | ||||||||||
Balance at the beginning at Mar. 31, 2021 | $ 359 | (16,114,654) | (16,114,295) | ||||||||
Balance at the beginning (in shares) at Mar. 31, 2021 | 3,593,750 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) | (3,821,824) | (3,821,824) | |||||||||
Change in value of Class A common stock subject to possible redemption | (4,740) | (4,740) | |||||||||
Balance at the end at Jun. 30, 2021 | $ 359 | (19,941,218) | (19,940,859) | ||||||||
Balance at the end (in shares) at Jun. 30, 2021 | 3,593,750 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) | $ (1,843,655) | $ (1,843,655) | (1,843,655) | (1,843,655) | |||||||
Change in value of Class A common stock subject to possible redemption | (1,869) | (1,869) | |||||||||
Balance at the end at Sep. 30, 2021 | $ 359 | $ 239,722,000 | $ (21,786,742) | $ (314,564,000) | $ 3,000 | $ (21,786,383) | $ (74,839,000) | ||||
Balance at the end (in shares) at Sep. 30, 2021 | 3,593,750 |
CONDENSED STATEMENT OF CASH FLO
CONDENSED STATEMENT OF CASH FLOWS | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Changes in operating assets and liabilities: | |
Prepaid assets | $ (2,497,000) |
Net cash flows (used in) provided by operating activities | (10,781,000) |
Net Change in Cash | 4,231,000 |
Cash - Beginning of period | 8,927,000 |
Cash - End of period | 13,158,000 |
Seaport Global Acquisition Corp | |
Cash flows from operating activities: | |
Net income (loss) | (536,769) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |
Interest earned on marketable securities held in Trust Account | (23,867) |
Change in fair value of warrant liability | (855,644) |
Changes in operating assets and liabilities: | |
Prepaid assets | 131,356 |
Other assets | (3,116) |
Accrued expenses | 411,199 |
Due to related party | 10,000 |
Net cash flows (used in) provided by operating activities | 886,841 |
Net Change in Cash | (886,841) |
Cash - Beginning of period | 948,584 |
Cash - End of period | 61,743 |
Non-cash financing activities: | |
Change in value of Class A common stock subject to possible redemption | $ (23,867) |
Organization and Business Opera
Organization and Business Operations | 5 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | |
Organization and Business Operations | Note 1: Description of Business Redwood Intermediate, LLC, a Delaware limited liability company, and subsidiaries (“Redbox” or the “Company”), operates self-serve kiosks in the United States where consumers can rent or purchase movies. As of September 30, 2021, the Company operated a network of approximately 40,000 self-service kiosks, in approximately 33,000 locations primarily at leading grocery stores, mass retailers, drug stores, dollar retailers, and convenience stores in every U.S. state and Puerto Rico (collectively the United States). Redbox is an established brand and leading provider in the home entertainment market in the United States. The Company is focused on providing its customers with the best value in entertainment and the most choice in how they consume it, through physical media and/or digital services. Redbox is undergoing a significant business expansion and digital transformation. The Company has transitioned from a pure-play DVD rental company to a multi- faceted entertainment company that provides tremendous value and choice by offering DVD rentals as well as multiple digital products across a variety of content windows including transactional (TVOD), ad-supported (AVOD), subscription (SVOD), and being a distributor of feature films with a growing library of original content. Redbox currently conducts its business through two operating segments: (1) Legacy Business and (2) Digital Business. For the Legacy Business, the Company operates a nationwide network of approximately 40,000 self-service kiosks where consumers can rent or purchase new-release DVDs and Blu-ray Discs TM (“movies”). The Company also generates service revenue by providing installation, merchandising and break-fix services to other kiosk businesses. Finally, the Company also produces, acquires, and distributes movies exclusively through its film distribution label, Redbox Entertainment, LLC, providing rights to talent-led films that are distributed across Redbox services as well as through third party digital services. For its Digital Business, the Company provides both transactional and ad-supported digital streaming services, which include 1) Redbox On Demand, a transactional service which provides digital rental or purchase of new release and catalog movies and TV content, 2) Redbox Free On Demand, an ad-supported service providing free movies and TV shows on demand, and 3) Redbox Free Live TV, a free, ad-supported television service giving access to over 100 linear channels. The Company is an indirect, wholly owned subsidiary of New Outerwall, Inc. (“New Outerwall”), a Delaware corporation, which is a direct, wholly owned subsidiary of Aspen Parent, Inc. (“Aspen”), a Delaware corporation. On September 27, 2016, Outerwall, Inc. (“Old Outerwall”) was acquired by an entity controlled by funds affiliated with or controlled by Apollo Global Management, LLC and its subsidiaries (“Apollo” or the “Sponsor”) (the “Apollo Acquisition”). In addition to its interest in Redbox, New Outerwall has interest in one other business under the brand name of Coinstar. On May 16, 2021, the Company became a party to a Business Combination Agreement with Seaport Global Acquisition Corp. (a publicly traded special purpose acquisition company ("Seaport")). The Business Combination closed on October 22, 2021. The Business Combination is accounted for as a reverse recapitalization in accordance with US GAAP. Under the guidance in ASC 805, Business Combinations For an update on the Business Combination Agreement with Seaport, see Note 14: Subsequent Events. | Note 1: Description of Business Redwood Intermediate, LLC, a Delaware limited liability company, and subsidiaries (“Redbox” or the “Company”), operates self-serve kiosks in the United States where consumers can rent or purchase movies. As of December 31, 2020, the Company operated a network of over 40,000 self-service kiosks, in approximately 34,000 locations primarily at leading grocery stores, mass retailers, drug stores, dollar retailers, and convenience stores in every U.S. state and Puerto Rico (collectively the United States). Redbox is an established brand and leading provider in the home video rental market in the United States. The Company is focused on providing its customers with the best value in entertainment and the most choice in how they consume it, through physical media and/or digital services. For its Legacy Business, the Company operates a nationwide network of approximately 40,000 self-service kiosks where consumers can rent or purchase new-release DVDs and Blu-ray Discs TM (“movies”). The Company also generates service revenue by providing installation, merchandising and break-fix services to other kiosk businesses. Finally, the Company also produces, acquires, and distributes movies exclusively through its film distribution label, Redbox Entertainment LLC, providing rights to talent-led films that are distributed across Redbox services as well as through third party digital services. For its Digital Business, the Company provides both transactional and ad-supported digital streaming services, which include 1) Redbox On Demand, a transactional service which provides digital rental or purchase of new release and catalog movies and TV content, 2) Redbox Free On Demand, an ad-supported service providing free movies and TV shows on demand, and 3) Redbox Free Live TV, a free, ad-supported television service giving access to 95 + linear channels. Redbox is undergoing a significant business expansion and digital transformation. The Company has transitioned from a pure-play DVD rental company to a multi-faceted entertainment company that provides tremendous value and choice by offering DVD rentals as well as multiple digital products across a variety of content windows including transactional (TVOD), ad-supported (AVOD), subscription (SVOD), and being a distributor of feature films with a growing library of original content. Redbox currently conducts its business through two operating segments: (1) Legacy Business and (2) Digital Business. The Company is an indirect, wholly owned subsidiary of New Outerwall, Inc. (“New Outerwall”), a Delaware corporation, which is a direct, wholly owned subsidiary of Aspen Parent, Inc. (“Aspen”), a Delaware corporation. On September 27, 2016, Outerwall, Inc. (“Old Outerwall”) was acquired by an entity controlled by funds affiliated with or controlled by Apollo Global Management, LLC and its subsidiaries (“Apollo” or the “Sponsor”) (the “Apollo Acquisition”). In addition to its interest in Redbox, New Outerwall has interest in one other business under the brand name of Coinstar. Up until December 2019, the Company also offered video games for rent or purchase through its kiosks. In December 2019, the Company withdrew from the video games business, which represented a very small percentage of its overall business. The Company believes that exiting the video games business allows it to generate more value at the kiosk by making more kiosk slots available for movies its customer seek, which drive the vast majority of its revenue and profitability. The last rental window for video games content expired prior to December 31, 2019. All purchasing, marketing, and distribution operations were discontinued by December 31, 2019. The Company completed final liquidation of its used video game inventory in April 2020, which were not material to the Company’s results of operations. | |
Seaport Global Acquisition Corp | |||
Organization and Business Operations | Note 1 — Organization and Business Operation Redbox Entertainment Inc., formerly known as Seaport Global Acquisition Corp. (the “Company”) is a blank check company incorporated in Delaware on July 24, 2020. 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 (the “Business Combination”). The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. As of December 31, 2020, the Company had not yet commenced any operations. All activity for the period July 24, 2020 (inception) through December 31, 2020 relates to the Company’s formation and the initial public offering (the “Initial Public Offering”) which is described below. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end. The registration statement for the Company’s Initial Public Offering was declared effective on November 27, 2020. On December 2, 2020, the Company consummated the Initial Public Offering of 14,375,000 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 overallotment option to purchase an additional 1,875,000 Units at $10.00 per Unit, generating gross proceeds of $143,750,000, which is described in Note 4. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 6,062,500 warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to Seaport Global SPAC, LLC (the “Sponsor”) generating gross proceeds of $6,062,500, which is described in Note 5. Transaction costs amounted to $8,361,625, consisting of $2,875,000 of underwriting fees, $5,031,250 of deferred underwriting fees and $455,375 of other offering costs. Following the closing of the Initial Public Offering on December 2, 2020, an amount of $145,187,500 ($10.10 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement 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 of 1940, as amended (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, 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. The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. NASDAQ rules provide that the Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (less any deferred underwriting commissions and taxes payable on interest earned on the Trust Account) at the time of the signing a definitive agreement to enter a Business Combination. The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to successfully effect a Business Combination. The Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. In connection with a proposed Business Combination, the Company may seek stockholder approval of a Business Combination at a meeting called for such purpose at which stockholders may seek to redeem their shares, regardless of whether they vote for or against a Business Combination. The Company will proceed with a Business Combination only if the Company has net tangible assets of at least $5,000,001 either immediately prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the outstanding shares voted are voted in favor of the Business Combination. If the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Company’s Amended and Restated Certificate of Incorporation provides that, a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from seeking redemption rights with respect to 20% or more of the Public Shares without the Company’s prior written consent. The public stockholders will be entitled to redeem their shares for a pro rata portion of the amount then in the Trust Account (initially $10.10 per share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). The per-share amount to be distributed to stockholders who redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriter (as discussed in Note 8). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. If a stockholder vote is not required and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation, offer such redemption pursuant to the tender offer rules of the Securities and Exchange Commission (the “SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination. The Company’s Sponsor has agreed (a) to vote its Founder Shares (as defined in Note 6), and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination, (b) not to propose an amendment to the Company’s Amended and Restated Certificate of Incorporation with respect to the Company’s pre-Business Combination activities prior to the consummation of a Business Combination unless the Company provides dissenting public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment; (c) not to redeem any shares (including the Founder Shares) and Private Placement Warrants (including underlying securities) into the right to receive cash from the Trust Account in connection with a stockholder vote to approve a Business Combination (or to sell any shares in a tender offer in connection with a Business Combination if the Company does not seek stockholder approval in connection therewith) or a vote to amend the provisions of the Amended and Restated Certificate of Incorporation relating to stockholders’ rights of pre-Business Combination activity and (d) that the Founder Shares and Private Placement Warrants (including underlying securities) shall not participate in any liquidating distributions upon winding up if a Business Combination is not consummated. However, the Sponsor will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares purchased during or after the Initial Public Offering if the Company fails to complete its Business Combination. If the Company is unable to complete a Business Combination by June 2, 2022 (the “Combination Period”), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or similar agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.10 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the day of liquidation of the Trust Account, if less than $10.10 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriter of Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). However, the Company has not asked the Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believe that the Sponsor’s only assets are securities of the Company. Therefore, the Company cannot assure its stockholders that the Sponsor would be able to satisfy those obligations. None of the Company’s officers or directors will indemnify the Company for claims by third parties including, without limitation, claims by vendors and prospective target businesses. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. Liquidity As of December 31, 2020, the Company had cash outside the Trust Account of $948,584 available for working capital needs. All remaining cash held in the Trust Account are generally unavailable for the Company’s use, prior to an initial business combination, and is restricted for use either in a Business Combination or to redeem common stock. As of December 31, 2020, none of the amount in the Trust Account was available to be withdrawn as described above. Through December 31, 2020, the Company’s liquidity needs were satisfied through receipt of $25,000 from the sale of the founder shares and the remaining net proceeds from the IPO and the sale of Private Placement Units. The Company anticipates that the $948,584 outside of the Trust Account as of December 31, 2020, will be sufficient to allow the Company to operate for at least the next 12 months from the issuance of the financial statements, assuming that a Business Combination is not consummated during that time. Until consummation of its Business Combination, the Company will be using the funds not held in the Trust Account, and any additional Working Capital Loans (as defined in Note 6) from the initial stockholders, the Company’s officers and directors, or their respective affiliates (which is described in Note 6), for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the Business Combination. The Company does not believe it will need to raise additional funds in order to meet the expenditures required for operating its business. However, if the Company’s estimates of the costs of undertaking in-depth due diligence and negotiating business combination is less than the actual amount necessary to do so, the Company may have insufficient funds available to operate its business prior to the business combination. Moreover, the Company will need to raise additional capital through loans from its Sponsor, officers, directors, or third parties. None of the Sponsor, officers or directors are under any obligation to advance funds to, or to invest in, the Company. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of its business plan, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. Risks and Uncertainties In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to spread throughout the United States and the World. As of the date the financial statement was issued, there was considerable uncertainty around the expected duration of this pandemic. We have concluded that while it is reasonably possible that COVID-19 could have a negative effect on identifying a target company for a Business Combination, the specific impact is not readily determinable as of the date of this financial statement. The financial statement does not include any adjustments that might result from the outcome of this uncertainty. | Note 1 — Organization and Business Operations Redbox Entertainment Inc. (the “Company”) was incorporated in Delaware on July 24, 2020 under the name “Seaport Global Acquisition Corp.” The Company was formed for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (an “initial business combination”). The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. In conjunction with the Business Combination with Redbox, the Company formed a wholly-owned subsidiary, Seaport Merger Sub, LLC, a Delaware limited liability company (“Merger Sub”). Merger Sub did not have any activity as of September 30, 2021. As of September 30, 2021, the Company had not commenced any operations. All activity through September 30, 2021 relates to the Company’s formation and initial public offering (the “Initial Public Offering”) which is described below, and working capital related to the consummation of an initial business combination. The registration statement for the Company’s Initial Public Offering was declared effective on November 27, 2020. On December 2, 2020, the Company consummated the Initial Public Offering of 14,375,000 units (the “Units” and, with respect to the shares of Class A common stock included in the Units sold, the “Public Shares”), which included the full exercise by the underwriter of the overallotment option to purchase an additional 1,875,000 Units at $10.00 per Unit, generating gross proceeds of $143,750,000, which is described in Note 4. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 6,062,500 warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to Seaport Global SPAC, LLC (the “Sponsor”) generating gross proceeds of $6,062,500, which is described in Note 5. Transaction costs amounted to $8,361,625, consisting of $2,875,000 of underwriting fees, $5,031,250 of deferred underwriting fees and $455,375 of other offering costs. Following the closing of the Initial Public Offering on December 2, 2020, an amount of $145,187,500 ($10.10 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement 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 of 1940, as amended (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, as determined by the Company, until the earlier of: (i) the consummation of an initial business combination or (ii) the distribution of the funds in the Trust Account to the Company’s stockholders, as described below. Risks and Uncertainties Management is continuing to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that COVID-19 could have a negative effect on identifying a target company for an initial business combination, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Business Combination Agreement On May 16, 2021, the Company entered into a Business Combination Agreement (the “Business Combination Agreement”) by and among the Company, Merger Sub, Redwood Holdco, LP (“Parent”), and Redwood Intermediate, LLC (“Redbox”). On October 22, 2021, SGAC, Parent and Redbox consummated the business combination (the “Business Combination”) pursuant to the terms of the Business Combination Agreement. Immediately upon the completion of the Business Combination, Merger Sub merged with and into Redbox. In connection with the consummation of the Business Combination, SGAC changed its name to “Redbox Entertainment Inc.” In connection with the Business Combination, the Company provided the holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of the Business Combination in connection with a stockholder meeting called to approve the Business Combination. The Business Combination Agreement and the Business Combination were approved by the Company’s stockholders at a special meeting of the Company’s stockholders held on October 20, 2021 (the “Special Meeting”). On October 22, 2021, the parties to the Business Combination Agreement consummated the Business Combination and the other transactions contemplated thereby. At the Special Meeting, holders of 12,346,223 shares of the Company’s Class A Common Stock, sold in its Initial Public Offering, exercised their right to redeem those shares for cash at a price of approximately $10.10 per share, for an aggregate of approximately $124,723,926. The per share redemption price of $10.10 for public stockholders electing redemption was paid out of the Company’s Trust Account, which after taking into account the redemption and backstop, had a balance immediately prior to the Closing of approximately $20,495,097. In connection with the Business Combination, on October 12, 2021, SGAC entered into backstop subscription agreements (the “Backstop Agreements”) with certain subscribers (the “Backstop Subscribers”), including affiliates of Apollo Global Management, Inc. and the Sponsor, pursuant to which the Backstop Subscribers agreed, subject to certain conditions in the Backstop Agreements, to subscribe for and purchase up to an aggregate of 3,564,356 shares of SGAC Class A common stock in the event that more than 10,810,644 public shares of SGAC Class A common stock were submitted for redemption in connection with the Business Combination, for a purchase price of $10.10 per share. In accordance with the Backstop Agreements, on October 20, 2021, the Backstop Subscribers funded the approximately $20.2 million aggregate purchase price. Immediately prior to the Closing on October 22, 2021, SGAC issued an aggregate of 1,995,989 shares of Class A common stock to the Backstop Subscribers pursuant to the Backstop Agreements. PIPE Investment Concurrently with the execution of the Business Combination Agreement, SGAC entered into subscription agreements (the “Subscription Agreements”) with certain investors pursuant to which the Company agreed to issue and sell, in private placements to close immediately prior to the Closing, an aggregate of up to 5,000,000 shares of SGAC Class A common stock, par value $0.0001 per share for a purchase price of $10.00 per share (the “PIPE Investment”). The PIPE Investment closed immediately prior to the Business Combination on October 22, 2021. The shares of SGAC Class A common stock issued to the investors pursuant to the Subscription Agreements became shares of Redbox Entertainment Inc. upon consummation of the Business Combination. Immediately after giving effect to the Business Combination (including as a result of the redemptions described above, the conversion of all 3,593,750 outstanding founder shares into shares of Class A common stock on a one-for-one basis and the issuance of an additional 5,000,000 shares of Class A common stock in the PIPE Investment and an additional 1,995,989 shares of Class A common stock pursuant to the Backstop Agreements), there were 45,388,516 shares outstanding Liquidity and Going Concern As of September 30, 2021, the Company had $61,743 in its operating bank accounts and working capital of $(291,142). Until the consummation of an initial business combination, the Company will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire, and structuring, negotiating and consummating an initial business combination. Further, the Company has incurred and expects to continue to incur significant costs in pursuit of its acquisition plans. In the nine months to September 30, 2021, the Company reported negative net change in cash of $886,841, or an average of approximately $98,538 per month. On October 22, 2021, the company successfully consummated its Business Combination with Redbox Entertainment Inc., generating cash proceeds of $90.7 million before transaction fees. As of the Business Combination, the Company believes there is sufficient cash available for the next 12 months. For additional information, please see Note 10 Subsequent Events. |
Significant Accounting Policies
Significant Accounting Policies | 5 Months Ended | 9 Months Ended |
Dec. 31, 2020 | Sep. 30, 2021 | |
Seaport Global Acquisition Corp | ||
Significant Accounting Policies | Note 3 — Significant Accounting Policies Basis of Presentation The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the SEC. Emerging Growth Company Status The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of the financial statement 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 statement. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statement, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2020. Cash and Securities held in Trust Account At December 31, 2020, the assets held in the Trust Account were substantially held in U.S. Treasury Bills. During the period from July 24, 2020 (Inception) to December 31, 2020, the Company did not withdraw any of interest income from the Trust Account to pay its tax obligations. The Company classifies its United States Treasury securities as held-to-maturity in accordance with FASB ASC Topic 320 “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts. A decline in the market value of held-to-maturity securities below cost that is deemed to be other than temporary, results in an impairment that reduces the carrying costs to such securities’ fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether an impairment is other than temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and the duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the general market condition in the geographic area or industry the investee operates in. Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest method. Such amortization and accretion is included in the “interest income” line item in the statements of operations. Interest income is recognized when earned. Warrant Liability The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company's own common shares and whether the warrant holders could potentially require "net cash settlement" in a circumstance outside of the Company's control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. Class A Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet. Offering Costs The Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A- “Expenses of Offering”. Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the Public Offering . Offering costs totaled Income Taxes The Company accounts for income taxes under ASC 740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company has identified the United States as its only “major” tax jurisdiction. The Company may be subject to potential examination by federal and state taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. Net Income Per Share of Common Stock Net income per common share is computed by dividing net income by the weighted average number of common stock outstanding for the period. The Company applies the two-class method in calculating earnings per share. Shares of common stock subject to possible redemption at December 31, 2020, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic net income per common share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of warrants sold in the Initial Public Offering and the private placement to purchase an aggregate 6,062,500 shares of common stock in the calculation of diluted income per share, since the exercise of the warrants into shares of common stock is contingent upon the occurrence of future events. As a result, diluted net loss per common share is the same as basic net income per common share for the period presented. Below is a reconciliation of net income per common share: For the period ended December 31, 2020 Net Income per share of Class A Common Stock Net income $ 2,097,430 Less: Allocation of loss to Class B common stock (1,215,880) Adjusted net income $ 881,550 Weighted average shares outstanding of Class A common stock 2,605,469 Basic and diluted net income per share, Class A common stock $ 0.34 Net Income per share for Class B common stock Net income $ 2,097,430 Less: Allocation of loss to Class A common stock (881,550) Adjusted net income $ 1,215,880 Weighted average shares outstanding of Class B common stock (1) 3,593,570 Basic and diluted net income per share, Class B common stock $ 0.34 (1) Calculated from date of issuance (July 24, 2020) through December 31, 2020 Fair value of financial instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal depository insurance coverage of $250,000. At December 31, 2020, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. Recent Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements. | Note 2 — Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for financial information and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP. In the opinion of management, the unaudited condensed financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2020 as filed with the SEC on November 22, 2021 and included elsewhere in this prospectus, which contains the audited financial statements and notes thereto. The interim results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future interim periods. Emerging Growth Company Status The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of the financial statement 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 statement. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statement, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of September 30, 2021 and December 31, 2020. Cash and Securities held in Trust Account At December 31, 2020, and September 30, 2021, the assets held in the Trust Account were held in U.S. Treasury securities with a maturity of 185 days or less. The Company classifies its United States Treasury securities as held-to-maturity in accordance with FASB ASC Topic 320 “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts. A decline in the market value of held-to-maturity securities below cost that is deemed to be other than temporary, results in an impairment that reduces the carrying costs to such securities’ fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether an impairment is other than temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and the duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the general market condition in the geographic area or industry the investee operates in. Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest method. Such amortization and accretion are included in the “interest income” line item in the statements of operations. Interest income is recognized when earned. Warrant Liabilities The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. Class A Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s unaudited condensed balance sheet. Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature. Income Taxes The Company accounts for income taxes under ASC 740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2021 or December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company has identified the United States as its only “major” tax jurisdiction. The Company may be subject to potential examination by federal and state taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. Net Income (Loss) Per Common Share Net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. The Company applies the two-class method in calculating earnings per share. Shares of common stock subject to possible redemption at September 30, 2021 and December 31, 2020, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic net income per common share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of warrants sold in the Initial Public Offering and the private placement to purchase an aggregate 16,843,750 shares of common stock in the calculation of diluted loss per share, since the exercise of the warrants into shares of common stock is contingent upon the occurrence of future events. As a result, diluted net income (loss) per common share is the same as basic net income (loss) per common share for the period presented. Below is a reconciliation of net income (loss) per common share: Three Months Nine Months Ended Ended September 30, September 30, 2021 2021 Net Loss per share for Class A common stock: Net loss $ (1,843,655) $ (536,769) Less: Allocation of loss to Class B common stock (368,731) (107,354) Adjusted net loss $ (1,474,924) $ (429,415) Weighted average shares outstanding of Class A common stock 14,375,000 14,375,000 Basic and diluted net loss per share, Class A common stock $ (0.10) $ (0.03) Net Loss per share for Class B common stock: Net loss $ (1,843,655) $ (536,769) Less: Allocation of loss to Class A common stock (1,474,924) (429,415) Adjusted net loss $ (368,731) $ (107,354) Weighted average shares outstanding of Class B common stock 3,593,750 3,593,750 Basic and diluted net loss per share, Class B common stock $ (0.10) $ (0.03) Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. Recently Adopted Accounting Standards In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The Company adopted ASU 2020-06 on January 1, 2021. Adoption of the ASU did not impact the Company’s financial position, results of operations or cash flows. Recent Accounting Pronouncements Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements. |
Public Offering
Public Offering | 5 Months Ended | 9 Months Ended |
Dec. 31, 2020 | Sep. 30, 2021 | |
Seaport Global Acquisition Corp | ||
Public Offering | Note 4 — Public Offering Pursuant to the Initial Public Offering, on December 2, 2020, the Company sold 14,375,000 Units, which includes the full exercise by the underwriter of its option to purchase an additional 1,875,000 Units, at a purchase price of $10.00 per Unit. Each Unit consists of one share of the Company’s Class A common stock, $0.0001 par value, and three-quarters | Note 3 — Public Offering On December 2, 2020, the Company sold 14,375,000 Units, at a purchase price of $10.00 per Unit, for aggregate proceeds of $143,750,000. Each Unit consists of one share of Class A common stock, and three-quarters |
Private Placement Warrants
Private Placement Warrants | 9 Months Ended |
Sep. 30, 2021 | |
Seaport Global Acquisition Corp | |
Private Placement Warrants | Note 4 — Private Placement Warrants Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 6,062,500 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, or $6,062,500 in the aggregate. Each Private Placement Warrant is exercisable to purchase one share of Class A common stock at a price of $11.50 per share. The proceeds from the sale of the Private Placement Warrants were added to the net proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete an initial business combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless. |
Related Party Transactions
Related Party Transactions | 5 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | |
Related Party Transactions | Note 12: Related-Party Transactions The Company entered into transactions with New Outerwall and related affiliates, primarily Coinstar, in the ordinary course of business. A description of such transactions and their effects on the accompanying consolidated financial statements are presented below. The Company receives and provides certain operating support under commercial services agreements with New Outerwall and related affiliates. A summary of the amounts due to/from such related parties is presented below: September 30, December 31, Dollars in thousands 2021 2020 Due from related party $ 162 $ 73 Due to related parties, net $ 357 $ 449 Amounts due from related party above includes amounts owed from ecoATM for kiosk servicing and other commercial agreements. The balance in amounts due to related parties primarily includes the unpaid dividends related to employee and Director stock awards. On January 29, 2021, the Company entered into the Fourth Amendment to the Credit Agreement. Provided under the Credit Agreement, the Company incurred additional principal amount under a Term B-2 Loan in an aggregate principal amount of $25.0 million, which was provided by New Outerwall. The proceeds from the loan will be used for general corporate purposes. The Company is an indirect, wholly owned subsidiary of New Outerwall, Inc. See Note 6: Debt, With respect to income taxes for the periods, while generally the Company is part of a consolidated group for income tax filings, the income tax benefits and provisions, income tax payables, related tax payments and deferred tax balances reported within have been prepared as if the Company operates as a standalone taxpayer. Deferred taxes have been classified as net liabilities in the respective unaudited Condensed Consolidated Balance Sheets Accrued and other current liabilities Condensed In connection with the Company’s impending business combination and restructuring, on June 29, 2021, the Company and New Outerwall determined that it was no longer probable that the income tax payable balances of the Company to New Outerwall would be paid. As such, the Company recorded an entry to reduce Accrued and other current liabilities $15.8 million and increase Additional paid-in capital $15.8 million. | Note 13: Related-Party Transactions The Company entered into transactions with New Outerwall and related affiliates, primarily Coinstar, in the ordinary course of business. A description of such transactions and their effects on the accompanying consolidated financial statements are presented below. The Company receives and provides certain operating support under commercial services agreements with New Outerwall and related affiliates. A summary of the amounts due to/from such related parties, and the related costs, is presented below: December 31, December 31, Dollars in thousands 2020 2019 Due from related party $ 73 $ 2,712 Due to related parties, net $ 449 $ 1,477 Amounts due from related party above includes amounts owed from Coinstar for professional services. The balance in amounts due to related parties primarily includes the unpaid dividends related to employee and Director stock awards. On January 29, 2021, the Company entered into the Fourth Amendment to the Credit Agreement. Provided under the Credit Agreement, the Company incurred additional principal amount under a Term B-2 Loan in an aggregate principal amount of $25.0 million, which was provided by New Outerwall. The proceeds from the loan will be used for general corporate purposes. The Term B-2 loan ranks pari passu basis with all obligations pursuant to the Credit Agreement. The Company is an indirect, wholly owned subsidiary of New Outerwall, Inc. See Note 6, Debt and Note 15, Subsequent Events, for a further discussion. With respect to income taxes for the periods, while generally the Company is part of a consolidated group for income tax filings, the income tax benefits and provisions, income tax payables, related tax payments and deferred tax balances reported within have been prepared as if the Company operates as a standalone taxpayer. Deferred taxes have been classified as net liabilities in the respective Consolidated Balance Sheets of the Company. Except for certain separate state tax obligations, the Company generally remits cash to Aspen or New Outerwall to settle any third-party, tax-related obligations, as determined if the Company operated as a standalone taxpayer. Income taxes payable balances, which are included in Accrued and other current liabilities in the Company’s Consolidated Balance Sheet, were $15.8 million as of December 31, 2020 and December 31, 2019. See Note 15, Subsequent Events, for a further discussion. | |
Seaport Global Acquisition Corp | |||
Related Party Transactions | Note 6 — Related Party Transactions Founder Shares In July 2020, the Company issued an aggregate of 3,593,750 shares (the “Founder Shares”) to the Sponsor for an aggregate purchase price of $25,000 in cash. The Founder Shares included an aggregate of up to 468,750 shares of Class B common stock subject to forfeiture by the Sponsor to the extent that the underwriter’s over-allotment option was not exercised in full or in part, so that the Sponsor would own, on an as-converted basis, 20% of the Company’s issued and outstanding shares after the Initial Public Offering. As a result of the underwriter’s election to fully exercise its over-allotment option, 468,750 Founder Shares are no longer subject to forfeiture. The initial stockholders have agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination or (B) the date on which the Company completes a liquidation, merger, capital stock exchange or similar transaction that results in the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Notwithstanding the foregoing, if the last sale price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 30 Promissory Note and Advances Related Party On July 24, 2020, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the “Note”). The Note was non-interest bearing and was payable on the earlier of March 31, 2021 or the completion of the Initial Public Offering. The outstanding balance under the Note was repaid on December 2, 2020. In addition, the Sponsor advanced the Company an aggregate of $275,000 to cover expenses related to the Initial Public Offering which was repaid on December 2, 2020. At December 31, 2020, there were no borrowings outstanding. Related Party Loans In order to finance transaction costs in connection with a Business Combination, the Company’s Sponsor, an affiliate of the Sponsor, or the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of notes may be converted upon consummation of a Business Combination into warrants at a price of $1.00 per warrant. The warrants will be identical to the Private Placement Warrants. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. At December 31, 2020, no Working Capital Loans were outstanding. Administrative Support Agreement The Company entered into an agreement, commencing on November 30, 2020 through the earlier of the Company’s consummation of a Business Combination and its liquidation, to pay the Sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support. Upon completion of the Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. As of December 31, 2020, the Company has paid an aggregate of $10,000. | Note 5 — Related Party Transactions Founder Shares In July 2020, the Company issued an aggregate of 3,593,750 shares (the “Founder Shares”) to the Sponsor for an aggregate purchase price of $25,000 in cash. The initial stockholders have agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion of an initial business combination or (B) the date on which the Company completes a liquidation, merger, capital stock exchange or similar transaction that results in the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Notwithstanding the foregoing, if the last sale price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after an initial business combination, the Founder Shares will be released from the lock-up. Related Party Loans In order to finance transaction costs in connection with an initial business combination, the Company’s Sponsor, an affiliate of the Sponsor, or the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes would either be repaid upon consummation of an initial business combination, without interest, or, at the lender’s discretion, up to $1,500,000 of notes may be converted upon consummation of an initial business combination into warrants at a price of $1.00 per warrant. The warrants will be identical to the Private Placement Warrants. In the event that an initial business combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. At September 30, 2021 and December 31, 2020, no Working Capital Loans were outstanding. Administrative Service Fee The Company entered into an agreement, commencing on November 30, 2020 through the earlier of the Company’s consummation of an initial business combination and its liquidation, to pay the Sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support. For the three and nine months ended September 30, 2021, the Company has paid $30,000 and $90,000, respectively, as directed by the Sponsor, to a consultant engaged to provide administrative support services. |
Commitments and Contingencies
Commitments and Contingencies | 5 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies | Note 10: Commitments and Contingencies The Company leases office facilities and certain equipment necessary to maintain its information technology infrastructure. Rent expense, net of sublease income, under its operating lease agreements was $1.9 million and $1.8 million for the nine months ended September 30, 2021 and 2020, respectively. The Company also leases automobiles under capital leases expiring at various dates through 2021. Management assesses these leases as they come due as to whether it should purchase, enter into new capital leases, or enter into operating leases. Assets held under capital leases are included in Property and equipment, net Condensed Consolidated Balance Sheets September 30, December 31, Dollars in thousands 2021 2020 Gross property and equipment $ 10,436 $ 10,677 Accumulated depreciation (6,981) (5,204) Net property and equipment $ 3,455 $ 5,473 Content License Agreements The Company licenses minimum quantities of theatrical and direct-to-video titles under licensing agreements with certain movie content providers. Changes in the Company’s agreements with content providers since December 31, 2020 are as follows: ● On January 15, 2021, the Company entered into a two-year license agreement with Sony Pictures Home Entertainment effective January 1, 2021. The agreement replaces the licensing agreement the Company had in place with Sony that expired on December 31, 2020. Total estimated movie content commitments under the terms of the Company’s content license agreements in effect as of September 30, 2021 is presented in the following table: Dollars in thousands Total 2021 2022 Minimum estimated movie content commitments $ 28,714 $ 7,979 $ 20,735 Legal Matters The Company is involved from time to time in legal proceedings incidental to the conduct of its business. The Company does not believe that any liability that may result from these proceedings will have a material adverse effect on its consolidated financial statements. | Note 11: Commitments and Contingencies The Company leases office facilities and certain equipment necessary to maintain its information technology infrastructure. Rent expense, net of sublease income, under the Company’s operating lease agreements was $2.5 million, $2.6 million and $2.4 million for the years ended December 31, 2020, 2019 and 2018, respectively. The Company also leases automobiles under capital leases expiring at various dates through 2021. The Company assesses these leases as they come due as to whether it should purchase, enter into new capital leases, or enter into operating leases. Assets held under capital leases are included in Property and equipment, net on the Consolidated Balance Sheets and include the following: Dollars in thousands December 31, 2020 December 31, 2019 Gross property and equipment $ 10,677 $ 11,813 Accumulated depreciation (5,204) (3,529) Net property and equipment $ 5,473 $ 8,284 As of December 31, 2020, the Company’s future minimum lease payments under contractual lease obligations are as follows: Dollars in thousands Capital Operating 2021 $ 2,836 $ 2,591 2022 1,895 1,994 2023 470 1,614 2024 27 923 2025 & Thereafter — 546 Total minimum lease commitments $ 5,228 $ 7,668 Less: Current portion of capital lease obligations (2,836) Long-term portion of capital lease obligations $ 2,392 (1) Includes all operating leases having an initial or remaining non-cancelable lease term in excess of one year. Content License Agreements The Company licenses minimum quantities of theatrical and direct-to-video titles under licensing agreements with certain movie content providers. ● As of December 31, 2020, there have been no changes in the Company ’ s agreements with content providers since December 31, 2019. For further information, see Note 15, Subsequent Events. Total estimated movie content commitments under the terms of the Company’s content license agreements in effect as of December 31, 2020 is presented in the following table: Dollars in thousands Total 2021 2022 Minimum estimated movie content commitments $ 59,788 $ 38,319 $ 21,469 As of December 31, 2020, the Company’s content license agreements are available for rental on the same day and date as the retail release for all major studios. Legal Matters From time to time the Company is involved in legal proceedings incidental to the conduct of its business. The Company does not believe that any liability that may result from these proceedings will have a material adverse effect on its consolidated financial statements. During 2020, the Company received $7.0 million in connection with a class action settlement specific to credit card fees, which were included in Direct Operating expenses in the Consolidated Statements of Operations. | |
Seaport Global Acquisition Corp | |||
Commitments and Contingencies | Note 8 — Commitments & Contingencies Registration Rights Pursuant to a registration rights agreement entered into on November 27, 2020, the holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of the Working Capital Loans (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to our Class A common stock). The holders of the majority of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Underwriters Agreement The underwriter is entitled to a deferred fee of $0.35 per Unit, or $5,031,250 in the aggregate. The deferred fee will become payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement. | Note 6 — Commitments and Contingencies Registration Rights Pursuant to a registration rights agreement entered into on November 27, 2020, the holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of the Working Capital Loans (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to our Class A common stock). The holders of the majority of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of an initial business combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Underwriting Agreement The underwriter is entitled to a deferred fee of $0.35 per Unit, or $5,031,250 in the aggregate. The deferred fee will become payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company completes an initial business combination, subject to the terms of the underwriting agreement. |
Stockholders' Equity
Stockholders' Equity | 5 Months Ended | 9 Months Ended |
Dec. 31, 2020 | Sep. 30, 2021 | |
Seaport Global Acquisition Corp | ||
Stockholders' Equity | Note 9 — Stock holders’ Equity Preferred Stock outstanding Class A Common Stock outstanding Class B Common Stock outstanding The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of the Business Combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like. In the case that additional shares of Class A common stock, or equity linked securities, are issued or deemed issued in excess of the amounts offered in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon the completion of the Initial Public Offering plus all shares of Class A common stock and equity linked securities issued or deemed issued in connection with a Business Combination (excluding any shares or equity linked securities issued, or to be issued, to any seller in a Business Combination, and any private placement-equivalent warrants issued to the Sponsor or its affiliates upon conversion of loans made to the Company). The Company may issue additional common stock or preferred stock to complete its Business Combination or under an employee incentive plan after completion of its Business Combination. | Note 7 — Stockholders’ Equity Preferred Stock Class A Common Stock Class B Common Stock The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of an initial business combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like. In the case that additional shares of Class A common stock, or equity linked securities, are issued or deemed issued in excess of the amounts offered in the Initial Public Offering and related to the closing of an initial business combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon the completion of the Initial Public Offering plus all shares of Class A common stock and equity linked securities issued or deemed issued in connection with an initial business combination (excluding any shares or equity linked securities issued, or to be issued, to any seller in an initial business combination, and any private placement-equivalent warrants issued to the Sponsor or its affiliates upon conversion of loans made to the Company). The Company may issue additional common stock or preferred stock to complete its initial business combination or under an employee incentive plan after completion of its initial business combination. |
Warrant Liabilities
Warrant Liabilities | 5 Months Ended | 9 Months Ended |
Dec. 31, 2020 | Sep. 30, 2021 | |
Seaport Global Acquisition Corp | ||
Warrant Liabilities | Note 10 — Warrant Liability The Public Warrants will become exercisable on the later of (a) 30 days after the consummation of a Business Combination or (b) 12 months from the effective date of the registration statement relating to the Initial Public Offering. No Public Warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the common shares issuable upon exercise of the Public Warrants and a current prospectus relating to such common shares. Notwithstanding the foregoing, if a registration statement covering the Class A common shares issuable upon the exercise of the Public Warrants is not effective within 60 days from the consummation of a Business Combination, the holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise the Public Warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. If an exemption from registration is not available, holders will not be able to exercise their Public Warrants on a cashless basis. The Public Warrants will expire five years from the consummation of a Business Combination or earlier upon redemption or liquidation. The Company may call the Public Warrants for redemption (excluding the Private Placement Warrants), 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 to each Public Warrant holder, ● if, and only if, the last sale price of the Company’s Class A common stock equals or exceeds $18.00 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 sends the notice of redemption to the warrant holders. The exercise price and number of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Company’s initial Business Combination on the date of the consummation of such initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A common shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and will be 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. | Note 8 - Warrant Liabilities Public Warrants Each whole warrant will entitle the holder to purchase one share of Class A common stock at a price of $11.50 per stock, subject to adjustment. The Public Warrants will become exercisable on the later of (a) 30 days after the consummation of an initial business combination or (b) 12 months from the effective date of the registration statement relating to the Initial Public Offering. No Public Warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the common shares issuable upon exercise of the Public Warrants and a current prospectus relating to such common shares. Notwithstanding the foregoing, if a registration statement covering the Class A common shares issuable upon the exercise of the Public Warrants is not effective within 60 days from the consummation of an initial business combination, the holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise the Public Warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. If an exemption from registration is not available, holders will not be able to exercise their Public Warrants on a cashless basis. The Public Warrants will expire five years from the consummation of an initial business combination or earlier upon redemption or liquidation. The Company may call the warrants for redemption (except the Private Placement Warrants): ● in whole and not in part; ● at a price of $0.01 per warrant; ● upon a minimum of 30 days ’ prior written notice of redemption to each warrant holder; and ● if, and only if, the last sale price of the Company’s Class A common stock equals or exceeds $18.00 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 sends the notice of redemption to the warrant holders. The exercise price and number of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete an initial business combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial business combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Company’s initial business combination on the date of the consummation of such initial business combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial business combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. Private Placement Warrants The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A common shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of an initial business combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and will be 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. |
Fair Value Measurements
Fair Value Measurements | 5 Months Ended | 9 Months Ended |
Dec. 31, 2020 | Sep. 30, 2021 | |
Seaport Global Acquisition Corp | ||
Fair Value Measurements | Note 12 — Fair Value Measurements FASB ASC Topic 820 “Fair Value Measurements and Disclosures” (“ASC 820”) defines fair value, the methods used to measure fair value and the expanded disclosures about fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between the buyer and the seller at the measurement date. In determining fair value, the valuation techniques consistent with the market approach, income approach and cost approach shall be used to measure fair value. ASC 820 establishes a fair value hierarchy for inputs, which represent the assumptions used by the buyer and seller in pricing the asset or liability. These inputs are further defined as observable and unobservable inputs. Observable inputs are those that buyer and seller would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about the inputs that the buyer and seller would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy is categorized into three levels based on the inputs as follows: Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment. Level 2 — Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means. Level 3 — Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The fair value of the Company’s certain assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the condensed balance sheet. The fair values of cash and cash equivalents, prepaid assets, accounts payable and accrued expenses, due to related parties are estimated to approximate the carrying values as of December 31, 2020 due to the short maturities of such instruments. The following table presents information about the Company’s assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2020 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. December 31, 2020 Level 1 Level 2 Level 3 Assets: U.S. Money Market held in Trust Account $ 281 $ 281 $ — $ — U.S. Treasury Securities held in Trust Account 145,193,921 145,193,921 — — $ 145,194,202 $ 145,194,202 $ — $ — The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis at December 31, 2020 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value. December 31, Description Level 2020 Liabilities: Warrant Liability – Public Warrants 1 $ 10,975,313 Warrant Liability – Private Placement Warrants 3 $ 6,347,438 Total Warrant Liability $ 17,322,751 The Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within the warrant liability on our balance sheet. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of the warrant liabilities in the statement of operations. Initial Measurement The Company established the initial fair value for the Public Warrants and Private Placement Warrants on December 2, 2020, the date of the Company’s Initial Public Offering, using a Monte Carlo simulation model. The Company allocated the proceeds received from (i) the sale of Units (which is inclusive of one Class A common stock and three-quarters of one Public Warrant), (ii) the sale of Private Placement Warrants, and (iii) the issuance of shares of Class B common stock, first to the Warrants based on their fair values as determined at initial measurement, with the remaining proceeds allocated to Class A common stock subject to possible redemption, Class A common stock and Class B common stock based on their relative fair values at the initial measurement date. The Warrants were classified as Level 3 at the initial measurement date due to the use of unobservable inputs. The key inputs into the Monte Carlo simulation model for the Public Warrants and Private Placement Warrants were as follows at initial measurement: December 2, 2020 Input (Initial Measurement) Risk-free interest rate 0.56 % Expected term (years) 6.04 Expected volatility 24.2 % Stock price $ 9.052 As of December 2, 2020, the Public Warrants and Private Placement Warrants were determined to be $1.34 and $1.38 per warrant for aggregate values of approximately $14.4 million and $8.4 million, respectively. Subsequent Measurement The Warrants are measured at fair value on a recurring basis. The subsequent measurement of the Public Warrants as of December 31, 2020 is classified as Level 1 due to the use of an observable market quote in an active market and the subsequent measurement of the Private Placement Warrants as December 31, 2020 is classified Level 3 due to the use of unobservable inputs. As of December 31, 2020, the Public Warrants and Private Placement Warrants were determined to be $1.02 and $1.05 per warrant for aggregate values of approximately $11.0 million and $6.3 million, respectively. The following table presents the changes in the fair value of warrant liabilities: Private Warrant Placement Public Liabilities Fair value as of December 2, 2020 $ — $ — $ — Initial measurement on December 2, 2020 8,360,188 14,403,750 22,763,938 Change in valuation inputs or other assumptions (2,012,750) (3,428,437) (5,441,188) Fair value as of December 31, 2020 $ 6,347,438 $ 10,975,313 $ 17,322,751 Level 3 financial liabilities consist of the Private Placement Warrant liability for which there is no current market for these securities such that the determination of fair value requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate. | Note 9 - Fair Value Measurements The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment. Level 2 — Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means. Level 3 — Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2021 and at December 31, 2021, and indicate the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: Quoted Significant Significant Prices In Other Other Active Observable Unobservable September 30, Markets Inputs Inputs 2021 (Level 1) (Level 2) (Level 3) Assets: U.S. Money Market held in Trust Account $ — $ — $ — $ — U.S Treasury Securities held in Trust Account 145,218,068 145,218,068 — — $ 145,218,068 $ 145,218,068 $ — $ — Liabilities: Public Warrants Liability $ 10,134,375 $ 10,134,375 $ — $ — Private Warrants Liability 6,332,732 — — 6,332,732 $ 16,467,107 $ 10,134,375 $ — $ 6,332,732 Quoted Significant Significant Prices In Other Other Active Observable Unobservable December 31, Markets Inputs Inputs 2021 (Level 1) (Level 2) (Level 3) Assets: U.S. Money Market held in Trust Account $ 281 $ 281 $ — $ — U.S Treasury Securities held in Trust Account 145,193,921 145,193,921 — — $ 145,194,202 $ 145,194,202 $ — $ — Liabilities: Public Warrants Liability $ 10,975,313 $ 10,975,313 $ — $ — Private Warrants Liability 6,347,438 — — 6,347,438 $ 17,322,751 $ 10,975,313 $ — $ 6,347,438 The Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on the Condensed Balance Sheet. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the Condensed Statement of Operations. The Company established the initial fair value of the Public Warrants and Private Warrants on December 2, 2020, the date of the Company’s Initial Public Offering, and for the Private Warrants as of December 31, 2020 and September 30, 2021, using a Monte Carlo simulation model. For subsequent measurement of the Public Warrants as of December 31, 2020 and September 30, 2021, the Company used observable market quotes for the warrants. The subsequent measurement of the Public Warrants as of December 31, 2020 and September 30, 2021 is classified as Level 1 due to the use of an observable market quotes in an active market. The Private Warrants were classified as Level 3 at the initial measurement date and subsequent measurement dates due to the use of unobservable inputs. The key inputs into the Monte Carlo simulation used for the Private Warrants as of September 30, 2021 and December 31, 2020 were as follows: Inputs September 30, 2021 December 31, 2020 Risk-free interest rate 1.12 % 0.5 % Expected term remaining (years) 5.82 5.96 Expected volatility 14.4 % 16.2 % Stock price $ 10.060 $ 10.02 |
Subsequent Events
Subsequent Events | 5 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | |
Subsequent Events | Note 14: Subsequent Events On October 11, 2021, RAR entered into a consent to the Fifth Amendment to make certain additional changes to the Credit Agreement, which became effective upon consummation of the Business Combination, including extending the maturity date of the Senior Facilities to April, 2024, extending the PIK interest option until December 31, 2022 (subject to a minimum pro forma liquidity), as well as commencing an excess cash flow sweep on March 31, 2022 subject to funds on hand being greater than $20.0 million. In connection with the proposed business combination agreement, on October 12, 2021, Seaport Global Acquisition Corp. entered into backstop subscription agreements (the “Backstop Agreements”) with certain subscribers (the “Backstop Subscribers”), including affiliates of funds managed by affiliates of Apollo Global Management, Inc. and Seaport Global SPAC, LLC, pursuant to which the Backstop Subscribers agreed, subject to certain conditions in the Backstop Agreements, to subscribe for and purchase up to an aggregate of 3,564,356 shares of Seaport’s Class A common stock, par value $0.0001 per share, in the event that more than 10,810,644 public shares of Seaport Class A common stock are submitted for redemption in connection with the proposed Business Combination Agreement, for a purchase price of $10.10 per share. On October 22, 2021, in accordance with the Business Combination Agreement, Redbox and Seaport closed the Business Combination. The Business Combination will be accounted for as a reverse recapitalization in accordance with US GAAP. Under the guidance in ASC 805, Business Combinations, Seaport is expected to be treated as the “acquired” company for financial reporting purposes. Cash received by the Company from the Business Combination totaled $27.0 million, net of $50.0 million of proceeds used to pay down outstanding indebtedness under the Company’s Senior Facilities and transaction costs of The Company has evaluated subsequent events through November 22, 2021, the date on which the financial statements were issued. | Note 15: Subsequent Events On January 15, 2021, the Company entered into a two-year license agreement with Sony Pictures Home Entertainment effective January 1, 2021. The agreement replaces the licensing agreement the Company had in place with Sony that expired on December 31, 2020. On January 29, 2021, the Company entered into the Fourth Amendment to the Credit Agreement. The Fourth Amendment provided for, among other things, (i) deferral of principal amortization payments until the maturity date, (ii) extension of the maturity date to April 2023, (iii) at the Company’s election, subject to certain liquidity thresholds, a paid in-kind (“PIK”) interest option, and (iv) waiver of all financial covenant requirements. In addition, provided under the Fourth Amendment the Company incurred an additional principal amount under a Term B-2 Loan in an aggregate principal amount of $25.0 million, which was provided by New Outerwall. New Outerwall indirectly owns 100% of the equity of the Company and is therefore a related party of the Company. The proceeds from the loan will be used for general corporate purposes. The Term B-2 loan ranks pari passu basis with all obligations pursuant to the Credit Agreement. Pursuant to the Fourth Amendment, interest is payable on the Senior Facilities and the Term B-2 loan entirely in cash or could be paid by increasing the principal amount of the Senior Facilities and Term B-2 loans (PIK interest), or through a combination of cash and PIK interest. Cash interest on the Senior Facilities and Term B-2 loan accrues at a rate of LIBOR plus 7.25% per annum. PIK interest on the Senior Facilities and Term B-2 loan accrues at a rate of LIBOR plus 8.25% per annum. On March 26, 2021, the Company entered into an asset purchase agreement with Sony DADC US Inc. (the “Seller”) to purchase certain assets and assume certain liabilities of the Seller’s business of providing video content distribution and other related services. The net purchase price, based on the asset value as of the closing date is not expected to be material. The closing of the transaction is subject to certain closing conditions and is expected to occur in the second half of 2021. On May 16, 2021, the Company became a party to a business combination agreement with Seaport Global Acquisition Corp. (a publicly traded special purpose acquisition company). The proposed merger is expected to be completed in the second half of 2021, subject to, among other things, approval of the respective party’s shareholders, satisfaction of the conditions stated in the merger agreement and other customary closing conditions. The result of the transaction will transform the Company into a publicly traded entity on the NASDAQ stock exchange. There is no assurance that the transaction will be consummated. In connection with the planned merger, on May 16, 2021, the Company entered into the Fifth Amendment to its Credit Agreement. The Fifth Amendment, which becomes effective upon consummation of the merger, provides consent to the planned merger and, among other things, extends, the Senior Facilities maturity date to October 2023 and eliminates the PIK Interest option after the consummation of the merger. In addition, among other things, concurrently with the consummation of the merger, i) $15.0 million of cash proceeds from the merger will be used to pay down outstanding borrowings under the Revolving Credit Facility and ii) a minimum of $35.0 of cash proceeds from the merger million plus the product of 0.60 times the Excess Cash Proceeds (as that term is defined in the Fifth Amendment) will be used to pay down outstanding borrowings under the Term B-1 Loans. In connection with the Company’s impending business combination and restructuring, on June 29, 2021, the Company and New Outerwall determined that it was no longer probable that the income tax payable balances of the Company to New Outerwall would be paid. As such, the Company recorded an entry to reduce Accrued and other current liabilities $15.8 million and increase Additional paid-in capital $15.8 million. The Company has evaluated subsequent events through July 7, 2021, the date on which the financial statements were issued. | |
Seaport Global Acquisition Corp | |||
Subsequent Events | Note 13 — Subsequent Events On October 22, 2021, subsequent to the fiscal quarter ended March 31, 2021, Seaport Global Acquisition Corp., our predecessor and a Delaware corporation (“SGAC”), consummated the previously announced business combination pursuant to the business combination agreement entered into as of May 16, 2021 (as amended, the “Business Combination Agreement”), by and among SGAC, Seaport Merger Sub LLC, a Delaware limited liability company and wholly-owned subsidiary of SGAC (“Merger Sub”), Redwood Holdco, LP, a Delaware limited partnership (“Parent”), and Redwood Intermediate, LLC, a Delaware limited liability company (“Redbox”). Pursuant to the Business Combination Agreement, SGAC acquired certain equity interests of Redbox from Parent, its sole member, by way of Merger Sub merging with and into Redbox, and Redbox becoming a direct subsidiary of SGAC as a result thereof (the “Business Combination”). On October 20, 2021, SGAC held a special meeting of stockholders (the “Special Meeting”), at which the SGAC stockholders considered and adopted, among other matters, a proposal to approve the Business Combination, including (a) adopting the Business Combination Agreement and (b) approving the other transactions contemplated by the Business Combination Agreement and related agreements described in the Proxy Statement. Pursuant to the terms and subject to the conditions set forth in the Business Combination Agreement, on October 22, 2021 (the “Closing Date”), the Business Combination was consummated (the “Closing”). The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. | Note 10 — Subsequent Events On July 8, 2021, the Company filed a preliminary proxy statement/prospectus with the SEC related to the Business Combination Agreement. On October 22, 2021, the Company completed the Business Combination and changed its name to Redbox Entertainment Inc. In conjunction with the Business Combination, the holders of 12,346,223 shares of SGAC’s Class A common stock sold in the Initial Public Offering exercised their right to redeem those shares for cash at a price of approximately $10.10 per share, for an aggregate of approximately $124.7 million, which redemption occurred concurrent with the consummation of the Business Combination. The Company also completed the sale of 5,000,000 shares of Class A common stock for $50.0 million in the PIPE Investment described in Note 1. In accordance with ASC Topic 855 Subsequent Events, no other events require adjustment or disclosure. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 5 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | |
Fair Value Measurements | Fair Value of Financial Instruments Certain financial assets and liabilities are required to be carried at fair value. Fair value is the price that would be received to sell an asset, or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. In determining fair value, the Company utilizes market data or assumptions that it believes market participants would use in pricing the asset or liability, which would maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, including assumptions about risk and the risks inherent in the inputs to the valuation technique. In evaluating the fair value measurement techniques for recording certain financial assets and liabilities, there is a three-level valuation hierarchy under which financial assets and liabilities are designated. The determination of the applicable level within the hierarchy of a particular financial asset or liability depends on the inputs used in valuation as of the measurement date. Valuations based on observable or market-based inputs for identical asset or liabilities (Level 1 measurement) are given the highest level of priority, whereas valuations based on unobservable or internally derived inputs (Level 3 measurement) are given the lowest level of priority. The three levels of the fair value hierarchy are defined as follows: ● Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities; ● Level 2: Inputs other than Level 1 inputs that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or market-corroborated inputs; or ● Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying amounts for the Company’s cash equivalents approximate fair value because of the short-term nature of these instruments. The fair value of the Company’s long-term debt approximates its carrying amount, which is presented net of unamortized deferred financing costs. | Fair Value of Financial Instruments Certain financial assets and liabilities are required to be carried at fair value. Fair value is the price that would be received to sell an asset, or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. In determining fair value, the Company utilizes market data or assumptions that it believes market participants would use in pricing the asset or liability, which would maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, including assumptions about risk and the risks inherent in the inputs to the valuation technique. In evaluating the fair value measurement techniques for recording certain financial assets and liabilities, there is a three-level valuation hierarchy under which financial assets and liabilities are designated. The determination of the applicable level within the hierarchy of a particular financial asset or liability depends on the inputs used in valuation as of the measurement date. Valuations based on observable or market-based inputs for identical asset or liabilities (Level 1 measurement) are given the highest level of priority, whereas valuations based on unobservable or internally derived inputs (Level 3 measurement) are given the lowest level of priority. The three levels of the fair value hierarchy are defined as follows: ● Level 1 : Observable inputs such as quoted prices in active markets for identical assets or liabilities; ● Level 2 : Inputs other than Level 1 inputs that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or market-corroborated inputs; or ● Level 3 : Unobservable inputs that reflect the reporting entity’s own assumptions. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying amounts for the Company’s cash equivalents approximate fair value because of the short-term nature of these instruments. The fair value of the Company’s long-term debt approximates its carrying amount, which is presented net of unamortized deferred financing costs. | |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, management determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under the tax law, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions in accordance with ASC 740, Income Taxes, on the basis of a two-step process in which (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, it will recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statements of operations. Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheet. | ||
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Guidance Recently Adopted: In August 2018, the FASB issued ASU 2018-05, Intangibles-Goodwill and Other-Internal-Use-Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. In March 2019, the FASB issued ASU 2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials (Subtopic 926-20) Accounting Guidance Not Yet Adopted: In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) | Recent Accounting Pronouncements Accounting Guidance Not Yet Adopted: In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (ASU 2020-04), which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuance of LIBOR or another referenced rate. ASU 2020-04 is effective for fiscal years beginning after December 31, 2022. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) to simplify the accounting for income taxes. This guidance removes certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. The guidance also clarifies and simplifies other areas of ASC 740. This standard is effective for private companies for fiscal years beginning after December 15, 2021. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use-Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. The ASU requires a customer in a cloud computing arrangement (i.e., hosting arrangement) that is a service contract to follow the internal-use software guidance in ASC 350-40 to determine whether to capitalize certain implementation costs or expense them as incurred. For private companies, the guidance is effective for reporting periods beginning after December 15, 2020. The Company is currently evaluating the impact of adopting this ASU, and does not expect a material impact on its consolidated financial statements and related disclosures. In March 2019, the FASB issued ASU 2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials (Subtopic 926-20), in order to align the accounting for production costs of an episodic television series with the accounting for production costs of films by removing the content distinction for capitalization. ASU 2019-02 also requires that an entity reassess estimates of the use of a film in a film group and account for any changes prospectively. In addition, 2019-02 requires that an entity test films and license agreements for impairment at a film group level when the film or license agreements are predominantly monetized with other films and license agreements. For private companies, the guidance is effective for reporting periods beginning after December 15, 2020. The Company is currently evaluating the impact of adopting this ASU, and does not expect a material impact on its consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The ASU requires lessees, among other things, to recognize lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous authoritative guidance. This update also introduces new disclosure requirements for leasing arrangements. For private companies, the guidance is effective for reporting periods beginning after December 15, 2021, with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326). The ASU provides new guidance regarding measurement and recognition of credit impairment for certain financial assets. Such guidance will impact how the Company determines its allowance for estimated uncollectible receivables. For private companies, the guidance is effective for reporting periods beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures. | |
Seaport Global Acquisition Corp | |||
Basis of Presentation | Basis of Presentation The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the SEC. | Basis of Presentation The accompanying unaudited condensed financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for financial information and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP. In the opinion of management, the unaudited condensed financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2020 as filed with the SEC on November 22, 2021 and included elsewhere in this prospectus, which contains the audited financial statements and notes thereto. The interim results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future interim periods. | |
Emerging Growth Company Status | Emerging Growth Company Status The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. | Emerging Growth Company Status The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. | |
Use of Estimates | Use of Estimates The preparation of the financial statement 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 statement. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statement, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. | Use of Estimates The preparation of the financial statement 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 statement. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statement, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. | |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2020. | Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of September 30, 2021 and December 31, 2020. | |
Cash and Securities held in Trust Account | Cash and Securities held in Trust Account At December 31, 2020, the assets held in the Trust Account were substantially held in U.S. Treasury Bills. During the period from July 24, 2020 (Inception) to December 31, 2020, the Company did not withdraw any of interest income from the Trust Account to pay its tax obligations. The Company classifies its United States Treasury securities as held-to-maturity in accordance with FASB ASC Topic 320 “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts. A decline in the market value of held-to-maturity securities below cost that is deemed to be other than temporary, results in an impairment that reduces the carrying costs to such securities’ fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether an impairment is other than temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and the duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the general market condition in the geographic area or industry the investee operates in. Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest method. Such amortization and accretion is included in the “interest income” line item in the statements of operations. Interest income is recognized when earned. | Cash and Securities held in Trust Account At December 31, 2020, and September 30, 2021, the assets held in the Trust Account were held in U.S. Treasury securities with a maturity of 185 days or less. The Company classifies its United States Treasury securities as held-to-maturity in accordance with FASB ASC Topic 320 “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts. A decline in the market value of held-to-maturity securities below cost that is deemed to be other than temporary, results in an impairment that reduces the carrying costs to such securities’ fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether an impairment is other than temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and the duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the general market condition in the geographic area or industry the investee operates in. Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest method. Such amortization and accretion are included in the “interest income” line item in the statements of operations. Interest income is recognized when earned. | |
Warrant Liabilities | Warrant Liability The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company's own common shares and whether the warrant holders could potentially require "net cash settlement" in a circumstance outside of the Company's control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. | Warrant Liabilities The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. | |
Class A Common Stock Subject to Possible Redemption | Class A Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet. | Class A Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s unaudited condensed balance sheet. | |
Offering Costs | Offering Costs The Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A- “Expenses of Offering”. Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the Public Offering . Offering costs totaled | ||
Fair Value of Financial Instruments | Fair value of financial instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature. | Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature. | |
Income Taxes | Income Taxes The Company accounts for income taxes under ASC 740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company has identified the United States as its only “major” tax jurisdiction. The Company may be subject to potential examination by federal and state taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. | Income Taxes The Company accounts for income taxes under ASC 740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2021 or December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company has identified the United States as its only “major” tax jurisdiction. The Company may be subject to potential examination by federal and state taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. | |
Net Income (Loss) Per Common Share | Net Income Per Share of Common Stock Net income per common share is computed by dividing net income by the weighted average number of common stock outstanding for the period. The Company applies the two-class method in calculating earnings per share. Shares of common stock subject to possible redemption at December 31, 2020, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic net income per common share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of warrants sold in the Initial Public Offering and the private placement to purchase an aggregate 6,062,500 shares of common stock in the calculation of diluted income per share, since the exercise of the warrants into shares of common stock is contingent upon the occurrence of future events. As a result, diluted net loss per common share is the same as basic net income per common share for the period presented. Below is a reconciliation of net income per common share: For the period ended December 31, 2020 Net Income per share of Class A Common Stock Net income $ 2,097,430 Less: Allocation of loss to Class B common stock (1,215,880) Adjusted net income $ 881,550 Weighted average shares outstanding of Class A common stock 2,605,469 Basic and diluted net income per share, Class A common stock $ 0.34 Net Income per share for Class B common stock Net income $ 2,097,430 Less: Allocation of loss to Class A common stock (881,550) Adjusted net income $ 1,215,880 Weighted average shares outstanding of Class B common stock (1) 3,593,570 Basic and diluted net income per share, Class B common stock $ 0.34 (1) Calculated from date of issuance (July 24, 2020) through December 31, 2020 | Net Income (Loss) Per Common Share Net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. The Company applies the two-class method in calculating earnings per share. Shares of common stock subject to possible redemption at September 30, 2021 and December 31, 2020, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic net income per common share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of warrants sold in the Initial Public Offering and the private placement to purchase an aggregate 16,843,750 shares of common stock in the calculation of diluted loss per share, since the exercise of the warrants into shares of common stock is contingent upon the occurrence of future events. As a result, diluted net income (loss) per common share is the same as basic net income (loss) per common share for the period presented. Below is a reconciliation of net income (loss) per common share: Three Months Nine Months Ended Ended September 30, September 30, 2021 2021 Net Loss per share for Class A common stock: Net loss $ (1,843,655) $ (536,769) Less: Allocation of loss to Class B common stock (368,731) (107,354) Adjusted net loss $ (1,474,924) $ (429,415) Weighted average shares outstanding of Class A common stock 14,375,000 14,375,000 Basic and diluted net loss per share, Class A common stock $ (0.10) $ (0.03) Net Loss per share for Class B common stock: Net loss $ (1,843,655) $ (536,769) Less: Allocation of loss to Class A common stock (1,474,924) (429,415) Adjusted net loss $ (368,731) $ (107,354) Weighted average shares outstanding of Class B common stock 3,593,750 3,593,750 Basic and diluted net loss per share, Class B common stock $ (0.10) $ (0.03) | |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal depository insurance coverage of $250,000. At December 31, 2020, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. | |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The Company adopted ASU 2020-06 on January 1, 2021. Adoption of the ASU did not impact the Company’s financial position, results of operations or cash flows. | ||
Recent Accounting Pronouncements | Recent Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements. | Recent Accounting Pronouncements Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements. |
Significant Accounting polici_3
Significant Accounting policies (Tables) | 5 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | |
Schedule of reconciliation of net income per common share | The following is a calculation of EPS: Nine Months Ended September 30, Dollars in thousands, except per share amounts 2021 2020 Basic and Diluted EPS Net loss attributable to shareholders $ (92,938) $ (39,135) Weighted average outstanding 30,839,870 27,870,539 Basic and diluted common $ (3.01) $ (1.40) | The following is a calculation of EPS (in thousands, except share and per share amounts): Year ended December 31, 2020 2019 2018 Basic EPS Net (loss) income attributable to shareholders $ (69,503) $ (7,567) $ 61,453 Weighted average shares outstanding for basic earnings (loss) per share 27,906,742 27,779,339 27,623,415 Basic earnings (loss) per common shares attributable to shareholders $ (2.49) $ (0.27) $ 2.22 Diluted EPS Net (loss) income attributable to shareholders $ (69,503) $ (7,567) $ 61,453 Weighted average shares outstanding for basic earnings (loss) per share: 27,906,742 27,779,339 27,623,415 Dilutive effect of restricted stock units — — 573,993 Weighted average shares outstanding for diluted earnings (loss) per share 27,906,742 27,779,339 28,197,409 Diluted earnings (loss) per common share attributable to shareholders $ (2.49) $ (0.27) $ 2.18 | |
Seaport Global Acquisition Corp | |||
Schedule of reconciliation of net income per common share | For the period ended December 31, 2020 Net Income per share of Class A Common Stock Net income $ 2,097,430 Less: Allocation of loss to Class B common stock (1,215,880) Adjusted net income $ 881,550 Weighted average shares outstanding of Class A common stock 2,605,469 Basic and diluted net income per share, Class A common stock $ 0.34 Net Income per share for Class B common stock Net income $ 2,097,430 Less: Allocation of loss to Class A common stock (881,550) Adjusted net income $ 1,215,880 Weighted average shares outstanding of Class B common stock (1) 3,593,570 Basic and diluted net income per share, Class B common stock $ 0.34 (1) Calculated from date of issuance (July 24, 2020) through December 31, 2020 | Three Months Nine Months Ended Ended September 30, September 30, 2021 2021 Net Loss per share for Class A common stock: Net loss $ (1,843,655) $ (536,769) Less: Allocation of loss to Class B common stock (368,731) (107,354) Adjusted net loss $ (1,474,924) $ (429,415) Weighted average shares outstanding of Class A common stock 14,375,000 14,375,000 Basic and diluted net loss per share, Class A common stock $ (0.10) $ (0.03) Net Loss per share for Class B common stock: Net loss $ (1,843,655) $ (536,769) Less: Allocation of loss to Class A common stock (1,474,924) (429,415) Adjusted net loss $ (368,731) $ (107,354) Weighted average shares outstanding of Class B common stock 3,593,750 3,593,750 Basic and diluted net loss per share, Class B common stock $ (0.10) $ (0.03) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) - Seaport Global Acquisition Corp | 5 Months Ended | 9 Months Ended |
Dec. 31, 2020 | Sep. 30, 2021 | |
Schedule of Company's assets and liabilities that are measured at fair value on a recurring basis | The following table presents information about the Company’s assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2020 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. December 31, 2020 Level 1 Level 2 Level 3 Assets: U.S. Money Market held in Trust Account $ 281 $ 281 $ — $ — U.S. Treasury Securities held in Trust Account 145,193,921 145,193,921 — — $ 145,194,202 $ 145,194,202 $ — $ — The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis at December 31, 2020 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value. December 31, Description Level 2020 Liabilities: Warrant Liability – Public Warrants 1 $ 10,975,313 Warrant Liability – Private Placement Warrants 3 $ 6,347,438 Total Warrant Liability $ 17,322,751 | Quoted Significant Significant Prices In Other Other Active Observable Unobservable September 30, Markets Inputs Inputs 2021 (Level 1) (Level 2) (Level 3) Assets: U.S. Money Market held in Trust Account $ — $ — $ — $ — U.S Treasury Securities held in Trust Account 145,218,068 145,218,068 — — $ 145,218,068 $ 145,218,068 $ — $ — Liabilities: Public Warrants Liability $ 10,134,375 $ 10,134,375 $ — $ — Private Warrants Liability 6,332,732 — — 6,332,732 $ 16,467,107 $ 10,134,375 $ — $ 6,332,732 Quoted Significant Significant Prices In Other Other Active Observable Unobservable December 31, Markets Inputs Inputs 2021 (Level 1) (Level 2) (Level 3) Assets: U.S. Money Market held in Trust Account $ 281 $ 281 $ — $ — U.S Treasury Securities held in Trust Account 145,193,921 145,193,921 — — $ 145,194,202 $ 145,194,202 $ — $ — Liabilities: Public Warrants Liability $ 10,975,313 $ 10,975,313 $ — $ — Private Warrants Liability 6,347,438 — — 6,347,438 $ 17,322,751 $ 10,975,313 $ — $ 6,347,438 |
Schedule of key inputs into the Monte Carlo simulation model for the Public Warrants and Private Placement Warrants | December 2, 2020 Input (Initial Measurement) Risk-free interest rate 0.56 % Expected term (years) 6.04 Expected volatility 24.2 % Stock price $ 9.052 | Inputs September 30, 2021 December 31, 2020 Risk-free interest rate 1.12 % 0.5 % Expected term remaining (years) 5.82 5.96 Expected volatility 14.4 % 16.2 % Stock price $ 10.060 $ 10.02 |
Organization and Business Ope_2
Organization and Business Operations (Details) - Seaport Global Acquisition Corp - USD ($) | Dec. 02, 2020 | Dec. 31, 2020 | Sep. 30, 2021 | Dec. 31, 2020 |
Organization and Business Operation | ||||
Share price | $ 9.20 | $ 9.20 | ||
Unit price | $ 10.10 | $ 10.10 | ||
Maturity term of U.S government securities | 185 days | 185 days | ||
Working capital | $ (291,142) | |||
Minimum net tangible assets upon consummation of the Business Combination | $ 5,000,001 | $ 5,000,001 | ||
Cash outside the Trust Account | 948,584 | $ 948,584 | ||
Founder Shares | ||||
Organization and Business Operation | ||||
Consideration received | $ 25,000 | |||
Initial Public Offering | ||||
Organization and Business Operation | ||||
Number of units sold | 14,375,000 | |||
Threshold period for option to purchase additional Units to cover over-allotments | 10 days | |||
Share price | $ 10 | $ 10.10 | $ 10.10 | |
Gross proceeds | $ 143,750,000 | |||
Net proceeds | 145,187,500 | |||
Proceeds From Issuance of Units | $ 143,750,000 | |||
Price per warrant | $ 10.10 | |||
Proceeds from issuance of warrants | $ 145,187,500 | |||
Number of shares exercisable to purchase per warrant | 1 | |||
Unit price | $ 10.10 | $ 10.10 | $ 10.10 | |
Maturity term of U.S government securities | 185 days | |||
Underwriting fees | $ 2,875,000 | $ 2,875,000 | ||
Deferred underwriting fees | 5,031,250 | 5,031,250 | $ 5,031,250 | |
Offering costs | 8,361,625 | 8,361,625 | ||
Other offering cost | 455,375 | $ 455,375 | ||
Ownership interest to be acquired on post-transaction company | 50.00% | |||
Redemption threshold as percent of outstanding | 20.00% | |||
Interest to pay dissolution expenses | $ 100,000 | |||
Private Placement | ||||
Organization and Business Operation | ||||
Gross proceeds | $ 6,062,500 | |||
Number of warrants issued | 6,062,500 | 6,062,500 | 6,062,500 | |
Proceeds From Issuance of Units | $ 6,062,500 | |||
Price per warrant | $ 1 | $ 11.50 | ||
Proceeds from issuance of warrants | $ 6,062,500 | $ 6,062,500 | ||
Number of shares exercisable to purchase per warrant | 1 | 1 | 1 | |
Over-allotment | ||||
Organization and Business Operation | ||||
Number Of Units Granted To Underwriters | 1,875,000 | |||
Share price | $ 10 | |||
Gross proceeds | $ 143,750,000 | |||
Proceeds From Issuance of Units | $ 143,750,000 |
Organization and Business Ope_3
Organization and Business Operations - Business Combination Agreement (Details) - USD ($) | Oct. 22, 2021 | Oct. 12, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Oct. 20, 2021 | Dec. 02, 2020 | Dec. 31, 2019 |
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Common stock, shares issued | 27,962,554 | 31,274,065 | 27,962,554 | ||||
Common stock, shares outstanding | 27,962,554 | 31,274,065 | 27,962,554 | ||||
Seaport Global Acquisition Corp | |||||||
Share Price | $ 9.20 | ||||||
Aggregate purchase price | $ 25,000 | ||||||
PIPE Investors | Seaport Global Acquisition Corp | |||||||
Issuance of Class B common stock to initial Stockholders (in shares) | 5,000,000 | ||||||
Number of shares issued upon conversion | 3,593,750 | ||||||
Conversion of Stock, Shares Issued | 1 | ||||||
Common stock, shares issued | 45,388,516 | ||||||
Common stock, shares outstanding | 45,388,516 | ||||||
Backstop Agreements | PIPE Investors | Seaport Global Acquisition Corp | |||||||
Issuance of Class B common stock to initial Stockholders (in shares) | 1,995,989 | ||||||
Initial Public Offering | Seaport Global Acquisition Corp | |||||||
Common stock, par value | $ 0.0001 | ||||||
Share Price | $ 10.10 | $ 10 | |||||
Class A Common Stock | Seaport Global Acquisition Corp | |||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||||
Common stock, shares issued | 0 | 0 | |||||
Common stock, shares outstanding | 0 | 0 | |||||
Class A Common Stock | PIPE Investors | Seaport Global Acquisition Corp | |||||||
Warrants to purchase shares | 16,843,750 | ||||||
Common stock, shares issued | 12,618,516 | ||||||
Class A Common Stock | Subscription Agreements | PIPE Investors | Seaport Global Acquisition Corp | |||||||
Common stock, par value | $ 0.0001 | ||||||
Issuance of Class B common stock to initial Stockholders (in shares) | 5,000,000 | ||||||
Share Price | $ 10 | ||||||
Class B Common Stock | Seaport Global Acquisition Corp | |||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||||
Issuance of Class B common stock to initial Stockholders (in shares) | 3,593,750 | ||||||
Conversion of Stock, Shares Issued | 1 | 1 | |||||
Common stock, shares issued | 3,593,750 | 3,593,750 | |||||
Common stock, shares outstanding | 3,593,750 | 3,593,750 | |||||
Aggregate purchase price | $ 359 | ||||||
Class B Common Stock | PIPE Investors | Seaport Global Acquisition Corp | |||||||
Common stock, shares issued | 32,770,000 | ||||||
Common stock, shares outstanding | 32,770,000 | ||||||
Subsequent event | Seaport Global Acquisition Corp | |||||||
Redemption price per share | $ 10.10 | ||||||
Share Price | $ 10.10 | ||||||
Aggregate purchase price | $ 124,723,926 | ||||||
Balance immediately prior to the Closing | $ 20,495,097 | ||||||
Subsequent event | Backstop Agreements | Seaport Global Acquisition Corp | |||||||
Aggregate purchase price | $ 20,200,000 | ||||||
Subsequent event | Class A Common Stock | Backstop Agreements | |||||||
Common stock, par value | $ 0.0001 | ||||||
Issuance of Class B common stock to initial Stockholders (in shares) | 3,564,356 | ||||||
Redemption price per share | $ 10.10 | ||||||
Threshold number of common stock subject to redemption | 10,810,644 | ||||||
Subsequent event | Class A Common Stock | Backstop Agreements | Seaport Global Acquisition Corp | |||||||
Issuance of Class B common stock to initial Stockholders (in shares) | 1,995,989 | 3,564,356 | |||||
Redemption price per share | $ 10.10 | ||||||
Threshold number of common stock subject to redemption | 10,810,644 | ||||||
Subsequent event | Class A Common Stock | Initial Public Offering | Seaport Global Acquisition Corp | |||||||
Issuance of Class B common stock to initial Stockholders (in shares) | 12,346,223 |
Organization and Business Ope_4
Organization and Business Operations - Liquidity and Going Concern (Details) - USD ($) | Oct. 22, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Operating bank account | $ 5,401,000 | $ 9,798,000 | $ 5,401,000 | $ 3,852,000 | |||
Net change in cash | (10,781,000) | $ 36,878,000 | 29,693,000 | $ 102,797,000 | $ 185,450,000 | ||
Seaport Global Acquisition Corp | |||||||
Operating bank account | 61,743 | ||||||
Working capital | (291,142) | ||||||
Net change in cash | (371,042) | 886,841 | |||||
Net change in cash, per month | (98,538) | ||||||
Working Capital Loans | Seaport Global Acquisition Corp | |||||||
Maximum loans converted into warrants | $ 1,500,000 | $ 1,500,000 | |||||
Related Party Loans | Working Capital Loans | Seaport Global Acquisition Corp | |||||||
Maximum loans converted into warrants | $ 90,700,000 | $ 1,500,000 | |||||
Price per warrant | $ 12 | $ 1 |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - USD ($) | Dec. 02, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Subsidiary, Sale of Stock [Line Items] | ||||||
Unrecognized Tax Benefits | $ 2,213,000 | $ 1,935,000 | $ 4,558,000 | $ 5,894,000 | ||
Accrued Income Taxes, Current | $ 15,777,000 | $ 15,777,000 | ||||
Seaport Global Acquisition Corp | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Investments Maximum Maturity Term | 185 days | 185 days | ||||
Unrecognized Tax Benefits | $ 0 | $ 0 | ||||
Unrecognized tax benefits accrued for interest and penalties | $ 0 | $ 0 | ||||
Initial Public Offering | Seaport Global Acquisition Corp | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Investments Maximum Maturity Term | 185 days | |||||
Over-allotment | Seaport Global Acquisition Corp | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Shares subject to forfeiture | 468,750 |
Significant Accounting Polici_5
Significant Accounting Policies - Net loss per share (Details) - USD ($) | 3 Months Ended | 5 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Subsidiary, Sale of Stock [Line Items] | |||||||||
Net loss | $ (92,938,000) | $ (39,135,000) | $ (69,503,000) | $ (7,567,000) | $ 61,453,000 | ||||
Adjusted net income (loss) | $ (69,503,000) | $ (7,567,000) | $ 61,453,000 | ||||||
Diluted weighted average shares outstanding | 30,839,870 | 27,870,539 | 27,906,742 | 27,779,339 | 28,197,409 | ||||
Diluted net income per share | $ (3.01) | $ (1.40) | $ (2.49) | $ (0.27) | $ 2.18 | ||||
Basic weighted average shares outstanding | 30,839,870 | 27,870,539 | 27,906,742 | 27,779,339 | 27,623,415 | ||||
Basic net income per share | $ (3.01) | $ (1.40) | $ (2.49) | $ (0.27) | $ 2.22 | ||||
Antidilutive securities excluded from computation of earnings per share | 264,513 | 261,342 | 325,000 | 376,000 | |||||
Class B Common Stock | |||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||
Diluted weighted average shares outstanding | 4,158,672 | ||||||||
Diluted net income per share | $ 0.50 | ||||||||
Seaport Global Acquisition Corp | |||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||
Net loss | $ (1,843,655) | $ (3,821,824) | $ 5,128,710 | $ 2,097,430 | $ (536,769) | ||||
Antidilutive securities excluded from computation of earnings per share | 6,062,500 | 16,843,750 | |||||||
Seaport Global Acquisition Corp | Class A Common Stock | |||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||
Net loss | (1,843,655) | $ 2,097,430 | $ (536,769) | ||||||
Less: Allocation of loss to Class B common stock | 368,731 | (1,215,880) | 107,354 | ||||||
Adjusted net income (loss) | $ (1,474,924) | $ 881,550 | $ (429,415) | ||||||
Diluted weighted average shares outstanding | 14,375,000 | 2,605,469 | 14,375,000 | ||||||
Diluted net income per share | $ (0.10) | $ 0.34 | $ (0.03) | ||||||
Basic weighted average shares outstanding | 14,375,000 | 2,605,469 | 14,375,000 | ||||||
Basic net income per share | $ (0.10) | $ 0.34 | $ (0.03) | ||||||
Seaport Global Acquisition Corp | Class B Common Stock | |||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||
Net loss | $ (1,843,655) | $ 2,097,430 | $ (536,769) | ||||||
Less: Allocation of loss to Class B common stock | (1,474,924) | (881,550) | (429,415) | ||||||
Adjusted net income (loss) | $ (368,731) | $ 1,215,880 | $ (107,354) | ||||||
Diluted weighted average shares outstanding | 3,593,750 | 3,593,570 | 3,593,750 | ||||||
Diluted net income per share | $ (0.10) | $ 0.34 | $ (0.03) | ||||||
Basic weighted average shares outstanding | 3,593,750 | 3,593,570 | 3,593,750 | ||||||
Basic net income per share | $ (0.10) | $ 0.34 | $ (0.03) |
Significant Accounting Polici_6
Significant Accounting Policies - Concentration of Credit Risk (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Seaport Global Acquisition Corp | ||
Federal depository insurance coverage | $ 250,000 | $ 250,000 |
Public Offering (Details)
Public Offering (Details) - Seaport Global Acquisition Corp - USD ($) | Dec. 02, 2020 | Dec. 31, 2020 |
Subsidiary, Sale of Stock [Line Items] | ||
Share price | $ 9.20 | |
Initial Public Offering | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of units sold | 14,375,000 | |
Share price | $ 10 | $ 10.10 |
Proceeds From Issuance of Units | $ 143,750,000 | |
Number of unit consists class A ordinary shares | 1 | |
Number of Public Warrants that each unit consists | 0.75 | |
Shares issuable per warrant | 1 | |
Exercise price of warrants | $ 11.50 | |
Initial Public Offering | Option | ||
Subsidiary, Sale of Stock [Line Items] | ||
Number of units sold | 1,875,000 | |
Share price | $ 10 |
Private Placement Warrants (Det
Private Placement Warrants (Details) - Private Placement - Seaport Global Acquisition Corp - USD ($) | Dec. 02, 2020 | Dec. 31, 2020 |
Subsidiary, Sale of Stock [Line Items] | ||
Number of warrants issued | 6,062,500 | 6,062,500 |
Shares issuable per warrant | 1 | 1 |
Exercise price of warrants | $ 11.50 | $ 1 |
Proceeds from issuance of warrants | $ 6,062,500 | $ 6,062,500 |
Price per warrant | $ 1 | $ 11.50 |
Related Party Transactions - Fo
Related Party Transactions - Founder Shares (Details) - Seaport Global Acquisition Corp - USD ($) | Jul. 31, 2020 | Jul. 31, 2020 | Dec. 31, 2020 | Sep. 30, 2021 |
Related Party Transaction [Line Items] | ||||
Aggregate purchase price | $ 25,000 | |||
Percentage of issued and outstanding shares held by initial stockholders | 20.00% | |||
Founder Shares | ||||
Related Party Transaction [Line Items] | ||||
Issuance of Class B common stock to initial Stockholders (in shares) | 3,593,750 | |||
Aggregate purchase price | $ 25,000 | |||
Restrictions on transfer period of time after business combination completion | 1 year | |||
Consideration received | $ 25,000 | |||
Stock price trigger to transfer, assign or sell any shares or warrants of the company, after the completion of the initial business combination (in dollars per share) | $ 12 | |||
Threshold period after the business combination in which the 20 trading days within any 30 trading day period commences | 150 days | |||
Threshold trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | 20 days | |||
Threshold consecutive trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | 30 days | |||
Over-allotment | ||||
Related Party Transaction [Line Items] | ||||
Shares subject to forfeiture | 468,750 | |||
Private Placement | Founder Shares | ||||
Related Party Transaction [Line Items] | ||||
Threshold period for not to transfer, assign or sell any of their shares or warrants after the completion of the initial business combination | 150 days | |||
Sponsor | Founder Shares | ||||
Related Party Transaction [Line Items] | ||||
Threshold period after the business combination in which the 20 trading days within any 30 trading day period commences | 30 days | |||
Sponsor | Private Placement | Founder Shares | ||||
Related Party Transaction [Line Items] | ||||
Stock price trigger to transfer, assign or sell any shares or warrants of the company, after the completion of the initial business combination (in dollars per share) | $ 12 | |||
Class B Common Stock | ||||
Related Party Transaction [Line Items] | ||||
Issuance of Class B common stock to initial Stockholders (in shares) | 3,593,750 | |||
Aggregate purchase price | $ 359 | |||
Percentage of issued and outstanding shares held by initial stockholders | 20.00% | 20.00% | ||
Class B Common Stock | Founder Shares | Maximum | ||||
Related Party Transaction [Line Items] | ||||
Threshold period after the business combination in which the 20 trading days within any 30 trading day period commences | 20 days |
Related Party Transactions - Ad
Related Party Transactions - Additional information (Details) - USD ($) | Dec. 02, 2020 | Jul. 24, 2020 | Nov. 30, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Oct. 22, 2021 |
Related Party Transaction [Line Items] | |||||||||||
Repayment of advances - related party | $ 3,855,000 | $ 37,188,000 | $ 37,188,000 | $ 76,563,000 | $ 117,875,000 | ||||||
Working Capital Loans | Seaport Global Acquisition Corp | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Maximum loans converted into warrants | $ 1,500,000 | $ 1,500,000 | |||||||||
Exercise price of warrants | $ 1 | $ 1 | |||||||||
Outstanding balance | $ 0 | $ 0 | |||||||||
Sponsor | Unsecured Promissory Note [Member] | Seaport Global Acquisition Corp | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Face amount | $ 300,000 | ||||||||||
Related Party Loans | Seaport Global Acquisition Corp | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Outstanding balance | 0 | 0 | |||||||||
Related Party Loans | Working Capital Loans | Seaport Global Acquisition Corp | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Maximum loans converted into warrants | $ 1,500,000 | 1,500,000 | $ 90,700,000 | ||||||||
Outstanding balance of related party note | 0 | 0 | 0 | $ 0 | |||||||
Administrative Support Agreement [Member] | Seaport Global Acquisition Corp | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Administrative expenses - related party | $ 30,000 | $ 90,000 | |||||||||
Expenses per month | $ 10,000 | 10,000 | |||||||||
Expenses incurred | $ 10,000 | ||||||||||
Initial Public Offering | Seaport Global Acquisition Corp | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Exercise price of warrants | $ 11.50 | ||||||||||
Initial Public Offering | Sponsor | Seaport Global Acquisition Corp | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Repayment of advances - related party | $ 275,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - Seaport Global Acquisition Corp | Sep. 30, 2021USD ($)item$ / shares | Dec. 31, 2020USD ($)$ / shares |
Commitments & Contingencies | ||
Deferred fee per unit | $ / shares | $ 0.35 | $ 0.35 |
Deferred Underwriting Commissions | $ | $ 5,031,250 | $ 5,031,250 |
Maximum number of demands can be made by majority holders | item | 3 |
Stockholders' Equity - Preferre
Stockholders' Equity - Preferred Stock (Details) - Seaport Global Acquisition Corp - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Class of Stock [Line Items] | ||
Preferred shares, shares authorized | 1,000,000 | 1,000,000 |
Preferred shares, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Stockholders' Equity - Common S
Stockholders' Equity - Common Stock (Details) | 5 Months Ended | 9 Months Ended | |
Dec. 31, 2020$ / sharesshares | Sep. 30, 2021Vote$ / sharesshares | Dec. 31, 2019$ / sharesshares | |
Class of Stock [Line Items] | |||
Common stock, shares authorized | 60,000,000 | 60,000,000 | 60,000,000 |
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares issued | 27,962,554 | 31,274,065 | 27,962,554 |
Common stock, shares outstanding | 27,962,554 | 31,274,065 | 27,962,554 |
Seaport Global Acquisition Corp | |||
Class of Stock [Line Items] | |||
Percentage of issued and outstanding shares held by initial stockholders | 20.00% | ||
Class A Common Stock | Seaport Global Acquisition Corp | |||
Class of Stock [Line Items] | |||
Common stock, shares authorized | 100,000,000 | 100,000,000 | |
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | |
Common shares, votes per share | 1 | 1 | |
Common stock, shares issued | 0 | 0 | |
Common stock, shares outstanding | 0 | 0 | |
Shares subject to possible redemption, outstanding | 14,375,000 | 14,375,000 | |
Common Stock, Number Of Votes Per Share | 1 | 1 | |
Class B Common Stock | Seaport Global Acquisition Corp | |||
Class of Stock [Line Items] | |||
Common stock, shares authorized | 10,000,000 | 10,000,000 | |
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | |
Common shares, votes per share | 1 | 1 | |
Common stock, shares issued | 3,593,750 | 3,593,750 | |
Common stock, shares outstanding | 3,593,750 | 3,593,750 | |
Number of Class A common stock issued upon conversion of each share (in shares) | 1 | 1 | |
Percentage of issued and outstanding shares held by initial stockholders | 20.00% | 20.00% | |
Common Stock, Number Of Votes Per Share | 1 | 1 |
Warrant Liabilities (Details)
Warrant Liabilities (Details) - Seaport Global Acquisition Corp - $ / shares | 5 Months Ended | 9 Months Ended |
Dec. 31, 2020 | Sep. 30, 2021 | |
Class of Warrant or Right [Line Items] | ||
Public Warrants exercisable term from the closing of the Business Combination | 30 days | |
Public Warrants exercisable term from the closing of the initial public offering | 12 months | |
Warrant term | 5 years | |
Redemption price per public warrant (in dollars per share) | $ 0.01 | $ 0.01 |
Minimum threshold written notice period for redemption of public warrants | 30 days | 30 days |
Stock price trigger for redemption of public warrants (in dollars per share) | $ 18 | $ 18 |
Threshold trading days for redemption of public warrants | 20 days | 20 days |
Threshold consecutive trading days for redemption of public warrants | 30 days | 30 days |
Threshold business days before sending notice of redemption to warrant holders | 30 days | |
Share price | $ 9.20 | |
Percentage of gross proceeds on total equity proceeds | 60.00% | |
Adjustment of exercise price of warrants based on market value and newly issued price (as a percent) | 115.00% | 115.00% |
Adjustment of redemption price of stock based on market value and newly issued price 1 (as a percent) | 180.00% | |
Public Warrants | ||
Class of Warrant or Right [Line Items] | ||
Exercise price of warrant | $ 11.50 | |
Public Warrants exercisable term from the closing of the Business Combination | 30 days | |
Public Warrants exercisable term from the closing of the initial public offering | 12 months | |
Period of time within which registration statement is expected to become effective | 60 days | |
Warrant term | 5 years | |
Share price | $ 9.20 | |
Percentage of gross proceeds on total equity proceeds | 60.00% | |
Adjustment of redemption price of stock based on market value and newly issued price 1 (as a percent) | 180.00% | |
Private Placement Warrants | ||
Class of Warrant or Right [Line Items] | ||
Restrictions on transfer period of time after business combination completion | 30 days |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Seaport Global Acquisition Corp - USD ($) | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets Held-in-trust, Noncurrent | $ 145,218,069 | $ 145,194,202 | |
Liabilities | 17,322,751 | ||
Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets Held-in-trust, Noncurrent | $ 145,194,202 | 145,218,068 | 145,194,202 |
Liabilities | 17,322,751 | 16,467,107 | |
Recurring | Public Warrants | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities | 10,975,313 | 10,134,375 | |
Recurring | Private Placement Warrants | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities | 6,347,438 | 6,332,732 | |
Recurring | U.S. Money Market held in Trust Account | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets Held-in-trust, Noncurrent | 281 | 281 | |
Recurring | U.S Treasury Securities held in Trust Account | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets Held-in-trust, Noncurrent | 145,193,921 | 145,218,068 | 145,193,921 |
(Level 1) | Public Warrants | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities | 10,975,313 | ||
(Level 1) | Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets Held-in-trust, Noncurrent | 145,194,202 | 145,218,068 | 145,194,202 |
Liabilities | 10,975,313 | 10,134,375 | |
(Level 1) | Recurring | Public Warrants | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities | 10,975,313 | 10,134,375 | |
(Level 1) | Recurring | U.S. Money Market held in Trust Account | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets Held-in-trust, Noncurrent | 281 | 281 | |
(Level 1) | Recurring | U.S Treasury Securities held in Trust Account | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets Held-in-trust, Noncurrent | 145,193,921 | 145,218,068 | 145,193,921 |
(Level 3) | Private Placement Warrants | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities | $ 6,347,438 | ||
(Level 3) | Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities | 6,347,438 | 6,332,732 | |
(Level 3) | Recurring | Private Placement Warrants | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities | $ 6,347,438 | $ 6,332,732 |
Fair Value Measurements - Monte
Fair Value Measurements - Monte Carlo (Details) - Seaport Global Acquisition Corp | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 02, 2020 |
Risk-free interest rate | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Measurement input | 1.12 | 0.5 | 0.56 |
Expected term remaining (years) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Measurement input | 5.82 | 5.96 | 6.04 |
Expected volatility | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Measurement input | 14.4 | 16.2 | 24.2 |
Stock price | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Measurement input | 10.060 | 10.02 | 9.052 |
Subsequent Events (Details)
Subsequent Events (Details) - Seaport Global Acquisition Corp - USD ($) | Oct. 22, 2021 | Dec. 31, 2020 |
Subsequent Event [Line Items] | ||
Unit Price | $ 10.10 | |
Aggregate purchase price | $ 25,000 | |
Subsequent event | ||
Subsequent Event [Line Items] | ||
Aggregate purchase price | $ 124,723,926 | |
Subsequent event | PIPE Investment | ||
Subsequent Event [Line Items] | ||
Issuance of Class B common stock to initial Stockholders (in shares) | 5,000,000 | |
Subsequent event | Subscription Agreements | ||
Subsequent Event [Line Items] | ||
Redemption of shares | 12,346,223 | |
Unit Price | $ 10.10 | |
Aggregate amount for redemption of shares | $ 124,700,000 | |
Subsequent event | Subscription Agreements | PIPE Investment | ||
Subsequent Event [Line Items] | ||
Aggregate purchase price | $ 50,000,000 |
CONDENSED BALANCE SHEETS_2
CONDENSED BALANCE SHEETS - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Total current assets | $ 67,252,000 | $ 65,191,000 |
Total Assets | 402,772,000 | 473,091,000 |
Current liabilities: | ||
Due to related party | 357,000 | 449,000 |
Total current liabilities | 91,580,000 | 103,122,000 |
Total Liabilities | 477,611,000 | 471,629,000 |
Commitments and contingencies | ||
Stockholders' Equity (Deficit) | ||
Common stock | 3,000 | 3,000 |
Additional paid-in capital | 239,722,000 | 223,085,000 |
Accumulated deficit | (314,564,000) | (221,626,000) |
Total Stockholders' Equity (Deficit) | (74,839,000) | 1,462,000 |
Total Liabilities and Stockholders' Equity (Deficit) | 402,772,000 | 473,091,000 |
Seaport Global Acquisition Corp | ||
Current Assets: | ||
Cash | 61,743 | 948,584 |
Prepaid Expenses | 177,159 | 308,515 |
Total current assets | 238,902 | 1,257,099 |
Investments held in Trust Account | 145,218,069 | 145,194,202 |
Total Assets | 145,460,087 | 146,451,301 |
Current liabilities: | ||
Current liability - accounts payable and accrued expenses | 530,044 | 118,844 |
Due to related party | 10,000 | |
Total current liabilities | 530,044 | 128,844 |
Warrant liability | 16,467,107 | 17,322,751 |
Deferred Underwriting fee payable | 5,031,250 | 5,031,250 |
Total Liabilities | 22,028,401 | 22,482,845 |
Commitments and contingencies | ||
Class A common stock subject to possible redemption,14,375,000 shares at redemption value | 145,218,069 | 145,194,202 |
Stockholders' Equity (Deficit) | ||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding (less shares subject to possible redemption) | 0 | 0 |
Accumulated deficit | (21,786,742) | (21,226,105) |
Total Stockholders' Equity (Deficit) | (21,786,383) | (21,225,746) |
Total Liabilities and Stockholders' Equity (Deficit) | 145,460,087 | 146,451,301 |
Class A Common Stock | Seaport Global Acquisition Corp | ||
Stockholders' Equity (Deficit) | ||
Common stock | 0 | 0 |
Class A Common Stock Subject to Redemption | Seaport Global Acquisition Corp | ||
Current liabilities: | ||
Total Liabilities | 22,482,845 | |
Class A common stock subject to possible redemption,14,375,000 shares at redemption value | 145,194,202 | |
Stockholders' Equity (Deficit) | ||
Accumulated deficit | (21,226,105) | |
Total Stockholders' Equity (Deficit) | (21,225,746) | |
Class B Common Stock | Seaport Global Acquisition Corp | ||
Stockholders' Equity (Deficit) | ||
Common stock | 359 | 359 |
Total Stockholders' Equity (Deficit) | $ 359 | $ 359 |
CONDENSED BALANCE SHEETS (Par_2
CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 60,000,000 | 60,000,000 | 60,000,000 |
Common stock, shares issued | 31,274,065 | 27,962,554 | 27,962,554 |
Common stock, shares outstanding | 31,274,065 | 27,962,554 | 27,962,554 |
Seaport Global Acquisition Corp | |||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | |
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
Class A Common Stock | Seaport Global Acquisition Corp | |||
Shares subject to possible redemption | 14,375,000 | 14,375,000 | |
Common stock, par value | $ 0.0001 | $ 0.0001 | |
Common stock, shares authorized | 100,000,000 | 100,000,000 | |
Common stock, shares issued | 0 | 0 | |
Common stock, shares outstanding | 0 | 0 | |
Class A Common Stock Subject to Redemption | Seaport Global Acquisition Corp | |||
Shares subject to possible redemption | 14,375,000 | 14,375,000 | |
Class B Common Stock | Seaport Global Acquisition Corp | |||
Common stock, par value | $ 0.0001 | $ 0.0001 | |
Common stock, shares authorized | 10,000,000 | 10,000,000 | |
Common stock, shares issued | 3,593,750 | 3,593,750 | |
Common stock, shares outstanding | 3,593,750 | 3,593,750 |
STATEMENT OF OPERATIONS
STATEMENT OF OPERATIONS - USD ($) | Dec. 02, 2020 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Loss from operations | $ (99,154,000) | $ (27,764,000) | $ (62,185,000) | $ 29,755,000 | $ 126,063,000 | |||||
Other income (expense): | ||||||||||
Total other income (expense) | (32,522,000) | (44,578,000) | (45,155,000) | |||||||
Net income (loss) | $ (92,938,000) | $ (39,135,000) | $ (69,503,000) | $ (7,567,000) | $ 61,453,000 | |||||
Basic weighted average shares outstanding | 30,839,870 | 27,870,539 | 27,906,742 | 27,779,339 | 27,623,415 | |||||
Diluted weighted average shares outstanding | 30,839,870 | 27,870,539 | 27,906,742 | 27,779,339 | 28,197,409 | |||||
Earnings Per Share, Basic | $ (3.01) | $ (1.40) | $ (2.49) | $ (0.27) | $ 2.22 | |||||
Earnings Per Share, Diluted | $ (3.01) | $ (1.40) | $ (2.49) | $ (0.27) | $ 2.18 | |||||
Seaport Global Acquisition Corp | ||||||||||
Formation and operating costs | $ 500,559 | $ 191,371 | $ 1,416,280 | |||||||
Loss from operations | (500,559) | (191,371) | (1,416,280) | |||||||
Other income (expense): | ||||||||||
Interest Income from securities held in Trust Account | 1,869 | 6,702 | 23,867 | |||||||
Transaction costs allocable to warrant liability | (861,400) | |||||||||
Compensation Expense - private placement warrants | (2,297,689) | |||||||||
Change in fair value of warrant liability | $ (8,400,000) | (1,344,965) | 5,441,188 | 855,644 | ||||||
Total other income (expense) | (1,343,096) | (2,288,801) | 879,511 | |||||||
Net income (loss) | (1,843,655) | $ (3,821,824) | $ 5,128,710 | 2,097,430 | (536,769) | |||||
Class A Common Stock | Seaport Global Acquisition Corp | ||||||||||
Other income (expense): | ||||||||||
Net income (loss) | $ (1,843,655) | $ 2,097,430 | $ (536,769) | |||||||
Basic weighted average shares outstanding | 14,375,000 | 2,605,469 | 14,375,000 | |||||||
Diluted weighted average shares outstanding | 14,375,000 | 2,605,469 | 14,375,000 | |||||||
Earnings Per Share, Basic | $ (0.10) | $ 0.34 | $ (0.03) | |||||||
Earnings Per Share, Diluted | $ (0.10) | $ 0.34 | $ (0.03) | |||||||
Class A redeemable common stock | Seaport Global Acquisition Corp | ||||||||||
Other income (expense): | ||||||||||
Basic weighted average shares outstanding | 2,605,469 | |||||||||
Diluted weighted average shares outstanding | 2,605,469 | |||||||||
Earnings Per Share, Basic | $ 0.34 | |||||||||
Earnings Per Share, Diluted | $ 0.34 | |||||||||
Class B non-redeemable common stock | Seaport Global Acquisition Corp | ||||||||||
Other income (expense): | ||||||||||
Basic weighted average shares outstanding | 3,593,750 | 3,593,750 | 3,593,750 | |||||||
Diluted weighted average shares outstanding | 3,593,750 | 3,593,750 | 3,593,750 | |||||||
Earnings Per Share, Basic | $ (0.10) | $ 0.34 | $ (0.03) | |||||||
Earnings Per Share, Diluted | $ (0.01) | $ 0.34 | $ (0.03) |
CONDENSED STATEMENTS OF CHANGES
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Class A Common StockSeaport Global Acquisition Corp | Class A Common Stock Subject to RedemptionSeaport Global Acquisition Corp | Class A Common Stock Not Subject to RedemptionSeaport Global Acquisition Corp | Class B Common StockSeaport Global Acquisition Corp | Additional Paid-in CapitalSeaport Global Acquisition Corp | Additional Paid-in Capital | Accumulated Income (Deficit)Seaport Global Acquisition Corp | Accumulated Income (Deficit) | Common Stock [Member] | Seaport Global Acquisition Corp | Total |
Balance at the beginning at Dec. 31, 2017 | $ 222,831,000 | $ (88,407,000) | $ 134,427,000 | ||||||||
Balance at the beginning (in shares) at Dec. 31, 2017 | 3 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) | 61,453,000 | 61,453,000 | |||||||||
Balance at the end at Dec. 31, 2018 | 222,928,000 | (144,312,000) | 78,619,000 | ||||||||
Balance at the end (in shares) at Dec. 31, 2018 | 3 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) | (7,567,000) | (7,567,000) | |||||||||
Balance at the end at Dec. 31, 2019 | 223,084,000 | (152,176,000) | $ 3,000 | 70,911,000 | |||||||
Balance at the end (in shares) at Dec. 31, 2019 | 3 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) | (39,135,000) | (39,135,000) | |||||||||
Balance at the end at Sep. 30, 2020 | 223,062,000 | (191,258,000) | $ 3,000 | 31,807,000 | |||||||
Balance at the beginning at Dec. 31, 2019 | 223,084,000 | (152,176,000) | $ 3,000 | 70,911,000 | |||||||
Balance at the beginning (in shares) at Dec. 31, 2019 | 3 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) | (69,503,000) | (69,503,000) | |||||||||
Balance at the end at Dec. 31, 2020 | $ (21,225,746) | $ 359 | 223,085,000 | $ (21,226,105) | (221,626,000) | $ 3,000 | $ (21,225,746) | 1,462,000 | |||
Balance at the end (in shares) at Dec. 31, 2020 | 3,593,750 | 3 | |||||||||
Balance at the beginning at Jul. 23, 2020 | $ 0 | $ 0 | $ 0 | 0 | 0 | ||||||
Balance at the beginning (in shares) at Jul. 23, 2020 | 0 | 0 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Issuance of Class B common stock to initial Stockholders | $ 359 | 24,641 | 25,000 | ||||||||
Issuance of Class B common stock to initial Stockholders (in shares) | 3,593,750 | ||||||||||
Accretion for Class A common stock to redemption amount | $ 24,641 | 23,323,535 | 23,348,176 | ||||||||
Net income (loss) | $ 2,097,430 | 2,097,430 | $ 2,097,430 | $ 2,097,430 | 2,097,430 | 2,097,430 | |||||
Balance at the end at Dec. 31, 2020 | (21,225,746) | $ 359 | 223,085,000 | (21,226,105) | (221,626,000) | $ 3,000 | (21,225,746) | 1,462,000 | |||
Balance at the end (in shares) at Dec. 31, 2020 | 3,593,750 | 3 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Class A common stock subject to redemption | 17,259 | 17,259 | |||||||||
Net income (loss) | 5,128,710 | 5,128,710 | |||||||||
Balance at the end at Mar. 31, 2021 | $ 359 | (16,114,654) | (16,114,295) | ||||||||
Balance at the end (in shares) at Mar. 31, 2021 | 3,593,750 | ||||||||||
Balance at the beginning at Dec. 31, 2020 | $ (21,225,746) | $ 359 | 223,085,000 | (21,226,105) | (221,626,000) | $ 3,000 | (21,225,746) | 1,462,000 | |||
Balance at the beginning (in shares) at Dec. 31, 2020 | 3,593,750 | 3 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income (loss) | (536,769) | $ (536,769) | (92,938,000) | (536,769) | (92,938,000) | ||||||
Balance at the end at Sep. 30, 2021 | $ 359 | 239,722,000 | (21,786,742) | (314,564,000) | $ 3,000 | (21,786,383) | (74,839,000) | ||||
Balance at the end (in shares) at Sep. 30, 2021 | 3,593,750 | ||||||||||
Balance at the beginning at Mar. 31, 2021 | $ 359 | (16,114,654) | (16,114,295) | ||||||||
Balance at the beginning (in shares) at Mar. 31, 2021 | 3,593,750 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Class A common stock subject to redemption | (4,740) | (4,740) | |||||||||
Net income (loss) | (3,821,824) | (3,821,824) | |||||||||
Balance at the end at Jun. 30, 2021 | $ 359 | (19,941,218) | (19,940,859) | ||||||||
Balance at the end (in shares) at Jun. 30, 2021 | 3,593,750 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Class A common stock subject to redemption | (1,869) | (1,869) | |||||||||
Net income (loss) | $ (1,843,655) | $ (1,843,655) | (1,843,655) | (1,843,655) | |||||||
Balance at the end at Sep. 30, 2021 | $ 359 | $ 239,722,000 | $ (21,786,742) | $ (314,564,000) | $ 3,000 | $ (21,786,383) | $ (74,839,000) | ||||
Balance at the end (in shares) at Sep. 30, 2021 | 3,593,750 |
CONDENSED STATEMENT OF CASH F_2
CONDENSED STATEMENT OF CASH FLOWS - USD ($) | 3 Months Ended | 5 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | |
Changes in operating assets and liabilities: | ||||
Prepaid assets | $ (2,497,000) | $ 3,255,000 | ||
Net cash flows (used in) provided by operating activities | (10,781,000) | 29,693,000 | ||
Cash flows from investing activities: | ||||
Net cash flows used in investing activities | (9,647,000) | (19,042,000) | ||
Cash flows from financing activities: | ||||
Net cash flows provided by (used in) financing activities | 24,659,000 | (9,102,000) | ||
Net Change in Cash | 4,231,000 | 1,549,000 | ||
Cash - Beginning of period | 8,927,000 | 7,378,000 | ||
Cash - End of period | $ 13,158,000 | $ 8,927,000 | 13,158,000 | 8,927,000 |
Seaport Global Acquisition Corp | ||||
Cash Flows from Operating Activities: | ||||
Net income (loss) | 2,097,430 | (536,769) | ||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||
Interest earned on marketable securities held in Trust Account | (6,702) | (23,867) | ||
Change in fair value of warrant liability | 1,344,965 | (5,441,188) | (855,644) | |
Transaction costs allocable to warrant liability | 861,400 | |||
Compensation Expense - private placement warrants | 2,297,689 | |||
Changes in operating assets and liabilities: | ||||
Prepaid assets | (308,515) | 131,356 | ||
Due to related party | 10,000 | 10,000 | ||
Accounts payable and accrued expenses | 118,844 | |||
Net cash flows (used in) provided by operating activities | (371,042) | 886,841 | ||
Cash flows from investing activities: | ||||
Investments held in Trust | (145,187,500) | |||
Net cash flows used in investing activities | (145,187,500) | |||
Cash flows from financing activities: | ||||
Proceeds from sale of Class B common stock to initial stockholders | 25,000 | |||
Proceeds from sale of Units, net of offering costs | 140,419,626 | |||
Proceeds from issuance of Private Placement Warrants | 6,062,500 | |||
Net cash flows provided by (used in) financing activities | 146,507,126 | |||
Net Change in Cash | 948,584 | (886,841) | ||
Cash - Beginning of period | 948,584 | |||
Cash - End of period | $ 61,743 | 948,584 | 61,743 | $ 948,584 |
Non-cash investing and financing transactions: | ||||
Change in value of Class A common stock subject to possible redemption | 6,702 | $ (23,867) | ||
Deferred underwriting commissions payable charged to additional paid-in capital | 5,031,250 | |||
Initial classification of warrant liability | $ 22,763,938 |
Organization and Business Ope_5
Organization and Business Operations | 5 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | |
Organization and Business Operations | Note 1: Description of Business Redwood Intermediate, LLC, a Delaware limited liability company, and subsidiaries (“Redbox” or the “Company”), operates self-serve kiosks in the United States where consumers can rent or purchase movies. As of September 30, 2021, the Company operated a network of approximately 40,000 self-service kiosks, in approximately 33,000 locations primarily at leading grocery stores, mass retailers, drug stores, dollar retailers, and convenience stores in every U.S. state and Puerto Rico (collectively the United States). Redbox is an established brand and leading provider in the home entertainment market in the United States. The Company is focused on providing its customers with the best value in entertainment and the most choice in how they consume it, through physical media and/or digital services. Redbox is undergoing a significant business expansion and digital transformation. The Company has transitioned from a pure-play DVD rental company to a multi- faceted entertainment company that provides tremendous value and choice by offering DVD rentals as well as multiple digital products across a variety of content windows including transactional (TVOD), ad-supported (AVOD), subscription (SVOD), and being a distributor of feature films with a growing library of original content. Redbox currently conducts its business through two operating segments: (1) Legacy Business and (2) Digital Business. For the Legacy Business, the Company operates a nationwide network of approximately 40,000 self-service kiosks where consumers can rent or purchase new-release DVDs and Blu-ray Discs TM (“movies”). The Company also generates service revenue by providing installation, merchandising and break-fix services to other kiosk businesses. Finally, the Company also produces, acquires, and distributes movies exclusively through its film distribution label, Redbox Entertainment, LLC, providing rights to talent-led films that are distributed across Redbox services as well as through third party digital services. For its Digital Business, the Company provides both transactional and ad-supported digital streaming services, which include 1) Redbox On Demand, a transactional service which provides digital rental or purchase of new release and catalog movies and TV content, 2) Redbox Free On Demand, an ad-supported service providing free movies and TV shows on demand, and 3) Redbox Free Live TV, a free, ad-supported television service giving access to over 100 linear channels. The Company is an indirect, wholly owned subsidiary of New Outerwall, Inc. (“New Outerwall”), a Delaware corporation, which is a direct, wholly owned subsidiary of Aspen Parent, Inc. (“Aspen”), a Delaware corporation. On September 27, 2016, Outerwall, Inc. (“Old Outerwall”) was acquired by an entity controlled by funds affiliated with or controlled by Apollo Global Management, LLC and its subsidiaries (“Apollo” or the “Sponsor”) (the “Apollo Acquisition”). In addition to its interest in Redbox, New Outerwall has interest in one other business under the brand name of Coinstar. On May 16, 2021, the Company became a party to a Business Combination Agreement with Seaport Global Acquisition Corp. (a publicly traded special purpose acquisition company ("Seaport")). The Business Combination closed on October 22, 2021. The Business Combination is accounted for as a reverse recapitalization in accordance with US GAAP. Under the guidance in ASC 805, Business Combinations For an update on the Business Combination Agreement with Seaport, see Note 14: Subsequent Events. | Note 1: Description of Business Redwood Intermediate, LLC, a Delaware limited liability company, and subsidiaries (“Redbox” or the “Company”), operates self-serve kiosks in the United States where consumers can rent or purchase movies. As of December 31, 2020, the Company operated a network of over 40,000 self-service kiosks, in approximately 34,000 locations primarily at leading grocery stores, mass retailers, drug stores, dollar retailers, and convenience stores in every U.S. state and Puerto Rico (collectively the United States). Redbox is an established brand and leading provider in the home video rental market in the United States. The Company is focused on providing its customers with the best value in entertainment and the most choice in how they consume it, through physical media and/or digital services. For its Legacy Business, the Company operates a nationwide network of approximately 40,000 self-service kiosks where consumers can rent or purchase new-release DVDs and Blu-ray Discs TM (“movies”). The Company also generates service revenue by providing installation, merchandising and break-fix services to other kiosk businesses. Finally, the Company also produces, acquires, and distributes movies exclusively through its film distribution label, Redbox Entertainment LLC, providing rights to talent-led films that are distributed across Redbox services as well as through third party digital services. For its Digital Business, the Company provides both transactional and ad-supported digital streaming services, which include 1) Redbox On Demand, a transactional service which provides digital rental or purchase of new release and catalog movies and TV content, 2) Redbox Free On Demand, an ad-supported service providing free movies and TV shows on demand, and 3) Redbox Free Live TV, a free, ad-supported television service giving access to 95 + linear channels. Redbox is undergoing a significant business expansion and digital transformation. The Company has transitioned from a pure-play DVD rental company to a multi-faceted entertainment company that provides tremendous value and choice by offering DVD rentals as well as multiple digital products across a variety of content windows including transactional (TVOD), ad-supported (AVOD), subscription (SVOD), and being a distributor of feature films with a growing library of original content. Redbox currently conducts its business through two operating segments: (1) Legacy Business and (2) Digital Business. The Company is an indirect, wholly owned subsidiary of New Outerwall, Inc. (“New Outerwall”), a Delaware corporation, which is a direct, wholly owned subsidiary of Aspen Parent, Inc. (“Aspen”), a Delaware corporation. On September 27, 2016, Outerwall, Inc. (“Old Outerwall”) was acquired by an entity controlled by funds affiliated with or controlled by Apollo Global Management, LLC and its subsidiaries (“Apollo” or the “Sponsor”) (the “Apollo Acquisition”). In addition to its interest in Redbox, New Outerwall has interest in one other business under the brand name of Coinstar. Up until December 2019, the Company also offered video games for rent or purchase through its kiosks. In December 2019, the Company withdrew from the video games business, which represented a very small percentage of its overall business. The Company believes that exiting the video games business allows it to generate more value at the kiosk by making more kiosk slots available for movies its customer seek, which drive the vast majority of its revenue and profitability. The last rental window for video games content expired prior to December 31, 2019. All purchasing, marketing, and distribution operations were discontinued by December 31, 2019. The Company completed final liquidation of its used video game inventory in April 2020, which were not material to the Company’s results of operations. | |
Seaport Global Acquisition Corp | |||
Organization and Business Operations | Note 1 — Organization and Business Operation Redbox Entertainment Inc., formerly known as Seaport Global Acquisition Corp. (the “Company”) is a blank check company incorporated in Delaware on July 24, 2020. 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 (the “Business Combination”). The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. As of December 31, 2020, the Company had not yet commenced any operations. All activity for the period July 24, 2020 (inception) through December 31, 2020 relates to the Company’s formation and the initial public offering (the “Initial Public Offering”) which is described below. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering. The Company has selected December 31 as its fiscal year end. The registration statement for the Company’s Initial Public Offering was declared effective on November 27, 2020. On December 2, 2020, the Company consummated the Initial Public Offering of 14,375,000 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 overallotment option to purchase an additional 1,875,000 Units at $10.00 per Unit, generating gross proceeds of $143,750,000, which is described in Note 4. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 6,062,500 warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to Seaport Global SPAC, LLC (the “Sponsor”) generating gross proceeds of $6,062,500, which is described in Note 5. Transaction costs amounted to $8,361,625, consisting of $2,875,000 of underwriting fees, $5,031,250 of deferred underwriting fees and $455,375 of other offering costs. Following the closing of the Initial Public Offering on December 2, 2020, an amount of $145,187,500 ($10.10 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement 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 of 1940, as amended (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, 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. The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. NASDAQ rules provide that the Business Combination must be with one or more target businesses that together have a fair market value equal to at least 80% of the balance in the Trust Account (less any deferred underwriting commissions and taxes payable on interest earned on the Trust Account) at the time of the signing a definitive agreement to enter a Business Combination. The Company will only complete a Business Combination if the post-Business Combination company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. There is no assurance that the Company will be able to successfully effect a Business Combination. The Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. In connection with a proposed Business Combination, the Company may seek stockholder approval of a Business Combination at a meeting called for such purpose at which stockholders may seek to redeem their shares, regardless of whether they vote for or against a Business Combination. The Company will proceed with a Business Combination only if the Company has net tangible assets of at least $5,000,001 either immediately prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the outstanding shares voted are voted in favor of the Business Combination. If the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Company’s Amended and Restated Certificate of Incorporation provides that, a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from seeking redemption rights with respect to 20% or more of the Public Shares without the Company’s prior written consent. The public stockholders will be entitled to redeem their shares for a pro rata portion of the amount then in the Trust Account (initially $10.10 per share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). The per-share amount to be distributed to stockholders who redeem their shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriter (as discussed in Note 8). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. If a stockholder vote is not required and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation, offer such redemption pursuant to the tender offer rules of the Securities and Exchange Commission (the “SEC”), and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination. The Company’s Sponsor has agreed (a) to vote its Founder Shares (as defined in Note 6), and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination, (b) not to propose an amendment to the Company’s Amended and Restated Certificate of Incorporation with respect to the Company’s pre-Business Combination activities prior to the consummation of a Business Combination unless the Company provides dissenting public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment; (c) not to redeem any shares (including the Founder Shares) and Private Placement Warrants (including underlying securities) into the right to receive cash from the Trust Account in connection with a stockholder vote to approve a Business Combination (or to sell any shares in a tender offer in connection with a Business Combination if the Company does not seek stockholder approval in connection therewith) or a vote to amend the provisions of the Amended and Restated Certificate of Incorporation relating to stockholders’ rights of pre-Business Combination activity and (d) that the Founder Shares and Private Placement Warrants (including underlying securities) shall not participate in any liquidating distributions upon winding up if a Business Combination is not consummated. However, the Sponsor will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares purchased during or after the Initial Public Offering if the Company fails to complete its Business Combination. If the Company is unable to complete a Business Combination by June 2, 2022 (the “Combination Period”), the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten The Sponsor has agreed that it will be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has entered into a written letter of intent, confidentiality or similar agreement or Business Combination agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.10 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the day of liquidation of the Trust Account, if less than $10.10 per share due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s indemnity of the underwriter of Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). However, the Company has not asked the Sponsor to reserve for such indemnification obligations, nor has the Company independently verified whether the Sponsor has sufficient funds to satisfy its indemnity obligations and believe that the Sponsor’s only assets are securities of the Company. Therefore, the Company cannot assure its stockholders that the Sponsor would be able to satisfy those obligations. None of the Company’s officers or directors will indemnify the Company for claims by third parties including, without limitation, claims by vendors and prospective target businesses. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. Liquidity As of December 31, 2020, the Company had cash outside the Trust Account of $948,584 available for working capital needs. All remaining cash held in the Trust Account are generally unavailable for the Company’s use, prior to an initial business combination, and is restricted for use either in a Business Combination or to redeem common stock. As of December 31, 2020, none of the amount in the Trust Account was available to be withdrawn as described above. Through December 31, 2020, the Company’s liquidity needs were satisfied through receipt of $25,000 from the sale of the founder shares and the remaining net proceeds from the IPO and the sale of Private Placement Units. The Company anticipates that the $948,584 outside of the Trust Account as of December 31, 2020, will be sufficient to allow the Company to operate for at least the next 12 months from the issuance of the financial statements, assuming that a Business Combination is not consummated during that time. Until consummation of its Business Combination, the Company will be using the funds not held in the Trust Account, and any additional Working Capital Loans (as defined in Note 6) from the initial stockholders, the Company’s officers and directors, or their respective affiliates (which is described in Note 6), for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the Business Combination. The Company does not believe it will need to raise additional funds in order to meet the expenditures required for operating its business. However, if the Company’s estimates of the costs of undertaking in-depth due diligence and negotiating business combination is less than the actual amount necessary to do so, the Company may have insufficient funds available to operate its business prior to the business combination. Moreover, the Company will need to raise additional capital through loans from its Sponsor, officers, directors, or third parties. None of the Sponsor, officers or directors are under any obligation to advance funds to, or to invest in, the Company. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of its business plan, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. Risks and Uncertainties In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to spread throughout the United States and the World. As of the date the financial statement was issued, there was considerable uncertainty around the expected duration of this pandemic. We have concluded that while it is reasonably possible that COVID-19 could have a negative effect on identifying a target company for a Business Combination, the specific impact is not readily determinable as of the date of this financial statement. The financial statement does not include any adjustments that might result from the outcome of this uncertainty. | Note 1 — Organization and Business Operations Redbox Entertainment Inc. (the “Company”) was incorporated in Delaware on July 24, 2020 under the name “Seaport Global Acquisition Corp.” The Company was formed for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (an “initial business combination”). The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. In conjunction with the Business Combination with Redbox, the Company formed a wholly-owned subsidiary, Seaport Merger Sub, LLC, a Delaware limited liability company (“Merger Sub”). Merger Sub did not have any activity as of September 30, 2021. As of September 30, 2021, the Company had not commenced any operations. All activity through September 30, 2021 relates to the Company’s formation and initial public offering (the “Initial Public Offering”) which is described below, and working capital related to the consummation of an initial business combination. The registration statement for the Company’s Initial Public Offering was declared effective on November 27, 2020. On December 2, 2020, the Company consummated the Initial Public Offering of 14,375,000 units (the “Units” and, with respect to the shares of Class A common stock included in the Units sold, the “Public Shares”), which included the full exercise by the underwriter of the overallotment option to purchase an additional 1,875,000 Units at $10.00 per Unit, generating gross proceeds of $143,750,000, which is described in Note 4. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 6,062,500 warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to Seaport Global SPAC, LLC (the “Sponsor”) generating gross proceeds of $6,062,500, which is described in Note 5. Transaction costs amounted to $8,361,625, consisting of $2,875,000 of underwriting fees, $5,031,250 of deferred underwriting fees and $455,375 of other offering costs. Following the closing of the Initial Public Offering on December 2, 2020, an amount of $145,187,500 ($10.10 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement 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 of 1940, as amended (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, as determined by the Company, until the earlier of: (i) the consummation of an initial business combination or (ii) the distribution of the funds in the Trust Account to the Company’s stockholders, as described below. Risks and Uncertainties Management is continuing to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that COVID-19 could have a negative effect on identifying a target company for an initial business combination, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Business Combination Agreement On May 16, 2021, the Company entered into a Business Combination Agreement (the “Business Combination Agreement”) by and among the Company, Merger Sub, Redwood Holdco, LP (“Parent”), and Redwood Intermediate, LLC (“Redbox”). On October 22, 2021, SGAC, Parent and Redbox consummated the business combination (the “Business Combination”) pursuant to the terms of the Business Combination Agreement. Immediately upon the completion of the Business Combination, Merger Sub merged with and into Redbox. In connection with the consummation of the Business Combination, SGAC changed its name to “Redbox Entertainment Inc.” In connection with the Business Combination, the Company provided the holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of the Business Combination in connection with a stockholder meeting called to approve the Business Combination. The Business Combination Agreement and the Business Combination were approved by the Company’s stockholders at a special meeting of the Company’s stockholders held on October 20, 2021 (the “Special Meeting”). On October 22, 2021, the parties to the Business Combination Agreement consummated the Business Combination and the other transactions contemplated thereby. At the Special Meeting, holders of 12,346,223 shares of the Company’s Class A Common Stock, sold in its Initial Public Offering, exercised their right to redeem those shares for cash at a price of approximately $10.10 per share, for an aggregate of approximately $124,723,926. The per share redemption price of $10.10 for public stockholders electing redemption was paid out of the Company’s Trust Account, which after taking into account the redemption and backstop, had a balance immediately prior to the Closing of approximately $20,495,097. In connection with the Business Combination, on October 12, 2021, SGAC entered into backstop subscription agreements (the “Backstop Agreements”) with certain subscribers (the “Backstop Subscribers”), including affiliates of Apollo Global Management, Inc. and the Sponsor, pursuant to which the Backstop Subscribers agreed, subject to certain conditions in the Backstop Agreements, to subscribe for and purchase up to an aggregate of 3,564,356 shares of SGAC Class A common stock in the event that more than 10,810,644 public shares of SGAC Class A common stock were submitted for redemption in connection with the Business Combination, for a purchase price of $10.10 per share. In accordance with the Backstop Agreements, on October 20, 2021, the Backstop Subscribers funded the approximately $20.2 million aggregate purchase price. Immediately prior to the Closing on October 22, 2021, SGAC issued an aggregate of 1,995,989 shares of Class A common stock to the Backstop Subscribers pursuant to the Backstop Agreements. PIPE Investment Concurrently with the execution of the Business Combination Agreement, SGAC entered into subscription agreements (the “Subscription Agreements”) with certain investors pursuant to which the Company agreed to issue and sell, in private placements to close immediately prior to the Closing, an aggregate of up to 5,000,000 shares of SGAC Class A common stock, par value $0.0001 per share for a purchase price of $10.00 per share (the “PIPE Investment”). The PIPE Investment closed immediately prior to the Business Combination on October 22, 2021. The shares of SGAC Class A common stock issued to the investors pursuant to the Subscription Agreements became shares of Redbox Entertainment Inc. upon consummation of the Business Combination. Immediately after giving effect to the Business Combination (including as a result of the redemptions described above, the conversion of all 3,593,750 outstanding founder shares into shares of Class A common stock on a one-for-one basis and the issuance of an additional 5,000,000 shares of Class A common stock in the PIPE Investment and an additional 1,995,989 shares of Class A common stock pursuant to the Backstop Agreements), there were 45,388,516 shares outstanding Liquidity and Going Concern As of September 30, 2021, the Company had $61,743 in its operating bank accounts and working capital of $(291,142). Until the consummation of an initial business combination, the Company will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire, and structuring, negotiating and consummating an initial business combination. Further, the Company has incurred and expects to continue to incur significant costs in pursuit of its acquisition plans. In the nine months to September 30, 2021, the Company reported negative net change in cash of $886,841, or an average of approximately $98,538 per month. On October 22, 2021, the company successfully consummated its Business Combination with Redbox Entertainment Inc., generating cash proceeds of $90.7 million before transaction fees. As of the Business Combination, the Company believes there is sufficient cash available for the next 12 months. For additional information, please see Note 10 Subsequent Events. |
Restatement of Previously Issue
Restatement of Previously Issued Financial Statements | 5 Months Ended |
Dec. 31, 2020 | |
Seaport Global Acquisition Corp | |
Restatement of Previously Issued Financial Statements | Note 2 — Restatement of Previously Issued Financial Statements First Amendment On April 12, 2021, the staff of the SEC issued a public statement entitled "Staff Statement on Accounting and Reporting Considerations for Warrants issued by Special Purpose Acquisition Companies ("SPACs")" (the "Statement"). In the Statement, the SEC staff expressed its view that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities on the SPAC's balance sheet as opposed to equity. The Company previously accounted for its outstanding Public Warrants (as defined in Note 4) and Private Placement Warrants issued in connection with its Initial Public Offering as components of equity instead of as derivative liabilities. The warrant agreement governing the warrants includes a provision that provides for potential changes to the settlement amounts dependent upon the characteristics of the holder of the warrant. In addition, the warrant agreement includes a provision that in the event of a tender or exchange offer made to and accepted by holders of more than 50% of the outstanding shares of a single class of common stock, all holders of the warrants would be entitled to receive cash for their warrants (the "tender offer provision"). The Company's management further evaluated the warrants under Accounting Standards Codification ("ASC") Subtopic 815-40, Contracts in Entity's Own Equity. ASC Section 815-40-15 addresses equity versus liability treatment and classification of equity-linked financial instruments, including warrants, and states that a warrant may be classified as a component of equity only if, among other things, the warrant is indexed to the issuer's common stock. Under ASC Section 815-40-15, a warrant is not indexed to the issuer's common stock if the terms of the warrant require an adjustment to the exercise price upon a specified event and that event is not an input to the fair value of the warrant. Based on management's evaluation, the Company's audit committee, in consultation with management, concluded that the Company's Private Placement Warrants are not indexed to the Company's common stock in the manner contemplated by ASC Section 815-40-15 because the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares. In addition, based on management's evaluation, the Company's audit committee, in consultation with management, concluded the tender offer provision included in the warrant agreement fails the "classified in shareholders' equity" criteria as contemplated by ASC Section 815-40-25. As a result of the above, the Company should have classified the warrants as derivative liabilities in its previously issued financial statements. Under this accounting treatment, the Company is required to measure the fair value of the warrants at the end of each reporting period and recognize changes in the fair value from the prior period in the Company's operating results for the current period. Second Amendment In the Company’s previously issued financial statements, a portion of the public shares were classified as permanent equity to maintain stockholders’ equity greater than $5,000,000 on the basis that the Company will consummate its initial business combination only if the Company has net tangible assets of at least $5,000,001. Thus, the Company can only complete a merger and continue to exist as a public company if there is sufficient Public Shares that do not redeem at the merger and so it is appropriate to classify the portion of its public shares required to keep its stockholders’ equity above the $5,000,000 threshold as “shares not subject to redemption.” However, in light of recent comment letters issued by the Securities & Exchange Commission (“SEC”) to several special purpose acquisition companies, management re-evaluated the Company’s application of ASC 480-10-99 to its accounting classification of public shares. Upon re-evaluation, management determined that the public shares include certain provisions that require classification of the public shares as temporary equity regardless of the minimum net tangible asset required by the Company to complete its initial business combination. As a result of the above, the Company should have classified public shares as temporary equity, thereby understating common stock subject to possible redemption, overstating additional paid in capital, accumulated deficit and total stockholders’ equity as well as understating earnings per share for Class A common stock and overstating earnings per share for Class B common stock. The Company’s accounting classification of public shares did not have any effect on the Company’s previously reported amounts for total assets, total liabilities, cash flows or net income. The impact of the restatement on the Company’s financial statements is reflected in the following table. As As As Restated Restated Previously (First (Second Reported Adjustements (Amendment) Adjustments (Amendment) Balance Sheet as of December 2, 2020 Warrant liability $ — $ 22,763,938 $ 22,763,938 $ — $ 22,763,938 Total liabilities 5,259,504 22,763,938 28,023,442 — 28,023,442 Class A common stock subject to possible redemption 136,471,644 (22,763,938) 113,707,706 31,479,794 145,187,500 Class A common stock 86 225 311 (311) 0 Additional paid-in capital 5,003,786 3,158,862 8,162,648 (8,162,648) — Accumulated deficit (4,225) (3,159,088) (3,163,313) (23,316,835) (26,480,148) Total Stockholders’ Equity $ 5,000,006 $ — $ 5,000,006 $ — $ 5,000,006 Number of shares subject to redemption 13,512,044 (2,253,855) 11,258,189 3,116,811 14,375,000 Balance Sheet as of December 31, 2020 Warrant liability $ — $ 17,322,751 $ 17,322,751 $ — $ 17,322,751 Total liabilities 5,160,094 17,322,751 22,482,845 — 22,482,845 Class A common stock subject to possible redemption 136,291,206 (17,322,751) 118,968,455 26,225,747 145,194,202 Class A common stock 88 172 260 (260) 0 Additional paid-in capital 5,184,223 (2,282,271) 2,901,952 (2,901,952) — Retained earnings (Accumulated deficit) (184,669) 2,282,099 2,097,430 (23,323,535) (21,226,105) Total Stockholders’ Equity (Deficit) $ 5,000,001 $ — $ 5,000,001 $ (26,225,747) $ (21,225,746) Number of shares subject to redemption 13,494,179 (1,715,124) 11,779,055 2,595,945 14,375,000 Statement of Operations for the Period from July 24, 2020 (inception) through December 31, 2020 Change in fair value of warrant liability $ — $ 5,441,188 $ 5,441,188 $ — $ 5,441,188 Transaction costs — (861,400) (861,400) — (861,400) Compensation Expense – private placement warrants — (2,297,689) (2,297,689) — (2,297,689) Other income (expense), net 6,702 2,282,099 2,288,801 — 2,288,801 Net income (loss) (184,669) 2,282,099 2,097,430 — 2,097,430 Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption 2,449,058 — 2,449,058 156,411 2,605,469 Basic and diluted net income per share, Class A common stock subject to possible redemption $ — $ — $ — $ 0.34 $ 0.34 Basic and diluted weighted average shares outstanding, non-redeemable common stock 3,750,161 408,511 4,158,672 — 4,158,672 Basic and diluted net income (loss) per share, non-redeemable common stock $ (0.05) $ 0.55 $ 0.50 $ (0.16) $ 0.34 Statement of Cash Flows for the Period July 24, 2020 (inception) through December 31, 2020 Cash Flows from Operating Activities: Net income (loss) $ (184,669) $ 2,282,099 $ 2,097,430 $ — $ 2,097,430 Adjustments to reconcile net loss to net cash used in operating activities: Change in fair value of warrant liability — (5,441,188) (5,441,188) — (5,441,188) Transaction costs — 861,400 861,400 — 861,400 Compensation Expense – private placement warrants — 2,297,689 2,297,689 — 2,297,689 |
Significant Accounting Polici_7
Significant Accounting Policies | 5 Months Ended | 9 Months Ended |
Dec. 31, 2020 | Sep. 30, 2021 | |
Seaport Global Acquisition Corp | ||
Significant Accounting Policies | Note 3 — Significant Accounting Policies Basis of Presentation The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the SEC. Emerging Growth Company Status The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of the financial statement 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 statement. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statement, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2020. Cash and Securities held in Trust Account At December 31, 2020, the assets held in the Trust Account were substantially held in U.S. Treasury Bills. During the period from July 24, 2020 (Inception) to December 31, 2020, the Company did not withdraw any of interest income from the Trust Account to pay its tax obligations. The Company classifies its United States Treasury securities as held-to-maturity in accordance with FASB ASC Topic 320 “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts. A decline in the market value of held-to-maturity securities below cost that is deemed to be other than temporary, results in an impairment that reduces the carrying costs to such securities’ fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether an impairment is other than temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and the duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the general market condition in the geographic area or industry the investee operates in. Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest method. Such amortization and accretion is included in the “interest income” line item in the statements of operations. Interest income is recognized when earned. Warrant Liability The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company's own common shares and whether the warrant holders could potentially require "net cash settlement" in a circumstance outside of the Company's control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. Class A Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet. Offering Costs The Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A- “Expenses of Offering”. Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the Public Offering . Offering costs totaled Income Taxes The Company accounts for income taxes under ASC 740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company has identified the United States as its only “major” tax jurisdiction. The Company may be subject to potential examination by federal and state taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. Net Income Per Share of Common Stock Net income per common share is computed by dividing net income by the weighted average number of common stock outstanding for the period. The Company applies the two-class method in calculating earnings per share. Shares of common stock subject to possible redemption at December 31, 2020, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic net income per common share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of warrants sold in the Initial Public Offering and the private placement to purchase an aggregate 6,062,500 shares of common stock in the calculation of diluted income per share, since the exercise of the warrants into shares of common stock is contingent upon the occurrence of future events. As a result, diluted net loss per common share is the same as basic net income per common share for the period presented. Below is a reconciliation of net income per common share: For the period ended December 31, 2020 Net Income per share of Class A Common Stock Net income $ 2,097,430 Less: Allocation of loss to Class B common stock (1,215,880) Adjusted net income $ 881,550 Weighted average shares outstanding of Class A common stock 2,605,469 Basic and diluted net income per share, Class A common stock $ 0.34 Net Income per share for Class B common stock Net income $ 2,097,430 Less: Allocation of loss to Class A common stock (881,550) Adjusted net income $ 1,215,880 Weighted average shares outstanding of Class B common stock (1) 3,593,570 Basic and diluted net income per share, Class B common stock $ 0.34 (1) Calculated from date of issuance (July 24, 2020) through December 31, 2020 Fair value of financial instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal depository insurance coverage of $250,000. At December 31, 2020, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. Recent Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements. | Note 2 — Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for financial information and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP. In the opinion of management, the unaudited condensed financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2020 as filed with the SEC on November 22, 2021 and included elsewhere in this prospectus, which contains the audited financial statements and notes thereto. The interim results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future interim periods. Emerging Growth Company Status The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of the financial statement 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 statement. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statement, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of September 30, 2021 and December 31, 2020. Cash and Securities held in Trust Account At December 31, 2020, and September 30, 2021, the assets held in the Trust Account were held in U.S. Treasury securities with a maturity of 185 days or less. The Company classifies its United States Treasury securities as held-to-maturity in accordance with FASB ASC Topic 320 “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts. A decline in the market value of held-to-maturity securities below cost that is deemed to be other than temporary, results in an impairment that reduces the carrying costs to such securities’ fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether an impairment is other than temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and the duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the general market condition in the geographic area or industry the investee operates in. Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest method. Such amortization and accretion are included in the “interest income” line item in the statements of operations. Interest income is recognized when earned. Warrant Liabilities The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. Class A Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s unaudited condensed balance sheet. Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature. Income Taxes The Company accounts for income taxes under ASC 740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2021 or December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company has identified the United States as its only “major” tax jurisdiction. The Company may be subject to potential examination by federal and state taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. Net Income (Loss) Per Common Share Net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. The Company applies the two-class method in calculating earnings per share. Shares of common stock subject to possible redemption at September 30, 2021 and December 31, 2020, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic net income per common share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of warrants sold in the Initial Public Offering and the private placement to purchase an aggregate 16,843,750 shares of common stock in the calculation of diluted loss per share, since the exercise of the warrants into shares of common stock is contingent upon the occurrence of future events. As a result, diluted net income (loss) per common share is the same as basic net income (loss) per common share for the period presented. Below is a reconciliation of net income (loss) per common share: Three Months Nine Months Ended Ended September 30, September 30, 2021 2021 Net Loss per share for Class A common stock: Net loss $ (1,843,655) $ (536,769) Less: Allocation of loss to Class B common stock (368,731) (107,354) Adjusted net loss $ (1,474,924) $ (429,415) Weighted average shares outstanding of Class A common stock 14,375,000 14,375,000 Basic and diluted net loss per share, Class A common stock $ (0.10) $ (0.03) Net Loss per share for Class B common stock: Net loss $ (1,843,655) $ (536,769) Less: Allocation of loss to Class A common stock (1,474,924) (429,415) Adjusted net loss $ (368,731) $ (107,354) Weighted average shares outstanding of Class B common stock 3,593,750 3,593,750 Basic and diluted net loss per share, Class B common stock $ (0.10) $ (0.03) Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. Recently Adopted Accounting Standards In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The Company adopted ASU 2020-06 on January 1, 2021. Adoption of the ASU did not impact the Company’s financial position, results of operations or cash flows. Recent Accounting Pronouncements Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements. |
Public Offering_2
Public Offering | 5 Months Ended | 9 Months Ended |
Dec. 31, 2020 | Sep. 30, 2021 | |
Seaport Global Acquisition Corp | ||
Public Offering | Note 4 — Public Offering Pursuant to the Initial Public Offering, on December 2, 2020, the Company sold 14,375,000 Units, which includes the full exercise by the underwriter of its option to purchase an additional 1,875,000 Units, at a purchase price of $10.00 per Unit. Each Unit consists of one share of the Company’s Class A common stock, $0.0001 par value, and three-quarters | Note 3 — Public Offering On December 2, 2020, the Company sold 14,375,000 Units, at a purchase price of $10.00 per Unit, for aggregate proceeds of $143,750,000. Each Unit consists of one share of Class A common stock, and three-quarters |
Private Placement
Private Placement | 5 Months Ended |
Dec. 31, 2020 | |
Seaport Global Acquisition Corp | |
Private Placement | Note 5 — Private Placement Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 6,062,500 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, or $6,062,500 in the aggregate. Each Private Placement Warrant is exercisable to purchase one share of Class A common stock at a price of $11.50 per share. The proceeds from the sale of the Private Placement Warrants were added to the net proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless. |
Related Party Transactions_2
Related Party Transactions | 5 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | |
Related Party Transactions | Note 12: Related-Party Transactions The Company entered into transactions with New Outerwall and related affiliates, primarily Coinstar, in the ordinary course of business. A description of such transactions and their effects on the accompanying consolidated financial statements are presented below. The Company receives and provides certain operating support under commercial services agreements with New Outerwall and related affiliates. A summary of the amounts due to/from such related parties is presented below: September 30, December 31, Dollars in thousands 2021 2020 Due from related party $ 162 $ 73 Due to related parties, net $ 357 $ 449 Amounts due from related party above includes amounts owed from ecoATM for kiosk servicing and other commercial agreements. The balance in amounts due to related parties primarily includes the unpaid dividends related to employee and Director stock awards. On January 29, 2021, the Company entered into the Fourth Amendment to the Credit Agreement. Provided under the Credit Agreement, the Company incurred additional principal amount under a Term B-2 Loan in an aggregate principal amount of $25.0 million, which was provided by New Outerwall. The proceeds from the loan will be used for general corporate purposes. The Company is an indirect, wholly owned subsidiary of New Outerwall, Inc. See Note 6: Debt, With respect to income taxes for the periods, while generally the Company is part of a consolidated group for income tax filings, the income tax benefits and provisions, income tax payables, related tax payments and deferred tax balances reported within have been prepared as if the Company operates as a standalone taxpayer. Deferred taxes have been classified as net liabilities in the respective unaudited Condensed Consolidated Balance Sheets Accrued and other current liabilities Condensed In connection with the Company’s impending business combination and restructuring, on June 29, 2021, the Company and New Outerwall determined that it was no longer probable that the income tax payable balances of the Company to New Outerwall would be paid. As such, the Company recorded an entry to reduce Accrued and other current liabilities $15.8 million and increase Additional paid-in capital $15.8 million. | Note 13: Related-Party Transactions The Company entered into transactions with New Outerwall and related affiliates, primarily Coinstar, in the ordinary course of business. A description of such transactions and their effects on the accompanying consolidated financial statements are presented below. The Company receives and provides certain operating support under commercial services agreements with New Outerwall and related affiliates. A summary of the amounts due to/from such related parties, and the related costs, is presented below: December 31, December 31, Dollars in thousands 2020 2019 Due from related party $ 73 $ 2,712 Due to related parties, net $ 449 $ 1,477 Amounts due from related party above includes amounts owed from Coinstar for professional services. The balance in amounts due to related parties primarily includes the unpaid dividends related to employee and Director stock awards. On January 29, 2021, the Company entered into the Fourth Amendment to the Credit Agreement. Provided under the Credit Agreement, the Company incurred additional principal amount under a Term B-2 Loan in an aggregate principal amount of $25.0 million, which was provided by New Outerwall. The proceeds from the loan will be used for general corporate purposes. The Term B-2 loan ranks pari passu basis with all obligations pursuant to the Credit Agreement. The Company is an indirect, wholly owned subsidiary of New Outerwall, Inc. See Note 6, Debt and Note 15, Subsequent Events, for a further discussion. With respect to income taxes for the periods, while generally the Company is part of a consolidated group for income tax filings, the income tax benefits and provisions, income tax payables, related tax payments and deferred tax balances reported within have been prepared as if the Company operates as a standalone taxpayer. Deferred taxes have been classified as net liabilities in the respective Consolidated Balance Sheets of the Company. Except for certain separate state tax obligations, the Company generally remits cash to Aspen or New Outerwall to settle any third-party, tax-related obligations, as determined if the Company operated as a standalone taxpayer. Income taxes payable balances, which are included in Accrued and other current liabilities in the Company’s Consolidated Balance Sheet, were $15.8 million as of December 31, 2020 and December 31, 2019. See Note 15, Subsequent Events, for a further discussion. | |
Seaport Global Acquisition Corp | |||
Related Party Transactions | Note 6 — Related Party Transactions Founder Shares In July 2020, the Company issued an aggregate of 3,593,750 shares (the “Founder Shares”) to the Sponsor for an aggregate purchase price of $25,000 in cash. The Founder Shares included an aggregate of up to 468,750 shares of Class B common stock subject to forfeiture by the Sponsor to the extent that the underwriter’s over-allotment option was not exercised in full or in part, so that the Sponsor would own, on an as-converted basis, 20% of the Company’s issued and outstanding shares after the Initial Public Offering. As a result of the underwriter’s election to fully exercise its over-allotment option, 468,750 Founder Shares are no longer subject to forfeiture. The initial stockholders have agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion of a Business Combination or (B) the date on which the Company completes a liquidation, merger, capital stock exchange or similar transaction that results in the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Notwithstanding the foregoing, if the last sale price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 30 Promissory Note and Advances Related Party On July 24, 2020, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the “Note”). The Note was non-interest bearing and was payable on the earlier of March 31, 2021 or the completion of the Initial Public Offering. The outstanding balance under the Note was repaid on December 2, 2020. In addition, the Sponsor advanced the Company an aggregate of $275,000 to cover expenses related to the Initial Public Offering which was repaid on December 2, 2020. At December 31, 2020, there were no borrowings outstanding. Related Party Loans In order to finance transaction costs in connection with a Business Combination, the Company’s Sponsor, an affiliate of the Sponsor, or the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of notes may be converted upon consummation of a Business Combination into warrants at a price of $1.00 per warrant. The warrants will be identical to the Private Placement Warrants. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. At December 31, 2020, no Working Capital Loans were outstanding. Administrative Support Agreement The Company entered into an agreement, commencing on November 30, 2020 through the earlier of the Company’s consummation of a Business Combination and its liquidation, to pay the Sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support. Upon completion of the Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. As of December 31, 2020, the Company has paid an aggregate of $10,000. | Note 5 — Related Party Transactions Founder Shares In July 2020, the Company issued an aggregate of 3,593,750 shares (the “Founder Shares”) to the Sponsor for an aggregate purchase price of $25,000 in cash. The initial stockholders have agreed not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion of an initial business combination or (B) the date on which the Company completes a liquidation, merger, capital stock exchange or similar transaction that results in the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Notwithstanding the foregoing, if the last sale price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after an initial business combination, the Founder Shares will be released from the lock-up. Related Party Loans In order to finance transaction costs in connection with an initial business combination, the Company’s Sponsor, an affiliate of the Sponsor, or the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes would either be repaid upon consummation of an initial business combination, without interest, or, at the lender’s discretion, up to $1,500,000 of notes may be converted upon consummation of an initial business combination into warrants at a price of $1.00 per warrant. The warrants will be identical to the Private Placement Warrants. In the event that an initial business combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. At September 30, 2021 and December 31, 2020, no Working Capital Loans were outstanding. Administrative Service Fee The Company entered into an agreement, commencing on November 30, 2020 through the earlier of the Company’s consummation of an initial business combination and its liquidation, to pay the Sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support. For the three and nine months ended September 30, 2021, the Company has paid $30,000 and $90,000, respectively, as directed by the Sponsor, to a consultant engaged to provide administrative support services. |
Investment Held in Trust Accoun
Investment Held in Trust Account | 5 Months Ended |
Dec. 31, 2020 | |
Seaport Global Acquisition Corp | |
Investment Held in Trust Account | Note 7 — Investment Held in Trust Account As of December 31, 2020, investment in the Company’s Trust Account consisted of $281 in Cash and Sweep Funds and $145,193,921 in U.S. Treasury Securities. All of the U.S. Treasury Securities matured on March 4, 2021. The Company classifies its United States Treasury securities as held-to-maturity in accordance with FASB ASC 320 “Investments — Debt and Equity Securities”. Held-to-maturity treasury securities are recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts. The Company considers all investments with original maturities of more than three months but less than one year to be short-term investments. The carrying value approximates the fair value due to its short-term maturity. The carrying value, excluding gross unrealized holding loss and fair value of held to maturity securities on December 31, 2020 are as follows: Carrying Fair Value Value as of Gross Gross as of December 31, Unrealized Unrealized December 31, 2020 Gains Losses 2020 U.S. Money Market $ 281 $ — $ — $ 281 U.S. Treasury Securities 145,193,921 — (2,174) 145,191,747 $ 145,194,202 $ — $ (2,174) $ 145,192,028 |
Commitments & Contingencies
Commitments & Contingencies | 5 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | |
Commitments & Contingencies | Note 10: Commitments and Contingencies The Company leases office facilities and certain equipment necessary to maintain its information technology infrastructure. Rent expense, net of sublease income, under its operating lease agreements was $1.9 million and $1.8 million for the nine months ended September 30, 2021 and 2020, respectively. The Company also leases automobiles under capital leases expiring at various dates through 2021. Management assesses these leases as they come due as to whether it should purchase, enter into new capital leases, or enter into operating leases. Assets held under capital leases are included in Property and equipment, net Condensed Consolidated Balance Sheets September 30, December 31, Dollars in thousands 2021 2020 Gross property and equipment $ 10,436 $ 10,677 Accumulated depreciation (6,981) (5,204) Net property and equipment $ 3,455 $ 5,473 Content License Agreements The Company licenses minimum quantities of theatrical and direct-to-video titles under licensing agreements with certain movie content providers. Changes in the Company’s agreements with content providers since December 31, 2020 are as follows: ● On January 15, 2021, the Company entered into a two-year license agreement with Sony Pictures Home Entertainment effective January 1, 2021. The agreement replaces the licensing agreement the Company had in place with Sony that expired on December 31, 2020. Total estimated movie content commitments under the terms of the Company’s content license agreements in effect as of September 30, 2021 is presented in the following table: Dollars in thousands Total 2021 2022 Minimum estimated movie content commitments $ 28,714 $ 7,979 $ 20,735 Legal Matters The Company is involved from time to time in legal proceedings incidental to the conduct of its business. The Company does not believe that any liability that may result from these proceedings will have a material adverse effect on its consolidated financial statements. | Note 11: Commitments and Contingencies The Company leases office facilities and certain equipment necessary to maintain its information technology infrastructure. Rent expense, net of sublease income, under the Company’s operating lease agreements was $2.5 million, $2.6 million and $2.4 million for the years ended December 31, 2020, 2019 and 2018, respectively. The Company also leases automobiles under capital leases expiring at various dates through 2021. The Company assesses these leases as they come due as to whether it should purchase, enter into new capital leases, or enter into operating leases. Assets held under capital leases are included in Property and equipment, net on the Consolidated Balance Sheets and include the following: Dollars in thousands December 31, 2020 December 31, 2019 Gross property and equipment $ 10,677 $ 11,813 Accumulated depreciation (5,204) (3,529) Net property and equipment $ 5,473 $ 8,284 As of December 31, 2020, the Company’s future minimum lease payments under contractual lease obligations are as follows: Dollars in thousands Capital Operating 2021 $ 2,836 $ 2,591 2022 1,895 1,994 2023 470 1,614 2024 27 923 2025 & Thereafter — 546 Total minimum lease commitments $ 5,228 $ 7,668 Less: Current portion of capital lease obligations (2,836) Long-term portion of capital lease obligations $ 2,392 (1) Includes all operating leases having an initial or remaining non-cancelable lease term in excess of one year. Content License Agreements The Company licenses minimum quantities of theatrical and direct-to-video titles under licensing agreements with certain movie content providers. ● As of December 31, 2020, there have been no changes in the Company ’ s agreements with content providers since December 31, 2019. For further information, see Note 15, Subsequent Events. Total estimated movie content commitments under the terms of the Company’s content license agreements in effect as of December 31, 2020 is presented in the following table: Dollars in thousands Total 2021 2022 Minimum estimated movie content commitments $ 59,788 $ 38,319 $ 21,469 As of December 31, 2020, the Company’s content license agreements are available for rental on the same day and date as the retail release for all major studios. Legal Matters From time to time the Company is involved in legal proceedings incidental to the conduct of its business. The Company does not believe that any liability that may result from these proceedings will have a material adverse effect on its consolidated financial statements. During 2020, the Company received $7.0 million in connection with a class action settlement specific to credit card fees, which were included in Direct Operating expenses in the Consolidated Statements of Operations. | |
Seaport Global Acquisition Corp | |||
Commitments & Contingencies | Note 8 — Commitments & Contingencies Registration Rights Pursuant to a registration rights agreement entered into on November 27, 2020, the holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of the Working Capital Loans (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to our Class A common stock). The holders of the majority of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Underwriters Agreement The underwriter is entitled to a deferred fee of $0.35 per Unit, or $5,031,250 in the aggregate. The deferred fee will become payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement. | Note 6 — Commitments and Contingencies Registration Rights Pursuant to a registration rights agreement entered into on November 27, 2020, the holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of the Working Capital Loans (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to our Class A common stock). The holders of the majority of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of an initial business combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Underwriting Agreement The underwriter is entitled to a deferred fee of $0.35 per Unit, or $5,031,250 in the aggregate. The deferred fee will become payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company completes an initial business combination, subject to the terms of the underwriting agreement. |
Stockholders' Equity_2
Stockholders' Equity | 5 Months Ended | 9 Months Ended |
Dec. 31, 2020 | Sep. 30, 2021 | |
Seaport Global Acquisition Corp | ||
Stockholders' Equity | Note 9 — Stock holders’ Equity Preferred Stock outstanding Class A Common Stock outstanding Class B Common Stock outstanding The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of the Business Combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like. In the case that additional shares of Class A common stock, or equity linked securities, are issued or deemed issued in excess of the amounts offered in the Initial Public Offering and related to the closing of a Business Combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon the completion of the Initial Public Offering plus all shares of Class A common stock and equity linked securities issued or deemed issued in connection with a Business Combination (excluding any shares or equity linked securities issued, or to be issued, to any seller in a Business Combination, and any private placement-equivalent warrants issued to the Sponsor or its affiliates upon conversion of loans made to the Company). The Company may issue additional common stock or preferred stock to complete its Business Combination or under an employee incentive plan after completion of its Business Combination. | Note 7 — Stockholders’ Equity Preferred Stock Class A Common Stock Class B Common Stock The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of an initial business combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like. In the case that additional shares of Class A common stock, or equity linked securities, are issued or deemed issued in excess of the amounts offered in the Initial Public Offering and related to the closing of an initial business combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon the completion of the Initial Public Offering plus all shares of Class A common stock and equity linked securities issued or deemed issued in connection with an initial business combination (excluding any shares or equity linked securities issued, or to be issued, to any seller in an initial business combination, and any private placement-equivalent warrants issued to the Sponsor or its affiliates upon conversion of loans made to the Company). The Company may issue additional common stock or preferred stock to complete its initial business combination or under an employee incentive plan after completion of its initial business combination. |
Warrant Liability
Warrant Liability | 5 Months Ended | 9 Months Ended |
Dec. 31, 2020 | Sep. 30, 2021 | |
Seaport Global Acquisition Corp | ||
Warrant Liability | Note 10 — Warrant Liability The Public Warrants will become exercisable on the later of (a) 30 days after the consummation of a Business Combination or (b) 12 months from the effective date of the registration statement relating to the Initial Public Offering. No Public Warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the common shares issuable upon exercise of the Public Warrants and a current prospectus relating to such common shares. Notwithstanding the foregoing, if a registration statement covering the Class A common shares issuable upon the exercise of the Public Warrants is not effective within 60 days from the consummation of a Business Combination, the holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise the Public Warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. If an exemption from registration is not available, holders will not be able to exercise their Public Warrants on a cashless basis. The Public Warrants will expire five years from the consummation of a Business Combination or earlier upon redemption or liquidation. The Company may call the Public Warrants for redemption (excluding the Private Placement Warrants), 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 to each Public Warrant holder, ● if, and only if, the last sale price of the Company’s Class A common stock equals or exceeds $18.00 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 sends the notice of redemption to the warrant holders. The exercise price and number of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Company’s initial Business Combination on the date of the consummation of such initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A common shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and will be 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. | Note 8 - Warrant Liabilities Public Warrants Each whole warrant will entitle the holder to purchase one share of Class A common stock at a price of $11.50 per stock, subject to adjustment. The Public Warrants will become exercisable on the later of (a) 30 days after the consummation of an initial business combination or (b) 12 months from the effective date of the registration statement relating to the Initial Public Offering. No Public Warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the common shares issuable upon exercise of the Public Warrants and a current prospectus relating to such common shares. Notwithstanding the foregoing, if a registration statement covering the Class A common shares issuable upon the exercise of the Public Warrants is not effective within 60 days from the consummation of an initial business combination, the holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise the Public Warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. If an exemption from registration is not available, holders will not be able to exercise their Public Warrants on a cashless basis. The Public Warrants will expire five years from the consummation of an initial business combination or earlier upon redemption or liquidation. The Company may call the warrants for redemption (except the Private Placement Warrants): ● in whole and not in part; ● at a price of $0.01 per warrant; ● upon a minimum of 30 days ’ prior written notice of redemption to each warrant holder; and ● if, and only if, the last sale price of the Company’s Class A common stock equals or exceeds $18.00 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 sends the notice of redemption to the warrant holders. The exercise price and number of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuance of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. If the Company is unable to complete an initial business combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial business combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Company’s initial business combination on the date of the consummation of such initial business combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial business combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the Newly Issued Price. Private Placement Warrants The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the Class A common shares issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30 days after the completion of an initial business combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and will be 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. |
Income Tax
Income Tax | 5 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | |
Income Tax | Note 11: Income Taxes The Company’s effective tax rate was 25.0% and 25.6% for the nine months ended September 30, 2021 and 2020, respectively. The difference between the Company’s effective tax rate and the federal statutory tax rate for the nine months ended September 30, 2021 is primarily due to the effect of state taxes and the federal research and development credit. Tax Years Open for Examination As of September 30, 2021, there are no open examinations by the U.S. federal taxing authority. As of September 30, 2021, for the Company’s major jurisdictions, the years 2017 through 2020 were open for examination by the U.S federal and most state tax authorities. | Note 12: Income Taxes On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law in response to the COVID-19 pandemic. The impact of the CARES Act was not material to the Company’s financial statements. In further response to the COVID-19 pandemic, on December 27, 2020, the Consolidations Appropriations Act, 2021 (“CAA”) was signed into law. The Company does not expect the CAA to have a material impact on its financial statements. Components of Income Taxes The Company and its consolidated subsidiaries are included as part of the U.S. consolidated income tax group Aspen Parent, Inc. for the periods presented. The income tax benefit and provisions, income tax payables, related tax payments and deferred tax balances have been prepared as if the Company operated as a standalone taxpayer. The components of (loss) income before income taxes were as follows: Year Ended December 31, Dollars in thousands 2020 2019 2018 U.S. operations $ (94,707) $ (14,823) $ 80,908 Components of Income Tax (Benefit) Expense The components of income tax (benefit) expense were as follows: Year Ended December 31, Dollars in thousands 2020 2019 2018 Current: U.S. Federal $ (491) $ 11,653 $ 27,741 State and local 711 4,209 7,955 Total current $ 220 $ 15,862 $ 35,696 Deferred: U.S. Federal (21,489) (19,467) (14,496) State and local (3,935) (3,651) (1,745) Total deferred $ (25,424) $ (23,118) $ (16,241) Total income tax (benefit) expense $ (25,204) $ (7,256) $ 19,455 Rate Reconciliation The income tax expense differs from the amount that would result by applying the U.S. statutory rate to income before income taxes as follows: Year Ended December 31, 2020 2019 2018 U.S Federal tax expense at statutory rates 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit 3.8 % 8.7 % 4.6 % Valuation allowance (0.2) % (6.8) % 0.1 % Federal research & development credit 2.0 % 7.4 % (0.7) % Uncertain tax benefit on federal research and development credit (0.5) % (3.7) % 0.6 % Release of uncertain tax benefits 0.2 % 22.1 % (2.2) % Other 0.4 % 0.2 % 0.7 % Effective tax rate 26.6 % 48.9 % 24.0 % Unrecognized Tax Benefits The aggregate changes in the balance of unrecognized tax benefits were as follows: Year Ended December 31, Dollars in thousands 2020 2019 2018 Balance, beginning of the period $ 1,935 $ 4,558 $ 5,894 Additions based on tax positions related to the current year 250 150 150 Additions for tax positions related to prior years 215 509 321 Deductions for tax positions related to prior years (187) (1,945) (1,807) Deductions for tax positions effectively settled — (1,337) — Balance, end of period $ 2,213 $ 1,935 $ 4,558 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, $0.3 million and $0.3 million for the years ended December 31, 2020, 2019 and 2018, respectively. At December 31, 2020, 2019 and 2018, $2.2 million, $1.9 million and $4.6 million, respectively, of unrecognized tax benefits would favorably impact the effective tax rate if recognized. Tax Years Open for Examination As of December 31, 2020, there are no open examinations by the U.S. federal taxing authority. As of December 31, 2020, the tax years 2017 through 2018 are still in process for examination by the State of Illinois. In February of 2020, the State of Wisconsin initiated an audit of the Company and its affiliates for the calendar years ending December 31, 2016 through December 31, 2018. In July of 2020, the State of California contacted the Company to initiate an audit of the Company and its affiliates for the calendar years ending December 31, 2017 through December 31, 2018. At this time, an estimate of the range of reasonably possible adjustments cannot be determined for the open audits. Deferred Income Taxes Deferred income tax assets and liabilities reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the carrying amounts used for income tax purposes. Future tax benefits for net operating loss and tax credit carryforwards are also recognized to the extent that realization of such benefits is more likely than not. Deferred tax assets, deferred tax liabilities and tax credit carryforwards are measured using enacted tax rates that are expected to apply to taxable income in the years in which the Company expects to recognize those temporary differences and credits. In determining the Company’s tax provisions, management determined the deferred tax assets and liabilities for each separate tax jurisdiction and considered a number of factors including the positive and negative evidence regarding the realization of its deferred tax assets to determine whether a valuation allowance should be recognized with respect to its deferred tax assets. Significant components of the Company’s deferred tax assets and liabilities and in the valuation allowance were as follows: December 31, 2020 2019 Deferred tax assets: Credit carryforwards $ 1,117 $ 1,124 Accrued liabilities and allowances 1,388 614 Compensation accruals 2,750 2,966 Asset retirement obligation liability 1,994 2,257 Deferred revenue 2,237 2,682 Hedge liability 1,200 1,315 Other 253 46 Gross deferred tax assets 10,939 11,004 Less: Valuation Allowance (1,039) (851) Total deferred tax assets $ 9,900 $ 10,153 Deferred tax liabilities: Property and equipment (14,172) (23,250) Product costs (3,905) (7,107) Prepaid expenses (284) (241) Intangible assets (30,965) (44,819) Goodwill (1,745) (1,331) Total deferred tax liabilities $ (51,071) $ (76,748) Net deferred tax liabilities $ (41,171) $ (66,595) Change in Valuation Allowance During 2020, the Company increased its valuation allowance against certain of its deferred tax assets to reduce them to the value more likely than not to be realized with a corresponding non-cash charge of $0.2 million to its income tax provision. The valuation allowance balance of $1.0 $0.9 State Tax Credits and Expiration Periods The following table shows the Company’s state tax credits before valuation allowances and related expiration periods. December 31, 2020 Dollars in thousands Amount Expiration State tax credits: Illinois state tax credits $ 1,117 2021 – 2025 Total U.S. state tax credits $ 1,117 | |
Seaport Global Acquisition Corp | |||
Income Tax | Note 11 — Income Tax The Company’s net deferred tax assets are as follows: December 31, 2020 Deferred tax asset Organizational costs/Startup expenses $ 21,692 Federal Net Operating loss 17,089 Total deferred tax asset 38,781 Valuation allowance (38,781) Deferred tax asset, net of allowance $ — The income tax provision consists of the following: December 31, 2020 Federal Current $ — Deferred (38,781) State Current — Deferred — Change in valuation allowance 38,781 Income tax provision $ — As of December 31, 2020, the Company had $81,375 of U.S. federal net operating loss carryovers available to offset future taxable income which do not expire. In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the period from July 24, 2020 (inception) through December 31, 2020, the change in the valuation allowance was $38,780 A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2020 is as follows: Statutory federal income tax rate 21.0 % State taxes, net of federal tax benefit 0.0 % Permanent Book/Tax Differences (22.9) % Change in valuation allowance 1.9 % Income tax provision — % The Company files income tax returns in the U.S. federal jurisdiction in various state and local jurisdictions and is subject to examination by the various taxing authorities. |
Fair Value Measurements_2
Fair Value Measurements | 5 Months Ended | 9 Months Ended |
Dec. 31, 2020 | Sep. 30, 2021 | |
Seaport Global Acquisition Corp | ||
Fair Value Measurements | Note 12 — Fair Value Measurements FASB ASC Topic 820 “Fair Value Measurements and Disclosures” (“ASC 820”) defines fair value, the methods used to measure fair value and the expanded disclosures about fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between the buyer and the seller at the measurement date. In determining fair value, the valuation techniques consistent with the market approach, income approach and cost approach shall be used to measure fair value. ASC 820 establishes a fair value hierarchy for inputs, which represent the assumptions used by the buyer and seller in pricing the asset or liability. These inputs are further defined as observable and unobservable inputs. Observable inputs are those that buyer and seller would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about the inputs that the buyer and seller would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy is categorized into three levels based on the inputs as follows: Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment. Level 2 — Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means. Level 3 — Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The fair value of the Company’s certain assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the condensed balance sheet. The fair values of cash and cash equivalents, prepaid assets, accounts payable and accrued expenses, due to related parties are estimated to approximate the carrying values as of December 31, 2020 due to the short maturities of such instruments. The following table presents information about the Company’s assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2020 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. December 31, 2020 Level 1 Level 2 Level 3 Assets: U.S. Money Market held in Trust Account $ 281 $ 281 $ — $ — U.S. Treasury Securities held in Trust Account 145,193,921 145,193,921 — — $ 145,194,202 $ 145,194,202 $ — $ — The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis at December 31, 2020 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value. December 31, Description Level 2020 Liabilities: Warrant Liability – Public Warrants 1 $ 10,975,313 Warrant Liability – Private Placement Warrants 3 $ 6,347,438 Total Warrant Liability $ 17,322,751 The Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within the warrant liability on our balance sheet. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of the warrant liabilities in the statement of operations. Initial Measurement The Company established the initial fair value for the Public Warrants and Private Placement Warrants on December 2, 2020, the date of the Company’s Initial Public Offering, using a Monte Carlo simulation model. The Company allocated the proceeds received from (i) the sale of Units (which is inclusive of one Class A common stock and three-quarters of one Public Warrant), (ii) the sale of Private Placement Warrants, and (iii) the issuance of shares of Class B common stock, first to the Warrants based on their fair values as determined at initial measurement, with the remaining proceeds allocated to Class A common stock subject to possible redemption, Class A common stock and Class B common stock based on their relative fair values at the initial measurement date. The Warrants were classified as Level 3 at the initial measurement date due to the use of unobservable inputs. The key inputs into the Monte Carlo simulation model for the Public Warrants and Private Placement Warrants were as follows at initial measurement: December 2, 2020 Input (Initial Measurement) Risk-free interest rate 0.56 % Expected term (years) 6.04 Expected volatility 24.2 % Stock price $ 9.052 As of December 2, 2020, the Public Warrants and Private Placement Warrants were determined to be $1.34 and $1.38 per warrant for aggregate values of approximately $14.4 million and $8.4 million, respectively. Subsequent Measurement The Warrants are measured at fair value on a recurring basis. The subsequent measurement of the Public Warrants as of December 31, 2020 is classified as Level 1 due to the use of an observable market quote in an active market and the subsequent measurement of the Private Placement Warrants as December 31, 2020 is classified Level 3 due to the use of unobservable inputs. As of December 31, 2020, the Public Warrants and Private Placement Warrants were determined to be $1.02 and $1.05 per warrant for aggregate values of approximately $11.0 million and $6.3 million, respectively. The following table presents the changes in the fair value of warrant liabilities: Private Warrant Placement Public Liabilities Fair value as of December 2, 2020 $ — $ — $ — Initial measurement on December 2, 2020 8,360,188 14,403,750 22,763,938 Change in valuation inputs or other assumptions (2,012,750) (3,428,437) (5,441,188) Fair value as of December 31, 2020 $ 6,347,438 $ 10,975,313 $ 17,322,751 Level 3 financial liabilities consist of the Private Placement Warrant liability for which there is no current market for these securities such that the determination of fair value requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate. | Note 9 - Fair Value Measurements The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment. Level 2 — Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means. Level 3 — Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2021 and at December 31, 2021, and indicate the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: Quoted Significant Significant Prices In Other Other Active Observable Unobservable September 30, Markets Inputs Inputs 2021 (Level 1) (Level 2) (Level 3) Assets: U.S. Money Market held in Trust Account $ — $ — $ — $ — U.S Treasury Securities held in Trust Account 145,218,068 145,218,068 — — $ 145,218,068 $ 145,218,068 $ — $ — Liabilities: Public Warrants Liability $ 10,134,375 $ 10,134,375 $ — $ — Private Warrants Liability 6,332,732 — — 6,332,732 $ 16,467,107 $ 10,134,375 $ — $ 6,332,732 Quoted Significant Significant Prices In Other Other Active Observable Unobservable December 31, Markets Inputs Inputs 2021 (Level 1) (Level 2) (Level 3) Assets: U.S. Money Market held in Trust Account $ 281 $ 281 $ — $ — U.S Treasury Securities held in Trust Account 145,193,921 145,193,921 — — $ 145,194,202 $ 145,194,202 $ — $ — Liabilities: Public Warrants Liability $ 10,975,313 $ 10,975,313 $ — $ — Private Warrants Liability 6,347,438 — — 6,347,438 $ 17,322,751 $ 10,975,313 $ — $ 6,347,438 The Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on the Condensed Balance Sheet. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the Condensed Statement of Operations. The Company established the initial fair value of the Public Warrants and Private Warrants on December 2, 2020, the date of the Company’s Initial Public Offering, and for the Private Warrants as of December 31, 2020 and September 30, 2021, using a Monte Carlo simulation model. For subsequent measurement of the Public Warrants as of December 31, 2020 and September 30, 2021, the Company used observable market quotes for the warrants. The subsequent measurement of the Public Warrants as of December 31, 2020 and September 30, 2021 is classified as Level 1 due to the use of an observable market quotes in an active market. The Private Warrants were classified as Level 3 at the initial measurement date and subsequent measurement dates due to the use of unobservable inputs. The key inputs into the Monte Carlo simulation used for the Private Warrants as of September 30, 2021 and December 31, 2020 were as follows: Inputs September 30, 2021 December 31, 2020 Risk-free interest rate 1.12 % 0.5 % Expected term remaining (years) 5.82 5.96 Expected volatility 14.4 % 16.2 % Stock price $ 10.060 $ 10.02 |
Subsequent Events_2
Subsequent Events | 5 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | |
Subsequent Events | Note 14: Subsequent Events On October 11, 2021, RAR entered into a consent to the Fifth Amendment to make certain additional changes to the Credit Agreement, which became effective upon consummation of the Business Combination, including extending the maturity date of the Senior Facilities to April, 2024, extending the PIK interest option until December 31, 2022 (subject to a minimum pro forma liquidity), as well as commencing an excess cash flow sweep on March 31, 2022 subject to funds on hand being greater than $20.0 million. In connection with the proposed business combination agreement, on October 12, 2021, Seaport Global Acquisition Corp. entered into backstop subscription agreements (the “Backstop Agreements”) with certain subscribers (the “Backstop Subscribers”), including affiliates of funds managed by affiliates of Apollo Global Management, Inc. and Seaport Global SPAC, LLC, pursuant to which the Backstop Subscribers agreed, subject to certain conditions in the Backstop Agreements, to subscribe for and purchase up to an aggregate of 3,564,356 shares of Seaport’s Class A common stock, par value $0.0001 per share, in the event that more than 10,810,644 public shares of Seaport Class A common stock are submitted for redemption in connection with the proposed Business Combination Agreement, for a purchase price of $10.10 per share. On October 22, 2021, in accordance with the Business Combination Agreement, Redbox and Seaport closed the Business Combination. The Business Combination will be accounted for as a reverse recapitalization in accordance with US GAAP. Under the guidance in ASC 805, Business Combinations, Seaport is expected to be treated as the “acquired” company for financial reporting purposes. Cash received by the Company from the Business Combination totaled $27.0 million, net of $50.0 million of proceeds used to pay down outstanding indebtedness under the Company’s Senior Facilities and transaction costs of The Company has evaluated subsequent events through November 22, 2021, the date on which the financial statements were issued. | Note 15: Subsequent Events On January 15, 2021, the Company entered into a two-year license agreement with Sony Pictures Home Entertainment effective January 1, 2021. The agreement replaces the licensing agreement the Company had in place with Sony that expired on December 31, 2020. On January 29, 2021, the Company entered into the Fourth Amendment to the Credit Agreement. The Fourth Amendment provided for, among other things, (i) deferral of principal amortization payments until the maturity date, (ii) extension of the maturity date to April 2023, (iii) at the Company’s election, subject to certain liquidity thresholds, a paid in-kind (“PIK”) interest option, and (iv) waiver of all financial covenant requirements. In addition, provided under the Fourth Amendment the Company incurred an additional principal amount under a Term B-2 Loan in an aggregate principal amount of $25.0 million, which was provided by New Outerwall. New Outerwall indirectly owns 100% of the equity of the Company and is therefore a related party of the Company. The proceeds from the loan will be used for general corporate purposes. The Term B-2 loan ranks pari passu basis with all obligations pursuant to the Credit Agreement. Pursuant to the Fourth Amendment, interest is payable on the Senior Facilities and the Term B-2 loan entirely in cash or could be paid by increasing the principal amount of the Senior Facilities and Term B-2 loans (PIK interest), or through a combination of cash and PIK interest. Cash interest on the Senior Facilities and Term B-2 loan accrues at a rate of LIBOR plus 7.25% per annum. PIK interest on the Senior Facilities and Term B-2 loan accrues at a rate of LIBOR plus 8.25% per annum. On March 26, 2021, the Company entered into an asset purchase agreement with Sony DADC US Inc. (the “Seller”) to purchase certain assets and assume certain liabilities of the Seller’s business of providing video content distribution and other related services. The net purchase price, based on the asset value as of the closing date is not expected to be material. The closing of the transaction is subject to certain closing conditions and is expected to occur in the second half of 2021. On May 16, 2021, the Company became a party to a business combination agreement with Seaport Global Acquisition Corp. (a publicly traded special purpose acquisition company). The proposed merger is expected to be completed in the second half of 2021, subject to, among other things, approval of the respective party’s shareholders, satisfaction of the conditions stated in the merger agreement and other customary closing conditions. The result of the transaction will transform the Company into a publicly traded entity on the NASDAQ stock exchange. There is no assurance that the transaction will be consummated. In connection with the planned merger, on May 16, 2021, the Company entered into the Fifth Amendment to its Credit Agreement. The Fifth Amendment, which becomes effective upon consummation of the merger, provides consent to the planned merger and, among other things, extends, the Senior Facilities maturity date to October 2023 and eliminates the PIK Interest option after the consummation of the merger. In addition, among other things, concurrently with the consummation of the merger, i) $15.0 million of cash proceeds from the merger will be used to pay down outstanding borrowings under the Revolving Credit Facility and ii) a minimum of $35.0 of cash proceeds from the merger million plus the product of 0.60 times the Excess Cash Proceeds (as that term is defined in the Fifth Amendment) will be used to pay down outstanding borrowings under the Term B-1 Loans. In connection with the Company’s impending business combination and restructuring, on June 29, 2021, the Company and New Outerwall determined that it was no longer probable that the income tax payable balances of the Company to New Outerwall would be paid. As such, the Company recorded an entry to reduce Accrued and other current liabilities $15.8 million and increase Additional paid-in capital $15.8 million. The Company has evaluated subsequent events through July 7, 2021, the date on which the financial statements were issued. | |
Seaport Global Acquisition Corp | |||
Subsequent Events | Note 13 — Subsequent Events On October 22, 2021, subsequent to the fiscal quarter ended March 31, 2021, Seaport Global Acquisition Corp., our predecessor and a Delaware corporation (“SGAC”), consummated the previously announced business combination pursuant to the business combination agreement entered into as of May 16, 2021 (as amended, the “Business Combination Agreement”), by and among SGAC, Seaport Merger Sub LLC, a Delaware limited liability company and wholly-owned subsidiary of SGAC (“Merger Sub”), Redwood Holdco, LP, a Delaware limited partnership (“Parent”), and Redwood Intermediate, LLC, a Delaware limited liability company (“Redbox”). Pursuant to the Business Combination Agreement, SGAC acquired certain equity interests of Redbox from Parent, its sole member, by way of Merger Sub merging with and into Redbox, and Redbox becoming a direct subsidiary of SGAC as a result thereof (the “Business Combination”). On October 20, 2021, SGAC held a special meeting of stockholders (the “Special Meeting”), at which the SGAC stockholders considered and adopted, among other matters, a proposal to approve the Business Combination, including (a) adopting the Business Combination Agreement and (b) approving the other transactions contemplated by the Business Combination Agreement and related agreements described in the Proxy Statement. Pursuant to the terms and subject to the conditions set forth in the Business Combination Agreement, on October 22, 2021 (the “Closing Date”), the Business Combination was consummated (the “Closing”). The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. | Note 10 — Subsequent Events On July 8, 2021, the Company filed a preliminary proxy statement/prospectus with the SEC related to the Business Combination Agreement. On October 22, 2021, the Company completed the Business Combination and changed its name to Redbox Entertainment Inc. In conjunction with the Business Combination, the holders of 12,346,223 shares of SGAC’s Class A common stock sold in the Initial Public Offering exercised their right to redeem those shares for cash at a price of approximately $10.10 per share, for an aggregate of approximately $124.7 million, which redemption occurred concurrent with the consummation of the Business Combination. The Company also completed the sale of 5,000,000 shares of Class A common stock for $50.0 million in the PIPE Investment described in Note 1. In accordance with ASC Topic 855 Subsequent Events, no other events require adjustment or disclosure. |
Significant Accounting Polici_8
Significant Accounting Policies (Policies) | 5 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | |
Fair Value Measurements | Fair Value of Financial Instruments Certain financial assets and liabilities are required to be carried at fair value. Fair value is the price that would be received to sell an asset, or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. In determining fair value, the Company utilizes market data or assumptions that it believes market participants would use in pricing the asset or liability, which would maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, including assumptions about risk and the risks inherent in the inputs to the valuation technique. In evaluating the fair value measurement techniques for recording certain financial assets and liabilities, there is a three-level valuation hierarchy under which financial assets and liabilities are designated. The determination of the applicable level within the hierarchy of a particular financial asset or liability depends on the inputs used in valuation as of the measurement date. Valuations based on observable or market-based inputs for identical asset or liabilities (Level 1 measurement) are given the highest level of priority, whereas valuations based on unobservable or internally derived inputs (Level 3 measurement) are given the lowest level of priority. The three levels of the fair value hierarchy are defined as follows: ● Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities; ● Level 2: Inputs other than Level 1 inputs that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or market-corroborated inputs; or ● Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying amounts for the Company’s cash equivalents approximate fair value because of the short-term nature of these instruments. The fair value of the Company’s long-term debt approximates its carrying amount, which is presented net of unamortized deferred financing costs. | Fair Value of Financial Instruments Certain financial assets and liabilities are required to be carried at fair value. Fair value is the price that would be received to sell an asset, or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. In determining fair value, the Company utilizes market data or assumptions that it believes market participants would use in pricing the asset or liability, which would maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, including assumptions about risk and the risks inherent in the inputs to the valuation technique. In evaluating the fair value measurement techniques for recording certain financial assets and liabilities, there is a three-level valuation hierarchy under which financial assets and liabilities are designated. The determination of the applicable level within the hierarchy of a particular financial asset or liability depends on the inputs used in valuation as of the measurement date. Valuations based on observable or market-based inputs for identical asset or liabilities (Level 1 measurement) are given the highest level of priority, whereas valuations based on unobservable or internally derived inputs (Level 3 measurement) are given the lowest level of priority. The three levels of the fair value hierarchy are defined as follows: ● Level 1 : Observable inputs such as quoted prices in active markets for identical assets or liabilities; ● Level 2 : Inputs other than Level 1 inputs that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or market-corroborated inputs; or ● Level 3 : Unobservable inputs that reflect the reporting entity’s own assumptions. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying amounts for the Company’s cash equivalents approximate fair value because of the short-term nature of these instruments. The fair value of the Company’s long-term debt approximates its carrying amount, which is presented net of unamortized deferred financing costs. | |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, management determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under the tax law, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions in accordance with ASC 740, Income Taxes, on the basis of a two-step process in which (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, it will recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statements of operations. Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheet. | ||
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Guidance Recently Adopted: In August 2018, the FASB issued ASU 2018-05, Intangibles-Goodwill and Other-Internal-Use-Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. In March 2019, the FASB issued ASU 2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials (Subtopic 926-20) Accounting Guidance Not Yet Adopted: In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) | Recent Accounting Pronouncements Accounting Guidance Not Yet Adopted: In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (ASU 2020-04), which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuance of LIBOR or another referenced rate. ASU 2020-04 is effective for fiscal years beginning after December 31, 2022. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) to simplify the accounting for income taxes. This guidance removes certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. The guidance also clarifies and simplifies other areas of ASC 740. This standard is effective for private companies for fiscal years beginning after December 15, 2021. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use-Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. The ASU requires a customer in a cloud computing arrangement (i.e., hosting arrangement) that is a service contract to follow the internal-use software guidance in ASC 350-40 to determine whether to capitalize certain implementation costs or expense them as incurred. For private companies, the guidance is effective for reporting periods beginning after December 15, 2020. The Company is currently evaluating the impact of adopting this ASU, and does not expect a material impact on its consolidated financial statements and related disclosures. In March 2019, the FASB issued ASU 2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials (Subtopic 926-20), in order to align the accounting for production costs of an episodic television series with the accounting for production costs of films by removing the content distinction for capitalization. ASU 2019-02 also requires that an entity reassess estimates of the use of a film in a film group and account for any changes prospectively. In addition, 2019-02 requires that an entity test films and license agreements for impairment at a film group level when the film or license agreements are predominantly monetized with other films and license agreements. For private companies, the guidance is effective for reporting periods beginning after December 15, 2020. The Company is currently evaluating the impact of adopting this ASU, and does not expect a material impact on its consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The ASU requires lessees, among other things, to recognize lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous authoritative guidance. This update also introduces new disclosure requirements for leasing arrangements. For private companies, the guidance is effective for reporting periods beginning after December 15, 2021, with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326). The ASU provides new guidance regarding measurement and recognition of credit impairment for certain financial assets. Such guidance will impact how the Company determines its allowance for estimated uncollectible receivables. For private companies, the guidance is effective for reporting periods beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures. | |
Seaport Global Acquisition Corp | |||
Basis of Presentation | Basis of Presentation The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the SEC. | Basis of Presentation The accompanying unaudited condensed financial statements are presented in U.S. dollars in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for financial information and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP. In the opinion of management, the unaudited condensed financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2020 as filed with the SEC on November 22, 2021 and included elsewhere in this prospectus, which contains the audited financial statements and notes thereto. The interim results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future interim periods. | |
Emerging Growth Company Status | Emerging Growth Company Status The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. | Emerging Growth Company Status The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. | |
Use of Estimates | Use of Estimates The preparation of the financial statement 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 statement. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statement, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. | Use of Estimates The preparation of the financial statement 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 statement. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statement, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. | |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2020. | Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of September 30, 2021 and December 31, 2020. | |
Cash and Securities held in Trust Account | Cash and Securities held in Trust Account At December 31, 2020, the assets held in the Trust Account were substantially held in U.S. Treasury Bills. During the period from July 24, 2020 (Inception) to December 31, 2020, the Company did not withdraw any of interest income from the Trust Account to pay its tax obligations. The Company classifies its United States Treasury securities as held-to-maturity in accordance with FASB ASC Topic 320 “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts. A decline in the market value of held-to-maturity securities below cost that is deemed to be other than temporary, results in an impairment that reduces the carrying costs to such securities’ fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether an impairment is other than temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and the duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the general market condition in the geographic area or industry the investee operates in. Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest method. Such amortization and accretion is included in the “interest income” line item in the statements of operations. Interest income is recognized when earned. | Cash and Securities held in Trust Account At December 31, 2020, and September 30, 2021, the assets held in the Trust Account were held in U.S. Treasury securities with a maturity of 185 days or less. The Company classifies its United States Treasury securities as held-to-maturity in accordance with FASB ASC Topic 320 “Investments - Debt and Equity Securities.” Held-to-maturity securities are those securities which the Company has the ability and intent to hold until maturity. Held-to-maturity treasury securities are recorded at amortized cost and adjusted for the amortization or accretion of premiums or discounts. A decline in the market value of held-to-maturity securities below cost that is deemed to be other than temporary, results in an impairment that reduces the carrying costs to such securities’ fair value. The impairment is charged to earnings and a new cost basis for the security is established. To determine whether an impairment is other than temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and the duration of the impairment, changes in value subsequent to year-end, forecasted performance of the investee, and the general market condition in the geographic area or industry the investee operates in. Premiums and discounts are amortized or accreted over the life of the related held-to-maturity security as an adjustment to yield using the effective-interest method. Such amortization and accretion are included in the “interest income” line item in the statements of operations. Interest income is recognized when earned. | |
Warrant Liabilities | Warrant Liability The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company's own common shares and whether the warrant holders could potentially require "net cash settlement" in a circumstance outside of the Company's control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. | Warrant Liabilities The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. | |
Class A Common Stock Subject to Possible Redemption | Class A Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet. | Class A Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s unaudited condensed balance sheet. | |
Offering Costs | Offering Costs The Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A- “Expenses of Offering”. Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the Public Offering . Offering costs totaled | ||
Fair Value of Financial Instruments | Fair value of financial instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature. | Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying balance sheet, primarily due to their short-term nature. | |
Income Taxes | Income Taxes The Company accounts for income taxes under ASC 740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company has identified the United States as its only “major” tax jurisdiction. The Company may be subject to potential examination by federal and state taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. | Income Taxes The Company accounts for income taxes under ASC 740 Income Taxes (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized. ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2021 or December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company has identified the United States as its only “major” tax jurisdiction. The Company may be subject to potential examination by federal and state taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months. | |
Net Income (Loss) Per Common Share | Net Income Per Share of Common Stock Net income per common share is computed by dividing net income by the weighted average number of common stock outstanding for the period. The Company applies the two-class method in calculating earnings per share. Shares of common stock subject to possible redemption at December 31, 2020, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic net income per common share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of warrants sold in the Initial Public Offering and the private placement to purchase an aggregate 6,062,500 shares of common stock in the calculation of diluted income per share, since the exercise of the warrants into shares of common stock is contingent upon the occurrence of future events. As a result, diluted net loss per common share is the same as basic net income per common share for the period presented. Below is a reconciliation of net income per common share: For the period ended December 31, 2020 Net Income per share of Class A Common Stock Net income $ 2,097,430 Less: Allocation of loss to Class B common stock (1,215,880) Adjusted net income $ 881,550 Weighted average shares outstanding of Class A common stock 2,605,469 Basic and diluted net income per share, Class A common stock $ 0.34 Net Income per share for Class B common stock Net income $ 2,097,430 Less: Allocation of loss to Class A common stock (881,550) Adjusted net income $ 1,215,880 Weighted average shares outstanding of Class B common stock (1) 3,593,570 Basic and diluted net income per share, Class B common stock $ 0.34 (1) Calculated from date of issuance (July 24, 2020) through December 31, 2020 | Net Income (Loss) Per Common Share Net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding during the period. The Company applies the two-class method in calculating earnings per share. Shares of common stock subject to possible redemption at September 30, 2021 and December 31, 2020, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic net income per common share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of warrants sold in the Initial Public Offering and the private placement to purchase an aggregate 16,843,750 shares of common stock in the calculation of diluted loss per share, since the exercise of the warrants into shares of common stock is contingent upon the occurrence of future events. As a result, diluted net income (loss) per common share is the same as basic net income (loss) per common share for the period presented. Below is a reconciliation of net income (loss) per common share: Three Months Nine Months Ended Ended September 30, September 30, 2021 2021 Net Loss per share for Class A common stock: Net loss $ (1,843,655) $ (536,769) Less: Allocation of loss to Class B common stock (368,731) (107,354) Adjusted net loss $ (1,474,924) $ (429,415) Weighted average shares outstanding of Class A common stock 14,375,000 14,375,000 Basic and diluted net loss per share, Class A common stock $ (0.10) $ (0.03) Net Loss per share for Class B common stock: Net loss $ (1,843,655) $ (536,769) Less: Allocation of loss to Class A common stock (1,474,924) (429,415) Adjusted net loss $ (368,731) $ (107,354) Weighted average shares outstanding of Class B common stock 3,593,750 3,593,750 Basic and diluted net loss per share, Class B common stock $ (0.10) $ (0.03) | |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution, which, at times may exceed the Federal depository insurance coverage of $250,000. At December 31, 2020, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. | |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies accounting for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions that are required for equity-linked contracts to qualify for scope exception, and it simplifies the diluted earnings per share calculation in certain areas. The Company adopted ASU 2020-06 on January 1, 2021. Adoption of the ASU did not impact the Company’s financial position, results of operations or cash flows. | ||
Recent Accounting Pronouncements | Recent Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements. | Recent Accounting Pronouncements Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements. |
Restatement of Previously Iss_2
Restatement of Previously Issued Financial Statements (Tables) | 5 Months Ended |
Dec. 31, 2020 | |
Seaport Global Acquisition Corp | |
Accounting Standards Update and Change in Accounting Principle [Table Text Block] | As As As Restated Restated Previously (First (Second Reported Adjustements (Amendment) Adjustments (Amendment) Balance Sheet as of December 2, 2020 Warrant liability $ — $ 22,763,938 $ 22,763,938 $ — $ 22,763,938 Total liabilities 5,259,504 22,763,938 28,023,442 — 28,023,442 Class A common stock subject to possible redemption 136,471,644 (22,763,938) 113,707,706 31,479,794 145,187,500 Class A common stock 86 225 311 (311) 0 Additional paid-in capital 5,003,786 3,158,862 8,162,648 (8,162,648) — Accumulated deficit (4,225) (3,159,088) (3,163,313) (23,316,835) (26,480,148) Total Stockholders’ Equity $ 5,000,006 $ — $ 5,000,006 $ — $ 5,000,006 Number of shares subject to redemption 13,512,044 (2,253,855) 11,258,189 3,116,811 14,375,000 Balance Sheet as of December 31, 2020 Warrant liability $ — $ 17,322,751 $ 17,322,751 $ — $ 17,322,751 Total liabilities 5,160,094 17,322,751 22,482,845 — 22,482,845 Class A common stock subject to possible redemption 136,291,206 (17,322,751) 118,968,455 26,225,747 145,194,202 Class A common stock 88 172 260 (260) 0 Additional paid-in capital 5,184,223 (2,282,271) 2,901,952 (2,901,952) — Retained earnings (Accumulated deficit) (184,669) 2,282,099 2,097,430 (23,323,535) (21,226,105) Total Stockholders’ Equity (Deficit) $ 5,000,001 $ — $ 5,000,001 $ (26,225,747) $ (21,225,746) Number of shares subject to redemption 13,494,179 (1,715,124) 11,779,055 2,595,945 14,375,000 Statement of Operations for the Period from July 24, 2020 (inception) through December 31, 2020 Change in fair value of warrant liability $ — $ 5,441,188 $ 5,441,188 $ — $ 5,441,188 Transaction costs — (861,400) (861,400) — (861,400) Compensation Expense – private placement warrants — (2,297,689) (2,297,689) — (2,297,689) Other income (expense), net 6,702 2,282,099 2,288,801 — 2,288,801 Net income (loss) (184,669) 2,282,099 2,097,430 — 2,097,430 Basic and diluted weighted average shares outstanding, Class A common stock subject to possible redemption 2,449,058 — 2,449,058 156,411 2,605,469 Basic and diluted net income per share, Class A common stock subject to possible redemption $ — $ — $ — $ 0.34 $ 0.34 Basic and diluted weighted average shares outstanding, non-redeemable common stock 3,750,161 408,511 4,158,672 — 4,158,672 Basic and diluted net income (loss) per share, non-redeemable common stock $ (0.05) $ 0.55 $ 0.50 $ (0.16) $ 0.34 Statement of Cash Flows for the Period July 24, 2020 (inception) through December 31, 2020 Cash Flows from Operating Activities: Net income (loss) $ (184,669) $ 2,282,099 $ 2,097,430 $ — $ 2,097,430 Adjustments to reconcile net loss to net cash used in operating activities: Change in fair value of warrant liability — (5,441,188) (5,441,188) — (5,441,188) Transaction costs — 861,400 861,400 — 861,400 Compensation Expense – private placement warrants — 2,297,689 2,297,689 — 2,297,689 |
Significant Accounting polici_9
Significant Accounting policies (Tables) | 5 Months Ended | 9 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | |
Schedule of reconciliation of net income per common share | The following is a calculation of EPS: Nine Months Ended September 30, Dollars in thousands, except per share amounts 2021 2020 Basic and Diluted EPS Net loss attributable to shareholders $ (92,938) $ (39,135) Weighted average outstanding 30,839,870 27,870,539 Basic and diluted common $ (3.01) $ (1.40) | The following is a calculation of EPS (in thousands, except share and per share amounts): Year ended December 31, 2020 2019 2018 Basic EPS Net (loss) income attributable to shareholders $ (69,503) $ (7,567) $ 61,453 Weighted average shares outstanding for basic earnings (loss) per share 27,906,742 27,779,339 27,623,415 Basic earnings (loss) per common shares attributable to shareholders $ (2.49) $ (0.27) $ 2.22 Diluted EPS Net (loss) income attributable to shareholders $ (69,503) $ (7,567) $ 61,453 Weighted average shares outstanding for basic earnings (loss) per share: 27,906,742 27,779,339 27,623,415 Dilutive effect of restricted stock units — — 573,993 Weighted average shares outstanding for diluted earnings (loss) per share 27,906,742 27,779,339 28,197,409 Diluted earnings (loss) per common share attributable to shareholders $ (2.49) $ (0.27) $ 2.18 | |
Seaport Global Acquisition Corp | |||
Schedule of reconciliation of net income per common share | For the period ended December 31, 2020 Net Income per share of Class A Common Stock Net income $ 2,097,430 Less: Allocation of loss to Class B common stock (1,215,880) Adjusted net income $ 881,550 Weighted average shares outstanding of Class A common stock 2,605,469 Basic and diluted net income per share, Class A common stock $ 0.34 Net Income per share for Class B common stock Net income $ 2,097,430 Less: Allocation of loss to Class A common stock (881,550) Adjusted net income $ 1,215,880 Weighted average shares outstanding of Class B common stock (1) 3,593,570 Basic and diluted net income per share, Class B common stock $ 0.34 (1) Calculated from date of issuance (July 24, 2020) through December 31, 2020 | Three Months Nine Months Ended Ended September 30, September 30, 2021 2021 Net Loss per share for Class A common stock: Net loss $ (1,843,655) $ (536,769) Less: Allocation of loss to Class B common stock (368,731) (107,354) Adjusted net loss $ (1,474,924) $ (429,415) Weighted average shares outstanding of Class A common stock 14,375,000 14,375,000 Basic and diluted net loss per share, Class A common stock $ (0.10) $ (0.03) Net Loss per share for Class B common stock: Net loss $ (1,843,655) $ (536,769) Less: Allocation of loss to Class A common stock (1,474,924) (429,415) Adjusted net loss $ (368,731) $ (107,354) Weighted average shares outstanding of Class B common stock 3,593,750 3,593,750 Basic and diluted net loss per share, Class B common stock $ (0.10) $ (0.03) |
Investment Held in Trust Acco_2
Investment Held in Trust Account (Tables) | 5 Months Ended |
Dec. 31, 2020 | |
Seaport Global Acquisition Corp | |
Schedule of carrying value, excluding gross unrealized holding loss and fair value of held to maturity securities | Carrying Fair Value Value as of Gross Gross as of December 31, Unrealized Unrealized December 31, 2020 Gains Losses 2020 U.S. Money Market $ 281 $ — $ — $ 281 U.S. Treasury Securities 145,193,921 — (2,174) 145,191,747 $ 145,194,202 $ — $ (2,174) $ 145,192,028 |
Income Tax (Tables)
Income Tax (Tables) | 5 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Dec. 31, 2020 | |
Schedule of net deferred tax assets | December 31, 2020 2019 Deferred tax assets: Credit carryforwards $ 1,117 $ 1,124 Accrued liabilities and allowances 1,388 614 Compensation accruals 2,750 2,966 Asset retirement obligation liability 1,994 2,257 Deferred revenue 2,237 2,682 Hedge liability 1,200 1,315 Other 253 46 Gross deferred tax assets 10,939 11,004 Less: Valuation Allowance (1,039) (851) Total deferred tax assets $ 9,900 $ 10,153 Deferred tax liabilities: Property and equipment (14,172) (23,250) Product costs (3,905) (7,107) Prepaid expenses (284) (241) Intangible assets (30,965) (44,819) Goodwill (1,745) (1,331) Total deferred tax liabilities $ (51,071) $ (76,748) Net deferred tax liabilities $ (41,171) $ (66,595) | |
Schedule of income tax provision | Year Ended December 31, Dollars in thousands 2020 2019 2018 Current: U.S. Federal $ (491) $ 11,653 $ 27,741 State and local 711 4,209 7,955 Total current $ 220 $ 15,862 $ 35,696 Deferred: U.S. Federal (21,489) (19,467) (14,496) State and local (3,935) (3,651) (1,745) Total deferred $ (25,424) $ (23,118) $ (16,241) Total income tax (benefit) expense $ (25,204) $ (7,256) $ 19,455 | |
Schedule of reconciliation of the federal income tax rate | Year Ended December 31, 2020 2019 2018 U.S Federal tax expense at statutory rates 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit 3.8 % 8.7 % 4.6 % Valuation allowance (0.2) % (6.8) % 0.1 % Federal research & development credit 2.0 % 7.4 % (0.7) % Uncertain tax benefit on federal research and development credit (0.5) % (3.7) % 0.6 % Release of uncertain tax benefits 0.2 % 22.1 % (2.2) % Other 0.4 % 0.2 % 0.7 % Effective tax rate 26.6 % 48.9 % 24.0 % | |
Seaport Global Acquisition Corp | ||
Schedule of net deferred tax assets | December 31, 2020 Deferred tax asset Organizational costs/Startup expenses $ 21,692 Federal Net Operating loss 17,089 Total deferred tax asset 38,781 Valuation allowance (38,781) Deferred tax asset, net of allowance $ — | |
Schedule of income tax provision | December 31, 2020 Federal Current $ — Deferred (38,781) State Current — Deferred — Change in valuation allowance 38,781 Income tax provision $ — | |
Schedule of reconciliation of the federal income tax rate | A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2020 is as follows: Statutory federal income tax rate 21.0 % State taxes, net of federal tax benefit 0.0 % Permanent Book/Tax Differences (22.9) % Change in valuation allowance 1.9 % Income tax provision — % |
Fair Value Measurements (Tabl_2
Fair Value Measurements (Tables) - Seaport Global Acquisition Corp | 5 Months Ended | 9 Months Ended |
Dec. 31, 2020 | Sep. 30, 2021 | |
Schedule of Company's assets and liabilities that are measured at fair value on a recurring basis | The following table presents information about the Company’s assets and liabilities that were measured at fair value on a recurring basis as of December 31, 2020 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. December 31, 2020 Level 1 Level 2 Level 3 Assets: U.S. Money Market held in Trust Account $ 281 $ 281 $ — $ — U.S. Treasury Securities held in Trust Account 145,193,921 145,193,921 — — $ 145,194,202 $ 145,194,202 $ — $ — The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis at December 31, 2020 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value. December 31, Description Level 2020 Liabilities: Warrant Liability – Public Warrants 1 $ 10,975,313 Warrant Liability – Private Placement Warrants 3 $ 6,347,438 Total Warrant Liability $ 17,322,751 | Quoted Significant Significant Prices In Other Other Active Observable Unobservable September 30, Markets Inputs Inputs 2021 (Level 1) (Level 2) (Level 3) Assets: U.S. Money Market held in Trust Account $ — $ — $ — $ — U.S Treasury Securities held in Trust Account 145,218,068 145,218,068 — — $ 145,218,068 $ 145,218,068 $ — $ — Liabilities: Public Warrants Liability $ 10,134,375 $ 10,134,375 $ — $ — Private Warrants Liability 6,332,732 — — 6,332,732 $ 16,467,107 $ 10,134,375 $ — $ 6,332,732 Quoted Significant Significant Prices In Other Other Active Observable Unobservable December 31, Markets Inputs Inputs 2021 (Level 1) (Level 2) (Level 3) Assets: U.S. Money Market held in Trust Account $ 281 $ 281 $ — $ — U.S Treasury Securities held in Trust Account 145,193,921 145,193,921 — — $ 145,194,202 $ 145,194,202 $ — $ — Liabilities: Public Warrants Liability $ 10,975,313 $ 10,975,313 $ — $ — Private Warrants Liability 6,347,438 — — 6,347,438 $ 17,322,751 $ 10,975,313 $ — $ 6,347,438 |
Schedule of key inputs into the Monte Carlo simulation model for the Public Warrants and Private Placement Warrants | December 2, 2020 Input (Initial Measurement) Risk-free interest rate 0.56 % Expected term (years) 6.04 Expected volatility 24.2 % Stock price $ 9.052 | Inputs September 30, 2021 December 31, 2020 Risk-free interest rate 1.12 % 0.5 % Expected term remaining (years) 5.82 5.96 Expected volatility 14.4 % 16.2 % Stock price $ 10.060 $ 10.02 |
Schedule of changes in the fair value of warrant liabilities | Private Warrant Placement Public Liabilities Fair value as of December 2, 2020 $ — $ — $ — Initial measurement on December 2, 2020 8,360,188 14,403,750 22,763,938 Change in valuation inputs or other assumptions (2,012,750) (3,428,437) (5,441,188) Fair value as of December 31, 2020 $ 6,347,438 $ 10,975,313 $ 17,322,751 |
Organization and Business Ope_6
Organization and Business Operations (Details) - Seaport Global Acquisition Corp - USD ($) | Dec. 02, 2020 | Dec. 31, 2020 | Sep. 30, 2021 | Dec. 31, 2020 |
Organization and Business Operation | ||||
Share price | $ 9.20 | $ 9.20 | ||
Unit price | $ 10.10 | $ 10.10 | ||
Maturity term of U.S government securities | 185 days | 185 days | ||
Working capital | $ (291,142) | |||
Minimum net tangible assets upon consummation of the Business Combination | $ 5,000,001 | $ 5,000,001 | ||
Cash outside the Trust Account | 948,584 | $ 948,584 | ||
Founder Shares | ||||
Organization and Business Operation | ||||
Consideration received | $ 25,000 | |||
Initial Public Offering | ||||
Organization and Business Operation | ||||
Number of units sold | 14,375,000 | |||
Threshold period for option to purchase additional Units to cover over-allotments | 10 days | |||
Share price | $ 10 | $ 10.10 | $ 10.10 | |
Gross proceeds | $ 143,750,000 | |||
Net proceeds | 145,187,500 | |||
Proceeds From Issuance of Units | $ 143,750,000 | |||
Price per warrant | $ 10.10 | |||
Proceeds from issuance of warrants | $ 145,187,500 | |||
Number of shares exercisable to purchase per warrant | 1 | |||
Unit price | $ 10.10 | $ 10.10 | $ 10.10 | |
Maturity term of U.S government securities | 185 days | |||
Underwriting fees | $ 2,875,000 | $ 2,875,000 | ||
Deferred underwriting fees | 5,031,250 | 5,031,250 | $ 5,031,250 | |
Offering costs | 8,361,625 | 8,361,625 | ||
Other offering cost | 455,375 | $ 455,375 | ||
Condition For Future Business Combination Use Of Proceeds Percentage | 80.00% | |||
Ownership interest to be acquired on post-transaction company | 50.00% | |||
Redemption threshold as percent of outstanding | 20.00% | |||
Interest to pay dissolution expenses | $ 100,000 | |||
Private Placement | ||||
Organization and Business Operation | ||||
Gross proceeds | $ 6,062,500 | |||
Number of warrants issued | 6,062,500 | 6,062,500 | 6,062,500 | |
Proceeds From Issuance of Units | $ 6,062,500 | |||
Price per warrant | $ 1 | $ 11.50 | ||
Proceeds from issuance of warrants | $ 6,062,500 | $ 6,062,500 | ||
Number of shares exercisable to purchase per warrant | 1 | 1 | 1 | |
Over-allotment | ||||
Organization and Business Operation | ||||
Number Of Units Granted To Underwriters | 1,875,000 | |||
Share price | $ 10 | |||
Gross proceeds | $ 143,750,000 | |||
Proceeds From Issuance of Units | $ 143,750,000 |
Organization and Business Ope_7
Organization and Business Operations - Business Combination Agreement (Details) - $ / shares | 5 Months Ended | ||
Dec. 31, 2020 | Sep. 30, 2021 | Dec. 31, 2019 | |
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Seaport Global Acquisition Corp | |||
Share Price | 9.20 | ||
Class A Common Stock | Seaport Global Acquisition Corp | |||
Common stock, par value | 0.0001 | 0.0001 | |
Class B Common Stock | Seaport Global Acquisition Corp | |||
Common stock, par value | $ 0.0001 | $ 0.0001 | |
Issuance of Class B common stock to initial Stockholders (in shares) | 3,593,750 |
Organization and Business Ope_8
Organization and Business Operations - Liquidity and Going Concern (Details) - USD ($) | Oct. 22, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Operating bank account | $ 5,401,000 | $ 9,798,000 | $ 5,401,000 | $ 3,852,000 | |||
Net change in cash | (10,781,000) | $ 36,878,000 | 29,693,000 | $ 102,797,000 | $ 185,450,000 | ||
Seaport Global Acquisition Corp | |||||||
Operating bank account | 61,743 | ||||||
Working capital | (291,142) | ||||||
Net change in cash | (371,042) | 886,841 | |||||
Net change in cash, per month | (98,538) | ||||||
Working Capital Loans | Seaport Global Acquisition Corp | |||||||
Maximum loans converted into warrants | $ 1,500,000 | $ 1,500,000 | |||||
Related Party Loans | Working Capital Loans | Seaport Global Acquisition Corp | |||||||
Maximum loans converted into warrants | $ 90,700,000 | $ 1,500,000 | |||||
Price per warrant | $ 12 | $ 1 |
Restatement of Previously Iss_3
Restatement of Previously Issued Financial Statements (Details) - USD ($) | Dec. 02, 2020 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jul. 23, 2020 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||
CONDENSED BALANCE SHEETS | ||||||||||||
Total liabilities | $ 477,611,000 | $ 471,629,000 | $ 477,611,000 | $ 471,629,000 | $ 566,148,000 | |||||||
Common stock | 3,000 | 3,000 | 3,000 | 3,000 | 3,000 | |||||||
Additional paid-in capital | 239,722,000 | 223,085,000 | 239,722,000 | 223,085,000 | 223,084,000 | |||||||
Accumulated deficit | (314,564,000) | (221,626,000) | (314,564,000) | (221,626,000) | (152,176,000) | |||||||
Total Stockholders' Equity (Deficit) | (74,839,000) | 1,462,000 | (74,839,000) | $ 31,807,000 | 1,462,000 | 70,911,000 | $ 78,619,000 | $ 134,427,000 | ||||
CONDENSED STATEMENT OF OPERATIONS | ||||||||||||
Other income (expense), net | (32,522,000) | (44,578,000) | (45,155,000) | |||||||||
Net income (loss) | $ (92,938,000) | $ (39,135,000) | $ (69,503,000) | $ (7,567,000) | $ 61,453,000 | |||||||
Diluted weighted average shares outstanding | 30,839,870 | 27,870,539 | 27,906,742 | 27,779,339 | 28,197,409 | |||||||
Diluted net income (loss) per share | $ (3.01) | $ (1.40) | $ (2.49) | $ (0.27) | $ 2.18 | |||||||
Basic weighted average shares outstanding | 30,839,870 | 27,870,539 | 27,906,742 | 27,779,339 | 27,623,415 | |||||||
Basic net income (loss) per share | $ (3.01) | $ (1.40) | $ (2.49) | $ (0.27) | $ 2.22 | |||||||
CONDENSED STATEMENT OF CASH FLOWS | ||||||||||||
Net income (loss) | $ (92,938,000) | $ (39,135,000) | $ (69,503,000) | $ (7,567,000) | $ 61,453,000 | |||||||
Seaport Global Acquisition Corp | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Minimum Net Tangible Assets Upon Redemption Of Temporary Equity | 5,000,001 | 5,000,001 | ||||||||||
Permanent Equity Amount to maintain Shareholders Equity | 5,000,000 | 5,000,000 | ||||||||||
CONDENSED BALANCE SHEETS | ||||||||||||
Total liabilities | 22,028,401 | 22,482,845 | 22,028,401 | 22,482,845 | ||||||||
Common Stock subject to possible redemption | 145,218,069 | 145,194,202 | 145,218,069 | 145,194,202 | ||||||||
Accumulated deficit | (21,786,742) | (21,226,105) | (21,786,742) | (21,226,105) | ||||||||
Total Stockholders' Equity (Deficit) | (21,786,383) | $ (19,940,859) | $ (16,114,295) | (21,225,746) | (21,786,383) | (21,225,746) | $ 0 | |||||
CONDENSED STATEMENT OF OPERATIONS | ||||||||||||
Change in fair value of warrant liability | $ (8,400,000) | (1,344,965) | 5,441,188 | 855,644 | ||||||||
Transaction costs allocable to warrant liability | (861,400) | |||||||||||
Compensation Expense - private placement warrants | (2,297,689) | |||||||||||
Other income (expense), net | (1,343,096) | (2,288,801) | 879,511 | |||||||||
Net income (loss) | (1,843,655) | (3,821,824) | 5,128,710 | 2,097,430 | (536,769) | |||||||
CONDENSED STATEMENT OF CASH FLOWS | ||||||||||||
Net income (loss) | (1,843,655) | $ (3,821,824) | $ 5,128,710 | 2,097,430 | (536,769) | |||||||
Change in fair value of warrant liability | 8,400,000 | $ 1,344,965 | (5,441,188) | $ (855,644) | ||||||||
Transaction costs | 861,400 | |||||||||||
Compensation Expense of Private Placement Warrants | 2,297,689 | |||||||||||
As Restated (First Amendment) | Seaport Global Acquisition Corp | ||||||||||||
CONDENSED BALANCE SHEETS | ||||||||||||
Warrant liability | 22,763,938 | 17,322,751 | 17,322,751 | |||||||||
Total liabilities | 28,023,442 | 22,482,845 | 22,482,845 | |||||||||
Common Stock subject to possible redemption | 113,707,706 | 118,968,455 | 118,968,455 | |||||||||
Additional paid-in capital | 8,162,648 | 2,901,952 | 2,901,952 | |||||||||
Accumulated deficit | (3,163,313) | 2,097,430 | 2,097,430 | |||||||||
Total Stockholders' Equity (Deficit) | 5,000,006 | 5,000,001 | 5,000,001 | |||||||||
Number Of Shares Subject To Redemption | 11,258,189 | 11,779,055 | $ 11,779,055 | |||||||||
CONDENSED STATEMENT OF OPERATIONS | ||||||||||||
Change in fair value of warrant liability | (14,400,000) | 5,441,188 | ||||||||||
Transaction costs allocable to warrant liability | (861,400) | |||||||||||
Compensation Expense - private placement warrants | (2,297,689) | |||||||||||
Other income (expense), net | 2,288,801 | |||||||||||
Net income (loss) | $ 2,097,430 | |||||||||||
Diluted weighted average shares outstanding | 2,449,058 | |||||||||||
Basic weighted average shares outstanding | 2,449,058 | |||||||||||
CONDENSED STATEMENT OF CASH FLOWS | ||||||||||||
Net income (loss) | $ 2,097,430 | |||||||||||
Change in fair value of warrant liability | 14,400,000 | (5,441,188) | ||||||||||
Transaction costs | 861,400 | |||||||||||
Compensation Expense of Private Placement Warrants | $ 2,297,689 | |||||||||||
Class A Common Stock | Seaport Global Acquisition Corp | ||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||
CONDENSED BALANCE SHEETS | ||||||||||||
Common stock | $ 0 | $ 0 | $ 0 | $ 0 | ||||||||
Total Stockholders' Equity (Deficit) | $ 0 | |||||||||||
CONDENSED STATEMENT OF OPERATIONS | ||||||||||||
Net income (loss) | $ (1,843,655) | $ 2,097,430 | $ (536,769) | |||||||||
Diluted weighted average shares outstanding | 14,375,000 | 2,605,469 | 14,375,000 | |||||||||
Diluted net income (loss) per share | $ (0.10) | $ 0.34 | $ (0.03) | |||||||||
Basic weighted average shares outstanding | 14,375,000 | 2,605,469 | 14,375,000 | |||||||||
Basic net income (loss) per share | $ (0.10) | $ 0.34 | $ (0.03) | |||||||||
CONDENSED STATEMENT OF CASH FLOWS | ||||||||||||
Net income (loss) | $ (1,843,655) | $ 2,097,430 | $ (536,769) | |||||||||
Class A Common Stock | As Restated (First Amendment) | Seaport Global Acquisition Corp | ||||||||||||
CONDENSED BALANCE SHEETS | ||||||||||||
Common stock | 311 | 260 | 260 | |||||||||
As Restated (Second Amendment) | Seaport Global Acquisition Corp | ||||||||||||
CONDENSED BALANCE SHEETS | ||||||||||||
Warrant liability | 22,763,938 | 17,322,751 | 17,322,751 | |||||||||
Total liabilities | 28,023,442 | 22,482,845 | 22,482,845 | |||||||||
Common Stock subject to possible redemption | 145,187,500 | 145,194,202 | 145,194,202 | |||||||||
Common stock | 0 | |||||||||||
Accumulated deficit | (26,480,148) | (21,226,105) | (21,226,105) | |||||||||
Total Stockholders' Equity (Deficit) | 5,000,006 | (21,225,746) | (21,225,746) | |||||||||
Number Of Shares Subject To Redemption | 14,375,000 | 14,375,000 | 14,375,000 | |||||||||
CONDENSED STATEMENT OF OPERATIONS | ||||||||||||
Change in fair value of warrant liability | 5,441,188 | |||||||||||
Transaction costs allocable to warrant liability | (861,400) | |||||||||||
Compensation Expense - private placement warrants | (2,297,689) | |||||||||||
Other income (expense), net | 2,288,801 | |||||||||||
Net income (loss) | $ 2,097,430 | |||||||||||
Diluted weighted average shares outstanding | 2,605,469 | |||||||||||
Diluted net income (loss) per share | $ 0.34 | |||||||||||
Basic weighted average shares outstanding | 2,605,469 | |||||||||||
Basic net income (loss) per share | $ 0.34 | |||||||||||
CONDENSED STATEMENT OF CASH FLOWS | ||||||||||||
Net income (loss) | $ 2,097,430 | |||||||||||
Change in fair value of warrant liability | (5,441,188) | |||||||||||
Transaction costs | 861,400 | |||||||||||
Compensation Expense of Private Placement Warrants | 2,297,689 | |||||||||||
Class A Common Stock Not Subject to Redemption | Seaport Global Acquisition Corp | ||||||||||||
CONDENSED STATEMENT OF OPERATIONS | ||||||||||||
Net income (loss) | $ 2,097,430 | |||||||||||
Diluted weighted average shares outstanding | 4,158,672 | |||||||||||
Diluted net income (loss) per share | $ 0.34 | |||||||||||
Basic weighted average shares outstanding | 4,158,672 | |||||||||||
CONDENSED STATEMENT OF CASH FLOWS | ||||||||||||
Net income (loss) | $ 2,097,430 | |||||||||||
Class A Common Stock Not Subject to Redemption | As Restated (First Amendment) | Seaport Global Acquisition Corp | ||||||||||||
CONDENSED STATEMENT OF OPERATIONS | ||||||||||||
Net income (loss) | $ 2,097,430 | |||||||||||
Diluted weighted average shares outstanding | 4,158,672 | |||||||||||
Diluted net income (loss) per share | $ 0.50 | |||||||||||
Basic weighted average shares outstanding | 4,158,672 | |||||||||||
Basic net income (loss) per share | $ 0.50 | |||||||||||
CONDENSED STATEMENT OF CASH FLOWS | ||||||||||||
Net income (loss) | $ 2,097,430 | |||||||||||
Previously Reported [Member] | Seaport Global Acquisition Corp | ||||||||||||
CONDENSED BALANCE SHEETS | ||||||||||||
Total liabilities | 5,259,504 | 5,160,094 | 5,160,094 | |||||||||
Common Stock subject to possible redemption | 136,471,644 | 136,291,206 | 136,291,206 | |||||||||
Additional paid-in capital | 5,003,786 | 5,184,223 | 5,184,223 | |||||||||
Accumulated deficit | (4,225) | (184,669) | (184,669) | |||||||||
Total Stockholders' Equity (Deficit) | 5,000,006 | 5,000,001 | 5,000,001 | |||||||||
Number Of Shares Subject To Redemption | 13,512,044 | 13,494,179 | 13,494,179 | |||||||||
CONDENSED STATEMENT OF OPERATIONS | ||||||||||||
Other income (expense), net | 6,702 | |||||||||||
Net income (loss) | $ (184,669) | |||||||||||
Diluted weighted average shares outstanding | 2,449,058 | |||||||||||
Basic weighted average shares outstanding | 2,449,058 | |||||||||||
CONDENSED STATEMENT OF CASH FLOWS | ||||||||||||
Net income (loss) | $ (184,669) | |||||||||||
Previously Reported [Member] | Class A Common Stock | Seaport Global Acquisition Corp | ||||||||||||
CONDENSED BALANCE SHEETS | ||||||||||||
Common stock | 86 | 88 | 88 | |||||||||
Previously Reported [Member] | Class A Common Stock Not Subject to Redemption | Seaport Global Acquisition Corp | ||||||||||||
CONDENSED STATEMENT OF OPERATIONS | ||||||||||||
Net income (loss) | $ (184,669) | |||||||||||
Diluted weighted average shares outstanding | 4,158,672 | |||||||||||
Diluted net income (loss) per share | $ (0.05) | |||||||||||
Basic weighted average shares outstanding | 3,750,161 | |||||||||||
Basic net income (loss) per share | $ (0.05) | |||||||||||
CONDENSED STATEMENT OF CASH FLOWS | ||||||||||||
Net income (loss) | $ (184,669) | |||||||||||
Revision of Prior Period, Adjustment [Member] | Seaport Global Acquisition Corp | ||||||||||||
CONDENSED BALANCE SHEETS | ||||||||||||
Warrant liability | 22,763,938 | 17,322,751 | 17,322,751 | |||||||||
Total liabilities | 22,763,938 | 17,322,751 | 17,322,751 | |||||||||
Common Stock subject to possible redemption | (22,763,938) | (17,322,751) | (17,322,751) | |||||||||
Additional paid-in capital | 3,158,862 | (2,282,271) | (2,282,271) | |||||||||
Accumulated deficit | (3,159,088) | 2,282,099 | 2,282,099 | |||||||||
Number Of Shares Subject To Redemption | (2,253,855) | (1,715,124) | (1,715,124) | |||||||||
CONDENSED STATEMENT OF OPERATIONS | ||||||||||||
Change in fair value of warrant liability | 5,441,188 | |||||||||||
Transaction costs allocable to warrant liability | (861,400) | |||||||||||
Compensation Expense - private placement warrants | (2,297,689) | |||||||||||
Other income (expense), net | 2,282,099 | |||||||||||
Net income (loss) | 2,282,099 | |||||||||||
CONDENSED STATEMENT OF CASH FLOWS | ||||||||||||
Net income (loss) | 2,282,099 | |||||||||||
Change in fair value of warrant liability | (5,441,188) | |||||||||||
Transaction costs | 861,400 | |||||||||||
Compensation Expense of Private Placement Warrants | 2,297,689 | |||||||||||
Revision of Prior Period, Adjustment [Member] | Class A Common Stock | Seaport Global Acquisition Corp | ||||||||||||
CONDENSED BALANCE SHEETS | ||||||||||||
Common stock | 225 | $ 172 | 172 | |||||||||
CONDENSED STATEMENT OF OPERATIONS | ||||||||||||
Basic net income (loss) per share | $ (0.16) | |||||||||||
Revision of Prior Period, Adjustment [Member] | As Restated (Second Amendment) | Seaport Global Acquisition Corp | ||||||||||||
CONDENSED BALANCE SHEETS | ||||||||||||
Common Stock subject to possible redemption | 31,479,794 | $ 26,225,747 | 26,225,747 | |||||||||
Common stock | (311) | (260) | (260) | |||||||||
Additional paid-in capital | (8,162,648) | (2,901,952) | (2,901,952) | |||||||||
Accumulated deficit | (23,316,835) | (23,323,535) | (23,323,535) | |||||||||
Total Stockholders' Equity (Deficit) | (26,225,747) | (26,225,747) | ||||||||||
Number Of Shares Subject To Redemption | $ 3,116,811 | $ 2,595,945 | $ 2,595,945 | |||||||||
CONDENSED STATEMENT OF OPERATIONS | ||||||||||||
Diluted weighted average shares outstanding | 156,411 | |||||||||||
Diluted net income (loss) per share | $ 0.34 | |||||||||||
Basic weighted average shares outstanding | 156,411 | |||||||||||
Basic net income (loss) per share | $ 0.34 | |||||||||||
Revision of Prior Period, Adjustment [Member] | Class A Common Stock Not Subject to Redemption | Seaport Global Acquisition Corp | ||||||||||||
CONDENSED STATEMENT OF OPERATIONS | ||||||||||||
Net income (loss) | $ 2,282,099 | |||||||||||
Diluted net income (loss) per share | $ (0.16) | |||||||||||
Basic weighted average shares outstanding | 408,511 | |||||||||||
Basic net income (loss) per share | $ 0.55 | |||||||||||
CONDENSED STATEMENT OF CASH FLOWS | ||||||||||||
Net income (loss) | $ 2,282,099 | |||||||||||
Revision of Prior Period, Adjustment [Member] | Class A Common Stock Not Subject to Redemption | As Restated (First Amendment) | Seaport Global Acquisition Corp | ||||||||||||
CONDENSED STATEMENT OF OPERATIONS | ||||||||||||
Diluted weighted average shares outstanding | 408,511 | |||||||||||
Diluted net income (loss) per share | $ 0.55 |
Significant Accounting Polic_10
Significant Accounting Policies - Offering Costs and Income taxes (Details) - USD ($) | Dec. 02, 2020 | Dec. 31, 2020 | Sep. 30, 2021 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Subsidiary, Sale of Stock [Line Items] | ||||||
Unrecognized tax benefits | $ 2,213,000 | $ 1,935,000 | $ 4,558,000 | $ 5,894,000 | ||
Seaport Global Acquisition Corp | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Offering costs allocable to warrants | 861,400 | |||||
Unrecognized tax benefits | 0 | $ 0 | ||||
Unrecognized tax benefits accrued for interest and penalties | 0 | $ 0 | ||||
Initial Public Offering | Seaport Global Acquisition Corp | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Offering costs | $ 8,361,625 | 8,361,625 | ||||
Underwriting fees | 2,875,000 | 2,875,000 | ||||
Deferred underwriting fees | 5,031,250 | 5,031,250 | ||||
Other offering cost | $ 455,375 | 455,375 | ||||
Offering costs allocable to warrants | $ 861,400 |
Significant Accounting Polic_11
Significant Accounting Policies - Net Income per share (Details) - USD ($) | 3 Months Ended | 5 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Subsidiary, Sale of Stock [Line Items] | |||||||||
Net loss | $ (92,938,000) | $ (39,135,000) | $ (69,503,000) | $ (7,567,000) | $ 61,453,000 | ||||
Adjusted net income (loss) | $ (69,503,000) | $ (7,567,000) | $ 61,453,000 | ||||||
Diluted weighted average shares outstanding | 30,839,870 | 27,870,539 | 27,906,742 | 27,779,339 | 28,197,409 | ||||
Diluted net income per share | $ (3.01) | $ (1.40) | $ (2.49) | $ (0.27) | $ 2.18 | ||||
Basic weighted average shares outstanding | 30,839,870 | 27,870,539 | 27,906,742 | 27,779,339 | 27,623,415 | ||||
Basic net income per share | $ (3.01) | $ (1.40) | $ (2.49) | $ (0.27) | $ 2.22 | ||||
Antidilutive securities excluded from computation of earnings per share | 264,513 | 261,342 | 325,000 | 376,000 | |||||
Class B Common Stock | |||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||
Diluted weighted average shares outstanding | 4,158,672 | ||||||||
Diluted net income per share | $ 0.50 | ||||||||
Seaport Global Acquisition Corp | |||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||
Net loss | $ (1,843,655) | $ (3,821,824) | $ 5,128,710 | $ 2,097,430 | $ (536,769) | ||||
Antidilutive securities excluded from computation of earnings per share | 6,062,500 | 16,843,750 | |||||||
Seaport Global Acquisition Corp | Class A Common Stock | |||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||
Net loss | (1,843,655) | $ 2,097,430 | $ (536,769) | ||||||
Less: Allocation of loss to Class B common stock | 368,731 | (1,215,880) | 107,354 | ||||||
Adjusted net income (loss) | $ (1,474,924) | $ 881,550 | $ (429,415) | ||||||
Diluted weighted average shares outstanding | 14,375,000 | 2,605,469 | 14,375,000 | ||||||
Diluted net income per share | $ (0.10) | $ 0.34 | $ (0.03) | ||||||
Basic weighted average shares outstanding | 14,375,000 | 2,605,469 | 14,375,000 | ||||||
Basic net income per share | $ (0.10) | $ 0.34 | $ (0.03) | ||||||
Seaport Global Acquisition Corp | Class B Common Stock | |||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||
Net loss | $ (1,843,655) | $ 2,097,430 | $ (536,769) | ||||||
Less: Allocation of loss to Class B common stock | (1,474,924) | (881,550) | (429,415) | ||||||
Adjusted net income (loss) | $ (368,731) | $ 1,215,880 | $ (107,354) | ||||||
Diluted weighted average shares outstanding | 3,593,750 | 3,593,570 | 3,593,750 | ||||||
Diluted net income per share | $ (0.10) | $ 0.34 | $ (0.03) | ||||||
Basic weighted average shares outstanding | 3,593,750 | 3,593,570 | 3,593,750 | ||||||
Basic net income per share | $ (0.10) | $ 0.34 | $ (0.03) |
Significant Accounting Polic_12
Significant Accounting Policies - Concentration of Credit Risk (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Seaport Global Acquisition Corp | ||
Federal depository insurance coverage | $ 250,000 | $ 250,000 |
Public Offering (Details)_2
Public Offering (Details) - USD ($) | Dec. 02, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Subsidiary, Sale of Stock [Line Items] | ||||
Par value of Class A common stock | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Seaport Global Acquisition Corp | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Share price | 9.20 | |||
Initial Public Offering | Seaport Global Acquisition Corp | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of units sold | 14,375,000 | |||
Share price | $ 10 | $ 10.10 | ||
Proceeds From Issuance of Units | $ 143,750,000 | |||
Par value of Class A common stock | $ 0.0001 | |||
Number of unit consists class A ordinary shares | 1 | |||
Number of Public Warrants that each unit consists | 0.75 | |||
Shares issuable per warrant | 1 | |||
Exercise price of warrants | $ 11.50 | |||
Initial Public Offering | Option | Seaport Global Acquisition Corp | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of units sold | 1,875,000 | |||
Share price | $ 10 |
Private Placement (Details)
Private Placement (Details) - Private Placement - Seaport Global Acquisition Corp - USD ($) | Dec. 02, 2020 | Dec. 31, 2020 |
Subsidiary, Sale of Stock [Line Items] | ||
Number of warrants issued | 6,062,500 | 6,062,500 |
Shares issuable per warrant | 1 | 1 |
Exercise price of warrants | $ 11.50 | $ 1 |
Proceeds from issuance of warrants | $ 6,062,500 | $ 6,062,500 |
Price per warrant | $ 1 | $ 11.50 |
Related Party Transactions - _2
Related Party Transactions - Founder Shares (Details) - Seaport Global Acquisition Corp - USD ($) | Jul. 31, 2020 | Jul. 31, 2020 | Dec. 31, 2020 | Sep. 30, 2021 |
Related Party Transaction [Line Items] | ||||
Aggregate purchase price | $ 25,000 | |||
Percentage of issued and outstanding shares held by initial stockholders | 20.00% | |||
Founder Shares | ||||
Related Party Transaction [Line Items] | ||||
Issuance of Class B common stock to initial Stockholders (in shares) | 3,593,750 | |||
Aggregate purchase price | $ 25,000 | |||
Restrictions on transfer period of time after business combination completion | 1 year | |||
Consideration received | $ 25,000 | |||
Stock price trigger to transfer, assign or sell any shares or warrants of the company, after the completion of the initial business combination (in dollars per share) | $ 12 | |||
Threshold period after the business combination in which the 20 trading days within any 30 trading day period commences | 150 days | |||
Threshold trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | 20 days | |||
Threshold consecutive trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | 30 days | |||
Over-allotment | ||||
Related Party Transaction [Line Items] | ||||
Shares subject to forfeiture | 468,750 | |||
Private Placement | Founder Shares | ||||
Related Party Transaction [Line Items] | ||||
Threshold period for not to transfer, assign or sell any of their shares or warrants after the completion of the initial business combination | 150 days | |||
Sponsor | Founder Shares | ||||
Related Party Transaction [Line Items] | ||||
Threshold period after the business combination in which the 20 trading days within any 30 trading day period commences | 30 days | |||
Sponsor | Private Placement | Founder Shares | ||||
Related Party Transaction [Line Items] | ||||
Stock price trigger to transfer, assign or sell any shares or warrants of the company, after the completion of the initial business combination (in dollars per share) | $ 12 | |||
Class B Common Stock | ||||
Related Party Transaction [Line Items] | ||||
Issuance of Class B common stock to initial Stockholders (in shares) | 3,593,750 | |||
Aggregate purchase price | $ 359 | |||
Percentage of issued and outstanding shares held by initial stockholders | 20.00% | 20.00% | ||
Class B Common Stock | Founder Shares | Maximum | ||||
Related Party Transaction [Line Items] | ||||
Threshold period after the business combination in which the 20 trading days within any 30 trading day period commences | 20 days |
Related Party Transactions - _3
Related Party Transactions - Additional information (Details) - USD ($) | Dec. 02, 2020 | Jul. 24, 2020 | Nov. 30, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Oct. 22, 2021 |
Related Party Transaction [Line Items] | |||||||||||
Repayment of advances - related party | $ 3,855,000 | $ 37,188,000 | $ 37,188,000 | $ 76,563,000 | $ 117,875,000 | ||||||
Working Capital Loans | Seaport Global Acquisition Corp | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Maximum loans converted into warrants | $ 1,500,000 | $ 1,500,000 | |||||||||
Exercise price of warrants | $ 1 | $ 1 | |||||||||
Outstanding balance | $ 0 | $ 0 | |||||||||
Sponsor | Unsecured Promissory Note [Member] | Seaport Global Acquisition Corp | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Face amount | $ 300,000 | ||||||||||
Related Party Loans | Seaport Global Acquisition Corp | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Outstanding balance | 0 | 0 | |||||||||
Related Party Loans | Working Capital Loans | Seaport Global Acquisition Corp | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Maximum loans converted into warrants | $ 1,500,000 | 1,500,000 | $ 90,700,000 | ||||||||
Outstanding balance of related party note | 0 | 0 | 0 | $ 0 | |||||||
Administrative Support Agreement [Member] | Seaport Global Acquisition Corp | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Administrative expenses - related party | $ 30,000 | $ 90,000 | |||||||||
Expenses per month | $ 10,000 | 10,000 | |||||||||
Expenses incurred | $ 10,000 | ||||||||||
Initial Public Offering | Seaport Global Acquisition Corp | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Exercise price of warrants | $ 11.50 | ||||||||||
Initial Public Offering | Sponsor | Seaport Global Acquisition Corp | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Repayment of advances - related party | $ 275,000 |
Investment Held in Trust Acco_3
Investment Held in Trust Account (Details) - Seaport Global Acquisition Corp - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of Held-to-maturity Securities [Line Items] | ||
Assets held in Trust Account | $ 145,218,069 | $ 145,194,202 |
Carrying Value | 145,194,202 | |
Gross Unrealized Losses | (2,174) | |
Fair Value | 145,192,028 | |
Money Market Fund | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Assets held in Trust Account | 281 | |
Carrying Value | 281 | |
Fair Value | 281 | |
U.S. Treasury Securities held in Trust Account | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Assets held in Trust Account | 145,193,921 | |
Carrying Value | 145,193,921 | |
Gross Unrealized Losses | (2,174) | |
Fair Value | $ 145,191,747 |
Commitments & Contingencies (De
Commitments & Contingencies (Details) - Seaport Global Acquisition Corp - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Commitments & Contingencies | ||
Deferred fee per unit | $ 0.35 | $ 0.35 |
Deferred Underwriting Commissions | $ 5,031,250 | $ 5,031,250 |
Stockholders' Equity - Prefer_2
Stockholders' Equity - Preferred Stock (Details) - Seaport Global Acquisition Corp - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Class of Stock [Line Items] | ||
Preferred shares, shares authorized | 1,000,000 | 1,000,000 |
Preferred shares, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Stockholders' Equity - Common_2
Stockholders' Equity - Common Stock (Details) | 5 Months Ended | 9 Months Ended | 12 Months Ended | |
Dec. 31, 2020$ / sharesshares | Sep. 30, 2021Vote$ / sharesshares | Dec. 31, 2020$ / sharesshares | Dec. 31, 2019$ / sharesshares | |
Class of Stock [Line Items] | ||||
Common stock, shares authorized | 60,000,000 | 60,000,000 | 60,000,000 | 60,000,000 |
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares issued | 27,962,554 | 31,274,065 | 27,962,554 | 27,962,554 |
Common stock, shares outstanding | 27,962,554 | 31,274,065 | 27,962,554 | 27,962,554 |
Seaport Global Acquisition Corp | ||||
Class of Stock [Line Items] | ||||
Percentage of issued and outstanding shares held by initial stockholders | 20.00% | |||
Class A Common Stock | Seaport Global Acquisition Corp | ||||
Class of Stock [Line Items] | ||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | |
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Common shares, votes per share | 1 | 1 | 1 | |
Common stock, shares issued | 0 | 0 | 0 | |
Common stock, shares outstanding | 0 | 0 | 0 | |
Shares subject to possible redemption, outstanding | 14,375,000 | 14,375,000 | 14,375,000 | |
Common Stock, Number Of Votes Per Share | 1 | 1 | 1 | |
Shares subject to possible redemption | 14,375,000 | |||
Class B Common Stock | Seaport Global Acquisition Corp | ||||
Class of Stock [Line Items] | ||||
Common stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | |
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Common shares, votes per share | 1 | 1 | 1 | |
Common stock, shares issued | 3,593,750 | 3,593,750 | 3,593,750 | |
Common stock, shares outstanding | 3,593,750 | 3,593,750 | 3,593,750 | |
Number of Class A common stock issued upon conversion of each share (in shares) | 1 | 1 | ||
Percentage of issued and outstanding shares held by initial stockholders | 20.00% | 20.00% | ||
Common Stock, Number Of Votes Per Share | 1 | 1 | 1 |
Warrant Liability (Details)
Warrant Liability (Details) - Seaport Global Acquisition Corp - $ / shares | 5 Months Ended | 9 Months Ended |
Dec. 31, 2020 | Sep. 30, 2021 | |
Class of Warrant or Right [Line Items] | ||
Public Warrants exercisable term from the closing of the Business Combination | 30 days | |
Public Warrants exercisable term from the closing of the initial public offering | 12 months | |
Warrant term | 5 years | |
Redemption price per public warrant (in dollars per share) | $ 0.01 | $ 0.01 |
Minimum threshold written notice period for redemption of public warrants | 30 days | 30 days |
Stock price trigger for redemption of public warrants (in dollars per share) | $ 18 | $ 18 |
Threshold trading days for redemption of public warrants | 20 days | 20 days |
Threshold consecutive trading days for redemption of public warrants | 30 days | 30 days |
Threshold business days before sending notice of redemption to warrant holders | 30 days | |
Share price | $ 9.20 | |
Percentage of gross proceeds on total equity proceeds | 60.00% | |
Adjustment of exercise price of warrants based on market value and newly issued price (as a percent) | 115.00% | 115.00% |
Adjustment of redemption price of stock based on market value and newly issued price 1 (as a percent) | 180.00% | |
Threshold period for filling registration statement after business combination | 20 days | |
Maximum Threshold Period For Registration Statement To Become Effective After Business Combination | 60 days | |
Public Warrants | ||
Class of Warrant or Right [Line Items] | ||
Exercise price of warrant | $ 11.50 | |
Public Warrants exercisable term from the closing of the Business Combination | 30 days | |
Public Warrants exercisable term from the closing of the initial public offering | 12 months | |
Period of time within which registration statement is expected to become effective | 60 days | |
Warrant term | 5 years | |
Share price | $ 9.20 | |
Percentage of gross proceeds on total equity proceeds | 60.00% | |
Adjustment of redemption price of stock based on market value and newly issued price 1 (as a percent) | 180.00% | |
Private Placement Warrants | ||
Class of Warrant or Right [Line Items] | ||
Restrictions on transfer period of time after business combination completion | 30 days |
Income Tax - Net deferred tax a
Income Tax - Net deferred tax assets (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax | ||
Organizational costs/Startup expenses | $ 253,000 | $ 46,000 |
Deferred tax assets | ||
Total deferred tax asset | 10,939,000 | 11,004,000 |
Valuation allowance | (1,039,000) | (851,000) |
Deferred tax asset, net of allowance | 9,900,000 | $ 10,153,000 |
Seaport Global Acquisition Corp | ||
Income Tax | ||
Organizational costs/Startup expenses | 21,692 | |
Federal Net Operating loss | 17,089 | |
Deferred tax assets | ||
Total deferred tax asset | 38,781 | |
Valuation allowance | $ (38,781) |
Income Tax - Income tax provisi
Income Tax - Income tax provision (Details) - USD ($) | 5 Months Ended | 9 Months Ended | 12 Months Ended | |||
Dec. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Federal | ||||||
Current | $ (491,000) | $ 11,653,000 | $ 27,741,000 | |||
Deferred | (21,489,000) | (19,467,000) | (14,496,000) | |||
State | ||||||
Current | 711,000 | 4,209,000 | 7,955,000 | |||
Deferred | (3,935,000) | (3,651,000) | (1,745,000) | |||
Change in valuation allowance | (200,000) | |||||
Income tax provision | $ (30,903,000) | $ (13,477,000) | $ (25,204,000) | $ (7,256,000) | $ 19,455,000 | |
Seaport Global Acquisition Corp | ||||||
Federal | ||||||
Deferred | $ (38,781) | |||||
State | ||||||
Change in valuation allowance | $ (38,781) |
Income Tax - Reconciliation of
Income Tax - Reconciliation of the federal income tax rate (Details) | 5 Months Ended | 9 Months Ended | 12 Months Ended | |||
Dec. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of the federal statutory tax rate to our effective tax rate | ||||||
Statutory federal income tax rate | 21.00% | 21.00% | 21.00% | |||
State taxes, net of federal tax benefit | 3.80% | 8.70% | 4.60% | |||
Change in valuation allowance | (0.20%) | (6.80%) | 0.10% | |||
Income tax provision | 25.00% | 25.60% | 26.60% | 48.90% | 24.00% | |
Seaport Global Acquisition Corp | ||||||
Reconciliation of the federal statutory tax rate to our effective tax rate | ||||||
Statutory federal income tax rate | 21.00% | |||||
State taxes, net of federal tax benefit | 0.00% | |||||
Permanent Book/Tax Differences (M&E / Warrants) | (22.90%) | |||||
Change in valuation allowance | 1.90% |
Income Tax - Additional Informa
Income Tax - Additional Information (Details) | 5 Months Ended | 12 Months Ended |
Dec. 31, 2020USD ($) | Dec. 31, 2020USD ($) | |
Change in valuation allowance | $ (200,000) | |
Seaport Global Acquisition Corp | ||
Federal net operating loss | $ 81,375 | $ 81,375 |
Change in valuation allowance | $ (38,781) |
Fair Value Measurements (Deta_2
Fair Value Measurements (Details) - Seaport Global Acquisition Corp - USD ($) | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets Held-in-trust, Noncurrent | $ 145,218,069 | $ 145,194,202 | |
Liabilities | 17,322,751 | ||
Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets Held-in-trust, Noncurrent | $ 145,194,202 | 145,218,068 | 145,194,202 |
Liabilities | 17,322,751 | 16,467,107 | |
Recurring | Public Warrants | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities | 10,975,313 | 10,134,375 | |
Recurring | Private Placement Warrants | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities | 6,347,438 | 6,332,732 | |
Recurring | U.S. Money Market held in Trust Account | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets Held-in-trust, Noncurrent | 281 | 281 | |
Recurring | U.S Treasury Securities held in Trust Account | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets Held-in-trust, Noncurrent | 145,193,921 | 145,218,068 | 145,193,921 |
(Level 1) | Public Warrants | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities | 10,975,313 | ||
(Level 1) | Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets Held-in-trust, Noncurrent | 145,194,202 | 145,218,068 | 145,194,202 |
Liabilities | 10,975,313 | 10,134,375 | |
(Level 1) | Recurring | Public Warrants | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities | 10,975,313 | 10,134,375 | |
(Level 1) | Recurring | U.S. Money Market held in Trust Account | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets Held-in-trust, Noncurrent | 281 | 281 | |
(Level 1) | Recurring | U.S Treasury Securities held in Trust Account | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets Held-in-trust, Noncurrent | 145,193,921 | 145,218,068 | 145,193,921 |
(Level 3) | Private Placement Warrants | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities | $ 6,347,438 | ||
(Level 3) | Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities | 6,347,438 | 6,332,732 | |
(Level 3) | Recurring | Private Placement Warrants | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Liabilities | $ 6,347,438 | $ 6,332,732 |
Fair Value Measurements - Mon_2
Fair Value Measurements - Monte Carlo (Details) - Seaport Global Acquisition Corp | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 02, 2020 |
Risk-free interest rate | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Measurement input | 1.12 | 0.5 | 0.56 |
Expected term remaining (years) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Measurement input | 5.82 | 5.96 | 6.04 |
Expected volatility | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Measurement input | 14.4 | 16.2 | 24.2 |
Stock price | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Measurement input | 10.060 | 10.02 | 9.052 |
Fair Value Measurements - Subse
Fair Value Measurements - Subsequent Measurement (Details) - Seaport Global Acquisition Corp | Dec. 02, 2020USD ($) | Dec. 31, 2020USD ($) | Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) | Sep. 30, 2021USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair Value Adjustment of Warrants | $ 8,400,000 | $ 1,344,965 | $ (5,441,188) | $ (855,644) | |
Public Warrants | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value as of December 2, 2020 | 10,975,313 | ||||
Initial measurement on December 2, 2020 | $ 14,403,750 | ||||
Change in valuation inputs or other assumptions | (3,428,437) | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Ending Balance | $ 10,975,313 | 10,975,313 | |||
Fair Value Adjustment of Warrants | 1.34 | $ 11,000,000 | |||
Derivative Liability, Measurement Input | 1.02 | 1.02 | |||
Private Placement | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value as of December 2, 2020 | 6,347,438 | ||||
Initial measurement on December 2, 2020 | $ 8,360,188 | ||||
Change in valuation inputs or other assumptions | (2,012,750) | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Ending Balance | $ 6,347,438 | $ 6,347,438 | |||
Fair Value Adjustment of Warrants | 1.38 | $ 6,300,000 | |||
Derivative Liability, Measurement Input | 1.05 | 1.05 | |||
Warrant [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value as of December 2, 2020 | $ 17,322,751 | ||||
Initial measurement on December 2, 2020 | $ 22,763,938 | ||||
Change in valuation inputs or other assumptions | (5,441,188) | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability Value, Ending Balance | $ 17,322,751 | $ 17,322,751 | |||
Fair Value Adjustment of Warrants | $ 14,400,000 | $ (5,441,188) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Assets, Current [Abstract] | ||||||
Cash, cash equivalents and restricted cash | $ 13,158 | $ 8,927 | $ 5,448 | $ 7,378 | $ 10,446 | $ 9,183 |
Accounts receivable, net of allowances of $244 at September 30, 2021 and $145 at December 31, 2020 | 9,329 | 12,670 | 19,763 | |||
Due from related party (Note 12) | 162 | 73 | 2,712 | |||
Content library | 24,935 | 26,074 | 61,902 | |||
Income tax receivable | 10,222 | 10,498 | 7,433 | |||
Prepaid expenses and other current assets | 9,446 | 6,949 | 10,204 | |||
Total current assets | 67,252 | 65,191 | 109,392 | |||
Property and equipment, net (Note 3) | 45,211 | 63,089 | 109,883 | |||
Goodwill, net (Note 4) | 147,523 | 147,523 | 147,523 | 147,523 | ||
Intangible assets, net (Note 4) | 142,063 | 195,635 | 267,063 | |||
Other long-term assets | 723 | 1,653 | 3,198 | |||
Total Assets | 402,772 | 473,091 | 637,059 | |||
Liabilities, Current [Abstract] | ||||||
Trade payables | 31,161 | 26,719 | 82,065 | |||
Due to related parties, net | 357 | 449 | 1,477 | |||
Accrued and other current liabilities (Note 5) | 60,062 | 75,954 | 85,889 | |||
Current portion of long-term debt and other current liabilities (Note 6) | 63,750 | |||||
Total current liabilities | 91,580 | 103,122 | 233,181 | |||
Long-term debt, net (Note 6) | 361,890 | 307,474 | 244,788 | |||
Other long-term liabilities | 13,944 | 19,862 | 21,584 | |||
Deferred income taxes, net | 10,197 | 41,171 | 66,595 | |||
Total Liabilities | 477,611 | 471,629 | 566,148 | |||
Commitments and contingencies (Note 10) | ||||||
Stockholders' Equity Attributable to Parent [Abstract] | ||||||
Common stock, $0.0001 par value; 60,000,000 shares authorized as of September 30, 2021 and December 31, 2020; 31,274,065 and 27,962,554 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively | 3 | 3 | 3 | |||
Additional paid-in-capital | 239,722 | 223,085 | 223,084 | |||
Accumulated deficit | (314,564) | (221,626) | (152,176) | |||
Total Stockholders' Equity (Deficit) | (74,839) | 1,462 | $ 31,807 | 70,911 | $ 78,619 | $ 134,427 |
Total Liabilities and Stockholders' Equity (Deficit) | $ 402,772 | $ 473,091 | $ 637,059 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
CONDENSED BALANCE SHEETS | |||
Accounts receivable, allowance for doubtful accounts | $ 244 | $ 145 | $ 346 |
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 60,000,000 | 60,000,000 | 60,000,000 |
Common Stock, Shares, Issued | 31,274,065 | 27,962,554 | 27,962,554 |
Common Stock, Shares, Outstanding | 31,274,065 | 27,962,554 | 27,962,554 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CONDENSED STATEMENT OF OPERATIONS | |||||
Net revenue | $ 216,372 | $ 465,208 | $ 546,191 | $ 858,370 | $ 1,087,783 |
Operating expenses: | |||||
Product cost | 83,602 | 187,865 | 220,999 | 359,880 | 439,523 |
Direct operating | 98,155 | 133,861 | 167,090 | 237,490 | 274,155 |
Marketing | 10,743 | 16,090 | 21,214 | 25,813 | 33,020 |
General and administrative | 41,709 | 46,840 | 62,235 | 67,158 | 81,529 |
Depreciation and amortization | 81,317 | 108,316 | 136,838 | 138,274 | 133,493 |
Total operating expenses | 315,526 | 492,972 | 608,376 | 828,615 | 961,720 |
Loss from operations | (99,154) | (27,764) | (62,185) | 29,755 | 126,063 |
Interest and other expense, net | (24,687) | (24,848) | |||
Loss before income taxes | (123,841) | (52,612) | (94,707) | (14,823) | 80,908 |
Income tax benefit | (30,903) | (13,477) | (25,204) | (7,256) | 19,455 |
Net income (loss) | $ (92,938) | $ (39,135) | $ (69,503) | $ (7,567) | $ 61,453 |
Net loss per share attributable to common shareholders-Basic | $ (3.01) | $ (1.40) | $ (2.49) | $ (0.27) | $ 2.22 |
Net loss per share attributable to common shareholders-diluted | $ (3.01) | $ (1.40) | $ (2.49) | $ (0.27) | $ 2.18 |
Weighted average shares used in computing net loss per share attributable to common shareholders- Basic | 30,839,870 | 27,870,539 | 27,906,742 | 27,779,339 | 27,623,415 |
Weighted average shares used in computing net loss per share attributable to common shareholders- diluted | 30,839,870 | 27,870,539 | 27,906,742 | 27,779,339 | 28,197,409 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Operating activities: | ||
Net loss | $ (92,938) | $ (39,135) |
Adjustments to reconcile net income to net cash flows from operating activities: | ||
Depreciation and other | 28,015 | 54,809 |
Amortization of intangible assets | 53,572 | 53,571 |
Gain on sale/disposal of assets | (271) | (66) |
Deferred income taxes | (30,974) | (23,895) |
Amortization of deferred financing costs | 962 | 2,582 |
PIK interest added to Senior Facilities | 26,413 | |
Related party tax payable settlement | 15,777 | |
Non-cash rent, interest and other | 985 | 83 |
Cash flows from changes in net operating assets and liabilities: | ||
Accounts receivable | 3,341 | 10,262 |
Content library | 1,138 | 38,656 |
Income tax receivable | 276 | 9,752 |
Prepaid expenses and other current assets | (2,497) | 1,476 |
Other assets | 930 | 650 |
Trade payables | 4,437 | (50,653) |
Change in due to/from related parties | (90) | 284 |
Accrued and other liabilities | (19,857) | (21,498) |
Net cash flows (used in) provided by operating activities | (10,781) | 36,878 |
Investing Activities: | ||
Purchases of property and equipment | (10,039) | (16,899) |
Proceeds from disposition of property and equipment | 392 | 786 |
Net cash flows used in investing activities | (9,647) | (16,113) |
Financing Activities: | ||
Proceeds from Redbox's borrowings | 30,896 | 18,000 |
Repayments of Redbox's debt obligations | (3,855) | (37,188) |
Dividends paid | (90) | (707) |
Principal payments on capital lease obligations | (2,292) | (2,800) |
Net cash flows provided by (used in) financing activities | 24,659 | (22,695) |
Change in cash, cash equivalents and restricted cash | 4,231 | (1,930) |
Cash, cash equivalents and restricted cash: | ||
Cash - Beginning of period | 8,927 | 7,378 |
Cash - End of period | $ 13,158 | $ 5,448 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital | Accumulated Income (Deficit) | Total |
Balance at the beginning at Dec. 31, 2017 | $ 222,831 | $ (88,407) | $ 134,427 | |
Balance at the beginning (in shares) at Dec. 31, 2017 | 3 | |||
Dividends | (117,358) | (117,358) | ||
Share-based compensation plans and related activity | 97 | 97 | ||
Net loss | 61,453 | 61,453 | ||
Balance at the end at Dec. 31, 2018 | 222,928 | (144,312) | 78,619 | |
Balance at the end (in shares) at Dec. 31, 2018 | 3 | |||
Dividends | (297) | (297) | ||
Share-based compensation plans and related activity | 156 | 156 | ||
Net loss | (7,567) | (7,567) | ||
Balance at the end at Dec. 31, 2019 | $ 3 | 223,084 | (152,176) | 70,911 |
Balance at the end (in shares) at Dec. 31, 2019 | 3 | |||
Dividends | (53) | (53) | ||
Share-based compensation plans and related activity | (22) | (22) | ||
Net loss | (39,135) | (39,135) | ||
Balance at the end at Sep. 30, 2020 | $ 3 | 223,062 | (191,258) | 31,807 |
Balance at the beginning at Dec. 31, 2019 | $ 3 | 223,084 | (152,176) | 70,911 |
Balance at the beginning (in shares) at Dec. 31, 2019 | 3 | |||
Dividends | (53) | (53) | ||
Share-based compensation plans and related activity | 1 | 1 | ||
Net loss | (69,503) | (69,503) | ||
Balance at the end at Dec. 31, 2020 | $ 3 | 223,085 | (221,626) | 1,462 |
Balance at the end (in shares) at Dec. 31, 2020 | 3 | |||
Balance at the end at Dec. 31, 2020 | $ 3 | 223,085 | (221,626) | 1,462 |
Balance at the end (in shares) at Dec. 31, 2020 | 3 | |||
Balance at the beginning at Dec. 31, 2020 | $ 3 | 223,085 | (221,626) | 1,462 |
Balance at the beginning (in shares) at Dec. 31, 2020 | 3 | |||
Related party tax payable settlement | 15,777 | 15,777 | ||
Share-based compensation plans and related activity | 860 | 860 | ||
Net loss | (92,938) | (92,938) | ||
Balance at the end at Sep. 30, 2021 | $ 3 | 239,722 | (314,564) | (74,839) |
Balance at the end at Sep. 30, 2021 | $ 3 | $ 239,722 | $ (314,564) | $ (74,839) |
Description of Business
Description of Business | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Organization and Business Operations | ||
Description of Business | Note 1: Description of Business Redwood Intermediate, LLC, a Delaware limited liability company, and subsidiaries (“Redbox” or the “Company”), operates self-serve kiosks in the United States where consumers can rent or purchase movies. As of September 30, 2021, the Company operated a network of approximately 40,000 self-service kiosks, in approximately 33,000 locations primarily at leading grocery stores, mass retailers, drug stores, dollar retailers, and convenience stores in every U.S. state and Puerto Rico (collectively the United States). Redbox is an established brand and leading provider in the home entertainment market in the United States. The Company is focused on providing its customers with the best value in entertainment and the most choice in how they consume it, through physical media and/or digital services. Redbox is undergoing a significant business expansion and digital transformation. The Company has transitioned from a pure-play DVD rental company to a multi- faceted entertainment company that provides tremendous value and choice by offering DVD rentals as well as multiple digital products across a variety of content windows including transactional (TVOD), ad-supported (AVOD), subscription (SVOD), and being a distributor of feature films with a growing library of original content. Redbox currently conducts its business through two operating segments: (1) Legacy Business and (2) Digital Business. For the Legacy Business, the Company operates a nationwide network of approximately 40,000 self-service kiosks where consumers can rent or purchase new-release DVDs and Blu-ray Discs TM (“movies”). The Company also generates service revenue by providing installation, merchandising and break-fix services to other kiosk businesses. Finally, the Company also produces, acquires, and distributes movies exclusively through its film distribution label, Redbox Entertainment, LLC, providing rights to talent-led films that are distributed across Redbox services as well as through third party digital services. For its Digital Business, the Company provides both transactional and ad-supported digital streaming services, which include 1) Redbox On Demand, a transactional service which provides digital rental or purchase of new release and catalog movies and TV content, 2) Redbox Free On Demand, an ad-supported service providing free movies and TV shows on demand, and 3) Redbox Free Live TV, a free, ad-supported television service giving access to over 100 linear channels. The Company is an indirect, wholly owned subsidiary of New Outerwall, Inc. (“New Outerwall”), a Delaware corporation, which is a direct, wholly owned subsidiary of Aspen Parent, Inc. (“Aspen”), a Delaware corporation. On September 27, 2016, Outerwall, Inc. (“Old Outerwall”) was acquired by an entity controlled by funds affiliated with or controlled by Apollo Global Management, LLC and its subsidiaries (“Apollo” or the “Sponsor”) (the “Apollo Acquisition”). In addition to its interest in Redbox, New Outerwall has interest in one other business under the brand name of Coinstar. On May 16, 2021, the Company became a party to a Business Combination Agreement with Seaport Global Acquisition Corp. (a publicly traded special purpose acquisition company ("Seaport")). The Business Combination closed on October 22, 2021. The Business Combination is accounted for as a reverse recapitalization in accordance with US GAAP. Under the guidance in ASC 805, Business Combinations For an update on the Business Combination Agreement with Seaport, see Note 14: Subsequent Events. | Note 1: Description of Business Redwood Intermediate, LLC, a Delaware limited liability company, and subsidiaries (“Redbox” or the “Company”), operates self-serve kiosks in the United States where consumers can rent or purchase movies. As of December 31, 2020, the Company operated a network of over 40,000 self-service kiosks, in approximately 34,000 locations primarily at leading grocery stores, mass retailers, drug stores, dollar retailers, and convenience stores in every U.S. state and Puerto Rico (collectively the United States). Redbox is an established brand and leading provider in the home video rental market in the United States. The Company is focused on providing its customers with the best value in entertainment and the most choice in how they consume it, through physical media and/or digital services. For its Legacy Business, the Company operates a nationwide network of approximately 40,000 self-service kiosks where consumers can rent or purchase new-release DVDs and Blu-ray Discs TM (“movies”). The Company also generates service revenue by providing installation, merchandising and break-fix services to other kiosk businesses. Finally, the Company also produces, acquires, and distributes movies exclusively through its film distribution label, Redbox Entertainment LLC, providing rights to talent-led films that are distributed across Redbox services as well as through third party digital services. For its Digital Business, the Company provides both transactional and ad-supported digital streaming services, which include 1) Redbox On Demand, a transactional service which provides digital rental or purchase of new release and catalog movies and TV content, 2) Redbox Free On Demand, an ad-supported service providing free movies and TV shows on demand, and 3) Redbox Free Live TV, a free, ad-supported television service giving access to 95 + linear channels. Redbox is undergoing a significant business expansion and digital transformation. The Company has transitioned from a pure-play DVD rental company to a multi-faceted entertainment company that provides tremendous value and choice by offering DVD rentals as well as multiple digital products across a variety of content windows including transactional (TVOD), ad-supported (AVOD), subscription (SVOD), and being a distributor of feature films with a growing library of original content. Redbox currently conducts its business through two operating segments: (1) Legacy Business and (2) Digital Business. The Company is an indirect, wholly owned subsidiary of New Outerwall, Inc. (“New Outerwall”), a Delaware corporation, which is a direct, wholly owned subsidiary of Aspen Parent, Inc. (“Aspen”), a Delaware corporation. On September 27, 2016, Outerwall, Inc. (“Old Outerwall”) was acquired by an entity controlled by funds affiliated with or controlled by Apollo Global Management, LLC and its subsidiaries (“Apollo” or the “Sponsor”) (the “Apollo Acquisition”). In addition to its interest in Redbox, New Outerwall has interest in one other business under the brand name of Coinstar. Up until December 2019, the Company also offered video games for rent or purchase through its kiosks. In December 2019, the Company withdrew from the video games business, which represented a very small percentage of its overall business. The Company believes that exiting the video games business allows it to generate more value at the kiosk by making more kiosk slots available for movies its customer seek, which drive the vast majority of its revenue and profitability. The last rental window for video games content expired prior to December 31, 2019. All purchasing, marketing, and distribution operations were discontinued by December 31, 2019. The Company completed final liquidation of its used video game inventory in April 2020, which were not material to the Company’s results of operations. |
Basis of Presentation
Basis of Presentation | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Basis of Presentation | ||
Basis of Presentation | Note 2: Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The unaudited financial information included herein has been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”). All significant intercompany balances and transactions between Redbox and its wholly owned subsidiaries have been eliminated in consolidation in the periods presented as discussed below. The accompanying unaudited condensed consolidated interim financial statements reflect all adjustments, consisting of normal recurring adjustments, that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented in accordance with U.S. GAAP. Certain information and disclosures normally included in the financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. As such, the information included herein should be read in conjunction with the consolidated financial statements and accompanying notes included in the consolidated audited financial statements as of and for the year ended December 31, 2020, included elsewhere in this prospectus. Amounts Due From/To Related Parties Any transactions between Redbox and its owners, employees or non-employee directors or Redbox and Coinstar are considered related party transactions, and any transactions between Redbox and New Outerwall and its affiliates are settled in cash pursuant to commercial services agreements. With respect to income taxes for all periods presented, while generally the Company is part of a consolidated group for income tax filings, the income tax benefits and provisions, income tax payables, related tax payments and deferred tax balances reported within have been prepared as if the Company operated as a standalone taxpayer. Deferred taxes have been classified as net liabilities in the unaudited Condensed Consolidated Balance Sheets Use of Estimates in Financial Reporting The Company’s consolidated financial statements are prepared in conformity with U.S. GAAP which requires management to make estimates and assumptions that affect the reported amounts in its consolidated financial statements and notes thereto. These estimates and assumptions take into account historical and forward-looking factors that the Company believes are reasonable, including but not limited to the potential impacts arising from COVID-19, and policies and initiatives aimed at reducing its transmission. As the extent and duration of the impacts from COVID-19 remain unclear, the Company’s estimates and assumptions may evolve as conditions change. The most significant estimates and assumptions include the: ● rate at which the economic benefit of the content library is consumed through rental activity; ● useful lives and recoverability of goodwill, definite-lived intangible assets, equipment and other long-lived assets; ● recognition and measurement of deferred income taxes (including the measurement of uncertain tax positions); and ● recognition and measurement of purchase price allocations for business combinations. It is reasonably possible that the estimates the Company makes may change in the future and could have a material effect on its consolidated financial statements. Summary of Significant Accounting Policies Revenue Recognition The Company recognizes revenue, net of sales tax, when it satisfies its performance obligations by transferring control of promised goods or services to its customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. 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. 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. A significant portion of the Company’s Legacy Business rental revenue is concentrated in kiosks installed with certain retail partners. Revenue aggregated at the following retailers accounted for 10% or more of the Company’s net revenue for the periods presented: Nine Months Ended September 30, 2021 2020 Wal-Mart Stores Inc. 13.0 % 14.2 % Walgreen Co. 12.2 % 15.0 % Promotional Codes and Gift Cards The Company 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 and other current liabilities As of September 30, 2021 and December 31, 2020, $7.4 million and $7.0 million, respectively, were deferred related to purchased but unredeemed promotional codes and gift cards and are included in Accrued and other current liabilities Condensed Consolidated Balance Sheets Loyalty Program In January 2018, the Company launched Redbox Perks. 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 so as 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 September 30, 2021 and December 31, 2020, $2.0 million and $2.8 million, respectively, of revenue was deferred related to Perks and is included in Accrued and other current liabilities Condensed Consolidated Balance Sheets Product Cost Product cost primarily represents the amortization of the Company’s physical content library and digital revenue sharing costs. Amortization of the content library is calculated using rental decay curves based on historical performance of movies over their useful lives to allocate content library costs to the periods over which the related revenue are earned. Given the steepness of the rental decay curve, amortization of the content library is recorded on an accelerated basis with substantially all of the content library cost recognized within the first year. The rental decay curves and salvage value of the Company’s content library are periodically reviewed and evaluated. For movies acquired through the Company's Redbox Entertainment label, costs include (1) the costs to acquire content, (2) manufacturing costs and (3) supply chain costs. These costs are capitalized as they are incurred and amortized in proportion to the current year's revenue as a percentage of management's estimate of total ultimate revenue, not to exceed the life of the acquired rights. Ultimate revenue estimates are periodically reviewed and adjustments, if any, will result in changes to amortization rates. Advertising Costs Advertising costs, which are included as a component of marketing expenses, include media expenses for local advertising, internet advertising, and sponsorship fees. The costs were $1.4 million and $4.6 million for the nine months ended September 30, 2021 and 2020, respectively. Share Based Compensation The Company grants share-based awards to select employees of the Company, consisting of restricted stock and performance stock units. Compensation expense is generally recognized for restricted stock units on a graded-vesting basis over the vesting period, which is generally five years. Compensation expense is generally recognized for performance stock units over the related vesting periods based on the grant-date fair value of the award when it becomes probable that the minimum return on Invested Capital (as defined under the plans) by Apollo will be satisfied. Award forfeitures are recognized at the time of occurrence. All awards granted are equity classified awards. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of deposit accounts. The Company’s cash balances with financial institutions may exceed the deposit insurance limits. The Company does not include outstanding amounts due from its payment card service providers for billed transactions in its cash balances, rather they are included in accounts receivable. Restricted Cash Restricted cash balances are cash balances established to secure the Company’s letter of credit requirement to support its insurance obligations and is presented as a short-term asset. See also Note 6: Debt. Content Library Content library is comprised of movies available for rent or purchase through the Company’s kiosks as well as movies acquired through the Company’s Redbox Entertainment label. For movies available for rent or purchase through the Company’s kiosks, movie content is obtained primarily through revenue sharing agreements and license agreements with studios, as well as through distributors and other suppliers. The cost of content mainly includes (1) the costs paid to studios and other vendors to acquire content including revenue share as applicable, (2) costs incurred to label, sort, and ship content to the Company’s kiosks for merchandising, (3) costs incurred to destroy content after use if required under contractual arrangements with studios and (4) indirect taxes, if applicable. For content that the Company expects to sell, management determines an estimated salvage value. Content salvage values are estimated based on the historical sales activity. The cost of each title is capitalized and amortized to its estimated salvage value using rental decay curves as discussed above under Product Cost. For movies acquired through the Company’s Redbox Entertainment label, costs include (1) the costs to acquire content, (2) manufacturing costs and (3) supply chain costs. These costs are capitalized as they are incurred and amortized in proportion to the current year's revenue as a percentage of management's estimate of total ultimate revenue, not to exceed the life of the acquired rights. Ultimate revenue estimates are periodically reviewed and adjustments, if any, will result in changes to amortization rates. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets are generally comprised of insurance-related receivables representing estimated amounts due from the Company’s insurance partners in excess of its deductibles, spare parts that are not separately capitalized for use in the repair and maintenance of its kiosks, the value of cases and labels used to vend and track discs, net of amortization, and various prepayments for operating expenses including software licenses when not determined to be a component of property and equipment. Accrued and Other Current Liabilities Accrued and other current liabilities generally consist of estimated total amounts due under contractual revenue-sharing arrangements with the Company’s content providers net of payments made during the respective title’s rental period, employee related liabilities primarily related to compensation, deferred revenue related to stored-value arrangements and the Company’s loyalty program, estimated income taxes payable, sales and rental-related taxes collected from the Company’s consumers on behalf of governmental entities, estimated gross amounts due for insurance claims incurred but not recorded, and various other estimates of amounts due but not invoiced for goods and services from the Company’s operational vendors. Loss Contingencies The Company accrues estimated liabilities for loss contingencies arising from claims, assessments, litigation and other sources when it is probable that a liability has been incurred and the amount of the claim assessment or damages can be reasonably estimated. The Company believes it has sufficient accruals to cover any obligations resulting from claims, assessments or litigation that have met these criteria. Fair Value of Financial Instruments Certain financial assets and liabilities are required to be carried at fair value. Fair value is the price that would be received to sell an asset, or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. In determining fair value, the Company utilizes market data or assumptions that it believes market participants would use in pricing the asset or liability, which would maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, including assumptions about risk and the risks inherent in the inputs to the valuation technique. In evaluating the fair value measurement techniques for recording certain financial assets and liabilities, there is a three-level valuation hierarchy under which financial assets and liabilities are designated. The determination of the applicable level within the hierarchy of a particular financial asset or liability depends on the inputs used in valuation as of the measurement date. Valuations based on observable or market-based inputs for identical asset or liabilities (Level 1 measurement) are given the highest level of priority, whereas valuations based on unobservable or internally derived inputs (Level 3 measurement) are given the lowest level of priority. The three levels of the fair value hierarchy are defined as follows: ● Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities; ● Level 2: Inputs other than Level 1 inputs that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or market-corroborated inputs; or ● Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying amounts for the Company’s cash equivalents approximate fair value because of the short-term nature of these instruments. The fair value of the Company’s long-term debt approximates its carrying amount, which is presented net of unamortized deferred financing costs. Derivative Instruments The Company is exposed to certain market risks relating to interest rates. The Company actively monitors and attempts to mitigate but does not eliminate these exposures using derivative instruments including interest rate swaps. The Company does not enter into derivative instruments for speculative or trading purposes. The Company recognizes its derivatives as either assets or liabilities and measure those instruments at estimated fair value. The Company presents its derivative positions gross on its unaudited Condensed Consolidated Balance Sheets Condensed Consolidated Statements of Operations COVID-19 Pandemic The Company is continuing to closely monitor the impact of the COVID-19 pandemic and is continually assessing its potential effects on its business and its financial performance as well as the impact of COVID-19 on its customers, employees, and vendors, including retail and studio partners. The Company cannot predict the duration or severity of the COVID-19 pandemic, and cannot reasonably estimate the financial impact that the COVID-19 outbreak will have on its results and significant estimates going forward. Recent Accounting Pronouncements Accounting Guidance Recently Adopted: In August 2018, the FASB issued ASU 2018-05, Intangibles-Goodwill and Other-Internal-Use-Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. In March 2019, the FASB issued ASU 2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials (Subtopic 926-20) Accounting Guidance Not Yet Adopted: In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) | Note 2: Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The audited financial information included herein has been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”). All significant intercompany balances and transactions between the Company and its wholly owned subsidiaries have been eliminated in consolidation in the periods presented as discussed below. Certain prior period amounts have been reclassified to conform with the current presentation. Amounts Due From/To Related Parties Any transactions between Redbox and its owners, employees or non-employee directors or Redbox and Coinstar are considered related party transactions, and any transactions between Redbox and New Outerwall and its affiliates are settled in cash pursuant to commercial services agreements. With respect to income taxes for all periods presented, while generally the Company is part of a consolidated group for income tax filings, the income tax benefits and provisions, income tax payables, related tax payments and deferred tax balances reported within have been prepared as if the Company operated as a standalone taxpayer. Deferred taxes have been classified as net liabilities in the Consolidated Balance Sheets. The Company remits cash to Aspen Parent or New Outerwall to settle any third-party, tax-related obligations, as determined if the Company operated as a standalone taxpayer. Use of Estimates in Financial Reporting The Company prepares its consolidated financial statements in conformity with U.S. GAAP which requires management to make estimates and assumptions that affect the reported amounts in its consolidated financial statements and notes thereto. These estimates and assumptions take into account historical and forward-looking factors that the Company believes are reasonable, including but not limited to the potential impacts arising from COVID-19, and policies and initiatives aimed at reducing its transmission. As the extent and duration of the impacts from COVID-19 remain unclear, the Company’s estimates and assumptions may evolve as conditions change. The most significant estimates and assumptions include the: ● rate at which the economic benefit of the content library is consumed through rental activity; ● useful lives and recoverability of goodwill, definite-lived intangible assets, equipment and other long-lived assets; ● recognition and measurement of deferred income taxes (including the measurement of uncertain tax positions); and It is reasonably possible that the estimates the Company makes may change in the future and could have a material effect on its consolidated financial statements. Summary of Significant Accounting Policies Revenue Recognition The Company recognizes revenue, net of sales tax, when it satisfies its performance obligations by transferring control of promised goods or services to its customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. 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. 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. A significant portion of the Company’s Legacy Business rental revenue is concentrated in kiosks installed with certain retail partners. Revenue aggregated at the following retailers accounted for 10% or more of the Company’s net revenue for the periods presented: Year Ended December 31, 2020 2019 2018 Walgreen Co. 14.6 % 14.7 % 15.5 % Wal-Mart Stores Inc. 13.8 % 18.3 % 18.2 % Promotional Codes and Gift Cards The Company 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 and other current liabilities 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, 2020 and December 31, 2019, $7.0 million and $6.8 million, respectively, were deferred related to purchased but unredeemed promotional codes and gift cards and are included in Accrued and other current liabilities in the accompanying Consolidated Balance Sheets. Loyalty Program In January 2018, the Company launched Redbox Perks. 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 so as 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, 2020 and December 31, 2019, $2.8 million and $4.8 million, respectively, of revenue was deferred related to Perks and is included in Accrued and other current liabilities in the accompanying Consolidated Balance Sheets. Product Cost Product cost primarily represents the amortization of the Company’s physical content library and digital revenue sharing costs. Amortization of the content library is calculated using rental decay curves based on historical performance of movies and games over their useful lives to allocate content library costs to the periods over which the related revenues are earned. Given the steepness of the rental decay curve, amortization of the content library is recorded on an accelerated basis with substantially all of the content library cost recognized within the first year. The rental decay curves and salvage value of the Company’s content library are periodically reviewed and evaluated. Advertising Costs Advertising costs, which are included as a component of marketing expenses, include media expenses for national and local advertising, internet advertising, and sponsorship fees. The costs were $6.3 million, $4.3 million and $11.2 million for the years ended December 31, 2020, 2019 and 2018, respectively. Related Parties Amounts received from Coinstar for payment of services rendered under the commercial services agreements are recorded as a reduction of expense. Any such receivables or payables that existed as of the balance sheet date, have been presented as Due from related party and Due to related parties, net balances in the accompanying Consolidated Balance Sheet and Consolidated Statements of Cash Flows. Additionally, Due to related parties, net includes unpaid dividends related to employees and Director stock awards. Right of offset is assumed for balances between Redbox and the same related counter party and, as such, are presented as net receivables or payables based on the net balances due to or from the respective counter parties as of the balance sheet date. Redbox is part of a consolidated filing group; income taxes are paid as a pass thru to either Aspen Parent Inc. or New Outerwall. The Company’s income tax obligations are presented as the amounts that would be owed if the Company had been a standalone taxpayer and are included in Accrued and other current liabilities Consolidated Balance Sheet Share Based Compensation The Company grants share-based awards to select employees of the Company, consisting of restricted stock and performance stock units. Compensation expense is generally recognized for restricted stock units on a graded-vesting basis over the vesting period, which is generally five years. Compensation expense is generally recognized for performance stock units over the related vesting periods based on the grant-date fair value of the award when it becomes probable that the minimum return on Invested Capital (as defined under the plans) by Apollo will be satisfied. Award forfeitures are recognized at the time of occurrence. All awards granted are equity classified awards. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of deposit accounts. The Company’s cash balances with financial institutions may exceed the deposit insurance limits. The Company does not include outstanding amounts due from its payment card service providers for billed transactions in its cash balances, rather they are included in accounts receivable. Restricted Cash Restricted cash balances are cash balances established to secure the Company’s letter of credit requirement to support its insurance obligations and is presented as a short-term asset. See also Note 6: Debt. Accounts Receivable Accounts receivable primarily represents receivables, net of allowances for doubtful accounts, from consumers for outstanding rental transactions and amounts due from the Company’s payment card service providers for billed transactions. The allowance for doubtful accounts primarily reflects management’s best estimate of amounts related to outstanding rental transactions that will not be collected. The Company determines the allowance based on historical experience and other currently available information. Content Library Content library consists of movies available for rent or purchase through the Company’s kiosks. The Company obtains its movie content primarily through revenue sharing agreements and license agreements with studios, as well as through distributors and other suppliers. The cost of content mainly includes (1) the costs paid to studios and other vendors to acquire content including revenue share as applicable, (2) costs incurred to label, sort, and ship content to the Company’s kiosks for merchandising, (3) costs incurred to destroy content after use if required under contractual arrangements with studios and (4) indirect taxes, if applicable. For content that the Company expects to sell, management determines an estimated salvage value. Content salvage values are estimated based on the historical sales activity. The cost of each title is capitalized and amortized to its estimated salvage value using rental decay curves as discussed above under Product Cost. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets are generally comprised of insurance-related receivables representing estimated amounts due from the Company’s insurance partners in excess of its deductibles, spare parts that are not separately capitalized for use in the repair and maintenance of its kiosks, the value of cases and labels used to vend and track discs, net of amortization, and various prepayments for operating expenses including software licenses when not determined to be a component of 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: 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 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. Intangible Assets Subject to Amortization The Company’s intangible assets subject to amortization comprise the value of its retailer relationships, the Redbox trade name, its contactable customer list, and developed technology as determined on the date of the Apollo Acquisition. The Company amortizes its intangible assets over their expected useful lives on a straight-line basis as the future pattern of consumption of the economic benefit derived from the identified intangible assets cannot be reliably determined. The Company annually reassess the useful lives of its intangible assets subject to amortization and the methods under which they are amortized. For further information, see Note 4: Goodwill and Other Intangible Assets. Goodwill Goodwill represents the excess purchase price of an acquired enterprise or assets over the estimated fair value of identifiable net assets acquired. Goodwill is evaluated for impairment annually during the fourth quarter, or more frequently if an event occurs or circumstances change that could more likely than not reduce the fair value of a reporting unit below its carrying value. As part of the Company’s impairment analysis, fair value of a reporting unit is determined using both the income and market approaches. The income approach requires management to estimate a number of factors for each reporting unit, including projected future operating results, economic projections, anticipated future cash flows and discount rates. For further information, see Note 4: Goodwill and Other Intangible Assets. Business Combinations The Company recognizes identifiable assets acquired and liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess purchase price of an acquired enterprise or assets over the estimated fair value of identifiable net assets acquired. Transaction costs associated with business combinations are expensed as incurred. Recoverability of Equipment and Other Long-Lived Assets The Company evaluates the estimated remaining life and recoverability of equipment and other assets, including intangible assets subject to amortization, whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Factors that would indicate potential impairment include, but are not limited to, significant decreases in the market value of the long-lived asset(s), a significant change in the long-lived asset’s use or physical condition, and operating or cash flow losses associated with the use of the long-lived asset. When there is an indication of impairment, the Company prepares an estimate of future undiscounted cash flows expected to result from the use of the asset and its eventual disposition to test recoverability. If the sum of the future undiscounted cash flows is less than the carrying value of the asset, it indicates that the long-lived asset is not recoverable, in which case the Company will then compare the estimated fair value to its carrying value. If the estimated fair value is less than the carrying value of the asset, the Company will recognize the impairment loss and adjust the carrying amount of the asset to its estimated fair value. No impairment losses have been recorded during years ended December 31, 2020, 2019 and 2018, respectively. Trade Payables Trade payables are primarily comprised of non-revenue share payments to the Company’s content partners, payments due to its retailer partners, and various other payments due for invoiced goods and services from its operational vendors. Accrued and Other Current Liabilities Accrued and other current liabilities generally consist of estimated total amounts due under contractual revenue-sharing arrangements with the Company’s content providers net of payments made during the respective title’s rental period, employee related liabilities primarily related to compensation, deferred revenue related to stored-value arrangements and the Company’s loyalty program, estimated income taxes payable, sales and rental-related taxes collected from the Company’s consumers on behalf of governmental entities, estimated gross amounts due for insurance claims incurred but not recorded, and various other estimates of amounts due but not invoiced for goods and services from the Company’s operational vendors. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, management determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under the tax law, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions in accordance with ASC 740, Income Taxes, on the basis of a two-step process in which (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, it will recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statements of operations. Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheet. Loss Contingencies The Company accrues estimated liabilities for loss contingencies arising from claims, assessments, litigation and other sources when it is probable that a liability has been incurred and the amount of the claim assessment or damages can be reasonably estimated. The Company believes it has sufficient accruals to cover any obligations resulting from claims, assessments or litigation that have met these criteria. Fair Value of Financial Instruments Certain financial assets and liabilities are required to be carried at fair value. Fair value is the price that would be received to sell an asset, or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. In determining fair value, the Company utilizes market data or assumptions that it believes market participants would use in pricing the asset or liability, which would maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, including assumptions about risk and the risks inherent in the inputs to the valuation technique. In evaluating the fair value measurement techniques for recording certain financial assets and liabilities, there is a three-level valuation hierarchy under which financial assets and liabilities are designated. The determination of the applicable level within the hierarchy of a particular financial asset or liability depends on the inputs used in valuation as of the measurement date. Valuations based on observable or market-based inputs for identical asset or liabilities (Level 1 measurement) are given the highest level of priority, whereas valuations based on unobservable or internally derived inputs (Level 3 measurement) are given the lowest level of priority. The three levels of the fair value hierarchy are defined as follows: ● Level 1 : Observable inputs such as quoted prices in active markets for identical assets or liabilities; ● Level 2 : Inputs other than Level 1 inputs that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or market-corroborated inputs; or ● Level 3 : Unobservable inputs that reflect the reporting entity’s own assumptions. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying amounts for the Company’s cash equivalents approximate fair value because of the short-term nature of these instruments. The fair value of the Company’s long-term debt approximates its carrying amount, which is presented net of unamortized deferred financing costs. Derivative Instruments The Company is exposed to certain market risks relating to interest rates. The Company actively monitors and attempts to mitigate but does not eliminate these exposures using derivative instruments including interest rate swaps. The Company does not enter into derivative instruments for speculative or trading purposes. The Company recognizes its derivatives as either assets or liabilities and measure those instruments at estimated fair value. The Company presents its derivative positions gross on its Consolidated Balance Sheets. The Company records changes in the fair value of derivatives as a component of other expense, net on its Consolidated Statements of Operations. Recent Accounting Pronouncements Accounting Guidance Not Yet Adopted: In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (ASU 2020-04), which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuance of LIBOR or another referenced rate. ASU 2020-04 is effective for fiscal years beginning after December 31, 2022. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) to simplify the accounting for income taxes. This guidance removes certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. The guidance also clarifies and simplifies other areas of ASC 740. This standard is effective for private companies for fiscal years beginning after December 15, 2021. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use-Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. The ASU requires a customer in a cloud computing arrangement (i.e., hosting arrangement) that is a service contract to follow the internal-use software guidance in ASC 350-40 to determine whether to capitalize certain implementation costs or expense them as incurred. For private companies, the guidance is effective for reporting periods beginning after December 15, 2020. The Company is currently evaluating the impact of adopting this ASU, and does not expect a material impact on its consolidated financial statements and related disclosures. In March 2019, the FASB issued ASU 2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials (Subtopic 926-20), in order to align the accounting for production costs of an episodic television series with the accounting for production costs of films by removing the content distinction for capitalization. ASU 2019-02 also requires that an entity reassess estimates of the use of a film in a film group and account for any changes prospectively. In addition, 2019-02 requires that an entity test films and license agreements for impairment at a film group level when the film or license agreements are predominantly monetized with other films and license agreements. For private companies, the guidance is effective for reporting periods beginning after December 15, 2020. The Company is currently evaluating the impact of adopting this ASU, and does not expect a material impact on its consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The ASU requires lessees, among other things, to recognize lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous authoritative guidance. This update also introduces new disclosure requirements for leasing arrangements. For private companies, the guidance is effective for reporting periods beginning after December 15, 2021, with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326). The ASU provides new guidance regarding measurement and recognition of credit impairment for certain financial assets. Such guidance will impact how the Company determines its allowance for estimated uncollectible receivables. For private companies, the guidance is effective for reporting periods beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures. |
Property and Equipment
Property and Equipment | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Property and Equipment | ||
Property and Equipment | Note 3: Property and Equipment September 30, December 31, Dollars in thousands 2021 2020 Kiosks and components $ 190,202 $ 190,416 Computers, servers, and software 96,352 87,113 Leasehold improvements 4,145 3,991 Office furniture and equipment 676 676 Leased Vehicles 10,436 10,678 Property and equipment, at cost $ 301,811 $ 292,874 Accumulated depreciation (256,600) (229,785) Property and equipment, net $ 45,211 $ 63,089 | Note 3: Property and Equipment December 31, December 31, Dollars in thousands 2020 2019 Kiosks and components $ 190,416 $ 186,158 Computers, servers, and software 87,113 73,730 Leasehold improvements 3,991 4,978 Office furniture and equipment 676 876 Leased Vehicles 10,678 11,813 Property and equipment, at cost $ 292,874 $ 277,555 Accumulated depreciation (229,785) (167,672) Property and equipment, net $ 63,089 $ 109,883 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Goodwill and Other Intangible Assets | ||
Goodwill and Other Intangible Assets | Note 4: Goodwill and Other Intangible Assets The following table summarizes the changes in goodwill by reportable segment: Legacy Digital Dollars in thousands Business Business Total Balance as of December 31, 2020 $ 144,014 $ 3,509 $ 147,523 Balance as of September 30, 2021 $ 144,014 $ 3,509 $ 147,523 The following table summarizes the carrying amounts and accumulated amortization of intangible assets: September 30, 2021 December 31, 2020 Gross Net Gross Net Estimated Carrying Accumulated Carrying Carrying Accumulated Carrying Dollars in thousands Useful Life Amount Amortization Amount Amount Amortization Amount Intangible assets subject to amortization: Contracts with retailers 7 years $ 370,000 $ (264,873) $ 105,127 $ 370,000 $ (225,230) $ 144,770 Trade name 7 years 60,000 (42,953) 17,047 60,000 (36,524) 23,476 Contactable customer list 7 years 40,000 (28,635) 11,365 40,000 (24,349) 15,651 Developed technology 7 years 30,000 (21,476) 8,524 30,000 (18,262) 11,738 Total intangible assets subject to amortization $ 500,000 $ (357,937) $ 142,063 $ 500,000 $ (304,365) $ 195,635 The Company recognized amortization expense of $53.6 million for each of the nine months ended September 30, 2021 and 2020. There was no impairment of goodwill and other intangible assets for the nine months ended September 30, 2021 and 2020. Certain events or circumstances that could reasonably be expected to negatively affect the underlying key assumptions and ultimately affect the estimated fair values of the Company’s reporting units include such items as: (i) a decrease in expected future new release movie titles resulting from the prolonged effects of the COVID-19 pandemic (ii) an increase in competition across streaming platforms resulting in fewer titles available at Redbox or fewer rental transactions and (iii) the inability to achieve cost savings or growth initiative targets within an expected timeframe. | Note 4: Goodwill and Other Intangible Assets Goodwill is evaluated for impairment annually during the fourth quarter, or more frequently if an event occurs or circumstances change that could more likely than not reduce the fair value of a reporting unit below its carrying value. During the fourth quarter of 2020, the Company completed a quantitative impairment analysis for goodwill related to its Legacy reporting unit, as a result of the significant impact of COVID-19 on its financial performance. Based on this analysis, the Company concluded the fair value of its Legacy reporting unit exceeded its carrying value and as such, no impairment charge was recorded. Based on the December 31, 2020 valuation date, the fair value of the Company’s Legacy reporting unit exceeded its carrying value. A quantitative analysis was not required related to the Digital reporting unit based on a qualitative analysis. As part of the Company’s impairment analysis, the determination of the fair value of the Company’s reporting units requires the Company to make significant estimates and assumptions including the business and financial performance of the Company’s reporting units, as well as how such performance may be impacted by COVID-19. These estimates and assumptions primarily include, but are not limited to: the selection of appropriate peer group companies, control premiums appropriate for acquisitions in the industries in which the Company competes, discount rates, terminal growth rates, forecasts of revenue, operating income, depreciation, amortization and capital expenditures, including considering the impact of COVID-19. Certain events or circumstances that could reasonably be expected to negatively affect the underlying key assumptions and ultimately affect the estimated fair values of the Company’s reporting units include such items as: (i) a decrease in expected future new release movie titles resulting from the prolonged effects of the COVID-19 pandemic (ii) an increase in competition across streaming platforms resulting in fewer titles available atRedbox or fewer rental transactions and (iii) the inability to achieve cost savings or growth initiative targets within an expected timeframe. Although the Company believes its estimates of fair value are reasonable, actual financial results could differ from those estimates due to the inherent uncertainty involved in making such estimates. Changes in assumptions concerning future financial results or other underlying assumptions, including the impact of COVID- 19, could have a significant impact on either the fair value of the reporting units, the amount of any goodwill impairment charges, or both. These estimates can be affected by a number of factors including, but not limited to, the impact of COVID-19, its severity, duration and its impact on global economies, general economic conditions as well as the Company’s profitability. The Company will continue to monitor these potential impacts, including the impact of COVID-19 and economic, industry and market trends and the impact these may have on its Legacy and Digital reporting units. The following table summarizes the changes in goodwill by reportable segment: Legacy Digital Dollars in thousands Business Business Total Balance as of December 31, 2018 $ 144,014 $ 3,509 $ 147,523 Balance as of December 31, 2019 $ 144,014 $ 3,509 $ 147,523 Balance as of December 31, 2020 $ 144,014 $ 3,509 $ 147,523 The following table summarizes the carrying amounts and accumulated amortization of intangible assets: December 31, 2020 December 31, 2019 Gross Net Gross Net Estimated Carrying Accumulated Carrying Carrying Accumulated Carrying Dollars in thousands Useful Life Amount Amortization Amount Amount Amortization Amount Intangible assets subject to amortization: Contracts with retailers 7 years $ 370,000 $ (225,230) $ 144,770 $ 370,000 $ (172,373) $ 197,627 Trade name 7 years 60,000 (36,524) 23,476 60,000 (27,952) 32,048 Contactable customer list 7 years 40,000 (24,349) 15,651 40,000 (18,635) 21,365 Developed technology 7 years 30,000 (18,262) 11,738 30,000 (13,977) 16,023 Total intangible assets subject to amortization $ 500,000 $ (304,365) $ 195,635 $ 500,000 $ (232,937) $ 267,063 The Company recognized amortization expense of $71.4 million for each of the years ended December 31, 2020, 2019 and 2018, respectively. Based on the amount of intangible assets subject to amortization as of December 31, 2020, the expected amortization for each of the next five fiscal years is as follows: Amortization of Dollars in thousands intangible assets 2021 $ 71,428 2022 71,428 2023 52,779 2024 — 2025 — Total expected amortization $ 195,635 No impairment of intangible assets were recognized for the years ended December 31, 2020, 2019 and 2018, respectively. |
Accrued and Other Current Liabi
Accrued and Other Current Liabilities | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Accrued and Other Current Liabilities | ||
Accrued and Other Current Liabilities | Note 5: Accrued and Other Current Liabilities Accrued and other current liabilities as of September 30, 2021 and December 31, 2020, consisted of the following: September 30, December 31, Dollars in thousands 2021 2020 Accrued payroll and other related expenses $ 20,776 $ 24,212 Accrued revenue share 12,669 13,480 Deferred revenue 11,203 10,019 Income taxes payable — 15,777 Other 15,414 12,466 Total accrued and other current liabilities $ 60,062 $ 75,954 | Note 5: Accrued and Other Current Liabilities Accrued and other current liabilities as of December 31, 2020 and 2019, consisted of the following: December 31, December 31, Dollars in thousands 2020 2019 Accrued payroll and other related expenses $ 24,212 $ 22,860 Accrued revenue share 13,480 20,976 Deferred revenue 10,019 11,570 Income taxes payable 15,777 15,777 Other 12,466 14,706 Total accrued and other current liabilities $ 75,954 $ 85,889 |
Debt
Debt | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Debt | ||
Debt | Note 6: Debt September 30, December 31, Dollars in thousands 2021 2020 Term Loan Facility $ 306,563 $ 281,563 Paid-In-Kind Interest related to Term Loan Facility 24,186 — Revolving Credit Facility 30,000 30,000 Paid-In-Kind Interest related to Revolving Credit Facility 2,227 — Union Revolving Credit Facility 4,590 2,550 Total debt outstanding $ 367,566 $ 314,113 Less: Unamortized debt issuance costs (5,676) (6,639) Total debt, net $ 361,890 $ 307,474 Portion due within one year $ — $ — Total long-term debt, net $ 361,890 $ 307,474 On October 20, 2017, Redbox Automated Retail, LLC (“RAR”) entered into a credit agreement (“Credit Agreement”), which provided for: ● a first lien term loan facility (the “Term Loan B”), in an original aggregate principal amount of $425.0 million, with a five-year maturity; and ● a first lien revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Senior Facilities”), in an aggregate principal amount of up to $30.0 million, with a five-year maturity. The Term Loan B was made available to RAR immediately upon closing and was used in part to retire all $280.0 million of the Company’s existing debt and to settle closing costs associated with the new Term Loan B totaling $19.5 million of which $4.6 million was paid to Apollo Global Securities, LLC, an affiliate of Apollo, for services provided in connection with the financing. The balance of the Term Loan B proceeds were used towards a dividend, occurring on the same day, with total dividend of $160.0 million to equity holders of RAR. Additionally, at the execution of the new Credit Agreement, RAR wrote-off unamortized deferred financing costs of $21.7 million related to the extinguishment of the entire debt under the prior credit agreement. On September 7, 2018, RAR entered into an Incremental Assumption and Amendment Agreement (the “Amendment”) to the Credit Agreement. The Amendment provided for, among other things, (i) an incremental Term B-1 Loan (“Term Loan B-1”) in an original aggregate principal amount of $85.8 million and (ii) the payment of one or more restricted payments to shareholders of RAR in an aggregate amount not to exceed $115.0 million. The proceeds received from the Amendment along with cash flow from the business were used towards a dividend distribution to equity holders of RAR totaling $115.0 million that was paid within five On September 30, 2020, RAR entered into the second amendment to its Credit Agreement (the “Second Amendment”) to, among other things, to increase the total net leverage covenant during the remaining term of the Credit Agreement and revise the quarterly amortization payment schedule. On December 28, 2020, RAR entered into a third amendment to its Credit Agreement (the “Third Amendment”). The amendment deferred the December 2020 amortization payment to March 2021. As of December 31, 2020, RAR’s Senior Facilities matured on October 20, 2022, and subsequent to the Amendment, Second Amendment and Third Amendment consisted of: ● a first lien term loan B facility, in an aggregate principal amount of $425.0 million; ● a first lien term loan B-1 facility, in an aggregate principal amount of $85.8 million; and ● a first lien revolving credit facility, in an aggregate principal amount of up to $30.0 million. On December 29, 2020, Redbox Entertainment, LLC entered into a four-year, $20.0 million revolving credit facility with Union Bank (the “Union Revolving Credit 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. Borrowings outstanding under the Union Revolving Credit Facility as of September 30, 2021 and December 31, 2020 were $4.6 million and $2.55 million, respectively. Borrowings under the Union Revolving Credit Facility will 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 day, (ii) the federal funds effective rate in effect on such day plus 1⁄2 of , and (iii) daily one month LIBOR plus In addition to paying interest on outstanding principal under the Union Revolving Credit Facility, Redbox Entertainment, LLC is required to pay a commitment fee at a rate equal to 0.50% per annum to the lenders in respect of the unutilized commitments thereunder. On January 29, 2021, RAR entered into an amendment to its Credit Agreement (the “Fourth Amendment”). The Fourth Amendment provided for, among other things, (i) deferral of principal amortization payments until the maturity date, (ii) extension of the maturity date to April 2023, (iii) at the RAR’s election, subject to certain liquidity thresholds, payment PIK interest, and, (iv) removal of all financial covenant requirements. In addition, under the Fourth Amendment RAR incurred an incremental first lien term loan B-2 facility (“Term Loan B-2” and, together with Term Loan Bs and Term Loan B-1’s, the “Term Loan Facility”) in an aggregate principal amount of $25.0 million which was provided by New Outerwall Inc. The loan was subsequently assigned to Aspen Parent, Inc. Aspen Parent, Inc. indirectly owns 100% of the equity of the Company and is therefore a related party of the Company. The proceeds from the loan will be used for general corporate purposes. Pursuant to the Fourth Amendment, interest is payable on the Senior Facilities entirely in cash or, for a specified period, could be paid by increasing the principal amount of the Senior Facilities (PIK Interest), or through a combination of cash and PIK interest, subject to certain liquidity thresholds. Borrowings under the Senior Facilities bear interest at a rate at RAR’s option, either (a) a London Interbank Offer Rate (“LIBOR”) determined by reference to the costs of funds for Eurodollar deposits for the interest period relevant to such borrowing, adjusted for certain additional costs, subject to a with respect to Eurocurrency Borrowings (increasing to In addition to paying interest on outstanding principal under the Senior Facilities, RAR is required to pay a commitment fee at a rate equal to 0.50% per annum to the lenders in respect of the unutilized commitments thereunder. RAR is also required to pay customary agency fees. In connection with the Business Combination, on May 16, 2021, RAR entered into another amendment to its Credit Agreement (the “Fifth Amendment”). The Fifth Amendment, which became effective upon consummation of the Business Combination, provided consent to the planned Business Combination and among other things, extended the Senior Facilities maturity date to October 2023 and subordinated the Term Loan B-2s to the Term Loan Bs and the Term Loan B-1s. In addition, among other things, concurrently with the consummation of the Business Combination, i) $15.0 million of cash proceeds from the Business Combination were used to pay down outstanding borrowings under the Revolving Credit Facility and ii) $35.0 million of cash proceeds from the Business Combination were used to pay down outstanding borrowings under the Term Loan Bs and the Term Loan B-1s. On October 11, 2021, RAR entered into a consent to the Fifth Amendment to make certain additional changes to the Credit Agreement, which became effective upon consummation of the Business Combination, including extending the maturity date of the Senior Facilities to April, 2024 and extending the PIK interest option until December 31, 2022 (subject to a minimum pro forma liquidity). See Note 14: Subsequent Events Dividend Restrictions The Credit Agreement contains certain customary affirmative covenants and negative covenants, including a limitation on the Company’s ability to pay dividends on or make distributions in respect of its capital 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; and up to $1.03 million for dividends that were accrued on equity interests that were unvested as of the payment of the Company’s last dividend in 2018 and have subsequently vested. Interest Rates and Fees As of September 30, 2021 and December 31, 2020, the borrowing interest rate for the Senior Facilities was 9.25% and 8.25%, respectively. Amortization and Prepayments Required minimum principal amortization payments under the Term Loan Facility as of September 30, 2021, are as follows: Repayment Dollars in thousands Amount Remaining 2021 $ — 2022 — 2023 330,749 Total $ 330,749 As noted above, pursuant to the consent agreement to the Fifth Amendment that RAR entered into on October 11,2021, the maturity date of the Senior Facilities has been extended to April, 2024. In addition, the Senior Facilities require RAR to prepay outstanding term loan borrowings, subject to certain exceptions, with: ● a certain percentage set forth in the Credit Agreement governing the Senior Facilities of RAR’s annual excess cash flow, as defined under the Senior Facilities; ● a certain percentage of the net cash proceeds of certain non-ordinary course asset sales, other dispositions of property or certain casualty events, in each case subject to certain exceptions and reinvestment rights; and ● the net cash proceeds of any issuance or incurrence of debt, other than proceeds from debt permitted under the Senior Facilities. RAR 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 LIBOR rate loans. All obligations under the Senior Facilities are unconditionally guaranteed by each of RAR’s existing and future direct and indirect material, wholly- owned domestic subsidiaries, subject to certain exceptions and the direct parent of RAR. The obligations are secured by a pledge of substantially all of RAR’s assets and those of each guarantor, including capital stock of the subsidiary guarantors and 65% of the capital stock of the first-tier foreign subsidiaries that are not subsidiary guarantors, in each case subject to certain exceptions, and its capital stock owned by RAR’s direct parent. Such security interests consist of a first-priority lien with respect to the collateral. Letters of Credit As of September 30, 2021 and December 31, 2020, the Company has a Letter of Credit arrangement to provide for the issuance of standby letters of credit in the amount of $3.4 million. The arrangement supports the collateral requirements for insurance claims and is good for one year to be renewed annually if necessary. As required under the Senior Facilities, the Company’s Letter of Credit is cash-collateralized at 105% through the Company’s restricted cash balance in the amount of $3.5 million as of September 30, 2021 and December 31, 2020, respectively. | Note 6: Debt December 31, December 31, Dollars in thousands 2020 2019 Term B Facility $ 281,563 $ 318,750 Revolving Credit Facility 30,000 — Union Revolving Credit Facility 2,550 — Total debt outstanding $ 314,113 $ 318,750 Less: Unamortized debt issuance costs (6,639) (10,212) Total debt, net $ 307,474 $ 308,538 Portion due within one year $ — $ 63,750 Total long-term debt, net $ 307,474 $ 244,788 On October 20, 2017 (“Closing Date”), the Company entered into a credit agreement (“Credit Agreement”), which provided for: ● a first lien term loan facility (the “Term Loan Facility”), in an aggregate principal amount of $425.0 million, with a five-year maturity; and ● a first lien revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Senior Facilities”), in an aggregate principal amount of up to $30.0 million, with a five-year maturity. The Term Loan Facility was made available to the Company immediately upon closing and was used in part to retire all $280.0 million of the Company’s existing debt outstanding on the Closing Date and to settle closing costs associated with the new Term Loan Facility totaling $19.5 million of which $4.6 million was paid to Apollo Global Securities, LLC, an affiliate of Apollo, for services provided in connection with the financing. The balance of the loan proceeds was used on the Closing Date to fund a dividend of $160.0 million to equity holders of the Company. Additionally, at the execution of the new Credit Agreement, the Company wrote- off unamortized deferred financing costs of $21.7 million related to the extinguishment of the entire debt under the prior credit agreement. On September 7, 2018, the Company entered into an Incremental Assumption and Amendment Agreement (the “Amendment”) to the Credit Agreement. The Amendment provided for, among other things, (i) an additional principal amount under a Term B-1 Loan (“Term Loan B-1”) in an aggregate principal amount of $85.8 million and (ii) the payment of one or more restricted payments to shareholders of Redbox in an aggregate amount not to exceed $115.8 $115.8 five On September 30, 2020, the Company entered into the second amendment to its Credit Agreement (the “Second Amendment”) to, among other things, modify the amortization payment schedule and increase the total net leverage covenant during the remaining term of the Credit Agreement. On December 28, 2020, the Company entered into a third amendment to its Credit Agreement (the “Third Amendment”). The amendment deferred the December 2020 amortization payment to March 2021. As of December 31, 2020, the Company’s Senior Facilities mature on October 20, 2022, and subsequent to the Amendment, Second Amendment and Third Amendment now consist of: ● a first lien term loan B facility (the “Term Loan B Facility”), in an aggregate principal amount of $425.0 million; ● a first lien term loan B-1 facility (the “Term Loan B-1 Facility”), in an aggregate principal amount of $85.8 million; and ● a first lien revolving credit facility (the “Revolving Credit Facility”), in an aggregate principal amount of up to $30.0 million. On December 29, 2020, the Company entered into a four-year, $20.0 million revolving credit facility with Union Bank (the “Union Revolving Credit 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. Borrowings outstanding under the Union Revolving Credit Facility as of December 31, 2020 were $2.55 million. On January 29, 2021, the Company entered into an amendment to its Credit Agreement (the “Fourth Amendment”) along with entering into a new term loan with New Outerwall for $25.0 million. New Outerwall indirectly owns 100% of the equity interests of the Company and is therefore a related party of the Company. In addition, on May 16, 2021, the Company entered into another amendment to its Credit Agreement (the “Fifth Amendment”). See Note 15, Subsequent Events, for a further discussion. The Credit Agreement contains certain customary affirmative covenants and negative covenants, including a limitation on the Company’s ability to pay dividends on or make distributions in respect of its capital 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; and up to $1.03 million for dividends that were accrued on equity interests that were unvested as of the payment of the Company’s last dividend in 2018 and have subsequently vested. Dividends per Share The dividend distribution declared in association with the Amendment was for $3.28 per common share outstanding and was declared during the year ended December 31, 2018. Total dividends of $115.8 million related to this amount were paid during the year ended December 31, 2018. Additionally, dividends of $1.0 million and $1.2 million were paid during the years ended December 31, 2020 and 2019, respectively. The subsequent dividend payments represented additional payments for the vesting of shares that were outstanding upon the dividend declaration. Dividend Restrictions The Credit Agreement contains certain customary affirmative covenants and negative covenants, including a limitation on the Company’s ability to pay dividends on or make distributions in respect of its capital 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; and up to $1.03 million for dividends that were accrued on equity interests that were unvested as of the payment of the Company’s last dividend in 2018 and have subsequently vested. Interest Rates and Fees Borrowings under the Senior Facilities will bear interest at a rate at the Company’s option, either (a) a London Interbank Offer Rate (“LIBOR”) rate determined by reference to the costs of funds for Eurodollar deposits for the interest period relevant to such borrowing, adjusted for certain additional costs, subject to a 1.00% floor in the case of term loans or (b) a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50% per annum, (ii) the prime rate quoted by The Wall Street Journal (or another national publication selected by the administrative agent) and (iii) the one-month adjusted LIBOR plus 1.00% per annum, in each case plus an applicable margin. The applicable margin for borrowings under the Senior Facilities is 7.25% with respect to Eurocurrency Borrowings and 6.25% with respect to ABR Borrowings. In addition to paying interest on outstanding principal under the Senior Facilities, we are required to pay a commitment fee at a rate equal to 0.50% per annum to the lenders in respect of the unutilized commitments thereunder. We are also required to pay customary agency fees. As of December 31, 2020 and December 31, 2019, the borrowing interest rate for the Senior Facilities was 8.25% and 9.05% respectively. Borrowings under the Union Revolving Credit Facility will 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 day, (ii) the federal funds effective rate in effect on such day plus ∕ of 1.0% , and (iii) daily one month LIBOR plus 1.0% . The revolving credit facility borrowings that are LIBOR loans bear interest at a per annum rate equal to the applicable LIBOR plus a margin of 0.50% . As of December 31, 2020, the borrowing interest rate for the Union Revolving Credit Facility was 4.25% . In addition to paying interest on outstanding principal under the Union Revolving Credit Facility, we are required to pay a commitment fee at a rate equal to 0.50% per annum to the lenders in respect of the unutilized commitments thereunder. Amortization and Prepayments Required minimum principal amortization payments under the Senior Facilities as of December 31, 2020, are as follows: Dollars in thousands Repayment 2021 $ — 2022 — 2023 281,563 Total $ 281,563 In addition, the Senior Facilities require us to prepay outstanding term loan borrowings, subject to certain exceptions, with: ● a certain percentage set forth in the Credit Agreement governing the Senior Facilities of the Company’s annual excess cash flow, as defined under the Senior Facilities; ● a certain percentage of the net cash proceeds of certain non-ordinary course asset sales, other dispositions of property or certain casualty events, in each case subject to certain exceptions and reinvestment rights; and ● the net cash proceeds of any issuance or incurrence of debt, other than proceeds from debt permitted under the Senior Facilities. The Company 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 LIBOR rate loans. Collateral and Guarantors All obligations under the Senior Facilities are unconditionally guaranteed by each of the Company’s existing and future direct and indirect material, wholly-owned domestic subsidiaries, subject to certain exceptions, and the direct parent of the Company. The obligations are secured by a pledge of substantially all of the Company’s assets and those of each guarantor, including capital stock of the subsidiary guarantors and 65% of the capital stock of the first-tier foreign subsidiaries that are not subsidiary guarantors, in each case subject to certain exceptions, and its capital stock owned by the Company’s direct parent. Such security interests consist of a first-priority lien with respect to the collateral. All obligations under the Union Revolving Credit Facility are guaranteed by all direct and indirect wholly owned subsidiaries of the Company’s Redbox Entertainment entity. Compliance with Loan Covenants As of and for the period ended December 31, 2020, the Company was in compliance with all applicable loan covenants. Letters of Credit As of December 31, 2020 and 2019, the Company has a Letter of Credit arrangement to provide for the issuance of standby letters of credit in the amount of $3.4 million. The arrangement supports the collateral requirements for insurance claims and is good for one year to be renewed annually if necessary. As required under the Senior Facilities, the Company’s Letter of Credit is cash-collateralized at 105% through the Company’s restricted cash balance in the amount of $3.5 million as of December 31, 2020 and 2019, respectively. |
Derivatives
Derivatives | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Derivatives | ||
Derivatives | Note 7: Derivatives The Company entered into an interest rate swap on October 22, 2018 to manage its exposure to changes in the interest rates related to its term loan (“Term Loan Facility”) following the Amendment discussed in Note 6: Debt Under the terms of the agreement, the Company entered into a three-year fixed-for-floating interest rate swap agreement with Nomura Global Financial Products, Inc. for a fixed notional amount of $200.0 million to swap the variable rate portion of interest payments tied to the one-month LIBOR under its term loans for fixed interest payments. The swap effectively locked in an average of a three-year forward curve for the one-month LIBOR at a fixed rate of 3.0335%, resulting in a total interest rate on the $200.0 million notional of 10.2835%. The agreement expires on October 31, 2021. See Note 6: Debt The following table discloses the fair value, as determined using Level 2 inputs, and balance sheet location of the Company’s derivative instrument: Balance Sheet September 30, December 31, Dollars in thousands Location 2021 2020 Derivatives not designated as hedging instruments: Interest rate swap contract Other liabilities $ 461 $ 4,782 The following table discloses the effect of the Company’s derivative instrument on the unaudited Condensed Consolidated Statements of Operations For the nine months ended September 30, Dollars in thousands 2021 2020 Other (income) expense, net $ (899) $ 4,324 | Note 7: Derivatives The Company entered into an interest rate swap on October 22, 2018 to manage its exposure to changes in the interest rates related to its term loan (“Term B Facility”) following the Amendment discussed in Note 6: Debt. The swap is not designated as a hedging instrument and is reported at fair value with changes in fair value reported directly in earnings. The Company’s hedge consists of interest rate swaps, which was used to mitigate interest rate risk. Under the terms of the agreement, the Company entered into a three-year fixed-for-floating interest rate swap agreement with Nomura Global Financial Products, Inc. for a fixed notional amount of $200.0 million to swap the variable rate portion of interest payments tied to the one-month LIBOR under its term loans for fixed interest payments. The swap effectively locked in an average of a three-year forward curve for the one-month LIBOR at a fixed rate of 3.0335%, resulting in a total interest rate on the $200.0 million notional of 10.2835%. The agreement expires on October 31, 2021. See Note 6: Debt for additional disclosures about the Company’s Term B Facility. The following table discloses the fair value, as determined using Level 2 inputs, and balance sheet location of the Company’s derivative instrument: Balance Sheet December 31, December 31, Dollars in thousands Location 2020 2019 Derivatives not designated as hedging instruments: Interest rate swap contract Other $ 4,782 $ 5,253 The following table discloses the effect of the Company’s derivative instrument on the Consolidated Statements of Operations For the years ended December 31, Dollars in thousands 2020 2019 2018 Other expense, net $ 4,341 $ 3,946 $ 3,012 |
Segment Information and Geograp
Segment Information and Geographic Data | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Segment Information and Geographic Data | ||
Segment Information and Geographic Data | Note 8: Segment Information and Geographic Data The Company currently conducts its business through two operating segments: (1) Legacy Business and (2) Digital Business. For all periods presented, the Company did not operate outside the United States and Puerto Rico (collectively the United States). As such, all of the Company’s long-lived assets are located in the United States. The Company’s Legacy Business operates a network of approximately 40,000 self-service kiosks where consumers can rent or purchase new-release DVDs and Blu-ray DiscsTM (“movies”). The Company’s Legacy Business also produces, acquires, and distributes movies exclusively through its Redbox Entertainment label, as well as generating service revenue by providing installation, merchandising and break-fix services to other kiosks businesses. The Company’s Digital Business provides both transactional and ad-supported digital streaming services, which include 1) Redbox On Demand, a transactional service which provides digital rental or purchase of new release and catalog movies and TV content and 2) Redbox Free Live TV and Redbox Free On Demand, ad-supported services which include digital linear television service giving access to more than 100 linear channels, and an on-demand service with more than 5,000 movies and TV episodes giving consumers control over when they watch content. Furthermore, the Company monetizes digital advertising space in Redbox emails and apps amongst other platforms, which is referred to as Media Network. Adjusted EBITDA is the profitability metric reported to the chief operating decision maker (“CODM”) for purposes of making decisions about allocation of resources to each segment and assessing performance of each segment. The Company believes this measure is most useful in assessing underlying performance of its business. Adjusted EBITDA is before integration related costs, efficiency initiatives, and other items. Adjusted EBITDA also excludes the effects of financings, income tax and the non-cash accounting effects of depreciation and intangible asset amortization. As segment assets are not reported to or used by the CODM to measure business performance or allocate resources, total segment assets and capital expenditures are not presented below. Summarized financial information by segment is as follows: Nine Months Ended September 30, Dollars in thousands 2021 2020 Net revenue Legacy Business $ 192,025 $ 433,215 Digital Business 24,347 31,993 Total $ 216,372 $ 465,208 Adjusted EBITDA Legacy Business $ (8,940) $ 106,133 Digital Business 2,257 3,642 Total $ (6,683) $ 109,775 The following is a reconciliation of Adjusted EBITDA to loss before income taxes for the nine months ended September 30, 2021 and 2020: Nine Months Ended September 30, Dollars in thousands 2021 2020 Loss before income taxes $ (123,841) $ (52,612) Add: Depreciation and amortization 81,317 108,316 Interest and other expense, net 24,687 24,848 Business optimization (a) 5,605 15,142 One-time non-recurring (b) 2,737 5,934 New business start-up costs (c) 1,004 4,821 Restructuring related (d) 1,808 3,326 Adjusted EBITDA $ (6,683) $ 109,775 (a) Business optimization costs include employee retention costs, IT costs as well as consulting costs for certain projects. For the nine months ended September 30, 2021 and 2020 the Company recorded IT costs of $2.2 million and $4.4 million, respectively. The Company recorded employee retention expense of $3.2 million and $10.7 million for each of the nine months ended September 30, 2021 and 2020, respectively. (b) Includes costs related to project costs and initiatives, as well as bank, legal and other fees in connection with the Company’s debt financing activities. (c) Includes costs to support the Company’s On Demand and AVOD offerings, along with costs related to the Company’s service and media network businesses. (d) Restructuring related costs include such items as employee severance charges and costs incurred related to removing kiosks. | Note 9: Segment Information and Geographic Data The Company currently conducts its business through two operating segments: (1) Legacy Business and (2) Digital Business. For all periods presented, the Company did not operate outside the United States and Puerto Rico (collectively the United States). As such, all of the Company’s long-lived assets are located in the United States. The Company’s Legacy Business operates a network of approximately 40,000 self-service kiosks where consumers can rent or purchase new-release DVDs and Blu-ray DiscsTM (“movies”). The Company’s Legacy Business also produces, acquires, and distributes movies exclusively through its Redbox Entertainment label, as well as generating service revenue by providing installation, merchandising and break-fix services to other kiosks businesses. The Company’s Digital Business provides both transactional and ad-supported digital streaming services, which include 1) Redbox On Demand, a transactional service which provides digital rental or purchase of new release and catalog movies and TV content, 2) Redbox Free On Demand, an ad-supported service providing free movies and TV shows on demand, and 3) Redbox Free Live TV, a free, ad-supported television service giving access to more than 95 linear channels. Furthermore, the Company monetizes digital advertising space in Redbox emails and apps amongst other platforms, which is referred to as Media Network. Adjusted EBITDA is the profitability metric reported to the chief operating decision maker (“CODM”) for purposes of making decisions about allocation of resources to each segment and assessing performance of each segment. The Company believes this measure is most useful in assessing the underlying performance of its business. Adjusted EBITDA is before integration related costs, efficiency initiatives, and other items. Adjusted EBITDA also excludes the effects of financings, income tax and the non-cash accounting effects of depreciation and intangible asset amortization. As segment assets are not reported to or used by the CODM to measure business performance or allocate resources, total segment assets and capital expenditures are not presented below. Summarized financial information by segment is as follows: For the years ended December 31, Dollars in thousands 2020 2019 2018 Net revenue Legacy Business $ 506,437 $ 838,627 $ 1,077,731 Digital Business 39,754 19,743 10,052 Total $ 546,191 $ 858,370 $ 1,087,783 Adjusted EBITDA Legacy Business $ 109,074 $ 197,887 $ 289,765 Digital Business 4,702 (2,238) 2,281 Total $ 113,776 $ 195,649 $ 292,046 The following is a reconciliation of Adjusted EBITDA to (loss) income before income for the years ended December 31, 2020, 2019 and 2018: Year ended December 31, Dollars in thousands 2020 2019 2018 (Loss) income before income taxes $ (94,707) $ (14,823) $ 80,908 Add: Depreciation and amortization 136,838 138,274 133,493 Interest and other expense, net 32,522 44,578 45,155 Business optimization (a) 19,011 7,687 1,227 One-time non-recurring (b) 10,600 5,482 13,229 New business start-up costs (c) 6,041 3,793 10,060 Restructuring related (d) 3,471 4,432 625 Discontinuation of games business (e) — 6,226 7,349 Adjusted EBITDA $ 113,776 $ 195,649 $ 292,046 (a) Business optimization costs include employee retention costs, IT costs as well as consulting costs for certain projects. Retention costs for the years ended 2020 and 2019 were $13.9 million and $3.0 million, respectively. In 2020, retention awards were paid out to all employees in light of the COVID pandemic and were in lieu of the Company’s short-term incentive program. IT costs of $4.8 million and $3.8 million were incurred in 2020 and 2019 respectively. The Company’s IT project is a complete restructuring of the Company’s technologies as it to moves to a cloud-based infrastructure. (b) Includes costs related to project costs and initiatives, as well as bank, legal and other fees in connection with the Company’s debt financing activities. (c) Includes costs to support the Company’s On Demand and AVOD offerings, along with costs related to the Company’s service and media network businesses. Restructuring related costs include such items as employee severance charges and costs incurred related to removing kiosks. Reflects EBITDA of the Company’s former video games business, which was wound down in December, 2019. |
Earnings Per Share
Earnings Per Share | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Earnings Per Share | ||
Earnings Per Share | Note 9: Earnings Per Share Earnings (Loss) per Share (“EPS”) is calculated by dividing the net earnings or loss attributable to shareholders by the weighted average shares outstanding. As the Company was in a loss position for the nine months ended September 30, 2021 and 2020, the Company has determined all potentially dilutive shares would be anti-dilutive in these periods and therefore are excluded from the calculation of diluted weighted average shares outstanding. This results in the calculation of weighted average shares outstanding to be the same for basic and diluted EPS. Potentially dilutive securities of approximately 264,513 and 261,342 for the nine months ended September 30, 2021 and 2020, respectively, were not included in the computation of diluted EPS because their effect would have been anti-dilutive. The following is a calculation of EPS: Nine Months Ended September 30, Dollars in thousands, except per share amounts 2021 2020 Basic and Diluted EPS Net loss attributable to shareholders $ (92,938) $ (39,135) Weighted average outstanding 30,839,870 27,870,539 Basic and diluted common $ (3.01) $ (1.40) | Note 10: Earnings Per Share Earnings (Loss) per Share (“EPS”) is calculated by dividing the Net earnings or loss attributable to shareholders by the weighted average shares outstanding. As the Company was in a loss position for the years ended December 31, 2020 and 2019, the Company has determined all potentially dilutive shares would be anti-dilutive in these periods and therefore are excluded from the calculation of diluted weighted average shares outstanding. This results in the calculation of weighted average shares outstanding to be the same for basic and diluted EPS. Potentially dilutive securities of approximately 325 thousand and 376 thousand for the years ended December 31, 2020 and 2019, respectively, were not included in the computation of diluted EPS because their effect would have been anti-dilutive. The following is a calculation of EPS (in thousands, except share and per share amounts): Year ended December 31, 2020 2019 2018 Basic EPS Net (loss) income attributable to shareholders $ (69,503) $ (7,567) $ 61,453 Weighted average shares outstanding for basic earnings (loss) per share 27,906,742 27,779,339 27,623,415 Basic earnings (loss) per common shares attributable to shareholders $ (2.49) $ (0.27) $ 2.22 Diluted EPS Net (loss) income attributable to shareholders $ (69,503) $ (7,567) $ 61,453 Weighted average shares outstanding for basic earnings (loss) per share: 27,906,742 27,779,339 27,623,415 Dilutive effect of restricted stock units — — 573,993 Weighted average shares outstanding for diluted earnings (loss) per share 27,906,742 27,779,339 28,197,409 Diluted earnings (loss) per common share attributable to shareholders $ (2.49) $ (0.27) $ 2.18 |
Commitments and Contingencies_2
Commitments and Contingencies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies | ||
Commitments and Contingencies | Note 10: Commitments and Contingencies The Company leases office facilities and certain equipment necessary to maintain its information technology infrastructure. Rent expense, net of sublease income, under its operating lease agreements was $1.9 million and $1.8 million for the nine months ended September 30, 2021 and 2020, respectively. The Company also leases automobiles under capital leases expiring at various dates through 2021. Management assesses these leases as they come due as to whether it should purchase, enter into new capital leases, or enter into operating leases. Assets held under capital leases are included in Property and equipment, net Condensed Consolidated Balance Sheets September 30, December 31, Dollars in thousands 2021 2020 Gross property and equipment $ 10,436 $ 10,677 Accumulated depreciation (6,981) (5,204) Net property and equipment $ 3,455 $ 5,473 Content License Agreements The Company licenses minimum quantities of theatrical and direct-to-video titles under licensing agreements with certain movie content providers. Changes in the Company’s agreements with content providers since December 31, 2020 are as follows: ● On January 15, 2021, the Company entered into a two-year license agreement with Sony Pictures Home Entertainment effective January 1, 2021. The agreement replaces the licensing agreement the Company had in place with Sony that expired on December 31, 2020. Total estimated movie content commitments under the terms of the Company’s content license agreements in effect as of September 30, 2021 is presented in the following table: Dollars in thousands Total 2021 2022 Minimum estimated movie content commitments $ 28,714 $ 7,979 $ 20,735 Legal Matters The Company is involved from time to time in legal proceedings incidental to the conduct of its business. The Company does not believe that any liability that may result from these proceedings will have a material adverse effect on its consolidated financial statements. | Note 11: Commitments and Contingencies The Company leases office facilities and certain equipment necessary to maintain its information technology infrastructure. Rent expense, net of sublease income, under the Company’s operating lease agreements was $2.5 million, $2.6 million and $2.4 million for the years ended December 31, 2020, 2019 and 2018, respectively. The Company also leases automobiles under capital leases expiring at various dates through 2021. The Company assesses these leases as they come due as to whether it should purchase, enter into new capital leases, or enter into operating leases. Assets held under capital leases are included in Property and equipment, net on the Consolidated Balance Sheets and include the following: Dollars in thousands December 31, 2020 December 31, 2019 Gross property and equipment $ 10,677 $ 11,813 Accumulated depreciation (5,204) (3,529) Net property and equipment $ 5,473 $ 8,284 As of December 31, 2020, the Company’s future minimum lease payments under contractual lease obligations are as follows: Dollars in thousands Capital Operating 2021 $ 2,836 $ 2,591 2022 1,895 1,994 2023 470 1,614 2024 27 923 2025 & Thereafter — 546 Total minimum lease commitments $ 5,228 $ 7,668 Less: Current portion of capital lease obligations (2,836) Long-term portion of capital lease obligations $ 2,392 (1) Includes all operating leases having an initial or remaining non-cancelable lease term in excess of one year. Content License Agreements The Company licenses minimum quantities of theatrical and direct-to-video titles under licensing agreements with certain movie content providers. ● As of December 31, 2020, there have been no changes in the Company ’ s agreements with content providers since December 31, 2019. For further information, see Note 15, Subsequent Events. Total estimated movie content commitments under the terms of the Company’s content license agreements in effect as of December 31, 2020 is presented in the following table: Dollars in thousands Total 2021 2022 Minimum estimated movie content commitments $ 59,788 $ 38,319 $ 21,469 As of December 31, 2020, the Company’s content license agreements are available for rental on the same day and date as the retail release for all major studios. Legal Matters From time to time the Company is involved in legal proceedings incidental to the conduct of its business. The Company does not believe that any liability that may result from these proceedings will have a material adverse effect on its consolidated financial statements. During 2020, the Company received $7.0 million in connection with a class action settlement specific to credit card fees, which were included in Direct Operating expenses in the Consolidated Statements of Operations. |
Income Taxes
Income Taxes | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Income Tax | ||
Income Taxes | Note 11: Income Taxes The Company’s effective tax rate was 25.0% and 25.6% for the nine months ended September 30, 2021 and 2020, respectively. The difference between the Company’s effective tax rate and the federal statutory tax rate for the nine months ended September 30, 2021 is primarily due to the effect of state taxes and the federal research and development credit. Tax Years Open for Examination As of September 30, 2021, there are no open examinations by the U.S. federal taxing authority. As of September 30, 2021, for the Company’s major jurisdictions, the years 2017 through 2020 were open for examination by the U.S federal and most state tax authorities. | Note 12: Income Taxes On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law in response to the COVID-19 pandemic. The impact of the CARES Act was not material to the Company’s financial statements. In further response to the COVID-19 pandemic, on December 27, 2020, the Consolidations Appropriations Act, 2021 (“CAA”) was signed into law. The Company does not expect the CAA to have a material impact on its financial statements. Components of Income Taxes The Company and its consolidated subsidiaries are included as part of the U.S. consolidated income tax group Aspen Parent, Inc. for the periods presented. The income tax benefit and provisions, income tax payables, related tax payments and deferred tax balances have been prepared as if the Company operated as a standalone taxpayer. The components of (loss) income before income taxes were as follows: Year Ended December 31, Dollars in thousands 2020 2019 2018 U.S. operations $ (94,707) $ (14,823) $ 80,908 Components of Income Tax (Benefit) Expense The components of income tax (benefit) expense were as follows: Year Ended December 31, Dollars in thousands 2020 2019 2018 Current: U.S. Federal $ (491) $ 11,653 $ 27,741 State and local 711 4,209 7,955 Total current $ 220 $ 15,862 $ 35,696 Deferred: U.S. Federal (21,489) (19,467) (14,496) State and local (3,935) (3,651) (1,745) Total deferred $ (25,424) $ (23,118) $ (16,241) Total income tax (benefit) expense $ (25,204) $ (7,256) $ 19,455 Rate Reconciliation The income tax expense differs from the amount that would result by applying the U.S. statutory rate to income before income taxes as follows: Year Ended December 31, 2020 2019 2018 U.S Federal tax expense at statutory rates 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit 3.8 % 8.7 % 4.6 % Valuation allowance (0.2) % (6.8) % 0.1 % Federal research & development credit 2.0 % 7.4 % (0.7) % Uncertain tax benefit on federal research and development credit (0.5) % (3.7) % 0.6 % Release of uncertain tax benefits 0.2 % 22.1 % (2.2) % Other 0.4 % 0.2 % 0.7 % Effective tax rate 26.6 % 48.9 % 24.0 % Unrecognized Tax Benefits The aggregate changes in the balance of unrecognized tax benefits were as follows: Year Ended December 31, Dollars in thousands 2020 2019 2018 Balance, beginning of the period $ 1,935 $ 4,558 $ 5,894 Additions based on tax positions related to the current year 250 150 150 Additions for tax positions related to prior years 215 509 321 Deductions for tax positions related to prior years (187) (1,945) (1,807) Deductions for tax positions effectively settled — (1,337) — Balance, end of period $ 2,213 $ 1,935 $ 4,558 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, $0.3 million and $0.3 million for the years ended December 31, 2020, 2019 and 2018, respectively. At December 31, 2020, 2019 and 2018, $2.2 million, $1.9 million and $4.6 million, respectively, of unrecognized tax benefits would favorably impact the effective tax rate if recognized. Tax Years Open for Examination As of December 31, 2020, there are no open examinations by the U.S. federal taxing authority. As of December 31, 2020, the tax years 2017 through 2018 are still in process for examination by the State of Illinois. In February of 2020, the State of Wisconsin initiated an audit of the Company and its affiliates for the calendar years ending December 31, 2016 through December 31, 2018. In July of 2020, the State of California contacted the Company to initiate an audit of the Company and its affiliates for the calendar years ending December 31, 2017 through December 31, 2018. At this time, an estimate of the range of reasonably possible adjustments cannot be determined for the open audits. Deferred Income Taxes Deferred income tax assets and liabilities reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the carrying amounts used for income tax purposes. Future tax benefits for net operating loss and tax credit carryforwards are also recognized to the extent that realization of such benefits is more likely than not. Deferred tax assets, deferred tax liabilities and tax credit carryforwards are measured using enacted tax rates that are expected to apply to taxable income in the years in which the Company expects to recognize those temporary differences and credits. In determining the Company’s tax provisions, management determined the deferred tax assets and liabilities for each separate tax jurisdiction and considered a number of factors including the positive and negative evidence regarding the realization of its deferred tax assets to determine whether a valuation allowance should be recognized with respect to its deferred tax assets. Significant components of the Company’s deferred tax assets and liabilities and in the valuation allowance were as follows: December 31, 2020 2019 Deferred tax assets: Credit carryforwards $ 1,117 $ 1,124 Accrued liabilities and allowances 1,388 614 Compensation accruals 2,750 2,966 Asset retirement obligation liability 1,994 2,257 Deferred revenue 2,237 2,682 Hedge liability 1,200 1,315 Other 253 46 Gross deferred tax assets 10,939 11,004 Less: Valuation Allowance (1,039) (851) Total deferred tax assets $ 9,900 $ 10,153 Deferred tax liabilities: Property and equipment (14,172) (23,250) Product costs (3,905) (7,107) Prepaid expenses (284) (241) Intangible assets (30,965) (44,819) Goodwill (1,745) (1,331) Total deferred tax liabilities $ (51,071) $ (76,748) Net deferred tax liabilities $ (41,171) $ (66,595) Change in Valuation Allowance During 2020, the Company increased its valuation allowance against certain of its deferred tax assets to reduce them to the value more likely than not to be realized with a corresponding non-cash charge of $0.2 million to its income tax provision. The valuation allowance balance of $1.0 $0.9 State Tax Credits and Expiration Periods The following table shows the Company’s state tax credits before valuation allowances and related expiration periods. December 31, 2020 Dollars in thousands Amount Expiration State tax credits: Illinois state tax credits $ 1,117 2021 – 2025 Total U.S. state tax credits $ 1,117 |
Related-Party Transactions
Related-Party Transactions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Related Party Transactions | ||
Related-Party Transactions | Note 12: Related-Party Transactions The Company entered into transactions with New Outerwall and related affiliates, primarily Coinstar, in the ordinary course of business. A description of such transactions and their effects on the accompanying consolidated financial statements are presented below. The Company receives and provides certain operating support under commercial services agreements with New Outerwall and related affiliates. A summary of the amounts due to/from such related parties is presented below: September 30, December 31, Dollars in thousands 2021 2020 Due from related party $ 162 $ 73 Due to related parties, net $ 357 $ 449 Amounts due from related party above includes amounts owed from ecoATM for kiosk servicing and other commercial agreements. The balance in amounts due to related parties primarily includes the unpaid dividends related to employee and Director stock awards. On January 29, 2021, the Company entered into the Fourth Amendment to the Credit Agreement. Provided under the Credit Agreement, the Company incurred additional principal amount under a Term B-2 Loan in an aggregate principal amount of $25.0 million, which was provided by New Outerwall. The proceeds from the loan will be used for general corporate purposes. The Company is an indirect, wholly owned subsidiary of New Outerwall, Inc. See Note 6: Debt, With respect to income taxes for the periods, while generally the Company is part of a consolidated group for income tax filings, the income tax benefits and provisions, income tax payables, related tax payments and deferred tax balances reported within have been prepared as if the Company operates as a standalone taxpayer. Deferred taxes have been classified as net liabilities in the respective unaudited Condensed Consolidated Balance Sheets Accrued and other current liabilities Condensed In connection with the Company’s impending business combination and restructuring, on June 29, 2021, the Company and New Outerwall determined that it was no longer probable that the income tax payable balances of the Company to New Outerwall would be paid. As such, the Company recorded an entry to reduce Accrued and other current liabilities $15.8 million and increase Additional paid-in capital $15.8 million. | Note 13: Related-Party Transactions The Company entered into transactions with New Outerwall and related affiliates, primarily Coinstar, in the ordinary course of business. A description of such transactions and their effects on the accompanying consolidated financial statements are presented below. The Company receives and provides certain operating support under commercial services agreements with New Outerwall and related affiliates. A summary of the amounts due to/from such related parties, and the related costs, is presented below: December 31, December 31, Dollars in thousands 2020 2019 Due from related party $ 73 $ 2,712 Due to related parties, net $ 449 $ 1,477 Amounts due from related party above includes amounts owed from Coinstar for professional services. The balance in amounts due to related parties primarily includes the unpaid dividends related to employee and Director stock awards. On January 29, 2021, the Company entered into the Fourth Amendment to the Credit Agreement. Provided under the Credit Agreement, the Company incurred additional principal amount under a Term B-2 Loan in an aggregate principal amount of $25.0 million, which was provided by New Outerwall. The proceeds from the loan will be used for general corporate purposes. The Term B-2 loan ranks pari passu basis with all obligations pursuant to the Credit Agreement. The Company is an indirect, wholly owned subsidiary of New Outerwall, Inc. See Note 6, Debt and Note 15, Subsequent Events, for a further discussion. With respect to income taxes for the periods, while generally the Company is part of a consolidated group for income tax filings, the income tax benefits and provisions, income tax payables, related tax payments and deferred tax balances reported within have been prepared as if the Company operates as a standalone taxpayer. Deferred taxes have been classified as net liabilities in the respective Consolidated Balance Sheets of the Company. Except for certain separate state tax obligations, the Company generally remits cash to Aspen or New Outerwall to settle any third-party, tax-related obligations, as determined if the Company operated as a standalone taxpayer. Income taxes payable balances, which are included in Accrued and other current liabilities in the Company’s Consolidated Balance Sheet, were $15.8 million as of December 31, 2020 and December 31, 2019. See Note 15, Subsequent Events, for a further discussion. |
Additional Supplemental Cash Fl
Additional Supplemental Cash Flow Financial Information | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Additional Supplemental Cash Flow Financial Information | ||
Additional Supplemental Cash Flow Financial Information | Note 13: Additional Supplemental Cash Flow Financial Information Cash, Cash Equivalents and Restricted Cash: September 30, December 31, Dollars in thousands 2021 2020 Cash and cash equivalents $ 9,798 $ 5,401 Restricted cash 3,360 3,526 Cash, cash equivalents and restricted cash $ 13,158 $ 8,927 Cash Interest and Taxes: Nine Months Ended September 30, Dollars in thousands 2021 2020 Cash paid during the period for interest $ — $ 20,853 Cash paid during the period for income taxes, net $ 622 $ 2,726 Non-cash Transactions Nine Months Ended September 30, Dollars in thousands 2021 2020 Purchases of property and equipment financed by capital lease obligations $ 28 $ 130 Purchases of property and equipment included in ending trade payables or accrued and other current liabilities $ 197 $ — | Note 14: Additional Supplemental Cash Flow Financial Information Cash, Cash Equivalents and Restricted Cash Year Ended December 31, Dollars in thousands 2020 2019 Cash and cash equivalents $ 5,401 $ 3,852 Restricted cash 3,526 3,526 Cash, cash equivalents and restricted cash $ 8,927 $ 7,378 Cash Interest and Taxes Year Ended December 31, Dollars in thousands 2020 2019 Cash paid during the period for interest $ 29,061 $ 36,659 Cash paid during the period for income taxes, net $ 2,993 $ 20,907 Non-cash Transactions Year Ended December 31, Dollars in thousands 2020 2019 Purchases of property and equipment financed by capital lease obligations $ 338 $ 6,051 Purchases of property and equipment included in ending trade payables or accrued and other current liabilities $ 653 $ 224 |
Subsequent Events_2_3
Subsequent Events | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Subsequent Events | ||
Subsequent Events | Note 14: Subsequent Events On October 11, 2021, RAR entered into a consent to the Fifth Amendment to make certain additional changes to the Credit Agreement, which became effective upon consummation of the Business Combination, including extending the maturity date of the Senior Facilities to April, 2024, extending the PIK interest option until December 31, 2022 (subject to a minimum pro forma liquidity), as well as commencing an excess cash flow sweep on March 31, 2022 subject to funds on hand being greater than $20.0 million. In connection with the proposed business combination agreement, on October 12, 2021, Seaport Global Acquisition Corp. entered into backstop subscription agreements (the “Backstop Agreements”) with certain subscribers (the “Backstop Subscribers”), including affiliates of funds managed by affiliates of Apollo Global Management, Inc. and Seaport Global SPAC, LLC, pursuant to which the Backstop Subscribers agreed, subject to certain conditions in the Backstop Agreements, to subscribe for and purchase up to an aggregate of 3,564,356 shares of Seaport’s Class A common stock, par value $0.0001 per share, in the event that more than 10,810,644 public shares of Seaport Class A common stock are submitted for redemption in connection with the proposed Business Combination Agreement, for a purchase price of $10.10 per share. On October 22, 2021, in accordance with the Business Combination Agreement, Redbox and Seaport closed the Business Combination. The Business Combination will be accounted for as a reverse recapitalization in accordance with US GAAP. Under the guidance in ASC 805, Business Combinations, Seaport is expected to be treated as the “acquired” company for financial reporting purposes. Cash received by the Company from the Business Combination totaled $27.0 million, net of $50.0 million of proceeds used to pay down outstanding indebtedness under the Company’s Senior Facilities and transaction costs of The Company has evaluated subsequent events through November 22, 2021, the date on which the financial statements were issued. | Note 15: Subsequent Events On January 15, 2021, the Company entered into a two-year license agreement with Sony Pictures Home Entertainment effective January 1, 2021. The agreement replaces the licensing agreement the Company had in place with Sony that expired on December 31, 2020. On January 29, 2021, the Company entered into the Fourth Amendment to the Credit Agreement. The Fourth Amendment provided for, among other things, (i) deferral of principal amortization payments until the maturity date, (ii) extension of the maturity date to April 2023, (iii) at the Company’s election, subject to certain liquidity thresholds, a paid in-kind (“PIK”) interest option, and (iv) waiver of all financial covenant requirements. In addition, provided under the Fourth Amendment the Company incurred an additional principal amount under a Term B-2 Loan in an aggregate principal amount of $25.0 million, which was provided by New Outerwall. New Outerwall indirectly owns 100% of the equity of the Company and is therefore a related party of the Company. The proceeds from the loan will be used for general corporate purposes. The Term B-2 loan ranks pari passu basis with all obligations pursuant to the Credit Agreement. Pursuant to the Fourth Amendment, interest is payable on the Senior Facilities and the Term B-2 loan entirely in cash or could be paid by increasing the principal amount of the Senior Facilities and Term B-2 loans (PIK interest), or through a combination of cash and PIK interest. Cash interest on the Senior Facilities and Term B-2 loan accrues at a rate of LIBOR plus 7.25% per annum. PIK interest on the Senior Facilities and Term B-2 loan accrues at a rate of LIBOR plus 8.25% per annum. On March 26, 2021, the Company entered into an asset purchase agreement with Sony DADC US Inc. (the “Seller”) to purchase certain assets and assume certain liabilities of the Seller’s business of providing video content distribution and other related services. The net purchase price, based on the asset value as of the closing date is not expected to be material. The closing of the transaction is subject to certain closing conditions and is expected to occur in the second half of 2021. On May 16, 2021, the Company became a party to a business combination agreement with Seaport Global Acquisition Corp. (a publicly traded special purpose acquisition company). The proposed merger is expected to be completed in the second half of 2021, subject to, among other things, approval of the respective party’s shareholders, satisfaction of the conditions stated in the merger agreement and other customary closing conditions. The result of the transaction will transform the Company into a publicly traded entity on the NASDAQ stock exchange. There is no assurance that the transaction will be consummated. In connection with the planned merger, on May 16, 2021, the Company entered into the Fifth Amendment to its Credit Agreement. The Fifth Amendment, which becomes effective upon consummation of the merger, provides consent to the planned merger and, among other things, extends, the Senior Facilities maturity date to October 2023 and eliminates the PIK Interest option after the consummation of the merger. In addition, among other things, concurrently with the consummation of the merger, i) $15.0 million of cash proceeds from the merger will be used to pay down outstanding borrowings under the Revolving Credit Facility and ii) a minimum of $35.0 of cash proceeds from the merger million plus the product of 0.60 times the Excess Cash Proceeds (as that term is defined in the Fifth Amendment) will be used to pay down outstanding borrowings under the Term B-1 Loans. In connection with the Company’s impending business combination and restructuring, on June 29, 2021, the Company and New Outerwall determined that it was no longer probable that the income tax payable balances of the Company to New Outerwall would be paid. As such, the Company recorded an entry to reduce Accrued and other current liabilities $15.8 million and increase Additional paid-in capital $15.8 million. The Company has evaluated subsequent events through July 7, 2021, the date on which the financial statements were issued. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Basis of Presentation | ||
Revenue Recognition | Revenue Recognition The Company recognizes revenue, net of sales tax, when it satisfies its performance obligations by transferring control of promised goods or services to its customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. 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. 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. A significant portion of the Company’s Legacy Business rental revenue is concentrated in kiosks installed with certain retail partners. Revenue aggregated at the following retailers accounted for 10% or more of the Company’s net revenue for the periods presented: Nine Months Ended September 30, 2021 2020 Wal-Mart Stores Inc. 13.0 % 14.2 % Walgreen Co. 12.2 % 15.0 % Promotional Codes and Gift Cards The Company 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 and other current liabilities As of September 30, 2021 and December 31, 2020, $7.4 million and $7.0 million, respectively, were deferred related to purchased but unredeemed promotional codes and gift cards and are included in Accrued and other current liabilities Condensed Consolidated Balance Sheets Loyalty Program In January 2018, the Company launched Redbox Perks. 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 so as 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 September 30, 2021 and December 31, 2020, $2.0 million and $2.8 million, respectively, of revenue was deferred related to Perks and is included in Accrued and other current liabilities Condensed Consolidated Balance Sheets | Revenue Recognition The Company recognizes revenue, net of sales tax, when it satisfies its performance obligations by transferring control of promised goods or services to its customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. 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. 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. A significant portion of the Company’s Legacy Business rental revenue is concentrated in kiosks installed with certain retail partners. Revenue aggregated at the following retailers accounted for 10% or more of the Company’s net revenue for the periods presented: Year Ended December 31, 2020 2019 2018 Walgreen Co. 14.6 % 14.7 % 15.5 % Wal-Mart Stores Inc. 13.8 % 18.3 % 18.2 % Promotional Codes and Gift Cards The Company 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 and other current liabilities 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, 2020 and December 31, 2019, $7.0 million and $6.8 million, respectively, were deferred related to purchased but unredeemed promotional codes and gift cards and are included in Accrued and other current liabilities in the accompanying Consolidated Balance Sheets. Loyalty Program In January 2018, the Company launched Redbox Perks. 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 so as 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, 2020 and December 31, 2019, $2.8 million and $4.8 million, respectively, of revenue was deferred related to Perks and is included in Accrued and other current liabilities in the accompanying Consolidated Balance Sheets. |
Product Cost | Product Cost Product cost primarily represents the amortization of the Company’s physical content library and digital revenue sharing costs. Amortization of the content library is calculated using rental decay curves based on historical performance of movies over their useful lives to allocate content library costs to the periods over which the related revenue are earned. Given the steepness of the rental decay curve, amortization of the content library is recorded on an accelerated basis with substantially all of the content library cost recognized within the first year. The rental decay curves and salvage value of the Company’s content library are periodically reviewed and evaluated. For movies acquired through the Company's Redbox Entertainment label, costs include (1) the costs to acquire content, (2) manufacturing costs and (3) supply chain costs. These costs are capitalized as they are incurred and amortized in proportion to the current year's revenue as a percentage of management's estimate of total ultimate revenue, not to exceed the life of the acquired rights. Ultimate revenue estimates are periodically reviewed and adjustments, if any, will result in changes to amortization rates. | Product Cost Product cost primarily represents the amortization of the Company’s physical content library and digital revenue sharing costs. Amortization of the content library is calculated using rental decay curves based on historical performance of movies and games over their useful lives to allocate content library costs to the periods over which the related revenues are earned. Given the steepness of the rental decay curve, amortization of the content library is recorded on an accelerated basis with substantially all of the content library cost recognized within the first year. The rental decay curves and salvage value of the Company’s content library are periodically reviewed and evaluated. |
Advertising Costs | Advertising Costs Advertising costs, which are included as a component of marketing expenses, include media expenses for local advertising, internet advertising, and sponsorship fees. The costs were $1.4 million and $4.6 million for the nine months ended September 30, 2021 and 2020, respectively. | Advertising Costs Advertising costs, which are included as a component of marketing expenses, include media expenses for national and local advertising, internet advertising, and sponsorship fees. The costs were $6.3 million, $4.3 million and $11.2 million for the years ended December 31, 2020, 2019 and 2018, respectively. |
Share Based Compensation | Share Based Compensation The Company grants share-based awards to select employees of the Company, consisting of restricted stock and performance stock units. Compensation expense is generally recognized for restricted stock units on a graded-vesting basis over the vesting period, which is generally five years. Compensation expense is generally recognized for performance stock units over the related vesting periods based on the grant-date fair value of the award when it becomes probable that the minimum return on Invested Capital (as defined under the plans) by Apollo will be satisfied. Award forfeitures are recognized at the time of occurrence. All awards granted are equity classified awards. | Share Based Compensation The Company grants share-based awards to select employees of the Company, consisting of restricted stock and performance stock units. Compensation expense is generally recognized for restricted stock units on a graded-vesting basis over the vesting period, which is generally five years. Compensation expense is generally recognized for performance stock units over the related vesting periods based on the grant-date fair value of the award when it becomes probable that the minimum return on Invested Capital (as defined under the plans) by Apollo will be satisfied. Award forfeitures are recognized at the time of occurrence. All awards granted are equity classified awards. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of deposit accounts. The Company’s cash balances with financial institutions may exceed the deposit insurance limits. The Company does not include outstanding amounts due from its payment card service providers for billed transactions in its cash balances, rather they are included in accounts receivable. | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of deposit accounts. The Company’s cash balances with financial institutions may exceed the deposit insurance limits. The Company does not include outstanding amounts due from its payment card service providers for billed transactions in its cash balances, rather they are included in accounts receivable. |
Restricted Cash | Restricted Cash Restricted cash balances are cash balances established to secure the Company’s letter of credit requirement to support its insurance obligations and is presented as a short-term asset. See also Note 6: Debt. | Restricted Cash Restricted cash balances are cash balances established to secure the Company’s letter of credit requirement to support its insurance obligations and is presented as a short-term asset. See also Note 6: Debt. |
Content Library | Content Library Content library is comprised of movies available for rent or purchase through the Company’s kiosks as well as movies acquired through the Company’s Redbox Entertainment label. For movies available for rent or purchase through the Company’s kiosks, movie content is obtained primarily through revenue sharing agreements and license agreements with studios, as well as through distributors and other suppliers. The cost of content mainly includes (1) the costs paid to studios and other vendors to acquire content including revenue share as applicable, (2) costs incurred to label, sort, and ship content to the Company’s kiosks for merchandising, (3) costs incurred to destroy content after use if required under contractual arrangements with studios and (4) indirect taxes, if applicable. For content that the Company expects to sell, management determines an estimated salvage value. Content salvage values are estimated based on the historical sales activity. The cost of each title is capitalized and amortized to its estimated salvage value using rental decay curves as discussed above under Product Cost. For movies acquired through the Company’s Redbox Entertainment label, costs include (1) the costs to acquire content, (2) manufacturing costs and (3) supply chain costs. These costs are capitalized as they are incurred and amortized in proportion to the current year's revenue as a percentage of management's estimate of total ultimate revenue, not to exceed the life of the acquired rights. Ultimate revenue estimates are periodically reviewed and adjustments, if any, will result in changes to amortization rates. | Content Library Content library consists of movies available for rent or purchase through the Company’s kiosks. The Company obtains its movie content primarily through revenue sharing agreements and license agreements with studios, as well as through distributors and other suppliers. The cost of content mainly includes (1) the costs paid to studios and other vendors to acquire content including revenue share as applicable, (2) costs incurred to label, sort, and ship content to the Company’s kiosks for merchandising, (3) costs incurred to destroy content after use if required under contractual arrangements with studios and (4) indirect taxes, if applicable. For content that the Company expects to sell, management determines an estimated salvage value. Content salvage values are estimated based on the historical sales activity. The cost of each title is capitalized and amortized to its estimated salvage value using rental decay curves as discussed above under Product Cost. |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets are generally comprised of insurance-related receivables representing estimated amounts due from the Company’s insurance partners in excess of its deductibles, spare parts that are not separately capitalized for use in the repair and maintenance of its kiosks, the value of cases and labels used to vend and track discs, net of amortization, and various prepayments for operating expenses including software licenses when not determined to be a component of property and equipment. | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets are generally comprised of insurance-related receivables representing estimated amounts due from the Company’s insurance partners in excess of its deductibles, spare parts that are not separately capitalized for use in the repair and maintenance of its kiosks, the value of cases and labels used to vend and track discs, net of amortization, and various prepayments for operating expenses including software licenses when not determined to be a component of property and equipment. |
Accrued and Other Current Liabilities | Accrued and Other Current Liabilities Accrued and other current liabilities generally consist of estimated total amounts due under contractual revenue-sharing arrangements with the Company’s content providers net of payments made during the respective title’s rental period, employee related liabilities primarily related to compensation, deferred revenue related to stored-value arrangements and the Company’s loyalty program, estimated income taxes payable, sales and rental-related taxes collected from the Company’s consumers on behalf of governmental entities, estimated gross amounts due for insurance claims incurred but not recorded, and various other estimates of amounts due but not invoiced for goods and services from the Company’s operational vendors. | Accrued and Other Current Liabilities Accrued and other current liabilities generally consist of estimated total amounts due under contractual revenue-sharing arrangements with the Company’s content providers net of payments made during the respective title’s rental period, employee related liabilities primarily related to compensation, deferred revenue related to stored-value arrangements and the Company’s loyalty program, estimated income taxes payable, sales and rental-related taxes collected from the Company’s consumers on behalf of governmental entities, estimated gross amounts due for insurance claims incurred but not recorded, and various other estimates of amounts due but not invoiced for goods and services from the Company’s operational vendors. |
Loss Contingencies | Loss Contingencies The Company accrues estimated liabilities for loss contingencies arising from claims, assessments, litigation and other sources when it is probable that a liability has been incurred and the amount of the claim assessment or damages can be reasonably estimated. The Company believes it has sufficient accruals to cover any obligations resulting from claims, assessments or litigation that have met these criteria. | Loss Contingencies The Company accrues estimated liabilities for loss contingencies arising from claims, assessments, litigation and other sources when it is probable that a liability has been incurred and the amount of the claim assessment or damages can be reasonably estimated. The Company believes it has sufficient accruals to cover any obligations resulting from claims, assessments or litigation that have met these criteria. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Certain financial assets and liabilities are required to be carried at fair value. Fair value is the price that would be received to sell an asset, or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. In determining fair value, the Company utilizes market data or assumptions that it believes market participants would use in pricing the asset or liability, which would maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, including assumptions about risk and the risks inherent in the inputs to the valuation technique. In evaluating the fair value measurement techniques for recording certain financial assets and liabilities, there is a three-level valuation hierarchy under which financial assets and liabilities are designated. The determination of the applicable level within the hierarchy of a particular financial asset or liability depends on the inputs used in valuation as of the measurement date. Valuations based on observable or market-based inputs for identical asset or liabilities (Level 1 measurement) are given the highest level of priority, whereas valuations based on unobservable or internally derived inputs (Level 3 measurement) are given the lowest level of priority. The three levels of the fair value hierarchy are defined as follows: ● Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities; ● Level 2: Inputs other than Level 1 inputs that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or market-corroborated inputs; or ● Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying amounts for the Company’s cash equivalents approximate fair value because of the short-term nature of these instruments. The fair value of the Company’s long-term debt approximates its carrying amount, which is presented net of unamortized deferred financing costs. | Fair Value of Financial Instruments Certain financial assets and liabilities are required to be carried at fair value. Fair value is the price that would be received to sell an asset, or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. In determining fair value, the Company utilizes market data or assumptions that it believes market participants would use in pricing the asset or liability, which would maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, including assumptions about risk and the risks inherent in the inputs to the valuation technique. In evaluating the fair value measurement techniques for recording certain financial assets and liabilities, there is a three-level valuation hierarchy under which financial assets and liabilities are designated. The determination of the applicable level within the hierarchy of a particular financial asset or liability depends on the inputs used in valuation as of the measurement date. Valuations based on observable or market-based inputs for identical asset or liabilities (Level 1 measurement) are given the highest level of priority, whereas valuations based on unobservable or internally derived inputs (Level 3 measurement) are given the lowest level of priority. The three levels of the fair value hierarchy are defined as follows: ● Level 1 : Observable inputs such as quoted prices in active markets for identical assets or liabilities; ● Level 2 : Inputs other than Level 1 inputs that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or market-corroborated inputs; or ● Level 3 : Unobservable inputs that reflect the reporting entity’s own assumptions. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying amounts for the Company’s cash equivalents approximate fair value because of the short-term nature of these instruments. The fair value of the Company’s long-term debt approximates its carrying amount, which is presented net of unamortized deferred financing costs. |
Derivative Instruments | Derivative Instruments The Company is exposed to certain market risks relating to interest rates. The Company actively monitors and attempts to mitigate but does not eliminate these exposures using derivative instruments including interest rate swaps. The Company does not enter into derivative instruments for speculative or trading purposes. The Company recognizes its derivatives as either assets or liabilities and measure those instruments at estimated fair value. The Company presents its derivative positions gross on its unaudited Condensed Consolidated Balance Sheets Condensed Consolidated Statements of Operations | Derivative Instruments The Company is exposed to certain market risks relating to interest rates. The Company actively monitors and attempts to mitigate but does not eliminate these exposures using derivative instruments including interest rate swaps. The Company does not enter into derivative instruments for speculative or trading purposes. The Company recognizes its derivatives as either assets or liabilities and measure those instruments at estimated fair value. The Company presents its derivative positions gross on its Consolidated Balance Sheets. The Company records changes in the fair value of derivatives as a component of other expense, net on its Consolidated Statements of Operations. |
COVID-19 Pandemic | COVID-19 Pandemic The Company is continuing to closely monitor the impact of the COVID-19 pandemic and is continually assessing its potential effects on its business and its financial performance as well as the impact of COVID-19 on its customers, employees, and vendors, including retail and studio partners. The Company cannot predict the duration or severity of the COVID-19 pandemic, and cannot reasonably estimate the financial impact that the COVID-19 outbreak will have on its results and significant estimates going forward. | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Guidance Recently Adopted: In August 2018, the FASB issued ASU 2018-05, Intangibles-Goodwill and Other-Internal-Use-Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. In March 2019, the FASB issued ASU 2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials (Subtopic 926-20) Accounting Guidance Not Yet Adopted: In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) | Recent Accounting Pronouncements Accounting Guidance Not Yet Adopted: In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (ASU 2020-04), which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuance of LIBOR or another referenced rate. ASU 2020-04 is effective for fiscal years beginning after December 31, 2022. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) to simplify the accounting for income taxes. This guidance removes certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. The guidance also clarifies and simplifies other areas of ASC 740. This standard is effective for private companies for fiscal years beginning after December 15, 2021. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use-Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. The ASU requires a customer in a cloud computing arrangement (i.e., hosting arrangement) that is a service contract to follow the internal-use software guidance in ASC 350-40 to determine whether to capitalize certain implementation costs or expense them as incurred. For private companies, the guidance is effective for reporting periods beginning after December 15, 2020. The Company is currently evaluating the impact of adopting this ASU, and does not expect a material impact on its consolidated financial statements and related disclosures. In March 2019, the FASB issued ASU 2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials (Subtopic 926-20), in order to align the accounting for production costs of an episodic television series with the accounting for production costs of films by removing the content distinction for capitalization. ASU 2019-02 also requires that an entity reassess estimates of the use of a film in a film group and account for any changes prospectively. In addition, 2019-02 requires that an entity test films and license agreements for impairment at a film group level when the film or license agreements are predominantly monetized with other films and license agreements. For private companies, the guidance is effective for reporting periods beginning after December 15, 2020. The Company is currently evaluating the impact of adopting this ASU, and does not expect a material impact on its consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The ASU requires lessees, among other things, to recognize lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous authoritative guidance. This update also introduces new disclosure requirements for leasing arrangements. For private companies, the guidance is effective for reporting periods beginning after December 15, 2021, with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326). The ASU provides new guidance regarding measurement and recognition of credit impairment for certain financial assets. Such guidance will impact how the Company determines its allowance for estimated uncollectible receivables. For private companies, the guidance is effective for reporting periods beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Basis of Presentation | ||
Schedule of Aggregation of Revenue | Nine Months Ended September 30, 2021 2020 Wal-Mart Stores Inc. 13.0 % 14.2 % Walgreen Co. 12.2 % 15.0 % | 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 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Property and Equipment | ||
Schedule of property and equipment | September 30, December 31, Dollars in thousands 2021 2020 Kiosks and components $ 190,202 $ 190,416 Computers, servers, and software 96,352 87,113 Leasehold improvements 4,145 3,991 Office furniture and equipment 676 676 Leased Vehicles 10,436 10,678 Property and equipment, at cost $ 301,811 $ 292,874 Accumulated depreciation (256,600) (229,785) Property and equipment, net $ 45,211 $ 63,089 | December 31, December 31, Dollars in thousands 2020 2019 Kiosks and components $ 190,416 $ 186,158 Computers, servers, and software 87,113 73,730 Leasehold improvements 3,991 4,978 Office furniture and equipment 676 876 Leased Vehicles 10,678 11,813 Property and equipment, at cost $ 292,874 $ 277,555 Accumulated depreciation (229,785) (167,672) Property and equipment, net $ 63,089 $ 109,883 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Goodwill and Other Intangible Assets | ||
Summary of changes in goodwill by reportable segment | Legacy Digital Dollars in thousands Business Business Total Balance as of December 31, 2020 $ 144,014 $ 3,509 $ 147,523 Balance as of September 30, 2021 $ 144,014 $ 3,509 $ 147,523 | Legacy Digital Dollars in thousands Business Business Total Balance as of December 31, 2018 $ 144,014 $ 3,509 $ 147,523 Balance as of December 31, 2019 $ 144,014 $ 3,509 $ 147,523 Balance as of December 31, 2020 $ 144,014 $ 3,509 $ 147,523 |
Summary of carrying amounts and accumulated amortization of intangible assets | September 30, 2021 December 31, 2020 Gross Net Gross Net Estimated Carrying Accumulated Carrying Carrying Accumulated Carrying Dollars in thousands Useful Life Amount Amortization Amount Amount Amortization Amount Intangible assets subject to amortization: Contracts with retailers 7 years $ 370,000 $ (264,873) $ 105,127 $ 370,000 $ (225,230) $ 144,770 Trade name 7 years 60,000 (42,953) 17,047 60,000 (36,524) 23,476 Contactable customer list 7 years 40,000 (28,635) 11,365 40,000 (24,349) 15,651 Developed technology 7 years 30,000 (21,476) 8,524 30,000 (18,262) 11,738 Total intangible assets subject to amortization $ 500,000 $ (357,937) $ 142,063 $ 500,000 $ (304,365) $ 195,635 | December 31, 2020 December 31, 2019 Gross Net Gross Net Estimated Carrying Accumulated Carrying Carrying Accumulated Carrying Dollars in thousands Useful Life Amount Amortization Amount Amount Amortization Amount Intangible assets subject to amortization: Contracts with retailers 7 years $ 370,000 $ (225,230) $ 144,770 $ 370,000 $ (172,373) $ 197,627 Trade name 7 years 60,000 (36,524) 23,476 60,000 (27,952) 32,048 Contactable customer list 7 years 40,000 (24,349) 15,651 40,000 (18,635) 21,365 Developed technology 7 years 30,000 (18,262) 11,738 30,000 (13,977) 16,023 Total intangible assets subject to amortization $ 500,000 $ (304,365) $ 195,635 $ 500,000 $ (232,937) $ 267,063 |
Accrued and Other Current Lia_2
Accrued and Other Current Liabilities (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Accrued and Other Current Liabilities | ||
Summary of accrued expenses and other current liabilities | September 30, December 31, Dollars in thousands 2021 2020 Accrued payroll and other related expenses $ 20,776 $ 24,212 Accrued revenue share 12,669 13,480 Deferred revenue 11,203 10,019 Income taxes payable — 15,777 Other 15,414 12,466 Total accrued and other current liabilities $ 60,062 $ 75,954 | Accrued and other current liabilities as of December 31, 2020 and 2019, consisted of the following: December 31, December 31, Dollars in thousands 2020 2019 Accrued payroll and other related expenses $ 24,212 $ 22,860 Accrued revenue share 13,480 20,976 Deferred revenue 10,019 11,570 Income taxes payable 15,777 15,777 Other 12,466 14,706 Total accrued and other current liabilities $ 75,954 $ 85,889 |
Debt (Tables)
Debt (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Debt | ||
Summary of debt | September 30, December 31, Dollars in thousands 2021 2020 Term Loan Facility $ 306,563 $ 281,563 Paid-In-Kind Interest related to Term Loan Facility 24,186 — Revolving Credit Facility 30,000 30,000 Paid-In-Kind Interest related to Revolving Credit Facility 2,227 — Union Revolving Credit Facility 4,590 2,550 Total debt outstanding $ 367,566 $ 314,113 Less: Unamortized debt issuance costs (5,676) (6,639) Total debt, net $ 361,890 $ 307,474 Portion due within one year $ — $ — Total long-term debt, net $ 361,890 $ 307,474 | December 31, December 31, Dollars in thousands 2020 2019 Term B Facility $ 281,563 $ 318,750 Revolving Credit Facility 30,000 — Union Revolving Credit Facility 2,550 — Total debt outstanding $ 314,113 $ 318,750 Less: Unamortized debt issuance costs (6,639) (10,212) Total debt, net $ 307,474 $ 308,538 Portion due within one year $ — $ 63,750 Total long-term debt, net $ 307,474 $ 244,788 |
Summary of required minimum principal amortization payments | Required minimum principal amortization payments under the Term Loan Facility as of September 30, 2021, are as follows: Repayment Dollars in thousands Amount Remaining 2021 $ — 2022 — 2023 330,749 Total $ 330,749 | Dollars in thousands Repayment 2021 $ — 2022 — 2023 281,563 Total $ 281,563 |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Derivatives | ||
Summary of balance sheet location of the Company's derivative instrument | Balance Sheet September 30, December 31, Dollars in thousands Location 2021 2020 Derivatives not designated as hedging instruments: Interest rate swap contract Other liabilities $ 461 $ 4,782 | Balance Sheet December 31, December 31, Dollars in thousands Location 2020 2019 Derivatives not designated as hedging instruments: Interest rate swap contract Other $ 4,782 $ 5,253 |
Summary of effect of company's derivative instrument on the Consolidated Statements of Operations | For the nine months ended September 30, Dollars in thousands 2021 2020 Other (income) expense, net $ (899) $ 4,324 | For the years ended December 31, Dollars in thousands 2020 2019 2018 Other expense, net $ 4,341 $ 3,946 $ 3,012 |
Segment Information and Geogr_2
Segment Information and Geographic Data (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Segment Information and Geographic Data | ||
Summary of financial information by segment | Summarized financial information by segment is as follows: Nine Months Ended September 30, Dollars in thousands 2021 2020 Net revenue Legacy Business $ 192,025 $ 433,215 Digital Business 24,347 31,993 Total $ 216,372 $ 465,208 Adjusted EBITDA Legacy Business $ (8,940) $ 106,133 Digital Business 2,257 3,642 Total $ (6,683) $ 109,775 | Summarized financial information by segment is as follows: For the years ended December 31, Dollars in thousands 2020 2019 2018 Net revenue Legacy Business $ 506,437 $ 838,627 $ 1,077,731 Digital Business 39,754 19,743 10,052 Total $ 546,191 $ 858,370 $ 1,087,783 Adjusted EBITDA Legacy Business $ 109,074 $ 197,887 $ 289,765 Digital Business 4,702 (2,238) 2,281 Total $ 113,776 $ 195,649 $ 292,046 |
Summary of reconciliation of Adjusted EBITDA to (loss) income before income | The following is a reconciliation of Adjusted EBITDA to loss before income taxes for the nine months ended September 30, 2021 and 2020: Nine Months Ended September 30, Dollars in thousands 2021 2020 Loss before income taxes $ (123,841) $ (52,612) Add: Depreciation and amortization 81,317 108,316 Interest and other expense, net 24,687 24,848 Business optimization (a) 5,605 15,142 One-time non-recurring (b) 2,737 5,934 New business start-up costs (c) 1,004 4,821 Restructuring related (d) 1,808 3,326 Adjusted EBITDA $ (6,683) $ 109,775 (a) Business optimization costs include employee retention costs, IT costs as well as consulting costs for certain projects. For the nine months ended September 30, 2021 and 2020 the Company recorded IT costs of $2.2 million and $4.4 million, respectively. The Company recorded employee retention expense of $3.2 million and $10.7 million for each of the nine months ended September 30, 2021 and 2020, respectively. (b) Includes costs related to project costs and initiatives, as well as bank, legal and other fees in connection with the Company’s debt financing activities. (c) Includes costs to support the Company’s On Demand and AVOD offerings, along with costs related to the Company’s service and media network businesses. (d) Restructuring related costs include such items as employee severance charges and costs incurred related to removing kiosks. | The following is a reconciliation of Adjusted EBITDA to (loss) income before income for the years ended December 31, 2020, 2019 and 2018: Year ended December 31, Dollars in thousands 2020 2019 2018 (Loss) income before income taxes $ (94,707) $ (14,823) $ 80,908 Add: Depreciation and amortization 136,838 138,274 133,493 Interest and other expense, net 32,522 44,578 45,155 Business optimization (a) 19,011 7,687 1,227 One-time non-recurring (b) 10,600 5,482 13,229 New business start-up costs (c) 6,041 3,793 10,060 Restructuring related (d) 3,471 4,432 625 Discontinuation of games business (e) — 6,226 7,349 Adjusted EBITDA $ 113,776 $ 195,649 $ 292,046 (a) Business optimization costs include employee retention costs, IT costs as well as consulting costs for certain projects. Retention costs for the years ended 2020 and 2019 were $13.9 million and $3.0 million, respectively. In 2020, retention awards were paid out to all employees in light of the COVID pandemic and were in lieu of the Company’s short-term incentive program. IT costs of $4.8 million and $3.8 million were incurred in 2020 and 2019 respectively. The Company’s IT project is a complete restructuring of the Company’s technologies as it to moves to a cloud-based infrastructure. (b) Includes costs related to project costs and initiatives, as well as bank, legal and other fees in connection with the Company’s debt financing activities. (c) Includes costs to support the Company’s On Demand and AVOD offerings, along with costs related to the Company’s service and media network businesses. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Earnings Per Share | ||
Summary of calculation of EPS | The following is a calculation of EPS: Nine Months Ended September 30, Dollars in thousands, except per share amounts 2021 2020 Basic and Diluted EPS Net loss attributable to shareholders $ (92,938) $ (39,135) Weighted average outstanding 30,839,870 27,870,539 Basic and diluted common $ (3.01) $ (1.40) | The following is a calculation of EPS (in thousands, except share and per share amounts): Year ended December 31, 2020 2019 2018 Basic EPS Net (loss) income attributable to shareholders $ (69,503) $ (7,567) $ 61,453 Weighted average shares outstanding for basic earnings (loss) per share 27,906,742 27,779,339 27,623,415 Basic earnings (loss) per common shares attributable to shareholders $ (2.49) $ (0.27) $ 2.22 Diluted EPS Net (loss) income attributable to shareholders $ (69,503) $ (7,567) $ 61,453 Weighted average shares outstanding for basic earnings (loss) per share: 27,906,742 27,779,339 27,623,415 Dilutive effect of restricted stock units — — 573,993 Weighted average shares outstanding for diluted earnings (loss) per share 27,906,742 27,779,339 28,197,409 Diluted earnings (loss) per common share attributable to shareholders $ (2.49) $ (0.27) $ 2.18 |
Commitments and Contingencies_3
Commitments and Contingencies (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies | ||
Summary of assets held under capital leases included in property and equipment, net | Assets held under capital leases are included in Property and equipment, net Condensed Consolidated Balance Sheets September 30, December 31, Dollars in thousands 2021 2020 Gross property and equipment $ 10,436 $ 10,677 Accumulated depreciation (6,981) (5,204) Net property and equipment $ 3,455 $ 5,473 | |
Summary of future minimum lease payments under contractual lease obligations | Total estimated movie content commitments under the terms of the Company’s content license agreements in effect as of September 30, 2021 is presented in the following table: Dollars in thousands Total 2021 2022 Minimum estimated movie content commitments $ 28,714 $ 7,979 $ 20,735 | |
Summary of minimum estimated movie content commitments | Dollars in thousands Total 2021 2022 Minimum estimated movie content commitments $ 28,714 $ 7,979 $ 20,735 | Dollars in thousands Total 2021 2022 Minimum estimated movie content commitments $ 59,788 $ 38,319 $ 21,469 |
Related-Party Transactions (Tab
Related-Party Transactions (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Related Party Transactions | ||
Summary of the amounts due to from such related parties | September 30, December 31, Dollars in thousands 2021 2020 Due from related party $ 162 $ 73 Due to related parties, net $ 357 $ 449 | December 31, December 31, Dollars in thousands 2020 2019 Due from related party $ 73 $ 2,712 Due to related parties, net $ 449 $ 1,477 |
Additional Supplemental Cash _2
Additional Supplemental Cash Flow Financial Information (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Additional Supplemental Cash Flow Financial Information | ||
Schedule of supplemental cash flow financial information | Cash, Cash Equivalents and Restricted Cash: September 30, December 31, Dollars in thousands 2021 2020 Cash and cash equivalents $ 9,798 $ 5,401 Restricted cash 3,360 3,526 Cash, cash equivalents and restricted cash $ 13,158 $ 8,927 Cash Interest and Taxes: Nine Months Ended September 30, Dollars in thousands 2021 2020 Cash paid during the period for interest $ — $ 20,853 Cash paid during the period for income taxes, net $ 622 $ 2,726 Non-cash Transactions Nine Months Ended September 30, Dollars in thousands 2021 2020 Purchases of property and equipment financed by capital lease obligations $ 28 $ 130 Purchases of property and equipment included in ending trade payables or accrued and other current liabilities $ 197 $ — | Cash, Cash Equivalents and Restricted Cash Year Ended December 31, Dollars in thousands 2020 2019 Cash and cash equivalents $ 5,401 $ 3,852 Restricted cash 3,526 3,526 Cash, cash equivalents and restricted cash $ 8,927 $ 7,378 Cash Interest and Taxes Year Ended December 31, Dollars in thousands 2020 2019 Cash paid during the period for interest $ 29,061 $ 36,659 Cash paid during the period for income taxes, net $ 2,993 $ 20,907 Non-cash Transactions Year Ended December 31, Dollars in thousands 2020 2019 Purchases of property and equipment financed by capital lease obligations $ 338 $ 6,051 Purchases of property and equipment included in ending trade payables or accrued and other current liabilities $ 653 $ 224 |
Description of Business (Detail
Description of Business (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021itemsegment | Dec. 31, 2020itemsegmentlocation | Oct. 22, 2021 | |
Network operations in number of self-service kiosks | 40,000 | 40,000 | |
Network operations in number of locations | 33,000 | 34,000 | |
Access given for minimum number of linear channels | 100 | ||
Number of operating segments | segment | 2 | 2 | |
Seaport Global Acquisition Corp | |||
Voting power in combined entity (in percentage) | 72.20% | ||
Additional voting power in combined entity held by one of the affiliates (in percentage) | 3.90% |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Basis of Presentation | |||||
Purchased but unredeemed promotional codes and gift cards deferred | $ 7,400 | $ 7,000 | $ 6,800 | ||
Deferred perks | 2,000 | 2,800 | 4,800 | ||
Advertising costs | $ 1,400 | $ 4,600 | $ 6,300 | 4,300 | $ 11,200 |
Vesting period | 5 years | 5 years | |||
Impairment losses | $ 0 | $ 0 | $ 0 |
Basis of Presentation - Schedul
Basis of Presentation - Schedule of Aggregation of Revenue (Details) | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Walgreen Co. | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 12.20% | 15.00% | |||
Wal-Mart Stores Inc. | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 13.00% | 14.20% | |||
Customer concentration | Walgreen Co. | Revenue | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 14.60% | 14.70% | 15.50% | ||
Customer concentration | Wal-Mart Stores Inc. | Revenue | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 13.80% | 18.30% | 18.20% | ||
Customer concentration | Legacy Business | Revenue | |||||
Concentration Risk [Line Items] | |||||
Concentration risk percentage | 10.00% |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, at cost | $ 301,811 | $ 292,874 | $ 277,555 |
Accumulated depreciation | (256,600) | (229,785) | (167,672) |
Property and equipment, net | 45,211 | 63,089 | 109,883 |
Kiosks and components | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, at cost | 190,202 | 190,416 | 186,158 |
Computers, servers, and software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, at cost | 96,352 | 87,113 | 73,730 |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, at cost | 4,145 | 3,991 | 4,978 |
Office furniture and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, at cost | 676 | 676 | 876 |
Leased Vehicles | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, at cost | $ 10,436 | $ 10,678 | $ 11,813 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Goodwill | $ 147,523 | $ 147,523 | $ 147,523 | $ 147,523 |
Legacy Business | ||||
Goodwill | 144,014 | 144,014 | 144,014 | 144,014 |
Digital Business | ||||
Goodwill | $ 3,509 | $ 3,509 | $ 3,509 | $ 3,509 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Intangible asset (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Gross Carrying Amount | $ 500,000 | $ 500,000 | $ 500,000 |
Accumulated Amortization | (357,937) | (304,365) | 232,937 |
Net Carrying Amount | $ 142,063 | $ 195,635 | 267,063 |
Contracts with retailers | |||
Estimated Useful Life | 7 years | 7 years | |
Gross Carrying Amount | $ 370,000 | $ 370,000 | 370,000 |
Accumulated Amortization | (264,873) | (225,230) | 172,373 |
Net Carrying Amount | $ 105,127 | $ 144,770 | 197,627 |
Trade name | |||
Estimated Useful Life | 7 years | 7 years | |
Gross Carrying Amount | $ 60,000 | $ 60,000 | 60,000 |
Accumulated Amortization | (42,953) | (36,524) | 27,952 |
Net Carrying Amount | $ 17,047 | $ 23,476 | 32,048 |
Contactable customer list | |||
Estimated Useful Life | 7 years | 7 years | |
Gross Carrying Amount | $ 40,000 | $ 40,000 | 40,000 |
Accumulated Amortization | (28,635) | (24,349) | 18,635 |
Net Carrying Amount | $ 11,365 | $ 15,651 | 21,365 |
Developed technology | |||
Estimated Useful Life | 7 years | 7 years | |
Gross Carrying Amount | $ 30,000 | $ 30,000 | 30,000 |
Accumulated Amortization | (21,476) | (18,262) | 13,977 |
Net Carrying Amount | $ 8,524 | $ 11,738 | $ 16,023 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Amortization (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill and Other Intangible Assets | |||||
Amortization of intangible assets | $ 53,572 | $ 53,571 | $ 71,428 | $ 71,428 | $ 71,428 |
Impairment of intangible assets | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Accrued and Other Current Lia_3
Accrued and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Accrued and Other Current Liabilities | |||
Accrued payroll and other related expenses | $ 20,776 | $ 24,212 | $ 22,860 |
Accrued revenue share | 12,669 | 13,480 | 20,976 |
Deferred revenue | 11,203 | 10,019 | 11,570 |
Income taxes payable | 15,777 | 15,777 | |
Other | 15,414 | 12,466 | 14,706 |
Total accrued and other current liabilities | $ 60,062 | $ 75,954 | $ 85,889 |
Debt - Summary of debt (Details
Debt - Summary of debt (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||
Total debt outstanding | $ 367,566 | $ 314,113 | $ 318,750 |
Less: Unamortized debt issuance costs | (5,676) | (6,639) | (10,212) |
Total debt, net | 361,890 | 307,474 | 308,538 |
Portion due within one year | 63,750 | ||
Total long-term debt, net | 361,890 | 307,474 | 244,788 |
Term B Facility | |||
Debt Instrument [Line Items] | |||
Total debt outstanding | 306,563 | 281,563 | $ 318,750 |
Paid-In-Kind Interest | 24,186 | ||
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Total debt outstanding | 30,000 | 30,000 | |
Paid-In-Kind Interest | 2,227 | ||
Union Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Total debt outstanding | $ 4,590 | $ 2,550 |
Debt - Credit Agreement (Detail
Debt - Credit Agreement (Details) - USD ($) $ in Millions | Oct. 20, 2017 | Dec. 31, 2020 |
Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Aggregate principal amount | $ 425 | |
Term of debt | 5 years | |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Aggregate principal amount | $ 30 | $ 30 |
Term of debt | 5 years |
Debt - Term Loan and Amendment
Debt - Term Loan and Amendment Agreement (Details) - USD ($) $ in Millions | Sep. 07, 2018 | Oct. 20, 2017 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||||||
Dividends to equity holders | $ 1 | $ 1.2 | $ 115.8 | |||
Payment of one or more restricted payments to shareholders | $ 115 | |||||
Term Loan Facility | ||||||
Debt Instrument [Line Items] | ||||||
Retirement of existing debt outstanding | $ 280 | $ 280 | ||||
Cost associated with debt | 19.5 | 19.5 | ||||
Dividends to equity holders | 160 | 160 | ||||
Write-off unamortized deferred financing costs | 21.7 | 21.7 | ||||
Aggregate principal amount | 425 | |||||
Term Loan B-1 facility | ||||||
Debt Instrument [Line Items] | ||||||
Cost associated with debt | 3.7 | |||||
Dividends to equity holders | 115 | |||||
Paid fees and expenses | 3.7 | |||||
Aggregate principal amount | 85.8 | 85.8 | ||||
Payment of one or more restricted payments to shareholders | $ 85.8 | |||||
Number of business days within which dividend was paid | 5 days | |||||
Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | 30 | $ 30 | ||||
Apollo Global Securities, LLC | Term Loan Facility | ||||||
Debt Instrument [Line Items] | ||||||
Cost associated with debt | $ 4.6 | $ 4.6 |
Debt - Union Revolving and Incr
Debt - Union Revolving and Incremental Fourth Amendment (Details) - USD ($) $ in Thousands | Jan. 29, 2021 | Dec. 29, 2020 | Oct. 20, 2017 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Sep. 29, 2020 |
LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Spread on variable rate | 1.00% | 1.00% | |||||
Union Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Term of debt | 4 years | ||||||
Maximum borrowing capacity | $ 20,000 | $ 20,000 | |||||
Borrowings outstanding | $ 4,600 | $ 2,550 | |||||
Commitment fee (as a percent) | 0.50% | 0.50% | |||||
Borrowing interest rate | 4.25% | 4.25% | |||||
Alternate base rate loans | Federal funds rate | |||||||
Debt Instrument [Line Items] | |||||||
Spread on variable rate | 1.00% | 1.00% | |||||
Alternate base rate loans | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Spread on variable rate | 1.00% | 1.00% | |||||
LIBOR loans | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Commitment fee (as a percent) | 0.50% | 0.50% | |||||
Senior Facilities | |||||||
Debt Instrument [Line Items] | |||||||
Commitment fee (as a percent) | 0.50% | 0.50% | |||||
Borrowing interest rate | 9.25% | 8.25% | 9.05% | ||||
Senior Facilities | Federal funds rate | |||||||
Debt Instrument [Line Items] | |||||||
Spread on variable rate | 0.50% | 0.50% | |||||
Senior Facilities | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Interst rate, floor | 1.00% | 1.00% | |||||
Eurocurrency Borrowings | |||||||
Debt Instrument [Line Items] | |||||||
Borrowing interest rate | 7.25% | 7.25% | |||||
Borrowing interest rate, if PIK interest paid | 8.25% | ||||||
ABR Borrowings | |||||||
Debt Instrument [Line Items] | |||||||
Borrowing interest rate | 6.25% | 6.25% | |||||
Borrowing interest rate, if PIK interest paid | 7.25% | ||||||
Term Loan Facility | |||||||
Debt Instrument [Line Items] | |||||||
Term of debt | 5 years |
Debt - First lien term loan (De
Debt - First lien term loan (Details) - USD ($) $ / shares in Units, $ in Thousands | May 16, 2021 | Dec. 31, 2018 | Sep. 30, 2021 | Jan. 29, 2021 | Dec. 31, 2020 | Sep. 07, 2018 | Oct. 20, 2017 |
Debt Instrument [Line Items] | |||||||
Maximum dividends payments | $ 1,030 | $ 1,030 | |||||
Dividends per common share declared | $ 3.28 | ||||||
Term Loan Facility | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount | $ 425,000 | ||||||
Term Loan B-1 facility | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount | $ 85,800 | $ 85,800 | |||||
cash proceeds from the business combination | $ 35,000 | ||||||
Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount | $ 30,000 | $ 30,000 | |||||
cash proceeds from the business combination | $ 15,000 | ||||||
New Outerwall | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount | $ 25,000 | ||||||
New Outerwall | Term Loan Facility | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount | $ 25,000 | ||||||
New Outerwall | Indirectly Wholly Owned [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Equity interests | 100.00% |
Debt - Interest Rates and Fees
Debt - Interest Rates and Fees (Details) | Jan. 29, 2021 | Dec. 29, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Senior Facilities | |||||
Debt Instrument [Line Items] | |||||
Commitment fee (as a percent) | 0.50% | 0.50% | |||
Borrowing interest rate | 9.25% | 8.25% | 9.05% | ||
ABR Borrowings | |||||
Debt Instrument [Line Items] | |||||
Borrowing interest rate | 6.25% | 6.25% | |||
Eurocurrency Borrowings | |||||
Debt Instrument [Line Items] | |||||
Borrowing interest rate | 7.25% | 7.25% | |||
Federal funds rate | Senior Facilities | |||||
Debt Instrument [Line Items] | |||||
Spread on variable rate | 0.50% | 0.50% | |||
Federal funds rate | Alternate base rate loans | |||||
Debt Instrument [Line Items] | |||||
Spread on variable rate | 1.00% | 1.00% | |||
LIBOR | |||||
Debt Instrument [Line Items] | |||||
Spread on variable rate | 1.00% | 1.00% | |||
LIBOR | Senior Facilities | |||||
Debt Instrument [Line Items] | |||||
Interst rate, floor | 1.00% | 1.00% | |||
LIBOR | Alternate base rate loans | |||||
Debt Instrument [Line Items] | |||||
Spread on variable rate | 1.00% | 1.00% | |||
LIBOR | LIBOR loans | |||||
Debt Instrument [Line Items] | |||||
Commitment fee (as a percent) | 0.50% | 0.50% |
Debt - Amortization and Prepaym
Debt - Amortization and Prepayments (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Required minimum principal amortization payments | |||
Total | $ 367,566 | $ 314,113 | $ 318,750 |
Senior Facilities | |||
Required minimum principal amortization payments | |||
2023 | 330,749 | 281,563 | |
Total | $ 330,749 | $ 281,563 |
Debt - Collateral and Guarantor
Debt - Collateral and Guarantors (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Debt | ||
Capital stock of the first-tier foreign subsidiaries pledged (as a percent) | 65.00% | 65.00% |
Debt - Letters of Credit (Detai
Debt - Letters of Credit (Details) - Standby Letters of Credit - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 3.4 | $ 3.4 | $ 3.4 |
Term of debt | 1 year | 1 year | 1 year |
Cash-collateralized (as a percent) | 105.00% | 105.00% | 105.00% |
Cash-collateralized through restricted cash balance | $ 3.5 | $ 3.5 | $ 3.5 |
Derivatives - Narratives (Detai
Derivatives - Narratives (Details) - USD ($) $ in Millions | Oct. 22, 2018 | Sep. 30, 2021 |
Derivative [Line Items] | ||
Fixed interest rate | 3.0335% | |
Total Interest Amount | $ 200 | |
Total interest rate | 10.2835 | |
Interest rate swap agreement | ||
Derivative [Line Items] | ||
Term of agreement | 3 years | 3 years |
Fixed notional amount | $ 200 | $ 200 |
Fixed interest rate | 3.0335% | |
Total interest rate | 10.2835 |
Derivatives - level 2 inputs (D
Derivatives - level 2 inputs (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Other Liabilities | Interest rate swap agreement | Derivatives not designated as hedging instrument | |||
Derivative [Line Items] | |||
Interest rate swap contract | $ 461 | $ 4,782 | $ 5,253 |
Derivatives (Details)
Derivatives (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Interest rate swap agreement | Derivatives not designated as hedging instrument | |||||
Derivative [Line Items] | |||||
Other (income) expense, net | $ (899) | $ 4,324 | $ 4,341 | $ 3,946 | $ 3,012 |
Segment Information and Geogr_3
Segment Information and Geographic Data (Details) | 6 Months Ended | 9 Months Ended | 12 Months Ended |
Jun. 30, 2021item | Sep. 30, 2021segmentitem | Dec. 31, 2020segmentitem | |
Segment Information and Geographic Data | |||
Number of operating segments | segment | 2 | 2 | |
Number of self-service kiosks where consumers can rent or purchase new-release DVDs and Blu-ray DiscsTM | 40,000 | 40,000 | |
Number of linear channels | 100 | 95 | |
Number of movies for consumer on demand service | 5,000 |
Segment Information and Geogr_4
Segment Information and Geographic Data - Summarized financial information by segment (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||||
Net revenue | $ 216,372 | $ 465,208 | $ 546,191 | $ 858,370 | $ 1,087,783 |
Adjusted EBITDA | (6,683) | 109,775 | 113,776 | 195,649 | 292,046 |
Legacy Business | |||||
Segment Reporting Information [Line Items] | |||||
Net revenue | 192,025 | 433,215 | 506,437 | 838,627 | 1,077,731 |
Adjusted EBITDA | (8,940) | 106,133 | 109,074 | 197,887 | 289,765 |
Digital Business | |||||
Segment Reporting Information [Line Items] | |||||
Net revenue | 24,347 | 31,993 | 39,754 | 19,743 | 10,052 |
Adjusted EBITDA | $ 2,257 | $ 3,642 | $ 4,702 | $ (2,238) | $ 2,281 |
Segment Information and Geogr_5
Segment Information and Geographic Data - Reconciliation of Adjusted EBITDA to (loss) income before income (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Information and Geographic Data | |||||
Loss before income taxes | $ (123,841) | $ (52,612) | $ (94,707) | $ (14,823) | $ 80,908 |
Depreciation and amortization | 81,317 | 108,316 | 136,838 | 138,274 | 133,493 |
Interest and other expense, net | 24,687 | 24,848 | |||
Business optimization(a) | 5,605 | 15,142 | 19,011 | 7,687 | 1,227 |
One-time non-recurring(b) | 2,737 | 5,934 | 10,600 | 5,482 | 13,229 |
New business start-up costs(c) | 1,004 | 4,821 | 6,041 | 3,793 | 10,060 |
Restructuring related(d) | 1,808 | 3,326 | 3,471 | 4,432 | 625 |
Adjusted EBITDA | $ (6,683) | $ 109,775 | $ 113,776 | $ 195,649 | $ 292,046 |
Segment Information and Geogr_6
Segment Information and Geographic Data - Business optimization costs (Details) - USD ($) $ in Millions | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Information and Geographic Data | ||||||
Retention costs | $ 3.2 | $ 10.7 | $ 13.9 | $ 3 | ||
IT costs | $ 2.2 | $ 4.4 | $ 4.8 | $ 3.8 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings Per Share | ||||
Potentially dilutive securities not included in the computation of diluted EPS because their effect would have been anti-dilutive. | 264,513 | 261,342 | 325,000 | 376,000 |
Earnings Per Share - Calculatio
Earnings Per Share - Calculation of EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Basic EPS | |||||
Net loss attributable to shareholders | $ (92,938) | $ (39,135) | $ (69,503) | $ (7,567) | $ 61,453 |
Basic weighted average shares outstanding | 30,839,870 | 27,870,539 | 27,906,742 | 27,779,339 | 27,623,415 |
Diluted weighted average shares outstanding | 30,839,870 | 27,870,539 | 27,906,742 | 27,779,339 | 28,197,409 |
Basic net income per share | $ (3.01) | $ (1.40) | $ (2.49) | $ (0.27) | $ 2.22 |
Diluted net income per share | $ (3.01) | $ (1.40) | $ (2.49) | $ (0.27) | $ 2.18 |
Diluted EPS | |||||
Net (loss) income attributable to shareholders | $ (69,503) | $ (7,567) | $ 61,453 | ||
Dilutive effect of restricted stock units | 573,993 |
Commitments and Contingencies_4
Commitments and Contingencies (Details) - USD ($) $ in Millions | Jan. 15, 2021 | Jan. 15, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Rent expense, net of sublease income | $ 1.9 | $ 1.8 | $ 2.5 | $ 2.6 | $ 2.4 | ||
Sony Pictures Home Entertainment | |||||||
Term of license agreement | 2 years | 2 years |
Commitments and Contingencies -
Commitments and Contingencies - Assets held under capital leases are included in Property and equipment, net on the Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, at cost | $ 301,811 | $ 292,874 | $ 277,555 |
Accumulated depreciation | (256,600) | (229,785) | (167,672) |
Property and equipment, net | 45,211 | 63,089 | 109,883 |
Assets held under capital leases | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, at cost | 10,436 | 10,677 | 11,813 |
Accumulated depreciation | (6,981) | (5,204) | (3,529) |
Property and equipment, net | $ 3,455 | $ 5,473 | $ 8,284 |
Commitments and Contingencies_5
Commitments and Contingencies - Total estimated movie content commitments (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Minimum estimated movie content commitments | ||
2021 | $ 7,979 | $ 38,319 |
2022 | 20,735 | 21,469 |
Contractual Obligation, Total | $ 28,714 | $ 59,788 |
Income Taxes - Rates (Details)
Income Taxes - Rates (Details) | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax | |||||
Effective Income Tax Rate Reconciliation, Percent | 25.00% | 25.60% | 26.60% | 48.90% | 24.00% |
Related-Party Transactions - Su
Related-Party Transactions - Summary of Related Parties (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Related Party Transactions | |||
Due from related party | $ 162 | $ 73 | $ 2,712 |
Due to related parties, net | $ 357 | $ 449 | $ 1,477 |
Related-Party Transactions - Na
Related-Party Transactions - Narrative (Details) - USD ($) $ in Millions | Jun. 29, 2021 | Sep. 30, 2021 | Jan. 29, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Related Party Transaction [Line Items] | |||||
Accrued and other current liabilities | $ 0 | $ 15.8 | $ 15.8 | ||
Reduce accrued and other current liabilities | $ 15.8 | ||||
Increase in additional paid in capital | $ 15.8 | ||||
Term B-2 Loan | |||||
Related Party Transaction [Line Items] | |||||
Aggregate principal amount | $ 25 | ||||
Subsequent event | Term B-2 Loan | |||||
Related Party Transaction [Line Items] | |||||
Aggregate principal amount | $ 25 |
Additional Supplemental Cash _3
Additional Supplemental Cash Flow Financial Information (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Additional Supplemental Cash Flow Financial Information | ||||||
Cash and cash equivalents | $ 9,798 | $ 5,401 | $ 3,852 | |||
Restricted cash | 3,360 | 3,526 | 3,526 | |||
Cash, cash equivalents and restricted cash | $ 13,158 | $ 8,927 | $ 5,448 | $ 7,378 | $ 10,446 | $ 9,183 |
Additional Supplemental Cash _4
Additional Supplemental Cash Flow Financial Information - Cash Interest and Taxes (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Additional Supplemental Cash Flow Financial Information | ||||
Cash paid during the period for interest | $ 20,853 | $ 29,061 | $ 36,659 | |
Cash paid during the period for income taxes, net | $ 622 | $ 2,726 | $ 2,993 | $ 20,907 |
Additional Supplemental Cash _5
Additional Supplemental Cash Flow Financial Information - Non Cash Transactions (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Additional Supplemental Cash Flow Financial Information | ||||
Purchases of property and equipment financed by capital lease obligations | $ 28 | $ 130 | $ 338 | $ 6,051 |
Purchases of property and equipment included in ending trade payables or accrued and other current liabilities | $ 197 | $ 653 | $ 224 |
Subsequent Events (Details)_2
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | Oct. 22, 2021 | Oct. 12, 2021 | Oct. 11, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Subsequent Event [Line Items] | ||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Subsequent event | ||||||
Subsequent Event [Line Items] | ||||||
Cash received from the Business Combination | $ 27 | |||||
Proceeds from business combination used to pay down outstanding indebtedness | 50 | |||||
Transaction costs | $ 13.9 | |||||
Subsequent event | Backstop Agreements | Class A Common Stock | ||||||
Subsequent Event [Line Items] | ||||||
Number of shares purchased | 3,564,356 | |||||
Common stock, par value | $ 0.0001 | |||||
Threshold number of common stock subject to redemption | 10,810,644 | |||||
Redemption price per share | $ 10.10 | |||||
Subsequent event | Fifth Amendment | ||||||
Subsequent Event [Line Items] | ||||||
Threshold Amount of Funds on Hand for Excess Cash Flow Sweep | $ 20 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Assets, Current [Abstract] | ||||||
Cash, cash equivalents and restricted cash | $ 13,158 | $ 8,927 | $ 5,448 | $ 7,378 | $ 10,446 | $ 9,183 |
Accounts receivable, net of allowances of $145 at December 31, 2020 and $346 at December 31, 2019 | 9,329 | 12,670 | 19,763 | |||
Due from related party (Note 12) | 162 | 73 | 2,712 | |||
Content library | 24,935 | 26,074 | 61,902 | |||
Income tax receivable | 10,222 | 10,498 | 7,433 | |||
Prepaid expenses and other current assets | 9,446 | 6,949 | 10,204 | |||
Total current assets | 67,252 | 65,191 | 109,392 | |||
Property and equipment, net (Note 3) | 45,211 | 63,089 | 109,883 | |||
Goodwill, net (Note 4) | 147,523 | 147,523 | 147,523 | 147,523 | ||
Intangible assets, net (Note 4) | 142,063 | 195,635 | 267,063 | |||
Other long-term assets | 723 | 1,653 | 3,198 | |||
Total Assets | 402,772 | 473,091 | 637,059 | |||
Liabilities, Current [Abstract] | ||||||
Trade payables | 31,161 | 26,719 | 82,065 | |||
Due to related parties, net | 357 | 449 | 1,477 | |||
Accrued and other current liabilities (Note 5) | 60,062 | 75,954 | 85,889 | |||
Current portion of long-term debt and other current liabilities (Note 6) | 63,750 | |||||
Total current liabilities | 91,580 | 103,122 | 233,181 | |||
Long-term debt, net (Note 6) | 361,890 | 307,474 | 244,788 | |||
Other long-term liabilities | 13,944 | 19,862 | 21,584 | |||
Deferred income taxes, net | 10,197 | 41,171 | 66,595 | |||
Total Liabilities | 477,611 | 471,629 | 566,148 | |||
Commitments and contingencies | ||||||
Stockholders' Equity Attributable to Parent [Abstract] | ||||||
Common stock, $0.0001 par value; 60,000,000 shares authorized as of September 30, 2021 and December 31, 2020; 31,274,065 and 27,962,554 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively | 3 | 3 | 3 | |||
Additional paid-in-capital | 239,722 | 223,085 | 223,084 | |||
Accumulated deficit | (314,564) | (221,626) | (152,176) | |||
Total Stockholders' Equity (Deficit) | (74,839) | 1,462 | $ 31,807 | 70,911 | $ 78,619 | $ 134,427 |
Total Liabilities and Stockholders' Equity (Deficit) | $ 402,772 | $ 473,091 | $ 637,059 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
CONDENSED BALANCE SHEETS | |||
Accounts receivable, allowance for doubtful accounts | $ 244 | $ 145 | $ 346 |
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 60,000,000 | 60,000,000 | 60,000,000 |
Common Stock, Shares, Issued | 31,274,065 | 27,962,554 | 27,962,554 |
Common Stock, Shares, Outstanding | 31,274,065 | 27,962,554 | 27,962,554 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CONDENSED STATEMENT OF OPERATIONS | |||
Net revenue | $ 546,191 | $ 858,370 | $ 1,087,783 |
Operating expenses: | |||
Product cost | 220,999 | 359,880 | 439,523 |
Direct operating | 167,090 | 237,490 | 274,155 |
Marketing | 21,214 | 25,813 | 33,020 |
General and administrative | 62,235 | 67,158 | 81,529 |
Depreciation and amortization | 136,838 | 138,274 | 133,493 |
Total operating expenses | 608,376 | 828,615 | 961,720 |
Loss from operations | (62,185) | 29,755 | 126,063 |
Nonoperating Income (Expense) [Abstract] | |||
Other expense, net | (32,522) | (44,578) | (45,155) |
Total other income (expense) | (32,522) | (44,578) | (45,155) |
(Loss) income before income taxes | (94,707) | (14,823) | 80,908 |
Income tax (benefit) expense | (25,204) | (7,256) | 19,455 |
Net income (loss) | $ (69,503) | $ (7,567) | $ 61,453 |
Basic (loss) earnings per share: | |||
Net loss per share attributable to common shareholders-Basic | $ (2.49) | $ (0.27) | $ 2.22 |
Weighted average shares used in computing net loss per share attributable to common shareholders- Basic | 27,906,742 | 27,779,339 | 27,623,415 |
Diluted (loss) earnings per share: | |||
Net loss per share attributable to common shareholders-diluted | $ (2.49) | $ (0.27) | $ 2.18 |
Weighted average shares used in computing net loss per share attributable to common shareholders- diluted | 27,906,742 | 27,779,339 | 28,197,409 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating activities: | |||
Net loss | $ (69,503) | $ (7,567) | $ 61,453 |
Adjustments to reconcile net income to net cash flows from operating activities: | |||
Depreciation | 65,537 | 66,534 | 58,153 |
Amortization of intangible assets | 71,428 | 71,428 | 71,428 |
(Gain) loss on sale/disposal of assets | (127) | 311 | 3,912 |
Deferred income taxes | (25,424) | (23,118) | (16,241) |
Amortization of deferred financing costs | 3,574 | 5,371 | 5,672 |
Non-cash rent, interest and other | 2,062 | 286 | 2,048 |
Cash flows from changes in net operating assets and liabilities: | |||
Accounts receivable | 7,094 | 12,534 | (1,427) |
Content library | 35,829 | 14,963 | 13,591 |
Income tax receivable | (3,065) | (2,063) | 8,206 |
Prepaid expenses and other current assets | 3,255 | 3,046 | (79) |
Other assets | 795 | (2,066) | 514 |
Trade payables | (53,790) | (18,507) | (28,371) |
Change in due to/from related parties | 2,640 | (2,189) | 716 |
Accrued and other liabilities | (10,612) | (16,166) | 5,875 |
Net cash flows (used in) provided by operating activities | 29,693 | 102,797 | 185,450 |
Investing Activities: | |||
Purchases of property and equipment | (21,053) | (33,005) | (42,870) |
Proceeds from disposition of property and equipment | 1,261 | 1,990 | 1,107 |
Other investments | 750 | (750) | |
Net cash flows used in investing activities | (19,042) | (31,765) | (41,763) |
Financing Activities: | |||
Proceeds from Redbox's borrowings | 32,550 | 7,500 | 99,281 |
Repayments of Redbox's debt obligations | (37,188) | (76,563) | (117,875) |
Dividends paid | (978) | (1,182) | (115,759) |
Financing costs | (3,676) | ||
Principal payments on capital lease obligations | (3,486) | (3,855) | (4,395) |
Net cash flows provided by (used in) financing activities | (9,102) | (74,100) | (142,424) |
Change in cash, cash equivalents and restricted cash | 1,549 | (3,068) | 1,263 |
Cash, cash equivalents and restricted cash: | |||
Cash - Beginning of period | 7,378 | 10,446 | 9,183 |
Cash - End of period | $ 8,927 | $ 7,378 | $ 10,446 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital | Accumulated Income (Deficit) | Total |
Balance at the beginning at Dec. 31, 2017 | $ 222,831 | $ (88,407) | $ 134,427 | |
Balance at the beginning (in shares) at Dec. 31, 2017 | 3 | |||
Dividends | (117,358) | (117,358) | ||
Share-based compensation plans and related activity | 97 | 97 | ||
Net income (loss) | 61,453 | 61,453 | ||
Balance at the end at Dec. 31, 2018 | 222,928 | (144,312) | 78,619 | |
Balance at the end (in shares) at Dec. 31, 2018 | 3 | |||
Dividends | (297) | (297) | ||
Share-based compensation plans and related activity | 156 | 156 | ||
Net income (loss) | (7,567) | (7,567) | ||
Balance at the end at Dec. 31, 2019 | $ 3 | 223,084 | (152,176) | 70,911 |
Balance at the end (in shares) at Dec. 31, 2019 | 3 | |||
Dividends | (53) | (53) | ||
Share-based compensation plans and related activity | (22) | (22) | ||
Net income (loss) | (39,135) | (39,135) | ||
Balance at the end at Sep. 30, 2020 | $ 3 | 223,062 | (191,258) | 31,807 |
Balance at the beginning at Dec. 31, 2019 | $ 3 | 223,084 | (152,176) | 70,911 |
Balance at the beginning (in shares) at Dec. 31, 2019 | 3 | |||
Dividends | (53) | (53) | ||
Share-based compensation plans and related activity | 1 | 1 | ||
Net income (loss) | (69,503) | (69,503) | ||
Balance at the end at Dec. 31, 2020 | $ 3 | 223,085 | (221,626) | 1,462 |
Balance at the end (in shares) at Dec. 31, 2020 | 3 | |||
Balance at the end at Dec. 31, 2020 | $ 3 | 223,085 | (221,626) | 1,462 |
Balance at the end (in shares) at Dec. 31, 2020 | 3 | |||
Balance at the beginning at Dec. 31, 2020 | $ 3 | 223,085 | (221,626) | 1,462 |
Balance at the beginning (in shares) at Dec. 31, 2020 | 3 | |||
Share-based compensation plans and related activity | 860 | 860 | ||
Net income (loss) | (92,938) | (92,938) | ||
Balance at the end at Sep. 30, 2021 | $ 3 | 239,722 | (314,564) | (74,839) |
Balance at the end at Sep. 30, 2021 | $ 3 | $ 239,722 | $ (314,564) | $ (74,839) |
Description of Business_2
Description of Business | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Organization and Business Operations | ||
Description of Business | Note 1: Description of Business Redwood Intermediate, LLC, a Delaware limited liability company, and subsidiaries (“Redbox” or the “Company”), operates self-serve kiosks in the United States where consumers can rent or purchase movies. As of September 30, 2021, the Company operated a network of approximately 40,000 self-service kiosks, in approximately 33,000 locations primarily at leading grocery stores, mass retailers, drug stores, dollar retailers, and convenience stores in every U.S. state and Puerto Rico (collectively the United States). Redbox is an established brand and leading provider in the home entertainment market in the United States. The Company is focused on providing its customers with the best value in entertainment and the most choice in how they consume it, through physical media and/or digital services. Redbox is undergoing a significant business expansion and digital transformation. The Company has transitioned from a pure-play DVD rental company to a multi- faceted entertainment company that provides tremendous value and choice by offering DVD rentals as well as multiple digital products across a variety of content windows including transactional (TVOD), ad-supported (AVOD), subscription (SVOD), and being a distributor of feature films with a growing library of original content. Redbox currently conducts its business through two operating segments: (1) Legacy Business and (2) Digital Business. For the Legacy Business, the Company operates a nationwide network of approximately 40,000 self-service kiosks where consumers can rent or purchase new-release DVDs and Blu-ray Discs TM (“movies”). The Company also generates service revenue by providing installation, merchandising and break-fix services to other kiosk businesses. Finally, the Company also produces, acquires, and distributes movies exclusively through its film distribution label, Redbox Entertainment, LLC, providing rights to talent-led films that are distributed across Redbox services as well as through third party digital services. For its Digital Business, the Company provides both transactional and ad-supported digital streaming services, which include 1) Redbox On Demand, a transactional service which provides digital rental or purchase of new release and catalog movies and TV content, 2) Redbox Free On Demand, an ad-supported service providing free movies and TV shows on demand, and 3) Redbox Free Live TV, a free, ad-supported television service giving access to over 100 linear channels. The Company is an indirect, wholly owned subsidiary of New Outerwall, Inc. (“New Outerwall”), a Delaware corporation, which is a direct, wholly owned subsidiary of Aspen Parent, Inc. (“Aspen”), a Delaware corporation. On September 27, 2016, Outerwall, Inc. (“Old Outerwall”) was acquired by an entity controlled by funds affiliated with or controlled by Apollo Global Management, LLC and its subsidiaries (“Apollo” or the “Sponsor”) (the “Apollo Acquisition”). In addition to its interest in Redbox, New Outerwall has interest in one other business under the brand name of Coinstar. On May 16, 2021, the Company became a party to a Business Combination Agreement with Seaport Global Acquisition Corp. (a publicly traded special purpose acquisition company ("Seaport")). The Business Combination closed on October 22, 2021. The Business Combination is accounted for as a reverse recapitalization in accordance with US GAAP. Under the guidance in ASC 805, Business Combinations For an update on the Business Combination Agreement with Seaport, see Note 14: Subsequent Events. | Note 1: Description of Business Redwood Intermediate, LLC, a Delaware limited liability company, and subsidiaries (“Redbox” or the “Company”), operates self-serve kiosks in the United States where consumers can rent or purchase movies. As of December 31, 2020, the Company operated a network of over 40,000 self-service kiosks, in approximately 34,000 locations primarily at leading grocery stores, mass retailers, drug stores, dollar retailers, and convenience stores in every U.S. state and Puerto Rico (collectively the United States). Redbox is an established brand and leading provider in the home video rental market in the United States. The Company is focused on providing its customers with the best value in entertainment and the most choice in how they consume it, through physical media and/or digital services. For its Legacy Business, the Company operates a nationwide network of approximately 40,000 self-service kiosks where consumers can rent or purchase new-release DVDs and Blu-ray Discs TM (“movies”). The Company also generates service revenue by providing installation, merchandising and break-fix services to other kiosk businesses. Finally, the Company also produces, acquires, and distributes movies exclusively through its film distribution label, Redbox Entertainment LLC, providing rights to talent-led films that are distributed across Redbox services as well as through third party digital services. For its Digital Business, the Company provides both transactional and ad-supported digital streaming services, which include 1) Redbox On Demand, a transactional service which provides digital rental or purchase of new release and catalog movies and TV content, 2) Redbox Free On Demand, an ad-supported service providing free movies and TV shows on demand, and 3) Redbox Free Live TV, a free, ad-supported television service giving access to 95 + linear channels. Redbox is undergoing a significant business expansion and digital transformation. The Company has transitioned from a pure-play DVD rental company to a multi-faceted entertainment company that provides tremendous value and choice by offering DVD rentals as well as multiple digital products across a variety of content windows including transactional (TVOD), ad-supported (AVOD), subscription (SVOD), and being a distributor of feature films with a growing library of original content. Redbox currently conducts its business through two operating segments: (1) Legacy Business and (2) Digital Business. The Company is an indirect, wholly owned subsidiary of New Outerwall, Inc. (“New Outerwall”), a Delaware corporation, which is a direct, wholly owned subsidiary of Aspen Parent, Inc. (“Aspen”), a Delaware corporation. On September 27, 2016, Outerwall, Inc. (“Old Outerwall”) was acquired by an entity controlled by funds affiliated with or controlled by Apollo Global Management, LLC and its subsidiaries (“Apollo” or the “Sponsor”) (the “Apollo Acquisition”). In addition to its interest in Redbox, New Outerwall has interest in one other business under the brand name of Coinstar. Up until December 2019, the Company also offered video games for rent or purchase through its kiosks. In December 2019, the Company withdrew from the video games business, which represented a very small percentage of its overall business. The Company believes that exiting the video games business allows it to generate more value at the kiosk by making more kiosk slots available for movies its customer seek, which drive the vast majority of its revenue and profitability. The last rental window for video games content expired prior to December 31, 2019. All purchasing, marketing, and distribution operations were discontinued by December 31, 2019. The Company completed final liquidation of its used video game inventory in April 2020, which were not material to the Company’s results of operations. |
Basis of Presentation_2
Basis of Presentation | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Basis of Presentation | ||
Basis of Presentation | Note 2: Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The unaudited financial information included herein has been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”). All significant intercompany balances and transactions between Redbox and its wholly owned subsidiaries have been eliminated in consolidation in the periods presented as discussed below. The accompanying unaudited condensed consolidated interim financial statements reflect all adjustments, consisting of normal recurring adjustments, that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented in accordance with U.S. GAAP. Certain information and disclosures normally included in the financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. As such, the information included herein should be read in conjunction with the consolidated financial statements and accompanying notes included in the consolidated audited financial statements as of and for the year ended December 31, 2020, included elsewhere in this prospectus. Amounts Due From/To Related Parties Any transactions between Redbox and its owners, employees or non-employee directors or Redbox and Coinstar are considered related party transactions, and any transactions between Redbox and New Outerwall and its affiliates are settled in cash pursuant to commercial services agreements. With respect to income taxes for all periods presented, while generally the Company is part of a consolidated group for income tax filings, the income tax benefits and provisions, income tax payables, related tax payments and deferred tax balances reported within have been prepared as if the Company operated as a standalone taxpayer. Deferred taxes have been classified as net liabilities in the unaudited Condensed Consolidated Balance Sheets Use of Estimates in Financial Reporting The Company’s consolidated financial statements are prepared in conformity with U.S. GAAP which requires management to make estimates and assumptions that affect the reported amounts in its consolidated financial statements and notes thereto. These estimates and assumptions take into account historical and forward-looking factors that the Company believes are reasonable, including but not limited to the potential impacts arising from COVID-19, and policies and initiatives aimed at reducing its transmission. As the extent and duration of the impacts from COVID-19 remain unclear, the Company’s estimates and assumptions may evolve as conditions change. The most significant estimates and assumptions include the: ● rate at which the economic benefit of the content library is consumed through rental activity; ● useful lives and recoverability of goodwill, definite-lived intangible assets, equipment and other long-lived assets; ● recognition and measurement of deferred income taxes (including the measurement of uncertain tax positions); and ● recognition and measurement of purchase price allocations for business combinations. It is reasonably possible that the estimates the Company makes may change in the future and could have a material effect on its consolidated financial statements. Summary of Significant Accounting Policies Revenue Recognition The Company recognizes revenue, net of sales tax, when it satisfies its performance obligations by transferring control of promised goods or services to its customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. 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. 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. A significant portion of the Company’s Legacy Business rental revenue is concentrated in kiosks installed with certain retail partners. Revenue aggregated at the following retailers accounted for 10% or more of the Company’s net revenue for the periods presented: Nine Months Ended September 30, 2021 2020 Wal-Mart Stores Inc. 13.0 % 14.2 % Walgreen Co. 12.2 % 15.0 % Promotional Codes and Gift Cards The Company 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 and other current liabilities As of September 30, 2021 and December 31, 2020, $7.4 million and $7.0 million, respectively, were deferred related to purchased but unredeemed promotional codes and gift cards and are included in Accrued and other current liabilities Condensed Consolidated Balance Sheets Loyalty Program In January 2018, the Company launched Redbox Perks. 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 so as 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 September 30, 2021 and December 31, 2020, $2.0 million and $2.8 million, respectively, of revenue was deferred related to Perks and is included in Accrued and other current liabilities Condensed Consolidated Balance Sheets Product Cost Product cost primarily represents the amortization of the Company’s physical content library and digital revenue sharing costs. Amortization of the content library is calculated using rental decay curves based on historical performance of movies over their useful lives to allocate content library costs to the periods over which the related revenue are earned. Given the steepness of the rental decay curve, amortization of the content library is recorded on an accelerated basis with substantially all of the content library cost recognized within the first year. The rental decay curves and salvage value of the Company’s content library are periodically reviewed and evaluated. For movies acquired through the Company's Redbox Entertainment label, costs include (1) the costs to acquire content, (2) manufacturing costs and (3) supply chain costs. These costs are capitalized as they are incurred and amortized in proportion to the current year's revenue as a percentage of management's estimate of total ultimate revenue, not to exceed the life of the acquired rights. Ultimate revenue estimates are periodically reviewed and adjustments, if any, will result in changes to amortization rates. Advertising Costs Advertising costs, which are included as a component of marketing expenses, include media expenses for local advertising, internet advertising, and sponsorship fees. The costs were $1.4 million and $4.6 million for the nine months ended September 30, 2021 and 2020, respectively. Share Based Compensation The Company grants share-based awards to select employees of the Company, consisting of restricted stock and performance stock units. Compensation expense is generally recognized for restricted stock units on a graded-vesting basis over the vesting period, which is generally five years. Compensation expense is generally recognized for performance stock units over the related vesting periods based on the grant-date fair value of the award when it becomes probable that the minimum return on Invested Capital (as defined under the plans) by Apollo will be satisfied. Award forfeitures are recognized at the time of occurrence. All awards granted are equity classified awards. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of deposit accounts. The Company’s cash balances with financial institutions may exceed the deposit insurance limits. The Company does not include outstanding amounts due from its payment card service providers for billed transactions in its cash balances, rather they are included in accounts receivable. Restricted Cash Restricted cash balances are cash balances established to secure the Company’s letter of credit requirement to support its insurance obligations and is presented as a short-term asset. See also Note 6: Debt. Content Library Content library is comprised of movies available for rent or purchase through the Company’s kiosks as well as movies acquired through the Company’s Redbox Entertainment label. For movies available for rent or purchase through the Company’s kiosks, movie content is obtained primarily through revenue sharing agreements and license agreements with studios, as well as through distributors and other suppliers. The cost of content mainly includes (1) the costs paid to studios and other vendors to acquire content including revenue share as applicable, (2) costs incurred to label, sort, and ship content to the Company’s kiosks for merchandising, (3) costs incurred to destroy content after use if required under contractual arrangements with studios and (4) indirect taxes, if applicable. For content that the Company expects to sell, management determines an estimated salvage value. Content salvage values are estimated based on the historical sales activity. The cost of each title is capitalized and amortized to its estimated salvage value using rental decay curves as discussed above under Product Cost. For movies acquired through the Company’s Redbox Entertainment label, costs include (1) the costs to acquire content, (2) manufacturing costs and (3) supply chain costs. These costs are capitalized as they are incurred and amortized in proportion to the current year's revenue as a percentage of management's estimate of total ultimate revenue, not to exceed the life of the acquired rights. Ultimate revenue estimates are periodically reviewed and adjustments, if any, will result in changes to amortization rates. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets are generally comprised of insurance-related receivables representing estimated amounts due from the Company’s insurance partners in excess of its deductibles, spare parts that are not separately capitalized for use in the repair and maintenance of its kiosks, the value of cases and labels used to vend and track discs, net of amortization, and various prepayments for operating expenses including software licenses when not determined to be a component of property and equipment. Accrued and Other Current Liabilities Accrued and other current liabilities generally consist of estimated total amounts due under contractual revenue-sharing arrangements with the Company’s content providers net of payments made during the respective title’s rental period, employee related liabilities primarily related to compensation, deferred revenue related to stored-value arrangements and the Company’s loyalty program, estimated income taxes payable, sales and rental-related taxes collected from the Company’s consumers on behalf of governmental entities, estimated gross amounts due for insurance claims incurred but not recorded, and various other estimates of amounts due but not invoiced for goods and services from the Company’s operational vendors. Loss Contingencies The Company accrues estimated liabilities for loss contingencies arising from claims, assessments, litigation and other sources when it is probable that a liability has been incurred and the amount of the claim assessment or damages can be reasonably estimated. The Company believes it has sufficient accruals to cover any obligations resulting from claims, assessments or litigation that have met these criteria. Fair Value of Financial Instruments Certain financial assets and liabilities are required to be carried at fair value. Fair value is the price that would be received to sell an asset, or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. In determining fair value, the Company utilizes market data or assumptions that it believes market participants would use in pricing the asset or liability, which would maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, including assumptions about risk and the risks inherent in the inputs to the valuation technique. In evaluating the fair value measurement techniques for recording certain financial assets and liabilities, there is a three-level valuation hierarchy under which financial assets and liabilities are designated. The determination of the applicable level within the hierarchy of a particular financial asset or liability depends on the inputs used in valuation as of the measurement date. Valuations based on observable or market-based inputs for identical asset or liabilities (Level 1 measurement) are given the highest level of priority, whereas valuations based on unobservable or internally derived inputs (Level 3 measurement) are given the lowest level of priority. The three levels of the fair value hierarchy are defined as follows: ● Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities; ● Level 2: Inputs other than Level 1 inputs that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or market-corroborated inputs; or ● Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying amounts for the Company’s cash equivalents approximate fair value because of the short-term nature of these instruments. The fair value of the Company’s long-term debt approximates its carrying amount, which is presented net of unamortized deferred financing costs. Derivative Instruments The Company is exposed to certain market risks relating to interest rates. The Company actively monitors and attempts to mitigate but does not eliminate these exposures using derivative instruments including interest rate swaps. The Company does not enter into derivative instruments for speculative or trading purposes. The Company recognizes its derivatives as either assets or liabilities and measure those instruments at estimated fair value. The Company presents its derivative positions gross on its unaudited Condensed Consolidated Balance Sheets Condensed Consolidated Statements of Operations COVID-19 Pandemic The Company is continuing to closely monitor the impact of the COVID-19 pandemic and is continually assessing its potential effects on its business and its financial performance as well as the impact of COVID-19 on its customers, employees, and vendors, including retail and studio partners. The Company cannot predict the duration or severity of the COVID-19 pandemic, and cannot reasonably estimate the financial impact that the COVID-19 outbreak will have on its results and significant estimates going forward. Recent Accounting Pronouncements Accounting Guidance Recently Adopted: In August 2018, the FASB issued ASU 2018-05, Intangibles-Goodwill and Other-Internal-Use-Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. In March 2019, the FASB issued ASU 2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials (Subtopic 926-20) Accounting Guidance Not Yet Adopted: In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) | Note 2: Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The audited financial information included herein has been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”). All significant intercompany balances and transactions between the Company and its wholly owned subsidiaries have been eliminated in consolidation in the periods presented as discussed below. Certain prior period amounts have been reclassified to conform with the current presentation. Amounts Due From/To Related Parties Any transactions between Redbox and its owners, employees or non-employee directors or Redbox and Coinstar are considered related party transactions, and any transactions between Redbox and New Outerwall and its affiliates are settled in cash pursuant to commercial services agreements. With respect to income taxes for all periods presented, while generally the Company is part of a consolidated group for income tax filings, the income tax benefits and provisions, income tax payables, related tax payments and deferred tax balances reported within have been prepared as if the Company operated as a standalone taxpayer. Deferred taxes have been classified as net liabilities in the Consolidated Balance Sheets. The Company remits cash to Aspen Parent or New Outerwall to settle any third-party, tax-related obligations, as determined if the Company operated as a standalone taxpayer. Use of Estimates in Financial Reporting The Company prepares its consolidated financial statements in conformity with U.S. GAAP which requires management to make estimates and assumptions that affect the reported amounts in its consolidated financial statements and notes thereto. These estimates and assumptions take into account historical and forward-looking factors that the Company believes are reasonable, including but not limited to the potential impacts arising from COVID-19, and policies and initiatives aimed at reducing its transmission. As the extent and duration of the impacts from COVID-19 remain unclear, the Company’s estimates and assumptions may evolve as conditions change. The most significant estimates and assumptions include the: ● rate at which the economic benefit of the content library is consumed through rental activity; ● useful lives and recoverability of goodwill, definite-lived intangible assets, equipment and other long-lived assets; ● recognition and measurement of deferred income taxes (including the measurement of uncertain tax positions); and It is reasonably possible that the estimates the Company makes may change in the future and could have a material effect on its consolidated financial statements. Summary of Significant Accounting Policies Revenue Recognition The Company recognizes revenue, net of sales tax, when it satisfies its performance obligations by transferring control of promised goods or services to its customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. 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. 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. A significant portion of the Company’s Legacy Business rental revenue is concentrated in kiosks installed with certain retail partners. Revenue aggregated at the following retailers accounted for 10% or more of the Company’s net revenue for the periods presented: Year Ended December 31, 2020 2019 2018 Walgreen Co. 14.6 % 14.7 % 15.5 % Wal-Mart Stores Inc. 13.8 % 18.3 % 18.2 % Promotional Codes and Gift Cards The Company 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 and other current liabilities 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, 2020 and December 31, 2019, $7.0 million and $6.8 million, respectively, were deferred related to purchased but unredeemed promotional codes and gift cards and are included in Accrued and other current liabilities in the accompanying Consolidated Balance Sheets. Loyalty Program In January 2018, the Company launched Redbox Perks. 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 so as 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, 2020 and December 31, 2019, $2.8 million and $4.8 million, respectively, of revenue was deferred related to Perks and is included in Accrued and other current liabilities in the accompanying Consolidated Balance Sheets. Product Cost Product cost primarily represents the amortization of the Company’s physical content library and digital revenue sharing costs. Amortization of the content library is calculated using rental decay curves based on historical performance of movies and games over their useful lives to allocate content library costs to the periods over which the related revenues are earned. Given the steepness of the rental decay curve, amortization of the content library is recorded on an accelerated basis with substantially all of the content library cost recognized within the first year. The rental decay curves and salvage value of the Company’s content library are periodically reviewed and evaluated. Advertising Costs Advertising costs, which are included as a component of marketing expenses, include media expenses for national and local advertising, internet advertising, and sponsorship fees. The costs were $6.3 million, $4.3 million and $11.2 million for the years ended December 31, 2020, 2019 and 2018, respectively. Related Parties Amounts received from Coinstar for payment of services rendered under the commercial services agreements are recorded as a reduction of expense. Any such receivables or payables that existed as of the balance sheet date, have been presented as Due from related party and Due to related parties, net balances in the accompanying Consolidated Balance Sheet and Consolidated Statements of Cash Flows. Additionally, Due to related parties, net includes unpaid dividends related to employees and Director stock awards. Right of offset is assumed for balances between Redbox and the same related counter party and, as such, are presented as net receivables or payables based on the net balances due to or from the respective counter parties as of the balance sheet date. Redbox is part of a consolidated filing group; income taxes are paid as a pass thru to either Aspen Parent Inc. or New Outerwall. The Company’s income tax obligations are presented as the amounts that would be owed if the Company had been a standalone taxpayer and are included in Accrued and other current liabilities Consolidated Balance Sheet Share Based Compensation The Company grants share-based awards to select employees of the Company, consisting of restricted stock and performance stock units. Compensation expense is generally recognized for restricted stock units on a graded-vesting basis over the vesting period, which is generally five years. Compensation expense is generally recognized for performance stock units over the related vesting periods based on the grant-date fair value of the award when it becomes probable that the minimum return on Invested Capital (as defined under the plans) by Apollo will be satisfied. Award forfeitures are recognized at the time of occurrence. All awards granted are equity classified awards. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of deposit accounts. The Company’s cash balances with financial institutions may exceed the deposit insurance limits. The Company does not include outstanding amounts due from its payment card service providers for billed transactions in its cash balances, rather they are included in accounts receivable. Restricted Cash Restricted cash balances are cash balances established to secure the Company’s letter of credit requirement to support its insurance obligations and is presented as a short-term asset. See also Note 6: Debt. Accounts Receivable Accounts receivable primarily represents receivables, net of allowances for doubtful accounts, from consumers for outstanding rental transactions and amounts due from the Company’s payment card service providers for billed transactions. The allowance for doubtful accounts primarily reflects management’s best estimate of amounts related to outstanding rental transactions that will not be collected. The Company determines the allowance based on historical experience and other currently available information. Content Library Content library consists of movies available for rent or purchase through the Company’s kiosks. The Company obtains its movie content primarily through revenue sharing agreements and license agreements with studios, as well as through distributors and other suppliers. The cost of content mainly includes (1) the costs paid to studios and other vendors to acquire content including revenue share as applicable, (2) costs incurred to label, sort, and ship content to the Company’s kiosks for merchandising, (3) costs incurred to destroy content after use if required under contractual arrangements with studios and (4) indirect taxes, if applicable. For content that the Company expects to sell, management determines an estimated salvage value. Content salvage values are estimated based on the historical sales activity. The cost of each title is capitalized and amortized to its estimated salvage value using rental decay curves as discussed above under Product Cost. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets are generally comprised of insurance-related receivables representing estimated amounts due from the Company’s insurance partners in excess of its deductibles, spare parts that are not separately capitalized for use in the repair and maintenance of its kiosks, the value of cases and labels used to vend and track discs, net of amortization, and various prepayments for operating expenses including software licenses when not determined to be a component of 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: 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 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. Intangible Assets Subject to Amortization The Company’s intangible assets subject to amortization comprise the value of its retailer relationships, the Redbox trade name, its contactable customer list, and developed technology as determined on the date of the Apollo Acquisition. The Company amortizes its intangible assets over their expected useful lives on a straight-line basis as the future pattern of consumption of the economic benefit derived from the identified intangible assets cannot be reliably determined. The Company annually reassess the useful lives of its intangible assets subject to amortization and the methods under which they are amortized. For further information, see Note 4: Goodwill and Other Intangible Assets. Goodwill Goodwill represents the excess purchase price of an acquired enterprise or assets over the estimated fair value of identifiable net assets acquired. Goodwill is evaluated for impairment annually during the fourth quarter, or more frequently if an event occurs or circumstances change that could more likely than not reduce the fair value of a reporting unit below its carrying value. As part of the Company’s impairment analysis, fair value of a reporting unit is determined using both the income and market approaches. The income approach requires management to estimate a number of factors for each reporting unit, including projected future operating results, economic projections, anticipated future cash flows and discount rates. For further information, see Note 4: Goodwill and Other Intangible Assets. Business Combinations The Company recognizes identifiable assets acquired and liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess purchase price of an acquired enterprise or assets over the estimated fair value of identifiable net assets acquired. Transaction costs associated with business combinations are expensed as incurred. Recoverability of Equipment and Other Long-Lived Assets The Company evaluates the estimated remaining life and recoverability of equipment and other assets, including intangible assets subject to amortization, whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Factors that would indicate potential impairment include, but are not limited to, significant decreases in the market value of the long-lived asset(s), a significant change in the long-lived asset’s use or physical condition, and operating or cash flow losses associated with the use of the long-lived asset. When there is an indication of impairment, the Company prepares an estimate of future undiscounted cash flows expected to result from the use of the asset and its eventual disposition to test recoverability. If the sum of the future undiscounted cash flows is less than the carrying value of the asset, it indicates that the long-lived asset is not recoverable, in which case the Company will then compare the estimated fair value to its carrying value. If the estimated fair value is less than the carrying value of the asset, the Company will recognize the impairment loss and adjust the carrying amount of the asset to its estimated fair value. No impairment losses have been recorded during years ended December 31, 2020, 2019 and 2018, respectively. Trade Payables Trade payables are primarily comprised of non-revenue share payments to the Company’s content partners, payments due to its retailer partners, and various other payments due for invoiced goods and services from its operational vendors. Accrued and Other Current Liabilities Accrued and other current liabilities generally consist of estimated total amounts due under contractual revenue-sharing arrangements with the Company’s content providers net of payments made during the respective title’s rental period, employee related liabilities primarily related to compensation, deferred revenue related to stored-value arrangements and the Company’s loyalty program, estimated income taxes payable, sales and rental-related taxes collected from the Company’s consumers on behalf of governmental entities, estimated gross amounts due for insurance claims incurred but not recorded, and various other estimates of amounts due but not invoiced for goods and services from the Company’s operational vendors. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, management determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under the tax law, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions in accordance with ASC 740, Income Taxes, on the basis of a two-step process in which (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, it will recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statements of operations. Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheet. Loss Contingencies The Company accrues estimated liabilities for loss contingencies arising from claims, assessments, litigation and other sources when it is probable that a liability has been incurred and the amount of the claim assessment or damages can be reasonably estimated. The Company believes it has sufficient accruals to cover any obligations resulting from claims, assessments or litigation that have met these criteria. Fair Value of Financial Instruments Certain financial assets and liabilities are required to be carried at fair value. Fair value is the price that would be received to sell an asset, or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. In determining fair value, the Company utilizes market data or assumptions that it believes market participants would use in pricing the asset or liability, which would maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, including assumptions about risk and the risks inherent in the inputs to the valuation technique. In evaluating the fair value measurement techniques for recording certain financial assets and liabilities, there is a three-level valuation hierarchy under which financial assets and liabilities are designated. The determination of the applicable level within the hierarchy of a particular financial asset or liability depends on the inputs used in valuation as of the measurement date. Valuations based on observable or market-based inputs for identical asset or liabilities (Level 1 measurement) are given the highest level of priority, whereas valuations based on unobservable or internally derived inputs (Level 3 measurement) are given the lowest level of priority. The three levels of the fair value hierarchy are defined as follows: ● Level 1 : Observable inputs such as quoted prices in active markets for identical assets or liabilities; ● Level 2 : Inputs other than Level 1 inputs that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or market-corroborated inputs; or ● Level 3 : Unobservable inputs that reflect the reporting entity’s own assumptions. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying amounts for the Company’s cash equivalents approximate fair value because of the short-term nature of these instruments. The fair value of the Company’s long-term debt approximates its carrying amount, which is presented net of unamortized deferred financing costs. Derivative Instruments The Company is exposed to certain market risks relating to interest rates. The Company actively monitors and attempts to mitigate but does not eliminate these exposures using derivative instruments including interest rate swaps. The Company does not enter into derivative instruments for speculative or trading purposes. The Company recognizes its derivatives as either assets or liabilities and measure those instruments at estimated fair value. The Company presents its derivative positions gross on its Consolidated Balance Sheets. The Company records changes in the fair value of derivatives as a component of other expense, net on its Consolidated Statements of Operations. Recent Accounting Pronouncements Accounting Guidance Not Yet Adopted: In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (ASU 2020-04), which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuance of LIBOR or another referenced rate. ASU 2020-04 is effective for fiscal years beginning after December 31, 2022. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) to simplify the accounting for income taxes. This guidance removes certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. The guidance also clarifies and simplifies other areas of ASC 740. This standard is effective for private companies for fiscal years beginning after December 15, 2021. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use-Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. The ASU requires a customer in a cloud computing arrangement (i.e., hosting arrangement) that is a service contract to follow the internal-use software guidance in ASC 350-40 to determine whether to capitalize certain implementation costs or expense them as incurred. For private companies, the guidance is effective for reporting periods beginning after December 15, 2020. The Company is currently evaluating the impact of adopting this ASU, and does not expect a material impact on its consolidated financial statements and related disclosures. In March 2019, the FASB issued ASU 2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials (Subtopic 926-20), in order to align the accounting for production costs of an episodic television series with the accounting for production costs of films by removing the content distinction for capitalization. ASU 2019-02 also requires that an entity reassess estimates of the use of a film in a film group and account for any changes prospectively. In addition, 2019-02 requires that an entity test films and license agreements for impairment at a film group level when the film or license agreements are predominantly monetized with other films and license agreements. For private companies, the guidance is effective for reporting periods beginning after December 15, 2020. The Company is currently evaluating the impact of adopting this ASU, and does not expect a material impact on its consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The ASU requires lessees, among other things, to recognize lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous authoritative guidance. This update also introduces new disclosure requirements for leasing arrangements. For private companies, the guidance is effective for reporting periods beginning after December 15, 2021, with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326). The ASU provides new guidance regarding measurement and recognition of credit impairment for certain financial assets. Such guidance will impact how the Company determines its allowance for estimated uncollectible receivables. For private companies, the guidance is effective for reporting periods beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures. |
Property and Equipment_2
Property and Equipment | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Property and Equipment | ||
Property and Equipment | Note 3: Property and Equipment September 30, December 31, Dollars in thousands 2021 2020 Kiosks and components $ 190,202 $ 190,416 Computers, servers, and software 96,352 87,113 Leasehold improvements 4,145 3,991 Office furniture and equipment 676 676 Leased Vehicles 10,436 10,678 Property and equipment, at cost $ 301,811 $ 292,874 Accumulated depreciation (256,600) (229,785) Property and equipment, net $ 45,211 $ 63,089 | Note 3: Property and Equipment December 31, December 31, Dollars in thousands 2020 2019 Kiosks and components $ 190,416 $ 186,158 Computers, servers, and software 87,113 73,730 Leasehold improvements 3,991 4,978 Office furniture and equipment 676 876 Leased Vehicles 10,678 11,813 Property and equipment, at cost $ 292,874 $ 277,555 Accumulated depreciation (229,785) (167,672) Property and equipment, net $ 63,089 $ 109,883 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Goodwill and Other Intangible Assets | ||
Goodwill and Other Intangible Assets | Note 4: Goodwill and Other Intangible Assets The following table summarizes the changes in goodwill by reportable segment: Legacy Digital Dollars in thousands Business Business Total Balance as of December 31, 2020 $ 144,014 $ 3,509 $ 147,523 Balance as of September 30, 2021 $ 144,014 $ 3,509 $ 147,523 The following table summarizes the carrying amounts and accumulated amortization of intangible assets: September 30, 2021 December 31, 2020 Gross Net Gross Net Estimated Carrying Accumulated Carrying Carrying Accumulated Carrying Dollars in thousands Useful Life Amount Amortization Amount Amount Amortization Amount Intangible assets subject to amortization: Contracts with retailers 7 years $ 370,000 $ (264,873) $ 105,127 $ 370,000 $ (225,230) $ 144,770 Trade name 7 years 60,000 (42,953) 17,047 60,000 (36,524) 23,476 Contactable customer list 7 years 40,000 (28,635) 11,365 40,000 (24,349) 15,651 Developed technology 7 years 30,000 (21,476) 8,524 30,000 (18,262) 11,738 Total intangible assets subject to amortization $ 500,000 $ (357,937) $ 142,063 $ 500,000 $ (304,365) $ 195,635 The Company recognized amortization expense of $53.6 million for each of the nine months ended September 30, 2021 and 2020. There was no impairment of goodwill and other intangible assets for the nine months ended September 30, 2021 and 2020. Certain events or circumstances that could reasonably be expected to negatively affect the underlying key assumptions and ultimately affect the estimated fair values of the Company’s reporting units include such items as: (i) a decrease in expected future new release movie titles resulting from the prolonged effects of the COVID-19 pandemic (ii) an increase in competition across streaming platforms resulting in fewer titles available at Redbox or fewer rental transactions and (iii) the inability to achieve cost savings or growth initiative targets within an expected timeframe. | Note 4: Goodwill and Other Intangible Assets Goodwill is evaluated for impairment annually during the fourth quarter, or more frequently if an event occurs or circumstances change that could more likely than not reduce the fair value of a reporting unit below its carrying value. During the fourth quarter of 2020, the Company completed a quantitative impairment analysis for goodwill related to its Legacy reporting unit, as a result of the significant impact of COVID-19 on its financial performance. Based on this analysis, the Company concluded the fair value of its Legacy reporting unit exceeded its carrying value and as such, no impairment charge was recorded. Based on the December 31, 2020 valuation date, the fair value of the Company’s Legacy reporting unit exceeded its carrying value. A quantitative analysis was not required related to the Digital reporting unit based on a qualitative analysis. As part of the Company’s impairment analysis, the determination of the fair value of the Company’s reporting units requires the Company to make significant estimates and assumptions including the business and financial performance of the Company’s reporting units, as well as how such performance may be impacted by COVID-19. These estimates and assumptions primarily include, but are not limited to: the selection of appropriate peer group companies, control premiums appropriate for acquisitions in the industries in which the Company competes, discount rates, terminal growth rates, forecasts of revenue, operating income, depreciation, amortization and capital expenditures, including considering the impact of COVID-19. Certain events or circumstances that could reasonably be expected to negatively affect the underlying key assumptions and ultimately affect the estimated fair values of the Company’s reporting units include such items as: (i) a decrease in expected future new release movie titles resulting from the prolonged effects of the COVID-19 pandemic (ii) an increase in competition across streaming platforms resulting in fewer titles available atRedbox or fewer rental transactions and (iii) the inability to achieve cost savings or growth initiative targets within an expected timeframe. Although the Company believes its estimates of fair value are reasonable, actual financial results could differ from those estimates due to the inherent uncertainty involved in making such estimates. Changes in assumptions concerning future financial results or other underlying assumptions, including the impact of COVID- 19, could have a significant impact on either the fair value of the reporting units, the amount of any goodwill impairment charges, or both. These estimates can be affected by a number of factors including, but not limited to, the impact of COVID-19, its severity, duration and its impact on global economies, general economic conditions as well as the Company’s profitability. The Company will continue to monitor these potential impacts, including the impact of COVID-19 and economic, industry and market trends and the impact these may have on its Legacy and Digital reporting units. The following table summarizes the changes in goodwill by reportable segment: Legacy Digital Dollars in thousands Business Business Total Balance as of December 31, 2018 $ 144,014 $ 3,509 $ 147,523 Balance as of December 31, 2019 $ 144,014 $ 3,509 $ 147,523 Balance as of December 31, 2020 $ 144,014 $ 3,509 $ 147,523 The following table summarizes the carrying amounts and accumulated amortization of intangible assets: December 31, 2020 December 31, 2019 Gross Net Gross Net Estimated Carrying Accumulated Carrying Carrying Accumulated Carrying Dollars in thousands Useful Life Amount Amortization Amount Amount Amortization Amount Intangible assets subject to amortization: Contracts with retailers 7 years $ 370,000 $ (225,230) $ 144,770 $ 370,000 $ (172,373) $ 197,627 Trade name 7 years 60,000 (36,524) 23,476 60,000 (27,952) 32,048 Contactable customer list 7 years 40,000 (24,349) 15,651 40,000 (18,635) 21,365 Developed technology 7 years 30,000 (18,262) 11,738 30,000 (13,977) 16,023 Total intangible assets subject to amortization $ 500,000 $ (304,365) $ 195,635 $ 500,000 $ (232,937) $ 267,063 The Company recognized amortization expense of $71.4 million for each of the years ended December 31, 2020, 2019 and 2018, respectively. Based on the amount of intangible assets subject to amortization as of December 31, 2020, the expected amortization for each of the next five fiscal years is as follows: Amortization of Dollars in thousands intangible assets 2021 $ 71,428 2022 71,428 2023 52,779 2024 — 2025 — Total expected amortization $ 195,635 No impairment of intangible assets were recognized for the years ended December 31, 2020, 2019 and 2018, respectively. |
Accrued and Other Current Lia_4
Accrued and Other Current Liabilities | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Accrued and Other Current Liabilities | ||
Accrued and Other Current Liabilities | Note 5: Accrued and Other Current Liabilities Accrued and other current liabilities as of September 30, 2021 and December 31, 2020, consisted of the following: September 30, December 31, Dollars in thousands 2021 2020 Accrued payroll and other related expenses $ 20,776 $ 24,212 Accrued revenue share 12,669 13,480 Deferred revenue 11,203 10,019 Income taxes payable — 15,777 Other 15,414 12,466 Total accrued and other current liabilities $ 60,062 $ 75,954 | Note 5: Accrued and Other Current Liabilities Accrued and other current liabilities as of December 31, 2020 and 2019, consisted of the following: December 31, December 31, Dollars in thousands 2020 2019 Accrued payroll and other related expenses $ 24,212 $ 22,860 Accrued revenue share 13,480 20,976 Deferred revenue 10,019 11,570 Income taxes payable 15,777 15,777 Other 12,466 14,706 Total accrued and other current liabilities $ 75,954 $ 85,889 |
Debt_2
Debt | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Debt | ||
Debt | Note 6: Debt September 30, December 31, Dollars in thousands 2021 2020 Term Loan Facility $ 306,563 $ 281,563 Paid-In-Kind Interest related to Term Loan Facility 24,186 — Revolving Credit Facility 30,000 30,000 Paid-In-Kind Interest related to Revolving Credit Facility 2,227 — Union Revolving Credit Facility 4,590 2,550 Total debt outstanding $ 367,566 $ 314,113 Less: Unamortized debt issuance costs (5,676) (6,639) Total debt, net $ 361,890 $ 307,474 Portion due within one year $ — $ — Total long-term debt, net $ 361,890 $ 307,474 On October 20, 2017, Redbox Automated Retail, LLC (“RAR”) entered into a credit agreement (“Credit Agreement”), which provided for: ● a first lien term loan facility (the “Term Loan B”), in an original aggregate principal amount of $425.0 million, with a five-year maturity; and ● a first lien revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Senior Facilities”), in an aggregate principal amount of up to $30.0 million, with a five-year maturity. The Term Loan B was made available to RAR immediately upon closing and was used in part to retire all $280.0 million of the Company’s existing debt and to settle closing costs associated with the new Term Loan B totaling $19.5 million of which $4.6 million was paid to Apollo Global Securities, LLC, an affiliate of Apollo, for services provided in connection with the financing. The balance of the Term Loan B proceeds were used towards a dividend, occurring on the same day, with total dividend of $160.0 million to equity holders of RAR. Additionally, at the execution of the new Credit Agreement, RAR wrote-off unamortized deferred financing costs of $21.7 million related to the extinguishment of the entire debt under the prior credit agreement. On September 7, 2018, RAR entered into an Incremental Assumption and Amendment Agreement (the “Amendment”) to the Credit Agreement. The Amendment provided for, among other things, (i) an incremental Term B-1 Loan (“Term Loan B-1”) in an original aggregate principal amount of $85.8 million and (ii) the payment of one or more restricted payments to shareholders of RAR in an aggregate amount not to exceed $115.0 million. The proceeds received from the Amendment along with cash flow from the business were used towards a dividend distribution to equity holders of RAR totaling $115.0 million that was paid within five On September 30, 2020, RAR entered into the second amendment to its Credit Agreement (the “Second Amendment”) to, among other things, to increase the total net leverage covenant during the remaining term of the Credit Agreement and revise the quarterly amortization payment schedule. On December 28, 2020, RAR entered into a third amendment to its Credit Agreement (the “Third Amendment”). The amendment deferred the December 2020 amortization payment to March 2021. As of December 31, 2020, RAR’s Senior Facilities matured on October 20, 2022, and subsequent to the Amendment, Second Amendment and Third Amendment consisted of: ● a first lien term loan B facility, in an aggregate principal amount of $425.0 million; ● a first lien term loan B-1 facility, in an aggregate principal amount of $85.8 million; and ● a first lien revolving credit facility, in an aggregate principal amount of up to $30.0 million. On December 29, 2020, Redbox Entertainment, LLC entered into a four-year, $20.0 million revolving credit facility with Union Bank (the “Union Revolving Credit 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. Borrowings outstanding under the Union Revolving Credit Facility as of September 30, 2021 and December 31, 2020 were $4.6 million and $2.55 million, respectively. Borrowings under the Union Revolving Credit Facility will 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 day, (ii) the federal funds effective rate in effect on such day plus 1⁄2 of , and (iii) daily one month LIBOR plus In addition to paying interest on outstanding principal under the Union Revolving Credit Facility, Redbox Entertainment, LLC is required to pay a commitment fee at a rate equal to 0.50% per annum to the lenders in respect of the unutilized commitments thereunder. On January 29, 2021, RAR entered into an amendment to its Credit Agreement (the “Fourth Amendment”). The Fourth Amendment provided for, among other things, (i) deferral of principal amortization payments until the maturity date, (ii) extension of the maturity date to April 2023, (iii) at the RAR’s election, subject to certain liquidity thresholds, payment PIK interest, and, (iv) removal of all financial covenant requirements. In addition, under the Fourth Amendment RAR incurred an incremental first lien term loan B-2 facility (“Term Loan B-2” and, together with Term Loan Bs and Term Loan B-1’s, the “Term Loan Facility”) in an aggregate principal amount of $25.0 million which was provided by New Outerwall Inc. The loan was subsequently assigned to Aspen Parent, Inc. Aspen Parent, Inc. indirectly owns 100% of the equity of the Company and is therefore a related party of the Company. The proceeds from the loan will be used for general corporate purposes. Pursuant to the Fourth Amendment, interest is payable on the Senior Facilities entirely in cash or, for a specified period, could be paid by increasing the principal amount of the Senior Facilities (PIK Interest), or through a combination of cash and PIK interest, subject to certain liquidity thresholds. Borrowings under the Senior Facilities bear interest at a rate at RAR’s option, either (a) a London Interbank Offer Rate (“LIBOR”) determined by reference to the costs of funds for Eurodollar deposits for the interest period relevant to such borrowing, adjusted for certain additional costs, subject to a with respect to Eurocurrency Borrowings (increasing to In addition to paying interest on outstanding principal under the Senior Facilities, RAR is required to pay a commitment fee at a rate equal to 0.50% per annum to the lenders in respect of the unutilized commitments thereunder. RAR is also required to pay customary agency fees. In connection with the Business Combination, on May 16, 2021, RAR entered into another amendment to its Credit Agreement (the “Fifth Amendment”). The Fifth Amendment, which became effective upon consummation of the Business Combination, provided consent to the planned Business Combination and among other things, extended the Senior Facilities maturity date to October 2023 and subordinated the Term Loan B-2s to the Term Loan Bs and the Term Loan B-1s. In addition, among other things, concurrently with the consummation of the Business Combination, i) $15.0 million of cash proceeds from the Business Combination were used to pay down outstanding borrowings under the Revolving Credit Facility and ii) $35.0 million of cash proceeds from the Business Combination were used to pay down outstanding borrowings under the Term Loan Bs and the Term Loan B-1s. On October 11, 2021, RAR entered into a consent to the Fifth Amendment to make certain additional changes to the Credit Agreement, which became effective upon consummation of the Business Combination, including extending the maturity date of the Senior Facilities to April, 2024 and extending the PIK interest option until December 31, 2022 (subject to a minimum pro forma liquidity). See Note 14: Subsequent Events Dividend Restrictions The Credit Agreement contains certain customary affirmative covenants and negative covenants, including a limitation on the Company’s ability to pay dividends on or make distributions in respect of its capital 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; and up to $1.03 million for dividends that were accrued on equity interests that were unvested as of the payment of the Company’s last dividend in 2018 and have subsequently vested. Interest Rates and Fees As of September 30, 2021 and December 31, 2020, the borrowing interest rate for the Senior Facilities was 9.25% and 8.25%, respectively. Amortization and Prepayments Required minimum principal amortization payments under the Term Loan Facility as of September 30, 2021, are as follows: Repayment Dollars in thousands Amount Remaining 2021 $ — 2022 — 2023 330,749 Total $ 330,749 As noted above, pursuant to the consent agreement to the Fifth Amendment that RAR entered into on October 11,2021, the maturity date of the Senior Facilities has been extended to April, 2024. In addition, the Senior Facilities require RAR to prepay outstanding term loan borrowings, subject to certain exceptions, with: ● a certain percentage set forth in the Credit Agreement governing the Senior Facilities of RAR’s annual excess cash flow, as defined under the Senior Facilities; ● a certain percentage of the net cash proceeds of certain non-ordinary course asset sales, other dispositions of property or certain casualty events, in each case subject to certain exceptions and reinvestment rights; and ● the net cash proceeds of any issuance or incurrence of debt, other than proceeds from debt permitted under the Senior Facilities. RAR 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 LIBOR rate loans. All obligations under the Senior Facilities are unconditionally guaranteed by each of RAR’s existing and future direct and indirect material, wholly- owned domestic subsidiaries, subject to certain exceptions and the direct parent of RAR. The obligations are secured by a pledge of substantially all of RAR’s assets and those of each guarantor, including capital stock of the subsidiary guarantors and 65% of the capital stock of the first-tier foreign subsidiaries that are not subsidiary guarantors, in each case subject to certain exceptions, and its capital stock owned by RAR’s direct parent. Such security interests consist of a first-priority lien with respect to the collateral. Letters of Credit As of September 30, 2021 and December 31, 2020, the Company has a Letter of Credit arrangement to provide for the issuance of standby letters of credit in the amount of $3.4 million. The arrangement supports the collateral requirements for insurance claims and is good for one year to be renewed annually if necessary. As required under the Senior Facilities, the Company’s Letter of Credit is cash-collateralized at 105% through the Company’s restricted cash balance in the amount of $3.5 million as of September 30, 2021 and December 31, 2020, respectively. | Note 6: Debt December 31, December 31, Dollars in thousands 2020 2019 Term B Facility $ 281,563 $ 318,750 Revolving Credit Facility 30,000 — Union Revolving Credit Facility 2,550 — Total debt outstanding $ 314,113 $ 318,750 Less: Unamortized debt issuance costs (6,639) (10,212) Total debt, net $ 307,474 $ 308,538 Portion due within one year $ — $ 63,750 Total long-term debt, net $ 307,474 $ 244,788 On October 20, 2017 (“Closing Date”), the Company entered into a credit agreement (“Credit Agreement”), which provided for: ● a first lien term loan facility (the “Term Loan Facility”), in an aggregate principal amount of $425.0 million, with a five-year maturity; and ● a first lien revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Senior Facilities”), in an aggregate principal amount of up to $30.0 million, with a five-year maturity. The Term Loan Facility was made available to the Company immediately upon closing and was used in part to retire all $280.0 million of the Company’s existing debt outstanding on the Closing Date and to settle closing costs associated with the new Term Loan Facility totaling $19.5 million of which $4.6 million was paid to Apollo Global Securities, LLC, an affiliate of Apollo, for services provided in connection with the financing. The balance of the loan proceeds was used on the Closing Date to fund a dividend of $160.0 million to equity holders of the Company. Additionally, at the execution of the new Credit Agreement, the Company wrote- off unamortized deferred financing costs of $21.7 million related to the extinguishment of the entire debt under the prior credit agreement. On September 7, 2018, the Company entered into an Incremental Assumption and Amendment Agreement (the “Amendment”) to the Credit Agreement. The Amendment provided for, among other things, (i) an additional principal amount under a Term B-1 Loan (“Term Loan B-1”) in an aggregate principal amount of $85.8 million and (ii) the payment of one or more restricted payments to shareholders of Redbox in an aggregate amount not to exceed $115.8 $115.8 five On September 30, 2020, the Company entered into the second amendment to its Credit Agreement (the “Second Amendment”) to, among other things, modify the amortization payment schedule and increase the total net leverage covenant during the remaining term of the Credit Agreement. On December 28, 2020, the Company entered into a third amendment to its Credit Agreement (the “Third Amendment”). The amendment deferred the December 2020 amortization payment to March 2021. As of December 31, 2020, the Company’s Senior Facilities mature on October 20, 2022, and subsequent to the Amendment, Second Amendment and Third Amendment now consist of: ● a first lien term loan B facility (the “Term Loan B Facility”), in an aggregate principal amount of $425.0 million; ● a first lien term loan B-1 facility (the “Term Loan B-1 Facility”), in an aggregate principal amount of $85.8 million; and ● a first lien revolving credit facility (the “Revolving Credit Facility”), in an aggregate principal amount of up to $30.0 million. On December 29, 2020, the Company entered into a four-year, $20.0 million revolving credit facility with Union Bank (the “Union Revolving Credit 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. Borrowings outstanding under the Union Revolving Credit Facility as of December 31, 2020 were $2.55 million. On January 29, 2021, the Company entered into an amendment to its Credit Agreement (the “Fourth Amendment”) along with entering into a new term loan with New Outerwall for $25.0 million. New Outerwall indirectly owns 100% of the equity interests of the Company and is therefore a related party of the Company. In addition, on May 16, 2021, the Company entered into another amendment to its Credit Agreement (the “Fifth Amendment”). See Note 15, Subsequent Events, for a further discussion. The Credit Agreement contains certain customary affirmative covenants and negative covenants, including a limitation on the Company’s ability to pay dividends on or make distributions in respect of its capital 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; and up to $1.03 million for dividends that were accrued on equity interests that were unvested as of the payment of the Company’s last dividend in 2018 and have subsequently vested. Dividends per Share The dividend distribution declared in association with the Amendment was for $3.28 per common share outstanding and was declared during the year ended December 31, 2018. Total dividends of $115.8 million related to this amount were paid during the year ended December 31, 2018. Additionally, dividends of $1.0 million and $1.2 million were paid during the years ended December 31, 2020 and 2019, respectively. The subsequent dividend payments represented additional payments for the vesting of shares that were outstanding upon the dividend declaration. Dividend Restrictions The Credit Agreement contains certain customary affirmative covenants and negative covenants, including a limitation on the Company’s ability to pay dividends on or make distributions in respect of its capital 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; and up to $1.03 million for dividends that were accrued on equity interests that were unvested as of the payment of the Company’s last dividend in 2018 and have subsequently vested. Interest Rates and Fees Borrowings under the Senior Facilities will bear interest at a rate at the Company’s option, either (a) a London Interbank Offer Rate (“LIBOR”) rate determined by reference to the costs of funds for Eurodollar deposits for the interest period relevant to such borrowing, adjusted for certain additional costs, subject to a 1.00% floor in the case of term loans or (b) a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50% per annum, (ii) the prime rate quoted by The Wall Street Journal (or another national publication selected by the administrative agent) and (iii) the one-month adjusted LIBOR plus 1.00% per annum, in each case plus an applicable margin. The applicable margin for borrowings under the Senior Facilities is 7.25% with respect to Eurocurrency Borrowings and 6.25% with respect to ABR Borrowings. In addition to paying interest on outstanding principal under the Senior Facilities, we are required to pay a commitment fee at a rate equal to 0.50% per annum to the lenders in respect of the unutilized commitments thereunder. We are also required to pay customary agency fees. As of December 31, 2020 and December 31, 2019, the borrowing interest rate for the Senior Facilities was 8.25% and 9.05% respectively. Borrowings under the Union Revolving Credit Facility will 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 day, (ii) the federal funds effective rate in effect on such day plus ∕ of 1.0% , and (iii) daily one month LIBOR plus 1.0% . The revolving credit facility borrowings that are LIBOR loans bear interest at a per annum rate equal to the applicable LIBOR plus a margin of 0.50% . As of December 31, 2020, the borrowing interest rate for the Union Revolving Credit Facility was 4.25% . In addition to paying interest on outstanding principal under the Union Revolving Credit Facility, we are required to pay a commitment fee at a rate equal to 0.50% per annum to the lenders in respect of the unutilized commitments thereunder. Amortization and Prepayments Required minimum principal amortization payments under the Senior Facilities as of December 31, 2020, are as follows: Dollars in thousands Repayment 2021 $ — 2022 — 2023 281,563 Total $ 281,563 In addition, the Senior Facilities require us to prepay outstanding term loan borrowings, subject to certain exceptions, with: ● a certain percentage set forth in the Credit Agreement governing the Senior Facilities of the Company’s annual excess cash flow, as defined under the Senior Facilities; ● a certain percentage of the net cash proceeds of certain non-ordinary course asset sales, other dispositions of property or certain casualty events, in each case subject to certain exceptions and reinvestment rights; and ● the net cash proceeds of any issuance or incurrence of debt, other than proceeds from debt permitted under the Senior Facilities. The Company 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 LIBOR rate loans. Collateral and Guarantors All obligations under the Senior Facilities are unconditionally guaranteed by each of the Company’s existing and future direct and indirect material, wholly-owned domestic subsidiaries, subject to certain exceptions, and the direct parent of the Company. The obligations are secured by a pledge of substantially all of the Company’s assets and those of each guarantor, including capital stock of the subsidiary guarantors and 65% of the capital stock of the first-tier foreign subsidiaries that are not subsidiary guarantors, in each case subject to certain exceptions, and its capital stock owned by the Company’s direct parent. Such security interests consist of a first-priority lien with respect to the collateral. All obligations under the Union Revolving Credit Facility are guaranteed by all direct and indirect wholly owned subsidiaries of the Company’s Redbox Entertainment entity. Compliance with Loan Covenants As of and for the period ended December 31, 2020, the Company was in compliance with all applicable loan covenants. Letters of Credit As of December 31, 2020 and 2019, the Company has a Letter of Credit arrangement to provide for the issuance of standby letters of credit in the amount of $3.4 million. The arrangement supports the collateral requirements for insurance claims and is good for one year to be renewed annually if necessary. As required under the Senior Facilities, the Company’s Letter of Credit is cash-collateralized at 105% through the Company’s restricted cash balance in the amount of $3.5 million as of December 31, 2020 and 2019, respectively. |
Derivatives_2
Derivatives | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Derivatives | ||
Derivatives | Note 7: Derivatives The Company entered into an interest rate swap on October 22, 2018 to manage its exposure to changes in the interest rates related to its term loan (“Term Loan Facility”) following the Amendment discussed in Note 6: Debt Under the terms of the agreement, the Company entered into a three-year fixed-for-floating interest rate swap agreement with Nomura Global Financial Products, Inc. for a fixed notional amount of $200.0 million to swap the variable rate portion of interest payments tied to the one-month LIBOR under its term loans for fixed interest payments. The swap effectively locked in an average of a three-year forward curve for the one-month LIBOR at a fixed rate of 3.0335%, resulting in a total interest rate on the $200.0 million notional of 10.2835%. The agreement expires on October 31, 2021. See Note 6: Debt The following table discloses the fair value, as determined using Level 2 inputs, and balance sheet location of the Company’s derivative instrument: Balance Sheet September 30, December 31, Dollars in thousands Location 2021 2020 Derivatives not designated as hedging instruments: Interest rate swap contract Other liabilities $ 461 $ 4,782 The following table discloses the effect of the Company’s derivative instrument on the unaudited Condensed Consolidated Statements of Operations For the nine months ended September 30, Dollars in thousands 2021 2020 Other (income) expense, net $ (899) $ 4,324 | Note 7: Derivatives The Company entered into an interest rate swap on October 22, 2018 to manage its exposure to changes in the interest rates related to its term loan (“Term B Facility”) following the Amendment discussed in Note 6: Debt. The swap is not designated as a hedging instrument and is reported at fair value with changes in fair value reported directly in earnings. The Company’s hedge consists of interest rate swaps, which was used to mitigate interest rate risk. Under the terms of the agreement, the Company entered into a three-year fixed-for-floating interest rate swap agreement with Nomura Global Financial Products, Inc. for a fixed notional amount of $200.0 million to swap the variable rate portion of interest payments tied to the one-month LIBOR under its term loans for fixed interest payments. The swap effectively locked in an average of a three-year forward curve for the one-month LIBOR at a fixed rate of 3.0335%, resulting in a total interest rate on the $200.0 million notional of 10.2835%. The agreement expires on October 31, 2021. See Note 6: Debt for additional disclosures about the Company’s Term B Facility. The following table discloses the fair value, as determined using Level 2 inputs, and balance sheet location of the Company’s derivative instrument: Balance Sheet December 31, December 31, Dollars in thousands Location 2020 2019 Derivatives not designated as hedging instruments: Interest rate swap contract Other $ 4,782 $ 5,253 The following table discloses the effect of the Company’s derivative instrument on the Consolidated Statements of Operations For the years ended December 31, Dollars in thousands 2020 2019 2018 Other expense, net $ 4,341 $ 3,946 $ 3,012 |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2020 | |
Employee Benefit Plan | |
Employee Benefit Plan | Note 8: Employee Benefit Plan 401(k) Plan The Company sponsors a 401(k) plan for all 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%. The Company’s matching contribution to this plan was $2.0 million and $2.1 million and $1.8 million for the years ended December 31, 2020, 2019 and 2018, respectively. |
Segment Information and Geogr_7
Segment Information and Geographic Data | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Segment Information and Geographic Data | ||
Segment Information and Geographic Data | Note 8: Segment Information and Geographic Data The Company currently conducts its business through two operating segments: (1) Legacy Business and (2) Digital Business. For all periods presented, the Company did not operate outside the United States and Puerto Rico (collectively the United States). As such, all of the Company’s long-lived assets are located in the United States. The Company’s Legacy Business operates a network of approximately 40,000 self-service kiosks where consumers can rent or purchase new-release DVDs and Blu-ray DiscsTM (“movies”). The Company’s Legacy Business also produces, acquires, and distributes movies exclusively through its Redbox Entertainment label, as well as generating service revenue by providing installation, merchandising and break-fix services to other kiosks businesses. The Company’s Digital Business provides both transactional and ad-supported digital streaming services, which include 1) Redbox On Demand, a transactional service which provides digital rental or purchase of new release and catalog movies and TV content and 2) Redbox Free Live TV and Redbox Free On Demand, ad-supported services which include digital linear television service giving access to more than 100 linear channels, and an on-demand service with more than 5,000 movies and TV episodes giving consumers control over when they watch content. Furthermore, the Company monetizes digital advertising space in Redbox emails and apps amongst other platforms, which is referred to as Media Network. Adjusted EBITDA is the profitability metric reported to the chief operating decision maker (“CODM”) for purposes of making decisions about allocation of resources to each segment and assessing performance of each segment. The Company believes this measure is most useful in assessing underlying performance of its business. Adjusted EBITDA is before integration related costs, efficiency initiatives, and other items. Adjusted EBITDA also excludes the effects of financings, income tax and the non-cash accounting effects of depreciation and intangible asset amortization. As segment assets are not reported to or used by the CODM to measure business performance or allocate resources, total segment assets and capital expenditures are not presented below. Summarized financial information by segment is as follows: Nine Months Ended September 30, Dollars in thousands 2021 2020 Net revenue Legacy Business $ 192,025 $ 433,215 Digital Business 24,347 31,993 Total $ 216,372 $ 465,208 Adjusted EBITDA Legacy Business $ (8,940) $ 106,133 Digital Business 2,257 3,642 Total $ (6,683) $ 109,775 The following is a reconciliation of Adjusted EBITDA to loss before income taxes for the nine months ended September 30, 2021 and 2020: Nine Months Ended September 30, Dollars in thousands 2021 2020 Loss before income taxes $ (123,841) $ (52,612) Add: Depreciation and amortization 81,317 108,316 Interest and other expense, net 24,687 24,848 Business optimization (a) 5,605 15,142 One-time non-recurring (b) 2,737 5,934 New business start-up costs (c) 1,004 4,821 Restructuring related (d) 1,808 3,326 Adjusted EBITDA $ (6,683) $ 109,775 (a) Business optimization costs include employee retention costs, IT costs as well as consulting costs for certain projects. For the nine months ended September 30, 2021 and 2020 the Company recorded IT costs of $2.2 million and $4.4 million, respectively. The Company recorded employee retention expense of $3.2 million and $10.7 million for each of the nine months ended September 30, 2021 and 2020, respectively. (b) Includes costs related to project costs and initiatives, as well as bank, legal and other fees in connection with the Company’s debt financing activities. (c) Includes costs to support the Company’s On Demand and AVOD offerings, along with costs related to the Company’s service and media network businesses. (d) Restructuring related costs include such items as employee severance charges and costs incurred related to removing kiosks. | Note 9: Segment Information and Geographic Data The Company currently conducts its business through two operating segments: (1) Legacy Business and (2) Digital Business. For all periods presented, the Company did not operate outside the United States and Puerto Rico (collectively the United States). As such, all of the Company’s long-lived assets are located in the United States. The Company’s Legacy Business operates a network of approximately 40,000 self-service kiosks where consumers can rent or purchase new-release DVDs and Blu-ray DiscsTM (“movies”). The Company’s Legacy Business also produces, acquires, and distributes movies exclusively through its Redbox Entertainment label, as well as generating service revenue by providing installation, merchandising and break-fix services to other kiosks businesses. The Company’s Digital Business provides both transactional and ad-supported digital streaming services, which include 1) Redbox On Demand, a transactional service which provides digital rental or purchase of new release and catalog movies and TV content, 2) Redbox Free On Demand, an ad-supported service providing free movies and TV shows on demand, and 3) Redbox Free Live TV, a free, ad-supported television service giving access to more than 95 linear channels. Furthermore, the Company monetizes digital advertising space in Redbox emails and apps amongst other platforms, which is referred to as Media Network. Adjusted EBITDA is the profitability metric reported to the chief operating decision maker (“CODM”) for purposes of making decisions about allocation of resources to each segment and assessing performance of each segment. The Company believes this measure is most useful in assessing the underlying performance of its business. Adjusted EBITDA is before integration related costs, efficiency initiatives, and other items. Adjusted EBITDA also excludes the effects of financings, income tax and the non-cash accounting effects of depreciation and intangible asset amortization. As segment assets are not reported to or used by the CODM to measure business performance or allocate resources, total segment assets and capital expenditures are not presented below. Summarized financial information by segment is as follows: For the years ended December 31, Dollars in thousands 2020 2019 2018 Net revenue Legacy Business $ 506,437 $ 838,627 $ 1,077,731 Digital Business 39,754 19,743 10,052 Total $ 546,191 $ 858,370 $ 1,087,783 Adjusted EBITDA Legacy Business $ 109,074 $ 197,887 $ 289,765 Digital Business 4,702 (2,238) 2,281 Total $ 113,776 $ 195,649 $ 292,046 The following is a reconciliation of Adjusted EBITDA to (loss) income before income for the years ended December 31, 2020, 2019 and 2018: Year ended December 31, Dollars in thousands 2020 2019 2018 (Loss) income before income taxes $ (94,707) $ (14,823) $ 80,908 Add: Depreciation and amortization 136,838 138,274 133,493 Interest and other expense, net 32,522 44,578 45,155 Business optimization (a) 19,011 7,687 1,227 One-time non-recurring (b) 10,600 5,482 13,229 New business start-up costs (c) 6,041 3,793 10,060 Restructuring related (d) 3,471 4,432 625 Discontinuation of games business (e) — 6,226 7,349 Adjusted EBITDA $ 113,776 $ 195,649 $ 292,046 (a) Business optimization costs include employee retention costs, IT costs as well as consulting costs for certain projects. Retention costs for the years ended 2020 and 2019 were $13.9 million and $3.0 million, respectively. In 2020, retention awards were paid out to all employees in light of the COVID pandemic and were in lieu of the Company’s short-term incentive program. IT costs of $4.8 million and $3.8 million were incurred in 2020 and 2019 respectively. The Company’s IT project is a complete restructuring of the Company’s technologies as it to moves to a cloud-based infrastructure. (b) Includes costs related to project costs and initiatives, as well as bank, legal and other fees in connection with the Company’s debt financing activities. (c) Includes costs to support the Company’s On Demand and AVOD offerings, along with costs related to the Company’s service and media network businesses. Restructuring related costs include such items as employee severance charges and costs incurred related to removing kiosks. Reflects EBITDA of the Company’s former video games business, which was wound down in December, 2019. |
Earnings Per Share_2
Earnings Per Share | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Earnings Per Share | ||
Earnings Per Share | Note 9: Earnings Per Share Earnings (Loss) per Share (“EPS”) is calculated by dividing the net earnings or loss attributable to shareholders by the weighted average shares outstanding. As the Company was in a loss position for the nine months ended September 30, 2021 and 2020, the Company has determined all potentially dilutive shares would be anti-dilutive in these periods and therefore are excluded from the calculation of diluted weighted average shares outstanding. This results in the calculation of weighted average shares outstanding to be the same for basic and diluted EPS. Potentially dilutive securities of approximately 264,513 and 261,342 for the nine months ended September 30, 2021 and 2020, respectively, were not included in the computation of diluted EPS because their effect would have been anti-dilutive. The following is a calculation of EPS: Nine Months Ended September 30, Dollars in thousands, except per share amounts 2021 2020 Basic and Diluted EPS Net loss attributable to shareholders $ (92,938) $ (39,135) Weighted average outstanding 30,839,870 27,870,539 Basic and diluted common $ (3.01) $ (1.40) | Note 10: Earnings Per Share Earnings (Loss) per Share (“EPS”) is calculated by dividing the Net earnings or loss attributable to shareholders by the weighted average shares outstanding. As the Company was in a loss position for the years ended December 31, 2020 and 2019, the Company has determined all potentially dilutive shares would be anti-dilutive in these periods and therefore are excluded from the calculation of diluted weighted average shares outstanding. This results in the calculation of weighted average shares outstanding to be the same for basic and diluted EPS. Potentially dilutive securities of approximately 325 thousand and 376 thousand for the years ended December 31, 2020 and 2019, respectively, were not included in the computation of diluted EPS because their effect would have been anti-dilutive. The following is a calculation of EPS (in thousands, except share and per share amounts): Year ended December 31, 2020 2019 2018 Basic EPS Net (loss) income attributable to shareholders $ (69,503) $ (7,567) $ 61,453 Weighted average shares outstanding for basic earnings (loss) per share 27,906,742 27,779,339 27,623,415 Basic earnings (loss) per common shares attributable to shareholders $ (2.49) $ (0.27) $ 2.22 Diluted EPS Net (loss) income attributable to shareholders $ (69,503) $ (7,567) $ 61,453 Weighted average shares outstanding for basic earnings (loss) per share: 27,906,742 27,779,339 27,623,415 Dilutive effect of restricted stock units — — 573,993 Weighted average shares outstanding for diluted earnings (loss) per share 27,906,742 27,779,339 28,197,409 Diluted earnings (loss) per common share attributable to shareholders $ (2.49) $ (0.27) $ 2.18 |
Commitments and Contingencies_6
Commitments and Contingencies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies | ||
Commitments and Contingencies | Note 10: Commitments and Contingencies The Company leases office facilities and certain equipment necessary to maintain its information technology infrastructure. Rent expense, net of sublease income, under its operating lease agreements was $1.9 million and $1.8 million for the nine months ended September 30, 2021 and 2020, respectively. The Company also leases automobiles under capital leases expiring at various dates through 2021. Management assesses these leases as they come due as to whether it should purchase, enter into new capital leases, or enter into operating leases. Assets held under capital leases are included in Property and equipment, net Condensed Consolidated Balance Sheets September 30, December 31, Dollars in thousands 2021 2020 Gross property and equipment $ 10,436 $ 10,677 Accumulated depreciation (6,981) (5,204) Net property and equipment $ 3,455 $ 5,473 Content License Agreements The Company licenses minimum quantities of theatrical and direct-to-video titles under licensing agreements with certain movie content providers. Changes in the Company’s agreements with content providers since December 31, 2020 are as follows: ● On January 15, 2021, the Company entered into a two-year license agreement with Sony Pictures Home Entertainment effective January 1, 2021. The agreement replaces the licensing agreement the Company had in place with Sony that expired on December 31, 2020. Total estimated movie content commitments under the terms of the Company’s content license agreements in effect as of September 30, 2021 is presented in the following table: Dollars in thousands Total 2021 2022 Minimum estimated movie content commitments $ 28,714 $ 7,979 $ 20,735 Legal Matters The Company is involved from time to time in legal proceedings incidental to the conduct of its business. The Company does not believe that any liability that may result from these proceedings will have a material adverse effect on its consolidated financial statements. | Note 11: Commitments and Contingencies The Company leases office facilities and certain equipment necessary to maintain its information technology infrastructure. Rent expense, net of sublease income, under the Company’s operating lease agreements was $2.5 million, $2.6 million and $2.4 million for the years ended December 31, 2020, 2019 and 2018, respectively. The Company also leases automobiles under capital leases expiring at various dates through 2021. The Company assesses these leases as they come due as to whether it should purchase, enter into new capital leases, or enter into operating leases. Assets held under capital leases are included in Property and equipment, net on the Consolidated Balance Sheets and include the following: Dollars in thousands December 31, 2020 December 31, 2019 Gross property and equipment $ 10,677 $ 11,813 Accumulated depreciation (5,204) (3,529) Net property and equipment $ 5,473 $ 8,284 As of December 31, 2020, the Company’s future minimum lease payments under contractual lease obligations are as follows: Dollars in thousands Capital Operating 2021 $ 2,836 $ 2,591 2022 1,895 1,994 2023 470 1,614 2024 27 923 2025 & Thereafter — 546 Total minimum lease commitments $ 5,228 $ 7,668 Less: Current portion of capital lease obligations (2,836) Long-term portion of capital lease obligations $ 2,392 (1) Includes all operating leases having an initial or remaining non-cancelable lease term in excess of one year. Content License Agreements The Company licenses minimum quantities of theatrical and direct-to-video titles under licensing agreements with certain movie content providers. ● As of December 31, 2020, there have been no changes in the Company ’ s agreements with content providers since December 31, 2019. For further information, see Note 15, Subsequent Events. Total estimated movie content commitments under the terms of the Company’s content license agreements in effect as of December 31, 2020 is presented in the following table: Dollars in thousands Total 2021 2022 Minimum estimated movie content commitments $ 59,788 $ 38,319 $ 21,469 As of December 31, 2020, the Company’s content license agreements are available for rental on the same day and date as the retail release for all major studios. Legal Matters From time to time the Company is involved in legal proceedings incidental to the conduct of its business. The Company does not believe that any liability that may result from these proceedings will have a material adverse effect on its consolidated financial statements. During 2020, the Company received $7.0 million in connection with a class action settlement specific to credit card fees, which were included in Direct Operating expenses in the Consolidated Statements of Operations. |
Income Taxes_2
Income Taxes | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Income Tax | ||
Income Taxes | Note 11: Income Taxes The Company’s effective tax rate was 25.0% and 25.6% for the nine months ended September 30, 2021 and 2020, respectively. The difference between the Company’s effective tax rate and the federal statutory tax rate for the nine months ended September 30, 2021 is primarily due to the effect of state taxes and the federal research and development credit. Tax Years Open for Examination As of September 30, 2021, there are no open examinations by the U.S. federal taxing authority. As of September 30, 2021, for the Company’s major jurisdictions, the years 2017 through 2020 were open for examination by the U.S federal and most state tax authorities. | Note 12: Income Taxes On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law in response to the COVID-19 pandemic. The impact of the CARES Act was not material to the Company’s financial statements. In further response to the COVID-19 pandemic, on December 27, 2020, the Consolidations Appropriations Act, 2021 (“CAA”) was signed into law. The Company does not expect the CAA to have a material impact on its financial statements. Components of Income Taxes The Company and its consolidated subsidiaries are included as part of the U.S. consolidated income tax group Aspen Parent, Inc. for the periods presented. The income tax benefit and provisions, income tax payables, related tax payments and deferred tax balances have been prepared as if the Company operated as a standalone taxpayer. The components of (loss) income before income taxes were as follows: Year Ended December 31, Dollars in thousands 2020 2019 2018 U.S. operations $ (94,707) $ (14,823) $ 80,908 Components of Income Tax (Benefit) Expense The components of income tax (benefit) expense were as follows: Year Ended December 31, Dollars in thousands 2020 2019 2018 Current: U.S. Federal $ (491) $ 11,653 $ 27,741 State and local 711 4,209 7,955 Total current $ 220 $ 15,862 $ 35,696 Deferred: U.S. Federal (21,489) (19,467) (14,496) State and local (3,935) (3,651) (1,745) Total deferred $ (25,424) $ (23,118) $ (16,241) Total income tax (benefit) expense $ (25,204) $ (7,256) $ 19,455 Rate Reconciliation The income tax expense differs from the amount that would result by applying the U.S. statutory rate to income before income taxes as follows: Year Ended December 31, 2020 2019 2018 U.S Federal tax expense at statutory rates 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit 3.8 % 8.7 % 4.6 % Valuation allowance (0.2) % (6.8) % 0.1 % Federal research & development credit 2.0 % 7.4 % (0.7) % Uncertain tax benefit on federal research and development credit (0.5) % (3.7) % 0.6 % Release of uncertain tax benefits 0.2 % 22.1 % (2.2) % Other 0.4 % 0.2 % 0.7 % Effective tax rate 26.6 % 48.9 % 24.0 % Unrecognized Tax Benefits The aggregate changes in the balance of unrecognized tax benefits were as follows: Year Ended December 31, Dollars in thousands 2020 2019 2018 Balance, beginning of the period $ 1,935 $ 4,558 $ 5,894 Additions based on tax positions related to the current year 250 150 150 Additions for tax positions related to prior years 215 509 321 Deductions for tax positions related to prior years (187) (1,945) (1,807) Deductions for tax positions effectively settled — (1,337) — Balance, end of period $ 2,213 $ 1,935 $ 4,558 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, $0.3 million and $0.3 million for the years ended December 31, 2020, 2019 and 2018, respectively. At December 31, 2020, 2019 and 2018, $2.2 million, $1.9 million and $4.6 million, respectively, of unrecognized tax benefits would favorably impact the effective tax rate if recognized. Tax Years Open for Examination As of December 31, 2020, there are no open examinations by the U.S. federal taxing authority. As of December 31, 2020, the tax years 2017 through 2018 are still in process for examination by the State of Illinois. In February of 2020, the State of Wisconsin initiated an audit of the Company and its affiliates for the calendar years ending December 31, 2016 through December 31, 2018. In July of 2020, the State of California contacted the Company to initiate an audit of the Company and its affiliates for the calendar years ending December 31, 2017 through December 31, 2018. At this time, an estimate of the range of reasonably possible adjustments cannot be determined for the open audits. Deferred Income Taxes Deferred income tax assets and liabilities reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the carrying amounts used for income tax purposes. Future tax benefits for net operating loss and tax credit carryforwards are also recognized to the extent that realization of such benefits is more likely than not. Deferred tax assets, deferred tax liabilities and tax credit carryforwards are measured using enacted tax rates that are expected to apply to taxable income in the years in which the Company expects to recognize those temporary differences and credits. In determining the Company’s tax provisions, management determined the deferred tax assets and liabilities for each separate tax jurisdiction and considered a number of factors including the positive and negative evidence regarding the realization of its deferred tax assets to determine whether a valuation allowance should be recognized with respect to its deferred tax assets. Significant components of the Company’s deferred tax assets and liabilities and in the valuation allowance were as follows: December 31, 2020 2019 Deferred tax assets: Credit carryforwards $ 1,117 $ 1,124 Accrued liabilities and allowances 1,388 614 Compensation accruals 2,750 2,966 Asset retirement obligation liability 1,994 2,257 Deferred revenue 2,237 2,682 Hedge liability 1,200 1,315 Other 253 46 Gross deferred tax assets 10,939 11,004 Less: Valuation Allowance (1,039) (851) Total deferred tax assets $ 9,900 $ 10,153 Deferred tax liabilities: Property and equipment (14,172) (23,250) Product costs (3,905) (7,107) Prepaid expenses (284) (241) Intangible assets (30,965) (44,819) Goodwill (1,745) (1,331) Total deferred tax liabilities $ (51,071) $ (76,748) Net deferred tax liabilities $ (41,171) $ (66,595) Change in Valuation Allowance During 2020, the Company increased its valuation allowance against certain of its deferred tax assets to reduce them to the value more likely than not to be realized with a corresponding non-cash charge of $0.2 million to its income tax provision. The valuation allowance balance of $1.0 $0.9 State Tax Credits and Expiration Periods The following table shows the Company’s state tax credits before valuation allowances and related expiration periods. December 31, 2020 Dollars in thousands Amount Expiration State tax credits: Illinois state tax credits $ 1,117 2021 – 2025 Total U.S. state tax credits $ 1,117 |
Related-Party Transactions_2
Related-Party Transactions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Related Party Transactions | ||
Related-Party Transactions | Note 12: Related-Party Transactions The Company entered into transactions with New Outerwall and related affiliates, primarily Coinstar, in the ordinary course of business. A description of such transactions and their effects on the accompanying consolidated financial statements are presented below. The Company receives and provides certain operating support under commercial services agreements with New Outerwall and related affiliates. A summary of the amounts due to/from such related parties is presented below: September 30, December 31, Dollars in thousands 2021 2020 Due from related party $ 162 $ 73 Due to related parties, net $ 357 $ 449 Amounts due from related party above includes amounts owed from ecoATM for kiosk servicing and other commercial agreements. The balance in amounts due to related parties primarily includes the unpaid dividends related to employee and Director stock awards. On January 29, 2021, the Company entered into the Fourth Amendment to the Credit Agreement. Provided under the Credit Agreement, the Company incurred additional principal amount under a Term B-2 Loan in an aggregate principal amount of $25.0 million, which was provided by New Outerwall. The proceeds from the loan will be used for general corporate purposes. The Company is an indirect, wholly owned subsidiary of New Outerwall, Inc. See Note 6: Debt, With respect to income taxes for the periods, while generally the Company is part of a consolidated group for income tax filings, the income tax benefits and provisions, income tax payables, related tax payments and deferred tax balances reported within have been prepared as if the Company operates as a standalone taxpayer. Deferred taxes have been classified as net liabilities in the respective unaudited Condensed Consolidated Balance Sheets Accrued and other current liabilities Condensed In connection with the Company’s impending business combination and restructuring, on June 29, 2021, the Company and New Outerwall determined that it was no longer probable that the income tax payable balances of the Company to New Outerwall would be paid. As such, the Company recorded an entry to reduce Accrued and other current liabilities $15.8 million and increase Additional paid-in capital $15.8 million. | Note 13: Related-Party Transactions The Company entered into transactions with New Outerwall and related affiliates, primarily Coinstar, in the ordinary course of business. A description of such transactions and their effects on the accompanying consolidated financial statements are presented below. The Company receives and provides certain operating support under commercial services agreements with New Outerwall and related affiliates. A summary of the amounts due to/from such related parties, and the related costs, is presented below: December 31, December 31, Dollars in thousands 2020 2019 Due from related party $ 73 $ 2,712 Due to related parties, net $ 449 $ 1,477 Amounts due from related party above includes amounts owed from Coinstar for professional services. The balance in amounts due to related parties primarily includes the unpaid dividends related to employee and Director stock awards. On January 29, 2021, the Company entered into the Fourth Amendment to the Credit Agreement. Provided under the Credit Agreement, the Company incurred additional principal amount under a Term B-2 Loan in an aggregate principal amount of $25.0 million, which was provided by New Outerwall. The proceeds from the loan will be used for general corporate purposes. The Term B-2 loan ranks pari passu basis with all obligations pursuant to the Credit Agreement. The Company is an indirect, wholly owned subsidiary of New Outerwall, Inc. See Note 6, Debt and Note 15, Subsequent Events, for a further discussion. With respect to income taxes for the periods, while generally the Company is part of a consolidated group for income tax filings, the income tax benefits and provisions, income tax payables, related tax payments and deferred tax balances reported within have been prepared as if the Company operates as a standalone taxpayer. Deferred taxes have been classified as net liabilities in the respective Consolidated Balance Sheets of the Company. Except for certain separate state tax obligations, the Company generally remits cash to Aspen or New Outerwall to settle any third-party, tax-related obligations, as determined if the Company operated as a standalone taxpayer. Income taxes payable balances, which are included in Accrued and other current liabilities in the Company’s Consolidated Balance Sheet, were $15.8 million as of December 31, 2020 and December 31, 2019. See Note 15, Subsequent Events, for a further discussion. |
Additional Supplemental Cash _6
Additional Supplemental Cash Flow Financial Information | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Additional Supplemental Cash Flow Financial Information | ||
Additional Supplemental Cash Flow Financial Information | Note 13: Additional Supplemental Cash Flow Financial Information Cash, Cash Equivalents and Restricted Cash: September 30, December 31, Dollars in thousands 2021 2020 Cash and cash equivalents $ 9,798 $ 5,401 Restricted cash 3,360 3,526 Cash, cash equivalents and restricted cash $ 13,158 $ 8,927 Cash Interest and Taxes: Nine Months Ended September 30, Dollars in thousands 2021 2020 Cash paid during the period for interest $ — $ 20,853 Cash paid during the period for income taxes, net $ 622 $ 2,726 Non-cash Transactions Nine Months Ended September 30, Dollars in thousands 2021 2020 Purchases of property and equipment financed by capital lease obligations $ 28 $ 130 Purchases of property and equipment included in ending trade payables or accrued and other current liabilities $ 197 $ — | Note 14: Additional Supplemental Cash Flow Financial Information Cash, Cash Equivalents and Restricted Cash Year Ended December 31, Dollars in thousands 2020 2019 Cash and cash equivalents $ 5,401 $ 3,852 Restricted cash 3,526 3,526 Cash, cash equivalents and restricted cash $ 8,927 $ 7,378 Cash Interest and Taxes Year Ended December 31, Dollars in thousands 2020 2019 Cash paid during the period for interest $ 29,061 $ 36,659 Cash paid during the period for income taxes, net $ 2,993 $ 20,907 Non-cash Transactions Year Ended December 31, Dollars in thousands 2020 2019 Purchases of property and equipment financed by capital lease obligations $ 338 $ 6,051 Purchases of property and equipment included in ending trade payables or accrued and other current liabilities $ 653 $ 224 |
Subsequent Events_2_3_4
Subsequent Events | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Subsequent Events | ||
Subsequent Events | Note 14: Subsequent Events On October 11, 2021, RAR entered into a consent to the Fifth Amendment to make certain additional changes to the Credit Agreement, which became effective upon consummation of the Business Combination, including extending the maturity date of the Senior Facilities to April, 2024, extending the PIK interest option until December 31, 2022 (subject to a minimum pro forma liquidity), as well as commencing an excess cash flow sweep on March 31, 2022 subject to funds on hand being greater than $20.0 million. In connection with the proposed business combination agreement, on October 12, 2021, Seaport Global Acquisition Corp. entered into backstop subscription agreements (the “Backstop Agreements”) with certain subscribers (the “Backstop Subscribers”), including affiliates of funds managed by affiliates of Apollo Global Management, Inc. and Seaport Global SPAC, LLC, pursuant to which the Backstop Subscribers agreed, subject to certain conditions in the Backstop Agreements, to subscribe for and purchase up to an aggregate of 3,564,356 shares of Seaport’s Class A common stock, par value $0.0001 per share, in the event that more than 10,810,644 public shares of Seaport Class A common stock are submitted for redemption in connection with the proposed Business Combination Agreement, for a purchase price of $10.10 per share. On October 22, 2021, in accordance with the Business Combination Agreement, Redbox and Seaport closed the Business Combination. The Business Combination will be accounted for as a reverse recapitalization in accordance with US GAAP. Under the guidance in ASC 805, Business Combinations, Seaport is expected to be treated as the “acquired” company for financial reporting purposes. Cash received by the Company from the Business Combination totaled $27.0 million, net of $50.0 million of proceeds used to pay down outstanding indebtedness under the Company’s Senior Facilities and transaction costs of The Company has evaluated subsequent events through November 22, 2021, the date on which the financial statements were issued. | Note 15: Subsequent Events On January 15, 2021, the Company entered into a two-year license agreement with Sony Pictures Home Entertainment effective January 1, 2021. The agreement replaces the licensing agreement the Company had in place with Sony that expired on December 31, 2020. On January 29, 2021, the Company entered into the Fourth Amendment to the Credit Agreement. The Fourth Amendment provided for, among other things, (i) deferral of principal amortization payments until the maturity date, (ii) extension of the maturity date to April 2023, (iii) at the Company’s election, subject to certain liquidity thresholds, a paid in-kind (“PIK”) interest option, and (iv) waiver of all financial covenant requirements. In addition, provided under the Fourth Amendment the Company incurred an additional principal amount under a Term B-2 Loan in an aggregate principal amount of $25.0 million, which was provided by New Outerwall. New Outerwall indirectly owns 100% of the equity of the Company and is therefore a related party of the Company. The proceeds from the loan will be used for general corporate purposes. The Term B-2 loan ranks pari passu basis with all obligations pursuant to the Credit Agreement. Pursuant to the Fourth Amendment, interest is payable on the Senior Facilities and the Term B-2 loan entirely in cash or could be paid by increasing the principal amount of the Senior Facilities and Term B-2 loans (PIK interest), or through a combination of cash and PIK interest. Cash interest on the Senior Facilities and Term B-2 loan accrues at a rate of LIBOR plus 7.25% per annum. PIK interest on the Senior Facilities and Term B-2 loan accrues at a rate of LIBOR plus 8.25% per annum. On March 26, 2021, the Company entered into an asset purchase agreement with Sony DADC US Inc. (the “Seller”) to purchase certain assets and assume certain liabilities of the Seller’s business of providing video content distribution and other related services. The net purchase price, based on the asset value as of the closing date is not expected to be material. The closing of the transaction is subject to certain closing conditions and is expected to occur in the second half of 2021. On May 16, 2021, the Company became a party to a business combination agreement with Seaport Global Acquisition Corp. (a publicly traded special purpose acquisition company). The proposed merger is expected to be completed in the second half of 2021, subject to, among other things, approval of the respective party’s shareholders, satisfaction of the conditions stated in the merger agreement and other customary closing conditions. The result of the transaction will transform the Company into a publicly traded entity on the NASDAQ stock exchange. There is no assurance that the transaction will be consummated. In connection with the planned merger, on May 16, 2021, the Company entered into the Fifth Amendment to its Credit Agreement. The Fifth Amendment, which becomes effective upon consummation of the merger, provides consent to the planned merger and, among other things, extends, the Senior Facilities maturity date to October 2023 and eliminates the PIK Interest option after the consummation of the merger. In addition, among other things, concurrently with the consummation of the merger, i) $15.0 million of cash proceeds from the merger will be used to pay down outstanding borrowings under the Revolving Credit Facility and ii) a minimum of $35.0 of cash proceeds from the merger million plus the product of 0.60 times the Excess Cash Proceeds (as that term is defined in the Fifth Amendment) will be used to pay down outstanding borrowings under the Term B-1 Loans. In connection with the Company’s impending business combination and restructuring, on June 29, 2021, the Company and New Outerwall determined that it was no longer probable that the income tax payable balances of the Company to New Outerwall would be paid. As such, the Company recorded an entry to reduce Accrued and other current liabilities $15.8 million and increase Additional paid-in capital $15.8 million. The Company has evaluated subsequent events through July 7, 2021, the date on which the financial statements were issued. |
Basis of Presentation (Polici_2
Basis of Presentation (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Basis of Presentation | ||
Revenue Recognition | Revenue Recognition The Company recognizes revenue, net of sales tax, when it satisfies its performance obligations by transferring control of promised goods or services to its customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. 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. 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. A significant portion of the Company’s Legacy Business rental revenue is concentrated in kiosks installed with certain retail partners. Revenue aggregated at the following retailers accounted for 10% or more of the Company’s net revenue for the periods presented: Nine Months Ended September 30, 2021 2020 Wal-Mart Stores Inc. 13.0 % 14.2 % Walgreen Co. 12.2 % 15.0 % Promotional Codes and Gift Cards The Company 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 and other current liabilities As of September 30, 2021 and December 31, 2020, $7.4 million and $7.0 million, respectively, were deferred related to purchased but unredeemed promotional codes and gift cards and are included in Accrued and other current liabilities Condensed Consolidated Balance Sheets Loyalty Program In January 2018, the Company launched Redbox Perks. 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 so as 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 September 30, 2021 and December 31, 2020, $2.0 million and $2.8 million, respectively, of revenue was deferred related to Perks and is included in Accrued and other current liabilities Condensed Consolidated Balance Sheets | Revenue Recognition The Company recognizes revenue, net of sales tax, when it satisfies its performance obligations by transferring control of promised goods or services to its customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. 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. 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. A significant portion of the Company’s Legacy Business rental revenue is concentrated in kiosks installed with certain retail partners. Revenue aggregated at the following retailers accounted for 10% or more of the Company’s net revenue for the periods presented: Year Ended December 31, 2020 2019 2018 Walgreen Co. 14.6 % 14.7 % 15.5 % Wal-Mart Stores Inc. 13.8 % 18.3 % 18.2 % Promotional Codes and Gift Cards The Company 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 and other current liabilities 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, 2020 and December 31, 2019, $7.0 million and $6.8 million, respectively, were deferred related to purchased but unredeemed promotional codes and gift cards and are included in Accrued and other current liabilities in the accompanying Consolidated Balance Sheets. Loyalty Program In January 2018, the Company launched Redbox Perks. 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 so as 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, 2020 and December 31, 2019, $2.8 million and $4.8 million, respectively, of revenue was deferred related to Perks and is included in Accrued and other current liabilities in the accompanying Consolidated Balance Sheets. |
Product Cost | Product Cost Product cost primarily represents the amortization of the Company’s physical content library and digital revenue sharing costs. Amortization of the content library is calculated using rental decay curves based on historical performance of movies over their useful lives to allocate content library costs to the periods over which the related revenue are earned. Given the steepness of the rental decay curve, amortization of the content library is recorded on an accelerated basis with substantially all of the content library cost recognized within the first year. The rental decay curves and salvage value of the Company’s content library are periodically reviewed and evaluated. For movies acquired through the Company's Redbox Entertainment label, costs include (1) the costs to acquire content, (2) manufacturing costs and (3) supply chain costs. These costs are capitalized as they are incurred and amortized in proportion to the current year's revenue as a percentage of management's estimate of total ultimate revenue, not to exceed the life of the acquired rights. Ultimate revenue estimates are periodically reviewed and adjustments, if any, will result in changes to amortization rates. | Product Cost Product cost primarily represents the amortization of the Company’s physical content library and digital revenue sharing costs. Amortization of the content library is calculated using rental decay curves based on historical performance of movies and games over their useful lives to allocate content library costs to the periods over which the related revenues are earned. Given the steepness of the rental decay curve, amortization of the content library is recorded on an accelerated basis with substantially all of the content library cost recognized within the first year. The rental decay curves and salvage value of the Company’s content library are periodically reviewed and evaluated. |
Advertising Costs | Advertising Costs Advertising costs, which are included as a component of marketing expenses, include media expenses for local advertising, internet advertising, and sponsorship fees. The costs were $1.4 million and $4.6 million for the nine months ended September 30, 2021 and 2020, respectively. | Advertising Costs Advertising costs, which are included as a component of marketing expenses, include media expenses for national and local advertising, internet advertising, and sponsorship fees. The costs were $6.3 million, $4.3 million and $11.2 million for the years ended December 31, 2020, 2019 and 2018, respectively. |
Related Parties | Related Parties Amounts received from Coinstar for payment of services rendered under the commercial services agreements are recorded as a reduction of expense. Any such receivables or payables that existed as of the balance sheet date, have been presented as Due from related party and Due to related parties, net balances in the accompanying Consolidated Balance Sheet and Consolidated Statements of Cash Flows. Additionally, Due to related parties, net includes unpaid dividends related to employees and Director stock awards. Right of offset is assumed for balances between Redbox and the same related counter party and, as such, are presented as net receivables or payables based on the net balances due to or from the respective counter parties as of the balance sheet date. Redbox is part of a consolidated filing group; income taxes are paid as a pass thru to either Aspen Parent Inc. or New Outerwall. The Company’s income tax obligations are presented as the amounts that would be owed if the Company had been a standalone taxpayer and are included in Accrued and other current liabilities Consolidated Balance Sheet | |
Share Based Compensation | Share Based Compensation The Company grants share-based awards to select employees of the Company, consisting of restricted stock and performance stock units. Compensation expense is generally recognized for restricted stock units on a graded-vesting basis over the vesting period, which is generally five years. Compensation expense is generally recognized for performance stock units over the related vesting periods based on the grant-date fair value of the award when it becomes probable that the minimum return on Invested Capital (as defined under the plans) by Apollo will be satisfied. Award forfeitures are recognized at the time of occurrence. All awards granted are equity classified awards. | Share Based Compensation The Company grants share-based awards to select employees of the Company, consisting of restricted stock and performance stock units. Compensation expense is generally recognized for restricted stock units on a graded-vesting basis over the vesting period, which is generally five years. Compensation expense is generally recognized for performance stock units over the related vesting periods based on the grant-date fair value of the award when it becomes probable that the minimum return on Invested Capital (as defined under the plans) by Apollo will be satisfied. Award forfeitures are recognized at the time of occurrence. All awards granted are equity classified awards. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of deposit accounts. The Company’s cash balances with financial institutions may exceed the deposit insurance limits. The Company does not include outstanding amounts due from its payment card service providers for billed transactions in its cash balances, rather they are included in accounts receivable. | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of deposit accounts. The Company’s cash balances with financial institutions may exceed the deposit insurance limits. The Company does not include outstanding amounts due from its payment card service providers for billed transactions in its cash balances, rather they are included in accounts receivable. |
Restricted Cash | Restricted Cash Restricted cash balances are cash balances established to secure the Company’s letter of credit requirement to support its insurance obligations and is presented as a short-term asset. See also Note 6: Debt. | Restricted Cash Restricted cash balances are cash balances established to secure the Company’s letter of credit requirement to support its insurance obligations and is presented as a short-term asset. See also Note 6: Debt. |
Accounts Receivable | Accounts Receivable Accounts receivable primarily represents receivables, net of allowances for doubtful accounts, from consumers for outstanding rental transactions and amounts due from the Company’s payment card service providers for billed transactions. The allowance for doubtful accounts primarily reflects management’s best estimate of amounts related to outstanding rental transactions that will not be collected. The Company determines the allowance based on historical experience and other currently available information. | |
Content Library | Content Library Content library is comprised of movies available for rent or purchase through the Company’s kiosks as well as movies acquired through the Company’s Redbox Entertainment label. For movies available for rent or purchase through the Company’s kiosks, movie content is obtained primarily through revenue sharing agreements and license agreements with studios, as well as through distributors and other suppliers. The cost of content mainly includes (1) the costs paid to studios and other vendors to acquire content including revenue share as applicable, (2) costs incurred to label, sort, and ship content to the Company’s kiosks for merchandising, (3) costs incurred to destroy content after use if required under contractual arrangements with studios and (4) indirect taxes, if applicable. For content that the Company expects to sell, management determines an estimated salvage value. Content salvage values are estimated based on the historical sales activity. The cost of each title is capitalized and amortized to its estimated salvage value using rental decay curves as discussed above under Product Cost. For movies acquired through the Company’s Redbox Entertainment label, costs include (1) the costs to acquire content, (2) manufacturing costs and (3) supply chain costs. These costs are capitalized as they are incurred and amortized in proportion to the current year's revenue as a percentage of management's estimate of total ultimate revenue, not to exceed the life of the acquired rights. Ultimate revenue estimates are periodically reviewed and adjustments, if any, will result in changes to amortization rates. | Content Library Content library consists of movies available for rent or purchase through the Company’s kiosks. The Company obtains its movie content primarily through revenue sharing agreements and license agreements with studios, as well as through distributors and other suppliers. The cost of content mainly includes (1) the costs paid to studios and other vendors to acquire content including revenue share as applicable, (2) costs incurred to label, sort, and ship content to the Company’s kiosks for merchandising, (3) costs incurred to destroy content after use if required under contractual arrangements with studios and (4) indirect taxes, if applicable. For content that the Company expects to sell, management determines an estimated salvage value. Content salvage values are estimated based on the historical sales activity. The cost of each title is capitalized and amortized to its estimated salvage value using rental decay curves as discussed above under Product Cost. |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets are generally comprised of insurance-related receivables representing estimated amounts due from the Company’s insurance partners in excess of its deductibles, spare parts that are not separately capitalized for use in the repair and maintenance of its kiosks, the value of cases and labels used to vend and track discs, net of amortization, and various prepayments for operating expenses including software licenses when not determined to be a component of property and equipment. | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets are generally comprised of insurance-related receivables representing estimated amounts due from the Company’s insurance partners in excess of its deductibles, spare parts that are not separately capitalized for use in the repair and maintenance of its kiosks, the value of cases and labels used to vend and track discs, net of amortization, and various prepayments for operating expenses including software licenses when not determined to be a component of property and equipment. |
Property, Plant and Equipment, Policy [Policy Text Block] | 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: 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 | |
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. | |
Intangible Assets Subject to Amortization | Intangible Assets Subject to Amortization The Company’s intangible assets subject to amortization comprise the value of its retailer relationships, the Redbox trade name, its contactable customer list, and developed technology as determined on the date of the Apollo Acquisition. The Company amortizes its intangible assets over their expected useful lives on a straight-line basis as the future pattern of consumption of the economic benefit derived from the identified intangible assets cannot be reliably determined. The Company annually reassess the useful lives of its intangible assets subject to amortization and the methods under which they are amortized. For further information, see Note 4: Goodwill and Other Intangible Assets. | |
Goodwill | Goodwill Goodwill represents the excess purchase price of an acquired enterprise or assets over the estimated fair value of identifiable net assets acquired. Goodwill is evaluated for impairment annually during the fourth quarter, or more frequently if an event occurs or circumstances change that could more likely than not reduce the fair value of a reporting unit below its carrying value. As part of the Company’s impairment analysis, fair value of a reporting unit is determined using both the income and market approaches. The income approach requires management to estimate a number of factors for each reporting unit, including projected future operating results, economic projections, anticipated future cash flows and discount rates. For further information, see Note 4: Goodwill and Other Intangible Assets. | |
Business Combinations | Business Combinations The Company recognizes identifiable assets acquired and liabilities assumed at their acquisition date fair values. Goodwill as of the acquisition date is measured as the excess purchase price of an acquired enterprise or assets over the estimated fair value of identifiable net assets acquired. Transaction costs associated with business combinations are expensed as incurred. | |
Recoverability of Equipment and Other Long-Lived Assets | Recoverability of Equipment and Other Long-Lived Assets The Company evaluates the estimated remaining life and recoverability of equipment and other assets, including intangible assets subject to amortization, whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Factors that would indicate potential impairment include, but are not limited to, significant decreases in the market value of the long-lived asset(s), a significant change in the long-lived asset’s use or physical condition, and operating or cash flow losses associated with the use of the long-lived asset. When there is an indication of impairment, the Company prepares an estimate of future undiscounted cash flows expected to result from the use of the asset and its eventual disposition to test recoverability. If the sum of the future undiscounted cash flows is less than the carrying value of the asset, it indicates that the long-lived asset is not recoverable, in which case the Company will then compare the estimated fair value to its carrying value. If the estimated fair value is less than the carrying value of the asset, the Company will recognize the impairment loss and adjust the carrying amount of the asset to its estimated fair value. No impairment losses have been recorded during years ended December 31, 2020, 2019 and 2018, respectively. | |
Trade Payables | Trade Payables Trade payables are primarily comprised of non-revenue share payments to the Company’s content partners, payments due to its retailer partners, and various other payments due for invoiced goods and services from its operational vendors. | |
Accrued and Other Current Liabilities | Accrued and Other Current Liabilities Accrued and other current liabilities generally consist of estimated total amounts due under contractual revenue-sharing arrangements with the Company’s content providers net of payments made during the respective title’s rental period, employee related liabilities primarily related to compensation, deferred revenue related to stored-value arrangements and the Company’s loyalty program, estimated income taxes payable, sales and rental-related taxes collected from the Company’s consumers on behalf of governmental entities, estimated gross amounts due for insurance claims incurred but not recorded, and various other estimates of amounts due but not invoiced for goods and services from the Company’s operational vendors. | Accrued and Other Current Liabilities Accrued and other current liabilities generally consist of estimated total amounts due under contractual revenue-sharing arrangements with the Company’s content providers net of payments made during the respective title’s rental period, employee related liabilities primarily related to compensation, deferred revenue related to stored-value arrangements and the Company’s loyalty program, estimated income taxes payable, sales and rental-related taxes collected from the Company’s consumers on behalf of governmental entities, estimated gross amounts due for insurance claims incurred but not recorded, and various other estimates of amounts due but not invoiced for goods and services from the Company’s operational vendors. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, management determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under the tax law, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions in accordance with ASC 740, Income Taxes, on the basis of a two-step process in which (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, it will recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statements of operations. Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheet. | |
Loss Contingencies | Loss Contingencies The Company accrues estimated liabilities for loss contingencies arising from claims, assessments, litigation and other sources when it is probable that a liability has been incurred and the amount of the claim assessment or damages can be reasonably estimated. The Company believes it has sufficient accruals to cover any obligations resulting from claims, assessments or litigation that have met these criteria. | Loss Contingencies The Company accrues estimated liabilities for loss contingencies arising from claims, assessments, litigation and other sources when it is probable that a liability has been incurred and the amount of the claim assessment or damages can be reasonably estimated. The Company believes it has sufficient accruals to cover any obligations resulting from claims, assessments or litigation that have met these criteria. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Certain financial assets and liabilities are required to be carried at fair value. Fair value is the price that would be received to sell an asset, or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. In determining fair value, the Company utilizes market data or assumptions that it believes market participants would use in pricing the asset or liability, which would maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, including assumptions about risk and the risks inherent in the inputs to the valuation technique. In evaluating the fair value measurement techniques for recording certain financial assets and liabilities, there is a three-level valuation hierarchy under which financial assets and liabilities are designated. The determination of the applicable level within the hierarchy of a particular financial asset or liability depends on the inputs used in valuation as of the measurement date. Valuations based on observable or market-based inputs for identical asset or liabilities (Level 1 measurement) are given the highest level of priority, whereas valuations based on unobservable or internally derived inputs (Level 3 measurement) are given the lowest level of priority. The three levels of the fair value hierarchy are defined as follows: ● Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities; ● Level 2: Inputs other than Level 1 inputs that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or market-corroborated inputs; or ● Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying amounts for the Company’s cash equivalents approximate fair value because of the short-term nature of these instruments. The fair value of the Company’s long-term debt approximates its carrying amount, which is presented net of unamortized deferred financing costs. | Fair Value of Financial Instruments Certain financial assets and liabilities are required to be carried at fair value. Fair value is the price that would be received to sell an asset, or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. In determining fair value, the Company utilizes market data or assumptions that it believes market participants would use in pricing the asset or liability, which would maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, including assumptions about risk and the risks inherent in the inputs to the valuation technique. In evaluating the fair value measurement techniques for recording certain financial assets and liabilities, there is a three-level valuation hierarchy under which financial assets and liabilities are designated. The determination of the applicable level within the hierarchy of a particular financial asset or liability depends on the inputs used in valuation as of the measurement date. Valuations based on observable or market-based inputs for identical asset or liabilities (Level 1 measurement) are given the highest level of priority, whereas valuations based on unobservable or internally derived inputs (Level 3 measurement) are given the lowest level of priority. The three levels of the fair value hierarchy are defined as follows: ● Level 1 : Observable inputs such as quoted prices in active markets for identical assets or liabilities; ● Level 2 : Inputs other than Level 1 inputs that are observable for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or market-corroborated inputs; or ● Level 3 : Unobservable inputs that reflect the reporting entity’s own assumptions. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The carrying amounts for the Company’s cash equivalents approximate fair value because of the short-term nature of these instruments. The fair value of the Company’s long-term debt approximates its carrying amount, which is presented net of unamortized deferred financing costs. |
Derivative Instruments | Derivative Instruments The Company is exposed to certain market risks relating to interest rates. The Company actively monitors and attempts to mitigate but does not eliminate these exposures using derivative instruments including interest rate swaps. The Company does not enter into derivative instruments for speculative or trading purposes. The Company recognizes its derivatives as either assets or liabilities and measure those instruments at estimated fair value. The Company presents its derivative positions gross on its unaudited Condensed Consolidated Balance Sheets Condensed Consolidated Statements of Operations | Derivative Instruments The Company is exposed to certain market risks relating to interest rates. The Company actively monitors and attempts to mitigate but does not eliminate these exposures using derivative instruments including interest rate swaps. The Company does not enter into derivative instruments for speculative or trading purposes. The Company recognizes its derivatives as either assets or liabilities and measure those instruments at estimated fair value. The Company presents its derivative positions gross on its Consolidated Balance Sheets. The Company records changes in the fair value of derivatives as a component of other expense, net on its Consolidated Statements of Operations. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Guidance Recently Adopted: In August 2018, the FASB issued ASU 2018-05, Intangibles-Goodwill and Other-Internal-Use-Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. In March 2019, the FASB issued ASU 2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials (Subtopic 926-20) Accounting Guidance Not Yet Adopted: In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) | Recent Accounting Pronouncements Accounting Guidance Not Yet Adopted: In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2020-04, Reference Rate Reform (ASU 2020-04), which provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by the discontinuance of LIBOR or another referenced rate. ASU 2020-04 is effective for fiscal years beginning after December 31, 2022. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) to simplify the accounting for income taxes. This guidance removes certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. The guidance also clarifies and simplifies other areas of ASC 740. This standard is effective for private companies for fiscal years beginning after December 15, 2021. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use-Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. The ASU requires a customer in a cloud computing arrangement (i.e., hosting arrangement) that is a service contract to follow the internal-use software guidance in ASC 350-40 to determine whether to capitalize certain implementation costs or expense them as incurred. For private companies, the guidance is effective for reporting periods beginning after December 15, 2020. The Company is currently evaluating the impact of adopting this ASU, and does not expect a material impact on its consolidated financial statements and related disclosures. In March 2019, the FASB issued ASU 2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials (Subtopic 926-20), in order to align the accounting for production costs of an episodic television series with the accounting for production costs of films by removing the content distinction for capitalization. ASU 2019-02 also requires that an entity reassess estimates of the use of a film in a film group and account for any changes prospectively. In addition, 2019-02 requires that an entity test films and license agreements for impairment at a film group level when the film or license agreements are predominantly monetized with other films and license agreements. For private companies, the guidance is effective for reporting periods beginning after December 15, 2020. The Company is currently evaluating the impact of adopting this ASU, and does not expect a material impact on its consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The ASU requires lessees, among other things, to recognize lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous authoritative guidance. This update also introduces new disclosure requirements for leasing arrangements. For private companies, the guidance is effective for reporting periods beginning after December 15, 2021, with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326). The ASU provides new guidance regarding measurement and recognition of credit impairment for certain financial assets. Such guidance will impact how the Company determines its allowance for estimated uncollectible receivables. For private companies, the guidance is effective for reporting periods beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and related disclosures. |
Basis of Presentation (Tables_2
Basis of Presentation (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Basis of Presentation | ||
Schedule of estimated useful lives of the assets | Year Ended December 31, 2020 2019 2018 Walgreen Co. 14.6 % 14.7 % 15.5 % Wal-Mart Stores Inc. 13.8 % 18.3 % 18.2 % | |
Schedule of Aggregation of Revenue | Nine Months Ended September 30, 2021 2020 Wal-Mart Stores Inc. 13.0 % 14.2 % Walgreen Co. 12.2 % 15.0 % | 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 |
Property and Equipment (Table_2
Property and Equipment (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Property and Equipment | ||
Schedule of property and equipment | September 30, December 31, Dollars in thousands 2021 2020 Kiosks and components $ 190,202 $ 190,416 Computers, servers, and software 96,352 87,113 Leasehold improvements 4,145 3,991 Office furniture and equipment 676 676 Leased Vehicles 10,436 10,678 Property and equipment, at cost $ 301,811 $ 292,874 Accumulated depreciation (256,600) (229,785) Property and equipment, net $ 45,211 $ 63,089 | December 31, December 31, Dollars in thousands 2020 2019 Kiosks and components $ 190,416 $ 186,158 Computers, servers, and software 87,113 73,730 Leasehold improvements 3,991 4,978 Office furniture and equipment 676 876 Leased Vehicles 10,678 11,813 Property and equipment, at cost $ 292,874 $ 277,555 Accumulated depreciation (229,785) (167,672) Property and equipment, net $ 63,089 $ 109,883 |
Goodwill and Other Intangible_7
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Goodwill and Other Intangible Assets | ||
Summary of changes in goodwill by reportable segment | Legacy Digital Dollars in thousands Business Business Total Balance as of December 31, 2020 $ 144,014 $ 3,509 $ 147,523 Balance as of September 30, 2021 $ 144,014 $ 3,509 $ 147,523 | Legacy Digital Dollars in thousands Business Business Total Balance as of December 31, 2018 $ 144,014 $ 3,509 $ 147,523 Balance as of December 31, 2019 $ 144,014 $ 3,509 $ 147,523 Balance as of December 31, 2020 $ 144,014 $ 3,509 $ 147,523 |
Summary of carrying amounts and accumulated amortization of intangible assets | September 30, 2021 December 31, 2020 Gross Net Gross Net Estimated Carrying Accumulated Carrying Carrying Accumulated Carrying Dollars in thousands Useful Life Amount Amortization Amount Amount Amortization Amount Intangible assets subject to amortization: Contracts with retailers 7 years $ 370,000 $ (264,873) $ 105,127 $ 370,000 $ (225,230) $ 144,770 Trade name 7 years 60,000 (42,953) 17,047 60,000 (36,524) 23,476 Contactable customer list 7 years 40,000 (28,635) 11,365 40,000 (24,349) 15,651 Developed technology 7 years 30,000 (21,476) 8,524 30,000 (18,262) 11,738 Total intangible assets subject to amortization $ 500,000 $ (357,937) $ 142,063 $ 500,000 $ (304,365) $ 195,635 | December 31, 2020 December 31, 2019 Gross Net Gross Net Estimated Carrying Accumulated Carrying Carrying Accumulated Carrying Dollars in thousands Useful Life Amount Amortization Amount Amount Amortization Amount Intangible assets subject to amortization: Contracts with retailers 7 years $ 370,000 $ (225,230) $ 144,770 $ 370,000 $ (172,373) $ 197,627 Trade name 7 years 60,000 (36,524) 23,476 60,000 (27,952) 32,048 Contactable customer list 7 years 40,000 (24,349) 15,651 40,000 (18,635) 21,365 Developed technology 7 years 30,000 (18,262) 11,738 30,000 (13,977) 16,023 Total intangible assets subject to amortization $ 500,000 $ (304,365) $ 195,635 $ 500,000 $ (232,937) $ 267,063 |
Summary of amortization of intangible assets for each of next five fiscal years | Amortization of Dollars in thousands intangible assets 2021 $ 71,428 2022 71,428 2023 52,779 2024 — 2025 — Total expected amortization $ 195,635 |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Accrued and Other Current Liabilities | ||
Summary of accrued expenses and other current liabilities | September 30, December 31, Dollars in thousands 2021 2020 Accrued payroll and other related expenses $ 20,776 $ 24,212 Accrued revenue share 12,669 13,480 Deferred revenue 11,203 10,019 Income taxes payable — 15,777 Other 15,414 12,466 Total accrued and other current liabilities $ 60,062 $ 75,954 | Accrued and other current liabilities as of December 31, 2020 and 2019, consisted of the following: December 31, December 31, Dollars in thousands 2020 2019 Accrued payroll and other related expenses $ 24,212 $ 22,860 Accrued revenue share 13,480 20,976 Deferred revenue 10,019 11,570 Income taxes payable 15,777 15,777 Other 12,466 14,706 Total accrued and other current liabilities $ 75,954 $ 85,889 |
Debt (Tables)_2
Debt (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Debt | ||
Summary of debt | September 30, December 31, Dollars in thousands 2021 2020 Term Loan Facility $ 306,563 $ 281,563 Paid-In-Kind Interest related to Term Loan Facility 24,186 — Revolving Credit Facility 30,000 30,000 Paid-In-Kind Interest related to Revolving Credit Facility 2,227 — Union Revolving Credit Facility 4,590 2,550 Total debt outstanding $ 367,566 $ 314,113 Less: Unamortized debt issuance costs (5,676) (6,639) Total debt, net $ 361,890 $ 307,474 Portion due within one year $ — $ — Total long-term debt, net $ 361,890 $ 307,474 | December 31, December 31, Dollars in thousands 2020 2019 Term B Facility $ 281,563 $ 318,750 Revolving Credit Facility 30,000 — Union Revolving Credit Facility 2,550 — Total debt outstanding $ 314,113 $ 318,750 Less: Unamortized debt issuance costs (6,639) (10,212) Total debt, net $ 307,474 $ 308,538 Portion due within one year $ — $ 63,750 Total long-term debt, net $ 307,474 $ 244,788 |
Summary of required minimum principal amortization payments | Required minimum principal amortization payments under the Term Loan Facility as of September 30, 2021, are as follows: Repayment Dollars in thousands Amount Remaining 2021 $ — 2022 — 2023 330,749 Total $ 330,749 | Dollars in thousands Repayment 2021 $ — 2022 — 2023 281,563 Total $ 281,563 |
Derivatives (Tables)_2
Derivatives (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Derivatives | ||
Summary of balance sheet location of the Company's derivative instrument | Balance Sheet September 30, December 31, Dollars in thousands Location 2021 2020 Derivatives not designated as hedging instruments: Interest rate swap contract Other liabilities $ 461 $ 4,782 | Balance Sheet December 31, December 31, Dollars in thousands Location 2020 2019 Derivatives not designated as hedging instruments: Interest rate swap contract Other $ 4,782 $ 5,253 |
Summary of effect of company's derivative instrument on the Consolidated Statements of Operations | For the nine months ended September 30, Dollars in thousands 2021 2020 Other (income) expense, net $ (899) $ 4,324 | For the years ended December 31, Dollars in thousands 2020 2019 2018 Other expense, net $ 4,341 $ 3,946 $ 3,012 |
Segment Information and Geogr_8
Segment Information and Geographic Data (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Segment Information and Geographic Data | ||
Summary of financial information by segment | Summarized financial information by segment is as follows: Nine Months Ended September 30, Dollars in thousands 2021 2020 Net revenue Legacy Business $ 192,025 $ 433,215 Digital Business 24,347 31,993 Total $ 216,372 $ 465,208 Adjusted EBITDA Legacy Business $ (8,940) $ 106,133 Digital Business 2,257 3,642 Total $ (6,683) $ 109,775 | Summarized financial information by segment is as follows: For the years ended December 31, Dollars in thousands 2020 2019 2018 Net revenue Legacy Business $ 506,437 $ 838,627 $ 1,077,731 Digital Business 39,754 19,743 10,052 Total $ 546,191 $ 858,370 $ 1,087,783 Adjusted EBITDA Legacy Business $ 109,074 $ 197,887 $ 289,765 Digital Business 4,702 (2,238) 2,281 Total $ 113,776 $ 195,649 $ 292,046 |
Summary of reconciliation of Adjusted EBITDA to (loss) income before income | The following is a reconciliation of Adjusted EBITDA to loss before income taxes for the nine months ended September 30, 2021 and 2020: Nine Months Ended September 30, Dollars in thousands 2021 2020 Loss before income taxes $ (123,841) $ (52,612) Add: Depreciation and amortization 81,317 108,316 Interest and other expense, net 24,687 24,848 Business optimization (a) 5,605 15,142 One-time non-recurring (b) 2,737 5,934 New business start-up costs (c) 1,004 4,821 Restructuring related (d) 1,808 3,326 Adjusted EBITDA $ (6,683) $ 109,775 (a) Business optimization costs include employee retention costs, IT costs as well as consulting costs for certain projects. For the nine months ended September 30, 2021 and 2020 the Company recorded IT costs of $2.2 million and $4.4 million, respectively. The Company recorded employee retention expense of $3.2 million and $10.7 million for each of the nine months ended September 30, 2021 and 2020, respectively. (b) Includes costs related to project costs and initiatives, as well as bank, legal and other fees in connection with the Company’s debt financing activities. (c) Includes costs to support the Company’s On Demand and AVOD offerings, along with costs related to the Company’s service and media network businesses. (d) Restructuring related costs include such items as employee severance charges and costs incurred related to removing kiosks. | The following is a reconciliation of Adjusted EBITDA to (loss) income before income for the years ended December 31, 2020, 2019 and 2018: Year ended December 31, Dollars in thousands 2020 2019 2018 (Loss) income before income taxes $ (94,707) $ (14,823) $ 80,908 Add: Depreciation and amortization 136,838 138,274 133,493 Interest and other expense, net 32,522 44,578 45,155 Business optimization (a) 19,011 7,687 1,227 One-time non-recurring (b) 10,600 5,482 13,229 New business start-up costs (c) 6,041 3,793 10,060 Restructuring related (d) 3,471 4,432 625 Discontinuation of games business (e) — 6,226 7,349 Adjusted EBITDA $ 113,776 $ 195,649 $ 292,046 (a) Business optimization costs include employee retention costs, IT costs as well as consulting costs for certain projects. Retention costs for the years ended 2020 and 2019 were $13.9 million and $3.0 million, respectively. In 2020, retention awards were paid out to all employees in light of the COVID pandemic and were in lieu of the Company’s short-term incentive program. IT costs of $4.8 million and $3.8 million were incurred in 2020 and 2019 respectively. The Company’s IT project is a complete restructuring of the Company’s technologies as it to moves to a cloud-based infrastructure. (b) Includes costs related to project costs and initiatives, as well as bank, legal and other fees in connection with the Company’s debt financing activities. (c) Includes costs to support the Company’s On Demand and AVOD offerings, along with costs related to the Company’s service and media network businesses. |
Earnings Per Share (Tables)_2
Earnings Per Share (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Earnings Per Share | ||
Summary of calculation of EPS | The following is a calculation of EPS: Nine Months Ended September 30, Dollars in thousands, except per share amounts 2021 2020 Basic and Diluted EPS Net loss attributable to shareholders $ (92,938) $ (39,135) Weighted average outstanding 30,839,870 27,870,539 Basic and diluted common $ (3.01) $ (1.40) | The following is a calculation of EPS (in thousands, except share and per share amounts): Year ended December 31, 2020 2019 2018 Basic EPS Net (loss) income attributable to shareholders $ (69,503) $ (7,567) $ 61,453 Weighted average shares outstanding for basic earnings (loss) per share 27,906,742 27,779,339 27,623,415 Basic earnings (loss) per common shares attributable to shareholders $ (2.49) $ (0.27) $ 2.22 Diluted EPS Net (loss) income attributable to shareholders $ (69,503) $ (7,567) $ 61,453 Weighted average shares outstanding for basic earnings (loss) per share: 27,906,742 27,779,339 27,623,415 Dilutive effect of restricted stock units — — 573,993 Weighted average shares outstanding for diluted earnings (loss) per share 27,906,742 27,779,339 28,197,409 Diluted earnings (loss) per common share attributable to shareholders $ (2.49) $ (0.27) $ 2.18 |
Commitments and Contingencies_7
Commitments and Contingencies (Tables) | 6 Months Ended | 9 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies | |||
Summary of assets held under capital leases included in property and equipment, net | Assets held under capital leases are included in Property and equipment, net Condensed Consolidated Balance Sheets September 30, December 31, Dollars in thousands 2021 2020 Gross property and equipment $ 10,436 $ 10,677 Accumulated depreciation (6,981) (5,204) Net property and equipment $ 3,455 $ 5,473 | ||
Summary of assets held under capital leases included in property and equipment, net | September 30, December 31, Dollars in thousands 2021 2020 Gross property and equipment $ 10,436 $ 10,677 Accumulated depreciation (6,981) (5,204) Net property and equipment $ 3,455 $ 5,473 | Dollars in thousands December 31, 2020 December 31, 2019 Gross property and equipment $ 10,677 $ 11,813 Accumulated depreciation (5,204) (3,529) Net property and equipment $ 5,473 $ 8,284 | |
Summary of future minimum lease payments under contractual lease obligations | Total estimated movie content commitments under the terms of the Company’s content license agreements in effect as of September 30, 2021 is presented in the following table: Dollars in thousands Total 2021 2022 Minimum estimated movie content commitments $ 28,714 $ 7,979 $ 20,735 | ||
Summary of future minimum lease payments under contractual lease obligations | Dollars in thousands December 31, 2020 December 31, 2019 Gross property and equipment $ 10,677 $ 11,813 Accumulated depreciation (5,204) (3,529) Net property and equipment $ 5,473 $ 8,284 | ||
Summary of minimum estimated movie content commitments | Dollars in thousands Total 2021 2022 Minimum estimated movie content commitments $ 28,714 $ 7,979 $ 20,735 | Dollars in thousands Total 2021 2022 Minimum estimated movie content commitments $ 59,788 $ 38,319 $ 21,469 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax | |
Summary of components of (loss) income before income taxes | Year Ended December 31, Dollars in thousands 2020 2019 2018 U.S. operations $ (94,707) $ (14,823) $ 80,908 |
Summary of components of income tax (benefit) expense | Year Ended December 31, Dollars in thousands 2020 2019 2018 Current: U.S. Federal $ (491) $ 11,653 $ 27,741 State and local 711 4,209 7,955 Total current $ 220 $ 15,862 $ 35,696 Deferred: U.S. Federal (21,489) (19,467) (14,496) State and local (3,935) (3,651) (1,745) Total deferred $ (25,424) $ (23,118) $ (16,241) Total income tax (benefit) expense $ (25,204) $ (7,256) $ 19,455 |
Summary of income tax expense differs from the amount that would result by applying the U.S. statutory rate to income before income taxes | Year Ended December 31, 2020 2019 2018 U.S Federal tax expense at statutory rates 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit 3.8 % 8.7 % 4.6 % Valuation allowance (0.2) % (6.8) % 0.1 % Federal research & development credit 2.0 % 7.4 % (0.7) % Uncertain tax benefit on federal research and development credit (0.5) % (3.7) % 0.6 % Release of uncertain tax benefits 0.2 % 22.1 % (2.2) % Other 0.4 % 0.2 % 0.7 % Effective tax rate 26.6 % 48.9 % 24.0 % |
Summary of aggregate changes in the balance of unrecognized tax benefits | Year Ended December 31, Dollars in thousands 2020 2019 2018 Balance, beginning of the period $ 1,935 $ 4,558 $ 5,894 Additions based on tax positions related to the current year 250 150 150 Additions for tax positions related to prior years 215 509 321 Deductions for tax positions related to prior years (187) (1,945) (1,807) Deductions for tax positions effectively settled — (1,337) — Balance, end of period $ 2,213 $ 1,935 $ 4,558 |
Summary of significant components of the Company's deferred tax assets and liabilities | December 31, 2020 2019 Deferred tax assets: Credit carryforwards $ 1,117 $ 1,124 Accrued liabilities and allowances 1,388 614 Compensation accruals 2,750 2,966 Asset retirement obligation liability 1,994 2,257 Deferred revenue 2,237 2,682 Hedge liability 1,200 1,315 Other 253 46 Gross deferred tax assets 10,939 11,004 Less: Valuation Allowance (1,039) (851) Total deferred tax assets $ 9,900 $ 10,153 Deferred tax liabilities: Property and equipment (14,172) (23,250) Product costs (3,905) (7,107) Prepaid expenses (284) (241) Intangible assets (30,965) (44,819) Goodwill (1,745) (1,331) Total deferred tax liabilities $ (51,071) $ (76,748) Net deferred tax liabilities $ (41,171) $ (66,595) |
Summary of state tax credits before valuation allowances and related expiration periods | December 31, 2020 Dollars in thousands Amount Expiration State tax credits: Illinois state tax credits $ 1,117 2021 – 2025 Total U.S. state tax credits $ 1,117 |
Related-Party Transactions (T_2
Related-Party Transactions (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Related Party Transactions | ||
summary of the amounts due to from such related parties | September 30, December 31, Dollars in thousands 2021 2020 Due from related party $ 162 $ 73 Due to related parties, net $ 357 $ 449 | December 31, December 31, Dollars in thousands 2020 2019 Due from related party $ 73 $ 2,712 Due to related parties, net $ 449 $ 1,477 |
Additional Supplemental Cash _7
Additional Supplemental Cash Flow Financial Information (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Additional Supplemental Cash Flow Financial Information | ||
Schedule of supplemental cash flow financial information | Cash, Cash Equivalents and Restricted Cash: September 30, December 31, Dollars in thousands 2021 2020 Cash and cash equivalents $ 9,798 $ 5,401 Restricted cash 3,360 3,526 Cash, cash equivalents and restricted cash $ 13,158 $ 8,927 Cash Interest and Taxes: Nine Months Ended September 30, Dollars in thousands 2021 2020 Cash paid during the period for interest $ — $ 20,853 Cash paid during the period for income taxes, net $ 622 $ 2,726 Non-cash Transactions Nine Months Ended September 30, Dollars in thousands 2021 2020 Purchases of property and equipment financed by capital lease obligations $ 28 $ 130 Purchases of property and equipment included in ending trade payables or accrued and other current liabilities $ 197 $ — | Cash, Cash Equivalents and Restricted Cash Year Ended December 31, Dollars in thousands 2020 2019 Cash and cash equivalents $ 5,401 $ 3,852 Restricted cash 3,526 3,526 Cash, cash equivalents and restricted cash $ 8,927 $ 7,378 Cash Interest and Taxes Year Ended December 31, Dollars in thousands 2020 2019 Cash paid during the period for interest $ 29,061 $ 36,659 Cash paid during the period for income taxes, net $ 2,993 $ 20,907 Non-cash Transactions Year Ended December 31, Dollars in thousands 2020 2019 Purchases of property and equipment financed by capital lease obligations $ 338 $ 6,051 Purchases of property and equipment included in ending trade payables or accrued and other current liabilities $ 653 $ 224 |
Description of Business (Deta_2
Description of Business (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021itemsegment | Dec. 31, 2020itemsegmentlocation | |
Organization and Business Operations | ||
Network operations in number of self-service kiosks | 40,000 | 40,000 |
Network operations in number of locations | 33,000 | 34,000 |
Access given for minimum number of linear channels | 95 | |
Number of operating segments | segment | 2 | 2 |
Basis of Presentation (Detail_2
Basis of Presentation (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Basis of Presentation | |||||
Purchased but unredeemed promotional codes and gift cards deferred | $ 7,400 | $ 7,000 | $ 6,800 | ||
Deferred perks | 2,000 | 2,800 | 4,800 | ||
Advertising costs | $ 1,400 | $ 4,600 | $ 6,300 | 4,300 | $ 11,200 |
Vesting period | 5 years | 5 years | |||
Impairment losses | $ 0 | $ 0 | $ 0 |
Basis of Presentation - Sched_2
Basis of Presentation - Schedule of Aggregation of Revenue (Details) - Customer concentration - Revenue | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Walgreen Co. | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 14.60% | 14.70% | 15.50% |
Wal-Mart Stores Inc. | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 13.80% | 18.30% | 18.20% |
Basis of Presentation - Sched_3
Basis of Presentation - Schedule of Estimated Useful Lives of the Assets (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Maximum | Kiosks and components | |
Estimated useful life | 5 years |
Maximum | Computers, servers, and software | |
Estimated useful life | 3 years |
Maximum | Leasehold improvements | |
Estimated useful life | 6 years |
Maximum | Office furniture and equipment | |
Estimated useful life | 7 years |
Maximum | Leased Vehicles | |
Estimated useful life | 4 years |
Minimum | Kiosks and components | |
Estimated useful life | 3 years |
Minimum | Computers, servers, and software | |
Estimated useful life | 2 years |
Minimum | Leasehold improvements | |
Estimated useful life | 3 years |
Minimum | Office furniture and equipment | |
Estimated useful life | 5 years |
Minimum | Leased Vehicles | |
Estimated useful life | 3 years |
Property and Equipment (Detai_2
Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, at cost | $ 301,811 | $ 292,874 | $ 277,555 |
Accumulated depreciation | (256,600) | (229,785) | (167,672) |
Property and equipment, net | 45,211 | 63,089 | 109,883 |
Kiosks and components | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, at cost | 190,202 | 190,416 | 186,158 |
Computers, servers, and software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, at cost | 96,352 | 87,113 | 73,730 |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, at cost | 4,145 | 3,991 | 4,978 |
Office furniture and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, at cost | 676 | 676 | 876 |
Leased Vehicles | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, at cost | $ 10,436 | $ 10,678 | $ 11,813 |
Goodwill and Other Intangible_8
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Goodwill | $ 147,523 | $ 147,523 | $ 147,523 | $ 147,523 |
Legacy Business | ||||
Goodwill | 144,014 | 144,014 | 144,014 | 144,014 |
Digital Business | ||||
Goodwill | $ 3,509 | $ 3,509 | $ 3,509 | $ 3,509 |
Goodwill and Other Intangible_9
Goodwill and Other Intangible Assets - Intangible asset (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Gross Carrying Amount | $ 500,000 | $ 500,000 | $ 500,000 |
Accumulated Amortization | 357,937 | 304,365 | (232,937) |
Net Carrying Amount | $ 142,063 | $ 195,635 | 267,063 |
Contracts with retailers | |||
Estimated Useful Life | 7 years | 7 years | |
Gross Carrying Amount | $ 370,000 | $ 370,000 | 370,000 |
Accumulated Amortization | 264,873 | 225,230 | (172,373) |
Net Carrying Amount | $ 105,127 | $ 144,770 | 197,627 |
Trade name | |||
Estimated Useful Life | 7 years | 7 years | |
Gross Carrying Amount | $ 60,000 | $ 60,000 | 60,000 |
Accumulated Amortization | 42,953 | 36,524 | (27,952) |
Net Carrying Amount | $ 17,047 | $ 23,476 | 32,048 |
Contactable customer list | |||
Estimated Useful Life | 7 years | 7 years | |
Gross Carrying Amount | $ 40,000 | $ 40,000 | 40,000 |
Accumulated Amortization | 28,635 | 24,349 | (18,635) |
Net Carrying Amount | $ 11,365 | $ 15,651 | 21,365 |
Developed technology | |||
Estimated Useful Life | 7 years | 7 years | |
Gross Carrying Amount | $ 30,000 | $ 30,000 | 30,000 |
Accumulated Amortization | 21,476 | 18,262 | (13,977) |
Net Carrying Amount | $ 8,524 | $ 11,738 | $ 16,023 |
Goodwill and Other Intangibl_10
Goodwill and Other Intangible Assets - Amortization (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill and Other Intangible Assets | |||||
2021 | $ 71,428 | ||||
2022 | 71,428 | ||||
2023 | 52,779 | ||||
Net Carrying Amount | $ 142,063 | 195,635 | $ 267,063 | ||
Amortization of intangible assets | 53,572 | $ 53,571 | 71,428 | 71,428 | $ 71,428 |
Impairment of intangible assets | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Accrued and Other Current Liabilities | |||
Accrued payroll and other related expenses | $ 20,776 | $ 24,212 | $ 22,860 |
Accrued revenue share | 12,669 | 13,480 | 20,976 |
Deferred revenue | 11,203 | 10,019 | 11,570 |
Income taxes payable | 15,777 | 15,777 | |
Other | 15,414 | 12,466 | 14,706 |
Total accrued and other current liabilities | $ 60,062 | $ 75,954 | $ 85,889 |
Debt - Summary of debt (Detai_2
Debt - Summary of debt (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||
Total debt outstanding | $ 367,566 | $ 314,113 | $ 318,750 |
Less: Unamortized debt issuance costs | (5,676) | (6,639) | (10,212) |
Total debt, net | 361,890 | 307,474 | 308,538 |
Portion due within one year | 63,750 | ||
Total long-term debt, net | 361,890 | 307,474 | 244,788 |
Term B Facility | |||
Debt Instrument [Line Items] | |||
Total debt outstanding | 306,563 | 281,563 | $ 318,750 |
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Total debt outstanding | 30,000 | 30,000 | |
Union Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Total debt outstanding | $ 4,590 | $ 2,550 |
Debt - Term Loan Facility And R
Debt - Term Loan Facility And Revolving Credit Facility (Details) - USD ($) $ in Millions | Oct. 20, 2017 | Dec. 31, 2020 |
Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Aggregate principal amount | $ 425 | |
Term of debt | 5 years | |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Aggregate principal amount | $ 30 | $ 30 |
Term of debt | 5 years |
Debt - Incremental Assumption a
Debt - Incremental Assumption and Amendment Agreement (Details) - USD ($) $ in Millions | Sep. 07, 2018 | Oct. 20, 2017 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||||||
Dividends to equity holders | $ 1 | $ 1.2 | $ 115.8 | |||
Payment of one or more restricted payments to shareholders | $ 115 | |||||
Term Loan Facility | ||||||
Debt Instrument [Line Items] | ||||||
Retirement of existing debt outstanding | $ 280 | $ 280 | ||||
Cost associated with debt | 19.5 | 19.5 | ||||
Dividends to equity holders | 160 | 160 | ||||
Write-off unamortized deferred financing costs | 21.7 | 21.7 | ||||
Aggregate principal amount | 425 | |||||
Term Loan B-1 facility | ||||||
Debt Instrument [Line Items] | ||||||
Cost associated with debt | 3.7 | |||||
Dividends to equity holders | 115 | |||||
Aggregate principal amount | 85.8 | $ 85.8 | ||||
Payment of one or more restricted payments to shareholders | $ 85.8 | |||||
Number of business days within which dividend was paid | 5 days | |||||
Apollo Global Securities, LLC | Term Loan Facility | ||||||
Debt Instrument [Line Items] | ||||||
Cost associated with debt | $ 4.6 | $ 4.6 |
Debt - First lien term loan (_2
Debt - First lien term loan (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Sep. 07, 2018 | Oct. 20, 2017 |
Term B Facility | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 425 | ||
Term Loan B-1 facility | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | 85.8 | $ 85.8 | |
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 30 | $ 30 |
Debt (Details)
Debt (Details) - Union Revolving Credit Facility - USD ($) $ in Thousands | Dec. 29, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 29, 2020 |
Debt Instrument [Line Items] | ||||
Term of debt | 4 years | |||
Maximum borrowing capacity | $ 20,000 | $ 20,000 | ||
Borrowings outstanding | $ 4,600 | $ 2,550 |
Debt - Dividends per Share (Det
Debt - Dividends per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 20, 2017 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 29, 2021 |
Debt Instrument [Line Items] | ||||||
Maximum dividends payments | $ 1,030 | $ 1,030 | ||||
Dividends per common share declared | $ 3.28 | |||||
Dividends to equity holders | $ 1,000 | $ 1,200 | $ 115,800 | |||
Term Loan Facility | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | $ 425,000 | |||||
Dividends to equity holders | $ 160,000 | 160,000 | ||||
Term Loan Facility | New Outerwall | ||||||
Debt Instrument [Line Items] | ||||||
Equity interests | 100.00% | |||||
New Outerwall | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | $ 25,000 | |||||
New Outerwall | Term Loan Facility | ||||||
Debt Instrument [Line Items] | ||||||
Aggregate principal amount | $ 25,000 |
Debt - Interest Rates and Fee_2
Debt - Interest Rates and Fees (Details) | Jan. 29, 2021 | Dec. 29, 2020 | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Senior Facilities | |||||
Debt Instrument [Line Items] | |||||
Commitment fee (as a percent) | 0.50% | 0.50% | |||
Borrowing interest rate | 9.25% | 8.25% | 9.05% | ||
ABR Borrowings | |||||
Debt Instrument [Line Items] | |||||
Borrowing interest rate | 6.25% | 6.25% | |||
Eurocurrency Borrowings | |||||
Debt Instrument [Line Items] | |||||
Borrowing interest rate | 7.25% | 7.25% | |||
Union Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Commitment fee (as a percent) | 0.50% | 0.50% | |||
Borrowing interest rate | 4.25% | 4.25% | |||
Federal funds rate | Senior Facilities | |||||
Debt Instrument [Line Items] | |||||
Spread on variable rate | 0.50% | 0.50% | |||
Federal funds rate | Alternate base rate loans | |||||
Debt Instrument [Line Items] | |||||
Spread on variable rate | 1.00% | 1.00% | |||
LIBOR | |||||
Debt Instrument [Line Items] | |||||
Spread on variable rate | 1.00% | 1.00% | |||
LIBOR | Senior Facilities | |||||
Debt Instrument [Line Items] | |||||
Interest rate, floor | 1.00% | 1.00% | |||
LIBOR | Alternate base rate loans | |||||
Debt Instrument [Line Items] | |||||
Spread on variable rate | 1.00% | 1.00% | |||
LIBOR | LIBOR loans | |||||
Debt Instrument [Line Items] | |||||
Commitment fee (as a percent) | 0.50% | 0.50% |
Debt - Amortization and Prepa_2
Debt - Amortization and Prepayments (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Required minimum principal amortization payments | |||
Total | $ 367,566 | $ 314,113 | $ 318,750 |
Senior Facilities | |||
Required minimum principal amortization payments | |||
2023 | 330,749 | 281,563 | |
Total | $ 330,749 | $ 281,563 |
Debt - Collateral and Guarant_2
Debt - Collateral and Guarantors (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Debt | ||
Capital stock of the first-tier foreign subsidiaries pledged (as a percent) | 65.00% | 65.00% |
Debt - Letters of Credit (Det_2
Debt - Letters of Credit (Details) - Standby Letters of Credit - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 3.4 | $ 3.4 | $ 3.4 |
Term of debt | 1 year | 1 year | 1 year |
Cash-collateralized (as a percent) | 105.00% | 105.00% | 105.00% |
Cash-collateralized through restricted cash balance | $ 3.5 | $ 3.5 | $ 3.5 |
Derivatives - Narratives (Det_2
Derivatives - Narratives (Details) - USD ($) $ in Millions | Oct. 22, 2018 | Sep. 30, 2021 |
Derivative [Line Items] | ||
Fixed interest rate | 3.0335% | |
Total interest rate | 10.2835 | |
Interest rate swap agreement | ||
Derivative [Line Items] | ||
Term of agreement | 3 years | 3 years |
Fixed notional amount | $ 200 | $ 200 |
Fixed interest rate | 3.0335% | |
Total interest rate | 10.2835 |
Derivatives - Balance sheet loc
Derivatives - Balance sheet location (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Other Liabilities | Interest rate swap agreement | Derivatives not designated as hedging instrument | |||
Derivative [Line Items] | |||
Interest rate swap contract | $ 461 | $ 4,782 | $ 5,253 |
Derivatives - Consolidated Stat
Derivatives - Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Interest rate swap agreement | Derivatives not designated as hedging instrument | |||||
Derivative [Line Items] | |||||
Other expense, net | $ (899) | $ 4,324 | $ 4,341 | $ 3,946 | $ 3,012 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Employee Benefit Plan | |||
Employer matching contribution on 3% participating employees' contributions | 100.00% | ||
Percentage of employees' gross pay for which the employer contributes a 100% matching contribution to a defined contribution plan. | 3.00% | ||
Employer matching contribution on 2% participating employees' contributions | 50.00% | ||
Percentage of participating employees' contributions for 50% employer matching contribution | 2.00% | ||
Employer matching contribution | $ 2 | $ 2.1 | $ 1.8 |
Segment Information and Geogr_9
Segment Information and Geographic Data (Details) | 6 Months Ended | 9 Months Ended | 12 Months Ended |
Jun. 30, 2021item | Sep. 30, 2021segmentitem | Dec. 31, 2020segmentitem | |
Segment Information and Geographic Data | |||
Number of operating segments | segment | 2 | 2 | |
Number of self-service kiosks where consumers can rent or purchase new-release DVDs and Blu-ray DiscsTM | 40,000 | 40,000 | |
Number of linear channels | 100 | 95 |
Segment Information and Geog_10
Segment Information and Geographic Data - Summarized financial information by segment (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||||
Net revenue | $ 216,372 | $ 465,208 | $ 546,191 | $ 858,370 | $ 1,087,783 |
Adjusted EBITDA | (6,683) | 109,775 | 113,776 | 195,649 | 292,046 |
Legacy Business | |||||
Segment Reporting Information [Line Items] | |||||
Net revenue | 192,025 | 433,215 | 506,437 | 838,627 | 1,077,731 |
Adjusted EBITDA | (8,940) | 106,133 | 109,074 | 197,887 | 289,765 |
Digital Business | |||||
Segment Reporting Information [Line Items] | |||||
Net revenue | 24,347 | 31,993 | 39,754 | 19,743 | 10,052 |
Adjusted EBITDA | $ 2,257 | $ 3,642 | $ 4,702 | $ (2,238) | $ 2,281 |
Segment Information and Geog_11
Segment Information and Geographic Data - Reconciliation of Adjusted EBITDA to (loss) income before income (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Information and Geographic Data | |||||
(Loss) income before income taxes | $ (123,841) | $ (52,612) | $ (94,707) | $ (14,823) | $ 80,908 |
Depreciation and amortization | 81,317 | 108,316 | 136,838 | 138,274 | 133,493 |
Interest and other expense, net | 32,522 | 44,578 | 45,155 | ||
Business optimization(a) | 5,605 | 15,142 | 19,011 | 7,687 | 1,227 |
One-time non-recurring(b) | 2,737 | 5,934 | 10,600 | 5,482 | 13,229 |
New business start-up costs(c) | 1,004 | 4,821 | 6,041 | 3,793 | 10,060 |
Restructuring related(d) | 1,808 | 3,326 | 3,471 | 4,432 | 625 |
Discontinuation of games business(e) | 6,226 | 7,349 | |||
Adjusted EBITDA | $ (6,683) | $ 109,775 | $ 113,776 | $ 195,649 | $ 292,046 |
Segment Information and Geog_12
Segment Information and Geographic Data - Business optimization costs (Details) - USD ($) $ in Millions | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Information and Geographic Data | ||||||
Retention costs | $ 3.2 | $ 10.7 | $ 13.9 | $ 3 | ||
IT costs | $ 2.2 | $ 4.4 | $ 4.8 | $ 3.8 |
Earnings Per Share (Details)_2
Earnings Per Share (Details) - shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings Per Share | ||||
Potentially dilutive securities not included in the computation of diluted EPS because their effect would have been anti-dilutive. | 264,513 | 261,342 | 325,000 | 376,000 |
Earnings Per Share - Calculat_2
Earnings Per Share - Calculation of EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Basic EPS | |||||
Net (loss) income attributable to shareholders | $ (92,938) | $ (39,135) | $ (69,503) | $ (7,567) | $ 61,453 |
Basic weighted average shares outstanding | 30,839,870 | 27,870,539 | 27,906,742 | 27,779,339 | 27,623,415 |
Basic net income per share | $ (3.01) | $ (1.40) | $ (2.49) | $ (0.27) | $ 2.22 |
Diluted EPS | |||||
Net (loss) income attributable to shareholders | $ (69,503) | $ (7,567) | $ 61,453 | ||
Basic weighted average shares outstanding | 30,839,870 | 27,870,539 | 27,906,742 | 27,779,339 | 27,623,415 |
Dilutive effect of restricted stock units | 573,993 | ||||
Weighted average shares outstanding for diluted earnings (loss) per share | 30,839,870 | 27,870,539 | 27,906,742 | 27,779,339 | 28,197,409 |
Diluted net income per share | $ (3.01) | $ (1.40) | $ (2.49) | $ (0.27) | $ 2.18 |
Commitments and Contingencies_8
Commitments and Contingencies (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Commitments and Contingencies | |||||
Rent expense, net of sublease income | $ 1.9 | $ 1.8 | $ 2.5 | $ 2.6 | $ 2.4 |
Commitments and Contingencies_9
Commitments and Contingencies - Assets held under capital leases are included in Property and equipment, net on the Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | |||
Gross property and equipment | $ 301,811 | $ 292,874 | $ 277,555 |
Accumulated depreciation | (256,600) | (229,785) | (167,672) |
Property and equipment, net | 45,211 | 63,089 | 109,883 |
Assets held under capital leases | |||
Property, Plant and Equipment [Line Items] | |||
Gross property and equipment | 10,436 | 10,677 | 11,813 |
Accumulated depreciation | (6,981) | (5,204) | (3,529) |
Property and equipment, net | $ 3,455 | $ 5,473 | $ 8,284 |
Commitments and Contingencie_10
Commitments and Contingencies - Company's future minimum lease payments under contractual lease obligations (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Future minimum lease payments under contractual lease obligations capital leases | |
2021 | $ 2,836 |
2022 | 1,895 |
2023 | 470 |
2024 | 27 |
Total minimum lease commitments | 5,228 |
Less: Current portion of capital lease obligations | (2,836) |
Long-term portion of capital lease obligations | 2,392 |
Future minimum lease payments under contractual lease obligations operating leases | |
2021 | 2,591 |
2022 | 1,994 |
2023 | 1,614 |
2024 | 923 |
2025 & Thereafter | 546 |
Total minimum lease commitments | $ 7,668 |
Commitments and Contingencie_11
Commitments and Contingencies - Total estimated movie content commitments (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Minimum estimated movie content commitments | ||
2021 | $ 7,979 | $ 38,319 |
2022 | 20,735 | 21,469 |
Contractual Obligation, Total | $ 28,714 | $ 59,788 |
Commitments and Contingencie_12
Commitments and Contingencies - Class action settlement specific to credit card fees (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Commitments and Contingencies | |
Amount received in settlement specific to credit card fees | $ 7 |
Income Taxes - Components of (l
Income Taxes - Components of (loss) income before income taxes (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax | |||||
(Loss) income before income taxes | $ (123,841) | $ (52,612) | $ (94,707) | $ (14,823) | $ 80,908 |
Income Taxes - Components of in
Income Taxes - Components of income tax (benefit) expense (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Current: | |||||
U.S. Federal | $ (491) | $ 11,653 | $ 27,741 | ||
State and local | 711 | 4,209 | 7,955 | ||
Total current | 220 | 15,862 | 35,696 | ||
Deferred: | |||||
U.S. Federal | (21,489) | (19,467) | (14,496) | ||
State and local | (3,935) | (3,651) | (1,745) | ||
Total deferred | $ (30,974) | $ (23,895) | (25,424) | (23,118) | (16,241) |
Income tax provision | $ (30,903) | $ (13,477) | $ (25,204) | $ (7,256) | $ 19,455 |
Income Taxes - Rate Reconciliat
Income Taxes - Rate Reconciliation (Details) | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income tax expense differs from the amount that would result by applying the U.S. statutory rate to income before income taxes | |||||
U.S Federal tax expense at statutory rates | 21.00% | 21.00% | 21.00% | ||
State income taxes, net of federal benefit | 3.80% | 8.70% | 4.60% | ||
Valuation allowance | (0.20%) | (6.80%) | 0.10% | ||
Federal research & development credit | 2.00% | 7.40% | 0.70% | ||
Uncertain tax benefit on federal research and development credit | (0.50%) | (3.70%) | 0.60% | ||
Release of uncertain tax benefits | 0.20% | 22.10% | (2.20%) | ||
Other | 0.40% | 0.20% | 0.70% | ||
Income tax provision | 25.00% | 25.60% | 26.60% | 48.90% | 24.00% |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Changes in the balance of unrecognized tax benefits | |||
Balance, beginning of the period | $ 1,935 | $ 4,558 | $ 5,894 |
Additions based on tax positions related to the current year | 250 | 150 | 150 |
Additions for tax positions related to prior years | 215 | 509 | 321 |
Deductions for tax positions related to prior years | (187) | (1,945) | (1,807) |
Deductions for tax positions effectively settled | (1,337) | ||
Balance, end of period | 2,213 | 1,935 | 4,558 |
Interest related to unrecognized tax benefits | 0 | 300 | 300 |
Unrecognized tax benefits would favorably impact the effective tax rate if recognized | $ 2,200 | $ 1,900 | $ 4,600 |
Income Taxes - Deferred Income
Income Taxes - Deferred Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Credit carryforwards | $ 1,117 | $ 1,124 |
Accrued liabilities and allowances | 1,388 | 614 |
Compensation accruals | 2,750 | 2,966 |
Asset retirement obligation liability | 1,994 | 2,257 |
Deferred revenue | 2,237 | 2,682 |
Hedge liability | 1,200 | 1,315 |
Other | 253 | 46 |
Gross deferred tax assets | 10,939 | 11,004 |
Less: Valuation Allowance | (1,039) | (851) |
Deferred tax asset, net of allowance | 9,900 | 10,153 |
Deferred tax liabilities: | ||
Property and equipment | (14,172) | (23,250) |
Product costs | (3,905) | (7,107) |
Prepaid expenses | (284) | (241) |
Intangible assets | (30,965) | (44,819) |
Goodwill | (1,745) | (1,331) |
Total deferred tax liabilities | (51,071) | (76,748) |
Net deferred tax liabilities | $ 41,171 | $ 66,595 |
Income Taxes - Change in Valuat
Income Taxes - Change in Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax | ||
Non-cash charge to income tax provision | $ 200 | |
Valuation allowance balance | $ 1,039 | $ 851 |
Income Taxes - State Tax Credit
Income Taxes - State Tax Credits and Expiration Periods (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Tax Credit Carryforward [Line Items] | ||
Total U.S. state tax credits | $ 1,117 | $ 1,124 |
Illinois | ||
Tax Credit Carryforward [Line Items] | ||
Total U.S. state tax credits | $ 1,117 |
Related-Party Transactions - _2
Related-Party Transactions - Summary of Related Parties (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Related Party Transactions | |||
Due from related party | $ 162 | $ 73 | $ 2,712 |
Due to related parties, net | $ 357 | $ 449 | $ 1,477 |
Related-Party Transactions - _3
Related-Party Transactions - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Jan. 29, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Related-Party Transactions | ||||
Accrued and other current liabilities | $ 0 | $ 15.8 | $ 15.8 | |
Term B-2 Loan | ||||
Related-Party Transactions | ||||
Aggregate principal amount | $ 25 | |||
Subsequent event | Term B-2 Loan | ||||
Related-Party Transactions | ||||
Aggregate principal amount | $ 25 |
Additional Supplemental Cash _8
Additional Supplemental Cash Flow Financial Information (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Additional Supplemental Cash Flow Financial Information | ||||||
Cash and cash equivalents | $ 9,798 | $ 5,401 | $ 3,852 | |||
Restricted cash | 3,360 | 3,526 | 3,526 | |||
Cash, cash equivalents and restricted cash | $ 13,158 | $ 8,927 | $ 5,448 | $ 7,378 | $ 10,446 | $ 9,183 |
Additional Supplemental Cash _9
Additional Supplemental Cash Flow Financial Information - Cash Interest and Taxes (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Additional Supplemental Cash Flow Financial Information | ||||
Cash paid during the period for interest | $ 20,853 | $ 29,061 | $ 36,659 | |
Cash paid during the period for income taxes, net | $ 622 | $ 2,726 | $ 2,993 | $ 20,907 |
Additional Supplemental Cash_10
Additional Supplemental Cash Flow Financial Information - Non Cash Transactions (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Additional Supplemental Cash Flow Financial Information | ||||
Purchases of property and equipment financed by capital lease obligations | $ 28 | $ 130 | $ 338 | $ 6,051 |
Purchases of property and equipment included in ending trade payables or accrued and other current liabilities | $ 197 | $ 653 | $ 224 |
Subsequent Events (Details)_2_3
Subsequent Events (Details) $ in Thousands | May 16, 2021USD ($) | Jan. 29, 2021USD ($) | Jan. 15, 2021 | Jan. 15, 2020 | Dec. 31, 2020USD ($) | Sep. 30, 2021USD ($) | Jun. 29, 2021USD ($) | Dec. 31, 2019USD ($) |
Subsequent Events | ||||||||
Accrued and other current liabilities | $ 15,800 | $ 0 | $ 15,800 | |||||
Additional paid-in-capital | $ 223,085 | $ 239,722 | $ 223,084 | |||||
LIBOR | ||||||||
Subsequent Events | ||||||||
Variable rate per annum | 1.00% | 1.00% | ||||||
Term B-2 Loan | ||||||||
Subsequent Events | ||||||||
Aggregate principal amount | $ 25,000 | |||||||
Sony Pictures Home Entertainment | ||||||||
Subsequent Events | ||||||||
Term of license agreement | 2 years | 2 years | ||||||
Subsequent event | Term B-2 Loan | ||||||||
Subsequent Events | ||||||||
Aggregate principal amount | $ 25,000 | |||||||
Subsequent event | Cash Interest on Senior Facilities and Term B-2 loan | LIBOR | ||||||||
Subsequent Events | ||||||||
Variable rate per annum | 7.25% | |||||||
Subsequent event | Paid In Kind Interest on Senior Facilities and Term B-2 loan | LIBOR | ||||||||
Subsequent Events | ||||||||
Variable rate per annum | 8.25% | |||||||
Subsequent event | Fifth Amendment | ||||||||
Subsequent Events | ||||||||
Cash proceeds from merger used to pay down | $ 15,000 | |||||||
Minimum cash proceeds from merger | $ 35,000 | |||||||
Product of multiples with Excess Cash Proceeds | 0.60 | |||||||
Subsequent event | New Outerwall, Inc. | ||||||||
Subsequent Events | ||||||||
Indirect ownership interest | 100.00% | |||||||
Accrued and other current liabilities | $ 15,800 | |||||||
Additional paid-in-capital | $ 15,800 | |||||||
Subsequent event | New Outerwall, Inc. | Term B-2 Loan | ||||||||
Subsequent Events | ||||||||
Aggregate principal amount | $ 25,000 |