Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2022shares | |
Document Information [Line Items] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Mar. 31, 2022 |
Current Fiscal Year End Date | --12-31 |
Document Transition Report | false |
Entity File Number | 001-39741 |
Entity Registrant Name | Redbox Entertainment Inc. |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 85-2157010 |
Entity Address, Address Line One | 1 Tower Lane |
Entity Address, Address Line Two | Suite 800 |
Entity Address, City or Town | Oakbrook Terrace |
Entity Address, State or Province | IL |
Entity Address, Postal Zip Code | 60181 |
City Area Code | 630 |
Local Phone Number | 756-8000 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Shell Company | false |
Entity Central Index Key | 0001820201 |
Amendment Flag | false |
Document Fiscal Year Focus | 2022 |
Document Fiscal Period Focus | Q1 |
Class A Common Stock | |
Document Information [Line Items] | |
Title of 12(b) Security | Class A common stock, $0.0001 Par Value per Share |
Trading Symbol | RDBX |
Security Exchange Name | NASDAQ |
Entity Common Stock, Shares Outstanding | 12,618,516 |
Class B Common Stock | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 32,770,000 |
Warrants to purchase Class A common stock | |
Document Information [Line Items] | |
Title of 12(b) Security | Warrants to purchase Class A common stock |
Trading Symbol | RDBXW |
Security Exchange Name | NASDAQ |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash, cash equivalents and restricted cash | $ 13,658 | $ 18,478 |
Accounts receivable, net of allowances of $202 at March 31, 2022 and $259 at December 31, 2021 | 14,109 | 10,856 |
Due from related parties, net (Note 15) | 4,370 | 3,813 |
Content library | 23,214 | 25,201 |
Prepaid expenses and other current assets | 6,662 | 6,667 |
Total current assets | 62,013 | 65,015 |
Property and equipment, net (note 2) | 36,743 | 40,624 |
Goodwill (Note 4) | 147,523 | 147,523 |
Intangible assets, net (Note 4) | 106,349 | 124,207 |
Operating lease right-of-use assets (Note 4) | 8,274 | |
Other long-term assets | 612 | 663 |
Total assets | 361,514 | 378,032 |
Current Liabilities: | ||
Trade payables | 38,704 | 32,266 |
Due to related parties, net (Note 15) | 74 | 74 |
Operating lease liabilities, current portion (Note 4) | 2,958 | |
Accrued and other current liabilities (Note 5) | 58,566 | 57,755 |
Current portion of long-term debt (Note 6) | 41,539 | 34,211 |
Total current liabilities | 141,841 | 124,306 |
Long-term debt, net (Note 6) | 301,371 | 287,355 |
Warrant liability (Note 11) | 4,056 | 17,821 |
Operating lease liabilities, non-current portion (Note 4) | 5,599 | |
Other long-term liabilities | 10,664 | 11,501 |
Total liabilities | 463,531 | 440,983 |
Commitments and contingencies (Note 13) | ||
Shareholders' Equity | ||
Additional paid-in-capital | 302,958 | 302,455 |
Non-controlling interest | (70,581) | (32,456) |
Accumulated deficit | (334,398) | (332,954) |
Total equity | (102,017) | (62,951) |
Total liabilities and shareholders' equity | 361,514 | 378,032 |
Class A Common Stock | ||
Shareholders' Equity | ||
Common stock | 1 | 1 |
Class B Common Stock | ||
Shareholders' Equity | ||
Common stock | $ 3 | $ 3 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Accounts receivable, allowance for doubtful accounts | $ 202 | $ 259 |
Class A Common Stock | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
Common Stock, Shares, Issued | 12,618,516 | 12,618,516 |
Common Stock, Shares, Outstanding | 12,618,516 | 12,618,516 |
Class B Common Stock | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares, Issued | 32,770,000 | 32,770,000 |
Common Stock, Shares, Outstanding | 32,770,000 | 32,770,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Net revenue | $ 63,227 | $ 76,730 |
Revenue from Contract with Customer, Product and Service [Extensible Enumeration] | us-gaap:EntertainmentMember | us-gaap:EntertainmentMember |
Operating expenses: | ||
Product cost | $ 27,290 | $ 28,248 |
Direct operating | 30,005 | 33,024 |
Marketing | 4,022 | 3,284 |
Stock-based compensation expense | 1,808 | 566 |
General and administrative | 23,203 | 13,309 |
Depreciation and amortization | 25,090 | 27,526 |
Total operating expenses | 111,418 | 105,957 |
Operating loss | (48,191) | (29,227) |
Interest and other income (expense), net: | ||
Interest and other income (expense), net | 7,343 | (7,247) |
Total interest and other income (expense), net | 7,343 | (7,247) |
Loss before income taxes | (40,848) | (36,474) |
Income tax expense (benefit) | 26 | (9,279) |
Net loss | (40,874) | $ (27,195) |
Net loss attributable to non-controlling interest | (39,430) | |
Net loss attributable to Class A common stockholders | $ (1,444) | |
Loss per share of Class A common stock: | ||
Basic loss per share (Note 9) | $ (0.11) | |
Diluted loss per share (Note 9) | $ (0.11) | |
Weighted average shares of Class A common stock outstanding: | ||
Basic | 12,618,516 | |
Diluted | 12,618,516 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating activities: | ||
Net loss | $ (40,874) | $ (27,195) |
Adjustments to reconcile net loss to net cash flows used in operating activities: | ||
Depreciation | 7,363 | 9,791 |
Amortization of intangible assets | 17,857 | 17,858 |
Gain on sale/disposal of assets | (132) | (123) |
Stock-based compensation expense | 1,808 | 566 |
Deferred income taxes | (6,303) | |
Amortization of deferred financing costs | 410 | (831) |
PIK interest added to Senior Facilities | 7,328 | |
Change in fair value of warrant liability | (13,765) | |
Non-cash rent, interest and other | (2) | 7,060 |
Cash flows from changes in net operating assets and liabilities: | ||
Accounts receivable | (3,242) | (2,463) |
Content library | 1,977 | 398 |
Income tax receivable | (3,130) | |
Prepaid expenses and other current assets | 5 | 227 |
Other assets | 50 | 217 |
Trade payables | 5,998 | (7,179) |
Change in due to/from related parties | (557) | 2,626 |
Accrued and other liabilities | 953 | (5,629) |
Net cash flows used in operating activities | (14,823) | (14,110) |
Investing Activities: | ||
Purchases of property and equipment | (3,003) | (3,631) |
Proceeds from disposition of property and equipment | 171 | 113 |
Net cash flows used in investing activities | (2,832) | (3,518) |
Financing Activities: | ||
Proceeds from Redbox's borrowings | 14,103 | 26,750 |
Repayments of Redbox's debt obligations | (497) | |
Dividends paid | (90) | |
Principal payments on finance lease obligations | (771) | (817) |
Net cash flows provided by financing activities | 12,835 | 25,843 |
Change in cash, cash equivalents and restricted cash | (4,820) | 8,215 |
Cash, cash equivalents and restricted cash: | ||
Beginning of period | 18,478 | 8,927 |
End of period | $ 13,658 | $ 17,142 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT) - USD ($) $ in Thousands | Class A Common StockCommon Stock | Class A Common Stock | Class B Common StockCommon Stock | Class B Common Stock | Common Units | Additional Paid-in Capital | Accumulated Deficit | Non-controlling Interest | Total |
Balance at the beginning at Dec. 31, 2020 | $ 3 | $ 223,085 | $ (221,626) | $ 1,462 | |||||
Balance at beginning (in shares) at Dec. 31, 2020 | 27,799,748 | ||||||||
Share-based compensation plans and related activity | 566 | 566 | |||||||
Share-based compensation plans and related activity (in shares) | 3,193,549 | ||||||||
Net loss | (27,195) | (27,195) | |||||||
Balance at the end at Mar. 31, 2021 | $ 3 | 223,651 | (248,821) | (25,167) | |||||
Balance at the end (in shares) at Mar. 31, 2021 | 30,993,297 | ||||||||
Balance at the beginning at Dec. 31, 2021 | $ 1 | $ 3 | 302,455 | (332,954) | $ (32,456) | (62,951) | |||
Balance at beginning (in shares) at Dec. 31, 2021 | 12,618,516 | 12,618,516 | 32,770,000 | 32,770,000 | |||||
Share-based compensation plans and related activity | 503 | 1,305 | 1,808 | ||||||
Net loss | (1,444) | (39,430) | (40,874) | ||||||
Balance at the end at Mar. 31, 2022 | $ 1 | $ 3 | $ 302,958 | $ (334,398) | $ (70,581) | $ (102,017) | |||
Balance at the end (in shares) at Mar. 31, 2022 | 12,618,516 | 12,618,516 | 32,770,000 | 32,770,000 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
Basis of presentation. | |
Basis of Presentation | Note 1: Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared under accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”) and in conformity with rules applicable to quarterly financial information. The Condensed Consolidated Financial Statements as of March 31, 2022 and for the three months ended March 31, 2022 and 2021 are unaudited. All adjustments, consisting of normal recurring adjustments, except as otherwise noted, considered necessary for a fair presentation of the unaudited interim Condensed Consolidated Financial Statements for these interim periods have been included. Readers of this unaudited interim Condensed Consolidated quarterly financial information should refer to the audited Consolidated Financial Statements and notes thereto of Redbox Entertainment Inc. and its subsidiaries (“Redbox,” the “Company,” “we,” “our” and “us”) for the year ended December 31, 2021 included in our 2021 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) and also available on our website (www.redbox.com ). Certain footnote disclosures that would substantially duplicate those contained in such audited financial statements or which are not required by the rules and regulations of the SEC for interim financial reporting have been condensed or omitted. Refer to Note 1 of the Notes to Consolidated Financial Statements in the Company’s 2021 Annual Report on Form 10-K for further discussion of the Company’s accounting policies and estimates. Such Annual Report also contains a discussion of the Company’s critical accounting policies and estimates. Business Update, Going Concern and Strategic Alternatives Historically, rentals have been correlated with the number and quality of new theatrical titles released in a quarter. During 2021 and for the first three months of 2022, Redbox’s business was negatively impacted by the effects of the ongoing COVID-19 pandemic, which resulted in fewer than expected theatrical releases. In addition, the significant increase in impacts from the Omicron variant caused further disruption to the business. As such, Redbox rentals have not recovered to the extent expected and, notwithstanding the year-over-year increase in new theatrical releases, were lower than pre-COVID-19 levels. As part of an effort to expand its business and transform into a multi-faceted entertainment company, during the fourth quarter of 2021 and into the first three months of 2022, Redbox increased its marketing and on-demand expenditures. Costs also increased as Redbox purchased more content, which were not offset by an increase in revenues. Redbox has been exploring a number of potential strategic alternatives with respect to the Company’s corporate or capital structure and seeking financing to fund operations and one-time restructuring costs. In March 2022, the Company’s Board of Directors established a Strategic Review Committee to, among other things, consider and oversee strategic alternatives or transactions that may be available to the Company with respect to its corporate or capital structure. Redbox is also executing on a previously announced series of restructuring actions and initiatives to improve its efficiency and reduce its cost structure, including, but not limited to, (i) optimizing its kiosk network and (ii) executing a workforce reduction across its supply chain and corporate teams. However, the risks and uncertainties related to the ongoing adverse effects of the COVID-19 pandemic on the Company’s operating results, together with the Company’s recurring operating losses, accumulated deficit and negative working capital, raise substantial doubt about our ability to continue as a going concern, after consideration of the strategic initiatives outlined below, within one year after the date that the condensed consolidated interim financial statements are issued. The accompanying consolidated financial statements and notes have been prepared assuming the Company will continue as a going concern. For the three months ended March 31, 2022, the Company generated negative cash flows from operations of On March 29, 2022, the Company completed a reduction in force of 150 employees. One-time restructuring charges of million were incurred, the substantial amount of which related to severance. The Company estimates that the workforce reduction will decrease its annual operating costs by approximately On April 15, 2022 certain subsidiaries of the Company entered into the Incremental Assumption and Amendment Agreement No. 6, amending its Credit Agreement (the “Sixth Amendment”), pursuant to which the Sixth Amendment Incremental Revolving Lenders (as defined in the Sixth Amendment) agreed to make available to certain subsidiaries of the Company Sixth Amendment Incremental Revolving Commitments (as defined in the Credit Agreement) in an aggregate amount equal to $50.0 million (subsequently restricted to $45.0 million, as discussed in further detail in Note 17: Subsequent Events . The details of the Sixth Amendment and its terms and conditions are discussed in further detail below in Note 6: Debt As a further condition of the Sixth Amendment, the Company issued to HPS Investment Partners, LLC (the administrative agent and collateral agent to the Credit Agreement) and certain affiliates (as defined in the Credit Agreement) warrants, with an exercise price of $0.0001 per share (the “HPS Warrants”), to purchase 11,416,700 shares of Class A common stock of the Company (“Common Stock”) in the event certain milestones were not met under the Amended Credit Agreement. Upon signing of the Merger Agreement (as defined below), the HPS Warrants became void and all rights of the warrant holders thereunder to exercise the HPS Warrants ceased. In connection with the Sixth Amendment, on April 15, 2022, the Company entered into a Voting and Support Agreement with AP VIII Aspen Holdings, L.P. (“Aspen”), Seaport Global SPAC, LLC and Redwood Holdco, LP (“Redwood”), (collectively the “Stockholders”), whereby the Stockholders agreed to vote their shares of the Company (i) in favor of any strategic transaction approved and recommended by the Company’s Board of Directors (the “Board”), or any committee to which the Board delegates authority, subject to certain terms and conditions (each, a “Transaction”), (ii) in opposition to any transaction involving the Company that has not been approved and recommend by the Board, and (iii) in favor of any directors that are proposed or nominated to the Board by the Company at any annual meeting of the Company. The Company further agreed, pursuant to the Voting and Support Agreement, to (i) permanently reduce a portion of the Union Revolving Credit Facility in an amount equal to $10.6 million (and the Company made such reduction) and (ii) among other agreements, refrain from borrowing under the Union Revolving Credit Facility without the consent of Aspen and Redwood Holdco, LP (other than with respect to certain scheduled borrowings and borrowings to cover interest, fees and expenses). In connection with the execution of the Sixth Amendment, the Company also implemented certain changes to the composition and size of its Board of Directors as further described in the Company’s Current Report on Form 8-K filed with the SEC on April 19, 2022. The Strategic Review Committee of the Board was also dissolved in connection with these changes. In connection with the Company’s entry into the Voting and Support Agreement, Redwood permanently waived the “Early Termination Payment” by the Company (or an affiliate) to Redwood that could have resulted from a provision in that certain Tax Receivable Agreement dated as of October 22, 2021 (“TRA”), which would have been triggered upon the change to the Board’s composition. Additionally, under the Voting and Support Agreement, the Company and Redwood agreed, in connection with the consummation of a Transaction, to (a) terminate the TRA upon the consummation of a Transaction and (b) waive all claims under the TRA with such waiver being effective upon the consummation of such Transaction. On May 10, 2022, the Company entered into a merger agreement with Chicken Soup for the Soul Entertainment (“CSSE”), pursuant to which, the Company will become a wholly owned subsidiary of CSSE (the “Merger Agreement”). As a result, additional borrowings under the Sixth Amendment Incremental Revolving Facility became available upon the Company’s entry into the merger agreement with CSSE provided, that the Company, under the Sixth Amendment Incremental Revolving Facility, restricts its borrowings to $45.0 million. See Note 17: Subsequent Events and the Company’s Current Report on Form 8-K filed with the SEC on May 11, 2022 for additional information regarding the CSSE merger. Our unaudited condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern. If the Company is unable to implement one or more of the contemplated strategic alternatives, an event of default will occur under the Credit Agreement, and the Company could continue to experience adverse pressures on its relationships with counterparties who are critical to its business, its ability to access the capital markets, its ability to execute on its operational and strategic goals and its business, prospects, results of operations and liquidity generally. There can be no assurance as to when or whether the implementation of one or more of the Company’s strategic initiatives will be successful, or as to the effects the failure to take action may have on the Company’s business, its ability to achieve its operational and strategic goals or its ability to finance its business or refinance its indebtedness. A failure to address these matters, will have a material adverse effect on the Company’s business, prospects, results of operations, liquidity and financial condition, and its ability to service or refinance its corporate debt as it becomes due. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2022 | |
Property and Equipment | |
Property and Equipment | Note 2: Property and Equipment March 31, December 31, Dollars in thousands 2022 2021 Kiosks and components $ 190,661 $ 190,496 Computers, servers, and software 101,912 99,123 Leasehold improvements 4,152 4,129 Office furniture and equipment 676 676 Leased Vehicles 11,178 11,380 Property and equipment, at cost $ 308,579 $ 305,804 Accumulated depreciation (271,836) (265,180) Property and equipment, net $ 36,743 $ 40,624 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | 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 first quarter of 2022, the Company completed a quantitative impairment analysis for goodwill related to its Legacy and Digital reporting units due to its financial performance impairment charge was recorded. 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 at Redbox 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, 2021 $ 144,014 $ 3,509 $ 147,523 Balance as of March 31, 2022 $ 144,014 $ 3,509 $ 147,523 The following table summarizes the carrying amounts and accumulated amortization of intangible assets: March 31, 2022 December 31, 2021 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 $ (291,301) $ 78,699 $ 370,000 $ (278,087) $ 91,913 Trade name 7 years 60,000 (47,238) 12,762 60,000 (45,095) 14,905 Contactable customer list 7 years 40,000 (31,492) 8,508 40,000 (30,063) 9,937 Developed technology 7 years 30,000 (23,620) 6,380 30,000 (22,548) 7,452 Total intangible assets subject to amortization $ 500,000 $ (393,651) $ 106,349 $ 500,000 $ (375,793) $ 124,207 The Company recognized amortization expense of $17.9 million for each of the three months ended March 31, 2022 and 2021. There was no impairment of goodwill and other intangible assets for the three months ended March 31, 2022 and 2021. 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. |
Accrued and Other Current Liabi
Accrued and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2022 | |
Accrued and Other Current Liabilities | |
Accrued and Other Current Liabilities | Note 5: Accrued and Other Current Liabilities Accrued and other current liabilities as of March 31, 2022 and December 31, 2021, consisted of the following: March 31, December 31, Dollars in thousands 2022 2021 Accrued payroll and other related expenses $ 24,900 $ 23,901 Accrued revenue share 9,338 11,786 Deferred revenue 9,401 9,553 Income taxes payable 183 — Other 14,744 12,515 Total accrued and other current liabilities $ 58,566 $ 57,755 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt | |
Debt | Note 6: Debt March 31, December 31, Dollars in thousands 2022 2021 Term B Facility $ 271,562 $ 271,562 Paid-In-Kind Interest related to Term Loan Facility 38,394 31,480 Revolving Credit Facility 29,104 15,000 Paid-In-Kind Interest related to Revolving Credit Facility 3,145 2,731 Union Revolving Credit Facility 4,119 4,616 Total debt outstanding $ 346,324 $ 325,389 Less: Unamortized debt issuance costs (3,414) (3,823) Total debt, net $ 342,910 $ 321,566 Portion due within one year $ 41,539 $ 34,211 Total long-term debt, net $ 301,371 $ 287,355 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 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 B, 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 dividends 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, 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, the Company’s Senior Facilities matured on October 20, 2022, and subsequent to the Amendment, Second Amendment and Third Amendment consisted of: ● the Term Loan B, in an aggregate principal amount of $425.0 million; ● the Term Loan B-1, in an aggregate principal amount of $85.8 million; and ● the Revolving Credit Facility, in an aggregate principal amount of up to $30.0 million. As of March 31, 2022 there was no remaining borrowing capacity under the Revolving Credit Facility. 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 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 B and Term Loan B-1, 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., an affiliate of Apollo and therefore a related party of the Company. The proceeds from the loan were 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 per annum, in each case plus an applicable margin. The applicable margin for borrowings under the Senior Facilities is 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-2 to the Term Loan B and the Term Loan B-1. In addition, among other things, concurrently with the consummation of the Business Combination, the Company repaid 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). On April 15, 2022, RAR entered into a sixth amendment to its Credit Agreement (the “Sixth Amendment”) (capitalized terms used herein are defined in the Credit Agreement as amended through the Sixth Amendment). Pursuant to the Sixth Amendment, an additional aggregate $50.0 million in financing under the Credit Agreement have been made available to the Company subject to certain conditions, the proceeds of which will be used to make payments in accordance with the Budget Plan and pay certain fees and expenses. From April 15, 2022 until the Signing Deadline Date, borrowings under the Sixth Amendment Incremental Revolving Facility were limited to no more than $15.0 million in the aggregate. Pursuant to the Credit Agreement, additional borrowings of $35.0 million became available on May 10, 2022, as a result of the Company entrance into a merger agreement with Chicken Soup for the Soul Entertainment, Inc. (“CSSE”), pursuant to which, the Company will become a wholly owned subsidiary of CSSE. See Note 17: Subsequent Events Changes to the Credit Agreement effected by the Sixth Amendment included the following: ● Call protection on the loans was modified so that at any time prior to maturity, a make-whole payment will be payable (i) on the Sixth Amendment Incremental Revolving Loans if such loans are repaid or prepaid with a corresponding permanent commitment reduction and (ii) on the existing Term B Loans, Term B-1 Loans, and Revolving Facility Loans on the amount of such loan repaid or prepaid. The make-whole will not be payable if such loans are prepaid in full upon the consummation of the Company Sale on or prior to the Company Sale Outside Date. ● Events of Default were added including: o Failure to meet Company Sale Milestones (including failure to consummate the Company Sale by October 31, 2022 (or such later date as agreed by the Administrative Agent)). o Failure to meet cost-cutting milestones, subject to a 5 day grace period. o Termination of an Acceptable Purchase Agreement other than in connection with the replacement thereof with certain replacement purchase agreements acceptable to the Administrative Agent, subject to a 5 day grace period. o Termination or cessation of validity of Voting and Support Agreement. Union Revolving Credit Facility 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 March 31, 2022 and December 31, 2021 were $4.1 million and $4.6 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 date, (ii) the federal funds effective rate in effect on such day plus ½ of . 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 . The borrowing interest rate for the Union Revolving Credit Facility was as of March 31, 2022 and December 31, 2021, respectively. On April 15, 2022, the Company agreed, pursuant to the Voting and Support Agreement, to (i) permanently reduce a portion of the Union Revolving Credit Facility in an amount equal to $10.6 million (and the Company made such reduction) and (ii) among other agreements, refrain from borrowing under the Union Revolving Credit Facility without the consent of Aspen and Redwood Holdco, LP (other than with respect to certain scheduled borrowings and borrowings to cover interest, fees and expenses). Availability under the Union Revolving Credit Facility as of May 10, 2022 is 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. 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 March 31, 2022 and December 31, 2021, the borrowing interest rate for the Senior Facilities was 9.25%. Amortization and Prepayments Required minimum principal amortization payments under the Senior Facilities as of March 31, 2022, are as follows: Repayment Dollars in thousands Amount 2022 $ 38,394 2023 — 2024 271,562 Total $ 309,956 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. All obligations under the Union Revolving Credit Facility are guaranteed by all direct and indirect wholly owned subsidiaries of the Company’s Redbox Entertainment, LLC entity. Letters of Credit As required under the Senior Facilities, the Company has a letter of credit arrangement to provide for the issuance of standby letters of credit. The arrangement supports the collateral requirements for insurance claims and is good for one year to be renewed annually if necessary. The letter of credit is cash-collateralized at 105% in the amount of $3.1 million and $3.4 million as of March 31, 2022 and December 31, 2021, respectively. In October 2021, the Company entered into a letter of credit arrangement of $0.8 million that serves as a security deposit for leased warehouse space and is pledged by an equal amount of cash pledged as collateral. The Company’s letter of credit arrangements are classified as restricted cash and reflect balances of $3.9 million and $4.2 million as of March 31, 2022 and December 31, 2021, respectively. |
Interest Rate Derivatives
Interest Rate Derivatives | 3 Months Ended |
Mar. 31, 2022 | |
Interest Rate Derivatives | |
Interest Rate Derivatives | Note 7: Interest Rate 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 5: 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 interest rate swap agreement expired on October 31, 2021. See Note 6: Debt The following table discloses the effect of the Company’s derivative instrument on the unaudited Condensed Consolidated Statements of Operations For the three months ended March 31, Dollars in thousands 2022 2021 Interest and other income (expense), net $ — $ 1,432 |
Segment Information and Geograp
Segment Information and Geographic Data | 3 Months Ended |
Mar. 31, 2022 | |
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 38,000 self-service kiosks where consumers can rent or purchase new-release DVDs and Blu-ray Discs TM (“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. Our Legacy Business also includes corporate general and administrative expenses, which include technology and public company costs, along with corporate overhead expenses related to our Digital Business. 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 145 linear channels. Furthermore, the Company monetizes digital advertising space in Redbox emails and apps amongst other platforms, which is referred to as Media Network. The Digital Business includes expenses directly attributable to this business. 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: March 31, Dollars in thousands 2022 2021 Net revenue Legacy Business $ 48,767 $ 67,637 Digital Business 14,460 9,093 Total $ 63,227 $ 76,730 Adjusted EBITDA Legacy Business $ (15,553) $ 334 Digital Business 2,015 968 Total $ (13,538) $ 1,302 The following is a reconciliation of Adjusted EBITDA to loss before income taxes for the three months ended March 31, 2022 and 2021: Three Months Ended March 31, Dollars in thousands 2022 2021 Loss before income taxes $ (40,848) $ (36,474) Add: Depreciation and amortization 25,090 27,526 Interest and other (income) expense, net (7,343) 7,247 Business optimization (a) — 550 One-time non-recurring (b) 3,743 364 New business start-up costs (c) — 171 Restructuring related (d) 4,012 1,352 Stock-based compensation expense 1,808 566 Adjusted EBITDA $ (13,538) $ 1,302 (a) Business optimization costs include employee retention costs, IT costs as well as consulting costs for certain projects. (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. During the three months ended March 31, 2022, the Company incurred (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. During the three months ended March 31, 2022, the Company incurred severance and related costs of |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share | |
Earnings Per Share | Note 9: Earnings Per Share Basic earnings per share of Class A common stock is computed by dividing net income attributable to common stockholders by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing net income attributable to common stockholders adjusted for the assumed exchange of all potentially dilutive securities by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive elements. Basic and diluted loss per share is computed using the two-class method. The Company analyzed the calculation of earnings per share for comparative periods presented and determined that it resulted in values that would not be meaningful to the users of the consolidated financial statements. Therefore, earnings per share information has not been presented for periods prior to the Business Combination. The following table sets forth the computation of basic and diluted net loss per share of Class A common stock: Dollars in thousands, except per share amounts Three Months Ended March 31, Basic and Diluted EPS 2022 2021 Numerator: Net loss $ (40,874) $ (27,195) Less: net loss attributable to non-controlling interests (39,430) N/A Net loss attributable to Redbox Entertainment Inc. — Basic and Diluted $ (1,444) N/A Denominator: Weighted average shares of Class A common stock outstanding — Basic and Diluted 12,618,516 N/A Earnings per share of Class A common stock outstanding — Basic and Diluted $ (0.11) N/A Shares of the Company’s Class B common stock do not share in the earnings or losses, are not entitled to receive dividends, or to receive any portion of assets upon liquidation of the Company, and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been presented. As the Company was in a loss position for the three months ended March 31, 2022 and 2021, 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. The following outstanding potentially dilutive shares have been excluded from the calculation of diluted EPS because their effect would have been anti-dilutive: Three Months Ended March 31, 2022 2021 Public and private placement warrants 16,848,733 N/A |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2022 | |
Stockholders' Equity | |
Stockholders' Equity | Note 10: Stock holders’ Equity Preferred Stock outstanding Class A Common Stock outstanding Class B Common Stock -for-one basis with Redwood Intermediate common units held by such holders for Class A common stock. At March 31, 2022, there were outstanding Non-controlling Interest |
Warrant Liability
Warrant Liability | 3 Months Ended |
Mar. 31, 2022 | |
Warrant Liability | |
Warrant Liability | Note 11: Warrant Liability At March 31, 2022, there were 10,781,250 Public Warrants and 6,062,500 Private Placement Warrants outstanding. Each whole Public Warrant entitles the registered holder to purchase per share. Pursuant to the warrant agreement, a holder of Public Warrants may exercise its warrants only for a whole number of shares of Class A common stock. This means that only a whole warrant may be exercised at any given time by a warrant holder. The Public Warrants expire The Company may redeem the Public Warrants under the following conditions: ● In whole and not in part; ● At a price of $0.01 per warrant; ● Upon not less than 30 days ’ prior written notice of redemption (the “ 30-day redemption period”) to each warrant holder; and ● if, and only if, the last reported sale price of the Company’s Class A common stock equals or exceeds $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 gives proper notice of such redemption and provided certain other conditions are met. The redemption criteria discussed above prevent a redemption call unless there is at the time of the call a significant premium to the warrant exercise price. If the foregoing conditions are satisfied and the Company issues a notice of redemption of the warrants, each warrant holder will be entitled to exercise its warrant prior to the scheduled redemption date. However, the price of the Company’s Class A common stock may fall below the The Private Placement Warrants are identical to the Public Warrants, except that the Private Placement Warrants are exercisable on a cashless basis and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. As of March 31, 2022 and December 31, 2021, the Company recorded warrant liabilities of $4.1 million and $17.8 million, respectively, in the condensed consolidated balance sheets. For the three months ended March 31, 2022, the Company recognized a gain of Interest and other income (expense), net Condensed Consolidated Statements of Operations |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Measurements | |
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 March 31, 2022 due to the short maturities of such instruments. The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis at March 31, 2022 and December 31, 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value. March 31, December 31, Dollars in thousands Level 2022 2021 Liabilities: Warrant Liability – Public Warrants 1 $ 2,480 $ 11,213 Warrant Liability – Private Placement Warrants 3 1,576 6,608 Total Warrant Liability $ 4,056 $ 17,821 The Public Warrants and Private Placement Warrants are accounted for as liabilities in accordance with ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity, and are presented within Warrant liabilities on the Company’s Condensed Consolidated Balance Sheets. The warrant liabilities were measured at fair value at the closing of the Business Combination and are measured at fair value on a recurring basis, with changes in fair value presented within Interest and other income (expense), net Condensed Consolidated Statements of Operations. Measurement The Public Warrants and Private Placement Warrants are measured at fair value on a recurring basis. The measurement of the Public Warrants as of March 31, 2022 and December 31, 2021 are 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 of March 31, 2022 and December 31, 2021 are classified Level 3 due to the use of unobservable inputs. Input March 31, 2022 December 31, 2021 Risk-free interest rate 2.40 % 1.20 % Expected term (years) 4.60 4.80 Expected volatility 55.0 % 31.4 % Stock price $ 2.36 $ 7.41 As of March 31, 2022, the Public Warrants and Private Placement Warrants were determined to be $0.23 and $0.26 per warrant, respectively, for aggregate values of approximately $2.5 million and $1.6 million, respectively. As of December 31, 2021, the Public Warrants and Private Placement Warrants were determined to be $1.04 and $1.09 per warrant, respectively, for aggregate values of approximately $11.2 million and $6.6 million, respectively. The following table presents the changes in the fair value of warrant liabilities for the three months ended March 31, 2022: Private Warrant Dollars in thousands Public Placement Liabilities Valuation as of December 31, 2021 $ 11,213 $ 6,608 $ 17,821 Change in valuation inputs or other assumptions (8,733) (5,032) (13,765) Fair value as of March 31, 2022 $ 2,480 $ 1,576 $ 4,056 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. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 13: 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 $1.0 million and $1.1 million for the three months ended March 31, 2022 and March 31, 2021, respectively. The Company also leases automobiles under finance leases expiring at various dates through September, 2025. Management assesses these leases as they come due as to whether it should purchase, enter into new finance leases, or enter into operating leases. Assets held under finance leases are included in Property and equipment, net Condensed Consolidated Balance Sheets Dollars in thousands March 31, 2022 December 31, 2021 Gross property and equipment $ 11,178 $ 11,380 Accumulated depreciation (7,727) (7,285) Net property and equipment $ 3,451 $ 4,095 Content License Agreements The Company licenses minimum quantities of theatrical and direct-to-video titles under licensing agreements with certain movie content providers. Total estimated movie content commitments under the terms of the Company’s content license agreements in effect as of March 31, 2022 is presented in the following table: Dollars in thousands Total 2022 2023 Minimum estimated movie content commitments $ 49,574 $ 40,709 $ 8,865 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. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Taxes. | |
Income Taxes | Note 14: Income Taxes The Company’s effective tax rate was (0.1)% and 25.4% for the three months ended March 31, 2022 and 2021, respectively. Due to the full valuation allowance on our deferred tax assets, the tax provision for the three months ended March 31, 2022 does not reflect any material tax expense. Tax Years Open for Examination As of March 31, 2022, the years 2018 through 2021 were open under statutes of limitations for possible examination by the U.S. federal and most state tax authorities. There are currently Waiver to Tax Receivable Agreement As discussed in Note 1: Basis of Presentation , in connection with the Company’s entry into the Voting and Support Agreement, Redwood permanently waived the “Early Termination Payment” by the Company (or an affiliate) to Redwood that could have resulted from a provision in that certain Tax Receivable Agreement dated as of October 22, 2021 (“TRA”), which would have been triggered upon the change to the Board’s composition. Additionally, under the Voting and Support Agreement, the Company and Redwood agreed, in connection with the consummation of a Transaction, to (a) terminate the TRA upon the consummation of a Transaction and (b) waive all claims under the TRA with such waiver being effective upon the consummation of such Transaction. |
Related-Party Transactions
Related-Party Transactions | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions | |
Related-Party Transactions | Note 15: Related-Party Transactions The Company receives and provides certain operating support under commercial services agreements with affiliates of Apollo, primarily ecoATM. A summary of the amounts due to/from such related parties is presented below: March 31, December 31, Dollars in thousands 2022 2021 Due from related parties, net $ 4,370 $ 3,813 Due to related parties, net $ 74 $ 74 The balance in amounts due to related parties primarily includes the unpaid dividends related to employee and non-employee directors. Revenues from related parties for the three months ended March 31, 2022 and 2021 were $5.6 million and $3.8 million, respectively. |
Additional Supplemental Cash Fl
Additional Supplemental Cash Flow Financial Information | 3 Months Ended |
Mar. 31, 2022 | |
Additional Supplemental Cash Flow Financial Information | |
Additional Supplemental Cash Flow Financial Information | Note 16: Additional Supplemental Cash Flow Financial Information Cash, Cash Equivalents and Restricted Cash: March 31, December 31, Dollars in thousands 2022 2021 Cash and cash equivalents $ 9,763 $ 14,320 Restricted cash 3,895 4,158 Cash, cash equivalents and restricted cash $ 13,658 $ 18,478 Cash Interest and Taxes: Three Months Ended March 31, Dollars in thousands 2022 2021 Cash paid during the period for interest $ — $ — Cash paid during the period for income taxes, net $ 37 $ 91 Non-cash Transactions Three Months Ended March 31, Dollars in thousands 2022 2021 Purchases of property and equipment financed by finance lease obligations $ 83 $ — Right-of-use assets obtained in exchange for new operating lease liabilities $ 9,102 $ — Purchases of property and equipment included in ending trade payables or accrued and other current liabilities $ 210 $ 213 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events | |
Subsequent Events | Note 17: Subsequent Events We have evaluated subsequent events through May 13, 2022, the date on which the financial statements were issued, and based on our review did not identify any events that would have required recognition or disclosure in these condensed consolidated financial statements, except the following: Departure and Appointment of Certain Officers As previously disclosed in our Current Report on Form 8-K filed with the SEC on April 25, 2022, on April 24, 2022, Kavita Suthar notified the Company of her intention to resign from her position as Chief Financial Officer, effective as of May 16, 2022. Ms. Suthar will remain in her position as Chief Financial Officer until the date her resignation becomes effective. The Company’s Board of Directors appointed Mitchell Cohen, to serve as interim Chief Financial Officer of the Company. Mr. Cohen joined the Company on April 25, 2022, performing transitional services until he assumes the interim Chief Financial Officer position effective May 17, 2022. Merger Agreement On May 10, 2022, the Company entered into a Merger Agreement (the “Merger Agreement”) with Chicken Soup for the Soul Entertainment, Inc., a Delaware corporation (“CSSE”), RB First Merger Sub Inc., a Delaware corporation and wholly owned subsidiary of CSSE (“Merger Sub”), RB Second Merger Sub LLC, a Delaware limited liability company and wholly owned subsidiary of CSSE (“Merger Sub LLC”), Redwood Opco Merger Sub LLC, a Delaware limited liability company and direct wholly owned subsidiary of CSSE (“Opco Merger Sub LLC”) and Redwood Intermediate LLC, a Delaware limited liability company (“Opco LLC”). Pursuant to the Merger Agreement, (i) Merger Sub Inc. will merge with and into Redbox (the “First Company Merger”), with Redbox continuing as the surving entity (the “Surviving Corporation”), (ii) simultaneously with the First Company Merger, Opco Merger Sub LLC will merge with and into Opco LLC (the “Opco Merger”), with Opco LLC continuing as the surviving entity (the “Opco Surviving Company”) and (iii) immediately following the First Company Merger and Opco Merger, the Surviving Corporation will merge with and into Merger Sub LLC, with Merger Sub LLC continuing as the surviving entity (the “Second Company Merger, and together with the First Company Merger and the Opco Merger, the “Mergers”, and together with the other transactions contemplated by the Merger Agreement, the “Merger Transactions”). As a result of the Mergers, at the closing of the Merger Transactions, the Company will become a wholly owned subsidiary of CSSE. At the effective time of the First Company Merger (the “Effective Time”), each share of the Company’s Class A common stock will be cancelled and represent the right to receive per share, of CSSE (the “CSSE Class A Common Stock”), each share of the Company’s Class B common stock will be automatically cancelled for no additional consideration and each Opco LLC Unit will be converted into the right to receive a number of shares of CSSE Class A Common Stock equal to the Exchange Ratio. The closing of the Merger Agreement is subject to customary conditions, including expiration or termination of waiting periods under the HSR Act, if applicable, the approval of the Merger Agreement and the Merger Transactions by the Company’s shareholders, the listing of CSSE Class A Common Stock on Nasdaq and the registration statement on Form S-4 registering the CSSE Class A Common Stock to be issued as consideration in the Mergers becoming effective. Refer to the Company’s Current Report on Form 8-K filed with the SEC on May 11, 2022 for additional information regarding the Merger Agreement and the Merger Transactions. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Basis of presentation. | |
Basis of Presentation | The accompanying unaudited Condensed Consolidated Financial Statements have been prepared under accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”) and in conformity with rules applicable to quarterly financial information. The Condensed Consolidated Financial Statements as of March 31, 2022 and for the three months ended March 31, 2022 and 2021 are unaudited. All adjustments, consisting of normal recurring adjustments, except as otherwise noted, considered necessary for a fair presentation of the unaudited interim Condensed Consolidated Financial Statements for these interim periods have been included. Readers of this unaudited interim Condensed Consolidated quarterly financial information should refer to the audited Consolidated Financial Statements and notes thereto of Redbox Entertainment Inc. and its subsidiaries (“Redbox,” the “Company,” “we,” “our” and “us”) for the year ended December 31, 2021 included in our 2021 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) and also available on our website (www.redbox.com ). Certain footnote disclosures that would substantially duplicate those contained in such audited financial statements or which are not required by the rules and regulations of the SEC for interim financial reporting have been condensed or omitted. Refer to Note 1 of the Notes to Consolidated Financial Statements in the Company’s 2021 Annual Report on Form 10-K for further discussion of the Company’s accounting policies and estimates. Such Annual Report also contains a discussion of the Company’s critical accounting policies and estimates. |
Business Update, Going Concern and Strategic Alternatives | Business Update, Going Concern and Strategic Alternatives Historically, rentals have been correlated with the number and quality of new theatrical titles released in a quarter. During 2021 and for the first three months of 2022, Redbox’s business was negatively impacted by the effects of the ongoing COVID-19 pandemic, which resulted in fewer than expected theatrical releases. In addition, the significant increase in impacts from the Omicron variant caused further disruption to the business. As such, Redbox rentals have not recovered to the extent expected and, notwithstanding the year-over-year increase in new theatrical releases, were lower than pre-COVID-19 levels. As part of an effort to expand its business and transform into a multi-faceted entertainment company, during the fourth quarter of 2021 and into the first three months of 2022, Redbox increased its marketing and on-demand expenditures. Costs also increased as Redbox purchased more content, which were not offset by an increase in revenues. Redbox has been exploring a number of potential strategic alternatives with respect to the Company’s corporate or capital structure and seeking financing to fund operations and one-time restructuring costs. In March 2022, the Company’s Board of Directors established a Strategic Review Committee to, among other things, consider and oversee strategic alternatives or transactions that may be available to the Company with respect to its corporate or capital structure. Redbox is also executing on a previously announced series of restructuring actions and initiatives to improve its efficiency and reduce its cost structure, including, but not limited to, (i) optimizing its kiosk network and (ii) executing a workforce reduction across its supply chain and corporate teams. However, the risks and uncertainties related to the ongoing adverse effects of the COVID-19 pandemic on the Company’s operating results, together with the Company’s recurring operating losses, accumulated deficit and negative working capital, raise substantial doubt about our ability to continue as a going concern, after consideration of the strategic initiatives outlined below, within one year after the date that the condensed consolidated interim financial statements are issued. The accompanying consolidated financial statements and notes have been prepared assuming the Company will continue as a going concern. For the three months ended March 31, 2022, the Company generated negative cash flows from operations of On March 29, 2022, the Company completed a reduction in force of 150 employees. One-time restructuring charges of million were incurred, the substantial amount of which related to severance. The Company estimates that the workforce reduction will decrease its annual operating costs by approximately On April 15, 2022 certain subsidiaries of the Company entered into the Incremental Assumption and Amendment Agreement No. 6, amending its Credit Agreement (the “Sixth Amendment”), pursuant to which the Sixth Amendment Incremental Revolving Lenders (as defined in the Sixth Amendment) agreed to make available to certain subsidiaries of the Company Sixth Amendment Incremental Revolving Commitments (as defined in the Credit Agreement) in an aggregate amount equal to $50.0 million (subsequently restricted to $45.0 million, as discussed in further detail in Note 17: Subsequent Events . The details of the Sixth Amendment and its terms and conditions are discussed in further detail below in Note 6: Debt As a further condition of the Sixth Amendment, the Company issued to HPS Investment Partners, LLC (the administrative agent and collateral agent to the Credit Agreement) and certain affiliates (as defined in the Credit Agreement) warrants, with an exercise price of $0.0001 per share (the “HPS Warrants”), to purchase 11,416,700 shares of Class A common stock of the Company (“Common Stock”) in the event certain milestones were not met under the Amended Credit Agreement. Upon signing of the Merger Agreement (as defined below), the HPS Warrants became void and all rights of the warrant holders thereunder to exercise the HPS Warrants ceased. In connection with the Sixth Amendment, on April 15, 2022, the Company entered into a Voting and Support Agreement with AP VIII Aspen Holdings, L.P. (“Aspen”), Seaport Global SPAC, LLC and Redwood Holdco, LP (“Redwood”), (collectively the “Stockholders”), whereby the Stockholders agreed to vote their shares of the Company (i) in favor of any strategic transaction approved and recommended by the Company’s Board of Directors (the “Board”), or any committee to which the Board delegates authority, subject to certain terms and conditions (each, a “Transaction”), (ii) in opposition to any transaction involving the Company that has not been approved and recommend by the Board, and (iii) in favor of any directors that are proposed or nominated to the Board by the Company at any annual meeting of the Company. The Company further agreed, pursuant to the Voting and Support Agreement, to (i) permanently reduce a portion of the Union Revolving Credit Facility in an amount equal to $10.6 million (and the Company made such reduction) and (ii) among other agreements, refrain from borrowing under the Union Revolving Credit Facility without the consent of Aspen and Redwood Holdco, LP (other than with respect to certain scheduled borrowings and borrowings to cover interest, fees and expenses). In connection with the execution of the Sixth Amendment, the Company also implemented certain changes to the composition and size of its Board of Directors as further described in the Company’s Current Report on Form 8-K filed with the SEC on April 19, 2022. The Strategic Review Committee of the Board was also dissolved in connection with these changes. In connection with the Company’s entry into the Voting and Support Agreement, Redwood permanently waived the “Early Termination Payment” by the Company (or an affiliate) to Redwood that could have resulted from a provision in that certain Tax Receivable Agreement dated as of October 22, 2021 (“TRA”), which would have been triggered upon the change to the Board’s composition. Additionally, under the Voting and Support Agreement, the Company and Redwood agreed, in connection with the consummation of a Transaction, to (a) terminate the TRA upon the consummation of a Transaction and (b) waive all claims under the TRA with such waiver being effective upon the consummation of such Transaction. On May 10, 2022, the Company entered into a merger agreement with Chicken Soup for the Soul Entertainment (“CSSE”), pursuant to which, the Company will become a wholly owned subsidiary of CSSE (the “Merger Agreement”). As a result, additional borrowings under the Sixth Amendment Incremental Revolving Facility became available upon the Company’s entry into the merger agreement with CSSE provided, that the Company, under the Sixth Amendment Incremental Revolving Facility, restricts its borrowings to $45.0 million. See Note 17: Subsequent Events and the Company’s Current Report on Form 8-K filed with the SEC on May 11, 2022 for additional information regarding the CSSE merger. Our unaudited condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern. If the Company is unable to implement one or more of the contemplated strategic alternatives, an event of default will occur under the Credit Agreement, and the Company could continue to experience adverse pressures on its relationships with counterparties who are critical to its business, its ability to access the capital markets, its ability to execute on its operational and strategic goals and its business, prospects, results of operations and liquidity generally. There can be no assurance as to when or whether the implementation of one or more of the Company’s strategic initiatives will be successful, or as to the effects the failure to take action may have on the Company’s business, its ability to achieve its operational and strategic goals or its ability to finance its business or refinance its indebtedness. A failure to address these matters, will have a material adverse effect on the Company’s business, prospects, results of operations, liquidity and financial condition, and its ability to service or refinance its corporate debt as it becomes due. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property and Equipment | |
Schedule of property and equipment | March 31, December 31, Dollars in thousands 2022 2021 Kiosks and components $ 190,661 $ 190,496 Computers, servers, and software 101,912 99,123 Leasehold improvements 4,152 4,129 Office furniture and equipment 676 676 Leased Vehicles 11,178 11,380 Property and equipment, at cost $ 308,579 $ 305,804 Accumulated depreciation (271,836) (265,180) Property and equipment, net $ 36,743 $ 40,624 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases | |
Schedule of components of lease cost | The components of lease cost were as follows: Three Months Ended March 31, Dollars in thousands 2022 Operating lease cost $ 1,032 Finance lease cost Amortization of right-of-use assets 709 Interest on lease liabilities 29 Total finance least cost $ 738 Short-term lease cost (1) 58 Total lease cost $ 1,828 |
Schedule of supplemental cash flow information related to leases | |
Schedule of expected future payments relating to the operating lease liabilities | The expected future payments relating to the Company's operating and finance lease liabilities at March 31, 2022 are as follows: Dollars in thousands Operating Leases Finance Leases Nine months ending December 31, 2022 $ 2,771 $ 1,441 Year ending December 31, 2023 3,073 1,003 2024 2,284 401 2025 1,681 154 2026 — — Thereafter — — Total lease payments $ 9,809 $ 2,999 Less imputed interest (1,253) — Total $ 8,556 $ 2,999 |
Schedule of expected future payments relating to finance lease liabilities | The expected future payments relating to the Company's operating and finance lease liabilities at March 31, 2022 are as follows: Dollars in thousands Operating Leases Finance Leases Nine months ending December 31, 2022 $ 2,771 $ 1,441 Year ending December 31, 2023 3,073 1,003 2024 2,284 401 2025 1,681 154 2026 — — Thereafter — — Total lease payments $ 9,809 $ 2,999 Less imputed interest (1,253) — Total $ 8,556 $ 2,999 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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, 2021 $ 144,014 $ 3,509 $ 147,523 Balance as of March 31, 2022 $ 144,014 $ 3,509 $ 147,523 |
Summary of carrying amounts and accumulated amortization of intangible assets | March 31, 2022 December 31, 2021 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 $ (291,301) $ 78,699 $ 370,000 $ (278,087) $ 91,913 Trade name 7 years 60,000 (47,238) 12,762 60,000 (45,095) 14,905 Contactable customer list 7 years 40,000 (31,492) 8,508 40,000 (30,063) 9,937 Developed technology 7 years 30,000 (23,620) 6,380 30,000 (22,548) 7,452 Total intangible assets subject to amortization $ 500,000 $ (393,651) $ 106,349 $ 500,000 $ (375,793) $ 124,207 |
Accrued and Other Current Lia_2
Accrued and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accrued and Other Current Liabilities | |
Schedule of accrued expenses and other current liabilities | March 31, December 31, Dollars in thousands 2022 2021 Accrued payroll and other related expenses $ 24,900 $ 23,901 Accrued revenue share 9,338 11,786 Deferred revenue 9,401 9,553 Income taxes payable 183 — Other 14,744 12,515 Total accrued and other current liabilities $ 58,566 $ 57,755 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt | |
Summary of debt | March 31, December 31, Dollars in thousands 2022 2021 Term B Facility $ 271,562 $ 271,562 Paid-In-Kind Interest related to Term Loan Facility 38,394 31,480 Revolving Credit Facility 29,104 15,000 Paid-In-Kind Interest related to Revolving Credit Facility 3,145 2,731 Union Revolving Credit Facility 4,119 4,616 Total debt outstanding $ 346,324 $ 325,389 Less: Unamortized debt issuance costs (3,414) (3,823) Total debt, net $ 342,910 $ 321,566 Portion due within one year $ 41,539 $ 34,211 Total long-term debt, net $ 301,371 $ 287,355 |
Summary of required minimum principal amortization payments | Repayment Dollars in thousands Amount 2022 $ 38,394 2023 — 2024 271,562 Total $ 309,956 |
Interest Rate Derivatives (Tabl
Interest Rate Derivatives (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Interest Rate Derivatives | |
Summary of effect of company's derivative instrument on the Consolidated Statements of Operations | For the three months ended March 31, Dollars in thousands 2022 2021 Interest and other income (expense), net $ — $ 1,432 |
Segment Information and Geogr_2
Segment Information and Geographic Data (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Information and Geographic Data | |
Summary of financial information by segment | Summarized financial information by segment is as follows: March 31, Dollars in thousands 2022 2021 Net revenue Legacy Business $ 48,767 $ 67,637 Digital Business 14,460 9,093 Total $ 63,227 $ 76,730 Adjusted EBITDA Legacy Business $ (15,553) $ 334 Digital Business 2,015 968 Total $ (13,538) $ 1,302 |
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 three months ended March 31, 2022 and 2021: Three Months Ended March 31, Dollars in thousands 2022 2021 Loss before income taxes $ (40,848) $ (36,474) Add: Depreciation and amortization 25,090 27,526 Interest and other (income) expense, net (7,343) 7,247 Business optimization (a) — 550 One-time non-recurring (b) 3,743 364 New business start-up costs (c) — 171 Restructuring related (d) 4,012 1,352 Stock-based compensation expense 1,808 566 Adjusted EBITDA $ (13,538) $ 1,302 (a) Business optimization costs include employee retention costs, IT costs as well as consulting costs for certain projects. (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. During the three months ended March 31, 2022, the Company incurred (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. During the three months ended March 31, 2022, the Company incurred severance and related costs of |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share | |
Summary of calculation of EPS | Dollars in thousands, except per share amounts Three Months Ended March 31, Basic and Diluted EPS 2022 2021 Numerator: Net loss $ (40,874) $ (27,195) Less: net loss attributable to non-controlling interests (39,430) N/A Net loss attributable to Redbox Entertainment Inc. — Basic and Diluted $ (1,444) N/A Denominator: Weighted average shares of Class A common stock outstanding — Basic and Diluted 12,618,516 N/A Earnings per share of Class A common stock outstanding — Basic and Diluted $ (0.11) N/A |
Schedule of anti-dilutive shares | Three Months Ended March 31, 2022 2021 Public and private placement warrants 16,848,733 N/A |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Measurements | |
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 liabilities that are measured at fair value on a recurring basis at March 31, 2022 and December 31, 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value. March 31, December 31, Dollars in thousands Level 2022 2021 Liabilities: Warrant Liability – Public Warrants 1 $ 2,480 $ 11,213 Warrant Liability – Private Placement Warrants 3 1,576 6,608 Total Warrant Liability $ 4,056 $ 17,821 |
Schedule of key inputs into the Monte Carlo simulation model for the Public Warrants and Private Placement Warrants | Input March 31, 2022 December 31, 2021 Risk-free interest rate 2.40 % 1.20 % Expected term (years) 4.60 4.80 Expected volatility 55.0 % 31.4 % Stock price $ 2.36 $ 7.41 |
Schedule of changes in the fair value of warrant liabilities | Private Warrant Dollars in thousands Public Placement Liabilities Valuation as of December 31, 2021 $ 11,213 $ 6,608 $ 17,821 Change in valuation inputs or other assumptions (8,733) (5,032) (13,765) Fair value as of March 31, 2022 $ 2,480 $ 1,576 $ 4,056 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies | |
Summary of assets held under capital leases included in property and equipment, net | Assets held under finance leases are included in Property and equipment, net Condensed Consolidated Balance Sheets Dollars in thousands March 31, 2022 December 31, 2021 Gross property and equipment $ 11,178 $ 11,380 Accumulated depreciation (7,727) (7,285) Net property and equipment $ 3,451 $ 4,095 |
Summary of future minimum lease payments under operating leases | Total estimated movie content commitments under the terms of the Company’s content license agreements in effect as of March 31, 2022 is presented in the following table: Dollars in thousands Total 2022 2023 Minimum estimated movie content commitments $ 49,574 $ 40,709 $ 8,865 |
Related-Party Transactions (Tab
Related-Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions | |
Summary of the amounts due to from such related parties | The Company receives and provides certain operating support under commercial services agreements with affiliates of Apollo, primarily ecoATM. A summary of the amounts due to/from such related parties is presented below: March 31, December 31, Dollars in thousands 2022 2021 Due from related parties, net $ 4,370 $ 3,813 Due to related parties, net $ 74 $ 74 |
Additional Supplemental Cash _2
Additional Supplemental Cash Flow Financial Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Additional Supplemental Cash Flow Financial Information | |
Schedule of supplemental cash flow financial information | Cash, Cash Equivalents and Restricted Cash: March 31, December 31, Dollars in thousands 2022 2021 Cash and cash equivalents $ 9,763 $ 14,320 Restricted cash 3,895 4,158 Cash, cash equivalents and restricted cash $ 13,658 $ 18,478 Cash Interest and Taxes: Three Months Ended March 31, Dollars in thousands 2022 2021 Cash paid during the period for interest $ — $ — Cash paid during the period for income taxes, net $ 37 $ 91 Non-cash Transactions Three Months Ended March 31, Dollars in thousands 2022 2021 Purchases of property and equipment financed by finance lease obligations $ 83 $ — Right-of-use assets obtained in exchange for new operating lease liabilities $ 9,102 $ — Purchases of property and equipment included in ending trade payables or accrued and other current liabilities $ 210 $ 213 |
Basis of Presentation (Details)
Basis of Presentation (Details) | Mar. 29, 2022USD ($)employee | Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | May 10, 2022USD ($) | Apr. 25, 2022USD ($) | Apr. 15, 2022USD ($)$ / shares | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Oct. 20, 2017USD ($) |
Cash flows from operations | $ (14,823,000) | $ (14,110,000) | |||||||
Accumulated deficit | (334,398,000) | $ (332,954,000) | |||||||
Working capital | (79,800,000) | ||||||||
Severance and related costs | $ 3,800,000 | 3,800,000 | |||||||
Reduction in number of employees | employee | 150 | ||||||||
Decrease in annual operating costs | $ 13,100,000 | ||||||||
Warrants outstanding | $ 4,056,000 | $ 17,821,000 | |||||||
Revolving Credit Facility | |||||||||
Maximum borrowing capacity | $ 30,000,000 | $ 30,000,000 | |||||||
Revolving Credit Facility | Subsequent event | |||||||||
Revolving credit facility permanently reduced portion | $ 10,600,000 | ||||||||
Maximum borrowing capacity | $ 45,000,000 | $ 50,000,000 | $ 15,000,000 | ||||||
Revolving Credit Facility | H P S Investment Partners LLC | Subsequent event | |||||||||
Exercise price of warrant | $ / shares | $ 0.0001 | ||||||||
Warrants outstanding | $ 11,416,700 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | $ 308,579 | $ 305,804 |
Accumulated depreciation | (271,836) | (265,180) |
Property and equipment, net | 36,743 | 40,624 |
Kiosks and components | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 190,661 | 190,496 |
Computers, servers, and software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 101,912 | 99,123 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 4,152 | 4,129 |
Office furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | 676 | 676 |
Leased Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, at cost | $ 11,178 | $ 11,380 |
Leases - Components of lease co
Leases - Components of lease cost (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Leases | |
Lease term | 4 years |
Lease, Practical Expedient, Lessor Single Lease Component [true false] | false |
Operating lease cost | $ 1,032 |
Finance lease cost | |
Amortization of right-of-use assets | 709 |
Interest on lease liabilities | 29 |
Total finance lease cost | 738 |
Short-term lease cost | 58 |
Total lease cost | $ 1,828 |
Leases - Supplemental cash flow
Leases - Supplemental cash flow information related to leases (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Leases | |
Operating cash flows from operating leases | $ 1,091 |
Financing cash flows from financing leases | $ 771 |
Weighted average remaining lease term Operating leases (in years) | 3 years 2 months 12 days |
Weighted average remaining lease term, Finance leases (in years) | 1 year 2 months 12 days |
Weighted average discount rate, Operating leases | 9.25% |
Weighted average discount rate, Finance leases | 3.51% |
Leases - Expected future paymen
Leases - Expected future payments relating to the Company's operating and finance lease liabilities (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Operating Leases | |
Nine months ending December 31, 2022 | $ 2,771 |
2023 | 3,073 |
2024 | 2,284 |
2025 | 1,681 |
Total lease payments | 9,809 |
Less imputed interest | (1,253) |
Total | 8,556 |
Finance Leases | |
Nine months ending December 31, 2022 | 1,441 |
2023 | 1,003 |
2024 | 401 |
2025 | 154 |
Total lease payments | 2,999 |
Total | $ 2,999 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Goodwill [Line Items] | |||
Goodwill impairment | $ 0 | ||
Goodwill | 147,523 | $ 147,523 | |
Amortization of Intangible Assets | 17,857 | $ 17,858 | |
Impairment of goodwill and intangible assets | 0 | $ 0 | |
Legacy Business | |||
Goodwill [Line Items] | |||
Goodwill | 144,014 | 144,014 | |
Digital Business | |||
Goodwill [Line Items] | |||
Goodwill | $ 3,509 | $ 3,509 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Intangible asset (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 500,000 | $ 500,000 |
Accumulated Amortization | (393,651) | (375,793) |
Net Carrying Amount | $ 106,349 | 124,207 |
Contracts with retailers | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 7 years | |
Gross Carrying Amount | $ 370,000 | 370,000 |
Accumulated Amortization | (291,301) | (278,087) |
Net Carrying Amount | $ 78,699 | 91,913 |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 7 years | |
Gross Carrying Amount | $ 60,000 | 60,000 |
Accumulated Amortization | (47,238) | (45,095) |
Net Carrying Amount | $ 12,762 | 14,905 |
Contactable customer list | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 7 years | |
Gross Carrying Amount | $ 40,000 | 40,000 |
Accumulated Amortization | (31,492) | (30,063) |
Net Carrying Amount | $ 8,508 | 9,937 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life | 7 years | |
Gross Carrying Amount | $ 30,000 | 30,000 |
Accumulated Amortization | (23,620) | (22,548) |
Net Carrying Amount | $ 6,380 | $ 7,452 |
Accrued and Other Current Lia_3
Accrued and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Accrued and Other Current Liabilities | ||
Accrued payroll and other related expenses | $ 24,900 | $ 23,901 |
Accrued revenue share | 9,338 | 11,786 |
Deferred revenue | 9,401 | 9,553 |
Income taxes payable | 183 | |
Other | 14,744 | 12,515 |
Total accrued and other current liabilities | $ 58,566 | $ 57,755 |
Debt - Summary of debt (Details
Debt - Summary of debt (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Total debt outstanding | $ 346,324 | $ 325,389 |
Less: Unamortized debt issuance costs | (3,414) | (3,823) |
Total debt, net | 342,910 | 321,566 |
Portion due within one year | 41,539 | 34,211 |
Total long-term debt, net | 301,371 | 287,355 |
Term B Facility | ||
Debt Instrument [Line Items] | ||
Total debt outstanding | 271,562 | 271,562 |
Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Paid-In-Kind Interest | 38,394 | 31,480 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Paid-In-Kind Interest | 3,145 | 2,731 |
Total debt outstanding | 29,104 | 15,000 |
Union Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Total debt outstanding | $ 4,119 | $ 4,616 |
Debt - Credit Agreements (Detai
Debt - Credit Agreements (Details) - USD ($) $ in Millions | Oct. 20, 2017 | Dec. 31, 2020 |
Term B Facility | ||
Debt Instrument [Line Items] | ||
Aggregate principal amount | $ 425 | $ 425 |
Term of debt | 5 years | |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 30 | $ 30 |
Term of debt | 5 years |
Debt - Term Loan and Amendment
Debt - Term Loan and Amendment Agreement (Details) - USD ($) $ in Millions | May 16, 2021 | Sep. 07, 2018 | Oct. 20, 2017 | Mar. 31, 2022 | Dec. 31, 2020 |
Debt Instrument [Line Items] | |||||
Dividends to equity holders | $ 160 | ||||
Term B Facility | |||||
Debt Instrument [Line Items] | |||||
Retirement of existing debt outstanding | 280 | ||||
Cost associated with debt | 19.5 | ||||
Write-off unamortized deferred financing costs | 21.7 | ||||
Aggregate principal amount | 425 | $ 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 | $ 115 | ||||
Number of business days within which dividend was paid | 5 days | ||||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Retirement of existing debt outstanding | $ 15 | ||||
Maximum borrowing capacity | 30 | $ 30 | |||
Remaining borrowing capacity | $ 0 | ||||
Apollo Global Securities, LLC | Term B Facility | |||||
Debt Instrument [Line Items] | |||||
Cost associated with debt | $ 4.6 |
Debt - Credit Agreement Amendme
Debt - Credit Agreement Amendments (Details) - USD ($) $ in Millions | Apr. 15, 2022 | Jun. 29, 2021 | May 16, 2021 | Dec. 29, 2020 | Oct. 20, 2017 | Mar. 31, 2022 | Dec. 31, 2021 | May 10, 2022 | Apr. 25, 2022 | Dec. 31, 2020 |
Union Revolving Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Term of debt | 4 years | |||||||||
Maximum borrowing capacity | $ 20 | |||||||||
Borrowings outstanding | $ 4.1 | $ 4.6 | ||||||||
Commitment fee (as a percent) | 0.50% | |||||||||
Borrowing interest rate | 4.25% | 4.25% | ||||||||
Union Revolving Credit Facility | Subsequent event | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility, decrease in revolving commitment | $ 10.6 | |||||||||
Remaining borrowing capacity | $ 2.3 | |||||||||
Union Revolving Credit Facility | Federal funds rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Spread on variable rate | 1.00% | |||||||||
Union Revolving Credit Facility | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Spread on variable rate | 1.00% | |||||||||
Borrowing interest rate | 0.50% | |||||||||
Senior Facilities | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayment of debt | $ 50 | |||||||||
Commitment fee (as a percent) | 0.50% | |||||||||
Borrowing interest rate | 9.25% | 9.25% | ||||||||
Senior Facilities | Federal funds rate | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate, floor | 0.50% | |||||||||
Senior Facilities | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Spread on variable rate | 1.00% | |||||||||
Interest rate, floor | 1.00% | |||||||||
Eurocurrency Borrowings | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Borrowing interest rate | 7.25% | |||||||||
Borrowing interest rate, if PIK interest paid | 8.25% | |||||||||
ABR Borrowings | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Borrowing interest rate | 6.25% | |||||||||
Borrowing interest rate, if PIK interest paid | 7.25% | |||||||||
Revolving Credit Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Term of debt | 5 years | |||||||||
Maximum borrowing capacity | $ 30 | $ 30 | ||||||||
Repayment of debt | 15 | |||||||||
Remaining borrowing capacity | $ 0 | |||||||||
Revolving Credit Facility | Subsequent event | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | $ 15 | 45 | $ 50 | |||||||
Events of default grace period | 5 days | |||||||||
Additional financing under the Credit Agreement | $ 50 | $ 35 | ||||||||
Term loan B-2 facility | New Outerwall | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Aggregate principal amount | $ 25 | |||||||||
Term Loan B and the Term Loan B-1 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayment of debt | $ 35 |
Debt - Dividend Restrictions an
Debt - Dividend Restrictions and Interest Rates and Fees (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | |||
Maximum dividends payments | $ 1,030 | ||
Senior Facilities | |||
Debt Instrument [Line Items] | |||
Borrowing interest rate | 9.25% | 9.25% |
Debt - Amortization and Prepaym
Debt - Amortization and Prepayments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Required minimum principal amortization payments | ||
Total | $ 346,324 | $ 325,389 |
Capital stock of the first-tier foreign subsidiaries pledged (as a percent) | 65.00% | |
Senior Facilities | ||
Required minimum principal amortization payments | ||
2022 | $ 38,394 | |
2024 | 271,562 | |
Total | $ 309,956 |
Debt - Letters of Credit (Detai
Debt - Letters of Credit (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Dec. 31, 2021 | Oct. 31, 2021 | |
Standby Letters of Credit | |||
Debt Instrument [Line Items] | |||
Term of debt | 1 year | ||
Cash-collateralized (as a percent) | 105.00% | ||
Cash-collateralized through restricted cash balance | $ 3.1 | $ 3.4 | |
Letter of Credit [Member] | |||
Debt Instrument [Line Items] | |||
Line of credit | $ 0.8 | ||
Restricted cash | $ 3.9 | $ 4.2 |
Interest Rate Derivatives - Nar
Interest Rate Derivatives - Narratives (Details) - Interest rate swap agreement $ in Millions | Oct. 22, 2018USD ($) |
Derivative [Line Items] | |
Term of agreement | 3 years |
Fixed notional amount | $ 200 |
Fixed interest rate | 3.0335% |
Total interest rate | 10.2835 |
Interest Rate Derivatives - Con
Interest Rate Derivatives - Consolidated Statements of Operations (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Interest rate swap agreement | Derivatives not designated as hedging instrument | |
Derivative [Line Items] | |
Other expense, net | $ 1,432 |
Segment Information and Geogr_3
Segment Information and Geographic Data (Details) | 3 Months Ended |
Mar. 31, 2022segmentitem | |
Segment Information and Geographic Data | |
Number of operating segments | segment | 2 |
Number of self-service kiosks where consumers can rent or purchase new-release DVDs and Blu-ray DiscsTM | 38,000 |
Number of linear channels | 145 |
Segment Information and Geogr_4
Segment Information and Geographic Data - Summarized financial information by segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Net revenue | $ 63,227 | $ 76,730 |
Adjusted EBITDA | (13,538) | 1,302 |
Legacy Business | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 48,767 | 67,637 |
Adjusted EBITDA | (15,553) | 334 |
Digital Business | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 14,460 | 9,093 |
Adjusted EBITDA | $ 2,015 | $ 968 |
Segment Information and Geogr_5
Segment Information and Geographic Data - Reconciliation of Adjusted EBITDA to (loss) income before income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment Information and Geographic Data | ||
Loss before income taxes | $ (40,848) | $ (36,474) |
Depreciation and amortization | 25,090 | 27,526 |
Interest and other (income) expense, net | (7,343) | 7,247 |
Business optimization(a) | 550 | |
One-time non-recurring(b) | 3,743 | 364 |
New business start-up costs(c) | 171 | |
Restructuring related(d) | 4,012 | 1,352 |
Stock-based compensation expense | 1,808 | 566 |
Adjusted EBITDA | $ (13,538) | $ 1,302 |
Segment Information and Geogr_6
Segment Information and Geographic Data - Business optimization costs (Details) - USD ($) $ in Millions | Mar. 29, 2022 | Mar. 31, 2022 |
Segment Information and Geographic Data | ||
Legal and advisory expenses | $ 3.7 | |
Severance and related costs | $ 3.8 | $ 3.8 |
Earnings Per Share - Calculatio
Earnings Per Share - Calculation of EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator: | ||
Net loss | $ (40,874) | $ (27,195) |
Less: net loss attributable to non-controlling interests | (39,430) | |
Net loss attributable to Redbox Entertainment Inc. - basic | (1,444) | |
Net loss attributable to Redbox Entertainment Inc. - diluted | $ (1,444) | |
Denominator: | ||
Weighted average shares of Class A common stock outstanding - basic | 12,618,516 | |
Weighted average shares of Class A common stock outstanding - diluted | 12,618,516 | |
Earnings per share of Class A common stock outstanding - basic | $ (0.11) | |
Earnings per share of Class A common stock outstanding - diluted | $ (0.11) |
Earnings Per Share (Details)
Earnings Per Share (Details) | 3 Months Ended |
Mar. 31, 2022shares | |
Public and private placement warrants | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive securities excluded from computation of earnings per share | 16,848,733 |
Shareholders' Equity - Preferre
Shareholders' Equity - Preferred Stock (Details) | Mar. 31, 2022$ / sharesshares |
Stockholders' Equity | |
Preferred shares, shares authorized | 1,000,000 |
Preferred shares, par value | $ / shares | $ 0.0001 |
Preferred stock, shares issued | 0 |
Preferred stock, shares outstanding | 0 |
Shareholders' Equity - Common S
Shareholders' Equity - Common Stock - Non-controlling Interest (Details) | 3 Months Ended | ||
Mar. 31, 2022Vote$ / sharesshares | Dec. 31, 2021$ / sharesshares | Oct. 22, 2021 | |
Class of Stock [Line Items] | |||
Stock exchange ratio | 1 | ||
Redwood Holdco | |||
Class of Stock [Line Items] | |||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 72.20% | 72.20% | |
Class A Common Stock | |||
Class of Stock [Line Items] | |||
Common stock, shares authorized | 500,000,000 | 500,000,000 | |
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | |
Common shares, votes per share | Vote | 1 | ||
Common stock, shares issued | 12,618,516 | 12,618,516 | |
Common stock, shares outstanding | 12,618,516 | 12,618,516 | |
Common Stock, Number Of Votes Per Share | Vote | 1 | ||
Class B Common Stock | |||
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 | Vote | 1 | ||
Common stock, shares issued | 32,770,000 | 32,770,000 | |
Common stock, shares outstanding | 32,770,000 | 32,770,000 | |
Common Stock, Number Of Votes Per Share | Vote | 1 |
Warrant Liability (Details)
Warrant Liability (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Class of Warrant or Right [Line Items] | ||
Share price | $ 11.50 | |
Warrants and Rights Outstanding | $ 4,056 | $ 17,821 |
Class of Warrant or Right, Number of Securities Called by Each Warrant or Right | 1 | |
Fair Value Adjustment of Warrants | $ (13,765) | |
Public Warrants | ||
Class of Warrant or Right [Line Items] | ||
Exercise price of warrant | $ 11.50 | |
Warrant term | 5 years | |
Redemption price per public warrant (in dollars per share) | $ 0.01 | |
Minimum threshold written notice period for redemption of public warrants | 30 days | |
Stock price trigger for redemption of public warrants (in dollars per share) | $ 18 | |
Threshold trading days for redemption of public warrants | 20 days | |
Threshold consecutive trading days for redemption of public warrants | 30 days | |
Class of Warrant or Right, Outstanding | 10,781,250 | |
Private Placement Warrants | ||
Class of Warrant or Right [Line Items] | ||
Class of Warrant or Right, Outstanding | 6,062,500 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Public Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | $ 2,500 | $ 11,200 |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 4,056 | 17,821 |
(Level 1) | Recurring | Public Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 2,480 | 11,213 |
(Level 3) | Recurring | Private Placement Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | $ 1,576 | $ 6,608 |
Fair Value Measurements - Monte
Fair Value Measurements - Monte Carlo (Details) - Subsequent Measurement | Mar. 31, 2022Y$ / shares | Dec. 31, 2021Y$ / shares |
Risk-free interest rate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 2.40 | 1.20 |
Expected term remaining (years) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | Y | 4.60 | 4.80 |
Expected volatility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | 55 | 31.4 |
Stock price | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement input | $ / shares | 2.36 | 7.41 |
Fair Value Measurements - Subse
Fair Value Measurements - Subsequent Measurement (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value Adjustment of Warrants | $ (13,765) | |
Public Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Valuation as of December 31, 2021 | 11,213 | |
Change in valuation inputs or other assumptions | (8,733) | |
Fair value as of March 31, 2022 | $ 2,480 | |
Price per warrant | $ 0.23 | $ 1.04 |
Liabilities | $ 2,500 | $ 11,200 |
Private Placement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Valuation as of December 31, 2021 | 6,608 | |
Change in valuation inputs or other assumptions | (5,032) | |
Fair value as of March 31, 2022 | $ 1,576 | |
Price per warrant | $ 0.26 | $ 1.09 |
Liabilities | $ 1,600 | $ 6,600 |
Warrant | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Valuation as of December 31, 2021 | 17,821 | |
Change in valuation inputs or other assumptions | (13,765) | |
Fair value as of March 31, 2022 | $ 4,056 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Commitments and Contingencies | ||
Rent expense, net of sublease income | $ 1 | $ 1.1 |
Commitments and Contingencies -
Commitments and Contingencies - Assets held under capital leases are included in Property and equipment, net on the Consolidated Balance Sheets (Details) - Assets held under capital leases - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Gross property plant and equipment | $ 11,178 | $ 11,380 |
Accumulated depreciation | (7,727) | (7,285) |
Net property and equipment | $ 3,451 | $ 4,095 |
Commitments and Contingencies_3
Commitments and Contingencies - Total estimated movie content commitments (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Minimum estimated movie content commitments | |
2022 | $ 40,709 |
2023 | 8,865 |
Contractual Obligation, Total | $ 49,574 |
Income Taxes - Rates (Details)
Income Taxes - Rates (Details) - item | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Taxes. | ||
Effective Income Tax Rate Reconciliation, Percent | (0.10%) | 25.40% |
Number of state examination finalized | 0 |
Related-Party Transactions - Su
Related-Party Transactions - Summary of Related Parties (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Related Party Transactions | ||
Due from related parties, net | $ 4,370 | $ 3,813 |
Due to related parties, net | $ 74 | $ 74 |
Related-Party Transactions - Na
Related-Party Transactions - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Related Party Transactions | ||
Related party revenues | $ 5.6 | $ 3.8 |
Additional Supplemental Cash _3
Additional Supplemental Cash Flow Financial Information (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Additional Supplemental Cash Flow Financial Information | ||||
Cash and cash equivalents | $ 9,763 | $ 14,320 | ||
Restricted cash | 3,895 | 4,158 | ||
Cash, cash equivalents and restricted cash | $ 13,658 | $ 18,478 | $ 17,142 | $ 8,927 |
Additional Supplemental Cash _4
Additional Supplemental Cash Flow Financial Information - Cash Interest and Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Additional Supplemental Cash Flow Financial Information | ||
Cash paid during the period for income taxes, net | $ 37 | $ 91 |
Additional Supplemental Cash _5
Additional Supplemental Cash Flow Financial Information - Non Cash Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Additional Supplemental Cash Flow Financial Information | ||
Purchases of property and equipment financed by finance lease obligations | $ 83 | |
Purchases of property and equipment included in ending trade payables or accrued and other current liabilities | $ 210 | $ 213 |
Subsequent Events (Details)
Subsequent Events (Details) | May 10, 2022$ / shares | Mar. 31, 2022$ / shares | Dec. 31, 2021$ / shares |
Subsequent Event [Line Items] | |||
Stock exchange ratio | 1 | ||
Class A Common Stock | |||
Subsequent Event [Line Items] | |||
Common stock, par value | $ 0.0001 | $ 0.0001 | |
Subsequent event | CSSE | Class A Common Stock | |||
Subsequent Event [Line Items] | |||
Stock exchange ratio | 0.087 | ||
Common stock, par value | $ 0.0001 |