Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 08, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 1-41688 | |
Entity Registrant Name | STRONG GLOBAL ENTERTAINMENT, INC. | |
Entity Central Index Key | 0001893448 | |
Entity Incorporation, State or Country Code | A1 | |
Entity Address, Address Line One | 5960 Fairview Road | |
Entity Address, Address Line Two | Suite 275 | |
Entity Address, City or Town | Charlotte | |
Entity Address, State or Province | NC | |
Entity Address, Postal Zip Code | 28210 | |
City Area Code | (704) | |
Local Phone Number | 471-6784 | |
Title of 12(b) Security | Class A Common Voting Shares, without par value | |
Trading Symbol | SGE | |
Security Exchange Name | NYSEAMER | |
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 | |
Elected Not To Use the Extended Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 7,877,842 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 3,110 | $ 3,615 |
Accounts receivable (net of credit allowances of $221 and $409, respectively) | 7,443 | 6,148 |
Inventories, net | 3,597 | 3,389 |
Other current assets | 1,337 | 4,547 |
Total current assets | 15,487 | 17,699 |
Property, plant and equipment, net | 1,522 | 4,607 |
Operating lease right-of-use assets | 4,695 | 237 |
Finance lease right-of-use asset | 1,004 | 606 |
Film and television programming rights, net | 8,205 | 1,501 |
Intangible assets, net | 6 | |
Goodwill | 2,049 | 882 |
Total assets | 32,962 | 25,538 |
Current liabilities: | ||
Accounts payable | 3,576 | 4,106 |
Accrued expenses | 7,326 | 4,486 |
Payable to FG Group Holdings Inc. (Note 17) | 1,818 | 1,861 |
Short-term debt | 2,777 | 2,510 |
Current portion of long-term debt | 37 | 36 |
Current portion of operating lease obligations | 278 | 64 |
Current portion of finance lease obligations | 203 | 105 |
Deferred revenue and customer deposits | 1,515 | 1,769 |
Total current liabilities | 17,530 | 14,937 |
Operating lease obligations, net of current portion | 4,478 | 234 |
Finance lease obligations, net of current portion | 814 | 502 |
Long-term debt, net of current portion | 169 | 126 |
Deferred income taxes | 120 | 529 |
Other long-term liabilities | 525 | 6 |
Total liabilities | 23,636 | 16,334 |
Commitments, contingencies and concentrations (Note 16) | ||
Equity: | ||
Common stock, no par value; 150,000 shares authorized, 7,762 issued and outstanding as of September 30, 2023 | ||
Additional paid-in-capital | 15,589 | |
Accumulated deficit | (807) | |
Accumulated other comprehensive loss | (5,456) | (5,024) |
Net parent investment | 14,228 | |
Total equity | 9,326 | 9,204 |
Total liabilities and equity | $ 32,962 | $ 25,538 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) shares in Thousands, $ / shares in Thousands, $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Doubtful accounts receivable | $ 221 | $ 409 |
Common stock, par value | $ 0 | $ 0 |
Common stock shares authorized | 150,000 | 150,000 |
Common stock, shares issued | 7,762 | |
Common stock, shares outstanding | 7,762 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Total net revenues | $ 10,920 | $ 9,903 | $ 38,709 | $ 28,446 |
Total cost of revenues | 8,098 | 7,532 | 26,358 | 21,771 |
Gross profit | 2,822 | 2,371 | 12,351 | 6,675 |
Selling and administrative expenses: | ||||
Selling | 500 | 498 | 1,652 | 1,723 |
Administrative | 2,139 | 1,368 | 9,983 | 4,138 |
Total selling and administrative expenses | 2,639 | 1,866 | 11,635 | 5,861 |
Gain on disposal of assets | 1 | |||
Income from operations | 183 | 505 | 717 | 814 |
Other (expense) income: | ||||
Interest expense, net | (88) | (31) | (206) | (82) |
Foreign currency transaction gain (loss) | 126 | 518 | (183) | 646 |
Other income, net | 18 | 11 | 16 | 15 |
Total other income (expense) | 56 | 498 | (373) | 579 |
Income before income taxes | 239 | 1,003 | 344 | 1,393 |
Income tax expense | (205) | (233) | (349) | (417) |
Net income (loss) | $ 34 | $ 770 | $ (5) | $ 976 |
Net income (loss) per share: | ||||
Basic | $ 0 | $ 0.13 | $ 0 | $ 0.16 |
Diluted | $ 0 | $ 0.13 | $ 0 | $ 0.16 |
Weighted-average shares used in computing net (loss) income per share: | ||||
Basic | 7,272 | 6,000 | 6,613 | 6,000 |
Diluted | 7,272 | 6,000 | 6,613 | 6,000 |
Product [Member] | ||||
Total net revenues | $ 7,994 | $ 7,690 | $ 23,609 | $ 22,076 |
Total cost of revenues | 5,809 | 5,541 | 17,579 | 16,233 |
Service [Member] | ||||
Total net revenues | 2,926 | 2,213 | 15,100 | 6,370 |
Total cost of revenues | $ 2,289 | $ 1,991 | $ 8,779 | $ 5,538 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Net (loss) income | $ 34 | $ 770 | $ (5) | $ 976 |
Currency translation adjustment: | ||||
Unrealized net change arising during period | (180) | (1,380) | (432) | (1,933) |
Total other comprehensive loss | (180) | (1,380) | (432) | (1,933) |
Comprehensive loss | $ (146) | $ (610) | $ (437) | $ (957) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Parent [Member] |
Beginning balance, shares at Dec. 31, 2021 | ||||||
Net income (Loss) | $ 193 | $ 193 | ||||
Net other comprehensive loss | 178 | 178 | ||||
Balance at June 30, 2022 at Dec. 31, 2021 | 8,810 | (3,628) | 12,438 | |||
Balance at September 30, 2022 at Mar. 31, 2022 | 10,270 | (3,450) | 13,720 | |||
Ending balance, shares at Mar. 31, 2022 | ||||||
Stock-based compensation expense | 39 | 39 | ||||
Net transfer from parent | 1,050 | 1,050 | ||||
Beginning balance, shares at Dec. 31, 2021 | ||||||
Net income (Loss) | 976 | |||||
Balance at June 30, 2022 at Dec. 31, 2021 | 8,810 | (3,628) | 12,438 | |||
Balance at September 30, 2022 at Sep. 30, 2022 | 9,235 | (5,561) | 14,796 | |||
Ending balance, shares at Sep. 30, 2022 | ||||||
Stock-based compensation expense | 97 | |||||
Beginning balance, shares at Mar. 31, 2022 | ||||||
Net income (Loss) | 13 | 13 | ||||
Net other comprehensive loss | (731) | (731) | ||||
Balance at June 30, 2022 at Mar. 31, 2022 | 10,270 | (3,450) | 13,720 | |||
Balance at September 30, 2022 at Jun. 30, 2022 | 9,600 | (4,181) | 13,781 | |||
Ending balance, shares at Jun. 30, 2022 | ||||||
Stock-based compensation expense | 33 | 33 | ||||
Net transfer from parent | 15 | 15 | ||||
Net income (Loss) | 770 | 770 | ||||
Net other comprehensive loss | (1,380) | (1,380) | ||||
Balance at September 30, 2022 at Sep. 30, 2022 | 9,235 | (5,561) | 14,796 | |||
Ending balance, shares at Sep. 30, 2022 | ||||||
Stock-based compensation expense | 25 | 25 | ||||
Net transfer from parent | 220 | 220 | ||||
Balance at December 31, 2022 at Dec. 31, 2022 | 9,204 | (5,024) | 14,228 | |||
Beginning balance, shares at Dec. 31, 2022 | ||||||
Cumulative effect of adoption of accounting principle (Note 2) | (24) | (24) | ||||
Net income (Loss) | 373 | 373 | ||||
Net other comprehensive loss | (72) | (72) | ||||
Stock-based compensation expense | 18 | 18 | ||||
Net transfer to parent | (1,217) | (1,217) | ||||
Balance at September 30, 2022 at Mar. 31, 2023 | 8,282 | (5,096) | 13,378 | |||
Ending balance, shares at Mar. 31, 2023 | ||||||
Balance at December 31, 2022 at Dec. 31, 2022 | 9,204 | (5,024) | 14,228 | |||
Beginning balance, shares at Dec. 31, 2022 | ||||||
Net income (Loss) | $ (5) | |||||
Issuance of common stock and Landmark warrant, net of costs, shares | 5,999,999 | |||||
Balance at September 30, 2022 at Sep. 30, 2023 | $ 9,326 | 15,589 | (807) | (5,456) | ||
Ending balance, shares at Sep. 30, 2023 | 7,762,000 | |||||
Stock-based compensation expense | 890 | |||||
Beginning balance, shares at Mar. 31, 2023 | ||||||
Net income (Loss) | (416) | (841) | 425 | |||
Net other comprehensive loss | (180) | (180) | ||||
Stock-based compensation expense | 748 | 714 | 34 | |||
Net transfer to parent | (1,066) | (1,066) | ||||
Balance at June 30, 2022 at Mar. 31, 2023 | 8,282 | (5,096) | 13,378 | |||
Reclassification of Net parent investment | 12,771 | (12,771) | ||||
Reclassification of net parent investment, shares | 6,000,000 | |||||
Issuance of common stock and Landmark warrant, net of costs | 1,608 | 1,608 | ||||
Issuance of common stock and Landmark warrant, net of costs, shares | 1,000,000 | |||||
Vesting of restricted stock | (104) | (104) | ||||
Vesting of restricted stock, shares | 144,000 | |||||
Balance at September 30, 2022 at Jun. 30, 2023 | 8,872 | 14,989 | (841) | (5,276) | ||
Ending balance, shares at Jun. 30, 2023 | 7,144,000 | |||||
Net income (Loss) | 34 | 34 | ||||
Net other comprehensive loss | (180) | (180) | ||||
Stock-based compensation expense | 124 | 124 | ||||
Net transfer to parent | (718) | (718) | ||||
Reclassification of Net parent investment | (718) | 718 | ||||
Vesting of restricted stock | (12) | (12) | ||||
Vesting of restricted stock, shares | 18,000 | |||||
Issuance of common stock in connection with acquisition of Unbounded (Note 6) | 1,206 | 1,206 | ||||
Issuance of common stock in connection with acquisition of Unbounded (Note 6), shares | 600,000 | |||||
Balance at September 30, 2022 at Sep. 30, 2023 | $ 9,326 | $ 15,589 | $ (807) | $ (5,456) | ||
Ending balance, shares at Sep. 30, 2023 | 7,762,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (5) | $ 976 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
(Recovery of) provision for doubtful accounts | (32) | 10 |
Benefit from obsolete inventory | (47) | |
Provision for warranty | 131 | 9 |
Depreciation and amortization | 2,438 | 521 |
Amortization and accretion of operating leases | 48 | 52 |
Deferred income taxes | (430) | (116) |
Stock-based compensation expense | 890 | 97 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,223) | (395) |
Inventories | (158) | (556) |
Current income taxes | 154 | 503 |
Other assets | (7,864) | 1,133 |
Accounts payable and accrued expenses | 5,549 | (3,572) |
Deferred revenue and customer deposits | (257) | (420) |
Operating lease obligations | (57) | (50) |
Net cash used in operating activities | (863) | (1,808) |
Cash flows from investing activities: | ||
Capital expenditures | (288) | (197) |
Acquisition of programming rights | (511) | (407) |
Net cash used in investing activities | (799) | (604) |
Cash flows from financing activities: | ||
Principal payments on short-term debt | (358) | (228) |
Principal payments on long-term debt | (27) | (20) |
Borrowings under credit facility | 6,790 | |
Repayments under credit facility | (4,483) | |
Payments on finance lease obligations | (99) | |
Proceeds from initial public offering | 2,411 | |
Payments of withholding taxes for net share settlement of equity awards | (117) | |
Net cash transferred (to) from parent | (3,001) | 1,285 |
Net cash provided by financing activities | 1,116 | 1,037 |
Effect of exchange rate changes on cash and cash equivalents | 41 | 70 |
Net decrease in cash and cash equivalents and restricted cash | (505) | (1,305) |
Cash and cash equivalents and restricted cash at beginning of period | 3,615 | 4,494 |
Cash and cash equivalents and restricted cash at end of period | 3,110 | 3,189 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Issuance of common stock in connection with acquisition of Unbounded (Note 6) | 1,206 | |
Amount payable to Landmark Studio Group in connection with acquisition of projects (Note 10) | $ 1,345 |
Nature of Operations
Nature of Operations | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | 1. Nature of Operations Strong Global Entertainment (“Strong Global Entertainment,” or the “Company”) is a leader in the entertainment industry providing mission critical products and services to cinema exhibitors and entertainment venues for over 90 years. The Company is s a holding company and conducts business through its wholly-owned operating subsidiaries: Strong/MDI Screen Systems, Inc. (“Strong/MDI”) is a leading premium screen and projection coatings supplier in the world; Strong Technical Services, Inc. (“STS”) provides comprehensive managed service offerings with 24/7/365 support nationwide to ensure solution uptime and availability; and Strong Studios, Inc. (“Strong Studios”) develops and produces original feature films and television series and acquires rights to distribute content globally. On May 15, 2023, the Company completed an initial public offering (“IPO”) of 1,000,000 4.00 1.4 2.1 Refer to Note 5 for additional details relating to the Company’s IPO and separation transactions. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The condensed consolidated financial statements include the accounts of the Company and all majority-owned and controlled domestic and foreign subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. These condensed consolidated financial statements are presented in accordance with the requirements of interim financial data and consequently do not include all of the disclosures normally required by GAAP for annual reporting purposes, such as those made in the Company’s audited financial statements for the years ended December 31, 2022 and 2021. The results for interim periods are not necessarily indicative of trends or results expected for a full fiscal year. In May 2023, the Company became a standalone publicly traded company, and its financial statements post-Separation are prepared on a consolidated basis. The combined financial statements for all periods presented prior to the Separation (see below for additional information) are now also referred to as “consolidated financial statements.” In connection with the Separation, the Company’s assets and liabilities were transferred to the Company on a carry-over basis. The Company’s fiscal year begins on January 1 of the year stated and ends on December 31 of the same year. Unless otherwise indicated, all references to “dollars” and “$” in this Quarterly Report on Form 10-Q are to, and amounts are presented in, U.S. dollars. For Periods Prior to the Separation Prior to the Separation, the Company’s financial statements were derived from the consolidated financial statements and accounting records of FG Group Holdings as if Strong Global Entertainment had operated on a stand-alone basis during the periods presented and were prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) and pursuant to the regulations of the U.S. Securities and Exchange Commission. Historically, Strong Global Entertainment was reported as an operating segment within FG Group Holdings’ reportable segments and did not operate as a stand-alone company. Accordingly, FG Group Holdings historically reported the financial position and the related results of operations, cash flows and changes in equity of Strong Global Entertainment as a component of FG Group Holdings’ consolidated financial statements. Prior to the Separation, the historical results of operations included allocations of FG Group Holdings’ costs and expenses including FG Group Holdings’ corporate function which incurred a variety of expenses including, but not limited to, information technology, human resources, accounting, sales and sales operations, procurement, executive services, legal, corporate finance and communications. For periods prior to the Separation, the operating results of Strong Global Entertainment have historically been disclosed as a reportable segment within the consolidated financial statements of FG Group Holdings enabling identification of directly attributable transactional information, functional departments and headcount. The combined balance sheets were primarily derived by reference to one, or a combination, of Strong Global Entertainment transaction-level information, functional department or headcount. Revenue and Cost of revenue were derived from transactional information specific to Strong Global Entertainment products and services. Directly attributable operating expenses were derived from activities relating to Strong Global Entertainment functional departments and headcount. Certain additional costs, including compensation costs for corporate employees, have been allocated from FG Group Holdings. The allocated costs for corporate functions included, but were not limited to, information technology, legal, finance and accounting, human resources, tax, treasury, research and development, sales and marketing activities, shared facilities and other shared services, which are not provided at the Strong Global Entertainment level. These costs were allocated on a basis of revenue, headcount or other measures Strong Global Entertainment has determined as reasonable. Strong Global Entertainment employees also historically participated in FG Group Holdings’ stock-based incentive plans, in the form of restricted stock units (“RSUs”) and stock options issued pursuant to FG Group Holdings’ employee stock plan. Stock-based compensation expense has been directly reported by Strong Global Entertainment based on the awards and terms previously granted to FG Group Holdings’ employees. Allocations for management costs and corporate support services provided to Strong Global Entertainment prior to the Separation totaled $ 0.3 0.5 The operations of the Company are included in the consolidated U.S. federal, and certain state and local and foreign income tax returns filed by FG Group Holdings, where applicable. Income tax expense and other income tax related information contained in the financial statements prior to the Separation are presented on a separate return basis as if Strong Global Entertainment had filed its own tax returns. Use of Management Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results and changes in facts and circumstances may alter such estimates and affect results of operations and financial position in future periods. The coronavirus pandemic (“COVID-19”) had an unprecedented impact to consumer behaviors and our customers, particularly our customers’ ability and willingness to purchase our products and services. The Company believes that consumer reticence to engage in outside-the-home activities, caused by the risk of contracting COVID-19, has abated, and our customers have resumed more typical, pre-COVID-19 purchasing behaviors. And while we believe our customers made significant progress in its recovery from the pandemic, the impact of COVID-19 on inflation and supply chains and the continued economic recovery will be contingent upon several key factors, including the volume of new film content available, the box office performance of new film content released, the duration of the exclusive theatrical release window, and evolving consumer behavior with competition from other forms of in- and out-of-home entertainment. There can be no assurances that there will be no additional public health crises, including further resurgence or variants of COVID-19, which could reverse the current trend and have a negative impact on the Company’s results of operations. Cash and Cash Equivalents All short-term, highly liquid financial instruments are classified as cash equivalents in the condensed consolidated balance sheets and statements of cash flows. Generally, these instruments have maturities of three months or less from date of purchase. As of September 30, 2023, $ 1.6 3.1 Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company determines the allowance for expected credit losses based on several factors, including overall customer credit quality, historical write-off experience and a specific analysis that projects the ultimate collectability of the account. As such, these factors may change over time causing the allowance level and bad debt expense to be adjusted accordingly. Past due accounts are written off when our efforts have been unsuccessful in collecting amounts due. Income Taxes Income taxes are accounted for under the asset and liability method. The Company uses an estimate of its annual effective rate at each interim period based on the facts and circumstances at the time while the actual effective rate is calculated at year-end. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In assessing whether the deferred tax assets are realizable, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company’s uncertain tax positions are evaluated in a two-step process, whereby 1) the Company determines whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and 2) for those tax positions that meet the more likely than not recognition threshold, the Company would recognize the largest amount of tax benefit that is greater than fifty percent likely to be realized upon ultimate settlement with the related tax authority. The Company accrues interest and penalties related to uncertain tax positions in the consolidated statements of operations as income tax expense. Stock Compensation Plans The Company recognizes compensation expense for all stock-based payment awards based on estimated fair values on the date of grant. The Company uses the straight-line amortization method over the vesting period of the awards. The Company measures stock-based compensation at the grant date based on the fair value of the award. The fair value of stock options is estimated using the Black-Scholes option pricing model. Estimated compensation cost relating to RSUs is based on the closing fair market value of the Company’s common stock on the date of grant. No stock-based compensation cost was capitalized as a part of inventory during the periods ended September 30, 2023 and September 30, 2022. Prior to the Separation, the Company’s employees participated in FG Group Holdings’ stock-based compensation plans. Stock-based compensation expense was allocated to the Company based on the awards and terms previously granted to the FG Group Holdings’ employees. Film and Television Programming Rights In March 2022, the Company began producing original productions and acquiring rights to films and television programming. Film and television programming rights include the unamortized costs of in-process or in-development content produced or acquired by the Company. The Company’s capitalized costs include all direct production and financing costs, capitalized interest when applicable, and production overhead. Where available, the Company utilizes certain governmental incentives, programs and other structures from states and foreign countries (e.g., refundable tax credits calculated based on the amount of money spent in the particular jurisdiction in connection with the production) to fund its film and television productions and reduce financial risk. Film and television program rights are stated at the lower of amortized cost or estimated fair value. The costs of producing content are amortized using the individual-film-forecast method. These costs are amortized based on the ratio of the current period’s revenues to management’s estimated remaining total gross revenues to be earned (“Ultimate Revenue”) as of each reporting date to reflect the most current available information. Participation costs represent contingent consideration payable based on the performance of the film or television program to parties associated with the film or television program, including producers, writers, directors or actors and estimated liabilities for participations are accrued based on the ratio of the current period’s revenues to management’s estimated remaining total gross revenues to be earned. Management’s judgment is required in estimating Ultimate Revenue and the costs to be incurred throughout the life of each film or television program. Amortization is adjusted when necessary to reflect increases or decreases in forecasted Ultimate Revenues. For an episodic television series, the period over which Ultimate Revenues are estimated cannot exceed ten years following the date of delivery of the first episode, or, if still in production, five years from the date of delivery of the most recent episode, if later. For films, Ultimate Revenue includes estimates over a period not to exceed ten years following the date of initial release. Content assets are expected to be predominantly monetized individually and therefore are reviewed at the individual level when an event or change in circumstance indicates a change in the expected usefulness of the content or the fair value may be less than the unamortized cost. Due to the inherent uncertainties involved in making such estimates of Ultimate Revenues and expenses, these estimates may differ materially from actual results. In addition, in the normal course of our business, some films and titles will be more successful or less successful than anticipated. Management regularly reviews and revises, when necessary, its Ultimate Revenue and cost estimates, which may result in a change in the rate of amortization of film costs and participations and residuals and/or a write-down of all or a portion of the unamortized costs of the film or television program to its estimated fair value. An increase in the estimate of Ultimate Revenue will generally result in a lower amortization rate and, therefore, less film and television program amortization expense, while a decrease in the estimate of Ultimate Revenue will generally result in a higher amortization rate and, therefore, higher film and television program amortization expense, and also periodically result in an impairment requiring a write-down of the film cost to the title’s fair value. The Company has not incurred any of these write-downs. An impairment charge would be recorded in the amount by which the unamortized costs exceed the estimated fair value. Estimates of future revenue involve measurement uncertainties and it is therefore possible that reductions in the carrying value of capitalized costs may be required because of changes in management’s future revenue estimates. Fair Value of Financial Instruments Assets and liabilities measured at fair value are categorized into a fair value hierarchy based upon the observability of inputs to the valuation of an asset or liability as of the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. The categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: ● Level 1 – inputs to the valuation techniques are quoted prices in active markets for identical assets or liabilities ● Level 2 – inputs to the valuation techniques are other than quoted prices but are observable for the assets or liabilities, either directly or indirectly ● Level 3 – inputs to the valuation techniques are unobservable for the assets or liabilities The following tables present the Company’s financial assets measured at fair value based upon the level within the fair value hierarchy in which the fair value measurements are classified, as of September 30, 2023 and December 31, 2022. Fair values measured on a recurring basis at September 30, 2023 (in thousands): Schedule of Fair Values Measured on Recurring Basis Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 3,110 $ - $ - $ 3,110 Total $ 3,110 $ - $ - $ 3,110 Fair values measured on a recurring basis at December 31, 2022 (in thousands): Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 3,615 $ - $ - $ 3,615 Total $ 3,615 $ - $ - $ 3,615 The Company’s short-term debt is recorded at historical cost. The carrying values of all other financial assets and liabilities, including accounts receivable, accounts payable, accrued expenses and short-term debt reported in the consolidated balance sheets equal or approximate their fair values due to the short-term nature of these instruments. All non-financial assets that are not recognized or disclosed at fair value in the financial statements on a recurring basis, which include non-financial long-lived assets, are measured at fair value in certain circumstances (for example, when there is evidence of impairment). Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This ASU requires the measurement of all expected credit losses for financial assets, including trade receivables, held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The Company adopted this ASU effective January 1, 2023. Upon adoption the Company recorded a cumulative effect adjustment decreasing net parent investment by $ 24,000 |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 3. Revenue The Company accounts for revenue using the following steps: ● Identify the contract, or contracts, with a customer; ● Identify the performance obligations in the contract; ● Determine the transaction price; ● Allocate the transaction price to the identified performance obligations; and ● Recognize revenue when, or as, the Company satisfies the performance obligations. The Company combines contracts with the same customer into a single contract for accounting purposes when the contracts are entered into at or near the same time and the contracts are negotiated as a single commercial package, consideration in one contract depends on the other contract, or the services are considered a single performance obligation. If an arrangement involves multiple performance obligations, the items are analyzed to determine whether they are distinct, whether the items have value on a standalone basis, and whether there is objective and reliable evidence of their standalone selling price. The total contract transaction price is allocated to the identified performance obligations based upon the relative standalone selling prices of the performance obligations. The standalone selling price is based on an observable price for services sold to other comparable customers, when available, or an estimated selling price using a cost-plus margin approach. The Company estimates the amount of total contract consideration it expects to receive for variable arrangements by determining the most likely amount it expects to earn from the arrangement based on the expected quantities of services it expects to provide and the contractual pricing based on those quantities. The Company only includes a portion of variable consideration in the transaction price when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur or when the uncertainty associated with the variable consideration is subsequently resolved. The Company considers the sensitivity of the estimate, its relationship and experience with the client and variable services being performed, the range of possible revenue amounts and the magnitude of the variable consideration to the overall arrangement. As discussed in more detail below, revenue is recognized when a customer obtains control of promised goods or services under the terms of a contract and is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. The Company typically does not have any material extended payment terms, as payment is due at or shortly after the time of the sale. Sales, value-added and other taxes collected concurrently with revenue producing activities are excluded from revenue. The Company recognizes contract assets or unbilled receivables related to revenue recognized for services completed but not yet invoiced to the clients. Unbilled receivables are recorded as accounts receivable when the Company has an unconditional right to contract consideration. A contract liability is recognized as deferred revenue when the Company invoices clients, or receives cash, in advance of performing the related services under the terms of a contract. Deferred revenue is recognized as revenue when the Company has satisfied the related performance obligation. The Company defers costs to acquire contracts, including commissions, incentives and payroll taxes, if they are incremental and recoverable costs of obtaining a customer contract with a term exceeding one year. Deferred contract costs are reported within other assets and amortized to selling expense over the contract term, which generally ranges from one to five years. The Company has elected to recognize the incremental costs of obtaining a contract with a term of less than one year as a selling expense when incurred. The Company did not have any deferred contract costs as of September 30, 2023 or December 31, 2022. The following tables disaggregate the Company’s revenue by major source and by operating segment for the three and nine months ended September 30, 2023 and 2022 (in thousands): Schedule of Disaggregation of Revenue Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended Screen system sales $ 3,914 $ 3,374 $ 10,918 $ 10,117 Digital equipment sales 3,434 3,592 10,497 9,808 Extended warranty sales 43 106 143 290 Other product sales 603 618 2,051 1,861 Total product sales 7,994 7,690 23,609 22,076 Field maintenance and monitoring services 2,008 1,708 5,811 4,975 Installation services 763 453 2,603 1,294 Strong Studios services - - 6,379 - Other service revenues 155 52 307 101 Total service revenues 2,926 2,213 15,100 6,370 Total $ 10,920 $ 9,903 $ 38,709 $ 28,446 Total Revenue $ 10,920 $ 9,903 $ 38,709 $ 28,446 Screen system sales The Company typically recognizes revenue on the sale of its screen systems when control of the screen is transferred to the customer, usually at time of shipment. However, revenue is recognized upon delivery for certain international shipments with longer shipping transit times because control transfers upon customer delivery. The cost of freight and shipping to the customer is recognized in cost of sales at the time of transfer of control to the customer. For contracts that are long-term in nature, the Company believes that the use of the percentage-of-completion method is appropriate as the Company has the ability to make reasonably dependable estimates of the extent of progress towards completion, contract revenues, and contract costs. Under the percentage-of-completion method, revenue is recorded based on the ratio of actual costs incurred to total estimated costs expected to be incurred related to the contract. Digital equipment sales The Company recognizes revenue on sales of digital equipment when the control of the equipment is transferred, which typically occurs at the time of shipment from the Company’s warehouse or drop-shipment from a third party. The cost of freight and shipping to the customer is recognized in cost of sales at the time of transfer of control to the customer. Field maintenance and monitoring services The Company sells service contracts that provide maintenance and monitoring services to its Strong Entertainment customers. These contracts are generally 12 months in length. Revenue related to service contracts is recognized ratably over the term of the agreement. In addition to selling service contracts, the Company also performs discrete time and materials-based maintenance and repair work for customers. Revenue related to time and materials-based maintenance and repair work is recognized at the point in time when the performance obligation has been fully satisfied. Installation services The Company performs installation services for its customers and recognizes revenue upon completion of the installations. Strong Studios services The Company develops and produces original films and television series, as well as acquires third-party rights to content for global multi-platform distribution and recognizes revenue upon the transfer or license of film and television programming rights and related intellectual property. Extended warranty sales The Company performs installation services for its customers and recognizes revenue upon completion of the installations. Timing of revenue recognition The following tables disaggregate the Company’s revenue by the timing of transfer of goods or services to the customer for the three and nine months ended September 30, 2023 and 2022 (in thousands): Schedule of Disaggregation of Revenue by Timing of Transfer of Goods or Services Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended Point in time $ 9,389 $ 8,587 $ 34,130 $ 24,561 Over time 1,531 1,316 4,579 3,885 Total $ 10,920 $ 9,903 $ 38,709 $ 28,446 Total revenue $ 10,920 $ 9,903 $ 38,709 $ 28,446 At September 30, 2023, the unearned revenue amount associated with long-term projects that the Company uses the percentage-of-completion method to recognize revenue, maintenance and monitoring services and extended warranty sales in which the Company is the primary obligor was $ 0.8 0.7 0.1 |
Net Income (Los) Per Share
Net Income (Los) Per Share | 9 Months Ended |
Sep. 30, 2023 | |
Net income (loss) per share: | |
Net Income (Los) Per Share | 4. Net Income (Los) Per Share Basic net loss per share has been computed on the basis of the weighted average number of shares of common stock outstanding. In periods when the Company reported a net loss, there were no differences between average shares used to compute basic and diluted loss per share as inclusion of stock options and restricted stock units would have been anti-dilutive in those periods. The weighted average number of shares outstanding for the basic and diluted net income (loss) per share for the periods prior to the completion of the IPO is based on the number of shares of the Company’s common stock outstanding on May 15, 2023, the effective date of the registration statement relating to the IPO. On that date, the Company issued 5,999,999 6,000,000 Schedule of Earnings Per Share Basic and Diluted 2023 2022 2023 2022 Three Months Ended Nine Months Ended 2023 2022 2023 2022 Weighted average shares outstanding: Basic weighted average shares outstanding 7,272 6,000 6,613 6,000 Dilutive effect of stock options and certain non-vested restricted stock units - - - - Diluted weighted average shares outstanding 7,272 6,000 6,613 6,000 Anti-dilutive employee stock-based awards, excluded - - 38 - |
The Separation and Initial Publ
The Separation and Initial Public Offering | 9 Months Ended |
Sep. 30, 2023 | |
Separation And Initial Public Offering | |
The Separation and Initial Public Offering | 5. The Separation and Initial Public Offering On May 15, 2023, the Company completed an IPO of 1,000,000 4.00 1.4 2.1 In connection with the Separation of the Company from FG Group Holdings and the IPO, the Company entered into a Master Asset Purchase Agreement, an IP Assignment Agreement, the FG Group Holdings Asset Transfer Agreement, the FG Group Holdings IP Assignment Agreement, the Joliette Plant Lease, the Share Transfer Agreements and a number of other agreements. Under the Management Services Agreement, the Company and FG Group Holdings provide certain services to each other, which include information technology, legal, finance and accounting, human resources, tax, treasury, and other services, and charges a fee that is based on its actual costs and expenses for those services in the future (with mark-up, if necessary, to comply with applicable transfer pricing principles under Canadian and U.S. tax regulations). These agreements took effect upon the closing of the Separation and IPO. |
Acquisition of Unbounded Media
Acquisition of Unbounded Media Corporation | 9 Months Ended |
Sep. 30, 2023 | |
Acquisition Of Unbounded Media Corporation | |
Acquisition of Unbounded Media Corporation | 6. Acquisition of Unbounded Media Corporation On September 12, 2023, the Company acquired all of the outstanding capital stock of Unbounded Media Corporation and its subsidiaries (“Unbounded”), an independent media and creative production company. In connection with the acquisition of Unbounded, the Company issued 0.6 Unbounded develops, creates and produces film, advertising, and branded content for a broad range of clients. In an all-stock transaction, the deal with Unbounded marks the first acquisition in a broader strategy to acquire a portfolio of multi-disciplined content and services companies. Unbounded, in partnership with Strong Studios, also plans to further develop its original IP portfolio, under its Fieldhouse Entertainment division, which currently includes feature films employing Strong Studios’ long form production expertise and industry network. The following table summarizes the fair values assigned to the net assets acquired and the liabilities assumed as part of the acquisition of Unbounded (in thousands): Schedule of Fair Values Assigned to Net Assets and Liabilities Assumed Acquisition Cash $ 2 Accounts receivable 59 Other current assets 51 Intangible assets 10 Total identifiable assets acquired 122 Accounts payable and accrued expenses 11 Revolving credit facility 71 Total liabilities assumed 82 Net identifiable assets acquired 40 Goodwill 1,166 Net assets acquired $ 1,206 The Company is in the process of finalizing the acquisition purchase price and valuations of certain intangible assets; thus, the provisional measurements of intangible assets and goodwill are subject to change. Pro forma results of operations for this acquisition have not been presented because the effects on net revenues and net (loss) income were not material to the Company’s historical consolidated financial statements. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | 7. Inventories Inventories consisted of the following (in thousands): Schedule of Inventories September 30, 2023 December 31, 2022 Raw materials and components $ 1,964 $ 1,826 Work in process 496 279 Finished goods 1,137 1,284 Inventory , net $ 3,597 $ 3,389 The inventory balances are net of reserves of approximately $ 0.4 0.5 Schedule of Inventory Reserve Inventory reserve balance at December 31, 2022 $ 486 Inventory write-offs during 2023 (57 ) Provision for inventory reserve during 2023 (47 ) Inventory reserve balance at September 30, 2023 $ 382 |
Other Current Assets
Other Current Assets | 9 Months Ended |
Sep. 30, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Current Assets | 8. Other Current Assets Other current assets consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands): Schedule of Other Current Assets September 30, 2023 December 31, 2022 Prepaid expenses $ 660 $ 417 Receivable from Safehaven 2022, Inc. - 1,625 Costs incurrent in connection with initial public offering - 1,920 Unbilled accounts receivable 432 337 Other 245 248 Total $ 1,337 $ 4,547 |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, Net | 9. Property, Plant and Equipment, Net Property, plant and equipment, net consisted of the following as of September 30 2023 and December 31, 2022 (in thousands): Schedule of Property, Plant and Equipment September 30, 2023 December 31, 2022 Land $ - $ 48 Buildings and improvements (Note 12) 430 6,752 Machinery and other equipment 5,035 4,778 Office furniture and fixtures 697 675 Construction in progress 12 12 Total properties, cost 6,174 12,265 Property , plant and equipment , gross 6,174 12,265 Less: accumulated depreciation (4,652 ) (7,658 ) Property, plant and equipment, net $ 1,522 $ 4,607 |
Film and Television Programming
Film and Television Programming Rights, Net | 9 Months Ended |
Sep. 30, 2023 | |
Other Industries [Abstract] | |
Film and Television Programming Rights, Net | 10. Film and Television Programming Rights, Net Film and television programming rights, net consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands): Schedule of Film and Television Programming Rights September 30, 2023 December 31, 2022 Television series in development $ 9,933 $ 1,308 Films in development 252 193 Total film and programming rights 10,185 1,501 Accumulated amortization (1,980 ) - Total film and programming rights, net $ 8,205 $ 1,501 A rollforward of film and television programming rights, net for the nine months ended September 30, 2023, is as follows (in thousands): Schedule of Roll forward of Film and Programming Rights Balance at December 31, 2022 $ 1,501 Expenditures on in-process projects 511 Acquisition of distribution rights 8,267 Amortization of film and programming rights (1,980 ) In process projects assumed in connection with acquisition of Unbounded 10 Adjustment to fair value of warrant issued to Landmark (104 ) Balance at September 30, 2023 $ 8,205 In March 2022, Strong Studios acquired the rights to original feature films and television series from Landmark Studio Group LLC (“Landmark”), including the assignment of third party rights to content for global multiplatform distribution. The transaction entailed the acquisition of certain projects which are in varying stages of development, one of which has produced revenue as of September 30, 2023. In connection with such assignment and purchase, Strong Studios agreed to pay to Landmark approximately $ 1.7 0.3 1.7 1.0 Safehaven 0.3 Flagrant 0.4 Shadows in the Vineyard 150,000 As a condition precedent to entry into the AA Agreement, Strong Studios agreed to enter into distribution agreements for Safehaven Flagrant Safehaven 6.5 Flagrant 2.5 Flagrant Safehaven During the second quarter of 2022, Safehaven 2022, Inc. (“Safehaven 2022”) was established to manage the production and financing of Safehaven Strong Studios owned 49% of Safehaven 2022 and the remaining 51% was owned by Unbounded Services, LLC (“Unbounded Services”). Strong Studios assigned the Landmark distribution agreement to Safehaven 2022, and the Landmark distribution agreement serves as collateral for the production financing at Safehaven 2022. Effective June 23, 2023, the Company increased its ownership in Safehaven 2022 from 49% to 100%, and Safehaven 2022 became a wholly owned subsidiary of Strong Studios. Prior to acquiring 100% of Safehaven 2022 in June 2023, Strong Studios reviewed its ownership in Safehaven 2022 and concluded that it had significant influence, but not a controlling interest, in Safehaven 2022 based on its ownership being less than 50% along with having one of three representatives on the board of managers of Safehaven 2022. Strong Studios also reviewed whether it otherwise had the power to make decisions that significantly impact the economic performance of Safehaven 2022 and concluded that it did not control the entity and is not the primary beneficiary 49 100 Schedule of Balance Sheet Information Cash $ 51 Television programming rights 6,686 Other assets 29 Total assets $ 6,766 Accounts payable and accrued expenses $ 3,901 Due to Strong Studios 1,491 Debt 404 Equity 970 Total liabilities and equity $ 6,766 Effective June 30, 2023, Safehaven 2022 entered into a purchase agreement (the “Purchase Agreement”) with SMV, to purchase all of SMV’s right, title and interest in Safehaven. Under the terms of the Purchase Agreement, the purchase price payable by Safehaven 2022 was satisfied by the payment in full by Ravenwood-Productions, LLC (“Ravenwood”) of the amount due as a minimum guarantee under the Safehaven Safehaven 15.0 5 0.4 Effective June 30, 2023, the Company and Ravenwood entered into a management agreement (the “Management Agreement”), pursuant to which: ● Ravenwood advanced the amount due to Bank of Hope in respect of the minimum guarantee under the Safehaven 6.4 ● Safehaven 2022, Strong Studios and Ravenwood will enter into a sales agent agreement with an agency to represent and sell the Safehaven ● Each of Ravenwood and Strong Studios will be paid a management commission of 20 7 ● All Gross Receipts (as defined by the Management Agreement) shall be distributed according to an agreed waterfall, with the balance to be paid to the named participants, including Strong Studios which will be paid 32.5 ● Safehaven 2022 conveyed to Ravenwood an undivided 75 Safehaven 25 Safehaven 2022 recognizes revenue and cost of sales using the individual-film-forecast method based on the ratio of the current period’s revenues to management’s estimated remaining total gross revenues to be earned. During the quarter ended June 30, 2023, Safehaven 2022 recognized $ 6.4 5.4 2.0 3.4 |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | 11. Accrued Expenses Accrued expenses consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands): Schedule of Accrued Expenses September 30, 2023 December 31, 2022 Employee-related $ 1,468 $ 1,283 Warranty obligation 303 309 Interest and taxes 364 294 Legal and professional fees 379 462 Accrued participation costs 3,426 - Film and television programming rights 875 1,709 Other 511 429 Total $ 7,326 $ 4,486 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | 12. Debt Short-term debt and long-term debt consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands): Schedule of Short-Term Debt and Long-Term Debt September 30, 2023 December 31, 2022 Short-term debt: Strong/MDI 20-year installment loan $ - $ 2,289 Strong/MDI 5-year equipment loan - 221 Strong/MDI revolving credit facility 2,293 - Safehaven production debt 404 - Insurance debt 80 - Total short-term debt $ 2,777 $ 2,510 Less: deferred debt issuance costs, net - - Total short-term debt, net of issuance costs $ 2,777 $ 2,510 Long-term debt: Tenant improvement loan $ 135 $ 162 Unbounded revolving credit facility 71 - Total long-term debt $ 206 $ 162 Less: current portion (37 ) (36 ) Long-term debt, net of current portion $ 169 $ 126 Strong/MDI Installment Loans and Revolving Credit Facility On September 5, 2017, the Company’s Canadian subsidiary, Strong/MDI, entered into a demand credit agreement, as amended and restated May 15, 2018, with Canadian Imperial Bank of Commerce (“CIBC”) consisting of a revolving line of credit for up to CAD$ 3.5 20 6.0 5 0.5 2.0 20 5.1 5 0.5 0.5 4.0 In January 2023, Strong/MDI and CIBC entered into a demand credit agreement (the “2023 Credit Agreement”), which amended and restated the 2021 Credit Agreement. The 2023 Credit Agreement consists of a revolving line of credit for up to CAD$ 5.0 20 3.1 1.0 0.5 5 20 3.4 3.1 2.3 8.2 Tenant Improvement Loan During the fourth quarter of 2021, the Company entered into a lease for a combined office and warehouse in Omaha, Nebraska. The Company incurred total costs of approximately $ 0.4 50 0.2 0.1 0.2 0.1 Unbounded Credit Facility In April 2023, Unbounded and Signature Bank entered into a revolving line of credit for up to $ 0.3 8.5 Safehaven Production Debt Safehaven 2022 entered into a Loan and Security Agreement (“Loan Agreement”) with Bank of Hope to provide interim production financing for the Safehaven 9.9 6.4 Safehaven 0.4 Safehaven . Insurance Debt The Company maintains certain commercial insurance policies, including management liability and other policies customarily held by publicly traded companies. The Company elected to finance a portion of the annual premium, which will be repaid in monthly installments through January 2024. The finance agreement bears fixed interest of approximately 10 Contractual Principal Payments Contractual required principal payments on the Company’s long-term debt at September 30, 2023, are as follows (in thousands): Schedule of Contractual Principal Payments Remainder of 2023 $ 9 2024 37 2025 111 2026 42 2027 7 Thereafter - Total $ 206 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases | |
Leases | 13. Leases The Company and its subsidiaries lease plant and office facilities and equipment under operating and finance leases expiring through 2038. The Company determines if a contract is or contains a lease at inception or modification of a contract. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. Control over the use of the identified asset means the lessee has both (a) the right to obtain substantially all of the economic benefits from the use of the asset and (b) the right to direct the use of the asset. Right-of-use assets and liabilities are recognized based on the present value of future minimum lease payments over the expected lease term at commencement date. Certain of the leases contain extension options; however, the Company has not included such options as part of its right-of-use assets and lease liabilities because it does not expect to extend the leases. The Company measures and records a right-of-use asset and lease liability based on the discount rate implicit in the lease, if known. In cases where the discount rate implicit in the lease is not known, the Company measures the right-of-use assets and lease liabilities using a discount rate equal to the Company’s estimated incremental borrowing rate for loans with similar collateral and duration. The Company elected to not apply the recognition requirements of Accounting Standards Codification Topic 842, “Leases,” to leases of all classes of underlying assets that, at the commencement date, have a lease term of 12 months or less and do not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. Instead, lease payments for such short-term leases are recognized in operations on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred. The Company elected, as a lessee, for all classes of underlying assets, to not separate nonlease components from lease components and instead to account for each separate lease component and the nonlease components associated with that lease component as a single lease component. The following tables present the Company’s lease costs and other lease information (dollars in thousands): Schedule of Lease Costs and Other Lease Information September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Lease cost Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Finance lease cost: Amortization of right-of-use assets $ 50 $ - $ 113 $ - Interest on lease liabilities 21 - 47 - Operating lease cost 101 26 226 70 Short-term lease cost 14 13 45 41 Net lease cost $ 186 $ 39 $ 431 $ 111 September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Other information Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 21 $ - $ 47 $ - Operating cash flows from operating leases $ 76 $ 19 $ 143 $ 59 Financing cash flows from finance leases $ 37 $ - $ 97 $ - Right-of-use assets obtained in exchange for new finance lease liabilities $ 200 $ - $ 510 $ - Right-of-use assets obtained in exchange for new operating lease liabilities $ - $ - $ 4,576 $ - As of September 30, 2023 Weighted-average remaining lease term - finance leases (years) 1.2 Weighted-average remaining lease term - operating leases (years) 14.0 Weighted-average discount rate - finance leases 5.0 % Weighted-average discount rate - operating leases 5.0 % The following table presents a maturity analysis of the Company’s operating and finance lease liabilities as of September 30, 2023 (in thousands): Schedule of Operating and Finance Lease Liabilities Operating Leases Finance Leases Remainder of 2023 $ 123 $ 71 2024 493 284 2025 494 530 2026 496 291 2027 429 - Thereafter 4,664 - Total lease payments 6,699 1,176 Less: Amount representing interest (1,943 ) (159 ) Present value of lease payments 4,756 1,017 Less: Current maturities (278 ) (203 ) Lease obligations, net of current portion $ 4,478 $ 814 |
Income and Other Taxes
Income and Other Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income and Other Taxes | 14. Income and Other Taxes In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. The Company considers the scheduled reversal of taxable temporary differences, projected future taxable income and tax planning strategies in making this assessment. A cumulative loss in a particular tax jurisdiction in recent years is a significant piece of evidence with respect to the realizability that is difficult to overcome. Based on the available objective evidence, including recent updates to the taxing jurisdictions generating income, the Company concluded that a valuation allowance should be recorded against all of the Company’s U.S. tax jurisdiction deferred tax assets as of September 30, 2023 and December 31, 2022. Changes in tax laws may affect recorded deferred tax assets and liabilities and our effective tax rate in the future. In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted and made significant changes to Federal tax laws, including certain changes that were retroactive to the 2019 tax year. The effects of these changes relate to deferred tax assets and net operating losses; all of which are offset by valuation allowance. There were no material income tax consequences of this enacted legislation on the reporting period of these financial statements. The Company is subject to possible examinations not yet initiated for Federal purposes for the fiscal years 2020 through 2022. The Company is also subject to possible examinations for state and local purposes. In most cases, these examinations in the state and local jurisdictions remain open based on the particular jurisdiction’s statute of limitations. |
Stock Based Compensation
Stock Based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock Based Compensation | 15. Stock Based Compensation The Company recognizes compensation expense for all stock-based payment awards based on estimated grant date fair values. Stock-based compensation expense is included in selling and administrative expenses. The Company’s 2023 Share Compensation Plan (the “Plan”) was approved by the Compensation Committee of the Board of Directors with the discretion to grant stock options, stock appreciation rights, restricted shares, restricted stock units, performance shares, performance units and other stock- based awards and cash-based awards. Vesting terms vary with each grant and may be subject to vesting upon a “change in control” of the Company. As of September 30, 2023, approximately 0.5 million shares were available for issuance under the Plan. Stock Options The Company granted a total of 156,000 1.86 Schedule of Fair Value Valuation Model Expected dividend yield at date of grant 0.00 % Risk-free interest rate 3.82 % Expected stock price volatility 68.7 % Expected life of options (in years) 5.0 The following table summarizes stock option activity for the nine months ended September 30, 2023: Summary of Stock Option Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2022 - $ - - $ - Granted 156,000 3.11 Exercised - Forfeited - Expired - Outstanding at September 30, 2023 156,000 $ 3.11 9.7 $ - Exercisable at September 30, 2023 - $ - - $ - The aggregate intrinsic value in the table above represents the total that would have been received by the option holders if all in-the-money options had been exercised and sold on the date indicated. As of September 30, 2023, 156,000 0.3 4.7 Restricted Stock Units The Company estimates the fair value of restricted stock awards based upon the closing price of the underlying common stock on the date of grant. The following table summarizes restricted stock unit activity for the nine months ended September 30, 2023: Summary of Restricted Stock Units Activity Number of Restricted Stock Units Weighted Average Grant Date Fair Value Non-vested at December 31, 2022 - $ - Granted 369,000 3.77 Shares vested (195,000 ) 3.99 Shares forfeited - Non-vested at September 30, 2023 174,000 $ 3.52 As of September 30, 2023, the total unrecognized compensation cost related to non-vested restricted stock unit awards was approximately $ 0.5 2.4 |
Commitments, Contingencies and
Commitments, Contingencies and Concentrations | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies and Concentrations | 16. Commitments, Contingencies and Concentrations Litigation The Company is involved, from time to time, in certain legal disputes in the ordinary course of business. No such disputes, individually or in the aggregate, are expected to have a material effect on the Company’s business or financial condition. FG Group Holdings is named as a defendant in personal injury lawsuits based on alleged exposure to asbestos-containing materials. A majority of the cases involve product liability claims based principally on allegations of past distribution of commercial lighting products containing wiring that may have contained asbestos. Each case names dozens of corporate defendants in addition to FG Group Holdings. In FG Group Holdings’ experience, a large percentage of these types of claims have never been substantiated and have been dismissed by the courts. FG Group Holdings has not suffered any adverse verdict in a trial court proceeding related to asbestos claims and intends to continue to defend these lawsuits. Under the FG Group Holdings Asset Purchase Agreement, the Company agreed to indemnify FG Group Holdings for future losses, if any related to current product liability or personal injury claims arising out of products sold or distributed in the U.S. by the operations of the businesses being transferred to the Company in the Separation, in an aggregate amount not to exceed $ 250,000 0.3 53,000 Gain contingency The Company has carried key man life insurance covering one of its employees for several years. The covered employee passed away during the third quarter of 2023. The company completed and filed a $ 2.5 Concentrations The Company’s top ten customers accounted for approximately 43 43 10 Financial instruments that potentially expose the Company to a concentration of credit risk principally consist of accounts receivable. The Company sells product to a large number of customers in many different geographic regions. To minimize credit risk, the Company performs ongoing credit evaluations of its customers’ financial condition. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 17. Related Party Transactions Related Party Transactions In connection with the IPO, we and FG Group Holdings entered into a management services agreement that provides a framework for our ongoing relationship with FG Group Holdings. FG Group Holdings and its subsidiaries and we and our subsidiaries, provide each other certain services which include information technology, legal, finance and accounting, human resources, tax, treasury, and other services. Pursuant to the Management Services Agreement, the charges for these services are generally based on their actual cost basis. The Company manufactures its screens in an approximately 80,000 Costs Incurred in Connection with the IPO Prior to the Separation, the Company incurred $ 1.0 1.0 Working Capital Advance to Safehaven 2022 As discussed in Note 10, Safehaven 2022 has received working capital advances of $ 0.7 0.6 0.6 Landmark Transaction As discussed in Note 10, Strong Studios acquired, from Landmark, the rights to original feature films and television series, and has been assigned third party rights to content for global multiplatform distribution. In connection with such assignment and purchase, Strong Studios agreed to pay to Landmark approximately $ 1.7 0.6 1.0 0.3 0.6 0.3 0.3 |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Event | 18. Subsequent Event On November 3, 2023, the Company entered into an asset purchase agreement with Innovative Cinema Solutions, LLC (“ICS”), a full service provider of technical services and solutions to national cinema chains. The operations of ICS will be rolled into STS. The purchase price included $ 0.2 0.2 0.5 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements include the accounts of the Company and all majority-owned and controlled domestic and foreign subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. These condensed consolidated financial statements are presented in accordance with the requirements of interim financial data and consequently do not include all of the disclosures normally required by GAAP for annual reporting purposes, such as those made in the Company’s audited financial statements for the years ended December 31, 2022 and 2021. The results for interim periods are not necessarily indicative of trends or results expected for a full fiscal year. In May 2023, the Company became a standalone publicly traded company, and its financial statements post-Separation are prepared on a consolidated basis. The combined financial statements for all periods presented prior to the Separation (see below for additional information) are now also referred to as “consolidated financial statements.” In connection with the Separation, the Company’s assets and liabilities were transferred to the Company on a carry-over basis. The Company’s fiscal year begins on January 1 of the year stated and ends on December 31 of the same year. Unless otherwise indicated, all references to “dollars” and “$” in this Quarterly Report on Form 10-Q are to, and amounts are presented in, U.S. dollars. For Periods Prior to the Separation Prior to the Separation, the Company’s financial statements were derived from the consolidated financial statements and accounting records of FG Group Holdings as if Strong Global Entertainment had operated on a stand-alone basis during the periods presented and were prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) and pursuant to the regulations of the U.S. Securities and Exchange Commission. Historically, Strong Global Entertainment was reported as an operating segment within FG Group Holdings’ reportable segments and did not operate as a stand-alone company. Accordingly, FG Group Holdings historically reported the financial position and the related results of operations, cash flows and changes in equity of Strong Global Entertainment as a component of FG Group Holdings’ consolidated financial statements. Prior to the Separation, the historical results of operations included allocations of FG Group Holdings’ costs and expenses including FG Group Holdings’ corporate function which incurred a variety of expenses including, but not limited to, information technology, human resources, accounting, sales and sales operations, procurement, executive services, legal, corporate finance and communications. For periods prior to the Separation, the operating results of Strong Global Entertainment have historically been disclosed as a reportable segment within the consolidated financial statements of FG Group Holdings enabling identification of directly attributable transactional information, functional departments and headcount. The combined balance sheets were primarily derived by reference to one, or a combination, of Strong Global Entertainment transaction-level information, functional department or headcount. Revenue and Cost of revenue were derived from transactional information specific to Strong Global Entertainment products and services. Directly attributable operating expenses were derived from activities relating to Strong Global Entertainment functional departments and headcount. Certain additional costs, including compensation costs for corporate employees, have been allocated from FG Group Holdings. The allocated costs for corporate functions included, but were not limited to, information technology, legal, finance and accounting, human resources, tax, treasury, research and development, sales and marketing activities, shared facilities and other shared services, which are not provided at the Strong Global Entertainment level. These costs were allocated on a basis of revenue, headcount or other measures Strong Global Entertainment has determined as reasonable. Strong Global Entertainment employees also historically participated in FG Group Holdings’ stock-based incentive plans, in the form of restricted stock units (“RSUs”) and stock options issued pursuant to FG Group Holdings’ employee stock plan. Stock-based compensation expense has been directly reported by Strong Global Entertainment based on the awards and terms previously granted to FG Group Holdings’ employees. Allocations for management costs and corporate support services provided to Strong Global Entertainment prior to the Separation totaled $ 0.3 0.5 The operations of the Company are included in the consolidated U.S. federal, and certain state and local and foreign income tax returns filed by FG Group Holdings, where applicable. Income tax expense and other income tax related information contained in the financial statements prior to the Separation are presented on a separate return basis as if Strong Global Entertainment had filed its own tax returns. |
Use of Management Estimates | Use of Management Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results and changes in facts and circumstances may alter such estimates and affect results of operations and financial position in future periods. The coronavirus pandemic (“COVID-19”) had an unprecedented impact to consumer behaviors and our customers, particularly our customers’ ability and willingness to purchase our products and services. The Company believes that consumer reticence to engage in outside-the-home activities, caused by the risk of contracting COVID-19, has abated, and our customers have resumed more typical, pre-COVID-19 purchasing behaviors. And while we believe our customers made significant progress in its recovery from the pandemic, the impact of COVID-19 on inflation and supply chains and the continued economic recovery will be contingent upon several key factors, including the volume of new film content available, the box office performance of new film content released, the duration of the exclusive theatrical release window, and evolving consumer behavior with competition from other forms of in- and out-of-home entertainment. There can be no assurances that there will be no additional public health crises, including further resurgence or variants of COVID-19, which could reverse the current trend and have a negative impact on the Company’s results of operations. |
Cash and Cash Equivalents | Cash and Cash Equivalents All short-term, highly liquid financial instruments are classified as cash equivalents in the condensed consolidated balance sheets and statements of cash flows. Generally, these instruments have maturities of three months or less from date of purchase. As of September 30, 2023, $ 1.6 3.1 |
Accounts Receivable | Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company determines the allowance for expected credit losses based on several factors, including overall customer credit quality, historical write-off experience and a specific analysis that projects the ultimate collectability of the account. As such, these factors may change over time causing the allowance level and bad debt expense to be adjusted accordingly. Past due accounts are written off when our efforts have been unsuccessful in collecting amounts due. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. The Company uses an estimate of its annual effective rate at each interim period based on the facts and circumstances at the time while the actual effective rate is calculated at year-end. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In assessing whether the deferred tax assets are realizable, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company’s uncertain tax positions are evaluated in a two-step process, whereby 1) the Company determines whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and 2) for those tax positions that meet the more likely than not recognition threshold, the Company would recognize the largest amount of tax benefit that is greater than fifty percent likely to be realized upon ultimate settlement with the related tax authority. The Company accrues interest and penalties related to uncertain tax positions in the consolidated statements of operations as income tax expense. |
Stock Compensation Plans | Stock Compensation Plans The Company recognizes compensation expense for all stock-based payment awards based on estimated fair values on the date of grant. The Company uses the straight-line amortization method over the vesting period of the awards. The Company measures stock-based compensation at the grant date based on the fair value of the award. The fair value of stock options is estimated using the Black-Scholes option pricing model. Estimated compensation cost relating to RSUs is based on the closing fair market value of the Company’s common stock on the date of grant. No stock-based compensation cost was capitalized as a part of inventory during the periods ended September 30, 2023 and September 30, 2022. Prior to the Separation, the Company’s employees participated in FG Group Holdings’ stock-based compensation plans. Stock-based compensation expense was allocated to the Company based on the awards and terms previously granted to the FG Group Holdings’ employees. |
Film and Television Programming Rights | Film and Television Programming Rights In March 2022, the Company began producing original productions and acquiring rights to films and television programming. Film and television programming rights include the unamortized costs of in-process or in-development content produced or acquired by the Company. The Company’s capitalized costs include all direct production and financing costs, capitalized interest when applicable, and production overhead. Where available, the Company utilizes certain governmental incentives, programs and other structures from states and foreign countries (e.g., refundable tax credits calculated based on the amount of money spent in the particular jurisdiction in connection with the production) to fund its film and television productions and reduce financial risk. Film and television program rights are stated at the lower of amortized cost or estimated fair value. The costs of producing content are amortized using the individual-film-forecast method. These costs are amortized based on the ratio of the current period’s revenues to management’s estimated remaining total gross revenues to be earned (“Ultimate Revenue”) as of each reporting date to reflect the most current available information. Participation costs represent contingent consideration payable based on the performance of the film or television program to parties associated with the film or television program, including producers, writers, directors or actors and estimated liabilities for participations are accrued based on the ratio of the current period’s revenues to management’s estimated remaining total gross revenues to be earned. Management’s judgment is required in estimating Ultimate Revenue and the costs to be incurred throughout the life of each film or television program. Amortization is adjusted when necessary to reflect increases or decreases in forecasted Ultimate Revenues. For an episodic television series, the period over which Ultimate Revenues are estimated cannot exceed ten years following the date of delivery of the first episode, or, if still in production, five years from the date of delivery of the most recent episode, if later. For films, Ultimate Revenue includes estimates over a period not to exceed ten years following the date of initial release. Content assets are expected to be predominantly monetized individually and therefore are reviewed at the individual level when an event or change in circumstance indicates a change in the expected usefulness of the content or the fair value may be less than the unamortized cost. Due to the inherent uncertainties involved in making such estimates of Ultimate Revenues and expenses, these estimates may differ materially from actual results. In addition, in the normal course of our business, some films and titles will be more successful or less successful than anticipated. Management regularly reviews and revises, when necessary, its Ultimate Revenue and cost estimates, which may result in a change in the rate of amortization of film costs and participations and residuals and/or a write-down of all or a portion of the unamortized costs of the film or television program to its estimated fair value. An increase in the estimate of Ultimate Revenue will generally result in a lower amortization rate and, therefore, less film and television program amortization expense, while a decrease in the estimate of Ultimate Revenue will generally result in a higher amortization rate and, therefore, higher film and television program amortization expense, and also periodically result in an impairment requiring a write-down of the film cost to the title’s fair value. The Company has not incurred any of these write-downs. An impairment charge would be recorded in the amount by which the unamortized costs exceed the estimated fair value. Estimates of future revenue involve measurement uncertainties and it is therefore possible that reductions in the carrying value of capitalized costs may be required because of changes in management’s future revenue estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Assets and liabilities measured at fair value are categorized into a fair value hierarchy based upon the observability of inputs to the valuation of an asset or liability as of the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. The categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: ● Level 1 – inputs to the valuation techniques are quoted prices in active markets for identical assets or liabilities ● Level 2 – inputs to the valuation techniques are other than quoted prices but are observable for the assets or liabilities, either directly or indirectly ● Level 3 – inputs to the valuation techniques are unobservable for the assets or liabilities The following tables present the Company’s financial assets measured at fair value based upon the level within the fair value hierarchy in which the fair value measurements are classified, as of September 30, 2023 and December 31, 2022. Fair values measured on a recurring basis at September 30, 2023 (in thousands): Schedule of Fair Values Measured on Recurring Basis Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 3,110 $ - $ - $ 3,110 Total $ 3,110 $ - $ - $ 3,110 Fair values measured on a recurring basis at December 31, 2022 (in thousands): Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 3,615 $ - $ - $ 3,615 Total $ 3,615 $ - $ - $ 3,615 The Company’s short-term debt is recorded at historical cost. The carrying values of all other financial assets and liabilities, including accounts receivable, accounts payable, accrued expenses and short-term debt reported in the consolidated balance sheets equal or approximate their fair values due to the short-term nature of these instruments. All non-financial assets that are not recognized or disclosed at fair value in the financial statements on a recurring basis, which include non-financial long-lived assets, are measured at fair value in certain circumstances (for example, when there is evidence of impairment). |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This ASU requires the measurement of all expected credit losses for financial assets, including trade receivables, held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The Company adopted this ASU effective January 1, 2023. Upon adoption the Company recorded a cumulative effect adjustment decreasing net parent investment by $ 24,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Fair Values Measured on Recurring Basis | Fair values measured on a recurring basis at September 30, 2023 (in thousands): Schedule of Fair Values Measured on Recurring Basis Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 3,110 $ - $ - $ 3,110 Total $ 3,110 $ - $ - $ 3,110 Fair values measured on a recurring basis at December 31, 2022 (in thousands): Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 3,615 $ - $ - $ 3,615 Total $ 3,615 $ - $ - $ 3,615 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following tables disaggregate the Company’s revenue by major source and by operating segment for the three and nine months ended September 30, 2023 and 2022 (in thousands): Schedule of Disaggregation of Revenue Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended Screen system sales $ 3,914 $ 3,374 $ 10,918 $ 10,117 Digital equipment sales 3,434 3,592 10,497 9,808 Extended warranty sales 43 106 143 290 Other product sales 603 618 2,051 1,861 Total product sales 7,994 7,690 23,609 22,076 Field maintenance and monitoring services 2,008 1,708 5,811 4,975 Installation services 763 453 2,603 1,294 Strong Studios services - - 6,379 - Other service revenues 155 52 307 101 Total service revenues 2,926 2,213 15,100 6,370 Total $ 10,920 $ 9,903 $ 38,709 $ 28,446 Total Revenue $ 10,920 $ 9,903 $ 38,709 $ 28,446 |
Schedule of Disaggregation of Revenue by Timing of Transfer of Goods or Services | The following tables disaggregate the Company’s revenue by the timing of transfer of goods or services to the customer for the three and nine months ended September 30, 2023 and 2022 (in thousands): Schedule of Disaggregation of Revenue by Timing of Transfer of Goods or Services Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended Point in time $ 9,389 $ 8,587 $ 34,130 $ 24,561 Over time 1,531 1,316 4,579 3,885 Total $ 10,920 $ 9,903 $ 38,709 $ 28,446 Total revenue $ 10,920 $ 9,903 $ 38,709 $ 28,446 |
Net Income (Los) Per Share (Tab
Net Income (Los) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Net income (loss) per share: | |
Schedule of Earnings Per Share Basic and Diluted | Schedule of Earnings Per Share Basic and Diluted 2023 2022 2023 2022 Three Months Ended Nine Months Ended 2023 2022 2023 2022 Weighted average shares outstanding: Basic weighted average shares outstanding 7,272 6,000 6,613 6,000 Dilutive effect of stock options and certain non-vested restricted stock units - - - - Diluted weighted average shares outstanding 7,272 6,000 6,613 6,000 Anti-dilutive employee stock-based awards, excluded - - 38 - |
Acquisition of Unbounded Medi_2
Acquisition of Unbounded Media Corporation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Acquisition Of Unbounded Media Corporation | |
Schedule of Fair Values Assigned to Net Assets and Liabilities Assumed Acquisition | The following table summarizes the fair values assigned to the net assets acquired and the liabilities assumed as part of the acquisition of Unbounded (in thousands): Schedule of Fair Values Assigned to Net Assets and Liabilities Assumed Acquisition Cash $ 2 Accounts receivable 59 Other current assets 51 Intangible assets 10 Total identifiable assets acquired 122 Accounts payable and accrued expenses 11 Revolving credit facility 71 Total liabilities assumed 82 Net identifiable assets acquired 40 Goodwill 1,166 Net assets acquired $ 1,206 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following (in thousands): Schedule of Inventories September 30, 2023 December 31, 2022 Raw materials and components $ 1,964 $ 1,826 Work in process 496 279 Finished goods 1,137 1,284 Inventory , net $ 3,597 $ 3,389 |
Schedule of Inventory Reserve | Schedule of Inventory Reserve Inventory reserve balance at December 31, 2022 $ 486 Inventory write-offs during 2023 (57 ) Provision for inventory reserve during 2023 (47 ) Inventory reserve balance at September 30, 2023 $ 382 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Current Assets | Other current assets consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands): Schedule of Other Current Assets September 30, 2023 December 31, 2022 Prepaid expenses $ 660 $ 417 Receivable from Safehaven 2022, Inc. - 1,625 Costs incurrent in connection with initial public offering - 1,920 Unbilled accounts receivable 432 337 Other 245 248 Total $ 1,337 $ 4,547 |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment, net consisted of the following as of September 30 2023 and December 31, 2022 (in thousands): Schedule of Property, Plant and Equipment September 30, 2023 December 31, 2022 Land $ - $ 48 Buildings and improvements (Note 12) 430 6,752 Machinery and other equipment 5,035 4,778 Office furniture and fixtures 697 675 Construction in progress 12 12 Total properties, cost 6,174 12,265 Property , plant and equipment , gross 6,174 12,265 Less: accumulated depreciation (4,652 ) (7,658 ) Property, plant and equipment, net $ 1,522 $ 4,607 |
Film and Television Programmi_2
Film and Television Programming Rights, Net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Other Industries [Abstract] | |
Schedule of Film and Television Programming Rights | Film and television programming rights, net consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands): Schedule of Film and Television Programming Rights September 30, 2023 December 31, 2022 Television series in development $ 9,933 $ 1,308 Films in development 252 193 Total film and programming rights 10,185 1,501 Accumulated amortization (1,980 ) - Total film and programming rights, net $ 8,205 $ 1,501 |
Schedule of Roll forward of Film and Programming Rights | A rollforward of film and television programming rights, net for the nine months ended September 30, 2023, is as follows (in thousands): Schedule of Roll forward of Film and Programming Rights Balance at December 31, 2022 $ 1,501 Expenditures on in-process projects 511 Acquisition of distribution rights 8,267 Amortization of film and programming rights (1,980 ) In process projects assumed in connection with acquisition of Unbounded 10 Adjustment to fair value of warrant issued to Landmark (104 ) Balance at September 30, 2023 $ 8,205 |
Schedule of Balance Sheet Information | Schedule of Balance Sheet Information Cash $ 51 Television programming rights 6,686 Other assets 29 Total assets $ 6,766 Accounts payable and accrued expenses $ 3,901 Due to Strong Studios 1,491 Debt 404 Equity 970 Total liabilities and equity $ 6,766 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands): Schedule of Accrued Expenses September 30, 2023 December 31, 2022 Employee-related $ 1,468 $ 1,283 Warranty obligation 303 309 Interest and taxes 364 294 Legal and professional fees 379 462 Accrued participation costs 3,426 - Film and television programming rights 875 1,709 Other 511 429 Total $ 7,326 $ 4,486 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Short-Term Debt and Long-Term Debt | Short-term debt and long-term debt consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands): Schedule of Short-Term Debt and Long-Term Debt September 30, 2023 December 31, 2022 Short-term debt: Strong/MDI 20-year installment loan $ - $ 2,289 Strong/MDI 5-year equipment loan - 221 Strong/MDI revolving credit facility 2,293 - Safehaven production debt 404 - Insurance debt 80 - Total short-term debt $ 2,777 $ 2,510 Less: deferred debt issuance costs, net - - Total short-term debt, net of issuance costs $ 2,777 $ 2,510 Long-term debt: Tenant improvement loan $ 135 $ 162 Unbounded revolving credit facility 71 - Total long-term debt $ 206 $ 162 Less: current portion (37 ) (36 ) Long-term debt, net of current portion $ 169 $ 126 |
Schedule of Contractual Principal Payments | Contractual required principal payments on the Company’s long-term debt at September 30, 2023, are as follows (in thousands): Schedule of Contractual Principal Payments Remainder of 2023 $ 9 2024 37 2025 111 2026 42 2027 7 Thereafter - Total $ 206 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases | |
Schedule of Lease Costs and Other Lease Information | The following tables present the Company’s lease costs and other lease information (dollars in thousands): Schedule of Lease Costs and Other Lease Information September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Lease cost Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Finance lease cost: Amortization of right-of-use assets $ 50 $ - $ 113 $ - Interest on lease liabilities 21 - 47 - Operating lease cost 101 26 226 70 Short-term lease cost 14 13 45 41 Net lease cost $ 186 $ 39 $ 431 $ 111 September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Other information Three Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 21 $ - $ 47 $ - Operating cash flows from operating leases $ 76 $ 19 $ 143 $ 59 Financing cash flows from finance leases $ 37 $ - $ 97 $ - Right-of-use assets obtained in exchange for new finance lease liabilities $ 200 $ - $ 510 $ - Right-of-use assets obtained in exchange for new operating lease liabilities $ - $ - $ 4,576 $ - As of September 30, 2023 Weighted-average remaining lease term - finance leases (years) 1.2 Weighted-average remaining lease term - operating leases (years) 14.0 Weighted-average discount rate - finance leases 5.0 % Weighted-average discount rate - operating leases 5.0 % |
Schedule of Operating and Finance Lease Liabilities | The following table presents a maturity analysis of the Company’s operating and finance lease liabilities as of September 30, 2023 (in thousands): Schedule of Operating and Finance Lease Liabilities Operating Leases Finance Leases Remainder of 2023 $ 123 $ 71 2024 493 284 2025 494 530 2026 496 291 2027 429 - Thereafter 4,664 - Total lease payments 6,699 1,176 Less: Amount representing interest (1,943 ) (159 ) Present value of lease payments 4,756 1,017 Less: Current maturities (278 ) (203 ) Lease obligations, net of current portion $ 4,478 $ 814 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Fair Value Valuation Model | Schedule of Fair Value Valuation Model Expected dividend yield at date of grant 0.00 % Risk-free interest rate 3.82 % Expected stock price volatility 68.7 % Expected life of options (in years) 5.0 |
Summary of Stock Option | The following table summarizes stock option activity for the nine months ended September 30, 2023: Summary of Stock Option Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2022 - $ - - $ - Granted 156,000 3.11 Exercised - Forfeited - Expired - Outstanding at September 30, 2023 156,000 $ 3.11 9.7 $ - Exercisable at September 30, 2023 - $ - - $ - |
Summary of Restricted Stock Units Activity | Summary of Restricted Stock Units Activity Number of Restricted Stock Units Weighted Average Grant Date Fair Value Non-vested at December 31, 2022 - $ - Granted 369,000 3.77 Shares vested (195,000 ) 3.99 Shares forfeited - Non-vested at September 30, 2023 174,000 $ 3.52 |
Nature of Operations (Details N
Nature of Operations (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | ||
May 15, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | |
Number of shares issued | 5,999,999 | ||
Proceeds from issuance initial public offering | $ 2,411 | ||
IPO [Member] | |||
Proceeds from issuance initial public offering | $ 1,400 | ||
Common Class A [Member] | IPO [Member] | |||
Number of shares issued | 1,000,000 | ||
Share price | $ 4 | ||
Proceeds from issuance initial public offering | $ 1,400 | ||
Estimated offering costs | $ 2,100 |
Schedule of Fair Values Measure
Schedule of Fair Values Measured on Recurring Basis (Details) - Fair Value, Recurring [Member] - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | $ 3,110 | $ 3,615 |
Total | 3,110 | 3,615 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 3,110 | 3,615 |
Total | 3,110 | 3,615 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | ||
Total | ||
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | ||
Total |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Jan. 01, 2023 | Dec. 31, 2022 | |
Professional and Contract Services Expense | $ 300,000 | $ 500,000 | ||
Cash and cash equivalents | 3,110,000 | $ 3,615,000 | ||
Cumulative effect adjustment decreasing net parent investment | $ 14,228,000 | |||
Cumulative Effect, Period of Adoption, Adjustment [Member] | Accounting Standards Update 2016-13 [Member] | ||||
Cumulative effect adjustment decreasing net parent investment | $ 24,000 | |||
CANADA | ||||
Cash and cash equivalents | $ 1,600,000 |
Schedule of Disaggregation of R
Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | $ 10,920 | $ 9,903 | $ 38,709 | $ 28,446 |
Screen System Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 3,914 | 3,374 | 10,918 | 10,117 |
Digital Equipment Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 3,434 | 3,592 | 10,497 | 9,808 |
Extended Warranty Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 43 | 106 | 143 | 290 |
Other Product Sales [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 603 | 618 | 2,051 | 1,861 |
Product [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 7,994 | 7,690 | 23,609 | 22,076 |
Field Maintenance and Monitoring Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 2,008 | 1,708 | 5,811 | 4,975 |
Installation Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 763 | 453 | 2,603 | 1,294 |
Strong Studios Services [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 6,379 | |||
Service, Other [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 155 | 52 | 307 | 101 |
Service [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | $ 2,926 | $ 2,213 | $ 15,100 | $ 6,370 |
Schedule of Disaggregation of_2
Schedule of Disaggregation of Revenue by Timing of Transfer of Goods or Services (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 10,920 | $ 9,903 | $ 38,709 | $ 28,446 |
Transferred at Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 9,389 | 8,587 | 34,130 | 24,561 |
Transferred over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 1,531 | $ 1,316 | $ 4,579 | $ 3,885 |
Revenue (Details Narrative)
Revenue (Details Narrative) $ in Millions | Sep. 30, 2023 USD ($) |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Unearned revenue | $ 0.8 |
Remainder of 2023 [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Unearned revenue | 0.7 |
Immaterial 2024 [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Unearned revenue | $ 0.1 |
Schedule of Earnings Per Share
Schedule of Earnings Per Share Basic and Diluted (Details) - USD ($) shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Weighted average shares outstanding: | ||||
Basic weighted average shares outstanding | 7,272 | 6,000 | 6,613 | 6,000 |
Dilutive effect of stock options and certain non-vested restricted stock units | ||||
Diluted weighted average shares outstanding | 7,272 | 6,000 | 6,613 | 6,000 |
Anti-dilutive employee stock-based awards, excluded | 38 |
Net Income (Los) Per Share (Det
Net Income (Los) Per Share (Details Narrative) | 9 Months Ended |
Sep. 30, 2023 shares | |
Net income (loss) per share: | |
Stock issued during period of common stock | 5,999,999 |
Shares held for common stock | 6,000,000 |
The Separation and Initial Pu_2
The Separation and Initial Public Offering (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | ||
May 15, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | |
Number of shares issued | 5,999,999 | ||
Proceeds from issuance initial public offering | $ 2,411 | ||
IPO [Member] | |||
Proceeds from issuance initial public offering | $ 1,400 | ||
Common Class A [Member] | IPO [Member] | |||
Number of shares issued | 1,000,000 | ||
Share price | $ 4 | ||
Proceeds from issuance initial public offering | $ 1,400 | ||
Estimated offering costs | $ 2,100 |
Schedule of Fair Values Assigne
Schedule of Fair Values Assigned to Net Assets and Liabilities Assumed Acquisition (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Sep. 12, 2023 | Dec. 31, 2022 |
Acquisition Of Unbounded Media Corporation | |||
Cash | $ 2 | ||
Accounts receivable | 59 | ||
Other current assets | 51 | ||
Intangible assets | 10 | ||
Total identifiable assets acquired | 122 | ||
Accounts payable and accrued expenses | 11 | ||
Revolving credit facility | 71 | ||
Total liabilities assumed | 82 | ||
Net identifiable assets acquired | 40 | ||
Goodwill | $ 2,049 | 1,166 | $ 882 |
Net assets acquired | $ 1,206 |
Acquisition of Unbounded Medi_3
Acquisition of Unbounded Media Corporation (Details Narrative) shares in Millions | Sep. 12, 2023 shares |
Acquisition Of Unbounded Media Corporation | |
Stock issued during period, acquisition | 0.6 |
Schedule of Inventories (Detail
Schedule of Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials and components | $ 1,964 | $ 1,826 |
Work in process | 496 | 279 |
Finished goods | 1,137 | 1,284 |
Inventory , net | $ 3,597 | $ 3,389 |
Schedule of Inventory Reserve (
Schedule of Inventory Reserve (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Inventory Disclosure [Abstract] | |
Inventory reserve balance at December 31, 2022 | $ 486 |
Inventory write-offs during 2023 | (57) |
Provision for inventory reserve during 2023 | (47) |
Inventory reserve balance at September 30, 2023 | $ 382 |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Inventory, net of reserves | $ 0.4 | $ 0.5 |
Schedule of Other Current Asset
Schedule of Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 660 | $ 417 |
Receivable from Safehaven 2022, Inc. | 1,625 | |
Costs incurrent in connection with initial public offering | 1,920 | |
Unbilled accounts receivable | 432 | 337 |
Other | 245 | 248 |
Total | $ 1,337 | $ 4,547 |
Schedule of Property, Plant and
Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property , plant and equipment , gross | $ 6,174 | $ 12,265 |
Less: accumulated depreciation | (4,652) | (7,658) |
Property, plant and equipment, net | 1,522 | 4,607 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property , plant and equipment , gross | 48 | |
Building Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property , plant and equipment , gross | 430 | 6,752 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property , plant and equipment , gross | 5,035 | 4,778 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property , plant and equipment , gross | 697 | 675 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property , plant and equipment , gross | $ 12 | $ 12 |
Schedule of Film and Television
Schedule of Film and Television Programming Rights (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Other Industries [Abstract] | ||
Television series in development | $ 9,933 | $ 1,308 |
Films in development | 252 | 193 |
Total film and programming rights | 10,185 | 1,501 |
Accumulated amortization | (1,980) | |
Total film and programming rights, net | $ 8,205 | $ 1,501 |
Schedule of Roll forward of Fil
Schedule of Roll forward of Film and Programming Rights (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Other Industries [Abstract] | |
Film and television programming rights, beginning | $ 1,501 |
Expenditures on in-process projects | 511 |
Acquisition of distribution rights | 8,267 |
Amortization of film and programming rights | (1,980) |
In process projects assumed in connection with acquisition of Unbounded | 10 |
Adjustment to fair value of warrant issued to Landmark | (104) |
Film and television programming rights, ending | $ 8,205 |
Schedule of Balance Sheet Infor
Schedule of Balance Sheet Information (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Other assets | $ 1,337 | $ 4,547 |
Total assets | 32,962 | 25,538 |
Due to Strong Studios | 525 | 6 |
Equity | 9,326 | 9,204 |
Total liabilities and equity | 32,962 | $ 25,538 |
Safehaven 2022 [Member] | ||
Cash | 51 | |
Television programming rights | 6,686 | |
Other assets | 29 | |
Total assets | 6,766 | |
Accounts payable and accrued expenses | 3,901 | |
Debt | 404 | |
Equity | 970 | |
Total liabilities and equity | 6,766 | |
Safehaven 2022 [Member] | Related Party [Member] | ||
Due to Strong Studios | $ 1,491 |
Film and Television Programmi_3
Film and Television Programming Rights, Net (Details Narrative) - USD ($) $ in Millions | 1 Months Ended | 6 Months Ended | 9 Months Ended |
Mar. 31, 2022 | Jun. 30, 2023 | Sep. 30, 2023 | |
Equity ownership percent description | Strong Studios owned 49% of Safehaven 2022 and the remaining 51% was owned by Unbounded Services, LLC (“Unbounded Services”). Strong Studios assigned the Landmark distribution agreement to Safehaven 2022, and the Landmark distribution agreement serves as collateral for the production financing at Safehaven 2022. Effective June 23, 2023, the Company increased its ownership in Safehaven 2022 from 49% to 100%, and Safehaven 2022 became a wholly owned subsidiary of Strong Studios. | ||
Payments to Acquire Intangible Assets | $ 15 | ||
[custom:NetProccedsOfIntangibleAssetsPercentage] | 5% | ||
Proceeds from Sale of Intangible Assets | $ 0.4 | ||
Ravenwood Productions LLC [Member] | |||
Proceeds from Bank Debt | $ 6.4 | ||
Commission percentage | 20% | ||
Strong Studios [Member] | |||
Commission percentage | 7% | ||
Gross receipt percentage | 32.50% | ||
Safehaven [Member] | |||
Subsidiary, ownership percentage, noncontrolling owner | 25% | ||
Safehaven 2022 [Member] | Minimum [Member] | |||
Ownership percentage | 49% | ||
Safehaven 2022 [Member] | Maximum [Member] | |||
Ownership percentage | 100% | ||
Safehaven [Member] | |||
Ownership percentage | 75% | ||
Safehaven 2022 [Member] | |||
Equity ownership percent description | Prior to acquiring 100% of Safehaven 2022 in June 2023, Strong Studios reviewed its ownership in Safehaven 2022 and concluded that it had significant influence, but not a controlling interest, in Safehaven 2022 based on its ownership being less than 50% along with having one of three representatives on the board of managers of Safehaven 2022. Strong Studios also reviewed whether it otherwise had the power to make decisions that significantly impact the economic performance of Safehaven 2022 and concluded that it did not control the entity and is not the primary beneficiary | ||
Landmark Studio Group [Member] | |||
Business acquisition purchase price | $ 1.7 | $ 1.7 | |
Business acquisition transaction costs | $ 0.3 | ||
Warrants to purchase shares | 150,000 | ||
Landmark Studio Group [Member] | Safehaven, Flagrant and Shadows in the Vineyard [Member] | |||
Business acquisition purchase price | $ 1.7 | ||
Landmark Studio Group [Member] | Safehaven [Member] | |||
Business acquisition purchase price | 1 | ||
Landmark Studio Group [Member] | Flagrant [Member] | |||
Business acquisition purchase price | 0.3 | ||
Landmark Studio Group [Member] | Shadows in the Vineyard [Member] | |||
Business acquisition purchase price | 0.4 | ||
Screen Media Ventures LLC [Member] | Safehaven [Member] | AA Distribution Agreements [Member] | |||
Business acquisition purchase price | 6.5 | ||
Screen Media Ventures LLC [Member] | Flagrant [Member] | AA Distribution Agreements [Member] | |||
Business acquisition purchase price | $ 2.5 | ||
Safehaven [Member] | |||
Revenues | $ 6.4 | ||
Expenses of intellectual property | 5.4 | ||
Amortization | 2 | ||
[custom:AccruedParticipationCost] | $ 3.4 |
Schedule of Accrued Expenses (D
Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Employee-related | $ 1,468 | $ 1,283 |
Warranty obligation | 303 | 309 |
Interest and taxes | 364 | 294 |
Legal and professional fees | 379 | 462 |
Accrued participation costs | 3,426 | |
Film and television programming rights | 875 | 1,709 |
Other | 511 | 429 |
Total | $ 7,326 | $ 4,486 |
Schedule of Short-Term Debt and
Schedule of Short-Term Debt and Long-Term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Short-Term Debt [Line Items] | ||
Total short-term debt, net of issuance costs | $ 2,777 | $ 2,510 |
Total short-term debt | 2,777 | 2,510 |
Less: deferred debt issuance costs, net | ||
Total long-term debt | 206 | 162 |
Less: current portion | (37) | (36) |
Long-term debt, net of current portion | 169 | 126 |
Tenant Improvement Loan [Member] | ||
Short-Term Debt [Line Items] | ||
Total long-term debt | 135 | 162 |
Revolving Credit Facility [Member] | ||
Short-Term Debt [Line Items] | ||
Total long-term debt | 71 | |
Twenty Year Installment Loan [Member] | ||
Short-Term Debt [Line Items] | ||
Total short-term debt, net of issuance costs | 2,289 | |
Five Year Equipment Loan [Member] | ||
Short-Term Debt [Line Items] | ||
Total short-term debt, net of issuance costs | 221 | |
Revolving Credit Facility [Member] | ||
Short-Term Debt [Line Items] | ||
Total short-term debt, net of issuance costs | 2,293 | |
Safehaven Production Debt [Member] | ||
Short-Term Debt [Line Items] | ||
Total short-term debt, net of issuance costs | 404 | |
Insurance Debt [Member] | ||
Short-Term Debt [Line Items] | ||
Total short-term debt, net of issuance costs | $ 80 |
Schedule of Contractual Princip
Schedule of Contractual Principal Payments (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Total | $ 206 | $ 162 |
Contractual Principal Payments [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Remainder of 2023 | 9 | |
2024 | 37 | |
2025 | 111 | |
2026 | 42 | |
2027 | 7 | |
Thereafter | ||
Total | $ 206 |
Debt (Details Narrative)
Debt (Details Narrative) $ in Thousands, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||
Apr. 30, 2023 USD ($) | Jun. 07, 2021 CAD ($) | May 15, 2018 CAD ($) | Jan. 31, 2023 CAD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 CAD ($) | Jul. 31, 2023 USD ($) | Jun. 30, 2023 USD ($) | May 31, 2023 CAD ($) | Dec. 31, 2022 USD ($) | |
Line of Credit Facility [Line Items] | |||||||||||||||
Bears variable interest rate | 8.20% | 8.20% | 8.20% | ||||||||||||
Lease cost | $ 186 | $ 39 | $ 400 | $ 431 | $ 111 | ||||||||||
Loan percentage | 50% | ||||||||||||||
Total costs to build out facility | $ 200 | $ 200 | |||||||||||||
Loan amount | $ 100 | $ 100 | |||||||||||||
Short term borrowings | $ 2,777 | $ 2,777 | $ 2,510 | ||||||||||||
Insurance Debt [Member] | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Bears variable interest rate | 10% | 10% | 10% | ||||||||||||
Short term borrowings | $ 80 | $ 80 | |||||||||||||
Loan Agreement [Member] | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Short term borrowings | $ 6,400 | $ 9,900 | |||||||||||||
Working capital | $ 400 | ||||||||||||||
Revolving Credit Facility [Member] | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Revolving line of credit | $ 2,300 | $ 2,300 | $ 3.1 | ||||||||||||
Installment loan term | 5 years | 5 years | 5 years | ||||||||||||
Debt installment payment | $ 0.5 | $ 0.5 | |||||||||||||
Interest rate | 0.50% | ||||||||||||||
Revolving Credit Facility [Member] | Line of Credit [Member] | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Interest rate | 1% | ||||||||||||||
Revolving Credit Facility [Member] | Line of Credit [Member] | Prime Rate [Member] | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Interest rate | 0.50% | ||||||||||||||
Revolving Credit Facility [Member] | Related Party [Member] | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Due from related parties | $ 4 | ||||||||||||||
Revolving Credit Facility [Member] | Demand Credit Agreement [Member] | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Revolving line of credit | $ 2 | $ 3.5 | $ 5 | $ 3.4 | |||||||||||
Installment loan term | 20 years | 20 years | 20 years | ||||||||||||
Debt installment payment | $ 5.1 | $ 6 | $ 3.1 | ||||||||||||
Unbounded Credit Facility [Member] | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Revolving line of credit | $ 300 | ||||||||||||||
Interest rate | 8.50% |
Schedule of Lease Costs and Oth
Schedule of Lease Costs and Other Lease Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | |
Leases | |||||
Amortization of right-of-use assets | $ 50 | $ 113 | |||
Interest on lease liabilities | 21 | 47 | |||
Operating lease cost | 101 | 26 | 226 | 70 | |
Short-term lease cost | 14 | 13 | 45 | 41 | |
Net lease cost | 186 | 39 | $ 400 | 431 | 111 |
Operating cash flows from finance leases | 21 | 47 | |||
Operating cash flows from operating leases | 76 | 19 | 143 | 59 | |
Financing cash flows from finance leases | 37 | 97 | |||
Right-of-use assets obtained in exchange for new finance lease liabilities | 200 | 510 | |||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 4,576 | ||||
Weighted-average remaining lease term - finance leases (years) | 1 year 2 months 12 days | 1 year 2 months 12 days | |||
Weighted-average remaining lease term - operating leases (years) | 14 years | 14 years | |||
Weighted-average discount rate - finance leases | 5% | 5% | |||
Weighted-average discount rate - operating leases | 5% | 5% |
Schedule of Operating and Finan
Schedule of Operating and Finance Lease Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Lessee, Operating Lease, Liability, to be Paid, Fiscal Year Maturity [Abstract] | ||
Operating leases Remainder of 2023 | $ 123 | |
Operating leases 2024 | 493 | |
Operating leases 2025 | 494 | |
Operating leases 2026 | 496 | |
Operating leases 2027 | 429 | |
Operating leases Thereafter | 4,664 | |
Operating leases Thereafter | 6,699 | |
Operating leases Less: Amount representing interest | (1,943) | |
Present value of lease payments | 4,756 | |
Operating leases Less: Current maturities | (278) | $ (64) |
Lease obligations, net of current portion | 4,478 | 234 |
Finance Lease, Liability, to be Paid, Fiscal Year Maturity [Abstract] | ||
Finance leases Remainder of 2023 | 71 | |
Finance leases 2024 | 284 | |
Finance leases 2025 | 530 | |
Finance leases 2026 | 291 | |
Finance leases 2027 | ||
Finance leases Thereafter | ||
Finance leases Total lease payments | 1,176 | |
Finance leases Less: Amount representing interest | (159) | |
Present value of lease payments | 1,017 | |
Finance leases Less: Current maturities | (203) | (105) |
Lease obligations, net of current portion | $ 814 | $ 502 |
Schedule of Fair Value Valuatio
Schedule of Fair Value Valuation Model (Details) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Expected dividend yield at date of grant | 0% |
Risk-free interest rate | 3.82% |
Expected stock price volatility | 68.70% |
Expected life of options (in years) | 5 years |
Summary of Stock Option (Detail
Summary of Stock Option (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Jun. 05, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | |||
Options, Outstanding, Beginning Balance | |||
Weighted average exercise price per share, Beginning Balance | |||
Weighted average remaining contractual term (Years), Ending Balance | 9 years 8 months 12 days | 0 years | |
Aggregate intrinsic value, Beginning Balance | |||
Granted | 156,000 | ||
Weighted average exercise price per share, granted | $ 1.86 | $ 3.11 | |
Exercised | |||
Forfeited | |||
Expired | |||
Options, Outstanding, Ending Balance | 156,000 | ||
Weighted average exercise price per share, Ending Balance | $ 3.11 | ||
Aggregate intrinsic value, Ending Balance | |||
Exercisable, Outstanding Balance | |||
Weighted average exercise price per share Exercisable, Ending Balance | |||
Weighted average remaining contractual term (Years) Exercisable, Ending Balance | 0 years | ||
Aggregate intrinsic value Exercisable, Ending Balance |
Summary of Restricted Stock Uni
Summary of Restricted Stock Units Activity (Details) shares in Thousands | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Share-Based Payment Arrangement [Abstract] | |
Non vested, beginning balance | |
Weighted average grant date fair value, beginning balance | $ / shares | |
Granted | 369,000 |
Weighted average grant date fair value, Granted | $ / shares | $ 3.77 |
Shares vested | (195,000) |
Weighted average grant date fair value, Granted | $ / shares | $ 3.99 |
Shares forfeited | |
Non vested, ending balance | 174,000 |
Weighted average grant date fair value, ending balance | $ / shares | $ 3.52 |
Stock Based Compensation (Detai
Stock Based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | |
Jun. 05, 2023 | Sep. 30, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Common stock granted | 156,000 | |
weighted average grant per share | $ 1.86 | $ 3.11 |
Stock option non vested | 156,000 | |
Unrecognized compensation cost | $ 0.3 | |
Weighted average period | 4 years 8 months 12 days | |
Restricted Stock Units (RSUs) [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Unrecognized compensation cost | $ 0.5 | |
Weighted average period | 2 years 4 months 24 days |
Commitments, Contingencies an_2
Commitments, Contingencies and Concentrations (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended |
Oct. 31, 2023 | Sep. 30, 2023 | |
Product Information [Line Items] | ||
Legal fees | $ 250,000 | |
Loss contingency accrual | 300,000 | |
Loss contingency accrual payments | $ 53,000 | |
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | 10 Customer [Member] | ||
Product Information [Line Items] | ||
Concentration risk percentage | 43% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | 10 Customer [Member] | ||
Product Information [Line Items] | ||
Concentration risk percentage | 43% | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | 10 Customer [Member] | ||
Product Information [Line Items] | ||
Concentration risk percentage | 10% | |
Subsequent Event [Member] | ||
Product Information [Line Items] | ||
Gain contingency | $ 2,500,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) $ in Millions | 1 Months Ended | 9 Months Ended | |
Mar. 31, 2022 USD ($) | Sep. 30, 2023 USD ($) ft² | Nov. 14, 2023 USD ($) | |
FG Group Holdings [Member] | |||
Related Party Transaction [Line Items] | |||
Working capital received | $ 0.6 | ||
Payable to related party | 0.3 | ||
Business acquisition transaction costs | 0.6 | ||
Debt installment payment | 1 | ||
Reimbursement to related party | 0.6 | ||
Remaining payable to related party | 0.3 | ||
FG Group Holdings [Member] | Subsequent Event [Member] | |||
Related Party Transaction [Line Items] | |||
Remaining payable to related party | $ 0.3 | ||
Landmark Studio Group [Member] | |||
Related Party Transaction [Line Items] | |||
Business acquisition purchase price | $ 1.7 | 1.7 | |
Business acquisition transaction costs | $ 0.3 | ||
Safehaven 2022 [Member] | FG Group Holdings [Member] | |||
Related Party Transaction [Line Items] | |||
Payable to related party | 0.6 | ||
IPO [Member] | |||
Related Party Transaction [Line Items] | |||
Other liabilities current | 1 | ||
FG Group Holdings [Member] | |||
Related Party Transaction [Line Items] | |||
Other liabilities current | 1 | ||
FG Group Holdings [Member] | Safehaven 2022 [Member] | |||
Related Party Transaction [Line Items] | |||
Working capital | $ 0.7 | ||
Management Service Agreement [Member] | FG Group Holdings [Member] | IPO [Member] | |||
Related Party Transaction [Line Items] | |||
Area of land | ft² | 80,000 |
Subsequent Event (Details Narra
Subsequent Event (Details Narrative) - Subsequent Event [Member] - Innovative Cinema Solutions LLC [Member] $ in Millions | Nov. 03, 2023 USD ($) |
Asset Purchase Agreement [Member] | Promissory Note [Member] | |
Subsequent Event [Line Items] | |
Payments of debt issuance costs | $ 0.5 |
Asset Purchase Agreement [Member] | |
Subsequent Event [Line Items] | |
Payments to acquire businesses, gross | 0.2 |
Asset Purchase Agreement [Member] | Common Stock [Member] | |
Subsequent Event [Line Items] | |
Payments of stock issuance costs | $ 0.2 |