| Summary of Significant Accounting Policies | 2.
Summary of Significant Accounting Policies Basis
of Presentation and Principles of Consolidation 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. The
condensed consolidated financial statements included in this report are presented in accordance with the requirements of Form 10-Q and
consequently do not include all of the disclosures normally required by accounting principles generally accepted in the United States
of America (also referred to as “GAAP”) for annual reporting purposes or those made in the Company’s Annual Report
on Form 10-K. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements
and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021. The
condensed consolidated balance sheet as of December 31, 2021, was derived from the Company’s audited consolidated balance
sheet as of that date. All other condensed consolidated financial statements contained herein are unaudited and, in the opinion of management,
reflect all adjustments of a normal recurring nature necessary to present a fair statement of the financial position and the results
of operations and cash flows for the respective interim periods. Certain prior period balances have been reclassified to conform to current
period presentation. The results for interim periods are not necessarily indicative of trends or results expected for a full 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. 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. Uncertainty
remains surrounding the COVID-19 global pandemic and the extent and duration of the impacts that it may have on the Company, as well
as its customers, suppliers, and employees. While cinema and theme park operators in the United States and other parts of the world are
in various stages of returning to “normal”, there continue to be spikes in COVID-19 cases and new variants in various parts
of the world that could impact the pace of recovery in our markets. Accordingly, there continues to be a heightened potential for future
reserves against trade receivables, inventory write downs, and impairments of long-lived assets, goodwill, intangible assets and equity
holdings. In the current environment, assumptions about future financial and operational performance, supply chain pricing and availability
and customer creditworthiness have greater variability than normal, which could in the future significantly affect the valuation of the
Company’s assets, both financial and non-financial. As an understanding of the longer-term impacts of COVID-19 on the Company’s
customers and business develops, there is heightened potential for changes in these views over the remainder of 2022, and potentially
beyond. 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 March 31, 2022, $ 2.1 8.1 Restricted
Cash Restricted
cash represents amounts held in a collateral account for the Company’s corporate travel and purchasing credit card program. Accounts
Receivable Trade
accounts receivable are recorded at the invoiced amount and do not bear interest. The Company determines the allowance for doubtful accounts
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. Equity
Holdings The
Company accounts for its equity holdings using the equity method, at cost, or at fair value depending on the facts and circumstances
related to each individual holding. The Company applies the equity method of accounting to its holdings when it has significant influence,
but not controlling interest, in the entity. Judgment regarding the level of influence over each equity method holding includes considering
key factors such as ownership interest, representation on the board of directors, participation in policy-making decisions and material
intercompany transactions. The Company’s proportionate share of the net loss resulting from these equity holdings is reported under
the line item captioned “equity method holding loss” in our condensed consolidated statements of operations. The Company’s
equity method holdings are reported at cost and adjusted each period for the Company’s share of the entity’s income or loss
and dividends paid, if any. The Company’s share of the entity’s income or loss is recorded on a one quarter lag for all equity
method holdings. The Company classifies distributions received from equity method holdings using the cumulative earnings approach on
the condensed consolidated statements of cash flows. Changes
in fair value of holdings in marketable equity securities of unconsolidated entities in which the Company is not able to exercise significant
influence (“Fair Value Holdings”) are recognized on the consolidated statement of operations. Equity holdings in nonmarketable
unconsolidated entities in which the Company is not able to exercise significant influence (“Cost Method Holdings”) are accounted
for at the Company’s initial cost, minus any impairment (if any), plus or minus changes resulting from observable price changes
in orderly transactions for the identical or a similar holding or security of the same issuer. Dividends on fair value holdings and cost
method holdings received are recorded as income. The
Company assesses its equity holdings for impairment whenever events or changes in circumstances indicate that the carrying value of an
equity holding may not be recoverable. Management reviewed the underlying net assets of the Company’s equity method holding as
of March 31, 2022 and determined that the Company’s proportionate economic interest in the entity indicates that the equity holding
was not impaired. There were no observable price changes in orderly transactions for identical or a similar holding or security of the
Company’s Cost Method Holding during the three months ended March 31, 2022. The carrying value of our equity method, fair value
method and cost method holdings is reported as “equity holdings” on the consolidated balance sheets. Notes 3 and 7 contain
additional information on our equity method, fair value method and cost method holdings. 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 March 31, 2022 and December 31, 2021. Fair
values measured on a recurring basis at March 31, 2022 (in thousands): Schedule of Fair Value Measured Financial Assets and Liabilities
Level 1 Level 2 Level 3 Total
Cash and cash equivalents $ 8,133 $ - $ - $ 8,133
Restricted cash 150 - - 150
Fair value method equity holding 24,387 - - 24,387
Total $ 32,670 $ - $ - $ 32,670 Fair
values measured on a recurring basis at December 31, 2021 (in thousands):
Level 1 Level 2 Level 3 Total
Cash and cash equivalents $ 8,731 $ - $ - $ 8,731
Restricted cash 150 - - 150
Fair value method equity holding 22,467 - - 22,467
Total $ 31,348 $ - $ - $ 31,348 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. Based on quoted market prices, the combined fair value of the Company’s equity method and fair value method holdings
was $ 29.1 million
at March 31, 2022 (see Note 7). Recently Issued 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 will require 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 guidance was initially effective
for the Company for annual reporting periods beginning after December 15, 2019 and interim periods within those fiscal years. In November
2019, the FASB issued ASU 2019-10, “Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815),
and Leases (Topic 842): Effective Dates,” which, among other things, defers the effective date of ASU 2016-13 for public filers
that are considered smaller reporting companies as defined by the Securities and Exchange Commission to fiscal years beginning after
December 15, 2022, including interim periods within those years. Early adoption is permitted. The Company believes the adoption of this
ASU will not significantly impact its results of operations and financial position. |
