# CuriosityStream Inc.: Form 10-Q for the period ended Mar 31, 2024

- Company: [CuriosityStream Inc.](/companies/curi.md) (CIK 1776909)
- Form: 10-Q
- Filed: 2024-05-08
- Accepted by EDGAR: May 8, 2024, 14:40 ET
- Period: 2024-03-31
- Accession: 0001628280-24-021589
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1776909/000162828024021589/curi-20240331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1776909/000162828024021589/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-01-01 to 2024-03-31 | $12.0m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Operating income | 3 months, 2024-01-01 to 2024-03-31 | −$3.7m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2024-01-01 to 2024-03-31 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-01-01 to 2024-03-31 | −$5.0m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-01-01 to 2024-03-31 | −$0.09 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-01-01 to 2024-03-31 | −$0.09 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-01-01 to 2024-03-31 | 53,301,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2024-01-01 to 2024-03-31 | $666.0k | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2024-01-01 to 2024-03-31 | $0 | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2024-03-31 | $38.8m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-03-31 | $45.6m | us-gaap:AssetsCurrent |
| Total assets | at 2024-03-31 | $94.6m | us-gaap:Assets |
| Current liabilities | at 2024-03-31 | $22.8m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-03-31 | $27.6m | us-gaap:Liabilities |
| Shareholders' equity | at 2024-03-31 | $67.0m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 30,037 characters.

The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of our results of operations and financial condition. The following discussion should be read in conjunction with the Company’s unaudited consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q. Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “we,” “us,” “our,” and “the Company” are intended to mean the business and operations of CuriosityStream Inc.

### CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains certain statements that are, or may deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding the Company’s plans, expectations, thoughts, beliefs, estimates, goals and outlook for the future that are intended to be covered by the protections provided under the Private Securities Litigation Reform Act of 1995.

All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q including, without limitation, statements under this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, such as subscription plan price increases, the development of integrated digital brand partnerships with advertisers and our dividend plans, are forward-looking statements. When used in this Quarterly Report on Form 10-Q, words such as “anticipate,” “attribute,” “believe,” “continue,” “hope,” “estimate,” “expect,” “intend,” “may,” “might,” “potential,” “seek,” “should,” “will” and “would,” and similar expressions, as they relate to us or the Company’s management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company’s management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on the Company’s behalf are qualified in their entirety by this paragraph. These forward-looking statements are subject to risks and uncertainties that could cause actual results and events to differ materially from those included in forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 25, 2024 (the “Annual Report”) and any other subsequent periodic reports and future periodic reports. We assume no obligation to revise or publicly release any revision to any forward-looking statements contained in this Quarterly Report on Form 10-Q, unless required by law.

### OVERVIEW

Founded by John Hendricks, founder of the Discovery Channel and former Chairman of Discovery Communications, CuriosityStream is a media and entertainment company that offers premium video and audio programming across the principal categories of factual entertainment, including science, history, society, nature, lifestyle and technology. Our mission is to provide premium factual entertainment that informs, enchants and inspires.

We seek to meet demand for high-quality factual entertainment via subscription video on-demand (“SVOD”) platforms, content licensing, bundled content licenses for SVOD and linear offerings, talks and courses and partner bulk sales.

The main sources of our revenue are:

1\. Subscription and license fees earned from our Direct-to-Consumer business and Partner Direct subscribers ("Direct Business"),

2\. License fees from content licensing arrangements ("Content Licensing"),

3\. Bundled license fees from distribution affiliates (“Bundled Distribution”),

4\. Subscriber fees from our Enterprise business ("Enterprise"), and

5\. Other revenue, including advertising and sponsorships ("Other").

We operate our business as a single operating segment that provides premium streaming content through multiple channels, including the use of various applications, partnerships and affiliate relationships.

CuriosityStream’s award-winning content library features more than 16,000 programs that explore topics ranging from space engineering to ancient history to the rise of Wall Street and includes shows and series from leading nonfiction producers. Our library includes:

- An extensive catalog of originally produced and owned content of approximately 10,000 short-, mid- and long-form video and audio titles, including Curiosity University recorded lectures that are led by some of the most acclaimed college and university professors in the world.
- A rotating catalog of nearly 6,000 internationally licensed videos and audio programs.
- More than 6,000 on-demand and ad-free productions available on-demand through our SVOD offerings.

Each week we launch new video titles, which are available on-demand in high- or ultra-high definition. Through new and long-standing international partnerships, we have localized a large portion of our video library from English to ten different languages.

### RESULTS OF OPERATIONS

The financial data in the following table sets forth selected financial information derived from our unaudited consolidated financial statements for three months ended March 31, 2024, and 2023, and includes our results of operations as a percentage of revenue or as a percentage of costs, as applicable, for the periods indicated:

*(Unaudited and in thousands)*

| Revenues | Three Months Ended March 31, 2024 | 2023 | Change Total% |  |
| --- | ---: | ---: | ---: | ---: |
| Direct Business | $9,530 | $8,582 | $948 | 11% |
| Content Licensing | 1,164 | 2,018 | (854) | (42%) |
| Bundled Distribution | 1,142 | 1,416 | (274) | (19%) |
| Enterprise | 68 | 97 | (29) | n/m |
| Other | 97 | 274 | (177) | (65%) |
| Total revenue | 12,001 | 12,387 | (386) | (3%) |
| **Operating expenses** |  |  |  |  |
| Cost of revenues | 6,748 | 9,001 | (2,253) | (25%) |
| Advertising and marketing | 3,105 | 3,115 | (10) | —% |
| General and administrative | 5,802 | 8,059 | (2,257) | (28%) |
| **Total operating expenses** | 15,655 | 20,175 | (4,520) | (22%) |
| Operating loss | (3,654) | (7,788) | 4,134 | (53%) |
| **Other income (expense)** |  |  |  |  |
| Change in fair value of warrant liability | (30) | (74) | 44 | n/m |
| Interest and other income (expense) | 439 | 388 | 51 | n/m |
| Equity method investment loss | (1,756) | (219) | (1,537) | 702% |
| **Loss before income taxes** | $(5,001) | $(7,693) | $2,692 | (35%) |
| Provision for income taxes | 34 | 58 | (24) | n/m |
| **Net loss** | $(5,035) | $(7,751) | $2,716 | (35%) |
| \* n/m = percentage not meaningful |  |  |  |  |

For the three months ended March 31, 2024, and 2023, operating loss was $3.7 million and $7.8 million, respectively. The decline in operating loss of $4.1 million, or 53%, primarily resulted from the decreases to our operating expenses of $4.5 million, or 22%, which more than offset the decline in revenues of $0.4 million, or 3%, compared to the three months ended March 31, 2023.

For the three months ended March 31, 2024, and 2023, net loss was $5.0 million and $7.8 million, respectively, a decrease in net loss of $2.7 million, or 35%.

Our future operating results and cash flows are dependent upon a number of opportunities, challenges, and other factors, including our ability to efficiently grow our subscriber base, increase our prices and expand our service offerings to maximize subscriber lifetime value.

### Revenue

Since the Company was founded in 2015, we have generated the majority of our revenues from consumers directly accessing our content in the form of monthly or annual subscription plans.

For the three months ended March 31, 2024, and 2023, revenues totaled $12.0 million and $12.4 million, respectively, a decrease of $0.4 million, or 3%. This decline was primarily driven by declines in Content Licensing and Bundled Distribution of $0.9 million and $0.3 million, respectively, while our Direct Business revenue increased by $0.9 million.

### Direct Business

Our Direct Business revenue is derived from consumers subscribing directly through our O&O Consumer Service and App Services and through Partner Direct relationships. Our O&O Consumer Service is available in more than 175 countries to any household with a broadband connection. Our App Services enable access to CuriosityStream on almost every major consumer device, including streaming media players like Roku, Apple TV and Amazon Fire TV, major smart TV brands (e.g., LG, Vizio, Samsung) and gaming consoles.

We are currently in the process of raising the prices for our legacy subscribers in our U.S. dollar-based markets, which represent the vast majority of our Direct Business revenue. These legacy subscribers previously paid $2.99 per month or $19.99 per year. As of March 27, 2023, we increased our standard pricing for new subscribers to this service to $4.99 per month or $39.99 per year. We also provide a Smart Bundle service for $9.99 per month or $69.99 per year. Our Smart Bundle membership currently includes our standard service, plus subscriptions to third-party platforms *Tastemade, Kidstream* (added in January 2024), *SommTV, Da Vinci Kids*, and our *Curiosity University* stand-alone service. Our Smart Bundle pricing remains unchanged. However, we may in the future increase the price of these existing subscription plans, which may have a positive effect on our revenue from this line of our business.

The multichannel video programming distributors (“MVPDs”), virtual MVPDs (“vMVPDs”) and digital distributor partners making up our Partner Direct Business pay us a license fee for sales to individuals who subscribe to CuriosityStream via the partners’ respective platforms. We have affiliate agreement relationships with, and our service is available directly from, major MVPDs that include Comcast, Cox, Dish and vMVPDs and digital distributors that include Amazon Prime Video Channels, Apple Channel, Roku Channel, Sling TV and YouTube TV.

The following table details our Direct Business for the three months ended March 31, 2024, and 2023:

*(in thousands)*

|  | Three Months Ended March 31, 2024 | 2023 | Change Total% |  |
| --- | ---: | ---: | ---: | ---: |
| Direct-to-Consumer | 8,068 | 7,480 | 588 | 8% |
| Partner Direct Business | $1,462 | $1,102 | 360 | 33% |
| Total Direct Business | $9,530 | $8,582 | $948 | 41% |

For the three months ended March 31, 2024, our Direct-to-Consumer revenue increased by $0.6 million, or 8%, compared to 2023. While our overall DTC subscriber count declined, the effects of this were more than offset by the higher pricing that we began to roll out in 2023. Our Partner Direct Business benefited primarily from the adoption of the price increase and continued subscriber growth.

### Content Licensing

Through our Content Licensing business, we license to certain media companies a collection of existing titles from our content library in a traditional content licensing deal. We also pre-sell selected rights (such as in territories or on platforms that are lower priority for us) to content we create before we even begin production. This latter model reduces risk in our content development decisions and creates content licensing revenue.

The following table details our Content Licensing results for the three months ended March 31, 2024, and 2023:

*(in thousands)*

|  | Three Months Ended March 31, 2024 | 2023 | Change Total% |  |
| --- | ---: | ---: | ---: | ---: |
| Library sales1 | $868 | $817 | $51 | 6% |
| Presales | 296 | 1,201 | (905) | (75%) |
| Total Content Licensing | 1,164 | 2,018 | (854) | (42%) |
| 1 The 2024 amount included $0.2 million from trade and barter transactions. |  |  |  |  |

22

For the three months ended March 31, 2024, compared to 2023, Library sales increased by 6%, while presales declined by 75%. Within our content licensing business, our primary focus is on our positive gross margin library-related transactions, although we may continue to enter into presale arrangements with certain partners for strategic purposes.

### Bundled Distribution

Our Bundled Distribution business includes affiliate relationships with our Bundled MVPD Partners and vMVPDs, which are broadband and wireless companies in the U.S. and international territories to whom we can offer a broad scope of rights, including 24/7 “linear” channels, our video-on-demand content library, mobile rights and pricing and packaging flexibility, in exchange for an annual fixed fee or fee per subscriber.

For the three months ended March 31, 2024, and 2023, our Bundled Distribution revenue was $1.1 million and $1.4 million, respectively. This 19% decline was primarily the result of revised affiliate agreements and the non-renewal of certain partnerships. Bundled Distribution is a challenging revenue stream given the pressures being felt in the linear pay television business worldwide.

### Enterprise

Our Enterprise business is comprised primarily of providing subscriptions in bulk to companies and organizations that in turn offer these subscriptions to their employees and members as an employment benefit or “gift of curiosity.”

### Other

We provide advertising and sponsorships services through developing integrated digital brand partnerships designed to offer the chance to be associated with CuriosityStream content in a variety of forms, including short- and long-form program integration; branded social media promotional videos; broadcast advertising spots in our video and audio programs that are made available on our linear programming channels or in front of the paywall; and our increasing focus on digital display ads while delivering our content through advertising-based video-on-demand (AVOD), transactional video-on-demand (TVOD), free advertising-supported streaming television (FAST), YouTube and other similar distribution channels.

In the future, we hope to continue developing integrated digital brand partnerships with advertisers. These sponsorship campaigns offer companies the chance to be associated with CuriosityStream content in the forms described above. We believe the impressions accumulated in these multi-faceted campaigns would result in verifiable metrics for the clients.

For the three months ended March 31, 2024, Other revenue was $0.1 million, a decline of $0.2 million, or 65%, from the same period in 2023. This decline was largely due to certain short-term marketing partnerships that we entered into during the early part of 2023, including a $0.2 million campaign that we provided through a trade and barter arrangement, which were not renewed in 2024.

### Operating Expenses

Our primary operating costs relate to the cost of producing and acquiring our content, the costs of advertising and marketing our service, personnel costs, and distribution fees.

For the three months ended March 31, 2024, and 2023, our operating expenses were $15.7 million and $20.2 million, respectively, a decrease of $4.5 million, or 22%.

### Cost of Revenues

Cost of revenues encompasses content amortization, distribution fees, revenue sharing arrangements, hosting and streaming delivery costs, payment processing costs, commission costs, and subtitling and broadcast costs. Producing and co-producing content and commissioned content is generally more costly than content acquired through licenses.

Distribution fees include payment processing fees and revenue share arrangements with Smart Bundle and digital distributor partners, as well as fees owed to the Spiegel Venture related to our German SVOD service. We pay a fixed percentage distribution fee to our partners for subscribers accessing our platform via App Services to compensate these partners for access to their customer and subscriber bases. The MVPD, vMVPD and digital distributor partners making up our Partner Direct business pay us a license fee, and host and stream our content to their customers via their own platforms, such as set top boxes in the case of most MVPDs. We do not incur billing, streaming or backend costs associated with content distribution through our MVPD, vMVPD and digital distributor partners.

The following table details cost of revenues for the three months ended March 31, 2024, and 2023:

*(in thousands)*

|  | Three Months Ended March 31, 2024 | 2023 | Change Total% |  |
| --- | ---: | ---: | ---: | ---: |
| Content amortization | $5,215 | $5,852 | $(637) | (11%) |
| Other1 | 1,533 | 3,149 | (1,616) | (51%) |
| Total cost of revenues | $6,748 | $9,001 | $(2,253) | (62%) |
| 1 Includes commissions, distribution fees, production and broadcast, promotions and sponsorships, and other expenses. |  |  |  |  |

For the three months ended March 31, 2024, cost of revenues decreased to $6.7 million from $9.0 million, a 62% reduction. This decrease was mostly driven by an 11% decline in content amortization due to fewer presale agreements, as discussed above, a reduction in content acquisitions and releases during the year and the content impairment that we recorded in the third quarter of 2023. Other cost of revenues also declined due to a reduction in revenue share arrangements, including specifically our arrangement with Nebula that expired at the end of 2023.

### Advertising and Marketing

Our advertising and marketing expenditures are a primary operating cost for our business. While these costs may fluctuate based on advertising and marketing objectives, we generally focus marketing dollars on efficient customer acquisition methods. For the three months ended March 31, 2024, advertising and marketing expenses remained flat when compared to the same period in 2023.

### General and Administrative

Our general and administrative costs are associated with certain administrative functions, including corporate governance, executive management, information technology, finance and human resources. These costs consist largely of compensation expense, subscriptions that support our business, professional services, licenses and rent. While personnel levels may fluctuate based on our needs, we tend to focus on hiring and retaining revenue-generating personnel, such as sales staff and roles that support the improvement, maintenance and marketing of our different revenue streams.

The following table details general and administrative costs for the three months ended March 31, 2024, and 2023:

*(in thousands)*

|  | Three Months Ended March 31, 2024 | 2023 | Change Total% |  |
| --- | ---: | ---: | ---: | ---: |
| Payroll and related | $2,652 | $3,589 | $(937) | (26%) |
| Professional services | 1,051 | $1,927 | (876) | (45%) |
| Stock-based compensation | 689 | 1,267 | (578) | (46%) |
| Technology and subscriptions | 374 | 423 | (49) | (12%) |
| Other1 | 1,036 | 853 | 183 | 21% |
| Total general and administrative | $5,802 | $8,059 | $(2,257) | (28%) |
| 1 Includes facilities costs, depreciation and amortization, insurance, technology and subscriptions, travel and other expenses. |  |  |  |  |

24

For the three months ended March 31, 2024, general and administrative expenses decreased to $5.8 million from $8.1 million for the same period in 2023. This decrease of $2.3 million, or 28%, was primarily the result of lower payroll and related costs and stock-based compensation of $0.9 million and 0.6 million, respectively, primarily driven by our smaller average workforce size as well as reduced incentive compensation. Professional services costs also declined by 45% as we streamlined various outside services during the year and brought certain finance and operations functions internal.

### Other Income (Expense)

### Change in Fair Value of Warrant Liability

The fair value of our warrant liability is estimated using the Black-Scholes valuation model that takes into account a number of economic assumptions, including the market price of our Common Stock and its expected volatility. Changes in these inputs from period to period may significantly affect changes in fair values.

### Equity Method Investment Loss

For the three months ended March 31, 2024, the Company recorded a loss of $1.8 million compared to a loss of $0.2 million for the same period in 2023, related to its investments in the Spiegel Venture and Nebula. This increase in losses is primarily attributable to write-downs recorded by the Spiegel Venture.

### Income Taxes

For the three months ended March 31, 2024, Income tax expense was immaterial. For the comparative period in 2023, the provision for income taxes was $0.1 million, primarily due to losses generated before income taxes. Our provision for income taxes differs from the federal statutory rate primarily due to the Company being in a full valuation allowance position and not recognizing a tax benefit attributable to generated losses for either federal or state income tax purposes.

### LIQUIDITY AND CAPITAL RESOURCES

### Liquidity

As of March 31, 2024, the Company’s cash and cash equivalents, including restricted cash, totaled $38.9 million. For the three months ended March 31, 2024, the Company incurred a net loss of $5.0 million and generated $0.7 million of net cash in operating activities. There were no significant cash flows from financing activities or investing activities during the three months ended March 31,.

Our cash and cash equivalents mainly consist of investments in institutional money market funds and short-term deposits held at major global financial institutions. We regularly monitor the creditworthiness of the financial institutions and money market fund asset managers with whom we invest our funds, and we maintain a level of liquidity sufficient to allow us to meet our cash needs in both the short term and long term.

We believe that our current cash levels, including investments in money market funds that are readily convertible to cash, will be adequate to support our ongoing operations, capital expenditures and working capital for at least the next twelve months. We believe that we have access to additional funds in the short term and the long term, if needed, through the capital markets to obtain further financing.

We use cash principally to acquire content, promote our service through advertising and marketing, and provide for working capital to operate our business. We have experienced significant net losses since our inception, and, given the significant operating and capital expenditures associated with our business plan, we anticipate that we will continue to incur net losses.

As previously discussed, we began entering into trade and barter transactions in the second quarter of 2023 primarily for the purpose of exchanging content assets through licensing agreements with media counterparties. Our use of these transactions has enabled us to acquire quality content that we can monetize through various distribution channels while preserving our liquidity.

Our Board of Directors declared a quarterly cash dividend of $0.025 per share, with the first dividend paid on April 30, 2024, for an aggregate amount paid of $1.3 million. Our Board of Directors declared the next quarterly cash dividend of $0.025 per share to be paid on July 31, 2024, for an aggregate amount paid of $1.3 million. We intend to pay regular quarterly dividends.

### Cash Flow Analysis

The following table presents our cash flows from operating, investing and financing activities for the three months ended March 31, 2024, and 2023:

*(Unaudited and in thousands)*

|  | Three Months Ended March 31, 2024 | 2023 |
| --- | ---: | ---: |
| Net cash used in operating activities | $666 | $(6,308) |
| Net cash provided by investing activities | — | 14,995 |
| Net cash used in financing activities | (6) | (26) |
| Net increase in cash, cash equivalents and restricted cash | $660 | $8,661 |

### Operating Activities

Cash flows from operating activities primarily consist of net losses, changes to our content assets (including additions and amortization), and other working capital items.

*(in thousands)*

|  | Three Months Ended March 31, 2024 | 2023 |
| --- | ---: | ---: |
| Net loss | $(5,035) | $(7,751) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities |  |  |
| Change in fair value of warrant liability | 30 | 74 |
| Additions to content assets | (426) | (3,723) |
| Change in content liabilities | (333) | (1,206) |
| Amortization of content assets | 5,215 | 5,852 |
| Stock-based compensation | 689 | 1,267 |
| Equity interests loss | 1,756 | 219 |
| Other depreciation, amortization and non-cash items | 239 | 274 |
| Changes in operating assets and liabilities | (1,469) | (1,314) |
| Net cash provided by (used in) operating activities | $666 | $(6,308) |

For the three months ended March 31, 2024, our net cash inflow from operating activities was $0.7 million compared to net cash used in operating activities of $6.3 million for the three months ended March 31, 2023, an increase in operating cash outflow of $7.0 million.

Although we reported a net loss of $5.0 million for the three months ended March 31, 2024, this amount reflected noncash items such as amortization of content assets, stock-based compensation and equity method investment loss of $5.2 million, $1.8 million, and $0.7 million, respectively. Cash used during the quarter included a $1.5 million change in operating assets and liabilities and additions to content assets and change of content liabilities of $0.4 million and $0.3 million, respectively.

For the three months ended March 31, 2023, we reported a net loss of $7.8 million. This amount reflected noncash items such as amortization of content assets, stock-based compensation and equity method investment loss of $5.9 million, $1.3 million and $0.2 million, respectively. Cash used during the quarter included additions to content assets and changes in content liabilities of $3.7 million and $1.2 million, respectively, and changes in operating assets and liabilities of $1.3 million.

### Investing Activities

Cash flow from investing activities consists of purchases, sales and maturities of investments, business acquisitions and equity investments and purchases of property and equipment.

For the three months ended March 31, 2024, there were no investing activities that resulted in cash inflows or outflows. In contrast, for the same period in 2023, our cash inflows were primarily due to maturities of investments in debt securities.

### Capital Expenditures

Going forward, we expect to continue making expenditures for additions to our content assets and purchases of property and equipment, although at a slower rate than in previous periods. The amount, timing and allocation of capital expenditures are largely discretionary and within management’s control. Depending on market conditions, we may choose to defer a portion of our budgeted expenditures until later periods to achieve the desired balance between sources and uses of liquidity and prioritize capital projects that we believe have the highest expected returns and potential to generate cash flow. Subject to financing alternatives, we may also increase our capital expenditures significantly to take advantage of opportunities we consider to be attractive.

### OFF BALANCE SHEET ARRANGEMENTS

As of March 31, 2024, we had no off-balance sheet arrangements.

### CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our discussion and analysis of our financial condition and results of operation is based upon our financial statements, which have been prepared in accordance with U.S. GAAP. Certain amounts included in or affecting the financial statements presented in this Quarterly Report on Form 10-Q and related disclosures must be estimated, requiring management to make assumptions with respect to values or conditions which cannot be known with certainty at the time the financial statements are prepared. Management believes that the accounting policies set forth below comprise the most important “critical accounting policies” for the Company. A critical accounting policy is one which is both important to the portrayal of a company’s financial condition and results of operations and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Management evaluates such policies on an ongoing basis, based upon historical results and experience, consultation with experts and other methods that management considers reasonable in the particular circumstances under which the judgments and estimates are made, as well as management’s forecasts as to the manner in which such circumstances may change in the future.

For more detailed information on our critical accounting policies, including those related to content assets, revenue recognition and trade and barter transactions, refer to the "Summary of Significant Accounting Policies" section in the Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 25, 2024. This comprehensive discussion helps to ensure that stakeholders have a complete understanding of the accounting methodologies and principles that influence the financial statements presented herein.

### RECENT ACCOUNTING PRONOUNCEMENTS

The information set forth in *Note* 2 *- Basis of Presentation and Summary of Significant Accounting Policies* in the Unaudited Notes to Interim Consolidated Financial Statements is incorporated herein by reference.

## Controls and procedures

As filed, 1,679 characters.

### DISCLOSURE CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in our reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are recorded, processed, summarized and reported within the specified time periods in the rules and forms of the SEC, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure.

Our management, with the participation of the CEO and the CFO, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) promulgated under the Exchange Act) as of March 31, 2024. Based on these evaluations, our CEO and CFO concluded that our disclosure controls and procedures were effective as of March 31, 2024.

### CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is required to evaluate, with the participation of our CEO and our CFO, any changes in internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during each fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. There were no changes in our internal control over financial reporting during the quarter ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 674 characters.

Factors that could cause our actual results to differ materially from those in this Quarterly Report on Form 10-Q are any of the risks described in our Annual Report on Form 10-K filed with the SEC on March 25, 2024. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.

There have been no material changes from the risk factors previously disclosed under the heading “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on March 25, 2024.

Filed May 8, 2024.
Source: SEC EDGAR, the filing index for accession 0001628280-24-021589. Last ingested by Listed: Oct 24, 2026, 15:07 ET. No prices; not investment advice.