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What changed in CuriosityStream Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of CuriosityStream Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+360 added−339 removedSource: 10-K (2024-03-25) vs 10-K (2023-03-31)

Top changes in CuriosityStream Inc.'s 2023 10-K

360 paragraphs added · 339 removed · 256 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeOur Other Business is primarily comprised of advertising and sponsorships revenue generated 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 digital display ads. 8 Our business model relies on the collaboration of (1) our content team, which works with more than 150 production companies and distributors across the world to create and acquire programming, (2) our legal and finance teams, which structure and formalize agreements, (3) our creative services and content operations teams, which develop all of the marketing materials, metadata and other assets associated with a piece of content, and (4) our content operations and technology teams, which then deliver our content and services to all manner of devices and streaming platforms for our Direct to Consumer Business, Partner Direct Business and our affiliate relationships with Bundled MVPDs.
Biggest changeKG (the “Spiegel Venture”), operates two documentary channels (including one branded as "Curiosity Channel"), together with an SVOD service and a FAST channel, as well as revenue sharing on a localized CuriosityStream SVOD service in German-speaking Europe. 3 Table of Contents Business Model and Services Our business model relies on the collaboration of (i) our content team, which works with more than 150 production companies and distributors across the world to create and acquire programming, (ii) our legal and finance teams, which structure and formalize agreements, (iii) our creative services and content operations teams, which develop all of the marketing materials, metadata and other assets associated with a piece of content, and (iv) our content operations and technology teams, which then deliver our content and services to all manner of devices and streaming platforms for our consumers directly or through our relationships with third parties.
Through the rapid expansion of our library of high-quality titles and by exploiting multiple channels to monetize our programming, we believe that we have achieved global leadership in factual content streaming and are well positioned to capitalize on favorable ongoing industry trends to create value for our shareholders and other stakeholders.
Through the expansion of our library of high-quality titles and by exploiting multiple channels to monetize our programming, we believe that we have achieved global leadership in factual content streaming and are well positioned to capitalize on favorable ongoing industry trends to create value for our shareholders and other stakeholders.
We own rights to proprietary processes and trade secrets, including those underlying the CuriosityStream service. 9 Government Regulation As a company conducting business on the internet, we are subject to several foreign and domestic laws and regulations relating to information and network security, data protection, privacy, and governmental access to data, among other things.
We own rights to proprietary processes and trade secrets, including those underlying the CuriosityStream service. GOVERNMENT REGULATION As a company conducting business on the internet, we are subject to several foreign and domestic laws and regulations relating to information and network security, data protection, privacy, and governmental access to data, among other things.
Our programs have received four Emmy nominations, including an Emmy Award win for Stephen Hawking’s Favorite Places. Every title on our platform is available on-demand and, other than historical footage or classic documentaries, in high definition or 4K quality.
Our programs have received four Emmy nominations, including an Emmy Award win for Stephen Hawking’s Favorite Places . Every video title on our platform is available on-demand and, other than historical footage or classic documentaries, in high definition or 4K quality.
To further some of these initiatives, following our Business Combination, we retained Willis Towers Watson, a leading global 10 advisory firm, to review our compensation structure.
To further some of these initiatives, following our Business Combination, we retained Willis Towers Watson, a leading global advisory firm, to review our compensation structure.
Upon the consummation of the Business Combination, CuriosityStream Operating Inc., a Delaware corporation (“Legacy CuriosityStream”) became a wholly owned subsidiary of SAQN and the registrant changed its name from “Software Acquisition Group Inc.” to “CuriosityStream Inc.” Following the consummation of the Business Combination, Legacy CuriosityStream changed its name from “CuriosityStream Operating Inc.” to “Curiosity Inc.” 6 SAQN, a blank check company, was incorporated as a Delaware corporation on May 9, 2019 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.
Upon the consummation of the Business Combination, Legacy CuriosityStream became a wholly owned subsidiary of SAQN and the registrant changed its name from “Software Acquisition Group Inc.” to “CuriosityStream Inc.” Following the consummation of the Business Combination, Legacy CuriosityStream changed its name from “CuriosityStream Operating Inc.” to “Curiosity Inc.” SAQN, a blank check company, was incorporated as a Delaware corporation on May 9, 2019, for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.
Our films are produced, co-produced or commissioned by us, or licensed through one of our content partnerships, such as with NHK in Japan, ZED in France and Terra Mater in Austria. Our programs are hosted by and feature scientists, experts and celebrities, such as Stephen Hawking, Sir David Attenborough, Sigourney Weaver and Patrick Aryee.
Our programs are produced, co-produced or commissioned by us, or licensed through one of our content partnerships, such as with NHK in Japan, ZED in France and Terra Mater in Austria. Our programs are hosted by and feature scientists, experts and celebrities, such as Stephen Hawking, Sir David Attenborough, Sigourney Weaver, Patrick Aryee and James Burke.
Almost all current employees have received equity grants with vesting conditions designed to facilitate the retention of personnel and the opportunity to benefit financially from the Company’s potential future growth and profitability.
Almost all current employees have received equity grants with vesting conditions designed to facilitate the retention of personnel and the opportunity to benefit financially from our potential future growth and profitability.
Corporate History and Background On October 14, 2020, Software Acquisition Group Inc., a special purpose acquisition company and a Delaware corporation (“SAQN”), consummated a reverse merger pursuant to the Agreement and Plan of Merger, dated August 10, 2020 (the “Business Combination”).
CORPORATE HISTORY AND BACKGROUND On October 14, 2020, Software Acquisition Group Inc., a special purpose acquisition company and a Delaware corporation (“SAQN”), and CuriosityStream Operating Inc., a Delaware corporation (“Legacy CuriosityStream”), consummated a reverse merger pursuant to the Agreement and Plan of Merger, dated August 10, 2020 (the “Business Combination”).
Through our acquisition of One Day University in 2021, we acquired more than 500 lectures from some of the most popular and acclaimed college and university professors in the United States, on topics ranging from American history to Broadway shows.
Through our acquisition of One Day University in 2021, we acquired more than 500 lectures from some of the most popular and acclaimed college and university professors in the U.S., on topics ranging from American history to Broadway shows.
In addition, we have affiliate agreement relationships with, and our service is available directly from, MVPDs that include Comcast and Cox, and vMVPDs and digital distributors that include Amazon Prime Video Channels, Roku Channels, Sling TV and YouTube TV, which constitute our Partner Direct Business.
Through our Partner Direct Business, we have affiliate agreement relationships with, and our service is available directly from, MVPDs that include Comcast and Cox, and vMVPDs and digital distributors that include Amazon Prime Video Channels, Roku Channels, Sling TV, Apple Channel and YouTube TV, which constitute our Partner Direct Business.
In the area of information and network security and data protection, the laws in the United States, the European Union (the “EU”), and other jurisdictions globally can require specified actions to maintain the confidentiality, integrity and availability of networks and data.
In the area of information and network security and data protection, the laws in the U.S., the European Union (the “EU”), and other jurisdictions globally can require specified actions to maintain the confidentiality, integrity and availability of networks and data.
Our Content Licensing Business is focused on providing factual content to entertainment media companies. We have the opportunity to provide a turnkey, financially attractive “factual solution” to meet this business demand. We are able to license to certain media companies a collection of our existing titles in a traditional content licensing deal.
We have the opportunity to provide a turnkey, financially attractive “factual solution” to meet this business demand. We are able to license to certain media companies a collection of our existing titles in a traditional content licensing deal.
We provide value for both our users and ourselves through our analytics algorithm and data collection system. Leveraging our database of anonymized user preferences, ratings and behavior, we are constantly refining our content recommendation engine to suggest and serve content to our customers.
We provide value for both our users and ourselves through our analytics algorithm and data collection system. Leveraging our database of anonymized user preferences, ratings and behavior, we are constantly refining our content recommendation engine to suggest and serve content to our customers. Content Licensing Our Content Licensing business is focused on providing factual content to entertainment media companies.
CuriosityStream’s award-winning content library features more than 15,000 programs that explore topics ranging from space engineering to ancient history to the rise of Wall Street.
CuriosityStream’s award-winning content library features more than 17,000 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.
In addition to our Direct to Consumer Business and Partner Direct Business, we have affiliate relationships with our Bundled MVPD Partners and vMVPDs, which are broadband and wireless companies in the US and international territories to whom we can offer a broad scope of rights, including 24/7 “linear” channels, our on-demand content library, mobile rights and pricing and packaging flexibility, in exchange for an annual fixed fee or fee per subscriber as part of a multi-year agreement.
This latter model reduces risk in our content development decisions and creates content licensing revenue. 4 Table of Contents Bundled Distribution We have affiliate relationships with our bundled MVPD partners (including Multichoice, FuboTV and Izzi, among others) and vMVPDs, which are broadband and wireless companies in the US and international territories to whom we can offer a broad scope of rights, including 24/7 “linear” channels, our on-demand content library, mobile rights and pricing and packaging flexibility, in exchange for an annual fixed fee or fee per subscriber as part of a multi-year agreement.
We are also able to 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.
We are also able to 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.
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 like Xbox. Our Direct 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 television brands (e.g., LG, Vizio, Samsung) and gaming consoles like Xbox.
We strive to recruit the best people for the job regardless of race, sexual orientation, gender, religion, or other differences. We are committed to diversity and inclusion as well as equitable pay within our workforce.
Our ability to attract, retain and improve the effectiveness of our employees is a critical factor for executing our growth strategy. We strive to recruit the best people for the job regardless of race, sexual orientation, gender, religion, or other factors. 6 Table of Contents We are committed to diversity and inclusion as well as equitable pay within our workforce.
Business Overview Created 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.
CuriosityStream LLC officially launched its subscription service to U.S. based customers in March 2015 and to international customers in September 2015. 2 Table of Contents BUSINESS 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.
We are seeking to meet demand for high-quality factual entertainment via SVOD platforms, as well as via bundled content licenses for SVOD and linear offerings, content licensing, brand sponsorship and advertising, talks and courses and partner bulk sales.
Our mission is to provide premium factual entertainment that informs, enchants and inspires. We seek to meet demand for high-quality factual entertainment via SVOD platforms, content licensing, bundled content licenses for SVOD and linear offerings, talks and courses and partner bulk sales.
Our existing subscribers currently pay $2.99 per month or $19.99 per year for our standard Direct Service. All new subscribers to our standard Direct Service on and after March 27, 2023, will start to be charged $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.
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 library also features a rotating catalog of more than 5,500 internationally licensed videos and audio programs. We typically launch new titles every week, and this content is 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 in ten different languages.
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.
In 2021, the Company entered into a marketing partnership with and investment into Nebula, an SVOD streaming service owned by Standard Broadcast LLC and its affiliated YouTube creators. 7 Also in 2021, the Company partnered with SPIEGEL TV to accelerate international expansion of CuriosityStream services, taking a one-third stake in the German venture owned by a German media company, Spiegel, and a German documentary producer, Autentic.
Also in 2021, the Company partnered with Spiegel TV to accelerate international expansion of CuriosityStream services, taking a one-third stake in the German venture owned by a German media company, Spiegel, and a German documentary producer, Autentic. The joint venture, Spiegel TV Geschichte und Wissen GmbH & Co.
Many of our competitors enjoy competitive advantages such as greater brand recognition, legacy operating histories and larger marketing and content budgets, as well as greater financial, technical, human and other resources. Seasonality Our membership growth exhibits a seasonal pattern that reflects variations when consumers buy internet-connected screens and when they tend to increase their viewing.
Many of our competitors enjoy competitive advantages such as greater brand recognition, legacy operating histories and larger marketing and content budgets, as well as greater financial, technical, human and other resources. SEASONALITY Our overall revenue does not exhibit a consistent seasonal pattern.
Our Smart Bundle membership includes everything in our standard service, plus subscriptions to third-party platforms Tastemade, Topic, SommTV, DaVinci Kids, our equity investee Nebula, and our One Day University stand-alone service.
Our Smart Bundle membership currently includes our standard service, plus subscriptions to third-party platforms Tastemade , Topic , Kidstream (added in January 2024), SommTV , Da Vinci Kids , and our Curiosity University stand-alone service. Our Smart Bundle pricing remains unchanged.
Our extensive catalog of originally produced and owned content includes more than 9,500 short-, mid- and long-form video and audio titles, including One Day University and Learn25 recorded lectures that are led by some of the most acclaimed college and university professors in the world.
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 7,000 internationally licensed videos and audio programs. • More than 6,000 on-demand and ad-free productions available on-demand through our SVOD offerings.
Our human resources strategy is overseen by our Chief Operating Officer and executive team, which aims to provide regular updates to our Board. Our employees are not covered by a collective bargaining agreement, and we consider our relations with our employees to be good.
Our employees are not covered by a collective bargaining agreement, and we consider our relations with our employees to be good.
Our revenue for the year ended December 31, 2022 was $78.0 million. Our net loss for the year ended December 31, 2022 was $50.9 million. Please see “ Item 7.
Summary of Results For the year ended December 31, 2023, we reported revenue of $56.9 million and a net loss of $48.9 million. Please see “ Item 7.
Historically, the first quarter, on a relative percentage basis, has represented our greatest streaming membership growth. In addition, our membership growth can be impacted by our content release schedule and changes to pricing. Intellectual Property Our success depends upon our ability to protect our technologies and intellectual property.
In addition, our membership growth can be impacted by our content release schedule and changes to pricing. INTELLECTUAL PROPERTY Our success depends upon our ability to protect our technologies and intellectual property. To accomplish this, we rely on a combination of intellectual property rights, including trade secrets, copyrights and trademarks, as well as contractual restrictions.
Our registered trademarks in the United States include “Curiosity,” “CuriosityStream” and “One Day University.” We are the registrant of the internet domain name for our website, www.curiositystream.com, as well as others.
We have confidentiality and proprietary rights arrangements with our employees, consultants and business partners, and we control access to, and distribution of, our proprietary information. Our registered trademarks in the U.S. include “Curiosity,” “CuriosityStream” among others. 5 Table of Contents We are the registrant of the internet domain name for our website, www.curiositystream.com , as well as others.
CuriosityStream LLC, Legacy CuriosityStream’s predecessor, was formed in the State of Delaware in June 2008. CuriosityStream LLC officially launched its subscription service to U.S. based customers in March 2015 and to international customers in September 2015.
CuriosityStream LLC, Legacy CuriosityStream’s predecessor, was formed in the State of Delaware in June 2008.
Employees and Human Capital We had approximately 78 and 83 full-time employees on average, during 2022 and 2021, respectively. As of December 31, 2022, we had approximately 65 full-time employees, all of whom were located in the U.S. We have one location, a corporate office plus filming studio and edit suites, in Silver Spring, Maryland (the “Office”).
HUMAN CAPITAL We employed approximately 57 and 78 full-time employees on average, during 2023 and 2022, respectively. As of December 31, 2023, we employed 48 full-time employees, all of whom were located in the U.S. During 2023, we eliminated 20 positions, including 13 positions eliminated as part of a December 2023 restructuring.
Our 401(k) Retirement Plan includes a Company match of up 100 percent of contributions up to 3 percent of the employee’s compensation and a 50 percent Company match of contributions between 3 percent and 5 percent of the employee’s compensation.
Our 401(k) retirement plan contributions include a 100% match of contributions for the first 3% of the employee’s base salary and a 50% match of contributions between 3% and 5% of the employee’s base salary. Our human resources strategy is overseen by our executive team, which aims to provide regular updates to our Board.
This Bundled MVPD Business offers us the advantages of long-cycle and recurring revenue and the potential to access hundreds of millions of paying subscribers globally. As a young and digital-native company, we are not laden with some of the overhead costs nor over-dependent on lines of business that may hamper the growth of legacy media companies.
As such, our Bundled Distribution business offers us the advantages of long-cycle and recurring revenue and the potential to access hundreds of millions of paying subscribers globally.
Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees, advisors and consultants. Our ability to attract, retain and improve the effectiveness of our employees is a critical factor for executing our growth strategy.
Our eliminated roles during the year were primarily in the areas of technology, operations and programming. We have one location, a corporate office, plus filming studio and edit suites, in Silver Spring, Maryland (the “Office”). Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees, advisors and consultants.
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All references in this section to Software Acquisition Group Inc. and SAQN are references to the registrant prior to the consummation of the Business Combination.
Added
In January 2024, we rebranded our service that offers these audio and video courses and talks "Curiosity University." In 2021, the Company invested in Watch Nebula LLC ("Nebula"), an SVOD streaming service owned by Standard Broadcast LLC and its affiliated YouTube creators.
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The joint venture, SPIEGEL TV, includes distribution of two linear cable channels, including one branded as Curiosity Channel, as well as a localized CuriosityStream SVOD service in German-speaking Europe. Our video content is available directly through our O&O Service and App Services.
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Direct Business Through our Direct-to-Consumer ("DTC") business, our video content is available to subscribers through our owned and operated platform (O&O Consumer Service) and App Services. Our O&O Consumer Service is available in more than 175 countries to any household with a broadband connection.
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Our Enterprise Business is comprised primarily of selling 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.” As of the date of the filing of this Annual Report on Form 10-K, 25 companies have purchased annual subscriptions at volume discounts.
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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.
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To accomplish this, we rely on a combination of intellectual property rights, including trade secrets, copyrights and trademarks, as well as contractual restrictions. We have confidentiality and proprietary rights arrangements with our employees, consultants and business partners, and we control access to, and distribution of, our proprietary information.
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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.
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In addition, the health and safety of our employees and communities are of primary concern to us.
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Enterprise Our Enterprise business is comprised primarily of selling 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.
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During the COVID-19 pandemic and its aftermath, we took significant steps to protect our workforce, including: • Mandating or allowing remote or hybrid work for all employees; • Establishing additional cleaning and sanitization practices in the Office; • Implementing touchless contact points for most doors in the Office; • Establishing physical distancing procedures for employees in the Office, as necessary; • Requiring (as necessary) or promoting face coverings to be worn in the Office during certain periods and under certain circumstances and having disposable face coverings available for use, • Implementing HEPA air filter system in the conference room in the Office; and • Installing self-service hand sanitizer dispensers in the Office.
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Our DTC membership growth may reflect variations when consumers buy internet-connected screens and when they tend to increase their viewing, although these trends are generally immaterial for our business. In most years, the first quarter, on a relative percentage basis, has represented our greatest streaming membership growth.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAs such, many network operators have an incentive to use their network infrastructure in a manner adverse to our continued growth and success. To the extent that network operators are able to provide preferential treatment to their data as opposed to ours or otherwise implement discriminatory network management practices, our business could be negatively impacted.
Biggest changeTo the extent that network operators are able to provide preferential treatment to their data as opposed to ours or otherwise implement discriminatory network management practices, our business could be negatively impacted. 23 Table of Contents We are at risk of attempts at unauthorized access to our service through cyberattacks, and failure to effectively prevent and remediate such attempts could have an adverse impact on our business, operating results and financial condition.
We are also currently party to a joint venture, and our participation in such joint venture is subject to risks, including, among other things: (i) shared approval rights over certain major decisions affecting the ownership or operation of the joint venture and any assets owned by the joint venture; (ii) our joint venture counterparts being subject to different laws or regulations than us, which could create conflicts of interest; (iii) our ability to sell our interest in the joint venture, or the joint venture’s ability to sell additional interests of, or assets owned by, the joint venture, being limited to that set forth under the terms of the governing agreements; (iv) the terms of the governing agreements providing our joint venture counterparts the right to exclude us from the joint venture under certain circumstances; (v) the terms of the governing agreements containing non-compete provisions, which may limit other potential business opportunities for us; (vi) a put option that permits our joint venture counterparts to require us to purchase their interest, subject to certain conditions, which, if exercised, would expose us to the full economics and risks of such joint venture, rather than only our proportionate interest therein; and (vii) disagreements with our joint venture counterparts, which may result in arbitration that could be expensive and distracting to management and could delay important decisions.
We are currently party to a joint venture, and our participation in such joint venture is subject to risks, including, among other things: (i) shared approval rights over certain major decisions affecting the ownership or operation of the joint venture and any assets owned by the joint venture; (ii) our joint venture counterparts being subject to different laws or regulations than us, which could create conflicts of interest; (iii) our ability to sell our interest in the joint venture, or the joint venture’s ability to sell additional interests of, or assets owned by, the joint venture, being limited to that set forth under the terms of the governing agreements; (iv) the terms of the governing agreements providing our joint venture counterparts the right to exclude us from the joint venture under certain circumstances; (v) the terms of the governing agreements containing non-compete provisions, which may limit other potential business opportunities for us; (vi) a put option that permits our joint venture counterparts to require us to purchase their interest, subject to certain conditions, which, if exercised, would expose us to the full economics and risks of such joint venture, rather than only our proportionate interest therein; and (vii) disagreements with our joint venture counterparts, which may result in arbitration that could be expensive and distracting to management and could delay important decisions.
You may not be able to resell your shares at an attractive price due to a number of factors such as those listed in “ Risks Relating to the Company’s Business ” and the following: • results of operations that vary from the expectations of securities analysts and investors; • results of operations that vary from those of our competitors; • changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors; 33 • declines in the market prices of stocks generally; • strategic actions by us or our competitors; • announcements by us or our competitors of significant contracts, acquisitions, joint ventures, other strategic relationships or capital commitments; • any significant change in our management; • changes in general economic or market conditions or trends in our industry or markets; • changes in business or regulatory conditions, including new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • future sales of our Common Stock or other securities; • investor perceptions or the investment opportunity associated with our Common Stock relative to other investment alternatives; • the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC; • litigation involving us, our industry, or both, or investigations by regulators into our operations or those of our competitors; • guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance; • the development and sustainability of an active trading market for our Common Stock; • actions by institutional or activist stockholders; • changes in accounting standards, policies, guidelines, interpretations or principles; and • other events or factors, including those resulting from natural disasters, war, acts of terrorism or responses to these events.
You may not be able to resell your shares at an attractive price due to a number of factors such as those listed in Risks Relating to the Company’s Business and the following: • results of operations that vary from the expectations of securities analysts and investors; • results of operations that vary from those of our competitors; • changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors; • declines in the market prices of stocks generally; • strategic actions by us or our competitors; • announcements by us or our competitors of significant contracts, acquisitions, joint ventures, other strategic relationships or capital commitments; • any significant change in our management; • changes in general economic or market conditions or trends in our industry or markets; • changes in business or regulatory conditions, including new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • future sales of our Common Stock or other securities; • investor perceptions or the investment opportunity associated with our Common Stock relative to other investment alternatives; • the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC; • litigation involving us, our industry, or both, or investigations by regulators into our operations or those of our competitors; • guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance; • the development and sustainability of an active trading market for our Common Stock; • actions by institutional or activist stockholders; • changes in accounting standards, policies, guidelines, interpretations or principles; and • other events or factors, including those resulting from natural disasters, war, acts of terrorism or responses to these events.
If the financial markets become difficult or costly to access, including due to rising interest rates, fluctuations in foreign currency exchange rates or other changes in economic conditions, our ability to raise additional capital may be negatively impacted, and any refinancing or restructuring could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations.
If the financial markets become difficult or costly to access, including due to higher interest rates, fluctuations in foreign currency exchange rates or other changes in economic conditions, our ability to raise additional capital may be negatively impacted, and any refinancing or restructuring could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations.
If we do not grow as expected, we may not be able to adjust our expenditures or increase our per user revenues, including by adjusting membership 11 pricing, commensurate with the lowered growth rate, such that our margins, liquidity and results of operations may be adversely impacted, and our ability to operate at a net-loss may be strained.
If we do not grow as expected, we may not be able to adjust our expenditures or increase our per-user revenues, including by adjusting membership pricing, commensurate with the lowered growth rate, such that our margins, liquidity and results of operations may be adversely impacted, and our ability to operate at a net-loss may be strained.
Although we cannot predict whether or in what form any 32 such proposals will pass, certain proposals under consideration, if enacted into law, could have an adverse impact on our effective tax rate, income tax expense, and cash flows. In addition, governmental tax authorities are increasingly scrutinizing the tax positions of companies.
Although we cannot predict whether or in what form any such proposals will pass, certain proposals under consideration, if enacted into law, could have an adverse impact on our effective tax rate, income tax expense, and cash flows. In addition, governmental tax authorities are increasingly scrutinizing the tax positions of companies.
If our recommendation and promotion capabilities do not enable us to predict and recommend titles that our users will enjoy, our ability to attract and retain users may be adversely affected. We also utilize third-party technology to 27 help market our service, process payments and otherwise manage the daily operations of our business.
If our recommendation and promotion capabilities do not enable us to predict and recommend titles that our users will enjoy, our ability to attract and retain users may be adversely affected. We also utilize third-party technology to help market our service, process payments and otherwise manage the daily operations of our business.
Our ability to make payments on our obligations and any debt we incur in the future will depend on our financial and operating performance, which is subject to prevailing economic and competitive conditions and to 25 certain financial, business and other factors beyond our control. Since inception, our cash flows from operating activities have been negative.
Our ability to make payments on our obligations and any debt we incur in the future will depend on our financial and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. Since inception, our cash flows from operating activities have been negative.
If any of the foregoing were to occur, our reputation and business could be seriously harmed or adversely affected. 21 Our business emphasizes rapid innovation and prioritizes long-term user engagement over short-term financial condition or results of operations, which strategy could have an adverse impact on our business, operating results and financial condition.
If any of the foregoing were to occur, our reputation and business could be seriously harmed or adversely affected. Our business emphasizes rapid innovation and prioritizes long-term user engagement over short-term financial condition or results of operations, which strategy could have an adverse impact on our business, operating results and financial condition.
We rely and expect to continue to rely on a combination of confidentiality and license agreements with our employees, consultants and third parties with whom we have relationships, as well as trademark and copyright laws, to protect our proprietary rights. We may also seek to enforce our proprietary rights through court 23 proceedings or other legal actions.
We rely and expect to continue to rely on a combination of confidentiality and license agreements with our employees, consultants and third parties with whom we have relationships, as well as trademark and copyright laws, to protect our proprietary rights. We may also seek to enforce our proprietary rights through court proceedings or other legal actions.
Litigation disputes could cause us to incur unforeseen expenses, result in content unavailability, service disruptions and otherwise occupy a significant amount of our management’s time and attention, any of which could negatively affect our business operations and financial position. 38 We incur significant costs as a result of operating as a public company.
Litigation disputes could cause us to incur unforeseen expenses, result in content unavailability, service disruptions and otherwise occupy a significant amount of our management’s time and attention, any of which could negatively affect our business operations and financial position. We incur significant costs as a result of operating as a public company.
We use this data, among other things, to evaluate growth trends, measure our performance and make strategic decisions. Reliance on such unconfirmed or unpublished data could lead us to make incorrect calculations, incorrect business decisions or inefficiencies, particularly if these third parties provide inaccurate or incomplete data.
We use this data, among other things, to evaluate growth trends, measure our performance and make strategic decisions. Reliance on such unconfirmed or unpublished data could lead us to make incorrect calculations or business decisions or incur inefficiencies, particularly if these third parties provide inaccurate or incomplete data.
The following factors may affect us from period-to-period and may affect our long-term performance: • our ability to maintain and develop new and existing revenue-generating relationships; • our ability to improve or maintain gross margins in our business; • the amount and timing of operating costs and capital expenditures relating to expansion of our business, operations and governance; 13 • our ability to significantly increase our subscriber base and retain customers; • our ability to enforce our contracts and collect receivables from third parties; • our ability to develop, acquire and maintain an adequate breadth and depth of content via original productions, co-productions, commissions and/or licenses; • changes by our competitors to their product and service offerings; • increased competition; • our ability to detect and comply with data collection and privacy regulation and customer questions related thereto in every jurisdiction in which we operate; • changes in promotional support or other aspects of our relationships with our partners through which we make our service available, including the MVPDs and/or the vMVPDs, through which we offer our content; • our ability to effectively manage the development of new business segments and markets, and determine appropriate contract and licensing terms; • our ability to maintain and develop new and existing marketing relationships; • our ability to maintain, upgrade and develop our website, our applications through which we offer our service on our customers’ devices and our internal computer systems; • fluctuations in the use of the internet for the purchase of consumer goods and services such as those offered by us; • technical difficulties, system downtime or internet disruptions; • our ability to attract new and qualified personnel in a timely and effective manner and retain existing personnel; • conflicts of interest involving our founder and principal stockholder, John Hendricks; • our ability to attract and retain sponsors and prove that our sponsorship offerings are effective enough to justify a pricing structure that is profitable for us; • the success of our content licensing to other media companies; • our ability to successfully manage the integration of operations and technology resulting from possible future acquisitions; • governmental regulation and taxation policies; and • general economic conditions and economic conditions specific to the internet, online commerce and the media industry.
The following factors may affect us from period-to-period and may affect our long-term performance: • our ability to maintain and develop new and existing revenue-generating relationships; • our ability to improve or maintain gross margins in our business; • the amount and timing of operating costs and capital expenditures relating to expansion of our business, operations and governance; • our ability to significantly increase our subscriber base and retain customers; • our ability to enforce our contracts and collect receivables from third parties; • our ability to develop, acquire and maintain an adequate breadth and depth of content via original productions, co-productions, commissions and/or licenses; • changes by our competitors to their product and service offerings; • increased competition; 8 Table of Contents • our ability to detect and comply with data collection and privacy regulation and customer questions related thereto in every jurisdiction in which we operate; • changes in promotional support or other aspects of our relationships with our partners through which we make our service available, including the MVPDs and/or the vMVPDs, through which we offer our content; • our ability to effectively manage the development of new business segments and markets, and determine appropriate contract and licensing terms; • our ability to maintain and develop new and existing marketing relationships; • our ability to maintain, upgrade and develop our website, our applications through which we offer our service on our customers’ devices and our internal computer systems; • fluctuations in the use of the internet for the purchase of consumer goods and services such as those we offer; • technical difficulties, system downtime or internet disruptions; • our ability to attract new and qualified personnel in a timely and effective manner and retain existing personnel; • conflicts of interest involving our founder and principal stockholder, John Hendricks; • our ability to attract and retain sponsors and prove that our sponsorship offerings are effective enough to justify a pricing structure that is profitable for us; • the success of our content licensing to other media companies; • our ability to successfully manage the integration of operations and technology resulting from possible future acquisitions; • governmental regulation and taxation policies; and • general economic conditions and economic conditions specific to the internet, online commerce and the media industry.
These expenses incurred by public companies generally for reporting and corporate governance purposes have been increasing. We expect these rules and regulations to continue to increase our legal and financial compliance costs and to make some activities more difficult, time-consuming and costly.
The expenses incurred by public companies for reporting and corporate governance purposes have generally been increasing. We expect these rules and regulations to continue to increase our legal and financial compliance costs and to make some activities more difficult, time-consuming and costly.
If current 22 expectations are not met, or if market factors outside of our control change significantly, then our reporting unit or intangible assets might become impaired in the future, adversely affecting our operating results and financial position.
If current expectations are not met, or if market factors outside of our control change significantly, then our reporting unit or intangible assets might become impaired in the future, adversely affecting our operating results and financial position.
As our offerings evolve, we are 14 managing and adjusting our business to address varied content offerings, consumer customs and practices, different technology infrastructure, different markets for factual video content, as well as differing legal and regulatory environments.
As our offerings evolve, we are managing and adjusting our business to address varied content offerings, consumer customs and practices, different technology infrastructure, different markets for factual video content, as well as differing legal and regulatory environments.
The CCPA provides for civil penalties for violations, as well as a private right of action with statutory damages for certain data breaches, which may increase the frequency and likelihood of data breach litigation.
The CCPA provides for civil penalties for violations, as well as a private right of action with statutory damages for certain data security breaches, which may increase the frequency and likelihood of data breach litigation.
See “—We are at risk of attempts at unauthorized access to our service, and failure to effectively prevent and remediate such attempts could have an adverse impact on our business, operating results, and financial condition.” We rely on subscription data provided by our third-party distributors and platform partners that has not been independently verified and inaccuracies in that data may seriously harm and adversely affect our reputation and our business.
See “ We are at risk of attempts at unauthorized access to our service through cyberattacks, and failure to effectively prevent and remediate such attempts could have an adverse impact on our business, operating results and financial condition .” We rely on subscription data provided by our third-party distributors and platform partners that has not been independently verified, and inaccuracies in that data may seriously harm and adversely affect our reputation and our business.
Furthermore, if one or more of the analysts 34 who do cover us downgrade our stock or industry, or the stock of any of our competitors, or publish inaccurate or unfavorable research about our business, the price of our stock could decline.
Furthermore, if one or more of the analysts who do cover us downgrade our stock or industry, or the stock of any of our competitors, or publish inaccurate or unfavorable research about our business, the price of our stock could decline.
Service interruptions, errors in our software or the unavailability of computer systems used in our operations, delivery or user interface could diminish the overall attractiveness of our user service to existing and potential users.
Service interruptions, errors in our software or the unavailability of computer systems or data used in our operations, delivery or user interface could diminish the overall attractiveness of our user service to existing and potential users.
In the ordinary course of business and in particular in connection with content acquisition and merchandising our service to our users, we collect and utilize data supplied by or obtained from our users.
In the ordinary course of business and in particular in connection with content acquisition and merchandising our service to our users, we collect and utilize personal data supplied by or obtained from our users.
Interruptions in, destruction or manipulation of these 26 systems, or with the internet in general, could make our service unavailable or degraded or otherwise hinder our ability to deliver streaming content.
Interruptions in, destruction or manipulation of these systems, or with the internet in general, could make our service unavailable or degraded or otherwise hinder our ability to deliver streaming content.
In addition to the risks that we face in the United States, our international operations involve risks that could adversely affect our business, including: • new and different sources of competition; • different and more stringent user protection, data protection, privacy and other laws, including data localization requirements; • adverse tax consequences such as those related to changes in tax laws or tax rates or their interpretations, and the related application of judgment in determining our global provision for income taxes, deferred tax assets or liabilities or other tax liabilities given the ultimate tax determination is uncertain; • different or more onerous or costly rights society collection royalties and charges; • the need to adapt our content and user interfaces for specific cultural and language differences, including in-licensing a certain portion of our content assets before we have developed a full appreciation for its performance within a given territory; • difficulties in complying with territorial licenses; • difficulties and costs associated with staffing and managing foreign operations; • management distraction; • political or social unrest, global hostilities and economic instability, including the military invasion of Ukraine by Russian forces and the economic sanctions imposed by the U.S. and other nations on Russia, Belarus and certain Russian organizations and individuals; • compliance with U.S. laws such as the Foreign Corrupt Practices Act, export controls and economic sanctions, and local laws prohibiting corrupt payments to government officials; • difficulties in understanding and complying with local laws, regulations and customs in foreign jurisdictions; 31 • regulatory requirements or government action against our service, whether in response to enforcement of actual or purported legal and regulatory requirements or otherwise, that results in disruption or non-availability of our service or particular content in the applicable jurisdiction; • foreign intellectual property laws, such as the EU copyright directive, or changes to such laws, which may be less favorable than U.S. law and, among other issues, may impact the economics of creating or distributing content, anti-piracy efforts, or our ability to protect or exploit intellectual property rights; • fluctuations in currency exchange rates, which have and may continue to impact revenues and expenses of our international operations and expose us to foreign currency exchange rate risk, which we do not currently hedge against but may do so in the future; • profit repatriation and other restrictions on the transfer of funds; • differing payment processing systems as well as consumer use and acceptance of electronic payment methods, such as payment cards; • censorship requirements that cause us to remove or edit content or make other accommodations that lead to consumer disappointment or dissatisfaction with our service; • low usage and/or penetration of internet-connected consumer electronic devices; • availability of reliable broadband connectivity and wide area networks in targeted areas for expansion; • integration and operational challenges as well as potential unknown liabilities in connection with companies we may acquire or control; • differing, and often more lenient, laws and consumer understanding/attitudes regarding the illegality of piracy; • negative impacts from trade disputes; and • implementation of regulations designed to stimulate the local production of film and TV series in order to promote and preserve local culture and economic activity, including local content quotas, investment obligations, and levies to support local film funds.
In addition to the risks that we face in the U.S., our international operations involve risks that could adversely affect our business, including: • new and different sources of competition; • different and more stringent user protection, data protection, privacy and other laws, including data localization requirements; • adverse tax consequences such as those related to changes in tax laws or tax rates or their interpretations, and the related application of judgment in determining our global provision for income taxes, deferred tax assets or liabilities or other tax liabilities given the ultimate tax determination is uncertain; • different or more onerous or costly rights society collection royalties and charges; • the need to adapt our content and user interfaces for specific cultural and language differences, including in-licensing a certain portion of our content assets before we have developed a full appreciation for its performance within a given territory; • difficulties in complying with territorial licenses; • difficulties and costs associated with staffing and managing foreign operations; • management distraction; • political or social unrest, global hostilities and economic instability, including the Israel-Hamas war, as well as the military invasion of Ukraine by Russian forces and the economic sanctions imposed by the U.S. and other nations on Russia, Belarus and certain Russian organizations and individuals; • compliance with U.S. laws such as the Foreign Corrupt Practices Act, export controls and economic sanctions, and local laws prohibiting corrupt payments to government officials; • difficulties in understanding and complying with local laws, regulations and customs in foreign jurisdictions; • regulatory requirements or government action against our service, whether in response to enforcement of actual or purported legal and regulatory requirements or otherwise, that results in disruption or non-availability of our service or particular content in the applicable jurisdiction; 24 Table of Contents • foreign intellectual property laws, such as the EU copyright directive, or changes to such laws, which may be less favorable than U.S. law and, among other issues, may impact the economics of creating or distributing content, anti-piracy efforts, or our ability to protect or exploit intellectual property rights; • fluctuations in currency exchange rates, which have and may continue to impact revenues and expenses of our international operations and expose us to foreign currency exchange rate risk, which we do not currently hedge against but may do so in the future; • profit repatriation and other restrictions on the transfer of funds; • differing payment processing systems as well as consumer use and acceptance of electronic payment methods, such as payment cards; • censorship requirements that cause us to remove or edit content or make other accommodations that lead to consumer disappointment or dissatisfaction with our service; • low usage and/or penetration of internet-connected consumer electronic devices; • availability of reliable broadband connectivity and wide area networks in targeted areas for expansion; • integration and operational challenges as well as potential unknown liabilities in connection with companies we may acquire or control; • differing, and often more lenient, laws and consumer understanding/attitudes regarding the illegality of piracy; • negative impacts from trade disputes; and • implementation of regulations designed to stimulate the local production of film and television series in order to promote and preserve local culture and economic activity, including local content quotas, investment obligations, and levies to support local film funds.
These provisions provide for, among other things: • the ability of our Board to issue one or more series of preferred stock; • advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings; • certain limitations on convening special stockholder meetings; • limiting the ability of stockholders to act by written consent; • providing that our Board is expressly authorized to make, alter or repeal our Bylaws; • the removal of directors only for cause and only upon the affirmative vote of holders of at least a majority of the shares of Common Stock entitled to vote generally in the election of directors; and • that certain provisions may be amended only by the affirmative vote of at least 66.7% of the shares of Common Stock entitled to vote generally in the election of directors.
These provisions provide for, among other things: • the ability of our Board to issue one or more series of preferred stock; • advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings; • certain limitations on convening special stockholder meetings; • limiting the ability of stockholders to act by written consent; • providing that our Board is expressly authorized to make, alter or repeal our Bylaws; 29 Table of Contents • the removal of directors only for cause and only upon the affirmative vote of holders of at least a majority of the shares of Common Stock entitled to vote generally in the election of directors; and • that certain provisions may be amended only by the affirmative vote of at least 66.7% of the shares of Common Stock entitled to vote generally in the election of directors.
If we are not able to manage our growth, our business could be adversely affected. We have expanded rapidly since we launched our subscription service in March 2015. We anticipate that further expansion of our operations will be required to achieve significant growth in our products, lines of business and user base and to take advantage of favorable market opportunities.
If we are not able to manage our growth, our business could be adversely affected. We have expanded significantly since we launched our subscription service in March 2015. We anticipate that further expansion of our operations will be required to achieve significant growth in our products, lines of business and user base and to take advantage of favorable market opportunities.
As a result, the information we provide to stockholders will be different than the information that is available with respect to other public companies. For example, in the proxy statement for the 2023 Annual Meeting, we will not include all of the executive compensation related information that would be required if we were not an emerging growth company.
As a result, the information we provide to stockholders will be different than the information that is available with respect to other public companies. For example, in the proxy statement for the 2024 Annual Meeting, we will not include all of the executive compensation related information that would be required if we were not an emerging growth company.
If our efforts to build a strong brand identity and improve user satisfaction and loyalty are not successful, we may not be able to attract or retain users, and our operating results may be adversely affected. The CuriosityStream brand is only eight years old, and we must continue to build a strong brand identity.
If our efforts to build a strong brand identity and improve user satisfaction and loyalty are not successful, we may not be able to attract or retain users, and our operating results may be adversely affected. The CuriosityStream brand is only nine years old, and we must continue to build a strong brand identity.
If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines that we have a material weakness in our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our securities could decline, and we could be subject to sanctions or investigations by NASDAQ, the SEC or other regulatory authorities.
If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines that we have a material weakness in our internal control over financial reporting, 33 Table of Contents investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our securities could decline, and we could be subject to sanctions or investigations by NASDAQ, the SEC or other regulatory authorities.
Risks Related to Information Technology Any significant disruption in or unauthorized access to our computer systems or those of third parties that we utilize in our operations, including those relating to cybersecurity or arising from cyber-attacks, could result in a loss or degradation of service, unauthorized disclosure of data, including user and corporate information, or theft of intellectual property, including digital content assets, which could adversely impact our business.
RISKS RELATED TO INFORMATION TECHNOLOGY Any significant disruption in or unauthorized access to our computer systems or those of third parties that we utilize in our operations, including those relating to cybersecurity or arising from cyber-attacks, could result in a loss or degradation of service, unauthorized access, harm to our reputation, disclosure or destruction of data, including user and corporate information, or theft of intellectual property, including digital content assets, which could adversely impact our business.
If U.S. or non-U.S. tax authorities change applicable tax laws, our overall taxes could increase, and our business, financial condition or results of operations may be adversely impacted. In particular, taxing authorities in many jurisdictions have targeted online platforms as a means to collect indirect taxes in connection with transactions taking place over the Internet.
If U.S. or non-U.S. tax authorities change applicable tax laws, our overall taxes could increase, and our business, financial condition or results of operations may be adversely impacted. 25 Table of Contents In particular, taxing authorities in many jurisdictions have targeted online platforms as a means to collect indirect taxes in connection with transactions taking place over the internet.
We have architected our software and computer systems so as to utilize data processing, storage capabilities and other services provided by AWS. Currently, we run the vast majority of our computing on AWS. In addition, Amazon’s retail division competes with us for users, and Amazon could use, or restrict our use of, AWS to gain a competitive advantage against us.
We have architected our software and computer systems so as to utilize data processing, storage capabilities and other services provided by AWS. Currently, we run the vast majority of our computing on AWS. In addition, Amazon.com’s retail division competes with us for users, and Amazon.com could use, or restrict our use of, AWS to gain a competitive advantage against us.
We rely on third parties to process payment. Acceptance and processing of these payment methods are subject to certain rules, regulations, and industry standards, including data storage requirements, additional authentical requirements for certain payment methods, and require payment of interchange and other fees.
We rely on third parties to process payment. Acceptance and processing of these payment methods are subject to certain rules, regulations, and industry standards, including data storage requirements, additional authentication requirements for certain payment methods, and require payment of interchange and other fees.
Any future expansion will likely place significant demands on our managerial, operational, administrative and financial resources. If we are not able to respond effectively to new or increased demands that arise because of our growth, or, if in responding, our management is materially distracted from our current operations, our business may be adversely affected.
Any future expansion will likely place significant demands on our managerial, operational, administrative and financial resources. If we are unable to respond effectively to new or increased demands that arise because of our growth, or, if in responding, our management is materially distracted from our current operations, our business may be adversely affected.
Declines in the market price of our Common Stock or failure of the market price to increase could also harm our ability to retain key employees, reduce our access to capital, incur impairment charges and otherwise harm our business.
Declines in the market price of our Common Stock or failure of the market price to increase could also harm our ability to retain key employees, reduce our access to capital, cause us to incur impairment charges and otherwise harm our business.
Given the multiple-year duration and largely fixed cost nature of content commitments, if user acquisition and retention do not meet our expectations, our margins may be adversely impacted.
Given the multi-year duration and largely fixed-cost nature of our content commitments, if user acquisition and retention do not meet our expectations, our margins may be adversely impacted.
During the year ended December 31, 2022, there was a decline in the Company’s market capitalization, based upon the Company’s publicly quoted share price, below the Company’s carrying or book value.
During the year ended December 31, 2023, there was a decline in the Company’s market capitalization, based upon the Company’s publicly quoted share price, below the Company’s carrying or book value.
If we are unable to successfully or profitably compete with current and new competitors, our business will be adversely affected, and we may not be able to increase or maintain market share and revenues or achieve profitability. 19 If government regulations relating to the internet or other areas of our business change, we may need to alter the manner in which we conduct our business or incur greater operating expenses.
If we are unable to successfully or profitably compete with current and new competitors, our business will be adversely affected, and we may not be able to increase or maintain market share and revenues or achieve profitability. 14 Table of Contents If government regulations relating to the internet or other areas of our business change, we may need to alter the manner in which we conduct our business or incur greater operating expenses.
We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of the IPO, or (b) in which we have total annual gross revenue of at least $1.235 billion, (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period and (3) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.
We will remain an emerging growth company until the earlier of (i) the last day of the fiscal year (a) following the fifth anniversary of the completion of the IPO, or (b) in which we have total annual gross revenue of at least $1.235 billion, (ii) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period and (iii) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.
For example, recent changes to European law enables individual member states to impose levies and other financial obligations on media operators located outside their jurisdiction.
For example, recent changes to European law enable individual member states to impose levies and other financial obligations on media operators located outside their jurisdiction.
Certain laws intended to prevent network operators from discriminating against the legal traffic that traverse their networks have been implemented in many countries, including across the EU. In others, the laws may be nascent or non-existent. Furthermore, favorable laws may change, including for example, in the United States where net neutrality regulations were somewhat recently repealed.
Certain laws intended to prevent network operators from discriminating against the legal traffic that traverse their networks have been implemented in many countries, including across the EU. In others, the laws may be nascent or non-existent. Furthermore, favorable laws may change, including for example, in the U.S. where net neutrality regulations were somewhat recently repealed.
Of the titles that expire in 2023 and 2024, some may be renewed for a one- or two-year term at our unilateral option.
Of the titles that expire in 2024 and 2025, some may be renewed for a one- or two-year term at our unilateral option.
We may decide to remove content from our service, not to place licensed or produced content on our service or discontinue or alter production of original content if we believe such content might not be well received by our users or could be damaging to our brand.
We may decide to remove content from our service, not to place licensed or produced content on our service or discontinue or alter production of original content if we believe such content might not be well received by our users, is prohibited by law or could be damaging to our brand.
It should be noted that since unauthorized access to our service may in the future happen through exploitation of software vulnerabilities, once a new method of doing so is developed by third parties, the level of unauthorized access (and attendant negative financial impact described above, if at all) may increase over time as third parties share the method until we find a way to prevent the unauthorized access, assuming we are able to do so at all.
Since unauthorized access to our service may in the future happen through exploitation of software vulnerabilities, once a new method of doing so is developed by third parties, the level of unauthorized access (and attendant negative financial impact described above, if at all) may increase over time as third parties share the method until we find a way to prevent the unauthorized access, assuming we are able to do so at all.
Our Charter provides that the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Notwithstanding the foregoing, the exclusive forum provision shall not apply to claims seeking to enforce any liability or duty created by the Exchange Act.
Our Charter provides that the federal district courts of the U.S. shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Notwithstanding the foregoing, the exclusive forum provision shall not apply to claims seeking to enforce any liability or duty created by the Exchange Act.
Many of the companies that are participating in the United States and global SVOD media sector have longer operating histories, larger and broader user bases, significantly greater financial, human, technical and other resources and greater name recognition than we do. These companies, which include Netflix, Amazon, Hulu, Paramount, Comcast, BBC, PBS, Fox Networks, Warner Bros.
Many of the companies that are participating in the U.S. and global SVOD media sector have longer operating histories, larger and broader user bases, significantly greater financial, human, technical and other resources and greater name recognition than we do. These companies, which include Netflix, Amazon.com, Hulu, Paramount, Comcast, BBC, PBS, Fox Networks, Warner Bros.
To achieve and sustain profitability, we must accomplish numerous objectives, including broadening and stabilizing our sources of revenue, increasing the number of paying subscribers to our service and increasing the price subscribers pay to access our service. Accomplishing these objectives will require significant capital investments. We cannot assure you that we will be able to achieve these objectives.
To achieve and sustain profitability, we must accomplish numerous objectives, including broadening and stabilizing our sources of revenue, increasing the number of paying subscribers to our service and increasing the price subscribers pay to access our service. Accomplishing these objectives will require significant rationalization of costs. We cannot assure you that we will be able to achieve these objectives.
Our calculation of total paying subscribers includes the subscribers who are accessing our service via a third-party distributor or platform partner. We rely on these third-party distributors and platform partners to provide us with subscriber data. This data is based on verbal, unpublished or confidential reports and has not been validated by us or an independent third party.
Our calculation of total paying subscribers includes the subscribers who are accessing our service via a third-party distributor or platform partner. We rely on these third-party distributors and platform partners to provide us with subscriber data. This data may be based on verbal, unpublished or confidential reports and may not have been validated by us or an independent third party.
Such systems may periodically experience directed attacks intended to lead to interruptions and delays in our service and operations as well as loss, misuse or theft of data or intellectual property.
Such systems have previously and may continue to periodically experience directed attacks intended to lead to interruptions and delays in our service and operations as well as loss, misuse or theft of data or intellectual property.
Our business is growing and becoming more complex, and our success depends on our ability to quickly develop and launch new and innovative services. We believe our culture fosters this goal. Our focus on complexity and quick reactions could result in unintended outcomes or decisions that are poorly received by our users, advertisers, sponsors or partners.
Our business is evolving and has become more complex, and our success depends on our ability to quickly develop and launch new and innovative services. We believe our culture fosters this goal. Our focus on complexity and quick reactions could result in unintended outcomes or decisions that are poorly received by our users, advertisers, sponsors or partners.
Failure to comply with these obligations could subject us to liability, and to the extent that we need to alter our business model or practices to adapt to these obligations, we could incur additional expenses. 30 Our reputation and relationships with users would be harmed if our user data, particularly billing data, were to be accessed by unauthorized persons.
Failure to comply with these obligations could subject us to liability, and to the extent that we need to alter our business model or practices to adapt to these obligations, we could incur additional expenses. 31 Table of Contents Our reputation and relationships with users would be harmed if our user data, particularly billing data, were to be accessed by unauthorized persons.
The stockholder parties also may pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities may not be available to us. 35 We are an “emerging growth company,” and the reduced disclosure requirements applicable to emerging growth companies may make our Common Stock less attractive to investors.
The stockholder parties also may pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities may not be available to us. 28 Table of Contents We are an “emerging growth company,” and the reduced disclosure requirements applicable to emerging growth companies may make our Common Stock less attractive to investors.
Our Charter provides that, subject to limited exceptions, any (1) derivative action or proceeding brought on our behalf, (2) action asserting a claim of breach of a fiduciary duty owed by any director, officer, stockholder or employee to us or our stockholders, (3) action asserting a claim arising pursuant to any provision of the DGCL or our Charter or Bylaws, or (4) action asserting a claim governed by the internal affairs doctrine shall, to the fullest extent permitted by law, be exclusively brought in the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, another state or federal court located within the State of Delaware.
Our Charter provides that, subject to limited exceptions, any (i) derivative action or proceeding brought on our behalf, (ii) action asserting a claim of breach of a fiduciary duty owed by any director, officer, stockholder or employee to us or our stockholders, (iii) action asserting a claim arising pursuant to any provision of the DGCL or our Charter or Bylaws, or (iv) action asserting a claim governed by the internal affairs doctrine shall, to the fullest extent permitted by law, be exclusively brought in the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, another state or federal court located within the State of Delaware.
If our branding efforts are not successful, however, our ability to attract and retain users will be adversely affected, which may negatively impact our future operating results. 16 We may be unable to compete successfully against current and future competitors, and competitive pressures could harm our business and prospects.
If our branding efforts are not successful, however, our ability to attract and retain users will be adversely affected, which may negatively impact our future operating results. 11 Table of Contents We may be unable to compete successfully against current and future competitors, and competitive pressures could harm our business and prospects.
The maintenance of the internal control system to achieve compliance with the Sarbanes-Oxley Act may impose obligations on us and require substantial additional financial and management resources. Further, material weaknesses in our disclosure controls and internal control over financial reporting have been discovered in the past and may be discovered in the future.
The maintenance of the internal control system to achieve compliance with the Sarbanes-Oxley Act may impose obligations on us and require substantial additional financial and management resources. Further, a material weakness in our disclosure controls and internal control over financial reporting has been discovered in the past and may be discovered in the future.
Payment terms for certain content commitments, such as content we directly produce, will typically require more up-front cash payments than other content licenses or arrangements whereby we do not cash flow the production of such content.
Payment terms for certain content commitments, such as content we directly produce, will typically require more up-front cash payments than other content licenses or arrangements where we do not fund the production of such content.
For example, in 2022, we introduced a new, free ad-supported streaming channel on the LG channel platform, Curiosity Now, and our Smart Bundle plan. In addition, we may, from time to time, adjust our membership pricing, our membership plans, or our pricing model itself.
For example, in 2022, in an attempt to expand our service offerings, we introduced a new, free ad-supported streaming channel on the LG channel platform, Curiosity Now, and our Smart Bundle plan. In addition, we may, from time to time, adjust our membership pricing, our membership plans, or our pricing model itself.
Operating in international markets requires significant resources and management attention and will subject us to regulatory, economic and political risks that may be different from or incremental to those in the United States.
Operating in international markets requires significant resources and management attention and will subject us to regulatory, economic and political risks that may be different from or incremental to those in the U.S.
In addition, if we do not have sufficient breadth and depth of content necessary to satisfy increased demand arising from growth in our user base, our user satisfaction may be adversely affected. We are continuing to expand our operations internationally, scaling our service to effectively and reliably handle anticipated growth in both users and features related to our service.
In addition, if we do not have sufficient breadth and depth of content necessary to satisfy increased demand arising from growth in our user base, our user satisfaction may be adversely affected. We have expanded our operations internationally, seeking to effectively and reliably handle anticipated growth in both users and features related to our service.
In order to increase our revenues, we must minimize the rate of loss of existing users while adding new users to our DTC subscription service. Our experience during our operating history indicates that there are many variables that impact churn, including the type of plan selected, user engagement with the platform and length of a user’s subscription to date.
In order to increase our revenues, we must minimize the rate of loss of existing users while adding new users to our multiple subscription services. Our experience during our operating history indicates that many variables impact churn, including the type of plan selected, user engagement with the platform, length of a user’s subscription to date and subscription pricing.
We also enter into multi-year commitments for content that we produce, either directly or through third parties, including elements associated with these productions such as non-cancellable commitments under talent agreements.
In connection with licensing content, we typically enter into multi-year commitments with content providers. We also enter into multi-year commitments for content that we produce, either directly or through third parties, including elements associated with these productions such as non-cancellable commitments under talent agreements.
If it becomes necessary to implement any of these alternative measures, our business, results of operations or financial condition could be materially and adversely affected. Our cash and cash equivalents could be adversely affected if the financial institutions in which we hold our cash and cash equivalents fail.
If we were required to implement any of these alternative measures, our business, results of operations or financial condition could be materially and adversely affected. Our cash and cash equivalents could be adversely affected if the financial institutions in which we hold our cash and cash equivalents fail.
The statute is now enforceable by a new California data protection agency, the California Privacy Protection Agency, which is charged with, and has, issued detailed implementing regulations and used its enforcement authority aggressively. The Agency’s latest set of regulations are detailed and complex, and create significant administrative and operational burdens for our Company.
The statute is now enforceable by a new California data protection agency, the California Privacy Protection Agency, which has issued detailed implementing regulations and signaled intent to use its enforcement authority aggressively. The Agency’s latest set of regulations are detailed and complex, and create significant administrative and operational burdens for our Company.
Any attempt by hackers to obtain our data (including user and corporate information) or intellectual property (including digital content assets), disrupt our service, or otherwise access our systems, or those of third parties we use, if successful, could harm our business, be expensive to remedy, expose us to potential liability and damage our reputation.
Any attempt by hackers to obtain our data (including user and corporate information) or intellectual property (including digital content assets), disrupt our service, or otherwise access our systems, or those of third parties we use, if successful, could harm our business, be expensive to remedy, expose us to potential liability and damage our reputation. 21 Table of Contents We have implemented certain systems and processes to thwart hackers and protect our data and systems.
We do not currently maintain live fail-over capability that would allow us to instantaneously switch our streaming operations from AWS to another cloud provider in the event of a service outage at AWS. We house the primary, current copy of our library database at our main premises.
We do not currently maintain live fail-over capability that would allow us to instantaneously switch our streaming operations from AWS to another cloud provider in the event of a service outage at AWS. We house the original or primary copy of our library database at our principal operational offices.
If we are not able to manage the growing complexity of our business, including improving, refining or revising our systems and operational practices related to our operations and original content, our business may be adversely affected. Our business could be adversely impacted by costs and challenges associated with strategic acquisitions and investments, including joint ventures.
If we are not able to manage the growing complexity of our business in an efficient manner, including improving, refining or revising our systems and operational practices related to our operations and content development, our business may be adversely affected. 9 Table of Contents Our business could be adversely impacted by costs and challenges associated with strategic acquisitions and investments, including joint ventures.
Our obligations, including content obligations, may: • make it difficult for us to satisfy our other financial obligations; • limit our ability to use our cash flow, borrow additional funds or obtain other additional financing for future working capital, capital expenditures, acquisitions or other general business purposes; • require us to use a substantial portion of our cash flow from operations to make debt service payments and pay our other obligations when due; • limit our flexibility to plan for, or react to, changes in our business and industry; • place us at a competitive disadvantage compared to our less leveraged competitors; and • increase our vulnerability to the impact of adverse economic and industry conditions.
Our obligations, including content obligations, may: • make it difficult for us to satisfy our other financial obligations; • limit our ability to use our cash flow, borrow additional funds or obtain other additional financing for future working capital, capital expenditures, acquisitions or other general business purposes; • require us to use a substantial portion of our cash flow from operations to make debt service payments and pay our other obligations when due; • limit our flexibility to plan for, or react to, changes in our business and industry; • place us at a competitive disadvantage compared to our less leveraged competitors; and • increase our vulnerability to the impact of adverse economic and industry conditions. 20 Table of Contents The long-term and fixed cost nature of our content commitments may limit our operating flexibility and could adversely affect our liquidity and results of operations.
While the license periods and the terms and conditions of such licenses vary, a significant portion of our content is subject to license for a given period. As of December 31, 2022, approximately 78% of our SVOD titles were subject to licenses, approximately 16% of which expire in 2023 and approximately 48% of which expire in 2024.
While the license periods and the terms and conditions of such licenses vary, a significant portion of our content is subject to license for a given period. As of December 31, 2023, approximately 81% of our SVOD titles were subject to licenses, approximately 39% of which expire in 2024 and approximately 46% of which expire in 2025.
To the extent our original programming does not meet our expectations, in particular, in terms of costs, viewing and popularity, our business, including our brand and results of operations, may be adversely impacted. As a content producer, we are responsible for production costs and other expenses.
To the extent our original programming does not meet our expectations, in particular, in terms of costs, viewing and popularity, our business, including our brand and results of operations, may be adversely impacted. As a content producer, we are responsible for production costs and other expenses. We also take on risks associated with production, such as completion risk.
Our computer systems, mobile and other applications and systems of third parties we use in our operations are vulnerable to cybersecurity risks, including cyber-attacks and loss of confidentiality, integrity or availability, both from state-sponsored and individual activity, such as hacks, unauthorized access, computer viruses, denial of service attacks, physical or electronic break-ins and similar disruptions and destruction.
Our computer systems, mobile and other applications and systems of third parties we use in our operations are vulnerable to constantly evolving cybersecurity risks, including cyber-attacks and loss of confidentiality, integrity or availability, both from state-sponsored and individual activity, such as hacks, unauthorized access, computer viruses, denial of service attacks, physical or electronic break-ins, malware, ransomware, insider threats, and misconfigurations in information systems, networks, software or hardware, errors and similar disruptions and destruction.
We intend to increase our revenues through expanding our subscriber base by, among other things, continuing to expand into international markets, expanding into the mobile video market, expanding into the 15 corporate social responsibility market, expanding into the branded partnerships market, developing our Content Licensing Business and developing our in-house production studio, Curiosity Studios.
We intend to increase our revenues through expanding our subscriber base by, among other things, continuing to expand into international markets, expanding into the mobile video market, expanding into the corporate social responsibility market, expanding into the branded partnerships market, developing our Content Licensing business and developing our in-house production studio, Curiosity Studios, as well as our increasing focus on AVOD, TVOD and FAST channels.
In addition, there is an increasing focus from regulators, investors, members and other stakeholders on environmental, social, and governance (“ESG”) matters, both in the United States and internationally. To the extent the content we distribute and the manner in which we produce content creates ESG related concerns, our reputation may be harmed.
In addition, there is an increasing focus from regulators, investors, members and other stakeholders on environmental, social, and governance (“ESG”) matters, both in the U.S. and internationally, including the adoption of new disclosure and regulatory frameworks. To the extent the content we distribute and the manner in which we produce content creates ESG related concerns, our reputation may be harmed.
In addition, from time to time, we encounter fraudulent use of payment methods, which could impact our results of operation and if not adequately controlled and managed could create negative perceptions of our service. Distributors’ failure to promote our content could adversely affect our revenue and could adversely affect our business results.
In addition, from time to time, we encounter fraudulent use of payment methods, which could impact our results of operation and if not adequately controlled and managed could create negative perceptions of our service.
In the event that portions of our proprietary technology are determined to be subject to certain open source licenses, we may be required to publicly release the affected portions of our source code, be forced to re-engineer all or a portion of our technologies, or otherwise be limited in the licensing of our technologies, each of which could reduce the value of our services and technologies and materially and adversely affect our ability to sustain and grow our business. 28 Changes in how network operators handle and charge for access to data that travel across their networks could adversely impact our business.
In the event that portions of our proprietary technology are determined to be subject to certain open source licenses, we may be required to publicly release the affected portions of our source code, be forced to re-engineer all or a portion of our technologies, or otherwise be limited in the licensing of our technologies, each of which could reduce the value of our services and technologies and materially and adversely affect our ability to sustain and grow our business.
We also utilize our own and third-party content delivery networks to help us stream factual entertainment in high volume to CuriosityStream users over the internet.
In addition, we utilize third-party “cloud” computing services in connection with our business operations. We also utilize our own and third-party content delivery networks to help us stream factual entertainment in high volume to CuriosityStream users over the internet.
We cannot predict the courts’ views of the theories asserted in the cases brought against streaming services under the VPPA, and thus we cannot predict the likely outcome of the claims against the streaming services who are defendants in these cases.
We cannot reliably predict the courts’ or arbitrators' views of the theories asserted in the cases brought against online streaming services under the VPPA, and thus we cannot predict the likely outcome of the claims against ourselves and other streaming services that are defendants in these cases.
In the past, following periods of market volatility, stockholders have instituted securities class action litigation. If we were involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation.
If we were involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation.
These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that it deems appropriate.
These sales, or the possibility that these sales may occur, also might impede our ability to sell equity securities in the future at a time and at a price that it deems appropriate.
If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, we could lose visibility in the market, which in turn could cause our stock price or trading volume to decline.
If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, we could lose visibility in the market, which in turn could cause our stock price or trading volume to decline. There can be no assurance that we will continue to declare cash dividends.
The plaintiffs in these cases are seeking damages on a class-wide basis, understanding the VPPA provides for statutory damages of up to $2,500 per violation, as well as other potential relief. The U.S.
The plaintiffs in these cases are seeking damages for class members, including statutory damages of up to $2,500 per violation, as well as other potential relief. The U.S.
We will not always control the timing and manner in which our licensed distributors distribute our content offerings. However, their decisions regarding the timing of release and promotional support are important in 18 determining success.
Distributors’ failure to promote our content could adversely affect our revenue and could adversely affect our business results. We will not always control the timing and manner in which our licensed distributors distribute our content offerings. However, their decisions regarding the timing of release and promotional support are important in determining success.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe that this facility is adequate to meet our current and near-term needs. 39 Our computing needs are primarily serviced from our cloud infrastructure provided by Amazon Web Services. We retain backup copies of our content on our own data center infrastructure. The backup sites enable additional fault tolerance and will support our continued growth.
Biggest changeWe believe that this facility is adequate to meet our current and near-term needs. 34 Table of Contents Our computing needs are primarily serviced from our cloud infrastructure provided by Amazon Web Services. We retain backup copies of our content on our own data center infrastructure. The backup sites enable additional fault tolerance and will support our continued growth.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are not presently a party to any legal proceedings that, if determined adversely to us, we believe would individually or in the aggregate have a material adverse effect on our business, results of operations, financial condition or cash flows. Item 4. Mine Safety Disclosures Not applicable. 40 Part II
Biggest changeWe are not presently a party to any legal proceedings that, if determined adversely to us, we believe would individually or in the aggregate have a material adverse effect on our business, results of operations, financial condition or cash flows. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 35 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Common Stock and Warrants are traded on NASDAQ under the symbols “CURI” and “CURIW,” respectively. Dividends We have never declared or paid any cash dividends on our Common Stock.
Biggest changeITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES MARKET INFORMATION Our Common Stock and Warrants are traded on NASDAQ under the symbols “CURI” and “CURIW,” respectively. DIVIDENDS We have not declared or paid any cash dividends on our Common Stock from the time we incorporated through December 31, 2023.
Payment of future dividends, if any, will be at the discretion of our Board and will depend on our financial condition, results of operations, capital requirements, restrictions contained in current or future financing instruments, provisions of applicable law, and other factors our Board deems relevant.
Payment of future dividends, if any, will be at the discretion of and subject to future declaration by the Board and will depend on our financial condition, results of operations, capital requirements, restrictions contained in current or future financing instruments, provisions of applicable law, and other factors our Board deems relevant.
Holders As of March 29, 2023, there were approximately 134 holders of record of our Common Stock, and 9 holders of record of our Warrants.
HOLDERS As of March 18, 2024, there were approximatel y 206 hol ders of record of our Common Stock, and 9 holders of record of our Warrants.
Removed
We currently intend to retain future earnings, if any, to finance the growth and development of our business. We do not expect to pay any cash dividends on our Common Stock in the foreseeable future.
Added
On March 13, 2024, the Board declared a regular quarterly cash dividend of $0.025 per share of Common Stock, equivalent to $0.10 per share of Common Stock on an annual basis. The first cash dividend will be paid on April 30, 2024, to all holders of record of Common Stock at the close of business on April 12, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYear ended December 31, 2022 2021 $ Change % Change (in thousands) Revenues Subscriptions $ 35,009 45 % $ 24,821 35 % $ 10,188 41 % License fees 41,048 52 % 43,330 61 % (2,282 ) (5 %) Other 1,986 3 % 3,110 4 % (1,124 ) (36 %) Total Revenues $ 78,043 100 % $ 71,261 100 % $ 6,782 10 % Operating expenses Cost of revenues 51,536 39 % 36,673 30 % 14,863 41 % Advertising and marketing 40,709 30 % 52,208 42 % (11,499 ) (22 %) General and administrative 37,479 28 % 34,859 28 % 2,620 8 % Impairment of goodwill and intangible assets 3,603 3 % — 0 % 3,603 n/ m Total operating expenses $ 133,327 100 % $ 123,740 100 % $ 9,587 8 % Operating loss (55,284 ) (52,479 ) (2,805 ) 5 % Other income (expense) Change in fair value of warrant liability 5,404 15,182 (9,778 ) (64 %) Interest and other income 176 486 (310 ) (64 %) Equity interests loss (846 ) (464 ) (382 ) 82 % Loss before income taxes $ (50,550 ) $ (37,275 ) $ (13,275 ) 36 % Provision for income taxes 367 360 7 2 % Net loss $ (50,917 ) $ (37,635 ) $ (13,282 ) 35 % n/m – percentage not meaningful Revenue Revenue for the years ended December 31, 2022 and 2021 was $78.0 million and $71.2 million, respectively.
Biggest changeThrough new and long-standing international partnerships, we have localized a large portion of our video library from English to ten different languages. 37 Table of Contents RESULTS OF OPERATIONS The following table represents a summary of our Consolidated Statements of Operations for the years ended December 31, 2023, and 2022, and the discussion that follows compares the financial results for year ended December 31, 2023, to the year ended December 31, 2022: Year Ended December 31, $ Change % Change (in thousands) 2023 2022 Revenues Direct Business $ 34,592 61 % $ 34,120 44 % $ 472 1.4 % Content Licensing 14,047 25 % 24,691 32 % (10,644) (43 %) Bundled Distribution 6,316 11 % 11,726 15 % (5,410) (46 %) Enterprise 141 — % 5,520 7 % (5,379) (97 %) Other 1,793 3 % 1,986 3 % (193) (10 %) Total revenues $ 56,889 100 % $ 78,043 100 % $ (21,154) (27 %) Operating expenses Cost of revenues $ 35,553 35 % $ 51,536 39 % (15,983) (31 %) General and administrative 29,447 29 % 37,479 28 % (8,032) (21 %) Advertising and marketing 17,390 17 % 40,709 31 % (23,319) (57 %) Impairment of content assets 18,970 19 % — 0 % 18,970 n/m* Impairment of goodwill and intangible assets — — % 3,603 3 % (3,603) n/m* Total operating expenses $ 101,360 100 % $ 133,327 100 % $ (31,967) (24 %) Operating loss (44,471) (55,284) 10,813 (20 %) Other income (expense) Change in fair value of warrant liability 213 5,404 (5,191) (96 %) Interest and other income 1,272 176 1,096 623 % Equity interests loss (5,404) (846) (4,558) 539 % Loss before income taxes $ (48,390) $ (50,550) $ 2,160 (4 %) Provision for income taxes 506 367 139 38 % Net loss $ (48,896) $ (50,917) $ 2,021 (4 %) * Percentage not meaningful Operating loss for the years ended December 31, 2023, and 2022, was $44.5 million and $55.3 million, respectively.
If such changes are identified, the aggregated content library will be stated at the lower of unamortized cost or fair value. In addition, unamortized costs for assets that have been, or are expected to be, abandoned are written off.
If such changes are identified, the aggregated content library will be stated at the lower of unamortized cost or fair value. In addition, unamortized costs are written off for content assets that have been, or are expected to be abandoned.
The identification and measurement of goodwill impairment involves the estimation of fair value at the Company’s reporting unit level, which is the same or one level below the operating segment level. The Company determined that it has one reporting unit.
The identification and measurement of goodwill impairment involves the estimation of fair value at the Company’s reporting unit level, which is the same or one level below the operating segment level. The Company has determined that it has one reporting unit.
Prior periods were not retrospectively adjusted. The adoption of this standard resulted in the recognition of operating lease liabilities of $5.3 million, with corresponding right-of-use (ROU) assets in the amount of $4.0 million, net of existing deferred rent and lease 52 incentives of $1.3 million. The Company did not have any finance lease liabilities as of the adoption date.
Prior periods were not retrospectively adjusted. The adoption of this standard resulted in the recognition of operating lease liabilities of $5.3 million, with corresponding right-of-use (ROU) assets in the amount of $4.0 million, net of existing deferred rent and lease incentives of $1.3 million. The Company did not have any finance lease liabilities as of the adoption date.
ASU 2016-02 requires a lessee to recognize a lease liability and a right-of-use asset for each lease with a term longer than twelve months. The new guidance also requires additional qualitative and quantitative disclosures related to the nature, timing and uncertainty of cash flows arising from leases.
GAAP. ASU 2016-02 requires a lessee to recognize a lease liability and a right-of-use asset for each lease with a term longer than twelve months. The new guidance also requires additional qualitative and quantitative disclosures related to the nature, timing and uncertainty of cash flows arising from leases.
Under these agreements, the streaming media player 51 typically bills the subscriber directly and then remits the collected subscriptions to the Company, net of a distribution fee. The Company recognizes the gross subscription revenues when earned and simultaneously recognizes the corresponding distribution fees as an expense.
Under these agreements, the streaming media player typically bills the subscriber directly and then remits the collected subscriptions to the Company, net of a distribution fee. The Company recognizes the gross subscription revenues when earned and simultaneously recognizes the corresponding distribution fees as an expense.
If such changes are identified, the aggregated content assets will be stated at the lower of unamortized cost or fair value. In addition, unamortized costs for assets that have been, or are expected to be, abandoned are written off.
If such changes are identified, the aggregated content library will be stated at the lower of unamortized cost or fair value. In addition, unamortized costs are written off for content assets that have been, or are expected to be abandoned.
Content assets (licensed and produced) are predominantly monetized as a group and therefore are reviewed in aggregate at a group level when an event or change in circumstances indicates a change in the expected usefulness of the content or that the fair value may be less than unamortized cost.
Content assets are predominantly monetized as a group and therefore are reviewed in aggregate at a group level when an event or change in circumstances indicates a change in the expected usefulness of the content or that the fair value may be less than unamortized cost.
Certain amounts included in or affecting the financial statements presented in this Annual Report and related disclosure 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.
Certain amounts included in or affecting the financial statements presented in this Annual Report 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.
Content assets (licensed and produced) are predominantly monetized as a group and therefore are reviewed in aggregate at a group level when an event or change in circumstances indicates a change in the expected usefulness of the content or that the fair value may be less than unamortized cost.
Content assets are predominantly monetized as a group and therefore are reviewed in aggregate at a group level when an event or change in circumstances indicates a change in the expected usefulness of the content or that the fair value may be less than unamortized cost.
The Company performed an interim goodwill impairment test of its goodwill as of June 30, 2022 and recognized a goodwill impairment charge of $2.8 million during the three months ended June 30, 2022 as the fair value of the reporting unit was less than the related carrying value.
The Company performed an interim goodwill impairment test of its goodwill as of June 30, 2022, and recognized a goodwill impairment charge of $2.8 million for the three months ended June 30, 2022, as the fair value of the reporting unit was less than the related carrying value.
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 December 31, 2022, we had no off-balance sheet arrangements.
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 December 31, 2023, we had no off-balance sheet arrangements.
During the second quarter of 2022, the Company also determined there were impairment indicators with respect to certain of the Company’s definite-lived intangible assets. As a result, the Company performed an impairment test by comparing the carrying values of the intangible assets to their respective fair values, which were determined based on forecasted future cash flows.
During the second quarter of 2022, the Company also identified the existence of impairment indicators with respect to certain of the Company’s definite-lived intangible assets. As a result, the Company performed an impairment test by comparing the carrying values of the intangible assets to their respective fair values, which were determined based on forecasted future cash flows.
This charge is included in impairment of goodwill and intangible assets on the Company’s consolidated statement of operations for the year ended December 31, 2022. The determination of the fair value of the Company’s reporting unit was based on a combination of the income and the market approach.
This charge was included in impairment of goodwill and intangible assets in the Company’s consolidated statements of operations for the year ended December 31, 2022. The determination of the fair value of the Company’s reporting unit was based on a combination of the income and the market approach.
Key Factors Affecting Results of Operations 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.
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.
The net cash outflow used by operating activities for the year ended December 31, 2022, was primarily due to our $50.9 million net loss, $6.4 million addback of net non-cash expenses net of content additions, and $5.0 million of net cash provided by changes in operating assets and liabilities.
For the year ended December 31, 2022, net cash used by operating activities was primarily driven by our $50.9 million net loss, $6.4 million addback of net non-cash expenses net of content additions, and $5.0 million of net cash provided by changes in operating assets and liabilities.
Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us described in “Risk Factors” and elsewhere in this Annual Report on Form 10-K.
Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including the risks faced by us described in Risk Factors and elsewhere in this Annual Report on Form 10-K.
The Company’s business model is generally subscription based as opposed to a model generating revenues at a specific title level.
The Company’s primary business model is subscription-based as opposed to a model based on generating revenues at a specific title level.
The net cash inflow provided by investing activities for the year ended December 31, 2022, was primarily due to the sale and maturities of investments in debt securities of $66.8 million, partially offset by purchases of investments in debt securities of $1.5 million and investments in Nebula of $2.4 million.
The net cash inflow provided by investing activities was primarily due to the sale and maturities of investments in debt securities of $66.8 million, partially offset by purchases of investments in debt securities of $1.5 million and investments in Nebula of $2.4 million.
License Fees—Content Licensing The Company has distribution agreements which grant a licensee limited distribution rights to the Company’s programs for varying terms, generally in exchange for a fixed license fee. Revenue is recognized once the content is made available for the licensee to use.
The Company has distribution agreements which grant a licensee limited distribution rights to the Company’s programs for varying terms, generally in exchange for a fixed license fee. Revenue is recognized once the content is made available for the licensee to use. Partner Direct and Bundled Distribution.
Content Assets The Company acquires, licenses and produces content, including original programming, in order to offer customers unlimited viewing of factual entertainment content. The content licenses are for a fixed fee and specific windows of availability.
Content Assets The Company acquires, licenses and produces content, including original programming, in order to offer customers unlimited viewing of factual entertainment content. Content license terms generally include a fixed fee and specific windows of availability.
Furthermore, the amortization of original content is more accelerated than that of licensed content. We review factors that impact the amortization of the content assets on a regular basis and the estimates related to these factors require considerable management judgment.
Furthermore, the amortization of produced content is more accelerated than that of licensed content. The Company reviews factors that impact the amortization of the content assets on a regular basis and the estimates related to these factors require considerable management judgment.
As a result of this impairment test, the Company recorded an impairment charge of $0.8 million during the three months ended June 30, 2022, which is reflected as a component of impairment of goodwill and intangible assets on the Company’s consolidated statement of operations for the year ended December 31, 2022.
As a result of this impairment test, the Company recorded an impairment charge of $0.8 million during the three months ended June 30, 2022, which was included within impairment of goodwill and intangible assets in the Company’s consolidated statement of operations for the year ended December 31, 2022.
Provision for Income Taxes Due to generating losses before income taxes in each of the years ended December 31, 2022, and 2021, we had a provision for income taxes of $0.4 million in each respective period. The provision for income taxes is primarily related to foreign withholding income taxes.
Income Taxes For the years ended December 31, 2023, and 2022, we had a provision for income taxes of $0.5 million and $0.4 million, respectively, due to generating losses before income taxes in each year. The provision for income taxes is primarily related to foreign withholding income taxes.
The Company earns revenue under these agreements either based on the total number of subscribers multiplied by rates specified in the agreements or based on fixed fee arrangements. These revenues are recognized over the term of each agreement when earned.
In exchange, the Company licenses its content to the affiliates for distribution to their subscribers. The Company earns revenue under these agreements either based on the total number of subscribers multiplied by rates specified in the agreements or based on fixed fee arrangements. These revenues are recognized over the term of each agreement when earned.
Our video content is available directly through our O&O Service and App Services. 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, Sony) and gaming consoles like Xbox.
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.
Revenues are presented net of the taxes that are collected from subscribers and remitted to governmental authorities. Subscriptions—App Services The Company also earns subscription revenues through its App Services. These subscriptions are similar to the O&O Service subscriptions, but are generated based on agreements with certain streaming media players as well as with Smart TV brands and gaming consoles.
The Company also earns subscription revenues through its App Services. These subscriptions are similar to the O&O Service subscriptions, but are generated based on agreements with certain streaming media players as well as with Smart TV brands and gaming consoles.
There was no cumulative effect adjustment to the opening balance of accumulated deficit as of January 1, 2022. Adoption of this new guidance did not have a material impact on the consolidated statements of operations or cash flows. Refer to Note 13 for further information regarding the impact of adoption of Topic 842 on the Company’s consolidated financial statements.
There was no cumulative effect adjustment to the opening balance of accumulated deficit as of January 1, 2022. Adoption of this new guidance did not have a material impact on the consolidated statements of operations or cash flows.
Recently Issued and Adopted Financial Accounting Standards Leases As an EGC, the JOBS Act allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are applicable to private companies.
RECENT ACCOUNTING PRONOUNCEMENTS The JOBS Act allows the Company, as an EGC, to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are applicable to private companies.
We believe that our cash flows from financing, combined with our current cash levels and investments in debt securities 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 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.
The MVPD, vMVPD 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.
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.
Starting July 1, 2021, the Company amortizes content assets on an accelerated basis in the initial two months after a title is published on the Company’s platform, as the Company has observed and expects more upfront viewing of content, generally as a result of additional marketing efforts.
Based on factors including historical and estimated viewing patterns, the Company amortizes content assets on an accelerated basis in the initial two months after a title is published, as the Company has observed and expects more upfront viewing of content, generally as a result of additional marketing efforts.
If, after assessing the totality of relevant events and circumstances, the Company determines that it is more likely than not that the fair value of the reporting unit exceeds its carrying value and there is no indication of impairment, no further testing is performed; however, if the Company concludes otherwise, an impairment test must be performed by estimating the fair value of the reporting unit and comparing it with its carrying value, including goodwill.
If, after assessing the totality of relevant events and circumstances, the Company determines that it is more likely than not that the fair value of the reporting unit exceeds its carrying value and there is no indication of impairment, no further testing is performed.
Payments for content, including additions to content assets and the changes in related liabilities, are classified within “Net cash used in operating activities” on the consolidated statements of cash flows. 49 The Company recognizes its content assets (licensed and produced) as “Content assets, net” on the consolidated balance sheets.
Payments for content, including additions to content assets and the changes in related liabilities, are classified within “Net cash used in operating activities” on the consolidated statements of cash flows.
During the second quarter of 2022, the Company experienced a sustained decrease in its share price, and this triggering event was an indication that it was more likely than not that the fair value of the Company’s single 50 reporting unit was below its carrying value.
Measurement of any impairment loss is based on the amount by which the carrying value of the asset exceeds its fair value. 46 Table of Contents During the second quarter of 2022, the Company experienced a sustained decrease in its share price, and this triggering event was an indication that it was more likely than not that the fair value of the Company’s single reporting unit was below its carrying value.
We believe that we have access to additional funds, if needed, through the capital markets to obtain further financing under the current market conditions. Our principal uses of cash are to acquire content, promote our service through advertising and marketing, and provide for working capital to operate our business.
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.
For licenses, the Company capitalizes the fee per title and records a corresponding liability at the gross amount of the liability when the license period begins, the cost of the title is known, and the title is accepted and available for streaming. For productions, the Company capitalizes costs associated with the production, including development costs, direct costs, and production overhead.
For licensed content, the Company capitalizes the fee per title and records a corresponding liability at the gross amount of the liability when the license period begins, the cost of the title is known, and the title is accepted and available for streaming.
Currently, our premium Direct Service pricing and pricing for existing subscribers will remain unchanged. However, we may in the future increase the price of these existing 43 subscription plans, which may have a positive effect on our revenue from this line of our business.
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 components of changes in operating assets and liabilities were primarily attributed to an increase in accounts receivable of $11.9 million, and increase in other assets of $3.4 million, partially offset by a decrease in deferred revenue of $8.3 million, increase in accounts payable of $2.7 million, and decrease in accrued expenses and other liabilities of $4.6 million.
The components of changes in operating assets and liabilities were primarily attributed to an increase in accounts receivable of $11.9 million and increase in other assets of $3.4 million, partially offset by a decrease in deferred revenue of $8.3 million, increase in accounts payable of $2.7 million and decrease in accrued expenses and other liabilities of $4.6 million. 44 Table of Contents 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.
General and Administrative: General and administrative expenses for the year ended December 31, 2022, increased to $37.5 million from $34.9 million for the year ended December 31, 2021.
For the year ended December 31, 2023, general and administrative expenses decreased to $29.4 million from $37.5 million for the year ended December 31, 2022.
Goodwill and Intangible Assets Goodwill represents the excess of the cost of acquisitions over the amount assigned to tangible and identifiable intangible assets acquired less liabilities assumed. At least annually, in the fourth quarter of each fiscal year or more frequently if indicators of impairment exist, management performs a review to determine if the carrying value of goodwill is impaired.
At least annually, in the fourth quarter of each fiscal year or more frequently if indicators of impairment exist, management performs a review to determine if the carrying value of goodwill is impaired.
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. We generate our revenue through six products and services: Direct to Consumer Business, Partner Direct Business, Bundled Distribution, Content Licensing, Enterprise Subscriptions and 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.
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. 42 In addition to our Direct to Consumer and Partner Direct businesses, we have 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 on-demand content library, mobile rights and pricing and packaging flexibility, in exchange for an annual fixed fee or fee per subscriber.
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.
We do not incur billing, streaming or backend costs associated with content distribution through our MVPD, vMVPD and digital distributor partners. Operating Costs 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.
We do not incur billing, streaming or backend costs associated with content distribution through our MVPD, vMVPD and digital distributor partners.
Interest and other income (expense) Interest and other income for the year ended December 31, 2022 was comparable to the year ended December 31, 2021. 46 Equity Interests Loss During the year ended December 31, 2022, the Company recorded $0.8 million equity interests loss related to the equity investments in the Spiegel Venture and Nebula, compared to $0.5 million equity interests loss during the year ended December 31, 2021.
Equity Method Investment Loss During the year ended December 31, 2023, we recorded a $5.4 million equity interests loss related to the equity investments in the Spiegel Venture and Nebula, compared to a $0.8 million loss in 2022.
We offer companies the opportunity to be associated with CuriosityStream content in a variety of forms, including short- and long-form program integration, branded social media promotional videos, advertising spots in our video and audio programs that are made available on our linear programming channels or in front of the paywall, and digital display ads.
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.
Accounting Standards Effective in Future Periods Financial Instruments—Credit Losses In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-03”).” The amendments in this update introduce a new standard to replace the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.
The amendments in this update introduced a new standard to replace the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.
In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires lessees to recognize lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under current U.S. GAAP.
The Company has elected to use this extended transition period under the JOBS Act until such time as the Company is no longer considered to be an EGC. 48 Table of Contents Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires lessees to recognize lease assets and lease liabilities in the balance sheet for those leases classified as operating leases under current U.S.
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. Our MVPD, vMVPD and digital distributor partners host and stream our content to their customers via their own platforms, such as set top boxes in the case of most MVPDs.
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.
Our extensive catalog of originally produced and owned content includes more than 9,500 short-, mid- and long-form video and audio titles, including One Day University and Learn25 recorded lectures that are led by some of the most acclaimed college and university professors in the world.
Our library includes: • An extensive catalog of originally produced and owned content of approximately 7,000 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 7,000 internationally licensed videos and audio programs. • More than 6,000 on-demand and ad-free productions available on-demand through our SVOD offerings.
During the year ended December 31, 2022 and 2021, we recorded a net cash inflow from investing activities of $62.7 million and a net cash outflow from investing activities of $74.9 million, respectively.
For the years ended December 31, 2023, and 2022, we recorded net cash inflows from investing activities of $14.0 million and $62.7 million, respectively, or a decrease of cash inflow of $48.7 million, or 78%.
In our Content Licensing business, we license to certain media companies a collection of our existing titles in a traditional content licensing deal. We also 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.
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.
Intangible assets other than goodwill are carried at cost and amortized over their estimated useful lives. Amortization is recorded within General and administrative expenses on the consolidated statements of operations.
However, if the Company concludes otherwise, an impairment test must be performed by estimating the fair value of the reporting unit and comparing it with its carrying value, including goodwill. Intangible assets other than goodwill are carried at cost and amortized over their estimated useful lives. Amortization is recorded within general and administrative expenses in the consolidated statements of operations.
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. 41 Overview Created 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.
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 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. 47 Cash Flows The following table presents our cash flows from operating, investing and financing activities for the years ended December 31, 2022 and 2021: For the year ended December 31, 2022 2021 (in thousands) Net cash used in operating activities $ (39,523 ) $ (73,242 ) Net cash provided by (used in) investing activities 62,701 (74,935 ) Net cash (used in) provided by financing activities (218 ) 148,340 Net increase in cash, cash equivalents and restricted cash $ 22,960 $ 163 Cash Flow from Operating Activities Cash flow from operating activities primarily consists of net losses, changes to our content assets (including additions and amortization), and other working capital items.
Our use of these transactions has enabled us to acquire quality content that we can monetize through various distribution channels while preserving our liquidity. 43 Table of Contents Cash Flow Analysis The following table presents our cash flows from operating, investing and financing activities for the years ended December 31, 2023 and 2022: Year Ended December 31, (in thousands) 2023 2022 Net cash used in operating activities $ (16,172) $ (39,523) Net cash provided by investing activities 14,003 62,701 Net cash used in financing activities (123) (218) Net (decrease) increase in cash, cash equivalents and restricted cash $ (2,292) $ 22,960 Operating Activities Cash flow from operating activities primarily consists of net losses, changes to our content assets (including additions and amortization), and other working capital items.
Our Enterprise business is comprised primarily of selling 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.” As of the date of the filing of this Annual Report on Form 10-K, 25 companies have purchased annual subscriptions at volume discounts.
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.” For the years ended December 31, 2023, and 2022, our Enterprise revenue was $0.1 million and $5.5 million, respectively.
Future changes in the judgments, assumptions and estimates that are used in the impairment testing for our asset group could result in significantly different estimates of fair value. Revenue recognition Subscriptions—O&O Service The Company generates revenue from monthly subscription fees from its O&O Service. CuriosityStream subscribers enter into month-to-month or annual subscriptions with the Company.
Future changes in the judgments, assumptions and estimates that are used in the impairment testing for our asset group may result in significantly different estimates of fair value. Revenue Recognition The Company’s performance obligations include: 1.
Change in Fair Value of Warrant Liability During the year ended December 31, 2022, the Company recognized a $5.4 million gain compared to a $15.2 million gain recognized during the year ended December 31, 2021, each resulting from a decrease in the fair value of the liabilities related to the Private Placement Warrants for the respective periods.
Changes in these inputs from period to period may significantly affect changes in fair values. For the year ended December 31, 2023, the Company recognized a $0.2 million gain in the fair value of our warrant liability, compared to a $5.4 million gain recognized in 2022.
For contracts with licenses of specific program titles, the performance obligation is satisfied as that content is made available for the customer to use.
Licenses of specific program titles, whereby the performance obligation is satisfied as that content is made available for the customer to use. Subscriptions Direct-to-Consumer - O&O Consumer Service. The Company generates revenue from subscription fees from its O&O Consumer Service. CuriosityStream subscribers enter into month-to-month or annual subscriptions with the Company.
The Company is the principal in these relationships as the Company retains control over service delivery to its subscribers. License Fees—Affiliates The Company generates license fee revenues from MVPDs such as Comcast and Cox as well as from vMVPDs such as Amazon and Sling TV (MVPDs and vMVPDs are also referred to as affiliates).
The Company generates license fee revenues from MVPDs such as Comcast and Cox as well as from vMVPDs such as Amazon Prime and Sling TV (MVPDs and vMVPDs are also referred to as affiliates). Under the terms of the agreements with these affiliates, the Company receives license fees based upon contracted programming rates and subscriber levels reported by the affiliates.
Impairment of Goodwill and Intangible Assets: We also recorded a goodwill and intangibles asset impairment charge of $3.6 million during the year ended December 31, 2022 as a result of the impairment analyses performed. The impairment charge was applied against the entire balance of goodwill and substantially all of the intangible assets balance.
In addition, during the year ended December 31, 2023, we separately performed an analysis of our investments in equity method investees to determine if an “other-than-temporary” impairment existed. During the year ended December 31, 2022, we recorded a goodwill and intangibles asset impairment charge of $3.6 million as a result of the impairment analyses performed.
Our mission is to provide premium factual entertainment that informs, enchants and inspires. We are seeking to meet demand for high-quality factual entertainment via SVOD platforms, as well as via bundled content licenses for SVOD and linear offerings, content licensing, brand sponsorship and advertising, talks and courses and partner bulk sales.
We seek to meet demand for high-quality factual entertainment via 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.
This increase of $9.6 million, or 8%, primarily resulted from the following: Cost of Revenues: Cost of revenues for the year ended December 31, 2022 increased to $51.5 million from $36.7 million for the year ended December 31, 2021.
For the year ended December 31, 2023, cost of revenues decreased to $35.6 million from $51.5 million, a 31% reduction.
The increase of $2.8 million, or 5%, in operating loss primarily resulted from the increases to our operating expenses of $9.6 million, or 8%, partially offset by the increase in revenue of $6.8 million, or 10%, in each case during the year ended December 31, 2022, compared to the year ended December 31, 2021, as described above.
The decline in operating loss of $10.8 million, or 20%, primarily resulted from the decreases to our operating expenses of $32.0 million, or 24%, which more than offset the decline in revenues of $21.2 million, or 27%, for the year ended December 31, 2023, compared to the year ended December 31, 2022.
In contracts containing the right to access the Company SVOD platform, the performance obligation is satisfied as access to the SVOD platform is provided post any free trial period. In contracts which contain access to the Company’s content assets, the performance obligation is satisfied as access to the content is provided.
Access to its SVOD platform on a subscription basis either directly or through a partner, whereby the performance obligation is satisfied as access is provided following any free trial period; 2. Access to the Company’s content assets, whereby the performance obligation is satisfied as access to the content is provided; and 3.
As of December 31, 2022, we had approximately 23 million paying subscribers, including Direct Subscribers, Partner Direct Subscribers, Bundled MVPD Subscribers, and Enterprise subscribers. Since the Company was founded in 2015, we have generated the majority of our revenues from Direct Subscribers in the form of monthly or annual subscription plans.
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. 38 Table of Contents For the years ended December 31, 2023, and 2022, revenues totaled $56.9 million and $78.0 million, respectively, a decrease of $21.2 million, or 27%.
Advertising & Marketing: Advertising and marketing expenses for the year ended December 31, 2022, decreased to $40.7 million from $52.2 million for the year ended December 31, 2021.
While these costs may fluctuate based on advertising and marketing objectives, we generally focus marketing dollars on efficient customer acquisition methods. For the year ended December 31, 2023, advertising and marketing expenses decreased to $17.4 million from $40.7 million in 2022.
We also provide a Smart Bundle service for $9.99 per month or $69.99 per year. Our Smart Bundle membership includes everything in our standard service, plus subscriptions to third-party platforms Tastemade, Topic, SommTV, DaVinci Kids, our equity investee Nebula, and our One Day University stand-alone service.
Our Smart Bundle membership currently includes our standard service, plus subscriptions to third-party platforms Tastemade , Topic , Kidstream (added in January 2024), SommTV , Da Vinci Kids , and our Curiosity University stand-alone service. Our Smart Bundle pricing remains unchanged.
Our existing subscribers currently pay $2.99 per month or $19.99 per year for our standard Direct Service, or $9.99 per month or $69.99 per year for our premium Direct Service. All new subscribers to our standard Direct Service on and after March 27, 2023 will start to be charged $4.99 per month or $39.99 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.
(“Learn25”) of $5.4 million, which were partially offset by sales and maturities of investments in debt securities of $92.3 million. Cash Flow from Financing Activities During the year ended December 31, 2022, and 2021, we recorded net cash outflow from financing activities of $0.2 million and a net cash inflow from financing activities of $148.3 million, respectively.
Our 2023 cash inflow was primarily due to maturities of investments in debt securities of $15.0 million, offset by our investment in the Spiegel Venture of $1.0 million. For the year ended December 31, 2022, we recorded a net cash inflow from investing activities of $62.7 million.
The net cash outflow used by operating activities for the year ended December 31, 2021, was primarily due to our $37.6 million net loss, $34.0 million of net non-cash expenses and net of content additions, and $1.6 million of net cash used by changes in operating assets and liabilities.
Our 2023 net cash outflow was primarily due to the $48.9 million net loss, additions to content assets and change in content liabilities of $18.3 million and $2.5 million, respectively, as well as changes in accrued expenses and other liabilities and accounts payable of $4.5 million and $1.3 million, respectively.
Further, the net cash outflow during the year ended December 31, 2022 was primarily attributed to withholding tax payments of $0.2 million related to the vesting of restricted stock units, compared to $0.5 million of such outflows during the year ended December 31, 2021.
Financing Activities For the years ended December 31, 2023, and 2022, net cash used in financing activities was $0.1 million and $0.2 million, respectively, primarily due to payments related to tax withholding.
The decrease in other revenue of $1.1 million is primarily due to a one-time services agreement entered into with an affiliate during the year ended December 31, 2021. 45 Operating Expenses Operating expenses for the years ended December 31, 2022, and 2021 were $133.3 million and $123.7 million, respectively.
For the years ended December 31, 2023, and 2022, our Bundled Distribution revenue was $6.3 million and $11.7 million, respectively. This 46% decline was primarily due to the non-renewal of a bundled distribution agreement in the third quarter of 2022.
Cost of revenues primarily includes content amortization, hosting and streaming delivery costs, payment processing costs and distribution fees, commission costs and subtitling and broadcast costs.
For the years ended December 31, 2023, and 2022, our operating expenses were 101.4 million and 133.3 million, respectively, a decrease of $32.0 million, or 24%. 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.
The increase in net loss of $13.3 million, or 35%, is primarily due to the decrease in the change in the fair value of warrant liability of $9.8 million and the increase in total operating expenses of $9.6 million, partially offset by the increase in total revenues of $6.8 million, in each case during the year ended December 31, 2022 compared to the year ended December 31, 2021, as described above.
Net loss for the years ended December 31, 2023, and 2022, was $48.9 million and $50.9 million, respectively, a decrease in net loss of $2.0 million, or 4%. The $10.8 million decline in operating loss for 2023 was almost entirely offset by a decline in change in value of warrant liability and an increase in our equity interest loss.
Producing and co-producing content and commissioned content is generally more costly than content acquired through licenses. The Company’s business model is subscription based as opposed to a model generating revenues at a specific title level.
Professional services costs also declined 23% as we streamlined various outside services during the year and brought certain finance and operations functions internal. Impairment of Content Assets, Goodwill and Intangible Assets The Company’s primary business model is subscription-based as opposed to a model based on generating revenues at a specific title level.
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The table below shows our revenue generated through each of the foregoing products and services for the years ended December 31, 2022, and 2021: Year Ended December 31, 2022 2021 Direct to Consumer (Subscriptions—O&O and App Services) $ 29,489 38 % $ 23,519 33 % Partner Direct (License Fees—Affiliates) 4,631 6 % 4,240 6 % Bundled Distribution (License Fees—Affiliates) 11,726 14 % 14,332 20 % Content Licensing 24,691 32 % 24,758 35 % Enterprise (Subscriptions—O&O Service) 5,520 7 % 1,302 2 % Other 1,986 3 % 3,110 4 % Total Revenues $ 78,043 $ 71,261 CuriosityStream’s award-winning content library features more than 15,000 programs that explore topics ranging from space engineering to ancient history to the rise of Wall Street.
Added
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.
Removed
Our library also features a rotating catalog of more than 5,500 internationally licensed videos and audio programs. Every month, we launch dozens of 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 in ten different languages.
Added
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").

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Other CURI 10-K year-over-year comparisons