Financial Position - As of March 31, 2024, the company's cash and cash equivalents totaled $38.75 million, an increase from $37.715 million as of December 31, 2023[49]. - The total content assets decreased from $44.943 million as of December 31, 2023, to $40.154 million as of March 31, 2024[50]. - The company's equity method investment in Spiegel Venture decreased from $1.736 million to $0.217 million, a decline of approximately 87.5% from December 31, 2023, to March 31, 2024[40]. - The fair value of the company's money market funds as of March 31, 2024, was $36.544 million, up from $36.072 million as of December 31, 2023[49]. - As of March 31, 2024, the Company held operating lease ROU assets of $3.3 million and total lease liabilities of $4.6 million[82]. Revenue Performance - For the three months ended March 31, 2024, total revenues were $12.001 million, a decrease of 3.1% compared to $12.387 million for the same period in 2023[54]. - Direct-to-Consumer revenue increased to $8.068 million, representing 67% of total revenue, up from 60% in the prior year[54]. - Revenue from the United States was $7,425 million, accounting for 62% of total revenue, compared to $6,686 million (54%) in 2023[77]. - International revenue totaled $4,576 million, representing 38% of total revenue, down from $5,701 million (46%) in 2023[77]. - The Company recognized $0.1 million in revenue from license fees related to the Spiegel Venture for the three months ended March 31, 2024[78]. - The company recognized $6.3 million in revenue related to amounts deferred as of December 31, 2023[57]. Loss and Earnings - The net loss for the three months ended March 31, 2024, was $5.035 million, compared to a net loss of $7.751 million in the same period of 2023[65]. - Basic and diluted net loss per share improved to $0.09 from $0.15 year-over-year[65]. - Stock-based compensation expense totaled $689,000 for the three months ended March 31, 2024, down from $1.267 million in the prior year[75]. Deferred Revenues and Obligations - Total deferred revenues remained stable at $15.2 million as of March 31, 2024, with non-current portions at $0.6 million[56]. - Remaining performance obligations expected to be recognized in the future total $1.963 million[55]. - Content obligations as of March 31, 2024, amounted to $0.6 million, down from $1.1 million as of December 31, 2023[86][87]. Investments and Dividends - The company recorded a loss of $1.519 million from its equity method investment in Spiegel Venture for the three months ended March 31, 2024[40]. - The company has not received any dividends from either Spiegel Venture or Nebula as of March 31, 2024[41][47]. - The company’s investment in Nebula increased from 12% to 16.875% as of March 31, 2024, following three incremental purchases[47]. - The Company declared a quarterly cash dividend of $0.025 per share, totaling approximately $1.3 million, to be paid on July 31, 2024[91]. Future Commitments - Future advertising commitments as of March 31, 2024, totaled $1.4 million, with $0.8 million expected to be paid in 2024[89]. - The company expects to amortize $4.7 million, $3.1 million, and $1.4 million of licensed content costs over the next three years[50]. Lease Costs - Total operating lease cost for the three months ended March 31, 2024, was $131 thousand, slightly down from $134 thousand in 2023[83].

Financial Performance - For the year ended December 31, 2023, CuriosityStream reported revenue of $56.9 million and a net loss of $48.9 million[43]. - The company incurred a net loss of $48.9 million for the year ended December 31, 2023, with an accumulated deficit of $290.0 million[65]. - The company has experienced negative cash flows from operating activities since inception, raising concerns about its ability to service future obligations and debt[133]. - The company expects to incur significant operating and capital expenditures as it pursues growth strategies, which may lead to continued net losses in the future[77]. - The company has a history of net losses and anticipates continuing to incur losses for the foreseeable future due to significant operating and capital expenditures[65]. Subscriber and User Metrics - The company has experienced significant user growth but faces challenges in attracting and retaining users due to competition and macroeconomic conditions[59]. - User churn rates significantly impact revenue; the company must minimize existing user loss while attracting new subscribers to grow its business[78]. - The termination of the agreement with Nebula has resulted in a decline in subscribers, with risks of further churn from users seeking access to Nebula's service directly[80]. Content and Services - The company has over 17,000 programs in its content library, including approximately 10,000 originally produced titles and nearly 7,000 internationally licensed videos[29][33]. - CuriosityStream's Direct-to-Consumer service is available in more than 175 countries, providing access to its content on major consumer devices[35]. - The company introduced a new free ad-supported streaming channel, Curiosity Now, and a Smart Bundle plan in 2022 to expand service offerings[62]. - The company has a content licensing business that allows it to provide factual content to media companies, reducing risk in content development[39]. - CuriosityStream's Partner Direct Business includes relationships with MVPDs like Comcast and Cox, and digital distributors such as Amazon Prime Video Channels and YouTube TV[37]. Pricing and Revenue Strategies - As of March 27, 2023, the standard pricing for new subscribers was increased to $4.99 per month or $39.99 per year, while legacy subscribers previously paid $2.99 per month or $19.99 per year[36]. - The company is currently raising prices for its legacy subscribers, which may positively impact revenue from this business line[36]. - The company aims to broaden and stabilize its sources of revenue, increase the number of paying subscribers, and rationalize costs to achieve profitability[66]. Operational Efficiency and Workforce - As of December 31, 2023, the company employed 48 full-time employees, down from an average of 78 in 2022, reflecting a reduction of 20 positions during the year[54]. - The company has undertaken cost-savings initiatives, including workforce reductions, to control expenditures and improve operational efficiency[64]. - In 2023, the company initiated a plan to eliminate 20 full-time positions, approximately 30% of its workforce as of December 31, 2022, potentially affecting company culture and employee retention[199]. Market and Competitive Landscape - The company faces intense competition from established players like Netflix and Amazon, which have larger user bases and greater resources, potentially leading to pricing pressures and reduced market share[84]. - The competitive landscape is evolving rapidly, with piracy and new technological developments posing significant threats to the company's market position[101]. - The company is exploring partnerships in international markets and developing its in-house production studio, Curiosity Studios, to increase revenue[75]. Regulatory and Compliance Risks - Changes in government regulations regarding the internet and telecommunications could increase operating expenses and affect business conduct[104]. - The company faces potential fines for noncompliance with the GDPR, which imposes strict requirements for processing personal data of individuals within the EEA[187]. - Compliance with various state privacy laws is challenging and may increase operational burdens as more states enact similar regulations[192]. Cybersecurity and Data Privacy - The company has established a comprehensive cybersecurity program to manage risks and protect sensitive information, overseen by senior management[207]. - The company maintains personal data of users, including billing data, and relies on third-party services for data security, which poses risks of unauthorized access and potential regulatory penalties[195]. - The company faces risks related to unauthorized access attempts through cyberattacks, which could negatively affect key performance indicators and investor confidence[155]. Future Outlook and Strategic Initiatives - The company is expanding internationally and developing technology to manage anticipated growth in users and features[69]. - The company is classified as an "emerging growth company" and may remain so for up to five years, allowing it to rely on reduced disclosure requirements[177]. - The company announced the initiation of its first-ever quarterly cash dividend on March 13, 2024, but future dividends are subject to financial conditions and may be discontinued or reduced[173].

Financial Position - As of September 30, 2023, the Company reported cash and cash equivalents of $40.304 million, an increase from $40.007 million as of December 31, 2022[55]. - The Company’s cash and cash equivalents and restricted cash totaled $40.804 million as of September 30, 2023, compared to $40.507 million as of December 31, 2022[55]. - As of September 30, 2023, the fair value of the Company's total securities investments was $38,375,000, an increase from $17,724,000 as of December 31, 2022[56]. - The fair value of Private Placement Warrants decreased to $74,000 as of September 30, 2023, from $257,000 as of December 31, 2022[64]. - As of September 30, 2023, the Company had 3,054,203 publicly traded warrants and 3,676,000 private placement warrants outstanding[73]. - The fair value of the private placement warrant liability was estimated at $0.02 per warrant as of September 30, 2023, down from $0.07 per warrant at the end of 2022[77]. - As of September 30, 2023, the company had operating lease ROU assets of $3.4 million and total lease liabilities of $4.7 million[95]. Impairment and Investments - The Company recorded a $2.3 million impairment related to its investment in Nebula for the three months ended September 30, 2023, primarily due to the expected decrease in revenue share following the Nebula Non-Renewal[54]. - The carrying values for the Company's equity method investments as of September 30, 2023, totaled $6.666 million, down from $10.766 million as of December 31, 2022[43]. - The Company performed an impairment analysis on its content assets and determined that no impairment charges were required for its long-lived asset group as of September 30, 2023[31]. - The Company identified indicators of impairment related to its content assets during the three months ended September 30, 2023, prompting further analysis[29]. - The Company recorded a $19,000,000 impairment charge for content assets during the three months ended September 30, 2023, due to declining market conditions and subscriber growth forecasts[61]. - Total content assets decreased to $45,900,000 as of September 30, 2023, down from $68,502,000 as of December 31, 2022[58]. - The Company has not made further investments in Nebula during the three and nine months ended September 30, 2023, and the obligation to make additional purchases ended as of that date[50]. Revenue and Performance - Total revenues for the three months ended September 30, 2023, were $15,630,000, a decrease of 33.8% compared to $23,569,000 for the same period in 2022[65]. - Subscription revenues accounted for 47% of total revenues in Q3 2023, down from 38% in Q3 2022[65]. - Deferred revenues decreased to $13,700,000 as of September 30, 2023, from $14,900,000 as of December 31, 2022[67]. - The Company expects to recognize $9,492,000 in future revenues related to unsatisfied performance obligations as of September 30, 2023[66]. - For the three months ended September 30, 2023, total trade and barter revenues were $5,199,000, a decrease from $8,190,000 in the same period of 2022, representing a decline of approximately 36.3%[71]. - For the nine months ended September 30, 2023, total trade and barter revenues were $8,190,000, compared to $7,416,000 in 2022, indicating an increase of approximately 10.4%[71]. - The net loss for the three months ended September 30, 2023, was $26,565,000, compared to a net loss of $4,502,000 in the same period of 2022, reflecting a significant increase in losses[79]. - The net loss per share for the three months ended September 30, 2023, was $0.50, compared to $0.09 for the same period in 2022, indicating a deterioration in earnings performance[79]. - For the nine months ended September 30, 2023, total revenue was $42.11 million, down from $63.54 million in the same period of 2022, marking a decline of 33.7%[90]. - Revenue from the United States accounted for 57% of total revenue, amounting to $8.97 million, while international revenue totaled $6.66 million, representing 43% of total revenue[90]. - The company recognized $1.1 million in revenue related to license fees from the Spiegel Venture for the nine months ended September 30, 2023[91]. Costs and Expenses - The amortization of licensed content costs for Q3 2023 was $1,728,000, compared to $1,793,000 in Q3 2022[63]. - Operating lease costs for the three months ended September 30, 2023, were $133,000, slightly down from $139,000 in the same period of 2022[96]. - The company's content obligations as of September 30, 2023, amounted to $1.6 million, with $0.8 million expected to be paid by December 31, 2023[99]. - Future advertising commitments totaled $1.3 million, with expected payments of $0.5 million and $0.8 million during the three months ending December 31, 2023, and the year ending December 31, 2024, respectively[102]. - The company incurred $1.1 million and $3.4 million in cost of revenues related to revenue share from subscription sales for the three and nine months ended September 30, 2023, respectively[91]. Stock and Compensation - Stock-based compensation for the three months ended September 30, 2023, totaled $897,000, a decrease from $1,673,000 in the same period of 2022[88]. - The Company had 4,605,000 shares available for issuance under the 2020 Omnibus Plan as of September 30, 2023[82]. - The expected volatility for options granted was 92.00% as of September 30, 2023, compared to 77.00% at the end of 2022[77]. Operational Overview - The Company operates as one reporting segment, with financial information reviewed on an entity-wide basis for decision-making purposes[89]. - The Company began entering into trade and barter transactions in Q2 2023 to exchange content assets through licensing agreements[68].

Financial Position - As of June 30, 2023, the Company reported cash and cash equivalents of $44.337 million, an increase from $40.007 million as of December 31, 2022[51]. - The total carrying value of the Company's equity method investments decreased from $10.766 million as of December 31, 2022, to $9.303 million as of June 30, 2023[50]. - The Company has not received any dividends from its investments in Spiegel Venture and Nebula as of June 30, 2023[43][48]. - The Company’s investments in money market funds were valued at $43.333 million as of June 30, 2023, with no Level 2 securities reported[52]. - The Company recorded a Holdback Payment liability of $0.9 million related to its equity ownership in Spiegel Venture, which was paid in July 2023[44]. - The Company had $5.8 million in content obligations as of June 30, 2023, with $1.8 million included in current liabilities[93]. Impairment and Investments - The Company recorded a $2.0 million impairment related to its investment in Spiegel Venture during the three months ended June 30, 2023, reflecting a decline in fair value[49]. - The Company performed an impairment analysis on its equity method investments and determined that the fair value of its investment in Nebula exceeded its carrying value as of June 30, 2023, thus no impairment charge was required[49]. - The Company has a call option to acquire additional ownership in Spiegel Venture, which is exercisable based on specific conditions outlined in the Share Purchase Agreement[45]. - The fair value of Private Placement Warrants decreased to $0.04 per warrant as of June 30, 2023, down from $0.07 as of December 31, 2022[69]. - The company recognized a gain of $0.2 million related to the change in fair value of the Private Placement Warrants for the three months ended June 30, 2023[69]. Revenue and Performance - For the three months ended June 30, 2023, total revenues were $14.1 million, down 37% from $22.3 million in the same period of 2022[59]. - Subscription revenues from O&O Service for the three months ended June 30, 2023, were $6.4 million, representing 45% of total revenues, compared to $7.9 million and 35% in the prior year[59]. - The net loss for the three months ended June 30, 2023, was $9.9 million, an improvement from a net loss of $16.0 million in the same period of 2022[71]. - The company expects to recognize $3.6 million in revenue for the remainder of 2023 related to unsatisfied performance obligations as of June 30, 2023[60]. - Total deferred revenues were $13.6 million as of June 30, 2023, compared to $14.9 million at December 31, 2022[62]. - For the six months ended June 30, 2023, total revenue was $26.5 million, down from $40.0 million in 2022, indicating a decrease of 34%[82]. - The United States accounted for 56% of total revenue in Q2 2023, while international revenue was 44%, with the United Kingdom contributing 13%[82]. Costs and Expenses - Stock-based compensation for options was $771,000 for the three months ended June 30, 2023, compared to $946,000 in 2022, reflecting a decrease of 18.5%[80]. - The total operating lease cost for the three months ended June 30, 2023, was $117,000, compared to $152,000 in the same period of 2022, a decrease of 23%[89]. - The Company incurred $1.2 million in costs related to revenue share from subscription sales to Nebula for the three months ended June 30, 2023[83]. Shareholder Information - The weighted average shares outstanding for the three months ended June 30, 2023, were 53,006,000, compared to 52,775,000 in the same period of 2022[71]. - The Company exchanged 4.6 million outstanding stock options for 1.6 million new RSUs in July 2023, with a fair value of $0.99 per share at the time of the exchange[98].

Part I. [Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) This section encompasses the company's unaudited consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for CuriosityStream Inc., including the balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows, along with detailed notes explaining the company's accounting policies, equity investments, balance sheet components, revenue breakdown, equity and warrant information, earnings per share, stock-based compensation, segment data, related party transactions, leases, commitments, and income taxes [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and equity at specific points in time - The company's total assets decreased by **$11.01 million**, or **7.1%**, from December 31, 2022, to March 31, 2023, primarily due to a reduction in short-term investments and accounts receivable. Total liabilities also decreased by **$4.54 million**, while stockholders' equity saw a decline of **$6.47 million**[10](index=10&type=chunk) Consolidated Balance Sheet Key Metrics | Metric | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | Change ($) | | :--------------------------------- | :------------------------------ | :------------------------------- | :--------- | | Total Assets | $143,102 | $154,113 | $(11,011) | | Total Liabilities | $31,945 | $36,487 | $(4,542) | | Total Stockholders' Equity | $111,157 | $117,626 | $(6,469) | | Cash and cash equivalents | $48,668 | $40,007 | $8,661 | | Short-term investments in debt securities | $0 | $14,986 | $(14,986) | | Accounts receivable, net | $9,699 | $10,899 | $(1,200) | | Content assets, net | $66,373 | $68,502 | $(2,129) | | Total current liabilities | $26,399 | $30,960 | $(4,561) | | Deferred revenue | $13,863 | $14,281 | $(418) | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) This section outlines the company's revenues, expenses, and net loss for the reporting period - For the three months ended March 31, 2023, CuriosityStream reported a net loss of **$7.75 million**, a significant improvement from **$15.89 million** in the prior year, primarily driven by a substantial **46%** reduction in operating expenses, despite a **30%** decrease in total revenues[14](index=14&type=chunk) Consolidated Statements of Operations Key Metrics | Metric | Q1 2023 (in thousands) | Q1 2022 (in thousands) | Change ($) | Change (%) | | :--------------------------------- | :--------------------- | :--------------------- | :--------- | :--------- | | Revenues | $12,387 | $17,627 | $(5,240) | (30%) | | Operating expenses | $20,175 | $37,121 | $(16,946) | (46%) | | Operating loss | $(7,788) | $(19,494) | $11,706 | (60%) | | Net loss | $(7,751) | $(15,892) | $8,141 | (51%) | | Basic Net loss per share | $(0.15) | $(0.30) | $0.15 | (50%) | [Consolidated Statements of Comprehensive Loss](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Loss) This section reports the net loss and other comprehensive income or loss components, reflecting total comprehensive loss - The total comprehensive loss for Q1 2023 significantly decreased by **52%** to **$7.71 million** from **$16.13 million** in Q1 2022, primarily due to a reduced net loss and an unrealized gain on available-for-sale securities in the current period compared to a loss in the prior year[17](index=17&type=chunk) Consolidated Statements of Comprehensive Loss Key Metrics | Metric | Q1 2023 (in thousands) | Q1 2022 (in thousands) | Change ($) | Change (%) | | :--------------------------------- | :--------------------- | :--------------------- | :--------- | :--------- | | Net loss | $(7,751) | $(15,892) | $8,141 | (51%) | | Unrealized gain (loss) on available for sale securities | $40 | $(233) | $273 | n/m | | Total comprehensive loss | $(7,711) | $(16,125) | $8,414 | (52%) | [Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) This section details changes in the company's equity accounts over the reporting period - Stockholders' equity decreased from **$117.6 million** at December 31, 2022, to **$111.2 million** at March 31, 2023, primarily due to the net loss incurred during the period, partially offset by stock-based compensation and other comprehensive income[20](index=20&type=chunk) Consolidated Statements of Stockholders' Equity Key Metrics | Metric | Dec 31, 2022 (in thousands) | Q1 2023 Activity (in thousands) | Mar 31, 2023 (in thousands) | | :--------------------------------- | :-------------------------- | :------------------------------ | :-------------------------- | | Total Stockholders' Equity (Beginning) | $117,626 | | | | Net loss | | $(7,751) | | | Stock-based compensation, net | | $1,242 | | | Other comprehensive income | | $40 | | | Total Stockholders' Equity (Ending) | | | $111,157 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes the cash inflows and outflows from operating, investing, and financing activities - The company significantly reduced cash used in operating activities in Q1 2023 to **$6.3 million** from **$12.3 million** in Q1 2022. Investing activities provided **$15.0 million**, primarily from maturities of debt securities, leading to a net increase in cash, cash equivalents, and restricted cash of **$8.7 million** for the quarter[23](index=23&type=chunk) Consolidated Statements of Cash Flows Key Metrics | Activity | Q1 2023 (in thousands) | Q1 2022 (in thousands) | Change ($) | Change (%) | | :--------------------------------- | :--------------------- | :--------------------- | :--------- | :--------- | | Net cash used in operating activities | $(6,308) | $(12,287) | $5,979 | (49%) | | Net cash provided by investing activities | $14,995 | $19,773 | $(4,778) | (24%) | | Net cash used in financing activities | $(26) | $(137) | $111 | (81%) | | Net increase in cash, cash equivalents and restricted cash | $8,661 | $7,349 | $1,312 | 18% | | Cash, cash equivalents and restricted cash, end of period | $49,168 | $24,896 | $24,272 | 97% | [Notes to Unaudited Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) This section provides detailed notes to the unaudited consolidated financial statements, explaining accounting policies and specific financial components [Note 1 — Organization and business](index=10&type=section&id=Note%201%20%E2%80%94%20Organization%20and%20business) This note describes CuriosityStream Inc.'s business model, content offerings, and distribution channels - CuriosityStream Inc. provides high-quality factual content via a direct subscription video on-demand (SVOD) platform and through distribution partners, offering access to over **six thousand** on-demand, ad-free productions[26](index=26&type=chunk)[27](index=27&type=chunk) - The company's content is accessible through its owned and operated website, mobile applications, and third-party platforms, with subscription prices varying by content bundle and length[27](index=27&type=chunk) [Note 2 — Basis of presentation and summary of significant accounting policies](index=10&type=section&id=Note%202%20%E2%80%94%20Basis%20of%20presentation%20and%20summary%20of%20significant%20accounting%20policies) This note outlines the accounting principles, estimates, and significant policies used in preparing the financial statements - The unaudited consolidated financial statements adhere to U.S. GAAP, consistent with the prior year, and incorporate management's estimates for items such as content asset amortization and fair value measurements[28](index=28&type=chunk)[31](index=31&type=chunk) - The company adopted ASU 2016-13 on credit losses effective January 1, 2023, which did not have a material impact on its consolidated financial statements[30](index=30&type=chunk)[41](index=41&type=chunk) - Fair value measurements for financial instruments are categorized into Level 1 (active market quotes), Level 2 (similar asset quotes), and Level 3 (unobservable inputs), with Private Placement Warrants valued using a Black-Scholes model as Level 3[35](index=35&type=chunk)[37](index=37&type=chunk)[40](index=40&type=chunk) [Note 3 – Equity Investments](index=12&type=section&id=Note%203%20%E2%80%93%20Equity%20Investments) This note details the company's equity method investments in Spiegel Venture and Watch Nebula LLC - CuriosityStream holds a **32% ownership** in Spiegel TV Geschichte und Wissen GmbH & Co. KG (Spiegel Venture) and a **16.875% ownership** in Watch Nebula LLC, both accounted for using the equity method[42](index=42&type=chunk)[46](index=46&type=chunk) - The company recorded an equity method investment loss of **$0.2 million** for the three months ended March 31, 2023[47](index=47&type=chunk) Equity Investment Income (Loss) | Investment | Q1 2023 Income (Loss) (in thousands) | | :--------------------------------- | :----------------------------------- | | Spiegel Venture | $28 | | Nebula | $(247) | | **Total** | **$(219)** | [Note 4 — Balance sheet components](index=13&type=section&id=Note%204%20%E2%80%94%20Balance%20sheet%20components) This note provides detailed breakdowns of key balance sheet accounts, including cash, investments, and content assets - Cash and cash equivalents increased to **$48.7 million** as of March 31, 2023, while short-term investments in debt securities were fully matured, decreasing from **$14.99 million** to zero[48](index=48&type=chunk)[49](index=49&type=chunk) - Total content assets, net, decreased by **$2.13 million** to **$66.37 million**, with licensed content amortization decreasing by **35%** and produced content amortization decreasing by **35%** year-over-year[51](index=51&type=chunk)[52](index=52&type=chunk) Balance Sheet Components Summary | Metric | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :--------------------------------- | :------------------------------ | :------------------------------- | | Cash and cash equivalents | $48,668 | $40,007 | | Restricted cash | $500 | $500 | | Short-term investments in debt securities | $0 | $14,986 | | Total Content Assets, net | $66,373 | $68,502 | | Warrant liability | $331 | $257 | Content Amortization Expense | Content Amortization | Q1 2023 (in thousands) | Q1 2022 (in thousands) | Change ($) | Change (%) | | :--------------------------------- | :--------------------- | :--------------------- | :--------- | :--------- | | Licensed content | $1,945 | $2,999 | $(1,054) | (35%) | | Produced content | $3,907 | $6,039 | $(2,132) | (35%) | | **Total** | **$5,852** | **$9,038** | **$(3,186)** | **(35%)** | [Note 5 — Revenue](index=15&type=section&id=Note%205%20%E2%80%94%20Revenue) This note explains the company's revenue recognition policies and provides a breakdown of revenue by type and remaining performance obligations - Total revenues decreased by **30%** year-over-year to **$12.39 million** in Q1 2023. Subscription revenue declined by **10%**, while License Fees revenue saw a significant **50%** decrease, primarily from bundled distribution and content licensing[55](index=55&type=chunk) - Other revenue, primarily from marketing services, increased by **140%** to **$0.27 million**[55](index=55&type=chunk) Revenue Breakdown by Type | Revenue Type | Q1 2023 (in thousands) | % of Total | Q1 2022 (in thousands) | % of Total | Change ($) | Change (%) | | :--------------------------------- | :--------------------- | :--------- | :--------------------- | :--------- | :--------- | :--------- | | Subscriptions – Total | $7,520 | 61% | $8,355 | 47% | $(835) | (10%) | | License Fees – Total | $4,593 | 37% | $9,158 | 52% | $(4,565) | (50%) | | Other – Total | $274 | 2% | $114 | 1% | $160 | 140% | | **Total Revenues** | **$12,387** | **100%** | **$17,627** | **100%** | **$(5,240)** | **(30%)** | Remaining Performance Obligations | Remaining Performance Obligations (in thousands) | | :--------------------------------- | | Remainder of year ending Dec 31, 2023: $5,695 | | For the years ending Dec 31, 2024: $4,156 | | For the years ending Dec 31, 2025: $2,096 | | For the years ending Dec 31, 2026: $193 | | For the years ending Dec 31, 2027: $31 | | Thereafter: $195 | | **Total: $12,366** | [Note 6 — Stockholders' equity](index=16&type=section&id=Note%206%20%E2%80%94%20Stockholders'%20equity) This note details the components of stockholders' equity, including information on outstanding warrants and their valuation - As of March 31, 2023, the company had **3.05 million** publicly traded warrants (equity-classified) and **3.68 million** Private Placement Warrants (liability-classified) outstanding, all exercisable at **$11.50** per share and expiring on October 14, 2025[60](index=60&type=chunk)[61](index=61&type=chunk) - The fair value of the Private Placement Warrants increased, resulting in a **$0.1 million** loss related to the change in fair value in Q1 2023, compared to a **$3.9 million** gain in Q1 2022[65](index=65&type=chunk) Private Placement Warrant Valuation | Private Placement Warrant Valuation | | :--------------------------------- | | **As of March 31, 2023:** | | Exercise price: **$11.50** | | Stock price (CURI): **$1.35** | | Expected volatility: **79.00%** | | Expected warrant term (years): **2.5** | | Risk-free interest rate: **3.94%** | | Dividend yield: **0%** | | Fair Value per Private Placement Warrant: **$0.09** | | **As of December 31, 2022:** | | Exercise price: **$11.50** | | Stock price (CURI): **$1.14** | | Expected volatility: **77.00%** | | Expected warrant term (years): **2.8** | | Risk-free interest rate: **4.22%** | | Dividend yield: **0%** | | Fair Value per Private Placement Warrant: **$0.07** | [Note 7 — Earnings (loss) per share](index=17&type=section&id=Note%207%20%E2%80%94%20Earnings%20(loss)%20per%20share) This note presents the calculation of basic and diluted net loss per share and the treatment of anti-dilutive securities - Basic and diluted net loss per share for Q1 2023 was **$(0.15)**, an improvement from **$(0.30)** in Q1 2022, reflecting a reduced net loss[67](index=67&type=chunk) - Common stock equivalents, including **4.63 million options**, **1.03 million restricted stock units**, and **6.73 million warrants**, were excluded from the diluted EPS calculation as their effect would be anti-dilutive due to the net loss[67](index=67&type=chunk)[68](index=68&type=chunk) Net Loss Per Share Calculation | Metric | Q1 2023 (in thousands, except per share data) | Q1 2022 (in thousands, except per share data) | | :--------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net loss | $(7,751) | $(15,892) | | Weighted–average shares | 52,950 | 52,750 | | Net loss per share - Basic and Diluted | $(0.15) | $(0.30) | [Note 8 — Stock-based compensation](index=18&type=section&id=Note%208%20%E2%80%94%20Stock-based%20compensation) This note outlines the company's stock-based compensation plans and the expense recognized for equity awards - The company recognized **$1.27 million** in stock-based compensation expense in Q1 2023, a decrease from **$1.79 million** in Q1 2022[75](index=75&type=chunk) - The CuriosityStream 2020 Omnibus Plan authorized **7,725,000 shares** for various equity awards, with **1,514,000 shares** available for issuance as of March 31, 2023[70](index=70&type=chunk) Stock-based Compensation Expense | Stock-based Compensation Expense (in thousands) | | :--------------------------------- | | **Q1 2023:** | | Stock-based compensation - Options: $777 | | Stock-based compensation - RSUs: $490 | | **Total: $1,267** | | **Q1 2022:** | | Stock-based compensation - Options: $967 | | Stock-based compensation - RSUs: $821 | | **Total: $1,788** | [Note 9 — Segment and geographic information](index=19&type=section&id=Note%209%20%E2%80%94%20Segment%20and%20geographic%20information) This note clarifies the company's single operating segment and provides a breakdown of revenue by geographic location - The company operates as a single reporting segment, with all long-lived tangible assets located in the United States[76](index=76&type=chunk)[77](index=77&type=chunk) - International revenue increased its share to **46%** of total revenue in Q1 2023, up from **33%** in Q1 2022, with the Netherlands becoming a significant contributor at **10%** of total revenue[77](index=77&type=chunk) Revenue by Geographic Location | Revenue by Geographic Location | | :--------------------------------- | | **Q1 2023 (in thousands):** | | United States: $6,686 (54%) | | Netherlands: $1,246 (10%) | | United Kingdom: $562 (5%) | | Other International: $3,893 (31%) | | **Total International: $5,701 (46%)** | | **Total: $12,387 (100%)** | | **Q1 2022 (in thousands):** | | United States: $11,799 (67%) | | Netherlands: $65 (0%) | | United Kingdom: $1,901 (11%) | | Other International: $3,862 (22%) | | **Total International: $5,828 (33%)** | | **Total: $17,627 (100%)** | [Note 10 — Related party transactions](index=19&type=section&id=Note%2010%20%E2%80%94%20Related%20party%20transactions) This note discloses transactions with related parties, including revenue, cost of revenues, and balance sheet impacts - The company recognized **$0.8 million** in revenue from license fees and revenue share from Spiegel Venture and incurred **$1.2 million** in revenue share to Nebula from subscription sales in Q1 2023[78](index=78&type=chunk)[79](index=79&type=chunk) - CuriosityStream also sublets a portion of its office space to Hendricks Investment Holdings, LLC, a related party[80](index=80&type=chunk) Related Party Transactions Summary | Related Party Transactions (in thousands) | | :--------------------------------- | | **Statement of Operations (Q1 2023):** | | Revenues: $794 | | Cost of revenues: $1,202 | | **Balance Sheets (March 31, 2023):** | | Accounts receivable: $2,804 | | Accounts payable: $788 | [Note 11 — Leases](index=21&type=section&id=Note%2011%20%E2%80%94%20Leases) This note details the company's operating lease arrangements, including Right-of-Use assets and lease liabilities - As of March 31, 2023, the company had operating lease Right-of-Use (ROU) assets of **$3.6 million** and total lease liabilities of **$4.9 million** for its non-cancellable office space lease expiring in 2033[82](index=82&type=chunk)[84](index=84&type=chunk) - Total operating lease cost for Q1 2023 was **$0.13 million**, and the company also acts as a lessor, subletting office space to a related party, generating less than **$0.1 million** in income[83](index=83&type=chunk)[85](index=85&type=chunk) Lease Financials Summary | Lease Financials (as of March 31, 2023, in thousands) | | :--------------------------------- | | Operating lease ROU assets: $3,633 | | Current lease liabilities: $300 (approx) | | Non-current lease liabilities: $4,560 | | Weighted average remaining lease term: **9.9 years** | | Present value of total lease liabilities: $4,903 | | Total lease cost (Q1 2023): $134 | [Note 12 — Commitments and contingencies](index=22&type=section&id=Note%2012%20%E2%80%94%20Commitments%20and%20contingencies) This note outlines the company's content obligations and advertising commitments - As of March 31, 2023, the company had **$7.5 million** in content obligations, with **$1.6 million** included in content liabilities and **$5.9 million** not yet reflected on the balance sheet, all expected to be paid by December 31, 2023[87](index=87&type=chunk) - Advertising commitments totaled **$1.1 million** as of March 31, 2023, with **$0.6 million** expected to be paid in the remaining nine months of 2023 and **$0.5 million** in 2024[90](index=90&type=chunk) [Note 13 — Income taxes](index=22&type=section&id=Note%2013%20%E2%80%94%20Income%20taxes) This note provides information on the company's income tax provision and valuation allowance position - The company recorded a **$0.1 million** provision for income taxes in both Q1 2023 and Q1 2022, primarily related to foreign withholding income taxes[91](index=91&type=chunk) - No tax benefit was recognized for federal or state income tax purposes due to the company being in a full valuation allowance position[91](index=91&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on CuriosityStream's financial performance and condition for the three months ended March 31, 2023. It covers an overview of the business, key factors influencing operations, a detailed analysis of results, liquidity and capital resources, and critical accounting policies. The company saw a significant reduction in net loss driven by expense management, despite a decline in revenue [Overview](index=23&type=section&id=Overview) This section provides an overview of CuriosityStream's business model, content library, and pricing strategy - CuriosityStream is a media and entertainment company offering premium factual video and audio programming through various channels, including its Direct Business, Bundled Distribution, Content Licensing, Enterprise, and Other services[95](index=95&type=chunk)[96](index=96&type=chunk) - The company's content library features over **15,000 programs**, with more than **9,500 originally produced** and owned titles, and has localized a large portion of its library in **ten languages**[96](index=96&type=chunk) - As of March 27, 2023, the standard pricing for new Direct Business subscribers increased to **$4.99** per month or **$39.99** per year, up from **$2.99** per month or **$19.99** per year[97](index=97&type=chunk) Revenue by Product/Service | Revenue by Product/Service | | :--------------------------------- | | **Q1 2023 (in thousands):** | | Direct Business: $8,582 (70%) | | Bundled Distribution: $1,473 (12%) | | Content Licensing: $2,018 (16%) | | Enterprise: $40 (0%) | | Other: $274 (2%) | | **Total Revenues: $12,387 (100%)** | | **Q1 2022 (in thousands):** | | Direct Business: $8,334 (47%) | | Bundled Distribution: $3,767 (21%) | | Content Licensing: $4,248 (24%) | | Enterprise: $1,163 (7%) | | Other: $114 (1%) | | **Total Revenues: $17,627 (100%)** | [Key Factors Affecting Results of Operations](index=24&type=section&id=Key%20Factors%20Affecting%20Results%20of%20Operations) This section discusses the primary factors influencing the company's operating results, including subscriber growth, pricing, and cost management - Future operating results are dependent on the company's ability to efficiently grow its subscriber base, increase prices, and expand service offerings to maximize subscriber lifetime value[104](index=104&type=chunk) - Primary operating costs include content production and acquisition, advertising and marketing, personnel costs, and distribution fees, with a strategic focus on efficient customer acquisition and revenue-generating personnel[107](index=107&type=chunk)[109](index=109&type=chunk) - The company's main revenue sources are subscriber and license fees from its Direct Business, bundled license fees from distribution affiliates, license fees from content licensing, subscriber fees from its Enterprise business, and Other revenue, including advertising and sponsorships[105](index=105&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, focusing on revenues, operating expenses, and net loss for the period - Total revenues decreased by **30%** to **$12.4 million** in Q1 2023, primarily due to a **$4.6 million** decrease in License Fees revenue and a **$0.8 million** decrease in Subscriptions revenue[111](index=111&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) - Operating expenses decreased by **46%** to **$20.2 million**, driven by a **$11.7 million** reduction in advertising and marketing, a **$2.8 million** decrease in cost of revenues, and a **$2.4 million** decrease in general and administrative expenses[111](index=111&type=chunk)[114](index=114&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk) - The operating loss decreased by **60%** to **$7.8 million**, and the net loss decreased by **51%** to **$7.7 million** in Q1 2023, compared to the prior year[111](index=111&type=chunk)[118](index=118&type=chunk)[123](index=123&type=chunk) Results of Operations Key Metrics | Metric | Q1 2023 (in thousands) | Q1 2022 (in thousands) | Change ($) | Change (%) | | :--------------------------------- | :--------------------- | :--------------------- | :--------- | :--------- | | Total Revenues | $12,387 | $17,627 | $(5,240) | (30%) | | Total operating expenses | $20,175 | $37,121 | $(16,946) | (46%) | | Operating loss | $(7,788) | $(19,494) | $11,706 | (60%) | | Net loss | $(7,751) | $(15,892) | $8,141 | (51%) | [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's cash position, cash flow activities, and ability to meet its financial obligations - As of March 31, 2023, the company had **$49.2 million** in cash and cash equivalents, including restricted cash. Management believes these levels are adequate to support operations for at least the next **twelve months**[124](index=124&type=chunk)[125](index=125&type=chunk) - Net cash used in operating activities decreased by **49%** to **$6.3 million** in Q1 2023, while investing activities provided **$15.0 million**, primarily from maturities of debt securities[127](index=127&type=chunk)[128](index=128&type=chunk)[132](index=132&type=chunk) - The company anticipates continued net losses due to significant operating and capital expenditures, with principal uses of cash being content acquisition, advertising, and working capital[126](index=126&type=chunk) Cash Flows Summary | Cash Flows (in thousands) | | :--------------------------------- | | **Q1 2023:** | | Net cash used in operating activities: $(6,308) | | Net cash provided by investing activities: $14,995 | | Net cash used in financing activities: $(26) | | Net increase in cash, cash equivalents and restricted cash: $8,661 | | **Q1 2022:** | | Net cash used in operating activities: $(12,287) | | Net cash provided by investing activities: $19,773 | | Net cash used in financing activities: $(137) | | Net increase in cash, cash equivalents and restricted cash: $7,349 | [Critical Accounting Policies and Estimates](index=28&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights the significant accounting policies and management judgments, particularly for content assets and revenue recognition - The company's critical accounting policies involve significant management judgment, particularly for content assets and revenue recognition[136](index=136&type=chunk) - Content assets are capitalized and amortized on an accelerated basis in the initial **two months** after publication or when significant content licensing occurs, reflecting observed upfront viewing patterns[138](index=138&type=chunk)[140](index=140&type=chunk) - Revenue recognition varies by type: subscriptions are recognized ratably over the membership period, license fees are recognized over the agreement term, and content licensing revenue is recognized once content is made available to the licensee[142](index=142&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk) [Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20Regarding%20Market%20Risk) This section indicates that there are no quantitative and qualitative disclosures regarding market risk applicable for this quarterly report - Not applicable for this quarterly report[148](index=148&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) As of March 31, 2023, the company's Chief Executive Officer and Chief Financial Officer concluded that its disclosure controls and procedures were effective. Furthermore, there were no material changes in internal control over financial reporting during the quarter - The CEO and CFO evaluated and concluded that the company's disclosure controls and procedures were effective as of March 31, 2023[150](index=150&type=chunk) - There were no material changes in the company's internal control over financial reporting during the quarter ended March 31, 2023[151](index=151&type=chunk) Part II. [Other Information](index=31&type=section&id=Part%20II.%20Other%20Information) This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings that are expected to have a material adverse effect on its business, results of operations, financial condition, or cash flows - No material adverse legal proceedings are currently pending against the company[154](index=154&type=chunk) [Item 1A. Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K filed on March 31, 2023 - No material changes from the risk factors previously disclosed in the Annual Report on Form 10-K filed on March 31, 2023[156](index=156&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports that there were no unregistered sales of equity securities or use of proceeds during the period - None[157](index=157&type=chunk) [Item 3. Defaults Upon Senior Securities](index=31&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section reports that there were no defaults upon senior securities during the period - None[158](index=158&type=chunk) [Item 4. Mine Safety Disclosures](index=31&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company - Not Applicable[159](index=159&type=chunk) [Item 5. Other Information](index=32&type=section&id=Item%205.%20Other%20Information) This section reports that there is no other information to disclose - None[160](index=160&type=chunk) [Item 6. Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of, or incorporated by reference into, the Quarterly Report on Form 10-Q, including various certifications and Inline XBRL documents - Exhibits include certifications from the CEO and CFO (31.1, 31.2, 32.1) and Inline XBRL documents (101.INS, 101.SCH, 101.CAL, 101.LAB, 101.PRE, 101.DEF, 104)[162](index=162&type=chunk) Part III. [Signatures](index=33&type=section&id=Part%20III.%20Signatures) This section contains the required executive signatures for the quarterly report [Signatures](index=33&type=section&id=SIGNATURES) This section contains the required signatures for the Quarterly Report on Form 10-Q, signed by Clint Stinchcomb, President and Chief Executive Officer, and Peter Westley, Chief Financial Officer and Treasurer, on May 11, 2023 - The Quarterly Report on Form 10-Q was signed by Clint Stinchcomb (President and CEO) and Peter Westley (CFO and Treasurer) on May 11, 2023[168](index=168&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K For the transition period from to Commission File Number: 001-39139 CURIOSITYSTREAM INC. (Exact name of registrant as specified in its charter) Delaware 84-1797523 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number) 8484 Georgia Ave., Suite 700 Silver Spring, Maryland 20910 (Address of principal executive offices) (Zip Code) (301) 755-2050 (Registrant's telephone number, inclu ...