Curiositystream Annual Report 2021

CuriosityStream Annual Report 2021 Form 10-K (NASDAQ:CURI) Published: March 31st, 2021 PDF generated by stocklight.com UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 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 (I.R.S. Employer incorporation or organization) 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, including area code) Securities registered pursuant to section 12(b) of the Act: Title of each class Trading Symbol(s) Name of exchange on which registered Common Stock, par value $0.0001 CURI NASDAQ Warrants, each exercisable for one share of CURIW NASDAQ Common stock at an exercise price of $11.50 per share Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☒ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒ As of June 30, 2020, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the voting and non-voting common stock held by non-affiliates, computed by reference to the closing sales price of $10.05 reported on The Nasdaq Capital Market, was approximately $150.2 million. As of March 26, 2021, there were 52,548,000 shares of the registrant’s common stock, $0.0001 par value per share, issued and outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s definitive proxy statement relating to its annual meeting of stockholders to be held in 2021 (the “2021 Annual Meeting”), to be filed with the Securities and Exchange Commission (the “SEC”) within 120 days after the end of the fiscal year to which this Annual Report on Form 10-K relates, are incorporated by reference into Part III of this Annual Report on Form 10-K to the extent stated herein. Except with respect to information specifically incorporated by reference in this Annual Report on Form 10-K, such proxy statement is not deemed to be filed as part hereof. CURIOSITYSTREAM INC. TABLE OF CONTENTS Page PART I Item 1. Business 5 Item 1A. Risk Factors 10 Item 1B. Unresolved Staff Comments 35 Item 2. Properties 35 Item 3. Legal Proceedings 35 Item 4. Mine Safety Disclosures 35 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 36 Item 6. Selected Financial Data 36 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 37 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 45 Item 8. Financial Statements and Supplementary Data F-1 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 46 Item 9A. Controls and Procedures 46 Item 9B. Other Information 46 PART III Item 10. Directors, Executive Officers and Corporate Governance 47 Item 11. Executive Compensation 47 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 47 Item 13. Certain Relationships and Related Transactions, and Director Independence 47 Item 14. Principal Accounting Fees and Services 47 PART IV Item 15. Exhibits, Financial Statement Schedules 48 Item 16 Form 10-K Summary 49 i Part I CERTAIN DEFINED TERMS Each of the terms the “Company,” “we,” “our,” “us,” and similar terms used herein refer collectively to CuriosityStream Inc., a Delaware corporation, and its consolidated subsidiaries, unless otherwise stated. In this Annual Report on Form 10-K, unless otherwise stated or unless the context otherwise requires: “App Services” means applications developed for iOS, Android, streaming media player and smart tv operating systems. “Board” means the board of directors of the Company. “Bundled MVPD Business” refers to our ability to convey a broad scope of rights, including 24/7 “linear” channels, on-demand content library, mobile rights and/or pricing and packaging flexibility, in exchange for an annual fixed fee or fee per subscriber as part of a multi-year agreement. “Bundled MVPD Partners” means affiliate relationships with MVPDs, broadband and wireless companies in the U.S. and international territories. “Business Combination” means the acquisitions and transactions contemplated by the Merger Agreement. “Bylaws” means the Amended and Restated Bylaws of CuriosityStream Inc. “Charter” means the Second Amended and Restated Certificate of Incorporation of CuriosityStream Inc. “Common Stock” means the Common Stock of the Company, par value $0.0001 per share. “Code” means the Internal Revenue Code of 1986, as amended. “CSR” means corporate and social responsibility. “Legacy CuriosityStream” means Curiosity Inc., a Delaware corporation (formerly named CuriosityStream Operating Inc., and prior to the consummation of the Business Combination, CuriosityStream Inc.). “DGCL” means the Delaware General Corporation Law. “Direct Service” or “Direct Business” means App Services together with O&O Service. “Exchange Act” means the Securities Exchange Act of 1934, as amended. “GAAP” means United States generally accepted accounting principles, consistently applied, as in effect from time to time. “IPO” means the SAQN’s initial public offering of Units consummated on November 22, 2019. “JOBS Act” means the Jumpstart Our Business Startups Act of 2012, as amended. “LIBOR” means the London Interbank Offered Rate. “Merger” means the merger of Merger Sub with and into Legacy CuriosityStream. “Merger Sub” means CS Merger Sub, Inc., a Delaware corporation. “MVPDs” means multichannel video programming distributors. “NASDAQ” means The Nasdaq Capital Market. “O&O Service” means our owned and operated website. “Omnibus Incentive Plan” means our 2020 Omnibus Incentive Plan. 1 “Partner Direct Service” or “Partner Direct Business” means, collectively, MVPDs that include Comcast, Cox, Dish and NCTC and vMVPDs and digital distributors that include Amazon Prime Video Channels, Roku Channels, Sling TV and YouTube TV. “PIPE” means the issuance and sale to the PIPE Investors, an aggregate of 2,500,000 shares of Common Stock for an aggregate purchase price of $25,000,000 pursuant to Subscription Agreements between the Company and the PIPE Investors. “PIPE Investors” means certain third-party investors in the PIPE. “PIPE Warrants” means the 353,000 warrants issued to PIPE Investors in connection with our Business Combination. “Private Placement Warrants” means the 3,676,000 warrants issued to Software Acquisition Holdings LLC in a private placement that closed concurrently with our IPO. “Program Sales Business” means CuriosityStream’s program sales. “Public Warrants” means the 7,475,000 warrants sold as part of the Units in the IPO. “SAQN” means Software Acquisition Group Inc. prior to the consummation of the Business Combination. “Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002, as amended. “SEC” means the U.S. Securities and Exchange Commission. “Securities Act” means the Securities Act of 1933, as amended. “Sponsor” means the Company’s former sponsor, Software Acquisition Group LLC. “Sponsorship & Advertising Business” means the Company developing integrated

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