CURI 10-K & 10-Q changes, risk factors and insider trading

Competitors include other entertainment video providers, such as MVPDs and SVOD services. Users may cancel our service for many reasons, including: a perception that they do not use the service sufficiently, the need to cut household expenses, selection of content is unsatisfactory, competitive services provide a better value or experience and customer service issues are not satisfactorily resolved. MembershipSubscriptions may also be impacted by our business relationships with our MVPDs, vMVPDs or other affiliates. For example, when one of our agreements with a Bundled Distribution partner was terminated in the third quarter of 2022, we experienced a decline in subscribers as a result of such termination. Adverse macroeconomic conditions, including inflation, may also adversely impact our ability to attract and retain users.

We must continually add new users both to replace cancelled users and to grow our business beyond our current user base. 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 membershipsubscription 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 are unable to successfully compete with current and new competitors in providing compelling content, retaining our existing users and attracting new users, our business will be adversely affected. Further, if excessive numbers of users cancel our service, we may elect to incur significantly higher marketing expenditures than we currently anticipate to replace these users with new users.

If consumers do not perceive our service offering to be of value, including if we introduce new or adjust existing features, adjust pricing or service offerings or change the mix of or our investment into our content in a manner that is not favorably received by them, we may not be able to attract and retain users, and accordingly, our revenue, including revenue per paying membership,subscription, and result of operations may be adversely affected. For example, in 2022, in an attempt to expand our service offerings, we introduced our first free ad-supported streaming channel, Curiosity Now, on the LG channel platform as well as our Smart Bundle plan. In addition, we may, from time to time, adjust our subscription pricing, our subscription plans, or our pricing model itself. These and other adjustments we have made or may make in the future may not be well-received by consumers and could negatively impact our ability to attract and retain subscribers, revenues per paying subscriber, revenue and our results of operations. In addition, we believe that many of our users rejoin our service or originate from word-of-mouth advertising from existing users. If our efforts to satisfy our existing users or adjustments to our service are not successful, we may not be able to attract or retain users, and as a result, our ability to maintain and/or grow our business will be adversely affected.

Since our inception, we have incurred significant operating losses, and as of December 31, 2024,2025, we had an accumulated deficit of $308.4$335.8 million. We incurred net losses of $12.9 million and $6.4 million for the years ended December 31, 2024 and December 31, 2025, respectively. Given the significant operating and capital expenditures associated with our business plan, we anticipate continuing to incur net losses for the foreseeable future. Even though we generated positive cash flow from operations for the yearyears ended December 31, 2024,2024 and December 31, 2025, this isrepresents a relatively recent trend for the first instance of such positive cash flow,Company, and we cannot assure you that we will sustain or increase positive cash flow in future periods. We incurred a net loss of $12.9 million for the year ended December 31, 2024, and despite this year's positive cash flow, ourOur ability to maintain and enhance cashliquidity flowsremains issubject uncertain.to significant uncertainty.

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. 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. 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.

In addition, a significant portion of the purchase price of companies we acquire may be allocated to acquired goodwill, which must be assessed for impairment at least annually. If our acquisitions do not yield expected returns, we may be required to take charges to our operating results based on this impairment assessment process, as was the case in 2022 and 2023.process. Acquisitions also could result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect our operating results.

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. Our content is primarily in the English language with subtitling or dubbing in Spanish, Mandarin, Russian, Swedish, German, Dutch, Danish, Finnish, Norwegian and Slovenian in parts of our library and the world where demand exists and we have the language version rights. Our rights to the international distribution of portions of our co-produced or licensed content are subject to certain geographic and platform or media restrictions. However, we intend to seek partnerships with strong platforms in international territories, subject, in each case, to any then-existing geographic and media restrictions on the distribution of any of our content. There can be no assurance that these international partnerships will be successful or result in our meeting revenue targets.

The CuriosityStream brand is only teneleven years old, and we must continue to build a strong brand identity. To succeed, we must continue to attract and retain a large number of new users which require us to make significant advertising and promotional expenditures. We believe that the importance of brand loyalty will increase with the continued proliferation of SVOD subscription services. 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.

Companies also may enter into business combinations or alliances that strengthen their competitive positions. 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.

We may incur non-cash impairment charges for our content assets, goodwillassets and other intangible assets and equity method investments which would negatively impact our business, financial condition and operating results.

It is possible that we may never realize the full value of our intangible assets. We regularly review our long-lived assets, including our content assets, goodwillassets and other finite-lived intangible assets for impairment. Goodwill is subject to impairment review on an annual basis and whenever potential impairment indicators are present. Other long-lived assets, including our content assets, and finite-lived intangible assets are reviewed when there is an indication that an impairment may have occurred.

In addition, companies in the streaming industry experienced a decline in market valuations during 2023, and the market price of our common shares declined significantly through the third quarter. Reflecting this market trend and due to the continued adverse macro and microeconomic conditions, including the competitive environment and its impact on our subscriber growth, we revised our forecasted subscriber growth and cash flow assumptions. Given these factors, as well as our continuing operating losses, we identified an indicator of impairment related to our content asset group and performed an analysis of content assets to assess if the fair value was less than unamortized cost. As a result of this impairment analysis of content assets, we recorded an impairment during the third quarter of 2023.

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. While historically we have experienced negative operating cash flows, in 2024 and 2025, we achieved positive net cash flow from operating activities. However, we may be unable to sustain a level of cash flows from operating activities or maintain the level of liquidity sufficient to permit us to pay our obligations, including amounts due under our streaming content obligations, and the principal, premium, if any, and interest on any debt we incur. We may or may not be able to accurately predict the ultimate impact on our levels of liquidity from our cash flows and such predictions are subject to change.

•political or social unrest, global hostilities and economic instability, including the ongoing military operations in Iran, escalating tensions in the Middle East, 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;

Our Common Stock and Warrants areis listed on NASDAQ.Nasdaq. We cannot assure you that our securities will continue to be listed on NASDAQNasdaq in the future. In order to continue listing our securities on NASDAQ,Nasdaq, we must maintain certain financial, distribution and stock price levels. Generally, we must maintain a minimum amount in stockholders’ equity (generally $2,500,000 for companies trading on NASDAQNasdaq), a minimum number of holders of our securities (generally 300 public holders) and a $1.00 minimum share price.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Since our Common Stock and Warrants areis listed on NASDAQ,Nasdaq, they are covered securities. Although the states are preempted from regulating the sale of covered securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. If we were to be no longer listed on NASDAQ,Nasdaq, our securities would not be covered securities and we would be subject to regulation in each state in which we offer our securities.

In particular, the shares of our Common Stock reserved for future issuance under our Omnibus Incentive Plan will become eligible for sale in the public market once those shares are issued, subject to provisions relating to various vesting agreements, lock-up agreements (if any) and, in some cases, limitations on volume and manner of sale applicable to affiliates under Rule 144, as applicable, and the general availability of Rule 144 to such affiliates. A total of 7,725,000 shares of our Common Stock were reserved for issuance under our Omnibus Incentive Plan at inception.inception, and an additional 3,000,000 shares were subsequently reserved for issuance under the Omnibus Incentive Plan following our 2025 Annual Meeting of Stockholders. In the future, we may also issue our securities in connection with investments or acquisitions. The amount of shares of our Common Stock issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding shares of Common Stock. Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to our stockholders.

We are ana “emerging"smaller growthreporting company,”company" and a "non-accelerated filer," and the reduced disclosure requirements applicable to emergingthese growth companiescategories may make our Common Stock less attractive to investors.

Section 404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls. For as long asAlthough we remainare no longer an emerging growth company, we willcurrently qualify as a 'non-accelerated filer' and a "smaller reporting company." As a non-accelerated filer, we are not be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting.reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act. However, in the event we are deemed to be an accelerated filer or a large accelerated filer—which would occur if our public float exceeds $75 million and our annual revenue exceeds $100 million, or otherwiseif noour longerpublic qualifyfloat asexceeds an$700 emerging growth company, million—we will be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting.requirement. 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 weaknessweaknesses in our disclosure controls and internal control over financial reporting hashave been discovered in the past and may be discovered in the future.

CuriosityStream’s award-winning content library features moreapproximately than 15,0006,000 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. Each week we launch new video titles, which are available on-demandon demand in high- or ultra-high definition. Through new and long-standing international partnerships, substantial portions of our video library have been localized from English into eleven different languages. The Company also aggregates rights to hundreds of thousandsmillions of video and audio programs, course materials and other assets to utilize on our own services as well as license to other media and technology companies.

Operating loss for the years ended December 31, 2024,2025, and 2023,2024, was $13.3$7.3 million and $44.5$13.3 million, respectively. The declinereduction in operating loss of $31.1$6.0 million, or 70%,45%, was primarily resulteddriven fromby thean decreasesincrease toof $20.5 million, or 40% in total revenue. This revenue growth was partially offset by an increase of $14.5 million, or 22% in our operating expenses of $36.9 million, or 36%,expenses, which morewas thanprimarily offsetattributable to higher revenue share and an increase in stock-based compensation charges during the decline in revenues of $5.8 million, or 10%, for the year ended December 31, 2024, compared to the year ended December 31, 2023.period.

Net loss for the years ended December 31, 2024,2025, and 2023,2024, was $12.9$6.4 million and $48.9$12.9 million, respectively, representing a decrease of $6.5 million, or 50% in net loss of $36.0 million, or 74%.loss. This improvement was primarily driven by a $31.1$6.0 million reduction in operating loss for 2024,2025. whichAdditional includescontributing thefactors absenceincluded of the $19.0 million impairment of content assets recognized in 2023. Aa decrease in losses from equity interestsmethod lossinvestments, andpartially anoffset increaseby inlower interest incomeincome. also contributed to this improvement, while theThe change in the fair value of the warrant liabilityliabilities had a minimal offsetting effect.effect on the overall results.

Since the Company was founded in 2015, we have generated thea majoritysignificant portion of our revenues from consumers directly accessing our content in the form of monthly or annual subscription plans. More recently, we have expanded our revenue streams through strategic content licensing arrangements. As a result of this expansion, Content Licensing has become a core component of our diversified revenue model, now contributing nearly as much to our total revenue as our Direct Business.

For the years ended December 31, 2024,2025, and 2023,2024, revenues totaled $51.1$71.7 million and $56.9$51.1 million, respectively, arepresenting decreasean increase of $5.8$20.5 million, or 10%.40%. This declinegrowth was primarily driven by declinesan increase of $25.4 million in Content Licensing andrevenue, Bundledwhich Distributionwas ofpartially $6.2offset by a $5.0 million, andor $2.2approximately million,13%, respectively,decrease whilein our Direct Business revenue increasedand bya $3.6$0.6 million, or 14%, decrease in Bundled Distribution revenue. Other revenue contributed an additional $0.6 million orin approximatelythe 10%.growth over the prior year.

WeFollowing beganthe implementingglobal aimplementation of price increaseadjustments for legacy subscribers—a process initiated in March 2023, startingwe continue to evaluate our pricing structures to align with English-speakingmarket countries, and it has now been applied globally across all markets. This adjustment impacted the majority of our Direct Business revenue.conditions. Alongside our standard subscription, we continue to offer the “Smart Bundle” service, which includes access to Tastemade, Kidstream, SommTV, and Curiosity University, with its pricing unchanged.University. Future adjustments to these subscription plans may be considered to further enhance revenue from thisour segment.legacy subscribers.

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

For the years ended December 31, 2024,2025, and 2023,2024, our Bundled Distribution revenue was $3.9$3.4 million and $6.1$3.9 million, respectively. This 35%The decline of $0.6 million, or 14%, was primarily thedue result ofto revised affiliate agreements and the non-renewal of certain partnerships. Bundled Distribution remainscontinues ato challengingface businessheadwinds givenresulting from the ongoing disruption inof the global linear paypay-television television business worldwide.industry.

We provide advertising and sponsorshipssponsorship services throughby developing integrated digital brand partnerships designed to offer CuriosityStream content in a variety of forms,forms. includingThese include short- and long-form program integration;integration, branded social media promotional videos;videos, and broadcast advertising spots inwithin our video and audio programsprograms. thatOur services are made available onvia our linear programming channels orchannels, in front of the paywall;paywall, and ourthrough an increasing focus on digital display adsads. whileAdditionally, deliveringwe ourdeliver content through advertising-based video-on-demand (AVOD), and free advertising-supported streaming television (FAST) platforms. This includes our dedicated YouTube channels (Curiosity and Curiosity University), where we generate advertising revenue from our digital content without transactional video-on-demand (TVOD) components. We continue to expand these offerings across YouTube and other similar ad-supported distribution channels.channels to maximize our brand reach and digital ad inventory.

For the year ended December 31, 2025, and 2024, other revenue was $1.4 million and $0.8 million, arespectively. declineThe increase of $1.0$0.6 millionmillion, or 54%78% from 2023. These declines were largelywas due to certainnew short-termFAST marketingand partnershipsAVOD revenue share arrangements that we entered into during the earlyprior partyear ofas 2023,well includingas arevenue campaignfrom thatlicensing weproprietary provided through a trade and barter arrangement that was not renewed in 2024.code.

For the years ended December 31, 2024,2025, and 2023,2024, our operating expenses were $64.5$79.0 million and $101.4$64.5 million, respectively, arepresenting decreasean increase of $36.9$14.5 million, or 36%.22%.

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

Distribution fees include payment processing fees and revenue share arrangements with our content, Smart Bundle and digital distributor partners, aspayment wellprocessing asfees and fees owed to the Spiegel Venture related to JV's streaming service. We pay a fixed percentage distribution fee to our partnersAI fortraining subscriberscontent accessingpartners. ourWe platformalso viapay Appfixed Servicespercentage fees to compensatecertain thesedistribution partners for accessallowing their subscriber base to theiraccess customerour andsubscription subscriber bases.platform. The MVPD, vMVPD and digital distributor partners making up our Partner Direct business pay us a license fee, and host and stream our content to their customers via their own platforms, such as set top boxes in the case of most MVPDs. We do not incur billing, streaming or backendback-end costs associated with content distribution through our MVPD, vMVPD and digital distributor partners.

Our advertising and marketing expenditures are a primary operating cost for our business.business, focused specifically on the acquisition and retention of Direct subscribers. While these costs may fluctuate based on advertisingour andspecific marketingoutreach objectives, we generallyprioritize focusthe allocation of marketing dollars ontoward efficient customer acquisition methods.methods for our streaming service. For the year ended December 31, 2024,2025, advertising and marketing expenses decreased to $14.4$14.0 million from $17.4$14.4 million in 2023.2024. ThisThe decrease of 3.00.4 million, or 17%,3%, reflects our efforts to optimize spending while maintaining our market presence and continuing to invest in strategic initiatives aimed at enhancing Direct subscriber engagement and retention, and driving long-term growth.

The fair value of ourthe Company's warrant liability iswas estimated using the Black-Scholes valuation modelmodel, thatwhich takestook into account a number of economic assumptions, including the market price of ourthe CommonCompany's Stockcommon stock and its expected volatility. Changes in these inputs from period to period may significantly affectaffected the reported changes in fair values.value during the periods the warrants were outstanding. As of December 31, 2025, there were no warrants outstanding, and the Company no longer carried a warrant liability on its consolidated balance sheet.

For the year ended December 31, 2024,2025, interest and other income increaseddecreased by $1.8$2.1 million,million. This decline was primarily duedriven toby the non-recurrence of a $1 million income recorded forin 2024 related to the Company’s Employee Retention Credit (ERC) claimclaim. totalingThe $1remaining million.variance was attributable to lower interest income earned on our cash and cash equivalent balances during the period.

During the year ended December 31, 2024,2025, we recorded a $2.5$0.2 million equity interests loss related to the equity investments in the Spiegel Venture and Nebula, compared to a $5.4$2.5 million loss in 2023.2024. The decreaseCompany no longer recognizes its share of losses from the Spiegel Venture, as the investment balance was fully reduced in losses is primarily2024 due to thecumulative $2.0losses millionin impairmentexcess charge recorded byof the cost basis of the investment. The Company continues to record its investmentshare inof Spiegelincome Ventureand duringlosses thefrom year ended December 31, 2023.Nebula.

For the years ended December 31, 2024,2025, and 2023,2024, we had aan income tax provision forof incomean taxesimmaterial ofamount and $0.1 million and $0.5 million, respectively,respectively. dueThese toresults generatingreflect pre-tax losses before income taxes in eachboth year.years, Thewith the 2024 provision for income taxes is primarily related to foreign withholding income taxes. OurThe provisiondifference forbetween incomeour taxeseffective differstax fromrate and the federal statutory rate is primarily due to the Company being in a full valuation allowance positionon our federal and notstate recognizing adeferred tax benefit attributable to generated losses for either federal or state income tax purposes.assets

As of December 31, 2024,2025, the Company’s cash and cash equivalents and restricted cash totaled $8.0$18.4 million, with an additional $31.7$9.0 million held in investments in debt securities that can be readily converted to cash to support ongoing operating cash flow needs. Our cash and cash equivalents primarily consist of short-term deposits and investments held at major global financial institutions. We regularly monitor the creditworthiness of these institutions and maintain a liquidity level sufficient to meet both short-term and long-term cash requirements.

We principally use cash principally to acquire content, promote our serviceservices through advertising and marketing,marketing and to provide for working capital to operatefor our business.operations. WeWhile we have experienced significant net losses since our inception, and while we generatehave generated positive cash flow from operating activities,activities wein anticipate2024 and 2025 and expect this trend to continue. We believe that weour current cash levels and investments, supplemented by anticipated operating cash flows and the availability under our new Credit Facility will continuebe to incur net losses due to the investments neededadequate to support our businessongoing plan.operations, capital expenditures, dividend payments, and working capital for at least the next twelve months from the date of this filing.

We have used, and expect to continue to use, cash on hand to fund our quarterly dividend, subject to Board approval and market conditions. As previouslyof discussed,December 31, 2025, we begancontinue enteringto intoutilize trade and barter transactionstransactions, a strategy initiated in the2023, secondto quarter of 2023 primarily for the purpose of exchangingexchange content assets through licensing agreementsagreements. with media counterparties. Our use of theseThese transactions has enabledallow us to acquire qualityhigh-quality, monetizable content that we can monetize through various distribution channels while preserving our cash liquidity.

On June 10, 2024, our Board authorized and approved a share repurchase program for up to $4 million of the then-outstanding shares of our common stock. Under the stock repurchase program, we may repurchase shares through open market purchases, privately negotiated transactions, block purchases, or otherwise in accordance with applicable federal securities laws. AsDuring ofthe year ended December 31, 2024, we had repurchased $251$0.3 thousandmillion of Commoncommon Stockstock under this program. No shares were repurchased during the year ended December 31, 2025. As of December 31, 2025, $3.7 million remains available for future repurchases under the Board-authorized program.

During the years ended December 31, 2024,2025, our net cash inflow from operating activities was $8.2$13.1 million compared to net cash used in operating activities of $16.2$8.2 million for 2023,2024, an increase in operating cash outflowinflow of of $24.3$4.9 million.

Although we reported a net loss of $12.9$6.4 million for the year ended December 31, 2024,2025, this amount reflected noncash items such as amortization of content assets, stock-based compensationcompensation, and equitychanges methodin investmentoperating lossassets and liabilities of $19.1$14.5 million, $6.6$14.4 million, and $2.5$4.3 million, respectively. Cash used during the year included a $1.8 million change in operating assets and liabilities and additions to content assetsassets, and changeamortization of contentpremiums liabilitiesand accretion of $5.7discounts millionassociated with investments in debt securities, net of $1.4 million, and $0.1$0.5 million, respectively.

For the year ended December 31, 2023,2024, we reported a net loss of $48.9$12.9 million. This amount reflected noncash items such as amortization of content assets, stock-based compensation and equity method investment loss of $22.9$19.1 million, $4.0$6.6 million and $5.4$2.5 million, respectively. Cash used during the year included additions to content assetsassets, and changes in content liabilities of $18.3$1.2 millionmillion, and $2.5$0.1 million, respectively, and changes in operating assets and liabilities of $1.4$1.8 million.

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

For the year ended December 31, 2024,2025, we recorded athe net cash outflowinflow usedprovided in investing activities of $31.4 million. The net cash outflow used inby investing activities was solelyprimarily duedriven toby purchases$30.6 million of investmentsmaturities and $5.0 million in sales of debt securities, partially offset by $12.3 million in purchase of debt securities. In contrast, for the year ended December 31, 2023,2024, our cash inflowsoutflows were primarily dueattributable to maturities$38.6 million in purchase of investmentsdebt securities, partially offset by $7.2 million in debt securities.maturities.

ThereExcept as set forth below, there have been no material changes from the risk factors previously disclosed under the heading “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on March 12, 2026.

The financial data in the following table sets forth selected financial information derived from our Unaudited Condensed Consolidated Financial Statements for the three and six months ended MarchJune 31,30, 2026, and 2025, and includes our results of operations as a percentage of revenue or as a percentage of costs, as applicable, for the periods indicated:

For the three months ended MarchJune 31,30, 2026, the Company reported an operating lossincome and net income of $1.5$9.2 million and $8.9 million, respectively, compared to anoperating operatingincome and net income of $0.1$0.5 million and $0.8 million, respectively, for the three months ended MarchJune 31,30, 2025. This $1.6 million decreaseimprovement in operating results was primarilyattributable to a $4.2 million, or 22%, increase in total revenue, driven by higher licensing revenue and a $1.7$4.5 million, or 11%,24%, increasedecrease in total operating expenses, largelydriven dueby toa higherreduction stock-basedin compensationcosts charges.across all operating expense categories.

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

The Company continually evaluates pricing structures to align with market conditions, including price adjustments for legacy subscribers initiated in March 2023 as well as March 2026. Alongside standard subscriptions, the Company offers the “Smart Bundle” service, which includes access to Tastemade, Kidstream, SOMM TV, and Curiosity University.

For the three and six months ended MarchJune 31,30, 2026, direct businesssubscription revenue decreased due to a lower overall subscriber count.count, However,partially thisoffset portionby ofan ourincrease businessin benefitedaverage frommonthly arevenue per paying subscriber reflecting the strategic price increaseincreases implemented in March 2026, which applied to our subscription offerings across our direct business platforms. Additionally, new partnerships and revised affiliate agreements drove a net increase in wholesale distribution revenue for the quarter.

TheLicensing growth induring licensingthe period was primarily driven by an increase in traditional cash licensing, including the long-term content license agreement with Curiosity Brands, as well as expanded barter activity. UnderBecause theseacquiring content under non-cash arrangements,barter thetransactions Company acquires additional content to expand its content library, which consequently requiredrequires the concurrent recognition of licensing revenue at the estimated fair value of the contentassets received.received, increased barter volume directly impacts recognized revenue. The volumefrequency and timing of these transactionsarrangements variesfluctuate based on the timing ofwhen content exchanges betweenare theexecuted Companywith and itsour partners.

The following table details cost of revenues for the three and six months ended MarchJune 31,30, 2026, and 2025:

Our advertising and marketing expenditures are a primary operating cost for our business, focused specifically on the acquisition and retention of Direct subscribers. While these costs may fluctuate based on our specific outreach objectives, we prioritize the allocation of marketing dollars toward efficient customer acquisition methods for our streaming service. For the three months ended March 31, 2026, advertising and marketing expenses increased by $0.6 million, compared to the same period in 2025. The increase primarily reflects expanded digital advertising efforts targeted at high-growth strategic initiatives. We continue to optimize our marketing mix to balance efficient spending with the maintenance of a robust market presence.

The following table details general and administrative costs for the three and six months ended MarchJune 31,30, 2026, and 2025:

For the three months ended MarchJune 31,30, 2026, general and administrative expenses increaseddecreased $0.5 million, or 8%, compared to $6.5 million from $5.0 million for the same period in 2025. The increase of $1.5 million, or 31% was2025, primarily driven by $1.4a $0.4 million higherdecrease in stock-based compensation expense resulting from the RSUs granted in July 2025 and during the period, and $0.3 million higher payroll and related primarily due to increased accruals for full-year incentive compensation. These increases were partially offset by a $0.1$0.2 million decrease in Professionalprofessional services, mainlyreflecting dueour ongoing commitment to lowerdisciplined legalexpense expense.management and operational efficiency.

Interest and other income for the three and six months ended MarchJune 31,30, 2026, was $0.2$0.1 million and $0.3 million, respectively, compared to $0.4 million and $0.9 million for the same periods in 2025. The decrease in 2026 was primarily due to less interest income earned resulting from an overall decrease in investment balance starting in 2025 and continued through the first quarterhalf of 2026.

For the three and six months ended MarchJune 31,30, 2026, the Company recorded an immaterial income compared to a losslosses of $0.2 million and $0.3 million for the same periodperiods in 2025.2025, respectively. The Company no longer recognizes its share of losses from the Spiegel Venture, as the investment balance was fully reduced in 2024 due to cumulative losses. The Company continues to record its share of income and losses from Nebula.

For the three months ended March 31, 2026 and 2025 income tax expense was immaterial. Our provision for income taxes differs from the federal statutory rate primarily due to the Company being in a full valuation allowance position and not recognizing a tax benefit attributable to generated losses for either federal or state income tax purposes.

As of MarchJune 31,30, 2026, the Company’s cash, cash equivalents and restricted cash totaled $17.0$5.4 million, with an additional $6.5$5.4 million held in investments in debt securities that can be readily converted to cash tosecurities.To support ongoing working capital and operational needs, the Company plans to leverage cash flowgenerated needs.from operations, as well as potential drawdowns on our credit facility if needed.

For the threesix months ended MarchJune 31,30, 2026, the Company generatedused $1.2$3.0 million of net cash fromin operating activities. Additionally, the Company generated $2.5$1.6 million in net cash from investing activities, mainly related to maturities of investments in debt securities. Net cash used in financing activities was $5.2$11.6 million, mainly due to dividends paid and repurchase of treasury stock.

As of MarchJune 31,30, 2026, we principally use cash to promote our services throughfor advertising and marketingmarketing, working capital, and toquarterly providedividend working capital for our operations.payments. While we have experienced net losses since inception, we have generated positive cash flow from operating activities in 2024 and 20252025, we experienced negative cash flows from operations for the three and expectsix thismonths trendended June 30, 2026. Although we continue to continue.focus on operational efficiency, operating cash flows may fluctuate in future periods. We believe that our current cash levels and investments, supplemented by anticipated operating cash flows and the availability under our new Credit Facilityflows, will be adequate to support our ongoing operations, capital expenditures, dividend payments, and working capital needs for at least the next twelve months from the date of this filing.

We have used, and expect to continue to use, cash generated from operations and cash on hand to fund our quarterly dividend, subject to Board approval and market conditions. As of MarchJune 31,30, 2026, we continue to utilize trade and barter transactions, a strategy initiated in 2023, to exchange content assets through licensing agreements. These transactions allow us to acquire high-quality, monetizable content while preserving our cash liquidity.

The following table provides details of dividends declared and paid as of MarchJune 31,30, 2026.

Our Board of Directors has declared the next cash dividend of $0.085 per share to be paid on JuneSeptember 19,18, 2026, for an expected aggregate amount of $5.0 million. Subject to future declaration by our Board of Directors, we intend to continue to pay regular quarterly cash dividends.

On June 10, 2024, our Board of Directors authorized and approved a share repurchase program for up to $4.0 million of the then-outstanding shares of our common stock. Under the stock repurchase program, we may repurchase shares through open market purchases, privately negotiated transactions, block purchases, or otherwise in accordance with applicable federal securities laws. On March 10, 2026, the Board authorized an additional $2.0 million for the purchase of the Company’s common stock under this existing program, increasing the total authorized amount to $6.0 million. Since the program’s inception through MarchJune 31,30, 2026, we had repurchased $0.6$1.1 million of common stock under this program. As of MarchJune 31,30, 2026, $5.4$4.9 million remains available for future repurchases under the Board-authorized program.

The following table presents our cash flows from operating, investing and financing activities for the threesix months ended MarchJune 31,30, 2026, and 2025:

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

For the threesix months ended MarchJune 31,30, 2026, our net cash fromused in operating activities was $1.2$3.0 million compared to $1.9$4.7 million for the same period in 2025.

For the threesix months ended MarchJune 31,30, 2026, net lossincome was $1.3$7.6 million. Operating cash flows reflected non-cash adjustments, including $3.7$8.0 million of amortization of content assets, $2.2$4.1 million of stock-based compensation and $0.2$0.4 million of other depreciation, amortization and non-cash items.items, Cashwhich useddo duringnot therepresent quartercash primarilyinflows consistedor ofoutflows aand $4.0are millionadded ofback additionsin reconciling net income to operating cash flow. Additions to content assets of $9.5 million, acquired primarily through barter activities, were similarly non-cash and $0.6are excluded from operating cash flow. Cash used during the period primarily consisted of a $13.1 million inflownet use of cash from changes in operating assets and liabilities.

For the threesix months ended MarchJune 31,30, 2026 and 2025, net cash used in financing activities was $5.2$11.6 million and $2.6$14.0 million, respectively,respectively. reflectingThe andecrease increasein cash used was primarily driven by a $2.8 million decrease in dividends paid and a $0.6 million decrease in payments related to tax withholding, partially offset by $0.9 million used for repurchases of $2.5common millionstock primarilyin due2026, towith dividendsno paid.comparable activity in 2025.

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

As of MarchJune 31,30, 2026, we had no off-balance sheet arrangements.

For more detailed information on our critical accounting policies, including those related to content assets, revenue recognition and trade and barter transactions, refer to the "Summary of Significant Accounting Policies" section in the Annual Report filed with the Securities and Exchange Commission on March 12, 2026. This comprehensive discussion helps to ensure that stakeholders have a complete understanding of the accounting methodologies and principles that influence the financial statements presented herein. During the quarter ended MarchJune 31,30, 2026, there were no significant changes made to the Company’s critical accounting policies from those disclosed in our Annual Report.